Table of Contents
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-1879
Janus Investment Fund
(Exact name of registrant as specified in charter)
151 Detroit Street, Denver, Colorado 80206
(Address of principal executive offices) (Zip code)
Stephanie Grauerholz, 151 Detroit Street, Denver, Colorado 80206
(Name and address of agent for service)
Registrant’s telephone number, including area code: 303-333-3863
Date of fiscal year end: 6/30
Date of reporting period: 6/30/15
Table of Contents
Item 1 – | Reports to Shareholders |
Table of Contents
annual report
June 30, 2015
INTECH Emerging Markets Managed Volatility Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
Table of Contents
INTECH Emerging Markets Managed Volatility Fund
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10 | ||||||||
12 | ||||||||
14 | ||||||||
15 | ||||||||
16 | ||||||||
19 | ||||||||
30 | ||||||||
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EX-99.CERT | ||||||||
EX-99.906CERT |
Table of Contents
INTECH Emerging Markets Managed Volatility Fund (unaudited)
FUND SNAPSHOT INTECH’s active approach focuses on adding value by selecting stocks with unique volatility characteristics and low correlations to one another. | Managed by INTECH Investment Management LLC |
PERFORMANCE OVERVIEW
From the Fund’s date of inception through June 30, 2015, INTECH Emerging Markets Managed Volatility Fund’s Class I Shares returned 5.90%. This compares to the 7.42% return posted by the MSCI Emerging Markets Index, the Fund’s benchmark.
INVESTMENT STRATEGY
INTECH’s mathematical investment process is designed to determine potentially more efficient equity weightings of the securities in the benchmark index, utilizing a specific mathematical optimization and disciplined rebalancing routine. Rather than trying to predict the future direction of stock prices, the process seeks to use the volatility and correlation characteristics of stocks to construct portfolios.
The investment process begins with the stocks in the MSCI Emerging Markets Index. INTECH’s investment process aims to capture stocks’ natural volatility through a rebalancing mechanism based on estimates of relative volatility and correlation in order to outperform the benchmark index over the long term. Within specific risk constraints, the investment process will tend to favor stocks with higher relative volatility and lower correlation as they offer more potential to capture volatility through periodic rebalancing. Once the target proportions are determined and the portfolio is constructed, it is then rebalanced to those target proportions and re-optimized on a periodic basis. The INTECH Emerging Markets Managed Volatility Fund focuses on seeking an excess return above the benchmark, while also reducing or managing the standard deviation of the portfolio depending on the market conditions, a strategy designed to manage the absolute risk of the portfolio.
PERFORMANCE REVIEW
The MSCI Emerging Markets Index posted a return of 7.42% from the Fund’s date of inception through June 30, 2015. INTECH Emerging Markets Managed Volatility Fund underperformed the MSCI Emerging Markets Index over the period and generated a return of 5.90%.
An overall decrease in market diversity over the period reflected a change in the distribution of capital, in which larger-cap stocks outperformed smaller cap stocks on average within the MSCI Emerging Markets Index. INTECH Emerging Markets Managed Volatility Fund, which tends to overweight smaller-cap stocks as they provide more relative volatility capture potential, was negatively impacted by the overall decrease in market diversity over the period.
On average, the Fund was overweight lower beta stocks or stocks with lower sensitivity to market movements which tend to be less volatile. During the period lower beta stocks underperformed higher beta stocks and the overall market, on average. Consequently, the Fund’s overweight to lower beta stocks detracted from the Fund’s relative return for the period.
The Fund’s active sector positioning tends to vary over time and is a function of the volatility and correlation characteristics of the underlying stocks. An average underweight allocation to the energy sector, which was the best performing sector during the period, as well as an average overweight allocation to the telecommunication services sector, detracted from the Fund’s relative performance during the period. However, stock selection, which is a residual of the investment process, contributed to the Fund’s relative performance during the period, especially within the industrials sector.
OUTLOOK
Because INTECH does not conduct traditional economic or fundamental analysis, INTECH has no view on individual stocks, sectors, economic, or market conditions. Going forward, we will continue building portfolios in a disciplined and deliberate manner, with risk management remaining the hallmark of our investment process. As INTECH’s ongoing research efforts yield modest improvements, we will continue implementing changes that we believe are likely to improve the long-term results for our Fund shareholders.
Thank you for your investment in INTECH Emerging Markets Managed Volatility Fund.
Janus Investment Fund | 1
Table of Contents
INTECH Emerging Markets Managed Volatility Fund (unaudited)
INTECH Emerging Markets Managed Volatility Fund At A Glance
5 Largest Equity Holdings – (% of Net Assets)
As of June 30, 2015
iShares India 50 Exchange-Traded Funds (ETFs) | 7.2% | |||
Chunghwa Telecom Co., Ltd. Diversified Telecommunication Services | 4.9% | |||
Public Bank Bhd Commercial Banks | 2.3% | |||
DiGi.Com Bhd Wireless Telecommunication Services | 1.7% | |||
Taiwan Mobile Co., Ltd. Wireless Telecommunication Services | 1.4% | |||
17.5% |
Asset Allocation – (% of Net Assets)
As of June 30, 2015
Emerging markets comprised 95.0% of total net assets.
*Includes Other of (2.1)%.
Top Country Allocations – Long Positions (% of Investment Securities)
As of June 30, 2015
2 | JUNE 30, 2015
Table of Contents
(unaudited)
Performance
Cumulative Total Return – for the period ended June 30, 2015 | Expense Ratios – per the December 17, 2014 prospectuses (estimated for the fiscal year) | ||||||
Since | Total Annual Fund | Net Annual Fund | |||||
Inception* | Operating Expenses | Operating Expenses | |||||
INTECH Emerging Markets Managed Volatility Fund – Class A Shares | |||||||
NAV | 5.70% | 2.03% | 1.41% | ||||
MOP | –0.38% | ||||||
INTECH Emerging Markets Managed Volatility Fund – Class C Shares | |||||||
NAV | 5.30% | 2.84% | 2.22% | ||||
CDSC | 4.30% | ||||||
INTECH Emerging Markets Managed Volatility Fund – Class D Shares(1) | 5.70% | 1.84% | 1.21% | ||||
INTECH Emerging Markets Managed Volatility Fund – Class I Shares | 5.90% | 1.73% | 1.11% | ||||
INTECH Emerging Markets Managed Volatility Fund – Class S Shares | 5.50% | 2.19% | 1.58% | ||||
INTECH Emerging Markets Managed Volatility Fund – Class T Shares | 5.70% | 1.94% | 1.33% | ||||
MSCI Emerging Markets IndexSM | 7.42% | ||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2016.
See important disclosures on the next page.
Janus Investment Fund | 3
Table of Contents
INTECH Emerging Markets Managed Volatility Fund (unaudited)
The expense ratios shown reflect estimated annualized expenses that the Fund expects to incur during its initial fiscal year.
Performance for very short time periods may not be indicative of future performance.
INTECH’s focus on managed volatility may keep the Fund from achieving excess returns over its index. The strategy may underperform during certain periods of up markets, and may not achieve the desired level of protection in down markets.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility, lower liquidity 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.
Standard deviation measures historical volatility. Higher standard deviation implies greater volatility. Beta is a measure of the volatility of a portfolio in comparison to a benchmark index.
Rankings are not provided for Funds that are less than one year old.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
The weighting of securities within the Fund’s portfolio may differ significantly from the weightings within the index. The index is unmanaged and not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
* | The Fund’s inception date – December 17, 2014 | |
(1) | Closed to certain new investors. |
4 | JUNE 30, 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 | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,038.30 | $ | 6.52 | $ | 1,000.00 | $ | 1,018.40 | $ | 6.46 | 1.29% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,034.40 | $ | 10.44 | $ | 1,000.00 | $ | 1,014.53 | $ | 10.34 | 2.07% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,038.30 | $ | 6.17 | $ | 1,000.00 | $ | 1,081.74 | $ | 6.11 | 1.22% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,040.30 | $ | 5.26 | $ | 1,000.00 | $ | 1,019.64 | $ | 5.21 | 1.04% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,036.30 | $ | 7.88 | $ | 1,000.00 | $ | 1,017.06 | $ | 7.80 | 1.56% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,038.30 | $ | 6.62 | $ | 1,000.00 | $ | 1,018.30 | $ | 6.56 | 1.31% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
Janus Investment Fund | 5
Table of Contents
INTECH Emerging Markets Managed Volatility Fund
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Common Stocks – 92.1% | ||||||||||
Aerospace & Defense – 0.5% | ||||||||||
4,000 | AviChina Industry & Technology Co., Ltd. – Class H | $ | 3,912 | |||||||
95 | Korea Aerospace Industries, Ltd. | 6,772 | ||||||||
10,684 | ||||||||||
Air Freight & Logistics – 0.8% | ||||||||||
91 | Hyundai Glovis Co., Ltd. | 16,483 | ||||||||
Airlines – 1.1% | ||||||||||
6,000 | Air China, Ltd. – Class B | 6,781 | ||||||||
10,000 | China Airlines, Ltd.* | 4,262 | ||||||||
6,000 | China Southern Airlines Co., Ltd. – Class Hß | 7,090 | ||||||||
6,000 | Eva Airways Corp.* | 4,094 | ||||||||
22,227 | ||||||||||
Auto Components – 1.3% | ||||||||||
7,000 | Cheng Shin Rubber Industry Co., Ltd. | 15,497 | ||||||||
181 | Halla Visteon Climate Control Corp. | 6,257 | ||||||||
57 | Hyundai Wia Corp. | 5,264 | ||||||||
27,018 | ||||||||||
Automobiles – 1.6% | ||||||||||
1,600 | Astra International Tbk PT | 849 | ||||||||
15,000 | Geely Automobile Holdings, Ltd. | 8,012 | ||||||||
500 | Great Wall Motor Co., Ltd. – Class Hß | 2,451 | ||||||||
15 | Hyundai Motor Co. | 1,829 | ||||||||
472 | Kia Motors Corp. | 19,173 | ||||||||
32,314 | ||||||||||
Building Products – 0.3% | ||||||||||
12 | KCC Corp. | 5,283 | ||||||||
Capital Markets – 0.1% | ||||||||||
146 | Brait SE | 1,481 | ||||||||
500 | China Galaxy Securities Co., Ltd. – Class H | 652 | ||||||||
1,000 | Yuanta Financial Holding Co., Ltd. | 541 | ||||||||
2,674 | ||||||||||
Chemicals – 0.6% | ||||||||||
40 | Hanwha Corp. | 1,693 | ||||||||
33 | Hyosung Corp. | 4,261 | ||||||||
19 | Lotte Chemical Corp. | 4,924 | ||||||||
1,000 | Taiwan Fertilizer Co., Ltd. | 1,653 | ||||||||
12,531 | ||||||||||
Commercial Banks – 16.7% | ||||||||||
11,000 | Agricultural Bank of China, Ltd. – Class H | 5,918 | ||||||||
7,400 | Alliance Financial Group Bhd | 8,615 | ||||||||
72,382 | Banco de Chile | 7,937 | ||||||||
8 | Banco de Credito e Inversiones | 352 | ||||||||
5,000 | Bank Central Asia Tbk PT | 5,064 | ||||||||
4,600 | Bank Mandiri Persero Tbk PT | 3,468 | ||||||||
5,400 | Bank Negara Indonesia Persero Tbk PT | 2,147 | ||||||||
4,000 | Bank of China, Ltd. – Class H | 2,601 | ||||||||
3,000 | Bank of Communications Co., Ltd – Class H | 3,127 | ||||||||
5,660 | Bank of the Philippine Islands | 11,865 | ||||||||
3,000 | Bank Rakyat Indonesia Persero Tbk PT | 2,329 | ||||||||
9,120 | BDO Unibank, Inc. | 21,930 | ||||||||
599 | BNK Financial Group, Inc. | 7,627 | ||||||||
112 | Capitec Bank Holdings, Ltd. | 4,468 | ||||||||
24,000 | Chang Hwa Commercial Bank, Ltd. | 13,769 | ||||||||
7,000 | China CITIC Bank Corp., Ltd. – Class H* | 5,581 | ||||||||
9,000 | China Construction Bank Corp. – Class H | 8,220 | ||||||||
4,000 | China Development Financial Holding Corp. | 1,517 | ||||||||
17,000 | China Everbright Bank Co., Ltd. – Class H | 10,198 | ||||||||
1,000 | China Merchants Bank Co., Ltd. – Class H | 2,916 | ||||||||
3,000 | China Minsheng Banking Corp., Ltd. – Class H | 3,932 | ||||||||
9,000 | Chongqing Rural Commercial Bank Co., Ltd. – Class H | 7,210 | ||||||||
3,829 | Commercial International Bank Egypt SAE | 28,335 | ||||||||
677,311 | Corpbanca SA | 7,481 | ||||||||
2,000 | CTBC Financial Holding Co., Ltd. | 1,575 | ||||||||
224 | DGB Financial Group, Inc. | 2,350 | ||||||||
1,000 | E.Sun Financial Holding Co., Ltd. | 668 | ||||||||
17,000 | First Financial Holding Co., Ltd. | 10,414 | ||||||||
3,100 | Hong Leong Bank Bhd | 11,016 | ||||||||
4,000 | Hua Nan Financial Holdings Co., Ltd. | 2,301 | ||||||||
3,000 | Industrial & Commercial Bank of China, Ltd. – Class H | 2,384 | ||||||||
332 | Industrial Bank of Korea | 4,302 | ||||||||
100 | Kasikornbank PCL | 560 | ||||||||
49 | KB Financial Group, Inc. | 1,621 | ||||||||
107 | Komercni Banka A/S | 23,742 | ||||||||
13,800 | Krung Thai Bank PCL | 6,989 | ||||||||
7,000 | Mega Financial Holding Co., Ltd. | 6,307 | ||||||||
158 | OTP Bank PLC | 3,129 | ||||||||
9,700 | Public Bank Bhd | 48,153 | ||||||||
308 | Qatar National Bank SAQ | 16,318 | ||||||||
3,000 | SinoPac Financial Holdings Co., Ltd. | 1,327 | ||||||||
48,116 | Taiwan Cooperative Financial Holding Co., Ltd. | 25,187 | ||||||||
344,950 | ||||||||||
Commercial Services & Supplies – 0.6% | ||||||||||
8 | KEPCO Plant Service & Engineering Co., Ltd. | 846 | ||||||||
161 | S-1 Corp. | 11,333 | ||||||||
12,179 | ||||||||||
Communications Equipment – 0.1% | ||||||||||
640 | ZTE Corp. – Class H | 1,628 | ||||||||
Construction & Engineering – 1.8% | ||||||||||
5,000 | China Communications Construction Co., Ltd. – Class H | 7,483 | ||||||||
4,500 | China Railway Construction Corp., Ltd. – Class H | 6,955 | ||||||||
8,000 | China Railway Group, Ltd. – Class H | 8,638 | ||||||||
800 | Gamuda Bhd | 991 | ||||||||
28 | Hyundai Development Co. | 1,662 | ||||||||
6,700 | IJM Corp. Bhd | 11,584 | ||||||||
37,313 | ||||||||||
Construction Materials – 0.9% | ||||||||||
2,000 | Anhui Conch Cement Co., Ltd. – Class H | 7,018 | ||||||||
1,000 | Asia Cement Corp. | 1,183 | ||||||||
4,000 | China National Building Material Co., Ltd. – Class H | 3,783 | ||||||||
400 | Siam Cement PCL | 6,136 | ||||||||
18,120 | ||||||||||
Containers & Packaging – 0.1% | ||||||||||
400 | Klabin SA | 2,457 | ||||||||
Diversified Financial Services – 1.4% | ||||||||||
670 | Ayala Corp. | 11,741 | ||||||||
3,000 | Chailease Holding Co., Ltd. | 7,235 | ||||||||
2,000 | Fubon Financial Holding Co., Ltd. | 3,980 | ||||||||
125 | GT Capital Holdings, Inc. | 3,788 | ||||||||
113 | PSG Group, Ltd. | 1,905 | ||||||||
28,649 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
6 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Diversified Telecommunication Services – 6.8% | ||||||||||
32,000 | Chunghwa Telecom Co., Ltd. | $ | 102,061 | |||||||
7,600 | Telekom Malaysia Bhd | 13,181 | ||||||||
57,100 | Telekomunikasi Indonesia Persero Tbk PT | 12,551 | ||||||||
38,900 | True Corp. PCL* | 13,133 | ||||||||
140,926 | ||||||||||
Electric Utilities – 1.4% | ||||||||||
571 | CEZ A/S | 13,270 | ||||||||
937 | Energa SA | 5,669 | ||||||||
1,417 | PGE Polska Grupa Energetyczna SA | 6,953 | ||||||||
1,100 | Tenaga Nasional Bhd | 3,687 | ||||||||
29,579 | ||||||||||
Electronic Equipment, Instruments & Components – 1.6% | ||||||||||
6,000 | AU Optronics Corp. | 2,655 | ||||||||
4,000 | Innolux Corp. | 2,087 | ||||||||
141 | LG Display Co., Ltd. | 3,268 | ||||||||
223 | Samsung Electro-Mechanics Co., Ltd. | 10,218 | ||||||||
1,000 | Simplo Technology Co., Ltd. | 4,635 | ||||||||
1,000 | Synnex Technology International Corp. | 1,483 | ||||||||
1,000 | TPK Holding Co., Ltd. | 5,786 | ||||||||
3,000 | WPG Holdings, Ltd. | 3,758 | ||||||||
33,890 | ||||||||||
Energy Equipment & Services – 0.1% | ||||||||||
2,000 | CRRC Corp., Ltd. – Class H* | 3,070 | ||||||||
Food & Staples Retailing – 2.4% | ||||||||||
10,200 | CP ALL PCL | 13,971 | ||||||||
3 | E-Mart Co., Ltd. | 621 | ||||||||
202 | Massmart Holdings, Ltd. | 2,484 | ||||||||
3,000 | President Chain Store Corp. | 21,101 | ||||||||
56 | Spar Group, Ltd. | 874 | ||||||||
4,000 | Sun Art Retail Group, Ltd. | 3,602 | ||||||||
3,200 | Wal-Mart de Mexico SAB de CV | 7,785 | ||||||||
50,438 | ||||||||||
Food Products – 2.1% | ||||||||||
6,500 | Charoen Pokphand Foods PCL | 4,620 | ||||||||
1,000 | China Mengniu Dairy Co., Ltd. | 4,986 | ||||||||
7 | CJ CheilJedang Corp. | 2,768 | ||||||||
300 | Gruma SAB de CV – Class B | 3,856 | ||||||||
5,900 | Indofood Sukses Makmur Tbk PT | 2,910 | ||||||||
5,500 | Thai Union Frozen Products PCL | 3,551 | ||||||||
3,030 | Universal Robina Corp. | 13,040 | ||||||||
7,000 | Want Want China Holdings, Ltd. | 7,405 | ||||||||
43,136 | ||||||||||
Gas Utilities – 0.6% | ||||||||||
2,000 | China Resources Gas Group, Ltd. | 5,935 | ||||||||
20,600 | Perusahaan Gas Negara Persero Tbk PT | 6,668 | ||||||||
12,603 | ||||||||||
Health Care Providers & Services – 2.0% | ||||||||||
26,600 | Bangkok Dusit Medical Services PCL | 15,519 | ||||||||
400 | Bumrungrad Hospital PCL | 2,215 | ||||||||
4,300 | IHH Healthcare Bhd | 6,454 | ||||||||
305 | Mediclinic International, Ltd. | 2,568 | ||||||||
122 | Netcare, Ltd. | 384 | ||||||||
3,100 | Shanghai Pharmaceuticals Holding Co., Ltd. – Class H | 8,639 | ||||||||
1,200 | Sinopharm Group Co., Ltd. – Class H | 5,333 | ||||||||
41,112 | ||||||||||
Hotels, Restaurants & Leisure – 0.8% | ||||||||||
2,010 | Jollibee Foods Corp. | 8,797 | ||||||||
124 | Kangwon Land, Inc. | 4,114 | ||||||||
4,180 | Minor International PCL | 3,714 | ||||||||
16,625 | ||||||||||
Household Durables – 1.5% | ||||||||||
197 | Coway Co., Ltd. | 16,146 | ||||||||
25 | Hanssem Co., Ltd. | 6,299 | ||||||||
1,367 | Steinhoff International Holdings, Ltd. | 8,658 | ||||||||
31,103 | ||||||||||
Household Products – 0.8% | ||||||||||
10 | LG Household & Health Care, Ltd. | 6,940 | ||||||||
3,600 | Unilever Indonesia Tbk PT | 10,668 | ||||||||
17,608 | ||||||||||
Independent Power and Renewable Electricity Producers – 2.4% | ||||||||||
14,100 | Aboitiz Power Corp. | 14,231 | ||||||||
6,444 | AES Gener SA | 3,672 | ||||||||
1,897 | Colbun SA | 540 | ||||||||
81,300 | Energy Development Corp. | 13,490 | ||||||||
2,000 | Huadian Power International Corp., Ltd. – Class H | 2,217 | ||||||||
8,000 | Huaneng Power International, Inc. – Class H | 11,147 | ||||||||
10,000 | Huaneng Renewables Corp., Ltd. – Class H | 4,038 | ||||||||
49,335 | ||||||||||
Industrial Conglomerates – 4.2% | ||||||||||
6,830 | Aboitiz Equity Ventures, Inc. | 8,795 | ||||||||
1,000 | Beijing Enterprises Holdings, Ltd. | 7,528 | ||||||||
5,000 | CITIC, Ltd. | 8,966 | ||||||||
6,100 | DMCI Holdings, Inc. | 1,786 | ||||||||
1,000 | Far Eastern New Century Corp. | 1,060 | ||||||||
13,760 | JG Summit Holdings, Inc. | 21,886 | ||||||||
135 | LG Corp. | 7,481 | ||||||||
1,000 | Shanghai Industrial Holdings, Ltd. | 3,393 | ||||||||
1,200 | Sime Darby Bhd | 2,711 | ||||||||
48 | SK Holdings Co., Ltd. | 8,522 | ||||||||
710 | SM Investments Corp. | 14,096 | ||||||||
86,224 | ||||||||||
Information Technology Services – 0.5% | ||||||||||
44 | SK C&C Co., Ltd. | 10,909 | ||||||||
Insurance – 2.3% | ||||||||||
1,000 | Cathay Financial Holding Co., Ltd. | 1,747 | ||||||||
5,000 | China Life Insurance Co., Ltd. | 5,121 | ||||||||
73 | Dongbu Insurance Co., Ltd. | 3,698 | ||||||||
366 | Hyundai Marine & Fire Insurance Co., Ltd. | 9,682 | ||||||||
300 | New China Life Insurance Co., Ltd. – Class H | 1,792 | ||||||||
5,000 | People’s Insurance Co. Group of China, Ltd. – Class H | 3,200 | ||||||||
44 | Samsung Fire & Marine Insurance Co., Ltd. | 11,600 | ||||||||
34,000 | Shin Kong Financial Holding Co., Ltd. | 10,381 | ||||||||
47,221 | ||||||||||
Internet Software & Services – 0.3% | ||||||||||
12 | NAVER Corp. | 6,822 | ||||||||
Machinery – 0.3% | ||||||||||
1,000 | Haitian International Holdings, Ltd. | 2,351 | ||||||||
1,000 | Weichai Power Co., Ltd. – Class H | 3,335 | ||||||||
5,686 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
INTECH Emerging Markets Managed Volatility Fund
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Marine – 0.5% | ||||||||||
10,500 | China COSCO Holdings Co., Ltd. – Class H* | $ | 6,787 | |||||||
2,000 | China Shipping Container Lines Co., Ltd. – Class H* | 782 | ||||||||
1,700 | MISC Bhd | 3,480 | ||||||||
11,049 | ||||||||||
Media – 0.5% | ||||||||||
97 | Cheil Worldwide, Inc.* | 1,505 | ||||||||
1,194 | Cyfrowy Polsat SA* | 7,513 | ||||||||
4,000 | Surya Citra Media Tbk PT | 863 | ||||||||
9,881 | ||||||||||
Metals & Mining – 2.5% | ||||||||||
19,000 | China Steel Corp. | 15,180 | ||||||||
6,500 | Fosun International, Ltd. | 15,295 | ||||||||
1,608 | Gold Fields, Ltd. | 5,154 | ||||||||
44 | Hyundai Steel Co. | 2,671 | ||||||||
8 | Korea Zinc Co., Ltd. | 3,910 | ||||||||
269 | Severstal PAO (GDR) | 2,846 | ||||||||
18,000 | Zijin Mining Group Co., Ltd. – Class H | 6,340 | ||||||||
51,396 | ||||||||||
Multi-Utilities – 0.2% | ||||||||||
63 | Qatar Electricity & Water Co QSC | 3,945 | ||||||||
2,400 | YTL Corp. Bhd | 987 | ||||||||
4,932 | ||||||||||
Multiline Retail – 0.1% | ||||||||||
23 | Hyundai Department Store Co., Ltd. | 3,032 | ||||||||
Oil, Gas & Consumable Fuels – 0.9% | ||||||||||
5,000 | China Coal Energy Co., Ltd. – Class H | 2,987 | ||||||||
44 | GS Holdings Corp. | 1,963 | ||||||||
30 | MOL Hungarian Oil & Gas PLC | 1,536 | ||||||||
432 | Polski Koncern Naftowy Orlen SA | 8,486 | ||||||||
46 | S-Oil Corp.* | 2,788 | ||||||||
17 | SK Innovation Co., Ltd.* | 1,860 | ||||||||
19,620 | ||||||||||
Paper & Forest Products – 0.4% | ||||||||||
725 | Empresas CMPC SA | 1,973 | ||||||||
500 | Fibria Celulose SA | 6,824 | ||||||||
8,797 | ||||||||||
Personal Products – 0.7% | ||||||||||
10 | Amorepacific Corp. | 3,748 | ||||||||
24 | AMOREPACIFIC Group | 4,025 | ||||||||
500 | Hengan International Group Co., Ltd. | 5,941 | ||||||||
13,714 | ||||||||||
Pharmaceuticals – 2.8% | ||||||||||
54 | Celltrion, Inc. | 3,777 | ||||||||
4,000 | China Medical System Holdings, Ltd. | 5,604 | ||||||||
17 | Hanmi Pharm Co., Ltd. | 7,119 | ||||||||
29,400 | Kalbe Farma Tbk PT | 3,694 | ||||||||
1,500 | Shanghai Fosun Pharmaceutical Group Co., Ltd. – Class H | 5,564 | ||||||||
24,000 | Sihuan Pharmaceutical Holdings Group, Ltd.ß | 13,655 | ||||||||
4,000 | Sino Biopharmaceutical, Ltd. | 4,644 | ||||||||
53 | Yuhan Corp. | 12,974 | ||||||||
57,031 | ||||||||||
Real Estate Management & Development – 1.5% | ||||||||||
13,200 | Ayala Land, Inc. | 10,922 | ||||||||
3,000 | Evergrande Real Estate Group, Ltd. | 1,792 | ||||||||
4,000 | Franshion Properties China, Ltd. | 1,430 | ||||||||
2,000 | Goldin Properties Holdings, Ltd.* | 2,113 | ||||||||
2,000 | Highwealth Construction Corp. | 4,771 | ||||||||
500 | Longfor Properties Co., Ltd. | 796 | ||||||||
53,800 | Megaworld Corp. | 5,681 | ||||||||
2,600 | SM Prime Holdings, Inc. | 1,152 | ||||||||
838 | Talaat Moustafa Group | 982 | ||||||||
6,000 | Yuexiu Property Co., Ltd. | 1,308 | ||||||||
30,947 | ||||||||||
Road & Rail – 0.6% | ||||||||||
43,100 | BTS Group Holdings PCL | 12,764 | ||||||||
Semiconductor & Semiconductor Equipment – 2.0% | ||||||||||
3,000 | Advanced Semiconductor Engineering, Inc. | 4,064 | ||||||||
4,000 | Epistar Corp. | 5,348 | ||||||||
52,000 | Hanergy Thin Film Power Group, Ltd.*,ß | 10,063 | ||||||||
1,000 | Novatek Microelectronics Corp. | 4,829 | ||||||||
1,000 | Realtek Semiconductor Corp. | 2,564 | ||||||||
18,000 | Semiconductor Manufacturing International Corp.* | 1,974 | ||||||||
4,000 | Siliconware Precision Industries Co., Ltd. | 6,126 | ||||||||
178 | SK Hynix, Inc. | 6,752 | ||||||||
41,720 | ||||||||||
Software – 0.7% | ||||||||||
79 | NCSoft Corp. | 14,062 | ||||||||
Specialty Retail – 0.7% | ||||||||||
29,000 | GOME Electrical Appliances Holding, Ltd. | 6,398 | ||||||||
89 | Hotel Shilla Co., Ltd. | 8,898 | ||||||||
15,296 | ||||||||||
Technology Hardware, Storage & Peripherals – 2.4% | ||||||||||
13,000 | Acer, Inc.* | 6,299 | ||||||||
1,000 | Asustek Computer, Inc. | 9,740 | ||||||||
2,000 | Chicony Electronics Co., Ltd. | 5,368 | ||||||||
3,000 | Compal Electronics, Inc. | 2,285 | ||||||||
2,000 | HTC Corp.* | 4,668 | ||||||||
4,000 | Inventec Corp. | 2,768 | ||||||||
2,000 | Lenovo Group, Ltd. | 2,771 | ||||||||
2,000 | Lite-On Technology Corp. | 2,347 | ||||||||
2,000 | Pegatron Corp. | 5,854 | ||||||||
1,000 | Quanta Computer, Inc. | 2,366 | ||||||||
2 | Samsung Electronics Co., Ltd. | 2,274 | ||||||||
3,000 | Wistron Corp. | 2,275 | ||||||||
49,015 | ||||||||||
Textiles, Apparel & Luxury Goods – 3.5% | ||||||||||
8,000 | ANTA Sports Products, Ltd. | 19,403 | �� | |||||||
1,000 | Eclat Textile Co., Ltd. | 16,401 | ||||||||
1,000 | Feng TAY Enterprise Co., Ltd. | 5,802 | ||||||||
8,000 | Pou Chen Corp. | 11,409 | ||||||||
4,000 | Shenzhou International Group Holdings, Ltd. | 19,455 | ||||||||
72,470 | ||||||||||
Tobacco – 1.7% | ||||||||||
2,700 | Gudang Garam Tbk PT | 9,135 | ||||||||
302 | KT&G Corp. | 25,699 | ||||||||
34,834 | ||||||||||
Transportation Infrastructure – 2.9% | ||||||||||
1,100 | Airports of Thailand PCL | 9,871 | ||||||||
4,000 | Beijing Capital International Airport Co., Ltd. – Class H | 4,614 | ||||||||
6,000 | COSCO Pacific, Ltd. | 8,143 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Transportation Infrastructure – (continued) | ||||||||||
700 | Grupo Aeroportuario del Pacifico SAB de CV – Class B | $ | 4,798 | |||||||
2,520 | International Container Terminal Services, Inc. | 6,160 | ||||||||
10,000 | Jiangsu Expressway Co., Ltd. – Class H | 13,133 | ||||||||
10,000 | Zhejiang Expressway Co., Ltd. – Class H | 13,882 | ||||||||
60,601 | ||||||||||
Water Utilities – 0.7% | ||||||||||
7,286 | Aguas Andinas SA – Class A | 4,147 | ||||||||
8,000 | Guangdong Investment, Ltd. | 11,209 | ||||||||
15,356 | ||||||||||
Wireless Telecommunication Services – 8.8% | ||||||||||
3,400 | Advanced Info Service PCL | 24,166 | ||||||||
15,500 | Axiata Group Bhd | 26,306 | ||||||||
1,000 | China Mobile, Ltd. | 12,804 | ||||||||
24,400 | DiGi.Com Bhd | 34,681 | ||||||||
9,000 | Far EasTone Telecommunications Co., Ltd. | 21,762 | ||||||||
120 | Globe Telecom, Inc. | 6,682 | ||||||||
10,200 | Maxis Bhd | 17,230 | ||||||||
30 | Philippine Long Distance Telephone Co. | 1,870 | ||||||||
9,000 | Taiwan Mobile Co., Ltd. | 30,047 | ||||||||
8,300 | Tower Bersama Infrastructure Tbk PT* | 5,744 | ||||||||
181,292 | ||||||||||
Total Common Stocks (cost $1,923,212) | 1,908,606 | |||||||||
Preferred Stocks – 1.0% | ||||||||||
Automobiles – 0.2% | ||||||||||
46 | Hyundai Motor Co. | 4,331 | ||||||||
Paper & Forest Products – 0.4% | ||||||||||
1,500 | Suzano Papel e Celulose SA – Class A | 7,982 | ||||||||
Personal Products – 0.2% | ||||||||||
25 | Amorepacific Corp. | 4,596 | ||||||||
Technology Hardware, Storage & Peripherals – 0.2% | ||||||||||
3 | Samsung Electronics Co., Ltd. | 2,671 | ||||||||
Total Preferred Stocks (cost $19,921) | 19,580 | |||||||||
Investment Companies – 9.0% | ||||||||||
Exchange-Traded Funds (ETFs) – 7.2% | ||||||||||
5,000 | iShares India 50# | 149,300 | ||||||||
Investments Purchased with Cash Collateral from Securities Lending – 0.1% | ||||||||||
3,025 | Janus Cash Collateral Fund LLC, 0.1304%°°,£ | 3,025 | ||||||||
Money Markets – 1.7% | ||||||||||
35,000 | Janus Cash Liquidity Fund LLC, 0.1291%°°,£ | 35,000 | ||||||||
Total Investment Companies (cost $186,216) | 187,325 | |||||||||
Total Investments (total cost $2,129,349) – 102.1% | 2,115,511 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (2.1)% | (44,141) | |||||||||
Net Assets – 100% | $ | 2,071,370 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Taiwan | $ | 435,658 | 20 | .6% | ||||
China | 402,314 | 19 | .0 | |||||
South Korea | 329,423 | 15 | .6 | |||||
Malaysia | 189,076 | 8 | .9 | |||||
Philippines | 177,912 | 8 | .4 | |||||
India | 149,300 | 7 | .1 | |||||
Thailand | 117,209 | 5 | .5 | |||||
Indonesia | 62,331 | 3 | .0 | |||||
United States | 38,025 | 1 | .8 | |||||
Egypt | 29,317 | 1 | .4 | |||||
Poland | 28,621 | 1 | .4 | |||||
South Africa | 27,976 | 1 | .3 | |||||
France | 27,889 | 1 | .3 | |||||
Chile | 21,955 | 1 | .0 | |||||
Qatar | 20,263 | 1 | .0 | |||||
Brazil | 17,263 | 0 | .8 | |||||
Mexico | 16,439 | 0 | .8 | |||||
Czech Republic | 13,270 | 0 | .6 | |||||
Hungary | 4,665 | 0 | .2 | |||||
Hong Kong | 3,759 | 0 | .2 | |||||
Russia | 2,846 | 0 | .1 | |||||
Total | $ | 2,115,511 | 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
MSCI Emerging Markets IndexSM | A free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. | |
GDR | Global Depositary Receipt | |
LLC | Limited Liability Company | |
PCL | Public Company Limited | |
PLC | Public Limited Company |
* | Non-income producing security. |
ß | Security is illiquid. | |
°° | Rate shown is the 7-day yield as of June 30, 2015. | |
# | Loaned security; a portion of the security is on loan at June 30, 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 June 30, 2015. Unless otherwise indicated, all information in the table is for the period ended June 30, 2015. |
Share | Share | |||||||||||||||
Balance | Balance | Realized | Dividend | Value | ||||||||||||
at 6/30/14 | Purchases | Sales | at 6/30/15 | Gain/(Loss) | Income | at 6/30/15 | ||||||||||
INTECH Emerging Markets Managed Volatility Fund | ||||||||||||||||
Janus Cash Collateral Fund LLC | – | 431,000 | (427,975) | 3,025 | $– | $61(1) | $ 3,025 | |||||||||
Janus Cash Liquidity Fund LLC | – | 1,268,023 | (1,233,023) | 35,000 | – | 34 | 35,000 | |||||||||
Total | $– | $ 95 | $38,025 | |||||||||||||
(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 June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
INTECH Emerging Markets Managed Volatility Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
Airlines | $ | 15,446 | $ | 6,781 | $ | – | |||||
Automobiles | 29,863 | 2,451 | – | ||||||||
Pharmaceuticals | 43,376 | – | 13,655 | ||||||||
Semiconductor & Semiconductor Equipment | 31,657 | – | 10,063 | ||||||||
All Other | 1,755,314 | – | – | ||||||||
Preferred Stocks | – | 19,580 | – | ||||||||
Investment Companies | 149,300 | 38,025 | – | ||||||||
Total Assets | $ | 2,024,956 | $ | 66,837 | $ | 23,718 | |||||
10 | JUNE 30, 2015
Table of Contents
Level 3 Valuation Reconciliation of Assets (for the period ended June 30, 2015)
Change in | |||||||||||||||||||||||
Balance | Realized | Unrealized | Transfers In | Balance | |||||||||||||||||||
as of | Gain/ | Appreciation/ | and/or | as of | |||||||||||||||||||
June 30, 2014 | (Loss) | Depreciation(a) | Gross Purchases | Gross Sales | Out of Level 3 | June 30, 2015 | |||||||||||||||||
Investments in Securities: | |||||||||||||||||||||||
INTECH Emerging Markets Managed Volatility Fund | |||||||||||||||||||||||
Common Stock | |||||||||||||||||||||||
Pharmaceuticals | $ | – | $ | – | $ | (1,557) | $ | 15,212 | $ | – | $ | – | $ | 13,655 | |||||||||
Semiconductor & Semiconductor Equipment | – | 2,072 | (21,891) | 34,979 | (5,097) | – | 10,063 | ||||||||||||||||
Total | $ | – | $ | 2,072 | $ | (23,448) | $ | 50,191 | $ | (5,097) | $ | – | $ | 23,718 | |||||||||
(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 June 30, 2015 | INTECH Emerging Markets Managed Volatility Fund | |||
Assets: | ||||
Investments, at cost | $ | 2,129,349 | ||
Unaffiliated investments, at value(1) | $ | 2,077,486 | ||
Affiliated investments, at value | 38,025 | |||
Cash | 714 | |||
Cash denominated in foreign currency(2) | 492 | |||
Non-interested Trustees’ deferred compensation | 42 | |||
Receivables: | ||||
Fund shares sold | 354 | |||
Dividends | 7,565 | |||
Foreign dividend tax reclaim | 363 | |||
Due from adviser | 29,391 | |||
Total Assets | 2,154,432 | |||
Liabilities: | ||||
Collateral for securities loaned (Note 2) | 3,025 | |||
Payables: | ||||
Fund shares repurchased | 3,579 | |||
Advisory fees | 1,666 | |||
Fund administration fees | 17 | |||
Transfer agent fees and expenses | 531 | |||
12b-1 Distribution and shareholder servicing fees | 129 | |||
Non-interested Trustees’ fees and expenses | 8 | |||
Non-interested Trustees’ deferred compensation fees | 42 | |||
Accrued expenses and other payables | 74,065 | |||
Total Liabilities | 83,062 | |||
Net Assets | $ | 2,071,370 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
12 | JUNE 30, 2015
Table of Contents
As of June 30, 2015 | INTECH Emerging Markets Managed Volatility Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 2,058,981 | ||
Undistributed net investment income/(loss) | 12,566 | |||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | 13,681 | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (13,858) | |||
Total Net Assets | $ | 2,071,370 | ||
Net Assets - Class A Shares | $ | 157,323 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 15,000 | |||
Net Asset Value Per Share(3) | $ | 10.49 | ||
Maximum Offering Price Per Share(4) | $ | 11.13 | ||
Net Assets - Class C Shares | $ | 52,222 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,000 | |||
Net Asset Value Per Share(3) | $ | 10.44 | ||
Net Assets - Class D Shares | $ | 1,335,204 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 127,254 | |||
Net Asset Value Per Share | $ | 10.49 | ||
Net Assets - Class I Shares | $ | 304,936 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 29,032 | |||
Net Asset Value Per Share | $ | 10.50 | ||
Net Assets - Class S Shares | $ | 52,366 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,000 | |||
Net Asset Value Per Share | $ | 10.47 | ||
Net Assets - Class T Shares | $ | 169,319 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 16,145 | |||
Net Asset Value Per Share | $ | 10.49 |
(1) | Includes $2,954 of securities on loan. See Note 2 in Notes to Financial Statements. | |
(2) | Includes cost of foreign cash of $301 | |
(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 year ended June 30, 2015 | INTECH Emerging Markets Managed Volatility Fund(1) | |||
Investment Income: | ||||
Affiliated securities lending income, net | $ | 61 | ||
Dividends | 25,632 | |||
Dividends from affiliates | 34 | |||
Foreign tax withheld | (2,956) | |||
Total Investment Income | 22,771 | |||
Expenses: | ||||
Advisory fees | 8,411 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 214 | |||
Class C Shares | 285 | |||
Class S Shares | 71 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 668 | |||
Class S Shares | 71 | |||
Class T Shares | 222 | |||
Transfer agent networking and omnibus fees: | ||||
Class I Shares | 5 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 21 | |||
Class C Shares | 15 | |||
Class D Shares | 517 | |||
Class I Shares | 37 | |||
Class S Shares | 12 | |||
Class T Shares | 38 | |||
Shareholder reports expense | 3,789 | |||
Registration fees | 154,696 | |||
Custodian fees | 34,031 | |||
Professional fees | 46,011 | |||
Non-interested Trustees’ fees and expenses | 40 | |||
Fund administration fees | 78 | |||
Other expenses | 12,176 | |||
Total Expenses | 261,408 | |||
Less: Excess Expense Reimbursement | (250,228) | |||
Net Expenses | 11,180 | |||
Net Investment Income/(Loss) | 11,591 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 14,600 | |||
Total Net Realized Gain/(Loss) on Investments | 14,600 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (13,858) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (13,858) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 12,333 |
(1) | Period from December 17, 2014 (inception date) through June 30, 2015. |
See Notes to Financial Statements.
14 | JUNE 30, 2015
Table of Contents
Statement of Changes in Net Assets
INTECH Emerging Markets Managed Volatility Fund | ||||
For the period ended June 30 | 2015(1) | |||
Operations: | ||||
Net investment income/(loss) | $ | 11,591 | ||
Net realized gain/(loss) on investments | 14,600 | |||
Change in unrealized net appreciation/depreciation | (13,858) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 12,333 | |||
Capital Share Transactions: | ||||
Shares Sold | ||||
Class A Shares | 150,000 | |||
Class C Shares | 50,000 | |||
Class D Shares | 1,742,920 | |||
Class I Shares | 307,051 | |||
Class S Shares | 50,000 | |||
Class T Shares | 166,569 | |||
Shares Repurchased | ||||
Class D Shares | (403,024) | |||
Class I Shares | (543) | |||
Class T Shares | (3,936) | |||
Net Increase/(Decrease) from Capital Share Transactions | 2,059,037 | |||
Net Increase/(Decrease) in Net Assets | 2,071,370 | |||
Net Assets: | ||||
Beginning of period | – | |||
End of period | $ | 2,071,370 | ||
Undistributed Net Investment Income/(Loss) | $ | 12,566 |
(1) | Period from December 17, 2014 (inception date) through June 30, 2015. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Financial Highlights
Class A Shares
INTECH Emerging | ||||||
Markets Managed Volatility Fund | ||||||
For a share outstanding during the period ended June 30 | 2015(1) | |||||
Net Asset Value, Beginning of Period | $10.00 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.06 | |||||
Net realized and unrealized gain/(loss) | 0.43 | |||||
Total from Investment Operations | 0.49 | |||||
Less Dividends and Distributions: | ||||||
Dividends (from net investment income) | – | |||||
Distributions (from capital gains) | – | |||||
Total Dividends and Distributions | – | |||||
Net Asset Value, End of Period | $10.49 | |||||
Total Return* | 4.90% | |||||
Net Assets, End of Period (in thousands) | $157 | |||||
Average Net Assets for the Period (in thousands) | $159 | |||||
Ratios to Average Net Assets: | ||||||
Ratio of Gross Expenses** | 36.27% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.31% | |||||
Ratio of Net Investment Income/(Loss)** | 1.05% | |||||
Portfolio Turnover Rate | 43% |
Class C Shares
INTECH Emerging | ||||||
Markets Managed Volatility Fund | ||||||
For a share outstanding during the period ended June 30 | 2015(1) | |||||
Net Asset Value, Beginning of Period | $10.00 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.02 | |||||
Net realized and unrealized gain/(loss) | 0.42 | |||||
Total from Investment Operations | 0.44 | |||||
Less Dividends and Distributions: | ||||||
Dividends (from net investment income) | – | |||||
Distributions (from capital gains) | – | |||||
Total Dividends and Distributions | – | |||||
Net Asset Value, End of Period | $10.44 | |||||
Total Return* | 4.40% | |||||
Net Assets, End of Period (in thousands) | $52 | |||||
Average Net Assets for the Period (in thousands) | $53 | |||||
Ratios to Average Net Assets: | ||||||
Ratio of Gross Expenses** | 37.08% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 2.09% | |||||
Ratio of Net Investment Income/(Loss)** | 0.27% | |||||
Portfolio Turnover Rate | 43% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from December 17, 2014 (inception date) through June 30, 2015. | |
(2) | Per share amounts are calculated based on average shares outstanding during the period. |
See Notes to Financial Statements.
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Class D Shares
INTECH Emerging | ||||||
Markets Managed Volatility Fund | ||||||
For a share outstanding during the period ended June 30 | 2015(1) | |||||
Net Asset Value, Beginning of Period | $10.00 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.08 | |||||
Net realized and unrealized gain/(loss) | 0.41 | |||||
Total from Investment Operations | 0.49 | |||||
Less Dividends and Distributions: | ||||||
Dividends (from net investment income) | – | |||||
Distributions (from capital gains) | – | |||||
Total Dividends and Distributions | – | |||||
Net Asset Value, End of Period | $10.49 | |||||
Total Return* | 4.90% | |||||
Net Assets, End of Period (in thousands) | $1,335 | |||||
Average Net Assets for the Period (in thousands) | $1,037 | |||||
Ratios to Average Net Assets: | ||||||
Ratio of Gross Expenses** | 27.16% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.23% | |||||
Ratio of Net Investment Income/(Loss)** | 1.38% | |||||
Portfolio Turnover Rate | 43% |
Class I Shares
INTECH Emerging | ||||||
Markets Managed Volatility Fund | ||||||
For a share outstanding during the period ended June 30 | 2015(1) | |||||
Net Asset Value, Beginning of Period | $10.00 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.10 | |||||
Net realized and unrealized gain/(loss) | 0.40 | |||||
Total from Investment Operations | 0.50 | |||||
Less Dividends and Distributions: | ||||||
Dividends (from net investment income) | – | |||||
Distributions (from capital gains) | – | |||||
Total Dividends and Distributions | – | |||||
Net Asset Value, End of Period | $10.50 | |||||
Total Return* | 5.00% | |||||
Net Assets, End of Period (in thousands) | $305 | |||||
Average Net Assets for the Period (in thousands) | $181 | |||||
Ratios to Average Net Assets: | ||||||
Ratio of Gross Expenses** | 27.37% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.05% | |||||
Ratio of Net Investment Income/(Loss)** | 1.79% | |||||
Portfolio Turnover Rate | 43% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from December 17, 2014 (inception date) through June 30, 2015. | |
(2) | Per share amounts are calculated based on average shares outstanding during the period. |
See Notes to Financial Statements.
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Financial Highlights (continued)
Class S Shares
INTECH Emerging | ||||||
Markets Managed Volatility Fund | ||||||
For a share outstanding during the period ended June 30 | 2015(1) | |||||
Net Asset Value, Beginning of Period | $10.00 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.04 | |||||
Net realized and unrealized gain/(loss) | 0.43 | |||||
Total from Investment Operations | 0.47 | |||||
Less Dividends and Distributions: | ||||||
Dividends (from net investment income) | – | |||||
Distributions (from capital gains) | – | |||||
Total Dividends and Distributions | – | |||||
Net Asset Value, End of Period | $10.47 | |||||
Total Return* | 4.70% | |||||
Net Assets, End of Period (in thousands) | $52 | |||||
Average Net Assets for the Period (in thousands) | $53 | |||||
Ratios to Average Net Assets: | ||||||
Ratio of Gross Expenses** | 36.54% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.58% | |||||
Ratio of Net Investment Income/(Loss)** | 0.78% | |||||
Portfolio Turnover Rate | 43% |
Class T Shares
INTECH Emerging | ||||||
Markets Managed Volatility Fund | ||||||
For a share outstanding during the period ended June 30 | 2015(1) | |||||
Net Asset Value, Beginning of Period | $10.00 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.06 | |||||
Net realized and unrealized gain/(loss) | 0.43 | |||||
Total from Investment Operations | 0.49 | |||||
Less Dividends and Distributions: | ||||||
Dividends (from net investment income) | – | |||||
Distributions (from capital gains) | – | |||||
Total Dividends and Distributions | – | |||||
Net Asset Value, End of Period | $10.49 | |||||
Total Return* | 4.90% | |||||
Net Assets, End of Period (in thousands) | $169 | |||||
Average Net Assets for the Period (in thousands) | $165 | |||||
Ratios to Average Net Assets: | ||||||
Ratio of Gross Expenses** | 35.55% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.32% | |||||
Ratio of Net Investment Income/(Loss)** | 1.07% | |||||
Portfolio Turnover Rate | 43% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from December 17, 2014 (inception date) through June 30, 2015. | |
(2) | Per share amounts are calculated based on average shares outstanding during the period. |
See Notes to Financial Statements.
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Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
INTECH Emerging Markets Managed Volatility Fund (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The financial statements include information for the period from December 17, 2014 (inception date) through June 30, 2015. The Fund invests primarily in common stocks. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
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 evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant
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Notes to Financial Statements (continued)
event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
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 June 30, 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
20 | JUNE 30, 2015
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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, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
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
Janus Investment Fund | 21
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Notes to Financial Statements (continued)
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.
Emerging Market Investing
To the extent that emerging markets may be included in its benchmark index, 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
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greater risk to investors. There is a risk in developing countries that a future economic or political crisis could lead to price controls, forced mergers of companies, expropriation or confiscatory taxation, imposition or enforcement of foreign ownership limits, seizure, nationalization, sanctions or imposition of restrictions by various governmental entities on investment and trading, or creation of government monopolies, any of which may have a detrimental effect on the Fund’s investments. In addition, the Fund’s investments may be denominated in foreign currencies and therefore, changes in the value of a country’s currency compared to the U.S. dollar may affect the value of the Fund’s investments. To the extent that the Fund invests a significant portion of its assets in the securities of issuers in or companies of a single country or region, it is more likely to be impacted by events or conditions affecting that country or region, which could have a negative impact on the Fund’s performance.
Exchange-Traded Funds
The Fund may invest in exchange-traded funds (“ETFs”) 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. ETFs are traded on a national securities exchange at market prices that may vary from the net asset value of their underlying investments. Accordingly, there may be times when an ETF trades at a premium or discount. When the Fund invests in an ETF, in addition to directly bearing the expenses associated with its own operations, it will bear a pro rata portion of the ETF’s expenses. ETFs have certain inherent risks generally associated with investments in a portfolio of securities in which the ETF is invested, including the risk that the general level of stock prices may decline, thereby adversely affecting the value of each unit of the ETF. ETFs also involve the risk that an active trading market for an ETF’s shares may not develop or be maintained. Similarly, because the value of ETF shares depends on the demand in the market, the Portfolio may not be able to purchase or sell an ETF at the most optimal time, which could adversely affect the Portfolio’s performance. In addition, ETFs that track particular indices may be unable to match the performance of such underlying indices due to the temporary unavailability of certain index securities in the secondary market or other factors, such as discrepancies with respect to the weighting of securities. Because the Portfolio may invest in a broad range of ETFs, such risks may include, but are not limited to, leverage risk, foreign exposure risk, interest rate risk, and commodity-linked investments risk.
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 | ||||||||||||||
Deutsche Bank AG | $2,954 | $– | $(2,954) | $– | ||||||||||||||
(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 (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.
Real Estate Investing
To the extent that real estate-related securities may be included in the Fund’s named benchmark index, INTECH’s mathematical investment process may select equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Securities Lending
Under procedures adopted by the Trustees, the Fund may seek to earn additional income by lending securities to qualified parties. Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. The Fund may lend portfolio securities in an amount equal to up to 1/3 of its total assets as determined at the time of the loan origination. There is the risk of delay in recovering a loaned security or the risk of loss in collateral rights if the borrower fails financially. In addition, Janus Capital makes efforts to balance the benefits and risks from granting such loans. All loans will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral as permitted by the SEC. If the Fund is unable to recover a security on loan, the Fund may use the collateral to purchase replacement securities in the market. There is a risk that the value of the collateral could decrease below the cost of the replacement security by the time the replacement investment is made, resulting in a loss to the Fund.
Upon receipt of cash collateral, Janus Capital may invest it in affiliated or non-affiliated cash management vehicles, whether registered or unregistered entities, as permitted by the 1940 Act and rules promulgated thereunder. Janus Capital currently intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. An investment in Janus Cash Collateral Fund LLC is generally subject to the same risks that shareholders experience when investing in similarly structured vehicles, such as the potential for significant fluctuations in assets as a result of the purchase and redemption activity of the securities lending program, a decline in the value of the collateral, and possible liquidity issues. Such risks may delay the return of the cash collateral and cause the Fund to violate its agreement to return the cash collateral to a borrower in a timely manner. As adviser to the Fund and Janus Cash Collateral Fund LLC, Janus Capital has an inherent conflict of interest as a result of its fiduciary duties to both the Fund and Janus Cash Collateral Fund LLC. Additionally, Janus Capital receives an investment advisory fee of 0.05% for managing Janus Cash Collateral Fund LLC, but it may not receive a fee for managing certain other affiliated cash management 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
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lending agent are included as “Affiliated securities lending income, net” on the Statement of Operations.
3. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | Contractual | |||||||||
Net Assets | Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
INTECH Emerging Markets Managed Volatility Fund | First $ | 2 Billion | 0.95 | |||||||
Next $ | 1 Billion | 0.92 | ||||||||
Over $ | 3 Billion | 0.90 | ||||||||
INTECH Investment Management LLC (“INTECH”) serves as subadviser to the Fund. As subadviser, INTECH provides day-to-day management of the investment operations of the Fund subject to the general oversight of Janus Capital. Janus Capital owns approximately 97% of INTECH.
Janus Capital pays INTECH a subadvisory fee rate equal to 50% of the investment advisory fee paid by the Fund to Janus Capital (net of any fee waivers and expense reimbursements).
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital shall additionally reimburse or waive acquired fund fees and expenses related to exposure to India local market securities from investments in exchange-traded funds. Janus Capital has agreed to continue the waivers until at least November 1, 2016.
Expense | ||||||
Fund | Limit (%) | |||||
INTECH Emerging Markets Managed Volatility Fund | 1.08 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the 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,
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Notes to Financial Statements (continued)
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 $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended June 30, 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 June 30, 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 June 30, 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 $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended June 30, 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
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money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered product compliant with Rule 2a-7 under the 1940 Act. There are no restrictions on the Fund’s ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Fund to Janus Cash Liquidity Fund LLC. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended June 30, 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 June 30, 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 June 30, 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 June 30, 2015.
As of June 30, 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 | ||||||||
INTECH Emerging Markets Managed Volatility Fund - Class A Shares | 100 | % | 8 | % | ||||||
INTECH Emerging Markets Managed Volatility Fund - Class C Shares | 100 | 3 | ||||||||
INTECH Emerging Markets Managed Volatility Fund - Class D Shares | 39 | 25 | ||||||||
INTECH Emerging Markets Managed Volatility Fund - Class I Shares | 34 | 5 | ||||||||
INTECH Emerging Markets Managed Volatility Fund - Class S Shares | 100 | 3 | ||||||||
INTECH Emerging Markets Managed Volatility Fund - Class T Shares | 93 | 8 | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
4. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation, derivatives, and foreign currency contract adjustments. 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.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
INTECH Emerging Markets Managed Volatility Fund | $ | 27,155 | $ | – | $ | – | $ | – | $ | – | $ | (61) | $ | (14,705) | |||||||||||||||||
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 2015 are noted below.
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Notes to Financial Statements (continued)
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary difference between book and tax appreciation or depreciation of investments is wash sale loss deferrals.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
INTECH Emerging Markets Managed Volatility Fund | $ | 2,130,216 | $ | 103,117 | $ | (117,822) | ||||||||
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. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
INTECH Emerging Markets Managed Volatility | $ | (56) | $ | 975 | $ | (919) | ||||||||
5. | Capital Share Transactions |
INTECH Emerging Markets Managed Volatility Fund | ||||||
For the period ended June 30 | 2015(1) | |||||
Transactions in Fund Shares – Class A Shares: | ||||||
Shares sold | 15,000 | |||||
Reinvested dividends and distributions | – | |||||
Shares repurchased | – | |||||
Net Increase/(Decrease) in Fund Shares | 15,000 | |||||
Shares Outstanding, Beginning of Period | – | |||||
Shares Outstanding, End of Period | 15,000 | |||||
Transactions in Fund Shares – Class C Shares: | ||||||
Shares sold | 5,000 | |||||
Reinvested dividends and distributions | – | |||||
Shares repurchased | – | |||||
Net Increase/(Decrease) in Fund Shares | 5,000 | |||||
Shares Outstanding, Beginning of Period | – | |||||
Shares Outstanding, End of Period | 5,000 | |||||
Transactions in Fund Shares – Class D Shares: | ||||||
Shares sold | 165,011 | |||||
Reinvested dividends and distributions | – | |||||
Shares repurchased | (37,757) | |||||
Net Increase/(Decrease) in Fund Shares | 127,254 | |||||
Shares Outstanding, Beginning of Period | – | |||||
Shares Outstanding, End of Period | 127,254 | |||||
Transactions in Fund Shares – Class I Shares: | ||||||
Shares sold | 29,081 | |||||
Reinvested dividends and distributions | – | |||||
Shares repurchased | (49) | |||||
Net Increase/(Decrease) in Fund Shares | 29,032 | |||||
Shares Outstanding, Beginning of Period | – | |||||
Shares Outstanding, End of Period | 29,032 |
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INTECH Emerging Markets Managed Volatility Fund | ||||||
For the period ended June 30 | 2015(1) | |||||
Transactions in Fund Shares – Class S Shares: | ||||||
Shares sold | 5,000 | |||||
Reinvested dividends and distributions | – | |||||
Shares repurchased | – | |||||
Net Increase/(Decrease) in Fund Shares | 5,000 | |||||
Shares Outstanding, Beginning of Period | – | |||||
Shares Outstanding, End of Period | 5,000 | |||||
Transactions in Fund Shares – Class T Shares: | ||||||
Shares sold | 16,514 | |||||
Reinvested dividends and distributions | – | |||||
Shares repurchased | (369) | |||||
Net Increase/(Decrease) in Fund Shares | 16,145 | |||||
Shares Outstanding, Beginning of Period | – | |||||
Shares Outstanding, End of Period | 16,145 |
(1) | Period from December 17, 2014 (inception date) through June 30, 2015. |
6. | Purchases and Sales of Investment Securities |
For the period ended June 30, 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 | ||||||||||
INTECH Emerging Markets Managed Volatility Fund | $ | 2,753,681 | $ | 676,441 | $ | – | $ | – | ||||||
7. | Subsequent Event |
Management has evaluated whether any other events or transactions occurred subsequent to June 30, 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 Hanergy Thin Film Power Group, Ltd. 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 value decreased by $0.08 per share and total returns decreased by 0.76% from those reflected for shareholder transactions. The Fund’s investment in this issuer exposes shareholders to positive and negative performance resulting from this and other events.
Janus Investment Fund | 29
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of INTECH Emerging Markets Managed Volatility Fund:
of INTECH Emerging Markets Managed Volatility Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of INTECH Emerging Markets Managed Volatility Fund (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, and the results of its operations, the changes in its net assets, and the financial highlights for the period December 17, 2014 (commencement of operations) through June 30, 2015, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (toll free); (ii) on the Fund’s website at janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding the Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through janus.com/proxyvoting and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Fund files its complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Fund’s Form N-Q: (i) is available on the SEC’s website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-0020 (toll free).
APPROVAL OF ADVISORY AGREEMENTS DURING
THE PERIOD
The Trustees of Janus Investment Fund, each of whom serves as an “independent” Trustee (the “Trustees”), and none of whom is affiliated with Janus Capital or INTECH Investment Management LLC (“INTECH”), the investment adviser and subadviser, respectively, of INTECH Emerging Markets Managed Volatility Fund (the “New Fund”), met on November 5, 2014 to consider the proposed investment advisory agreement and subadvisory agreement for the New Fund. In the course of their consideration of those agreements, the Trustees met in executive session and were advised by their independent legal counsel. In this regard, prior to the meeting and at earlier meetings, the Trustees received and reviewed extensive information provided by Janus Capital and INTECH in response to requests of the Trustees and their counsel, and also considered information provided by their independent fee consultant. The Trustees also had been provided and had considered, and were in the process of considering, various data and information in connection with their annual consideration of the investment advisory agreements in place with Janus Capital, and certain of that data was relevant to their consideration of the proposed agreement with Janus Capital for the New Fund. Based on their evaluation of information available to them, the Trustees unanimously approved the investment advisory agreement and subadvisory agreement for the New Fund for an initial term through February 2016, subject to earlier termination as provided for in each agreement.
In considering the agreements and reaching their conclusions, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent, and quality of the services to be provided by Janus Capital and INTECH, taking into account the investment objective and strategy of the New Fund. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and INTECH that will be providing investment and risk management services to the New Fund. The Trustees also considered other services provided to the New Fund by Janus Capital, and the involvement of INTECH in trade executions and the broker selection process. The Trustees considered Janus Capital’s role as administrator to the New Fund, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of each of Janus Capital and INTECH in monitoring adherence to the New Fund’s investment restrictions, providing support services for the Trustees and Trustee committees, communicating with shareholders and overseeing the activities of other service providers, including monitoring compliance with various policies and procedures of the New Fund and with applicable securities laws and regulations.
The Trustees concluded that the nature, extent, and quality of the services to be provided by Janus Capital and INTECH were appropriate and consistent with the terms of the proposed investment advisory agreement and subadvisory agreement. They also concluded that each of Janus Capital and INTECH had sufficient personnel, with the appropriate education and experience, to serve the New Fund effectively.
Costs of Services Provided
The Trustees noted the information regarding the proposed fees and expenses of the New Fund in comparison to similar information for other comparable funds. The Trustees noted that they had previously reviewed, and were in the process of reviewing, management fees charged by Janus Capital and INTECH to their separate account clients and to non-affiliated funds subadvised by Janus Capital (for which Janus Capital provides only portfolio management services). The Trustees noted servicing that is provided by Janus Capital for the New Fund relative to those other clients, including
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Additional Information (unaudited) (continued)
regulatory compliance and administration services, and that, in serving the New Fund, Janus Capital assumes many legal risks that it does not assume in servicing its other clients.
The Trustees concluded that the proposed advisory fee paid by the New Fund and the proposed subadvisory fee payable by Janus Capital to INTECH was reasonable in relation to the nature, extent and quality of the services to be provided, taking into account the fees charged by other advisers for managing comparable mutual funds with similar strategies, the fees Janus Capital and INTECH charges to other clients, and the expense limitation agreement agreed to by Janus Capital, including additional fees waived related to the New Fund’s investments in an iShares ETF to gain exposure to India.
Economies of Scale
The Trustees considered information about the potential for Janus Capital and INTECH to realize economies of scale as the assets of the New Fund increases. The Trustees noted that the proposed annual advisory fee rate, which included the potential breakpoints as assets increased, provided the opportunity for shareholders to share the benefits of any economies of scale that may be present. The Trustees also noted that the New Fund is part of the overall Janus funds complex, which means, among other things, that the New Fund shares directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Janus funds.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital, INTECH, and their affiliates from their relationships with the New Fund. They recognized that two affiliates of Janus Capital separately serve the New Fund as transfer agent and distributor, respectively. The Trustees also concluded that, other than the services provided by Janus Capital, and its affiliates pursuant to the agreements and the fees to be paid by the New Fund therefor, the New Fund, Janus Capital, and INTECH may potentially benefit from their relationship with each other in other ways. They further concluded that success of the New Fund could attract other business to Janus Capital, INTECH, or other Funds, and that the success of Janus Capital and INTECH could enhance Janus Capital’s and INTECH’s ability to serve the New Fund. After full consideration of the above factors, as well as other factors, the Trustees, all of whom are independent Trustees, determined to approve the agreements for the New Fund.
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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 June 30, 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 | 33
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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
34 | JUNE 30, 2015
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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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Designation Requirements (unaudited)
For federal income tax purposes, the Fund designated the following for the period ended June 30, 2015:
Foreign Taxes Paid and Foreign Source Income
Fund | Foreign Taxes Paid | Foreign Source Income | ||||||||
INTECH Emerging Markets Managed Volatility Fund | $ | 2,956 | $ | 24,979 | ||||||
Dividends Received Deduction Percentage
Fund | ||||||
INTECH Emerging Markets Volatility Fund | 100 | % | ||||
Qualified Dividend Income Percentage
Fund | ||||||
INTECH Emerging Markets Volatility Fund | 100 | % | ||||
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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
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OFFICERS
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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-0815-94032 | 125-02-93012 08-15 |
Table of Contents
annual report
June 30, 2015
INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund)
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
Table of Contents
INTECH Global Income Managed Volatility Fund
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Table of Contents
INTECH Global Income Managed Volatility Fund (unaudited)
FUND SNAPSHOT INTECH’s active approach focuses on adding value by selecting stocks with unique volatility characteristics and low correlations to one another. | Managed by INTECH Investment Management LLC |
PERFORMANCE OVERVIEW
For the 12-month period ended June 30, 2015, INTECH Global Income Managed Volatility Fund’s Class I Shares returned -5.49%. This compares to the 1.43% return posted by the MSCI World Index, the Fund’s primary benchmark, and a -5.73% return for its secondary benchmark, the MSCI World High Dividend Yield Index.
INVESTMENT STRATEGY
INTECH’s mathematical investment process is designed to determine potentially more efficient equity weightings of the securities in the benchmark index, utilizing a specific mathematical optimization and disciplined rebalancing routine. Rather than trying to predict the future direction of stock prices, the process seeks to use the volatility and correlation characteristics of stocks to construct portfolios.
Effective December 17, 2014, both the name and principal investment strategy of the INTECH Global Dividend Fund changed to reflect a “managed volatility” approach. We believe this change to the Fund’s investment strategy will provide shareholders with a smoother way to participate in equity market growth by managing downside exposure, potentially allowing for returns to compound and improve risk-adjusted returns over time.
The investment process begins with the stocks in the MSCI World High Dividend Yield Index. INTECH’s investment process aims to capture stocks’ natural volatility through a rebalancing mechanism based on estimates of relative volatility and correlation in order to outperform the benchmark index over the long term. Within specific risk constraints, the investment process will tend to favor stocks with higher relative volatility and lower correlation as they offer more potential to capture volatility through periodic rebalancing. Once the target proportions are determined and the portfolio is constructed, it is then rebalanced to those target proportions and re-optimized on a periodic basis. The previous INTECH Global Dividend Fund strategy focused on seeking an excess return above the benchmark while minimizing tracking error, a strategy designed to manage the relative risk of the portfolio. The new INTECH Global Income Managed Volatility Fund focuses on seeking an excess return above the benchmark, while also reducing or managing the Fund’s standard deviation depending on the market conditions, a strategy designed to manage the absolute risk of the portfolio.
PERFORMANCE REVIEW
The global developed equity markets as measured by the MSCI World Index posted a return of 1.43% for the 12-month period ended June 30, 2015. The MSCI World High Dividend Yield Index was down by -5.73% over the period. INTECH Global Income Managed Volatility Fund outperformed the MSCI World High Dividend Yield Index over the period and generated a return of -5.49%.
An overall increase in market diversity over the past 12 months reflected a change in the distribution of capital, in which smaller-cap stocks outperformed larger-cap stocks on average. INTECH Global Income Managed Volatility Fund, which tends to overweight smaller-cap stocks as they provide more relative volatility capture potential, benefited from the overall increase in market diversity over the period. However, the Fund was negatively impacted by security selection, which is a residual of the investment process, during the period.
The Fund’s active sector positioning tends to vary over time and is a function of the volatility and correlation characteristics of the underlying stocks. During the period, an average overweight allocation to the utilities sector and average underweight allocation to the health care sector detracted from the Fund’s excess return. However, favorable security selection offset adverse sector positioning and contributed to the Fund’s relative performance during the period, especially within the health care and consumer staples sectors.
OUTLOOK
Because INTECH does not conduct traditional economic or fundamental analysis, INTECH has no view on individual stocks, sectors, economic, or market conditions.
We believe that the change to the Fund’s investment objective should provide a smoother path to participate in equity-market growth. Managing downside exposure potentially allows for returns to compound and improve risk-adjusted returns over time. Over the long term, we believe that by reducing risk when market volatility increases and behaving like a core equity fund when
Janus Investment Fund | 1
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INTECH Global Income Managed Volatility Fund (unaudited)
market volatility is low, the Fund will achieve its investment objective of producing an excess return over the benchmark with lower absolute risk. Going forward, we will continue building portfolios in a disciplined and deliberate manner, with risk management remaining the hallmark of our investment process. As INTECH’s ongoing research efforts yield modest improvements, we will continue implementing changes that we believe are likely to improve the long-term results for our fund shareholders.
Thank you for your investment in INTECH Global Income Managed Volatility Fund.
2 | JUNE 30, 2015
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(unaudited)
INTECH Global Income Managed Volatility Fund At A Glance
5 Largest Equity Holdings – (% of Net Assets)
As of June 30, 2015
Reynolds American, Inc. Tobacco | 7.0% | |||
CLP Holdings, Ltd. Electric Utilities | 5.1% | |||
Kimberly-Clark Corp. Household Products | 4.7% | |||
Consolidated Edison, Inc. Multi-Utilities | 4.7% | |||
Power Assets Holdings, Ltd. Electric Utilities | 4.5% | |||
26.0% |
Asset Allocation – (% of Net Assets)
As of June 30, 2015
*Includes Other of (0.2)%.
Top Country Allocations – Long Positions (% of Investment Securities)
As of June 30, 2015
Janus Investment Fund | 3
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INTECH Global Income Managed Volatility Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended June 30, 2015 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||
One | Since | Total Annual Fund | Net Annual Fund | ||||||
Year | Inception* | Operating Expenses | Operating Expenses | ||||||
INTECH Global Income Managed Volatility Fund – A Shares | |||||||||
NAV | –5.79% | 9.96% | 1.96% | 0.83% | |||||
MOP | –11.20% | 8.14% | |||||||
INTECH Global Income Managed Volatility Fund – C Shares | |||||||||
NAV | –6.51% | 9.13% | 2.70% | 1.59% | |||||
CDSC | –7.39% | 9.13% | |||||||
INTECH Global Income Managed Volatility Fund – D Shares(1) | –5.62% | 10.04% | 1.78% | 0.66% | |||||
INTECH Global Income Managed Volatility Fund – I Shares | –5.49% | 10.26% | 1.67% | 0.53% | |||||
INTECH Global Income Managed Volatility Fund – S Shares | –5.93% | 9.93% | 2.13% | 1.02% | |||||
INTECH Global Income Managed Volatility Fund – T Shares | –5.70% | 10.04% | 1.83% | 0.76% | |||||
MSCI World IndexSM | 1.43% | 14.91% | |||||||
MSCI World High Dividend Yield Index | –5.73% | 10.99% | |||||||
Morningstar Quartile – Class I Shares | 4th | 4th | |||||||
Morningstar Ranking – based on total returns for World Stock Funds | 1,126/1,264 | 871/976 | |||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
See important disclosures on the next page.
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(unaudited)
INTECH’s focus on managed volatility may keep the Fund from achieving excess returns over its index. The strategy may underperform during certain periods of up markets, and may not achieve the desired level of protection in down markets.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility, lower liquidity and differing financial and information reporting standards, all of which are magnified in emerging markets.
Until three years from inception, Janus Capital may recover expenses previously waived or reimbursed if the expense ratio falls below certain limits.
The Fund will normally invest at least 80% of its net assets, measured at the time of purchase, in the type of securities described by its name.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Tracking Error is a divergence between the price behavior of a position or portfolio and the price behavior of a benchmark. Standard deviation measures historical volatility. Higher standard deviation implies greater volatility.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 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.
The weighting of securities within the Fund’s portfolio may differ significantly from the weightings within the index. The index is unmanaged and not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
Effective December 17, 2014, INTECH Global Dividend Fund changed its name to INTECH Global Income Managed Volatility Fund.
* | The Fund’s inception date – December 15, 2011 | |
(1) | Closed to certain new investors. |
Janus Investment Fund | 5
Table of Contents
INTECH Global Income Managed Volatility Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,016.60 | $ | 4.20 | $ | 1,000.00 | $ | 1,020.63 | $ | 4.21 | 0.84% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,012.80 | $ | 8.03 | $ | 1,000.00 | $ | 1,016.81 | $ | 8.05 | 1.61% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,017.50 | $ | 3.30 | $ | 1,000.00 | $ | 1,021.52 | $ | 3.31 | 0.66% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,018.10 | $ | 2.70 | $ | 1,000.00 | $ | 1,022.12 | �� | $ | 2.71 | 0.54% | ||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,016.00 | $ | 4.90 | $ | 1,000.00 | $ | 1,019.93 | $ | 4.91 | 0.98% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,017.10 | $ | 3.75 | $ | 1,000.00 | $ | 1,021.08 | $ | 3.76 | 0.75% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 181/365 (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 | JUNE 30, 2015
Table of Contents
INTECH Global Income Managed Volatility Fund
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Common Stocks – 98.8% | ||||||||||
Aerospace & Defense – 2.5% | ||||||||||
349 | BAE Systems PLC | $ | 2,474 | |||||||
631 | Cobham PLC | 2,607 | ||||||||
2,300 | Lockheed Martin Corp. | 427,570 | ||||||||
432,651 | ||||||||||
Auto Components – 0% | ||||||||||
42 | Nokian Renkaat Oyj | 1,316 | ||||||||
Automobiles – 0% | ||||||||||
100 | Daihatsu Motor Co., Ltd. | 1,424 | ||||||||
100 | General Motors Co. | 3,333 | ||||||||
4,757 | ||||||||||
Capital Markets – 0.3% | ||||||||||
1,800 | CI Financial Corp. | 48,430 | ||||||||
276 | ICAP PLC | 2,296 | ||||||||
200 | IGM Financial, Inc. | 6,371 | ||||||||
57,097 | ||||||||||
Chemicals – 0.1% | ||||||||||
100 | EI du Pont de Nemours & Co. | 6,395 | ||||||||
43 | Koninklijke DSM NV | 2,493 | ||||||||
126 | Orica, Ltd. | 2,068 | ||||||||
10,956 | ||||||||||
Commercial Banks – 3.0% | ||||||||||
14,400 | Bank of East Asia, Ltd. | 62,978 | ||||||||
800 | Bank of Montreal | 47,412 | ||||||||
11,500 | BOC Hong Kong Holdings, Ltd. | 47,921 | ||||||||
900 | Canadian Imperial Bank of Commerce | 66,383 | ||||||||
1,400 | DBS Group Holdings, Ltd. | 21,512 | ||||||||
13,900 | Hang Seng Bank, Ltd. | 271,677 | ||||||||
200 | Royal Bank of Canada | 12,232 | ||||||||
530,115 | ||||||||||
Commercial Services & Supplies – 0.2% | ||||||||||
195 | Brambles, Ltd. | 1,594 | ||||||||
10,012 | G4S PLC | 42,248 | ||||||||
43,842 | ||||||||||
Communications Equipment – 0% | ||||||||||
200 | Cisco Systems, Inc. | 5,492 | ||||||||
124 | Telefonaktiebolaget LM Ericsson – Class B | 1,286 | ||||||||
6,778 | ||||||||||
Construction & Engineering – 0% | ||||||||||
20 | Boskalis Westminster NV | 979 | ||||||||
Construction Materials – 0% | ||||||||||
248 | Fletcher Building, Ltd. | 1,364 | ||||||||
Containers & Packaging – 1.0% | ||||||||||
16,011 | Amcor, Ltd. | 169,455 | ||||||||
146 | Rexam PLC | 1,266 | ||||||||
170,721 | ||||||||||
Diversified Consumer Services – 1.6% | ||||||||||
300 | Benesse Holdings, Inc. | 7,526 | ||||||||
9,000 | H&R Block, Inc. | 266,850 | ||||||||
274,376 | ||||||||||
Diversified Financial Services – 0.2% | ||||||||||
100 | CME Group, Inc. | 9,306 | ||||||||
29 | Deutsche Boerse AG | 2,400 | ||||||||
3,000 | Singapore Exchange, Ltd. | 17,445 | ||||||||
29,151 | ||||||||||
Diversified Telecommunication Services – 3.6% | ||||||||||
1,500 | AT&T, Inc. | 53,280 | ||||||||
2,177 | BCE, Inc. | 92,498 | ||||||||
1,906 | Elisa Oyj | 60,403 | ||||||||
9,000 | HKT Trust & HKT, Ltd. | 10,589 | ||||||||
584 | Inmarsat PLC | 8,400 | ||||||||
382,000 | PCCW, Ltd. | 228,176 | ||||||||
5,000 | Singapore Telecommunications, Ltd. | 15,633 | ||||||||
174 | Swisscom AG | 97,546 | ||||||||
3,815 | TDC A/S | 27,979 | ||||||||
9,025 | Telstra Corp., Ltd. | 42,746 | ||||||||
637,250 | ||||||||||
Electric Utilities – 21.4% | ||||||||||
52,000 | Cheung Kong Infrastructure Holdings, Ltd. | 403,855 | ||||||||
105,500 | CLP Holdings, Ltd. | 896,940 | ||||||||
18,147 | Contact Energy, Ltd. | 61,587 | ||||||||
1,566 | Duke Energy Corp. | 110,591 | ||||||||
1,500 | Entergy Corp. | 105,750 | ||||||||
1,162 | Eversource Energy | 52,766 | ||||||||
144 | Fortum Oyj | 2,559 | ||||||||
700 | NextEra Energy, Inc. | 68,621 | ||||||||
300 | Pepco Holdings, Inc. | 8,082 | ||||||||
86,000 | Power Assets Holdings, Ltd. | 784,410 | ||||||||
9,000 | PPL Corp. | 265,230 | ||||||||
822 | Red Electrica Corp. SA | 65,862 | ||||||||
18,500 | Southern Co. | 775,150 | ||||||||
1,739 | SSE PLC | 41,963 | ||||||||
11,266 | Terna Rete Elettrica Nazionale SpA | 49,781 | ||||||||
2,100 | Xcel Energy, Inc. | 67,578 | ||||||||
3,760,725 | ||||||||||
Energy Equipment & Services – 0.1% | ||||||||||
70 | Petrofac, Ltd. | 1,018 | ||||||||
215 | Technip SA | 13,306 | ||||||||
778 | WorleyParsons, Ltd. | 6,247 | ||||||||
20,571 | ||||||||||
Food & Staples Retailing – 2.8% | ||||||||||
33 | ICA Gruppen AB | 1,171 | ||||||||
329 | J Sainsbury PLC | 1,371 | ||||||||
5,700 | Lawson, Inc. | 390,341 | ||||||||
900 | Sysco Corp. | 32,490 | ||||||||
3,667 | Woolworths, Ltd. | 76,263 | ||||||||
501,636 | ||||||||||
Food Products – 2.9% | ||||||||||
400 | Campbell Soup Co. | 19,060 | ||||||||
3,700 | General Mills, Inc. | 206,164 | ||||||||
4,100 | Kellogg Co. | 257,070 | ||||||||
2,588 | Tate & Lyle PLC | 21,121 | ||||||||
503,415 | ||||||||||
Gas Utilities – 0.4% | ||||||||||
14,329 | Snam SpA | 68,171 | ||||||||
Health Care Equipment & Supplies – 0.1% | ||||||||||
297 | Cochlear, Ltd. | 18,363 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
INTECH Global Income Managed Volatility Fund
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Health Care Providers & Services – 2.1% | ||||||||||
22,305 | Sonic Healthcare, Ltd. | $ | 367,695 | |||||||
Hotels, Restaurants & Leisure – 3.4% | ||||||||||
61 | Flight Centre Travel Group, Ltd. | 1,605 | ||||||||
6,200 | McDonald��s Corp. | 589,434 | ||||||||
368 | Tatts Group, Ltd. | 1,056 | ||||||||
288 | William Hill PLC | 1,824 | ||||||||
593,919 | ||||||||||
Household Durables – 0.5% | ||||||||||
2,100 | Garmin, Ltd. | 92,253 | ||||||||
132 | Husqvarna AB – Class B | 995 | ||||||||
100 | Sekisui House, Ltd. | 1,589 | ||||||||
94,837 | ||||||||||
Household Products – 7.2% | ||||||||||
4,200 | Clorox Co. | 436,884 | ||||||||
7,800 | Kimberly-Clark Corp. | 826,566 | ||||||||
1,263,450 | ||||||||||
Industrial Conglomerates – 1.9% | ||||||||||
8,000 | Keppel Corp., Ltd. | 48,838 | ||||||||
148,000 | NWS Holdings, Ltd. | 214,230 | ||||||||
22,200 | Sembcorp Industries, Ltd. | 64,135 | ||||||||
327,203 | ||||||||||
Information Technology Services – 0% | ||||||||||
100 | Paychex, Inc. | 4,688 | ||||||||
Insurance – 1.5% | ||||||||||
3,033 | Admiral Group PLC | 66,088 | ||||||||
31,417 | Direct Line Insurance Group PLC | 165,737 | ||||||||
400 | Great-West Lifeco, Inc. | 11,647 | ||||||||
387 | SCOR SE | 13,651 | ||||||||
531 | Tryg A/S | 11,071 | ||||||||
268,194 | ||||||||||
Leisure Products – 0.3% | ||||||||||
500 | Hasbro, Inc. | 37,395 | ||||||||
700 | Mattel, Inc. | 17,983 | ||||||||
55,378 | ||||||||||
Machinery – 0.3% | ||||||||||
66 | Metso Oyj | 1,813 | ||||||||
107 | Sandvik AB | 1,184 | ||||||||
10,700 | Sembcorp Marine, Ltd. | 22,568 | ||||||||
38 | SKF AB – Class B | 867 | ||||||||
12 | Sulzer AG | 1,234 | ||||||||
18,100 | Yangzijiang Shipbuilding Holdings, Ltd. | 19,021 | ||||||||
46,687 | ||||||||||
Marine – 0.5% | ||||||||||
716 | Kuehne + Nagel International AG | 95,063 | ||||||||
Media – 5.0% | ||||||||||
3 | Axel Springer SE | 158 | ||||||||
2,520 | Eutelsat Communications SA | 81,322 | ||||||||
245 | ITV PLC | 1,013 | ||||||||
7,533 | SES SA (FDR) | 253,045 | ||||||||
10,500 | Shaw Communications, Inc. – Class B | 228,700 | ||||||||
600 | Singapore Press Holdings, Ltd. | 1,818 | ||||||||
19,206 | Sky PLC | 312,889 | ||||||||
878,945 | ||||||||||
Metals & Mining – 0% | ||||||||||
81 | Anglo American PLC | 1,169 | ||||||||
28 | Rio Tinto, Ltd. | 1,161 | ||||||||
600 | Teck Resources, Ltd. – Class B | 5,948 | ||||||||
8,278 | ||||||||||
Multi-Utilities – 13.0% | ||||||||||
100 | Alliant Energy Corp. | 5,772 | ||||||||
1,400 | CMS Energy Corp. | 44,576 | ||||||||
14,200 | Consolidated Edison, Inc. | 821,896 | ||||||||
1,100 | DTE Energy Co. | 82,104 | ||||||||
5,191 | National Grid PLC | 66,643 | ||||||||
15,300 | PG&E Corp. | 751,230 | ||||||||
2,800 | Public Service Enterprise Group, Inc. | 109,984 | ||||||||
1,200 | SCANA Corp. | 60,780 | ||||||||
2,100 | Sempra Energy | 207,774 | ||||||||
3,251 | WEC Energy Group, Inc. | 146,197 | ||||||||
2,296,956 | ||||||||||
Oil, Gas & Consumable Fuels – 0.4% | ||||||||||
200 | ARC Resources, Ltd. | 3,427 | ||||||||
100 | Cenovus Energy, Inc. | 1,599 | ||||||||
200 | ConocoPhillips | 12,282 | ||||||||
400 | Exxon Mobil Corp. | 33,280 | ||||||||
800 | Husky Energy, Inc. | 15,304 | ||||||||
40 | OMV AG | 1,101 | ||||||||
200 | Vermilion Energy, Inc. | 8,640 | ||||||||
48 | Woodside Petroleum, Ltd. | 1,268 | ||||||||
76,901 | ||||||||||
Pharmaceuticals – 3.3% | ||||||||||
400 | Daiichi Sankyo Co., Ltd. | 7,401 | ||||||||
300 | Eli Lilly & Co. | 25,047 | ||||||||
100 | Johnson & Johnson | 9,746 | ||||||||
4,100 | Merck & Co., Inc. | 233,413 | ||||||||
586 | Novartis AG | 57,772 | ||||||||
37 | Orion Oyj – Class B | 1,294 | ||||||||
800 | Pfizer, Inc. | 26,824 | ||||||||
4 | Roche Holding AG | 1,121 | ||||||||
8 | Sanofi | 787 | ||||||||
4,400 | Takeda Pharmaceutical Co., Ltd. | 212,539 | ||||||||
575,944 | ||||||||||
Real Estate Management & Development – 4.6% | ||||||||||
4,300 | Daito Trust Construction Co., Ltd. | 445,567 | ||||||||
1,000 | Hang Lung Properties, Ltd. | 2,974 | ||||||||
2,000 | Hysan Development Co., Ltd. | 8,669 | ||||||||
4,000 | Sun Hung Kai Properties, Ltd. | 64,815 | ||||||||
11,000 | Swire Pacific, Ltd. – Class A | 138,293 | ||||||||
1,947 | Swiss Prime Site AG* | 147,790 | ||||||||
808,108 | ||||||||||
Road & Rail – 0.6% | ||||||||||
43,600 | ComfortDelGro Corp., Ltd. | 101,350 | ||||||||
Semiconductor & Semiconductor Equipment – 0.2% | ||||||||||
1,000 | Maxim Integrated Products, Inc. | 34,575 | ||||||||
Specialty Retail – 0.1% | ||||||||||
100 | GameStop Corp. – Class A# | 4,296 | ||||||||
576 | Kingfisher PLC | 3,143 | ||||||||
1,200 | Staples, Inc. | 18,372 | ||||||||
25,811 | ||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Technology Hardware, Storage & Peripherals – 0.8% | ||||||||||
1,400 | Canon, Inc. | $ | 45,563 | |||||||
1,900 | Seagate Technology PLC | 90,250 | ||||||||
135,813 | ||||||||||
Textiles, Apparel & Luxury Goods – 1.4% | ||||||||||
1,900 | Coach, Inc. | 65,759 | ||||||||
573 | Hugo Boss AG | 64,032 | ||||||||
60,000 | Li & Fung, Ltd. | 47,605 | ||||||||
19,000 | Yue Yuen Industrial Holdings, Ltd. | 63,609 | ||||||||
241,005 | ||||||||||
Tobacco – 7.3% | ||||||||||
800 | Altria Group, Inc. | 39,128 | ||||||||
16,581 | Reynolds American, Inc. | 1,237,937 | ||||||||
1,277,065 | ||||||||||
Trading Companies & Distributors – 0.1% | ||||||||||
100 | ITOCHU Corp. | 1,321 | ||||||||
1,500 | Marubeni Corp. | 8,609 | ||||||||
100 | Mitsui & Co., Ltd. | 1,358 | ||||||||
857 | Rexel SA | 13,814 | ||||||||
100 | Sumitomo Corp. | 1,164 | ||||||||
26,266 | ||||||||||
Transportation Infrastructure – 1.5% | ||||||||||
77,865 | Auckland International Airport, Ltd. | 260,301 | ||||||||
Wireless Telecommunication Services – 2.6% | ||||||||||
28 | Millicom International Cellular SA (SDR) | 2,067 | ||||||||
7,000 | NTT DOCOMO, Inc. | 134,085 | ||||||||
4,700 | Rogers Communications, Inc. – Class B | 166,728 | ||||||||
54,600 | StarHub, Ltd. | 160,171 | ||||||||
463,051 | ||||||||||
Total Common Stocks (cost $17,582,001) | 17,401,717 | |||||||||
Preferred Stocks – 0% | ||||||||||
Media – 0% | ||||||||||
30 | ProSiebenSat.1 Media AG (cost $1,487) | 1,481 | ||||||||
Investment Companies – 1.4% | ||||||||||
Investments Purchased with Cash Collateral from Securities Lending – 0% | ||||||||||
3,063 | Janus Cash Collateral Fund LLC, 0.1304%°°,£ | 3,063 | ||||||||
Money Markets – 1.4% | ||||||||||
235,033 | Janus Cash Liquidity Fund LLC, 0.1291%°°,£ | 235,033 | ||||||||
Total Investment Companies (cost $238,096) | 238,096 | |||||||||
Total Investments (total cost $17,821,584) – 100.2% | 17,641,294 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.2)% | (37,623) | |||||||||
Net Assets – 100% | $ | 17,603,671 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States | $ | 9,045,299 | 51 | .3% | ||||
Hong Kong | 3,198,820 | 18 | .1 | |||||
Japan | 1,258,487 | 7 | .1 | |||||
Australia | 749,947 | 4 | .2 | |||||
United Kingdom | 744,431 | 4 | .2 | |||||
Canada | 715,319 | 4 | .1 | |||||
Singapore | 472,491 | 2 | .7 | |||||
Switzerland | 400,526 | 2 | .3 | |||||
France | 375,925 | 2 | .1 | |||||
New Zealand | 261,665 | 1 | .5 | |||||
Italy | 117,952 | 0 | .7 | |||||
Germany | 68,071 | 0 | .4 | |||||
Finland | 67,385 | 0 | .4 | |||||
Spain | 65,862 | 0 | .4 | |||||
China | 47,921 | 0 | .3 | |||||
Denmark | 39,050 | 0 | .2 | |||||
Sweden | 7,570 | 0 | .0 | |||||
Netherlands | 3,472 | 0 | .0 | |||||
Austria | 1,101 | 0 | .0 | |||||
Total | $ | 17,641,294 | 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
MSCI World High Dividend Yield Index | An index designed to reflect the performance of the high dividend yield securities contained within the broader MSCI World IndexSM. The index includes large and mid cap stocks from developed markets across the Americas, Asia-Pacific and Europe. | |
MSCI World IndexSM | A free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed market countries in North America, Europe, and the Asia/Pacific Region. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
FDR | Fixed Depositary Receipt | |
LLC | Limited Liability Company | |
PLC | Public Limited Company | |
SDR | Swedish Depositary Receipt |
* | Non-income producing security. |
°° | Rate shown is the 7-day yield as of June 30, 2015. | |
# | Loaned security; a portion of the security is on loan at June 30, 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 year ended June 30, 2015. Unless otherwise indicated, all information in the table is for the year ended June 30, 2015. |
Share | Share | |||||||||||||||
Balance | Balance | Realized | Dividend | Value | ||||||||||||
at 6/30/14 | Purchases | Sales | at 6/30/15 | Gain/(Loss) | Income | at 6/30/15 | ||||||||||
INTECH Global Income Managed Volatility Fund | ||||||||||||||||
Janus Cash Collateral Fund LLC | 422,686 | 2,526,642 | (2,946,265) | 3,063 | $– | $2,652(1) | $ 3,063 | |||||||||
Janus Cash Liquidity Fund LLC | 236,030 | 14,753,145 | (14,754,142) | 235,033 | – | 287 | 235,033 | |||||||||
Total | $– | $ 2,939 | $238,096 | |||||||||||||
(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 June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | |||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||
INTECH Global Income Managed Volatility Fund | ||||||||
Assets | ||||||||
Investments in Securities: | ||||||||
Common Stocks | $17,401,717 | $ – | $– | |||||
Preferred Stocks | – | 1,481 | – | |||||
Investment Companies | – | 238,096 | – | |||||
Total Assets | $17,401,717 | $239,577 | $– | |||||
10 | JUNE 30, 2015
Table of Contents
Statement of Assets and Liabilities
As of June 30, 2015 | INTECH Global Income Managed Volatility Fund(1) | |||
Assets: | ||||
Investments, at cost | $ | 17,821,584 | ||
Unaffiliated investments, at value(2) | $ | 17,403,198 | ||
Affiliated investments, at value | 238,096 | |||
Cash | 7,780 | |||
Cash denominated in foreign currency(3) | 84 | |||
Non-interested Trustees’ deferred compensation | 352 | |||
Receivables: | ||||
Fund shares sold | 1,488 | |||
Dividends | 55,225 | |||
Dividends from affiliates | 58 | |||
Foreign dividend tax reclaim | 12,513 | |||
Due from adviser | 16,019 | |||
Other assets | 48 | |||
Total Assets | 17,734,861 | |||
Liabilities: | ||||
Collateral for securities loaned (Note 2) | 3,063 | |||
Payables: | ||||
Investments purchased | 55,301 | |||
Fund shares repurchased | 5,395 | |||
Dividends | 1,089 | |||
Advisory fees | 8,073 | |||
Fund administration fees | 140 | |||
Transfer agent fees and expenses | 3,794 | |||
12b-1 Distribution and shareholder servicing fees | 1,596 | |||
Non-interested Trustees’ fees and expenses | 116 | |||
Non-interested Trustees’ deferred compensation fees | 352 | |||
Accrued expenses and other payables | 52,271 | |||
Total Liabilities | 131,190 | |||
Net Assets | $ | 17,603,671 |
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 June 30, 2015 | INTECH Global Income Managed Volatility Fund(1) | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 17,484,921 | ||
Undistributed net investment income/(loss) | 40,886 | |||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | 259,194 | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (181,330) | |||
Total Net Assets | $ | 17,603,671 | ||
Net Assets - Class A Shares | $ | 2,815,770 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 245,935 | |||
Net Asset Value Per Share(4) | $ | 11.45 | ||
Maximum Offering Price Per Share(5) | $ | 12.15 | ||
Net Assets - Class C Shares | $ | 1,160,884 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 101,897 | |||
Net Asset Value Per Share(4) | $ | 11.39 | ||
Net Assets - Class D Shares | $ | 7,265,466 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 636,038 | |||
Net Asset Value Per Share | $ | 11.42 | ||
Net Assets - Class I Shares | $ | 2,595,820 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 226,244 | |||
Net Asset Value Per Share | $ | 11.47 | ||
Net Assets - Class S Shares | $ | 163,220 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 14,281 | |||
Net Asset Value Per Share | $ | 11.43 | ||
Net Assets - Class T Shares | $ | 3,602,511 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 314,913 | |||
Net Asset Value Per Share | $ | 11.44 |
(1) | Formerly named INTECH Global Dividend Fund. | |
(2) | Includes $2,994 of securities on loan. See Note 2 in Notes to Financial Statements. | |
(3) | Includes cost of $84. | |
(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.
12 | JUNE 30, 2015
Table of Contents
Statement of Operations
For the year ended June 30, 2015 | INTECH Global Income Managed Volatility Fund(1) | |||
Investment Income: | ||||
Affiliated securities lending income, net | $ | 2,652 | ||
Dividends | 686,561 | |||
Dividends from affiliates | 287 | |||
Other income | 129 | |||
Foreign tax withheld | (24,350) | |||
Total Investment Income | 665,279 | |||
Expenses: | ||||
Advisory fees | 100,886 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 9,473 | |||
Class C Shares | 11,359 | |||
Class S Shares | 416 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 9,283 | |||
Class S Shares | 416 | |||
Class T Shares | 7,868 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 2,647 | |||
Class C Shares | 973 | |||
Class I Shares | 722 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 588 | |||
Class C Shares | 322 | |||
Class D Shares | 3,103 | |||
Class I Shares | 180 | |||
Class T Shares | 228 | |||
Shareholder reports expense | 25,921 | |||
Registration fees | 87,693 | |||
Custodian fees | 18,701 | |||
Professional fees | 56,349 | |||
Non-interested Trustees’ fees and expenses | 423 | |||
Fund administration fees | 1,654 | |||
Other expenses | 10,881 | |||
Total Expenses | 350,086 | |||
Less: Excess Expense Reimbursement | (210,771) | |||
Net Expenses | 139,315 | |||
Net Investment Income/(Loss) | 525,964 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 379,893 | |||
Total Net Realized Gain/(Loss) on Investments | 379,893 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (2,126,913) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (2,126,913) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (1,221,056) |
(1) | Formerly named INTECH Global Dividend Fund. |
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Statements of Changes in Net Assets
INTECH Global | ||||||||
Income Managed Volatility Fund(1) | ||||||||
For each year ended June 30 | 2015 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 525,964 | $ | 661,043 | ||||
Net realized gain/(loss) on investments | 379,893 | 526,930 | ||||||
Change in unrealized net appreciation/depreciation | (2,126,913) | 1,590,172 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (1,221,056) | 2,778,145 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income | ||||||||
Class A Shares | (140,804) | (172,102) | ||||||
Class C Shares | (33,845) | (17,926) | ||||||
Class D Shares | (300,902) | (230,860) | ||||||
Class I Shares | (94,121) | (69,242) | ||||||
Class S Shares | (5,904) | (7,122) | ||||||
Class T Shares | (119,202) | (34,263) | ||||||
Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | (87,688) | (259,588) | ||||||
Class C Shares | (30,899) | (23,953) | ||||||
Class D Shares | (198,183) | (313,405) | ||||||
Class I Shares | (59,895) | (99,248) | ||||||
Class S Shares | (4,215) | (6,926) | ||||||
Class T Shares | (79,471) | (27,470) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (1,155,129) | (1,262,105) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 999,502 | 5,027,024 | ||||||
Class C Shares | 590,406 | 695,512 | ||||||
Class D Shares | 3,340,857 | �� | 5,245,879 | |||||
Class I Shares | 1,038,425 | 609,343 | ||||||
Class S Shares | 37 | 25,000 | ||||||
Class T Shares | 2,573,000 | 1,820,891 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 222,211 | 431,063 | ||||||
Class C Shares | 63,956 | 41,588 | ||||||
Class D Shares | 477,286 | 541,457 | ||||||
Class I Shares | 154,016 | 168,195 | ||||||
Class S Shares | 10,119 | 14,048 | ||||||
Class T Shares | 198,465 | 60,976 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (4,142,525) | (1,217,666) | ||||||
Class C Shares | (357,164) | (306,624) | ||||||
Class D Shares | (4,251,160) | (2,464,694) | ||||||
Class I Shares | (311,774) | (546,853) | ||||||
Class S Shares | – | (183,600) | ||||||
Class T Shares | (981,623) | (414,240) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (375,966) | 9,547,299 | ||||||
Net Increase/(Decrease) in Net Assets | (2,752,151) | 11,063,339 | ||||||
Net Assets: | ||||||||
Beginning of period | 20,355,822 | 9,292,483 | ||||||
End of period | $ | 17,603,671 | $ | 20,355,822 | ||||
Undistributed Net Investment Income/(Loss) | $ | 40,886 | $ | 210,976 |
(1) | Formerly named INTECH Global Dividend Fund. |
See Notes to Financial Statements.
14 | JUNE 30, 2015
Table of Contents
Financial Highlights
Class A Shares
INTECH Global Income Managed Volatility Fund(1) | ||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.95 | $11.60 | $10.40 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.33(3) | 0.57(3) | 0.35 | 0.22 | ||||||||||||||
Net realized and unrealized gain/(loss) | (1.08) | 1.86 | 1.24 | 0.35 | ||||||||||||||
Total from Investment Operations | (0.75) | 2.43 | 1.59 | 0.57 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | (0.44) | (0.43) | (0.39) | (0.17) | ||||||||||||||
Distributions (from capital gains) | (0.31) | (0.65) | – | – | ||||||||||||||
Total Dividends and Distributions | (0.75) | (1.08) | (0.39) | (0.17) | ||||||||||||||
Net Asset Value, End of Period | $11.45 | $12.95 | $11.60 | $10.40 | ||||||||||||||
Total Return* | (5.79)% | 21.79% | 15.41% | 5.70% | ||||||||||||||
Net Assets, End of Period (in thousands) | $2,816 | $6,300 | $1,625 | $931 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $3,789 | $4,861 | $996 | $881 | ||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||
Ratio of Gross Expenses** | 1.90% | 1.96% | 2.69% | 5.56% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.84% | 0.81% | 0.76% | 1.02% | ||||||||||||||
Ratio of Net Investment Income/(Loss)** | 2.74% | 4.62% | 3.18% | 4.01% | ||||||||||||||
Portfolio Turnover Rate | 125% | 51% | 116% | 24% |
Class C Shares
INTECH Global Income Managed Volatility Fund(1) | ||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.89 | $11.56 | $10.37 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.24(3) | 0.45(3) | 0.27 | 0.19 | ||||||||||||||
Net realized and unrealized gain/(loss) | (1.07) | 1.87 | 1.22 | 0.35 | ||||||||||||||
Total from Investment Operations | (0.83) | 2.32 | 1.49 | 0.54 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | (0.36) | (0.34) | (0.30) | (0.17) | ||||||||||||||
Distributions (from capital gains) | (0.31) | (0.65) | – | – | ||||||||||||||
Total Dividends and Distributions | (0.67) | (0.99) | (0.30) | (0.17) | ||||||||||||||
Net Asset Value, End of Period | $11.39 | $12.89 | $11.56 | $10.37 | ||||||||||||||
Total Return* | (6.51)% | 20.83% | 14.50% | 5.36% | ||||||||||||||
Net Assets, End of Period (in thousands) | $1,161 | $999 | $489 | $940 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $1,136 | $613 | $793 | $900 | ||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||
Ratio of Gross Expenses** | 2.72% | 2.70% | 3.50% | 6.25% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.61% | 1.57% | 1.51% | 1.70% | ||||||||||||||
Ratio of Net Investment Income/(Loss)** | 2.03% | 3.63% | 2.26% | 3.37% | ||||||||||||||
Portfolio Turnover Rate | 125% | 51% | 116% | 24% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Formerly named INTECH Global Dividend Fund. | |
(2) | Period from December 15, 2011 (inception date) through June 30, 2012. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Financial Highlights (continued)
Class D Shares
INTECH Global Income Managed Volatility Fund(1) | ||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.92 | $11.58 | $10.39 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.35(3) | 0.56(3) | 0.42 | 0.21 | ||||||||||||||
Net realized and unrealized gain/(loss) | (1.07) | 1.88 | 1.17 | 0.35 | ||||||||||||||
Total from Investment Operations | (0.72) | 2.44 | 1.59 | 0.56 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | (0.47) | (0.45) | (0.40) | (0.17) | ||||||||||||||
Distributions (from capital gains) | (0.31) | (0.65) | – | – | ||||||||||||||
Total Dividends and Distributions | (0.78) | (1.10) | (0.40) | (0.17) | ||||||||||||||
Net Asset Value, End of Period | $11.42 | $12.92 | $11.58 | $10.39 | ||||||||||||||
Total Return* | (5.62)% | 21.92% | 15.49% | 5.60% | ||||||||||||||
Net Assets, End of Period (in thousands) | $7,265 | $8,689 | $4,706 | $2,124 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $7,736 | $6,297 | $3,161 | $1,727 | ||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||
Ratio of Gross Expenses** | 1.89% | 1.78% | 2.57% | 5.98% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.66% | 0.66% | 0.67% | 1.32% | ||||||||||||||
Ratio of Net Investment Income/(Loss)** | 2.95% | 4.51% | 3.91% | 4.09% | ||||||||||||||
Portfolio Turnover Rate | 125% | 51% | 116% | 24% |
Class I Shares
INTECH Global Income Managed Volatility Fund(1) | �� | |||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.97 | $11.62 | $10.42 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.37(3) | 0.56(3) | 0.46 | 0.23 | ||||||||||||||
Net realized and unrealized gain/(loss) | (1.08) | 1.90 | 1.15 | 0.36 | ||||||||||||||
Total from Investment Operations | (0.71) | 2.46 | 1.61 | 0.59 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | (0.48) | (0.46) | (0.41) | (0.17) | ||||||||||||||
Distributions (from capital gains) | (0.31) | (0.65) | – | – | ||||||||||||||
Total Dividends and Distributions | (0.79) | (1.11) | (0.41) | (0.17) | ||||||||||||||
Net Asset Value, End of Period | $11.47 | $12.97 | $11.62 | $10.42 | ||||||||||||||
Total Return* | (5.49)% | 22.09% | 15.66% | 5.90% | ||||||||||||||
Net Assets, End of Period (in thousands) | $2,596 | $1,995 | $1,571 | $1,897 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $2,369 | $1,855 | $1,927 | $1,542 | ||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||
Ratio of Gross Expenses** | 1.65% | 1.67% | 2.45% | 5.07% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.54% | 0.52% | 0.51% | 0.75% | ||||||||||||||
Ratio of Net Investment Income/(Loss)** | 3.12% | 4.54% | 3.63% | 4.64% | ||||||||||||||
Portfolio Turnover Rate | 125% | 51% | 116% | 24% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Formerly named INTECH Global Dividend Fund. | |
(2) | Period from December 15, 2011 (inception date) through June 30, 2012. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
16 | JUNE 30, 2015
Table of Contents
Class S Shares
INTECH Global Income Managed Volatility Fund(1) | ||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.93 | $11.58 | $10.39 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.31(3) | 0.46(3) | 0.43 | 0.21 | ||||||||||||||
Net realized and unrealized gain/(loss) | (1.07) | 1.98 | 1.15 | 0.35 | ||||||||||||||
Total from Investment Operations | (0.76) | 2.44 | 1.58 | 0.56 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | (0.43) | (0.44) | (0.39) | (0.17) | ||||||||||||||
Distributions (from capital gains) | (0.31) | (0.65) | – | – | ||||||||||||||
Total Dividends and Distributions | (0.74) | (1.09) | (0.39) | (0.17) | ||||||||||||||
Net Asset Value, End of Period | $11.43 | $12.93 | $11.58 | $10.39 | ||||||||||||||
Total Return* | (5.93)% | 21.99% | 15.40% | 5.60% | ||||||||||||||
Net Assets, End of Period (in thousands) | $163 | $174 | $286 | $880 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $166 | $199 | $726 | $872 | ||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||
Ratio of Gross Expenses** | 2.10% | 2.13% | 2.96% | 5.82% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.00% | 0.77% | 0.86% | 1.26% | ||||||||||||||
Ratio of Net Investment Income/(Loss)** | 2.62% | 3.72% | 2.86% | 3.77% | ||||||||||||||
Portfolio Turnover Rate | 125% | 51% | 116% | 24% |
Class T Shares
INTECH Global Income Managed Volatility Fund(1) | ||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.94 | $11.60 | $10.40 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.35(3) | 0.55(3) | 0.46 | 0.22 | ||||||||||||||
Net realized and unrealized gain/(loss) | (1.08) | 1.88 | 1.14 | 0.35 | ||||||||||||||
Total from Investment Operations | (0.73) | 2.43 | 1.60 | 0.57 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | (0.46) | (0.44) | (0.40) | (0.17) | ||||||||||||||
Distributions (from capital gains) | (0.31) | (0.65) | – | – | ||||||||||||||
Total Dividends and Distributions | (0.77) | (1.09) | (0.40) | (0.17) | ||||||||||||||
Net Asset Value, End of Period | $11.44 | $12.94 | $11.60 | $10.40 | ||||||||||||||
Total Return* | (5.70)% | 21.84% | 15.55% | 5.70% | ||||||||||||||
Net Assets, End of Period (in thousands) | $3,603 | $2,200 | $615 | $1,233 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $3,147 | $855 | $1,249 | $1,093 | ||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||
Ratio of Gross Expenses** | 1.87% | 1.83% | 2.69% | 5.53% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.76% | 0.71% | 0.69% | 1.03% | ||||||||||||||
Ratio of Net Investment Income/(Loss)** | 2.96% | 4.49% | 3.27% | 4.09% | ||||||||||||||
Portfolio Turnover Rate | 125% | 51% | 116% | 24% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Formerly named INTECH Global Dividend Fund. | |
(2) | Period from December 15, 2011 (inception date) through June 30, 2012. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund) (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in common stocks. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
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 evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer,
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such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of June 30, 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 year. 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
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Notes to Financial Statements (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, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
Dividends of net investment income are generally declared and distributed monthly, and realized capital gains (if any) are distributed annually. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
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
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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 (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 | $ | 2,994 | $ | – | $ | (2,994) | $ | – | ||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. Securities on loan will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral as permitted by the SEC. The value of the collateral must be at least 102% of the market value of the loaned securities that are denominated in U.S. dollars and 105% of the market value of the loaned securities that are not denominated in U.S. dollars. Upon receipt of cash collateral, Janus Capital intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. Loaned securities and related collateral are marked-to-market each business day based upon the market value of the loaned securities at the close of business, employing the most recent available pricing information. Collateral levels are then adjusted based on this mark-to-market evaluation.
Real Estate Investing
To the extent that real estate-related securities may be included in the Fund’s named benchmark index, INTECH’s mathematical investment process may select equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Securities Lending
Under procedures adopted by the Trustees, the Fund may seek to earn additional income by lending securities to qualified parties. Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. The Fund may lend portfolio securities in an amount equal to up to 1/3 of its total assets as determined at the time of the loan origination. There is the risk of delay in recovering a loaned security or the risk of loss in collateral rights if the borrower fails financially. In addition, Janus Capital makes efforts to balance the benefits and risks from granting such loans. All loans will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral as permitted by the SEC. If the Fund is unable to recover a security on loan, the Fund may use the collateral to purchase replacement securities in the market. There is a risk that the value of the collateral could decrease below the cost of the replacement security by the time the replacement investment is made, resulting in a loss to the Fund.
Upon receipt of cash collateral, Janus Capital may invest it in affiliated or non-affiliated cash management vehicles, whether registered or unregistered entities, as permitted by the 1940 Act and rules promulgated thereunder. Janus Capital currently intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. An investment in Janus Cash Collateral Fund LLC is generally subject to the same risks that shareholders experience when investing in similarly structured vehicles, such as the potential for significant fluctuations in assets as a result of the purchase and redemption activity of the securities lending program, a decline in the value of the collateral, and possible liquidity issues. Such risks may delay the return of the cash collateral and cause the Fund
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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 contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | Contractual | |||||||||
Net Assets | Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
INTECH Global Income Managed Volatility Fund | All Asset Levels | 0.55 | ||||||||
INTECH Investment Management LLC (“INTECH”) serves as subadviser to the Fund. As subadviser, INTECH provides day-to-day management of the investment operations of the Fund subject to the general oversight of Janus Capital. Janus Capital owns approximately 97% of INTECH.
Janus Capital pays INTECH a subadvisory fee rate equal to 50% of the investment advisory fee paid by the Fund to Janus Capital (net of any fee waivers and expense reimbursements).
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
INTECH Global Income Managed Volatility Fund | 0.50 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
For a period of three years subsequent to the Fund’s commencement of operations, Janus Capital may recover from the Fund fees and expenses previously waived or reimbursed, which could then be considered a deferral, if the Fund’s expense ratio, including recovered expenses, falls below the expense limit. For the year ended June 30, 2015, Janus Capital recovered $0 from the Fund. The recoupment of such reimbursements to Janus Capital by the Fund expired December 15, 2014.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
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Notes to Financial Statements (continued)
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital (or the subadviser) provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the year ended June 30, 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
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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 June 30, 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 year ended June 30, 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 $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 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 product compliant with Rule 2a-7 under the 1940 Act. There are no restrictions on the Fund’s ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Fund to Janus Cash Liquidity Fund LLC. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the year ended June 30, 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 year ended June 30, 2015, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
INTECH Global Income Managed Volatility Fund | $ | 2,083 | ||||
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 year ended June 30, 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 year ended June 30, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
INTECH Global Income Managed Volatility Fund | $ | 503 | ||||
As of June 30, 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 | ||||||||
INTECH Global Income Managed Volatility Fund - Class A Shares | - | % | - | % | ||||||
INTECH Global Income Managed Volatility Fund - Class C Shares | - | - | ||||||||
INTECH Global Income Managed Volatility Fund - Class D Shares | - | - | ||||||||
INTECH Global Income Managed Volatility Fund - Class I Shares | - | - | ||||||||
INTECH Global Income Managed Volatility Fund - Class S Shares | 85 | 1 | ||||||||
INTECH Global Income Managed Volatility Fund - Class T Shares | - | - | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant
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Notes to Financial Statements (continued)
percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
4. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation, derivatives, tax equalization, and foreign currency contract adjustments. 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.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
INTECH Global Income Managed Volatility Fund | $43,174 | $265,646 | $– | $– | $– | $(1,393) | $(188,677) | ||||||||||||||||||||||||
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 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.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
INTECH Global Income Managed Volatility Fund | $ | 17,829,971 | $ | 567,871 | $ | (756,548) | ||||||||
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, passive foreign investment companies, net investment losses, and capital loss carryovers. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the year ended June 30, 2015
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
INTECH Global Income Managed Volatility Fund | $ | 817,106 | $ | 338,023 | $ | – | $ | – | ||||||||||||||
For the year ended June 30, 2014
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
INTECH Global Income Managed Volatility Fund | $ | 739,187 | $ | 522,918 | $ | – | $ | – | ||||||||||||||
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Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
INTECH Global Income Managed Volatility Fund | $ | 97,418 | $ | (1,276) | $ | (96,142) | ||||||||
Capital has been adjusted by $101,394, all of which is long-term capital gain, for distributions in connection with Fund share redemptions (tax equalization).
5. | Capital Share Transactions |
INTECH Global Income Managed Volatility Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 83,406 | 408,638 | ||||||||
Reinvested dividends and distributions | 18,749 | 35,321 | ||||||||
Shares repurchased | (342,712) | (97,519) | ||||||||
Net Increase/(Decrease) in Fund Shares | (240,557) | 346,440 | ||||||||
Shares Outstanding, Beginning of Period | 486,492 | 140,052 | ||||||||
Shares Outstanding, End of Period | 245,935 | 486,492 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 49,451 | 55,803 | ||||||||
Reinvested dividends and distributions | 5,481 | 3,417 | ||||||||
Shares repurchased | (30,496) | (24,112) | ||||||||
Net Increase/(Decrease) in Fund Shares | 24,436 | 35,108 | ||||||||
Shares Outstanding, Beginning of Period | 77,461 | 42,353 | ||||||||
Shares Outstanding, End of Period | 101,897 | 77,461 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 277,204 | 420,677 | ||||||||
Reinvested dividends and distributions | 40,592 | 44,434 | ||||||||
Shares repurchased | (354,189) | (199,182) | ||||||||
Net Increase/(Decrease) in Fund Shares | (36,393) | 265,929 | ||||||||
Shares Outstanding, Beginning of Period | 672,431 | 406,502 | ||||||||
Shares Outstanding, End of Period | 636,038 | 672,431 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 85,522 | 49,276 | ||||||||
Reinvested dividends and distributions | 13,067 | 13,770 | ||||||||
Shares repurchased | (26,142) | (44,476) | ||||||||
Net Increase/(Decrease) in Fund Shares | 72,447 | 18,570 | ||||||||
Shares Outstanding, Beginning of Period | 153,797 | 135,227 | ||||||||
Shares Outstanding, End of Period | 226,244 | 153,797 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | – | 1,956 | ||||||||
Reinvested dividends and distributions | 861 | 1,152 | ||||||||
Shares repurchased | – | (14,389) | ||||||||
Net Increase/(Decrease) in Fund Shares | 861 | (11,281) | ||||||||
Shares Outstanding, Beginning of Period | 13,420 | 24,701 | ||||||||
Shares Outstanding, End of Period | 14,281 | 13,420 |
Janus Investment Fund | 27
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Notes to Financial Statements (continued)
INTECH Global Income Managed Volatility Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 210,567 | 144,796 | ||||||||
Reinvested dividends and distributions | 16,892 | 4,960 | ||||||||
Shares repurchased | (82,534) | (32,790) | ||||||||
Net Increase/(Decrease) in Fund Shares | 144,925 | 116,966 | ||||||||
Shares Outstanding, Beginning of Period | 169,988 | 53,022 | ||||||||
Shares Outstanding, End of Period | 314,913 | 169,988 |
6. | Purchases and Sales of Investment Securities |
For the year ended June 30, 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 | ||||||
INTECH Global Income Managed Volatility Fund | $22,791,362 | $23,767,514 | $– | $– | ||||||
7. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of INTECH Global Income Managed Volatility Fund:
of INTECH Global Income Managed Volatility Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund) (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
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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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 June 30, 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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Designation Requirements (unaudited)
For federal income tax purposes, the Fund designated the following for the year ended June 30, 2015:
Capital Gain Distributions
Fund | ||||||||||
INTECH Global Income Managed Volatility Fund | $ | 439,417 | ||||||||
Dividends Received Deduction Percentage
Fund | ||||||||||
INTECH Global Income Managed Volatility Fund | 84 | % | ||||||||
Qualified Dividend Income Percentage
Fund | ||||||||||
INTECH Global Income Managed Volatility Fund | 100 | % | ||||||||
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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
Janus Investment Fund | 47
Table of Contents
Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
48 | JUNE 30, 2015
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OFFICERS
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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-0815-93830 | 125-02-93013 08-15 |
Table of Contents
annual report
June 30, 2015
INTECH International Managed Volatility Fund (formerly named INTECH International Fund)
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
Table of Contents
INTECH International Managed Volatility Fund
1 | ||
12 | ||
13 | ||
15 | ||
16 | ||
17 | ||
20 | ||
31 | ||
32 | ||
43 | ||
46 | ||
47 |
Table of Contents
INTECH International Managed Volatility Fund (unaudited)
FUND SNAPSHOT INTECH’s active approach focuses on adding value by selecting stocks with unique volatility characteristics and low correlations to one another. | Managed by INTECH Investment Management LLC |
PERFORMANCE OVERVIEW
For the 12-month period ended June 30, 2015, INTECH International Managed Volatility Fund’s Class I Shares returned -3.90%. This compares to the -4.22% return posted by the MSCI EAFE Index, the Fund’s benchmark.
INVESTMENT STRATEGY
INTECH’s mathematical investment process is designed to determine potentially more efficient equity weightings of the securities in the benchmark index, utilizing a specific mathematical optimization and disciplined rebalancing routine. Rather than trying to predict the future direction of stock prices, the process seeks to use the volatility and correlation characteristics of stocks to construct portfolios.
Effective December 17, 2014, both the name and principal investment strategy of the INTECH International Fund changed to reflect a “managed volatility” approach. We believe this change to the Fund’s investment strategy will provide shareholders with a smoother way to participate in equity market growth by managing downside exposure, potentially allowing for returns to compound and improve risk-adjusted returns over time.
The investment process begins with the stocks in the MSCI EAFE Index. INTECH’s investment process aims to capture stocks’ natural volatility through a rebalancing mechanism based on estimates of relative volatility and correlation in order to outperform the benchmark index over the long term. Within specific risk constraints, the investment process will tend to favor stocks with higher relative volatility and lower correlation as they offer more potential to capture volatility through periodic rebalancing. Once the target proportions are determined and the portfolio is constructed, it is then rebalanced to those target proportions and re-optimized on a periodic basis. The previous INTECH International Fund focused on seeking an excess return above the benchmark while minimizing tracking error, a strategy designed to manage the relative risk of the portfolio. The new INTECH International Managed Volatility Fund focuses on seeking an excess return above the benchmark, while also reducing or managing the standard deviation of the portfolio depending on the market conditions, a strategy designed to manage the absolute risk of the portfolio.
PERFORMANCE REVIEW
The MSCI EAFE Index return declined by -4.22% for the 12-month period ending June 30, 2015. INTECH International Managed Volatility Fund outperformed the MSCI EAFE Index over the period and generated a return of -3.90%.
An overall increase in market diversity over the past twelve months reflected a change in the distribution of capital, in which smaller-cap stocks outperformed larger cap stocks on average within the MSCI EAFE Index. INTECH International Managed Volatility Fund, which tends to overweight smaller-cap stocks as they provide more relative volatility capture potential, benefited from the overall increase in market diversity over the period.
The Fund’s active sector positioning tends to vary over time and is a function of the volatility and correlation characteristics of the underlying stocks. While an average overweight allocation to the defensive utilities sector detracted, an underweight allocation to the energy sector, which underperformed the MSCI EAFE Index by more than 25% during the period, contributed to the Fund’s relative performance. Stock selection, which is a residual of the investment process, also contributed to the Fund’s relative performance during the period, especially within the consumer discretionary and materials sectors.
OUTLOOK
Because INTECH does not conduct traditional economic or fundamental analysis, INTECH has no view on individual stocks, sectors, economic, or market conditions.
We believe that the change to the Fund’s investment objective should provide a smoother path to participate in equity-market growth. Managing downside exposure potentially allows for returns to compound and improve risk-adjusted returns over time. Over the long term, we believe that by reducing risk when market volatility increases and behaving like a core equity fund when market volatility is low, the Fund will achieve its investment objective of producing an excess return over the benchmark with lower absolute risk. Going forward, we will continue building portfolios in a disciplined and deliberate manner, with risk management remaining the hallmark of our investment process. As INTECH’s ongoing research
Janus Investment Fund | 1
Table of Contents
INTECH International Managed Volatility Fund (unaudited)
efforts yield modest improvements, we will continue implementing changes that we believe are likely to improve the long-term results for our fund shareholders.
Thank you for your investment in INTECH International Managed Volatility Fund.
2 | JUNE 30, 2015
Table of Contents
(unaudited)
INTECH International Managed Volatility Fund At A Glance
5 Largest Equity Holdings – (% of Net Assets)
As of June 30, 2015
Next PLC Multiline Retail | 2.2% | |||
Oriental Land Co., Ltd. Hotels, Restaurants & Leisure | 2.1% | |||
Novo Nordisk A/S – Class B Pharmaceuticals | 1.8% | |||
Power Assets Holdings, Ltd. Electric Utilities | 1.7% | |||
Nestle SA Food Products | 1.6% | |||
9.4% |
Asset Allocation – (% of Net Assets)
As of June 30, 2015
* Includes Other of (0.5)%.
Top Country Allocations – Long Positions (% of Investment Securities)
As of June 30, 2015
Janus Investment Fund | 3
Table of Contents
INTECH International Managed Volatility Fund (unaudited)
Performance
Expense Ratios – per the October 28, 2014 prospectus | |||||||||
Average Annual Total Return – for the periods ended June 30, 2015 | and the April 24, 2015 prospectus for Class D Shares | ||||||||
One | Five | Since | Total Annual Fund | ||||||
Year | Year | Inception* | Operating Expenses | ||||||
INTECH International Managed Volatility Fund – Class A Shares | |||||||||
NAV | –4.19% | 10.01% | 0.74% | 1.21% | |||||
MOP | –9.71% | 8.70% | 0.01% | ||||||
INTECH International Managed Volatility Fund – Class C Shares | |||||||||
NAV | –4.95% | 9.89% | 0.54% | 1.93% | |||||
CDSC | –5.78% | 9.89% | 0.54% | ||||||
INTECH International Managed Volatility Fund – Class D Shares(1) | –3.90% | 10.20% | 0.74% | 0.99% | |||||
INTECH International Managed Volatility Fund – Class I Shares | –3.90% | 10.25% | 0.88% | 0.81% | |||||
INTECH International Managed Volatility Fund – Class S Shares | –4.29% | 10.05% | 0.71% | 1.33% | |||||
INTECH International Managed Volatility Fund – Class T Shares | –4.08% | 10.02% | –0.15% | 1.12% | |||||
MSCI EAFE® Index | –4.22% | 9.54% | 0.53% | ||||||
Morningstar Quartile – Class I Shares | 3rd | 1st | 2nd | ||||||
Morningstar Ranking – based on total returns for Foreign Large Blend Funds | 453/804 | 144/679 | 211/576 | ||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
4 | JUNE 30, 2015
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(unaudited)
The expense ratios for Class D Shares are estimated.
INTECH’s focus on managed volatility may keep the Fund from achieving excess returns over its index. The strategy may underperform during certain periods of up markets, and may not achieve the desired level of protection in down markets.
A Fund’s performance may be affected by risks that include those associated with 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, lower liquidity and differing financial and information reporting standards, all of which are magnified in emerging markets.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Class A Shares, Class C Shares, Class I Shares, and Class S Shares commenced operations on July 6, 2009, after the reorganization of each class of the predecessor fund into corresponding shares of the Fund. Performance shown for each class for periods prior to July 6, 2009, reflects the historical performance of each corresponding class of the predecessor fund prior to the reorganization, calculated using the fees and expenses of the corresponding class of the predecessor fund respectively, net of any applicable fee and expense limitations or waivers.
Class D Shares commenced operations on April 24, 2015. Performance shown for periods prior to April 24, 2015, reflects the historical performance of the Fund’s Class I Shares, calculated using the fees and expenses of Class D Shares, without the effect of any applicable fee and expense limitations or waivers.
Class T Shares commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the historical performance of the predecessor fund’s Class I Shares, calculated using the fees and expenses of Class T Shares, without the effect of any fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Tracking Error is a divergence between the price behavior of a position or portfolio and the price behavior of a benchmark. Standard deviation measures historical volatility. Higher standard deviation implies greater volatility.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 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.
The weighting of securities within the Fund’s portfolio may differ significantly from the weightings within the index. The index is unmanaged and not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
Effective December 17, 2014, INTECH International Fund changed its name to INTECH International Managed Volatility Fund.
* | The predecessor Fund’s inception date – May 2, 2007 | |
(1) | Closed to certain new investors. |
Janus Investment Fund | 5
Table of Contents
INTECH International Managed Volatility Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s 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 | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)* | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,062.20 | $ | 7.36 | $ | 1,000.00 | $ | 1,017.65 | $ | 7.20 | 1.44% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,057.30 | $ | 10.71 | $ | 1,000.00 | $ | 1,014.38 | $ | 10.49 | 2.10% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 966.20 | $ | 2.31 | $ | 1,000.00 | $ | 1,018.55 | $ | 6.31 | 1.26% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,063.80 | $ | 5.22 | $ | 1,000.00 | $ | 1,019.74 | $ | 5.11 | 1.02% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,061.70 | $ | 7.77 | $ | 1,000.00 | $ | 1,017.26 | $ | 7.60 | 1.52% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,062.50 | $ | 6.49 | $ | 1,000.00 | $ | 1,018.50 | $ | 6.36 | 1.27% | |||||||||||||||||
* | Actual Expenses Paid During Period for Class D Shares reflect only the inception period for the share class (April 24, 2015 to June 30, 2015) and are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 68/365 (to reflect the period). Therefore, actual expenses shown are lower than would be expected for a six-month period. For all other share classes, the Actual Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). | |
† | Hypothetical Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 181/365 (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 | JUNE 30, 2015
Table of Contents
INTECH International Managed Volatility Fund
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Common Stocks – 98.3% | ||||||||||
Aerospace & Defense – 1.0% | ||||||||||
370 | Airbus Group SE | $ | 24,004 | |||||||
26,373 | BAE Systems PLC | 186,940 | ||||||||
19,585 | Cobham PLC | 80,920 | ||||||||
14,888 | Finmeccanica SpA* | 187,199 | ||||||||
2,911 | Rolls-Royce Holdings PLC* | 39,787 | ||||||||
1,227 | Safran SA | 83,145 | ||||||||
7,000 | Singapore Technologies Engineering, Ltd. | 17,156 | ||||||||
428 | Thales SA | 25,839 | ||||||||
3,545 | Zodiac Aerospace | 115,387 | ||||||||
760,377 | ||||||||||
Air Freight & Logistics – 0.2% | ||||||||||
8,500 | Yamato Holdings Co., Ltd. | 164,589 | ||||||||
Airlines – 1.1% | ||||||||||
147,000 | Cathay Pacific Airways, Ltd. | 361,464 | ||||||||
5,209 | easyJet PLC | 126,514 | ||||||||
24,725 | International Consolidated Airlines Group SA* | 192,266 | ||||||||
13,200 | Singapore Airlines, Ltd. | 105,188 | ||||||||
785,432 | ||||||||||
Auto Components – 1.1% | ||||||||||
2,600 | Bridgestone Corp. | 96,196 | ||||||||
243 | Cie Generale des Etablissements Michelin | 25,459 | ||||||||
131 | Continental AG | 30,994 | ||||||||
7,400 | NOK Corp. | 229,795 | ||||||||
2,233 | Valeo SA | 351,839 | ||||||||
4,500 | Yokohama Rubber Co., Ltd. | 90,390 | ||||||||
824,673 | ||||||||||
Automobiles – 1.5% | ||||||||||
2,079 | Daimler AG | 189,198 | ||||||||
17,378 | Fiat Chrysler Automobiles NV* | 254,539 | ||||||||
1,400 | Honda Motor Co., Ltd. | 45,322 | ||||||||
1,500 | Nissan Motor Co., Ltd. | 15,629 | ||||||||
20,015 | Peugeot SA* | 411,522 | ||||||||
219 | Renault SA | 22,806 | ||||||||
1,500 | Toyota Motor Corp. | 100,552 | ||||||||
183 | Volkswagen AG | 42,338 | ||||||||
1,500 | Yamaha Motor Co., Ltd. | 32,815 | ||||||||
1,114,721 | ||||||||||
Beverages – 0.4% | ||||||||||
311 | Anheuser-Busch InBev NV | 37,267 | ||||||||
194 | Carlsberg A/S – Class B | 17,615 | ||||||||
6,400 | Suntory Beverage & Food, Ltd. | 254,964 | ||||||||
309,846 | ||||||||||
Biotechnology – 1.6% | ||||||||||
16,983 | CSL, Ltd. | 1,132,820 | ||||||||
Building Products – 0.6% | ||||||||||
21,000 | Asahi Glass Co., Ltd. | 126,134 | ||||||||
3,054 | Assa Abloy AB – Class B | 57,537 | ||||||||
14,000 | TOTO, Ltd. | 252,382 | ||||||||
436,053 | ||||||||||
Capital Markets – 0.9% | ||||||||||
28,317 | ICAP PLC | 235,552 | ||||||||
1,700 | Julius Baer Group, Ltd.* | 95,394 | ||||||||
383 | Macquarie Group, Ltd. | 24,050 | ||||||||
745 | Partners Group Holding AG | 222,775 | ||||||||
2,174 | UBS Group AG* | 46,122 | ||||||||
623,893 | ||||||||||
Chemicals – 3.5% | ||||||||||
5,000 | Air Water, Inc. | 91,567 | ||||||||
45,000 | Asahi Kasei Corp. | 369,760 | ||||||||
203 | Croda International PLC | 8,776 | ||||||||
2,400 | Daicel Corp. | 30,831 | ||||||||
159 | Givaudan SA* | 275,235 | ||||||||
14,361 | Incitec Pivot, Ltd. | 42,651 | ||||||||
30,408 | Israel Chemicals, Ltd. | 212,599 | ||||||||
10,000 | Kaneka Corp. | 73,139 | ||||||||
292 | LANXESS AG | 17,215 | ||||||||
25,000 | Mitsubishi Chemical Holdings Corp. | 157,412 | ||||||||
7,000 | Nippon Paint Holdings Co., Ltd. | 197,638 | ||||||||
1,500 | Nitto Denko Corp. | 123,315 | ||||||||
400 | Shin-Etsu Chemical Co., Ltd. | 24,839 | ||||||||
16,000 | Sumitomo Chemical Co., Ltd. | 96,233 | ||||||||
4,520 | Symrise AG | 280,491 | ||||||||
57,000 | Teijin, Ltd. | 221,255 | ||||||||
27,000 | Toray Industries, Inc. | 228,475 | ||||||||
1,981 | Yara International ASA | 103,236 | ||||||||
2,554,667 | ||||||||||
Commercial Banks – 5.7% | ||||||||||
130,190 | Bank Hapoalim BM | 701,743 | ||||||||
56,292 | Bank Leumi Le-Israel BM* | 238,200 | ||||||||
28,800 | Bank of East Asia, Ltd. | 125,956 | ||||||||
141,000 | BOC Hong Kong Holdings, Ltd. | 587,553 | ||||||||
6,000 | Chiba Bank, Ltd. | 45,747 | ||||||||
32,000 | DBS Group Holdings, Ltd. | 491,704 | ||||||||
13,000 | Gunma Bank, Ltd. | 96,037 | ||||||||
10,000 | Hachijuni Bank, Ltd. | 75,509 | ||||||||
55,000 | Hang Seng Bank, Ltd. | 1,074,981 | ||||||||
7,000 | Hiroshima Bank, Ltd. | 41,873 | ||||||||
46,000 | Hokuhoku Financial Group, Inc. | 108,638 | ||||||||
9,774 | Intesa Sanpaolo SpA | 31,182 | ||||||||
294 | KBC Groep NV | 19,644 | ||||||||
14,700 | Mitsubishi UFJ Financial Group, Inc. | 105,688 | ||||||||
8,700 | Mizuho Financial Group, Inc. | 18,840 | ||||||||
3,757 | Natixis SA | 27,033 | ||||||||
22,000 | Oversea-Chinese Banking Corp., Ltd. | 166,328 | ||||||||
800 | Sumitomo Mitsui Financial Group, Inc. | 35,688 | ||||||||
2,900 | Suruga Bank, Ltd. | 62,256 | ||||||||
2,800 | United Overseas Bank, Ltd. | 47,973 | ||||||||
7,000 | Yamaguchi Financial Group, Inc. | 87,235 | ||||||||
4,189,808 | ||||||||||
Commercial Services & Supplies – 1.1% | ||||||||||
3,000 | Dai Nippon Printing Co., Ltd. | 31,000 | ||||||||
448 | ISS A/S | 14,784 | ||||||||
11,400 | Park24 Co., Ltd. | 195,357 | ||||||||
800 | Secom Co., Ltd. | 51,941 | ||||||||
6,360 | Securitas AB – Class B | 84,128 | ||||||||
2,154 | Societe BIC SA | 343,353 | ||||||||
10,000 | Toppan Printing Co., Ltd. | 83,681 | ||||||||
804,244 | ||||||||||
Communications Equipment – 0% | ||||||||||
714 | Telefonaktiebolaget LM Ericsson – Class B | 7,402 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
INTECH International Managed Volatility Fund
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Construction Materials – 0.2% | ||||||||||
8,112 | Boral, Ltd. | $ | 36,607 | |||||||
1,677 | CRH PLC | 47,332 | ||||||||
3,262 | James Hardie Industries PLC (CDI) | 43,583 | ||||||||
127,522 | ||||||||||
Consumer Finance – 0.1% | ||||||||||
2,100 | AEON Financial Service Co., Ltd. | 58,348 | ||||||||
Containers & Packaging – 0.6% | ||||||||||
38,414 | Amcor, Ltd. | 406,560 | ||||||||
1,400 | Toyo Seikan Group Holdings, Ltd. | 22,447 | ||||||||
429,007 | ||||||||||
Diversified Financial Services – 1.5% | ||||||||||
515 | Deutsche Boerse AG | 42,625 | ||||||||
25,000 | Hong Kong Exchanges & Clearing, Ltd. | 882,433 | ||||||||
908 | London Stock Exchange Group PLC | 33,807 | ||||||||
20,000 | Singapore Exchange, Ltd. | 116,301 | ||||||||
1,075,166 | ||||||||||
Diversified Telecommunication Services – 3.4% | ||||||||||
205,877 | Bezeq Israeli Telecommunication Corp., Ltd. | 350,979 | ||||||||
2,335 | Deutsche Telekom AG | 40,214 | ||||||||
274,000 | HKT Trust & HKT, Ltd. | 322,382 | ||||||||
30,071 | Inmarsat PLC | 432,494 | ||||||||
19,103 | Koninklijke KPN NV | 73,039 | ||||||||
1,000 | Nippon Telegraph & Telephone Corp. | 36,230 | ||||||||
3,574 | Proximus | 126,172 | ||||||||
78,000 | Singapore Telecommunications, Ltd. | 243,877 | ||||||||
226,589 | Spark New Zealand, Ltd. | 429,009 | ||||||||
54 | Swisscom AG | 30,273 | ||||||||
75,635 | Telstra Corp., Ltd. | 358,239 | ||||||||
2,442,908 | ||||||||||
Electric Utilities – 4.7% | ||||||||||
61,000 | Cheung Kong Infrastructure Holdings, Ltd. | 473,753 | ||||||||
116,000 | CLP Holdings, Ltd. | 986,209 | ||||||||
1,200 | Hokuriku Electric Power Co. | 17,886 | ||||||||
133,500 | Power Assets Holdings, Ltd. | 1,217,660 | ||||||||
1,898 | Red Electrica Corp. SA | 152,077 | ||||||||
25,043 | SSE PLC | 604,299 | ||||||||
3,451,884 | ||||||||||
Electrical Equipment – 0.6% | ||||||||||
1,300 | Mabuchi Motor Co., Ltd. | 82,226 | ||||||||
3,500 | Nidec Corp. | 262,135 | ||||||||
1,015 | OSRAM Licht AG | 48,600 | ||||||||
1,575 | Prysmian SpA | 34,025 | ||||||||
413 | Vestas Wind Systems A/S | 20,617 | ||||||||
447,603 | ||||||||||
Electronic Equipment, Instruments & Components – 0.5% | ||||||||||
200 | Hirose Electric Co., Ltd. | 28,651 | ||||||||
3,000 | Ibiden Co., Ltd. | 50,748 | ||||||||
700 | Murata Manufacturing Co., Ltd. | 122,187 | ||||||||
6,000 | Shimadzu Corp. | 81,539 | ||||||||
1,400 | TDK Corp. | 107,199 | ||||||||
390,324 | ||||||||||
Food & Staples Retailing – 1.1% | ||||||||||
11,100 | Aeon Co., Ltd. | 157,606 | ||||||||
2,097 | Delhaize Group SA | 173,118 | ||||||||
1,000 | FamilyMart Co., Ltd. | 46,008 | ||||||||
1,207 | Jeronimo Martins SGPS SA | 15,473 | ||||||||
4,368 | Koninklijke Ahold NV | 81,799 | ||||||||
4,600 | Lawson, Inc. | 315,012 | ||||||||
800 | Seven & I Holdings Co., Ltd. | 34,387 | ||||||||
823,403 | ||||||||||
Food Products – 6.0% | ||||||||||
11,000 | Ajinomoto Co., Inc. | 238,347 | ||||||||
3,426 | Associated British Foods PLC | 154,524 | ||||||||
7,900 | Calbee, Inc. | 333,121 | ||||||||
96 | Chocoladefabriken Lindt & Sprungli AG (PC) | 507,782 | ||||||||
5 | Chocoladefabriken Lindt & Sprungli AG (REG) | 312,828 | ||||||||
7,000 | Kikkoman Corp. | 218,804 | ||||||||
6,400 | MEIJI Holdings Co., Ltd. | 826,346 | ||||||||
16,142 | Nestle SA | 1,165,705 | ||||||||
18,000 | NH Foods, Ltd. | 410,983 | ||||||||
30,400 | Wilmar International, Ltd. | 74,053 | ||||||||
1,100 | Yakult Honsha Co., Ltd. | 65,261 | ||||||||
4,000 | Yamazaki Baking Co., Ltd. | 66,650 | ||||||||
4,374,404 | ||||||||||
Gas Utilities – 1.9% | ||||||||||
74,482 | APA Group | 473,434 | ||||||||
409,200 | Hong Kong & China Gas Co., Ltd. | 858,384 | ||||||||
4,000 | Toho Gas Co., Ltd. | 23,699 | ||||||||
12,000 | Tokyo Gas Co., Ltd. | 63,741 | ||||||||
1,419,258 | ||||||||||
Health Care Equipment & Supplies – 1.7% | ||||||||||
5,439 | Cochlear, Ltd. | 336,282 | ||||||||
2,399 | Coloplast A/S – Class B | 157,440 | ||||||||
501 | Essilor International SA | 59,756 | ||||||||
13,600 | Hoya Corp. | 545,356 | ||||||||
1,500 | Sysmex Corp. | 89,483 | ||||||||
2,200 | Terumo Corp. | 52,802 | ||||||||
1,241,119 | ||||||||||
Health Care Providers & Services – 2.9% | ||||||||||
7,600 | Alfresa Holdings Corp. | 118,375 | ||||||||
4,158 | Fresenius Medical Care AG & Co. KGaA | 343,171 | ||||||||
3,997 | Fresenius SE & Co. KGaA | 256,412 | ||||||||
3,700 | Medipal Holdings Corp. | 60,382 | ||||||||
7,961 | Ramsay Health Care, Ltd. | 377,496 | ||||||||
30,204 | Ryman Healthcare, Ltd. | 162,045 | ||||||||
34,279 | Sonic Healthcare, Ltd. | 565,085 | ||||||||
7,300 | Suzuken Co., Ltd. | 233,848 | ||||||||
2,116,814 | ||||||||||
Health Care Technology – 0.3% | ||||||||||
10,800 | M3, Inc. | 217,289 | ||||||||
Hotels, Restaurants & Leisure – 3.1% | ||||||||||
412 | Accor SA | 20,790 | ||||||||
6,519 | Carnival PLC | 332,740 | ||||||||
7,157 | Compass Group PLC | 118,395 | ||||||||
3,945 | Merlin Entertainments PLC | 26,470 | ||||||||
24,000 | Oriental Land Co., Ltd. | 1,532,729 | ||||||||
18,269 | Tabcorp Holdings, Ltd. | 64,122 | ||||||||
1,861 | Whitbread PLC | 144,602 | ||||||||
2,239,848 | ||||||||||
Household Durables – 1.3% | ||||||||||
6,400 | Casio Computer Co., Ltd.# | 126,358 | ||||||||
1,700 | Panasonic Corp. | 23,360 | ||||||||
1,198 | Persimmon PLC* | 37,171 | ||||||||
1,800 | Sekisui House, Ltd. | 28,595 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Household Durables – (continued) | ||||||||||
5,700 | Sony Corp. | $ | 161,237 | |||||||
33,116 | Taylor Wimpey PLC | 96,662 | ||||||||
152,000 | Techtronic Industries Co. | 498,084 | ||||||||
971,467 | ||||||||||
Household Products – 0.8% | ||||||||||
1,677 | Henkel AG & Co. KGaA | 159,811 | ||||||||
833 | Reckitt Benckiser Group PLC | 71,818 | ||||||||
14,400 | Unicharm Corp. | 342,378 | ||||||||
574,007 | ||||||||||
Independent Power and Renewable Electricity Producers – 0.4% | ||||||||||
183,220 | Meridian Energy, Ltd. | 268,085 | ||||||||
Industrial Conglomerates – 1.2% | ||||||||||
13,392 | CK Hutchison Holdings, Ltd. | 196,786 | ||||||||
60,000 | Keihan Electric Railway Co., Ltd. | 349,595 | ||||||||
14,700 | Seibu Holdings, Inc. | 340,682 | ||||||||
887,063 | ||||||||||
Information Technology Services – 0.8% | ||||||||||
272 | Cap Gemini SA | 24,065 | ||||||||
7,000 | Fujitsu, Ltd. | 39,150 | ||||||||
5,800 | Nomura Research Institute, Ltd. | 227,033 | ||||||||
2,300 | NTT Data Corp. | 100,556 | ||||||||
4,400 | Otsuka Corp. | 205,671 | ||||||||
596,475 | ||||||||||
Insurance – 2.2% | ||||||||||
5,179 | Admiral Group PLC | 112,849 | ||||||||
9,600 | AIA Group, Ltd. | 62,854 | ||||||||
10,819 | Aviva PLC | 83,708 | ||||||||
2,038 | Hannover Rueck SE | 197,167 | ||||||||
2,300 | MS&AD Insurance Group Holdings, Inc. | 71,667 | ||||||||
2,514 | QBE Insurance Group, Ltd. | 26,510 | ||||||||
3,129 | SCOR SE | 110,375 | ||||||||
5,500 | Sompo Japan Nipponkoa Holdings, Inc. | 201,873 | ||||||||
2,600 | Sony Financial Holdings, Inc. | 45,596 | ||||||||
435 | Swiss Re AG | 38,511 | ||||||||
10,200 | T&D Holdings, Inc. | 152,121 | ||||||||
2,500 | Tokio Marine Holdings, Inc. | 104,070 | ||||||||
7,015 | Tryg A/S | 146,259 | ||||||||
725 | Zurich Insurance Group AG* | 220,750 | ||||||||
1,574,310 | ||||||||||
Internet & Catalog Retail – 0.2% | ||||||||||
8,800 | Rakuten, Inc. | 142,208 | ||||||||
Leisure Products – 0.3% | ||||||||||
500 | Sankyo Co., Ltd. | 17,713 | ||||||||
1,700 | Shimano, Inc. | 232,001 | ||||||||
249,714 | ||||||||||
Life Sciences Tools & Services – 0.5% | ||||||||||
2,691 | Lonza Group AG* | 359,587 | ||||||||
Machinery – 1.8% | ||||||||||
3,400 | Amada Holdings Co., Ltd. | 35,953 | ||||||||
645 | ANDRITZ AG | 35,698 | ||||||||
1,609 | Atlas Copco AB – Class A | 45,053 | ||||||||
891 | Atlas Copco AB – Class B | 22,206 | ||||||||
200 | FANUC Corp. | 40,990 | ||||||||
20,000 | Kawasaki Heavy Industries, Ltd. | 93,324 | ||||||||
179 | Kone Oyj – Class B | 7,263 | ||||||||
3,172 | MAN SE | 326,676 | ||||||||
2,400 | Nabtesco Corp. | 60,211 | ||||||||
3,800 | NSK, Ltd. | 58,722 | ||||||||
949 | Schindler Holding AG (PC) | 155,239 | ||||||||
795 | Schindler Holding AG (REG) | 129,877 | ||||||||
6,110 | SKF AB – Class B | 139,447 | ||||||||
27,000 | Sumitomo Heavy Industries, Ltd. | 157,539 | ||||||||
1,308,198 | ||||||||||
Marine – 0.1% | ||||||||||
428 | Kuehne + Nagel International AG | 56,826 | ||||||||
6,000 | Mitsui OSK Lines, Ltd. | 19,220 | ||||||||
76,046 | ||||||||||
Media – 4.9% | ||||||||||
7,094 | Altice SA* | 976,997 | ||||||||
14,870 | Eutelsat Communications SA | 479,865 | ||||||||
14,568 | ITV PLC | 60,259 | ||||||||
289 | Kabel Deutschland Holding AG* | 38,658 | ||||||||
8,885 | Numericable-SFR SAS* | 470,892 | ||||||||
4,164 | Pearson PLC | 78,827 | ||||||||
343 | Publicis Groupe SA# | 25,357 | ||||||||
2,535 | Reed Elsevier NV | 60,118 | ||||||||
7,704 | Reed Elsevier PLC | 125,265 | ||||||||
22,406 | SES SA (FDR) | 752,653 | ||||||||
146,000 | Singapore Press Holdings, Ltd. | 442,391 | ||||||||
2,999 | Wolters Kluwer NV | 89,074 | ||||||||
3,600,356 | ||||||||||
Metals & Mining – 0.6% | ||||||||||
4,910 | Boliden AB | 89,541 | ||||||||
3,903 | Iluka Resources, Ltd. | 23,123 | ||||||||
94,000 | Kobe Steel, Ltd. | 158,241 | ||||||||
16,393 | Newcrest Mining, Ltd.* | 164,646 | ||||||||
296 | Randgold Resources, Ltd. | 19,926 | ||||||||
455,477 | ||||||||||
Multi-Utilities – 1.0% | ||||||||||
58,826 | National Grid PLC | 755,217 | ||||||||
Multiline Retail – 3.6% | ||||||||||
10,400 | Don Quijote Holdings Co., Ltd. | 442,788 | ||||||||
9,700 | Isetan Mitsukoshi Holdings, Ltd. | 173,438 | ||||||||
10,900 | J Front Retailing Co., Ltd. | 205,227 | ||||||||
8,100 | Marui Group Co., Ltd. | 109,483 | ||||||||
13,936 | Next PLC | 1,631,055 | ||||||||
6,000 | Takashimaya Co., Ltd. | 54,425 | ||||||||
2,616,416 | ||||||||||
Oil, Gas & Consumable Fuels – 1.2% | ||||||||||
12,313 | Caltex Australia, Ltd. | 302,520 | ||||||||
13,400 | JX Holdings, Inc. | 57,840 | ||||||||
454 | Koninklijke Vopak NV | 22,908 | ||||||||
15,644 | Neste Oyj | 398,642 | ||||||||
13,000 | TonenGeneral Sekiyu KK | 121,002 | ||||||||
902,912 | ||||||||||
Paper & Forest Products – 0.4% | ||||||||||
1,400 | Mondi PLC | 30,154 | ||||||||
13,000 | Oji Holdings Corp. | 56,517 | ||||||||
13,702 | Stora Enso Oyj – Class R | 141,205 | ||||||||
5,199 | UPM-Kymmene Oyj | 91,972 | ||||||||
319,848 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
INTECH International Managed Volatility Fund
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Personal Products – 0.8% | ||||||||||
4,100 | Kao Corp. | $ | 190,743 | |||||||
1,242 | L’Oreal SA | 221,514 | ||||||||
6,600 | Shiseido Co., Ltd. | 149,831 | ||||||||
562,088 | ||||||||||
Pharmaceuticals – 8.8% | ||||||||||
31,900 | Astellas Pharma, Inc. | 455,025 | ||||||||
6,900 | Daiichi Sankyo Co., Ltd. | 127,659 | ||||||||
7,000 | Eisai Co., Ltd. | 469,985 | ||||||||
3,000 | Hisamitsu Pharmaceutical Co., Inc. | 116,573 | ||||||||
10,000 | Kyowa Hakko Kirin Co., Ltd. | 130,833 | ||||||||
2,489 | Merck KGaA | 247,984 | ||||||||
12,600 | Mitsubishi Tanabe Pharma Corp. | 188,943 | ||||||||
4,727 | Novartis AG | 466,025 | ||||||||
23,838 | Novo Nordisk A/S – Class B | 1,298,998 | ||||||||
1,300 | Otsuka Holdings Co., Ltd. | 41,469 | ||||||||
468 | Roche Holding AG | 131,182 | ||||||||
8,200 | Santen Pharmaceutical Co., Ltd. | 116,128 | ||||||||
19,800 | Shionogi & Co., Ltd. | 767,762 | ||||||||
8,251 | Shire PLC | 660,427 | ||||||||
200 | Taisho Pharmaceutical Holdings Co., Ltd. | 13,516 | ||||||||
5,000 | Takeda Pharmaceutical Co., Ltd. | 241,522 | ||||||||
15,421 | Teva Pharmaceutical Industries, Ltd. | 912,577 | ||||||||
6,386,608 | ||||||||||
Professional Services – 0.1% | ||||||||||
710 | Randstad Holding NV | 46,228 | ||||||||
Real Estate Investment Trusts (REITs) – 3.9% | ||||||||||
196,000 | CapitaLand Commercial Trust | 227,078 | ||||||||
136,366 | GPT Group | 450,226 | ||||||||
89 | Japan Prime Realty Investment Corp. | 276,739 | ||||||||
144 | Japan Retail Fund Investment Corp. | 288,188 | ||||||||
182 | Klepierre | 8,005 | ||||||||
92,500 | Link REIT | 541,780 | ||||||||
173 | Nippon Prologis REIT, Inc. | 318,658 | ||||||||
69,000 | Suntec Real Estate Investment Trust | 88,396 | ||||||||
242 | United Urban Investment Corp. | 342,324 | ||||||||
41,216 | Westfield Corp. | 289,962 | ||||||||
2,831,356 | ||||||||||
Real Estate Management & Development – 5.4% | ||||||||||
13,392 | Cheung Kong Property Holdings, Ltd.* | 111,092 | ||||||||
600 | Daito Trust Construction Co., Ltd. | 62,172 | ||||||||
3,500 | Daiwa House Industry Co., Ltd. | 81,601 | ||||||||
8,514 | Deutsche Annington Immobilien SE | 240,112 | ||||||||
6,156 | Deutsche Wohnen AG | 141,051 | ||||||||
51,700 | Henderson Land Development Co., Ltd. | 353,835 | ||||||||
36,000 | Hysan Development Co., Ltd. | 156,051 | ||||||||
14,000 | Kerry Properties, Ltd. | 54,907 | ||||||||
33,511 | Lend Lease Group | 388,532 | ||||||||
55,000 | New World Development Co., Ltd. | 71,949 | ||||||||
35,000 | Sun Hung Kai Properties, Ltd. | 567,131 | ||||||||
38,000 | Swire Pacific, Ltd. – Class A | 477,739 | ||||||||
102,200 | Swire Properties, Ltd. | 326,326 | ||||||||
5,320 | Swiss Prime Site AG* | 403,824 | ||||||||
49,000 | UOL Group, Ltd. | 251,823 | ||||||||
55,000 | Wheelock & Co., Ltd. | 280,985 | ||||||||
3,969,130 | ||||||||||
Road & Rail – 3.0% | ||||||||||
600 | Central Japan Railway Co. | 108,384 | ||||||||
258,000 | ComfortDelGro Corp., Ltd. | 599,733 | ||||||||
500 | East Japan Railway Co. | 44,986 | ||||||||
15,000 | Keisei Electric Railway Co., Ltd. | 178,475 | ||||||||
134,500 | MTR Corp., Ltd. | 626,405 | ||||||||
22,000 | Nagoya Railroad Co., Ltd. | 82,340 | ||||||||
16,000 | Nippon Express Co., Ltd. | 78,712 | ||||||||
7,100 | West Japan Railway Co. | 454,593 | ||||||||
2,173,628 | ||||||||||
Semiconductor & Semiconductor Equipment – 0.3% | ||||||||||
6,380 | ARM Holdings PLC | 103,938 | ||||||||
2,686 | Infineon Technologies AG | 33,324 | ||||||||
10,935 | STMicroelectronics NV | 89,652 | ||||||||
226,914 | ||||||||||
Software – 1.0% | ||||||||||
4,130 | Dassault Systemes | 300,255 | ||||||||
3,233 | NICE Systems, Ltd. | 205,721 | ||||||||
700 | Nintendo Co., Ltd. | 117,096 | ||||||||
11,689 | Sage Group PLC | 94,112 | ||||||||
700 | Trend Micro, Inc. | 23,968 | ||||||||
741,152 | ||||||||||
Specialty Retail – 2.2% | ||||||||||
13,039 | Dixons Carphone PLC | 92,896 | ||||||||
1,000 | Fast Retailing Co., Ltd. | 454,033 | ||||||||
6,300 | Nitori Holdings Co., Ltd. | 513,802 | ||||||||
1,100 | Shimamura Co., Ltd. | 115,600 | ||||||||
3,300 | USS Co., Ltd. | 59,598 | ||||||||
84,600 | Yamada Denki Co., Ltd.# | 338,760 | ||||||||
1,574,689 | ||||||||||
Technology Hardware, Storage & Peripherals – 0.2% | ||||||||||
2,100 | Canon, Inc. | 68,344 | ||||||||
1,400 | FUJIFILM Holdings Corp. | 50,036 | ||||||||
118,380 | ||||||||||
Textiles, Apparel & Luxury Goods – 1.1% | ||||||||||
2,800 | Asics Corp. | 72,420 | ||||||||
5,822 | Burberry Group PLC | 143,689 | ||||||||
578 | Christian Dior SE | 112,817 | ||||||||
194 | Hugo Boss AG | 21,679 | ||||||||
2,625 | Luxottica Group SpA | 174,542 | ||||||||
622 | LVMH Moet Hennessy Louis Vuitton SE | 108,959 | ||||||||
152 | Pandora A/S | 16,334 | ||||||||
49,000 | Yue Yuen Industrial Holdings, Ltd. | 164,043 | ||||||||
814,483 | ||||||||||
Tobacco – 0.4% | ||||||||||
5,122 | Imperial Tobacco Group PLC | 246,790 | ||||||||
1,900 | Japan Tobacco, Inc. | 67,704 | ||||||||
314,494 | ||||||||||
Trading Companies & Distributors – 1.4% | ||||||||||
402 | Brenntag AG | 23,046 | ||||||||
22,798 | Bunzl PLC | 622,474 | ||||||||
4,200 | ITOCHU Corp. | 55,499 | ||||||||
1,600 | Mitsubishi Corp. | 35,198 | ||||||||
2,400 | Sumitomo Corp. | 27,928 | ||||||||
2,489 | Travis Perkins PLC | 82,505 | ||||||||
2,517 | Wolseley PLC | 160,659 | ||||||||
1,007,309 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Transportation Infrastructure – 0.9% | ||||||||||
19,834 | Groupe Eurotunnel SE | $ | 287,196 | |||||||
1,500 | Japan Airport Terminal Co., Ltd. | 81,760 | ||||||||
35,619 | Transurban Group | 255,533 | ||||||||
624,489 | ||||||||||
Water Utilities – 0.2% | ||||||||||
11,414 | United Utilities Group PLC | 159,947 | ||||||||
Total Common Stocks (cost $68,233,891) | 71,771,703 | |||||||||
Preferred Stocks – 0.4% | ||||||||||
Automobiles – 0.1% | ||||||||||
459 | Porsche Automobil Holding SE | 38,665 | ||||||||
72 | Volkswagen AG | 16,694 | ||||||||
55,359 | ||||||||||
Household Products – 0% | ||||||||||
323 | Henkel AG & Co. KGaA | 36,221 | ||||||||
Media – 0.3% | ||||||||||
3,839 | ProSiebenSat.1 Media AG | 189,575 | ||||||||
Total Preferred Stocks (cost $296,445) | 281,155 | |||||||||
Investment Companies – 1.8% | ||||||||||
Investments Purchased with Cash Collateral from Securities Lending – 0.5% | ||||||||||
355,505 | Janus Cash Collateral Fund LLC, 0.1304%°°,£ | 355,505 | ||||||||
Money Markets – 1.3% | ||||||||||
946,213 | Janus Cash Liquidity Fund LLC, 0.1291%°°,£ | 946,213 | ||||||||
Total Investment Companies (cost $1,301,718) | 1,301,718 | |||||||||
Total Investments (total cost $69,832,054) – 100.5% | 73,354,576 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.5)% | (330,549) | |||||||||
Net Assets – 100% | $ | 73,024,027 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Japan | $ | 22,748,238 | 31 | .0% | ||||
Hong Kong | 10,793,189 | 14 | .7 | |||||
United Kingdom | 8,094,944 | 11 | .0 | |||||
Australia | 5,761,981 | 7 | .9 | |||||
Switzerland | 4,617,935 | 6 | .3 | |||||
France | 4,031,646 | 5 | .5 | |||||
Germany | 2,963,263 | 4 | .0 | |||||
Singapore | 2,872,001 | 3 | .9 | |||||
Israel | 2,621,819 | 3 | .6 | |||||
Denmark | 1,672,047 | 2 | .3 | |||||
Guernsey | 1,447,889 | 2 | .0 | |||||
United States | 1,301,718 | 1 | .8 | |||||
New Zealand | 859,139 | 1 | .2 | |||||
Italy | 681,487 | 0 | .9 | |||||
Finland | 639,082 | 0 | .9 | |||||
China | 587,553 | 0 | .8 | |||||
Sweden | 445,314 | 0 | .6 | |||||
Belgium | 356,201 | 0 | .5 | |||||
Spain | 344,343 | 0 | .5 | |||||
Netherlands | 313,048 | 0 | .4 | |||||
Norway | 103,236 | 0 | .1 | |||||
Ireland | 47,332 | 0 | .1 | |||||
Austria | 35,698 | 0 | .0 | |||||
Portugal | 15,473 | 0 | .0 | |||||
Total | $ | 73,354,576 | 100 | .0% | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Notes to Schedule of Investments and Other Information
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. | |
CDI | Clearing House Electronic Subregister System Depositary Interest | |
FDR | Fixed Depositary Receipt | |
LLC | Limited Liability Company | |
PC | Participation Certificate | |
PLC | Public Limited Company | |
REG | Registered |
* | Non-income producing security. |
°° | Rate shown is the 7-day yield as of June 30, 2015. | |
# | Loaned security; a portion of the security is on loan at June 30, 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 year ended June 30, 2015. Unless otherwise indicated, all information in the table is for the year ended June 30, 2015. |
Share | Share | |||||||||||||||
Balance | Balance | Realized | Dividend | Value | ||||||||||||
at 6/30/14 | Purchases | Sales | at 6/30/15 | Gain/(Loss) | Income | at 6/30/15 | ||||||||||
INTECH International Managed Volatility Fund | ||||||||||||||||
Janus Cash Collateral Fund LLC | 2,157,687 | 7,372,584 | (9,174,766) | 355,505 | $– | $16,599(1) | $ 355,505 | |||||||||
Janus Cash Liquidity Fund LLC | 441,146 | 38,624,504 | (38,119,437) | 946,213 | – | 671 | 946,213 | |||||||||
Total | $– | $ 17,270 | $1,301,718 | |||||||||||||
(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 June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | |||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||
INTECH International Managed Volatility Fund | ||||||||
Assets | ||||||||
Investments in Securities: | ||||||||
Common Stocks | $71,771,703 | $ – | $– | |||||
Preferred Stocks | – | 281,155 | – | |||||
Investment Companies | – | 1,301,718 | – | |||||
Total Assets | $71,771,703 | $1,582,873 | $– | |||||
12 | JUNE 30, 2015
Table of Contents
Statement of Assets and Liabilities
As of June 30, 2015 | INTECH International Managed Volatility Fund(1) | |||
Assets: | ||||
Investments, at cost | $ | 69,832,054 | ||
Unaffiliated investments, at value(2) | $ | 72,052,858 | ||
Affiliated investments, at value | 1,301,718 | |||
Cash | 5,435 | |||
Cash denominated in foreign currency(3) | 12,876 | |||
Non-interested Trustees’ deferred compensation | 1,459 | |||
Receivables: | ||||
Investments sold | 4,505 | |||
Fund shares sold | 96,697 | |||
Dividends | 139,084 | |||
Dividends from affiliates | 94 | |||
Foreign dividend tax reclaim | 60,679 | |||
Other assets | 102 | |||
Total Assets | 73,675,507 | |||
Liabilities: | ||||
Collateral for securities loaned (Note 2) | 355,505 | |||
Payables: | ||||
Investments purchased | 172,226 | |||
Fund shares repurchased | 25,916 | |||
Advisory fees | 31,346 | |||
Fund administration fees | 571 | |||
Transfer agent fees and expenses | 1,949 | |||
12b-1 Distribution and shareholder servicing fees | 1,643 | |||
Non-interested Trustees’ fees and expenses | 431 | |||
Non-interested Trustees’ deferred compensation fees | 1,459 | |||
Accrued expenses and other payables | 60,434 | |||
Total Liabilities | 651,480 | |||
Net Assets | $ | 73,024,027 |
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 June 30, 2015 | INTECH International Managed Volatility Fund(1) | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 71,504,635 | ||
Undistributed net investment income/(loss) | 91,843 | |||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | (2,093,206) | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 3,520,755 | |||
Total Net Assets | $ | 73,024,027 | ||
Net Assets - Class A Shares | $ | 5,829,353 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 725,950 | |||
Net Asset Value Per Share(4) | $ | 8.03 | ||
Maximum Offering Price Per Share(5) | $ | 8.52 | ||
Net Assets - Class C Shares | $ | 509,922 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 64,204 | |||
Net Asset Value Per Share(4) | $ | 7.94 | ||
Net Assets - Class D Shares | $ | 504,328 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 63,072 | |||
Net Asset Value Per Share | $ | 8.00 | ||
Net Assets - Class I Shares | $ | 65,226,605 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 8,151,405 | |||
Net Asset Value Per Share | $ | 8.00 | ||
Net Assets - Class S Shares | $ | 67,076 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 8,294 | |||
Net Asset Value Per Share | $ | 8.09 | ||
Net Assets - Class T Shares | $ | 886,743 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 111,001 | |||
Net Asset Value Per Share | $ | 7.99 |
(1) | Formerly named INTECH International Fund. | |
(2) | Includes $338,314 of securities on loan. See Note 2 in Notes to Financial Statements. | |
(3) | Includes cost of $12,932. | |
(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 | JUNE 30, 2015
Table of Contents
Statement of Operations
For the year ended June 30, 2015 | INTECH International Managed Volatility Fund(1) | |||
Investment Income: | ||||
Affiliated securities lending income, net | $ | 16,599 | ||
Dividends | 1,854,468 | |||
Dividends from affiliates | 671 | |||
Other income | 243 | |||
Foreign tax withheld | (138,245) | |||
Total Investment Income | 1,733,736 | |||
Expenses: | ||||
Advisory fees | 395,850 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 13,481 | |||
Class C Shares | 4,799 | |||
Class S Shares | 161 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 70 | |||
Class S Shares | 161 | |||
Class T Shares | 3,684 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 8,093 | |||
Class C Shares | 341 | |||
Class I Shares | 1,245 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 1,087 | |||
Class C Shares | 105 | |||
Class D Shares | 111 | |||
Class I Shares | 2,600 | |||
Class S Shares | 5 | |||
Class T Shares | 117 | |||
Shareholder reports expense | 15,124 | |||
Registration fees | 98,926 | |||
Custodian fees | 44,309 | |||
Professional fees | 88,423 | |||
Non-interested Trustees’ fees and expenses | 1,551 | |||
Fund administration fees | 6,508 | |||
Other expenses | 14,279 | |||
Total Expenses | 701,030 | |||
Less: Excess Expense Reimbursement | (1,679) | |||
Net Expenses | 699,351 | |||
Net Investment Income/(Loss) | 1,034,385 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 257,720 | |||
Total Net Realized Gain/(Loss) on Investments | 257,720 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (4,405,575) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (4,405,575) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (3,113,470) |
(1) | Formerly named INTECH International Fund. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets
INTECH International Managed Volatility Fund(1) | ||||||||
For each year ended June 30 | 2015(2) | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 1,034,385 | $ | 1,617,502 | ||||
Net realized gain/(loss) on investments | 257,720 | 8,398,330 | ||||||
Change in unrealized net appreciation/depreciation | (4,405,575) | 4,156,190 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (3,113,470) | 14,172,022 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income | ||||||||
Class A Shares | (89,175) | (39,689) | ||||||
Class C Shares | (5,137) | (1,938) | ||||||
Class I Shares | (1,265,058) | (1,796,718) | ||||||
Class S Shares | (1,098) | (1,270) | ||||||
Class T Shares | (24,096) | (3,678) | ||||||
Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | (588,211) | (272) | ||||||
Class C Shares | (51,586) | (9) | ||||||
Class I Shares | (7,132,161) | (11,461) | ||||||
Class S Shares | (6,924) | (10) | ||||||
Class T Shares | (167,847) | (26) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (9,331,293) | (1,855,071) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 1,798,281 | 4,966,221 | ||||||
Class C Shares | 130,226 | 581,716 | ||||||
Class D Shares | 537,916 | N/A | ||||||
Class I Shares | 5,335,127 | 5,093,283 | ||||||
Class S Shares | 3,000 | – | ||||||
Class T Shares | 747,118 | 2,608,832 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 677,386 | 39,961 | ||||||
Class C Shares | 55,155 | 1,947 | ||||||
Class I Shares | 8,367,123 | 1,807,383 | ||||||
Class S Shares | 8,022 | 1,280 | ||||||
Class T Shares | 190,773 | 3,637 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (1,072,592) | (491,460) | ||||||
Class C Shares | (111,785) | (194,095) | ||||||
Class D Shares | (20,459) | N/A | ||||||
Class I Shares | (6,404,255) | (9,665,704) | ||||||
Class S Shares | – | (71,360) | ||||||
Class T Shares | (2,272,750) | (384,966) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | 7,968,286 | 4,296,675 | ||||||
Net Increase/(Decrease) in Net Assets | (4,476,477) | 16,613,626 | ||||||
Net Assets: | ||||||||
Beginning of period | 77,500,504 | 60,886,878 | ||||||
End of period | $ | 73,024,027 | $ | 77,500,504 | ||||
Undistributed Net Investment Income/(Loss) | $ | 91,843 | $ | 384,607 |
(1) | Formerly named INTECH International Fund. | |
(2) | Period from April 24, 2015 (inception date) through June 30, 2015 for Class D Shares. |
See Notes to Financial Statements.
16 | JUNE 30, 2015
Table of Contents
Financial Highlights
Class A Shares
INTECH International Managed Volatility Fund(1) | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $9.66 | $8.07 | $6.79 | $8.10 | $6.16 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.09(2) | 0.25(2) | �� | 0.22 | 0.12 | 0.66 | ||||||||||||||||
Net realized and unrealized gain/(loss) | (0.56) | 1.57 | 1.21 | (1.36) | 1.39 | |||||||||||||||||
Total from Investment Operations | (0.47) | 1.82 | 1.43 | (1.24) | 2.05 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.15) | (0.23) | (0.15) | (0.07) | (0.11) | |||||||||||||||||
Distributions (from capital gains) | (1.01) | –(3) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (1.16) | (0.23) | (0.15) | (0.07) | (0.11) | |||||||||||||||||
Net Asset Value, End of Period | $8.03 | $9.66 | $8.07 | $6.79 | $8.10 | |||||||||||||||||
Total Return | (4.19)% | 22.74% | 21.27% | (15.33)% | 33.42% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $5,829 | $5,342 | $473 | $445 | $526 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $5,392 | $2,240 | $317 | $452 | $1,910 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.35% | 1.21% | 1.22% | 1.42% | 3.22% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.34% | 1.20% | 1.22% | 1.26% | 1.07%(4) | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.09% | 2.69% | 1.26% | 1.72% | 2.05% | |||||||||||||||||
Portfolio Turnover Rate | 191% | 160% | 143% | 140% | 179% |
Class C Shares
INTECH International Managed Volatility Fund(1) | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $9.58 | $8.14 | $6.78 | $8.11 | $6.17 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.03(2) | 0.19(2) | 2.46 | 0.17 | 0.58 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.56) | 1.57 | (0.93) | (1.43) | 1.47 | |||||||||||||||||
Total from Investment Operations | (0.53) | 1.76 | 1.53 | (1.26) | 2.05 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.10) | (0.32) | (0.17) | (0.07) | (0.11) | |||||||||||||||||
Distributions (from capital gains) | (1.01) | –(3) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (1.11) | (0.32) | (0.17) | (0.07) | (0.11) | |||||||||||||||||
Net Asset Value, End of Period | $7.94 | $9.58 | $8.14 | $6.78 | $8.11 | |||||||||||||||||
Total Return | (4.95)% | 21.91% | 22.79% | (15.55)% | 33.37% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $510 | $526 | $113 | $433 | $563 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $480 | $179 | $251 | $574 | $1,877 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 2.02% | 1.93% | 1.32% | 1.71% | 3.96% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 2.01% | 1.93% | 1.18% | 1.47% | 1.21%(5) | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.40% | 2.13% | 1.20% | 1.33% | 1.92% | |||||||||||||||||
Portfolio Turnover Rate | 191% | 160% | 143% | 140% | 179% |
(1) | Formerly named INTECH International Fund. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year. | |
(3) | Less than $0.005 on a per share basis. | |
(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) would have been 1.25% in 2011 without the waiver of these fees and expenses. | |
(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) would have been 2.00% in 2011 without the waiver of these fees and expenses. |
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Financial Highlights (continued)
Class D Shares
INTECH International Managed Volatility Fund(1) | ||||||
For a share outstanding during the period ended June 30 | 2015(2) | |||||
Net Asset Value, Beginning of Period | $10.00 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(3) | 0.03 | |||||
Net realized and unrealized gain/(loss) | (2.03) | |||||
Total from Investment Operations | (2.00) | |||||
Less Dividends and Distributions: | ||||||
Dividends (from net investment income) | – | |||||
Distributions (from capital gains) | – | |||||
Total Dividends and Distributions | – | |||||
Net Asset Value, End of Period | $8.00 | |||||
Total Return* | (20.00)% | |||||
Net Assets, End of Period (in thousands) | $504 | |||||
Average Net Assets for the Period (in thousands) | $315 | |||||
Ratios to Average Net Assets: | ||||||
Ratio of Gross Expenses** | 2.26% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.26% | |||||
Ratio of Net Investment Income/(Loss)** | 1.80% | |||||
Portfolio Turnover Rate | 191% |
Class I Shares
INTECH International Managed Volatility Fund(1) | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $9.63 | $8.03 | $6.77 | $8.06 | $6.14 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.13(3) | 0.21(3) | 0.18 | 0.12 | 0.03 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.57) | 1.63 | 1.28 | (1.35) | 2.00 | |||||||||||||||||
Total from Investment Operations | (0.44) | 1.84 | 1.46 | (1.23) | 2.03 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.18) | (0.24) | (0.20) | (0.06) | (0.11) | |||||||||||||||||
Distributions (from capital gains) | (1.01) | –(4) | – | – | – | |||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(5) | – | |||||||||||||||||
Total Dividends and Distributions | (1.19) | (0.24) | (0.20) | (0.06) | (0.11) | |||||||||||||||||
Net Asset Value, End of Period | $8.00 | $9.63 | $8.03 | $6.77 | $8.06 | |||||||||||||||||
Total Return | (3.90)% | 23.21% | 21.78% | (15.18)% | 33.20% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $65,227 | $69,062 | $59,981 | $35,608 | $20,713 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $64,504 | $66,596 | $42,583 | $29,910 | $1,393 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.93% | 0.81% | 0.92% | 1.13% | 3.08% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.93% | 0.81% | 0.92% | 1.00% | 0.86% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.48% | 2.27% | 1.86% | 2.05% | 2.28% | |||||||||||||||||
Portfolio Turnover Rate | 191% | 160% | 143% | 140% | 179% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Formerly named INTECH International Fund. | |
(2) | Period from April 24, 2015 (inception date) through June 30, 2015. | |
(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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Class S Shares
INTECH International Managed Volatility Fund(1) | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $9.74 | $8.09 | $6.79 | $8.12 | $6.16 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.09(2) | 0.15(2) | 2.47 | 0.10 | 0.70 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.57) | 1.69 | (1.02) | (1.36) | 1.37 | |||||||||||||||||
Total from Investment Operations | (0.48) | 1.84 | 1.45 | (1.26) | 2.07 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.16) | (0.19) | (0.15) | (0.07) | (0.11) | |||||||||||||||||
Distributions (from capital gains) | (1.01) | –(3) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (1.17) | (0.19) | (0.15) | (0.07) | (0.11) | |||||||||||||||||
Net Asset Value, End of Period | $8.09 | $9.74 | $8.09 | $6.79 | $8.12 | |||||||||||||||||
Total Return | (4.29)% | 22.92% | 21.48% | (15.54)% | 33.75% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $67 | $67 | $118 | $421 | $498 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $64 | $86 | $254 | $432 | $1,870 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.43% | 1.33% | 1.48% | 1.66% | 3.46% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.43% | 1.13% | 1.29% | 1.44% | 1.07%(4) | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.01% | 1.69% | 1.09% | 1.52% | 2.05% | |||||||||||||||||
Portfolio Turnover Rate | 191% | 160% | 143% | 140% | 179% |
Class T Shares
INTECH International Managed Volatility Fund(1) | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $9.60 | $8.01 | $6.77 | $8.09 | $6.16 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.09(2) | 0.32(2) | 0.08 | 0.06 | 0.17 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.55) | 1.49 | 1.35 | (1.31) | 1.87 | |||||||||||||||||
Total from Investment Operations | (0.46) | 1.81 | 1.43 | (1.25) | 2.04 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.14) | (0.22) | (0.19) | (0.07) | (0.11) | |||||||||||||||||
Distributions (from capital gains) | (1.01) | –(3) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (1.15) | (0.22) | (0.19) | (0.07) | (0.11) | |||||||||||||||||
Net Asset Value, End of Period | $7.99 | $9.60 | $8.01 | $6.77 | $8.09 | |||||||||||||||||
Total Return | (4.08)% | 22.78% | 21.30% | (15.47)% | 33.26% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $887 | $2,504 | $202 | $59 | $45 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $1,474 | $1,121 | $70 | $40 | $29 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.16% | 1.12% | 1.27% | 1.41% | 2.41% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.16% | 1.12% | 1.26% | 1.25% | 0.54%(5) | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.10% | 3.44% | 1.24% | 1.80% | 3.12% | |||||||||||||||||
Portfolio Turnover Rate | 191% | 160% | 143% | 140% | 179% |
(1) | Formerly named INTECH International Fund. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year. | |
(3) | Less than $0.005 on a per share basis. | |
(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) would have been 1.50% in 2011 without the waiver of these fees and expenses. | |
(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) would have been 1.25% in 2011 without the waiver of these fees and expenses. |
See Notes to Financial Statements.
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Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
INTECH International Managed Volatility Fund (formerly named INTECH International Fund) (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in common stocks. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
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 evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer,
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such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of June 30, 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 year. 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
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Notes to Financial Statements (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, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
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
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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 (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 | $338,314 | $– | $(338,314) | $– | ||||||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. Securities on loan will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral as permitted by the SEC. The value of the collateral must be at least 102% of the market value of the loaned securities that are denominated in U.S. dollars and 105% of the market value of the loaned securities that are not denominated in U.S. dollars. Upon receipt of cash collateral, Janus Capital intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. Loaned securities and related collateral are marked-to-market each business day based upon the market value of the loaned securities at the close of business, employing the most recent available pricing information. Collateral levels are then adjusted based on this mark-to-market evaluation.
Real Estate Investing
To the extent that real estate-related securities may be included in the Fund’s named benchmark index, INTECH’s mathematical investment process may select equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Securities Lending
Under procedures adopted by the Trustees, the Fund may seek to earn additional income by lending securities to qualified parties. Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. The Fund may lend portfolio securities in an amount equal to up to 1/3 of its total assets as determined at the time of the loan origination. There is the risk of delay in recovering a loaned security or the risk of loss in collateral rights if the borrower fails financially. In addition, Janus Capital makes efforts to balance the benefits and risks from granting such loans. All loans will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral as permitted by the SEC. If the Fund is unable to recover a security on loan, the Fund may use the collateral to purchase replacement securities in the market. There is a risk that the value of the collateral could decrease below the cost of the replacement security by the time the replacement investment is made, resulting in a loss to the Fund.
Upon receipt of cash collateral, Janus Capital may invest it in affiliated or non-affiliated cash management vehicles, whether registered or unregistered entities, as permitted by the 1940 Act and rules promulgated thereunder. Janus Capital currently intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. An investment in Janus Cash Collateral Fund LLC is generally subject to the same risks that shareholders experience when investing in similarly structured vehicles, such as the potential for significant fluctuations in assets as a result of the purchase and redemption activity of the securities lending program, a decline in the value of the collateral, and possible liquidity issues. Such risks may delay the return of the cash collateral and cause the Fund
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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 contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
INTECH International Managed Volatility Fund | All Asset Levels | 0.55 | ||||||||
INTECH Investment Management LLC (“INTECH”) serves as subadviser to the Fund. As subadviser, INTECH provides day-to-day management of the investment operations of the Fund subject to the general oversight of Janus Capital. Janus Capital owns approximately 97% of INTECH.
Janus Capital pays INTECH a subadvisory fee rate equal to 50% of the investment advisory fee paid by the Fund to Janus Capital (net of any fee waivers and expense reimbursements).
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Previous | ||||||||||
New Expense | Expense | |||||||||
Limit (%) | Limit (%) | |||||||||
(November 1, | (until November | |||||||||
Fund | 2014 to present) | 1, 2014) | ||||||||
INTECH International Managed Volatility Fund | 0.95 | 1.00 | ||||||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that 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
Janus Investment Fund | 25
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Notes to Financial Statements (continued)
prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital (or the subadviser) provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the year ended June 30, 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
26 | JUNE 30, 2015
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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 June 30, 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 year ended June 30, 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 $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 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 product compliant with Rule 2a-7 under the 1940 Act. There are no restrictions on the Fund’s ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Fund to Janus Cash Liquidity Fund LLC. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the year ended June 30, 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 year ended June 30, 2015, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
INTECH International Managed Volatilty Fund | $ | 278 | ||||
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 year ended June 30, 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 year ended June 30, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
INTECH International Managed Volatility Fund | $ | 89 | ||||
As of June 30, 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 | ||||||||
INTECH International Managed Volatility Fund - Class A Shares | – | % | – | % | ||||||
INTECH International Managed Volatility Fund - Class C Shares | 10 | 0 | ||||||||
INTECH International Managed Volatility Fund - Class D Shares | 10 | 0 | ||||||||
INTECH International Managed Volatility Fund - Class I Shares | 95 | 84 | ||||||||
INTECH International Managed Volatility Fund - Class S Shares | 96 | 0 | ||||||||
INTECH International Managed Volatility 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 (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
Janus Investment Fund | 27
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Notes to Financial Statements (continued)
4. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation, derivatives, and foreign currency contract adjustments. 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 Fund has elected to defer post-October losses and qualified late-year losses as noted in the table below. These losses will be deferred for tax purposes and recognized during the next fiscal year.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
INTECH International Managed Volatility Fund | $105,762 | $– | $– | $– | $(2,032,578) | $(3,225) | $3,449,433 | ||||||||||||||||||||||||
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 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.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
INTECH International Managed Volatility Fund | $69,905,143 | $5,364,634 | $(1,915,201) | |||||||||||
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, passive foreign investment companies, net investment losses, and capital loss carryovers. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the year ended June 30, 2015
Distributions | |||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | ||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | |||||||||||||||
INTECH International Managed Volatiity Fund | $1,686,955 | $7,644,338 | $– | $– | |||||||||||||||
For the year ended June 30, 2014
Distributions | |||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | ||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | |||||||||||||||
INTECH International Managed Volatility Fund | $1,855,071 | $– | $– | $– | |||||||||||||||
Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
INTECH International Managed Volatility Fund | $ | – | $ | 57,415 | $ | (57,415) | ||||||||
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5. | Capital Share Transactions |
INTECH International Managed | ||||||||||
Volatility Fund | ||||||||||
For each year ended June 30 | 2015(1) | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 214,874 | 546,197 | ||||||||
Reinvested dividends and distributions | 89,130 | 4,445 | ||||||||
Shares repurchased | (130,866) | (56,480) | ||||||||
Net Increase/(Decrease) in Fund Shares | 173,138 | 494,162 | ||||||||
Shares Outstanding, Beginning of Period | 552,812 | 58,650 | ||||||||
Shares Outstanding, End of Period | 725,950 | 552,812 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 15,663 | 61,670 | ||||||||
Reinvested dividends and distributions | 7,315 | 218 | ||||||||
Shares repurchased | (13,684) | (20,838) | ||||||||
Net Increase/(Decrease) in Fund Shares | 9,294 | 41,050 | ||||||||
Shares Outstanding, Beginning of Period | 54,910 | 13,860 | ||||||||
Shares Outstanding, End of Period | 64,204 | 54,910 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 65,610 | – | ||||||||
Reinvested dividends and distributions | – | – | ||||||||
Shares repurchased | (2,538) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 63,072 | – | ||||||||
Shares Outstanding, Beginning of Period | – | – | ||||||||
Shares Outstanding, End of Period | 63,072 | – | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 642,434 | 558,826 | ||||||||
Reinvested dividends and distributions | 1,106,762 | 201,942 | ||||||||
Shares repurchased | (772,450) | (1,056,819) | ||||||||
Net Increase/(Decrease) in Fund Shares | 976,746 | (296,051) | ||||||||
Shares Outstanding, Beginning of Period | 7,174,659 | 7,470,710 | ||||||||
Shares Outstanding, End of Period | 8,151,405 | 7,174,659 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 370 | – | ||||||||
Reinvested dividends and distributions | 1,047 | 141 | ||||||||
Shares repurchased | – | (7,782) | ||||||||
Net Increase/(Decrease) in Fund Shares | 1,417 | (7,641) | ||||||||
Shares Outstanding, Beginning of Period | 6,877 | 14,518 | ||||||||
Shares Outstanding, End of Period | 8,294 | 6,877 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 86,353 | 277,905 | ||||||||
Reinvested dividends and distributions | 25,268 | 407 | ||||||||
Shares repurchased | (261,461) | (42,667) | ||||||||
Net Increase/(Decrease) in Fund Shares | (149,840) | 235,645 | ||||||||
Shares Outstanding, Beginning of Period | 260,841 | 25,196 | ||||||||
Shares Outstanding, End of Period | 111,001 | 260,841 |
(1) | Period from April 24, 2015 (inception date) through June 30, 2015 for Class D Shares. |
6. | Purchases and Sales of Investment Securities |
For the year ended June 30, 2015, the aggregate cost of purchases and proceeds from sales of investment
Janus Investment Fund | 29
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Notes to Financial Statements (continued)
securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) was as follows:
Purchases of Long- | Proceeds from Sales | |||||||||
Purchases of | Proceeds from Sales | Term U.S. Government | of Long-Term U.S. | |||||||
Fund | Securities | of Securities | Obligations | Government Obligations | ||||||
INTECH International Managed Volatility Fund | $136,642,954 | $137,295,825 | $– | $– | ||||||
7. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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.
30 | JUNE 30, 2015
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of INTECH International Managed Volatility Fund:
of INTECH International Managed Volatility Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of INTECH International Managed Volatility Fund (formerly named INTECH International Fund) (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
Janus Investment Fund | 31
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (toll free); (ii) on the Fund’s website at janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding the Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through janus.com/proxyvoting and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Fund files its complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Fund’s Form N-Q: (i) is available on the SEC’s website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-0020 (toll free).
APPROVAL OF ADVISORY AGREEMENTS DURING THE PERIOD
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, based on the Trustees’ evaluation of the information provided by Janus Capital, the subadvisers, and the independent fee consultant, as well as other information, the Trustees determined that the overall arrangements between each Fund and Janus Capital and each subadviser, as applicable, were fair and reasonable in light of the nature, extent and quality of the services provided by Janus Capital, its affiliates and the subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting, the Trustees unanimously approved the continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, for the period from either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
32 | JUNE 30, 2015
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providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
Janus Investment Fund | 33
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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 June 30, 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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Designation Requirements (unaudited)
For federal income tax purposes, the Fund designated the following for the year ended June 30, 2015:
Foreign Taxes Paid and Foreign Source Income
Fund | Foreign Taxes Paid | Foreign Source Income | ||||||||
INTECH International Managed Volatility Fund | $ | 138,245 | $ | 1,854,468 | ||||||
Capital Gain Distributions
Fund | ||||||||||
INTECH International Managed Volatility Fund | $ | 7,644,338 | ||||||||
Qualified Dividend Income Percentage
Fund | ||||||||||
INTECH International Managed Volatility Fund | 100 | % | ||||||||
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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
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OFFICERS
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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Notes
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Notes
Janus Investment Fund | 53
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Janus provides access to a wide range of investment disciplines.
Alternative
Janus alternative funds seek to deliver strong risk-adjusted returns over a full market cycle with lower correlation to equity markets than traditional investments.
Asset Allocation
Janus’ asset allocation funds utilize our fundamental, bottom-up research to balance risk over the long term. From fund options that meet investors’ risk tolerance and objectives to a method that incorporates non-traditional investment choices to seek non-correlated sources of risk and return, Janus’ asset allocation funds aim to allocate risk more effectively.
Fixed Income
Janus fixed income funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek capital preservation and liquidity with current income as a secondary objective.
Global & International
Janus global and international funds seek to leverage Janus’ research capabilities by taking advantage of inefficiencies in foreign markets, where accurate information and analytical insight are often at a premium.
Growth & Core
Janus growth funds focus on companies believed to be the leaders in their respective industries, with solid management teams, expanding market share, margins and efficiencies. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical funds seek to outperform their respective indices while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH (a Janus subsidiary), these funds use a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
For more information about our funds, contact your investment professional or go to janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus).
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-0815-94031 | 125-02-93014 08-15 |
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annual report
June 30, 2015
INTECH U.S. Core Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
Table of Contents
INTECH U.S. Core Fund
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INTECH U.S. Core Fund (unaudited) (closed to certain new investors)
FUND SNAPSHOT INTECH’s active approach focuses on adding value by selecting stocks with unique volatility characteristics and low correlations to one another. | Managed by INTECH Investment Management LLC |
PERFORMANCE OVERVIEW
For the 12-month period ended June 30, 2015, INTECH U.S. Core Fund’s Class T Shares returned 7.10%. This compares to the 7.42% return posted by the S&P 500 Index, the Fund’s benchmark.
INVESTMENT STRATEGY
INTECH’s mathematical investing process seeks to build a more efficient portfolio than its benchmark, with returns in excess of the index while maintaining benchmark-like risk. The process does not attempt to predict the direction of the market, nor does it have a view of any particular company in the portfolio. Instead, it employs a proprietary optimization process to build portfolios with the potential to outperform the index by capturing stocks’ natural volatility.
Within specific risk controls, INTECH’s disciplined mathematical process establishes target proportional weightings for stocks in the Fund as a result of an optimization routine. Once the weights are determined and the portfolio is constructed, it is rebalanced and re-optimized on a periodic basis. By limiting the distance any one stock position can deviate from its benchmark weight, INTECH’s process attempts to control the relative risk of the portfolio. We believe that instituting an investment process aimed at providing consistent, positive excess returns at benchmark-like risk, will allow us to meet our shareholders’ objectives while minimizing the risk of underperformance relative to the benchmark.
PERFORMANCE REVIEW
The U.S. equity market as measured by the S&P 500 Index posted a positive return of 7.42% for the one-year period ended June 30, 2015. INTECH U.S. Core Fund slightly underperformed the S&P 500 Index over the period and generated a return of 7.10%.
The strategy’s active sector positioning tends to vary over time and is a function of the volatility and correlation characteristics of the underlying stocks. Over the past 12 months, the Fund was negatively impacted by average overweight allocations to the utilities and industrials sectors, which were among the weakest performing sectors over the period, as well as an underweight to the information technology sector. Stock selection, which is a residual of the investment process, also detracted during the period, especially within the energy sector.
OUTLOOK
INTECH attempts to generate a targeted excess return at the least amount of tracking error through all market cycles regardless of the direction the market moves or the magnitude of the move. While we may experience short periods of underperformance, we expect to exceed the benchmark over a three- to five-year time horizon.
Because INTECH does not conduct traditional economic or fundamental analysis, INTECH has no view on individual stocks, sectors, economic, or market conditions.
Going forward, INTECH will continue to implement its mathematical investment process in a disciplined and deliberate manner, with risk management remaining the hallmark of the investment process. At the same time, INTECH continues to make marginal improvements to the process, seeking an efficient portfolio that offers better long-term results than its benchmark regardless of the market’s direction.
Thank you for your investment in INTECH U.S. Core Fund.
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INTECH U.S. Core Fund (unaudited) (closed to certain new investors)
INTECH U.S. Core Fund At A Glance
5 Largest Equity Holdings – (% of Net Assets)
As of June 30, 2015
Lockheed Martin Corp. Aerospace & Defense | 2.5% | |||
Anthem, Inc. Health Care Providers & Services | 2.4% | |||
Facebook, Inc. – Class A Internet Software & Services | 2.1% | |||
Southwest Airlines Co. Airlines | 1.8% | |||
Allergan PLC Pharmaceuticals | 1.8% | |||
10.6% |
Asset Allocation – (% of Net Assets)
As of June 30, 2015
Top Country Allocations – Long Positions (% of Investment Securities)
As of June 30, 2015
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(unaudited)
Performance
Average Annual Total Return – for the periods ended June 30, 2015 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||
One | Five | Ten | Since | Total Annual Fund | |||||||
Year | Year | Year | Inception* | Operating Expenses | |||||||
INTECH U.S. Core Fund – Class A Shares(1) | |||||||||||
NAV | 7.03% | 17.96% | 7.75% | 10.28% | 0.97% | ||||||
MOP | 0.86% | 16.58% | 7.11% | 9.75% | |||||||
INTECH U.S. Core Fund – Class C Shares(1) | |||||||||||
NAV | 6.21% | 17.00% | 6.94% | 9.45% | 1.75% | ||||||
CDSC | 5.25% | 17.00% | 6.94% | 9.45% | |||||||
INTECH U.S. Core Fund – Class D Shares(2) | 7.23% | 18.13% | 8.00% | 10.55% | 0.80% | ||||||
INTECH U.S. Core Fund – Class I Shares(1) | 7.35% | 18.28% | 7.96% | 10.51% | 0.68% | ||||||
INTECH U.S. Core Fund – Class N Shares(1) | 7.10% | 18.05% | 7.96% | 10.51% | 0.64% | ||||||
INTECH U.S. Core Fund – Class S Shares(1) | 6.86% | 17.75% | 7.57% | 10.09% | 1.14% | ||||||
INTECH U.S. Core Fund – Class T Shares(1) | 7.10% | 18.05% | 7.96% | 10.51% | 0.89% | ||||||
S&P 500® Index | 7.42% | 17.34% | 7.89% | 9.76% | |||||||
Morningstar Quartile – Class T Shares | 3rd | 2nd | 3rd | 2nd | |||||||
Morningstar Ranking – based on total returns for Large Growth Funds | 1,294/1,743 | 475/1,538 | 750/1,314 | 362/1,216 | |||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
Janus Investment Fund | 3
Table of Contents
INTECH U.S. Core Fund (unaudited) (closed to certain new investors)
The expense ratios for Class N Shares are estimated.
This Fund has a performance-based management fee that may adjust up or down based on the Fund’s performance.
The proprietary mathematical process used by INTECH Investment Management LLC (“INTECH”) may not achieve the desired results. The rebalancing techniques used by the Fund may result in a higher portfolio turnover rate, higher expenses and potentially higher net taxable gains or losses compared to a “buy and hold” or index fund strategy.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
The Fund will normally invest at least 80% of its net assets, measured at the time of purchase, in the type of securities described by its name.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Class A Shares, Class C Shares, and Class S Shares commenced operations on July 6, 2009. Performance shown for each class for periods prior to July 6, 2009, reflects the performance of the Fund’s Class J Shares, the initial share class (renamed Class T Shares effective February 16, 2010), calculated using the fees and expenses of each respective share class, without the effect of any fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
Class I Shares commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers.
Class N Shares commenced operations on October 28, 2014. Performance shown for periods prior to October 28, 2014, reflects the performance of the Fund’s Class T Shares, calculated using the fees and expenses of Class T Shares, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Tracking Error is a divergence between the price behavior of a position or portfolio and the price behavior of a benchmark.
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.
