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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-Lofton, 151 Detroit Street, Denver, Colorado 80206
(Name and address of agent for service)
(Name and address of agent for service)
Registrant’s telephone number, including area code: 303-333-3863
Date of fiscal year end: 10/31
Date of reporting period: 4/30/08
TABLE OF CONTENTS
Table of Contents
Item 1 — Reports to Shareholders
Table of Contents
2008 Semiannual Report
Janus Growth Funds
Janus Fund
Janus Enterprise Fund
Janus Orion Fund
Janus Research Fund
Janus Triton Fund
Janus Twenty Fund
Janus Venture Fund
Specialty Growth
Janus Global Life Sciences Fund
Janus Global Technology Fund
Look Inside. . .
• Portfolio management perspective
• Investment strategy behind your fund
• Fund performance, characteristics and holdings
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646janus.gif)
Table of Contents
Table of Contents
Janus Growth Funds
Co-Chief Investment Officers’ Letter to Shareholders | 1 | |
Useful Information About Your Fund Report | 5 | |
Management Commentaries and Schedules of Investments | ||
Janus Fund | 6 | |
Janus Enterprise Fund | 15 | |
Janus Orion Fund | 24 | |
Janus Research Fund | 33 | |
Janus Triton Fund | 42 | |
Janus Twenty Fund | 50 | |
Janus Venture Fund | 58 | |
Janus Global Life Sciences Fund | 68 | |
Janus Global Technology Fund | 76 | |
Statements of Assets and Liabilities | 84 | |
Statements of Operations | 86 | |
Statements of Changes in Net Assets | 88 | |
Financial Highlights | 92 | |
Notes to Schedules of Investments | 97 | |
Notes to Financial Statements | 101 | |
Additional Information | 114 | |
Explanations of Charts, Tables and Financial Statements | 117 |
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from www.janus.com. Read it carefully before you invest or send money.
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��
Co-Chief Investment Officers’ Letter to the Shareholders
![(JONATHAN COLEMAN PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646pcolemaj.jpg)
Jonathan Coleman
Co-Chief
Investment Officer
![(GIBSON SMITH PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646psmithgi.jpg)
Gibson Smith
Co-Chief
Investment Officer
Dear Shareholders,
Challenging economic conditions have been the dominant theme for the financial markets over the past several months. Despite recent volatility, our investment team has maintained a relentless focus on our fundamental, bottom-up research process and has continued to discover compelling investment opportunities for our shareholders.
Major Market Themes
Turmoil in the credit markets, uncertainty surrounding the near-term outlook for the U.S. economy and a weaker corporate profit picture made for a volatile and difficult market environment over the past several months. While sentiment toward the end of the period improved and U.S. equity markets finished well above their mid-March lows, stocks were broadly lower over the six months ended April 30, 2008. The Russell 1000® Index declined 9.54%, the Russell 2000® Index was down 12.92% and the Morgan Stanley Capital International (MSCI) All Country World IndexSM gave up 9.47% during the period. Fixed-income markets proved to be volatile over the period with the Lehman Brothers Aggregate Bond Index up 4.08% and the Lehman Brothers High-Yield Bond Index lost 0.74% over the period.
Additional write-offs related to the loose lending practices over the previous 36 months, slowing consumer spending and a softening labor market, accompanied by record commodity prices and rising inflation expectations, weighed on investor sentiment during the period. Stocks reached their lows in mid-March amid fears that credit conditions could suffer another setback given a deteriorating liquidity position at investment bank Bear Stearns. Uncertain market conditions resulted in interest rates hitting five-year lows with the 10-Year Treasury Note touching 3.33%. Prior to that, periodic liquidity injections by the Federal Reserve (Fed) failed to alleviate the stress in the funding and credit markets. Financial markets stabilized somewhat after the Fed aggressively lowered the Federal Funds rate, expanded the collateral it would accept, allowed for broker/dealers to borrow directly from the Fed and played an instrumental role in JP Morgan Chase’s purchase of near-defunct Bear Stearns. All of these moves were vitally important toward stabilizing the financial system while allowing for the recovery process to continue. By the end, the Fed had lowered its target interest rate from 4.50% to 2.00% during the period.
Following the March lows, the equity market’s rally at the end of the six-month period can be attributed to the moves by the Fed and, in part, to improving sentiment as investors began to look ahead to a possible economic recovery. Nevertheless, concerns about elevated inflationary pressures, soft consumer spending, the weak housing market and the lingering possibility of more write-downs continued to weigh on the market.
Performance Notables
For the one-year period ended April 30, 2008, 77% of Janus’ retail funds ranked within Lipper’s top two quartiles, based upon total returns. The results were even stronger over longer time periods as 87% of our retail funds achieved first- or second-quartile Lipper rankings over three years and 86% ranked in Lipper’s top two quartiles over five years. Furthermore, 78.3% of our retail funds had a 4- or 5-star overall Morningstar Ratingtm as of April 30, 2008, well ahead of the 32.5% of funds for which Morningstar awards 4- or 5-stars in each category. (See complete Lipper rankings on page 3 and complete Morningstar Ratingstm on page 4).
Investment Team Update
We continue to enhance the breadth of our global stock coverage and work tirelessly to generate solid investment insights in an attempt to deliver superior investment performance. Our hands-on research approach is critical to our stock selection process. As such, the Janus equity research team traveled over 2.9 million miles in 2007 investigating potential stock and bond picks worldwide. This year, we plan to embark on a multi-year strategy to locate certain investment personnel closer to the companies that they research as an important first step in building out our global footprint from a research standpoint.
While our objective is to develop a research edge and invest with conviction in our funds, we seek to do so in a disciplined and thoughtful way by clearly understanding and managing risk in our portfolios. Dan Scherman, Director of Risk and Trading, works continually with our investment management
Janus Growth Funds April 30, 2008 1
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Continued
team to ensure that portfolio risks are intentional and calculated. We believe this analysis is both timely and critical as we navigate today’s challenging markets.
Conclusion
As we look back over the past six months, we are relieved that signs of stabilization appeared in the financial markets as the period came to a close. However, we recognize that there are still significant challenges ahead. Increasing risk aversion has resulted in a significant contraction of credit availability for both consumers and corporations. The tightening of credit, along with declining real estate prices, rising energy prices and a climbing unemployment rate may all create significant economic headwinds in the near future. While unsettling, we believe this is a natural and necessary process of recovery from the excessive risk-taking and loose lending standards that developed over the previous several years in many areas of the credit markets. We feel that the environment will improve as the healing process progresses.
So, as we look ahead, we are paying very close attention to the outlook for the global economy, with a keen focus on slowing growth in the United States and the growth rates of the emerging economies around the globe. As these emerging economies become more prosperous, they may be able to move from economies based exclusively on exports fueling their growth to more balanced models emphasizing both exports and internal consumption of the goods they produce. Over a longer period of time, we believe this creates more stability in the global economy. We are also watching rising energy and commodity prices and their impact on inflationary expectations and the absolute level of interest rates. In addition to interest rates, we are focused on the outlook for the housing market and the implications of changes in home prices on the underlying health of the financial system, believing that the recapitalization of the banking and brokerage sectors is a vitally important element of the healing process.
While market volatility is undoubtedly challenging, it can also create an environment that can result in incredibly compelling investment opportunities. Our top priority is to remain committed to our process of in-depth fundamental research, which has been at the core of our investment process since Janus’ inception in 1969. With this singular focus we strive to deliver consistent long-term results for our shareholders.
Thank you for your continued investment in Janus funds.
Sincerely,
![(-s- JONATHAN COLEMAN)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646scolemaj.gif)
Jonathan Coleman
Co-Chief Investment Officer
![(-s- GIBSON SMITH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646ssmithgi.gif)
Gibson Smith
Co-Chief Investment Officer
2 Janus Growth Funds April 30, 2008
Table of Contents
Lipper Rankings (unaudited)
Lipper Rankings – Based on total returns as of 4/30/08 | ||||||||||||||||||||||||||
ONE YEAR | THREE YEAR | FIVE YEAR | TEN YEAR | SINCE INCEPTION | SINCE PM INCEPTION | |||||||||||||||||||||
PERCENTILE | RANK/ | PERCENTILE | RANK/ | PERCENTILE | RANK/ | PERCENTILE | RANK/ | PERCENTILE | RANK/ | PERCENTILE | RANK/ | |||||||||||||||
LIPPER CATEGORY | RANK (%) | TOTAL FUNDS | RANK (%) | TOTAL FUNDS | RANK (%) | TOTAL FUNDS | RANK (%) | TOTAL FUNDS | RANK (%) | TOTAL FUNDS | RANK (%) | TOTAL FUNDS | ||||||||||||||
Janus Investment Fund (Inception Date) | ||||||||||||||||||||||||||
Janus Fund (2/70) | Large-Cap Growth Funds | 58 | 429/748 | 26 | 162/634 | 39 | 203/528 | 43 | 107/250 | 11 | 2/18 | 32 | 246/776 | |||||||||||||
Janus Enterprise Fund(1)(9/92) | Mid-Cap Growth Funds | 9 | 50/604 | 6 | 27/503 | 6 | 21/414 | 34 | 60/179 | 26 | 12/46 | 3 | 13/623 | |||||||||||||
Janus Orion Fund (6/00) | Multi-Cap Growth Funds | 2 | 10/513 | 2 | 5/396 | 1 | 1/329 | N/A | N/A | 17 | 35/212 | 3 | 16/558 | |||||||||||||
Janus Research Fund(1) (5/93) | Large-Cap Growth Funds | 19 | 141/748 | 4 | 24/634 | 3 | 14/528 | 3 | 7/250 | 3 | 2/79 | 2 | 9/678 | |||||||||||||
Janus Triton Fund(1)(2/05) | Small-Cap Growth Funds | 8 | 42/598 | 5 | 24/481 | N/A | N/A | N/A | N/A | 2 | 6/471 | 3 | 15/542 | |||||||||||||
Janus Twenty Fund* (4/85) | Large-Cap Growth Funds | 1 | 1/748 | 1 | 1/634 | 1 | 1/528 | 2 | 4/250 | 3 | 1/36 | 1 | 1/807 | |||||||||||||
Janus Venture Fund* (4/85) | Small-Cap Growth Funds | 69 | 410/598 | 32 | 150/481 | 9 | 35/395 | 24 | 44/187 | 9 | 1/11 | 23 | 69/308 | |||||||||||||
Janus Global Life Sciences Fund (12/98) | Health/Biotechnology Funds | 4 | 7/195 | 17 | 25/153 | 13 | 18/141 | N/A | N/A | 13 | 6/47 | 4 | 7/195 | |||||||||||||
Janus Global Technology Fund (12/98) | Science & Technology Funds | 23 | 60/264 | 16 | 38/241 | 29 | 63/219 | N/A | N/A | 19 | 14/74 | 18 | 45/250 | |||||||||||||
Janus Balanced Fund(1) (9/92) | Mixed-Asset Target Allocation Moderate Funds | 2 | 7/451 | 1 | 3/349 | 24 | 55/232 | 6 | 7/136 | 4 | 1/29 | 1 | 3/349 | |||||||||||||
Janus Contrarian Fund (2/00) | Multi-Cap Core Funds | 12 | 98/863 | 1 | 1/680 | 1 | 1/498 | N/A | N/A | 5 | 12/294 | 5 | 12/294 | |||||||||||||
Janus Fundamental Equity Fund(1) (6/96) | Large-Cap Core Funds | 25 | 201/822 | 4 | 26/684 | 6 | 34/575 | 1 | 3/299 | 1 | 1/207 | 26 | 217/848 | |||||||||||||
Janus Growth and Income Fund(1) (5/91) | Large-Cap Core Funds | 30 | 245/822 | 21 | 140/684 | 29 | 163/575 | 8 | 22/299 | 6 | 4/74 | 21 | 173/848 | |||||||||||||
INTECH Risk-Managed Stock Fund (2/03) | Multi-Cap Core Funds | 63 | 540/863 | 64 | 433/680 | 31 | 150/498 | N/A | N/A | 35 | 172/497 | 35 | 172/497 | |||||||||||||
Janus Mid Cap Value Fund – Inv(1)(2) (8/98) | Mid-Cap Value Funds | 6 | 17/332 | 13 | 34/264 | 17 | 34/204 | N/A | N/A | 2 | 1/66 | 2 | 1/66 | |||||||||||||
Janus Small Cap Value Fund – Inv*(2) (10/87) | Small-Cap Core Funds | 11 | 84/796 | 30 | 191/638 | 44 | 214/493 | 14 | 25/190 | 12 | 15/130 | 12 | 15/130 | |||||||||||||
Janus Flexible Bond Fund(1) (7/87) | Intermediate Investment Grade Debt Funds | 11 | 57/559 | 9 | 39/473 | 15 | 59/403 | 36 | 70/194 | 14 | 3/22 | 11 | 60/563 | |||||||||||||
Janus High-Yield Fund(1) (12/95) | High Current Yield Funds | 59 | 270/458 | 49 | 185/383 | 71 | 235/333 | 22 | 35/163 | 5 | 4/97 | 46 | 161/349 | |||||||||||||
Janus Short-Term Bond Fund(1) (9/92) | Short Investment Grade Debt Funds | 28 | 72/262 | 28 | 58/211 | 22 | 35/160 | 33 | 28/84 | 32 | 8/24 | 31 | 79/262 | |||||||||||||
Janus Global Opportunities Fund(1) (6/01) | Global Funds | 73 | 320/443 | 95 | 330/349 | 65 | 173/267 | N/A | N/A | 29 | 60/207 | 29 | 60/207 | |||||||||||||
Janus Global Research Fund(1)(2/05) | Multi-Cap Growth Funds | 4 | 15/443 | 3 | 10/349 | N/A | N/A | N/A | N/A | 4 | 10/324 | 4 | 10/324 | |||||||||||||
Janus Overseas Fund*(1) (5/94) | International Funds | 1 | 7/1122 | 1 | 1/821 | 1 | 1/682 | 3 | 7/331 | 1 | 1/110 | 1 | 1/685 | |||||||||||||
Janus Worldwide Fund(1) (5/91) | Global Funds | 73 | 321/443 | 78 | 271/349 | 96 | 255/267 | 82 | 100/122 | 36 | 6/16 | 80 | 238/299 | |||||||||||||
Janus Smart Portfolio – Growth (12/05) | Mixed-Asset Target Allocation Growth Funds | 3 | 14/669 | N/A | N/A | N/A | N/A | N/A | N/A | 2 | 10/582 | 2 | 10/582 | |||||||||||||
Janus Smart Portfolio – Moderate (12/05) | Mixed-Asset Target Allocation Moderate Funds | 1 | 3/451 | N/A | N/A | N/A | N/A | N/A | N/A | 2 | 7/383 | 2 | 7/383 | |||||||||||||
Janus Smart Portfolio – Conservative (12/05) | Mixed-Asset Target Allocation Conservative Funds | 3 | 9/429 | N/A | N/A | N/A | N/A | N/A | N/A | 2 | 6/339 | 2 | 6/339 | |||||||||||||
(1) | The date of the Lipper ranking is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception. | |
(2) | Rating is for the Investor Share class only; other classes may have different performance characteristics. |
* | Closed to new investors. |
Past performance is no guarantee of future results. Call 1-800-525-3713 or visit janus.com for current month end performance.
If an expense waiver was in effect, it may have had a material effect on the total return or yield, and therefore the ranking for the period.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
Janus Growth Funds April 30, 2008 3
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Morningstar Ratingstm (unaudited)
Morningstar Ratingstm based on | ||||||||||||||||||||
total returns as of 4/30/08 | ||||||||||||||||||||
OVERALL RATING(1) | THREE-YEAR RATING | FIVE-YEAR RATING | TEN-YEAR RATING | |||||||||||||||||
CATEGORY | STARS | # OF FUNDS | STARS | # OF FUNDS | STARS | # OF FUNDS | STARS | # OF FUNDS | ||||||||||||
Janus Investment Fund | ||||||||||||||||||||
Janus Fund | Large Growth Funds | *** | 1458 | **** | 1458 | *** | 1205 | *** | 566 | |||||||||||
Janus Enterprise Fund | Mid-Cap Growth Funds | **** | 828 | ***** | 828 | ***** | 694 | *** | 311 | |||||||||||
Janus Orion Fund | Mid-Cap Growth Funds | ***** | 828 | ***** | 828 | ***** | 694 | N/A | 311 | |||||||||||
Janus Research Fund | Large Growth Funds | ***** | 1458 | ***** | 1458 | ***** | 1205 | **** | 566 | |||||||||||
Janus Triton Fund | Small Growth Funds | ***** | 688 | ***** | 688 | N/A | 560 | N/A | 270 | |||||||||||
Janus Twenty Fund(2) | Large Growth Funds | ***** | 1458 | ***** | 1458 | ***** | 1205 | ***** | 566 | |||||||||||
Janus Venture Fund(2) | Small Growth Funds | *** | 688 | *** | 688 | **** | 560 | *** | 270 | |||||||||||
Janus Global Life Sciences Fund | Specialty-Health Funds | **** | 183 | **** | 183 | **** | 166 | N/A | 54 | |||||||||||
Janus Global Technology Fund | Specialty-Technology Funds | **** | 264 | **** | 264 | **** | 235 | N/A | 69 | |||||||||||
Janus Balanced Fund | Moderate Allocation Funds | ***** | 937 | ***** | 937 | **** | 717 | ***** | 422 | |||||||||||
Janus Contrarian Fund | Large Blend Funds | ***** | 1695 | ***** | 1695 | ***** | 1316 | N/A | 630 | |||||||||||
Janus Fundamental Equity Fund | Large Blend Funds | ***** | 1695 | ***** | 1695 | **** | 1316 | ***** | 630 | |||||||||||
Janus Growth and Income Fund | Large Growth Funds | **** | 1458 | *** | 1458 | *** | 1205 | ***** | 566 | |||||||||||
INTECH Risk-Managed Stock Fund | Large Blend Funds | **** | 1695 | *** | 1695 | **** | 1316 | N/A | 630 | |||||||||||
Janus Mid Cap Value Fund — Institutional Shares(2) | Mid-Cap Value Funds | ***** | 301 | ***** | 301 | ***** | 217 | N/A | 66 | |||||||||||
Janus Mid Cap Value Fund — Investor Shares | Mid-Cap Value Funds | ***** | 301 | ***** | 301 | ***** | 217 | N/A | 66 | |||||||||||
Janus Small Cap Value Fund — Institutional Shares(2) | Small Value Funds | **** | 338 | **** | 338 | **** | 267 | **** | 102 | |||||||||||
Janus Small Cap Value Fund — Investor Shares(2) | Small Value Funds | **** | 338 | **** | 338 | *** | 267 | **** | 102 | |||||||||||
Janus Flexible Bond Fund | Intermediate-Term Bond Funds | **** | 984 | **** | 984 | **** | 832 | *** | 439 | |||||||||||
Janus High-Yield Fund | High Yield Bond Funds | *** | 470 | *** | 470 | ** | 402 | **** | 210 | |||||||||||
Janus Short-Term Bond Fund | Short-Term Bond Funds | **** | 388 | **** | 388 | **** | 290 | *** | 165 | |||||||||||
Janus Global Opportunities Fund | World Stock Funds | ** | 463 | * | 463 | ** | 390 | N/A | 201 | |||||||||||
Janus Global Research Fund | World Stock Funds | ***** | 463 | ***** | 463 | N/A | 390 | N/A | 201 | |||||||||||
Janus Overseas Fund(2) | Foreign Large Growth Funds | ***** | 184 | ***** | 184 | ***** | 158 | **** | 75 | |||||||||||
Janus Worldwide Fund | World Stock Funds | ** | 463 | ** | 463 | * | 390 | *** | 201 | |||||||||||
Janus Smart Portfolio — Growth | Moderate Allocation Funds | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||
Janus Smart Portfolio — Moderate | Moderate Allocation Funds | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||
Janus Smart Portfolio — Conservative | Conservative Allocation Funds | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||
Percent of funds rated 4 or 5 stars | 78.3% | 73.9% | 71.4% | 57.1% |
(1) | The Overall Morningstar RatingTM is derived from a weighted average of the performance figures associated with its three-, five-, and ten-year (if applicable) Morningstar RatingTM metrics. | |
(2) | Closed to new investors. |
Data presented reflects past performance, which is no guarantee of future results.
For each fund with at least a three-year history, Morningstar calculates a Morningstar RatingTM based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of the funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variation in the distribution percentages.)
© 2008 Morningstar, Inc. All Rights Reserved.
4 Janus Growth Funds April 30, 2008
Table of Contents
Useful Information About Your Fund Report
Management Commentaries
The Management Commentaries in this report include valuable insight from each of the Funds’ managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
Please keep in mind that the opinions expressed by the Funds’ managers in the Management Commentaries are just that: opinions. They are a reflection of their best judgment at the time this report was compiled, which was April 30, 2008. As the investing environment changes, so could the managers’ opinions. These views are unique to each manager and aren’t necessarily shared by their fellow employees or by Janus in general.
Fund Expenses
We believe it’s important for our shareholders to have a clear understanding of Fund expenses and the impact they have on investment return.
The following is important information regarding each Fund’s Expense Example, which appears in each Fund’s Management Commentary within this Semiannual Report. Please refer to this information when reviewing the Expense Example for each Fund.
Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including redemption fees, where applicable (and any related exchange fees) and (2) ongoing costs, including management fees and other Fund expenses. The example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the six-month period from November 1, 2007 to April 30, 2008.
Actual Expenses
The first line of the table in each example provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of the table in each example provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Janus Capital Management LLC (“Janus Capital”) has contractually agreed to waive Janus Triton Fund’s total operating expenses, excluding brokerage commissions, interest, dividends, taxes and extraordinary expenses, including, but not limited to, acquired fund fees and expenses, to certain limits until at least March 1, 2009. Expenses in the example reflect application of this waiver. Had the waiver not been in effect, your expenses would have been higher. More information regarding the waiver is available in the Funds’ prospectuses.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as redemption fees (where applicable). These fees are fully described in the prospectus. Therefore, the second line of each table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Janus Growth Funds April 30, 2008 5
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Janus Fund (unaudited) | Ticker: JANSX |
Fund Snapshot
This fund invests primarily in common stocks of larger, more established companies singled out for their growth potential. In addition, we focus on companies that exhibit “smart growth” meaning we place greater emphasis on sustainable and repeatable growth than the pace at which the company grows.
![(JONATHAN COLEMAN PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646pcolemaj.jpg)
Jonathan Coleman
lead co-portfolio
manager
![(DANIEL RIFF PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646priffdan.jpg)
Daniel Riff
co-portfolio
manager
Performance Overview
For the six-month period ended April 30, 2008, Janus Fund returned (9.20)%, outperforming its primary benchmark, the Russell 1000® Growth Index, which returned (9.28)%. The Fund also outperformed its secondary benchmark, the S&P 500® Index, which returned (9.64)%.
Economic Summary
Turmoil in the credit markets, uncertainty surrounding the near-term outlook for the U.S. economy and a weaker corporate profit picture made for a volatile and difficult market environment over the past several months. While sentiment toward the end of the period improved and U.S. equity markets finished well above the mid-March lows, stocks were broadly lower during the six-month period ended April 30, 2008.
Additional subprime-related write-offs, slowing consumer spending and a softening labor market, accompanied by record commodity prices and rising inflation expectations, weighed on investor sentiment during the period. Stocks reached their lows in mid-March amid fears that credit conditions could suffer another setback given a deteriorating liquidity position at investment bank Bear Stearns. Prior to that, periodic liquidity injections by the Federal Reserve (Fed) failed to alleviate the stress in the credit markets. Financial markets stabilized somewhat after the Fed aggressively lowered the Federal Funds rate, expanded the collateral it would accept and played an instrumental role in JP Morgan Chase’s purchase of Bear Stearns. In the end, the Fed lowered its target interest rate from 4.50% to 2.00% during the period.
Overall, mid-cap stocks performed better than large- and small-cap stocks, while growth outperformed value stocks. For the broad market all sectors declined with the exception of energy, which turned in a gain for the six-month period amid record crude oil prices. Meanwhile, financials were the worst performing group, suffering from turmoil in the credit markets and larger-than-expected subprime-related write-downs. Information technology was also among the weakest performers while defensive sectors, like consumer staples, posted small declines. Following the March lows, the equity market’s rally at the end of the period can be attributed in part to improving sentiment as investors began to look ahead to a possible economic recovery. Nevertheless, concerns about elevated inflationary pressures, soft consumer spending, the weak housing market and the lingering possibility of more write-downs continued to weigh on the market.
Under certain circumstances and market conditions, we may initiate positions in put and call options in order to mitigate the risks and potentially enhance the performance of the portfolio. The volatility in the U.S. equity markets over the past six months provided us with such an opportunity. During the period, we initiated positions in paired option strategies, which encompassed the simultaneous buying and selling of out-of-the-money put and call options on an underlying stock in an attempt to generate some income for the Fund. We used this strategy on a few of our holdings where we would be willing to buy more stock at the put exercise price and sell the shares at the call exercise price. (Please see “Notes to Financial Statements” for information about the hedging techniques used by the Fund.)
Energy and Materials Holdings Aided Performance
Looking more closely at the Fund, sectors that contributed to performance included energy and materials.
In the energy sector integrated oil company Hess was a top performer for the Fund. We added to the position during the period based on what we believe is an impressive number of attractive opportunities around the globe that the company has in its pipeline. We believe the price of the stock does not fully reflect the upside potential of these projects.
Within materials, our agricultural holdings continued to do well. German-based K+S A.G., a leading supplier of specialty fertilizers and plant care, benefited from price increases for its main product, potash. We believe the company is positioned to benefit more than its peers in this environment of rising commodity prices.
Another strong agricultural holding was Syngenta A.G., a Swiss-based leader in crop protection, which has been supported by higher commodity prices for corn and soybeans. Syngenta’s business has been experiencing
6 Janus Growth Funds April 30, 2008
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(unaudited)
improving fundamentals in the Brazilian market as more acreage is planted.
Holdings in Information Technology, Financials and Health Care Detracted from Performance
Our holdings in the information technology, financials and health care sectors held back performance during the period. Information technology (IT) holding Microsoft was the largest detractor during the period. The software maker posted solid quarterly earnings during the period, but the stock declined amid concerns over the company’s bid for Yahoo!. We held the stock during the period given Microsoft’s dominant position in its Office suite, which continues to be a low-cost, high-productivity tool for businesses. We also believe its gaming division has unrecognized potential. Having said that, we were disappointed in Microsoft’s bid for Yahoo! and as a result trimmed the position later in the period. Although we were underweight in the IT sector versus the benchmark, we are looking to increase our exposure.
As mentioned, holdings in the health care sector also hindered performance during the period. Health maintenance organization (HMO) UnitedHealth Group declined in sympathy with other HMO stocks late in the period after a competitor cut its profit forecast due to poor pricing that resulted in higher loss ratios. UnitedHealth later noted that Medicare volume could be lower than expected, which also weighed on the stock. We established and continued to add to the stock during the period, as we believe the core business is performing in line with expectations.
Another detractor in the health care sector was Coventry Health Care. This HMO gave up ground during the period after downwardly revising its profit forecast for the current year, citing higher-than-expected flu treatment-related costs. We trimmed the position slightly, but continued to hold the stock given that the company has been gaining share and generating excess cash.
Home mortgage provider Fannie Mae lost ground after it announced non-cash charges related to adjusting the value of the mortgage loans in its retained portfolio to current market prices due to Generally Accepted Accounting Principals (GAAP) accounting regulations. Given the ongoing risk of mortgage defaults and Fannie Mae’s accounting restrictions, we chose to exit the position.
At the end of the period the Fund was overweight in the consumer staples and materials sectors as compared to the primary benchmark, while underweight in the health care, industrials and information technology sectors. During the period we reduced our weighting in the financials and industrials sectors and increased the weighting in consumer staples.
Other Changes to the Fund
We added some new stocks to the Fund during the period. For example, we purchased Forest Laboratories, which markets key depression and hypertension drugs. We believe the major catalysts to the investment are a replenished pipeline, accelerating earnings and rising free cash flow growth.
We took profits in other names such as metal fabricator Precision Castparts, given our concerns over the slowdown in the airline cycle and the delay of the Boeing 787. We exited the Boeing position for similar reasons. Additionally, we harvested gains in other economically sensitive holdings, trimming names like Sony, transportation services company C.H. Robinson Worldwide, Staples and Nordstrom.
Outlook
Looking ahead, we will be paying close attention to the employment picture, the availability of credit and U.S. consumer confidence, among other things. Should the labor market continue to soften amid continued weakness in the housing market, further slowing in consumer spending is likely. While the government stimulus checks could provide a temporary boost, the current de-leveraging of the U.S. economy could take time to complete, possibly lessening the potential for a sharp rebound in economic activity. Inflation remains a concern for the markets as well, given record commodity prices and its recent elevated level. Although inflation is generally a lagging indicator and should ease with slowing economic growth, it deserves attention given its negative impact and the notion that inflation may limit the Fed’s options to further stimulate economic growth.
Although export growth has been strong, helping to offset domestic weakness, and corporate balance sheets are generally healthy, something that has provided support for equity prices, markets are likely to tread cautiously. Nevertheless, we remain committed to our fundamental investment approach in our effort to find opportunities that we believe represent an attractive risk/reward profile. As always, we will continue to emphasize bottom-up company analysis as our primary tool in our quest to add value for shareholders.
Manager Change
The Fund’s previous manager, David Corkins, retired from Janus as of November 1, 2007 and I assumed lead portfolio management responsibilities. I also serve as Co-Chief Investment Officer of Janus Capital Management LLC and
Janus Growth Funds April 30, 2008 7
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Janus Fund (unaudited)
am a 13-year Janus veteran. I am joined by Dan Riff, co-portfolio manager. Similar to David, we invest in large-cap companies that we believe have solid business models, strong cash flows, and high returns on invested capital. Therefore, you should not expect significant changes to the management of the Fund.
Thank you for your investment in Janus Fund.
Janus Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Hess Corp. | 1.21% | |||
K+S A.G. | 1.01% | |||
Syngenta A.G. | 0.33% | |||
Corning, Inc. | 0.24% | |||
C. H. Robinson Worldwide, Inc. | 0.20% |
5 Bottom Performers – Holdings
Contribution | ||||
Microsoft Corp. | (0.79)% | |||
UnitedHealth Group, Inc. | (0.73)% | |||
Merck & Company, Inc. | (0.60)% | |||
Coventry Health Care, Inc. | (0.53)% | |||
Fannie Mae | (0.47)% |
5 Top Performers – Sectors
Fund Weighting | Russell 1000® | |||||||||||
Fund Contribution | (% of Net Assets) | Growth Index Weighting | ||||||||||
Energy | 1.39% | 7.29% | 8.83% | |||||||||
Materials | 1.34% | 7.50% | 3.56% | |||||||||
Telecommunication Services | (0.14)% | 2.50% | 0.68% | |||||||||
Consumer Staples | (0.29)% | 13.00% | 10.68% | |||||||||
Utilities | (0.55)% | 3.72% | 1.44% |
5 Bottom Performers – Sectors
Fund Weighting | Russell 1000® | |||||||||||
Fund Contribution | (% of Net Assets) | Growth Index Weighting | ||||||||||
Information Technology | (3.46)% | 24.07% | 27.36% | |||||||||
Financials | (2.36)% | 8.44% | 6.86% | |||||||||
Health Care | (2.32)% | 12.81% | 16.02% | |||||||||
Consumer Discretionary | (1.26)% | 9.72% | 11.43% | |||||||||
Industrials | (1.24)% | 10.96% | 13.13% |
8 Janus Growth Funds April 30, 2008
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(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2008
CVS/Caremark Corp. Retail – Drug Store | 4.3% | |||
Hess Corp. Oil Companies – Integrated | 4.1% | |||
InBev N.V. Brewery | 4.0% | |||
Cisco Systems, Inc. Networking Products | 3.4% | |||
Exxon Mobil Corp. Oil Companies – Integrated | 2.9% | |||
18.7% |
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20p07.gif)
Emerging markets comprised 4.0% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20t07.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20c07.gif)
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Janus Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20m07.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratio – for the fiscal year ended October 31, 2007 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Fund | (9.20)% | 0.77% | 9.73% | 3.16% | 13.47% | 0.88% | |||||||
Russell 1000® Growth Index | (9.28)% | (0.23)% | 9.52% | 1.66% | N/A** | ||||||||
S&P 500® Index | (9.64)% | (4.68)% | 10.62% | 3.89% | 11.05% | ||||||||
Lipper Quartile | – | 3rd | 2nd | 2nd | 1st | ||||||||
Lipper Ranking – based on total return for Large-Cap Growth Funds | – | 429/748 | 203/528 | 107/250 | 2/18 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.)
The Fund’s performance may be affected by risks that include those associated with investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and other details.
Funds that invest 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 and interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – February 5, 1970 | |
** | Since inception return is not shown for the index because the index’s inception date differs significantly from the Fund’s inception date. |
10 Janus Growth Funds April 30, 2008
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(unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 908.00 | $ | 4.13 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.54 | $ | 4.37 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.87%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
Janus Growth Funds April 30, 2008 11
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Janus Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares/Principal/Contract Amounts | Value | |||||||
Common Stock – 96.1% | ||||||||
Aerospace and Defense – 2.4% | ||||||||
4,755,770 | Embraer-Empresa Brasileira Aeronautica S.A. (ADR)# | $ | 198,220,493 | |||||
727,440 | Lockheed Martin Corp. | 77,137,738 | ||||||
275,358,231 | ||||||||
Agricultural Chemicals – 2.5% | ||||||||
1,298,460 | Monsanto Co. | 148,050,409 | ||||||
462,914 | Syngenta A.G. | 137,130,929 | ||||||
285,181,338 | ||||||||
Applications Software – 2.7% | ||||||||
10,810,245 | Microsoft Corp. | 308,308,187 | ||||||
Audio and Video Products – 0.7% | ||||||||
1,745,020 | Sony Corp.** | 80,002,872 | ||||||
Automotive – Cars and Light Trucks – 0.8% | ||||||||
1,700,856 | BMW A.G**,# | 93,094,770 | ||||||
Brewery – 4.0% | ||||||||
5,551,545 | InBev N.V.**,# | 457,283,203 | ||||||
Casino Hotels – 1.3% | ||||||||
10,242,456 | Crown, Ltd. | 105,682,560 | ||||||
489,506 | Las Vegas Sands Corp.* | 37,310,147 | ||||||
142,992,707 | ||||||||
Cellular Telecommunications – 0.5% | ||||||||
936,690 | America Movil S.A. de C.V. Series L (ADR) | 54,290,552 | ||||||
Chemicals – Diversified – 2.7% | ||||||||
1,384,446 | Bayer A.G.**,# | 117,710,956 | ||||||
456,860 | K+S A.G.** | 189,342,617 | ||||||
307,053,573 | ||||||||
Commercial Services – Finance – 1.6% | ||||||||
2,090,696 | Automatic Data Processing, Inc. | 92,408,763 | ||||||
3,761,960 | Western Union Co. | 86,525,080 | ||||||
178,933,843 | ||||||||
Computers – 5.7% | ||||||||
993,376 | Apple, Inc.* | 172,797,755 | ||||||
2,295,205 | Dell, Inc.* | 42,759,669 | ||||||
4,410,745 | Hewlett-Packard Co.** | 204,438,031 | ||||||
1,905,745 | Research In Motion, Ltd. (U.S. Shares)* | 231,795,765 | ||||||
651,791,220 | ||||||||
Cosmetics and Toiletries – 1.5% | ||||||||
1,293,688 | Avon Products, Inc. | 50,479,706 | ||||||
90,885 | Colgate-Palmolive Co. | 6,425,570 | ||||||
1,673,860 | Procter & Gamble Co. | 112,232,312 | ||||||
169,137,588 | ||||||||
Diversified Operations – 4.4% | ||||||||
11,658,000 | China Merchants Holdings International Company, Ltd. | 59,500,275 | ||||||
1,677,750 | Danaher Corp.# | 130,898,055 | ||||||
1,926,105 | Ingersoll-Rand Co. – Class A | 85,480,540 | ||||||
1,897,486 | Siemens A.G.** | 224,842,822 | ||||||
500,721,692 | ||||||||
Electric – Generation – 2.2% | ||||||||
14,242,830 | AES Corp.* | 247,255,529 | ||||||
Electric Products – Miscellaneous – 1.9% | ||||||||
2,800,637 | Emerson Electric Co. | 146,361,290 | ||||||
4,205,000 | Sharp Corp.** | 71,244,791 | ||||||
217,606,081 | ||||||||
Electronic Components – Semiconductors – 0.6% | ||||||||
2,257,439 | Texas Instruments, Inc. | 65,826,921 | ||||||
Electronic Measuring Instruments – 0.6% | ||||||||
266,800 | Keyence Corp.** | 68,309,166 | ||||||
Enterprise Software/Services – 1.6% | ||||||||
8,526,760 | Oracle Corp.* | 177,782,946 | ||||||
Entertainment Software – 1.0% | ||||||||
2,243,806 | Electronic Arts, Inc.* | 115,488,695 | ||||||
Finance – Investment Bankers/Brokers – 3.3% | ||||||||
543,410 | Goldman Sachs Group, Inc. | 103,992,372 | ||||||
3,719,080 | JP Morgan Chase & Co. | 177,214,162 | ||||||
5,163,500 | Nomura Holdings, Inc.** | 89,916,442 | ||||||
371,122,976 | ||||||||
Finance – Other Services – 0.9% | ||||||||
223,252 | CME Group, Inc.# | 102,126,627 | ||||||
Food – Retail – 1.2% | ||||||||
15,834,659 | Tesco PLC** | 133,824,228 | ||||||
Forestry – 1.5% | ||||||||
2,645,202 | Weyerhaeuser Co. | 168,975,504 | ||||||
Independent Power Producer – 1.4% | ||||||||
3,701,087 | NRG Energy, Inc.*,# | 162,662,774 | ||||||
Industrial Gases – 0.6% | ||||||||
789,175 | Praxair, Inc. | 72,059,569 | ||||||
Investment Management and Advisory Services – 0.8% | ||||||||
1,523,085 | T. Rowe Price Group, Inc.# | 89,191,858 | ||||||
Medical – Biomedical and Genetic – 3.4% | ||||||||
3,583,111 | Celgene Corp.* | 222,654,517 | ||||||
1,737,153 | Genentech, Inc.*,# | 118,473,835 | ||||||
719,530 | Genzyme Corp.* | 50,618,936 | ||||||
391,747,288 | ||||||||
Medical – Drugs – 3.5% | ||||||||
1,704,812 | Forest Laboratories, Inc.* | 59,174,025 | ||||||
4,071,725 | Merck & Company, Inc. | 154,888,419 | ||||||
1,094,947 | Roche Holding A.G. | 182,373,915 | ||||||
396,436,359 | ||||||||
Medical – HMO – 3.4% | ||||||||
4,054,585 | Coventry Health Care, Inc.* | 181,361,587 | ||||||
6,366,630 | UnitedHealth Group, Inc. | 207,743,137 | ||||||
389,104,724 | ||||||||
Multimedia – 1.0% | ||||||||
6,565,720 | News Corporation, Inc. – Class A | 117,526,388 | ||||||
Networking Products – 3.4% | ||||||||
15,173,480 | Cisco Systems, Inc.*,** | 389,048,027 | ||||||
Oil Companies – Exploration and Production – 1.2% | ||||||||
1,629,915 | Occidental Petroleum Corp. | 135,625,227 | ||||||
Oil Companies – Integrated – 7.7% | ||||||||
3,532,635 | Exxon Mobil Corp. | 328,782,340 | ||||||
4,396,782 | Hess Corp.** | 466,938,249 | ||||||
641,560 | Petroleo Brasileiro S.A. (ADR)** | 77,898,215 | ||||||
873,618,804 | ||||||||
See Notes to Schedules of Investments and Financial Statements.
12 Janus Growth Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares/Principal/Contract Amounts | Value | |||||||
Reinsurance – 1.5% | ||||||||
39,376 | Berkshire Hathaway, Inc. – Class B* | $ | 175,498,832 | |||||
REIT – Warehouse and Industrial – 0.3% | ||||||||
538,075 | ProLogis | 33,688,876 | ||||||
Retail – Apparel and Shoe – 0.8% | ||||||||
2,673,165 | Nordstrom, Inc.# | 94,255,798 | ||||||
Retail – Drug Store – 4.3% | ||||||||
11,968,974 | CVS/Caremark Corp. | 483,187,480 | ||||||
Retail – Office Supplies – 0.7% | ||||||||
3,773,062 | Staples, Inc. | 81,875,445 | ||||||
Retail – Restaurants – 0.7% | ||||||||
1,392,095 | McDonald’s Corp. | 82,941,020 | ||||||
Semiconductor Components/Integrated Circuits – 2.7% | ||||||||
2,654,895 | Cypress Semiconductor Corp.* | 74,655,647 | ||||||
8,456,890 | Marvell Technology Group, Ltd.* | 109,516,726 | ||||||
55,255,115 | Taiwan Semiconductor Manufacturing Company, Ltd. | 120,418,384 | ||||||
304,590,757 | ||||||||
Semiconductor Equipment – 1.5% | ||||||||
3,958,010 | KLA-Tencor Corp.# | 172,885,877 | ||||||
Telecommunication Equipment – Fiber Optics – 2.5% | ||||||||
10,453,425 | Corning, Inc. | 279,210,982 | ||||||
Therapeutics – 0.5% | ||||||||
1,101,905 | Gilead Sciences, Inc.* | 57,034,603 | ||||||
Tobacco – 1.9% | ||||||||
4,128,620 | Altria Group, Inc. | 82,572,400 | ||||||
2,527,120 | Philip Morris International, Inc.* | 128,958,934 | ||||||
211,531,334 | ||||||||
Toys – 0.2% | ||||||||
1,140,550 | Mattel, Inc. | 21,385,313 | ||||||
Transportation – Railroad – 0.4% | ||||||||
916,875 | Canadian National Railway Co. (U.S. Shares)# | 48,035,081 | ||||||
Transportation – Services – 2.1% | ||||||||
1,259,100 | C.H. Robinson Worldwide, Inc. | 78,920,388 | ||||||
2,214,380 | United Parcel Service, Inc. – Class B | 160,343,256 | ||||||
239,263,644 | ||||||||
Web Portals/Internet Service Providers – 2.2% | ||||||||
430,445 | Google, Inc. – Class A* | 247,200,259 | ||||||
Wireless Equipment – 1.8% | ||||||||
5,173,180 | Crown Castle International Corp.* | 200,978,043 | ||||||
Total Common Stock (cost $9,583,519,621) | 10,923,052,811 | |||||||
Corporate Bonds – 0.4% | ||||||||
Electric – Integrated – 0.4% | ||||||||
$ | 13,550,000 | Energy Future Holdings, 10.875% due 11/1/17 (144A) | $ | 14,430,750 | ||||
23,170,000 | Texas Competitive Electric Holdings Company LLC, 10.25% due 11/1/15 (144A) | 24,154,725 | ||||||
38,585,475 | ||||||||
Total Corporate Bonds (cost $36,846,942) | 38,585,475 | |||||||
Purchased Options – Puts – 0.1% | ||||||||
21,983 | Hess Corp. expires January 2009 exercise price $80.00 | 10,755,402 | ||||||
3,207 | Petroleo Brasileiro S.A. (ADR) expires January 2009 exercise price $100.00 | 2,969,041 | ||||||
Total Purchased Options (premiums paid $15,859,780) | 13,724,443 | |||||||
Money Markets – 3.9% | ||||||||
180,867,209 | Janus Institutional Cash Management Fund – Institutional Shares, 2.82% | 180,867,209 | ||||||
259,579,562 | Janus Institutional Money Market Fund – Institutional Shares, 2.74% | 259,579,562 | ||||||
Total Money Markets (cost $440,446,771) | 440,446,771 | |||||||
Other Securities – 5.7% | ||||||||
77,070,675 | Allianz Dresdner Daily Asset Fund† | 77,070,675 | ||||||
141,495,680 | Repurchase Agreements† | 141,495,680 | ||||||
432,408,046 | Time Deposits† | 432,408,016 | ||||||
Total Other Securities (cost $650,974,371) | 650,974,371 | |||||||
Total Investments (total cost $10,727,647,485) – 106.2% | 12,066,783,871 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (6.2)% | (702,167,720) | |||||||
Net Assets – 100% | $ | 11,364,616,151 | ||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Australia | $ | 105,682,560 | 0.9% | |||||
Belgium | 457,283,203 | 3.8% | ||||||
Bermuda | 194,997,266 | 1.6% | ||||||
Brazil | 279,087,750 | 2.3% | ||||||
Canada | 279,830,846 | 2.3% | ||||||
Germany | 624,991,164 | 5.2% | ||||||
Hong Kong | 59,500,275 | 0.5% | ||||||
Japan | 309,473,272 | 2.6% | ||||||
Mexico | 54,290,552 | 0.5% | ||||||
Switzerland | 319,504,844 | 2.6% | ||||||
Taiwan | 120,418,384 | 1.0% | ||||||
United Kingdom | 133,824,229 | 1.1% | ||||||
United States†† | 9,127,899,526 | 75.6% | ||||||
Total | $ | 12,066,783,871 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (66.6% excluding Short-Term Securities and Other Securities) |
Forward Currency Contracts, Open
Currency Sold and | Currency | Currency | Unrealized | |||||||||
Settlement Date | Units Sold | Value in U.S. $ | Gain/(Loss) | |||||||||
British Pound 5/14/08 | 20,600,000 | $ | 40,929,123 | 714,908 | ||||||||
Euro 10/16/08 | 8,500,000 | 13,163,582 | 152,688 | |||||||||
Euro 10/23/08 | 329,000,000 | 510,723,569 | (1,555,909) | |||||||||
Euro 11/12/08 | 167,000,000 | 258,296,763 | (286,773) | |||||||||
Japanese Yen 10/16/08 | 3,000,000,000 | 29,120,133 | 815,505 | |||||||||
Total | $ | 852,233,170 | $ | (159,581) |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2008 13
Table of Contents
Janus Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Schedule of Written Options – Calls | Value | |||
Cisco Systems, Inc. expires January 2009 35,221 contracts exercise price $30.00 | $ | (4,201,161) | ||
Hess Corp. expires January 2009 21,983 contracts exercise price $150.00 | (9,326,947) | |||
Hewlett-Packard Co. expires January 2009 22,619 contracts exercise price $55.00 | (3,619,040) | |||
Petroleo Brasileiro S.A. (ADR) expires January 2009 3,207 contracts exercise price $165.00 | (1,603,436) | |||
Total Written Options – Calls | ||||
(Premiums received $21,007,260) | $ | (18,750,584) | ||
Schedule of Written Options – Puts | ||||
Cisco Systems, Inc. expires January 2009 35,950 contracts exercise price $18.50 | $ | (1,853,222) | ||
Hewlett-Packard Co. expires January 2009 22,619 contracts exercise price $35.00 | (2,261,900) | |||
Total Written Options – Puts | ||||
(Premiums received $6,222,410) | $ | (4,115,122) | ||
See Notes to Schedules of Investments and Financial Statements.
14 Janus Growth Funds April 30, 2008
Table of Contents
Janus Enterprise Fund (unaudited) | Ticker: JAENX |
Fund Snapshot
This fund invests in medium-sized companies that have grown large enough to be well established but are small enough to still have room to grow.
![(BRIAN DEMAIN PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646pdemainb.jpg)
Brian Demain
portfolio manager
Performance Overview
During the six months ended April 30, 2008, Janus Enterprise Fund returned (3.54)%. Meanwhile, the Fund’s primary benchmark, the Russell Midcap® Growth Index, returned (8.44)%. The Fund’s secondary benchmark, the S&P MidCap 400 Index, returned (6.95)% for the same time period.
Economic Overview
Turmoil in the credit markets, uncertainty surrounding the near-term outlook for the U.S. economy and a weaker corporate profit picture made for a volatile and difficult market environment over the past several months. While sentiment toward the end of the period improved and U.S. equity markets finished well above the mid-March lows, stocks were broadly lower during the six-month period ended April 30, 2008.
Additional subprime-related write-offs, slowing consumer spending and a softening labor market, accompanied by record commodity prices and rising inflation expectations, weighed on investor sentiment during the period. Stocks reached their lows in mid-March amid fears that credit conditions could suffer another setback given a deteriorating liquidity position at investment bank Bear Stearns. Prior to that, periodic liquidity injections by the Federal Reserve (Fed) failed to alleviate the stress in the credit markets. Financial markets stabilized somewhat after the Fed aggressively lowered the Federal Funds rate, expanded the collateral it would accept and played an instrumental role in JP Morgan Chase’s purchase of Bear Stearns. In the end, the Fed lowered its target interest rate from 4.50% to 2.00% during the period.
Overall, mid-cap stocks performed better than large- and small-cap stocks, while growth outperformed value stocks. All sectors declined with the exception of energy, which turned in a gain for the six-month period amid record crude oil prices. Meanwhile, financials were the worst performing group, suffering from turmoil in the credit markets and larger-than-expected subprime-related write-downs. Information technology was also among the weakest performers while defensive sectors, like consumer staples, posted small declines. Following the March lows, the equity market’s rally at the end of the period can be attributed in part to improving sentiment as investors began to look ahead to a possible economic recovery. Nevertheless, concerns about elevated inflationary pressures, soft consumer spending, the weak housing market and the lingering possibility of more write-downs continued to weigh on the market.
Energy and Materials Stocks Aided Performance
The largest contributors to the Fund were energy holding EOG Resources and materials holding Potash Corporation of Saskatchewan. EOG announced new discoveries and upped its production guidance during the period. While I believe the company should continue to benefit from rising natural gas prices and the likelihood that the new finds will be accretive to results, I trimmed the holding to accurately reflect our view of the company’s risk/reward profile.
Potash Corporation has the world’s largest excess supply of potash, an ingredient in agricultural fertilizer. Potash-based fertilizer has improved agriculture efficiency and has seen higher demand in the agricultural sector along with increasing demands on the world’s arable land. Additionally, the company has benefited from pricing power, as the end user is generally insensitive to increases in potash prices. With the market for potash tight and the company’s sales fully booked for the first half of 2008, I remain optimistic about the growth prospects at this company but exited the position to appropriately reflect my view of the current risk/reward profile. I added to my position in German potash producer K+S A.G. and established a position in American potash producer Intrepid Potash during the period.
Select Information Technology and Consumer Discretionary Stocks Weighed on Results
Data center and information technology (IT) services provider SAVVIS suffered during the period as the company lowered guidance, adding to a series of mismanaged investor expectations. Additional concerns that increasing supply in the industry will hamper further growth prospects, as well as concern that IT spending could be reduced in an economic slowdown, hindered the stock’s performance. Longer term, I believe SAVVIS is well positioned to take advantage of increased out-sourcing of non-core IT infrastructure. In addition, this business has historically benefited from pricing power and high incremental margins. I added to the position as I believe the company represents a predictable, recurring-revenue, low-churn business with little economic
Janus Growth Funds April 30, 2008 15
Table of Contents
Janus Enterprise Fund (unaudited)
sensitivity that will likely benefit from pricing power and a strong secular backdrop.
Within the consumer discretionary sector, long-time holding Lamar Advertising suffered in the period as management gave weaker-than-expected revenue guidance on their quarterly call. A slowing economy and concerns about advertising revenue also weighed on the stock price. I continue to believe in the stability and predictability of Lamar’s business. Additionally, I do not believe the stock price at the end of the period reflected the growth prospects associated with transitioning a portion of the advertising business from traditional to digital billboards. I believe the market overreacted to management’s candor and that growth prospects from digital billboards are not adequately reflected in the stock’s valuation. The company continued to generate free cash flow and return of capital to shareholders. Given what I believe to be strong underlying fundamentals, predictability and potential for future growth, I added to the position on the weakness.
Outlook
The U.S. economy has severely decelerated as a function of limited credit availability and the fallout from the housing bubble. This deceleration has been countered with actions by the Fed and Federal government. While we may escape a formal recession, we could see modest economic growth for the next several quarters and perhaps into the beginning of 2009.
Many financial institutions are facing capital shortages that force them to de-lever and rebuild their equity base rather than help create credit for the broader economy. This is impacting small business expansion, which is having secondary impacts on consumers and large corporations. Mortgage rates are elevated, credit cards are slightly harder to get and consumer confidence, as a result, is near a 28-year low.
Housing starts, which peaked at 2.3 million in January 2006, declined to 950,000 as of December 2007. While 950,000 is unsustainably low over the long term, given the housing inventory overhang, we could expect that level to sustain for some time. Residential fixed investment is approximately 5% of Gross Domestic Product (GDP), and absorbing the impact of a 60% drop in housing starts creates a real headwind for 2008.
The Fed and Federal government have both responded aggressively, with rate cuts and stimulus packages, respectively. While the rapid stimulus may encourage moral hazard in the long run, in the coming quarters it should provide a counterbalance to the limited credit availability and housing headwinds. Monetary easing and the bailout of Bear Stearns could have stabilized the credit markets. The stimulus checks sent out by the Federal government could help aid consumption and may help modestly strengthen consumer balance sheets.
Finally, given the increasingly global nature of U.S. companies’ operations, it is important to consider the global backdrop. While Western Europe faces many of the same obstacles as the U.S., the strong growth in Asia and Latin America, driven by increasing globalization and strong commodity prices, is likely to continue. This helps U.S. companies that export, or that supply exporters to those regions.
We expect continued volatility as the market measures the impact of the negative and positive cross-currents to the economic outlook. In the face of this macroeconomic uncertainty, I’ve attempted to position the portfolio so that individual stock decisions outweigh macroeconomic concerns in seeking performance. I continue to try to find sustainable, high-return growth companies that do not depend on the macroeconomic backdrop, whether it is a headwind or a tailwind.
The period reviewed in this letter is the first with me as the Fund’s manager. I assumed management of the Fund on November 1 from Jonathan Coleman. I have nine years of investing experience and three years of working with Jonathan Coleman as an assistant portfolio manager on the Fund, so I come into this role with experience and knowledge of the portfolio.
As shareholders, you should expect a very similar management style to Jonathan’s. I will focus on finding businesses with strong competitive advantages, high and improving returns on invested capital, sustainable smart growth and strong management. I will focus on buying these stocks at what I consider to be attractive valuations. Finally, I will attempt to limit the volatility of the Fund’s returns by emphasizing names that I believe have repeatable and sustainable growth at the top of the portfolio.
The most important element to be aware of in this transition is that I will be backed by the same strong team of Janus analysts who supported the Fund during the past five years of solid performance. This talented, hard-working, diverse group provides a constant flow of new investment ideas, as well as detailed work on existing positions.
Possibly the biggest difference between Jonathan’s management style and mine will be seen in the total number of holdings. I generally hope to run a portfolio with fewer than 100 holdings, which is slightly less than the
16 Janus Growth Funds April 30, 2008
Table of Contents
(unaudited)
number of holdings that Jonathan had. We have been tactically and gradually taking the smallest positions and deciding whether to increase the holding to a size where it can make a meaningful impact on the portfolio, or selling it outright.
I greatly appreciate the trust you are placing in both me and the analyst team at Janus, and I look forward to communicating with you in the coming years.
Thank you for your investment in Janus Enterprise Fund.
Janus Enterprise Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
EOG Resources, Inc. | 0.98% | |||
Potash Corporation of Saskatchewan, Inc. (U.S. Shares). | 0.92% | |||
K+S A.G. | 0.83% | |||
Owens- Illinois, Inc. | 0.71% | |||
Respironics, Inc. | 0.45% |
5 Bottom Performers – Holdings
Contribution | ||||
SAVVIS, Inc. | (1.04)% | |||
Lamar Advertising Co. – Class A | (0.74)% | |||
Ryanair Holdings PLC (ADR) | (0.65)% | |||
National Financial Partners Corp. | (0.60)% | |||
CME Group, Inc. | (0.51)% |
5 Top Performers – Sectors
Fund Weighting | Russell Midcap® Growth | |||||||||||
Fund Contribution | (% of Net Assets) | Index Weighting | ||||||||||
Energy | 2.68% | 7.76% | 12.43% | |||||||||
Materials | 2.59% | 7.79% | 4.98% | |||||||||
Utilities | 0.02% | 0.98% | 3.53% | |||||||||
Telecommunication Services | (0.13)% | 5.91% | 2.15% | |||||||||
Health Care | (0.42)% | 11.04% | 12.60% |
5 Bottom Performers – Sectors
Fund Weighting | Russell Midcap® Growth | |||||||||||
Fund Contribution | (% of Net Assets) | Index Weighting | ||||||||||
Consumer Discretionary | (2.73)% | 16.23% | 16.30% | |||||||||
Information Technology | (2.68)% | 20.79% | 19.14% | |||||||||
Financials | (1.77)% | 15.76% | 8.05% | |||||||||
Industrials | (1.12)% | 12.37% | 16.32% | |||||||||
Consumer Staples | (0.43)% | 1.35% | 4.50% |
Janus Growth Funds April 30, 2008 17
Table of Contents
Janus Enterprise Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2008
Crown Castle International Corp. Wireless Equipment | 2.9% | |||
Celgene Corp. Medical-Biomedical and Genetic | 2.7% | |||
Lamar Advertising Co. – Class A Advertising Sales | 2.4% | |||
Cypress Semiconductor Corp. Semiconductor Components/Integrated Circuits | 2.3% | |||
Iron Mountain, Inc. Commercial Services | 2.0% | |||
12.3% |
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20p06.gif)
Emerging markets comprised 2.0% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20t06.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20c06.gif)
18 Janus Growth Funds April 30, 2008
Table of Contents
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20m06.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratio – for the fiscal year ended October 31, 2007 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Enterprise Fund | (3.54)% | 10.47% | 18.61% | 7.06% | 11.76% | 0.94% | |||||||
Russell Midcap® Growth Index | (8.44)% | (1.93)% | 15.29% | 5.75% | 10.46% | ||||||||
S&P MidCap 400 Index | (6.95)% | (2.76)% | 15.20% | 9.64% | 13.49% | ||||||||
Lipper Quartile | – | 1st | 1st | 2nd | 2nd | ||||||||
Lipper Ranking – based on total return for Mid-Cap Growth Funds | – | 50/604 | 21/414 | 60/179 | 12/46 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.)
The Fund’s performance may be affected by risks that include those associated with investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and other details.
Funds that invest 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 and interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
September 3, 1992 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – September 1, 1992 |
Janus Growth Funds April 30, 2008 19
Table of Contents
Janus Enterprise Fund (unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 964.60 | $ | 4.49 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.29 | $ | 4.62 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.92%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
20 Janus Growth Funds April 30, 2008
Table of Contents
Janus Enterprise Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Common Stock – 95.2% | ||||||||
Advertising Sales – 2.4% | ||||||||
1,296,155 | Lamar Advertising Co. – Class A*,# | $ | 51,249,969 | |||||
Aerospace and Defense – 2.0% | ||||||||
1,005,575 | Embraer-Empresa Brasileira de Aeronautica S.A. (ADR) | 41,912,366 | ||||||
Aerospace and Defense – Equipment – 0.5% | ||||||||
103,250 | Alliant Techsystems, Inc.*,# | 11,332,720 | ||||||
Agricultural Chemicals – 0.5% | ||||||||
228,105 | Intrepid Potash, Inc.*,# | 10,832,706 | ||||||
Agricultural Operations – 0.4% | ||||||||
6,406,000 | Chaoda Modern Agriculture Holdings, Ltd. | 9,220,356 | ||||||
Airlines – 1.1% | ||||||||
867,356 | Ryanair Holdings PLC (ADR)*,# | 23,514,021 | ||||||
Apparel Manufacturers – 1.2% | ||||||||
1,982,500 | Esprit Holdings, Ltd. | 24,431,946 | ||||||
Automotive – Truck Parts and Equipment – Original – 0.5% | ||||||||
444,855 | Tenneco, Inc.* | 11,379,391 | ||||||
Batteries and Battery Systems – 1.3% | ||||||||
335,515 | Energizer Holdings, Inc.* | 26,525,816 | ||||||
Building – Mobile Home and Manufactured Homes – 0.5% | ||||||||
363,895 | Thor Industries, Inc.# | 11,033,296 | ||||||
Casino Hotels – 0.8% | ||||||||
1,609,320 | Crown, Ltd. | 16,605,105 | ||||||
Casino Services – 0.9% | ||||||||
684,045 | Scientific Games Corp. – Class A*,# | 19,262,707 | ||||||
Cellular Telecommunications – 2.0% | ||||||||
402,340 | Leap Wireless International, Inc.*,# | 21,513,120 | ||||||
426,665 | N.I.I. Holdings, Inc.*,# | 19,515,657 | ||||||
41,028,777 | ||||||||
Chemicals – Diversified – 1.4% | ||||||||
71,918 | K+S A.G. | 29,805,941 | ||||||
Commercial Services – 2.0% | ||||||||
1,534,622 | Iron Mountain, Inc.*,# | 42,156,066 | ||||||
Commercial Services – Finance – 3.0% | ||||||||
803,940 | Equifax, Inc. | 30,766,784 | ||||||
324,247 | Global Payments, Inc. | 14,351,172 | ||||||
475,936 | Paychex, Inc.# | 17,309,792 | ||||||
62,427,748 | ||||||||
Computer Services – 0.6% | ||||||||
195,710 | IHS, Inc. – Class A*,# | 12,926,646 | ||||||
Computers – 1.2% | ||||||||
147,647 | Apple, Inc.* | 25,683,196 | ||||||
Consulting Services – 1.7% | ||||||||
1,565,020 | Gartner Group, Inc.* | 35,870,258 | ||||||
Containers – Metal and Glass – 3.1% | ||||||||
478,865 | Ball Corp. | 25,753,360 | ||||||
699,830 | Owens-Illinois, Inc.* | 38,595,624 | ||||||
64,348,984 | ||||||||
Decision Support Software – 1.1% | ||||||||
744,070 | MSCI, Inc.*,# | 23,081,051 | ||||||
Distribution/Wholesale – 0.9% | ||||||||
4,575,600 | Li & Fung, Ltd. | 18,821,325 | ||||||
Diversified Operations – 1.1% | ||||||||
1,276,000 | China Merchants Holdings International Company, Ltd. | 6,512,468 | ||||||
191,815 | Cooper Industries, Ltd. – Class A | 8,131,038 | ||||||
35,394,279 | Polytec Asset Holdings, Ltd. | 7,838,541 | ||||||
22,482,047 | ||||||||
Electric Products – Miscellaneous – 1.2% | ||||||||
506,827 | AMETEK, Inc. | 24,591,246 | ||||||
Electronic Connectors – 0.7% | ||||||||
340,215 | Amphenol Corp. – Class A | 15,711,129 | ||||||
Electronic Measuring Instruments – 1.4% | ||||||||
882,975 | Trimble Navigation, Ltd.*,# | 28,952,750 | ||||||
Entertainment Software – 0.8% | ||||||||
340,705 | Electronic Arts, Inc.* | 17,536,086 | ||||||
Fiduciary Banks – 0.9% | ||||||||
252,315 | Northern Trust Corp. | 18,699,065 | ||||||
Finance – Consumer Loans – 0.7% | ||||||||
1,146,650 | Nelnet, Inc. – Class A# | 14,665,654 | ||||||
Finance – Other Services – 1.1% | ||||||||
51,920 | CME Group, Inc.# | 23,750,804 | ||||||
Independent Power Producer – 1.3% | ||||||||
619,965 | NRG Energy, Inc.*,# | 27,247,462 | ||||||
Instruments – Controls – 0.7% | ||||||||
144,160 | Mettler-Toledo International, Inc.* | 13,732,682 | ||||||
Instruments – Scientific – 1.4% | ||||||||
499,274 | Thermo Fisher Scientific, Inc.* | 28,892,986 | ||||||
Investment Management and Advisory Services – 3.2% | ||||||||
1,067,875 | National Financial Partners Corp. | 28,747,195 | ||||||
658,955 | T. Rowe Price Group, Inc.# | 38,588,405 | ||||||
67,335,600 | ||||||||
Machinery – Pumps – 1.0% | ||||||||
482,455 | Graco, Inc. | 19,978,462 | ||||||
Medical – Biomedical and Genetic – 3.0% | ||||||||
895,073 | Celgene Corp.*,# | 55,619,836 | ||||||
114,520 | Millipore Corp.* | 8,027,852 | ||||||
63,647,688 | ||||||||
Medical – Drugs – 1.2% | ||||||||
450,730 | Shire PLC (ADR)# | 24,763,106 | ||||||
Medical – Generic Drugs – 0.5% | ||||||||
427,055 | Alpharma, Inc. – Class A* | 10,509,824 | ||||||
Medical – HMO – 1.8% | ||||||||
826,913 | Coventry Health Care, Inc.* | 36,987,818 | ||||||
Metal Processors and Fabricators – 0.6% | ||||||||
105,530 | Precision Castparts Corp. | 12,406,107 | ||||||
Oil – Field Services – 0.6% | ||||||||
549,770 | Acergy S.A. | 13,570,466 | ||||||
Oil and Gas Drilling – 1.1% | ||||||||
434,290 | Helmerich & Payne, Inc. | 23,343,088 | ||||||
Oil Companies – Exploration and Production – 5.7% | ||||||||
256,350 | Chesapeake Energy Corp.# | 13,253,295 | ||||||
238,225 | EOG Resources, Inc. | 31,083,598 | ||||||
549,080 | Forest Oil Corp.* | 32,357,285 |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2008 21
Table of Contents
Janus Enterprise Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Oil Companies – Exploration and Production – (continued) | ||||||||
1,231,335 | Petrohawk Energy Corp.* | $ | 29,108,759 | |||||
259,745 | Sandridge Energy, Inc.*,# | 11,735,279 | ||||||
117,538,216 | ||||||||
Oil Companies – Integrated – 1.2% | ||||||||
236,775 | Hess Corp. | 25,145,505 | ||||||
Physician Practice Management – 1.3% | ||||||||
387,249 | Pediatrix Medical Group, Inc.* | 26,340,677 | ||||||
Real Estate Management/Services – 1.5% | ||||||||
816,805 | CB Richard Ellis Group, Inc. – Class A*,# | 18,884,532 | ||||||
148,820 | Jones Lang LaSalle, Inc. | 11,549,920 | ||||||
30,434,452 | ||||||||
Real Estate Operating/Development – 2.3% | ||||||||
2,195,000 | CapitaLand, Ltd. | 11,066,056 | ||||||
4,262,000 | Hang Lung Properties, Ltd. | 17,362,974 | ||||||
469,610 | St. Joe Co.# | 19,099,039 | ||||||
47,528,069 | ||||||||
Reinsurance – 2.0% | ||||||||
9,399 | Berkshire Hathaway, Inc. – Class B* | 41,891,343 | ||||||
REIT – Diversified – 1.4% | ||||||||
2,132,245 | CapitalSource, Inc.# | 29,958,042 | ||||||
Retail – Apparel and Shoe – 2.7% | ||||||||
328,020 | Abercrombie & Fitch Co. – Class A# | 24,375,166 | ||||||
939,410 | Nordstrom, Inc. | 33,123,597 | ||||||
57,498,763 | ||||||||
Retail – Consumer Electronics – 0.2% | ||||||||
58,550 | Yamada Denki Company, Ltd. | 5,052,271 | ||||||
Retail – Office Supplies – 0.8% | ||||||||
796,200 | Staples, Inc. | 17,277,540 | ||||||
Retail – Restaurants – 0.6% | ||||||||
138,250 | Chipotle Mexican Grill, Inc. – Class B*, | 11,747,103 | ||||||
Schools – 0.3% | ||||||||
133,294 | Apollo Group, Inc. – Class A* | 6,784,665 | ||||||
Semiconductor Components/Integrated Circuits – 4.7% | ||||||||
9,131,990 | Atmel Corp.* | 33,971,003 | ||||||
1,680,205 | Cypress Semiconductor Corp.* | 47,247,365 | ||||||
1,363,635 | Marvell Technology Group, Ltd.*,# | 17,659,073 | ||||||
98,877,441 | ||||||||
Semiconductor Equipment – 1.7% | ||||||||
793,035 | KLA-Tencor Corp. | 34,639,769 | ||||||
Telecommunication Equipment – 2.0% | ||||||||
880,010 | CommScope, Inc.* | 41,844,476 | ||||||
Telecommunication Services – 3.9% | ||||||||
992,010 | Amdocs, Ltd. (U.S. Shares)* | 31,129,274 | ||||||
1,087,765 | SAVVIS, Inc.*,# | 15,935,757 | ||||||
1,777,035 | Time Warner Telecom, Inc. – Class A*,# | 34,829,886 | ||||||
81,894,917 | ||||||||
Therapeutics – 0.9% | ||||||||
365,097 | Gilead Sciences, Inc.* | 18,897,421 | ||||||
Toys – 1.4% | ||||||||
205,177 | Marvel Entertainment, Inc.* | 5,886,528 | ||||||
1,245,920 | Mattel, Inc. | 23,361,000 | ||||||
29,247,528 | ||||||||
Transportation – Railroad – 0.8% | ||||||||
325,590 | Canadian National Railway Co. (U.S. Shares) | 17,057,660 | ||||||
Transportation – Services – 0.8% | ||||||||
358,795 | Expeditors International of Washington, Inc.# | 16,716,259 | ||||||
Transportation – Truck – 0.8% | ||||||||
327,920 | Landstar System, Inc. | 17,038,723 | ||||||
Web Hosting/Design – 1.9% | ||||||||
449,256 | Equinix, Inc.*,# | 40,621,728 | ||||||
Wireless Equipment – 2.9% | ||||||||
1,543,105 | Crown Castle International Corp.* | 59,949,629 | ||||||
Total Common Stock (cost $1,521,504,584) | 1,996,236,658 | |||||||
Money Markets – 4.9% | ||||||||
41,397,952 | Janus Institutional Cash Management Fund – Institutional Shares, 2.82% | 41,397,952 | ||||||
61,926,552 | Janus Institutional Money Market Fund – Institutional Shares, 2.74% | 61,926,551 | ||||||
Total Money Markets (Cost $103,324,503) | 103,324,503 | |||||||
Other Securities – 17.3% | ||||||||
84,146,761 | Allianz Dresdner Daily Asset Fund† | 84,146,761 | ||||||
68,982,567 | Repurchase Agreements† | 68,982,567 | ||||||
Time Deposits: | ||||||||
16,640,001 | Abbey National Treasury, N.A., 2.375%, 5/1/08† | 16,640,001 | ||||||
7,424,060 | ABN-AMRO Bank N.V., N.A., 2.26%, 5/1/08† | 7,424,060 | ||||||
8,659,135 | BNP Paribas, New York, N.A., 2.50%, 5/1/08† | 8,659,135 | ||||||
17,318,269 | Calyon, N.A., 2.50%, 5/1/08† | 17,318,269 | ||||||
6,027,380 | Chase Bank USA, N.A., 2.25%, 5/1/08† | 6,027,380 | ||||||
19,050,096 | Danske Bank, Cayman Islands, N.A., 2.53%, 5/1/08† | 19,050,096 | ||||||
12,122,788 | Deutsche Bank A.G., N.A., 2.30%, 5/1/08† | 12,122,788 | ||||||
17,318,269 | Dexia Bank S.A. Brussels, N.A., 2.50%, 5/1/08† | 17,318,269 | ||||||
17,318,269 | ING Bank N.V., Amsterdam, N.A., 2.4375%, 5/1/08† | 17,318,269 | ||||||
17,318,269 | Lloyd’s TSB Group PLC, N.A., 2.45%, 5/1/08† | 17,318,269 | ||||||
2,562,264 | Natixis, N.A., 2.38%, 5/1/08† | 2,562,264 | ||||||
17,318,269 | Natixis, N.A., 2.43%, 5/1/08† | 17,318,269 | ||||||
17,318,269 | Nordea Bank Finland PLC, N.A., 2.50%, 5/1/08† | 17,318,269 | ||||||
17095761 | Svenska Handelsbanken, N.A., 2.40%, 5/1/08† | 17,095,761 | ||||||
17,318,269 | Wells Fargo Bank, N.A., 2.375%, 5/1/08† | 17,318,269 | ||||||
Total Other Securities (cost $363,938,696) | 363,938,696 | |||||||
Total Investments (total cost $1,988,767,783) – 117.4% | 2,463,499,857 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (17.4) % | (365,580,839) | |||||||
Net Assets – 100% | $ | 2,097,919,018 | ||||||
See Notes to Schedules of Investments and Financial Statements.
22 Janus Growth Funds April 30, 2008
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Schedule of Investments (unaudited)
As of April 30, 2008
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Australia | $ | 16,605,105 | 0.7% | |||||
Bermuda | 69,043,383 | 2.8% | ||||||
Brazil | 41,912,366 | 1.7% | ||||||
Canada | 17,057,660 | 0.7% | ||||||
Cayman Islands | 17,058,898 | 0.6% | ||||||
Germany | 29,805,941 | 1.2% | ||||||
Guernsey | 31,129,274 | 1.3% | ||||||
Hong Kong | 23,875,442 | 1.0% | ||||||
Ireland | 23,514,021 | 1.0% | ||||||
Japan | 5,052,271 | 0.2% | ||||||
Luxembourg | 13,570,467 | 0.6% | ||||||
Singapore | 11,066,056 | 0.4% | ||||||
United Kingdom | 24,763,106 | 1.0% | ||||||
United States†† | 2,139,045,867 | 86.8% | ||||||
Total | $ | 2,463,499,857 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (67.9% excluding Short-Term Securities and Other Securities) |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2008 23
Table of Contents
Janus Orion Fund (unaudited) | Ticker: JORNX |
Fund Snapshot
This focused growth fund invests in a small number of well-researched companies, hand-picked for their upside potential.
![(JOHN EISINGER PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646peisingj.jpg)
John Eisinger
portfolio manager
Performance Overview
This is my first letter as manager of Janus Orion Fund. I want to start by thanking you for giving me this opportunity to manage your money. I take this responsibility very seriously and am fully committed to finding and investing in quality securities that compound value creation over the long term. For the six-month period ended April 30, 2008, the Fund returned (5.07)% outperforming its primary benchmark, the Russell 3000® Growth Index, which returned (9.68)% and its secondary benchmark, the S&P 500® Index, which returned (9.64)% for the same period.
Investment Philosophy and Process
I officially assumed management of the Fund on January 2, 2008. As this is my first communication with you I thought it would be helpful to talk about my process for managing the Fund. It is managed very similarly to how it always has been. I believe in taking focused positions in a small number of stocks where the investment team and I have a high level of conviction. By uncovering what we see as discrepancies between current stock prices and true intrinsic value through deep, fundamental research, we seek to generate strong, risk-adjusted returns over the long term.
The Fund is a focused growth fund, which means it will typically hold between 20 and 50 stocks with at least 80% invested in the top 20 to 30 positions. Focusing on a core group of holdings is important to me because I believe that is the best way to generate alpha – which means generating returns in excess of its underlying benchmark. The ability to invest with conviction comes from the intensive analysis our research department conduct. The majority of stocks that fall out of this intensive fundamental analysis, and that I am looking to own, fit into two buckets: mis-priced growth and special situations. A mis-priced growth stock results when company-driven change results in higher-than-expected free cash flow growth over the long term. A good example of this between 2004 and 2007 was Apple. Special situations are stocks that are valued in the market based on current financials rather than real asset value or business model potential. An example of this during 2006 and 2007 was information storage company EMC and its VMware subsidiary. Additionally, the Fund may use derivatives, such as buying put options or selling call options, to both hedge market exposure and express views on stocks. Please see the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
The first four months of the year were very volatile. January was dominated by large sell offs in the market and emergency interest rate cuts by the Federal Reserve (Fed). The uncertainty continued in February and March based on the fear surrounding the ability of several large financial institutions to survive the credit crisis and the impact a failure would have on the broader financial market system. The turning point came when the Fed intervened to arrange the sale of Bear Stearns to JPMorgan Chase. This was important, as the failure of Bear Stearns could have had a catastrophic impact on the overall market.
My strategy throughout was an attempt to marry our strong differentiated research views with the extreme market volatility in order to add to or buy new positions in stocks at very attractive prices. I remained focused on stock-specific fundamentals which enabled me to use the overall fear in the market to the Fund’s advantage. The process begins by trying to understand what the downside risk is of a stock. Based on thorough valuation work I need to be confident that the downside risk in a stock is small, especially relative to its upside potential. I then look at where our estimates of future cash flows for the firm are different from the rest of Wall Street. Our ability to add value – to deliver returns over those of the Fund’s benchmark index – is often predicated on having a different view of the value of a company which is based on that company’s ability to generate cash flow over the long term. Another important metric that I focus on is return on invested capital (ROIC), a measure of how effectively a company used the money invested in its operations. I need to see that ROIC will be improving over time. Ideally, I try to buy stocks that are under-earning (cash flow) or under-returning (ROIC) relative to the business’s potential. The catalyst for change could be a new management team, a new product cycle or just a new focus on improving the business by the existing management, etc. The primary valuation method I use is discounted cash flow (DCF) analysis, which is a valuation method used to estimate the attractiveness of an investment opportunity. DCF analysis uses future free cash flow projections and discounts them (most often using the weighted average cost of capital) to arrive at a present value, which is used to evaluate the potential for investment. If the value arrived at through DCF analysis is higher than the current cost of the investment, the opportunity may be a good one. The last important goal of my portfolio management approach is not just picking good stocks, but
24 Janus Growth Funds April 30, 2008
Table of Contents
(unaudited)
putting them together to form a diversified portfolio that maximizes the overall discount to intrinsic value. Stocks I believe have the best risk/reward profiles are at the top of the portfolio – this potentially maximizes the overall Fund’s discount to intrinsic value. To diversify the portfolio I focus on minimizing the correlation of each stock within the portfolio. Again, it’s not enough to just put together undervalued stocks, but rather to try to put together a portfolio of undervalued stocks that together act in different ways in all markets. I believe this is diversification.
With that in mind, I’d like to give you an example of how I applied those guidelines at the start of this year. Celgene is a biotechnology company primarily focused on the discovery and development of cancer treatments and falls into the mis-priced growth bucket. Its main drug is called Revlimid. In October 2007, the stock traded at over $75 per share, but at the beginning of 2008 the stock was trading in the $40s based on what our research showed was incorrect analysis of short-term competitive noise and prescription trends. Based on our analysis I chose to add to the position at what I considered to be very attractive prices.
A stock that fell in the special situations bucket was Cypress Semiconductor (CY). In addition to manufacturing and selling semiconductor devices, it is the majority owner of a leading solar company, SunPower (SPWR). In October 2007, CY was trading at over $40. The stock fell to under $20 on concerns about some of CY’s end markets and in sympathy with the market-driven decline in SPWR. With CY’s stock around $20, and based on our analysis of the value of SPWR, we were able to buy the core CY business practically for free.
Both stocks are examples where we had a differentiated view of company fundamentals and the ability of all three firms to continue to meet our cash flow estimates while the stocks were systematically sold off with the rest of the market.
Contributors to Performance
For the six months ended April 30, 2008, the two largest contributors to performance were Potash Corporation of Saskatchewan and Hess. Potash Corporation is a supplier of several key components of fertilizer. One of the multi-year themes I like is the increasing demand for agricultural products from both changing global diets and demand for non-traditional energy sources. This has driven overall unit demand for key minerals like phosphate significantly higher than recent history. Our research into the supply and demand dynamics of the industry led us to conclude that the company’s ability to increase prices – and the associated incremental cash flow – was substantial and much higher than expected. Our thesis has played out and price increases continued to come in higher than expected leading to further upward estimate revisions and, we believe, continued undervaluation of the stock.
Hess explores, produces, purchases, transports and sells crude oil and natural gas. Our thesis on the company has been that their newer fields in Brazil, Ghana and the Gulf of Mexico were not being valued correctly by the market. Recent data, primarily in Brazil, suggests that the size of the company’s reserves could be substantially greater than previous estimates. The stock has been helped by strong oil prices, but our analysis and valuation is supported by oil prices substantially lower than today’s spot market.
Detractors from Performance
The largest detractors from performance were Yahoo! and National Financial Partners. Yahoo!’s stock has struggled as the competitive environment has become worse, primarily from Google. There have also been internet usage changes as we’ve been seeing increasing use of websites such as Facebook.com. In my opinion, the best option for Yahoo! would be to sell itself to a company like Microsoft. However, waiting for a takeout is not an investment thesis and so I sold the stock at the beginning of the year before the eventual acquisition attempt by Microsoft, which has subsequently fallen through.
National Financial Partners is an independent distributor of financial services products, primarily insurance. The company reported disappointing results during the first quarter which caused the stock to decline substantially.
Outlook
Going forward I plan to look at stocks that have been sold off heavily, especially in areas such as consumer discretionary, financials and technology. As always, I am looking to leverage our strong research team to uncover stocks that have substantial upside relative to downside. I am cognizant of the risks associated with a deteriorating macro-economic environment in the U.S. and the high risks posed by rising global inflation. The process remains the same: Attempt to find and invest in a small number of stocks where we have a differentiated opinion on the value of the business based on cash flows, with limited downside and substantial upside supported by thorough, disciplined and differentiated research.
Thank you for your continued investment in Janus Orion Fund.
Janus Growth Funds April 30, 2008 25
Table of Contents
Janus Orion Fund (unaudited)
Janus Orion Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 1.54% | |||
Hess Corp. | 1.11% | |||
CapitaLand, Ltd. | 0.60% | |||
Cypress Semiconductor Corp. | 0.36% | |||
Companhia Vale do Rio Doce – Preference Shares | 0.33% |
5 Bottom Performers – Holdings
Contribution | ||||
Yahoo!, Inc. | (0.97)% | |||
National Financial Partners Corp. | (0.87)% | |||
Goldman Sachs Group, Inc. | (0.86)% | |||
Trimble Navigation, Ltd. | (0.72)% | |||
VistaPrint, Ltd. | (0.71)% |
5 Top Performers – Sectors
Fund Weighting | Russell 3000® Growth | |||||||||||
Fund Contribution | (% of Net Assets) | Index Weighting | ||||||||||
Materials | 2.38% | 8.23% | 3.60% | |||||||||
Energy | 1.35% | 3.58% | 8.75% | |||||||||
Health Care | 0.11% | 9.74% | 16.42% | |||||||||
Utilities | 0.03% | 0.72% | 1.37% | |||||||||
Consumer Staples | (0.19)% | 5.29% | 10.02% |
5 Bottom Performers – Sectors
Fund Weighting | Russell 3000® Growth | |||||||||||
Fund Contribution | (% of Net Assets) | Index Weighting | ||||||||||
Financials | (2.90)% | 17.36% | 6.97% | |||||||||
Information Technology | (2.76)% | 22.69% | 26.96% | |||||||||
Industrials | (2.14)% | 13.01% | 13.42% | |||||||||
Telecommunication Services | (0.84)% | 10.18% | 0.72% | |||||||||
Consumer Discretionary | (0.34)% | 9.20% | 11.78% |
26 Janus Growth Funds April 30, 2008
Table of Contents
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2008
Celgene Corp. Medical – Biomedical and Genetic | 5.6% | |||
Siemens A.G. Diversified Operations | 5.5% | |||
CVS/Caremark Corp. Retail – Drug Store | 4.5% | |||
Cypress Semiconductor Corp. Semiconductor Components/Integrated Circuits | 4.4% | |||
CapitalSource, Inc. REIT – Diversified | 4.3% | |||
24.3% |
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20p02.gif)
Emerging markets comprised 16.2% of total net assets.
* Includes Securities Sold Short of (2.0)%
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20t02.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20c02.gif)
Janus Growth Funds April 30, 2008 27
Table of Contents
Janus Orion Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20m02.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratio – for the fiscal year ended October 31, 2007 | ||||||||||
Fiscal | One | Five | Since | Total Annual Fund | |||||||
Year-to-Date | Year | Year | Inception* | Operating Expenses | |||||||
Janus Orion Fund | (5.07)% | 20.15% | 23.35% | 3.46% | 0.94% | ||||||
Russell 3000® Growth Index | (9.68)% | (0.79)% | 9.79% | (3.93)% | |||||||
S&P 500® Index | (9.64)% | (4.68)% | 10.62% | 1.08% | |||||||
Lipper Quartile | – | 1st | 1st | 1st | |||||||
Lipper Ranking – based on total return for Multi-Cap Core Funds | – | 10/513 | 1/329 | 35/212 | |||||||
Visit janus.com to view current performance and characteristic information | |||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.)
See important disclosures on the next page.
28 Janus Growth Funds April 30, 2008
Table of Contents
(unaudited)
The Fund’s performance may be affected by risks that include those associated with non-diversification, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and other details.
Funds that invest 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 and interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
Janus Orion Fund held approximately 10.2% of its assets in Brazilian securities as of April 30, 2008 and the Fund has experienced significant gains due, in part, to its investments in Brazil. While holdings are subject to change without notice, the Fund’s returns and NAV may be affected to a large degree by fluctuations in currency exchange rates or political or economic conditions in Brazil.
The use of short sales may cause the Fund to have higher expenses than those of other equity funds. Short sales are speculative transactions and involve special risks, including a greater reliance on the investment team’s ability to accurately anticipate the future value of a security. The Fund’s losses are potentially unlimited in a short sale transaction. The Fund’s use of short sales in effect leverages the Fund’s portfolio. The Fund’s use of leverage may result in risks and can magnify the effect of any losses. There is no assurance that a leveraging strategy will be successful.
Returns include reinvestment of dividends from investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – June 30, 2000 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 949.30 | $ | 4.46 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.29 | $ | 4.62 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.92%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
Janus Growth Funds April 30, 2008 29
Table of Contents
Janus Orion Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares/Principal/Contract Amounts | Value | |||||||
Common Stock – 93.8% | ||||||||
Advertising Sales – 1.7% | ||||||||
2,255,240 | Lamar Advertising Co. – Class A*,# | $ | 89,172,190 | |||||
Aerospace and Defense – 1.8% | ||||||||
2,290,525 | Embraer-Empresa Brasileira de Aeronautica S.A. (ADR)** | 95,469,082 | ||||||
Agricultural Chemicals – 3.9% | ||||||||
406,665 | Intrepid Potash, Inc.*,# | 19,312,521 | ||||||
987,140 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 181,584,403 | ||||||
200,896,924 | ||||||||
Audio and Video Products – 0% | ||||||||
25 | Sony Corp.** | 1,146 | ||||||
Automotive – Cars and Light Trucks – 2.0% | ||||||||
1,852,425 | BMW A.G.**,# | 101,390,758 | ||||||
Building – Heavy Construction – 1.2% | ||||||||
26,693,260 | YTL Corporation Berhad | 63,303,539 | ||||||
Building – Residential and Commercial – 0.8% | ||||||||
360,135 | Desarrolladora Homex S.A. (ADR)*,# | 21,456,843 | ||||||
2,193,969 | Rossi Residencial S.A. | 21,692,791 | ||||||
43,149,634 | ||||||||
Cable Television – 1.6% | ||||||||
97,953 | Jupiter Telecommunications Company, Ltd.** | 84,878,348 | ||||||
Cellular Telecommunications – 3.0% | ||||||||
2,701,155 | America Movil S.A. de C.V. – Series L (ADR) | 156,558,944 | ||||||
Chemicals – Diversified – 1.0% | ||||||||
131,250 | K+S A.G.** | 54,395,698 | ||||||
Commercial Banks – 2.2% | ||||||||
8,419,262 | Anglo Irish Bank Corporation PLC** | 114,731,410 | ||||||
Commercial Services – 0.7% | ||||||||
805,748 | CoStar Group, Inc.* | 38,635,617 | ||||||
Computers – 3.5% | ||||||||
1,487,540 | Research In Motion, Ltd. (U.S. Shares)* | 180,929,490 | ||||||
Diversified Minerals – 3.4% | ||||||||
5,404,961 | Companhia Vale do Rio Doce – Preference Shares | 174,310,561 | ||||||
Diversified Operations – 7.6% | ||||||||
21,886,000 | China Merchants Holdings International Company, Ltd. | 111,702,095 | ||||||
2,407,921 | Siemens A.G.** | 285,326,874 | ||||||
397,028,969 | ||||||||
Electronic Measuring Instruments – 2.2% | ||||||||
3,446,750 | Trimble Navigation, Ltd.*,£ | 113,018,933 | ||||||
Energy – Alternate Sources – 1.7% | ||||||||
3,681,130 | JA Solar Holdings Company, Ltd. (ADR)* | 88,383,931 | ||||||
Engineering – Research and Development Services – 1.6% | ||||||||
2,714,398 | ABB, Ltd. | 83,234,936 | ||||||
Finance – Investment Bankers/Brokers – 1.9% | ||||||||
502,075 | Goldman Sachs Group, Inc.** | 96,082,093 | ||||||
Finance – Other Services – 1.4% | ||||||||
3,008,720 | BM&F (Bolsa de Mercadorias e Futuros) | 30,056,419 | ||||||
93,805 | CME Group, Inc.# | 42,911,098 | ||||||
72,967,517 | ||||||||
Internet Gambling – 0.3% | ||||||||
34,899,351 | PartyGaming PLC* | 16,642,187 | ||||||
Investment Management and Advisory Services – 0.9% | ||||||||
1,733,493 | National Financial Partners Corp. | 46,665,632 | ||||||
Machinery – General Industrial – 0.5% | ||||||||
43,704,000 | Shanghai Electric Group Company, Ltd.# | 24,648,206 | ||||||
Medical – Biomedical and Genetic – 5.6% | ||||||||
4,666,652 | Celgene Corp.* | 289,985,754 | ||||||
Medical Instruments – 0.8% | ||||||||
148,785 | Intuitive Surgical, Inc.*,** | 43,037,549 | ||||||
Oil Companies – Integrated – 4.5% | ||||||||
1,152,895 | Hess Corp.**,# | 122,437,449 | ||||||
1,647,324 | Petroleo Brasileiro S.A. | 50,162,240 | ||||||
486,330 | Petroleo Brasileiro S.A. (ADR) | 59,050,189 | ||||||
231,649,878 | ||||||||
Paper and Related Products – 1.2% | ||||||||
7,779,360 | Aracruz Celulose S.A. | 62,732,999 | ||||||
Printing – Commercial – 1.8% | ||||||||
2,733,732 | VistaPrint, Ltd.*,#,£ | 93,028,900 | ||||||
Real Estate Management/Services – 1.1% | ||||||||
757,395 | Jones Lang LaSalle, Inc.**,# | 58,781,426 | ||||||
Real Estate Operating/Development – 5.2% | ||||||||
38,730,000 | CapitaLand, Ltd. | 195,256,651 | ||||||
18,489,000 | Hang Lung Properties, Ltd. | 75,322,391 | ||||||
270,579,042 | ||||||||
REIT – Diversified – 4.3% | ||||||||
15,858,846 | CapitalSource, Inc.#,£ | 222,816,786 | ||||||
Retail – Apparel and Shoe – 1.8% | ||||||||
2,669,825 | Nordstrom, Inc.# | 94,138,030 | ||||||
Retail – Drug Store – 4.5% | ||||||||
5,777,070 | CVS/Caremark Corp.** | 233,220,316 | ||||||
Semiconductor Components/Integrated Circuits – 4.4% | ||||||||
8,175,485 | Cypress Semiconductor Corp.*,**,£ | 229,894,638 | ||||||
Telecommunication Equipment – Fiber Optics – 2.2% | ||||||||
4,228,830 | Corning, Inc.** | 112,952,049 | ||||||
Telecommunication Services – 2.4% | ||||||||
4,434,645 | NeuStar, Inc. – Class A*,**,#,£ | 121,997,084 | ||||||
Telephone – Integrated – 0.6% | ||||||||
1,169,805 | GVT Holdings S.A.* | 28,511,225 | ||||||
Transportation – Railroad – 1.1% | ||||||||
4,234,347 | All America Latina Logistica (GDR) | 55,295,980 | ||||||
Web Hosting/Design – 1.2% | ||||||||
686,365 | Equinix, Inc.*,# | 62,061,123 | ||||||
Web Portals/Internet Service Providers – 2.1% | ||||||||
187,405 | Google, Inc. – Class A*,** | 107,624,817 | ||||||
Wireless Equipment – 4.1% | ||||||||
5,535,042 | Crown Castle International Corp.*,** | 215,036,382 | ||||||
Total Common Stock (cost $4,109,576,959) | 4,869,839,723 | |||||||
See Notes to Schedules of Investments and Financial Statements.
30 Janus Growth Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares/Principal/Contract Amounts | Value | |||||||
Purchased Options – Calls – 0.7% | ||||||||
4,100 | Apple, Inc. expires January 2009 exercise price $170.00** | $ | 11,808,000 | |||||
20,097 | CVS/Caremark Corp. (LEAPS) expires January 2010 exercise price $40.00 | 13,134,997 | ||||||
16,599 | Intel Corp. expires January 2009 exercise price $17.50** | 9,046,455 | ||||||
9,940 | Intel Corp. expires January 2009 exercise price $20.00** | 3,677,800 | ||||||
Total Purchased Options – Calls (premiums paid $25,600,836) | 37,667,252 | |||||||
Purchased Options – Puts – 0% | ||||||||
20,097 | CVS/Caremark Corp. (LEAPS) expires January 2010 exercise price $25.00 (premiums paid $3,647,606) | 1,376,645 | ||||||
Money Markets – 5.4% | ||||||||
122,437,860 | Janus Institutional Cash Management Fund – Institutional Shares, 2.82% | 122,437,860 | ||||||
156,047,310 | Janus Institutional Money Market Fund – Institutional Shares, 2.74% | 156,047,310 | ||||||
Total Money Markets (cost $278,485,170) | 278,485,170 | |||||||
Other Securities – 9.0% | ||||||||
148,777,877 | Allianz Dresdner Daily Asset Fund† | 148,777,877 | ||||||
78,501,834 | Repurchase Agreements† | 78,501,834 | ||||||
238,919,596 | Time Deposits† | 238,919,596 | ||||||
Total Other Securities (cost $466,199,307) | 466,199,307 | |||||||
Total Investments (total cost $4,883,509,878) – 108.9% | 5,653,568,097 | |||||||
Securities Sold Short – (2.0)% | ||||||||
Computers – (1.0)% | ||||||||
413,645 | IBM Corp. | (49,926,951) | ||||||
Sector Fund – Energy – (1.0)% | ||||||||
354,845 | iShares S&P Global Energy Sector Index Fund | (51,778,982) | ||||||
Total Securities Sold Short (proceeds $99,548,410) | (101,705,933) | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (6.9)%** | (360,163,405) | |||||||
Net Assets – 100% | $ | 5,191,698,759 | ||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 93,028,900 | 1.6% | |||||
Brazil | 577,281,486 | 10.2% | ||||||
Canada | 362,513,893 | 6.4% | ||||||
Cayman Islands | 88,383,931 | 1.6% | ||||||
China | 24,648,206 | 0.4% | ||||||
Germany | 441,113,331 | 7.8% | ||||||
Gibraltar | 16,642,187 | 0.3% | ||||||
Hong Kong | 187,024,486 | 3.3% | ||||||
Ireland | 114,731,410 | 2.0% | ||||||
Japan | 84,879,495 | 1.5% | ||||||
Malaysia | 63,303,539 | 1.1% | ||||||
Mexico | 178,015,787 | 3.2% | ||||||
Singapore | 195,256,651 | 3.5% | ||||||
Switzerland | 83,234,935 | 1.5% | ||||||
United States†† | 3,143,509,860 | 55.6% | ||||||
Total | $ | 5,653,568,097 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (42.4% excluding Short-Term Securities and Other Securities) |
Summary of Investments by Country – (Short Positions)
% of Securities | ||||||||
Country | Value | Sold Short | ||||||
United States | $ | (101,705,933) | 100.0% | |||||
Total | $ | (101,705,933) | 100.0% |
Forward Currency Contracts, Open
Currency Sold and | Currency | Currency | Unrealized | |||||||||
Settlement Date | Units Sold | Value in U.S. $ | Gain/(Loss) | |||||||||
British Pound 11/12/08 | 8,000,000 | $ | 15,685,555 | $ | (158,436) | |||||||
Euro 10/16/08 | 28,000,000 | 43,362,389 | 502,971 | |||||||||
Euro 10/23/08 | 142,000,000 | 219,832,515 | (669,715) | |||||||||
Euro 11/12/08 | 90,000,000 | 139,201,849 | 105,552 | |||||||||
Japanese Yen 10/23/08 | 5,500,000,000 | 53,404,858 | (408,133) | |||||||||
Total | $ | 471,487,166 | $ | (627,761) |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2008 31
Table of Contents
Janus Orion Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Schedule of Written Options – Calls | Value | |||
Apple, Inc. expires January 2009 4,100 contracts exercise price $220.00 | $ | (4,694,500) | ||
Google, Inc. – Class A expires January 2009 1,760 contracts exercise price $700.00 | (5,253,600) | |||
Intel Corp. expires January 2009 26,539 contracts exercise price $25.00 | (3,450,070) | |||
Russell 1000® Growth Index expires July 2008 4,067 contracts exercise price $610.65 | (2,667,952) | |||
S&P 500® Index expires May 2008 1,720 contracts exercise price $1,440.00 | (765,400) | |||
S&P 500® Index expires May 2008 1,709 contracts exercise price $1,450.00 | (512,700) | |||
S&P 500® Index expires July 2008 192,696 contracts exercise price $1,417.52 | (6,645,064) | |||
Total Written Options – Calls | ||||
(Premiums received $16,039,035) | $ | (23,989,286) | ||
Schedule of Written Options – Puts | ||||
CVS/Caremark Corp. (LEAPS) expires January 2010 20,097 contracts exercise price $30.00 | $ | (3,034,848) | ||
Google, Inc. – Class A expires January 2009 1,760 contracts exercise price $400.00 | (1,865,600) | |||
Intel Corp. expires January 2009 26,539 contracts exercise price $15.00 | (1,061,560) | |||
Total Written Options – Puts | ||||
(Premiums received $12,825,505) | $ | (5,962,008) | ||
See Notes to Schedules of Investments and Financial Statements.
32 Janus Growth Funds April 30, 2008
Table of Contents
Janus Research Fund (unaudited) | Ticker: JAMRX |
Fund Snapshot
This fund provides investors with broad exposure to what our research team feels are the most dynamic growth opportunities, regardless of company size.
Team Based Approach
Led by Jim Goff
Director of Research
Led by Jim Goff
Director of Research
Performance Overview
For the six-month period ended April 30, 2008, Janus Research Fund returned (7.02)%, outperforming its primary benchmark, the Russell 1000® Growth Index, which returned (9.28)% and its secondary benchmark, the S&P 500® Index, which returned (9.64)%.
Economic Overview
Turmoil in the credit markets, uncertainty surrounding the near-term outlook for the U.S. economy and a weaker corporate profit picture made for a volatile and difficult market environment over the past several months. While sentiment toward the end of the period improved and U.S. equity markets finished well above the mid-March lows, stocks were broadly lower during the six-month period ended April 30, 2008.
Additional subprime-related write-offs, slowing consumer spending and a softening labor market, accompanied by record commodity prices and rising inflation expectations weighed on investor sentiment during the period. Stocks reached their lows in mid-March. Financial markets stabilized somewhat after the Federal Reserve (Fed) aggressively lowered the Federal Funds rate, expanded the collateral it would accept and played an instrumental role in JP Morgan Chase’s purchase of Bear Stearns. In the end, the Fed lowered its target interest rate from 4.50% to 2.00% during the period.
Overall, mid-cap stocks performed better than large- and small-cap stocks, while growth outperformed value stocks. For the broad market all sectors declined with the exception of energy, which turned in a gain for the six-month period amid record crude oil prices. Meanwhile, financials were the worst performing group, suffering from turmoil in the credit markets and larger-than-expected subprime-related write-downs. Information technology was also among the weakest performers while defensive sectors, like consumer staples, posted small declines.
Since February 1, 2006, Janus Research Fund has been team managed, representing the best ideas from Janus’ more than 30 equity analysts and Director of Research Jim Goff oversees the team. Individual analysts primarily drive stock selection, with debate and oversight provided by each one of the seven global sector research teams. We believe there is great power in individual analysts driving investment decisions, as they are most familiar with the stocks they cover. We strive to keep the Fund sector-neutral compared to its primary benchmark, although the Fund has about a 29% non-U.S. exposure. The Fund may also use total return swaps to fully utilize the research process. (Please see “Notes to Financial Statements” for discussion of various hedging techniques used.) The focus is on consistency and on capturing the value of Janus’ research.
Contributors to Fund Performance
The Fund’s outperformance can be attributed to holdings in the energy and industrials sectors. Industrials company Owens-Illinois added to performance as the transformation at this glass container manufacturer continued to produce strong results. The company reported solid performance at the end of 2007 including the positive margin impact of price increases in a moderating cost environment. We believe these powerful economics coupled with management’s continued emphasis on cost control and returns on invested capital should benefit the stock price. Although we believe there is continued upside for Owens-Illinois, we trimmed the position during the period as we think the restructuring plan is increasingly being reflected in the valuation.
Energy company Hess, an addition to the Fund during the period, was one of the top contributors to performance. The company benefited from the rising price of oil during the period, as well as increased appreciation for the future production potential from Hess’ new projects, including deep water projects in the Gulf of Mexico and off the coast of Brazil.
EOG Resources, an oil and gas company, was another strong individual contributor. Looking ahead, EOG has rights to shale formations in Canada, which are similar to its Texas formations. We believe this could be an attractive opportunity for EOG to increase its gas reserves.
Canada-based Potash Corporation of Saskatchewan moved ahead, aided by continued demand and tight supplies. The company continued to benefit from global demand for agricultural products, which we expect will drive further growth in revenue and earnings industry wide. Potash itself is a critical ingredient used in fertilizers for key farming areas like the U.S., Brazil and China. Price increases for the commodity have been enacted for 2008 in many regions, which led to upward revisions in analysts’ estimates and provided a further tailwind for the company’s stock price.
Janus Growth Funds April 30, 2008 33
Table of Contents
Janus Research Fund (unaudited)
Detractors from Fund Performance
Technology and communications sectors were the main areas of weakness during the period. SiRF Technology Holdings, a supplier of semiconductors used in global positioning systems, was the largest detractor of Fund performance during the period. The stock declined after reporting weaker-than-expected margins in its most recent quarter. A central component of our thesis had been the company’s competitive positioning, but the eroding margins suggested to us that the company’s competitive positioning wasn’t as sustainable as originally thought and we exited the position.
Within communications, data center and information technology (IT) services provider SAVVIS suffered on concerns that increasing supply in the industry could hamper further growth prospects, that IT spending could be reduced in an economic slowdown and mis-steps by management in setting investors expectations. Longer term, we believe SAVVIS is well-positioned to take advantage of increased out-sourcing of non-core IT infrastructure. In addition, we think this recurring revenue business will benefit from pricing power and high incremental margins.
Industrials holding General Electric (GE) was also negatively impacted by the weakening economy. GE stock fell after reporting weaker-than-expected profits from its GE Capital division due to capital market disruptions and the inability to complete asset sales. Given our cautious outlook on the credit markets, we chose to exit our position.
Another detractor during the period was pharmaceutical company Merck. Performance at Merck was driven largely by a report from the American College of Cardiology suggesting that doctors should limit prescriptions for the company’s jointly sold (with Schering-Plough) cholesterol drugs. The report stated that older, cheaper drugs could be just as effective. Last year, the two drug makers sold $5.2 billion of Vytorin and Zetia, combined. We will be watching the developments of Merck closely in the coming months.
Outlook
The Fund remains sector-neutral and we expect stock selection to be a key driver of returns going forward. Volatile markets tend to give many investors a reason to focus on the short term. Therefore, we believe we will see many opportunities for long-term investors to purchase good businesses at attractive prices. Looking ahead, we will continue to invest with conviction in areas where we feel we can develop an edge through research. Through our valuation discipline and focus on risk management, we remain committed to delivering superior long-term results for our clients.
Thank you for your investment in Janus Research Fund.
34 Janus Growth Funds April 30, 2008
Table of Contents
(unaudited)
Janus Research Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Owens-Illinois, Inc. | 0.62% | |||
Hess Corp. | 0.62% | |||
EOG Resources, Inc. | 0.48% | |||
JA Solar Holdings Company, Ltd. (ADR) | 0.43% | |||
Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 0.42% |
5 Bottom Performers – Holdings
Contribution | ||||
SiRF Technology Holdings, Inc. | (0.91)% | |||
SAVVIS, Inc. | (0.56)% | |||
General Electric Co. | (0.52)% | |||
Amylin Pharmaceuticals, Inc. | (0.49)% | |||
Merck & Company, Inc. | (0.49)% |
4 Top Performers – Sectors**
Fund Weighting | Russel 1000® | |||||||||||
Fund Contribution | (% of Net Assets) | Growth Index Weighting | ||||||||||
Energy | 0.62% | 10.93% | 10.28% | |||||||||
Industrials | 0.55% | 18.12% | 17.45% | |||||||||
Other* | 0.01% | 0.16% | 0.00% | |||||||||
Consumer | (0.93)% | 16.78% | 16.48% |
4 Bottom Performers – Sectors**
Fund Weighting | Russel 1000® | |||||||||||
Fund Contribution | (% of Net Assets) | Growth Index Weighting | ||||||||||
Technology | (2.89)% | 24.63% | 24.32% | |||||||||
Communications | (1.46)% | 6.93% | 7.34% | |||||||||
Health Care | (1.33)% | 16.21% | 16.96% | |||||||||
Financials | (1.13)% | 6.23% | 7.17% |
* | Industry not classified by Global Classification Standard. | |
** | The sectors listed above represent those covered by the seven analyst teams who comprise the Janus Research Team. |
Janus Growth Funds April 30, 2008 35
Table of Contents
Janus Research Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2008
JA Solar Holdings Company, Ltd. (ADR) Energy – Alternate Sources | 2.4% | |||
Celgene Corp. Medical – Biomedical and Genetic | 2.0% | |||
Hess Corp. Oil Companies – Integrated | 2.0% | |||
Cypress Semiconductor Corp. Semiconductor Components/Integrated Circuits | 2.0% | |||
Apple, Inc. Computers | 1.9% | |||
10.3% |
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20p03.gif)
Emerging markets comprised 6.9% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20t03.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20c03.gif)
36 Janus Growth Funds April 30, 2008
Table of Contents
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20m03.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratio – for the fiscal year ended October 31, 2007 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Research Fund | (7.02)% | 6.41% | 13.95% | 7.01% | 12.58% | 1.01% | |||||||
Russell 1000® Growth Index | (9.28)% | (0.23)% | 9.52% | 1.66% | 8.37% | ||||||||
S&P 500® Index | (9.64)% | (4.68)% | 10.62% | 3.89% | 9.95% | ||||||||
Lipper Quartile | – | 1st | 1st | 1st | 1st | ||||||||
Lipper Ranking – based on total return for Large-Cap Growth Funds | – | 141/748 | 14/528 | 7/250 | 2/79 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The Fund has a performance-based management fee that adjusts up or down based on the Fund’s performance relative to an approved benchmark index over a performance measurement period.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.)
See important disclosures on the next page.
Janus Growth Funds April 30, 2008 37
Table of Contents
Janus Research Fund (unaudited)
The Fund’s performance may be affected by risks that include those associated with, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and other details.