The weighting of securities within the Fund’s portfolio may differ significantly from the weightings within the index. The index is unmanaged and not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
* | The Fund’s inception date – February 28, 2003 | |
(1) | Closed to certain new investors as of the close of business on June 30, 2015. | |
(2) | Closed to certain new investors. |
4 | JUNE 30, 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 | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,007.40 | $ | 4.48 | $ | 1,000.00 | $ | 1,020.33 | $ | 4.51 | 0.90% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,003.50 | $ | 8.30 | $ | 1,000.00 | $ | 1,016.51 | $ | 8.35 | 1.67% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,007.90 | $ | 3.73 | $ | 1,000.00 | $ | 1,021.08 | $ | 3.76 | 0.75% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,008.80 | $ | 3.09 | $ | 1,000.00 | $ | 1,021.72 | $ | 3.11 | 0.62% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 1,008.90 | $ | 2.94 | $ | 1,000.00 | $ | 1,021.87 | $ | 2.96 | 0.59% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,006.40 | $ | 5.37 | $ | 1,000.00 | $ | 1,019.44 | $ | 5.41 | 1.08% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,007.90 | $ | 4.18 | $ | 1,000.00 | $ | 1,020.63 | $ | 4.21 | 0.84% | |||||||||||||||||
† | Hypothetical Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
Janus Investment Fund | 5
Table of Contents
INTECH U.S. Core Fund
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Common Stocks – 99.5% | ||||||||||
Aerospace & Defense – 4.9% | ||||||||||
28,800 | General Dynamics Corp. | $ | 4,080,672 | |||||||
92,900 | Lockheed Martin Corp. | 17,270,110 | ||||||||
19,800 | Northrop Grumman Corp. | 3,140,874 | ||||||||
73,200 | Raytheon Co. | 7,003,776 | ||||||||
19,000 | Rockwell Collins, Inc. | 1,754,650 | ||||||||
22,200 | Textron, Inc. | 990,786 | ||||||||
34,240,868 | ||||||||||
Air Freight & Logistics – 1.1% | ||||||||||
72,300 | CH Robinson Worldwide, Inc. | 4,510,797 | ||||||||
18,200 | FedEx Corp. | 3,101,280 | ||||||||
7,612,077 | ||||||||||
Airlines – 1.9% | ||||||||||
7,100 | American Airlines Group, Inc. | 283,539 | ||||||||
391,700 | Southwest Airlines Co. | 12,961,353 | ||||||||
13,244,892 | ||||||||||
Auto Components – 0.3% | ||||||||||
8,600 | BorgWarner, Inc. | 488,824 | ||||||||
8,800 | Delphi Automotive PLC | 748,792 | ||||||||
24,400 | Goodyear Tire & Rubber Co. | 735,660 | ||||||||
2,100 | Johnson Controls, Inc. | 104,013 | ||||||||
2,077,289 | ||||||||||
Automobiles – 0.1% | ||||||||||
25,600 | Ford Motor Co. | 384,256 | ||||||||
Beverages – 1.7% | ||||||||||
19,800 | Constellation Brands, Inc. – Class A | 2,297,196 | ||||||||
101,200 | Dr Pepper Snapple Group, Inc. | 7,377,480 | ||||||||
13,100 | Monster Beverage Corp.* | 1,755,662 | ||||||||
7,600 | PepsiCo, Inc. | 709,384 | ||||||||
12,139,722 | ||||||||||
Biotechnology – 2.4% | ||||||||||
37,800 | Amgen, Inc. | 5,803,056 | ||||||||
24,800 | Celgene Corp.* | 2,870,228 | ||||||||
6,000 | Gilead Sciences, Inc. | 702,480 | ||||||||
14,200 | Regeneron Pharmaceuticals, Inc.* | 7,243,846 | ||||||||
4,500 | Vertex Pharmaceuticals, Inc.* | 555,660 | ||||||||
17,175,270 | ||||||||||
Building Products – 0.3% | ||||||||||
25,300 | Allegion PLC | 1,521,542 | ||||||||
21,800 | Masco Corp. | 581,406 | ||||||||
2,102,948 | ||||||||||
Capital Markets – 3.3% | ||||||||||
1,600 | Affiliated Managers Group, Inc.* | 349,760 | ||||||||
2,000 | BlackRock, Inc. | 691,960 | ||||||||
73,300 | E*TRADE Financial Corp.* | 2,195,335 | ||||||||
30,300 | Goldman Sachs Group, Inc. | 6,326,337 | ||||||||
209,500 | Morgan Stanley | 8,126,505 | ||||||||
60,400 | Northern Trust Corp. | 4,618,184 | ||||||||
13,800 | State Street Corp. | 1,062,600 | ||||||||
23,370,681 | ||||||||||
Chemicals – 1.1% | ||||||||||
9,900 | Air Products & Chemicals, Inc. | 1,354,617 | ||||||||
8,800 | Ecolab, Inc. | 995,016 | ||||||||
8,000 | International Flavors & Fragrances, Inc. | 874,320 | ||||||||
10,300 | LyondellBasell Industries NV – Class A | 1,066,256 | ||||||||
13,500 | Sherwin-Williams Co. | 3,712,770 | ||||||||
8,002,979 | ||||||||||
Commercial Banks – 0.6% | ||||||||||
25,800 | Huntington Bancshares, Inc. | 291,798 | ||||||||
6,400 | M&T Bank Corp. | 799,552 | ||||||||
59,080 | Wells Fargo & Co. | 3,322,659 | ||||||||
4,414,009 | ||||||||||
Commercial Services & Supplies – 2.3% | ||||||||||
57,600 | ADT Corp.# | 1,933,632 | ||||||||
48,900 | Cintas Corp. | 4,136,451 | ||||||||
120,900 | Republic Services, Inc. | 4,735,653 | ||||||||
5,500 | Stericycle, Inc.* | 736,505 | ||||||||
102,800 | Waste Management, Inc. | 4,764,780 | ||||||||
16,307,021 | ||||||||||
Communications Equipment – 0.4% | ||||||||||
18,200 | F5 Networks, Inc.* | 2,190,370 | ||||||||
11,200 | Juniper Networks, Inc. | 290,864 | ||||||||
2,481,234 | ||||||||||
Construction Materials – 0.6% | ||||||||||
1,000 | Martin Marietta Materials, Inc. | 141,510 | ||||||||
45,500 | Vulcan Materials Co. | 3,818,815 | ||||||||
3,960,325 | ||||||||||
Consumer Finance – 2.0% | ||||||||||
5,300 | Capital One Financial Corp. | 466,241 | ||||||||
170,400 | Discover Financial Services | 9,818,448 | ||||||||
213,100 | Navient Corp. | 3,880,551 | ||||||||
14,165,240 | ||||||||||
Containers & Packaging – 0.8% | ||||||||||
6,200 | Avery Dennison Corp. | 377,828 | ||||||||
18,700 | Ball Corp. | 1,311,805 | ||||||||
79,600 | Sealed Air Corp. | 4,089,848 | ||||||||
5,779,481 | ||||||||||
Distributors – 0.7% | ||||||||||
55,200 | Genuine Parts Co. | 4,942,056 | ||||||||
Diversified Financial Services – 3.1% | ||||||||||
9,100 | Berkshire Hathaway, Inc. – Class B* | 1,238,601 | ||||||||
135,500 | CME Group, Inc. | 12,609,630 | ||||||||
41,400 | McGraw Hill Financial, Inc. | 4,158,630 | ||||||||
9,600 | Moody’s Corp. | 1,036,416 | ||||||||
56,700 | NASDAQ OMX Group, Inc. | 2,767,527 | ||||||||
21,810,804 | ||||||||||
Diversified Telecommunication Services – 1.2% | ||||||||||
224,100 | CenturyLink, Inc. | 6,584,058 | ||||||||
120,500 | Frontier Communications Corp. | 596,475 | ||||||||
23,300 | Level 3 Communications, Inc.* | 1,227,211 | ||||||||
8,407,744 | ||||||||||
Electric Utilities – 1.6% | ||||||||||
4,400 | Edison International | 244,552 | ||||||||
91,600 | Entergy Corp. | 6,457,800 | ||||||||
38,900 | Eversource Energy | 1,766,449 | ||||||||
7,000 | Exelon Corp. | 219,940 | ||||||||
8,700 | FirstEnergy Corp. | 283,185 | ||||||||
42,900 | Pinnacle West Capital Corp. | 2,440,581 | ||||||||
11,412,507 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
6 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Electronic Equipment, Instruments & Components – 0.5% | ||||||||||
53,600 | Amphenol Corp. – Class A | $ | 3,107,192 | |||||||
2,800 | TE Connectivity, Ltd. (U.S. Shares) | 180,040 | ||||||||
3,287,232 | ||||||||||
Energy Equipment & Services – 0% | ||||||||||
4,900 | Baker Hughes, Inc. | 302,330 | ||||||||
Food & Staples Retailing – 3.2% | ||||||||||
17,600 | Costco Wholesale Corp. | 2,377,056 | ||||||||
110,700 | CVS Health Corp. | 11,610,216 | ||||||||
115,100 | Kroger Co. | 8,345,901 | ||||||||
3,800 | Walgreens Boots Alliance, Inc. | 320,872 | ||||||||
22,654,045 | ||||||||||
Food Products – 1.5% | ||||||||||
22,500 | Archer-Daniels-Midland Co. | 1,084,950 | ||||||||
187,900 | ConAgra Foods, Inc. | 8,214,988 | ||||||||
5,700 | Hershey Co. | 506,331 | ||||||||
10,700 | Hormel Foods Corp. | 603,159 | ||||||||
1,600 | JM Smucker Co. | 173,456 | ||||||||
10,582,884 | ||||||||||
Health Care Equipment & Supplies – 2.0% | ||||||||||
90,500 | Boston Scientific Corp.* | 1,601,850 | ||||||||
53,800 | Edwards Lifesciences Corp.* | 7,662,734 | ||||||||
7,100 | Intuitive Surgical, Inc.* | 3,439,950 | ||||||||
16,000 | Stryker Corp. | 1,529,120 | ||||||||
14,233,654 | ||||||||||
Health Care Providers & Services – 8.7% | ||||||||||
12,963 | Aetna, Inc. | 1,652,264 | ||||||||
104,100 | AmerisourceBergen Corp. | 11,069,994 | ||||||||
101,700 | Anthem, Inc. | 16,693,038 | ||||||||
89,700 | Cardinal Health, Inc. | 7,503,405 | ||||||||
19,400 | Cigna Corp. | 3,142,800 | ||||||||
15,300 | DaVita HealthCare Partners, Inc.* | 1,215,891 | ||||||||
10,300 | Humana, Inc. | 1,970,184 | ||||||||
13,900 | Laboratory Corp. of America Holdings* | 1,684,958 | ||||||||
25,500 | McKesson Corp. | 5,732,655 | ||||||||
34,000 | Patterson Cos., Inc. | 1,654,100 | ||||||||
35,900 | Quest Diagnostics, Inc. | 2,603,468 | ||||||||
23,000 | UnitedHealth Group, Inc. | 2,806,000 | ||||||||
24,300 | Universal Health Services, Inc. – Class B | 3,453,030 | ||||||||
61,181,787 | ||||||||||
Health Care Technology – 0.4% | ||||||||||
40,500 | Cerner Corp.* | 2,796,930 | ||||||||
Hotels, Restaurants & Leisure – 3.3% | ||||||||||
35,300 | Carnival Corp. (U.S. Shares) | 1,743,467 | ||||||||
5,800 | Chipotle Mexican Grill, Inc.* | 3,508,942 | ||||||||
25,800 | Darden Restaurants, Inc. | 1,833,864 | ||||||||
115,500 | Marriott International, Inc. – Class A | 8,592,045 | ||||||||
51,000 | Royal Caribbean Cruises, Ltd. (U.S. Shares) | 4,013,190 | ||||||||
41,900 | Wyndham Worldwide Corp. | 3,432,029 | ||||||||
23,123,537 | ||||||||||
Household Durables – 2.3% | ||||||||||
78,500 | DR Horton, Inc. | 2,147,760 | ||||||||
62,100 | Leggett & Platt, Inc. | 3,023,028 | ||||||||
23,300 | Lennar Corp. – Class A | 1,189,232 | ||||||||
7,300 | Mohawk Industries, Inc.* | 1,393,570 | ||||||||
108,300 | Newell Rubbermaid, Inc. | 4,452,213 | ||||||||
48,000 | PulteGroup, Inc. | 967,200 | ||||||||
17,200 | Whirlpool Corp. | 2,976,460 | ||||||||
16,149,463 | ||||||||||
Household Products – 0.1% | ||||||||||
4,300 | Clorox Co. | 447,286 | ||||||||
Industrial Conglomerates – 0% | ||||||||||
1,000 | Roper Industries, Inc. | 172,460 | ||||||||
Information Technology Services – 1.9% | ||||||||||
39,300 | Automatic Data Processing, Inc. | 3,153,039 | ||||||||
9,600 | Cognizant Technology Solutions Corp. – Class A* | 586,464 | ||||||||
45,800 | Fidelity National Information Services, Inc. | 2,830,440 | ||||||||
47,300 | Fiserv, Inc.* | 3,917,859 | ||||||||
32,100 | Paychex, Inc. | 1,504,848 | ||||||||
5,700 | Total System Services, Inc. | 238,089 | ||||||||
51,000 | Western Union Co. | 1,036,830 | ||||||||
40,600 | Xerox Corp. | 431,984 | ||||||||
13,699,553 | ||||||||||
Insurance – 2.3% | ||||||||||
6,600 | ACE, Ltd. (U.S. Shares) | 671,088 | ||||||||
12,400 | Aflac, Inc. | 771,280 | ||||||||
41,800 | Allstate Corp. | 2,711,566 | ||||||||
14,100 | Aon PLC | 1,405,488 | ||||||||
9,500 | Chubb Corp. | 903,830 | ||||||||
4,200 | Cincinnati Financial Corp. | 210,756 | ||||||||
96,400 | Hartford Financial Services Group, Inc. | 4,007,348 | ||||||||
20,900 | Lincoln National Corp. | 1,237,698 | ||||||||
41,000 | Marsh & McLennan Cos., Inc. | 2,324,700 | ||||||||
700 | Principal Financial Group, Inc. | 35,903 | ||||||||
16,700 | Travelers Cos., Inc. | 1,614,222 | ||||||||
13,600 | XL Group PLC | 505,920 | ||||||||
16,399,799 | ||||||||||
Internet Software & Services – 3.3% | ||||||||||
14,600 | Akamai Technologies, Inc.* | 1,019,372 | ||||||||
171,900 | Facebook, Inc. – Class A* | 14,743,004 | ||||||||
14,500 | VeriSign, Inc.*,# | 894,940 | ||||||||
160,300 | Yahoo!, Inc.* | 6,298,187 | ||||||||
22,955,503 | ||||||||||
Leisure Products – 0.1% | ||||||||||
7,700 | Hasbro, Inc. | 575,883 | ||||||||
Life Sciences Tools & Services – 0.1% | ||||||||||
15,700 | PerkinElmer, Inc. | 826,448 | ||||||||
Machinery – 0.7% | ||||||||||
1,600 | Illinois Tool Works, Inc. | 146,864 | ||||||||
37,400 | Pall Corp. | 4,654,430 | ||||||||
4,801,294 | ||||||||||
Media – 0.8% | ||||||||||
11,600 | CBS Corp. – Class B | 643,800 | ||||||||
15,100 | Gannett Co., Inc.* | 211,249 | ||||||||
41,100 | Interpublic Group of Cos., Inc. | 791,997 | ||||||||
6,900 | Omnicom Group, Inc. | 479,481 | ||||||||
30,200 | TEGNA, Inc. | 968,514 | ||||||||
2,500 | Time Warner Cable, Inc. | 445,425 | ||||||||
4,100 | Time Warner, Inc. | 358,381 | ||||||||
18,000 | Walt Disney Co. | 2,054,520 | ||||||||
5,953,367 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
INTECH U.S. Core Fund
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Multi-Utilities – 1.5% | ||||||||||
95,400 | Ameren Corp. | $ | 3,594,672 | |||||||
17,600 | CMS Energy Corp. | 560,384 | ||||||||
28,700 | NiSource, Inc. | 1,308,433 | ||||||||
45,600 | Sempra Energy | 4,511,664 | ||||||||
7,557 | WEC Energy Group, Inc. | 339,838 | ||||||||
10,314,991 | ||||||||||
Multiline Retail – 2.6% | ||||||||||
12,200 | Dollar General Corp. | 948,428 | ||||||||
65,800 | Dollar Tree, Inc.* | 5,197,542 | ||||||||
83,600 | Kohl’s Corp. | 5,234,196 | ||||||||
28,000 | Nordstrom, Inc. | 2,086,000 | ||||||||
58,800 | Target Corp. | 4,799,844 | ||||||||
18,266,010 | ||||||||||
Oil, Gas & Consumable Fuels – 1.3% | ||||||||||
16,900 | Cimarex Energy Co. | 1,864,239 | ||||||||
22,400 | Marathon Petroleum Corp. | 1,171,744 | ||||||||
27,500 | Newfield Exploration Co.* | 993,300 | ||||||||
5,500 | Pioneer Natural Resources Co. | 762,795 | ||||||||
27,800 | Tesoro Corp. | 2,346,598 | ||||||||
33,100 | Valero Energy Corp. | 2,072,060 | ||||||||
1,200 | Williams Cos., Inc. | 68,868 | ||||||||
9,279,604 | ||||||||||
Personal Products – 0% | ||||||||||
3,300 | Estee Lauder Cos., Inc. – Class A | 285,978 | ||||||||
Pharmaceuticals – 4.8% | ||||||||||
42,374 | Allergan PLC* | 12,858,814 | ||||||||
19,200 | Eli Lilly & Co. | 1,603,008 | ||||||||
20,700 | Endo International PLC* | 1,648,755 | ||||||||
11,800 | Hospira, Inc.* | 1,046,778 | ||||||||
57,000 | Mallinckrodt PLC* | 6,710,040 | ||||||||
206,400 | Zoetis, Inc. | 9,952,608 | ||||||||
33,820,003 | ||||||||||
Professional Services – 0.4% | ||||||||||
8,100 | Dun & Bradstreet Corp. | 988,200 | ||||||||
9,900 | Equifax, Inc. | 961,191 | ||||||||
12,600 | Robert Half International, Inc. | 699,300 | ||||||||
2,648,691 | ||||||||||
Real Estate Investment Trusts (REITs) – 3.0% | ||||||||||
39,200 | AvalonBay Communities, Inc. | 6,266,904 | ||||||||
5,200 | Boston Properties, Inc. | 629,408 | ||||||||
3,700 | Crown Castle International Corp. | 297,110 | ||||||||
107,300 | Equity Residential | 7,529,241 | ||||||||
5,400 | Essex Property Trust, Inc. | 1,147,500 | ||||||||
24,500 | General Growth Properties, Inc. | 628,670 | ||||||||
2,800 | Health Care REIT, Inc. | 183,764 | ||||||||
69,600 | Iron Mountain, Inc. | 2,157,600 | ||||||||
19,200 | Macerich Co. | 1,432,320 | ||||||||
5,700 | Plum Creek Timber Co., Inc. | 231,249 | ||||||||
2,200 | SL Green Realty Corp. | 241,758 | ||||||||
2,800 | Vornado Realty Trust | 265,804 | ||||||||
21,011,328 | ||||||||||
Real Estate Management & Development – 0.2% | ||||||||||
32,900 | CBRE Group, Inc. – Class A* | 1,217,300 | ||||||||
Road & Rail – 4.1% | ||||||||||
141,400 | CSX Corp. | 4,616,710 | ||||||||
58,000 | Kansas City Southern | 5,289,600 | ||||||||
106,600 | Norfolk Southern Corp. | 9,312,576 | ||||||||
104,700 | Union Pacific Corp. | 9,985,239 | ||||||||
29,204,125 | ||||||||||
Semiconductor & Semiconductor Equipment – 4.1% | ||||||||||
3,200 | Analog Devices, Inc. | 205,392 | ||||||||
84,500 | Avago Technologies, Ltd. | 11,232,585 | ||||||||
166,500 | Broadcom Corp. – Class A | 8,573,085 | ||||||||
6,300 | First Solar, Inc.* | 295,974 | ||||||||
18,200 | KLA-Tencor Corp. | 1,023,022 | ||||||||
34,800 | Lam Research Corp. | 2,830,980 | ||||||||
19,000 | NVIDIA Corp. | 382,090 | ||||||||
44,000 | Skyworks Solutions, Inc. | 4,580,400 | ||||||||
29,123,528 | ||||||||||
Software – 2.3% | ||||||||||
52,500 | CA, Inc. | 1,537,725 | ||||||||
108,000 | Electronic Arts, Inc.* | 7,182,000 | ||||||||
24,800 | Intuit, Inc. | 2,499,096 | ||||||||
33,000 | Red Hat, Inc.* | 2,505,690 | ||||||||
108,900 | Symantec Corp. | 2,531,925 | ||||||||
16,256,436 | ||||||||||
Specialty Retail – 8.4% | ||||||||||
4,100 | AutoNation, Inc.* | 258,218 | ||||||||
1,300 | AutoZone, Inc.* | 866,970 | ||||||||
20,700 | Bed Bath & Beyond, Inc.* | 1,427,886 | ||||||||
156,100 | Best Buy Co., Inc. | 5,090,421 | ||||||||
54,000 | CarMax, Inc.* | 3,575,340 | ||||||||
113,400 | Home Depot, Inc. | 12,602,142 | ||||||||
126,500 | L Brands, Inc. | 10,844,845 | ||||||||
123,700 | Lowe’s Cos., Inc. | 8,284,189 | ||||||||
19,500 | O’Reilly Automotive, Inc.* | 4,406,610 | ||||||||
118,000 | Ross Stores, Inc. | 5,735,980 | ||||||||
282,800 | Staples, Inc. | 4,329,668 | ||||||||
9,000 | TJX Cos., Inc. | 595,530 | ||||||||
10,800 | Tractor Supply Co. | 971,352 | ||||||||
58,989,151 | ||||||||||
Technology Hardware, Storage & Peripherals – 1.6% | ||||||||||
24,600 | Apple, Inc. | 3,085,455 | ||||||||
4,200 | NetApp, Inc. | 132,552 | ||||||||
56,200 | Seagate Technology PLC | 2,669,500 | ||||||||
71,700 | Western Digital Corp. | 5,622,714 | ||||||||
11,510,221 | ||||||||||
Textiles, Apparel & Luxury Goods – 1.9% | ||||||||||
42,400 | Coach, Inc. | 1,467,464 | ||||||||
15,100 | Hanesbrands, Inc. | 503,132 | ||||||||
6,100 | Ralph Lauren Corp. | 807,396 | ||||||||
23,600 | Under Armour, Inc. – Class A* | 1,969,184 | ||||||||
122,800 | VF Corp. | 8,564,072 | ||||||||
13,311,248 | ||||||||||
Tobacco – 1.7% | ||||||||||
204,700 | Altria Group, Inc. | 10,011,877 | ||||||||
29,828 | Reynolds American, Inc. | 2,226,958 | ||||||||
12,238,835 | ||||||||||
Total Common Stocks (cost $642,629,912) | 701,652,307 | |||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Investment Companies – 0.4% | ||||||||||
Investments Purchased with Cash Collateral from Securities Lending – 0.1% | ||||||||||
606,750 | Janus Cash Collateral Fund LLC, 0.1304%°°,£ | $ | 606,750 | |||||||
Money Markets – 0.3% | ||||||||||
1,953,000 | Janus Cash Liquidity Fund LLC, 0.1291%°°,£ | 1,953,000 | ||||||||
Total Investment Companies (cost $2,559,750) | 2,559,750 | |||||||||
Total Investments (total cost $645,189,662) – 99.9% | 704,212,057 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.1% | 597,111 | |||||||||
Net Assets – 100% | $ | 704,809,168 | ||||||||
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
S&P 500® Index | Measures broad U.S. equity performance. | |
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 June 30, 2015. | |
# | Loaned security; a portion of the security is on loan at June 30, 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 year ended June 30, 2015. Unless otherwise indicated, all information in the table is for the year ended June 30, 2015. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 6/30/15 | Gain/(Loss) | Income | at 6/30/15 | |||||||||||||||
INTECH U.S. Core Fund | |||||||||||||||||||||
Janus Cash Collateral Fund LLC | 27,567,537 | 60,896,719 | (87,857,506) | 606,750 | $ | – | $ | 20,073(1) | $ | 606,750 | |||||||||||
Janus Cash Liquidity Fund LLC | 3,538,525 | 138,476,846 | (140,062,371) | 1,953,000 | – | 4,126 | 1,953,000 | ||||||||||||||
Total | $ | – | $ | 24,199 | $ | 2,559,750 | |||||||||||||||
(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 June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
INTECH U.S. Core Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | $ | 701,652,307 | $ | – | $ | – | |||||
Investment Companies | – | 2,559,750 | – | ||||||||
Total Assets | $ | 701,652,307 | $ | 2,559,750 | $ | – | |||||
10 | JUNE 30, 2015
Table of Contents
Statement of Assets and Liabilities
As of June 30, 2015 | INTECH U.S. Core Fund | |||
Assets: | ||||
Investments, at cost | $ | 645,189,662 | ||
Unaffiliated investments, at value(1) | $ | 701,652,307 | ||
Affiliated investments, at value | 2,559,750 | |||
Cash | 125,604 | |||
Non-interested Trustees’ deferred compensation | 14,094 | |||
Receivables: | ||||
Investments sold | 1,011,912 | |||
Fund shares sold | 527,682 | |||
Dividends | 818,147 | |||
Dividends from affiliates | 81 | |||
Other assets | 1,403 | |||
Total Assets | 706,710,980 | |||
Liabilities: | ||||
Collateral for securities loaned (Note 2) | 606,750 | |||
Payables: | ||||
Fund shares repurchased | 739,498 | |||
Advisory fees | 299,194 | |||
Fund administration fees | 5,684 | |||
Transfer agent fees and expenses | 113,267 | |||
12b-1 Distribution and shareholder servicing fees | 40,907 | |||
Non-interested Trustees’ fees and expenses | 4,653 | |||
Non-interested Trustees’ deferred compensation fees | 14,094 | |||
Accrued expenses and other payables | 77,765 | |||
Total Liabilities | 1,901,812 | |||
Net Assets | $ | 704,809,168 |
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 June 30, 2015 | INTECH U.S. Core Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 561,292,470 | ||
Undistributed net investment income/(loss) | 381,266 | |||
Undistributed net realized gain/(loss) from investments | 84,110,483 | |||
Unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 59,024,949 | |||
Total Net Assets | $ | 704,809,168 | ||
Net Assets - Class A Shares | $ | 27,844,791 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,360,180 | |||
Net Asset Value Per Share(2) | $ | 20.47 | ||
Maximum Offering Price Per Share(3) | $ | 21.72 | ||
Net Assets - Class C Shares | $ | 19,375,856 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 954,994 | |||
Net Asset Value Per Share(2) | $ | 20.29 | ||
Net Assets - Class D Shares | $ | 302,054,002 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 14,734,862 | |||
Net Asset Value Per Share | $ | 20.50 | ||
Net Assets - Class I Shares | $ | 153,922,377 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 7,502,659 | |||
Net Asset Value Per Share | $ | 20.52 | ||
Net Assets - Class N Shares | $ | 53,268 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,598 | |||
Net Asset Value Per Share | $ | 20.50 | ||
Net Assets - Class S Shares | $ | 45,677,559 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,238,023 | |||
Net Asset Value Per Share | $ | 20.41 | ||
Net Assets - Class T Shares | $ | 155,881,315 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 7,608,109 | |||
Net Asset Value Per Share | $ | 20.49 |
(1) | Includes $592,937 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 | JUNE 30, 2015
Table of Contents
Statement of Operations
For the year ended June 30, 2015 | INTECH U.S. Core Fund | |||
Investment Income: | ||||
Affiliated securities lending income, net | $ | 20,073 | ||
Dividends | 13,496,068 | |||
Dividends from affiliates | 4,126 | |||
Other income | 627 | |||
Foreign tax withheld | (4,489) | |||
Total Investment Income | 13,516,405 | |||
Expenses: | ||||
Advisory fees | 3,732,510 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 60,837 | |||
Class C Shares | 175,113 | |||
Class S Shares | 95,391 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 364,258 | |||
Class S Shares | 95,391 | |||
Class T Shares | 394,896 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 14,238 | |||
Class C Shares | 12,628 | |||
Class I Shares | 66,677 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 2,722 | |||
Class C Shares | 2,546 | |||
Class D Shares | 72,400 | |||
Class I Shares | 7,159 | |||
Class N Shares | 4 | |||
Class S Shares | 423 | |||
Class T Shares | 2,418 | |||
Shareholder reports expense | 121,419 | |||
Registration fees | 135,959 | |||
Custodian fees | 9,912 | |||
Professional fees | 56,430 | |||
Non-interested Trustees’ fees and expenses | 16,527 | |||
Fund administration fees | 65,332 | |||
Other expenses | 49,942 | |||
Total Expenses | 5,555,132 | |||
Net Expenses | 5,555,132 | |||
Net Investment Income/(Loss) | 7,961,273 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments | 127,721,620 | |||
Total Net Realized Gain/(Loss) on Investments | 127,721,620 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments and non-interested Trustees’ deferred compensation | (85,507,353) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (85,507,353) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 50,175,540 |
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Statements of Changes in Net Assets
INTECH U.S. | ||||||||
Core Fund | ||||||||
For each year ended June 30 | 2015 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 7,961,273 | $ | 4,984,969 | ||||
Net realized gain/(loss) on investments | 127,721,620 | 63,418,240 | ||||||
Change in unrealized net appreciation/depreciation | (85,507,353) | 63,294,707 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 50,175,540 | 131,697,916 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income | ||||||||
Class A Shares | (268,894) | (106,975) | ||||||
Class C Shares | (113,169) | – | ||||||
Class D Shares | (4,032,376) | (1,738,038) | ||||||
Class I Shares | (2,552,408) | (1,141,080) | ||||||
Class N Shares | (790) | N/A | ||||||
Class S Shares | (447,314) | (144,066) | ||||||
Class T Shares | (1,959,455) | (798,297) | ||||||
Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | (2,063,321) | (709,906) | ||||||
Class C Shares | (1,613,253) | (406,946) | ||||||
Class D Shares | (27,476,602) | (9,598,255) | ||||||
Class I Shares | (16,084,717) | (5,389,027) | ||||||
Class N Shares | (4,713) | N/A | ||||||
Class S Shares | (3,650,313) | (950,584) | ||||||
Class T Shares | (14,157,903) | (4,897,157) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (74,425,228) | (25,880,331) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 12,215,194 | 8,245,172 | ||||||
Class C Shares | 6,808,087 | 4,275,209 | ||||||
Class D Shares | 34,579,972 | 41,263,190 | ||||||
Class I Shares | 38,630,534 | 104,048,932 | ||||||
Class N Shares | 50,000 | N/A | ||||||
Class S Shares | 26,010,870 | 26,799,092 | ||||||
Class T Shares | 42,244,897 | 40,051,072 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 2,280,488 | 798,639 | ||||||
Class C Shares | 1,162,392 | 219,900 | ||||||
Class D Shares | 31,143,810 | 11,208,285 | ||||||
Class I Shares | 18,374,908 | 6,459,372 | ||||||
Class N Shares | 5,503 | N/A | ||||||
Class S Shares | 4,097,032 | 1,094,251 | ||||||
Class T Shares | 15,565,048 | 5,590,656 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (8,378,578) | (6,172,027) | ||||||
Class C Shares | (1,851,969) | (1,651,898) | ||||||
Class D Shares | (39,120,018) | (33,834,242) | ||||||
Class I Shares | (72,692,243) | (33,312,776) | ||||||
Class S Shares | (13,113,758) | (7,489,023) | ||||||
Class T Shares | (43,977,076) | (31,327,767) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | 54,035,093 | 136,266,037 | ||||||
Net Increase/(Decrease) in Net Assets | 29,785,405 | 242,083,622 | ||||||
Net Assets: | ||||||||
Beginning of period | 675,023,763 | 432,940,141 | ||||||
End of period | $ | 704,809,168 | $ | 675,023,763 | ||||
Undistributed Net Investment Income/(Loss) | $ | 381,266 | $ | 2,444,388 |
See Notes to Financial Statements.
14 | JUNE 30, 2015
Table of Contents
Financial Highlights
Class A Shares
INTECH U.S. Core Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $21.27 | $17.66 | $14.72 | $14.31 | $10.72 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.21(1) | 0.14(1) | 0.18 | 0.15 | 0.10 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 1.27 | 4.34 | 2.96 | 0.39 | 3.58 | |||||||||||||||||
Total from Investment Operations | 1.48 | 4.48 | 3.14 | 0.54 | 3.68 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.26) | (0.11) | (0.20) | (0.13) | (0.09) | |||||||||||||||||
Distributions (from capital gains) | (2.02) | (0.76) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (2.28) | (0.87) | (0.20) | (0.13) | (0.09) | |||||||||||||||||
Net Asset Value, End of Period | $20.47 | $21.27 | $17.66 | $14.72 | $14.31 | |||||||||||||||||
Total Return | 7.03% | 25.84% | 21.48% | 3.83% | 34.44% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $27,845 | $22,550 | $16,242 | $13,486 | $14,544 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $24,335 | $18,644 | $13,430 | $13,834 | $13,331 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.89% | 0.97% | 0.98% | 0.99% | 0.98% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.89% | 0.97% | 0.98% | 0.99% | 0.98% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.97% | 0.70% | 1.05% | 1.03% | 0.82% | |||||||||||||||||
Portfolio Turnover Rate | 130% | 59% | 67% | 73% | 93% |
Class C Shares
INTECH U.S. Core Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $21.14 | $17.59 | $14.68 | $14.26 | $10.71 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.05(1) | (0.01)(1) | 0.04 | 0.03 | –(2) | |||||||||||||||||
Net realized and unrealized gain/(loss) | 1.26 | 4.32 | 2.96 | 0.39 | 3.56 | |||||||||||||||||
Total from Investment Operations | 1.31 | 4.31 | 3.00 | 0.42 | 3.56 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.14) | – | (0.09) | – | (0.01) | |||||||||||||||||
Distributions (from capital gains) | (2.02) | (0.76) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (2.16) | (0.76) | (0.09) | – | (0.01) | |||||||||||||||||
Net Asset Value, End of Period | $20.29 | $21.14 | $17.59 | $14.68 | $14.26 | |||||||||||||||||
Total Return | 6.21% | 24.87% | 20.51% | 2.95% | 33.26% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $19,376 | $14,013 | $9,154 | $6,450 | $6,755 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $17,511 | $11,106 | $7,536 | $6,402 | $6,690 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.66% | 1.75% | 1.77% | 1.83% | 1.80% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.66% | 1.75% | 1.77% | 1.83% | 1.80% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.22% | (0.07)% | 0.25% | 0.20% | (0.01)% | |||||||||||||||||
Portfolio Turnover Rate | 130% | 59% | 67% | 73% | 93% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. | |
(2) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Financial Highlights (continued)
Class D Shares
INTECH U.S. Core Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $21.29 | $17.67 | $14.74 | $14.32 | $10.74 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.24(1) | 0.17(1) | 0.19 | 0.17 | 0.13 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 1.29 | 4.35 | 2.97 | 0.39 | 3.59 | |||||||||||||||||
Total from Investment Operations | 1.53 | 4.52 | 3.16 | 0.56 | 3.72 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.30) | (0.14) | (0.23) | (0.14) | (0.14) | |||||||||||||||||
Distributions (from capital gains) | (2.02) | (0.76) | – | – | – | |||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(2) | –(2) | |||||||||||||||||
Total Dividends and Distributions | (2.32) | (0.90) | (0.23) | (0.14) | (0.14) | |||||||||||||||||
Net Asset Value, End of Period | $20.50 | $21.29 | $17.67 | $14.74 | $14.32 | |||||||||||||||||
Total Return | 7.23% | 26.02% | 21.62% | 3.96% | 34.74% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $302,054 | $286,019 | $220,548 | $174,853 | $173,097 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $303,548 | $255,973 | $192,611 | $168,338 | $156,479 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.74% | 0.80% | 0.85% | 0.84% | 0.82% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.74% | 0.80% | 0.85% | 0.84% | 0.82% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.14% | 0.87% | 1.17% | 1.20% | 0.96% | |||||||||||||||||
Portfolio Turnover Rate | 130% | 59% | 67% | 73% | 93% |
Class I Shares
INTECH U.S. Core Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $21.31 | $17.68 | $14.75 | $14.33 | $10.75 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.27(1) | 0.20(1) | 0.19 | 0.20 | 0.16 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 1.28 | 4.35 | 2.99 | 0.37 | 3.57 | |||||||||||||||||
Total from Investment Operations | 1.55 | 4.55 | 3.18 | 0.57 | 3.73 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.32) | (0.16) | (0.25) | (0.15) | (0.15) | |||||||||||||||||
Distributions (from capital gains) | (2.02) | (0.76) | – | – | – | |||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(2) | –(2) | |||||||||||||||||
Total Dividends and Distributions | (2.34) | (0.92) | (0.25) | (0.15) | (0.15) | |||||||||||||||||
Net Asset Value, End of Period | $20.52 | $21.31 | $17.68 | $14.75 | $14.33 | |||||||||||||||||
Total Return | 7.35% | 26.22% | 21.75% | 4.06% | 34.84% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $153,922 | $174,615 | $71,592 | $50,196 | $55,567 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $178,491 | $147,897 | $56,472 | $52,297 | $53,512 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.61% | 0.68% | 0.75% | 0.72% | 0.72% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.61% | 0.68% | 0.75% | 0.72% | 0.72% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.26% | 1.00% | 1.27% | 1.31% | 1.07% | |||||||||||||||||
Portfolio Turnover Rate | 130% | 59% | 67% | 73% | 93% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. | |
(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.
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Class N Shares
INTECH U.S. Core Fund | ||||||
For a share outstanding during the period ended June 30 | 2015(1) | |||||
Net Asset Value, Beginning of Period | $21.73 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.20 | |||||
Net realized and unrealized gain/(loss) | 0.93 | |||||
Total from Investment Operations | 1.13 | |||||
Less Dividends and Distributions: | ||||||
Dividends (from net investment income) | (0.34) | |||||
Distributions (from capital gains) | (2.02) | |||||
Total Dividends and Distributions | (2.36) | |||||
Net Asset Value, End of Period | $20.50 | |||||
Total Return* | 5.26% | |||||
Net Assets, End of Period (in thousands) | $53 | |||||
Average Net Assets for the Period (in thousands) | $53 | |||||
Ratios to Average Net Assets: | ||||||
Ratio of Gross Expenses** | 0.59% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.59% | |||||
Ratio of Net Investment Income/(Loss)** | 1.45% | |||||
Portfolio Turnover Rate | 130% |
Class S Shares
INTECH U.S. Core Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $21.23 | $17.66 | $14.73 | $14.29 | $10.73 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.17(2) | 0.11(2) | 0.16 | 0.12 | 0.08 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 1.28 | 4.34 | 2.94 | 0.40 | 3.57 | |||||||||||||||||
Total from Investment Operations | 1.45 | 4.45 | 3.10 | 0.52 | 3.65 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.25) | (0.12) | (0.17) | (0.09) | (0.09) | |||||||||||||||||
Distributions (from capital gains) | (2.02) | (0.76) | – | – | – | |||||||||||||||||
Redemption fees | N/A | N/A | N/A | 0.01 | –(3) | |||||||||||||||||
Total Dividends and Distributions | (2.27) | (0.88) | (0.17) | (0.08) | (0.09) | |||||||||||||||||
Net Asset Value, End of Period | $20.41 | $21.23 | $17.66 | $14.73 | $14.29 | |||||||||||||||||
Total Return | 6.86% | 25.61% | 21.20% | 3.75% | 34.11% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $45,678 | $30,533 | $5,996 | $4,645 | $4,836 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $38,156 | $24,601 | $4,857 | $4,525 | $4,423 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.07% | 1.14% | 1.17% | 1.16% | 1.18% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.07% | 1.14% | 1.17% | 1.16% | 1.18% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.81% | 0.54% | 0.86% | 0.88% | 0.61% | |||||||||||||||||
Portfolio Turnover Rate | 130% | 59% | 67% | 73% | 93% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from October 28, 2014 (inception date) through June 30, 2015. | |
(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
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Financial Highlights (continued)
Class T Shares
INTECH U.S. Core Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $21.29 | $17.67 | $14.74 | $14.31 | $10.74 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.22(1) | 0.16(1) | 0.18 | 0.15 | 0.12 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 1.28 | 4.34 | 2.97 | 0.40 | 3.58 | |||||||||||||||||
Total from Investment Operations | 1.50 | 4.50 | 3.15 | 0.55 | 3.70 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.28) | (0.12) | (0.22) | (0.12) | (0.13) | |||||||||||||||||
Distributions (from capital gains) | (2.02) | (0.76) | – | – | – | |||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(2) | –(2) | |||||||||||||||||
Total Dividends and Distributions | (2.30) | (0.88) | (0.22) | (0.12) | (0.13) | |||||||||||||||||
Net Asset Value, End of Period | $20.49 | $21.29 | $17.67 | $14.74 | $14.31 | |||||||||||||||||
Total Return | 7.10% | 25.94% | 21.58% | 3.93% | 34.53% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $155,881 | $147,294 | $109,408 | $83,640 | $74,483 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $157,958 | $129,992 | $92,764 | $75,220 | $66,619 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.82% | 0.89% | 0.92% | 0.91% | 0.92% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.82% | 0.89% | 0.92% | 0.91% | 0.92% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.05% | 0.79% | 1.11% | 1.14% | 0.87% | |||||||||||||||||
Portfolio Turnover Rate | 130% | 59% | 67% | 73% | 93% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. | |
(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 | JUNE 30, 2015
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Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
INTECH U.S. Core Fund (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in common stocks. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
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 evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued
Janus Investment Fund | 19
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Notes to Financial Statements (continued)
at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of June 30, 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 year. 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.
20 | JUNE 30, 2015
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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.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
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.
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
Janus Investment Fund | 21
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Notes to Financial Statements (continued)
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 | $ | 592,937 | $ | – | $ | (592,937) | $ | – | ||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. Securities on loan will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral as permitted by the SEC. The value of the collateral must be at least 102% of the market value of the loaned securities that are denominated in U.S. dollars and 105% of the market value of the loaned securities that are not denominated in U.S. dollars. Upon receipt of cash collateral, Janus Capital intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. Loaned securities and related collateral are marked-to-market each business day based upon the market value of the loaned securities at the close of business, employing the most recent available pricing information. Collateral levels are then adjusted based on this mark-to-market evaluation.
Real Estate Investing
To the extent that real estate-related securities may be included in the Fund’s named benchmark index, INTECH’s mathematical investment process may select equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Securities Lending
Under procedures adopted by the Trustees, the Fund may seek to earn additional income by lending securities to qualified parties. Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. The Fund may lend portfolio securities in an amount equal to up to 1/3 of its total assets as determined at the time of the loan origination. There is the risk of delay in recovering a loaned security or the risk of loss in collateral rights if the borrower fails financially. In addition, Janus Capital makes efforts to balance the benefits and risks from granting such loans. All loans will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral as permitted by the SEC. If the Fund is unable to recover a security on loan, the Fund may use the collateral to purchase replacement securities in the market. There is a risk that the value of the collateral could decrease below the cost of the replacement security by the time the replacement investment is made, resulting in a loss to the Fund.
Upon receipt of cash collateral, Janus Capital may invest it in affiliated or non-affiliated cash management vehicles, whether registered or unregistered entities, as permitted by the 1940 Act and rules promulgated thereunder. Janus Capital currently intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. An investment in Janus Cash Collateral Fund LLC is generally subject to the same risks that shareholders experience when investing in similarly structured vehicles, such as the potential for significant fluctuations in assets as a result of the purchase and redemption activity of the securities lending program, a decline in the value of the collateral, and possible liquidity issues. Such risks may delay the return of the cash collateral and cause the Fund to violate its agreement to return the cash collateral to a borrower in a timely manner. As adviser to the Fund and Janus Cash Collateral Fund LLC, Janus Capital has an inherent conflict of interest as a result of its fiduciary duties to both the Fund and Janus Cash Collateral Fund LLC. Additionally, Janus Capital receives an investment advisory fee of 0.05% for managing Janus Cash Collateral Fund LLC, but it may not receive a fee for managing certain other affiliated cash management
Janus Investment Fund | 23
Table of Contents
Notes to Financial Statements (continued)
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 | ||||||
Fund | Fee Rate (%) | |||||
INTECH U.S. Core Fund | 0.50 | |||||
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 | |||||
INTECH U.S. Core Fund | S&P 500® Index | |||||
The calculation of the performance adjustment applies as follows:
Investment Advisory Fee = Base Fee Rate +/- Performance Adjustment
The investment advisory fee rate paid to Janus Capital by the Fund consists of two components: (1) a base fee calculated by applying the contractual fixed rate of the advisory fee to the Fund’s average daily net assets during the previous month (“Base Fee Rate”), plus or minus (2) a performance-fee adjustment (“Performance Adjustment”) calculated by applying a variable rate of up to 0.15% (positive or negative) to the Fund’s average daily net assets during the applicable performance measurement period.
The Fund’s prospectuses and statement of additional information contain additional information about performance-based fees. The amount shown as advisory fees on the Statement of Operations reflects the Base Fee Rate plus/minus any Performance Adjustment, if applicable. The performance adjusted investment advisory fee rate before any waivers and/or reimbursements of expenses for the year ended June 30, 2015 is below:
Performance Adjusted | ||||||
Investment Advisory | ||||||
Fund | Fee Rate (%) | |||||
INTECH U.S. Core Fund | 0.52 | |||||
INTECH Investment Management LLC (“INTECH”) serves as subadviser to the Fund. As subadviser, INTECH provides day-to-day management of the investment operations of the Fund subject to the general oversight of Janus Capital. Janus Capital owns approximately 97% of INTECH.
Janus Capital pays INTECH a subadvisory fee rate equal to 50% of the investment advisory fee paid by the Fund to Janus Capital (calculated after any applicable performance fee adjustment). The subadvisory fee paid by Janus Capital to INTECH adjusts up or down based on the Fund’s performance relative to its benchmark index over the performance measurement period.
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any performance adjustments to management fees, the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Previous | ||||||||||
New Expense | Expense | |||||||||
Limit (%) | Limit (%) | |||||||||
(November 1, | (until November | |||||||||
Fund | 2014 to present) | 1, 2014) | ||||||||
INTECH U.S. Core Fund | 0.80 | 0.75 | ||||||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
24 | JUNE 30, 2015
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Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed 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).
Janus Investment Fund | 25
Table of Contents
Notes to Financial Statements (continued)
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 $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the year ended June 30, 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 June 30, 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 and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the year ended June 30, 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 $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 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 product compliant with Rule 2a-7 under the 1940 Act. There are no restrictions on the Fund’s ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Fund to Janus Cash Liquidity Fund LLC. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the year ended June 30, 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 year ended June 30, 2015, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
INTECH U.S. Core Fund | $ | 11,105 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the year ended June 30, 2015, redeeming shareholders of Class A Shares paid the following CDSCs to Janus Distributors:
Fund (Class A Shares) | CDSC | |||||
INTECH U.S. Core Fund | $ | 596 | ||||
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the
26 | JUNE 30, 2015
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redemption of the Class C Shares redeemed. During the year ended June 30, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
INTECH U.S. Core Fund | $ | 904 | ||||
As of June 30, 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 | ||||||||
INTECH U.S. Core Fund - Class A Shares | - | % | - | % | ||||||
INTECH U.S. Core Fund - Class C Shares | - | - | ||||||||
INTECH U.S. Core Fund - Class D Shares | - | - | ||||||||
INTECH U.S. Core Fund - Class I Shares | - | - | ||||||||
INTECH U.S. Core Fund - Class N Shares | 100 | 0 | ||||||||
INTECH U.S. Core Fund - Class S Shares | - | - | ||||||||
INTECH U.S. Core Fund - Class T Shares | - | - | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
4. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation, derivatives, tax equalization, and foreign currency contract adjustments. 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 Fund has elected to defer post-October losses and qualified late-year losses as noted in the table below. These losses will be deferred for tax purposes and recognized during the next fiscal year.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
INTECH U.S. Core Fund | $ | 395,363 | $ | 95,067,931 | $ | (3,397,272) | $ | – | $ | (7,494,012) | $ | (11,543) | $ | 58,956,231 | |||||||||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of June 30, 2015, that may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. Under the Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. Losses incurred during those years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may more likely expire unused. Also, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law. The following table shows these capital loss carryovers.
Capital Loss Carryover Expiration Schedule
For the year ended June 30, 2015
No Expiration | Accumulated | ||||||||||||||||||
Fund | June 30, 2016 | Short-Term | Long-Term | Capital Losses | |||||||||||||||
INTECH U.S. Core Fund(1) | $ | (3,397,272) | $ | – | $ | – | $ | (3,397,272) | |||||||||||
Janus Investment Fund | 27
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Notes to Financial Statements (continued)
During the year ended June 30, 2015, the following capital loss carryovers were utilized by the Fund as indicated in the table:
Capital Loss | ||||||||||
Fund | Carryover Utilized | |||||||||
INTECH U.S. Core Fund | $ | 3,397,272 | ||||||||
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 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.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
INTECH U.S. Core Fund | $ | 645,255,826 | $ | 81,715,041 | $ | (22,758,810) | ||||||||
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. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the year ended June 30, 2015
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
INTECH U.S. Core Fund | $ | 16,384,498 | $ | 58,040,730 | $ | – | $ | – | ||||||||||||||
For the year ended June 30, 2014
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
INTECH U.S. Core Fund | $ | 6,180,895 | $ | 19,699,436 | $ | – | $ | – | ||||||||||||||
Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
INTECH U.S. Core Fund | $ | 8,358,507 | $ | (649,989) | $ | (7,708,518) | ||||||||
Capital has been adjusted by $8,358,507, including $7,709,905 of long-term capital gain, for distributions in connection with Fund share redemptions (tax equalization).
28 | JUNE 30, 2015
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5. | Capital Share Transactions |
INTECH U.S. Core Fund | ||||||||||
For each year ended June 30 | 2015(1) | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 580,534 | 422,423 | ||||||||
Reinvested dividends and distributions | 111,734 | 40,935 | ||||||||
Shares repurchased | (392,337) | (322,668) | ||||||||
Net Increase/(Decrease) in Fund Shares | 299,931 | 140,689 | ||||||||
Shares Outstanding, Beginning of Period | 1,060,249 | 919,560 | ||||||||
Shares Outstanding, End of Period | 1,360,180 | 1,060,249 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 323,442 | 215,544 | ||||||||
Reinvested dividends and distributions | 57,232 | 11,294 | ||||||||
Shares repurchased | (88,552) | (84,210) | ||||||||
Net Increase/(Decrease) in Fund Shares | 292,122 | 142,628 | ||||||||
Shares Outstanding, Beginning of Period | 662,872 | 520,244 | ||||||||
Shares Outstanding, End of Period | 954,994 | 662,872 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 1,630,988 | 2,109,015 | ||||||||
Reinvested dividends and distributions | 1,525,162 | 574,195 | ||||||||
Shares repurchased | (1,853,204) | (1,730,977) | ||||||||
Net Increase/(Decrease) in Fund Shares | 1,302,946 | 952,233 | ||||||||
Shares Outstanding, Beginning of Period | 13,431,916 | 12,479,683 | ||||||||
Shares Outstanding, End of Period | 14,734,862 | 13,431,916 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 1,830,094 | 5,509,570 | ||||||||
Reinvested dividends and distributions | 899,849 | 330,910 | ||||||||
Shares repurchased | (3,422,580) | (1,693,959) | ||||||||
Net Increase/(Decrease) in Fund Shares | (692,637) | 4,146,521 | ||||||||
Shares Outstanding, Beginning of Period | 8,195,296 | 4,048,775 | ||||||||
Shares Outstanding, End of Period | 7,502,659 | 8,195,296 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 2,328 | N/A | ||||||||
Reinvested dividends and distributions | 270 | N/A | ||||||||
Shares repurchased | – | N/A | ||||||||
Net Increase/(Decrease) in Fund Shares | 2,598 | N/A | ||||||||
Shares Outstanding, Beginning of Period | – | N/A | ||||||||
Shares Outstanding, End of Period | 2,598 | N/A | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 1,225,346 | 1,425,569 | ||||||||
Reinvested dividends and distributions | 201,131 | 56,144 | ||||||||
Shares repurchased | (626,473) | (383,161) | ||||||||
Net Increase/(Decrease) in Fund Shares | 800,004 | 1,098,552 | ||||||||
Shares Outstanding, Beginning of Period | 1,438,019 | 339,467 | ||||||||
Shares Outstanding, End of Period | 2,238,023 | 1,438,019 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 2,012,807 | 2,040,524 | ||||||||
Reinvested dividends and distributions | 762,245 | 286,407 | ||||||||
Shares repurchased | (2,086,554) | (1,599,484) | ||||||||
Net Increase/(Decrease) in Fund Shares | 688,498 | 727,447 | ||||||||
Shares Outstanding, Beginning of Period | 6,919,611 | 6,192,164 | ||||||||
Shares Outstanding, End of Period | 7,608,109 | 6,919,611 |
(1) | Period from October 28, 2014 (inception date) through June 30, 2015 for Class N Shares. |
Janus Investment Fund | 29
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Notes to Financial Statements (continued)
6. | Purchases and Sales of Investment Securities |
For the year ended June 30, 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 | |||||||||||
INTECH U.S. Core Fund | $ | 924,638,404 | $ | 935,196,122 | $ | – | $ | – | |||||||
7. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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.
30 | JUNE 30, 2015
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of INTECH U.S. Core Fund:
of INTECH U.S. Core Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of INTECH U.S. Core Fund (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
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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 June 30, 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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Designation Requirements (unaudited)
For federal income tax purposes, the Fund designated the following for the year ended June 30, 2015:
Capital Gain Distributions
Fund | ||||||||||
INTECH U.S. Core Fund | $ | 65,750,635 | ||||||||
Dividends Received Deduction Percentage
Fund | ||||||||||
INTECH U.S. Core Fund | 100 | % | ||||||||
Qualified Dividend Income Percentage
Fund | ||||||||||
INTECH U.S. Core Fund | 100 | % | ||||||||
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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
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OFFICERS
Term of Office*and | Principal Occupations | |||||
Name, Address, and Age | Positions Held with the Trust | Length of Time Served | During the Past Five Years | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
Janus Investment Fund | 51
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Trustees and Officers (unaudited) (continued)
OFFICERS (continued)
Term of Office*and | Principal Occupations | |||||
Name, Address, and Age | Positions Held with the Trust | Length of Time Served | During the Past Five Years | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
52 | JUNE 30, 2015
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Notes
Janus Investment Fund | 53
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-0815-93831 | 125-02-93015 08-15 |
Table of Contents
annual report
June 30, 2015
INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund)
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
Table of Contents
INTECH U.S. Managed Volatility Fund
1 | ||
12 | ||
13 | ||
15 | ||
16 | ||
18 | ||
22 | ||
34 | ||
35 | ||
46 | ||
49 | ||
50 |
Table of Contents
INTECH U.S. Managed Volatility Fund (unaudited)
FUND SNAPSHOT INTECH’s active approach focuses on adding value by selecting stocks with unique volatility characteristics and low correlations to one another. | Managed by INTECH Investment Management LLC |
PERFORMANCE OVERVIEW
For the 12-month period ended June 30, 2015, INTECH U.S. Managed Volatility Fund returned 4.35% for its Class I Shares. This compares to the 7.37% return posted by the Russell 1000 Index, the Fund’s benchmark.
INVESTMENT STRATEGY
INTECH’s mathematical investment process is designed to determine potentially more efficient equity weightings of the securities in the benchmark index, utilizing a specific mathematical optimization and disciplined rebalancing routine. Rather than trying to predict the future direction of stock prices, the process seeks to use the volatility and correlation characteristics of stocks to construct portfolios.
Effective December 17, 2014, both the name and principal investment strategy of the INTECH Value Fund changed to reflect a “managed volatility” approach. We believe this change to the Fund’s investment strategy will provide shareholders with a smoother way to participate in equity market growth by managing downside exposure, potentially allowing for returns to compound and improve risk-adjusted returns over time.
In connection with the transition to a managed volatility strategy, the benchmark for the Fund changed to the Russell 1000 Index from the Russell 1000 Value Index. The transition to the Russell 1000 Index is expected to provide shareholders with broader exposure to large-cap U.S. equities than the previous value-focused index.
The investment process begins with the stocks in the Russell 1000 Index. INTECH’s investment process aims to capture stocks’ natural volatility through a rebalancing mechanism based on estimates of relative volatility and correlation in order to outperform the benchmark index over the long term. Within specific risk constraints, the investment process will tend to favor stocks with higher relative volatility and lower correlation as they offer more potential to capture volatility through periodic rebalancing. Once the target proportions are determined and the portfolio is constructed, it is then rebalanced to those target proportions and re-optimized on a periodic basis. The previous INTECH Value Fund strategy focused on seeking an excess return above the benchmark while minimizing tracking error, a strategy designed to manage the relative risk of the portfolio. The new INTECH U.S. Managed Volatility Fund focuses on seeking an excess return above the benchmark, while also reducing or managing the Fund’s standard deviation depending on the market conditions, a strategy designed to manage the absolute risk of the portfolio.
PERFORMANCE REVIEW
The U.S. equity market as measured by the Russell 1000 Index posted a positive return of 7.37% for the 12-month period ending June 30, 2015. INTECH U.S. Managed Volatility Fund underperformed the Russell 1000 Index over the period and generated a return of 4.35%.
The strategy’s active sector positioning tends to vary over time and is a function of the volatility and correlation characteristics of the underlying stocks. As compared to the Russell 1000 Index, which became the Fund’s benchmark after the transition on December 17, 2014, the Fund’s overall active sector positioning detracted from relative performance during the period. Effectively, an average overweight allocation to the utilities sector, which was one of the weakest performing sectors during the period, as well as the Fund’s active positioning within the energy sector, were the main detractors during the period. An overall negative selection effect, which is a residual of the investment process, also detracted from the Fund’s relative performance, especially among the financials and energy sectors, over the period.
OUTLOOK
Because INTECH does not conduct traditional economic or fundamental analysis, INTECH has no view on individual stocks, sectors, economic, or market conditions.
We believe that the change to the Fund’s investment objective should provide a smoother path to participate in equity-market growth. Managing downside exposure potentially allows for returns to compound and improve risk-adjusted returns over time. Over the long term, we believe that by reducing risk when market volatility increases and behaving like a core equity fund when market volatility is low, the Fund will achieve its investment objective of producing an excess return over the benchmark with lower absolute risk. Going forward, we will continue building portfolios in a disciplined and deliberate manner, with risk management remaining the hallmark of our investment process. As INTECH’s ongoing research
Janus Investment Fund | 1
Table of Contents
INTECH U.S. Managed Volatility Fund (unaudited)
efforts yield modest improvements, we will continue implementing changes that we believe are likely to improve the long-term results for our fund shareholders.
Thank you for your investment in INTECH U.S. Managed Volatility Fund.
2 | JUNE 30, 2015
Table of Contents
(unaudited)
INTECH U.S. Managed Volatility Fund At A Glance
5 Largest Equity Holdings – (% of Net Assets)
As of June 30, 2015
General Mills, Inc. Food Products | 2.9% | |||
Altria Group, Inc. Tobacco | 2.4% | |||
Reynolds American, Inc. Tobacco | 2.3% | |||
Southwest Airlines Co. Airlines | 1.9% | |||
Apple, Inc. Technology Hardware, Storage & Peripherals | 1.6% | |||
11.1% |
Asset Allocation – (% of Net Assets)
As of June 30, 2015
Top Country Allocations – Long Positions (% of Investment Securities)
As of June 30, 2015
Janus Investment Fund | 3
Table of Contents
INTECH U.S. Managed Volatility Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended June 30, 2015 | Expense Ratios – per the October 28, 2014 and December 22, 2014 (D Shares) prospectuses | ||||||||
One | Five | Since | Total Annual Fund | ||||||
Year | Year | Inception* | Operating Expenses | ||||||
INTECH U.S. Managed Volatility Fund – A Shares | |||||||||
NAV | 4.04% | 16.57% | 6.76% | 1.04% | |||||
MOP | –1.93% | 15.19% | 6.10% | ||||||
INTECH U.S. Managed Volatility Fund – C Shares | |||||||||
NAV | 3.26% | 15.74% | 5.98% | 1.75% | |||||
CDSC | 2.58% | 15.74% | 5.98% | ||||||
INTECH U.S. Managed Volatility Fund – D Shares(1) | 4.14% | 16.75% | 6.85% | 0.83% | |||||
INTECH U.S. Managed Volatility Fund – I Shares | 4.35% | 16.91% | 7.04% | 0.67% | |||||
INTECH U.S. Managed Volatility Fund – N Shares | 4.35% | 16.91% | 7.04% | 0.67% | |||||
INTECH U.S. Managed Volatility Fund – S Shares | 3.99% | 16.51% | 6.61% | 1.24% | |||||
INTECH U.S. Managed Volatility Fund – T Shares | 4.19% | 16.70% | 6.69% | 0.91% | |||||
Russell 1000® Index | 7.37% | 17.58% | 7.90% | ||||||
Russell 1000® Value Index | 4.13% | 16.50% | 6.86% | ||||||
Morningstar Quartile – Class I Shares | 2nd | 1st | 2nd | ||||||
Morningstar Ranking – based on total returns for Large Value Funds | 549/1,429 | 159/1,225 | 369/1,095 | ||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
4 | JUNE 30, 2015
Table of Contents
(unaudited)
The expense ratios for Class D and Class N Shares are estimated.
INTECH’s focus on managed volatility may keep the Fund from achieving excess returns over its index. The strategy may underperform during certain periods of up markets, and may not achieve the desired level of protection in down markets.
A Fund’s performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
The Fund will normally invest at least 80% of its net assets, measured at the time of purchase, in the type of securities described by its name.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Class A Shares, Class C Shares, Class I Shares, and Class S Shares commenced operations on July 6, 2009, after the reorganization of each class of the predecessor fund into corresponding shares of the Fund. Performance shown for each class for periods prior to July 6, 2009, reflects the historical performance of each corresponding class of the predecessor fund prior to the reorganization, calculated using the fees and expenses of the corresponding class of the predecessor fund respectively, net of any applicable fee and expense limitations or waivers.
Class T Shares commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the historical performance of the predecessor fund’s Class I Shares, calculated using the fees and expenses of Class T Shares, without the effect of any fee and expense limitations or waivers.
Class N Shares commenced operations on October 28, 2014. Performance shown for periods prior to October 28, 2014, reflects the historical performance of the Fund’s Class I Shares, calculated using the fees and expenses of Class I Shares, net of any applicable fee and expense limitations or waivers.
Class D Shares commenced operations on December 22, 2014. Performance shown for periods prior to December 22, 2014, reflects the historical performance of the Fund’s Class I Shares, calculated using the fees and expenses of Class D Shares, without the effect of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Tracking Error is a divergence between the price behavior of a position or portfolio and the price behavior of a benchmark. Standard deviation measures historical volatility. Higher standard deviation implies greater volatility.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 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.
The weighting of securities within the Fund’s portfolio may differ significantly from the weightings within the index. The index is unmanaged and not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
Effective December 17, 2014, INTECH U.S. Value Fund changed its name to INTECH U.S. Managed Volatility Fund and changed its benchmark from the Russell 1000® Value Index to the Russell 1000® Index. The transition to the Russell 1000® Index is intended to reflect broader exposure to large cap U.S. equities than the value-focused index.
* | The predecessor Fund’s inception date – December 30, 2005 | |
(1) | Closed to certain new investors. |
Janus Investment Fund | 5
Table of Contents
INTECH U.S. Managed Volatility Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,021.90 | $ | 5.11 | $ | 1,000.00 | $ | 1,019.74 | $ | 5.11 | 1.02% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,019.20 | $ | 8.61 | $ | 1,000.00 | $ | 1,016.27 | $ | 8.60 | 1.72% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,023.20 | $ | 5.57 | $ | 1,000.00 | $ | 1,019.29 | $ | 5.56 | 1.11% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,024.10 | $ | 3.66 | $ | 1,000.00 | $ | 1,021.17 | $ | 3.66 | 0.73% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 1,024.20 | $ | 3.61 | $ | 1,000.00 | $ | 1,021.22 | $ | 3.61 | 0.72% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,022.10 | $ | 5.92 | $ | 1,000.00 | $ | 1,018.94 | $ | 5.91 | 1.18% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,023.30 | $ | 4.72 | $ | 1,000.00 | $ | 1,020.13 | $ | 4.71 | 0.94% | |||||||||||||||||
† | Hypothetical Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 181/365 (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 | JUNE 30, 2015
Table of Contents
INTECH U.S. Managed Volatility Fund
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Common Stocks – 98.9% | ||||||||||
Aerospace & Defense – 2.1% | ||||||||||
800 | General Dynamics Corp. | $ | 113,352 | |||||||
3,100 | Hexcel Corp. | 154,194 | ||||||||
11,000 | Lockheed Martin Corp. | 2,044,900 | ||||||||
1,700 | Northrop Grumman Corp. | 269,671 | ||||||||
12,000 | Orbital ATK, Inc. | 880,320 | ||||||||
5,000 | Raytheon Co. | 478,400 | ||||||||
1,700 | Rockwell Collins, Inc. | 156,995 | ||||||||
1,900 | Spirit AeroSystems Holdings, Inc. – Class A* | 104,709 | ||||||||
8,700 | TransDigm Group, Inc.* | 1,954,629 | ||||||||
6,157,170 | ||||||||||
Air Freight & Logistics – 0.6% | ||||||||||
17,100 | CH Robinson Worldwide, Inc. | 1,066,869 | ||||||||
3,100 | FedEx Corp. | 528,240 | ||||||||
1,595,109 | ||||||||||
Airlines – 2.0% | ||||||||||
4,000 | Delta Air Lines, Inc. | 164,320 | ||||||||
162,200 | Southwest Airlines Co. | 5,367,198 | ||||||||
1,300 | United Continental Holdings, Inc.* | 68,913 | ||||||||
5,600,431 | ||||||||||
Auto Components – 0% | ||||||||||
500 | Lear Corp. | 56,130 | ||||||||
Automobiles – 0% | ||||||||||
1,500 | Thor Industries, Inc. | 84,420 | ||||||||
Beverages – 1.5% | ||||||||||
11,600 | Constellation Brands, Inc. – Class A | 1,345,832 | ||||||||
23,400 | Dr Pepper Snapple Group, Inc. | 1,705,860 | ||||||||
4,700 | Monster Beverage Corp.* | 629,894 | ||||||||
7,400 | PepsiCo, Inc. | 690,716 | ||||||||
4,372,302 | ||||||||||
Biotechnology – 3.4% | ||||||||||
2,000 | Alkermes PLC* | 128,680 | ||||||||
7,100 | Alnylam Pharmaceuticals, Inc.* | 851,077 | ||||||||
3,800 | Amgen, Inc. | 583,376 | ||||||||
10,500 | BioMarin Pharmaceutical, Inc.* | 1,436,190 | ||||||||
5,400 | Celgene Corp.* | 624,969 | ||||||||
10,400 | Gilead Sciences, Inc. | 1,217,632 | ||||||||
9,000 | Incyte Corp.* | 937,890 | ||||||||
700 | Intercept Pharmaceuticals, Inc.* | 168,966 | ||||||||
19,300 | Medivation, Inc.* | 2,204,060 | ||||||||
2,600 | Regeneron Pharmaceuticals, Inc.* | 1,326,338 | ||||||||
1,700 | United Therapeutics Corp.* | 295,715 | ||||||||
9,774,893 | ||||||||||
Building Products – 0.2% | ||||||||||
1,500 | Allegion PLC | 90,210 | ||||||||
1,900 | AO Smith Corp | 136,762 | ||||||||
2,200 | Lennox International, Inc. | 236,918 | ||||||||
3,000 | Owens Corning | 123,750 | ||||||||
587,640 | ||||||||||
Capital Markets – 0.1% | ||||||||||
1,300 | Bank of New York Mellon Corp. | 54,561 | ||||||||
1,800 | E*TRADE Financial Corp.* | 53,910 | ||||||||
200 | Goldman Sachs Group, Inc. | 41,758 | ||||||||
3,000 | SEI Investments Co. | 147,090 | ||||||||
297,319 | ||||||||||
Chemicals – 0.5% | ||||||||||
500 | LyondellBasell Industries NV – Class A | 51,760 | ||||||||
1,600 | Platform Specialty Products Corp.* | 40,928 | ||||||||
1,700 | Scotts Miracle-Gro Co. – Class A | 100,657 | ||||||||
3,700 | Sherwin-Williams Co. | 1,017,574 | ||||||||
1,200 | Sigma-Aldrich Corp. | 167,220 | ||||||||
1,378,139 | ||||||||||
Commercial Banks – 0.2% | ||||||||||
4,500 | BankUnited, Inc. | 161,685 | ||||||||
3,200 | First Horizon National Corp. | 50,144 | ||||||||
21,800 | First Niagara Financial Group, Inc. | 205,792 | ||||||||
3,300 | First Republic Bank | 207,999 | ||||||||
625,620 | ||||||||||
Commercial Services & Supplies – 1.2% | ||||||||||
300 | Cintas Corp. | 25,377 | ||||||||
41,100 | Covanta Holding Corp. | 870,909 | ||||||||
1,500 | KAR Auction Services, Inc. | 56,100 | ||||||||
33,900 | Republic Services, Inc. | 1,327,863 | ||||||||
5,300 | RR Donnelley & Sons Co. | 92,379 | ||||||||
2,800 | Stericycle, Inc.* | 374,948 | ||||||||
14,600 | Waste Management, Inc. | 676,710 | ||||||||
3,424,286 | ||||||||||
Communications Equipment – 0.8% | ||||||||||
1,300 | F5 Networks, Inc.* | 156,455 | ||||||||
1,700 | Juniper Networks, Inc. | 44,149 | ||||||||
12,300 | Palo Alto Networks, Inc.* | 2,148,810 | ||||||||
2,349,414 | ||||||||||
Construction Materials – 0.3% | ||||||||||
9,300 | Vulcan Materials Co. | 780,549 | ||||||||
Consumer Finance – 0.4% | ||||||||||
37,600 | Navient Corp. | 684,696 | ||||||||
43,000 | SLM Corp.* | 424,410 | ||||||||
1,109,106 | ||||||||||
Containers & Packaging – 0.3% | ||||||||||
1,000 | Avery Dennison Corp. | 60,940 | ||||||||
1,100 | Ball Corp. | 77,165 | ||||||||
5,500 | Bemis Co., Inc. | 247,555 | ||||||||
5,300 | Sealed Air Corp. | 272,314 | ||||||||
4,700 | Silgan Holdings, Inc. | 247,972 | ||||||||
905,946 | ||||||||||
Distributors – 0.1% | ||||||||||
3,600 | Genuine Parts Co. | 322,308 | ||||||||
Diversified Consumer Services – 0.2% | ||||||||||
400 | Graham Holdings Co. – Class B | 430,020 | ||||||||
8,900 | Service Corp. International | 261,927 | ||||||||
691,947 | ||||||||||
Diversified Financial Services – 1.5% | ||||||||||
4,300 | Berkshire Hathaway, Inc. – Class B* | 585,273 | ||||||||
21,300 | CBOE Holdings, Inc. | 1,218,786 | ||||||||
16,800 | CME Group, Inc. | 1,563,408 | ||||||||
1,700 | Intercontinental Exchange, Inc. | 380,137 | ||||||||
100 | Moody’s Corp. | 10,796 | ||||||||
3,500 | MSCI, Inc. | 215,425 | ||||||||
7,700 | NASDAQ OMX Group, Inc. | 375,837 | ||||||||
4,349,662 | ||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
INTECH U.S. Managed Volatility Fund
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Diversified Telecommunication Services – 0.1% | ||||||||||
9,762 | CenturyLink, Inc. | $ | 286,808 | |||||||
1,500 | Level 3 Communications, Inc.* | 79,005 | ||||||||
365,813 | ||||||||||
Electric Utilities – 6.1% | ||||||||||
10,800 | American Electric Power Co., Inc. | 572,076 | ||||||||
19,300 | Duke Energy Corp. | 1,362,966 | ||||||||
28,200 | Edison International | 1,567,356 | ||||||||
38,900 | Entergy Corp. | 2,742,450 | ||||||||
22,100 | Eversource Energy | 1,003,561 | ||||||||
53,900 | Exelon Corp. | 1,693,538 | ||||||||
27,500 | FirstEnergy Corp. | 895,125 | ||||||||
43,400 | Hawaiian Electric Industries, Inc. | 1,290,282 | ||||||||
43,200 | ITC Holdings Corp. | 1,390,176 | ||||||||
58,300 | Pepco Holdings, Inc. | 1,570,602 | ||||||||
16,900 | Pinnacle West Capital Corp. | 961,441 | ||||||||
2,700 | PPL Corp. | 79,569 | ||||||||
38,200 | Southern Co. | 1,600,580 | ||||||||
2,700 | Westar Energy, Inc. | 92,394 | ||||||||
24,300 | Xcel Energy, Inc. | 781,974 | ||||||||
17,604,090 | ||||||||||
Electrical Equipment – 0% | ||||||||||
400 | Acuity Brands, Inc. | 71,992 | ||||||||
Electronic Equipment, Instruments & Components – 0.2% | ||||||||||
2,000 | Amphenol Corp. – Class A | 115,940 | ||||||||
8,800 | CDW Corp. | 301,664 | ||||||||
1,100 | IPG Photonics Corp.* | 93,693 | ||||||||
700 | Zebra Technologies Corp. – Class A* | 77,735 | ||||||||
589,032 | ||||||||||
Energy Equipment & Services – 0.1% | ||||||||||
2,000 | Baker Hughes, Inc. | 123,400 | ||||||||
1,800 | Dresser-Rand Group, Inc.* | 153,324 | ||||||||
276,724 | ||||||||||
Food & Staples Retailing – 2.6% | ||||||||||
8,500 | Costco Wholesale Corp. | 1,148,010 | ||||||||
19,100 | CVS Health Corp. | 2,003,208 | ||||||||
43,200 | Kroger Co. | 3,132,432 | ||||||||
16,900 | Rite Aid Corp.* | 141,115 | ||||||||
7,100 | Sprouts Farmers Market, Inc.* | 191,558 | ||||||||
2,300 | Wal-Mart Stores, Inc. | 163,139 | ||||||||
2,700 | Walgreens Boots Alliance, Inc. | 227,988 | ||||||||
12,100 | Whole Foods Market, Inc. | 477,224 | ||||||||
7,484,674 | ||||||||||
Food Products – 4.0% | ||||||||||
800 | Bunge, Ltd. | 70,240 | ||||||||
53,500 | ConAgra Foods, Inc. | 2,339,020 | ||||||||
4,600 | Flowers Foods, Inc. | 97,290 | ||||||||
147,700 | General Mills, Inc. | 8,229,195 | ||||||||
2,100 | Hershey Co. | 186,543 | ||||||||
6,100 | Kellogg Co. | 382,470 | ||||||||
1,100 | Tyson Foods, Inc. – Class A | 46,893 | ||||||||
4,500 | WhiteWave Foods Co.* | 219,960 | ||||||||
11,571,611 | ||||||||||
Gas Utilities – 0.3% | ||||||||||
25,650 | UGI Corp. | 883,643 | ||||||||
Health Care Equipment & Supplies – 1.6% | ||||||||||
4,400 | Alere, Inc.* | 232,100 | ||||||||
636 | Becton Dickinson and Co. | 90,089 | ||||||||
7,600 | Boston Scientific Corp.* | 134,520 | ||||||||
500 | CR Bard, Inc. | 85,350 | ||||||||
1,700 | DENTSPLY International, Inc. | 87,635 | ||||||||
19,100 | Edwards Lifesciences Corp.* | 2,720,413 | ||||||||
2,700 | Hill-Rom Holdings, Inc. | 146,691 | ||||||||
2,600 | Hologic, Inc.* | 98,956 | ||||||||
800 | IDEXX Laboratories, Inc.* | 51,312 | ||||||||
4,600 | ResMed, Inc. | 259,302 | ||||||||
4,500 | Sirona Dental Systems, Inc.* | 451,890 | ||||||||
1,900 | Teleflex, Inc. | 257,355 | ||||||||
700 | Varian Medical Systems, Inc.* | 59,031 | ||||||||
4,674,644 | ||||||||||
Health Care Providers & Services – 10.5% | ||||||||||
10,890 | Aetna, Inc. | 1,388,039 | ||||||||
40,300 | AmerisourceBergen Corp. | 4,285,502 | ||||||||
25,200 | Anthem, Inc. | 4,136,328 | ||||||||
14,800 | Cardinal Health, Inc. | 1,238,020 | ||||||||
26,400 | Centene Corp.* | 2,122,560 | ||||||||
15,200 | Cigna Corp. | 2,462,400 | ||||||||
4,700 | Community Health Systems, Inc.* | 295,959 | ||||||||
1,600 | DaVita HealthCare Partners, Inc.* | 127,152 | ||||||||
1,800 | Express Scripts Holding Co.* | 160,092 | ||||||||
27,900 | HCA Holdings, Inc.* | 2,531,088 | ||||||||
28,000 | Health Net, Inc.* | 1,795,360 | ||||||||
11,900 | Humana, Inc. | 2,276,232 | ||||||||
500 | Laboratory Corp. of America Holdings* | 60,610 | ||||||||
2,400 | McKesson Corp. | 539,544 | ||||||||
2,900 | MEDNAX, Inc.* | 214,919 | ||||||||
26,600 | Omnicare, Inc. | 2,507,050 | ||||||||
10,900 | Patterson Cos., Inc. | 530,285 | ||||||||
20,700 | UnitedHealth Group, Inc. | 2,525,400 | ||||||||
600 | Universal Health Services, Inc. – Class B | 85,260 | ||||||||
16,400 | VCA, Inc.* | 892,242 | ||||||||
30,174,042 | ||||||||||
Health Care Technology – 0.1% | ||||||||||
5,700 | Cerner Corp.* | 393,642 | ||||||||
Hotels, Restaurants & Leisure – 2.6% | ||||||||||
14,700 | Brinker International, Inc. | 847,455 | ||||||||
700 | Chipotle Mexican Grill, Inc.* | 423,493 | ||||||||
14,200 | Darden Restaurants, Inc. | 1,009,336 | ||||||||
7,400 | Domino’s Pizza, Inc. | 839,160 | ||||||||
7,600 | Dunkin’ Brands Group, Inc. | 418,000 | ||||||||
22,000 | Marriott International, Inc. – Class A | 1,636,580 | ||||||||
4,700 | Norwegian Cruise Line Holdings, Ltd.* | 263,388 | ||||||||
5,300 | Panera Bread Co. – Class A* | 926,281 | ||||||||
9,100 | Six Flags Entertainment Corp. | 408,135 | ||||||||
2,900 | Starbucks Corp. | 155,483 | ||||||||
43,600 | Wendy’s Co. | 491,808 | ||||||||
7,419,119 | ||||||||||
Household Durables – 1.0% | ||||||||||
24,900 | Leggett & Platt, Inc. | 1,212,132 | ||||||||
14,900 | Newell Rubbermaid, Inc. | 612,539 | ||||||||
100 | NVR, Inc.* | 134,000 | ||||||||
4,800 | Whirlpool Corp. | 830,640 | ||||||||
2,789,311 | ||||||||||
Household Products – 1.7% | ||||||||||
11,300 | Church & Dwight Co., Inc. | 916,769 | ||||||||
5,100 | Clorox Co. | 530,502 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Household Products – (continued) | ||||||||||
30,000 | Kimberly-Clark Corp. | $ | 3,179,100 | |||||||
5,000 | Procter & Gamble Co. | 391,200 | ||||||||
5,017,571 | ||||||||||
Information Technology Services – 1.2% | ||||||||||
6,500 | Amdocs, Ltd. (U.S. Shares) | 354,835 | ||||||||
5,600 | Automatic Data Processing, Inc. | 449,288 | ||||||||
7,300 | Broadridge Financial Solutions, Inc. | 365,073 | ||||||||
2,300 | DST Systems, Inc. | 289,754 | ||||||||
5,100 | Fiserv, Inc.* | 422,433 | ||||||||
400 | FleetCor Technologies, Inc.* | 62,424 | ||||||||
13,700 | Genpact, Ltd.* | 292,221 | ||||||||
700 | Global Payments, Inc. | 72,415 | ||||||||
700 | International Business Machines Corp. | 113,862 | ||||||||
800 | Jack Henry & Associates, Inc. | 51,760 | ||||||||
5,800 | Leidos Holdings, Inc. | 234,146 | ||||||||
10,100 | Paychex, Inc. | 473,488 | ||||||||
1,500 | Total System Services, Inc. | 62,655 | ||||||||
5,100 | Vantiv, Inc. – Class A* | 194,769 | ||||||||
2,200 | Western Union Co. | 44,726 | ||||||||
3,483,849 | ||||||||||
Insurance – 4.3% | ||||||||||
500 | ACE, Ltd. (U.S. Shares) | 50,840 | ||||||||
23,400 | Allied World Assurance Co. Holdings AG | 1,011,348 | ||||||||
9,900 | Allstate Corp. | 642,213 | ||||||||
1,000 | American Financial Group, Inc. | 65,040 | ||||||||
5,100 | Arch Capital Group, Ltd.* | 341,496 | ||||||||
1,600 | Aspen Insurance Holdings, Ltd. | 76,640 | ||||||||
9,500 | Axis Capital Holdings, Ltd. | 507,015 | ||||||||
3,700 | Chubb Corp. | 352,018 | ||||||||
10,000 | Endurance Specialty Holdings, Ltd. | 657,000 | ||||||||
10,100 | Everest Re Group, Ltd. | 1,838,301 | ||||||||
26,600 | FNF Group | 983,934 | ||||||||
1,000 | Hartford Financial Services Group, Inc. | 41,570 | ||||||||
3,400 | HCC Insurance Holdings, Inc. | 261,256 | ||||||||
1,400 | Markel Corp.* | 1,120,952 | ||||||||
9,500 | PartnerRe, Ltd. | 1,220,750 | ||||||||
4,300 | ProAssurance Corp. | 198,703 | ||||||||
4,800 | RenaissanceRe Holdings, Ltd. | 487,248 | ||||||||
800 | Torchmark Corp. | 46,576 | ||||||||
5,200 | Travelers Cos., Inc. | 502,632 | ||||||||
14,100 | Validus Holdings, Ltd. | 620,259 | ||||||||
400 | White Mountains Insurance Group, Ltd. | 261,976 | ||||||||
17,000 | WR Berkley Corp. | 882,810 | ||||||||
1,900 | XL Group PLC | 70,680 | ||||||||
12,241,257 | ||||||||||
Internet & Catalog Retail – 0% | ||||||||||
1,600 | Liberty Ventures – Series A* | 62,832 | ||||||||
100 | Netflix, Inc.* | 65,694 | ||||||||
128,526 | ||||||||||
Internet Software & Services – 2.5% | ||||||||||
1,200 | Akamai Technologies, Inc.* | 83,784 | ||||||||
300 | CoStar Group, Inc.* | 60,378 | ||||||||
200 | Equinix, Inc. | 50,800 | ||||||||
48,100 | Facebook, Inc. – Class A* | 4,125,296 | ||||||||
4,000 | LinkedIn Corp. – Class A* | 826,520 | ||||||||
39,300 | Rackspace Hosting, Inc.* | 1,461,567 | ||||||||
1,300 | VeriSign, Inc.* | 80,236 | ||||||||
9,600 | Yahoo!, Inc.* | 377,184 | ||||||||
7,065,765 | ||||||||||
Leisure Products – 0.2% | ||||||||||
2,700 | Hasbro, Inc. | 201,933 | ||||||||
10,200 | Vista Outdoor, Inc.* | 457,980 | ||||||||
659,913 | ||||||||||
Life Sciences Tools & Services – 0.3% | ||||||||||
1,000 | Bio-Rad Laboratories, Inc. – Class A* | 150,610 | ||||||||
900 | Bio-Techne Corp. | 88,623 | ||||||||
4,900 | Charles River Laboratories International, Inc.* | 344,666 | ||||||||
2,300 | PerkinElmer, Inc. | 121,072 | ||||||||
2,600 | Quintiles Transnational Holdings, Inc.* | 188,786 | ||||||||
893,757 | ||||||||||
Machinery – 0.2% | ||||||||||
1,200 | AGCO Corp. | 68,136 | ||||||||
1,500 | Deere & Co. | 145,575 | ||||||||
2,300 | WABCO Holdings, Inc.* | 284,556 | ||||||||
498,267 | ||||||||||
Media – 0.6% | ||||||||||
900 | AMC Networks, Inc. – Class A* | 73,665 | ||||||||
700 | Charter Communications, Inc. – Class A* | 119,875 | ||||||||
2,200 | Cinemark Holdings, Inc. | 88,374 | ||||||||
1,200 | DIRECTV* | 111,348 | ||||||||
7,700 | Madison Square Garden Co. – Class A* | 642,873 | ||||||||
19,400 | Sirius XM Holdings, Inc.* | 72,362 | ||||||||
11,600 | Starz – Class A* | 518,752 | ||||||||
4,100 | Thomson Reuters Corp. | 156,087 | ||||||||
600 | Walt Disney Co. | 68,484 | ||||||||
1,851,820 | ||||||||||
Metals & Mining – 0.2% | ||||||||||
7,100 | Alcoa, Inc. | 79,165 | ||||||||
15,400 | Newmont Mining Corp. | 359,744 | ||||||||
438,909 | ||||||||||
Multi-Utilities – 3.1% | ||||||||||
12,400 | Ameren Corp. | 467,232 | ||||||||
35,600 | CMS Energy Corp. | 1,133,504 | ||||||||
18,300 | Consolidated Edison, Inc. | 1,059,204 | ||||||||
10,200 | DTE Energy Co. | 761,328 | ||||||||
29,900 | PG&E Corp. | 1,468,090 | ||||||||
5,700 | Public Service Enterprise Group, Inc. | 223,896 | ||||||||
6,200 | SCANA Corp. | 314,030 | ||||||||
12,200 | Sempra Energy | 1,207,068 | ||||||||
49,700 | TECO Energy, Inc. | 877,702 | ||||||||
28,176 | WEC Energy Group, Inc. | 1,267,058 | ||||||||
8,779,112 | ||||||||||
Multiline Retail – 1.5% | ||||||||||
1,400 | Dillard’s, Inc. – Class A | 147,266 | ||||||||
3,300 | Dollar General Corp. | 256,542 | ||||||||
16,700 | Dollar Tree, Inc.* | 1,319,133 | ||||||||
2,900 | Family Dollar Stores, Inc. | 228,549 | ||||||||
8,300 | Kohl’s Corp. | 519,663 | ||||||||
8,100 | Nordstrom, Inc. | 603,450 | ||||||||
14,600 | Target Corp. | 1,191,798 | ||||||||
4,266,401 | ||||||||||
Oil, Gas & Consumable Fuels – 0.5% | ||||||||||
3,600 | Cabot Oil & Gas Corp. | 113,544 | ||||||||
400 | Cimarex Energy Co. | 44,124 | ||||||||
500 | Concho Resources, Inc.* | 56,930 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
INTECH U.S. Managed Volatility Fund
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Oil, Gas & Consumable Fuels – (continued) | ||||||||||
11,900 | Tesoro Corp. | $ | 1,004,479 | |||||||
2,000 | World Fuel Services Corp. | 95,900 | ||||||||
1,314,977 | ||||||||||
Personal Products – 0.1% | ||||||||||
1,000 | Estee Lauder Cos., Inc. – Class A | 86,660 | ||||||||
3,300 | Nu Skin Enterprises, Inc. – Class A# | 155,529 | ||||||||
242,189 | ||||||||||
Pharmaceuticals – 3.4% | ||||||||||
665 | AbbVie, Inc. | 44,681 | ||||||||
11,522 | Allergan PLC* | 3,496,466 | ||||||||
3,400 | Eli Lilly & Co. | 283,866 | ||||||||
2,800 | Endo International PLC* | 223,020 | ||||||||
1,000 | Hospira, Inc.* | 88,710 | ||||||||
29,343 | Mallinckrodt PLC* | 3,454,258 | ||||||||
6,800 | Pfizer, Inc. | 228,004 | ||||||||
38,000 | Zoetis, Inc. | 1,832,360 | ||||||||
9,651,365 | ||||||||||
Professional Services – 0.1% | ||||||||||
2,300 | Equifax, Inc. | 223,307 | ||||||||
800 | Towers Watson & Co. – Class A | 100,640 | ||||||||
1,000 | Verisk Analytics, Inc. – Class A* | 72,760 | ||||||||
396,707 | ||||||||||
Real Estate Investment Trusts (REITs) – 14.0% | ||||||||||
14,700 | Alexandria Real Estate Equities, Inc. | 1,285,662 | ||||||||
6,600 | American Campus Communities, Inc. | 248,754 | ||||||||
32,700 | American Capital Agency Corp. | 600,699 | ||||||||
182,000 | Annaly Capital Management, Inc. | 1,672,580 | ||||||||
52,000 | Apartment Investment & Management Co. – Class A | 1,920,360 | ||||||||
14,300 | AvalonBay Communities, Inc. | 2,286,141 | ||||||||
6,700 | Boston Properties, Inc. | 810,968 | ||||||||
8,500 | Camden Property Trust | 631,380 | ||||||||
4,200 | Chimera Investment Corp. | 57,582 | ||||||||
9,500 | Columbia Property Trust, Inc. | 233,225 | ||||||||
15,500 | Corrections Corp. of America | 512,740 | ||||||||
4,100 | Crown Castle International Corp. | 329,230 | ||||||||
48,300 | Digital Realty Trust, Inc. | 3,220,644 | ||||||||
7,900 | Duke Realty Corp. | 146,703 | ||||||||
31,500 | Equity Lifestyle Properties, Inc. | 1,656,270 | ||||||||
32,500 | Equity Residential | 2,280,525 | ||||||||
8,200 | Essex Property Trust, Inc. | 1,742,500 | ||||||||
15,600 | Extra Space Storage, Inc. | 1,017,432 | ||||||||
9,600 | Federal Realty Investment Trust | 1,229,664 | ||||||||
4,700 | Gaming and Leisure Properties, Inc. | 172,302 | ||||||||
22,700 | General Growth Properties, Inc. | 582,482 | ||||||||
16,300 | HCP, Inc. | 594,461 | ||||||||
36,900 | Health Care REIT, Inc. | 2,421,747 | ||||||||
18,500 | Healthcare Trust of America, Inc. – Class A | 443,075 | ||||||||
1,600 | Home Properties, Inc. | 116,880 | ||||||||
6,600 | Iron Mountain, Inc. | 204,600 | ||||||||
11,400 | Kilroy Realty Corp. | 765,510 | ||||||||
6,500 | Kimco Realty Corp. | 146,510 | ||||||||
2,300 | Lamar Advertising Co. – Class A | 132,204 | ||||||||
10,600 | Macerich Co. | 790,760 | ||||||||
59,800 | MFA Financial, Inc. | 441,922 | ||||||||
16,600 | National Retail Properties, Inc. | 581,166 | ||||||||
29,600 | Omega Healthcare Investors, Inc. | 1,016,168 | ||||||||
3,700 | Outfront Media, Inc. | 93,388 | ||||||||
2,400 | Plum Creek Timber Co., Inc. | 97,368 | ||||||||
21,700 | Post Properties, Inc. | 1,179,829 | ||||||||
1,800 | Public Storage | 331,866 | ||||||||
20,900 | Realty Income Corp.# | 927,751 | ||||||||
12,400 | Regency Centers Corp. | 731,352 | ||||||||
81,700 | Retail Properties of America, Inc. – Class A | 1,138,081 | ||||||||
3,400 | Simon Property Group, Inc. | 588,268 | ||||||||
3,600 | SL Green Realty Corp. | 395,604 | ||||||||
3,600 | Spirit Realty Capital, Inc. | 34,812 | ||||||||
15,300 | Starwood Property Trust, Inc. | 330,021 | ||||||||
8,900 | Taubman Centers, Inc. | 618,550 | ||||||||
87,300 | Two Harbors Investment Corp. | 850,302 | ||||||||
32,700 | UDR, Inc. | 1,047,381 | ||||||||
16,000 | Ventas, Inc. | 993,440 | ||||||||
2,200 | Vornado Realty Trust | 208,846 | ||||||||
1,000 | Weingarten Realty Investors | 32,690 | ||||||||
5,500 | WP Carey, Inc. | 324,170 | ||||||||
40,216,565 | ||||||||||
Real Estate Management & Development – 0.2% | ||||||||||
3,700 | Jones Lang LaSalle, Inc. | 632,700 | ||||||||
Road & Rail – 0.5% | ||||||||||
19,900 | Old Dominion Freight Line, Inc.* | 1,365,240 | ||||||||
800 | Union Pacific Corp. | 76,296 | ||||||||
1,441,536 | ||||||||||
Semiconductor & Semiconductor Equipment – 1.0% | ||||||||||
2,900 | Avago Technologies, Ltd. | 385,497 | ||||||||
4,100 | Broadcom Corp. – Class A | 211,109 | ||||||||
1,000 | Freescale Semiconductor, Ltd.* | 39,970 | ||||||||
20,900 | Skyworks Solutions, Inc. | 2,175,690 | ||||||||
2,812,266 | ||||||||||
Software – 1.4% | ||||||||||
2,100 | CDK Global, Inc. | 113,358 | ||||||||
7,500 | Electronic Arts, Inc.* | 498,750 | ||||||||
8,100 | FactSet Research Systems, Inc. | 1,316,331 | ||||||||
3,900 | Fortinet, Inc.* | 161,187 | ||||||||
4,400 | Informatica Corp.* | 213,268 | ||||||||
400 | Intuit, Inc. | 40,308 | ||||||||
9,900 | Microsoft Corp. | 437,085 | ||||||||
35,100 | Symantec Corp. | 816,075 | ||||||||
4,000 | Tableau Software, Inc. – Class A* | 461,200 | ||||||||
4,057,562 | ||||||||||
Specialty Retail – 8.3% | ||||||||||
600 | Advance Auto Parts, Inc. | 95,574 | ||||||||
2,500 | AutoZone, Inc.* | 1,667,250 | ||||||||
3,900 | Bed Bath & Beyond, Inc.* | 269,022 | ||||||||
31,600 | Best Buy Co., Inc. | 1,030,476 | ||||||||
4,800 | Cabela’s, Inc.* | 239,904 | ||||||||
31,400 | CST Brands, Inc. | 1,226,484 | ||||||||
28,700 | DSW, Inc. – Class A | 957,719 | ||||||||
15,900 | Foot Locker, Inc. | 1,065,459 | ||||||||
10,700 | Home Depot, Inc. | 1,189,091 | ||||||||
36,600 | L Brands, Inc. | 3,137,718 | ||||||||
30,100 | Lowe’s Cos., Inc. | 2,015,797 | ||||||||
24,100 | Murphy USA, Inc.* | 1,345,262 | ||||||||
10,600 | O’Reilly Automotive, Inc.* | 2,395,388 | ||||||||
31,000 | Ross Stores, Inc. | 1,506,910 | ||||||||
37,300 | Sally Beauty Holdings, Inc.* | 1,177,934 | ||||||||
97,900 | Staples, Inc. | 1,498,849 | ||||||||
5,900 | TJX Cos., Inc. | 390,403 | ||||||||
13,400 | Ulta Salon Cosmetics & Fragrance, Inc.* | 2,069,630 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Specialty Retail – (continued) | ||||||||||
4,800 | Urban Outfitters, Inc.* | $ | 168,000 | |||||||
3,900 | Williams-Sonoma, Inc. | 320,853 | ||||||||
23,767,723 | ||||||||||
Technology Hardware, Storage & Peripherals – 1.6% | ||||||||||
37,300 | Apple, Inc. | 4,678,352 | ||||||||
400 | NetApp, Inc. | 12,624 | ||||||||
4,690,976 | ||||||||||
Textiles, Apparel & Luxury Goods – 1.2% | ||||||||||
1,500 | Carter’s, Inc. | 159,450 | ||||||||
10,300 | Coach, Inc. | 356,483 | ||||||||
60,500 | Hanesbrands, Inc. | 2,015,860 | ||||||||
400 | NIKE, Inc. – Class B | 43,208 | ||||||||
2,100 | Under Armour, Inc. – Class A* | 175,224 | ||||||||
10,100 | VF Corp. | 704,374 | ||||||||
3,454,599 | ||||||||||
Thrifts & Mortgage Finance – 0.1% | ||||||||||
9,800 | New York Community Bancorp, Inc. | 180,124 | ||||||||
Tobacco – 4.7% | ||||||||||
140,500 | Altria Group, Inc. | 6,871,855 | ||||||||
87,906 | Reynolds American, Inc. | 6,563,062 | ||||||||
13,434,917 | ||||||||||
Water Utilities – 0.5% | ||||||||||
31,400 | American Water Works Co., Inc. | 1,526,982 | ||||||||
Wireless Telecommunication Services – 0.9% | ||||||||||
20,800 | SBA Communications Corp. – Class A* | 2,391,376 | ||||||||
�� | 2,400 | T-Mobile US, Inc.* | 93,048 | |||||||
2,484,424 | ||||||||||
Total Common Stocks (cost $260,644,359) | 284,391,487 | |||||||||
Investment Companies – 0.9% | ||||||||||
Investments Purchased with Cash Collateral from Securities Lending – 0.3% | ||||||||||
830,812 | Janus Cash Collateral Fund LLC, 0.1304%°°,£ | 830,812 | ||||||||
Money Markets – 0.6% | ||||||||||
1,683,797 | Janus Cash Liquidity Fund LLC, 0.1291%°°,£ | 1,683,797 | ||||||||
Total Investment Companies (cost $2,514,609) | 2,514,609 | |||||||||
Total Investments (total cost $263,158,968) – 99.8% | 286,906,096 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.2% | 679,192 | |||||||||
Net Assets – 100% | $ | 287,585,288 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Notes to Schedule of Investments and Other Information
Russell 1000® Value Index | Measures the performance of those Russell 1000® Index companies with lower price-to-book ratios and lower forecasted growth values. | |
Russell 1000® Index | Measures the performance of the 1,000 largest companies in the Russell 3000® Index. | |
LEAPS | Long-Term Equity Anticipation Securities | |
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 June 30, 2015. | |
# | Loaned security; a portion of the security is on loan at June 30, 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 year ended June 30, 2015. Unless otherwise indicated, all information in the table is for the year ended June 30, 2015. |
Share | Share | |||||||||||||||||
Balance | Balance | Realized | Dividend | Value | ||||||||||||||
at 6/30/14 | Purchases | Sales | at 6/30/15 | Gain/(Loss) | Income | at 6/30/15 | ||||||||||||
INTECH U.S. Managed Volatility Fund | ||||||||||||||||||
Janus Cash Collateral Fund LLC | 852,019 | 13,921,130 | (13,942,337) | 830,812 | $– | $3,868 | (1) | $ 830,812 | ||||||||||
Janus Cash Liquidity Fund LLC | 679,570 | 54,908,010 | (53,903,783) | 1,683,797 | – | 1,636 | 1,683,797 | |||||||||||
Total | $– | $5,504 | $2,514,609 | |||||||||||||||
(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 June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | |||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||
INTECH U.S. Managed Volatility Fund | ||||||||
Assets | ||||||||
Investments in Securities: | ||||||||
Common Stocks | $284,391,487 | $ – | $– | |||||
Investment Companies | – | 2,514,609 | – | |||||
Total Assets | $284,391,487 | $2,514,609 | $– | |||||
12 | JUNE 30, 2015
Table of Contents
Statement of Assets and Liabilities
INTECH U.S. | ||||
Managed | ||||
As of June 30, 2015 | Volatility Fund(1) | |||
Assets: | ||||
Investments, at cost | $ | 263,158,968 | ||
Unaffiliated investments, at value(2) | $ | 284,391,487 | ||
Affiliated investments, at value | 2,514,609 | |||
Cash | 223,592 | |||
Non-interested Trustees’ deferred compensation | 5,752 | |||
Receivables: | ||||
Investments sold | 1,615,953 | |||
Fund shares sold | 252,070 | |||
Dividends | 573,483 | |||
Dividends from affiliates | 254 | |||
Other assets | 589 | |||
Total Assets | 289,577,789 | |||
Liabilities: | ||||
Collateral for securities loaned (Note 2) | 830,812 | |||
Payables: | ||||
Investments purchased | 531,013 | |||
Fund shares repurchased | 367,933 | |||
Advisory fees | 120,031 | |||
Fund administration fees | 2,290 | |||
Transfer agent fees and expenses | 52,091 | |||
12b-1 Distribution and shareholder servicing fees | 16,483 | |||
Non-interested Trustees’ fees and expenses | 2,261 | |||
Non-interested Trustees’ deferred compensation fees | 5,752 | |||
Accrued expenses and other payables | 63,835 | |||
Total Liabilities | 1,992,501 | |||
Net Assets | $ | 287,585,288 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Statement of Assets and Liabilities (continued)
INTECH U.S. | ||||
Managed | ||||
As of June 30, 2015 | Volatility Fund(1) | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 329,908,263 | ||
Undistributed net investment income/(loss) | 966,550 | |||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | (67,037,144) | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 23,747,619 | |||
Total Net Assets | $ | 287,585,288 | ||
Net Assets - Class A Shares | $ | 8,845,450 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 978,058 | |||
Net Asset Value Per Share(3) | $ | 9.04 | ||
Maximum Offering Price Per Share(4) | $ | 9.59 | ||
Net Assets - Class C Shares | $ | 4,329,828 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 489,195 | |||
Net Asset Value Per Share(3) | $ | 8.85 | ||
Net Assets - Class D Shares | $ | 3,321,858 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 371,878 | |||
Net Asset Value Per Share | $ | 8.93 | ||
Net Assets - Class I Shares | $ | 101,059,930 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 11,198,691 | |||
Net Asset Value Per Share | $ | 9.02 | ||
Net Assets - Class N Shares | $ | 74,862,386 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 8,323,620 | |||
Net Asset Value Per Share | $ | 8.99 | ||
Net Assets - Class S Shares | $ | 12,966,888 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,439,944 | |||
Net Asset Value Per Share | $ | 9.01 | ||
Net Assets - Class T Shares | $ | 82,198,948 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 9,206,617 | |||
Net Asset Value Per Share | $ | 8.93 |
(1) | Formerly named INTECH U.S. Value Fund. | |
(2) | Includes $810,316 of securities on loan. See Note 2 in Notes to Financial Statements. | |
(3) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(4) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements.
14 | JUNE 30, 2015
Table of Contents
Statement of Operations
INTECH U.S. | ||||
Managed | ||||
For the year ended June 30, 2015 | Volatility Fund(1) | |||
Investment Income: | ||||
Affiliated securities lending income, net | $ | 3,868 | ||
Dividends | 2,978,774 | |||
Dividends from affiliates | 1,636 | |||
Other income | 504 | |||
Foreign tax withheld | (1,196) | |||
Total Investment Income | 2,983,586 | |||
Expenses: | ||||
Advisory fees | 688,096 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 7,404 | |||
Class C Shares | 15,674 | |||
Class S Shares | 7,230 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 1,319 | |||
Class S Shares | 7,230 | |||
Class T Shares | 79,111 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 2,190 | |||
Class C Shares | 387 | |||
Class I Shares | 26,149 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 313 | |||
Class C Shares | 226 | |||
Class D Shares | 2,165 | |||
Class I Shares | 2,692 | |||
Class N Shares | 163 | |||
Class S Shares | 285 | |||
Class T Shares | 616 | |||
Shareholder reports expense | 59,290 | |||
Registration fees | 112,849 | |||
Custodian fees | 11,023 | |||
Professional fees | 39,587 | |||
Non-interested Trustees’ fees and expenses | 3,028 | |||
Fund administration fees | 12,117 | |||
Other expenses | 24,039 | |||
Total Expenses | 1,103,183 | |||
Less: Excess Expense Reimbursement | (1,590) | |||
Net Expenses | 1,101,593 | |||
Net Investment Income/(Loss) | 1,881,993 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments | 14,665,364 | |||
Total Net Realized Gain/(Loss) on Investments | 14,665,364 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments and non-interested Trustees’ deferred compensation | (19,098,471) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (19,098,471) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (2,551,114) |
(1) | Formerly named INTECH U.S. Value Fund. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets
INTECH U.S. Managed Volatility Fund(1) | ||||||||
For each year ended June 30 | 2015(2) | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 1,881,993 | $ | 1,328,982 | ||||
Net realized gain/(loss) on investments | 14,665,364 | 23,712,016 | ||||||
Change in unrealized net appreciation/depreciation | (19,098,471) | (1,423,119) | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (2,551,114) | 23,617,879 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income | ||||||||
Class A Shares | (17,377) | (72,796) | ||||||
Class C Shares | (8,693) | (3,673) | ||||||
Class I Shares | (556,163) | (932,467) | ||||||
Class N Shares | (861,822) | N/A | ||||||
Class S Shares | (1,341) | (432) | ||||||
Class T Shares | (465,851) | (99,586) | ||||||
Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | (696,427) | (1,331,980) | ||||||
Class C Shares | (326,843) | (105,718) | ||||||
Class D Shares | (356,500) | N/A | ||||||
Class I Shares | (6,745,178) | (12,722,899) | ||||||
Class N Shares | (13,263,446) | N/A | ||||||
Class S Shares | (275,041) | (8,539) | ||||||
Class T Shares | (7,568,371) | (1,367,283) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (31,143,053) | (16,645,373) |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
16 | JUNE 30, 2015
Table of Contents
INTECH U.S. Managed Volatility Fund(1) | ||||||||
For each year ended June 30 | 2015(2) | 2014 | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 2,677,809 | 2,032,224 | ||||||
Class C Shares | 983,056 | 641,807 | ||||||
Class D Shares | 4,549,864 | N/A | ||||||
Class I Shares | 12,105,389 | 13,754,123 | ||||||
Class N Shares | 109,572,827 | N/A | ||||||
Class S Shares | 10,924,328 | 1 | ||||||
Class T Shares | 11,946,817 | 18,849,842 | ||||||
Shares Issued in Connection with Acquisition (Note 7) | ||||||||
Class A Shares | 7,407,803 | N/A | ||||||
Class C Shares | 4,019,189 | N/A | ||||||
Class I Shares | 133,590,028 | N/A | ||||||
Class S Shares | 2,793,333 | N/A | ||||||
Class T Shares | 67,907,122 | N/A | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 598,579 | 1,379,794 | ||||||
Class C Shares | 128,430 | 68,542 | ||||||
Class D Shares | 356,138 | N/A | ||||||
Class I Shares | 6,941,307 | 13,457,255 | ||||||
Class N Shares | 14,125,268 | N/A | ||||||
Class S Shares | 276,382 | 8,971 | ||||||
Class T Shares | 7,988,453 | 1,464,907 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (2,403,094) | (9,852,014) | ||||||
Class C Shares | (1,234,464) | (245,791) | ||||||
Class D Shares | (1,202,137) | N/A | ||||||
Class I Shares | (144,543,836) | (6,703,098) | ||||||
Class N Shares | (37,703,035) | N/A | ||||||
Class S Shares | (500,017) | (13,130) | ||||||
Class T Shares | (15,073,159) | (2,664,701) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | 196,232,380 | 32,178,732 | ||||||
Net Increase/(Decrease) in Net Assets | 162,538,213 | 39,151,238 | ||||||
Net Assets: | ||||||||
Beginning of period | 125,047,075 | 85,895,837 | ||||||
End of period | $ | 287,585,288 | $ | 125,047,075 | ||||
Undistributed Net Investment Income/(Loss) | $ | 966,550 | $ | 997,203 |
(1) | Formerly named INTECH U.S. Value Fund. | |
(2) | Period from December 22, 2014 (inception date) through June 30, 2015 and October 28, 2014 (inception date) through June 30, 2015 for Class D Shares and Class N Shares, respectively. |
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Financial Highlights
Class A Shares
INTECH U.S. Managed Volatility Fund(1) | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015(2) | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $13.16 | $12.45 | $10.15 | $10.03 | $7.85 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.12(3) | 0.12(3) | 0.16 | 0.15 | 0.13 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.38 | 2.78 | 2.33 | 0.11 | 2.16 | |||||||||||||||||
Total from Investment Operations | 0.50 | 2.90 | 2.49 | 0.26 | 2.29 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.14) | (0.11) | (0.19) | (0.14) | (0.11) | |||||||||||||||||
Distributions (from capital gains) | (4.48) | (2.08) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (4.62) | (2.19) | (0.19) | (0.14) | (0.11) | |||||||||||||||||
Net Asset Value, End of Period | $9.04 | $13.16 | $12.45 | $10.15 | $10.03 | |||||||||||||||||
Total Return | 4.04% | 24.98% | 24.86% | 2.71% | 29.23% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $8,845 | $1,424 | $7,348 | $5,494 | $4,980 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $2,962 | $8,530 | $6,373 | $5,099 | $4,598 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.03% | 1.03% | 0.97% | 0.92% | 0.95% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.03% | 1.01% | 0.97% | 0.92% | 0.95% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.17% | 0.91% | 1.37% | 1.54% | 1.38% | |||||||||||||||||
Portfolio Turnover Rate | 107% | 150% | 100% | 100% | 108% |
Class C Shares
INTECH U.S. Managed Volatility Fund(1) | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015(2) | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $13.09 | $12.43 | $10.14 | $9.94 | $7.81 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.04(3) | 0.04(3) | (0.08) | 0.18 | 0.14 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.37 | 2.77 | 2.49 | 0.02 | 2.05 | |||||||||||||||||
Total from Investment Operations | 0.41 | 2.81 | 2.41 | 0.20 | 2.19 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.17) | (0.07) | (0.12) | – | (0.06) | |||||||||||||||||
Distributions (from capital gains) | (4.48) | (2.08) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (4.65) | (2.15) | (0.12) | – | (0.06) | |||||||||||||||||
Net Asset Value, End of Period | $8.85 | $13.09 | $12.43 | $10.14 | $9.94 | |||||||||||||||||
Total Return | 3.26% | 24.20% | 23.97% | 2.01% | 28.03% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $4,330 | $861 | $380 | $147 | $217 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $1,567 | $643 | $206 | $164 | $432 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.73% | 1.67% | 1.69% | 1.72% | 1.74% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.73% | 1.67% | 1.69% | 1.61% | 1.74% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.41% | 0.31% | 0.57% | 0.81% | 0.58% | |||||||||||||||||
Portfolio Turnover Rate | 107% | 150% | 100% | 100% | 108% |
(1) | Formerly named INTECH U.S. Value Fund. | |
(2) | Effective April 24, 2015 , INTECH U.S. Managed Volatility Fund II merged into INTECH U.S. Managed Volatility Fund. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Financial Statements.
18 | JUNE 30, 2015
Table of Contents
Class D Shares
INTECH U.S. Managed Volatility Fund(1) | ||||||
For a share outstanding during the period ended June 30 | 2015(2)(3) | |||||
Net Asset Value, Beginning of Period | $10.10 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(4) | 0.03 | |||||
Net realized and unrealized gain/(loss) | 0.16 | |||||
Total from Investment Operations | 0.19 | |||||
Less Dividends and Distributions: | ||||||
Dividends (from net investment income) | – | |||||
Distributions (from capital gains) | (1.36) | |||||
Total Dividends and Distributions | (1.36) | |||||
Net Asset Value, End of Period | $8.93 | |||||
Total Return* | 1.50% | |||||
Net Assets, End of Period (in thousands) | $3,322 | |||||
Average Net Assets for the Period (in thousands) | $2,101 | |||||
Ratios to Average Net Assets: | ||||||
Ratio of Gross Expenses** | 1.21% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.11% | |||||
Ratio of Net Investment Income/(Loss)** | 0.66% | |||||
Portfolio Turnover Rate | 107% |
Class I Shares
INTECH U.S. Managed Volatility Fund(1) | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015(3) | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $13.25 | $12.51 | $10.19 | $10.07 | $7.89 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.16(4) | 0.17(4) | 0.22 | 0.17 | 0.15 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.38 | 2.80 | 2.32 | 0.12 | 2.16 | |||||||||||||||||
Total from Investment Operations | 0.54 | 2.97 | 2.54 | 0.29 | 2.31 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.29) | (0.15) | (0.22) | (0.17) | (0.13) | |||||||||||||||||
Distributions (from capital gains) | (4.48) | (2.08) | – | – | – | |||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(5) | – | |||||||||||||||||
Total Dividends and Distributions | (4.77) | (2.23) | (0.22) | (0.17) | (0.13) | |||||||||||||||||
Net Asset Value, End of Period | $9.02 | $13.25 | $12.51 | $10.19 | $10.07 | |||||||||||||||||
Total Return | 4.35% | 25.48% | 25.23% | 2.96% | 29.38% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $101,060 | $104,039 | $77,625 | $93,800 | $93,695 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $61,707 | $86,864 | $93,335 | $89,976 | $84,034 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.71% | 0.66% | 0.67% | 0.67% | 0.68% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.71% | 0.66% | 0.67% | 0.67% | 0.68% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.36% | 1.32% | 1.71% | 1.78% | 1.64% | |||||||||||||||||
Portfolio Turnover Rate | 107% | 150% | 100% | 100% | 108% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Formerly named INTECH U.S. Value Fund. | |
(2) | Period from December 22, 2014 (inception date) through June 30, 2015. | |
(3) | Effective April 24, 2015 , INTECH U.S. Managed Volatility Fund II merged into INTECH U.S. Managed Volatility Fund. | |
(4) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(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 N Shares
INTECH U.S. Managed Volatility Fund(1) | ||||||
For a share outstanding during the period ended June 30 | 2015(2)(3) | |||||
Net Asset Value, Beginning of Period | $13.03 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(4) | 0.11 | |||||
Net realized and unrealized gain/(loss) | 0.66 | |||||
Total from Investment Operations | 0.77 | |||||
Less Dividends and Distributions: | ||||||
Dividends (from net investment income) | (0.33) | |||||
Distributions (from capital gains) | (4.48) | |||||
Total Dividends and Distributions | (4.81) | |||||
Net Asset Value, End of Period | $8.99 | |||||
Total Return* | 6.22% | |||||
Net Assets, End of Period (in thousands) | $74,862 | |||||
Average Net Assets for the Period (in thousands) | $53,040 | |||||
Ratios to Average Net Assets: | ||||||
Ratio of Gross Expenses** | 0.72% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.72% | |||||
Ratio of Net Investment Income/(Loss)** | 1.56% | |||||
Portfolio Turnover Rate | 107% |
Class S Shares
INTECH U.S. Managed Volatility Fund(1) | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015(3) | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $13.27 | $12.53 | $10.15 | $10.02 | $7.85 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.11(4) | 0.11(4) | 0.90 | 0.13 | 0.15 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.39 | 2.82 | 1.63 | 0.11 | 2.11 | |||||||||||||||||
Total from Investment Operations | 0.50 | 2.93 | 2.53 | 0.24 | 2.26 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.28) | (0.11) | (0.15) | (0.11) | (0.09) | |||||||||||||||||
Distributions (from capital gains) | (4.48) | (2.08) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (4.76) | (2.19) | (0.15) | (0.11) | (0.09) | |||||||||||||||||
Net Asset Value, End of Period | $9.01 | $13.27 | $12.53 | $10.15 | $10.02 | |||||||||||||||||
Total Return | 3.99% | 25.01% | 25.12% | 2.48% | 28.81% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $12,967 | $64 | $64 | $221 | $216 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $2,892 | $63 | $132 | $208 | $254 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.20% | 1.23% | 1.16% | 1.15% | 1.17% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.18% | 1.08% | 0.97% | 1.09% | 1.17% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.20% | 0.88% | 1.41% | 1.36% | 1.16% | |||||||||||||||||
Portfolio Turnover Rate | 107% | 150% | 100% | 100% | 108% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Formerly named INTECH U.S. Value Fund. | |
(2) | Period from October 28, 2014 (inception date) through June 30, 2015. | |
(3) | Effective April 24, 2015 , INTECH U.S. Managed Volatility Fund II merged into INTECH U.S. Managed Volatility Fund. | |
(4) | 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 T Shares
INTECH U.S. Managed Volatility Fund(1) | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015(2) | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $13.19 | $12.48 | $10.18 | $10.05 | $7.87 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.13(3) | 0.14(3) | 0.19 | 0.13 | 0.15 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.38 | 2.80 | 2.31 | 0.13 | 2.15 | |||||||||||||||||
Total from Investment Operations | 0.51 | 2.94 | 2.50 | 0.26 | 2.30 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.29) | (0.15) | (0.20) | (0.13) | (0.12) | |||||||||||||||||
Distributions (from capital gains) | (4.48) | (2.08) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (4.77) | (2.23) | (0.20) | (0.13) | (0.12) | |||||||||||||||||
Net Asset Value, End of Period | $8.93 | $13.19 | $12.48 | $10.18 | $10.05 | |||||||||||||||||
Total Return | 4.19% | 25.27% | 24.84% | 2.73% | 29.29% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $82,199 | $18,659 | $479 | $58 | $17 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $31,644 | $9,758 | $205 | $36 | $35 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.95% | 0.90% | 0.91% | 0.89% | 0.95% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.95% | 0.90% | 0.89% | 0.89% | 0.95% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.27% | 1.09% | 1.28% | 1.54% | 1.39% | |||||||||||||||||
Portfolio Turnover Rate | 107% | 150% | 100% | 100% | 108% |
(1) | Formerly named INTECH U.S. Value Fund. | |
(2) | Effective April 24, 2015 , INTECH U.S. Managed Volatility Fund II merged into INTECH U.S. Managed Volatility Fund. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Financial Statements.
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Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund) (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in common stocks. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
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 evaluated and valued on an amortized cost basis provided that the
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amortized cost determined approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of June 30, 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 year. 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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Notes to Financial Statements (continued)
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 treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
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.
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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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Notes to Financial Statements (continued)
Offsetting of Financial Assets and Derivative Assets
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
Deutsche Bank AG | $ | 810,316 | $ | – | $ | (810,316) | $ | – | ||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. Securities on loan will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral as permitted by the SEC. The value of the collateral must be at least 102% of the market value of the loaned securities that are denominated in U.S. dollars and 105% of the market value of the loaned securities that are not denominated in U.S. dollars. Upon receipt of cash collateral, Janus Capital intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. Loaned securities and related collateral are marked-to-market each business day based upon the market value of the loaned securities at the close of business, employing the most recent available pricing information. Collateral levels are then adjusted based on this mark-to-market evaluation.
Real Estate Investing
To the extent that real estate-related securities may be included in the Fund’s named benchmark index, INTECH’s mathematical investment process may select equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Securities Lending
Under procedures adopted by the Trustees, the Fund may seek to earn additional income by lending securities to qualified parties. Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. The Fund may lend portfolio securities in an amount equal to up to 1/3 of its total assets as determined at the time of the loan origination. There is the risk of delay in recovering a loaned security or the risk of loss in collateral rights if the borrower fails financially. In addition, Janus Capital makes efforts to balance the benefits and risks from granting such loans. All loans will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral as permitted by the SEC. If the Fund is unable to recover a security on loan, the Fund may use the collateral to purchase replacement securities in the market. There is a risk that the value of the collateral could decrease below the cost of the replacement security by the time the replacement investment is made, resulting in a loss to the Fund.
Upon receipt of cash collateral, Janus Capital may invest it in affiliated or non-affiliated cash management vehicles, whether registered or unregistered entities, as permitted by the 1940 Act and rules promulgated thereunder. Janus Capital currently intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. An investment in Janus Cash Collateral Fund LLC is generally subject to the same risks that shareholders experience when investing in similarly structured vehicles, such as the potential for significant fluctuations in assets as a result of the purchase and redemption activity of the securities lending program, a decline in the value of the collateral, and possible liquidity issues. Such risks may delay the return of the cash collateral and cause the Fund to violate its agreement to return the cash collateral to a borrower in a timely manner. As adviser to the Fund and Janus Cash Collateral Fund LLC, Janus Capital has an inherent conflict of interest as a result of its fiduciary duties to both the Fund and Janus Cash Collateral Fund LLC. Additionally, Janus Capital receives an investment advisory fee of 0.05% for managing Janus Cash Collateral Fund LLC, but it may not receive a fee for managing certain other affiliated cash management
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vehicles in which the Fund may invest, and therefore may have an incentive to allocate preferred investment opportunities to investment vehicles for which it is receiving a fee.
The value of the collateral must be at least 102% of the market value of the loaned securities that are denominated in U.S. dollars and 105% of the market value of the loaned securities that are not denominated in U.S. dollars. Loaned securities and related collateral are marked-to-market each business day based upon the market value of the loaned securities at the close of business, employing the most recent available pricing information. Collateral levels are then adjusted based on this mark-to-market evaluation.
The cash collateral invested by Janus Capital is disclosed in the Schedule of Investments. Income earned from the investment of the cash collateral, net of rebates paid to, or fees paid by, borrowers and less the fees paid to the lending agent are included as “Affiliated securities lending income, net” on the Statement of Operations.
3. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
INTECH U.S. Managed Volatility Fund | All Asset Levels | 0.50 | ||||||||
INTECH Investment Management LLC (“INTECH”) serves as subadviser to the Fund. As subadviser, INTECH provides day-to-day management of the investment operations of the Fund subject to the general oversight of Janus Capital. Janus Capital owns approximately 97% of INTECH.
Janus Capital pays INTECH a subadvisory fee rate equal to 50% of the investment advisory fee paid by the Fund to Janus Capital (net of any fee waivers and expense reimbursements).
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
INTECH U.S. Managed Volatility Fund | 0.79 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial
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Notes to Financial Statements (continued)
advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital (or the subadviser) provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the year ended June 30, 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 June 30, 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
28 | JUNE 30, 2015
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compensation expenses for the year ended June 30, 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 $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 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 product compliant with Rule 2a-7 under the 1940 Act. There are no restrictions on the Fund’s ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Fund to Janus Cash Liquidity Fund LLC. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the year ended June 30, 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 year ended June 30, 2015, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
INTECH U.S. Managed Volatility Fund | $ | 5,427 | ||||
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 year ended June 30, 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 year ended June 30, 2015.
As of June 30, 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 | ||||||||
INTECH U.S. Managed Volatility Fund - Class A Shares | - | % | - | % | ||||||
INTECH U.S. Managed Volatility Fund - Class C Shares | - | - | ||||||||
INTECH U.S. Managed Volatility Fund - Class D Shares | 2 | 0 | ||||||||
INTECH U.S. Managed Volatility Fund - Class I Shares | - | - | ||||||||
INTECH U.S. Managed Volatility Fund - Class N Shares | 96 | 25 | ||||||||
INTECH U.S. Managed Volatility Fund - Class S Shares | 1 | 0 | ||||||||
INTECH U.S. Managed Volatility Fund - Class T Shares | - | - | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
4. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation, derivatives, and foreign currency contract adjustments. 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
Janus Investment Fund | 29
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Notes to Financial Statements (continued)
ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The Fund has elected to defer post-October losses and qualified late-year losses as noted in the table below. These losses will be deferred for tax purposes and recognized during the next fiscal year.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
INTECH U.S. Managed Volatility Fund | $972,302 | $– | $(65,625,412) | $– | $(1,323,329) | $(5,261) | $23,658,725 | ||||||||||||||||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of June 30, 2015, 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 Jund 30, 2015
Accumulated | |||||||||||||||
No Expiration | Capital | ||||||||||||||
Fund | Short-Term | Long-Term | Losses | ||||||||||||
INTECH U.S. Managed Volatility Fund | $ | (65,625,412) | $ | – | $ | (65,625,412) | |||||||||
During the year ended June 30, 2015, the following capital loss carryovers were utilized by the Fund as indicated in the table:
Capital Loss | ||||||||||
Fund | Carryover Utilized | |||||||||
INTECH U.S. Managed Volatility Fund | $ | 2,454,193 | ||||||||
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 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.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
INTECH U.S. Managed Volatility Fund | $263,247,371 | $32,203,980 | $(8,545,255) | |||||||||||
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. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the year ended June 30, 2015
Distributions | |||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | ||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | |||||||||||||||
INTECH U.S. Managed Volatility Fund | $7,750,577 | $23,392,476 | $– | $– | |||||||||||||||
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For the year ended June 30, 2014
Distributions | |||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | ||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | |||||||||||||||
INTECH U.S. Managed Volatility Fund | $4,754,595 | $11,890,778 | $– | $– | |||||||||||||||
Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
INTECH U.S. Managed Volatility Fund | $ | 69,383,004 | $ | (1,399) | $ | (69,381,605) | ||||||||
5. | Capital Share Transactions |
INTECH U.S. Managed Volatility | ||||||||||
Fund | ||||||||||
For each year ended June 30 | 2015(1) | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 268,823 | 157,909 | ||||||||
Acquisition (Note 7) | 793,602 | N/A | ||||||||
Reinvested dividends and distributions | 61,449 | 114,887 | ||||||||
Shares repurchased | (254,006) | (755,014) | ||||||||
Net Increase/(Decrease) in Fund Shares | 869,868 | (482,218) | ||||||||
Shares Outstanding, Beginning of Period | 108,190 | 590,408 | ||||||||
Shares Outstanding, End of Period | 978,058 | 108,190 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 98,334 | 49,224 | ||||||||
Acquisition (Note 7) | 439,433 | N/A | ||||||||
Reinvested dividends and distributions | 13,351 | 5,721 | ||||||||
Shares repurchased | (127,701) | (19,749) | ||||||||
Net Increase/(Decrease) in Fund Shares | 423,417 | 35,196 | ||||||||
Shares Outstanding, Beginning of Period | 65,778 | 30,582 | ||||||||
Shares Outstanding, End of Period | 489,195 | 65,778 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 455,035 | N/A | ||||||||
Acquisition (Note 7) | N/A | N/A | ||||||||
Reinvested dividends and distributions | 38,795 | N/A | ||||||||
Shares repurchased | (121,952) | N/A | ||||||||
Net Increase/(Decrease) in Fund Shares | 371,878 | N/A | ||||||||
Shares Outstanding, Beginning of Period | N/A | N/A | ||||||||
Shares Outstanding, End of Period | 371,878 | N/A | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 1,204,978 | 1,050,321 | ||||||||
Acquisition (Note 7) | 14,348,474 | N/A | ||||||||
Reinvested dividends and distributions | 690,138 | 1,114,934 | ||||||||
Shares repurchased | (12,894,101) | (520,136) | ||||||||
Net Increase/(Decrease) in Fund Shares | 3,349,489 | 1,645,119 | ||||||||
Shares Outstanding, Beginning of Period | 7,849,202 | 6,204,083 | ||||||||
Shares Outstanding, End of Period | 11,198,691 | 7,849,202 |
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Notes to Financial Statements (continued)
INTECH U.S. Managed Volatility | ||||||||||
Fund | ||||||||||
For each year ended June 30 | 2015(1) | 2014 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 9,747,550 | N/A | ||||||||
Acquisition (Note 7) | N/A | N/A | ||||||||
Reinvested dividends and distributions | 1,445,934 | N/A | ||||||||
Shares repurchased | (2,869,864) | N/A | ||||||||
Net Increase/(Decrease) in Fund Shares | 8,323,620 | N/A | ||||||||
Shares Outstanding, Beginning of Period | N/A | N/A | ||||||||
Shares Outstanding, End of Period | 8,323,620 | N/A | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 1,159,835 | – | ||||||||
Acquisition (Note 7) | 300,433 | N/A | ||||||||
Reinvested dividends and distributions | 29,723 | 741 | ||||||||
Shares repurchased | (54,900) | (956) | ||||||||
Net Increase/(Decrease) in Fund Shares | 1,435,091 | (215) | ||||||||
Shares Outstanding, Beginning of Period | 4,853 | 5,068 | ||||||||
Shares Outstanding, End of Period | 1,439,944 | 4,853 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 1,115,400 | 1,466,675 | ||||||||
Acquisition (Note 7) | 7,369,994 | N/A | ||||||||
Reinvested dividends and distributions | 819,860 | 121,771 | ||||||||
Shares repurchased | (1,513,427) | (212,007) | ||||||||
Net Increase/(Decrease) in Fund Shares | 7,791,827 | 1,376,439 | ||||||||
Shares Outstanding, Beginning of Period | 1,414,790 | 38,351 | ||||||||
Shares Outstanding, End of Period | 9,206,617 | 1,414,790 | ||||||||
(1) Period from December 22, 2014 (inception date) through June 30, 2015 and October 28, 2014 (inception date) through June 30, 2015 for Class D Shares and Class N Shares, respectively. |
6. | Purchases and Sales of Investment Securities |
For the year ended June 30, 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 | ||||||
INTECH U.S. Managed Volatility Fund | $155,818,475 | $208,870,587 | $– | $– | ||||||
7. | Fund Acquisition |
The Board of Trustees of Janus Investment Fund approved an Agreement and Plan of Reorganization that provided for the merger of INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund) with and into INTECH U.S. Managed Volatility Fund (the “Merger”), effective at the close of business on April 24, 2015. The Merger is designed to streamline the Janus mutual funds platform by consolidating similar funds. The Merger was tax-free for federal income tax purposes; therefore, shareholders should not realize a tax gain or loss upon receipt of shares issued in connection with the Merger. The table below reflects the Merger activity.
32 | JUNE 30, 2015
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Target Fund’s | ||||||||||||||||||||||||||
Target Fund’s | Acquiring | Acquiring | Unrealized | |||||||||||||||||||||||
Shares | Target Fund’s | Fund’s | Fund’s | Combined | Appreciation/ | |||||||||||||||||||||
Outstanding | Net Assets | Shares Issued | Net Assets | Net Assets | (Depreciation) | |||||||||||||||||||||
Fund | Prior to Merger | Prior to Merger | in Merger | Prior to Merger | after Merger | Prior to Merger | ||||||||||||||||||||
INTECH U.S. Managed Volatility Fund | $9,459,900 | $215,750,123 | $23,255,480 | $82,941,918 | $298,692,041 | $28,997,559 | ||||||||||||||||||||
Assuming the Merger had been completed on July 1, 2014, the pro forma results of operations for the year ended June 30, 2015, are as follows:
Net investment income $6,215,220
Net gain/(loss) on investments $79,207,619
Net increase/(decrease) in net assets resulting from operations $85,422,839
8. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of INTECH U.S. Managed Volatility Fund:
of INTECH U.S. Managed Volatility Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of INTECH U.S. Managed Volatility Fund (formerly known as INTECH U.S. Value Fund) (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
34 | JUNE 30, 2015
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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 | 35
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Additional Information (unaudited) (continued)
providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
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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 June 30, 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
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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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Designation Requirements (unaudited)
For federal income tax purposes, the Fund designated the following for the year ended June 30, 2015:
Capital Gain Distributions
Fund | ||||||||||
INTECH U.S. Managed Volatility Fund | $ | 23,392,476 | ||||||||
Dividends Received Deduction Percentage
Fund | ||||||||||
INTECH U.S. Managed Volatility Fund | 100 | % | ||||||||
Qualified Dividend Income Percentage
Fund | ||||||||||
INTECH U.S. Managed Volatility Fund | 100 | % | ||||||||
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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
Janus Investment Fund | 53
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Trustees and Officers (unaudited) (continued)
OFFICERS
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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Notes
Janus Investment Fund | 55
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Notes
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Notes
Janus Investment Fund | 57
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Janus provides access to a wide range of investment disciplines.
Alternative
Janus alternative funds seek to deliver strong risk-adjusted returns over a full market cycle with lower correlation to equity markets than traditional investments.
Asset Allocation
Janus’ asset allocation funds utilize our fundamental, bottom-up research to balance risk over the long term. From fund options that meet investors’ risk tolerance and objectives to a method that incorporates non-traditional investment choices to seek non-correlated sources of risk and return, Janus’ asset allocation funds aim to allocate risk more effectively.
Fixed Income
Janus fixed income funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek capital preservation and liquidity with current income as a secondary objective.
Global & International
Janus global and international funds seek to leverage Janus’ research capabilities by taking advantage of inefficiencies in foreign markets, where accurate information and analytical insight are often at a premium.
Growth & Core
Janus growth funds focus on companies believed to be the leaders in their respective industries, with solid management teams, expanding market share, margins and efficiencies. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical funds seek to outperform their respective indices while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH (a Janus subsidiary), these funds use a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
For more information about our funds, contact your investment professional or go to janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus).
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-0815-93925 | 125-02-93016 08-15 |
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annual report
June 30, 2015
Janus Adaptive Global Allocation Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
Table of Contents
Janus Adaptive Global Allocation Fund
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Janus Adaptive Global Allocation Fund (unaudited)
FUND SNAPSHOT This global allocation fund seeks to provide investors total return by dynamically allocating its assets across a portfolio of global equity and fixed income investments, which may involve the use of derivatives. The fund is designed to actively adapt based on forward-looking views on extreme market movements, both positive and negative, with the goal of minimizing the risk of significant loss in a major downturn while participating in the growth potential of capital markets. | Ashwin Alankar co-portfolio manager | Enrique Chang co-portfolio manager |
Janus Adaptive Global Allocation Fund began investment operations on June 23, 2015. The information provided for Janus Adaptive Global Allocation Fund reflects investment activity for the period June 23, 2015 to June 30, 2015.
Janus Investment Fund | 1
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Janus Adaptive Global Allocation Fund (unaudited)
Janus Adaptive Global Allocation Fund At A Glance
5 Largest Equity Holdings – (% of Net Assets)
As of June 30, 2015
iShares Core S&P 500® Exchange-Traded Funds (ETFs) | 7.2% | |||
Vanguard FTSE Europe Exchange-Traded Funds (ETFs) | 3.3% | |||
iShares MSCI EAFE Index Fund Exchange-Traded Funds (ETFs) | 2.3% | |||
Vanguard MSCI Pacific Exchange-Traded Funds (ETFs) | 2.0% | |||
iShares MSCI Chile Capped Exchange-Traded Funds (ETFs) | 0.6% | |||
15.4% |
Asset Allocation – (% of Net Assets)
As of June 30, 2015
* Includes Other of (55.4)%.
Top Country Allocations – Long Positions (% of Investment Securities)
As of June 30, 2015
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(unaudited)
Performance
Cumulative Total Return – for the period ended June 30, 2015 | Expense Ratios – per the June 23, 2015 prospectuses (estimated for the fiscal year) | ||||||
Since | Total Annual Fund | Net Annual Fund | |||||
Inception* | Operating Expenses | Operating Expenses | |||||
Janus Adaptive Global Allocation Fund – Class A Shares | |||||||
NAV | –3.10% | 1.49% | 1.18% | ||||
MOP | –8.67% | ||||||
Janus Adaptive Global Allocation Fund – Class C Shares | |||||||
NAV | –3.10% | 2.24% | 1.93% | ||||
CDSC | –4.07% | ||||||
Janus Adaptive Global Allocation Fund – Class D Shares(1) | –3.00% | 1.33% | 1.01% | ||||
Janus Adaptive Global Allocation Fund – Class I Shares | –3.10% | 1.23% | 0.93% | ||||
Janus Adaptive Global Allocation Fund – Class N Shares | –3.00% | 1.18% | 0.88% | ||||
Janus Adaptive Global Allocation Fund – Class S Shares | –3.10% | 1.68% | 1.38% | ||||
Janus Adaptive Global Allocation Fund – Class T Shares | –3.10% | 1.43% | 1.13% | ||||
Adaptive Global Allocation 70-30 Index | –2.13% | ||||||
MSCI All Country World IndexSM | –3.15% | ||||||
Barclays Global Aggregate Bond Index | 0.24% | ||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month–end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2016.
See important disclosures on the next page.
Janus Investment Fund | 3
Table of Contents
Janus Adaptive Global Allocation Fund (unaudited)
The expense ratios shown reflect estimated annualized expenses that the Fund expects to incur during its initial fiscal year.
Performance for very short time periods may not be indicative of future performance.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Fixed income securities are subject to interest rate, inflation, credit and default risk. The bond market is volatile. As interest rates rise, bond prices usually fall, and vice versa. The return of principal is not guaranteed, and prices may decline if an issuer fails to make timely payments or its credit strength weakens.
High-yield/high-risk bonds, also known as “junk” bonds, involve a greater risk of default and price volatility than U.S. Government and other high quality bonds. High-yield/high-risk bonds can experience sudden and sharp price swings which will affect net asset value.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility, lower liquidity and differing financial and information reporting standards, all of which are magnified in emerging markets.
Alternative investments include, but are not limited to, commodities, real estate, currencies, hedging strategies, futures, structured products, and other securities intended to be less correlated to the market. They are typically subject to increased risk and are not suitable for all investors.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Until the earlier of three years from inception or the Fund’s assets meeting the first fee breakpoint, Janus Capital may recover expenses previously waived or reimbursed if the expense ratio falls below certain limits.
Rankings are not provided for Funds that are less than one year old.
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 23, 2015 | |
(1) | Closed to certain new investors. |
4 | JUNE 30, 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 | ||||||||||||||||||||||||
(6/23/15) | (6/30/15) | (6/23/15 - 6/30/15)* | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (6/23/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 969.00 | $ | 0.23 | $ | 1,000.00 | $ | 1,019.49 | $ | 5.36 | 1.07% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 969.00 | $ | 0.45 | $ | 1,000.00 | $ | 1,014.53 | $ | 10.34 | 2.07% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 970.00 | $ | 0.21 | $ | 1,000.00 | $ | 1,019.93 | $ | 4.91 | 0.98% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 969.00 | $ | 0.18 | $ | 1,000.00 | $ | 1,020.73 | $ | 4.11 | 0.82% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 970.00 | $ | 0.18 | $ | 1,000.00 | $ | 1,020.73 | $ | 4.11 | 0.82% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 969.00 | $ | 0.18 | $ | 1,000.00 | $ | 1,020.73 | $ | 4.11 | 0.82% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 969.00 | $ | 0.26 | $ | 1,000.00 | $ | 1,018.84 | $ | 6.01 | 1.20% | |||||||||||||||||
* | Actual Expenses Paid During Period reflect only the inception period for the fund (June 23, 2015 to June 30, 2015) and are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 8/365 (to reflect the period). Therefore, actual expenses shown are lower than would be expected for a six-month period. | |
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
Janus Investment Fund | 5
Table of Contents
Janus Adaptive Global Allocation Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Common Stocks – 42.3% | ||||||||||
Aerospace & Defense – 0.6% | ||||||||||
545 | Airbus Group SE | $ | 35,357 | |||||||
2,064 | BAE Systems PLC | 14,630 | ||||||||
131 | Boeing Co. | 18,172 | ||||||||
267 | Bombardier, Inc. – Class B | 481 | ||||||||
193 | CAE, Inc. | 2,298 | ||||||||
744 | Cobham PLC | 3,074 | ||||||||
408 | Finmeccanica SpA* | 5,130 | ||||||||
135 | General Dynamics Corp. | 19,128 | ||||||||
202 | Honeywell International, Inc. | 20,598 | ||||||||
177 | L-3 Communications Holdings, Inc. | 20,068 | ||||||||
109 | Lockheed Martin Corp. | 20,263 | ||||||||
505 | Meggitt PLC | 3,700 | ||||||||
112 | Northrop Grumman Corp. | 17,767 | ||||||||
79 | Precision Castparts Corp. | 15,790 | ||||||||
250 | Raytheon Co. | 23,920 | ||||||||
212 | Rockwell Collins, Inc. | 19,578 | ||||||||
1,185 | Rolls-Royce Holdings PLC* | 16,196 | ||||||||
288 | Safran SA | 19,516 | ||||||||
333 | Textron, Inc. | 14,862 | ||||||||
141 | Thales SA | 8,513 | ||||||||
2 | TransDigm Group, Inc.* | 449 | ||||||||
185 | United Technologies Corp. | 20,522 | ||||||||
1 | Zodiac Aerospace | 33 | ||||||||
320,045 | ||||||||||
Air Freight & Logistics – 0.2% | ||||||||||
1,832 | Bollore SA | 9,751 | ||||||||
240 | CH Robinson Worldwide, Inc. | 14,974 | ||||||||
784 | Deutsche Post AG | 22,901 | ||||||||
390 | Expeditors International of Washington, Inc. | 17,981 | ||||||||
131 | FedEx Corp. | 22,322 | ||||||||
282 | Royal Mail PLC | 2,279 | ||||||||
241 | United Parcel Service, Inc. – Class B | 23,355 | ||||||||
1,000 | Yamato Holdings Co., Ltd. | 19,364 | ||||||||
132,927 | ||||||||||
Airlines – 0.2% | ||||||||||
224 | American Airlines Group, Inc. | 8,945 | ||||||||
8,000 | ANA Holdings, Inc. | 21,711 | ||||||||
254 | Delta Air Lines, Inc. | 10,434 | ||||||||
206 | Deutsche Lufthansa AG* | 2,656 | ||||||||
1,405 | International Consolidated Airlines Group SA* | 10,926 | ||||||||
500 | Japan Airlines Co., Ltd. | 17,447 | ||||||||
353 | Southwest Airlines Co. | 11,681 | ||||||||
70 | United Continental Holdings, Inc.* | 3,711 | ||||||||
87,511 | ||||||||||
Auto Components – 0.3% | ||||||||||
300 | Aisin Seiki Co., Ltd. | 12,773 | ||||||||
232 | BorgWarner, Inc. | 13,187 | ||||||||
500 | Bridgestone Corp. | 18,499 | ||||||||
119 | Cie Generale des Etablissements Michelin | 12,468 | ||||||||
127 | Continental AG | 30,048 | ||||||||
138 | Delphi Automotive PLC | 11,742 | ||||||||
300 | Denso Corp. | 14,945 | ||||||||
2,481 | GKN PLC | 13,038 | ||||||||
304 | Goodyear Tire & Rubber Co. | 9,166 | ||||||||
269 | Johnson Controls, Inc. | 13,323 | ||||||||
272 | Magna International, Inc. | 15,268 | ||||||||
36 | Nokian Renkaat Oyj | 1,128 | ||||||||
900 | Sumitomo Electric Industries, Ltd. | 13,952 | ||||||||
179,537 | ||||||||||
Automobiles – 0.7% | ||||||||||
429 | Bayerische Motoren Werke AG | 46,951 | ||||||||
673 | Daimler AG | 61,246 | ||||||||
892 | Fiat Chrysler Automobiles NV* | 13,065 | ||||||||
907 | Ford Motor Co. | 13,614 | ||||||||
400 | Fuji Heavy Industries, Ltd. | 14,736 | ||||||||
446 | General Motors Co. | 14,865 | ||||||||
212 | Harley-Davidson, Inc. | 11,946 | ||||||||
500 | Honda Motor Co., Ltd. | 16,187 | ||||||||
800 | Mazda Motor Corp. | 15,677 | ||||||||
1,900 | Mitsubishi Motors Corp. | 16,179 | ||||||||
1,400 | Nissan Motor Co., Ltd. | 14,587 | ||||||||
584 | Peugeot SA* | 12,008 | ||||||||
186 | Renault SA | 19,369 | ||||||||
400 | Suzuki Motor Corp. | 13,516 | ||||||||
4 | Tesla Motors, Inc.* | 1,073 | ||||||||
300 | Toyota Motor Corp. | 20,110 | ||||||||
304 | Volkswagen AG | 70,332 | ||||||||
375,461 | ||||||||||
Beverages – 1.2% | ||||||||||
1,031 | Anheuser-Busch InBev NV | 123,545 | ||||||||
2,100 | Asahi Group Holdings, Ltd. | 66,799 | ||||||||
385 | Brown-Forman Corp. – Class B | 38,569 | ||||||||
109 | Carlsberg A/S – Class B | 9,897 | ||||||||
1,138 | Coca-Cola Co. | 44,644 | ||||||||
670 | Coca-Cola Enterprises, Inc. | 29,105 | ||||||||
152 | Coca-Cola HBC AG (CDI)* | 3,267 | ||||||||
253 | Constellation Brands, Inc. – Class A | 29,353 | ||||||||
589 | Diageo PLC | 17,035 | ||||||||
448 | Dr Pepper Snapple Group, Inc. | 32,659 | ||||||||
205 | Heineken Holding NV | 14,385 | ||||||||
125 | Heineken NV | 9,485 | ||||||||
4,100 | Kirin Holdings Co., Ltd. | 56,489 | ||||||||
361 | Molson Coors Brewing Co. – Class B | 25,201 | ||||||||
79 | Monster Beverage Corp.* | 10,588 | ||||||||
463 | PepsiCo, Inc. | 43,216 | ||||||||
235 | Pernod Ricard SA | 27,139 | ||||||||
224 | Remy Cointreau SA | 16,143 | ||||||||
1,196 | SABMiller PLC | 62,079 | ||||||||
659,598 | ||||||||||
Biotechnology – 0.3% | ||||||||||
134 | Actelion, Ltd.* | 19,612 | ||||||||
66 | Alexion Pharmaceuticals, Inc.* | 11,931 | ||||||||
22 | Alkermes PLC* | 1,416 | ||||||||
112 | Amgen, Inc. | 17,194 | ||||||||
32 | Biogen, Inc.* | 12,926 | ||||||||
31 | BioMarin Pharmaceutical, Inc.* | 4,240 | ||||||||
126 | Celgene Corp.* | 14,583 | ||||||||
528 | CSL, Ltd. | 35,219 | ||||||||
168 | Gilead Sciences, Inc. | 19,669 | ||||||||
249 | Grifols SA | 10,028 | ||||||||
38 | Isis Pharmaceuticals, Inc.* | 2,187 | ||||||||
23 | Medivation, Inc.* | 2,627 | ||||||||
8 | Puma Biotechnology, Inc.* | 934 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
6 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Biotechnology – (continued) | ||||||||||
24 | Regeneron Pharmaceuticals, Inc.* | $ | 12,243 | |||||||
94 | Vertex Pharmaceuticals, Inc.* | 11,607 | ||||||||
176,416 | ||||||||||
Building Products – 0.2% | ||||||||||
249 | Allegion PLC | 14,975 | ||||||||
682 | Assa Abloy AB – Class B | 12,849 | ||||||||
361 | Cie de St-Gobain | 16,205 | ||||||||
300 | Daikin Industries, Ltd. | 21,596 | ||||||||
7 | Fortune Brands Home & Security, Inc. | 321 | ||||||||
24 | Geberit AG | 8,003 | ||||||||
546 | Masco Corp. | 14,562 | ||||||||
88,511 | ||||||||||
Capital Markets – 0.9% | ||||||||||
623 | 3i Group PLC | 5,055 | ||||||||
855 | Aberdeen Asset Management PLC | 5,427 | ||||||||
55 | Affiliated Managers Group, Inc.* | 12,023 | ||||||||
97 | Ameriprise Financial, Inc. | 12,118 | ||||||||
354 | Bank of New York Mellon Corp. | 14,857 | ||||||||
38 | BlackRock, Inc. | 13,147 | ||||||||
465 | Charles Schwab Corp. | 15,182 | ||||||||
207 | CI Financial Corp. | 5,570 | ||||||||
638 | Credit Suisse Group AG* | 17,542 | ||||||||
858 | Deutsche Bank AG | 25,775 | ||||||||
431 | E*TRADE Financial Corp.* | 12,908 | ||||||||
149 | Eaton Vance Corp. | 5,830 | ||||||||
266 | Franklin Resources, Inc. | 13,042 | ||||||||
68 | Goldman Sachs Group, Inc. | 14,198 | ||||||||
3,850 | ICAP PLC | 32,026 | ||||||||
322 | IGM Financial, Inc. | 10,257 | ||||||||
326 | Invesco, Ltd. | 12,222 | ||||||||
3,605 | Investec PLC | 32,395 | ||||||||
179 | Julius Baer Group, Ltd.* | 10,044 | ||||||||
236 | Legg Mason, Inc. | 12,161 | ||||||||
238 | Macquarie Group, Ltd. | 14,945 | ||||||||
428 | Morgan Stanley | 16,602 | ||||||||
1,800 | Nomura Holdings, Inc. | 12,218 | ||||||||
260 | Northern Trust Corp. | 19,880 | ||||||||
35 | Partners Group Holding AG | 10,466 | ||||||||
349 | Raymond James Financial, Inc. | 20,793 | ||||||||
132 | SEI Investments Co. | 6,472 | ||||||||
197 | State Street Corp. | 15,169 | ||||||||
276 | T Rowe Price Group, Inc. | 21,454 | ||||||||
2,441 | UBS Group AG* | 51,787 | ||||||||
471,565 | ||||||||||
Chemicals – 1.5% | ||||||||||
99 | Agrium, Inc. | 10,494 | ||||||||
218 | Air Liquide S.A. | 27,569 | ||||||||
149 | Air Products & Chemicals, Inc. | 20,388 | ||||||||
209 | Airgas, Inc. | 22,108 | ||||||||
156 | Akzo Nobel N.V. | 11,350 | ||||||||
15 | Arkema SA | 1,081 | ||||||||
4 | Ashland, Inc. | 488 | ||||||||
605 | BASF SE | 53,156 | ||||||||
20 | Celanese Corp. – Series A | 1,438 | ||||||||
298 | CF Industries Holdings, Inc. | 19,155 | ||||||||
120 | Croda International PLC | 5,188 | ||||||||
422 | Dow Chemical Co. | 21,594 | ||||||||
243 | Eastman Chemical Co. | 19,882 | ||||||||
233 | Ecolab, Inc. | 26,345 | ||||||||
400 | EI du Pont de Nemours & Co. | 25,580 | ||||||||
1 | EMS-Chemie Holding AG | 423 | ||||||||
369 | FMC Corp. | 19,391 | ||||||||
8 | Givaudan SA* | 13,848 | ||||||||
7,443 | Incitec Pivot, Ltd. | 22,105 | ||||||||
226 | International Flavors & Fragrances, Inc. | 24,699 | ||||||||
142 | Johnson Matthey PLC | 6,777 | ||||||||
52 | K+S AG | 2,190 | ||||||||
194 | Koninklijke DSM NV | 11,245 | ||||||||
61 | LANXESS AG | 3,596 | ||||||||
120 | Linde AG | 22,727 | ||||||||
166 | LyondellBasell Industries NV – Class A | 17,184 | ||||||||
2 | Methanex Corp. | 112 | ||||||||
3,500 | Mitsubishi Chemical Holdings Corp. | 22,038 | ||||||||
223 | Monsanto Co. | 23,770 | ||||||||
482 | Mosaic Co. | 22,582 | ||||||||
700 | Nippon Paint Holdings Co., Ltd. | 19,764 | ||||||||
300 | Nitto Denko Corp. | 24,663 | ||||||||
224 | Novozymes A/S – Class B | 10,650 | ||||||||
52 | OCI NV* | 1,469 | ||||||||
1,531 | Orica, Ltd. | 25,132 | ||||||||
571 | Potash Corp. of Saskatchewan, Inc. | 17,686 | ||||||||
221 | PPG Industries, Inc. | 25,353 | ||||||||
236 | Praxair, Inc. | 28,214 | ||||||||
83 | Sherwin-Williams Co. | 22,827 | ||||||||
500 | Shin-Etsu Chemical Co., Ltd. | 31,049 | ||||||||
661 | Sigma-Aldrich Corp. | 92,110 | ||||||||
54 | Solvay SA | 7,428 | ||||||||
27 | Symrise AG | 1,675 | ||||||||
63 | Syngenta AG | 25,612 | ||||||||
116 | Umicore SA | 5,499 | ||||||||
34 | Westlake Chemical Corp. | 2,332 | ||||||||
184 | Yara International ASA | 9,589 | ||||||||
829,555 | ||||||||||
Commercial Banks – 2.8% | ||||||||||
749 | Australia & New Zealand Banking Group, Ltd. | 18,605 | ||||||||
1,754 | Banca Monte dei Paschi di Siena SpA* | 3,414 | ||||||||
2,226 | Banco Bilbao Vizcaya Argentaria SA | 21,816 | ||||||||
42,658 | Banco Comercial Portugues SA – Class R* | 3,709 | ||||||||
3,262 | Banco de Sabadell SA | 7,872 | ||||||||
227 | Banco Popolare SC* | 3,735 | ||||||||
1,343 | Banco Popular Espanol SA | 6,506 | ||||||||
9,059 | Banco Santander SA | 63,254 | ||||||||
769 | Bank of America Corp. | 13,088 | ||||||||
456 | Bank of Montreal | 27,025 | ||||||||
768 | Bank of Nova Scotia | 39,648 | ||||||||
7,413 | Bankia S.A. | 9,404 | ||||||||
569 | Bankinter SA | 4,205 | ||||||||
10,780 | Barclays PLC | 44,117 | ||||||||
375 | BB&T Corp. | 15,116 | ||||||||
1,946 | Bendigo & Adelaide Bank, Ltd. | 18,404 | ||||||||
846 | BNP Paribas SA | 51,066 | ||||||||
3,691 | CaixaBank SA | 17,099 | ||||||||
257 | Canadian Imperial Bank of Commerce | 18,956 | ||||||||
69 | CIT Group, Inc. | 3,208 | ||||||||
246 | Citigroup, Inc. | 13,589 | ||||||||
177 | Citizens Financial Group, Inc. | 4,834 | ||||||||
238 | Comerica, Inc. | 12,214 | ||||||||
1,843 | Commerzbank AG* | 23,554 | ||||||||
295 | Commonwealth Bank of Australia | 19,373 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
Janus Adaptive Global Allocation Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Commercial Banks – (continued) | ||||||||||
4 | Credicorp, Ltd. | $ | 556 | |||||||
1,677 | Credit Agricole SA | 24,937 | ||||||||
686 | Danske Bank A/S | 20,178 | ||||||||
355 | DNB ASA | 5,925 | ||||||||
275 | Erste Group Bank AG* | 7,809 | ||||||||
1,029 | Fifth Third Bancorp | 21,424 | ||||||||
13,584 | HSBC Holdings PLC | 121,661 | ||||||||
1,197 | Huntington Bancshares, Inc. | 13,538 | ||||||||
2,446 | ING Groep NV | 40,380 | ||||||||
10,365 | Intesa Sanpaolo SpA | 37,573 | ||||||||
11,932 | Intesa Sanpaolo SpA | 38,066 | ||||||||
218 | JPMorgan Chase & Co. | 14,772 | ||||||||
265 | KBC Groep NV | 17,706 | ||||||||
825 | KeyCorp | 12,392 | ||||||||
48,932 | Lloyds Banking Group PLC | 65,526 | ||||||||
124 | M&T Bank Corp. | 15,491 | ||||||||
1,500 | Mitsubishi UFJ Financial Group, Inc. | 10,785 | ||||||||
5,600 | Mizuho Financial Group, Inc. | 12,127 | ||||||||
701 | National Australia Bank, Ltd. | 18,013 | ||||||||
417 | National Bank of Canada | 15,668 | ||||||||
1,675 | Nordea Bank AB | 20,903 | ||||||||
3,900 | Oversea-Chinese Banking Corp., Ltd. | 29,485 | ||||||||
1,026 | People’s United Financial, Inc. | 16,631 | ||||||||
208 | PNC Financial Services Group, Inc. | 19,895 | ||||||||
265 | Raiffeisen Bank International AG* | 3,855 | ||||||||
1,919 | Regions Financial Corp. | 19,881 | ||||||||
2,500 | Resona Holdings, Inc. | 13,657 | ||||||||
1,007 | Royal Bank of Canada | 61,591 | ||||||||
7,281 | Royal Bank of Scotland Group PLC* | 40,206 | ||||||||
2,900 | Seven Bank, Ltd. | 13,437 | ||||||||
1,401 | Skandinaviska Enskilda Banken AB – Class A | 17,923 | ||||||||
510 | Societe Generale SA | 23,803 | ||||||||
2,147 | Standard Chartered PLC | 34,370 | ||||||||
300 | Sumitomo Mitsui Financial Group, Inc. | 13,383 | ||||||||
3,000 | Sumitomo Mitsui Trust Holdings, Inc. | 13,744 | ||||||||
321 | SunTrust Banks, Inc. | 13,809 | ||||||||
1,225 | Svenska Handelsbanken AB | 17,889 | ||||||||
718 | Swedbank A.B. – Class A | 16,751 | ||||||||
1,409 | Toronto-Dominion Bank | 59,844 | ||||||||
3,747 | UniCredit SpA | 25,165 | ||||||||
565 | Unione di Banche Italiane SCpA | 4,531 | ||||||||
373 | US Bancorp | 16,188 | ||||||||
288 | Wells Fargo & Co. | 16,197 | ||||||||
705 | Westpac Banking Corp. | 17,484 | ||||||||
368 | Zions Bancorporation | 11,679 | ||||||||
1,520,639 | ||||||||||
Commercial Services & Supplies – 0.3% | ||||||||||
455 | ADT Corp. | 15,274 | ||||||||
217 | Aggreko PLC | 4,906 | ||||||||
753 | Babcock International Group PLC | 12,776 | ||||||||
2,695 | Brambles, Ltd. | 22,037 | ||||||||
219 | Cintas Corp. | 18,525 | ||||||||
148 | Edenred | 3,657 | ||||||||
1,326 | G4S PLC | 5,595 | ||||||||
86 | ISS A/S | 2,838 | ||||||||
588 | Pitney Bowes, Inc. | 12,236 | ||||||||
569 | Republic Services, Inc. | 22,288 | ||||||||
36 | Securitas AB – Class B | 476 | ||||||||
32 | Societe BIC SA | 5,101 | ||||||||
150 | Stericycle, Inc.* | 20,087 | ||||||||
476 | Tyco International PLC | 18,316 | ||||||||
564 | Waste Management, Inc. | 26,141 | ||||||||
190,253 | ||||||||||
Communications Equipment – 0.3% | ||||||||||
2,324 | Alcatel-Lucent* | 8,466 | ||||||||
1,026 | Cisco Systems, Inc. | 28,174 | ||||||||
116 | F5 Networks, Inc.* | 13,961 | ||||||||
228 | Harris Corp. | 17,536 | ||||||||
498 | Juniper Networks, Inc. | 12,933 | ||||||||
469 | Motorola Solutions, Inc. | 26,892 | ||||||||
2,581 | Nokia Oyj | 17,521 | ||||||||
1 | Palo Alto Networks, Inc.* | 175 | ||||||||
295 | QUALCOMM, Inc. | 18,476 | ||||||||
2,489 | Telefonaktiebolaget LM Ericsson – Class B | 25,804 | ||||||||
169,938 | ||||||||||
Construction & Engineering – 0.2% | ||||||||||
424 | ACS Actividades de Construccion y Servicios SA | 13,638 | ||||||||
236 | Bouygues SA | 8,822 | ||||||||
1 | Chicago Bridge & Iron Co. NV | 50 | ||||||||
464 | Ferrovial SA | 10,060 | ||||||||
284 | Fluor Corp. | 15,055 | ||||||||
424 | Jacobs Engineering Group, Inc.* | 17,223 | ||||||||
437 | Quanta Services, Inc.* | 12,594 | ||||||||
270 | Skanska AB – Class B | 5,475 | ||||||||
100 | SNC-Lavalin Group, Inc. | 3,360 | ||||||||
382 | Vinci SA | 22,091 | ||||||||
108,368 | ||||||||||
Construction Materials – 0.2% | ||||||||||
6,578 | Fletcher Building, Ltd. | 36,182 | ||||||||
148 | HeidelbergCement AG | 11,735 | ||||||||
209 | Holcim, Ltd.* | 15,428 | ||||||||
1,918 | James Hardie Industries PLC (CDI) | 25,626 | ||||||||
194 | Lafarge SA | 12,811 | ||||||||
115 | Martin Marietta Materials, Inc. | 16,274 | ||||||||
222 | Vulcan Materials Co. | 18,632 | ||||||||
136,688 | ||||||||||
Consumer Finance – 0.1% | ||||||||||
318 | American Express Co. | 24,715 | ||||||||
169 | Capital One Financial Corp. | 14,867 | ||||||||
299 | Discover Financial Services | 17,228 | ||||||||
983 | Navient Corp. | 17,901 | ||||||||
74,711 | ||||||||||
Containers & Packaging – 0.3% | ||||||||||
3,364 | Amcor, Ltd. | 35,603 | ||||||||
333 | Avery Dennison Corp. | 20,293 | ||||||||
284 | Ball Corp. | 19,923 | ||||||||
11 | Crown Holdings, Inc.* | 582 | ||||||||
434 | MeadWestvaco Corp. | 20,480 | ||||||||
764 | Owens-Illinois, Inc.* | 17,526 | ||||||||
30 | Packaging Corp. of America | 1,875 | ||||||||
947 | Rexam PLC | 8,212 | ||||||||
5 | Rock-Tenn Co. – Class A | 301 | ||||||||
354 | Sealed Air Corp. | 18,189 | ||||||||
142,984 | ||||||||||
Distributors – 0% | ||||||||||
165 | Genuine Parts Co. | 14,772 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Diversified Consumer Services – 0% | ||||||||||
348 | H&R Block, Inc. | $ | 10,318 | |||||||
Diversified Financial Services – 0.5% | ||||||||||
571 | ASX, Ltd. | 17,575 | ||||||||
142 | Berkshire Hathaway, Inc. – Class B* | 19,328 | ||||||||
140 | CME Group, Inc. | 13,028 | ||||||||
122 | Deutsche Boerse AG | 10,097 | ||||||||
183 | Eurazeo SA | 12,107 | ||||||||
124 | Exor SpA | 5,919 | ||||||||
103 | Groupe Bruxelles Lambert SA | 8,290 | ||||||||
722 | Industrivarden AB – Class C | 13,611 | ||||||||
95 | Intercontinental Exchange, Inc. | 21,243 | ||||||||
365 | Investment AB Kinnevik – Class B | 11,546 | ||||||||
484 | Investor AB – Class B | 18,044 | ||||||||
400 | Japan Exchange Group, Inc. | 12,993 | ||||||||
1,019 | Leucadia National Corp. | 24,741 | ||||||||
221 | London Stock Exchange Group PLC | 8,228 | ||||||||
135 | McGraw Hill Financial, Inc. | 13,561 | ||||||||
2,800 | Mitsubishi UFJ Lease & Finance Co., Ltd. | 15,331 | ||||||||
122 | Moody’s Corp. | 13,171 | ||||||||
269 | NASDAQ OMX Group, Inc. | 13,130 | ||||||||
188 | Onex Corp. | 10,404 | ||||||||
800 | Orix Corp. | 11,905 | ||||||||
204 | Voya Financial, Inc. | 9,480 | ||||||||
283,732 | ||||||||||
Diversified Telecommunication Services – 2.1% | ||||||||||
3,237 | AT&T, Inc. | 114,978 | ||||||||
537 | BCE, Inc. | 22,816 | ||||||||
5,746 | BT Group PLC | 40,639 | ||||||||
2,818 | CenturyLink, Inc. | 82,793 | ||||||||
2,885 | Deutsche Telekom AG | 49,686 | ||||||||
137 | Elisa Oyj | 4,342 | ||||||||
10,678 | Frontier Communications Corp. | 52,856 | ||||||||
43 | Iliad SA | 9,531 | ||||||||
563 | Inmarsat PLC | 8,097 | ||||||||
3,307 | Koninklijke KPN NV | 12,644 | ||||||||
1,275 | Level 3 Communications, Inc.* | 67,154 | ||||||||
2,100 | Nippon Telegraph & Telephone Corp. | 76,084 | ||||||||
1,722 | Orange SA | 26,509 | ||||||||
239 | Proximus | 8,437 | ||||||||
30,800 | Singapore Telecommunications, Ltd. | 96,300 | ||||||||
33,322 | Spark New Zealand, Ltd. | 63,090 | ||||||||
36 | Swisscom AG | 20,182 | ||||||||
268 | TDC A/S | 1,966 | ||||||||
11,689 | Telecom Italia SpA* | 14,828 | ||||||||
17,848 | Telecom Italia SpA | 18,214 | ||||||||
123 | Telefonica Deutschland Holding AG | 709 | ||||||||
3,143 | Telefonica SA | 44,670 | ||||||||
1,002 | Telenor ASA | 21,966 | ||||||||
3,729 | TeliaSonera AB | 21,967 | ||||||||
25,880 | Telstra Corp., Ltd. | 122,578 | ||||||||
515 | TELUS Corp. | 17,745 | ||||||||
2,906 | Verizon Communications, Inc. | 135,449 | ||||||||
1,156,230 | ||||||||||
Electric Utilities – 1.1% | ||||||||||
401 | American Electric Power Co., Inc. | 21,241 | ||||||||
1,400 | Chubu Electric Power Co., Inc. | 20,874 | ||||||||
1,700 | Chugoku Electric Power Co., Inc. | 24,812 | ||||||||
290 | Duke Energy Corp. | 20,480 | ||||||||
301 | Edison International | 16,730 | ||||||||
3,589 | EDP – Energias de Portugal SA | 13,622 | ||||||||
1,280 | Electricite de France SA | 28,536 | ||||||||
542 | Endesa SA | 10,371 | ||||||||
8,399 | Enel SpA | 38,049 | ||||||||
257 | Entergy Corp. | 18,118 | ||||||||
366 | Eversource Energy | 16,620 | ||||||||
514 | Exelon Corp. | 16,150 | ||||||||
550 | FirstEnergy Corp. | 17,902 | ||||||||
305 | Fortis, Inc. | 8,568 | ||||||||
634 | Fortum Oyj | 11,265 | ||||||||
5,620 | Iberdrola SA | 37,851 | ||||||||
1,700 | Kansai Electric Power Co., Inc.* | 18,831 | ||||||||
1,800 | Kyushu Electric Power Co., Inc.* | 20,887 | ||||||||
213 | NextEra Energy, Inc. | 20,880 | ||||||||
992 | Pepco Holdings, Inc. | 26,724 | ||||||||
340 | Pinnacle West Capital Corp. | 19,343 | ||||||||
825 | PPL Corp. | 24,313 | ||||||||
87 | Red Electrica Corp. SA | 6,971 | ||||||||
546 | Southern Co. | 22,877 | ||||||||
610 | SSE PLC | 14,720 | ||||||||
3,526 | Terna Rete Elettrica Nazionale SpA | 15,580 | ||||||||
1,600 | Tohoku Electric Power Co., Inc. | 21,678 | ||||||||
2,600 | Tokyo Electric Power Co., Inc.* | 14,172 | ||||||||
950 | Xcel Energy, Inc. | 30,571 | ||||||||
578,736 | ||||||||||
Electrical Equipment – 0.4% | ||||||||||
1,497 | ABB, Ltd.* | 31,359 | ||||||||
6 | Acuity Brands, Inc. | 1,080 | ||||||||
199 | Alstom SA* | 5,645 | ||||||||
319 | AMETEK, Inc. | 17,475 | ||||||||
273 | Eaton Corp. PLC | 18,425 | ||||||||
337 | Emerson Electric Co. | 18,680 | ||||||||
192 | Legrand SA | 10,778 | ||||||||
2,000 | Mitsubishi Electric Corp. | 25,856 | ||||||||
300 | Nidec Corp. | 22,469 | ||||||||
76 | OSRAM Licht AG | 3,639 | ||||||||
11 | Prysmian SpA | 238 | ||||||||
105 | Rockwell Automation, Inc. | 13,087 | ||||||||
375 | Schneider Electric SE | 25,888 | ||||||||
155 | Vestas Wind Systems A/S | 7,737 | ||||||||
202,356 | ||||||||||
Electronic Equipment, Instruments & Components – 0.5% | ||||||||||
593 | Amphenol Corp. – Class A† | 34,376 | ||||||||
817 | Corning, Inc. | 16,119 | ||||||||
46 | Flextronics International, Ltd.* | 520 | ||||||||
540 | FLIR Systems, Inc. | 16,643 | ||||||||
283 | Hexagon AB – Class B | 10,260 | ||||||||
5,000 | Hitachi, Ltd. | 32,966 | ||||||||
600 | Kyocera Corp. | 31,199 | ||||||||
200 | Murata Manufacturing Co., Ltd. | 34,911 | ||||||||
1,000 | Omron Corp. | 43,475 | ||||||||
294 | TE Connectivity, Ltd. (U.S. Shares) | 18,904 | ||||||||
43 | Trimble Navigation, Ltd.* | 1,009 | ||||||||
2,300 | Yokogawa Electric Corp. | 29,584 | ||||||||
269,966 | ||||||||||
Energy Equipment & Services – 0.5% | ||||||||||
250 | Amec Foster Wheeler PLC | 3,211 | ||||||||
298 | Baker Hughes, Inc. | 18,387 | ||||||||
557 | Cameron International Corp.* | 29,170 | ||||||||
11 | Core Laboratories NV | 1,254 | ||||||||
678 | Diamond Offshore Drilling, Inc. | 17,499 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus Adaptive Global Allocation Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Energy Equipment & Services – (continued) | ||||||||||
1,030 | Ensco PLC – Class A | $ | 22,938 | |||||||
419 | FMC Technologies, Inc.* | 17,384 | ||||||||
707 | Halliburton Co. | 30,450 | ||||||||
237 | Helmerich & Payne, Inc. | 16,690 | ||||||||
165 | Nabors Industries, Ltd. | 2,381 | ||||||||
396 | National Oilwell Varco, Inc. | 19,119 | ||||||||
879 | Noble Corp. PLC | 13,528 | ||||||||
479 | Petrofac, Ltd. | 6,964 | ||||||||
456 | Saipem SpA* | 4,816 | ||||||||
311 | Schlumberger, Ltd. (U.S. Shares) | 26,805 | ||||||||
331 | Seadrill, Ltd. | 3,451 | ||||||||
343 | Subsea 7 SA* | 3,359 | ||||||||
77 | Technip SA | 4,765 | ||||||||
912 | Tenaris SA | 12,281 | ||||||||
385 | Transocean, Ltd. | 6,228 | ||||||||
790 | Transocean, Ltd. (U.S. Shares) | 12,735 | ||||||||
273,415 | ||||||||||
Food & Staples Retailing – 1.1% | ||||||||||
385 | Alimentation Couche-Tard, Inc. – Class B | 16,472 | ||||||||
466 | Carrefour S.A. | 14,919 | ||||||||
103 | Casino Guichard Perrachon SA | 7,802 | ||||||||
246 | Colruyt SA | 11,014 | ||||||||
288 | Costco Wholesale Corp. | 38,897 | ||||||||
363 | CVS Health Corp. | 38,072 | ||||||||
56 | Delhaize Group SA | 4,623 | ||||||||
3,030 | Distribuidora Internacional de Alimentacion SA | 23,136 | ||||||||
27 | Empire Co Ltd. | 1,902 | ||||||||
140 | George Weston Ltd. | 10,999 | ||||||||
89 | ICA Gruppen AB | 3,159 | ||||||||
2,266 | J Sainsbury PLC | 9,444 | ||||||||
21 | Jean Coutu Group PJC, Inc. – Class A | 390 | ||||||||
180 | Jeronimo Martins SGPS SA | 2,307 | ||||||||
535 | Koninklijke Ahold NV | 10,019 | ||||||||
487 | Kroger Co. | 35,312 | ||||||||
301 | Loblaw Cos., Ltd. | 15,204 | ||||||||
40 | Magnit PJSC (GDR) | 2,226 | ||||||||
179 | Metro AG | 5,643 | ||||||||
195 | Metro, Inc. | 5,234 | ||||||||
166 | Rite Aid Corp.* | 1,386 | ||||||||
1,500 | Seven & I Holdings Co., Ltd. | 64,477 | ||||||||
924 | Sysco Corp. | 33,356 | ||||||||
4,959 | Tesco PLC | 16,559 | ||||||||
565 | Wal-Mart Stores, Inc. | 40,076 | ||||||||
365 | Walgreens Boots Alliance, Inc. | 30,821 | ||||||||
2,328 | Wesfarmers, Ltd. | 70,091 | ||||||||
621 | Whole Foods Market, Inc. | 24,492 | ||||||||
1,186 | WM Morrison Supermarkets PLC | 3,369 | ||||||||
2,631 | Woolworths, Ltd. | 54,717 | ||||||||
596,118 | ||||||||||
Food Products – 1.6% | ||||||||||
622 | Archer-Daniels-Midland Co. | 29,993 | ||||||||
87 | Aryzta AG* | 4,291 | ||||||||
569 | Associated British Foods PLC | 25,664 | ||||||||
1,083 | Campbell Soup Co.† | 51,605 | ||||||||
645 | ConAgra Foods, Inc. | 28,199 | ||||||||
414 | Danone SA | 26,762 | ||||||||
839 | General Mills, Inc.† | 46,749 | ||||||||
406 | Hershey Co. | 36,065 | ||||||||
628 | Hormel Foods Corp. | 35,400 | ||||||||
314 | JM Smucker Co. | 34,041 | ||||||||
618 | Kellogg Co. | 38,749 | ||||||||
200 | Keurig Green Mountain, Inc. | 15,326 | ||||||||
392 | Kraft Foods Group, Inc. | 33,375 | ||||||||
447 | McCormick & Co., Inc. | 36,185 | ||||||||
289 | Mead Johnson Nutrition Co. | 26,073 | ||||||||
770 | Mondelez International, Inc. – Class A | 31,678 | ||||||||
2,063 | Nestle SA | 148,981 | ||||||||
638 | Orkla ASA | 5,023 | ||||||||
335 | Saputo, Inc. | 8,104 | ||||||||
1,875 | Tate & Lyle PLC | 15,302 | ||||||||
588 | Tyson Foods, Inc. – Class A | 25,066 | ||||||||
2,141 | Unilever NV | 89,151 | ||||||||
1,883 | Unilever PLC | 80,758 | ||||||||
40 | WhiteWave Foods Co.* | 1,955 | ||||||||
874,495 | ||||||||||
Gas Utilities – 0.2% | ||||||||||
445 | AGL Resources, Inc. | 20,719 | ||||||||
3,593 | APA Group | 22,838 | ||||||||
503 | Enagas SA | 13,678 | ||||||||
644 | Gas Natural SDG SA | 14,602 | ||||||||
2,252 | Snam SpA | 10,714 | ||||||||
82,551 | ||||||||||
Health Care Equipment & Supplies – 0.9% | ||||||||||
403 | Abbott Laboratories | 19,779 | ||||||||
348 | Baxter International, Inc. | 24,336 | ||||||||
179 | Becton Dickinson and Co. | 25,355 | ||||||||
917 | Boston Scientific Corp.* | 16,231 | ||||||||
574 | Cochlear, Ltd. | 35,489 | ||||||||
219 | Coloplast A/S – Class B | 14,372 | ||||||||
121 | CR Bard, Inc. | 20,655 | ||||||||
399 | DENTSPLY International, Inc. | 20,568 | ||||||||
93 | Edwards Lifesciences Corp.* | 13,246 | ||||||||
766 | Elekta AB – Class B | 4,807 | ||||||||
172 | Essilor International SA | 20,515 | ||||||||
109 | Getinge AB – Class B | 2,624 | ||||||||
20 | Hologic, Inc.* | 761 | ||||||||
700 | Hoya Corp. | 28,070 | ||||||||
33 | Intuitive Surgical, Inc.* | 15,989 | ||||||||
348 | Medtronic PLC | 25,787 | ||||||||
1,000 | Olympus Corp. | 34,567 | ||||||||
66 | ResMed, Inc. | 3,720 | ||||||||
873 | Smith & Nephew PLC | 14,730 | ||||||||
43 | Sonova Holding AG | 5,815 | ||||||||
232 | St Jude Medical, Inc. | 16,952 | ||||||||
346 | Stryker Corp. | 33,067 | ||||||||
500 | Sysmex Corp. | 29,828 | ||||||||
247 | Varian Medical Systems, Inc.* | 20,830 | ||||||||
99 | William Demant Holding A/S* | 7,554 | ||||||||
160 | Zimmer Biomet Holdings, Inc. | 17,477 | ||||||||
473,124 | ||||||||||
Health Care Providers & Services – 0.8% | ||||||||||
103 | Aetna, Inc. | 13,128 | ||||||||
210 | AmerisourceBergen Corp. | 22,331 | ||||||||
89 | Anthem, Inc. | 14,609 | ||||||||
239 | Cardinal Health, Inc. | 19,992 | ||||||||
245 | Catamaran Corp.* | 14,975 | ||||||||
36 | Centene Corp.* | 2,894 | ||||||||
92 | Cigna Corp. | 14,904 | ||||||||
326 | DaVita HealthCare Partners, Inc.* | 25,907 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Health Care Providers & Services – (continued) | ||||||||||
2 | Envision Healthcare Holdings, Inc.* | $ | 79 | |||||||
191 | Express Scripts Holding Co.* | 16,988 | ||||||||
243 | Fresenius Medical Care AG & Co. KGaA | 20,055 | ||||||||
380 | Fresenius SE & Co. KGaA | 24,378 | ||||||||
168 | HCA Holdings, Inc.* | 15,241 | ||||||||
160 | Henry Schein, Inc.* | 22,739 | ||||||||
47 | Humana, Inc. | 8,990 | ||||||||
177 | Laboratory Corp. of America Holdings* | 21,456 | ||||||||
93 | McKesson Corp. | 20,907 | ||||||||
609 | Patterson Cos., Inc. | 29,628 | ||||||||
248 | Quest Diagnostics, Inc. | 17,985 | ||||||||
768 | Ramsay Health Care, Ltd. | 36,417 | ||||||||
2,408 | Sonic Healthcare, Ltd. | 39,696 | ||||||||
170 | Tenet Healthcare Corp.* | 9,840 | ||||||||
165 | UnitedHealth Group, Inc. | 20,130 | ||||||||
100 | Universal Health Services, Inc. – Class B | 14,210 | ||||||||
447,479 | ||||||||||
Health Care Technology – 0% | ||||||||||
280 | Cerner Corp.* | 19,337 | ||||||||
Hotels, Restaurants & Leisure – 0.5% | ||||||||||
154 | Accor SA | 7,771 | ||||||||
42 | Aramark | 1,301 | ||||||||
260 | Carnival Corp. (U.S. Shares) | 12,841 | ||||||||
496 | Carnival PLC | 25,317 | ||||||||
17 | Chipotle Mexican Grill, Inc.* | 10,285 | ||||||||
1,247 | Compass Group PLC | 20,629 | ||||||||
1,431 | Crown Resorts, Ltd. | 13,467 | ||||||||
244 | Darden Restaurants, Inc. | 17,343 | ||||||||
70 | Hilton Worldwide Holdings, Inc.* | 1,928 | ||||||||
211 | InterContinental Hotels Group PLC | 8,506 | ||||||||
23 | Las Vegas Sands Corp. | 1,209 | ||||||||
156 | Marriott International, Inc. – Class A | 11,605 | ||||||||
169 | McDonald’s Corp. | 16,067 | ||||||||
26 | Norwegian Cruise Line Holdings, Ltd.* | 1,457 | ||||||||
200 | Oriental Land Co., Ltd. | 12,773 | ||||||||
355 | Restaurant Brands International, Inc. | 13,577 | ||||||||
142 | Royal Caribbean Cruises, Ltd. (U.S. Shares) | 11,174 | ||||||||
103 | Sodexo SA | 9,780 | ||||||||
238 | Starbucks Corp. | 12,760 | ||||||||
152 | Starwood Hotels & Resorts Worldwide, Inc. | 12,326 | ||||||||
4,874 | Tatts Group, Ltd. | 13,986 | ||||||||
116 | Whitbread PLC | 9,013 | ||||||||
152 | William Hill PLC | 963 | ||||||||
137 | Wyndham Worldwide Corp. | 11,222 | ||||||||
74 | Wynn Resorts, Ltd. | 7,302 | ||||||||
140 | Yum! Brands, Inc. | 12,611 | ||||||||
277,213 | ||||||||||
Household Durables – 0.3% | ||||||||||
600 | Casio Computer Co., Ltd. | 11,846 | ||||||||
386 | DR Horton, Inc. | 10,561 | ||||||||
226 | Electrolux AB – Series B | 7,087 | ||||||||
212 | Garmin, Ltd. | 9,313 | ||||||||
66 | Harman International Industries, Inc. | 7,850 | ||||||||
50 | Husqvarna AB – Class B | 377 | ||||||||
600 | Iida Group Holdings Co., Ltd. | 9,561 | ||||||||
468 | Leggett & Platt, Inc. | 22,782 | ||||||||
200 | Lennar Corp. – Class A | 10,208 | ||||||||
58 | Mohawk Industries, Inc.* | 11,072 | ||||||||
319 | Newell Rubbermaid, Inc. | 13,114 | ||||||||
1,200 | Nikon Corp. | 13,886 | ||||||||
1,000 | Panasonic Corp. | 13,741 | ||||||||
34 | Persimmon PLC* | 1,055 | ||||||||
491 | PulteGroup, Inc. | 9,894 | ||||||||
1,100 | Sekisui House, Ltd. | 17,475 | ||||||||
300 | Sony Corp. | 8,486 | ||||||||
59 | Whirlpool Corp. | 10,210 | ||||||||
188,518 | ||||||||||
Household Products – 0.5% | ||||||||||
21 | Church & Dwight Co., Inc. | 1,704 | ||||||||
437 | Clorox Co. | 45,457 | ||||||||
625 | Colgate-Palmolive Co. | 40,881 | ||||||||
9 | Energizer Holdings, Inc. | 1,184 | ||||||||
60 | Henkel AG & Co. KGaA | 5,718 | ||||||||
390 | Kimberly-Clark Corp. | 41,328 | ||||||||
550 | Procter & Gamble Co. | 43,032 | ||||||||
459 | Reckitt Benckiser Group PLC | 39,573 | ||||||||
1,005 | Svenska Cellulosa AB SCA – Class B | 25,569 | ||||||||
2,200 | Unicharm Corp. | 52,308 | ||||||||
296,754 | ||||||||||
Independent Power and Renewable Electricity Producers – 0.1% | ||||||||||
1,078 | AES Corp. | 14,294 | ||||||||
766 | NRG Energy, Inc. | 17,526 | ||||||||
547 | Talen Energy Corp.* | 9,387 | ||||||||
252 | TransAlta Corp. | 1,953 | ||||||||
43,160 | ||||||||||
Industrial Conglomerates – 0.3% | ||||||||||
133 | 3M Co. | 20,522 | ||||||||
217 | Danaher Corp. | 18,573 | ||||||||
856 | General Electric Co. | 22,744 | ||||||||
617 | Koninklijke Philips NV | 15,695 | ||||||||
105 | Roper Industries, Inc. | 18,108 | ||||||||
583 | Siemens AG | 58,716 | ||||||||
253 | Smiths Group PLC | 4,487 | ||||||||
4,000 | Toshiba Corp. | 13,762 | ||||||||
172,607 | ||||||||||
Information Technology Services – 0.7% | ||||||||||
203 | Accenture PLC – Class A (U.S. Shares) | 19,646 | ||||||||
59 | Alliance Data Systems Corp.* | 17,224 | ||||||||
307 | Amadeus IT Holding SA – Class A | 12,236 | ||||||||
69 | Atos SE | 5,152 | ||||||||
302 | Automatic Data Processing, Inc. | 24,230 | ||||||||
129 | Cap Gemini SA | 11,413 | ||||||||
199 | CGI Group, Inc.* | 7,784 | ||||||||
241 | Cognizant Technology Solutions Corp. – Class A* | 14,723 | ||||||||
289 | Computer Sciences Corp. | 18,970 | ||||||||
3,780 | Computershare, Ltd. | 34,145 | ||||||||
332 | Fidelity National Information Services, Inc. | 20,518 | ||||||||
268 | Fiserv, Inc.* | 22,198 | ||||||||
3,000 | Fujitsu, Ltd. | 16,779 | ||||||||
136 | International Business Machines Corp. | 22,122 | ||||||||
330 | MasterCard, Inc. – Class A | 30,848 | ||||||||
519 | Paychex, Inc. | 24,331 | ||||||||
469 | Teradata Corp.* | 17,353 | ||||||||
788 | Total System Services, Inc. | 32,915 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Janus Adaptive Global Allocation Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Information Technology Services – (continued) | ||||||||||
296 | Visa, Inc. – Class A | $ | 19,876 | |||||||
761 | Western Union Co. | 15,471 | ||||||||
1,712 | Xerox Corp. | 18,216 | ||||||||
406,150 | ||||||||||
Insurance – 1.9% | ||||||||||
161 | ACE, Ltd. (U.S. Shares) | 16,371 | ||||||||
465 | Admiral Group PLC | 10,132 | ||||||||
2,369 | Aegon NV | 17,408 | ||||||||
283 | Aflac, Inc. | 17,603 | ||||||||
252 | Ageas | 9,707 | ||||||||
289 | Allianz SE | 45,004 | ||||||||
239 | Allstate Corp. | 15,504 | ||||||||
228 | American International Group, Inc. | 14,095 | ||||||||
2,468 | AMP, Ltd. | 11,461 | ||||||||
130 | Aon PLC | 12,958 | ||||||||
980 | Assicurazioni Generali SpA | 17,653 | ||||||||
192 | Assurant, Inc. | 12,864 | ||||||||
2,596 | Aviva PLC | 20,086 | ||||||||
1,538 | AXA SA | 38,797 | ||||||||
32 | Baloise Holding AG | 3,903 | ||||||||
234 | Chubb Corp.† | 22,263 | ||||||||
225 | Cincinnati Financial Corp. | 11,291 | ||||||||
500 | Dai-ichi Life Insurance Co., Ltd. | 9,833 | ||||||||
971 | Delta Lloyd NV | 15,938 | ||||||||
6,032 | Direct Line Insurance Group PLC | 31,821 | ||||||||
3 | Fairfax Financial Holdings Ltd. | 1,480 | ||||||||
797 | Genworth Financial, Inc. – Class A* | 6,033 | ||||||||
925 | Great-West Lifeco, Inc. | 26,932 | ||||||||
76 | Hannover Rueck SE | 7,353 | ||||||||
355 | Hartford Financial Services Group, Inc. | 14,757 | ||||||||
35 | Industrial Alliance Insurance & Financial Services, Inc. | 1,177 | ||||||||
3,310 | Insurance Australia Group, Ltd. | 14,248 | ||||||||
249 | Intact Financial Corp. | 17,305 | ||||||||
3,839 | Legal & General Group PLC | 15,011 | ||||||||
196 | Lincoln National Corp. | 11,607 | ||||||||
424 | Loews Corp. | 16,328 | ||||||||
1,265 | Manulife Financial Corp. | 23,511 | ||||||||
306 | Marsh & McLennan Cos., Inc. | 17,350 | ||||||||
339 | MetLife, Inc. | 18,981 | ||||||||
300 | MS&AD Insurance Group Holdings, Inc. | 9,348 | ||||||||
124 | Muenchener Rueckversicherungs AG | 21,978 | ||||||||
581 | NN Group NV | 16,330 | ||||||||
3,121 | Old Mutual PLC | 9,880 | ||||||||
291 | Power Corp. of Canada | 7,443 | ||||||||
758 | Power Financial Corp. | 21,772 | ||||||||
226 | Principal Financial Group, Inc. | 11,592 | ||||||||
670 | Progressive Corp. | 18,646 | ||||||||
141 | Prudential Financial, Inc. | 12,340 | ||||||||
1,907 | Prudential PLC | 45,912 | ||||||||
1,211 | QBE Insurance Group, Ltd. | 12,770 | ||||||||
659 | RSA Insurance Group PLC | 4,112 | ||||||||
356 | Sampo Oyj – Class A | 16,766 | ||||||||
120 | SCOR SE | 4,233 | ||||||||
300 | Sompo Japan Nipponkoa Holdings, Inc. | 11,011 | ||||||||
2,796 | Standard Life PLC | 19,503 | ||||||||
388 | Sun Life Financial, Inc. | 12,956 | ||||||||
1,717 | Suncorp Group, Ltd. | 17,788 | ||||||||
47 | Swiss Life Holding AG* | 10,766 | ||||||||
350 | Swiss Re AG | 30,986 | ||||||||
600 | T&D Holdings, Inc. | 8,948 | ||||||||
300 | Tokio Marine Holdings, Inc. | 12,488 | ||||||||
510 | Torchmark Corp.† | 29,692 | ||||||||
161 | Travelers Cos., Inc. | 15,562 | ||||||||
592 | Tryg A/S | 12,343 | ||||||||
14,800 | UnipolSai SpA† | 36,658 | ||||||||
365 | Unum Group | 13,049 | ||||||||
276 | Willis Group Holdings PLC | 12,944 | ||||||||
435 | XL Group PLC | 16,182 | ||||||||
103 | Zurich Insurance Group AG* | 31,362 | ||||||||
1,052,125 | ||||||||||
Internet & Catalog Retail – 0.1% | ||||||||||
19 | Amazon.com, Inc.* | 8,248 | ||||||||
75 | Expedia, Inc. | 8,201 | ||||||||
11 | Netflix, Inc.* | 7,226 | ||||||||
9 | Priceline Group, Inc.* | 10,362 | ||||||||
700 | Rakuten, Inc. | 11,312 | ||||||||
119 | TripAdvisor, Inc.* | 10,370 | ||||||||
55,719 | ||||||||||
Internet Software & Services – 0.4% | ||||||||||
247 | Akamai Technologies, Inc.* | 17,245 | ||||||||
320 | eBay, Inc.* | 19,277 | ||||||||
71 | Equinix, Inc. | 18,034 | ||||||||
175 | Facebook, Inc. – Class A* | 15,009 | ||||||||
37 | Google, Inc. – Class A* | 19,981 | ||||||||
39 | Google, Inc. – Class C | 20,300 | ||||||||
168 | Rackspace Hosting, Inc.* | 6,248 | ||||||||
35 | Twitter, Inc.* | 1,268 | ||||||||
522 | VeriSign, Inc.* | 32,218 | ||||||||
5,800 | Yahoo! Japan Corp. | 23,414 | ||||||||
423 | Yahoo!, Inc.* | 16,620 | ||||||||
42 | Zillow Group, Inc. – Class A* | 3,643 | ||||||||
193,257 | ||||||||||
Leisure Products – 0% | ||||||||||
153 | Hasbro, Inc. | 11,443 | ||||||||
429 | Mattel, Inc. | 11,021 | ||||||||
22,464 | ||||||||||
Life Sciences Tools & Services – 0.2% | ||||||||||
576 | Agilent Technologies, Inc. | 22,222 | ||||||||
10 | Illumina, Inc.* | 2,184 | ||||||||
21 | Lonza Group AG* | 2,806 | ||||||||
328 | PerkinElmer, Inc. | 17,266 | ||||||||
149 | QIAGEN NV* | 3,660 | ||||||||
165 | Thermo Fisher Scientific, Inc. | 21,410 | ||||||||
131 | Waters Corp.* | 16,818 | ||||||||
86,366 | ||||||||||
Machinery – 1.0% | ||||||||||
4 | AGCO Corp. | 227 | ||||||||
267 | Alfa Laval AB | 4,702 | ||||||||
88 | ANDRITZ AG | 4,870 | ||||||||
856 | Atlas Copco AB – Class B | 21,334 | ||||||||
219 | Caterpillar, Inc. | 18,576 | ||||||||
867 | CNH Industrial N.V. | 7,905 | ||||||||
130 | Cummins, Inc. | 17,055 | ||||||||
223 | Deere & Co. | 21,642 | ||||||||
329 | Dover Corp. | 23,089 | ||||||||
100 | FANUC Corp. | 20,495 | ||||||||
264 | Flowserve Corp. | 13,902 | ||||||||
123 | GEA Group A.G. | 5,486 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
12 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Machinery – (continued) | ||||||||||
211 | Illinois Tool Works, Inc. | $ | 19,368 | |||||||
404 | IMI PLC | 7,140 | ||||||||
242 | Ingersoll-Rand PLC | 16,316 | ||||||||
317 | Joy Global, Inc. | 11,475 | ||||||||
700 | JTEKT Corp. | 13,260 | ||||||||
900 | Komatsu, Ltd. | 18,071 | ||||||||
427 | Kone Oyj – Class B | 17,326 | ||||||||
94 | MAN SE | 9,681 | ||||||||
111 | Metso Oyj | 3,049 | ||||||||
4,000 | Mitsubishi Heavy Industries, Ltd. | 24,343 | ||||||||
262 | PACCAR, Inc. | 16,718 | ||||||||
422 | Pall Corp. | 52,518 | ||||||||
127 | Parker Hannifin Corp. | 14,774 | ||||||||
217 | Pentair PLC | 14,919 | ||||||||
1,155 | Sandvik AB | 12,776 | ||||||||
73 | Schindler Holding AG (PC) | 11,941 | ||||||||
20 | Schindler Holding AG (REG) | 3,267 | ||||||||
292 | SKF AB – Class B | 6,664 | ||||||||
127 | Snap-on, Inc. | 20,225 | ||||||||
185 | Stanley Black & Decker, Inc. | 19,469 | ||||||||
53 | Vallourec SA | 1,082 | ||||||||
1,553 | Volvo AB – Class B | 19,287 | ||||||||
1 | WABCO Holdings, Inc.* | 124 | ||||||||
154 | Wartsila Oyj Abp | 7,213 | ||||||||
140 | Weir Group PLC | 3,732 | ||||||||
625 | Xylem, Inc. | 23,169 | ||||||||
527,190 | ||||||||||
Marine – 0.1% | ||||||||||
15 | AP Moeller – Maersk A/S – Class A | 26,342 | ||||||||
81 | Kuehne + Nagel International AG | 10,755 | ||||||||
37,097 | ||||||||||
Media – 1.0% | ||||||||||
159 | Altice SA* | 21,898 | ||||||||
454 | Cablevision Systems Corp. – Class A | 10,869 | ||||||||
231 | CBS Corp. – Class B | 12,820 | ||||||||
54 | Comcast Corp. – Class A | 3,237 | ||||||||
231 | Comcast Corp. – Class A | 13,892 | ||||||||
200 | Dentsu, Inc. | 10,362 | ||||||||
154 | DIRECTV* | 14,290 | ||||||||
347 | Discovery Communications, Inc. – Class A | 11,541 | ||||||||
293 | Discovery Communications, Inc. – Class C* | 9,106 | ||||||||
10 | DISH Network Corp. – Class A* | 677 | ||||||||
555 | Eutelsat Communications SA | 17,910 | ||||||||
300 | Gannett Co., Inc.* | 4,197 | ||||||||
1,300 | Hakuhodo DY Holdings, Inc. | 13,927 | ||||||||
596 | Interpublic Group of Cos., Inc. | 11,485 | ||||||||
3,271 | ITV PLC | 13,530 | ||||||||
74 | JCDecaux SA | 3,087 | ||||||||
59 | Kabel Deutschland Holding AG* | 7,892 | ||||||||
83 | Lagardere SCA | 2,420 | ||||||||
34 | Liberty Global PLC – Class C* | 1,721 | ||||||||
1,487 | News Corp. – Class A* | 21,695 | ||||||||
306 | Numericable-SFR SAS* | 16,218 | ||||||||
207 | Omnicom Group, Inc. | 14,384 | ||||||||
703 | Pearson PLC | 13,308 | ||||||||
140 | Publicis Groupe SA | 10,350 | ||||||||
999 | Reed Elsevier NV | 23,692 | ||||||||
1,427 | Reed Elsevier PLC | 23,203 | ||||||||
178 | Scripps Networks Interactive, Inc. – Class A | 11,636 | ||||||||
328 | SES SA (FDR) | 11,018 | ||||||||
300 | Shaw Communications, Inc. – Class B | 6,534 | ||||||||
12,000 | Singapore Press Holdings, Ltd. | 36,361 | ||||||||
1,423 | Sirius XM Holdings, Inc.* | 5,308 | ||||||||
1,095 | Sky PLC | 17,839 | ||||||||
2 | Telenet Group Holding NV* | 109 | ||||||||
506 | Thomson Reuters Corp. | 19,271 | ||||||||
87 | Time Warner Cable, Inc. | 15,501 | ||||||||
147 | Time Warner, Inc. | 12,849 | ||||||||
403 | Twenty-First Century Fox, Inc. – Class A | 13,116 | ||||||||
176 | Viacom, Inc. – Class B | 11,377 | ||||||||
949 | Vivendi SA | 23,934 | ||||||||
129 | Walt Disney Co. | 14,724 | ||||||||
192 | Wolters Kluwer NV | 5,703 | ||||||||
832 | WPP PLC | 18,639 | ||||||||
531,630 | ||||||||||
Metals & Mining – 0.9% | ||||||||||
202 | Agnico Eagle Mines, Ltd. | 5,736 | ||||||||
1,516 | Alcoa, Inc. | 16,903 | ||||||||
439 | Allegheny Technologies, Inc. | 13,258 | ||||||||
1,079 | Anglo American PLC | 15,569 | ||||||||
790 | Antofagasta PLC | 8,557 | ||||||||
1,129 | ArcelorMittal | 10,990 | ||||||||
757 | Barrick Gold, Corp. | 8,093 | ||||||||
3,589 | BHP Billiton PLC | 70,422 | ||||||||
1,308 | BHP Billiton, Ltd. | 27,293 | ||||||||
267 | Boliden AB | 4,869 | ||||||||
35 | Eldorado Gold Corp. | 145 | ||||||||
459 | First Quantum Minerals, Ltd. | 6,002 | ||||||||
120 | Franco-Nevada Corp. | 5,724 | ||||||||
764 | Freeport-McMoRan, Inc. | 14,226 | ||||||||
52 | Fresnillo PLC | 567 | ||||||||
8,626 | Glencore PLC | 34,597 | ||||||||
586 | Goldcorp, Inc. | 9,512 | ||||||||
3,216 | Iluka Resources, Ltd. | 19,053 | ||||||||
1,000 | JFE Holdings, Inc. | 22,199 | ||||||||
1,678 | Newcrest Mining, Ltd.* | 16,853 | ||||||||
646 | Newmont Mining Corp. | 15,091 | ||||||||
10,000 | Nippon Steel & Sumitomo Metal Corp. | 25,938 | ||||||||
1,517 | Norsk Hydro ASA | 6,398 | ||||||||
460 | Nucor Corp. | 20,272 | ||||||||
70 | Randgold Resources, Ltd. | 4,712 | ||||||||
1,240 | Rio Tinto PLC | 50,922 | ||||||||
588 | Rio Tinto, Ltd. | 24,380 | ||||||||
264 | Silver Wheaton, Corp. | 4,577 | ||||||||
3,553 | South32, Ltd.* | 4,800 | ||||||||
14,416 | South32, Ltd.* | 19,906 | ||||||||
29 | Southern Copper Corp. | 853 | ||||||||
391 | Teck Resources, Ltd. – Class B | 3,876 | ||||||||
388 | ThyssenKrupp AG | 10,092 | ||||||||
122 | Turquoise Hill Resources, Ltd.* | 464 | ||||||||
127 | Voestalpine AG | 5,285 | ||||||||
79 | Yamana Gold, Inc. | 238 | ||||||||
508,372 | ||||||||||
Multi-Utilities – 0.8% | ||||||||||
2,127 | AGL Energy, Ltd. | 25,514 | ||||||||
739 | Ameren Corp. | 27,846 | ||||||||
143 | Atco, Ltd. – Class I | 4,522 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Janus Adaptive Global Allocation Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Multi-Utilities – (continued) | ||||||||||
173 | Canadian Utilities, Ltd. – Class A | $ | 4,983 | |||||||
1,372 | CenterPoint Energy, Inc. | 26,109 | ||||||||
3,881 | Centrica PLC | 16,084 | ||||||||
583 | CMS Energy Corp. | 18,563 | ||||||||
515 | Consolidated Edison, Inc. | 29,808 | ||||||||
307 | Dominion Resources, Inc. | 20,529 | ||||||||
255 | DTE Energy Co. | 19,033 | ||||||||
1,292 | E.ON S.E. | 17,210 | ||||||||
1,600 | GDF Suez | 29,678 | ||||||||
2,399 | National Grid PLC | 30,799 | ||||||||
296 | NiSource, Inc. | 13,495 | ||||||||
599 | PG&E Corp. | 29,411 | ||||||||
597 | Public Service Enterprise Group, Inc. | 23,450 | ||||||||
712 | RWE AG | 15,306 | ||||||||
390 | SCANA Corp. | 19,754 | ||||||||
220 | Sempra Energy | 21,767 | ||||||||
388 | Suez Environment Co. | 7,216 | ||||||||
1,089 | TECO Energy, Inc. | 19,232 | ||||||||
501 | Veolia Environnement SA | 10,214 | ||||||||
646 | WEC Energy Group, Inc. | 29,335 | ||||||||
459,858 | ||||||||||
Multiline Retail – 0.3% | ||||||||||
59 | Canadian Tire Corp, Ltd. – Class A | 6,311 | ||||||||
195 | Dollar General Corp. | 15,159 | ||||||||
139 | Dollar Tree, Inc.* | 10,980 | ||||||||
413 | Family Dollar Stores, Inc. | 32,548 | ||||||||
183 | Kohl’s Corp. | 11,458 | ||||||||
167 | Macy’s, Inc. | 11,267 | ||||||||
1,110 | Marks & Spencer Group PLC | 9,347 | ||||||||
900 | Marui Group Co., Ltd. | 12,165 | ||||||||
117 | Next PLC | 13,694 | ||||||||
195 | Nordstrom, Inc. | 14,527 | ||||||||
170 | Target Corp. | 13,877 | ||||||||
151,333 | ||||||||||
Oil, Gas & Consumable Fuels – 3.2% | ||||||||||
278 | Anadarko Petroleum Corp. | 21,701 | ||||||||
421 | Apache Corp. | 24,262 | ||||||||
221 | ARC Resources, Ltd. | 3,787 | ||||||||
212 | Baytex Energy Corp. | 3,299 | ||||||||
2,201 | BG Group PLC | 36,635 | ||||||||
12,306 | BP PLC | 81,226 | ||||||||
693 | Cabot Oil & Gas Corp. | 21,857 | ||||||||
205 | Cameco, Corp. | 2,934 | ||||||||
720 | Canadian Natural Resources, Ltd. | 19,557 | ||||||||
457 | Canadian Oil Sands, Ltd. | 3,696 | ||||||||
534 | Cenovus Energy, Inc. | 8,539 | ||||||||
31 | Cheniere Energy, Inc.* | 2,147 | ||||||||
1,574 | Chesapeake Energy Corp. | 17,582 | ||||||||
350 | Chevron Corp. | 33,765 | ||||||||
216 | Cimarex Energy Co. | 23,827 | ||||||||
613 | ConocoPhillips | 37,644 | ||||||||
768 | CONSOL Energy, Inc. | 16,696 | ||||||||
291 | Crescent Point Energy, Corp. | 5,972 | ||||||||
444 | Devon Energy Corp. | 26,414 | ||||||||
554 | Enbridge, Inc. | 25,912 | ||||||||
560 | Encana Corp. | 6,175 | ||||||||
138 | Energen Corp. | 9,425 | ||||||||
577 | Enerplus Corp. | 5,064 | ||||||||
2,591 | Eni SpA | 45,980 | ||||||||
171 | EOG Resources, Inc. | 14,971 | ||||||||
335 | EQT Corp. | 27,249 | ||||||||
433 | Exxon Mobil Corp. | 36,026 | ||||||||
690 | Galp Energia SGPS SA | 8,091 | ||||||||
339 | Hess Corp. | 22,672 | ||||||||
844 | Husky Energy, Inc. | 16,146 | ||||||||
549 | Imperial Oil, Ltd. | 21,212 | ||||||||
2,700 | Inpex Corp. | 30,702 | ||||||||
218 | Inter Pipeline, Ltd. | 5,010 | ||||||||
7,700 | JX Holdings, Inc. | 33,236 | ||||||||
962 | Kinder Morgan, Inc. | 36,931 | ||||||||
57 | Koninklijke Vopak NV | 2,876 | ||||||||
199 | Lundin Pertroleum A.B.* | 3,411 | ||||||||
841 | Marathon Oil Corp. | 22,320 | ||||||||
574 | Marathon Petroleum Corp. | 30,026 | ||||||||
111 | MEG Energy Corp.* | 1,813 | ||||||||
803 | Murphy Oil Corp. | 33,381 | ||||||||
95 | Neste Oyj | 2,421 | ||||||||
437 | Newfield Exploration Co.* | 15,785 | ||||||||
599 | Noble Energy, Inc. | 25,565 | ||||||||
24 | NOVATEK OAO (GDR) | 2,443 | ||||||||
491 | Occidental Petroleum Corp.† | 38,185 | ||||||||
289 | OMV AG | 7,951 | ||||||||
471 | ONEOK, Inc. | 18,595 | ||||||||
3,375 | Origin Energy, Ltd. | 31,164 | ||||||||
75 | Paramount Resources, Ltd. – Class A* | 1,724 | ||||||||
1,013 | Pembina Pipeline Corp.† | 32,747 | ||||||||
166 | Peyto Exploration & Development Corp. | 4,058 | ||||||||
440 | Phillips 66 | 35,446 | ||||||||
128 | Pioneer Natural Resources Co. | 17,752 | ||||||||
59 | PrairieSky Royalty, Ltd. | 1,488 | ||||||||
842 | QEP Resources, Inc. | 15,585 | ||||||||
293 | Range Resources Corp. | 14,468 | ||||||||
877 | Repsol SA | 15,397 | ||||||||
4,462 | Royal Dutch Shell PLC – Class A | 125,230 | ||||||||
4,288 | Royal Dutch Shell PLC – Class B | 121,727 | ||||||||
3,988 | Santos, Ltd. | 24,088 | ||||||||
942 | Southwestern Energy Co.* | 21,412 | ||||||||
905 | Spectra Energy Corp. | 29,503 | ||||||||
2,060 | Statoil ASA | 36,827 | ||||||||
952 | Suncor Energy, Inc. | 26,224 | ||||||||
313 | Tesoro Corp. | 26,420 | ||||||||
1,525 | Total SA | 74,066 | ||||||||
526 | Tourmaline Oil Corp.* | 15,804 | ||||||||
457 | TransCanada Corp. | 18,576 | ||||||||
1,217 | Tullow Oil PLC | 6,495 | ||||||||
487 | Valero Energy Corp. | 30,486 | ||||||||
69 | Vermilion Energy, Inc. | 2,981 | ||||||||
84 | Whiting Petroleum Corp.* | 2,822 | ||||||||
339 | Williams Cos., Inc. | 19,455 | ||||||||
1,350 | Woodside Petroleum, Ltd. | 35,647 | ||||||||
1,728,706 | ||||||||||
Paper & Forest Products – 0.1% | ||||||||||
416 | International Paper Co. | 19,797 | ||||||||
700 | Stora Enso Oyj – Class R | 7,214 | ||||||||
333 | UPM-Kymmene Oyj | 5,891 | ||||||||
15 | West Fraser Timber Co, Ltd. | 824 | ||||||||
33,726 | ||||||||||
Personal Products – 0.4% | ||||||||||
160 | Beiersdorf A.G. | 13,401 | ||||||||
339 | Estee Lauder Cos., Inc. – Class A | 29,378 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
14 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Personal Products – (continued) | ||||||||||
1,300 | Kao Corp. | $ | 60,480 | |||||||
357 | L’Oreal SA | 63,672 | ||||||||
2,000 | Shiseido Co., Ltd. | 45,403 | ||||||||
212,334 | ||||||||||
Pharmaceuticals – 2.5% | ||||||||||
353 | AbbVie, Inc. | 23,718 | ||||||||
59 | Allergan PLC* | 17,904 | ||||||||
2,500 | Astellas Pharma, Inc. | 35,660 | ||||||||
991 | AstraZeneca PLC | 62,570 | ||||||||
560 | Bayer AG | 78,373 | ||||||||
313 | Bristol-Myers Squibb Co. | 20,827 | ||||||||
900 | Chugai Pharmaceutical Co., Ltd. | 31,074 | ||||||||
1,800 | Daiichi Sankyo Co., Ltd. | 33,302 | ||||||||
400 | Eisai Co., Ltd. | 26,856 | ||||||||
207 | Eli Lilly & Co. | 17,283 | ||||||||
236 | Endo International PLC* | 18,798 | ||||||||
3,679 | GlaxoSmithKline PLC | 76,436 | ||||||||
369 | Hospira, Inc.* | 32,734 | ||||||||
302 | Johnson & Johnson | 29,433 | ||||||||
96 | Mallinckrodt PLC* | 11,301 | ||||||||
433 | Merck & Co., Inc. | 24,651 | ||||||||
317 | Merck KGaA | 31,583 | ||||||||
163 | Mylan NV* | 11,061 | ||||||||
1,768 | Novartis AG | 174,303 | ||||||||
1,728 | Novo Nordisk A/S – Class B | 94,164 | ||||||||
85 | Orion Oyj – Class B | 2,973 | ||||||||
1,100 | Otsuka Holdings Co., Ltd. | 35,089 | ||||||||
66 | Perrigo Co. PLC | 12,199 | ||||||||
787 | Pfizer, Inc. | 26,388 | ||||||||
564 | Roche Holding AG | 158,091 | ||||||||
830 | Sanofi | 81,640 | ||||||||
700 | Shionogi & Co., Ltd. | 27,143 | ||||||||
407 | Shire PLC | 32,577 | ||||||||
900 | Takeda Pharmaceutical Co., Ltd. | 43,474 | ||||||||
166 | UCB SA | 11,915 | ||||||||
219 | Valeant Pharmaceuticals International, Inc.* | 48,589 | ||||||||
428 | Zoetis, Inc. | 20,638 | ||||||||
1,352,747 | ||||||||||
Professional Services – 0.2% | ||||||||||
113 | Adecco SA* | 9,176 | ||||||||
283 | Bereau Veritas S.A. | 6,517 | ||||||||
536 | Capita PLC | 10,425 | ||||||||
128 | Dun & Bradstreet Corp. | 15,616 | ||||||||
207 | Equifax, Inc. | 20,098 | ||||||||
867 | Experian PLC | 15,786 | ||||||||
104 | Intertek Group PLC | 4,003 | ||||||||
446 | Nielsen NV | 19,967 | ||||||||
123 | Randstad Holding NV | 8,009 | ||||||||
283 | Robert Half International, Inc. | 15,706 | ||||||||
125,303 | ||||||||||
Real Estate Investment Trusts (REITs) – 1.1% | ||||||||||
271 | American Tower Corp. | 25,282 | ||||||||
2,114 | Annaly Capital Management, Inc. | 19,428 | ||||||||
292 | Apartment Investment & Management Co. – Class A | 10,784 | ||||||||
83 | AvalonBay Communities, Inc. | 13,269 | ||||||||
112 | Boston Properties, Inc. | 13,556 | ||||||||
2,517 | British Land Co. PLC | 31,376 | ||||||||
42 | Communications Sales & Leasing, Inc. | 1,038 | ||||||||
188 | Crown Castle International Corp. | 15,096 | ||||||||
2,767 | Dexus Property Group | 15,582 | ||||||||
180 | Equity Residential | 12,631 | ||||||||
62 | Essex Property Trust, Inc. | 13,175 | ||||||||
27 | Extra Space Storage, Inc.† | 1,761 | ||||||||
501 | General Growth Properties, Inc. | 12,856 | ||||||||
2,960 | Goodman Group | 14,317 | ||||||||
5,049 | GPT Group | 16,670 | ||||||||
388 | H&R Real Estate Investment Trust | 6,972 | ||||||||
501 | Hammerson PLC | 4,844 | ||||||||
360 | HCP, Inc. | 13,129 | ||||||||
208 | Health Care REIT, Inc. | 13,651 | ||||||||
852 | Host Hotels & Resorts, Inc. | 16,895 | ||||||||
860 | Intu Properties PLC | 4,156 | ||||||||
343 | Iron Mountain, Inc. | 10,633 | ||||||||
2,913 | Kimco Realty Corp.† | 65,659 | ||||||||
197 | Klepierre | 8,664 | ||||||||
504 | Land Securities Group PLC | 9,533 | ||||||||
160 | Macerich Co. | 11,936 | ||||||||
11,377 | Mirvac Group | 16,236 | ||||||||
406 | Plum Creek Timber Co., Inc. | 16,471 | ||||||||
380 | Prologis, Inc. | 14,098 | ||||||||
78 | Public Storage | 14,381 | ||||||||
295 | Realty Income Corp. | 13,095 | ||||||||
36 | Regency Centers Corp. | 2,123 | ||||||||
391 | RioCan Real Estate Investment Trust | 8,382 | ||||||||
5,235 | Scentre Group | 15,144 | ||||||||
475 | Segro PLC | 3,028 | ||||||||
80 | Simon Property Group, Inc. | 13,842 | ||||||||
122 | SL Green Realty Corp. | 13,407 | ||||||||
4,912 | Stockland | 15,535 | ||||||||
109 | Unibail-Rodamco SE | 27,545 | ||||||||
227 | Ventas, Inc. | 14,094 | ||||||||
149 | Vornado Realty Trust | 14,145 | ||||||||
1,889 | Westfield Corp. | 13,289 | ||||||||
420 | Weyerhaeuser Co. | 13,230 | ||||||||
610,938 | ||||||||||
Real Estate Management & Development – 0.3% | ||||||||||
625 | Brookfield Asset Management, Inc. | 21,841 | ||||||||
7,200 | CapitaLand, Ltd. | 18,715 | ||||||||
306 | CBRE Group, Inc. – Class A* | 11,322 | ||||||||
600 | Daiwa House Industry Co., Ltd. | 13,989 | ||||||||
619 | Deutsche Annington Immobilien SE | 17,457 | ||||||||
1,374 | Deutsche Wohnen AG | 31,482 | ||||||||
1,177 | Lend Lease Group | 13,647 | ||||||||
1,000 | Mitsubishi Estate Co., Ltd. | 21,545 | ||||||||
303 | Realogy Holdings Corp.* | 14,156 | ||||||||
45 | Swiss Prime Site AG* | 3,416 | ||||||||
1,600 | Tokyu Fudosan Holdings Corp. | 12,343 | ||||||||
179,913 | ||||||||||
Road & Rail – 0.4% | ||||||||||
4,144 | Asciano, Ltd. | 21,258 | ||||||||
5,687 | Aurizon Holdings, Ltd. | 22,505 | ||||||||
533 | Canadian National Railway Co. | 30,756 | ||||||||
106 | Canadian Pacific Railway, Ltd. | 16,978 | ||||||||
456 | CSX Corp. | 14,889 | ||||||||
126 | DSV A/S | 4,083 | ||||||||
200 | East Japan Railway Co. | 17,995 | ||||||||
61 | Hertz Global Holdings, Inc.* | 1,105 | ||||||||
46 | JB Hunt Transport Services, Inc. | 3,776 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Janus Adaptive Global Allocation Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Road & Rail – (continued) | ||||||||||
153 | Kansas City Southern | $ | 13,954 | |||||||
251 | Norfolk Southern Corp. | 21,927 | ||||||||
168 | Ryder System, Inc. | 14,678 | ||||||||
179 | Union Pacific Corp. | 17,071 | ||||||||
200,975 | ||||||||||
Semiconductor & Semiconductor Equipment – 0.7% | ||||||||||
611 | Altera Corp. | 31,283 | ||||||||
230 | Analog Devices, Inc. | 14,763 | ||||||||
827 | Applied Materials, Inc. | 15,895 | ||||||||
1,035 | ARM Holdings PLC | 16,861 | ||||||||
280 | ASML Holding NV | 28,933 | ||||||||
96 | Avago Technologies, Ltd. | 12,761 | ||||||||
478 | Broadcom Corp. – Class A | 24,612 | ||||||||
197 | First Solar, Inc.* | 9,255 | ||||||||
861 | Infineon Technologies AG | 10,682 | ||||||||
589 | Intel Corp. | 17,915 | ||||||||
378 | KLA-Tencor Corp. | 21,247 | ||||||||
329 | Lam Research Corp. | 26,764 | ||||||||
508 | Linear Technology Corp. | 22,469 | ||||||||
83 | Marvell Technology Group, Ltd. | 1,094 | ||||||||
244 | Maxim Integrated Products, Inc. | 8,436 | ||||||||
459 | Microchip Technology, Inc. | 21,768 | ||||||||
483 | Micron Technology, Inc.* | 9,100 | ||||||||
897 | NVIDIA Corp. | 18,039 | ||||||||
44 | Qorvo, Inc.* | 3,532 | ||||||||
130 | Skyworks Solutions, Inc. | 13,533 | ||||||||
564 | STMicroelectronics NV | 4,624 | ||||||||
24 | SunEdison, Inc.* | 718 | ||||||||
342 | Texas Instruments, Inc. | 17,617 | ||||||||
400 | Tokyo Electron, Ltd. | 25,323 | ||||||||
313 | Xilinx, Inc. | 13,822 | ||||||||
391,046 | ||||||||||
Software – 0.7% | ||||||||||
113 | Activision Blizzard, Inc. | 2,736 | ||||||||
233 | Adobe Systems, Inc.* | 18,875 | ||||||||
271 | Autodesk, Inc.* | 13,570 | ||||||||
890 | CA, Inc. | 26,068 | ||||||||
38 | CDK Global, Inc. | 2,051 | ||||||||
262 | Citrix Systems, Inc.* | 18,382 | ||||||||
1 | Constellation Software, Inc. | 397 | ||||||||
168 | Dassault Systemes | 12,214 | ||||||||
220 | Electronic Arts, Inc.* | 14,630 | ||||||||
96 | Gemalto NV | 8,548 | ||||||||
220 | Intuit, Inc. | 22,169 | ||||||||
619 | Microsoft Corp. | 27,329 | ||||||||
34 | NetSuite, Inc.* | 3,120 | ||||||||
100 | Nintendo Co., Ltd. | 16,728 | ||||||||
283 | Nuance Communications, Inc.* | 4,955 | ||||||||
121 | Open Text Corp. | 4,915 | ||||||||
585 | Oracle Corp. | 23,575 | ||||||||
249 | Red Hat, Inc.* | 18,907 | ||||||||
780 | Sage Group PLC | 6,280 | ||||||||
168 | Salesforce.com, Inc.* | 11,698 | ||||||||
819 | SAP SE | 57,150 | ||||||||
75 | Splunk, Inc.* | 5,222 | ||||||||
960 | Symantec Corp. | 22,320 | ||||||||
84 | Synopsys, Inc.* | 4,255 | ||||||||
3 | VMware, Inc. – Class A* | 257 | ||||||||
174 | Workday, Inc. – Class A* | 13,292 | ||||||||
359,643 | ||||||||||
Specialty Retail – 0.7% | ||||||||||
2 | Advance Auto Parts, Inc. | 319 | ||||||||
186 | AutoNation, Inc.* | 11,714 | ||||||||
24 | AutoZone, Inc.* | 16,006 | ||||||||
172 | Bed Bath & Beyond, Inc.* | 11,865 | ||||||||
409 | Best Buy Co., Inc. | 13,337 | ||||||||
198 | CarMax, Inc.* | 13,110 | ||||||||
452 | Dixons Carphone PLC | 3,220 | ||||||||
223 | GameStop Corp. – Class A | 9,580 | ||||||||
412 | Gap, Inc. | 15,726 | ||||||||
1,084 | Hennes & Mauritz AB – Class B | 41,761 | ||||||||
130 | Home Depot, Inc. | 14,447 | ||||||||
1,990 | Inditex SA | 64,673 | ||||||||
1,552 | Kingfisher PLC | 8,468 | ||||||||
147 | L Brands, Inc. | 12,602 | ||||||||
187 | Lowe’s Cos., Inc. | 12,523 | ||||||||
49 | O’Reilly Automotive, Inc.* | 11,073 | ||||||||
311 | Ross Stores, Inc. | 15,118 | ||||||||
112 | Sports Direct International PLC* | 1,264 | ||||||||
696 | Staples, Inc. | 10,656 | ||||||||
169 | Tiffany & Co. | 15,514 | ||||||||
195 | TJX Cos., Inc. | 12,903 | ||||||||
116 | Tractor Supply Co. | 10,433 | ||||||||
252 | Urban Outfitters, Inc.* | 8,820 | ||||||||
600 | USS Co., Ltd. | 10,836 | ||||||||
4,200 | Yamada Denki Co., Ltd. | 16,818 | ||||||||
362,786 | ||||||||||
Technology Hardware, Storage & Peripherals – 0.6% | ||||||||||
144 | Apple, Inc. | 18,061 | ||||||||
757 | BlackBerry, Ltd.* | 6,189 | ||||||||
1,300 | Canon, Inc. | 42,308 | ||||||||
1,229 | EMC Corp. | 32,433 | ||||||||
1,000 | FUJIFILM Holdings Corp. | 35,740 | ||||||||
523 | Hewlett-Packard Co. | 15,695 | ||||||||
2,300 | Konica Minolta, Inc. | 26,859 | ||||||||
12,000 | NEC Corp. | 36,382 | ||||||||
439 | NetApp, Inc. | 13,855 | ||||||||
3,100 | Ricoh Co., Ltd. | 32,173 | ||||||||
199 | SanDisk Corp. | 11,586 | ||||||||
276 | Seagate Technology PLC | 13,110 | ||||||||
203 | Western Digital Corp. | 15,919 | ||||||||
300,310 | ||||||||||
Textiles, Apparel & Luxury Goods – 0.6% | ||||||||||
157 | adidas AG | 12,014 | ||||||||
291 | Burberry Group PLC | 7,182 | ||||||||
115 | Christian Dior SE | 22,446 | ||||||||
405 | Cie Financiere Richemont SA | 32,952 | ||||||||
266 | Coach, Inc. | 9,206 | ||||||||
112 | Fossil Group, Inc.* | 7,768 | ||||||||
154 | Gildan Active Wear, Inc. | 5,117 | ||||||||
306 | Hanesbrands, Inc. | 10,196 | ||||||||
70 | Hermes International | 26,109 | ||||||||
50 | Hugo Boss AG | 5,587 | ||||||||
80 | Kering | 14,282 | ||||||||
303 | Luxottica Group SpA | 20,147 | ||||||||
322 | LVMH Moet Hennessy Louis Vuitton SE | 56,407 | ||||||||
176 | Michael Kors Holdings, Ltd.* | 7,408 | ||||||||
122 | NIKE, Inc. – Class B | 13,178 | ||||||||
90 | Pandora A/S | 9,672 | ||||||||
107 | PVH Corp. | 12,326 | ||||||||
113 | Ralph Lauren Corp. | 14,957 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
16 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Textiles, Apparel & Luxury Goods – (continued) | ||||||||||
2 | Swatch Group AG¤ | $ | 150 | |||||||
38 | Swatch Group AG¤ | 14,802 | ||||||||
156 | Under Armour, Inc. – Class A* | 13,017 | ||||||||
212 | VF Corp. | 14,785 | ||||||||
329,708 | ||||||||||
Thrifts & Mortgage Finance – 0% | ||||||||||
1,111 | Hudson City Bancorp, Inc. | 10,977 | ||||||||
289 | New York Community Bancorp, Inc. | 5,312 | ||||||||
16,289 | ||||||||||
Tobacco – 0.5% | ||||||||||
650 | Altria Group, Inc. | 31,792 | ||||||||
1,338 | British American Tobacco PLC | 71,783 | ||||||||
747 | Imperial Tobacco Group PLC | 35,992 | ||||||||
1,700 | Japan Tobacco, Inc. | 60,577 | ||||||||
501 | Philip Morris International, Inc. | 40,165 | ||||||||
433 | Reynolds American, Inc. | 32,328 | ||||||||
126 | Swedish Match AB | 3,586 | ||||||||
276,223 | ||||||||||
Trading Companies & Distributors – 0.4% | ||||||||||
185 | Ashtead Group PLC | 3,194 | ||||||||
130 | Brenntag AG | 7,453 | ||||||||
219 | Bunzl PLC | 5,980 | ||||||||
554 | Fastenal Co. | 23,368 | ||||||||
129 | Finning International, Inc. | 2,426 | ||||||||
1,500 | ITOCHU Corp. | 19,821 | ||||||||
4,700 | Marubeni Corp. | 26,974 | ||||||||
900 | Mitsubishi Corp. | 19,799 | ||||||||
1,700 | Mitsui & Co., Ltd. | 23,096 | ||||||||
1,800 | Sumitomo Corp. | 20,946 | ||||||||
128 | United Rentals, Inc.* | 11,215 | ||||||||
169 | Wolseley PLC | 10,787 | ||||||||
77 | WW Grainger, Inc. | 18,222 | ||||||||
193,281 | ||||||||||
Transportation Infrastructure – 0.1% | ||||||||||
601 | Abertis Infraestructuras SA | 9,855 | ||||||||
21 | Aena SA* | 2,194 | ||||||||
7 | Aeroports de Paris | 791 | ||||||||
569 | Atlantia SpA | 14,055 | ||||||||
353 | Groupe Eurotunnel SE | 5,111 | ||||||||
5,406 | Sydney Airport | 20,768 | ||||||||
3,302 | Transurban Group | 23,689 | ||||||||
76,463 | ||||||||||
Water Utilities – 0.1% | ||||||||||
301 | American Water Works Co., Inc. | 14,638 | ||||||||
154 | Severn Trent PLC | 5,035 | ||||||||
1,083 | United Utilities Group PLC | 15,176 | ||||||||
34,849 | ||||||||||
Wireless Telecommunication Services – 0.6% | ||||||||||
2,900 | KDDI Corp. | 70,006 | ||||||||
97 | MegaFon PJSC (GDR) | 1,348 | ||||||||
99 | Millicom International Cellular SA (SDR) | 7,306 | ||||||||
259 | Mobile Telesystems OJSC (ADR) | 2,533 | ||||||||
4,200 | NTT DOCOMO, Inc. | 80,451 | ||||||||
350 | Rogers Communications, Inc. – Class B | 12,416 | ||||||||
10 | SBA Communications Corp. – Class A* | 1,150 | ||||||||
45 | Sistema JSFC (GDR) | 398 | ||||||||
1,200 | SoftBank Corp. | 70,694 | ||||||||
209 | Sprint Corp.* | 953 | ||||||||
25 | T-Mobile US, Inc.* | 969 | ||||||||
208 | Tele2 AB – Class B | 2,420 | ||||||||
17,448 | Vodafone Group PLC | 63,004 | ||||||||
313,648 | ||||||||||
Total Common Stocks (cost $23,402,229) | 23,056,037 | |||||||||
Foreign Government Bonds – 3.3% | ||||||||||
AUD 695,000 | Australian Government Bond 2.7500%, 4/21/24 | 528,876 | ||||||||
EUR 152,000 | Bundesrepublik Deutschland 0.5000%, 2/15/25 | 165,175 | ||||||||
CAD 196,000 | Canadian Government Bond 3.5000%, 12/1/45 | 197,758 | ||||||||
EUR 208,000 | France Government Bond OAT 0.5000%, 5/25/25 | 216,984 | ||||||||
EUR 246,000 | Spain Government Bond 5.9000%, 7/30/26 (144A) | 363,728 | ||||||||
GBP 154,000 | United Kingdom Gilt 5.0000%, 3/7/25 | 305,032 | ||||||||
Total Foreign Government Bonds (cost $1,777,566) | 1,777,553 | |||||||||
Preferred Stocks – 0.2% | ||||||||||
Automobiles – 0.1% | ||||||||||
8 | Bayerische Motoren Werke AG | 677 | ||||||||
194 | Porsche Automobil Holding SE | 16,342 | ||||||||
312 | Volkswagen AG | 72,340 | ||||||||
89,359 | ||||||||||
Household Products – 0.1% | ||||||||||
295 | Henkel AG & Co. KGaA | 33,081 | ||||||||
Total Preferred Stocks (cost $125,616) | 122,440 | |||||||||
U.S. Treasury Notes/Bonds – 0.6% | ||||||||||
$303,000 | U.S. Treasury Notes/Bonds, 3.1250%, 8/15/44 (cost $301,438) | 303,497 | ||||||||
Investment Companies – 109.0% | ||||||||||
Exchange-Traded Funds (ETFs) – 18.4% | ||||||||||
3,313 | Deutsche X-trackers Harvest CSI 300 China A-Shares | 152,431 | ||||||||
3,969 | Global X FTSE Greece 20 | 39,928 | ||||||||
14,669 | Global X MSCI Colombia† | 156,665 | ||||||||
18,956 | iShares Core S&P 500®† | 3,928,062 | ||||||||
6,918 | iShares MSCI Brazil Capped | 226,703 | ||||||||
8,549 | iShares MSCI Chile Capped† | 325,888 | ||||||||
19,494 | iShares MSCI EAFE Index Fund† | 1,237,674 | ||||||||
13,092 | iShares MSCI Hong Kong | 295,356 | ||||||||
4,368 | iShares MSCI Indonesia | 101,207 | ||||||||
4,112 | iShares MSCI Philippines† | 158,312 | ||||||||
3,758 | iShares MSCI South Korea Capped | 207,103 | ||||||||
2,380 | iShares MSCI Thailand Capped† | 177,215 | ||||||||
7,008 | Market Vectors Russia | 128,106 | ||||||||
33,399 | Vanguard FTSE Europe† | 1,802,878 | ||||||||
17,878 | Vanguard MSCI Pacific | 1,091,094 | ||||||||
10,028,622 | ||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Janus Adaptive Global Allocation Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Money Markets – 90.6% | ||||||||||
49,290,000 | Janus Cash Liquidity Fund LLC, 0.1291%°°,£ | $ | 49,290,000 | |||||||
Total Investment Companies (cost $59,452,207) | 59,318,622 | |||||||||
Total Investments (total cost $85,059,056) – 155.4% | 84,578,149 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (55.4)% | (30,143,969) | |||||||||
Net Assets – 100% | $ | 54,434,180 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States | $ | 68,372,732 | 80 | .8% | ||||
Japan | 2,698,907 | 3 | .2 | |||||
United Kingdom | 2,511,638 | 3 | .0 | |||||
Australia | 1,731,646 | 2 | .1 | |||||
Germany | 1,398,441 | 1 | .7 | |||||
France | 1,374,790 | 1 | .6 | |||||
Canada | 1,217,551 | 1 | .4 | |||||
Switzerland | 901,032 | 1 | .1 | |||||
Spain | 784,508 | 0 | .9 | |||||
Netherlands | 499,135 | 0 | .6 | |||||
Italy | 391,806 | 0 | .5 | |||||
Sweden | 365,237 | 0 | .4 | |||||
Chile | 325,888 | 0 | .4 | |||||
Brazil | 226,703 | 0 | .3 | |||||
Denmark | 221,796 | 0 | .3 | |||||
Belgium | 208,164 | 0 | .2 | |||||
Singapore | 180,861 | 0 | .2 | |||||
Thailand | 177,215 | 0 | .2 | |||||
Philippines | 158,312 | 0 | .2 | |||||
Colombia | 156,665 | 0 | .2 | |||||
Russia | 137,054 | 0 | .2 | |||||
Indonesia | 101,207 | 0 | .1 | |||||
New Zealand | 99,272 | 0 | .1 | |||||
Finland | 97,109 | 0 | .1 | |||||
Norway | 92,538 | 0 | .1 | |||||
Greece | 39,928 | 0 | .1 | |||||
Guernsey | 38,116 | 0 | .0 | |||||
Austria | 29,770 | 0 | .0 | |||||
Portugal | 27,729 | 0 | .0 | |||||
Luxembourg | 10,990 | 0 | .0 | |||||
Mexico | 853 | 0 | .0 | |||||
Peru | 556 | 0 | .0 | |||||
Total | $ | 84,578,149 | 100 | .0% | ||||
Schedule of Forward Currency Contracts, Open
Currency Units | Unrealized | |||||||||||
Sold/ | Currency | Appreciation/ | ||||||||||
Counterparty/Currency and Settlement Date | (Purchased) | Value | (Depreciation) | |||||||||
Bank of America: | ||||||||||||
Mexican Peso 7/30/15 | (4,414,000) | $ | (280,259) | $ | (1,765) | |||||||
South African Rand 7/30/15 | (2,694,000) | (220,413) | 1,685 | |||||||||
Hong Kong Dollar 7/30/15 | (1,243,000) | (160,358) | 26 | |||||||||
Turkish Lira 7/30/15 | (726,000) | (268,406) | 1,037 | |||||||||
Polish Zloty 7/30/15 | (378,000) | (100,495) | 275 | |||||||||
Malaysian Ringgit 7/30/15 | (258,000) | (68,245) | 81 | |||||||||
Malaysian Ringgit 7/30/15 | (221,000) | (58,458) | (414) | |||||||||
Polish Zloty 7/30/15 | (148,000) | (39,347) | (418) | |||||||||
British Pound 7/30/15 | 153,000 | 240,309 | 139 | |||||||||
Canadian Dollar 7/30/15 | 196,000 | 156,887 | 1,261 | |||||||||
Australian Dollar 7/30/15 | 416,000 | 320,320 | (2,432) | |||||||||
Euro 7/30/15 | 444,000 | 495,127 | (1,438) | |||||||||
Total | $ | 16,662 | $ | (1,963) | ||||||||
Schedule of Futures – Long
Unrealized | ||||
Appreciation/ | ||||
Description | (Depreciation) | |||
10-Year Australian Treasury Bond expires September 2015 3 contracts principal amount $226,076 value $224,363 | $ | (1,713) | ||
10-Year Canadian Government Bond expires September 2015 7 contracts principal amount $779,652 value $784,753 | 5,101 | |||
10-Year Mini Japanese Government Bond expires September 2015 21 contracts principal amount $2,524,123 value $2,521,647 | (2,476) | |||
3-Year Austalian Treasury Bond expires September 2015 57 contracts principal amount $4,315,643 value $4,305,537 | (10,106) | |||
5-Year U.S. Treasury Note expires September 2015 2 contracts principal amount $237,953 value $238,515 | 562 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
18 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Unrealized | ||||
Appreciation/ | ||||
Description | (Depreciation) | |||
Australian Securities Exchange Index expires September 2015 2 contracts principal amount $216,803 value $208,163 | $ | (8,640) | ||
Borsa Instanbul National-30 Index expires August 2015 73 contracts principal amount $279,607 value $277,547 | (2,060) | |||
EURO STOXX 50 Index expires September 2015 8 contracts principal amount $324,156 value $306,410 | (17,746) | |||
Euro-BTP Italian Government Bond expires September 2015 12 contracts principal amount $1,729,439 value $1,741,745 | 12,306 | |||
French Government Long Bond expires September 2015 3 contracts principal amount $485,487 value $489,812 | 4,325 | |||
FTSE Bursa Malaysia KLCI Index expires July 2015 6 contracts principal amount $135,740 value $135,203 | (537) | |||
FTSE/JSE TOP 40 Index expires September 2015 6 contracts principal amount $230,066 value $228,233 | (1,833) | |||
German Federal Government Bond expires September 2015 5 contracts principal amount $721,447 value $722,216 | 769 | |||
Hang Seng China Enterprise Index expires September 2015 2 contracts principal amount $169,848 value $166,978 | (2,870) | |||
Mexican Stock Exchange Price and Quotation Index expires September 2015 10 contracts principal amount $287,884 value $286,888 | (996) | |||
MSCI Emerging Market Index expires September 2015 26 contracts principal amount $1,237,515 value $1,247,220 | 9,705 | |||
MSCI Taiwan Stock Index expires July 2015 9 contracts principal amount $307,440 value $308,070 | 630 | |||
Nikkei 225 Index expires September 2015 11 contracts principal amount $1,151,075 value $1,114,025 | (37,050) | |||
SGX CNX NIFTY Index expires July 2015 8 contracts principal amount $132,937 value $134,152 | 1,215 | |||
U.S. Treasury Long Bond expires September 2015 3 contracts principal amount $449,312 value $452,531 | 3,219 | |||
United Kingdom Gilt expires September 2015 3 contracts principal amount $543,485 value $545,433 | 1,948 | |||
Warsaw Stock Exchange Index expires September 2015 12 contracts principal amount $147,190 value $147,765 | 575 | |||
Total Futures – Long | $ | (45,672) | ||
Centrally Cleared Credit Default Swaps outstanding at June 30, 2015
Variation | |||||||||||||||||||||
Premiums | Unrealized | Margin | |||||||||||||||||||
Reference | Buy/Sell | Fixed | Maturity | Notional | Paid/ | Appreciation/ | Asset/ | ||||||||||||||
Asset | Protection | Rate | Date | Amount | (Received) | (Depreciation) | (Liability) | ||||||||||||||
CDX.NA.HY.24 | Sell | 5.0000 | % | 6/20/20 | 446,490 | USD | $ | 29,291 | $ | (987) | $ | 2,123 | |||||||||
CDX.NA.IG.24 | Sell | 1.0000 | 6/20/20 | 789,000 | USD | 12,502 | (1,243) | 612 | |||||||||||||
iTraxx Europe Crossover Series 23 Version 1 | Sell | 5.0000 | 6/20/20 | 406,000 | EUR | 10,745 | (2,694) | 1,367 | |||||||||||||
iTraxx Europe Series 23 Version 1 | Sell | 1.0000 | 6/20/20 | 711,000 | EUR | 37,260 | (1,039) | 580 | |||||||||||||
Total | $ | 89,798 | $ | (5,963) | $ | 4,682 | |||||||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 19
Table of Contents
Notes to Schedule of Investments and Other Information
Adaptive Global Allocation 70-30 Index | An internally-calculated, hypothetical combination of total returns from the MSCI All Country World IndexSM (70%) and the Barclays Global Aggregate Bond Index (30%). | |
Barclays Global Aggregate Bond Index | A broad-based measure of the global investment grade fixed-rate debt markets. | |
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 | |
CDI | Clearing House Electronic Subregister System Depositary Interest | |
FDR | Fixed Depositary Receipt | |
GDR | Global Depositary Receipt | |
JSFC | Joint Stock Financial Corporation | |
LLC | Limited Liability Company | |
OJSC | Open Joint Stock Company | |
PC | Participation Certificate | |
PJSC | Private Joint Stock Company | |
PLC | Public Limited Company | |
REG | Registered | |
SDR | Swedish Depositary Receipt | |
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 June 30, 2015 is indicated in the table below: |
Value as a % | ||||||||||
Fund | Value | of Net Assets | ||||||||
Janus Adaptive Global Allocation Fund | $ | 363,728 | 0.7 | % | ||||||
* | 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 June 30, 2015, is noted below. |
Fund | Aggregate Value | ||||
Janus Adaptive Global Allocation Fund | $ | 7,636,764 | |||
¤ | Issued by the same entity and traded on separate exchanges. | |
°° | Rate shown is the 7-day yield as of June 30, 2015. |
20 | JUNE 30, 2015
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£ | 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 June 30, 2015. Unless otherwise indicated, all information in the table is for the period ended June 30, 2015. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 6/30/15 | Gain/(Loss) | Income | at 6/30/15 | |||||||||||||||
Janus Adaptive Global Allocation Fund | |||||||||||||||||||||
Janus Cash Liquidity Fund LLC | – | 54,176,000 | (4,886,000) | 49,290,000 | $ | – | $ | 174 | $ | 49,290,000 | |||||||||||
The following is a summary of the inputs that were used to value the Fund’s investments in securities and other financial instruments as of June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Janus Adaptive Global Allocation Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | $ | 23,056,037 | $ | – | $ | – | |||||
Foreign Government Bonds | – | 1,777,553 | – | ||||||||
Preferred Stocks | – | 122,440 | – | ||||||||
U.S. Treasury Notes/Bonds | – | 303,497 | – | ||||||||
Investment Companies | 10,028,622 | 49,290,000 | – | ||||||||
Total Investments in Securities | $ | 33,084,659 | $ | 51,493,490 | $ | – | |||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 4,504 | $ | – | |||||
Variation Margin Receivable | 61,630 | 4,682 | – | ||||||||
Total Assets | $ | 33,146,289 | $ | 51,502,676 | $ | – | |||||
Liabilities | |||||||||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 6,467 | $ | – | |||||
Variation Margin Payable | 12,364 | – | – | ||||||||
Total Liabilities | $ | 12,364 | $ | 6,467 | $ | – | |||||
(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 | 21
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Statement of Assets and Liabilities
Janus Adaptive Global | ||||
As of June 30, 2015 | Allocation Fund | |||
Assets: | ||||
Investments, at cost | $ | 85,059,056 | ||
Unaffiliated investments, at value | $ | 35,288,149 | ||
Affiliated investments, at value | 49,290,000 | |||
Cash denominated in foreign currency(1) | 307,830 | |||
Restricted cash (Note 1) | 515,000 | |||
Forward currency contracts | 4,504 | |||
Variation margin receivable | 66,312 | |||
Non-interested Trustees’ deferred compensation | 1,086 | |||
Receivables: | ||||
Investments sold | 282,673 | |||
Fund shares sold | 139,598 | |||
Dividends | 11,140 | |||
Dividends from affiliates | 174 | |||
Interest | 26,268 | |||
Due from adviser | 137,462 | |||
Total Assets | 86,070,196 | |||
Liabilities: | ||||
Due to custodian | 370,833 | |||
Forward currency contracts | 6,467 | |||
Closed foreign currency contracts | 3,123 | |||
Variation margin payable | 12,364 | |||
Payables: | ||||
Investments purchased | 31,025,146 | |||
Fund shares repurchased | 25,441 | |||
Advisory fees | 1,635 | |||
Fund administration fees | 20 | |||
Transfer agent fees and expenses | 6 | |||
12b-1 Distribution and shareholder servicing fees | 34 | |||
Non-interested Trustees’ fees and expenses | 42 | |||
Non-interested Trustees’ deferred compensation fees | 1,086 | |||
Accrued expenses and other payables | 189,819 | |||
Total Liabilities | 31,636,016 | |||
Net Assets | $ | 54,434,180 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
22 | JUNE 30, 2015
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Janus Adaptive Global | ||||
As of June 30, 2015 | Allocation Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 54,992,902 | ||
Undistributed net investment income/(loss) | 26,810 | |||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | 976 | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (586,508) | |||
Total Net Assets | $ | 54,434,180 | ||
Net Assets - Class A Shares | $ | 484,682 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 50,000 | |||
Net Asset Value Per Share(2) | $ | 9.69 | ||
Maximum Offering Price Per Share(3) | $ | 10.28 | ||
Net Assets - Class C Shares | $ | 24,230 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,500 | |||
Net Asset Value Per Share(2) | $ | 9.69 | ||
Net Assets - Class D Shares | $ | 102,162 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 10,537 | |||
Net Asset Value Per Share | $ | 9.70 | ||
Net Assets - Class I Shares | $ | 48,471 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,000 | |||
Net Asset Value Per Share | $ | 9.69 | ||
Net Assets - Class N Shares | $ | 53,701,934 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,539,092 | |||
Net Asset Value Per Share | $ | 9.70 | ||
Net Assets - Class S Shares | $ | 24,233 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,500 | |||
Net Asset Value Per Share | $ | 9.69 | ||
Net Assets - Class T Shares | $ | 48,468 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,000 | |||
Net Asset Value Per Share | $ | 9.69 |
(1) | Includes cost of $307,491. | |
(2) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(3) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements.