Funds that invest 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 and interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
Returns include reinvestment of dividends from investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
May 6, 1993 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – May 3, 1993 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 929.80 | $ | 5.04 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.64 | $ | 5.27 | ||||||||
† | Expenses are equal to the annualized expense ratio of 1.05%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
38 Janus Growth Funds April 30, 2008
Table of Contents
Janus Research Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Common Stock – 99.4% | ||||||||
Advertising Sales – 0.7% | ||||||||
779,840 | Lamar Advertising Co. – Class A*,# | $ | 30,834,874 | |||||
Aerospace and Defense – 3.8% | ||||||||
1,280,560 | Embraer-Empresa Brasileira de Aeronautica S.A. (ADR) | 53,373,741 | ||||||
746,235 | Northrop Grumman Corp. | 54,900,509 | ||||||
1,985,195 | Spirit Aerosystems Holdings, Inc.* | 57,908,137 | ||||||
166,182,387 | ||||||||
Agricultural Chemicals – 1.3% | ||||||||
317,605 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 58,423,440 | ||||||
Agricultural Operations – 1.0% | ||||||||
400,240 | Bunge, Ltd.# | 45,663,382 | ||||||
Apparel Manufacturers – 0.3% | ||||||||
1,162,800 | Esprit Holdings, Ltd. | 14,330,122 | ||||||
Applications Software – 1.5% | ||||||||
586,761 | Infosys Technologies, Ltd. | 25,353,383 | ||||||
1,350,805 | Microsoft Corp. | 38,524,959 | ||||||
63,878,342 | ||||||||
Athletic Footwear – 1.3% | ||||||||
827,195 | NIKE, Inc. – Class B | 55,256,626 | ||||||
Audio and Video Products – 1.3% | ||||||||
1,186,200 | Sony Corp.** | 54,382,991 | ||||||
Brewery – 0.6% | ||||||||
307,596 | InBev N.V.** | 25,336,818 | ||||||
Building – Residential and Commercial – 1.2% | ||||||||
82,355 | NVR, Inc.*,# | 50,524,793 | ||||||
Building and Construction Products – Miscellaneous – 1.2% | ||||||||
1,523,265 | USG Corp.*,# | 53,786,487 | ||||||
Casino Hotels – 2.0% | ||||||||
2,667,573 | Crown, Ltd. | 27,524,252 | ||||||
4,598,080 | Melco PBL Entertainment (Macau), Ltd. (ADR)*,# | 60,694,656 | ||||||
88,218,908 | ||||||||
Cellular Telecommunications – 0.8% | ||||||||
598,835 | America Movil S.A. de C.V. – Series L (ADR) | 34,708,477 | ||||||
Chemicals – Diversified – 0.7% | ||||||||
356,991 | Bayer A.G.** | 30,352,756 | ||||||
Computers – 3.2% | ||||||||
478,091 | Apple, Inc.* | 83,163,929 | ||||||
1,181,555 | Hewlett-Packard Co. | 54,765,074 | ||||||
137,929,003 | ||||||||
Containers – Metal and Glass – 2.7% | ||||||||
2,006,195 | Crown Holdings, Inc.* | 53,846,274 | ||||||
1,189,070 | Owens-Illinois, Inc.*,**,# | 65,577,210 | ||||||
119,423,484 | ||||||||
Cosmetics and Toiletries – 1.5% | ||||||||
1,639,565 | Avon Products, Inc. | 63,975,826 | ||||||
Decision Support Software – 0.2% | ||||||||
258,684 | MSCI, Inc.* | 8,024,378 | ||||||
Diversified Operations – 4.8% | ||||||||
1,222,565 | Cooper Industries, Ltd. – Class A | 51,824,530 | ||||||
671,660 | Danaher Corp. | 52,402,913 | ||||||
1,108,335 | Ingersoll-Rand Co. – Class A | 49,187,907 | ||||||
464,462 | Siemens A.G.** | 55,036,478 | ||||||
208,451,828 | ||||||||
Drug Delivery Systems – 1.1% | ||||||||
1,199,850 | Hospira, Inc.* | 49,373,828 | ||||||
Electric – Generation – 1.8% | ||||||||
4,569,295 | AES Corp.* | 79,322,961 | ||||||
Electronic Components – Semiconductors – 2.9% | ||||||||
14,207,566 | ARM Holdings PLC** | 28,229,611 | ||||||
1,206,025 | Microsemi Corp.*,# | 29,547,613 | ||||||
92,986 | Samsung Electronics Company, Ltd.** | 66,216,396 | ||||||
123,993,620 | ||||||||
Energy – Alternate Sources – 2.4% | ||||||||
4,360,449 | JA Solar Holdings Company, Ltd. (ADR)*,# | 104,694,380 | ||||||
Enterprise Software/Services – 1.2% | ||||||||
2,526,330 | Oracle Corp.* | 52,673,981 | ||||||
Entertainment Software – 1.1% | ||||||||
919,514 | Electronic Arts, Inc.* | 47,327,386 | ||||||
Finance – Credit Card – 0.3% | ||||||||
295,160 | American Express Co. | 14,173,583 | ||||||
Finance – Investment Bankers/Brokers – 0.9% | ||||||||
675,020 | JP Morgan Chase & Co. | 32,164,703 | ||||||
420,197 | optionsXpress Holdings, Inc.# | 9,021,630 | ||||||
41,186,333 | ||||||||
Finance – Mortgage Loan Banker – 0.8% | ||||||||
1,171,835 | Fannie Mae | 33,162,931 | ||||||
Finance – Other Services – 0.7% | ||||||||
66,325 | CME Group, Inc. | 30,340,371 | ||||||
Food – Miscellaneous/Diversified – 1.4% | ||||||||
1,300,991 | Kraft Foods, Inc. – Class A | 41,150,345 | ||||||
45,656 | Nestle S.A.** | 21,877,559 | ||||||
63,027,904 | ||||||||
Food – Retail – 0.3% | ||||||||
1,748,572 | Tesco PLC** | 14,777,792 | ||||||
Independent Power Producer – 1.2% | ||||||||
1,146,522 | NRG Energy, Inc.* | 50,389,642 | ||||||
Investment Management and Advisory Services – 0.6% | ||||||||
942,015 | National Financial Partners Corp. | 25,359,044 | ||||||
Medical – Biomedical and Genetic – 2.8% | ||||||||
1,413,357 | Celgene Corp.* | 87,826,004 | ||||||
452,709 | Genzyme Corp.* | 31,848,078 | ||||||
119,674,082 | ||||||||
Medical – Drugs – 2.7% | ||||||||
1,556,640 | Merck & Company, Inc. | 59,214,586 | ||||||
200,523 | Roche Holding A.G.** | 33,399,027 | ||||||
438,100 | Shire PLC (ADR)**,# | 24,069,214 | ||||||
116,682,827 | ||||||||
Medical – HMO – 1.8% | ||||||||
1,760,502 | Coventry Health Care, Inc.* | 78,747,254 | ||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2008 39
Table of Contents
Janus Research Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Medical Instruments – 1.2% | ||||||||
1,231,280 | St. Jude Medical, Inc.* | $ | 53,905,438 | |||||
Medical Products – 0.5% | ||||||||
320,665 | Zimmer Holdings, Inc.* | 23,780,516 | ||||||
Multimedia – 1.4% | ||||||||
693,100 | McGraw-Hill Companies, Inc. | 28,410,169 | ||||||
1,835,640 | News Corporation, Inc. – Class A | 32,857,956 | ||||||
61,268,125 | ||||||||
Networking Products – 1.6% | ||||||||
2,649,340 | Cisco Systems, Inc.*,** | 67,929,078 | ||||||
Oil and Gas Drilling – 1.0% | ||||||||
1,102,865 | Nabors Industries, Ltd.* | 41,401,552 | ||||||
Oil Companies – Exploration and Production – 1.2% | ||||||||
412,199 | EOG Resources, Inc. | 53,783,726 | ||||||
Oil Companies – Integrated – 3.1% | ||||||||
814,710 | Hess Corp. | 86,522,202 | ||||||
404,665 | Petroleo Brasileiro S.A. (ADR) | 49,134,424 | ||||||
135,656,626 | ||||||||
Oil Field Machinery and Equipment – 0.6% | ||||||||
506,199 | Cameron International Corp.* | 24,920,177 | ||||||
Oil Refining and Marketing – 2.7% | ||||||||
1,117,769 | Reliance Industries, Ltd. | 72,014,573 | ||||||
900,175 | Valero Energy Corp. | 43,973,549 | ||||||
115,988,122 | ||||||||
Optical Supplies – 0.6% | ||||||||
157,020 | Alcon, Inc. (U.S. Shares)** | 24,809,160 | ||||||
Physician Practice Management – 1.2% | ||||||||
749,555 | Pediatrix Medical Group, Inc.* | 50,984,731 | ||||||
Real Estate Management/Services – 0.3% | ||||||||
507,000 | Mitsubishi Estate Company, Ltd.** | 14,624,147 | ||||||
Real Estate Operating/Development – 1.7% | ||||||||
4,869,000 | CapitaLand, Ltd. | 24,546,983 | ||||||
9,606,000 | Hang Lung Properties, Ltd. | 39,133,911 | ||||||
208,667 | St. Joe Co.# | 8,486,487 | ||||||
72,167,381 | ||||||||
Reinsurance – 0.9% | ||||||||
8,326 | Berkshire Hathaway, Inc. – Class B* | 37,108,982 | ||||||
REIT – Diversified – 0.4% | ||||||||
1,192,522 | CapitalSource, Inc.# | 16,754,934 | ||||||
Retail – Apparel and Shoe – 2.5% | ||||||||
777,510 | Abercrombie & Fitch Co. – Class A# | 57,776,768 | ||||||
257,229 | Industria de Diseno Textil S.A.** | 14,056,972 | ||||||
1,089,810 | Nordstrom, Inc. | 38,426,701 | ||||||
110,260,441 | ||||||||
Retail – Consumer Electronics – 0.3% | ||||||||
149,620 | Yamada Denki Company, Ltd.** | 12,910,689 | ||||||
Retail – Drug Store – 1.8% | ||||||||
1,923,725 | CVS/Caremark Corp. | 77,660,778 | ||||||
Retail – Jewelry – 1.0% | ||||||||
1,025,520 | Tiffany & Co. | 44,651,141 | ||||||
Retail – Restaurants – 1.2% | ||||||||
199,320 | Chipotle Mexican Grill, Inc. – Class B* | 16,936,220 | ||||||
574,085 | McDonald’s Corp. | 34,203,985 | ||||||
51,140,205 | ||||||||
Semiconductor Components/Integrated Circuits – 4.2% | ||||||||
9,305,195 | Atmel Corp.* | 34,615,325 | ||||||
3,058,250 | Cypress Semiconductor Corp.* | 85,997,989 | ||||||
4,681,465 | Marvell Technology Group, Ltd.* | 60,624,972 | ||||||
181,238,286 | ||||||||
Semiconductor Equipment – 1.2% | ||||||||
1,164,995 | KLA-Tencor Corp. | 50,886,982 | ||||||
Telecommunication Equipment – 2.1% | ||||||||
4,638,465 | Arris Group, Inc.*,# | 37,571,567 | ||||||
1,116,980 | CommScope, Inc.* | 53,112,399 | ||||||
90,683,966 | ||||||||
Telecommunication Equipment – Fiber Optics – 1.5% | ||||||||
2,401,295 | Corning, Inc. | 64,138,589 | ||||||
Telecommunication Services – 2.2% | ||||||||
1,388,485 | Amdocs, Ltd. (U.S. Shares)* | 43,570,659 | ||||||
1,102,250 | SAVVIS, Inc.*,# | 16,147,963 | ||||||
1,730,734 | Time Warner Telecom, Inc. – Class A*,# | 33,922,386 | ||||||
93,641,008 | ||||||||
Television – 0.7% | ||||||||
2,844,256 | British Sky Broadcasting Group PLC** | 30,677,166 | ||||||
Therapeutics – 0.7% | ||||||||
597,193 | Gilead Sciences, Inc.* | 30,910,710 | ||||||
Tobacco – 1.5% | ||||||||
1,778,432 | Altria Group, Inc. | 35,568,640 | ||||||
577,647 | Philip Morris International, Inc.* | 29,477,326 | ||||||
65,045,966 | ||||||||
Toys – 0.7% | ||||||||
1,548,805 | Mattel, Inc. | 29,040,094 | ||||||
Transportation – Services – 2.0% | ||||||||
536,120 | C.H. Robinson Worldwide, Inc. | 33,604,002 | ||||||
751,495 | United Parcel Service, Inc. – Class B | 54,415,753 | ||||||
88,019,755 | ||||||||
Web Portals/Internet Service Providers – 0.7% | ||||||||
54,440 | Google, Inc. – Class A* | 31,264,348 | ||||||
Wireless Equipment – 2.6% | ||||||||
1,255,255 | Crown Castle International Corp.* | 48,766,657 | ||||||
1,007,580 | QUALCOMM, Inc. | 43,517,380 | ||||||
8,227,856 | Telefonaktiebolaget L.M. Ericsson – Class B | 20,969,712 | ||||||
113,253,749 | ||||||||
Total Common Stock (cost $3,884,044,406) | 4,315,099,409 | |||||||
Money Markets – 1.4% | ||||||||
61,741,991 | Janus Institutional Cash Management Fund – Institutional Shares, 2.82% | 61,741,991 | ||||||
303,000 | Janus Institutional Money Market Fund – Institutional Shares, 2.74% | 303,000 | ||||||
Total Money Markets (cost $62,044,991) | 62,044,991 | |||||||
Other Securities – 6.1% | ||||||||
119,003,707 | Allianz Dresdner Daily Asset Fund† | 119,003,707 | ||||||
35,642,846 | Repurchase Agreements† | 35,642,846 |
See Notes to Schedules of Investments and Financial Statements.
40 Janus Growth Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Other Securities – (continued) | ||||||||
108,923,839 | Time Deposits† | $ | 108,923,839 | |||||
Total Other Securities (cost $263,570,392) | 263,570,392 | |||||||
Total Investments (total cost $4,209,659,789) – 106.9% | 4,640,714,792 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (6.9)%** | (298,871,492) | |||||||
Net Assets – 100% | $ | 4,341,843,300 | ||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Australia | $ | 27,524,252 | 0.6% | |||||
Belgium | 25,336,818 | 0.5% | ||||||
Bermuda | 263,032,465 | 5.7% | ||||||
Brazil | 102,508,165 | 2.2% | ||||||
Canada | 58,423,440 | 1.3% | ||||||
Cayman Islands | 165,389,037 | 3.6% | ||||||
Germany | 85,389,234 | 1.8% | ||||||
Guernsey | 43,570,659 | 0.9% | ||||||
Hong Kong | 39,133,911 | 0.8% | ||||||
India | 97,367,957 | 2.1% | ||||||
Japan | 81,917,827 | 1.8% | ||||||
Mexico | 34,708,477 | 0.8% | ||||||
Singapore | 24,546,982 | 0.5% | ||||||
South Korea | 66,216,397 | 1.4% | ||||||
Spain | 14,056,972 | 0.3% | ||||||
Sweden | 20,969,712 | 0.5% | ||||||
Switzerland | 80,085,746 | 1.7% | ||||||
United Kingdom | 97,753,783 | 2.1% | ||||||
United States†† | 3,312,782,958 | 71.4% | ||||||
Total | $ | 4,640,714,792 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (64.4% excluding Short-Term Securities and Other Securities) |
Forward Currency Contracts, Open
Currency Sold and | Currency | Currency | Unrealized | |||||||||
Settlement Date | Units Sold | Value in U.S. $ | Gain/(Loss) | |||||||||
British Pound 5/14/08 | 30,500,000 | $ | 60,598,944 | $ | 1,058,484 | |||||||
British Pound 10/23/08 | 7,000,000 | 13,742,725 | (68,925) | |||||||||
Euro 5/14/08 | 4,500,000 | 7,023,070 | (628,683) | |||||||||
Euro 10/16/08 | 32,000,000 | 49,557,016 | 574,824 | |||||||||
Japanese Yen 10/16/08 | 3,350,000,000 | 32,517,481 | 910,648 | |||||||||
South Korean Won 5/14/08 | 20,650,000,000 | 20,602,436 | 2,036,385 | |||||||||
Swiss Franc 10/23/08 | 34,300,000 | 33,139,133 | (145,674) | |||||||||
Total | $ | 217,180,805 | $ | 3,737,059 |
Total Return Swaps outstanding at April 30, 2008
Notional | Return Paid | Return Received | Unrealized | ||||||||||||
Counterparty | Amount | by the Fund | by the Fund | Termination Date | Appreciation | ||||||||||
Morgan Stanley Capital Services | $ | 3,081,544 | 1-month Wynn Resorts, Ltd. plus Federal Funds rate minus 20 basis points | 1-month Melco PBL Entertainment (Macau), Ltd. (ADR) plus Federal Funds rate plus 25 basis points | 11/19/08 | $ | 2,971,348 | ||||||||
Morgan Stanley Capital Services | 939,211 | 1-month Wynn Resorts, Ltd. plus LIBOR minus 70 basis points | 1-month Melco International Development, Ltd. plus LIBOR plus 45 basis points | 12/11/08 | 606,670 | ||||||||||
Total | $ | 3,578,018 | |||||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2008 41
Table of Contents
Janus Triton Fund (unaudited) | Ticker: JATTX |
Fund Snapshot
A unique growth fund that focuses on small- and mid-sized companies believed to have solid growth potential.
![(CHAD MEADE PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646pmeadech.jpg)
Chad Meade
co-portfolio manager
![(BRIAN SCHAUB PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646pschaubb.jpg)
Brian Schaub
co-portfolio manager
Performance Overview
For the six-month period ended April 30, 2008, Janus Triton Fund returned (14.52)%. Meanwhile, the Fund’s benchmark, the Russell 2500tm Growth Index, returned (11.37)%.
Economic Overview
Turmoil in the credit markets, uncertainty surrounding the near-term outlook for the U.S. economy and a weaker corporate profit picture made for a volatile and difficult market environment over the past several months. While sentiment toward the end of the period improved and U.S. equity markets finished well above the mid-March lows, stocks were broadly lower during the six-month period ended April 30, 2008.
Additional subprime-related write-offs, slowing consumer spending and a softening labor market, accompanied by record commodity prices and rising inflation expectations, weighed on investor sentiment during the period. Stocks reached their lows in mid-March amid fears that credit conditions could suffer another setback given a deteriorating liquidity position at investment bank Bear Stearns. Prior to that, periodic liquidity injections by the Federal Reserve (Fed) failed to alleviate the stress in the credit markets. Financial markets stabilized somewhat after the Fed aggressively lowered the Federal Funds rate, expanded the collateral it would accept and played an instrumental role in JP Morgan Chase’s purchase of Bear Stearns. In the end, the Fed lowered its target interest rate from 4.50% to 2.00% during the period.
Overall, mid-cap stocks performed better than large- and small-cap stocks, while growth outperformed value stocks. For the broad market all sectors declined with the exception of energy, which turned in a gain for the six-month period amid record crude oil prices. Meanwhile, financials were the worst performing group, suffering from turmoil in the credit markets and larger-than-expected subprime-related write-downs. Information technology was also among the weakest performers while defensive sectors, like consumer staples, posted small declines. Following the March lows, the equity market’s rally at the end of the period can be attributed in part to improving sentiment as investors began to look ahead to a possible economic recovery. Nevertheless, concerns about elevated inflationary pressures, soft consumer spending, the weak housing market and the lingering possibility of more write-downs continued to weigh on the market.
Key Detractors
Data center and information technology (IT) services provider SAVVIS suffered on concerns that increasing supply in the industry could hamper further growth prospects, IT spending could be reduced in an economic slowdown and mis-steps by management in setting investors expectations. Longer term, we believe SAVVIS is well-positioned to take advantage of increased out-sourcing of non-core IT infrastructure. In addition, we think this recurring revenue business will benefit from pricing power and high incremental margins. As such, we added to our position.
Over the course of the period, shipping company Horizon Lines suffered on rumors of tax changes, a Department of Justice investigation relating to pricing issues in Puerto Rico, increased fuel costs and worries about the economic environment. We feel Horizon’s competitive position remains intact and feel it is likely to improve with new services. We believe the market has overreacted to the concerns and added to the position. In our opinion, stable volumes, pricing power and cash flows continue to make this a compelling risk/reward opportunity.
Key Contributors
Energy company Helmerich & Payne rose slightly over 70% during the period as this oil and gas driller continued to demand premium prices with their flex rigs. The company has locked in more than 50% of their contracts for 2008 and 2009 offering what we believe is good visibility into future results. We did, however, trim the position as the risk/reward profile was less compelling following the strong performance.
Sandridge Energy, an exploration and production company, primarily focused on natural gas rose over 40% during the period as strong production growth coupled with a growing reserve base and higher natural gas prices boosted performance. We opened the position over the course of the period and believe the company’s potential reserves, likely production growth, and competitive position in west Texas make for a compelling risk/reward profile.
42 Janus Growth Funds April 30, 2008
Table of Contents
(unaudited)
Outlook
Looking ahead, we will be paying close attention to the employment picture, the availability of credit and U.S. consumer confidence, among other things. Should the labor market continue to soften amid continued weakness in the housing market, further slowing in consumer spending is likely. While the government stimulus checks could provide a temporary boost, the current de-leveraging of the U.S. economy could take time to complete, possibly lessening the potential for a sharp rebound in economic activity. Inflation remains a concern for the markets as well, given record commodity prices and its recent elevated level. Although inflation is generally a lagging indicator and should ease with slowing economic growth, it deserves attention given its negative impact and the notion that inflation may limit the Fed’s options to further stimulate economic growth.
Although export growth has been strong, helping to offset domestic weakness, and corporate balance sheets are generally healthy, something that has provided support for equity prices, markets are likely to tread cautiously. Nevertheless, we remain committed to our fundamental investment approach in our effort to find opportunities that we believe represent an attractive risk/reward profile. As always, we will continue to emphasize bottom-up company analysis as our primary tool in our quest to add value for shareholders.
Thank you for your investment in Janus Triton Fund.
Janus Triton Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Helmerich & Payne, Inc. | 0.69% | |||
Sandridge Energy, Inc. | 0.33% | |||
Old Dominion Freight Line, Inc. | 0.33% | |||
Respironics, Inc. | 0.30% | |||
C.H. Robinson Worldwide, Inc. | 0.28% |
5 Bottom Performers – Holdings
Contribution | ||||
SAVVIS, Inc. | (1.76)% | |||
Horizon Lines, Inc. – Class A | (1.00)% | |||
Tomotherapy, Inc. | (0.79)% | |||
SiRF Technology Holdings, Inc. | (0.69)% | |||
Euronet Worldwide, Inc. | (0.62)% |
5 Top Performers – Sectors
Fund Weighting | Russel 2500tm | |||||||||||
Fund Contribution | (% of Net Assets) | Growth Index Weighting | ||||||||||
Energy | 0.64% | 5.83% | 7.99% | |||||||||
Materials | 0.10% | 0.02% | 6.39% | |||||||||
Utilities | 0.00% | 0.00% | 1.13% | |||||||||
Consumer Staples | (0.02)% | 0.01% | 2.33% | |||||||||
Telecommunication Services | (0.33)% | 3.87% | 1.14% |
5 Bottom Performers – Sectors
Fund Weighting | Russel 2500tm | |||||||||||
Fund Contribution | (% of Net Assets) | Growth Index Weighting | ||||||||||
Information Technology | (6.83)% | 27.23% | 19.84% | |||||||||
Consumer Discretionary | (3.80)% | 14.55% | 16.61% | |||||||||
Health Care | (3.03)% | 12.57% | 17.71% | |||||||||
Financials | (1.39)% | 10.60% | 8.54% | |||||||||
Industrials | (0.73)% | 25.33% | 18.33% |
Janus Growth Funds April 30, 2008 43
Table of Contents
Janus Triton Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2008
SBA Communications Corp. – Class A Wireless Equipment | 2.9% | |||
Resources Connection, Inc. Human Resources | 2.8% | |||
Equinix, Inc. Web Hosting/Design | 2.2% | |||
Iron Mountain, Inc. Commercial Services | 2.1% | |||
Standard Parking Corp. Commercial Services | 2.1% | |||
12.1% |
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20p04.gif)
Emerging markets comprised 3.6% of total net assets.
*Includes Securities Sold Short of (1.4)%
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20t04.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20c04.gif)
44 Janus Growth Funds April 30, 2008
Table of Contents
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20m04.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratios – for the fiscal year ended October 31, 2007 | ||||||||||
Fiscal | One | Since | Total Annual Fund | Net Annual Fund | |||||||
Year-to-Date | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Janus Triton Fund | (14.52)% | 2.90% | 13.38% | 1.13% | 1.13% | ||||||
Russell 2500tm Growth Index | (11.37)% | (3.56)% | 7.79% | ||||||||
Lipper Quartile | – | 1st | 1st | ||||||||
Lipper Ranking – based on total return for Small-Cap Growth Funds | – | 42/598 | 6/471 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
Janus Capital has contractually agreed to waive the Fund’s total operating expenses (excluding brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to a certain limit until at least March 1, 2009. The expense waiver shown reflects the application of such limit and is detailed in the Statement of Additional Information. Returns shown include fee waivers, if any, and without such waivers, the Fund’s returns would have been lower.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.) Contractual waivers agreed to by Janus Capital, where applicable, are included in the prospectus under “Net Annual Fund Operating Expenses.” All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses. The Fund’s total operating expenses did not exceed the expense limit so no waivers were in effect for the most recent period presented.
See important disclosures on the next page.
Janus Growth Funds April 30, 2008 45
Table of Contents
Janus Triton Fund (unaudited)
The Fund’s performance may be affected by risks that include those associated with, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and other details.
Funds that invest 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 and interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
The use of short sales may cause the Fund to have higher expenses than those of other equity funds. Short sales are speculative transactions and involve special risks, including a greater reliance on the investment team’s ability to accurately anticipate the future value of a security. The Fund’s losses are potentially unlimited in a short sale transaction. The Fund’s use of short sales in effect leverages the Fund’s portfolio. The Fund’s use of leverage may result in risks and can magnify the effect of any losses. There is no assurance that a leveraging strategy will be successful.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
February 28, 2005 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the index. The index is unmanaged and is not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – February 25, 2005 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/01/07) | (4/30/08) | (11/01/07- 4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 854.80 | $ | 4.66 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.84 | $ | 5.07 | ||||||||
† | Expenses are equal to the annualized expense ratio of 1.01%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital. |
46 Janus Growth Funds April 30, 2008
Table of Contents
Janus Triton Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Common Stock – 93.0% | ||||||||
Advertising Sales – 1.0% | ||||||||
33,378 | Lamar Advertising Co. – Class A*,# | $ | 1,319,766 | |||||
Aerospace and Defense – 1.9% | ||||||||
38,140 | Embraer-Empresa Brasileira de Aeronautica S.A. (ADR) | 1,589,675 | ||||||
28,630 | TransDigm Group, Inc.* | 1,087,081 | ||||||
2,676,756 | ||||||||
Auction House – Art Dealer – 1.2% | ||||||||
65,275 | Ritchie Bros. Auctioneers, Inc. (U.S. Shares) | 1,628,611 | ||||||
Audio and Video Products – 1.7% | ||||||||
77,840 | DTS, Inc.*,# | 2,296,280 | ||||||
Casino Services – 1.5% | ||||||||
292,326 | Elixir Gaming Technologies Inc.* | 523,264 | ||||||
376,380 | Elixir Gaming Technologies Inc.* | 673,720 | ||||||
32,945 | Scientific Games Corp. – Class A*,# | 927,731 | ||||||
2,124,715 | ||||||||
Chemicals – Plastics – 0.4% | ||||||||
56,365 | Metabolix, Inc.*,# | 620,579 | ||||||
Commercial Banks – 1.7% | ||||||||
72,050 | East West Bancorp, Inc.# | 1,025,992 | ||||||
23,130 | Westamerica Bancorporation# | 1,351,717 | ||||||
2,377,709 | ||||||||
Commercial Services – 5.7% | ||||||||
42,615 | CoStar Group, Inc.* | 2,043,389 | ||||||
106,890 | Iron Mountain, Inc.* | 2,936,268 | ||||||
134,725 | Standard Parking Corp.* | 2,887,157 | ||||||
7,866,814 | ||||||||
Commercial Services – Finance – 2.3% | ||||||||
116,475 | Euronet Worldwide, Inc.*,# | 2,059,278 | ||||||
64,380 | Riskmetrics Group, Inc.*,# | 1,136,307 | ||||||
3,195,585 | ||||||||
Computer Software – 0.9% | ||||||||
56,880 | Omniture, Inc.*,# | 1,298,002 | ||||||
Consulting Services – 0.4% | ||||||||
97,240 | Information Services Group, Inc.*,# | 503,703 | ||||||
Decision Support Software – 1.1% | ||||||||
48,665 | MSCI, Inc.* | 1,509,588 | ||||||
Diagnostic Equipment – 1.4% | ||||||||
70,465 | IMMUCOR, INC.* | 1,901,146 | ||||||
Diagnostic Kits – 1.5% | ||||||||
39,630 | IDEXX Laboratories, Inc.* | 2,108,316 | ||||||
Distribution/Wholesale – 2.4% | ||||||||
47,885 | MWI Veterinary Supply, Inc.* | 1,650,596 | ||||||
61,571 | NuCo2, Inc.* | 1,703,054 | ||||||
3,353,650 | ||||||||
Diversified Operations – 3.4% | ||||||||
105,260 | Barnes Group, Inc.# | 2,745,181 | ||||||
948,000 | Melco International Development, Ltd. | 1,300,496 | ||||||
3,159,289 | Polytec Asset Holdings, Ltd. | 699,667 | ||||||
4,745,344 | ||||||||
Electronic Components – Semiconductors – 2.5% | ||||||||
522,981 | ARM Holdings PLC | 1,039,133 | ||||||
100,595 | Microsemi Corp.*,** | 2,464,577 | ||||||
3,503,710 | ||||||||
Electronic Connectors – 1.9% | ||||||||
55,380 | Amphenol Corp. – Class A | 2,557,448 | ||||||
Electronic Measuring Instruments – 1.1% | ||||||||
48,024 | Trimble Navigation, Ltd.*,** | 1,574,707 | ||||||
Energy – Alternate Sources – 1.3% | ||||||||
73,905 | JA Solar Holdings Company, Ltd. (ADR)* | 1,774,459 | ||||||
Enterprise Software/Services – 0.6% | ||||||||
66,435 | Omnicell, Inc.* | 798,549 | ||||||
Filtration and Separations Products – 2.1% | ||||||||
67,920 | CLARCOR, Inc.** | 2,849,923 | ||||||
Finance – Consumer Loans – 0.9% | ||||||||
99,860 | Nelnet, Inc. – Class A# | 1,277,209 | ||||||
Finance – Other Services – 1.6% | ||||||||
31,745 | FCStone Group, Inc.*,# | 1,314,878 | ||||||
96,205 | MarketAxess Holdings, Inc.* | 845,642 | ||||||
2,160,520 | ||||||||
Footwear and Related Apparel – 1.2% | ||||||||
57,455 | Wolverine World Wide, Inc. | 1,651,257 | ||||||
Human Resources – 2.8% | ||||||||
189,465 | Resources Connection, Inc.* | 3,829,088 | ||||||
Internet Applications Software – 1.2% | ||||||||
62,875 | DealerTrack Holdings, Inc.* | 1,209,715 | ||||||
931 | E-Seikatsu Company, Ltd.*,# | 401,764 | ||||||
1,611,479 | ||||||||
Machinery – General Industrial – 0.6% | ||||||||
1,475,570 | Shanghai Electric Group Company, Ltd.# | 832,193 | ||||||
Medical – Drugs – 1.3% | ||||||||
158,615 | Achillion Pharmaceuticals, Inc.* | 705,837 | ||||||
85,205 | Array BioPharma, Inc.* | 529,975 | ||||||
101,485 | BioForm Medical, Inc.*,# | 515,544 | ||||||
1,751,356 | ||||||||
Medical – HMO – 1.1% | ||||||||
57,700 | OdontoPrev S.A. | 1,489,637 | ||||||
Medical Instruments – 2.5% | ||||||||
74,160 | CONMED Corp.* | 1,892,563 | ||||||
149,005 | Spectranetics, Corp.* | 1,603,294 | ||||||
3,495,857 | ||||||||
Medical Products – 1.0% | ||||||||
139,865 | Tomotherapy, Inc.*,# | 1,365,082 | ||||||
Oil – Field Services – 1.1% | ||||||||
60,695 | Acergy S.A. (ADR) | 1,494,918 | ||||||
Oil and Gas Drilling – 1.1% | ||||||||
26,990 | Helmerich & Payne, Inc. | 1,450,713 | ||||||
Oil Companies – Exploration and Production – 2.2% | ||||||||
62,955 | Petrohawk Energy Corp.* | 1,488,256 | ||||||
32,700 | Sandridge Energy, Inc.* | 1,477,386 | ||||||
2,965,642 | ||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2008 47
Table of Contents
Janus Triton Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Physician Practice Management – 2.4% | ||||||||
44,550 | Healthways, Inc.*,# | $ | 1,627,412 | |||||
24,700 | Pediatrix Medical Group, Inc.* | 1,680,094 | ||||||
3,307,506 | ||||||||
Printing – Commercial – 1.4% | ||||||||
57,010 | VistaPrint, Ltd.*,# | 1,940,050 | ||||||
Publishing – Newspapers – 0.6% | ||||||||
44,865 | Dolan Media* | 777,959 | ||||||
Real Estate Operating/Development – 1.8% | ||||||||
76,060 | Rodobens Negocios Imobiliarios S.A. | 1,029,879 | ||||||
37,095 | St. Joe Co.# | 1,508,654 | ||||||
2,538,533 | ||||||||
REIT – Diversified – 1.2% | ||||||||
114,374 | CapitalSource, Inc. | 1,606,955 | ||||||
Retail – Apparel and Shoe – 2.0% | ||||||||
17,995 | Abercrombie & Fitch Co. – Class A# | 1,337,208 | ||||||
39,880 | Nordstrom, Inc. | 1,406,169 | ||||||
2,743,377 | ||||||||
Retail – Petroleum Products – 0.9% | ||||||||
49,850 | World Fuel Services Corp. | 1,224,316 | ||||||
Retail – Restaurants – 0.7% | ||||||||
9,280 | Chipotle Mexican Grill, Inc. – Class A* | 910,646 | ||||||
Retail – Sporting Goods – 0.8% | ||||||||
49,480 | Zumiez, Inc.*,# | 1,036,606 | ||||||
Semiconductor Components/Integrated Circuits – 2.3% | ||||||||
557,700 | Atmel Corp.* | 2,074,644 | ||||||
40,985 | Cypress Semiconductor Corp.* | 1,152,498 | ||||||
3,227,142 | ||||||||
Telecommunication Equipment – 2.0% | ||||||||
59,245 | CommScope, Inc.*,** | 2,817,100 | ||||||
Telecommunication Services – 4.4% | ||||||||
33,940 | Amdocs, Ltd. (U.S. Shares)* | 1,065,037 | ||||||
58,650 | NeuStar, Inc. – Class A* | 1,613,462 | ||||||
142,990 | SAVVIS, Inc.*,** | 2,094,803 | ||||||
68,410 | Time Warner Telecom, Inc. – Class A* | 1,340,836 | ||||||
6,114,138 | ||||||||
Theaters – 1.2% | ||||||||
82,735 | National Cinemedia, Inc.# | 1,585,203 | ||||||
Therapeutics – 0.7% | ||||||||
106,360 | MannKind Corp.*,# | 276,536 | ||||||
60,015 | Theravance, Inc.*,# | 749,587 | ||||||
1,026,123 | ||||||||
Transactional Software – 1.4% | ||||||||
74,425 | Solera Holdings, Inc.* | 1,920,909 | ||||||
Transportation – Equipment and Leasing – 1.3% | ||||||||
40,425 | GATX Corp. | 1,778,700 | ||||||
Transportation – Marine – 1.3% | ||||||||
165,385 | Horizon Lines, Inc. – Class A**,# | 1,744,812 | ||||||
Transportation – Services – 1.8% | ||||||||
22,635 | C.H. Robinson Worldwide, Inc. | 1,418,762 | ||||||
428,000 | Integrated Distribution Services Group, Ltd. | 1,070,996 | ||||||
2,489,758 | ||||||||
Transportation – Truck – 2.2% | ||||||||
50,265 | Forward Air Corp.# | 1,713,533 | ||||||
40,995 | Old Dominion Freight Line, Inc.*,# | 1,258,547 | ||||||
2,972,080 | ||||||||
Web Hosting/Design – 3.1% | ||||||||
33,410 | Equinix, Inc.*,** | 3,020,932 | ||||||
204,650 | Terremark Worldwide, Inc.*,# | 1,231,993 | ||||||
4,252,925 | ||||||||
Wireless Equipment – 2.9% | ||||||||
123,520 | SBA Communications Corp. – Class A*,# | 3,994,638 | ||||||
Total Common Stock (cost $131,877,589) | 127,969,787 | |||||||
Money Markets – 7.8% | ||||||||
3,223,446 | Janus Institutional Cash Management Fund – Institutional Shares, 2.82% | 3,223,446 | ||||||
7,493,801 | Janus Institutional Money Market Fund – Institutional Shares, 2.74% | 7,493,800 | ||||||
Total Money Markets (cost $10,717,246) | 10,717,246 | |||||||
Other Securities – 15.8% | ||||||||
7,801,030 | Allianz Dresdner Daily Asset Fund† | 7,801,030 | ||||||
3,443,958 | Repurchase Agreements† | 3,443,958 | ||||||
Time Deposits: | ||||||||
830,753 | Abbey National Treasury, N.A., 2.375%, 5/1/08† | 830,753 | ||||||
370,647 | ABN-AMRO Bank N.V., N.A., 2.26%, 5/1/08† | 370,647 | ||||||
432,308 | BNP Paribas, New York, N.A., 2.50%, 5/1/08† | 432,308 | ||||||
864,615 | Calyon, N.A., 2.50%, 5/1/08† | 864,615 | ||||||
300,917 | Chase Bank USA, N.A., 2.25%, 5/1/08† | 300,917 | ||||||
951,077 | Danske Bank, Cayman Islands, N.A., 2.53%, 5/1/08† | 951,077 | ||||||
605,231 | Deutsche Bank A.G., N.A., 2.30%, 5/1/08† | 605,231 | ||||||
864,615 | Dexia Bank S.A. Brussels, N.A., 2.50%, 5/1/08† | 864,615 | ||||||
864,615 | ING Bank N.V., Amsterdam, N.A., 2.4375%, 5/1/08† | 864,615 | ||||||
864,615 | Lloyd’s TSB Group PLC, N.A., 2.45%, 5/1/08† | 864,615 | ||||||
127,921 | Natixis, N.A., 2.38%, 5/1/08† | 127,921 | ||||||
864,615 | Natixis, N.A., 2.43%, 5/1/08† | 864,615 | ||||||
864,615 | Nordea Bank Finland PLC, N.A., 2.50%, 5/1/08† | 864,615 | ||||||
853,507 | Svenska Handelsbanken, N.A., 2.40%, 5/1/08† | 853,507 | ||||||
864,615 | Wells Fargo Bank, N.A., 2.375%, 5/1/08† | 864,615 | ||||||
Total Other Securities (cost $21,769, 654) | 21,769,654 | |||||||
Total Investments (total cost $164,364,489) – 116.6% | 160,456,687 | |||||||
Securities Sold Short – (1.4)% | ||||||||
Hazardous Waste Disposal – (0.4)% | ||||||||
11,955 | Stericycle, Inc.* | (638,158) | ||||||
Retail – Apparel and Shoe – (0.5)% | ||||||||
13,685 | J. Crew Group, Inc.* | (650,037) | ||||||
See Notes to Schedules of Investments and Financial Statements.
48 Janus Growth Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Web Hosting/Design – (0.5)% | ||||||||
74,855 | Website Pros, Inc.* | $ | (673,695) | |||||
Total Securities Sold Short (proceeds $1,909,749) – (1.4)% | (1,961,890) | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (15.2)% | (20,942,832) | |||||||
Net Assets – 100% | $ | 137,551,965 | ||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 3,011,047 | 1.9% | |||||
Brazil | 4,109,191 | 2.6% | ||||||
Canada | 1,628,611 | 1.0% | ||||||
Cayman Islands | 2,474,126 | 1.5% | ||||||
China | 832,193 | 0.5% | ||||||
Guernsey | 1,065,037 | 0.7% | ||||||
Hong Kong | 1,300,496 | 0.8% | ||||||
Japan | 401,764 | 0.3% | ||||||
Luxembourg | 1,494,918 | 0.9% | ||||||
United Kingdom | 1,039,133 | 0.6% | ||||||
United States†† | 143,100,171 | 89.2% | ||||||
Total | $ | 160,456,687 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (68.9% excluding Short-Term Securities and Other Securities) |
Summary of Investments by Country – (Short Positions)
% of Securities | ||||||||
Country | Value | Sold Short | ||||||
United States | ($ | 1,961,890) | 100% | |||||
Total | ($ | 1,961,890) | 100% |
Schedule of Written Options – Calls | Value | |||
Horizon Lines, Inc. – Class A expires May 2008 408 contracts exercise price $20.00 | $ | (408) | ||
SAVVIS, Inc. expires June 2008 479 contracts exercise price $20.00 | (11,975) | |||
Trimble Navigation, Ltd. expires November 2008 223 contracts exercise price $30.00 | (122,650) | |||
Total Written Options – Calls | ||||
(Premiums received $209,406) | $ | (135,033) | ||
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2008 49
Table of Contents
Janus Twenty Fund (unaudited) (closed to new investors) | Ticker: JAVLX |
Fund Snapshot
This high conviction fund invests primarily in companies we believe have sustainable businesses with large addressable markets that trade at attractive valuations.
![(RON SACHS PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646psachsro.jpg)
Ron Sachs
portfolio manager
Performance Overview
This is my first letter as portfolio manager of Janus Twenty Fund. I took over the Fund on January 1, 2008. For the six-month period ended April 30, 2008, the Fund returned 2.39% versus a return of (9.28)% for the Fund’s primary benchmark, the Russell 1000® Growth Index. The Fund’s secondary benchmark, the S&P 500® Index, returned (9.64)% for the period. This outperformance was generated by holdings across a variety of sectors.
Since I am a new manager to many of you, I thought I should spend a little time discussing my investment philosophy. I share my predecessor’s focus on identifying great companies that I believe can grow and compound value over the long term. When the Fund’s previous portfolio manager and I managed different funds, we owned many of the same companies and leveraged the same exceptional team of research analysts. I believe in making the best long-term investment ideas big positions, which normally leads to a concentrated portfolio in terms of the number of positions held in the Fund, and to a low-turnover portfolio due to the length of time we typically hold these select names. I believe protecting the Fund against the downside is critical to delivering long-term results. One key to both downside protection and long-term value creation is identifying the strength and sustainability of a company��s barriers to competition, popularly referred to as a company’s “competitive moat.” I also believe a focus on valuation is key. I adjust position sizes in the Fund in response to the risk/reward profile we identify based on our valuation work. Finally, I avoid making sector or macro-economic “bets.” I look to build a portfolio of companies that I believe can deliver growth in any economic environment and I spend time thinking about the Fund’s overall exposures to sector headwinds and exogenous economic events. I feel this approach helps deliver more consistent performance than some might expect in a portfolio that is invested in 20-30 positions.
What Went Right
Janus’ conviction in a number of the Fund’s bigger holdings drove outperformance. Potash Corporation of Saskatchewan, the world’s largest miner of potash, was a standout performer. We believe that this company is extremely well positioned to deliver pricing and volume growth, as demand for agricultural commodities tend to increase over time. Potash is an essential component of fertilizer and we believe the industry dynamics and barriers to new competitors allow for a business with very strong pricing power over a multi-year cycle.
Hess, a leading energy exploration and production company, was a contributor to performance during the period. Hess’ strong performance was primarily due to the market’s realization that some of Hess’ recent discoveries off the coasts of Brazil and Africa have the potential to be extremely valuable. Our analysts’ ongoing conversations with management and others familiar with these geographies gave us early insight into the potential size of these finds. We continue to believe that Hess is extremely well positioned to grow its resource base and earnings due to its exciting portfolio of discoveries and prospects.
ABB, a leading provider of electricity transmission and distribution products was a new position in the Fund and another important contributor. We were able to take advantage of some fears in the market early this year to build a position. We believe global spending on electric transmission networks will be strong for an extended period as developed markets rebuild their networks after decades of underinvestment. We believe additional demand has come from emerging economies building new electric transmission networks as a foundation for their future economic growth. We believe ABB is the leader in most critical technologies. This leadership was reflected in leading market shares globally and superior profitability. We see a potential for further profitability in the future.
What Went Wrong
There were a few disappointments during the period as well. Google, the leading internet search engine, was a weak performer during the period. Google stock was down on valuation concerns and fears that an economic slowdown would slow growth. We trimmed our exposure to the stock in early 2008 to reflect the risk/reward profile, but have been encouraged by Google’s ability to continue to outgrow the market while sacrificing some revenues in the short term to improve the user experience for both advertisers and search customers. Internet search is proving to be an industry where the leading players have a significant competitive advantage over competitors with smaller market shares – we believe strong market share and strong technology are creating
50 Janus Growth Funds April 30, 2008
Table of Contents
(unaudited)
what may be a sizeable and enduring competitive moat for Google.
Additional detractors were investment banks Bear Stearns and Goldman Sachs Group. Bear Stearns suffered significant losses during the U.S. mortgage meltdown. We exited the position very early in 2008 over concerns that their two key franchises of prime brokerage and fixed-income issuance would be challenged. It proved to be a well-timed sale as the stock declined further.
Despite avoiding the subprime mortgage losses that hit most major financial institutions, Goldman Sachs underperformed during the period because investors feared that future limits on leverage and the potential for shrinking securities markets would temper Goldman Sachs’ future earnings prospects. While these concerns may be valid in the short term, we focus on long-term opportunities for the companies in the Fund. We believe Goldman Sachs has distinguished itself from its peers over many years with better growth and superior returns. We anticipate increased consumption of sophisticated financial products by individuals, governments and corporations globally and believe Goldman Sachs may be well positioned over the long term to profitably deliver these products.
Outlook
There have been some changes to the Fund during the period. I have added some new positions we are particularly excited about, eliminated some positions that do not fit with my investment philosophy and adjusted position sizes to reflect the risk/reward profiles as I view them.
Looking forward, I will continue to focus on individual company fundamentals and build the Fund stock by stock. That said, the macroeconomic environment influences the fundamentals of every company we own and analyze. I believe the U.S. economy is already in a recession. The stock market anticipated this recession in late 2007, cutting the value of many economically sensitive stocks by 30% or more. In early 2008, the cumulative weight of evidence of a U.S. slowdown caused investors around the globe to discount the possibility that the deceleration could be severe and would drag down growth rates globally. This global panic has created some exciting buying opportunities for those of us focused on long-term company fundamentals. I am excited about the growth prospects of the companies we own.
Thank you for your investment in Janus Twenty Fund. I look forward to reporting results in the future.
Janus Growth Funds April 30, 2008 51
Table of Contents
Janus Twenty Fund (unaudited)
Janus Twenty Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 3.67% | |||
Hess Corp. | 1.72% | |||
Syngenta A.G. | 1.03% | |||
ABB, Ltd. | 0.87% | |||
Gilead Sciences, Inc. | 0.60% |
5 Bottom Performers – Holdings
Contribution | ||||
Google, Inc. – Class A | (1.38)% | |||
Goldman Sachs Group, Inc. | (0.98)% | |||
Las Vegas Sands Corp. | (0.72)% | |||
Apple, Inc. | (0.60)% | |||
Bear Stearns Companies, Inc. | (0.43)% |
5 Top Performers – Sectors
Fund Weighting | Russell 1000® | |||||||||||
Fund Contribution | (% of Net Assets) | Growth Index Weighting | ||||||||||
Materials | 5.38% | 21.12% | 3.56% | |||||||||
Energy | 2.67% | 12.06% | 8.83% | |||||||||
Industrials | 0.77% | 3.41% | 13.13% | |||||||||
Health Care | 0.47% | 16.45% | 16.02% | |||||||||
Consumer Staples | 0.09% | 9.87% | 10.68% |
5 Bottom Performers – Sectors
Fund Weighting | Russell 1000® | |||||||||||
Fund Contribution | (% of Net Assets) | Growth Index Weighting | ||||||||||
Financials | (2.82)% | 8.35% | 6.86% | |||||||||
Information Technology | (2.24)% | 21.86% | 27.36% | |||||||||
Consumer Discretionary | (1.70)% | 6.88% | 11.43% | |||||||||
Utilities | 0.00% | 0.00% | 1.44% | |||||||||
Telecommunication Services | 0.00% | 0.00% | 0.68% |
52 Janus Growth Funds April 30, 2008
Table of Contents
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2008
Research In Motion, Ltd. (U.S. Shares) Computers | 8.1% | |||
Potash Corporation of Saskatchewan, Inc. (U.S. Shares) Agricultural Chemicals | 7.0% | |||
Gilead Sciences, Inc. Therapeutics | 5.6% | |||
Apple, Inc. Computers | 5.6% | |||
Google, Inc. – Class A Web Portals/Internet Service Providers | 4.9% | |||
31.2% |
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20p09.gif)
Emerging markets comprised 4.8% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20t09.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20c09.gif)
Janus Growth Funds April 30, 2008 53
Table of Contents
Janus Twenty Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20m09.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratio – for the fiscal year ended October 31, 2007 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Twenty Fund(1) | 2.39% | 30.92% | 20.49% | 8.29% | 14.26% | 0.88% | |||||||
Russell 1000® Growth Index | (9.28)% | (0.23)% | 9.52% | 1.66% | 10.84% | ||||||||
S&P 500® Index | (9.64)% | (4.68)% | 10.62% | 3.89% | 11.93% | ||||||||
Lipper Quartile | – | 1st | 1st | 1st | 1st | ||||||||
Lipper Ranking – based on total return for Large-Cap Growth Funds | – | 1/748 | 1/528 | 4/250 | 1/36 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.)
The Fund’s performance may be affected by risks that include those associated with non-diversification, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and other details.
The use of short sales may cause the Fund to have higher expenses than those of other equity funds. Short sales are speculative transactions and involve special risks, including a greater reliance on the investment team’s ability to accurately anticipate the future value of a security. The Fund’s losses are potentially unlimited in a short sale transaction. The Fund’s use of short sales in effect leverages the Fund’s portfolio. The Fund’s use of leverage may result in risks and can magnify the effect of any losses. There is no assurance that a leveraging strategy will be successful.
Annual expense ratios include dividends on interest on short sales, which are paid to the lender of borrowed securities. Such expenses will vary depending on whether the securities the fund sells short pay dividends or interest and the amount of such dividends or interest.
Returns include reinvestment of dividends from investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
(1) Closed to new investors.