Janus Investment Fund | 23
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Statement of Operations
For the year ended June 30, 2015 | Janus Adaptive Global Allocation Fund(1) | |||
Investment Income: | ||||
Interest | $ | 58 | ||
Dividends | 16,297 | |||
Dividends from affiliates | 174 | |||
Foreign tax withheld | (71) | |||
Total Investment Income | 16,458 | |||
Expenses: | ||||
Advisory fees | 1,635 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 27 | |||
Class C Shares | 5 | |||
Class S Shares | 1 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 2 | |||
Class S Shares | 1 | |||
Class T Shares | 3 | |||
Other transfer agent fees and expenses: | ||||
Class D Shares | 1 | |||
Shareholder reports expense | 88 | |||
Registration fees | 117,099 | |||
Custodian fees | 548 | |||
Professional fees | 19,612 | |||
Non-interested Trustees’ fees and expenses | 42 | |||
Fund administration fees | 21 | |||
Other expenses | 209 | |||
Total Expenses | 139,294 | |||
Less: Excess Expense Reimbursement | (137,462) | |||
Net Expenses | 1,832 | |||
Net Investment Income/(Loss) | 14,626 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 2,145 | |||
Futures contracts | 13,326 | |||
Swap contracts | (2,311) | |||
Total Net Realized Gain/(Loss) on Investments | 13,160 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (534,873) | |||
Futures contracts | (45,672) | |||
Swap contracts | (5,963) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (586,508) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (558,722) |
(1) | Period from June 23, 2015 (inception date) through June 30, 2015. |
See Notes to Financial Statements.
24 | JUNE 30, 2015
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Statement of Changes in Net Assets
Janus Adaptive Global | ||||
Allocation Fund | ||||
For the period ended June 30 | 2015(1) | |||
Operations: | ||||
Net investment income/(loss) | $ | 14,626 | ||
Net realized gain/(loss) on investments | 13,160 | |||
Change in unrealized net appreciation/depreciation | (586,508) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (558,722) | |||
Capital Share Transactions: | ||||
Shares Sold | ||||
Class A Shares | 500,000 | |||
Class C Shares | 25,000 | |||
Class D Shares | 104,792 | |||
Class I Shares | 50,000 | |||
Class N Shares | 54,279,467 | |||
Class S Shares | 25,000 | |||
Class T Shares | 50,000 | |||
Shares Repurchased | ||||
Class N Shares | (41,357) | |||
Net Increase/(Decrease) from Capital Share Transactions | 54,992,902 | |||
Net Increase/(Decrease) in Net Assets | 54,434,180 | |||
Net Assets: | ||||
Beginning of period | – | |||
End of period | $ | 54,434,180 | ||
Undistributed Net Investment Income/(Loss) | $ | 26,810 |
(1) | Period from June 23, 2015 (inception date) through June 30, 2015. |
See Notes to Financial Statements.
Janus Investment Fund | 25
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Financial Highlights
Class A Shares
Janus Adaptive Global | ||||||
Allocation | ||||||
Fund | ||||||
For a share outstanding during the period ended June 30 | 2015(1) | |||||
Net Asset Value, Beginning of Period | $10.00 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.01 | |||||
Net realized and unrealized gain/(loss) | (0.32) | |||||
Total from Investment Operations | (0.31) | |||||
Less Dividends and Distributions: | ||||||
Dividends (from net investment income) | – | |||||
Distributions (from capital gains) | – | |||||
Total Dividends and Distributions | – | |||||
Net Asset Value, End of Period | $9.69 | |||||
Total Return* | (3.10)% | |||||
Net Assets, End of Period (in thousands) | $485 | |||||
Average Net Assets for the Period (in thousands) | $496 | |||||
Ratios to Average Net Assets: | ||||||
Ratio of Gross Expenses** | 13.45% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.07% | |||||
Ratio of Net Investment Income/(Loss)** | 5.04% | |||||
Portfolio Turnover Rate | 10% |
Class C Shares
Janus Adaptive Global | ||||||
Allocation | ||||||
Fund | ||||||
For a share outstanding during the period ended June 30 | 2015(1) | |||||
Net Asset Value, Beginning of Period | $10.00 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.01 | |||||
Net realized and unrealized gain/(loss) | (0.32) | |||||
Total from Investment Operations | (0.31) | |||||
Less Dividends and Distributions: | ||||||
Dividends (from net investment income) | – | |||||
Distributions (from capital gains) | – | |||||
Total Dividends and Distributions | – | |||||
Net Asset Value, End of Period | $9.69 | |||||
Total Return* | (3.10)% | |||||
Net Assets, End of Period (in thousands) | $24 | |||||
Average Net Assets for the Period (in thousands) | $25 | |||||
Ratios to Average Net Assets: | ||||||
Ratio of Gross Expenses** | 14.19% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.82% | |||||
Ratio of Net Investment Income/(Loss)** | 4.29% | |||||
Portfolio Turnover Rate | 10% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from June 23, 2015 (inception date) through June 30, 2015. | |
(2) | Per share amounts are calculated based on average shares outstanding during the period. |
See Notes to Financial Statements.
26 | JUNE 30, 2015
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Class D Shares
Janus Adaptive Global | ||||||
Allocation | ||||||
Fund | ||||||
For a share outstanding during the period ended June 30 | 2015(1) | |||||
Net Asset Value, Beginning of Period | $10.00 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.01 | |||||
Net realized and unrealized gain/(loss) | (0.31) | |||||
Total from Investment Operations | (0.30) | |||||
Less Dividends and Distributions: | ||||||
Dividends (from net investment income) | – | |||||
Distributions (from capital gains) | – | |||||
Total Dividends and Distributions | – | |||||
Net Asset Value, End of Period | $9.70 | |||||
Total Return* | (3.00)% | |||||
Net Assets, End of Period (in thousands) | $102 | |||||
Average Net Assets for the Period (in thousands) | $64 | |||||
Ratios to Average Net Assets: | ||||||
Ratio of Gross Expenses** | 20.64% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.98% | |||||
Ratio of Net Investment Income/(Loss)** | 5.03% | |||||
Portfolio Turnover Rate | 10% |
Class I Shares
Janus Adaptive Global | ||||||
Allocation | ||||||
Fund | ||||||
For a share outstanding during the period ended June 30 | 2015(1) | |||||
Net Asset Value, Beginning of Period | $10.00 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.01 | |||||
Net realized and unrealized gain/(loss) | (0.32) | |||||
Total from Investment Operations | (0.31) | |||||
Less Dividends and Distributions: | ||||||
Dividends (from net investment income) | – | |||||
Distributions (from capital gains) | – | |||||
Total Dividends and Distributions | – | |||||
Net Asset Value, End of Period | $9.69 | |||||
Total Return* | (3.10)% | |||||
Net Assets, End of Period (in thousands) | $48 | |||||
Average Net Assets for the Period (in thousands) | $50 | |||||
Ratios to Average Net Assets: | ||||||
Ratio of Gross Expenses** | 13.19% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.82% | |||||
Ratio of Net Investment Income/(Loss)** | 5.29% | |||||
Portfolio Turnover Rate | 10% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from June 23, 2015 (inception date) through June 30, 2015. | |
(2) | Per share amounts are calculated based on average shares outstanding during the period. |
See Notes to Financial Statements.
Janus Investment Fund | 27
Table of Contents
Financial Highlights (continued)
Class N Shares
Janus Adaptive Global | ||||||
Allocation | ||||||
Fund | ||||||
For a share outstanding during the period ended June 30 | 2015(1) | |||||
Net Asset Value, Beginning of Period | $10.00 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.01 | |||||
Net realized and unrealized gain/(loss) | (0.31) | |||||
Total from Investment Operations | (0.30) | |||||
Less Dividends and Distributions: | ||||||
Dividends (from net investment income) | – | |||||
Distributions (from capital gains) | – | |||||
Total Dividends and Distributions | – | |||||
Net Asset Value, End of Period | $9.70 | |||||
Total Return* | (3.00)% | |||||
Net Assets, End of Period (in thousands) | $53,702 | |||||
Average Net Assets for the Period (in thousands) | $9,234 | |||||
Ratios to Average Net Assets: | ||||||
Ratio of Gross Expenses** | 67.74% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.82% | |||||
Ratio of Net Investment Income/(Loss)** | 6.84% | |||||
Portfolio Turnover Rate | 10% |
Class S Shares
Janus Adaptive Global | ||||||
Allocation | ||||||
Fund | ||||||
For a share outstanding during the period ended June 30 | 2015(1) | |||||
Net Asset Value, Beginning of Period | $10.00 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.01 | |||||
Net realized and unrealized gain/(loss) | (0.32) | |||||
Total from Investment Operations | (0.31) | |||||
Less Dividends and Distributions: | ||||||
Dividends (from net investment income) | – | |||||
Distributions (from capital gains) | – | |||||
Total Dividends and Distributions | – | |||||
Net Asset Value, End of Period | $9.69 | |||||
Total Return* | (3.10)% | |||||
Net Assets, End of Period (in thousands) | $24 | |||||
Average Net Assets for the Period (in thousands) | $25 | |||||
Ratios to Average Net Assets: | ||||||
Ratio of Gross Expenses** | 13.69% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.32% | |||||
Ratio of Net Investment Income/(Loss)** | 4.79% | |||||
Portfolio Turnover Rate | 10% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from June 23, 2015 (inception date) through June 30, 2015. | |
(2) | Per share amounts are calculated based on average shares outstanding during the period. |
See Notes to Financial Statements.
28 | JUNE 30, 2015
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Class T Shares
Janus Adaptive Global | ||||||
Allocation | ||||||
Fund | ||||||
For a share outstanding during the period ended June 30 | 2015(1) | |||||
Net Asset Value, Beginning of Period | $10.00 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.01 | |||||
Net realized and unrealized gain/(loss) | (0.32) | |||||
Total from Investment Operations | (0.31) | |||||
Less Dividends and Distributions: | ||||||
Dividends (from net investment income) | – | |||||
Distributions (from capital gains) | – | |||||
Total Dividends and Distributions | – | |||||
Net Asset Value, End of Period | $9.69 | |||||
Total Return* | (3.10)% | |||||
Net Assets, End of Period (in thousands) | $48 | |||||
Average Net Assets for the Period (in thousands) | $50 | |||||
Ratios to Average Net Assets: | ||||||
Ratio of Gross Expenses** | 13.44% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.07% | |||||
Ratio of Net Investment Income/(Loss)** | 5.04% | |||||
Portfolio Turnover Rate | 10% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from June 23, 2015 (inception date) through June 30, 2015. | |
(2) | Per share amounts are calculated based on average shares outstanding during the period. |
See Notes to Financial Statements.
Janus Investment Fund | 29
Table of Contents
Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
Janus Adaptive Global Allocation 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 is classified as nondiversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
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 evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued
30 | JUNE 30, 2015
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at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of June 30, 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 (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, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
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 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 June 30, 2015, the Fund had restricted cash in the amount of $515,000. 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
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period ended June 30, 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 exposure to changes in foreign currency exchange rates
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Notes to Financial Statements (continued)
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 purchase foreign currencies in the future at an agreed upon rate in order to decrease exposure to currency risk associated with foreign currency denominated securities held by the Fund.
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to decrease exposure to currency risk associated with foreign currency denominated securities held by the Fund.
The following table provides average ending monthly currency value amounts on purchased and sold forward currency contracts during the period ended June 30, 2015.
Fund | Purchased | Sold | ||||||||
Janus Adaptive Global Allocation Fund | $ | 1,195,981 | $ | 1,212,643 | ||||||
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 purchased interest rate futures to increase exposure to interest rate risk.
During the period, the Fund purchased futures on equity indices to increase exposure to equity risk.
The following table provides average ending monthly market value amounts on purchased futures contracts during the period ended June 30, 2015.
Fund | Purchased | |||||
Janus Adaptive Global Allocation Fund | $ | 17,242,958 | ||||
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
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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 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 on the primary market or exchange it trades. 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.
The Fund may enter into various types of credit default swap agreements, including OTC credit default swap agreements and index credit default swaps (“CDX”), for investment purposes and to add leverage to its portfolio. Credit default swaps are a specific kind of counterparty agreement that allow the transfer of third party credit risk from one party to the other. One party in the swap is a lender and faces credit risk from a third party, and the counterparty in the credit default swap agrees to insure this risk in exchange for regular periodic payments. Credit default swaps could result in losses if the Fund does not correctly evaluate the creditworthiness of the company or companies on which the credit default swap is based. Credit default swap agreements may involve greater risks than if the Fund had invested in the reference obligation directly since, in addition to risks relating to the reference obligation, credit default swaps are subject to illiquidity risk, counterparty risk, and credit risk. The Fund will generally incur a greater degree of risk when it sells a credit default swap than when it purchases a credit default swap. As a buyer of a credit default swap, the Fund may lose its investment and recover nothing should no credit event occur and the swap is held to its termination date. As seller of a credit default swap, if a credit event were to occur, the value of any deliverable obligation received by the Fund, coupled with the upfront or periodic payments previously received, may be less than what it pays to the buyer, resulting in a loss of value to the Fund.
If the Fund is the seller of credit protection against a particular security, the Fund would receive an up-front or periodic payment to compensate against potential credit events. As the seller in a credit default swap contract, the Fund would be required to pay the par value (the “notional value”) (or other agreed-upon value) of a referenced debt obligation to the counterparty in the event of a default by a third party, such as a U.S. or foreign corporate issuer, on
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Notes to Financial Statements (continued)
the debt obligation. In return, the Fund would receive from the counterparty a periodic stream of payments over the term of the contract provided that no event of default has occurred. If no default occurs, the Fund would keep the stream of payments and would have no payment obligations. As the seller, the Fund would effectively add leverage to its portfolio because, in addition to its total net assets, the Fund would be subject to investment exposure on the notional value of the swap. The maximum potential amount of future payments (undiscounted) that the Fund as a seller could be required to make in a credit default transaction would be the notional amount of the agreement.
As a buyer of credit protection, the Fund is entitled to receive the par (or other agreed-upon) value of a referenced debt obligation from the counterparty to the contract in the event of a default or other credit event by a third party, such as a U.S. or foreign issuer, on the debt obligation. In return, the Fund as buyer would pay to the counterparty a periodic stream of payments over the term of the contract provided that no credit event has occurred. If no credit event occurs, the Fund would have spent the stream of payments and potentially received no benefit from the contract.
The Fund may invest in CDXs. A CDX is a swap on an index of credit default swaps. CDXs allow an investor to manage credit risk or take a position on a basket of credit entities (such as credit default swaps or commercial mortgage-backed securities) in a more efficient manner than transacting in a single-name CDS. If a credit event occurs in one of the underlying companies, the protection is paid out via the delivery of the defaulted bond by the buyer of protection in return for a payment of notional value of the defaulted bond by the seller of protection or it may be settled through a cash settlement between the two parties. The underlying company is then removed from the index. If the Fund holds a long position in a CDX, the Fund would indirectly bear its proportionate share of any expenses paid by a CDX. By investing in CDXs, the Fund could be exposed to illiquidity risk, counterparty risk, and credit risk of the issuers of the underlying loan obligations and of the CDX markets. If there is a default by the CDX counterparty, the Fund will have contractual remedies pursuant to the agreements related to the transaction. CDXs also bear the risk that the Fund will not be able to meet its obligation to the counterparty.
During the period, the fund sold protection via the credit default swap market in order to gain credit risk exposure to individual corporates, countries and/or credit indices where gaining this exposure via the cash bond market was less attractive.
The following table provides average ending monthly market value amounts on credit default swaps which are long the reference asset during the period ended June 30, 2015.
Fund | Long | |||||
Janus Adaptive Global Allocation Fund | $ | 82,460 | ||||
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 June 30, 2015.
Fair Value of Derivative Instruments as of June 30, 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 | ||||||||
Janus Adaptive Global Allocation Fund | ||||||||||||
Credit Contracts | Variation margin receivable | $ | 4,682 | |||||||||
Currency Contracts | Forward currency contracts | 4,504 | Forward currency contracts | $ | 6,467 | |||||||
Equity Contracts | Variation margin receivable | 38,663 | Variation margin payable | 4,038 | ||||||||
Interest Rate Contracts | Variation margin receivable | 22,967 | Variation margin payable | 8,326 | ||||||||
Total | $ | 70,816 | $ | 18,831 | ||||||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended June 30, 2015.
The effect of Derivative Instruments on the Statement of Operations for the period ended June 30, 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 | Swap contracts | Total | ||||||||||||
Janus Adaptive Global Allocation Fund | ||||||||||||||||
Credit Contracts | $ | – | $ | – | $ | (2,311 | ) | $ | (2,311 | ) | ||||||
Currency Contracts | 2,145 | – | – | 2,145 | ||||||||||||
Equity Contracts | – | (727 | ) | – | (727 | ) | ||||||||||
Interest Rate Contracts | – | 14,053 | – | 14,053 | ||||||||||||
Total | $ | 2,145 | $ | 13,326 | $ | (2,311 | ) | $ | 13,160 | |||||||
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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 | Swap contracts | Total | ||||||||||||
Janus Adaptive Global Allocation Fund | ||||||||||||||||
Credit Contracts | $ | – | $ | – | $ | (5,963 | ) | $ | (5,963 | ) | ||||||
Currency Contracts | (1,963 | ) | – | – | (1,963 | ) | ||||||||||
Equity Contracts | – | (59,607 | ) | – | (59,607 | ) | ||||||||||
Interest Rate Contracts | – | 13,935 | – | 13,935 | ||||||||||||
Total | $ | (1,963 | ) | $ | (45,672 | ) | $ | (5,963 | ) | $ | (53,598 | ) | ||||
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
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Notes to Financial Statements (continued)
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. ETFs are traded on a national securities exchange at market prices that may vary from the net asset value of their underlying investments. Accordingly, there may be times when an ETF trades at a premium or discount. When the Fund invests in an ETF, in addition to directly bearing the expenses associated with its own operations, it will bear a pro rata portion of the ETF’s expenses. ETFs have certain inherent risks generally associated with investments in a portfolio of securities in which the ETF is invested, including the risk that the general level of stock prices may decline, thereby adversely affecting the value of each unit of the ETF. ETFs also involve the risk that an active trading market for an ETF’s shares may not develop or be maintained. Similarly, because the value of ETF shares depends on the demand in the market, the Portfolio may not be able to purchase or sell an ETF at the most optimal time, which could adversely affect the Portfolio’s performance. In addition, ETFs that track particular indices may be unable to match the performance of such underlying indices due to the temporary unavailability of certain index securities in the secondary market or other factors, such as discrepancies with respect to the weighting of securities. Because the Portfolio may invest in a broad range of ETFs, such risks may include, but are not limited to, leverage risk, foreign exposure risk, interest rate risk, and commodity-linked investments risk.
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 June 30, 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 | $ | 4,504 | $ | (4,504) | $ | – | $ | – | ||||||||||
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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 | ||||||||||||||
Bank of America | $ | 6,467 | $ | (4,504) | $ | – | $ | 1,963 | ||||||||||
(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.
Sovereign Debt
The Fund may invest in U.S. and foreign government debt securities (“sovereign debt”). Investments in U.S. sovereign debt are considered low risk. However, investments in non-U.S. sovereign debt can involve a high degree of risk, including the risk that the governmental entity that controls the repayment of sovereign debt may not be willing or able to repay the principal and/or to pay the interest on its sovereign debt in a timely manner. A sovereign debtor’s willingness or ability to satisfy its debt obligation may be affected by various factors, including its cash flow situation, the extent of its foreign currency reserves, the availability of foreign exchange when a payment is due, the relative size of its debt position in relation to its economy as a whole, the sovereign debtor’s policy toward international lenders, and local political constraints to which the governmental entity may be subject. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies, and other entities. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance, or repay principal or interest when due may result in the cancellation of third party commitments to lend funds to the sovereign debtor, which may further impair such debtor’s ability or willingness to timely service its debts. The Fund may be requested to participate in the rescheduling of such sovereign debt and to extend further loans to governmental entities, which may adversely affect the Fund’s holdings. In the event of default, there may be limited or no legal remedies for collecting sovereign debt and there may be no bankruptcy proceedings through which the Fund may collect all or part of the sovereign debt that a governmental entity has not repaid.
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 Adaptive Global | First $ | 2 Billion | 0.75 | |||||||
Allocation Fund | Next $ | 2 Billion | 0.72 | |||||||
Over $ | 4 Billion | 0.70 | ||||||||
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2016.
Expense | ||||||
Fund | Limit (%) | |||||
Janus Adaptive Global Allocation Fund | 0.82 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
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Notes to Financial Statements (continued)
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 June 30, 2015, Janus Capital reimbursed the Fund $137,462 of fees and expenses that are eligible for recoupment. As of June 30, 2015, the aggregate amount of recoupment that may potentially be made to Janus Capital is $137,462. The recoupment of such reimbursements expires June 23, 2018.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
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.
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
40 | JUNE 30, 2015
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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 $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended June 30, 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 June 30, 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 June 30, 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 $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the period ended June 30, 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 product compliant with Rule 2a-7 under the 1940 Act. There are no restrictions on the Fund’s ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Fund to Janus Cash Liquidity Fund LLC. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended June 30, 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 June 30, 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 June 30, 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 June 30, 2015.
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Notes to Financial Statements (continued)
As of June 30, 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 Adaptive Global Allocation Fund - Class A Shares | 100 | % | 1 | % | ||||||
Janus Adaptive Global Allocation Fund - Class C Shares | 100 | – | ||||||||
Janus Adaptive Global Allocation Fund - Class D Shares | 48 | – | ||||||||
Janus Adaptive Global Allocation Fund - Class I Shares | 100 | – | ||||||||
Janus Adaptive Global Allocation Fund - Class N Shares | 100 | 99 | ||||||||
Janus Adaptive Global Allocation Fund - Class S Shares | 100 | – | ||||||||
Janus Adaptive Global Allocation Fund - Class T Shares | 100 | – | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
5. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation, derivatives, and foreign currency contract adjustments. 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.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
Janus Adpative Global Allocation Fund | $ | 27,065 | $ | – | $ | – | $ | – | $ | (23,398) | $ | (80,803) | $ | (481,587) | |||||||||||||||||
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 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.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
Janus Adaptive Global Allocation Fund | $ | 85,059,736 | $ | 64,269 | $ | (545,856) | ||||||||
Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
Janus Adaptive Global Allocation Fund | $ | – | $ | 12,184 | $ | (12,184) | ||||||||
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6. | Capital Share Transactions |
Janus Adaptive | ||||||
Global Allocation Fund(1) | ||||||
For the period ended June 30 | 2015 | |||||
Transactions in Fund Shares – Class A Shares: | ||||||
Shares sold | 50,000 | |||||
Reinvested dividends and distributions | – | |||||
Shares repurchased | – | |||||
Net Increase/(Decrease) in Fund Shares | 50,000 | |||||
Shares Outstanding, Beginning of Period | – | |||||
Shares Outstanding, End of Period | 50,000 | |||||
Transactions in Fund Shares – Class C Shares: | ||||||
Shares sold | 2,500 | |||||
Reinvested dividends and distributions | – | |||||
Shares repurchased | – | |||||
Net Increase/(Decrease) in Fund Shares | 2,500 | |||||
Shares Outstanding, Beginning of Period | – | |||||
Shares Outstanding, End of Period | 2,500 | |||||
Transactions in Fund Shares – Class D Shares: | ||||||
Shares sold | 10,537 | |||||
Reinvested dividends and distributions | – | |||||
Shares repurchased | – | |||||
Net Increase/(Decrease) in Fund Shares | 10,537 | |||||
Shares Outstanding, Beginning of Period | – | |||||
Shares Outstanding, End of Period | 10,537 | |||||
Transactions in Fund Shares – Class I Shares: | ||||||
Shares sold | 5,000 | |||||
Reinvested dividends and distributions | – | |||||
Shares repurchased | – | |||||
Net Increase/(Decrease) in Fund Shares | 5,000 | |||||
Shares Outstanding, Beginning of Period | – | |||||
Shares Outstanding, End of Period | 5,000 | |||||
Transactions in Fund Shares – Class N Shares: | ||||||
Shares sold | 5,543,337 | |||||
Reinvested dividends and distributions | – | |||||
Shares repurchased | (4,245) | |||||
Net Increase/(Decrease) in Fund Shares | 5,539,092 | |||||
Shares Outstanding, Beginning of Period | – | |||||
Shares Outstanding, End of Period | 5,539,092 | |||||
Transactions in Fund Shares – Class S Shares: | ||||||
Shares sold | 2,500 | |||||
Reinvested dividends and distributions | – | |||||
Shares repurchased | – | |||||
Net Increase/(Decrease) in Fund Shares | 2,500 | |||||
Shares Outstanding, Beginning of Period | – | |||||
Shares Outstanding, End of Period | 2,500 | |||||
Transactions in Fund Shares – Class T Shares: | ||||||
Shares sold | 5,000 | |||||
Reinvested dividends and distributions | – | |||||
Shares repurchased | – | |||||
Net Increase/(Decrease) in Fund Shares | 5,000 | |||||
Shares Outstanding, Beginning of Period | – | |||||
Shares Outstanding, End of Period | 5,000 | |||||
(1) Period from June 23, 2015 (inception date) through June 30, 2015. |
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Notes to Financial Statements (continued)
7. | Purchases and Sales of Investment Securities |
For the period ended June 30, 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 Adaptive Global Allocation Fund | $ | 35,757,127 | $ | 282,420 | $ | 301,438 | $ | – | ||||||
8. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of Janus Adaptive Global Allocation Fund:
of Janus Adaptive Global Allocation Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Janus Adaptive Global Allocation Fund(one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, and the results of its operations, the changes in its net assets and the financial highlights for the period June 23, 2015 (commencement of operations) through June 30, 2015, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
Janus Investment Fund | 45
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (toll free); (ii) on the Fund’s website at janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding the Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through janus.com/proxyvoting and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Fund files its complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Fund’s Form N-Q: (i) is available on the SEC’s website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-0020 (toll free).
APPROVAL OF ADVISORY AGREEMENTS DURING THE PERIOD
The Trustees of Janus Investment Fund, each of whom serves as an “independent” Trustee (the “Trustees”), and none of whom is affiliated with Janus Capital, the investment adviser of Janus Adaptive Global Allocation Fund (the “New Fund”), met on March 11-12, 2015 to consider the proposed investment advisory agreement for the New Fund. In the course of their consideration of this agreement, the Trustees met in executive session and were advised by their independent legal counsel. In this regard, prior to the meeting and at earlier meetings, the Trustees received and reviewed extensive information provided by Janus Capital. The Trustees also had been provided and had considered various data and information in connection with their annual consideration of the investment advisory agreements in place with Janus Capital, including information provided by their independent fee consultant, and certain of that data was relevant to their consideration of the proposed agreement with Janus Capital for the New Fund. Based on their evaluation of the information available to them, the Trustees unanimously approved the investment advisory agreement for the New Fund for an initial term through February 2017, subject to earlier termination as provided for in the agreements.
In considering the agreements and reaching their conclusions, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent, and quality of the services to be provided by Janus Capital, taking into account the investment objective, strategy, and policies of the New Fund. In addition, the Trustees reviewed the resources and key personnel of Janus Capital, particularly noting those employees who will provide investment and risk management services to the New Fund. The Trustees also considered other services provided to the New Fund by Janus Capital, 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 New Fund, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the New Fund’s 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 New Fund and with applicable securities laws and regulations.
The Trustees concluded that the nature, extent, and quality of the services to be provided by Janus Capital were appropriate and consistent with the terms of the proposed investment advisory agreement. They also concluded that Janus Capital had sufficient personnel, with the appropriate education and experience, to serve the New Fund effectively and had demonstrated its ability to attract well-qualified personnel.
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of the New Fund in comparison to similar information for other comparable funds. The Trustees noted that they had previously reviewed management fees charged by Janus Capital to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital (for which Janus Capital provides only or primarily portfolio management services). The Trustees noted that Janus Capital would perform significant additional services for the New Fund relative to those other clients, including administration services, oversight of the Fund’s other service providers, trustee support, regulatory compliance and numerous other services, and that, in servicing the Fund, Janus Capital assumes many legal risks that it does not assume in servicing its other clients.
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The Trustees concluded that the advisory fee to be paid by the New Fund was reasonable in relation to the nature, extent and quality of the services to be provided, taking into account the fees charged by other advisers for managing comparable mutual funds with similar strategies, the fees Janus Capital charges to other clients, to the extent applicable, and the expense limitation agreement agreed to by Janus Capital.
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of the New Fund increase. They also noted that the proposed annual advisory fee rate, which includes potential breakpoints as assets increase, provides the opportunity for shareholders to benefit from any economies of scale that may be present. The Trustees also noted that the New Fund is part of the Janus funds complex, which means, among other things, that the New Fund shares directly in economies of scale through lower charges of third-party service providers that are based in part on the combined scale of all of the Janus funds.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates from their relationships with the New Fund. They recognized that two affiliates of Janus Capital would separately serve the New Fund as transfer agent and distributor, respectively. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates pursuant to the agreements and the fees to be paid by the New Fund therefor, the New Fund and Janus Capital may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital will benefit from the receipt of research products and services acquired through commissions paid on portfolio transactions of the New Fund and that the Fund will benefit from Janus Capital’s receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital They further concluded that the success of the New Fund could attract other business to Janus Capital or other Janus funds, and that the success of Janus Capital could enhance Janus Capital’s ability to serve the New Fund.
After full consideration of the above factors, as well as other factors, the Trustees, all of whom are independent Trustees, determined to approve the investment advisory agreement for the New Fund.
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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 June 30, 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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Designation Requirements (unaudited)
For federal income tax purposes, the Fund designated the following for the period ended June 30, 2015:
Dividends Received Deduction Percentage
Fund | ||||||||||
Janus Adaptive Global Allocation Fund | 100 | % | ||||||||
Qualified Dividend Income Percentage
Fund | ||||||||||
Janus Adaptive Global Allocation Fund | 100 | % | ||||||||
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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
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Trustees and Officers (unaudited) (continued)
OFFICERS
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
Ashwin Alankar 151 Detroit Street Denver, CO 80206 DOB: 1974 | Executive Vice President and Co-Portfolio Manager Janus Adaptive Global Allocation Fund | 6/15-Present | Senior Vice President and Head of Asset Allocation and Risk Management of Janus Capital and Portfolio Manager for other Janus accounts. Formerly, Co-Chief Investment Officer of AllianceBernstein’s Tail Risk Parity (2010-2014) and Partner and Portfolio Manager for Platinum Grove Asset Management (2003-2010). | |||
Enrique Chang 151 Detroit Street Denver, CO 80206 DOB: 1962 | Executive Vice President and Co-Portfolio Manager Janus Adaptive Global Allocation Fund | 6/15-Present | Chief Investment Officer Equities and Asset Allocation for Janus Capital and Portfolio Manager for other Janus accounts. During the five years prior to 2013, Mr. Chang was Chief Investment Officer and Executive Vice President for American Century Investments. | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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OFFICERS (continued)
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
Janus Investment Fund | 57
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Janus provides access to a wide range of investment disciplines.
Alternative
Janus alternative funds seek to deliver strong risk-adjusted returns over a full market cycle with lower correlation to equity markets than traditional investments.
Asset Allocation
Janus’ asset allocation funds utilize our fundamental, bottom-up research to balance risk over the long term. From fund options that meet investors’ risk tolerance and objectives to a method that incorporates non-traditional investment choices to seek non-correlated sources of risk and return, Janus’ asset allocation funds aim to allocate risk more effectively.
Fixed Income
Janus fixed income funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek capital preservation and liquidity with current income as a secondary objective.
Global & International
Janus global and international funds seek to leverage Janus’ research capabilities by taking advantage of inefficiencies in foreign markets, where accurate information and analytical insight are often at a premium.
Growth & Core
Janus growth funds focus on companies believed to be the leaders in their respective industries, with solid management teams, expanding market share, margins and efficiencies. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical funds seek to outperform their respective indices while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH (a Janus subsidiary), these funds use a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
For more information about our funds, contact your investment professional or go to janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus).
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-0815-94033 | 125-02-93059 08-15 |
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annual report
June 30, 2015
Janus Diversified Alternatives Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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Janus Diversified Alternatives Fund
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Janus Diversified Alternatives Fund (unaudited)
FUND SNAPSHOT We invest in a portfolio of traditional and nontraditional investable risk factors distilled from traditional asset classes, each a type of risk premium. We combine these independent risk premia into a liquid portfolio that seeks to deliver consistent, absolute returns with low correlation to stocks and bonds. | John Fujiwara co-portfolio manager | Andrew Weisman co-portfolio manager | Richard R Lindsey co-portfolio manager |
PERFORMANCE OVERVIEW
For the 12 months ended June 30, 2015, the Janus Diversified Alternatives Fund’s Class I Shares returned 2.32%, compared with a return of 1.86% for its primary benchmark, the Barclays U.S. Aggregate Bond Index, and 3.41% for its secondary benchmark, LIBOR + 3%.
MARKET ENVIRONMENT
The S&P 500 Index, a broad market measure, reached successive record highs during the period. However, the volatility that marked the end of 2014 carried over into the beginning of 2015. Earnings during the latter part of the period largely exceeded expectations, but enthusiasm was tempered as valuations were considered stretched compared to long-term averages. Stocks were also aided by favorable economic data. Negative sentiment emanating from Europe – centering on Greece’s ability to meet its debt obligations – impacted U.S. shares late in June. Previous high fliers were especially impacted, although major U.S. stock indices still ended the period up.
After falling below $50 a barrel, from over $100 a barrel at the beginning of the period, crude oil prices reset within a higher trading band. The dollar also stabilized after its recent strong period of appreciation. Both developments were highlighted in the Federal Reserve’s (Fed) June statement, which said that a potential increase of the Fed Funds rate during the latter part of the year would be “appropriate.” Fed Chairwoman Janet Yellen also reiterated that any move would be data dependent, thoughtful and measured.
The U.S. Treasury yield curve flattened during the period, although much of the gains of longer-dated securities were not sustained over the final few months. Long-dated Treasury yields had fallen through the end of 2014 as investors clamored for dollar-denominated assets. Both Europe and Japan have been taking steps to engineer even more accommodative monetary policy, making yields on Treasurys relatively attractive. Although a spring rebound in economic data caused Treasurys to sell off and the curve to steepen, global interest rate differentials and developments in China and Greece likely capped yields on the longer end of the curve.
Despite substantial improvement in financial positions on both corporate and sovereign balance sheets, emerging market equities fell during the period due, in part, to the looming strength of the U.S. dollar. After a strong winter, most major emerging market indices drifted lower during the second quarter of 2015, with the notable exception of China-related indices. These continued their months-long rally, until late in the period when authorities took steps to reduce the amount of leverage used in trading. Given the recent rise in this type of trading, gains were reversed in rapid order.
PERFORMANCE DISCUSSION
We invest in a portfolio of traditional and nontraditional investable risk-premium strategies derived from equity, fixed income, currency and commodity investments. By targeting a broad collection of statistically independent sources of return, we believe we are in a position to create a more robust portfolio that provides, over time, a generally more stable source of return with significantly less volatility than stocks and bonds.
Near the end of the period, the Fund implemented a change to its investment strategy to increase its targeted volatility level. This change is expected to result in increased leverage and increased volatility relative to the Fund’s primary benchmark, the Barclays U.S. Aggregate Bond Index, and therefore a higher risk profile.
The Fund outperformed its primary benchmark during the period. Most of our momentum strategies contributed to performance during the period as broader markets during the second half of 2014 positioned themselves in anticipation of the Fed raising rates and the European Central Bank (ECB) initiating quantitative easing (QE). Our currency momentum strategy benefited from a continued rally in the U.S. dollar against a basket of foreign currencies. U.S. dollar strength was mostly fueled by central bank divergence, in our view. The Fed signaled that they would be cautious with monetary tightening, but they
Janus Investment Fund | 1
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Janus Diversified Alternatives Fund (unaudited)
also indicated that they would likely initiate a rate hike by the end of 2015. In contrast, many central banks around the world are easing their monetary policies to combat disinflation and boost growth.
Our rates momentum strategy was also a leading contributor to returns. This strategy looks to capture persistence in the movement of interest rates generally associated with the gradual but deliberate implementation of global central bank policy.
The commodity roll yield strategy, which seeks to generate return by providing liquidity to the most “crowded” section of the commodity futures curve, was also a contributor to returns. It is typically short the most active front-month contract and long farther-dated tenors. It benefited during the first half of the period amid average demand for natural gas and a strong harvest. The continued oversupply of crude oil also aided performance as it boosted storage costs.
The strategy which detracted the most from returns was our equity value strategy. This strategy looks to capture the potential returns associated with holding value equities, and is short growth equities. Due to the high number of energy-related, value equity stocks, this strategy suffered as crude oil prices plummeted through the end of 2014.
The currency carry strategy also detracted from returns amid crosscurrents in the currency markets during the period. This strategy looks to generate returns through the short-term yield differentials between various currencies. The Australian dollar and New Zealand dollar, two of the highest-yielding currencies, were on the verge of tightening, but then reversed their trends as the countries’ central banks eased monetary policy.
DERIVATIVES
The Fund makes extensive use of derivatives because they are generally the most efficient and liquid way to gain our desired exposures. Swaps are used to take exposures in equity, fixed income and commodity indices. Futures are used to take exposures in commodities, currencies and long-end fixed income markets. Forwards are employed to take exposures in foreign currencies, generally one week in length. In aggregate, these positions contributed to performance.
Please see “Notes to Consolidated Financial Statements” for a discussion of derivatives used by the Fund.
OUTLOOK
By targeting a broad collection of statistically independent sources of return, we believe we are in a position to create a more robust portfolio that provides, over time, a generally more stable source of return with significantly less volatility than stocks and bonds.
We do not believe in forecasting a market’s particular direction. However, we are mindful of increased volatility in financial markets, and therefore assess and adjust our risk premia allocations as necessary on a monthly basis, at a minimum.
In light of the increased price fluctuations evidenced near the end of the period, our models have decreased exposure within the risk premia strategies most affected by the heightened market volatility. Such strategies include equity-emerging and equity-value. Furthermore, our weighting to the rates momentum strategy has decreased as crosscurrents in the markets have led to extreme rate volatility. Allocations to risk premia strategies that have been historically less volatile have increased.
Thank you for investing in Janus Diversified Alternatives Fund.
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(unaudited)
Janus Diversified Alternatives Fund At A Glance
Asset Allocation
As of June 30, 2015
The allocations shown reflect absolute notional exposures to various
asset classes. The allocations are calculated net of cash segregated
for future obligations.
asset classes. The allocations are calculated net of cash segregated
for future obligations.
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Janus Diversified Alternatives Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended June 30, 2015 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||
One | Since | Total Annual Fund | Net Annual Fund | ||||||
Year | Inception* | Operating Expenses | Operating Expenses | ||||||
Janus Diversified Alternatives Fund – Class A Shares | |||||||||
NAV | 2.22% | 0.23% | 1.50% | 1.50% | |||||
MOP | –3.65% | –2.11% | |||||||
Janus Diversified Alternatives Fund – Class C Shares | |||||||||
NAV | 1.31% | –0.33% | 2.26% | 2.25% | |||||
CDSC | 0.31% | –0.33% | |||||||
Janus Diversified Alternatives Fund – Class D Shares(1) | 2.32% | 0.31% | 1.42% | 1.41% | |||||
Janus Diversified Alternatives Fund – Class I Shares | 2.32% | 0.39% | 1.26% | 1.25% | |||||
Janus Diversified Alternatives Fund – Class N Shares | 2.52% | 0.47% | 1.25% | 1.25% | |||||
Janus Diversified Alternatives Fund – Class S Shares | 1.82% | –0.01% | 1.75% | 1.75% | |||||
Janus Diversified Alternatives Fund – Class T Shares | 2.12% | 0.23% | 1.51% | 1.50% | |||||
Barclays U.S. Aggregate Bond Index | 1.86% | 1.43% | |||||||
London Interbank Offered Rate (LIBOR) + 3% | 3.41% | 3.67%** | |||||||
Morningstar Quartile – Class I Shares | 2nd | 4th | |||||||
Morningstar Ranking – based on total returns for Multialternative Funds | 128/405 | 231/272 | |||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
See important disclosures on the next page.
4 | JUNE 30, 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.
Investments in commodities, commodity-linked notes, securities derivatives, futures, foreign securities, short sales and investments through a nonregistered subsidiary provide exposure to certain special risks, including greater volatility and loss of interest and principal, and may not be appropriate for all investors. Commodities are speculative and may fluctuate widely based on a variety of factors, including market movements, economic events and supply and demand disruptions. Derivatives involve risks in addition to the risks of the underlying securities, including gains or losses which, as a result of leverage, can be substantially greater than the derivatives’ original cost. Short sales are speculative transactions with potentially unlimited losses, and the use of leverage can magnify the effect of losses.
Janus Capital has limited experience managing a risk premia investment strategy. There is a risk that the Fund’s investments will correlate with stocks and bonds to a greater degree than anticipated, and the investment process may not achieve the desired results. The Fund may underperform during up markets and be negatively affected in down markets. Diversification does not assure a profit or eliminate the risk of loss.
Holding a meaningful portion of assets in cash or cash equivalents may negatively affect performance.
Until the earlier of three years from inception or the Fund’s assets meeting the first fee breakpoint, Janus Capital may recover expenses previously waived or reimbursed if the expense ratio falls below certain limits.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2015 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Consolidated Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
* | The Fund’s inception date – December 28, 2012 | |
** | The London Interbank Offered Rate (LIBOR) + 3% since inception returns are calculated from December 31, 2012. | |
(1) | Closed to certain new investors. |
Janus Investment Fund | 5
Table of Contents
Janus Diversified Alternatives Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 990.10 | $ | 7.50 | $ | 1,000.00 | $ | 1,017.26 | $ | 7.60 | 1.52% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 985.00 | $ | 11.07 | $ | 1,000.00 | $ | 1,013.64 | $ | 11.23 | 2.25% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 990.10 | $ | 6.91 | $ | 1,000.00 | $ | 1,017.85 | $ | 7.00 | 1.40% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 990.10 | $ | 6.22 | $ | 1,000.00 | $ | 1,018.55 | $ | 6.31 | 1.26% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 991.10 | $ | 6.12 | $ | 1,000.00 | $ | 1,018.65 | $ | 6.21 | 1.24% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 988.00 | $ | 8.58 | $ | 1,000.00 | $ | 1,016.17 | $ | 8.70 | 1.74% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 989.10 | $ | 7.40 | $ | 1,000.00 | $ | 1,017.36 | $ | 7.50 | 1.50% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Consolidated Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
6 | JUNE 30, 2015
Table of Contents
Janus Diversified Alternatives Fund
Consolidated Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Investment Companies – 17.9% | ||||||||||
Money Markets – 17.9% | ||||||||||
11,849,982 | Janus Cash Liquidity Fund LLC, 0.1291%(a),°°,£ (cost $11,849,982) | $ | 11,849,982 | |||||||
Total Investments (total cost $11,849,982) – 17.9% | 11,849,982 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 82.1% | 54,290,872 | |||||||||
Net Assets – 100% | $ | 66,140,854 | ||||||||
Schedule of Forward Currency Contracts, Open
Currency Units | Unrealized | |||||||||||
Sold/ | Currency | Appreciation/ | ||||||||||
Counterparty/Currency and Settlement Date | (Purchased) | Value | (Depreciation) | |||||||||
HSBC Securities (USA), Inc.: | ||||||||||||
Australian Dollar 7/10/15 | (869,000) | $ | (670,001) | $ | 1,007 | |||||||
British Pound 7/10/15 | (271,000) | (425,712) | (804) | |||||||||
Canadian Dollar 7/10/15 | 278,000 | 222,599 | (103) | |||||||||
Euro 7/10/15 | 757,000 | 843,927 | 49 | |||||||||
Japanese Yen 7/10/15 | 143,500,000 | 1,172,804 | 652 | |||||||||
New Zealand Dollar 7/10/15 | (1,081,000) | (731,677) | (113) | |||||||||
Norwegian Krone 7/10/15 | (1,610,000) | (205,399) | 188 | |||||||||
Swedish Krona 7/10/15 | (540,000) | (65,186) | (10) | |||||||||
Swiss Franc 7/10/15 | (60,000) | (64,215) | (55) | |||||||||
Total | $ | 77,140 | $ | 811 | ||||||||
Schedule of Futures – Long
Unrealized | ||||
Appreciation/ | ||||
Description | (Depreciation) | |||
Copper(a) expires December 2015 5 contracts principal amount $340,360 value $327,813 | $ | (12,547) | ||
Cotton(a) expires March 2016 15 contracts principal amount $484,083 value $504,675 | 20,592 | |||
Gold(a) expires October 2015 2 contracts principal amount $237,350 value $234,560 | (2,790) | |||
S&P 500® E-mini expires September 2015 78 contracts principal amount $8,156,311 value $8,012,160 | (144,151) | |||
Silver(a) expires December 2015 4 contracts principal amount $337,705 value $312,720 | (24,985) | |||
Soybean(a) expires May 2016 11 contracts principal amount $505,809 value $557,425 | 51,616 | |||
Wheat(a) expires March 2016 17 contracts principal amount $533,951 value $533,800 | (151) | |||
Total Futures – Long | $ | (112,416) | ||
Schedule of Futures – Short
Unrealized | ||||
Appreciation/ | ||||
Description | (Depreciation) | |||
10-Year U.S. Treasury Note expires September 2015 33 contracts principal amount $4,187,882 value $4,163,672 | $ | 24,210 | ||
Brent Crude(a) expires November 2015 11 contracts principal amount $717,315 value $717,420 | (105) | |||
Coffee ’C’(a) expires December 2015 14 contracts principal amount $733,760 value $714,000 | 19,760 | |||
Corn(a) expires December 2015 36 contracts principal amount $724,050 value $776,700 | (52,650) | |||
Euro-Bund expires September 2015 33 contracts principal amount $5,557,493 value $5,591,350 | (33,857) | |||
Live Cattle(a) expires October 2015 11 contracts principal amount $677,975 value $663,080 | 14,895 |
See Notes to Consolidated Schedule of Investments and Other Information and Notes to Consolidated Financial Statements.
Janus Investment Fund | 7
Table of Contents
Janus Diversified Alternatives Fund
Consolidated Schedule of Investments
As of June 30, 2015
Unrealized | ||||
Appreciation/ | ||||
Description | (Depreciation) | |||
Soybean(a) expires January 2016 4 contracts principal amount $186,313 value $208,450 | $ | (22,137) | ||
Sugar #11 (World)(a) expires March 2016 48 contracts principal amount $744,035 value $739,738 | 4,297 | |||
U.S. Dollar Index expires September 2015 45 contracts principal amount $4,299,412 value $4,304,745 | (5,333) | |||
WTI Crude(a) expires September 2015 13 contracts principal amount $777,672 value $777,790 | (118) | |||
Total Futures – Short | $ | (51,038) | ||
Total Return Swaps outstanding at June 30, 2015
Unrealized | |||||||||||||
Return Paid | Return Received | Notional | Appreciation/ | ||||||||||
Counterparty | by the Fund | by the Fund | Termination Date | Amount | (Depreciation) | ||||||||
Barclays Capital, Inc. | 3 month USD LIBOR plus 20 basis points | Barclays U.S. Credit RBI Series-1 Index | 8/1/15 | $ | 14,400,000 | $ | (11,770) | ||||||
BNP Paribas | 1 month USD LIBOR minus 10 basis points | Russell 2000® Total Return Index | 8/5/15 | 8,300,000 | (4) | ||||||||
BNP Paribas | Russell 1000® Total Return Index | 1 month USD LIBOR plus 20 basis points | 8/5/15 | (8,300,000) | 2 | ||||||||
BNP Paribas(a) | If negative, a long/short basket of commodity indexes minus 22 basis points | If positive, a long/short basket of commodity indexes minus 22 basis points | 7/31/15 | 32,900,000 | (8) | ||||||||
Goldman Sachs International | 1 month USD LIBOR plus 38 basis points | MSCI Daily Total Return Net Emerging Markets | 8/6/15 | 7,999,795 | 437 | ||||||||
Goldman Sachs International | 1 month USD LIBOR plus 45 basis points | S&P 500® Citigroup Pure Value | 8/6/15 | 10,597,439 | (14) | ||||||||
Goldman Sachs International | MSCI Daily Total Return Gross World USD | 1 month USD LIBOR plus 35 basis points | 8/6/15 | (8,001,610) | 12 | ||||||||
Goldman Sachs International | S&P 500® Citigroup Pure Growth | 1 month USD LIBOR plus 5 basis points | 8/6/15 | (10,601,853) | (13) | ||||||||
Total | $ | (11,358) | |||||||||||
See Notes to Consolidated Schedule of Investments and Other Information and Notes to Consolidated Financial Statements.
8 | JUNE 30, 2015
Table of Contents
Notes to Consolidated Schedule of Investments and Other Information
Barclays U.S. Aggregate Bond Index | A broad-based measure of the investment grade, US dollar-denominated, fixed-rate taxable bond market. | |
London Interbank Offered Rate (LIBOR) | A daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the London wholesale money market (or interbank market). | |
S&P 500® Index | Measures broad U.S. equity performance. | |
LLC | Limited Liability Company |
(a) | All or a portion of this security is owned by Janus Diversified Alternatives Subsidiary, Ltd. See Note 1 in Notes to Consolidated Financial Statements. |
°° | Rate shown is the 7-day yield as of June 30, 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 year ended June 30, 2015. Unless otherwise indicated, all information in the table is for the year ended June 30, 2015. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 6/30/15 | Gain/(Loss) | Income | at 6/30/15 | |||||||||||||||
Janus Diversified Alternatives Fund | |||||||||||||||||||||
Janus Cash Liquidity Fund LLC | 10,255,772 | 45,548,137 | (43,953,927) | 11,849,982 | $ | – | $ | 5,812 | $ | 11,849,982 | |||||||||||
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 June 30, 2015. See Notes to Consolidated Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Janus Diversified Alternatives Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Investment Companies | $ | – | $ | 11,849,982 | $ | – | |||||
Total Investments in Securities | $ | – | $ | 11,849,982 | $ | – | |||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 1,896 | $ | – | |||||
Outstanding Swap Contracts, at Value | – | 451 | – | ||||||||
Variation Margin Receivable | 63,461 | – | – | ||||||||
Total Assets | $ | 63,461 | $ | 11,852,329 | $ | – | |||||
Liabilities | |||||||||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 1,085 | $ | – | |||||
Outstanding Swap Contracts, at Value | – | 11,809 | – | ||||||||
Variation Margin Payable | 263,878 | – | – | ||||||||
Total Liabilities | $ | 263,878 | $ | 12,894 | $ | – | |||||
(a) | Other financial instruments include forward currency, futures, written options, and swap contracts. Forward currency contracts are reported at their unrealized appreciation/(depreciation) at measurement date, which represents the change in the contract’s value from trade date. Futures are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date. Options and swap contracts are reported at their market value at measurement date. |
Janus Investment Fund | 9
Table of Contents
Consolidated Statement of Assets and Liabilities
Janus Diversified | ||||
As of June 30, 2015 | Alternatives Fund | |||
Assets: | ||||
Investments, at cost | $ | 11,849,982 | ||
Affiliated investments, at value | 11,849,982 | |||
Restricted cash (Note 1) | 54,760,000 | |||
Forward currency contracts | 1,896 | |||
Closed foreign currency contracts | 27,134 | |||
Outstanding swap contracts, at value | 451 | |||
Variation margin receivable | 63,461 | |||
Non-interested Trustees’ deferred compensation | 1,321 | |||
Receivables: | ||||
Fund shares sold | 97,507 | |||
Dividends from affiliates | 1,220 | |||
Foreign dividend tax reclaim | 2,609 | |||
Dividends and interest on swap contracts | 13,935 | |||
Other assets | 118 | |||
Total Assets | 66,819,634 | |||
Liabilities: | ||||
Due to custodian | 18,001 | |||
Forward currency contracts | 1,085 | |||
Closed foreign currency contracts | 40,296 | |||
Outstanding swap contracts, at value | 11,809 | |||
Variation margin payable | 263,878 | |||
Payables: | ||||
Investments purchased | 177,916 | |||
Fund shares repurchased | 7,289 | |||
Dividends and interest on swap contracts | 30,250 | |||
Advisory fees | 58,467 | |||
Fund administration fees | 520 | |||
Transfer agent fees and expenses | 9,741 | |||
12b-1 Distribution and shareholder servicing fees | 2,309 | |||
Non-interested Trustees’ fees and expenses | 410 | |||
Non-interested Trustees’ deferred compensation fees | 1,321 | |||
Accrued expenses and other payables | 55,488 | |||
Total Liabilities | 678,780 | |||
Net Assets | $ | 66,140,854 |
See Notes to Consolidated Financial Statements.
10 | JUNE 30, 2015
Table of Contents
Janus Diversified | ||||
As of June 30, 2015 | Alternatives Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 65,855,559 | ||
Undistributed net investment income/(loss) | (307,352) | |||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | 766,442 | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (173,795) | |||
Total Net Assets | $ | 66,140,854 | ||
Net Assets - Class A Shares | $ | 2,740,073 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 274,680 | |||
Net Asset Value Per Share(1) | $ | 9.98 | ||
Maximum Offering Price Per Share(2) | $ | 10.59 | ||
Net Assets - Class C Shares | $ | 1,709,372 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 173,670 | |||
Net Asset Value Per Share(1) | $ | 9.84 | ||
Net Assets - Class D Shares | $ | 3,060,033 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 306,041 | |||
Net Asset Value Per Share | $ | 10.00 | ||
Net Assets - Class I Shares | $ | 2,265,137 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 225,948 | |||
Net Asset Value Per Share | $ | 10.02 | ||
Net Assets - Class N Shares | $ | 52,478,496 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,228,746 | |||
Net Asset Value Per Share | $ | 10.04 | ||
Net Assets - Class S Shares | $ | 1,370,958 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 138,231 | |||
Net Asset Value Per Share | $ | 9.92 | ||
Net Assets - Class T Shares | $ | 2,516,785 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 252,277 | |||
Net Asset Value Per Share | $ | 9.98 |
(1) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(2) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Consolidated Financial Statements.
Janus Investment Fund | 11
Table of Contents
Consolidated Statement of Operations
Janus Diversified | ||||
For the year ended June 30, 2015 | Alternatives Fund | |||
Investment Income: | ||||
Dividends from affiliates | $ | 5,812 | ||
Foreign tax withheld | (182) | |||
Total Investment Income | 5,630 | |||
Expenses: | ||||
Advisory fees | 836,573 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 5,120 | |||
Class C Shares | 17,520 | |||
Class S Shares | 3,945 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 3,937 | |||
Class S Shares | 3,945 | |||
Class T Shares | 5,406 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 181 | |||
Class I Shares | 254 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 252 | |||
Class C Shares | 246 | |||
Class D Shares | 2,032 | |||
Class I Shares | 102 | |||
Class N Shares | 117 | |||
Class T Shares | 153 | |||
Shareholder reports expense | 40,166 | |||
Registration fees | 96,002 | |||
Custodian fees | 11,642 | |||
Professional fees | 64,365 | |||
Non-interested Trustees’ fees and expenses | 1,101 | |||
Fund administration fees | 6,129 | |||
Other expenses | 33,551 | |||
Total Expenses | 1,132,739 | |||
Less: Excess Expense Reimbursement | (241,315) | |||
Net Expenses | 891,424 | |||
Net Investment Income/(Loss) | (885,794) | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | (350,923) | |||
Futures contracts | 2,736,647 | |||
Swap contracts | 502,206 | |||
Total Net Realized Gain/(Loss) on Investments | 2,887,930 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (2,028) | |||
Futures contracts | (479,437) | |||
Swap contracts | (9,323) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (490,788) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 1,511,348 |
See Notes to Financial Statements.
12 | JUNE 30, 2015
Table of Contents
Consolidated Statements of Changes in Net Assets
Janus Diversified | ||||||||
Alternatives Fund | ||||||||
For each year ended June 30 | 2015 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | (885,794) | $ | (995,203) | ||||
Net realized gain/(loss) on investments | 2,887,930 | 1,720,858 | ||||||
Change in unrealized net appreciation/depreciation | (490,788) | (411,372) | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 1,511,348 | 314,283 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | (12,896) | – | ||||||
Class C Shares | (12,191) | – | ||||||
Class D Shares | (22,821) | – | ||||||
Class I Shares | (17,640) | – | ||||||
Class N Shares | (426,554) | – | ||||||
Class S Shares | (10,853) | – | ||||||
Class T Shares | (12,073) | – | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (515,028) | – | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 1,316,620 | 531,192 | ||||||
Class C Shares | 356,953 | 5,000 | ||||||
Class D Shares | 1,184,339 | 957,155 | ||||||
Class I Shares | 13,028 | 223,471 | ||||||
Class N Shares | 3,740,748 | 4,157,552 | ||||||
Class T Shares | 1,217,260 | 72,156 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 12,896 | – | ||||||
Class C Shares | 12,191 | – | ||||||
Class D Shares | 22,645 | – | ||||||
Class I Shares | 17,640 | – | ||||||
Class N Shares | 426,554 | – | ||||||
Class S Shares | 10,853 | – | ||||||
Class T Shares | 12,014 | – | ||||||
Shares Repurchased | ||||||||
Class A Shares | (2,636,145) | (14,965) | ||||||
Class C Shares | (2,178,227) | (62,605) | ||||||
Class D Shares | (4,353,750) | (817,979) | ||||||
Class I Shares | (3,528,571) | (999,994) | ||||||
Class N Shares | (9,795,916) | (5,109,669) | ||||||
Class S Shares | (2,160,400) | – | ||||||
Class T Shares | (2,518,349) | (53,278) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (18,827,617) | (1,111,964) | ||||||
Net Increase/(Decrease) in Net Assets | (17,831,297) | (797,681) | ||||||
Net Assets: | ||||||||
Beginning of period | 83,972,151 | 84,769,832 | ||||||
End of period | $ | 66,140,854 | $ | 83,972,151 | ||||
Undistributed Net Investment Income/(Loss) | $ | (307,352) | $ | (768,323) |
See Notes to Consolidated Financial Statements.
Janus Investment Fund | 13
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Consolidated Financial Highlights
Class A Shares
Janus Diversified | ||||||||||||||
Alternatives Fund | ||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013(1) | |||||||||||
Net Asset Value, Beginning of Period | $9.84 | $9.82 | $10.00 | |||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||
Net investment income/(loss) | (0.15)(2) | (0.13)(2) | (0.10) | |||||||||||
Net realized and unrealized gain/(loss) | 0.37 | 0.15 | (0.08) | |||||||||||
Total from Investment Operations | 0.22 | 0.02 | (0.18) | |||||||||||
Less Dividends and Distributions: | ||||||||||||||
Dividends (from net investment income) | – | – | – | |||||||||||
Distributions (from capital gains) | (0.08) | – | – | |||||||||||
Total Dividends and Distributions | (0.08) | – | – | |||||||||||
Net Asset Value, End of Period | $9.98 | $9.84 | $9.82 | |||||||||||
Total Return* | 2.22% | 0.20% | (1.80)% | |||||||||||
Net Assets, End of Period (in thousands) | $2,740 | $4,055 | $3,523 | |||||||||||
Average Net Assets for the Period (in thousands) | $2,048 | $3,752 | $3,557 | |||||||||||
Ratios to Average Net Assets: | ||||||||||||||
Ratio of Gross Expenses** | 1.84% | 1.70% | 3.05% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.52% | 1.46% | 1.52% | |||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets** | (1.51)% | (1.34)% | (1.36)% | |||||||||||
Portfolio Turnover Rate | 0% | 59% | 38% |
Class C Shares
Janus Diversified | ||||||||||||||
Alternatives Fund | ||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013(1) | |||||||||||
Net Asset Value, Beginning of Period | $9.79 | $9.78 | $10.00 | |||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||
Net investment income/(loss) | (0.23)(2) | (0.15)(2) | (0.14) | |||||||||||
Net realized and unrealized gain/(loss) | 0.36 | 0.16 | (0.08) | |||||||||||
Total from Investment Operations | 0.13 | 0.01 | (0.22) | |||||||||||
Less Dividends and Distributions: | ||||||||||||||
Dividends (from net investment income) | – | – | – | |||||||||||
Distributions (from capital gains) | (0.08) | – | – | |||||||||||
Total Dividends and Distributions | (0.08) | – | – | |||||||||||
Net Asset Value, End of Period | $9.84 | $9.79 | $9.78 | |||||||||||
Total Return* | 1.31% | 0.10% | (2.20)% | |||||||||||
Net Assets, End of Period (in thousands) | $1,709 | $3,516 | $3,566 | |||||||||||
Average Net Assets for the Period (in thousands) | $1,752 | $3,551 | $3,578 | |||||||||||
Ratios to Average Net Assets: | ||||||||||||||
Ratio of Gross Expenses** | 2.59% | 1.89% | 3.92% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 2.26% | 1.64% | 2.27% | |||||||||||
Ratio of Net Investment Income/(Loss)** | (2.26)% | (1.52)% | (2.11)% | |||||||||||
Portfolio Turnover Rate | 0% | 59% | 38% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from December 28, 2012 (inception date) through June 30, 2013. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Consolidated Financial Statements.
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Class D Shares
Janus Diversified | ||||||||||||||
Alternatives Fund | ||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013(1) | |||||||||||
Net Asset Value, Beginning of Period | $9.85 | $9.82 | $10.00 | |||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||
Net investment income/(loss) | (0.14)(2) | (0.13)(2) | (0.08) | |||||||||||
Net realized and unrealized gain/(loss) | 0.37 | 0.16 | (0.10) | |||||||||||
Total from Investment Operations | 0.23 | 0.03 | (0.18) | |||||||||||
Less Dividends and Distributions: | ||||||||||||||
Dividends (from net investment income) | – | – | – | |||||||||||
Distributions (from capital gains) | (0.08) | – | – | |||||||||||
Total Dividends and Distributions | (0.08) | – | – | |||||||||||
Net Asset Value, End of Period | $10.00 | $9.85 | $9.82 | |||||||||||
Total Return* | 2.32% | 0.31% | (1.80)% | |||||||||||
Net Assets, End of Period (in thousands) | $3,060 | $6,170 | $6,008 | |||||||||||
Average Net Assets for the Period (in thousands) | $3,281 | $5,964 | $4,995 | |||||||||||
Ratios to Average Net Assets: | ||||||||||||||
Ratio of Gross Expenses** | 1.96% | 1.66% | 3.20% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.43% | 1.41% | 1.39% | |||||||||||
Ratio of Net Investment Income/(Loss)** | (1.42)% | (1.28)% | (1.23)% | |||||||||||
Portfolio Turnover Rate | 0% | 59% | 38% |
Class I Shares
Janus Diversified | ||||||||||||||
Alternatives Fund | ||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013(1) | |||||||||||
Net Asset Value, Beginning of Period | $9.87 | $9.83 | $10.00 | |||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||
Net investment income/(loss) | (0.13)(2) | (0.11)(2) | (0.08) | |||||||||||
Net realized and unrealized gain/(loss) | 0.36 | 0.15 | (0.09) | |||||||||||
Total from Investment Operations | 0.23 | 0.04 | (0.17) | |||||||||||
Less Dividends and Distributions: | ||||||||||||||
Dividends (from net investment income) | – | – | – | |||||||||||
Distributions (from capital gains) | (0.08) | – | – | |||||||||||
Total Dividends and Distributions | (0.08) | – | – | |||||||||||
Net Asset Value, End of Period | $10.02 | $9.87 | $9.83 | |||||||||||
Total Return* | 2.32% | 0.41% | (1.70)% | |||||||||||
Net Assets, End of Period (in thousands) | $2,265 | $5,727 | $6,464 | |||||||||||
Average Net Assets for the Period (in thousands) | $2,586 | $6,201 | $5,751 | |||||||||||
Ratios to Average Net Assets: | ||||||||||||||
Ratio of Gross Expenses** | 1.59% | 1.50% | 2.58% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.26% | 1.25% | 1.27% | |||||||||||
Ratio of Net Investment Income/(Loss)** | (1.26)% | (1.13)% | (1.10)% | |||||||||||
Portfolio Turnover Rate | 0% | 59% | 38% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from December 28, 2012 (inception date) through June 30, 2013. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Consolidated Financial Statements.
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Consolidated Financial Highlights (continued)
Class N Shares
Janus Diversified | ||||||||||||||
Alternatives Fund | ||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013(1) | |||||||||||
Net Asset Value, Beginning of Period | $9.87 | $9.83 | $10.00 | |||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||
Net investment income/(loss) | (0.13)(2) | (0.11)(2) | (0.05) | |||||||||||
Net realized and unrealized gain/(loss) | 0.38 | 0.15 | (0.12) | |||||||||||
Total from Investment Operations | 0.25 | 0.04 | (0.17) | |||||||||||
Less Dividends and Distributions: | ||||||||||||||
Dividends (from net investment income) | – | – | – | |||||||||||
Distributions (from capital gains) | (0.08) | – | – | |||||||||||
Total Dividends and Distributions | (0.08) | – | – | |||||||||||
Net Asset Value, End of Period | $10.04 | $9.87 | $9.83 | |||||||||||
Total Return* | 2.52% | 0.41% | (1.70)% | |||||||||||
Net Assets, End of Period (in thousands) | $52,478 | $57,190 | $57,935 | |||||||||||
Average Net Assets for the Period (in thousands) | $54,416 | $57,130 | $30,839 | |||||||||||
Ratios to Average Net Assets: | ||||||||||||||
Ratio of Gross Expenses** | 1.60% | 1.49% | 1.84% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.25% | 1.25% | 1.25% | |||||||||||
Ratio of Net Investment Income/(Loss)** | (1.24)% | (1.13)% | (1.06)% | |||||||||||
Portfolio Turnover Rate | 0% | 59% | 38% |
Class S Shares
Janus Diversified | ||||||||||||||
Alternatives Fund | ||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013(1) | |||||||||||
Net Asset Value, Beginning of Period | $9.82 | $9.81 | $10.00 | |||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||
Net investment income/(loss) | (0.18)(2) | (0.14)(2) | (0.11) | |||||||||||
Net realized and unrealized gain/(loss) | 0.36 | 0.15 | (0.08) | |||||||||||
Total from Investment Operations | 0.18 | 0.01 | (0.19) | |||||||||||
Less Dividends and Distributions: | ||||||||||||||
Dividends (from net investment income) | – | – | – | |||||||||||
Distributions (from capital gains) | (0.08) | – | – | |||||||||||
Total Dividends and Distributions | (0.08) | – | – | |||||||||||
Net Asset Value, End of Period | $9.92 | $9.82 | $9.81 | |||||||||||
Total Return* | 1.82% | 0.10% | (1.90)% | |||||||||||
Net Assets, End of Period (in thousands) | $1,371 | $3,506 | $3,502 | |||||||||||
Average Net Assets for the Period (in thousands) | $1,578 | $3,492 | $3,548 | |||||||||||
Ratios to Average Net Assets: | ||||||||||||||
Ratio of Gross Expenses** | 2.07% | 1.95% | 3.19% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.75% | 1.58% | 1.76% | |||||||||||
Ratio of Net Investment Income/(Loss)** | (1.74)% | (1.46)% | (1.60)% | |||||||||||
Portfolio Turnover Rate | 0% | 59% | 38% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from December 28, 2012 (inception date) through June 30, 2013. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Consolidated Financial Statements.
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Class T Shares
Janus Diversified | ||||||||||||||
Alternatives Fund | ||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013(1) | |||||||||||
Net Asset Value, Beginning of Period | $9.85 | $9.82 | $10.00 | |||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||
Net investment income/(loss) | (0.15)(2) | (0.13)(2) | (0.11) | |||||||||||
Net realized and unrealized gain/(loss) | 0.36 | 0.16 | (0.07) | |||||||||||
Total from Investment Operations | 0.21 | 0.03 | (0.18) | |||||||||||
Less Dividends and Distributions: | ||||||||||||||
Dividends (from net investment income) | – | – | – | |||||||||||
Distributions (from capital gains) | (0.08) | – | – | |||||||||||
Total Dividends and Distributions | (0.08) | – | – | |||||||||||
Net Asset Value, End of Period | $9.98 | $9.85 | $9.82 | |||||||||||
Total Return* | 2.12% | 0.31% | (1.80)% | |||||||||||
Net Assets, End of Period (in thousands) | $2,517 | $3,809 | $3,772 | |||||||||||
Average Net Assets for the Period (in thousands) | $2,162 | $3,773 | $4,004 | |||||||||||
Ratios to Average Net Assets: | ||||||||||||||
Ratio of Gross Expenses** | 1.83% | 1.75% | 2.94% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.51% | 1.40% | 1.51% | |||||||||||
Ratio of Net Investment Income/(Loss)** | (1.50)% | (1.28)% | (1.36)% | |||||||||||
Portfolio Turnover Rate | 0% | 59% | 38% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from December 28, 2012 (inception date) through June 30, 2013. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Consolidated Financial Statements.
Janus Investment Fund | 17
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Notes to Consolidated Financial Statements
1. | Organization and Significant Accounting Policies |
Janus Diversified Alternatives Fund (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund employs various strategies within the equity, fixed income, commodity, and currency asset classes. The Fund is classified as nondiversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
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.
Investment in Subsidiary
To qualify as a regulated investment company under the Internal Revenue Code of 1986, as amended (the “Code”), 90% of the Fund’s income must be from certain qualified sources. Direct investment in many commodities-related investments generates income that is not from a qualifying source for purposes of meeting this 90% test. The Fund will seek to gain exposure to the commodity markets, in whole or in part, through investments in the Janus Diversified Alternatives Subsidiary, Ltd., a wholly-owned subsidiary of the Fund (“Subsidiary”) organized under the laws of the Cayman Islands, which is generally subject to the same investment policies and restrictions as the Fund. The Subsidiary may invest without limitation in commodity index-linked swaps, commodity futures, commodity swaps, commodity-linked notes, and other commodity-linked derivative instruments. The Subsidiary may also invest in fixed-income securities and other investments which may serve as margin or collateral for the Subsidiary’s derivatives positions. The Fund may invest 25% or less of its total assets in the Subsidiary. Income or net capital gains from the Fund’s investment in the Subsidiary would be treated as ordinary income to the Fund. Janus Capital is the adviser to the Subsidiary. The Subsidiary will not be subject to U.S. laws (including securities laws) and their protections. The Subsidiary is subject to the laws of a foreign jurisdiction, which can be affected by developments in that jurisdiction. By investing in the Subsidiary, the Fund will be indirectly exposed to the risks associated with the Subsidiary’s investments, which are generally similar to those that are permitted to be held by the Fund. The Subsidiary is not registered under the 1940 Act, and is not subject to all of the provisions of the 1940 Act. The IRS has previously issued a number of private letter rulings to mutual funds (but not the Fund) in which it ruled that income from a fund’s investment in a wholly-
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owned foreign subsidiary that invests in commodity-linked derivatives, such as the Subsidiary, constitutes qualifying income. The IRS has suspended issuance of any further private letter rulings pending a review of its position. A change in the IRS’ position or changes in the laws of the United States and/or the Cayman Islands could result in the inability of the Fund and/or the Subsidiary to operate and could adversely affect the Fund. In particular, unfavorable treatment of the income derived from the Fund’s investment in the Subsidiary could jeopardize the Fund’s status as a regulated investment company under the Code, which in turn may subject the Fund to higher tax rates and/or penalties.
The Subsidiary was incorporated on December 28, 2012 as a wholly-owned subsidiary of Janus Diversified Alternatives Fund. As of June 30, 2015 the Fund owns 1,382,693 shares of the Subsidiary, with a market value of $14,867,070. This represents 22% of the Fund’s net assets. The Fund’s Consolidated Schedule of Investments, Consolidated Statement of Assets and Liabilities, Consolidated Statement of Operations, Consolidated Statements of Changes in Net Assets, and Consolidated Financial Highlights include the accounts of both the Fund and the Subsidiary. All inter-company transactions and balances have been eliminated in consolidation.
As of June 30, 2015, Subsidiary information included in the Consolidated Financial Statements is as follows:
Net assets | $ | 14,867,070 | ||||
Market value of investments | 10,897,948 | |||||
Net income/(loss) | (1,993) | |||||
Net realized gain/(loss) | 849,221 | |||||
Net change in unrealized appreciation/depreciation | (232,892) | |||||
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Information on the valuation of certain derivatives is contained in Note 2 below.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques
Janus Investment Fund | 19
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Notes to Consolidated Financial Statements (continued)
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 June 30, 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 Consolidated Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the year. 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. Additionally, the Fund, as a shareholder in the Subsidiary, will also indirectly bear its pro rata share of the expenses incurred by the Subsidiary.
Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s
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maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the consolidated financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the consolidated financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
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 June 30, 2015, the Fund had restricted cash in the amount of $54,760,000. 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 year ended June 30, 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:
• | Commodity Risk – the risk related to the change in value of commodities or commodity-linked investments due to changes in the overall market |
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Notes to Consolidated Financial Statements (continued)
movements, volatility of the underlying benchmark, changes in interest rates, or other factors affecting a particular industry or commodity such as drought, floods, weather, livestock disease, embargoes, tariffs, and international economic, political, and regulatory developments. |
• | Counterparty Risk – 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.
Commodity-Linked Investments
The Fund may invest in commodity index-linked swap agreements, commodity options and futures, and options on futures that provide exposure to the investment returns of the commodities markets. The Fund may also invest in other commodity-linked derivative instruments, such as commodity-linked notes (“structured notes”). The Fund will seek to gain exposure to the commodity markets, in whole or in part, through investments in the Subsidiary which is generally subject to the same investment policies and restrictions as the Fund. The Subsidiary invests in commodity-linked investments and other investments which may serve as margin or collateral for the Subsidiary’s derivative positions. Such exposure may subject the Fund to greater volatility than investments in traditional securities. The value of a given commodity-linked derivative investment typically is based upon the price movements of a physical commodity (such as heating oil, livestock, or agricultural products), a commodity futures contract or commodity index, or some other readily measurable economic variable. The value of commodity-linked derivative instruments may therefore be affected by changes in overall market movements, volatility of the underlying benchmark, changes in interest rates, or other factors affecting a particular industry or commodity such as drought, floods, weather, livestock disease, embargoes, tariffs, and international economic, political, and regulatory developments.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate
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(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 Consolidated Statement of Assets and Liabilities as a receivable or payable and in the Consolidated Statement of Operations for the change in unrealized net appreciation/(depreciation) (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Consolidated Statement of Operations (if applicable).
During the year, the Fund entered into forward currency contracts with the obligation to purchase foreign currencies in the future at an agreed upon rate in order to take a positive outlook on the related currency. These forward contracts seek to increase exposure to currency risk.
During the year, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to take a negative outlook on the related currency. These forward contracts seek to increase exposure to currency risk.
The following table provides average ending monthly currency value amounts on purchased and sold forward currency contracts during the year ended June 30, 2015.
Fund | Purchased | Sold | ||||||||
Janus Diversified Alternatives Fund | $ | 3,378,842 | $ | 3,454,198 | ||||||
Futures Contracts
A futures contract is an exchange-traded agreement to take or make delivery of an underlying asset at a specific time in the future for a specific predetermined negotiated price. The Fund may enter into futures contracts to gain exposure to the stock market or other markets pending investment of cash balances or to meet liquidity needs. The Fund is subject to interest rate risk, equity risk, and currency risk in the normal course of pursuing its investment objective through its investments in futures contracts. The Fund may also use such derivative instruments to hedge or protect from adverse movements in securities prices, currency rates or interest rates. The use of futures contracts may involve risks such as the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.
Futures contracts on commodities are valued at the settlement price on valuation date on the commodities exchange as reported by an approved vendor. Mini contracts, as defined in the description of the contract, shall be valued using the Actual Settlement Price or “ASET” price type as reported by an approved vendor. In the event that foreign futures trade when the foreign equity markets are closed, the last foreign futures trade price shall be used. Futures contracts are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Consolidated Statement of Assets and Liabilities (if applicable). The change in unrealized net appreciation/(depreciation) is reported on the Consolidated Statement of Operations (if applicable). When a contract is closed, a realized gain or loss is reported on the Consolidated Statement of Operations (if applicable), equal to the difference between the opening and closing value of the contract. Securities held by the Fund that are designated as collateral for market value on futures contracts are noted on the Consolidated Schedule of Investments (if applicable). Such collateral is in the possession of the Fund’s futures commission merchant.
With futures, there is minimal counterparty credit risk to the Fund since futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default.
During the year, the Fund purchased interest rate futures to increase exposure to interest rate risk.
During the year, the Fund sold interest rate futures to decrease exposure to interest rate risk.
During the year, the Fund purchased commodity futures to increase exposure to commodity risk.
During the year, the Fund sold commodity futures to decrease exposure to commodity risk.
During the year, the Fund purchased futures on equity indices to increase exposure to equity risk.
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Notes to Consolidated Financial Statements (continued)
During the year, the Fund purchased futures on currency indices to increase exposure to currency risk.
During the year, the Fund sold futures on currency indices to decrease exposure to currency risk.
The following table provides average ending monthly market value amounts on purchased and sold futures contracts during the year ended June 30, 2015.
Fund | Purchased | Sold | ||||||||
Janus Diversified Alternatives Fund | $ | 26,175,631 | $ | 7,870,970 | ||||||
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 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 on the primary market or exchange it trades. 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 Consolidated Statement of Assets and Liabilities (if applicable). Realized gains and losses are reported on the Consolidated Statement of Operations (if applicable). The change in unrealized net appreciation or depreciation during the period is included in the Consolidated Statement of Operations (if applicable).
The Fund’s maximum risk of loss from counterparty risk or credit risk is the discounted value of the payments to be received from/paid to the counterparty over the contract’s remaining life, to the extent that the amount is positive. The risk is mitigated by having a netting arrangement between the Fund and the counterparty and by the posting of collateral by the counterparty to cover the Fund’s exposure to the counterparty.
Total return swaps involve an exchange by two parties in which one party makes payments based on a set rate, either fixed or variable, while the other party makes payments based on the return of an underlying asset, which includes both the income it generates and any capital gains over the payment period.
During the year, 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.
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During the year, the Fund entered into total return swaps on equity securities or indices to decrease exposure to equity risk. These total return swaps require the Fund to pay an amount equal to the positive price movement of securities or an index multiplied by the notional amount of the contract and, in some cases, dividends paid on the securities. The Fund will receive payments of a floating reference interest rate and an amount equal to the negative price movement of the same securities or index multiplied by the notional amount of the contract.
During the year, the Fund entered into total return swaps on commodity indices to increase exposure to commodity risk. These total return swaps require the Fund to pay a fixed or a floating reference interest rate, and an amount equal to the negative price movement of an index multiplied by the notional amount of the contract. The Fund will receive payments equal to the positive price movement of the same index multiplied by the notional amount of the contract.
During the year, the Fund entered into total return swaps on credit indices to increase exposure to credit risk. These total return swaps require the Fund to pay a floating reference interest rate, and an amount equal to the negative price movement of an index multiplied by the notional amount of the contract. The Fund will receive payments equal to the positive price movement of the same index multiplied by the notional amount of the contract.
The following table provides average ending monthly market value amounts on total return swaps which are long and short the reference asset during the year ended June 30, 2015.
Fund | Long | Short | ||||||||
Janus Diversified Alternatives Fund | $ | 178,628 | $ | (117,058) | ||||||
The following table, grouped by derivative type, provides information about the fair value and location of derivatives within the Consolidated Statement of Assets and Liabilities as of June 30, 2015.
Fair Value of Derivative Instruments as of June 30, 2015
Asset Derivatives | Liability Derivatives | |||||||||||
Derivatives not accounted for as | Consolidated Statement | Consolidated Statement | ||||||||||
hedging instruments | of Assets and Liabilities Location | Fair Value | of Assets and Liabilities Location | Fair Value | ||||||||
Janus Diversified Alternatives Fund | ||||||||||||
Commodity Contracts | Outstanding swap contracts, at value | $ | 8 | |||||||||
Commodity Contracts | Variation margin receivable | $ | 50,934 | Variation margin payable | 201,137 | |||||||
Credit Contracts | Outstanding swap contracts, at value | 11,770 | ||||||||||
Currency Contracts | Forward currency contracts | 1,896 | Forward currency contracts | 1,085 | ||||||||
Currency Contracts | Variation margin payable | 37,162 | ||||||||||
Equity Contracts | Outstanding swap contracts, at value | 451 | Outstanding swap contracts, at value | 31 | ||||||||
Equity Contracts | Variation margin receivable | 8,633 | ||||||||||
Interest Rate Contracts | Variation margin receivable | 3,894 | Variation margin payable | 25,579 | ||||||||
Total | $ | 65,808 | $ | 276,772 | ||||||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Consolidated Statement of Operations for the year ended June 30, 2015.
The effect of Derivative Instruments on the Consolidated Statement of Operations for the year ended June 30, 2015
Amount of Net Realized Gain/(Loss) on Derivatives Recognized in Income | ||||||||||||||||
Derivatives not accounted for as | Investments and foreign | |||||||||||||||
hedging instruments | currency transactions | Futures contracts | Swap contracts | Total | ||||||||||||
Janus Diversified Alternatives Fund | ||||||||||||||||
Commodity Contracts | $ | – | $ | 417,025 | $ | 432,148 | $ | 849,173 | ||||||||
Credit Contracts | – | – | 268,784 | 268,784 | ||||||||||||
Currency Contracts | (302,009 | ) | 1,498,752 | – | 1,196,743 | |||||||||||
Equity Contracts | – | (42,920 | ) | (198,726 | ) | (241,646 | ) | |||||||||
Interest Rate Contracts | – | 863,790 | – | 863,790 | ||||||||||||
Total | $ | (302,009 | ) | $ | 2,736,647 | $ | 502,206 | $ | 2,936,844 | |||||||
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Notes to Consolidated Financial Statements (continued)
Change in Unrealized Net Appreciation/Depreciation on Derivatives Recognized in Income | ||||||||||||||||
Investments, foreign | ||||||||||||||||
currency translations and | ||||||||||||||||
Derivatives not accounted for as | non-interested Trustees’ | |||||||||||||||
hedging instruments | deferred compensation | Futures contracts | Swap contracts | Total | ||||||||||||
Janus Diversified Alternatives Fund | ||||||||||||||||
Commodity Contracts | $ | – | $ | (216,975 | ) | $ | (14 | ) | $ | (216,989 | ) | |||||
Currency Contracts | (1,772 | ) | (69,015 | ) | – | (70,787 | ) | |||||||||
Credit Contracts | – | – | (11,666 | ) | (11,666 | ) | ||||||||||
Equity Contracts | – | (139,636 | ) | 2,357 | (137,279 | ) | ||||||||||
Interest Rate Contracts | – | (53,811 | ) | – | (53,811 | ) | ||||||||||
Total | $ | (1,772 | ) | $ | (479,437 | ) | $ | (9,323 | ) | $ | (490,532 | ) | ||||
Please see the Fund’s Consolidated Statement of Operations for the Fund’s “Net Realized and Unrealized Gain/(Loss) on Investments.”
3. | Other Investments and Strategies |
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient 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
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investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the “Offsetting Assets and Liabilities” section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs, including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the consolidated financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Consolidated Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Consolidated Statement of Assets and Liabilities.
The following tables present gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see either the “Fair Value of Derivative Instruments as of June 30, 2015” table located in Note 2 of these Notes to Consolidated Financial Statements and/or the Fund’s Consolidated Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
BNP Paribas | $ | 2 | $ | (2) | $ | – | $ | – | ||||||||||
Goldman Sachs International | 449 | (27) | – | 422 | ||||||||||||||
HSBC Securities (USA), Inc. | 1,896 | (1,085) | – | 811 | ||||||||||||||
Total | $ | 2,347 | $ | (1,114) | $ | – | $ | 1,233 | ||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Liabilities | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
Barclays Capital, Inc. | $ | 11,770 | $ | – | $ | (11,770) | $ | – | ||||||||||
BNP Paribas | 12 | (2) | (10) | – | ||||||||||||||
Goldman Sachs International | 27 | (27) | – | – | ||||||||||||||
HSBC Securities (USA), Inc. | 1,085 | (1,085) | – | – | ||||||||||||||
Total | $ | 12,894 | $ | (1,114) | $ | (11,780) | $ | – | ||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Consolidated Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
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
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Notes to Consolidated Financial Statements (continued)
denoted on the accompanying Consolidated Schedule of Investments and are evaluated daily to ensure their market value equals or exceeds the current market value of the Fund’s corresponding forward currency contracts.
The Fund may require the counterparty to pledge securities as collateral daily (based on the daily valuation of the financial asset) if the Fund has a net aggregate unrealized gain on OTC derivative contracts with a particular counterparty. The Fund may deposit cash as collateral with the counterparty and/or custodian daily (based on the daily valuation of the financial asset) if the Fund has a net aggregate unrealized loss on OTC derivative contracts with a particular counterparty. The collateral amounts are subject to minimum exposure requirements and initial margin requirements. Collateral amounts are monitored and subsequently adjusted up or down as valuations fluctuate by at least the minimum exposure requirement. Collateral may reduce the risk of loss.
4. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund and the Subsidiary each pay Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s and the Subsidiary’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
of the Fund | Advisory Fee (%) | |||||||||
First $ | 1 Billion | 1.00 | ||||||||
Over $ | 1 Billion | 0.95 | ||||||||
Janus Capital has contractually agreed to waive a portion of the Fund’s management fee in an amount equal to the management fee paid to Janus Capital by the Subsidiary. The management fee waiver arrangement related to the Subsidiary may not be discontinued by Janus Capital as long as its contract with the Subsidiary is in place.
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses, which include the other expenses of the Subsidiary, in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
Janus Diversified Alternatives Fund | 1.25 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
For a period of three years subsequent to the Fund’s commencement of operations or until the Fund’s assets exceed the first breakpoint in the investment advisory fee schedule, whichever occurs first, Janus Capital may recover from the Fund fees and expenses previously waived or reimbursed, which could then be considered a deferral, if the Fund’s expense ratio, including recovered expenses, falls below the expense limit. If applicable, this amount is disclosed as “Recoupment expense” on the Consolidated Statement of Operations. During the year ended June 30, 2015, Janus Capital reimbursed the Fund $241,315 of fees and expenses that are eligible for recoupment. As of June 30, 2015, the aggregate amount of recoupment that may potentially be made to Janus Capital is $731,659. The recoupment of such reimbursements expires December 28, 2015.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s and the Subsidiary’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Consolidated Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services 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
28 | JUNE 30, 2015
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processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Consolidated Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the 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 $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the year ended June 30, 2015. The Fund’s portion is reported as part of “Other expenses” on the Consolidated Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in
Janus Investment Fund | 29
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Notes to Consolidated Financial Statements (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 June 30, 2015 on the Consolidated Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Consolidated Statement of Assets and Liabilities. Deferred compensation expenses for the year ended June 30, 2015 are included in “Non-interested Trustees’ fees and expenses” on the Consolidated Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 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 product compliant with Rule 2a-7 under the 1940 Act. There are no restrictions on the Fund’s ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Fund to Janus Cash Liquidity Fund LLC. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the year ended June 30, 2015 can be found in a table located in the Consolidated 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 year ended June 30, 2015, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Janus Diversified Alternatives Fund | $ | 124 | ||||
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 year ended June 30, 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 year ended June 30, 2015.
As of June 30, 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 Diversified Alternatives Fund - Class A Shares | 39 | % | 2 | % | ||||||
Janus Diversified Alternatives Fund - Class C Shares | 79 | 2 | ||||||||
Janus Diversified Alternatives Fund - Class D Shares | – | – | ||||||||
Janus Diversified Alternatives Fund - Class I Shares | – | – | ||||||||
Janus Diversified Alternatives Fund - Class N Shares | 98 | 78 | ||||||||
Janus Diversified Alternatives Fund - Class S Shares | 100 | 2 | ||||||||
Janus Diversified Alternatives Fund - Class T Shares | 49 | 2 | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
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5. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation, derivatives, and foreign currency contract adjustments. 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.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
Janus Diversified Alternatives Fund | $ | 37,291 | $ | 568,867 | $ | – | $ | – | $ | – | $ | (16,795) | $ | (304,068) | |||||||||||||||||
During the year ended June 30, 2015, the following capital loss carryovers were utilized by the Fund as indicated in the table:
Capital Loss | ||||||||||
Fund | Carryover Utilized | |||||||||
Janus Diversified Alternatives Fund | $ | 156,866 | ||||||||
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 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.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
Janus Diversified Alternatives Fund | $ | 12,154,050 | $ | 1,964 | $ | (306,032) | ||||||||
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. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the year ended June 30, 2015
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Diversified Alternatives Fund | $ | 31,471 | $ | 483,557 | $ | – | $ | – | ||||||||||||||
For the year ended June 30, 2014
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Diversified Alternatives Fund | $ | – | $ | – | $ | – | $ | (474,044) | ||||||||||||||
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Notes to Consolidated Financial Statements (continued)
Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
Janus Diversified Alternatives Fund | $ | – | $ | 1,346,765 | $ | (1,346,765) | ||||||||
6. | Capital Share Transactions |
Janus Diversified | ||||||||||
Alternative Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 128,832 | 54,802 | ||||||||
Reinvested dividends and distributions | 1,288 | – | ||||||||
Shares repurchased | (267,553) | (1,534) | ||||||||
Net Increase/(Decrease) in Fund Shares | (137,433) | 53,268 | ||||||||
Shares Outstanding, Beginning of Period | 412,113 | 358,845 | ||||||||
Shares Outstanding, End of Period | 274,680 | 412,113 | �� | |||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 35,809 | 513 | ||||||||
Reinvested dividends and distributions | 1,229 | – | ||||||||
Shares repurchased | (222,703) | (5,794) | ||||||||
Net Increase/(Decrease) in Fund Shares | (185,665) | (5,281) | ||||||||
Shares Outstanding, Beginning of Period | 359,335 | 364,616 | ||||||||
Shares Outstanding, End of Period | 173,670 | 359,335 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 117,411 | 98,196 | ||||||||
Reinvested dividends and distributions | 2,258 | – | ||||||||
Shares repurchased | (439,899) | (83,481) | ||||||||
Net Increase/(Decrease) in Fund Shares | (320,230) | 14,715 | ||||||||
Shares Outstanding, Beginning of Period | 626,271 | 611,556 | ||||||||
Shares Outstanding, End of Period | 306,041 | 626,271 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 1,285 | 22,808 | ||||||||
Reinvested dividends and distributions | 1,755 | – | ||||||||
Shares repurchased | (357,143) | (100,301) | ||||||||
Net Increase/(Decrease) in Fund Shares | (354,103) | (77,493) | ||||||||
Shares Outstanding, Beginning of Period | 580,051 | 657,544 | ||||||||
Shares Outstanding, End of Period | 225,948 | 580,051 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 371,068 | 419,103 | ||||||||
Reinvested dividends and distributions | 42,401 | – | ||||||||
Shares repurchased | (976,804) | (519,360) | ||||||||
Net Increase/(Decrease) in Fund Shares | (563,335) | (100,257) | ||||||||
Shares Outstanding, Beginning of Period | 5,792,081 | 5,892,338 | ||||||||
Shares Outstanding, End of Period | 5,228,746 | 5,792,081 |
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Janus Diversified | ||||||||||
Alternative Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | – | – | ||||||||
Reinvested dividends and distributions | 1,088 | – | ||||||||
Shares repurchased | (220,000) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | (218,912) | – | ||||||||
Shares Outstanding, Beginning of Period | 357,143 | 357,143 | ||||||||
Shares Outstanding, End of Period | 138,231 | 357,143 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 119,429 | 8,111 | ||||||||
Reinvested dividends and distributions | 1,200 | – | ||||||||
Shares repurchased | (255,212) | (5,420) | ||||||||
Net Increase/(Decrease) in Fund Shares | (134,583) | 2,691 | ||||||||
Shares Outstanding, Beginning of Period | 386,860 | 384,169 | ||||||||
Shares Outstanding, End of Period | 252,277 | 386,860 |
7. | Purchases and Sales of Investment Securities |
For the year ended June 30, 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 Diversified Alternatives Fund | $ | – | $ | – | $ | – | $ | – | ||||||
8. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of Janus Diversified Alternatives Fund:
of Janus Diversified Alternatives Fund:
In our opinion, the accompanying consolidated statement of assets and liabilities, including the consolidated schedule of investments, and the related consolidated statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Janus Diversified Alternatives Fund (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
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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 | 35
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Additional Information (unaudited) (continued)
providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
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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 June 30, 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 “Consolidated Financial Highlights” in this report.
Consolidated Schedule of Investments
Following the performance overview section is the Fund’s Consolidated Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Consolidated Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Consolidated Schedule of Investments (if applicable).
Consolidated Statement of Assets and Liabilities
This statement is often referred to as the “balance sheet.” It lists the assets and liabilities of the Fund on the last day of the reporting period.
The Fund’s assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the
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Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Consolidated Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Consolidated Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Consolidated Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Consolidated Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. 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
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Useful Information About Your Fund Report (unaudited) (continued)
and/or outlook of the portfolio manager(s) and/or investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Designation Requirements (unaudited)
For federal income tax purposes, the Fund designated the following for the year ended June 30, 2015:
Capital Gain Distributions
Fund | ||||||||||
Janus Diversified Alternatives Fund | $ | 483,557 | ||||||||
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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
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Trustees and Officers (unaudited) (continued)
OFFICERS
Positions Held | Term of Office* and | Principal Occupations | ||||
Name, Address, and Age | with the Trust | Length of Time Served | During the Past Five Years | |||
John S. Fujiwara 151 Detroit Street Denver, CO 80206 DOB: 1960 | Executive Vice President and Co-Portfolio Manager Janus Diversified Alternatives Fund | 12/12-Present | Portfolio Manager for other Janus accounts. Formerly, Senior Principal at Absolute Plus Management, LLC (2006-2012). | |||
Richard R. Lindsey 151 Detroit Street Denver, CO 80206 DOB: 1954 | Executive Vice President and Co-Portfolio Manager Janus Diversified Alternatives Fund | 1/14-Present | Chief Investment Strategist Liquid Alternatives Group and Vice President of Janus Capital; and Portfolio Manager for other Janus accounts. Formerly, Chief Investment Officer and President of the Callcott Group, LLC (2007-2012). | |||
Andrew B.Weisman 151 Detroit Street Denver, CO 80206 DOB: 1959 | Executive Vice President and Co-Portfolio Manager Janus Diversified Alternatives Fund | 12/12-Present | Chief Investment Officer Liquid Alternatives Group and Senior Vice President of Janus Capital; Director of the Janus Global Diversified Risk Premia Master Fund Ltd; and Portfolio Manager for other Janus accounts. Formerly, Chief Executive Officer of WR Managed Accounts LLC (2008-2012). | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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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-0815-93827 | 125-02-93018 08-15 |
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annual report
June 30, 2015
Janus Global Allocation Fund – Conservative
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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Janus Global Allocation Fund – Conservative
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Janus Global Allocation Fund - Conservative (unaudited)
FUND SNAPSHOT Broad, actively managed, global diversification allows flexibility to capture the best-performing asset classes regardless of geographies. In addition, we seek to dampen the fund’s overall volatility through the use of alternatives. This, coupled with access to Janus Capital Group’s innovative investment expertise and solutions, should provide superior risk-adjusted returns over the long term. | Enrique Chang co-portfolio manager | Ashwin Alankar co-portfolio manager |
PERFORMANCE OVERVIEW
Janus Global Allocation Fund – Conservative’s Class T Shares returned -1.13% for the 12-month period ended June 30, 2015. This compares with a return of -7.09% for the Barclays Global Aggregate Bond Index, the Fund’s primary benchmark, and a return of -3.98% for its secondary benchmark, the Global Conservative Allocation Index, an internally calculated, hypothetical combination of total returns from the Barclays Global Aggregate Bond Index (60%) and the MSCI All Country World Index (40%).
MARKET ENVIRONMENT
The S&P 500 Index reached successive record highs during the period. An improving economic picture in the U.S. and a historically low interest rate environment were broadly supportive of U.S. equity markets. Japanese and European equity markets both enjoyed significant gains (in local currencies) during the period, helped by the introduction of accommodative monetary policies. While equity markets experienced gains, the march forward was not without volatility. Markets were volatile in October and December, due to fears about weak economic growth, and again in late June, due to concerns about the possibility of a Greek exit from the eurozone.
Commodities declined precipitously over the first half of the last 12 months, with the energy sector leading the decline. Strengthening dollar a slowdown in consumption from China all were the major catalysts for this decline, which put miners and the energy sector at risk. Within fixed income markets, the U.S. Treasury yield curve flattened during the period. Long-dated Treasury yields fell through the end of 2014 as strong U.S. economic growth suggested to investors that the Federal Reserve (Fed) would initiate rate hikes in 2015. Yields then retraced some of their losses as softer-than-expected economic data in the first part of 2015 diminished investor concern of breakout growth and stronger-than-expected inflation. High-yield and investment-grade credit spreads widened during the period amid a flood of new issuance. Shareholder-friendly activity, which may not be friendly to bondholders, also weighed on bond prices. Rates fell across the curve in the eurozone in anticipation of the European Central Bank (ECB) initiating quantitative easing (QE); the announcement of a larger-than-expected QE program then pushed rates down even further.
PERFORMANCE DISCUSSION
Janus Global Allocation Fund – Conservative invests across a broad set of Janus, INTECH and Perkins funds that span a wide range of global asset categories with a base allocation of 30% to 50% equities, 50% to 65% fixed income and 0% to 20% alternative investments that are rebalanced quarterly. Janus Global Allocation Fund – Conservative is structured as a “fund of funds” portfolio that provides investors with broad, diversified exposure to various types of investments with an emphasis on managing investment risk.
Contributors were led by Janus Triton Fund and INTECH U.S. Managed Volatility Fund II (which merged with INTECH U.S. Managed Volatility Fund during the period), which benefited from stronger U.S. markets during the period. Janus Global Research Fund was another top contributor as a result of strong stock selection.
Janus Global Bond Fund was a large detractor from absolute performance due to its large position size within the fund and the weaker overall global bond market. Janus International Equity Fund was another top detractor, due to international markets registering negative returns for the period. Janus Overseas Fund was also a large detractor due in part to its exposure to emerging markets, which were weak during the period.
OUTLOOK
In recent weeks global markets have placed much emphasis on Greece’s debt issues, and also on the spillover effect that a sharp drop in Chinese equities could have on the country’s broader economy. We continue to monitor both situations, and do not take any potential source of market risk for granted. However, we believe the rest of Europe’s economy is generally improving, and that
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Janus Global Allocation Fund - Conservative (unaudited)
a potential Greek exit from the eurozone is unlikely to become a systemic risk. In China, the amount of leverage some investors have been using to buy equities is a concern and a deleveraging process could cause some short term pain, but we believe the Chinese government still has many tools at its disposal to support the economy and thwart a long-term crisis.
We believe the communication, timing and level of Fed interest rate hikes is a bigger potential risk that investors have become less focused on in recent weeks, but that should bear greater attention. Depending on how the Fed goes about its campaign to tighten monetary policy, it could cause assets to re-price quickly.
While each of these macroeconomic events could cause greater volatility in the days ahead, a more volatile market environment is a challenge we are willing to accept. With greater volatility, the greater the benefits of broad diversification across asset classes and risk factors. As such, we expect the value-add of our funds to be particularly attractive in a macro-economic backdrop where uncertainty is potentially lurking in many corners.
Thank you for investing in Janus Global Allocation Fund – Conservative.
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(unaudited)
Janus Global Allocation Fund – Conservative (% of Net Assets)
As of June 30, 2015
Janus Global Bond Fund – Class N Shares | 37 | .1% | ||
Janus International Equity Fund – Class N Shares | 8 | .7 | ||
Perkins Large Cap Value Fund – Class N Shares | 7 | .3 | ||
Janus Short-Term Bond Fund – Class N Shares | 6 | .7 | ||
INTECH U.S. Managed Volatility Fund(1) – Class N Shares | 6 | .5 | ||
Janus Flexible Bond Fund – Class N Shares | 6 | .5 | ||
Janus Adaptive Global Allocation Fund – Class N Shares | 5 | .0 | ||
Janus Diversified Alternatives Fund – Class N Shares | 4 | .5 | ||
INTECH International Managed Volatility Fund(2) – Class I Shares | 4 | .3 | ||
Janus Triton Fund – Class N Shares | 2 | .6 | ||
Janus Global Research Fund – Class I Shares | 2 | .2 | ||
Janus Global Real Estate Fund – Class I Shares | 1 | .9 | ||
Janus Overseas Fund – Class N Shares | 1 | .9 | ||
Janus Fund – Class N Shares | 1 | .6 | ||
Janus Global Select Fund – Class I Shares | 1 | .2 | ||
Perkins Small Cap Value Fund – Class N Shares | 1 | .2 | ||
Janus Forty Fund – Class N Shares | 0 | .8 | ||
(1) | Formerly named INTECH U.S. Value Fund. | |
(2) | Formerly named INTECH International Fund. |
Janus Global Allocation Fund - Conservative At A Glance
Asset Allocation – (% of Net Assets)
As of June 30, 2015
* Includes Other of (0.1)%.
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Janus Global Allocation Fund - Conservative (unaudited)
Performance
Average Annual Total Return – for the periods ended June 30, 2015 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||
One | Five | Since | Total Annual Fund | Net Annual Fund | |||||||
Year | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Janus Global Allocation Fund – Conservative – Class A Shares | |||||||||||
NAV | –1.25% | 7.29% | 6.34% | 1.18% | 1.18% | ||||||
MOP | –6.92% | 6.02% | 5.68% | ||||||||
Janus Global Allocation Fund – Conservative – Class C Shares | |||||||||||
NAV | –1.97% | 6.49% | 5.57% | 1.92% | 1.91% | ||||||
CDSC | –2.91% | 6.49% | 5.57% | ||||||||
Janus Global Allocation Fund – Conservative – Class D Shares(1) | –1.03% | 7.48% | 6.56% | 0.97% | 0.97% | ||||||
Janus Global Allocation Fund – Conservative – Class I Shares | –1.02% | 7.53% | 6.52% | 0.93% | 0.93% | ||||||
Janus Global Allocation Fund – Conservative – Class S Shares | –1.37% | 7.11% | 6.11% | 1.33% | 1.33% | ||||||
Janus Global Allocation Fund – Conservative – Class T Shares | –1.13% | 7.43% | 6.52% | 1.08% | 1.08% | ||||||
Barclays Global Aggregate Bond Index | –7.09% | 2.07% | 3.95% | ||||||||
Global Conservative Allocation Index | –3.98% | 6.09% | 4.90% | ||||||||
Morningstar Quartile – Class T Shares | 2nd | 3rd | 1st | ||||||||
Morningstar Ranking – based on total returns for World Allocation Funds | 249/571 | 269/384 | 66/296 | ||||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
See important disclosures on the next page.
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(unaudited)
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Performance of the Janus Global Allocation Funds depends on that of the underlying funds. They are subject to the volatility of the financial markets. Because Janus Capital is the adviser to the Fund and to the underlying affiliated funds held within the Fund, it is subject to certain potential conflicts of interest.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Class A Shares, Class C Shares, Class I Shares, and Class S Shares commenced operations on July 6, 2009. Performance shown for each class for periods prior to July 6, 2009, reflects the performance of the Fund’s Class J Shares, the initial share class (renamed Class T Shares effective February 16, 2010), calculated using the fees and expenses of each respective share class, without the effect of any fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 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.”
Effective September 1, 2014, Enrique Chang and Ashwin Alankar are Co-Portfolio Managers of the Fund.
* | The Fund’s inception date – December 30, 2005 | |
(1) | Closed to certain new investors. |
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Janus Global Allocation Fund - Conservative (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,002.30 | $ | 2.23 | $ | 1,000.00 | $ | 1,022.56 | $ | 2.26 | 0.45% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 998.40 | $ | 2.53 | $ | 1,000.00 | $ | 1,022.27 | $ | 2.56 | 0.51% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,003.10 | $ | 1.29 | $ | 1,000.00 | $ | 1,023.50 | $ | 1.30 | 0.26% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,003.10 | $ | 0.94 | $ | 1,000.00 | $ | 1,023.85 | $ | 0.95 | 0.19% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,001.60 | $ | 3.03 | $ | 1,000.00 | $ | 1,021.77 | $ | 3.06 | 0.61% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,003.10 | $ | 1.79 | $ | 1,000.00 | $ | 1,023.01 | $ | 1.81 | 0.36% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 181/365 (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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Janus Global Allocation Fund - Conservative
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Investment Companies£ – 100.0% | ||||||||||
Alternative Funds – 4.5% | ||||||||||
1,291,890 | Janus Diversified Alternatives Fund – Class N Shares | $ | 12,970,580 | |||||||
12,970,580 | ||||||||||
Equity Funds – 45.2% | ||||||||||
1,555,031 | INTECH International Managed Volatility Fund – Class I Shares(1) | 12,440,244 | ||||||||
2,109,796 | INTECH U.S. Managed Volatility Fund – Class N Shares(2) | 18,967,063 | ||||||||
1,506,027 | Janus Adaptive Global Allocation Fund – Class N Shares* | 14,608,466 | ||||||||
74,552 | Janus Forty Fund – Class N Shares | 2,463,194 | ||||||||
119,109 | Janus Fund – Class N Shares | 4,659,556 | ||||||||
497,943 | Janus Global Real Estate Fund – Class I Shares | 5,616,797 | ||||||||
95,299 | Janus Global Research Fund – Class I Shares | 6,448,899 | ||||||||
240,240 | Janus Global Select Fund – Class I Shares | 3,409,002 | ||||||||
1,980,095 | Janus International Equity Fund – Class N Shares | 25,424,419 | ||||||||
161,342 | Janus Overseas Fund – Class N Shares | 5,366,233 | ||||||||
290,261 | Janus Triton Fund – Class N Shares | 7,401,666 | ||||||||
1,306,709 | Perkins Large Cap Value Fund – Class N Shares | 21,077,220 | ||||||||
151,630 | Perkins Small Cap Value Fund – Class N Shares | 3,373,759 | ||||||||
131,256,518 | ||||||||||
Fixed Income Funds – 50.3% | ||||||||||
1,793,258 | Janus Flexible Bond Fund – Class N Shares | 18,775,413 | ||||||||
11,240,165 | Janus Global Bond Fund – Class N Shares | 107,680,775 | ||||||||
6,410,703 | Janus Short-Term Bond Fund – Class N Shares | 19,488,537 | ||||||||
145,944,725 | ||||||||||
Total Investments (total cost $274,601,631) – 100.0% | 290,171,823 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0)% | (74,602) | |||||||||
Net Assets – 100% | $ | 290,097,221 | ||||||||
(1) | Formerly named INTECH International Fund. | |
(2) | Formerly named INTECH U.S. Value Fund. |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
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Notes to Schedule of Investments and Other Information
Barclays Global Aggregate Bond Index | A broad-based measure of the global investment grade fixed-rate debt markets. | |
Global Conservative Allocation Index | An internally-calculated, hypothetical combination of total returns from the Barclays Global Aggregate Bond Index (60%) and the MSCI All Country World IndexSM (40%). | |
MSCI All Country World IndexSM | An unmanaged, free float-adjusted market capitalization weighted index composed of stocks of companies located in countries throughout the world. It is designed to measure equity market performance in global developed and emerging markets. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
S&P 500® Index | Measures broad U.S. equity performance. |
* | 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 year ended June 30, 2015. Unless otherwise indicated, all information in the table is for the year ended June 30, 2015. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 6/30/15 | Gain/(Loss) | Income | at 6/30/15 | |||||||||||||||
Janus Global Allocation Fund – Conservative | |||||||||||||||||||||
INTECH International Managed Volatility Fund(1) – Class I Shares | 1,400,092 | 311,097 | (156,158) | 1,555,031 | $ | (59,372) | $ | 298,347 | $ | 12,440,244 | |||||||||||
INTECH U.S. Managed Volatility Fund(2) – Class I Shares | 1,316,108 | 25,148 | (1,341,256) | – | 142,260 | – | – | ||||||||||||||
INTECH U.S. Managed Volatility Fund(2) – Class N Shares | – | 2,803,795 | (693,999) | 2,109,796 | 3,070,369 | 898,631 | 18,967,063 | ||||||||||||||
INTECH U.S. Managed Volatility Fund II(3) – Class I Shares | 542,026 | 28,131 | (570,157) | – | 537,366 | 125,838 | – | ||||||||||||||
Janus Adaptive Global Allocation Fund – Class N Shares | – | 1,506,027 | – | 1,506,027 | – | – | 14,608,466 | ||||||||||||||
Janus Diversified Alternatives Fund – Class N Shares | 1,346,064 | 106,439 | (160,613) | 1,291,890 | 10,827 | 6,381 | 12,970,580 | ||||||||||||||
Janus Flexible Bond Fund – Class N Shares | 2,239,943 | 200,767 | (647,452) | 1,793,258 | (94,440) | 682,647 | 18,775,413 | ||||||||||||||
Janus Forty Fund – Class N Shares | 53,323 | 30,288 | (9,059) | 74,552 | (78,816) | 39,814 | 2,463,194 | ||||||||||||||
Janus Fund – Class N Shares | 116,743 | 29,613 | (27,247) | 119,109 | 294,788 | 76,214 | 4,659,556 | ||||||||||||||
Janus Global Bond Fund – Class N Shares | 11,041,866 | 1,480,848 | (1,282,549) | 11,240,165 | (235,940) | 5,931,511 | 107,680,775 | ||||||||||||||
Janus Global Real Estate Fund – Class I Shares | 502,295 | 52,405 | (56,757) | 497,943 | 21,441 | 126,663 | 5,616,797 | ||||||||||||||
Janus Global Research Fund – Class I Shares | 199,778 | 13,679 | (118,158) | 95,299 | 1,655,080 | 140,498 | 6,448,899 | ||||||||||||||
Janus Global Select Fund – Class I Shares | 506,089 | 31,848 | (297,697) | 240,240 | 936,504 | 54,967 | 3,409,002 | ||||||||||||||
Janus International Equity Fund – Class N Shares | 1,928,889 | 262,900 | (211,694) | 1,980,095 | 50,817 | 553,193 | 25,424,419 | ||||||||||||||
Janus Overseas Fund – Class N Shares | 166,669 | 13,895 | (19,222) | 161,342 | (147,770) | 67,538 | 5,366,233 | ||||||||||||||
Janus Short-Term Bond Fund – Class N Shares | 6,023,999 | 1,237,790 | (851,086) | 6,410,703 | (18,093) | 320,797 | 19,488,537 | ||||||||||||||
Janus Triton Fund – Class N Shares | 284,813 | 44,496 | (39,048) | 290,261 | 119,816 | 41,923 | 7,401,666 | ||||||||||||||
Perkins Large Cap Value Fund – Class N Shares | 793,702 | 620,362 | (107,355) | 1,306,709 | (44,808) | 401,142 | 21,077,220 | ||||||||||||||
Perkins Small Cap Value Fund – Class N Shares | 122,971 | 42,425 | (13,766) | 151,630 | (19,320) | 187,875 | 3,373,759 | ||||||||||||||
Total | $ | 6,140,709 | $ | 9,953,979 | $ | 290,171,823 | |||||||||||||||
(1) | Formerly named INTECH International Fund. | |
(2) | Formerly named INTECH U.S. Value Fund. | |
(3) | Formerly named INTECH U.S. Growth Fund. |
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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 June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | |||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||
Janus Global Allocation Fund – Conservative | ||||||||
Assets | ||||||||
Investments in Securities: | ||||||||
Investment Companies | ||||||||
Alternative Funds | $ 12,970,580 | $– | $– | |||||
Equity Funds | 131,256,518 | – | – | |||||
Fixed Income Funds | 145,944,725 | – | – | |||||
Total Assets | $290,171,823 | $– | $– | |||||
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Statement of Assets and Liabilities
Janus Global | ||||
As of June 30, 2015 | Allocation Fund - Conservative | |||
Assets: | ||||
Investments, at cost | $ | 274,601,631 | ||
Affiliated investments, at value | 290,171,823 | |||
Non-interested Trustees’ deferred compensation | 5,754 | |||
Receivables: | ||||
Fund shares sold | 2,342,276 | |||
Total Assets | 292,519,853 | |||
Liabilities: | ||||
Payables: | ||||
Investments purchased | 2,167,520 | |||
Fund shares repurchased | 100,560 | |||
Advisory fees | 12,020 | |||
Transfer agent fees and expenses | 58,985 | |||
12b-1 Distribution and shareholder servicing fees | 20,805 | |||
Non-interested Trustees’ fees and expenses | 1,895 | |||
Non-interested Trustees’ deferred compensation fees | 5,754 | |||
Accrued expenses and other payables | 55,093 | |||
Total Liabilities | 2,422,632 | |||
Net Assets | $ | 290,097,221 | ||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 262,034,722 | ||
Undistributed net investment income/(loss) | 951,148 | |||
Undistributed net realized gain/(loss) from investments | 11,540,002 | |||
Unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 15,571,349 | |||
Total Net Assets | $ | 290,097,221 | ||
Net Assets - Class A Shares | $ | 12,648,431 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 985,966 | |||
Net Asset Value Per Share(1) | $ | 12.83 | ||
Maximum Offering Price Per Share(2) | $ | 13.61 | ||
Net Assets - Class C Shares | $ | 20,866,315 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,651,236 | |||
Net Asset Value Per Share(1) | $ | 12.64 | ||
Net Assets - Class D Shares | $ | 217,150,414 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 16,819,616 | |||
Net Asset Value Per Share | $ | 12.91 | ||
Net Assets - Class I Shares | $ | 4,266,067 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 330,363 | |||
Net Asset Value Per Share | $ | 12.91 | ||
Net Assets - Class S Shares | $ | 2,499,423 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 195,494 | |||
Net Asset Value Per Share | $ | 12.79 | ||
Net Assets - Class T Shares | $ | 32,666,571 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,535,139 | |||
Net Asset Value Per Share | $ | 12.89 |
(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.
10 | JUNE 30, 2015
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Statement of Operations
Janus Global | ||||
For the year ended June 30, 2015 | Allocation Fund - Conservative | |||
Investment Income: | ||||
Dividends from affiliates | $ | 9,953,979 | ||
Total Investment Income | 9,953,979 | |||
Expenses: | ||||
Advisory fees | 149,385 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 32,078 | |||
Class C Shares | 148,428 | |||
Class S Shares | 5,309 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 271,334 | |||
Class S Shares | 5,309 | |||
Class T Shares | 76,123 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 11,840 | |||
Class C Shares | 13,497 | |||
Class I Shares | 3,845 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 1,502 | |||
Class C Shares | 3,289 | |||
Class D Shares | 34,501 | |||
Class I Shares | 292 | |||
Class S Shares | 106 | |||
Class T Shares | 1,190 | |||
Shareholder reports expense | 46,574 | |||
Registration fees | 105,151 | |||
Professional fees | 41,455 | |||
Non-interested Trustees’ fees and expenses | 6,640 | |||
Other expenses | 6,755 | |||
Total Expenses | 964,603 | |||
Net Expenses | 964,603 | |||
Net Investment Income/(Loss) | 8,989,376 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments in affiliates | 6,140,709 | |||
Capital gain distributions from underlying funds | 8,649,450 | |||
Total Net Realized Gain/(Loss) on Investments | 14,790,159 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments and non-interested Trustees’ deferred compensation | (26,989,932) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (26,989,932) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (3,210,397) |
See Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Statements of Changes in Net Assets
Janus Global | ||||||||
Allocation Fund - Conservative | ||||||||
For each year ended June 30 | 2015 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 8,989,376 | $ | 5,350,342 | ||||
Net realized gain/(loss) from investments in affiliates | 14,790,159 | 5,625,326 | ||||||
Change in unrealized net appreciation/depreciation | (26,989,932) | 27,549,620 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (3,210,397) | 38,525,288 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income | ||||||||
Class A Shares | (375,593) | (224,152) | ||||||
Class C Shares | (525,552) | (243,185) | ||||||
Class D Shares | (7,061,237) | (4,616,118) | ||||||
Class I Shares | (131,261) | (74,717) | ||||||
Class S Shares | (58,683) | (30,383) | ||||||
Class T Shares | (920,542) | (578,354) | ||||||
Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | (212,372) | (701,126) | ||||||
Class C Shares | (373,971) | (1,190,448) | ||||||
Class D Shares | (3,728,522) | (13,179,672) | ||||||
Class I Shares | (67,549) | (208,328) | ||||||
Class S Shares | (34,514) | (99,764) | ||||||
Class T Shares | (489,708) | (1,639,931) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (13,979,504) | (22,786,178) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 2,145,701 | 3,435,818 | ||||||
Class C Shares | 4,957,474 | 6,452,384 | ||||||
Class D Shares | 23,487,164 | 35,128,294 | ||||||
Class I Shares | 5,628,467 | 1,876,103 | ||||||
Class S Shares | 1,002,165 | 615,283 | ||||||
Class T Shares | 19,459,765 | 12,507,064 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 561,301 | 889,267 | ||||||
Class C Shares | 777,880 | 1,226,707 | ||||||
Class D Shares | 10,707,220 | 17,683,750 | ||||||
Class I Shares | 188,184 | 260,218 | ||||||
Class S Shares | 92,272 | 128,254 | ||||||
Class T Shares | 1,307,134 | 2,079,578 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (2,495,811) | (3,205,127) | ||||||
Class C Shares | (5,841,533) | (4,810,023) | ||||||
Class D Shares | (37,982,468) | (49,331,977) | ||||||
Class I Shares | (5,291,780) | (1,770,054) | ||||||
Class S Shares | (508,190) | (148,257) | ||||||
Class T Shares | (16,280,967) | (10,164,952) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | 1,913,978 | 12,852,330 | ||||||
Net Increase/(Decrease) in Net Assets | (15,275,923) | 28,591,440 | ||||||
Net Assets: | ||||||||
Beginning of period | 305,373,144 | 276,781,704 | ||||||
End of period | $ | 290,097,221 | $ | 305,373,144 | ||||
Undistributed Net Investment Income/(Loss) | $ | 951,148 | $ | 1,434,791 |
See Notes to Financial Statements.
12 | JUNE 30, 2015
Table of Contents
Financial Highlights
Class A Shares
Janus Global Allocation Fund - Conservative | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $13.62 | $12.93 | $12.37 | $12.38 | $11.24 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.38(1) | 0.22(1) | 0.33 | 0.29 | 0.47 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.55) | 1.55 | 0.57 | 0.05 | 1.10 | |||||||||||||||||
Total from Investment Operations | (0.17) | 1.77 | 0.90 | 0.34 | 1.57 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.40) | (0.26) | (0.34) | (0.35) | (0.43) | |||||||||||||||||
Distributions (from capital gains) | (0.22) | (0.82) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.62) | (1.08) | (0.34) | (0.35) | (0.43) | |||||||||||||||||
Net Asset Value, End of Period | $12.83 | $13.62 | $12.93 | $12.37 | $12.38 | |||||||||||||||||
Total Return* | (1.25)% | 14.20% | 7.36% | 2.91% | 14.08% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $12,648 | $13,197 | $11,399 | $8,064 | $4,804 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $12,831 | $12,167 | $10,187 | $6,495 | $2,950 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses**(2) | 0.46% | 0.48% | 0.43% | 0.44% | 0.38% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)**(2) | 0.46% | 0.48% | 0.43% | 0.44% | 0.38% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)**(2) | 2.86% | 1.69% | 2.51% | 2.36% | 3.79% | |||||||||||||||||
Portfolio Turnover Rate | 20% | 13% | 69% | 10% | 12% |
Class C Shares
Janus Global Allocation Fund - Conservative | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $13.39 | $12.73 | $12.19 | $12.26 | $11.17 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.32(1) | 0.13(1) | 0.25 | 0.22 | 0.40 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.53) | 1.52 | 0.55 | 0.03 | 1.07 | |||||||||||||||||
Total from Investment Operations | (0.21) | 1.65 | 0.80 | 0.25 | 1.47 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.32) | (0.17) | (0.26) | (0.32) | (0.38) | |||||||||||||||||
Distributions (from capital gains) | (0.22) | (0.82) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.54) | (0.99) | (0.26) | (0.32) | (0.38) | |||||||||||||||||
Net Asset Value, End of Period | $12.64 | $13.39 | $12.73 | $12.19 | $12.26 | |||||||||||||||||
Total Return* | (1.58)% | 13.37% | 6.57% | 2.19% | 13.25% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $20,866 | $22,215 | $18,294 | $13,969 | $7,808 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $22,092 | $19,860 | $16,584 | $11,010 | $4,096 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses**(2) | 0.86% | 1.15% | 1.19% | 1.19% | 1.14% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)**(2) | 0.86% | 1.15% | 1.19% | 1.19% | 1.14% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)**(2) | 2.48% | 1.03% | 1.70% | 1.65% | 2.98% | |||||||||||||||||
Portfolio Turnover Rate | 20% | 13% | 69% | 10% | 12% |
* | 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. | |
(2) | Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. |
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Financial Highlights (continued)
Class D Shares
Janus Global Allocation Fund - Conservative | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $13.70 | $13.00 | $12.44 | $12.43 | $11.26 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.41(1) | 0.26(1) | 0.35 | 0.31 | 0.48 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.56) | 1.55 | 0.57 | 0.06 | 1.12 | |||||||||||||||||
Total from Investment Operations | (0.15) | 1.81 | 0.92 | 0.37 | 1.60 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.42) | (0.29) | (0.36) | (0.36) | (0.43) | |||||||||||||||||
Distributions (from capital gains) | (0.22) | (0.82) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.64) | (1.11) | (0.36) | (0.36) | (0.43) | |||||||||||||||||
Net Asset Value, End of Period | $12.91 | $13.70 | $13.00 | $12.44 | $12.43 | |||||||||||||||||
Total Return* | (1.03)% | 14.41% | 7.50% | 3.14% | 14.34% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $217,150 | $234,052 | $218,190 | $197,198 | $177,032 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $226,112 | $224,649 | $215,079 | $184,437 | $158,291 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses**(2) | 0.26% | 0.27% | 0.25% | 0.24% | 0.25% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)**(2) | 0.26% | 0.27% | 0.25% | 0.24% | 0.25% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)**(2) | 3.09% | 1.93% | 2.69% | 2.59% | 4.07% | |||||||||||||||||
Portfolio Turnover Rate | 20% | 13% | 69% | 10% | 12% |
Class I Shares
Janus Global Allocation Fund - Conservative | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $13.71 | $13.01 | $12.44 | $12.42 | $11.26 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.35(1) | 0.26(1) | 0.35 | 0.33 | 0.43 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.49) | 1.55 | 0.59 | 0.05 | 1.17 | |||||||||||||||||
Total from Investment Operations | (0.14) | 1.81 | 0.94 | 0.38 | 1.60 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.44) | (0.29) | (0.37) | (0.36) | (0.44) | |||||||||||||||||
Distributions (from capital gains) | (0.22) | (0.82) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.66) | (1.11) | (0.37) | (0.36) | (0.44) | |||||||||||||||||
Net Asset Value, End of Period | $12.91 | $13.71 | $13.01 | $12.44 | $12.42 | |||||||||||||||||
Total Return* | (1.02)% | 14.46% | 7.61% | 3.22% | 14.34% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $4,266 | $3,855 | $3,319 | $2,354 | $2,505 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $5,162 | $3,465 | $2,902 | $2,250 | $1,411 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses**(2) | 0.19% | 0.23% | 0.20% | 0.20% | 0.18% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)**(2) | 0.19% | 0.23% | 0.20% | 0.20% | 0.18% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)**(2) | 2.64% | 1.98% | 2.72% | 2.65% | 3.84% | |||||||||||||||||
Portfolio Turnover Rate | 20% | 13% | 69% | 10% | 12% |
* | 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. | |
(2) | Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. |
See Notes to Financial Statements.
14 | JUNE 30, 2015
Table of Contents
Class S Shares
Janus Global Allocation Fund - Conservative | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $13.58 | $12.91 | $12.35 | $12.37 | $11.24 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.34(1) | 0.20(1) | 0.31 | 0.26 | 0.41 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.53) | 1.54 | 0.57 | 0.06 | 1.13 | |||||||||||||||||
Total from Investment Operations | (0.19) | 1.74 | 0.88 | 0.32 | 1.54 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.38) | (0.25) | (0.32) | (0.34) | (0.41) | |||||||||||||||||
Distributions (from capital gains) | (0.22) | (0.82) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.60) | (1.07) | (0.32) | (0.34) | (0.41) | |||||||||||||||||
Net Asset Value, End of Period | $12.79 | $13.58 | $12.91 | $12.35 | $12.37 | |||||||||||||||||
Total Return* | (1.37)% | 13.96% | 7.21% | 2.77% | 13.82% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $2,499 | $2,043 | $1,357 | $1,160 | $520 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $2,123 | $1,713 | $1,335 | $967 | $336 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses**(2) | 0.61% | 0.63% | 0.61% | 0.59% | 0.62% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)**(2) | 0.61% | 0.62% | 0.59% | 0.59% | 0.62% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)**(2) | 2.61% | 1.54% | 2.36% | 2.28% | 3.84% | |||||||||||||||||
Portfolio Turnover Rate | 20% | 13% | 69% | 10% | 12% |
Class T Shares
Janus Global Allocation Fund - Conservative | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $13.69 | $13.00 | $12.42 | $12.42 | $11.26 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.39(1) | 0.26(1) | 0.38 | 0.15 | 0.26 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.55) | 1.54 | 0.55 | 0.21 | 1.32 | |||||||||||||||||
Total from Investment Operations | (0.16) | 1.80 | 0.93 | 0.36 | 1.58 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.42) | (0.29) | (0.35) | (0.36) | (0.42) | |||||||||||||||||
Distributions (from capital gains) | (0.22) | (0.82) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.64) | (1.11) | (0.35) | (0.36) | (0.42) | |||||||||||||||||
Net Asset Value, End of Period | $12.89 | $13.69 | $13.00 | $12.42 | $12.42 | |||||||||||||||||
Total Return* | (1.13)% | 14.35% | 7.60% | 3.03% | 14.15% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $32,667 | $30,011 | $24,223 | $28,323 | $16,648 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $30,449 | $26,955 | $27,679 | $22,198 | $12,762 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses**(2) | 0.36% | 0.38% | 0.36% | 0.34% | 0.36% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)**(2) | 0.36% | 0.29% | 0.26% | 0.31% | 0.36% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)**(2) | 2.91% | 1.92% | 2.87% | 2.37% | 3.77% | |||||||||||||||||
Portfolio Turnover Rate | 20% | 13% | 69% | 10% | 12% |
* | 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. | |
(2) | Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
Janus Global Allocation Fund – Conservative (the “Fund”) is a series fund. The Fund operates as a “fund of funds,” meaning substantially all of the Fund’s assets will be invested in other Janus funds (the “underlying funds”). The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
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.
Underlying Funds
The Fund invests in a variety of underlying funds to pursue a target allocation of equity investments, fixed-income securities, and alternative investments and may also invest in money market instruments or cash/cash equivalents. The Fund has a target allocation, which is how the Fund’s investments generally will be allocated among the major asset classes over the long term, as well as normal ranges, under normal market conditions, within which the Fund’s asset class allocations generally will vary over short-term periods. The Fund’s long-term expected average asset allocation is as follows: 40% to equity investments, 55% to fixed-income securities and money market instruments, and 5% to alternative investments. Additional details and descriptions of the investment objectives and strategies of each of the underlying funds are available in the Fund’s and underlying funds’ prospectuses. The Trustees of the underlying funds may change the investment objectives or strategies of the underlying funds at any time without prior notice to Fund shareholders.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
The Fund’s net asset value (“NAV”) is calculated based upon the NAV of each of the underlying funds in which the Fund invests on the day of valuation. The NAV for each class of the underlying funds is computed by dividing the total value of securities and other assets allocated to the class, less liabilities allocated to that class, by the total number of shares outstanding for the class.
16 | JUNE 30, 2015
Table of Contents
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
The Fund classifies each of its investments in underlying funds as Level 1, without consideration as to the classification level of the specific investments held by the underlying funds.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
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 June 30, 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 year. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities held by the underlying funds will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Any distributions from the underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which may be allocated pro rata to each of the Funds in the Trust. Additionally, the Fund, as a shareholder in the underlying funds, will also indirectly bear its pro rata share of the expenses incurred by the underlying funds. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Janus Investment Fund | 17
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Notes to Financial Statements (continued)
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
The underlying funds may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the underlying funds distribute such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
2. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Janus Global Allocation Fund - Conservative | All Asset Levels | 0.05 | ||||||||
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any expenses of an underlying fund (acquired fund fees and expenses), 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
New | ||||||||||
Expense Limit (%) | Previous | |||||||||
(November 1, | Expense Limit (%) | |||||||||
Fund | 2014 to present) | (until November 1, 2014) | ||||||||
Janus Global Allocation Fund - Conservative | 0.14 | 0.19 | ||||||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
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
18 | JUNE 30, 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.
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 $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the year ended June 30, 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 June 30, 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 year ended June 30, 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 $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 2015.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the year ended June 30, 2015 can be found in a table
Janus Investment Fund | 19
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Notes to Financial Statements (continued)
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 year ended June 30, 2015, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Janus Global Allocation Fund - Conservative | $ | 4,117 | ||||
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 year ended June 30, 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 year ended June 30, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Janus Global Allocation Fund - Conservative | $ | 2,335 | ||||
3. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation and tax equalization.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
Janus Global Allocation Fund - Conservative | $ | 956,903 | $ | 13,603,933 | $ | – | $ | – | $ | – | $ | (4,598) | $ | 13,506,262 | |||||||||||||||||
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 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.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
Janus Global Allocation Fund - Conservative | $ | 276,665,561 | $ | 21,611,443 | $ | (8,105,181) | ||||||||
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. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the year ended June 30, 2015
Distributions | |||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | ||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | |||||||||||||||
Janus Global Allocation Fund - Conservative | $9,072,815 | $4,906,689 | $– | $– | |||||||||||||||
For the year ended June 30, 2014
Distributions | �� | ||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | ||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | |||||||||||||||
Janus Global Allocation Fund - Conservative | $5,766,910 | $17,019,269 | $– | $– | |||||||||||||||
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Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
Janus Global Allocation Fund - Conservative | $ | 1,039,489 | $ | (400,151) | $ | (639,338) | ||||||||
Capital has been adjusted by $1,039,489, including $639,285 of long-term capital gain, for distributions in connection with Fund share redemptions (tax equalization).
4. | Capital Share Transactions |
Janus Global | ||||||||||
Allocation Fund - | ||||||||||
Conservative | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 162,815 | 259,608 | ||||||||
Reinvested dividends and distributions | 43,681 | 69,096 | ||||||||
Shares repurchased | (189,799) | (240,756) | ||||||||
Net Increase/(Decrease) in Fund Shares | 16,697 | 87,948 | ||||||||
Shares Outstanding, Beginning of Period | 969,269 | 881,321 | ||||||||
Shares Outstanding, End of Period | 985,966 | 969,269 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 382,217 | 493,715 | ||||||||
Reinvested dividends and distributions | 61,444 | 96,591 | ||||||||
Shares repurchased | (451,546) | (368,286) | ||||||||
Net Increase/(Decrease) in Fund Shares | (7,885) | 222,020 | ||||||||
Shares Outstanding, Beginning of Period | 1,659,121 | 1,437,101 | ||||||||
Shares Outstanding, End of Period | 1,651,236 | 1,659,121 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 1,767,085 | 2,627,714 | ||||||||
Reinvested dividends and distributions | 828,732 | 1,366,596 | ||||||||
Shares repurchased | (2,859,968) | (3,688,025) | ||||||||
Net Increase/(Decrease) in Fund Shares | (264,151) | 306,285 | ||||||||
Shares Outstanding, Beginning of Period | 17,083,767 | 16,777,482 | ||||||||
Shares Outstanding, End of Period | 16,819,616 | 17,083,767 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 435,938 | 139,869 | ||||||||
Reinvested dividends and distributions | 14,565 | 20,110 | ||||||||
Shares repurchased | (401,434) | (133,774) | ||||||||
Net Increase/(Decrease) in Fund Shares | 49,069 | 26,205 | ||||||||
Shares Outstanding, Beginning of Period | 281,294 | 255,089 | ||||||||
Shares Outstanding, End of Period | 330,363 | 281,294 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 76,961 | 46,585 | ||||||||
Reinvested dividends and distributions | 7,197 | 9,989 | ||||||||
Shares repurchased | (39,153) | (11,243) | ||||||||
Net Increase/(Decrease) in Fund Shares | 45,005 | 45,331 | ||||||||
Shares Outstanding, Beginning of Period | 150,489 | 105,158 | ||||||||
Shares Outstanding, End of Period | 195,494 | 150,489 |
Janus Investment Fund | 21
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Notes to Financial Statements (continued)
Janus Global | ||||||||||
Allocation Fund - | ||||||||||
Conservative | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 1,468,063 | 932,096 | ||||||||
Reinvested dividends and distributions | 101,328 | 160,958 | ||||||||
Shares repurchased | (1,227,117) | (763,985) | ||||||||
Net Increase/(Decrease) in Fund Shares | 342,274 | 329,069 | ||||||||
Shares Outstanding, Beginning of Period | 2,192,865 | 1,863,796 | ||||||||
Shares Outstanding, End of Period | 2,535,139 | 2,192,865 |
5. | Purchases and Sales of Investment Securities |
For the year ended June 30, 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 Allocation Fund - Conservative | $ | 64,130,260 | $ | 58,405,022 | $ | – | $ | – | ||||||
6. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of Janus Global Allocation Fund – Conservative:
of Janus Global Allocation Fund – Conservative:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Janus Global Allocation Fund – Conservative (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
Janus Investment Fund | 23
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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
24 | JUNE 30, 2015
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providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
Janus Investment Fund | 25
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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 June 30, 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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Designation Requirements (unaudited)
For federal income tax purposes, the Fund designated the following for the year ended June 30, 2015:
Capital Gain Distributions
Fund | ||||||||||
Janus Global Allocation Fund - Conservative | $ | 5,545,974 | ||||||||
Foreign Taxes Paid and Foreign Source Income
Fund | Foreign Taxes Paid | Foreign Source Income | ||||||||
Janus Global Allocation Fund - Conservative | $ | 69,853 | $ | 793,082 | ||||||
Dividends Received Deduction Percentage
Fund | ||||||||||
Janus Global Allocation Fund - Conservative | 84 | % | ||||||||
Qualified Dividend Income Percentage
Fund | ||||||||||
Janus Global Allocation Fund - Conservative | 100 | % | ||||||||
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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
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OFFICERS
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
Ashwin Alankar 151 Detroit Street Denver, CO 80206 DOB: 1974 | Executive Vice President and Co-Portfolio Manager Janus Global Allocation Fund - Conservative | 9/14-Present | Senior Vice President and Head of Asset Allocation and Risk Management of Janus Capital and Portfolio Manager for other Janus accounts. Formerly, Co-Chief Investment Officer of AllianceBernstein’s Tail Risk Parity (2010-2014) and Partner and Portfolio Manager for Platinum Grove Asset Management (2003-2010). | |||
Enrique Chang 151 Detroit Street Denver, CO 80206 DOB: 1962 | Executive Vice President and Co-Portfolio Manager Janus Global Allocation Fund - Conservative | 1/14-Present | Chief Investment Officer Equities and Asset Allocation for Janus Capital and Portfolio Manager for other Janus accounts. During the five years prior to 2013, Mr. Chang was Chief Investment Officer and Executive Vice President for American Century Investments. | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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Trustees and Officers (unaudited) (continued)
OFFICERS (continued)
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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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-0815-93924 | 125-02-93020 08-15 |
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annual report
June 30, 2015
Janus Global Allocation Fund – Growth
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
Table of Contents
Janus Global Allocation Fund – Growth
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Janus Global Allocation Fund - Growth (unaudited)
FUND SNAPSHOT Broad, actively managed global diversification allows flexibility to capture the best-performing asset classes regardless of geographies. In addition, we seek to dampen the fund’s overall volatility through the use of alternatives. This, coupled with access to Janus Capital Group’s innovative investment expertise and solutions, should provide superior risk-adjusted returns over the long term. | Enrique Chang co-portfolio manager | Ashwin Alankar co-portfolio manager |
PERFORMANCE OVERVIEW
Janus Global Allocation Fund – Growth’s Class T Shares returned -0.27% for the 12-month period ended June 30, 2015. This compares with a return of 0.71% for the MSCI All Country World Index, the Fund’s primary benchmark, and a return of -0.85% for its secondary benchmark, the Global Growth Allocation Index, an internally calculated, hypothetical combination of total returns from the MSCI All Country World Index (80%) and the Barclays Global Aggregate Bond Index (20%).
MARKET ENVIRONMENT
The S&P 500 Index reached successive record highs during the period. An improving economic picture in the U.S. and a historically low interest rate environment were broadly supportive of U.S. equity markets. Japanese and European equity markets both enjoyed significant gains (in local currencies) during the period, helped by the introduction of accommodative monetary policies. While equity markets experienced gains, the march forward was not without volatility. Markets were volatile in October and December, due to fears about weak economic growth, and again in late June, due to concerns about the possibility of a Greek exit from the eurozone.
Commodities declined precipitously over the first half of the last 12 months, with the energy sector leading the decline. Within fixed income markets, the U.S. Treasury yield curve flattened during the period. Long-dated Treasury yields fell through the end of 2014 as strong U.S. economic growth suggested to investors that the Federal Reserve (Fed) would initiate rate hikes in 2015. Yields then retraced some of their losses as softer-than-expected economic data in the first part of 2015 diminished investor concern of breakout growth and stronger-than-expected inflation. High-yield and investment-grade credit spreads widened during the period amid a flood of new issuance. Shareholder-friendly activity, which may not be friendly to bondholders, also weighed on bond prices. Rates fell across the curve in the eurozone in anticipation of the European Central Bank (ECB) initiating quantitative easing (QE); the announcement of a larger-than-expected QE program then pushed rates down even further.
PERFORMANCE DISCUSSION
Janus Global Allocation Fund – Growth invests across a broad set of Janus, INTECH and Perkins funds that span a wide range of global asset categories with a base allocation of 70% to 85% equity investments, 10% to 25% fixed income investments and 5% to 20% alternative investments that are rebalanced quarterly. The Fund is structured as a “fund of funds” portfolio that provides investors with broad, diversified exposure to various types of investments with an emphasis on managing investment risk.
Janus Global Bond Fund was a large detractor from absolute performance due to its large position size within the fund and the weaker overall global bond market. Janus Overseas Fund was also a large detractor due in part to its exposure to emerging markets, which were weak during the period. Janus International Equity Fund was another top detractor, due in part to its large position size within the Fund and international markets registering negative performance during the year.
Our top absolute contributors were led by the Janus Forty Fund, INTECH U.S. Managed Volatility Fund II (which merged with INTECH U.S. Managed Volatility Fund during the period) and Janus Triton Fund, which benefited from stronger U.S. markets during the period. It is worth noting that Janus Forty Fund also benefited from strong stock selection.
OUTLOOK
In recent weeks global markets have placed much emphasis on Greece’s debt issues, and also on the spillover effect that a sharp drop in Chinese equities could have on the country’s broader economy. We continue to monitor both situations, and do not take any potential source of market risk for granted. However, we believe the rest of Europe’s economy is generally improving, and that
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Janus Global Allocation Fund - Growth (unaudited)
a potential Greek exit from the eurozone is unlikely to become a systemic risk. In China, the amount of leverage some investors have been using to buy equities is a concern and a deleveraging process could cause some short term pain, but we believe the Chinese government still has many tools at its disposal to support the economy and thwart a long-term crisis.
We believe the communication, timing and level of Fed interest rate hikes is a bigger potential risk that investors have become less focused on in recent weeks, but that should bear greater attention. Depending on how the Fed goes about its campaign to tighten monetary policy, it could cause assets to re-price quickly.
While each of these macroeconomic events could cause greater volatility in the days ahead, a more volatile market environment is a challenge we are willing to accept. With greater volatility, the greater the benefits of broad diversification across asset classes and risk factors. As such, we expect the value-add of our funds to be particularly attractive in a macro-economic backdrop where uncertainty is potentially lurking in many corners.
Thank you for investing in Janus Global Allocation Fund – Growth.
2 | JUNE 30, 2015
Table of Contents
(unaudited)
Janus Global Allocation Fund – Growth (% of Net Assets)
As of June 30, 2015
Janus International Equity Fund – Class N Shares | 15 | .6% | ||
Janus Global Bond Fund – Class N Shares | 12 | .8 | ||
Perkins Large Cap Value Fund – Class N Shares | 9 | .6 | ||
INTECH U.S. Managed Volatility Fund(1) – Class N Shares | 9 | .4 | ||
INTECH International Managed Volatility Fund(2) – Class I Shares | 9 | .4 | ||
Janus Adaptive Global Allocation Fund – Class N Shares | 5 | .1 | ||
Janus Diversified Alternatives Fund – Class N Shares | 5 | .1 | ||
Janus Overseas Fund – Class N Shares | 4 | .6 | ||
Janus Global Real Estate Fund – Class I Shares | 4 | .4 | ||
Janus Emerging Markets Fund – Class I Shares | 3 | .8 | ||
Janus Forty Fund – Class N Shares | 2 | .8 | ||
Janus Triton Fund – Class N Shares | 2 | .5 | ||
Janus Global Research Fund – Class I Shares | 2 | .4 | ||
Janus Enterprise Fund – Class N Shares | 2 | .4 | ||
Janus Contrarian Fund – Class I Shares | 2 | .3 | ||
Perkins Small Cap Value Fund – Class N Shares | 2 | .2 | ||
Perkins Mid Cap Value Fund – Class N Shares | 2 | .0 | ||
Janus Global Select Fund – Class I Shares | 1 | .8 | ||
Janus Twenty Fund – Class D Shares | 1 | .2 | ||
Janus Asia Equity Fund – Class I Shares | 0 | .6 | ||
(1) | Formerly named INTECH U.S. Value Fund. | |
(2) | Formerly named INTECH International Fund. |
Janus Global Allocation Fund - Growth At A Glance
Asset Allocation – (% of Net Assets)
As of June 30, 2015
Janus Investment Fund | 3
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Janus Global Allocation Fund - Growth (unaudited)
Performance
Average Annual Total Return – for the periods ended June 30, 2015 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||
One | Five | Since | Total Annual Fund | Net Annual Fund | |||||||
Year | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Janus Global Allocation Fund – Growth – Class A Shares | |||||||||||
NAV | –0.40% | 9.65% | 6.59% | 1.17% | 1.17% | ||||||
MOP | –6.12% | 8.35% | 5.93% | ||||||||
Janus Global Allocation Fund – Growth – Class C Shares | |||||||||||
NAV | –1.18% | 8.79% | 5.78% | 1.96% | 1.95% | ||||||
CDSC | –2.13% | 8.79% | 5.78% | ||||||||
Janus Global Allocation Fund – Growth – Class D Shares(1) | –0.24% | 9.84% | 6.77% | 1.00% | 1.00% | ||||||
Janus Global Allocation Fund – Growth – Class I Shares | –0.10% | 9.93% | 6.73% | 0.94% | 0.94% | ||||||
Janus Global Allocation Fund – Growth – Class S Shares | –0.54% | 9.47% | 6.38% | 1.34% | 1.34% | ||||||
Janus Global Allocation Fund – Growth – Class T Shares | –0.27% | 9.75% | 6.73% | 1.09% | 1.09% | ||||||
MSCI All Country World IndexSM | 0.71% | 11.93% | 5.57% | ||||||||
Global Growth Allocation Index | –0.85% | 10.01% | 5.45% | ||||||||
Morningstar Quartile – Class T Shares | 2nd | 1st | 1st | ||||||||
Morningstar Ranking – based on total returns for World Allocation Funds | 171/571 | 79/384 | 51/296 | ||||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
See important disclosures on the next page.
4 | JUNE 30, 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.
Performance of the Janus Global Allocation Funds depends on that of the underlying funds. They are subject to the volatility of the financial markets. Because Janus Capital is the adviser to the Fund and to the underlying affiliated funds held within the Fund, it is subject to certain potential conflicts of interest.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Class A Shares, Class C Shares, and Class S Shares commenced operations on July 6, 2009. Performance shown for each class for periods prior to July 6, 2009, reflects the performance of the Fund’s Class J Shares, the initial share class (renamed Class T Shares effective February 16, 2010), calculated using the fees and expenses of each respective share class, without the effect of any fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
Class I Shares commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 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.”
Effective September 1, 2014, Enrique Chang and Ashwin Alankar are Co-Portfolio Managers of the Fund.
* | The Fund’s inception date – December 30, 2005 | |
(1) | Closed to certain new investors. |
Janus Investment Fund | 5
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Janus Global Allocation Fund - Growth (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,020.50 | $ | 2.20 | $ | 1,000.00 | $ | 1,022.61 | $ | 2.21 | 0.44% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,016.50 | $ | 6.10 | $ | 1,000.00 | $ | 1,018.74 | $ | 6.11 | 1.22% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,021.80 | $ | 1.40 | $ | 1,000.00 | $ | 1,023.41 | $ | 1.40 | 0.28% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,022.50 | $ | 1.05 | $ | 1,000.00 | $ | 1,023.75 | $ | 1.05 | 0.21% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,019.90 | $ | 3.06 | $ | 1,000.00 | $ | 1,021.77 | $ | 3.06 | 0.61% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,021.10 | $ | 1.80 | $ | 1,000.00 | $ | 1,023.01 | $ | 1.81 | 0.36% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 181/365 (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 | JUNE 30, 2015
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Janus Global Allocation Fund - Growth
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Investment Companies£ – 100.0% | ||||||||||
Alternative Funds – 5.1% | ||||||||||
1,372,379 | Janus Diversified Alternatives Fund – Class N Shares | $ | 13,778,683 | |||||||
13,778,683 | ||||||||||
Equity Funds – 82.2% | ||||||||||
3,206,838 | INTECH International Managed Volatility Fund – Class I Shares(1) | 25,654,703 | ||||||||
2,855,113 | INTECH U.S. Managed Volatility Fund – Class N Shares(2) | 25,667,469 | ||||||||
1,422,700 | Janus Adaptive Global Allocation Fund – Class N Shares* | 13,800,194 | ||||||||
148,691 | Janus Asia Equity Fund – Class I Shares | 1,534,496 | ||||||||
302,954 | Janus Contrarian Fund – Class I Shares | 6,240,847 | ||||||||
1,186,499 | Janus Emerging Markets Fund – Class I Shares | 10,227,621 | ||||||||
70,818 | Janus Enterprise Fund – Class N Shares | 6,544,264 | ||||||||
230,420 | Janus Forty Fund – Class N Shares | 7,613,067 | ||||||||
1,073,110 | Janus Global Real Estate Fund – Class I Shares | 12,104,683 | ||||||||
97,133 | Janus Global Research Fund – Class I Shares | 6,572,975 | ||||||||
349,033 | Janus Global Select Fund – Class I Shares | 4,952,771 | ||||||||
3,335,442 | Janus International Equity Fund – Class N Shares | 42,827,074 | ||||||||
378,584 | Janus Overseas Fund – Class N Shares | 12,591,701 | ||||||||
265,133 | Janus Triton Fund – Class N Shares | 6,760,883 | ||||||||
53,517 | Janus Twenty Fund – Class D Shares | 3,164,487 | ||||||||
1,619,377 | Perkins Large Cap Value Fund – Class N Shares | 26,120,555 | ||||||||
272,004 | Perkins Mid Cap Value Fund – Class N Shares | 5,355,766 | ||||||||
266,151 | Perkins Small Cap Value Fund – Class N Shares | 5,921,863 | ||||||||
223,655,419 | ||||||||||
Fixed Income Funds – 12.7% | ||||||||||
3,624,977 | Janus Global Bond Fund – Class N Shares | 34,727,280 | ||||||||
Total Investments (total cost $237,995,258) – 100.0% | 272,161,382 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0)% | (79,081) | |||||||||
Net Assets – 100% | $ | 272,082,301 | ||||||||
(1) | Formerly named INTECH International Fund. | |
(2) | Formerly named INTECH U.S. Value Fund. |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
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Notes to Schedule of Investments and Other Information
Barclays Global Aggregate Bond Index | A broad-based measure of the global investment grade fixed-rate debt markets. | |
Global Growth Allocation Index | An internally-calculated, hypothetical combination of total returns from the MSCI All Country World IndexSM (80%) and the Barclays Global Aggregate Bond Index (20%). | |
MSCI All Country World IndexSM | An unmanaged, free float-adjusted market capitalization weighted index composed of stocks of companies located in countries throughout the world. It is designed to measure equity market performance in global developed and emerging markets. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
S&P 500® Index | Measures broad U.S. equity performance. |
* | 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 year ended June 30, 2015. Unless otherwise indicated, all information in the table is for the year ended June 30, 2015. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 6/30/15 | Gain/(Loss) | Income | at 6/30/15 | |||||||||||||||
Janus Global Allocation Fund – Growth | |||||||||||||||||||||
INTECH International Managed Volatility Fund(1) – Class I Shares | 2,912,258 | 555,123 | (260,543) | 3,206,838 | ($ | 122,013) | $ | 620,734 | $ | 25,654,703 | |||||||||||
INTECH U.S. Managed Volatility Fund(2) – Class I Shares | 1,969,517 | 26,176 | (1,995,693) | – | 132,761 | – | – | ||||||||||||||
INTECH U.S. Managed Volatility Fund(2) – Class N Shares | – | 3,886,805 | (1,031,692) | 2,855,113 | 4,376,473 | 1,380,795 | 25,667,469 | ||||||||||||||
INTECH U.S. Managed Volatility Fund II(3) – Class I Shares | 652,232 | 20,315 | (672,547) | – | 562,699 | 153,327 | – | ||||||||||||||
Janus Adaptive Global Allocation Fund – Class N Shares | – | 1,423,087 | (387) | 1,422,700 | (19) | – | 13,800,194 | ||||||||||||||
Janus Asia Equity Fund – Class I Shares | 152,892 | 18,501 | (22,702) | 148,691 | 12,686 | 84,130 | 1,534,496 | ||||||||||||||
Janus Contrarian Fund – Class I Shares | 283,411 | 40,032 | (20,489) | 302,954 | 35,652 | 57,434 | 6,240,847 | ||||||||||||||
Janus Diversified Alternatives Fund – Class N Shares | 1,440,103 | 67,677 | (135,401) | 1,372,379 | 9,471 | 6,826 | 13,778,683 | ||||||||||||||
Janus Emerging Markets Fund – Class I Shares | 1,160,557 | 132,066 | (106,124) | 1,186,499 | (31,769) | 184,752 | 10,227,621 | ||||||||||||||
Janus Enterprise Fund – Class N Shares | 69,726 | 6,209 | (5,117) | 70,818 | 38,546 | 6,325 | 6,544,264 | ||||||||||||||
Janus Forty Fund – Class N Shares | 158,324 | 91,245 | (19,149) | 230,420 | (163,756) | 123,347 | 7,613,067 | ||||||||||||||
Janus Global Bond Fund – Class N Shares | 3,847,447 | 571,976 | (794,446) | 3,624,977 | (355,019) | 2,157,727 | 34,727,280 | ||||||||||||||
Janus Global Real Estate Fund – Class I Shares | 1,085,957 | 76,410 | (89,257) | 1,073,110 | 37,277 | 273,380 | 12,104,683 | ||||||||||||||
Janus Global Research Fund – Class I Shares | 184,835 | 7,822 | (95,524) | 97,133 | 1,395,296 | 130,057 | 6,572,975 | ||||||||||||||
Janus Global Select Fund – Class I Shares | 668,442 | 26,351 | (345,760) | 349,033 | 1,083,316 | 72,583 | 4,952,771 | ||||||||||||||
Janus International Equity Fund – Class N Shares | 3,274,565 | 341,826 | (280,949) | 3,335,442 | 40,308 | 939,482 | 42,827,074 | ||||||||||||||
Janus Overseas Fund – Class N Shares | 400,993 | 19,088 | (41,497) | 378,584 | (214,316) | 159,667 | 12,591,701 | ||||||||||||||
Janus Triton Fund – Class N Shares | 250,424 | 33,390 | (18,681) | 265,133 | 26,626 | 38,567 | 6,760,883 | ||||||||||||||
Janus Twenty Fund – Class D Shares | 51,292 | 10,085 | (7,860) | 53,517 | 86,748 | 46,994 | 3,164,487 | ||||||||||||||
Perkins Large Cap Value Fund – Class N Shares | 873,885 | 865,590 | (120,098) | 1,619,377 | 2,837 | 501,264 | 26,120,555 | ||||||||||||||
Perkins Mid Cap Value Fund – Class N Shares | 232,788 | 67,174 | (27,958) | 272,004 | 76,528 | 248,064 | 5,355,766 | ||||||||||||||
Perkins Small Cap Value Fund – Class N Shares | 217,586 | 67,931 | (19,366) | 266,151 | (12,431) | 332,494 | 5,921,863 | ||||||||||||||
Total | $ | 7,017,901 | $ | 7,517,949 | $ | 272,161,382 | |||||||||||||||
(1) | Formerly named INTECH International Fund. | |
(2) | Formerly named INTECH U.S. Value Fund. | |
(3) | Formerly named INTECH U.S. Growth Fund. |
8 | JUNE 30, 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 June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | |||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||
Janus Global Allocation Fund – Growth | ||||||||
Assets | ||||||||
Investments in Securities: | ||||||||
Investment Companies | ||||||||
Alternative Funds | $ 13,778,683 | $– | $– | |||||
Equity Funds | 223,655,419 | – | – | |||||
Fixed Income Funds | 34,727,280 | – | – | |||||
Total Assets | $272,161,382 | $– | $– | |||||
Janus Investment Fund | 9
Table of Contents
Statement of Assets and Liabilities
Janus Global | ||||
As of June 30, 2015 | Allocation Fund - Growth | |||
Assets: | ||||
Investments, at cost | $ | 237,995,258 | ||
Affiliated investments, at value | 272,161,382 | |||
Non-interested Trustees’ deferred compensation | 5,440 | |||
Receivables: | ||||
Investments sold | 75,145 | |||
Fund shares sold | 110,138 | |||
Dividends from affiliates | 8,731 | |||
Total Assets | 272,360,836 | |||
Liabilities: | ||||
Payables: | ||||
Fund shares repurchased | 131,085 | |||
Advisory fees | 11,374 | |||
Transfer agent fees and expenses | 50,325 | |||
12b-1 Distribution and shareholder servicing fees | 21,696 | |||
Non-interested Trustees’ fees and expenses | 1,750 | |||
Non-interested Trustees’ deferred compensation fees | 5,440 | |||
Accrued expenses and other payables | 56,865 | |||
Total Liabilities | 278,535 | |||
Net Assets | $ | 272,082,301 | ||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 218,966,877 | ||
Undistributed net investment income/(loss) | 723,612 | |||
Undistributed net realized gain/(loss) from investments | 18,224,607 | |||
Unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 34,167,205 | |||
Total Net Assets | $ | 272,082,301 | ||
Net Assets - Class A Shares | $ | 4,279,093 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 296,250 | |||
Net Asset Value Per Share(1) | $ | 14.44 | ||
Maximum Offering Price Per Share(2) | $ | 15.32 | ||
Net Assets - Class C Shares | $ | 5,638,966 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 397,279 | |||
Net Asset Value Per Share(1) | $ | 14.19 | ||
Net Assets - Class D Shares | $ | 230,322,846 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 15,850,908 | |||
Net Asset Value Per Share | $ | 14.53 | ||
Net Assets - Class I Shares | $ | 6,527,362 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 449,045 | |||
Net Asset Value Per Share | $ | 14.54 | ||
Net Assets - Class S Shares | $ | 2,083,413 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 144,972 | |||
Net Asset Value Per Share | $ | 14.37 | ||
Net Assets - Class T Shares | $ | 23,230,621 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,600,929 | |||
Net Asset Value Per Share | $ | 14.51 |
(1) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(2) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements.
10 | JUNE 30, 2015
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Statement of Operations
Janus Global | ||||
For the year ended June 30, 2015 | Allocation Fund - Growth | |||
Investment Income: | ||||
Dividends from affiliates | $ | 7,517,949 | ||
Total Investment Income | 7,517,949 | |||
Expenses: | ||||
Advisory fees | 138,724 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 10,853 | |||
Class C Shares | 55,938 | |||
Class S Shares | 5,414 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 287,341 | |||
Class S Shares | 5,414 | |||
Class T Shares | 49,176 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 2,927 | |||
Class C Shares | 5,462 | |||
Class I Shares | 5,924 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 558 | |||
Class C Shares | 912 | |||
Class D Shares | 59,871 | |||
Class I Shares | 363 | |||
Class S Shares | 73 | |||
Class T Shares | 958 | |||
Shareholder reports expense | 68,136 | |||
Registration fees | 105,593 | |||
Professional fees | 41,277 | |||
Non-interested Trustees’ fees and expenses | 6,117 | |||
Other expenses | 6,244 | |||
Total Expenses | 857,275 | |||
Net Expenses | 857,275 | |||
Net Investment Income/(Loss) | 6,660,674 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments in affiliates | 7,017,901 | |||
Capital gain distributions from underlying funds | 15,773,250 | |||
Total Net Realized Gain/(Loss) on Investments | 22,791,151 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments and non-interested Trustees’ deferred compensation | (30,355,215) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (30,355,215) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (903,390) |
See Notes to Financial Statements.
Janus Investment Fund | 11
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Statements of Changes in Net Assets
Janus Global | ||||||||
Allocation Fund - Growth | ||||||||
For each year ended June 30 | 2015 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 6,660,674 | $ | 4,463,278 | ||||
Net realized gain/(loss) from investments in affiliates | 22,791,151 | 11,924,088 | ||||||
Change in unrealized net appreciation/depreciation | (30,355,215) | 31,164,240 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (903,390) | 47,551,606 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income | ||||||||
Class A Shares | (84,356) | (56,037) | ||||||
Class C Shares | (72,735) | (46,840) | ||||||
Class D Shares | (4,981,947) | (4,176,004) | ||||||
Class I Shares | (132,038) | (104,445) | ||||||
Class S Shares | (39,489) | (26,402) | ||||||
Class T Shares | (389,917) | (236,452) | ||||||
Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | (134,645) | (58,731) | ||||||
Class C Shares | (178,768) | (86,580) | ||||||
Class D Shares | (7,389,286) | (4,049,832) | ||||||
Class I Shares | (188,533) | (97,315) | ||||||
Class S Shares | (67,736) | (31,401) | ||||||
Class T Shares | (585,872) | (233,355) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (14,245,322) | (9,203,394) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 1,219,042 | 1,975,296 | ||||||
Class C Shares | 1,116,402 | 1,485,435 | ||||||
Class D Shares | 19,332,904 | 27,691,886 | ||||||
Class I Shares | 1,878,602 | 2,136,869 | ||||||
Class S Shares | 975,936 | 390,819 | ||||||
Class T Shares | 12,020,969 | 10,029,284 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 214,745 | 113,474 | ||||||
Class C Shares | 229,569 | 123,951 | ||||||
Class D Shares | 12,283,765 | 8,162,485 | ||||||
Class I Shares | 300,436 | 186,288 | ||||||
Class S Shares | 107,225 | 57,803 | ||||||
Class T Shares | 931,728 | 451,938 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (1,334,946) | (1,358,287) | ||||||
Class C Shares | (896,823) | (1,135,553) | ||||||
Class D Shares | (37,513,445) | (36,360,911) | ||||||
Class I Shares | (1,273,593) | (1,788,960) | ||||||
Class S Shares | (681,157) | (682,164) | ||||||
Class T Shares | (7,112,711) | (5,941,854) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | 1,798,648 | 5,537,799 | ||||||
Net Increase/(Decrease) in Net Assets | (13,350,064) | 43,886,011 | ||||||
Net Assets: | ||||||||
Beginning of period | 285,432,365 | 241,546,354 | ||||||
End of period | $ | 272,082,301 | $ | 285,432,365 | ||||
Undistributed Net Investment Income/(Loss) | $ | 723,612 | $ | 60,879 |
See Notes to Financial Statements.
12 | JUNE 30, 2015
Table of Contents
Financial Highlights
Class A Shares
Janus Global Allocation Fund - Growth | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $15.28 | $13.19 | $11.78 | $12.49 | $10.47 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.33(1) | 0.20(1) | 0.23 | 0.16 | 0.19 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.42) | 2.38 | 1.41 | (0.68) | 2.04 | |||||||||||||||||
Total from Investment Operations | (0.09) | 2.58 | 1.64 | (0.52) | 2.23 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.29) | (0.24) | (0.23) | (0.19) | (0.21) | |||||||||||||||||
Distributions (from capital gains) | (0.46) | (0.25) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.75) | (0.49) | (0.23) | (0.19) | (0.21) | |||||||||||||||||
Net Asset Value, End of Period | $14.44 | $15.28 | $13.19 | $11.78 | $12.49 | |||||||||||||||||
Total Return* | (0.48)% | 19.82% | 14.08% | (4.04)% | 21.38% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $4,279 | $4,437 | $3,182 | $2,683 | $2,768 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $4,341 | $3,583 | $2,912 | $2,684 | $1,640 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses**(2) | 0.44% | 0.46% | 0.41% | 0.48% | 0.44% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)**(2) | 0.44% | 0.46% | 0.41% | 0.48% | 0.44% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)**(2) | 2.25% | �� | 1.41% | 1.72% | 1.34% | 1.61% | ||||||||||||||||
Portfolio Turnover Rate | 19% | 13% | 45% | 18% | 26% |
Class C Shares
Janus Global Allocation Fund - Growth | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $15.03 | $13.00 | $11.60 | $12.37 | $10.40 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.22(1) | 0.11(1) | 0.12 | 0.08 | 0.16 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.41) | 2.31 | 1.41 | (0.69) | 1.96 | |||||||||||||||||
Total from Investment Operations | (0.19) | 2.42 | 1.53 | (0.61) | 2.12 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.19) | (0.14) | (0.13) | (0.16) | (0.15) | |||||||||||||||||
Distributions (from capital gains) | (0.46) | (0.25) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.65) | (0.39) | (0.13) | (0.16) | (0.15) | |||||||||||||||||
Net Asset Value, End of Period | $14.19 | $15.03 | $13.00 | $11.60 | $12.37 | |||||||||||||||||
Total Return* | (1.18)% | 18.79% | 13.30% | (4.82)% | 20.39% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $5,639 | $5,508 | $4,325 | $3,791 | $2,736 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $5,594 | $4,944 | $4,126 | $3,325 | $1,446 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses**(2) | 1.23% | 1.21% | 1.21% | 1.34% | 1.21% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)**(2) | 1.23% | 1.21% | 1.21% | 1.34% | 1.21% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)**(2) | 1.52% | 0.80% | 0.93% | 0.46% | 0.51% | |||||||||||||||||
Portfolio Turnover Rate | 19% | 13% | 45% | 18% | 26% |
* | 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. | |
(2) | Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. |
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Financial Highlights (continued)
Class D Shares
Janus Global Allocation Fund - Growth | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $15.36 | $13.26 | $11.85 | $12.54 | $10.49 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.36(1) | 0.25(1) | 0.25 | 0.18 | 0.21 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.42) | 2.36 | 1.42 | (0.67) | 2.05 | |||||||||||||||||
Total from Investment Operations | (0.06) | 2.61 | 1.67 | (0.49) | 2.26 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.31) | (0.26) | (0.26) | (0.20) | (0.21) | |||||||||||||||||
Distributions (from capital gains) | (0.46) | (0.25) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.77) | (0.51) | (0.26) | (0.20) | (0.21) | |||||||||||||||||
Net Asset Value, End of Period | $14.53 | $15.36 | $13.26 | $11.85 | $12.54 | |||||||||||||||||
Total Return* | (0.24)% | 19.95% | 14.21% | (3.77)% | 21.56% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $230,323 | $249,215 | $215,671 | $205,107 | $227,179 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $239,451 | $234,801 | $213,579 | $207,366 | $214,398 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses**(2) | 0.28% | 0.29% | 0.28% | 0.28% | 0.28% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)**(2) | 0.28% | 0.29% | 0.28% | 0.28% | 0.28% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)**(2) | 2.43% | 1.72% | 1.89% | 1.52% | 1.74% | |||||||||||||||||
Portfolio Turnover Rate | 19% | 13% | 45% | 18% | 26% |
Class I Shares
Janus Global Allocation Fund - Growth | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $15.37 | $13.27 | $11.86 | $12.53 | $10.49 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.36(1) | 0.27(1) | 0.25 | 0.20 | 0.22 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.40) | 2.35 | 1.43 | (0.67) | 2.04 | |||||||||||||||||
Total from Investment Operations | (0.04) | 2.62 | 1.68 | (0.47) | 2.26 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.33) | (0.27) | (0.27) | (0.20) | (0.22) | |||||||||||||||||
Distributions (from capital gains) | (0.46) | (0.25) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.79) | (0.52) | (0.27) | (0.20) | (0.22) | |||||||||||||||||
Net Asset Value, End of Period | $14.54 | $15.37 | $13.27 | $11.86 | $12.53 | |||||||||||||||||
Total Return* | (0.18)% | 20.03% | 14.32% | (3.62)% | 21.58% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $6,527 | $5,944 | $4,648 | $3,647 | $2,316 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $6,226 | $5,413 | $4,349 | $2,587 | $2,178 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses**(2) | 0.21% | 0.23% | 0.20% | 0.21% | 0.25% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)**(2) | 0.21% | 0.23% | 0.20% | 0.21% | 0.25% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)**(2) | 2.42% | 1.86% | 1.97% | 1.44% | 1.72% | |||||||||||||||||
Portfolio Turnover Rate | 19% | 13% | 45% | 18% | 26% |
* | 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. | |
(2) | Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. |
See Notes to Financial Statements.
14 | JUNE 30, 2015
Table of Contents
Class S Shares
Janus Global Allocation Fund - Growth | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $15.21 | $13.13 | $11.74 | $12.45 | $10.45 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.34(1) | 0.20(1) | 0.20 | 0.18 | 0.21 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.45) | 2.34 | 1.41 | (0.70) | 2.00 | |||||||||||||||||
Total from Investment Operations | (0.11) | 2.54 | 1.61 | (0.52) | 2.21 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.27) | (0.21) | (0.22) | (0.19) | (0.21) | |||||||||||||||||
Distributions (from capital gains) | (0.46) | (0.25) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.73) | (0.46) | (0.22) | (0.19) | (0.21) | |||||||||||||||||
Net Asset Value, End of Period | $14.37 | $15.21 | $13.13 | $11.74 | $12.45 | |||||||||||||||||
Total Return* | (0.62)% | 19.60% | 13.84% | (4.10)% | 21.15% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $2,083 | $1,807 | $1,785 | $1,613 | $753 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $2,166 | $1,763 | $1,902 | $1,268 | $558 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses**(2) | 0.62% | 0.63% | 0.58% | 0.60% | 0.67% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)**(2) | 0.62% | 0.63% | 0.58% | 0.60% | 0.67% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)**(2) | 2.29% | 1.42% | 1.51% | 1.11% | 1.61% | |||||||||||||||||
Portfolio Turnover Rate | 19% | 13% | 45% | 18% | 26% |
Class T Shares
Janus Global Allocation Fund - Growth | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $15.35 | $13.25 | $11.84 | $12.54 | $10.48 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.34(1) | 0.22(1) | 0.29 | 0.15 | 0.21 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.41) | 2.39 | 1.37 | (0.65) | 2.04 | |||||||||||||||||
Total from Investment Operations | (0.07) | 2.61 | 1.66 | (0.50) | 2.25 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.31) | (0.26) | (0.25) | (0.20) | (0.19) | |||||||||||||||||
Distributions (from capital gains) | (0.46) | (0.25) | – | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.77) | (0.51) | (0.25) | (0.20) | (0.19) | |||||||||||||||||
Net Asset Value, End of Period | $14.51 | $15.35 | $13.25 | $11.84 | $12.54 | |||||||||||||||||
Total Return* | (0.36)% | 19.93% | 14.18% | (3.90)% | 21.55% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $23,231 | $18,521 | $11,935 | $12,992 | $12,451 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $19,670 | $14,295 | $13,567 | $12,693 | $11,585 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses**(2) | 0.37% | 0.38% | 0.36% | 0.38% | 0.35% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)**(2) | 0.37% | 0.33% | 0.30% | 0.34% | 0.35% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)**(2) | 2.29% | 1.52% | 1.88% | 1.46% | 1.62% | |||||||||||||||||
Portfolio Turnover Rate | 19% | 13% | 45% | 18% | 26% |
* | 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. | |
(2) | Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
Janus Global Allocation Fund – Growth (the “Fund”) is a series fund. The Fund operates as a “fund of funds,” meaning substantially all of the Fund’s assets will be invested in other Janus funds (the “underlying funds”). The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
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.
Underlying Funds
The Fund invests in a variety of underlying funds to pursue a target allocation of equity investments, fixed-income securities, and alternative investments and may also invest in money market instruments or cash/cash equivalents. The Fund has a target allocation, which is how the Fund’s investments generally will be allocated among the major asset classes over the long term, as well as normal ranges, under normal market conditions, within which the Fund’s asset class allocations generally will vary over short-term periods. The Fund’s long-term expected average asset allocation is as follows: 75% to equity investments, 15% to fixed-income securities and money market instruments, and 10% to alternative investments. Additional details and descriptions of the investment objectives and strategies of each of the underlying funds are available in the Fund’s and underlying funds’ prospectuses. The Trustees of the underlying funds may change the investment objectives or strategies of the underlying funds at any time without prior notice to Fund shareholders.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
The Fund’s net asset value (“NAV”) is calculated based upon the NAV of each of the underlying funds in which the Fund invests on the day of valuation. The NAV for each class of the underlying funds is computed by dividing the total value of securities and other assets allocated to the class, less liabilities allocated to that class, by the total number of shares outstanding for the class.
16 | JUNE 30, 2015
Table of Contents
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
The Fund classifies each of its investments in underlying funds as Level 1, without consideration as to the classification level of the specific investments held by the underlying funds.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
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 June 30, 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 year. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities held by the underlying funds will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Any distributions from the underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which may be allocated pro rata to each of the Funds in the Trust. Additionally, the Fund, as a shareholder in the underlying funds, will also indirectly bear its pro rata share of the expenses incurred by the underlying funds. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
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Notes to Financial Statements (continued)
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
The underlying funds may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the underlying funds distribute such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
2. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Janus Global Allocation Fund - Growth | All Asset Levels | 0.05 | ||||||||
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any expenses of an underlying fund (acquired fund fees and expenses), 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
New Expense | Previous Expense | |||||||||
Limit (%) | Limit (%) | |||||||||
(November 1, 2014 | (until November 1, | |||||||||
Fund | to present) | 2014) | ||||||||
Janus Global Allocation Fund - Growth | 0.14 | 0.19 | ||||||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
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
18 | JUNE 30, 2015
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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.
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 $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the year ended June 30, 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 June 30, 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 year ended June 30, 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 $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 2015.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the year ended June 30, 2015 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Janus Investment Fund | 19
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Notes to Financial Statements (continued)
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 year ended June 30, 2015, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Janus Global Allocation Fund - Growth | $ | 3,857 | ||||
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 year ended June 30, 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 year ended June 30, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Janus Global Allocation Fund - Growth | $ | 487 | ||||
3. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation and tax equalization.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
Janus Global Allocation Fund - Growth | $789,870 | $20,628,574 | $– | $– | $– | $(4,359) | $31,701,339 | ||||||||||||||||||||||||
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 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.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
Janus Global Allocation Fund - Growth | $ | 240,460,043 | $ | 35,641,929 | $ | (3,940,590) | ||||||||
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. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the year ended June 30, 2015
Distributions | |||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | ||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | |||||||||||||||
Janus Global Allocation Fund - Growth | $ | 5,745,473 | $ | 8,499,849 | $ | – | $ | – | |||||||||||
For the year ended June 30, 2014
Distributions | |||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | ||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | |||||||||||||||
Janus Global Allocation Fund - Growth | $ | 4,646,180 | $ | 4,557,214 | $ | – | $ | – | |||||||||||
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Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
Janus Global Allocation Fund - Growth | $ | 996,707 | $ | (236,641) | $ | (760,066) | ||||||||
Capital has been adjusted by $996,707, including $760,036 of long-term capital gain, for distributions in connection with Fund share redemptions (tax equalization).
4. | Capital Share Transactions |
Janus Global | ||||||||||
Allocation Fund - | ||||||||||
Growth | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 82,304 | 136,813 | ||||||||
Reinvested dividends and distributions | 15,049 | 7,869 | ||||||||
Shares repurchased | (91,595) | (95,401) | ||||||||
Net Increase/(Decrease) in Fund Shares | 5,758 | 49,281 | ||||||||
Shares Outstanding, Beginning of Period | 290,492 | 241,211 | ||||||||
Shares Outstanding, End of Period | 296,250 | 290,492 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 76,677 | 105,041 | ||||||||
Reinvested dividends and distributions | 16,305 | 8,704 | ||||||||
Shares repurchased | (62,064) | (80,190) | ||||||||
Net Increase/(Decrease) in Fund Shares | 30,918 | 33,555 | ||||||||
Shares Outstanding, Beginning of Period | 366,361 | 332,806 | ||||||||
Shares Outstanding, End of Period | 397,279 | 366,361 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 1,307,405 | 1,917,281 | ||||||||
Reinvested dividends and distributions | 856,609 | 563,319 | ||||||||
Shares repurchased | (2,537,847) | (2,520,624) | ||||||||
Net Increase/(Decrease) in Fund Shares | (373,833) | (40,024) | ||||||||
Shares Outstanding, Beginning of Period | 16,224,741 | 16,264,765 | ||||||||
Shares Outstanding, End of Period | 15,850,908 | 16,224,741 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 127,301 | 148,301 | ||||||||
Reinvested dividends and distributions | 20,951 | 12,856 | ||||||||
Shares repurchased | (85,962) | (124,698) | ||||||||
Net Increase/(Decrease) in Fund Shares | 62,290 | 36,459 | ||||||||
Shares Outstanding, Beginning of Period | 386,755 | 350,296 | ||||||||
Shares Outstanding, End of Period | 449,045 | 386,755 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 65,045 | 27,372 | ||||||||
Reinvested dividends and distributions | 7,546 | 4,022 | ||||||||
Shares repurchased | (46,477) | (48,432) | ||||||||
Net Increase/(Decrease) in Fund Shares | 26,114 | (17,038) | ||||||||
Shares Outstanding, Beginning of Period | 118,858 | 135,896 | ||||||||
Shares Outstanding, End of Period | 144,972 | 118,858 |
Janus Investment Fund | 21
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Notes to Financial Statements (continued)
Janus Global | ||||||||||
Allocation Fund - | ||||||||||
Growth | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 809,079 | 688,523 | ||||||||
Reinvested dividends and distributions | 65,019 | 31,211 | ||||||||
Shares repurchased | (479,818) | (413,727) | ||||||||
Net Increase/(Decrease) in Fund Shares | 394,280 | 306,007 | ||||||||
Shares Outstanding, Beginning of Period | 1,206,649 | 900,642 | ||||||||
Shares Outstanding, End of Period | 1,600,929 | 1,206,649 |
5. | Purchases and Sales of Investment Securities |
For the year ended June 30, 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 Allocation Fund - Growth | $ | 62,303,554 | $ | 52,279,054 | $ | – | $ | – | ||||||
6. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of Janus Global Allocation Fund – Growth:
of Janus Global Allocation Fund – Growth:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Janus Global Allocation Fund – Growth (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
Janus Investment Fund | 23
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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
24 | JUNE 30, 2015
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providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
Janus Investment Fund | 25
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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 June 30, 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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Designation Requirements (unaudited)
For federal income tax purposes, the Fund designated the following for the year ended June 30, 2015:
Capital Gain Distributions
Fund | ||||||||||
Janus Global Allocation Fund - Growth | $ | 9,259,885 | ||||||||
Foreign Taxes Paid and Foreign Source Income
Fund | Foreign Taxes Paid | Foreign Source Income | ||||||||
Janus Global Allocation Fund - Growth | $ | 221,805 | $ | 2,147,561 | ||||||
Dividends Received Deduction Percentage
Fund | ||||||||||
Janus Global Allocation Fund - Growth | 100 | % | ||||||||
Qualified Dividend Income Percentage
Fund | ||||||||||
Janus Global Allocation Fund - Growth | 100 | % | ||||||||
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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
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OFFICERS
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
Ashwin Alankar 151 Detroit Street Denver, CO 80206 DOB: 1974 | Executive Vice President and Co-Portfolio Manager Janus Global Allocation Fund - Growth | 9/14-Present | Senior Vice President and Head of Asset Allocation and Risk Management of Janus Capital and Portfolio Manager for other Janus accounts. Formerly, Co-Chief Investment Officer of AllianceBernstein’s Tail Risk Parity (2010-2014) and Partner and Portfolio Manager for Platinum Grove Asset Management (2003-2010). | |||
Enrique Chang 151 Detroit Street Denver, CO 80206 DOB: 1962 | Executive Vice President and Co-Portfolio Manager Janus Global Allocation Fund - Growth | 1/14-Present | Chief Investment Officer Equities and Asset Allocation for Janus Capital and Portfolio Manager for other Janus accounts. During the five years prior to 2013, Mr. Chang was Chief Investment Officer and Executive Vice President for American Century Investments. | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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Trustees and Officers (unaudited) (continued)
OFFICERS (continued)
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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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-0815-94030 | 125-02-93021 08-15 |
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annual report
June 30, 2015
Janus Global Allocation Fund – Moderate
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
Table of Contents
Janus Global Allocation Fund – Moderate
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Janus Global Allocation Fund - Moderate (unaudited)
FUND SNAPSHOT Broad, actively managed, global diversification allows flexibility to capture the best-performing asset classes regardless of geographies. In addition, we seek to dampen the fund’s overall volatility through the use of alternatives. This, coupled with access to Janus Capital Group’s innovative investment expertise and solutions, should provide superior risk-adjusted returns over the long term. | Enrique Chang co-portfolio manager | Ashwin Alankar co-portfolio manager |
PERFORMANCE OVERVIEW
Janus Global Allocation Fund – Moderate’s Class T Shares returned -0.80% for the 12-month period ended June 30, 2015. This compares with a return of 0.71% for its primary benchmark, the MSCI All Country World Index, and a -2.42% return for its secondary benchmark, the Global Moderate Allocation Index, an internally calculated, hypothetical combination of total returns from the MSCI All Country World Index (60%) and the Barclays Global Aggregate Bond Index (40%).
MARKET ENVIRONMENT
The S&P 500 Index reached successive record highs during the period. An improving economic picture in the U.S. and a historically low interest rate environment were broadly supportive of U.S. equity markets. Japanese and European equity markets both enjoyed significant gains (in local currencies) during the period, helped by the introduction of accommodative monetary policies. While equity markets experienced gains, the march forward was not without volatility. Markets were volatile in October and December, due to fears about weak economic growth, and again in late June, due to concerns about the possibility of a Greek exit from the eurozone.
Commodities declined precipitously over the first half of the last 12 months, with the energy sector leading the decline. Strengthening dollar a slowdown in consumption from China all were the major catalysts for this decline, which put miners and the energy sector at risk. Within fixed income markets, the U.S. Treasury yield curve flattened during the period. Long-dated Treasury yields fell through the end of 2014 as strong U.S. economic growth suggested to investors that the Federal Reserve (Fed) would initiate rate hikes in 2015. Yields then retraced some of their losses as softer-than-expected economic data in the first part of 2015 diminished investor concern of breakout growth and stronger-than-expected inflation. High-yield and investment-grade credit spreads widened during the period amid a flood of new issuance. Shareholder-friendly activity, which may not be friendly to bondholders, also weighed on bond prices. Rates fell across the curve in the eurozone in anticipation of the European Central Bank (ECB) initiating quantitative easing (QE); the announcement of a larger-than-expected QE program then pushed rates down even further.
PERFORMANCE DISCUSSION
Janus Global Allocation Fund – Moderate invests across a broad set of Janus, INTECH and Perkins funds that span a wide range of global asset categories with a base allocation of 45% to 65% equity investments, 30% to 45% fixed income investments and 5% to 20% alternative investments that are rebalanced quarterly. The Fund is structured as a “fund of funds” portfolio that provides investors with broad, diversified exposure to various types of investments with an emphasis on managing investment risk.
Janus Global Bond Fund was a large detractor from absolute performance due to its large position size within the fund and the weaker overall global bond market. Janus Overseas Fund was also a large detractor due in part to its exposure to emerging markets, which were weak during the period. Janus International Equity Fund was another top detractor, due in part to its large position size within the Fund and international markets registering negative performance during the year.
Our top absolute contributors were led by Janus Triton Fund, INTECH U.S. Managed Volatility Fund II (which merged with INTECH U.S. Managed Volatility Fund during the period) and Janus Forty Fund, which benefited from stronger U.S. markets during the period. It is worth noting that Janus Forty Fund also benefited from strong stock selection.
OUTLOOK
In recent weeks global markets have placed much emphasis on Greece’s debt issues, and also on the spillover effect that a sharp drop in Chinese equities could have on the country’s broader economy. We continue to monitor both situations, and do not take any potential
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Janus Global Allocation Fund - Moderate (unaudited)
source of market risk for granted. However, we believe the rest of Europe’s economy is generally improving, and that a potential Greek exit from the eurozone is unlikely to become a systemic risk. In China, the amount of leverage some investors have been using to buy equities is a concern and a deleveraging process could cause some short term pain, but we believe the Chinese government still has many tools at its disposal to support the economy and thwart a long-term crisis.
We believe the communication, timing and level of Fed interest rate hikes is a bigger potential risk that investors have become less focused on in recent weeks, but that should bear greater attention. Depending on how the Fed goes about its campaign to tighten monetary policy, it could cause assets to re-price quickly.
While each of these macroeconomic events could cause greater volatility in the days ahead, a more volatile market environment is a challenge we are willing to accept. With greater volatility, the greater the benefits of broad diversification across asset classes and risk factors. As such, we expect the value-add of our funds to be particularly attractive in a macro-economic backdrop where uncertainty is potentially lurking in many corners.
Thank you for investing in Janus Global Allocation Fund – Moderate.
2 | JUNE 30, 2015
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(unaudited)
Janus Global Allocation Fund – Moderate (% of Net Assets)
As of June 30, 2015
Janus Global Bond Fund – Class N Shares | 24 | .4% | ||
Janus International Equity Fund – Class N Shares | 12 | .2 | ||
Perkins Large Cap Value Fund – Class N Shares | 9 | .0 | ||
INTECH U.S. Managed Volatility Fund(1) – Class N Shares | 8 | .3 | ||
Janus Diversified Alternatives Fund – Class N Shares | 7 | .6 | ||
INTECH International Managed Volatility Fund(2) – Class I Shares | 7 | .3 | ||
Janus Adaptive Global Allocation Fund – Class N Shares | 5 | .1 | ||
Janus Short-Term Bond Fund – Class N Shares | 4 | .2 | ||
Janus Overseas Fund – Class N Shares | 3 | .3 | ||
Janus Global Real Estate Fund – Class I Shares | 2 | .8 | ||
Janus Triton Fund – Class N Shares | 2 | .6 | ||
Janus Emerging Markets Fund – Class I Shares | 2 | .3 | ||
Perkins Small Cap Value Fund – Class N Shares | 2 | .2 | ||
Janus Fund – Class N Shares | 1 | .8 | ||
Janus Forty Fund – Class N Shares | 1 | .6 | ||
Janus Global Research Fund – Class I Shares | 1 | .4 | ||
Janus Twenty Fund – Class D Shares | 1 | .4 | ||
Janus Contrarian Fund – Class I Shares | 1 | .2 | ||
Janus Global Select Fund – Class I Shares | 1 | .0 | ||
Janus Asia Equity Fund – Class I Shares | 0 | .3 | ||
(1) | Formerly named INTECH U.S. Value Fund. | |
(2) | Formerly named INTECH International Fund. |
Janus Global Allocation Fund - Moderate At A Glance
Asset Allocation – (% of Net Assets)
As of June 30, 2015
Janus Investment Fund | 3
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Janus Global Allocation Fund - Moderate (unaudited)
Performance
Average Annual Total Return – for the periods ended June 30, 2015 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||
One | Five | Since | Total Annual Fund | ||||||
Year | Year | Inception* | Operating Expenses | ||||||
Janus Global Allocation Fund – Moderate – Class A Shares | |||||||||
NAV | –0.87% | 8.45% | 6.60% | 1.16% | |||||
MOP | –6.56% | 7.17% | 5.94% | ||||||
Janus Global Allocation Fund – Moderate – Class C Shares | |||||||||
NAV | –1.58% | 7.64% | 5.81% | 1.95% | |||||
CDSC | –2.52% | 7.64% | 5.81% | ||||||
Janus Global Allocation Fund – Moderate – Class D Shares(1) | –0.71% | 8.65% | 6.79% | 0.99% | |||||
Janus Global Allocation Fund – Moderate – Class I Shares | –0.65% | 8.71% | 6.74% | 0.95% | |||||
Janus Global Allocation Fund – Moderate – Class S Shares | –1.03% | 8.27% | 6.37% | 1.34% | |||||
Janus Global Allocation Fund – Moderate – Class T Shares | –0.80% | 8.55% | 6.74% | 1.09% | |||||
MSCI All Country World IndexSM | 0.71% | 11.93% | 5.57% | ||||||
Global Moderate Allocation Index | –2.42% | 8.06% | 5.22% | ||||||
Morningstar Quartile – Class T Shares | 2nd | 2nd | 1st | ||||||
Morningstar Ranking – based on total returns for World Allocation Funds | 223/571 | 171/384 | 50/296 | ||||||
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)
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Performance of the Janus Global Allocation Funds depends on that of the underlying funds. They are subject to the volatility of the financial markets. Because Janus Capital is the adviser to the Fund and to the underlying affiliated funds held within the Fund, it is subject to certain potential conflicts of interest.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Class A Shares, Class C Shares, and Class S Shares commenced operations on July 6, 2009. Performance shown for each class for periods prior to July 6, 2009, reflects the performance of the Fund’s Class J Shares, the initial share class (renamed Class T Shares effective February 16, 2010), calculated using the fees and expenses of each respective share class, without the effect of any fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
Class I Shares commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 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.”
Effective September 1, 2014, Enrique Chang and Ashwin Alankar are Co-Portfolio Managers of the Fund.
* | The Fund’s inception date – December 30, 2005 | |
(1) | Closed to certain new investors. |
Janus Investment Fund | 5
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Janus Global Allocation Fund - Moderate (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,010.50 | $ | 2.24 | $ | 1,000.00 | $ | 1,022.56 | $ | 2.26 | 0.45% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,007.60 | $ | 5.92 | $ | 1,000.00 | $ | 1,018.89 | $ | 5.96 | 1.19% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,011.90 | $ | 1.35 | $ | 1,000.00 | $ | 1,023.46 | $ | 1.35 | 0.27% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,011.90 | $ | 1.05 | $ | 1,000.00 | $ | 1,023.75 | $ | 1.05 | 0.21% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,009.80 | $ | 3.04 | $ | 1,000.00 | $ | 1,021.77 | $ | 3.06 | 0.61% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,011.20 | $ | 1.80 | $ | 1,000.00 | $ | 1,023.01 | $ | 1.81 | 0.36% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 181/365 (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 | JUNE 30, 2015
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Janus Global Allocation Fund - Moderate
Schedule of Investments
As of June 30, 2015
Shares | Value | |||||||||
Investment Companies£ – 100.0% | ||||||||||
Alternative Funds – 7.6% | ||||||||||
2,376,614 | Janus Diversified Alternatives Fund – Class N Shares | $ | 23,861,204 | |||||||
23,861,204 | ||||||||||
Equity Funds – 63.8% | ||||||||||
2,839,590 | INTECH International Managed Volatility Fund – Class I Shares(1) | 22,716,716 | ||||||||
2,882,851 | INTECH U.S. Managed Volatility Fund – Class N Shares(2) | 25,916,834 | ||||||||
1,617,902 | Janus Adaptive Global Allocation Fund – Class N Shares* | 15,693,649 | ||||||||
83,304 | Janus Asia Equity Fund – Class I Shares | 859,700 | ||||||||
179,513 | Janus Contrarian Fund – Class I Shares | 3,697,960 | ||||||||
846,649 | Janus Emerging Markets Fund – Class I Shares | 7,298,117 | ||||||||
148,297 | Janus Forty Fund – Class N Shares | 4,899,746 | ||||||||
142,892 | Janus Fund – Class N Shares | 5,589,945 | ||||||||
766,279 | Janus Global Real Estate Fund – Class I Shares | 8,643,626 | ||||||||
63,364 | Janus Global Research Fund – Class I Shares | 4,287,835 | ||||||||
218,307 | Janus Global Select Fund – Class I Shares | 3,097,773 | ||||||||
2,940,627 | Janus International Equity Fund – Class N Shares | 37,757,645 | ||||||||
310,432 | Janus Overseas Fund – Class N Shares | 10,324,960 | ||||||||
321,277 | Janus Triton Fund – Class N Shares | 8,192,552 | ||||||||
71,594 | Janus Twenty Fund – Class D Shares | 4,233,368 | ||||||||
1,738,462 | Perkins Large Cap Value Fund – Class N Shares | 28,041,397 | ||||||||
313,138 | Perkins Small Cap Value Fund – Class N Shares | 6,967,329 | ||||||||
198,219,152 | ||||||||||
Fixed Income Funds – 28.6% | ||||||||||
7,917,852 | Janus Global Bond Fund – Class N Shares | 75,853,021 | ||||||||
4,264,929 | Janus Short-Term Bond Fund – Class N Shares | 12,965,385 | ||||||||
88,818,406 | ||||||||||
Total Investments (total cost $282,942,338) – 100.0% | 310,898,762 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0)% | (131,839) | |||||||||
Net Assets – 100% | $ | 310,766,923 | ||||||||
(1) | Formerly named INTECH International Fund. | |
(2) | Formerly named INTECH U.S. Value Fund. |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
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Notes to Schedule of Investments and Other Information
Barclays Global Aggregate Bond Index | A broad-based measure of the global investment grade fixed-rate debt markets. | |
Global Moderate Allocation Index | An internally calculated, hypothetical combination of total returns from the MSCI All Country World IndexSM (60%) and Barclays Global Aggregate Bond Index (40%). | |
MSCI All Country World IndexSM | An unmanaged, free float-adjusted market capitalization weighted index composed of stocks of companies located in countries throughout the world. It is designed to measure equity market performance in global developed and emerging markets. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
S&P 500® Index | Measures broad U.S. equity performance. |
* | 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 year ended June 30, 2015. Unless otherwise indicated, all information in the table is for the year ended June 30, 2015. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 6/30/15 | Gain/(Loss) | Income | at 6/30/15 | |||||||||||||||
Janus Global Allocation Fund – Moderate | |||||||||||||||||||||
INTECH International Managed Volatility Fund(1) – Class I Shares | 2,592,091 | 522,699 | (275,200) | 2,839,590 | $ | (134,419) | $ | 561,410 | $ | 22,716,716 | |||||||||||
INTECH U.S. Managed Volatility Fund(2) – Class I Shares | 2,064,085 | 22,025 | (2,086,110) | – | 187,480 | – | – | ||||||||||||||
INTECH U.S. Managed Volatility Fund(2) – Class N Shares | – | 3,977,684 | (1,094,833) | 2,882,851 | 5,094,665 | 1,436,997 | 25,916,834 | ||||||||||||||
INTECH U.S. Managed Volatility Fund II(3) – Class I Shares | 667,891 | 27,732 | (695,623) | – | 704,513 | 155,881 | – | ||||||||||||||
Janus Adaptive Global Allocation Fund – Class N Shares | – | 1,619,772 | (1,870) | 1,617,902 | (12) | – | 15,693,649 | ||||||||||||||
Janus Asia Equity Fund – Class I Shares | 86,786 | 12,458 | (15,940) | 83,304 | 8,362 | 49,163 | 859,700 | ||||||||||||||
Janus Contrarian Fund – Class I Shares | 168,789 | 25,249 | (14,525) | 179,513 | 29,237 | 34,661 | 3,697,960 | ||||||||||||||
Janus Diversified Alternatives Fund – Class N Shares | 2,514,382 | 146,605 | (284,373) | 2,376,614 | 29,395 | 12,140 | 23,861,204 | ||||||||||||||
Janus Emerging Markets Fund – Class I Shares | 774,837 | 165,547 | (93,735) | 846,649 | (32,608) | 135,195 | 7,298,117 | ||||||||||||||
Janus Forty Fund – Class N Shares | 100,365 | 66,520 | (18,588) | 148,297 | (172,802) | 82,274 | 4,899,746 | ||||||||||||||
Janus Fund – Class N Shares | 125,171 | 33,208 | (15,487) | 142,892 | 121,812 | 93,116 | 5,589,945 | ||||||||||||||
Janus Global Bond Fund – Class N Shares | 8,263,367 | 1,037,984 | (1,383,499) | 7,917,852 | (462,556) | 4,572,595 | 75,853,021 | ||||||||||||||
Janus Global Real Estate Fund – Class I Shares | 784,130 | 65,693 | (83,544) | 766,279 | 34,891 | 199,671 | 8,643,626 | ||||||||||||||
Janus Global Research Fund – Class I Shares | 164,028 | 8,339 | (109,003) | 63,364 | 1,684,486 | 117,097 | 4,287,835 | ||||||||||||||
Janus Global Select Fund – Class I Shares | 568,505 | 25,534 | (375,732) | 218,307 | 1,179,014 | 62,628 | 3,097,773 | ||||||||||||||
Janus International Equity Fund – Class N Shares | 2,906,246 | 333,726 | (299,345) | 2,940,627 | 40,863 | 847,201 | 37,757,645 | ||||||||||||||
Janus Overseas Fund – Class N Shares | 343,169 | 18,911 | (51,648) | 310,432 | (249,733) | 134,164 | 10,324,960 | ||||||||||||||
Janus Short-Term Bond Fund – Class N Shares | 3,874,419 | 915,247 | (524,737) | 4,264,929 | (10,536) | 198,503 | 12,965,385 | ||||||||||||||
Janus Triton Fund – Class N Shares | 304,490 | 43,129 | (26,342) | 321,277 | 26,575 | 47,548 | 8,192,552 | ||||||||||||||
Janus Twenty Fund – Class D Shares | 67,990 | 13,834 | (10,230) | 71,594 | 72,787 | 63,755 | 4,233,368 | ||||||||||||||
Perkins Large Cap Value Fund – Class N Shares | 1,033,000 | 917,168 | (211,706) | 1,738,462 | 83,544 | 548,992 | 28,041,397 | ||||||||||||||
Perkins Small Cap Value Fund – Class N Shares | 257,500 | 83,593 | (27,955) | 313,138 | (54,212) | 399,332 | 6,967,329 | ||||||||||||||
Total | $ | 8,180,746 | $ | 9,752,323 | $ | 310,898,762 | |||||||||||||||
(1) | Formerly named INTECH International Fund. | |
(2) | Formerly named INTECH U.S. Value Fund. | |
(3) | Formerly named INTECH U.S. Growth Fund. |
8 | JUNE 30, 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 June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Janus Global Allocation Fund – Moderate | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Investment Companies | |||||||||||
Alternative Funds | $ | 23,861,204 | $ | – | $ | – | |||||
Equity Funds | 198,219,152 | – | – | ||||||||
Fixed Income Funds | 88,818,406 | – | – | ||||||||
Total Assets | $ | 310,898,762 | $ | – | $ | – | |||||
Janus Investment Fund | 9
Table of Contents
Statement of Assets and Liabilities
Janus Global | ||||
As of June 30, 2015 | Allocation Fund - Moderate | |||
Assets: | ||||
Investments, at cost | $ | 282,942,338 | ||
Affiliated investments, at value | 310,898,762 | |||
Non-interested Trustees’ deferred compensation | 6,213 | |||
Receivables: | ||||
Investments sold | 46,183 | |||
Fund shares sold | 124,605 | |||
Dividends from affiliates | 17,806 | |||
Total Assets | 311,093,569 | |||
Liabilities: | ||||
Payables: | ||||
Fund shares repurchased | 144,311 | |||
Advisory fees | 12,985 | |||
Transfer agent fees and expenses | 57,942 | |||
12b-1 Distribution and shareholder servicing fees | 40,325 | |||
Non-interested Trustees’ fees and expenses | 2,044 | |||
Non-interested Trustees’ deferred compensation fees | 6,213 | |||
Accrued expenses and other payables | 62,826 | |||
Total Liabilities | 326,646 | |||
Net Assets | $ | 310,766,923 | ||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 263,270,173 | ||
Undistributed net investment income/(loss) | 1,132,617 | |||
Undistributed net realized gain/(loss) from investments | 18,406,460 | |||
Unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 27,957,673 | |||
Total Net Assets | $ | 310,766,923 | ||
Net Assets - Class A Shares | $ | 14,913,172 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,105,481 | |||
Net Asset Value Per Share(1) | $ | 13.49 | ||
Maximum Offering Price Per Share(2) | $ | 14.31 | ||
Net Assets - Class C Shares | $ | 11,647,581 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 876,683 | |||
Net Asset Value Per Share(1) | $ | 13.29 | ||
Net Assets - Class D Shares | $ | 251,092,074 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 18,503,795 | |||
Net Asset Value Per Share | $ | 13.57 | ||
Net Assets - Class I Shares | $ | 4,683,996 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 345,181 | |||
Net Asset Value Per Share | $ | 13.57 | ||
Net Assets - Class S Shares | $ | 3,233,547 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 241,292 | |||
Net Asset Value Per Share | $ | 13.40 | ||
Net Assets - Class T Shares | $ | 25,196,553 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,861,904 | |||
Net Asset Value Per Share | $ | 13.53 |
(1) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(2) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements.
10 | JUNE 30, 2015
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Statement of Operations
Janus Global | ||||
For the year ended June 30, 2015 | Allocation Fund - Moderate | |||
Investment Income: | ||||
Dividends from affiliates | $ | 9,752,323 | ||
Total Investment Income | 9,752,323 | |||
Expenses: | ||||
Advisory fees | 161,340 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 34,854 | |||
Class C Shares | 111,463 | |||
Class S Shares | 7,543 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 317,250 | |||
Class S Shares | 7,543 | |||
Class T Shares | 61,685 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 9,812 | |||
Class C Shares | 8,160 | |||
Class I Shares | 5,132 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 1,643 | |||
Class C Shares | 1,669 | |||
Class D Shares | 50,336 | |||
Class I Shares | 217 | |||
Class S Shares | 41 | |||
Class T Shares | 611 | |||
Shareholder reports expense | 58,909 | |||
Registration fees | 105,675 | |||
Professional fees | 53,028 | |||
Non-interested Trustees’ fees and expenses | 7,127 | |||
Other expenses | 7,254 | |||
Total Expenses | 1,011,292 | |||
Net Expenses | 1,011,292 | |||
Net Investment Income/(Loss) | 8,741,030 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments in affiliates | 8,180,746 | |||
Capital gain distributions from underlying funds | 14,842,522 | |||
Total Net Realized Gain/(Loss) on Investments | 23,023,268 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments and non-interested Trustees’ deferred compensation | (34,183,369) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (34,183,369) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (2,419,071) |
See Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Statements of Changes in Net Assets
Janus Global | ||||||||
Allocation Fund - Moderate | ||||||||
For each year ended June 30 | 2015 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 8,741,030 | $ | 5,357,493 | ||||
Net realized gain/(loss) from investments in affiliates | 23,023,268 | 9,214,193 | ||||||
Change in unrealized net appreciation/depreciation | (34,183,369) | 33,691,035 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (2,419,071) | 48,262,721 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income | ||||||||
Class A Shares | (366,391) | (157,062) | ||||||
Class C Shares | (183,738) | (91,118) | ||||||
Class D Shares | (6,542,960) | (4,641,655) | ||||||
Class I Shares | (145,598) | (107,987) | ||||||
Class S Shares | (64,777) | (38,709) | ||||||
Class T Shares | (626,732) | (360,310) | ||||||
Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | (359,972) | (106,353) | ||||||
Class C Shares | (262,309) | (111,526) | ||||||
Class D Shares | (6,226,887) | (2,907,792) | ||||||
Class I Shares | (135,007) | (65,839) | ||||||
Class S Shares | (70,021) | (30,951) | ||||||
Class T Shares | (601,152) | (228,916) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (15,585,544) | (8,848,218) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 5,803,532 | 3,708,140 | ||||||
Class C Shares | 3,038,977 | 2,564,930 | ||||||
Class D Shares | 20,497,710 | 29,937,398 | ||||||
Class I Shares | 1,326,529 | 1,616,228 | ||||||
Class S Shares | 980,132 | 706,319 | ||||||
Class T Shares | 14,991,410 | 10,004,788 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 617,695 | 254,958 | ||||||
Class C Shares | 400,307 | 183,001 | ||||||
Class D Shares | 12,666,586 | 7,494,648 | ||||||
Class I Shares | 276,081 | 169,055 | ||||||
Class S Shares | 134,798 | 69,660 | ||||||
Class T Shares | 1,199,717 | 579,642 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (2,307,243) | (2,545,907) | ||||||
Class C Shares | (2,259,263) | (2,392,841) | ||||||
Class D Shares | (43,534,951) | (41,693,706) | ||||||
Class I Shares | (2,002,963) | (2,537,755) | ||||||
Class S Shares | (290,029) | (1,703,313) | ||||||
Class T Shares | (12,815,646) | (7,221,950) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (1,276,621) | (806,705) | ||||||
Net Increase/(Decrease) in Net Assets | (19,281,236) | 38,607,798 | ||||||
Net Assets: | ||||||||
Beginning of period | 330,048,159 | 291,440,361 | ||||||
End of period | $ | 310,766,923 | $ | 330,048,159 | ||||
Undistributed Net Investment Income/(Loss) | $ | 1,132,617 | $ | 683,838 |
See Notes to Financial Statements.
12 | JUNE 30, 2015
Table of Contents
Financial Highlights
Class A Shares
Janus Global Allocation Fund - Moderate | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $14.29 | $12.58 | $12.21 | $12.57 | $10.95 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.37(1) | 0.21(1) | 0.32 | 0.24 | 0.34 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.50) | 1.88 | 0.97 | (0.31) | 1.58 | |||||||||||||||||
Total from Investment Operations | (0.13) | 2.09 | 1.29 | (0.07) | 1.92 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.34) | (0.23) | (0.31) | (0.29) | (0.30) | |||||||||||||||||
Distributions (from capital gains) | (0.33) | (0.15) | (0.61) | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.67) | (0.38) | (0.92) | (0.29) | (0.30) | |||||||||||||||||
Net Asset Value, End of Period | $13.49 | $14.29 | $12.58 | $12.21 | $12.57 | |||||||||||||||||
Total Return* | (0.87)% | 16.79% | 10.67% | (0.41)% | 17.59% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $14,913 | $11,593 | $8,913 | $5,720 | $5,498 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $13,942 | $9,885 | $6,850 | $5,484 | $3,818 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses**(2) | 0.44% | 0.43% | 0.41% | 0.42% | 0.50% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)**(2) | 0.44% | 0.43% | 0.41% | 0.42% | 0.50% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)**(2) | 2.71% | 1.53% | 1.97% | 1.98% | 2.88% | |||||||||||||||||
Portfolio Turnover Rate | 21% | 11% | 64% | 18% | 15% |
Class C Shares
Janus Global Allocation Fund - Moderate | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $14.08 | $12.40 | $12.02 | $12.46 | $10.88 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.24(1) | 0.11(1) | 0.18 | 0.15 | 0.26 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.47) | 1.85 | 0.99 | (0.32) | 1.57 | |||||||||||||||||
Total from Investment Operations | (0.23) | 1.96 | 1.17 | (0.17) | 1.83 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.23) | (0.13) | (0.18) | (0.27) | (0.25) | |||||||||||||||||
Distributions (from capital gains) | (0.33) | (0.15) | (0.61) | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.56) | (0.28) | (0.79) | (0.27) | (0.25) | |||||||||||||||||
Net Asset Value, End of Period | $13.29 | $14.08 | $12.40 | $12.02 | $12.46 | |||||||||||||||||
Total Return* | (1.58)% | 15.92% | 9.78% | (1.27)% | 16.86% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $11,648 | $11,120 | $9,480 | $8,397 | $7,572 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $11,146 | $10,017 | $8,442 | $7,945 | $5,021 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses**(2) | 1.20% | 1.14% | 1.18% | 1.26% | 1.16% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)**(2) | 1.20% | 1.14% | 1.18% | 1.26% | 1.16% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)**(2) | 1.76% | 0.86% | 1.23% | 1.10% | 1.85% | |||||||||||||||||
Portfolio Turnover Rate | 21% | 11% | 64% | 18% | 15% |
* | 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. | |
(2) | Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. |
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Financial Highlights (continued)
Class D Shares
Janus Global Allocation Fund - Moderate | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $14.36 | $12.63 | $12.27 | $12.62 | $10.96 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.38(1) | 0.24(1) | 0.30 | 0.26 | 0.34 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.49) | 1.89 | 1.00 | (0.31) | 1.62 | |||||||||||||||||
Total from Investment Operations | (0.11) | 2.13 | 1.30 | (0.05) | 1.96 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.35) | (0.25) | (0.33) | (0.30) | (0.30) | |||||||||||||||||
Distributions (from capital gains) | (0.33) | (0.15) | (0.61) | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.68) | (0.40) | (0.94) | (0.30) | (0.30) | |||||||||||||||||
Net Asset Value, End of Period | $13.57 | $14.36 | $12.63 | $12.27 | $12.62 | |||||||||||||||||
Total Return* | (0.71)% | 17.04% | 10.71% | (0.27)% | 18.00% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $251,092 | $276,135 | $247,153 | $228,415 | $238,030 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $264,375 | $261,560 | $241,398 | $224,382 | $216,280 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses**(2) | 0.26% | 0.26% | 0.25% | 0.26% | 0.25% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)**(2) | 0.26% | 0.26% | 0.25% | 0.26% | 0.25% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)**(2) | 2.75% | 1.77% | 2.24% | 2.10% | 2.83% | |||||||||||||||||
Portfolio Turnover Rate | 21% | 11% | 64% | 18% | 15% |
Class I Shares
Janus Global Allocation Fund - Moderate | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $14.36 | $12.63 | $12.27 | $12.60 | $10.96 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.40(1) | 0.26(1) | 0.31 | 0.26 | 0.34 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.50) | 1.87 | 1.00 | (0.29) | 1.61 | |||||||||||||||||
Total from Investment Operations | (0.10) | 2.13 | 1.31 | (0.03) | 1.95 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.36) | (0.25) | (0.34) | (0.30) | (0.31) | |||||||||||||||||
Distributions (from capital gains) | (0.33) | (0.15) | (0.61) | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.69) | (0.40) | (0.95) | (0.30) | (0.31) | |||||||||||||||||
Net Asset Value, End of Period | $13.57 | $14.36 | $12.63 | $12.27 | $12.60 | |||||||||||||||||
Total Return* | (0.65)% | 17.10% | 10.80% | (0.12)% | 17.91% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $4,684 | $5,384 | $5,441 | $5,640 | $4,510 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $5,525 | $5,595 | $5,730 | $5,003 | $3,130 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses**(2) | 0.20% | 0.22% | 0.18% | 0.17% | 0.17% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)**(2) | 0.20% | 0.22% | 0.18% | 0.17% | 0.17% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)**(2) | 2.86% | 1.89% | 2.38% | 2.18% | 2.56% | |||||||||||||||||
Portfolio Turnover Rate | 21% | 11% | 64% | 18% | 15% |
* | 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. | |
(2) | Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. |
See Notes to Financial Statements.
14 | JUNE 30, 2015
Table of Contents
Class S Shares
Janus Global Allocation Fund - Moderate | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $14.19 | $12.49 | $12.14 | $12.52 | $10.91 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.32(1) | 0.19(1) | 0.29 | 0.24 | 0.29 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.47) | 1.85 | 0.97 | (0.34) | 1.62 | |||||||||||||||||
Total from Investment Operations | (0.15) | 2.04 | 1.26 | (0.10) | 1.91 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.31) | (0.19) | (0.30) | (0.28) | (0.30) | |||||||||||||||||
Distributions (from capital gains) | (0.33) | (0.15) | (0.61) | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.64) | (0.34) | (0.91) | (0.28) | (0.30) | |||||||||||||||||
Net Asset Value, End of Period | $13.40 | $14.19 | $12.49 | $12.14 | $12.52 | |||||||||||||||||
Total Return* | (1.03)% | 16.53% | 10.44% | (0.64)% | 17.56% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $3,234 | $2,580 | $3,139 | $1,595 | $416 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $3,017 | $2,839 | $2,429 | $1,042 | $374 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses**(2) | 0.61% | 0.61% | 0.60% | 0.60% | 0.64% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)**(2) | 0.61% | 0.60% | 0.60% | 0.60% | 0.64% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)**(2) | 2.31% | 1.40% | 1.88% | 1.88% | 2.92% | |||||||||||||||||
Portfolio Turnover Rate | 21% | 11% | 64% | 18% | 15% |
Class T Shares
Janus Global Allocation Fund - Moderate | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $14.33 | $12.61 | $12.25 | $12.60 | $10.95 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.37(1) | 0.23(1) | 0.27 | 0.32 | 0.11 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.49) | 1.88 | 1.03 | (0.38) | 1.84 | |||||||||||||||||
Total from Investment Operations | (0.12) | 2.11 | 1.30 | (0.06) | 1.95 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.35) | (0.24) | (0.33) | (0.29) | (0.30) | |||||||||||||||||
Distributions (from capital gains) | (0.33) | (0.15) | (0.61) | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.68) | (0.39) | (0.94) | (0.29) | (0.30) | |||||||||||||||||
Net Asset Value, End of Period | $13.53 | $14.33 | $12.61 | $12.25 | $12.60 | |||||||||||||||||
Total Return* | (0.80)% | 16.96% | 10.67% | (0.33)% | 17.89% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $25,197 | $23,236 | $17,314 | $15,651 | $20,254 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $24,674 | $20,305 | $15,843 | $19,099 | $16,051 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses**(2) | 0.36% | 0.36% | 0.35% | 0.36% | 0.35% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)**(2) | 0.36% | 0.30% | 0.30% | 0.31% | 0.35% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)**(2) | 2.69% | 1.72% | 2.15% | 2.12% | 2.88% | |||||||||||||||||
Portfolio Turnover Rate | 21% | 11% | 64% | 18% | 15% |
* | 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. | |
(2) | Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
Janus Global Allocation Fund – Moderate (the “Fund”) is a series fund. The Fund operates as a “fund of funds,” meaning substantially all of the Fund’s assets will be invested in other Janus funds (the “underlying funds”). The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
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.
Underlying Funds
The Fund invests in a variety of underlying funds to pursue a target allocation of equity investments, fixed-income securities, and alternative investments and may also invest in money market instruments or cash/cash equivalents. The Fund has a target allocation, which is how the Fund’s investments generally will be allocated among the major asset classes over the long term, as well as normal ranges, under normal market conditions, within which the Fund’s asset class allocations generally will vary over short-term periods. The Fund’s long-term expected average asset allocation is as follows: 55% to equity investments, 35% to fixed-income securities and money market instruments, and 10% to alternative investments. Additional details and descriptions of the investment objectives and strategies of each of the underlying funds are available in the Fund’s and underlying funds’ prospectuses. The Trustees of the underlying funds may change the investment objectives or strategies of the underlying funds at any time without prior notice to Fund shareholders.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
The Fund’s net asset value (“NAV”) is calculated based upon the NAV of each of the underlying funds in which the Fund invests on the day of valuation. The NAV for each class of the underlying funds is computed by dividing the total value of securities and other assets allocated to the class, less liabilities allocated to that class, by the total number of shares outstanding for the class.
16 | JUNE 30, 2015
Table of Contents
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
The Fund classifies each of its investments in underlying funds as Level 1, without consideration as to the classification level of the specific investments held by the underlying funds.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
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 June 30, 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 year. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities held by the underlying funds will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Any distributions from the underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which may be allocated pro rata to each of the Funds in the Trust. Additionally, the Fund, as a shareholder in the underlying funds, will also indirectly bear its pro rata share of the expenses incurred by the underlying funds. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Janus Investment Fund | 17
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Notes to Financial Statements (continued)
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
The underlying funds may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the underlying funds distribute such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
2. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Janus Global Allocation Fund - Moderate | All Asset Levels | 0.05 | ||||||||
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any expenses of an underlying fund (acquired fund fees and expenses), 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
Janus Global Allocation Fund - Moderate | 0.19 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net 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
18 | JUNE 30, 2015
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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.
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 $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the year ended June 30, 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 June 30, 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 year ended June 30, 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 $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 2015.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the year ended June 30, 2015 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Janus Investment Fund | 19
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Notes to Financial Statements (continued)
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 year ended June 30, 2015, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Janus Global Allocation Fund - Moderate | $ | 10,312 | ||||
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 year ended June 30, 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 year ended June 30, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Janus Global Allocation Fund - Moderate | $ | 1,164 | ||||
3. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation and tax equalization.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
Janus Global Allocation Fund - Moderate | $ | 1,138,830 | $ | 20,576,342 | $ | – | $ | – | $ | – | $ | (4,965) | $ | 25,786,543 | |||||||||||||||||
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 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.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
Janus Global Allocation Fund - Moderate | $ | 285,112,219 | $ | 31,980,462 | $ | (6,193,919) | ||||||||
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. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the year ended June 30, 2015
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Global Allocation Fund - Moderate | $ | 7,930,093 | $ | 7,655,451 | $ | – | $ | – | ||||||||||||||
For the year ended June 30, 2014
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Global Allocation Fund - Moderate | $ | 5,396,840 | $ | 3,451,377 | $ | – | $ | – | ||||||||||||||
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Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
Janus Global Allocation Fund - Moderate | $ | 1,251,573 | $ | (362,055) | $ | (889,518) | ||||||||
Capital has been adjusted by $1,251,573, including $889,413 of long-term capital gain, for distributions in connection with Fund share redemptions (tax equalization).
4. | Capital Share Transactions |
Janus Global Allocation Fund - | ||||||||||
Moderate | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 416,046 | 274,412 | ||||||||
Reinvested dividends and distributions | 45,994 | 18,858 | ||||||||
Shares repurchased | (167,795) | (190,575) | ||||||||
Net Increase/(Decrease) in Fund Shares | 294,245 | 102,695 | ||||||||
Shares Outstanding, Beginning of Period | 811,236 | 708,541 | ||||||||
Shares Outstanding, End of Period | 1,105,481 | 811,236 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 223,423 | 192,519 | ||||||||
Reinvested dividends and distributions | 30,166 | 13,687 | ||||||||
Shares repurchased | (166,612) | (181,255) | ||||||||
Net Increase/(Decrease) in Fund Shares | 86,977 | 24,951 | ||||||||
Shares Outstanding, Beginning of Period | 789,706 | 764,755 | ||||||||
Shares Outstanding, End of Period | 876,683 | 789,706 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 1,478,785 | 2,204,196 | ||||||||
Reinvested dividends and distributions | 938,961 | 551,889 | ||||||||
Shares repurchased | (3,146,451) | (3,087,529) | ||||||||
Net Increase/(Decrease) in Fund Shares | (728,705) | (331,444) | ||||||||
Shares Outstanding, Beginning of Period | 19,232,500 | 19,563,944 | ||||||||
Shares Outstanding, End of Period | 18,503,795 | 19,232,500 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 94,818 | 119,773 | ||||||||
Reinvested dividends and distributions | 20,466 | 12,458 | ||||||||
Shares repurchased | (145,092) | (187,869) | ||||||||
Net Increase/(Decrease) in Fund Shares | (29,808) | (55,638) | ||||||||
Shares Outstanding, Beginning of Period | 374,989 | 430,627 | ||||||||
Shares Outstanding, End of Period | 345,181 | 374,989 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 70,315 | 52,535 | ||||||||
Reinvested dividends and distributions | 10,097 | 5,183 | ||||||||
Shares repurchased | (20,883) | (127,344) | ||||||||
Net Increase/(Decrease) in Fund Shares | 59,529 | (69,626) | ||||||||
Shares Outstanding, Beginning of Period | 181,763 | 251,389 | ||||||||
Shares Outstanding, End of Period | 241,292 | 181,763 |
Janus Investment Fund | 21
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Notes to Financial Statements (continued)
Janus Global Allocation Fund - | ||||||||||
Moderate | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 1,084,719 | 737,969 | ||||||||
Reinvested dividends and distributions | 89,132 | 42,778 | ||||||||
Shares repurchased | (933,237) | (532,129) | ||||||||
Net Increase/(Decrease) in Fund Shares | 240,614 | 248,618 | ||||||||
Shares Outstanding, Beginning of Period | 1,621,290 | 1,372,672 | ||||||||
Shares Outstanding, End of Period | 1,861,904 | 1,621,290 |
5. | Purchases and Sales of Investment Securities |
For the year ended June 30, 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 Allocation Fund - Moderate | $ | 72,880,255 | $ | 66,143,150 | $ | – | $ | – | ||||||
6. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of Janus Global Allocation Fund – Moderate:
of Janus Global Allocation Fund – Moderate:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Janus Global Allocation Fund – Moderate (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
Janus Investment Fund | 23
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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
24 | JUNE 30, 2015
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providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
Janus Investment Fund | 25
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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
Janus Investment Fund | 33
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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 June 30, 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
36 | JUNE 30, 2015
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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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Designation Requirements (unaudited)
For federal income tax purposes, the Fund designated the following for the year ended June 30, 2015:
Capital Gain Distributions
Fund | ||||||||||
Janus Global Allocation Fund - Moderate | $ | 8,544,864 | ||||||||
Foreign Taxes Paid and Foreign Source Income
Fund | Foreign Taxes Paid | Foreign Source Income | ||||||||
Janus Global Allocation Fund - Moderate | $ | 195,413 | $ | 1,898,188 | ||||||
Dividends Received Deduction Percentage
Fund | ||||||||||
Janus Global Allocation Fund - Moderate | 100 | % | ||||||||
Qualified Dividend Income Percentage
Fund | ||||||||||
Janus Global Allocation Fund - Moderate | 100 | % | ||||||||
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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
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OFFICERS
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
Ashwin Alankar 151 Detroit Street Denver, CO 80206 DOB: 1974 | Executive Vice President and Co-Portfolio Manager Janus Global Allocation Fund - Moderate | 9/14-Present | Senior Vice President and Head of Asset Allocation and Risk Management of Janus Capital and Portfolio Manager for other Janus accounts. Formerly, Co-Chief Investment Officer of AllianceBernstein’s Tail Risk Parity (2010-2014) and Partner and Portfolio Manager for Platinum Grove Asset Management (2003-2010). | |||
Enrique Chang 151 Detroit Street Denver, CO 80206 DOB: 1962 | Executive Vice President and Co-Portfolio Manager Janus Global Allocation Fund - Moderate | 1/14-Present | Chief Investment Officer Equities and Asset Allocation for Janus Capital and Portfolio Manager for other Janus accounts. During the five years prior to 2013, Mr. Chang was Chief Investment Officer and Executive Vice President for American Century Investments. | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
Janus Investment Fund | 43
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Trustees and Officers (unaudited) (continued)
OFFICERS (continued)
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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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-0815-93829 | 125-02-93022 08-15 |
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annual report
June 30, 2015
Janus Government Money Market Fund
Table of Contents
Janus Government Money Market Fund
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Janus Government Money Market Fund (unaudited)
Eric Thorderson portfolio manager |
Janus Government Money Market Fund
Average Annual Total Return | ||
For the periods ended June 30, 2015 | ||
Class D Shares(1) | ||
1 Year | 0.00% | |
5 Year | 0.00% | |
10 Year | 1.25% | |
Since Inception (February 14, 1995) | 2.47% | |
Class T Shares | ||
1 Year | 0.00% | |
5 Year | 0.00% | |
10 Year | 1.25% | |
Since Inception (February 14, 1995) | 2.47% |
Seven-Day Current Yield | ||
Class D Shares(1) | ||
With Reimbursement | 0.00% | |
Without Reimbursement | -0.48% | |
Class T Shares | ||
With Reimbursement | 0.00% | |
Without Reimbursement | -0.50% | |
Expense Ratios | ||
Per the October 28, 2014 prospectuses | ||
Class D Shares(1) | ||
Total Annual Fund Operating Expenses | 0.68% | |
Class T Shares | ||
Total Annual Fund Operating Expenses | 0.70% |
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. For the most recent month-end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the money market fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
Janus Capital has voluntarily agreed to waive one-half of its investment advisory fee and such additional fees to the extent necessary to assist the Fund in attempting to maintain a yield of at least 0.00%. Such reimbursements could be changed or terminated at any time.
Class D Shares of the Fund commenced operations on February 16, 2010. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares, the initial share class (renamed Class T Shares effective February 16, 2010), calculated using the fees and expenses in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
If Class D Shares of the Fund had been available during periods prior to February 16, 2010, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of Class D Shares reflects the fees and expenses of Class D Shares, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Returns include reinvestment of all dividends and distributions.
The yield more closely reflects the current earnings of the Fund than the total return.
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
See “Useful Information About Your Fund Report.”
(1) | Closed to certain new investors. |
Janus Investment Fund | 1
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Janus Government Money Market Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in either share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,000.00 | $ | 0.69 | $ | 1,000.00 | $ | 1,024.10 | $ | 0.70 | 0.14% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,000.00 | $ | 0.69 | $ | 1,000.00 | $ | 1,024.10 | $ | 0.70 | 0.14% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
2 | JUNE 30, 2015
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Janus Government Money Market Fund
Schedule of Investments
As of June 30, 2015
Principal Amount | Value | |||||||||
Repurchase Agreements – 12.7% | ||||||||||
$19,500,000 | Undivided interest of 19.5% in a joint repurchase agreement (principal amount $100,000,000 with a maturity value of $100,000,222) with RBC Capital Markets Corp., 0.0800%, dated 6/30/15, maturing 7/1/15, to be repurchased at $19,500,043 collateralized by $96,685,429 in U.S. Government Agencies, 2.0000% – 7.5190%, 2/1/20 – 3/20/65, with a value of $102,000,000 (cost $19,500,000) | $ | 19,500,000 | |||||||
U.S. Government Agency Notes – 37.8% | ||||||||||
Fannie Mae Discount Notes: | ||||||||||
2,500,000 | 0.1301%, 9/30/15 | 2,499,178 | ||||||||
Federal Farm Credit Discount Notes: | ||||||||||
1,500,000 | 0.1502%, 12/15/15 | 1,498,956 | ||||||||
Federal Home Loan Bank Discount Notes: | ||||||||||
2,000,000 | 0.1401%, 7/8/15 | 1,999,946 | ||||||||
3,000,000 | 0.1301%, 7/29/15 | 2,999,697 | ||||||||
2,000,000 | 0.1251%, 7/31/15 | 1,999,792 | ||||||||
2,500,000 | 0.1351%, 8/7/15 | 2,499,653 | ||||||||
4,300,000 | 0.1401%, 8/12/15 | 4,299,297 | ||||||||
3,000,000 | 0.1351%, 8/26/15 | 2,999,370 | ||||||||
3,000,000 | 0.1321%, 8/28/15 | 2,999,362 | ||||||||
3,000,000 | 0.1301%, 9/2/15 | 2,999,317 | ||||||||
1,400,000 | 0.1502%, 9/9/15 | 1,399,592 | ||||||||
2,500,000 | 0.1452%, 10/23/15 | 2,498,852 | ||||||||
1,000,000 | 0.1351%, 10/28/15 | 999,554 | ||||||||
2,500,000 | 0.1301%, 11/4/15 | 2,498,862 | ||||||||
1,500,000 | 0.1401%, 11/6/15 | 1,499,253 | ||||||||
3,000,000 | 0.1401%, 11/12/15 | 2,998,437 | ||||||||
1,000,000 | 0.1452%, 11/13/15 | 999,456 | ||||||||
2,500,000 | 0.1452%, 11/25/15 | 2,498,520 | ||||||||
2,700,000 | 0.1502%, 12/2/15 | 2,698,267 | ||||||||
2,000,000 | 0.1602%, 12/4/15 | 1,998,613 | ||||||||
2,000,000 | 0.2054%, 2/9/16 | 1,997,460 | ||||||||
FHLMC Multifamily VRD Certificates Taxable: | ||||||||||
6,065,644 | 0.2500%, 1/15/42 | 6,065,644 | ||||||||
Freddie Mac Discount Notes: | ||||||||||
3,000,000 | 0.1167%, 8/21/15 | 2,999,504 | ||||||||
Total U.S. Government Agency Notes (amortized cost $57,946,582) | 57,946,582 | |||||||||
Variable Rate Demand Agency Notes – 49.8% | ||||||||||
880,000 | AE REALTY LLC 0.1700%, 10/1/23 | 880,000 | ||||||||
1,075,000 | Clearwater Solutions LLC 0.1800%, 9/1/21 | 1,075,000 | ||||||||
9,000,000 | Cypress Bend Real Estate Development Co. LLC 0.1700%, 4/1/33 | 9,000,000 | ||||||||
2,490,000 | Florida Food Products, Inc. 0.1700%, 12/1/22 | 2,490,000 | ||||||||
5,660,000 | Florida HomeLoan Corp. 0.1100%, 7/15/36 | 5,660,000 | ||||||||
3,000,000 | Greer Family LLC 0.1700%, 8/1/31 | 3,000,000 | ||||||||
2,065,000 | Housing Development Corp., New York 0.1000%, 6/15/37 | 2,065,000 | ||||||||
400,000 | Illinois Housing Development Authority 0.1500%, 5/1/37 | 400,000 | ||||||||
2,500,000 | Irrevocable Trust Agreement John A Thomas & Elizabeth F Thomas 0.1700%, 12/1/20 | 2,500,000 | ||||||||
3,745,000 | Johnson Capital Management LLC 0.2300%, 6/1/47 | 3,745,000 | ||||||||
3,200,000 | Lake Nona Trust 0.1700%, 10/1/44 | 3,200,000 | ||||||||
9,935,000 | Mesivta Yeshiva Rabbi Chaim Berlin 0.1870%, 11/1/35 | 9,935,000 | ||||||||
1,945,000 | Mississippi Business Finance Corp. 0.1700%, 9/1/21 | 1,945,000 | ||||||||
3,645,000 | Mississippi Business Finance Corp. 0.1700%, 1/1/34 | 3,645,000 | ||||||||
4,500,000 | Mississippi Business Finance Corp. 0.1700%, 8/1/34 | 4,500,000 | ||||||||
3,470,000 | Mississippi Business Finance Corp. 0.1700%, 12/1/35 | 3,470,000 | ||||||||
3,460,000 | Mississippi Business Finance Corp. – Series A 0.1700%, 3/1/29 | 3,460,000 | ||||||||
2,530,000 | Mississippi Business Finance Corp. – Series B 0.1700%, 3/1/29 | 2,530,000 | ||||||||
4,195,000 | Phenix City Downtown Redevelopment Authority 0.1700%, 2/1/33 | 4,195,000 | ||||||||
500,000 | Sacramento Housing & Redevelopment Agency 0.1800%, 1/15/36 | 500,000 | ||||||||
1,625,000 | Shepherd Capital LLC 0.2800%, 10/1/53 | 1,625,000 | ||||||||
4,500,000 | Thomas H Turner Family Irrevocable Trust 0.1700%, 6/1/20 | 4,500,000 | ||||||||
1,950,000 | Tyler Enterprises LLC 0.1700%, 10/1/22 | 1,950,000 | ||||||||
Total Variable Rate Demand Agency Notes (amortized cost $76,270,000) | 76,270,000 | |||||||||
Total Investments (total cost $153,716,582) – 100.3% | 153,716,582 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.3)% | (504,861) | |||||||||
Net Assets – 100% | $ | 153,211,721 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 3
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Notes to Schedule of Investments and Other Information
LLC | Limited Liability Company |
Money market funds may hold securities with stated maturities of greater than 397 days when those securities have features that allow a fund to “put” back the security to the issuer or to a third party within 397 days of acquisition. The maturity dates shown in the security descriptions are the stated maturity dates.
The following is a summary of the inputs that were used to value the Fund’s investments in securities and other financial instruments as of June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | |||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||
Janus Government Money Market Fund | ||||||||
Assets | ||||||||
Investments in Securities: | ||||||||
Repurchase Agreements | $– | $ 19,500,000 | $– | |||||
U.S. Government Agency Notes | – | 57,946,582 | – | |||||
Variable Rate Demand Agency Notes | – | 76,270,000 | – | |||||
Total Assets | $– | $153,716,582 | $– | |||||
4 | JUNE 30, 2015
Table of Contents
Statement of Assets and Liabilities
Janus Government | ||||
As of June 30, 2015 | Money Market Fund | |||
Assets: | ||||
Investments, at cost(1) | $ | 153,716,582 | ||
Investments, at value | $ | 134,216,582 | ||
Repurchase agreements, at value | 19,500,000 | |||
Cash | 88,602 | |||
Non-interested Trustees’ deferred compensation | 3,074 | |||
Receivables: | ||||
Fund shares sold | 162,403 | |||
Interest | 11,237 | |||
Total Assets | 153,981,898 | |||
Liabilities: | ||||
Payables: | ||||
Fund shares repurchased | 712,159 | |||
Advisory fees | 11,631 | |||
Administrative services fees | 99 | |||
Non-interested Trustees’ fees and expenses | 1,024 | |||
Non-interested Trustees’ deferred compensation fees | 3,074 | |||
Accrued expenses and other payables | 42,190 | |||
Total Liabilities | 770,177 | |||
Net Assets | $ | 153,211,721 | ||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 153,214,157 | ||
Undistributed net investment income/(loss) | (3,074) | |||
Unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 638 | |||
Total Net Assets | $ | 153,211,721 | ||
Net Assets - Class D Shares | $ | 150,121,218 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 150,136,048 | |||
Net Asset Value Per Share | $ | 1.00 | ||
Net Assets - Class T Shares | $ | 3,090,503 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 3,090,901 | |||
Net Asset Value Per Share | $ | 1.00 |
(1) | Includes cost of repurchase agreements of $19,500,000. |
See Notes to Financial Statements.
Janus Investment Fund | 5
Table of Contents
Statement of Operations
Janus Government | ||||
For the year ended June 30, 2015 | Money Market Fund | |||
Investment Income: | ||||
Interest | $ | 207,412 | ||
Total Investment Income | 207,412 | |||
Expenses: | ||||
Advisory fees | 308,875 | |||
Administration services fees: | ||||
Class D Shares | 723,676 | |||
Class T Shares | 17,335 | |||
Professional fees | 53,012 | |||
Non-interested Trustees’ fees and expenses | 3,471 | |||
Total Expenses | 1,106,369 | |||
Less: Excess Expense Reimbursement | (898,995) | |||
Net Expenses | 207,374 | |||
Net Investment Income/(Loss) | 38 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments | 27 | |||
Total Net Realized Gain/(Loss) on Investments | 27 | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 65 |
See Notes to Financial Statements.
6 | JUNE 30, 2015
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Statements of Changes in Net Assets
Janus Government | ||||||||
Money Market Fund | ||||||||
For each year ended June 30 | 2015 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 38 | $ | 4,118 | ||||
Net realized gain/(loss) on investments | 27 | – | ||||||
Change in unrealized net appreciation/depreciation of non-interested Trustees’ deferred compensation | – | 419 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 65 | 4,537 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income | ||||||||
Class D Shares | (37) | (4,461) | ||||||
Class T Shares | (1) | (174) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (38) | (4,635) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class D Shares | 57,748,692 | 67,415,597 | ||||||
Class T Shares | 3,912,189 | 4,359,035 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class D Shares | 8 | 3,218 | ||||||
Class T Shares | 1 | 169 | ||||||
Shares Repurchased | ||||||||
Class D Shares | (72,872,955) | (77,352,703) | ||||||
Class T Shares | (4,228,103) | (7,521,431) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (15,440,168) | (13,096,115) | ||||||
Net Increase/(Decrease) in Net Assets | (15,440,141) | (13,096,213) | ||||||
Net Assets: | ||||||||
Beginning of period | 168,651,862 | 181,748,075 | ||||||
End of period | $ | 153,211,721 | $ | 168,651,862 | ||||
Undistributed Net Investment Income/(Loss) | $ | (3,074) | $ | (14,825) |
See Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
Financial Highlights
Class D Shares
Janus Government Money Market Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | –(1)(2) | –(1)(2) | –(1) | –(1) | –(1) | |||||||||||||||||
Net realized and unrealized gain/(loss) | –(1) | –(1) | –(1) | –(1) | –(1) | |||||||||||||||||
Total from Investment Operations | – | – | – | – | – | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | –(1) | –(1) | –(1) | –(1) | –(1) | |||||||||||||||||
Distributions (from capital gains) | – | – | – | –(1) | – | |||||||||||||||||
Total Dividends and Distributions | – | – | – | – | – | |||||||||||||||||
Net Asset Value, End of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | |||||||||||||||||
Total Return | 0.00% | 0.00% | 0.01% | 0.00% | 0.00% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $150,121 | $165,245 | $175,179 | $182,311 | $189,249 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $157,321 | $169,002 | $178,560 | $190,180 | $199,694 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.69% | 0.68% | 0.69% | 0.69% | 0.71% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.13% | 0.12% | 0.18% | 0.18% | 0.23% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.00%(3) | 0.00%(3) | 0.00%(3) | 0.00%(3) | 0.00%(3) |
Class T Shares
Janus Government Money Market Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | –(1)(2) | –(1)(2) | –(1) | –(1) | –(1) | |||||||||||||||||
Net realized and unrealized gain/(loss) | –(1) | –(1) | –(1) | –(1) | –(1) | |||||||||||||||||
Total from Investment Operations | – | – | – | – | – | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | –(1) | –(1) | –(1) | –(1) | –(1) | |||||||||||||||||
Distributions (from capital gains) | – | – | – | –(1) | – | |||||||||||||||||
Total Dividends and Distributions | – | – | – | – | – | |||||||||||||||||
Net Asset Value, End of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | |||||||||||||||||
Total Return | 0.00% | 0.00% | 0.01% | 0.00% | 0.00% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $3,091 | $3,406 | $6,569 | $5,319 | $5,731 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $3,611 | $6,393 | $5,526 | $5,267 | $4,596 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.71% | 0.70% | 0.73% | 0.71% | 0.74% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.13% | 0.12% | 0.18% | 0.18% | 0.22% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.00%(3) | 0.00%(3) | 0.00%(3) | 0.00%(3) | 0.00%(3) |
(1) | Less than $0.005 on a per share basis. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year. | |
(3) | Less than 0.005%. |
See Notes to Financial Statements.
8 | JUNE 30, 2015
Table of Contents
Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
Janus Government Money Market Fund (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in short-term money market securities.
The Fund offers two classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer both classes of shares.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class T Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Investments held by the Fund are valued utilizing the amortized cost method of valuation permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under the amortized cost method, which does not take into account unrealized capital gains or losses, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization to maturity of any discount or premium.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE.
Janus Investment Fund | 9
Table of Contents
Notes to Financial Statements (continued)
Periodic review and monitoring of the valuation of short-term securities is performed in an effort to ensure that amortized cost approximates market value. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
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 June 30, 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 year. 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 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
Dividends, if any, are declared daily and distributed monthly for the Fund. Realized capital gains, if any, are declared and distributed in December. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
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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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.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the “Offsetting Assets and Liabilities” section of this Note for further details.
The Fund may be exposed to counterparty risk through its investments in certain securities, including, but not limited to, repurchase agreements and debt securities. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and 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
Janus Investment Fund | 11
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Notes to Financial Statements (continued)
financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following table presents gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see the Fund’s Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
RBC Capital Markets Corp. | $19,500,000 | $– | $(19,500,000) | $– | ||||||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
All repurchase agreements are transacted under legally enforceable master repurchase agreements that give the Fund, in the event of default by the counterparty, the right to liquidate securities held and to offset receivables and payables with the counterparty. Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value exceeds the current market value of the repurchase agreements, including accrued interest.
Regulatory Risk
In July 2014, the SEC adopted additional rules applicable to money market funds which are intended to address perceived systematic risks associated with money market funds and to improve transparency for money market fund investors. Funds which do not meet the definitions of a retail money market fund or government money market fund will be required to have a floating NAV. The rules also contemplate the implementation of liquidity fees and redemption gates for non-government money market funds in times of market stress. The SEC also adopted additional diversification, stress-testing, and disclosure measures. Additionally, the Financial Stability Oversight Council (“FSOC”), a board of U.S. regulators established by the Dodd-Frank Act, had proposed certain recommendations for money market fund reform. There can be no assurance that there will not be future FSOC action relating to money market funds. The ultimate impact of money market reform is uncertain, but changes may affect the Fund’s operations and/or the trading and value of money market instruments, which in turn could negatively affect the Fund’s yield and return potential.
Repurchase Agreements
The Fund and other funds advised by Janus Capital or its affiliates may transfer daily uninvested cash balances into one or more joint trading accounts. Assets in the joint trading accounts are invested in money market instruments and the proceeds are allocated to the participating funds on a pro rata basis.
Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value exceeds the current market value of the repurchase agreements, including accrued interest. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral or proceeds may be subject to legal proceedings.
3. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Janus Government Money Market Fund | All Asset Levels | 0.20 | ||||||||
Janus Capital has voluntarily agreed to waive one-half of the Fund’s investment advisory fee. Janus Capital may also voluntarily waive and/or reimburse additional fees to the extent necessary to assist the Fund in attempting to maintain a yield of at least 0.00%. These waivers and reimbursements are voluntary and could change or be terminated at any time at the discretion of Janus Capital. There is no guarantee that the Fund will maintain a positive yield. If applicable, amounts waived and/or reimbursed to the Fund by Janus Capital are disclosed as
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“Excess Expense Reimbursement” on the Statement of Operations.
Class D Shares and Class T Shares of the Fund compensate Janus Capital at an annual rate of 0.46% and 0.48%, respectively, of average daily net assets for providing certain administration services including, but not limited to, recordkeeping and registration functions and also to pay for costs such as shareholder servicing and custody. These amounts are disclosed as “Administration services fees” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
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.
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 June 30, 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 year ended June 30, 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 $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 2015.
4. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
Janus Government Money Market Fund | $ | – | $ | – | $ | – | $ | – | $ | – | $ | (2,436) | $ | – | |||||||||||||||||
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. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the year ended June 30, 2015
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Government Money Market Fund | $ | 38 | $ | – | $ | – | $ | – | ||||||||||||||
Janus Investment Fund | 13
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Notes to Financial Statements (continued)
For the year ended June 30, 2014
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Government Money Market Fund | $ | 4,635 | $ | – | $ | – | $ | – | ||||||||||||||
Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
Janus Government Money Market Fund | $ | (11,576) | $ | 11,751 | $ | (175) | ||||||||
5. | Capital Share Transactions |
Janus Government Money Market Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 57,748,647 | 67,415,576 | ||||||||
Reinvested dividends and distributions | 8 | 3,218 | ||||||||
Shares repurchased | (72,872,955) | (77,352,703) | ||||||||
Net Increase/(Decrease) in Fund Shares | (15,124,300) | (9,933,909) | ||||||||
Shares Outstanding, Beginning of Period | 165,260,348 | 175,194,257 | ||||||||
Shares Outstanding, End of Period | 150,136,048 | 165,260,348 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 3,912,188 | 4,359,015 | ||||||||
Reinvested dividends and distributions | 1 | 169 | ||||||||
Shares repurchased | (4,228,103) | (7,521,431) | ||||||||
Net Increase/(Decrease) in Fund Shares | (315,914) | (3,162,247) | ||||||||
Shares Outstanding, Beginning of Period | 3,406,815 | 6,569,062 | ||||||||
Shares Outstanding, End of Period | 3,090,901 | 3,406,815 |
6. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of Janus Government Money Market Fund:
of Janus Government Money Market Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Janus Government Money Market Fund (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
Janus Investment Fund | 15
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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
16 | JUNE 30, 2015
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providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
Janus Investment Fund | 17
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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.
26 | JUNE 30, 2015
Table of Contents
Useful Information About Your Fund Report (unaudited)
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 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
Janus Investment Fund | 27
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Useful Information About Your Fund Report (unaudited) (continued)
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 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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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
Janus Investment Fund | 31
Table of Contents
Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
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Table of Contents
OFFICERS
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
J. Eric Thorderson 151 Detroit Street Denver, CO 80206 DOB: 1961 | Executive Vice President and Portfolio Manager Janus Government Money Market Fund | 2/99-Present | Vice President of Janus Capital and Portfolio Manager for other Janus accounts. | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
Janus Investment Fund | 33
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-0815-94131 | 125-02-93025 08-15 |
Table of Contents
annual report
June 30, 2015
Janus Flexible Bond Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
Table of Contents
Janus Flexible Bond Fund
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Table of Contents
Janus Flexible Bond Fund (unaudited)
FUND SNAPSHOT We believe a bottom-up, fundamentally driven investment process can generate risk-adjusted outperformance and capital preservation over time. Our comprehensive, bottom-up view drives decision-making at a macro level, enabling us to make informed risk and sector allocation decisions. | Gibson Smith co-portfolio manager | Darrell Watters co-portfolio manager |
PERFORMANCE OVERVIEW
During the one-year period ended June 30, 2015, Janus Flexible Bond Fund’s Class T Shares returned 1.12% compared with 1.86% for the Fund’s benchmark, the Barclays U.S. Aggregate Bond Index.
INVESTMENT ENVIRONMENT
The U.S. Treasury yield curve flattened during the period, although much of the gains of longer-dated securities were not sustained over the final few months. Long-dated Treasury yields fell through the end of 2014 as investors clamored for dollar-denominated assets. Both Europe and Japan have been taking steps to engineer even more accommodative monetary policy, making yields on Treasurys relatively attractive. Also contributing to the bond rally was softer-than-expected economic data in the first part of 2015 which diminished investor concern of breakout growth or stronger-than-expected inflation. A spring rebound in economic data, however, caused Treasurys to sell off and the curve to steepen. Late in the period, communication from the Federal Reserve (Fed) that they would likely initiate the first rate hike in 2015 also kept a certain amount of upward pressure on yields. Still, global interest rate differentials and developments in China and Greece likely capped U.S. yields on the longer end of the curve. Yields on two-year Treasury notes, which are especially sensitive to Fed rate hikes, rose during the period.
High-yield and investment-grade credit spreads widened during the period amid a flood of new issuance. Shareholder-friendly activity, which may not be friendly to bondholders, also weighed on bond prices. Spreads in mortgage-backed securities (MBS) were flat during the period as rate volatility hindered investors’ ability to judge MBS prepayment risk.
PERFORMANCE DISCUSSION
The Fund underperformed its benchmark during the period due in part to our more conservative approach to the highly volatile long end of the yield curve. Our out-of-benchmark allocation to high-yield corporate credits weighed most on results. These detractors, however, were almost completely offset by strong individual security selection within high-yield as well as spread carry – a measure of excess income generated by holding these securities. During the period we migrated to a more defensive portfolio position, given a confluence of risk factors. We reduced our credit allocation to near its lowest level since the financial crisis. This was achieved mainly by decreasing our banking, energy and consumer cyclical holdings. Our Treasurys allocation, on the other hand, increased over the period as we remain concerned about the liquidity environment. Still, our underweight relative to the benchmark caused Treasurys to detract from relative performance.
On a corporate credit sector basis, independent and midstream energy were relative detractors. Also weighing on performance were our conventional 30-year mortgage-backed securities (MBS) holdings. Mortgages tend to underperform in volatile rate environments like the one we experienced during the period. With this in mind, we maintained our underweight in these securities relative to the benchmark.
Contributing to relative results was a combination of our security selection and spread carry within investment-grade corporate credit. Sectors that boosted relative returns included banking, automotive and technology.
OUTLOOK
Multiple factors presently have the potential to impact the fixed income environment, chief among them remains the timing and pace of the Fed’s rate hikes. Data suggest that the central bank is closer to achieving its dual mandate. Strong gains in payrolls have resumed and wage growth has shown signs of accelerating. With economic expansion typically comes jobs, and after that, wage-driven inflation, as employers scramble for qualified workers. In a service-based economy like the U.S., wages have an outsized impact on inflation. Should this scenario play out as the Fed anticipates, inflation will eventually be on track
Janus Investment Fund | 1
Table of Contents
Janus Flexible Bond Fund (unaudited)
toward policy makers’ 2% goal. Continued patches of softness may cause the Fed to delay its initial rate hike past the widely assumed September lift-off, but in our view, rates will rise – albeit cautiously – this year.
Core inflation has held steady as crude prices stabilized before any downward pressure bled into non-energy categories. The stabilization in the U.S. dollar after its rapid appreciation also aids the inflation outlook as continued gains in the currency would have made foreign products cheaper, thus keeping a lid on prices. The dollar, however, remains one of our wild cards. Deterioration in the Greece dispute or a deceleration in non-U.S. economies could send investors fleeing back toward dollar-denominated assets, forcing a resumption in the currency’s march upward.
We are mindful that we are quite possibly nearing the end of a credit cycle. Merger and acquisition activity, share buybacks, and debt issuance are up. The result is a deterioration of corporate balance sheets. It is for this reason, while still overweight versus the benchmark, our credit allocation is near the lowest it has been since the financial crisis. Utilizing our bottom-up fundamental security-level approach, we are concentrating our holdings in higher-quality companies with steady revenue streams, and whose management have maintained balance sheet discipline.
We are also concerned with the potential for sustained periods of elevated market volatility, which we consider suppressed by continued fixed income inflows. Alarmingly low levels of liquidity are a serious risk factor, in our view. Should an illiquidity event occur, we want to be a provider of liquidity. Accordingly, we have lowered the overall duration of the portfolio, especially as a percentage of the benchmark. Treasurys are the tool we utilize to toggle duration in a cost-effective manner. Shorter-dated government securities act as a cash cushion, which should allow us to better weather storms and opportunistically make attractive investments caused by market dislocations.
We remain underweight MBS relative to the benchmark as these securities typically do not perform well in volatile markets, such as the ones we anticipate. When the direction of rates is in question, investors cannot adequately gauge prepayment risks, which stand to increase as rates decline.
Over the past quarter we have sought to reduce risks in our portfolio and expect to maintain this defensive posture as the aforementioned risk factors play out. We have not seen such a confluence of potentially adverse forces for several years. Our binding principle of capital preservation is of utmost importance as we navigate the choppy waters ahead.
Thank you for investing in Janus Flexible Bond Fund.
2 | JUNE 30, 2015
Table of Contents
(unaudited)
Janus Flexible Bond Fund At A Glance
Fund Profile
June 30, 2015
Weighted Average Maturity | 8.9 Years | |
Average Effective Duration* | 5.1 Years | |
30-day Current Yield** | ||
Class A Shares at NAV | ||
Without Reimbursement | 1.86% | |
With Reimbursement | 1.86% | |
Class A Shares at MOP | ||
Without Reimbursement | 1.77% | |
With Reimbursement | 1.77% | |
Class C Shares*** | ||
Without Reimbursement | 1.14% | |
With Reimbursement | 1.14% | |
Class D Shares | ||
Without Reimbursement | 2.02% | |
With Reimbursement | 2.02% | |
Class I Shares | ||
Without Reimbursement | 2.10% | |
With Reimbursement | 2.10% | |
Class N Shares | ||
Without Reimbursement | 2.23% | |
With Reimbursement | 2.23% | |
Class R Shares | ||
Without Reimbursement | 1.47% | |
With Reimbursement | 1.47% | |
Class S Shares | ||
Without Reimbursement | 1.73% | |
With Reimbursement | 1.73% | |
Class T Shares | ||
Without Reimbursement | 1.98% | |
With Reimbursement | 1.98% | |
Number of Bonds/Notes | 416 |
* | A theoretical measure of price volatility | |
** | Yield will fluctuate | |
*** | Does not include the 1.00% contingent deferred sales charge. |
Ratings† Summary – (% of Total Investments)
June 30, 2015
AAA | 0.1% | |
AA | 55.6% | |
A | 4.3% | |
BBB | 25.3% | |
BB | 10.6% | |
B | 1.2% | |
Not Rated | 1.3% | |
Other | 1.6% |
† | Credit ratings provided by Standard & Poor’s (S&P), an independent credit rating agency. Credit ratings range from AAA (highest) to D (lowest) based on S&P’s measures. Further information on S&P’s rating methodology may be found at www.standardandpoors.com. Other rating agencies may rate the same securities differently. Ratings are relative and subjective and are not absolute standards of quality. Credit quality does not remove market risk and is subject to change. “Not Rated” securities are not rated by S&P, but may be rated by other rating agencies and do not necessarily indicate low quality. “Other” includes cash equivalents, equity securities, and certain derivative instruments. |
Significant Areas of Investment – (% of Net Assets)
As of June 30, 2015
Asset Allocation – (% of Net Assets)
As of June 30, 2015
*Includes Other of (0)%.
Janus Investment Fund | 3
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Janus Flexible Bond Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended June 30, 2015 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||
One | Five | Ten | Since | Total Annual Fund | |||||||
Year | Year | Year | Inception* | Operating Expenses | |||||||
Janus Flexible Bond Fund – Class A Shares | |||||||||||
NAV | 1.02% | 4.23% | 5.49% | 7.02% | 0.80% | ||||||
MOP | –3.77% | 3.23% | 4.98% | 6.83% | |||||||
Janus Flexible Bond Fund – Class C Shares | |||||||||||
NAV | 0.28% | 3.44% | 4.74% | 6.33% | 1.58% | ||||||
CDSC | –0.71% | 3.44% | 4.74% | 6.33% | |||||||
Janus Flexible Bond Fund – Class D Shares(1) | 1.12% | 4.40% | 5.59% | 7.06% | 0.61% | ||||||
Janus Flexible Bond Fund – Class I Shares | 1.24% | 4.45% | 5.54% | 7.04% | 0.61% | ||||||
Janus Flexible Bond Fund – Class N Shares | 1.37% | 4.30% | 5.54% | 7.04% | 0.45% | ||||||
Janus Flexible Bond Fund – Class R Shares | 0.61% | 3.80% | 5.05% | 6.62% | 1.21% | ||||||
Janus Flexible Bond Fund – Class S Shares | 0.87% | 4.05% | 5.30% | 6.87% | 0.95% | ||||||
Janus Flexible Bond Fund – Class T Shares | 1.12% | 4.30% | 5.54% | 7.04% | 0.70% | ||||||
Barclays U.S. Aggregate Bond Index | 1.86% | 3.35% | 4.44% | 6.69%** | |||||||
Morningstar Quartile – Class T Shares | 3rd | 2nd | 1st | 1st | |||||||
Morningstar Ranking – based on total returns for Intermediate-Term Bond Funds | 589/1,088 | 277/974 | 57/862 | 21/205 | |||||||
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 4.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
4 | JUNE 30, 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
Fixed income securities are subject to interest rate, inflation, credit and default risk. The bond market is volatile. As interest rates rise, bond prices usually fall, and vice versa. The return of principal is not guaranteed, and prices may decline if an issuer fails to make timely payments or its credit strength weakens.
High-yield/high-risk bonds, also known as “junk” bonds, involve a greater risk of default and price volatility than investment grade bonds. High-yield/high-risk bonds can experience sudden and sharp price swings which will affect net asset value.
The Fund will normally invest at least 80% of its net assets, measured at the time of purchase, in the type of securities described by its name.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Class A Shares, Class C Shares, Class R Shares, and Class S Shares commenced operations on July 6, 2009. Performance shown for each class for periods prior to July 6, 2009, reflects the performance of the Fund’s Class J Shares, the initial share class (renamed Class T Shares effective February 16, 2010), calculated using the fees and expenses of each respective share class, without the effect of any fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
Class I Shares commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers.
Class N Shares commenced operations on May 31, 2012. Performance shown for periods prior to May 31, 2012, reflects the performance of the Fund’s Class T Shares, calculated using the fees and expenses of Class T Shares, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return or yield, and therefore the ranking for the period.
© 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 – July 7, 1987 | |
** | The Barclays U.S. Aggregate Bond Index’s since inception returns are calculated from June 30, 1987. | |
(1) | Closed to certain new investors. |
Janus Investment Fund | 5
Table of Contents
Janus Flexible Bond Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,003.60 | $ | 3.92 | $ | 1,000.00 | $ | 1,020.88 | $ | 3.96 | 0.79% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 999.90 | $ | 7.54 | $ | 1,000.00 | $ | 1,017.26 | $ | 7.60 | 1.52% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,003.60 | $ | 2.98 | $ | 1,000.00 | $ | 1,021.82 | $ | 3.01 | 0.60% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,004.60 | $ | 2.83 | $ | 1,000.00 | $ | 1,021.97 | $ | 2.86 | 0.57% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 1,005.30 | $ | 2.19 | $ | 1,000.00 | $ | 1,022.61 | $ | 2.21 | 0.44% | |||||||||||||||||
Class R Shares | $ | 1,000.00 | $ | 1,001.60 | $ | 5.91 | $ | 1,000.00 | $ | 1,018.89 | $ | 5.96 | 1.19% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,002.80 | $ | 4.62 | $ | 1,000.00 | $ | 1,020.18 | $ | 4.66 | 0.93% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,004.10 | $ | 3.43 | $ | 1,000.00 | $ | 1,021.37 | $ | 3.46 | 0.69% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 181/365 (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 | JUNE 30, 2015
Table of Contents
Janus Flexible Bond Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Asset-Backed/Commercial Mortgage-Backed Securities – 5.9% | ||||||||||
$17,183,000 | AmeriCredit Automobile Receivables Trust 2012-4 2.6800%, 10/9/18 | $ | 17,502,054 | |||||||
5,936,000 | AmeriCredit Automobile Receivables Trust 2012-4 3.8200%, 2/10/20 (144A) | 6,085,670 | ||||||||
5,767,000 | AmeriCredit Automobile Receivables Trust 2013-4 3.3100%, 10/8/19 | 5,917,674 | ||||||||
10,606,000 | AmeriCredit Automobile Receivables Trust 2015-2 3.0000%, 6/8/21 | 10,623,765 | ||||||||
53,873,000 | Applebee’s Funding LLC / IHOP Funding LLC 4.2770%, 9/5/44 (144A) | 54,605,619 | ||||||||
11,283,000 | Aventura Mall Trust 2013-AVM 3.8674%, 12/5/32 (144A),‡ | 11,026,639 | ||||||||
13,545,000 | BAMLL Commercial Mortgage Securities Trust 2015-200P 3.7157%, 4/14/33 (144A),‡ | 11,947,977 | ||||||||
6,100,000 | Banc of America Commercial Mortgage Trust 2006-6 5.4210%, 10/10/45 | 6,284,982 | ||||||||
4,074,640 | Banc of America Commercial Mortgage Trust 2007-5 5.7720%, 2/10/51‡ | 4,285,535 | ||||||||
9,046,000 | Boca Hotel Portfolio Trust 2013-BOCA 3.2355%, 8/15/26 (144A),‡ | 9,040,654 | ||||||||
4,772,000 | CGBAM Commercial Mortgage Trust 2014-HD 3.1855%, 2/15/31 (144A),‡ | 4,773,021 | ||||||||
22,948,437 | CKE Restaurant Holdings, Inc. 4.4740%, 3/20/43 (144A) | 23,303,496 | ||||||||
10,183,111 | COMM 2007-C9 Mortgage Trust 5.6500%, 12/10/49‡ | 10,639,263 | ||||||||
1,642,632 | COMM 2007-C9 Mortgage Trust 5.9889%, 12/10/49‡ | 1,704,234 | ||||||||
16,756,955 | Commercial Mortgage Trust 2007-GG11 5.8670%, 12/10/49‡ | 17,974,348 | ||||||||
14,856,000 | Core Industrial Trust 2015-TEXW 3.9770%, 2/10/34 (144A),‡ | 13,945,595 | ||||||||
10,552,553 | DB Master Finance LLC 2015-1 3.2620%, 2/20/45 (144A) | 10,592,526 | ||||||||
16,395,330 | Domino’s Pizza Master Issuer LLC 5.2160%, 1/25/42 (144A) | 16,923,604 | ||||||||
4,341,000 | Freddie Mac Structured Agency Credit Risk Debt Notes 2.5870%, 10/25/24‡ | 4,356,588 | ||||||||
3,924,000 | Freddie Mac Structured Agency Credit Risk Debt Notes 2.8370%, 10/25/24‡ | 3,966,976 | ||||||||
17,289,000 | Freddie Mac Structured Agency Credit Risk Debt Notes 2.3870%, 3/25/25‡ | 17,164,899 | ||||||||
18,455,683 | FREMF 2010 K-SCT Mortgage Trust 2.0000%, 1/25/20§ | 16,455,160 | ||||||||
7,038,000 | GAHR Commercial Mortgage Trust 2015-NRF 3.4949%, 12/15/19 (144A),‡ | 6,894,622 | ||||||||
16,057,000 | GS Mortgage Securities Corp. II 3.5495%, 12/10/27 (144A),‡ | 15,216,320 | ||||||||
7,337,000 | GS Mortgage Securities Corp. Trust 2013-NYC5 3.7706%, 1/10/30 (144A),‡ | 7,426,996 | ||||||||
6,561,000 | Hilton USA Trust 2013-HLT 4.4065%, 11/5/30 (144A) | 6,617,930 | ||||||||
8,879,000 | Hilton USA Trust 2013-HLT 5.6086%, 11/5/30 (144A),‡ | 8,999,035 | ||||||||
11,409,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2013-WT 2.8044%, 2/16/25 (144A) | 11,568,966 | ||||||||
10,846,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2013-WT 4.8447%, 2/16/25 (144A) | 11,296,586 | ||||||||
4,802,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2014-FBLU 2.7860%, 12/15/28 (144A),‡ | 4,808,026 | ||||||||
4,118,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2014-FBLU 3.6815%, 12/15/28 (144A),‡ | 4,116,040 | ||||||||
8,087,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2015-COSMO 1.9855%, 1/15/32 (144A),‡ | 8,061,186 | ||||||||
8,771,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2015-COSMO 4.1355%, 1/15/32 (144A),‡ | 8,794,568 | ||||||||
19,082,072 | LB-UBS Commercial Mortgage Trust 2007-C2 5.4930%, 2/15/40‡ | 20,015,223 | ||||||||
7,174,000 | Santander Drive Auto Receivables Trust 2.5200%, 9/17/18 | 7,210,523 | ||||||||
7,096,000 | Santander Drive Auto Receivables Trust 2012-5 3.3000%, 9/17/18 | 7,248,301 | ||||||||
16,985,000 | Santander Drive Auto Receivables Trust 2013-4 4.6700%, 1/15/20 (144A) | 17,673,572 | ||||||||
11,378,000 | Santander Drive Auto Receivables Trust 2013-A 4.7100%, 1/15/21 (144A) | 12,046,674 | ||||||||
10,877,000 | Santander Drive Auto Receivables Trust 2015-1 3.2400%, 4/15/21 | 10,938,140 | ||||||||
5,056,000 | Starwood Retail Property Trust 2014-STAR 2.5000%, 11/15/27 (144A),‡ | 5,032,490 | ||||||||
17,072,364 | Starwood Retail Property Trust 2014-STAR 3.2500%, 11/15/27 (144A),‡ | 17,064,169 | ||||||||
8,304,000 | Starwood Retail Property Trust 2014-STAR 4.1500%, 11/15/27 (144A),‡ | 8,299,682 | ||||||||
19,671,028 | Wachovia Bank Commercial Mortgage Trust Series 2007-C30 5.3830%, 12/15/43 | 20,670,513 | ||||||||
24,809,006 | Wachovia Bank Commercial Mortgage Trust Series 2007-C31 5.6600%, 4/15/47‡ | 25,445,531 | ||||||||
7,804,441 | Wachovia Bank Commercial Mortgage Trust Series 2007-C33 6.1496%, 2/15/51‡ | 8,068,457 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
Janus Flexible Bond Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
$4,976,000 | Wells Fargo Commercial Mortgage Trust 2014-TISH 2.9355%, 1/15/27 (144A),‡ | $ | 4,940,422 | |||||||
6,897,000 | Wells Fargo Commercial Mortgage Trust 2014-TISH 2.4355%, 2/15/27 (144A),‡ | 6,846,148 | ||||||||
2,019,000 | Wells Fargo Commercial Mortgage Trust 2014-TISH 3.4355%, 2/15/27 (144A),‡ | 2,000,294 | ||||||||
38,422,000 | Wendy’s Funding LLC 2015-1 3.3710%, 6/15/45 (144A) | 38,364,252 | ||||||||
Total Asset-Backed/Commercial Mortgage-Backed Securities (cost��$585,739,387) | 584,784,945 | |||||||||
Bank Loans and Mezzanine Loans – 0.8% | ||||||||||
Communications – 0.1% | ||||||||||
9,495,731 | Tribune Media Co. 3.7500%, 12/27/20‡ | 9,492,661 | ||||||||
Consumer Cyclical – 0.1% | ||||||||||
7,232,000 | Staples, Inc. 0%, 4/7/21(a),‡ | 7,215,439 | ||||||||
Consumer Non-Cyclical – 0.1% | ||||||||||
14,264,438 | IMS Health, Inc. 3.5000%, 3/17/21‡ | 14,175,209 | ||||||||
Technology – 0.5% | ||||||||||
53,275,415 | Avago Technologies Cayman, Ltd. 3.7500%, 5/6/21‡ | 53,322,831 | ||||||||
Total Bank Loans and Mezzanine Loans (cost $84,247,506) | 84,206,140 | |||||||||
Corporate Bonds – 35.9% | ||||||||||
Asset-Backed Securities – 0.2% | ||||||||||
22,024,000 | American Tower Trust I 1.5510%, 3/15/18 (144A) | 21,913,307 | ||||||||
Banking – 4.8% | ||||||||||
3,897,000 | Ally Financial, Inc. 8.0000%, 12/31/18 | 4,350,026 | ||||||||
21,867,000 | Ally Financial, Inc. 4.1250%, 3/30/20 | 21,825,890 | ||||||||
17,050,000 | Ally Financial, Inc. 4.6250%, 5/19/22 | 16,836,875 | ||||||||
15,590,000 | American Express Co. 6.8000%, 9/1/66‡ | 16,040,551 | ||||||||
9,490,000 | Bank of America Corp. 1.5000%, 10/9/15 | 9,511,780 | ||||||||
33,040,000 | Bank of America Corp. 8.0000%†,µ | 34,857,200 | ||||||||
11,601,000 | Citigroup, Inc. 5.8000%µ | 11,630,002 | ||||||||
7,754,000 | Discover Financial Services 3.9500%, 11/6/24 | 7,534,329 | ||||||||
16,237,000 | Discover Financial Services 3.7500%, 3/4/25 | 15,503,558 | ||||||||
30,440,000 | Goldman Sachs Capital I 6.3450%, 2/15/34 | 35,305,530 | ||||||||
9,209,000 | Goldman Sachs Group, Inc. 5.6250%, 1/15/17 | 9,751,567 | ||||||||
18,354,000 | Intesa Sanpaolo SpA 5.0170%, 6/26/24 (144A) | 17,831,719 | ||||||||
20,855,000 | Morgan Stanley 5.5500%µ | 20,703,801 | ||||||||
17,608,000 | Royal Bank of Scotland Group PLC 2.5500%, 9/18/15 | 17,657,232 | ||||||||
34,600,000 | Royal Bank of Scotland Group PLC 6.1000%, 6/10/23 | 36,788,000 | ||||||||
31,409,000 | Royal Bank of Scotland Group PLC 6.0000%, 12/19/23 | 33,259,995 | ||||||||
44,544,000 | Royal Bank of Scotland Group PLC 5.1250%, 5/28/24 | 44,489,790 | ||||||||
52,252,000 | Santander UK PLC 5.0000%, 11/7/23 (144A) | 53,468,636 | ||||||||
17,082,000 | SVB Financial Group 5.3750%, 9/15/20 | 19,035,088 | ||||||||
21,346,000 | Synchrony Financial 3.0000%, 8/15/19 | 21,497,941 | ||||||||
31,397,000 | Zions Bancorporation 5.8000%µ | 29,866,396 | ||||||||
477,745,906 | ||||||||||
Basic Industry – 2.0% | ||||||||||
28,262,000 | Albemarle Corp. 4.1500%, 12/1/24 | 28,170,742 | ||||||||
23,247,000 | Albemarle Corp. 5.4500%, 12/1/44 | 23,267,876 | ||||||||
12,105,000 | Ashland, Inc. 3.8750%, 4/15/18 | 12,437,887 | ||||||||
15,928,000 | Ashland, Inc. 6.8750%, 5/15/43 | 16,166,920 | ||||||||
34,351,000 | Georgia-Pacific LLC 3.1630%, 11/15/21 (144A) | 34,768,846 | ||||||||
17,305,000 | Georgia-Pacific LLC 3.6000%, 3/1/25 (144A) | 17,135,238 | ||||||||
24,471,000 | LyondellBasell Industries NV 4.6250%, 2/26/55 | 21,550,215 | ||||||||
17,484,000 | Reliance Steel & Aluminum Co. 4.5000%, 4/15/23 | 17,199,832 | ||||||||
22,679,000 | Rockwood Specialties Group, Inc. 4.6250%, 10/15/20 | 23,614,509 | ||||||||
194,312,065 | ||||||||||
Brokerage – 3.3% | ||||||||||
29,518,000 | Ameriprise Financial, Inc. 7.5180%, 6/1/66‡ | 29,518,000 | ||||||||
14,459,000 | Carlyle Holdings Finance LLC 3.8750%, 2/1/23 (144A) | 14,613,495 | ||||||||
13,811,000 | Charles Schwab Corp. 3.0000%, 3/10/25 | 13,546,754 | ||||||||
16,810,000 | Charles Schwab Corp. 7.0000%µ | 19,523,807 | ||||||||
22,741,000 | E*TRADE Financial Corp. 5.3750%, 11/15/22 | 23,309,525 | ||||||||
30,276,000 | E*TRADE Financial Corp. 4.6250%, 9/15/23 | 29,746,170 | ||||||||
477,000 | Lazard Group LLC 6.8500%, 6/15/17 | 521,085 | ||||||||
21,479,000 | Lazard Group LLC 4.2500%, 11/14/20 | 22,584,309 | ||||||||
22,436,000 | Neuberger Berman Group LLC / Neuberger Berman Finance Corp. 5.8750%, 3/15/22 (144A) | 23,978,475 | ||||||||
24,325,000 | Neuberger Berman Group LLC / Neuberger Berman Finance Corp. 4.8750%, 4/15/45 (144A) | 22,055,915 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Brokerage – (continued) | ||||||||||
$50,059,000 | Raymond James Financial, Inc. 5.6250%, 4/1/24 | $ | 55,685,732 | |||||||
14,736,000 | Stifel Financial Corp. 4.2500%, 7/18/24 | 14,560,082 | ||||||||
19,194,000 | TD Ameritrade Holding Corp. 2.9500%, 4/1/22 | 19,030,985 | ||||||||
41,567,000 | TD Ameritrade Holding Corp. 3.6250%, 4/1/25 | 42,213,242 | ||||||||
330,887,576 | ||||||||||
Capital Goods – 1.7% | ||||||||||
13,010,000 | CNH Industrial Capital LLC 3.6250%, 4/15/18 | 13,010,000 | ||||||||
13,530,000 | Exelis, Inc. 4.2500%, 10/1/16 | 13,963,150 | ||||||||
5,847,000 | Exelis, Inc. 5.5500%, 10/1/21 | 6,433,524 | ||||||||
19,079,000 | FLIR Systems, Inc. 3.7500%, 9/1/16 | 19,557,940 | ||||||||
13,193,000 | Hanson, Ltd. 6.1250%, 8/15/16 | 13,740,510 | ||||||||
8,090,000 | Harris Corp. 3.8320%, 4/27/25 | 7,864,054 | ||||||||
12,245,000 | Harris Corp. 5.0540%, 4/27/45 | 11,666,007 | ||||||||
10,123,000 | Martin Marietta Materials, Inc. 4.2500%, 7/2/24 | 10,247,685 | ||||||||
8,366,000 | Owens Corning 4.2000%, 12/1/24 | 8,211,798 | ||||||||
14,037,000 | Vulcan Materials Co. 7.0000%, 6/15/18 | 15,861,810 | ||||||||
7,564,000 | Vulcan Materials Co. 7.5000%, 6/15/21 | 8,698,600 | ||||||||
35,509,000 | Vulcan Materials Co. 4.5000%, 4/1/25 | 35,420,228 | ||||||||
164,675,306 | ||||||||||
Communications – 0.4% | ||||||||||
7,671,000 | Nielsen Finance LLC / Nielsen Finance Co. 4.5000%, 10/1/20 | 7,632,645 | ||||||||
12,185,000 | SBA Tower Trust 2.9330%, 12/15/17 (144A) | 12,364,887 | ||||||||
18,507,000 | UBM PLC 5.7500%, 11/3/20 (144A) | 19,970,848 | ||||||||
39,968,380 | ||||||||||
Consumer Cyclical – 2.6% | ||||||||||
24,302,000 | 1011778 BC ULC / New Red Finance, Inc. 4.6250%, 1/15/22 (144A) | 23,937,470 | ||||||||
40,643,000 | Brinker International, Inc. 3.8750%, 5/15/23 | 39,628,226 | ||||||||
5,191,000 | Continental Rubber of America Corp. 4.5000%, 9/15/19 (144A) | 5,332,403 | ||||||||
7,454,000 | DR Horton, Inc. 4.7500%, 5/15/17 | 7,733,525 | ||||||||
13,121,000 | DR Horton, Inc. 3.7500%, 3/1/19 | 13,219,407 | ||||||||
7,690,000 | General Motors Co. 3.5000%, 10/2/18 | 7,940,002 | ||||||||
55,060,000 | General Motors Co. 4.8750%, 10/2/23 | 58,048,271 | ||||||||
6,253,000 | General Motors Co. 6.2500%, 10/2/43 | 6,975,565 | ||||||||
7,637,000 | General Motors Financial Co., Inc. 3.2500%, 5/15/18 | 7,810,696 | ||||||||
5,271,000 | Macy’s Retail Holdings, Inc. 5.9000%, 12/1/16 | 5,615,971 | ||||||||
14,923,000 | MDC Holdings, Inc. 5.5000%, 1/15/24 | 14,661,847 | ||||||||
7,505,000 | Schaeffler Finance BV 4.2500%, 5/15/21 (144A) | 7,317,375 | ||||||||
11,902,000 | Starwood Hotels & Resorts Worldwide, Inc. 7.1500%, 12/1/19 | 13,844,716 | ||||||||
6,413,000 | Toll Brothers Finance Corp. 4.0000%, 12/31/18 | 6,541,260 | ||||||||
5,219,000 | Toll Brothers Finance Corp. 5.8750%, 2/15/22 | 5,597,378 | ||||||||
3,571,000 | Toll Brothers Finance Corp. 4.3750%, 4/15/23 | 3,499,580 | ||||||||
11,076,000 | Wynn Las Vegas LLC / Wynn Las Vegas Capital Corp. 4.2500%, 5/30/23 (144A) | 10,189,920 | ||||||||
9,222,000 | ZF North America Capital, Inc. 4.0000%, 4/29/20 (144A) | 9,210,473 | ||||||||
4,750,000 | ZF North America Capital, Inc. 4.5000%, 4/29/22 (144A) | 4,652,863 | ||||||||
9,272,000 | ZF North America Capital, Inc. 4.7500%, 4/29/25 (144A) | 8,976,501 | ||||||||
260,733,449 | ||||||||||
Consumer Non-Cyclical – 4.7% | ||||||||||
2,071,000 | Actavis Funding SCS 2.4500%, 6/15/19 | 2,062,741 | ||||||||
29,067,000 | Actavis Funding SCS 3.0000%, 3/12/20 | 29,132,924 | ||||||||
5,886,000 | Actavis Funding SCS 3.8500%, 6/15/24 | 5,815,062 | ||||||||
33,629,000 | Actavis Funding SCS 3.8000%, 3/15/25 | 33,034,507 | ||||||||
24,026,000 | Actavis Funding SCS 4.5500%, 3/15/35 | 22,843,248 | ||||||||
5,231,000 | Actavis Funding SCS 4.8500%, 6/15/44 | 5,046,837 | ||||||||
12,002,000 | Actavis Funding SCS 4.7500%, 3/15/45 | 11,426,552 | ||||||||
19,188,000 | Becton Dickinson and Co. 1.8000%, 12/15/17 | 19,190,341 | ||||||||
25,450,000 | Fresenius Medical Care US Finance II, Inc. 5.8750%, 1/31/22 (144A) | 26,977,000 | ||||||||
9,413,000 | HCA, Inc. 3.7500%, 3/15/19 | 9,483,598 | ||||||||
14,526,000 | HJ Heinz Co. 2.8000%, 7/2/20 (144A) | 14,537,301 | ||||||||
12,441,000 | HJ Heinz Co. 3.5000%, 7/15/22 (144A) | 12,470,187 | ||||||||
22,367,000 | Laboratory Corp. of America Holdings 3.2000%, 2/1/22 | 22,051,491 | ||||||||
22,367,000 | Laboratory Corp. of America Holdings 3.6000%, 2/1/25 | 21,392,022 | ||||||||
15,111,000 | Life Technologies Corp. 6.0000%, 3/1/20 | 16,997,775 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus Flexible Bond Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Consumer Non-Cyclical – (continued) | ||||||||||
$4,544,000 | Life Technologies Corp. 5.0000%, 1/15/21 | $ | 4,999,091 | |||||||
9,063,000 | Omnicare, Inc. 4.7500%, 12/1/22 | 9,606,780 | ||||||||
11,194,000 | Omnicare, Inc. 5.0000%, 12/1/24 | 12,033,550 | ||||||||
3,276,000 | Smithfield Foods, Inc. 5.2500%, 8/1/18 (144A) | 3,325,140 | ||||||||
10,687,000 | Thermo Fisher Scientific, Inc. 3.3000%, 2/15/22 | 10,560,701 | ||||||||
9,170,000 | Tyson Foods, Inc. 6.6000%, 4/1/16 | 9,520,477 | ||||||||
12,232,000 | Valeant Pharmaceuticals International, Inc. 5.8750%, 5/15/23 (144A) | 12,537,800 | ||||||||
12,232,000 | Valeant Pharmaceuticals International, Inc. 6.1250%, 4/15/25 (144A) | 12,583,670 | ||||||||
26,616,000 | Wm Wrigley Jr Co. 2.4000%, 10/21/18 (144A) | 26,994,107 | ||||||||
28,643,000 | Wm Wrigley Jr Co. 3.3750%, 10/21/20 (144A) | 29,515,895 | ||||||||
21,785,000 | Zimmer Biomet Holdings, Inc. 2.7000%, 4/1/20 | 21,677,230 | ||||||||
25,746,000 | Zimmer Biomet Holdings, Inc. 3.1500%, 4/1/22 | 25,325,207 | ||||||||
29,665,000 | Zimmer Biomet Holdings, Inc. 3.5500%, 4/1/25 | 28,661,937 | ||||||||
459,803,171 | ||||||||||
Electric – 0.4% | ||||||||||
8,524,000 | IPALCO Enterprises, Inc. 5.0000%, 5/1/18 | 8,992,820 | ||||||||
11,407,000 | PPL WEM, Ltd. / Western Power Distribution, Ltd. 3.9000%, 5/1/16 (144A) | 11,635,220 | ||||||||
16,789,000 | PPL WEM, Ltd. / Western Power Distribution, Ltd. 5.3750%, 5/1/21 (144A) | 18,571,404 | ||||||||
39,199,444 | ||||||||||
Energy – 4.7% | ||||||||||
17,645,000 | Chesapeake Energy Corp. 5.3750%, 6/15/21 | 15,968,725 | ||||||||
19,319,000 | Chesapeake Energy Corp. 4.8750%, 4/15/22 | 16,759,232 | ||||||||
15,544,000 | Chevron Corp. 1.3450%, 11/15/17 | 15,607,202 | ||||||||
48,648,000 | Cimarex Energy Co. 5.8750%, 5/1/22 | 52,053,360 | ||||||||
39,739,000 | Cimarex Energy Co. 4.3750%, 6/1/24 | 39,249,415 | ||||||||
27,627,000 | DCP Midstream Operating LP 4.9500%, 4/1/22 | 27,245,250 | ||||||||
11,809,000 | DCP Midstream Operating LP 3.8750%, 3/15/23 | 10,910,548 | ||||||||
5,433,000 | DCP Midstream Operating LP 5.6000%, 4/1/44 | 4,845,671 | ||||||||
14,686,000 | Devon Energy Corp. 2.2500%, 12/15/18 | 14,725,814 | ||||||||
9,742,000 | Energy Transfer Partners LP 4.1500%, 10/1/20 | 10,012,438 | ||||||||
12,923,000 | EnLink Midstream Partners LP 4.4000%, 4/1/24 | 12,957,776 | ||||||||
9,943,000 | EnLink Midstream Partners LP 5.6000%, 4/1/44 | 9,660,847 | ||||||||
10,311,000 | Forum Energy Technologies, Inc. 6.2500%, 10/1/21 | 10,207,890 | ||||||||
30,523,000 | Helmerich & Payne International Drilling Co. 4.6500%, 3/15/25 (144A) | 31,508,527 | ||||||||
8,699,000 | Kinder Morgan Energy Partners LP 5.0000%, 10/1/21 | 9,204,786 | ||||||||
8,987,000 | Kinder Morgan Energy Partners LP 4.3000%, 5/1/24 | 8,868,767 | ||||||||
1,004,000 | Kinder Morgan, Inc. 6.5000%, 9/15/20 | 1,148,081 | ||||||||
10,741,000 | Kinder Morgan, Inc. 7.7500%, 1/15/32 | 12,309,744 | ||||||||
8,609,000 | Motiva Enterprises LLC 5.7500%, 1/15/20 (144A) | 9,465,802 | ||||||||
1,588,000 | Nabors Industries, Inc. 6.1500%, 2/15/18 | 1,714,786 | ||||||||
19,140,000 | NGL Energy Partners LP / NGL Energy Finance Corp. 5.1250%, 7/15/19 | 19,092,150 | ||||||||
41,878,000 | Oceaneering International, Inc. 4.6500%, 11/15/24 | 41,839,640 | ||||||||
6,254,000 | Phillips 66 Partners LP 3.6050%, 2/15/25 | 5,885,702 | ||||||||
2,126,000 | Southern Star Central Gas Pipeline, Inc. 6.0000%, 6/1/16 (144A) | 2,189,638 | ||||||||
23,742,000 | Spectra Energy Partners LP 4.7500%, 3/15/24 | 25,091,353 | ||||||||
18,524,000 | Targa Resources Partners LP / Targa Resources Partners Finance Corp. 4.1250%, 11/15/19 (144A) | 18,338,760 | ||||||||
37,314,000 | Western Gas Partners LP 5.3750%, 6/1/21 | 40,276,806 | ||||||||
467,138,710 | ||||||||||
Finance Companies – 1.8% | ||||||||||
11,355,000 | AerCap Ireland Capital, Ltd. / AerCap Global Aviation Trust 4.6250%, 7/1/22 | 11,383,388 | ||||||||
51,980,000 | CIT Group, Inc. 4.2500%, 8/15/17 | 52,759,700 | ||||||||
30,071,000 | CIT Group, Inc. 5.5000%, 2/15/19 (144A) | 31,349,017 | ||||||||
15,636,000 | GE Capital Trust I 6.3750%, 11/15/67‡ | 16,699,248 | ||||||||
17,080,000 | General Electric Capital Corp. 6.3750%, 11/15/67‡ | 18,361,000 | ||||||||
30,605,000 | General Electric Capital Corp. 6.2500%µ | 33,474,219 | ||||||||
7,600,000 | General Electric Capital Corp. 7.1250%µ | 8,768,500 | ||||||||
172,795,072 | ||||||||||
Financial – 1.0% | ||||||||||
26,173,000 | Jones Lang LaSalle, Inc. 4.4000%, 11/15/22 | 26,845,332 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Financial – (continued) | ||||||||||
$26,082,000 | Kennedy-Wilson, Inc. 5.8750%, 4/1/24 | $ | 25,951,590 | |||||||
44,984,000 | LeasePlan Corp. NV 2.5000%, 5/16/18 (144A) | 45,050,126 | ||||||||
97,847,048 | ||||||||||
Industrial – 0.1% | ||||||||||
6,602,000 | Cintas Corp. No 2 2.8500%, 6/1/16 | 6,686,413 | ||||||||
7,059,000 | Cintas Corp. No 2 4.3000%, 6/1/21 | 7,614,875 | ||||||||
14,301,288 | ||||||||||
Insurance – 0.8% | ||||||||||
5,527,000 | CNO Financial Group, Inc. 4.5000%, 5/30/20 | 5,609,905 | ||||||||
15,744,000 | CNO Financial Group, Inc. 5.2500%, 5/30/25 | 15,999,053 | ||||||||
36,983,000 | Primerica, Inc. 4.7500%, 7/15/22 | 39,456,460 | ||||||||
14,766,000 | Voya Financial, Inc. 5.6500%, 5/15/53‡ | 15,079,777 | ||||||||
76,145,195 | ||||||||||
Owned No Guarantee – 0.1% | ||||||||||
11,655,000 | Korea National Oil Corp. 4.0000%, 10/27/16 (144A) | 12,067,937 | ||||||||
Real Estate Investment Trusts (REITs) – 1.7% | ||||||||||
14,513,000 | Alexandria Real Estate Equities, Inc. 2.7500%, 1/15/20 | 14,365,403 | ||||||||
27,120,000 | Alexandria Real Estate Equities, Inc. 4.6000%, 4/1/22 | 28,569,157 | ||||||||
10,906,000 | Alexandria Real Estate Equities, Inc. 4.5000%, 7/30/29 | 10,926,612 | ||||||||
28,228,000 | Goodman Funding Pty, Ltd. 6.3750%, 4/15/21 (144A) | 32,394,029 | ||||||||
12,287,000 | Post Apartment Homes LP 4.7500%, 10/15/17 | 13,092,204 | ||||||||
3,690,000 | Reckson Operating Partnership LP 6.0000%, 3/31/16 | 3,811,246 | ||||||||
3,748,000 | Retail Opportunity Investments Partnership LP 5.0000%, 12/15/23 | 3,932,506 | ||||||||
8,295,000 | Retail Opportunity Investments Partnership LP 4.0000%, 12/15/24 | 8,207,214 | ||||||||
5,446,000 | Senior Housing Properties Trust 6.7500%, 4/15/20 | 6,115,760 | ||||||||
6,367,000 | Senior Housing Properties Trust 6.7500%, 12/15/21 | 7,247,582 | ||||||||
11,754,000 | SL Green Realty Corp. 5.0000%, 8/15/18 | 12,584,538 | ||||||||
20,911,000 | SL Green Realty Corp. 7.7500%, 3/15/20 | 24,913,951 | ||||||||
166,160,202 | ||||||||||
Technology – 4.8% | ||||||||||
12,973,000 | Autodesk, Inc. 3.6000%, 12/15/22 | 12,904,529 | ||||||||
34,834,000 | Cadence Design Systems, Inc. 4.3750%, 10/15/24 | 34,945,678 | ||||||||
3,681,000 | Fidelity National Information Services, Inc. 5.0000%, 3/15/22 | 3,885,557 | ||||||||
12,358,000 | Fiserv, Inc. 3.1250%, 10/1/15 | 12,423,732 | ||||||||
9,513,000 | Molex Electronic Technologies LLC 2.8780%, 4/15/20 (144A) | 9,366,994 | ||||||||
37,895,000 | Molex Electronic Technologies LLC 3.9000%, 4/15/25 (144A) | 36,718,436 | ||||||||
6,765,000 | Seagate HDD Cayman 4.7500%, 6/1/23 | 6,870,994 | ||||||||
73,656,000 | Seagate HDD Cayman 4.7500%, 1/1/25 (144A) | 73,203,163 | ||||||||
20,474,000 | Seagate HDD Cayman 4.8750%, 6/1/27 (144A) | 19,902,079 | ||||||||
24,197,000 | Seagate HDD Cayman 5.7500%, 12/1/34 (144A) | 23,824,874 | ||||||||
40,788,000 | Trimble Navigation, Ltd. 4.7500%, 12/1/24 | 40,843,064 | ||||||||
59,898,000 | TSMC Global, Ltd. 1.6250%, 4/3/18 (144A) | 59,212,707 | ||||||||
11,248,000 | Verisk Analytics, Inc. 4.8750%, 1/15/19 | 12,024,101 | ||||||||
44,480,000 | Verisk Analytics, Inc. 5.8000%, 5/1/21 | 50,044,226 | ||||||||
13,410,000 | Verisk Analytics, Inc. 4.1250%, 9/12/22 | 13,654,545 | ||||||||
41,613,000 | Verisk Analytics, Inc. 4.0000%, 6/15/25 | 40,751,777 | ||||||||
22,416,000 | Verisk Analytics, Inc. 5.5000%, 6/15/45 | 22,046,091 | ||||||||
472,622,547 | ||||||||||
Transportation – 0.8% | ||||||||||
2,570,000 | Asciano Finance, Ltd. 3.1250%, 9/23/15 (144A) | 2,580,452 | ||||||||
18,493,000 | JB Hunt Transport Services, Inc. 3.3750%, 9/15/15 | 18,585,964 | ||||||||
2,552,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 2.5000%, 3/15/16 (144A) | 2,569,841 | ||||||||
23,616,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 3.3750%, 3/15/18 (144A) | 24,339,406 | ||||||||
9,798,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 2.5000%, 6/15/19 (144A) | 9,704,517 | ||||||||
1,487,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 4.8750%, 7/11/22 (144A) | 1,571,337 | ||||||||
10,769,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 4.2500%, 1/17/23 (144A) | 10,913,423 | ||||||||
11,607,000 | Southwest Airlines Co. 5.1250%, 3/1/17 | 12,315,886 | ||||||||
82,580,826 | ||||||||||
Total Corporate Bonds (cost $3,526,318,602) | 3,550,897,429 | |||||||||
Mortgage-Backed Securities – 18.8% | ||||||||||
Fannie Mae Pool: | ||||||||||
2,626,948 | 5.5000%, 1/1/25 | 2,867,731 | ||||||||
3,808,562 | 4.0000%, 6/1/29 | 4,095,045 | ||||||||
9,854,952 | 4.0000%, 9/1/29 | 10,595,715 | ||||||||
9,474,175 | 5.0000%, 9/1/29 | 10,454,017 | ||||||||
46,989,662 | 3.5000%, 10/1/29 | 49,535,263 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Janus Flexible Bond Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Mortgage-Backed Securities – (continued) | ||||||||||
Fannie Mae Pool: (continued) | ||||||||||
$3,765,507 | 5.0000%, 1/1/30 | $ | 4,157,334 | |||||||
1,733,558 | 5.5000%, 1/1/33 | 1,947,517 | ||||||||
10,477,076 | 4.0000%, 4/1/34 | 11,306,222 | ||||||||
8,610,056 | 6.0000%, 10/1/35 | 9,843,137 | ||||||||
6,849,516 | 6.0000%, 12/1/35 | 7,833,681 | ||||||||
3,270,276 | 6.0000%, 2/1/37 | 3,781,417 | ||||||||
10,492,753 | 6.0000%, 9/1/37 | 11,550,336 | ||||||||
8,482,749 | 6.0000%, 10/1/38 | 9,650,755 | ||||||||
2,993,731 | 7.0000%, 2/1/39 | 3,617,993 | ||||||||
9,751,969 | 5.5000%, 3/1/40 | 11,138,731 | ||||||||
22,931,314 | 5.5000%, 4/1/40 | 25,860,420 | ||||||||
2,523,332 | 4.5000%, 10/1/40 | 2,748,064 | ||||||||
2,581,339 | 5.0000%, 10/1/40 | 2,893,926 | ||||||||
24,593,877 | 5.0000%, 2/1/41 | 27,390,285 | ||||||||
5,424,334 | 5.5000%, 2/1/41 | 6,190,562 | ||||||||
4,736,891 | 5.0000%, 4/1/41 | 5,278,545 | ||||||||
4,497,002 | 5.0000%, 5/1/41 | 4,980,931 | ||||||||
7,565,345 | 5.5000%, 5/1/41 | 8,491,625 | ||||||||
6,511,260 | 5.5000%, 6/1/41 | 7,322,618 | ||||||||
11,984,262 | 5.0000%, 7/1/41 | 13,344,463 | ||||||||
26,353,771 | 5.5000%, 7/1/41 | 29,599,055 | ||||||||
11,132,348 | 4.5000%, 8/1/41 | 12,113,516 | ||||||||
5,435,329 | 5.0000%, 10/1/41 | 6,046,871 | ||||||||
14,142,767 | 5.5000%, 12/1/41 | 15,966,150 | ||||||||
15,099,032 | 4.0000%, 6/1/42 | 16,111,966 | ||||||||
30,074,200 | 3.5000%, 7/1/42 | 31,130,738 | ||||||||
9,511,739 | 4.0000%, 7/1/42 | 10,148,727 | ||||||||
6,593,618 | 4.0000%, 8/1/42 | 7,036,039 | ||||||||
7,753,035 | 4.0000%, 9/1/42 | 8,273,518 | ||||||||
8,097,399 | 4.0000%, 9/1/42 | 8,642,517 | ||||||||
10,023,851 | 4.0000%, 11/1/42 | 10,697,151 | ||||||||
4,121,206 | 4.0000%, 12/1/42 | 4,407,435 | ||||||||
18,958,422 | 3.5000%, 1/1/43 | 19,567,660 | ||||||||
38,900,186 | 3.5000%, 2/1/43 | 40,149,140 | ||||||||
43,992,196 | 3.5000%, 2/1/43 | 45,407,337 | ||||||||
44,994,643 | 4.5000%, 2/1/43 | 49,049,124 | ||||||||
20,461,603 | 3.5000%, 3/1/43 | 21,117,448 | ||||||||
14,493,930 | 4.5000%, 3/1/43 | 15,963,705 | ||||||||
20,707,568 | 4.0000%, 5/1/43 | 22,097,781 | ||||||||
27,579,223 | 4.0000%, 7/1/43 | 29,436,130 | ||||||||
24,327,712 | 4.0000%, 8/1/43 | 25,966,509 | ||||||||
7,236,101 | 4.0000%, 9/1/43 | 7,717,124 | ||||||||
11,391,282 | 3.5000%, 1/1/44 | 11,813,732 | ||||||||
28,722,878 | 3.5000%, 1/1/44 | 29,802,385 | ||||||||
14,754,825 | 4.0000%, 2/1/44 | 15,749,037 | ||||||||
14,034,061 | 3.5000%, 4/1/44 | 14,527,239 | ||||||||
47,362,924 | 3.5000%, 5/1/44 | 49,116,687 | ||||||||
73,499,451 | 4.5000%, 5/1/44 | 81,028,013 | ||||||||
23,289,637 | 4.0000%, 6/1/44 | 24,855,709 | ||||||||
43,160,957 | 4.0000%, 7/1/44 | 46,261,864 | ||||||||
17,234,870 | 5.0000%, 7/1/44 | 19,460,499 | ||||||||
9,041,171 | 4.0000%, 8/1/44 | 9,690,736 | ||||||||
23,910,787 | 4.0000%, 8/1/44 | 25,628,745 | ||||||||
32,261,152 | 4.5000%, 8/1/44 | 35,613,288 | ||||||||
13,324,528 | 4.5000%, 10/1/44 | 14,667,323 | ||||||||
24,400,996 | 4.5000%, 10/1/44 | 26,985,976 | ||||||||
34,414,642 | 3.5000%, 2/1/45 | 35,516,973 | ||||||||
24,443,220 | 4.5000%, 3/1/45 | 26,906,764 | ||||||||
24,450,840 | 4.5000%, 5/1/45 | 27,062,433 | ||||||||
Freddie Mac Gold Pool: | ||||||||||
1,744,714 | 5.0000%, 1/1/19 | 1,821,693 | ||||||||
1,613,999 | 5.5000%, 8/1/19 | 1,692,697 | ||||||||
3,421,594 | 5.0000%, 6/1/20 | 3,647,461 | ||||||||
6,006,362 | 5.5000%, 12/1/28 | 6,722,777 | ||||||||
8,630,577 | 3.5000%, 7/1/29 | 9,101,583 | ||||||||
7,199,042 | 3.5000%, 8/1/29 | 7,593,148 | ||||||||
6,268,673 | 5.5000%, 10/1/36 | 7,072,248 | ||||||||
14,542,523 | 5.5000%, 4/1/40 | 16,403,520 | ||||||||
33,860,193 | 6.0000%, 4/1/40 | 38,613,087 | ||||||||
6,471,865 | 4.5000%, 1/1/41 | 7,039,716 | ||||||||
10,396,685 | 5.0000%, 5/1/41 | 11,596,413 | ||||||||
9,074,347 | 5.5000%, 5/1/41 | 10,175,932 | ||||||||
19,767,709 | 5.5000%, 8/1/41 | 22,699,920 | ||||||||
14,627,652 | 3.5000%, 2/1/44 | 15,099,020 | ||||||||
4,054,675 | 4.0000%, 8/1/44 | 4,331,252 | ||||||||
48,086,797 | 4.5000%, 9/1/44 | 52,963,750 | ||||||||
Ginnie Mae I Pool: | ||||||||||
5,061,011 | 4.0000%, 8/15/24 | 5,390,522 | ||||||||
10,162,526 | 5.1000%, 1/15/32 | 11,635,755 | ||||||||
11,726,330 | 4.9000%, 10/15/34 | 13,054,580 | ||||||||
3,139,318 | 5.5000%, 9/15/35 | 3,655,598 | ||||||||
4,900,820 | 5.5000%, 3/15/36 | 5,602,307 | ||||||||
23,932,115 | 5.5000%, 6/15/39 | 27,773,613 | ||||||||
8,731,464 | 5.5000%, 8/15/39 | 10,008,598 | ||||||||
13,208,063 | 5.5000%, 8/15/39 | 15,225,145 | ||||||||
8,013,815 | 5.0000%, 9/15/39 | 9,082,727 | ||||||||
17,153,284 | 5.0000%, 9/15/39 | 19,439,993 | ||||||||
4,918,557 | 5.0000%, 10/15/39 | 5,490,728 | ||||||||
8,775,952 | 5.0000%, 11/15/39 | 9,742,345 | ||||||||
2,747,856 | 5.0000%, 1/15/40 | 3,050,018 | ||||||||
803,149 | 5.0000%, 5/15/40 | 904,816 | ||||||||
3,092,049 | 5.0000%, 5/15/40 | 3,485,724 | ||||||||
11,748,464 | 5.0000%, 5/15/40 | 13,105,714 | ||||||||
2,542,239 | 5.0000%, 7/15/40 | 2,819,606 | ||||||||
9,099,905 | 5.0000%, 7/15/40 | 10,096,591 | ||||||||
9,018,049 | 4.5000%, 9/15/40 | 9,901,591 | ||||||||
8,904,422 | 5.0000%, 2/15/41 | 9,890,452 | ||||||||
2,950,449 | 5.0000%, 4/15/41 | 3,287,093 | ||||||||
11,381,153 | 4.5000%, 5/15/41 | 12,489,643 | ||||||||
3,460,600 | 5.0000%, 5/15/41 | 3,927,209 | ||||||||
2,641,777 | 4.5000%, 7/15/41 | 2,907,341 | ||||||||
7,809,167 | 4.5000%, 7/15/41 | 8,492,031 | ||||||||
19,580,333 | 4.5000%, 8/15/41 | 21,662,682 | ||||||||
4,816,877 | 5.0000%, 9/15/41 | 5,372,383 | ||||||||
18,135,867 | 5.0000%, 11/15/43 | 20,165,834 | ||||||||
7,983,118 | 5.0000%, 6/15/44 | 9,037,657 | ||||||||
13,166,917 | 5.0000%, 6/15/44 | 14,920,654 | ||||||||
9,499,502 | 4.0000%, 4/15/45 | 10,278,632 | ||||||||
Ginnie Mae II Pool: | ||||||||||
4,564,578 | 6.0000%, 11/20/34 | 5,294,037 | ||||||||
19,977,619 | 5.5000%, 3/20/35 | 22,793,236 | ||||||||
5,289,131 | 5.5000%, 3/20/36 | 6,024,067 | ||||||||
5,586,755 | 5.5000%, 11/20/37 | 6,256,386 | ||||||||
1,980,602 | 6.0000%, 1/20/39 | 2,243,728 | ||||||||
1,042,763 | 7.0000%, 5/20/39 | 1,236,701 | ||||||||
2,523,471 | 5.0000%, 6/20/41 | 2,781,325 | ||||||||
10,626,143 | 5.0000%, 6/20/41 | 11,721,110 | ||||||||
905,852 | 6.0000%, 10/20/41 | 1,041,800 | ||||||||
4,287,446 | 6.0000%, 12/20/41 | 4,914,259 | ||||||||
7,181,264 | 5.5000%, 1/20/42 | 8,167,960 | ||||||||
2,617,906 | 6.0000%, 1/20/42 | 3,007,011 | ||||||||
3,987,755 | 6.0000%, 2/20/42 | 4,581,245 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
12 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Mortgage-Backed Securities – (continued) | ||||||||||
Ginnie Mae II Pool: (continued) | ||||||||||
$2,623,776 | 6.0000%, 3/20/42 | $ | 3,015,024 | |||||||
10,123,837 | 6.0000%, 4/20/42 | 11,632,536 | ||||||||
5,533,680 | 3.5000%, 5/20/42 | 5,774,775 | ||||||||
7,732,608 | 5.5000%, 5/20/42 | 8,807,523 | ||||||||
7,260,106 | 6.0000%, 5/20/42 | 8,243,443 | ||||||||
12,593,341 | 5.5000%, 7/20/42 | 14,153,846 | ||||||||
2,982,845 | 6.0000%, 7/20/42 | 3,426,023 | ||||||||
2,852,108 | 6.0000%, 8/20/42 | 3,274,761 | ||||||||
3,504,620 | 6.0000%, 9/20/42 | 4,032,463 | ||||||||
2,957,815 | 6.0000%, 11/20/42 | 3,388,375 | ||||||||
3,616,650 | 6.0000%, 2/20/43 | 4,156,906 | ||||||||
Total Mortgage-Backed Securities (cost $1,849,159,283) | 1,856,649,716 | |||||||||
Preferred Stocks – 1.3% | ||||||||||
Capital Markets – 0.4% | ||||||||||
625,522 | Morgan Stanley, 6.8750% | 16,688,927 | ||||||||
721,348 | Morgan Stanley, 7.1250% | 20,161,677 | ||||||||
127,950 | Morgan Stanley Capital Trust III, 6.2500% | 3,266,564 | ||||||||
17,185 | Morgan Stanley Capital Trust IV, 6.2500% | 437,186 | ||||||||
8,266 | Morgan Stanley Capital Trust V, 5.7500% | 208,799 | ||||||||
6,855 | Morgan Stanley Capital Trust VIII, 6.4500% | 173,774 | ||||||||
137,144 | State Street Corp., 5.9000% | 3,520,486 | ||||||||
44,457,413 | ||||||||||
Commercial Banks – 0.4% | ||||||||||
440,292 | Citigroup Capital XIII, 7.8750% | 11,429,980 | ||||||||
926,576 | Wells Fargo & Co., 6.6250% | 25,573,498 | ||||||||
37,003,478 | ||||||||||
Consumer Finance – 0.4% | ||||||||||
14,657 | Ally Financial, Inc., 7.0000% (144A) | 14,810,441 | ||||||||
990,183 | Discover Financial Services, 6.5000% | 25,219,961 | ||||||||
40,030,402 | ||||||||||
Industrial Conglomerates – 0% | ||||||||||
90,702 | General Electric Capital Corp., 4.7000% | 2,204,059 | ||||||||
Pharmaceuticals – 0.1% | ||||||||||
7,397 | Allergan PLC, 5.5000% | 7,711,964 | ||||||||
Total Preferred Stocks (cost $125,904,797) | 131,407,316 | |||||||||
U.S. Treasury Notes/Bonds – 36.1% | ||||||||||
$40,247,000 | 0.3750%, 5/31/16 | 40,275,294 | ||||||||
52,265,000 | 0.5000%, 6/30/16 | 52,350,767 | ||||||||
275,193,000 | 0.6250%, 7/15/16 | 275,945,378 | ||||||||
127,735,400 | 0.5000%, 11/30/16 | 127,815,235 | ||||||||
552,384,200 | 0.6250%, 12/31/16 | 553,542,252 | ||||||||
322,406,000 | 0.5000%, 1/31/17 | 322,305,409 | ||||||||
157,715,800 | 0.8750%, 1/31/17 | 158,590,649 | ||||||||
18,376,700 | 0.8750%, 2/28/17 | 18,475,769 | ||||||||
139,134,000 | 0.5000%, 4/30/17 | 138,905,681 | ||||||||
29,305,100 | 0.7500%, 6/30/17 | 29,362,333 | ||||||||
9,157,800 | 0.8750%, 7/15/17 | 9,195,722 | ||||||||
966,300 | 1.0000%, 9/15/17 | 971,886 | ||||||||
1,653,600 | 0.8750%, 10/15/17 | 1,657,347 | ||||||||
9,795,200 | 0.7500%, 10/31/17 | 9,786,786 | ||||||||
197,835,600 | 1.0000%, 12/15/17 | 198,685,700 | ||||||||
12,037,800 | 0.7500%, 12/31/17 | 12,012,412 | ||||||||
19,179,200 | 0.8750%, 1/31/18 | 19,182,192 | ||||||||
14,416,000 | 0.7500%, 3/31/18 | 14,342,796 | ||||||||
19,312,900 | 2.3750%, 5/31/18 | 20,089,935 | ||||||||
63,341,800 | 1.3750%, 7/31/18 | 63,975,218 | ||||||||
221,582,500 | 1.5000%, 8/31/18 | 224,473,487 | ||||||||
120,427,600 | 1.6250%, 7/31/19 | 121,453,161 | ||||||||
72,941,800 | 1.7500%, 9/30/19 | 73,819,363 | ||||||||
102,955,900 | 1.5000%, 10/31/19 | 103,012,217 | ||||||||
202,577,700 | 1.5000%, 11/30/19 | 202,609,302 | ||||||||
21,927,200 | 1.6250%, 12/31/19 | 22,018,001 | ||||||||
2,400,000 | 1.3750%, 3/31/20 | 2,376,374 | ||||||||
62,157,900 | 2.1250%, 9/30/21 | 62,779,479 | ||||||||
194,422,100 | 2.2500%, 11/15/24 | 193,237,292 | ||||||||
151,623,000 | 2.1250%, 5/15/25 | 148,874,833 | ||||||||
12,069,100 | 3.7500%, 11/15/43 | 13,575,855 | ||||||||
87,707,400 | 3.6250%, 2/15/44 | 96,430,164 | ||||||||
1,376,700 | 3.3750%, 5/15/44 | 1,446,073 | ||||||||
113,217,800 | 3.1250%, 8/15/44 | 113,403,590 | ||||||||
30,816,500 | 3.0000%, 11/15/44 | 30,144,793 | ||||||||
101,995,000 | 3.0000%, 5/15/45 | 99,955,100 | ||||||||
Total U.S. Treasury Notes/Bonds (cost $3,560,312,210) | 3,577,077,845 | |||||||||
Investment Companies – 1.2% | ||||||||||
Money Markets – 1.2% | ||||||||||
117,464,144 | Janus Cash Liquidity Fund LLC, 0.1291%°°,£ (cost $117,464,144) | 117,464,144 | ||||||||
Total Investments (total cost $9,849,145,929) – 100.0% | 9,902,487,535 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0)% | (2,777,470) | |||||||||
Net Assets – 100% | $ | 9,899,710,065 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States | $ | 9,334,775,473 | 94 | .3% | ||||
United Kingdom | 165,175,865 | 1 | .7 | |||||
Germany | 76,207,125 | 0 | .8 | |||||
Netherlands | 71,513,291 | 0 | .7 | |||||
Taiwan | 59,212,707 | 0 | .6 | |||||
Spain | 53,468,636 | 0 | .5 | |||||
Singapore | 53,322,831 | 0 | .5 | |||||
Australia | 34,974,481 | 0 | .4 | |||||
Canada | 23,937,470 | 0 | .2 | |||||
Italy | 17,831,719 | 0 | .2 | |||||
South Korea | 12,067,937 | 0 | .1 | |||||
Total | $ | 9,902,487,535 | 100 | .0% | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Notes to Schedule of Investments and Other Information
Barclays U.S. Aggregate Bond Index | A broad-based measure of the investment grade, US dollar-denominated, fixed-rate taxable bond market. | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
PLC | Public Limited Company |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. These securities have been determined to be liquid under guidelines established by the Board of Trustees. The total value of 144A securities as of the year ended June 30, 2015 is indicated in the table below: |
Value as a % | ||||||||||
Fund | Value | of Net Assets | ||||||||
Janus Flexible Bond Fund | $ | 1,316,260,380 | 13.3 | % | ||||||
(a) | All or a portion of this position has not settled, or is not funded. Upon settlement or funding date, interest rates for unsettled or unfunded amounts will be determined. Interest and dividends will not be accrued until time of settlement or funding. | |
† | A portion of this security has been segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales, swap agreements, and/or securities with extended settlement dates, the value of which, as of June 30, 2015, is noted below. |
Fund | Aggregate Value | ||||
Janus Flexible Bond Fund | $ | 31,650,000 | |||
‡ | 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 year end. | |
°° | Rate shown is the 7-day yield as of June 30, 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 June 30, 2015) |
Acquisition | Acquisition | Value as a | ||||||||||||
Date | Cost | Value | % of Net Assets | |||||||||||
Janus Flexible Bond Fund | ||||||||||||||
FREMF 2010 K-SCT Mortgage Trust, 2.000%, 1/25/20 | 4/29/13 | $ | 16,447,659 | $ | 16,455,160 | 0.2 | % | |||||||
The Fund has registration rights for certain restricted securities held as of June 30, 2015. The issuer incurs all registration costs.
14 | JUNE 30, 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 year ended June 30, 2015. Unless otherwise indicated, all information in the table is for the year ended June 30, 2015. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 6/30/15 | Gain/(Loss) | Income | at 6/30/15 | |||||||||||||||
Janus Flexible Bond Fund | |||||||||||||||||||||
Janus Cash Liquidity Fund LLC | 89,490,320 | 6,833,580,539 | (6,805,606,715) | 117,464,144 | $ | – | $ | 169,885 | $ | 117,464,144 | |||||||||||
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 June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Janus Flexible Bond Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Asset-Backed/Commercial Mortgage-Backed Securities | $ | – | $ | 584,784,945 | $ | – | |||||
Bank Loans and Mezzanine Loans | – | 84,206,140 | – | ||||||||
Corporate Bonds | – | 3,550,897,429 | – | ||||||||
Mortgage-Backed Securities | – | 1,856,649,716 | – | ||||||||
Preferred Stocks | – | 131,407,316 | – | ||||||||
U.S. Treasury Notes/Bonds | – | 3,577,077,845 | – | ||||||||
Investment Companies | – | 117,464,144 | – | ||||||||
Total Assets | $ | – | $ | 9,902,487,535 | $ | – | |||||
Janus Investment Fund | 15
Table of Contents
Statement of Assets and Liabilities
Janus Flexible | ||||
As of June 30, 2015 | Bond Fund | |||
Assets: | ||||
Investments, at cost | $ | 9,849,145,929 | ||
Unaffiliated investments, at value | $ | 9,785,023,391 | ||
Affiliated investments, at value | 117,464,144 | |||
Cash | 5,914,386 | |||
Non-interested Trustees’ deferred compensation | 197,453 | |||
Receivables: | ||||
Investments sold | 93,807,648 | |||
Fund shares sold | 16,599,377 | |||
Dividends | 602,451 | |||
Dividends from affiliates | 11,443 | |||
Interest | 53,771,936 | |||
Other assets | 13,790 | |||
Total Assets | 10,073,406,019 | |||
Liabilities: | ||||
Payables: | ||||
Investments purchased | 157,205,709 | |||
Fund shares repurchased | 9,039,513 | |||
Dividends | 1,662,216 | |||
Advisory fees | 3,265,673 | |||
Fund administration fees | 76,975 | |||
Transfer agent fees and expenses | 1,316,466 | |||
12b-1 Distribution and shareholder servicing fees | 572,408 | |||
Non-interested Trustees’ fees and expenses | 58,081 | |||
Non-interested Trustees’ deferred compensation fees | 197,453 | |||
Accrued expenses and other payables | 301,460 | |||
Total Liabilities | 173,695,954 | |||
Net Assets | $ | 9,899,710,065 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
16 | JUNE 30, 2015
Table of Contents
Janus Flexible | ||||
As of June 30, 2015 | Bond Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 9,928,870,729 | ||
Undistributed net investment income/(loss) | 33,387 | |||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | (82,560,651) | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 53,366,600 | |||
Total Net Assets | $ | 9,899,710,065 | ||
Net Assets - Class A Shares | $ | 785,362,419 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 74,974,502 | |||
Net Asset Value Per Share(1) | $ | 10.48 | ||
Maximum Offering Price Per Share(2) | $ | 11.00 | ||
Net Assets - Class C Shares | $ | 349,070,044 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 33,321,538 | |||
Net Asset Value Per Share(1) | $ | 10.48 | ||
Net Assets - Class D Shares | $ | 643,371,098 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 61,420,977 | |||
Net Asset Value Per Share | $ | 10.47 | ||
Net Assets - Class I Shares | $ | 5,971,813,708 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 570,096,398 | |||
Net Asset Value Per Share | $ | 10.48 | ||
Net Assets - Class N Shares | $ | 638,029,524 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 60,931,221 | |||
Net Asset Value Per Share | $ | 10.47 | ||
Net Assets - Class R Shares | $ | 33,914,585 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 3,237,523 | |||
Net Asset Value Per Share | $ | 10.48 | ||
Net Assets - Class S Shares | $ | 68,700,988 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 6,557,592 | |||
Net Asset Value Per Share | $ | 10.48 | ||
Net Assets - Class T Shares | $ | 1,409,447,699 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 134,584,108 | |||
Net Asset Value Per Share | $ | 10.47 |
(1) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(2) | Maximum offering price is computed at 100/95.25 of net asset value. |
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Statement of Operations
Janus Flexible | ||||
For the year ended June 30, 2015 | Bond Fund | |||
Investment Income: | ||||
Interest | $ | 247,545,403 | ||
Dividends | 8,513,515 | |||
Dividends from affiliates | 169,885 | |||
Other income | 3,761,718 | |||
Total Investment Income | 259,990,521 | |||
Expenses: | ||||
Advisory fees | 34,529,026 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 1,696,345 | |||
Class C Shares | 3,320,350 | |||
Class R Shares | 143,527 | |||
Class S Shares | 232,209 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 790,127 | |||
Class R Shares | 71,763 | |||
Class S Shares | 232,209 | |||
Class T Shares | 3,250,126 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 617,410 | |||
Class C Shares | 252,971 | |||
Class I Shares | 6,375,266 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 75,698 | |||
Class C Shares | 50,919 | |||
Class D Shares | 147,381 | |||
Class I Shares | 221,325 | |||
Class N Shares | 3,870 | |||
Class R Shares | 1,613 | |||
Class S Shares | 1,787 | |||
Class T Shares | 16,707 | |||
Shareholder reports expense | 717,636 | |||
Registration fees | 290,280 | |||
Custodian fees | 45,667 | |||
Professional fees | 108,530 | |||
Non-interested Trustees’ fees and expenses | 204,594 | |||
Fund administration fees | 780,475 | |||
Other expenses | 1,068,025 | |||
Total Expenses | 55,245,836 | |||
Net Expenses | 55,245,836 | |||
Net Investment Income/(Loss) | 204,744,685 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions(1) | 9,714,681 | |||
Total Net Realized Gain/(Loss) on Investments | 9,714,681 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (127,950,645) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (127,950,645) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 86,508,721 |
(1) | Includes $1,447,117 of realized gains and losses resulting from a redemption-in-kind during the year ended June 30, 2015. |
See Notes to Financial Statements.
18 | JUNE 30, 2015
Table of Contents
Statements of Changes in Net Assets
Janus Flexible | ||||||||
Bond Fund | ||||||||
For each year ended June 30 | 2015 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 204,744,685 | $ | 150,566,870 | ||||
Net realized gain/(loss) on investments | 9,714,681 | 4,096,147 | ||||||
Change in unrealized net appreciation/depreciation | (127,950,645) | 174,621,931 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 86,508,721 | 329,284,948 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income | ||||||||
Class A Shares | (17,037,689) | (18,687,971) | ||||||
Class C Shares | (5,910,704) | (7,225,157) | ||||||
Class D Shares | (17,951,976) | (20,775,921) | ||||||
Class I Shares | (136,154,934) | (92,746,091) | ||||||
Class N Shares | (13,196,421) | (5,189,190) | ||||||
Class R Shares | (601,884) | (603,757) | ||||||
Class S Shares | (2,278,817) | (2,246,393) | ||||||
Class T Shares | (34,013,166) | (32,666,608) | ||||||
Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | – | (6,945,488) | ||||||
Class C Shares | – | (3,644,330) | ||||||
Class D Shares | – | (7,501,917) | ||||||
Class I Shares | – | (32,008,112) | ||||||
Class N Shares | – | (1,900,026) | ||||||
Class R Shares | – | (239,002) | ||||||
Class S Shares | – | (788,025) | ||||||
Class T Shares | – | (12,097,580) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (227,145,591) | (245,265,568) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 377,091,185 | 242,685,762 | ||||||
Class C Shares | 125,574,139 | 50,491,990 | ||||||
Class D Shares | 78,235,629 | 56,595,486 | ||||||
Class I Shares | 3,439,715,749 | 1,854,537,608 | ||||||
Class N Shares | 586,766,460 | 189,062,496 | ||||||
Class R Shares | 22,978,506 | 13,161,118 | ||||||
Class S Shares | 41,538,760 | 65,805,067 | ||||||
Class T Shares | 584,070,727 | 356,358,442 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 15,271,924 | 24,377,671 | ||||||
Class C Shares | 4,414,787 | 8,209,565 | ||||||
Class D Shares | 16,764,097 | 26,512,389 | ||||||
Class I Shares | 125,290,218 | 113,490,048 | ||||||
Class N Shares | 12,398,182 | 7,089,211 | ||||||
Class R Shares | 452,520 | 674,258 | ||||||
Class S Shares | 2,271,784 | 3,027,087 | ||||||
Class T Shares | 33,719,007 | 44,336,263 |
See footnotes at the end of the Statements.
See Notes to Financial Statements.
Janus Investment Fund | 19
Table of Contents
Statements of Changes in Net Assets (continued)
Janus Flexible | ||||||||
Bond Fund | ||||||||
For each year ended June 30 | 2015 | 2014 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (261,534,374) | (329,263,101) | ||||||
Class C Shares | (79,937,777) | (191,078,168) | ||||||
Class D Shares | (103,680,867) | (180,241,961) | ||||||
Class I Shares | (997,071,063) | (1,442,167,900) | ||||||
Class N Shares | (179,166,470) | (39,265,369) | ||||||
Class R Shares | (12,067,339) | (21,231,798) | ||||||
Class S Shares | (89,845,350) | (29,319,188) | ||||||
Class T Shares | (322,587,498) | (445,611,055) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | 3,420,662,936 | 378,235,921 | ||||||
Net Increase/(Decrease) in Net Assets | 3,280,026,066 | 462,255,301 | ||||||
Net Assets: | ||||||||
Beginning of period | 6,619,683,999 | 6,157,428,698 | ||||||
End of period | $ | 9,899,710,065 | $ | 6,619,683,999 | ||||
Undistributed Net Investment Income/(Loss) | $ | 33,387 | $ | 147,154 |
See Notes to Financial Statements.
20 | JUNE 30, 2015
Table of Contents
Financial Highlights
Class A Shares
Janus Flexible Bond Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $10.64 | $10.50 | $10.85 | $10.54 | $10.70 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.24(1) | 0.25(1) | 0.30 | 0.35 | 0.37 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.13) | 0.31 | (0.14) | 0.46 | 0.19 | |||||||||||||||||
Total from Investment Operations | 0.11 | 0.56 | 0.16 | 0.81 | 0.56 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.27) | (0.30) | (0.30) | (0.35) | (0.38) | |||||||||||||||||
Distributions (from capital gains) | – | (0.12) | (0.21) | (0.15) | (0.34) | |||||||||||||||||
Total Dividends and Distributions | (0.27) | (0.42) | (0.51) | (0.50) | (0.72) | |||||||||||||||||
Net Asset Value, End of Period | $10.48 | $10.64 | $10.50 | $10.85 | $10.54 | |||||||||||||||||
Total Return | 1.02% | 5.47% | 1.45% | 7.97% | 5.41% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $785,362 | $666,272 | $719,932 | $697,880 | $400,706 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $678,538 | $649,984 | $786,291 | $539,788 | $371,462 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.79% | 0.80% | 0.75% | 0.77% | 0.76% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.79% | 0.79% | 0.75% | 0.77% | 0.76% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 2.25% | 2.38% | 2.09% | 3.06% | 3.51% | |||||||||||||||||
Portfolio Turnover Rate | 124% | 118% | 118% | 126% | 147% |
Class C Shares
Janus Flexible Bond Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $10.64 | $10.50 | $10.85 | $10.54 | $10.70 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.16(1) | 0.17(1) | 0.21 | 0.27 | 0.29 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.13) | 0.31 | (0.14) | 0.46 | 0.19 | |||||||||||||||||
Total from Investment Operations | 0.03 | 0.48 | 0.07 | 0.73 | 0.48 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.19) | (0.22) | (0.21) | (0.27) | (0.30) | |||||||||||||||||
Distributions (from capital gains) | – | (0.12) | (0.21) | (0.15) | (0.34) | |||||||||||||||||
Total Dividends and Distributions | (0.19) | (0.34) | (0.42) | (0.42) | (0.64) | |||||||||||||||||
Net Asset Value, End of Period | $10.48 | $10.64 | $10.50 | $10.85 | $10.54 | |||||||||||||||||
Total Return | 0.28% | 4.68% | 0.65% | 7.14% | 4.62% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $349,070 | $304,253 | $432,713 | $425,830 | $268,575 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $332,035 | $341,462 | $470,325 | $336,150 | $264,522 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.53% | 1.58% | 1.55% | 1.55% | 1.51% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.53% | 1.56% | 1.55% | 1.55% | 1.51% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.52% | 1.60% | 1.30% | 2.29% | 2.75% | |||||||||||||||||
Portfolio Turnover Rate | 124% | 118% | 118% | 126% | 147% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Financial Statements.
Janus Investment Fund | 21
Table of Contents
Financial Highlights (continued)
Class D Shares
Janus Flexible Bond Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $10.64 | $10.50 | $10.85 | $10.54 | $10.70 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.26(1) | 0.27(1) | 0.32 | 0.37 | 0.39 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.14) | 0.31 | (0.14) | 0.46 | 0.18 | |||||||||||||||||
Total from Investment Operations | 0.12 | 0.58 | 0.18 | 0.83 | 0.57 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.29) | (0.32) | (0.32) | (0.37) | (0.39) | |||||||||||||||||
Distributions (from capital gains) | – | (0.12) | (0.21) | (0.15) | (0.34) | |||||||||||||||||
Total Dividends and Distributions | (0.29) | (0.44) | (0.53) | (0.52) | (0.73) | |||||||||||||||||
Net Asset Value, End of Period | $10.47 | $10.64 | $10.50 | $10.85 | $10.54 | |||||||||||||||||
Total Return | 1.12% | 5.67% | 1.61% | 8.17% | 5.59% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $643,371 | $662,074 | $750,690 | $802,674 | $686,500 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $658,439 | $677,831 | $825,062 | $747,701 | $691,039 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.60% | 0.61% | 0.60% | 0.59% | 0.59% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.60% | 0.61% | 0.60% | 0.59% | 0.59% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 2.46% | 2.57% | 2.25% | 3.28% | 3.68% | |||||||||||||||||
Portfolio Turnover Rate | 124% | 118% | 118% | 126% | 147% |
Class I Shares
Janus Flexible Bond Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $10.64 | $10.50 | $10.85 | $10.54 | $10.70 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.26(1) | 0.27(1) | 0.32 | 0.38 | 0.40 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.13) | 0.31 | (0.14) | 0.46 | 0.18 | |||||||||||||||||
Total from Investment Operations | 0.13 | 0.58 | 0.18 | 0.84 | 0.58 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.29) | (0.32) | (0.32) | (0.38) | (0.40) | |||||||||||||||||
Distributions (from capital gains) | – | (0.12) | (0.21) | (0.15) | (0.34) | |||||||||||||||||
Total Dividends and Distributions | (0.29) | (0.44) | (0.53) | (0.53) | (0.74) | |||||||||||||||||
Net Asset Value, End of Period | $10.48 | $10.64 | $10.50 | $10.85 | $10.54 | |||||||||||||||||
Total Return | 1.24% | 5.69% | 1.66% | 8.21% | 5.62% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $5,971,814 | $3,486,670 | $2,918,160 | $1,691,809 | $1,230,115 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $5,007,807 | $3,017,072 | $2,181,783 | $1,567,379 | $1,067,665 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.57% | 0.62% | 0.56% | 0.55% | 0.58% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.57% | 0.59% | 0.55% | 0.55% | 0.56% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 2.46% | 2.59% | 2.28% | 3.29% | 3.72% | |||||||||||||||||
Portfolio Turnover Rate | 124% | 118% | 118% | 126% | 147% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Financial Statements.
22 | JUNE 30, 2015
Table of Contents
Class N Shares
Janus Flexible Bond Fund | ||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
Net Asset Value, Beginning of Period | $10.63 | $10.50 | $10.85 | $10.82 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.27(2) | 0.29(2) | 0.39 | 0.05 | ||||||||||||||
Net realized and unrealized gain/(loss) | (0.12) | 0.30 | (0.19) | 0.01 | ||||||||||||||
Total from Investment Operations | 0.15 | 0.59 | 0.20 | 0.06 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | (0.31) | (0.34) | (0.34) | (0.03) | ||||||||||||||
Distributions (from capital gains) | – | (0.12) | (0.21) | – | ||||||||||||||
Total Dividends and Distributions | (0.31) | (0.46) | (0.55) | (0.03) | ||||||||||||||
Net Asset Value, End of Period | $10.47 | $10.63 | $10.50 | $10.85 | ||||||||||||||
Total Return* | 1.37% | 5.74% | 1.77% | 0.57% | ||||||||||||||
Net Assets, End of Period (in thousands) | $638,030 | $225,650 | $64,760 | $253,638 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $467,431 | $161,478 | $210,599 | $196,727 | ||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||
Ratio of Gross Expenses** | 0.44% | 0.45% | 0.44% | 0.46% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.44% | 0.45% | 0.44% | 0.46% | ||||||||||||||
Ratio of Net Investment Income/(Loss)** | 2.57% | 2.78% | 2.45% | 2.78% | ||||||||||||||
Portfolio Turnover Rate | 124% | 118% | 118% | 126% |
Class R Shares
Janus Flexible Bond Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $10.64 | $10.50 | $10.85 | $10.54 | $10.70 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.19(2) | 0.20(2) | 0.26 | 0.31 | 0.33 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.12) | 0.32 | (0.14) | 0.46 | 0.18 | |||||||||||||||||
Total from Investment Operations | 0.07 | 0.52 | 0.12 | 0.77 | 0.51 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.23) | (0.26) | (0.26) | (0.31) | (0.33) | |||||||||||||||||
Distributions (from capital gains) | – | (0.12) | (0.21) | (0.15) | (0.34) | |||||||||||||||||
Total Dividends and Distributions | (0.23) | (0.38) | (0.47) | (0.46) | (0.67) | |||||||||||||||||
Net Asset Value, End of Period | $10.48 | $10.64 | $10.50 | $10.85 | $10.54 | |||||||||||||||||
Total Return | 0.61% | 5.05% | 1.02% | 7.54% | 4.94% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $33,915 | $23,049 | $30,080 | $26,212 | $9,585 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $28,705 | $24,473 | $29,460 | $13,660 | $7,906 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.19% | 1.20% | 1.17% | 1.18% | 1.20% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.19% | �� | 1.20% | 1.17% | 1.18% | 1.20% | ||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.84% | 1.95% | 1.67% | 2.63% | 3.06% | |||||||||||||||||
Portfolio Turnover Rate | 124% | 118% | 118% | 126% | 147% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from May 31, 2012 (inception date) through June 30, 2012. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Financial Statements.
Janus Investment Fund | 23
Table of Contents
Financial Highlights (continued)
Class S Shares
Janus Flexible Bond Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $10.64 | $10.50 | $10.85 | $10.55 | $10.71 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.23(1) | 0.23(1) | 0.28 | 0.34 | 0.35 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.14) | 0.32 | (0.14) | 0.45 | 0.19 | |||||||||||||||||
Total from Investment Operations | 0.09 | 0.55 | 0.14 | 0.79 | 0.54 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.25) | (0.29) | (0.28) | (0.34) | (0.36) | |||||||||||||||||
Distributions (from capital gains) | – | (0.12) | (0.21) | (0.15) | (0.34) | |||||||||||||||||
Total Dividends and Distributions | (0.25) | (0.41) | (0.49) | (0.49) | (0.70) | |||||||||||||||||
Net Asset Value, End of Period | $10.48 | $10.64 | $10.50 | $10.85 | $10.55 | |||||||||||||||||
Total Return | 0.87% | 5.31% | 1.26% | 7.69% | 5.21% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $68,701 | $116,274 | $75,202 | $74,154 | $57,799 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $92,884 | $83,118 | $78,304 | $66,641 | $60,614 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.94% | 0.95% | 0.95% | 0.95% | 0.95% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.94% | 0.95% | 0.94% | 0.94% | 0.95% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 2.18% | 2.23% | 1.91% | 2.92% | 3.31% | |||||||||||||||||
Portfolio Turnover Rate | 124% | 118% | 118% | 126% | 147% |
Class T Shares
Janus Flexible Bond Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $10.63 | $10.49 | $10.85 | $10.54 | $10.70 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.25(1) | 0.26(1) | 0.31 | 0.36 | 0.38 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.13) | 0.31 | (0.15) | 0.46 | 0.18 | |||||||||||||||||
Total from Investment Operations | 0.12 | 0.57 | 0.16 | 0.82 | 0.56 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.28) | (0.31) | (0.31) | (0.36) | (0.38) | |||||||||||||||||
Distributions (from capital gains) | – | (0.12) | (0.21) | (0.15) | (0.34) | |||||||||||||||||
Total Dividends and Distributions | (0.28) | (0.43) | (0.52) | (0.51) | (0.72) | |||||||||||||||||
Net Asset Value, End of Period | $10.47 | $10.63 | $10.49 | $10.85 | $10.54 | |||||||||||||||||
Total Return | 1.12% | 5.58% | 1.42% | 8.06% | 5.47% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $1,409,448 | $1,135,441 | $1,165,892 | $1,286,847 | $794,629 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $1,300,050 | $1,096,557 | $1,333,891 | $1,033,338 | $727,010 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.69% | 0.70% | 0.70% | 0.70% | 0.70% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.69% | 0.69% | 0.69% | 0.69% | 0.70% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 2.35% | 2.49% | 2.16% | 3.14% | 3.56% | |||||||||||||||||
Portfolio Turnover Rate | 124% | 118% | 118% | 126% | 147% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Financial Statements.
24 | JUNE 30, 2015
Table of Contents
Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
Janus Flexible Bond Fund (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in income-producing securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
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
Janus Investment Fund | 25
Table of Contents
Notes to Financial Statements (continued)
more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of June 30, 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 year. 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
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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, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
Dividends are declared daily and distributed monthly for the Fund. Realized capital gains, if any, are declared and distributed in December. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
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 Fund may be invested in lower-rated debt securities that have a higher risk of default or loss of value since
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Notes to Financial Statements (continued)
these securities may be sensitive to economic changes, political changes or adverse developments specific to the issuer.
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient 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.
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 June 30, 2015.
• | Bank Loans – Bank loans are obligations of companies or other entities entered into in connection with recapitalizations, acquisitions, and refinancings. The Fund’s investments in bank loans are generally acquired as a participation interest in, or assignment of, loans originated by a lender or other financial institution. These investments may include institutionally-traded floating and fixed-rate debt securities. | |
• | Floating Rate Loans – Floating rate loans are debt securities that have floating interest rates, that adjust periodically, and are tied to a benchmark lending rate, such as the London Interbank Offered Rate (“LIBOR”). In other cases, the lending rate could be tied to the prime rate offered by one or more major U.S. banks or the rate paid on large certificates of deposit traded in the secondary markets. If the benchmark lending rate changes, the rate payable to lenders under the loan will change at the next scheduled adjustment date specified in the loan agreement. Floating rate loans are typically issued to companies (“borrowers”) in connection with recapitalizations, acquisitions, and refinancings. Floating rate loan investments are generally below investment grade. Senior floating rate loans are secured by specific collateral of a borrower and are senior in the borrower’s capital |
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structure. The senior position in the borrower’s capital structure generally gives holders of senior loans a claim on certain of the borrower’s assets that is senior to subordinated debt and preferred and common stock in the case of a borrower’s default. Floating rate loan investments may involve foreign borrowers, and investments may be denominated in foreign currencies. Floating rate loans often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The Fund may invest in obligations of borrowers who are in bankruptcy proceedings. While the Fund generally expects to invest in fully funded term loans, certain of the loans in which the Fund may invest include revolving loans, bridge loans, and delayed draw term loans. |
Purchasers of floating rate loans may pay and/or receive certain fees. The Fund may receive fees such as covenant waiver fees or prepayment penalty fees. The Fund may pay fees such as facility fees. Such fees may affect the Fund’s return. |
• | Mezzanine Loans – Mezzanine loans are secured by the stock of the company that owns the assets. Mezzanine loans are a hybrid of debt and equity financing that is typically used to fund the expansion of existing companies. A mezzanine loan is composed of debt capital that gives the lender the right to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. Mezzanine loans typically are the most subordinated debt obligation in an issuer’s capital structure. |
Mortgage- and Asset-Backed Securities
Mortgage- and asset-backed securities represent interests in “pools” of commercial or residential mortgages or other assets, including consumer loans or receivables. The Fund may purchase fixed or variable rate commercial or residential 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 Mae and Freddie Mac securities 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 guarantors or insurers will meet their obligations.
Mortgage- and asset-backed securities are also subject to extension risk, which is the risk that rising interest rates could cause mortgages or other obligations underlying these securities to be paid more slowly than expected, increasing the Fund’s sensitivity to interest rate changes and causing its price to decline.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of
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Notes to Financial Statements (continued)
REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Restricted Security Transactions
Restricted securities held by the Fund may not be sold except in exempt transactions or in a public offering registered under the Securities Act of 1933, as amended. The risk of investing in such securities is generally greater than the risk of investing in the securities of widely held, publicly traded companies. Lack of a secondary market and resale restrictions may result in the inability of the Fund to sell a security at a fair price and may substantially delay the sale of the security. In addition, these securities may exhibit greater price volatility than securities for which secondary markets exist.
Sovereign Debt
The Fund may invest in U.S. and foreign government debt securities (“sovereign debt”). Investments in U.S. sovereign debt are considered low risk. However, investments in non-U.S. sovereign debt can involve a high degree of risk, including the risk that the governmental entity that controls the repayment of sovereign debt may not be willing or able to repay the principal and/or to pay the interest on its sovereign debt in a timely manner. A sovereign debtor’s willingness or ability to satisfy its debt obligation may be affected by various factors, including its cash flow situation, the extent of its foreign currency reserves, the availability of foreign exchange when a payment is due, the relative size of its debt position in relation to its economy as a whole, the sovereign debtor’s policy toward international lenders, and local political constraints to which the governmental entity may be subject. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies, and other entities. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance, or repay principal or interest when due may result in the cancellation of third party commitments to lend funds to the sovereign debtor, which may further impair such debtor’s ability or willingness to timely service its debts. The Fund may be requested to participate in the rescheduling of such sovereign debt and to extend further loans to governmental entities, which may adversely affect the Fund’s holdings. In the event of default, there may be limited or no legal remedies for collecting sovereign debt and there may be no bankruptcy proceedings through which the Fund may collect all or part of the sovereign debt that a governmental entity has not repaid.
When-Issued and Delayed Delivery Securities
The Fund may purchase or sell securities on a when-issued or delayed delivery basis. When-issued and delayed delivery securities in which the Fund may invest include U.S. Treasury Securities, municipal bonds, bank loans, and other similar instruments. The price of the underlying securities and date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Losses may arise due to changes in the market value of the securities or from the inability of counterparties to meet the terms of the contract. In connection with such purchases, the Fund may hold liquid assets as collateral with the Fund’s custodian sufficient to cover the purchase price.
3. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Contractual | ||||||||||
Average | Investment | |||||||||
Daily Net Assets | Advisory | |||||||||
Fund | of the Fund | Fee (%) | ||||||||
Janus Flexible Bond Fund | First $ | 300 Million | 0.50 | |||||||
Over $ | 300 Million | 0.40 | ||||||||
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, Class R Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
Janus Flexible Bond Fund | 0.51 | |||||
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,
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but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class R Shares, Class S Shares, and Class T Shares for providing or procuring administrative services to investors in Class R Shares, Class S Shares, and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class R Shares, Class S Shares, and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class R Shares, Class S Shares, and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, of up to 0.50% of the Class R Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
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
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Notes to Financial Statements (continued)
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 $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the year ended June 30, 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 June 30, 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 year ended June 30, 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 $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 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 product compliant with Rule 2a-7 under the 1940 Act. There are no restrictions on the Fund’s ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Fund to Janus Cash Liquidity Fund LLC. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the year ended June 30, 2015 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 4.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the year ended June 30, 2015, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Janus Flexible Bond Fund | $ | 53,909 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the year ended June 30, 2015, redeeming shareholders of Class A Shares paid the following CDSCs to Janus Distributors:
Fund (Class A Shares) | CDSC | |||||
Janus Flexible Bond Fund | $ | 5,076 | ||||
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
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year ended June 30, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Janus Flexible Bond Fund | $ | 26,447 | ||||
4. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation, derivatives, and foreign currency contract adjustments. 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.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
Janus Flexible Bond Fund | $ | 230,839 | $ | – | $ | (76,513,852) | $ | – | $ | – | $ | (172,458) | $ | 47,294,807 | |||||||||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of June 30, 2015, that may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. The following table shows these capital loss carryovers.
Capital Loss Carryover Expiration Schedule
For the year ended June 30, 2015
Accumulated | |||||||||||||||
No Expiration | Capital | ||||||||||||||
Fund | Short-Term | Long-Term | Losses | ||||||||||||
Janus Flexible Bond Fund | $ | (76,513,852) | $ | – | $ | (76,513,852) | |||||||||
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 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.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
Janus Flexible Bond Fund | $ | 9,855,192,728 | $ | 111,181,744 | $ | (63,886,937) | ||||||||
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. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the fiscal year ended June 30, 2015
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Flexible Bond Fund | $ | 227,145,591 | $ | – | $ | – | $ | – | ||||||||||||||
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Notes to Financial Statements (continued)
For the fiscal year ended June 30, 2014
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Flexible Bond Fund | $ | 180,143,105 | $ | 65,122,463 | $ | – | $ | – | ||||||||||||||
Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
Janus Flexible Bond Fund | $ | 1,402,711 | $ | 22,287,139 | $ | (23,689,850) | ||||||||
5. | Capital Share Transactions |
Janus Flexible Bond Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 35,563,453 | 23,078,594 | ||||||||
Reinvested dividends and distributions | 1,440,030 | 2,327,063 | ||||||||
Shares repurchased | (24,667,674) | (31,350,775) | ||||||||
Net Increase/(Decrease) in Fund Shares | 12,335,809 | (5,945,118) | ||||||||
Shares Outstanding, Beginning of Period | 62,638,693 | 68,583,811 | ||||||||
Shares Outstanding, End of Period | 74,974,502 | 62,638,693 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 11,841,617 | 4,803,012 | ||||||||
Reinvested dividends and distributions | 416,282 | 784,533 | ||||||||
Shares repurchased | (7,538,417) | (18,205,625) | ||||||||
Net Increase/(Decrease) in Fund Shares | 4,719,482 | (12,618,080) | ||||||||
Shares Outstanding, Beginning of Period | 28,602,056 | 41,220,136 | ||||||||
Shares Outstanding, End of Period | 33,321,538 | 28,602,056 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 7,377,173 | 5,385,467 | ||||||||
Reinvested dividends and distributions | 1,580,720 | 2,530,832 | ||||||||
Shares repurchased | (9,782,719) | (17,185,766) | ||||||||
Net Increase/(Decrease) in Fund Shares | (824,826) | (9,269,467) | ||||||||
Shares Outstanding, Beginning of Period | 62,245,803 | 71,515,270 | ||||||||
Shares Outstanding, End of Period | 61,420,977 | 62,245,803 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 324,484,860 | 176,359,574 | ||||||||
Reinvested dividends and distributions | 11,812,407 | 10,828,299 | ||||||||
Shares repurchased | (94,012,829) | (137,388,121) | ||||||||
Net Increase/(Decrease) in Fund Shares | 242,284,438 | 49,799,752 | ||||||||
Shares Outstanding, Beginning of Period | 327,811,960 | 278,012,208 | ||||||||
Shares Outstanding, End of Period | 570,096,398 | 327,811,960 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 55,424,854 | 18,117,292 | ||||||||
Reinvested dividends and distributions | 1,169,637 | 676,180 | ||||||||
Shares repurchased | (16,882,670) | (3,743,660) | ||||||||
Net Increase/(Decrease) in Fund Shares | 39,711,821 | 15,049,812 | ||||||||
Shares Outstanding, Beginning of Period | 21,219,400 | 6,169,588 | ||||||||
Shares Outstanding, End of Period | 60,931,221 | 21,219,400 |
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Janus Flexible Bond Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class R Shares: | ||||||||||
Shares sold | 2,166,567 | 1,253,275 | ||||||||
Reinvested dividends and distributions | 42,666 | 64,386 | ||||||||
Shares repurchased | (1,138,625) | (2,016,550) | ||||||||
Net Increase/(Decrease) in Fund Shares | 1,070,608 | (698,889) | ||||||||
Shares Outstanding, Beginning of Period | 2,166,915 | 2,865,804 | ||||||||
Shares Outstanding, End of Period | 3,237,523 | 2,166,915 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 3,914,349 | 6,265,720 | ||||||||
Reinvested dividends and distributions | 214,293 | 288,636 | ||||||||
Shares repurchased | (8,499,747) | (2,788,773) | ||||||||
Net Increase/(Decrease) in Fund Shares | (4,371,105) | 3,765,583 | ||||||||
Shares Outstanding, Beginning of Period | 10,928,697 | 7,163,114 | ||||||||
Shares Outstanding, End of Period | 6,557,592 | 10,928,697 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 55,086,507 | 33,924,267 | ||||||||
Reinvested dividends and distributions | 3,180,031 | 4,232,641 | ||||||||
Shares repurchased | (30,454,452) | (42,477,906) | ||||||||
Net Increase/(Decrease) in Fund Shares | 27,812,086 | (4,320,998) | ||||||||
Shares Outstanding, Beginning of Period | 106,772,022 | 111,093,020 | ||||||||
Shares Outstanding, End of Period | 134,584,108 | 106,772,022 |
6. | Purchases and Sales of Investment Securities |
For the year ended June 30, 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 Flexible Bond Fund | $ | 5,172,226,560 | $ | 3,752,915,454 | $ | 8,647,594,200 | $ | 6,618,724,628 | ||||||
7. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of Janus Flexible Bond Fund:
of Janus Flexible Bond Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Janus Flexible Bond Fund (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
36 | JUNE 30, 2015
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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 |
40 | JUNE 30, 2015
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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 June 30, 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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Designation Requirements (unaudited)
For federal income tax purposes, the Fund designated the following for the year ended June 30, 2015:
Dividends Received Deduction Percentage
Fund | ||||||||||
Janus Flexible Bond Fund | 7 | % | ||||||||
Qualified Dividend Income Percentage
Fund | ||||||||||
Janus Flexible Bond Fund | 6 | % | ||||||||
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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
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Trustees and Officers (unaudited) (continued)
OFFICERS
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
Gibson Smith 151 Detroit Street Denver, CO 80206 DOB: 1968 | Executive Vice President and Co-Portfolio Manager Janus Flexible Bond Fund | 5/07-Present | Chief Investment Officer Fixed Income and Executive Vice President of Janus Capital; Director of Perkins Investment Management LLC; and Portfolio Manager for other Janus accounts. Formerly, Executive Vice President of Janus Distributors LLC and Janus Services LLC (2007-2013). | |||
Darrell Watters 151 Detroit Street Denver, CO 80206 DOB: 1963 | Executive Vice President and Co-Portfolio Manager Janus Flexible Bond Fund | 5/07-Present | Vice President of Janus Capital and Portfolio Manager for other Janus accounts. | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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OFFICERS (continued)
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
Janus Investment Fund | 57
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-0815-94130 | 125-02-93019 08-15 |
Table of Contents
annual report
June 30, 2015
Janus Global Bond Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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Janus Global Bond Fund
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Janus Global Bond Fund (unaudited)
FUND SNAPSHOT We believe a fundamentally driven corporate and sovereign investment process can generate risk-adjusted outperformance and capital preservation over time. Our comprehensive, bottom-up view complements traditional top-down decision making, seeking to provide a sustainable competitive advantage. | Chris Diaz co-portfolio manager | Gibson Smith co-portfolio manager | Darrell Watters co-portfolio manager |
PERFORMANCE OVERVIEW
During the one-year period ended June 30, 2015, Janus Global Bond Fund’s Class I Shares returned -4.81% compared with -7.09% for the Fund’s primary benchmark, the Barclays Global Aggregate Bond Index, and -4.73% for the Fund’s secondary benchmark, the Barclays Global Aggregate Corporate Bond Index.
MARKET ENVIRONMENT
The year was a tale of monetary policy divergence, with both Europe and Japan adopting a more accommodative stance at the same time markets were preparing for the U.S. to raise interest rates. These developments came to dominate global bond and currency markets. Yet the trends that were prevalent through the winter underwent a marked reversal during the period’s final three months. Some of the most dynamic moves were associated with Europe. Starting last summer, as eurozone inflation sank well below 1% and economic growth stalled, yields on Germany’s 10-year bund began a precipitous slide from 1.29%. By August, the yield on the 2-year note dipped into negative territory, never to recover, and the euro fell from 1.36 in U.S. dollar terms to 1.05. In the wake of the European Central Bank’s (ECB) winter announcement of its own quantitative-easing (QE) program, yields on the 10-year bund nearly dipped to 0%. German sovereign debt then sold off aggressively during the spring, with the 10-year yield rising to as high as 0.98%. Fueling the sell-off were concerns that the winter’s bond rally within the eurozone may have gotten ahead of itself, and also – in light of improving growth and inflation data – that it may not be necessary for the ECB to complete the previously announced asset purchases in their entirety. Following the bund’s lead, yield curves steepened across the eurozone, with peripheral nations experiencing the strongest moves. By June, growing concern over Greece’s ability to meet its debt obligations also weighed on peripheral sovereign debt, while at the same time reeling yields back in on safe-haven bunds.
The U.S. Treasury yield curve flattened during the period, although much of the gains of longer-dated securities were given up over the final few months. Long-dated Treasury yields fell through the end of 2014 as investors clamored for dollar-denominated assets. Solid U.S. economic growth suggested to investors that the Federal Reserve (Fed) would initiate rate hikes in 2015. A spring rebound in economic data, along with signs of incipient growth in Europe, caused Treasurys to sell off and the curve to steepen. Still, global interest rate differentials and developments in China and Greece likely capped yields on the longer end of the curve.
PERFORMANCE DISCUSSION
The Fund outperformed its primary benchmark for the period. Contributing most to relative performance was our positioning in the euro and Japanese yen, where we were significantly underweight the benchmark. On an asset class basis, our yield curve positioning in sovereign debt was a primary contributor to results. Exposure to peripheral eurozone countries that have taken substantive steps to address fiscal imbalances and improve competitiveness aided relative results. Both Portugal and Ireland fall into this category. Our exposure to Italian sovereign debt, however, bucked this trend and was a key relative detractor for the period. Outside of Europe, our yield curve positioning in New Zealand’s government debt contributed to results.
Our exposure to investment-grade corporate credits contributed to performance as well. Security selection, along with spread carry – a measure of excess income generated by holding specific securities – were factors in outperformance. Credit sectors that helped spur outperformance included wireline communications, pharmaceuticals and banks.
Our out-of-benchmark high-yield credit exposure, on the other hand, weighed down relative performance. Penalties incurred for exposure to high-yield, along with our yield curve positioning, overpowered strong security selection and spread carry generated within the segment. High-yield
Janus Investment Fund | 1
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Janus Global Bond Fund (unaudited)
credit suffered acutely due to the year’s massive decline in global energy prices and the sector’s significant presence in this segment of the corporate credit market.
Also detracting from relative performance was our yield curve positioning in commercial mortgage-backed securities (CMBS) and our out-of-benchmark allocation to non-agency mortgage-backed securities (MBS).
Please see the Derivative Instruments section in the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
OUTLOOK
Even with the reversal of the bund rally this past spring, we believe that the foundations underlying the winter’s original move are still largely valid and will be with us for quite some time. The ECB’s QE program may not play out exactly the way that unconventional monetary policy did in the U.S., when a wide range of risk assets steadily rose in unison, but it is our view that the environment will remain favorable for European assets. Growth is slowly returning to the region and we expect inflation to remain considerably below the ECB’s target. With this economic backdrop and the ECB’s presence in the market, we do not expect the yield on the bund to plumb the depths of 0.07% again, but we do expect lower rates to persist.
The recent flare-up with Greece is evidence that much of the region is still not out of the woods and that growth-friendly structural reforms must become mainstays of economic policy if the region wants to avoid similar crises in the future.
As we look forward, we will continue to monitor a variety of factors that we consider to be substantial risks to the fixed income space. Chief among them is a lack of market liquidity. In fact, it is our view that the recent sell-off in the bund was exacerbated by a dearth of buyers within the market.
While we maintain limited exposure to emerging markets, adverse developments in those regions could send shock waves through global bond markets. China is attempting to manage an unexpectedly strong slowdown as well as distortions within its equity and real estate markets. The country remains the marginal buyer of a range of commodities, so any sustained change in its growth trajectory will reverberate across the world, especially with natural resources exporters. Both Brazil and Russia face domestic economic headwinds, and the latter is further hobbled by sanctions.
We have no exposure to Japanese government debt, but the country merits monitoring given its stature in the global economy. A healthy Japan would benefit much of Asia – and farther afield. But such a scenario may entail the government of Prime Minister Shinzo Abe effectively deploying the so-called “third arrow” of Abenomics, which is structural reform. We expect growth to continue within the UK, and that country’s central bank to be among the first movers in raising interest rates. That development would provide support to both UK government bonds and the pound.
Given the potential risks that we have identified, we have moved to a more defensive position. The Fund’s duration at the beginning of the period was slightly above that of the benchmark. Over the most recent quarter we substantially lowered duration, especially when compared to the benchmark. Further buttressing our defensive positioning has been our increased allocation to U.S. Treasurys. While we see numerous opportunities in global fixed income markets caused by diverging monetary policy, we first and foremost remain mindful of our primary responsibilities of capital preservation and generating risk-adjusted returns.
Thank you for your investment in Janus Global Bond Fund.
2 | JUNE 30, 2015
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(unaudited)
Janus Global Bond Fund At A Glance
Fund Profile
June 30, 2015
Weighted Average Maturity | 10.5 Years | |
Average Effective Duration* | 5.5 Years | |
30-day Current Yield** | ||
Class A Shares at NAV | ||
Without Reimbursement | 0.57% | |
With Reimbursement | 0.66% | |
Class A Shares at MOP | ||
Without Reimbursement | 0.54% | |
With Reimbursement | 0.63% | |
Class C Shares*** | ||
Without Reimbursement | -0.16% | |
With Reimbursement | -0.07% | |
Class D Shares | ||
Without Reimbursement | 0.66% | |
With Reimbursement | 0.85% | |
Class I Shares | ||
Without Reimbursement | 0.71% | |
With Reimbursement | 0.81% | |
Class N Shares | ||
Without Reimbursement | 0.93% | |
With Reimbursement | 1.03% | |
Class S Shares | ||
Without Reimbursement | 0.42% | |
With Reimbursement | 0.51% | |
Class T Shares | ||
Without Reimbursement | 0.68% | |
With Reimbursement | 0.78% | |
Number of Bonds/Notes | 182 |
* | A theoretical measure of price volatility | |
** | Yield will fluctuate | |
*** | Does not include the 1.00% contingent deferred sales charge. |
Ratings† Summary – (% of Total Investments)
June 30, 2015
AAA | 0.5% | |
AA | 25.6% | |
A | 14.9% | |
BBB | 29.6% | |
BB | 7.4% | |
B | 3.3% | |
CCC | 0.5% | |
Not Rated | 16.5% | |
Other | 1.7% |
† | Credit ratings provided by Standard & Poor’s (S&P), an independent credit rating agency. Credit ratings range from AAA (highest) to D (lowest) based on S&P’s measures. Further information on S&P’s rating methodology may be found at www.standardandpoors.com. Other rating agencies may rate the same securities differently. Ratings are relative and subjective and are not absolute standards of quality. Credit quality does not remove market risk and is subject to change. “Not Rated” securities are not rated by S&P, but may be rated by other rating agencies and do not necessarily indicate low quality. “Other” includes cash equivalents, equity securities, and certain derivative instruments. |
Significant Areas of Investment – (% of Net Assets)
As of June 30, 2015
Asset Allocation – (% of Net Assets)
As of June 30, 2015
Janus Investment Fund | 3
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Janus Global Bond Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended June 30, 2015 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||
One | Since | Total Annual Fund | Net Annual Fund | ||||||
Year | Inception* | Operating Expenses | Operating Expenses | ||||||
Janus Global Bond Fund – Class A Shares | |||||||||
NAV | –5.03% | 3.12% | 1.02% | 0.96% | |||||
MOP | –9.55% | 2.01% | |||||||
Janus Global Bond Fund – Class C Shares | |||||||||
NAV | –5.75% | 2.36% | 1.80% | 1.74% | |||||
CDSC | –6.65% | 2.36% | |||||||
Janus Global Bond Fund – Class D Shares(1) | –4.88% | 3.24% | 0.92% | 0.84% | |||||
Janus Global Bond Fund – Class I Shares | –4.81% | 3.35% | 0.75% | 0.66% | |||||
Janus Global Bond Fund – Class N Shares | –4.73% | 3.20% | 0.71% | 0.66% | |||||
Janus Global Bond Fund – Class S Shares | –5.18% | 3.02% | 1.25% | 1.17% | |||||
Janus Global Bond Fund – Class T Shares | –4.96% | 3.16% | 0.99% | 0.92% | |||||
Barclays Global Aggregate Bond Index | –7.09% | 1.35% | |||||||
Barclays Global Aggregate Corporate Bond Index | –4.73% | 3.90% | |||||||
Morningstar Quartile – Class I Shares | 2nd | 2nd | |||||||
Morningstar Ranking – based on total returns for World Bond Funds | 168/385 | 85/289 | |||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
Maximum Offering Price (MOP) returns include the maximum sales charge of 4.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
See important disclosures on the next page.
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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, lower liquidity and differing financial and information reporting standards, all of which are magnified in emerging markets.
Fixed income securities are subject to interest rate, inflation, credit and default risk. The bond market is volatile. As interest rates rise, bond prices usually fall, and vice versa. The return of principal is not guaranteed, and prices may decline if an issuer fails to make timely payments or its credit strength weakens.
High-yield/high-risk bonds, also known as “junk” bonds, involve a greater risk of default and price volatility than U.S. Government and other high quality bonds. High-yield/high-risk bonds can experience sudden and sharp price swings which will affect net asset value.
Sovereign debt securities are subject to the additional risk that, under some political, diplomatic, social or economic circumstances, some developing countries that issue lower quality debt securities may be unable or unwilling to make principal or interest payments as they come due.
The Fund will normally invest at least 80% of its net assets, measured at the time of purchase, in the type of securities described by its name.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Class N Shares commenced operations on October 28, 2013. Performance shown for periods prior to October 28, 2013, reflects the performance of the Fund’s Class I Shares, calculated using the fees and expenses of Class N Shares, without the effect of any fee and expense limitations or waivers.
If Class N Shares of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of Class N Shares reflects the fees and expenses of Class N Shares, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectus for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return and yield, and therefore the ranking for the period.
© 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 certain new investors. |
Janus Investment Fund | 5
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Janus Global Bond Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 968.00 | $ | 4.88 | $ | 1,000.00 | $ | 1,019.84 | $ | 5.01 | 1.00% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 964.30 | $ | 8.57 | $ | 1,000.00 | $ | 1,016.07 | $ | 8.80 | 1.76% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 968.80 | $ | 4.00 | $ | 1,000.00 | $ | 1,020.73 | $ | 4.11 | 0.82% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 968.10 | $ | 3.71 | $ | 1,000.00 | $ | 1,021.03 | $ | 3.81 | 0.76% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 969.50 | $ | 3.22 | $ | 1,000.00 | $ | 1,021.52 | $ | 3.31 | 0.66% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 967.30 | $ | 5.56 | $ | 1,000.00 | $ | 1,019.14 | $ | 5.71 | 1.14% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 968.40 | $ | 4.44 | $ | 1,000.00 | $ | 1,020.28 | $ | 4.56 | 0.91% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 181/365 (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 | JUNE 30, 2015
Table of Contents
Janus Global Bond Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Asset-Backed/Commercial Mortgage-Backed Securities – 14.4% | ||||||||||
$ | 665,000 | AmeriCredit Automobile Receivables Trust 2012-4 2.6800%, 10/9/18 | $ | 677,348 | ||||||
221,000 | AmeriCredit Automobile Receivables Trust 2013-4 3.3100%, 10/8/19 | 226,774 | ||||||||
391,000 | AmeriCredit Automobile Receivables Trust 2015-2 3.0000%, 6/8/21 | 391,655 | ||||||||
440,000 | Aventura Mall Trust 2013-AVM 3.8674%, 12/5/32 (144A),‡ | 430,003 | ||||||||
494,000 | BAMLL Commercial Mortgage Securities Trust 2015-200P 3.7157%, 4/14/33 (144A),‡ | 435,755 | ||||||||
98,300 | Banc of America Commercial Mortgage Trust 2007-5 5.7720%, 2/10/51‡ | 103,388 | ||||||||
350,000 | Boca Hotel Portfolio Trust 2013-BOCA 3.2355%, 8/15/26 (144A),‡ | 349,793 | ||||||||
GBP | 916,356 | Broadgate Financing PLC 1.5240%, 1/5/22‡ | 1,413,761 | |||||||
158,000 | COMM 2007-C9 Mortgage Trust 5.6500%, 12/10/49‡ | 165,078 | ||||||||
591,465 | Commercial Mortgage Trust 2007-GG11 5.8670%, 12/10/49‡ | 634,435 | ||||||||
526,000 | Core Industrial Trust 2015-TEXW 3.9770%, 2/10/34 (144A),‡ | 493,766 | ||||||||
2,212,000 | CSMC Trust 2014-SURF 2.4355%, 2/15/29 (144A),‡ | 2,207,171 | ||||||||
417,953 | DB Master Finance LLC 2015-1 3.2620%, 2/20/45 (144A) | 419,536 | ||||||||
GBP | 779,318 | DECO 12-UK 4 PLC 0.8406%, 1/27/20‡ | 1,139,826 | |||||||
GBP | 1,080,000 | DECO 2012-MHILL, Ltd. 2.8428%, 7/28/21‡ | 1,697,908 | |||||||
GBP | 1,950,000 | DECO 2012-MHILL, Ltd. 2.8428%, 7/28/21‡ | 3,059,430 | |||||||
GBP | 1,042,080 | Eddystone Finance PLC 1.0938%, 4/19/21‡ | 1,596,991 | |||||||
646,000 | Freddie Mac Structured Agency Credit Risk Debt Notes 2.3870%, 3/25/25‡ | 641,363 | ||||||||
788,213 | FREMF 2010 K-SCT Mortgage Trust 2.0000%, 1/25/20§ | 702,774 | ||||||||
EUR | 782,246 | German Residential Funding 2013-2, Ltd. 1.1380%, 8/27/24‡ | 887,668 | |||||||
EUR | 769,115 | German Residential Funding 2013-2, Ltd. 3.4880%, 8/27/24‡ | 893,343 | |||||||
EUR | 918,022 | German Residential Funding 2013-2, Ltd. 2.9880%, 11/27/24‡ | 1,054,021 | |||||||
680,000 | GS Mortgage Securities Corp. II 3.5495%, 12/10/27 (144A),‡ | 644,398 | ||||||||
221,000 | Hilton USA Trust 2013-HLT 4.4065%, 11/5/30 (144A) | 222,918 | ||||||||
200,000 | Hilton USA Trust 2013-HLT 5.6086%, 11/5/30 (144A),‡ | 202,704 | ||||||||
163,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2014-FBLU 3.6815%, 12/15/28 (144A),‡ | 162,922 | ||||||||
303,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2015-COSMO 1.9855%, 1/15/32 (144A),‡ | 302,033 | ||||||||
305,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2015-COSMO 4.1355%, 1/15/32 (144A),‡ | 305,819 | ||||||||
519,000 | LB-UBS Commercial Mortgage Trust 2007-C2 5.4930%, 2/15/40‡ | 544,380 | ||||||||
GBP | 1,530,283 | London & Regional Debt Securitisation No 2 PLC 5.8721%, 10/15/15‡ | 2,435,317 | |||||||
EUR | 3,487,782 | Magellan Mortgages No 3 PLC 0.2510%, 5/15/58‡ | 3,313,548 | |||||||
GBP | 2,812,000 | Nemus II Arden PLC 0.7969%, 2/15/20‡ | 4,333,697 | |||||||
GBP | 1,579,000 | Residential Mortgage Securities 28 PLC 2.2213%, 6/15/46‡ | 2,443,848 | |||||||
EUR | 685,984 | Rivoli Pan Europe PLC 0.1730%, 8/3/18‡ | 753,199 | |||||||
276,000 | Santander Drive Auto Receivables Trust 2.5200%, 9/17/18 | 277,405 | ||||||||
293,000 | Santander Drive Auto Receivables Trust 2012-5 3.3000%, 9/17/18 | 299,289 | ||||||||
433,000 | Santander Drive Auto Receivables Trust 2015-1 3.2400%, 4/15/21 | 435,434 | ||||||||
NOK | 16,100,000 | Scandinavian Consumer Loans No. 4, Ltd. 4.1100%, 1/15/37‡ | 2,080,811 | |||||||
3,330,900 | Starwood Retail Property Trust 2014-STAR 3.2500%, 11/15/27 (144A),‡ | 3,329,301 | ||||||||
439,000 | Starwood Retail Property Trust 2014-STAR 4.1500%, 11/15/27 (144A),‡ | 438,772 | ||||||||
EUR | 328,333 | Taurus 2013 GMF1 PLC 1.0380%, 5/21/24‡ | 370,020 | |||||||
EUR | 613,210 | Taurus 2013 GMF1 PLC 1.9880%, 5/21/24‡ | 696,193 | |||||||
GBP | 1,006,000 | Ulysses European Loan Conduit No 27 PLC 0.8006%, 7/25/17‡ | 1,522,734 | |||||||
1,349,000 | Wendy’s Funding LLC 2015-1 3.3710%, 6/15/45 (144A) | 1,346,972 | ||||||||
Total Asset-Backed/Commercial Mortgage-Backed Securities (cost $48,073,043) | 46,083,501 | |||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
Janus Global Bond Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Bank Loans and Mezzanine Loans – 2.8% | ||||||||||
Consumer Cyclical – 0.3% | ||||||||||
$ | 765,083 | Hanesbrands, Inc. 3.2500%, 4/29/22‡ | $ | 768,917 | ||||||
266,000 | Staples, Inc. 0%, 4/7/21‡,(a) | 265,391 | ||||||||
1,034,308 | ||||||||||
Consumer Non-Cyclical – 0.2% | ||||||||||
606,325 | IMS Health, Inc. 3.5000%, 3/17/21‡ | 602,526 | ||||||||
Industrial – 0.8% | ||||||||||
2,455,267 | American Builders & Contractors Supply Co., Inc. 3.5000%, 4/16/20‡ | 2,442,345 | ||||||||
Technology – 1.5% | ||||||||||
4,746,786 | Avago Technologies Cayman, Ltd. 3.7500%, 5/6/21‡ | 4,751,010 | ||||||||
Total Bank Loans and Mezzanine Loans (cost $8,853,462) | 8,830,189 | |||||||||
Corporate Bonds – 35.1% | �� | |||||||||
Banking – 6.8% | ||||||||||
600,000 | Ally Financial, Inc. 4.6250%, 5/19/22 | 592,500 | ||||||||
780,000 | Bank of America Corp. 8.0000%µ | 822,900 | ||||||||
EUR | 656,000 | Bank of Ireland 3.2500%, 1/15/19 | 770,210 | |||||||
EUR | 1,499,000 | Bank of Ireland 4.2500%, 6/11/24 | 1,671,087 | |||||||
EUR | 1,500,000 | Bankia SA 4.0000%, 5/22/24‡ | 1,623,615 | |||||||
3,550,000 | Intesa Sanpaolo SpA 5.0170%, 6/26/24 (144A) | 3,448,348 | ||||||||
AUD | 3,744,000 | Morgan Stanley 5.0000%, 9/30/21 | 3,002,571 | |||||||
831,000 | Morgan Stanley 4.1000%, 5/22/23 | 832,553 | ||||||||
EUR | 1,421,000 | Royal Bank of Scotland Group PLC 1.6250%, 6/25/19 | 1,588,856 | |||||||
2,896,000 | Royal Bank of Scotland Group PLC 6.0000%, 12/19/23 | 3,066,667 | ||||||||
1,774,000 | Svenska Handelsbanken AB 5.2500%µ | 1,717,055 | ||||||||
EUR | 1,310,000 | UBS AG 4.7500%, 2/12/26‡ | 1,547,987 | |||||||
1,185,000 | Zions Bancorporation 5.8000%µ | 1,127,231 | ||||||||
21,811,580 | ||||||||||
Basic Industry – 1.9% | ||||||||||
EUR | 2,850,000 | Albemarle Corp. 1.8750%, 12/8/21 | 3,132,369 | |||||||
430,000 | Albemarle Corp. 4.1500%, 12/1/24 | 428,612 | ||||||||
433,000 | Albemarle Corp. 5.4500%, 12/1/44 | 433,389 | ||||||||
658,000 | Ashland, Inc. 6.8750%, 5/15/43 | 667,870 | ||||||||
1,283,000 | Rockwood Specialties Group, Inc. 4.6250%, 10/15/20 | 1,335,924 | ||||||||
5,998,164 | ||||||||||
Brokerage – 2.2% | ||||||||||
350,000 | E*TRADE Financial Corp. 5.3750%, 11/15/22 | 358,750 | ||||||||
1,193,000 | E*TRADE Financial Corp. 4.6250%, 9/15/23 | 1,172,122 | ||||||||
815,000 | Lazard Group LLC 4.2500%, 11/14/20 | 856,940 | ||||||||
533,000 | Neuberger Berman Group LLC / Neuberger Berman Finance Corp. 5.8750%, 3/15/22 (144A) | 569,644 | ||||||||
898,000 | Neuberger Berman Group LLC / Neuberger Berman Finance Corp. 4.8750%, 4/15/45 (144A) | 814,233 | ||||||||
1,789,000 | Raymond James Financial, Inc. 5.6250%, 4/1/24 | 1,990,087 | ||||||||
754,000 | TD Ameritrade Holding Corp. 2.9500%, 4/1/22 | 747,596 | ||||||||
627,000 | TD Ameritrade Holding Corp. 3.6250%, 4/1/25 | 636,748 | ||||||||
7,146,120 | ||||||||||
Capital Goods – 2.8% | ||||||||||
675,000 | CNH Industrial Capital LLC 3.6250%, 4/15/18 | 675,000 | ||||||||
794,000 | Exelis, Inc. 5.5500%, 10/1/21 | 873,648 | ||||||||
294,000 | Harris Corp. 3.8320%, 4/27/25 | 285,789 | ||||||||
445,000 | Harris Corp. 5.0540%, 4/27/45 | 423,959 | ||||||||
CAD | 2,753,000 | Holcim Finance Canada, Inc. 3.6500%, 4/10/18 | 2,310,113 | |||||||
689,000 | Martin Marietta Materials, Inc. 1.3818%, 6/30/17‡ | 686,114 | ||||||||
EUR | 1,661,000 | Mohawk Industries, Inc. 2.0000%, 1/14/22 | 1,856,306 | |||||||
399,000 | Vulcan Materials Co. 7.0000%, 6/15/18 | 450,870 | ||||||||
33,000 | Vulcan Materials Co. 7.5000%, 6/15/21 | 37,950 | ||||||||
1,365,000 | Vulcan Materials Co. 4.5000%, 4/1/25 | 1,361,587 | ||||||||
8,961,336 | ||||||||||
Communications – 1.7% | ||||||||||
EUR | 377,000 | Discovery Communications LLC 2.3750%, 3/7/22 | 433,526 | |||||||
EUR | 613,000 | Discovery Communications LLC 1.9000%, 3/19/27 | 620,058 | |||||||
CAD | 1,240,000 | Rogers Communications, Inc. 5.3800%, 11/4/19 | 1,128,660 | |||||||
3,131,000 | Sirius XM Radio, Inc. 5.2500%, 8/15/22 (144A) | 3,271,895 | ||||||||
5,454,139 | ||||||||||
Consumer Cyclical – 3.8% | ||||||||||
858,000 | 1011778 BC ULC / New Red Finance, Inc. 4.6250%, 1/15/22 (144A) | 845,130 | ||||||||
526,000 | DR Horton, Inc. 3.7500%, 3/1/19 | 529,945 | ||||||||
EUR | 1,674,000 | Expedia, Inc. 2.5000%, 6/3/22 | 1,839,250 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Consumer Cyclical – (continued) | ||||||||||
EUR | 1,110,000 | FCE Bank PLC 1.8750%, 4/18/19 | $ | 1,266,335 | ||||||
EUR | 1,042,000 | FCE Bank PLC 1.8750%, 6/24/21 | 1,176,058 | |||||||
$ | 683,000 | General Motors Co. 4.8750%, 10/2/23 | 720,069 | |||||||
EUR | 714,000 | Schaeffler Finance BV 3.2500%, 5/15/19 | 799,877 | |||||||
EUR | 698,000 | Schaeffler Finance BV 3.5000%, 5/15/22 | 780,008 | |||||||
EUR | 1,594,000 | Volkswagen International Finance NV 3.5000%µ | 1,626,943 | |||||||
EUR | 1,458,000 | Volkswagen International Finance NV 3.7500%µ | 1,678,057 | |||||||
EUR | 385,000 | Volkswagen International Finance NV 4.6250%µ | 445,254 | |||||||
337,000 | ZF North America Capital, Inc. 4.7500%, 4/29/25 (144A) | 326,260 | ||||||||
12,033,186 | ||||||||||
Consumer Non-Cyclical – 4.2% | ||||||||||
1,142,000 | Actavis Funding SCS 3.0000%, 3/12/20 | 1,144,590 | ||||||||
1,323,000 | Actavis Funding SCS 3.8000%, 3/15/25 | 1,299,612 | ||||||||
628,000 | Actavis Funding SCS 4.5500%, 3/15/35 | 597,085 | ||||||||
471,000 | Actavis Funding SCS 4.7500%, 3/15/45 | 448,418 | ||||||||
EUR | 1,631,000 | Bayer AG 2.3750%, 4/2/75‡ | 1,723,809 | |||||||
EUR | 592,000 | FMC Finance VIII SA 5.2500%, 7/31/19 | 743,712 | |||||||
839,000 | Fresenius Medical Care US Finance II, Inc. 5.8750%, 1/31/22 (144A) | 889,340 | ||||||||
478,000 | HJ Heinz Co. 2.8000%, 7/2/20 (144A) | 478,372 | ||||||||
410,000 | HJ Heinz Co. 3.5000%, 7/15/22 (144A) | 410,962 | ||||||||
900,000 | Laboratory Corp. of America Holdings 3.2000%, 2/1/22 | 887,305 | ||||||||
EUR | 870,000 | Valeant Pharmaceuticals International, Inc. 4.5000%, 5/15/23 | 939,146 | |||||||
472,000 | Valeant Pharmaceuticals International, Inc. 5.8750%, 5/15/23 (144A) | 483,800 | ||||||||
471,000 | Valeant Pharmaceuticals International, Inc. 6.1250%, 4/15/25 (144A) | 484,541 | ||||||||
848,000 | Zimmer Biomet Holdings, Inc. 2.7000%, 4/1/20 | 843,805 | ||||||||
1,002,000 | Zimmer Biomet Holdings, Inc. 3.1500%, 4/1/22 | 985,623 | ||||||||
1,155,000 | Zimmer Biomet Holdings, Inc. 3.5500%, 4/1/25 | 1,115,946 | ||||||||
13,476,066 | ||||||||||
Energy – 3.0% | ||||||||||
508,000 | Chesapeake Energy Corp. 5.3750%, 6/15/21 | 459,740 | ||||||||
210,000 | Chesapeake Energy Corp. 4.8750%, 4/15/22 | 182,175 | ||||||||
275,000 | Cimarex Energy Co. 5.8750%, 5/1/22 | 294,250 | ||||||||
832,000 | Cimarex Energy Co. 4.3750%, 6/1/24 | 821,750 | ||||||||
256,000 | DCP Midstream Operating LP 5.6000%, 4/1/44† | 228,325 | ||||||||
327,000 | EnLink Midstream Partners LP 5.6000%, 4/1/44 | 317,721 | ||||||||
2,022,000 | Helmerich & Payne International Drilling Co. 4.6500%, 3/15/25 (144A) | 2,087,286 | ||||||||
EUR | 3,150,000 | Total SA 2.2500%µ | 3,396,284 | |||||||
EUR | 1,606,000 | Total SA 2.6250%µ | 1,663,523 | |||||||
9,451,054 | ||||||||||
Finance Companies – 0.8% | ||||||||||
EUR | 290,000 | Baggot Securities, Ltd. 10.2400% (144A),µ | 333,414 | |||||||
256,000 | GE Capital Trust I 6.3750%, 11/15/67‡ | 273,408 | ||||||||
367,000 | General Electric Capital Corp. 6.3750%, 11/15/67‡ | 394,525 | ||||||||
900,000 | General Electric Capital Corp. 6.2500%µ | 984,375 | ||||||||
500,000 | General Electric Capital Corp. 7.1250%µ | 576,875 | ||||||||
2,562,597 | ||||||||||
Financial – 1.0% | ||||||||||
GBP | 2,050,000 | Kennedy Wilson Europe Real Estate PLC 3.9500%, 6/30/22 | 3,172,392 | |||||||
Government Sponsored – 0.5% | ||||||||||
EUR | 1,500,000 | Permanent TSB PLC 2.3750%, 5/22/18 | 1,652,135 | |||||||
Insurance – 0.6% | ||||||||||
196,000 | CNO Financial Group, Inc. 4.5000%, 5/30/20 | 198,940 | ||||||||
557,000 | CNO Financial Group, Inc. 5.2500%, 5/30/25 | 566,023 | ||||||||
919,000 | Primerica, Inc. 4.7500%, 7/15/22 | 980,464 | ||||||||
1,745,427 | ||||||||||
Real Estate Investment Trusts (REITs) – 0.7% | ||||||||||
EUR | 1,860,000 | Prologis International Funding II SA 2.7500%, 10/23/18 | 2,183,670 | |||||||
Technology – 5.1% | ||||||||||
3,042,000 | Cadence Design Systems, Inc. 4.3750%, 10/15/24 | 3,051,753 | ||||||||
350,000 | Molex Electronic Technologies LLC 2.8780%, 4/15/20 (144A) | 344,628 | ||||||||
1,402,000 | Molex Electronic Technologies LLC 3.9000%, 4/15/25 (144A) | 1,358,471 | ||||||||
279,000 | Seagate HDD Cayman 4.7500%, 6/1/23 | 283,371 | ||||||||
1,443,000 | Seagate HDD Cayman 4.7500%, 1/1/25 (144A) | 1,434,128 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus Global Bond Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Technology – (continued) | ||||||||||
$ | 717,000 | Seagate HDD Cayman 4.8750%, 6/1/27 (144A) | $ | 696,971 | ||||||
772,000 | Seagate HDD Cayman 5.7500%, 12/1/34 (144A) | 760,127 | ||||||||
2,266,000 | Trimble Navigation, Ltd. 4.7500%, 12/1/24 | 2,269,059 | ||||||||
2,355,000 | TSMC Global, Ltd. 1.6250%, 4/3/18 (144A) | 2,328,057 | ||||||||
522,000 | Verisk Analytics, Inc. 4.8750%, 1/15/19 | 558,018 | ||||||||
746,000 | Verisk Analytics, Inc. 5.8000%, 5/1/21 | 839,321 | ||||||||
1,466,000 | Verisk Analytics, Inc. 4.0000%, 6/15/25 | 1,435,660 | ||||||||
792,000 | Verisk Analytics, Inc. 5.5000%, 6/15/45 | 778,930 | ||||||||
16,138,494 | ||||||||||
Total Corporate Bonds (cost $116,903,105) | 111,786,360 | |||||||||
Foreign Government Bonds – 27.4% | ||||||||||
EUR | 2,559,000 | Bundesrepublik Deutschland 1.0000%, 8/15/24 | 2,922,720 | |||||||
EUR | 3,635,000 | Bundesrepublik Deutschland 0.5000%, 2/15/25 | 3,950,079 | |||||||
EUR | 4,105,000 | Ireland Government Bond 3.9000%, 3/20/23 | 5,451,766 | |||||||
EUR | 697,000 | Ireland Government Bond 3.4000%, 3/18/24 | 896,520 | |||||||
EUR | 2,867,000 | Ireland Government Bond 2.4000%, 5/15/30 | 3,307,331 | |||||||
EUR | 1,587,000 | Ireland Government Bond 2.0000%, 2/18/45 | 1,545,201 | |||||||
EUR | 1,856,000 | Italy Buoni Poliennali Del Tesoro 4.5000%, 5/1/23 | 2,443,788 | |||||||
EUR | 1,217,000 | Italy Buoni Poliennali Del Tesoro 4.5000%, 3/1/24 | 1,600,048 | |||||||
EUR | 1,288,000 | Italy Buoni Poliennali Del Tesoro 4.7500%, 9/1/44 (144A) | 1,807,585 | |||||||
MXN | 54,210,000 | Mexican Bonos 4.7500%, 6/14/18 | 3,461,383 | |||||||
MXN | 42,335,000 | Mexican Bonos 7.7500%, 11/13/42 | 3,000,671 | |||||||
NZD | 6,617,000 | New Zealand Government Bond 5.0000%, 3/15/19 | 4,803,745 | |||||||
NZD | 2,512,000 | New Zealand Government Bond 3.0000%, 4/15/20 | 1,695,571 | |||||||
NZD | 14,965,000 | New Zealand Government Bond 5.5000%, 4/15/23 | 11,649,542 | |||||||
NZD | 4,371,000 | New Zealand Government Bond 4.5000%, 4/15/27 | 3,202,476 | |||||||
EUR | 1,291,000 | Spain Government Bond 4.8500%, 10/31/20 (144A) | 1,696,044 | |||||||
EUR | 1,200,000 | Spain Government Bond 5.5000%, 4/30/21 (144A) | 1,634,333 | |||||||
EUR | 3,494,000 | Spain Government Bond 4.4000%, 10/31/23 (144A) | 4,576,435 | |||||||
EUR | 515,000 | Spain Government Bond 5.1500%, 10/31/44 (144A) | 766,633 | |||||||
SEK | 23,685,000 | Sweden Government Bond 1.5000%, 11/13/23 | 3,003,789 | |||||||
SEK | 67,975,000 | Sweden Government Bond 2.5000%, 5/12/25 | 9,362,774 | |||||||
GBP | 3,473,000 | United Kingdom Gilt 1.7500%, 7/22/19 | 5,550,831 | |||||||
GBP | 3,142,961 | United Kingdom Gilt 2.2500%, 9/7/23 | 5,053,109 | |||||||
GBP | 2,290,000 | United Kingdom Gilt 3.2500%, 1/22/44 | 3,968,081 | |||||||
Total Foreign Government Bonds (cost $95,052,233) | 87,350,455 | |||||||||
Preferred Stocks – 0.7% | ||||||||||
Capital Markets – 0.3% | ||||||||||
25,875 | Morgan Stanley, 6.8750% | 690,345 | ||||||||
4,775 | Morgan Stanley Capital Trust III, 6.2500% | 121,906 | ||||||||
623 | Morgan Stanley Capital Trust IV, 6.2500% | 15,849 | ||||||||
312 | Morgan Stanley Capital Trust V, 5.7500% | 7,881 | ||||||||
250 | Morgan Stanley Capital Trust VIII, 6.4500% | 6,337 | ||||||||
842,318 | ||||||||||
Commercial Banks – 0.3% | ||||||||||
37,525 | Wells Fargo & Co., 6.6250% | 1,035,690 | ||||||||
Industrial Conglomerates – 0% | ||||||||||
3,318 | General Electric Capital Corp., 4.7000% | 80,627 | ||||||||
Pharmaceuticals – 0.1% | ||||||||||
294 | Allergan PLC, 5.5000% | 306,519 | ||||||||
Total Preferred Stocks (cost $2,115,941) | 2,265,154 | |||||||||
U.S. Treasury Notes/Bonds – 17.6% | ||||||||||
$ | 4,258,000 | 2.0000%, 4/30/16 | 4,317,876 | |||||||
20,961,000 | 0.3750%, 5/31/16† | 20,975,736 | ||||||||
8,341,000 | 0.5000%, 6/30/16 | 8,354,688 | ||||||||
9,318,000 | 0.6250%, 7/15/16 | 9,343,475 | ||||||||
3,848,000 | 2.1250%, 5/15/25 | 3,778,255 | ||||||||
745,000 | 3.5000%, 2/15/39 | 803,087 | ||||||||
3,075,000 | 2.5000%, 2/15/45 | 2,706,246 | ||||||||
5,888,000 | 3.0000%, 5/15/45 | 5,770,240 | ||||||||
Total U.S. Treasury Notes/Bonds (cost $56,208,020) | 56,049,603 | |||||||||
Total Investments (total cost $327,205,804) – 98.0% | 312,365,262 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 2.0% | 6,347,787 | |||||||||
Net Assets – 100% | $ | 318,713,049 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States | $ | 148,619,689 | 47 | .6% | ||||
United Kingdom | 39,027,323 | 12 | .5 | |||||
Ireland | 27,286,781 | 8 | .7 | |||||
New Zealand | 21,351,334 | 6 | .8 | |||||
Sweden | 16,164,429 | 5 | .2 | |||||
Germany | 15,886,059 | 5 | .1 | |||||
Spain | 10,297,060 | 3 | .3 | |||||
Italy | 9,299,769 | 3 | .0 | |||||
Mexico | 6,462,054 | 2 | .1 | |||||
France | 5,059,807 | 1 | .6 | |||||
Singapore | 4,751,010 | 1 | .5 | |||||
Switzerland | 3,858,100 | 1 | .2 | |||||
Taiwan | 2,328,057 | 0 | .8 | |||||
Canada | 1,973,790 | 0 | .6 | |||||
Total | $ | 312,365,262 | 100 | .0% | ||||
Schedule of Forward Currency Contracts, Open
Currency Units | Unrealized | |||||||||||
Sold/ | Currency | Appreciation/ | ||||||||||
Counterparty/Currency and Settlement Date | (Purchased) | Value | (Depreciation) | |||||||||
JPMorgan Chase & Co.: | ||||||||||||
Australian Dollar 7/29/15 | (4,657,000) | $ | (3,586,127) | $ | 8,964 | |||||||
British Pound 7/29/15 | (1,023,000) | (1,606,785) | (1,089) | |||||||||
British Pound 7/29/15 | (2,180,000) | (3,424,039) | 3,504 | |||||||||
Canadian Dollar 7/29/15 | (3,864,000) | (3,092,960) | (21,911) | |||||||||
Euro 7/29/15 | 45,636,000 | 50,890,276 | 155,370 | |||||||||
Indian Rupee 7/29/15 | (849,423,000) | (13,262,168) | (39,163) | |||||||||
Japanese Yen 7/29/15 | (2,803,864,000) | (22,921,672) | 360,264 | |||||||||
Mexican Peso 7/29/15 | (49,685,000) | (3,154,911) | (51,286) | |||||||||
New Zealand Dollar 7/29/15 | 31,695,000 | 21,411,496 | 256,633 | |||||||||
Norwegian Krone 7/29/15 | 16,400,000 | 2,091,263 | (6,025) | |||||||||
Philippine Peso 7/29/15 | (307,438,000) | (6,808,472) | (1,540) | |||||||||
Swedish Krona 7/29/15 | 102,366,000 | 12,362,529 | 55,417 | |||||||||
Total | $ | 28,898,430 | $ | 719,138 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Notes to Schedule of Investments and Other Information
Barclays Global Aggregate Bond Index | A broad-based measure of the global investment grade fixed-rate debt markets. | |
Barclays Global Aggregate Corporate Bond Index | Measures global investment grade, fixed-rate corporate bonds. | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
PLC | Public Limited Company |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. These securities have been determined to be liquid under guidelines established by the Board of Trustees. The total value of 144A securities as of the year ended June 30, 2015 is indicated in the table below: |
Value as a % | ||||||||||
Fund | Value | of Net Assets | ||||||||
Janus Global Bond Fund | $ | 43,138,500 | 13.5 | % | ||||||
(a) | All or a portion of this position has not settled. Upon settlement date, interest rates for unsettled amounts will be determined. Interest and dividends will not be accrued until time of settlement. | |
† | 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 June 30, 2015, is noted below. |
Fund | Aggregate Value | ||||
Janus Global Bond Fund | $ | 5,181,894 | |||
‡ | 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 year end. | |
µ | This variable rate security is a perpetual bond. Perpetual bonds have no contractual maturity date, are not redeemable, and pay an indefinite stream of interest. The coupon rate shown represents the current interest rate. | |
§ | Schedule of Restricted and Illiquid Securities (as of June 30, 2015) |
Acquisition | Value as a | |||||||||||||
Date | Cost | Value | % of Net Assets | |||||||||||
Janus Global Bond Fund | ||||||||||||||
FREMF 2010 K-SCT Mortgage Trust, 2.0000%, 1/25/20 | 4/29/2013 | $ | 702,454 | $ | 702,774 | 0.2 | % | |||||||
The Fund has registration rights for certain restricted securities held as of June 30, 2015. The issuer incurs all registration costs.
12 | JUNE 30, 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 year ended June 30, 2015. Unless otherwise indicated, all information in the table is for the year ended June 30, 2015. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 6/30/15 | Gain/(Loss) | Income | at 6/30/15 | |||||||||||||||
Janus Global Bond Fund | |||||||||||||||||||||
Janus Cash Liquidity Fund LLC | 4,995,762 | 347,255,918 | (352,251,680) | – | $ | – | $ | 7,448 | $ | – | |||||||||||
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 June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Janus Global Bond Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Asset-Backed/Commercial Mortgage-Backed Securities | $ | – | $ | 46,083,501 | $ | – | |||||
Bank Loans and Mezzanine Loans | – | 8,830,189 | – | ||||||||
Corporate Bonds | – | 111,786,360 | – | ||||||||
Foreign Government Bonds | – | 87,350,455 | – | ||||||||
Preferred Stocks | – | 2,265,154 | – | ||||||||
U.S. Treasury Notes/Bonds | – | 56,049,603 | – | ||||||||
Total Investments in Securities | $ | – | $ | 312,365,262 | $ | – | |||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 840,152 | $ | – | |||||
Total Assets | $ | – | $ | 313,205,414 | $ | – | |||||
Liabilities | |||||||||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 121,014 | $ | – | |||||
(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 | 13
Table of Contents
Statement of Assets and Liabilities
As of June 30, 2015 | Janus Global Bond Fund | |||
Assets: | ||||
Investments, at cost | $ | 327,205,804 | ||
Investments, at value | $ | 312,365,262 | ||
Cash denominated in foreign currency(1) | 9,187,816 | |||
Forward currency contracts | 840,152 | |||
Closed foreign currency contracts | 8,182 | |||
Non-interested Trustees’ deferred compensation | 6,351 | |||
Receivables: | ||||
Investments sold | 15,481,736 | |||
Fund shares sold | 1,030,416 | |||
Dividends | 11,575 | |||
Dividends from affiliates | 27 | |||
Interest | 2,036,771 | |||
Other assets | 9,036 | |||
Total Assets | 340,977,324 | |||
Liabilities: | ||||
Due to custodian | 16,686,881 | |||
Forward currency contracts | 121,014 | |||
Closed foreign currency contracts | 65,297 | |||
Payables: | ||||
Investments purchased | 4,511,423 | |||
Fund shares repurchased | 601,825 | |||
Dividends | 18,725 | |||
Advisory fees | 136,253 | |||
Fund administration fees | 2,569 | |||
Transfer agent fees and expenses | 17,288 | |||
12b-1 Distribution and shareholder servicing fees | 11,834 | |||
Non-interested Trustees’ fees and expenses | 2,242 | |||
Non-interested Trustees’ deferred compensation fees | 6,351 | |||
Accrued expenses and other payables | 82,573 | |||
Total Liabilities | 22,264,275 | |||
Net Assets | $ | 318,713,049 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
14 | JUNE 30, 2015
Table of Contents
As of June 30, 2015 | Janus Global Bond Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 343,848,522 | ||
Undistributed net investment income/(loss) | (3,879,591) | |||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | (7,126,832) | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (14,129,050) | |||
Total Net Assets | $ | 318,713,049 | ||
Net Assets - Class A Shares | $ | 27,198,237 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,835,460 | |||
Net Asset Value Per Share(2) | $ | 9.59 | ||
Maximum Offering Price Per Share(3) | $ | 10.07 | ||
Net Assets - Class C Shares | $ | 7,338,622 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 764,384 | |||
Net Asset Value Per Share(2) | $ | 9.60 | ||
Net Assets - Class D Shares | $ | 10,131,689 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,056,717 | |||
Net Asset Value Per Share | $ | 9.59 | ||
Net Assets - Class I Shares | $ | 33,551,077 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 3,500,893 | |||
Net Asset Value Per Share | $ | 9.58 | ||
Net Assets - Class N Shares | $ | 222,451,505 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 23,223,140 | |||
Net Asset Value Per Share | $ | 9.58 | ||
Net Assets - Class S Shares | $ | 162,028 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 16,881 | |||
Net Asset Value Per Share | $ | 9.60 | ||
Net Assets - Class T Shares | $ | 17,879,891 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,863,927 | |||
Net Asset Value Per Share | $ | 9.59 |
(1) | Includes cost of $9,831,385. | |
(2) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(3) | Maximum offering price is computed at 100/95.25 of net asset value. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statement of Operations
For the year ended June 30, 2015 | Janus Global Bond Fund | |||
Investment Income: | ||||
Interest | $ | 8,476,415 | ||
Dividends | 123,001 | |||
Dividends from affiliates | 7,448 | |||
Other income | 182,277 | |||
Total Investment Income | 8,789,141 | |||
Expenses: | ||||
Advisory fees | 2,027,947 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 60,200 | |||
Class C Shares | 57,540 | |||
Class S Shares | 480 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 14,799 | |||
Class S Shares | 480 | |||
Class T Shares | 44,158 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 17,237 | |||
Class C Shares | 4,799 | |||
Class I Shares | 27,341 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 2,661 | |||
Class C Shares | 832 | |||
Class D Shares | 5,228 | |||
Class I Shares | 1,453 | |||
Class N Shares | 406 | |||
Class T Shares | 305 | |||
Shareholder reports expense | 23,970 | |||
Registration fees | 95,591 | |||
Custodian fees | 27,203 | |||
Professional fees | 86,819 | |||
Non-interested Trustees’ fees and expenses | 8,180 | |||
Fund administration fees | 30,679 | |||
Other expenses | 83,182 | |||
Total Expenses | 2,621,490 | |||
Less: Excess Expense Reimbursement | (115,152) | |||
Net Expenses | 2,506,338 | |||
Net Investment Income/(Loss) | 6,282,803 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 4,987,920 | |||
Total Net Realized Gain/(Loss) on Investments | 4,987,920 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (27,969,184) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (27,969,184) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (16,698,461) |
See Notes to Financial Statements.
16 | JUNE 30, 2015
Table of Contents
Statements of Changes in Net Assets
Janus Global | ||||||||
Bond Fund | ||||||||
For each year or period ended June 30 | 2015 | 2014(1) | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 6,282,803 | $ | 7,310,416 | ||||
Net realized gain/(loss) on investments | 4,987,920 | 3,059,076 | ||||||
Change in unrealized net appreciation/depreciation | (27,969,184) | 17,455,656 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (16,698,461) | 27,825,148 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income | ||||||||
Class A Shares | (1,366,636) | (109,129) | ||||||
Class C Shares | (254,486) | (19,784) | ||||||
Class D Shares | (619,693) | (269,437) | ||||||
Class I Shares | (1,980,986) | (2,196,835) | ||||||
Class N Shares | (12,749,278) | (5,568,649) | ||||||
Class S Shares | (8,108) | (16,069) | ||||||
Class T Shares | (875,025) | (219,944) | ||||||
Return of Capital | ||||||||
Class A Shares | (10,504) | – | ||||||
Class C Shares | (1,956) | – | ||||||
Class D Shares | (4,763) | – | ||||||
Class I Shares | (15,225) | – | ||||||
Class N Shares | (97,989) | – | ||||||
Class S Shares | (62) | – | ||||||
Class T Shares | (6,725) | – | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (17,991,436) | (8,399,847) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 36,153,414 | 4,639,840 | ||||||
Class C Shares | 7,752,657 | 914,509 | ||||||
Class D Shares | 6,570,831 | 7,934,979 | ||||||
Class I Shares | 88,715,311 | 7,884,807 | ||||||
Class N Shares | 20,617,326 | 244,694,972 | ||||||
Class S Shares | 11,846 | 4,080 | ||||||
Class T Shares | 18,133,919 | 11,655,097 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 1,271,564 | 79,014 | ||||||
Class C Shares | 218,173 | 18,304 | ||||||
Class D Shares | 604,425 | 256,549 | ||||||
Class I Shares | 1,730,208 | 1,669,053 | ||||||
Class N Shares | 12,847,170 | 5,568,649 | ||||||
Class S Shares | 8,167 | 16,069 | ||||||
Class T Shares | 879,609 | 217,123 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (13,788,826) | (3,433,603) | ||||||
Class C Shares | (1,320,128) | (1,334,184) | ||||||
Class D Shares | (8,922,223) | (5,639,748) | ||||||
Class I Shares | (56,167,564) | (247,099,912) | ||||||
Class N Shares | (35,764,008) | (12,283,121) | ||||||
Class S Shares | (257,587) | (549,450) | ||||||
Class T Shares | (11,149,604) | (7,563,732) |
See footnotes at the end of the Statements.
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Statements of Changes in Net Assets (continued)
Janus Global | ||||||||
Bond Fund | ||||||||
For each year or period ended June 30 | 2015 | 2014(1) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | 68,144,680 | 7,649,295 | ||||||
Net Increase/(Decrease) in Net Assets | 33,454,783 | 27,074,596 | ||||||
Net Assets: | ||||||||
Beginning of period | 285,258,266 | 258,183,670 | ||||||
End of period | $ | 318,713,049 | $ | 285,258,266 | ||||
Undistributed Net Investment Income/(Loss) | $ | (3,879,591) | $ | 293,103 |
(1) | Period from October 28, 2013 (inception date) through June 30, 2014 for Class N Shares. |
See Notes to Financial Statements.