* | The Fund’s inception date – April 30, 1985 |
54 Janus Growth Funds April 30, 2008
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(unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,023.90 | $ | 4.23 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.69 | $ | 4.22 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.84%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
Janus Growth Funds April 30, 2008 55
Table of Contents
Janus Twenty Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Common Stock – 91.0% | ||||||||
Aerospace and Defense – 0.9% | ||||||||
12,639,458 | BAE Systems PLC | $ | 116,524,173 | |||||
Agricultural Chemicals – 12.7% | ||||||||
2,953,540 | Monsanto Co. | 336,762,631 | ||||||
4,902,870 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 901,882,936 | ||||||
1,390,676 | Syngenta A.G. | 411,965,703 | ||||||
1,650,611,270 | ||||||||
Agricultural Operations – 3.6% | ||||||||
4,109,675 | Bunge, Ltd.# | 468,872,821 | ||||||
Audio and Video Products – 2.1% | ||||||||
5,951,965 | Sony Corp. (ADR) | 272,540,477 | ||||||
Casino Hotels – 1.7% | ||||||||
2,852,845 | Las Vegas Sands Corp.*,# | 217,443,846 | ||||||
Computers – 13.7% | ||||||||
4,190,620 | Apple, Inc.* | 728,958,349 | ||||||
8,632,255 | Research In Motion, Ltd. (U.S. Shares)* | 1,049,941,175 | ||||||
1,778,899,524 | ||||||||
Cosmetics and Toiletries – 0.2% | ||||||||
412,515 | Procter & Gamble Co. | 27,659,131 | ||||||
Diversified Minerals – 4.8% | ||||||||
15,780,640 | Companhia Vale do Rio Doce (ADR)# | 616,707,411 | ||||||
Engineering-Research and Development Services – 4.5% | ||||||||
19,022,867 | ABB, Ltd. | 583,321,645 | ||||||
Enterprise Software/Services – 2.0% | ||||||||
12,084,330 | Oracle Corp.* | 251,958,281 | ||||||
Entertainment Software – 0.8% | ||||||||
1,998,780 | Electronic Arts, Inc.* | 102,877,207 | ||||||
Finance – Investment Bankers/Brokers – 5.5% | ||||||||
2,166,180 | Goldman Sachs Group, Inc. | 414,541,867 | ||||||
3,661,620 | Lehman Brothers Holdings, Inc.# | 161,990,069 | ||||||
2,598,280 | Merrill Lynch & Company, Inc. | 129,472,292 | ||||||
706,004,228 | ||||||||
Finance – Other Services – 1.3% | ||||||||
363,120 | CME Group, Inc.# | 166,109,244 | ||||||
Medical – Biomedical and Genetic – 5.7% | ||||||||
9,833,846 | Celgene Corp.* | 611,075,191 | ||||||
1,939,626 | Genentech, Inc.*,# | 132,282,493 | ||||||
743,357,684 | ||||||||
Medical – Drugs – 0.9% | ||||||||
718,483 | Roche Holding A.G. | 119,670,229 | ||||||
Networking Products – 1.9% | ||||||||
9,526,635 | Cisco Systems, Inc.* | 244,262,921 | ||||||
Oil Companies – Exploration and Production – 6.2% | ||||||||
1,575,080 | Apache Corp. | 212,131,774 | ||||||
1,652,972 | EOG Resources, Inc.# | 215,679,787 | ||||||
4,567,825 | Occidental Petroleum Corp. | 380,088,718 | ||||||
807,900,279 | ||||||||
Oil Companies – Integrated – 4.2% | ||||||||
5,163,405 | Hess Corp. | 548,353,611 | ||||||
Optical Supplies – 2.8% | ||||||||
2,270,840 | Alcon, Inc. (U.S. Shares)# | 358,792,720 | ||||||
Retail – Apparel and Shoe – 0.9% | ||||||||
2,112,451 | Industria de Diseno Textil S.A.# | 115,440,581 | ||||||
Retail – Consumer Electronics – 1.0% | ||||||||
1,476,470 | Yamada Denki Company, Ltd.# | 127,404,391 | ||||||
Retail – Drug Store – 3.1% | ||||||||
9,867,010 | CVS/Caremark Corp. | 398,331,194 | ||||||
Therapeutics – 5.6% | ||||||||
14,108,775 | Gilead Sciences, Inc.* | 730,270,194 | ||||||
Web Portals/Internet Service Providers – 4.9% | ||||||||
1,115,466 | Google, Inc. – Class A* | 640,600,969 | ||||||
Total Common Stock (cost $6,507,861,325) | 11,793,914,031 | |||||||
Money Markets – 7.4% | ||||||||
410,632,853 | Institutional Cash Management Fund – Institutional Shares, 2.82% | 410,632,853 | ||||||
547,533,260 | Janus Institutional Money Market Fund – Institutional Shares, 2.74% | 547,533,260 | ||||||
Total Money Markets (cost $958,166,113) | 958,166,113 | |||||||
Other Securities – 7.5% | ||||||||
84,711,460 | Allianz Dresdner Daily Asset Fund† | 84,711,460 | ||||||
217,871,127 | Repurchase Agreements† | 217,871,127 | ||||||
Time Deposits: | ||||||||
52,554,957 | Abbey National Treasury Services, N.A., 2.375%, 5/1/08† | 52,554,957 | ||||||
23,447,782 | ABN-Amro Bank N.V., N.A., 2.26%, 5/1/08† | 23,447,782 | ||||||
27,348,582 | BNP Paribas, New York, N.A., 2.50%, 5/1/08† | 27,348,582 | ||||||
54,697,165 | Calyon, N.A., 2.50%, 5/1/08† | 54,697,165 | ||||||
19,036,579 | Chase Bank U.S.A., N.A., 2.25%, 5/1/08† | 19,036,579 | ||||||
60,166,881 | Danske Bank A/S Cayman, N.A., 2.53%, 5/1/08† | 60,166,881 | ||||||
38,288,015 | Deutsche Bank A.G., N.A., 2.30%, 5/1/08† | 38,288,015 | ||||||
54,697,165 | Dexia Bank S.A. Brussels, N.A., 2.50%, 5/1/08† | 54,697,165 | ||||||
54,697,165 | ING Bank N.V. Amsterdam, N.A., 2.4375%, 5/1/08† | 54,697,165 | ||||||
54,697,165 | Lloyd’s TSB Bank PLC London, N.A., 2.45%, 5/1/08† | 54,697,165 | ||||||
8,092,528 | Natixis, N.A., 2.38%, 5/1/08† | 8,092,528 | ||||||
54,697,165 | Natixis, N.A., 2.43%, 5/1/08† | 54,697,165 | ||||||
54,697,165 | Nordea Bank PLC Finland, N.A., 2.50%, 5/1/08† | 54,697,165 | ||||||
53,994,404 | Svenska Handelsbanken, N.A., 2.40%, 5/1/08† | 53,994,404 | ||||||
54,697,165 | Wells Fargo Bank, N.A., 2.375%, 5/1/08† | 54,697,165 | ||||||
Total Other Securities (cost $968,392,470) | 968,392,470 | |||||||
Total Investments (total cost $8,434,419,908) – 105.9% | 13,720,472,614 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (5.9)% | (763,401,466) | |||||||
Net Assets – 100% | $ | 12,957,071,148 | ||||||
See Notes to Schedules of Investments and Financial Statements.
56 Janus Growth Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 468,872,821 | 3.4% | |||||
Brazil | 616,707,411 | 4.5% | ||||||
Canada | 1,951,824,112 | 14.2% | ||||||
Japan | 399,944,869 | 2.9% | ||||||
Spain | 115,440,581 | 0.9% | ||||||
Switzerland | 1,473,750,296 | 10.7% | ||||||
United Kingdom | 116,524,173 | 0.9% | ||||||
United States†† | 8,577,408,351 | 62.5% | ||||||
Total | $ | 13,720,472,614 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (48.5% excluding Short-Term Securities and Other Securities) |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2008 57
Table of Contents
Janus Venture Fund (unaudited) (closed to new investors) | Ticker: JAVTX |
Fund Snapshot
This growth fund focuses on small companies, where there’s less Wall Street coverage and more opportunity for a research edge.
![(WILL BALES PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646pbaleswi.jpg)
Will Bales
portfolio manager
Performance Overview
For the six-month period ended April 30, 2008, Janus Venture Fund returned (24.55)%. Meanwhile, the Fund’s primary and secondary benchmarks, the Russell 2000® Growth Index and the Russell 2000® Index, returned (14.14)% and (12.92)%, respectively.
Economic Overview
Turmoil in the credit markets, uncertainty surrounding the near-term outlook for the U.S. economy and a weaker corporate profit picture made for a volatile and difficult market environment over the past several months. While sentiment toward the end of the period improved and U.S. equity markets finished well above the mid-March lows, stocks were broadly lower during the six-month period ended April 30, 2008.
Additional subprime-related write-offs, slowing consumer spending and a softening labor market, accompanied by record commodity prices and rising inflation expectations, weighed on investor sentiment during the period. Stocks reached their lows in mid-March amid fears that credit conditions could suffer another setback given a deteriorating liquidity position at investment bank Bear Stearns. Prior to that, periodic liquidity injections by the Federal Reserve (Fed) failed to alleviate the stress in the credit markets. Financial markets stabilized somewhat after the Fed aggressively lowered the Federal Funds rate, expanded the collateral it would accept and played an instrumental role in JP Morgan Chase’s purchase of Bear Stearns. In the end, the Fed lowered its target interest rate from 4.50% to 2.00% during the period.
Overall, mid-cap stocks performed better than large- and small-cap stocks, while growth outperformed value stocks. For the broad market all sectors declined with the exception of energy, which turned in a gain for the six-month period amid record crude oil prices. Meanwhile, financials were the worst performing group, suffering from turmoil in the credit markets and larger-than-expected subprime-related write-downs. Information technology was also among the weakest performers while defensive sectors, like consumer staples, posted small declines. Following the March lows, the equity market’s rally at the end of the period can be attributed in part to improving sentiment as investors began to look ahead to a possible economic recovery. Nevertheless, concerns about elevated inflationary pressures, soft consumer spending, the weak housing market and the lingering possibility of more write-downs continued to weigh on the market.
Additionally, small-cap stocks have been under significant pressure since last summer and the period covered in this letter was no exception with the Russell 2000® Growth Index down over 14%. Pressure from the unwinding of leverage, liquidation of other small-cap players, and short selling have led to a negative impact on many of what we believe to be the highest-quality small-cap growth names. Within this environment, we focused on maintaining a diversified portfolio with what we feel are solid fundamental companies with strong management teams across market sectors and industries. We continue to believe an important measure of a company’s future health is the capability of its management team and how well they navigate these turbulent times.
Under certain circumstances and market conditions, we may initiate positions in put and call options in order to mitigate the risks and potentially enhance the performance of the portfolio. The volatility in the U.S. equity markets over the past six months provided us with such an opportunity. (Please see “Notes to Financial Statements” for information about the hedging techniques used by the Fund.)
Information Technology Holdings Weighed on Performance
The Fund’s underperformance during the period was largely driven by weakness in the information technology sector. NaviSite, a web hosting and design company, was the largest detractor from performance. Much of the downward pressure on the stock occurred in the fourth quarter of 2007 as the company’s results suffered from contract delays during the reporting period. We added to our position on the belief that recurring revenue generated through a subscription-based model offers sustainable growth and that the high free cash flow yield makes for a compelling valuation.
SiRF Technology Holdings also fell short of our expectations during the period. SiRF fell slightly over 75% as the industry landscape changed with a new competitor driving down pricing. We sold the stock as a result of this change in competitive positioning.
58 Janus Growth Funds April 30, 2008
Table of Contents
(unaudited)
Select Financials and Industrials Holdings Aided Performance
In the financials sector Brazil’s largest real estate broker, LPS Brasil-Consultoria de Imoveis S.A., rose more than 25% in the period with much of the move coming at the end of 2007 as the company announced a joint venture to provide mortgages to its customers. In addition to an equal profit sharing agreement, LPS Brasil received an upfront payment equal to 20% of its market cap. We believe the joint venture will help streamline the secondary market for mortgages in Brazil as well as provide a source of future growth for the company. Prior to the announcement of the joint venture, we had confidence in the management team’s ability to create value for shareholders and maintain that view going forward.
Our position in industrials company JA Solar Holdings was one of the top contributors to performance. While the company did offer conservative guidance toward the end of 2007, we believe over the long term their access to silicon will benefit their input costs. Along with what we believe to be a large addressable market in solar and alternative energy, we think JA Solar is a compelling long-term growth story. We added to JA Solar during the period as we believe the market is underestimating the future potential of alternative energy businesses.
Outlook
Looking ahead, we will be paying close attention to the employment picture, the availability of credit and U.S. consumer confidence, among other things. Should the labor market continue to soften amid continued weakness in the housing market, further slowing in consumer spending is likely. While the government stimulus checks could provide a temporary boost, the current de-leveraging of the U.S. economy could take time to complete, possibly lessening the potential for a sharp rebound in economic activity. Inflation remains a concern for the markets as well, given record commodity prices and its recent elevated level. Although inflation is generally a lagging indicator and should ease with slowing economic growth, it deserves attention given its negative impact and the notion that inflation may limit the Fed’s options to further stimulate economic growth.
Although export growth has been strong, helping to offset domestic weakness, and corporate balance sheets are generally healthy, something that has provided support for equity prices, markets are likely to tread cautiously. Nevertheless, we remain committed to our fundamental investment approach in our effort to find opportunities that we believe represent an attractive risk/reward profile. As always, we will continue to emphasize bottom-up company analysis as our primary tool in our quest to add value for shareholders.
Thank you for your investment in Janus Venture Fund.
Janus Growth Funds April 30, 2008 59
Table of Contents
Janus Venture Fund (unaudited)
Janus Venture Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
LPS Brasil – Consultoria de Imoveis S.A. | 0.44% | |||
JA Solar Holdings Company, Ltd. (ADR) | 0.30% | |||
Solera Holdings, Inc. | 0.26% | |||
United Therapeutics Corp. | 0.21% | |||
Carrizo Oil & Gas, Inc. | 0.20% |
5 Bottom Performers – Holdings
Contribution | ||||
NaviSite, Inc. | (1.38)% | |||
SiRF Technology Holdings, Inc. | (1.01)% | |||
VistaPrint, Ltd. | (0.91)% | |||
DealerTrack Holdings, Inc. | (0.86)% | |||
Jarden Corp. | (0.82)% |
5 Top Performers – Sectors
Fund Weighting | Russell 2000® | |||||||||||
Fund Contribution | (% of Net Assets) | Growth Index Weighting | ||||||||||
Materials | 0.10% | 0.02% | 3.99% | |||||||||
Other* | 0.06% | 0.06% | 0.00% | |||||||||
Utilities | 0.00% | 0.00% | 0.57% | |||||||||
Consumer Staples | (0.09)% | 0.06% | 2.45% | |||||||||
Telecommunication Services | (0.25)% | 0.99% | 1.22% |
5 Bottom Performers – Sectors
Fund Weighting | Russell 2000® | |||||||||||
Fund Contribution | (% of Net Assets) | Growth Index Weighting | ||||||||||
Information Technology | (10.08)% | 34.52% | 22.25% | |||||||||
Consumer Discretionary | (5.43)% | 17.68% | 15.73% | |||||||||
Health Care | (3.63)% | 14.76% | 21.08% | |||||||||
Industrials | (3.41)% | 19.41% | 16.72% | |||||||||
Financials | (1.50)% | 8.81% | 8.21% |
* | Industry not classified by Global Classification Standard. |
60 Janus Growth Funds April 30, 2008
Table of Contents
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2008
Ultimate Software Group, Inc. Enterprise Software/Services | 4.1% | |||
Equinix, Inc. Web Hosting/Design | 3.5% | |||
VistaPrint, Ltd. Printing – Commercial | 3.0% | |||
LPS Brasil – Consultoria de Imoveis S.A. Real Estate Management/Services | 2.9% | |||
CoStar Group, Inc. Commercial Services | 2.7% | |||
16.2% |
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20p05.gif)
Emerging markets comprised 4.3% of total net assets.
*Includes Securities Sold Short of (1.9)%
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20t05.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20c05.gif)
Janus Growth Funds April 30, 2008 61
Table of Contents
Janus Venture Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20m05.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratio – for the fiscal year ended October 31, 2007 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Venture Fund(1) | (24.55)% | (11.25)% | 15.99% | 7.39% | 12.66% | 0.88% | |||||||
Russell 2000® Growth Index | (14.14)% | (6.71)% | 13.32% | 2.20% | 7.55% | ||||||||
Russell 2000® Index | (12.92)% | (10.96)% | 13.76% | 5.33% | 10.04% | ||||||||
Lipper Quartile | – | 3rd | 1st | 1st | 1st | ||||||||
Lipper Ranking – based on total return for Small-Cap Growth Funds | – | 410/598 | 35/395 | 44/187 | 1/11 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.)
The Fund’s performance may be affected by risks that include those associated with investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”), derivatives, and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and other details.
The use of short sales may cause the Fund to have higher expenses than those of other equity funds. Short sales are speculative transactions and involve special risks, including a greater reliance on the investment team’s ability to accurately anticipate the future value of a security. The Fund’s losses are potentially unlimited in a short sale transaction. The Fund’s use of short sales in effect leverages the Fund’s portfolio. The Fund’s use of leverage may result in risks and can magnify the effect of any losses. There is no assurance that a leveraging strategy will be successful.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
(1) Closed to new investors.
* | The Fund’s inception date – April 30, 1985 |
62 Janus Growth Funds April 30, 2008
Table of Contents
(unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 754.50 | $ | 3.84 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.49 | $ | 4.42 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.88%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
Janus Growth Funds April 30, 2008 63
Table of Contents
Janus Venture Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares/Principal/Contract Amounts | Value | |||||||
Common Stock – 99.3% | ||||||||
Advanced Materials/Products – 0.5% | ||||||||
171,161 | Ceradyne, Inc.*,# | $ | 6,668,433 | |||||
Advertising Agencies – 0.4% | ||||||||
539,695 | MDC Partners, Inc. (U.S. Shares) – Class A* | 4,430,896 | ||||||
Advertising Sales – 0.3% | ||||||||
160,065 | Airmedia Group, Inc. (ADR)*,# | 3,178,891 | ||||||
Agricultural Chemicals – 0.4% | ||||||||
99,245 | Intrepid Potash, Inc.* | 4,713,145 | ||||||
Applications Software – 0.6% | ||||||||
564,105 | Quest Software, Inc.* | 7,513,879 | ||||||
Audio and Video Products – 0.9% | ||||||||
361,845 | DTS, Inc.*,# | 10,674,428 | ||||||
Automotive – Truck Parts and Equipment – Replacement – 0.3% | ||||||||
588,688 | Motorcar Parts of America, Inc.*,§,£ | 3,979,531 | ||||||
Building and Construction – Miscellaneous – 0.1% | ||||||||
9,940,804 | Dore Holdings, Ltd. | 1,042,700 | ||||||
Casino Hotels – 0.4% | ||||||||
1,451,136 | Century Casinos, Inc.*,#,£ | 4,817,772 | ||||||
Casino Services – 1.6% | ||||||||
4,404,201 | Elixir Gaming Technologies, Inc.*,£ | 7,883,520 | ||||||
347,580 | Elixir Gaming Technologies, Inc.*,# | 622,168 | ||||||
482,833 | Pokertek, Inc.*,£ | 1,767,169 | ||||||
5,453,641 | Progressive Gaming International Corp.*,#,£ | 9,325,726 | ||||||
19,598,583 | ||||||||
Chemicals – Plastics – 0.2% | ||||||||
213,595 | Metabolix, Inc.*,# | 2,351,681 | ||||||
Commercial Services – 4.6% | ||||||||
723,415 | CoStar Group, Inc.* | 34,687,748 | ||||||
156,220 | HMS Holdings, Corp.* | 4,025,789 | ||||||
2,346,939 | Intermap Technologies, Ltd.*,£ | 13,357,132 | ||||||
229,805 | Providence Service Corp.*,# | 6,466,713 | ||||||
58,537,382 | ||||||||
Commercial Services – Finance – 2.5% | ||||||||
254,280 | Bankrate, Inc.*,# | 13,283,587 | ||||||
444,050 | Euronet Worldwide, Inc.*,# | 7,850,804 | ||||||
567,390 | Riskmetrics Group, Inc.*,# | 10,014,434 | ||||||
31,148,825 | ||||||||
Computer Graphics – 0.9% | ||||||||
817,532 | Monotype Imaging Holdings, Inc.*,**,# | 11,976,844 | ||||||
Computer Services – 0.8% | ||||||||
3,140,420 | LivePerson, Inc.*,#,£ | 10,583,215 | ||||||
Computer Software – 1.6% | ||||||||
878,050 | Omniture, Inc.*,**,# | 20,037,101 | ||||||
Computers – Memory Devices – 1.0% | ||||||||
594,210 | Data Domain, Inc.*,# | 12,924,068 | ||||||
Computers – Other – 0.3% | ||||||||
39,045,345 | A-Max Holdings, Ltd.* | 3,889,699 | ||||||
Consulting Services – 1.7% | ||||||||
263,911 | Huron Consulting Group, Inc.*,# | 11,047,315 | ||||||
1,961,073 | Information Services Group, Inc.*,#,£ | 10,158,358 | ||||||
21,205,673 | ||||||||
Consumer Products – Miscellaneous – 1.7% | ||||||||
983,640 | Jarden Corp.*,# | 20,971,205 | ||||||
Decision Support Software – 0.3% | ||||||||
134,100 | MSCI, Inc.* | 4,159,782 | ||||||
Diagnostic Equipment – 0.4% | ||||||||
192,620 | Immucor, Inc.* | 5,196,888 | ||||||
Distribution/Wholesale – 1.5% | ||||||||
269,866 | MWI Veterinary Supply, Inc.* | 9,302,281 | ||||||
367,880 | NuCo2, Inc.*,£ | 10,175,561 | ||||||
19,477,842 | ||||||||
Diversified Operations – 1.6% | ||||||||
238,985 | Barnes Group, Inc.**,# | 6,232,729 | ||||||
28,151,608 | Polytec Asset Holdings, Ltd. | 6,234,554 | ||||||
5,207,943 | Wyndcrest Holdings LLC*, º º,§,£ | 7,291,120 | ||||||
19,758,403 | ||||||||
Drug Delivery Systems – 1.0% | ||||||||
904,930 | I-Flow Corp.*,# | 12,080,816 | ||||||
E-Commerce/Products – 1.5% | ||||||||
313,535 | Mercadolibre, Inc.*,# | 15,858,601 | ||||||
973,061 | Parent Company*,£ | 2,627,267 | ||||||
29,670 | Parent Company*,# | 80,109 | ||||||
18,565,977 | ||||||||
E-Commerce/Services – 0.4% | ||||||||
3,127,885 | Think Partnership, Inc.*,#,£ | 2,627,423 | ||||||
4,720,398 | Workstream, Inc. (U.S. Shares)*,#,£ | 2,827,519 | ||||||
5,454,942 | ||||||||
Electronic Components – Semiconductors – 1.4% | ||||||||
673,620 | IPG Photonics Corp.*,# | 11,269,662 | ||||||
282,445 | Microsemi Corp.*,** | 6,919,903 | ||||||
18,189,565 | ||||||||
E-Marketing/Information – 0.5% | ||||||||
34,869 | comScore, Inc.* | 657,978 | ||||||
271,900 | Constant Contact, Inc.*,# | 4,853,415 | ||||||
5,511,393 | ||||||||
Energy – Alternate Sources – 1.9% | ||||||||
1,012,125 | JA Solar Holdings Company, Ltd. (ADR)* | 24,301,121 | ||||||
Engineering – Research and Development Services – 0.3% | ||||||||
172,125 | Stanley, Inc.* | 4,342,714 | ||||||
Enterprise Software/Services – 5.1% | ||||||||
178,170 | Concur Technologies, Inc.*,# | 5,904,554 | ||||||
262,550 | MedAssets, Inc.*,# | 3,940,876 | ||||||
108,950 | Omnicell, Inc.* | 1,309,579 | ||||||
229,245 | Salary.com, Inc.* | 1,478,630 | ||||||
1,565,590 | Ultimate Software Group, Inc.*,**,£ | 51,335,695 | ||||||
63,969,334 | ||||||||
E-Services/Consulting – 0.9% | ||||||||
804,165 | GSI Commerce, Inc.*,# | 11,193,977 | ||||||
Finance – Investment Bankers/Brokers – 1.5% | ||||||||
229,155 | Duff & Phelps Corp.*,# | 4,140,831 | ||||||
362,930 | Evercore Partners, Inc. – Class A | 6,119,000 | ||||||
417,485 | optionsXpress Holdings, Inc.* | 8,963,403 | ||||||
19,223,234 | ||||||||
Finance – Other Services – 0.7% | ||||||||
220,805 | FCStone Group, Inc.*,# | 9,145,743 | ||||||
See Notes to Schedules of Investments and Financial Statements.
64 Janus Growth Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares/Principal/Contract Amounts | Value | |||||||
Firearms and Ammunition – 1.3% | ||||||||
1,256,365 | Smith & Wesson Holding Corp.*,# | $ | 9,422,737 | |||||
1,052,040 | Sturm Ruger and Company, Inc.*,£ | 7,911,341 | ||||||
17,334,078 | ||||||||
Gambling – Non-Hotel – 0.7% | ||||||||
907,650 | Great Canadian Gaming Corp.* | 9,150,425 | ||||||
Hotels and Motels – 1.1% | ||||||||
1,901,500 | Kingdom Hotel Investments (GDR)* | 13,880,950 | ||||||
Human Resources – 1.7% | ||||||||
335,890 | HireRight, Inc.* | 3,026,369 | ||||||
233,559 | Kenexa Corp.*,# | 4,084,947 | ||||||
781,740 | Resources Connection, Inc.* | 15,798,965 | ||||||
22,910,281 | ||||||||
Identification Systems and Devices – 1.0% | ||||||||
864,775 | L-1 Identity Solutions, Inc.*,# | 12,461,408 | ||||||
Internet Applications Software – 1.0% | ||||||||
638,620 | DealerTrack Holdings, Inc.*,# | 12,287,049 | ||||||
Internet Content – Information/News – 1.1% | ||||||||
1,640,185 | Health Grades, Inc.*,£ | 9,119,429 | ||||||
416,620 | TechTarget*,# | 5,591,040 | ||||||
14,710,469 | ||||||||
Investment Companies – 0.7% | ||||||||
609,288 | Hercules Technology Growth Capital, Inc. | 6,184,273 | ||||||
260,960 | UTEK Corp.*,# | 2,768,786 | ||||||
8,953,059 | ||||||||
Marine Services – 0.6% | ||||||||
1,548,955 | Odyssey Marine Exploration, Inc.*,# | 7,481,453 | ||||||
Medical – Biomedical and Genetic – 0.6% | ||||||||
359,330 | Acorda Therapeutics, Inc.* | 7,563,897 | ||||||
Medical – Nursing Homes – 0.5% | ||||||||
499,050 | Skilled Healthcare Group, Inc.* | 6,038,505 | ||||||
Medical – Outpatient and Home Medical Care – 1.2% | ||||||||
684,932 | Hythiam, Inc.* | 1,856,166 | ||||||
1,549,375 | Hythiam, Inc.* | 4,198,806 | ||||||
557,450 | LHC Group LLC*,# | 8,696,220 | ||||||
14,751,192 | ||||||||
Medical Instruments – 0.5% | ||||||||
140,679 | CONMED Corp.* | 3,590,128 | ||||||
151,130 | Trans1 Inc.*,# | 1,972,247 | ||||||
5,562,375 | ||||||||
Medical Labs and Testing Services – 0.9% | ||||||||
205,893 | Bio-Reference Laboratories, Inc.*,# | 5,184,386 | ||||||
235,792 | Genoptix, Inc.*,# | 6,467,774 | ||||||
11,652,160 | ||||||||
Medical Products – 2.1% | ||||||||
9,242 | Orthofix International N.V.* | 284,284 | ||||||
891,275 | PSS World Medical, Inc.*,# | 14,679,300 | ||||||
1,183,636 | Tomotherapy, Inc.*,# | 11,552,287 | ||||||
26,515,871 | ||||||||
Motion Pictures and Services – 2.4% | ||||||||
2,915,560 | Lions Gate Entertainment Corp. (U.S. Shares)*,# | 29,942,801 | ||||||
MRI and Medical Diagnostic Imaging Center – 0.5% | ||||||||
539,695 | Radnet, Inc.*,# | 3,777,865 | ||||||
208,247 | Virtual Radiologic Corp.*,#,£ | 2,909,211 | ||||||
6,687,076 | ||||||||
Networking Products – 2.2% | ||||||||
735,360 | Infinera Corp.*,# | 9,309,658 | ||||||
776,470 | Starent Networks Corp.*,# | 12,283,755 | ||||||
388,915 | Switch and Data, Inc.*,# | 5,888,173 | ||||||
27,481,586 | ||||||||
Oil – Field Services – 1.0% | ||||||||
563,928 | Flint Energy Services, Ltd.* | 12,608,283 | ||||||
Oil Companies – Exploration and Production – 1.4% | ||||||||
277,860 | Carrizo Oil & Gas, Inc.*,**,# | 17,641,331 | ||||||
Pharmacy Services – 1.3% | ||||||||
581,020 | HealthExtras, Inc.* | 16,396,384 | ||||||
Physical Therapy and Rehabilitation Centers – 0.7% | ||||||||
268,880 | Psychiatric Solutions, Inc.*,# | 9,332,825 | ||||||
Physician Practice Management – 2.7% | ||||||||
200,460 | Athenahealth, Inc.*,# | 5,011,500 | ||||||
453,525 | Healthways, Inc.*,**,# | 16,567,267 | ||||||
192,210 | Pediatrix Medical Group, Inc.* | 13,074,124 | ||||||
34,652,891 | ||||||||
Printing – Commercial – 3.1% | ||||||||
178,660 | Cenveo, Inc.*,# | 1,834,838 | ||||||
1,121,479 | VistaPrint, Ltd.*,# | 38,163,930 | ||||||
39,998,768 | ||||||||
Private Corrections – 1.5% | ||||||||
712,880 | Geo Group, Inc.*,**,# | 18,855,676 | ||||||
Publishing – Newspapers – 0.7% | ||||||||
513,515 | Dolan Media*,# | 8,904,350 | ||||||
Real Estate Management/Services – 3.8% | ||||||||
691,720 | E-House China Holdings, Ltd. (ADR)*,# | 11,565,558 | ||||||
1,979,027 | LPS Brasil – Consultoria de Imoveis S.A. | 36,086,247 | ||||||
47,651,805 | ||||||||
Real Estate Operating/Development – 0.4% | ||||||||
343,165 | Rodobens Negocios Imobiliarios S.A. | 4,646,574 | ||||||
Retail – Perfume and Cosmetics – 0.1% | ||||||||
106,935 | Ulta Salon, Cosmetics & Fragrance, Inc.*,# | 1,513,130 | ||||||
Retail – Petroleum Products – 1.1% | ||||||||
557,110 | World Fuel Services Corp.# | 13,682,622 | ||||||
Retail – Sporting Goods – 1.0% | ||||||||
605,790 | Zumiez, Inc.*,# | 12,691,301 | ||||||
Retail – Video Rental – 0.2% | ||||||||
100,000 | Genius Products, Inc.* | 55,000 | ||||||
4,750,000 | Genius Products, Inc.*,§,£ | 2,612,500 | ||||||
2,667,500 | ||||||||
Schools – 2.4% | ||||||||
366,464 | American Public Education, Inc.* | 11,803,805 | ||||||
684,565 | Anhanguera Educacional* | 11,411,477 | ||||||
50,825 | Capella Education Co.* | 3,277,704 | ||||||
290,355 | Corinthian Colleges, Inc.* | 3,295,529 | ||||||
29,788,515 | ||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2008 65
Table of Contents
Janus Venture Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares/Principal/Contract Amounts | Value | |||||||
Telecommunication Services – 2.8% | ||||||||
156,121 | 012 Smile.Communications, Ltd. (U.S. Shares)* | $ | 1,658,005 | |||||
775,570 | NeuStar, Inc. – Class A* | 21,335,930 | ||||||
515,205 | SAVVIS, Inc.*,# | 7,547,753 | ||||||
1,581,188 | UCN, Inc.*,£ | 4,664,505 | ||||||
35,206,193 | ||||||||
Theaters – 1.0% | ||||||||
674,530 | National Cinemedia, Inc.# | 12,923,995 | ||||||
Toys – 1.3% | ||||||||
563,450 | Marvel Entertainment, Inc.*,**,# | 16,165,381 | ||||||
Transactional Software – 4.1% | ||||||||
613,660 | Innerworkings, Inc.*,# | 8,247,590 | ||||||
998,240 | Solera Holdings, Inc.* | 25,764,573 | ||||||
632,570 | SXC Health Solutions Corp. (U.S. Shares)*,# | 9,830,138 | ||||||
570,012 | Yucheng Technologies Ltd. (U.S. Shares)* | 8,590,081 | ||||||
52,432,382 | ||||||||
Transportation – Marine – 1.1% | ||||||||
1,323,123 | Horizon Lines, Inc. – Class A**,# | 13,958,948 | ||||||
Transportation – Truck – 1.8% | ||||||||
493,410 | Forward Air Corp.**,# | 16,820,347 | ||||||
218,250 | Old Dominion Freight Line, Inc.* | 6,700,275 | ||||||
23,520,622 | ||||||||
Veterinary Diagnostics – 0.2% | ||||||||
341,695 | Animal Health International, Inc.* | 3,003,499 | ||||||
Web Hosting/Design – 4.6% | ||||||||
482,567 | Equinix, Inc.*,**,# | 43,633,707 | ||||||
3,704,519 | NaviSite Inc.*,£ | 14,410,579 | ||||||
58,044,286 | ||||||||
Wire and Cable Products – 0.9% | ||||||||
623,061 | Fushi Copperweld, Inc.* | 10,074,897 | ||||||
86,955 | Fushi Copperweld, Inc.* | 1,406,062 | ||||||
11,480,959 | ||||||||
Wireless Equipment – 0.2% | ||||||||
65,160 | SBA Communications Corp. – Class A* | 2,107,274 | ||||||
Total Common Stock (cost $1,177,609,380) | 1,256,025,812 | |||||||
Warrants – 0% | ||||||||
Automotive – Truck Parts and Equipment – Replacement – 0% | ||||||||
88,303 | Motorcar Parts of America, Inc. – expires 5/17/12 º º,§ | 43,348 | ||||||
Casino Services – 0% | ||||||||
146,926 | Pokertek, Inc. – expires 4/23/12 º º,§ | 47,060 | ||||||
Retail – Video Rental – 0% | ||||||||
1,425,000 | Genius Products, Inc. – expires 12/5/10 º º,§ | 35,625 | ||||||
Total Warrants (cost $1,994,295) | 126,033 | |||||||
Purchased Options – Calls – 0.3% | ||||||||
80,391 | Parent Company (LEAPS) expires October 2009 exercise price $6.40 | 38,041 | ||||||
20,231 | Parent Company (LEAPS) expires October 2009 exercise price $6.85 | 8,794 | ||||||
2,000 | Equinix, Inc. expires September 2008 exercise price $80.00** | 3,240,000 | ||||||
Total Purchased Options – Calls (premiums paid $1,752,075) | 3,286,835 | |||||||
Purchased Option – Puts – 0.1% | ||||||||
2,427 | Horizon Lines, Inc. – Class A expires May 2008 exercise price $17.50 (premiums paid $278,315) | 1,650,360 | ||||||
Money Markets – 0.5% | ||||||||
51,570 | Janus Institutional Cash Management Fund – Institutional Shares, 2.82% | 51,570 | ||||||
6,218,375 | Janus Institutional Money Market Fund – Institutional Shares, 2.74% | 6,218,375 | ||||||
Total Money Markets (cost $6,269,945) | 6,269,945 | |||||||
Other Securities – 25.1% | ||||||||
141,802,731 | Allianz Dresdner Daily Asset Fund† | 141,802,731 | ||||||
43,399,289 | Repurchase Agreements† | 43,399,289 | ||||||
Time Deposits: | ||||||||
10,468,793 | Abbey National Treasury, N.A., 2.375%, 5/1/08† | 10,468,793 | ||||||
4,670,729 | ABN-AMRO Bank N.V., N.A., 2.26%, 5/1/08† | 4,670,729 | ||||||
5,447,757 | BNP Paribas, New York, N.A., 2.50%, 5/1/08† | 5,447,757 | ||||||
10,895,515 | Calyon, N.A., 2.50%, 5/1/08† | 10,895,515 | ||||||
3,792,031 | Chase Bank USA, N.A., 2.25%, 5/1/08† | 3,792,031 | ||||||
11,985,066 | Danske Bank, Cayman Islands, N.A., 2.53%, 5/1/08† | 11,985,066 | ||||||
7,626,860 | Deutsche Bank A.G., N.A., 2.30%, 5/1/08† | 7,626,860 | ||||||
10,895,515 | Dexia Bank S.A. Brussels, N.A., 2.50%, 5/1/08† | 10,895,515 | ||||||
10,895,515 | ING Bank N.V., Amsterdam, N.A., 2.4375%, 5/1/08† | 10,895,515 | ||||||
10,895,515 | Lloyd’s TSB Group PLC, N.A., 2.45%, 5/1/08† | 10,895,515 | ||||||
1,612,008 | Natixis, N.A., 2.38%, 5/1/08† | 1,612,008 | ||||||
10,895,515 | Natixis, N.A., 2.43%, 5/1/08† | 10,895,515 | ||||||
10,895,515 | Nordea Bank Finland PLC, N.A., 2.50%, 5/1/08† | 10,895,515 | ||||||
10,755,527 | Svenska Handelsbanken, N.A., 2.40%, 5/1/08† | 10,755,527 | ||||||
10,895,515 | Wells Fargo Bank, N.A., 2.375%, 5/1/08† | 10,895,515 | ||||||
Total Other Securities (cost $317,829,396) | 317,829,396 | |||||||
Total Investments (total cost $1,505,733,406) – 125.3% | 1,585,188,381 | |||||||
Securities Sold Short – (1.9)% | ||||||||
Computer Software – (0.1)% | ||||||||
42,607 | Blackbaud, Inc. | (1,000,838) | ||||||
Diversified Operations – (0.2)% | ||||||||
50,000 | Matthews International Corp. | (2,472,000) | ||||||
Electronic Components – Semiconductors – (0.2)% | ||||||||
123,580 | Semtech Corp.* | (2,006,939) | ||||||
Energy – Alternate Sources – (0.1)% | ||||||||
150,000 | MGP Ingredients, Inc. | (1,098,000) | ||||||
See Notes to Schedules of Investments and Financial Statements.
66 Janus Growth Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares/Principal/Contract Amounts | Value | |||||||
Hazardous Waste Disposal – (0.4)% | ||||||||
100,000 | Stericycle, Inc.* | $ | (5,338,000) | |||||
Hospital Beds and Equipment – (0.2)% | ||||||||
100,000 | Hillenbrand Industries, Inc. | (2,513,000) | ||||||
Retail – Apparel and Shoe – (0.6)% | ||||||||
80,000 | Columbia Sportswear Co. | (3,356,800) | ||||||
100,500 | J. Crew Group, Inc.* | (4,773,750) | ||||||
(8,130,550) | ||||||||
Retail – Perfume and Cosmetics – (0.1)% | ||||||||
28,400 | Cash America International, Inc. | (1,158,436) | ||||||
Total Securities Sold Short (proceeds $23,097,269) | (23,717,764) | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (23.4)% | (295,956,822) | |||||||
Net Assets – 100% | $ | 1,265,513,795 | ||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 43,066,329 | 2.7% | |||||
Brazil | 52,144,299 | 3.3% | ||||||
Canada | 82,147,193 | 5.2% | ||||||
Cayman Islands | 59,161,074 | 3.7% | ||||||
Israel | 1,658,005 | 0.1% | ||||||
Netherlands | 284,284 | 0.0% | ||||||
United States†† | 1,338,137,116 | 84.4% | ||||||
Virgin Islands | 8,590,081 | 0.6% | ||||||
Total | $ | 1,585,188,381 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (64.0% excluding Short-Term Securities and Other Securities) |
Summary of Investments by Country – (Short Positions)
% of Securities | ||||||||
Country | Value | Sold Short | ||||||
United States | $ | (23,717,764) | 100.0% | |||||
Total | $ | (23,717,764) | 100.0% |
Schedule of Written Options – Calls | Value | |||
Equinix, Inc. expires September 2008 4,000 contracts exercise price $95.00 | $ | (3,440,000) | ||
Horizon Lines, Inc. – Class A expires May 2008 2,427 contracts exercise price $20.00 | (2,427) | |||
Omniture, Inc. expires June 2008 4,200 contracts exercise price $25.00 | (560,700) | |||
Total Written Options – Calls | ||||
(Premiums received $1,959,454) | $ | (4,003,127) | ||
Schedule of Written Options – Puts | ||||
Horizon Lines, Inc. – Class A expires May 2008 2,427 contracts exercise price $15.00 | $ | (1,055,745) | ||
Omniture, Inc. expires June 2008 4,200 contracts exercise price $17.50 | (218,148) | |||
Total Written Options – Puts | ||||
(Premiums received $1,110,750) | $ | (1,273,893) | ||
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2008 67
Table of Contents
Janus Global Life Sciences Fund (unaudited) | Ticker: JAGLX |
Fund Snapshot
This fund seeks companies around the world that are dedicated to improving the quality of life for a growing and aging world.
![(ANDY ACKER PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646packeran.jpg)
Andy Acker
portfolio manager
Introduction
April 30, 2008 marked the completion of my first year as portfolio manager of the Janus Global Life Sciences Fund. I had worked closely with former manager Tom Malley over the previous eight years. While Tom’s leadership will be missed, I am fortunate to be working with an outstanding team of six dedicated health care analysts (combined we have over 65 years of professional investment experience). Their considerable efforts and strong stock picking allowed for a smooth transition.
Performance Overview
The Janus Global Life Sciences Fund returned 2.42% for the twelve-month period and (6.88)% for the six-month period, ended April 30, 2008. This performance compared favorably to the (4.68)% twelve-month return and (9.64)% six-month return for the S&P 500® Index (the Fund’s primary benchmark), and significantly outperformed the (10.47)% twelve-month return and (9.75)% six-month return for the MSCI1 World Health Care IndexSM (the Fund’s secondary benchmark). The 12.89% outperformance versus the health care benchmark over the past year helped place the Fund in the top 4% of its Lipper peer group.
As of April 30, 2008 | One Year | Three Years | Five Years | |||
Lipper Quartile | 1st | 1st | 1st | |||
Rank | (7 out of 195) | (25 out of 153) | (18 out of 141) | |||
Percentile | 4th | 17th | 13th |
Lipper rankings based on total returns in the Lipper Health/Biotechnology Funds category.
Data presented reflects past performance, which is no guarantee of future results.
Investment Strategy
The Fund seeks to uncover opportunities that span the life sciences spectrum, including stocks in the biotechnology, pharmaceuticals, health care services, and medical technology arenas. Our bottom-up fundamental approach utilizes extensive proprietary research in an effort to discover the best investment ideas across the globe.
Portfolio Composition
The portfolio includes companies that can be categorized into three conceptual groups: core growth, emerging growth and opportunistic investments. In general, about half of the portfolio is invested in core growth holdings (companies with dominant franchises that generate strong, consistent free cash flow). Emerging growth companies (those with new products that we believe can drive earnings acceleration) represent 20-30% of the portfolio. The remaining weighting consists of opportunistic investments, exemplified by companies suffering from what we feel are short-term market misperceptions that should resolve over time.
Stocks That Aided Returns
Unlike many health care sector funds, the Janus Global Life Sciences Fund has a broad mandate which includes the ability to invest in the agricultural industry. The agricultural sector is experiencing tremendous growth, driven by strong demand from emerging markets and tight global supplies.
The Fund’s top contributor for the period was K+S A.G., the largest producer of potash (a key fertilizer ingredient) in Europe. After 20 years of stagnation, potash prices have accelerated dramatically (up over 300% over the past two years), driven by strong demand for improved crop production yields. Given the company’s relatively fixed cost base, rising prices have led to a disproportionate profit gain for K+S, and an attractive return on our investment (up over 100% during the six-month period).
Syngenta A.G., the Swiss agrichemical giant, was another top contributor for the Fund during the period. The company recently reported double-digit revenue growth and continued margin expansion. Beyond pesticides and herbicides, Syngenta is one of the world leaders in developing biotechnology based seeds to improve agricultural productivity, a technology which could help alleviate the supply/demand imbalances for food currently facing the world.
68 Janus Growth Funds April 30, 2008
Table of Contents
(unaudited)
In the biotechnology sector, United Therapeutics was a top contributor, benefiting from successful clinical trial results for a new inhaled formulation of key drug Remodulin. Inhaled Remodulin represents an advance for patients suffering from a severe disease called pulmonary hypertension. United Therapeutics represents a key theme of the Fund, investing in companies that we believe are addressing high unmet medical needs.
Stocks That Weighed on Returns
The largest detractor from Fund performance during the period was pharmaceutical firm Merck & Company. After several years of strong price appreciation, Merck’s stock was adversely impacted in early 2008 by a negative trial involving Vytorin, a key cholesterol drug marketed jointly with Schering-Plough (another Fund holding). This trial outcome (and the subsequent negative press coverage) led to a substantial decline in prescriptions and projected sales for the franchise. Despite this setback, we continue to like the long-term outlook for the company and added to the position.
Pharmaceutical company Shire was another weak performer due to the slower-than-expected launch of a new drug, Vyvanse, for the treatment of attention deficit hyperactivity disorder (ADHD). While the pace of this launch did not meet high expectations, Shire has a number of growing products in what we feel are attractive specialty markets with long patent lifecycles. We continue to like the long-term outlook for the company.
In the managed care sector, UnitedHealth Group detracted from returns during the period as the stock suffered from near-term earnings revisions and concerns about the upcoming presidential election cycle. We think the company should be able to correct some recent missteps and continue to believe the stock represents an attractive value.
Risk Management
The Fund experienced several setbacks in 2006, which prompted us to re-evaluate and further refine our investment process. In consultation with Janus’ head of risk management, Dan Scherman, we incorporated a value-at-risk (VAR) approach to further strengthen the Fund’s risk control framework. This approach focuses our attention on downside risk, especially that arising from binary events (such as clinical trial announcements or regulatory decisions) that can lead to significant share price volatility. In practice, this means the position size of any one holding is limited so that, in a worst-case scenario, the estimated adverse impact from a particular event should not exceed 1% of the Fund’s performance. We incorporated the VAR approach at the beginning of 2007 and are encouraged by the results so far.
Looking Ahead
We believe aging populations and technological advances will continue to support rapid health care spending growth across the world’s economies. We also see significant opportunities in emerging markets as rising standards of living in those regions should lead to increased health care expenditures.
The underperformance of health care stocks versus the broader indices over the last five years has created what we feel are compelling valuations within the sector. In addition, we think concerns about slowing economic growth should highlight the sector’s defensive qualities.
We have conviction in the names we own and are pleased with the Fund’s recent and long term performance. We continue to seek investments within life sciences that we feel represent the sector’s best opportunities.
Thank you for your continued investment in the Janus Global Life Sciences Fund.
1 | MSCI is Morgan Stanley Capital International. |
Janus Growth Funds April 30, 2008 69
Table of Contents
Janus Global Life Sciences Fund (unaudited)
Janus Global Life Sciences Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
K+S A.G. | 1.71% | |||
Syngenta A.G. | 0.52% | |||
United Therapeutics Corp. | 0.50% | |||
MGI Pharmaceutical, Inc. | 0.45% | |||
Respironics, Inc. | 0.40% |
5 Bottom Performers – Holdings
Contribution | ||||
Merck & Company, Inc. | (1.54)% | |||
Shire PLC (ADR) | (0.79)% | |||
Coventry Health Care, Inc. | (0.78)% | |||
UnitedHealth Group, Inc. | (0.78)% | |||
Schering-Plough Corp. | (0.73)% |
5 Top Performers – Sectors
Fund Weighting | S&P 500® | |||||||||||
Fund Contribution | (% of Net Assets) | Index Weighting | ||||||||||
Materials | 2.59% | 7.37% | 3.45% | |||||||||
Financials | 0.08% | 2.64% | 17.59% | |||||||||
Other* | 0.01% | (0.01)% | 0.00% | |||||||||
Consumer Discretionary | 0.00% | 0.00% | 8.67% | |||||||||
Energy | 0.00% | 0.00% | 12.83% |
5 Bottom Performers – Sectors
Fund Weighting | S&P 500® | |||||||||||
Fund Contribution | (% of Net Assets) | Index Weighting | ||||||||||
Health Care | (8.76)% | 83.70% | 12.09% | |||||||||
Industrials | (0.25)% | 0.44% | 11.71% | |||||||||
Consumer Staples | (0.19)% | 5.86% | 10.51% | |||||||||
Utilities | 0.00% | 0.00% | 3.63% | |||||||||
Telecommunication Services | 0.00% | 0.00% | 3.46% |
* | Industry not classified by Global Classification Standard. |
70 Janus Growth Funds April 30, 2008
Table of Contents
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2008
CVS/Caremark Corp. Retail – Drug Store | 4.0% | |||
Roche Holding A.G. Medical – Drugs | 3.9% | |||
Merck & Company, Inc. Medical – Drugs | 3.8% | |||
Bayer A.G. Chemicals – Diversified | 3.5% | |||
Celgene Corp. Medical – Biomedical and Genetic | 3.4% | |||
18.6% |
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20p01.gif)
Emerging markets comprised 1.9% of total net assets.
*Includes Securities Sold Short of (1.0)%
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20t01.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20c01.gif)
Janus Growth Funds April 30, 2008 71
Table of Contents
Janus Global Life Sciences Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20m01.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratio – for the fiscal year ended October 31, 2007 | ||||||||||
Fiscal | One | Five | Since | Total Annual Fund | |||||||
Year-to-Date | Year | Year | Inception* | Operating Expenses | |||||||
Janus Global Life Sciences Fund | (6.88)% | 2.42% | 11.78% | 9.07% | 1.01% | ||||||
S&P 500® Index | (9.64)% | (4.68)% | 10.62% | 2.95% | |||||||
Morgan Stanley Capital International World Health Care IndexSM | (9.75)% | (10.47)% | 6.88% | 1.75% | |||||||
Lipper Quartile | – | 1st | 1st | 1st | |||||||
Lipper Ranking – based on total return for Health/Biotechnology Funds | – | 7/195 | 18/141 | 6/47 | |||||||
Visit janus.com to view current performance and characteristic information | |||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
A 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.)
See important disclosures on the next page.
72 Janus Growth Funds April 30, 2008
Table of Contents
(unaudited)
The Fund’s performance may be affected by risks that include those associated with investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and other details.
Foreign securities have additional risks including exchange rate changes, political and economic upheaval, the relative lack of information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. These risks are magnified in emerging markets. The prices of foreign securities held by the Fund, and therefore the Fund’s performance, may decline in response to such risks.
This Fund invests in certain industry groups, which may react similarly to market developments (resulting in greater price volatility), and may have significant exposure to foreign markets (which include risks such as currency fluctuation and political uncertainty).
Funds that invest 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 and interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
The use of short sales may cause the Fund to have higher expenses than those of other equity funds. Short sales are speculative transactions and involve special risks, including a greater reliance on the investment team’s ability to accurately anticipate the future value of a security. The Fund’s losses are potentially unlimited in a short sale transaction. The Fund’s use of short sales in effect leverages the Fund’s portfolio. The Fund’s use of leverage may result in risks and can magnify the effect of any losses. There is no assurance that a leveraging strategy will be successful.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – December 31, 1998 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 931.20 | $ | 4.61 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.09 | $ | 4.82 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.96%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
Janus Growth Funds April 30, 2008 73
Table of Contents
Janus Global Life Sciences Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Common Stock – 96.0% | ||||||||
Agricultural Chemicals – 1.8% | ||||||||
66,185 | Intrepid Potash, Inc.* | $ | 3,143,126 | |||||
39,803 | Syngenta A.G.** | 11,791,007 | ||||||
14,934,133 | ||||||||
Chemicals – Diversified – 6.0% | ||||||||
341,376 | Bayer A.G.**,# | 29,025,108 | ||||||
50,632 | K+S A.G.** | 20,984,099 | ||||||
50,009,207 | ||||||||
Drug Delivery Systems – 1.0% | ||||||||
191,855 | Hospira, Inc.* | 7,894,833 | ||||||
Medical – Biomedical and Genetic – 19.8% | ||||||||
702,120 | Acorda Therapeutics, Inc.*,# | 14,779,626 | ||||||
234,611 | Alexion Pharmaceuticals, Inc.*,**,# | 16,511,922 | ||||||
175,430 | AMAG Pharmaceuticals, Inc.*,# | 7,197,893 | ||||||
300,460 | Amgen, Inc.* | 12,580,260 | ||||||
478,483 | Arena Pharmaceuticals, Inc.*,# | 2,674,720 | ||||||
77,970 | Biogen Idec, Inc.* | 4,731,999 | ||||||
452,950 | Celgene Corp.* | 28,146,312 | ||||||
264,159 | Cougar Biotechnology, Inc.* | 5,330,729 | ||||||
520,300 | Exelixis, Inc.*,# | 3,959,483 | ||||||
1,271,821 | Fibrogen, Inc.*, º º,§ | 7,440,153 | ||||||
194,030 | Genentech, Inc.* | 13,232,846 | ||||||
282,095 | Genzyme Corp.* | 19,845,383 | ||||||
1,147,687 | Human Genome Sciences, Inc.* | 7,517,350 | ||||||
105,565 | Millipore Corp.* | 7,400,107 | ||||||
603,746 | Savient Pharmaceuticals, Inc.*,# | 13,185,813 | ||||||
164,534,596 | ||||||||
Medical – Drugs – 31.2% | ||||||||
828,325 | �� | Achillion Pharmaceuticals, Inc.*,#,£ | 3,686,046 | |||||
648,028 | Array BioPharma, Inc.*,# | 4,030,734 | ||||||
418,700 | AstraZeneca Group PLC (ADR)** | 17,577,026 | ||||||
392,196 | Auxilium Pharmaceuticals, Inc.*,# | 12,060,027 | ||||||
449,100 | BioForm Medical, Inc.*,# | 2,281,428 | ||||||
575,740 | Elan Corporation PLC (ADR)*,**,# | 15,136,205 | ||||||
239,635 | Eli Lilly and Co.** | 11,536,029 | ||||||
530,220 | Forest Laboratories, Inc.* | 18,403,936 | ||||||
406,004 | K-V Pharmaceutical Co. – Class A*,# | 9,922,738 | ||||||
821,075 | Merck & Company, Inc. | 31,233,692 | ||||||
102,824 | Merck KGaA** | 14,624,445 | ||||||
334,602 | Novartis A.G.** | 16,996,087 | ||||||
334,990 | OSI Pharmaceuticals, Inc.*,# | 11,607,404 | ||||||
194,901 | Roche Holding A.G.** | 32,462,628 | ||||||
93,420 | Sanofi-Aventis** | 7,195,093 | ||||||
745,660 | Schering-Plough Corp. | 13,727,601 | ||||||
299,431 | Shire PLC (ADR)**,# | 16,450,739 | ||||||
463,905 | Wyeth | 20,629,855 | ||||||
259,561,713 | ||||||||
Medical – Generic Drugs – 2.2% | ||||||||
297,890 | Alpharma, Inc. – Class A*,# | 7,331,073 | ||||||
8,364,183 | Mediquest Therapeutics*, º º,§,£ | 5,018,510 | ||||||
251,472 | Pharmstandard (GDR) (144A)* | 6,257,384 | ||||||
18,606,967 | ||||||||
Medical – HMO – 6.2% | ||||||||
441,481 | Coventry Health Care, Inc.* | 19,747,445 | ||||||
304,225 | Humana, Inc.* | 14,538,913 | ||||||
529,075 | UnitedHealth Group, Inc. | 17,263,717 | ||||||
51,550,075 | ||||||||
Medical Instruments – 3.9% | ||||||||
776,447 | GMP Companies, Inc. º º,§ | 7,011,316 | ||||||
286,470 | Medtronic, Inc. | 13,945,360 | ||||||
271,165 | St. Jude Medical, Inc.* | 11,871,604 | ||||||
32,828,280 | ||||||||
Medical Labs and Testing Services – 1.1% | ||||||||
406,805 | Diagnosticos da America | 9,351,839 | ||||||
Medical Products – 2.4% | ||||||||
913,285 | Tomotherapy, Inc.*,# | 8,913,662 | ||||||
294,518 | Xtent, Inc.*,# | 1,042,594 | ||||||
136,670 | Zimmer Holdings, Inc.*,** | 10,135,447 | ||||||
20,091,703 | ||||||||
Optical Supplies – 1.2% | ||||||||
64,850 | Alcon, Inc. (U.S. Shares)** | 10,246,300 | ||||||
Pharmacy Services – 2.0% | ||||||||
332,440 | Medco Health Solutions, Inc.* | 16,469,078 | ||||||
Physician Practice Management – 2.1% | ||||||||
255,345 | Pediatrix Medical Group, Inc.* | 17,368,567 | ||||||
REIT – Diversified – 1.3% | ||||||||
774,534 | CapitalSource, Inc.# | 10,882,203 | ||||||
REIT – Manufactured Homes – 1.1% | ||||||||
84,395 | Alexandria Real Estate Equities, Inc.# | 8,864,007 | ||||||
Retail – Drug Store – 4.0% | ||||||||
826,914 | CVS/Caremark Corp. | 33,382,518 | ||||||
Soap and Cleaning Preparations – 1.1% | ||||||||
157,258 | Reckitt Benckiser PLC** | 9,161,806 | ||||||
Therapeutics – 7.5% | ||||||||
147,005 | Amylin Pharmaceuticals, Inc.*,# | 4,054,398 | ||||||
252,505 | BioMarin Pharmaceutical, Inc.*,# | 9,206,332 | ||||||
411,312 | Gilead Sciences, Inc.* | 21,289,509 | ||||||
466,715 | Onyx Pharmaceuticals, Inc.*,# | 16,409,699 | ||||||
380,685 | Theravance, Inc.*,# | 4,754,756 | ||||||
79,357 | United Therapeutics Corp.*,# | 6,705,667 | ||||||
62,420,361 | ||||||||
Total Common Stock (cost $696,757,232) | 798,158,186 | |||||||
Preferred Stock – 0.1% | ||||||||
Medical – Biomedical and Genetic – 0.1% | ||||||||
26,677 | Cougar Biotechnology, Inc. (cost $58,136) | 538,342 | ||||||
Warrants – 0% | ||||||||
Medical – Generic Drugs – 0% | ||||||||
3,345,673 | Mediquest Therapeutics – expires 6/15/11*, º º,§ | 282,040 | ||||||
450,280 | Mediquest Therapeutics – expires 6/15/12*, º º,§ | 47,460 | ||||||
Total Warrants (cost $52,683) | 329,500 | |||||||
Promissory Note – 0.2% | ||||||||
Medical – Generic Drugs – 0.2% | ||||||||
$ | 1,500,934 | Mediquest Therapeutics, 14.00%, due 3/31/09 º º,§ (cost $1,500,934) | 1,448,251 | |||||
Money Markets – 3.0% | ||||||||
5,357,339 | Janus Institutional Cash Management Fund – Institutional Shares, 2.82% | 5,357,339 | ||||||
19,632,438 | Janus Institutional Money Market Fund – Institutional Shares, 2.74% | 19,632,438 | ||||||
Total Money Markets (cost $24,989,777) | 24,989,777 | |||||||
See Notes to Schedules of Investments and Financial Statements.