18 | JUNE 30, 2015
Table of Contents
Financial Highlights
Class A Shares
Janus Global Bond Fund | ||||||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $10.61 | $9.85 | $10.48 | $10.35 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.16(2) | 0.26(2) | 0.27 | 0.23 | 0.19 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.68) | 0.80 | (0.35) | 0.27 | 0.31 | |||||||||||||||||
Total from Investment Operations | (0.52) | 1.06 | (0.08) | 0.50 | 0.50 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.50) | (0.30) | (0.12) | (0.29) | (0.15) | |||||||||||||||||
Distributions (from capital gains) | – | – | (0.25) | (0.08) | – | |||||||||||||||||
Return of capital | –(3) | – | (0.18) | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.50) | (0.30) | (0.55) | (0.37) | (0.15) | |||||||||||||||||
Net Asset Value, End of Period | $9.59 | $10.61 | $9.85 | $10.48 | $10.35 | |||||||||||||||||
Total Return* | (5.03)% | 10.96% | (1.04)% | 4.89% | 4.99% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $27,198 | $6,247 | $4,649 | $5,113 | $1,190 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $24,080 | $3,737 | $5,017 | $3,309 | $958 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses** | 1.04% | 1.02% | 1.28% | 1.46% | 3.50% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.00% | 1.02% | 1.01% | 1.02% | 0.79% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)** | 1.57% | 2.53% | 2.32% | 2.48% | 3.03% | |||||||||||||||||
Portfolio Turnover Rate | 191% | 171% | 182% | 222% | 173% |
Class C Shares
Janus Global Bond Fund | ||||||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $10.62 | $9.86 | $10.49 | $10.36 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.08(2) | 0.16(2) | 0.19 | 0.18 | 0.16 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.68) | 0.82 | (0.35) | 0.24 | 0.31 | |||||||||||||||||
Total from Investment Operations | (0.60) | 0.98 | (0.16) | 0.42 | 0.47 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.42) | (0.22) | (0.08) | (0.21) | (0.11) | |||||||||||||||||
Distributions (from capital gains) | – | – | (0.25) | (0.08) | – | |||||||||||||||||
Return of capital | –(3) | – | (0.14) | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.42) | (0.22) | (0.47) | (0.29) | (0.11) | |||||||||||||||||
Net Asset Value, End of Period | $9.60 | $10.62 | $9.86 | $10.49 | $10.36 | |||||||||||||||||
Total Return* | (5.75)% | 10.09% | (1.78)% | 4.10% | 4.70% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $7,339 | $1,325 | $1,654 | $1,884 | $1,293 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $5,754 | $963 | $2,016 | $1,634 | $908 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses** | 1.81% | 1.80% | 2.05% | 2.21% | 4.22% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.77% | 1.79% | 1.76% | 1.76% | 1.36%(4) | |||||||||||||||||
Ratio of Net Investment Income/(Loss)** | 0.81% | 1.54% | 1.58% | 1.77% | 2.45% | |||||||||||||||||
Portfolio Turnover Rate | 191% | 171% | 182% | 222% | 173% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from December 28, 2010 (inception date) through June 30, 2011. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year. | |
(3) | Less than $0.005 on a per share basis. | |
(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) would be 1.77% without the waiver of these fees and expenses. |
See Notes to Financial Statements.
Janus Investment Fund | 19
Table of Contents
Financial Highlights (continued)
Class D Shares
Janus Global Bond Fund | ||||||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $10.61 | $9.85 | $10.47 | $10.35 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.18(2) | 0.27(2) | 0.28 | 0.26 | 0.18 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.68) | 0.80 | (0.34) | 0.24 | 0.32 | |||||||||||||||||
Total from Investment Operations | (0.50) | 1.07 | (0.06) | 0.50 | 0.50 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.52) | (0.31) | (0.12) | (0.30) | (0.15) | |||||||||||||||||
Distributions (from capital gains) | – | – | (0.25) | (0.08) | – | |||||||||||||||||
Return of capital | –(3) | – | (0.19) | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.52) | (0.31) | (0.56) | (0.38) | (0.15) | |||||||||||||||||
Net Asset Value, End of Period | $9.59 | $10.61 | $9.85 | $10.47 | $10.35 | |||||||||||||||||
Total Return* | (4.88)% | 11.07% | (0.84)% | 4.90% | 5.06% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $10,132 | $13,098 | $9,875 | $10,240 | $4,876 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $12,333 | $8,833 | $11,610 | $10,566 | $2,296 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses** | 0.89% | 0.92% | 1.16% | 1.31% | 2.92% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.84% | 0.92% | 0.90% | 0.91% | 0.72% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)** | 1.77% | 2.63% | 2.43% | 2.64% | 3.08% | |||||||||||||||||
Portfolio Turnover Rate | 191% | 171% | 182% | 222% | 173% |
Class I Shares
Janus Global Bond Fund | ||||||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $10.60 | $9.84 | $10.47 | $10.34 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.17(2) | 0.21(2) | 0.31 | 0.29 | 0.19 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.66) | 0.88 | (0.37) | 0.24 | 0.31 | |||||||||||||||||
Total from Investment Operations | (0.49) | 1.09 | (0.06) | 0.53 | 0.50 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.53) | (0.33) | (0.12) | (0.32) | (0.16) | |||||||||||||||||
Distributions (from capital gains) | – | – | (0.25) | (0.08) | – | |||||||||||||||||
Return of capital | –(3) | – | (0.20) | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.53) | (0.33) | (0.57) | (0.40) | (0.16) | |||||||||||||||||
Net Asset Value, End of Period | $9.58 | $10.60 | $9.84 | $10.47 | $10.34 | |||||||||||||||||
Total Return* | (4.81)% | 11.24% | (0.79)% | 5.15% | 5.02% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $33,551 | $2,990 | $234,166 | $14,810 | $10,464 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $32,970 | $77,450 | $74,492 | $12,500 | $7,863 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses** | 0.80% | 0.75% | 0.75% | 1.13% | 3.13% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.76% | 0.75% | 0.75% | 0.76% | 0.77% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)** | 1.73% | 2.13% | 2.27% | 2.77% | 3.06% | |||||||||||||||||
Portfolio Turnover Rate | 191% | 171% | 182% | 222% | 173% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from December 28, 2010 (inception date) through June 30, 2011. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year. | |
(3) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
20 | JUNE 30, 2015
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Class N Shares
Janus Global Bond Fund | ||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014(1) | ||||||||
Net Asset Value, Beginning of Period | $10.60 | $10.12 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(2) | 0.20 | 0.22 | ||||||||
Net realized and unrealized gain/(loss) | (0.68) | 0.50 | ||||||||
Total from Investment Operations | (0.48) | 0.72 | ||||||||
Less Dividends and Distributions: | ||||||||||
Dividends (from net investment income) | (0.54) | (0.24) | ||||||||
Distributions (from capital gains) | – | – | ||||||||
Return of capital | –(3) | – | ||||||||
Total Dividends and Distributions | (0.54) | (0.24) | ||||||||
Net Asset Value, End of Period | $9.58 | $10.60 | ||||||||
Total Return* | (4.73)% | 7.22% | ||||||||
Net Assets, End of Period (in thousands) | $222,452 | $249,350 | ||||||||
Average Net Assets for the Period (in thousands) | $245,055 | $237,653 | ||||||||
Ratios to Average Net Assets: | ||||||||||
Ratio of Gross Expenses** | 0.70% | 0.71% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.67% | 0.71% | ||||||||
Ratio of Net Investment Income/(Loss)** | 1.95% | 3.19% | ||||||||
Portfolio Turnover Rate | 191% | 171% |
Class S Shares
Janus Global Bond Fund | ||||||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011(4) | |||||||||||||||||
Net Asset Value, Beginning of Period | $10.62 | $9.87 | $10.49 | $10.36 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.16(2) | 0.23(2) | 0.26 | 0.25 | 0.20 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.69) | 0.83 | (0.35) | 0.23 | 0.29 | |||||||||||||||||
Total from Investment Operations | (0.53) | 1.06 | (0.09) | 0.48 | 0.49 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.49) | (0.31) | (0.11) | (0.27) | (0.13) | |||||||||||||||||
Distributions (from capital gains) | – | – | (0.25) | (0.08) | – | |||||||||||||||||
Return of capital | –(3) | – | (0.17) | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.49) | (0.31) | (0.53) | (0.35) | (0.13) | |||||||||||||||||
Net Asset Value, End of Period | $9.60 | $10.62 | $9.87 | $10.49 | $10.36 | |||||||||||||||||
Total Return* | (5.18)% | 10.90% | (1.06)% | 4.69% | 4.96% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $162 | $418 | $905 | $915 | $875 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $192 | $571 | $943 | $895 | $851 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses** | 1.19% | 1.25% | 1.49% | 1.62% | 3.84% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.17% | 1.06% | 1.13% | 1.20% | 0.86%(5) | |||||||||||||||||
Ratio of Net Investment Income/(Loss)** | 1.60% | 2.29% | 2.20% | 2.33% | 2.97% | |||||||||||||||||
Portfolio Turnover Rate | 191% | 171% | 182% | 222% | 173% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from October 28, 2013 (inception date) through June 30, 2014. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(3) | Less than $0.005 on a per share basis. | |
(4) | Period from December 28, 2010 (inception date) through June 30, 2011. | |
(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) would be 1.27% without the waiver of these fees and expenses. |
See Notes to Financial Statements.
Janus Investment Fund | 21
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Financial Highlights (continued)
Class T Shares
Janus Global Bond Fund | ||||||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $10.61 | $9.86 | $10.48 | $10.35 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.17(2) | 0.26(2) | 0.27 | 0.31 | 0.16 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.68) | 0.80 | (0.34) | 0.19 | 0.34 | |||||||||||||||||
Total from Investment Operations | (0.51) | 1.06 | (0.07) | 0.50 | 0.50 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.51) | (0.31) | (0.12) | (0.29) | (0.15) | |||||||||||||||||
Distributions (from capital gains) | – | – | (0.25) | (0.08) | – | |||||||||||||||||
Return of capital | –(3) | – | (0.18) | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.51) | (0.31) | (0.55) | (0.37) | (0.15) | |||||||||||||||||
Net Asset Value, End of Period | $9.59 | $10.61 | $9.86 | $10.48 | $10.35 | |||||||||||||||||
Total Return* | (4.96)% | 10.91% | (0.91)% | 4.90% | 4.99% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $17,880 | $11,830 | $6,935 | $2,317 | $8,808 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $17,663 | $7,406 | $4,055 | $4,904 | $1,739 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses** | 0.96% | 0.99% | 1.19% | 1.38% | 2.33% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.92% | 0.97% | 0.98% | 1.00% | 0.68%(4) | |||||||||||||||||
Ratio of Net Investment Income/(Loss)** | 1.66% | 2.60% | 2.29% | 2.44% | 2.92% | |||||||||||||||||
Portfolio Turnover Rate | 191% | 171% | 182% | 222% | 173% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from December 28, 2010 (inception date) through June 30, 2011. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year. | |
(3) | Less than $0.005 on a per share basis. | |
(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) would be 1.01% without the waiver of these fees and expenses. |
See Notes to Financial Statements.
22 | JUNE 30, 2015
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Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
Janus Global Bond Fund (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in income-producing securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
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 evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued
Janus Investment Fund | 23
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Notes to Financial Statements (continued)
at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of June 30, 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 year. 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.
24 | JUNE 30, 2015
Table of Contents
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, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
Dividends are declared daily and distributed monthly for the Fund. Realized capital gains, if any, are declared and distributed in December. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
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 year ended June 30, 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
Janus Investment Fund | 25
Table of Contents
Notes to Financial Statements (continued)
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 nonhedging purposes such as seeking to enhance returns. The Fund is subject to currency risk and counterparty risk
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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 year, the Fund entered into forward currency contracts with the obligation to purchase foreign currencies in the future at an agreed upon rate in order to take a positive outlook on the related currency. These forward contracts seek to increase exposure to currency risk.
During the year, the Fund entered into forward currency contracts with the obligation to purchase foreign currencies in the future at an agreed upon rate in order to decrease exposure to currency risk associated with foreign currency denominated securities held by the Fund.
During the year, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to take a negative outlook on the related currency. These forward contracts seek to increase exposure to currency risk.
During the year, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to decrease exposure to currency risk associated with foreign currency denominated securities held by the Fund.
The following table provides average ending monthly currency value amounts on purchased and sold forward currency contracts during the year ended June 30, 2015.
Fund | Purchased | Sold | ||||||||
Janus Global Bond Fund | $ | 54,702,258 | $ | 137,326,654 | ||||||
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 June 30, 2015.
Fair Value of Derivative Instruments as of June 30, 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 Bond Fund | ||||||||||||
Currency Contracts | Forward currency contracts | $ | 840,152 | Forward currency contracts | $ | 121,014 | ||||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the year ended June 30, 2015.
The effect of Derivative Instruments on the Statements of Operations for the year ended June 30, 2015
Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||
Derivatives not accounted for as | Investments and foreign | |||
hedging instruments | currency transactions | |||
Janus Global Bond Fund | ||||
Currency Contracts | $ | 16,056,121 | ||
Change in Unrealized Appreciation/Depreciation on Derivatives Recognized in Income | ||||
Investments, foreign | ||||
currency translations and | ||||
Derivatives not accounted for as | non-interested Trustees’ | |||
hedging instruments | deferred compensation | |||
Janus Global Bond Fund | ||||
Currency Contracts | $ | 950,988 | ||
Please see the Fund’s Statement of Operations for the Fund’s “Net Realized and Unrealized Gain/(Loss) on Investments.”
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Notes to Financial Statements (continued)
3. | Other Investments and Strategies |
Additional Investment Risk
The Fund may be invested in lower-rated debt securities that have a higher risk of default or loss of value since these securities may be sensitive to economic changes, political changes or adverse developments specific to the issuer.
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient 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
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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.
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 June 30, 2015.
• | Bank Loans – Bank loans are obligations of companies or other entities entered into in connection with recapitalizations, acquisitions, and refinancings. The Fund’s investments in bank loans are generally acquired as a participation interest in, or assignment of, loans originated by a lender or other financial institution. These investments may include institutionally-traded floating and fixed-rate debt securities. | |
• | Floating Rate Loans – Floating rate loans are debt securities that have floating interest rates, that adjust periodically, and are tied to a benchmark lending rate, such as the London Interbank Offered Rate (“LIBOR”). In other cases, the lending rate could be tied to the prime rate offered by one or more major U.S. banks or the rate paid on large certificates of deposit traded in the secondary markets. If the benchmark lending rate changes, the rate payable to lenders under the loan will change at the next scheduled adjustment date specified in the loan agreement. Floating rate loans are typically issued to companies (“borrowers”) in connection with recapitalizations, acquisitions, and refinancings. Floating rate loan investments are generally below investment grade. Senior floating rate loans are secured by specific collateral of a borrower and are senior in the borrower’s capital structure. The senior position in the borrower’s capital structure generally gives holders of senior loans a claim on certain of the borrower’s assets that is senior to subordinated debt and preferred and common stock in the case of a borrower’s default. Floating rate loan investments may involve foreign borrowers, and investments may be denominated in foreign currencies. Floating rate loans often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The Fund may invest in obligations of borrowers who are in bankruptcy proceedings. While the Fund generally expects to invest in fully funded term loans, certain of the loans in which the Fund may invest include revolving loans, bridge loans, and delayed draw term loans. |
Purchasers of floating rate loans may pay and/or receive certain fees. The Fund may receive fees such as covenant waiver fees or prepayment penalty fees. The Fund may pay fees such as facility fees. Such fees may affect the Fund’s return. |
• | Mezzanine Loans – Mezzanine loans are secured by the stock of the company that owns the assets. Mezzanine loans are a hybrid of debt and equity financing that is typically used to fund the expansion of existing companies. A mezzanine loan is composed of debt capital that gives the lender the right to convert to an ownership or equity |
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Notes to Financial Statements (continued)
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
Mortgage- and asset-backed securities represent interests in “pools” of commercial or residential mortgages or other assets, including consumer loans or receivables. The Fund may purchase fixed or variable rate commercial or residential 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 Mae and Freddie Mac securities 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 guarantors or insurers will meet their obligations.
Mortgage- and asset-backed securities are also subject to extension risk, which is the risk that rising interest rates could cause mortgages or other obligations underlying these securities to be paid more slowly than expected, increasing the Fund’s sensitivity to interest rate changes and causing its price to decline.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following tables present gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see either the “Fair Value of Derivative Instruments as of June 30, 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 | ||||||||||||||
JPMorgan Chase & Co. | $ | 840,152 | $ | (121,014) | $ | – | $ | 719,138 | ||||||||||
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. | $ | 121,014 | $ | (121,014) | $ | – | $ | – | ||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
The Fund does not exchange collateral on its forward currency contracts with its counterparties; however, the Fund will segregate cash or high-grade securities in an amount at all times equal to or greater than the Fund’s commitment with respect to these contracts. Such segregated assets, if with the Fund’s custodian, are denoted on the accompanying Schedule of Investments and are evaluated daily to ensure their market value equals or exceeds the current market value of the Fund’s corresponding forward currency contracts.
The Fund may require the counterparty to pledge securities as collateral daily (based on the daily valuation of the financial asset) if the Fund has a net aggregate unrealized gain on OTC derivative contracts with a particular counterparty. The Fund may deposit cash as collateral with the counterparty and/or custodian daily (based on the daily valuation of the financial asset) if the Fund has a net aggregate unrealized loss on OTC derivative contracts with a particular counterparty. The collateral amounts are subject to minimum exposure requirements and initial margin requirements. Collateral amounts are monitored and subsequently adjusted up or down as valuations fluctuate by at least the minimum exposure requirement. Collateral may reduce the risk of loss.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Restricted Security Transactions
Restricted securities held by the Fund may not be sold except in exempt transactions or in a public offering registered under the Securities Act of 1933, as amended. The risk of investing in such securities is generally greater than the risk of investing in the securities of widely held, publicly traded companies. Lack of a secondary market and resale restrictions may result in the inability of the Fund to sell a security at a fair price and may substantially delay the sale of the security. In addition, these securities may exhibit greater price volatility than securities for which secondary markets exist.
Sovereign Debt
The Fund may invest in U.S. and foreign government debt securities (“sovereign debt”). Investments in U.S. sovereign debt are considered low risk. However, investments in non-U.S. sovereign debt can involve a high degree of risk, including the risk that the governmental entity that controls the repayment of sovereign debt may not be willing or able to repay the principal and/or to pay the interest on its sovereign debt in a timely manner. A sovereign debtor’s willingness or ability to satisfy its debt obligation may be affected by various factors, including its cash flow situation, the extent of its foreign currency reserves, the availability of foreign exchange when a payment is due, the relative size of its debt position in relation to its economy as a whole, the sovereign debtor’s policy toward international lenders, and local political constraints to which the governmental entity may be subject. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies, and other entities. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance, or repay principal or interest when due may result in the cancellation of third party commitments to lend funds to the sovereign debtor, which may further impair such debtor’s ability or willingness to timely service its debts. The Fund may be requested to participate in the rescheduling of such sovereign debt and to extend further loans to governmental entities, which may adversely affect
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Notes to Financial Statements (continued)
the Fund’s holdings. In the event of default, there may be limited or no legal remedies for collecting sovereign debt and there may be no bankruptcy proceedings through which the Fund may collect all or part of the sovereign debt that a governmental entity has not repaid.
When-Issued and Delayed Delivery Securities
The Fund may purchase or sell securities on a when-issued or delayed delivery basis. When-issued and delayed delivery securities in which the Fund may invest include U.S. Treasury Securities, municipal bonds, bank loans, and other similar instruments. The price of the underlying securities and date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Losses may arise due to changes in the market value of the securities or from the inability of counterparties to meet the terms of the contract. In connection with such purchases, the Fund may hold liquid assets as collateral with the Fund’s custodian sufficient to cover the purchase price.
4. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Janus Global Bond Fund | First $ | 1 Billion | 0.60 | |||||||
Next $ | 1 Billion | 0.55 | ||||||||
Over $ | 2 Billion | 0.50 | ||||||||
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Previous | ||||||||||
New Expense | Expense | |||||||||
Limit (%) | Limit (%) | |||||||||
(November 1, | (until November | |||||||||
Fund | 2014 to present) | 1, 2014) | ||||||||
Janus Global Bond Fund | 0.66 | 0.75 | ||||||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
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
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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 $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the year ended June 30, 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 June 30, 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 year ended June 30, 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 (continued)
$279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 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 product compliant with Rule 2a-7 under the 1940 Act. There are no restrictions on the Fund’s ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Fund to Janus Cash Liquidity Fund LLC. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the year ended June 30, 2015 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 4.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the year ended June 30, 2015, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Janus Global Bond Fund | $ | 5,959 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the year ended June 30, 2015, redeeming shareholders of Class A Shares paid the following CDSCs to Janus Distributors:
Fund (Class A Shares) | CDSC | |||||
Janus Global Bond Fund | $ | 4,859 | ||||
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 year ended June 30, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Janus Global Bond Fund | $ | 1,289 | ||||
As of June 30, 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 Bond Fund - Class A Shares | - | % | - | % | ||||||
Janus Global Bond Fund - Class C Shares | - | - | ||||||||
Janus Global Bond Fund - Class D Shares | - | - | ||||||||
Janus Global Bond Fund - Class I Shares | - | - | ||||||||
Janus Global Bond Fund - Class N Shares | 99 | 69 | ||||||||
Janus Global Bond Fund - Class S Shares | 93 | 0 | ||||||||
Janus Global Bond Fund - Class T Shares | - | - | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
5. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation, derivatives, and foreign currency contract adjustments. The Fund has elected to treat gains and
34 | JUNE 30, 2015
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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 Fund has elected to defer post-October losses and qualified late-year losses as noted in the table below. These losses will be deferred for tax purposes and recognized during the next fiscal year.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
Janus Global Bond Fund | $(18,725) | $– | $(6,227,333) | $(3,745,832) | $– | $(15,537) | $(15,128,046) | ||||||||||||||||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of June 30, 2015, 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 June 30, 2015
Accumulated | |||||||||||||||
No Expiration | Capital | ||||||||||||||
Fund | Short-Term | Long-Term | Losses | ||||||||||||
Janus Global Bond Fund | $ | (6,227,333) | $ | – | $ | (6,227,333) | |||||||||
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 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.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
Janus Global Bond Fund | $ | 327,493,308 | $ | 665,837 | $ | (15,793,883) | ||||||||
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, passive foreign investment companies, net investment losses, and capital loss carryovers. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the year ended June 30, 2015
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Global Bond Fund | $ | 17,854,212 | $ | – | $ | 137,224 | $ | – | ||||||||||||||
For the year ended June 30, 2014
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Global Bond Fund | $ | 8,399,847 | $ | – | $ | – | $ | – | ||||||||||||||
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Notes to Financial Statements (continued)
Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
Janus Global Bond Fund | $(405,984) | $7,535,939 | $(7,129,955) | |||||||||||
6. | Capital Share Transactions |
Janus Global | ||||||||||
Bond Fund | ||||||||||
For each year and period ended June 30 | 2015 | 2014(1) | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 3,507,594 | 451,408 | ||||||||
Reinvested dividends and distributions | 127,235 | 7,785 | ||||||||
Shares repurchased | (1,388,152) | (342,260) | ||||||||
Net Increase/(Decrease) in Fund Shares | 2,246,677 | 116,933 | ||||||||
Shares Outstanding, Beginning of Period | 588,783 | 471,850 | ||||||||
Shares Outstanding, End of Period | 2,835,460 | 588,783 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 748,852 | 87,881 | ||||||||
Reinvested dividends and distributions | 21,806 | 1,804 | ||||||||
Shares repurchased | (131,007) | (132,585) | ||||||||
Net Increase/(Decrease) in Fund Shares | 639,651 | (42,900) | ||||||||
Shares Outstanding, Beginning of Period | 124,733 | 167,633 | ||||||||
Shares Outstanding, End of Period | 764,384 | 124,733 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 635,808 | 765,775 | ||||||||
Reinvested dividends and distributions | 60,134 | 25,162 | ||||||||
Shares repurchased | (874,186) | (558,517) | ||||||||
Net Increase/(Decrease) in Fund Shares | (178,244) | 232,420 | ||||||||
Shares Outstanding, Beginning of Period | 1,234,961 | 1,002,541 | ||||||||
Shares Outstanding, End of Period | 1,056,717 | 1,234,961 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 8,585,668 | 780,117 | ||||||||
Reinvested dividends and distributions | 172,848 | 168,526 | ||||||||
Shares repurchased | (5,539,657) | (24,465,266) | ||||||||
Net Increase/(Decrease) in Fund Shares | 3,218,859 | (23,516,623) | ||||||||
Shares Outstanding, Beginning of Period | 282,034 | 23,798,657 | ||||||||
Shares Outstanding, End of Period | 3,500,893 | 282,034 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 1,998,286 | 24,192,805 | ||||||||
Reinvested dividends and distributions | 1,280,089 | 542,989 | ||||||||
Shares repurchased | (3,587,241) | (1,203,788) | ||||||||
Net Increase/(Decrease) in Fund Shares | (308,866) | 23,532,006 | ||||||||
Shares Outstanding, Beginning of Period | 23,532,006 | N/A | ||||||||
Shares Outstanding, End of Period | 23,223,140 | 23,532,006 |
36 | JUNE 30, 2015
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Janus Global | ||||||||||
Bond Fund | ||||||||||
For each year and period ended June 30 | 2015 | 2014(1) | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 1,161 | 394 | ||||||||
Reinvested dividends and distributions | 810 | 1,585 | ||||||||
Shares repurchased | (24,443) | (54,401) | ||||||||
Net Increase/(Decrease) in Fund Shares | (22,472) | (52,422) | ||||||||
Shares Outstanding, Beginning of Period | 39,353 | 91,775 | ||||||||
Shares Outstanding, End of Period | 16,881 | 39,353 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 1,755,765 | 1,119,082 | ||||||||
Reinvested dividends and distributions | 87,678 | 21,213 | ||||||||
Shares repurchased | (1,094,326) | (729,190) | ||||||||
Net Increase/(Decrease) in Fund Shares | 749,117 | 411,105 | ||||||||
Shares Outstanding, Beginning of Period | 1,114,810 | 703,705 | ||||||||
Shares Outstanding, End of Period | 1,863,927 | 1,114,810 |
(1) | Period from October 28, 2013 (inception date) through June 30, 2014 for Class N Shares. |
7. | Purchases and Sales of Investment Securities |
For the year ended June 30, 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 Bond Fund | $ | 413,914,916 | $ | 398,560,078 | $ | 276,078,958 | $ | 219,343,247 | ||||||
8. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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 | 37
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of Janus Global Bond Fund:
of Janus Global Bond Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Janus Global Bond Fund (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
38 | JUNE 30, 2015
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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 | 39
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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 |
40 | JUNE 30, 2015
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second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
Janus Investment Fund | 41
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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 June 30, 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 | 51
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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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Designation Requirements (unaudited)
For federal income tax purposes, the Fund designated the following for the year ended June 30, 2015:
Return of Capital Distributions
Fund | ||||||||||
Janus Global Bond Fund | $ | 137,224 | ||||||||
Dividends Received Deduction Percentage
Fund | ||||||||||
Janus Global Bond Fund | 4 | % | ||||||||
Qualified Dividend Income Percentage
Fund | ||||||||||
Janus Global Bond Fund | 4 | % | ||||||||
Janus Investment Fund | 53
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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
Janus Investment Fund | 57
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Trustees and Officers (unaudited) (continued)
OFFICERS
Principal Occupations During the Past | ||||||
OFFICERS | Positions Held with the Trust | Term of Office* and Length of Time Served | Five Years | |||
Christopher H. Diaz 151 Detroit Street Denver, CO 80206 DOB: 1974 | Executive Vice President and Co-Portfolio Manager Janus Global Bond Fund | 5/11-Present | Portfolio Manager for other Janus accounts. Formerly, Portfolio Manager for ING (2000-2011). | |||
Gibson Smith 151 Detroit Street Denver, CO 80206 DOB: 1968 | Executive Vice President and Co-Portfolio Manager Janus Global Bond Fund | 12/10-Present | Chief Investment Officer Fixed Income and Executive Vice President of Janus Capital; Director of Perkins Investment Management LLC; and Portfolio Manager for other Janus accounts. Formerly, Executive Vice President of Janus Distributors LLC and Janus Services LLC (2007-2013). | |||
Darrell Watters 151 Detroit Street Denver, CO 80206 DOB: 1963 | Executive Vice President and Co-Portfolio Manager Janus Global Bond Fund | 12/10-Present | Vice President of Janus Capital and Portfolio Manager for other Janus accounts. | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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OFFICERS (continued)
Principal Occupations During the Past | ||||||
OFFICERS | Positions Held with the Trust | Term of Office* and Length of Time Served | Five Years | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
Janus Investment Fund | 59
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Notes
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Notes
Janus Investment Fund | 61
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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-0815-94129 | 125-02-93023 08-15 |
Table of Contents
annual report
June 30, 2015
Janus High-Yield Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
Table of Contents
Janus High-Yield Fund
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Janus High-Yield Fund (unaudited)
FUND SNAPSHOT We believe a bottom-up, fundamentally driven investment process that is focused on free cash flow and confirming management intentions to transform and improve balance sheets can generate risk-adjusted outperformance over time. Through our comprehensive global research process and moderate beta approach, we seek to deliver a less volatile client experience within the high-yield asset class over full market cycles. | Gibson Smith co-portfolio manager | Darrell Watters co-portfolio manager |
PERFORMANCE OVERVIEW
During the one year period ended June 30, 2015, Janus High-Yield Fund’s Class T Shares returned -1.38% compared with a -0.40% return for the Fund’s benchmark, the Barclays U.S. Corporate High Yield Bond Index.
INVESTMENT ENVIRONMENT
The U.S. Treasury yield curve flattened during the period, although much of the gains of longer-dated securities were not sustained over the final few months. Long-dated Treasury yields fell through the end of 2014 as investors clamored for dollar-denominated assets. Both Europe and Japan have been taking steps to engineer even more accommodative monetary policy, making yields on Treasurys relatively attractive. Also contributing to the bond rally was softer-than-expected economic data in the first part of 2015 which diminished investor concern of breakout growth or stronger-than-expected inflation. A spring rebound in economic data, however, caused Treasurys to sell off and the curve to steepen. Late in the period, communication from the Fed that they would likely initiate the first rate hike in 2015 also kept a certain amount of upward pressure on yields. Still, global interest rate differentials and developments in China and Greece likely capped U.S. yields on the longer end of the curve. Yields on two-year Treasury notes, which are especially sensitive to Fed rate hikes, rose during the period.
Rates fell across the curve in the eurozone in anticipation of the European Central Bank (ECB) initiating quantitative easing (QE); the announcement of a larger-than-expected QE program then pushed rates down even further. Concerns that eurozone sovereigns were overvalued sparked a spring sell-off – which was aggravated by low market liquidity – causing the yield on the 10-year German bund rise to nearly 1% after having almost reached negative territory only a couple of months prior.
High-yield and investment-grade credit spreads widened during the period amid a flood of new issuance. Shareholder-friendly activity, which may not be friendly to bondholders, also weighed on bond prices. Spreads in mortgage-backed securities (MBS) were flat during the period as rate volatility hindered investors’ ability to judge MBS prepayment risk.
PERFORMANCE DISCUSSION
The Fund underperformed its benchmark, the Barclays U.S. Corporate High Yield Bond Index, during the period. Underperformance was driven largely by our overweight to energy, underweight to retailers and underweight to the BB-rated segment of the high yield market.
We remain committed to a bottom up, fundamental investment approach, which we believe is especially valuable in environments such as we find ourselves today. In our shift to a more defensive posture, we are seeking to identify high-yield corporate bonds of higher-quality companies committed to strengthening their capital structures and are thus candidates for a possible ratings upgrade. Throughout the period, we maintained a duration lower than that of the benchmark.
On the sector level, independent energy, retailers and environmental services detracted from relative performance. On an issuer level, one of the largest relative detractors was QS Wholesale, the maker of the outdoor lifestyle apparel brand, Quiksilver, which weighed on the retailers sector. After strategic missteps by previous management, a new team, led by the company’s founder, was brought in during the second quarter. The company is seeking to sell its European headquarters, an attractive asset and whose sale could potentially double the company’s liquidity, in our view.
Environmental services company, Nuverra Environmental Solutions, was the largest individual detractor from relative returns. Nuverra provides treatment and disposal services for oil and gas producers. There was investor concern that the decline in energy prices would curb demand for Nuverra’s business. As we were mindful that the decline in oil prices could curb Nuverra’s growth prospects, we exited our position.
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Janus High-Yield Fund (unaudited)
Relative sector contributors include metals and mining. Driving returns were both our significant underweight versus the benchmark – evidence that which securities we choose to avoid is equally important as those we choose to hold – and our selection of the securities that we continued to own within the sector. Also contributing to performance was security selection in aerospace and defense capital goods.
The largest individual credit contributor was ADS Tactical, a provider of military gear. We believe that ADS stands to benefit as the Department of Defense moves toward a streamlined procurement process favoring vendors of choice. Our underweight to Peabody Energy was also additive. In our view, coal miners face both daunting regulatory challenges in addition to stiff competition from natural gas, a commodity whose prices have remained under intense pressure for a sustained amount of time.
On an asset class basis, our out-of-index allocations to convertible credits and common stock were relative contributors, driven by our overweight.
OUTLOOK
Multiple factors currently have the potential to impact the fixed income environment and high-yield corporate credit in particular. Chief among them is the timing and pace of the Fed’s rate hikes and the pressure such a move would put on high-yield bonds with longer durations. We are also concerned with the releveraging of corporate balance sheets, large amounts of new issuance and market liquidity. Evidence of some investors putting the hunt for yield over capital preservation can be seen in the weakening of covenants of new many issuances.
Data suggest that the central bank is achieving its dual mandate. Strong gains in payrolls have resumed and wage growth has shown signs of accelerating. The steadying in the U.S. dollar after its rapid appreciation also aids the inflation outlook as continued gains in the currency would have made foreign products cheaper, thus keeping a lid on prices.
The dollar, however, remains one of our wild cards. Deterioration in the Greece dispute or a deceleration in non-U.S. economies could send investors fleeing back toward dollar-denominated assets, forcing a resumption in the currency’s march upward. This could pressure earnings of U.S. multinationals. In a nod to such scenarios, the Fed has acknowledged that international developments are being considered as it charts its path forward.
The winter slowdown does not affect our full-year outlook. We expect growth to catch up over the second half of 2015. Continued patches of softness may cause the Fed to delay its initial rate hike past the widely assumed September lift-off, but in our view, rates will rise – albeit cautiously – this year. We believe that better-than-expected growth is not priced into the fixed income market. That concerns us, especially as any catalyst for a sell-off, in our view, would be especially felt within the high-yield space.
We are mindful that we are quite possibly nearing the end of a credit cycle. Merger and acquisition activity, share buybacks, and debt issuance are up. We are also concerned with the potential for sustained periods of elevated volatility, which we consider suppressed by continued fixed-income inflows. Alarmingly low levels of liquidity are a risk factor that we are taking seriously. We believe that less liquid pockets of the market such as lower-rated segments of high-yield are especially vulnerable. Should an illiquidity event occur, we want to be a provider of liquidity.
We have sought to reduce risks in our portfolio, and expect to maintain this defensive posture as the aforementioned risk factors play out. We are holding larger amounts of cash than normal as any draw-downs that could occur are best paid out of cash rather than selling into a possible vacuum. Securities that have a sufficient amount of yield cushion to continue to compensate investors in the event of falling prices are also favorable to us. We have not seen such a confluence of potentially adverse forces in fixed income markets for several years. Our binding principle of capital preservation is of utmost importance as we navigate the choppy waters ahead.
Thank you for your investment in Janus High Yield Fund.
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(unaudited)
Janus High-Yield Fund At A Glance
Fund Profile
June 30, 2015
Weighted Average Maturity | 6.0 Years | |
Average Effective Duration* | 3.7 Years | |
30-day Current Yield** | ||
Class A Shares at NAV | ||
Without Reimbursement | 5.43% | |
With Reimbursement | 5.43% | |
Class A Shares at MOP | ||
Without Reimbursement | 5.16% | |
With Reimbursement | 5.16% | |
Class C Shares*** | ||
Without Reimbursement | 4.71% | |
With Reimbursement | 4.71% | |
Class D Shares | ||
Without Reimbursement | 5.62% | |
With Reimbursement | 5.62% | |
Class I Shares | ||
Without Reimbursement | 5.73% | |
With Reimbursement | 5.73% | |
Class N Shares | ||
Without Reimbursement | 5.83% | |
With Reimbursement | 5.83% | |
Class R Shares | ||
Without Reimbursement | 5.05% | |
With Reimbursement | 5.05% | |
Class S Shares | ||
Without Reimbursement | 5.31% | |
With Reimbursement | 5.31% | |
Class T Shares | ||
Without Reimbursement | 5.57% | |
With Reimbursement | 5.57% | |
Number of Bonds/Notes | 181 |
* | A theoretical measure of price volatility | |
** | Yield will fluctuate | |
*** | Does not include the 1.00% contingent deferred sales charge. |
Ratings† Summary – (% of Total Investments)
June 30, 2015
BBB | 2.9% | |
BB | 26.4% | |
B | 43.2% | |
CCC | 14.7% | |
Not Rated | 3.1% | |
Other | 9.7% |
† | Credit ratings provided by Standard & Poor’s (S&P), an independent credit rating agency. Credit ratings range from AAA (highest) to D (lowest) based on S&P’s measures. Further information on S&P’s rating methodology may be found at www.standardandpoors.com. Other rating agencies may rate the same securities differently. Ratings are relative and subjective and are not absolute standards of quality. Credit quality does not remove market risk and is subject to change. “Not Rated” securities are not rated by S&P, but may be rated by other rating agencies and do not necessarily indicate low quality. “Other” includes cash equivalents, equity securities, and certain derivative instruments. |
Janus Investment Fund | 3
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Janus High-Yield Fund (unaudited)
Significant Areas of Investment – (% of Net Assets)
As of June 30, 2015
Asset Allocation – (% of Net Assets)
As of June 30, 2015
Emerging markets comprised 7.2% of total net assets.
4 | JUNE 30, 2015
Table of Contents
(unaudited)
Performance
Average Annual Total Return – for the periods ended June 30, 2015 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||
One | Five | Ten | Since | Total Annual Fund | |||||||
Year | Year | Year | Inception* | Operating Expenses | |||||||
Janus High-Yield Fund – Class A Shares | |||||||||||
NAV | –1.61% | 7.89% | 6.97% | 7.65% | 1.01% | ||||||
MOP | –6.29% | 6.84% | 6.45% | 7.38% | |||||||
Janus High-Yield Fund – Class C Shares | |||||||||||
NAV | –2.20% | 7.11% | 6.22% | 6.90% | 1.73% | ||||||
CDSC | –3.11% | 7.11% | 6.22% | 6.90% | |||||||
Janus High-Yield Fund – Class D Shares(1) | –1.29% | 8.13% | 7.15% | 7.75% | 0.77% | ||||||
Janus High-Yield Fund – Class I Shares | –1.32% | 8.20% | 7.09% | 7.72% | 0.72% | ||||||
Janus High-Yield Fund – Class N Shares | –1.14% | 8.02% | 7.09% | 7.72% | 0.62% | ||||||
Janus High-Yield Fund – Class R Shares | –2.00% | 7.48% | 6.52% | 7.18% | 1.37% | ||||||
Janus High-Yield Fund – Class S Shares | –1.73% | 7.73% | 6.79% | 7.44% | 1.12% | ||||||
Janus High-Yield Fund – Class T Shares | –1.38% | 8.02% | 7.09% | 7.72% | 0.87% | ||||||
Barclays U.S. Corporate High-Yield Bond Index | –0.40% | 8.61% | 7.89% | 7.31% | |||||||
Morningstar Quartile – Class T Shares | 3rd | 2nd | 2nd | 1st | |||||||
Morningstar Ranking – based on total returns for High Yield Bond Funds | 507/780 | 229/615 | 152/529 | 6/246 | |||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month–end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
Maximum Offering Price (MOP) returns include the maximum sales charge of 4.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
Janus Investment Fund | 5
Table of Contents
Janus High-Yield 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.
Fixed income securities are subject to interest rate, inflation, credit and default risk. The bond market is volatile. As interest rates rise, bond prices usually fall, and vice versa. The return of principal is not guaranteed, and prices may decline if an issuer fails to make timely payments or its credit strength weakens.
High-yield/high-risk bonds, also known as “junk” bonds, involve a greater risk of default and price volatility than investment grade bonds. High-yield/high-risk bonds can experience sudden and sharp price swings which will affect net asset value.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility, lower liquidity and differing financial and information reporting standards, all of which are magnified in emerging markets.
The Fund will normally invest at least 80% of its net assets, measured at the time of purchase, in the type of securities described by its name.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Class A Shares, Class C Shares, Class R Shares, and Class S Shares commenced operations on July 6, 2009. Performance shown for each class for periods prior to July 6, 2009, reflects the performance of the Fund’s Class J Shares, the initial share class (renamed Class T Shares effective February 16, 2010), calculated using the fees and expenses of each respective share class, without the effect of any fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
Class I Shares of the Fund commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers.
Class N Shares of the Fund commenced operations on May 31, 2012. Performance shown for periods prior to May 31, 2012, reflects the performance of the Fund’s Class T Shares, calculated using the fees and expenses of Class T Shares, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return or yield, and therefore the ranking for the period.
© 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 29, 1995 | |
(1) | Closed to certain new investors. |
6 | JUNE 30, 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 | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,031.70 | $ | 4.84 | $ | 1,000.00 | $ | 1,020.03 | $ | 4.81 | 0.96% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,029.20 | $ | 8.50 | $ | 1,000.00 | $ | 1,016.41 | $ | 8.45 | 1.69% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,033.90 | $ | 3.88 | $ | 1,000.00 | $ | 1,020.98 | $ | 3.86 | 0.77% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,034.30 | $ | 3.48 | $ | 1,000.00 | $ | 1,021.37 | $ | 3.46 | 0.69% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 1,034.70 | $ | 3.08 | $ | 1,000.00 | $ | 1,021.77 | $ | 3.06 | 0.61% | |||||||||||||||||
Class R Shares | $ | 1,000.00 | $ | 1,029.70 | $ | 6.84 | $ | 1,000.00 | $ | 1,018.05 | $ | 6.80 | 1.36% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,031.00 | $ | 5.59 | $ | 1,000.00 | $ | 1,019.29 | $ | 5.56 | 1.11% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,033.50 | $ | 4.34 | $ | 1,000.00 | $ | 1,020.53 | $ | 4.31 | 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 181/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. |
Janus Investment Fund | 7
Table of Contents
Janus High-Yield Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Asset-Backed/Commercial Mortgage-Backed Securities – 1.5% | ||||||||||
$ | 4,591,000 | COMM 2015-3BP Mortgage Trust 3.3463%, 2/10/35 (144A),‡ | $ | 3,986,540 | ||||||
3,690,673 | Fannie Mae Connecticut Avenue Securities 5.0848%, 11/25/24‡ | 3,807,564 | ||||||||
7,563,000 | Fannie Mae Connecticut Avenue Securities 4.1849%, 5/25/25‡ | 7,390,178 | ||||||||
9,965,000 | GAHR Commercial Mortgage Trust 2015-NRF 3.4949%, 12/15/19 (144A),‡ | 9,355,839 | ||||||||
3,879,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2015-COSMO 4.1355%, 1/15/32 (144A),‡ | 3,889,423 | ||||||||
3,874,817 | Wachovia Bank Commercial Mortgage Trust Series 2007-C31 5.6600%, 4/15/47‡ | 3,974,233 | ||||||||
Total Asset-Backed/Commercial Mortgage-Backed Securities (cost $32,665,463) | 32,403,777 | |||||||||
Bank Loans and Mezzanine Loans – 4.5% | ||||||||||
Basic Industry – 0.5% | ||||||||||
12,110,000 | Oxbow Carbon & Minerals LLC 8.0000%, 1/17/20‡ | 11,413,675 | ||||||||
Capital Goods – 0.8% | ||||||||||
4,994,791 | Maxim Crane Works LP 10.2500%, 11/26/18‡ | 4,994,791 | ||||||||
11,163,000 | Stardust Finance Holdings, Inc. 10.5000%, 3/13/23‡ | 10,883,925 | ||||||||
15,878,716 | ||||||||||
Consumer Cyclical – 1.4% | ||||||||||
6,082,000 | Cosmopolitan of Las Vegas 8.9330%, 12/19/16‡ | 6,082,000 | ||||||||
22,032,000 | Delta 2 Lux Sarl 7.7500%, 7/29/22‡ | 21,976,920 | ||||||||
1,716,000 | Orleans Homebuilders, Inc. 10.5000%, 2/14/16‡ | 1,703,107 | ||||||||
29,762,027 | ||||||||||
Consumer Non-Cyclical – 0.3% | ||||||||||
1,344,000 | Del Monte Foods, Inc. 8.2500%, 8/18/21‡ | 1,212,127 | ||||||||
4,203,000 | Surgery Center Holdings, Inc. 8.5000%, 11/3/21‡ | 4,183,750 | ||||||||
5,395,877 | ||||||||||
Energy – 0.8% | ||||||||||
3,584,000 | Chief Exploration & Development LLC 7.5000%, 5/16/21‡ | 3,361,792 | ||||||||
17,199,000 | Templar Energy LLC 8.5000%, 11/25/20‡ | 12,624,066 | ||||||||
15,985,858 | ||||||||||
Real Estate Investment Trusts (REITs) – 0.3% | ||||||||||
7,312,000 | DTZ US Borrower LLC 9.2500%, 11/4/22‡ | 7,312,000 | ||||||||
Transportation – 0.4% | ||||||||||
3,465,990 | OSG Bulk Ships, Inc. 5.2500%, 8/5/19‡ | 3,463,908 | ||||||||
4,852,949 | OSG International, Inc. 5.7500%, 8/5/19‡ | 4,859,132 | ||||||||
8,323,040 | ||||||||||
Total Bank Loans and Mezzanine Loans (cost $98,898,723) | 94,071,193 | |||||||||
Common Stocks – 1.0% | ||||||||||
Capital Markets – 0.3% | ||||||||||
198,535 | E*TRADE Financial Corp.* | 5,946,123 | ||||||||
Communications Equipment – 0.3% | ||||||||||
184,673 | CommScope Holding Co., Inc.* | 5,634,373 | ||||||||
Construction Materials – 0.2% | ||||||||||
220,052 | Summit Materials, Inc. – Class A*,† | 5,611,326 | ||||||||
Hotels, Restaurants & Leisure – 0.2% | ||||||||||
90,031 | Las Vegas Sands Corp. | 4,732,930 | ||||||||
Total Common Stocks (cost $17,817,813) | 21,924,752 | |||||||||
Corporate Bonds – 82.4% | ||||||||||
Banking – 0.8% | ||||||||||
$ | 16,527,000 | Royal Bank of Scotland Group PLC 5.1250%, 5/28/24 | 16,506,887 | |||||||
Basic Industry – 1.9% | ||||||||||
5,226,000 | ArcelorMittal 5.1250%, 6/1/20 | 5,297,857 | ||||||||
13,928,000 | Resolute Forest Products, Inc. 5.8750%, 5/15/23 | 12,674,480 | ||||||||
21,375,000 | Rockwood Specialties Group, Inc. 4.6250%, 10/15/20 | 22,256,719 | ||||||||
40,229,056 | ||||||||||
Brokerage – 0.2% | ||||||||||
4,840,000 | Jefferies Finance LLC / JFIN Co-Issuer Corp. 7.3750%, 4/1/20 (144A) | 4,755,300 | ||||||||
Capital Goods – 2.9% | ||||||||||
41,570,000 | ADS Tactical, Inc. 11.0000%, 4/1/18§ | 43,024,989 | ||||||||
8,967,000 | American Builders & Contractors Supply Co., Inc. 5.6250%, 4/15/21 (144A) | 9,123,923 | ||||||||
2,204,000 | NCI Building Systems, Inc. 8.2500%, 1/15/23 (144A) | 2,347,260 | ||||||||
5,832,000 | Summit Materials LLC / Summit Materials Finance Corp. 10.5000%, 1/31/20 | 6,364,170 | ||||||||
60,860,342 | ||||||||||
Communications – 13.1% | ||||||||||
18,037,000 | Altice Financing SA 6.6250%, 2/15/23 (144A) | 17,907,134 | ||||||||
9,264,000 | Altice Finco SA 7.6250%, 2/15/25 (144A) | 8,893,440 | ||||||||
7,890,000 | Altice US Finance I Corp. 5.3750%, 7/15/23 (144A) | 7,692,750 | ||||||||
2,813,000 | Altice US Finance SA 7.7500%, 7/15/25 (144A) | 2,700,480 | ||||||||
15,177,000 | Block Communications, Inc. 7.2500%, 2/1/20 (144A) | 15,480,540 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Communications – (continued) | ||||||||||
$ | 11,035,000 | CCO Holdings LLC / CCO Holdings Capital Corp. 5.2500%, 3/15/21 | $ | 11,007,412 | ||||||
6,041,000 | CCO Holdings LLC / CCO Holdings Capital Corp. 5.3750%, 5/1/25 (144A) | 5,882,424 | ||||||||
5,226,000 | CCO Holdings LLC / CCO Holdings Capital Corp. 5.8750%, 5/1/27 (144A) | 5,101,883 | ||||||||
17,507,000 | Crown Media Holdings, Inc. 10.5000%, 7/15/19 | 18,491,769 | ||||||||
9,001,000 | DISH DBS Corp. 5.8750%, 11/15/24 | 8,646,586 | ||||||||
4,146,000 | DreamWorks Animation SKG, Inc. 6.8750%, 8/15/20 (144A) | 4,104,540 | ||||||||
18,713,000 | Entercom Radio LLC 10.5000%, 12/1/19 | 20,069,692 | ||||||||
6,933,000 | Harron Communications LP/Harron Finance Corp. 9.1250%, 4/1/20 (144A) | 7,496,306 | ||||||||
13,338,000 | iHeartCommunications, Inc. 14.0000%, 2/1/21 | 9,469,980 | ||||||||
12,612,000 | iHeartCommunications, Inc. 9.0000%, 9/15/22 | 11,382,330 | ||||||||
12,617,000 | Level 3 Financing, Inc. 5.3750%, 8/15/22 | 12,743,170 | ||||||||
8,453,000 | Level 3 Financing, Inc. 5.1250%, 5/1/23 (144A) | 8,241,675 | ||||||||
8,864,000 | National CineMedia LLC 7.8750%, 7/15/21 | 9,285,040 | ||||||||
2,958,000 | Sprint Capital Corp. 6.9000%, 5/1/19 | 3,017,160 | ||||||||
8,596,000 | Sprint Communications, Inc. 7.0000%, 8/15/20 | 8,531,530 | ||||||||
11,875,000 | T-Mobile USA, Inc. 6.2500%, 4/1/21 | 12,171,875 | ||||||||
20,545,000 | T-Mobile USA, Inc. 6.0000%, 3/1/23 | 21,032,944 | ||||||||
13,144,000 | Townsquare Media, Inc. 6.5000%, 4/1/23 (144A) | 13,012,560 | ||||||||
7,818,000 | Tribune Media Co. 5.8750%, 7/15/22 (144A) | 7,876,635 | ||||||||
17,921,000 | Univision Communications, Inc. 5.1250%, 2/15/25 (144A) | 17,297,349 | ||||||||
11,133,000 | UPCB Finance IV, Ltd. 5.3750%, 1/15/25 (144A) | 10,626,448 | ||||||||
278,163,652 | ||||||||||
Consumer Cyclical – 20.1% | ||||||||||
7,778,000 | Argos Merger Sub, Inc. 7.1250%, 3/15/23 (144A) | 8,147,455 | ||||||||
8,418,000 | AV Homes, Inc. 8.5000%, 7/1/19 | 8,144,415 | ||||||||
8,808,000 | Caesars Entertainment Resort Properties LLC 8.0000%, 10/1/20 | 8,296,079 | ||||||||
5,413,000 | Caesars Entertainment Resort Properties LLC 11.0000%, 10/1/21 | 4,533,388 | ||||||||
5,789,000 | CCM Merger, Inc. 9.1250%, 5/1/19 (144A) | 6,194,230 | ||||||||
5,215,000 | Century Communities, Inc. 6.8750%, 5/15/22 (144A) | 5,123,738 | ||||||||
14,141,000 | Century Communities, Inc. 6.8750%, 5/15/22 | 13,893,532 | ||||||||
4,042,000 | DR Horton, Inc. 4.0000%, 2/15/20 | 4,020,577 | ||||||||
11,225,000 | Family Tree Escrow LLC 5.7500%, 3/1/23 (144A) | 11,730,125 | ||||||||
5,219,000 | FCA US LLC / CG Co-Issuer, Inc. 8.2500%, 6/15/21 | 5,688,710 | ||||||||
10,304,000 | Fiat Chrysler Automobiles NV 4.5000%, 4/15/20 (144A) | 10,252,480 | ||||||||
9,548,000 | Greektown Holdings LLC/Greektown Mothership Corp. 8.8750%, 3/15/19 (144A) | 10,025,400 | ||||||||
19,619,000 | Hunt Cos., Inc. 9.6250%, 3/1/21 (144A) | 20,207,570 | ||||||||
13,520,000 | IHS, Inc. 5.0000%, 11/1/22 (144A) | 13,435,500 | ||||||||
5,960,000 | JC Penney Corp., Inc. 5.7500%, 2/15/18 | 5,833,350 | ||||||||
7,080,000 | JC Penney Corp., Inc. 8.1250%, 10/1/19 | 7,009,200 | ||||||||
10,615,000 | KB Home 7.6250%, 5/15/23 | 11,092,675 | ||||||||
2,221,000 | Landry’s Holdings II, Inc. 10.2500%, 1/1/18 (144A) | 2,304,288 | ||||||||
31,745,000 | Landry’s, Inc. 9.3750%, 5/1/20 (144A) | 34,046,512 | ||||||||
5,290,000 | Levi Strauss & Co. 5.0000%, 5/1/25 (144A) | 5,118,075 | ||||||||
8,285,000 | Meritage Homes Corp. 7.1500%, 4/15/20 | 8,947,800 | ||||||||
10,233,000 | Meritage Homes Corp. 7.0000%, 4/1/22 | 10,923,727 | ||||||||
5,226,000 | Meritage Homes Corp. 6.0000%, 6/1/25 (144A) | 5,252,130 | ||||||||
8,114,000 | MGM Resorts International 6.7500%, 10/1/20 | 8,600,840 | ||||||||
5,670,000 | MGM Resorts International 6.6250%, 12/15/21 | 5,925,150 | ||||||||
7,434,000 | MGM Resorts International 7.7500%, 3/15/22 | 8,177,400 | ||||||||
15,762,000 | Mohegan Tribal Gaming Authority 9.7500%, 9/1/21 | 16,510,695 | ||||||||
10,723,000 | MPG Holdco I, Inc. 7.3750%, 10/15/22 | 11,419,995 | ||||||||
8,574,000 | Navistar International Corp. 8.2500%, 11/1/21 | 8,145,300 | ||||||||
17,219,000 | Peninsula Gaming LLC / Peninsula Gaming Corp. 8.3750%, 2/15/18 (144A) | 17,929,284 | ||||||||
24,076,000 | PF Chang’s China Bistro, Inc. 10.2500%, 6/30/20 (144A) | 24,888,565 | ||||||||
16,473,000 | Pinnacle Entertainment, Inc. 7.5000%, 4/15/21 | 17,440,789 | ||||||||
14,300,000 | Playa Resorts Holding BV 8.0000%, 8/15/20 (144A) | 14,800,500 | ||||||||
12,195,000 | Quiksilver, Inc. / QS Wholesale, Inc. 7.8750%, 8/1/18 (144A) | 10,426,725 | ||||||||
14,599,000 | Quiksilver, Inc. / QS Wholesale, Inc. 10.0000%, 8/1/20 | 5,401,630 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus High-Yield Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Consumer Cyclical – (continued) | ||||||||||
$ | 3,653,000 | Rite Aid Corp. 6.1250%, 4/1/23 (144A) | $ | 3,762,590 | ||||||
21,263,000 | ROC Finance LLC / ROC Finance 1 Corp. 12.1250%, 9/1/18 (144A) | 22,698,252 | ||||||||
10,910,000 | Schaeffler Holding Finance BV 6.2500%, 11/15/19 (144A) | 11,496,412 | ||||||||
4,697,000 | Schaeffler Holding Finance BV 6.7500%, 11/15/22 (144A) | 5,066,889 | ||||||||
7,211,000 | Station Casinos LLC 7.5000%, 3/1/21 | 7,715,770 | ||||||||
5,737,000 | WCI Communities, Inc. 6.8750%, 8/15/21 | 5,923,453 | ||||||||
426,551,195 | ||||||||||
Consumer Non-Cyclical – 15.0% | ||||||||||
3,305,000 | Albertsons Holdings LLC/Saturn Acquisition Merger Sub, Inc. 7.7500%, 10/15/22 (144A) | 3,511,563 | ||||||||
9,232,000 | Capsugel SA 7.0000%, 5/15/19 (144A) | 9,394,622 | ||||||||
7,002,000 | Catamaran Corp. 4.7500%, 3/15/21 | 7,754,715 | ||||||||
20,781,000 | CHS/Community Health Systems, Inc. 8.0000%, 11/15/19 | 21,897,979 | ||||||||
11,586,000 | Concordia Healthcare Corp. 7.0000%, 4/15/23 (144A) | 11,586,000 | ||||||||
11,804,000 | ConvaTec Finance International SA 8.2500%, 1/15/19 (144A) | 11,597,430 | ||||||||
1,676,000 | Endo Finance LLC / Endo Finco, Inc. 7.0000%, 7/15/19 (144A) | 1,738,012 | ||||||||
4,017,000 | Endo Finance LLC / Endo Finco, Inc. 7.0000%, 12/15/20 (144A) | 4,217,850 | ||||||||
5,105,000 | Endo Finance LLC / Endo, Ltd. / Endo Finco, Inc. 6.0000%, 7/15/23 (144A) | 5,219,862 | ||||||||
7,772,000 | Endo Finance LLC / Endo, Ltd. / Endo Finco, Inc. 6.0000%, 2/1/25 (144A) | 7,898,295 | ||||||||
24,215,000 | FAGE Dairy Industry SA / FAGE USA Dairy Industry, Inc. 9.8750%, 2/1/20 (144A) | 25,244,137 | ||||||||
4,041,000 | Fresenius Medical Care US Finance II, Inc. 5.6250%, 7/31/19 (144A) | 4,374,382 | ||||||||
8,195,000 | Fresenius Medical Care US Finance II, Inc. 5.8750%, 1/31/22 (144A) | 8,686,700 | ||||||||
5,240,000 | Hologic, Inc. 5.2500%, 7/15/22 (144A) | 5,351,350 | ||||||||
3,563,000 | Horizon Pharma Financing, Inc. 6.6250%, 5/1/23 (144A) | 3,714,427 | ||||||||
5,009,000 | Jaguar Holding Co. II / Jaguar Merger Sub, Inc. 9.5000%, 12/1/19 (144A) | 5,334,585 | ||||||||
11,862,000 | JBS USA LLC / JBS USA Finance, Inc. 8.2500%, 2/1/20 (144A) | 12,573,720 | ||||||||
7,930,000 | JBS USA LLC / JBS USA Finance, Inc. 7.2500%, 6/1/21 (144A) | 8,356,237 | ||||||||
11,803,000 | JBS USA LLC / JBS USA Finance, Inc. 7.2500%, 6/1/21 (144A),† | 12,437,411 | ||||||||
9,661,000 | JBS USA LLC / JBS USA Finance, Inc. 5.8750%, 7/15/24 (144A) | 9,721,381 | ||||||||
6,317,000 | Mallinckrodt International Finance SA / Mallinckrodt CB LLC 5.5000%, 4/15/25 (144A) | 6,127,490 | ||||||||
9,142,000 | Post Holdings, Inc. 7.3750%, 2/15/22 | 9,301,985 | ||||||||
22,098,000 | Simmons Foods, Inc. 7.8750%, 10/1/21 (144A),† | 20,330,160 | ||||||||
47,000 | Smithfield Foods, Inc. 5.8750%, 8/1/21 (144A) | 48,528 | ||||||||
355,000 | Smithfield Foods, Inc. 6.6250%, 8/15/22 | 378,963 | ||||||||
25,669,000 | SUPERVALU, Inc. 6.7500%, 6/1/21† | 25,925,690 | ||||||||
7,837,000 | SUPERVALU, Inc. 7.7500%, 11/15/22 | 8,223,952 | ||||||||
6,540,000 | Tenet Healthcare Corp. 8.0000%, 8/1/20 | 6,809,775 | ||||||||
6,451,000 | Tenet Healthcare Corp. 6.0000%, 10/1/20 | 6,878,379 | ||||||||
11,116,000 | Tenet Healthcare Corp. 6.7500%, 6/15/23 (144A) | 11,338,320 | ||||||||
11,911,000 | Valeant Pharmaceuticals International 6.3750%, 10/15/20 (144A) | 12,543,772 | ||||||||
5,929,000 | Valeant Pharmaceuticals International, Inc. 5.8750%, 5/15/23 (144A) | 6,077,225 | ||||||||
21,761,000 | Valeant Pharmaceuticals International, Inc. 6.1250%, 4/15/25 (144A) | 22,386,629 | ||||||||
316,981,526 | ||||||||||
Energy – 12.1% | ||||||||||
2,122,000 | Carrizo Oil & Gas, Inc. 6.2500%, 4/15/23 | 2,127,305 | ||||||||
16,335,000 | Chesapeake Energy Corp. 6.1250%, 2/15/21 | 15,354,900 | ||||||||
3,185,000 | Crestwood Midstream Partners LP / Crestwood Midstream Finance Corp. 6.0000%, 12/15/20 | 3,296,475 | ||||||||
16,531,000 | Crestwood Midstream Partners LP / Crestwood Midstream Finance Corp. 6.1250%, 3/1/22 | 16,861,620 | ||||||||
14,524,000 | Dresser-Rand Group, Inc. 6.5000%, 5/1/21 | 15,627,824 | ||||||||
21,497,000 | Endeavor Energy Resources LP / EER Finance, Inc. 7.0000%, 8/15/21 (144A) | 21,389,515 | ||||||||
7,309,000 | Endeavor Energy Resources LP / EER Finance, Inc. 8.1250%, 9/15/23 (144A) | 7,537,406 | ||||||||
7,882,000 | EP Energy LLC / Everest Acquisition Finance, Inc. 6.3750%, 6/15/23 (144A) | 7,901,705 | ||||||||
5,966,000 | Ferrellgas Partners LP / Ferrellgas Partners Finance Corp. 8.6250%, 6/15/20† | 6,174,810 | ||||||||
16,843,000 | Hiland Partners LP / Hiland Partners Finance Corp. 7.2500%, 10/1/20 (144A) | 18,190,440 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Energy – (continued) | ||||||||||
$ | 14,371,000 | Hiland Partners LP / Hiland Partners Finance Corp. 5.5000%, 5/15/22 (144A) | $ | 14,945,840 | ||||||
9,413,000 | Holly Energy Partners LP / Holly Energy Finance Corp. 6.5000%, 3/1/20 | 9,389,467 | ||||||||
20,859,000 | MarkWest Energy Partners LP / MarkWest Energy Finance Corp. 4.5000%, 7/15/23 | 20,441,820 | ||||||||
5,861,000 | Newfield Exploration Co. 5.3750%, 1/1/26 | 5,802,390 | ||||||||
3,498,000 | Oasis Petroleum, Inc. 6.5000%, 11/1/21 | 3,480,510 | ||||||||
7,383,000 | Oasis Petroleum, Inc. 6.8750%, 3/15/22 | 7,493,745 | ||||||||
7,437,000 | Parsley Energy LLC / Parsley Finance Corp. 7.5000%, 2/15/22 (144A) | 7,546,250 | ||||||||
9,963,000 | PBF Holding Co. LLC / PBF Finance Corp. 8.2500%, 2/15/20 | 10,535,872 | ||||||||
7,184,000 | QEP Resources, Inc. 5.3750%, 10/1/22 | 6,937,589 | ||||||||
6,978,000 | QEP Resources, Inc. 5.2500%, 5/1/23 | 6,681,435 | ||||||||
6,345,000 | Rice Energy, Inc. 6.2500%, 5/1/22 | 6,297,413 | ||||||||
15,512,000 | Sabine Pass Liquefaction LLC 5.6250%, 2/1/21 | 15,822,240 | ||||||||
9,007,000 | Sabine Pass Liquefaction LLC 5.6250%, 4/15/23 | 8,976,016 | ||||||||
3,312,000 | Sanchez Energy Corp. 6.1250%, 1/15/23 | 2,964,240 | ||||||||
4,892,000 | Seven Generations Energy, Ltd. 6.7500%, 5/1/23 (144A) | 4,879,770 | ||||||||
3,568,000 | Targa Resources Partners LP / Targa Resources Partners Finance Corp. 6.6250%, 10/1/20 (144A) | 3,710,720 | ||||||||
4,995,000 | Whiting Canadian Holding Co. ULC 8.1250%, 12/1/19 | 5,229,141 | ||||||||
255,596,458 | ||||||||||
Finance Companies – 0.4% | ||||||||||
8,738,000 | CIT Group, Inc. 5.5000%, 2/15/19 (144A) | 9,109,365 | ||||||||
Financial – 1.2% | ||||||||||
24,942,000 | Kennedy-Wilson, Inc. 5.8750%, 4/1/24 | 24,817,290 | ||||||||
Industrial – 1.8% | ||||||||||
5,225,000 | Greystar Real Estate Partners LLC 8.2500%, 12/1/22 (144A) | 5,512,375 | ||||||||
22,504,000 | Howard Hughes Corp. 6.8750%, 10/1/21 (144A) | 23,854,240 | ||||||||
8,922,000 | Park-Ohio Industries, Inc. 8.1250%, 4/1/21 | 9,457,320 | ||||||||
38,823,935 | ||||||||||
Insurance – 0.5% | ||||||||||
10,632,000 | Centene Corp. 4.7500%, 5/15/22 | 10,950,960 | ||||||||
Real Estate Investment Trusts (REITs) – 0.6% | ||||||||||
12,880,000 | Forestar USA Real Estate Group, Inc. 8.5000%, 6/1/22 (144A) | 13,363,000 | ||||||||
Real Estate Management & Development – 0.2% | ||||||||||
3,400,000 | Forest City Enterprises, Inc. 3.6250%, 8/15/20 | 3,710,250 | ||||||||
Technology – 7.4% | ||||||||||
34,410,000 | Blackboard, Inc. 7.7500%, 11/15/19 (144A) | 32,345,400 | ||||||||
19,668,000 | Cardtronics, Inc. 5.1250%, 8/1/22 (144A) | 19,225,470 | ||||||||
23,511,000 | CommScope Holding Co., Inc. 6.6250%, 6/1/20 (144A) | 24,392,663 | ||||||||
26,409,000 | CommScope Technologies Finance LLC 6.0000%, 6/15/25 (144A) | 26,309,966 | ||||||||
9,257,000 | First Data Corp. 12.6250%, 1/15/21† | 10,691,835 | ||||||||
2,576,000 | Micron Technology, Inc. 5.2500%, 8/1/23 (144A) | 2,469,740 | ||||||||
10,624,000 | Micron Technology, Inc. 5.2500%, 1/15/24 (144A) | 10,033,040 | ||||||||
12,575,000 | Sensata Technologies BV 5.6250%, 11/1/24 (144A) | 13,015,125 | ||||||||
6,068,000 | TransUnion 8.1250%, 6/15/18 | 6,201,496 | ||||||||
11,610,000 | TransUnion 9.6250%, 6/15/18 | 11,642,508 | ||||||||
156,327,243 | ||||||||||
Transportation – 4.2% | ||||||||||
5,215,000 | CEVA Group PLC 4.0000%, 5/1/18 (144A) | 4,771,725 | ||||||||
5,383,000 | Eletson Holdings 9.6250%, 1/15/22 (144A) | 5,248,425 | ||||||||
20,699,000 | Florida East Coast Holdings Corp. 6.7500%, 5/1/19 (144A) | 20,750,747 | ||||||||
18,392,000 | Florida East Coast Holdings Corp. 9.7500%, 5/1/20 (144A) | 17,426,420 | ||||||||
7,043,000 | Navios Maritime Holdings, Inc. / Navios Maritime Finance II US, Inc. 8.1250%, 2/15/19 | 5,528,755 | ||||||||
1,166,000 | Navios Maritime Holdings, Inc. / Navios Maritime Finance II US, Inc. 7.3750%, 1/15/22 (144A) | 1,010,048 | ||||||||
7,536,000 | Watco Cos. LLC / Watco Finance Corp. 6.3750%, 4/1/23 (144A) | 7,630,200 | ||||||||
25,080,000 | XPO Logistics, Inc. 7.8750%, 9/1/19 (144A) | 26,800,488 | ||||||||
89,166,808 | ||||||||||
Total Corporate Bonds (cost $1,755,202,478) | 1,745,913,267 | |||||||||
Preferred Stocks – 0.5% | ||||||||||
Household Durables – 0.2% | ||||||||||
29,641 | William Lyon Homes, 6.5000% | $ | 3,753,292 | |||||||
Pharmaceuticals – 0.1% | ||||||||||
1,785 | Allergan PLC, 5.5000% | 1,861,005 | ||||||||
Wireless Telecommunication Services – 0.2% | ||||||||||
79,900 | T-Mobile US, Inc., 5.5000% | 5,393,250 | ||||||||
Total Preferred Stocks (cost $8,744,100) | 11,007,547 | |||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Janus High-Yield Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Investment Companies – 8.6% | ||||||||||
Money Markets – 8.6% | ||||||||||
182,533,818 | Janus Cash Liquidity Fund LLC, 0.1291%°°,£ (cost $182,533,818) | $ | 182,533,818 | |||||||
Total Investments (total cost $2,095,862,395) – 98.5% | 2,087,854,354 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 1.5% | 31,879,983 | |||||||||
Net Assets – 100% | $ | 2,119,734,337 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States | $ | 1,822,986,964 | 87 | .3% | ||||
Luxembourg | 65,672,781 | 3 | .1 | |||||
Brazil | 43,088,749 | 2 | .1 | |||||
United Kingdom | 42,157,540 | 2 | .0 | |||||
Germany | 41,796,258 | 2 | .0 | |||||
Greece | 30,492,562 | 1 | .5 | |||||
Canada | 16,465,770 | 0 | .8 | |||||
Netherlands | 14,800,500 | 0 | .7 | |||||
Guernsey | 10,393,230 | 0 | .5 | |||||
Total | $ | 2,087,854,354 | 100 | .0% | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
12 | JUNE 30, 2015
Table of Contents
Notes to Schedule of Investments and Other Information
Barclays U.S. Corporate High-Yield Bond Index | Measures the U.S. dollar-denominated, high yield, fixed-rate corporate bond market. | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
PLC | Public Limited Company | |
ULC | Unlimited Liability Company |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. These securities have been determined to be liquid under guidelines established by the Board of Trustees. The total value of 144A securities as of the year ended June 30, 2015 is indicated in the table below: |
Value as a % | ||||||||||
Fund | Value | of Net Assets | ||||||||
Janus High-Yield Fund | $ | 987,859,340 | 46.6 | % | ||||||
* | 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 June 30, 2015, is noted below. |
Fund | Aggregate Value | |||||
Janus High-Yield Fund | $54,254,921 | |||||
‡ | 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 year end. | |
°° | Rate shown is the 7-day yield as of June 30, 2015. | |
§ | Schedule of Restricted and Illiquid Securities (as of June 30, 2015) |
Acquisition | Acquisition | Value as a | ||||||||||||
Date | Cost | Value | % of Net Assets | |||||||||||
Janus High-Yield Fund | ||||||||||||||
ADS Tactical, Inc., 11.0000%, 4/1/18 | 3/22/11 – 8/5/14 | $ | 41,682,236 | $ | 43,024,989 | 2.0 | % | |||||||
The Fund has registration rights for certain restricted securities held as of June 30, 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 year ended June 30, 2015. Unless otherwise indicated, all information in the table is for the year ended June 30, 2015. |
Share | Share | |||||||||||||||
Balance | Balance | Realized | Dividend | Value | ||||||||||||
at 6/30/14 | Purchases | Sales | at 6/30/15 | Gain/(Loss) | Income | at 6/30/15 | ||||||||||
Janus High-Yield Fund | ||||||||||||||||
Janus Cash Liquidity Fund LLC | 110,274,829 | 1,667,597,989 | (1,595,339,000) | 182,533,818 | $– | $141,208 | $182,533,818 | |||||||||
Janus Investment Fund | 13
Table of Contents
Notes to Schedule of Investments and Other Information (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 June 30, 2015. See Notes to Consolidated Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | |||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||
Janus High-Yield Fund | ||||||||
Assets | ||||||||
Investments in Securities: | ||||||||
Asset-Backed/Commercial Mortgage-Backed Securities | $ – | $ 32,403,777 | $– | |||||
Bank Loans and Mezzanine Loans | – | 94,071,193 | – | |||||
Common Stocks | 21,924,752 | – | – | |||||
Corporate Bonds | – | 1,745,913,267 | – | |||||
Preferred Stocks | – | 11,007,547 | – | |||||
Investment Companies | – | 182,533,818 | – | |||||
Total Assets | $21,924,752 | $2,065,929,602 | $– | |||||
14 | JUNE 30, 2015
Table of Contents
Statement of Assets and Liabilities
Janus | ||||
As of June 30, 2015 | High-Yield Fund | |||
Assets: | ||||
Investments, at cost | $ | 2,095,862,395 | ||
Unaffiliated investments, at value | $ | 1,905,320,536 | ||
Affiliated investments, at value | 182,533,818 | |||
Cash | 263,847 | |||
Non-interested Trustees’ deferred compensation | 42,220 | |||
Receivables: | ||||
Investments sold | 12,456,075 | |||
Fund shares sold | 2,188,351 | |||
Dividends from affiliates | 16,872 | |||
Interest | 33,716,036 | |||
Other assets | 11,589 | |||
Total Assets | 2,136,549,344 | |||
Liabilities: | ||||
Payables: | ||||
Investments purchased | 10,345,000 | |||
Fund shares repurchased | 3,986,459 | |||
Dividends | 594,665 | |||
Advisory fees | 998,683 | |||
Fund administration fees | 16,824 | |||
Transfer agent fees and expenses | 475,222 | |||
12b-1 Distribution and shareholder servicing fees | 125,780 | |||
Non-interested Trustees’ fees and expenses | 13,943 | |||
Non-interested Trustees’ deferred compensation fees | 42,220 | |||
Accrued expenses and other payables | 216,211 | |||
Total Liabilities | 16,815,007 | |||
Net Assets | $ | 2,119,734,337 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statement of Assets and Liabilities (continued)
Janus | ||||
As of June 30, 2015 | High-Yield Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 2,204,095,902 | ||
Undistributed net investment income/(loss) | 450,021 | |||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | (76,814,129) | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (7,997,457) | |||
Total Net Assets | $ | 2,119,734,337 | ||
Net Assets - Class A Shares | $ | 185,912,366 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 21,732,788 | |||
Net Asset Value Per Share(1) | $ | 8.55 | ||
Maximum Offering Price Per Share(2) | $ | 8.98 | ||
Net Assets - Class C Shares | $ | 61,022,553 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 7,129,914 | |||
Net Asset Value Per Share(1) | $ | 8.56 | ||
Net Assets - Class D Shares | $ | 353,037,020 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 41,258,235 | |||
Net Asset Value Per Share | $ | 8.56 | ||
Net Assets - Class I Shares | $ | 281,687,465 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 32,909,517 | |||
Net Asset Value Per Share | $ | 8.56 | ||
Net Assets - Class N Shares | $ | 14,751,107 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,723,505 | |||
Net Asset Value Per Share | $ | 8.56 | ||
Net Assets - Class R Shares | $ | 1,630,947 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 190,724 | |||
Net Asset Value Per Share | $ | 8.55 | ||
Net Assets - Class S Shares | $ | 2,785,469 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 324,925 | |||
Net Asset Value Per Share | $ | 8.57 | ||
Net Assets - Class T Shares | $ | 1,218,907,410 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 142,428,476 | |||
Net Asset Value Per Share | $ | 8.56 |
(1) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(2) | Maximum offering price is computed at 100/95.25 of net asset value. |
See Notes to Financial Statements.
16 | JUNE 30, 2015
Table of Contents
Statement of Operations
Janus | ||||
For the year ended June 30, 2015 | High-Yield Fund | |||
Investment Income: | ||||
Interest | $ | 153,154,071 | ||
Dividends | 552,367 | |||
Dividends from affiliates | 141,208 | |||
Other income | 1,795,740 | |||
Total Investment Income | 155,643,386 | |||
Expenses: | ||||
Advisory fees | 13,170,743 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 659,638 | |||
Class C Shares | 686,536 | |||
Class R Shares | 8,220 | |||
Class S Shares | 10,546 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 447,510 | |||
Class R Shares | 4,110 | |||
Class S Shares | 10,546 | |||
Class T Shares | 3,264,462 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 281,374 | |||
Class C Shares | 48,553 | |||
Class I Shares | 246,893 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 30,558 | |||
Class C Shares | 10,098 | |||
Class D Shares | 76,645 | |||
Class I Shares | 15,087 | |||
Class N Shares | 140 | |||
Class R Shares | 153 | |||
Class S Shares | 161 | |||
Class T Shares | 12,622 | |||
Shareholder reports expense | 171,355 | |||
Registration fees | 199,016 | |||
Custodian fees | 15,692 | |||
Professional fees | 74,401 | |||
Non-interested Trustees’ fees and expenses | 48,981 | |||
Fund administration fees | 210,536 | |||
Other expenses | 572,590 | |||
Total Expenses | 20,277,166 | |||
Net Expenses | 20,277,166 | |||
Net Investment Income/(Loss) | 135,366,220 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | (68,110,496) | |||
Total Net Realized Gain/(Loss) on Investments | (68,110,496) | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (115,426,871) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (115,426,871) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (48,171,147) |
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Statements of Changes in Net Assets
Janus | ||||||||
High-Yield Fund | ||||||||
For each year ended June 30 | 2015 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 135,366,220 | $ | 156,586,474 | ||||
Net realized gain/(loss) on investments | (68,110,496) | 49,425,624 | ||||||
Change in unrealized net appreciation/depreciation | (115,426,871) | 86,063,398 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (48,171,147) | 292,075,496 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income | ||||||||
Class A Shares | (15,050,171) | (20,154,186) | ||||||
Class C Shares | (3,416,552) | (4,024,097) | ||||||
Class D Shares | (22,007,969) | (23,122,112) | ||||||
Class I Shares | (18,660,355) | (24,771,637) | ||||||
Class N Shares | (584,822) | (571,198) | ||||||
Class R Shares | (87,174) | (106,419) | ||||||
Class S Shares | (234,687) | (391,478) | ||||||
Class T Shares | (75,836,382) | (83,957,644) | ||||||
Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | (6,528,274) | (7,916,746) | ||||||
Class C Shares | (1,478,907) | (1,843,182) | ||||||
Class D Shares | (8,104,546) | (8,844,817) | ||||||
Class I Shares | (5,775,085) | (9,707,997) | ||||||
Class N Shares | (155,018) | (193,478) | ||||||
Class R Shares | (37,278) | (42,848) | ||||||
Class S Shares | (97,519) | (164,302) | ||||||
Class T Shares | (27,775,564) | (32,911,493) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (185,830,303) | (218,723,634) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 119,980,312 | 152,372,084 | ||||||
Class C Shares | 9,735,773 | 9,541,692 | ||||||
Class D Shares | 49,453,442 | 81,734,897 | ||||||
Class I Shares | 290,993,665 | 401,297,463 | ||||||
Class N Shares | 29,676,344 | 15,911,616 | ||||||
Class R Shares | 604,099 | 1,237,462 | ||||||
Class S Shares | 855,670 | 1,082,970 | ||||||
Class T Shares | 306,647,536 | 362,634,354 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 20,604,662 | 26,759,991 | ||||||
Class C Shares | 4,278,593 | 5,146,415 | ||||||
Class D Shares | 25,843,267 | 27,622,222 | ||||||
Class I Shares | 20,840,136 | 30,330,687 | ||||||
Class N Shares | 625,526 | 634,635 | ||||||
Class R Shares | 79,839 | 97,794 | ||||||
Class S Shares | 331,306 | 554,921 | ||||||
Class T Shares | 102,238,992 | 115,063,168 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (276,080,618) | (158,574,789) | ||||||
Class C Shares | (22,470,624) | (20,397,677) | ||||||
Class D Shares | (91,626,606) | (75,358,390) | ||||||
Class I Shares | (477,134,818) | (199,150,744) | ||||||
Class N Shares | (33,832,548) | (4,152,189) | ||||||
Class R Shares | (806,626) | (1,139,884) | ||||||
Class S Shares | (3,017,762) | (3,695,044) | ||||||
Class T Shares | (530,268,497) | (361,235,745) |
See footnotes at the end of the Statements.
See Notes to Financial Statements.
18 | JUNE 30, 2015
Table of Contents
Janus | ||||||||
High-Yield Fund | ||||||||
For each year ended June 30 | 2015 | 2014 | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (452,448,937) | 408,317,909 | ||||||
Net Increase/(Decrease) in Net Assets | (686,450,387) | 481,669,771 | ||||||
Net Assets: | ||||||||
Beginning of period | 2,806,184,724 | 2,324,514,953 | ||||||
End of period | $ | 2,119,734,337 | $ | 2,806,184,724 | ||||
Undistributed Net Investment Income/(Loss) | $ | 450,021 | $ | 576,302 |
See Notes to Financial Statements.
Janus Investment Fund | 19
Table of Contents
Financial Highlights
Class A Shares
Janus High-Yield Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $9.41 | $9.14 | $9.00 | $9.13 | $8.45 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.51(1) | 0.55(1) | 0.57 | 0.62 | 0.65 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.67) | 0.50 | 0.15 | (0.13) | 0.68 | |||||||||||||||||
Total from Investment Operations | (0.16) | 1.05 | 0.72 | 0.49 | 1.33 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.50) | (0.55) | (0.57) | (0.62) | (0.65) | |||||||||||||||||
Distributions (from capital gains) | (0.20) | (0.23) | (0.01) | –(2) | – | |||||||||||||||||
Total Dividends and Distributions | (0.70) | (0.78) | (0.58) | (0.62) | (0.65) | |||||||||||||||||
Net Asset Value, End of Period | $8.55 | $9.41 | $9.14 | $9.00 | $9.13 | |||||||||||||||||
Total Return | (1.61)% | 11.93% | 8.12% | 5.71% | 16.09%(3) | |||||||||||||||||
Net Assets, End of Period (in thousands) | $185,912 | $352,140 | $321,554 | $265,944 | $171,976 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $263,855 | $338,923 | $298,736 | $212,564 | $143,277 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.98% | 1.01% | 0.97% | 0.99% | 0.92% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.98% | 1.01% | 0.97% | 0.99% | 0.92% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 5.69% | 5.93% | 6.10% | 6.91% | 7.23% | |||||||||||||||||
Portfolio Turnover Rate | 71% | 67% | 93% | 61% | 92% |
Class C Shares
Janus High-Yield Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $9.41 | $9.14 | $9.00 | $9.13 | $8.45 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.44(1) | 0.48(1) | 0.50 | 0.55 | 0.59 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.65) | 0.51 | 0.15 | (0.12) | 0.68 | |||||||||||||||||
Total from Investment Operations | (0.21) | 0.99 | 0.65 | 0.43 | 1.27 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.44) | (0.49) | (0.50) | (0.56) | (0.59) | |||||||||||||||||
Distributions (from capital gains) | (0.20) | (0.23) | (0.01) | –(2) | – | |||||||||||||||||
Total Dividends and Distributions | (0.64) | (0.72) | (0.51) | (0.56) | (0.59) | |||||||||||||||||
Net Asset Value, End of Period | $8.56 | $9.41 | $9.14 | $9.00 | $9.13 | |||||||||||||||||
Total Return | (2.20)% | 11.13% | 7.31% | 4.93% | 15.30%(3) | |||||||||||||||||
Net Assets, End of Period (in thousands) | $61,023 | $76,294 | $79,726 | $78,392 | $78,456 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $68,654 | $77,004 | $84,174 | $73,801 | $76,507 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.70% | 1.73% | 1.72% | 1.72% | 1.61% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.70% | 1.73% | 1.72% | 1.72% | 1.61% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 4.96% | 5.21% | 5.36% | 6.19% | 6.57% | |||||||||||||||||
Portfolio Turnover Rate | 71% | 67% | 93% | 61% | 92% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. | |
(2) | Less than $0.005 on a per share basis. | |
(3) | Impact on performance due to reimbursement from advisor was 0.51%. |
See Notes to Financial Statements.
20 | JUNE 30, 2015
Table of Contents
Class D Shares
Janus High-Yield Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $9.41 | $9.14 | $9.00 | $9.13 | $8.45 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.52(1) | 0.57(1) | 0.59 | 0.64 | 0.67 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.65) | 0.51 | 0.15 | (0.13) | 0.68 | |||||||||||||||||
Total from Investment Operations | (0.13) | 1.08 | 0.74 | 0.51 | 1.35 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.52) | (0.58) | (0.59) | (0.64) | (0.67) | |||||||||||||||||
Distributions (from capital gains) | (0.20) | (0.23) | (0.01) | –(2) | – | |||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(3) | –(3) | |||||||||||||||||
Total Dividends and Distributions | (0.72) | (0.81) | (0.60) | (0.64) | (0.67) | |||||||||||||||||
Net Asset Value, End of Period | $8.56 | $9.41 | $9.14 | $9.00 | $9.13 | |||||||||||||||||
Total Return | (1.29)% | 12.20% | 8.33% | 5.94% | 16.28%(4) | |||||||||||||||||
Net Assets, End of Period (in thousands) | $353,037 | $405,861 | $360,924 | $328,700 | $317,038 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $372,925 | $373,985 | $361,587 | $310,872 | $292,765 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.77% | 0.77% | 0.77% | 0.76% | 0.76% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.77% | 0.77% | 0.77% | 0.76% | 0.76% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 5.88% | 6.16% | 6.30% | 7.15% | 7.41% | |||||||||||||||||
Portfolio Turnover Rate | 71% | 67% | 93% | 61% | 92% |
Class I Shares
Janus High-Yield Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $9.42 | $9.15 | $9.01 | $9.13 | $8.45 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.53(1) | 0.58(1) | 0.60 | 0.64 | 0.67 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.66) | 0.50 | 0.15 | (0.11) | 0.68 | |||||||||||||||||
Total from Investment Operations | (0.13) | 1.08 | 0.75 | 0.53 | 1.35 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.53) | (0.58) | (0.60) | (0.65) | (0.67) | |||||||||||||||||
Distributions (from capital gains) | (0.20) | (0.23) | (0.01) | –(2) | – | |||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(3) | –(3) | |||||||||||||||||
Total Dividends and Distributions | (0.73) | (0.81) | (0.61) | (0.65) | (0.67) | |||||||||||||||||
Net Asset Value, End of Period | $8.56 | $9.42 | $9.15 | $9.01 | $9.13 | |||||||||||||||||
Total Return | (1.32)% | 12.25% | 8.43% | 6.13% | 16.35%(4) | |||||||||||||||||
Net Assets, End of Period (in thousands) | $281,687 | $478,576 | $236,426 | $241,339 | $174,961 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $311,969 | $396,882 | $285,515 | $226,809 | $178,564 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.70% | 0.72% | 0.68% | 0.68% | 0.70% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.70% | 0.72% | 0.68% | 0.68% | 0.70% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 5.96% | 6.22% | 6.38% | 7.23% | 7.43% | |||||||||||||||||
Portfolio Turnover Rate | 71% | 67% | 93% | 61% | 92% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. | |
(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. | |
(4) | Impact on performance due to reimbursement from advisor was 0.51%. |
See Notes to Financial Statements.
Janus Investment Fund | 21
Table of Contents
Financial Highlights (continued)
Class N Shares
Janus High-Yield Fund | ||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
Net Asset Value, Beginning of Period | $9.41 | $9.14 | $9.01 | $8.92 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.53(2) | 0.58(2) | 0.60 | 0.06 | ||||||||||||||
Net realized and unrealized gain/(loss) | (0.64) | 0.51 | 0.14 | 0.08 | ||||||||||||||
Total from Investment Operations | (0.11) | 1.09 | 0.74 | 0.14 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | (0.54) | (0.59) | (0.60) | (0.05) | ||||||||||||||
Distributions (from capital gains) | (0.20) | (0.23) | (0.01) | – | ||||||||||||||
Total Dividends and Distributions | (0.74) | (0.82) | (0.61) | (0.05) | ||||||||||||||
Net Asset Value, End of Period | $8.56 | $9.41 | $9.14 | $9.01 | ||||||||||||||
Total Return* | (1.14)% | 12.37% | 8.38% | 1.63% | ||||||||||||||
Net Assets, End of Period (in thousands) | $14,751 | $19,353 | $6,738 | $4,392 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $9,715 | $9,055 | $8,788 | $3,390 | ||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||
Ratio of Gross Expenses** | 0.61% | 0.62% | 0.61% | 0.61% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.61% | 0.62% | 0.61% | 0.61% | ||||||||||||||
Ratio of Net Investment Income/(Loss)** | 5.99% | 6.29% | 6.47% | 6.86% | ||||||||||||||
Portfolio Turnover Rate | 71% | 67% | 93% | 61% |
Class R Shares
Janus High-Yield Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $9.41 | $9.14 | $9.00 | $9.13 | $8.45 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.47(2) | 0.52(2) | 0.53 | 0.59 | 0.61 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.66) | 0.50 | 0.15 | (0.13) | 0.68 | |||||||||||||||||
Total from Investment Operations | (0.19) | 1.02 | 0.68 | 0.46 | 1.29 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.47) | (0.52) | (0.53) | (0.59) | (0.61) | |||||||||||||||||
Distributions (from capital gains) | (0.20) | (0.23) | (0.01) | –(3) | – | |||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(4) | –(4) | |||||||||||||||||
Total Dividends and Distributions | (0.67) | (0.75) | (0.54) | (0.59) | (0.61) | |||||||||||||||||
Net Asset Value, End of Period | $8.55 | $9.41 | $9.14 | $9.00 | $9.13 | |||||||||||||||||
Total Return | (2.00)% | 11.52% | 7.68% | 5.38% | 15.62%(5) | |||||||||||||||||
Net Assets, End of Period (in thousands) | $1,631 | $1,918 | $1,666 | $1,082 | $1,100 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $1,644 | $1,899 | $1,459 | $1,081 | $997 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.37% | 1.37% | 1.37% | 1.29% | 1.33% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.37% | 1.37% | 1.37% | 1.29% | 1.33% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 5.28% | 5.58% | 5.67% | 6.64% | 6.85% | |||||||||||||||||
Portfolio Turnover Rate | 71% | 67% | 93% | 61% | 92% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from May 31, 2012 (inception date) through June 30, 2012. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year. | |
(3) | Less than $0.005 on a per share basis. | |
(4) | Redemption fees aggregated less than $0.005 on a per share basis. Redemption fees were eliminated effective April 2, 2012. | |
(5) | Impact on performance due to reimbursement from advisor was 0.50%. |
See Notes to Financial Statements.
22 | JUNE 30, 2015
Table of Contents
Class S Shares
Janus High-Yield Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $9.43 | $9.16 | $9.02 | $9.15 | $8.47 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.49(1) | 0.54(1) | 0.56 | 0.61 | 0.63 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.66) | 0.51 | 0.15 | (0.13) | 0.68 | |||||||||||||||||
Total from Investment Operations | (0.17) | 1.05 | 0.71 | 0.48 | 1.31 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.49) | (0.55) | (0.56) | (0.61) | (0.63) | |||||||||||||||||
Distributions (from capital gains) | (0.20) | (0.23) | (0.01) | –(2) | – | |||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(3) | –(3) | |||||||||||||||||
Total Dividends and Distributions | (0.69) | (0.78) | (0.57) | (0.61) | (0.63) | |||||||||||||||||
Net Asset Value, End of Period | $8.57 | $9.43 | $9.16 | $9.02 | $9.15 | |||||||||||||||||
Total Return | (1.73)% | 11.80% | 7.95% | 5.57% | 15.83%(4) | |||||||||||||||||
Net Assets, End of Period (in thousands) | $2,785 | $5,045 | $6,901 | $6,213 | $7,015 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $4,219 | $6,694 | $6,893 | $5,959 | $7,079 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.12% | 1.12% | 1.12% | 1.11% | 1.13% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.12% | 1.11% | 1.12% | 1.11% | 1.13% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 5.54% | 5.83% | 5.96% | 6.80% | 7.05% | |||||||||||||||||
Portfolio Turnover Rate | 71% | 67% | 93% | 61% | 92% |
Class T Shares
Janus High-Yield Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $9.41 | $9.14 | $9.00 | $9.13 | $8.45 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.51(1) | 0.57(1) | 0.58 | 0.63 | 0.65 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.64) | 0.50 | 0.15 | (0.13) | 0.69 | |||||||||||||||||
Total from Investment Operations | (0.13) | 1.07 | 0.73 | 0.50 | 1.34 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.52) | (0.57) | (0.58) | (0.63) | (0.66) | |||||||||||||||||
Distributions (from capital gains) | (0.20) | (0.23) | (0.01) | –(2) | – | |||||||||||||||||
Redemption fees | N/A | N/A | N/A | –(3) | –(3) | |||||||||||||||||
Total Dividends and Distributions | (0.72) | (0.80) | (0.59) | (0.63) | (0.66) | |||||||||||||||||
Net Asset Value, End of Period | $8.56 | $9.41 | $9.14 | $9.00 | $9.13 | |||||||||||||||||
Total Return | (1.38)% | 12.09% | 8.23% | 5.83% | 16.14%(5) | |||||||||||||||||
Net Assets, End of Period (in thousands) | $1,218,907 | $1,466,998 | $1,310,580 | $1,269,091 | $1,060,678 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $1,305,785 | $1,378,198 | $1,401,785 | $1,107,108 | $875,192 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.87% | 0.87% | 0.87% | 0.86% | 0.88% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.87% | 0.86% | 0.86% | 0.86% | 0.88% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 5.79% | 6.07% | 6.21% | 7.05% | 7.28% | |||||||||||||||||
Portfolio Turnover Rate | 71% | 67% | 93% | 61% | 92% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. | |
(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. | |
(4) | Impact on performance due to reimbursement from advisor was 0.50%. | |
(5) | Impact on performance due to reimbursement from advisor was 0.51%. |
See Notes to Financial Statements.
Janus Investment Fund | 23
Table of Contents
Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
Janus High-Yield Fund (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in income-producing securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
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 evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of June 30, 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 year. 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
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Notes to Financial Statements (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, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
Dividends are declared daily and distributed monthly for the Fund. Realized capital gains, if any, are declared and distributed in December. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
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 Fund may be invested in lower-rated debt securities that have a higher risk of default or loss of value since
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these securities may be sensitive to economic changes, political changes or adverse developments specific to the issuer.
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient 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.
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.
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Notes to Financial Statements (continued)
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 June 30, 2015.
• | Bank Loans – Bank loans are obligations of companies or other entities entered into in connection with recapitalizations, acquisitions, and refinancings. The Fund’s investments in bank loans are generally acquired as a participation interest in, or assignment of, loans originated by a lender or other financial institution. These investments may include institutionally-traded floating and fixed-rate debt securities. | |
• | Floating Rate Loans – Floating rate loans are debt securities that have floating interest rates, that adjust periodically, and are tied to a benchmark lending rate, such as the London Interbank Offered Rate (“LIBOR”). In other cases, the lending rate could be tied to the prime rate offered by one or more major U.S. banks or the rate paid on large certificates of deposit traded in the secondary markets. If the benchmark lending rate changes, the rate payable to lenders under the loan will change at the next scheduled adjustment date specified in the loan agreement. Floating rate loans are typically issued to companies (“borrowers”) in connection with recapitalizations, acquisitions, and refinancings. Floating rate loan investments are generally below investment grade. Senior floating rate loans are secured by specific collateral of a borrower and are senior in the borrower’s capital structure. The senior position in the borrower’s capital structure generally gives holders of senior loans a claim on certain of the borrower’s assets that is senior to subordinated debt and preferred and common stock in the case of a borrower’s default. Floating rate loan investments may involve foreign borrowers, and investments may be denominated in foreign currencies. Floating rate loans often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The Fund may invest in obligations of borrowers who are in bankruptcy proceedings. While the Fund generally expects to invest in fully funded term loans, certain of the loans in which the Fund may invest include revolving loans, bridge loans, and delayed draw term loans. |
Purchasers of floating rate loans may pay and/or receive certain fees. The Fund may receive fees such as covenant waiver fees or prepayment penalty fees. The Fund may pay fees such as facility fees. Such fees may affect the Fund’s return. |
• | Mezzanine Loans – Mezzanine loans are secured by the stock of the company that owns the assets. Mezzanine loans are a hybrid of debt and equity financing that is typically used to fund the expansion of existing companies. A mezzanine loan is composed of debt capital that gives the lender the right to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. Mezzanine loans typically are the most subordinated debt obligation in an issuer’s capital structure. |
Mortgage- and Asset-Backed Securities
Mortgage- and asset-backed securities represent interests in “pools” of commercial or residential mortgages or other assets, including consumer loans or receivables. The Fund may purchase fixed or variable rate commercial or residential 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 Mae and Freddie Mac securities 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,
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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 guarantors or insurers will meet their obligations.
Mortgage- and asset-backed securities are also subject to extension risk, which is the risk that rising interest rates could cause mortgages or other obligations underlying these securities to be paid more slowly than expected, increasing the Fund’s sensitivity to interest rate changes and causing its price to decline.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Restricted Security Transactions
Restricted securities held by the Fund may not be sold except in exempt transactions or in a public offering registered under the Securities Act of 1933, as amended. The risk of investing in such securities is generally greater than the risk of investing in the securities of widely held, publicly traded companies. Lack of a secondary market and resale restrictions may result in the inability of the Fund to sell a security at a fair price and may substantially delay the sale of the security. In addition, these securities may exhibit greater price volatility than securities for which secondary markets exist.
When-Issued and Delayed Delivery Securities
The Fund may purchase or sell securities on a when-issued or delayed delivery basis. When-issued and delayed delivery securities in which the Fund may invest include U.S. Treasury Securities, municipal bonds, bank loans, and other similar instruments. The price of the underlying securities and date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Losses may arise due to changes in the market value of the securities or from the inability of counterparties to meet the terms of the contract. In connection with such purchases, the Fund may hold liquid assets as collateral with the Fund’s custodian sufficient to cover the purchase price.
3. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | Contractual | |||||||||
Net Assets | Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Janus High-Yield Fund | First $ | 300 Million | 0.65 | |||||||
Over $ | 300 Million | 0.55 | ||||||||
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, Class R Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
Janus High-Yield Fund | 0.69 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the
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Notes to Financial Statements (continued)
provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class R Shares, Class S Shares, and Class T Shares for providing or procuring administrative services to investors in Class R Shares, Class S Shares, and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class R Shares, Class S Shares, and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class R Shares, Class S Shares, and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, of up to 0.50% of the Class R Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
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
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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 $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the year ended June 30, 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 June 30, 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 year ended June 30, 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 $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 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 product compliant with Rule 2a-7 under the 1940 Act. There are no restrictions on the Fund’s ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Fund to Janus Cash Liquidity Fund LLC. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the year ended June 30, 2015 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 4.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the year ended June 30, 2015, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Janus High-Yield Fund | $ | 6,363 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the year ended June 30, 2015, redeeming shareholders of Class A Shares paid the following CDSCs to Janus Distributors:
Fund (Class A Shares) | CDSC | |||||
Janus High-Yield Fund | $ | 3,494 | ||||
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
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Notes to Financial Statements (continued)
year ended June 30, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Janus High-Yield Fund | $ | 3,499 | ||||
4. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation, derivatives, and foreign currency contract adjustments. 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 Fund has elected to defer post-October losses and qualified late-year losses as noted in the table below. These losses will be deferred for tax purposes and recognized during the next fiscal year.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
Janus High-Yield Fund | $494,220 | $– | $– | $– | $(76,390,724) | $(31,635) | $(8,433,426) | ||||||||||||||||||||||||
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 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.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
Janus High-Yield Fund | $2,096,287,780 | $36,967,877 | $(45,401,303) | |||||||||||
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. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the fiscal year ended June 30, 2015
Distributions | |||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | ||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | |||||||||||||||
Janus High-Yield Fund | $147,258,304 | $38,571,999 | $– | $– | |||||||||||||||
For the fiscal year ended June 30, 2014
Distributions | |||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | ||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | |||||||||||||||
Janus High-Yield Fund | $158,690,779 | $60,032,855 | $– | $– | |||||||||||||||
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Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
Janus High-Yield Fund | $ | – | $ | 385,611 | $ | (385,611) | ||||||||
5. | Capital Share Transactions |
Janus High-Yield Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 13,377,239 | 16,379,638 | ||||||||
Reinvested dividends and distributions | 2,351,184 | 2,886,495 | ||||||||
Shares repurchased | (31,415,743) | (17,021,962) | ||||||||
Net Increase/(Decrease) in Fund Shares | (15,687,320) | 2,244,171 | ||||||||
Shares Outstanding, Beginning of Period | 37,420,108 | 35,175,937 | ||||||||
Shares Outstanding, End of Period | 21,732,788 | 37,420,108 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 1,092,131 | 1,025,930 | ||||||||
Reinvested dividends and distributions | 489,211 | 555,288 | ||||||||
Shares repurchased | (2,555,809) | (2,195,195) | ||||||||
Net Increase/(Decrease) in Fund Shares | (974,467) | (613,977) | ||||||||
Shares Outstanding, Beginning of Period | 8,104,381 | 8,718,358 | ||||||||
Shares Outstanding, End of Period | 7,129,914 | 8,104,381 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 5,553,544 | 8,784,135 | ||||||||
Reinvested dividends and distributions | 2,953,202 | 2,978,903 | ||||||||
Shares repurchased | (10,371,574) | (8,118,551) | ||||||||
Net Increase/(Decrease) in Fund Shares | (1,864,828) | 3,644,487 | ||||||||
Shares Outstanding, Beginning of Period | 43,123,063 | 39,478,576 | ||||||||
Shares Outstanding, End of Period | 41,258,235 | 43,123,063 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 32,523,800 | 43,093,850 | ||||||||
Reinvested dividends and distributions | 2,374,760 | 3,267,472 | ||||||||
Shares repurchased | (52,818,254) | (21,384,510) | ||||||||
Net Increase/(Decrease) in Fund Shares | (17,919,694) | 24,976,812 | ||||||||
Shares Outstanding, Beginning of Period | 50,829,211 | 25,852,399 | ||||||||
Shares Outstanding, End of Period | 32,909,517 | 50,829,211 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 3,260,110 | 1,700,178 | ||||||||
Reinvested dividends and distributions | 71,638 | 68,487 | ||||||||
Shares repurchased | (3,664,244) | (449,478) | ||||||||
Net Increase/(Decrease) in Fund Shares | (332,496) | 1,319,187 | ||||||||
Shares Outstanding, Beginning of Period | 2,056,001 | 736,814 | ||||||||
Shares Outstanding, End of Period | 1,723,505 | 2,056,001 |
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Notes to Financial Statements (continued)
Janus High-Yield Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class R Shares: | ||||||||||
Shares sold | 68,962 | 133,266 | ||||||||
Reinvested dividends and distributions | 9,141 | 10,552 | ||||||||
Shares repurchased | (91,296) | (122,262) | ||||||||
Net Increase/(Decrease) in Fund Shares | (13,193) | 21,556 | ||||||||
Shares Outstanding, Beginning of Period | 203,917 | 182,361 | ||||||||
Shares Outstanding, End of Period | 190,724 | 203,917 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 96,318 | 116,163 | ||||||||
Reinvested dividends and distributions | 37,757 | 59,764 | ||||||||
Shares repurchased | (344,118) | (394,394) | ||||||||
Net Increase/(Decrease) in Fund Shares | (210,043) | (218,467) | ||||||||
Shares Outstanding, Beginning of Period | 534,968 | 753,435 | ||||||||
Shares Outstanding, End of Period | 324,925 | 534,968 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 34,416,427 | 38,970,092 | ||||||||
Reinvested dividends and distributions | 11,680,800 | 12,406,893 | ||||||||
Shares repurchased | (59,513,312) | (38,864,180) | ||||||||
Net Increase/(Decrease) in Fund Shares | (13,416,085) | 12,512,805 | ||||||||
Shares Outstanding, Beginning of Period | 155,844,561 | 143,331,756 | ||||||||
Shares Outstanding, End of Period | 142,428,476 | 155,844,561 |
6. | Purchases and Sales of Investment Securities |
For the year ended June 30, 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 High-Yield Fund | $1,551,022,146 | $2,122,445,637 | $– | $– | ||||||
7. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of Janus High-Yield Fund:
of Janus High-Yield Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Janus High-Yield Fund (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
Janus Investment Fund | 35
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (toll free); (ii) on the Fund’s website at janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding the Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through janus.com/proxyvoting and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Fund files its complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Fund’s Form N-Q: (i) is available on the SEC’s website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-0020 (toll free).
APPROVAL OF ADVISORY AGREEMENTS DURING THE PERIOD
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, based on the Trustees’ evaluation of the information provided by Janus Capital, the subadvisers, and the independent fee consultant, as well as other information, the Trustees determined that the overall arrangements between each Fund and Janus Capital and each subadviser, as applicable, were fair and reasonable in light of the nature, extent and quality of the services provided by Janus Capital, its affiliates and the subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting, the Trustees unanimously approved the continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, for the period from either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
36 | JUNE 30, 2015
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providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
Janus Investment Fund | 37
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Additional Information (unaudited) (continued)
second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
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the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
Janus Investment Fund | 39
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Additional Information (unaudited) (continued)
quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s |
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underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and its limited performance history. |
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
In this regard, the independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 19% below the mean total expenses of their respective Lipper Expense Group peers and 29% below the mean total expenses for their Lipper Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 20% below the mean for their Expense Universes; and (4) Janus fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered how the total expenses for each share class of each Fund compared to the mean total expenses for its Lipper Expense Group peers and to mean total expenses for its Lipper Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus
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Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) the retained fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to retained fee margins in the industry.
The Trustees considered the fees for each Fund for its fiscal year ended in 2013, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses were equal to or below the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also |
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noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Perkins Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that |
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Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit. |
• | For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Preservation Series
• | For Janus Preservation Series – Global, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
• | For Janus Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes. |
Janus Aspen Series
• | For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses. |
• | For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that, although the Fund’s total expenses were above the peer group mean for its sole share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable limit. |
• | For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
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• | For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
• | For Janus Aspen Preservation Series – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. |
The Trustees reviewed information on the profitability to Janus Capital and its affiliates of their relationships with each Fund, as well as an explanation of the methodology utilized by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with the Funds and other clients. The Trustees also reviewed the financial statements and corporate structure of Janus Capital’s parent company. In their review, the Trustees considered whether Janus Capital and each subadviser receive adequate incentives to manage the Funds effectively. The Trustees recognized that profitability comparisons among fund managers are difficult because very little comparative information is publicly available, and the profitability of any fund manager is affected by numerous factors, including the organizational structure of the particular fund manager, the types of funds and other accounts it manages, possible other lines of business, the methodology for allocating expenses, and the fund manager’s capital structure and cost of capital. However, taking into account those factors and the analysis provided by the Trustees’ independent fee consultant, and based on the information available, the Trustees concluded that Janus Capital’s profitability with respect to each Fund in relation to the services rendered was not unreasonable.
In this regard, the independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
The Trustees concluded that the management fees and other compensation payable by each Fund to Janus Capital and its affiliates, as well as the fees paid by Janus Capital to the subadvisers of subadvised Funds, were reasonable in relation to the nature, extent, and quality of the services provided, taking into account the fees charged by other advisers for managing comparable mutual funds with similar strategies, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of the Funds increase. They noted that their independent fee consultant had provided analysis of economies of scale during prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, the base contractual management fee rate paid by most of the Funds, before any adjustment for performance, if applicable, was below the mean contractual management fee rate of the Fund’s peer group identified by an independent data provider. They also noted that for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of many of the Funds have declined in the past few years, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
In this regard, the independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, it could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief
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that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
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Useful Information About Your Fund Report (unaudited)
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 June 30, 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
48 | JUNE 30, 2015
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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.
Janus Investment Fund | 49
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Designation Requirements (unaudited)
For federal income tax purposes, the Fund designated the following for the year ended June 30, 2015:
Capital Gain Distributions
Fund | ||||||||||
Janus High-Yield Fund | $ | 38,571,999 | ||||||||
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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
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OFFICERS
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
Gibson Smith 151 Detroit Street Denver, CO 80206 DOB: 1968 | Executive Vice President and Co-Portfolio Manager Janus High-Yield Fund | 12/03-Present | Chief Investment Officer Fixed Income and Executive Vice President of Janus Capital; Director of Perkins Investment Management LLC; and Portfolio Manager for other Janus accounts. Formerly, Executive Vice President of Janus Distributors LLC and Janus Services LLC (2007-2013). | |||
Darrell Watters 151 Detroit Street Denver, CO 80206 DOB: 1963 | Executive Vice President and Co-Portfolio Manager Janus High-Yield Fund | 7/08-Present | Vice President of Janus Capital and Portfolio Manager for other Janus accounts. | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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Trustees and Officers (unaudited) (continued)
OFFICERS (continued)
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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Notes
Janus Investment Fund | 57
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Janus provides access to a wide range of investment disciplines.
Alternative
Janus alternative funds seek to deliver strong risk-adjusted returns over a full market cycle with lower correlation to equity markets than traditional investments.
Asset Allocation
Janus’ asset allocation funds utilize our fundamental, bottom-up research to balance risk over the long term. From fund options that meet investors’ risk tolerance and objectives to a method that incorporates non-traditional investment choices to seek non-correlated sources of risk and return, Janus’ asset allocation funds aim to allocate risk more effectively.
Fixed Income
Janus fixed income funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek capital preservation and liquidity with current income as a secondary objective.
Global & International
Janus global and international funds seek to leverage Janus’ research capabilities by taking advantage of inefficiencies in foreign markets, where accurate information and analytical insight are often at a premium.
Growth & Core
Janus growth funds focus on companies believed to be the leaders in their respective industries, with solid management teams, expanding market share, margins and efficiencies. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical funds seek to outperform their respective indices while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH (a Janus subsidiary), these funds use a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
For more information about our funds, contact your investment professional or go to janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus).
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-0815-94028 | 125-02-93026 08-15 |
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annual report
June 30, 2015
Janus Money Market Fund
Table of Contents
Janus Money Market Fund
1 | ||
5 | ||
6 | ||
7 | ||
8 | ||
9 | ||
10 | ||
16 | ||
17 | ||
28 | ||
30 |
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Janus Money Market Fund (unaudited)
Eric Thorderson portfolio manager |
Janus Money Market Fund
Average Annual Total Return | ||
For the periods ended June 30, 2015 | ||
Class D Shares(1) | ||
1 Year | 0.00% | |
5 Year | 0.00% | |
10 Year | 1.31% | |
Since Inception (February 14, 1995) | 2.55% | |
Class T Shares | ||
1 Year | 0.00% | |
5 Year | 0.00% | |
10 Year | 1.31% | |
Since Inception (February 14, 1995) | 2.55% |
Seven-Day Current Yield | ||
Class D Shares(1) | ||
With Reimbursement | 0.00% | |
Without Reimbursement | -0.41% | |
Class T Shares | ||
With Reimbursement | 0.00% | |
Without Reimbursement | -0.43% | |
Expense Ratios | ||
Per the October 28, 2014 prospectuses | ||
Class D Shares(1) | ||
Total Annual Fund Operating Expenses | 0.66% | |
Class T Shares | ||
Total Annual Fund Operating Expenses | 0.68% |
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. For the most recent month-end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the money market fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
Janus Capital has voluntarily agreed to waive one-half of its investment advisory fee and such additional fees to the extent necessary to assist the Fund in attempting to maintain a yield of at least 0.00%. Such reimbursements could be changed or terminated at any time.
Class D Shares of the Fund commenced operations on February 16, 2010. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares, the initial share class (renamed Class T Shares effective February 16, 2010), calculated using the fees and expenses in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
If Class D Shares of the Fund had been available during periods prior to February 16, 2010, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of Class D Shares reflects the fees and expenses of Class D Shares, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Returns include reinvestment of all dividends and distributions.
The yield more closely reflects the current earnings of the Fund than the total return.
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
See “Useful Information About Your Fund Report.”
(1) | Closed to certain new investors. |
Janus Investment Fund | 1
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Janus Money Market Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in either share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,000.00 | $ | 0.74 | $ | 1,000.00 | $ | 1,024.05 | $ | 0.75 | 0.15% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,000.00 | $ | 0.74 | $ | 1,000.00 | $ | 1,024.05 | $ | 0.75 | 0.15% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 181/365 (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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Janus Money Market Fund
Schedule of Investments
As of June 30, 2015
Principal Amount | Value | |||||||||
Certificates of Deposit – 24.3% | ||||||||||
$50,000,000 | Bank of Montreal, Chicago 0.1200%, 7/29/15 | $ | 50,000,000 | |||||||
25,000,000 | Canadian Imperial Bank of Commerce, New York 0.1400%, 7/27/15 | 25,000,000 | ||||||||
25,000,000 | Canadian Imperial Bank of Commerce, New York 0.1300%, 8/4/15 | 25,000,000 | ||||||||
55,000,000 | Sumitomo Mitsui Banking Corp., New York 0.1600%, 7/8/15 | 55,000,000 | ||||||||
30,000,000 | Svenska Handelsbanken, New York 0.2000%, 8/11/15 | 30,000,171 | ||||||||
30,300,000 | Toronto-Dominion Bank, New York 0.1600%, 8/10/15 | 30,300,000 | ||||||||
25,000,000 | Toronto-Dominion Bank, New York 0.2100%, 11/3/15 | 25,000,000 | ||||||||
15,000,000 | Wells Fargo Bank NA 0.2700%, 8/7/15 | 15,000,000 | ||||||||
15,000,000 | Wells Fargo Bank NA 0.2700%, 10/5/15 | 15,000,000 | ||||||||
10,000,000 | Wells Fargo Bank NA 0.2800%, 11/10/15 | 10,000,000 | ||||||||
Total Certificates of Deposit (amortized cost $280,300,171) | 280,300,171 | |||||||||
Commercial Paper – 38.7% | ||||||||||
10,000,000 | ANZ New Zealand Int’l, Ltd., London 0.1929%, 8/12/15 (Section 4(2)) | 9,997,801 | ||||||||
38,500,000 | Atlantic Asset Securitization LLC 0.1116%, 7/6/15 (Section 4(2)) | 38,499,412 | ||||||||
10,000,000 | Commonwealth Bank of Australia 0.1624%, 7/15/15 (Section 4(2)) | 9,999,384 | ||||||||
25,000,000 | Commonwealth Bank of Australia 0.1675%, 8/17/15 (Section 4(2)) | 24,994,614 | ||||||||
20,000,000 | Commonwealth Bank of Australia 0.2031%, 9/28/15 (Section 4(2)) | 19,990,110 | ||||||||
10,000,000 | HSBC Bank PLC 0.3153%, 8/5/15 (Section 4(2)) | 9,996,982 | ||||||||
5,000,000 | HSBC Bank PLC 0.4995%, 2/24/16 (Section 4(2)) | 4,983,792 | ||||||||
5,000,000 | HSBC Bank PLC 0.5099%, 4/11/16 (Section 4(2)) | 4,980,255 | ||||||||
15,000,000 | JP Morgan Securities LLC 0.2030%, 7/22/15 | 14,998,250 | ||||||||
10,000,000 | JP Morgan Securities LLC 0.3049%, 8/10/15 | 9,996,665 | ||||||||
3,000,000 | JP Morgan Securities LLC 0.3252%, 11/2/15 | 2,996,693 | ||||||||
25,000,000 | JP Morgan Securities LLC 0.3762%, 11/30/15 | 24,960,938 | ||||||||
25,000,000 | Manhattan Asset Funding Co. LLC 0.1217%, 7/6/15 (Section 4(2)) | 24,999,583 | ||||||||
20,000,000 | Manhattan Asset Funding Co. LLC 0.1421%, 7/9/15 (Section 4(2)) | 19,999,378 | ||||||||
10,000,000 | Manhattan Asset Funding Co. LLC 0.1421%, 7/14/15 (Section 4(2)) | 9,999,494 | ||||||||
10,000,000 | Nieuw Amsterdam Receivables Corp. 0.1421%, 7/6/15 (Section 4(2)) | 9,999,806 | ||||||||
20,000,000 | Nieuw Amsterdam Receivables Corp. 0.2336%, 7/7/15 (Section 4(2)) | 19,999,233 | ||||||||
10,000,000 | Nieuw Amsterdam Receivables Corp. 0.1827%, 8/11/15 (Section 4(2)) | 9,997,950 | ||||||||
14,000,000 | Nieuw Amsterdam Receivables Corp. 0.1929%, 9/1/15 (Section 4(2)) | 13,995,418 | ||||||||
35,000,000 | Standard Chartered Bank, New York 0.2234%, 7/27/15 (Section 4(2)) | 34,994,438 | ||||||||
20,000,000 | Standard Chartered Bank, New York 0.2335%, 8/3/15 (Section 4(2)) | 19,995,783 | ||||||||
10,000,000 | Swedbank AB 0.1929%, 8/14/15 | 9,997,677 | ||||||||
25,000,000 | Swedbank AB 0.1980%, 8/19/15 | 24,993,364 | ||||||||
15,000,000 | Swedbank AB 0.1522%, 8/24/15 | 14,996,625 | ||||||||
55,000,000 | Victory Receivables Corp. 0.1624%, 7/13/15 (Section 4(2)) | 54,997,067 | ||||||||
Total Commercial Paper (amortized cost $445,360,712) | 445,360,712 | |||||||||
Repurchase Agreements – 19.6% | ||||||||||
100,000,000 | Goldman Sachs & Co., 0.1200%, dated 6/30/15, maturing 7/1/15 to be repurchased at $100,000,333 collateralized by $95,106,832 in U.S. Government Agencies 0.8355% – 38.4780%, 4/15/21 – 4/1/45 with a value of $102,000,000 | 100,000,000 | ||||||||
126,200,000 | Undivided interest of 84.1% in a joint repurchase agreement (principal amount $150,000,000 with a maturity value of $150,000,458) with HSBC Securities (USA), Inc., 0.1100%, dated 6/30/15, maturing 7/1/15, to be repurchased at $126,200,386 collateralized by $145,874,921 in U.S. Government Agencies, 0% – 4.0000%, 7/15/15 – 8/20/44, with a value of $153,002,324 | 126,200,000 | ||||||||
Total Repurchase Agreements (amortized cost $226,200,000) | 226,200,000 | |||||||||
U.S. Government Agency Notes – 7.5% | ||||||||||
Federal Farm Credit Discount Notes: | ||||||||||
8,500,000 | 0.1502%, 12/15/15 | 8,494,085 | ||||||||
Federal Home Loan Bank Discount Notes: | ||||||||||
10,000,000 | 0.1622%, 9/9/15 | 9,996,849 | ||||||||
8,000,000 | 0.1301%, 10/23/15 | 7,996,706 | ||||||||
15,000,000 | 0.1001%, 11/2/15 | 14,994,833 | ||||||||
8,500,000 | 0.1401%, 11/6/15 | 8,495,769 | ||||||||
Freddie Mac Discount Notes: | ||||||||||
14,000,000 | 0.1402%, 7/22/15 | 13,998,856 | ||||||||
7,000,000 | 0.1903%, 8/18/15 | 6,998,226 | ||||||||
5,000,000 | 0.1167%, 8/21/15 | 4,999,174 | ||||||||
10,000,000 | 0.1502%, 9/4/15 | 9,997,291 | ||||||||
Total U.S. Government Agency Notes (amortized cost $85,971,789) | 85,971,789 | |||||||||
Variable Rate Demand Agency Notes – 9.9% | ||||||||||
4,000,000 | Breckenridge Terrace LLC 0.2400%, 5/1/39 | 4,000,000 | ||||||||
14,980,000 | Breckenridge Terrace LLC 0.2400%, 5/1/39 | 14,980,000 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 3
Table of Contents
Janus Money Market Fund
Schedule of Investments
As of June 30, 2015
Principal Amount | Value | |||||||||
$800,000 | California Infrastructure & Economic Development Bank 0.1300%, 7/1/33 | $ | 800,000 | |||||||
900,000 | Capital Markets Access Co. LC 0.1700%, 7/1/25 | 900,000 | ||||||||
9,100,000 | County of Eagle CO 0.2400%, 6/1/27 | 9,100,000 | ||||||||
8,000,000 | County of Eagle CO 0.2400%, 5/1/39 | 8,000,000 | ||||||||
4,400,000 | Hawkes 0-Side I LLC 0.1400%, 4/1/55 | 4,400,000 | ||||||||
4,605,000 | Industrial Development Board of the City of Auburn 0.1700%, 7/1/26 | 4,605,000 | ||||||||
3,495,000 | J-Jay Properties LLC 0.1400%, 7/1/35 | 3,495,000 | ||||||||
5,165,000 | Kaneville Road Joint Venture, Inc. 0.1700%, 11/1/32 | 5,165,000 | ||||||||
170,000 | Kentucky Economic Development Finance Authority 1.0000%, 11/1/15 | 170,000 | ||||||||
5,395,000 | Lush Properties LLC 0.1700%, 11/1/33 | 5,395,000 | ||||||||
4,230,000 | Mesivta Yeshiva Rabbi Chaim Berlin 0.1870%, 11/1/35 | 4,230,000 | ||||||||
6,000,000 | Michael Dennis Sullivan Irrevocable Trust 0.1700%, 2/1/35 | 6,000,000 | ||||||||
6,000,000 | Mississippi Business Finance Corp. 0.1700%, 12/1/35 | 6,000,000 | ||||||||
4,865,000 | Phenix City Downtown Redevelopment Authority 0.1700%, 2/1/33 | 4,865,000 | ||||||||
1,675,000 | Phoenix Realty Special Account 0.1600%, 4/1/20 | 1,675,000 | ||||||||
10,865,000 | RBS Insurance Trust 0.1700%, 11/1/31 | 10,865,000 | ||||||||
5,000,000 | SSAB AB 0.1700%, 4/1/34 | 5,000,000 | ||||||||
5,500,000 | Sunroad Centrum Apartments 4 LP 0.1800%, 5/1/55 | 5,500,000 | ||||||||
5,700,000 | Tenderfoot Seasonal Housing LLC 0.2400%, 7/1/35 | 5,700,000 | ||||||||
2,600,000 | Tift County Development Authority 0.2300%, 2/1/18 | 2,600,000 | ||||||||
Total Variable Rate Demand Agency Notes (amortized cost $113,445,000) | 113,445,000 | |||||||||
Total Investments (total cost $1,151,277,672) – 100.0% | 1,151,277,672 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0)% | (119,345) | |||||||||
Net Assets – 100% | $ | 1,151,158,327 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
4 | JUNE 30, 2015
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Notes to Schedule of Investments and Other Information
LC | Limited Company | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
PLC | Public Limited Company | |
Section 4(2) | Securities subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the Securities Act of 1933, as amended. |
Money market funds may hold securities with stated maturities of greater than 397 days when those securities have features that allow a fund to “put” back the security to the issuer or to a third party within 397 days of acquisition. The maturity dates shown in the security descriptions are the stated maturity dates.
The following is a summary of the inputs that were used to value the Fund’s investments in securities and other financial instruments as of June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | |||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||
Janus Money Market Fund | ||||||||
Assets | ||||||||
Investments in Securities: | ||||||||
Certificates of Deposit | $– | $ 280,300,171 | $– | |||||
Commercial Paper | – | 445,360,712 | – | |||||
Repurchase Agreements | – | 226,200,000 | – | |||||
U.S. Government Agency Notes | – | 85,971,789 | – | |||||
Variable Rate Demand Agency Notes | – | 113,445,000 | – | |||||
Total Assets | $– | $1,151,277,672 | $– | |||||
Janus Investment Fund | 5
Table of Contents
Statement of Assets and Liabilities
Janus Money | ||||
As of June 30, 2015 | Market Fund | |||
Assets: | ||||
Investments, at cost(1) | $ | 1,151,277,672 | ||
Investments, at value | $ | 925,077,672 | ||
Repurchase agreements, at value | 226,200,000 | |||
Cash | 25,068,298 | |||
Non-interested Trustees’ deferred compensation | 23,016 | |||
Receivables: | ||||
Fund shares sold | 2,421,228 | |||
Interest | 68,743 | |||
Total Assets | 1,178,858,957 | |||
Liabilities: | ||||
Payables: | ||||
Investments purchased | 25,000,000 | |||
Fund shares repurchased | 2,480,789 | |||
Advisory fees | 94,346 | |||
Administrative services fees | 49,002 | |||
Non-interested Trustees’ fees and expenses | 7,396 | |||
Non-interested Trustees’ deferred compensation fees | 23,016 | |||
Accrued expenses and other payables | 46,081 | |||
Total Liabilities | 27,700,630 | |||
Net Assets | $ | 1,151,158,327 | ||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 1,151,176,721 | ||
Undistributed net investment income/(loss) | (23,016) | |||
Unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 4,622 | |||
Total Net Assets | $ | 1,151,158,327 | ||
Net Assets - Class D Shares | $ | 923,389,573 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 923,413,197 | |||
Net Asset Value Per Share | $ | 1.00 | ||
Net Assets - Class T Shares | $ | 227,768,754 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 227,777,000 | |||
Net Asset Value Per Share | $ | 1.00 |
(1) | Includes cost of repurchase agreements of $226,200,000. |
See Notes to Financial Statements.
6 | JUNE 30, 2015
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Statement of Operations
Janus Money | ||||
For the year ended June 30, 2015 | Market Fund | |||
Investment Income: | ||||
Interest | $ | 1,547,650 | ||
Other income | 101 | |||
Total Investment Income | 1,547,751 | |||
Expenses: | ||||
Advisory fees | 2,342,664 | |||
Administration services fees: | ||||
Class D Shares | 4,397,351 | |||
Class T Shares | 1,040,031 | |||
Professional fees | 61,100 | |||
Non-interested Trustees’ fees and expenses | 25,480 | |||
Total Expenses | 7,866,626 | |||
Less: Excess Expense Reimbursement | (6,319,162) | |||
Net Expenses | 1,547,464 | |||
Net Investment Income/(Loss) | 287 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments | (57) | |||
Total Net Realized Gain/(Loss) on Investments | (57) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 230 |
See Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
Statements of Changes in Net Assets
Janus Money | ||||||||
Market Fund | ||||||||
For each year ended June 30 | 2015 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 287 | $ | 33,130 | ||||
Net realized gain/(loss) on investments | (57) | – | ||||||
Change in unrealized net appreciation/depreciation of non-interested Trustees’ deferred compensation | – | 3,097 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 230 | 36,227 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income | ||||||||
Class D Shares | (187) | (30,763) | ||||||
Class T Shares | (29) | (5,997) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (216) | (36,760) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class D Shares | 438,226,812 | 505,275,000 | ||||||
Class T Shares | 98,513,060 | 149,911,496 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class D Shares | 31 | 22,626 | ||||||
Class T Shares | 21 | 3,067 | ||||||
Shares Repurchased | ||||||||
Class D Shares | (508,391,742) | (589,111,762) | ||||||
Class T Shares | (97,632,754) | (113,275,217) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (69,284,572) | (47,174,790) | ||||||
Net Increase/(Decrease) in Net Assets | (69,284,558) | (47,175,323) | ||||||
Net Assets: | ||||||||
Beginning of period | 1,220,442,885 | 1,267,618,208 | ||||||
End of period | $ | 1,151,158,327 | $ | 1,220,442,885 | ||||
Undistributed Net Investment Income/(Loss) | $ | (23,016) | $ | (34,814) |
See Notes to Financial Statements.
8 | JUNE 30, 2015
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Financial Highlights
Class D Shares
Janus Money Market Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | –(1)(2) | –(1)(2) | –(1) | –(1) | –(1) | |||||||||||||||||
Net realized and unrealized gain/(loss) | –(1) | –(1) | –(1) | –(1) | –(1) | |||||||||||||||||
Total from Investment Operations | – | – | – | – | – | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | –(1) | –(1) | –(1) | –(1) | –(1) | |||||||||||||||||
Distributions (from capital gains) | – | – | – | –(1) | – | |||||||||||||||||
Total Dividends and Distributions | – | – | – | – | – | |||||||||||||||||
Net Asset Value, End of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | |||||||||||||||||
Total Return | 0.00% | 0.00% | 0.00% | 0.00% | 0.01% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $923,390 | $993,554 | $1,077,369 | $1,089,252 | $1,105,288 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $956,166 | $1,046,368 | $1,070,220 | $1,131,399 | $1,148,654 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.67% | 0.66% | 0.67% | 0.67% | 0.67% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.13% | 0.10% | 0.17% | 0.14% | 0.22% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.00%(3) | 0.00%(3) | 0.00%(3) | 0.00%(3) | 0.00%(3) |
Class T Shares
Janus Money Market Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | –(1)(2) | –(1)(2) | –(1) | –(1) | –(1) | |||||||||||||||||
Net realized and unrealized gain/(loss) | –(1) | –(1) | –(1) | –(1) | –(1) | |||||||||||||||||
Total from Investment Operations | – | – | – | – | – | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | –(1) | –(1) | –(1) | –(1) | –(1) | |||||||||||||||||
Distributions (from capital gains) | – | – | – | –(1) | – | |||||||||||||||||
Total Dividends and Distributions | – | – | – | – | – | |||||||||||||||||
Net Asset Value, End of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | |||||||||||||||||
Total Return | 0.00% | 0.00% | 0.00% | 0.00% | 0.01% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $227,769 | $226,888 | $190,249 | $167,685 | $164,553 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $216,721 | $210,433 | $178,310 | $162,966 | $163,660 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.69% | 0.68% | 0.69% | 0.69% | 0.69% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.13% | 0.10% | 0.17% | 0.14% | 0.22% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.00%(3) | 0.00%(3) | 0.00%(3) | 0.00%(3) | 0.00%(3) |
(1) | Less than $0.005 on a per share basis. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year. | |
(3) | Less than 0.005%. |
See Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
Janus Money Market Fund (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in short-term money market securities.
The Fund offers two classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer both classes of shares.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class T Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Investments held by the Fund are valued utilizing the amortized cost method of valuation permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under the amortized cost method, which does not take into account unrealized capital gains or losses, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization to maturity of any discount or premium.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE.
10 | JUNE 30, 2015
Table of Contents
Periodic review and monitoring of the valuation of short-term securities is performed in an effort to ensure that amortized cost approximates market value. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
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 June 30, 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 year. 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 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
Dividends, if any, are declared daily and distributed monthly for the Fund. Realized capital gains, if any, are declared and distributed in December. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Janus Investment Fund | 11
Table of Contents
Notes to Financial Statements (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.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the “Offsetting Assets and Liabilities” section of this Note for further details.
The Fund may be exposed to counterparty risk through its investments in certain securities, including, but not limited to, repurchase agreements and debt securities. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and 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
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financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following table presents gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see the Fund’s Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
Goldman Sachs & Co. | $ | 100,000,000 | $ | – | $ | (100,000,000) | $ | – | ||||||||||
HSBC Securities (USA), Inc. | 126,200,000 | – | (126,200,000) | – | ||||||||||||||
Total | $ | 226,200,000 | $ | – | $ | (226,200,000) | $ | – | ||||||||||
(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.
Regulatory Risk
In July 2014, the SEC adopted additional rules applicable to money market funds which are intended to address perceived systematic risks associated with money market funds and to improve transparency for money market fund investors. Funds which do not meet the definitions of a retail money market fund or government money market fund will be required to have a floating NAV. The rules also contemplate the implementation of liquidity fees and redemption gates for non-government money market funds in times of market stress. The SEC also adopted additional diversification, stress-testing, and disclosure measures. Additionally, the Financial Stability Oversight Council (“FSOC”), a board of U.S. regulators established by the Dodd-Frank Act, had proposed certain recommendations for money market fund reform. There can be no assurance that there will not be future FSOC action relating to money market funds. The ultimate impact of money market reform is uncertain, but changes may affect the Fund’s operations and/or the trading and value of money market instruments, which in turn could negatively affect the Fund’s yield and return potential.
Repurchase Agreements
The Fund and other funds advised by Janus Capital or its affiliates may transfer daily uninvested cash balances into one or more joint trading accounts. Assets in the joint trading accounts are invested in money market instruments and the proceeds are allocated to the participating funds on a pro rata basis.
Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value exceeds the current market value of the repurchase agreements, including accrued interest. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral or proceeds may be subject to legal proceedings.
3. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Janus Money Market Fund | All Asset Levels | 0.20 | ||||||||
Janus Capital has voluntarily agreed to waive one-half of the Fund’s investment advisory fee. Janus Capital may also voluntarily waive and/or reimburse additional fees to the extent necessary to assist the Fund in attempting to maintain a yield of at least 0.00%. These waivers and reimbursements are voluntary and could change or be terminated at any time at the discretion of Janus Capital. There is no guarantee that the Fund will maintain a
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Notes to Financial Statements (continued)
positive yield. If applicable, amounts waived and/or reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Class D Shares and Class T Shares of the Fund compensate Janus Capital at an annual rate of 0.46% and 0.48%, respectively, of average daily net assets for providing certain administration services including, but not limited to, recordkeeping and registration functions and also to pay for costs such as shareholder servicing and custody. These amounts are disclosed as “Administration services fees” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
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.
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 June 30, 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 year ended June 30, 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 $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 2015.
4. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
Janus Money Market Fund | $ | – | $ | – | $ | – | $ | – | $ | – | $ | (18,394) | $ | – | |||||||||||||||||
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. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the year ended June 30, 2015
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Money Market Fund | $ | 216 | $ | – | $ | – | $ | (1,432) | ||||||||||||||
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For the year ended June 30, 2014
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Money Market Fund | $ | 36,760 | $ | – | $ | – | $ | – | ||||||||||||||
Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
Janus Money Market Fund | $ | (11,730) | $ | 11,727 | $ | 3 | ||||||||
5. | Capital Share Transactions |
Janus Money Market Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 438,226,773 | 505,274,999 | ||||||||
Reinvested dividends and distributions | 31 | 22,626 | ||||||||
Shares repurchased | (508,391,740) | (589,111,760) | ||||||||
Net Increase/(Decrease) in Fund Shares | (70,164,936) | (83,814,135) | ||||||||
Shares Outstanding, Beginning of Period | 993,578,133 | 1,077,392,268 | ||||||||
Shares Outstanding, End of Period | 923,413,197 | 993,578,133 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 98,513,052 | 149,911,036 | ||||||||
Reinvested dividends and distributions | 21 | 3,067 | ||||||||
Shares repurchased | (97,632,754) | (113,275,217) | ||||||||
Net Increase/(Decrease) in Fund Shares | 880,319 | 36,638,886 | ||||||||
Shares Outstanding, Beginning of Period | 226,896,681 | 190,257,795 | ||||||||
Shares Outstanding, End of Period | 227,777,000 | 226,896,681 |
6. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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 | 15
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of Janus Money Market Fund:
of Janus Money Market Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Janus Money Market Fund (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
16 | JUNE 30, 2015
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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)
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 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
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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 investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
Janus Investment Fund | 29
Table of Contents
Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
Janus Investment Fund | 31
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
Janus Investment Fund | 33
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Trustees and Officers (unaudited) (continued)
OFFICERS
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
J. Eric Thorderson 151 Detroit Street Denver, CO 80206 DOB: 1961 | Executive Vice President and Portfolio Manager Janus Money Market Fund | 2/04-Present | Vice President of Janus Capital and Portfolio Manager for other Janus accounts. | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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Notes
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Notes
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Notes
Janus Investment Fund | 37
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Janus provides access to a wide range of investment disciplines.
Alternative
Janus alternative funds seek to deliver strong risk-adjusted returns over a full market cycle with lower correlation to equity markets than traditional investments.
Asset Allocation
Janus’ asset allocation funds utilize our fundamental, bottom-up research to balance risk over the long term. From fund options that meet investors’ risk tolerance and objectives to a method that incorporates non-traditional investment choices to seek non-correlated sources of risk and return, Janus’ asset allocation funds aim to allocate risk more effectively.
Fixed Income
Janus fixed income funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek capital preservation and liquidity with current income as a secondary objective.
Global & International
Janus global and international funds seek to leverage Janus’ research capabilities by taking advantage of inefficiencies in foreign markets, where accurate information and analytical insight are often at a premium.
Growth & Core
Janus growth funds focus on companies believed to be the leaders in their respective industries, with solid management teams, expanding market share, margins and efficiencies. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical funds seek to outperform their respective indices while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH (a Janus subsidiary), these funds use a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
For more information about our funds, contact your investment professional or go to janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus).
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-0815-94126 | 125-02-93027 08-15 |
Table of Contents
annual report
June 30, 2015
Janus Multi-Sector Income Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
Table of Contents
Janus Multi-Sector Income Fund
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Table of Contents
Janus Multi-Sector Income Fund (unaudited)
FUND SNAPSHOT We believe a bottom-up, fundamentally driven investment process can generate risk-adjusted outperformance over time. Our comprehensive, bottom-up view drives decision making at a macro level, enabling us to make informed risk and sector allocation decisions. | John Kerschner co-portfolio manager | John Lloyd co-portfolio manager | Seth Meyer co-portfolio manager |
PERFORMANCE OVERVIEW
During the one-year period ended June 30, 2015, Janus Multi-Sector Income Fund’s Class I Shares returned 2.37% compared with a 1.86% return for the Fund’s benchmark, the Barclays U.S. Aggregate Bond Index.
MARKET ENVIRONMENT
The U.S. Treasury yield curve flattened during the period, although much of the gains of longer-dated securities were given up over the final few months. Long-dated Treasury yields fell through the end of 2014 as investors clamored for dollar-denominated assets. Solid U.S. economic growth suggested to investors that the Federal Reserve (Fed) would initiate rate hikes in 2015. At the same time, both Europe and Japan were taking steps to make their monetary policy even more accommodative, making yields on Treasurys relatively attractive. Also contributing to the bond rally was softer-than-expected economic data in the first part of 2015 which diminished investor concern of breakout growth or stronger-than-expected inflation. A spring rebound in economic data, along with signs of incipient growth in Europe, caused Treasurys to sell off and the curve to steepen. Late in the period, communication from the Fed that they would likely initiate the first rate hike in 2015 also kept a certain amount of upward pressure on yields. Still, global interest rate differentials and developments in China and Greece likely capped yields on the longer end of the curve. Yields on 2-year Treasury notes, which are especially sensitive to Fed rate hikes, rose during the period.
Rates fell across the curve in the eurozone in anticipation of the European Central Bank (ECB) initiating quantitative easing (QE); the announcement of a larger-than-expected QE program then pushed rates down even further. Concerns that eurozone sovereigns were overvalued sparked a spring sell-off – which was aggravated by low market liquidity – causing the yield on the 10-year German bund rise to nearly 1% after having almost reached negative territory only a couple of months prior.
High-yield and investment-grade credit spreads widened during the period amid a flood of new issuance. Shareholder-friendly activity, which may not be friendly to bondholders, also weighed on bond prices. Spreads in mortgage-backed securities (MBS) were flat during the period as rate volatility hindered investors’ ability to judge MBS prepayment risk.
PERFORMANCE DISCUSSION
Our exposure to a diverse range of income-generating asset classes contributed to the period’s relative outperformance. Chief among these was our allocation toward commercial mortgage-backed securities (CMBS). Our overweight to CMBS relative to the benchmark, along with spread carry – or the excess income generated from holding these securities – were the primary drivers of outperformance. These compensated for our yield curve positioning, which detracted from the asset class’ gains. Conversely, our yield curve positioning within investment-grade corporate credit aided relative performance as our defensive stance focusing on higher quality issuers was well timed, given the period’s widening credit spreads. Our underweight to investment-grade credits also benefited performance. Widening high-yield credit spreads theoretically should have taken their toll on the portfolio since we maintain exposure to this out-of-benchmark market segment. However, strong security selection and spread carry were sufficient for high-yield becoming a relative contributor. Our exposure to the “crossover” segment of corporate debt acutely boosted performance. These are issuers that, in our view, have management teams committed to balance sheet discipline and improving cash flow generations. They are also the securities that we believe offer some of the most attractive – and underappreciated – risk adjusted returns within the fixed income market. The credit sectors that contributed most to outperformance were pharmaceuticals, building materials and automotive.
Also aiding relative returns was our exposure to MBS and out-of-benchmark convertible debt.
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Janus Multi-Sector Income Fund (unaudited)
Our U.S. Treasurys exposure detracted from relative performance, penalized by both our underweight of the asset class and our yield curve positioning. On the credit sector level, energy related issuers detracted from performance as global energy prices collapsed over the latter part of 2014. Independent energy companies along with oil fields services firms were among the hardest hit sectors within the portfolio.
Though we actively managed duration during the period, the ending level, in absolute terms and relative to the benchmark, was roughly the same as it was in June 2014. This defensive stance – with duration being well below that of the benchmark – reflects what we feel is prudent, given a confluence of risk factors that we presently see in fixed income markets. Further reflecting our concerns, we lowered our credit allocation from 60.2% at the beginning of the period to 52.7% at the end. While still below the benchmark’s level, we raised our MBS allocation and have increased our CMBS overweight.
Please see the Derivative Instruments section in the “Notes to Financial Statements” for derivatives used by the Fund.
OUTLOOK
Multiple factors presently have the potential to impact the fixed income environment, chief among them remains the timing and pace of the Fed’s rate hikes. Data suggest that the central bank is achieving its dual mandate. Strong gains in payrolls have resumed and wage growth has shown signs of accelerating. At 5.3% the unemployment rate is nearing the range many would consider full-employment. Under the tenure of Ben Bernanke, the Fed had initially targeted a jobless rate of roughly 6.5% as the level at which it would consider rate hikes, a move that has been delayed as Fed has made clear its objective of achieving sustainable growth. With economic expansion typically comes jobs, and after that, wage-driven inflation, as employers scramble for qualified workers. In a service-based economy like the U.S., wages have an outsized impact on inflation. Should this scenario play out as the Fed anticipates, inflation will eventually be on track toward policy makers’ 2% goal.
Core inflation has held steady as crude prices stabilized before any downward pressure bled into non-energy categories. The stabilization in the U.S. dollar after its rapid appreciation also aids the inflation outlook as continued gains in the currency would have made foreign products cheaper, thus keeping a lid on prices. The dollar, however, remains one of our wild cards. Deterioration in the Greece dispute or a deceleration in non-U.S. economies could send investors fleeing back toward dollar-denominated assets, forcing a resumption in the currency’s march upward. In a nod to this scenario, the Fed has acknowledged that international developments are being considered as it charts its path forward.
Retail sales and housing have also exhibited signs of strength. There had been consternation that the savings consumers were reaping from cheaper energy were not being spent on other items, instead being used to pay off debt. The stabilization of prices and broad expectation that a return to $100 crude is not likely may instill sufficient confidence in consumers to more readily open their wallets to adjust to this new reality. The resulting boost in aggregate demand should also play a role in lifting inflation toward the Fed’s target.
The winter slowdown does not affect our full-year outlook. We expect growth to catch up over the second half of 2015. Employment data, in our view, should remain robust and inflation should advance toward a 2% annual rate. Continued patches of softness may cause the Fed to delay its initial rate hike past the widely assumed September lift-off, but in our view, rates will rise – albeit cautiously – this year.
We are mindful that we are quite possibly nearing the end of a credit cycle. Merger and acquisition activity, share buybacks, and debt issuance are up. The result is a deterioration of corporate balance sheets. It is for this reason, while still overweight versus the benchmark, our credit allocation is near the lowest it has been since the financial crisis. Utilizing our bottom-up fundamental security-level approach, we are concentrating our holdings in higher-quality companies with steady revenue streams, and whose management has maintained balance sheet discipline.
We are also concerned with the potential for sustained periods of elevated market volatility, which we consider suppressed by continued fixed income inflows. Alarmingly low levels of liquidity are a serious risk factor, in our view. Should an illiquidity event occur, we want to be a provider of liquidity. Accordingly, we have lowered the overall duration of the portfolio, especially as a percentage of the benchmark. Treasurys are the tool we utilize to toggle duration in a cost-effective manner. Shorter-dated government securities act as a cash cushion, which should allow us to better weather storms and opportunistically make attractive investments caused by market dislocations.
We remain underweight MBS relative to the benchmark as these securities typically do not perform well in volatile markets. When the direction of rates is in question,
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Table of Contents
(unaudited)
investors cannot adequately gauge prepayment risks, which stand to increase as rates decline. While our base-case scenario is for increasing rates, a global crisis or unforeseen slowdown in growth could again put downward pressure on the safe-haven Treasurys upon which mortgages are priced.
Over the past quarter we have sought to reduce risks in our portfolio and expect to maintain this defensive posture as the aforementioned risk factors play out. We have not seen such a confluence of potentially adverse forces for several years. Our binding principle of capital preservation is of utmost importance as we navigate the choppy waters ahead
Thank you for your investment in Janus Multi-Sector Income Fund.
Janus Investment Fund | 3
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Janus Multi-Sector Income Fund (unaudited)
Janus Multi-Sector Income Fund At A Glance
Fund Profile
June 30, 2015
Weighted Average Maturity | 8.5 Years | |
Average Effective Duration* | 4.1 Years | |
30-day Current Yield** | ||
Class A Shares at NAV | ||
Without Reimbursement | 2.45% | |
With Reimbursement | 3.61% | |
Class A Shares at MOP | ||
Without Reimbursement | 2.34% | |
With Reimbursement | 3.44% | |
Class C Shares*** | ||
Without Reimbursement | 1.71% | |
With Reimbursement | 2.87% | |
Class D Shares | ||
Without Reimbursement | 2.46% | |
With Reimbursement | 3.74% | |
Class I Shares | ||
Without Reimbursement | 2.74% | |
With Reimbursement | 3.90% | |
Class N Shares | ||
Without Reimbursement | 2.74% | |
With Reimbursement | 3.90% | |
Class S Shares | ||
Without Reimbursement | 2.24% | |
With Reimbursement | 3.39% | |
Class T Shares | ||
Without Reimbursement | 2.47% | |
With Reimbursement | 3.63% | |
Number of Bonds/Notes | 155 |
* | A theoretical measure of price volatility | |
** | Yield will fluctuate | |
*** | Does not include the 1.00% contingent deferred sales charge. |
Ratings† Summary – (% of Total Investments)
June 30, 2015
AA | 14.2% | |
A | 3.6% | |
BBB | 15.2% | |
BB | 15.0% | |
B | 24.4% | |
CCC | 12.9% | |
D | 2.6% | |
Not Rated | 9.4% | |
Other | 2.7% |
† | Credit ratings provided by Standard & Poor’s (S&P), an independent credit rating agency. Credit ratings range from AAA (highest) to D (lowest) based on S&P’s measures. Further information on S&P’s rating methodology may be found at www.standardandpoors.com. Other rating agencies may rate the same securities differently. Ratings are relative and subjective and are not absolute standards of quality. Credit quality does not remove market risk and is subject to change. “Not Rated” securities are not rated by S&P, but may be rated by other rating agencies and do not necessarily indicate low quality. “Other” includes cash equivalents, equity securities, and certain derivative instruments. |
Significant Areas of Investment – (% of Net Assets)
As of June 30, 2015
Asset Allocation – (% of Net Assets)
As of June 30, 2015
*Includes Other of (3.1)%.
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(unaudited)
Performance
Expense Ratios – per the October 28, 2014 prospectuses | |||||||||
Average Annual Total Return – for the periods ended June 30, 2015 | (estimated for the fiscal year) | ||||||||
One | Since | Total Annual Fund | Net Annual Fund | ||||||
Year | Inception* | Operating Expenses | Operating Expenses | ||||||
Janus Multi-Sector Income Fund – Class A Shares | |||||||||
NAV | 2.09% | 3.71% | 1.97% | 0.98% | |||||
MOP | –2.79% | –0.01% | |||||||
Janus Multi-Sector Income Fund – Class C Shares | |||||||||
NAV | 1.34% | 2.95% | 2.73% | 1.73% | |||||
CDSC | 0.37% | 2.95% | |||||||
Janus Multi-Sector Income Fund – Class D Shares(1) | 2.22% | 3.80% | 1.84% | 0.85% | |||||
Janus Multi-Sector Income Fund – Class I Shares | 2.37% | 3.99% | 1.72% | 0.73% | |||||
Janus Multi-Sector Income Fund – Class N Shares | 2.37% | 3.99% | 1.69% | 0.71% | |||||
Janus Multi-Sector Income Fund – Class S Shares | 1.86% | 3.47% | 2.19% | 1.21% | |||||
Janus Multi-Sector Income Fund – Class T Shares | 2.11% | 3.72% | 1.94% | 0.96% | |||||
Barclays U.S. Aggregate Bond Index | 1.86% | 2.81% | |||||||
Morningstar Quartile – Class I Shares | 1st | 1st | |||||||
Morningstar Ranking – based on total returns for Multi-Sector Bond Funds | 17/298 | 25/283 | |||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month–end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
Maximum Offering Price (MOP) returns include the maximum sales charge of 4.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
See important disclosures on the next page.
Janus Investment Fund | 5
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Janus Multi-Sector Income Fund (unaudited)
The expense ratios shown reflect estimated annualized expenses that the Fund expects to incur during its initial fiscal year.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Fixed income securities are subject to interest rate, inflation, credit and default risk. The bond market is volatile. As interest rates rise, bond prices usually fall, and vice versa. The return of principal is not guaranteed, and prices may decline if an issuer fails to make timely payments or its credit strength weakens.
High-yield/high-risk bonds, also known as “junk” bonds, involve a greater risk of default and price volatility than U.S. Government and other high quality bonds. High-yield/high-risk bonds can experience sudden and sharp price swings which will affect net asset value.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility, lower liquidity and differing financial and information reporting standards, all of which are magnified in emerging markets.
The Fund will normally invest at least 80% of its net assets, measured at the time of purchase, in the type of securities described by its name.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Until the earlier of three years from inception or the Fund’s assets meeting the first fee breakpoint, 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 – February 28, 2014 | |
(1) | Closed to certain 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 | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,026.00 | $ | 4.97 | $ | 1,000.00 | $ | 1,019.89 | $ | 4.96 | 0.99% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,022.30 | $ | 8.67 | $ | 1,000.00 | $ | 1,016.22 | $ | 8.65 | 1.73% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,026.70 | $ | 4.32 | $ | 1,000.00 | $ | 1,020.53 | $ | 4.31 | 0.86% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,027.40 | $ | 3.57 | $ | 1,000.00 | $ | 1,021.27 | $ | 3.56 | 0.71% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 1,027.40 | $ | 3.57 | $ | 1,000.00 | $ | 1,021.27 | $ | 3.56 | 0.71% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,024.90 | $ | 6.07 | $ | 1,000.00 | $ | 1,018.79 | $ | 6.06 | 1.21% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,026.10 | $ | 4.87 | $ | 1,000.00 | $ | 1,019.98 | $ | 4.86 | 0.97% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 181/365 (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 Multi-Sector Income Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Asset-Backed/Commercial Mortgage-Backed Securities – 21.5% | ||||||||||
$ | 19,000 | AmeriCredit Automobile Receivables Trust 2015-2 3.0000%, 6/8/21 | $ | 19,032 | ||||||
100,000 | BAMLL Commercial Mortgage Securities Trust 2015-200P 3.7157%, 4/14/33 (144A),‡ | 88,209 | ||||||||
122,000 | Banc of America Commercial Mortgage Trust 2006-6 5.5100%, 10/10/45 | 119,124 | ||||||||
210,000 | BHMS 2014-ATLS Mortgage Trust 4.8469%, 7/5/33 (144A),‡ | 211,012 | ||||||||
100,000 | CGBAM Commercial Mortgage Trust 2014-HD 3.1855%, 2/15/31 (144A),‡ | 100,021 | ||||||||
150,000 | COMM 2007-C9 Mortgage Trust 5.9889%, 12/10/49‡ | 155,625 | ||||||||
100,000 | Core Industrial Trust 2015-TEXW 3.9770%, 2/10/34 (144A),‡ | 93,872 | ||||||||
GBP | 98,773 | DECO 12-UK 4 PLC 1.0006%, 1/27/20‡ | 142,060 | |||||||
250,000 | ECAF I, Ltd. 4.9470%, 6/15/40 (144A) | 250,007 | ||||||||
130,762 | Fannie Mae Connecticut Avenue Securities 5.4370%, 10/25/23‡ | 141,975 | ||||||||
262,117 | Fannie Mae Connecticut Avenue Securities 5.0848%, 11/25/24‡ | 270,419 | ||||||||
186,000 | Fannie Mae Connecticut Avenue Securities 4.1849%, 5/25/25‡ | 181,750 | ||||||||
463,000 | GAHR Commercial Mortgage Trust 2015-NRF 3.4949%, 12/15/19 (144A),‡ | 434,697 | ||||||||
EUR | 114,265 | German Residential Funding 2013-2, Ltd. 2.9880%, 11/27/24‡ | 131,192 | |||||||
237,000 | Hilton USA Trust 2013-HLT 5.6086%, 11/5/30 (144A),‡ | 240,204 | ||||||||
300,000 | JP Morgan Chase Commercial Mortgage Securities Trust 2015-COSMO 4.1355%, 1/15/32 (144A),‡ | 300,806 | ||||||||
GBP | 148,571 | London & Regional Debt Securitisation No 2 PLC 5.8721%, 10/15/15‡ | 236,439 | |||||||
470,000 | Mach One 2004-1A ULC 5.4500%, 5/28/40 (144A),‡ | 470,000 | ||||||||
GBP | 50,000 | Ulysses European Loan Conduit No 27 PLC 0.8006%, 7/25/17‡ | 75,683 | |||||||
380,000 | Wachovia Bank Commercial Mortgage Trust Series 2007-C30 5.4130%, 12/15/43‡ | 388,609 | ||||||||
130,000 | Wachovia Bank Commercial Mortgage Trust Series 2007-C31 5.8600%, 4/15/47‡ | 126,952 | ||||||||
Total Asset-Backed/Commercial Mortgage-Backed Securities (cost $4,219,768) | 4,177,688 | |||||||||
Bank Loans and Mezzanine Loans – 8.7% | ||||||||||
Capital Goods – 0.6% | ||||||||||
31,935 | Maxim Crane Works LP 10.2500%, 11/26/18‡ | 31,935 | ||||||||
81,000 | Stardust Finance Holdings, Inc. 10.5000%, 3/13/23‡ | 78,975 | ||||||||
110,910 | ||||||||||
Consumer Cyclical – 3.4% | ||||||||||
100,000 | Cosmopolitan of Las Vegas 8.9330%, 12/19/16‡ | 100,000 | ||||||||
213,000 | Delta 2 Lux Sarl 7.7500%, 7/29/22‡ | 212,467 | ||||||||
42,892 | Hanesbrands, Inc. 3.2500%, 4/29/22‡ | 43,108 | ||||||||
300,000 | Las Vegas Sands LLC 0%, 12/19/20(a),‡ | 298,386 | ||||||||
15,000 | Staples, Inc. 0%, 4/7/21(a),‡ | 14,966 | ||||||||
668,927 | ||||||||||
Energy – 0.6% | ||||||||||
17,000 | Chief Exploration & Development LLC 7.5000%, 5/16/21‡ | 15,946 | ||||||||
126,000 | Templar Energy LLC 8.5000%, 11/25/20‡ | 92,484 | ||||||||
108,430 | ||||||||||
Finance Companies – 1.0% | ||||||||||
195,509 | RPI Finance Trust 3.5000%, 11/9/20‡ | 195,630 | ||||||||
Industrial – 1.0% | ||||||||||
200,000 | Belden Finance 2013 LP 0%, 10/3/20(a),‡ | 200,000 | ||||||||
Real Estate Investment Trusts (REITs) – 0.3% | ||||||||||
43,000 | DTZ US Borrower LLC 9.2500%, 11/4/22‡ | 43,000 | ||||||||
20,522 | ESH Hospitality, Inc. 5.0000%, 6/24/19‡ | 20,855 | ||||||||
63,855 | ||||||||||
Technology – 1.6% | ||||||||||
108,488 | Avago Technologies Cayman, Ltd. 3.7500%, 5/6/21‡ | 108,585 | ||||||||
200,000 | Sensata Technologies BV 3.5000%, 10/14/21‡ | 200,322 | ||||||||
308,907 | ||||||||||
Transportation – 0.2% | ||||||||||
16,830 | OSG Bulk Ships, Inc. 5.2500%, 8/5/19‡ | 16,819 | ||||||||
23,760 | OSG International, Inc. 5.7500%, 8/5/19‡ | 23,790 | ||||||||
40,609 | ||||||||||
Total Bank Loans and Mezzanine Loans (cost $1,730,452) | 1,697,268 | |||||||||
Common Stocks – 0.9% | ||||||||||
Capital Markets – 0.5% | ||||||||||
3,395 | E*TRADE Financial Corp.* | 101,680 | ||||||||
Construction Materials – 0.2% | ||||||||||
1,635 | Summit Materials, Inc. – Class A* | 41,693 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Hotels, Restaurants & Leisure – 0.2% | ||||||||||
649 | Las Vegas Sands Corp. | $ | 34,118 | |||||||
Total Common Stocks (cost $164,849) | 177,491 | |||||||||
Corporate Bonds – 51.6% | ||||||||||
Banking – 2.7% | ||||||||||
$ | 39,000 | Ally Financial, Inc. 4.1250%, 3/30/20 | 38,927 | |||||||
115,000 | American Express Co. 6.8000%, 9/1/66‡ | 118,323 | ||||||||
EUR | 100,000 | Bank of Ireland 4.2500%, 6/11/24 | 111,480 | |||||||
37,000 | Morgan Stanley 5.5500%µ | 36,732 | ||||||||
90,000 | Royal Bank of Scotland Group PLC 6.1000%, 6/10/23 | 95,691 | ||||||||
EUR | 100,000 | UBS AG 4.7500%, 2/12/26†,‡ | 118,167 | |||||||
519,320 | ||||||||||
Basic Industry – 0.9% | ||||||||||
51,000 | Albemarle Corp. 4.1500%, 12/1/24 | 50,835 | ||||||||
40,000 | Albemarle Corp. 5.4500%, 12/1/44 | 40,036 | ||||||||
85,000 | INVISTA Finance LLC 4.2500%, 10/15/19 (144A) | 83,725 | ||||||||
174,596 | ||||||||||
Brokerage – 0.9% | ||||||||||
105,000 | Charles Schwab Corp. 7.0000%µ | 121,951 | ||||||||
48,000 | Neuberger Berman Group LLC / Neuberger Berman Finance Corp. 4.8750%, 4/15/45 (144A) | 43,523 | ||||||||
165,474 | ||||||||||
Capital Goods – 5.0% | ||||||||||
284,000 | ADS Tactical, Inc. 11.0000%, 4/1/18§ | 293,940 | ||||||||
100,000 | Brundage-Bone Concrete Pumping, Inc. 10.3750%, 9/1/21 (144A) | 104,000 | ||||||||
150,000 | Headwaters, Inc. 7.2500%, 1/15/19 | 156,000 | ||||||||
120,000 | Masco Corp. 6.5000%, 8/15/32 | 126,600 | ||||||||
30,000 | NCI Building Systems, Inc. 8.2500%, 1/15/23 (144A) | 31,950 | ||||||||
102,000 | Summit Materials LLC / Summit Materials Finance Corp. 10.5000%, 1/31/20 | 111,308 | ||||||||
11,000 | Vulcan Materials Co. 7.5000%, 6/15/21 | 12,650 | ||||||||
122,000 | Vulcan Materials Co. 7.1500%, 11/30/37 | 132,980 | ||||||||
969,428 | ||||||||||
Communications – 8.9% | ||||||||||
200,000 | Altice Finco SA 7.6250%, 2/15/25 (144A) | 192,000 | ||||||||
200,000 | Altice US Finance SA 7.7500%, 7/15/25 (144A) | 192,000 | ||||||||
54,000 | CCO Holdings LLC / CCO Holdings Capital Corp. 5.3750%, 5/1/25 (144A) | 52,583 | ||||||||
47,000 | CCO Holdings LLC / CCO Holdings Capital Corp. 5.8750%, 5/1/27 (144A) | 45,884 | ||||||||
261,000 | Entercom Radio LLC 10.5000%, 12/1/19 | 279,922 | ||||||||
180,000 | Harron Communications LP / Harron Finance Corp. 9.1250%, 4/1/20 (144A) | 194,625 | ||||||||
97,000 | iHeartCommunications, Inc. 14.0000%, 2/1/21 | 68,870 | ||||||||
69,000 | iHeartCommunications, Inc. 9.0000%, 9/15/22 | 62,273 | ||||||||
189,000 | National CineMedia LLC 7.8750%, 7/15/21 | 197,977 | ||||||||
237,000 | Sirius XM Radio, Inc. 5.2500%, 8/15/22 (144A),† | 247,665 | ||||||||
48,000 | Townsquare Media, Inc. 6.5000%, 4/1/23 (144A) | 47,520 | ||||||||
135,000 | Univision Communications, Inc. 8.5000%, 5/15/21 (144A) | 142,087 | ||||||||
1,723,406 | ||||||||||
Consumer Cyclical – 10.4% | ||||||||||
39,000 | AV Homes, Inc. 8.5000%, 7/1/19 | 37,733 | ||||||||
94,000 | Brinker International, Inc. 3.8750%, 5/15/23 | 91,653 | ||||||||
63,000 | Century Communities, Inc. 6.8750%, 5/15/22 | 61,898 | ||||||||
110,000 | Century Communities, Inc. 6.8750%, 5/15/22 (144A) | 108,075 | ||||||||
55,000 | General Motors Co. 4.8750%, 10/2/23 | 57,985 | ||||||||
4,000 | General Motors Co. 6.2500%, 10/2/43 | 4,462 | ||||||||
97,000 | Greektown Holdings LLC / Greektown Mothership Corp. 8.8750%, 3/15/19 (144A) | 101,850 | ||||||||
120,000 | Hunt Cos., Inc. 9.6250%, 3/1/21 (144A) | 123,600 | ||||||||
94,000 | IHS, Inc. 5.0000%, 11/1/22 (144A) | 93,412 | ||||||||
75,000 | KB Home 7.6250%, 5/15/23 | 78,375 | ||||||||
138,000 | Landry’s Holdings II, Inc. 10.2500%, 1/1/18 (144A),† | 143,175 | ||||||||
234,000 | Landry’s, Inc. 9.3750%, 5/1/20 (144A) | 250,965 | ||||||||
145,000 | MDC Holdings, Inc. 5.5000%, 1/15/24 | 142,462 | ||||||||
65,000 | MDC Holdings, Inc. 6.0000%, 1/15/43 | 54,600 | ||||||||
47,000 | Meritage Homes Corp. 6.0000%, 6/1/25 (144A) | 47,235 | ||||||||
55,000 | MGM Resorts International 6.7500%, 10/1/20 | 58,300 | ||||||||
38,000 | Navistar International Corp. 8.2500%, 11/1/21 | 36,100 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus Multi-Sector Income Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Consumer Cyclical – (continued) | ||||||||||
$ | 80,000 | PF Chang’s China Bistro, Inc. 10.2500%, 6/30/20 (144A) | $ | 82,700 | ||||||
55,000 | Pinnacle Entertainment, Inc. 7.5000%, 4/15/21 | 58,231 | ||||||||
100,000 | PulteGroup, Inc. 7.8750%, 6/15/32 | 115,000 | ||||||||
61,000 | Quiksilver, Inc. / QS Wholesale, Inc. 7.8750%, 8/1/18 (144A) | 52,155 | ||||||||
22,000 | Quiksilver, Inc. / QS Wholesale, Inc. 10.0000%, 8/1/20 | 8,140 | ||||||||
88,000 | ROC Finance LLC / ROC Finance 1 Corp. 12.1250%, 9/1/18 (144A) | 93,940 | ||||||||
120,000 | WCI Communities, Inc. 6.8750%, 8/15/21 | 123,900 | ||||||||
2,025,946 | ||||||||||
Consumer Non-Cyclical – 9.7% | ||||||||||
99,000 | Concordia Healthcare Corp. 7.0000%, 4/15/23 (144A) | 99,000 | ||||||||
200,000 | ConvaTec Finance International SA 8.2500%, 1/15/19 (144A) | 196,500 | ||||||||
100,000 | Crimson Merger Sub, Inc. 6.6250%, 5/15/22 (144A) | 87,750 | ||||||||
200,000 | Endo Finance LLC / Endo, Ltd. / Endo Finco, Inc. 6.0000%, 7/15/23 (144A) | 204,500 | ||||||||
215,000 | FAGE Dairy Industry SA / FAGE USA Dairy Industry, Inc. 9.8750%, 2/1/20 (144A),† | 224,137 | ||||||||
42,000 | HJ Heinz Co. 2.8000%, 7/2/20 (144A) | 42,033 | ||||||||
145,000 | JBS USA LLC / JBS USA Finance, Inc. 7.2500%, 6/1/21 (144A) | 152,794 | ||||||||
150,000 | Mallinckrodt International Finance SA / Mallinckrodt CB LLC 4.8750%, 4/15/20 (144A) | 152,632 | ||||||||
71,000 | Owens & Minor, Inc. 4.3750%, 12/15/24 | 72,530 | ||||||||
57,000 | Post Holdings, Inc. 7.3750%, 2/15/22 | 57,998 | ||||||||
146,000 | Simmons Foods, Inc. 7.8750%, 10/1/21 (144A) | 134,320 | ||||||||
68,000 | SUPERVALU, Inc. 6.7500%, 6/1/21 | 68,680 | ||||||||
90,000 | SUPERVALU, Inc. 7.7500%, 11/15/22 | 94,444 | ||||||||
98,000 | Tenet Healthcare Corp. 6.7500%, 6/15/23 (144A) | 99,960 | ||||||||
92,000 | Valeant Pharmaceuticals International, Inc. 5.3750%, 3/15/20 (144A) | 94,990 | ||||||||
105,000 | Zimmer Biomet Holdings, Inc. 3.5500%, 4/1/25 | 101,450 | ||||||||
1,883,718 | ||||||||||
Energy – 1.6% | ||||||||||
70,000 | Chesapeake Energy Corp. 3.5253%, 4/15/19‡ | 64,050 | ||||||||
96,000 | Endeavor Energy Resources LP / EER Finance, Inc. 7.0000%, 8/15/21 (144A) | 95,520 | ||||||||
53,000 | Helmerich & Payne International Drilling Co. 4.6500%, 3/15/25 (144A) | 54,711 | ||||||||
81,000 | Kinder Morgan, Inc. 7.7500%, 1/15/32 | 92,830 | ||||||||
307,111 | ||||||||||
Finance Companies – 1.3% | ||||||||||
130,000 | General Electric Capital Corp. 6.3750%, 11/15/67†,‡ | 139,750 | ||||||||
100,000 | General Electric Capital Corp. 7.1250%µ | 115,375 | ||||||||
255,125 | ||||||||||
Industrial – 0.3% | ||||||||||
59,000 | Greystar Real Estate Partners LLC 8.2500%, 12/1/22 (144A) | 62,245 | ||||||||
Insurance – 0.2% | ||||||||||
26,000 | American International Group, Inc. 8.1750%, 5/15/58‡ | 34,424 | ||||||||
11,000 | CNO Financial Group, Inc. 4.5000%, 5/30/20 | 11,165 | ||||||||
45,589 | ||||||||||
Real Estate Investment Trusts (REITs) – 0.3% | ||||||||||
57,000 | Forestar USA Real Estate Group, Inc. 8.5000%, 6/1/22 (144A) | 59,138 | ||||||||
Technology – 7.3% | ||||||||||
76,000 | Alliance Data Systems Corp. 5.3750%, 8/1/22 (144A) | 74,860 | ||||||||
267,000 | Blackboard, Inc. 7.7500%, 11/15/19 (144A) | 250,980 | ||||||||
119,000 | CommScope Holding Co., Inc. 6.6250%, 6/1/20 (144A) | 123,463 | ||||||||
239,000 | CommScope Technologies Finance LLC 6.0000%, 6/15/25 (144A) | 238,104 | ||||||||
73,000 | CommScope, Inc. 4.3750%, 6/15/20 (144A) | 73,730 | ||||||||
100,000 | Dun & Bradstreet Corp. 4.0000%, 6/15/20 | 100,476 | ||||||||
83,000 | Molex Electronic Technologies LLC 3.9000%, 4/15/25 (144A) | 80,423 | ||||||||
139,000 | Seagate HDD Cayman 4.7500%, 1/1/25 (144A) | 138,145 | ||||||||
70,000 | Seagate HDD Cayman 5.7500%, 12/1/34 (144A) | 68,923 | ||||||||
69,000 | Trimble Navigation, Ltd. 4.7500%, 12/1/24 | 69,093 | ||||||||
200,000 | TSMC Global, Ltd. 1.6250%, 4/3/18 (144A),† | 197,712 | ||||||||
1,415,909 | ||||||||||
Transportation – 2.1% | ||||||||||
137,000 | Florida East Coast Holdings Corp. 6.7500%, 5/1/19 (144A) | 137,342 | ||||||||
83,000 | Florida East Coast Holdings Corp. 9.7500%, 5/1/20 (144A) | 78,643 | ||||||||
52,000 | Navios Maritime Holdings, Inc. / Navios Maritime Finance II US, Inc. 8.1250%, 2/15/19 | 40,820 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Transportation – (continued) | ||||||||||
$ | 8,000 | Navios Maritime Holdings, Inc. / Navios Maritime Finance II US, Inc. 7.3750%, 1/15/22 (144A) | $ | 6,930 | ||||||
140,000 | XPO Logistics, Inc. 7.8750%, 9/1/19 (144A) | 149,604 | ||||||||
413,339 | ||||||||||
Total Corporate Bonds (cost $10,192,628) | 10,020,344 | |||||||||
Mortgage-Backed Securities – 9.3% | ||||||||||
Fannie Mae Pool: | ||||||||||
116,430 | 6.5000%, 12/1/28 | 133,725 | ||||||||
161,227 | 6.5000%, 5/1/29 | 185,155 | ||||||||
144,108 | 6.5000%, 9/1/33 | 165,496 | ||||||||
97,322 | 6.5000%, 3/1/35 | 113,966 | ||||||||
136,967 | 6.5000%, 12/1/35 | 159,186 | ||||||||
240,805 | 4.0000%, 3/1/44 | 257,068 | ||||||||
84,597 | 4.0000%, 7/1/44 | 90,675 | ||||||||
53,349 | 4.0000%, 8/1/44 | 57,182 | ||||||||
70,382 | 3.5000%, 2/1/45 | 72,637 | ||||||||
Freddie Mac Gold Pool: | ||||||||||
26,248 | 3.5000%, 2/1/44 | 27,094 | ||||||||
Ginnie Mae I Pool: | ||||||||||
242,935 | 7.5000%, 6/15/32 | 302,046 | ||||||||
182,998 | 6.0000%, 1/15/34 | 216,448 | ||||||||
Ginnie Mae II Pool: | ||||||||||
15,001 | 5.5000%, 5/20/42 | 17,086 | ||||||||
Total Mortgage-Backed Securities (cost $1,757,202) | 1,797,764 | |||||||||
Preferred Stocks – 0.9% | ||||||||||
Capital Markets – 0.1% | ||||||||||
250 | Morgan Stanley Capital Trust III, 6.2500% | 6,382 | ||||||||
33 | Morgan Stanley Capital Trust IV, 6.2500% | 840 | ||||||||
16 | Morgan Stanley Capital Trust V, 5.7500% | 404 | ||||||||
13 | Morgan Stanley Capital Trust VIII, 6.4500% | 330 | ||||||||
7,956 | ||||||||||
Construction & Engineering – 0% | ||||||||||
125 | Citigroup Capital XIII, 7.8750% | 3,245 | ||||||||
Household Durables – 0.2% | ||||||||||
343 | William Lyon Homes, 6.5000% | 43,432 | ||||||||
Industrial Conglomerates – 0% | ||||||||||
180 | General Electric Capital Corp., 4.7000% | 4,374 | ||||||||
Pharmaceuticals – 0.6% | ||||||||||
112 | Allergan PLC, 5.5000% | 116,769 | ||||||||
Total Preferred Stocks (cost $163,835) | 175,776 | |||||||||
U.S. Treasury Notes/Bonds – 4.8% | ||||||||||
$ | 201,000 | 2.3750%, 8/15/24 | 202,084 | |||||||
275,000 | 2.2500%, 11/15/24 | 273,324 | ||||||||
43,000 | 2.0000%, 2/15/25 | 41,777 | ||||||||
6,000 | 3.3750%, 5/15/44 | 6,302 | ||||||||
209,000 | 3.1250%, 8/15/44† | 209,343 | ||||||||
179,000 | 3.0000%, 11/15/44 | 175,098 | ||||||||
34,000 | 2.5000%, 2/15/45 | 29,923 | ||||||||
Total U.S. Treasury Notes/Bonds (cost $977,533) | 937,851 | |||||||||
Investment Companies – 5.4% | ||||||||||
Money Markets – 5.4% | ||||||||||
1,052,339 | Janus Cash Liquidity Fund LLC, 0.1291%°°,£ (cost $1,052,339) | 1,052,339 | ||||||||
Total Investments (total cost $20,258,606) – 103.1% | 20,036,521 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (3.1)% | (604,720) | |||||||||
Net Assets – 100% | $ | 19,431,801 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||||
Country | Value | Securities | ||||||||
United States | $ | 17,350,292 | 86 | .6% | ||||||
Luxembourg | 600,967 | 3 | .0 | |||||||
United Kingdom | 549,873 | 2 | .7 | |||||||
Ireland | 242,672 | 1 | .2 | |||||||
Greece | 224,137 | 1 | .1 | |||||||
Netherlands | 200,322 | 1 | .0 | |||||||
Taiwan | 197,712 | 1 | .0 | |||||||
Guernsey | 192,000 | 1 | .0 | |||||||
Brazil | 152,794 | 0 | .8 | |||||||
Switzerland | 118,167 | 0 | .6 | |||||||
Singapore | 108,585 | 0 | .5 | |||||||
Canada | 99,000 | 0 | .5 | |||||||
Total | $ | 20,036,521 | 100 | .0% | ||||||
Schedule of Forward Currency Contracts, Open
Unrealized | ||||||||||||||
Currency | Currency | Appreciation/ | ||||||||||||
Counterparty/Currency and Settlement Date | Units Sold | Value | (Depreciation) | |||||||||||
JPMorgan Chase & Co.: | ||||||||||||||
British Pound 7/29/15 | 290,600 | $ | 456,434 | $ | 310 | |||||||||
Euro 7/29/15 | 327,000 | 364,649 | 1,113 | |||||||||||
Total | $ | 821,083 | $ | 1,423 | ||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Notes to Schedule of Investments and Other Information
Barclays U.S. Aggregate Bond Index | A broad-based measure of the investment grade, US dollar-denominated, fixed-rate taxable bond market. | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
PLC | Public Limited Company | |
ULC | Unlimited Liability Company |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. These securities have been determined to be liquid under guidelines established by the Board of Trustees. The total value of 144A securities as of the year ended June 30, 2015 is indicated in the table below: |
Value as a % | ||||||||||
Fund | Value | of Net Assets | ||||||||
Janus Multi-Sector Income Fund | $ | 8,042,586 | 41.4 | % | ||||||
(a) | All or a portion of this position has not settled, or is not funded. Upon settlement or funding date, interest rates for unsettled or unfunded amounts will be determined. Interest and dividends will not be accrued until time of settlement or funding. | |
* | 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 June 30, 2015, is noted below. |
Fund | Aggregate Value | ||||
Janus Multi-Sector Income Fund | $ | 1,008,516 | |||
‡ | 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 year end. | |
°° | Rate shown is the 7-day yield as of June 30, 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 June 30, 2015) |
Acquisition | Value as a | |||||||||||||
Date | Cost | Value | % of Net Assets | |||||||||||
Janus Multi-Sector Income Fund | ||||||||||||||
ADS Tactical, Inc., 11.0000%, 4/1/18 | 3/5/14 – 5/14/15 | $ | 289,231 | $ | 293,940 | 1.5 | % | |||||||
The Fund has registration rights for certain restricted securities held as of June 30, 2015. The issuer incurs all registration costs.
12 | JUNE 30, 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 year ended June 30, 2015. Unless otherwise indicated, all information in the table is for the year ended June 30, 2015. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 6/30/15 | Gain/(Loss) | Income | at 6/30/15 | |||||||||||||||
Janus Multi-Sector Income Fund | |||||||||||||||||||||
Janus Cash Liquidity Fund LLC | 587,152 | 21,494,576 | (21,029,389) | 1,052,339 | $ | – | $ | 686 | $ | 1,052,339 | |||||||||||
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 June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Janus Multi-Sector Income Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Asset-Backed/Commercial Mortgage-Backed Securities | $ | – | $ | 4,177,688 | $ | – | |||||
Bank Loans and Mezzanine Loans | – | 1,697,268 | – | ||||||||
Common Stocks | 177,491 | – | – | ||||||||
Corporate Bonds | – | 10,020,344 | – | ||||||||
Mortgage-Backed Securities | – | 1,797,764 | – | ||||||||
Preferred Stocks | – | 175,776 | – | ||||||||
U.S. Treasury Notes/Bonds | – | 937,851 | – | ||||||||
Investment Companies | – | 1,052,339 | – | ||||||||
Total Investments in Securities | $ | 177,491 | $ | 19,859,030 | $ | – | |||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 1,423 | $ | – | |||||
Total Assets | $ | 177,491 | $ | 19,860,453 | $ | – | |||||
(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 | 13
Table of Contents
Statement of Assets and Liabilities
As of June 30, 2015 | Janus Multi-Sector Income Fund | |||
Assets: | ||||
Investments, at cost | $ | 20,258,606 | ||
Unaffiliated investments, at value | $ | 18,984,182 | ||
Affiliated investments, at value | 1,052,339 | |||
Cash | 15,315 | |||
Forward currency contracts | 1,423 | |||
Non-interested Trustees’ deferred compensation | 387 | |||
Receivables: | ||||
Investments sold | 145,363 | |||
Fund shares sold | 3,216 | |||
Dividends | 24 | |||
Dividends from affiliates | 111 | |||
Interest | 205,522 | |||
Due from adviser | 18,894 | |||
Other assets | 8 | |||
Total Assets | 20,426,784 | |||
Liabilities: | ||||
Payables: | ||||
Investments purchased | 903,580 | |||
Fund shares repurchased | 2,988 | |||
Dividends | 395 | |||
Advisory fees | 9,554 | |||
Fund administration fees | 152 | |||
Transfer agent fees and expenses | 7,446 | |||
12b-1 Distribution and shareholder servicing fees | 3,005 | |||
Non-interested Trustees’ fees and expenses | 109 | |||
Non-interested Trustees’ deferred compensation fees | 387 | |||
Accrued expenses and other payables | 67,367 | |||
Total Liabilities | 994,983 | |||
Net Assets | $ | 19,431,801 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
14 | JUNE 30, 2015
Table of Contents
As of June 30, 2015 | Janus Multi-Sector Income Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 19,759,773 | ||
Undistributed net investment income/(loss) | 30,476 | |||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | (137,786) | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (220,662) | |||
Total Net Assets | $ | 19,431,801 | ||
Net Assets - Class A Shares | $ | 2,222,007 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 225,917 | |||
Net Asset Value Per Share(1) | $ | 9.84 | ||
Maximum Offering Price Per Share(2) | $ | 10.33 | ||
Net Assets - Class C Shares | $ | 1,972,038 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 200,497 | |||
Net Asset Value Per Share(1) | $ | 9.84 | ||
Net Assets - Class D Shares | $ | 5,208,492 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 529,563 | |||
Net Asset Value Per Share | $ | 9.84 | ||
Net Assets - Class I Shares | $ | 1,805,243 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 183,540 | |||
Net Asset Value Per Share | $ | 9.84 | ||
Net Assets - Class N Shares | $ | 2,031,040 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 206,492 | |||
Net Asset Value Per Share | $ | 9.84 | ||
Net Assets - Class S Shares | $ | 1,808,701 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 183,888 | |||
Net Asset Value Per Share | $ | 9.84 | ||
Net Assets - Class T Shares | $ | 4,384,280 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 445,759 | |||
Net Asset Value Per Share | $ | 9.84 |
(1) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(2) | Maximum offering price is computed at 100/95.25 of net asset value. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statement of Operations
For the year ended June 30, 2015 | Janus Multi-Sector Income Fund | |||
Investment Income: | ||||
Interest | $ | 808,069 | ||
Dividends | 6,580 | |||
Dividends from affiliates | 686 | |||
Other income | 9,160 | |||
Total Investment Income | 824,495 | |||
Expenses: | ||||
Advisory fees | 96,026 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 4,947 | |||
Class C Shares | 18,793 | |||
Class S Shares | 4,528 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 4,808 | |||
Class S Shares | 4,528 | |||
Class T Shares | 6,533 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 210 | |||
Class C Shares | 92 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 240 | |||
Class C Shares | 279 | |||
Class D Shares | 1,089 | |||
Class I Shares | 58 | |||
Class N Shares | 55 | |||
Class S Shares | 14 | |||
Class T Shares | 115 | |||
Shareholder reports expense | 8,599 | |||
Registration fees | 89,790 | |||
Custodian fees | 5,711 | |||
Professional fees | 63,068 | |||
Non-interested Trustees’ fees and expenses | 313 | |||
Fund administration fees | 1,459 | |||
Accounting systems fee expense | 58,001 | |||
Other expenses | 1,581 | |||
Total Expenses | 370,837 | |||
Less: Excess Expense Reimbursement | (209,597) | |||
Net Expenses | 161,240 | |||
Net Investment Income/(Loss) | 663,255 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | (31,020) | |||
Total Net Realized Gain/(Loss) on Investments | (31,020) | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (324,435) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (324,435) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 307,800 |
See Notes to Financial Statements.
16 | JUNE 30, 2015
Table of Contents
Statements of Changes in Net Assets
Janus Multi-Sector | ||||||||
Income Fund | ||||||||
For each year or period ended June 30 | 2015 | 2014(1) | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 663,255 | $ | 159,090 | ||||
Net realized gain/(loss) on investments | (31,020) | 85,595 | ||||||
Change in unrealized net appreciation/depreciation | (324,435) | 103,773 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 307,800 | 348,458 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income | ||||||||
Class A Shares | (94,486) | (22,706) | ||||||
Class C Shares | (75,435) | (18,544) | ||||||
Class D Shares | (195,358) | (29,980) | ||||||
Class I Shares | (89,583) | (24,140) | ||||||
Class N Shares | (98,994) | (24,154) | ||||||
Class S Shares | (82,267) | (21,601) | ||||||
Class T Shares | (123,095) | (23,238) | ||||||
Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | (7,921) | – | ||||||
Class C Shares | (7,260) | – | ||||||
Class D Shares | (14,847) | – | ||||||
Class I Shares | (7,035) | – | ||||||
Class N Shares | (8,072) | – | ||||||
Class S Shares | (7,171) | – | ||||||
Class T Shares | (8,343) | – | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (819,867) | (164,363) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 456,569 | 1,714,286 | ||||||
Class C Shares | 201,544 | 1,754,568 | ||||||
Class D Shares | 3,813,409 | 2,684,391 | ||||||
Class I Shares | – | 1,714,286 | ||||||
Class N Shares | 306,724 | 1,714,286 | ||||||
Class S Shares | 12,306 | 1,758,398 | ||||||
Class T Shares | 3,125,275 | 1,787,868 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 102,379 | 22,706 | ||||||
Class C Shares | 82,695 | 18,544 | ||||||
Class D Shares | 204,192 | 29,686 | ||||||
Class I Shares | 96,618 | 24,140 | ||||||
Class N Shares | 107,066 | 24,154 | ||||||
Class S Shares | 89,438 | 21,601 | ||||||
Class T Shares | 129,983 | 23,238 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (40,349) | – | ||||||
Class C Shares | (52,950) | (77) | ||||||
Class D Shares | (1,370,172) | (58,720) | ||||||
Class N Shares | (86,469) | – | ||||||
Class S Shares | (38,699) | (4,120) | ||||||
Class T Shares | (602,984) | (6,037) |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Statements of Changes in Net Assets (continued)
Janus Multi-Sector | ||||||||
Income Fund | ||||||||
For each year or period ended June 30 | 2015 | 2014(1) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | 6,536,575 | 13,223,198 | ||||||
Net Increase/(Decrease) in Net Assets | 6,024,508 | 13,407,293 | ||||||
Net Assets: | ||||||||
Beginning of period | 13,407,293 | – | ||||||
End of period | $ | 19,431,801 | $ | 13,407,293 | ||||
Undistributed Net Investment Income/(Loss) | $ | 30,476 | $ | 7,870 |
(1) | Period from February 28, 2014 (inception date) through June 30, 2014. |
See Notes to Financial Statements.
18 | JUNE 30, 2015
Table of Contents
Financial Highlights
Class A Shares
Janus Multi- | ||||||||||
Sector | ||||||||||
Income Fund | ||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014(1) | ||||||||
Net Asset Value, Beginning of Period | $10.14 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(2) | 0.41 | 0.13 | ||||||||
Net realized and unrealized gain/(loss) | (0.19) | 0.14 | ||||||||
Total from Investment Operations | 0.22 | 0.27 | ||||||||
Less Dividends and Distributions: | ||||||||||
Dividends (from net investment income) | (0.48) | (0.13) | ||||||||
Distributions (from capital gains) | (0.04) | – | ||||||||
Total Dividends and Distributions | (0.52) | (0.13) | ||||||||
Net Asset Value, End of Period | $9.84 | $10.14 | ||||||||
Total Return* | 2.19% | 2.73% | ||||||||
Net Assets, End of Period (in thousands) | $2,222 | $1,762 | ||||||||
Average Net Assets for the Period (in thousands) | $1,977 | $1,676 | ||||||||
Ratios to Average Net Assets: | ||||||||||
Ratio of Gross Expenses** | 2.29% | 6.12% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.99% | 1.00% | ||||||||
Ratio of Net Investment Income/(Loss)** | 4.16% | 3.89% | ||||||||
Portfolio Turnover Rate | 132% | 74% |
Class C Shares
Janus Multi- | ||||||||||
Sector | ||||||||||
Income Fund | ||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014(1) | ||||||||
Net Asset Value, Beginning of Period | $10.14 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(2) | 0.34 | 0.11 | ||||||||
Net realized and unrealized gain/(loss) | (0.20) | 0.14 | ||||||||
Total from Investment Operations | 0.14 | 0.25 | ||||||||
Less Dividends and Distributions: | ||||||||||
Dividends (from net investment income) | (0.40) | (0.11) | ||||||||
Distributions (from capital gains) | (0.04) | – | ||||||||
Total Dividends and Distributions | (0.44) | (0.11) | ||||||||
Net Asset Value, End of Period | $9.84 | $10.14 | ||||||||
Total Return* | 1.44% | 2.48% | ||||||||
Net Assets, End of Period (in thousands) | $1,972 | $1,798 | ||||||||
Average Net Assets for the Period (in thousands) | $1,879 | $1,685 | ||||||||
Ratios to Average Net Assets: | ||||||||||
Ratio of Gross Expenses** | 3.04% | 6.87% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.74% | 1.75% | ||||||||
Ratio of Net Investment Income/(Loss)** | 3.40% | 3.14% | ||||||||
Portfolio Turnover Rate | 132% | 74% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from February 28, 2014 (inception date) through June 30, 2014. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
Janus Investment Fund | 19
Table of Contents
Financial Highlights (continued)
Class D Shares
Janus Multi- | ||||||||||
Sector | ||||||||||
Income Fund | ||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014(1) | ||||||||
Net Asset Value, Beginning of Period | $10.14 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(2) | 0.43 | 0.13 | ||||||||
Net realized and unrealized gain/(loss) | (0.20) | 0.14 | ||||||||
Total from Investment Operations | 0.23 | 0.27 | ||||||||
Less Dividends and Distributions: | ||||||||||
Dividends (from net investment income) | (0.49) | (0.13) | ||||||||
Distributions (from capital gains) | (0.04) | – | ||||||||
Total Dividends and Distributions | (0.53) | (0.13) | ||||||||
Net Asset Value, End of Period | $9.84 | $10.14 | ||||||||
Total Return* | 2.32% | 2.72% | ||||||||
Net Assets, End of Period (in thousands) | $5,208 | $2,690 | ||||||||
Average Net Assets for the Period (in thousands) | $3,998 | $2,204 | ||||||||
Ratios to Average Net Assets: | ||||||||||
Ratio of Gross Expenses** | 2.22% | 6.05% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.87% | 1.03% | ||||||||
Ratio of Net Investment Income/(Loss)** | 4.30% | 3.90% | ||||||||
Portfolio Turnover Rate | 132% | 74% |
Class I Shares
Janus Multi- | ||||||||||
Sector | ||||||||||
Income Fund | ||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014(1) | ||||||||
Net Asset Value, Beginning of Period | $10.14 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(2) | 0.44 | 0.14 | ||||||||
Net realized and unrealized gain/(loss) | (0.20) | 0.14 | ||||||||
Total from Investment Operations | 0.24 | 0.28 | ||||||||
Less Dividends and Distributions: | ||||||||||
Dividends (from net investment income) | (0.50) | (0.14) | ||||||||
Distributions (from capital gains) | (0.04) | – | ||||||||
Total Dividends and Distributions | (0.54) | (0.14) | ||||||||
Net Asset Value, End of Period | $9.84 | $10.14 | ||||||||
Total Return* | 2.47% | 2.81% | ||||||||
Net Assets, End of Period (in thousands) | $1,805 | $1,763 | ||||||||
Average Net Assets for the Period (in thousands) | $1,777 | $1,677 | ||||||||
Ratios to Average Net Assets: | ||||||||||
Ratio of Gross Expenses** | 2.02% | 5.86% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.72% | 0.74% | ||||||||
Ratio of Net Investment Income/(Loss)** | 4.41% | 4.15% | ||||||||
Portfolio Turnover Rate | 132% | 74% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from February 28, 2014 (inception date) through June 30, 2014. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
20 | JUNE 30, 2015
Table of Contents
Class N Shares
Janus Multi- | ||||||||||
Sector | ||||||||||
Income Fund | ||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014(1) | ||||||||
Net Asset Value, Beginning of Period | $10.14 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(2) | 0.44 | 0.14 | ||||||||
Net realized and unrealized gain/(loss) | (0.20) | 0.14 | ||||||||
Total from Investment Operations | 0.24 | 0.28 | ||||||||
Less Dividends and Distributions: | ||||||||||
Dividends (from net investment income) | (0.50) | (0.14) | ||||||||
Distributions (from capital gains) | (0.04) | – | ||||||||
Total Dividends and Distributions | (0.54) | (0.14) | ||||||||
Net Asset Value, End of Period | $9.84 | $10.14 | ||||||||
Total Return* | 2.47% | 2.82% | ||||||||
Net Assets, End of Period (in thousands) | $2,031 | $1,763 | ||||||||
Average Net Assets for the Period (in thousands) | $1,957 | $1,677 | ||||||||
Ratios to Average Net Assets: | ||||||||||
Ratio of Gross Expenses** | 2.02% | 5.85% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.72% | 0.74% | ||||||||
Ratio of Net Investment Income/(Loss)** | 4.42% | 4.15% | ||||||||
Portfolio Turnover Rate | 132% | 74% |
Class S Shares
Janus Multi- | ||||||||||
Sector | ||||||||||
Income Fund | ||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014(1) | ||||||||
Net Asset Value, Beginning of Period | $10.14 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(2) | 0.39 | 0.12 | ||||||||
Net realized and unrealized gain/(loss) | (0.20) | 0.14 | ||||||||
Total from Investment Operations | 0.19 | 0.26 | ||||||||
Less Dividends and Distributions: | ||||||||||
Dividends (from net investment income) | (0.45) | (0.12) | ||||||||
Distributions (from capital gains) | (0.04) | – | ||||||||
Total Dividends and Distributions | (0.49) | (0.12) | ||||||||
Net Asset Value, End of Period | $9.84 | $10.14 | ||||||||
Total Return* | 1.96% | 2.65% | ||||||||
Net Assets, End of Period (in thousands) | $1,809 | $1,801 | ||||||||
Average Net Assets for the Period (in thousands) | $1,811 | $1,699 | ||||||||
Ratios to Average Net Assets: | ||||||||||
Ratio of Gross Expenses** | 2.52% | 6.35% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.22% | 1.25% | ||||||||
Ratio of Net Investment Income/(Loss)** | 3.92% | 3.65% | ||||||||
Portfolio Turnover Rate | 132% | 74% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from February 28, 2014 (inception date) through June 30, 2014. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
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Financial Highlights (continued)
Class T Shares
Janus Multi- | ||||||||||
Sector | ||||||||||
Income Fund | ||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014(1) | ||||||||
Net Asset Value, Beginning of Period | $10.14 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(2) | 0.42 | 0.13 | ||||||||
Net realized and unrealized gain/(loss) | (0.20) | 0.14 | ||||||||
Total from Investment Operations | 0.22 | 0.27 | ||||||||
Less Dividends and Distributions: | ||||||||||
Dividends (from net investment income) | (0.48) | (0.13) | ||||||||
Distributions (from capital gains) | (0.04) | – | ||||||||
Total Dividends and Distributions | (0.52) | (0.13) | ||||||||
Net Asset Value, End of Period | $9.84 | $10.14 | ||||||||
Total Return* | 2.21% | 2.73% | ||||||||
Net Assets, End of Period (in thousands) | $4,384 | $1,831 | ||||||||
Average Net Assets for the Period (in thousands) | $2,607 | $1,716 | ||||||||
Ratios to Average Net Assets: | ||||||||||
Ratio of Gross Expenses** | 2.26% | 6.10% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.97% | 1.00% | ||||||||
Ratio of Net Investment Income/(Loss)** | 4.20% | 3.89% | ||||||||
Portfolio Turnover Rate | 132% | 74% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from February 28, 2014 (inception date) through June 30, 2014. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements.
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Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
Janus Multi-Sector Income Fund (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in income-producing securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
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 evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices
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Notes to Financial Statements (continued)
are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of June 30, 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 year. 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
24 | JUNE 30, 2015
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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, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
Dividends are declared daily and distributed monthly for the Fund. Realized capital gains, if any, are declared and distributed in December. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
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 year ended June 30, 2015 is discussed in further detail
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Notes to Financial Statements (continued)
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 year, 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 year ended June 30, 2015.
Fund | Sold | |||||
Janus Multi-Sector Income Fund | $ | 1,050,169 | ||||
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 June 30, 2015.
Fair Value of Derivative Instruments as of June 30, 2015
Asset Derivatives | ||||||||
Derivatives not accounted for as hedging instruments | Statement of Assets and Liabilities Location | Fair Value | ||||||
Janus Multi-Sector Income Fund | ||||||||
Currency Contracts | Forward currency contracts | $ | 1,423 | |||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the year ended June 30, 2015.
The effect of Derivative Instruments on the Statements of Operations for the year ended June 30, 2015
Amount of Realized Gain/(Loss) on Derivatives Recognized in Income | ||||
Derivatives not accounted for as hedging instruments | Investments and foreign currency transactions | |||
Janus Multi-Sector Income Fund | ||||
Currency Contracts | $ | 179,123 | ||
Change in Unrealized Appreciation/Depreciation on Derivatives Recognized in Income | ||||
Investments, foreign currency translations and non-interested | ||||
Derivatives not accounted for as hedging instruments | Trustees’ deferred compensation | |||
Janus Multi-Sector Income Fund | ||||
Currency Contracts | $ | 13,704 | ||
Please see the Fund’s Statement of Operations for the Fund’s “Net Realized and Unrealized Gain/(Loss) on Investments.”
3. | Other Investments and Strategies |
Additional Investment Risk
The Fund may be invested in lower-rated debt securities that have a higher risk of default or loss of value since these securities may be sensitive to economic changes, political changes or adverse developments specific to the issuer.
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient 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 (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.
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 June 30, 2015.
• | Bank Loans – Bank loans are obligations of companies or other entities entered into in connection with recapitalizations, acquisitions, and refinancings. The Fund’s investments in bank loans are generally acquired as a participation interest in, or assignment of, loans originated by a lender or other financial institution. These investments may include institutionally-traded floating and fixed-rate debt securities. | |
• | Floating Rate Loans – Floating rate loans are debt securities that have floating interest rates, that adjust periodically, and are tied to a benchmark |
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lending rate, such as the London Interbank Offered Rate (“LIBOR”). In other cases, the lending rate could be tied to the prime rate offered by one or more major U.S. banks or the rate paid on large certificates of deposit traded in the secondary markets. If the benchmark lending rate changes, the rate payable to lenders under the loan will change at the next scheduled adjustment date specified in the loan agreement. Floating rate loans are typically issued to companies (“borrowers”) in connection with recapitalizations, acquisitions, and refinancings. Floating rate loan investments are generally below investment grade. Senior floating rate loans are secured by specific collateral of a borrower and are senior in the borrower’s capital structure. The senior position in the borrower’s capital structure generally gives holders of senior loans a claim on certain of the borrower’s assets that is senior to subordinated debt and preferred and common stock in the case of a borrower’s default. Floating rate loan investments may involve foreign borrowers, and investments may be denominated in foreign currencies. Floating rate loans often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The Fund may invest in obligations of borrowers who are in bankruptcy proceedings. While the Fund generally expects to invest in fully funded term loans, certain of the loans in which the Fund may invest include revolving loans, bridge loans, and delayed draw term loans. |
Purchasers of floating rate loans may pay and/or receive certain fees. The Fund may receive fees such as covenant waiver fees or prepayment penalty fees. The Fund may pay fees such as facility fees. Such fees may affect the Fund’s return. |
• | Mezzanine Loans – Mezzanine loans are secured by the stock of the company that owns the assets. Mezzanine loans are a hybrid of debt and equity financing that is typically used to fund the expansion of existing companies. A mezzanine loan is composed of debt capital that gives the lender the right to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. Mezzanine loans typically are the most subordinated debt obligation in an issuer’s capital structure. |
Mortgage- and Asset-Backed Securities
Mortgage- and asset-backed securities represent interests in “pools��� of commercial or residential mortgages or other assets, including consumer loans or receivables. The Fund may purchase fixed or variable rate commercial or residential 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 Mae and Freddie Mac securities 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
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Notes to Financial Statements (continued)
insurance, there is no assurance that guarantors or insurers will meet their obligations.
Mortgage- and asset-backed securities are also subject to extension risk, which is the risk that rising interest rates could cause mortgages or other obligations underlying these securities to be paid more slowly than expected, increasing the Fund’s sensitivity to interest rate changes and causing its price to decline.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following table presents gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see either the “Fair Value of Derivative Instruments as of June 30, 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 | ||||||||||||||
JPMorgan Chase & Co. | $ | 1,423 | $ | – | $ | – | $ | 1,423 | ||||||||||
(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
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controls the repayment of sovereign debt may not be willing or able to repay the principal and/or to pay the interest on its sovereign debt in a timely manner. A sovereign debtor’s willingness or ability to satisfy its debt obligation may be affected by various factors, including its cash flow situation, the extent of its foreign currency reserves, the availability of foreign exchange when a payment is due, the relative size of its debt position in relation to its economy as a whole, the sovereign debtor’s policy toward international lenders, and local political constraints to which the governmental entity may be subject. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies, and other entities. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance, or repay principal or interest when due may result in the cancellation of third party commitments to lend funds to the sovereign debtor, which may further impair such debtor’s ability or willingness to timely service its debts. The Fund may be requested to participate in the rescheduling of such sovereign debt and to extend further loans to governmental entities, which may adversely affect the Fund’s holdings. In the event of default, there may be limited or no legal remedies for collecting sovereign debt and there may be no bankruptcy proceedings through which the Fund may collect all or part of the sovereign debt that a governmental entity has not repaid.
When-Issued and Delayed Delivery Securities
The Fund may purchase or sell securities on a when-issued or delayed delivery basis. When-issued and delayed delivery securities in which the Fund may invest include U.S. Treasury Securities, municipal bonds, bank loans, and other similar instruments. The price of the underlying securities and date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Losses may arise due to changes in the market value of the securities or from the inability of counterparties to meet the terms of the contract. In connection with such purchases, the Fund may hold liquid assets as collateral with the Fund’s custodian sufficient to cover the purchase price.
4. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | Contractual | |||||||||
Net Assets | Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Janus Multi-Sector Income Fund | First $ | 200 Million | 0.60 | |||||||
Next $ | 500 Million | 0.57 | ||||||||
Over $ | 700 Million | 0.55 | ||||||||
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
Janus Multi-Sector Income Fund | 0.71 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
For a period of three years subsequent to the Fund’s commencement of operations or until the Fund’s assets exceed the first breakpoint in the investment advisory fee schedule, whichever occurs first, Janus Capital may recover from the Fund fees and expenses previously waived or reimbursed, which could then be considered a deferral, if the Fund’s expense ratio, including recovered expenses, falls below the expense limit. If applicable, this amount is disclosed as “Recoupment expense” on the Statement of Operations. During the year ended June 30, 2015, Janus Capital reimbursed the Fund $209,597 of fees and expenses that are eligible for recoupment. As of June 30, 2015, the aggregate amount of recoupment that may potentially be made to Janus Capital is $421,357. The recoupment of such reimbursements expires February 28, 2017.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to
Janus Investment Fund | 31
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Notes to Financial Statements (continued)
investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund
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administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the year ended June 30, 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 June 30, 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 year ended June 30, 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 $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 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 product compliant with Rule 2a-7 under the 1940 Act. There are no restrictions on the Fund’s ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Fund to Janus Cash Liquidity Fund LLC. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the year ended June 30, 2015 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 4.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the year ended June 30, 2015, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Janus Multi-Sector Income Fund | $ | 2,198 | ||||
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 year ended June 30, 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 year ended June 30, 2015.
Janus Investment Fund | 33
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Notes to Financial Statements (continued)
As of June 30, 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 Multi-Sector Income Fund - Class A Shares | 81 | % | 9 | % | ||||||
Janus Multi-Sector Income Fund - Class C Shares | 91 | 9 | ||||||||
Janus Multi-Sector Income Fund - Class D Shares | 35 | 9 | ||||||||
Janus Multi-Sector Income Fund - Class I Shares | 100 | 9 | ||||||||
Janus Multi-Sector Income Fund - Class N Shares | 89 | 9 | ||||||||
Janus Multi-Sector Income Fund - Class S Shares | 100 | 9 | ||||||||
Janus Multi-Sector Income Fund - Class T Shares | 41 | 9 | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
5. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation, derivatives, and foreign currency contract adjustments. 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 Fund has elected to defer post-October losses and qualified late-year losses as noted in the table below. These losses will be deferred for tax purposes and recognized during the next fiscal year.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
Janus Multi-Sector Income Fund | $ | 30,884 | $ | – | $ | (31,596) | $ | – | $ | (103,631) | $ | (385) | $ | (223,244) | |||||||||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of June 30, 2015, 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 June 30, 2015
Accumulated | |||||||||||||||
No Expiration | Capital | ||||||||||||||
Fund | Short-Term | Long-Term | Losses | ||||||||||||
Janus Multi-Sector Income Fund | $ | (31,596) | $ | – | $ | (31,596) | |||||||||
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 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.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
Janus Multi-Sector Income Fund | $ | 20,259,765 | $ | 167,497 | $ | (390,741) | ||||||||
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. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the year ended June 30, 2015
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Multi-Sector Income Fund | $ | 819,867 | $ | – | $ | – | $ | – | ||||||||||||||
For the year ended June 30, 2014
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Multi-Sector Income Fund | $ | 164,363 | $ | – | $ | – | $ | – | ||||||||||||||
Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
Janus Multi-Sector Income Fund | $– | $118,569 | $(118,569) | |||||||||||
6. | Capital Share Transactions |
Janus Multi-Sector | ||||||||||
Income Fund | ||||||||||
For each year or period ended June 30 | 2015 | 2014(1) | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 46,036 | 171,428 | ||||||||
Reinvested dividends and distributions | 10,304 | 2,250 | ||||||||
Shares repurchased | (4,101) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 52,239 | 173,678 | ||||||||
Shares Outstanding, Beginning of Period | 173,678 | – | ||||||||
Shares Outstanding, End of Period | 225,917 | 173,678 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 20,305 | 175,403 | ||||||||
Reinvested dividends and distributions | 8,324 | 1,837 | ||||||||
Shares repurchased | (5,364) | (8) | ||||||||
Net Increase/(Decrease) in Fund Shares | 23,265 | 177,232 | ||||||||
Shares Outstanding, Beginning of Period | 177,232 | – | ||||||||
Shares Outstanding, End of Period | 200,497 | 177,232 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 381,811 | 268,015 | ||||||||
Reinvested dividends and distributions | 20,553 | 2,940 | ||||||||
Shares repurchased | (137,958) | (5,798) | ||||||||
Net Increase/(Decrease) in Fund Shares | 264,406 | 265,157 | ||||||||
Shares Outstanding, Beginning of Period | 265,157 | – | ||||||||
Shares Outstanding, End of Period | 529,563 | 265,157 |
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Notes to Financial Statements (continued)
Janus Multi-Sector | ||||||||||
Income Fund | ||||||||||
For each year or period ended June 30 | 2015 | 2014(1) | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | – | 171,429 | ||||||||
Reinvested dividends and distributions | 9,719 | 2,392 | ||||||||
Shares repurchased | – | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 9,719 | 173,821 | ||||||||
Shares Outstanding, Beginning of Period | 173,821 | – | ||||||||
Shares Outstanding, End of Period | 183,540 | 173,821 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 30,600 | 171,429 | ||||||||
Reinvested dividends and distributions | 10,774 | 2,393 | ||||||||
Shares repurchased | (8,704) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 32,670 | 173,822 | ||||||||
Shares Outstanding, Beginning of Period | 173,822 | – | ||||||||
Shares Outstanding, End of Period | 206,492 | 173,822 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 1,235 | 175,818 | ||||||||
Reinvested dividends and distributions | 8,999 | 2,140 | ||||||||
Shares repurchased | (3,898) | (406) | ||||||||
Net Increase/(Decrease) in Fund Shares | 6,336 | 177,552 | ||||||||
Shares Outstanding, Beginning of Period | 177,552 | – | ||||||||
Shares Outstanding, End of Period | 183,888 | 177,552 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 312,945 | 178,754 | ||||||||
Reinvested dividends and distributions | 13,085 | 2,302 | ||||||||
Shares repurchased | (60,730) | (597) | ||||||||
Net Increase/(Decrease) in Fund Shares | 265,300 | 180,459 | ||||||||
Shares Outstanding, Beginning of Period | 180,459 | – | ||||||||
Shares Outstanding, End of Period | 445,759 | 180,459 | ||||||||
(1) Period from February 28, 2014 (inception date) through June 30, 2014. |
7. | Purchases and Sales of Investment Securities |
For the year ended June 30, 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 Multi-Sector Income Fund | $ | 23,524,177 | $ | 16,832,363 | $ | 3,607,257 | $ | 3,667,785 | ||||||
8. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of Janus Multi-Sector Income Fund:
of Janus Multi-Sector Income Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Janus Multi-Sector Income Fund (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
Janus Investment Fund | 37
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (toll free); (ii) on the Fund’s website at janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding the Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through janus.com/proxyvoting and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Fund files its complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Fund’s Form N-Q: (i) is available on the SEC’s website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-0020 (toll free).
APPROVAL OF ADVISORY AGREEMENTS DURING THE PERIOD
The Trustees of Janus Investment Fund, each of whom serves as an “independent” Trustee (the “Trustees”), and none of whom is affiliated with Janus Capital, the investment adviser of Janus Multi-Sector Income Fund and Janus Unconstrained Bond Fund (renamed Janus Global Unconstrained Bond Fund effective October 6, 2014) (each a “New Fund” and collectively, the “New Funds”), met on November 7, 2013 to consider the proposed investment advisory agreement for each New Fund. In the course of their consideration of each of those agreements, the Trustees met in executive session and were advised by their independent legal counsel. In this regard, prior to the meeting and at earlier meetings, the Trustees received and reviewed extensive information provided by Janus Capital in response to requests of the Trustees and their counsel, and also considered information provided by their independent fee consultant. The Trustees also had been provided and had considered, and were in the process of considering, various data and information in connection with their annual consideration of the investment advisory agreements in place with Janus Capital, and certain of that data was relevant to their consideration of the proposed agreement with Janus Capital for each New Fund. Based on their evaluation of the information available to them, the Trustees unanimously approved the investment advisory agreement for each New Fund for an initial term through February 2016, subject to earlier termination as provided for in the agreements.
In considering the agreements and reaching their conclusions, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services to be provided by Janus Capital, taking into account the investment objective and strategies of each New Fund and the similar type services currently provided by Janus Capital to other funds in the complex. In addition, the Trustees reviewed the resources and key personnel of Janus Capital that will be providing investment and risk management services to each New Fund. The Trustees also considered other services provided to the New Funds by Janus Capital, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees noted the use of Quantum, a system built by Janus Capital, to analyze portfolio risk. The Trustees considered Janus Capital’s role as administrator to each New Fund, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to each New Fund’s investment restrictions, providing support services for the Trustees and Trustee committees, communicating with shareholders and overseeing the activities of other service providers, including monitoring compliance with various policies and procedures of the New Funds and with applicable securities laws and regulations.
The Trustees concluded that the nature, extent and quality of the services to be provided by Janus Capital were appropriate and consistent with the terms of each New Fund’s proposed investment advisory agreement. They also concluded that Janus Capital had sufficient personnel, with the appropriate education and experience, to serve the New Funds effectively.
Costs of Services Provided
The Trustees noted the information regarding the proposed fees and expenses of each New Fund in comparison to similar information for other comparable funds. The Trustees noted that they had previously reviewed, and were in the process of reviewing, management fees charged by Janus Capital to nonmutual fund clients, including those for which Janus Capital provides only portfolio management services. The Trustees noted servicing that is provided by Janus Capital for each
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New Fund relative to those other clients, including regulatory compliance and administration services, and that, in serving the New Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients.
The Trustees concluded that the proposed advisory fee payable by each New Fund was reasonable in relation to the nature, extent and quality of the services to be provided, taking into account the fees charged by other advisers for managing comparable mutual funds with similar strategies, the fees Janus Capital charges to other clients, and the expense limitation agreement for each New Fund agreed to by Janus Capital. The Trustees noted the differences in investment style between each New Fund that resulted in differences in fee rates, taking into consideration the peer group selection and the fees charged by those peers.
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of each New Fund increase. The Trustees noted that the proposed annual advisory fee rates, which included potential breakpoints as assets increased, provided the opportunity for shareholders to share the benefits of any economies of scale that may be present. The Trustees also noted that each New Fund is part of the overall Janus funds complex, which means, among other things, that the New Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Janus funds.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates from their relationships with the New Funds. They recognized that two affiliates of Janus Capital separately serve the New Funds as transfer agent and distributor, respectively. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates pursuant to the agreements, and the fees to be paid by each New Fund under those agreements, each New Fund and Janus Capital may potentially benefit from their relationship with each other in other ways. The Trustees considered potential benefits to Janus Capital and its affiliates from Janus Capital’s participation in creditor committees formed to address issues related to investments by each New Fund. They concluded that the success of the New Funds could attract other business to Janus Capital or other Janus funds, and that the success of Janus Capital could enhance Janus Capital’s ability to serve the New Funds.
After full consideration of the above factors, as well as other factors, the Trustees, all of whom are independent Trustees, determined to approve the investment advisory agreement for each New Fund.
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Useful Information About Your Fund Report (unaudited)
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 June 30, 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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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
Janus Investment Fund | 45
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
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OFFICERS
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
John Kerschner 151 Detroit Street Denver, CO 80206 DOB: 1967 | Executive Vice President and Co-Portfolio Manager Janus Multi-Sector Income Fund | 2/14-Present | Research Analyst for Janus Capital. | |||
John Lloyd 151 Detroit Street Denver, CO 80206 DOB: 1975 | Executive Vice President and Co-Portfolio Manager Janus Multi-Sector Income Fund | 2/14-Present | Research Analyst for Janus Capital. | |||
Seth Meyer 151 Detroit Street Denver, CO 80206 DOB: 1976 | Executive Vice President and Co-Portfolio Manager Janus Multi-Sector Income Fund | 2/14-Present | Research Analyst for Janus Capital. | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
Janus Investment Fund | 47
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Trustees and Officers (unaudited) (continued)
OFFICERS (continued)
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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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-0815-93826 | 125-02-93028 08-15 |
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annual report
June 30, 2015
Janus Real Return Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
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Janus Real Return Fund
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Janus Real Return Fund (unaudited)
FUND SNAPSHOT The Fund employs a bottom-up, fundamentally driven investment process designed to protect against the potential for inflationary or deflationary environments. The portfolio invests across a broad range of fixed income securities, including short-duration high yield, to help maximize risk-adjusted returns and capital preservation. | Gibson Smith co-portfolio manager | Mayur Saigal co-portfolio manager | Darrell Watters co-portfolio manager |
PERFORMANCE OVERVIEW
For the 12-month period ended June 30, 2015, Janus Real Return Fund’s Class I Shares returned 0.42%. This compares with -2.05% for its primary benchmark, the Barclays U.S. 1-5 Year TIPS Index and 2.12% for the Fund’s secondary benchmark, the Consumer Price Index (CPI) + 2%.
MARKET ENVIRONMENT
The economic environment, especially as it pertains to inflation and real-return investments, was a dynamic one over the past twelve months with significant swings in energy prices and a strengthening U.S. dollar. The Federal Reserve (Fed) was widely assumed to be nearing the initiation of rate hikes while the Bank of Japan (BOJ) and European Central Bank (ECB) maintained accommodative policy, which helped catalyze a massive rally in the U.S. dollar. As measured by an index based on six major currencies, the dollar gained 25% over the period’s first nine months. The move, in effect, lowered the prices of imports flowing into the U.S., keeping a lid on inflation.
As a number of globally-traded commodities, including energy products, are priced in dollars, the strong currency exerted downward pressure on the prices of these raw materials. Also weighing on energy prices were concerns of a slowing global economy – especially in emerging markets – and excess supply within North America. At the height of the price collapse, front-month crude futures contracts had plummeted by roughly 60%. Headline inflation, which includes food and energy products, slid from a 1.6% annual rate to near 0%. Core inflation’s losses were more muted, dipping from 1.5% to below 1.25%.
The U.S. Treasury yield curve flattened during the period, although much of the gains of longer-dated securities were given up over the final few months. Long-dated Treasury yields fell through the end of 2014 as investors clamored for dollar-denominated assets. A winter lull in economic growth pushed yields down even further. The spring’s rebound in employment reversed this downward pressure. High-yield and investment-grade credit spreads widened during the period amid a flood of new issuance. Shareholder-friendly activity, which may not be friendly to bondholders, also weighed on bond prices.
PERFORMANCE DISCUSSION
The Fund outperformed its benchmark during the period. Contributing most to relative performance was our allocation to high-yield corporate credit. These securities comprise a significant portion of the Fund as we believe that short-duration high-yield securities offer more attractive risk adjusted returns than do Treasury Inflation-Protected Securities (TIPS). Given the Fed’s stated intention of raising policy rates, we see downside risks to TIPS as this process unfolds. Spread carry – or the excess income generated by holding securities – was the dominant factor in high-yield’s contribution. To a lesser degree, the spread carry of our investment-grade corporate credits also was a relative contributor. Our exposure to the “crossover” segment of corporate debt boosted performance. These are issuers that, in our view, have management teams committed to balance sheet discipline and improving cash flow generation, thus are candidates for ratings upgrades. They are also the securities that we believe offer some of the most attractive – and underappreciated – risk adjusted returns within the fixed income market.
On a sector level, banking, health care and home construction contributed most to outperformance. Conversely, given the weak energy environment, independent energy companies weighed most on performance, followed by environmental capital goods providers.
Also detracting from performance was our allocation to common stock. Our U.S. Treasurys holdings weighed on results, with our yield curve positioning being a chief source of the relative underperformance. With the expectation of rising rates in the U.S., our period-end Treasurys allocation stands lower than it was in June 2014. We have increased our corporate credit allocation,
Janus Investment Fund | 1
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Janus Real Return Fund (unaudited)
especially among high-yield issuers, as we believe these securities provide sufficient yield-cushion to compensate for potential losses in principal as rates start to rise. While still below the benchmark’s level, the Fund’s duration is also higher than the beginning-of-period level.
OUTLOOK
Multiple factors presently have the potential to impact the fixed income environment; chief among them remains the timing and pace of the Fed’s rate hikes. Data suggest that the central bank is achieving its dual mandate. Strong gains in payrolls have resumed and wage growth has shown signs of accelerating. At 5.3% the unemployment rate is nearing the range many would consider full-employment.
With economic expansion typically comes jobs, and after that, wage-driven inflation, as employers scramble for qualified workers. In a service-based economy like the U.S., wages have an outsized impact on inflation. Should this scenario play out as the Fed anticipates, inflation will eventually be on track toward policy makers’ 2% goal.
Core inflation has held steady as crude prices stabilized before any downward pressure bled into non-energy categories. The stabilization in the U.S. dollar after its rapid appreciation also aids the inflation outlook as continued gains in the currency would have made foreign products cheaper, thus keeping a lid on prices. The dollar, however, remains one of our wild cards. Deceleration in non-U.S. economies could send investors fleeing back toward dollar-denominated assets, forcing a resumption in the currency’s march upward.
Continued patches of softness may cause the Fed to delay its initial rate hike past the widely assumed September lift-off, but in our view, rates will rise – albeit cautiously – this year. We are mindful that we are quite possibly nearing the end of a credit cycle. Merger and acquisition activity, share buybacks, and debt issuance are up. The result is a deterioration of corporate balance sheets.
Over the past year we have sought to reduce risks in our portfolio and expect to maintain this defensive posture as the aforementioned risk factors play out. We have not seen such a confluence of potentially adverse forces for several years. Our binding principle of capital preservation is of utmost importance as we navigate the choppy waters ahead.
Thank you for your investment in Janus Real Return Fund.
2 | JUNE 30, 2015
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(unaudited)
Janus Real Return Fund At A Glance
Fund Profile
June 30, 2015
Weighted Average Maturity | 5.8 Years | |
Average Effective Duration* | 2.7 Years | |
30-day Current Yield** | ||
Class A Shares at NAV | ||
Without Reimbursement | 1.27% | |
With Reimbursement | 3.17% | |
Class A Shares at MOP | ||
Without Reimbursement | 1.21% | |
With Reimbursement | 3.02% | |
Class C Shares*** | ||
Without Reimbursement | 0.53% | |
With Reimbursement | 2.42% | |
Class D Shares | ||
Without Reimbursement | 1.34% | |
With Reimbursement | 3.24% | |
Class I Shares | ||
Without Reimbursement | 1.53% | |
With Reimbursement | 3.43% | |
Class S Shares | ||
Without Reimbursement | 1.03% | |
With Reimbursement | 2.93% | |
Class T Shares | ||
Without Reimbursement | 1.27% | |
With Reimbursement | 3.17% | |
Number of Bonds/Notes | 77 |
* | A theoretical measure of price volatility | |
** | Yield will fluctuate | |
*** | Does not include the 1.00% contingent deferred sales charge. |
Ratings† Summary – (% of Total Investments)
June 30, 2015
AA | 5.9% | |
A | 0.5% | |
BBB | 11.8% | |
BB | 50.1% | |
B | 18.7% | |
CCC | 3.9% | |
Not Rated | 0.3% | |
Other | 8.8% |
† | Credit ratings provided by Standard & Poor’s (S&P), an independent credit rating agency. Credit ratings range from AAA (highest) to D (lowest) based on S&P’s measures. Further information on S&P’s rating methodology may be found at www.standardandpoors.com. Other rating agencies may rate the same securities differently. Ratings are relative and subjective and are not absolute standards of quality. Credit quality does not remove market risk and is subject to change. “Not Rated” securities are not rated by S&P, but may be rated by other rating agencies and do not necessarily indicate low quality. “Other” includes cash equivalents, equity securities, and certain derivative instruments. |
Significant Areas of Investment – (% of Net Assets)
As of June 30, 2015
Asset Allocation – (% of Net Assets)
As of June 30, 2015
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Janus Real Return Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended June 30, 2015 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||
One | Since | Total Annual Fund | Net Annual Fund | ||||||
Year | Inception* | Operating Expenses | Operating Expenses | ||||||
Janus Real Return Fund – Class A Shares | |||||||||
NAV | 0.18% | 1.13% | 2.15% | 0.72% | |||||
MOP | –4.62% | –0.31% | |||||||
Janus Real Return Fund – Class C Shares | |||||||||
NAV | –0.48% | 0.38% | 2.90% | 1.47% | |||||
CDSC | –1.45% | 0.38% | |||||||
Janus Real Return Fund – Class D Shares(1) | 0.38% | 1.25% | 2.08% | 0.62% | |||||
Janus Real Return Fund – Class I Shares | 0.42% | 1.38% | 1.88% | 0.48% | |||||
Janus Real Return Fund – Class S Shares | –0.05% | 1.01% | 2.37% | 0.97% | |||||
Janus Real Return Fund – Class T Shares | 0.18% | 1.24% | 2.16% | 0.73% | |||||
Barclays U.S. 1-5 Year TIPS Index | –2.05% | 0.46% | |||||||
Consumer Price Index (CPI) + 2% | 2.12% | 3.34% | |||||||
Morningstar Quartile – Class I Shares | 2nd | 4th | |||||||
Morningstar Ranking – based on total returns for Multisector Bond Funds | 85/298 | 205/215 | |||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month–end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
Maximum Offering Price (MOP) returns include the maximum sales charge of 4.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
See important disclosures on the next page.
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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.
High-yield/high-risk bonds, also known as “junk” bonds, involve a greater risk of default and price volatility than U.S. Government and other high quality bonds. High-yield/high-risk bonds can experience sudden and sharp price swings which will affect net asset value.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility, lower liquidity 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 or yield, 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 13, 2011 | |
** | The Consumer Price Index (CPI) + 2% since inception returns are calculated from May 31, 2011. | |
(1) | Closed to certain new investors. |
Janus Investment Fund | 5
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Janus Real Return Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,019.60 | $ | 3.66 | $ | 1,000.00 | $ | 1,021.17 | $ | 3.66 | 0.73% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,015.80 | $ | 7.40 | $ | 1,000.00 | $ | 1,017.46 | $ | 7.40 | 1.48% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,020.10 | $ | 3.16 | $ | 1,000.00 | $ | 1,021.67 | $ | 3.16 | 0.63% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,020.90 | $ | 2.36 | $ | 1,000.00 | $ | 1,022.46 | $ | 2.36 | 0.47% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,018.40 | $ | 4.85 | $ | 1,000.00 | $ | 1,019.98 | $ | 4.86 | 0.97% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,019.60 | $ | 3.61 | $ | 1,000.00 | $ | 1,021.22 | $ | 3.61 | 0.72% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 181/365 (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 | JUNE 30, 2015
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Janus Real Return Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Asset-Backed/Commercial Mortgage-Backed Securities – 1.9% | ||||||||||
$267,600 | Mach One 2004-1A ULC 5.4500%, 5/28/40 (144A),‡ (cost $259,637) | $ | 267,600 | |||||||
Bank Loans and Mezzanine Loans – 1.1% | ||||||||||
Technology – 1.1% | ||||||||||
159,283 | Avago Technologies Cayman, Ltd. 3.7500%, 5/6/21‡ (cost $159,491) | 159,425 | ||||||||
Corporate Bonds – 81.0% | ||||||||||
Banking – 5.1% | ||||||||||
210,000 | Ally Financial, Inc. 3.2500%, 2/13/18 | 208,687 | ||||||||
100,000 | American Express Co. 6.8000%, 9/1/66‡ | 102,890 | ||||||||
66,000 | Bank of America Corp. 8.0000%µ | 69,630 | ||||||||
40,000 | Royal Bank of Scotland Group PLC 2.5500%, 9/18/15 | 40,112 | ||||||||
175,000 | Royal Bank of Scotland Group PLC 4.7000%, 7/3/18 | 180,835 | ||||||||
125,000 | Wells Fargo & Co. 7.9800%µ | 135,469 | ||||||||
737,623 | ||||||||||
Basic Industry – 3.2% | ||||||||||
70,000 | ArcelorMittal 4.5000%, 3/1/16 | 71,050 | ||||||||
203,000 | ArcelorMittal 5.2500%, 2/25/17 | 210,866 | ||||||||
50,000 | Ashland, Inc. 3.8750%, 4/15/18 | 51,375 | ||||||||
124,000 | Rockwood Specialties Group, Inc. 4.6250%, 10/15/20 | 129,115 | ||||||||
462,406 | ||||||||||
Brokerage – 0.7% | ||||||||||
65,000 | Ameriprise Financial, Inc. 7.5180%, 6/1/66‡ | 65,000 | ||||||||
34,000 | Raymond James Financial, Inc. 4.2500%, 4/15/16 | 34,850 | ||||||||
99,850 | ||||||||||
Capital Goods – 8.2% | ||||||||||
179,000 | ADS Tactical, Inc. 11.0000%, 4/1/18§ | 185,265 | ||||||||
274,000 | CNH Industrial Capital LLC 3.8750%, 11/1/15 | 274,685 | ||||||||
98,000 | CNH Industrial Capital LLC 3.6250%, 4/15/18 | 98,000 | ||||||||
13,000 | Exelis, Inc. 4.2500%, 10/1/16 | 13,416 | ||||||||
120,000 | FLIR Systems, Inc. 3.7500%, 9/1/16 | 123,012 | ||||||||
187,000 | Sealed Air Corp. 8.3750%, 9/15/21 (144A) | 210,899 | ||||||||
247,000 | Vulcan Materials Co. 7.0000%, 6/15/18 | 279,110 | ||||||||
1,184,387 | ||||||||||
Communications – 12.5% | ||||||||||
141,000 | CCO Holdings LLC / CCO Holdings Capital Corp. 5.2500%, 3/15/21 | 140,648 | ||||||||
200,000 | DISH DBS Corp. 4.6250%, 7/15/17 | 206,000 | ||||||||
200,000 | Frontier Communications Corp. 8.1250%, 10/1/18 | 215,626 | ||||||||
132,000 | Level 3 Financing, Inc. 8.6250%, 7/15/20 | 141,068 | ||||||||
202,000 | Level 3 Financing, Inc. 6.1250%, 1/15/21 | 211,837 | ||||||||
145,000 | Sprint Communications, Inc. 8.3750%, 8/15/17 | 156,963 | ||||||||
179,000 | T-Mobile USA, Inc. 6.0000%, 3/1/23 | 183,251 | ||||||||
260,000 | Univision Communications, Inc. 6.7500%, 9/15/22 (144A) | 274,950 | ||||||||
250,000 | Windstream Corp. 7.8750%, 11/1/17 | 265,625 | ||||||||
1,795,968 | ||||||||||
Consumer Cyclical – 14.1% | ||||||||||
160,000 | CCM Merger, Inc. 9.1250%, 5/1/19 (144A) | 171,200 | ||||||||
110,000 | DR Horton, Inc. 3.7500%, 3/1/19 | 110,825 | ||||||||
325,000 | Ford Motor Credit Co. LLC 4.2500%, 2/3/17 | 337,798 | ||||||||
250,000 | Lennar Corp. 4.7500%, 12/15/17 | 260,000 | ||||||||
469,000 | Meritage Homes Corp. 4.5000%, 3/1/18 | 479,554 | ||||||||
290,000 | MGM Resorts International 7.5000%, 6/1/16 | 302,325 | ||||||||
268,000 | Sally Holdings LLC / Sally Capital, Inc. 6.8750%, 11/15/19 | 280,060 | ||||||||
86,000 | Toll Brothers Finance Corp. 4.0000%, 12/31/18 | 87,720 | ||||||||
2,029,482 | ||||||||||
Consumer Non-Cyclical – 13.8% | ||||||||||
125,000 | Capsugel SA 7.0000%, 5/15/19 (144A) | 127,202 | ||||||||
190,000 | Constellation Brands, Inc. 7.2500%, 9/1/16 | 200,925 | ||||||||
135,000 | FAGE Dairy Industry SA / FAGE USA Dairy Industry, Inc. 9.8750%, 2/1/20 (144A) | 140,738 | ||||||||
250,000 | HCA, Inc. 6.5000%, 2/15/16 | 257,655 | ||||||||
190,000 | Jarden Corp. 7.5000%, 5/1/17 | 206,625 | ||||||||
144,000 | Owens & Minor, Inc. 4.3750%, 12/15/24 | 147,104 | ||||||||
173,000 | SUPERVALU, Inc. 6.7500%, 6/1/21 | 174,730 | ||||||||
414,000 | Tenet Healthcare Corp. 6.2500%, 11/1/18 | 449,707 | ||||||||
275,000 | Valeant Pharmaceuticals International, Inc. 5.3750%, 3/15/20 (144A) | 283,938 | ||||||||
1,988,624 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
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Janus Real Return Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Energy – 10.5% | ||||||||||
$122,000 | Chesapeake Energy Corp. 3.2500%, 3/15/16 | $ | 121,543 | |||||||
149,000 | Chesapeake Energy Corp. 3.5253%, 4/15/19‡ | 136,335 | ||||||||
73,000 | Dresser-Rand Group, Inc. 6.5000%, 5/1/21 | 78,548 | ||||||||
435,000 | Holly Energy Partners LP / Holly Energy Finance Corp. 6.5000%, 3/1/20 | 433,912 | ||||||||
2,000 | Kinder Morgan Finance Co. LLC 5.7000%, 1/5/16 | 2,044 | ||||||||
69,000 | Oceaneering International, Inc. 4.6500%, 11/15/24 | 68,937 | ||||||||
411,000 | Sabine Pass LNG LP 7.5000%, 11/30/16 | 432,582 | ||||||||
156,000 | Targa Resources Partners LP / Targa Resources Partners Finance Corp. 5.0000%, 1/15/18 (144A) | 159,510 | ||||||||
77,000 | Targa Resources Partners LP / Targa Resources Partners Finance Corp. 6.8750%, 2/1/21 | 79,888 | ||||||||
1,000 | Whiting Petroleum Corp. 5.0000%, 3/15/19 | 980 | ||||||||
1,514,279 | ||||||||||
Finance Companies – 4.0% | ||||||||||
217,000 | AerCap Ireland Capital, Ltd. / AerCap Global Aviation Trust 4.2500%, 7/1/20 | 217,136 | ||||||||
270,000 | CIT Group, Inc. 5.2500%, 3/15/18 | 279,112 | ||||||||
70,000 | GE Capital Trust I 6.3750%, 11/15/67‡ | 74,760 | ||||||||
571,008 | ||||||||||
Insurance – 1.9% | ||||||||||
266,000 | Centene Corp. 5.7500%, 6/1/17 | 281,960 | ||||||||
Real Estate Investment Trusts (REITs) – 2.4% | ||||||||||
40,000 | Forest City Enterprises, Inc. 3.6250%, 8/15/20 | 43,650 | ||||||||
288,000 | Reckson Operating Partnership LP 6.0000%, 3/31/16 | 297,463 | ||||||||
341,113 | ||||||||||
Technology – 1.8% | ||||||||||
129,000 | CommScope, Inc. 4.3750%, 6/15/20 (144A) | 130,290 | ||||||||
117,000 | First Data Corp. 12.6250%, 1/15/21 | 135,135 | ||||||||
265,425 | ||||||||||
Transportation – 2.8% | ||||||||||
34,000 | Eletson Holdings 9.6250%, 1/15/22 (144A) | 33,150 | ||||||||
137,000 | Florida East Coast Holdings Corp. 6.7500%, 5/1/19 (144A) | 137,342 | ||||||||
122,000 | Florida East Coast Holdings Corp. 9.7500%, 5/1/20 (144A) | 115,595 | ||||||||
123,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 2.5000%, 3/15/16 (144A) | 123,860 | ||||||||
409,947 | ||||||||||
Total Corporate Bonds (cost $11,702,519) | 11,682,072 | |||||||||
Preferred Stocks – 0.8% | ||||||||||
Capital Markets – 0% | ||||||||||
200 | Morgan Stanley Capital Trust III, 6.2500% | 5,106 | ||||||||
25 | Morgan Stanley Capital Trust IV, 6.2500% | 636 | ||||||||
6 | Morgan Stanley Capital Trust V, 5.7500% | 152 | ||||||||
10 | Morgan Stanley Capital Trust VIII, 6.4500% | 253 | ||||||||
6,147 | ||||||||||
Commercial Banks – 0.8% | ||||||||||
1,350 | Citigroup Capital XIII, 7.8750% | 35,046 | ||||||||
3,175 | Royal Bank of Scotland Group PLC, 6.3500% | 78,931 | ||||||||
113,977 | ||||||||||
Total Preferred Stocks (cost $115,465) | 120,124 | |||||||||
U.S. Treasury Notes/Bonds – 5.9% | ||||||||||
$138,000 | 2.3750%, 3/31/16 | 140,200 | ||||||||
196,000 | 0.6250%, 12/31/16 | 196,413 | ||||||||
5,000 | 1.0000%, 9/15/17 | 5,029 | ||||||||
8,000 | 0.8750%, 10/15/17 | 8,018 | ||||||||
12,000 | 2.3750%, 8/15/24 | 12,065 | ||||||||
217,000 | 2.1250%, 5/15/25 | 213,067 | ||||||||
130,000 | 3.0000%, 11/15/44 | 127,166 | ||||||||
145,000 | 3.0000%, 5/15/45 | 142,100 | ||||||||
Total U.S. Treasury Notes/Bonds (cost $844,969) | 844,058 | |||||||||
Investment Companies – 8.2% | ||||||||||
Money Markets – 8.2% | ||||||||||
1,183,213 | Janus Cash Liquidity Fund LLC, 0.1291%°°,£ (cost $1,183,213) | 1,183,213 | ||||||||
Total Investments (total cost $14,265,294) – 98.9% | 14,256,492 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 1.1% | 160,542 | |||||||||
Net Assets – 100% | $ | 14,417,034 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States | $ | 12,594,601 | 88 | .4% | ||||
United Kingdom | 672,563 | 4 | .7 | |||||
Luxembourg | 281,916 | 2 | .0 | |||||
Netherlands | 217,136 | 1 | .5 | |||||
Greece | 173,888 | 1 | .2 | |||||
Singapore | 159,425 | 1 | .1 | |||||
Japan | 156,963 | 1 | .1 | |||||
Total | $ | 14,256,492 | 100 | .0% | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | JUNE 30, 2015
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Notes to Schedule of Investments and Other Information
Barclays U.S. 1-5 Year TIPS Index | The Barclays 1-5 Year U.S. Inflation-Linked Treasury Index, also known as the Barclays U.S. 1-5 Year TIPS Index, measures the performance of U.S. Treasury Inflation-Protected Securities (“TIPS”) with maturity between 1-5 years. | |
Consumer Price Index (CPI) | A measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
PLC | Public Limited Company | |
ULC | Unlimited Liability Company |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. These securities have been determined to be liquid under guidelines established by the Board of Trustees. The total value of 144A securities as of the year ended June 30, 2015 is indicated in the table below: |
Value as a % | ||||||||||
Fund | Value | of Net Assets | ||||||||
Janus Real Return Fund | $ | 2,176,274 | 15.1 | % | ||||||
‡ | 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 year end. | |
°° | Rate shown is the 7-day yield as of June 30, 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 June 30, 2015) |
Acquisition | Acquisition | Value as a | ||||||||||||
Date | Cost | Value | % of Net Assets | |||||||||||
Janus Real Return Fund | ||||||||||||||
ADS Tactical, Inc., 11.0000%, 4/1/18 | 11/19/13 | $ | 166,678 | $ | 185,265 | 1.3 | % | |||||||
The Fund has registration rights for certain restricted securities held as of June 30, 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 year ended June 30, 2015. Unless otherwise indicated, all information in the table is for the year ended June 30, 2015. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 6/30/15 | Gain/(Loss) | Income | at 6/30/15 | |||||||||||||||
Janus Real Return Fund | |||||||||||||||||||||
Janus Cash Liquidity Fund LLC | 119,101 | 11,669,427 | (10,605,315) | 1,183,213 | $ | – | $ | 563 | $ | 1,183,213 | |||||||||||
Janus Investment Fund | 9
Table of Contents
Notes to Schedule of Investments and Other Information (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 June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Janus Real Return Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Asset-Backed/Commercial Mortgage-Backed Securities | $ | – | $ | 267,600 | $ | – | |||||
Bank Loans and Mezzanine Loans | – | 159,425 | – | ||||||||
Corporate Bonds | – | 11,682,072 | – | ||||||||
Preferred Stocks | – | 120,124 | – | ||||||||
U.S. Treasury Notes/Bonds | – | 844,058 | – | ||||||||
Investment Companies | – | 1,183,213 | – | ||||||||
Total Assets | $ | – | $ | 14,256,492 | $ | – | |||||
10 | JUNE 30, 2015
Table of Contents
Statement of Assets and Liabilities
As of June 30, 2015 | Janus Real Return Fund | |||
Assets: | ||||
Investments, at cost | $ | 14,265,294 | ||
Unaffiliated investments, at value | $ | 13,073,279 | ||
Affiliated investments, at value | 1,183,213 | |||
Cash | 3,350 | |||
Non-interested Trustees’ deferred compensation | 288 | |||
Receivables: | ||||
Investments sold | 60,065 | |||
Fund shares sold | 2,520 | |||
Dividends | 16 | |||
Dividends from affiliates | 104 | |||
Foreign dividend tax reclaim | 250 | |||
Interest | 170,953 | |||
Due from adviser | 22,171 | |||
Other assets | 24 | |||
Total Assets | 14,516,233 | |||
Liabilities: | ||||
Payables: | ||||
Fund shares repurchased | 20,192 | |||
Dividends | 151 | |||
Advisory fees | 6,410 | |||
Fund administration fees | 110 | |||
Transfer agent fees and expenses | 8,414 | |||
12b-1 Distribution and shareholder servicing fees | 2,882 | |||
Non-interested Trustees’ fees and expenses | 90 | |||
Non-interested Trustees’ deferred compensation fees | 288 | |||
Accrued expenses and other payables | 60,662 | |||
Total Liabilities | 99,199 | |||
Net Assets | $ | 14,417,034 |
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 June 30, 2015 | Janus Real Return Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 15,141,562 | ||
Undistributed net investment income/(loss) | 998 | |||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | (716,774) | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (8,752) | |||
Total Net Assets | $ | 14,417,034 | ||
Net Assets - Class A Shares | $ | 2,252,184 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 234,776 | |||
Net Asset Value Per Share(1) | $ | 9.59 | ||
Maximum Offering Price Per Share(2) | $ | 10.07 | ||
Net Assets - Class C Shares | $ | 2,023,304 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 211,900 | |||
Net Asset Value Per Share(1) | $ | 9.55 | ||
Net Assets - Class D Shares | $ | 4,305,566 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 448,200 | |||
Net Asset Value Per Share | $ | 9.61 | ||
Net Assets - Class I Shares | $ | 2,250,646 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 235,866 | |||
Net Asset Value Per Share | $ | 9.54 | ||
Net Assets - Class S Shares | $ | 820,553 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 85,354 | |||
Net Asset Value Per Share | $ | 9.61 | ||
Net Assets - Class T Shares | $ | 2,764,781 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 288,832 | |||
Net Asset Value Per Share | $ | 9.57 |
(1) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(2) | Maximum offering price is computed at 100/95.25 of net asset value. |
See Notes to Financial Statements.
12 | JUNE 30, 2015
Table of Contents
Statement of Operations
For the year ended June 30, 2015 | Janus Real Return Fund | |||
Investment Income: | ||||
Interest | $ | 619,689 | ||
Dividends | 8,259 | |||
Dividends from affiliates | 563 | |||
Other income | 27,243 | |||
Total Investment Income | 655,754 | |||
Expenses: | ||||
Advisory fees | 80,668 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 5,923 | |||
Class C Shares | 20,218 | |||
Class S Shares | 2,366 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 5,285 | |||
Class S Shares | 2,366 | |||
Class T Shares | 6,597 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 292 | |||
Class C Shares | 298 | |||
Class D Shares | 2,023 | |||
Class I Shares | 141 | |||
Class S Shares | 12 | |||
Class T Shares | 158 | |||
Shareholder reports expense | 7,672 | |||
Registration fees | 83,096 | |||
Custodian fees | 3,168 | |||
Professional fees | 41,542 | |||
Non-interested Trustees’ fees and expenses | 304 | |||
Fund administration fees | 1,323 | |||
Accounting systems fee expense | 30,794 | |||
Other expenses | 364 | |||
Total Expenses | 294,610 | |||
Less: Excess Expense Reimbursement | (164,849) | |||
Net Expenses | 129,761 | |||
Net Investment Income/(Loss) | 525,993 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | (217,482) | |||
Total Net Realized Gain/(Loss) on Investments | (217,482) | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (324,399) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (324,399) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (15,888) |
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Statements of Changes in Net Assets
Janus Real Return Fund | ||||||||
For each year ended June 30 | 2015 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 525,993 | $ | 443,206 | ||||
Net realized gain/(loss) on investments | (217,482) | 51,464 | ||||||
Change in unrealized net appreciation/depreciation | (324,399) | 460,411 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (15,888) | 955,081 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income | ||||||||
Class A Shares | (88,909) | (59,954) | ||||||
Class C Shares | (60,891) | (37,303) | ||||||
Class D Shares | (168,497) | (159,214) | ||||||
Class I Shares | (90,770) | (63,621) | ||||||
Class S Shares | (32,555) | (50,351) | ||||||
Class T Shares | (99,557) | (72,872) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (541,179) | (443,315) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 64,062 | 503,017 | ||||||
Class C Shares | 32,891 | 25,061 | ||||||
Class D Shares | 1,966,629 | 3,668,660 | ||||||
Class I Shares | 12,114 | 70,788 | ||||||
Class T Shares | 293,725 | 1,186,019 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 88,909 | 59,954 | ||||||
Class C Shares | 60,855 | 37,303 | ||||||
Class D Shares | 162,779 | 153,889 | ||||||
Class I Shares | 90,770 | 63,621 | ||||||
Class S Shares | 32,555 | 50,351 | ||||||
Class T Shares | 99,114 | 72,872 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (489,919) | (6,979) | ||||||
Class C Shares | (75,630) | (24,859) | ||||||
Class D Shares | (4,485,416) | (1,581,349) | ||||||
Class I Shares | (73,930) | (96,370) | ||||||
Class S Shares | (1,265,929) | – | ||||||
Class T Shares | (138,053) | (764,725) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (3,624,474) | 3,417,253 | ||||||
Net Increase/(Decrease) in Net Assets | (4,181,541) | 3,929,019 | ||||||
Net Assets: | ||||||||
Beginning of period | 18,598,575 | 14,669,556 | ||||||
End of period | $ | 14,417,034 | $ | 18,598,575 | ||||
Undistributed Net Investment Income/(Loss) | $ | 998 | $ | 2,244 |
See Notes to Financial Statements.
14 | JUNE 30, 2015
Table of Contents
Financial Highlights
Class A Shares
Janus Real Return Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013(1) | 2012(1) | 2011(1)(2) | |||||||||||||||||
Net Asset Value, Beginning of Period | $9.94 | $9.64 | $9.55 | $9.95 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.35(3) | 0.26(3) | 0.17 | 0.01 | 0.04 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.33) | 0.29 | 0.07 | (0.32) | (0.09) | |||||||||||||||||
Total from Investment Operations | 0.02 | 0.55 | 0.24 | (0.31) | (0.05) | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.37) | (0.25) | (0.09) | (0.04) | – | |||||||||||||||||
Distributions (from capital gains) | – | – | – | (0.05) | – | |||||||||||||||||
Return of capital | – | – | (0.06) | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.37) | (0.25) | (0.15) | (0.09) | – | |||||||||||||||||
Net Asset Value, End of Period | $9.59 | $9.94 | $9.64 | $9.55 | $9.95 | |||||||||||||||||
Total Return* | 0.18% | 5.81% | 2.48% | (3.09)% | (0.50)% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $2,252 | $2,677 | $2,054 | $6,759 | $6,660 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $2,372 | $2,280 | $3,351 | $6,973 | $6,635 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses** | 1.96% | 2.15% | 2.71% | 2.25% | 5.68% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.84% | 1.01% | 1.15% | 1.26% | 1.27% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)** | 3.65% | 2.63% | 0.60% | 1.24% | 3.21% | |||||||||||||||||
Portfolio Turnover Rate | 86% | 91% | 112%(4) | 45% | 6% |
Class C Shares
Janus Real Return Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013(1) | 2012(1) | 2011(1)(2) | |||||||||||||||||
Net Asset Value, Beginning of Period | $9.89 | $9.59 | $9.48 | $9.94 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.28(3) | 0.18(3) | (0.10) | (0.05) | 0.03 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.33) | 0.30 | 0.26 | (0.33) | (0.09) | |||||||||||||||||
Total from Investment Operations | (0.05) | 0.48 | 0.16 | (0.38) | (0.06) | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.29) | (0.18) | (0.03) | (0.03) | – | |||||||||||||||||
Distributions (from capital gains) | – | – | – | (0.05) | – | |||||||||||||||||
Return of capital | – | – | (0.02) | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.29) | (0.18) | (0.05) | (0.08) | – | |||||||||||||||||
Net Asset Value, End of Period | $9.55 | $9.89 | $9.59 | $9.48 | $9.94 | |||||||||||||||||
Total Return* | (0.48)% | 5.04% | 1.64% | (3.80)% | (0.60)% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $2,023 | $2,077 | $1,978 | $6,400 | $6,627 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $2,022 | $2,024 | $3,182 | $6,492 | $6,616 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses** | 2.72% | 2.90% | 3.52% | 2.95% | 6.43% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.58% | 1.76% | 1.90% | 2.01% | 2.02% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)** | 2.91% | 1.84% | (0.16)% | 0.51% | 2.46% | |||||||||||||||||
Portfolio Turnover Rate | 86% | 91% | 112%(4) | 45% | 6% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | The Fund included the accounts of both Janus Real Return Allocation Fund and Janus Real Return Subsidiary, Ltd. from May 13, 2011 (inception date) through October 15, 2012. | |
(2) | Period from May 13, 2011 (inception date) through June 30, 2011. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year. | |
(4) | The increase in the portfolio turnover rate was due to a restructuring of the Fund’s portfolio as a result of a change in its principal investment strategies. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Financial Highlights (continued)
Class D Shares
Janus Real Return Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013(1) | 2012(1) | 2011(1)(2) | |||||||||||||||||
Net Asset Value, Beginning of Period | $9.95 | $9.65 | $9.56 | $9.95 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.36(3) | 0.27(3) | 0.18 | 0.03 | 0.04 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.32) | 0.29 | 0.07 | (0.33) | (0.09) | |||||||||||||||||
Total from Investment Operations | 0.04 | 0.56 | 0.25 | (0.30) | (0.05) | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.38) | (0.26) | (0.10) | (0.04) | – | |||||||||||||||||
Distributions (from capital gains) | – | – | – | (0.05) | – | |||||||||||||||||
Return of capital | – | – | (0.06) | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.38) | (0.26) | (0.16) | (0.09) | – | |||||||||||||||||
Net Asset Value, End of Period | $9.61 | $9.95 | $9.65 | $9.56 | $9.95 | |||||||||||||||||
Total Return* | 0.38% | 5.91% | 2.59% | (3.02)% | (0.50)% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $4,306 | $6,842 | $4,431 | $7,632 | $6,954 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $4,422 | $5,771 | $4,876 | $7,558 | $6,832 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses** | 1.85% | 2.08% | 2.98% | 2.25% | 5.96% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.74% | 0.91% | 1.00% | 1.14% | 1.25% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)** | 3.71% | 2.76% | 0.97% | 1.40% | 3.24% | |||||||||||||||||
Portfolio Turnover Rate | 86% | 91% | 112%(4) | 45% | 6% |
Class I Shares
Janus Real Return Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013(1) | 2012(1) | 2011(1)(2) | |||||||||||||||||
Net Asset Value, Beginning of Period | $9.89 | $9.59 | $9.57 | $9.95 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.38(3) | 0.28(3) | 0.27 | 0.04 | 0.05 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.34) | 0.30 | –(5) | (0.33) | (0.10) | |||||||||||||||||
Total from Investment Operations | 0.04 | 0.58 | 0.27 | (0.29) | (0.05) | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.39) | (0.28) | (0.16) | (0.04) | – | |||||||||||||||||
Distributions (from capital gains) | – | – | – | (0.05) | – | |||||||||||||||||
Return of capital | – | – | (0.09) | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.39) | (0.28) | (0.25) | (0.09) | – | |||||||||||||||||
Net Asset Value, End of Period | $9.54 | $9.89 | $9.59 | $9.57 | $9.95 | |||||||||||||||||
Total Return* | 0.42% | 6.08% | 2.77% | (2.86)% | (0.50)% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $2,251 | $2,302 | $2,195 | $6,650 | $6,797 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $2,257 | $2,241 | $3,457 | $6,738 | $6,658 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses** | 1.71% | 1.88% | 2.47% | 1.93% | 5.43% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.57% | 0.77% | 0.90% | 1.01% | 1.02% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)** | 3.91% | 2.84% | 0.89% | 1.50% | 3.47% | |||||||||||||||||
Portfolio Turnover Rate | 86% | 91% | 112%(4) | 45% | 6% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | The Fund included the accounts of both Janus Real Return Allocation Fund and Janus Real Return Subsidiary, Ltd. from May 13, 2011 (inception date) through October 15, 2012. | |
(2) | Period from May 13, 2011 (inception date) through June 30, 2011. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year. | |
(4) | The increase in the portfolio turnover rate was due to a restructuring of the Fund’s portfolio as a result of a change in its principal investment strategies. | |
(5) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
16 | JUNE 30, 2015
Table of Contents
Class S Shares
Janus Real Return Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013(1) | 2012(1) | 2011(1)(2) | |||||||||||||||||
Net Asset Value, Beginning of Period | $9.96 | $9.65 | $9.53 | $9.95 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.33(3) | 0.24(3) | 0.13 | –(4) | 0.04 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.34) | 0.31 | 0.11 | (0.33) | (0.09) | |||||||||||||||||
Total from Investment Operations | (0.01) | 0.55 | 0.24 | (0.33) | (0.05) | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.34) | (0.24) | (0.08) | (0.04) | – | |||||||||||||||||
Distributions (from capital gains) | – | – | – | (0.05) | – | |||||||||||||||||
Return of capital | – | – | (0.04) | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.34) | (0.24) | (0.12) | (0.09) | – | |||||||||||||||||
Net Asset Value, End of Period | $9.61 | $9.96 | $9.65 | $9.53 | $9.95 | |||||||||||||||||
Total Return* | (0.05)% | 5.77% | 2.51% | (3.33)% | (0.50)% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $821 | $2,097 | $1,984 | $6,412 | $6,632 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $957 | $2,042 | $3,207 | $6,502 | $6,618 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses** | 2.15% | 2.37% | 2.70% | 2.43% | 5.93% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.08% | 1.14% | 1.19% | 1.45% | 1.52% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)** | 3.32% | 2.47% | 0.56% | 1.07% | 2.96% | |||||||||||||||||
Portfolio Turnover Rate | 86% | 91% | 112%(5) | 45% | 6% |
Class T Shares
Janus Real Return Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013(1) | 2012(1) | 2011(1)(2) | |||||||||||||||||
Net Asset Value, Beginning of Period | $9.92 | $9.61 | $9.55 | $9.95 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.36(3) | 0.27(3) | 0.22 | 0.02 | 0.04 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.34) | 0.30 | 0.04 | (0.33) | (0.09) | |||||||||||||||||
Total from Investment Operations | 0.02 | 0.57 | 0.26 | (0.31) | (0.05) | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.37) | (0.26) | (0.13) | (0.04) | – | |||||||||||||||||
Distributions (from capital gains) | – | – | – | (0.05) | – | |||||||||||||||||
Return of capital | – | – | (0.07) | – | – | |||||||||||||||||
Total Dividends and Distributions | (0.37) | (0.26) | (0.20) | (0.09) | – | |||||||||||||||||
Net Asset Value, End of Period | $9.57 | $9.92 | $9.61 | $9.55 | $9.95 | |||||||||||||||||
Total Return* | 0.18% | 6.01% | 2.76% | (3.09)% | (0.50)% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $2,765 | $2,603 | $2,028 | $6,545 | $6,641 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $2,638 | $2,694 | $3,323 | $6,633 | $6,623 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses** | 1.97% | 2.16% | 2.48% | 2.17% | 5.68% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.82% | 0.92% | 0.94% | 1.20% | 1.27% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)** | 3.67% | 2.70% | 0.83% | 1.31% | 3.21% | |||||||||||||||||
Portfolio Turnover Rate | 86% | 91% | 112%(5) | 45% | 6% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | The Fund included the accounts of both Janus Real Return Allocation Fund and Janus Real Return Subsidiary, Ltd. from May 13, 2011 (inception date) through October 15, 2012. | |
(2) | Period from May 13, 2011 (inception date) through June 30, 2011. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year. | |
(4) | Less than $0.005 on a per share basis. | |
(5) | The increase in the portfolio turnover rate was due to a restructuring of the Fund’s portfolio as a result of a change in its principal investment strategies. |
See Notes to Financial Statements.
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Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
Janus Real Return Fund (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in income-producing securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
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 evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant
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governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of June 30, 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 year. 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
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Notes to Financial Statements (continued)
ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
Dividends are declared daily and distributed monthly for the Fund. Realized capital gains, if any, are declared and distributed in December. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
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 Fund may be invested in lower-rated debt securities that have a higher risk of default or loss of value since these securities may be sensitive to economic changes, political changes or adverse developments specific to the issuer.
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient 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,
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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.
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 June 30, 2015.
• | Bank Loans – Bank loans are obligations of companies or other entities entered into in connection with recapitalizations, acquisitions, and refinancings. The Fund’s investments in bank loans are generally acquired as a participation interest in, or assignment of, loans originated by a lender or other financial institution. These investments may include institutionally-traded floating and fixed-rate debt securities. | |
• | Floating Rate Loans – Floating rate loans are debt securities that have floating interest rates, that adjust periodically, and are tied to a benchmark lending rate, such as the London Interbank Offered Rate (“LIBOR”). In other cases, the lending rate could be tied to the prime rate offered by one or more major U.S. banks or the rate paid on large certificates of deposit traded in the secondary markets. If the benchmark lending rate changes, the rate payable to lenders under the loan will change at the next scheduled adjustment date specified in the loan agreement. Floating rate loans are typically issued to companies (“borrowers”) in connection with recapitalizations, acquisitions, and refinancings. Floating rate loan investments are generally below investment grade. Senior floating rate loans are secured by specific collateral of a borrower and are senior in the borrower’s capital structure. The senior position in the borrower’s capital structure generally gives holders of senior loans a claim on certain of the borrower’s assets that is senior to subordinated debt and preferred and common stock in the case of a borrower’s default. Floating rate loan investments may involve foreign borrowers, and investments may be denominated in foreign currencies. Floating rate loans often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The Fund may invest in obligations of borrowers who are in bankruptcy proceedings. While the Fund generally expects to invest in fully funded term loans, certain of the loans in which the Fund may invest include revolving loans, bridge loans, and delayed draw term loans. |
Purchasers of floating rate loans may pay and/or receive certain fees. The Fund may receive fees |
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Notes to Financial Statements (continued)
such as covenant waiver fees or prepayment penalty fees. The Fund may pay fees such as facility fees. Such fees may affect the Fund’s return. |
• | Mezzanine Loans – Mezzanine loans are secured by the stock of the company that owns the assets. Mezzanine loans are a hybrid of debt and equity financing that is typically used to fund the expansion of existing companies. A mezzanine loan is composed of debt capital that gives the lender the right to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. Mezzanine loans typically are the most subordinated debt obligation in an issuer’s capital structure. |
Mortgage- and Asset-Backed Securities
Mortgage- and asset-backed securities represent interests in “pools” of commercial or residential mortgages or other assets, including consumer loans or receivables. The Fund may purchase fixed or variable rate commercial or residential 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 Mae and Freddie Mac securities 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 guarantors or insurers will meet their obligations.
Mortgage- and asset-backed securities are also subject to extension risk, which is the risk that rising interest rates could cause mortgages or other obligations underlying these securities to be paid more slowly than expected, increasing the Fund’s sensitivity to interest rate changes and causing its price to decline.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Restricted Security Transactions
Restricted securities held by the Fund may not be sold except in exempt transactions or in a public offering registered under the Securities Act of 1933, as amended. The risk of investing in such securities is generally greater than the risk of investing in the securities of widely held, publicly traded companies. Lack of a secondary market and resale restrictions may result in the inability of the Fund to sell a security at a fair price and may substantially delay the sale of the security. In addition, these securities may exhibit greater price volatility than securities for which secondary markets exist.
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Sovereign Debt
The Fund may invest in U.S. and foreign government debt securities (“sovereign debt”). Investments in U.S. sovereign debt are considered low risk. However, investments in non-U.S. sovereign debt can involve a high degree of risk, including the risk that the governmental entity that controls the repayment of sovereign debt may not be willing or able to repay the principal and/or to pay the interest on its sovereign debt in a timely manner. A sovereign debtor’s willingness or ability to satisfy its debt obligation may be affected by various factors, including its cash flow situation, the extent of its foreign currency reserves, the availability of foreign exchange when a payment is due, the relative size of its debt position in relation to its economy as a whole, the sovereign debtor’s policy toward international lenders, and local political constraints to which the governmental entity may be subject. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies, and other entities. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance, or repay principal or interest when due may result in the cancellation of third party commitments to lend funds to the sovereign debtor, which may further impair such debtor’s ability or willingness to timely service its debts. The Fund may be requested to participate in the rescheduling of such sovereign debt and to extend further loans to governmental entities, which may adversely affect the Fund’s holdings. In the event of default, there may be limited or no legal remedies for collecting sovereign debt and there may be no bankruptcy proceedings through which the Fund may collect all or part of the sovereign debt that a governmental entity has not repaid.
When-Issued and Delayed Delivery Securities
The Fund may purchase or sell securities on a when-issued or delayed delivery basis. When-issued and delayed delivery securities in which the Fund may invest include U.S. Treasury Securities, municipal bonds, bank loans, and other similar instruments. The price of the underlying securities and date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Losses may arise due to changes in the market value of the securities or from the inability of counterparties to meet the terms of the contract. In connection with such purchases, the Fund may hold liquid assets as collateral with the Fund’s custodian sufficient to cover the purchase price.
3. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Janus Real Return Fund | First $ | 1 Billion | 0.55 | |||||||
Next $ | 4 Billion | 0.53 | ||||||||
Over $ | 5 Billion | 0.50 | ||||||||
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Previous | ||||||||||
New Expense | Expense | |||||||||
Limit (%) | Limit (%) | |||||||||
(November 1, | (until November | |||||||||
Fund | 2014 to present) | 1, 2014) | ||||||||
Janus Real Return Fund | 0.47 | 0.76 | ||||||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations (if applicable).
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Notes to Financial Statements (continued)
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the year ended June 30, 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
24 | JUNE 30, 2015
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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 June 30, 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 year ended June 30, 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 $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 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 product compliant with Rule 2a-7 under the 1940 Act. There are no restrictions on the Fund’s ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Fund to Janus Cash Liquidity Fund LLC. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the year ended June 30, 2015 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 4.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. There were no upfront sales charges retained by Janus Distributors during the year ended June 30, 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 year ended June 30, 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 year ended June 30, 2015.
As of June 30, 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 Real Return Fund - Class A Shares | 81 | % | 13 | % | ||||||
Janus Real Return Fund - Class C Shares | 97 | 14 | ||||||||
Janus Real Return Fund - Class D Shares | – | – | ||||||||
Janus Real Return Fund - Class I Shares | 96 | 15 | ||||||||
Janus Real Return Fund - Class S Shares | 100 | 6 | ||||||||
Janus Real Return Fund - Class T Shares | 77 | 15 | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
Janus Investment Fund | 25
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Notes to Financial Statements (continued)
4. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation, derivatives, and foreign currency contract adjustments. 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.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
Janus Real Return Fund | $1,286 | $– | $(408,840) | $– | $(297,131) | $(238) | $(19,605) | ||||||||||||||||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of June 30, 2015, that may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. The following table shows these capital loss carryovers.
Capital Loss Carryover Expiration Schedule
For the year ended June 30, 2015
Accumulated | |||||||||||||||
No Expiration | Capital | ||||||||||||||
Fund | Short-Term | Long-Term | Losses | ||||||||||||
Janus Real Return Fund | $(401,645) | $(7,195) | $(408,840) | ||||||||||||
During the year ended June 30, 2015, the following capital loss carryovers were utilized by the Fund as indicated in the table:
Capital Loss | ||||||||||
Fund | Carryover Utilized | |||||||||
Janus Real Return Fund | $ | 47,877 | ||||||||
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 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.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
Janus Real Return Fund | $ | 14,276,097 | $ | 101,701 | $ | (121,306) | ||||||||
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. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the year ended June 30, 2015
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Real Return Fund | $ | 541,179 | $ | – | $ | – | $ | – | ||||||||||||||
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For the year ended June 30, 2014
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Real Return Fund | $ | 443,315 | $ | – | $ | – | $ | – | ||||||||||||||
Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
Janus Real Return Fund | $ | – | $ | 13,940 | $ | (13,940) | ||||||||
5. | Capital Share Transactions |
Janus Real Return Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 6,458 | 50,923 | ||||||||
Reinvested dividends and distributions | 9,169 | 6,084 | ||||||||
Shares repurchased | (50,250) | (711) | ||||||||
Net Increase/(Decrease) in Fund Shares | (34,623) | 56,296 | ||||||||
Shares Outstanding, Beginning of Period | 269,399 | 213,103 | ||||||||
Shares Outstanding, End of Period | 234,776 | 269,399 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 3,439 | 2,573 | ||||||||
Reinvested dividends and distributions | 6,308 | 3,809 | ||||||||
Shares repurchased | (7,826) | (2,574) | ||||||||
Net Increase/(Decrease) in Fund Shares | 1,921 | 3,808 | ||||||||
Shares Outstanding, Beginning of Period | 209,979 | 206,171 | ||||||||
Shares Outstanding, End of Period | 211,900 | 209,979 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 202,551 | 373,314 | ||||||||
Reinvested dividends and distributions | 16,758 | 15,575 | ||||||||
Shares repurchased | (458,513) | (160,617) | ||||||||
Net Increase/(Decrease) in Fund Shares | (239,204) | 228,272 | ||||||||
Shares Outstanding, Beginning of Period | 687,404 | 459,132 | ||||||||
Shares Outstanding, End of Period | 448,200 | 687,404 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 1,254 | 7,263 | ||||||||
Reinvested dividends and distributions | 9,414 | 6,494 | ||||||||
Shares repurchased | (7,670) | (9,906) | ||||||||
Net Increase/(Decrease) in Fund Shares | 2,998 | 3,851 | ||||||||
Shares Outstanding, Beginning of Period | 232,868 | 229,017 | ||||||||
Shares Outstanding, End of Period | 235,866 | 232,868 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | – | – | ||||||||
Reinvested dividends and distributions | 3,346 | 5,100 | ||||||||
Shares repurchased | (128,651) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | (125,305) | 5,100 | ||||||||
Shares Outstanding, Beginning of Period | 210,659 | 205,559 | ||||||||
Shares Outstanding, End of Period | 85,354 | 210,659 |
Janus Investment Fund | 27
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Notes to Financial Statements (continued)
Janus Real Return Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 30,340 | 121,654 | ||||||||
Reinvested dividends and distributions | 10,248 | 7,410 | ||||||||
Shares repurchased | (14,218) | (77,535) | ||||||||
Net Increase/(Decrease) in Fund Shares | 26,370 | 51,529 | ||||||||
Shares Outstanding, Beginning of Period | 262,462 | 210,933 | ||||||||
Shares Outstanding, End of Period | 288,832 | 262,462 |
6. | Purchases and Sales of Investment Securities |
For the year ended June 30, 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 Real Return Fund | $ | 5,491,527 | $ | 7,827,311 | $ | 6,791,191 | $ | 9,084,443 | ||||||
7. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of Janus Real Return Fund:
of Janus Real Return Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Janus Real Return Fund (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
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
30 | JUNE 30, 2015
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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 June 30, 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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Designation Requirements (unaudited)
For federal income tax purposes, the Fund designated the following for the year ended June 30, 2015:
Dividends Received Deduction Percentage
Fund | ||||||||||
Janus Real Return Fund | 1 | % | ||||||||
Qualified Dividend Income Percentage
Fund | ||||||||||
Janus Real Return Fund | 2 | % | ||||||||
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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
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OFFICERS
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
Mayur Saigal 151 Detroit Street Denver, CO 80206 DOB: 1975 | Executive Vice President and Co-Portfolio Manager Janus Real Return Fund | 10/13-Present | Research Analyst for Janus Capital. | |||
Gibson Smith 151 Detroit Street Denver, CO 80206 DOB: 1968 | Executive Vice President and Co-Portfolio Manager Janus Real Return Fund | 5/11-Present | Chief Investment Officer Fixed Income and Executive Vice President of Janus Capital; Director of Perkins Investment Management LLC; and Portfolio Manager for other Janus accounts. Formerly, Executive Vice President of Janus Distributors LLC and Janus Services LLC (2007-2013). | |||
Darrell Watters 151 Detroit Street Denver, CO 80206 DOB: 1963 | Executive Vice President and Co-Portfolio Manager Janus Real Return Fund | 10/12-Present | Vice President of Janus Capital and Portfolio Manager for other Janus accounts. | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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Trustees and Officers (unaudited) (continued)
OFFICERS (continued)
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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Notes
Janus Investment Fund | 51
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Notes
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Notes
Janus Investment Fund | 53
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Janus provides access to a wide range of investment disciplines.
Alternative
Janus alternative funds seek to deliver strong risk-adjusted returns over a full market cycle with lower correlation to equity markets than traditional investments.
Asset Allocation
Janus’ asset allocation funds utilize our fundamental, bottom-up research to balance risk over the long term. From fund options that meet investors’ risk tolerance and objectives to a method that incorporates non-traditional investment choices to seek non-correlated sources of risk and return, Janus’ asset allocation funds aim to allocate risk more effectively.
Fixed Income
Janus fixed income funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek capital preservation and liquidity with current income as a secondary objective.
Global & International
Janus global and international funds seek to leverage Janus’ research capabilities by taking advantage of inefficiencies in foreign markets, where accurate information and analytical insight are often at a premium.
Growth & Core
Janus growth funds focus on companies believed to be the leaders in their respective industries, with solid management teams, expanding market share, margins and efficiencies. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical funds seek to outperform their respective indices while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH (a Janus subsidiary), these funds use a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
For more information about our funds, contact your investment professional or go to janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus).
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-0815-93825 | 125-02-93029 08-15 |
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annual report
June 30, 2015
Janus Short-Term Bond Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
Table of Contents
Janus Short-Term Bond Fund
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Janus Short-Term Bond Fund (unaudited)
FUND SNAPSHOT We believe a bottom-up, fundamentally driven investment process can generate risk-adjusted outperformance and capital preservation over time. Our comprehensive, bottom-up view drives decision-making at a macro level, enabling us to make informed risk and sector allocation decisions. | Gibson Smith co-portfolio manager | Darrell Watters co-portfolio manager |
PERFORMANCE SUMMARY
During the one-year period ended June 30, 2015, Janus Short-Term Bond Fund’s Class T Shares returned 0.08% compared with 0.93% for the Fund’s benchmark, the Barclays 1-3 Year U.S. Government/Credit Index.
MARKET ENVIRONMENT
The U.S. Treasury yield curve flattened during the period, although much of the gains of longer-dated securities were not sustained over the final few months. Long-dated Treasury yields fell through the end of 2014 as investors clamored for dollar-denominated assets. Both Europe and Japan have been taking steps to engineer even more accommodative monetary policy, making yields on Treasurys relatively attractive. Also contributing to the bond rally was softer-than-expected economic data in the first part of 2015 which diminished investor concern of breakout growth or stronger-than-expected inflation. A spring rebound in economic data, however, caused Treasurys to sell off and the curve to steepen. Late in the period, communication from the Federal Reserve that they would likely initiate the first rate hike in 2015 also kept a certain amount of upward pressure on yields. Still, global interest rate differentials and developments in China and Greece likely capped U.S. yields on the longer end of the curve. Yields on 2-year Treasury notes, which are especially sensitive to Fed rate hikes, rose during the period.
High-yield and investment-grade credit spreads widened during the period amid a flood of new issuance. Shareholder-friendly activity, which may not be friendly to bondholders, also weighed on bond prices. Spreads in mortgage-backed securities (MBS) were flat during the period as rate volatility hindered investors’ ability to judge MBS prepayment risk.
PERFORMANCE DISCUSSION
We continue to believe that a bottom-up, fundamental, research-driven security selection process represents an effective way to generate consistent risk-adjusted outperformance over time.
The Fund underperformed its benchmark, the Barclays 1-3 Year U.S. Government/Credit Index for the period. Our Treasury allocation detracted from relative performance due to our yield curve positioning. Duration of the Fund’s Treasurys is at present greater than that of the benchmark. We use Treasurys to serve as portfolio ballast as well as to help manage liquidity and duration/yield curve positioning. As short-term notes sold off during the period, our positioning detracted from relative performance. Since our Treasurys allocation is considerably less than that of the benchmark, the performance impact was tempered.
Our investment-grade corporate credit allocation also detracted from relative performance due to our security selection and yield curve positioning. Yield curve positioning in our investment-grade credits detracted from performance, however, we remain constructive on the long-term fundamentals of these securities. Our high-yield corporate credit allocation, where we focus on higher quality issuers - companies with improving balance sheet metrics and management teams committed to consistently generating cash flow - was the largest relative asset class contributor. Outperformance was driven by both spread carry, the excess income generated by the Fund’s securities, and security selection.
Independent energy was the primary corporate sector weighing on relative returns. A decline in Chesapeake Energy, which is not represented in the benchmark, detracted from performance. We continue to like this leading producer of natural gas. It has a leadership team that, in our view, manages its balance sheet like an investment-grade company. With its ample liquidity and a large asset base, Chesapeake, in our view, is well-positioned to attain a ratings upgrade.
On a sector basis, metals and mining and midstream energy also detracted from relative performance. Our security selection in technology and automotives contributed to relative performance.
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Janus Short-Term Bond Fund (unaudited)
OUTLOOK
Recent incrementally improving economic data was a factor in rising short-term rates, as expectations were heighted that the multiyear era of near zero-interest-rate-policy would soon end. Given the sensitivity of shorter-maturity rates to policy rates, a hike would be disproportionately felt on the short end of the curve. It is for this reason that we raised the Fund’s duration during the second half of the period before shortening it in the final weeks as investors sought safety on concerns surrounding the Greece crisis and China’s growth trajectory and the response of its policy makers.
While risks to slowing U.S. – or global – growth could cause the Fed to delay its initial rate hike, our expectation is that one shall occur in 2015. We are positioning the Fund to avoid the shortest duration securities as these will be the ones most likely to incur a capital loss, and instead seek to identify high-quality out-of-benchmark 5-year notes that have a sufficient yield cushion to absorb price declines and still adequately compensate investors.
We expect to continue to maintain our defensive stance, not only in light of the specter of rising rates, but also due to a flood of new issuance, and continued shareholder-friendly activity that eschews the priorities of fixed income investors.
We lowered our corporate credit allocation during the period. Still, we believe that our exposure to these instruments is integral to achieving our goal of generating attractive risk-adjusted returns. Our fundamental, bottom-up investment process that focuses not only on companies, but also on individual securities, in our view, lends itself to effectively uncovering value that investors with a top-down approach may overlook. With a defensive bias, we are concentrating our efforts on issues of higher-quality companies that are committed to disciplined balance sheet management and generating stable cash flow. As some of our lower-yielding investment-grade credits mature, we will seek opportunities to redeploy these proceeds in slightly higher-yielding and longer-dated maturities.
Thank you for your investment in Janus Short-Term Bond Fund.
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(unaudited)
Janus Short-Term Bond Fund At A Glance
Fund Profile
June 30, 2015
Weighted Average Maturity | 1.9 Years | |
Average Effective Duration* | 1.5 Years | |
30-day Current Yield** | ||
Class A Shares at NAV | ||
Without Reimbursement | 0.80% | |
With Reimbursement | 0.92% | |
Class A Shares at MOP | ||
Without Reimbursement | 0.78% | |
With Reimbursement | 0.89% | |
Class C Shares*** | ||
Without Reimbursement | 0.03% | |
With Reimbursement | 0.14% | |
Class D Shares | ||
Without Reimbursement | 0.89% | |
With Reimbursement | 1.06% | |
Class I Shares | ||
Without Reimbursement | 1.04% | |
With Reimbursement | 1.15% | |
Class N Shares | ||
Without Reimbursement | 1.10% | |
With Reimbursement | 1.21% | |
Class S Shares | ||
Without Reimbursement | 0.60% | |
With Reimbursement | 0.71% | |
Class T Shares | ||
Without Reimbursement | 0.85% | |
With Reimbursement | 0.97% | |
Number of Bonds/Notes | 167 |
* | A theoretical measure of price volatility | |
** | Yield will fluctuate | |
*** | Does not include the 1.00% contingent deferred sales charge. |
Ratings† Summary – (% of Total Investments)
June 30, 2015
AAA | 1.5% | |
AA | 28.0% | |
A | 16.8% | |
BBB | 31.4% | |
BB | 12.3% | |
B | 3.2% | |
Not Rated | 3.0% | |
Other | 3.8% |
† | Credit ratings provided by Standard & Poor’s (S&P), an independent credit rating agency. Credit ratings range from AAA (highest) to D (lowest) based on S&P’s measures. Further information on S&P’s rating methodology may be found at www.standardandpoors.com. Other rating agencies may rate the same securities differently. Ratings are relative and subjective and are not absolute standards of quality. Credit quality does not remove market risk and is subject to change. “Not Rated” securities are not rated by S&P, but may be rated by other rating agencies and do not necessarily indicate low quality. “Other” includes cash equivalents, equity securities, and certain derivative instruments. |
Significant Areas of Investment – (% of Net Assets)
As of June 30, 2015
Asset Allocation – (% of Net Assets)
As of June 30, 2015
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Janus Short-Term Bond Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended June 30, 2015 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||||
One | Five | Ten | Since | Total Annual Fund | Net Annual Fund | ||||||||
Year | Year | Year | Inception* | Operating Expenses | Operating Expenses | ||||||||
Janus Short-Term Bond Fund – Class A Shares | |||||||||||||
NAV | 0.35% | 1.74% | 3.22% | 3.85% | 0.85% | 0.75% | |||||||
MOP | –2.20% | 1.22% | 2.72% | 3.62% | |||||||||
Janus Short-Term Bond Fund – Class C Shares | |||||||||||||
NAV | –0.75% | 0.98% | 2.53% | 3.15% | 1.68% | 1.57% | |||||||
CDSC | –1.74% | 0.98% | 2.53% | 3.15% | |||||||||
Janus Short-Term Bond Fund – Class D Shares(1) | 0.19% | 1.87% | 3.44% | 4.21% | 0.75% | 0.64% | |||||||
Janus Short-Term Bond Fund – Class I Shares | 0.60% | 1.99% | 3.38% | 4.07% | 0.66% | 0.56% | |||||||
Janus Short-Term Bond Fund – Class N Shares | 0.66% | 1.76% | 3.38% | 4.18% | 0.59% | 0.49% | |||||||
Janus Short-Term Bond Fund – Class S Shares | –0.17% | 1.54% | 2.97% | 3.65% | 1.09% | 0.99% | |||||||
Janus Short-Term Bond Fund – Class T Shares | 0.08% | 1.76% | 3.38% | 4.18% | 0.84% | 0.74% | |||||||
Barclays 1-3 Year U.S. Government/Credit Index | 0.93% | 1.17% | 2.83% | 4.20%** | |||||||||
Morningstar Quartile – Class T Shares | 4th | 3rd | 2nd | 2nd | |||||||||
Morningstar Ranking – based on total returns for Short-Term Bond Funds | 427/559 | 251/482 | 112/414 | 61/183 | |||||||||
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 2.50%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
See important disclosures on the next page.
4 | JUNE 30, 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.
Fixed income securities are subject to interest rate, inflation, credit and default risk. The bond market is volatile. As interest rates rise, bond prices usually fall, and vice versa. The return of principal is not guaranteed, and prices may decline if an issuer fails to make timely payments or its credit strength weakens.
High-yield/high-risk bonds, also known as “junk” bonds, involve a greater risk of default and price volatility than U.S. Government and other high quality bonds. High-yield/high-risk bonds can experience sudden and sharp price swings which will affect net asset value.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility, lower liquidity and differing financial and information reporting standards, all of which are magnified in emerging markets.
The Fund will normally invest at least 80% of its net assets, measured at the time of purchase, in the type of securities described by its name.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Class A Shares, Class C Shares, Class I Shares, and Class S Shares commenced operations on July 6, 2009. Performance shown for each class for periods prior to July 6, 2009, reflects the performance of the Fund’s Class J Shares, the initial share class (renamed Class T Shares effective February 16, 2010), calculated using the fees and expenses of each respective share class, without the effect of any fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
Class N Shares commenced operations on May 31, 2012. Performance shown for periods prior to May 31, 2012, reflects the performance of the Fund’s Class T Shares, calculated using the fees and expenses of Class T Shares, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return or yield, and therefore the ranking for the period.
© 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 | |
** | The Barclays 1-3 Year U.S. Government/Credit Index’s since inception returns are calculated from August 31, 1992. | |
(1) | Closed to certain new investors. |
Janus Investment Fund | 5
Table of Contents
Janus Short-Term Bond Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,005.60 | $ | 3.93 | $ | 1,000.00 | $ | 1,020.88 | $ | 3.96 | 0.79% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,001.80 | $ | 7.74 | $ | 1,000.00 | $ | 1,017.06 | $ | 7.80 | 1.56% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,006.40 | $ | 3.13 | $ | 1,000.00 | $ | 1,021.67 | $ | 3.16 | 0.63% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,006.80 | $ | 2.79 | $ | 1,000.00 | $ | 1,022.02 | $ | 2.81 | 0.56% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 1,007.20 | $ | 2.44 | $ | 1,000.00 | $ | 1,022.36 | $ | 2.46 | 0.49% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,004.70 | $ | 4.92 | $ | 1,000.00 | $ | 1,019.89 | $ | 4.96 | 0.99% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,005.90 | $ | 3.68 | $ | 1,000.00 | $ | 1,021.12 | $ | 3.71 | 0.74% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 181/365 (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 | JUNE 30, 2015
Table of Contents
Janus Short-Term Bond Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Asset-Backed/Commercial Mortgage-Backed Securities – 5.2% | ||||||||||
$17,924,000 | AmeriCredit Automobile Receivables Trust 2012-2 3.3800%, 4/9/18 | $ | 18,262,817 | |||||||
16,719,000 | AmeriCredit Automobile Receivables Trust 2012-4 1.9300%, 8/8/18 | 16,816,087 | ||||||||
6,796,000 | Americredit Automobile Receivables Trust 2014-4 1.8700%, 12/9/19 | 6,820,547 | ||||||||
8,044,000 | Capital Auto Receivables Asset Trust 2015-1 2.1000%, 1/21/20 | 8,031,934 | ||||||||
1,914,925 | Citigroup Commercial Mortgage Trust 2014-GC25 1.4850%, 10/10/47 | 1,911,540 | ||||||||
3,257,141 | Citigroup Commercial Mortgage Trust 2015-GC27 1.3530%, 2/10/48 | 3,244,197 | ||||||||
2,470,557 | COMM 2014-CCRE19 Mortgage Trust 1.4150%, 8/10/47 | 2,465,700 | ||||||||
1,876,131 | COMM 2014-CCRE20 Mortgage Trust 1.3240%, 11/10/47 | 1,867,908 | ||||||||
2,374,810 | COMM 2014-UBS4 Mortgage Trust 1.3090%, 8/10/47 | 2,369,614 | ||||||||
1,937,733 | COMM 2014-UBS6 Mortgage Trust 1.4450%, 12/10/47 | 1,934,796 | ||||||||
3,213,879 | COMM 2015-DC1 Mortgage Trust 1.4880%, 2/10/48 | 3,214,563 | ||||||||
2,555,719 | COMM 2015-LC19 Mortgage Trust 1.3990%, 2/10/48 | 2,551,829 | ||||||||
2,339,558 | Csail 2015-C2 Commercial Mortgage Trust 1.4544%, 6/15/57 | 2,337,487 | ||||||||
1,843,363 | GS Mortgage Securities Trust 2014-GC24 1.5090%, 9/10/47 | 1,841,909 | ||||||||
3,230,439 | GS Mortgage Securities Trust 2014-GC26 1.4340%, 11/10/47 | 3,217,375 | ||||||||
1,944,927 | GS Mortgage Securities Trust 2015-GC28 1.5280%, 2/10/48 | 1,941,976 | ||||||||
2,180,578 | JPMBB Commercial Mortgage Securities Trust 2014-C26 1.5962%, 1/15/48 | 2,180,007 | ||||||||
2,019,803 | JPMBB Commercial Mortgage Securities Trust 2015-C27 1.4137%, 2/15/48 | 2,011,813 | ||||||||
2,630,084 | JPMBB Commercial Mortgage Securities Trust 2015-C28 1.4451%, 10/15/48 | 2,618,594 | ||||||||
12,962,000 | Santander Drive Auto Receivables Trust 1.9400%, 3/15/18 | 13,019,292 | ||||||||
15,382,000 | Santander Drive Auto Receivables Trust 2015-1 1.9700%, 11/15/19 | 15,433,345 | ||||||||
13,603,000 | Santander Drive Auto Receivables Trust 2015-2 1.8300%, 1/15/20 | 13,574,624 | ||||||||
1,585,910 | SMART ABS Series 2012-4US Trust 0.9700%, 3/14/17 | 1,586,544 | ||||||||
1,916,196 | Wells Fargo Commercial Mortgage Trust 2014-LC18 1.4370%, 12/15/47 | 1,912,588 | ||||||||
1,983,393 | Wells Fargo Commercial Mortgage Trust 2015-C27 1.7300%, 2/15/48 | 1,987,320 | ||||||||
1,980,052 | Wells Fargo Commercial Mortgage Trust 2015-LC20 1.4710%, 4/15/50 | 1,973,914 | ||||||||
1,809,077 | WFRBS Commercial Mortgage Trust 2014-C21 1.4130%, 8/15/47 | 1,807,017 | ||||||||
Total Asset-Backed/Commercial Mortgage-Backed Securities (cost $136,984,633) | 136,935,337 | |||||||||
Bank Loans and Mezzanine Loans – 1.9% | ||||||||||
Consumer Cyclical – 0.6% | ||||||||||
15,970,046 | Hilton Worldwide Finance LLC 3.5000%, 10/26/20‡ | 15,972,601 | ||||||||
Energy – 0.1% | ||||||||||
1,880,000 | Chief Exploration & Development LLC 7.5000%, 5/16/21‡ | 1,763,440 | ||||||||
Finance Companies – 0.1% | ||||||||||
2,132,642 | RPI Finance Trust 3.5000%, 11/9/20‡ | 2,133,964 | ||||||||
Real Estate Investment Trusts (REITs) – 0.1% | ||||||||||
4,726,878 | ESH Hospitality, Inc. 5.0000%, 6/24/19‡ | 4,803,690 | ||||||||
Technology – 1.0% | ||||||||||
25,945,020 | Avago Technologies Cayman, Ltd. 3.7500%, 5/6/21‡ | 25,968,111 | ||||||||
Total Bank Loans and Mezzanine Loans (cost $50,648,959) | 50,641,806 | |||||||||
Corporate Bonds – 63.9% | ||||||||||
Banking – 17.7% | ||||||||||
6,686,000 | Ally Financial, Inc. 3.1250%, 1/15/16 | 6,711,072 | ||||||||
13,334,000 | Ally Financial, Inc. 3.6000%, 5/21/18 | 13,350,667 | ||||||||
8,402,000 | Bank of America Corp. 1.5000%, 10/9/15 | 8,421,283 | ||||||||
17,261,000 | Bank of America Corp. 1.2500%, 1/11/16 | 17,303,255 | ||||||||
20,737,000 | Bank of America Corp. 3.6250%, 3/17/16 | 21,120,634 | ||||||||
3,126,000 | Bank of America Corp. 6.0500%, 5/16/16 | 3,246,026 | ||||||||
6,561,000 | Bank of America Corp. 3.7500%, 7/12/16 | 6,725,937 | ||||||||
19,365,000 | Bank of America NA 1.6500%, 3/26/18 | 19,336,146 | ||||||||
12,964,000 | Bank of America NA 1.7500%, 6/5/18 | 12,936,114 | ||||||||
30,900,000 | BBVA US Senior SAU 4.6640%, 10/9/15 | 31,196,022 | ||||||||
29,979,000 | Citigroup, Inc. 1.8500%, 11/24/17 | 30,052,149 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 7
Table of Contents
Janus Short-Term Bond Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Banking – (continued) | ||||||||||
$31,947,000 | Goldman Sachs Group, Inc. 3.6250%, 2/7/16 | $ | 32,464,509 | |||||||
11,498,000 | Goldman Sachs Group, Inc. 5.6250%, 1/15/17 | 12,175,428 | ||||||||
12,303,000 | ICICI Bank, Ltd., Dubai 4.7000%, 2/21/18 (144A) | 12,945,586 | ||||||||
5,587,000 | Intesa Sanpaolo SpA 3.6250%, 8/12/15 (144A) | 5,600,845 | ||||||||
13,788,000 | Intesa Sanpaolo SpA 3.1250%, 1/15/16 | 13,893,106 | ||||||||
51,580,000 | JPMorgan Chase & Co. 5.1500%, 10/1/15† | 52,057,528 | ||||||||
16,687,000 | Morgan Stanley 3.4500%, 11/2/15 | 16,838,301 | ||||||||
6,675,000 | Morgan Stanley 3.8000%, 4/29/16 | 6,821,950 | ||||||||
12,077,000 | Morgan Stanley 1.8750%, 1/5/18 | 12,109,040 | ||||||||
27,763,000 | Morgan Stanley 1.0173%, 7/23/19‡ | 27,575,572 | ||||||||
26,483,000 | PNC Bank NA 1.6000%, 6/1/18 | 26,441,051 | ||||||||
3,168,000 | PNC Funding Corp. 5.2500%, 11/15/15 | 3,219,759 | ||||||||
31,006,000 | Royal Bank of Scotland Group PLC 2.5500%, 9/18/15 | 31,092,693 | ||||||||
17,051,000 | Royal Bank of Scotland Group PLC 4.7000%, 7/3/18 | 17,619,548 | ||||||||
4,756,000 | Synchrony Financial 1.8750%, 8/15/17 | 4,754,031 | ||||||||
2,225,000 | UBS AG 5.8750%, 7/15/16 | 2,323,027 | ||||||||
16,689,000 | UBS AG 1.8000%, 3/26/18 | 16,664,167 | ||||||||
464,995,446 | ||||||||||
Basic Industry – 5.6% | ||||||||||
11,715,000 | Albemarle Corp. 3.0000%, 12/1/19 | 11,737,762 | ||||||||
15,117,000 | ArcelorMittal 4.5000%, 3/1/16 | 15,343,755 | ||||||||
18,310,000 | ArcelorMittal 5.2500%, 2/25/17 | 19,019,513 | ||||||||
12,166,000 | Ashland, Inc. 3.8750%, 4/15/18 | 12,500,565 | ||||||||
13,582,000 | Chevron Phillips Chemical Co. LLC / Chevron Phillips Chemical Co. LP 1.7000%, 5/1/18 (144A) | 13,568,554 | ||||||||
7,954,000 | Chevron Phillips Chemical Co. LLC / Chevron Phillips Chemical Co. LP 2.4500%, 5/1/20 (144A) | 7,903,174 | ||||||||
11,747,000 | Ecolab, Inc. 1.0000%, 8/9/15 | 11,748,938 | ||||||||
18,439,000 | INVISTA Finance LLC 4.2500%, 10/15/19 (144A) | 18,162,415 | ||||||||
34,536,000 | Rockwood Specialties Group, Inc. 4.6250%, 10/15/20 | 35,960,610 | ||||||||
145,945,286 | ||||||||||
Brokerage – 0.9% | ||||||||||
24,219,000 | Raymond James Financial, Inc. 4.2500%, 4/15/16 | 24,824,306 | ||||||||
Capital Goods – 3.4% | ||||||||||
8,756,000 | CNH Industrial Capital LLC 3.8750%, 11/1/15 | 8,777,890 | ||||||||
2,997,000 | CNH Industrial Capital LLC 3.6250%, 4/15/18 | 2,997,000 | ||||||||
8,711,000 | Eaton Corp. 0.9500%, 11/2/15 | 8,716,653 | ||||||||
9,783,000 | Exelis, Inc. 4.2500%, 10/1/16 | 10,096,193 | ||||||||
18,945,000 | FLIR Systems, Inc. 3.7500%, 9/1/16 | 19,420,576 | ||||||||
9,960,000 | Harris Corp. 1.9990%, 4/27/18 | 9,930,987 | ||||||||
14,501,000 | Martin Marietta Materials, Inc. 1.3818%, 6/30/17‡ | 14,440,270 | ||||||||
12,206,000 | Vulcan Materials Co. 7.0000%, 6/15/18 | 13,792,780 | ||||||||
88,172,349 | ||||||||||
Communications – 2.1% | ||||||||||
20,506,000 | Gannett Co., Inc. 6.3750%, 9/1/15 | 20,621,346 | ||||||||
11,481,000 | NBCUniversal Enterprise, Inc. 0.8123%, 4/15/16 (144A),‡ | 11,513,927 | ||||||||
13,923,000 | Time Warner, Inc. 3.1500%, 7/15/15 | 13,937,480 | ||||||||
9,742,000 | Verizon Communications, Inc. 2.5000%, 9/15/16 | 9,900,074 | ||||||||
55,972,827 | ||||||||||
Consumer Cyclical – 4.2% | ||||||||||
7,363,000 | Brinker International, Inc. 2.6000%, 5/15/18 | 7,377,387 | ||||||||
22,946,000 | General Motors Co. 3.5000%, 10/2/18† | 23,691,975 | ||||||||
15,387,000 | General Motors Financial Co., Inc. 2.7500%, 5/15/16 | 15,570,844 | ||||||||
8,172,000 | GLP Capital LP / GLP Financing II, Inc. 4.3750%, 11/1/18 | 8,386,515 | ||||||||
7,973,000 | Hanesbrands, Inc. 6.3750%, 12/15/20 | 8,331,785 | ||||||||
38,123,000 | MGM Resorts International 6.6250%, 7/15/15 | 38,117,282 | ||||||||
7,637,000 | PACCAR Financial Corp. 0.7500%, 8/14/15 | 7,641,055 | ||||||||
109,116,843 | ||||||||||
Consumer Non-Cyclical – 7.9% | ||||||||||
19,604,000 | Actavis Funding SCS 1.8500%, 3/1/17 | 19,699,707 | ||||||||
22,871,000 | Actavis Funding SCS 2.3500%, 3/12/18 | 22,991,736 | ||||||||
7,021,000 | Actavis, Inc. 1.8750%, 10/1/17 | 7,029,397 | ||||||||
6,256,000 | Fresenius US Finance II, Inc. 9.0000%, 7/15/15 (144A) | 6,266,010 | ||||||||
15,705,000 | HCA, Inc. 7.1900%, 11/15/15 | 16,019,100 | ||||||||
15,889,000 | HJ Heinz Co. 1.6000%, 6/30/17 (144A) | 15,890,621 | ||||||||
13,516,000 | Mallinckrodt International Finance SA / Mallinckrodt CB LLC 4.8750%, 4/15/20 (144A) | 13,753,206 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Consumer Non-Cyclical – (continued) | ||||||||||
$11,737,000 | Mylan, Inc. 1.3500%, 11/29/16 | $ | 11,701,366 | |||||||
29,575,000 | Perrigo Co. PLC 1.3000%, 11/8/16 | 29,449,809 | ||||||||
25,628,000 | SABMiller Holdings, Inc. 0.9682%, 8/1/18 (144A)†,‡ | 25,697,298 | ||||||||
20,075,000 | Valeant Pharmaceuticals International, Inc. 5.3750%, 3/15/20 (144A) | 20,727,438 | ||||||||
9,593,000 | Zimmer Biomet Holdings, Inc. 1.4500%, 4/1/17 | 9,596,242 | ||||||||
9,976,000 | Zimmer Biomet Holdings, Inc. 2.0000%, 4/1/18 | 9,979,571 | ||||||||
208,801,501 | ||||||||||
Electric – 1.4% | ||||||||||
36,145,000 | PPL WEM, Ltd. / Western Power Distribution, Ltd. 3.9000%, 5/1/16 (144A) | 36,868,153 | ||||||||
Energy – 8.1% | ||||||||||
25,443,000 | Chesapeake Energy Corp. 3.2500%, 3/15/16 | 25,347,589 | ||||||||
1,488,000 | Chesapeake Energy Corp. 6.5000%, 8/15/17 | 1,523,340 | ||||||||
25,762,000 | Chesapeake Energy Corp. 3.5253%, 4/15/19‡ | 23,572,230 | ||||||||
24,795,000 | DCP Midstream Operating LP 3.2500%, 10/1/15 | 24,793,983 | ||||||||
7,208,000 | DCP Midstream Operating LP 2.5000%, 12/1/17 | 6,976,652 | ||||||||
6,382,000 | Enbridge, Inc. 0.7338%, 6/2/17‡ | 6,305,595 | ||||||||
5,729,000 | EnLink Midstream Partners LP 2.7000%, 4/1/19 | 5,656,167 | ||||||||
8,610,000 | Enterprise Products Operating LLC 1.2500%, 8/13/15 | 8,614,055 | ||||||||
10,250,000 | Kinder Morgan Energy Partners LP 2.6500%, 2/1/19 | 10,164,638 | ||||||||
8,047,000 | Kinder Morgan Finance Co. LLC 5.7000%, 1/5/16 | 8,225,080 | ||||||||
25,640,000 | Kinder Morgan, Inc. 3.0500%, 12/1/19 | 25,611,617 | ||||||||
4,402,000 | Nabors Industries, Inc. 2.3500%, 9/15/16 | 4,414,858 | ||||||||
17,484,000 | Nabors Industries, Inc. 6.1500%, 2/15/18 | 18,879,923 | ||||||||
17,959,000 | Plains All American Pipeline LP / PAA Finance Corp. 3.9500%, 9/15/15 | 18,060,684 | ||||||||
15,990,000 | Rowan Cos., Inc. 5.0000%, 9/1/17 | 16,499,585 | ||||||||
9,126,000 | Spectra Energy Partners LP 2.9500%, 9/25/18 | 9,333,370 | ||||||||
213,979,366 | ||||||||||
Finance Companies – 3.1% | ||||||||||
13,826,000 | AerCap Ireland Capital, Ltd. / AerCap Global Aviation Trust 2.7500%, 5/15/17 (144A) | 13,739,587 | ||||||||
26,475,000 | CIT Group, Inc. 5.0000%, 5/15/17 | 27,301,020 | ||||||||
17,833,000 | General Electric Capital Corp. 4.3750%, 9/21/15 | 17,983,511 | ||||||||
9,937,000 | General Electric Capital Corp. 5.0000%, 1/8/16 | 10,166,117 | ||||||||
2,207,000 | International Lease Finance Corp. 8.6250%, 9/15/15 | 2,234,588 | ||||||||
6,873,000 | International Lease Finance Corp. 2.2359%, 6/15/16‡ | 6,864,409 | ||||||||
3,340,000 | Navient Corp. 3.8750%, 9/10/15 | 3,344,175 | ||||||||
81,633,407 | ||||||||||
Industrial – 0.2% | ||||||||||
4,947,000 | Cintas Corp. No 2 2.8500%, 6/1/16 | 5,010,252 | ||||||||
Insurance – 1.2% | ||||||||||
12,844,000 | ACE INA Holdings, Inc. 2.6000%, 11/23/15 | 12,934,165 | ||||||||
18,425,000 | American International Group, Inc. 2.3750%, 8/24/15 | 18,460,763 | ||||||||
31,394,928 | ||||||||||
Mortgage Assets – 1.5% | ||||||||||
35,336,000 | NRAM PLC 5.6250%, 6/22/17 (144A) | 38,289,206 | ||||||||
Owned No Guarantee – 0.5% | ||||||||||
12,934,000 | Korea National Oil Corp. 2.7500%, 1/23/19 (144A) | 13,108,725 | ||||||||
Real Estate Investment Trusts (REITs) – 0.7% | ||||||||||
18,897,000 | Reckson Operating Partnership LP 6.0000%, 3/31/16 | 19,517,918 | ||||||||
Technology – 3.9% | ||||||||||
3,131,000 | CommScope Holding Co., Inc. 6.6250%, 6/1/20 (144A) | 3,248,413 | ||||||||
9,671,000 | CommScope, Inc. 4.3750%, 6/15/20 (144A) | 9,767,710 | ||||||||
13,767,000 | Dun & Bradstreet Corp. 4.0000%, 6/15/20 | 13,832,504 | ||||||||
18,417,000 | Fiserv, Inc. 3.1250%, 10/1/15 | 18,514,960 | ||||||||
10,887,000 | Molex Electronic Technologies LLC 2.8780%, 4/15/20 (144A) | 10,719,906 | ||||||||
20,515,000 | Seagate HDD Cayman 3.7500%, 11/15/18 | 21,387,585 | ||||||||
11,608,000 | TSMC Global, Ltd. 0.9500%, 4/3/16 (144A) | 11,576,600 | ||||||||
13,582,000 | TSMC Global, Ltd. 1.6250%, 4/3/18 (144A) | 13,426,608 | ||||||||
102,474,286 | ||||||||||
Transportation – 1.5% | ||||||||||
19,974,000 | Asciano Finance, Ltd. 3.1250%, 9/23/15 (144A) | 20,055,234 | ||||||||
2,892,000 | JB Hunt Transport Services, Inc. 3.3750%, 9/15/15 | 2,906,538 | ||||||||
15,466,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 2.5000%, 3/15/16 (144A) | 15,574,123 | ||||||||
38,535,895 | ||||||||||
Total Corporate Bonds (cost $1,676,822,371) | 1,678,640,694 | |||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus Short-Term Bond Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
U.S. Treasury Notes/Bonds – 24.6% | ||||||||||
$55,159,000 | 0.5000%, 6/30/16 | $ | 55,249,516 | |||||||
26,285,000 | 0.6250%, 7/15/16 | 26,356,863 | ||||||||
23,095,000 | 0.5000%, 8/31/16 | 23,127,472 | ||||||||
11,538,000 | 0.8750%, 9/15/16 | 11,604,701 | ||||||||
44,509,000 | 0.5000%, 9/30/16 | 44,568,108 | ||||||||
14,853,000 | 0.3750%, 10/31/16 | 14,843,717 | ||||||||
24,053,000 | 0.5000%, 11/30/16 | 24,068,033 | ||||||||
120,927,000 | 0.6250%, 12/31/16 | 121,177,279 | ||||||||
40,239,000 | 0.5000%, 3/31/17 | 40,198,117 | ||||||||
10,191,000 | 0.7500%, 6/30/17 | 10,210,903 | ||||||||
23,053,000 | 0.8750%, 8/15/17 | 23,135,853 | ||||||||
17,615,000 | 1.0000%, 9/15/17 | 17,716,832 | ||||||||
10,239,000 | 0.6250%, 9/30/17 | 10,208,600 | ||||||||
18,144,000 | 0.8750%, 10/15/17 | 18,185,114 | ||||||||
66,350,000 | 0.8750%, 11/15/17 | 66,474,406 | ||||||||
11,788,000 | 1.0000%, 12/15/17 | 11,838,653 | ||||||||
10,228,000 | 0.7500%, 12/31/17 | 10,206,429 | ||||||||
43,334,000 | 0.8750%, 1/15/18 | 43,347,520 | ||||||||
2,006,000 | 3.5000%, 2/15/18 | 2,141,718 | ||||||||
10,250,000 | 0.7500%, 3/31/18 | 10,197,951 | ||||||||
29,942,000 | 0.7500%, 4/15/18 | 29,785,284 | ||||||||
10,070,000 | 1.3750%, 6/30/18 | 10,179,350 | ||||||||
10,093,000 | 1.3750%, 9/30/18 | 10,176,580 | ||||||||
10,113,000 | 1.3750%, 12/31/18 | 10,170,674 | ||||||||
Total U.S. Treasury Notes/Bonds (cost $644,320,870) | 645,169,673 | |||||||||
Investment Companies – 4.4% | ||||||||||
Money Markets – 4.4% | ||||||||||
116,968,440 | Janus Cash Liquidity Fund LLC, 0.1291%°°,£ (cost $116,968,440) | 116,968,440 | ||||||||
Total Investments (total cost $2,625,745,273) – 100.0% | 2,628,355,950 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0% | 613,260 | |||||||||
Net Assets – 100% | $ | 2,628,969,210 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States | $ | 2,274,863,280 | 86 | .6% | ||||
United Kingdom | 124,473,635 | 4 | .7 | |||||
Luxembourg | 34,363,268 | 1 | .3 | |||||
Spain | 31,196,022 | 1 | .2 | |||||
Singapore | 25,968,111 | 1 | .0 | |||||
Taiwan | 25,003,208 | 1 | .0 | |||||
Australia | 21,641,778 | 0 | .8 | |||||
Italy | 19,493,951 | 0 | .8 | |||||
Switzerland | 18,987,194 | 0 | .7 | |||||
Netherlands | 13,739,587 | 0 | .5 | |||||
South Korea | 13,108,725 | 0 | .5 | |||||
India | 12,945,586 | 0 | .5 | |||||
Canada | 6,305,595 | 0 | .2 | |||||
Germany | 6,266,010 | 0 | .2 | |||||
Total | $ | 2,628,355,950 | 100 | .0% | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | JUNE 30, 2015
Table of Contents
Notes to Schedule of Investments and Other Information
Barclays 1-3 Year U.S. Government/Credit Index | Measures Tresuries, government-related issues and corporates with maturity between 1-3 years. | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
PLC | Public Limited Company |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. These securities have been determined to be liquid under guidelines established by the Board of Trustees. The total value of 144A securities as of the year ended June 30, 2015 is indicated in the table below: |
Value as a % | ||||||||||
Fund | Value | of Net Assets | ||||||||
Janus Short-Term Bond Fund | $ | 338,403,339 | 12.9 | % | ||||||
† | 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 June 30, 2015, is noted below. |
Fund | Aggregate Value | ||||
Janus Short-Term Bond Fund | $ | 40,471,760 | |||
‡ | 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 year end. | |
°° | Rate shown is the 7-day yield as of June 30, 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 year ended June 30, 2015. Unless otherwise indicated, all information in the table is for the year ended June 30, 2015. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 6/30/15 | Gain/(Loss) | Income | at 6/30/15 | |||||||||||||||
Janus Short-Term Bond Fund | |||||||||||||||||||||
Janus Cash Liquidity Fund LLC | 112,343,218 | 1,624,223,661 | (1,619,598,439) | 116,968,440 | $ | – | $ | 38,126 | $ | 116,968,440 | |||||||||||
Janus Investment Fund | 11
Table of Contents
Notes to Schedule of Investments and Other Information (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 June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Janus Short-Term Bond Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Asset-Backed/Commercial Mortgage-Backed Securities | $ | – | $ | 136,935,337 | $ | – | |||||
Bank Loans and Mezzanine Loans | – | 50,641,806 | – | ||||||||
Corporate Bonds | – | 1,678,640,694 | – | ||||||||
U.S. Treasury Notes/Bonds | – | 645,169,673 | – | ||||||||
Investment Companies | – | 116,968,440 | – | ||||||||
Total Assets | $ | – | $ | 2,628,355,950 | $ | – | |||||
12 | JUNE 30, 2015
Table of Contents
Statement of Assets and Liabilities
Janus | ||||
Short-Term | ||||
As of June 30, 2015 | Bond Fund | |||
Assets: | ||||
Investments, at cost | $ | 2,625,745,273 | ||
Unaffiliated investments, at value | $ | 2,511,387,510 | ||
Affiliated investments, at value | 116,968,440 | |||
Cash | 174,628 | |||
Non-interested Trustees’ deferred compensation | 52,513 | |||
Receivables: | ||||
Investments sold | 3,132,263 | |||
Fund shares sold | 2,151,323 | |||
Dividends from affiliates | 4,242 | |||
Interest | 15,623,035 | |||
Other assets | 11,729 | |||
Total Assets | 2,649,505,683 | |||
Liabilities: | ||||
Payables: | ||||
Investments purchased | 15,878,990 | |||
Fund shares repurchased | 2,630,790 | |||
Dividends | 167,804 | |||
Advisory fees | 946,940 | |||
Fund administration fees | 20,657 | |||
Transfer agent fees and expenses | 554,126 | |||
12b-1 Distribution and shareholder servicing fees | 100,703 | |||
Non-interested Trustees’ fees and expenses | 17,872 | |||
Non-interested Trustees’ deferred compensation fees | 52,513 | |||
Accrued expenses and other payables | 166,078 | |||
Total Liabilities | 20,536,473 | |||
Net Assets | $ | 2,628,969,210 |
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 | ||||
Short-Term | ||||
As of June 30, 2015 | Bond Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 2,632,052,323 | ||
Undistributed net investment income/(loss) | (82,340) | |||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | (5,611,450) | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 2,610,677 | |||
Total Net Assets | $ | 2,628,969,210 | ||
Net Assets - Class A Shares | $ | 155,365,366 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 51,148,462 | |||
Net Asset Value Per Share(1) | $ | 3.04 | ||
Maximum Offering Price Per Share(2) | $ | 3.12 | ||
Net Assets - Class C Shares | $ | 54,465,340 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 17,946,710 | |||
Net Asset Value Per Share(1) | $ | 3.03 | ||
Net Assets - Class D Shares | $ | 188,071,660 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 61,825,475 | |||
Net Asset Value Per Share | $ | 3.04 | ||
Net Assets - Class I Shares | $ | 446,893,810 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 147,110,015 | |||
Net Asset Value Per Share | $ | 3.04 | ||
Net Assets - Class N Shares | $ | 38,345,320 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 12,615,763 | |||
Net Asset Value Per Share | $ | 3.04 | ||
Net Assets - Class S Shares | $ | 2,609,052 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 859,840 | |||
Net Asset Value Per Share | $ | 3.03 | ||
Net Assets - Class T Shares | $ | 1,743,218,662 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 573,068,850 | |||
Net Asset Value Per Share | $ | 3.04 |
(1) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(2) | Maximum offering price is computed at 100/97.50 of net asset value. |
See Notes to Financial Statements.
14 | JUNE 30, 2015
Table of Contents
Statement of Operations
Janus | ||||
Short-Term | ||||
For the year ended June 30, 2015 | Bond Fund | |||
Investment Income: | ||||
Interest | $ | 56,580,459 | ||
Dividends from affiliates | 38,126 | |||
Other income | 835,381 | |||
Total Investment Income | 57,453,966 | |||
Expenses: | ||||
Advisory fees | 15,744,921 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 424,055 | |||
Class C Shares | 617,513 | |||
Class S Shares | 8,415 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 233,090 | |||
Class S Shares | 8,415 | |||
Class T Shares | 4,852,064 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 78,630 | |||
Class C Shares | 39,935 | |||
Class I Shares | 262,116 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 18,302 | |||
Class C Shares | 9,129 | |||
Class D Shares | 49,881 | |||
Class I Shares | 18,282 | |||
Class N Shares | 280 | |||
Class S Shares | 107 | |||
Class T Shares | 20,588 | |||
Shareholder reports expense | 188,953 | |||
Registration fees | 169,236 | |||
Custodian fees | 14,837 | |||
Professional fees | 90,103 | |||
Non-interested Trustees’ fees and expenses | 62,576 | |||
Fund administration fees | 257,915 | |||
Other expenses | 407,744 | |||
Total Expenses | 23,577,087 | |||
Less: Excess Expense Reimbursement | (2,900,712) | |||
Net Expenses | 20,676,375 | |||
Net Investment Income/(Loss) | 36,777,591 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | (5,440,149) | |||
Total Net Realized Gain/(Loss) on Investments | (5,440,149) | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (24,064,706) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (24,064,706) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 7,272,736 |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets
Janus Short-Term | ||||||||
Bond Fund | ||||||||
For each year ended June 30 | 2015 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 36,777,591 | $ | 41,519,632 | ||||
Net realized gain/(loss) on investments | (5,440,149) | 3,745,385 | ||||||
Change in unrealized net appreciation/depreciation | (24,064,706) | 25,696,546 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 7,272,736 | 70,961,563 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income | ||||||||
Class A Shares | (2,061,518) | (2,296,713) | ||||||
Class C Shares | (274,422) | (442,250) | ||||||
Class D Shares | (2,674,302) | (3,019,842) | ||||||
Class I Shares | (6,572,061) | (5,702,007) | ||||||
Class N Shares | (586,292) | (709,136) | ||||||
Class S Shares | (34,328) | (51,950) | ||||||
Class T Shares | (24,701,892) | (29,752,834) | ||||||
Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | (201,032) | (433,722) | ||||||
Class C Shares | (73,376) | (196,250) | ||||||
Class D Shares | (226,141) | (525,894) | ||||||
Class I Shares | (557,420) | (948,223) | ||||||
Class N Shares | (46,921) | (134,248) | ||||||
Class S Shares | (4,078) | (11,203) | ||||||
Class T Shares | (2,321,742) | (5,509,095) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (40,335,525) | (49,733,367) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 78,010,815 | 88,145,967 | ||||||
Class C Shares | 11,390,161 | 20,124,753 | ||||||
Class D Shares | 34,271,238 | 45,755,880 | ||||||
Class I Shares | 341,557,057 | 292,092,856 | ||||||
Class N Shares | 8,676,888 | 18,879,679 | ||||||
Class S Shares | 553,024 | 1,022,615 | ||||||
Class T Shares | 436,167,132 | 769,344,793 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 2,051,213 | 2,452,036 | ||||||
Class C Shares | 273,202 | 503,148 | ||||||
Class D Shares | 2,831,865 | 3,462,819 | ||||||
Class I Shares | 5,629,133 | 4,901,790 | ||||||
Class N Shares | 633,213 | 843,351 | ||||||
Class S Shares | 38,383 | 61,079 | ||||||
Class T Shares | 26,679,046 | 34,897,188 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (94,238,842) | (73,437,890) | ||||||
Class C Shares | (25,340,198) | (30,631,263) | ||||||
Class D Shares | (48,415,316) | (57,676,417) | ||||||
Class I Shares | (286,504,643) | (223,595,880) | ||||||
Class N Shares | (6,222,278) | (21,957,454) | ||||||
Class S Shares | (1,808,190) | (2,406,133) | ||||||
Class T Shares | (820,517,952) | (905,371,379) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (334,285,049) | (32,588,462) | ||||||
Net Increase/(Decrease) in Net Assets | (367,347,838) | (11,360,266) | ||||||
Net Assets: | ||||||||
Beginning of period | 2,996,317,048 | 3,007,677,314 | ||||||
End of period | $ | 2,628,969,210 | $ | 2,996,317,048 | ||||
Undistributed Net Investment Income/(Loss) | $ | (82,340) | $ | (67,843) |
See Notes to Financial Statements.
16 | JUNE 30, 2015
Table of Contents
Financial Highlights
Class A Shares
Janus Short-Term Bond Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $3.07 | $3.05 | $3.08 | $3.08 | $3.09 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.04(1) | 0.04(1) | 0.05 | 0.06 | 0.07 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.03) | 0.03 | (0.01) | 0.01 | 0.01 | |||||||||||||||||
Total from Investment Operations | 0.01 | 0.07 | 0.04 | 0.07 | 0.08 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.04) | (0.04) | (0.05) | (0.06) | (0.07) | |||||||||||||||||
Distributions (from capital gains) | –(2) | (0.01) | (0.02) | (0.01) | (0.02) | |||||||||||||||||
Total Dividends and Distributions | (0.04) | (0.05) | (0.07) | (0.07) | (0.09) | |||||||||||||||||
Net Asset Value, End of Period | $3.04 | $3.07 | $3.05 | $3.08 | $3.08 | |||||||||||||||||
Total Return | 0.35% | 2.33% | 1.24% | 2.18% | 2.65% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $155,365 | $171,464 | $153,132 | $423,210 | $374,981 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $169,622 | $164,880 | $192,733 | $387,633 | $164,464 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.90% | 0.85% | 1.07% | 1.40% | 0.88% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.80% | 0.77% | 0.81% | 0.80% | 0.80% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.21% | 1.41% | 1.49% | 1.95% | 2.12% | |||||||||||||||||
Portfolio Turnover Rate | 84% | 78% | 100% | 93% | 100% |
Class C Shares
Janus Short-Term Bond Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $3.07 | $3.05 | $3.08 | $3.08 | $3.08 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.01(1) | 0.02(1) | 0.02 | 0.04 | 0.04 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.04) | 0.03 | (0.01) | 0.01 | 0.02 | |||||||||||||||||
Total from Investment Operations | (0.03) | 0.05 | 0.01 | 0.05 | 0.06 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.01) | (0.02) | (0.02) | (0.04) | (0.04) | |||||||||||||||||
Distributions (from capital gains) | –(2) | (0.01) | (0.02) | (0.01) | (0.02) | |||||||||||||||||
Total Dividends and Distributions | (0.01) | (0.03) | (0.04) | (0.05) | (0.06) | |||||||||||||||||
Net Asset Value, End of Period | $3.03 | $3.07 | $3.05 | $3.08 | $3.08 | |||||||||||||||||
Total Return | (0.75)% | 1.52% | 0.46% | 1.44% | 2.24% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $54,465 | $68,852 | $78,276 | $75,789 | $70,507 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $61,751 | $74,487 | $78,430 | $74,993 | $69,983 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.67% | 1.68% | 1.69% | 1.66% | 1.64% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.57% | 1.56% | 1.55% | 1.53% | 1.53% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.44% | 0.60% | 0.74% | 1.23% | 1.40% | |||||||||||||||||
Portfolio Turnover Rate | 84% | 78% | 100% | 93% | 100% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. | |
(2) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
Janus Investment Fund | 17
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Financial Highlights (continued)
Class D Shares
Janus Short-Term Bond Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $3.08 | $3.05 | $3.09 | $3.09 | $3.09 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.04(1) | 0.05(1) | 0.05 | 0.06 | 0.07 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.04) | 0.04 | (0.02) | 0.01 | 0.02 | |||||||||||||||||
Total from Investment Operations | – | 0.09 | 0.03 | 0.07 | 0.09 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.04) | (0.05) | (0.05) | (0.06) | (0.07) | |||||||||||||||||
Distributions (from capital gains) | –(2) | (0.01) | (0.02) | (0.01) | (0.02) | |||||||||||||||||
Total Dividends and Distributions | (0.04) | (0.06) | (0.07) | (0.07) | (0.09) | |||||||||||||||||
Net Asset Value, End of Period | $3.04 | $3.08 | $3.05 | $3.09 | $3.09 | |||||||||||||||||
Total Return | 0.19% | 2.77% | 1.01% | 2.30% | 3.12% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $188,072 | $201,587 | $208,522 | $207,395 | $210,532 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $194,242 | $202,309 | $210,423 | $207,647 | $221,970 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.76% | 0.75% | 0.77% | 0.74% | 0.72% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.64% | 0.66% | 0.69% | 0.69% | 0.67% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.37% | 1.51% | 1.60% | 2.07% | 2.25% | |||||||||||||||||
Portfolio Turnover Rate | 84% | 78% | 100% | 93% | 100% |
Class I Shares
Janus Short-Term Bond Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $3.07 | $3.05 | $3.08 | $3.08 | $3.09 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.04(1) | 0.05(1) | 0.05 | 0.07 | 0.07 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.03) | 0.03 | (0.01) | 0.01 | 0.01 | |||||||||||||||||
Total from Investment Operations | 0.01 | 0.08 | 0.04 | 0.08 | 0.08 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.04) | (0.05) | (0.05) | (0.07) | (0.07) | |||||||||||||||||
Distributions (from capital gains) | –(2) | (0.01) | (0.02) | (0.01) | (0.02) | |||||||||||||||||
Total Dividends and Distributions | (0.04) | (0.06) | (0.07) | (0.08) | (0.09) | |||||||||||||||||
Net Asset Value, End of Period | $3.04 | $3.07 | $3.05 | $3.08 | $3.08 | |||||||||||||||||
Total Return | 0.60% | 2.54% | 1.48% | 2.43% | 2.91% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $446,894 | $391,360 | $315,482 | $275,345 | $543,799 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $450,223 | $356,795 | $307,611 | $387,327 | $350,062 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.65% | 0.66% | 0.66% | 0.64% | 0.63% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.55% | 0.56% | 0.55% | 0.55% | 0.56% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.46% | 1.60% | 1.73% | 2.22% | 2.39% | |||||||||||||||||
Portfolio Turnover Rate | 84% | 78% | 100% | 93% | 100% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. | |
(2) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
18 | JUNE 30, 2015
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Class N Shares
Janus Short-Term Bond Fund | ||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
Net Asset Value, Beginning of Period | $3.07 | $3.05 | $3.08 | $3.08 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.05(2) | 0.05(2) | 0.05 | –(3) | ||||||||||||||
Net realized and unrealized gain/(loss) | (0.03) | 0.03 | (0.01) | –(3) | ||||||||||||||
Total from Investment Operations | 0.02 | 0.08 | 0.04 | – | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | (0.05) | (0.05) | (0.05) | –(3) | ||||||||||||||
Distributions (from capital gains) | –(3) | (0.01) | (0.02) | – | ||||||||||||||
Total Dividends and Distributions | (0.05) | (0.06) | (0.07) | – | ||||||||||||||
Net Asset Value, End of Period | $3.04 | $3.07 | $3.05 | $3.08 | ||||||||||||||
Total Return* | 0.66% | 2.59% | 1.48% | 0.17% | ||||||||||||||
Net Assets, End of Period (in thousands) | $38,345 | $35,680 | $37,619 | $34,342 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $38,577 | $43,206 | $37,659 | $26,909 | ||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||
Ratio of Gross Expenses** | 0.59% | 0.59% | 0.60% | 0.61% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.49% | 0.51% | 0.55% | 0.56% | ||||||||||||||
Ratio of Net Investment Income/(Loss)** | 1.52% | 1.60% | 1.74% | 1.80% | ||||||||||||||
Portfolio Turnover Rate | 84% | 78% | 100% | 93% |
Class S Shares
Janus Short-Term Bond Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $3.07 | $3.05 | $3.08 | $3.08 | $3.08 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.03(2) | 0.04(2) | 0.04 | 0.05 | 0.06 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.04) | 0.03 | (0.01) | 0.01 | 0.02 | |||||||||||||||||
Total from Investment Operations | (0.01) | 0.07 | 0.03 | 0.06 | 0.08 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.03) | (0.04) | (0.04) | (0.05) | (0.06) | |||||||||||||||||
Distributions (from capital gains) | –(3) | (0.01) | (0.02) | (0.01) | (0.02) | |||||||||||||||||
Total Dividends and Distributions | (0.03) | (0.05) | (0.06) | (0.06) | (0.08) | |||||||||||||||||
Net Asset Value, End of Period | $3.03 | $3.07 | $3.05 | $3.08 | $3.08 | |||||||||||||||||
Total Return | (0.17)% | 2.15% | 1.03% | 1.98% | 2.74% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $2,609 | $3,863 | $5,149 | $5,127 | $5,692 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $3,366 | $4,353 | $5,117 | $5,547 | $5,172 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.09% | 1.08% | 1.09% | 1.06% | 1.08% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.99% | 0.96% | 0.99% | 1.00% | 1.03% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.02% | 1.20% | 1.29% | 1.77% | 1.90% | |||||||||||||||||
Portfolio Turnover Rate | 84% | 78% | 100% | 93% | 100% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from May 31, 2012 (inception date) through June 30, 2012. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year. | |
(3) | 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
Janus Short-Term Bond Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $3.08 | $3.05 | $3.09 | $3.09 | $3.09 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.04(1) | 0.04(1) | 0.05 | 0.06 | 0.07 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.04) | 0.04 | (0.02) | 0.01 | 0.02 | |||||||||||||||||
Total from Investment Operations | – | 0.08 | 0.03 | 0.07 | 0.09 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.04) | (0.04) | (0.05) | (0.06) | (0.07) | |||||||||||||||||
Distributions (from capital gains) | –(2) | (0.01) | (0.02) | (0.01) | (0.02) | |||||||||||||||||
Total Dividends and Distributions | (0.04) | (0.05) | (0.07) | (0.07) | (0.09) | |||||||||||||||||
Net Asset Value, End of Period | $3.04 | $3.08 | $3.05 | $3.09 | $3.09 | |||||||||||||||||
Total Return | 0.08% | 2.67% | 0.90% | 2.18% | 2.99% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $1,743,219 | $2,123,511 | $2,209,497 | $2,022,283 | $1,953,155 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $1,940,826 | $2,130,299 | $2,200,413 | $1,915,783 | $1,950,013 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.84% | 0.84% | 0.85% | 0.84% | 0.84% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.74% | 0.76% | 0.80% | 0.80% | 0.80% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.27% | 1.37% | 1.49% | 1.95% | 2.16% | |||||||||||||||||
Portfolio Turnover Rate | 84% | 78% | 100% | 93% | 100% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. | |
(2) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
20 | JUNE 30, 2015
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Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
Janus Short-Term Bond Fund (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in income-producing securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
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 evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices
Janus Investment Fund | 21
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Notes to Financial Statements (continued)
are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of June 30, 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 year. 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
22 | JUNE 30, 2015
Table of Contents
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, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
Dividends are declared daily and distributed monthly for the Fund. Realized capital gains, if any, are declared and distributed in December. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
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 Fund may be invested in lower-rated debt securities that have a higher risk of default or loss of value since these securities may be sensitive to economic changes, political changes or adverse developments specific to the issuer.
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central
Janus Investment Fund | 23
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Notes to Financial Statements (continued)
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.
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 June 30, 2015.
• | Bank Loans – Bank loans are obligations of companies or other entities entered into in connection with recapitalizations, acquisitions, and refinancings. The Fund’s investments in bank loans are generally acquired as a participation interest in, or assignment of, loans originated by a lender or other financial institution. These investments may include institutionally-traded floating and fixed-rate debt securities. | |
• | Floating Rate Loans – Floating rate loans are debt securities that have floating interest rates, that adjust periodically, and are tied to a benchmark lending rate, such as the London Interbank Offered Rate (“LIBOR”). In other cases, the lending rate could be tied to the prime rate offered by one or more major U.S. banks or the rate paid on large certificates of deposit traded in the secondary markets. If the benchmark lending rate changes, the rate payable to lenders under the loan will change at the next scheduled adjustment date specified in the loan agreement. Floating rate loans are typically issued to companies (“borrowers”) in connection with recapitalizations, acquisitions, and refinancings. Floating rate loan investments are generally below investment grade. Senior floating rate loans are secured by specific collateral of a borrower and are senior in the borrower’s capital structure. The senior position in the borrower’s capital structure generally gives holders of senior loans a claim on certain of the borrower’s assets that is senior to subordinated debt and preferred and common stock in the case of a borrower’s default. Floating rate loan investments may involve foreign borrowers, and investments may be denominated in foreign currencies. Floating rate loans often involve borrowers whose financial condition is troubled or uncertain and companies |
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that are highly leveraged. The Fund may invest in obligations of borrowers who are in bankruptcy proceedings. While the Fund generally expects to invest in fully funded term loans, certain of the loans in which the Fund may invest include revolving loans, bridge loans, and delayed draw term loans. |
Purchasers of floating rate loans may pay and/or receive certain fees. The Fund may receive fees such as covenant waiver fees or prepayment penalty fees. The Fund may pay fees such as facility fees. Such fees may affect the Fund’s return. |
• | Mezzanine Loans – Mezzanine loans are secured by the stock of the company that owns the assets. Mezzanine loans are a hybrid of debt and equity financing that is typically used to fund the expansion of existing companies. A mezzanine loan is composed of debt capital that gives the lender the right to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. Mezzanine loans typically are the most subordinated debt obligation in an issuer’s capital structure. |
Mortgage- and Asset-Backed Securities
Mortgage- and asset-backed securities represent interests in “pools” of commercial or residential mortgages or other assets, including consumer loans or receivables. The Fund may purchase fixed or variable rate commercial or residential 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 Mae and Freddie Mac securities 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 guarantors or insurers will meet their obligations.
Mortgage- and asset-backed securities are also subject to extension risk, which is the risk that rising interest rates could cause mortgages or other obligations underlying these securities to be paid more slowly than expected, increasing the Fund’s sensitivity to interest rate changes and causing its price to decline.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
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,
Janus Investment Fund | 25
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Notes to Financial Statements (continued)
including the risk that the governmental entity that controls the repayment of sovereign debt may not be willing or able to repay the principal and/or to pay the interest on its sovereign debt in a timely manner. A sovereign debtor’s willingness or ability to satisfy its debt obligation may be affected by various factors, including its cash flow situation, the extent of its foreign currency reserves, the availability of foreign exchange when a payment is due, the relative size of its debt position in relation to its economy as a whole, the sovereign debtor’s policy toward international lenders, and local political constraints to which the governmental entity may be subject. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies, and other entities. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance, or repay principal or interest when due may result in the cancellation of third party commitments to lend funds to the sovereign debtor, which may further impair such debtor’s ability or willingness to timely service its debts. The Fund may be requested to participate in the rescheduling of such sovereign debt and to extend further loans to governmental entities, which may adversely affect the Fund’s holdings. In the event of default, there may be limited or no legal remedies for collecting sovereign debt and there may be no bankruptcy proceedings through which the Fund may collect all or part of the sovereign debt that a governmental entity has not repaid.
When-Issued and Delayed Delivery Securities
The Fund may purchase or sell securities on a when-issued or delayed delivery basis. When-issued and delayed delivery securities in which the Fund may invest include U.S. Treasury Securities, municipal bonds, bank loans, and other similar instruments. The price of the underlying securities and date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Losses may arise due to changes in the market value of the securities or from the inability of counterparties to meet the terms of the contract. In connection with such purchases, the Fund may hold liquid assets as collateral with the Fund’s custodian sufficient to cover the purchase price.
3. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Contractual | ||||||||||
Average | Investment | |||||||||
Daily Net Assets | Advisory | |||||||||
Fund | of the Fund | Fee (%) | ||||||||
Janus Short-Term Bond Fund | First $ | 300 Million | 0.64 | |||||||
Over $ | 300 Million | 0.54 | ||||||||
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
Janus Short-Term Bond Fund | 0.49 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, 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
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provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the year ended June 30, 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
Janus Investment Fund | 27
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Notes to Financial Statements (continued)
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 June 30, 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 and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the year ended June 30, 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 $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 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 product compliant with Rule 2a-7 under the 1940 Act. There are no restrictions on the Fund’s ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Fund to Janus Cash Liquidity Fund LLC. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the year ended June 30, 2015 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 2.50% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the year ended June 30, 2015, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Janus Short-Term Bond Fund | $ | 6,192 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the year ended June 30, 2015, redeeming shareholders of Class A Shares paid the following CDSCs to Janus Distributors:
Fund (Class A Shares) | CDSC | |||||
Janus Short-Term Bond Fund | $ | 14,483 | ||||
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 year ended June 30, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Janus Short-Term Bond Fund | $ | 12,805 | ||||
As of June 30, 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 Short-Term Bond Fund - Class A Shares | – | % | – | % | ||||||
Janus Short-Term Bond Fund - Class C Shares | – | – | ||||||||
Janus Short-Term Bond Fund - Class D Shares | – | – | ||||||||
Janus Short-Term Bond Fund - Class I Shares | – | – | ||||||||
Janus Short-Term Bond Fund - Class N Shares | 86 | 1 | ||||||||
Janus Short-Term Bond Fund - Class S Shares | – | – | ||||||||
Janus Short-Term Bond Fund - Class T Shares | – | – | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time
28 | JUNE 30, 2015
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to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
4. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation, derivatives, and foreign currency contract adjustments. 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.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
Janus Short-Term Bond Fund | $ | (29,826) | $ | – | $ | (5,534,658) | $ | – | $ | – | $ | (52,516) | $ | 2,533,887 | |||||||||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of June 30, 2015, that may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. The following table shows these capital loss carryovers.
Capital Loss Carryover Expiration Schedule
For the year ended June 30, 2015
Accumulated | |||||||||||||||
No Expiration | Capital | ||||||||||||||
Fund | Short-Term | Long-Term | Losses | ||||||||||||
Janus Short-Term Bond Fund | $ | (4,481,749) | $ | (1,052,909) | $ | (5,534,658) | |||||||||
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 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.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
Janus Short-Term Bond Fund | $ | 2,625,822,063 | $ | 9,137,631 | $ | (6,603,744) | ||||||||
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. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the year ended June 30, 2015
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Short-Term Bond Fund | $ | 36,903,099 | $ | 3,432,426 | $ | – | $ | – | ||||||||||||||
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Notes to Financial Statements (continued)
For the year ended June 30, 2014
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Short-Term Bond Fund | $ | 42,691,217 | $ | 7,042,150 | $ | – | $ | – | ||||||||||||||
Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
Janus Short-Term Bond Fund | $ | – | $ | 112,727 | $ | (112,727) | ||||||||
5. | Capital Share Transactions |
Janus Short-Term Bond Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 25,561,395 | 28,723,148 | ||||||||
Reinvested dividends and distributions | 672,661 | 798,255 | ||||||||
Shares repurchased | (30,902,120) | (23,929,246) | ||||||||
Net Increase/(Decrease) in Fund Shares | (4,668,064) | 5,592,157 | ||||||||
Shares Outstanding, Beginning of Period | 55,816,526 | 50,224,369 | ||||||||
Shares Outstanding, End of Period | 51,148,462 | 55,816,526 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 3,738,329 | 6,569,097 | ||||||||
Reinvested dividends and distributions | 89,793 | 164,193 | ||||||||
Shares repurchased | (8,315,194) | (9,993,852) | ||||||||
Net Increase/(Decrease) in Fund Shares | (4,487,072) | (3,260,562) | ||||||||
Shares Outstanding, Beginning of Period | 22,433,782 | 25,694,344 | ||||||||
Shares Outstanding, End of Period | 17,946,710 | 22,433,782 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 11,220,935 | 14,893,837 | ||||||||
Reinvested dividends and distributions | 927,715 | 1,126,612 | ||||||||
Shares repurchased | (15,853,531) | (18,780,805) | ||||||||
Net Increase/(Decrease) in Fund Shares | (3,704,881) | (2,760,356) | ||||||||
Shares Outstanding, Beginning of Period | 65,530,356 | 68,290,712 | ||||||||
Shares Outstanding, End of Period | 61,825,475 | 65,530,356 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 111,829,038 | 95,191,849 | ||||||||
Reinvested dividends and distributions | 1,846,058 | 1,595,674 | ||||||||
Shares repurchased | (93,964,522) | (72,857,705) | ||||||||
Net Increase/(Decrease) in Fund Shares | 19,710,574 | 23,929,818 | ||||||||
Shares Outstanding, Beginning of Period | 127,399,441 | 103,469,623 | ||||||||
Shares Outstanding, End of Period | 147,110,015 | 127,399,441 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 2,839,659 | 6,150,005 | ||||||||
Reinvested dividends and distributions | 207,462 | 274,551 | ||||||||
Shares repurchased | (2,040,052) | (7,139,855) | ||||||||
Net Increase/(Decrease) in Fund Shares | 1,007,069 | (715,299) | ||||||||
Shares Outstanding, Beginning of Period | 11,608,694 | 12,323,993 | ||||||||
Shares Outstanding, End of Period | 12,615,763 | 11,608,694 |
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Janus Short-Term Bond Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 181,586 | 333,566 | ||||||||
Reinvested dividends and distributions | 12,608 | 19,924 | ||||||||
Shares repurchased | (593,034) | (784,980) | ||||||||
Net Increase/(Decrease) in Fund Shares | (398,840) | (431,490) | ||||||||
Shares Outstanding, Beginning of Period | 1,258,680 | 1,690,170 | ||||||||
Shares Outstanding, End of Period | 859,840 | 1,258,680 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 142,785,429 | 250,374,476 | ||||||||
Reinvested dividends and distributions | 8,739,771 | 11,353,809 | ||||||||
Shares repurchased | (268,753,768) | (294,769,938) | ||||||||
Net Increase/(Decrease) in Fund Shares | (117,228,568) | (33,041,653) | ||||||||
Shares Outstanding, Beginning of Period | 690,297,418 | 723,339,071 | ||||||||
Shares Outstanding, End of Period | 573,068,850 | 690,297,418 |
6. | Purchases and Sales of Investment Securities |
For the year ended June 30, 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 Short-Term Bond Fund | $ | 1,052,615,042 | $ | 1,357,553,138 | $ | 1,296,841,369 | $ | 1,390,803,494 | ||||||
7. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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 | 31
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of Janus Short-Term Bond Fund:
of Janus Short-Term Bond Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Janus Short-Term Bond Fund (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
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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 June 30, 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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Designation Requirements (unaudited)
For federal income tax purposes, the Fund designated the following for the year ended June 30, 2015:
Capital Gain Distributions
Fund | ||||||||||
Janus Short-Term Bond Fund | $ | 3,432,426 | ||||||||
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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
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Trustees and Officers (unaudited) (continued)
OFFICERS
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
�� | ||||||
Gibson Smith 151 Detroit Street Denver, CO 80206 DOB: 1968 | Executive Vice President and Co-Portfolio Manager Janus Short-Term Bond Fund | 7/10-Present | Chief Investment Officer Fixed Income and Executive Vice President of Janus Capital; Director of Perkins Investment Management LLC; and Portfolio Manager for other Janus accounts. Formerly, Executive Vice President of Janus Distributors LLC and Janus Services LLC (2007-2013). | |||
Darrell Watters 151 Detroit Street Denver, CO 80206 DOB: 1963 | Executive Vice President and Co-Portfolio Manager Janus Short-Term Bond Fund | 5/07-Present | Vice President of Janus Capital and Portfolio Manager for other Janus accounts. | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
52 | JUNE 30, 2015
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OFFICERS (continued)
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
Janus Investment Fund | 53
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-0815-94128 | 125-02-93030 08-15 |
Table of Contents
annual report
June 30, 2015
Janus Global Unconstrained Bond Fund (formerly named Janus Unconstrained Bond Fund)
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
Table of Contents
Janus Global Unconstrained Bond Fund
1 | ||
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21 | ||
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25 | ||
27 | ||
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60 |
Table of Contents
Janus Global Unconstrained Bond Fund (unaudited)
FUND SNAPSHOT This dynamic, opportunistic bond fund seeks to achieve long-term positive returns in diverse market environments over full market cycles. The Fund invests broadly across global fixed income markets and is not constrained by benchmark-specific guidelines. The unconstrained nature of the strategy allows us to fully express our high-conviction active views and avoid areas of the market where we see greater downside risk. |
PERFORMANCE OVERVIEW
During the one-year period ended June 30, 2015, Janus Global Unconstrained Bond Fund’s Class I Shares returned -1.56% compared with 0.24% for the Fund’s benchmark, the 3-Month USD LIBOR.
MARKET ENVIRONMENT
Global bond markets largely registered negative returns during the one-year period as corporate spreads widened, in part due to a late 2014 collapse in energy prices, which acutely impacted the oil and gas sector. Sovereign bonds with the exception of U.S. Treasurys were held back by a strengthening U.S. dollar, slowing emerging market growth and, toward the end of the period, a flare-up in the Greece crisis, which unwound much of the gains European bonds enjoyed in the lead up to the announcement of the European Central Bank’s (ECB) quantitative easing (QE) program.
The U.S. Treasury yield curve flattened during the period, although much of the gains of longer-dated securities were given up over the final few months. Long-dated Treasury yields fell through the end of 2014 as investors clamored for dollar-denominated assets. Solid U.S. economic growth suggested to investors that the Federal Reserve (Fed) would initiate rate hikes in 2015. At the same time, both Europe and Japan were taking steps to make their monetary policy even more accommodative, making yields on Treasurys relatively attractive. Also contributing to the bond rally was softer-than-expected economic data in the first part of 2015, which diminished investor concern of breakout growth or stronger-than-expected inflation. A spring rebound in economic data, along with signs of incipient growth in Europe, caused Treasurys to sell off and the curve to steepen. Late in the period, communication from the Fed that they would likely initiate the first rate hike in 2015 also kept a certain amount of upward pressure on yields. Still, global interest rate differentials and developments in China and Greece likely capped yields on the longer end of the curve.
Rates fell across the curve in the eurozone in anticipation of the ECB initiating QE; the announcement of a larger-than-expected QE program then pushed rates down even further. Concerns that eurozone sovereigns were overvalued sparked a spring sell-off — which was aggravated by low market liquidity — causing the yield on the 10-year German bund to rise to nearly 1% after having almost fallen to zero only a couple of months prior.
High-yield and investment-grade credit spreads widened during the period amid a flood of new issuance. Shareholder-friendly activity, which may not be friendly to bondholders, also weighed on bond prices.
PERFORMANCE DISCUSSION
For the entire period, the Fund underperformed its benchmark, the 3-Month USD London Interbank Offered Rate (LIBOR).
On October 6, 2014, the Fund transitioned to a new portfolio manager and, thus, instituted an investment strategy different than what had been utilized during the first three months of the reporting period. During the three months prior to the new manager’s arrival, the Fund underperformed its benchmark. Underperformance was driven by its corporate credit exposure, specifically the Fund’s exposure to certain high-yield credits that struggled through summer 2014.
The remainder of this performance discussion will concentrate on the nine-month period that the Fund was overseen by the new manager. The Fund’s investment approach seeks to provide long-term positive returns and to preserve capital through various market environments by managing portfolio duration, credit risk and volatility. The Fund seeks to limit potential downside and avoid areas of the market where we see disproportionate risk.
A key component of the Fund’s new strategy is to maintain a sizable allocation in shorter-duration investment-grade and high-yield corporate credit. These cash bonds provide the Fund with its yield foundation. Corporate credits are selected based on a variety of
Janus Investment Fund | 1
Table of Contents
Janus Global Unconstrained Bond Fund (unaudited)
criteria; however, in general, we focus on investment-grade and “crossover” high-yield names with shorter maturities (often under 36 months) in a few common sectors. We define “crossover” credits as issuers that are either just above or just below investment-grade status. We seek to identify the most attractive segments of the market, and allocate capital accordingly across sectors, currency exposures, sovereign debt, credit quality, duration and yield curve positioning.
Corporate bond exposure through the end of 2014 detracted from performance as the Fund’s energy sector holdings were weighed down by falling energy prices and concerns about the levered balance sheets of several energy companies active in the high-yield bond market. U.S. dollar-denominated debt in both Russian and Brazilian corporate bonds also detracted from performance. Other credit sectors, namely telecommunications, media and technology, contributed to results through December 2014. For the final six months of the period, credit exposure contributed to Fund performance.
In the Fund’s pursuit of generating positive returns, it deploys a Structural Alpha strategy. One component of this strategy is to sell volatility across a range of asset classes, including fixed-income, equities and currencies. It is our view that prices of many investment instruments presume a greater level of volatility in underlying assets than what will ultimately be experienced, and returns can be generated by selling such instruments. During the period, the Fund — utilizing out-of-the-money options — employed its volatility strategy in currency, equities and interest rate markets. Given the breadth of the markets in which this strategy is deployed, selling volatility during the period had both positive and negative impacts on Fund performance. For example, in the final three months of 2014, volatility sales in equities and currency markets were generally flat, while exposure to U.S. Treasurys were additive. During the first quarter of 2015, volatility sales drove positive performance and, as explained below, they detracted in the period’s final three months due to exposure to the German bund.
Relative value trades were also a component of Structural Alpha that was employed by the Fund. In the fourth quarter of 2014, the Fund purchased medium-term interest-rate futures and sold longer-term interest-rate futures with the expectation that the yield curve would steepen over the period in anticipation of Fed tightening, while the shorter end remained anchored to policy rates. Those specific trades ultimately detracted from performance. During the ensuing three months — January 2015 to March 2015 — relative value trades continued to weigh on performance as we sold exposure to the bund in favor of U.S. Treasurys, expecting that the bund was overvalued. However, the bund’s rally continued for much of the winter, with yields nearly sliding to 0%.
Selling default protection on issuers that we consider to be misunderstood by other market participants is another strategy of Structural Alpha. Similar to volatility, we view that the market has a tendency to overpay for protection against credit events of certain issuers. In instances where we believe that default risk is overpriced, we sell credit default swaps (CDS) to investors who take an opposing view on the risk of the underlying credit.
Russian debt is an example of where this strategy was deployed. After last autumn’s collapse in global energy prices and additional sanctions imposed upon Russia, the ability of the country’s government to generate sufficient revenue to cover its budget was called into question. Selling such protection on the sovereign debt of Brazil — another country facing economic challenges — was also a part of the Fund’s strategy. As markets reacted to adverse events in these two countries, we sold government default protection during the final three months of the reporting period. Our allocation to Brazilian CDS was a strong contributor to performance during this period, with our Russian allocation also contributing, but by a much smaller amount.
At the onset of the second quarter of 2015, we employed a volatility strategy on German bunds. After having seen yields on the 10-year bund plummet to near 0% as the ECB rolled out its plan to purchase 60 billion euros of assets monthly, the market exhibited trepidation, wondering if the bund rally was overextended or if the ECB would need to complete its scheduled asset purchases in light of slowly improving eurozone data.
Our position on the bund involved selling volatility using options without taking a directional stance. As the bund rally reversed in late April 2015, the exposure of the trade shifted to a point where it was long the bund. Both the speed and the magnitude of the bund reversal surprised markets. As prices continued to fall, we employed other strategies to manage losses until expiry of the original contracts. We then reinstituted exposure to bunds, still short volatility, but more directionally focused — short German debt — as this better aligned with our macro view. In aggregate, the bund strategy we instituted from early April 2015 through the period’s end ultimately detracted from performance.
Russia, Germany and Brazil are not the only countries that the Fund had exposure to during the period. By utilizing a relative-value strategy, we have positioned ourselves to potentially benefit from a compression of Mexican and
2 | JUNE 30, 2015
Table of Contents
(unaudited)
U.S. interest rates. Similarly, we have taken positions that stand to benefit should inflation in Mexico pick up and the country’s ability to service its outstanding sovereign debt not come into question.
The Fund makes extensive use of derivatives as a component of its Structural Alpha strategy. These derivatives are utilized with the aim of generating returns in addition to those attributed to our core fixed income allocation. Management has discretion to tactically use each of these derivatives to access trades and as hedging instruments. During the period, the Global Unconstrained Bond Fund used options, futures, futures options, CDS, other swaps and forward exchange contracts. Options and futures, in part, are utilized as part of a strategy to capture yield by selling volatility across a range of asset classes. CDS are used as a strategy to generate yield by selling default protection on an underlying asset. Forward exchange contracts are used, in part, to hedge our currency exposure and as a strategy for capitalizing on potential dislocations in the foreign currency market. For the period, the derivatives impact on performance was negative.
Please see “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
Thank you for your investment in Janus Global Unconstrained Bond Fund.
Janus Investment Fund | 3
Table of Contents
Janus Global Unconstrained Bond Fund (unaudited)
Janus Global Unconstrained Bond Fund At A Glance
Fund Profile
June 30, 2015
Weighted Average Maturity | 1.7 Years | |
Average Effective Duration* | 0.9 Years | |
30-day Current Yield** | ||
Class A Shares at NAV | ||
Without Reimbursement | 0.80% | |
With Reimbursement | 0.80% | |
Class A Shares at MOP | ||
Without Reimbursement | 0.76% | |
With Reimbursement | 0.76% | |
Class C Shares*** | ||
Without Reimbursement | 0.03% | |
With Reimbursement | 0.03% | |
Class D Shares | ||
Without Reimbursement | 0.80% | |
With Reimbursement | 0.83% | |
Class I Shares | ||
Without Reimbursement | 1.05% | |
With Reimbursement | 1.05% | |
Class N Shares | ||
Without Reimbursement | 1.08% | |
With Reimbursement | 1.08% | |
Class R Shares | ||
Without Reimbursement | 0.28% | |
With Reimbursement | 0.28% | |
Class S Shares | ||
Without Reimbursement | 0.58% | |
With Reimbursement | 0.58% | |
Class T Shares | ||
Without Reimbursement | 0.83% | |
With Reimbursement | 0.83% | |
Number of Bonds/Notes | 188 |
* | A theoretical measure of price volatility | |
** | Yield will fluctuate | |
*** | Does not include the 1.00% contingent deferred sales charge. |
Ratings† Summary – (% of Total Investments)
June 30, 2015
AAA | 0.4% | |
AA | 10.7% | |
A | 8.2% | |
BBB | 44.4% | |
BB | 15.9% | |
B | 1.0% | |
CCC | 0.6% | |
D | 1.0% | |
Not Rated | 17.0% | |
Other | 0.8% |
† | Credit ratings provided by Standard & Poor’s (S&P), an independent credit rating agency. Credit ratings range from AAA (highest) to D (lowest) based on S&P’s measures. Further information on S&P’s rating methodology may be found at www.standardandpoors.com. Other rating agencies may rate the same securities differently. Ratings are relative and subjective and are not absolute standards of quality. Credit quality does not remove market risk and is subject to change. “Not Rated” securities are not rated by S&P, but may be rated by other rating agencies and do not necessarily indicate low quality. “Other” includes cash equivalents, equity securities, and certain derivative instruments. |
4 | JUNE 30, 2015
Table of Contents
(unaudited)
Janus Global Unconstrained Bond Fund At A Glance
Significant Areas of Investment – (% of Net Assets)
As of June 30, 2015
Asset Allocation – (% of Net Assets)
As of June 30, 2015
*Includes Other of (0.7)%.
Emerging markets comprised 13.6% of total net assets.
Janus Investment Fund | 5
Table of Contents
Janus Global Unconstrained Bond Fund (unaudited)
Performance
Expense Ratios – per the October 28, 2014 | |||||||
Average Annual Total Return – for the periods ended June 30, 2015 | prospectuses and the February 6, 2015 prospectus for Class R Shares | ||||||
One | Since | Total Annual Fund | |||||
Year | Inception* | Operating Expenses | |||||
Janus Global Unconstrained Bond Fund – Class A Shares | |||||||
NAV | –1.86% | –1.61% | 1.01% | ||||
MOP | –6.53% | –5.91% | |||||
Janus Global Unconstrained Bond Fund – Class C Shares | |||||||
NAV | –2.59% | –2.28% | 1.77% | ||||
CDSC | –3.56% | –2.28% | |||||
Janus Global Unconstrained Bond Fund – Class D Shares(1) | –1.68% | –1.44% | 0.96% | ||||
Janus Global Unconstrained Bond Fund – Class I Shares | –1.56% | –1.34% | 0.76% | ||||
Janus Global Unconstrained Bond Fund – Class N Shares | –1.58% | –1.35% | 0.75% | ||||
Janus Global Unconstrained Bond Fund – Class R Shares | –2.22% | –2.00% | 1.50% | ||||
Janus Global Unconstrained Bond Fund – Class S Shares | –2.13% | –1.86% | 1.25% | ||||
Janus Global Unconstrained Bond Fund – Class T Shares | –1.80% | –1.56% | 1.00% | ||||
3-Month USD LIBOR | 0.24% | 0.24% | |||||
Morningstar Quartile – Class I Shares | 3rd | 4th | |||||
Morningstar Ranking – based on total returns for Nontraditional Bond Funds | 307/430 | 325/428 | |||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month–end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
Maximum Offering Price (MOP) returns include the maximum sales charge of 4.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
See important disclosures on the next page.
6 | JUNE 30, 2015
Table of Contents
(unaudited)
The expense ratios shown reflect estimated annualized expenses that the Fund expects to incur during its initial fiscal year.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details
Fixed income securities are subject to interest rate, inflation, credit and default risk. As interest rates rise, bond prices usually fall, and vice versa. High-yield bonds, or “junk” bonds, involve a greater risk of default and price volatility. Foreign securities, including sovereign debt, are subject to currency fluctuations, political and economic uncertainty, increased volatility and lower liquidity, all of which are magnified in emerging markets.
Derivatives involve risks in addition to the risks of the underlying securities, including gains or losses which, as a result of leverage, can be substantially greater than the derivatives’ original cost. Short sales are speculative transactions with potentially unlimited losses, and the use of leverage can magnify the effect of losses. No investment strategy can ensure a profit or eliminate the risk of loss.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Class R Shares commenced operations on February 6, 2015. Performance shown for periods prior to February 6, 2015, reflects the historical performance of the Fund’s Class I Shares, calculated using the fees and expenses of Class R Shares, without the effect of any applicable fee and expense limitations or waivers.
If Class R Shares of the Fund had been available during periods prior to February 6, 2015, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of Class R Shares reflects the fees and expenses of Class R Shares, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Until the earlier of three years from inception or the Fund’s assets meeting the first fee breakpoint, 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.”
Effective October 6, 2014, the name of the Fund changed from Janus Unconstrained Bond Fund to Janus Global Unconstrained Bond Fund, and Bill Gross is Portfolio Manager of the Fund.
* | The Fund’s inception date – May 27, 2014 | |
(1) | Closed to certain new investors. |
Janus Investment Fund | 7
Table of Contents
Janus Global Unconstrained Bond Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)* | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 997.40 | $ | 5.20 | $ | 1,000.00 | $ | 1,019.59 | $ | 5.26 | 1.05% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 993.80 | $ | 8.90 | $ | 1,000.00 | $ | 1,015.87 | $ | 9.00 | 1.80% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 998.70 | $ | 5.05 | $ | 1,000.00 | $ | 1,019.74 | $ | 5.11 | 1.02% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 999.00 | $ | 3.67 | $ | 1,000.00 | $ | 1,021.12 | $ | 3.71 | 0.74% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 998.90 | $ | 3.72 | $ | 1,000.00 | $ | 1,021.08 | $ | 3.76 | 0.75% | |||||||||||||||||
Class R Shares | $ | 1,000.00 | $ | 996.80 | $ | 5.91 | $ | 1,000.00 | $ | 1,017.41 | $ | 7.45 | 1.49% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 996.00 | $ | 6.63 | $ | 1,000.00 | $ | 1,018.15 | $ | 6.71 | 1.34% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 998.70 | $ | 4.91 | $ | 1,000.00 | $ | 1,019.89 | $ | 4.96 | 0.99% | |||||||||||||||||
* | Actual Expenses Paid During Period for Class R Shares reflect only the inception period for the share class (February 6, 2015 to June 30, 2015) and are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 145/365 (to reflect the period). Therefore, actual expenses shown are lower than would be expected for a six-month period. For all other share classes the Actual Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). | |
† | Hypothetical Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 181/365 (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 | JUNE 30, 2015
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Janus Global Unconstrained Bond Fund(1)
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Asset-Backed/Commercial Mortgage-Backed Securities – 9.6% | ||||||||||
$ | 19,707,945 | Alternative Loan Trust 2003-4CB 5.7500%, 4/25/33 | $ | 19,912,434 | ||||||
1,240,612 | Alternative Loan Trust 2006-14CB 6.0000%, 6/25/36† | 1,082,071 | ||||||||
849,078 | Alternative Loan Trust 2006-45T1 5.5000%, 2/25/37† | 683,326 | ||||||||
3,967,112 | Alternative Loan Trust 2006-45T1 6.0000%, 2/25/37† | 3,327,788 | ||||||||
2,328,372 | Alternative Loan Trust 2006-4CB 5.5000%, 4/25/36 | 2,263,818 | ||||||||
2,653,725 | Alternative Loan Trust 2006-5T2 6.0000%, 4/25/36† | 2,291,799 | ||||||||
1,098,635 | Alternative Loan Trust 2007-9T1 5.5000%, 5/25/22† | 953,988 | ||||||||
10,029,667 | Banc of America Alternative Loan Trust 2003-5 5.5000%, 7/25/33† | 10,191,706 | ||||||||
1,920,941 | Banc of America Funding 2006-7 Trust 6.0000%, 9/25/36†,‡ | 1,887,159 | ||||||||
1,803,235 | Banc of America Funding 2007-2 Trust 5.9770%, 3/25/37†,‡ | 1,789,471 | ||||||||
58,795 | Banc of America Mortgage 2007-1 Trust 5.7500%, 1/25/37 | 55,398 | ||||||||
220,349 | Banc of America Mortgage Trust 2004-5 4.7500%, 6/25/19 | 223,172 | ||||||||
3,626,630 | Bear Stearns ALT-A Trust 2005-4 2.6977%, 5/25/35†,‡ | 2,938,833 | ||||||||
3,596,540 | CHL Mortgage Pass-Through Trust 2006-13 6.2500%, 9/25/36 | 3,286,651 | ||||||||
10,419,345 | CSMC Mortgage-Backed Trust 2006-9 6.0000%, 11/25/36† | 10,170,344 | ||||||||
330,902 | Equity One Mortgage Pass-Through Trust 2003-4 5.1599%, 10/25/34† | 298,461 | ||||||||
1,011,589 | GSR Mortgage Loan Trust 2005-9F 6.0000%, 1/25/36† | 898,392 | ||||||||
1,270,447 | GSR Mortgage Loan Trust 2006-7F 6.2500%, 8/25/36† | 954,017 | ||||||||
1,530,894 | IndyMac INDA Mortgage Loan Trust 2006-AR1 4.7232%, 8/25/36†,‡ | 1,471,082 | ||||||||
3,146,070 | JP Morgan Mortgage Trust 2005-S3 5.5000%, 1/25/36 | 2,983,217 | ||||||||
5,320,556 | JP Morgan Mortgage Trust 2005-S3 5.7500%, 1/25/36† | 4,715,434 | ||||||||
2,586,577 | JP Morgan Mortgage Trust 2007-S1 6.0000%, 3/25/37† | 2,183,658 | ||||||||
7,759,837 | Morgan Stanley Mortgage Loan Trust 2006-11 6.0000%, 8/25/36† | 7,175,653 | ||||||||
1,859,507 | Morgan Stanley Mortgage Loan Trust 2006-17XS 5.5771%, 10/25/46† | 1,066,455 | ||||||||
896,912 | Morgan Stanley Mortgage Loan Trust 2006-2 5.2500%, 2/25/21 | 865,130 | ||||||||
607,351 | Ownit Mortgage Loan Trust Series 2006-2 5.6329%, 1/25/37† | 572,141 | ||||||||
943,106 | Residential Asset Securitization Trust 2005-A15 6.0000%, 2/25/36† | 734,292 | ||||||||
6,440,719 | Residential Asset Securitization Trust 2007-A1 6.0000%, 3/25/37† | 4,509,998 | ||||||||
3,344,037 | RFMSI Series 2006-S10 Trust 5.5000%, 10/25/21† | 3,310,489 | ||||||||
21,252,000 | Springleaf Mortgage Loan Trust 2012-2 6.0000%, 10/25/57 (144A)†,‡ | 21,411,263 | ||||||||
3,043,397 | WaMu Mortgage Pass-Through Certificates Series 2006-AR6 Trust 4.4356%, 8/25/36†,‡ | 2,744,715 | ||||||||
8,385,195 | WaMu Mortgage Pass-Through Certificates Series 2007-HY5 Trust 2.0468%, 5/25/37†,‡ | 7,248,078 | ||||||||
7,406,772 | Wells Fargo Mortgage Backed Securities 2007-8 Trust 6.0000%, 7/25/37† | 5,476,516 | ||||||||
9,386,056 | Wells Fargo Mortgage Loan 2010-RR2 Trust 5.5000%, 4/27/35 (144A),† | 9,252,661 | ||||||||
Total Asset-Backed/Commercial Mortgage-Backed Securities (cost $140,731,600) | 138,929,610 | |||||||||
Common Stocks – 10.2% | ||||||||||
Chemicals – 9.7% | ||||||||||
1,014,814 | Sigma-Aldrich Corp.† | 141,414,331 | ||||||||
Real Estate Investment Trusts (REITs) – 0.5% | ||||||||||
199,552 | American Capital Agency Corp.† | 3,665,770 | ||||||||
315,609 | Annaly Capital Management, Inc.† | 2,900,447 | ||||||||
6,566,217 | ||||||||||
Total Common Stocks (cost $147,843,040) | 147,980,548 | |||||||||
Corporate Bonds – 73.2% | ||||||||||
Banking – 14.5% | ||||||||||
$ | 35,340,000 | Ally Financial, Inc. 3.1250%, 1/15/16† | 35,472,525 | |||||||
7,980,000 | Ally Financial, Inc. 3.5000%, 7/18/16† | 8,099,700 | ||||||||
8,122,000 | Ally Financial, Inc. 5.5000%, 2/15/17† | 8,467,185 | ||||||||
16,274,000 | Ally Financial, Inc. 3.2500%, 9/29/17† | 16,274,000 | ||||||||
35,165,000 | Ally Financial, Inc. 3.2500%, 2/13/18† | 34,945,219 | ||||||||
34,000,000 | Ally Financial, Inc. 3.6000%, 5/21/18† | 34,042,500 | ||||||||
4,965,000 | Ally Financial, Inc. 8.0000%, 12/31/18† | 5,542,181 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Janus Global Unconstrained Bond Fund(1)
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Banking – (continued) | ||||||||||
$ | 514,000 | Bank of America Corp. 5.2500%, 12/1/15† | $ | 522,943 | ||||||
2,906,000 | Bank of America Corp. 6.0500%, 5/16/16† | 3,017,579 | ||||||||
11,275,000 | Bank of America Corp. 5.7500%, 8/15/16† | 11,806,628 | ||||||||
1,553,000 | Bank of America Corp. 5.7000%, 5/2/17† | 1,656,875 | ||||||||
6,000,000 | Capital One Financial Corp. 1.0000%, 11/6/15† | 5,990,946 | ||||||||
3,000,000 | China Merchants Bank Co., Ltd., Hong Kong 2.3750%, 6/12/17† | 3,020,439 | ||||||||
7,034,000 | Citigroup Global Markets Holdings, Inc. 0%, 9/7/16† | 6,920,532 | ||||||||
3,765,000 | Countrywide Financial Corp. 6.2500%, 5/15/16† | 3,912,833 | ||||||||
2,294,000 | HSBC Bank Brasil SA – Banco Multiplo 4.0000%, 5/11/16 (144A),† | 2,321,528 | ||||||||
19,184,000 | Royal Bank of Scotland Group PLC 2.5500%, 9/18/15† | 19,237,638 | ||||||||
2,660,000 | Royal Bank of Scotland PLC 3.9500%, 9/21/15† | 2,676,146 | ||||||||
1,424,000 | Santander Holdings USA, Inc. 4.6250%, 4/19/16† | 1,459,502 | ||||||||
9,400,000 | Toll Road Investors Partnership II LP 0%, 2/15/43†,§ | 1,642,236 | ||||||||
2,700,000 | Wells Fargo & Co. 5.1250%, 9/15/16† | 2,830,218 | ||||||||
209,859,353 | ||||||||||
Basic Industry – 1.5% | ||||||||||
5,843,000 | ArcelorMittal 4.5000%, 8/5/15† | 5,844,811 | ||||||||
1,267,000 | ArcelorMittal 4.5000%, 3/1/16† | 1,286,005 | ||||||||
8,325,000 | Ashland, Inc. 3.8750%, 4/15/18† | 8,553,938 | ||||||||
6,000,000 | Eastman Chemical Co. 3.0000%, 12/15/15† | 6,053,736 | ||||||||
138,000 | United States Steel Corp. 6.0500%, 6/1/17† | 143,520 | ||||||||
21,882,010 | ||||||||||
Brokerage – 0.9% | ||||||||||
5,124,000 | Jefferies Group LLC 3.8750%, 11/9/15† | 5,167,098 | ||||||||
3,674,000 | Leucadia National Corp. 8.1250%, 9/15/15† | 3,717,610 | ||||||||
4,695,000 | Nomura Holdings, Inc. 4.1250%, 1/19/16† | 4,772,726 | ||||||||
13,657,434 | ||||||||||
Capital Goods – 3.4% | ||||||||||
5,283,000 | CNH Industrial America LLC 7.2500%, 1/15/16† | 5,388,660 | ||||||||
20,072,000 | CNH Industrial Capital LLC 3.8750%, 11/1/15† | 20,122,180 | ||||||||
3,300,000 | Hanson, Ltd. 6.1250%, 8/15/16† | 3,436,950 | ||||||||
2,097,000 | Harsco Corp. 2.7000%, 10/15/15† | 2,097,000 | ||||||||
5,658,000 | Owens-Brockway Glass Container, Inc. 7.3750%, 5/15/16† | 5,919,683 | ||||||||
4,553,000 | Pentair Finance SA 1.3500%, 12/1/15† | 4,559,110 | ||||||||
7,944,000 | SPX Corp. 6.8750%, 9/1/17† | 8,559,660 | ||||||||
50,083,243 | ||||||||||
Communications – 6.7% | ||||||||||
3,000,000 | CBS Corp. 7.6250%, 1/15/16† | 3,101,043 | ||||||||
6,000,000 | CenturyLink, Inc. 6.0000%, 4/1/17† | 6,255,000 | ||||||||
7,567,000 | CenturyLink, Inc. 5.1500%, 6/15/17† | 7,850,762 | ||||||||
12,000,000 | DIRECTV Holdings LLC / DIRECTV Financing Co., Inc. 3.1250%, 2/15/16† | 12,142,200 | ||||||||
9,757,000 | DIRECTV Holdings LLC / DIRECTV Financing Co., Inc. 3.5000%, 3/1/16† | 9,909,004 | ||||||||
42,479,000 | DISH DBS Corp. 7.1250%, 2/1/16† | 43,594,074 | ||||||||
268,000 | Embarq Corp. 7.0820%, 6/1/16 | 278,701 | ||||||||
1,175,000 | Historic TW, Inc. 8.0500%, 1/15/16 | 1,218,200 | ||||||||
4,906,000 | PCCW-HKT Capital No 4, Ltd. 4.2500%, 2/24/16† | 4,996,663 | ||||||||
1,088,000 | Qwest Corp. 6.5000%, 6/1/17† | 1,176,303 | ||||||||
3,189,000 | TEGNA, Inc. 6.3750%, 9/1/15† | 3,206,938 | ||||||||
3,720,000 | Verizon Communications, Inc. 2.5000%, 9/15/16† | 3,780,361 | ||||||||
97,509,249 | ||||||||||
Consumer Cyclical – 10.7% | ||||||||||
26,233,000 | Amazon.com, Inc. 0.6500%, 11/27/15† | 26,233,839 | ||||||||
5,081,000 | Carnival Corp. 1.2000%, 2/5/16† | 5,087,372 | ||||||||
3,468,000 | Dillard’s, Inc. 6.6250%, 1/15/18† | 3,801,795 | ||||||||
3,768,000 | Dillard’s, Inc. 7.1300%, 8/1/18† | 4,248,420 | ||||||||
1,267,000 | DR Horton, Inc. 4.7500%, 5/15/17† | 1,314,513 | ||||||||
14,887,000 | Ford Motor Credit Co. LLC 5.6250%, 9/15/15† | 15,022,159 | ||||||||
25,990,000 | Ford Motor Credit Co. LLC 2.5000%, 1/15/16† | 26,199,999 | ||||||||
6,325,000 | Ford Motor Credit Co. LLC 4.2070%, 4/15/16† | 6,468,805 | ||||||||
4,000,000 | Ford Motor Credit Co. LLC 3.9840%, 6/15/16† | 4,093,492 | ||||||||
1,425,000 | Ford Motor Credit Co. LLC 8.0000%, 12/15/16† | 1,552,408 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Consumer Cyclical – (continued) | ||||||||||
$ | 3,361,000 | Ford Motor Credit Co. LLC 1.4610%, 3/27/17† | $ | 3,345,973 | ||||||
15,291,000 | General Motors Financial Co., Inc. 2.7500%, 5/15/16† | 15,473,697 | ||||||||
1,267,000 | Lennar Corp. 4.7500%, 12/15/17† | 1,317,680 | ||||||||
3,498,000 | Lennar Corp. 4.5000%, 11/15/19† | 3,541,725 | ||||||||
27,706,000 | MGM Resorts International 6.6250%, 7/15/15† | 27,701,844 | ||||||||
1,382,000 | MGM Resorts International 6.8750%, 4/1/16† | 1,426,915 | ||||||||
850,000 | MGM Resorts International 7.5000%, 6/1/16† | 886,125 | ||||||||
1,000,000 | MGM Resorts International 10.0000%, 11/1/16† | 1,090,000 | ||||||||
2,000,000 | Service Corp. International 6.7500%, 4/1/16† | 2,060,000 | ||||||||
1,641,000 | Western Union Co. 2.3750%, 12/10/15† | 1,650,782 | ||||||||
2,650,000 | Wyndham Worldwide Corp. 2.9500%, 3/1/17† | 2,690,004 | ||||||||
155,207,547 | ||||||||||
Consumer Non-Cyclical – 3.3% | ||||||||||
6,912,000 | Becton Dickinson and Co. 0.7359%, 6/15/16†,‡ | 6,915,193 | ||||||||
2,074,000 | ConAgra Foods, Inc. 1.3000%, 1/25/16† | 2,074,290 | ||||||||
8,114,000 | Constellation Brands, Inc. 7.2500%, 9/1/16† | 8,580,555 | ||||||||
1,267,000 | Constellation Brands, Inc. 7.2500%, 5/15/17† | 1,381,062 | ||||||||
1,283,000 | Fresenius Medical Care US Finance, Inc. 6.8750%, 7/15/17† | 1,388,848 | ||||||||
692,000 | Fresenius US Finance II, Inc. 9.0000%, 7/15/15 (144A),† | 693,107 | ||||||||
3,000,000 | Quest Diagnostics, Inc. 3.2000%, 4/1/16† | 3,051,027 | ||||||||
4,062,000 | Reynolds American, Inc. 1.0500%, 10/30/15† | 4,048,067 | ||||||||
4,515,000 | RJ Reynolds Tobacco Co. 3.5000%, 8/4/16† | 4,616,299 | ||||||||
4,000,000 | Safeway, Inc. 3.4000%, 12/1/16† | 4,001,200 | ||||||||
4,133,000 | Safeway, Inc. 6.3500%, 8/15/17† | 4,360,315 | ||||||||
6,285,000 | Zoetis, Inc. 1.1500%, 2/1/16† | 6,286,383 | ||||||||
47,396,346 | ||||||||||
Electric – 2.5% | ||||||||||
673,000 | Duquesne Light Holdings, Inc. 5.5000%, 8/15/15† | 676,179 | ||||||||
5,522,000 | Entergy Corp. 3.6250%, 9/15/15† | 5,543,536 | ||||||||
5,883,000 | LG&E and KU Energy LLC 2.1250%, 11/15/15† | 5,904,755 | ||||||||
6,820,000 | PPL WEM, Ltd. / Western Power Distribution, Ltd. 3.9000%, 5/1/16 (144A),† | 6,956,448 | ||||||||
3,225,000 | PSEG Power LLC 5.5000%, 12/1/15† | 3,285,914 | ||||||||
3,835,000 | Talen Energy Supply LLC 5.7000%, 10/15/15† | 3,835,000 | ||||||||
4,000,000 | Talen Energy Supply LLC 6.5000%, 5/1/18† | 4,280,000 | ||||||||
5,382,000 | TECO Finance, Inc. 4.0000%, 3/15/16† | 5,496,588 | ||||||||
35,978,420 | ||||||||||
Energy – 11.0% | ||||||||||
1,424,000 | Anadarko Petroleum Corp. 5.9500%, 9/15/16† | 1,502,198 | ||||||||
6,437,000 | Chesapeake Energy Corp. 3.2500%, 3/15/16† | 6,412,861 | ||||||||
1,055,000 | DCP Midstream Operating LP 2.5000%, 12/1/17† | 1,021,139 | ||||||||
4,515,000 | Enterprise Products Operating LLC 1.2500%, 8/13/15† | 4,517,127 | ||||||||
17,378,000 | Gazprom OAO Via Gaz Capital SA 4.3000%, 11/12/15 (144A),† | 17,477,819 | ||||||||
20,732,000 | Gazprom OAO Via Gaz Capital SA 5.0920%, 11/29/15 (144A),† | 20,939,320 | ||||||||
5,378,000 | Gazprom OAO Via Gaz Capital SA 4.9500%, 5/23/16 (144A) | 5,458,670 | ||||||||
6,630,000 | Kinder Morgan Energy Partners LP 3.5000%, 3/1/16† | 6,725,525 | ||||||||
20,462,000 | Kinder Morgan Finance Co. LLC 5.7000%, 1/5/16† | 20,914,824 | ||||||||
4,000,000 | Lukoil International Finance BV 6.3560%, 6/7/17 (144A),† | 4,176,000 | ||||||||
5,069,000 | Marathon Oil Corp. 0.9000%, 11/1/15† | 5,067,738 | ||||||||
11,505,000 | Marathon Petroleum Corp. 3.5000%, 3/1/16† | 11,699,262 | ||||||||
7,346,000 | ONEOK Partners LP 3.2500%, 2/1/16† | 7,415,324 | ||||||||
3,044,000 | Pioneer Natural Resources Co. 5.8750%, 7/15/16† | 3,181,190 | ||||||||
1,500,000 | Pioneer Natural Resources Co. 6.6500%, 3/15/17† | 1,622,140 | ||||||||
13,500,000 | Sabine Pass LNG LP 7.5000%, 11/30/16† | 14,208,885 | ||||||||
2,472,000 | Spectra Energy Partners LP 2.9500%, 6/15/16† | 2,506,717 | ||||||||
1,424,000 | Tennessee Gas Pipeline Co. LLC 8.0000%, 2/1/16† | 1,477,500 | ||||||||
4,000,000 | Tennessee Gas Pipeline Co. LLC 7.5000%, 4/1/17† | 4,368,196 | ||||||||
4,722,000 | Transocean, Inc. 4.9500%, 11/15/15† | 4,786,927 | ||||||||
14,429,000 | Transocean, Inc. 5.5500%, 12/15/16† | 14,933,582 | ||||||||
160,412,944 | ||||||||||
Finance Companies – 5.0% | ||||||||||
4,186,000 | Air Lease Corp. 4.5000%, 1/15/16† | 4,246,174 | ||||||||
1,283,000 | Aircastle, Ltd. 6.7500%, 4/15/17† | 1,366,395 | ||||||||
7,085,000 | Aviation Capital Group Corp. 3.8750%, 9/27/16 (144A),† | 7,210,348 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Janus Global Unconstrained Bond Fund(1)
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Finance Companies – (continued) | ||||||||||
$ | 8,702,000 | CIT Group, Inc. 5.0000%, 5/15/17† | $ | 8,973,502 | ||||||
7,058,000 | CIT Group, Inc. 4.2500%, 8/15/17† | 7,163,870 | ||||||||
1,424,000 | GATX Corp. 3.5000%, 7/15/16† | 1,453,854 | ||||||||
36,898,000 | International Lease Finance Corp. 8.6250%, 9/15/15† | 37,359,225 | ||||||||
2,594,000 | International Lease Finance Corp. 5.7500%, 5/15/16† | 2,658,850 | ||||||||
868,000 | iStar Financial, Inc. 3.8750%, 7/1/16† | 871,212 | ||||||||
1,261,000 | Navient Corp. 3.8750%, 9/10/15† | 1,262,576 | ||||||||
72,566,006 | ||||||||||
Financial – 0.3% | ||||||||||
4,000,000 | Icahn Enterprises LP / Icahn Enterprises Finance Corp. 3.5000%, 3/15/17† | 4,025,000 | ||||||||
Government Sponsored – 2.2% | ||||||||||
9,561,000 | Eksportfinans ASA 2.0000%, 9/15/15† | 9,565,780 | ||||||||
10,880,000 | Eksportfinans ASA 2.3750%, 5/25/16† | 10,880,000 | ||||||||
6,759,000 | Eksportfinans ASA 5.5000%, 5/25/16† | 6,953,321 | ||||||||
4,050,000 | Eksportfinans ASA 5.5000%, 6/26/17† | 4,291,745 | ||||||||
31,690,846 | ||||||||||
Industrial – 0.5% | ||||||||||
6,976,000 | Noble Group, Ltd. 4.8750%, 8/5/15 (144A),† | 6,941,120 | ||||||||
Insurance – 0.7% | ||||||||||
2,967,000 | American International Group, Inc. 5.0500%, 10/1/15† | 2,996,973 | ||||||||
6,000,000 | Kemper Corp. 6.0000%, 5/15/17† | 6,397,692 | ||||||||
234,000 | Prudential Financial, Inc. 4.7500%, 9/17/15† | 235,810 | ||||||||
9,630,475 | ||||||||||
Natural Gas – 0.1% | ||||||||||
1,827,000 | Sempra Energy 6.5000%, 6/1/16† | 1,914,088 | ||||||||
Owned No Guarantee – 6.0% | ||||||||||
46,023,000 | Petrobras Global Finance BV 3.8750%, 1/27/16† | 46,219,518 | ||||||||
18,637,000 | Petrobras Global Finance BV 2.0000%, 5/20/16† | 18,416,524 | ||||||||
9,350,000 | Petrobras Global Finance BV 6.1250%, 10/6/16† | 9,607,125 | ||||||||
5,615,000 | Petrobras Global Finance BV 3.5000%, 2/6/17† | 5,554,527 | ||||||||
2,073,000 | Petrobras Global Finance BV 3.2500%, 3/17/17† | 2,044,206 | ||||||||
6,000,000 | Sberbank of Russia Via SB Capital SA 5.4990%, 7/7/15† | 6,000,000 | ||||||||
87,841,900 | ||||||||||
Real Estate Investment Trusts (REITs) – 0.9% | ||||||||||
3,743,000 | HCP, Inc. 3.7500%, 2/1/16† | 3,791,730 | ||||||||
3,153,000 | Kimco Realty Corp. 5.5840%, 11/23/15† | 3,206,693 | ||||||||
6,000,000 | Realty Income Corp. 5.5000%, 11/15/15† | 6,093,672 | ||||||||
13,092,095 | ||||||||||
Technology – 2.3% | ||||||||||
772,000 | Avnet, Inc. 6.0000%, 9/1/15† | 777,848 | ||||||||
2,859,000 | Dell, Inc. 2.3000%, 9/10/15† | 2,859,000 | ||||||||
1,806,000 | Hewlett-Packard Co. 2.1250%, 9/13/15† | 1,811,974 | ||||||||
5,615,000 | Hewlett-Packard Co. 2.2000%, 12/1/15† | 5,645,209 | ||||||||
5,413,000 | Hewlett-Packard Co. 2.6500%, 6/1/16† | 5,481,057 | ||||||||
8,748,000 | Hewlett-Packard Co. 3.0000%, 9/15/16† | 8,925,707 | ||||||||
1,425,000 | Hewlett-Packard Co. 3.3000%, 12/9/16† | 1,462,727 | ||||||||
889,000 | Juniper Networks, Inc. 3.1000%, 3/15/16† | 901,875 | ||||||||
4,841,000 | Pitney Bowes, Inc. 4.7500%, 1/15/16† | 4,928,816 | ||||||||
32,794,213 | ||||||||||
Transportation – 0.7% | ||||||||||
10,139,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 2.5000%, 3/15/16 (144A),† | 10,209,882 | ||||||||
Total Corporate Bonds (cost $1,063,488,796) | 1,062,692,171 | |||||||||
Foreign Government Bonds – 0.4% | ||||||||||
6,729,000 | Banco Nacional de Desenvolvimento Economico e Social 3.3750%, 9/26/16 (144A) (cost $6,796,290) | 6,779,468 | ||||||||
Inflation-Indexed Bonds – 3.6% | ||||||||||
MXN | 713,208,549 | Mexican Udibonos 4.5000%, 12/4/25† (cost $52,951,317) | 51,812,183 | |||||||
Short-Term Taxable Variable Rate Demand Notes – 0.5% | ||||||||||
5,395,000 | Chicago Board of Education 6.0380%, 12/1/29† | 4,742,421 | ||||||||
1,450,000 | Chicago Board of Education 6.1380%, 12/1/39† | 1,242,374 | ||||||||
915,000 | Chicago Board of Education 6.5190%, 12/1/40† | 801,421 | ||||||||
Total Short-Term Taxable Variable Rate Demand Notes (cost $6,597,821) | 6,786,216 | |||||||||
Investment Companies – 3.2% | ||||||||||
Closed-End Funds – 0.6% | ||||||||||
458,944 | BlackRock Build America Bond Trust† | 9,119,217 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
12 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Exchange-Traded Funds (ETFs) – 0.2% | ||||||||||
6,873 | iShares US Preferred Stock | $ | 269,215 | |||||||
90,000 | PowerShares Build America Bond Portfolio† | 2,590,200 | ||||||||
2,859,415 | ||||||||||
Money Markets – 2.4% | ||||||||||
34,178,000 | Janus Cash Liquidity Fund LLC, 0.1291%°°,£ | 34,178,000 | ||||||||
Total Investment Companies (cost $47,111,623) | 46,156,632 | |||||||||
Total Investments (total cost $1,465,520,487) – 100.7% | 1,461,136,828 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.7)% | (10,646,202) | |||||||||
Net Assets – 100% | $ | 1,450,490,626 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States | $ | 1,146,815,189 | 78 | .5% | ||||
Brazil | 88,621,368 | 6 | .1 | |||||
United Kingdom | 54,305,262 | 3 | .7 | |||||
Russia | 54,051,809 | 3 | .7 | |||||
Mexico | 51,812,183 | 3 | .5 | |||||
Norway | 31,690,846 | 2 | .2 | |||||
Hong Kong | 11,937,783 | 0 | .8 | |||||
Luxembourg | 7,130,816 | 0 | .5 | |||||
Germany | 5,518,905 | 0 | .4 | |||||
Japan | 4,772,726 | 0 | .3 | |||||
China | 3,020,439 | 0 | .2 | |||||
Spain | 1,459,502 | 0 | .1 | |||||
Total | $ | 1,461,136,828 | 100 | .0% | ||||
Schedule of Forward Currency Contracts, Open
Unrealized | ||||||||||||
Currency | Currency | Appreciation/ | ||||||||||
Counterparty/Currency and Settlement Date | Units Sold | Value | (Depreciation) | |||||||||
JPMorgan Chase & Co.: Mexican Peso 7/30/15 | 812,862,000 | $ | 51,611,269 | $ | 222,644 | |||||||
Schedule of Futures – Short
Unrealized | ||||
Appreciation/ | ||||
Description | (Depreciation) | |||
S&P 500® E-mini expires September 2015 3,172 contracts principal amount $328,429,387 value $325,827,840 | $ | 2,601,547 | ||
Schedule of Exchange-Traded Written Options – Calls
Description | Value | ||
S&P 500® E-mini Future expires July 2015 346 contracts exercise price $2,190.00 | $ | (3,460) | |
S&P 500® E-mini Future expires August 2015 4,496 contracts exercise price $2,180.00 | (539,520) | ||
S&P 500® E-mini Future expires August 2015 4,296 contracts exercise price $2,190.00 | (365,160) | ||
S&P 500® E-mini Future expires August 2015 2,775 contracts exercise price $2,200.00 | (166,500) | ||
U.S. Treasury Long Bond Future expires August 2015 1,477 contracts exercise price $155.00 | (2,353,969) | ||
U.S. Treasury Long Bond Future expires August 2015 1,236 contracts exercise price $156.00 | (1,641,562) | ||
U.S. Treasury Long Bond Future expires August 2015 1,388 contracts exercise price $158.00 | (1,279,562) | ||
Total Exchange-Traded Written Options – Calls (premiums received $12,927,658) | $ | (6,349,733) | |
Schedule of Exchange-Traded Written Options – Calls with Variation Margin
Unrealized | |||
Appreciation/ | |||
Description | (Depreciation) | ||
Euro-Bund Future expires August 2015 3,166 contracts exercise price EUR 156.00 | $ | 216,970 | |
Euro-Bund Future expires August 2015 1,944 contracts exercise price EUR 157.00 | 313,880 | ||
Total Exchange-Traded Written Options – Calls with Variation Margin | $ | 530,850 | |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Janus Global Unconstrained Bond Fund(1)
Schedule of Investments
As of June 30, 2015
Schedule of Exchange-Traded Written Options – Puts
Description | Value | ||
10-Year U.S. Treasury Note Future expires August 2015 7,983 contracts exercise price $124.00 | $ | (3,243,094) | |
S&P 500® E-mini Future expires July 2015 1,388 contracts exercise price $1960.00 | (607,250) | ||
S&P 500® E-mini Future expires July 2015 4,991 contracts exercise price $1970.00 | (2,557,888) | ||
S&P 500® E-mini Future expires July 2015 2,219 contracts exercise price $1,980.00 | (1,275,925) | ||
S&P 500® E-mini Future expires July 2015 3,987 contracts exercise price $2,020.00 | (3,887,325) | ||
S&P 500® E-mini Future expires August 2015 888 contracts exercise price $1,970.00 | (1,121,100) | ||
U.S. Treasury Long Bond Future expires August 2015 885 contracts exercise price $146.00 | (1,147,734) | ||
U.S. Treasury Long Bond Future expires August 2015 440 contracts exercise price $147.00 | (701,250) | ||
U.S. Treasury Note Future expires August 2015 2,665 contracts exercise price $117.00 | (208,203) | ||
U.S. Treasury Note Future expires August 2015 1,772 contracts exercise price $118.00 | (387,625) | ||
Total Exchange-Traded Written Options – Puts (premiums received $11,581,752) | $ | (15,137,394) | |
Schedule of OTC Written Options – Calls
Counterparty/Reference Asset | Value | ||
JPMorgan Chase & Co.: | |||
EUR Currency expires August 2015 222,114,760 contracts exercise price EUR 1.17 | $ | (704,770) | |
JPY Currency expires August 2015 68,664,840 contracts exercise price JPY 127.00 | (110,001) | ||
MXN Currency expires July 2015 34,701,053 contracts exercise price MXN 15.50 | (644,156) | ||
Total OTC Written Options – Calls (premiums received $1,719,344) | $ | (1,458,927) | |
Schedule of OTC Written Options – Puts
Counterparty/Reference Asset | Value | ||
JPMorgan Chase & Co.: | |||
EUR Currency expires August 2015 111,588,202 contracts exercise price EUR 1.08 | $ | (956,088) | |
JPY Currency expires July 2015 207,343,615 contracts exercise price JPY 117.00 | (173,547) | ||
JPY Currency expires July 2015 68,736,930 contracts exercise price JPY 120.00 | (250,065) | ||
MXN Currency expires July 2015 207,958,606 contracts exercise price MXN 14.80 | (12,269) | ||
Total OTC Written Options – Puts (premiums received $1,991,982) | $ | (1,391,969) | |
Schedule of OTC Written Interest Rate Swaptions
Pay/ | |||||||||||||||||||||||||
Receive | Unrealized | Swaptions | |||||||||||||||||||||||
Floating | Floating | Fixed | Expiration | Notional | Premiums | Appreciation/ | Written, | ||||||||||||||||||
Counterparty | Description | Rate | Rate | Rate | Date | Amount | Received | (Depreciation) | at Value | ||||||||||||||||
Written Call Swaptions: | |||||||||||||||||||||||||
Citigroup Global Markets | Interest Rate Swap maturing 7/13/45 | Receive | 6-Month EURIBOR | 0.70 | % | 7/9/15 | 16,111,000 | EUR | $ | 306,133 | $ | 306,133 | $ | – | |||||||||||
Morgan Stanley | Interest Rate Swap maturing 7/15/45 | Receive | 3-Month USD LIBOR | 2.40 | 7/13/15 | 34,691,000 | USD | 1,114,448 | 1,113,550 | (898) | |||||||||||||||
Morgan Stanley | Interest Rate Swap maturing 7/9/45 | Receive | 6-Month GBP LIBOR | 1.80 | 7/9/15 | 9,375,000 | GBP | 308,709 | 308,697 | (12) | |||||||||||||||
Total | $ | 1,729,290 | $ | 1,728,380 | $ | (910) | |||||||||||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
14 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Schedule of OTC Written Credit Default Swaptions
Unrealized | Swaptions | ||||||||||||||||||||||
Reference | Buy/Sell | Fixed | Expiration | Notional | Premiums | Appreciation/ | Written, | ||||||||||||||||
Counterparty | Asset | Description | Protection | Rate | Date | Amount | Received | (Depreciation) | at Value | ||||||||||||||
Written Call Swaptions: | |||||||||||||||||||||||
Bank of America | CDX.NA.IG.24 | Credit Default Swap maturing 6/20/20 | Buy | 1.00 | % | 9/16/15 | $310,862,000 | $ | 248,691 | $ | 95,631 | $ | (153,060) | ||||||||||
Bank of America | CDX.NA.IG.24 | Credit Default Swap maturing 6/20/20 | Buy | 1.00 | 9/16/15 | 221,432,000 | 171,610 | 62,584 | (109,026) | ||||||||||||||
Bank of America | CDX.NA.IG.24 | Credit Default Swap maturing 6/20/20 | Buy | 1.00 | 9/16/15 | 221,575,000 | 204,957 | 95,860 | (109,097) | ||||||||||||||
Goldman Sachs International | CDX.NA.IG.24 | Credit Default Swap maturing 6/20/20 | Buy | 1.00 | 9/16/15 | 222,012,000 | 126,547 | 17,235 | (109,312) | ||||||||||||||
Goldman Sachs International | CDX.NA.IG.24 | Credit Default Swap maturing 6/20/20 | Buy | 1.00 | 9/16/15 | 222,115,000 | 127,716 | 18,353 | (109,363) | ||||||||||||||
Morgan Stanley | CDX.NA.IG.24 | Credit Default Swap maturing 6/20/20 | Buy | 1.00 | 9/16/15 | 222,048,000 | 118,796 | 9,466 | (109,330) | ||||||||||||||
Morgan Stanley | CDX.NA.IG.24 | Credit Default Swap maturing 6/20/20 | Buy | 1.00 | 9/16/15 | 221,432,000 | 148,359 | 39,333 | (109,026) | ||||||||||||||
$ | 1,146,676 | $ | 338,462 | $ | (808,214) | ||||||||||||||||||
Written Put Swaptions: | |||||||||||||||||||||||
Bank of America | CDX.NA.IG.24 | Credit Default Swap maturing 6/20/20 | Sell | 1.00 | % | 9/16/15 | $221,575,000 | $ | 110,788 | $ | (114,897) | $ | (225,685) | ||||||||||
Bank of America | CDX.NA.IG.24 | Credit Default Swap maturing 6/20/20 | Sell | 1.00 | 9/16/15 | 221,432,000 | 215,896 | (131,750) | (347,646) | ||||||||||||||
Bank of America | CDX.NA.IG.24 | Credit Default Swap maturing 6/20/20 | Sell | 1.00 | 9/16/15 | 310,862,000 | 285,993 | (30,635) | (316,628) | ||||||||||||||
Goldman Sachs International | CDX.NA.IG.24 | Credit Default Swap maturing 6/20/20 | Sell | 1.00 | 9/16/15 | 223,189,000 | 156,232 | 9,291 | (146,941) | ||||||||||||||
Goldman Sachs International | CDX.NA.IG.24 | Credit Default Swap maturing 6/20/20 | Sell | 1.00 | 9/16/15 | 223,189,000 | 140,609 | (6,332) | (146,941) | ||||||||||||||
Morgan Stanley | CDX.NA.IG.24 | Credit Default Swap maturing 6/20/20 | Sell | 1.00 | 9/16/15 | 221,432,000 | 150,574 | (74,966) | (225,540) | ||||||||||||||
Morgan Stanley | CDX.NA.IG.24 | Credit Default Swap maturing 6/20/20 | Sell | 1.00 | 9/16/15 | 222,048,000 | 217,607 | (8,560) | (226,167) | ||||||||||||||
Morgan Stanley | CDX.NA.IG.24 | Credit Default Swap maturing 6/20/20 | Sell | 1.00 | 9/16/15 | 222,048,000 | 139,889 | (86,278) | (226,167) | ||||||||||||||
$ | 1,417,588 | $ | (444,127) | $ | (1,861,715) | ||||||||||||||||||
Total | $ | 2,564,264 | $ | (105,665) | $ | (2,669,929) | |||||||||||||||||
Centrally Cleared Interest Rate Swaps outstanding at June 30, 2015
Variation | |||||||||||||||||||||||
Premiums | Unrealized | Margin | |||||||||||||||||||||
Pay/Receive | Floating | Fixed | Maturity | Notional | Paid/ | Appreciation/ | Asset/ | ||||||||||||||||
Floating Rate | Rate | Rate | Date | Amount | (Received) | (Depreciation) | (Liability) | ||||||||||||||||
Pay | Mexico Interbank TIIE 28 Days | 7.4000 | % | 5/14/25 | 530,523,000 | MXN | $ | 755 | $ | (294,878) | $ | 58,287 | |||||||||||
Pay | Mexico Interbank TIIE 28 Days | 7.4020 | 5/20/25 | 534,523,000 | MXN | 751 | (297,957) | 58,857 | |||||||||||||||
Pay | Mexico Interbank TIIE 28 Days | 7.5500 | 5/21/25 | 532,767,000 | MXN | 746 | (120,169) | 60,332 | |||||||||||||||
Pay | Mexico Interbank TIIE 28 Days | 7.8750 | 5/29/25 | 530,779,000 | MXN | 750 | 263,128 | 63,765 | |||||||||||||||
Pay | Mexico Interbank TIIE 28 Days | 7.7750 | 5/30/25 | 687,348,000 | MXN | 749 | 185,830 | 81,173 | |||||||||||||||
Pay | Mexico Interbank TIIE 28 Days | 7.8250 | 5/30/25 | 690,026,000 | MXN | 749 | 264,046 | 82,197 | |||||||||||||||
Receive | 6-Month EURIBOR | 0.7190 | 4/21/25 | 34,693,000 | EUR | 753 | 1,986,405 | (66,572) | |||||||||||||||
Receive | 6-Month EURIBOR | 2.0125 | 6/11/25 | 37,081,000 | EUR | 752 | (361,040) | (42,285) | |||||||||||||||
Receive | 6-Month EURIBOR | 2.0150 | 6/12/25 | 30,213,000 | EUR | 756 | (297,430) | (63,909) | |||||||||||||||
Receive | 6-Month EURIBOR | 1.8875 | 6/15/25 | 39,723,000 | EUR | 754 | (119,937) | (83,194) | |||||||||||||||
Receive | 6-Month EURIBOR | 1.9220 | 6/15/25 | 39,723,000 | EUR | 756 | (192,310) | (83,428) | |||||||||||||||
Receive | 6-Month EURIBOR | 1.8900 | 6/16/25 | 39,728,000 | EUR | 751 | (124,386) | (83,182) | |||||||||||||||
Total | $ | 9,022 | $ | 891,302 | $ | (17,959) | |||||||||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Janus Global Unconstrained Bond Fund(1)
Schedule of Investments
As of June 30, 2015
OTC Interest Rate Swaps outstanding at June 30, 2015
Outstanding | |||||||||||||||||||||||
Unrealized | Swap Contracts, | ||||||||||||||||||||||
Pay/Receive | Floating | Fixed | Maturity | Notional | Appreciation/ | at Value | |||||||||||||||||
Counterparty | Floating Rate | Rate | Rate | Date | Amount | (Depreciation) | Asset/(Liability) | ||||||||||||||||
Citigroup Global Markets | Pay | Mexico Interbank TIIE 28 Day | 7.3700 | % | 5/15/25 | 532,368,000 | MXN | $ | (331,704) | $ | (331,704) | ||||||||||||
Citigroup Global Markets | Pay | Mexico Interbank TIIE 28 Day | 7.3600 | 5/19/25 | 532,237,000 | MXN | (345,652) | (345,652) | |||||||||||||||
Goldman Sachs International | Pay | Mexico Interbank TIIE 28 Day | 7.9000 | 5/28/25 | 534,926,000 | MXN | 296,685 | 296,685 | |||||||||||||||
Goldman Sachs International | Pay | Mexico Interbank TIIE 28 Day | 7.7750 | 6/2/25 | 689,208,000 | MXN | 184,783 | 184,783 | |||||||||||||||
Goldman Sachs International | Pay | Mexico Interbank TIIE 28 Day | 7.4050 | 5/14/25 | 530,523,000 | MXN | (288,150) | (288,150) | |||||||||||||||
Goldman Sachs International | Pay | Mexico Interbank TIIE 28 Day | 7.3500 | 5/20/25 | 532,237,000 | MXN | (358,201) | (358,201) | |||||||||||||||
Total | $ | (842,239) | $ | (842,239) | |||||||||||||||||||
OTC Credit Default Swaps outstanding at June 30, 2015
Outstanding | |||||||||||||||||||||||
Premiums | Unrealized | Swap Contracts, | |||||||||||||||||||||
Reference | Buy/Sell | Fixed | Maturity | Notional | Paid/ | Appreciation/ | at Value | ||||||||||||||||
Counterparty | Asset | Protection(2) | Rate | Date | Amount(3) | (Received) | (Depreciation) | Asset/(Liability) | |||||||||||||||
Bank of America | Federative Republic of Brazil(4) | Sell | 1.0000 | % | 3/20/16 | $ | 24,613,000 | $ | 8,857 | $ | 25,744 | $ | 34,601 | ||||||||||
Barclays Capital, Inc. | Bank of America Corp.(5) | Sell | 1.0000 | 12/20/15 | 18,867,000 | 153,480 | (77,106) | 76,374 | |||||||||||||||
Barclays Capital, Inc. | Berkshire Hathaway, Inc.(5) | Sell | 1.0000 | 12/20/19 | 9,278,000 | 223,150 | (62,083) | 161,067 | |||||||||||||||
Barclays Capital, Inc. | Berkshire Hathaway, Inc.(5) | Sell | 1.0000 | 12/20/19 | 4,473,000 | 103,511 | (25,859) | 77,652 | |||||||||||||||
Barclays Capital, Inc. | Berkshire Hathaway, Inc.(5) | Sell | 1.0000 | 3/20/20 | 23,610,000 | 554,663 | (166,525) | 388,138 | |||||||||||||||
Barclays Capital, Inc. | Federative Republic of Brazil(4) | Sell | 1.0000 | 12/20/19 | 9,534,000 | (388,561) | (160,755) | (549,316) | |||||||||||||||
Barclays Capital, Inc. | Federative Republic of Brazil(4) | Sell | 1.0000 | 12/20/19 | 9,358,000 | (317,878) | (221,298) | (539,176) | |||||||||||||||
Barclays Capital, Inc. | General Electric Capital Corp.(5) | Sell | 1.0000 | 12/20/15 | 18,867,000 | 157,658 | (73,383) | 84,275 | |||||||||||||||
Barclays Capital, Inc. | General Electric Capital Corp.(5) | Sell | 1.0000 | 12/20/19 | 4,473,000 | 99,023 | 1,307 | 100,330 | |||||||||||||||
Barclays Capital, Inc. | Goldman Sachs Group, Inc.(5) | Sell | 1.0000 | 12/20/15 | 18,867,000 | 149,305 | (81,429) | 67,876 | |||||||||||||||
Barclays Capital, Inc. | Israel Electric Corp., Ltd.(4) | Sell | 1.0000 | 9/20/15 | 22,680,000 | 37,026 | (33,094) | 3,932 | |||||||||||||||
Barclays Capital, Inc. | JPMorgan Chase & Co.(5) | Sell | 1.0000 | 12/20/15 | 18,867,000 | 155,569 | (80,458) | 75,111 | |||||||||||||||
Barclays Capital, Inc. | MetLife, Inc.(5) | Sell | 1.0000 | 12/20/19 | 4,473,000 | 71,140 | 5,255 | 76,395 | |||||||||||||||
Barclays Capital, Inc. | Morgan Stanley(5) | Sell | 1.0000 | 12/20/15 | 18,867,000 | 149,305 | (77,232) | 72,073 | |||||||||||||||
Barclays Capital, Inc. | Prudential Financial, Inc.(5) | Sell | 1.0000 | 12/20/19 | 4,473,000 | 94,542 | (23,848) | 70,694 | |||||||||||||||
Barclays Capital, Inc. | Republic of Colombia(4) | Sell | 1.0000 | 3/20/16 | 28,064,000 | 110,367 | (38,340) | 72,027 | |||||||||||||||
Barclays Capital, Inc. | Republic of Colombia(4) | Sell | 1.0000 | 3/20/17 | 28,064,000 | 106,334 | (86,766) | 19,568 | |||||||||||||||
Barclays Capital, Inc. | Republic of Indonesia(4) | Sell | 1.0000 | 6/20/17 | 34,776,000 | 219,995 | (31,920) | 188,075 | |||||||||||||||
Barclays Capital, Inc. | Russian Federation(4) | Sell | 1.0000 | 12/20/15 | 8,946,000 | (98,208) | 38,151 | (60,057) | |||||||||||||||
Barclays Capital, Inc. | Russian Federation(4) | Sell | 1.0000 | 12/20/15 | 34,723,000 | (168,214) | (64,891) | (233,105) | |||||||||||||||
BNP Paribas | Federative Republic of Brazil(4) | Sell | 1.0000 | 12/20/15 | 69,924,000 | 127,595 | (56,942) | 70,653 | |||||||||||||||
BNP Paribas | Federative Republic of Brazil(4) | Sell | 1.0000 | 3/20/16 | 35,599,000 | 4,009 | 46,036 | 50,045 | |||||||||||||||
BNP Paribas | Federative Republic of Brazil(4) | Sell | 1.0000 | 3/20/16 | 17,817,000 | (38,661) | 63,708 | 25,047 | |||||||||||||||
BNP Paribas | Federative Republic of Brazil(4) | Sell | 1.0000 | 6/20/16 | 69,866,000 | 126,464 | (92,498) | 33,966 | |||||||||||||||
BNP Paribas | Federative Republic of Brazil(4) | Sell | 1.0000 | 12/20/19 | 20,000,000 | (580,692) | (571,640) | (1,152,332) | |||||||||||||||
BNP Paribas | Goldman Sachs Group, Inc.(5) | Sell | 1.0000 | 12/20/19 | 17,958,000 | 171,781 | (34,369) | 137,412 | |||||||||||||||
BNP Paribas | Goldman Sachs Group, Inc.(5) | Sell | 1.0000 | 12/20/19 | 9,278,000 | 87,710 | (16,716) | 70,994 | |||||||||||||||
BNP Paribas | People’s Republic of China(6) | Sell | 1.0000 | 6/20/18 | 34,693,000 | 576,435 | (75,447) | 500,988 | |||||||||||||||
BNP Paribas | People’s Republic of China(6) | Sell | 1.0000 | 12/20/19 | 6,710,000 | 12,672 | 50,843 | 63,515 | |||||||||||||||
BNP Paribas | People’s Republic of China(6) | Sell | 1.0000 | 12/20/19 | 10,000,000 | 76,086 | 18,571 | 94,657 | |||||||||||||||
BNP Paribas | People’s Republic of China(6) | Sell | 1.0000 | 12/20/19 | 8,946,000 | 93,688 | (9,007) | 84,681 | |||||||||||||||
BNP Paribas | People’s Republic of China(6) | Sell | 1.0000 | 12/20/19 | 8,427,000 | 59,803 | 19,965 | 79,768 | |||||||||||||||
BNP Paribas | People’s Republic of China(6) | Sell | 1.0000 | 12/20/19 | 4,126,000 | 12,117 | 26,939 | 39,056 | |||||||||||||||
BNP Paribas | Republic of Indonesia(4) | Sell | 1.0000 | 12/20/19 | 8,427,000 | (212,454) | 42,648 | (169,806) | |||||||||||||||
BNP Paribas | Republic of Indonesia(4) | Sell | 1.0000 | 12/20/19 | 8,946,000 | (169,866) | (10,398) | (180,264) | |||||||||||||||
BNP Paribas | Russian Federation(4) | Sell | 1.0000 | 12/20/15 | 8,645,000 | (113,036) | 55,000 | (58,036) | |||||||||||||||
BNP Paribas | United Mexican States(4) | Sell | 1.0000 | 6/20/16 | 34,962,000 | 198,051 | (27,015) | 171,036 | |||||||||||||||
BNP Paribas | United Mexican States(4) | Sell | 1.0000 | 6/20/17 | 34,933,000 | 240,262 | (57,205) | 183,057 | |||||||||||||||
BNP Paribas | United Mexican States(4) | Sell | 1.0000 | 12/20/19 | 9,600,000 | 80,599 | (149,774) | (69,175) | |||||||||||||||
BNP Paribas | United Mexican States(4) | Sell | 1.0000 | 12/20/19 | 10,000,000 | 66,555 | (138,612) | (72,057) | |||||||||||||||
BNP Paribas | United Mexican States(4) | Sell | 1.0000 | 12/20/19 | 8,946,000 | 98,730 | (163,192) | (64,462) | |||||||||||||||
BNP Paribas | United Mexican States(4) | Sell | 1.0000 | 12/20/19 | 9,386,000 | 77,709 | (145,342) | (67,633) | |||||||||||||||
BNP Paribas | United Mexican States(4) | Sell | 1.0000 | 3/20/20 | 17,484,000 | (270,880) | 99,182 | (171,698) |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
16 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Outstanding | |||||||||||||||||||||||
Premiums | Unrealized | Swap Contracts, | |||||||||||||||||||||
Reference | Buy/Sell | Fixed | Maturity | Notional | Paid/ | Appreciation/ | at Value | ||||||||||||||||
Counterparty | Asset | Protection(2) | Rate | Date | Amount(3) | (Received) | (Depreciation) | Asset/(Liability) | |||||||||||||||
Citigroup Global Markets | Bank of America Corp.(5) | Sell | 1.0000 | % | 3/20/16 | $ | 17,509,000 | $ | 151,604 | $ | (45,912) | $ | 105,692 | ||||||||||
Citigroup Global Markets | Berkshire Hathaway, Inc.(5) | Sell | 1.0000 | 12/20/19 | 9,386,000 | 220,746 | (57,804) | 162,942 | |||||||||||||||
Citigroup Global Markets | Berkshire Hathaway, Inc.(5) | Sell | 1.0000 | 12/20/19 | 8,427,000 | 175,255 | (28,962) | 146,293 | |||||||||||||||
Citigroup Global Markets | Berkshire Hathaway, Inc.(5) | Sell | 1.0000 | 3/20/20 | 10,790,000 | 253,487 | (76,104) | 177,383 | |||||||||||||||
Citigroup Global Markets | Federative Republic of Brazil(4) | Sell | 1.0000 | 12/20/19 | 9,386,000 | (306,467) | (234,323) | (540,790) | |||||||||||||||
Citigroup Global Markets | General Electric Capital Corp.(5) | Sell | 1.0000 | 12/20/19 | 8,662,000 | 184,427 | 9,864 | 194,291 | |||||||||||||||
Citigroup Global Markets | General Electric Capital Corp.(5) | Sell | 1.0000 | 12/20/19 | 8,426,000 | 177,357 | 11,640 | 188,997 | |||||||||||||||
Citigroup Global Markets | JPMorgan Chase & Co.(5) | Sell | 1.0000 | 12/20/15 | 5,000,000 | 48,889 | (28,984) | 19,905 | |||||||||||||||
Citigroup Global Markets | JPMorgan Chase & Co.(5) | Sell | 1.0000 | 3/20/16 | 17,509,000 | 146,711 | (42,809) | 103,902 | |||||||||||||||
Citigroup Global Markets | MCDX.NA.23(7) | Sell | 1.0000 | 12/20/19 | 9,278,000 | 103,465 | (77,887) | 25,578 | |||||||||||||||
Citigroup Global Markets | MCDX.NA.24(7) | Sell | 1.0000 | 6/20/20 | 17,362,000 | 40,242 | (41,027) | (785) | |||||||||||||||
Citigroup Global Markets | People’s Republic of China(6) | Sell | 1.0000 | 12/20/19 | 8,731,000 | 74,666 | 7,979 | 82,645 | |||||||||||||||
Citigroup Global Markets | Prudential Financial, Inc.(5) | Sell | 1.0000 | 12/20/19 | 5,000,000 | 96,685 | (17,662) | 79,023 | |||||||||||||||
Citigroup Global Markets | Republic of Colombia(4) | Sell | 1.0000 | 12/20/19 | 19,068,000 | (20,672) | (408,292) | (428,964) | |||||||||||||||
Citigroup Global Markets | Republic of Colombia(4) | Sell | 1.0000 | 12/20/19 | 17,246,000 | (244,028) | (143,947) | (387,975) | |||||||||||||||
Citigroup Global Markets | Republic of Indonesia(4) | Sell | 1.0000 | 12/20/19 | 6,723,000 | (209,899) | 74,429 | (135,470) | |||||||||||||||
Citigroup Global Markets | Russian Federation(4) | Sell | 1.0000 | 12/20/15 | 6,577,000 | (88,163) | 44,010 | (44,153) | |||||||||||||||
Citigroup Global Markets | United Mexican States(4) | Sell | 1.0000 | 3/20/16 | 18,266,000 | 119,330 | (42,908) | 76,422 | |||||||||||||||
Citigroup Global Markets | United Mexican States(4) | Sell | 1.0000 | 3/20/16 | 35,189,000 | 213,269 | (66,045) | 147,224 | |||||||||||||||
Citigroup Global Markets | United Mexican States(4) | Sell | 1.0000 | 3/20/16 | 17,597,000 | 106,650 | (33,027) | 73,623 | |||||||||||||||
Credit Suisse International | Berkshire Hathaway, Inc.(5) | Sell | 1.0000 | 6/20/20 | 17,347,000 | 381,245 | (112,013) | 269,232 | |||||||||||||||
Credit Suisse International | Federative Republic of Brazil(4) | Sell | 1.0000 | 3/20/16 | 12,210,000 | 4,394 | 12,771 | 17,165 | |||||||||||||||
Credit Suisse International | United Mexican States(4) | Sell | 1.0000 | 3/20/16 | 18,557,000 | 129,679 | (52,040) | 77,639 | |||||||||||||||
Credit Suisse International | United Mexican States(4) | Sell | 1.0000 | 3/20/16 | 18,553,000 | 116,697 | (39,074) | 77,623 | |||||||||||||||
Goldman Sachs International | Berkshire Hathaway, Inc.(5) | Sell | 1.0000 | 12/20/19 | 13,348,000 | 294,129 | (62,407) | 231,722 | |||||||||||||||
Goldman Sachs International | Berkshire Hathaway, Inc.(5) | Sell | 1.0000 | 3/20/20 | 17,414,000 | 354,838 | (68,560) | 286,278 | |||||||||||||||
Goldman Sachs International | Berkshire Hathaway, Inc.(5) | Sell | 1.0000 | 3/20/20 | 17,509,000 | 367,030 | (79,190) | 287,840 | |||||||||||||||
Goldman Sachs International | Berkshire Hathaway, Inc.(5) | Sell | 1.0000 | 3/20/20 | 17,509,000 | 375,724 | (87,884) | 287,840 | |||||||||||||||
Goldman Sachs International | Kingdom of Spain(8) | Sell | 1.0000 | 3/20/17 | 34,827,000 | 373,699 | (159,089) | 214,610 | |||||||||||||||
Goldman Sachs International | MCDX.NA.23(7) | Sell | 1.0000 | 12/20/19 | 10,000,000 | 81,754 | (54,186) | 27,568 | |||||||||||||||
Goldman Sachs International | MetLife, Inc.(5) | Sell | 1.0000 | 12/20/19 | 13,348,000 | 222,783 | 5,189 | 227,972 | |||||||||||||||
Goldman Sachs International | MetLife, Inc.(5) | Sell | 1.0000 | 12/20/19 | 20,000,000 | 285,562 | 56,021 | 341,583 | |||||||||||||||
Goldman Sachs International | MetLife, Inc.(5) | Sell | 1.0000 | 3/20/20 | 17,414,000 | 218,200 | 55,556 | 273,756 | |||||||||||||||
Goldman Sachs International | People’s Republic of China(6) | Sell | 1.0000 | 12/20/19 | 13,419,000 | 18,998 | 108,023 | 127,021 | |||||||||||||||
Goldman Sachs International | People’s Republic of China(6) | Sell | 1.0000 | 12/20/19 | 6,577,000 | 59,640 | 2,616 | 62,256 | |||||||||||||||
Goldman Sachs International | Petroleo Brasileiro SA Petrobras(4) | Sell | 1.0000 | 3/20/16 | 7,032,000 | (324,941) | 268,585 | (56,356) | |||||||||||||||
Goldman Sachs International | Republic of Colombia(4) | Sell | 1.0000 | 12/20/19 | 14,284,000 | 3,434 | (324,774) | (321,340) | |||||||||||||||
Goldman Sachs International | Republic of Italy(9) | Sell | 1.0000 | 3/20/17 | 34,827,000 | 359,201 | (223,659) | 135,542 | |||||||||||||||
Goldman Sachs International | United Mexican States(4) | Sell | 1.0000 | 6/20/16 | 34,450,000 | 202,637 | (34,106) | 168,531 | |||||||||||||||
Goldman Sachs International | United Mexican States(4) | Sell | 1.0000 | 6/20/17 | 34,500,000 | 237,284 | (56,496) | 180,788 | |||||||||||||||
Goldman Sachs International | United Mexican States(4) | Sell | 1.0000 | 12/20/19 | 6,577,000 | 45,378 | (92,770) | (47,392) | |||||||||||||||
Goldman Sachs International | United Mexican States(4) | Sell | 1.0000 | 3/20/20 | 17,357,000 | (268,912) | 98,461 | (170,451) | |||||||||||||||
JPMorgan Chase & Co. | Berkshire Hathaway, Inc.(5) | Sell | 1.0000 | 12/20/19 | 17,904,000 | 451,668 | (140,853) | 310,815 | |||||||||||||||
JPMorgan Chase & Co. | Federative Republic of Brazil(4) | Sell | 1.0000 | 3/20/16 | 35,633,000 | (98,756) | 148,849 | 50,093 | |||||||||||||||
JPMorgan Chase & Co. | Federative Republic of Brazil(4) | Sell | 1.0000 | 3/20/16 | 17,817,000 | (53,665) | 78,712 | 25,047 | |||||||||||||||
JPMorgan Chase & Co. | Federative Republic of Brazil(4) | Sell | 1.0000 | 3/20/16 | 37,106,000 | (49,122) | 101,286 | 52,164 | |||||||||||||||
JPMorgan Chase & Co. | MetLife, Inc.(5) | Sell | 1.0000 | 12/20/19 | 5,000,000 | 91,649 | (6,253) | 85,396 | |||||||||||||||
JPMorgan Chase & Co. | People’s Republic of China(6) | Sell | 1.0000 | 12/20/19 | 13,419,000 | 31,690 | 95,331 | 127,021 | |||||||||||||||
JPMorgan Chase & Co. | United Mexican States(4) | Sell | 1.0000 | 3/20/16 | 35,633,000 | 211,623 | (62,541) | 149,082 | |||||||||||||||
JPMorgan Chase & Co. | United Mexican States(4) | Sell | 1.0000 | 6/20/16 | 34,943,000 | 205,537 | (34,594) | 170,943 | |||||||||||||||
JPMorgan Chase & Co. | United Mexican States(4) | Sell | 1.0000 | 12/20/19 | 8,731,000 | 73,028 | (135,941) | (62,913) | |||||||||||||||
Morgan Stanley | Berkshire Hathaway, Inc.(5) | Sell | 1.0000 | 3/20/20 | 17,509,000 | 358,344 | (70,504) | 287,840 | |||||||||||||||
Total | $ | 8,149,744 | $ | (4,423,100) | $ | 3,726,644 | |||||||||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Janus Global Unconstrained Bond Fund(1)
Schedule of Investments
As of June 30, 2015
(1) | Formerly named Janus Unconstrained Bond Fund. | |
(2) | If a credit event occurs, the seller of protection will pay a net settlement amount equal to the notional amount of the swap less the recovery value of the reference asset from related offsetting purchase protection. | |
(3) | If a credit event occurs, the notional amount represents the maximum potential amount the Fund could be required to make as a seller of credit protection or receive as a buyer of credit protection. | |
(4) | Foreign Government Bond – S&P Rating BBB+ to BBB- | |
(5) | Corporate Bond – S&P Rating AA+ to A- | |
(6) | Foreign Government Bond – S&P Rating AA- | |
(7) | For those index credit default swaps entered into by the Fund to sell protection, “Outstanding Swap Contracts, at Value” serves as an indicator of the current status of payment and performance risk and represents the likelihood of an expected gain or loss should the notional amount of the swap be closed or sold at period end. Increasing market values, in absolute terms when compared to the notional amount of the swap, represent a deterioration of the reference asset’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the swap agreement. | |
(8) | Foreign Corporate Bond – S&P Rating BBB | |
(9) | Foreign Government Bond – S&P Not Rated |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
18 | JUNE 30, 2015
Table of Contents
Notes to Schedule of Investments and Other Information
London Interbank Offered Rate (LIBOR) | A daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the London wholesale money market (or interbank market). | |
S&P 500® Index | Measures broad U.S. equity performance. | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
OTC | Over-the-Counter | |
PLC | Public Limited Company |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. These securities have been determined to be liquid under guidelines established by the Board of Trustees. The total value of 144A securities as of the year ended June 30, 2015 is indicated in the table below: |
Value as a % | ||||||||||
Fund | Value | of Net Assets | ||||||||
Janus Global Unconstrained Bond Fund | $ | 119,827,634 | 8.3 | % | ||||||
† | 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 June 30, 2015, is noted below. |
Fund | Aggregate Value | ||||
Janus Global Unconstrained Bond Fund | $ | 1,318,347,278 | |||
‡ | 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 year end. | |
°° | Rate shown is the 7-day yield as of June 30, 2015. | |
§ | Schedule of Restricted and Illiquid Securities (as of June 30, 2015) |
Acquisition | Value as a | |||||||||||||
Date | Cost | Value | % of Net Assets | |||||||||||
Janus Global Unconstrained Bond Fund | ||||||||||||||
Toll Road Investors Partnership II LP 0%, 2/15/43 | 1/29/2015 | $ | 1,678,624 | $ | 1,642,236 | 0.1 | % | |||||||
The Fund has registration rights for certain restricted securities held as of June 30, 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 year ended June 30, 2015. Unless otherwise indicated, all information in the table is for the year ended June 30, 2015. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 6/30/15 | Gain/(Loss) | Income | at 6/30/15 | |||||||||||||||
Janus Global Unconstrained Bond Fund | |||||||||||||||||||||
Janus Cash Liquidity Fund LLC | 7,375,101 | 1,666,657,842 | (1,639,854,943) | 34,178,000 | $ | – | $ | 54,833 | $ | 34,178,000 | |||||||||||
Janus Investment Fund | 19
Table of Contents
Notes to Schedule of Investments and Other Information (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 June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Janus Global Unconstrained Bond Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Asset-Backed/Commercial Mortgage-Backed Securities | $ | – | $ | 138,929,610 | $ | – | |||||
Common Stocks | 147,980,548 | – | – | ||||||||
Corporate Bonds | – | 1,062,692,171 | – | ||||||||
Foreign Government Bonds | – | 6,779,468 | – | ||||||||
Inflation-Indexed Bonds | – | 51,812,183 | – | ||||||||
Short-Term Taxable Variable Rate Demand Notes | – | 6,786,216 | – | ||||||||
Investment Companies | 11,978,632 | 34,178,000 | – | ||||||||
Total Investments in Securities | $ | 159,959,180 | $ | 1,301,177,648 | $ | – | |||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 222,644 | $ | – | |||||
Outstanding Swap Contracts, at Value | – | 9,791,818 | – | ||||||||
Variation Margin Receivable | – | 404,611 | – | ||||||||
Total Assets | $ | 159,959,180 | $ | 1,311,596,721 | $ | – | |||||
Liabilities | |||||||||||
Other Financial Instruments(a): | |||||||||||
Options Written, at Value | $ | – | $ | 24,338,023 | $ | – | |||||
Outstanding Swap Contracts, at Value | – | 6,907,413 | – | ||||||||
Swaptions Written, at Value | – | 2,670,839 | – | ||||||||
Variation Margin Payable | 542,684 | 514,823 | – | ||||||||
Total Liabilities | $ | 542,684 | $ | 34,431,098 | $ | – | |||||
(a) | Other financial instruments include forward currency, futures, written options, swap contracts and swaptions. 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, swap contracts and swaptions are reported at their market value at measurement date. |
20 | JUNE 30, 2015
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Statement of Assets and Liabilities
As of June 30, 2015 | Janus Global Unconstrained Bond Fund(1) | |||
Assets: | ||||
Investments, at cost | $ | 1,465,520,487 | ||
Unaffiliated investments, at value | $ | 1,426,958,828 | ||
Affiliated investments, at value | 34,178,000 | |||
Cash | 69,935,248 | |||
Cash denominated in foreign currency(2) | 5,671,819 | |||
Restricted cash (Note 1) | 76,696,000 | |||
Forward currency contracts | 222,644 | |||
Outstanding swap contracts, at value(3) | 9,791,818 | |||
Variation margin receivable | 404,611 | |||
Non-interested Trustees’ deferred compensation | 28,948 | |||
Receivables: | ||||
Investments sold | 937,054 | |||
Fund shares sold | 2,433,604 | |||
Dividends | 134,593 | |||
Dividends from affiliates | 729 | |||
Interest | 13,875,998 | |||
Other assets | 22,301 | |||
Total Assets | 1,641,292,195 | |||
Liabilities: | ||||
Options written, at value(4) | 24,338,023 | |||
Swaptions written, at value(5) | 2,670,839 | |||
Outstanding swap contracts, at value(6) | 6,907,413 | |||
Variation margin payable | 1,057,507 | |||
Payables: | ||||
Investments purchased | 152,884,616 | |||
Fund shares repurchased | 1,728,033 | |||
Dividends | 122,328 | |||
Advisory fees | 771,107 | |||
Fund administration fees | 11,370 | |||
Transfer agent fees and expenses | 118,962 | |||
12b-1 Distribution and shareholder servicing fees | 58,630 | |||
Non-interested Trustees’ fees and expenses | 8,998 | |||
Non-interested Trustees’ deferred compensation fees | 28,948 | |||
Accrued expenses and other payables | 94,795 | |||
Total Liabilities | 190,801,569 | |||
Net Assets | $ | 1,450,490,626 |
See footnotes at the end of the Statement.