74 Janus Growth Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Other Securities – 18.0% | ||||||||
36,697,691 | Allianz Dresdner Daily Asset Fund† | $ | 36,697,691 | |||||
27,946,085 | Repurchase Agreements† | 27,946,085 | ||||||
Time Deposits: | ||||||||
6,741,165 | Abbey National Treasury Services, N.A., 2.375%, 5/1/08† | 6,741,165 | ||||||
3,007,621 | ABN-Amro Bank N.V., N.A., 2.26%, 5/1/08† | 3,007,621 | ||||||
3,507,972 | BNP Paribas, New York, N.A., 2.50%, 5/1/08† | 3,507,972 | ||||||
7,015,944 | Calyon, N.A., 2.50%, 5/1/08† | 7,015,944 | ||||||
2,441,801 | Chase Bank U.S.A., N.A., 2.25%, 5/1/08† | 2,441,801 | ||||||
7,717,538 | Danske Bank A/S Cayman, N.A., 2.53%, 5/1/08† | 7,717,538 | ||||||
4,911,161 | Deutsche Bank A.G., N.A., 2.30%, 5/1/08† | 4,911,161 | ||||||
7,015,944 | Dexia Bank S.A. Brussels, N.A., 2.50%, 5/1/08† | 7,015,944 | ||||||
7,015,944 | ING Bank N.V. Amsterdam, N.A., 2.4375%, 5/1/08† | 7,015,944 | ||||||
7,015,944 | Lloyd’s TSB Bank PLC London, N.A., 2.45%, 5/1/08† | 7,015,944 | ||||||
1,038,019 | Natixis, N.A., 2.38%, 5/1/08† | 1,038,019 | ||||||
7,015,944 | Natixis, N.A., 2.43%, 5/1/08† | 7,015,944 | ||||||
7,015,944 | Nordea Bank PLC Finland, N.A., 2.50%, 5/1/08† | 7,015,944 | ||||||
6,925,802 | Svenska Handelsbanken, N.A., 2.40%, 5/1/08† | 6,925,802 | ||||||
7,015,944 | Wells Fargo Bank, N.A., 2.375%, 5/1/08† | 7,015,944 | ||||||
Total Other Securities (cost $150,046,463) | 150,046,463 | |||||||
Total Investments (total cost $873,405,225) – 117.3% | 975,510,519 | |||||||
Securities Sold Short – (1.0)% | ||||||||
Hospital Beds and Equipment – (1.0)% | ||||||||
315,845 | Hillenbrand Industries, Inc. (proceeds $8,281,024) | (7,937,185) | ||||||
Liabilities, net of Cash, Receivables and Other Assets – (16.3)% | (136,178,909) | |||||||
Net Assets – 100% | $ | 831,394,425 | ||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Brazil | $ | 9,351,839 | 1.0% | |||||
France | 7,195,093 | 0.7% | ||||||
Germany | 64,633,652 | 6.6% | ||||||
Ireland | 15,136,205 | 1.6% | ||||||
Russia | 6,257,384 | 0.7% | ||||||
Switzerland | 71,496,023 | 7.3% | ||||||
United Kingdom | 43,189,571 | 4.4% | ||||||
United States†† | 758,250,752 | 77.7% | ||||||
Total | $ | 975,510,519 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (59.8% excluding Short-Term Securities and Other Securities) |
Summary of Investments by Country – (Short Positions)
% of Securities | ||||||||
Country | Value | Sold Short | ||||||
United States | $ | (7,937,185) | 100.0% | |||||
Total | $ | (7,937,185) | 100.0% |
Forward Currency Contracts, Open
Currency Sold and | Currency | Currency | Unrealized | |||||||||
Settlement Date | Units Sold | Value in $U.S. | Gain/(Loss) | |||||||||
British Pound 5/14/08 | 3,685,000 | $ | 7,321,545 | $ | 24,765 | |||||||
British Pound 8/14/08 | 3,352,000 | 6,613,241 | (85,967) | |||||||||
Euro 5/14/08 | 10,650,000 | 16,621,266 | (1,044,066) | |||||||||
Euro 8/14/08 | 4,218,000 | 6,552,665 | (190,867) | |||||||||
Euro 10/16/08 | 6,000,000 | 9,291,941 | 97,363 | |||||||||
Swiss Franc 8/14/08 | 12,700,000 | 12,271,347 | (722,953) | |||||||||
Swiss Franc 10/23/08 | 19,850,000 | 19,178,186 | (84,304) | |||||||||
Total | $ | 77,850,191 | $ | (2,006,029) |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2008 75
Table of Contents
Janus Global Technology Fund (unaudited) | Ticker: JAGTX |
Fund Snapshot
This fund pursues forward-thinking companies around the globe that are advancing the frontiers of technology in profitable ways.
![(BARNEY WILSON PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646pwilsonb.jpg)
Barney Wilson
portfolio manager
Performance Overview
During the six months ended April 30, 2008, Janus Global Technology Fund returned (12.26)%. By comparison, the Fund’s benchmarks, the Morgan Stanley Capital International (MSCI) World Information Technology IndexSM and the S&P 500® Index returned (14.29)% and (9.64)%, respectively.
Investment Strategy
Janus Global Technology Fund’s objective is to seek long-term growth of capital. I work closely with the Janus analysts covering technology and technology-related companies to identify high quality and innovative technology companies that are growing earnings and cash flow in excess of market expectations. While investing in the information technology sector can be more volatile than a broader market index, I believe the sector can provide an excellent opportunity for attractive investment returns if one can tolerate the volatility.
Three things are at the core of the Fund’s investment and portfolio construction philosophy: fundamental research, valuation analysis and diversification. First, in the intensive research that is a hallmark of Janus, we seek out the customers, competitors and suppliers of a company to develop our view of the future fundamental performance of that company. We try to anticipate material changes in industries and to understand which companies are going to win on a multi-year basis in the product marketplace and why. Second, in conducting our valuation analysis, we focus foremost on the value of the future cash flows of the company. Third, when constructing the Fund, I deliberately seek to control risk by diversifying across multiple dimensions, such as subsectors, geographies, market capitalizations and valuation ranges.
To anticipate changes in foreign currency, I may hedge a portion of the Fund’s foreign currency exposure. Forward foreign currency exchange contracts may be used to buy and sell currencies in order to fix a price for foreign securities. Please see the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
Contributors to Fund Performance
One investment theme in the Fund is alternative energy, which represents only a small part of today’s energy generation. As the use grows, however, technology companies that provide competitive and effective solutions should benefit. Two of the strongest contributors for the period are involved in solar energy.
First Solar produces solar cells using thin-film technology, a specialized approach to solar energy production. The company continued to report strong results and growth as it ramped up its production. JA Solar Holdings Company also produces solar cells, although with a different technology. These cells, using silicon, are larger but more efficient than thin-film technology. It is a more traditional technology, but I believe JA Solar has advantages over competitors, such as lower production costs and access to refined silicon, which has been in short supply.
Detractors from Performance
Telecommunication services company SAVVIS was the largest detractor during the period, as the company reported several disappointing quarters. While the company has had inconsistent execution, our research indicates that SAAVIS is still well-positioned. The company, which runs data centers for hosting and optimizing web pages and content delivery, has been a predictable, recurring revenue business with little economic sensitivity. It has benefited from pricing power and a strong secular backdrop.
ARM Holdings, a U.K. electronics company, fell after reporting mixed results during the period. The company, which generates licensing revenue partly from its designs for integrated circuits in smart phones, was hurt by lower-than-expected revenues and continued weakness in the U.S. dollar. I believe the short-term issues mask the long-term opportunities, as smart phones will likely come to represent a greater share of the wireless handset market, providing ARM with the opportunity to sell chip designs with higher royalties.
76 Janus Growth Funds April 30, 2008
Table of Contents
(unaudited)
Looking Ahead
I focus on anticipating change, trying to determine which companies are going to win on a multi-year basis in the product marketplace, and on finding companies where I feel the price of the stock is below the value of the cash flows of the company. My goal will continue to be to leverage the strong, grassroots research foundation of Janus to uncover what I believe are the best investment opportunities for our shareholders.
Thank you for your investment in Janus Global Technology Fund.
Janus Global Technology Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
First Solar, Inc. | 0.55% | |||
JA Solar Holdings Company, Ltd. (ADR) | 0.51% | |||
CommScope, Inc. | 0.48% | |||
Corning, Inc. | 0.41% | |||
Google, Inc. – Class A | 0.24% |
5 Bottom Performers – Holdings
Contribution | ||||
SAVVIS, Inc. | (1.10)% | |||
ARM Holdings PLC | (1.07)% | |||
SiRF Technology Holdings, Inc. | (1.05)% | |||
KLA-Tencor Corp. | (0.61)% | |||
RightNow Technologies, Inc. | (0.51)% |
5 Top Performers – Sectors
Fund Weighting | S&P 500® | |||||||||||
Fund Contribution | (% of Net Assets) | Index Weighting | ||||||||||
Industrials | 0.37% | 14.21% | 11.71% | |||||||||
Consumer Staples | 0.00% | 0.00% | 10.51% | |||||||||
Energy | 0.00% | 0.00% | 12.83% | |||||||||
Financials | 0.00% | 0.00% | 17.59% | |||||||||
Utilities | 0.00% | 0.00% | 3.63% |
5 Bottom Performers – Sectors
Fund Weighting | S&P 500® | |||||||||||
Fund Contribution | (% of Net Assets) | Index Weighting | ||||||||||
Information Technology | (11.28)% | 69.42% | 16.07% | |||||||||
Consumer Discretionary | (0.49)% | 8.21% | 8.67% | |||||||||
Health Care | (0.46)% | 4.01% | 12.09% | |||||||||
Other* | (0.20)% | 0.07% | 0.00% | |||||||||
Telecommunication Services | (0.20)% | 2.30% | 3.46% |
* | Industry not classified by Global Classification Standard. |
Janus Growth Funds April 30, 2008 77
Table of Contents
Janus Global Technology Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2008
Corning, Inc Telecommunication Equipment – Fiber Optics | 4.5% | |||
KLA – Tencor Corp. Semiconductor Equipment | 3.9% | |||
Cisco Systems, Inc. Networking Products | 3.6% | |||
JA Solar Holdings Company, Ltd. (ADR) Energy – Alternate Sources | 2.9% | |||
Cypress Semiconductor Corp. Semiconductor Components/Integrated Circuits | 2.8% | |||
17.7% |
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20p08.gif)
Emerging markets comprised 11.5% of total net assets.
*Includes Securities Sold Short of (2.4)%
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20t08.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20c08.gif)
78 Janus Growth Funds April 30, 2008
Table of Contents
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif20m08.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratio – for the fiscal year ended October 31, 2007 | ||||||||||
Fiscal | One | Five | Since | Total Annual Fund | |||||||
Year-to-Date | Year | Year | Inception* | Operating Expenses | |||||||
Janus Global Technology Fund | (12.26)% | 5.28% | 13.67% | 4.30% | 1.04% | ||||||
S&P 500® Index | (9.64)% | (4.68)% | 10.62% | 2.95% | |||||||
Morgan Stanley Capital International World Information Technology IndexSM | (14.29)% | 0.76% | 11.22% | (0.84)% | |||||||
Lipper Quartile | – | 1st | 2nd | 1st | |||||||
Lipper Ranking – based on total return for Science and Technology Funds | – | 60/264 | 63/219 | 14/74 | |||||||
Visit janus.com to view current performance and characteristic information | |||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
A 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.)
See important disclosures on the next page.
Janus Growth Funds April 30, 2008 79
Table of Contents
Janus Global Technology Fund (unaudited)
The Fund’s performance may be affected by risks that include those associated with investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and other details.
Foreign securities have additional risks including exchange rate changes, political and economic upheaval, the relative lack of information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. These risks are magnified in emerging markets. The prices of foreign securities held by the Fund, and therefore the Fund’s performance, may decline in response to such risks.
This Fund may at times have significant exposure to certain industry groups, which may react similarly to market developments (resulting in greater price volatility). The Fund also may have significant exposure to foreign markets (which include risks such as currency fluctuation and political uncertainty).
The use of short sales may cause the Fund to have higher expenses than those of other equity funds. Short sales are speculative transactions and involve special risks, including a greater reliance on the investment team’s ability to accurately anticipate the future value of a security. The Fund’s losses are potentially unlimited in a short sale transaction. The Fund’s use of short sales in effect leverages the Fund’s portfolio. The Fund’s use of leverage may result in risks and can magnify the effect of any losses. There is no assurance that a leveraging strategy will be successful.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – December 31, 1998 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 877.40 | $ | 4.62 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.94 | $ | 4.97 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.99%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
80 Janus Growth Funds April 30, 2008
Table of Contents
Janus Global Technology Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Common Stock – 95.4% | ||||||||
Advertising Sales – 0.5% | ||||||||
111,385 | Lamar Advertising Co. – Class A*,# | $ | 4,404,163 | |||||
Applications Software – 3.8% | ||||||||
110,426 | Infosys Technologies, Ltd. | 4,771,402 | ||||||
380,140 | Microsoft Corp. | 10,841,593 | ||||||
1,490,574 | Satyam Computer Services, Ltd. | 17,723,140 | ||||||
33,336,135 | ||||||||
Audio and Video Products – 1.1% | ||||||||
199,500 | Sony Corp.** | 9,146,355 | ||||||
Batteries and Battery Systems – 1.9% | ||||||||
6,742,169 | BYD Company, Ltd. | 11,815,645 | ||||||
4,444,500 | BYD Electronic Company, Ltd. | 4,910,431 | ||||||
16,726,076 | ||||||||
Cable Television – 0.7% | ||||||||
263,980 | DIRECTV Group, Inc.* | 6,504,467 | ||||||
Chemicals – Diversified – 1.2% | ||||||||
46,550 | Bayer A.G.#,** | 3,957,861 | ||||||
106,400 | Shin-Etsu Chemical Company, Ltd.** | 6,639,061 | ||||||
10,596,922 | ||||||||
Commercial Services – 1.0% | ||||||||
627,105 | Live Nation*,# | 8,647,778 | ||||||
Computer Software – 0.3% | ||||||||
115,805 | Omniture, Inc.*,# | 2,642,670 | ||||||
Computers – 8.0% | ||||||||
128,360 | Apple, Inc.* | 22,328,221 | ||||||
467,550 | Dell, Inc.* | 8,710,457 | ||||||
440,590 | Hewlett-Packard Co.** | 20,421,347 | ||||||
148,815 | Research In Motion, Ltd. (U.S. Shares)* | 18,100,368 | ||||||
69,560,393 | ||||||||
Computers – Peripheral Equipment – 1.1% | ||||||||
327,547 | Logitech International S.A.* | 9,911,078 | ||||||
Consulting Services – 1.0% | ||||||||
588,674 | Genpact, Ltd.*,# | 8,418,038 | ||||||
Decision Support Software – 0.4% | ||||||||
413,280 | DemandTec, Inc.*,# | 3,194,654 | ||||||
Diversified Operations – 1.0% | ||||||||
72,475 | Siemens A.G.** | 8,587,933 | ||||||
Electric Products – Miscellaneous – 0.9% | ||||||||
468,000 | Sharp Corp.** | 7,929,266 | ||||||
Electronic Components – Miscellaneous – 0.5% | ||||||||
105,217 | Koninklijke (Royal) Philips Electronics N.V.** | 3,950,355 | ||||||
Electronic Components – Semiconductors – 7.0% | ||||||||
9,963,190 | ARM Holdings PLC** | 19,796,282 | ||||||
176,295 | Broadcom Corp. – Class A* | 4,576,618 | ||||||
280,915 | IPG Photonics Corp.*,# | 4,699,708 | ||||||
156,450 | MediaTek, Inc.** | 2,022,616 | ||||||
439,050 | Microsemi Corp.*,# | 10,756,725 | ||||||
807,998 | MIPS Technologies, Inc.*,# | 3,668,311 | ||||||
19,178 | Samsung Electronics Company, Ltd.** | 13,656,874 | ||||||
139,200 | Spreadtrum Communications, Inc. (ADR)*,# | 1,209,648 | ||||||
60,386,782 | ||||||||
Electronic Connectors – 1.0% | ||||||||
183,935 | Amphenol Corp. – Class A | 8,494,118 | ||||||
Electronic Measuring Instruments – 2.1% | ||||||||
278,151 | Memsic, Inc.* | 2,205,737 | ||||||
481,218 | Trimble Navigation, Ltd.* | 15,779,139 | ||||||
17,984,876 | ||||||||
Energy – Alternate Sources – 6.9% | ||||||||
22,405 | First Solar, Inc.*,# | 6,542,036 | ||||||
860,000 | Gintech Energy Corp.*,** | 9,285,591 | ||||||
1,029,830 | JA Solar Holdings Company, Ltd. (ADR)* | 24,726,218 | ||||||
136,615 | SunPower Corp. – Class A*,# | 11,922,391 | ||||||
67,751 | Vestas Wind Systems A.S.* | 7,409,747 | ||||||
59,885,983 | ||||||||
Engineering – Research and Development Services – 1.2% | ||||||||
327,037 | ABB, Ltd. | 10,028,339 | ||||||
Enterprise Software/Services – 4.5% | ||||||||
114,745 | Concur Technologies, Inc.*,# | 3,802,649 | ||||||
1,137,940 | Oracle Corp.* | 23,726,049 | ||||||
615,470 | RightNow Technologies, Inc.*,# | 7,367,176 | ||||||
207,175 | Taleo Corp.* | 4,039,913 | ||||||
38,935,787 | ||||||||
Entertainment Software – 1.1% | ||||||||
177,785 | Electronic Arts, Inc.* | 9,150,594 | ||||||
Human Resources – 0.4% | ||||||||
329,920 | SuccessFactors, Inc.*,# | 3,642,317 | ||||||
Internet Applications Software – 1.8% | ||||||||
535,200 | DealerTrack Holdings, Inc.*,# | 10,297,248 | ||||||
181,830 | Vocus, Inc.* | 5,053,056 | ||||||
15,350,304 | ||||||||
Internet Connectivity Services – 1.6% | ||||||||
264,396 | NDS Group PLC (ADR)*,** | 13,603,174 | ||||||
Internet Content – Information/News – 0.6% | ||||||||
379,850 | TechTarget* | 5,097,587 | ||||||
Internet Content-Entertainment – 0.4% | ||||||||
145,305 | Meetic*,** | 3,872,613 | ||||||
Machinery – General Industrial – 0.6% | ||||||||
8,778,000 | Shanghai Electric Group Company, Ltd.# | 4,950,621 | ||||||
Medical – Biomedical and Genetic – 1.7% | ||||||||
173,645 | Celgene Corp.* | 10,790,300 | ||||||
58,865 | Genzyme Corp.* | 4,141,153 | ||||||
14,931,453 | ||||||||
Medical – Drugs – 2.7% | ||||||||
157,080 | Merck & Company, Inc. | 5,975,323 | ||||||
27,775 | Roche Holding A.G. | 4,626,192 | ||||||
150,750 | Shire PLC (ADR)#,** | 8,282,205 | ||||||
360,335 | Valeant Pharmaceuticals International*,# | 4,785,249 | ||||||
23,668,969 | ||||||||
Medical Labs and Testing Services – 0.8% | ||||||||
302,300 | Diagnosticos da America | 6,949,425 | ||||||
Networking Products – 3.6% | ||||||||
1,225,455 | Cisco Systems, Inc.*,** | 31,420,666 | ||||||
Power Converters and Power Supply Equipment – 1.4% | ||||||||
579,355 | Advanced Energy Industries, Inc.*,# | 8,110,970 | ||||||
629,620 | Suzlon Energy, Ltd. | 4,456,800 | ||||||
12,567,770 | ||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2008 81
Table of Contents
Janus Global Technology Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Semiconductor Components/Integrated Circuits – 8.0% | ||||||||
914,120 | Actions Semiconductor Company, Ltd. (ADR)* | $ | 3,528,503 | |||||
4,261,875 | Atmel Corp.* | 15,854,175 | ||||||
849,020 | Cypress Semiconductor Corp.* | 23,874,442 | ||||||
714,820 | Marvell Technology Group, Ltd.* | 9,256,919 | ||||||
5,161,893 | Siliconware Precision Industries Co.** | 8,878,538 | ||||||
3,854,813 | Taiwan Semiconductor Manufacturing Company, Ltd.** | 8,400,858 | ||||||
69,793,435 | ||||||||
Semiconductor Equipment – 5.8% | ||||||||
575,854 | ASML Holdings N.V. (U.S. Shares) | 16,331,219 | ||||||
768,890 | KLA-Tencor Corp. | 33,585,116 | ||||||
49,916,335 | ||||||||
Telecommunication Equipment – 4.9% | ||||||||
2,362,995 | Arris Group, Inc.* | 19,140,260 | ||||||
498,085 | CommScope, Inc.* | 23,683,941 | ||||||
42,824,201 | ||||||||
Telecommunication Equipment – Fiber Optics – 4.5% | ||||||||
1,450,845 | Corning, Inc.** | 38,752,070 | ||||||
Telecommunication Services – 3.0% | ||||||||
579,340 | Amdocs, Ltd. (U.S. Shares)* | 18,179,689 | ||||||
542,552 | SAVVIS, Inc.*,# | 7,948,387 | ||||||
26,128,076 | ||||||||
Television – 0.6% | ||||||||
498,060 | British Sky Broadcasting Group PLC** | 5,371,904 | ||||||
Web Hosting/Design – 1.0% | ||||||||
46,490 | Equinix, Inc.*,# | 4,203,626 | ||||||
735,255 | Terremark Worldwide, Inc.*,# | 4,426,235 | ||||||
8,629,861 | ||||||||
Web Portals/Internet Service Providers – 1.6% | ||||||||
24,640 | Google, Inc. – Class A* | 14,150,506 | ||||||
Wireless Equipment – 3.2% | ||||||||
444,755 | Crown Castle International Corp.* | 17,278,732 | ||||||
413,965 | Telefonaktiebolaget L.M. Ericsson (ADR)# | 10,440,197 | ||||||
27,718,929 | ||||||||
Total Common Stock (cost $722,661,099) | 827,762,978 | |||||||
Equity-Linked Structured Notes – 0.4% | ||||||||
Finance – Investment Bankers/Brokers – 0.4% | ||||||||
149,040 | Goldman Sachs, Inc., convertible, (Omniture, Inc.), 0% (144A)§ (cost $4,262,544) | 3,797,390 | ||||||
Money Markets – 4.3% | ||||||||
20,581,207 | Janus Institutional Cash Management Fund – Institutional Shares, 2.82% | 20,581,207 | ||||||
17,146,360 | Janus Institutional Money Market Fund – Institutional Shares, 2.74% | 17,146,360 | ||||||
Total Money Markets (cost $37,727,567) | 37,727,567 | |||||||
Other Securities – 9.7% | ||||||||
26,860,229 | Allianz Dresdner Daily Asset Fund† | 26,860,229 | ||||||
14,050,863 | Repurchase Agreements† | 14,050,863 | ||||||
42,939,162 | Time Deposits† | 42,939,162 | ||||||
Total Other Securities (cost $83,850,254) | 83,850,254 | |||||||
Total Investments (total cost $848,501,464) – 109.8% | 953,138,189 | |||||||
Shares or Principal Amount | Value | |||||||
Securities Sold Short – (2.4)% | ||||||||
Electronic Components – Miscellaneous – (0.3)% | ||||||||
294,450 | Celestica, Inc.* | $ | (2,758,996) | |||||
Electronic Components – Semiconductors – (0.1)% | ||||||||
57,770 | OmniVision Technologies, Inc.* | (926,631) | ||||||
Growth – Large Cap – (2.0)% | ||||||||
364,910 | PowerShares QQQ | (17,227,401) | ||||||
Total Securities Sold Short (proceeds $20,126,462) | (20,913,028) | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (7.4)% | (64,610,040) | |||||||
Net Assets – 100% | $ | 867,615,121 | ||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 17,674,957 | 1.9% | |||||
Brazil | 6,949,425 | 0.7% | ||||||
Canada | 18,100,368 | 1.9% | ||||||
Cayman Islands | 29,464,370 | 3.1% | ||||||
China | 16,766,266 | 1.8% | ||||||
Denmark | 7,409,747 | 0.8% | ||||||
France | 3,872,613 | 0.4% | ||||||
Germany | 12,545,795 | 1.3% | ||||||
Guernsey | 18,179,689 | 1.9% | ||||||
Hong Kong | 4,910,431 | 0.5% | ||||||
India | 26,951,342 | 2.8% | ||||||
Japan | 23,714,682 | 2.5% | ||||||
Netherlands | 13,656,874 | 1.4% | ||||||
South Korea | 20,281,575 | 2.1% | ||||||
Sweden | 10,440,197 | 1.1% | ||||||
Switzerland | 24,565,609 | 2.6% | ||||||
Taiwan | 28,587,602 | 3.0% | ||||||
United Kingdom | 47,053,564 | 4.9% | ||||||
United States†† | 622,013,083 | 65.3% | ||||||
Total | $ | 953,138,189 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (52.5% excluding Short-Term Securities and Other Securities) |
Summary of Investments by Country – (Short Positions)
% of Securities | ||||||||
Country | Value | Sold Short | ||||||
Canada | $ | (2,758,996) | 13.2% | |||||
United States | (18,154,032) | 86.8% | ||||||
Total | $ | (20,913,028) | 100.0% |
See Notes to Schedules of Investments and Financial Statements.
82 Janus Growth Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Forward Currency Contracts, Open
Currency Sold and | Currency | Currency | Unrealized | |||||||||
Settlement Date | Units Sold | Value in U.S. $ | Gain/(Loss) | |||||||||
British Pound 5/14/08 | 8,855,000 | $ | 17,593,562 | $ | 307,307 | |||||||
Euro 10/23/08 | 3,300,000 | 5,108,784 | (15,564) | |||||||||
Japanese Yen 10/23/08 | 788,000,000 | 7,651,460 | (58,474) | |||||||||
South Korean Won 5/14/08 | 7,800,000,000 | 7,782,034 | 769,191 | |||||||||
Taiwan Dollar 5/14/08 | 213,000,000 | 6,999,023 | (363,510) | |||||||||
Total | $ | 45,134,863 | $ | 638,950 |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2008 83
Table of Contents
Statements of Assets and Liabilities
Janus | Janus | Janus | ||||||||||||||||
As of April 30, 2008 (unaudited) | Janus | Enterprise | Orion | Research | ||||||||||||||
(all numbers in thousands except net asset value per share) | Fund | Fund | Fund | Fund | ||||||||||||||
Assets: | ||||||||||||||||||
Investments at cost(1) | $ | 10,727,647 | $ | 1,988,768 | $ | 4,883,510 | $ | 4,209,660 | ||||||||||
Unaffiliated investments at value(1) | $ | 11,626,336 | $ | 2,360,175 | $ | 5,375,083 | $ | 4,578,670 | ||||||||||
Affiliated money market investments | 440,448 | 103,325 | 278,485 | 62,045 | ||||||||||||||
Cash | 229 | 284 | 2,906 | 204 | ||||||||||||||
Cash denominated in foreign currency(2) | 6,014 | – | 4,891 | 5,351 | ||||||||||||||
Restricted cash (Note 1) | – | – | 8,392 | 2,970 | ||||||||||||||
Deposits with broker for short sales | – | – | 99,548 | – | ||||||||||||||
Receivables: | ||||||||||||||||||
Swap contracts | – | – | – | 31 | ||||||||||||||
Investments sold | 131,102 | 16,429 | 49,412 | 10,776 | ||||||||||||||
Fund shares sold | 5,702 | 2,529 | 6,519 | 4,136 | ||||||||||||||
Dividends | 28,730 | 853 | 2,481 | 2,827 | ||||||||||||||
Interest | 2,982 | 101 | 112 | 412 | ||||||||||||||
Non–interested Trustees’ deferred compensation | 198 | 37 | 91 | 76 | ||||||||||||||
Other assets | 65 | 9 | 176 | 32 | ||||||||||||||
Forward currency contracts | 1,683 | – | 608 | 4,580 | ||||||||||||||
Total Assets | 12,243,489 | 2,483,742 | 5,828,704 | 4,672,110 | ||||||||||||||
Liabilities: | ||||||||||||||||||
Payables: | ||||||||||||||||||
Short sales, at value(3) | – | – | 101,706 | – | ||||||||||||||
Options written, at value(4) | 22,866 | – | 29,951 | – | ||||||||||||||
Collateral for securities loaned (Note 1) | 650,974 | 363,939 | 466,199 | 263,570 | ||||||||||||||
Swap contracts | – | – | – | 426 | ||||||||||||||
Investments purchased | 181,859 | 17,966 | 29,743 | 58,448 | ||||||||||||||
Fund shares repurchased | 12,547 | 2,165 | 2,438 | 1,976 | ||||||||||||||
Advisory fees | 5,887 | 1,049 | 2,577 | 2,738 | ||||||||||||||
Transfer agent fees and expenses | 2,174 | 485 | 1,160 | 989 | ||||||||||||||
Non–interested Trustees’ fees and expenses | 101 | 18 | 37 | 39 | ||||||||||||||
Non–interested Trustees’ deferred compensation fees | 198 | 37 | 91 | 76 | ||||||||||||||
Foreign tax liability | – | – | 1,527 | 776 | ||||||||||||||
Accrued expenses | 424 | 164 | 340 | 386 | ||||||||||||||
Forward currency contracts | 1,843 | – | 1,236 | 843 | ||||||||||||||
Total Liabilities | 878,873 | 385,823 | 637,005 | 330,267 | ||||||||||||||
Net Assets | $ | 11,364,616 | $ | 2,097,919 | $ | 5,191,699 | $ | 4,341,843 | ||||||||||
Net Assets Consist of: | ||||||||||||||||||
Capital (par value and paid-in surplus)* | $ | 13,565,446 | $ | 5,237,684 | $ | 5,297,066 | $ | 8,153,425 | ||||||||||
Undistributed net investment income/(loss)* | 50,563 | (1,074) | 5,832 | 8,363 | ||||||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | (3,594,705) | (3,613,426) | (876,024) | (4,257,564) | ||||||||||||||
Unrealized appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 1,343,312 | 474,735 | 764,825(5) | 437,619(5) | ||||||||||||||
Total Net Assets | $ | 11,364,616 | $ | 2,097,919 | $ | 5,191,699 | $ | 4,341,843 | ||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 373,666 | 36,621 | 404,315 | 145,659 | ||||||||||||||
Net Asset Value Per Share | $ | 30.41 | $ | 57.29 | $ | 12.84 | $ | 29.81 |
* | See Note 4 in Notes to Financial Statements. |
(1) | Investments at cost and value include $622,936,886, $353,553,461, $450,557,001, $255,732,808, $20,807,915, $941,521,441, $306,688,804, $145,079,020 and $80,295,739 of securities loaned for Janus Fund, Janus Enterprise Fund, Janus Orion Fund, Janus Research Fund, Janus Triton Fund, Janus Twenty Fund, Janus Venture Fund, Janus Global Life Sciences Fund, and Janus Global Technology Fund, respectively (Note 1). | |
(2) | Includes cost of $6,120,893, $4,885,516, $5,351,686, $1,004, $4,749,348, $4,530, $265,586 and $214,603 for Janus Fund, Janus Orion Fund, Janus Research Fund, Janus Triton Fund, Janus Twenty Fund, Janus Venture Fund, Janus Global Life Sciences Fund, and Janus Global Technology Fund, respectively. | |
(3) | Includes proceeds of $99,548,410, $1,909,749 $23,097,269, $8,281,024 and $20,126,462 on short sales for Janus Orion Fund, Janus Triton Fund, Janus Venture Fund, Janus Global Life Sciences Fund and Janus Global Technology Fund, respectively. | |
(4) | Includes premiums of $27,229,670, $28,864,540, $209,406 and $3,070,204 on written options for Janus Fund, Janus Orion Fund, Janus Triton Fund, and Janus Venture Fund, respectively. | |
(5) | Net of foreign taxes on investments of $1,526,630, $775,841, $9,574, $198,148, $35,537, $42,242 for Janus Orion Fund, Janus Research Fund, Janus Triton Fund, Janus Venture Fund, Janus Global Life Sciences Fund and Janus Global Technology Fund, respectively. |
See Notes to Financial Statements.
84 Janus Growth Funds April 30, 2008
Table of Contents
Janus | Janus | |||||||||||||||||||
Janus | Janus | Janus | Global Life | Global | ||||||||||||||||
Triton | Twenty | Venture | Sciences | Technology | ||||||||||||||||
Fund | Fund | Fund | Fund | Fund | ||||||||||||||||
$ | 164,364 | $ | 8,434,420 | $ | 1,505,733 | $ | 873,405 | $ | 848,501 | |||||||||||
$ | 149,740 | $ | 12,762,307 | $ | 1,578,918 | $ | 950,521 | $ | 915,410 | |||||||||||
10,717 | 958,166 | 6,270 | 24,990 | 37,728 | ||||||||||||||||
647 | 12,514 | 302 | 4,040 | 879 | ||||||||||||||||
1 | 4,746 | 5 | 262 | 213 | ||||||||||||||||
– | – | – | – | – | ||||||||||||||||
1,910 | – | 23,097 | 8,281 | 20,126 | ||||||||||||||||
– | – | – | – | – | ||||||||||||||||
1,389 | 285,576 | 4,497 | 9,255 | 37 | ||||||||||||||||
375 | 4,111 | 196 | 213 | 295 | ||||||||||||||||
89 | 12,250 | 901 | 77 | 1,046 | ||||||||||||||||
19 | 2,220 | 192 | 277 | 61 | ||||||||||||||||
2 | 226 | 22 | 15 | 15 | ||||||||||||||||
1 | 90 | 47 | 8 | 1 | ||||||||||||||||
– | – | – | 122 | 1,076 | ||||||||||||||||
164,890 | 14,042,206 | 1,614,447 | 998,061 | 976,887 | ||||||||||||||||
1,962 | – | 23,718 | 7,937 | 20,913 | ||||||||||||||||
135 | – | 5,277 | – | – | ||||||||||||||||
21,770 | 968,392 | 317,829 | 150,046 | 83,850 | ||||||||||||||||
– | – | – | – | – | ||||||||||||||||
3,233 | 94,312 | 334 | 4,490 | 2,240 | ||||||||||||||||
89 | 13,067 | 488 | 415 | 852 | ||||||||||||||||
68 | 6,566 | 656 | 434 | 431 | ||||||||||||||||
36 | 2,120 | 218 | 226 | 274 | ||||||||||||||||
2 | 97 | 14 | 8 | 9 | ||||||||||||||||
2 | 226 | 22 | 15 | 15 | ||||||||||||||||
10 | – | 198 | 36 | 42 | ||||||||||||||||
31 | 355 | 179 | 932 | 209 | ||||||||||||||||
– | – | – | 2,128 | 437 | ||||||||||||||||
27,338 | 1,085,135 | 348,933 | 166,667 | 109,272 | ||||||||||||||||
$ | 137,552 | $ | 12,957,071 | $ | 1,265,514 | $ | 831,394 | $ | 867,615 | |||||||||||
$ | 136,412 | $ | 8,134,200 | $ | 1,194,564 | $ | 1,328,891 | $ | 3,095,054 | |||||||||||
(121) | 2,297 | (4,863) | 1,788 | (655) | ||||||||||||||||
5,156 | (465,508) | (640) | (599,732) | (2,331,249) | ||||||||||||||||
(3,895)(5) | 5,286,082 | 76,453(5) | 100,447(5) | 104,465(5) | ||||||||||||||||
$ | 137,552 | $ | 12,957,071 | $ | 1,265,514 | $ | 831,394 | $ | 867,615 | |||||||||||
10,671 | 169,741 | 26,649 | 37,013 | 60,142 | ||||||||||||||||
$ | 12.89 | $ | 76.33 | $ | 47.49 | $ | 22.46 | $ | 14.43 |
See Notes to Financial Statements.
Janus Growth Funds April 30, 2008 85
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Statements of Operations
Janus | Janus | Janus | ||||||||||||||||
For the six-month period ended April 30, 2008 (unaudited) | Janus | Enterprise | Orion | Research | ||||||||||||||
(all numbers in thousands) | Fund | Fund | Fund | Fund | ||||||||||||||
Investment Income: | ||||||||||||||||||
Interest | $ | 2,492 | $ | 90 | $ | 630 | $ | 52 | ||||||||||
Securities lending income | 1,910 | 576 | 564 | 1,228 | ||||||||||||||
Dividends | 98,855 | 8,069 | 16,432 | 28,430 | ||||||||||||||
Dividends from affiliates | 4,211 | 1,506 | 18,455 | 2,516 | ||||||||||||||
Foreign tax withheld | (6,043) | (154) | (778) | (1,152) | ||||||||||||||
Total Investment Income | 101,425 | 10,087 | 35,303 | 31,074 | ||||||||||||||
Expenses: | ||||||||||||||||||
Advisory fees | 37,042 | 6,412 | 15,197 | 16,943 | ||||||||||||||
Transfer agent expenses | 12,362 | 2,452 | 5,725 | 5,150 | ||||||||||||||
Registration fees | 49 | 32 | 68 | 44 | ||||||||||||||
Custodian fees | 146 | 24 | 142 | 97 | ||||||||||||||
Professional fees | 26 | 15 | 17 | 17 | ||||||||||||||
Non-interested Trustees’ fees and expenses | 90 | 16 | 43 | 37 | ||||||||||||||
Short sales dividend expense | – | – | 276 | – | ||||||||||||||
Printing expenses | 289 | 97 | 265 | 169 | ||||||||||||||
Other expenses | 597 | 179 | 350 | 327 | ||||||||||||||
Non-recurring costs (Note 2) | 3 | – | 1 | 1 | ||||||||||||||
Cost assumed by Janus Capital Management LLC (Note 2) | (3) | – | (1) | (1) | ||||||||||||||
Total Expenses | 50,601 | 9,227 | 22,083 | 22,784 | ||||||||||||||
Expense and Fee Offset | (203) | (62) | (173) | (121) | ||||||||||||||
Net Expenses | 50,398 | 9,165 | 21,910 | 22,663 | ||||||||||||||
Net Investment Income/(Loss) | 51,027 | 922 | 13,393 | 8,411 | ||||||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | ||||||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 1,276,767 | 335,349 | 818,065 | 204,645 | ||||||||||||||
Net realized gain/(loss) from short sales | – | – | (525) | – | ||||||||||||||
Net realized gain/(loss from swap contracts | – | – | – | (926) | ||||||||||||||
Net realized gain/(loss) from options contracts | 1,049 | – | 18,566 | – | ||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (2,536,453) | (423,172) | (1,116,278)(1) | (555,263)(1) | ||||||||||||||
Payment from affiliate (Note 2) | 6 | 16 | 14 | 1 | ||||||||||||||
Net Gain/(Loss) on Investments | (1,258,631) | (87,807) | (280,158) | (351,543) | ||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (1,207,604) | $ | (86,885) | $ | (266,765) | $ | (343,132) |
(1) | Net of foreign taxes on investments of $1,526,630, $775,841, $9,574, $198,148, $35,537, $42,242 for Janus Orion Fund, Janus Research Fund, Janus Triton Fund, Janus Venture Fund, Janus Global Life Sciences Fund and Janus Global Technology Fund, respectively. |
See Notes to Financial Statements.
86 Janus Growth Funds April 30, 2008
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Janus | Janus | |||||||||||||||||||
Janus | Janus | Janus | Global Life | Global | ||||||||||||||||
Triton | Twenty | Venture | Sciences | Technology | ||||||||||||||||
Fund | Fund | Fund | Fund | Fund | ||||||||||||||||
$ | 5 | $ | – | $ | 9 | $ | 276 | $ | 19 | |||||||||||
97 | 357 | 866 | 219 | 144 | ||||||||||||||||
516 | 40,409 | 2,031 | 5,641 | 2,792 | ||||||||||||||||
97 | 14,222 | 62 | 207 | 828 | ||||||||||||||||
(5) | (2,066) | (7) | (440) | (164) | ||||||||||||||||
710 | 52,922 | 2,961 | 5,903 | 3,619 | ||||||||||||||||
423 | 38,045 | 4,496 | 2,736 | 2,762 | ||||||||||||||||
175 | 11,637 | 1,345 | 1,117 | 1,265 | ||||||||||||||||
20 | 49 | 15 | 12 | 17 | ||||||||||||||||
– | 116 | 142 | 95 | 49 | ||||||||||||||||
15 | 19 | 15 | 17 | 19 | ||||||||||||||||
1 | 100 | 10 | 6 | 6 | ||||||||||||||||
– | – | 15 | – | – | ||||||||||||||||
11 | 270 | 63 | 59 | 79 | ||||||||||||||||
27 | 436 | 88 | 90 | 106 | ||||||||||||||||
N/A | 2 | – | – | – | ||||||||||||||||
N/A | (2) | – | – | – | ||||||||||||||||
672 | 50,672 | 6,189 | 4,132 | 4,303 | ||||||||||||||||
(7) | (166) | (23) | (34) | (39) | ||||||||||||||||
665 | 50,506 | 6,166 | 4,098 | 4,264 | ||||||||||||||||
45 | 2,416 | (3,205) | 1,805 | (645) | ||||||||||||||||
5,367 | 944,842 | 37,699 | 65,822 | 84,116 | ||||||||||||||||
5 | – | (570) | (1,102) | 350 | ||||||||||||||||
– | – | – | – | – | ||||||||||||||||
332 | – | – | – | (869) | ||||||||||||||||
(27,664)(1) | (655,584) | (459,606)(1) | (129,155)(1) | (211,082)(1) | ||||||||||||||||
20 | 36 | 4 | – | – | ||||||||||||||||
(21,940) | 289,294 | (422,473) | (64,435) | (127,485) | ||||||||||||||||
$ | (21,895) | $ | 291,710 | $ | (425,678) | $ | (62,630) | $ | (128,130) |
See Notes to Financial Statements.
Janus Growth Funds April 30, 2008 87
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Statements of Changes in Net Assets
For the six-month period ended April 30, 2008 (unaudited) | Janus | |||||||||
and for the fiscal year ended October 31, 2007 | Fund | |||||||||
(all numbers in thousands) | 2008 | 2007 | ||||||||
Operations: | ||||||||||
Net investment income/(loss) | $ | 51,027 | $ | 61,024 | ||||||
Net realized gain/(loss) from investment and foreign currency transactions | 1,276,767 | 524,470 | ||||||||
Net realized gain/(loss) from short sales | – | – | ||||||||
Net realized gain/(loss) from swap contracts | – | – | ||||||||
Net realized gain/(loss) from options contracts | 1,049 | 5,817 | ||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (2,536,453) | 1,894,759 | ||||||||
Payment from affiliate (Note 2) | 6 | 89 | ||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (1,207,604) | 2,486,159 | ||||||||
Dividends and Distributions to Shareholders: | ||||||||||
Net investment income* | (62,048) | (38,592) | ||||||||
Net realized gain/(loss) from investment transactions* | – | – | ||||||||
Net (Decrease) from Dividends and Distributions | (62,048) | (38,592) | ||||||||
Capital Share Transactions: | ||||||||||
Shares sold | 589,740 | 1,261,659 | ||||||||
Redemption fees | N/A | N/A | ||||||||
Reinvested dividends and distributions | 60,492 | 37,606 | ||||||||
Shares repurchased | (1,054,711) | (1,916,714) | ||||||||
Net Increase/(Decrease) from Capital Share Transactions | (404,479) | (617,449) | ||||||||
Net Increase/Decrease in Net Assets | (1,674,131) | 1,830,118 | ||||||||
Net Assets: | ||||||||||
Beginning of period | 13,038,747 | 11,208,629 | ||||||||
End of period | $ | 11,364,616 | $ | 13,038,747 | ||||||
Undistributed net investment income/(loss)* | $ | 50,563 | $ | 61,584 |
* | See Note 4 in Notes to Financial Statements |
See Notes to Financial Statements.
88 Janus Growth Funds April 30, 2008
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Janus | Janus | Janus | Janus | |||||||||||||||||||||||||||||
Enterprise Fund | Orion Fund | Research Fund | Triton Fund | |||||||||||||||||||||||||||||
2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | |||||||||||||||||||||||||
$ | 922 | $ | (768) | $ | 13,393 | $ | 12,758 | $ | 8,411 | $ | 4,649 | $ | 45 | $ | (333) | |||||||||||||||||
335,349 | 179,006 | 818,065 | 130,929 | 204,645 | 550,960 | 5,367 | 17,537 | |||||||||||||||||||||||||
– | – | (525) | – | – | – | 5 | – | |||||||||||||||||||||||||
– | – | – | – | (926) | – | – | – | |||||||||||||||||||||||||
– | – | 18,566 | – | – | 3,961 | 332 | 80 | |||||||||||||||||||||||||
(423,172) | 333,510 | (1,116,278) | 1,293,241 | (555,263) | 658,151 | (27,664) | 16,781 | |||||||||||||||||||||||||
16 | 19 | 14 | 8 | 1 | 17 | 20 | 4 | |||||||||||||||||||||||||
(86,885) | 511,767 | (266,765) | 1,436,936 | (343,132) | 1,217,738 | (21,895) | 34,069 | |||||||||||||||||||||||||
– | – | (16,326) | (7,756) | (4,261) | (2,946) | – | – | |||||||||||||||||||||||||
– | – | – | – | – | – | (17,032) | (1,572) | |||||||||||||||||||||||||
– | – | (16,326) | (7,756) | (4,261) | (2,946) | (17,032) | (1,572) | |||||||||||||||||||||||||
218,962 | 391,582 | 867,715 | 1,185,593 | 489,772 | 733,668 | 37,751 | 62,175 | |||||||||||||||||||||||||
N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||
– | – | 16,032 | 7,599 | 4,054 | 2,818 | 16,261 | 1,546 | |||||||||||||||||||||||||
(267,382) | (413,741) | (597,304) | (677,127) | (810,829) | (822,036) | (29,421) | (56,323) | |||||||||||||||||||||||||
(48,420) | (22,159) | 286,443 | 516,065 | (317,003) | (85,550) | 24,591 | 7,398 | |||||||||||||||||||||||||
(135,305) | 489,608 | 3,352 | 1,945,245 | (664,396) | 1,129,242 | (14,336) | 39,895 | |||||||||||||||||||||||||
2,233,224 | 1,743,616 | 5,188,347 | 3,243,102 | 5,006,239 | 3,876,997 | 151,888 | 111,993 | |||||||||||||||||||||||||
$ | 2,097,919 | $ | 2,233,224 | $ | 5,191,699 | $ | 5,188,347 | $ | 4,341,843 | $ | 5,006,239 | $ | 137,552 | $ | 151,888 | |||||||||||||||||
$ | (1,074) | $ | (1,996) | $ | 5,832 | $ | 8,765 | $ | 8,363 | $ | 4,213 | $ | (121) | $ | (166) |
See Notes to Financial Statements.
Janus Growth Funds April 30, 2008 89
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Statements of Changes in Net Assets
For the six-month period ended April 30, 2008 (unaudited) | Janus | |||||||||
and for the fiscal year ended October 31, 2007 | Twenty Fund | |||||||||
(all numbers in thousands) | 2008 | 2007 | ||||||||
Operations: | ||||||||||
Net investment income/(loss) | $ | 2,416 | $ | 22,480 | ||||||
Net realized gain/(loss) from investment and foreign currency transactions | 944,842 | 467,014 | ||||||||
Net realized gain/(loss) from short sales | – | 3,530 | ||||||||
Net realized gain/(loss) from swap contracts | – | – | ||||||||
Net realized gain/(loss) from options contracts | – | – | ||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (655,584) | 3,319,230 | ||||||||
Payment from affiliate (Note 2) | 36 | 46 | ||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 291,710 | 3,812,300 | ||||||||
Dividends and Distributions to Shareholders: | ||||||||||
Net investment income* | (24,898) | (57,335) | ||||||||
Net realized gain/(loss) from investment transactions* | – | – | ||||||||
Net (Decrease) from Dividends and Distributions | (24,898) | (57,335) | ||||||||
Capital Share Transactions: | ||||||||||
Shares sold | 536,429 | 608,972 | ||||||||
Redemption fees | N/A | N/A | ||||||||
Reinvested dividends and distributions | 24,383 | 56,152 | ||||||||
Shares repurchased | (640,018) | (1,233,087) | ||||||||
Net Increase/(Decrease) from Capital Share Transactions | (79,206) | (567,963) | ||||||||
Net Increase/Decrease in Net Assets | 187,606 | 3,187,002 | ||||||||
Net Assets: | ||||||||||
Beginning of period | 12,769,465 | 9,582,463 | ||||||||
End of period | $ | 12,957,071 | $ | 12,769,465 | ||||||
Undistributed net investment income/(loss)* | $ | 2,297 | $ | 24,779 |
* | See Note 4 in Notes to Financial Statements |
See Notes to Financial Statements.
90 Janus Growth Funds April 30, 2008
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Janus | Janus | |||||||||||||||||||||||
Janus | Global Life | Global Technology | ||||||||||||||||||||||
Venture Fund | Sciences Fund | Fund | ||||||||||||||||||||||
2008 | 2007 | 2008 | 2007 | 2008 | 2007 | |||||||||||||||||||
$ | (3,205) | $ | (7,578) | $ | 1,805 | $ | (2,348) | $ | (645) | $ | 3,697 | |||||||||||||
37,699 | 339,663 | 65,822 | 98,772 | 84,116 | 147,009 | |||||||||||||||||||
(570) | – | (1,102) | (42) | 350 | (1,786) | |||||||||||||||||||
– | – | – | – | – | – | |||||||||||||||||||
– | – | – | – | (869) | (7,203) | |||||||||||||||||||
(459,606) | 134,510 | (129,155) | 53,059 | (211,082) | 137,328 | |||||||||||||||||||
4 | 9 | – | 17 | – | 5 | |||||||||||||||||||
(425,678) | 466,604 | (62,630) | 149,458 | (128,130) | 279,050 | |||||||||||||||||||
– | – | – | – | (3,731) | – | |||||||||||||||||||
(319,906) | (158,239) | – | – | – | – | |||||||||||||||||||
(319,906) | (158,239) | – | – | (3,731) | – | |||||||||||||||||||
19,990 | 48,376 | 62,225 | 32,711 | 47,229 | 69,578 | |||||||||||||||||||
N/A | N/A | 68 | 55 | 97 | 62 | |||||||||||||||||||
308,642 | 152,890 | – | – | 3,662 | – | |||||||||||||||||||
(81,700) | (143,920) | (62,271) | (270,252) | (79,596) | (234,955) | |||||||||||||||||||
246,932 | 57,346 | 22 | (237,486) | (28,608) | (165,315) | |||||||||||||||||||
(498,652) | 365,711 | (62,608) | (88,028) | (160,469) | 113,735 | |||||||||||||||||||
1,764,166 | 1,398,455 | 894,002 | 982,030 | 1,028,084 | 914,349 | |||||||||||||||||||
$ | 1,265,514 | $ | 1,764,166 | $ | 831,394 | $ | 894,002 | $ | 867,615 | $ | 1,028,084 | |||||||||||||
$ | (4,863) | $ | (1,658) | $ | 1,788 | $ | (17) | $ | (655) | $ | 3,721 |
See Notes to Financial Statements.