See Notes to Financial Statements.
Janus Investment Fund | 21
Table of Contents
Statement of Assets and Liabilities (continued)
As of June 30, 2015 | Janus Global Unconstrained Bond Fund(1) | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 1,472,046,019 | ||
Undistributed net investment income/(loss) | 93,379 | |||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | (21,751,544) | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 102,772 | |||
Total Net Assets | $ | 1,450,490,626 | ||
Net Assets - Class A Shares | $ | 82,297,722 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 8,479,520 | |||
Net Asset Value Per Share(7) | $ | 9.71 | ||
Maximum Offering Price Per Share(8) | $ | 10.19 | ||
Net Assets - Class C Shares | $ | 51,992,658 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,363,524 | |||
Net Asset Value Per Share(7) | $ | 9.69 | ||
Net Assets - Class D Shares | $ | 13,269,448 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,367,091 | |||
Net Asset Value Per Share | $ | 9.71 | ||
Net Assets - Class I Shares | $ | 1,104,105,469 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 113,781,115 | |||
Net Asset Value Per Share | $ | 9.70 | ||
Net Assets - Class N Shares | $ | 3,098,926 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 319,338 | |||
Net Asset Value Per Share | $ | 9.70 | ||
Net Assets - Class R Shares | $ | 49,728 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,128 | |||
Net Asset Value Per Share | $ | 9.70 | ||
Net Assets - Class S Shares | $ | 486,689 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 50,173 | |||
Net Asset Value Per Share | $ | 9.70 | ||
Net Assets - Class T Shares | $ | 195,189,986 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 20,131,207 | |||
Net Asset Value Per Share | $ | 9.70 |
(1) | Formerly named Janus Unconstrained Bond Fund. | |
(2) | Includes cost of $5,355,297. | |
(3) | Net premiums paid $11,446,940. | |
(4) | Premiums received $28,220,736. | |
(5) | Premiums received $4,293,554. | |
(6) | Net premiums received $3,297,196. | |
(7) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(8) | Maximum offering price is computed at 100/95.25 of net asset value. |
See Notes to Financial Statements.
22 | JUNE 30, 2015
Table of Contents
Statement of Operations
For the year ended June 30, 2015 | Janus Global Unconstrained Bond Fund(1) | |||
Investment Income: | ||||
Interest | $ | 16,103,309 | ||
Dividends | 1,729,631 | |||
Dividends from affiliates | 54,833 | |||
Other income | 893,671 | |||
Total Investment Income | 18,781,444 | |||
Expenses: | ||||
Advisory fees | 5,969,132 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 111,427 | |||
Class C Shares | 259,502 | |||
Class R Shares | 97 | |||
Class S Shares | 728 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 9,294 | |||
Class R Shares | 49 | |||
Class S Shares | 728 | |||
Class T Shares | 297,334 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 7,930 | |||
Class C Shares | 12,509 | |||
Class I Shares | 159,112 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 4,551 | |||
Class C Shares | 3,314 | |||
Class D Shares | 2,951 | |||
Class I Shares | 23,542 | |||
Class N Shares | 35 | |||
Class S Shares | 22 | |||
Class T Shares | 1,022 | |||
Shareholder reports expense | 87,081 | |||
Registration fees | 275,530 | |||
Custodian fees | 12,687 | |||
Professional fees | 57,054 | |||
Non-interested Trustees’ fees and expenses | 27,456 | |||
Short sales interest expense | 200,944 | |||
Fund administration fees | 88,245 | |||
Recoupment expense | 4,712 | |||
Other expenses | 190,452 | |||
Total Expenses | 7,807,440 | |||
Less: Excess Expense Reimbursement | (9,497) | |||
Net Expenses | 7,797,943 | |||
Net Investment Income/(Loss) | 10,983,501 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 9,355,700 | |||
Futures contracts | (17,899,930) | |||
Short sales | 2,037,400 | |||
Swap contracts | (31,155,548) | |||
Written options contracts | 14,569,089 | |||
Written swaptions contracts | 983,360 | |||
Total Net Realized Gain/(Loss) on Investments | (22,109,929) |
See Notes to Financial Statements.
Janus Investment Fund | 23
Table of Contents
Statement of Operations (continued)
For the year ended June 30, 2015 | Janus Global Unconstrained Bond Fund(1) | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | $ | (4,170,018) | ||
Futures contracts | 2,601,547 | |||
Swap contracts | (4,374,037) | |||
Written options contracts | 4,413,563 | |||
Written swaptions contracts | 1,622,715 | |||
Total Change in Unrealized Net Appreciation/Depreciation | 93,770 | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (11,032,658) |
(1) | Formerly named Janus Unconstrained Bond Fund. |
See Notes to Financial Statements.
24 | JUNE 30, 2015
Table of Contents
Statements of Changes in Net Assets
Janus Global | ||||||||
Unconstrained Bond Fund(1) | ||||||||
For each year or period ended June 30 | 2015(2) | 2014(3) | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 10,983,501 | $ | (3,266) | ||||
Net realized gain/(loss) on investments | (22,109,929) | (1,549) | ||||||
Change in unrealized net appreciation/depreciation | 93,770 | 9,002 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (11,032,658) | 4,187 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income | ||||||||
Class A Shares | (435,038) | – | ||||||
Class C Shares | (162,351) | – | ||||||
Class D Shares | (78,404) | – | ||||||
Class I Shares | (8,541,280) | – | ||||||
Class N Shares | (19,228) | – | ||||||
Class R Shares | (204) | – | ||||||
Class S Shares | (2,505) | – | ||||||
Class T Shares | (1,196,947) | – | ||||||
Return of Capital | ||||||||
Class A Shares | (317,992) | – | ||||||
Class C Shares | (118,671) | – | ||||||
Class D Shares | (57,309) | – | ||||||
Class I Shares | (6,243,283) | – | ||||||
Class N Shares | (14,055) | – | ||||||
Class R Shares | (150) | – | ||||||
Class S Shares | (1,831) | – | ||||||
Class T Shares | (874,914) | – | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (18,064,162) | – | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 90,214,475 | 3,933,333 | ||||||
Class C Shares | 59,764,232 | 271,601 | ||||||
Class D Shares | 15,740,255 | 253,838 | ||||||
Class I Shares | 1,338,726,290 | 3,933,333 | ||||||
Class N Shares | 3,707,941 | 50,001 | ||||||
Class R Shares | 50,000 | – | ||||||
Class S Shares | 502,408 | 50,001 | ||||||
Class T Shares | 254,734,561 | 3,948,333 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 671,182 | – | ||||||
Class C Shares | 213,591 | – | ||||||
Class D Shares | 128,218 | – | ||||||
Class I Shares | 14,174,069 | – | ||||||
Class N Shares | 33,052 | – | ||||||
Class R Shares | 354 | – | ||||||
Class S Shares | 3,985 | – | ||||||
Class T Shares | 2,032,254 | – | ||||||
Shares Repurchased | ||||||||
Class A Shares | (11,153,799) | – | ||||||
Class C Shares | (7,399,909) | – | ||||||
Class D Shares | (2,607,963) | – | ||||||
Class I Shares | (229,953,134) | – | ||||||
Class N Shares | (626,402) | – | ||||||
Class S Shares | (60,777) | – | ||||||
Class T Shares | (61,752,064) | – |
See footnotes at the end of the Statements.
See Notes to Financial Statements.
Janus Investment Fund | 25
Table of Contents
Statements of Changes in Net Assets (continued)
Janus Global | ||||||||
Unconstrained Bond Fund(1) | ||||||||
For each year or period ended June 30 | 2015(2) | 2014(3) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | 1,467,142,819 | 12,440,440 | ||||||
Net Increase/(Decrease) in Net Assets | 1,438,045,999 | 12,444,627 | ||||||
Net Assets: | ||||||||
Beginning of period | 12,444,627 | – | ||||||
End of period | $ | 1,450,490,626 | $ | 12,444,627 | ||||
Undistributed Net Investment Income/(Loss) | $ | 93,379 | $ | (80) |
(1) | Formerly named Janus Unconstrained Bond Fund. | |
(2) | Period from February 6, 2015 (inception date) through June 30, 2015 for Class R Shares. | |
(3) | Period from May 27, 2014 (inception date) through June 30, 2014. |
See Notes to Financial Statements.
26 | JUNE 30, 2015
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Financial Highlights
Class A Shares
Janus Global Unconstrained Bond Fund(1) | ||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014(2) | ||||||||
Net Asset Value, Beginning of Period | $10.01 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(3) | 0.09 | –(4) | ||||||||
Net realized and unrealized gain/(loss) | (0.27) | 0.01 | ||||||||
Total from Investment Operations | (0.18) | 0.01 | ||||||||
Less Dividends and Distributions: | ||||||||||
Dividends (from net investment income) | (0.07) | – | ||||||||
Distributions (from capital gains) | – | – | ||||||||
Return of capital | (0.05) | – | ||||||||
Total Dividends and Distributions | (0.12) | – | ||||||||
Net Asset Value, End of Period | $9.71 | $10.01 | ||||||||
Total Return* | (1.86)% | 0.10% | ||||||||
Net Assets, End of Period (in thousands) | $82,298 | $3,934 | ||||||||
Average Net Assets for the Period (in thousands) | $44,607 | $3,934 | ||||||||
Ratios to Average Net Assets: | ||||||||||
Ratio of Gross Expenses** | 1.07% | 5.73% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.07% | 1.08% | ||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets** | 0.93% | (0.36)% | ||||||||
Portfolio Turnover Rate | 107% | 15% |
Class C Shares
Janus Global Unconstrained Bond Fund(1) | ||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014(2) | ||||||||
Net Asset Value, Beginning of Period | $10.01 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(3) | 0.02 | (0.01) | ||||||||
Net realized and unrealized gain/(loss) | (0.28) | 0.02 | ||||||||
Total from Investment Operations | (0.26) | 0.01 | ||||||||
Less Dividends and Distributions: | ||||||||||
Dividends (from net investment income) | (0.03) | – | ||||||||
Distributions (from capital gains) | – | – | ||||||||
Return of capital | (0.03) | – | ||||||||
Total Dividends and Distributions | (0.06) | – | ||||||||
Net Asset Value, End of Period | $9.69 | $10.01 | ||||||||
Total Return* | (2.59)% | 0.10% | ||||||||
Net Assets, End of Period (in thousands) | $51,993 | $272 | ||||||||
Average Net Assets for the Period (in thousands) | $26,045 | $126 | ||||||||
Ratios to Average Net Assets: | ||||||||||
Ratio of Gross Expenses** | 1.80% | 6.43% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.80% | 1.83% | ||||||||
Ratio of Net Investment Income/(Loss)** | 0.23% | (0.97)% | ||||||||
Portfolio Turnover Rate | 107% | 15% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Formerly named Janus Unconstrained Bond Fund. | |
(2) | Period from May 27, 2014 (inception date) through June 30, 2014. | |
(3) | Per share amounts are calculated based on average shares outstanding during the 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
Financial Highlights (continued)
Class D Shares
Janus Global Unconstrained Bond Fund(1) | ||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014(2) | ||||||||
Net Asset Value, Beginning of Period | $10.01 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(3) | 0.10 | –(4) | ||||||||
Net realized and unrealized gain/(loss) | (0.27) | 0.01 | ||||||||
Total from Investment Operations | (0.17) | 0.01 | ||||||||
Less Dividends and Distributions: | ||||||||||
Dividends (from net investment income) | (0.08) | – | ||||||||
Distributions (from capital gains) | – | – | ||||||||
Return of capital | (0.05) | – | ||||||||
Total Dividends and Distributions | (0.13) | – | ||||||||
Net Asset Value, End of Period | $9.71 | $10.01 | ||||||||
Total Return* | (1.68)% | 0.10% | ||||||||
Net Assets, End of Period (in thousands) | $13,269 | $254 | ||||||||
Average Net Assets for the Period (in thousands) | $7,698 | $118 | ||||||||
Ratios to Average Net Assets: | ||||||||||
Ratio of Gross Expenses** | 1.14% | 5.97% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.01% | 1.08% | ||||||||
Ratio of Net Investment Income/(Loss)** | 0.98% | (0.25)% | ||||||||
Portfolio Turnover Rate | 107% | 15% |
Class I Shares
Janus Global Unconstrained Bond Fund(1) | ||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014(2) | ||||||||
Net Asset Value, Beginning of Period | $10.01 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(3) | 0.12 | –(4) | ||||||||
Net realized and unrealized gain/(loss) | (0.28) | 0.01 | ||||||||
Total from Investment Operations | (0.16) | 0.01 | ||||||||
Less Dividends and Distributions: | ||||||||||
Dividends (from net investment income) | (0.09) | – | ||||||||
Distributions (from capital gains) | – | – | ||||||||
Return of capital | (0.06) | – | ||||||||
Total Dividends and Distributions | (0.15) | – | ||||||||
Net Asset Value, End of Period | $9.70 | $10.01 | ||||||||
Total Return* | (1.56)% | 0.10% | ||||||||
Net Assets, End of Period (in thousands) | $1,104,105 | $3,935 | ||||||||
Average Net Assets for the Period (in thousands) | $731,773 | $3,934 | ||||||||
Ratios to Average Net Assets: | ||||||||||
Ratio of Gross Expenses** | 0.76% | 5.47% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.76% | 0.83% | ||||||||
Ratio of Net Investment Income/(Loss)** | 1.26% | (0.11)% | ||||||||
Portfolio Turnover Rate | 107% | 15% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Formerly named Janus Unconstrained Bond Fund. | |
(2) | Period from May 27, 2014 (inception date) through June 30, 2014. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
28 | JUNE 30, 2015
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Class N Shares
Janus Global Unconstrained Bond Fund(1) | ||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014(2) | ||||||||
Net Asset Value, Beginning of Period | $10.01 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(3) | 0.12 | –(4) | ||||||||
Net realized and unrealized gain/(loss) | (0.28) | 0.01 | ||||||||
Total from Investment Operations | (0.16) | 0.01 | ||||||||
Less Dividends and Distributions: | ||||||||||
Dividends (from net investment income) | (0.09) | – | ||||||||
Distributions (from capital gains) | – | – | ||||||||
Return of capital | (0.06) | – | ||||||||
Total Dividends and Distributions | (0.15) | – | ||||||||
Net Asset Value, End of Period | $9.70 | $10.01 | ||||||||
Total Return* | (1.58)% | 0.10% | ||||||||
Net Assets, End of Period (in thousands) | $3,099 | $50 | ||||||||
Average Net Assets for the Period (in thousands) | $1,667 | $50 | ||||||||
Ratios to Average Net Assets: | ||||||||||
Ratio of Gross Expenses** | 0.77% | 5.47% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.77% | 0.83% | ||||||||
Ratio of Net Investment Income/(Loss)** | 1.22% | (0.11)% | ||||||||
Portfolio Turnover Rate | 107% | 15% |
Class R Shares
Janus Global | ||||||
Unconstrained Bond Fund(1) | ||||||
For a share outstanding during the period ended June 30 | 2015(5) | |||||
Net Asset Value, Beginning of Period | $10.00 | |||||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(3) | 0.03 | |||||
Net realized and unrealized gain/(loss) | (0.26) | |||||
Total from Investment Operations | (0.23) | |||||
Less Dividends and Distributions: | ||||||
Dividends (from net investment income) | (0.04) | |||||
Distributions (from capital gains) | – | |||||
Return of capital | (0.03) | |||||
Total Dividends and Distributions | (0.07) | |||||
Net Asset Value, End of Period | $9.70 | |||||
Total Return* | (2.31)% | |||||
Net Assets, End of Period (in thousands) | $50 | |||||
Average Net Assets for the Period (in thousands) | $50 | |||||
Ratios to Average Net Assets: | ||||||
Ratio of Gross Expenses** | 1.49% | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.49% | |||||
Ratio of Net Investment Income/(Loss)** | 0.71% | |||||
Portfolio Turnover Rate | 107% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Formerly named Janus Unconstrained Bond Fund. | |
(2) | Period from May 27, 2014 (inception date) through June 30, 2014. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Less than $0.005 on a per share basis. | |
(5) | Period from February 6, 2015 (inception date) through June 30, 2015. |
See Notes to Financial Statements.
Janus Investment Fund | 29
Table of Contents
Financial Highlights (continued)
Class S Shares
Janus Global Unconstrained Bond Fund(1) | ||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014(2) | ||||||||
Net Asset Value, Beginning of Period | $10.01 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(3) | 0.07 | (0.01) | ||||||||
Net realized and unrealized gain/(loss) | (0.28) | 0.02 | ||||||||
Total from Investment Operations | (0.21) | 0.01 | ||||||||
Less Dividends and Distributions: | ||||||||||
Dividends (from net investment income) | (0.06) | – | ||||||||
Distributions (from capital gains) | – | – | ||||||||
Return of capital | (0.04) | – | ||||||||
Total Dividends and Distributions | (0.10) | – | ||||||||
Net Asset Value, End of Period | $9.70 | $10.01 | ||||||||
Total Return* | (2.13)% | 0.10% | ||||||||
Net Assets, End of Period (in thousands) | $487 | $50 | ||||||||
Average Net Assets for the Period (in thousands) | $288 | $50 | ||||||||
Ratios to Average Net Assets: | ||||||||||
Ratio of Gross Expenses** | 1.36% | 5.97% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.36% | 1.33% | ||||||||
Ratio of Net Investment Income/(Loss)** | 0.71% | (0.61)% | ||||||||
Portfolio Turnover Rate | 107% | 15% |
Class T Shares
Janus Global Unconstrained Bond Fund(1) | ||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014(2) | ||||||||
Net Asset Value, Beginning of Period | $10.01 | $10.00 | ||||||||
Income/(Loss) from Investment Operations: | ||||||||||
Net investment income/(loss)(3) | 0.10 | –(4) | ||||||||
Net realized and unrealized gain/(loss) | (0.28) | 0.01 | ||||||||
Total from Investment Operations | (0.18) | 0.01 | ||||||||
Less Dividends and Distributions: | ||||||||||
Dividends (from net investment income) | (0.08) | – | ||||||||
Distributions (from capital gains) | – | – | ||||||||
Return of capital | (0.05) | – | ||||||||
Total Dividends and Distributions | (0.13) | – | ||||||||
Net Asset Value, End of Period | $9.70 | $10.01 | ||||||||
Total Return* | (1.80)% | 0.10% | ||||||||
Net Assets, End of Period (in thousands) | $195,190 | $3,949 | ||||||||
Average Net Assets for the Period (in thousands) | $118,182 | $3,938 | ||||||||
Ratios to Average Net Assets: | ||||||||||
Ratio of Gross Expenses** | 1.01% | 5.72% | ||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.01% | 1.08% | ||||||||
Ratio of Net Investment Income/(Loss)** | 0.99% | (0.36)% | ||||||||
Portfolio Turnover Rate | 107% | 15% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Formerly named Janus Unconstrained Bond Fund. | |
(2) | Period from May 27, 2014 (inception date) through June 30, 2014. | |
(3) | Per share amounts are calculated based on average shares outstanding during the year or period. | |
(4) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
30 | JUNE 30, 2015
Table of Contents
Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
Janus Global Unconstrained Bond Fund (formerly named Janus Unconstrained Bond Fund) (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in income-producing securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
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
Janus Investment Fund | 31
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Notes to Financial Statements (continued)
maturing within 60 days or less may be evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of June 30, 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 year. 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
32 | JUNE 30, 2015
Table of Contents
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, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
Dividends are declared daily and distributed monthly for the Fund. Realized capital gains, if any, are declared and distributed in December. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
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 June 30, 2015, the Fund had restricted cash in the amount of $76,696,000. 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
Janus Investment Fund | 33
Table of Contents
Notes to Financial Statements (continued)
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 year ended June 30, 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 year, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to take a negative outlook on the related currency. These forward contracts seek to increase exposure to currency risk.
During the year, 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 year ended June 30, 2015.
Fund | Sold | |||||
Janus Global Unconstrained Bond Fund | $ | 12,277,362 | ||||
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 year, the Fund purchased interest rate futures to increase exposure to interest rate risk.
During the year, the Fund sold interest rate futures to decrease exposure to interest rate risk.
During the year, the Fund purchased futures on equity indices to increase exposure to equity risk.
During the year, the Fund sold futures on equity indices to decrease exposure to equity risk.
During the year, the Fund purchased futures on currency indices to increase exposure to currency risk.
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Notes to Financial Statements (continued)
During the year, the Fund sold futures on currency indices to decrease exposure to currency risk.
The following table provides average ending monthly market value amounts on purchased and sold futures contracts during the year ended June 30, 2015.
Fund | Purchased | Sold | ||||||||
Janus Global Unconstrained Bond Fund | $ | 291,745,297 | $ | 240,030,468 | ||||||
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. Certain options contracts are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Statement of Assets and Liabilities as “Variation margin receivable” or “Variation margin payable” (if applicable).
The Fund may use options contracts to hedge against changes in interest rates, the values of equities, or foreign currencies. The Fund generally invests in options to hedge against adverse movements in the value of portfolio holdings. The use of such instruments may involve certain additional risks as a result of unanticipated movements in the market. A lack of correlation between the value of an instrument underlying an option and the asset being hedged, or unexpected adverse price movements, could render the Fund’s hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. The Fund may be subject to counterparty risk, interest rate risk, liquidity risk, equity risk, commodity risk, and currency risk in the normal course of pursuing its investment objective through its investments in options contracts.
Options traded on an exchange are regulated and the terms of the options are standardized. Options traded OTC expose the Fund to counterparty risk in the event that the counterparty does not perform. This risk is mitigated by having a netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the counterparty.
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 year, the Fund wrote call options on bond futures in order to reduce interest rate risk where reducing this exposure via other markets such as the cash bond market was less attractive.
During the year, the Fund wrote put options on bond futures in order to increase interest rate risk where increasing this exposure via other markets such as the cash bond market was less attractive.
During the year, the Fund wrote call options on various equity index futures for the purpose of decreasing exposure to broad equity risk and/or generating carry.
During the year, the Fund wrote put options on various equity index futures for the purpose of increasing exposure to broad equity risk and/or generating carry.
During the year, the Fund wrote call options on foreign exchanges rates vs. the U.S. dollar in order to reduce currency risk where reducing this exposure via the foreign exchange forward markets was less attractive.
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During the year, the Fund wrote put options on foreign exchanges rates vs. the U.S. dollar in order to increase currency risk where increasing this exposure via the foreign exchange forward markets was less attractive.
The following table provides average ending monthly market value amounts on written call and put options during the year ended June 30, 2015.
Written Call | Written Put | |||||||||
Fund | Options | Options | ||||||||
Janus Global Unconstrained Bond Fund | $ | 5,442,670 | $ | 5,919,905 | ||||||
Written option activity for the year ended June 30, 2015 is indicated in the tables below:
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Janus Global Unconstrained Bond Fund | ||||||||
Options outstanding at June 30, 2014 | – | $ | – | |||||
Options written | 1,341,277,258 | 36,585,228 | ||||||
Options closed | (69,668,040) | (6,188,080) | ||||||
Options expired | (911,326,209) | (15,309,624) | ||||||
Options exercised | (34,781,232) | (451,773) | ||||||
Options outstanding at June 30, 2015 | 325,501,777 | $ | 14,635,751 | |||||
Number of | Premiums | |||||||
Put Options | Contracts | Received | ||||||
Janus Global Unconstrained Bond Fund | ||||||||
Options outstanding at June 30, 2014 | – | $ | – | |||||
Options written | 4,067,476,822 | 62,766,959 | ||||||
Options closed | (702,770,175) | (11,768,561) | ||||||
Options expired | (2,436,610,522) | (33,352,615) | ||||||
Options exercised | (332,441,554) | (4,072,049) | ||||||
Options outstanding at June 30, 2015 | 595,654,571 | $ | 13,573,734 | |||||
Options on Swaps Contracts (Swaptions)
The Fund may purchase or write covered and uncovered put and call options on swap contracts, commonly referred to as “swaptions”. Swaption contracts grant the purchaser the right, but not the obligation, to enter into a swap transaction at preset terms detailed in the underlying agreement within a specified period of time.
Swaptions can be used for a variety of purposes, including to manage the Fund’s overall exposure to changes in interest or foreign currency exchange rates and credit quality; as an efficient means of adjusting the Fund’s exposure to certain markets; in an effort to enhance income or total return or protect the value of portfolio securities; to serve as a cash management tool; and to adjust portfolio duration or credit risk. Because the use of swaptions generally does not involve the delivery of securities or other underlying assets or principal, the risk of loss with respect to swaptions generally is limited to the net amount of payments that the Fund is contractually obligated to make. There is also a risk of a default by the other party to a swaption, in which case the Fund may not receive the net amount of payments that it contractually is entitled to receive. Entering into a swaption contract involves, to varying degrees, the elements of credit, market, and interest rate risk, associated with both option contracts and swap contracts.
Interest rate written receiver swaptions, if exercised by the purchaser, allow the Fund to short interest rates by entering into a pay fixed/receive float interest rate swap. Selling the interest rate receiver option reduces the exposure to interest rates and the short position becomes more valuable to the Fund as interest rates rise and/or implied interest rate volatility decreases. Interest rate written payer swaptions, if exercised by the purchaser, allow the Fund to take a long position on interest rates by entering into a receive fixed/pay float interest rate swap. Selling the interest rate payer option increases the exposure to interest rates and the short position becomes more valuable to the Fund as interest rates fall and/or implied interest rate volatility decreases. Credit default written receiver swaptions, if exercised by the purchaser, allow the Fund to buy credit protection through credit default swaps. Selling the credit default receiver option reduces the exposure to the credit risk of the individual issuers and/or indices of issuers and the short position becomes more valuable to the Fund as the likelihood of a credit event on the reference asset(s) increases. Credit default written payer swaptions, if exercised by the purchaser, allow the Fund to sell credit protection through credit default swaps. Selling the credit default payer option increases the exposure to the credit risk of the individual issuers and/or indices of issuers and the short position becomes more valuable to the Fund as the likelihood of a credit event on the reference asset(s) decreases. Swaptions purchased are reported in the Schedule of Investments (if applicable). Swaptions written are reported as a liability on the Statement of Assets and Liabilities as “Swaptions written, at value” (if applicable).
During the year, the Fund sold interest rate receiver swaptions (call) in order to gain interest rate volatility exposure and to reduce interest rate exposure.
During the year, the Fund sold interest rate payer swaptions (put) in order to gain interest rate volatility exposure and to also gain interest rate exposure.
During the year, the Fund sold credit default receiver swaptions (call) in order to gain credit market volatility exposure and to reduce credit exposure.
During the year, the Fund sold credit default payer swaptions (put) in order to gain credit market volatility exposure and to gain credit exposure.
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Notes to Financial Statements (continued)
The following table provides average ending monthly market value amounts on written call and put swaptions during the year ended June 30, 2015.
Written Call | ||||||||||
Fund | Swaptions | Written Put Swaptions | ||||||||
Janus Global Unconstrained Bond Fund | $ | 1,020,378 | $ | 573,285 | ||||||
Written swaption activity for the year ended June 30, 2015 is indicated in the tables below:
Notional | Premiums | |||||||||
Call Swaptions | Amount | Received | ||||||||
Janus Global Unconstrained Bond Fund | ||||||||||
Swaptions outstanding at June 30, 2014 | – | $ | – | |||||||
Swaptions written | 2,115,381,000 | 11,957,612 | ||||||||
Swaptions closed | (34,693,000) | (364,276) | ||||||||
Swaptions expired | (379,035,000) | (8,717,370) | ||||||||
Swaptions exercised | – | – | ||||||||
Swaptions outstanding at June 30, 2015 | 1,701,653,000 | $ | 2,875,966 | |||||||
Notional | Premiums | |||||||||
Put Swaptions | Amount | Received | ||||||||
Janus Global Unconstrained Bond Fund | ||||||||||
Swaptions outstanding at June 30, 2014 | – | $ | – | |||||||
Swaptions written | 1,980,821,000 | 3,817,085 | ||||||||
Swaptions closed | (104,018,000) | (2,006,407) | ||||||||
Swaptions expired | (11,028,000) | (393,090) | ||||||||
Swaptions exercised | – | – | ||||||||
Swaptions outstanding at June 30, 2015 | 1,865,775,000 | $ | 1,417,588 | |||||||
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 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 on the primary market or exchange it trades. 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
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posting of collateral by the counterparty to cover the Fund’s exposure to the counterparty.
The Fund may enter into various types of credit default swap agreements, including OTC credit default swap agreements and index credit default swaps (“CDX”), for investment purposes and to add leverage to its portfolio. Credit default swaps are a specific kind of counterparty agreement that allow the transfer of third party credit risk from one party to the other. One party in the swap is a lender and faces credit risk from a third party, and the counterparty in the credit default swap agrees to insure this risk in exchange for regular periodic payments. Credit default swaps could result in losses if the Fund does not correctly evaluate the creditworthiness of the company or companies on which the credit default swap is based. Credit default swap agreements may involve greater risks than if the Fund had invested in the reference obligation directly since, in addition to risks relating to the reference obligation, credit default swaps are subject to illiquidity risk, counterparty risk, and credit risk. The Fund will generally incur a greater degree of risk when it sells a credit default swap than when it purchases a credit default swap. As a buyer of a credit default swap, the Fund may lose its investment and recover nothing should no credit event occur and the swap is held to its termination date. As seller of a credit default swap, if a credit event were to occur, the value of any deliverable obligation received by the Fund, coupled with the upfront or periodic payments previously received, may be less than what it pays to the buyer, resulting in a loss of value to the Fund.
If the Fund is the seller of credit protection against a particular security, the Fund would receive an up-front or periodic payment to compensate against potential credit events. As the seller in a credit default swap contract, the Fund would be required to pay the par value (the “notional value”) (or other agreed-upon value) of a referenced debt obligation to the counterparty in the event of a default by a third party, such as a U.S. or foreign corporate issuer, on the debt obligation. In return, the Fund would receive from the counterparty a periodic stream of payments over the term of the contract provided that no event of default has occurred. If no default occurs, the Fund would keep the stream of payments and would have no payment obligations. As the seller, the Fund would effectively add leverage to its portfolio because, in addition to its total net assets, the Fund would be subject to investment exposure on the notional value of the swap. The maximum potential amount of future payments (undiscounted) that the Fund as a seller could be required to make in a credit default transaction would be the notional amount of the agreement.
As a buyer of credit protection, the Fund is entitled to receive the par (or other agreed-upon) value of a referenced debt obligation from the counterparty to the contract in the event of a default or other credit event by a third party, such as a U.S. or foreign issuer, on the debt obligation. In return, the Fund as buyer would pay to the counterparty a periodic stream of payments over the term of the contract provided that no credit event has occurred. If no credit event occurs, the Fund would have spent the stream of payments and potentially received no benefit from the contract.
The Fund may invest in single-name credit default swaps (“CDS”) to buy or sell credit protection to hedge its credit exposure, gain issuer exposure without owning the underlying security, or increase the Fund’s total return. Single-name CDS enable the Fund to buy or sell protection against a credit event of a specific issuer. When the Fund buys a single-name CDS, the Fund will receive a return on its investment only in the event of a credit event, such as default by the issuer of the underlying obligation (as opposed to a credit downgrade or other indication of financial difficulty). If a single-name CDS transaction is particularly large, or if the relevant market is illiquid, it may not be possible for the Fund to initiate a single-name CDS transaction or to liquidate its position at an advantageous time or price, which may result in significant losses. Moreover, the Fund bears the risk of loss of the amount expected to be received under a single-name CDS in the event of the default or bankruptcy of the counterparty. The risks associated with cleared single-name CDS may be lower than that for uncleared single-name CDS because for cleared single-name CDS, the counterparty is a clearinghouse (to the extent such a trading market is available). However, there can be no assurance that a clearinghouse or its members will satisfy their obligations to the Fund.
The Fund may invest in CDXs. A CDX is a swap on an index of credit default swaps. CDXs allow an investor to manage credit risk or take a position on a basket of credit entities (such as credit default swaps or commercial mortgage-backed securities) in a more efficient manner than transacting in a single-name CDS. If a credit event occurs in one of the underlying companies, the protection is paid out via the delivery of the defaulted bond by the buyer of protection in return for a payment of notional value of the defaulted bond by the seller of protection or it may be settled through a cash settlement between the two parties. The underlying company is then removed from the index. If the Fund holds a long position in a CDX, the Fund would indirectly bear its proportionate share of any expenses paid by a CDX. By investing in CDXs, the Fund could be exposed to illiquidity risk, counterparty risk, and credit risk of the issuers of the underlying loan obligations
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Notes to Financial Statements (continued)
and of the CDX markets. If there is a default by the CDX counterparty, the Fund will have contractual remedies pursuant to the agreements related to the transaction. CDXs also bear the risk that the Fund will not be able to meet its obligation to the counterparty.
During the year, the Fund sold protection via the credit default swap market in order to gain credit risk exposure to individual corporates, countries and/or credit indices where gaining this exposure via the cash bond market was less attractive.
The following table provides average ending monthly market value amounts on credit default swaps which are long the reference asset during the year ended June 30, 2015.
Fund | Long | |||||
Janus Global Unconstrained Bond Fund | $ | 1,916,207 | ||||
The Fund’s use of interest rate swaps involves investment techniques and risks different from those associated with ordinary portfolio security transactions. Interest rate swaps do not involve the delivery of securities, other underlying assets, or principal. Interest rate swaps involve the exchange by two parties of their respective commitments to pay or receive interest (e.g., an exchange of floating rate payments for fixed rate payments). Interest rate swaps may result in potential losses if interest rates do not move as expected or if the counterparties are unable to satisfy their obligations. Interest rate swaps are generally entered into on a net basis. Accordingly, the risk of loss with respect to interest rate swaps is limited to the net amount of interest payments that the Fund is contractually obligated to make.
During the year, the Fund entered into interest rate swaps paying a fixed interest rate and receiving a floating interest rate in order to decrease interest rate risk (duration) exposure. As interest rates rise, the Fund benefits by receiving a higher expected future floating rate, while paying a fixed rate that has not increased.
During the year, the Fund entered into interest rate swaps paying a floating interest rate and receiving a fixed interest rate in order to increase interest rate risk (duration) exposure. As interest rates fall, the Fund benefits by paying a lower future floating rate, while receiving a fixed rate that has not decreased.
The following table provides average ending monthly market value amounts on interest rate swaps which are long the reference asset during the year ended June 30, 2015.
Fund | Long | |||||
Janus Global Unconstrained Bond Fund | $ | (1,785,339) | ||||
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 year, the Fund entered into total return swaps on equity securities or indices to decrease exposure to equity risk. These total return swaps require the Fund to pay an amount equal to the positive price movement of securities or an index multiplied by the notional amount of the contract and, in some cases, dividends paid on the securities. The Fund will receive payments of a floating reference interest rate and an amount equal to the negative price movement of the same securities or index multiplied by the notional amount of the contract.
The following table provides average ending monthly market value amounts on total return swaps which are short the reference asset during the year ended June 30, 2015.
Fund | Short | |||||
Janus Global Unconstrained Bond Fund | $ | 1,373 | ||||
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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 June 30, 2015.
Fair Value of Derivative Instruments as of June 30, 2015
Derivatives not accounted | Asset Derivatives | Liability Derivatives | ||||||||||
for as hedging instruments | Statement of Assets and Liabilities Location | Fair Value | Statement of Assets and Liabilities Location | Fair Value | ||||||||
Janus Global Unconstrained Bond Fund | ||||||||||||
Credit Contracts | Outstanding swap contracts, at value | $ | 9,310,350 | Outstanding swap contracts, at value | $ | 5,583,706 | ||||||
Credit Contracts | Swaptions written, at value | 2,669,929 | ||||||||||
Currency Contracts | Forward currency contracts | 222,644 | Options written, at value | 2,850,896 | ||||||||
Equity Contracts | Options written, at value | 10,524,128 | ||||||||||
Equity Contracts | Variation margin payable | 542,684 | ||||||||||
Interest Rate Contracts | Options written, at value | 10,962,999 | ||||||||||
Interest Rate Contracts | Outstanding swap contracts, at value | 481,468 | Outstanding swap contracts, at value | 1,323,707 | ||||||||
Interest Rate Contracts | Swaptions written, at value | 910 | ||||||||||
Interest Rate Contracts | Variation margin receivable | 404,611 | Variation margin payable | 514,823 | ||||||||
Total | $ | 10,419,073 | $ | 34,973,782 | ||||||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the year ended June 30, 2015.
The effect of Derivative Instruments on the Statements of Operations for the year ended June 30, 2015
Amount of Realized Gain/(Loss) on | ||||||||||||||||||||||||
Derivatives Recognized in Income | ||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||
and foreign | Written | Written | ||||||||||||||||||||||
Derivatives not accounted for | currency | Futures | Swap | options | swaptions | |||||||||||||||||||
as hedging instruments | transactions | contracts | contracts | contracts | contracts | Total | ||||||||||||||||||
Janus Global Unconstrained Bond Fund | ||||||||||||||||||||||||
Credit Contracts | $ | – | $ | – | $ | 6,528,192 | $ | – | $ | – | $ | 6,528,192 | ||||||||||||
Currency Contracts | 2,045,270 | 942,069 | – | 1,333,916 | – | 4,321,255 | ||||||||||||||||||
Equity Contracts | – | (2,198,756 | ) | 19,261 | 12,677,519 | – | 10,498,024 | |||||||||||||||||
Interest Rate Contracts | – | (16,643,243 | ) | (37,703,001 | ) | 557,654 | 983,360 | (52,805,230 | ) | |||||||||||||||
Total | $ | 2,045,270 | $ | (17,899,930 | ) | $ | (31,155,548 | ) | $ | 14,569,089 | $ | 983,360 | $ | (31,457,759 | ) | |||||||||
Change in Unrealized Appreciation/Depreciation on | ||||||||||||||||||||||||
Derivatives Recognized in Income | ||||||||||||||||||||||||
Investments, foreign | ||||||||||||||||||||||||
currency translations and | Written | Written | ||||||||||||||||||||||
Derivatives not accounted for | non-interested Trustees’ | Futures | Swap | options | swaptions | |||||||||||||||||||
as hedging instruments | deferred compensation | contracts | contracts | contracts | contracts | Total | ||||||||||||||||||
Janus Global Unconstrained Bond Fund | ||||||||||||||||||||||||
Credit Contracts | $ | – | $ | – | $ | (4,423,100 | ) | $ | – | $ | (105,665 | ) | $ | (4,528,765 | ) | |||||||||
Currency Contracts | 222,644 | – | – | 860,430 | – | 1,083,074 | ||||||||||||||||||
Equity Contracts | – | 2,601,547 | – | 366,504 | – | 2,968,051 | ||||||||||||||||||
Interest Rate Contracts | – | – | 49,063 | 3,186,629 | 1,728,380 | 4,964,072 | ||||||||||||||||||
Total | $ | 222,644 | $ | 2,601,547 | $ | (4,374,037 | ) | $ | 4,413,563 | $ | 1,622,715 | $ | 4,486,432 | |||||||||||
Please see the Fund’s Statement of Operations for the Fund’s “Net Realized and Unrealized Gain/(Loss) on Investments.”
3. | Other Investments and Strategies |
Additional Investment Risk
The Fund may be invested in lower-rated debt securities that have a higher risk of default or loss of value since these securities may be sensitive to economic changes, political changes or adverse developments specific to the issuer.
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and
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Notes to Financial Statements (continued)
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.
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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crisis could lead to price controls, forced mergers of companies, expropriation or confiscatory taxation, imposition or enforcement of foreign ownership limits, seizure, nationalization, sanctions or imposition of restrictions by various governmental entities on investment and trading, or creation of government monopolies, any of which may have a detrimental effect on the Fund’s investments. In addition, the Fund’s investments may be denominated in foreign currencies and therefore, changes in the value of a country’s currency compared to the U.S. dollar may affect the value of the Fund’s investments. To the extent that the Fund invests a significant portion of its assets in the securities of issuers in or companies of a single country or region, it is more likely to be impacted by events or conditions affecting that country or region, which could have a negative impact on the Fund’s performance.
Exchange-Traded Funds
The Fund may invest in exchange-traded funds (“ETFs”) 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. ETFs are traded on a national securities exchange at market prices that may vary from the net asset value of their underlying investments. Accordingly, there may be times when an ETF trades at a premium or discount. When the Fund invests in an ETF, in addition to directly bearing the expenses associated with its own operations, it will bear a pro rata portion of the ETF’s expenses. ETFs have certain inherent risks generally associated with investments in a portfolio of securities in which the ETF is invested, including the risk that the general level of stock prices may decline, thereby adversely affecting the value of each unit of the ETF. ETFs also involve the risk that an active trading market for an ETF’s shares may not develop or be maintained. Similarly, because the value of ETF shares depends on the demand in the market, the Portfolio may not be able to purchase or sell an ETF at the most optimal time, which could adversely affect the Portfolio’s performance. In addition, ETFs that track particular indices may be unable to match the performance of such underlying indices due to the temporary unavailability of certain index securities in the secondary market or other factors, such as discrepancies with respect to the weighting of securities. Because the Portfolio may invest in a broad range of ETFs, such risks may include, but are not limited to, leverage risk, foreign exposure risk, interest rate risk, and commodity-linked investments risk.
Inflation-Linked Securities
The Fund may invest in inflation-indexed bonds, including municipal inflation-indexed bonds and corporate inflation-indexed bonds, or in derivatives that are linked to these securities. Inflation-linked bonds are fixed-income securities that have a principal value that is periodically adjusted according to the rate of inflation. If an index measuring inflation falls, the principal value of inflation-indexed bonds will typically be adjusted downward, and consequently the interest payable on these securities (calculated with respect to a smaller principal amount) will be reduced. Because of their inflation adjustment feature, inflation-linked bonds typically have lower yields than conventional fixed-rate bonds. In addition, inflation-linked bonds also normally decline in price when real interest rates rise. In the event of deflation, when prices decline over time, the principal and income of inflation-linked bonds would likely decline, resulting in losses to the Fund.
In the case of Treasury Inflation-Protected Securities, also known as TIPS, repayment of original bond principal upon maturity (as adjusted for inflation) is guaranteed by the U.S. Treasury. For inflation-linked bonds that do not provide a similar guarantee, the adjusted principal value of the inflation-linked bond repaid at maturity may be less than the original principal. Inflation-linked bonds may also be issued by, or related to, sovereign governments of other developed countries, emerging market countries, or companies or other entities not affiliated with governments.
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 June 30, 2015.
• | Floating Rate Loans – Floating rate loans are debt securities that have floating interest rates, that adjust periodically, and are tied to a benchmark lending rate, such as the London Interbank Offered Rate (“LIBOR”). In other cases, the lending rate could be tied to the prime rate offered by one or more major U.S. banks or the rate paid on large certificates of deposit traded in the secondary markets. If the benchmark lending rate changes, the rate payable to lenders under the loan will change at the next scheduled adjustment date specified in the loan agreement. Floating rate loans are typically issued to companies (“borrowers”) in connection with recapitalizations, acquisitions, and refinancings. Floating rate loan investments are generally below investment grade. Senior floating rate loans are secured by specific collateral of a borrower and are senior in the borrower’s capital |
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Notes to Financial Statements (continued)
structure. The senior position in the borrower’s capital structure generally gives holders of senior loans a claim on certain of the borrower’s assets that is senior to subordinated debt and preferred and common stock in the case of a borrower’s default. Floating rate loan investments may involve foreign borrowers, and investments may be denominated in foreign currencies. Floating rate loans often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The Fund may invest in obligations of borrowers who are in bankruptcy proceedings. While the Fund generally expects to invest in fully funded term loans, certain of the loans in which the Fund may invest include revolving loans, bridge loans, and delayed draw term loans. |
Purchasers of floating rate loans may pay and/or receive certain fees. The Fund may receive fees such as covenant waiver fees or prepayment penalty fees. The Fund may pay fees such as facility fees. Such fees may affect the Fund’s return. |
Mortgage- and Asset-Backed Securities
Mortgage- and asset-backed securities represent interests in “pools” of commercial or residential mortgages or other assets, including consumer loans or receivables. The Fund may purchase fixed or variable rate commercial or residential 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 Mae and Freddie Mac securities 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 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
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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 June 30, 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 | $ | 34,601 | $ | (34,601) | $ | – | $ | – | ||||||||||
Barclays Capital, Inc. | 1,533,587 | (1,381,654) | – | 151,933 | ||||||||||||||
BNP Paribas | 1,604,875 | (1,604,875) | – | – | ||||||||||||||
Citigroup Global Markets | 1,583,920 | (1,583,920) | – | – | ||||||||||||||
Credit Suisse International | 441,659 | – | (294,000) | 147,659 | ||||||||||||||
Goldman Sachs International | 3,334,775 | (1,754,447) | – | 1,580,328 | ||||||||||||||
JPMorgan Chase & Co. | 1,193,205 | (1,193,205) | – | – | ||||||||||||||
Morgan Stanley | 287,840 | (287,840) | – | – | ||||||||||||||
Total | $ | 10,014,462 | $ | (7,840,542) | $ | (294,000) | $ | 1,879,920 | ||||||||||
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 | $ | 1,261,142 | $ | (34,601) | $ | – | $ | 1,226,541 | ||||||||||
Barclays Capital, Inc. | 1,381,654 | (1,381,654) | – | – | ||||||||||||||
BNP Paribas | 2,005,463 | (1,604,875) | (400,588) | – | ||||||||||||||
Citigroup Global Markets | 2,215,493 | (1,583,920) | (631,573) | – | ||||||||||||||
Goldman Sachs International | 1,754,447 | (1,754,447) | – | – | ||||||||||||||
JPMorgan Chase & Co. | 2,913,809 | (1,193,205) | (1,720,604) | – | ||||||||||||||
Morgan Stanley | 897,140 | (287,840) | (609,300) | – | ||||||||||||||
Total | $ | 12,429,148 | $ | (7,840,542) | $ | (3,362,065) | $ | 1,226,541 | ||||||||||
(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
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Notes to Financial Statements (continued)
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.
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 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.
Sovereign Debt
The Fund may invest in U.S. and foreign government debt securities (“sovereign debt”). Investments in U.S. sovereign debt are considered low risk. However, investments in non-U.S. sovereign debt can involve a high degree of risk, including the risk that the governmental entity that controls the repayment of sovereign debt may not be willing or able to repay the principal and/or to pay the interest on its sovereign debt in a timely manner. A sovereign debtor’s willingness or ability to satisfy its debt obligation may be affected by various factors, including its cash flow situation, the extent of its foreign currency reserves, the availability of foreign exchange when a payment is due, the relative size of its debt position in relation to its economy as a whole, the sovereign debtor’s policy toward international lenders, and local political constraints to which the governmental entity may be subject. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies, and other entities. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance, or repay principal or interest when due may result in the cancellation of third party commitments to lend funds to the sovereign debtor, which may further impair such debtor’s ability or willingness to timely service its debts. The Fund may be requested to participate in the rescheduling of such sovereign debt and to extend further loans to governmental entities, which may adversely affect the Fund’s holdings. In the event of default, there may be limited or no legal remedies for collecting sovereign debt and there may be no bankruptcy proceedings through which the Fund may collect all or part of the sovereign debt that a governmental entity has not repaid.
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When-Issued and Delayed Delivery Securities
The Fund may purchase or sell securities on a when-issued or delayed delivery basis. When-issued and delayed delivery securities in which the Fund may invest include U.S. Treasury Securities, municipal bonds, bank loans, and other similar instruments. The price of the underlying securities and date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Losses may arise due to changes in the market value of the securities or from the inability of counterparties to meet the terms of the contract. In connection with such purchases, the Fund may hold liquid assets as collateral with the Fund’s custodian sufficient to cover the purchase price.
4. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | Contractual | |||||||||
Net Assets | Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Janus Global Unconstrained | First $ | 1 Billion | 0.65 | |||||||
Bond Fund | Next $ | 2 Billion | 0.62 | |||||||
Over $ | 3 Billion | 0.60 | ||||||||
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, Class R Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
Janus Global Unconstrained Bond Fund | 0.82 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
For a period of three years subsequent to the Fund’s commencement of operations or until the Fund’s assets exceed the first breakpoint in the investment advisory fee schedule, whichever occurs first, Janus Capital may recover from the Fund fees and expenses previously waived or reimbursed, which could then be considered a deferral, if the Fund’s expense ratio, including recovered expenses, falls below the expense limit. For the year ended June 30, 2015, Janus Capital recovered $4,712 from the Fund. This amount is disclosed as “Recoupment expense” 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
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Notes to Financial Statements (continued)
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 $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the year ended June 30, 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 June 30, 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 year ended June 30, 2015 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are
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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 $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 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 product compliant with Rule 2a-7 under the 1940 Act. There are no restrictions on the Fund’s ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Fund to Janus Cash Liquidity Fund LLC. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the year ended June 30, 2015 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 4.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the year ended June 30, 2015, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Janus Global Unconstrained Bond Fund | $ | 95,380 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the year ended June 30, 2015, redeeming shareholders of Class A Shares paid the following CDSCs to Janus Distributors:
Fund (Class A Shares) | CDSC | |||||
Janus Global Unconstrained Bond Fund | $ | 4,864 | ||||
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 year ended June 30, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Janus Global Unconstrained Bond Fund | $ | 9,632 | ||||
As of June 30, 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 Unconstrained Bond Fund - Class A Shares | 24 | % | 1 | % | ||||||
Janus Global Unconstrained Bond Fund - Class C Shares | 0 | 0 | ||||||||
Janus Global Unconstrained Bond Fund - Class D Shares | 0 | 0 | ||||||||
Janus Global Unconstrained Bond Fund - Class I Shares | 2 | 1 | ||||||||
Janus Global Unconstrained Bond Fund - Class N Shares | 2 | 0 | ||||||||
Janus Global Unconstrained Bond Fund - Class R Shares | 100 | 0 | ||||||||
Janus Global Unconstrained Bond Fund - Class S Shares | 10 | 0 | ||||||||
Janus Global Unconstrained Bond Fund - Class T Shares | 10 | 1 | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America). See the Fund’s Statement of Additional Information for more information regarding ownership of Fund shares, which includes ownership by the Fund’s portfolio manager.
5. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized
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Notes to Financial Statements (continued)
appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation, derivatives, and foreign currency contract adjustments. 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.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
Janus Global Unconstrained Bond Fund | $ | 122,328 | $ | – | $ | (14,502,764) | $ | – | $ | – | $ | (1,919,841) | $ | (5,255,116) | |||||||||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of June 30, 2015, 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 June 30, 2015
For the year ended June 30, 2015
Accumulated | |||||||||||||||
No Expiration | Capital | ||||||||||||||
Fund | Short-Term | Long-Term | Losses | ||||||||||||
Janus Global Unconstrained Bond Fund | $ | (14,502,764) | $ | – | $ | (14,502,764) | |||||||||
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 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 investments in swaps and investments in partnerships.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
Janus Global Unconstrained Bond Fund | $ | 1,466,391,944 | $ | 1,658,808 | $ | (6,913,924) | ||||||||
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. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the year ended June 30, 2015
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Global Unconstrained Bond Fund | $ | 10,435,957 | $ | – | $ | 7,628,205 | $ | – | ||||||||||||||
For the year ended June 30, 2014
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Global Unconstrained Bond Fund | $ | – | $ | – | $ | – | $ | (173) | ||||||||||||||
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Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) to | Increase/(Decrease) to | |||||||||||||
Increase/(Decrease) | Undistributed Net | Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
Janus Global Unconstrained Bond Fund | $ | (7,537,067) | $ | 7,174,120 | $ | 362,947 | ||||||||
6. | Capital Share Transactions |
Janus | ||||||||||
Global Unconstrained | ||||||||||
Bond Fund | ||||||||||
For each year or period ended June 30 | 2015(1) | 2014(2) | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 9,150,477 | 393,333 | ||||||||
Reinvested dividends and distributions | 68,452 | – | ||||||||
Shares repurchased | (1,132,742) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 8,086,187 | 393,333 | ||||||||
Shares Outstanding, Beginning of Period | 393,333 | – | ||||||||
Shares Outstanding, End of Period | 8,479,520 | 393,333 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 6,069,039 | 27,160 | ||||||||
Reinvested dividends and distributions | 21,828 | – | ||||||||
Shares repurchased | (754,503) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 5,336,364 | 27,160 | ||||||||
Shares Outstanding, Beginning of Period | 27,160 | – | ||||||||
Shares Outstanding, End of Period | 5,363,524 | 27,160 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 1,594,220 | 25,379 | ||||||||
Reinvested dividends and distributions | 13,067 | – | ||||||||
Shares repurchased | (265,575) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 1,341,712 | 25,379 | ||||||||
Shares Outstanding, Beginning of Period | 25,379 | – | ||||||||
Shares Outstanding, End of Period | 1,367,091 | 25,379 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 135,468,728 | 393,333 | ||||||||
Reinvested dividends and distributions | 1,445,000 | – | ||||||||
Shares repurchased | (23,525,946) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 113,387,782 | 393,333 | ||||||||
Shares Outstanding, Beginning of Period | 393,333 | – | ||||||||
Shares Outstanding, End of Period | 113,781,115 | 393,333 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 375,154 | 5,000 | ||||||||
Reinvested dividends and distributions | 3,370 | – | ||||||||
Shares repurchased | (64,186) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 314,338 | 5,000 | ||||||||
Shares Outstanding, Beginning of Period | 5,000 | – | ||||||||
Shares Outstanding, End of Period | 319,338 | 5,000 |
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Notes to Financial Statements (continued)
Janus | ||||||||||
Global Unconstrained | ||||||||||
Bond Fund | ||||||||||
For each year or period ended June 30 | 2015(1) | 2014(2) | ||||||||
Transactions in Fund Shares – Class R Shares: | ||||||||||
Shares sold | 5,092 | – | ||||||||
Reinvested dividends and distributions | 36 | – | ||||||||
Shares repurchased | – | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 5,128 | – | ||||||||
Shares Outstanding, Beginning of Period | – | – | ||||||||
Shares Outstanding, End of Period | 5,128 | – | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 50,996 | 5,000 | ||||||||
Reinvested dividends and distributions | 407 | – | ||||||||
Shares repurchased | (6,230) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 45,173 | 5,000 | ||||||||
Shares Outstanding, Beginning of Period | 5,000 | – | ||||||||
Shares Outstanding, End of Period | 50,173 | 5,000 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 25,844,543 | 394,833 | ||||||||
Reinvested dividends and distributions | 207,281 | – | ||||||||
Shares repurchased | (6,315,450) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | 19,736,374 | 394,833 | ||||||||
Shares Outstanding, Beginning of Period | 394,833 | – | ||||||||
Shares Outstanding, End of Period | 20,131,207 | 394,833 |
(1) | Period from February 6, 2015 (inception date) through June 30, 2015 for Class R Shares. | |
(2) | Period from May 27, 2014 (inception date) through June 30, 2014. |
7. | Purchases and Sales of Investment Securities |
For the year ended June 30, 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 Unconstrained Bond Fund | $ | 1,961,022,417 | $ | 523,297,910 | $ | 368,262,518 | $ | 371,272,858 | ||||||
8. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of Janus Global Unconstrained Bond Fund:
of Janus Global Unconstrained Bond Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Janus Global Unconstrained Bond Fund (formerly named Janus Unconstrained Bond Fund) (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (toll free); (ii) on the Fund’s website at janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding the Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through janus.com/proxyvoting and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Fund files its complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Fund’s Form N-Q: (i) is available on the SEC’s website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-0020 (toll free).
APPROVAL OF ADVISORY AGREEMENTS DURING THE PERIOD
The Trustees of Janus Investment Fund, each of whom serves as an “independent” Trustee (the “Trustees”), and none of whom is affiliated with Janus Capital, the investment adviser of Janus Multi-Sector Income Fund and Janus Unconstrained Bond Fund (renamed Janus Global Unconstrained Bond Fund effective October 6, 2014) (each a “New Fund” and collectively, the “New Funds”), met on November 7, 2013 to consider the proposed investment advisory agreement for each New Fund. In the course of their consideration of each of those agreements, the Trustees met in executive session and were advised by their independent legal counsel. In this regard, prior to the meeting and at earlier meetings, the Trustees received and reviewed extensive information provided by Janus Capital in response to requests of the Trustees and their counsel, and also considered information provided by their independent fee consultant. The Trustees also had been provided and had considered, and were in the process of considering, various data and information in connection with their annual consideration of the investment advisory agreements in place with Janus Capital, and certain of that data was relevant to their consideration of the proposed agreement with Janus Capital for each New Fund. Based on their evaluation of the information available to them, the Trustees unanimously approved the investment advisory agreement for each New Fund for an initial term through February 2016, subject to earlier termination as provided for in the agreements.
In considering the agreements and reaching their conclusions, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services to be provided by Janus Capital, taking into account the investment objective and strategies of each New Fund and the similar type services currently provided by Janus Capital to other funds in the complex. In addition, the Trustees reviewed the resources and key personnel of Janus Capital that will be providing investment and risk management services to each New Fund. The Trustees also considered other services provided to the New Funds by Janus Capital, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees noted the use of Quantum, a system built by Janus Capital, to analyze portfolio risk. The Trustees considered Janus Capital’s role as administrator to each New Fund, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to each New Fund’s investment restrictions, providing support services for the Trustees and Trustee committees, communicating with shareholders and overseeing the activities of other service providers, including monitoring compliance with various policies and procedures of the New Funds and with applicable securities laws and regulations.
The Trustees concluded that the nature, extent and quality of the services to be provided by Janus Capital were appropriate and consistent with the terms of each New Fund’s proposed investment advisory agreement. They also concluded that Janus Capital had sufficient personnel, with the appropriate education and experience, to serve the New Funds effectively.
Costs of Services Provided
The Trustees noted the information regarding the proposed fees and expenses of each New Fund in comparison to similar information for other comparable funds. The Trustees noted that they had previously reviewed, and were in the process of reviewing, management fees charged by Janus Capital to nonmutual fund clients, including those for which Janus Capital provides only portfolio management services. The Trustees noted servicing that is provided by Janus Capital for each
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New Fund relative to those other clients, including regulatory compliance and administration services, and that, in serving the New Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients.
The Trustees concluded that the proposed advisory fee payable by each New Fund was reasonable in relation to the nature, extent and quality of the services to be provided, taking into account the fees charged by other advisers for managing comparable mutual funds with similar strategies, the fees Janus Capital charges to other clients, and the expense limitation agreement for each New Fund agreed to by Janus Capital. The Trustees noted the differences in investment style between each New Fund that resulted in differences in fee rates, taking into consideration the peer group selection and the fees charged by those peers.
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of each New Fund increase. The Trustees noted that the proposed annual advisory fee rates, which included potential breakpoints as assets increased, provided the opportunity for shareholders to share the benefits of any economies of scale that may be present. The Trustees also noted that each New Fund is part of the overall Janus funds complex, which means, among other things, that the New Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Janus funds.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates from their relationships with the New Funds. They recognized that two affiliates of Janus Capital separately serve the New Funds as transfer agent and distributor, respectively. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates pursuant to the agreements, and the fees to be paid by each New Fund under those agreements, each New Fund and Janus Capital may potentially benefit from their relationship with each other in other ways. The Trustees considered potential benefits to Janus Capital and its affiliates from Janus Capital’s participation in creditor committees formed to address issues related to investments by each New Fund. They concluded that the success of the New Funds could attract other business to Janus Capital or other Janus funds, and that the success of Janus Capital could enhance Janus Capital’s ability to serve the New Funds.
After full consideration of the above factors, as well as other factors, the Trustees, all of whom are independent Trustees, determined to approve the investment advisory agreement for each New Fund.
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Useful Information About Your Fund Report (unaudited)
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 June 30, 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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Designation Requirements (unaudited)
For federal income tax purposes, the Fund designated the following for the year ended June 30, 2015:
Return of Capital Distributions
Fund | ||||||||||
Janus Global Unconstrained Bond Fund | $ | 7,628,205 | ||||||||
Dividends Received Deduction Percentage
Fund | ||||||||||
Janus Global Unconstrained Bond Fund | 14 | % | ||||||||
Qualified Dividend Income Percentage
Fund | ||||||||||
Janus Global Unconstrained Bond Fund | 13 | % | ||||||||
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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
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Trustees and Officers (unaudited) (continued)
OFFICERS
Term of Office*and | Principal Occupations During the | |||||
Name, Address, and Age | Positions Held with the Trust | Length of Time Served | Past Five Years | |||
William H. Gross 151 Detroit Street Denver, CO 80206 DOB: 1944 | Executive Vice President and Portfolio Manager Janus Global Unconstrained Bond Fund | 10/14-Present | Portfolio Manager for other Janus accounts. Formerly, Managing Director, Chief Investment Officer, and a founding partner of Pacific Investment Management Company LLC (“PIMCO”) (1971-2014). | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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Notes
Janus Investment Fund | 65
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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-0815-93828 | 125-02-93024 08-15 |
Table of Contents
annual report
June 30, 2015
Perkins Large Cap Value Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
Table of Contents
Perkins Large Cap Value Fund
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Table of Contents
Perkins Large Cap Value Fund (unaudited)
FUND SNAPSHOT We believe in the timeless adage of the “power of compounding” and reflect this in our focus on mitigating losses in difficult markets. We invest in securities we believe have favorable reward-to-risk ratios by focusing first on rigorous downside analysis prior to determining upside potential. We seek to outperform both our benchmark and peers over a full market cycle by building diversified portfolios of what we believe to be high-quality, undervalued stocks. | Tom Perkins co-portfolio manager | Kevin Preloger co-portfolio manager |
PERFORMANCE OVERVIEW
During the 12 months ended June 30, 2015, Perkins Large Cap Value Fund’s Class I Shares returned 2.42% while its benchmark, the Russell 1000 Value Index, returned 4.13%. Our holdings in health care and consumer discretionary detracted from relative performance, as did our underweight in financials. Meanwhile, our stock selection in information technology and underweight in utilities and materials contributed to relative performance.
MARKET COMMENTARY
The S&P 500 Index, a broad market measure, reached successive record highs during the period. However, the volatility that marked the end of 2014 carried over into the beginning of 2015 and major U.S. stock indices finished the period mixed. Volume and volatility remained muted for much of the period. Earnings during the latter part of the period largely exceeded expectations, but enthusiasm was tempered as valuations were considered stretched compared to long-term averages. Stocks were also aided by favorable economic data; however, generally speaking, the economic data looked choppy. Employment data including nonfarm payrolls and wages exhibited renewed strength during the spring. Partly as a consequence, key retail sales data hinted that consumers were once again finding their footing as a source of broad economic growth. However, the labor force participation rate remained stubbornly low.
After falling below $50 a barrel, from over $100 a barrel at the beginning of the period, crude oil prices reset within a higher trading band. The dollar also stabilized after its recent strong period of appreciation. Both developments were highlighted by the Federal Reserve’s (Fed) June statement, in which it said a potential increase of the Fed Funds rate during the latter part of the year would be “appropriate.” Chairwoman Janet Yellen also reiterated that any move would be data dependent, thoughtful and measured. However, we remain cautious about the impact of current monetary policy as it gets set to unwind. Negative sentiment emanating from Europe – centering on Greece’s ability to meet its debt obligations – impacted U.S. shares late in June. Previous high fliers were especially impacted.
DETRACTORS
Royal Dutch Shell is an oil and gas super-major based in the UK. Following a series of operational missteps over the past few years, the new CEO 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 weaker operating results as lower commodity prices hurt upstream revenues and higher exploration expenses weighed on profits. The stock was also hurt by the announcement of the company’s acquisition of BG Group. Although we trimmed our holdings during the period, we believe the company’s integrated business mix, defensive balance sheet, strong dividend yield and low valuation limit our downside.
Noble Energy Inc. is a global independent energy exploration and production company with U.S. assets in the Rocky Mountains, Appalachia, the Gulf of Mexico as well as international operations in offshore Israel and West Africa. Shares of the company suffered when the precipitous fall in crude oil prices at the end of 2014 drove a sell-off across the entire energy complex. The stock also traded lower as Israeli antitrust authorities announced a review of a previous regulatory deal that Noble and its partners signed with the Israeli government. We sold our position.
Ensco is a global offshore contract drilling company with a geographically diverse fleet of new ultra-deep water rigs and premium jack-up rigs. After underperforming in 2014 amid softening day rates and rig utilization, sustained weakness in crude oil prices continued to weigh on the stock. Furthermore, the company took a $1.5 billion noncash impairment charge on some of its floaters in 2014 as the book value of these rigs declined given
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Perkins Large Cap Value Fund (unaudited)
challenging market conditions. We sold our holdings during the period.
CONTRIBUTORS
Zoetis, an animal health company, contributed to performance during the period. A spin-off from Pfizer, Zoetis develops animal health medicines and vaccines, with a focus on livestock and companion animals. The company’s products are sold in North America, Europe, Africa, Asia, Australia and Latin America. In addition, the drug maker has an approved vaccine for swine virus, which is expected to provide a boost to sales and earnings this year. We trimmed some of our position in the period on price strength, which reduced the reward/risk relationship.
Global pharmaceutical company Pfizer also contributed to performance. Shares of the company outperformed during the period 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 to earnings. The company has continued to unlock shareholder value by divesting noncore businesses over the past few years. Pfizer remains one of the largest holdings in the Fund as the company continues to execute on maximizing shareholder value, in our view.
CVS Health Corporation reported near the end of 2014 that it had uncharacteristic negative same-store sales due to the drug store chain removing tobacco products from its locations. However, this was offset by better pharmacy benefit manager sales as the company took market share from its main competitor. The stock also benefited as the company reported stronger-than-expected 2015 first quarter earnings and announced an acquisition of pharmacy services provider Omnicare. While still maintaining a position, we sold some of our holdings on the rally in the shares during the period.
MARKET OUTLOOK
As we look ahead, the factors that fueled the market continue to be intact, mainly loose monetary policy on a global basis. However, the Fed has clearly telegraphed its intention, and has initiated the process, of slowly reducing the amount of liquidity injected into the system and has stated its preference to raise interest rates, “not now, but soon.” Of course this will be dependent on both inflation and jobs data. Some of the recent economic data has been mixed, with first quarter GDP contracting and expectations for the second quarter in the 2% range – far from rapid growth. Meanwhile, nonfarm payrolls continue to increase without much wage inflation, but the labor force participation rate remains stuck at near-record lows. The odds of miscommunication from the Fed would appear to be high as it begins to transition away from policy accommodation.
Given this backdrop, the odds would seem to favor increased market volatility. As valuations remain at the upper end of historical ranges, and thus with little room for error, we continue to remain vigilant about the potential for downside risk. Complacency has set into investor psychology as the S&P 500 Index, a broad market measure, has gone almost four years without a 10% correction, an unusually long time. Given the low level of interest rates, it can be argued that the market is fairly valued based on the S&P 500 trading at 17.4x 2015 estimated earnings. However, based on the Shiller P/E ratio (a price-to-earnings ratio which incorporates inflation adjusted earnings over the past 10 years) the S&P 500 is trading at 27x. This is well above its historical mean of 15.95x and significantly above its average going back to 1881. To put this into context, other instances when this valuation metric was at this level, or higher, included 1929, 2000 and 2007. A potential headwind for the sustainability of the current P/E multiple is corporate profits. In the first quarter, S&P 500 companies delivered paltry earnings growth of 0.80% compared to the same period a year ago. The forecast for the second quarter is for a decline of 4.5%. Simply put, “bad news” has been tolerated by the equity market because of confidence in the support of monetary policy. Thus, we continue our focus on building a portfolio of high quality stocks that we believe will minimize risk should the time come that the equity market views “bad news” as truly bad news.
The Fund’s sector positioning did not materially change. Health care and consumer staples remain overweight sectors on a relative basis. Conversely, our underweight sectors include energy, basic materials and utilities. Uncertainties over Greece, the economic slowdown and stock market volatility in China, assorted geopolitical threats, as well as the growth trajectory of the U.S. economy all are factors that lead us to be cautious given equity valuations. In conclusion, we believe our portfolio of what we consider high-quality stocks will hold up better relative to the overall market should volatility appear. Higher volatility should present us with opportunities to purchase new stocks where the valuation and reward-to-risk ratios are more compelling.
Thank you for your continued investment with us in the Perkins Large Cap Value Fund.
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(unaudited)
Perkins Large Cap Value Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Zoetis, Inc. | 0.51% | |||
Pfizer, Inc. | 0.46% | |||
CVS Health Corp. | 0.40% | |||
American International Group, Inc. | 0.39% | |||
Target Corp. | 0.31% |
5 Bottom Performers – Holdings
Contribution | ||||
Royal Dutch Shell PLC (ADR) | –0.57% | |||
Noble Energy, Inc. | –0.42% | |||
Ensco PLC – Class A | –0.42% | |||
Anadarko Petroleum Corp. | –0.34% | |||
Schlumberger, Ltd. (U.S. Shares) | –0.32% |
5 Top Performers – Sectors*
Fund Weighting | Russell 1000® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Information Technology | 0.35% | 8.55% | 9.31% | |||||||||
Utilities | 0.33% | 1.53% | 6.18% | |||||||||
Energy | 0.24% | 8.50% | 11.88% | |||||||||
Materials | 0.10% | 0.37% | 3.19% | |||||||||
Telecommunication Services | 0.05% | 3.42% | 2.18% |
5 Bottom Performers – Sectors*
Fund Weighting | Russell 1000® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Health Care | –0.67% | 22.52% | 13.98% | |||||||||
Financials | –0.56% | 22.71% | 29.42% | |||||||||
Consumer Discretionary | –0.47% | 7.94% | 6.49% | |||||||||
Other** | –0.19% | 5.07% | 0.00% | |||||||||
Consumer Staples | –0.11% | 10.01% | 7.17% |
Security contribution to performance is measured by using an algorithm that multiplies the daily performance of each security with the previous day’s ending weight in the portfolio and is gross of advisory fees. Fixed income securities and certain equity securities, such as private placements and some share classes of equity securities, are excluded. | ||
* | Based on sector classification according to the Global Industry Classification Standard (“GICS”) codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
** | Not a GICS classified sector. |
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Perkins Large Cap Value Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of June 30, 2015
Procter & Gamble Co. Household Products | 3.2% | |||
Merck & Co., Inc. Pharmaceuticals | 3.1% | |||
American International Group, Inc. Insurance | 3.0% | |||
Berkshire Hathaway, Inc. – Class B Diversified Financial Services | 2.4% | |||
Johnson & Johnson Pharmaceuticals | 2.3% | |||
14.0% |
Asset Allocation – (% of Net Assets)
As of June 30, 2015
Top Country Allocations – Long Positions (% of Investment Securities)
As of June 30, 2015
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(unaudited)
Performance
Average Annual Total Return – for the periods ended June 30, 2015 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||||
One | Five | Since | Total Annual Fund | Net Annual Fund | |||||||
Year | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Perkins Large Cap Value Fund – Class A Shares | |||||||||||
NAV | 2.14% | 13.27% | 12.66% | 0.90% | 0.85% | ||||||
MOP | –3.73% | 11.93% | 11.64% | ||||||||
Perkins Large Cap Value Fund – Class C Shares | |||||||||||
NAV | 1.35% | 12.44% | 11.83% | 1.72% | 1.67% | ||||||
CDSC | 0.40% | 12.44% | 11.83% | ||||||||
Perkins Large Cap Value Fund – Class D Shares(1) | 2.32% | 13.46% | 12.63% | 0.83% | 0.78% | ||||||
Perkins Large Cap Value Fund – Class I Shares | 2.42% | 13.63% | 13.00% | 0.64% | 0.60% | ||||||
Perkins Large Cap Value Fund – Class N Shares | 2.46% | 13.63% | 13.00% | 0.64% | 0.60% | ||||||
Perkins Large Cap Value Fund – Class S Shares | 1.95% | 13.15% | 12.51% | 1.15% | 1.12% | ||||||
Perkins Large Cap Value Fund – Class T Shares | 2.20% | 13.38% | 12.67% | 0.89% | 0.85% | ||||||
Russell 1000® Value Index | 4.13% | 16.50% | 14.70% | ||||||||
Morningstar Quartile – Class I Shares | 3rd | 4th | 3rd | ||||||||
Morningstar Ranking – based on total returns for Large Value Funds | 929/1,429 | 1,031/1,225 | 912/1,215 | ||||||||
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
Perkins Large Cap Value Fund (unaudited)
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
This Fund has a performance-based management fee that may adjust up or down based on the Fund’s performance.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility, lower liquidity and differing financial and information reporting standards, all of which are magnified in emerging markets.
The Fund will normally invest at least 80% of its net assets, measured at the time of purchase, in the type of securities described by its name.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Class A Shares, Class C Shares, Class I Shares, and Class S Shares commenced operations on July 6, 2009, after the reorganization of each class of the predecessor fund into corresponding shares of the Fund. Performance shown for each class for periods prior to July 6, 2009, reflects the historical performance of each corresponding class of the predecessor fund prior to the reorganization, calculated using the fees and expenses of the corresponding class of the predecessor fund respectively, net of any applicable fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010. Performance shown for the periods July 6, 2009 to February 16, 2010, reflects the performance of the Fund’s Class I Shares, calculated using the fees and expenses of Class D Shares, without the effect of any fee and expense limitations or waivers. Performance shown for the periods prior to July 6, 2009, reflects the historical performance of the predecessor fund’s Class I Shares prior to the reorganization of Class I Shares of the predecessor fund into Class I Shares of the Fund, calculated using the fees and expenses of Class D Shares, without the effect of any fee and expense limitations or waivers.
Class N Shares of the Fund commenced operations on May 31, 2012. Performance shown for periods prior to May 31, 2012, reflects the historical performance of the Fund’s Class I Shares, calculated using the fees and expenses of Class I Shares, net of any applicable fee and expense limitations or waivers.
Class T Shares commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the historical performance of the predecessor fund’s Class I Shares, calculated using the fees and expenses of Class T Shares, without the effect of any fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 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 – December 31, 2008 | |
(1) | Closed to certain new investors. |
6 | JUNE 30, 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 | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 983.60 | $ | 4.62 | $ | 1,000.00 | $ | 1,020.13 | $ | 4.71 | 0.94% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 980.30 | $ | 3.93 | $ | 1,000.00 | $ | 1,020.83 | $ | 4.01 | 0.80% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 984.70 | $ | 3.74 | $ | 1,000.00 | $ | 1,021.03 | $ | 3.81 | 0.76% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 984.70 | $ | 3.69 | $ | 1,000.00 | $ | 1,021.08 | $ | 3.76 | 0.75% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 985.30 | $ | 3.05 | $ | 1,000.00 | $ | 1,021.72 | $ | 3.11 | 0.62% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 983.10 | $ | 5.46 | $ | 1,000.00 | $ | 1,019.29 | $ | 5.56 | 1.11% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 984.10 | $ | 4.28 | $ | 1,000.00 | $ | 1,020.48 | $ | 4.36 | 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 181/365 (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
Perkins Large Cap Value Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Common Stocks – 94.0% | ||||||||||
Aerospace & Defense – 3.9% | ||||||||||
18,499 | Honeywell International, Inc. | $ | 1,886,343 | |||||||
6,298 | Precision Castparts Corp. | 1,258,781 | ||||||||
16,443 | Rockwell Collins, Inc. | 1,518,511 | ||||||||
16,700 | United Technologies Corp. | 1,852,531 | ||||||||
6,516,166 | ||||||||||
Beverages – 4.0% | ||||||||||
58,825 | Coca-Cola Enterprises, Inc. | 2,555,358 | ||||||||
17,600 | Molson Coors Brewing Co. – Class B | 1,228,656 | ||||||||
31,656 | PepsiCo, Inc. | 2,954,771 | ||||||||
6,738,785 | ||||||||||
Biotechnology – 0.5% | ||||||||||
5,259 | Amgen, Inc. | 807,362 | ||||||||
Capital Markets – 0.7% | ||||||||||
15,886 | State Street Corp. | 1,223,222 | ||||||||
Commercial Banks – 11.8% | ||||||||||
52,023 | CIT Group, Inc. | 2,418,549 | ||||||||
59,887 | Citigroup, Inc. | 3,308,158 | ||||||||
168,937 | Fifth Third Bancorp | 3,517,268 | ||||||||
36,971 | JPMorgan Chase & Co. | 2,505,155 | ||||||||
28,484 | PNC Financial Services Group, Inc. | 2,724,495 | ||||||||
39,499 | US Bancorp | 1,714,257 | ||||||||
66,795 | Wells Fargo & Co. | 3,756,551 | ||||||||
19,944,433 | ||||||||||
Commercial Services & Supplies – 2.6% | ||||||||||
41,073 | Republic Services, Inc. | 1,608,830 | ||||||||
71,573 | Tyco International PLC | 2,754,129 | ||||||||
4,362,959 | ||||||||||
Communications Equipment – 1.2% | ||||||||||
38,568 | Cisco Systems, Inc. | 1,059,077 | ||||||||
16,653 | QUALCOMM, Inc. | 1,042,978 | ||||||||
2,102,055 | ||||||||||
Consumer Finance – 1.1% | ||||||||||
9,691 | American Express Co. | 753,184 | ||||||||
18,348 | Discover Financial Services | 1,057,212 | ||||||||
1,810,396 | ||||||||||
Diversified Financial Services – 2.4% | ||||||||||
30,400 | Berkshire Hathaway, Inc. – Class B* | 4,137,744 | ||||||||
Diversified Telecommunication Services – 1.2% | ||||||||||
44,207 | Verizon Communications, Inc. | 2,060,488 | ||||||||
Electric Utilities – 1.5% | ||||||||||
83,241 | PPL Corp. | 2,453,112 | ||||||||
Electrical Equipment – 0.9% | ||||||||||
26,712 | Emerson Electric Co. | 1,480,646 | ||||||||
Energy Equipment & Services – 1.1% | ||||||||||
22,507 | Schlumberger, Ltd. (U.S. Shares) | 1,939,878 | ||||||||
Food & Staples Retailing – 3.1% | ||||||||||
18,643 | CVS Health Corp. | 1,955,278 | ||||||||
25,335 | Sysco Corp. | 914,594 | ||||||||
33,695 | Wal-Mart Stores, Inc. | 2,389,986 | ||||||||
5,259,858 | ||||||||||
Food Products – 3.5% | ||||||||||
38,579 | General Mills, Inc. | 2,149,622 | ||||||||
14,969 | Hershey Co. | 1,329,696 | ||||||||
57,250 | Unilever PLC (ADR) | 2,459,460 | ||||||||
5,938,778 | ||||||||||
Health Care Equipment & Supplies – 2.8% | ||||||||||
26,841 | Baxter International, Inc. | 1,876,991 | ||||||||
15,200 | Medtronic PLC | 1,126,320 | ||||||||
18,597 | Stryker Corp. | 1,777,315 | ||||||||
4,780,626 | ||||||||||
Health Care Providers & Services – 2.3% | ||||||||||
19,180 | Laboratory Corp. of America Holdings* | 2,325,000 | ||||||||
6,957 | McKesson Corp. | 1,564,003 | ||||||||
3,889,003 | ||||||||||
Household Products – 3.2% | ||||||||||
69,928 | Procter & Gamble Co. | 5,471,167 | ||||||||
Industrial Conglomerates – 1.2% | ||||||||||
77,372 | General Electric Co. | 2,055,774 | ||||||||
Information Technology Services – 0.6% | ||||||||||
10,427 | Accenture PLC – Class A (U.S. Shares) | 1,009,125 | ||||||||
Insurance – 6.0% | ||||||||||
20,800 | Allstate Corp. | 1,349,296 | ||||||||
81,411 | American International Group, Inc. | 5,032,828 | ||||||||
15,519 | Chubb Corp. | 1,476,478 | ||||||||
40,756 | Marsh & McLennan Cos., Inc. | 2,310,865 | ||||||||
10,169,467 | ||||||||||
Internet Software & Services – 1.3% | ||||||||||
4,136 | Google, Inc. – Class A* | 2,233,605 | ||||||||
Life Sciences Tools & Services – 2.4% | ||||||||||
65,884 | Agilent Technologies, Inc. | 2,541,805 | ||||||||
12,000 | Thermo Fisher Scientific, Inc. | 1,557,120 | ||||||||
4,098,925 | ||||||||||
Media – 5.1% | ||||||||||
35,015 | CBS Corp. – Class B | 1,943,333 | ||||||||
27,775 | Comcast Corp. – Class A | 1,670,389 | ||||||||
30,458 | Omnicom Group, Inc. | 2,116,526 | ||||||||
24,853 | Time Warner, Inc. | 2,172,401 | ||||||||
5,882 | Walt Disney Co. | 671,371 | ||||||||
8,574,020 | ||||||||||
Multiline Retail – 0.8% | ||||||||||
15,516 | Target Corp. | 1,266,571 | ||||||||
Oil, Gas & Consumable Fuels – 6.9% | ||||||||||
32,131 | Anadarko Petroleum Corp. | 2,508,146 | ||||||||
11,483 | Chevron Corp. | 1,107,765 | ||||||||
14,700 | Cimarex Energy Co. | 1,621,557 | ||||||||
55,188 | Enterprise Products Partners LP | 1,649,569 | ||||||||
38,249 | Occidental Petroleum Corp. | 2,974,625 | ||||||||
30,225 | Royal Dutch Shell PLC (ADR) | 1,723,127 | ||||||||
11,584,789 | ||||||||||
Pharmaceuticals – 12.1% | ||||||||||
19,250 | AbbVie, Inc. | 1,293,407 | ||||||||
40,176 | Johnson & Johnson | 3,915,553 | ||||||||
90,977 | Merck & Co., Inc. | 5,179,321 | ||||||||
33,543 | Novartis AG (ADR) | 3,298,619 | ||||||||
114,615 | Pfizer, Inc. | 3,843,041 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
8 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Pharmaceuticals – (continued) | ||||||||||
17,026 | Teva Pharmaceutical Industries, Ltd. (ADR) | $ | 1,006,236 | |||||||
39,591 | Zoetis, Inc. | 1,909,078 | ||||||||
20,445,255 | ||||||||||
Real Estate Investment Trusts (REITs) – 1.1% | ||||||||||
60,755 | Weyerhaeuser Co. | 1,913,783 | ||||||||
Road & Rail – 1.7% | ||||||||||
58,213 | CSX Corp. | 1,900,655 | ||||||||
9,368 | Union Pacific Corp. | 893,426 | ||||||||
2,794,081 | ||||||||||
Semiconductor & Semiconductor Equipment – 0.7% | ||||||||||
17,132 | Analog Devices, Inc. | 1,099,617 | ||||||||
Software – 3.8% | ||||||||||
59,372 | Microsoft Corp. | 2,621,274 | ||||||||
95,840 | Oracle Corp. | 3,862,352 | ||||||||
6,483,626 | ||||||||||
Technology Hardware, Storage & Peripherals – 0.8% | ||||||||||
52,329 | EMC Corp. | 1,380,962 | ||||||||
Wireless Telecommunication Services – 1.7% | ||||||||||
78,318 | Vodafone Group PLC (ADR) | 2,854,691 | ||||||||
Total Common Stocks (cost $126,506,696) | 158,880,969 | |||||||||
Repurchase Agreements – 6.0% | ||||||||||
$10,100,000 | Undivided interest of 5.0% in a joint repurchase agreement (principal amount $200,300,000 with a maturity value of $200,300,556) with ING Financial Markets LLC, 0.1000%, dated 6/30/15, maturing 7/1/15, to be repurchased at $10,100,028 collateralized by $220,243,953 in U.S. Treasuries, 0% – 4.2500%, 10/31/15 – 11/15/43, with a value of $204,308,612 (cost $10,100,000) | 10,100,000 | ||||||||
Total Investments (total cost $136,606,696) – 100.0% | 168,980,969 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0% | 15,705 | |||||||||
Net Assets – 100% | $ | 168,996,674 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States | $ | 157,638,836 | 93 | .3% | ||||
United Kingdom | 5,314,151 | 3 | .1 | |||||
Switzerland | 3,298,619 | 2 | .0 | |||||
Netherlands | 1,723,127 | 1 | .0 | |||||
Israel | 1,006,236 | 0 | .6 | |||||
Total | $ | 168,980,969 | 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
Russell 1000® Value Index | Measures the performance of those Russell 1000® Index companies with lower price-to-book ratios and lower forecasted growth values. | |
S&P 500® Index | 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. |
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 June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Perkins Large Cap Value Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | $ | 158,880,969 | $ | – | $ | – | |||||
Repurchase Agreements | – | 10,100,000 | – | ||||||||
Total Assets | $ | 158,880,969 | $ | 10,100,000 | $ | – | |||||
10 | JUNE 30, 2015
Table of Contents
Statement of Assets and Liabilities
As of June 30, 2015 | Perkins Large Cap Value Fund | |||
Assets: | ||||
Investments, at cost(1) | $ | 136,606,696 | ||
Investments, at value | $ | 158,880,969 | ||
Repurchase agreements, at value | 10,100,000 | |||
Cash | 13,937 | |||
Non-interested Trustees’ deferred compensation | 3,376 | |||
Receivables: | ||||
Investments sold | 898,934 | |||
Fund shares sold | 170,040 | |||
Dividends | 408,235 | |||
Interest | 28 | |||
Other assets | 197 | |||
Total Assets | 170,475,716 | |||
Liabilities: | ||||
Payables: | ||||
Investments purchased | 1,281,258 | |||
Fund shares repurchased | 56,555 | |||
Advisory fees | 59,701 | |||
Fund administration fees | 1,356 | |||
Transfer agent fees and expenses | 19,804 | |||
12b-1 Distribution and shareholder servicing fees | 3,334 | |||
Non-interested Trustees’ fees and expenses | 1,105 | |||
Non-interested Trustees’ deferred compensation fees | 3,376 | |||
Accrued expenses and other payables | 52,553 | |||
Total Liabilities | 1,479,042 | |||
Net Assets | $ | 168,996,674 |
See Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Statement of Assets and Liabilities (continued)
As of June 30, 2015 | Perkins Large Cap Value Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 131,915,386 | ||
Undistributed net investment income/(loss) | 1,221,147 | |||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | 3,485,868 | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 32,374,273 | |||
Total Net Assets | $ | 168,996,674 | ||
Net Assets - Class A Shares | $ | 3,951,747 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 244,478 | |||
Net Asset Value Per Share(2) | $ | 16.16 | ||
Maximum Offering Price Per Share(3) | $ | 17.15 | ||
Net Assets - Class C Shares | $ | 2,924,703 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 182,880 | |||
Net Asset Value Per Share(2) | $ | 15.99 | ||
Net Assets - Class D Shares | $ | 38,279,621 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,379,958 | |||
Net Asset Value Per Share | $ | 16.08 | ||
Net Assets - Class I Shares | $ | 40,778,583 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,526,607 | |||
Net Asset Value Per Share | $ | 16.14 | ||
Net Assets - Class N Shares | $ | 78,999,488 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 4,898,445 | |||
Net Asset Value Per Share | $ | 16.13 | ||
Net Assets - Class S Shares | $ | 258,221 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 15,877 | |||
Net Asset Value Per Share | $ | 16.26 | ||
Net Assets - Class T Shares | $ | 3,804,311 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 236,971 | |||
Net Asset Value Per Share | $ | 16.05 |
(1) | Includes cost of repurchase agreements of $10,100,000. | |
(2) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(3) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements.
12 | JUNE 30, 2015
Table of Contents
Statement of Operations
Perkins Large Cap | ||||
For the year ended June 30, 2015 | Value Fund | |||
Investment Income: | ||||
Interest | $ | 3,892 | ||
Dividends | 3,537,734 | |||
Other income | 112 | |||
Foreign tax withheld | (53,801) | |||
Total Investment Income | 3,487,937 | |||
Expenses: | ||||
Advisory fees | 814,473 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 9,515 | |||
Class C Shares | 18,390 | |||
Class S Shares | 638 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 48,501 | |||
Class S Shares | 638 | |||
Class T Shares | 10,126 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 1,900 | |||
Class C Shares | 2,297 | |||
Class I Shares | 27,783 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 471 | |||
Class C Shares | 585 | |||
Class D Shares | 7,883 | |||
Class I Shares | 1,690 | |||
Class N Shares | 210 | |||
Shareholder reports expense | 16,736 | |||
Registration fees | 117,358 | |||
Custodian fees | 4,412 | |||
Professional fees | 48,862 | |||
Non-interested Trustees’ fees and expenses | 3,805 | |||
Fund administration fees | 14,665 | |||
Other expenses | 15,961 | |||
Total Expenses | 1,166,899 | |||
Less: Excess Expense Reimbursement | (44,974) | |||
Net Expenses | 1,121,925 | |||
Net Investment Income/(Loss) | 2,366,012 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 7,092,575 | |||
Total Net Realized Gain/(Loss) on Investments | 7,092,575 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (6,803,322) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (6,803,322) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 2,655,265 |
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Statements of Changes in Net Assets
Perkins Large Cap | ||||||||
Value Fund | ||||||||
For each year ended June 30 | 2015 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 2,366,012 | $ | 2,530,928 | ||||
Net realized gain/(loss) on investments | 7,092,575 | 8,063,356 | ||||||
Change in unrealized net appreciation/depreciation | (6,803,322) | 14,729,864 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 2,655,265 | 25,324,148 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income | ||||||||
Class A Shares | (49,371) | (33,203) | ||||||
Class C Shares | (22,347) | (12,752) | ||||||
Class D Shares | (542,195) | (447,705) | ||||||
Class I Shares | (660,473) | (606,845) | ||||||
Class N Shares | (1,271,878) | (597,499) | ||||||
Class S Shares | (3,205) | (687) | ||||||
Class T Shares | (52,796) | (37,632) | ||||||
Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | (184,022) | (319,660) | ||||||
Class C Shares | (176,155) | (297,634) | ||||||
Class D Shares | (2,050,146) | (3,150,880) | ||||||
Class I Shares | (2,224,495) | (3,917,283) | ||||||
Class N Shares | (4,205,651) | (3,881,801) | ||||||
Class S Shares | (13,057) | (19,881) | ||||||
Class T Shares | (208,456) | (287,842) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (11,664,247) | (13,611,304) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 1,010,625 | 666,819 | ||||||
Class C Shares | 665,788 | 787,502 | ||||||
Class D Shares | 7,990,442 | 10,187,073 | ||||||
Class I Shares | 482,658 | 751,334 | ||||||
Class N Shares | 37,604,665 | 2,715,165 | ||||||
Class S Shares | 4,000 | – | ||||||
Class T Shares | 940,616 | 1,200,003 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 182,281 | 271,005 | ||||||
Class C Shares | 171,850 | 264,949 | ||||||
Class D Shares | 2,568,390 | 3,572,796 | ||||||
Class I Shares | 2,723,685 | 4,286,982 | ||||||
Class N Shares | 5,477,529 | 4,479,300 | ||||||
Class S Shares | 16,262 | 20,568 | ||||||
Class T Shares | 259,198 | 322,293 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (683,245) | (1,016,789) | ||||||
Class C Shares | (1,037,823) | (1,065,967) | ||||||
Class D Shares | (12,238,411) | (7,133,206) | ||||||
Class I Shares | (8,227,418) | (1,915,597) | ||||||
Class N Shares | (7,910,025) | (11,823,825) | ||||||
Class S Shares | – | (292,320) | ||||||
Class T Shares | (1,315,041) | (770,424) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | 28,686,026 | 5,507,661 | ||||||
Net Increase/(Decrease) in Net Assets | 19,677,044 | 17,220,505 | ||||||
Net Assets: | ||||||||
Beginning of period | 149,319,630 | 132,099,125 | ||||||
End of period | $ | 168,996,674 | $ | 149,319,630 | ||||
Undistributed Net Investment Income/(Loss) | $ | 1,221,147 | $ | 1,562,751 |
See Notes to Financial Statements.
14 | JUNE 30, 2015
Table of Contents
Financial Highlights
Class A Shares
Perkins Large Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $16.90 | $15.62 | $13.44 | $14.21 | $11.56 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.21(1) | 0.28(1) | 0.15 | 0.12 | 0.13 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.18 | 2.64 | 2.48 | (0.07) | 2.87 | |||||||||||||||||
Total from Investment Operations | 0.39 | 2.92 | 2.63 | 0.05 | 3.00 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.24) | (0.15) | (0.18) | (0.14) | (0.03) | |||||||||||||||||
Distributions (from capital gains) | (0.89) | (1.49) | (0.27) | (0.68) | (0.32) | |||||||||||||||||
Total Dividends and Distributions | (1.13) | (1.64) | (0.45) | (0.82) | (0.35) | |||||||||||||||||
Net Asset Value, End of Period | $16.16 | $16.90 | $15.62 | $13.44 | $14.21 | |||||||||||||||||
Total Return | 2.14% | 19.70% | 19.96% | 0.75% | 26.21% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $3,952 | $3,603 | $3,390 | $2,977 | $2,265 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $3,806 | $3,600 | $3,182 | $2,598 | $1,237 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.95% | 0.90% | 1.15% | 1.13% | 1.18% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.93% | 0.81% | 1.14% | 1.13% | 1.18% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.25% | 1.71% | 1.05% | 1.16% | 1.40% | |||||||||||||||||
Portfolio Turnover Rate | 39% | 34% | 45% | 52% | 43% |
Class C Shares
Perkins Large Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $16.67 | $15.44 | $13.28 | $14.00 | $11.48 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.15(1) | 0.16(1) | 0.06 | 0.04 | 0.05 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.17 | 2.62 | 2.44 | (0.08) | 2.82 | |||||||||||||||||
Total from Investment Operations | 0.32 | 2.78 | 2.50 | (0.04) | 2.87 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.11) | (0.06) | (0.07) | –(2) | (0.03) | |||||||||||||||||
Distributions (from capital gains) | (0.89) | (1.49) | (0.27) | (0.68) | (0.32) | |||||||||||||||||
Total Dividends and Distributions | (1.00) | (1.55) | (0.34) | (0.68) | (0.35) | |||||||||||||||||
Net Asset Value, End of Period | $15.99 | $16.67 | $15.44 | $13.28 | $14.00 | |||||||||||||||||
Total Return | 1.80% | 18.92% | 19.08% | 0.01% | 25.21% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $2,925 | $3,252 | $3,014 | $2,629 | $2,797 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $3,243 | $3,249 | $2,740 | $2,157 | $2,070 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.29% | 1.57% | 1.80% | 1.92% | 1.96% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.27% | 1.55% | 1.80% | 1.92% | 1.96% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.89% | 0.98% | 0.38% | 0.34% | 0.31% | |||||||||||||||||
Portfolio Turnover Rate | 39% | 34% | 45% | 52% | 43% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. | |
(2) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Financial Highlights (continued)
Class D Shares
Perkins Large Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $16.79 | $15.57 | $13.39 | $14.15 | $11.58 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.23(1) | 0.28(1) | 0.18 | 0.17 | 0.18 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.19 | 2.64 | 2.48 | (0.09) | 2.85 | |||||||||||||||||
Total from Investment Operations | 0.42 | 2.92 | 2.66 | 0.08 | 3.03 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.24) | (0.21) | (0.21) | (0.16) | (0.14) | |||||||||||||||||
Distributions (from capital gains) | (0.89) | (1.49) | (0.27) | (0.68) | (0.32) | |||||||||||||||||
Total Dividends and Distributions | (1.13) | (1.70) | (0.48) | (0.84) | (0.46) | |||||||||||||||||
Net Asset Value, End of Period | $16.08 | $16.79 | $15.57 | $13.39 | $14.15 | |||||||||||||||||
Total Return | 2.32% | 19.77% | 20.25% | 0.96% | 26.41% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $38,280 | $41,764 | $32,031 | $17,997 | $15,001 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $40,418 | $36,849 | $24,538 | $16,727 | $7,705 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.80% | 0.83% | 0.84% | 0.95% | 0.92% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.76% | 0.80% | 0.84% | 0.95% | 0.92% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.41% | 1.74% | 1.36% | 1.33% | 1.26% | |||||||||||||||||
Portfolio Turnover Rate | 39% | 34% | 45% | 52% | 43% |
Class I Shares
Perkins Large Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $16.86 | $15.62 | $13.42 | $14.17 | $11.58 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.25(1) | 0.31(1) | 0.31 | 0.35 | 0.19 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.18 | 2.65 | 2.37 | (0.25) | 2.85 | |||||||||||||||||
Total from Investment Operations | 0.43 | 2.96 | 2.68 | 0.10 | 3.04 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.26) | (0.23) | (0.21) | (0.17) | (0.13) | |||||||||||||||||
Distributions (from capital gains) | (0.89) | (1.49) | (0.27) | (0.68) | (0.32) | |||||||||||||||||
Total Dividends and Distributions | (1.15) | (1.72) | (0.48) | (0.85) | (0.45) | |||||||||||||||||
Net Asset Value, End of Period | $16.14 | $16.86 | $15.62 | $13.42 | $14.17 | |||||||||||||||||
Total Return | 2.42% | 19.98% | 20.43% | 1.13% | 26.57% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $40,779 | $47,672 | $40,943 | $47,846 | $112,360 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $43,597 | $44,830 | $43,013 | $106,448 | $91,088 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.71% | 0.64% | 0.71% | 0.77% | 0.84% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.68% | 0.62% | 0.71% | 0.77% | 0.84% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.48% | 1.91% | 1.47% | 1.53% | 1.45% | |||||||||||||||||
Portfolio Turnover Rate | 39% | 34% | 45% | 52% | 43% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Financial Statements.
16 | JUNE 30, 2015
Table of Contents
Class N Shares
Perkins Large Cap Value Fund | ||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
Net Asset Value, Beginning of Period | $16.85 | $15.61 | $13.43 | $12.91 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.26(2) | 0.31(2) | 0.16 | –(3) | ||||||||||||||
Net realized and unrealized gain/(loss) | 0.18 | 2.65 | 2.53 | 0.52 | ||||||||||||||
Total from Investment Operations | 0.44 | 2.96 | 2.69 | 0.52 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | (0.27) | (0.23) | (0.24) | – | ||||||||||||||
Distributions (from capital gains) | (0.89) | (1.49) | (0.27) | – | ||||||||||||||
Total Dividends and Distributions | (1.16) | (1.72) | (0.51) | – | ||||||||||||||
Net Asset Value, End of Period | $16.13 | $16.85 | $15.61 | $13.43 | ||||||||||||||
Total Return* | 2.46% | 19.98% | 20.45% | 4.03% | ||||||||||||||
Net Assets, End of Period (in thousands) | $78,999 | $48,684 | $49,186 | $66,766 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $65,449 | $46,719 | $69,975 | $48,137 | ||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||
Ratio of Gross Expenses** | 0.64% | 0.64% | 0.68% | 0.72% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.62% | 0.62% | 0.68% | 0.72% | ||||||||||||||
Ratio of Net Investment Income/(Loss)** | 1.55% | 1.88% | 1.52% | 0.66% | ||||||||||||||
Portfolio Turnover Rate | 39% | 34% | 45% | 52% |
Class S Shares
Perkins Large Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $17.01 | $15.62 | $13.41 | $14.15 | $11.56 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.18(2) | 0.22(2) | 0.27 | 0.14 | 0.14 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.18 | 2.71 | 2.34 | (0.10) | 2.84 | |||||||||||||||||
Total from Investment Operations | 0.36 | 2.93 | 2.61 | 0.04 | 2.98 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.22) | (0.05) | (0.13) | (0.10) | (0.07) | |||||||||||||||||
Distributions (from capital gains) | (0.89) | (1.49) | (0.27) | (0.68) | (0.32) | |||||||||||||||||
Total Dividends and Distributions | (1.11) | (1.54) | (0.40) | (0.78) | (0.39) | |||||||||||||||||
Net Asset Value, End of Period | $16.26 | $17.01 | $15.62 | $13.41 | $14.15 | |||||||||||||||||
Total Return | 1.95% | 19.68% | 19.84% | 0.67% | 26.01% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $258 | $249 | $480 | $680 | $685 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $255 | $327 | $508 | $656 | $685 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.13% | 1.15% | 1.19% | 1.25% | 1.34% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.11% | 0.98% | 1.19% | 1.19% | 1.34% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.06% | 1.32% | 0.98% | 1.08% | 0.97% | |||||||||||||||||
Portfolio Turnover Rate | 39% | 34% | 45% | 52% | 43% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from May 31, 2012 (inception date) through June 30, 2012. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year. | |
(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 T Shares
Perkins Large Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $16.77 | $15.55 | $13.37 | $14.13 | $11.56 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.22(1) | 0.27(1) | 0.17 | 0.16 | 0.17 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.18 | 2.63 | 2.48 | (0.10) | 2.85 | |||||||||||||||||
Total from Investment Operations | 0.40 | 2.90 | 2.65 | 0.06 | 3.02 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.23) | (0.19) | (0.20) | (0.14) | (0.13) | |||||||||||||||||
Distributions (from capital gains) | (0.89) | (1.49) | (0.27) | (0.68) | (0.32) | |||||||||||||||||
Total Dividends and Distributions | (1.12) | (1.68) | (0.47) | (0.82) | (0.45) | |||||||||||||||||
Net Asset Value, End of Period | $16.05 | $16.77 | $15.55 | $13.37 | $14.13 | |||||||||||||||||
Total Return | 2.20% | 19.67% | 20.21% | 0.84% | 26.37% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $3,804 | $4,094 | $3,055 | $2,262 | $2,211 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $4,050 | $3,400 | $2,531 | $2,236 | $1,402 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.89% | 0.89% | 0.94% | 1.00% | 1.05% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.86% | 0.86% | 0.94% | 1.00% | 1.05% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.31% | 1.68% | 1.25% | 1.27% | 1.16% | |||||||||||||||||
Portfolio Turnover Rate | 39% | 34% | 45% | 52% | 43% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Financial Statements.
18 | JUNE 30, 2015
Table of Contents
Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
Perkins Large Cap Value Fund (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in equity securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
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 evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices
Janus Investment Fund | 19
Table of Contents
Notes to Financial Statements (continued)
are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of June 30, 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 year. 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
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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, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
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
Janus Investment Fund | 21
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Notes to Financial Statements (continued)
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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the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following table presents gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see the Fund’s Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
ING Financial Markets LLC | $ | 10,100,000 | $ | – | $ | (10,100,000) | $ | – | ||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
All repurchase agreements are transacted under legally enforceable master repurchase agreements that give the Fund, in the event of default by the counterparty, the right to liquidate securities held and to offset receivables and payables with the counterparty. Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value exceeds the current market value of the repurchase agreements, including accrued interest.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Repurchase Agreements
The Fund and other funds advised by Janus Capital or its affiliates may transfer daily uninvested cash balances into one or more joint trading accounts. Assets in the joint trading accounts are invested in money market instruments and the proceeds are allocated to the participating funds on a pro rata basis.
Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value exceeds the current market value of the repurchase agreements, including accrued interest. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or 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 “base” fee rate prior to any performance adjustment (expressed as an annual rate).
Fund | Base Fee Rate (%) | |||||
Perkins Large Cap 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 Large Cap Value Fund | Russell 1000® Value Index | |||||
The calculation of the performance adjustment applies as follows:
Investment Advisory Fee = Base Fee Rate +/- Performance Adjustment
The investment advisory fee rate paid to Janus Capital by the Fund consists of two components: (1) a base fee
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Notes to Financial Statements (continued)
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 year ended June 30, 2015 is below:
Performance Adjusted | ||||||
Investment Advisory | ||||||
Fund | Fee Rate (%) | |||||
Perkins Large Cap Value Fund | 0.51 | |||||
Perkins Investment Management LLC (“Perkins”) serves as subadviser to the Fund. Perkins (together with its predecessors), has been in the investment management business since 1984 and provides day-to-day management of the Fund’s portfolio operations subject to the general oversight of Janus Capital. Janus Capital owns 100% of Perkins.
Janus Capital pays Perkins a subadvisory fee equal to 50% of the investment advisory fee paid by the Fund to Janus Capital (calculated after any applicable performance fee adjustment, fee waivers, and expense reimbursements). The subadvisory fee paid by Janus Capital to Perkins adjusts up or down based on the Fund’s performance relative to the Fund’s benchmark index over the performance measurement period.
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any performance adjustments to management fees, the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
Perkins Large Cap Value Fund | 0.75 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are 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
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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 $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the year ended June 30, 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 June 30, 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 year ended June 30, 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 (continued)
$279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 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 year ended June 30, 2015, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Perkins Large Cap Value Fund | $ | 2,182 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the year ended June 30, 2015, redeeming shareholders of Class A Shares paid the following CDSCs to Janus Distributors:
Fund (Class A Shares) | CDSC | |||||
Perkins Large Cap Value Fund | $ | 287 | ||||
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the year ended June 30, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Perkins Large Cap Value Fund | $ | 200 | ||||
As of June 30, 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 Large Cap Value Fund - Class A Shares | - | % | - | % | ||||||
Perkins Large Cap Value Fund - Class C Shares | - | - | ||||||||
Perkins Large Cap Value Fund - Class D Shares | - | - | ||||||||
Perkins Large Cap Value Fund - Class I Shares | - | - | ||||||||
Perkins Large Cap Value Fund - Class N Shares | 97 | 45 | ||||||||
Perkins Large Cap Value Fund - Class S Shares | 98 | 0 | ||||||||
Perkins Large Cap Value Fund - Class T Shares | - | - | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
4. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation, derivatives, tax equalization, and foreign currency contract adjustments. 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.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
Perkins Large Cap Value Fund | $ | 1,224,524 | $ | 3,378,669 | $ | – | $ | – | $ | – | $ | (3,377) | $ | 32,481,472 | |||||||||||||||||
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 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 partnerships.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
Perkins Large Cap Value Fund | $ | 136,499,497 | $ | 33,589,977 | $ | (1,108,505) | ||||||||
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. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the year ended June 30, 2015
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Perkins Large Cap Value Fund | $ | 3,135,185 | $ | 8,529,062 | $ | – | $ | – | ||||||||||||||
For the year ended June 30, 2014
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Perkins Large Cap Value Fund | $ | 2,776,337 | $ | 10,834,967 | $ | – | $ | – | ||||||||||||||
Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
Perkins Large Cap Value Fund | $ | 235,122 | $ | (105,351) | $ | (129,771) | ||||||||
Capital has been adjusted by $235,122, including $177,220 of long-term capital gain, for distributions in connection with Fund share redemptions (tax equalization).
5. | Capital Share Transactions |
Perkins Large Cap Value Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 61,055 | 40,929 | ||||||||
Reinvested dividends and distributions | 11,007 | 17,518 | ||||||||
Shares repurchased | (40,710) | (62,400) | ||||||||
Net Increase/(Decrease) in Fund Shares | 31,352 | (3,953) | ||||||||
Shares Outstanding, Beginning of Period | 213,126 | 217,079 | ||||||||
Shares Outstanding, End of Period | 244,478 | 213,126 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 40,476 | 48,889 | ||||||||
Reinvested dividends and distributions | 10,498 | 17,306 | ||||||||
Shares repurchased | (63,231) | (66,272) | ||||||||
Net Increase/(Decrease) in Fund Shares | (12,257) | (77) | ||||||||
Shares Outstanding, Beginning of Period | 195,137 | 195,214 | ||||||||
Shares Outstanding, End of Period | 182,880 | 195,137 |
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Notes to Financial Statements (continued)
Perkins Large Cap Value Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 483,891 | 641,294 | ||||||||
Reinvested dividends and distributions | 156,038 | 232,301 | ||||||||
Shares repurchased | (746,874) | (443,863) | ||||||||
Net Increase/(Decrease) in Fund Shares | (106,945) | 429,732 | ||||||||
Shares Outstanding, Beginning of Period | 2,486,903 | 2,057,171 | ||||||||
Shares Outstanding, End of Period | 2,379,958 | 2,486,903 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 28,982 | 46,977 | ||||||||
Reinvested dividends and distributions | 164,872 | 277,834 | ||||||||
Shares repurchased | (494,088) | (119,014) | ||||||||
Net Increase/(Decrease) in Fund Shares | (300,234) | 205,797 | ||||||||
Shares Outstanding, Beginning of Period | 2,826,841 | 2,621,044 | ||||||||
Shares Outstanding, End of Period | 2,526,607 | 2,826,841 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 2,153,122 | 167,449 | ||||||||
Reinvested dividends and distributions | 332,173 | 290,486 | ||||||||
Shares repurchased | (476,545) | (720,134) | ||||||||
Net Increase/(Decrease) in Fund Shares | 2,008,750 | (262,199) | ||||||||
Shares Outstanding, Beginning of Period | 2,889,695 | 3,151,894 | ||||||||
Shares Outstanding, End of Period | 4,898,445 | 2,889,695 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 237 | – | ||||||||
Reinvested dividends and distributions | 975 | 1,321 | ||||||||
Shares repurchased | – | (17,369) | ||||||||
Net Increase/(Decrease) in Fund Shares | 1,212 | (16,048) | ||||||||
Shares Outstanding, Beginning of Period | 14,665 | 30,713 | ||||||||
Shares Outstanding, End of Period | 15,877 | 14,665 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 57,453 | 74,047 | ||||||||
Reinvested dividends and distributions | 15,766 | 20,969 | ||||||||
Shares repurchased | (80,356) | (47,417) | ||||||||
Net Increase/(Decrease) in Fund Shares | (7,137) | 47,599 | ||||||||
Shares Outstanding, Beginning of Period | 244,108 | 196,509 | ||||||||
Shares Outstanding, End of Period | 236,971 | 244,108 |
6. | Purchases and Sales of Investment Securities |
For the year ended June 30, 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 Large Cap Value Fund | $ | 76,246,210 | $ | 60,272,470 | $ | – | $ | – | ||||||
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7. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of Perkins Large Cap Value Fund:
of Perkins Large Cap Value Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Perkins Large Cap Value Fund (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
30 | JUNE 30, 2015
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (toll free); (ii) on the Fund’s website at janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding the Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through janus.com/proxyvoting and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Fund files its complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Fund’s Form N-Q: (i) is available on the SEC’s website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-0020 (toll free).
APPROVAL OF ADVISORY AGREEMENTS DURING THE PERIOD
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 10, 2014, based on the Trustees’ evaluation of the information provided by Janus Capital, the subadvisers, and the independent fee consultant, as well as other information, the Trustees determined that the overall arrangements between each Fund and Janus Capital and each subadviser, as applicable, were fair and reasonable in light of the nature, extent and quality of the services provided by Janus Capital, its affiliates and the subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting, the Trustees unanimously approved the continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, for the period from either January 1 or February 1, 2015 through January 1 or February 1, 2016, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service
Janus Investment Fund | 31
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Additional Information (unaudited) (continued)
providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
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second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Alternative Funds
• | For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history. |
Value Funds
• | For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. |
• | For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance. |
• | For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. |
Mathematical Funds
• | For INTECH Global Income Managed Volatility Fund (formerly named INTECH Global Dividend Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH International Managed Volatility Fund (formerly named INTECH International Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund (formerly named INTECH U.S. Value Fund), the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For INTECH U.S. Managed Volatility Fund II (formerly named INTECH U.S. Growth Fund), the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Growth and Core Funds
• | For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for |
Janus Investment Fund | 33
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Additional Information (unaudited) (continued)
the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the bottom Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of under-performance, and the steps Janus Capital had taken or was taking to improve performance. |
• | For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and in the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. |
Global and International Funds
• | For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and its limited performance history. |
• | For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and that the performance trend was improving. |
• | For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the first Lipper |
34 | JUNE 30, 2015
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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 June 30, 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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Designation Requirements (unaudited)
For federal income tax purposes, the Fund designated the following for the year ended June 30, 2015:
Capital Gain Distributions
Fund | ||||||||||
Perkins Large Cap Value Fund | $ | 8,706,282 | ||||||||
Dividends Received Deduction Percentage
Fund | ||||||||||
Perkins Large Cap Value Fund | 100 | % | ||||||||
Qualified Dividend Income Percentage
Fund | ||||||||||
Perkins Large Cap Value Fund | 100 | % | ||||||||
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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
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Trustees and Officers (unaudited) (continued)
OFFICERS
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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Notes
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Notes
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Notes
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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-0815-93824 | 125-02-93031 08-15 |
Table of Contents
annual report
June 30, 2015
Perkins Mid Cap Value Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
Table of Contents
Perkins Mid Cap Value Fund
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Perkins Mid Cap Value Fund (unaudited)(closed to certain new investors)
FUND SNAPSHOT We believe in the timeless adage of the “power of compounding” and reflect this in our focus on mitigating losses in difficult markets. We invest in securities we believe have favorable reward-to-risk ratios by focusing first on rigorous downside analysis prior to determining upside potential. We seek to outperform both our benchmark and peers over a full market cycle by building diversified portfolios of what we believe to be high-quality, undervalued stocks. | Tom Perkins co-portfolio manager | Kevin Preloger co-portfolio manager | Justin Tugman co-portfolio manager |
PERFORMANCE OVERVIEW
During the 12 months ended June 30, 2015, Perkins Mid Cap Value Fund’s Class T Shares returned 0.26% compared with a 3.67% return for its benchmark, the Russell Midcap Value Index. Our holdings in health care and consumer discretionary, as well as our overweight position in energy during the period, weighed on relative performance. Stock selection in information technology, our overweight position in consumer staples and underweight in utilities contributed.
MARKET COMMENTARY
The S&P 500 Index, a broad market measure, reached successive record highs during the period. However, the volatility that marked the end of 2014 carried over into the beginning of 2015 and major U.S. stock indices finished the period mixed. Volume and volatility remained muted for much of the period. Earnings during the latter part of the period largely exceeded expectations, but enthusiasm was tempered as valuations were considered stretched compared to long-term averages. Stocks were also aided by favorable economic data; however, generally speaking, the economic data looked choppy. Employment data including nonfarm payrolls and wages exhibited renewed strength during the spring. Partly as a consequence, key retail sales data hinted that consumers were once again finding their footing as a source of broad economic growth. However, the labor force participation rate remained stubbornly low.
After falling below $50 a barrel, from over $100 a barrel at the beginning of the period, crude oil prices reset within a higher trading band. The dollar also stabilized after its recent strong period of appreciation. Both developments were highlighted by the Federal Reserve’s (Fed) June statement, in which it said a potential increase of the Fed Funds rate during the latter part of the year would be “appropriate.” Chairwoman Janet Yellen also reiterated that any move would be data dependent, thoughtful and measured. However, we remain cautious about the impact of current monetary policy as it gets set to unwind. Negative sentiment emanating from Europe – centering on Greece’s ability to meet its debt obligations – impacted U.S. shares late in June. Previous high fliers were especially impacted.
DETRACTORS
Shares in barge operator Kirby Corp. traded lower through the period following the rapid decline in global oil prices. Approximately 20% of Kirby’s annual revenues are directly tied to oil, with approximately $400 million of revenue related to diesel engines for well fracking pumps and rigs, and $200 million to the transport of crude oil in both inland river and coastal barge movements. Management guided fourth quarter results below Street estimates on weakness in both the diesel engine business as well as the crude transport segment. We see fracking-related revenue continuing to be negatively pressured by weak oil prices and their negative impact on rig count in the U.S. However, we believe the recent softness in the crude transport business will ease as we move further into 2015. The core chemical business remains solid, in our view, driven by revenue gains, pricing, and strong margins.
Noble Energy, Inc. is a global independent energy exploration and production company with U.S. assets in the Rocky Mountains, Appalachia, the Gulf of Mexico as well as international operations in offshore Israel and West Africa. Shares of the company suffered when the precipitous fall in crude oil prices at the end of 2014 drove a sell-off across the entire energy complex. The stock also traded lower as Israeli antitrust authorities announced a review of a previous regulatory deal that Noble and its partners signed with the Israeli government. We trimmed our position during the period.
Plains GP Holdings LP is the general partner of Plains All American Pipeline LP. The company has increasing claims on the cash flows generated by its limited partner, which has benefited from increasing crude oil volume growth in the U.S. The shares modestly underperformed its master
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Perkins Mid Cap Value Fund (unaudited)(closed to certain new investors)
limited partnership (MLP) peers as a very strong third quarter earnings report was not enough to offset conservative 2015 distribution guidance and the rapid decline in crude oil prices. The company also acquired 50% of the BridgeTex pipeline joint venture from Occidental Petroleum that we believe should complement the company’s growing asset base in the Permian Basin. We eliminated our holdings in the stock in the first half of the period as we were concerned with the clouded outlook for distribution growth given the steep decline in crude prices.
CONTRIBUTORS
Casey’s General Stores, Inc. operates nearly 1,900 convenience store locations throughout smaller towns in the Midwest U.S., and has begun expanding into the Southeast, including Tennessee and Arkansas. The firm has done a solid job in executing its growth strategy – posting strong same-store sales growth, expanding distribution centers, allowing the company to decrease costs going forward and serve broader geographic markets. We continue to like the execution of Casey’s long-term strategy and thus the stock remains one of our largest holdings in the portfolio.
Informatica Corp. is an independent provider of enterprise data integration software and services. The stock’s strong performance was driven by solid fundamental results, activist involvement, and the announcement by management that they would look at potentially selling the company. In April, it was announced that a private equity firm and the Canada Pension Plan Investment Board would purchase the company in an all cash deal, which helped boost the stock’s performance. As a result of the rally in the stock price on the deal news, we have trimmed our position.
Zoetis, Inc., an animal health company, contributed to performance during the period. A spin-off from Pfizer, Zoetis develops animal health medicines and vaccines, with a focus on livestock and companion animals. The company’s products are sold in North America, Europe, Africa, Asia, Australia and Latin America. In addition, the drug maker has an approved vaccine for swine virus, which is expected to provide a boost to sales and earnings this year. We trimmed some of our position in the period on price strength, which reduced the reward/risk relationship.
MARKET OUTLOOK
As we look ahead, the factors that fueled the market continue to be intact, mainly loose monetary policy on a global basis. However, the Fed has clearly telegraphed its intention and has initiated the process of slowly reducing the amount of liquidity injected into the system and has stated its preference to raise interest rates, “not now, but soon.” Of course this will be dependent on both inflation and jobs data. Some of the recent economic data has been mixed, with first quarter GDP contracting and expectations for the second quarter in the 2% range – far from rapid growth. Meanwhile, nonfarm payrolls continue to increase without much wage inflation, but the labor force participation rate remains stuck at near-record lows. The odds of miscommunication from the Fed would appear to be high as it begins to transition away from policy accommodation. Given this backdrop, the odds would seem to favor increased market volatility. As valuations remain at the upper end of historical ranges, and thus with little room for error, we continue to remain vigilant about the potential for downside risk.
Complacency has set into investor psychology as the S&P 500 Index, a broad market measure, has gone almost four years without a 10% correction, an unusually long time. Given the low level of interest rates, it can be argued that the market is fairly valued based on the S&P 500 trading at 17.4x 2015 estimated earnings. However, based on the Shiller P/E ratio (a price-to-earnings ratio which incorporates inflation adjusted earnings over the past 10 years) the S&P 500 is trading at 27x. This is well above its historical mean of 15.95x and significantly above its average going back to 1881. To put this into context, other instances when this valuation metric was at this level, or higher, included 1929, 2000 and 2007. A potential headwind for the sustainability of the current P/E multiple is corporate profits. In the first quarter, S&P 500 companies delivered paltry earnings growth of 0.80% compared to the same period a year ago. The forecast for the second quarter is for a decline of 4.5%. Simply put, “bad news” has been tolerated by the equity market and this may continue to be the case, until it isn’t. Thus, we continue our focus on building a portfolio of high-quality stocks that we believe will minimize risk should the time come that the equity market views “bad news” as truly bad news.
The Fund’s sector positioning did not materially change. Staples, industrials and health care remain overweight on a relative basis. Conversely, our underweight sectors include consumer discretionary, utilities and basic materials. We decreased our allocation to the energy sector during the period, and ended the period underweight energy. Uncertainties over Greece, the economic slowdown and stock market volatility in China, assorted geopolitical threats, as well as the growth
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(unaudited)
trajectory of the U.S. economy all are factors that lead us to be cautious given equity valuations. In conclusion, we believe our portfolio of what we consider high-quality stocks will hold up better relative to the overall market should volatility appear. Higher volatility should present us with opportunities to purchase new stocks where the valuation and reward-to-risk ratios are more compelling.
Thank you for your investment with us in Perkins Mid Cap Value Fund.
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Perkins Mid Cap Value Fund (unaudited)(closed to certain new investors)
Perkins Mid Cap Value Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Casey’s General Stores, Inc. | 0.71% | |||
Zoetis, Inc. | 0.40% | |||
Informatica Corp. | 0.40% | |||
Laboratory Corp. of America Holdings | 0.32% | |||
Dr Pepper Snapple Group, Inc. | 0.30% |
5 Bottom Performers – Holdings
Contribution | ||||
Kirby Corp. | –0.54% | |||
Noble Energy, Inc. | –0.52% | |||
Plains GP Holdings LP – Class A | –0.43% | |||
Anadarko Petroleum Corp. | –0.33% | |||
Ensco PLC – Class A | –0.30% |
5 Top Performers – Sectors*
Fund Weighting | Russell Midcap® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Information Technology | 1.12% | 9.21% | 10.80% | |||||||||
Consumer Staples | 0.71% | 8.66% | 3.29% | |||||||||
Utilities | 0.44% | 6.29% | 11.91% | |||||||||
Financials | 0.33% | 30.67% | 32.92% | |||||||||
Telecommunication Services | –0.24% | 1.03% | 0.33% |
5 Bottom Performers – Sectors*
Fund Weighting | Russell Midcap® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Health Care | –1.58% | 10.84% | 9.74% | |||||||||
Energy | –1.19% | 6.91% | 4.49% | |||||||||
Consumer Discretionary | –0.97% | 4.64% | 10.25% | |||||||||
Industrials | –0.76% | 13.84% | 9.39% | |||||||||
Materials | –0.35% | 3.05% | 6.88% |
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 June 30, 2015
Laboratory Corp. of America Holdings Health Care Providers & Services | 2.5% | |||
Fifth Third Bancorp Commercial Banks | 2.5% | |||
Casey’s General Stores, Inc. Food & Staples Retailing | 2.5% | |||
Zions Bancorporation Commercial Banks | 2.2% | |||
Marsh & McLennan Cos., Inc. Insurance | 2.2% | |||
11.9% |
Asset Allocation – (% of Net Assets)
As of June 30, 2015
Top Country Allocations – Long Positions (% of Investment Securities)
As of June 30, 2015
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Perkins Mid Cap Value Fund (unaudited)(closed to certain new investors)
Performance
Expense Ratios – per the | |||||||||||
Average Annual Total Return – for the periods ended June 30, 2015 | October 28, 2014 prospectuses | ||||||||||
One | Five | Ten | Since | Total Annual Fund | |||||||
Year | Year | Year | Inception* | Operating Expenses | |||||||
Perkins Mid Cap Value Fund – Class A Shares(1) | |||||||||||
NAV | 0.11% | 11.45% | 7.50% | 11.68% | 0.93% | ||||||
MOP | –5.66% | 10.14% | 6.86% | 11.29% | |||||||
Perkins Mid Cap Value Fund – Class C Shares(1) | |||||||||||
NAV | –0.62% | 10.63% | 6.71% | 10.94% | 1.70% | ||||||
CDSC | –1.41% | 10.63% | 6.71% | 10.94% | |||||||
Perkins Mid Cap Value Fund – Class D Shares(1) | 0.37% | 11.76% | 7.76% | 11.87% | 0.65% | ||||||
Perkins Mid Cap Value Fund – Class I Shares(1) | 0.40% | 11.79% | 7.71% | 11.84% | 0.63% | ||||||
Perkins Mid Cap Value Fund – Class L Shares(1) | 0.25% | 11.78% | 7.87% | 11.98% | 0.75% | ||||||
Perkins Mid Cap Value Fund – Class N Shares(1) | 0.51% | 11.65% | 7.71% | 11.84% | 0.49% | ||||||
Perkins Mid Cap Value Fund – Class R Shares(1) | –0.26% | 11.09% | 7.12% | 11.34% | 1.25% | ||||||
Perkins Mid Cap Value Fund – Class S Shares(1) | –0.01% | 11.37% | 7.39% | 11.58% | 0.99% | ||||||
Perkins Mid Cap Value Fund – Class T Shares(1) | 0.26% | 11.65% | 7.71% | 11.84% | 0.74% | ||||||
Russell Midcap® Value Index | 3.67% | 17.73% | 8.89% | 9.90% | |||||||
Morningstar Quartile – Class T Shares | 4th | 4th | 3rd | 1st | |||||||
Morningstar Ranking – based on total returns for Mid-Cap Value Funds | 396/505 | 412/425 | 239/350 | 17/162 | |||||||
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 Real Estate Investment Trusts (REITs) may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: legal, political, liquidity, interest rate risks, a decline in the value of real estate, risks related to general and economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers.
The Fund will normally invest at least 80% of its net assets, measured at the time of purchase, in the type of securities described by its name.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Class A Shares, Class C Shares, Class R Shares, and Class S Shares commenced operations on July 6, 2009. Performance shown for each class reflects the performance of the Fund’s Class J Shares (formerly named Investor Shares), from April 21, 2003 to July 6, 2009, calculated using the fees and expenses of the corresponding class, without the effect of any fee and expense limitations or waivers. For periods prior to April 21, 2003, the performance shown for each class reflects the historical performance of Berger Mid Cap Value Fund – Investor Shares (as a result of a prior reorganization of Berger Mid Cap Value Fund – Investor Shares into the Fund’s former Class J Shares), calculated using the fees and expenses of the corresponding class respectively, without the effect of any fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010, as a result of the restructuring of Class J Shares, the predecessor share class. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares (formerly named Investor Shares). For the periods prior to April 21, 2003, the performance shown for Class D Shares reflects the historical performance of Berger Mid Cap Value Fund – Investor Shares (as a result of a separate prior reorganization).
Class I Shares commenced operations on July 6, 2009. Performance shown reflects the performance of the Fund’s Class J Shares (formerly named Investor Shares) from April 21, 2003 to July 6, 2009, calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers. For the periods prior to April 21, 2003, the performance shown for Class I Shares reflects the historical performance of Berger Mid Cap Value Fund – Investor Shares (as a result of a separate prior reorganization), calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers.
Class L Shares commenced operations on April 21, 2003. Performance shown for periods following April 21, 2003, reflects the fees and expenses of Class L Shares (formerly named Institutional Shares), net of any applicable fee and expense limitations or waivers. The performance shown for Class L Shares for the periods from May 17, 2002 to April 17, 2003, reflects the historical performance of Berger Mid Cap Value Fund – Institutional Shares (as a result of a prior reorganization of Berger Mid Cap Value Fund – Institutional Shares into the Fund’s Class L Shares). For the periods prior to May 17, 2002, the performance shown reflects the historical performance of Berger Mid Cap Value Fund – Investor Shares.
Class N Shares of the Fund commenced operations on May 31, 2012. Performance shown for Class N Shares reflects the performance of the Fund’s Class T Shares from July 6, 2009 to May 31, 2012, calculated using the fees and expenses of Class T Shares, net of any applicable fee and expense limitations or waivers. For the period from April 21, 2003 to July 6, 2009, the performance shown for Class N Shares reflects the performance of Class J Shares (formerly named Investor Shares), calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers. For the periods prior to April 21, 2003, the performance shown for Class N Shares reflects the historical performance of Berger Mid Cap Value Fund – Investor Shares (as a result of a separate prior reorganization), calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers.
Class T Shares (formerly named Class J Shares) commenced operations with the Fund’s inception. Performance shown for periods following April 21, 2003, reflects the fees and expenses of Class T Shares in effect during the periods shown, net of any applicable fee and expense limitations or waivers. For the periods prior to April 21, 2003, the performance shown for Class T Shares reflects the historical performance of Berger Mid Cap Value Fund – Investor Shares (as a result of a separate prior reorganization).
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 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.”
Effective March 19, 2015, Tom Perkins, Kevin Preloger and Justin Tugman are Co-Portfolio Managers of the Fund.
* | The predecessor Fund’s inception date – August 12, 1998 |
(1) Closed to new investors in certain distribution channels.
Janus Investment Fund | 7
Table of Contents
Perkins Mid Cap Value Fund (unaudited)(closed to certain new investors)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 985.10 | $ | 3.94 | $ | 1,000.00 | $ | 1,020.83 | $ | 4.01 | 0.80% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 981.40 | $ | 7.61 | $ | 1,000.00 | $ | 1,017.11 | $ | 7.75 | 1.55% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 986.00 | $ | 2.76 | $ | 1,000.00 | $ | 1,022.02 | $ | 2.81 | 0.56% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 986.00 | $ | 2.76 | $ | 1,000.00 | $ | 1,022.02 | $ | 2.81 | 0.56% | |||||||||||||||||
Class L Shares | $ | 1,000.00 | $ | 985.70 | $ | 3.25 | $ | 1,000.00 | $ | 1,021.52 | $ | 3.31 | 0.66% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 987.00 | $ | 2.02 | $ | 1,000.00 | $ | 1,022.76 | $ | 2.06 | 0.41% | |||||||||||||||||
Class R Shares | $ | 1,000.00 | $ | 983.00 | $ | 5.70 | $ | 1,000.00 | $ | 1,019.04 | $ | 5.81 | 1.16% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 984.10 | $ | 4.48 | $ | 1,000.00 | $ | 1,020.28 | $ | 4.56 | 0.91% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 985.50 | $ | 3.25 | $ | 1,000.00 | $ | 1,021.52 | $ | 3.31 | 0.66% | |||||||||||||||||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 181/365 (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 | JUNE 30, 2015
Table of Contents
Perkins Mid Cap Value Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Common Stocks – 95.7% | ||||||||||
Aerospace & Defense – 2.3% | ||||||||||
220,932 | Precision Castparts Corp. | $ | 44,157,679 | |||||||
925,104 | Rockwell Collins, Inc. | 85,433,354 | ||||||||
129,591,033 | ||||||||||
Beverages – 3.5% | ||||||||||
1,557,475 | Coca-Cola Enterprises, Inc. | 67,656,714 | ||||||||
1,095,442 | Dr Pepper Snapple Group, Inc. | 79,857,722 | ||||||||
707,598 | Molson Coors Brewing Co. – Class B | 49,397,416 | ||||||||
196,911,852 | ||||||||||
Building Products – 0.6% | ||||||||||
908,839 | Simpson Manufacturing Co., Inc. | 30,900,526 | ||||||||
Capital Markets – 2.4% | ||||||||||
1,779,522 | Raymond James Financial, Inc. | 106,023,921 | ||||||||
519,956 | Stifel Financial Corp.* | 30,022,259 | ||||||||
136,046,180 | ||||||||||
Chemicals – 1.8% | ||||||||||
733,663 | Cabot Corp. | 27,358,293 | ||||||||
1,360,570 | FMC Corp. | 71,497,954 | ||||||||
98,856,247 | ||||||||||
Commercial Banks – 10.9% | ||||||||||
900,247 | CIT Group, Inc. | 41,852,483 | ||||||||
4,034,859 | Citizens Financial Group, Inc. | 110,191,999 | ||||||||
1,494,375 | Comerica, Inc. | 76,691,325 | ||||||||
6,624,773 | Fifth Third Bancorp | 137,927,774 | ||||||||
392,902 | First Republic Bank | 24,764,613 | ||||||||
1,367,950 | MB Financial, Inc. | 47,112,198 | ||||||||
2,521,479 | Umpqua Holdings Corp. | 45,361,407 | ||||||||
3,890,793 | Zions Bancorporation | 123,474,316 | ||||||||
607,376,115 | ||||||||||
Commercial Services & Supplies – 4.3% | ||||||||||
1,671,884 | Republic Services, Inc. | 65,487,696 | ||||||||
2,110,616 | Tyco International PLC | 81,216,504 | ||||||||
2,001,161 | Waste Connections, Inc. | 94,294,706 | ||||||||
240,998,906 | ||||||||||
Communications Equipment – 0.6% | ||||||||||
278,276 | F5 Networks, Inc.* | 33,490,517 | ||||||||
Consumer Finance – 1.5% | ||||||||||
1,957,451 | Ally Financial, Inc.* | 43,905,626 | ||||||||
708,592 | Discover Financial Services | 40,829,071 | ||||||||
84,734,697 | ||||||||||
Containers & Packaging – 1.4% | ||||||||||
97,856 | Crown Holdings, Inc.* | 5,177,561 | ||||||||
1,160,675 | Packaging Corp. of America | 72,530,581 | ||||||||
77,708,142 | ||||||||||
Electric Utilities – 1.9% | ||||||||||
3,493,742 | PPL Corp. | 102,960,577 | ||||||||
Electrical Equipment – 1.7% | ||||||||||
2,849,218 | Babcock & Wilcox Co.* | 93,454,351 | ||||||||
Electronic Equipment, Instruments & Components – 0.7% | ||||||||||
1,293,145 | Keysight Technologies, Inc.* | 40,333,193 | ||||||||
Energy Equipment & Services – 1.7% | ||||||||||
500,534 | Dril-Quip, Inc.* | 37,665,183 | ||||||||
559,882 | Oil States International, Inc.* | 20,844,407 | ||||||||
1,572,700 | Tidewater, Inc. | 35,747,471 | ||||||||
94,257,061 | ||||||||||
Food & Staples Retailing – 2.9% | ||||||||||
1,426,612 | Casey’s General Stores, Inc.£ | 136,583,833 | ||||||||
611,614 | Sysco Corp. | 22,079,265 | ||||||||
158,663,098 | ||||||||||
Food Products – 3.2% | ||||||||||
407,349 | Hershey Co. | 36,184,812 | ||||||||
624,521 | JM Smucker Co. | 67,704,321 | ||||||||
592,227 | McCormick & Co., Inc. | 47,940,776 | ||||||||
332,976 | Sanderson Farms, Inc. | 25,026,476 | ||||||||
176,856,385 | ||||||||||
Gas Utilities – 2.0% | ||||||||||
1,183,998 | AGL Resources, Inc. | 55,126,947 | ||||||||
1,013,588 | Southwest Gas Corp. | 53,933,018 | ||||||||
109,059,965 | ||||||||||
Health Care Equipment & Supplies – 2.1% | ||||||||||
656,417 | Stryker Corp. | 62,733,773 | ||||||||
497,815 | Zimmer Biomet Holdings, Inc. | 54,376,332 | ||||||||
117,110,105 | ||||||||||
Health Care Providers & Services – 3.4% | ||||||||||
1,152,138 | Laboratory Corp. of America Holdings* | 139,662,168 | ||||||||
208,607 | McKesson Corp. | 46,896,940 | ||||||||
186,559,108 | ||||||||||
Information Technology Services – 2.3% | ||||||||||
612,178 | Jack Henry & Associates, Inc. | 39,607,917 | ||||||||
946,069 | Teradata Corp.* | 35,004,553 | ||||||||
1,287,650 | Total System Services, Inc. | 53,785,140 | ||||||||
128,397,610 | ||||||||||
Insurance – 7.6% | ||||||||||
1,333,867 | Allstate Corp. | 86,527,952 | ||||||||
772,093 | Arthur J Gallagher & Co. | 36,519,999 | ||||||||
2,170,683 | Marsh & McLennan Cos., Inc. | 123,077,726 | ||||||||
593,493 | RenaissanceRe Holdings, Ltd. | 60,245,475 | ||||||||
2,048,020 | Torchmark Corp. | 119,235,724 | ||||||||
425,606,876 | ||||||||||
Life Sciences Tools & Services – 3.5% | ||||||||||
2,537,665 | Agilent Technologies, Inc. | 97,903,116 | ||||||||
746,640 | Thermo Fisher Scientific, Inc. | 96,884,006 | ||||||||
194,787,122 | ||||||||||
Machinery – 3.4% | ||||||||||
1,126,557 | Kennametal, Inc. | 38,438,125 | ||||||||
650,880 | Lincoln Electric Holdings, Inc. | 39,632,083 | ||||||||
1,475,674 | Timken Co. | 53,965,398 | ||||||||
498,584 | Valmont Industries, Inc. | 59,266,680 | ||||||||
191,302,286 | ||||||||||
Marine – 0.9% | ||||||||||
625,711 | Kirby Corp.* | 47,967,005 | ||||||||
Media – 1.2% | ||||||||||
991,422 | Omnicom Group, Inc. | 68,893,915 | ||||||||
Multi-Utilities – 1.9% | ||||||||||
1,837,824 | Alliant Energy Corp. | 106,079,201 | ||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Perkins Mid Cap Value Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Multiline Retail – 0.6% | ||||||||||
495,187 | Macy’s, Inc. | $ | 33,410,267 | |||||||
Oil, Gas & Consumable Fuels – 4.6% | ||||||||||
821,897 | Anadarko Petroleum Corp. | 64,157,280 | ||||||||
521,387 | Cimarex Energy Co. | 57,514,200 | ||||||||
479,209 | MarkWest Energy Partners LP | 27,017,803 | ||||||||
398,283 | Noble Energy, Inc. | 16,998,718 | ||||||||
1,459,650 | Western Gas Partners LP | 92,498,021 | ||||||||
258,186,022 | ||||||||||
Pharmaceuticals – 1.0% | ||||||||||
1,134,573 | Zoetis, Inc. | 54,709,110 | ||||||||
Real Estate Investment Trusts (REITs) – 8.9% | ||||||||||
701,279 | Alexandria Real Estate Equities, Inc. | 61,333,861 | ||||||||
340,223 | AvalonBay Communities, Inc. | 54,391,451 | ||||||||
1,525,015 | Equity Lifestyle Properties, Inc. | 80,185,289 | ||||||||
981,348 | Extra Space Storage, Inc. | 64,003,517 | ||||||||
1,318,362 | Healthcare Trust of America, Inc. – Class A | 31,574,770 | ||||||||
351,667 | Home Properties, Inc. | 25,689,274 | ||||||||
1,983,020 | Host Hotels & Resorts, Inc. | 39,323,287 | ||||||||
278,848 | Post Properties, Inc. | 15,160,966 | ||||||||
1,711,342 | Potlatch Corp.£ | 60,444,599 | ||||||||
1,902,204 | Redwood Trust, Inc.£ | 29,864,603 | ||||||||
971,179 | Weyerhaeuser Co. | 30,592,138 | ||||||||
492,563,755 | ||||||||||
Road & Rail – 2.2% | ||||||||||
303,777 | Canadian Pacific Railway, Ltd. (U.S. Shares) | 48,674,189 | ||||||||
2,233,295 | CSX Corp. | 72,917,082 | ||||||||
121,591,271 | ||||||||||
Semiconductor & Semiconductor Equipment – 1.9% | ||||||||||
758,304 | Analog Devices, Inc. | 48,671,742 | ||||||||
1,166,068 | Microchip Technology, Inc. | 55,300,775 | ||||||||
103,972,517 | ||||||||||
Software – 4.2% | ||||||||||
773,104 | Check Point Software Technologies, Ltd.* | 61,500,423 | ||||||||
1,174,389 | Informatica Corp.* | 56,922,635 | ||||||||
1,214,928 | NetScout Systems, Inc.* | 44,551,410 | ||||||||
1,396,221 | Synopsys, Inc.* | 70,718,594 | ||||||||
233,693,062 | ||||||||||
Technology Hardware, Storage & Peripherals – 0.4% | ||||||||||
791,884 | NetApp, Inc. | 24,991,859 | ||||||||
Textiles, Apparel & Luxury Goods – 1.5% | ||||||||||
336,906 | PVH Corp. | 38,811,571 | ||||||||
1,091,087 | Steven Madden, Ltd.* | 46,676,702 | ||||||||
85,488,273 | ||||||||||
Thrifts & Mortgage Finance – 0.7% | ||||||||||
1,742,272 | Washington Federal, Inc. | 40,682,051 | ||||||||
Total Common Stocks (cost $4,260,589,454) | 5,328,190,260 | |||||||||
Repurchase Agreements – 4.2% | ||||||||||
$117,700,000 | Undivided interest of 58.8% in a joint repurchase agreement (principal amount $200,300,000 with a maturity value of $200,300,556) with ING Financial Markets LLC, 0.1000%, dated 6/30/15, maturing 7/1/15, to be repurchased at $117,700,327 collateralized by $220,243,953 in U.S. Treasuries, 0% – 4.2500%, 10/31/15 – 11/15/43, with a value of $204,308,612 | 117,700,000 | ||||||||
40,000,000 | Undivided interest of 40.0% in a joint repurchase agreement (principal amount $100,000,000 with a maturity value of $100,000,167) with RBC Capital Markets Corp., 0.0600%, dated 6/30/15, maturing 7/1/15, to be repurchased at $40,000,067 collateralized by $116,489,256 in U.S. Treasuries, 0% – 8.7500%, 8/15/15 – 11/15/44, with a value of $102,000,016 | 40,000,000 | ||||||||
75,000,000 | Undivided interest of 50.0% in a joint repurchase agreement (principal amount $150,000,000 with a maturity value of $150,000,417) with Credit Agricole, New York, 0.1000%, dated 6/30/15, maturing 7/1/15, to be repurchased at $75,000,208 collateralized by $59,112,294 in U.S. Government Agencies, 0.7500% – 6.0000%, 1/12/18 – 10/15/44, and $82,897,096 in U.S. Treasuries, 0% – 4.6250%, 7/15/15 – 5/15/40, with a value of $153,000,003 | 75,000,000 | ||||||||
Total Repurchase Agreements (cost $232,700,000) | 232,700,000 | |||||||||
Total Investments (total cost $4,493,289,454) – 99.9% | 5,560,890,260 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.1% | 4,418,145 | |||||||||
Net Assets – 100% | $ | 5,565,308,405 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States | $ | 5,450,715,648 | 98 | .0% | ||||
Israel | 61,500,423 | 1 | .1 | |||||
Canada | 48,674,189 | 0 | .9 | |||||
Total | $ | 5,560,890,260 | 100 | .0% | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | JUNE 30, 2015
Table of Contents
Notes to Schedule of Investments and Other Information
Russell Midcap® Value Index | Measures the performance of those Russell Midcap® Index companies with lower price-to-book ratios and lower forecasted growth values. | |
S&P 500® Index | 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. |
£ | 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 year ended June 30, 2015. Unless otherwise indicated, all information in the table is for the year ended June 30, 2015. |
Share | Share | |||||||||||||||
Balance | Balance | Realized | Dividend | Value | ||||||||||||
at 6/30/14 | Purchases | Sales | at 6/30/15 | Gain/(Loss) | Income | at 6/30/15 | ||||||||||
Perkins Mid Cap Value Fund | ||||||||||||||||
Casey’s General Stores, Inc.(1) | 2,123,443 | 90,871 | (787,702) | 1,426,612 | $12,694,930 | $ 1,472,924 | N/A | |||||||||
Plains GP Holdings LP – Class A | 7,165,115 | 446,128 | (7,611,243) | – | 29,001,845 | 2,108,645 | $ – | |||||||||
Potlatch Corp.(1) | 2,122,871 | 325,184 | (736,713) | 1,711,342 | (373,451) | 2,535,029 | N/A | |||||||||
Redwood Trust, Inc.(1) | 4,246,090 | – | (2,343,886) | 1,902,204 | (2,984,425) | 4,212,059 | N/A | |||||||||
Total | $38,338,899 | $10,328,657 | $ – | |||||||||||||
(1) | No longer an affiliate as of June 30, 2015. |
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 June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | |||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | ||||||
Perkins Mid Cap Value Fund | ||||||||
Assets | ||||||||
Investments in Securities: | ||||||||
Common Stocks | $5,328,190,260 | $ – | $– | |||||
Repurchase Agreements | – | 232,700,000 | – | |||||
Total Assets | $5,328,190,260 | $232,700,000 | $– | |||||
Janus Investment Fund | 11
Table of Contents
Statement of Assets and Liabilities
As of June 30, 2015 | Perkins Mid Cap Value Fund | |||
Assets: | ||||
Investments, at cost(1) | $ | 4,493,289,454 | ||
Investments, at value | $ | 5,328,190,260 | ||
Repurchase agreements, at value | 232,700,000 | |||
Cash | 87,539 | |||
Non-interested Trustees’ deferred compensation | 111,656 | |||
Receivables: | ||||
Investments sold | 52,097,382 | |||
Fund shares sold | 2,322,342 | |||
Dividends | 10,648,399 | |||
Interest | 602 | |||
Other assets | 20,113 | |||
Total Assets | 5,626,178,293 | |||
Liabilities: | ||||
Payables: | ||||
Investments purchased | 33,103,674 | |||
Fund shares repurchased | 23,056,117 | |||
Advisory fees | 1,800,242 | |||
Fund administration fees | 45,527 | |||
Transfer agent fees and expenses | 1,561,134 | |||
12b-1 Distribution and shareholder servicing fees | 494,913 | |||
Non-interested Trustees’ fees and expenses | 43,598 | |||
Non-interested Trustees’ deferred compensation fees | 111,656 | |||
Accrued expenses and other payables | 653,027 | |||
Total Liabilities | 60,869,888 | |||
Net Assets | $ | 5,565,308,405 |
See Notes to Financial Statements.
12 | JUNE 30, 2015
Table of Contents
As of June 30, 2015 | Perkins Mid Cap Value Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 3,979,852,263 | ||
Undistributed net investment income/(loss) | 25,173,801 | |||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | 492,648,136 | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 1,067,634,205 | |||
Total Net Assets | $ | 5,565,308,405 | ||
Net Assets - Class A Shares | $ | 217,357,609 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 10,941,291 | |||
Net Asset Value Per Share(2) | $ | 19.87 | ||
Maximum Offering Price Per Share(3) | $ | 21.08 | ||
Net Assets - Class C Shares | $ | 115,667,099 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,917,456 | |||
Net Asset Value Per Share(2) | $ | 19.55 | ||
Net Assets - Class D Shares | $ | 827,953,870 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 42,008,166 | |||
Net Asset Value Per Share | $ | 19.71 | ||
Net Assets - Class I Shares | $ | 1,407,953,336 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 71,408,411 | |||
Net Asset Value Per Share | $ | 19.72 | ||
Net Assets - Class L Shares | $ | 12,607,862 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 630,785 | |||
Net Asset Value Per Share | $ | 19.99 | ||
Net Assets - Class N Shares | $ | 281,522,330 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 14,298,890 | |||
Net Asset Value Per Share | $ | 19.69 | ||
Net Assets - Class R Shares | $ | 89,478,364 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 4,546,735 | |||
Net Asset Value Per Share | $ | 19.68 | ||
Net Assets - Class S Shares | $ | 198,232,184 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 9,990,533 | |||
Net Asset Value Per Share | $ | 19.84 | ||
Net Assets - Class T Shares | $ | 2,414,535,751 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 122,208,171 | |||
Net Asset Value Per Share | $ | 19.76 |
(1) | Includes cost of repurchase agreements of $232,700,000. | |
(2) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(3) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Statement of Operations
Perkins Mid Cap | ||||
For the year ended June 30, 2015 | Value Fund | |||
Investment Income: | ||||
Interest | $ | 166,433 | ||
Dividends | 108,287,082 | |||
Dividends from affiliates | 10,328,657 | |||
Other income | 6 | |||
Foreign tax withheld | (856,931) | |||
Total Investment Income | 117,925,247 | |||
Expenses: | ||||
Advisory fees | 29,570,392 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 782,621 | |||
Class C Shares | 1,408,881 | |||
Class R Shares | 530,032 | |||
Class S Shares | 672,942 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 1,072,922 | |||
Class L Shares | 44,258 | |||
Class R Shares | 265,016 | |||
Class S Shares | 672,942 | |||
Class T Shares | 7,919,285 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 448,519 | |||
Class C Shares | 133,496 | |||
Class I Shares | 2,472,353 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 38,334 | |||
Class C Shares | 22,466 | |||
Class D Shares | 172,603 | |||
Class I Shares | 98,153 | |||
Class L Shares | 542 | |||
Class N Shares | 3,343 | |||
Class R Shares | 3,110 | |||
Class S Shares | 4,943 | |||
Class T Shares | 49,346 | |||
Shareholder reports expense | 436,309 | |||
Registration fees | 265,234 | |||
Custodian fees | 35,808 | |||
Professional fees | 140,649 | |||
Non-interested Trustees’ fees and expenses | 141,543 | |||
Fund administration fees | 648,293 | |||
Other expenses | 276,812 | |||
Total Expenses | 48,331,147 | |||
Net Expenses | 48,331,147 | |||
Net Investment Income/(Loss) | 69,594,101 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 926,058,767 | |||
Investments in affiliates | 38,338,899 | |||
Total Net Realized Gain/(Loss) on Investments | 964,397,666 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (995,297,890) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (995,297,890) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 38,693,877 |
See Notes to Financial Statements.
14 | JUNE 30, 2015
Table of Contents
Statements of Changes in Net Assets
Perkins Mid Cap | ||||||||
Value Fund | ||||||||
For each year ended June 30 | 2015 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 69,594,101 | $ | 131,928,615 | ||||
Net realized gain/(loss) on investments | 964,397,666 | 1,614,874,196 | ||||||
Change in unrealized net appreciation/depreciation | (995,297,890) | 118,204,237 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 38,693,877 | 1,865,007,048 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income | ||||||||
Class A Shares | (5,940,967) | (9,460,143) | ||||||
Class C Shares | (1,728,498) | (591,359) | ||||||
Class D Shares | (26,626,446) | (13,553,210) | ||||||
Class I Shares | (60,085,448) | (40,639,172) | ||||||
Class L Shares | (525,737) | (374,891) | ||||||
Class N Shares | (11,502,967) | (4,653,498) | ||||||
Class R Shares | (1,915,197) | (1,092,655) | ||||||
Class S Shares | (4,806,203) | (5,066,067) | ||||||
Class T Shares | (87,392,023) | (65,742,480) | ||||||
Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | (59,097,635) | (98,448,877) | ||||||
Class C Shares | (27,692,822) | (21,494,905) | ||||||
Class D Shares | (170,540,333) | (106,207,159) | ||||||
Class I Shares | (387,019,885) | (315,702,767) | ||||||
Class L Shares | (3,550,347) | (2,855,788) | ||||||
Class N Shares | (68,277,150) | (32,931,987) | ||||||
Class R Shares | (20,399,307) | (16,427,530) | ||||||
Class S Shares | (49,292,220) | (63,560,399) | ||||||
Class T Shares | (615,613,262) | (572,875,929) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (1,602,006,447) | (1,371,678,816) |
See footnotes at the end of the Statements.
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets (continued)
Perkins Mid Cap | ||||||||
Value Fund | ||||||||
For each year ended June 30 | 2015 | 2014 | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 42,170,169 | 135,701,914 | ||||||
Class C Shares | 13,002,164 | 17,805,127 | ||||||
Class D Shares | 21,649,556 | 27,043,949 | ||||||
Class I Shares | 556,042,706 | 558,475,580 | ||||||
Class L Shares | 796,226 | 570,090 | ||||||
Class N Shares | 53,937,500 | 224,605,131 | ||||||
Class R Shares | 20,947,984 | 29,333,859 | ||||||
Class S Shares | 64,680,302 | 124,116,318 | ||||||
Class T Shares | 221,831,258 | 434,486,155 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 54,491,054 | 94,620,795 | ||||||
Class C Shares | 23,551,202 | 17,312,154 | ||||||
Class D Shares | 192,312,707 | 117,024,460 | ||||||
Class I Shares | 401,213,809 | 305,228,651 | ||||||
Class L Shares | 3,335,352 | 2,710,316 | ||||||
Class N Shares | 79,154,920 | 37,585,485 | ||||||
Class R Shares | 20,663,587 | 16,025,663 | ||||||
Class S Shares | 53,969,494 | 68,482,737 | ||||||
Class T Shares | 686,112,906 | 624,423,622 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (290,651,332) | (668,363,965) | ||||||
Class C Shares | (51,519,685) | (72,006,015) | ||||||
Class D Shares | (132,474,212) | (118,775,476) | ||||||
Class I Shares | (1,414,466,097) | (1,737,229,929) | ||||||
Class L Shares | (10,409,977) | (5,881,090) | ||||||
Class N Shares | (172,748,897) | (104,895,907) | ||||||
Class R Shares | (57,098,079) | (89,164,865) | ||||||
Class S Shares | (254,634,220) | (541,589,593) | ||||||
Class T Shares | (1,798,019,978) | (2,881,588,559) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (1,672,159,581) | (3,383,943,393) | ||||||
Net Increase/(Decrease) in Net Assets | (3,235,472,151) | (2,890,615,161) | ||||||
Net Assets: | ||||||||
Beginning of period | 8,800,780,556 | 11,691,395,717 | ||||||
End of period | $ | 5,565,308,405 | $ | 8,800,780,556 | ||||
Undistributed Net Investment Income/(Loss) | $ | 25,173,801 | $ | 146,539,777 |
See Notes to Financial Statements.
16 | JUNE 30, 2015
Table of Contents
Financial Highlights
Class A Shares
Perkins Mid Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $25.00 | $23.96 | $20.93 | $23.66 | $19.04 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.18(1) | 0.26(1) | 0.28 | 0.18 | 0.19 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.07) | 4.14 | 3.66 | (1.15) | 4.57 | |||||||||||||||||
Total from Investment Operations | 0.11 | 4.40 | 3.94 | (0.97) | 4.76 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.48) | (0.29) | (0.13) | (0.13) | (0.14) | |||||||||||||||||
Distributions (from capital gains) | (4.76) | (3.07) | (0.78) | (1.63) | – | |||||||||||||||||
Total Dividends and Distributions | (5.24) | (3.36) | (0.91) | (1.76) | (0.14) | |||||||||||||||||
Net Asset Value, End of Period | $19.87 | $25.00 | $23.96 | $20.93 | $23.66 | |||||||||||||||||
Total Return | 0.11% | 19.72% | 19.33% | (3.84)% | 25.04% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $217,358 | $476,695 | $896,589 | $1,157,423 | $1,358,791 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $313,048 | $729,640 | $996,195 | $1,198,373 | $1,228,239 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.84% | 0.93% | 1.00% | 1.06% | 1.20% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.84% | 0.93% | 0.95% | 1.02% | 1.17% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.79% | 1.06% | 0.98% | 0.98% | 0.82% | |||||||||||||||||
Portfolio Turnover Rate | 49% | 51% | 60% | 54% | 66% |
Class C Shares
Perkins Mid Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $24.66 | $23.65 | $20.74 | $23.50 | $18.93 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.02(1) | 0.08(1) | 0.03 | 0.01 | 0.04 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.07) | 4.08 | 3.70 | (1.14) | 4.53 | |||||||||||||||||
Total from Investment Operations | (0.05) | 4.16 | 3.73 | (1.13) | 4.57 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.30) | (0.08) | (0.04) | –(2) | –(2) | |||||||||||||||||
Distributions (from capital gains) | (4.76) | (3.07) | (0.78) | (1.63) | – | |||||||||||||||||
Total Dividends and Distributions | (5.06) | (3.15) | (0.82) | (1.63) | – | |||||||||||||||||
Net Asset Value, End of Period | $19.55 | $24.66 | $23.65 | $20.74 | $23.50 | |||||||||||||||||
Total Return | (0.62)% | 18.83% | 18.45% | (4.58)% | 24.17% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $115,667 | $160,595 | $189,096 | $210,874 | $242,324 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $140,888 | $177,414 | $203,923 | $217,116 | $211,474 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.54% | 1.70% | 1.72% | 1.79% | 1.87% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.54% | 1.68% | 1.71% | 1.77% | 1.87% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.07% | 0.35% | 0.24% | 0.23% | 0.11% | |||||||||||||||||
Portfolio Turnover Rate | 49% | 51% | 60% | 54% | 66% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. | |
(2) | 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
Perkins Mid Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $25.04 | $24.03 | $20.96 | $23.71 | $19.06 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.22(1) | 0.34(1) | 0.30 | 0.24 | 0.26 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.05) | 4.13 | 3.72 | (1.16) | 4.57 | |||||||||||||||||
Total from Investment Operations | 0.17 | 4.47 | 4.02 | (0.92) | 4.83 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.74) | (0.39) | (0.17) | (0.20) | (0.18) | |||||||||||||||||
Distributions (from capital gains) | (4.76) | (3.07) | (0.78) | (1.63) | – | |||||||||||||||||
Total Dividends and Distributions | (5.50) | (3.46) | (0.95) | (1.83) | (0.18) | |||||||||||||||||
Net Asset Value, End of Period | $19.71 | $25.04 | $24.03 | $20.96 | $23.71 | |||||||||||||||||
Total Return | 0.37% | 20.00% | 19.72% | (3.57)% | 25.40% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $827,954 | $939,775 | $869,066 | $818,836 | $936,795 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $894,102 | $905,095 | $840,920 | $848,059 | $896,522 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.58% | 0.65% | 0.68% | 0.74% | 0.88% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.58% | 0.65% | 0.68% | 0.74% | 0.88% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.01% | 1.39% | 1.27% | 1.26% | 1.14% | |||||||||||||||||
Portfolio Turnover Rate | 49% | 51% | 60% | 54% | 66% |
Class I Shares
Perkins Mid Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $25.04 | $24.02 | $20.95 | $23.71 | $19.07 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.25(1) | 0.34(1) | 0.34 | 0.23 | 0.25 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.07) | 4.15 | 3.68 | (1.15) | 4.59 | |||||||||||||||||
Total from Investment Operations | 0.18 | 4.49 | 4.02 | (0.92) | 4.84 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.74) | (0.40) | (0.17) | (0.21) | (0.20) | |||||||||||||||||
Distributions (from capital gains) | (4.76) | (3.07) | (0.78) | (1.63) | – | |||||||||||||||||
Total Dividends and Distributions | (5.50) | (3.47) | (0.95) | (1.84) | (0.20) | |||||||||||||||||
Net Asset Value, End of Period | $19.72 | $25.04 | $24.02 | $20.95 | $23.71 | |||||||||||||||||
Total Return | 0.40% | 20.07% | 19.71% | (3.58)% | 25.46% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $1,407,953 | $2,290,695 | $3,033,537 | $3,412,395 | $3,385,626 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $1,967,896 | $2,674,830 | $3,245,850 | $3,277,486 | $2,900,600 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.57% | 0.63% | 0.63% | 0.73% | 0.84% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.57% | 0.63% | 0.63% | 0.73% | 0.84% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.10% | 1.39% | 1.32% | 1.28% | 1.14% | |||||||||||||||||
Portfolio Turnover Rate | 49% | 51% | 60% | 54% | 66% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Financial Statements.
18 | JUNE 30, 2015
Table of Contents
Class L Shares
Perkins Mid Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $25.31 | $24.26 | $21.12 | $23.90 | $19.18 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.22(1) | 0.34(1) | 2.82 | 1.89 | 0.73 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.08) | 4.18 | 1.25 | (2.82) | 4.18 | |||||||||||||||||
Total from Investment Operations | 0.14 | 4.52 | 4.07 | (0.93) | 4.91 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.70) | (0.40) | (0.15) | (0.22) | (0.19) | |||||||||||||||||
Distributions (from capital gains) | (4.76) | (3.07) | (0.78) | (1.63) | –(2) | |||||||||||||||||
Total Dividends and Distributions | (5.46) | (3.47) | (0.93) | (1.85) | (0.19) | |||||||||||||||||
Net Asset Value, End of Period | $19.99 | $25.31 | $24.26 | $21.12 | $23.90 | |||||||||||||||||
Total Return | 0.25% | 20.02% | 19.77% | (3.59)% | 25.66% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $12,608 | $22,872 | $24,332 | $33,875 | $63,549 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $17,713 | $24,042 | $29,252 | $54,047 | $66,281 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.69% | 0.75% | 0.77% | 0.84% | 0.99% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.69% | 0.68% | 0.60% | 0.77% | 0.74% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.96% | 1.36% | 1.38% | 1.27% | 1.32% | |||||||||||||||||
Portfolio Turnover Rate | 49% | 51% | 60% | 54% | 66% |
Class N Shares
Perkins Mid Cap Value Fund | ||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012(3) | ||||||||||||||
Net Asset Value, Beginning of Period | $25.05 | $24.03 | $20.95 | $20.44 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.26(1) | 0.38(1) | 0.31 | (0.04) | ||||||||||||||
Net realized and unrealized gain/(loss) | (0.06) | 4.14 | 3.74 | 0.55 | ||||||||||||||
Total from Investment Operations | 0.20 | 4.52 | 4.05 | 0.51 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | (0.80) | (0.43) | (0.19) | – | ||||||||||||||
Distributions (from capital gains) | (4.76) | (3.07) | (0.78) | – | ||||||||||||||
Total Dividends and Distributions | (5.56) | (3.50) | (0.97) | – | ||||||||||||||
Net Asset Value, End of Period | $19.69 | $25.05 | $24.03 | $20.95 | ||||||||||||||
Total Return* | 0.51% | 20.25% | 19.89% | 2.50% | ||||||||||||||
Net Assets, End of Period (in thousands) | $281,522 | $398,115 | $222,244 | $21,405 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $348,342 | $306,197 | $129,631 | $8,142 | ||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||
Ratio of Gross Expenses** | 0.43% | 0.49% | 0.52% | 0.58% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.43% | 0.49% | 0.52% | 0.57% | ||||||||||||||
Ratio of Net Investment Income/(Loss)** | 1.17% | 1.57% | 1.44% | (3.02)% | ||||||||||||||
Portfolio Turnover Rate | 49% | 51% | 60% | 54% |
* | 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. | |
(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 | 19
Table of Contents
Financial Highlights (continued)
Class R Shares
Perkins Mid Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $24.86 | $23.83 | $20.86 | $23.59 | $19.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.09(1) | 0.19(1) | 0.16 | 0.10 | 0.12 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.06) | 4.11 | 3.69 | (1.14) | 4.56 | |||||||||||||||||
Total from Investment Operations | 0.03 | 4.30 | 3.85 | (1.04) | 4.68 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.45) | (0.20) | (0.10) | (0.06) | (0.09) | |||||||||||||||||
Distributions (from capital gains) | (4.76) | (3.07) | (0.78) | (1.63) | – | |||||||||||||||||
Total Dividends and Distributions | (5.21) | (3.27) | (0.88) | (1.69) | (0.09) | |||||||||||||||||
Net Asset Value, End of Period | $19.68 | $24.86 | $23.83 | $20.86 | $23.59 | |||||||||||||||||
Total Return | (0.26)% | 19.35% | 18.97% | (4.15)% | 24.64% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $89,478 | $127,464 | $163,302 | $161,056 | $170,602 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $106,006 | $143,754 | $162,747 | $157,701 | $146,674 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.19% | 1.25% | 1.26% | 1.34% | 1.49% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.19% | 1.25% | 1.26% | 1.34% | 1.49% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.43% | 0.77% | 0.69% | 0.66% | 0.47% | |||||||||||||||||
Portfolio Turnover Rate | 49% | 51% | 60% | 54% | 66% |
Class S Shares
Perkins Mid Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $24.98 | $23.91 | $20.90 | $23.64 | $19.03 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.15(1) | 0.25(1) | 0.23 | 0.16 | 0.17 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.07) | 4.13 | 3.69 | (1.15) | 4.56 | |||||||||||||||||
Total from Investment Operations | 0.08 | 4.38 | 3.92 | (0.99) | 4.73 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.46) | (0.24) | (0.13) | (0.12) | (0.12) | |||||||||||||||||
Distributions (from capital gains) | (4.76) | (3.07) | (0.78) | (1.63) | – | |||||||||||||||||
Total Dividends and Distributions | (5.22) | (3.31) | (0.91) | (1.75) | (0.12) | |||||||||||||||||
Net Asset Value, End of Period | $19.84 | $24.98 | $23.91 | $20.90 | $23.64 | |||||||||||||||||
Total Return | (0.01)% | 19.65% | 19.27% | (3.90)% | 24.91% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $198,232 | $387,978 | $709,171 | $794,421 | $834,778 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $269,177 | $536,193 | $770,990 | $795,213 | $742,692 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.94% | 0.99% | 1.02% | 1.09% | 1.24% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.94% | 0.99% | 1.01% | 1.09% | 1.24% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.68% | 1.00% | 0.93% | 0.92% | 0.74% | |||||||||||||||||
Portfolio Turnover Rate | 49% | 51% | 60% | 54% | 66% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Financial Statements.
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Class T Shares
Perkins Mid Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $25.05 | $24.01 | $20.96 | $23.70 | $19.06 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.21(1) | 0.32(1) | 0.32 | 0.23 | 0.24 | |||||||||||||||||
Net realized and unrealized gain/(loss) | (0.06) | 4.14 | 3.67 | (1.17) | 4.56 | |||||||||||||||||
Total from Investment Operations | 0.15 | 4.46 | 3.99 | (0.94) | 4.80 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.68) | (0.35) | (0.16) | (0.17) | (0.16) | |||||||||||||||||
Distributions (from capital gains) | (4.76) | (3.07) | (0.78) | (1.63) | –(2) | |||||||||||||||||
Total Dividends and Distributions | (5.44) | (3.42) | (0.94) | (1.80) | (0.16) | |||||||||||||||||
Net Asset Value, End of Period | $19.76 | $25.05 | $24.01 | $20.96 | $23.70 | |||||||||||||||||
Total Return | 0.26% | 19.96% | 19.56% | (3.66)% | 25.24% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $2,414,536 | $3,996,592 | $5,584,059 | $6,202,441 | $7,796,637 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $3,167,714 | $4,815,160 | $6,004,535 | $6,737,743 | $7,597,129 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.69% | 0.74% | 0.77% | 0.84% | 0.99% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.69% | 0.73% | 0.76% | 0.83% | 0.99% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.94% | 1.29% | 1.19% | 1.16% | 1.02% | |||||||||||||||||
Portfolio Turnover Rate | 49% | 51% | 60% | 54% | 66% |
** | Annualized for periods of less than one full year. | |
(1) | Per share amounts are calculated based on average shares outstanding during the year. | |
(2) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
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Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
Perkins Mid Cap Value Fund (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in equity securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
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 L Shares are designed for pension and profit-sharing plans, employee benefit trusts, endowments, foundations and corporations, as well as high net worth individuals and financial intermediaries who are willing to maintain a minimum account balance of $250,000.
Class N Shares are generally available only to financial intermediaries purchasing on behalf of 401(k) plans, 457 plans, 403(b) plans, Taft-Hartley multi-employer plans, profit-sharing and money purchase pension plans, defined benefit plans and nonqualified deferred compensation plans. Class 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
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available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of June 30, 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 year. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
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Notes to Financial Statements (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, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
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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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.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the “Offsetting Assets and Liabilities” section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs, including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting
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Notes to Financial Statements (continued)
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 | ||||||
Credit Agricole, New York | $ 75,000,000 | $– | $ (75,000,000) | $– | ||||||
ING Financial Markets LLC | 117,700,000 | (117,700,000) | ||||||||
RBC Capital Markets Corp. | 40,000,000 | – | (40,000,000) | – | ||||||
Total | $232,700,000 | $– | $(232,700,000) | $– | ||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
All repurchase agreements are transacted under legally enforceable master repurchase agreements that give the Fund, in the event of default by the counterparty, the right to liquidate securities held and to offset receivables and payables with the counterparty. Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value exceeds the current market value of the repurchase agreements, including accrued interest.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Repurchase Agreements
The Fund and other funds advised by Janus Capital or its affiliates may transfer daily uninvested cash balances into one or more joint trading accounts. Assets in the joint trading accounts are invested in money market instruments and the proceeds are allocated to the participating funds on a pro rata basis.
Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value exceeds the current market value of the repurchase agreements, including accrued interest. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral or proceeds may be subject to legal proceedings.
3. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following
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table reflects the Fund’s “base” fee rate prior to any performance adjustment (expressed as an annual rate).
Fund | Base Fee Rate (%) | |||||
Perkins Mid Cap 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 Mid Cap Value Fund | Russell Midcap® Value Index | |||||
The calculation of the performance adjustment applies as follows:
Investment Advisory Fee = Base Fee Rate +/- Performance Adjustment
The investment advisory fee rate paid to Janus Capital by the Fund consists of two components: (1) a base fee calculated by applying the contractual fixed rate of the advisory fee to the Fund’s average daily net assets during the previous month (“Base Fee Rate”), plus or minus (2) a performance-fee adjustment (“Performance Adjustment”) calculated by applying a variable rate of up to 0.15% (positive or negative) to the Fund’s average daily net assets during the applicable performance measurement period.
The Fund’s prospectuses and statements of additional information contain additional information about performance-based fees. The amount shown as advisory fees on the Statement of Operations reflects the Base Fee Rate plus/minus any Performance Adjustment, if applicable. The performance adjusted investment advisory fee rate before any waivers and/or reimbursements of expenses for the year ended June 30, 2015 is below:
Performance Adjusted | ||||||
Investment Advisory | ||||||
Fund | Fee Rate (%) | |||||
Perkins Mid Cap Value Fund | 0.41 | |||||
Perkins Investment Management LLC (“Perkins”) serves as subadviser to the Fund. Perkins (together with its predecessors), has been in the investment management business since 1984 and provides day-to-day management of the Fund’s portfolio operations subject to the general oversight of Janus Capital. Janus Capital owns 100% of Perkins.
Janus Capital pays Perkins a subadvisory fee equal to 50% of the investment advisory fee paid by the Fund to Janus Capital (calculated after any applicable performance fee adjustment, fee waivers, and expense reimbursements). The subadvisory fee paid by Janus Capital to Perkins adjusts up or down based on the Fund’s performance relative to the Fund’s benchmark index over the performance measurement period.
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any performance adjustments to management fees, the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, Class R Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Fund | Expense Limit (%) | |||||
Perkins Mid Cap Value Fund | 0.77 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or 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
Janus Investment Fund | 27
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Notes to Financial Statements (continued)
arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class R Shares, Class S Shares, and Class T Shares for providing or procuring administrative services to investors in Class R Shares, Class S Shares, and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class R Shares, Class S Shares, and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class R Shares, Class S Shares, and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services receives an administrative fee based on the average daily net assets Class L Shares of the Fund based on the average proportion of the Fund’s total net assets sold directly and the average proportion of the Fund’s net assets sold through financial intermediaries on a monthly basis. The asset-weighted fee is calculated by applying a blended annual fee rate of 0.12% on average net assets for the proportion of assets sold directly and 0.25% on average net assets for the proportion of assets sold through financial intermediaries. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations. Janus Services has agreed to waive all or a portion of this fee. Such waiver is voluntary and could change or be terminated at any time at the discretion of Janus Services or Janus Capital without prior notification to shareholders. Removal of this fee waiver may have a significant impact on Class L Shares’ total expense ratio. If applicable, amounts waived to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, of up to 0.50% of the Class R Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “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
28 | JUNE 30, 2015
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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 $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the year ended June 30, 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 June 30, 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 year ended June 30, 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 $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 2015.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the year ended June 30, 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 year ended June 30, 2015, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Perkins Mid Cap Value Fund | $ | 11,663 | ||||
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 year ended June 30, 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 year ended June 30, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Perkins Mid Cap Value Fund | $ | 3,445 | ||||
4. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation, derivatives, tax equalization, and foreign currency contract adjustments. 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.
Janus Investment Fund | 29
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Notes to Financial Statements (continued)
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
Perkins Mid Cap Value Fund | $25,285,457 | $518,385,321 | $– | $– | $– | $(78,259) | $1,041,863,620 | ||||||||||||||||||||||||
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 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.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
Perkins Mid Cap Value Fund | $4,519,026,640 | $1,162,864,292 | $(121,000,672) | |||||||||||
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. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the year ended June 30, 2015
Distributions | |||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | ||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | |||||||||||||||
Perkins Mid Cap Value Fund | $300,105,065 | $1,301,901,382 | $– | $– | |||||||||||||||
For the year ended June 30, 2014
Distributions | |||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | ||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | |||||||||||||||
Perkins Mid Cap Value Fund | $292,978,286 | $1,078,700,530 | $– | $– | |||||||||||||||
Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
Perkins Mid Cap Value Fund | $ | 130,633,987 | $ | 9,563,409 | $ | (140,197,396) | ||||||||
Capital has been adjusted by $130,633,987, including $121,846,160 of long-term capital gain, for distributions in connection with Fund share redemptions (tax equalization).
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5. | Capital Share Transactions |
Perkins Mid Cap Value Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 1,943,164 | 5,594,564 | ||||||||
Reinvested dividends and distributions | 2,702,929 | 4,146,398 | ||||||||
Shares repurchased | (12,773,517) | (28,091,375) | ||||||||
Net Increase/(Decrease) in Fund Shares | (8,127,424) | (18,350,413) | ||||||||
Shares Outstanding, Beginning of Period | 19,068,715 | 37,419,128 | ||||||||
Shares Outstanding, End of Period | 10,941,291 | 19,068,715 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 619,844 | 750,159 | ||||||||
Reinvested dividends and distributions | 1,182,289 | 766,364 | ||||||||
Shares repurchased | (2,398,028) | (2,999,642) | ||||||||
Net Increase/(Decrease) in Fund Shares | (595,895) | (1,483,119) | ||||||||
Shares Outstanding, Beginning of Period | 6,513,351 | 7,996,470 | ||||||||
Shares Outstanding, End of Period | 5,917,456 | 6,513,351 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 995,769 | 1,112,198 | ||||||||
Reinvested dividends and distributions | 9,625,261 | 5,125,907 | ||||||||
Shares repurchased | (6,138,814) | (4,885,340) | ||||||||
Net Increase/(Decrease) in Fund Shares | 4,482,216 | 1,352,765 | ||||||||
Shares Outstanding, Beginning of Period | 37,525,950 | 36,173,185 | ||||||||
Shares Outstanding, End of Period | 42,008,166 | 37,525,950 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 24,096,092 | 23,049,685 | ||||||||
Reinvested dividends and distributions | 20,070,726 | 13,375,489 | ||||||||
Shares repurchased | (64,229,193) | (71,226,785) | ||||||||
Net Increase/(Decrease) in Fund Shares | (20,062,375) | (34,801,611) | ||||||||
Shares Outstanding, Beginning of Period | 91,470,786 | 126,272,397 | ||||||||
Shares Outstanding, End of Period | 71,408,411 | 91,470,786 | ||||||||
Transactions in Fund Shares – Class L Shares: | ||||||||||
Shares sold | 38,877 | 24,139 | ||||||||
Reinvested dividends and distributions | 164,546 | 117,431 | ||||||||
Shares repurchased | (476,359) | (240,733) | ||||||||
Net Increase/(Decrease) in Fund Shares | (272,936) | (99,163) | ||||||||
Shares Outstanding, Beginning of Period | 903,721 | 1,002,884 | ||||||||
Shares Outstanding, End of Period | 630,785 | 903,721 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 2,375,269 | 9,263,844 | ||||||||
Reinvested dividends and distributions | 3,969,655 | 1,647,764 | ||||||||
Shares repurchased | (7,940,835) | (4,264,457) | ||||||||
Net Increase/(Decrease) in Fund Shares | (1,595,911) | 6,647,151 | ||||||||
Shares Outstanding, Beginning of Period | 15,894,801 | 9,247,650 | ||||||||
Shares Outstanding, End of Period | 14,298,890 | 15,894,801 | ||||||||
Transactions in Fund Shares – Class R Shares: | ||||||||||
Shares sold | 968,265 | 1,208,749 | ||||||||
Reinvested dividends and distributions | 1,032,663 | 705,044 | ||||||||
Shares repurchased | (2,581,917) | (3,638,728) | ||||||||
Net Increase/(Decrease) in Fund Shares | (580,989) | (1,724,935) | ||||||||
Shares Outstanding, Beginning of Period | 5,127,724 | 6,852,659 | ||||||||
Shares Outstanding, End of Period | 4,546,735 | 5,127,724 |
Janus Investment Fund | 31
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Notes to Financial Statements (continued)
Perkins Mid Cap Value Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 2,887,949 | 5,098,037 | ||||||||
Reinvested dividends and distributions | 2,678,387 | 3,002,312 | ||||||||
Shares repurchased | (11,107,693) | (22,223,782) | ||||||||
Net Increase/(Decrease) in Fund Shares | (5,541,357) | (14,123,433) | ||||||||
Shares Outstanding, Beginning of Period | 15,531,890 | 29,655,323 | ||||||||
Shares Outstanding, End of Period | 9,990,533 | 15,531,890 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 10,089,893 | 17,778,672 | ||||||||
Reinvested dividends and distributions | 34,237,171 | 27,339,038 | ||||||||
Shares repurchased | (81,681,244) | (118,113,969) | ||||||||
Net Increase/(Decrease) in Fund Shares | (37,354,180) | (72,996,259) | ||||||||
Shares Outstanding, Beginning of Period | 159,562,351 | 232,558,610 | ||||||||
Shares Outstanding, End of Period | 122,208,171 | 159,562,351 |
6. | Purchases and Sales of Investment Securities |
For the year ended June 30, 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 Mid Cap Value Fund | $3,392,003,488 | $6,456,601,518 | $– | $– | ||||||
7. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of Perkins Mid Cap Value Fund:
of Perkins Mid Cap Value Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Perkins Mid Cap Value Fund (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
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
34 | JUNE 30, 2015
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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
Janus Investment Fund | 43
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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 June 30, 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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Designation Requirements (unaudited)
For federal income tax purposes, the Fund designated the following for the year ended June 30, 2015:
Capital Gain Distributions
Fund | ||||||||||
Perkins Mid Cap Value Fund | $ | 1,423,747,542 | ||||||||
Dividends Received Deduction Percentage
Fund | ||||||||||
Perkins Mid Cap Value Fund | 100 | % | ||||||||
Qualified Dividend Income Percentage
Fund | ||||||||||
Perkins Mid Cap Value Fund | 100 | % | ||||||||
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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
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OFFICERS
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
Janus Investment Fund | 53
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Janus provides access to a wide range of investment disciplines.
Alternative
Janus alternative funds seek to deliver strong risk-adjusted returns over a full market cycle with lower correlation to equity markets than traditional investments.
Asset Allocation
Janus’ asset allocation funds utilize our fundamental, bottom-up research to balance risk over the long term. From fund options that meet investors’ risk tolerance and objectives to a method that incorporates non-traditional investment choices to seek non-correlated sources of risk and return, Janus’ asset allocation funds aim to allocate risk more effectively.
Fixed Income
Janus fixed income funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek capital preservation and liquidity with current income as a secondary objective.
Global & International
Janus global and international funds seek to leverage Janus’ research capabilities by taking advantage of inefficiencies in foreign markets, where accurate information and analytical insight are often at a premium.
Growth & Core
Janus growth funds focus on companies believed to be the leaders in their respective industries, with solid management teams, expanding market share, margins and efficiencies. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical funds seek to outperform their respective indices while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH (a Janus subsidiary), these funds use a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
For more information about our funds, contact your investment professional or go to janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus).
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-0815-94027 | 125-02-93032 08-15 |
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annual report
June 30, 2015
Perkins Select Value Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
Table of Contents
Perkins Select Value Fund
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Perkins Select Value Fund (unaudited)
FUND SNAPSHOT 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. We do this by investing in securities that we believe have favorable reward-to-risk ratios and by focusing first on rigorous downside analysis prior to determining upside potential. We believe in the timeless adage of the “power of compounding” and reflect this in our focus on mitigating losses in difficult markets. | Robert Perkins co-portfolio manager | Alec Perkins co-portfolio manager |
PERFORMANCE OVERVIEW
During the 12 months ended June 30, 2015, Perkins Select Value Fund’s Class I Shares returned 3.58%, while the Fund’s benchmark, the Russell 3000 Value Index, returned 3.86%. Our stock selection in health care, energy and industrials weighed on relative performance, while our overweighting to the health care sector was a positive. Stock selection in information technology (IT), consumer staples and consumer discretionary were positive contributors while group weighting to IT and discretionary stocks were a drag over the 12-month period. In aggregate, group weighting was positive while cash was a negative.
At the industry level we had particular success with food retailers as Casey’s General Stores, continued to execute well in the small rural markets that they serve. On the negative side of the ledger we were most impacted by oil and gas storage names that sold off with the decline in oil prices as OPEC discontinued their long-standing support of the commodity. Our underweight to the energy sector helped mitigate some of this negative attribution. On a relative basis we were also negatively impacted by two groups we did not own. In health care we did not own managed care stocks due to high valuations and the potential risk from a negative court ruling on the Affordable Care Act (ACA). Ultimately the Supreme Court ruled in favor of the ACA, and those sectors deemed at greatest risk if the Court ruled against it turned into the strongest performers for the period. Our second omission was the lack of ownership of three of the four major money center banks which performed well in the period. On the positive side the names we owned in application software were additive to performance. Informatica benefited from a buyout announced in the period.
MARKET ENVIRONMENT
The factors that have powered the U.S. equity market on to record highs continue to be intact. Loose monetary policy on a global basis has served as jet fuel to equity markets around the world and allowed investors to look past several global macro issues that we would expect to lead to a more significant increase in volatility or a meaningful market correction. Uncertainty in Greece and in the eurozone more broadly, concern about slowing growth in China, the potential for the Federal Reserve (Fed) to raise rates in the near future, or simply escalating equity valuations in the U.S. are all issues that might in a more normal monetary environment convince investors to exercise caution. In the current low-rate environment they have been simply hiccups on the path to higher highs.
As we have mentioned before, it appears to us that complacency remains in investor psychology as the S&P 500 Index, a broad market measure, has gone almost four years without a 10% correction, an unusually long time. Given the low level of interest rates, it can be argued that the market is fairly valued based on the S&P 500 trading at 17.4x 2015 estimated earnings. However, based on the Shiller P/E ratio (a price-to-earnings ratio which incorporates inflation adjusted earnings over the past 10 years) the market is trading at a much loftier 27x. This is well above its historical mean of 15.95x and significantly above its long-term average. To put this into context, other instances when this valuation metric was at this level, or higher, included 1929, 2000 and 2007.
A potential headwind for the sustainability of the current P/E multiple is corporate profits. In the first quarter of 2015, S&P 500 companies delivered paltry earnings growth of 0.80% compared to the same period a year ago. The forecast for the second quarter is for a decline of 4.5%. With profit margins at record highs and interest costs abnormally low, there could be headwinds for corporate profitability in the not so distant future.
Meanwhile, the underlying U.S. economy is posting less than stellar results. GDP in the first quarter was negative, and although unemployment appears healthy, labor force participation recently came in at the lowest level in 40 years. To compound the problem, despite the Fed’s
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best efforts to stimulate inflation, wage inflation has struggled to reach the 2% level that would indicate a healthier economy. Of course in the current “bad news is good news environment” this very likely means that low rates will remain in the near-term, and markets could continue their steady march higher. As we have said before on this topic, no matter how long we wait, rising rates are simply not a matter of if, but when.
DETRACTORS
QEP Midstream Partners LP owns, operates, acquires and develops midstream gathering systems and pipelines. The shares of the company declined in the period as the company’s general partner, QEP Resources, sold its field services midstream business and its 58% ownership in QEP Midstream Partners LP’s shares to Tesoro Logistics LP for approximately $2.5 billion. QEP Midstream Partners LP’s distribution growth outlook effectively dissolved as its new general partner, Tesoro Logistics LP, did not have the same incentive as QEP Resources to drop down accretive assets and grow the distribution at QEP Midstream Partners LP. Furthermore, the steep decline in global commodity prices led to a sell-off across master limited partnerships (MLPs). We exited our position in QEP Midstream Partners LP as we believed that QEP’s deal with Tesoro Logistics LP was not in the best long-term interest of QEP shareholders.
Whiting Petroleum is an exploration and production company that has significant acreage and crude oil reserves in the Rocky Mountain region. The shares declined given the rapid decline in oil prices during the period. Whiting has more of its current production and reserves levered to crude oil relative to its peers. The company reported in line third quarter 2014 earnings results which were driven by solid well productivity in the Bakken shale play but the market became increasingly concerned about the increased debt on the balance sheet to finance their deal to acquire Kodiak Oil and Gas. We exited the position during the period as we are not fans of companies that take on additional leverage in a volatile market environment.
Plains GP Holdings LP (PAGP) is the general partner of Plains All American Pipeline LP. The company has increasing claims on the cash flows generated by its limited partner, which has benefited from increasing crude oil volume growth in the U.S. The shares modestly underperformed its MLP peers as a very strong third quarter earnings report was not enough to offset conservative 2015 distribution guidance and the rapid decline in crude oil prices. The company also acquired 50% of the BridgeTex pipeline joint venture from Occidental Petroleum that should complement PAGP’s growing asset base in the Permian Basin. We eliminated our holdings in the stock as we were concerned with the clouded outlook for distribution growth given the steep decline in crude prices.
CONTRIBUTORS
Casey’s General Stores operates nearly 1,900 convenience store locations throughout smaller towns in the Midwest U.S., and has begun expanding into the Southeast, including Tennessee and Arkansas. The firm has done a solid job in executing its growth strategy – posting strong same store sales growth, expanding distribution centers, allowing the company to decrease costs going forward and serve broader geographic markets. We continue to like the execution of Casey’s long-term strategy and thus the stock remains our largest holding in the portfolio.
Informatica Corp. sells enterprise data integration software and services. The stock’s strong performance was driven by solid fundamental results, activist involvement, and the announcement by management that they will sell the company to private equity investors. We were encouraged prior to the announcement of the sale because of the business rebound on improved sales execution. We view the actual sale of Informatica as confirmation of our investment process that focuses on high quality franchises, with strong balance sheets, recurring free cash flow and positive business prospects that have fallen out of favor with investors.
Irish Continental Group also contributed to performance. A maritime transport group based in Ireland, the company’s primary business is operating ferries on the Irish Sea, where it faces limited competition and enjoys significant barriers to entry. After a crushing downturn from 2008 to 2011, the Irish economy has recently begun to grow off a low base. During the period, the company announced solid growth in both revenues and profits, market share gains and a significant investment in new capacity that we believe will generate good long-term returns. The market reacted favorably to these developments. Despite the higher stock price, we continue to feel that the company is attractively priced against our estimate of its mid-cycle profitability. We also anticipate the company will increase its dividend. Thus, we continue to hold the name in size.
MARKET OUTLOOK
As we look ahead, it appears to us that the Fed has clearly telegraphed its intention, and has initiated the process, of slowly reducing the amount of liquidity injected
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into the system and has stated its preference to raise interest rates, “not now, but soon.” Of course this will be dependent on both inflation and jobs data. As mentioned earlier, recent economic data has been mixed, with first quarter GDP contracting and expectations for the second quarter in the 2% range – far from rapid growth. Meanwhile, nonfarm payrolls continue to increase without much wage inflation, but the labor force participation rate remains stuck at near record lows. While we do not pretend to make specific calls on the direction of rates in the near-term, we feel fairly certain we know where they are headed in the long-term.
Given this backdrop, the odds would seem to favor increased market volatility. As valuations remain at the upper end of historical ranges, and thus with little room for error, we continue to remain vigilant about the potential for downside risk. As value investors we would of course welcome increased volatility as a chance to pick up high-quality issues that have traded off unnecessarily, or the proverbial baby thrown out with the bathwater.
To us, the overall environment has not changed much over the last 12 months and our sector positioning has not materially changed in the period as a result. Our overweight sectors on a relative basis continue to include health care, and more defensive names in industrials and information technology. In technology in particular we favor names with high recurring revenues and attractive balance sheets. Conversely, our underweight sectors include financials, energy, consumer discretionary, basic materials and utilities. Uncertainties over Greece, the economic slowdown and stock market volatility in China, assorted geopolitical threats, as well as the growth trajectory of the U.S. economy all are factors that lead us to be cautious given equity valuations.
At Perkins we see it as our job not to lose sight of these various risks in the market and to continue to construct portfolios that can weather storms of all varieties. This is what we have done for over 35 years and what we will continue to do today. Thus, we continue our focus on building a portfolio of high quality stocks that we believe will minimize downside risk and outperform the benchmark and peers over a full market cycle.
Thank you for your investment with us in Perkins Select Value Fund.
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Perkins Select Value Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Casey’s General Stores, Inc. | 1.55% | |||
Informatica Corp. | 0.80% | |||
Irish Continental Group PLC | 0.78% | |||
Zoetis, Inc. | 0.71% | |||
MarineMax, Inc. | 0.71% |
5 Bottom Performers – Holdings
Contribution | ||||
QEP Midstream Partners LP | –0.92% | |||
Whiting Petroleum Corp. | –0.50% | |||
Plains GP Holdings LP – Class A | –0.48% | |||
Occidental Petroleum Corp. | –0.44% | |||
Pfeiffer Vacuum Technology AG | –0.39% |
5 Top Performers – Sectors*
Fund Weighting | Russell 3000® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Information Technology | 1.24% | 13.08% | 9.35% | |||||||||
Consumer Staples | 0.61% | 6.31% | 6.82% | |||||||||
Utilities | 0.35% | 1.62% | 6.22% | |||||||||
Consumer Discretionary | 0.15% | 2.27% | 6.89% | |||||||||
Materials | 0.10% | 1.26% | 3.29% |
5 Bottom Performers – Sectors*
Fund Weighting | Russell 3000® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Industrials | –0.43% | 12.37% | 10.43% | |||||||||
Other** | –0.42% | 8.31% | 0.00% | |||||||||
Health Care | –0.41% | 26.75% | 13.31% | |||||||||
Financials | –0.38% | 18.55% | 30.27% | |||||||||
Energy | –0.18% | 9.26% | 11.34% |
Security contribution to performance is measured by using an algorithm that multiplies the daily performance of each security with the previous day’s ending weight in the portfolio and is gross of advisory fees. Fixed income securities and certain equity securities, such as private placements and some share classes of equity securities, are excluded. | ||
* | Based on sector classification according to the Global Industry Classification Standard (“GICS”) codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
** | Not a GICS classified sector. |
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5 Largest Equity Holdings – (% of Net Assets)
As of June 30, 2015
Casey’s General Stores, Inc. Food & Staples Retailing | 5.5% | |||
Laboratory Corp. of America Holdings Health Care Providers & Services | 3.4% | |||
Heritage Financial Corp. Commercial Banks | 2.7% | |||
Stryker Corp. Health Care Equipment & Supplies | 2.5% | |||
Johnson & Johnson Pharmaceuticals | 2.5% | |||
16.6% |
Asset Allocation – (% of Net Assets)
As of June 30, 2015
Top Country Allocations – Long Positions (% of Investment Securities)
As of June 30, 2015
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Performance
Average Annual Total Return – for the periods ended June 30, 2015 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||
One | Since | Total Annual Fund | Net Annual Fund | ||||||
Year | Inception* | Operating Expenses | Operating Expenses | ||||||
Perkins Select Value Fund – Class A Shares | |||||||||
NAV | 3.21% | 12.84% | 1.34% | 1.08% | |||||
MOP | –2.70% | 10.97% | |||||||
Perkins Select Value Fund – Class C Shares | |||||||||
NAV | 2.43% | 11.99% | 2.10% | 1.83% | |||||
CDSC | 1.45% | 11.99% | |||||||
Perkins Select Value Fund – Class D Shares(1) | 3.49% | 13.09% | 1.06% | 0.81% | |||||
Perkins Select Value Fund – Class I Shares | 3.58% | 13.24% | 0.89% | 0.64% | |||||
Perkins Select Value Fund – Class S Shares | 3.18% | 12.64% | 1.40% | 1.17% | |||||
Perkins Select Value Fund – Class T Shares | 3.39% | 12.99% | 1.16% | 0.90% | |||||
Russell 3000® Value Index | 3.86% | 18.42% | |||||||
Morningstar Quartile – Class I Shares | 3rd | 4th | |||||||
Morningstar Ranking – based on total returns for Mid-Cap Value Funds | 269/505 | 428/455 | |||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
See important disclosures on the next page.
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The expense ratios for Class S Shares are estimated.
This Fund has a performance-based management fee that may adjust up or down based on the Fund’s performance.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility, lower liquidity and differing financial and information reporting standards, all of which are magnified in emerging markets.
Holding a meaningful portion of assets in cash or cash equivalents may negatively affect performance.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 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 certain new investors. |
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Perkins Select Value Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,019.60 | $ | 5.01 | $ | 1,000.00 | $ | 1,019.84 | $ | 5.01 | 1.00% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,015.60 | $ | 9.15 | $ | 1,000.00 | $ | 1,015.72 | $ | 9.15 | 1.83% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,021.20 | $ | 3.96 | $ | 1,000.00 | $ | 1,020.88 | $ | 3.96 | 0.79% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,021.20 | $ | 3.86 | $ | 1,000.00 | $ | 1,020.98 | $ | 3.86 | 0.77% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,019.60 | $ | 5.36 | $ | 1,000.00 | $ | 1,019.49 | $ | 5.36 | 1.07% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,021.20 | $ | 4.46 | $ | 1,000.00 | $ | 1,020.38 | $ | 4.46 | 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 181/365 (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 Select Value Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Common Stocks – 90.1% | ||||||||||
Auto Components – 1.4% | ||||||||||
31,468 | Standard Motor Products, Inc. | $ | 1,105,156 | |||||||
Beverages – 0.7% | ||||||||||
12,000 | Coca-Cola Enterprises, Inc. | 521,280 | ||||||||
Building Products – 0.9% | ||||||||||
20,000 | Simpson Manufacturing Co., Inc. | 680,000 | ||||||||
Chemicals – 1.1% | ||||||||||
16,000 | FMC Corp. | 840,800 | ||||||||
Commercial Banks – 8.7% | ||||||||||
15,000 | Bank of Marin Bancorp | 763,050 | ||||||||
20,000 | FCB Financial Holdings, Inc. – Class A* | 636,000 | ||||||||
120,000 | Heritage Financial Corp. | 2,144,400 | ||||||||
14,000 | PNC Financial Services Group, Inc. | 1,339,100 | ||||||||
42,000 | Umpqua Holdings Corp. | 755,580 | ||||||||
22,000 | Wells Fargo & Co. | 1,237,280 | ||||||||
6,875,410 | ||||||||||
Commercial Services & Supplies – 3.1% | ||||||||||
32,000 | Tyco International PLC | 1,231,360 | ||||||||
25,000 | Waste Connections, Inc. | 1,178,000 | ||||||||
2,409,360 | ||||||||||
Communications Equipment – 1.1% | ||||||||||
14,000 | QUALCOMM, Inc. | 876,820 | ||||||||
Electrical Equipment – 1.5% | ||||||||||
35,000 | Babcock & Wilcox Co.* | 1,148,000 | ||||||||
Energy Equipment & Services – 1.9% | ||||||||||
14,000 | Dril-Quip, Inc.* | 1,053,500 | ||||||||
20,000 | Tidewater, Inc. | 454,600 | ||||||||
1,508,100 | ||||||||||
Food & Staples Retailing – 5.5% | ||||||||||
45,000 | Casey’s General Stores, Inc. | 4,308,300 | ||||||||
Health Care Equipment & Supplies – 2.5% | ||||||||||
21,000 | Stryker Corp. | 2,006,970 | ||||||||
Health Care Providers & Services – 6.1% | ||||||||||
22,000 | Laboratory Corp. of America Holdings* | 2,666,840 | ||||||||
25,800 | Landauer, Inc. | 919,512 | ||||||||
32,000 | Premier, Inc. – Class A* | 1,230,720 | ||||||||
4,817,072 | ||||||||||
Health Care Technology – 0.9% | ||||||||||
20,000 | Omnicell, Inc.* | 754,200 | ||||||||
Hotels, Restaurants & Leisure – 1.7% | ||||||||||
24,000 | Cedar Fair LP | 1,307,760 | ||||||||
Household Products – 0.8% | ||||||||||
8,000 | Procter & Gamble Co. | 625,920 | ||||||||
Industrial Conglomerates – 0.8% | ||||||||||
30,000 | Raven Industries, Inc. | 609,900 | ||||||||
Information Technology Services – 2.1% | ||||||||||
26,000 | Jack Henry & Associates, Inc. | 1,682,200 | ||||||||
Life Sciences Tools & Services – 2.6% | ||||||||||
36,000 | Agilent Technologies, Inc. | 1,388,880 | ||||||||
5,000 | Thermo Fisher Scientific, Inc. | 648,800 | ||||||||
2,037,680 | ||||||||||
Machinery – 3.1% | ||||||||||
16,000 | Pfeiffer Vacuum Technology AG | 1,425,393 | ||||||||
28,000 | Timken Co. | 1,023,960 | ||||||||
2,449,353 | ||||||||||
Marine – 2.3% | ||||||||||
405,000 | Irish Continental Group PLC | 1,778,732 | ||||||||
Oil, Gas & Consumable Fuels – 6.0% | ||||||||||
15,000 | Anadarko Petroleum Corp. | 1,170,900 | ||||||||
100,000 | Cone Midstream Partners LP | 1,770,000 | ||||||||
212,919 | Lone Pine Resources Canada, Ltd.*,§ | 120,195 | ||||||||
212,919 | Lone Pine Resources, Inc.*,§ | 135,493 | ||||||||
20,000 | Occidental Petroleum Corp. | 1,555,400 | ||||||||
4,751,988 | ||||||||||
Pharmaceuticals – 9.7% | ||||||||||
25,000 | AbbVie, Inc. | 1,679,750 | ||||||||
20,000 | Johnson & Johnson | 1,949,200 | ||||||||
22,000 | Merck & Co., Inc. | 1,252,460 | ||||||||
18,000 | Novartis AG (ADR) | 1,770,120 | ||||||||
20,000 | Zoetis, Inc. | 964,400 | ||||||||
7,615,930 | ||||||||||
Real Estate Investment Trusts (REITs) – 10.7% | ||||||||||
8,000 | Alexandria Real Estate Equities, Inc. | 699,680 | ||||||||
16,000 | EastGroup Properties, Inc. | 899,680 | ||||||||
37,000 | Healthcare Trust of America, Inc. – Class A | 886,150 | ||||||||
25,000 | Home Properties, Inc. | 1,826,250 | ||||||||
27,000 | Plum Creek Timber Co., Inc. | 1,095,390 | ||||||||
55,000 | Potlatch Corp. | 1,942,600 | ||||||||
35,000 | Weyerhaeuser Co. | 1,102,500 | ||||||||
8,452,250 | ||||||||||
Road & Rail – 2.4% | ||||||||||
8,000 | Kansas City Southern | 729,600 | ||||||||
12,000 | Union Pacific Corp. | 1,144,440 | ||||||||
1,874,040 | ||||||||||
Semiconductor & Semiconductor Equipment – 1.7% | ||||||||||
28,000 | Microchip Technology, Inc. | 1,327,900 | ||||||||
Software – 8.4% | ||||||||||
16,000 | Check Point Software Technologies, Ltd.* | 1,272,800 | ||||||||
35,000 | Informatica Corp.* | 1,696,450 | ||||||||
15,000 | Microsoft Corp. | 662,250 | ||||||||
32,000 | Oracle Corp. | 1,289,600 | ||||||||
34,000 | Synopsys, Inc.* | 1,722,100 | ||||||||
6,643,200 | ||||||||||
Thrifts & Mortgage Finance – 2.4% | ||||||||||
100,000 | OceanFirst Financial Corp. | 1,865,000 | ||||||||
Total Common Stocks (cost $60,690,629) | 70,873,321 | |||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
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Perkins Select Value Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Repurchase Agreements – 6.4% | ||||||||||
$5,000,000 | Undivided interest of 2.5% in a joint repurchase agreement (principal amount $200,300,000 with a maturity value of $200,300,556) with ING Financial Markets LLC, 0.1000%, dated 6/30/15, maturing 7/1/15, to be repurchased at $5,000,014 collateralized by $220,243,953 in U.S. Treasuries, 0% – 4.2500%, 10/31/15 – 11/15/43, with a value of $204,308,612 (cost $5,000,000) | $ | 5,000,000 | |||||||
Total Investments (total cost $65,690,629) – 96.5% | 75,873,321 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 3.5% | 2,751,080 | |||||||||
Net Assets – 100% | $ | 78,624,401 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States | $ | 69,370,588 | 91 | .4% | ||||
Ireland | 1,778,732 | 2 | .3 | |||||
Switzerland | 1,770,120 | 2 | .3 | |||||
Germany | 1,425,393 | 1 | .9 | |||||
Israel | 1,272,800 | 1 | .7 | |||||
China | 135,493 | 0 | .2 | |||||
Canada | 120,195 | 0 | .2 | |||||
Total | $ | 75,873,321 | 100 | .0% | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | JUNE 30, 2015
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Notes to Schedule of Investments and Other Information
Russell 3000® Value Index | Measures the performance of the broad value segment of the U.S. equity universe. The index includes those Russell 3000® Index companies with lower price-to-book ratios and lower forecasted growth values. | |
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 |
* | Non-income producing security. |
§ | Schedule of Restricted and Illiquid Securities (as of June 30, 2015) |
Acquisition | Value as a | |||||||||||||
Date | Cost | Value | % of Net Assets | |||||||||||
Perkins Select Value Fund | ||||||||||||||
Lone Pine Resources Canada, Ltd. | 2/4/14 | $ | 135,493 | $ | 120,195 | 0.1 | % | |||||||
Lone Pine Resources, Inc. | 2/4/14 | 135,493 | 135,493 | 0.2 | ||||||||||
Total | $ | 270,986 | $ | 255,688 | 0.3 | % | ||||||||
The Fund has registration rights for certain restricted securities held as of June 30, 2015. The issuer incurs all registration costs.
The following is a summary of the inputs that were used to value the Fund’s investments in securities and other financial instruments as of June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Perkins Select Value Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | |||||||||||
Oil, Gas & Consumable Fuels | $ | 4,496,300 | $ | – | $ | 255,688 | |||||
All Other | 66,121,333 | – | – | ||||||||
Repurchase Agreements | – | 5,000,000 | – | ||||||||
Total Assets | $ | 70,617,633 | $ | 5,000,000 | $ | 255,688 | |||||
Janus Investment Fund | 11
Table of Contents
Statement of Assets and Liabilities
As of June 30, 2015 | Perkins Select Value Fund | |||
Assets: | ||||
Investments, at cost(1) | $ | 65,690,629 | ||
Investments, at value | $ | 70,873,321 | ||
Repurchase agreements, at value | 5,000,000 | |||
Cash | 44,055 | |||
Non-interested Trustees’ deferred compensation | 1,572 | |||
Receivables: | ||||
Investments sold | 2,663,451 | |||
Fund shares sold | 1,500 | |||
Dividends | 97,997 | |||
Foreign dividend tax reclaim | 34,447 | |||
Interest | 14 | |||
Other assets | 116 | |||
Total Assets | 78,716,473 | |||
Liabilities: | ||||
Payables: | ||||
Advisory fees | 17,955 | |||
Fund administration fees | 629 | |||
Transfer agent fees and expenses | 19,204 | |||
12b-1 Distribution and shareholder servicing fees | 78 | |||
Non-interested Trustees’ fees and expenses | 519 | |||
Non-interested Trustees’ deferred compensation fees | 1,572 | |||
Accrued expenses and other payables | 52,115 | |||
Total Liabilities | 92,072 | |||
Net Assets | $ | 78,624,401 |
See Notes to Financial Statements.
12 | JUNE 30, 2015
Table of Contents
As of June 30, 2015 | Perkins Select Value Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 63,673,167 | ||
Undistributed net investment income/(loss) | 205,128 | |||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | 4,566,673 | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 10,179,433 | |||
Total Net Assets | $ | 78,624,401 | ||
Net Assets - Class A Shares | $ | 95,408 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 7,633 | |||
Net Asset Value Per Share(2) | $ | 12.50 | ||
Maximum Offering Price Per Share(3) | $ | 13.26 | ||
Net Assets - Class C Shares | $ | 53,895 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 4,351 | |||
Net Asset Value Per Share(2) | $ | 12.39 | ||
Net Assets - Class D Shares | $ | 6,611,662 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 527,805 | |||
Net Asset Value Per Share | $ | 12.53 | ||
Net Assets - Class I Shares | $ | 70,485,598 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,622,478 | |||
Net Asset Value Per Share | $ | 12.54 | ||
Net Assets - Class S Shares | $ | 51,701 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 4,139 | |||
Net Asset Value Per Share | $ | 12.49 | ||
Net Assets - Class T Shares | $ | 1,326,137 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 106,020 | |||
Net Asset Value Per Share | $ | 12.51 |
(1) | Includes cost of repurchase agreements of $5,000,000. | |
(2) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(3) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Statement of Operations
Perkins Select | ||||
For the year ended June 30, 2015 | Value Fund | |||
Investment Income: | ||||
Interest | $ | 2,935 | ||
Dividends | 1,420,671 | |||
Foreign tax withheld | (24,111) | |||
Total Investment Income | 1,399,495 | |||
Expenses: | ||||
Advisory fees | 459,092 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 299 | |||
Class C Shares | 1,163 | |||
Class S Shares | 107 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 7,793 | |||
Class S Shares | 107 | |||
Class T Shares | 7,266 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 146 | |||
Class C Shares | 192 | |||
Class I Shares | 48,720 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 22 | |||
Class C Shares | 29 | |||
Class D Shares | 2,761 | |||
Class I Shares | 2,645 | |||
Class T Shares | 193 | |||
Shareholder reports expense | 10,447 | |||
Registration fees | 80,674 | |||
Custodian fees | 4,946 | |||
Professional fees | 51,069 | |||
Non-interested Trustees’ fees and expenses | 1,781 | |||
Fund administration fees | 7,356 | |||
Other expenses | 13,558 | |||
Total Expenses | 700,366 | |||
Less: Excess Expense Reimbursement | (112,907) | |||
Net Expenses | 587,459 | |||
Net Investment Income/(Loss) | 812,036 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 5,558,961 | |||
Total Net Realized Gain/(Loss) on Investments | 5,558,961 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (3,791,835) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (3,791,835) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 2,579,162 |
See Notes to Financial Statements.
14 | JUNE 30, 2015
Table of Contents
Statements of Changes in Net Assets
Perkins Select Value Fund | ||||||||
For each year ended June 30 | 2015 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 812,036 | $ | 1,416,924 | ||||
Net realized gain/(loss) on investments | 5,558,961 | 5,114,788 | ||||||
Change in unrealized net appreciation/depreciation | (3,791,835) | 6,460,223 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 2,579,162 | 12,991,935 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income | ||||||||
Class A Shares | (1,513) | (1,024) | ||||||
Class C Shares | (556) | (724) | ||||||
Class D Shares | (101,067) | (52,894) | ||||||
Class I Shares | (1,246,284) | (938,011) | ||||||
Class S Shares | (768) | (74) | ||||||
Class T Shares | (41,773) | (16,472) | ||||||
Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | (5,161) | (6,792) | ||||||
Class C Shares | (6,232) | (9,674) | ||||||
Class D Shares | (284,474) | (284,167) | ||||||
Class I Shares | (3,184,240) | (4,299,776) | ||||||
Class S Shares | (2,260) | (812) | ||||||
Class T Shares | (119,583) | (92,153) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (4,993,911) | (5,702,573) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 58,254 | 55,607 | ||||||
Class C Shares | 1,100 | 45,573 | ||||||
Class D Shares | 1,559,082 | 3,175,088 | ||||||
Class I Shares | 1,108,628 | 7,830,035 | ||||||
Class S Shares | 35,000 | – | ||||||
Class T Shares | 3,430,218 | 715,577 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 6,674 | 7,816 | ||||||
Class C Shares | 6,788 | 10,398 | ||||||
Class D Shares | 380,053 | 328,758 | ||||||
Class I Shares | 4,430,524 | 5,237,787 | ||||||
Class S Shares | 3,028 | 886 | ||||||
Class T Shares | 161,208 | 108,625 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (98,207) | (51,190) | ||||||
Class C Shares | (131,493) | (8,750) | ||||||
Class D Shares | (1,997,018) | (3,025,431) | ||||||
Class I Shares | (13,071,192) | (3,953,189) | ||||||
Class T Shares | (4,285,461) | (301,453) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (8,402,814) | 10,176,137 | ||||||
Net Increase/(Decrease) in Net Assets | (10,817,563) | 17,465,499 | ||||||
Net Assets: | ||||||||
Beginning of period | 89,441,964 | 71,976,465 | ||||||
End of period | $ | 78,624,401 | $ | 89,441,964 | ||||
Undistributed Net Investment Income/(Loss) | $ | 205,128 | $ | 874,293 |
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Financial Highlights
Class A Shares
Perkins Select Value Fund | ||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.85 | $11.76 | $10.82 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.09(2) | 0.17(2) | 0.11 | 0.04 | ||||||||||||||
Net realized and unrealized gain/(loss) | 0.31 | 1.79 | 1.66 | 0.78 | ||||||||||||||
Total from Investment Operations | 0.40 | 1.96 | 1.77 | 0.82 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | (0.17) | (0.11) | (0.10) | – | ||||||||||||||
Distributions (from capital gains) | (0.58) | (0.76) | (0.73) | – | ||||||||||||||
Total Dividends and Distributions | (0.75) | (0.87) | (0.83) | – | ||||||||||||||
Net Asset Value, End of Period | $12.50 | $12.85 | $11.76 | $10.82 | ||||||||||||||
Total Return* | 3.21% | 17.25% | 17.16% | 8.20% | ||||||||||||||
Net Assets, End of Period (in thousands) | $95 | $132 | $109 | $89 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $120 | $114 | $108 | $48 | ||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||
Ratio of Gross Expenses** | 1.16% | 1.34% | 1.35% | 1.51% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.03% | 1.23% | 1.21% | 1.26% | ||||||||||||||
Ratio of Net Investment Income/(Loss)** | 0.73% | 1.39% | 1.13% | 1.43% | ||||||||||||||
Portfolio Turnover Rate | 54% | 76% | 62% | 80% |
Class C Shares
Perkins Select Value Fund | ||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.72 | $11.68 | $10.78 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | (0.01)(2) | 0.08(2) | 0.03 | 0.02 | ||||||||||||||
Net realized and unrealized gain/(loss) | 0.31 | 1.78 | 1.65 | 0.76 | ||||||||||||||
Total from Investment Operations | 0.30 | 1.86 | 1.68 | 0.78 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | (0.05) | (0.06) | (0.05) | – | ||||||||||||||
Distributions (from capital gains) | (0.58) | (0.76) | (0.73) | – | ||||||||||||||
Total Dividends and Distributions | (0.63) | (0.82) | (0.78) | – | ||||||||||||||
Net Asset Value, End of Period | $12.39 | $12.72 | $11.68 | $10.78 | ||||||||||||||
Total Return* | 2.43% | 16.38% | 16.24% | 7.80% | ||||||||||||||
Net Assets, End of Period (in thousands) | $54 | $183 | $124 | $77 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $116 | $157 | $103 | $34 | ||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||
Ratio of Gross Expenses** | 1.96% | 2.10% | 2.05% | 2.40% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.83% | 1.95% | 1.97% | 1.99% | ||||||||||||||
Ratio of Net Investment Income/(Loss)** | (0.05)% | 0.65% | 0.36% | 0.68% | ||||||||||||||
Portfolio Turnover Rate | 54% | 76% | 62% | 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 December 15, 2011 (inception date) through June 30, 2012. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Financial Statements.
16 | JUNE 30, 2015
Table of Contents
Class D Shares
Perkins Select Value Fund | ||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.88 | $11.78 | $10.83 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.12(2) | 0.19(2) | 0.13 | 0.04 | ||||||||||||||
Net realized and unrealized gain/(loss) | 0.32 | 1.81 | 1.66 | 0.79 | ||||||||||||||
Total from Investment Operations | 0.44 | 2.00 | 1.79 | 0.83 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | (0.21) | (0.14) | (0.11) | – | ||||||||||||||
Distributions (from capital gains) | (0.58) | (0.76) | (0.73) | – | ||||||||||||||
Total Dividends and Distributions | (0.79) | (0.90) | (0.84) | – | ||||||||||||||
Net Asset Value, End of Period | $12.53 | $12.88 | $11.78 | $10.83 | ||||||||||||||
Total Return* | 3.49% | 17.56% | 17.34% | 8.30% | ||||||||||||||
Net Assets, End of Period (in thousands) | $6,612 | $6,830 | $5,742 | $3,004 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $6,494 | $5,827 | $4,266 | $1,593 | ||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||
Ratio of Gross Expenses** | 0.99% | 1.06% | 1.01% | 1.74% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.80% | 0.97% | 1.01% | 1.19% | ||||||||||||||
Ratio of Net Investment Income/(Loss)** | 0.93% | 1.57% | 1.43% | 1.37% | ||||||||||||||
Portfolio Turnover Rate | 54% | 76% | 62% | 80% |
Class I Shares
Perkins Select Value Fund | ||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.90 | $11.80 | $10.83 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.13(2) | 0.22(2) | 0.15 | 0.07 | ||||||||||||||
Net realized and unrealized gain/(loss) | 0.32 | 1.81 | 1.67 | 0.76 | ||||||||||||||
Total from Investment Operations | 0.45 | 2.03 | 1.82 | 0.83 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | (0.23) | (0.17) | (0.12) | – | ||||||||||||||
Distributions (from capital gains) | (0.58) | (0.76) | (0.73) | – | ||||||||||||||
Total Dividends and Distributions | (0.81) | (0.93) | (0.85) | – | ||||||||||||||
Net Asset Value, End of Period | $12.54 | $12.90 | $11.80 | $10.83 | ||||||||||||||
Total Return* | 3.58% | 17.76% | 17.61% | 8.30% | ||||||||||||||
Net Assets, End of Period (in thousands) | $70,486 | $80,260 | $64,631 | $58,880 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $71,660 | $72,827 | $61,876 | $58,109 | ||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||
Ratio of Gross Expenses** | 0.84% | 0.89% | 0.87% | 1.26% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.71% | 0.79% | 0.87% | 1.02% | ||||||||||||||
Ratio of Net Investment Income/(Loss)** | 1.02% | 1.78% | 1.46% | 1.30% | ||||||||||||||
Portfolio Turnover Rate | 54% | 76% | 62% | 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 December 15, 2011 (inception date) through June 30, 2012. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Financial Statements.
Janus Investment Fund | 17
Table of Contents
Financial Highlights (continued)
Class S Shares
Perkins Select Value Fund | ||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.87 | $11.77 | $10.81 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.07(2) | 0.14(2) | 0.09 | 0.04 | ||||||||||||||
Net realized and unrealized gain/(loss) | 0.33 | 1.79 | 1.66 | 0.77 | ||||||||||||||
Total from Investment Operations | 0.40 | 1.93 | 1.75 | 0.81 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | (0.20) | (0.07) | (0.06) | – | ||||||||||||||
Distributions (from capital gains) | (0.58) | (0.76) | (0.73) | – | ||||||||||||||
Total Dividends and Distributions | (0.78) | (0.83) | (0.79) | – | ||||||||||||||
Net Asset Value, End of Period | $12.49 | $12.87 | $11.77 | $10.81 | ||||||||||||||
Total Return* | 3.18% | 16.91% | 16.91% | 8.10% | ||||||||||||||
Net Assets, End of Period (in thousands) | $52 | $15 | $13 | $11 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $43 | $14 | $12 | $11 | ||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||
Ratio of Gross Expenses** | 1.23% | 1.65% | 1.52% | 1.70% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.10% | 1.45% | 1.40% | 1.47% | ||||||||||||||
Ratio of Net Investment Income/(Loss)** | 0.54% | 1.11% | 0.94% | 0.78% | ||||||||||||||
Portfolio Turnover Rate | 54% | 76% | 62% | 80% |
Class T Shares
Perkins Select Value Fund | ||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012(1) | ||||||||||||||
Net Asset Value, Beginning of Period | $12.87 | $11.77 | $10.82 | $10.00 | ||||||||||||||
Income/(Loss) from Investment Operations: | �� | |||||||||||||||||
Net investment income/(loss) | 0.09(2) | 0.19(2) | 0.13 | 0.04 | ||||||||||||||
Net realized and unrealized gain/(loss) | 0.33 | 1.81 | 1.65 | 0.78 | ||||||||||||||
Total from Investment Operations | 0.42 | 2.00 | 1.78 | 0.82 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | (0.20) | (0.14) | (0.10) | – | ||||||||||||||
Distributions (from capital gains) | (0.58) | (0.76) | (0.73) | – | ||||||||||||||
Total Dividends and Distributions | (0.78) | (0.90) | (0.83) | – | ||||||||||||||
Net Asset Value, End of Period | $12.51 | $12.87 | $11.77 | $10.82 | ||||||||||||||
Total Return* | 3.39% | 17.52% | 17.25% | 8.20% | ||||||||||||||
Net Assets, End of Period (in thousands) | $1,326 | $2,022 | $1,357 | $1,049 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $2,906 | $1,595 | $1,274 | $649 | ||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||
Ratio of Gross Expenses** | 1.01% | 1.16% | 1.11% | 1.44% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.89% | 1.04% | 1.11% | 1.26% | ||||||||||||||
Ratio of Net Investment Income/(Loss)** | 0.72% | 1.53% | 1.25% | 1.32% | ||||||||||||||
Portfolio Turnover Rate | 54% | 76% | 62% | 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 December 15, 2011 (inception date) through June 30, 2012. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Financial Statements.
18 | JUNE 30, 2015
Table of Contents
Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
Perkins Select Value Fund (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in equity securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
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 evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant
Janus Investment Fund | 19
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Notes to Financial Statements (continued)
governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of June 30, 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 June 30, 2015.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the year. 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, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
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
Janus Investment Fund | 21
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Notes to Financial Statements (continued)
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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and receivables and related collateral on the Statement of Assets and Liabilities.
The following table presents gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see the Fund’s Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets
Gross Amounts | ||||||||||||||||||
Counterparty | of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
ING Financial Markets LLC | $ | 5,000,000 | $ | – | $ | (5,000,000) | $ | – | ||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
All repurchase agreements are transacted under legally enforceable master repurchase agreements that give the Fund, in the event of default by the counterparty, the right to liquidate securities held and to offset receivables and payables with the counterparty. Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value exceeds the current market value of the repurchase agreements, including accrued interest.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Repurchase Agreements
The Fund and other funds advised by Janus Capital or its affiliates may transfer daily uninvested cash balances into one or more joint trading accounts. Assets in the joint trading accounts are invested in money market instruments and the proceeds are allocated to the participating funds on a pro rata basis.
Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value exceeds the current market value of the repurchase agreements, including accrued interest. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral or proceeds may be subject to legal proceedings.
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.
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 (%) | |||||
Perkins Select Value Fund | 0.70 | |||||
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 Select Value Fund | Russell 3000® Value Index | |||||
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Notes to Financial Statements (continued)
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 year ended June 30, 2015 is below:
Performance Adjusted | ||||||
Investment Advisory | ||||||
Fund | Fee Rate (%) | |||||
Perkins Select Value Fund | 0.56 | |||||
Perkins Investment Management LLC (“Perkins”) serves as subadviser to the Fund. Perkins (together with its predecessors), has been in the investment management business since 1984 and provides day-to-day management of the Fund’s portfolio operations subject to the general oversight of Janus Capital. Janus Capital owns 100% of Perkins.
Janus Capital pays Perkins a subadvisory fee equal to 50% of the investment advisory fee paid by the Fund to Janus Capital (calculated after any applicable performance fee adjustment, fee waivers, and expense reimbursements). The subadvisory fee paid by Janus Capital to Perkins adjusts up or down based on the Fund’s performance relative to the Fund’s benchmark index over the performance measurement period.
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any performance adjustments to management fees, the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
Perkins Select Value Fund | 0.77 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial
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advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital (or the subadviser) provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund’s Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the year ended June 30, 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 June 30, 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
Janus Investment Fund | 25
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Notes to Financial Statements (continued)
compensation expenses for the year ended June 30, 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 $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 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 year ended June 30, 2015, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Perkins Select Value Fund | $ | 106 | ||||
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the year ended June 30, 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 year ended June 30, 2015.
As of June 30, 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 Select Value Fund - Class A Shares | - | % | - | % | ||||||
Perkins Select Value Fund - Class C Shares | - | - | ||||||||
Perkins Select Value Fund - Class D Shares | - | - | ||||||||
Perkins Select Value Fund - Class I Shares | - | - | ||||||||
Perkins Select Value Fund - Class S Shares | 100 | 0 | ||||||||
Perkins Select Value Fund - Class T Shares | - | - | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
4. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation, derivatives, and foreign currency contract adjustments. 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.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
Perkins Select Value Fund | $ | 206,699 | $ | 4,525,567 | $ | – | $ | – | $ | – | $ | (4,830) | $ | 10,223,798 | |||||||||||||||||
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The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 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.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
Perkins Select Value Fund | $ | 65,649,523 | $ | 11,528,773 | $ | (1,304,975) | ||||||||
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. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the year ended June 30, 2015
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Perkins Select Value Fund | $ | 2,327,644 | $ | 2,666,267 | $ | – | $ | – | ||||||||||||||
For the year ended June 30, 2014
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Perkins Select Value Fund | $ | 2,409,435 | $ | 3,293,138 | $ | – | $ | – | ||||||||||||||
Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
Perkins Select Value Fund | $ | – | $ | (89,240) | $ | 89,240 | ||||||||
5. | Capital Share Transactions |
Perkins Select | ||||||||||
Value Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 4,589 | 4,457 | ||||||||
Reinvested dividends and distributions | 542 | 656 | ||||||||
Shares repurchased | (7,779) | (4,130) | ||||||||
Net Increase/(Decrease) in Fund Shares | (2,648) | 983 | ||||||||
Shares Outstanding, Beginning of Period | 10,281 | 9,298 | ||||||||
Shares Outstanding, End of Period | 7,633 | 10,281 |
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Notes to Financial Statements (continued)
Perkins Select | ||||||||||
Value Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 90 | 3,618 | ||||||||
Reinvested dividends and distributions | 554 | 878 | ||||||||
Shares repurchased | (10,710) | (687) | ||||||||
Net Increase/(Decrease) in Fund Shares | (10,066) | 3,809 | ||||||||
Shares Outstanding, Beginning of Period | 14,417 | 10,608 | ||||||||
Shares Outstanding, End of Period | 4,351 | 14,417 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 125,065 | 257,460 | ||||||||
Reinvested dividends and distributions | 30,824 | 27,557 | ||||||||
Shares repurchased | (158,446) | (242,161) | ||||||||
Net Increase/(Decrease) in Fund Shares | (2,557) | 42,856 | ||||||||
Shares Outstanding, Beginning of Period | 530,362 | 487,506 | ||||||||
Shares Outstanding, End of Period | 527,805 | 530,362 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 89,635 | 627,941 | ||||||||
Reinvested dividends and distributions | 359,329 | 438,676 | ||||||||
Shares repurchased | (1,049,248) | (321,944) | ||||||||
Net Increase/(Decrease) in Fund Shares | (600,284) | 744,673 | ||||||||
Shares Outstanding, Beginning of Period | 6,222,762 | 5,478,089 | ||||||||
Shares Outstanding, End of Period | 5,622,478 | 6,222,762 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 2,745 | – | ||||||||
Reinvested dividends and distributions | 246 | 74 | ||||||||
Shares repurchased | – | |||||||||
Net Increase/(Decrease) in Fund Shares | 2,991 | 74 | ||||||||
Shares Outstanding, Beginning of Period | 1,148 | 1,074 | ||||||||
Shares Outstanding, End of Period | 4,139 | 1,148 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 273,757 | 57,101 | ||||||||
Reinvested dividends and distributions | 13,096 | 9,113 | ||||||||
Shares repurchased | (337,974) | (24,379) | ||||||||
Net Increase/(Decrease) in Fund Shares | (51,121) | 41,835 | ||||||||
Shares Outstanding, Beginning of Period | 157,141 | 115,306 | ||||||||
Shares Outstanding, End of Period | 106,020 | 157,141 |
6. | Purchases and Sales of Investment Securities |
For the year ended June 30, 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 Select Value Fund | $ | 40,467,627 | $ | 57,010,064 | $ | – | $ | – | ||||||
7. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of Perkins Select Value Fund:
of Perkins Select Value Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Perkins Select Value Fund (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
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 |
Janus Investment Fund | 33
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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 June 30, 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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Designation Requirements (unaudited)
For federal income tax purposes, the Fund designated the following for the year ended June 30, 2015:
Capital Gain Distributions
Fund | ||||||||||
Perkins Select Value Fund | $ | 2,666,267 | ||||||||
Dividends Received Deduction Percentage
Fund | ||||||||||
Perkins Select Value Fund | 100 | % | ||||||||
Qualified Dividend Income Percentage
Fund | ||||||||||
Perkins Select Value Fund | 100 | % | ||||||||
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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
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OFFICERS
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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-0815-93823 | 125-02-93033 08-15 |
Table of Contents
annual report
June 30, 2015
Perkins Small Cap Value Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
Table of Contents
Perkins Small Cap Value Fund
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Perkins Small Cap Value Fund (unaudited)
FUND SNAPSHOT We believe in the timeless adage of the “power of compounding” and reflect this in our focus on mitigating losses in difficult markets. We invest in securities we believe have favorable reward-to-risk ratios by focusing first on rigorous downside analysis prior to determining upside potential. We seek to outperform both our benchmark and peers over a full market cycle by building diversified portfolios of what we believe to be high-quality, undervalued stocks. | Robert Perkins co-portfolio manager | Justin Tugman co-portfolio manager | Tom Reynolds co-portfolio manager |
PERFORMANCE OVERVIEW
During the 12 months ended June 30, 2015, Perkins Small Cap Value Fund’s Class T Shares returned 4.85% versus 0.78% for the Fund’s benchmark, the Russell 2000 Value Index. Stock selection in energy and information technology, as well as our overweight allocation to health care, contributed to our relative outperformance. Relative detractors included our underweight allocations to financials as well as our consumer discretionary and our industrial holdings.
MARKET ENVIORNMENT
The S&P 500 Index, a broad market measure, reached successive record highs during the period. However, the volatility that marked the end of 2014 carried over into the beginning of 2015 and major U.S. stock indices finished the period mixed. Volume and volatility remained muted for much of the period. Earnings during the latter part of the period largely exceeded expectations, but enthusiasm was tempered as valuations were considered stretched compared to long-term averages. Stocks were also aided by favorable economic data; however, generally speaking, the economic data looked choppy. Employment data including nonfarm payrolls and wages exhibited renewed strength during the spring. Partly as a consequence, key retail sales data hinted that consumers were once again finding their footing as a source of broad economic growth. However, the labor force participation rate remained stubbornly low.
After falling below $50 a barrel, from over $100 a barrel at the beginning of the period, crude oil prices reset within a higher trading band. The dollar also stabilized after its recent strong period of appreciation. Both developments were highlighted by the Federal Reserve’s (Fed) June statement, in which it said a potential increase of the Fed Funds rate during the latter part of the year would be “appropriate.” Chairwoman Janet Yellen also reiterated that any move would be data dependent, thoughtful and measured. However, we remain cautious about the impact of current monetary policy as it gets set to unwind. Negative sentiment emanating from Europe – centering on Greece’s ability to meet its debt obligations – impacted U.S. shares late in June. Previous high fliers were especially impacted.
CONTRIBUTORS
Casey’s General Stores operates nearly 1,900 convenience store locations throughout smaller towns in the Midwest U.S., and has begun expanding into the Southeast, including Tennessee and Arkansas. The firm has done a solid job in executing its growth strategy – posting strong same store sales growth, expanding distribution centers, allowing the company to decrease costs going forward and serve broader geographic markets. We continue to like the execution of Casey’s long-term strategy and thus the stock remains one of our largest holdings in the portfolio.
Phibro Animal Health, an animal health care company, outperformed as the company continued to report stronger-than-expected financial results. Phibro is well positioned to benefit from the overall global growth of protein-rich diets and the need to maintain the health and safety of production animals, in our view. Despite the stock’s outperformance, we continue to hold our position primarily due to the favorable industry fundamentals, the potential for further industry consolidation, and the valuation discount relative to its peers. We believe recent transactions in the animal health industry support the current valuation of the stock.
Informatica Corp. is an independent provider of enterprise data integration software and services. The stock’s strong performance was driven by solid fundamental results, activist involvement, and the announcement by management that they will look at potentially selling the company. The April announcement that a private equity firm and the Canada Pension Plan Investment Board would purchase the company in an all cash deal helped boost the stock’s performance. Moreover, the
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Perkins Small Cap Value Fund (unaudited)
fundamentals of the business rebounded on improved sales execution and better bottom-line expense controls. The increase in license sales came from larger deals, as well as better-than–expected sales of newer products. We added to our position during the period.
DETRACTORS
QEP Midstream Partners LP owns, operates, acquires and develops midstream gathering systems and pipelines. The shares of the company fell 30.4% near the end of 2014 as the company’s general partner, QEP Resources, sold its field services midstream business and its 58% ownership in QEP Midstream Partners LP’s shares to Tesoro Logistics LP for approximately $2.5 billion. QEP Midstream Partners LP’s distribution growth outlook effectively dissolved as its new general partner, Tesoro Logistics LP, did not have the same incentive as QEP Resources to drop down accretive assets and grow the distribution at QEP Midstream. Furthermore, the steep decline in global commodity prices led to a sell-off across master limited partnerships (MLPs). We exited our position in QEP Midstream Partners LP as we believed that QEP’s deal with Tesoro Logistics LP was not in the best long-term interest of QEP shareholders.
Shares in barge operator Kirby Corp. traded lower during the period following the rapid decline in global oil prices. Approximately 20% of Kirby’s annual revenues are directly tied to oil, with approximately $400 million of revenue related to diesel engines for well fracking pumps and rigs, and $200 million to the transport of crude oil in both inland river and coastal barge movements. Management guided fourth quarter results below Street estimates on weakness in both the diesel engine business as well as the crude transport segment. We see fracking-related revenue continuing to be negatively pressured by weak oil prices and their negative impact on rig count in the U.S. We exited our position during the period.
Tidewater, Inc. is a New Orleans, Louisiana-based supplier of offshore supply and support vessels to the oil & gas industry. Although Tidewater’s shares rebounded slightly near the end of the period as crude oil prices staged a rally off their mid-March lows, plummeting crude oil prices for much of the period weighed on the stock. However, its globally diverse vessel fleet may be better positioned to reduce cost and navigate weak offshore supply and demand fundamentals. While there is less clarity on the recovery scope in offshore day rates and utilization, we added to our position near the end of the period as we believed shares were trading below liquidation level and the valuation was not reflective of Tidewater’s sound balance sheet and ability for strong free-cash-flow generation.
MARKET OUTLOOK
As we look ahead, the factors that led us here continue to be intact, mainly loose monetary policy on a global basis. However, the Fed has clearly telegraphed its intention, and has initiated the process of slowly reducing the amount of liquidity injected into the system and has stated its preference to raise interest rates, “not now, but soon.” Of course this will be dependent on both inflation and jobs data. Some of the recent economic data has been mixed, with first quarter GDP contracting and expectations for the second quarter in the 2% range – far from rapid growth. Meanwhile, nonfarm payrolls continue to increase with nascent signs of wage inflation, but the labor force participation rate remains stuck at near record lows. The odds of miscommunication from the Fed would appear to be high as it begins to transition away from policy accommodation. Additionally the global economy remains in an uneven state, with downside risks evident in China and Europe, large commodity and currency price fluctuations, and more volatile global interest rates. Oddly enough, despite these pressing uncertainties, valuations remain at the upper end of historical ranges. Given this backdrop, the potential for increasing equity market volatility would seem to be warranted. As such we continue to remain vigilant about the potential for downside risk.
Complacency has set into investor psychology as the S&P 500 Index, a broad market measure, has gone over 1,350 days without a 10% correction. Given the low level of interest rates, it can be argued that the market is fairly valued based on the S&P 500 trading at 17.4x 2015 estimated earnings. However, based on the Shiller P/E ratio (a price-to-earnings ratio which incorporates inflation adjusted earnings over the past 10 years) the S&P 500 is trading at 27x. This is well above its historical mean of 15.95x and significantly above its average going back to 1881. To put this into context, other instances when this valuation metric was at this level, or higher, included 1929, 2000 and 2007. A potential headwind for the sustainability of the current P/E multiple is corporate profits. In the first quarter, S&P 500 companies delivered paltry earnings growth of 0.80% compared to the same period a year ago. The forecast for the second quarter is for a decline of 4.5%. Simply put, “bad news” has been embraced by the equity market and this may continue to be the case, until it isn’t. Thus, we continue our focus on building a portfolio of high-quality stocks that we believe
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(unaudited)
can help minimize risk should the time come that the equity market views “bad news” as truly bad news.
Recently, there have been bouts of volatility in currencies and interest rates that have spread to stocks. As the 10-year Treasury yield moved from below 2.0% to above 2.35% near the end of the period, interest rate sensitive sectors such as real estate investment trusts (REITs) and utilities, as well as economically sensitive transportation stocks, saw meaningful price declines.
The Fund’s sector positioning did not materially change during the period. Staples, industrials, health care and materials remain overweight on a relative basis. While our energy weight is in line with the benchmark, this is a function of our exposure to MLPs where we feel there is less commodity price risk and ultimately reduced downside in the shares as most of the contracts are fee based and dividend yields are healthy. Conversely, our underweight sectors remain financials and utilities. We initiated positions in financials, industrials, materials, energy and technology; instances where we felt the stocks were cheap enough to have attractive trade-offs between risk and reward. Uncertainties over Greece, the slowdown in China, assorted geopolitical threats, as well as the growth trajectory of the U.S. economy all are factors that lead us to be cautious given equity valuations. In conclusion, we believe our portfolio of what we consider high-quality stocks will hold up better relative to the benchmark should volatility appear. We believe we will also be presented with opportunities to purchase new stocks where the valuation and reward-to-risk ratios are more compelling.
Thank you for your investment in Perkins Small Cap Value Fund.
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Perkins Small Cap Value Fund (unaudited)
Perkins Small Cap Value Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Casey’s General Stores, Inc. | 1.09% | |||
Phibro Animal Health Corp. – Class A | 0.83% | |||
Informatica Corp. | 0.55% | |||
STERIS Corp. | 0.52% | |||
NICE Systems, Ltd. (ADR) | 0.46% |
5 Bottom Performers – Holdings
Contribution | ||||
QEP Midstream Partners LP | –0.62% | |||
Kirby Corp. | –0.60% | |||
Tidewater, Inc. | –0.54% | |||
Prosperity Bancshares, Inc. | –0.32% | |||
Plains All American Pipeline LP | –0.30% |
5 Top Performers – Sectors*
Fund Weighting | Russell 2000® | |||||||||||
Fund Contribution | (Average % of Equity) | Value Index Weighting | ||||||||||
Information Technology | 1.61% | 10.93% | 9.88% | |||||||||
Energy | 1.44% | 5.69% | 5.02% | |||||||||
Health Care | 1.19% | 12.15% | 5.46% | |||||||||
Consumer Staples | 1.07% | 6.58% | 2.70% | |||||||||
Materials | 0.52% | 5.33% | 4.47% |
5 Bottom Performers – Sectors*
Fund Weighting | Russell 2000® | |||||||||||
Fund Contribution | (Average % of Equity) | Value Index Weighting | ||||||||||
Financials | –0.44% | 29.42% | 40.42% | |||||||||
Industrials | –0.43% | 17.02% | 12.95% | |||||||||
Consumer Discretionary | –0.09% | 7.11% | 11.64% | |||||||||
Other** | –0.06% | 4.40% | 0.00% | |||||||||
Telecommunication Services | 0.06% | 0.00% | 0.77% |
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 June 30, 2015
Casey’s General Stores, Inc. Food & Staples Retailing | 2.8% | |||
Sovran Self Storage, Inc. Real Estate Investment Trusts (REITs) | 2.3% | |||
CLARCOR, Inc. Machinery | 2.2% | |||
Jack Henry & Associates, Inc. Information Technology Services | 2.2% | |||
Owens & Minor, Inc. Health Care Providers & Services | 2.1% | |||
11.6% |
Asset Allocation – (% of Net Assets)
As of June 30, 2015
*Includes Other of (0.1)%.
Top Country Allocations – Long Positions (% of Investment Securities)
As of June 30, 2015
Janus Investment Fund | 5
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Perkins Small Cap Value Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended June 30, 2015 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||
One | Five | Ten | Total Annual Fund | ||||||
Year | Year | Year | Operating Expenses | ||||||
Perkins Small Cap Value Fund – Class A Shares | |||||||||
NAV | 4.61% | 11.95% | 8.55% | 1.05% | |||||
MOP | –1.41% | 10.63% | 7.90% | ||||||
Perkins Small Cap Value Fund – Class C Shares | |||||||||
NAV | 3.94% | 11.12% | 7.75% | 1.79% | |||||
CDSC | 3.12% | 11.12% | 7.75% | ||||||
Perkins Small Cap Value Fund – Class D Shares(1) | 4.93% | 12.27% | 8.84% | 0.74% | |||||
Perkins Small Cap Value Fund – Class I Shares | 4.98% | 12.31% | 8.79% | 0.73% | |||||
Perkins Small Cap Value Fund – Class L Shares(2) | 5.10% | 12.43% | 9.04% | 0.80% | |||||
Perkins Small Cap Value Fund – Class N Shares | 5.15% | 12.17% | 8.79% | 0.58% | |||||
Perkins Small Cap Value Fund – Class R Shares | 4.32% | 11.61% | 8.25% | 1.33% | |||||
Perkins Small Cap Value Fund – Class S Shares | 4.60% | 11.89% | 8.52% | 1.08% | |||||
Perkins Small Cap Value Fund – Class T Shares | 4.85% | 12.17% | 8.79% | 0.83% | |||||
Russell 2000® Value Index | 0.78% | 14.81% | 6.87% | ||||||
Morningstar Quartile – Class T Shares | 1st | 4th | 1st | ||||||
Morningstar Ranking – based on total returns for Small Value Funds | 61/433 | 321/358 | 46/311 | ||||||
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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Table of Contents
(unaudited)
This Fund has a performance-based management fee that may adjust up or down based on the Fund’s performance.
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
The Fund will normally invest at least 80% of its net assets, measured at the time of purchase, in the type of securities described by its name.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
Class A Shares, Class C Shares, Class R Shares and Class S Shares commenced operations on July 6, 2009. Performance shown for each class reflects the performance of the Fund’s Class J Shares (formerly named Investor Shares) for periods prior to July 6, 2009, calculated using the fees and expenses of the corresponding class, without the effect of any fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010, as a result of the restructuring of Class J Shares, the predecessor share class. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares (formerly named Investor Shares).
Class I Shares commenced operations on July 6, 2009. Performance shown reflects the performance of the Fund’s Class J Shares (formerly named Investor Shares) for periods prior to July 6, 2009, calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers.
Class N Shares of the Fund commenced operations on May 31, 2012. Performance shown for Class N Shares reflects the performance of the Fund’s Class T Shares from July 6, 2009 to May 31, 2012, calculated using the fees and expenses of Class T Shares, net of any applicable fee and expense limitations or waivers. For periods prior to July 6, 2009, the performance shown for Class N Shares reflects the performance of the Fund’s Class J Shares (formerly named Investor Shares), calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers.
Class T Shares (formerly named Class J Shares) commenced operations with the Fund’s inception. Performance shown for Class T Shares reflects the fees and expenses of Class T Shares, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 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.”
(1) | Closed to certain new investors. | |
(2) | Closed to new investors. |
Janus Investment Fund | 7
Table of Contents
Perkins Small Cap Value Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 1,027.20 | $ | 5.08 | $ | 1,000.00 | $ | 1,019.79 | $ | 5.06 | 1.01% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 1,023.30 | $ | 8.58 | $ | 1,000.00 | $ | 1,016.31 | $ | 8.55 | 1.71% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 1,028.30 | $ | 3.62 | $ | 1,000.00 | $ | 1,021.22 | $ | 3.61 | 0.72% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,028.20 | $ | 3.42 | $ | 1,000.00 | $ | 1,021.42 | $ | 3.41 | 0.68% | |||||||||||||||||
Class L Shares | $ | 1,000.00 | $ | 1,029.00 | $ | 2.92 | $ | 1,000.00 | $ | 1,021.92 | $ | 2.91 | 0.58% | |||||||||||||||||
Class N Shares | $ | 1,000.00 | $ | 1,029.10 | $ | 2.77 | $ | 1,000.00 | $ | 1,022.07 | $ | 2.76 | 0.55% | |||||||||||||||||
Class R Shares | $ | 1,000.00 | $ | 1,025.30 | $ | 6.53 | $ | 1,000.00 | $ | 1,018.35 | $ | 6.51 | 1.30% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 1,027.00 | $ | 5.28 | $ | 1,000.00 | $ | 1,019.59 | $ | 5.26 | 1.05% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 1,027.80 | $ | 4.02 | $ | 1,000.00 | $ | 1,020.83 | $ | 4.01 | 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 181/365 (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 | JUNE 30, 2015
Table of Contents
Perkins Small Cap Value Fund
Schedule of Investments
As of June 30, 2015
�� | ||||||||||
Shares or Principal Amount | Value | |||||||||
Common Stocks – 95.5% | ||||||||||
Auto Components – 1.7% | ||||||||||
842,898 | Standard Motor Products, Inc. | $ | 29,602,578 | |||||||
Automobiles – 0.8% | ||||||||||
541,355 | Winnebago Industries, Inc. | 12,770,564 | ||||||||
Building Products – 1.7% | ||||||||||
841,644 | Simpson Manufacturing Co., Inc. | 28,615,896 | ||||||||
Capital Markets – 4.1% | ||||||||||
1,031,989 | AllianceBernstein Holding LP | 30,474,635 | ||||||||
520,086 | Evercore Partners, Inc. – Class A | 28,063,841 | ||||||||
196,602 | Stifel Financial Corp.* | 11,351,799 | ||||||||
69,890,275 | ||||||||||
Chemicals – 1.7% | ||||||||||
360,750 | Cabot Corp. | 13,452,367 | ||||||||
677,136 | Kraton Performance Polymers, Inc.* | 16,170,008 | ||||||||
29,622,375 | ||||||||||
Commercial Banks – 15.3% | ||||||||||
460,597 | Bank of Hawaii Corp. | 30,712,608 | ||||||||
113,652 | Banner Corp. | 5,447,340 | ||||||||
722,498 | Columbia Banking System, Inc. | 23,510,085 | ||||||||
504,210 | FCB Financial Holdings, Inc. – Class A* | 16,033,878 | ||||||||
896,983 | First Interstate BancSystem, Inc. – Class A | 24,882,309 | ||||||||
731,874 | FirstMerit Corp. | 15,244,935 | ||||||||
331,337 | Independent Bank Corp. | 15,536,392 | ||||||||
183,823 | MB Financial, Inc. | 6,330,864 | ||||||||
217,893 | PrivateBancorp, Inc. | 8,676,499 | ||||||||
2,026,044 | Sterling Bancorp | 29,782,847 | ||||||||
511,742 | Synovus Financial Corp. | 15,771,889 | ||||||||
221,770 | UMB Financial Corp. | 12,645,325 | ||||||||
1,562,784 | Umpqua Holdings Corp. | 28,114,484 | ||||||||
1,293,808 | United Community Banks, Inc. | 27,001,773 | ||||||||
259,691,228 | ||||||||||
Commercial Services & Supplies – 4.9% | ||||||||||
593,971 | Copart, Inc.* | 21,074,091 | ||||||||
316,586 | UniFirst Corp. | 35,410,144 | ||||||||
561,574 | Waste Connections, Inc. | 26,461,367 | ||||||||
82,945,602 | ||||||||||
Consumer Finance – 1.0% | ||||||||||
401,000 | Nelnet, Inc. – Class A | 17,367,310 | ||||||||
Containers & Packaging – 2.8% | ||||||||||
223,260 | Silgan Holdings, Inc. | 11,779,198 | ||||||||
822,900 | Sonoco Products Co. | 35,269,494 | ||||||||
47,048,692 | ||||||||||
Electrical Equipment – 1.7% | ||||||||||
880,195 | Babcock & Wilcox Co.* | 28,870,396 | ||||||||
Electronic Equipment, Instruments & Components – 1.4% | ||||||||||
211,038 | FARO Technologies, Inc.* | 9,855,474 | ||||||||
246,128 | Tech Data Corp.* | 14,167,128 | ||||||||
24,022,602 | ||||||||||
Energy Equipment & Services – 3.4% | ||||||||||
143,248 | Dril-Quip, Inc.* | 10,779,412 | ||||||||
131,592 | Oil States International, Inc.* | 4,899,170 | ||||||||
1,359,998 | Tidewater, Inc. | 30,912,755 | ||||||||
391,944 | Unit Corp.* | 10,629,521 | ||||||||
57,220,858 | ||||||||||
Food & Staples Retailing – 2.8% | ||||||||||
489,242 | Casey’s General Stores, Inc. | 46,840,029 | ||||||||
Food Products – 3.2% | ||||||||||
929,817 | Boulder Brands, Inc.* | 6,452,930 | ||||||||
149,698 | J&J Snack Foods Corp. | 16,567,078 | ||||||||
151,745 | Lancaster Colony Corp. | 13,786,033 | ||||||||
232,119 | Sanderson Farms, Inc. | 17,446,064 | ||||||||
54,252,105 | ||||||||||
Gas Utilities – 1.3% | ||||||||||
414,291 | Southwest Gas Corp. | 22,044,424 | ||||||||
Health Care Equipment & Supplies – 0.8% | ||||||||||
93,688 | Cyberonics, Inc.* | 5,570,688 | ||||||||
136,186 | STERIS Corp. | 8,775,826 | ||||||||
14,346,514 | ||||||||||
Health Care Providers & Services – 4.0% | ||||||||||
1,057,983 | Owens & Minor, Inc. | 35,971,422 | ||||||||
820,212 | Premier, Inc. – Class A* | 31,545,354 | ||||||||
67,516,776 | ||||||||||
Health Care Technology – 1.5% | ||||||||||
686,104 | Omnicell, Inc.* | 25,872,982 | ||||||||
Hotels, Restaurants & Leisure – 1.4% | ||||||||||
449,342 | Cedar Fair LP | 24,484,646 | ||||||||
Information Technology Services – 2.2% | ||||||||||
569,931 | Jack Henry & Associates, Inc. | 36,874,536 | ||||||||
Insurance – 3.2% | ||||||||||
447,146 | First American Financial Corp. | 16,638,303 | ||||||||
345,690 | Hanover Insurance Group, Inc. | 25,591,431 | ||||||||
157,825 | StanCorp Financial Group, Inc. | 11,933,148 | ||||||||
54,162,882 | ||||||||||
Leisure Products – 0.5% | ||||||||||
233,959 | Arctic Cat, Inc. | 7,769,778 | ||||||||
Machinery – 8.6% | ||||||||||
452,198 | Astec Industries, Inc. | 18,910,920 | ||||||||
609,278 | CLARCOR, Inc. | 37,921,463 | ||||||||
338,751 | Kennametal, Inc. | 11,558,184 | ||||||||
331,868 | Lincoln Electric Holdings, Inc. | 20,207,442 | ||||||||
158,277 | RBC Bearings, Inc.* | 11,357,958 | ||||||||
642,401 | Timken Co. | 23,492,605 | ||||||||
194,390 | Valmont Industries, Inc. | 23,107,139 | ||||||||
146,555,711 | ||||||||||
Media – 2.3% | ||||||||||
351,681 | Morningstar, Inc. | 27,976,224 | ||||||||
502,706 | Time, Inc. | 11,567,265 | ||||||||
39,543,489 | ||||||||||
Metals & Mining – 0.9% | ||||||||||
61,291 | Compass Minerals International, Inc. | 5,034,443 | ||||||||
397,734 | TimkenSteel Corp. | 10,734,840 | ||||||||
15,769,283 | ||||||||||
Multiline Retail – 0.6% | ||||||||||
103,816 | Dillard’s, Inc. – Class A | 10,920,405 | ||||||||
Oil, Gas & Consumable Fuels – 3.1% | ||||||||||
1,368,997 | Cone Midstream Partners LP | 24,231,247 | ||||||||
159,931 | SM Energy Co. | 7,376,018 | ||||||||
327,042 | Western Gas Partners LP | 20,724,651 | ||||||||
52,331,916 | ||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Perkins Small Cap Value Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Personal Products – 0.4% | ||||||||||
196,190 | Inter Parfums, Inc. | $ | 6,656,727 | |||||||
Pharmaceuticals – 1.9% | ||||||||||
819,087 | Phibro Animal Health Corp. – Class A | 31,895,248 | ||||||||
Real Estate Investment Trusts (REITs) – 7.1% | ||||||||||
181,439 | EastGroup Properties, Inc. | 10,202,315 | ||||||||
355,028 | Healthcare Trust of America, Inc. – Class A | 8,502,920 | ||||||||
875,187 | National Storage Affiliates Trust | 10,852,319 | ||||||||
310,116 | Post Properties, Inc. | 16,861,007 | ||||||||
972,210 | Potlatch Corp. | 34,338,457 | ||||||||
451,601 | Sovran Self Storage, Inc. | 39,248,643 | ||||||||
120,005,661 | ||||||||||
Road & Rail – 1.2% | ||||||||||
275,585 | Genesee & Wyoming, Inc. – Class A* | 20,994,065 | ||||||||
Semiconductor & Semiconductor Equipment – 1.0% | ||||||||||
881,308 | Teradyne, Inc. | 17,000,431 | ||||||||
Software – 4.6% | ||||||||||
455,310 | Informatica Corp.* | 22,068,876 | ||||||||
541,929 | NetScout Systems, Inc.* | 19,872,536 | ||||||||
203,162 | NICE Systems, Ltd. (ADR) | 12,919,072 | ||||||||
446,355 | Synopsys, Inc.* | 22,607,881 | ||||||||
77,468,365 | ||||||||||
Specialty Retail – 1.4% | ||||||||||
311,405 | Finish Line, Inc. – Class A | 8,663,287 | ||||||||
506,742 | Sally Beauty Holdings, Inc.* | 16,002,913 | ||||||||
24,666,200 | ||||||||||
Textiles, Apparel & Luxury Goods – 1.0% | ||||||||||
294,150 | Movado Group, Inc. | 7,989,114 | ||||||||
230,345 | Steven Madden, Ltd.* | 9,854,159 | ||||||||
17,843,273 | ||||||||||
Total Common Stocks (cost $1,383,149,403) | 1,623,483,822 | |||||||||
Repurchase Agreements – 4.6% | ||||||||||
$47,900,000 | Undivided interest of 23.9% in a joint repurchase agreement (principal amount $200,300,000 with a maturity value of $200,300,556) with ING Financial Markets LLC, 0.1000%, dated 6/30/15, maturing 7/1/15, to be repurchased at $47,900,133 collateralized by $220,243,953 in U.S. Treasuries, 0% – 4.2500%, 10/31/15 – 11/15/43, with a value of $204,308,612 | 47,900,000 | ||||||||
30,000,000 | Undivided interest of 30.0% in a joint repurchase agreement (principal amount $100,000,000 with a maturity value of $100,000,167) with RBC Capital Markets Corp., 0.0600%, dated 6/30/15, maturing 7/1/15, to be repurchased at $30,000,050 collateralized by $116,489,256 in U.S. Treasuries, 0% – 8.7500%, 8/15/15 – 11/15/44, with a value of $102,000,016 | 30,000,000 | ||||||||
Total Repurchase Agreements (cost $77,900,000) | 77,900,000 | |||||||||
Total Investments (total cost $1,461,049,403) – 100.1% | 1,701,383,822 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.1)% | (1,384,791) | |||||||||
Net Assets – 100% | $ | 1,699,999,031 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States | $ | 1,688,464,750 | 99 | .2% | ||||
Israel | 12,919,072 | 0 | .8 | |||||
Total | $ | 1,701,383,822 | 100 | .0% | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | JUNE 30, 2015
Table of Contents
Notes to Schedule of Investments and Other Information
Russell 2000® Value Index | Measures the performance of those Russell 2000® Index companies with lower price-to-book ratios and lower forecasted growth values. | |
S&P 500® Index | Measures broad U.S. equity performance. | |
ADR | American Depositary Receipt | |
LLC | Limited Liability Company | |
LP | Limited Partnership |
* | 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 June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Perkins Small Cap Value Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Common Stocks | $ | 1,623,483,822 | $ | – | $ | – | |||||
Repurchase Agreements | – | 77,900,000 | – | ||||||||
Total Assets | $ | 1,623,483,822 | $ | 77,900,000 | $ | – | |||||
Janus Investment Fund | 11
Table of Contents
Statement of Assets and Liabilities
As of June 30, 2015 | Perkins Small Cap Value Fund | |||
Assets: | ||||
Investments, at cost(1) | $ | 1,461,049,403 | ||
Investments, at value | $ | 1,623,483,822 | ||
Repurchase agreements, at value | 77,900,000 | |||
Cash | 149,800 | |||
Non-interested Trustees’ deferred compensation | 34,043 | |||
Receivables: | ||||
Investments sold | 14,169,843 | |||
Fund shares sold | 833,010 | |||
Dividends | 1,230,634 | |||
Interest | 183 | |||
Other assets | 4,708 | |||
Total Assets | 1,717,806,043 | |||
Liabilities: | ||||
Payables: | ||||
Investments purchased | 12,874,057 | |||
Fund shares repurchased | 3,584,760 | |||
Advisory fees | 734,574 | |||
Fund administration fees | 13,474 | |||
Transfer agent fees and expenses | 275,427 | |||
12b-1 Distribution and shareholder servicing fees | 56,518 | |||
Non-interested Trustees’ fees and expenses | 11,323 | |||
Non-interested Trustees’ deferred compensation fees | 34,043 | |||
Accrued expenses and other payables | 222,836 | |||
Total Liabilities | 17,807,012 | |||
Net Assets | $ | 1,699,999,031 |
See Notes to Financial Statements.
12 | JUNE 30, 2015
Table of Contents
As of June 30, 2015 | Perkins Small Cap Value Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 1,278,144,388 | ||
Undistributed net investment income/(loss) | 9,933,161 | |||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | 171,579,408 | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 240,342,074 | |||
Total Net Assets | $ | 1,699,999,031 | ||
Net Assets - Class A Shares | $ | 49,599,324 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,226,441 | |||
Net Asset Value Per Share(2) | $ | 22.28 | ||
Maximum Offering Price Per Share(3) | $ | 23.64 | ||
Net Assets - Class C Shares | $ | 12,843,500 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 597,683 | |||
Net Asset Value Per Share(2) | $ | 21.49 | ||
Net Assets - Class D Shares | $ | 77,947,811 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 3,512,156 | |||
Net Asset Value Per Share | $ | 22.19 | ||
Net Assets - Class I Shares | $ | 516,201,335 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 23,175,745 | |||
Net Asset Value Per Share | $ | 22.27 | ||
Net Assets - Class L Shares | $ | 200,530,638 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 8,822,717 | |||
Net Asset Value Per Share | $ | 22.73 | ||
Net Assets - Class N Shares | $ | 202,182,268 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 9,088,187 | |||
Net Asset Value Per Share | $ | 22.25 | ||
Net Assets - Class R Shares | $ | 18,692,284 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 854,221 | |||
Net Asset Value Per Share | $ | 21.88 | ||
Net Assets - Class S Shares | $ | 59,684,500 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,704,664 | |||
Net Asset Value Per Share | $ | 22.07 | ||
Net Assets - Class T Shares | $ | 562,317,371 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 25,318,419 | |||
Net Asset Value Per Share | $ | 22.21 |
(1) | Includes cost of repurchase agreements of $77,900,000. | |
(2) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(3) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Statement of Operations
Perkins Small Cap | ||||
For the year ended June 30, 2015 | Value Fund | |||
Investment Income: | ||||
Interest | $ | 36,114 | ||
Dividends | 28,803,980 | |||
Foreign tax withheld | (52,883) | |||
Total Investment Income | 28,787,211 | |||
Expenses: | ||||
Advisory fees | 9,291,751 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 144,436 | |||
Class C Shares | 142,449 | |||
Class R Shares | 98,540 | |||
Class S Shares | 163,925 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 93,182 | |||
Class L Shares | 414,803 | |||
Class R Shares | 49,270 | |||
Class S Shares | 163,925 | |||
Class T Shares | 1,544,071 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 124,563 | |||
Class C Shares | 16,573 | |||
Class I Shares | 598,187 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 6,694 | |||
Class C Shares | 2,185 | |||
Class D Shares | 16,910 | |||
Class I Shares | 23,320 | |||
Class L Shares | 2,368 | |||
Class N Shares | 1,207 | |||
Class R Shares | 540 | |||
Class S Shares | 854 | |||
Class T Shares | 5,584 | |||
Shareholder reports expense | 73,792 | |||
Registration fees | 289,083 | |||
Custodian fees | 16,491 | |||
Professional fees | 83,036 | |||
Non-interested Trustees’ fees and expenses | 35,948 | |||
Fund administration fees | 162,828 | |||
Other expenses | 113,599 | |||
Total Expenses | 13,680,114 | |||
Less: Excess Expense Reimbursement | (372,024) | |||
Net Expenses | 13,308,090 | |||
Net Investment Income/(Loss) | 15,479,121 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 246,439,349 | |||
Total Net Realized Gain/(Loss) on Investments | 246,439,349 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (182,740,201) | |||
Total Change in Unrealized Net Appreciation/Depreciation | (182,740,201) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 79,178,269 |
See Notes to Financial Statements.
14 | JUNE 30, 2015
Table of Contents
Statements of Changes in Net Assets
Perkins Small Cap | ||||||||
Value Fund | ||||||||
For each year ended June 30 | 2015 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 15,479,121 | $ | 16,765,366 | ||||
Net realized gain/(loss) on investments | 246,439,349 | 419,912,638 | ||||||
Change in unrealized net appreciation/depreciation | (182,740,201) | 17,039,212 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 79,178,269 | 453,717,216 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income | ||||||||
Class A Shares | (30,376) | (661,136) | ||||||
Class D Shares | (642,141) | (702,673) | ||||||
Class I Shares | (4,351,572) | (7,037,624) | ||||||
Class L Shares | (1,840,239) | (2,213,331) | ||||||
Class N Shares | (2,002,806) | (3,381,754) | ||||||
Class R Shares | – | (76,782) | ||||||
Class S Shares | (246,086) | (463,407) | ||||||
Class T Shares | (4,264,368) | (5,959,638) | ||||||
Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | (11,586,504) | (5,613,977) | ||||||
Class C Shares | (3,141,838) | (858,944) | ||||||
Class D Shares | (16,278,472) | (3,921,587) | ||||||
Class I Shares | (118,290,192) | (39,500,677) | ||||||
Class L Shares | (40,404,537) | (10,934,160) | ||||||
Class N Shares | (42,587,290) | (15,910,304) | ||||||
Class R Shares | (4,127,037) | (1,467,343) | ||||||
Class S Shares | (13,784,366) | (4,262,162) | ||||||
Class T Shares | (130,671,136) | (38,735,620) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (394,248,960) | (141,701,119) |
See footnotes at the end of the Statements.
See Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Statements of Changes in Net Assets (continued)
Perkins Small Cap | ||||||||
Value Fund | ||||||||
For each year ended June 30 | 2015 | 2014 | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 25,923,250 | 24,593,811 | ||||||
Class C Shares | 1,280,195 | 821,182 | ||||||
Class D Shares | 5,106,235 | 3,313,453 | ||||||
Class I Shares | 98,777,026 | 116,353,755 | ||||||
Class L Shares | 17,977,773 | 11,532,121 | ||||||
Class N Shares | 82,618,212 | 89,718,263 | ||||||
Class R Shares | 3,969,453 | 5,010,404 | ||||||
Class S Shares | 18,143,569 | 19,123,620 | ||||||
Class T Shares | 67,979,940 | 67,005,260 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 6,777,098 | 4,622,584 | ||||||
Class C Shares | 2,635,652 | 696,019 | ||||||
Class D Shares | 16,606,427 | 4,540,822 | ||||||
Class I Shares | 106,570,257 | 38,553,701 | ||||||
Class L Shares | 40,639,152 | 12,588,319 | ||||||
Class N Shares | 44,590,096 | 19,292,058 | ||||||
Class R Shares | 3,660,918 | 1,338,394 | ||||||
Class S Shares | 14,028,679 | 4,713,307 | ||||||
Class T Shares | 133,556,206 | 44,313,130 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (61,380,565) | (69,867,352) | ||||||
Class C Shares | (4,786,878) | (4,679,735) | ||||||
Class D Shares | (11,654,633) | (12,197,313) | ||||||
Class I Shares | (209,154,029) | (458,380,380) | ||||||
Class L Shares | (37,277,694) | (72,743,764) | ||||||
Class N Shares | (91,327,306) | (194,782,065) | ||||||
Class R Shares | (9,232,356) | (16,857,399) | ||||||
Class S Shares | (33,436,470) | (43,231,146) | ||||||
Class T Shares | (238,565,896) | (355,194,810) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (5,975,689) | (759,803,761) | ||||||
Net Increase/(Decrease) in Net Assets | (321,046,380) | (447,787,664) | ||||||
Net Assets: | ||||||||
Beginning of period | 2,021,045,411 | 2,468,833,075 | ||||||
End of period | $ | 1,699,999,031 | $ | 2,021,045,411 | ||||
Undistributed Net Investment Income/(Loss) | $ | 9,933,161 | $ | 13,336,622 |
See Notes to Financial Statements.
16 | JUNE 30, 2015
Table of Contents
Financial Highlights
Class A Shares
Perkins Small Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $26.99 | $23.62 | $21.02 | $24.89 | $20.92 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.14(1) | 0.11(1) | 0.15 | 0.21 | –(2) | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.92 | 4.71 | 3.56 | (1.30) | 4.68 | |||||||||||||||||
Total from Investment Operations | 1.06 | 4.82 | 3.71 | (1.09) | 4.68 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.02) | (0.15) | (0.21) | (0.02) | (0.10) | |||||||||||||||||
Distributions (from capital gains) | (5.75) | (1.30) | (0.90) | (2.76) | (0.61) | |||||||||||||||||
Total Dividends and Distributions | (5.77) | (1.45) | (1.11) | (2.78) | (0.71) | |||||||||||||||||
Net Asset Value, End of Period | $22.28 | $26.99 | $23.62 | $21.02 | $24.89 | |||||||||||||||||
Total Return | 4.61% | 20.92% | 18.27% | (4.08)% | 22.53% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $49,599 | $89,450 | $115,675 | $141,049 | $223,229 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $57,774 | $108,703 | $128,765 | $170,483 | $181,662 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.03% | 1.05% | 1.00% | 1.40% | 1.25% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.03% | 1.05% | 1.00% | 1.25% | 1.25% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.57% | 0.43% | 0.64% | 0.96% | 0.23% | |||||||||||||||||
Portfolio Turnover Rate | 86% | 62% | 60% | 62% | 64% |
Class C Shares
Perkins Small Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $26.37 | $23.13 | $20.57 | $24.57 | $20.75 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | (0.02)(1) | (0.07)(1) | (0.15) | 0.01 | (0.18) | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.89 | 4.61 | 3.61 | (1.25) | 4.63 | |||||||||||||||||
Total from Investment Operations | 0.87 | 4.54 | 3.46 | (1.24) | 4.45 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | – | – | –(2) | – | (0.02) | |||||||||||||||||
Distributions (from capital gains) | (5.75) | (1.30) | (0.90) | (2.76) | (0.61) | |||||||||||||||||
Total Dividends and Distributions | (5.75) | (1.30) | (0.90) | (2.76) | (0.63) | |||||||||||||||||
Net Asset Value, End of Period | $21.49 | $26.37 | $23.13 | $20.57 | $24.57 | |||||||||||||||||
Total Return | 3.94% | 20.06% | 17.31% | (4.78)% | 21.55% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $12,844 | $16,390 | $17,316 | $21,434 | $29,444 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $14,245 | $16,844 | $18,953 | $24,453 | $29,169 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.69% | 1.79% | 1.85% | 2.05% | 2.05% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.69% | 1.77% | 1.80% | 1.99% | 2.05% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | (0.09)% | (0.29)% | (0.16)% | 0.25% | (0.52)% | |||||||||||||||||
Portfolio Turnover Rate | 86% | 62% | 60% | 62% | 64% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. | |
(2) | 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
Perkins Small Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $27.04 | $23.66 | $21.10 | $24.96 | $20.92 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.21(1) | 0.19(1) | 0.20 | 0.28 | 0.09 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.92 | 4.72 | 3.57 | (1.30) | 4.65 | |||||||||||||||||
Total from Investment Operations | 1.13 | 4.91 | 3.77 | (1.02) | 4.74 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.23) | (0.23) | (0.31) | (0.08) | (0.09) | |||||||||||||||||
Distributions (from capital gains) | (5.75) | (1.30) | (0.90) | (2.76) | (0.61) | |||||||||||||||||
Total Dividends and Distributions | (5.98) | (1.53) | (1.21) | (2.84) | (0.70) | |||||||||||||||||
Net Asset Value, End of Period | $22.19 | $27.04 | $23.66 | $21.10 | $24.96 | |||||||||||||||||
Total Return | 4.93% | 21.30% | 18.53% | (3.75)% | 22.83% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $77,948 | $81,194 | $74,980 | $72,646 | $86,402 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $77,652 | $78,901 | $72,194 | $75,800 | $84,313 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.71% | 0.74% | 0.77% | 0.95% | 0.99% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.71% | 0.74% | 0.77% | 0.95% | 0.99% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.87% | 0.73% | 0.85% | 1.30% | 0.54% | |||||||||||||||||
Portfolio Turnover Rate | 86% | 62% | 60% | 62% | 64% |
Class I Shares
Perkins Small Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $27.09 | $23.70 | $21.13 | $25.01 | $20.97 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.22(1) | 0.19(1) | 0.25 | 0.29 | 0.04 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.92 | 4.73 | 3.54 | (1.31) | 4.73 | |||||||||||||||||
Total from Investment Operations | 1.14 | 4.92 | 3.79 | (1.02) | 4.77 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.21) | (0.23) | (0.32) | (0.10) | (0.12) | |||||||||||||||||
Distributions (from capital gains) | (5.75) | (1.30) | (0.90) | (2.76) | (0.61) | |||||||||||||||||
Total Dividends and Distributions | (5.96) | (1.53) | (1.22) | (2.86) | (0.73) | |||||||||||||||||
Net Asset Value, End of Period | $22.27 | $27.09 | $23.70 | $21.13 | $25.01 | |||||||||||||||||
Total Return | 4.98% | 21.31% | 18.62% | (3.74)% | 22.89% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $516,201 | $617,119 | $821,829 | $1,195,217 | $1,317,183 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $556,326 | $767,593 | $1,114,888 | $1,214,236 | $1,091,334 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.67% | 0.74% | 0.71% | 0.89% | 0.93% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.67% | 0.74% | 0.71% | 0.89% | 0.93% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.93% | 0.75% | 0.94% | 1.37% | 0.55% | |||||||||||||||||
Portfolio Turnover Rate | 86% | 62% | 60% | 62% | 64% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Financial Statements.
18 | JUNE 30, 2015
Table of Contents
Class L Shares
Perkins Small Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $27.55 | $24.08 | $21.45 | $25.34 | $21.21 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.25(1) | 0.23(1) | 0.53 | 0.31 | 0.51 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.94 | 4.80 | 3.34 | (1.33) | 4.34 | |||||||||||||||||
Total from Investment Operations | 1.19 | 5.03 | 3.87 | (1.02) | 4.85 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.26) | (0.26) | (0.34) | (0.11) | (0.11) | |||||||||||||||||
Distributions (from capital gains) | (5.75) | (1.30) | (0.90) | (2.76) | (0.61) | |||||||||||||||||
Total Dividends and Distributions | (6.01) | (1.56) | (1.24) | (2.87) | (0.72) | |||||||||||||||||
Net Asset Value, End of Period | $22.73 | $27.55 | $24.08 | $21.45 | $25.34 | |||||||||||||||||
Total Return | 5.10% | 21.45% | 18.74% | (3.67)% | 23.03% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $200,531 | $212,533 | $230,021 | $280,294 | $325,503 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $195,145 | $226,789 | $251,154 | $287,560 | $419,652 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.77% | 0.80% | 0.83% | 1.02% | 1.08% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.59% | 0.61% | 0.63% | 0.79% | 0.84% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.01% | 0.87% | 1.00% | 1.45% | 0.76% | |||||||||||||||||
Portfolio Turnover Rate | 86% | 62% | 60% | 62% | 64% |
Class N Shares
Perkins Small Cap Value Fund | ||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012(2) | ||||||||||||||
Net Asset Value, Beginning of Period | $27.09 | $23.71 | $21.14 | $20.63 | ||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.25(1) | 0.24(1) | 0.33 | (0.03) | ||||||||||||||
Net realized and unrealized gain/(loss) | 0.93 | 4.72 | 3.49 | 0.54 | ||||||||||||||
Total from Investment Operations | 1.18 | 4.96 | 3.82 | 0.51 | ||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | (0.27) | (0.28) | (0.35) | – | ||||||||||||||
Distributions (from capital gains) | (5.75) | (1.30) | (0.90) | – | ||||||||||||||
Total Dividends and Distributions | (6.02) | (1.58) | (1.25) | – | ||||||||||||||
Net Asset Value, End of Period | $22.25 | $27.09 | $23.71 | $21.14 | ||||||||||||||
Total Return* | 5.15% | 21.47% | 18.78% | 2.47% | ||||||||||||||
Net Assets, End of Period (in thousands) | $202,182 | $200,869 | $251,691 | $12,300 | ||||||||||||||
Average Net Assets for the Period (in thousands) | $200,334 | $279,014 | $64,999 | $8,788 | ||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||
Ratio of Gross Expenses** | 0.56% | 0.58% | 0.60% | 0.63% | ||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.56% | 0.58% | 0.60% | 0.63% | ||||||||||||||
Ratio of Net Investment Income/(Loss)** | 1.03% | 0.92% | 0.92% | (1.65)% | ||||||||||||||
Portfolio Turnover Rate | 86% | 62% | 60% | 62% |
* | 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. | |
(2) | Period from May 31, 2012 (inception date) through June 30, 2012. |
See Notes to Financial Statements.
Janus Investment Fund | 19
Table of Contents
Financial Highlights (continued)
Class R Shares
Perkins Small Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $26.66 | $23.34 | $20.81 | $24.71 | $20.83 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.07(1) | 0.04(1) | 0.04 | 0.15 | (0.04) | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.90 | 4.65 | 3.56 | (1.29) | 4.61 | |||||||||||||||||
Total from Investment Operations | 0.97 | 4.69 | 3.60 | (1.14) | 4.57 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | – | (0.07) | (0.17) | –(2) | (0.08) | |||||||||||||||||
Distributions (from capital gains) | (5.75) | (1.30) | (0.90) | (2.76) | (0.61) | |||||||||||||||||
Total Dividends and Distributions | (5.75) | (1.37) | (1.07) | (2.76) | (0.69) | |||||||||||||||||
Net Asset Value, End of Period | $21.88 | $26.66 | $23.34 | $20.81 | $24.71 | |||||||||||||||||
Total Return | 4.32% | 20.56% | 17.87% | (4.32)% | 22.10% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $18,692 | $23,700 | $30,415 | $31,997 | $38,302 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $19,708 | $28,330 | $31,106 | $34,159 | $32,917 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.31% | 1.33% | 1.34% | 1.53% | 1.60% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.31% | 1.33% | 1.34% | 1.53% | 1.60% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.28% | 0.16% | 0.29% | 0.73% | (0.10)% | |||||||||||||||||
Portfolio Turnover Rate | 86% | 62% | 60% | 62% | 64% |
Class S Shares
Perkins Small Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $26.88 | $23.53 | $20.97 | $24.84 | $20.88 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.13(1) | 0.10(1) | 0.12 | 0.20 | –(2) | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.91 | 4.69 | 3.57 | (1.30) | 4.65 | |||||||||||||||||
Total from Investment Operations | 1.04 | 4.79 | 3.69 | (1.10) | 4.65 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.10) | (0.14) | (0.23) | (0.01) | (0.08) | |||||||||||||||||
Distributions (from capital gains) | (5.75) | (1.30) | (0.90) | (2.76) | (0.61) | |||||||||||||||||
Total Dividends and Distributions | (5.85) | (1.44) | (1.13) | (2.77) | (0.69) | |||||||||||||||||
Net Asset Value, End of Period | $22.07 | $26.88 | $23.53 | $20.97 | $24.84 | |||||||||||||||||
Total Return | 4.60% | 20.86% | 18.19% | (4.11)% | 22.40% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $59,685 | $72,148 | $80,862 | $93,910 | $106,549 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $65,570 | $80,958 | $86,346 | $94,960 | $83,981 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 1.06% | 1.08% | 1.10% | 1.28% | 1.35% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.06% | 1.08% | 1.10% | 1.28% | 1.35% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.53% | 0.40% | 0.53% | 0.97% | 0.14% | |||||||||||||||||
Portfolio Turnover Rate | 86% | 62% | 60% | 62% | 64% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. | |
(2) | Less than $0.005 on a per share basis. |
See Notes to Financial Statements.
20 | JUNE 30, 2015
Table of Contents
Class T Shares
Perkins Small Cap Value Fund | ||||||||||||||||||||||
For a share outstanding during each year ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
Net Asset Value, Beginning of Period | $27.04 | $23.65 | $21.08 | $24.93 | $20.92 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.19(1) | 0.17(1) | 0.20 | 0.27 | 0.05 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.92 | 4.72 | 3.55 | (1.31) | 4.66 | |||||||||||||||||
Total from Investment Operations | 1.11 | 4.89 | 3.75 | (1.04) | 4.71 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.19) | (0.20) | (0.28) | (0.05) | (0.09) | |||||||||||||||||
Distributions (from capital gains) | (5.75) | (1.30) | (0.90) | (2.76) | (0.61) | |||||||||||||||||
Total Dividends and Distributions | (5.94) | (1.50) | (1.18) | (2.81) | (0.70) | |||||||||||||||||
Net Asset Value, End of Period | $22.21 | $27.04 | $23.65 | $21.08 | $24.93 | |||||||||||||||||
Total Return | 4.85% | 21.20% | 18.44% | (3.86)% | 22.65% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $562,317 | $707,642 | $846,044 | $923,132 | $1,257,481 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $617,628 | $773,664 | $880,189 | $1,023,747 | $1,219,414 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses | 0.81% | 0.83% | 0.85% | 1.05% | 1.10% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.81% | 0.83% | 0.84% | 1.04% | 1.10% | |||||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.79% | 0.65% | 0.79% | 1.20% | 0.42% | |||||||||||||||||
Portfolio Turnover Rate | 86% | 62% | 60% | 62% | 64% |
(1) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Financial Statements.
Janus Investment Fund | 21
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Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
Perkins Small Cap Value Fund (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in equity securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
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 L Shares are designed for pension and profit-sharing plans, employee benefit trusts, endowments, foundations and corporations, as well as high net worth individuals and financial intermediaries who are willing to maintain a minimum account balance of $250,000.
Class N Shares are generally available only to financial intermediaries purchasing on behalf of 401(k) plans, 457 plans, 403(b) plans, Taft-Hartley multi-employer plans, profit-sharing and money purchase pension plans, defined benefit plans and nonqualified deferred compensation plans. Class 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
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available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of June 30, 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 year. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
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Notes to Financial Statements (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, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
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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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.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the “Offsetting Assets and Liabilities” section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs, including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting
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Notes to Financial Statements (continued)
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 | $ | 47,900,000 | $ | – | $ | (47,900,000) | $ | – | ||||||||||
RBC Capital Markets Corp. | 30,000,000 | – | (30,000,000) | – | ||||||||||||||
Total | $ | 77,900,000 | $ | – | $ | (77,900,000) | $ | – | ||||||||||
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. |
All repurchase agreements are transacted under legally enforceable master repurchase agreements that give the Fund, in the event of default by the counterparty, the right to liquidate securities held and to offset receivables and payables with the counterparty. Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value exceeds the current market value of the repurchase agreements, including accrued interest.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Repurchase Agreements
The Fund and other funds advised by Janus Capital or its affiliates may transfer daily uninvested cash balances into one or more joint trading accounts. Assets in the joint trading accounts are invested in money market instruments and the proceeds are allocated to the participating funds on a pro rata basis.
Repurchase agreements held by the Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or, for tri-party agreements, the custodian designated by the agreement. The collateral is evaluated daily to ensure its market value exceeds the current market value of the repurchase agreements, including accrued interest. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral or proceeds may be subject to legal proceedings.
3. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s “base” fee rate prior to any performance adjustment (expressed as an annual rate).
Fund | Base Fee Rate (%) | |||||
Perkins Small Cap Value Fund | 0.72 | |||||
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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 Small Cap Value Fund | Russell 2000® Value Index | |||||
The calculation of the performance adjustment applies as follows:
Investment Advisory Fee = Base Fee Rate +/- Performance Adjustment
The investment advisory fee rate paid to Janus Capital by the Fund consists of two components: (1) a base fee calculated by applying the contractual fixed rate of the advisory fee to the Fund’s average daily net assets during the previous month (“Base Fee Rate”), plus or minus (2) a performance-fee adjustment (“Performance Adjustment”) calculated by applying a variable rate of up to 0.15% (positive or negative) to the Fund’s average daily net assets during the applicable performance measurement period.
The Fund’s prospectuses and statements of additional information contain additional information about performance-based fees. The amount shown as advisory fees on the Statement of Operations reflects the Base Fee Rate plus/minus any Performance Adjustment, if applicable. The performance adjusted investment advisory fee rate before any waivers and/or reimbursements of expenses for the year ended June 30, 2015 is below:
Performance Adjusted | ||||||
Investment Advisory | ||||||
Fund | Fee Rate (%) | |||||
Perkins Small Cap Value Fund | 0.51 | |||||
Perkins Investment Management LLC (“Perkins”) serves as subadviser to the Fund. Perkins (together with its predecessors), has been in the investment management business since 1984 and provides day-to-day management of the Fund’s portfolio operations subject to the general oversight of Janus Capital. Janus Capital owns 100% of Perkins.
Janus Capital pays Perkins a subadvisory fee equal to 50% of the investment advisory fee paid by the Fund to Janus Capital (calculated after any applicable performance fee adjustment, fee waivers, and expense reimbursements). The subadvisory fee paid by Janus Capital to Perkins adjusts up or down based on the Fund’s performance relative to the Fund’s benchmark index over the performance measurement period.
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any performance adjustments to management fees, the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, Class R Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Fund | Expense Limit (%) | |||||
Perkins Small Cap Value Fund | 0.96 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
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Notes to Financial Statements (continued)
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class R Shares, Class S Shares, and Class T Shares for providing or procuring administrative services to investors in Class R Shares, Class S Shares, and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class R Shares, Class S Shares, and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class R Shares, Class S Shares, and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services receives an administrative fee based on the average daily net assets Class L Shares of the Fund based on the average proportion of the Fund’s total net assets sold directly and the average proportion of the Fund’s net assets sold through financial intermediaries on a monthly basis. The asset-weighted fee is calculated by applying a blended annual fee rate of 0.12% on average net assets for the proportion of assets sold directly and 0.25% on average net assets for the proportion of assets sold through financial intermediaries. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations. Janus Services has agreed to waive all or a portion of this fee. Such waiver is voluntary and could change or be terminated at any time at the discretion of Janus Services or Janus Capital without prior notification to shareholders. Removal of this fee waiver may have a significant impact on Class L Shares’ total expense ratio. If applicable, amounts waived to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services is compensated for its services related to the Fund’s Class D Shares, and receives reimbursement for its out-of-pocket costs on all other share classes. Included in out-of-pocket expenses are the expenses Janus Services incurs for serving as transfer agent and providing servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, of up to 0.50% of the Class R Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “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
28 | JUNE 30, 2015
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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 $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the year ended June 30, 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 June 30, 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 year ended June 30, 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 $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 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 year ended June 30, 2015, Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Perkins Small Cap Value Fund | $ | 1,636 | ||||
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 year ended June 30, 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 year ended June 30, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Perkins Small Cap Value Fund | $ | 74 | ||||
4. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation, derivatives, tax equalization, and foreign currency contract adjustments. 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.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
Janus Small Cap Value Fund | $ | 36,705,928 | $ | 141,756,642 | $ | (1,987,662) | $ | – | $ | – | $ | (26,392) | $ | 245,406,127 | |||||||||||||||||
Accumulated capital losses noted below represent net capital loss carryovers, as of June 30, 2015, 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
Janus Investment Fund | 29
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Notes to Financial Statements (continued)
incurred during those years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may more likely expire unused. Also, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law. The following table shows these capital loss carryovers.
Capital Loss Carryover Expiration Schedule
For the year ended June 30, 2015
For the year ended June 30, 2015
Accumulated | ||||||||||
Capital | ||||||||||
Fund | June 30, 2016 | Losses | ||||||||
Perkins Small Cap Value Fund | $ | (1,987,662) | $ | (1,987,662) | ||||||
During the year ended June 30, 2015, the following capital loss carryovers were utilized by the Fund as indicated in the table:
Capital Loss | ||||||||||
Fund | Carryover Utilized | |||||||||
Janus Small Cap Value Fund | $ | 1,987,662 | ||||||||
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 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.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
Perkins Small Cap Value Fund | $ | 1,455,977,695 | $ | 265,619,989 | $ | (20,213,862) | ||||||||
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. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the year ended June 30, 2015
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Small Cap Value Fund | $ | 98,346,635 | $ | 295,902,325 | $ | – | $ | – | ||||||||||||||
For the year ended June 30, 2014
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Janus Small Cap Value Fund | $ | 26,943,849 | $ | 114,757,270 | $ | – | $ | – | ||||||||||||||
Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
30 | JUNE 30, 2015
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Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
Janus Small Cap Value Fund | $ | 26,364,060 | $ | (5,504,994) | $ | (20,859,066) | ||||||||
Capital has been adjusted by $26,364,060, including $22,285,622 of long-term capital gain, for distributions in connection with Fund share redemptions (tax equalization).
5. | Capital Share Transactions |
Perkins Small Cap Value Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 1,145,708 | 964,548 | ||||||||
Reinvested dividends and distributions | 314,191 | 184,756 | ||||||||
Shares repurchased | (2,547,661) | (2,731,934) | ||||||||
Net Increase/(Decrease) in Fund Shares | (1,087,762) | (1,582,630) | ||||||||
Shares Outstanding, Beginning of Period | 3,314,203 | 4,896,833 | ||||||||
Shares Outstanding, End of Period | 2,226,441 | 3,314,203 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 59,083 | 32,880 | ||||||||
Reinvested dividends and distributions | 126,229 | 28,363 | ||||||||
Shares repurchased | (209,171) | (188,239) | ||||||||
Net Increase/(Decrease) in Fund Shares | (23,859) | (126,996) | ||||||||
Shares Outstanding, Beginning of Period | 621,542 | 748,538 | ||||||||
Shares Outstanding, End of Period | 597,683 | 621,542 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 223,598 | 131,584 | ||||||||
Reinvested dividends and distributions | 774,192 | 181,415 | ||||||||
Shares repurchased | (488,772) | (478,596) | ||||||||
Net Increase/(Decrease) in Fund Shares | 509,018 | (165,597) | ||||||||
Shares Outstanding, Beginning of Period | 3,003,138 | 3,168,735 | ||||||||
Shares Outstanding, End of Period | 3,512,156 | 3,003,138 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 4,172,460 | 4,589,312 | ||||||||
Reinvested dividends and distributions | 4,952,149 | 1,537,842 | ||||||||
Shares repurchased | (8,730,920) | (18,017,316) | ||||||||
Net Increase/(Decrease) in Fund Shares | 393,689 | (11,890,162) | ||||||||
Shares Outstanding, Beginning of Period | 22,782,056 | 34,672,218 | ||||||||
Shares Outstanding, End of Period | 23,175,745 | 22,782,056 | ||||||||
Transactions in Fund Shares – Class L Shares: | ||||||||||
Shares sold | 769,073 | 443,573 | ||||||||
Reinvested dividends and distributions | 1,851,442 | 494,047 | ||||||||
Shares repurchased | (1,512,060) | (2,774,405) | ||||||||
Net Increase/(Decrease) in Fund Shares | 1,108,455 | (1,836,785) | ||||||||
Shares Outstanding, Beginning of Period | 7,714,262 | 9,551,047 | ||||||||
Shares Outstanding, End of Period | 8,822,717 | 7,714,262 | ||||||||
Transactions in Fund Shares – Class N Shares: | ||||||||||
Shares sold | 3,511,505 | 3,494,784 | ||||||||
Reinvested dividends and distributions | 2,075,889 | 770,142 | ||||||||
Shares repurchased | (3,913,410) | (7,466,652) | ||||||||
Net Increase/(Decrease) in Fund Shares | 1,673,984 | (3,201,726) | ||||||||
Shares Outstanding, Beginning of Period | 7,414,203 | 10,615,929 | ||||||||
Shares Outstanding, End of Period | 9,088,187 | 7,414,203 |
Janus Investment Fund | 31
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Notes to Financial Statements (continued)
Perkins Small Cap Value Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class R Shares: | ||||||||||
Shares sold | 174,013 | �� | 199,684 | |||||||
Reinvested dividends and distributions | 172,603 | 54,077 | ||||||||
Shares repurchased | (381,391) | (668,025) | ||||||||
Net Increase/(Decrease) in Fund Shares | (34,775) | (414,264) | ||||||||
Shares Outstanding, Beginning of Period | 888,996 | 1,303,260 | ||||||||
Shares Outstanding, End of Period | 854,221 | 888,996 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 752,296 | 756,511 | ||||||||
Reinvested dividends and distributions | 656,773 | 189,138 | ||||||||
Shares repurchased | (1,388,793) | (1,698,306) | ||||||||
Net Increase/(Decrease) in Fund Shares | 20,276 | (752,657) | ||||||||
Shares Outstanding, Beginning of Period | 2,684,388 | 3,437,045 | ||||||||
Shares Outstanding, End of Period | 2,704,664 | 2,684,388 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 2,904,081 | 2,630,440 | ||||||||
Reinvested dividends and distributions | 6,220,596 | 1,769,694 | ||||||||
Shares repurchased | (9,979,291) | (13,995,877) | ||||||||
Net Increase/(Decrease) in Fund Shares | (854,614) | (9,595,743) | ||||||||
Shares Outstanding, Beginning of Period | 26,173,033 | 35,768,776 | ||||||||
Shares Outstanding, End of Period | 25,318,419 | 26,173,033 |
6. | Purchases and Sales of Investment Securities |
For the year ended June 30, 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 Small Cap Value Fund | $ | 1,481,637,293 | $ | 1,875,411,157 | $ | – | $ | – | ||||||
7. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of Perkins Small Cap Value Fund:
of Perkins Small Cap Value Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Perkins Small Cap Value Fund (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
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
34 | JUNE 30, 2015
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providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed institutional competitive advantages that should be able to provide superior investment management returns over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has improved: for the 36 months ended September 30, 2014, approximately 64% of the Funds were in the top two Lipper quartiles of performance, and for the 12 months ended September 30, 2014, approximately 57% of the Funds were in the top two Lipper quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
• | For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the bottom Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
• | For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the third Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance. |
Asset Allocation Funds
• | For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Lipper quartile for the 36 months ended May 31, 2014 and the first Lipper quartile for the 12 months ended May 31, 2014. |
• | For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Lipper quartile for the 36 months ended May 31, 2014 and the second Lipper quartile for the 12 months ended May 31, 2014. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving. |
• | For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the |
Janus Investment Fund | 35
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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 June 30, 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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Designation Requirements (unaudited)
For federal income tax purposes, the Fund designated the following for the year ended June 30, 2015:
Capital Gain Distributions
Fund | ||||||||||
Janus Small Cap Value Fund | $ | 318,187,947 | ||||||||
Dividends Received Deduction Percentage
Fund | ||||||||||
Janus Small Cap Value Fund | 54 | % | ||||||||
Qualified Dividend Income Percentage
Fund | ||||||||||
Janus Small Cap Value Fund | 54 | % | ||||||||
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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
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OFFICERS
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
Janus Investment Fund | 53
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Janus provides access to a wide range of investment disciplines.
Alternative
Janus alternative funds seek to deliver strong risk-adjusted returns over a full market cycle with lower correlation to equity markets than traditional investments.
Asset Allocation
Janus’ asset allocation funds utilize our fundamental, bottom-up research to balance risk over the long term. From fund options that meet investors’ risk tolerance and objectives to a method that incorporates non-traditional investment choices to seek non-correlated sources of risk and return, Janus’ asset allocation funds aim to allocate risk more effectively.
Fixed Income
Janus fixed income funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek capital preservation and liquidity with current income as a secondary objective.
Global & International
Janus global and international funds seek to leverage Janus’ research capabilities by taking advantage of inefficiencies in foreign markets, where accurate information and analytical insight are often at a premium.
Growth & Core
Janus growth funds focus on companies believed to be the leaders in their respective industries, with solid management teams, expanding market share, margins and efficiencies. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical funds seek to outperform their respective indices while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH (a Janus subsidiary), these funds use a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Our value funds, managed by Perkins (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
For more information about our funds, contact your investment professional or go to janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus).
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-0815-94125 | 125-02-93034 08-15 |
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annual report
June 30, 2015
Perkins Value Plus Income Fund
highlights
• | Portfolio management perspective |
• | Investment strategy behind your fund |
• | Fund performance, characteristics and holdings |
Table of Contents
Perkins Value Plus Income Fund
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Perkins Value Plus Income Fund (unaudited)
FUND SNAPSHOT The Fund seeks high-quality equity and fundamentally based fixed income security selection to drive portfolio income. The allocation has the flexibility to move between 40% to 60% in equity securities with the remainder in fixed income securities and cash equivalents. Both the Perkins equity team and the Janus fixed income team focus on minimizing downside risk using their own unique approaches to fundamental, bottom-up investing. | Gibson Smith co-portfolio manager | Darrell Watters co-portfolio manager | Ted Thome co-portfolio manager |
PERFORMANCE OVERVIEW
For the 12-month period ended June 30, 2015, Perkins Value Plus Income Fund’s Class I Shares returned 2.39%, while the Fund’s primary benchmark, the Russell 1000 Value Index, returned 4.13%. Its blended benchmark, the Value Income Index, an internally-calculated index that combines the total returns from the Russell 1000 Value Index (50%) and the Barclays U.S. Aggregate Bond Index (50%), returned 3.11%. The Fund’s secondary benchmark, the Barclays U.S. Aggregate Bond Index, returned 1.86% during the period.
MARKET ENVIRONMENT
The S&P 500 Index, a broad equities market measure, reached successive record highs during the period. However, the volatility that marked the end of 2014 carried over into the beginning of 2015. While earnings largely managed to beat consensus estimates, enthusiasm was tempered as valuations were considered stretched compared to long-term averages. Stocks were also aided by favorable economic data; however, generally speaking, the economic data looked choppy. After a winter hiccup, employment data, including nonfarm payrolls and wages, exhibited renewed strength during the spring. Partly as a consequence, key retail sales data hinted that consumers were once again finding their footing as a source of broad economic growth. However, the labor force participation rate remained stubbornly low.
After falling below $50 a barrel, from over $100 a barrel at the beginning of the period, crude oil prices reset within a higher trading band. The dollar also stabilized after its recent strong period of appreciation. Both developments were highlighted by the Federal Reserve’s (Fed) June statement, in which it said a potential increase of the Fed Funds rate in the latter part of the year would be “appropriate.” Chairwoman Janet Yellen also reiterated that any move would be data dependent, thoughtful and measured. However, we remain cautious about the impact of current monetary policy as it gets set to unwind. Negative sentiment emanating from Europe – centering on Greece’s ability to meet its debt obligations – affected U.S. shares late in June. Previous high fliers were especially impacted, although major U.S. stock indices still ended the period up.
The U.S. Treasury yield curve flattened during the period, although much of the gains of longer-dated securities were not sustained over the final few months. Long-dated Treasury yields fell through the end of 2014 as investors clamored for dollar-denominated assets. Both Europe and Japan have been taking steps to engineer even more accommodative monetary policy, making yields on Treasurys relatively attractive. Also contributing to the bond rally was softer-than-expected economic data in the first part of 2015 which diminished investor concern of breakout growth or stronger-than-expected inflation. A spring rebound in economic data, however, caused Treasurys to sell off and the curve to steepen. Late in the period, communication from the Fed that they would likely initiate the first rate hike in 2015 also kept a certain amount of upward pressure on yields. Still, global interest rate differentials and developments in China and Greece likely capped U.S. yields on the longer end of the curve. Yields on two-year Treasury notes, which are especially sensitive to Fed rate hikes, rose during the period. High-yield and investment-grade credit spreads widened during the period amid a flood of new issuance.
FUND OVERVIEW
We were overweight in equities, which aided performance, given equity’s outperformance relative to fixed income.
Our equity sleeve in aggregate underperformed the Russell 1000 Value Index. Our holdings in consumer staples and consumer discretionary, as well as our underweight in financials, weighed the most on relative performance. Stock selection in information technology, our overweight in health care and underweight in utilities contributed to relative performance.
The fixed income sleeve underperformed the Barclays U.S. Aggregate Bond Index. An overweight to high-yield
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Perkins Value Plus Income Fund (unaudited)
corporate credit drove the sleeve’s underperformance. Sector detractors were led by independent and midstream energy and metals and mining. Credit sector contributors included banking, automotive and technology.
In our joint management of the Fund, both Perkins and Janus investment teams are equally as concerned with absolute total returns as we are on relative returns, and therefore, are focused on the long term.
EQUITY DETRACTORS
Ensco is a global offshore contract drilling company with a geographically diverse fleet of new ultra-deep water rigs and premium jack-up rigs. After underperforming in 2014 amid softening day rates and rig utilization, sustained weakness in crude oil prices continued to weigh on the stock. Furthermore, the company took a $1.5 billion noncash impairment charge on some of its floaters in 2014 as the book value of these rigs declined given challenging market conditions. We sold our holdings during the period.
Anadarko Petroleum reported very solid cash flow generation and increased its fiscal year production guidance for 2014, but declining crude prices early in the period and a lower earnings outlook for 2015 offset the strong execution. The company gained operational momentum as it sold noncore assets and finalized a settlement for its Tronox litigation. We continue to think that the company has a world-class asset base, strong management team and the financial flexibility to manage the company in the volatile commodity environment. As a result, we added to our holdings.
EQUITY CONTRIBUTORS
Phibro Animal Health, an animal health care company, outperformed as the company continued to report stronger-than-expected financial results. Phibro is well positioned to benefit from the overall global growth of protein-rich diets and the need to maintain the health and safety of production animals. Despite the stock’s outperformance, we continue to hold a position primarily due to the favorable industry fundamentals, the potential for further industry consolidation, and the valuation discount relative to its peers. We believe recent transactions in the animal health industry support the current valuation of the stock.
Research-based pharmaceutical company AbbVie contributed to performance during the period. The company produces drugs for specialty therapeutic areas such as immunology, chronic kidney disease, hepatitis C, women’s health, oncology and neuroscience. The stock benefited from continued strength with its key drug, Humira, and the approval and launch of it hepatitis C drug, Viekira. Furthermore, after pulling the plug on its planned inversion with Shire, a specialty biopharmaceutical company based in Ireland, the company bolstered its longer term growth potential in oncology with the acquisition of Pharmacyclics.
Please see the Derivative Instruments section in the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
FIXED INCOME CONTRIBUTORS AND DETRACTORS
The Fund’s fixed income sleeve underperformance was driven by our overweight to out-of-index high-yield credit. However, the asset class’ relative underperformance was somewhat offset by our security selection. Furthermore, investment-grade corporate credit was the largest relative asset class contributor. Spread carry, or the excess yield generated by the Fund’s securities, was additive in both our high-yield and investment-grade credit allocations.
We had a material overweight in several energy-related sectors in the first half of the period. Our energy exposure included companies that generate solid cash flows and are strengthening their balance sheets, in our view. Many have ratings in the high-yield market’s “crossover” section, which is just beneath investment grade. We believe this section of the high-yield market, in general, offers attractive risk-adjusted returns due to the potential ratings upgrades for these companies. We also believe many of our energy holdings can efficiently produce oil at lower prices.
We believe it is important to note that the sharp decline in crude oil prices in the first half of the period sparked indiscriminate selling in energy-related corporate credit, primarily within the high-yield market. In our view, this led to individual company fundamentals being ignored. We would add that a significant portion of crude oil’s decline occurred during the holiday season. That is a low volume period in the high-yield market, and we believe the lower trading volume exacerbated price declines.
One energy sector in particular, independent energy, significantly detracted from the Fund’s relative performance overall. California Resources, a recent spin-off from Occidental Petroleum, was the largest individual credit detractor. Historically, the company had only occasionally hedged a small amount of its oil output, and we believe the prices of its securities declined in direct sympathy with the price of crude oil. We have since exited our position in this firm’s debt. The midstream energy sector was also a top relative detractor.
2 | JUNE 30, 2015
Table of Contents
(unaudited)
Relative sector contributors included banking, automotive and technology. One financial company that contributed to relative performance was Ally Financial. The company has many attributes that we find attractive. The company has streamlined itself into an entity focused on auto financing, a sector that, we believe, should enjoy tailwinds as U.S. employment and consumption improve. The company has an asset-light business model, reliant upon its online banking channel to grow its substantial deposit base. We find that Ally has been able to retain these deposits at a greater rate than many expected possible with online accounts. Ally’s management is moving to pay down its highest-cost debt.
Our U.S. Treasury allocation detracted from relative performance due to our underweight and yield curve positioning.
MARKET OUTLOOK
As we look ahead, the factors that fueled the market continue to be intact, mainly loose monetary policy on a global basis. However, the Fed has clearly telegraphed its intention, and has initiated the process, of slowly reducing the amount of liquidity injected into the system and has stated its preference to raise interest rates, “not now, but soon.” Of course this will be dependent on both inflation and jobs data. Some of the recent economic data has been mixed, with first quarter GDP contracting and expectations for the second quarter in the 2% range – far from rapid growth. Meanwhile, nonfarm payrolls continue to increase without much wage inflation, but the labor force participation rate remains stuck at near record lows. The odds of miscommunication from the Fed would appear to be high as it begins to transition away from policy accommodation.
Given this backdrop, the odds would seem to favor increased market volatility. As valuations remain at the upper end of historical ranges, and thus with little room for error, we continue to remain vigilant about the potential for downside risk. Complacency has set into investor psychology as the S&P 500 Index, a broad market measure, has gone almost four years without a 10% correction, an unusually long time. Given the low level of interest rates, it can be argued that the market is fairly valued based on the S&P 500 trading at 17.4x 2015 estimated earnings. However, based on the Shiller P/E ratio (a price-to-earnings ratio which incorporates inflation adjusted earnings over the past 10 years) the S&P 500 is trading at 27x. This is well above its historical mean of 15.95x and significantly above its average going back to 1881. To put this into context, other instances when this valuation metric was at this level, or higher, included 1929, 2000 and 2007. A potential headwind for the sustainability of the current P/E multiple is corporate profits. In the first quarter, S&P 500 companies delivered paltry earnings growth of 0.80% compared to the same period a year ago. The forecast for the second quarter is for a decline of 4.5%. Simply put, “bad news” has been tolerated by the equity market because of confidence in the support of monetary policy. Thus, we continue our focus on building a portfolio of high quality stocks that we believe will minimize risk should the time come that the equity market views “bad news” as truly bad news.
The Fund’s sector positioning within the equity sleeve did not materially change. Health care and consumer staples remain overweight sectors on a relative basis. Conversely, our underweight sectors include energy, basic materials and utilities. Uncertainties over Greece, the economic slowdown and stock market volatility in China, assorted geopolitical threats, as well as the growth trajectory of the U.S. economy all are factors that lead us to be cautious given equity valuations. We believe our portfolio of what we consider high-quality stocks will hold up better relative to the overall market should volatility appear. Higher volatility should present us with opportunities to purchase new stocks where the valuation and reward-to-risk ratios are more compelling.
Within the fixed income sleeve, we are aware that multiple factors presently have the potential to impact the fixed income environment, although the timing and pace of the Fed’s rate hikes remains chief among them. Moreover, we are mindful that we are quite possibly nearing the end of a credit cycle. Merger and acquisition activity, share buybacks, and debt issuance are up. The result is a deterioration of corporate balance sheets. It is for this reason, while still overweight versus the benchmark, our credit allocation is near the lowest it has been since the financial crisis. Utilizing our bottom-up fundamental security-level approach, we are concentrating our holdings in higher-quality companies with steady revenue streams, and whose management have maintained balance sheet discipline.
We remain underweight MBS relative to the benchmark as these securities typically do not perform well in volatile markets, such as the ones we anticipate. When the direction of rates is in question, investors cannot adequately gauge prepayment risks, which stand to increase as rates decline. While our base-case scenario is for increasing rates, a global crisis or unforeseen slowdown in growth could again put downward pressure on the safe-haven Treasurys upon which mortgages are priced.
Thank you for your investment in Perkins Value Plus Income Fund.
Janus Investment Fund | 3
Table of Contents
Perkins Value Plus Income Fund (unaudited)
Perkins Value Plus Income Fund At A Glance
5 Top Performers – Equity Holdings
Contribution | ||||
Phibro Animal Health Corp. – Class A | 0.70% | |||
Casey’s General Stores, Inc. | 0.42% | |||
Zoetis, Inc. | 0.42% | |||
AbbVie, Inc. | 0.42% | |||
JPMorgan Chase & Co. | 0.40% |
5 Bottom Performers – Equity Holdings
Contribution | ||||
Ensco PLC – Class A | –0.52% | |||
Anadarko Petroleum Corp. | –0.49% | |||
Oceaneering International, Inc. | –0.45% | |||
Tesco PLC | –0.44% | |||
Mattel, Inc. | –0.32% |
5 Top Performers – Sectors*
Fund Weighting | Russell 1000® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Information Technology | 0.62% | 11.78% | 9.31% | |||||||||
Health Care | 0.40% | 19.69% | 13.98% | |||||||||
Utilities | 0.33% | 3.56% | 6.18% | |||||||||
Materials | 0.17% | 1.03% | 3.19% | |||||||||
Energy | –0.12% | 9.58% | 11.88% |
5 Bottom Performers – Sectors*
Fund Weighting | Russell 1000® Value | |||||||||||
Fund Contribution | (Average % of Equity) | Index Weighting | ||||||||||
Consumer Staples | –0.78% | 11.06% | 7.17% | |||||||||
Financials | –0.65% | 17.53% | 29.42% | |||||||||
Consumer Discretionary | –0.57% | 9.17% | 6.49% | |||||||||
Industrials | –0.48% | 10.73% | 10.22% | |||||||||
Other** | –0.28% | 1.89% | 0.00% |
Security contribution to performance is measured by using an algorithm that multiplies the daily performance of each security with the previous day’s ending weight in the portfolio and is gross of advisory fees. Fixed income securities and certain equity securities, such as private placements and some share classes of equity securities, are excluded. | ||
* | Based on sector classification according to the Global Industry Classification Standard (“GICS”) codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |
** | Not a GICS classified sector. |
4 | JUNE 30, 2015
Table of Contents
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of June 30, 2015
Wells Fargo & Co. Commercial Banks | 1.6% | |||
Pfizer, Inc. Pharmaceuticals | 1.5% | |||
JPMorgan Chase & Co. Commercial Banks | 1.4% | |||
Oracle Corp. Software | 1.3% | |||
Citizens Financial Group, Inc. Commercial Banks | 1.2% | |||
7.0% |
Asset Allocation – (% of Net Assets)
As of June 30, 2015
Top Country Allocations – Long Positions (% of Investment Securities)
As of June 30, 2015
Janus Investment Fund | 5
Table of Contents
Perkins Value Plus Income Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended June 30, 2015 | Expense Ratios – per the October 28, 2014 prospectuses | ||||||||
One | Since | Total Annual Fund | Net Annual Fund | ||||||
Year | Inception* | Operating Expenses | Operating Expenses | ||||||
Perkins Value Plus Income Fund – Class A Shares | |||||||||
NAV | 2.25% | 9.46% | 1.35% | 1.02% | |||||
MOP | –3.65% | 8.15% | |||||||
Perkins Value Plus Income Fund – Class C Shares | |||||||||
NAV | 1.49% | 8.73% | 2.04% | 1.70% | |||||
CDSC | 0.58% | 8.73% | |||||||
Perkins Value Plus Income Fund – Class D Shares(1) | 2.39% | 9.60% | 1.15% | 0.83% | |||||
Perkins Value Plus Income Fund – Class I Shares | 2.39% | 9.71% | 1.02% | 0.68% | |||||
Perkins Value Plus Income Fund – Class S Shares | 2.00% | 9.27% | 1.50% | 1.18% | |||||
Perkins Value Plus Income Fund – Class T Shares | 2.18% | 9.51% | 1.25% | 0.93% | |||||
Russell 1000® Value Index | 4.13% | 15.25% | |||||||
Barclays U.S. Aggregate Bond Index | 1.86% | 3.18% | |||||||
Value Income Index | 3.11% | 9.30% | |||||||
Morningstar Quartile – Class I Shares | 3rd | 2nd | |||||||
Morningstar Ranking – based on total returns for Moderate Allocation Funds | 485/937 | 349/790 | |||||||
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through November 1, 2015.
See important disclosures on the next page.
6 | JUNE 30, 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.
Fixed income securities are subject to interest rate, inflation, credit and default risk. The bond market is volatile. As interest rates rise, bond prices usually fall, and vice versa. The return of principal is not guaranteed, and prices may decline if an issuer fails to make timely payments or its credit strength weakens.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility, lower liquidity 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.”
Effective March 19, 2015, Ted Thome, Gibson Smith and Darrell Watters are Co-Portfolio Managers of the Fund.
* | The Fund’s inception date – July 30, 2010 | |
(1) | Closed to certain new investors. |
Janus Investment Fund | 7
Table of Contents
Perkins Value Plus Income Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Hypothetical | ||||||||||||||||||||||||||||||
Actual | (5% return before expenses) | |||||||||||||||||||||||||||||
Beginning | Ending | Expenses | Beginning | Ending | Expenses | |||||||||||||||||||||||||
Account | Account | Paid During | Account | Account | Paid During | Net Annualized | ||||||||||||||||||||||||
Value | Value | Period | Value | Value | Period | Expense Ratio | ||||||||||||||||||||||||
(1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15) | (6/30/15) | (1/1/15 - 6/30/15)† | (1/1/15 - 6/30/15) | ||||||||||||||||||||||||
Class A Shares | $ | 1,000.00 | $ | 999.20 | $ | 4.66 | $ | 1,000.00 | $ | 1,020.13 | $ | 4.71 | 0.94% | |||||||||||||||||
Class C Shares | $ | 1,000.00 | $ | 994.60 | $ | 8.46 | $ | 1,000.00 | $ | 1,016.31 | $ | 8.55 | 1.71% | |||||||||||||||||
Class D Shares | $ | 1,000.00 | $ | 998.90 | $ | 4.06 | $ | 1,000.00 | $ | 1,020.73 | $ | 4.11 | 0.82% | |||||||||||||||||
Class I Shares | $ | 1,000.00 | $ | 1,000.00 | $ | 3.77 | $ | 1,000.00 | $ | 1,021.03 | $ | 3.81 | 0.76% | |||||||||||||||||
Class S Shares | $ | 1,000.00 | $ | 997.20 | $ | 5.79 | $ | 1,000.00 | $ | 1,018.99 | $ | 5.86 | 1.17% | |||||||||||||||||
Class T Shares | $ | 1,000.00 | $ | 998.40 | $ | 4.61 | $ | 1,000.00 | $ | 1,020.18 | $ | 4.66 | 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 181/365 (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 | JUNE 30, 2015
Table of Contents
Perkins Value Plus Income Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Asset-Backed/Commercial Mortgage-Backed Securities – 2.0% | ||||||||||
$69,000 | AmeriCredit Automobile Receivables Trust 2012-4 2.6800%, 10/9/18 | $ | 70,281 | |||||||
25,000 | AmeriCredit Automobile Receivables Trust 2013-4 3.3100%, 10/8/19 | 25,653 | ||||||||
26,000 | AmeriCredit Automobile Receivables Trust 2015-2 3.0000%, 6/8/21 | 26,044 | ||||||||
147,836 | CKE Restaurant Holdings, Inc. 4.4740%, 3/20/43 (144A) | 150,124 | ||||||||
35,176 | COMM 2007-C9 Mortgage Trust 5.6500%, 12/10/49‡ | 36,752 | ||||||||
143,250 | Commercial Mortgage Trust 2007-GG11 5.8670%, 12/10/49‡ | 153,657 | ||||||||
77,865 | FREMF 2010 K-SCT Mortgage Trust 2.0000%, 1/25/20§ | 69,425 | ||||||||
16,000 | GAHR Commercial Mortgage Trust 2015-NRF 3.4949%, 12/15/19 (144A),‡ | 15,674 | ||||||||
100,000 | GS Mortgage Securities Corp. II 3.5495%, 12/10/27 (144A),‡ | 94,764 | ||||||||
78,000 | LB-UBS Commercial Mortgage Trust 2007-C2 5.4930%, 2/15/40‡ | 81,814 | ||||||||
27,000 | Santander Drive Auto Receivables Trust 2.5200%, 9/17/18 | 27,137 | ||||||||
28,000 | Santander Drive Auto Receivables Trust 2012-5 3.3000%, 9/17/18 | 28,601 | ||||||||
29,000 | Santander Drive Auto Receivables Trust 2015-1 3.2400%, 4/15/21 | 29,163 | ||||||||
72,610 | Wachovia Bank Commercial Mortgage Trust Series 2007-C31 5.6600%, 4/15/47‡ | 74,473 | ||||||||
23,638 | Wachovia Bank Commercial Mortgage Trust Series 2007-C33 6.1496%, 2/15/51‡ | 24,438 | ||||||||
25,000 | Wells Fargo Commercial Mortgage Trust 2014-TISH 2.9355%, 1/15/27 (144A),‡ | 24,821 | ||||||||
25,000 | Wells Fargo Commercial Mortgage Trust 2014-TISH 2.4355%, 2/15/27 (144A),‡ | 24,816 | ||||||||
92,000 | Wendy’s Funding LLC 2015-1 3.3710%, 6/15/45 (144A) | 91,862 | ||||||||
Total Asset-Backed/Commercial Mortgage-Backed Securities (cost $1,055,679) | 1,049,499 | |||||||||
Bank Loans and Mezzanine Loans – 0.8% | ||||||||||
Communications – 0.1% | ||||||||||
51,076 | Tribune Media Co. 4.0000%, 12/27/20‡ | 51,059 | ||||||||
Consumer Cyclical – 0% | ||||||||||
18,000 | Staples, Inc. 0%, 4/7/21(a),‡ | 17,959 | ||||||||
Consumer Non-Cyclical – 0.2% | ||||||||||
73,075 | IMS Health, Inc. 3.5000%, 3/17/21‡ | 72,618 | ||||||||
Technology – 0.5% | ||||||||||
273,803 | Avago Technologies Cayman, Ltd. 3.7500%, 5/6/21‡ | 274,048 | ||||||||
Total Bank Loans and Mezzanine Loans (cost $415,931) | 415,684 | |||||||||
Common Stocks – 57.5% | ||||||||||
Aerospace & Defense – 0.8% | ||||||||||
3,800 | United Technologies Corp.† | 421,534 | ||||||||
Beverages – 0.7% | ||||||||||
3,600 | Coca-Cola Enterprises, Inc. | 156,384 | ||||||||
2,400 | PepsiCo, Inc.† | 224,016 | ||||||||
380,400 | ||||||||||
Biotechnology – 0.5% | ||||||||||
2,200 | Gilead Sciences, Inc.† | 257,576 | ||||||||
Capital Markets – 0.6% | ||||||||||
3,700 | T Rowe Price Group, Inc.† | 287,601 | ||||||||
Commercial Banks – 8.1% | ||||||||||
9,800 | Citigroup, Inc. | 541,352 | ||||||||
23,600 | Citizens Financial Group, Inc. | 644,516 | ||||||||
7,700 | Comerica, Inc. | 395,164 | ||||||||
26,800 | Fifth Third Bancorp | 557,976 | ||||||||
10,900 | JPMorgan Chase & Co. | 738,584 | ||||||||
1,000 | PNC Financial Services Group, Inc. | 95,650 | ||||||||
11,300 | Sterling Bancorp | 166,110 | ||||||||
14,500 | Umpqua Holdings Corp. | 260,855 | ||||||||
14,800 | Wells Fargo & Co. | 832,352 | ||||||||
4,232,559 | ||||||||||
Commercial Services & Supplies – 1.4% | ||||||||||
52,200 | G4S PLC | 220,268 | ||||||||
9,600 | Republic Services, Inc. | 376,032 | ||||||||
4,100 | Tyco International PLC | 157,768 | ||||||||
754,068 | ||||||||||
Communications Equipment – 1.3% | ||||||||||
5,900 | Cisco Systems, Inc. | 162,014 | ||||||||
8,500 | QUALCOMM, Inc.† | 532,355 | ||||||||
694,369 | ||||||||||
Consumer Finance – 0.3% | ||||||||||
2,000 | American Express Co. | 155,440 | ||||||||
Diversified Telecommunication Services – 1.1% | ||||||||||
6,700 | Telenor ASA | 146,879 | ||||||||
9,500 | Verizon Communications, Inc. | 442,795 | ||||||||
589,674 | ||||||||||
Electric Utilities – 1.0% | ||||||||||
17,500 | PPL Corp. | 515,725 | ||||||||
Electrical Equipment – 0.5% | ||||||||||
4,300 | Emerson Electric Co. | 238,349 | ||||||||
Energy Equipment & Services – 1.2% | ||||||||||
3,200 | Oceaneering International, Inc. | 149,088 | ||||||||
4,500 | Schlumberger, Ltd. (U.S. Shares)† | 387,855 | ||||||||
3,300 | Tidewater, Inc. | 75,009 | ||||||||
611,952 | ||||||||||
Food & Staples Retailing – 2.0% | ||||||||||
2,600 | Casey’s General Stores, Inc.† | 248,924 | ||||||||
12,600 | Sysco Corp. | 454,860 | ||||||||
8,200 | Weis Markets, Inc. | 345,630 | ||||||||
1,049,414 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 9
Table of Contents
Perkins Value Plus Income Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Food Products – 1.2% | ||||||||||
1,900 | McCormick & Co., Inc. | $ | 153,805 | |||||||
2,200 | Nestle SA | 158,875 | ||||||||
19,300 | Orkla ASA | 151,951 | ||||||||
2,000 | Sanderson Farms, Inc. | 150,320 | ||||||||
614,951 | ||||||||||
Health Care Equipment & Supplies – 2.6% | ||||||||||
4,500 | Baxter International, Inc. | 314,685 | ||||||||
5,816 | Medtronic PLC | 430,966 | ||||||||
16,600 | Meridian Bioscience, Inc. | 309,424 | ||||||||
3,100 | Stryker Corp. | 296,267 | ||||||||
1,351,342 | ||||||||||
Health Care Providers & Services – 2.9% | ||||||||||
9,100 | Landauer, Inc. | 324,324 | ||||||||
9,200 | Owens & Minor, Inc. | 312,800 | ||||||||
10,300 | Patterson Cos., Inc. | 501,095 | ||||||||
5,400 | Quest Diagnostics, Inc. | 391,608 | ||||||||
1,529,827 | ||||||||||
Hotels, Restaurants & Leisure – 0.3% | ||||||||||
1,500 | McDonald’s Corp.† | 142,605 | ||||||||
Household Durables – 0.4% | ||||||||||
7,500 | MDC Holdings, Inc. | 224,775 | ||||||||
Household Products – 1.1% | ||||||||||
7,300 | Procter & Gamble Co. | 571,152 | ||||||||
Independent Power and Renewable Electricity Producers – 0.4% | ||||||||||
2,400 | NRG Yield, Inc. – Class A | 52,776 | ||||||||
6,400 | NRG Yield, Inc. – Class C | 140,096 | ||||||||
192,872 | ||||||||||
Industrial Conglomerates – 0.4% | ||||||||||
11,000 | Raven Industries, Inc. | 223,630 | ||||||||
Information Technology Services – 0.4% | ||||||||||
2,000 | Accenture PLC – Class A (U.S. Shares)† | 193,560 | ||||||||
Insurance – 1.3% | ||||||||||
2,400 | Allstate Corp.† | 155,688 | ||||||||
4,900 | Arthur J Gallagher & Co.† | 231,770 | ||||||||
5,400 | Marsh & McLennan Cos., Inc. | 306,180 | ||||||||
693,638 | ||||||||||
Leisure Products – 0.6% | ||||||||||
5,000 | Arctic Cat, Inc. | 166,050 | ||||||||
6,000 | Mattel, Inc. | 154,140 | ||||||||
320,190 | ||||||||||
Life Sciences Tools & Services – 0.7% | ||||||||||
9,200 | Agilent Technologies, Inc. | 354,936 | ||||||||
Machinery – 1.0% | ||||||||||
2,400 | Pfeiffer Vacuum Technology AG | 213,809 | ||||||||
4,600 | Timken Co. | 168,222 | ||||||||
1,300 | Valmont Industries, Inc. | 154,531 | ||||||||
536,562 | ||||||||||
Marine – 0.4% | ||||||||||
45,300 | Irish Continental Group PLC | 198,954 | ||||||||
Media – 1.8% | ||||||||||
5,400 | Comcast Corp. – Class A | 324,756 | ||||||||
4,200 | Omnicom Group, Inc. | 291,858 | ||||||||
6,600 | Time, Inc. | 151,866 | ||||||||
19,240 | UBM PLC | 161,557 | ||||||||
930,037 | ||||||||||
Multi-Utilities – 0.3% | ||||||||||
2,700 | Alliant Energy Corp. | 155,844 | ||||||||
Oil, Gas & Consumable Fuels – 4.0% | ||||||||||
7,400 | Anadarko Petroleum Corp. | 577,644 | ||||||||
6,700 | BP PLC (ADR) | 267,732 | ||||||||
3,100 | Chevron Corp. | 299,057 | ||||||||
2,900 | Occidental Petroleum Corp. | 225,533 | ||||||||
15,100 | Plains GP Holdings LP – Class A | 390,184 | ||||||||
5,300 | Royal Dutch Shell PLC (ADR) | 302,153 | ||||||||
2,062,303 | ||||||||||
Paper & Forest Products – 0.4% | ||||||||||
8,300 | PH Glatfelter Co. | 182,517 | ||||||||
Pharmaceuticals – 6.7% | ||||||||||
7,600 | AbbVie, Inc.† | 510,644 | ||||||||
2,900 | Johnson & Johnson | 282,634 | ||||||||
2,700 | Merck & Co., Inc. | 153,711 | ||||||||
4,400 | Novartis AG (ADR) | 432,696 | ||||||||
23,400 | Pfizer, Inc. | 784,602 | ||||||||
11,000 | Phibro Animal Health Corp. – Class A | 428,340 | ||||||||
8,900 | Teva Pharmaceutical Industries, Ltd. (ADR) | 525,990 | ||||||||
7,600 | Zoetis, Inc. | 366,472 | ||||||||
3,485,089 | ||||||||||
Real Estate Investment Trusts (REITs) – 2.4% | ||||||||||
2,200 | Home Properties, Inc. | 160,710 | ||||||||
3,900 | Lamar Advertising Co. – Class A | 224,172 | ||||||||
22,500 | National Storage Affiliates Trust | 279,000 | ||||||||
8,000 | Paramount Group, Inc. | 137,280 | ||||||||
4,100 | Plum Creek Timber Co., Inc. | 166,337 | ||||||||
8,200 | Weyerhaeuser Co. | 258,300 | ||||||||
1,225,799 | ||||||||||
Road & Rail – 2.3% | ||||||||||
2,900 | Canadian Pacific Railway, Ltd. (U.S. Shares)† | 464,667 | ||||||||
9,100 | CSX Corp. | 297,115 | ||||||||
2,700 | Kansas City Southern† | 246,240 | ||||||||
2,200 | Union Pacific Corp. | 209,814 | ||||||||
1,217,836 | ||||||||||
Semiconductor & Semiconductor Equipment – 0.6% | ||||||||||
1,500 | Analog Devices, Inc. | 96,277 | ||||||||
4,800 | Microchip Technology, Inc. | 227,640 | ||||||||
323,917 | ||||||||||
Software – 2.3% | ||||||||||
11,600 | Microsoft Corp. | 512,140 | ||||||||
16,500 | Oracle Corp.† | 664,950 | ||||||||
1,177,090 | ||||||||||
Technology Hardware, Storage & Peripherals – 1.6% | ||||||||||
2,500 | Apple, Inc. | 313,562 | ||||||||
11,600 | EMC Corp. | 306,124 | ||||||||
7,500 | NetApp, Inc. | 236,700 | ||||||||
856,386 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
10 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Textiles, Apparel & Luxury Goods – 0.4% | ||||||||||
2,000 | Coach, Inc. | $ | 69,220 | |||||||
1,100 | Ralph Lauren Corp.† | 145,596 | ||||||||
214,816 | ||||||||||
Tobacco – 0.3% | ||||||||||
5,000 | Swedish Match AB | 142,295 | ||||||||
Transportation Infrastructure – 0.3% | ||||||||||
29,700 | BBA Aviation PLC | 140,769 | ||||||||
Wireless Telecommunication Services – 0.9% | ||||||||||
223,900 | America Movil SAB de CV – Series L | 238,786 | ||||||||
7,000 | Vodafone Group PLC (ADR) | 255,150 | ||||||||
493,936 | ||||||||||
Total Common Stocks (cost $26,537,281) | 29,946,289 | |||||||||
Corporate Bonds – 16.5% | ||||||||||
Banking – 2.0% | ||||||||||
$10,000 | Ally Financial, Inc. 8.0000%, 12/31/18 | 11,162 | ||||||||
55,000 | Ally Financial, Inc. 4.1250%, 3/30/20 | 54,897 | ||||||||
41,000 | Ally Financial, Inc. 4.6250%, 5/19/22 | 40,487 | ||||||||
67,000 | American Express Co. 6.8000%, 9/1/66‡ | 68,936 | ||||||||
80,000 | Bank of America Corp. 8.0000%µ | 84,400 | ||||||||
30,000 | Citigroup, Inc. 5.8000%µ | 30,075 | ||||||||
21,000 | Discover Financial Services 3.9500%, 11/6/24 | 20,405 | ||||||||
42,000 | Discover Financial Services 3.7500%, 3/4/25 | 40,103 | ||||||||
70,000 | Goldman Sachs Capital I 6.3450%, 2/15/34 | 81,189 | ||||||||
34,000 | Goldman Sachs Group, Inc. 5.6250%, 1/15/17 | 36,003 | ||||||||
52,000 | Morgan Stanley 5.5500%µ | 51,623 | ||||||||
48,000 | Royal Bank of Scotland Group PLC 2.5500%, 9/18/15 | 48,134 | ||||||||
53,000 | Royal Bank of Scotland Group PLC 6.1000%, 6/10/23 | 56,352 | ||||||||
245,000 | Royal Bank of Scotland Group PLC 5.1250%, 5/28/24 | 244,718 | ||||||||
56,000 | SVB Financial Group 5.3750%, 9/15/20 | 62,403 | ||||||||
61,000 | Synchrony Financial 3.0000%, 8/15/19 | 61,434 | ||||||||
71,000 | Zions Bancorporation 5.8000%µ | 67,539 | ||||||||
1,059,860 | ||||||||||
Basic Industry – 1.0% | ||||||||||
77,000 | Albemarle Corp. 4.1500%, 12/1/24 | 76,751 | ||||||||
62,000 | Albemarle Corp. 5.4500%, 12/1/44 | 62,056 | ||||||||
49,000 | Ashland, Inc. 3.8750%, 4/15/18 | 50,347 | ||||||||
40,000 | Ashland, Inc. 6.8750%, 5/15/43 | 40,600 | ||||||||
91,000 | Georgia-Pacific LLC 3.1630%, 11/15/21 (144A) | 92,107 | ||||||||
46,000 | Georgia-Pacific LLC 3.6000%, 3/1/25 (144A) | 45,549 | ||||||||
64,000 | LyondellBasell Industries NV 4.6250%, 2/26/55 | 56,361 | ||||||||
59,000 | Reliance Steel & Aluminum Co. 4.5000%, 4/15/23 | 58,041 | ||||||||
59,000 | Rockwood Specialties Group, Inc. 4.6250%, 10/15/20 | 61,434 | ||||||||
543,246 | ||||||||||
Brokerage – 2.0% | ||||||||||
88,000 | Ameriprise Financial, Inc. 7.5180%, 6/1/66‡ | 88,000 | ||||||||
53,000 | Carlyle Holdings Finance LLC 3.8750%, 2/1/23 (144A) | 53,566 | ||||||||
36,000 | Charles Schwab Corp. 3.0000%, 3/10/25 | 35,311 | ||||||||
45,000 | Charles Schwab Corp. 7.0000%µ | 52,265 | ||||||||
60,000 | E*TRADE Financial Corp. 5.3750%, 11/15/22 | 61,500 | ||||||||
78,000 | E*TRADE Financial Corp. 4.6250%, 9/15/23 | 76,635 | ||||||||
2,000 | Lazard Group LLC 6.8500%, 6/15/17 | 2,185 | ||||||||
60,000 | Lazard Group LLC 4.2500%, 11/14/20 | 63,088 | ||||||||
90,000 | Neuberger Berman Group LLC / Neuberger Berman Finance Corp. 5.8750%, 3/15/22 (144A) | 96,187 | ||||||||
60,000 | Neuberger Berman Group LLC / Neuberger Berman Finance Corp. 4.8750%, 4/15/45 (144A) | 54,403 | ||||||||
215,000 | Raymond James Financial, Inc. 5.6250%, 4/1/24 | 239,166 | ||||||||
62,000 | Stifel Financial Corp. 4.2500%, 7/18/24 | 61,260 | ||||||||
49,000 | TD Ameritrade Holding Corp. 2.9500%, 4/1/22 | 48,584 | ||||||||
108,000 | TD Ameritrade Holding Corp. 3.6250%, 4/1/25 | 109,679 | ||||||||
1,041,829 | ||||||||||
Capital Goods – 0.8% | ||||||||||
53,000 | CNH Industrial Capital LLC 3.6250%, 4/15/18 | 53,000 | ||||||||
61,000 | Exelis, Inc. 4.2500%, 10/1/16 | 62,953 | ||||||||
28,000 | Exelis, Inc. 5.5500%, 10/1/21 | 30,809 | ||||||||
20,000 | Harris Corp. 3.8320%, 4/27/25 | 19,441 | ||||||||
30,000 | Harris Corp. 5.0540%, 4/27/45 | 28,581 | ||||||||
43,000 | Martin Marietta Materials, Inc. 4.2500%, 7/2/24 | 43,530 | ||||||||
22,000 | Owens Corning 4.2000%, 12/1/24 | 21,595 | ||||||||
29,000 | Vulcan Materials Co. 7.0000%, 6/15/18 | 32,770 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 11
Table of Contents
Perkins Value Plus Income Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Capital Goods – (continued) | ||||||||||
$18,000 | Vulcan Materials Co. 7.5000%, 6/15/21 | $ | 20,700 | |||||||
88,000 | Vulcan Materials Co. 4.5000%, 4/1/25 | 87,780 | ||||||||
401,159 | ||||||||||
Communications – 0.3% | ||||||||||
40,000 | Nielsen Finance LLC / Nielsen Finance Co. 4.5000%, 10/1/20 | 39,800 | ||||||||
50,000 | SBA Tower Trust 2.9330%, 12/15/17 (144A) | 50,738 | ||||||||
58,000 | UBM PLC 5.7500%, 11/3/20 (144A) | 62,588 | ||||||||
153,126 | ||||||||||
Consumer Cyclical – 1.3% | ||||||||||
59,000 | 1011778 BC ULC / New Red Finance, Inc. 4.6250%, 1/15/22 (144A) | 58,115 | ||||||||
75,000 | Brinker International, Inc. 3.8750%, 5/15/23 | 73,127 | ||||||||
31,000 | DR Horton, Inc. 4.7500%, 5/15/17 | 32,163 | ||||||||
63,000 | DR Horton, Inc. 3.7500%, 3/1/19 | 63,473 | ||||||||
188,000 | General Motors Co. 4.8750%, 10/2/23 | 198,203 | ||||||||
15,000 | General Motors Co. 6.2500%, 10/2/43 | 16,733 | ||||||||
72,000 | MDC Holdings, Inc. 5.5000%, 1/15/24 | 70,740 | ||||||||
50,000 | Starwood Hotels & Resorts Worldwide, Inc. 7.1500%, 12/1/19 | 58,161 | ||||||||
28,000 | Toll Brothers Finance Corp. 4.0000%, 12/31/18 | 28,560 | ||||||||
15,000 | Toll Brothers Finance Corp. 4.3750%, 4/15/23 | 14,700 | ||||||||
46,000 | Wynn Las Vegas LLC / Wynn Las Vegas Capital Corp. 4.2500%, 5/30/23 (144A) | 42,320 | ||||||||
656,295 | ||||||||||
Consumer Non-Cyclical – 2.0% | ||||||||||
75,000 | Actavis Funding SCS 3.0000%, 3/12/20 | 75,170 | ||||||||
16,000 | Actavis Funding SCS 3.8500%, 6/15/24 | 15,807 | ||||||||
87,000 | Actavis Funding SCS 3.8000%, 3/15/25 | 85,462 | ||||||||
41,000 | Actavis Funding SCS 4.5500%, 3/15/35 | 38,982 | ||||||||
14,000 | Actavis Funding SCS 4.8500%, 6/15/44 | 13,507 | ||||||||
31,000 | Actavis Funding SCS 4.7500%, 3/15/45 | 29,514 | ||||||||
52,000 | Becton Dickinson and Co. 1.8000%, 12/15/17 | 52,006 | ||||||||
63,000 | Fresenius Medical Care US Finance II, Inc. 5.8750%, 1/31/22 (144A) | 66,780 | ||||||||
34,000 | HJ Heinz Co. 2.8000%, 7/2/20 (144A) | 34,026 | ||||||||
29,000 | HJ Heinz Co. 3.5000%, 7/15/22 (144A) | 29,068 | ||||||||
58,000 | Laboratory Corp. of America Holdings 3.2000%, 2/1/22 | 57,182 | ||||||||
58,000 | Laboratory Corp. of America Holdings 3.6000%, 2/1/25 | 55,472 | ||||||||
22,000 | Omnicare, Inc. 4.7500%, 12/1/22 | 23,320 | ||||||||
30,000 | Omnicare, Inc. 5.0000%, 12/1/24 | 32,250 | ||||||||
15,000 | Smithfield Foods, Inc. 5.2500%, 8/1/18 (144A) | 15,225 | ||||||||
28,000 | Thermo Fisher Scientific, Inc. 3.3000%, 2/15/22 | 27,669 | ||||||||
24,000 | Tyson Foods, Inc. 6.6000%, 4/1/16 | 24,917 | ||||||||
30,000 | Valeant Pharmaceuticals International, Inc. 5.8750%, 5/15/23 (144A) | 30,750 | ||||||||
31,000 | Valeant Pharmaceuticals International, Inc. 6.1250%, 4/15/25 (144A) | 31,891 | ||||||||
103,000 | Wm Wrigley Jr Co. 3.3750%, 10/21/20 (144A) | 106,139 | ||||||||
55,000 | Zimmer Biomet Holdings, Inc. 2.7000%, 4/1/20 | 54,728 | ||||||||
65,000 | Zimmer Biomet Holdings, Inc. 3.1500%, 4/1/22 | 63,938 | ||||||||
75,000 | Zimmer Biomet Holdings, Inc. 3.5500%, 4/1/25 | 72,464 | ||||||||
1,036,267 | ||||||||||
Electric – 0.3% | ||||||||||
45,000 | IPALCO Enterprises, Inc. 5.0000%, 5/1/18 | 47,475 | ||||||||
46,000 | PPL WEM, Ltd. / Western Power Distribution, Ltd. 3.9000%, 5/1/16 (144A) | 46,920 | ||||||||
67,000 | PPL WEM, Ltd. / Western Power Distribution, Ltd. 5.3750%, 5/1/21 (144A) | 74,113 | ||||||||
168,508 | ||||||||||
Energy – 2.1% | ||||||||||
37,000 | Chesapeake Energy Corp. 5.3750%, 6/15/21 | 33,485 | ||||||||
58,000 | Chesapeake Energy Corp. 4.8750%, 4/15/22 | 50,315 | ||||||||
41,000 | Chevron Corp. 1.3450%, 11/15/17 | 41,167 | ||||||||
104,000 | Cimarex Energy Co. 5.8750%, 5/1/22 | 111,280 | ||||||||
126,000 | Cimarex Energy Co. 4.3750%, 6/1/24 | 124,448 | ||||||||
65,000 | DCP Midstream Operating LP 4.9500%, 4/1/22 | 64,102 | ||||||||
43,000 | DCP Midstream Operating LP 3.8750%, 3/15/23 | 39,728 | ||||||||
16,000 | DCP Midstream Operating LP 5.6000%, 4/1/44 | 14,270 | ||||||||
44,000 | Energy Transfer Partners LP 4.1500%, 10/1/20 | 45,221 | ||||||||
44,000 | EnLink Midstream Partners LP 4.4000%, 4/1/24 | 44,118 | ||||||||
32,000 | EnLink Midstream Partners LP 5.6000%, 4/1/44 | 31,092 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
12 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Energy – (continued) | ||||||||||
$77,000 | Helmerich & Payne International Drilling Co. 4.6500%, 3/15/25 (144A) | $ | 79,486 | |||||||
43,000 | Kinder Morgan Energy Partners LP 4.3000%, 5/1/24 | 42,434 | ||||||||
5,000 | Kinder Morgan, Inc. 6.5000%, 9/15/20 | 5,718 | ||||||||
32,000 | Kinder Morgan, Inc. 7.7500%, 1/15/32 | 36,674 | ||||||||
67,000 | NGL Energy Partners LP / NGL Energy Finance Corp. 5.1250%, 7/15/19 | 66,833 | ||||||||
113,000 | Oceaneering International, Inc. 4.6500%, 11/15/24 | 112,897 | ||||||||
16,000 | Phillips 66 Partners LP 3.6050%, 2/15/25 | 15,058 | ||||||||
58,000 | Spectra Energy Partners LP 4.7500%, 3/15/24 | 61,296 | ||||||||
48,000 | Targa Resources Partners LP / Targa Resources Partners Finance Corp. 4.1250%, 11/15/19 (144A) | 47,520 | ||||||||
1,067,142 | ||||||||||
Finance Companies – 0.9% | ||||||||||
97,000 | CIT Group, Inc. 4.2500%, 8/15/17 | 98,455 | ||||||||
82,000 | CIT Group, Inc. 5.5000%, 2/15/19 (144A) | 85,485 | ||||||||
50,000 | GE Capital Trust I 6.3750%, 11/15/67‡ | 53,400 | ||||||||
5,000 | General Electric Capital Corp. 6.3750%, 11/15/67‡ | 5,375 | ||||||||
100,000 | General Electric Capital Corp. 6.2500%µ | 109,375 | ||||||||
100,000 | General Electric Capital Corp. 7.1250%µ | 115,375 | ||||||||
467,465 | ||||||||||
Financial – 0.3% | ||||||||||
102,000 | Jones Lang LaSalle, Inc. 4.4000%, 11/15/22 | 104,620 | ||||||||
70,000 | Kennedy-Wilson, Inc. 5.8750%, 4/1/24 | 69,650 | ||||||||
174,270 | ||||||||||
Industrial – 0.1% | ||||||||||
31,000 | Cintas Corp. No 2 2.8500%, 6/1/16 | 31,396 | ||||||||
34,000 | Cintas Corp. No 2 4.3000%, 6/1/21 | 36,678 | ||||||||
68,074 | ||||||||||
Insurance – 0.4% | ||||||||||
13,000 | CNO Financial Group, Inc. 4.5000%, 5/30/20 | 13,195 | ||||||||
38,000 | CNO Financial Group, Inc. 5.2500%, 5/30/25 | 38,616 | ||||||||
82,000 | Primerica, Inc. 4.7500%, 7/15/22 | 87,484 | ||||||||
63,000 | Voya Financial, Inc. 5.6500%, 5/15/53‡ | 64,339 | ||||||||
203,634 | ||||||||||
Real Estate Investment Trusts (REITs) – 0.7% | ||||||||||
63,000 | Alexandria Real Estate Equities, Inc. 2.7500%, 1/15/20 | 62,360 | ||||||||
65,000 | Alexandria Real Estate Equities, Inc. 4.6000%, 4/1/22 | 68,473 | ||||||||
37,000 | Post Apartment Homes LP 4.7500%, 10/15/17 | 39,425 | ||||||||
18,000 | Retail Opportunity Investments Partnership LP 5.0000%, 12/15/23 | 18,886 | ||||||||
22,000 | Retail Opportunity Investments Partnership LP 4.0000%, 12/15/24 | 21,767 | ||||||||
27,000 | Senior Housing Properties Trust 6.7500%, 12/15/21 | 30,734 | ||||||||
130,000 | SL Green Realty Corp. 5.0000%, 8/15/18 | 139,186 | ||||||||
380,831 | ||||||||||
Technology – 2.0% | ||||||||||
47,000 | Autodesk, Inc. 3.6000%, 12/15/22 | 46,752 | ||||||||
98,000 | Cadence Design Systems, Inc. 4.3750%, 10/15/24 | 98,314 | ||||||||
14,000 | Fidelity National Information Services, Inc. 5.0000%, 3/15/22 | 14,778 | ||||||||
24,000 | Molex Electronic Technologies LLC 2.8780%, 4/15/20 (144A) | 23,632 | ||||||||
94,000 | Molex Electronic Technologies LLC 3.9000%, 4/15/25 (144A) | 91,082 | ||||||||
15,000 | Seagate HDD Cayman 4.7500%, 6/1/23 | 15,235 | ||||||||
215,000 | Seagate HDD Cayman 4.7500%, 1/1/25 (144A) | 213,678 | ||||||||
49,000 | Seagate HDD Cayman 4.8750%, 6/1/27 (144A) | 47,631 | ||||||||
63,000 | Seagate HDD Cayman 5.7500%, 12/1/34 (144A) | 62,031 | ||||||||
107,000 | Trimble Navigation, Ltd. 4.7500%, 12/1/24 | 107,144 | ||||||||
49,000 | Verisk Analytics, Inc. 4.8750%, 1/15/19 | 52,381 | ||||||||
97,000 | Verisk Analytics, Inc. 5.8000%, 5/1/21 | 109,134 | ||||||||
101,000 | Verisk Analytics, Inc. 4.0000%, 6/15/25 | 98,910 | ||||||||
54,000 | Verisk Analytics, Inc. 5.5000%, 6/15/45 | 53,109 | ||||||||
1,033,811 | ||||||||||
Transportation – 0.3% | ||||||||||
7,000 | Asciano Finance, Ltd. 3.1250%, 9/23/15 (144A) | 7,029 | ||||||||
13,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 2.5000%, 3/15/16 (144A) | 13,091 | ||||||||
52,000 | Penske Truck Leasing Co. LP / PTL Finance Corp. 4.2500%, 1/17/23 (144A) | 52,697 | ||||||||
53,000 | Southwest Airlines Co. 5.1250%, 3/1/17 | 56,237 | ||||||||
129,054 | ||||||||||
Total Corporate Bonds (cost $8,485,809) | 8,584,571 | |||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 13
Table of Contents
Perkins Value Plus Income Fund
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
Mortgage-Backed Securities – 7.3% | ||||||||||
Fannie Mae Pool: | ||||||||||
$11,722 | 5.5000%, 1/1/25 | $ | 12,797 | |||||||
11,521 | 4.0000%, 6/1/29 | 12,388 | ||||||||
39,282 | 5.0000%, 9/1/29 | 43,344 | ||||||||
13,730 | 5.0000%, 1/1/30 | 15,159 | ||||||||
7,120 | 5.5000%, 1/1/33 | 7,999 | ||||||||
23,878 | 4.0000%, 4/1/34 | 25,768 | ||||||||
36,862 | 6.0000%, 12/1/35 | 42,159 | ||||||||
5,852 | 6.0000%, 2/1/37 | 6,767 | ||||||||
45,642 | 6.0000%, 9/1/37 | 50,243 | ||||||||
34,372 | 6.0000%, 10/1/38 | 39,105 | ||||||||
11,444 | 7.0000%, 2/1/39 | 13,831 | ||||||||
47,933 | 5.5000%, 3/1/40 | 54,750 | ||||||||
131,850 | 5.5000%, 4/1/40 | 148,691 | ||||||||
10,838 | 4.5000%, 10/1/40 | 11,804 | ||||||||
109,638 | 5.0000%, 2/1/41 | 122,104 | ||||||||
25,954 | 5.5000%, 2/1/41 | 29,620 | ||||||||
23,772 | 5.0000%, 4/1/41 | 26,490 | ||||||||
18,815 | 5.0000%, 5/1/41 | 20,839 | ||||||||
50,152 | 5.0000%, 7/1/41 | 55,844 | ||||||||
24,114 | 5.0000%, 10/1/41 | 26,827 | ||||||||
39,706 | 5.5000%, 12/1/41 | 44,825 | ||||||||
64,654 | 4.0000%, 6/1/42 | 68,992 | ||||||||
27,046 | 4.0000%, 8/1/42 | 28,861 | ||||||||
33,210 | 4.0000%, 9/1/42 | 35,445 | ||||||||
51,914 | 4.0000%, 11/1/42 | 55,401 | ||||||||
10,011 | 4.0000%, 12/1/42 | 10,706 | ||||||||
132,872 | 3.5000%, 2/1/43 | 137,146 | ||||||||
26,947 | 4.0000%, 9/1/43 | 28,738 | ||||||||
67,732 | 3.5000%, 1/1/44 | 70,244 | ||||||||
144,042 | 3.5000%, 1/1/44 | 149,455 | ||||||||
70,465 | 4.0000%, 2/1/44 | 75,213 | ||||||||
73,428 | 3.5000%, 4/1/44 | 76,008 | ||||||||
167,894 | 4.5000%, 5/1/44 | 185,091 | ||||||||
89,413 | 4.0000%, 6/1/44 | 95,426 | ||||||||
51,760 | 5.0000%, 7/1/44 | 58,444 | ||||||||
34,207 | 4.0000%, 8/1/44 | 36,665 | ||||||||
72,883 | 4.5000%, 8/1/44 | 80,301 | ||||||||
28,667 | 4.5000%, 10/1/44 | 31,556 | ||||||||
53,266 | 4.5000%, 10/1/44 | 58,691 | ||||||||
100,994 | 3.5000%, 2/1/45 | 104,229 | ||||||||
52,589 | 4.5000%, 3/1/45 | 57,889 | ||||||||
Freddie Mac Gold Pool: | ||||||||||
8,199 | 5.0000%, 1/1/19 | 8,561 | ||||||||
7,218 | 5.5000%, 8/1/19 | 7,570 | ||||||||
14,830 | 5.0000%, 6/1/20 | 15,808 | ||||||||
30,901 | 5.5000%, 12/1/28 | 34,587 | ||||||||
31,937 | 3.5000%, 7/1/29 | 33,680 | ||||||||
24,972 | 5.5000%, 10/1/36 | 28,173 | ||||||||
132,734 | 6.0000%, 4/1/40 | 151,365 | ||||||||
32,408 | 4.5000%, 1/1/41 | 35,251 | ||||||||
64,406 | 5.0000%, 5/1/41 | 71,839 | ||||||||
39,210 | 3.5000%, 2/1/44 | 40,473 | ||||||||
11,370 | 4.0000%, 8/1/44 | 12,145 | ||||||||
109,351 | 4.5000%, 9/1/44 | 120,441 | ||||||||
Ginnie Mae I Pool: | ||||||||||
43,356 | 5.1000%, 1/15/32 | 49,641 | ||||||||
51,877 | 4.9000%, 10/15/34 | 57,753 | ||||||||
7,015 | 5.5000%, 9/15/35 | 8,168 | ||||||||
111,461 | 5.5000%, 8/15/39 | 128,483 | ||||||||
22,412 | 5.0000%, 10/15/39 | 25,019 | ||||||||
36,873 | 5.0000%, 11/15/39 | 40,934 | ||||||||
11,109 | 5.0000%, 1/15/40 | 12,331 | ||||||||
13,534 | 5.0000%, 5/15/40 | 15,257 | ||||||||
4,723 | 5.0000%, 7/15/40 | 5,239 | ||||||||
39,841 | 5.0000%, 7/15/40 | 44,205 | ||||||||
39,695 | 5.0000%, 2/15/41 | 44,091 | ||||||||
14,558 | 5.0000%, 5/15/41 | 16,521 | ||||||||
10,329 | 4.5000%, 7/15/41 | 11,367 | ||||||||
40,628 | 4.5000%, 7/15/41 | 44,181 | ||||||||
99,573 | 4.5000%, 8/15/41 | 110,163 | ||||||||
11,827 | 5.0000%, 9/15/41 | 13,191 | ||||||||
Ginnie Mae II Pool: | ||||||||||
20,971 | 6.0000%, 11/20/34 | 24,322 | ||||||||
22,915 | 5.5000%, 11/20/37 | 25,661 | ||||||||
9,976 | 6.0000%, 1/20/39 | 11,301 | ||||||||
56,098 | 4.5000%, 10/20/41 | 60,593 | ||||||||
4,022 | 6.0000%, 10/20/41 | 4,625 | ||||||||
13,273 | 6.0000%, 12/20/41 | 15,214 | ||||||||
13,282 | 6.0000%, 1/20/42 | 15,256 | ||||||||
13,437 | 6.0000%, 2/20/42 | 15,436 | ||||||||
7,705 | 6.0000%, 3/20/42 | 8,854 | ||||||||
21,800 | 6.0000%, 4/20/42 | 25,049 | ||||||||
20,311 | 3.5000%, 5/20/42 | 21,196 | ||||||||
17,202 | 6.0000%, 5/20/42 | 19,532 | ||||||||
47,442 | 5.5000%, 7/20/42 | 53,321 | ||||||||
11,776 | 6.0000%, 7/20/42 | 13,526 | ||||||||
12,111 | 6.0000%, 8/20/42 | 13,905 | ||||||||
15,380 | 6.0000%, 9/20/42 | 17,696 | ||||||||
11,313 | 6.0000%, 11/20/42 | 12,960 | ||||||||
15,074 | 6.0000%, 2/20/43 | 17,326 | ||||||||
Total Mortgage-Backed Securities (cost $3,786,291) | 3,818,065 | |||||||||
Preferred Stocks – 0.8% | ||||||||||
Capital Markets – 0.3% | ||||||||||
1,925 | Morgan Stanley, 6.8750% | 51,359 | ||||||||
2,150 | Morgan Stanley, 7.1250% | 60,092 | ||||||||
400 | Morgan Stanley Capital Trust III, 6.2500% | 10,212 | ||||||||
64 | Morgan Stanley Capital Trust IV, 6.2500% | 1,628 | ||||||||
45 | Morgan Stanley Capital Trust V, 5.7500% | 1,137 | ||||||||
17 | Morgan Stanley Capital Trust VIII, 6.4500% | 431 | ||||||||
425 | State Street Corp., 5.9000% | 10,910 | ||||||||
135,769 | ||||||||||
Commercial Banks – 0.3% | ||||||||||
2,075 | Citigroup Capital XIII, 7.8750% | 53,867 | ||||||||
3,150 | Wells Fargo & Co., 6.6250% | 86,940 | ||||||||
140,807 | ||||||||||
Consumer Finance – 0.2% | ||||||||||
58 | Ally Financial, Inc., 7.0000% (144A) | 58,607 | ||||||||
2,850 | Discover Financial Services, 6.5000% | 72,590 | ||||||||
131,197 | ||||||||||
Industrial Conglomerates – 0% | ||||||||||
224 | General Electric Capital Corp., 4.7000% | 5,443 | ||||||||
Pharmaceuticals – 0% | ||||||||||
18 | Allergan PLC, 5.5000% | 18,766 | ||||||||
Total Preferred Stocks (cost $414,901) | 431,982 | |||||||||
U.S. Treasury Notes/Bonds – 13.1% | ||||||||||
$1,488,000 | 0.3750%, 5/31/16 | 1,489,046 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
14 | JUNE 30, 2015
Table of Contents
Schedule of Investments
As of June 30, 2015
Shares or Principal Amount | Value | |||||||||
U.S. Treasury Notes/Bonds – (continued) | ||||||||||
$560,000 | 0.5000%, 1/31/17 | $ | 559,825 | |||||||
176,000 | 0.5000%, 3/31/17 | 175,821 | ||||||||
739,000 | 0.5000%, 4/30/17 | 737,788 | ||||||||
5,000 | 1.0000%, 9/15/17 | 5,029 | ||||||||
60,000 | 0.8750%, 10/15/17 | 60,136 | ||||||||
228,000 | 1.0000%, 12/15/17 | 228,980 | ||||||||
425,000 | 1.3750%, 7/31/18 | 429,250 | ||||||||
192,000 | 1.5000%, 8/31/18† | 194,505 | ||||||||
104,000 | 1.3750%, 9/30/18 | 104,861 | ||||||||
33,000 | 1.6250%, 7/31/19 | 33,281 | ||||||||
7,000 | 1.7500%, 9/30/19 | 7,084 | ||||||||
165,000 | 1.5000%, 10/31/19 | 165,090 | ||||||||
261,000 | 1.5000%, 11/30/19 | 261,041 | ||||||||
23,000 | 1.6250%, 12/31/19 | 23,095 | ||||||||
331,000 | 2.7500%, 11/15/23† | 344,085 | ||||||||
47,000 | 2.3750%, 8/15/24 | 47,254 | ||||||||
682,000 | 2.2500%, 11/15/24† | 677,844 | ||||||||
359,000 | 2.1250%, 5/15/25 | 352,493 | ||||||||
282,000 | 3.7500%, 11/15/43 | 317,206 | ||||||||
102,000 | 3.6250%, 2/15/44 | 112,144 | ||||||||
136,000 | 3.3750%, 5/15/44 | 142,853 | ||||||||
62,000 | 3.1250%, 8/15/44 | 62,102 | ||||||||
70,000 | 3.0000%, 11/15/44 | 68,474 | ||||||||
237,000 | 3.0000%, 5/15/45 | 232,260 | ||||||||
Total U.S. Treasury Notes/Bonds (cost $6,755,236) | 6,831,547 | |||||||||
Investment Companies – 0.8% | ||||||||||
Money Markets – 0.8% | ||||||||||
395,199 | Janus Cash Liquidity Fund LLC, 0.1291%°°,£ (cost $395,199) | 395,199 | ||||||||
Total Investments (total cost $47,846,327) – 98.8% | 51,472,836 | |||||||||
Cash, Receivables and Other Assets, net of Liabilities – 1.2% | 629,557 | |||||||||
Net Assets – 100% | $ | 52,102,393 | ||||||||
Summary of Investments by Country – (Long Positions) (unaudited)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States | $ | 46,515,202 | 90 | .4% | ||||
United Kingdom | 1,510,268 | 2 | .9 | |||||
Switzerland | 591,571 | 1 | .2 | |||||
Israel | 525,990 | 1 | .0 | |||||
Canada | 522,782 | 1 | .0 | |||||
Netherlands | 366,492 | 0 | .7 | |||||
Norway | 298,830 | 0 | .6 | |||||
Germany | 280,589 | 0 | .5 | |||||
Singapore | 274,048 | 0 | .5 | |||||
Mexico | 238,786 | 0 | .5 | |||||
Ireland | 198,954 | 0 | .4 | |||||
Sweden | 142,295 | 0 | .3 | |||||
Australia | 7,029 | 0 | .0 | |||||
Total | $ | 51,472,836 | 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 7/16/15 | 294,000 | $ | 461,821 | $ | (7,185) | |||||||
Canadian Dollar 7/16/15 | 503,300 | 402,958 | 5,553 | |||||||||
Euro 7/16/15 | 65,100 | 72,582 | 760 | |||||||||
Israeli Shekel 7/16/15 | 1,535,000 | 407,035 | (6,670) | |||||||||
Mexican Peso 7/16/15 | 2,737,000 | 173,972 | 2,222 | |||||||||
Norwegian Krone 7/16/15 | 1,765,000 | 225,140 | 965 | |||||||||
Swedish Krona 7/16/15 | 925,000 | 111,676 | 850 | |||||||||
Swiss Franc 7/16/15 | 432,200 | 462,682 | 66 | |||||||||
2,317,866 | (3,439) | |||||||||||
HSBC Securities (USA), Inc.: | ||||||||||||
British Pound 7/23/15 | 350,000 | 549,757 | 4,640 | |||||||||
Euro 7/23/15 | 217,400 | 242,409 | 3,405 | |||||||||
792,166 | 8,045 | |||||||||||
Total | $ | 3,110,032 | $ | 4,606 | ||||||||
Schedule of Exchange-Traded Written Options – Calls
Description | Value | ||
Accenture PLC – Class A (U.S. Shares) expires July 2015 6 contracts exercise price $105.00 | $ | (25) | |
Allstate Corp. expires July 2015 9 contracts exercise price $70.00 | (69) | ||
Arthur J Gallagher & Co. expires July 2015 13 contracts exercise price $50.00 | (44) | ||
Canadian Pacific Railway, Ltd. (U.S. Shares) expires July 2015 4 contracts exercise price $185.00 | (15) | ||
Casey’s General Stores, Inc. expires July 2015 7 contracts exercise price $100.00 | (350) | ||
Gilead Sciences, Inc. expires July 2015 5 contracts exercise price $130.00 | (40) |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
Janus Investment Fund | 15
Table of Contents
Perkins Value Plus Income Fund
Schedule of Investments
As of June 30, 2015
Description | Value | ||
Kansas City Southern expires July 2015 7 contracts exercise price $105.00 | $ | (60) | |
McDonald’s Corp. expires July 2015 7 contracts exercise price $100.00 | (100) | ||
PepsiCo, Inc. expires July 2015 7 contracts exercise price $97.50 | (77) | ||
Ralph Lauren Corp. expires July 2015 5 contracts exercise price $145.00 | (102) | ||
United Technologies Corp. expires July 2015 5 contracts exercise price $120.00 | (12) | ||
Total Exchange-Traded Written Options – Calls (premiums received $2,437) | $ | (894) | |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements.
16 | JUNE 30, 2015
Table of Contents
Notes to Schedule of Investments and Other Information
Barclays U.S. Aggregate Bond Index | A broad-based measure of the investment grade, US dollar-denominated, fixed-rate taxable bond market. | |
Russell 1000® Value Index | Measures the performance of those Russell 1000® Index companies with lower price-to-book ratios and lower forecasted growth values. | |
S&P 500® Index | Measures broad U.S. equity performance. | |
Value Income Index | An internally-calculated, hypothetical combination of total returns from the Russell 1000® Value Index (50%) and the Barclays U.S. Aggregate Bond Index (50%). | |
ADR | American Depositary Receipt | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
PLC | Public Limited Company | |
ULC | Unlimited Liability 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 year ended June 30, 2015 is indicated in the table below: |
Value as a % | ||||||||||
Fund | Value | of Net Assets | ||||||||
Perkins Value Plus Income Fund | $ | 2,174,515 | 4.2 | % | ||||||
(a) | All or a portion of this position has not settled, or is not funded. Upon settlement or funding date, interest rates for unsettled or unfunded amounts will be determined. Interest and dividends will not be accrued until time of settlement or funding. | |
† | A portion of this security has been segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales, swap agreements, and/or securities with extended settlement dates, the value of which, as of June 30, 2015, is noted below. |
Fund | Aggregate Value | ||||
Perkins Value Plus Income Fund | $ | 2,263,079 | |||
‡ | 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 year end. | |
°° | Rate shown is the 7-day yield as of June 30, 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 June 30, 2015) |
Acquisition | Acquisition | Value as a | ||||||||||||
Date | Cost | Value | % of Net Assets | |||||||||||
Perkins Value Plus Income Fund | ||||||||||||||
FREMF 2010 K-SCT Mortgage Trust, 2.0000%, 1/25/20 | 4/29/13 | $ | 69,393 | $ | 69,425 | 0.1 | % | |||||||
The Fund has registration rights for certain restricted securities held as of June 30, 2015. The issuer incurs all registration costs.
Janus Investment Fund | 17
Table of Contents
Notes to Schedule of Investments and Other Information (continued)
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. Based on the Fund’s relative ownership, the following securities were considered affiliated companies for all or some portion of the year ended June 30, 2015. Unless otherwise indicated, all information in the table is for the year ended June 30, 2015. |
Share | Share | ||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||
at 6/30/14 | Purchases | Sales | at 6/30/15 | Gain/(Loss) | Income | at 6/30/15 | |||||||||||||||
Perkins Value Plus Income Fund | |||||||||||||||||||||
Janus Cash Liquidity Fund LLC | 787,285 | 22,789,612 | (23,181,698) | 395,199 | $ | – | $ | 641 | $ | 395,199 | |||||||||||
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 June 30, 2015. See Notes to Financial Statements for more information.
Valuation Inputs Summary (as of June 30, 2015)
Level 2 – Other Significant | Level 3 – Significant | ||||||||||
Level 1 – Quoted Prices | Observable Inputs | Unobservable Inputs | |||||||||
Perkins Value Plus Income Fund | |||||||||||
Assets | |||||||||||
Investments in Securities: | |||||||||||
Asset-Backed/Commercial Mortgage-Backed Securities | $ | – | $ | 1,049,499 | $ | – | |||||
Bank Loans and Mezzanine Loans | – | 415,684 | – | ||||||||
Common Stocks | 29,946,289 | – | – | ||||||||
Corporate Bonds | – | 8,584,571 | – | ||||||||
Mortgage-Backed Securities | – | 3,818,065 | – | ||||||||
Preferred Stocks | – | 431,982 | – | ||||||||
U.S. Treasury Notes/Bonds | – | 6,831,547 | – | ||||||||
Investment Companies | – | 395,199 | – | ||||||||
Total Investments in Securities | $ | 29,946,289 | $ | 21,526,547 | $ | – | |||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 18,461 | $ | – | |||||
Total Assets | $ | 29,946,289 | $ | 21,545,008 | $ | – | |||||
Liabilities | |||||||||||
Other Financial Instruments(a): | |||||||||||
Forward Currency Contracts | $ | – | $ | 13,855 | $ | – | |||||
Options Written, at Value | – | 894 | – | ||||||||
Total Liabilities | $ | – | $ | 14,749 | $ | – | |||||
(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 | JUNE 30, 2015
Table of Contents
Statement of Assets and Liabilities
As of June 30, 2015 | Perkins Value Plus Income Fund | |||
Assets: | ||||
Investments, at cost | $ | 47,846,327 | ||
Unaffiliated investments, at value | $ | 51,077,637 | ||
Affiliated investments, at value | 395,199 | |||
Cash | 26,349 | |||
Forward currency contracts | 18,461 | |||
Closed foreign currency contracts | 1,227 | |||
Non-interested Trustees’ deferred compensation | 1,041 | |||
Receivables: | ||||
Investments sold | 1,201,829 | |||
Fund shares sold | 58,166 | |||
Dividends | 59,800 | |||
Dividends from affiliates | 54 | |||
Foreign dividend tax reclaim | 8,476 | |||
Interest | 124,980 | |||
Due from adviser | 39,450 | |||
Other assets | 884 | |||
Total Assets | 53,013,553 | |||
Liabilities: | ||||
Forward currency contracts | 13,855 | |||
Closed foreign currency contracts | 811 | |||
Options written, at value(1) | 894 | |||
Payables: | ||||
Investments purchased | 694,590 | |||
Fund shares repurchased | 15,440 | |||
Dividends | 3,213 | |||
Advisory fees | 26,106 | |||
Fund administration fees | 413 | |||
Transfer agent fees and expenses | 18,941 | |||
12b-1 Distribution and shareholder servicing fees | 9,633 | |||
Non-interested Trustees’ fees and expenses | 339 | |||
Non-interested Trustees’ deferred compensation fees | 1,041 | |||
Accrued expenses and other payables | 125,884 | |||
Total Liabilities | 911,160 | |||
Net Assets | $ | 52,102,393 |
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 June 30, 2015 | Perkins Value Plus Income Fund | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $ | 47,967,661 | ||
Undistributed net investment income/(loss) | (4,252) | |||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | 506,759 | |||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 3,632,225 | |||
Total Net Assets | $ | 52,102,393 | ||
Net Assets - Class A Shares | $ | 6,213,198 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 551,927 | |||
Net Asset Value Per Share(2) | $ | 11.26 | ||
Maximum Offering Price Per Share(3) | $ | 11.95 | ||
Net Assets - Class C Shares | $ | 7,029,185 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 623,107 | |||
Net Asset Value Per Share(2) | $ | 11.28 | ||
Net Assets - Class D Shares | $ | 29,170,353 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,590,625 | |||
Net Asset Value Per Share | $ | 11.26 | ||
Net Assets - Class I Shares | $ | 3,965,304 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 351,878 | |||
Net Asset Value Per Share | $ | 11.27 | ||
Net Assets - Class S Shares | $ | 2,062,617 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 183,110 | |||
Net Asset Value Per Share | $ | 11.26 | ||
Net Assets - Class T Shares | $ | 3,661,736 | ||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 325,075 | |||
Net Asset Value Per Share | $ | 11.26 |
(1) | Premiums received $2,437. | |
(2) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. | |
(3) | Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements.
20 | JUNE 30, 2015
Table of Contents
Statement of Operations
Perkins Value Plus | ||||
For the year ended June 30, 2015 | Income Fund | |||
Investment Income: | ||||
Interest | $ | 713,449 | ||
Dividends | 814,866 | |||
Dividends from affiliates | 641 | |||
Other income | 11,558 | |||
Foreign tax withheld | (14,398) | |||
Total Investment Income | 1,526,116 | |||
Expenses: | ||||
Advisory fees | 328,176 | |||
12b-1 Distribution and shareholder servicing fees: | ||||
Class A Shares | 16,498 | |||
Class C Shares | 68,802 | |||
Class S Shares | 6,069 | |||
Transfer agent administrative fees and expenses: | ||||
Class D Shares | 35,328 | |||
Class S Shares | 6,069 | |||
Class T Shares | 11,224 | |||
Transfer agent networking and omnibus fees: | ||||
Class A Shares | 1,710 | |||
Class C Shares | 1,557 | |||
Class I Shares | 2,390 | |||
Other transfer agent fees and expenses: | ||||
Class A Shares | 774 | |||
Class C Shares | 1,044 | |||
Class D Shares | 7,796 | |||
Class I Shares | 292 | |||
Class T Shares | 159 | |||
Shareholder reports expense | 21,628 | |||
Registration fees | 165,347 | |||
Custodian fees | 10,371 | |||
Professional fees | 53,282 | |||
Non-interested Trustees’ fees and expenses | 1,174 | |||
Fund administration fees | 4,937 | |||
Accounting systems fee expense | 49,298 | |||
Other expenses | 1,904 | |||
Total Expenses | 795,829 | |||
Less: Excess Expense Reimbursement | (263,660) | |||
Net Expenses | 532,169 | |||
Net Investment Income/(Loss) | 993,947 | |||
Net Realized Gain/(Loss) on Investments: | ||||
Investments and foreign currency transactions | 2,867,607 | |||
Written options contracts | 34,201 | |||
Total Net Realized Gain/(Loss) on Investments | 2,901,808 | |||
Change in Unrealized Net Appreciation/Depreciation: | ||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (2,959,477) | |||
Written options contracts | 3,894 | |||
Total Change in Unrealized Net Appreciation/Depreciation | (2,955,583) | |||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 940,172 |
See Notes to Financial Statements.
Janus Investment Fund | 21
Table of Contents
Statements of Changes in Net Assets
Perkins Value Plus | ||||||||
Income Fund | ||||||||
For each year ended June 30 | 2015 | 2014 | ||||||
Operations: | ||||||||
Net investment income/(loss) | $ | 993,947 | $ | 1,222,415 | ||||
Net realized gain/(loss) on investments | 2,901,808 | 3,871,812 | ||||||
Change in unrealized net appreciation/depreciation | (2,955,583) | 2,787,822 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 940,172 | 7,882,049 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income | ||||||||
Class A Shares | (161,953) | (158,389) | ||||||
Class C Shares | (118,210) | (107,878) | ||||||
Class D Shares | (760,888) | (732,744) | ||||||
Class I Shares | (126,968) | (279,044) | ||||||
Class S Shares | (52,103) | (114,609) | ||||||
Class T Shares | (108,167) | (178,114) | ||||||
Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | (531,013) | (333,609) | ||||||
Class C Shares | (551,851) | (319,098) | ||||||
Class D Shares | (2,296,570) | (1,386,346) | ||||||
Class I Shares | (312,655) | (567,430) | ||||||
Class S Shares | (163,955) | (245,920) | ||||||
Class T Shares | (344,279) | (332,511) | ||||||
Net Decrease from Dividends and Distributions to Shareholders | (5,528,612) | (4,755,692) | ||||||
Capital Share Transactions: | ||||||||
Shares Sold | ||||||||
Class A Shares | 217,355 | 366,960 | ||||||
Class C Shares | 701,707 | 676,381 | ||||||
Class D Shares | 5,690,369 | 10,196,885 | ||||||
Class I Shares | 610,018 | 2,614,911 | ||||||
Class S Shares | 1,274 | 112 | ||||||
Class T Shares | 1,751,708 | 3,234,721 | ||||||
Reinvested Dividends and Distributions | ||||||||
Class A Shares | 677,871 | 480,503 | ||||||
Class C Shares | 662,920 | 419,392 | ||||||
Class D Shares | 2,878,829 | 2,009,635 | ||||||
Class I Shares | 429,950 | 836,110 | ||||||
Class S Shares | 216,058 | 360,529 | ||||||
Class T Shares | 450,023 | 509,392 | ||||||
Shares Repurchased | ||||||||
Class A Shares | (745,221) | (758,902) | ||||||
Class C Shares | (280,499) | (361,448) | ||||||
Class D Shares | (10,017,723) | (5,469,241) | ||||||
Class I Shares | (7,478,830) | (2,926,425) | ||||||
Class S Shares | (3,000,000) | – | ||||||
Class T Shares | (7,153,025) | (900,258) | ||||||
Net Increase/(Decrease) from Capital Share Transactions | (14,387,216) | 11,289,257 | ||||||
Net Increase/(Decrease) in Net Assets | (18,975,656) | 14,415,614 | ||||||
Net Assets: | ||||||||
Beginning of period | 71,078,049 | 56,662,435 | ||||||
End of period | $ | 52,102,393 | $ | 71,078,049 | ||||
Undistributed Net Investment Income/(Loss) | $ | (4,252) | $ | (5,054) |
See Notes to Financial Statements.
22 | JUNE 30, 2015
Table of Contents
Financial Highlights
Class A Shares
Perkins Value Plus | ||||||||||||||||||||||
Income Fund | ||||||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $12.26 | $11.68 | $10.86 | $11.15 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.22(2) | 0.23(2) | 0.30 | 0.31 | 0.29 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.05 | 1.29 | 1.07 | 0.10 | 1.14 | |||||||||||||||||
Total from Investment Operations | 0.27 | 1.52 | 1.37 | 0.41 | 1.43 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.29) | (0.30) | (0.29) | (0.33) | (0.24) | |||||||||||||||||
Distributions (from capital gains) | (0.98) | (0.64) | (0.26) | (0.37) | (0.04) | |||||||||||||||||
Total Dividends and Distributions | (1.27) | (0.94) | (0.55) | (0.70) | (0.28) | |||||||||||||||||
Net Asset Value, End of Period | $11.26 | $12.26 | $11.68 | $10.86 | $11.15 | |||||||||||||||||
Total Return* | 2.25% | 13.61% | 12.82% | 3.97% | 14.49% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $6,213 | $6,603 | $6,200 | $5,057 | $4,861 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $6,599 | $6,341 | $5,545 | $4,848 | $3,951 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses** | 1.43% | 1.35% | 1.36% | 1.50% | 1.86% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.97% | 1.01% | 1.01% | 1.02% | 0.94% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)** | 1.84% | 1.94% | 2.39% | 2.83% | 3.05% | |||||||||||||||||
Portfolio Turnover Rate | 89% | 95% | 97% | 100% | 85% |
Class C Shares
Perkins Value Plus | ||||||||||||||||||||||
Income Fund | ||||||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $12.29 | $11.71 | $10.89 | $11.15 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.13(2) | 0.15(2) | 0.21 | 0.27 | 0.22 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.04 | 1.28 | 1.08 | 0.09 | 1.14 | |||||||||||||||||
Total from Investment Operations | 0.17 | 1.43 | 1.29 | 0.36 | 1.36 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.20) | (0.21) | (0.21) | (0.25) | (0.17) | |||||||||||||||||
Distributions (from capital gains) | (0.98) | (0.64) | (0.26) | (0.37) | (0.04) | |||||||||||||||||
Total Dividends and Distributions | (1.18) | (0.85) | (0.47) | (0.62) | (0.21) | |||||||||||||||||
Net Asset Value, End of Period | $11.28 | $12.29 | $11.71 | $10.89 | $11.15 | |||||||||||||||||
Total Return* | 1.41% | 12.78% | 12.03% | 3.55% | 13.74% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $7,029 | $6,519 | $5,485 | $4,815 | $4,128 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $6,880 | $6,035 | $5,223 | $4,453 | $3,701 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses** | 2.18% | 2.04% | 2.13% | 1.87% | 2.62% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.72% | 1.72% | 1.76% | 1.38% | 1.69% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)** | 1.09% | 1.23% | 1.64% | 2.48% | 2.27% | |||||||||||||||||
Portfolio Turnover Rate | 89% | 95% | 97% | 100% | 85% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from July 30, 2010 (inception date) through June 30, 2011. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Financial Statements.
Janus Investment Fund | 23
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Financial Highlights (continued)
Class D Shares
Perkins Value Plus | ||||||||||||||||||||||
Income Fund | ||||||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $12.26 | $11.69 | $10.86 | $11.15 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.23(2) | 0.25(2) | 0.31 | 0.32 | 0.29 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.06 | 1.28 | 1.08 | 0.10 | 1.16 | |||||||||||||||||
Total from Investment Operations | 0.29 | 1.53 | 1.39 | 0.42 | 1.45 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.31) | (0.32) | (0.30) | (0.34) | (0.26) | |||||||||||||||||
Distributions (from capital gains) | (0.98) | (0.64) | (0.26) | (0.37) | (0.04) | |||||||||||||||||
Total Dividends and Distributions | (1.29) | (0.96) | (0.56) | (0.71) | (0.30) | |||||||||||||||||
Net Asset Value, End of Period | $11.26 | $12.26 | $11.69 | $10.86 | $11.15 | |||||||||||||||||
Total Return* | 2.39% | 13.68% | 13.02% | 4.08% | 14.62% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $29,170 | $33,071 | $24,811 | $19,581 | $12,627 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $29,440 | $27,575 | $22,457 | $16,050 | $7,656 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses** | 1.33% | 1.15% | 1.24% | 1.41% | 1.73% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.83% | 0.85% | 0.91% | 0.91% | 0.79% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)** | 1.97% | 2.10% | 2.50% | 2.97% | 3.33% | |||||||||||||||||
Portfolio Turnover Rate | 89% | 95% | 97% | 100% | 85% |
Class I Shares
Perkins Value Plus | ||||||||||||||||||||||
Income Fund | ||||||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $12.28 | $11.70 | $10.87 | $11.15 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.24(2) | 0.27(2) | 0.33 | 0.33 | 0.30 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.05 | 1.28 | 1.07 | 0.11 | 1.15 | |||||||||||||||||
Total from Investment Operations | 0.29 | 1.55 | 1.40 | 0.44 | 1.45 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.32) | (0.33) | (0.31) | (0.35) | (0.26) | |||||||||||||||||
Distributions (from capital gains) | (0.98) | (0.64) | (0.26) | (0.37) | (0.04) | |||||||||||||||||
Total Dividends and Distributions | (1.30) | (0.97) | (0.57) | (0.72) | (0.30) | |||||||||||||||||
Net Asset Value, End of Period | $11.27 | $12.28 | $11.70 | $10.87 | $11.15 | |||||||||||||||||
Total Return* | 2.39% | 13.92% | 13.16% | 4.25% | 14.66% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $3,965 | $10,794 | $9,903 | $9,227 | $7,860 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $4,859 | $9,694 | $9,764 | $8,365 | $6,004 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses** | 1.22% | 1.02% | 1.10% | 1.25% | 1.61% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.74% | 0.71% | 0.76% | 0.77% | 0.77% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)** | 2.00% | 2.23% | 2.63% | 3.09% | 3.27% | |||||||||||||||||
Portfolio Turnover Rate | 89% | 95% | 97% | 100% | 85% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from July 30, 2010 (inception date) through June 30, 2011. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Financial Statements.
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Class S Shares
Perkins Value Plus | ||||||||||||||||||||||
Income Fund | ||||||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $12.26 | $11.69 | $10.86 | $11.15 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.19(2) | 0.22(2) | 0.28 | 0.29 | 0.27 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.05 | 1.28 | 1.08 | 0.09 | 1.14 | |||||||||||||||||
Total from Investment Operations | 0.24 | 1.50 | 1.36 | 0.38 | 1.41 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.26) | (0.29) | (0.27) | (0.30) | (0.22) | |||||||||||||||||
Distributions (from capital gains) | (0.98) | (0.64) | (0.26) | (0.37) | (0.04) | |||||||||||||||||
Total Dividends and Distributions | (1.24) | (0.93) | (0.53) | (0.67) | (0.26) | |||||||||||||||||
Net Asset Value, End of Period | $11.26 | $12.26 | $11.69 | $10.86 | $11.15 | |||||||||||||||||
Total Return* | 2.00% | 13.42% | 12.79% | 3.74% | 14.24% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $2,063 | $5,054 | $4,453 | $3,950 | $3,808 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $2,428 | $4,725 | $4,258 | $3,784 | $3,596 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses** | 1.64% | 1.50% | 1.59% | 1.73% | 2.12% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 1.18% | 1.09% | 1.15% | 1.21% | 1.20% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)** | 1.57% | 1.87% | 2.25% | 2.64% | 2.75% | |||||||||||||||||
Portfolio Turnover Rate | 89% | 95% | 97% | 100% | 85% |
Class T Shares
Perkins Value Plus | ||||||||||||||||||||||
Income Fund | ||||||||||||||||||||||
For a share outstanding during each year or period ended June 30 | 2015 | 2014 | 2013 | 2012 | 2011(1) | |||||||||||||||||
Net Asset Value, Beginning of Period | $12.27 | $11.69 | $10.86 | $11.15 | $10.00 | |||||||||||||||||
Income/(Loss) from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | 0.22(2) | 0.25(2) | 0.31 | 0.32 | 0.29 | |||||||||||||||||
Net realized and unrealized gain/(loss) | 0.04 | 1.28 | 1.08 | 0.09 | 1.14 | |||||||||||||||||
Total from Investment Operations | 0.26 | 1.53 | 1.39 | 0.41 | 1.43 | |||||||||||||||||
Less Dividends and Distributions: | ||||||||||||||||||||||
Dividends (from net investment income) | (0.29) | (0.31) | (0.30) | (0.33) | (0.24) | |||||||||||||||||
Distributions (from capital gains) | (0.98) | (0.64) | (0.26) | (0.37) | (0.04) | |||||||||||||||||
Total Dividends and Distributions | (1.27) | (0.95) | (0.56) | (0.70) | (0.28) | |||||||||||||||||
Net Asset Value, End of Period | $11.26 | $12.27 | $11.69 | $10.86 | $11.15 | |||||||||||||||||
Total Return* | 2.18% | 13.75% | 13.01% | 3.97% | 14.49% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $3,662 | $9,037 | $5,810 | $4,919 | $5,030 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $4,490 | $6,739 | $5,470 | $4,702 | $4,002 | |||||||||||||||||
Ratios to Average Net Assets: | ||||||||||||||||||||||
Ratio of Gross Expenses** | 1.39% | 1.25% | 1.33% | 1.48% | 1.86% | |||||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)** | 0.93% | 0.87% | 0.92% | 0.97% | 0.94% | |||||||||||||||||
Ratio of Net Investment Income/(Loss)** | 1.82% | 2.08% | 2.48% | 2.87% | 3.08% | |||||||||||||||||
Portfolio Turnover Rate | 89% | 95% | 97% | 100% | 85% |
* | Total return not annualized for periods of less than one full year. | |
** | Annualized for periods of less than one full year. | |
(1) | Period from July 30, 2010 (inception date) through June 30, 2011. | |
(2) | Per share amounts are calculated based on average shares outstanding during the year. |
See Notes to Financial Statements.
Janus Investment Fund | 25
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Notes to Financial Statements
1. | Organization and Significant Accounting Policies |
Perkins Value Plus Income Fund (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-seven funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests in a combination of equity 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.
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 evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer,
26 | JUNE 30, 2015
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such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of June 30, 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 year. 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 | 27
Table of Contents
Notes to Financial Statements (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, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
Dividends of net investment income are generally declared and distributed monthly, and realized capital gains (if any) are distributed annually. The Fund may treat a portion of its payment to a redeeming shareholder, which represents the pro rata share of undistributed net investment income and net realized gains, as a distribution for federal income tax purposes (tax equalization).
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 year ended June 30, 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
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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 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.
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Notes to Financial Statements (continued)
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 year, 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 year ended June 30, 2015.
Fund | Sold | |||||
Perkins Value Plus Income Fund | $ | 3,391,967 | ||||
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. Certain options contracts are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Statement of Assets and Liabilities as “Variation margin receivable” or “Variation margin payable” (if applicable).
The Fund may use options contracts to hedge against changes in interest rates, the values of equities, or foreign currencies. The Fund generally invests in options to hedge against adverse movements in the value of portfolio holdings. The use of such instruments may involve certain additional risks as a result of unanticipated movements in the market. A lack of correlation between the value of an instrument underlying an option and the asset being hedged, or unexpected adverse price movements, could render the Fund’s hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. The Fund may be subject to counterparty risk, interest rate risk, liquidity risk, equity risk, commodity risk, and currency risk in the normal course of pursuing its investment objective through its investments in options contracts.
Options traded on an exchange are regulated and the terms of the options are standardized. Options traded OTC expose the Fund to counterparty risk in the event that the counterparty does not perform. This risk is mitigated by having a netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the counterparty.
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 year, the Fund wrote call options on various equity securities for the purpose of decreasing exposure to individual equity risk and/or generating income.
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During the year, the Fund wrote put options on various equity securities for the purpose of increasing exposure to individual equity risk and/or generating income.
The following table provides average ending monthly market value amounts on written call and put options during the year ended June 30, 2015.
Written Call | Written Put | |||||||||
Fund | Options | Options | ||||||||
Perkins Value Plus Income Fund | $ | 4,618 | $ | 18 | ||||||
Written option activity for the year ended June 30, 2015 is indicated in the tables below:
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Perkins Value Plus Income Fund | ||||||||
Options outstanding at June 30, 2014 | 102 | $ | 3,066 | |||||
Options written | 1,852 | 51,875 | ||||||
Options closed | (116) | (3,376) | ||||||
Options expired | (1,539) | (40,450) | ||||||
Options exercised | (224) | (8,678) | ||||||
Options outstanding at June 30, 2015 | 75 | $ | 2,437 | |||||
Number of | Premiums | |||||||
Put Options | Contracts | Received | ||||||
Perkins Value Plus Income Fund | ||||||||
Options outstanding at June 30, 2014 | – | $ | – | |||||
Options written | 35 | 2,051 | ||||||
Options closed | – | – | ||||||
Options expired | (35) | (2,051) | ||||||
Options exercised | – | – | ||||||
Options outstanding at June 30, 2015 | – | $ | – | |||||
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 June 30, 2015.
Fair Value of Derivative Instruments as of June 30, 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 | ||||||||
Perkins Value Plus Income Fund | ||||||||||||
Currency Contracts | Forward currency contracts | $ | 18,461 | Forward currency contracts | $ | 13,855 | ||||||
Equity Contracts | Options written, at value | 894 | ||||||||||
Total | $ | 18,461 | $ | 14,749 | ||||||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the year ended June 30, 2015.
The effect of Derivative Instruments on the Statement of Operations for the year ended June 30, 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 | |||||||||||||||||
Perkins Value Plus Income Fund | ||||||||||||||||||||
Currency Contracts | $ | 346,511 | $ | – | $ | 346,511 | ||||||||||||||
Equity Contracts | – | 34,201 | 34,201 | |||||||||||||||||
Total | $ | 346,511 | $ | 34,201 | $ | 380,712 | ||||||||||||||
Change in Unrealized Appreciation/Depreciation on Derivatives Recognized in Income | ||||||||||||||||||||
Investments, foreign | ||||||||||||||||||||
currency translations and | ||||||||||||||||||||
non-interested Trustees’ | ||||||||||||||||||||
Derivatives not accounted for as hedging instruments | deferred compensation | Written options contracts | Total | |||||||||||||||||
Perkins Value Plus Income Fund | ||||||||||||||||||||
Currency Contracts | $ | 34,774 | $ | – | $ | 34,774 | ||||||||||||||
Equity Contracts | – | 3,894 | 3,894 | |||||||||||||||||
Total | $ | 34,774 | $ | 3,894 | $ | 38,668 | ||||||||||||||
Please see the Fund’s Statement of Operations for the Fund’s “Net Realized and Unrealized Gain/(Loss) on Investments.”
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Notes to Financial Statements (continued)
3. | Other Investments and Strategies |
Additional Investment Risk
The Fund may be invested in lower-rated debt securities that have a higher risk of default or loss of value since these securities may be sensitive to economic changes, political changes or adverse developments specific to the issuer.
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient 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
32 | JUNE 30, 2015
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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 June 30, 2015.
• | Bank Loans – Bank loans are obligations of companies or other entities entered into in connection with recapitalizations, acquisitions, and refinancings. The Fund’s investments in bank loans are generally acquired as a participation interest in, or assignment of, loans originated by a lender or other financial institution. These investments may include institutionally-traded floating and fixed-rate debt securities. | |
• | Floating Rate Loans – Floating rate loans are debt securities that have floating interest rates, that adjust periodically, and are tied to a benchmark lending rate, such as the London Interbank Offered Rate (“LIBOR”). In other cases, the lending rate could be tied to the prime rate offered by one or more major U.S. banks or the rate paid on large certificates of deposit traded in the secondary markets. If the benchmark lending rate changes, the rate payable to lenders under the loan will change at the next scheduled adjustment date specified in the loan agreement. Floating rate loans are typically issued to companies (“borrowers”) in connection with recapitalizations, acquisitions, and refinancings. Floating rate loan investments are generally below investment grade. Senior floating rate loans are secured by specific collateral of a borrower and are senior in the borrower’s capital structure. The senior position in the borrower’s capital structure generally gives holders of senior loans a claim on certain of the borrower’s assets that is senior to subordinated debt and preferred and common stock in the case of a borrower’s default. Floating rate loan investments may involve foreign borrowers, and investments may be denominated in foreign currencies. Floating rate loans often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The Fund may invest in obligations of borrowers who are in bankruptcy proceedings. While the Fund generally expects to invest in fully funded term loans, certain of the loans in which the Fund may invest include revolving loans, bridge loans, and delayed draw term loans. |
Purchasers of floating rate loans may pay and/or receive certain fees. The Fund may receive fees such as covenant waiver fees or prepayment penalty fees. The Fund may pay fees such as facility fees. Such fees may affect the Fund’s return. |
• | Mezzanine Loans – Mezzanine loans are secured by the stock of the company that owns the assets. Mezzanine loans are a hybrid of debt and equity financing that is typically used to fund the expansion of existing companies. A mezzanine loan is composed of debt capital that gives the lender the right to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. Mezzanine loans typically are the most subordinated debt obligation in an issuer’s capital structure. |
Mortgage- and Asset-Backed Securities
Mortgage- and asset-backed securities represent interests in “pools” of commercial or residential mortgages or other assets, including consumer loans or receivables. The Fund may purchase fixed or variable rate commercial or residential 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 Mae and Freddie Mac securities 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
Janus Investment Fund | 33
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Notes to Financial Statements (continued)
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 guarantors or insurers will meet their obligations.
Mortgage- and asset-backed securities are also subject to extension risk, which is the risk that rising interest rates could cause mortgages or other obligations underlying these securities to be paid more slowly than expected, increasing the Fund’s sensitivity to interest rate changes and causing its price to decline.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following tables present gross amounts of recognized assets and liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see either the “Fair Value of Derivative Instruments as of June 30, 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
Counterparty | Gross Amounts of Recognized Assets | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
Credit Suisse International | $ | 10,416 | $ | (10,416) | $ | – | $ | – | ||||||||||
HSBC Securities (USA), Inc. | 8,045 | – | – | 8,045 | ||||||||||||||
Total | $ | 18,461 | $ | (10,416) | $ | – | $ | 8,045 | ||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities
Counterparty | Gross Amounts of Recognized Liabilities | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | ||||||||||||||
Credit Suisse International | $ | 13,855 | $ | (10,416) | $ | – | $ | 3,439 | ||||||||||
(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.
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Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Restricted Security Transactions
Restricted securities held by the Fund may not be sold except in exempt transactions or in a public offering registered under the Securities Act of 1933, as amended. The risk of investing in such securities is generally greater than the risk of investing in the securities of widely held, publicly traded companies. Lack of a secondary market and resale restrictions may result in the inability of the Fund to sell a security at a fair price and may substantially delay the sale of the security. In addition, these securities may exhibit greater price volatility than securities for which secondary markets exist.
Sovereign Debt
The Fund may invest in U.S. and foreign government debt securities (“sovereign debt”). Investments in U.S. sovereign debt are considered low risk. However, investments in non-U.S. sovereign debt can involve a high degree of risk, including the risk that the governmental entity that controls the repayment of sovereign debt may not be willing or able to repay the principal and/or to pay the interest on its sovereign debt in a timely manner. A sovereign debtor’s willingness or ability to satisfy its debt obligation may be affected by various factors, including its cash flow situation, the extent of its foreign currency reserves, the availability of foreign exchange when a payment is due, the relative size of its debt position in relation to its economy as a whole, the sovereign debtor’s policy toward international lenders, and local political constraints to which the governmental entity may be subject. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies, and other entities. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance, or repay principal or interest when due may result in the cancellation of third party commitments to lend funds to the sovereign debtor, which may further impair such debtor’s ability or willingness to timely service its debts. The Fund may be requested to participate in the rescheduling of such sovereign debt and to extend further loans to governmental entities, which may adversely affect the Fund’s holdings. In the event of default, there may be limited or no legal remedies for collecting sovereign debt and there may be no bankruptcy proceedings through which the Fund may collect all or part of the sovereign debt that a governmental entity has not repaid.
When-Issued and Delayed Delivery Securities
The Fund may purchase or sell securities on a when-issued or delayed delivery basis. When-issued and delayed delivery securities in which the Fund may invest include U.S. Treasury Securities, municipal bonds, bank loans, and other similar instruments. The price of the underlying securities and date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Losses may arise due to changes in the market value of the securities or from the inability of counterparties to meet the terms of the contract. In connection with such purchases, the Fund may hold liquid assets as collateral with the Fund’s custodian sufficient to cover the purchase price.
4. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily | ||||||||||
Net Assets | Contractual Investment | |||||||||
Fund | of the Fund | Advisory Fee (%) | ||||||||
Perkins Value Plus Income Fund | All Asset Levels | 0.60 | ||||||||
Perkins Investment Management LLC (“Perkins”) serves as subadviser to the Fund. Perkins (together with its predecessors), has been in the investment management business since 1984 and provides day-to-day management of the equity portion of the Fund’s portfolio operations subject to the general oversight of Janus Capital. Janus Capital is responsible for the day-to-day management of the fixed income portion of the Fund’s investment portfolio. Janus Capital owns 100% of Perkins.
Janus Capital pays Perkins a subadvisory fee equal to 50% of the investment advisory fee payable by the equity portion of the Fund to Janus Capital (calculated after any applicable performance fee adjustment, fee waivers, and expense reimbursements). The subadvisory fee paid by Janus Capital to Perkins adjusts up or down based on the Fund’s performance relative to the Fund’s benchmark index over the performance measurement period.
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Notes to Financial Statements (continued)
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the transfer agency agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate shown below. Janus Capital has agreed to continue the waiver until at least November 1, 2015.
Expense | ||||||
Fund | Limit (%) | |||||
Perkins Value Plus Income Fund | 0.68 | |||||
If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the transfer agency agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to 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
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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 $580,523 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the year ended June 30, 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 June 30, 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 year ended June 30, 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 $279,000 were paid by the Trust to a Trustee under the Deferred Plan during the year ended June 30, 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 product compliant with Rule 2a-7 under the 1940 Act. There are no restrictions on the Fund’s ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Fund to Janus Cash Liquidity Fund LLC. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the year ended June 30, 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 year ended June 30, 2015,
Janus Investment Fund | 37
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Notes to Financial Statements (continued)
Janus Distributors retained the following upfront sales charges:
Upfront | ||||||
Fund (Class A Shares) | Sales Charge | |||||
Perkins Value Plus Income Fund | $ | 1,385 | ||||
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 year ended June 30, 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 year ended June 30, 2015, redeeming shareholders of Class C Shares paid the following CDSCs:
Fund (Class C Shares) | CDSC | |||||
Perkins Value Plus Income Fund | $ | 31 | ||||
As of June 30, 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 Value Plus Income Fund - Class A Shares | 84 | % | 10 | % | ||||||
Perkins Value Plus Income Fund - Class C Shares | 72 | 10 | ||||||||
Perkins Value Plus Income Fund - Class D Shares | - | - | ||||||||
Perkins Value Plus Income Fund - Class I Shares | - | - | ||||||||
Perkins Value Plus Income Fund - Class S Shares | 100 | 4 | ||||||||
Perkins Value Plus Income Fund - Class T Shares | - | - | ||||||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
5. | Federal Income Tax |
The tax components of capital shown in the table below represent: (1) distribution requirements the Fund must satisfy under the income tax regulations; (2) losses or deductions the Fund may be able to offset against income and gains realized in future years; and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Other book to tax differences primarily consist of deferred compensation, derivatives, tax equalization, and foreign currency contract adjustments. 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 Fund has elected to defer post-October losses and qualified late-year losses as noted in the table below. These losses will be deferred for tax purposes and recognized during the next fiscal year.
Undistributed | Undistributed | Loss Deferrals | Other Book | Net Tax | |||||||||||||||||||||||||||
Ordinary | Long-Term | Accumulated | Late-Year | Post-October | to Tax | Appreciation/ | |||||||||||||||||||||||||
Fund | Income | Gains | Capital Losses | Ordinary Loss | Capital Loss | Differences | (Depreciation) | ||||||||||||||||||||||||
Perkins Value Plus Income Fund | $ | (3,212) | $ | 625,922 | $ | – | $ | – | $ | (68,700) | $ | 71 | $ | 3,580,651 | |||||||||||||||||
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The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of June 30, 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.
Federal Tax | Unrealized | Unrealized | ||||||||||||
Fund | Cost | Appreciation | (Depreciation) | |||||||||||
Perkins Value Plus Income Fund | $ | 47,892,185 | $ | 4,132,749 | $ | (552,098) | ||||||||
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. Certain permanent differences such as tax returns of capital and net investment losses noted below have been reclassified to capital.
For the year ended June 30, 2015
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Perkins Value Plus Income Fund | $ | 1,913,887 | $ | 3,614,725 | $ | – | $ | – | ||||||||||||||
For the year ended June 30, 2014
Distributions | ||||||||||||||||||||||
From Ordinary | From Long-Term | Tax Return of | Net Investment | |||||||||||||||||||
Fund | Income | Capital Gains | Capital | Loss | ||||||||||||||||||
Perkins Value Plus Income Fund | $ | 2,265,258 | $ | 2,490,434 | $ | – | $ | – | ||||||||||||||
Permanent book to tax basis differences may result in reclassifications between the components of net assets. These differences have no impact on the results of operations or net assets. The following reclassifications have been made to the Fund:
Increase/(Decrease) | Increase/(Decrease) to Undistributed Net | Increase/(Decrease) to Undistributed Net | ||||||||||||
Fund | to Capital | Investment Income/Loss | Realized Gain/Loss | |||||||||||
Perkins Value Plus Income Fund | $ | 120,450 | $ | 335,144 | $ | (455,594) | ||||||||
Capital has been adjusted by $120,450, all of which is long-term capital gain, for distributions in connection with Fund share redemptions (tax equalization).
6. | Capital Share Transactions |
Perkins Value Plus | ||||||||||
Income Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class A Shares: | ||||||||||
Shares sold | 18,244 | 30,571 | ||||||||
Reinvested dividends and distributions | 58,947 | 41,380 | ||||||||
Shares repurchased | (63,770) | (64,110) | ||||||||
Net Increase/(Decrease) in Fund Shares | 13,421 | 7,841 | ||||||||
Shares Outstanding, Beginning of Period | 538,506 | 530,665 | ||||||||
Shares Outstanding, End of Period | 551,927 | 538,506 |
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Notes to Financial Statements (continued)
Perkins Value Plus | ||||||||||
Income Fund | ||||||||||
For each year ended June 30 | 2015 | 2014 | ||||||||
Transactions in Fund Shares – Class C Shares: | ||||||||||
Shares sold | 58,864 | 56,341 | ||||||||
Reinvested dividends and distributions | 57,636 | 36,146 | ||||||||
Shares repurchased | (24,043) | (30,356) | ||||||||
Net Increase/(Decrease) in Fund Shares | 92,457 | 62,131 | ||||||||
Shares Outstanding, Beginning of Period | 530,650 | 468,519 | ||||||||
Shares Outstanding, End of Period | 623,107 | 530,650 | ||||||||
Transactions in Fund Shares – Class D Shares: | ||||||||||
Shares sold | 483,475 | 859,867 | ||||||||
Reinvested dividends and distributions | 250,209 | 172,745 | ||||||||
Shares repurchased | (839,441) | (459,110) | ||||||||
Net Increase/(Decrease) in Fund Shares | (105,757) | 573,502 | ||||||||
Shares Outstanding, Beginning of Period | 2,696,382 | 2,122,880 | ||||||||
Shares Outstanding, End of Period | 2,590,625 | 2,696,382 | ||||||||
Transactions in Fund Shares – Class I Shares: | ||||||||||
Shares sold | 51,889 | 214,485 | ||||||||
Reinvested dividends and distributions | 37,245 | 71,868 | ||||||||
Shares repurchased | (616,535) | (253,647) | ||||||||
Net Increase/(Decrease) in Fund Shares | (527,401) | 32,706 | ||||||||
Shares Outstanding, Beginning of Period | 879,279 | 846,573 | ||||||||
Shares Outstanding, End of Period | 351,878 | 879,279 | ||||||||
Transactions in Fund Shares – Class S Shares: | ||||||||||
Shares sold | 105 | 9 | ||||||||
Reinvested dividends and distributions | 18,757 | 31,050 | ||||||||
Shares repurchased | (247,934) | – | ||||||||
Net Increase/(Decrease) in Fund Shares | (229,072) | 31,059 | ||||||||
Shares Outstanding, Beginning of Period | 412,182 | 381,123 | ||||||||
Shares Outstanding, End of Period | 183,110 | 412,182 | ||||||||
Transactions in Fund Shares – Class T Shares: | ||||||||||
Shares sold | 148,684 | 271,504 | ||||||||
Reinvested dividends and distributions | 39,064 | 43,779 | ||||||||
Shares repurchased | (599,295) | (75,650) | ||||||||
Net Increase/(Decrease) in Fund Shares | (411,547) | 239,633 | ||||||||
Shares Outstanding, Beginning of Period | 736,622 | 496,989 | ||||||||
Shares Outstanding, End of Period | 325,075 | 736,622 |
7. | Purchases and Sales of Investment Securities |
For the year ended June 30, 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 Value Plus Income Fund | $ | 27,599,614 | $ | 40,690,178 | $ | 20,817,002 | $ | 24,942,607 | ||||||
8. | Subsequent Event |
Management has evaluated whether any events or transactions occurred subsequent to June 30, 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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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Janus Investment Fund and Shareholders
of Perkins Value Plus Income Fund:
of Perkins Value Plus Income Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Perkins Value Plus Income Fund (one of the funds constituting Janus Investment Fund, hereafter referred to as the “Fund”) at June 30, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2015 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
Denver, Colorado
August 13, 2015
Janus Investment Fund | 41
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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 |
Janus Investment Fund | 43
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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 June 30, 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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Designation Requirements (unaudited)
For federal income tax purposes, the Fund designated the following for the year ended June 30, 2015:
Capital Gain Distributions
Fund | ||||||||||
Perkins Value Plus Income Fund | $ | 3,735,175 | ||||||||
Dividends Received Deduction Percentage
Fund | ||||||||||
Perkins Value Plus Income Fund | 100 | % | ||||||||
Qualified Dividend Income Percentage
Fund | ||||||||||
Perkins Value Plus Income Fund | 53 | % | ||||||||
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Trustees and Officers (unaudited)
The Fund’s Statement of Additional Information includes additional information about the Trustees and officers and is available, without charge, by calling 1-877-335-2687.
The following are the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years (principal occupations for certain Trustees may include periods over five years).
Each Trustee has served in that capacity since he or she was originally elected or appointed. The Trustees do not serve a specified term of office. Each Trustee will hold office until the termination of the Trust or his or her earlier death, resignation, retirement, incapacity, or removal. Under the Fund’s Governance Procedures and Guidelines, the policy is for Trustees to retire no later than the end of the calendar year in which the Trustee turns 75. The Trustees review the Fund’s Governance Procedures and Guidelines from time to time and may make changes they deem appropriate. The Fund’s Nominating and Governance Committee will consider nominees for the position of Trustee recommended by shareholders. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trust’s Secretary. Each Trustee is currently a Trustee of one other registered investment company advised by Janus Capital: Janus Aspen Series. Collectively, these two registered investment companies consist of 61 series or funds.
The Trust’s officers are elected annually by the Trustees for a one-year term. Certain officers also serve as officers of Janus Aspen Series. Certain officers of the Fund may also be officers and/or directors of Janus Capital. Fund officers receive no compensation from the Fund, except for the Fund’s Chief Compliance Officer, as authorized by the Trustees.
TRUSTEES
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Independent Trustees | ||||||||||
William F. McCalpin 151 Detroit Street Denver, CO 80206 DOB: 1957 | Chairman Trustee | 1/08-Present 6/02-Present | Chief Executive Officer, Imprint Capital (impact investment firm) (since 2013), and Managing Director, Holos Consulting LLC (provides consulting services to foundations and other nonprofit organizations). Formerly, Executive Vice President and Chief Operating Officer of The Rockefeller Brothers Fund (a private family foundation) (1998-2006). | 61 | Chairman of the Board and Director of The Investment Fund for Foundations Investment Program (TIP) (consisting of 2 funds), and Director of the F.B. Heron Foundation (a private grantmaking foundation). |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Alan A. Brown 151 Detroit Street Denver, CO 80206 DOB: 1962 | Trustee | 1/13-Present | Managing Director, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since 2012). Formerly, Executive Vice President and Co-Head, Global Private Client Group (2007-2010), Executive Vice President, Mutual Funds (2005-2007), and Chief Marketing Officer (2001-2005) of Nuveen Investments, Inc. (asset management). | 61 | Director of MotiveQuest LLC (strategic social market research company) (since 2003), and Director of WTTW (PBS affiliate) (since 2003). Formerly, Director of Nuveen Global Investors LLC (2007-2011); Director of Communities in Schools (2004-2010); and Director of Mutual Fund Education Alliance (until 2010). | |||||
William D. Cvengros 151 Detroit Street Denver, CO 80206 DOB: 1948 | Trustee | 1/11-Present | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). | 61 | Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. (formerly a network of advisors to 401(k) plans) (2005-2013); Director of Prospect Acquisition Corp. (a special purpose acquisition corporation) (2007-2009); Director of RemedyTemp, Inc. (temporary help services company) (1996-2006); and Trustee of PIMCO Funds Multi-Manager Series (1990-2000) and Pacific Life Variable Life & Annuity Trusts (1987-1994). |
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TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
James T. Rothe 151 Detroit Street Denver, CO 80206 DOB: 1943 | Trustee | 1/97-Present | Co-founder and Managing Director of Roaring Fork Capital SBIC, L.P. (SBA SBIC fund focusing on private investment in public equity firms), and Professor Emeritus of Business of the University of Colorado, Colorado Springs, CO (since 2004). Formerly, Professor of Business of the University of Colorado (2002-2004), and Distinguished Visiting Professor of Business (2001-2002) of Thunderbird (American Graduate School of International Management), Glendale, AZ. | 61 | Formerly, Director of Red Robin Gourmet Burgers, Inc. (RRGB) (2004- 2014). | |||||
William D. Stewart 151 Detroit Street Denver, CO 80206 DOB: 1944 | Trustee | 6/84-Present | Retired. Formerly, Corporate Vice President and General Manager of MKS Instruments - HPS Products, Boulder, CO (a manufacturer of vacuum fittings and valves) and PMFC Division, Andover, MA (manufacturing pressure measurement and flow products) (1976-2012). | 61 | None |
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Trustees and Officers (unaudited) (continued)
TRUSTEES (continued)
Other Directorships | ||||||||||
Principal Occupations | Number of Portfolios/Funds | Held by Trustee | ||||||||
Positions Held | Length of | During the Past Five | in Fund Complex | During the Past Five | ||||||
Name, Address, and Age | with the Trust | Time Served | Years | Overseen by Trustee | Years | |||||
Linda S. Wolf 151 Detroit Street Denver, CO 80206 DOB: 1947 | Trustee | 11/05-Present | Retired. Formerly, Chairman and Chief Executive Officer of Leo Burnett (Worldwide) (advertising agency) (2001-2005). | 61 | Director of Chicago Community Trust (Regional Community Foundation), Chicago Council on Global Affairs, InnerWorkings (U.S. provider of print procurement solutions to corporate clients), Lurie Children’s Hospital (Chicago, IL), Rehabilitation Institute of Chicago, Walmart, and Wrapports, LLC (digital communications company). Formerly, Director of Chicago Convention & Tourism Bureau (until 2014) and The Field Museum of Natural History (Chicago, IL) (until 2014). | |||||
Trustee Consultant | ||||||||||
Raudline Etienne* 151 Detroit Street Denver, CO 80206 DOB: 1965 | Consultant | 6/14-Present | Senior Vice President, Albright Stonebridge Group LLC (global strategy firm) (since 2011). Formerly, Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). | N/A | Director of Brightwood Capital Advisors, LLC (since 2014). |
* Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. Shareholders of the Janus Funds are expected to be asked to elect Ms. Etienne as a Trustee at a future shareholder meeting.
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OFFICERS
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
Gibson Smith 151 Detroit Street Denver, CO 80206 DOB: 1968 | Executive Vice President and Co-Portfolio Manager Perkins Value Plus Income Fund | 7/10-Present | Chief Investment Officer Fixed Income and Executive Vice President of Janus Capital; Director of Perkins Investment Management LLC; and Portfolio Manager for other Janus accounts. Formerly, Executive Vice President of Janus Distributors LLC and Janus Services LLC (2007-2013). | |||
Darrell Watters 151 Detroit Street Denver, CO 80206 DOB: 1963 | Executive Vice President and Co-Portfolio Manager Perkins Value Plus Income Fund | 7/10-Present | Vice President of Janus Capital and Portfolio Manager for other Janus accounts. | |||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Vice President and Assistant General Counsel of Janus Capital, Vice President and Assistant Secretary of Janus Distributors LLC, and Vice President of Janus Services LLC (since 2015). | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: 1952 | President and Chief Executive Officer | 7/14-Present | President of Janus Capital Group Inc. and Janus Capital Management LLC (since 2013); Executive Vice President and Director of Janus International Holding LLC (since 2011); Executive Vice President of Janus Distributors LLC (since 2011); Executive Vice President and Working Director of INTECH Investment Management LLC (since 2011); Executive Vice President and Director of Perkins Investment Management LLC (since 2011); and Executive Vice President and Director of Janus Management Holdings Corporation (since 2011). Formerly, Executive Vice President of Janus Services LLC (2011-2015), Janus Capital Group Inc. and Janus Capital Management LLC (2011-2013), and Chief Financial Officer of Janus Capital Group Inc., Janus Capital Management LLC, Janus Distributors LLC, Janus Management Holdings Corporation, and Janus Services LLC (2011-2013). | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; Vice President of INTECH Investment Management LLC and Perkins Investment Management LLC; and Director of The Janus Foundation. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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Trustees and Officers (unaudited) (continued)
OFFICERS (continued)
Principal Occupations During the | ||||||
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Past Five Years | |||
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Financial Officer Vice President, Treasurer, and Principal Accounting Officer | 3/05-Present 2/05-Present | Vice President of Janus Capital and Janus Services LLC. |
* Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period.
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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-0815-94127 | 125-02-93035 08-15 |
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Item 2 – | Code of Ethics |
As of the end of the period covered by this Form N-CSR, the Registrant has adopted a Code of Ethics (as defined in Item 2(b) of Form N-CSR), which is posted on the Registrant’s website: janus.com. Registrant intends to post any amendments to, or waivers from (as defined in Item 2 of Form N-CSR), such code on janus.com within five business days following the date of such amendment or waiver.
Item 3 – | Audit Committee Financial Expert |
Janus Investment Fund’s Board of Trustees has determined that the following members of Janus Investment Fund’s Audit Committee are “audit committee financial experts,” as defined in Item 3 to Form N-CSR: William D. Cvengros (Chairman) and William D. Stewart who are each “independent” under the standards set forth in Item 3 to Form N-CSR.
Item 4 – | Principal Accountant Fees and Services |
The following table shows the amount of fees that PricewaterhouseCoopers LLP (“Auditor”), Janus Investment Fund’s (the “Fund”) auditor, billed to the Fund during the Fund’s last two fiscal years. For the reporting periods, the Audit Committee approved in advance all audit services and non-audit services that Auditor provided to the Fund, except for those non-audit services that were subject to the pre-approval exception under Rule 2-01 of Regulation S-X (the “pre-approval exception”). The pre-approval exception for services provided directly to the Fund waives the pre-approval requirement for services other than audit, review or attest services if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid by the Fund to Auditor during the fiscal year in which the services are provided; (B) the Fund did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee’s attention, and the Committee(or its delegate) approves the services before the audit is completed.
Services that the Fund’s Auditor Billed to the Fund
Fiscal Year Ended | Audit Fees | Audit-Related | Tax Fees | All Other Fees | ||||||||||||
June 30 | Billed to Fund | Fees Billed to Fund | Billed to Fund | Billed to Fund | ||||||||||||
2015 | $ | 1,701,522 | $ | 0 | $ | 425,810 | $ | 261,047 | ||||||||
Percentage approved pursuant to pre-approval exception | 0 | % | 0 | % | 0 | % | 0 | % | ||||||||
2014 | $ | 914,081 | $ | 7,396 | $ | 203,207 | $ | 0 | ||||||||
Percentage approved pursuant to pre-approval exception | 0 | % | 0 | % | 0 | % | 0 | % |
The above “Audit Fees” were billed for amounts related to the audit of the Fund’s financial statements and services normally provided by the accountant in connection with statutory and regulatory filings. The above “Audit-Related Fees” were billed for amounts related to semi-annual financial statement disclosure review. The above “Tax Fees” were billed for amounts related to tax compliance, tax planning, tax advice, and corporate actions review.
Services that the Fund’s Auditor Billed to the Adviser
and Affiliated Fund Service Providers
and Affiliated Fund Service Providers
The following table shows the amount of fees billed by Auditor to Janus Capital Management LLC (the “Adviser”), and any entity controlling, controlled by or under common control with the Adviser (“Control Affiliate”) that provides ongoing services to the Fund (“Affiliated Fund Service Provider”), for engagements directly related to the Fund’s operations and financial reporting, during the Fund’s last two fiscal years.
The table also shows the percentage of fees, if any, subject to the pre-approval exception. The pre-approval exception for services provided to the Adviser and any Affiliated Fund Service Provider (other than audit, review or attest services) waives the pre-approval requirement if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid to Auditor by the Fund, the Adviser and Affiliated Fund Service Providers during the fiscal years in which the services are provided that would have to be pre-approved by the Audit Committee; (B) the Fund did not recognize the services as non-audit at the time of the engagement; and (C) the services are promptly brought to the Audit Committee’s attention, and the Committee (or its delegate) approves the services before the Fund’s audit is completed.
Audit-Related | All Other Fees | |||||||||||
Fees Billed to | Tax Fees Billed to | Billed to Adviser | ||||||||||
Adviser and | Adviser and | and Affiliated | ||||||||||
Fiscal Year Ended | Affiliated Fund | Affiliated Fund | Fund Service | |||||||||
June 30 | Service Providers | Service Providers | Providers | |||||||||
2015 | $ | 5,405 | $ | 3,315 | $ | 0 | ||||||
Percentage approved pursuant to pre-approval exception | 0 | % | 0 | % | 0 | % | ||||||
2014 | $ | 30,986 | $ | 0 | $ | 0 | ||||||
Percentage approved pursuant to pre-approval exception | 0 | % | 0 | % | 0 | % |
The above “Audit-Related Fees” were billed for amounts related to semi-annual financial statement disclosure review, and internal control examination.
Non-Audit Services
The following table shows the amount of fees that Auditor billed during the Fund’s last two fiscal years for non-audit services. The Audit Committee is required to pre-approve non-audit services that Auditor provides to the Adviser and any Affiliated Fund Service Provider, if the engagement relates directly to the Fund’s operations and financial reporting (except for those subject to the pre-approval exception described above). The Audit Committee requested and received information from Auditor about any non-audit services that Auditor rendered during the Fund’s last fiscal years to the Adviser and any Affiliated Fund Service Provider. The Committee considered this information in evaluating Auditor’s independence.
Total Non-Audit Fees | ||||||||||||||||
billed to Adviser and | ||||||||||||||||
Affiliated Fund Service | �� | Total Non-Audit | ||||||||||||||
Providers(engagements | Fees billed to | |||||||||||||||
related directly to the | Adviser and | |||||||||||||||
Total | operations and | Affiliated Fund | ||||||||||||||
Non-Audit Fees | financial reporting of | Service Providers | ||||||||||||||
Fiscal Year Ended | Billed to the Fund | the Fund) | (all other engagements) | Total of (A), (B) | ||||||||||||
June 30 | (A) | (B) | (C) | and (C)1 | ||||||||||||
2015 | $ | 177,791 | $ | 0 | $ | 30,896 | $ | 208,687 | ||||||||
2014 | $ | 0 | $ | 0 | $ | 0 | $ | 0 |
1. | The Audit Committee also considered amounts billed by Auditor to all other Control Affiliates in evaluating Auditor’s independence. |
Pre-Approval Policies
The Fund’s Audit Committee Charter requires the Fund’s Audit Committee to pre-approve any engagement of Auditor (i) to provide Audit or Non-Audit Services to the Fund or (ii) to provide non-audit services to Adviser or any Affiliated Fund Service Provider, if the engagement relates directly to the operations and financial reporting of the Fund, except for those non-audit services that were subject to the pre-approval exception under Rule 2-01 of Regulation S-X. The Chairman of the Audit Committee or, if the Chairman is unavailable, another member of the Audit Committee who is an independent Trustee, may grant the pre-approval. All such delegated pre- approvals must be presented to the Audit Committee no later than the next Audit Committee meeting.
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. |
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. |
Table of Contents
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 | |||
President and Chief Executive Officer of Janus Investment Fund (Principal Executive Officer) | ||||
Date: | August 28, 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 | |||
President and Chief Executive Officer of Janus Investment Fund (Principal Executive Officer) | ||||
Date: | August 28, 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: | August 28, 2015 |