Janus Growth Funds April 30, 2008 91
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Financial Highlights
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2008 (unaudited) and | Janus Fund | |||||||||||||||||||||||||
through each fiscal year ended October 31 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $33.66 | $27.43 | $24.44 | $22.69 | $22.52 | $18.39 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .14 | .16 | .09 | .02 | – | – | ||||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | (3.23) | 6.17 | 2.92 | 1.73 | .17 | 4.13 | ||||||||||||||||||||
Total from Investment Operations | (3.09) | 6.33 | 3.01 | 1.75 | .17 | 4.13 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.16) | (.10) | (.02) | – | – | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Payment from affiliate | –(1) | –(1) | –(1) | –(1) | –(1) | – | ||||||||||||||||||||
Total Distributions and Other | (.16) | (.10) | (.02) | – | – | – | ||||||||||||||||||||
Net Asset Value, End of Period | $30.41 | $33.66 | $27.43 | $24.44 | $22.69 | $22.52 | ||||||||||||||||||||
Total Return** | (9.20)%(2) | 23.12%(2) | 12.31%(2) | 7.71%(2) | 0.75%(2) | 22.46% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $11,364,616 | $13,038,747 | $11,208,629 | $11,142,921 | $13,277,473 | $17,426,458 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $11,671,803 | $11,816,878 | $11,232,055 | $12,310,464 | $15,433,191 | $16,206,681 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.87% | 0.88% | 0.90% | 0.88% | 0.90% | 0.89% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.87% | 0.87% | 0.90% | 0.87% | 0.90% | 0.89% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.88% | 0.52% | 0.34% | 0.07% | (0.17)% | (0.17)% | ||||||||||||||||||||
Portfolio Turnover Rates*** | 127% | 32% | 69% | 78% | 21% | 22% |
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2008 (unaudited) | Janus Enterprise Fund | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $59.39 | $45.65 | $39.48 | $33.73 | $30.02 | $22.93 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .02 | (.01) | (.04) | –(1) | –(1) | –(1) | ||||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | (2.12) | 13.75 | 6.21 | 5.75 | 3.71 | 7.09 | ||||||||||||||||||||
Total from Investment Operations | (2.10) | 13.74 | 6.17 | 5.75 | 3.71 | 7.09 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | – | – | – | – | – | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Payment from affiliate | –(1) | –(1) | – | – | – | – | ||||||||||||||||||||
Total Distributions and Other | – | – | – | – | – | – | ||||||||||||||||||||
Net Asset Value, End of Period | $57.29 | $59.39 | $45.65 | $39.48 | $33.73 | $30.02 | ||||||||||||||||||||
Total Return** | (3.54)%(2) | 30.10%(5) | 15.63% | 17.05% | 12.36% | 30.92% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $2,097,919 | $2,233,224 | $1,743,616 | $1,703,542 | $1,679,958 | $1,916,706 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $2,026,069 | $1,926,163 | $1,778,532 | $1,728,579 | $1,795,534 | $1,741,680 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.92% | 0.94% | 1.00% | 0.96% | 1.04% | 1.02% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.91% | 0.93% | 0.99% | 0.95% | 1.03% | 1.02% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.09% | (0.04)% | (0.24)% | (0.30)% | (0.46)% | (0.46)% | ||||||||||||||||||||
Portfolio Turnover Rates*** | 84% | 32% | 40% | 28% | 27% | 32% |
* | See Note 4 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year or period ended. | |
(2) | During the fiscal year or period ended, Janus Capital and/or Janus Services LLC (“Janus Services”) fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%. | |
(3) | See “Explanations of Charts, Tables and Financial Statements.” | |
(4) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2008, 2007, 2006, 2005 and 2004. | |
(5) | During the fiscal year ended, Janus Capital and/or Janus Services fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by 0.01%. |
See Notes to Financial Statements.
92 Janus Growth Funds April 30, 2008
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For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2008 (unaudited) and | Janus Orion Fund(1) | |||||||||||||||||||||||||
through each fiscal year ended October 31 | 2008 | 2007 | 2006(1) | 2005 | 2004 | 2003 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $13.57 | $9.49 | $7.80 | $6.25 | $5.64 | $4.33 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .03 | .03 | .04 | .03 | – | – | ||||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | (.72) | 4.07 | 1.71 | 1.52 | .61 | 1.31 | ||||||||||||||||||||
Total from Investment Operations | (.69) | 4.10 | 1.75 | 1.55 | .61 | 1.31 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.04) | (.02) | (.06) | – | – | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Payment from affiliate | –(2) | –(2) | – | – | –(2) | – | ||||||||||||||||||||
Total Distributions and Other | (.04) | (.02) | (.06) | – | – | – | ||||||||||||||||||||
Net Asset Value, End of Period | $12.84 | $13.57 | $9.49 | $7.80 | $6.25 | $5.64 | ||||||||||||||||||||
Total Return** | (5.07)%(3) | 43.32%(3) | 22.58% | 24.80% | 10.82%(3) | 29.95% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $5,191,699 | $5,188,347 | $3,243,102 | $691,401 | $529,804 | $513,708 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $4,808,364 | $3,773,555 | $966,223 | $590,421 | $540,305 | $431,124 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 0.92%(6) | 0.93% | 1.00% | 1.02% | 1.09% | 1.10% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 0.92%(6) | 0.92% | 0.99% | 1.01% | 1.08% | 1.08% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.56% | 0.34% | 0.80% | 0.52% | (0.05)% | (0.43)% | ||||||||||||||||||||
Portfolio Turnover Rates*** | 165% | 24% | 63% | 68% | 69% | 72% |
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2008 (unaudited) and | Janus Research Fund | |||||||||||||||||||||||||
through each fiscal year ended October 31 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $32.09 | $24.19 | $22.05 | $19.48 | $18.14 | $14.92 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .06 | .03 | .02 | .09 | – | – | ||||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | (2.31) | 7.89 | 2.18 | 2.51 | 1.34 | 3.22 | ||||||||||||||||||||
Total from Investment Operations | (2.25) | 7.92 | 2.20 | 2.60 | 1.34 | 3.22 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.03) | (.02) | (.06) | (.03) | – | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Payment from affiliate | –(2) | –(2) | –(2) | – | – | – | ||||||||||||||||||||
Total Distributions and Other | (.03) | (.02) | (.06) | (.03) | – | – | ||||||||||||||||||||
Net Asset Value, End of Period | $29.81 | $32.09 | $24.19 | $22.05 | $19.48 | $18.14 | ||||||||||||||||||||
Total Return** | (7.02)%(3) | 32.76%(3) | 10.00%(3) | 13.35% | 7.39% | 21.58% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $4,341,843 | $5,006,239 | $3,876,997 | $4,473,431 | $4,471,514 | $5,282,164 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $4,367,735 | $4,266,701 | $4,052,013 | $4,447,616 | $5,007,156 | $5,088,567 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 1.05% | 1.01% | 0.98% | 0.93% | 0.97% | 0.96% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 1.04% | 1.00% | 0.97% | 0.92% | 0.97% | 0.95% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.39% | 0.11% | 0.11% | 0.42% | (0.26)% | (0.31)% | ||||||||||||||||||||
Portfolio Turnover Rates*** | 104% | 72% | 147% | 38% | 43% | 54% |
* | See Note 4 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Effective October 31, 2006, Janus Olympus Fund merged into Janus Orion Fund. | |
(2) | Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year or period ended. | |
(3) | During the fiscal year or period ended, Janus Capital and/or Janus Services fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%. | |
(4) | See “Explanations of Charts, Tables and Financial Statements.” | |
(5) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2008, 2007, 2006, 2005 and 2004. | |
(6) | Ratio of Gross Expenses to Average Net Assets and Ratio of Net Expenses to Average Net Assets includes dividends on short positions. The ratio would be 0.91% and 0.90%, respectively, without the inclusion of dividends on short positions. |
See Notes to Financial Statements.
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Financial Highlights (continued)
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2008 (unaudited) and | Janus Triton Fund | |||||||||||||||||||||||||
through each fiscal year or period ended October 31 | 2008 | 2007 | 2006 | 2005(1) | ||||||||||||||||||||||
Net Asset Value, Beginning of Period | $17.13 | $13.09 | $10.86 | $10.00 | ||||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .01 | – | .01 | – | ||||||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | (2.35) | 4.22 | 2.27 | 0.86 | ||||||||||||||||||||||
Total from Investment Operations | (2.34) | 4.22 | 2.28 | 0.86 | ||||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | – | – | (.03) | – | ||||||||||||||||||||||
Distributions (from capital gains)* | (1.90) | (.18) | (.02) | – | ||||||||||||||||||||||
Payment from affiliate | –(2) | –(2) | – | – | ||||||||||||||||||||||
Total Distributions and Other | (1.90) | (.18) | (.05) | – | ||||||||||||||||||||||
Net Asset Value, End of Period | $12.89 | $17.13 | $13.09 | $10.86 | ||||||||||||||||||||||
Total Return** | (14.52)%(3) | 32.57%(4) | 21.06% | 8.60% | ||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $137,552 | $151,888 | $111,993 | $37,695 | ||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $133,674 | $120,057 | $105,268 | $25,904 | ||||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6) | 1.01% | 1.13% | 1.11% | 1.27%(7) | ||||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5) | 1.00% | 1.11% | 1.09% | 1.25% | ||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.07% | (0.28)% | 0.12% | (0.24)% | ||||||||||||||||||||||
Portfolio Turnover Rates*** | 83% | 93% | 262% | 48% |
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2008 (unaudited) and | Janus Twenty Fund | |||||||||||||||||||||||||
through each fiscal year ended October 31 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $74.70 | $52.93 | $47.63 | $39.60 | $34.06 | $30.47 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .01 | .15 | .32 | .10 | .03 | .17 | ||||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 1.77 | 21.94 | 5.08 | 7.94 | 5.68 | 3.63 | ||||||||||||||||||||
Total from Investment Operations | 1.78 | 22.09 | 5.40 | 8.04 | 5.71 | 3.80 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.15) | (.32) | (.10) | (.01) | (.17) | (.21) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Payment from affiliate | –(2) | –(2) | –(2) | –(2) | –(2) | – | ||||||||||||||||||||
Total Distributions and Other | (.15) | (.32) | (.10) | (.01) | (.17) | (.21) | ||||||||||||||||||||
Net Asset Value, End of Period | $76.33 | $74.70 | $52.93 | $47.63 | $39.60 | $34.06 | ||||||||||||||||||||
Total Return** | 2.39%(4) | 41.95%(4) | 11.35%(4) | 20.31%(4) | 16.85%(4) | 12.60% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $12,957,071 | $12,769,465 | $9,582,463 | $9,612,503 | $9,023,479 | $9,821,492 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $12,063,329 | $10,355,207 | $9,511,589 | $9,458,921 | $9,319,532 | $9,749,457 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6) | 0.84% | 0.88%(8) | 0.88%(8) | 0.86% | 0.89% | 0.88% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5) | 0.84% | 0.88%(8) | 0.87%(8) | 0.86% | 0.89% | 0.88% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.04% | 0.22% | 0.60% | 0.21% | 0.06% | 0.52% | ||||||||||||||||||||
Portfolio Turnover Rates*** | 42% | 20% | 41% | 44% | 14% | 44% |
* | See Note 4 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Period from February 25, 2005 (inception date) through October 31, 2005. | |
(2) | Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year or period ended. | |
(3) | During the period ended, Janus Capital and/or Janus Services fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by 0.01%. | |
(4) | During the fiscal year or period ended, Janus Capital and/or Janus Services fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%. | |
(5) | See “Explanations of Charts, Tables and Financial Statements.” | |
(6) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2008, 2007, 2006, 2005 and 2004. | |
(7) | The ratio was 1.85% in 2005 before waiver of certain fees incurred by the Fund. | |
(8) | Ratio of Gross Expenses to Average Net Assets and Ratio of Net Expenses to Average Net Assets includes dividends on short positions. The ratio would be 0.86% and 0.86%, respectively, in 2007 and 0.87% and 0.87%, respectively, in 2006, without the inclusion of dividends on short positions. |
See Notes to Financial Statements.
94 Janus Growth Funds April 30, 2008
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For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2008 (unaudited) and | Janus Venture Fund | |||||||||||||||||||||||||
through each fiscal year ended October 31 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $79.09 | $65.75 | $56.82 | $51.57 | $47.77 | $31.59 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | (.11) | (.02) | (.06) | – | – | – | ||||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | (17.02) | 20.85 | 11.92 | 5.25 | 3.80 | 16.18 | ||||||||||||||||||||
Total from Investment Operations | (17.13) | 20.83 | 11.86 | 5.25 | 3.80 | 16.18 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | – | – | – | – | – | – | ||||||||||||||||||||
Distributions (from capital gains)* | (14.47) | (7.49) | (2.93) | – | – | – | ||||||||||||||||||||
Payment from affiliate | –(1) | –(1) | – | – | – | – | ||||||||||||||||||||
Total Distributions and Other | (14.47) | (7.49) | (2.93) | – | – | – | ||||||||||||||||||||
Net Asset Value, End of Period | $47.49 | $79.09 | $65.75 | $56.82 | $51.57 | $47.77 | ||||||||||||||||||||
Total Return** | (24.55)%(2) | 34.68%(2) | 21.69% | 10.18% | 7.95% | 51.22% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $1,265,514 | $1,764,166 | $1,398,455 | $1,293,150 | $1,327,088 | $1,392,358 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $1,413,210 | $1,549,495 | $1,353,079 | $1,367,775 | $1,355,755 | $988,156 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.88%(5) | 0.88% | 0.91% | 0.87% | 0.90% | 0.94% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.88%(5) | 0.87% | 0.91% | 0.87% | 0.90% | 0.93% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | (0.46)% | (0.49)% | (0.55)% | (0.64)% | (0.74)% | (0.67)% | ||||||||||||||||||||
Portfolio Turnover Rates*** | 49% | 57% | 55% | 63% | 61% | 75% |
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2008 (unaudited) and | Janus Global Life Sciences Fund | |||||||||||||||||||||||||
through each fiscal year ended October 31 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $24.12 | $20.25 | $19.37 | $16.08 | $14.61 | $12.82 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .05 | – | – | – | – | – | ||||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | (1.71) | 3.87 | .88 | 3.29 | 1.47 | 1.79 | ||||||||||||||||||||
Total from Investment Operations | (1.66) | 3.87 | .88 | 3.29 | 1.47 | 1.79 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | – | – | – | – | – | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Redemption fees | –(6) | –(6) | –(6) | –(6) | –(6) | –(6) | ||||||||||||||||||||
Payment from affiliate | – | –(1) | – | – | –(1) | – | ||||||||||||||||||||
Total Distributions and Other | – | – | – | – | – | – | ||||||||||||||||||||
Net Asset Value, End of Period | $22.46 | $24.12 | $20.25 | $19.37 | $16.08 | $14.61 | ||||||||||||||||||||
Total Return** | (6.88)% | 19.11%(2) | 4.54% | 20.46% | 10.06%(2) | 13.87% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $831,394 | $894,002 | $982,030 | $1,149,666 | $1,183,496 | $1,264,220 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $861,361 | $874,776 | $1,101,726 | $1,181,741 | $1,288,416 | $1,296,095 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.96% | 1.01% | 1.02% | 0.97% | 1.02% | 0.99% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.96% | 0.99% | 1.01% | 0.96% | 1.01% | 0.98% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.42% | (0.27)% | (0.39)% | (0.49)% | (0.52)% | (0.28)% | ||||||||||||||||||||
Portfolio Turnover Rates*** | 90% | 61% | 87% | 77% | 78% | 135% |
* | See Note 4 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year or period ended. | |
(2) | During the fiscal year or period ended, Janus Capital and/or Janus Services fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%. | |
(3) | See “Explanations of Charts, Tables and Financial Statements.” | |
(4) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2008, 2007, 2006, 2005 and 2004. | |
(5) | Ratio of Gross Expenses to Average Net Assets and Ratio of Net Expenses to Average Net Assets includes dividends on short positions. The ratio would be 0.88% and 0.88%, respectively, without the inclusion of dividends on short positions. | |
(6) | Redemption fees aggregated less than $.01 on a per share basis for the fiscal year or period ended. |
See Notes to Financial Statements.
Janus Growth Funds April 30, 2008 95
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Financial Highlights (continued)
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2008 (unaudited) and | Janus Global Technology Fund | |||||||||||||||||||||||||
through each fiscal year ended October 31 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $16.51 | $12.23 | $10.88 | $9.70 | $10.44 | $7.41 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | (.01) | .06 | – | .01 | .02 | – | ||||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | (2.01) | 4.22 | 1.36 | 1.17 | (.76) | 3.03 | ||||||||||||||||||||
Total from Investment Operations | (2.02) | 4.28 | 1.36 | 1.18 | (.74) | 3.03 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.06) | – | (.01) | – | – | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Redemption fees | –(1) | –(1) | –(1) | –(1) | –(1) | –(1) | ||||||||||||||||||||
Payment from affiliate | –(2) | –(2) | –(2) | – | –(2) | – | ||||||||||||||||||||
Total Distributions and Other | (0.06) | – | (.01) | – | – | – | ||||||||||||||||||||
Net Asset Value, End of Period | $14.43 | $16.51 | $12.23 | $10.88 | $9.70 | $10.44 | ||||||||||||||||||||
Total Return** | (12.26)%(3) | 35.00%(3) | 12.48%(3) | 12.16% | (7.09)%(3) | 41.08% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $867,615 | $1,028,084 | $914,349 | $993,663 | $1,255,023 | $1,655,731 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $874,075 | $915,092 | $999,147 | $1,109,908 | $1,480,508 | $1,332,510 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 0.99% | 1.04% | 1.13% | 1.04% | 1.07% | 1.07% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 0.98% | 1.03% | 1.11% | 1.03% | 1.07% | 1.06% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | (0.15)% | 0.40% | (0.30)% | 0.07% | (0.37)% | (0.27)% | ||||||||||||||||||||
Portfolio Turnover Rates*** | 76% | 57% | 85% | 31% | 24% | 48% |
* | See Note 4 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Redemption fees aggregated less than $.01 on a per share basis for the fiscal year ended. | |
(2) | Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year ended. | |
(3) | During the fiscal year ended, Janus Capital and/or Janus Services fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%. | |
(4) | See “Explanations of Charts, Tables and Financial Statements.” | |
(5) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2008, 2007, 2006, 2005 and 2004. |
See Notes to Financial Statements.
96 Janus Growth Funds April 30, 2008
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Notes to Schedules of Investments (unaudited)
Lipper Health/Biotechnology Funds | Funds that invest at least 65% of their equity portfolios in shares of companies engaged in healthcare, medicine, and biotechnology. | |
Lipper Large-Cap Growth Funds | Funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) greater than 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Largecap growth funds typically have an above-average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P 500® Index. | |
Lipper Mid-Cap Growth Funds | Funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) less than 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Mid-cap growth funds typically have an above-average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P MidCap 400 Index. | |
Lipper Multi-Cap Growth Funds | Funds that, by portfolio practice, invest in a variety of market capitalization ranges without concentrating more than 75% of their equity assets in any one market capitalization range over an extended period of time. Multi-cap funds typically have between 25% to 75% of their assets invested in companies with market capitalizations (on a three-year weighted basis) above 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Multi-cap growth funds typically have an above-average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P SuperComposite 1500 Index. | |
Lipper Science and Technology Funds | Funds that invest at least 65% of their equity portfolio in science and technology stocks. | |
Lipper Small-Cap Growth Funds | Funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) less than 250% of the dollar-weighted median of the smallest 500 of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Small-cap growth funds typically have an above-average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P SmallCap 600 Index. | |
Morgan Stanley Capital International World Information Technology Index | Is a capitalization weighted index that monitors the performance of information technology stocks from developed market countries in North America, Europe, and the Asia/Pacific Region. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
Morgan Stanley Capital International World Health Care Index | Is a capitalization weighted index that monitors the performance of health care stocks from developed market countries in North America, Europe, and the Asia/Pacific Region. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
Russell 1000® Growth Index | Measures the performance of those Russell 1000® Index companies with higher price-to-book ratios and higher forecasted growth values. | |
Russell 2000® Growth Index | Measures the performance of those Russell 2000® Index companies with higher price-to-book ratios and higher forecasted growth values. | |
Russell 2000® Index | Measures the performance of the 2,000 smallest companies in the Russell 3000® Index. | |
Russell 2500TM Growth Index | Measures the performance of those Russell 2500TM Index companies with higher price-to-book ratios and higher forecasted growth values. |
Janus Growth Funds April 30, 2008 97
Table of Contents
Notes to Schedules of Investments (unaudited) (continued)
Russell 3000® Growth Index | Measures the performance of those Russell 3000® Index companies with higher price-to-book ratios and higher forecasted growth values. The stocks in this index are also members of either the Russell 1000® Growth or the Russell 2000® Growth Indices. | |
Russell Midcap® Growth Index | Measures the performance of those Russell Midcap® Index companies with higher price-to-book ratios and higher forecasted growth values. | |
S&P 500® Index | The Standard & Poor’s (“S&P”) 500® Index is a commonly recognized, market-capitalization weighted index of 500 widely held equity securities, designed to measure broad U.S. Equity performance. | |
S&P MidCap 400 Index | An unmanaged group of 400 domestic stocks chosen for their market size, liquidity and industry group representation. | |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. | |
ADR | American Depositary Receipt | |
GDR | Global Depositary Receipt | |
LEAPS | Long-Term Equity Anticipation Securities | |
PLC | Public Limited Company | |
REIT | Real Estate Investment Trust | |
U.S. Shares | Securities of foreign companies trading on an American Stock Exchange. |
* | Non-income-producing security. | |
** | A portion of this security has been segregated by the custodian to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales and/or securities with extended settlement dates. | |
# | Loaned security; a portion or all of the security is on loan at April 30, 2008. | |
† | The security is purchased with the cash collateral received from securities on loan (Note 1). |
º º Schedule of Fair Valued Securities (as of April 30, 2008)
Value as a | |||||||
Value | % of Net Assets | ||||||
Janus Venture Fund | |||||||
Parent Company (LEAPS), expires October 2009, exercise price $6.40 | $ | 38,041 | 0.0% | ||||
Parent Company (LEAPS), expires October 2009, exercise price $6.85 | 8,794 | 0.0% | |||||
Genius Products, Inc. – expires 12/5/10 | 35,625 | 0.0% | |||||
Motorcar Parts of America, Inc. - expires 5/17/12 | 43,348 | 0.0% | |||||
Pokertek, Inc. – expires 4/23/12 | 47,060 | 0.0% | |||||
Wyndcrest Holdings LLC | 7,291,120 | 0.6% | |||||
$ | 7,463,988 | 0.6% | |||||
Janus Global Life Sciences Fund | |||||||
Fibrogen, Inc. | $ | 7,440,153 | 0.9% | ||||
GMP Companies, Inc. | 7,011,316 | 0.8% | |||||
Mediquest Therapeutics | 5,018,510 | 0.6% | |||||
Mediquest Therapeutics - expires 6/15/11 | 282,040 | 0.0% | |||||
Mediquest Therapeutics - expires 6/15/12 | 47,460 | 0.0% | |||||
Mediquest Therapeutics, 14.00%, due 3/31/09 | 1,448,251 | 0.2% | |||||
$ | 21,247,730 | 2.5% | |||||
Securities are valued at “fair value” pursuant to procedures adopted by the Funds’ trustees. The Schedule of Fair Valued Securities does not include international equity securities fair valued pursuant to a systematic fair valuation model.
98 Janus Growth Funds April 30, 2008
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§ Schedule of Restricted and Illiquid Securities (as of April 30, 2008)
Acquisition | Acquisition | Value as a | ||||||||||
Date | Cost | Value | % of Net Assets | |||||||||
Janus Venture Fund | ||||||||||||
Genius Products, Inc. | 12/5/05 | $ | 8,417,000 | $ | 2,612,500 | 0.2% | ||||||
Genius Products, Inc. - expires 12/5/10 º º | 12/5/05 | 1,083,000 | 35,625 | 0.0% | ||||||||
Motorcar Parts of America, Inc. | 5/17/07 | 6,276,886 | 3,979,531 | 0.3% | ||||||||
Motorcar Parts of America, Inc. - expires 5/17/12 º º | 5/17/07 | 198,682 | 43,348 | 0.0% | ||||||||
Pokertek, Inc. - expires 4/23/12 º º | 4/23/07 | 712,613 | 47,060 | 0.0% | ||||||||
Wyndcrest Holdings LLC º º | 7/26/07 | 7,291,120 | 7,291,120 | 0.6% | ||||||||
$ | 23,979,301 | $ | 14,009,184 | 1.1% | ||||||||
Janus Global Life Sciences Fund | ||||||||||||
Fibrogen, Inc. º º | 12/28/04-11/8/05 | $ | 5,786,786 | $ | 7,440,153 | 0.9% | ||||||
GMP Companies, Inc. º º | 5/31/06-2/19/08 | 5,869,431 | 7,011,316 | 0.8% | ||||||||
Mediquest Therapeutics º º | 5/11/06-6/15/06 | 5,018,510 | 5,018,510 | 0.6% | ||||||||
Mediquest Therapeutics - expires 6/15/11 º º | 5/11/06-6/15/06 | – | 282,040 | 0.0% | ||||||||
Mediquest Therapeutics - expires 6/15/12 º º | 10/12/07 | 52,683 | 47,460 | 0.0% | ||||||||
Mediquest Therapeutics, 14.00%, due 3/31/09 º º | 10/12/07 | 1,448,251 | 1,448,251 | 0.2% | ||||||||
$ | 18,175,661 | $ | 21,247,730 | 2.5% | ||||||||
Janus Global Technology Fund | ||||||||||||
Goldman Sachs, Inc., convertible, (Omniture, Inc.), 0% (144A) | 11/20/07 | $ | 4,262,544 | $ | 3,797,390 | 0.4% | ||||||
The Funds have registration rights for certain restricted securities held as of April 30, 2008. The issuer incurs all registration costs.
Janus Growth Funds April 30, 2008 99
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Notes to Schedules of Investments (unaudited) (continued)
£ | The Investment Company Act of 1940, as amended, defines affiliates as those companies in which a fund holds 5% or more of the outstanding voting securities at any time during the six-month period ended April 30, 2008. |
Purchases | Sales | Realized | Dividend | Value | ||||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/08 | ||||||||||||||||
Janus Orion Fund | ||||||||||||||||||||||
CapitalSource, Inc. | 7,563,830 | $ | 120,879,769 | – | $ | – | $ | – | $ | 14,143,555 | $ | 222,816,786 | ||||||||||
Cypress Semiconductor Corp. | 6,704,670 | 148,834,470 | 1,525,160 | 27,961,031 | 21,092,939 | – | 229,894,638 | |||||||||||||||
Dade Behring Holdings, Inc. | – | – | 6,268,506 | 226,736,621 | 255,938,341 | – | – | |||||||||||||||
Neustar, Inc. | 2,735,730 | 63,047,159 | 664,515 | 21,354,520 | (2,596,644) | – | 121,997,084 | |||||||||||||||
Trimble Navigation, Ltd. | 474,615 | 12,096,312 | 888,620 | 25,690,100 | (1,127,102) | – | 113,018,933 | |||||||||||||||
VistaPrint, Ltd. | 153,575 | 5,825,576 | 46,905 | 1,621,651 | 301,894 | – | 93,028,900 | |||||||||||||||
17,632,420 | $ | 350,683,286 | 9,393,706 | $ | 303,363,923 | $ | 273,609,428 | $ | 14,143,555 | $ | 780,756,341 | |||||||||||
Purchases | Sales | Realized | Dividend | Value | ||||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/08 | ||||||||||||||||
Janus Venture Fund | ||||||||||||||||||||||
Century Casinos, Inc.* | – | $ | – | 76,955 | $ | 537,715 | $ | (63,000) | $ | – | $ | 4,817,772 | ||||||||||
Elixir Gaming Technologies, Inc.* | – | – | – | – | – | – | 7,883,520 | |||||||||||||||
Genius Products, Inc.* | – | – | – | – | – | – | 2,612,500 | |||||||||||||||
Health Grades, Inc.* | – | – | – | – | – | – | 9,119,429 | |||||||||||||||
Information Services Group, Inc.* | – | – | – | – | – | – | 10,158,358 | |||||||||||||||
Intermap Technologies, Ltd.* | – | – | – | – | – | – | 13,357,132 | |||||||||||||||
LivePerson, Inc.* | – | – | – | – | – | – | 10,583,215 | |||||||||||||||
Megacable Holdings SAB de C.V.* | 2,665,495 | 8,526,223 | 2,665,495 | 8,526,223 | 375,370 | – | – | |||||||||||||||
Motorcar Parts of America, Inc.* | – | – | – | – | – | – | 3,979,531 | |||||||||||||||
NaviSite Inc.* | 488,314 | 2,641,430 | – | – | – | – | 14,410,579 | |||||||||||||||
NuCo2, Inc.* | – | – | 435,450 | 12,293,175 | (255,750) | – | 10,175,561 | |||||||||||||||
Parent Co.* | – | – | – | – | – | – | 2,627,267 | |||||||||||||||
Pokertek, Inc.* | – | – | – | – | – | – | 1,767,169 | |||||||||||||||
Progressive Gaming International Corp.* | 5,453,641 | 13,547,455 | – | – | – | – | 9,325,726 | |||||||||||||||
Sturm Ruger and Company, Inc.* | – | – | – | – | – | – | 7,911,341 | |||||||||||||||
Think Partnership, Inc.* | – | – | – | – | – | – | 2,627,423 | |||||||||||||||
UCN, Inc.* | 267,110 | 877,456 | – | – | – | – | 4,664,505 | |||||||||||||||
Ultimate Software Group, Inc.* | – | – | – | – | – | – | 51,335,695 | |||||||||||||||
Virtual Radiologic Corp.* | 215,925 | 3,670,725 | 7,678 | 130,526 | 3,592 | – | 2,909,211 | |||||||||||||||
Workstream, Inc. (U.S. Shares)* | – | – | 219,904 | 1,187,328 | (1,027,960) | – | 2,827,519 | |||||||||||||||
Wyndcrest Holdings LLC* | – | – | – | – | – | – | 7,291,120 | |||||||||||||||
$ | 29,263,289 | $ | 22,674,967 | $ | (967,748) | $ | – | $ | 180,384,573 | |||||||||||||
Purchases | Sales | Realized | Dividend | Value | ||||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/08 | ||||||||||||||||
Janus Global Life Sciences Fund | ||||||||||||||||||||||
Achillion Pharmaceuticals, Inc. | – | $ | – | 31,065 | $ | 217,927 | $ | (78,245) | $ | – | $ | 3,686,046 | ||||||||||
Mediquest Therapeutics | – | – | – | – | – | – | 5,018,510 | |||||||||||||||
$ | – | $ | 217,927 | $ | (78,245) | $ | – | $ | 8,704,556 | |||||||||||||
Aggregate collateral segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales and/or securities with extended settlement dates as of April 30, 2008 is noted below.
Fund | Aggregate Value | ||||
Growth | |||||
Janus Fund | $ | 1,464,735,952 | |||
Janus Orion Fund | 1,261,634,939 | ||||
Janus Research Fund | 442,396,500 | ||||
Janus Triton Fund | 4,816,990 | ||||
Janus Venture Fund | 80,183,990 | ||||
Specialty Growth | |||||
Janus Global Life Sciences Fund | 171,588,676 | ||||
Janus Global Technology Fund | 155,197,069 | ||||
100 Janus Growth Funds April 30, 2008
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Notes to Financial Statements (unaudited)
The following section describes the organization and significant accounting policies and provides more detailed information about the schedules and tables that appear throughout this report. In addition, the Notes to Financial Statements explain the methods used in preparing and presenting this report.
1. | Organization and Significant Accounting Policies |
Janus Fund, Janus Enterprise Fund, Janus Orion Fund, Janus Research Fund, Janus Triton Fund, Janus Twenty Fund, Janus Venture Fund, Janus Global Life Sciences Fund and Janus Global Technology Fund (collectively the “Funds” and individually a “Fund”) are series funds. The Funds are part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust has twenty-nine funds. The Funds invest primarily in equity securities. Each Fund in this report is classified as diversified as defined in the 1940 Act, with the exception of Janus Orion Fund and Janus Twenty Fund, which are classified as nondiversified. The Funds are no-load investments.
The following accounting policies have been consistently followed by the Funds and are in conformity with accounting principles generally accepted in the United States of America in the investment company industry.
Investment Valuation
Securities are valued at the last sales price or the official closing price for securities traded on a principal securities exchange (U.S. or foreign) and on the NASDAQ National Market. Securities traded on over-the-counter markets and listed securities for which no sales are reported are valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Funds’ Trustees. Short-term securities with maturities of 60 days or less may be valued at amortized cost, which approximates market value. Debt securities with a remaining maturity of greater than 60 days are valued in accordance with the evaluated bid price supplied by the pricing service. The evaluated bid price supplied by the pricing service is an evaluation that reflects such factors as security prices, yields, maturities and ratings. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect as of the daily close of the New York Stock Exchange (“NYSE”). When market quotations are not readily available or deemed unreliable, or events or circumstances that may affect the value of portfolio securities held by the Funds are identified between the closing of their principal markets and the time the net asset value (“NAV”) is determined, securities may be valued at fair value as determined in good faith under procedures established by and under the supervision of the Funds’ Trustees. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) when significant events occur which may affect the securities of a single issuer, such as mergers, bankruptcies, or significant issuer-specific developments; (ii) when significant events occur which may affect an entire market, such as natural disasters or significant governmental actions; and (iii) when non-significant events occur such as markets closing early or not opening, security trading halts, or pricing of non-valued securities and restricted or non-public securities. The Funds may use a systematic fair valuation model provided by an independent third party to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the NYSE.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Trust is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes.
Expenses
Each Fund bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which may be allocated pro rata to each Fund in the Trust.
Securities Lending
Under procedures adopted by the Trustees, the Funds may lend securities to qualified parties (typically brokers or other financial institutions) who need to borrow securities in order to complete certain transactions such as covering short sales, avoiding failures to deliver securities or completing arbitrage activities. The Funds may seek to earn additional income through securities lending. There is the risk of delay in recovering a loaned security or the risk of loss in collateral rights if the borrower fails financially. Janus Capital Management LLC (“Janus Capital”) makes efforts to balance the benefits and risks from granting such loans.
The Funds do not have the right to vote on securities while they are being lent; however, the Funds may attempt to call back the loan and vote the proxy if time permits. All loans will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral permitted by the
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Notes to Financial Statements (unaudited) (continued)
Securities and Exchange Commission (“SEC”). Cash collateral may be invested in affiliated money market funds or other accounts advised by Janus Capital to the extent consistent with exemptive relief obtained from the SEC or as permitted by the 1940 Act and rules promulgated thereunder.
Dresdner Bank AG (the “Lending Agent”) may also invest the cash collateral in the Allianz Dresdner Daily Asset Fund or investments in unaffiliated money market funds or accounts, mutually agreed to by the Funds and the Lending Agent, that comply with Rule 2a-7 of the 1940 Act relating to money market funds.
As of April 30, 2008, the Funds had on loan securities valued as indicated:
Value at | |||||
Fund | April 30, 2008 | ||||
Growth | |||||
Janus Fund | $ | 622,936,886 | |||
Janus Enterprise Fund | 353,553,461 | ||||
Janus Orion Fund | 450,557,001 | ||||
Janus Research Fund | 255,732,808 | ||||
Janus Triton Fund | 20,807,915 | ||||
Janus Twenty Fund | 941,521,441 | ||||
Janus Venture Fund | 306,688,804 | ||||
Specialty Growth | |||||
Janus Global Life Sciences Fund | 145,079,020 | ||||
Janus Global Technology Fund | 80,295,739 | ||||
As of April 30, 2008, the Funds received cash collateral for securities lending activity as indicated:
Cash Collateral at | |||||
Fund | April 30, 2008 | ||||
Growth | |||||
Janus Fund | $ | 650,974,371 | |||
Janus Enterprise Fund | 363,938,696 | ||||
Janus Orion Fund | 466,199,307 | ||||
Janus Research Fund | 263,570,392 | ||||
Janus Triton Fund | 21,769,654 | ||||
Janus Twenty Fund | 968,392,470 | ||||
Janus Venture Fund | 317,829,396 | ||||
Specialty Growth | |||||
Janus Global Life Sciences Fund | 150,046,463 | ||||
Janus Global Technology Fund | 83,850,254 | ||||
As of April 30, 2008, all cash collateral received by the Funds was invested in the Allianz Dresdner Daily Asset Fund, except as noted in the following tables:
Fund | Time Deposits | ||||
Growth | |||||
Janus Fund | $ | 432,408,016 | |||
Janus Enterprise Fund | 210,809,368 | ||||
Janus Orion Fund | 238,919,596 | ||||
Janus Research Fund | 108,923,839 | ||||
Janus Triton Fund | 10,524,666 | ||||
Janus Twenty Fund | 665,809,883 | ||||
Janus Venture Fund | 132,627,376 | ||||
Specialty Growth | |||||
Janus Global Life Sciences Fund | 85,402,687 | ||||
Janus Global Technology Fund | 42,939,162 | ||||
Fund | Repurchase Agreements | ||||
Growth | |||||
Janus Fund | $ | 141,495,680 | |||
Janus Enterprise Fund | 68,982,567 | ||||
Janus Orion Fund | 78,501,834 | ||||
Janus Research Fund | 35,642,846 | ||||
Janus Triton Fund | 3,443,958 | ||||
Janus Twenty Fund | 217,871,127 | ||||
Janus Venture Fund | 43,399,289 | ||||
Specialty Growth | |||||
Janus Global Life Sciences Fund | 27,946,085 | ||||
Janus Global Technology Fund | 14,050,863 | ||||
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 borrower pays fees at the Funds’ direction to the Lending Agent. The Lending Agent may retain a portion of the interest earned on the cash collateral invested. The cash collateral invested by the Lending Agent is disclosed in the Schedule of Investments (if applicable). The lending fees and the Funds’ portion of the interest income earned on cash collateral are included on the Statement of Operations (if applicable).
Interfund Lending
Pursuant to an exemptive order received from the SEC, the Funds may be party to interfund lending agreements between the Funds and other Janus Capital-sponsored mutual funds, which permit them to borrow or lend cash at a rate beneficial to both the borrowing and lending funds. Outstanding borrowings from all sources totaling 10% or more of the borrowing Fund’s total assets must be collateralized at 102% of the outstanding principal value of the loan; loans of less than 10% may be unsecured.
Forward Currency Transactions
The Funds may enter into forward currency contracts in order to reduce exposure to changes in foreign currency exchange rates on foreign portfolio holdings and to lock in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. A forward currency exchange contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated rate. The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a contract is included in “Net realized gain/(loss) from investment and foreign currency transactions” on the Statement of Operations (if applicable). Forward currency contracts held by the Funds are fully collateralized by other securities, which are denoted in
102 Janus Growth Funds April 30, 2008
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the accompanying Schedule of Investments (if applicable). The collateral is evaluated daily to ensure its market value equals or exceeds the current market value of the corresponding forward currency contracts.
Futures Contracts
The Funds may enter into futures contracts to gain exposure to the stock market pending investment of cash balances or to meet liquidity needs. The Funds may also use such derivative instruments to hedge or protect from adverse movements in securities prices, currency rates or interest rates. The use of futures contracts may involve risks such as the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.
Futures contracts are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Statement of Assets and Liabilities (if applicable). When a contract is closed, a realized gain or loss is recorded as “Net realized gain/(loss) from futures contracts” on the Statement of Operations (if applicable), equal to the difference between the opening and closing value of the contract. Generally, futures contracts are marked-to-market (i.e., treated as realized and subject to distribution) for federal income tax purposes at fiscal year-end. Securities designated as collateral for market value on futures contracts are noted in the Schedule of Investments (if applicable). Such collateral is in the possession of the Funds’ custodian.
Swaps
The Funds may enter into swap agreements to hedge exposure to interest rates and credit risk or for investment purposes. A swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to changes in specified prices or rates for a specified amount of an underlying asset. The payment flows are usually netted against each other, with the difference being paid by one party to the other. Swap contracts are reported as an asset and liability on the Statement of Assets and Liabilities. Realized gains and losses are reported in “Net realized gain/(loss) from swap contracts” on the Statement of Operations (if applicable).
Risks may arise as a result of the failure of the counterparty to the swap contract to comply with the terms of the swap contract. The loss incurred by the failure of a counterparty is generally limited to the net interim payment to be received by the Funds, and/or the termination value. Therefore, the Funds consider the creditworthiness of each counterparty to a swap contract in evaluating potential credit risk. Additionally, risks may arise from unanticipated movements in interest rates or in the value of the underlying securities.
Options Contracts
The Funds may purchase or write put and call options on futures contracts and on portfolio securities for hedging purposes or as a substitute for an investment. The Funds may also purchase or write put and call options on foreign currencies in a manner similar to that in which futures or forward contracts on foreign currencies will be utilized. The Funds may also invest in Long-Term Equity Anticipation Securities (LEAPS), which are long-term option contracts that can be maintained for a period of up to three years. The Funds generally invest in options to hedge against adverse movements in the value of portfolio holdings.
When an option is written, the Funds receive a premium and become obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. In writing an option, the Funds bear the market risk of an unfavorable change in the price of the security underlying the written option. Exercise of an option written by the Funds could result in the Funds buying or selling a security at a price different from the current market value.
When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option are adjusted by the amount of premium received or paid.
The Funds may also purchase and write exchange-listed and over-the-counter put and call options on domestic securities indices, and on foreign securities indices listed on domestic and foreign securities exchanges. Options on securities indices are similar to options on securities except that (1) the expiration cycles of securities index options are monthly, while those of securities options are currently quarterly, and (2) the delivery requirements are different. Instead of giving the right to take or make delivery of securities at a specified price, an option on a securities index gives the holder the right to receive a cash “exercise settlement amount” equal to (a) the amount, if any, by which the fixed exercise price of the option exceeds (in the case of a put) or is less than (in the case of a call) the closing value of the underlying index on the date of exercise, multiplied by (b) a fixed “index multiplier.” Receipt of this cash amount will depend upon the closing level of the securities index upon which the option is based being greater than, in the case of a call, or less than, in the case of a put, the exercise price of the index and the exercise price of the option times a specified multiple. The writer of the option is obligated, in return for the premium received, to make delivery of this amount.
Holdings designated to cover outstanding written options are noted in the Schedule of Investments (if applicable). Options written are reported as a liability on the Statement of Assets and Liabilities as “Options written at value” (if applicable).
Realized gains and losses are reported as “Net realized gain/(loss) from options contracts” on the Statement of Operations
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Notes to Financial Statements (unaudited) (continued)
(if applicable). The Funds recognized realized gains/(losses) from written options contracts during the six-month period ended April 30, 2008 as indicated in the table below:
Fund | Gains/(Losses) | ||||
Growth | |||||
Janus Fund | $ | 1,048,806 | |||
Janus Orion Fund | 9,269,563 | ||||
Specialty Growth | |||||
Janus Global Technology Fund | ($ | 1,498,835) | |||
The risk in writing call options is that the Funds give up the opportunity for profit if the market price of the security increases and the option is exercised. The risk in writing put options is that the Funds may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying options is that the Funds pay a premium whether or not the option is exercised. The use of such instruments may involve certain additional risks as a result of unanticipated movement in the market. A lack of correlation between the value of an instrument underlying an option and the asset being hedged, or unexpected adverse price movements, could render the Funds’ hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. There is no limit to the loss the Funds may recognize due to written call options.
Written option activity for the six-month period ended April 30, 2008 is indicated in the tables below:
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Janus Fund | ||||||||
Options outstanding at October 31, 2007 | 9,869 | $ | 1,103,756 | |||||
Options written | 83,030 | 21,007,260 | ||||||
Options expired | (4,156) | (437,566) | ||||||
Options closed | (5,713) | (666,190) | ||||||
Options exercised | – | – | ||||||
Options outstanding at April 30, 2008 | 83,030 | $ | 21,007,260 | |||||
Number of | Premiums | |||||||
Put Options | Contracts | Received | ||||||
Janus Fund | ||||||||
Options outstanding at October 31, 2007 | 2,660 | $ | 202,866 | |||||
Options written | 58,569 | 6,222,410 | ||||||
Options expired | (1,143) | (33,147) | ||||||
Options closed | – | – | ||||||
Options exercised | (1,517) | (169,719) | ||||||
Options outstanding at April 30, 2008 | 58,569 | $ | 6,222,410 | |||||
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Janus Orion Fund | ||||||||
Options outstanding at October 31, 2007 | – | $ | – | |||||
Options written | 803,370 | 37,414,801 | ||||||
Options expired | (16,703) | (6,344,240) | ||||||
Options closed | (549,677) | (14,364,161) | ||||||
Options exercised | (4,399) | (667,365) | ||||||
Options outstanding at April 30, 2008 | 232,591 | $ | 16,039,035 | |||||
Number of | Premiums | |||||||
Put Options | Contracts | Received | ||||||
Janus Orion Fund | ||||||||
Options outstanding at October 31, 2007 | – | $ | – | |||||
Options written | 1,537,694 | 50,552,839 | ||||||
Options expired | (70,997) | (5,876,357) | ||||||
Options closed | (1,418,301) | (31,850,977) | ||||||
Options exercised | – | – | ||||||
Options outstanding at April 30, 2008 | 48,396 | $ | 12,825,505 | |||||
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Janus Triton Fund | ||||||||
Options outstanding at October 31, 2007 | – | $ | – | |||||
Options written | 1,110 | 209,406 | ||||||
Options expired | – | – | ||||||
Options closed | – | – | ||||||
Options exercised | – | – | ||||||
Options outstanding, at April 30, 2008 | 1,110 | $ | 209,406 | |||||
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Janus Venture Fund | ||||||||
Options outstanding at October 31, 2007 | – | $ | – | |||||
Options written | 10,627 | 1,959,454 | ||||||
Options expired | – | – | ||||||
Options closed | – | – | ||||||
Options exercised | – | – | ||||||
Options outstanding at April 30, 2008 | 10,627 | $ | 1,959,454 | |||||
Number of | Premiums | |||||||
Put Options | Contracts | Received | ||||||
Janus Venture Fund | ||||||||
Options outstanding at October 31, 2007 | – | $ | – | |||||
Options written | 6,627 | 1,110,750 | ||||||
Options expired | – | – | ||||||
Options closed | – | – | ||||||
Options exercised | – | – | ||||||
Options outstanding at April 30, 2008 | 6,627 | $ | 1,110,750 | |||||
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Janus Global Technology Fund | ||||||||
Options outstanding at October 31, 2007 | 2,091 | $ | 1,449,365 | |||||
Options written | – | – | ||||||
Options expired | – | – | ||||||
Options closed | (2,091) | (1,449,365) | ||||||
Options exercised | – | – | ||||||
Options outstanding at April 30, 2008 | – | $ | – | |||||
Short Sales
The Funds may engage in “short sales against the box.” Short sales against the box involve either selling short a security that the Funds own, or selling short a security that the Funds have the right to obtain, for delivery at a specified date in the future. The Funds may enter into short sales against the box to hedge against anticipated declines in the market price of portfolio securities. The Funds do not deliver from their portfolios the securities sold short and do not immediately receive the
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proceeds of the short sale. The Funds borrow the securities sold short and receive proceeds from the short sale only when they deliver the securities to the lender. If the value of the securities sold short increases prior to the scheduled delivery date, the Funds lose the opportunity to participate in the gain.
The Funds may also engage in other short sales. The Funds may engage in short sales when the portfolio managers and/or investment personnel anticipate that a security’s market purchase price will be less than its borrowing price. To complete the transaction, the Funds must borrow the security to deliver it to the purchaser and buy that same security in the market to return it to the lender. The total market value of all of a Fund’s short sales positions, other than against the box, will not exceed 10% of its net assets. 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 that 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. There is no limit to the size of any loss that the Fund may recognize upon termination of a short sale. Short sales held by the Funds are fully collateralized by other securities, which are denoted in the accompanying Schedule of Investments (if applicable).
Foreign Currency Translations
The Funds do not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arises from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and market risk. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
When-Issued Securities
The Funds may purchase or sell securities on a when-issued or forward commitment basis. The price of the underlying securities and date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Losses may arise due to changes in the market value of the securities or from the inability of counterparties to meet the terms of the contract. In connection with such purchases, the Funds may hold liquid assets as collateral with the Funds’ custodian sufficient to cover the purchase price.
Exchange-Traded Funds
The Funds may invest in exchange-traded funds, which are index-based investment companies that hold substantially all of their assets in securities representing their specific index. As a shareholder of another investment company, a Fund would bear its pro rata portion of the other investment company’s expenses, including advisory fees, in addition to the expenses the Fund bears directly in connection with its own operations.
Equity-Linked Structured Notes
The Funds may invest in equity-linked structured notes. Equity-linked structured notes are derivative securities which are specially designed to combine the characteristics of one or more underlying securities and their equity derivatives in a single note form. The return and/or yield or income component may be based on the performance of the underlying equity securities, an equity index, and/or option positions. Equity-linked structured notes are typically offered in limited transactions by financial institutions in either registered or non-registered form. An investment in equity-linked structured notes creates exposure to the credit risk of the issuing financial institution, as well as to the market risk of the underlying securities. There is no guaranteed return of principal with these securities and the appreciation potential of these securities may be limited by a maximum payment or call right. In certain cases, equity-linked structured notes may be more volatile and less liquid than less complex securities or other types of fixed-income securities. Such securities may exhibit price behavior that does not correlate with other fixed-income securities.
Restricted Cash
As of April 30, 2008, Janus Orion Fund and Janus Research Fund had restricted cash in the amount of $8,392,000 and $2,970,000, respectively. The restricted cash represents funds in relation to options contracts invested by the Funds as of April 30, 2008. The restricted cash is held at the Funds’ custodian, State Street Bank and Trust Company. The carrying value of the restricted cash approximates fair value.
Initial Public Offerings
The Funds may invest in initial public offerings (“IPOs”). IPOs and other investment techniques may have a magnified performance impact on a fund with a small asset base. A Fund may not experience similar performance as its assets grow.
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Notes to Financial Statements (unaudited) (continued)
Restricted Security Transactions
Restricted securities held by the Funds may not be sold except in exempt transactions or in a public offering registered under the Securities Act of 1933, as amended. The risk of investing in such securities is generally greater than the risk of investing in the securities of widely held, publicly traded companies. Lack of a secondary market and resale restrictions may result in the inability of the Funds to sell a security at a fair price and may substantially delay the sale of the security. In addition, these securities may exhibit greater price volatility than securities for which secondary markets exist.
Dividend Distributions
The Funds generally declare and distribute dividends of net investment income and realized capital gains (if any) annually. The majority of dividends and capital gains distributions from the Funds will be automatically reinvested into additional shares of that Fund, based on the discretion of the shareholder.
The Funds may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REIT’s taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Funds distribute such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Federal Income Taxes
No provision for income taxes is included in the accompanying financial statements, as the Funds intend to distribute to shareholders all taxable investment income and realized gains and otherwise comply with Subchapter M of the Internal Revenue Code applicable to regulated investment companies.
The Funds adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes on April 30, 2008. FIN 48 requires an evaluation of tax positions taken (or expected to be taken) in the course of preparing a Fund’s tax return to determine whether these positions meet a “more-likely-than-not” standard that based on the technical merits have a more than fifty percent likelihood of being sustained by a taxing authority upon examination. A tax position that meets the “more-likely-than-not” recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations.
FIN 48 requires management of the Funds to analyze all open tax years, fiscal years 2003-2006 as defined by Statute of Limitations, for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of and during the six-month period ended April 30, 2008, the Funds did not have a liability for any unrecognized tax benefits. The Funds have no examination in progress and are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
New Accounting Pronouncements
In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS No. 157”), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not require new fair value measurements, but is applied to the extent that other accounting pronouncements require or permit fair value measurements. SFAS No. 157 emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Management does not believe the adoption of SFAS No. 157 will impact the financial statement amounts; however, the Funds will be required to disclose the extent to which fair value is used to measure assets and liabilities and the inputs used to develop the measurements.
In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS No. 159”), which permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Management does not believe the adoption of SFAS No. 159 will impact the financial statement amounts.
In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities”
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(“SFAS No. 161”), which requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS No. 161 is effective for financial statements issued for fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. Management is in the process of evaluating the impact of SFAS No. 161 on the Funds’ financial statement disclosures.
2. Investment Advisory Agreements and Other Transactions With Affiliates
The Funds pay a monthly advisory fee to Janus Capital based upon average daily net assets and calculated at the annual rate shown in the table below:
Fund | Advisory Fee % | ||||
Growth | |||||
Janus Fund | 0.64% | ||||
Janus Enterprise Fund | 0.64% | ||||
Janus Orion Fund | 0.64% | ||||
Janus Research Fund | 0.64% | ||||
Janus Triton Fund | 0.64% | ||||
Janus Twenty Fund | 0.64% | ||||
Janus Venture Fund | 0.64% | ||||
Specialty Growth | |||||
Janus Global Life Sciences Fund | 0.64% | ||||
Janus Global Technology Fund | 0.64% | ||||
For Janus Research Fund, the investment advisory fee is determined by calculating a base fee and applying a performance adjustment. The base fee rate is the same as the investment advisory fee rate shown in the table above. The performance adjustment either increases or decreases the base fee depending on how well the Fund has performed relative to its benchmark, as shown in the following table:
Fund | Benchmark Index | ||||
Janus Research Fund | Russell 1000® Growth Index | ||||
Any performance adjustment for Janus Research Fund commenced on February 1, 2007, prior to which only the base rate fee applied. The calculation of the performance adjustment is applied as follows:
(Investment Advisory Fee = Base Fee +/- Performance Adjustment).
The investment advisory fee paid to Janus Capital by the Fund consists of two components: (i) 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”), plus or minus (ii) a performance-fee adjustment (“Performance Adjustment”) calculated by applying a variable rate of up to 0.15% (positive or negative) to the Fund’s average daily net assets during the applicable performance measurement period.
The performance measurement period generally is the previous 36 months. When the Fund’s performance-based fee structure has been in effect for at least 12 months, but less than 36 months, the performance measurement period will be equal to the time that has elapsed since the performance-based fee structure took effect. As noted above, any Performance Adjustment began February 2007 for Janus Research Fund. No Performance Adjustment will be applied unless the difference between the Fund’s investment performance and the investment record of the Fund’s benchmark index is 0.50% or greater (positive or negative) during the applicable performance measurement period. Because the Performance Adjustment is tied to the Fund’s performance relative to its benchmark index (and not its absolute performance), the Performance Adjustment could increase Janus Capital’s fee even if the Fund’s shares lose value during the performance measurement period and could decrease Janus Capital’s fee even if the Fund’s shares increase in value during the performance measurement period. For purposes of computing the Base Fee and the Performance Adjustment, net assets will be averaged over different periods (average daily net assets during the previous month for the Base Fee, versus average daily net assets during the performance measurement period for the Performance Adjustment). Performance of the Fund is calculated net of expenses, whereas the Fund’s benchmark index does not have any expenses. Reinvestment of dividends and distributions are included in calculating both the performance of the Fund and the Fund’s benchmark index. The Base Fee is calculated and accrued daily. The Performance Adjustment is calculated monthly in arrears and is accrued evenly each day throughout the month. The investment fee is paid monthly in arrears.
It is not possible to predict the effect of the Performance Adjustment on future overall compensation to Janus Capital since it will depend on the performance of the Fund relative to the record of the Fund’s benchmark index and future changes to the size of the Fund.
The Fund’s prospectus 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 plus/minus any Performance Adjustment. During the six-month period ended April 30, 2008, the Fund recorded the following Performance Adjustment as indicated in the table below:
Performance | |||||
Fund | Fee | ||||
Janus Research Fund | $ | 3,103,459 | |||
Until at least March 1, 2009, provided that Janus Capital remains investment adviser to the Funds, Janus Capital has agreed to reimburse Janus Triton Fund by the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding
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Notes to Financial Statements (unaudited) (continued)
brokerage commissions, interest, dividends, taxes and extraordinary expenses (including, but not limited to, acquired fund fees and expenses), exceed the annual rate of 1.25%. If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as Excess Expense Reimbursement on the Statement of Operations.
The Funds’ expenses may be reduced by expense offsets from an unaffiliated custodian and/or transfer agent. Such credits or offsets are included in “Expense and Fee Offset” on the Statement of Operations. The transfer agent fee offsets received during the period reduce Transfer Agent Fees and Expenses. Custodian offsets received reduce Custodian Fees. The Funds could have employed the assets used by the custodian and/or transfer agent to produce income if they had not entered into an expense offset arrangement.
Each Fund pays Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital and the Funds’ transfer agent, an asset-weighted average annual fee based on the proportion of each Fund’s total net assets sold directly and the proportion of each Fund’s net assets sold through financial intermediaries. The applicable fee rates are 0.16% of net assets on the proportion of assets sold directly and 0.21% on the proportion of assets sold through intermediaries. In addition, Janus Services receives $4.00 per open shareholder account (excluding Janus Twenty Fund and Janus Venture Fund) for transfer agent services.
During the six-month period ended April 30, 2008, Janus Services reimbursed the following Funds as a result of dilutions caused by incorrectly processed shareholder activity as indicated in the table below:
Fund | |||||
Growth | |||||
Janus Fund | $ | 5,804 | |||
Janus Enterprise Fund | 15,570 | ||||
Janus Orion Fund | 14,331 | ||||
Janus Research Fund | 670 | ||||
Janus Triton Fund | 19,149 | ||||
Janus Twenty Fund | 35,777 | ||||
Janus Venture Fund | 4,124 | ||||
Specialty Growth | |||||
Janus Global Technology Fund | 146 | ||||
During the fiscal year ended October 31, 2007, Janus Services reimbursed the following Funds as a result of dilutions caused by incorrectly processed shareholder activity as indicated in the table below:
Fund | |||||
Growth | |||||
Janus Fund | $ | 6,850 | |||
Janus Enterprise Fund | 19,042 | ||||
Janus Orion Fund | 8,168 | ||||
Janus Research Fund | 17,084 | ||||
Janus Triton Fund | 4,199 | ||||
Janus Twenty Fund | 46,019 | ||||
Janus Venture Fund | 8,516 | ||||
Specialty Growth | |||||
Janus Global Life Sciences Fund | 2,791 | ||||
Janus Global Technology Fund | 4,978 | ||||
During the six-month period ended April 30, 2008, Janus Capital reimbursed the following Funds as a result of dilutions caused by certain trading and/or pricing errors as indicated in the table below:
Fund | |||||
Growth | |||||
Janus Fund | $ | 21 | |||
Janus Enterprise Fund | 4 | ||||
Janus Triton Fund | 483 | ||||
During the fiscal year ended October 31, 2007, Janus Capital reimbursed the following Funds as a result of dilutions caused by certain trading and/or pricing errors as indicated in the table below:
Fund | |||||
Growth | |||||
Janus Fund | $ | 82,464 | |||
Janus Research Fund | 20 | ||||
Janus Twenty Fund | 227 | ||||
Specialty Growth | |||||
Janus Global Life Sciences Fund | 14,491 | ||||
For the six-month period ended April 30, 2008, Janus Capital assumed $16,904 of legal, consulting and Trustee costs and fees incurred by the funds in Janus Investment Fund, Janus Aspen Series and Janus Adviser Series (the “Portfolios”) in connection with the regulatory and civil litigation matters discussed in the Pending Legal Matters. These non-recurring costs were allocated to all Portfolios based on the Portfolios’ respective net assets as of July 31, 2004. No fees were allocated to the Portfolios that commenced operations after July 31, 2004. As a result, no fees were allocated to Janus Triton Fund. Additionally, all future non-recurring costs will be allocated to the Portfolios based on the Portfolios’ respective net assets on July 31, 2004. These “Non-recurring costs” and “Costs assumed by Janus Capital” are shown on the 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 Funds. All deferred fees are credited to an account established in the name of the Trustees.
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The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Funds as unrealized appreciation/(depreciation) and is shown as of April 30, 2008 on the Statement of Assets and Liabilities as an asset, “Non-interested Trustees’ deferred compensation,” and a liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the six-month period ended April 30, 2008 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. No deferred fees were paid to any Trustee under the Deferred Plan during the six-month period ended April 30, 2008.
Certain officers of the Funds may also be officers and/or directors of Janus Capital. Such officers receive no compensation from the Funds, except for the Funds’ Chief Compliance Officer. Effective January 1, 2006, the Funds began reimbursing the adviser for a portion of the compensation paid to the Chief Compliance Officer of the Trust. Total compensation of $39,907 was paid by the Trust during the six-month period ended April 30, 2008. Each Fund’s portion is reported as part of “Other Expenses” on the Statement of Operations.
A 2.00% redemption fee may be imposed on shares of Janus Global Life Sciences Fund and Janus Global Technology Fund held for 90 days or less. This fee is paid to the Funds rather than Janus Capital, and is designed to deter excessive short-term trading and to offset the brokerage commissions, market impact, and other costs associated with changes in the Funds’ asset levels and cash flow due to short-term money movements in and out of the Funds. The redemption fee is accounted for as an addition to Paid-in Capital. Total redemption fees received by the Funds for the six-month period ended April 30, 2008 are indicated in the table below:
Fund | Redemption Fee | ||||
Janus Global Life Sciences Fund | $ | 68,000 | |||
Janus Global Technology Fund | $ | 97,005 | |||
The Funds may invest in money market funds, including funds managed by Janus Capital. During the six-month period ended April 30, 2008, the following Funds recorded distributions from affiliated investment companies as affiliated dividend income, and had the following affiliated purchases and sales:
Purchases | Sales | Dividend | Value | |||||||||||
Shares/Cost | Shares/Cost | Income | at 4/30/08 | |||||||||||
Janus Institutional Cash Management Fund – Institutional Shares | ||||||||||||||
Growth | ||||||||||||||
Janus Fund | $ | 645,761,263 | $ | 641,234,046 | $ | 3,194,307 | $ | 180,867,209 | ||||||
Janus Enterprise Fund | 95,112,045 | 78,543,513 | 1,141,062 | 41,397,952 | ||||||||||
Janus Orion Fund | 563,778,446 | 614,830,154 | 3,109,589 | 122,437,860 | ||||||||||
Janus Research Fund | 491,373,218 | 533,484,077 | 2,011,891 | 61,741,991 | ||||||||||
Janus Triton Fund | 14,509,283 | 17,484,140 | 53,656 | 3,223,446 | ||||||||||
Janus Twenty Fund | 442,500,692 | 459,731,881 | 9,091,995 | 410,632,853 | ||||||||||
Janus Venture Fund | 39,102,284 | 42,611,714 | 20,124 | 51,570 | ||||||||||
Specialty Growth | ||||||||||||||
Janus Global Life Sciences Fund | 75,969,686 | 74,677,497 | 147,845 | 5,357,339 | ||||||||||
Janus Global Technology Fund | 54,482,901 | 68,588,751 | 621,999 | 20,581,207 | ||||||||||
$ | 2,422,589,819 | $ | 2,531,185,773 | $ | 19,392,468 | $ | 846,291,427 | |||||||
Janus Institutional Money Market Fund – Institutional Shares | ||||||||||||||
Growth | ||||||||||||||
Janus Fund | $ | 1,007,574,322 | $ | 832,706,954 | $ | 1,016,913 | $ | 259,579,562 | ||||||
Janus Enterprise Fund | 263,908,787 | 216,612,487 | 365,393 | 61,926,551 | ||||||||||
Janus Orion Fund | 1,023,925,156 | 867,877,846 | 1,201,925 | 156,047,310 | ||||||||||
Janus Research Fund | 694,382,223 | 754,189,923 | 504,087 | 303,000 | ||||||||||
Janus Triton Fund | 33,018,095 | 25,524,295 | 43,636 | 7,493,800 | ||||||||||
Janus Twenty Fund | 1,379,832,771 | 1,339,681,119 | 5,130,449 | 547,533,260 | ||||||||||
Janus Venture Fund | 60,809,282 | 54,590,907 | 42,354 | 6,218,375 | ||||||||||
Specialty Growth | ||||||||||||||
Janus Global Life Sciences Fund | 104,089,613 | 89,312,025 | 59,191 | 19,632,438 | ||||||||||
Janus Global Technology Fund | 133,055,748 | 121,908,249 | 206,025 | 17,146,360 | ||||||||||
$ | 4,700,595,997 | $ | 4,302,403,805 | $ | 8,569,973 | $ | 1,075,880,656 | |||||||
Janus Growth Funds April 30, 2008 109
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Notes to Financial Statements (unaudited) (continued)
3. | Purchases and Sales of Investment Securities |
For the six-month period ended April 30, 2008, the aggregate cost of purchases and proceeds from sales of investment securities (excluding short-term securities and options contracts) were as follows:
Purchase of Long- | Proceeds from Sales | |||||||||||||
Purchase of | Proceeds from Sales | Term U.S. Government | of Long-Term U.S. | |||||||||||
Fund | Securities | of Securities | Obligations | Government Obligations | ||||||||||
Growth | ||||||||||||||
Janus Fund | $ | 7,331,304,186 | $ | 7,853,076,955 | $ | – | $ | – | ||||||
Janus Enterprise Fund | 832,643,671 | 911,429,914 | – | – | ||||||||||
Janus Orion Fund | 3,590,897,642 | 3,538,753,645 | – | – | ||||||||||
Janus Research Fund | 2,231,044,512 | 2,351,165,993 | – | – | ||||||||||
Janus Triton Fund | 59,732,749 | 54,259,901 | – | – | ||||||||||
Janus Twenty Fund | 2,350,866,693 | 2,673,296,119 | – | – | ||||||||||
Janus Venture Fund | 340,278,605 | 408,516,285 | – | – | ||||||||||
Specialty Growth | ||||||||||||||
Janus Global Life Sciences Fund | 323,533,917 | 382,419,279 | – | – | ||||||||||
Janus Global Technology Fund | 399,652,147 | 422,314,134 | – | – | ||||||||||
4. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses and capital loss carryovers.
The Funds have elected to treat gains and losses on forward foreign currency contracts as capital gains and losses. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of April 30, 2008 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 are wash sale loss deferrals and passive foreign investment companies.
Net Tax | ||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||
Growth | ||||||||||||||
Janus Fund | $ | 10,744,742,088 | $ | 1,901,368,298 | $ | (579,326,515) | $ | 1,322,041,783 | ||||||
Janus Enterprise Fund | 1,992,760,313 | 580,650,973 | (109,911,429) | 470,739,544 | ||||||||||
Janus Orion Fund | 4,898,924,286 | 955,006,801 | (200,362,990) | 754,643,811 | ||||||||||
Janus Research Fund | 4,225,109,138 | 696,114,485 | (280,508,831) | 415,605,654 | ||||||||||
Janus Triton Fund | 165,078,872 | 14,323,566 | (18,945,751) | (4,622,185) | ||||||||||
Janus Twenty Fund | 8,447,089,072 | 5,497,115,249 | (223,731,707) | 5,273,383,542 | ||||||||||
Janus Venture Fund | 1,507,679,828 | 279,258,801 | (201,750,248) | 77,508,553 | ||||||||||
Specialty Growth | ||||||||||||||
Janus Global Life Sciences Fund | 885,704,981 | 144,663,397 | (54,857,859) | 89,805,538 | ||||||||||
Janus Global Technology Fund | 848,901,543 | 188,689,875 | (84,453,229) | 104,236,646 | ||||||||||
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Net capital loss carryovers as of October 31, 2007 are indicated in the table below. These losses may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. The following table shows the expiration dates of the carryovers.
Accumulated | |||||||||||||||||
Fund | October 31, 2008 | October 31, 2009 | October 31, 2010 | October 31, 2011 | Capital Losses | ||||||||||||
Growth | |||||||||||||||||
Janus Fund(1) | $ | (9,277,363) | $ | (1,600,258,867) | $ | (2,692,706,418) | $ | (569,521,625) | $ | (4,871,764,273) | |||||||
Janus Enterprise Fund(1) | (3,673,874) | (2,728,561,313) | (1,180,687,781) | (35,756,979) | (3,948,679,947) | ||||||||||||
Janus Orion Fund(1) | (1,559,485) | (1,125,939,471) | (584,074,251) | – | (1,711,573,207) | ||||||||||||
Janus Research Fund | – | (1,556,504,638) | (2,677,021,633) | (22,598,721) | (4,256,124,992) | ||||||||||||
Janus Triton Fund | – | – | – | – | – | ||||||||||||
Janus Twenty Fund | – | (639,987,649) | (117,584,500) | (643,606,306) | (1,401,178,455) | ||||||||||||
Janus Venture Fund(1) | – | (25,161,575) | (12,580,788) | – | (37,742,363) | ||||||||||||
Specialty Growth | |||||||||||||||||
Janus Global Life Sciences Fund | – | (301,362,984) | (251,753,591) | (103,237,607) | (656,354,182) | ||||||||||||
Janus Global Technology Fund | – | (1,473,525,794) | (857,178,929) | (83,082,507) | (2,413,787,230) | ||||||||||||
(1) | Capital loss carryovers subject to annual limitations. |
During the year ended October 31, 2007, the following capital loss carryovers were utilized by the Funds as indicated in the table below:
Capital Loss | |||||||||||||||||
Fund | Carryover Utilized | ||||||||||||||||
Growth | |||||||||||||||||
Janus Fund | $ | 517,876,026 | |||||||||||||||
Janus Enterprise Fund | 179,046,774 | ||||||||||||||||
Janus Orion Fund | 128,854,569 | ||||||||||||||||
Janus Research Fund | 543,442,215 | ||||||||||||||||
Janus Twenty Fund | 461,314,168 | ||||||||||||||||
Janus Venture Fund | 12,580,786 | ||||||||||||||||
Specialty Growth | |||||||||||||||||
Janus Global Life Sciences Fund | 98,793,290 | ||||||||||||||||
Janus Global Technology Fund | 137,600,770 | ||||||||||||||||
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Notes to Financial Statements (unaudited) (continued)
5. | Capital Share Transactions |
For the six-month period ended | ||||||||||||||||||||||||||||||||||||||||
April 30, 2008 (unaudited) | ||||||||||||||||||||||||||||||||||||||||
and the fiscal year ended | ||||||||||||||||||||||||||||||||||||||||
October 31, 2007 | Janus Fund | Janus Enterprise Fund | Janus Orion Fund | Janus Research Fund | Janus Triton Fund | |||||||||||||||||||||||||||||||||||
(all numbers in thousands) | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||||||||||||||
Transactions in Fund Shares | ||||||||||||||||||||||||||||||||||||||||
Shares sold | 19,430 | 41,962 | 3,994 | 7,478 | 70,011 | 102,438 | 16,750 | 25,694 | 2,831 | 4,172 | ||||||||||||||||||||||||||||||
Reinvested dividends and distributions | 1,905 | 1,317 | – | – | 1,261 | 763 | 132 | 112 | 1,166 | 113 | ||||||||||||||||||||||||||||||
Shares repurchased | (35,009) | (64,516) | (4,974) | (8,075) | (49,327) | (62,559) | (27,234) | (30,052) | (2,193) | (3,972) | ||||||||||||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | (13,674) | (21,237) | (980) | (597) | 21,945 | 40,642 | (10,352) | (4,246) | 1,804 | 313 | ||||||||||||||||||||||||||||||
Shares Outstanding, Beginning of Period | 387,340 | 408,577 | 37,601 | 39,198 | 382,370 | 341,728 | 156,011 | 160,257 | 8,867 | 8,554 | ||||||||||||||||||||||||||||||
Shares Outstanding, End of Period | 373,666 | 387,340 | 36,621 | 37,601 | 404,315 | 382,370 | 145,659 | 156,011 | 10,671 | 8,867 |
For the six-month period ended | ||||||||||||||||||||||||||||||||
April 30, 2008 (unaudited) | ||||||||||||||||||||||||||||||||
and the fiscal year ended | Janus Global | Janus Global | ||||||||||||||||||||||||||||||
October 31, 2007 | Janus Twenty Fund | Janus Venture Fund | Life Sciences Fund | Technology Fund | ||||||||||||||||||||||||||||
(all numbers in thousands) | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||||||||
Transactions in Fund Shares | ||||||||||||||||||||||||||||||||
Shares sold | 7,534 | 9,915 | 370 | 713 | 2,661 | 1,518 | 3,284 | 4,803 | ||||||||||||||||||||||||
Reinvested dividends and distributions | 339 | 1,014 | 5,473 | 2,441 | – | – | 239 | – | ||||||||||||||||||||||||
Shares repurchased | (9,072) | (21,025) | (1,500) | (2,118) | (2,712) | (12,952) | (5,662) | (17,295) | ||||||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | (1,199) | (10,096) | 4,343 | 1,036 | (51) | (11,434) | (2,139) | (12,492) | ||||||||||||||||||||||||
Shares Outstanding, Beginning of Period | 170,940 | 181,036 | 22,306 | 21,270 | 37,064 | 48,498 | 62,281 | 74,773 | ||||||||||||||||||||||||
Shares Outstanding, End of Period | 169,741 | 170,940 | 26,649 | 22,306 | 37,013 | 37,064 | 60,142 | 62,281 |
6. | Pending Legal Matters |
In the fall of 2003, the Securities and Exchange Commission (“SEC”), the Office of the New York State Attorney General (“NYAG”), the Colorado Attorney General (“COAG”), and the Colorado Division of Securities (“CDS”) announced that they were investigating alleged frequent trading practices in the mutual fund industry. On August 18, 2004, Janus Capital announced that it had reached final settlements with the SEC, the NYAG, the COAG, and the CDS related to such regulators’ investigations into Janus Capital’s frequent trading arrangements.
A number of civil lawsuits were brought against Janus Capital and certain of its affiliates, the Janus funds, and related entities and individuals based on allegations similar to those announced by the above regulators and were filed in several state and federal jurisdictions. Such lawsuits alleged a variety of theories for recovery including, but not limited to, the federal securities laws, other federal statutes (including ERISA), and various common law doctrines. The Judicial Panel on Multidistrict Litigation transferred these actions to the U.S. District Court for the District of Maryland (the “Court”) for coordinated proceedings. On September 29, 2004, five consolidated amended complaints were filed with the Court that generally include: (i) claims by a putative class of investors in certain Janus funds asserting claims on behalf of the investor class (Marini, et al. v. Janus Investment Fund, et al., U.S. District Court, District of Maryland, Case No. 04-CV-00497); (ii) derivative claims by investors in certain Janus funds ostensibly on behalf of such funds (Steinberg et al. v. Janus Capital Management, LLC et al., U.S. District Court, District of Maryland, Case No. 04-CV-00518); (iii) claims on behalf of participants in the Janus 401(k) plan (Wangberger v. Janus Capital Group Inc., 401(k) Advisory Committee, et al., U.S. District Court, District of Maryland, Case No. JFM-05-2711); (iv) claims brought on behalf of shareholders of Janus Capital Group Inc. (“JCGI”) on a derivative basis against the Board of Directors of JCGI (Chasen v. Whiston, et al., U.S. District Court, District of Maryland, Case No. 04-MD-00855); and (v) claims by a putative class of shareholders of JCGI asserting claims on behalf of the shareholders (Wiggins, et al. v. Janus Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No. 04-CV-00818). Each of the five complaints initially named JCGI and/or Janus Capital as a defendant. In addition, the following were also named as defendants in one or more of the actions: Janus Investment
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Fund (“JIF”), Janus Aspen Series (“JAS”), Janus Adviser Series (“JAD”), Janus Distributors LLC, Enhanced Investment Technologies, LLC (“INTECH”), Bay Isle Financial LLC (“Bay Isle”), Perkins, Wolf, McDonnell and Company, LLC (“Perkins”), the Advisory Committee of the Janus 401(k) plan, and the current or former directors of JCGI.
On August 25, 2005, the Court entered orders dismissing most of the claims asserted against Janus Capital and its affiliates by fund investors in the Marini and Steinberg cases (actions (i) and (ii) above) except certain claims under Section 10(b) of the Securities Exchange Act of 1934 and under Section 36(b) of the Investment Company Act of 1940, as amended (the “1940 Act”). On August 15, 2006, the Wangberger complaint in the 401(k) plan class action (action (iii) above) was dismissed by the district court with prejudice. The plaintiff appealed that dismissal decision to the United States Court of Appeals for the Fourth Circuit. The appeal is still pending and argument in the matter was held in December 2007. The Court also dismissed the Chasen lawsuit (action (iv) above) against JCGI’s Board of Directors without leave to amend. Finally, a Motion to Dismiss the Wiggins suit (action (v) above) was granted and the matter was dismissed in May 2007. However, in June 2007, Plaintiffs appealed that dismissal to the United States Court of Appeals for the Fourth Circuit. That appeal is currently pending.
In addition to the lawsuits described above, the Auditor of the State of West Virginia (“Auditor”), in his capacity as securities commissioner, has initiated administrative proceedings against many of the defendants in the market timing cases (including JCGI and Janus Capital) and, as a part of its relief, is seeking disgorgement and other monetary relief based on similar market timing allegations (In the Matter of Janus Capital Group Inc. et al., Before the Securities Commissioner, State of West Virginia, Summary Order No. 05-1320). The respondents in these proceedings collectively sought a Writ of Prohibition in state court, which was denied. Their subsequent Petition for Appeal was also denied. Consequently, in September 2006, JCGI and Janus Capital filed their answer to the Auditor’s summary order instituting proceedings and requested a hearing. A status conference was held on June 28, 2007, during which the parties were ordered to submit their proposed scheduling order. To date, no scheduling order has been entered in the case. In addition to the pending Motion to Discharge Order to Show Cause, JCGI and Janus Capital, as well as other similarly situated defendants, continue to challenge the statutory authority of the Auditor to bring such an action.
During 2007, two lawsuits were filed against Janus Management Holdings Corporation (“Janus Holdings”), an affiliate of JCGI, by former Janus portfolio managers, alleging that Janus Holdings unilaterally implemented certain changes to compensation in violation of prior agreements. These complaints allege some or all of the following claims: (1) breach of contract; (2) willful and wanton breach of contract; (3) breach of good faith and fair dealing; and (4) estoppel. Janus Holdings filed Answers to these complaints denying any liability for these claims and intends to vigorously defend against the allegations.
Additional lawsuits may be filed against certain of the Janus funds, Janus Capital, and related parties in the future. Janus Capital does not currently believe that these pending actions will materially affect its ability to continue providing services it has agreed to provide to the Janus funds.
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to their portfolio securities is available: (i) without charge, upon request, by calling 1-800-525-3713 (toll free); (ii) on the Funds’ website at www.janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding each Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through www.janus.com and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Funds file their complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Funds’ Form N-Q: (i) is available on the SEC’s website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-3713 (toll free).
Approval of Advisory Agreements During the Period
The Trustees of Janus Investment Fund, none of whom has ever been affiliated with Janus Capital (“Independent Trustees”), oversee the management of each Fund and, as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the three Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed a substantial amount of information provided by Janus Capital and the respective subadvisers in response to requests of the Independent Trustees and their independent legal counsel. They also received and reviewed a considerable amount of information and analysis provided by their independent fee consultant. Throughout their consideration of the agreements, the Independent Trustees were advised by their independent legal counsel. The Independent Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 14, 2007, based on their evaluation of the information provided by Janus Capital, the subadvisers and the independent fee consultant, as well as other information, the Trustees determined that the overall arrangements between each Fund and Janus Capital and each subadviser, as applicable, were fair and reasonable in light of the nature, extent and quality of the services provided by Janus Capital, its affiliates and the subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting the Trustees unanimously approved the continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, for the period from February 1, 2008 through February 1, 2009 (January 1, 2008 through January 1, 2009 for INTECH Risk-Managed Stock Fund and Janus Global Research Fund), subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective and strategy of each Fund, the knowledge of 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, especially those who provide investment management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions, serving as the Funds’ administrator, monitoring adherence to the Funds’ investment restrictions, producing shareholder reports, providing support services for the Trustees and Trustee committees, communicating with shareholders, and overseeing the activities of other service providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital and/or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements; that, taking into account steps taken to address those Funds whose performance lagged that of the median of their peers for certain periods, the quality of those services had been consistent with or superior to quality norms in the industry; and that 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
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appropriate education and experience, to serve the Funds effectively and had demonstrated its continuing ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the investment performance of each Fund over various time periods. They reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by Lipper Inc., an independent provider of investment company data, and with the Fund’s benchmark index. They concluded that the performance of many Funds was good to very good under current market conditions. Although the performance of some Funds lagged that of the median of their peers for certain periods, the Trustees also concluded that Janus Capital had taken appropriate steps to address those instances of under-performance and that the more recent performance of most of those Funds had been improving.
Costs of Services Provided
The Trustees examined information on the fees and expenses of each Fund in comparison to similar information for comparable funds as provided by Lipper. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and administrative) fees for most of the Funds, after contractual expense limitations, was below the mean management fee rate of the respective peer group of funds selected by Lipper.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital to its separate account clients and to its subadvised funds (for which Janus Capital provides only services related to portfolio management). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administrative services, oversight of the Funds’ other service providers, Trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, the Trustees noted that the spread between the average fee rates charged to the Funds and the fee rates that Janus Capital charged to its separate account clients was significantly smaller than the average spread for such fee rates of other advisers, based on publicly available data and research conducted by their independent fee consultant.
The Trustees reviewed information on the profitability to Janus Capital and its affiliates of their relationships with each Fund, as well as an explanation of the methodology used in allocating various expenses of Janus Capital and its affiliates among the Funds and other clients. They also reviewed the financial statements of Janus Capital’s parent company and its corporate structure. In their review, the Trustees considered whether Janus Capital and each subadviser receives adequate incentives to manage the Funds effectively. They recognized that profitability comparisons among investment advisers are difficult because very little comparative information is publicly available and profitability of any adviser is affected by numerous factors, including the organizational structure of the particular adviser, the types of funds and other accounts it manages, possible other lines of business, the methodology for allocating expenses, and the adviser’s capital structure and cost of capital. However, based on the information available and taking those factors into account, the Trustees concluded that Janus Capital’s profitability with respect to each Fund in relation to the services rendered was not unreasonable.
The Trustees concluded that the management fees and other compensation payable by each Fund to Janus Capital and its affiliates, as well as the fees payable by Janus Capital or the Funds to the subadvisers of subadvised Funds, were reasonable in relation to the nature, extent and quality of the services provided, taking into account the fees charged by other advisers for managing comparable mutual funds with similar strategies and the fees Janus Capital and the subadvisers charge to other clients. They also concluded that the overall expense ratio of each Fund was reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund and any expense limitations agreed to by Janus Capital.
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of the Funds increase. They noted that, although most Funds pay advisory fees at a fixed rate as a percentage of net assets, without any breakpoints, the management fee rate paid by each Fund, after any contractual expense limitations, was below the mean management fee rate of the Fund’s peer group selected by Lipper; and, for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of many of the Funds declined in the past few years, those Funds benefited from having advisory fee rates that remained constant rather than increasing as assets declined. In addition, performance fee structures have been
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Additional Information (unaudited) (continued)
implemented for several Funds that will cause the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through lower charges of third-party service providers, based on the combined scale of all of the Funds. Based on all of the information they reviewed, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of economies of scale at the current asset level of the Fund.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and that the transfer agent receives compensation directly from the non-money market Funds for services provided. They also considered Janus Capital’s past and proposed use of commissions paid by Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting those Funds and/or other clients of Janus Capital. The Trustees concluded that Janus Capital’s use of “soft” commission dollars of a Fund to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit the Funds. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital may potentially benefit from their relationship with each other in other ways. They also concluded that Janus Capital benefits from the receipt of proprietary and third-party research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s receipt of those products and services, as well as research products and services acquired through commissions paid by other clients of Janus Capital. They further concluded that success of any Fund could attract other business to Janus Capital or other Janus funds and that the success of Janus Capital could enhance Janus Capital’s ability to serve the Funds.
After full consideration of the above factors, as well as other factors, all of the Trustees, all of whom are Independent Trustees, concluded that the proposed continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, was in the best interest of the respective Funds and their shareholders.
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Explanations of Charts, Tables and
Financial Statements (unaudited)
Financial Statements (unaudited)
1. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in each Fund (from inception) with one or more widely used market indices. The hypothetical example does not represent the returns of any particular investment.
When comparing the performance of a Fund with an index, keep in mind that market indices do not include brokerage commissions that would be incurred if you purchased the individual securities in the index. They also do not include taxes payable on dividends and interest or operating expenses incurred if you maintained a Fund invested in the index.
Average annual total returns are also quoted for each Fund. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized and unsubsidized ratios for the past fiscal year. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting a Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and/or Janus Services and reflects a Fund’s subsidized expense ratio. Both the total annual fund operating expenses ratio and net annual fund operating expenses ratio are based on average net assets as of the fiscal year ended October 31, 2007. The ratios also include expenses indirectly incurred by the Fund as a result of investing in other investment companies or pooled investments, which are not reflected in the “Financial Highlights” of this report. As a result, these ratios may be higher or lower than those shown in the “Financial Highlights” in this report. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
2. | Schedules of Investments |
Following the performance overview section is each Fund’s Schedule of Investments. This schedule reports the industry concentrations and types of securities held in each Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
Funds that invest in foreign securities also provide a summary of investments by country. This summary reports the Fund’s exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country in which the company is incorporated.
2a. Forward Currency Contracts
A table listing forward currency contracts follows each Fund’s Schedule of Investments (if applicable). Forward currency contracts are agreements to deliver or receive a preset amount of currency at a future date. Forward currency contracts are used to hedge against foreign currency risk in the Fund’s long-term holdings.
The table provides the name of the foreign currency, the settlement date of the contract, the amount of the contract, the value of the currency in U.S. dollars and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the change in currency exchange rates from the time the contract was opened to the last day of the reporting period.
2b. Futures
A table listing futures contracts follows each Fund’s Schedule of Investments (if applicable). Futures contracts are contracts that obligate the buyer to receive and the seller to deliver an instrument or money at a specified price on a specified date. Futures are used to hedge against adverse movements in securities prices, currency risk or interest rates.
The table provides the name of the contract, number of contracts held, the expiration date, the principal amount, value and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the marked-to-market amount for the last day of the reporting period.
2c. Options
A table listing written options contracts follows each Fund’s Schedule of Investments (if applicable). Written options contracts are contracts that obligate a Fund to sell or purchase an underlying security at a fixed price, upon exercise of the option. Options are used to hedge against adverse movements in securities prices, currency risk or interest rates.
The table provides the name of the contract, number of contracts held, the expiration date, exercise price, value and premiums received.
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Explanations of Charts, Tables and
Financial Statements (unaudited) (continued)
Financial Statements (unaudited) (continued)
3. | Statement of Assets and Liabilities |
This statement is often referred to as the “balance sheet.” It lists the assets and liabilities of the Funds on the last day of the reporting period.
The Funds’ assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on stocks owned and the receivable for Fund shares sold to investors but not yet settled. The Funds’ liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Funds’ net assets. Because Funds must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Funds’ net assets (assets minus liabilities) by the number of shares outstanding.
4. | Statement of Operations |
This statement details the Funds’ income, expenses, gains and losses on securities and currency transactions, and appreciation or depreciation of current Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from stocks and interest earned from interest-bearing securities in the Funds.
The next section reports the expenses incurred by the Funds, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the increase or decrease in the value of securities held in the Funds. The Funds realize a gain (or loss) when they sell their position in a particular security. An unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Funds during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
5. | Statement of Changes in Net Assets |
This statement reports the increase or decrease in the Funds’ net assets during the reporting period. Changes in the Funds’ net assets are attributable to investment operations, dividends, distributions and capital share transactions. This is important to investors because it shows exactly what caused the Funds’ net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Funds’ investment performance. The Funds’ net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends in cash, money is taken out of the Fund to pay the distribution. If investors reinvest their dividends, the Funds’ net assets will not be affected. If you compare each Fund’s “Net Decrease from Dividends and Distributions” to the “Reinvested dividends and distributions,” you will notice that dividend distributions had little effect on each Fund’s net assets. This is because the majority of Janus investors reinvest their distributions.
The reinvestment of dividends is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Funds through purchases or withdrawals via redemptions. “Redemption Fees” (if applicable) refers to the fee paid to the Funds for shares held for 90 days or less by a shareholder. The Funds’ net assets will increase and decrease in value as investors purchase and redeem shares from the Funds.
6. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect each Fund’s net asset value (“NAV”) for current and past reporting periods. Not only does this table provide you with total return, it also reports total distributions, asset size, expense ratios and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income per share, which comprises dividends and interest income earned on securities held by the Fund. Following is the total of gains/(losses), realized and unrealized. Dividends and distributions are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the average annual total return reported the last day of the period.
Also included are the expense ratios, or the percentage of average net assets that were used to cover operating expenses during the period. Expense ratios vary across the Funds for a number of reasons, including the differences in management fees, the frequency of dividend payments and the extent of foreign investments, which entail greater transaction costs.
The Funds’ expenses may be reduced through expense-reduction arrangements. These arrangements may include the use of balance credits or transfer agent fee offsets. The Statement of Operations reflects total expenses before any such offset, the amount of the offset and the net expenses. The
118 Janus Growth Funds April 30, 2008
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expense ratios listed in the Financial Highlights reflect total expenses prior to any expense offset (gross expense ratio) and after the expense offsets (net expense ratio). Both expense ratios reflect expenses after waivers (reimbursements), if applicable.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of a Fund during the reporting period. Don’t confuse this ratio with a Fund’s yield. The net investment income ratio is not a true measure of a Fund’s yield because it doesn’t take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in a Fund. Portfolio turnover is affected by market conditions, changes in the size asset of a Fund, the nature of the Fund’s investments and the investment style of the portfolio manager. A 100% rate implies that an amount equal to the value of the entire portfolio is turned over in a year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the portfolio is traded every six months.
Janus Growth Funds April 30, 2008 119
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Notes
120 Janus Growth Funds April 30, 2008
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Notes
Janus Growth Funds April 30, 2008 121
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Janus provides access to a wide range of investment disciplines.
Asset Allocation
Janus asset allocation portfolios invest in several underlying mutual funds, rather than individual securities, in an attempt to offer investors an instantly diversified portfolio. Janus Smart Portfolios are unique in their combination of funds that leverage the fundamental research approach of Janus with funds supported by the risk-managed, mathematical investment process of INTECH (a Janus subsidiary).
Growth
Janus growth funds focus on companies believed to be the leaders in their respective industries, with solid management teams, expanding market share, margins and efficiencies.
Core
Janus core funds seek investments in more stable and predictable companies. These funds look for a strategic combination of steady growth and for certain funds, some degree of income.
Risk-Managed
Our risk-managed fund seeks to outperform its index while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH (a Janus subsidiary), this fund uses a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Janus value funds invest in companies they believe are poised for a turnaround or are trading at a significant discount to fair value. The goal is to gain unique insight into a company’s true value and identify and evaluate potential catalysts that may unlock shareholder value.
International & Global
Janus international and global funds seek to leverage Janus’ research capabilities by taking advantage of inefficiencies in foreign markets, where accurate information and analytical insight are often at a premium.
Bond & Money Market
Janus bond funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek maximum current income consistent with stability of capital.
For more information about our funds, go to www.janus.com.
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from www.janus.com. Read it carefully before you invest or send money.
Investments in money market funds are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the money market funds.
![]() | 151 Detroit Street Denver, CO 80206 1-800-525-3713 |
Funds distributed by Janus Distributors LLC (6/08)
C-0307-52 | 111-24-103 06-08 |
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2008 Semiannual Report
Janus | Core, Risk-Managed and Value Funds |
Janus Balanced Fund
Janus Contrarian Fund
Janus Fundamental Equity Fund
Janus Growth and Income Fund
Risk-Managed
INTECH Risk-Managed Stock Fund
Value
Janus Mid Cap Value Fund
Janus Small Cap Value Fund
Look Inside. . .
• Portfolio management perspective
• Investment strategy behind your fund
• Fund performance, characteristics and holdings
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646janus.gif)
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Janus Core, Risk-Managed and Value Funds
Co-Chief Investment Officers’ Letter to Shareholders | 1 | |
Useful Information About Your Fund Report | 5 | |
Management Commentaries and Schedules of Investments | ||
Janus Balanced Fund | 6 | |
Janus Contrarian Fund | 18 | |
Janus Fundamental Equity Fund | 27 | |
Janus Growth and Income Fund | 35 | |
INTECH Risk-Managed Stock Fund | 44 | |
Janus Mid Cap Value Fund | 54 | |
Janus Small Cap Value Fund | 64 | |
Statements of Assets and Liabilities | 74 | |
Statements of Operations | 76 | |
Statements of Changes in Net Assets | 78 | |
Financial Highlights | 81 | |
Notes to Schedules of Investments | 86 | |
Notes to Financial Statements | 89 | |
Additional Information | 103 | |
Explanations of Charts, Tables and Financial Statements | 106 |
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from www.janus.com. Read it carefully before you invest or send money.
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Co-Chief Investment Officers’ Letter to the Shareholders
![(JONATHAN COLEMAN PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646pcolemaj.jpg)
Jonathan Coleman
Co-Chief Investment Officer
![(GIBSON SMITH PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646psmithgi.jpg)
Gibson Smith
Co-Chief Investment Officer
Dear Shareholders,
Challenging economic conditions have been the dominant theme for the financial markets over the past several months. Despite recent volatility, our investment team has maintained a relentless focus on our fundamental, bottom-up research process and has continued to discover compelling investment opportunities for our shareholders.
Major Market Themes
Turmoil in the credit markets, uncertainty surrounding the near-term outlook for the U.S. economy and a weaker corporate profit picture made for a volatile and difficult market environment over the past several months. While sentiment toward the end of the period improved and U.S. equity markets finished well above their mid-March lows, stocks were broadly lower over the six months ended April 30, 2008. The Russell 1000® Index declined 9.54%, the Russell 2000® Index was down 12.92% and the Morgan Stanley Capital International (MSCI) All Country World IndexSM gave up 9.47% during the period. Fixed-income markets proved to be volatile over the period with the Lehman Brothers Aggregate Bond Index up 4.08% and the Lehman Brothers High-Yield Bond Index lost 0.74% over the period.
Additional write-offs related to the loose lending practices over the previous 36 months, slowing consumer spending and a softening labor market, accompanied by record commodity prices and rising inflation expectations, weighed on investor sentiment during the period. Stocks reached their lows in mid-March amid fears that credit conditions could suffer another setback given a deteriorating liquidity position at investment bank Bear Stearns. Uncertain market conditions resulted in interest rates hitting five-year lows with the 10-Year Treasury Note touching 3.33%. Prior to that, periodic liquidity injections by the Federal Reserve (Fed) failed to alleviate the stress in the funding and credit markets. Financial markets stabilized somewhat after the Fed aggressively lowered the Federal Funds rate, expanded the collateral it would accept, allowed for broker/dealers to borrow directly from the Fed and played an instrumental role in JP Morgan Chase’s purchase of near-defunct Bear Stearns. All of these moves were vitally important toward stabilizing the financial system while allowing for the recovery process to continue. By the end, the Fed had lowered its target interest rate from 4.50% to 2.00% during the period.
Following the March lows, the equity market’s rally at the end of the six-month period can be attributed to the moves by the Fed and, in part, to improving sentiment as investors began to look ahead to a possible economic recovery. Nevertheless, concerns about elevated inflationary pressures, soft consumer spending, the weak housing market and the lingering possibility of more write-downs continued to weigh on the market.
Performance Notables
For the one-year period ended April 30, 2008, 77% of Janus’ retail funds ranked within Lipper’s top two quartiles, based upon total returns. The results were even stronger over longer time periods as 87% of our retail funds achieved first- or second-quartile Lipper rankings over three years and 86% ranked in Lipper’s top two quartiles over five years. Furthermore, 78.3% of our retail funds had a 4- or 5-star overall Morningstar Ratingtm as of April 30, 2008, well ahead of the 32.5% of funds for which Morningstar awards 4- or 5-stars in each category. (See complete Lipper rankings on page 3 and complete Morningstar Ratingstm on page 4).
Investment Team Update
We continue to enhance the breadth of our global stock coverage and work tirelessly to generate solid investment insights in an attempt to deliver superior investment performance. Our hands-on research approach is critical to our stock selection process. As such, the Janus equity research team traveled over 2.9 million miles in 2007 investigating potential stock and bond picks worldwide. This year, we plan to embark on a multi-year strategy to locate certain investment personnel closer to the companies that they research as an important first step in building out our global footprint from a research standpoint.
While our objective is to develop a research edge and invest with conviction in our funds, we seek to do so in a disciplined and thoughtful way by clearly understanding and managing risk in our portfolios. Dan Scherman, Director of Risk and Trading, works continually with our investment management
Janus Core, Risk-Managed and Value Funds April 30, 2008 1
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Continued
team to ensure that portfolio risks are intentional and calculated. We believe this analysis is both timely and critical as we navigate today’s challenging markets.
Conclusion
As we look back over the past six months, we are relieved that signs of stabilization appeared in the financial markets as the period came to a close. However, we recognize that there are still significant challenges ahead. Increasing risk aversion has resulted in a significant contraction of credit availability for both consumers and corporations. The tightening of credit, along with declining real estate prices, rising energy prices and a climbing unemployment rate may all create significant economic headwinds in the near future. While unsettling, we believe this is a natural and necessary process of recovery from the excessive risk-taking and loose lending standards that developed over the previous several years in many areas of the credit markets. We feel that the environment will improve as the healing process progresses.
So, as we look ahead, we are paying very close attention to the outlook for the global economy, with a keen focus on slowing growth in the United States and the growth rates of the emerging economies around the globe. As these emerging economies become more prosperous, they may be able to move from economies based exclusively on exports fueling their growth to more balanced models emphasizing both exports and internal consumption of the goods they produce. Over a longer period of time, we believe this creates more stability in the global economy. We are also watching rising energy and commodity prices and their impact on inflationary expectations and the absolute level of interest rates. In addition to interest rates, we are focused on the outlook for the housing market and the implications of changes in home prices on the underlying health of the financial system, believing that the recapitalization of the banking and brokerage sectors is a vitally important element of the healing process.
While market volatility is undoubtedly challenging, it can also create an environment that can result in incredibly compelling investment opportunities. Our top priority is to remain committed to our process of in-depth fundamental research, which has been at the core of our investment process since Janus’ inception in 1969. With this singular focus we strive to deliver consistent long-term results for our shareholders.
Thank you for your continued investment in Janus funds.
Sincerely,
![(-s- JONATHAN COLEMAN)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646scolemaj.gif)
Jonathan Coleman
Co-Chief Investment Officer
![(-s- GIBSON SMITH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646ssmithgi.gif)
Gibson Smith
Co-Chief Investment Officer
2 Janus Core, Risk-Managed and Value Funds April 30, 2008
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Lipper Rankings (unaudited)
Lipper Rankings – Based on total returns as of 4/30/08 | ||||||||||||||||||||||||||
ONE YEAR | THREE YEAR | FIVE YEAR | TEN YEAR | SINCE INCEPTION | SINCE PM INCEPTION | |||||||||||||||||||||
PERCENTILE | RANK/ | PERCENTILE | RANK/ | PERCENTILE | RANK/ | PERCENTILE | RANK/ | PERCENTILE | RANK/ | PERCENTILE | RANK/ | |||||||||||||||
LIPPER CATEGORY | RANK (%) | TOTAL FUNDS | RANK (%) | TOTAL FUNDS | RANK (%) | TOTAL FUNDS | RANK (%) | TOTAL FUNDS | RANK (%) | TOTAL FUNDS | RANK (%) | TOTAL FUNDS | ||||||||||||||
Janus Investment Fund (Inception Date) | ||||||||||||||||||||||||||
Janus Fund (2/70) | Large-Cap Growth Funds | 58 | 429/748 | 26 | 162/634 | 39 | 203/528 | 43 | 107/250 | 11 | 2/18 | 32 | 246/776 | |||||||||||||
Janus Enterprise Fund(1)(9/92) | Mid-Cap Growth Funds | 9 | 50/604 | 6 | 27/503 | 6 | 21/414 | 34 | 60/179 | 26 | 12/46 | 3 | 13/623 | |||||||||||||
Janus Orion Fund (6/00) | Multi-Cap Growth Funds | 2 | 10/513 | 2 | 5/396 | 1 | 1/329 | N/A | N/A | 17 | 35/212 | 3 | 16/558 | |||||||||||||
Janus Research Fund(1) (5/93) | Large-Cap Growth Funds | 19 | 141/748 | 4 | 24/634 | 3 | 14/528 | 3 | 7/250 | 3 | 2/79 | 2 | 9/678 | |||||||||||||
Janus Triton Fund(1)(2/05) | Small-Cap Growth Funds | 8 | 42/598 | 5 | 24/481 | N/A | N/A | N/A | N/A | 2 | 6/471 | 3 | 15/542 | |||||||||||||
Janus Twenty Fund* (4/85) | Large-Cap Growth Funds | 1 | 1/748 | 1 | 1/634 | 1 | 1/528 | 2 | 4/250 | 3 | 1/36 | 1 | 1/807 | |||||||||||||
Janus Venture Fund* (4/85) | Small-Cap Growth Funds | 69 | 410/598 | 32 | 150/481 | 9 | 35/395 | 24 | 44/187 | 9 | 1/11 | 23 | 69/308 | |||||||||||||
Janus Global Life Sciences Fund (12/98) | Health/Biotechnology Funds | 4 | 7/195 | 17 | 25/153 | 13 | 18/141 | N/A | N/A | 13 | 6/47 | 4 | 7/195 | |||||||||||||
Janus Global Technology Fund (12/98) | Science & Technology Funds | 23 | 60/264 | 16 | 38/241 | 29 | 63/219 | N/A | N/A | 19 | 14/74 | 18 | 45/250 | |||||||||||||
Janus Balanced Fund(1) (9/92) | Mixed-Asset Target Allocation Moderate Funds | 2 | 7/451 | 1 | 3/349 | 24 | 55/232 | 6 | 7/136 | 4 | 1/29 | 1 | 3/349 | |||||||||||||
Janus Contrarian Fund (2/00) | Multi-Cap Core Funds | 12 | 98/863 | 1 | 1/680 | 1 | 1/498 | N/A | N/A | 5 | 12/294 | 5 | 12/294 | |||||||||||||
Janus Fundamental Equity Fund(1) (6/96) | Large-Cap Core Funds | 25 | 201/822 | 4 | 26/684 | 6 | 34/575 | 1 | 3/299 | 1 | 1/207 | 26 | 217/848 | |||||||||||||
Janus Growth and Income Fund(1) (5/91) | Large-Cap Core Funds | 30 | 245/822 | 21 | 140/684 | 29 | 163/575 | 8 | 22/299 | 6 | 4/74 | 21 | 173/848 | |||||||||||||
INTECH Risk-Managed Stock Fund (2/03) | Multi-Cap Core Funds | 63 | 540/863 | 64 | 433/680 | 31 | 150/498 | N/A | N/A | 35 | 172/497 | 35 | 172/497 | |||||||||||||
Janus Mid Cap Value Fund – Inv(1)(2) (8/98) | Mid-Cap Value Funds | 6 | 17/332 | 13 | 34/264 | 17 | 34/204 | N/A | N/A | 2 | 1/66 | 2 | 1/66 | |||||||||||||
Janus Small Cap Value Fund – Inv*(2) (10/87) | Small-Cap Core Funds | 11 | 84/796 | 30 | 191/638 | 44 | 214/493 | 14 | 25/190 | 12 | 15/130 | 12 | 15/130 | |||||||||||||
Janus Flexible Bond Fund(1) (7/87) | Intermediate Investment Grade Debt Funds | 11 | 57/559 | 9 | 39/473 | 15 | 59/403 | 36 | 70/194 | 14 | 3/22 | 11 | 60/563 | |||||||||||||
Janus High-Yield Fund(1) (12/95) | High Current Yield Funds | 59 | 270/458 | 49 | 185/383 | 71 | 235/333 | 22 | 35/163 | 5 | 4/97 | 46 | 161/349 | |||||||||||||
Janus Short-Term Bond Fund(1) (9/92) | Short Investment Grade Debt Funds | 28 | 72/262 | 28 | 58/211 | 22 | 35/160 | 33 | 28/84 | 32 | 8/24 | 31 | 79/262 | |||||||||||||
Janus Global Opportunities Fund(1) (6/01) | Global Funds | 73 | 320/443 | 95 | 330/349 | 65 | 173/267 | N/A | N/A | 29 | 60/207 | 29 | 60/207 | |||||||||||||
Janus Global Research Fund(1)(2/05) | Multi-Cap Growth Funds | 4 | 15/443 | 3 | 10/349 | N/A | N/A | N/A | N/A | 4 | 10/324 | 4 | 10/324 | |||||||||||||
Janus Overseas Fund*(1) (5/94) | International Funds | 1 | 7/1122 | 1 | 1/821 | 1 | 1/682 | 3 | 7/331 | 1 | 1/110 | 1 | 1/685 | |||||||||||||
Janus Worldwide Fund(1) (5/91) | Global Funds | 73 | 321/443 | 78 | 271/349 | 96 | 255/267 | 82 | 100/122 | 36 | 6/16 | 80 | 238/299 | |||||||||||||
Janus Smart Portfolio – Growth (12/05) | Mixed-Asset Target Allocation Growth Funds | 3 | 14/669 | N/A | N/A | N/A | N/A | N/A | N/A | 2 | 10/582 | 2 | 10/582 | |||||||||||||
Janus Smart Portfolio – Moderate (12/05) | Mixed-Asset Target Allocation Moderate Funds | 1 | 3/451 | N/A | N/A | N/A | N/A | N/A | N/A | 2 | 7/383 | 2 | 7/383 | |||||||||||||
Janus Smart Portfolio – Conservative (12/05) | Mixed-Asset Target Allocation Conservative Funds | 3 | 9/429 | N/A | N/A | N/A | N/A | N/A | N/A | 2 | 6/339 | 2 | 6/339 | |||||||||||||
(1) | The date of the Lipper ranking is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception. | |
(2) | Rating is for the Investor Share class only; other classes may have different performance characteristics. |
*Closed to new investors.
Past performance is no guarantee of future results. Call 1-800-525-3713 or visit janus.com for current month end performance.
If an expense waiver was in effect, it may have had a material effect on the total return or yield, and therefore the ranking for the period.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
Janus Core, Risk-Managed and Value Funds April 30, 2008 3
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Morningstar Ratingstm (unaudited)
Morningstar Ratingstm based on | ||||||||||||||||||||
total returns as of 4/30/08 | ||||||||||||||||||||
OVERALL RATING(1) | THREE-YEAR RATING | FIVE-YEAR RATING | TEN-YEAR RATING | |||||||||||||||||
CATEGORY | STARS | # OF FUNDS | STARS | # OF FUNDS | STARS | # OF FUNDS | STARS | # OF FUNDS | ||||||||||||
Janus Investment Fund | ||||||||||||||||||||
Janus Fund | Large Growth Funds | *** | 1458 | **** | 1458 | *** | 1205 | *** | 566 | |||||||||||
Janus Enterprise Fund | Mid-Cap Growth Funds | **** | 828 | ***** | 828 | ***** | 694 | *** | 311 | |||||||||||
Janus Orion Fund | Mid-Cap Growth Funds | ***** | 828 | ***** | 828 | ***** | 694 | N/A | 311 | |||||||||||
Janus Research Fund | Large Growth Funds | ***** | 1458 | ***** | 1458 | ***** | 1205 | **** | 566 | |||||||||||
Janus Triton Fund | Small Growth Funds | ***** | 688 | ***** | 688 | N/A | 560 | N/A | 270 | |||||||||||
Janus Twenty Fund(2) | Large Growth Funds | ***** | 1458 | ***** | 1458 | ***** | 1205 | ***** | 566 | |||||||||||
Janus Venture Fund(2) | Small Growth Funds | *** | 688 | *** | 688 | **** | 560 | *** | 270 | |||||||||||
Janus Global Life Sciences Fund | Specialty-Health Funds | **** | 183 | **** | 183 | **** | 166 | N/A | 54 | |||||||||||
Janus Global Technology Fund | Specialty-Technology Funds | **** | 264 | **** | 264 | **** | 235 | N/A | 69 | |||||||||||
Janus Balanced Fund | Moderate Allocation Funds | ***** | 937 | ***** | 937 | **** | 717 | ***** | 422 | |||||||||||
Janus Contrarian Fund | Large Blend Funds | ***** | 1695 | ***** | 1695 | ***** | 1316 | N/A | 630 | |||||||||||
Janus Fundamental Equity Fund | Large Blend Funds | ***** | 1695 | ***** | 1695 | **** | 1316 | ***** | 630 | |||||||||||
Janus Growth and Income Fund | Large Growth Funds | **** | 1458 | *** | 1458 | *** | 1205 | ***** | 566 | |||||||||||
INTECH Risk-Managed Stock Fund | Large Blend Funds | **** | 1695 | *** | 1695 | **** | 1316 | N/A | 630 | |||||||||||
Janus Mid Cap Value Fund — Institutional Shares(2) | Mid-Cap Value Funds | ***** | 301 | ***** | 301 | ***** | 217 | N/A | 66 | |||||||||||
Janus Mid Cap Value Fund — Investor Shares | Mid-Cap Value Funds | ***** | 301 | ***** | 301 | ***** | 217 | N/A | 66 | |||||||||||
Janus Small Cap Value Fund — Institutional Shares(2) | Small Value Funds | **** | 338 | **** | 338 | **** | 267 | **** | 102 | |||||||||||
Janus Small Cap Value Fund — Investor Shares(2) | Small Value Funds | **** | 338 | **** | 338 | *** | 267 | **** | 102 | |||||||||||
Janus Flexible Bond Fund | Intermediate-Term Bond Funds | **** | 984 | **** | 984 | **** | 832 | *** | 439 | |||||||||||
Janus High-Yield Fund | High Yield Bond Funds | *** | 470 | *** | 470 | ** | 402 | **** | 210 | |||||||||||
Janus Short-Term Bond Fund | Short-Term Bond Funds | **** | 388 | **** | 388 | **** | 290 | *** | 165 | |||||||||||
Janus Global Opportunities Fund | World Stock Funds | ** | 463 | * | 463 | ** | 390 | N/A | 201 | |||||||||||
Janus Global Research Fund | World Stock Funds | ***** | 463 | ***** | 463 | N/A | 390 | N/A | 201 | |||||||||||
Janus Overseas Fund(2) | Foreign Large Growth Funds | ***** | 184 | ***** | 184 | ***** | 158 | **** | 75 | |||||||||||
Janus Worldwide Fund | World Stock Funds | ** | 463 | ** | 463 | * | 390 | *** | 201 | |||||||||||
Janus Smart Portfolio — Growth | Moderate Allocation Funds | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||
Janus Smart Portfolio — Moderate | Moderate Allocation Funds | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||
Janus Smart Portfolio — Conservative | Conservative Allocation Funds | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||
Percent of funds rated 4 or 5 stars | 78.3% | 73.9% | 71.4% | 57.1% |
(1) | The Overall Morningstar RatingTM is derived from a weighted average of the performance figures associated with its three-, five-, and ten-year (if applicable) Morningstar RatingTM metrics. | |
(2) | Closed to new investors. |
Data presented reflects past performance, which is no guarantee of future results.
For each fund with at least a three-year history, Morningstar calculates a Morningstar RatingTM based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of the funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variation in the distribution percentages.)
© 2008 Morningstar, Inc. All Rights Reserved.
4 Janus Core, Risk-Managed and Value Funds April 30, 2008
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Useful Information About Your Fund Report
Management Commentaries
The Management Commentaries in this report include valuable insight from each of the Funds’ managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
Please keep in mind that the opinions expressed by the Funds’ managers in the Management Commentaries are just that: opinions. They are a reflection of their best judgment at the time this report was compiled, which was April 30, 2008. As the investing environment changes, so could the managers’ opinions. These views are unique to each manager and aren’t necessarily shared by their fellow employees or by Janus in general.
Fund Expenses
We believe it’s important for our shareholders to have a clear understanding of Fund expenses and the impact they have on investment return.
The following is important information regarding each Fund’s Expense Example, which appears in each Fund’s Management Commentary within this Semiannual Report. Please refer to this information when reviewing the Expense Example for each Fund.
Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including redemption fees, where applicable (and any related exchange fees) and (2) ongoing costs, including management fees, administrative services fees (where applicable) and other Fund expenses. The example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-month period from November 1, 2007 to April 30, 2008.
Actual Expenses
The first line of the table in each example provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of the table in each example provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
By written agreement, Janus Capital Management LLC (“Janus Capital”) has agreed to waive the transfer agency fees payable to certain limits for the Institutional Shares of Janus Mid Cap Value Fund and Janus Small Cap Value Fund until at least March 1, 2009. Expenses in the examples reflect application of these waivers. Had the waivers not been in effect, your expenses would have been higher. More information regarding the waivers is available in the Funds’ prospectuses.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transaction costs, such redemption fees (where applicable). These fees are fully described in the prospectus. Therefore, the second line of each table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Janus Core, Risk-Managed and Value Funds April 30, 2008 5
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Janus Balanced Fund (unaudited) | Ticker: JABAX |
Fund Snapshot
The fund combines the growth potential of stocks with the balance of bonds.
![(MARC PINTO PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646ppintoma.jpg)
Marc Pinto
co-portfolio manager
![(GIBSON SMITH PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646psmithgi.jpg)
Gibson Smith
co-portfolio manager
Performance Overview
Janus Balanced Fund returned (1.72)% for the six-month period ended April 30, 2008, compared with a (3.50)% return by the Balanced Index, an internally-calculated secondary benchmark. The Balanced Index is composed of a 55% weighting in the S&P 500® Index, the Fund’s primary benchmark, and a 45% weighting in the Lehman Brothers Government/Credit Index, the Fund’s other secondary benchmark, which returned (9.64)% and 4.14%, respectively.
Economic Overview
Turmoil in the credit markets, uncertainty surrounding the near-term outlook for the U.S. economy and a weaker corporate profit picture made for a volatile and difficult market environment over the past several months. While sentiment toward the end of the period improved and U.S. equity markets finished well off their mid-March lows, stocks were broadly lower during the six-month period ended April 30, 2008. Meanwhile, interest rates trended lower for much of the period as investors looked to less risky U.S. Treasuries during the growing uncertainty. The yield curve ended the period with a much steeper slope as the yield on the 3-month Treasury bill fell by 253 basis points (bps) to 1.38% and the 10-year Treasury yield declined 74 bps to 3.73%.
Additional write-offs related to the loose lending practices over the previous 36 months, slowing consumer spending and a softening labor market, accompanied by record commodity prices and rising inflation expectations, weighed on investor sentiment during the period. Stocks reached their lows in mid-March amid fears that credit conditions could suffer another setback given a deteriorating liquidity position at investment bank Bear Stearns. Prior to that, periodic liquidity injections by the Federal Reserve (Fed) failed to alleviate the stress in the credit markets. Financial markets stabilized somewhat after the Fed aggressively lowered the Federal Funds rate, expanded the collateral it would accept and played an instrumental role in JP Morgan Chase’s purchase of Bear Stearns. By the end, the Fed had lowered its target interest rate from 4.50% to 2.00% during the period.
Overall, mid-cap stocks held up better than large- and small-cap stocks, while growth outperformed value stocks. All sectors declined with the exception of energy, which turned in a gain for the six-month period amid record crude oil prices. Meanwhile, financials were the worst performing group, suffering from turmoil in the credit markets and larger-than-expected subprime-related write-downs. Information technology was also among the weakest performers while defensive sectors, like consumer staples, posted small declines. Within the bond market, U.S. Treasuries outperformed corporate debt as the spreads between the yield on corporate bonds and mortgage-backed securities to equivalent U.S. Treasuries widened, or rose to their highest level. High-yield bonds posted modest declines during the period, with the corporate credit sector among the weakest performing fixed-income groups. Improving credit market conditions, however, helped spreads narrow late in the period and finish off their widest levels.
Following the March lows, the equity market’s rally at the end of the period can be attributed in part to improving sentiment as investors began to look ahead to a possible economic recovery. Nevertheless, concerns about elevated inflationary pressures, soft consumer spending, the weak housing market and the lingering possibility of more write-downs continued to weigh on the market.
Materials Holdings Benefited Fund Performance
The Fund’s outperformance can be attributed primarily to strong, individual stock selection within the materials sector. The top contributor to performance was fertilizer company Potash Corporation of Saskatchewan, where price increases and a solid market position continued to drive returns. We believe the business remains intact and the secular tailwinds of rising agriculture demand, limited potash supply and pricing power are firmly in place. We also believe the company’s announced price increases provide for revenue predictability. However, following a prolonged period of strong performance we trimmed the position in favor of what we believe to be better risk/reward opportunities.
Also within the materials sector, Swiss-based Syngenta, a leader in crop protection, reported strong results for the period driven by demand in Latin America. We believe
6 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
(unaudited)
Syngenta should soon see results from its internally developed seed products, eliminating the royalty cost the company has been paying to Monsanto. During the six-month period, we trimmed the position but maintain the view that Syngenta should continue to benefit from the strong secular tailwinds in agriculture and its position in the industry.
Select Financials and Information Technology Stocks Detracted from Results
Student loan provider SLM, formerly “Sallie Mae” declined after the deal to take it private was called off. Investors were concerned that SLM’s earnings outlook would be revised downward as its credit costs increased. Given that potential earnings risk and uncertainty about future credit conditions, we exited the position.
In the information technology sector data storage company, EMC struggled as VMware (of which EMC owns 80%) offered conservative guidance. Longer term, we believe VMware’s competitive position looks to be solid. That, coupled with the fact EMC’s core data storage business has been performing well led us to maintain our position.
Fixed-Income Investments Provided Positive Results
The strongest contribution to returns in the fixed-income portion of the Fund came from our overweight position in U.S. Treasuries. Our higher quality bias protected us as credit and concerns in the mortgage market continued to drive risk premiums wider and Treasury yields lower during the period. We held a nearly zero weighting in mortgage-backed pass-through securities at the end of the period, as we believed concerns about future volatility in the sector supported a cautious stance, which was also evident in our overweight position in highest-quality government securities. Within our credit allocation, both the overall underweight and security selection boosted returns. In terms of detractors, our underweight exposure to agency/government sponsored bonds weighed on relative returns. We are focused on best of breed investment grade companies and seek to select out-of-benchmark exposure to high-yield names with strong free cash flow and asset-heavy balance sheets identified through intensive fundamental credit research.
Outlook
Looking ahead, we will be paying close attention to the employment picture, the availability of credit and consumer confidence, among other things. Should the labor market continue to soften amid continued weakness in the housing market, further slowing in consumer spending is likely. While the government stimulus checks could provide a temporary boost, the current de-leveraging of the U.S. economy could take time to complete, possibly lessening the potential for a sharp rebound in economic activity. Inflation remains a concern for the markets as well, given record commodity prices and its recent elevated level. Although inflation is generally a lagging indicator and should ease with slowing economic growth, it deserves attention given its negative impact and the notion that inflation may limit the Fed’s options to further stimulate economic growth.
The housing market could be the core problem for the U.S. economy, given its ties to interest rates and credit markets. If the end-of-period uptrend in long-term interest rates continues and the spreads between mortgage-backed securities fail to narrow, or even widen, further weakness in housing could result, slowing the healing process within the financial system. Although export growth has been strong, helping to offset domestic weakness, and corporate balance sheets are generally healthy, markets are likely to tread cautiously. We remain committed to our fundamental investment approach in our effort to find opportunities that we believe represent an attractive risk/reward profile. As always, we will continue to emphasize bottom-up company analysis as our primary tool in our quest to add value for shareholders.
Thank you for investing in Janus Balanced Fund.
Janus Core, Risk-Managed and Value Funds April 30, 2008 7
Table of Contents
Janus Balanced Fund (unaudited)
Janus Balanced Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 1.74% | |||
Syngenta A.G. (ADR) | 0.57% | |||
EnCana Corp. (U.S. Shares) | 0.53% | |||
Syngenta A.G. | 0.48% | |||
Samsung Electronics Company, Ltd. | 0.21% |
5 Bottom Performers – Holdings
Contribution | ||||
SLM Corp. | (1.40)% | |||
EMC Corp. | (1.18)% | |||
Fannie Mae | (1.15)% | |||
General Electric Co. | (0.79)% | |||
American Express Co. | (0.71)% |
5 Top Performers – Sectors
Fund Weighting | ||||||||||||
Fund Contribution | (% of Net Assets) | S&P 500® Index Weighting | ||||||||||
Materials | 2.78% | 9.61% | 3.45% | |||||||||
Energy | 0.82% | 10.58% | 12.83% | |||||||||
Telecommunication Services | 0.00% | 0.00% | 3.46% | |||||||||
Utilities | 0.00% | 0.00% | 3.63% | |||||||||
Consumer Staples | (0.19)% | 22.02% | 10.51% |
5 Bottom Performers – Sectors
Fund Weighting | ||||||||||||
Fund Contribution | (% of Net Assets) | S&P 500® Index Weighting | ||||||||||
Financials | (3.23)% | 7.51% | 17.59% | |||||||||
Industrials | (1.92)% | 12.66% | 11.71% | |||||||||
Consumer Discretionary | (1.81)% | 11.47% | 8.67% | |||||||||
Information Technology | (1.42)% | 13.95% | 16.07% | |||||||||
Health Care | (1.05)% | 12.20% | 12.09% |
8 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2008
ConocoPhillips Oil Companies – Integrated | 2.7% | |||
Roche Holding A.G. Medical – Drugs | 2.4% | |||
EnCana Corp. (U.S. Shares) Oil Companies – Exploration and Production | 2.1% | |||
Potash Corporation of Saskatchewan, Inc. (U.S. Shares) Agricultural Chemicals | 2.0% | |||
Nestle S.A. Food – Diversified | 1.9% | |||
11.1% |
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19p06.gif)
Emerging markets comprised 1.5% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19t06.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19c06.gif)
Janus Core, Risk-Managed and Value Funds April 30, 2008 9
Table of Contents
Janus Balanced Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19m06.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratio – for the fiscal year ended October 31, 2007 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Balanced Fund | (1.72)% | 5.15% | 9.57% | 7.39% | 10.96% | 0.79% | |||||||
S&P 500® Index | (9.64)% | (4.68)% | 10.62% | 3.89% | 10.06% | ||||||||
Lehman Brothers Government/Credit Index | 4.14% | 7.09% | 4.27% | 6.00% | 6.47% | ||||||||
Balanced Index | (3.50)% | 0.69% | 7.86% | 5.18% | 8.70% | ||||||||
Lipper Quartile | – | 1st | 1st | 1st | 1st | ||||||||
Lipper Ranking – based on total return for Mixed-Asset Target Allocation Moderate Funds | – | 7/451 | 55/232 | 7/136 | 1/29 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.) All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
10 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
(unaudited)
The Fund’s performance may be affected by risks that include those associated with non-investment grade debt securities, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and other details.
Funds that invest in bonds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds owned by the Fund. Unlike owning individual bonds, there are ongoing fees and expenses associated with owning shares of bond funds. The return of principal is not guaranteed due to net asset value fluctuation that is caused by changes in the price of specific bonds held in the Fund and selling of bonds within the Fund by the portfolio manager.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
September 3, 1992 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – September 1, 1992 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 982.80 | $ | 3.85 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.98 | $ | 3.92 | ||||||||
†Expenses are equal to the annualized expense ratio of 0.78%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period).
Janus Core, Risk-Managed and Value Funds April 30, 2008 11
Table of Contents
Janus Balanced Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Common Stock – 52.0% | ||||||||
Advertising Sales – 0.4% | ||||||||
284,375 | Lamar Advertising Co. – Class A*,# | $ | 11,244,188 | |||||
Aerospace and Defense – 1.2% | ||||||||
1,206,930 | BAE Systems PLC** | 11,126,785 | ||||||
147,295 | Boeing Co. | 12,499,454 | ||||||
248,580 | Embraer-Empresa Brasileira de Aeronautica S.A. (ADR) | 10,360,814 | ||||||
33,987,053 | ||||||||
Agricultural Chemicals – 4.4% | ||||||||
305,885 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 56,267,546 | ||||||
102,139 | Syngenta A.G.** | 30,257,058 | ||||||
651,605 | Syngenta A.G. (ADR)#,** | 38,561,984 | ||||||
125,086,588 | ||||||||
Apparel Manufacturers – 0.7% | ||||||||
1,525,825 | Esprit Holdings, Ltd. | 18,803,972 | ||||||
Applications Software – 0.6% | ||||||||
639,505 | Microsoft Corp. | 18,238,683 | ||||||
Athletic Footwear – 0.6% | ||||||||
244,780 | NIKE, Inc. – Class B | 16,351,304 | ||||||
Audio and Video Products – 0.4% | ||||||||
232,985 | Sony Corp. (ADR)** | 10,668,383 | ||||||
Automotive – Cars and Light Trucks – 0.5% | ||||||||
254,474 | BMW A.G.**,# | 13,928,397 | ||||||
Beverages – Non-Alcoholic – 1.1% | ||||||||
343,695 | Coca-Cola Co. | 20,233,325 | ||||||
181,595 | PepsiCo, Inc. | 12,444,705 | ||||||
32,678,030 | ||||||||
Brewery – 1.1% | ||||||||
385,390 | InBev N.V.**,# | 31,744,744 | ||||||
Building Products – Air and Heating – 0.5% | ||||||||
262,585 | Daikin Industries, Ltd.** | 13,184,675 | ||||||
Casino Hotels – 0.7% | ||||||||
1,155,861 | Crown, Ltd. | 11,926,275 | ||||||
159,474 | MGM Mirage*,# | 8,157,095 | ||||||
20,083,370 | ||||||||
Commercial Services – Finance – 0.2% | ||||||||
249,370 | Western Union Co. | 5,735,510 | ||||||
Computers – 1.4% | ||||||||
71,405 | Apple, Inc.* | 12,420,900 | ||||||
463,525 | Hewlett-Packard Co. | 21,484,383 | ||||||
50,950 | Research In Motion, Ltd. (U.S. Shares)* | 6,197,049 | ||||||
40,102,332 | ||||||||
Computers – Memory Devices – 1.0% | ||||||||
1,907,020 | EMC Corp.* | 29,368,108 | ||||||
Cosmetics and Toiletries – 1.7% | ||||||||
693,600 | Avon Products, Inc. | 27,064,272 | ||||||
330,595 | Procter & Gamble Co. | 22,166,395 | ||||||
49,230,667 | ||||||||
Diversified Operations – 2.0% | ||||||||
1,578,000 | China Merchants Holdings International Company, Ltd. | 8,053,820 | ||||||
146,794 | Danaher Corp. | 11,452,868 | ||||||
761,445 | General Electric Co. | 24,899,251 | ||||||
4,063,815 | Melco International Development, Ltd. | 5,574,867 | ||||||
50,535 | Siemens A.G.** | 5,988,151 | ||||||
55,968,957 | ||||||||
E-Commerce/Services – 0.6% | ||||||||
249,405 | eBay, Inc.* | 7,803,882 | ||||||
677,280 | Liberty Media Corp. – Interactive Class A* | 10,247,247 | ||||||
18,051,129 | ||||||||
Electric Products – Miscellaneous – 0.2% | ||||||||
127,150 | Emerson Electric Co. | 6,644,859 | ||||||
Electronic Components – Semiconductors – 1.9% | ||||||||
32,523 | Samsung Electronics Company, Ltd. | 23,160,001 | ||||||
1,009,980 | Texas Instruments, Inc. | 29,451,017 | ||||||
52,611,018 | ||||||||
Energy – Alternate Sources – 0.2% | ||||||||
103,370 | Suntech Power Holdings Company, Ltd. (ADR)* | 4,623,740 | ||||||
Enterprise Software/Services – 1.2% | ||||||||
1,568,080 | Oracle Corp.* | 32,694,468 | ||||||
Finance – Credit Card – 1.5% | ||||||||
907,850 | American Express Co. | 43,594,957 | ||||||
Finance – Investment Bankers/Brokers – 1.1% | ||||||||
644,100 | JP Morgan Chase & Co. | 30,691,365 | ||||||
Finance – Mortgage Loan Banker – 0.7% | ||||||||
664,310 | Fannie Mae | 18,799,973 | ||||||
Food – Diversified – 2.1% | ||||||||
246,416 | Kraft Foods, Inc. – Class A | 7,794,138 | ||||||
110,945 | Nestle S.A.** | 53,162,909 | ||||||
60,957,047 | ||||||||
Hotels and Motels – 1.0% | ||||||||
531,075 | Starwood Hotels & Resorts Worldwide, Inc. | 27,727,426 | ||||||
Machinery – General Industrial – 0.3% | ||||||||
14,483,170 | Shanghai Electric Group Company, Ltd.# | 8,168,226 | ||||||
Medical – Biomedical and Genetic – 0.4% | ||||||||
179,100 | Celgene Corp.* | 11,129,274 | ||||||
Medical – Drugs – 3.4% | ||||||||
538,645 | Merck & Company, Inc. | 20,490,056 | ||||||
400,330 | Roche Holding A.G.** | 66,678,798 | ||||||
24,710 | Roche Holding A.G. (ADR)** | 2,046,235 | ||||||
173,845 | Wyeth | 7,730,887 | ||||||
96,945,976 | ||||||||
Medical – HMO – 0.4% | ||||||||
249,370 | Coventry Health Care, Inc.* | 11,154,320 | ||||||
Medical Instruments – 0.2% | ||||||||
123,180 | Medtronic, Inc. | 5,996,402 | ||||||
Medical Products – 0.2% | ||||||||
156,375 | Nobel Biocare Holding A.G.** | 5,652,598 | ||||||
Multimedia – 0.4% | ||||||||
587,550 | News Corporation, Inc. – Class A | 10,517,145 | ||||||
Networking Products – 0.2% | ||||||||
255,580 | Cisco Systems, Inc.* | 6,553,071 | ||||||
See Notes to Schedules of Investments and Financial Statements.
12 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Oil Companies – Exploration and Production – 2.1% | ||||||||
720,950 | EnCana Corp. (U.S. Shares) | $ | 58,259,970 | |||||
Oil Companies – Integrated – 4.8% | ||||||||
879,070 | ConocoPhillips | 75,731,880 | ||||||
332,125 | Hess Corp. | 35,271,675 | ||||||
228,287 | Suncor Energy, Inc. | 25,769,584 | ||||||
136,773,139 | ||||||||
Optical Supplies – 0.3% | ||||||||
50,695 | Alcon, Inc. (U.S. Shares)** | 8,009,810 | ||||||
Retail – Apparel and Shoe – 0.3% | ||||||||
249,370 | Nordstrom, Inc. | 8,792,786 | ||||||
Retail – Consumer Electronics – 0.5% | ||||||||
158,320 | Yamada Denki Company, Ltd.** | 13,661,411 | ||||||
Retail – Drug Store – 1.7% | ||||||||
1,160,717 | CVS/Caremark Corp. | 46,858,145 | ||||||
Retail – Jewelry – 0.3% | ||||||||
196,655 | Tiffany & Co. | 8,562,359 | ||||||
Soap and Cleaning Preparations – 1.8% | ||||||||
871,475 | Reckitt Benckiser PLC** | 50,771,883 | ||||||
Telecommunication Equipment – Fiber Optics – 0.8% | ||||||||
876,165 | Corning, Inc. | 23,402,367 | ||||||
Therapeutics – 1.0% | ||||||||
556,815 | Gilead Sciences, Inc.* | 28,820,744 | ||||||
Tobacco – 2.0% | ||||||||
930,965 | Altria Group, Inc. | 18,619,300 | ||||||
748,805 | Philip Morris International Inc.* | 38,211,519 | ||||||
56,830,819 | ||||||||
Transportation – Railroad – 1.4% | ||||||||
490,069 | Canadian National Railway Co. (U.S. Shares) | 25,674,715 | ||||||
94,240 | Union Pacific Corp. | 13,682,706 | ||||||
39,357,421 | ||||||||
Wireless Equipment – 0.5% | ||||||||
314,415 | QUALCOMM, Inc. | 13,579,585 | ||||||
Total Common Stock (cost $1,125,884,145) | 1,472,598,394 | |||||||
Corporate Bonds – 11.9% | ||||||||
Agricultural Chemicals – 0% | ||||||||
$ | 990,000 | Mosaic Co., 6.25% senior unsecured notes due 12/1/16 (144A)‡ | 1,084,050 | |||||
Applications Software – 0.1% | ||||||||
2,876,000 | Intuit, Inc., 5.75% senior unsecured notes, due 3/15/17 | 2,786,620 | ||||||
Automotive – Cars and Light Trucks – 0.2% | ||||||||
5,180,000 | Ford Motor Co., 7.45% senior unsecured notes, due 7/16/31 | 3,872,050 | ||||||
2,770,000 | General Motors Nova Financial Corp. 6.85%, company guaranteed notes due 10/15/08 | 2,756,150 | ||||||
6,628,200 | ||||||||
Beverages – Non-Alcoholic – 0.3% | ||||||||
Dr Pepper Snapple Group: | ||||||||
$ | 3,591,000 | 6.12%, senior notes due 5/1/13 (144A) | 3,673,562 | |||||
2,359,000 | 6.82%, senior notes due 5/1/18 (144A) | 2,447,113 | ||||||
2,872,000 | 7.45%, notes due 5/1/38 (144A) | 3,074,757 | ||||||
9,195,432 | ||||||||
Brewery – 0% | ||||||||
857,000 | Anheuser Bush COS, Inc., 5.50% senior unsecured notes, due 1/15/18 | 872,333 | ||||||
Cable Television – 0.4% | ||||||||
Comcast Corp.: | ||||||||
5,364,000 | 6.30%, company guaranteed notes due 11/15/17 | 5,573,609 | ||||||
5,364,000 | 6.95%, company guaranteed notes due 8/15/37 | 5,669,512 | ||||||
11,243,121 | ||||||||
Cellular Telecommunications – 0.1% | ||||||||
1,942,000 | Rogers Wireless Communications, Inc. 6.375%, secured notes, due 3/1/14 | 1,988,608 | ||||||
Chemicals – Diversified – 0.2% | ||||||||
5,281,000 | E.I. Du Pont De Nemours, 5.00% senior unsecured notes, 11/5/13 | 5,388,769 | ||||||
Commercial Banks – 0.3% | ||||||||
2,788,000 | Barclays, PLC, 7.70% notes, due 4/25/18 (144A)**,‡ | 2,884,855 | ||||||
5,740,000 | U.S. Bank, 5.70% subordinated notes, due 12/15/08 | 5,825,572 | ||||||
8,710,427 | ||||||||
Consumer Products – Miscellaneous – 0.2% | ||||||||
Clorox Co.: | ||||||||
1,391,000 | 5.00%, senior unsecured notes due 3/1/13 | 1,373,930 | ||||||
2,988,000 | 5.95%, senior unsecured notes due 10/15/17 | 2,996,429 | ||||||
4,370,359 | ||||||||
Containers – Metal and Glass – 0.3% | ||||||||
8,265,000 | Owens-Illinois, Inc., 7.35% senior notes, due 5/15/08 | 8,265,000 | ||||||
Data Processing and Management – 0.2% | ||||||||
Fiserv, Inc.: | ||||||||
2,517,000 | 6.125%, company guaranteed notes due 11/20/15 | 2,557,186 | ||||||
2,517,000 | 6.80%, company guaranteed notes due 11/20/17 | 2,566,384 | ||||||
5,123,570 | ||||||||
Diversified Financial Services – 0.1% | ||||||||
3,995,000 | General Electric Capital Corp., 6.75% senior unsecured notes, due 3/15/32 | 4,230,321 | ||||||
Diversified Operations – 0.6% | ||||||||
Dover Corp.: | ||||||||
3,383,000 | 5.45%, senior unsecured notes due 3/15/18 | 3,380,189 | ||||||
1,691,000 | 6.60%, senior unsecured notes due 3/15/38 | 1,772,806 |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2008 13
Table of Contents
Janus Balanced Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Diversified Operations – (continued) | ||||||||
$ | 11,527,000 | General Electric Co., 5.25% senior unsecured notes, due 12/6/17 | $ | 11,471,520 | ||||
16,624,515 | ||||||||
Electric – Generation – 0.2% | ||||||||
2,845,000 | Allegheny Energy Supply Company LLC 8.25%, senior unsecured notes due 4/15/12 (144A)‡ | 3,029,925 | ||||||
1,232,000 | Edison Mission Energy, 7.00% senior unsecured notes, due 5/15/17 | 1,244,320 | ||||||
4,274,245 | ||||||||
Electric – Integrated – 1.6% | ||||||||
5,689,000 | CMS Energy Corp., 6.30% senior unsecured notes, due 2/1/12 | 5,756,119 | ||||||
1,688,000 | Consumers Energy Company, 5.65% first mortgage notes, due 9/15/18 | 1,686,427 | ||||||
Duke Energy Carolinas: | ||||||||
1,337,000 | 5.10%, company first mortgage notes due 4/15/18 | 1,328,624 | ||||||
1,874,000 | 6.05%, company first mortgage notes due 4/15/38 | 1,891,835 | ||||||
1,768,000 | Energy Future Holdings, 10.875% company guaranteed notes due 11/1/17 (144A) | 1,882,920 | ||||||
9,390,000 | MidAmerican Energy Holdings Co. 3.50%, senior notes due 5/15/08 | 9,388,328 | ||||||
Pacific Gas and Electric Co.: | ||||||||
770,000 | 3.60%, senior unsecured notes due 3/1/09 | 768,278 | ||||||
2,767,000 | 4.20%, senior unsecured notes due 3/1/11 | 2,749,418 | ||||||
941,000 | Pacificorp, 6.25% first mortgage notes, due 10/15/37 | 962,626 | ||||||
Texas Competitive Electric Holdings Co. LLC: | ||||||||
1,901,000 | 10.25%, company guaranteed notes due 11/1/15 (144A) | 1,981,793 | ||||||
5,874,000 | 10.25%, company guaranteed notes due 11/1/15 (144A) | 6,123,645 | ||||||
5,772,000 | Virginia Electric & Power Co., 5.10% senior unsecured notes, due 11/30/12 | 5,868,121 | ||||||
5,883,000 | West Penn Power Co., 5.95% first mortgage notes due 12/15/17 (144A) | 6,007,284 | ||||||
46,395,418 | ||||||||
Fiduciary Banks – 0.1% | ||||||||
2,615,000 | Bank of New York Mellon, 4.50% senior unsecured notes, due 4/1/13 | 2,606,412 | ||||||
Finance – Auto Loans – 0.1% | ||||||||
2,587,000 | Ford Motor Credit Company, LLC, 7.25% senior unsecured notes, due 10/25/11 | 2,329,767 | ||||||
Finance – Investment Bankers/Brokers – 1.4% | ||||||||
Citigroup, Inc.: | ||||||||
$ | 2,562,000 | 6.125%, senior unsecured notes due 11/21/17 | 2,600,522 | |||||
1,345,000 | 6.125%, subordinated notes due 8/25/36 | 1,234,582 | ||||||
Goldman Sachs Group, Inc.: | ||||||||
2,707,000 | 5.95%, senior unsecured notes due 1/18/18 | 2,701,835 | ||||||
6,885,000 | 6.15%, senior notes due 4/1/18 | 6,964,536 | ||||||
5,245,000 | JP Morgan Chase & Co, 6.00% senior notes, due 1/15/18# | 5,436,458 | ||||||
Lehman Brothers Holdings: | ||||||||
2,557,000 | 6.00%, company senior notes due 7/19/12 | 2,581,882 | ||||||
5,884,000 | 6.875%, company notes due 5/2/18 | 6,017,814 | ||||||
Morgan Stanley: | ||||||||
6,603,000 | 5.95%, senior unsecured notes due 12/28/17 | 6,540,628 | ||||||
5,670,000 | 6.625%, senior unsecured notes due 4/1/18 | 5,878,764 | ||||||
39,957,021 | ||||||||
Food – Diversified – 0.4% | ||||||||
1,774,000 | General Mills, Inc., 5.20% senior unsecured notes, 3/17/15 | 1,783,244 | ||||||
Kellogg Co.: | ||||||||
7,315,000 | 2.875%, senior unsecured notes due 6/1/08 | 7,310,779 | ||||||
1,288,000 | 4.25%, senior unsecured notes due 3/6/13 | 1,266,393 | ||||||
10,360,416 | ||||||||
Food – Retail – 0.2% | ||||||||
Kroger Co.: | ||||||||
3,481,000 | 6.40%, company guaranteed notes due 8/15/17 | 3,703,321 | ||||||
1,406,000 | 6.15%, company guaranteed notes due 1/15/20 | 1,464,208 | ||||||
1,054,000 | Stater Brothers Holdings, Inc., 7.75% company guaranteed notes due 4/15/15 | 1,056,635 | ||||||
6,224,164 | ||||||||
Food – Wholesale/Distribution – 0.3% | ||||||||
7,222,000 | Supervalu, Inc., 7.50% senior unsecured notes, due 11/15/14 | 7,474,770 | ||||||
Independent Power Producer – 0.3% | ||||||||
1,338,000 | NRG Energy, Inc., 7.375% company guaranteed notes due 1/15/17 | 1,378,140 | ||||||
Reliant Energy, Inc.: | ||||||||
6,444,000 | 7.625%, senior unsecured notes due 6/15/14# | 6,701,760 | ||||||
1,618,000 | 7.875%, senior unsecured notes due 6/15/17# | 1,686,765 | ||||||
9,766,665 | ||||||||
See Notes to Schedules of Investments and Financial Statements.
14 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Machinery – Construction and Mining – 0.1% | ||||||||
$ | 1,455,000 | Atlas Copco A.B., 5.60% senior unsecured notes due 5/22/17 (144A)§ | $ | 1,458,943 | ||||
Medical – Hospitals – 0.2% | ||||||||
HCA, Inc.: | ||||||||
2,847,000 | 6.50%, senior unsecured notes due 2/15/16 | 2,548,065 | ||||||
4,125,000 | 9.25%, senior secured notes due 11/15/16 | 4,434,375 | ||||||
6,982,440 | ||||||||
Multimedia – 0.3% | ||||||||
1,488,000 | Viacom, Inc., 6.125% senior unsecured notes, due 10/5/17 | 1,492,547 | ||||||
6,286,000 | Walt Disney Co., 4.70% senior unsecured notes, due 12/1/12 | 6,397,011 | ||||||
7,889,558 | ||||||||
Office Automation and Equipment – 0.2% | ||||||||
Xerox Corp.: | ||||||||
1,877,000 | 5.65%, senior notes due 5/15/13 | 1,881,839 | ||||||
2,680,000 | 6.35%, senior notes due 5/15/18 | 2,693,537 | ||||||
4,575,376 | ||||||||
Oil Companies – Exploration and Production – 0.6% | ||||||||
5,630,000 | Encana Corp., 6.50% unsubordinated notes, due 2/1/38 | 5,771,329 | ||||||
Forest Oil Corp.: | ||||||||
463,000 | 8.00%, company guaranteed notes due 12/15/11 | 489,044 | ||||||
1,752,000 | 7.25%, senior unsecured notes due 6/15/19 (144A) | 1,808,940 | ||||||
3,613,000 | 7.25%, senior unsecured notes due 6/15/19 | 3,730,423 | ||||||
XTO Energy Inc.: | ||||||||
2,790,000 | 5.50%, senior unsecured notes due 6/15/18 | 2,768,818 | ||||||
2,828,000 | 6.375%, senior unsecured notes due 6/15/38 | 2,852,827 | ||||||
17,421,381 | ||||||||
Pipelines – 0.9% | ||||||||
5,684,000 | El Paso Corp., 7.00% senior unsecured notes, due 6/15/17 | 5,931,714 | ||||||
Kinder Morgan Energy Partners L.P.: | ||||||||
1,208,000 | 6.50%, senior unsecured notes due 2/1/17 | 1,207,866 | ||||||
935,000 | 5.95%, senior unsecured notes due 2/15/18 | 927,385 | ||||||
732,000 | 6.50%, senior unsecured notes due 2/1/37 | 699,015 | ||||||
936,000 | 6.95%, senior unsecured notes due 1/15/38 | 948,879 | ||||||
8,746,000 | Kinder Morgan Finance Co., 5.70% company guaranteed notes, due 1/5/16 | 8,374,296 | ||||||
1,320,000 | Plains All American Pipeline, 6.50% senior unsecured notes due 5/1/2018 (144A) | 1,348,108 | ||||||
$ | 984,000 | Southern Natural Gas Co., 5.90% senior unsecured notes due 4/1/17 (144A) | 979,834 | |||||
Teppco Partners, L.P.: | ||||||||
2,632,000 | 6.65%, notes due 4/15/18 | 2,648,718 | ||||||
2,632,000 | 7.55%, bonds due 4/15/38 | 2,815,448 | ||||||
25,881,263 | ||||||||
Retail – Discount – 0.1% | ||||||||
Wal-Mart Stores, Inc.: | ||||||||
1,873,000 | 4.25%, company senior notes due 4/15/13 | 1,880,595 | ||||||
1,873,000 | 6.20%, company senior notes due 4/15/38 | 1,906,336 | ||||||
3,786,931 | ||||||||
Retail – Regional Department Stores – 0.2% | ||||||||
4,630,000 | May Department Stores Co., 4.80% company guaranteed notes due 7/15/09 | 4,552,938 | ||||||
Special Purpose Entity – 0.3% | ||||||||
Pearson Dollar Finance PLC: | ||||||||
2,909,000 | 5.50%, company guaranteed notes due 5/6/13 (144A) | 2,931,719 | ||||||
2,909,000 | 6.25%, company guaranteed notes due 5/6/18 (144A) | 2,954,148 | ||||||
Petroplus Finance, Ltd.: | ||||||||
2,180,000 | 6.75%, company guarantee notes due 5/1/14 (144A) | 2,049,200 | ||||||
562,000 | 7.00%, company guaranteed notes due 5/1/17 (144A) | 522,660 | ||||||
8,457,727 | ||||||||
Steel – Producers – 0.2% | ||||||||
5,648,000 | Steel Dynamics, Inc., 7.75% senior notes, due 4/15/16 (144A) | 5,775,080 | ||||||
Super-Regional Banks – 0.6% | ||||||||
Bank of America Corp.: | ||||||||
5,635,000 | 4.90%, notes due 5/1/13 | 5,647,284 | ||||||
5,635,000 | 5.65%, notes due 5/1/18 | 5,639,170 | ||||||
1,408,000 | Bank of America N.A., 6.00% company subordinated notes due 10/15/36 | 1,390,907 | ||||||
5,273,000 | Wells Fargo Co., 5.625% senior unsecured notes, due 12/11/17 | 5,435,124 | ||||||
18,112,485 | ||||||||
Telephone – Integrated – 0.2% | ||||||||
1,763,000 | AT&T, Inc., 5.50% senior unsecured notes, due 2/1/18# | 1,762,704 | ||||||
5,109,000 | Qwest Communications International 7.25%, company guaranteed notes due 2/15/11‡ | 5,070,682 | ||||||
6,833,386 | ||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2008 15
Table of Contents
Janus Balanced Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Transportation – Railroad – 0.4% | ||||||||
$ | 3,047,000 | Burlington North Santa Fe, 5.75% senior unsecured notes, due 3/15/18 | $ | 3,090,243 | ||||
1,910,000 | Canadian National Railway Co., 4.25% senior unsecured notes, due 8/1/09 | 1,915,295 | ||||||
5,573,000 | Union Pacific Corp., 5.70% senior unsecured notes, due 8/15/18 | 5,637,329 | ||||||
10,642,867 | ||||||||
Total Corporate Bonds (cost $335,254,521) | 338,270,578 | |||||||
Mortgage Backed Securities – 1.9% | ||||||||
Fannie Mae: | ||||||||
5,624,000 | 5.00%, due 5/15/35Ç | 5,523,825 | ||||||
16,892,000 | 5.50%, due 5/15/35Ç | 16,981,731 | ||||||
5,624,000 | 5.50%, due 6/1/37 | 5,660,743 | ||||||
5,624,000 | 6.00%, due 8/25/37Ç | 5,748,785 | ||||||
1,285,487 | 4.50%, due 5/1/38Ç | 1,223,220 | ||||||
4,338,513 | 4.50%, due 5/1/38Ç | 4,128,365 | ||||||
Freddie Mac: | ||||||||
5,629,000 | 4.50%, due 5/15/20Ç | 5,549,845 | ||||||
5,634,000 | 5.00%, due 5/15/35Ç | 5,535,405 | ||||||
2,702,000 | 5.50%, due 2/1/38 | 2,721,915 | ||||||
Total Mortgage Backed Securities (cost $52,925,665) | 53,073,834 | |||||||
U.S. Government Agencies – 0.7% | ||||||||
U.S. Government Agencies – 0.4% | ||||||||
Fannie Mae: | ||||||||
2,580,000 | 2.50%, notes, due 6/15/08 | 2,580,338 | ||||||
4,310,000 | 5.25%, notes, due 1/15/09 | 4,388,834 | ||||||
880,000 | 6.375%, notes, due 6/15/09 | 916,324 | ||||||
Freddie Mac: | ||||||||
2,155,000 | 5.75%, notes, due 3/15/09 | 2,211,967 | ||||||
2,149,000 | 7.00%, notes, due 3/15/10 | 2,311,778 | ||||||
12,409,241 | ||||||||
U.S. Government Agency Variable Notes – 0.3% | ||||||||
6,963,000 | Fannie Mae, 4.875% notes, due 5/18/12 | 7,337,561 | ||||||
Total U.S. Government Agencies (cost $19,322,316) | 19,746,802 | |||||||
U.S. Treasury Notes/Bonds – 27.3% | ||||||||
U.S. Treasury Notes/Bonds: | ||||||||
4,456,000 | 3.75%, due 5/15/08# | 4,459,480 | ||||||
19,573,000 | 4.375%, due 11/15/08 | 19,852,835 | ||||||
6,770,000 | 4.75%, due 12/31/08 | 6,905,400 | ||||||
52,920,000 | 4.875%, due 1/31/09# | 54,143,775 | ||||||
27,063,000 | 4.50%, due 2/15/09# | 27,625,396 | ||||||
21,131,000 | 3.125%, due 4/15/09# | 21,378,634 | ||||||
2,435,000 | 4.875%, due 5/15/09# | 2,507,480 | ||||||
17,855,000 | 4.875%, due 5/31/09** | 18,401,809 | ||||||
22,742,000 | 6.00%, due 8/15/09# | 23,866,660 | ||||||
13,734,000 | 4.625%, due 11/15/09 | 14,240,441 | ||||||
23,028,000 | 2.125%, due 1/31/10**,# | 22,983,026 | ||||||
28,022,000 | 4.00%, due 4/15/10# | 28,969,928 | ||||||
7,247,000 | 4.50%, due 5/15/10**,# | 7,577,644 | ||||||
10,866,000 | 3.625%, due 6/15/10**,# | 11,175,855 | ||||||
5,219,000 | 5.75%, due 8/15/10# | 5,620,211 | ||||||
27,421,000 | 4.50%, due 11/15/10# | 28,914,156 | ||||||
46,054,000 | 4.50%, due 2/28/11# | 48,655,314 | ||||||
16,967,000 | 4.875%, due 4/30/11# | 18,142,762 | ||||||
10,165,000 | 4.875%, due 7/31/11# | 10,886,085 | ||||||
18,483,000 | 5.00%, due 8/15/11# | 19,912,549 | ||||||
3,483,000 | 4.75%, due 5/31/12# | 3,732,250 | ||||||
$ | 58,432,000 | 4.875%, due 6/30/12# | 62,910,286 | |||||
20,410,000 | 4.125%, due 8/31/12# | 21,360,331 | ||||||
3,306,000 | 3.875%, due 10/31/12# | 3,428,944 | ||||||
13,879,000 | 3.375%, due 11/30/12# | 14,088,268 | ||||||
699,000 | 2.875%, due 1/31/13# | 694,468 | ||||||
28,509,000 | 2.75%, due 2/28/13# | 28,143,743 | ||||||
2,032,000 | 2.50%, due 3/31/13# | 1,982,787 | ||||||
13,156,000 | 4.25%, due 8/15/14# | 13,916,575 | ||||||
52,039,000 | 4.25%, due 8/15/15# | 54,799,512 | ||||||
13,184,000 | 4.50%, due 2/15/16# | 14,070,835 | ||||||
35,754,000 | 5.125%, due 5/15/16**,# | 39,583,575 | ||||||
16,822,000 | 7.25%, due 5/15/16# | 21,051,152 | ||||||
12,902,000 | 4.875%, due 8/15/16# | 14,045,040 | ||||||
7,476,000 | 4.50%, due 5/15/17# | 7,922,227 | ||||||
9,729,000 | 4.25%, due 11/15/17# | 10,105,999 | ||||||
510,000 | 3.50%, due 2/15/18# | 499,163 | ||||||
5,549,000 | 7.875%, due 2/15/21# | 7,504,157 | ||||||
13,382,000 | 7.25%, due 8/15/22# | 17,459,335 | ||||||
15,200,000 | 6.00%, due 2/15/26# | 17,956,186 | ||||||
8,465,000 | 5.25%, due 2/15/29# | 9,287,028 | ||||||
4,856,000 | 4.75%, due 2/15/37# | 5,059,724 | ||||||
318,000 | 5.00%, due 5/15/37# | 344,633 | ||||||
6,918,000 | 4.375%, due 2/15/38 | 6,783,424 | ||||||
Total U.S. Treasury Notes/Bonds (cost $744,313,043) | 772,949,082 | |||||||
Money Markets – 7.4% | ||||||||
43,746,149 | Janus Institutional Cash Management Fund – Institutional Shares, 2.82% | 43,746,149 | ||||||
164,527,030 | Janus Institutional Money Market Fund – Institutional Shares, 2.74% | 164,527,030 | ||||||
Total Money Markets (cost $208,273,179) | 208,273,179 | |||||||
Other Securities – 24.7% | ||||||||
148,553,039 | Allianz Dresdner Daily Asset Fund† | 148,553,039 | ||||||
138,533,428 | Repurchase Agreements† | 138,533,428 | ||||||
Time Deposits: | ||||||||
33,417,086 | Abbey National Treasury, N.A., 2.375% 5/1/08† | 33,417,086 | ||||||
14,909,280 | ABN-AMRO Bank N.V., N.A., 2.26% 5/1/08† | 14,909,280 | ||||||
17,389,605 | BNP Paribas, New York, N.A., 2.50% 5/1/08† | 17,389,605 | ||||||
34,779,210 | Calyon, N.A., 2.50%, 5/1/08† | 34,779,210 | ||||||
12,104,415 | Chase Bank USA, N.A., 2.25%, 5/1/08† | 12,104,415 | ||||||
27,257,932 | Danske Bank, Cayman Islands, N.A. 2.53%, 5/1/08† | 27,257,932 | ||||||
24,345,447 | Deutsche Bank A.G., N.A., 2.30% 5/1/08† | 24,345,447 | ||||||
34,779,210 | Dexia Bank S.A. Brussels, N.A., 2.50% 5/1/08† | 34,779,210 | ||||||
34,779,210 | ING Bank N.V., Amsterdam, N.A. 2.4375%, 5/1/08† | 34,779,210 | ||||||
34,779,210 | Lloyd’s TSB Group PLC, N.A., 2.45% 5/1/08† | 34,779,210 | ||||||
5,145,636 | Natixis, N.A., 2.38%, 5/1/08† | 5,145,636 | ||||||
34,779,210 | Natixis, N.A., 2.43%, 5/1/08† | 34,779,210 | ||||||
34,779,210 | Nordea Bank Finland PLC, N.A., 2.50% 5/1/08† | 34,779,210 | ||||||
34,332,360 | Svenska Handelsbanken, N.A., 2.40% 5/1/08† | 34,332,360 |
See Notes to Schedules of Investments and Financial Statements.
16 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Other Securities – (continued) | ||||||||
34,779,210 | Wells Fargo Bank, N.A., 2.375%, 5/1/08† | $ | 34,779,210 | |||||
Total Other Securities (cost $699,442,698) | 699,442,698 | |||||||
Total Investments (total cost $3,185,415,567) – 125.9% | 3,564,354,567 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (25.9)% | (733,748,182) | |||||||
Net Assets – 100% | $ | 2,830,606,385 | ||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Australia | $ | 11,926,275 | 0.4% | |||||
Belgium | 31,744,744 | 0.9% | ||||||
Bermuda | 18,803,972 | 0.5% | ||||||
Brazil | 10,360,814 | 0.3% | ||||||
Canada | 185,214,605 | 5.2% | ||||||
Cayman Islands | 4,623,740 | 0.1% | ||||||
China | 8,690,886 | 0.2% | ||||||
Germany | 19,916,548 | 0.6% | ||||||
Hong Kong | 13,628,687 | 0.4% | ||||||
Japan | 37,514,469 | 1.1% | ||||||
South Korea | 23,160,001 | 0.6% | ||||||
Switzerland | 204,369,392 | 5.7% | ||||||
United Kingdom | 64,783,523 | 1.8% | ||||||
United States†† | 2,929,616,911 | 82.2% | ||||||
Total | $ | 3,564,354,567 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (56.7% excluding Short-Term Securities and Other Securities) |
Forward Currency Contracts, Open
Currency Sold and | Currency | Currency | Unrealized | |||||||||
Settlement Date | Units Sold | Value in U.S. $ | Gain/(Loss) | |||||||||
British Pound 5/14/08 | 2,750,000 | $ | 5,461,950 | $ | 97,326 | |||||||
British Pound 8/14/08 | 1,275,000 | 2,515,239 | (46,011) | |||||||||
British Pound 10/23/08 | 7,875,000 | 15,460,562 | (77,537) | |||||||||
Euro 10/23/08 | 11,400,000 | 17,648,522 | (53,762) | |||||||||
Japanese Yen 8/14/08 | 485,000,000 | 4,693,746 | (130,886) | |||||||||
Swiss Franc 11/12/08 | 64,000,000 | 61,831,873 | (67,138) | |||||||||
Total | $ | 107,611,892 | $ | (278,008) |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2008 17
Table of Contents
Janus Contrarian Fund (unaudited) | Ticker: JSVAX |
Fund Snapshot
This fund relies on detailed research to find out-of-favor companies believed to have unrecognized value.
![(DAVID DECKER PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646pdeckerd.jpg)
David Decker
portfolio manager
Performance Overview
Thank you for your continued investment in Janus Contrarian Fund. During the six-month period ended April 30, 2008, the Fund returned (7.78)%, modestly outperforming the (9.64)% return of the S&P 500® Index, the Fund’s primary benchmark, and the (9.47)% return of the Morgan Stanley Capital International (MSCI) All Country World IndexSM, the Fund’s secondary benchmark.
Economic Overview
The credit crisis that began early in 2007 reached a pinnacle when the investment bank Bear Stearns nearly collapsed and was saved by the Federal Reserve (Fed) and JP Morgan Chase. Since that time, following a massive injection of liquidity by the Fed, the market staged a very powerful rally. This increasingly sanguine view of the economy and equity markets appears to be predicated on the assumption that with the credit crisis over, recent aggressive interest rate reductions will help power the U.S. consumer, thus allowing the U.S. economy to avoid a deep and long-lasting economic down-turn. While this may come to pass, I remain uncomfortable with the ability of the U.S. consumer to emerge quickly from their high degree of leverage, particularly given the impending impact of rising oil and commodity prices. Indeed, global inflation of commodities as well as highly restrictive debt markets will, in my view, provide a very powerful headwind to global economic growth as well as strong equity returns in the future.
Hedging
In the period I purchased put options on West Texas Intermediate (WTI) crude futures in order to hedge some of the crude exposure in the Petroleo Brasileiro (Petrobras) position. I am of the belief that Petrobras is an excellent long-term investment, irrespective of whether crude oil experiences a significant retrenchment. However, because I believe there is a risk of near-term weakness in the stock should crude weaken, I decided to hedge the risk to the investment of a significant pull-back in crude. Should crude continue its upward climb, the loss in the hedges should be largely offset by gains in Petrobras. Also, during the period I chose to buy index put options in an attempt to protect the Fund in the event of a severe downturn in the markets. An index put option increases in value when the underlying asset decreases in value. By buying index put options, I was endeavoring to partially offset the negative impact of any weakness in the broad market. (Please see “Notes to Financial Statements” for information about the hedging techniques used by the Fund.)
Stocks that Hurt Performance
It was not only a difficult environment for the global equity markets, it was a difficult environment for the Fund. While the Fund modestly outperformed the S&P 500® Index during the period, I take no solace in generating negative returns, irrespective of the relative returns. Only absolute returns increase wealth, and as a very large investor in Janus Contrarian Fund, our interests are always aligned. Negative returns are to be expected over some periods in any long-term investment. However, performance during the period was marred by more than the natural volatility of the positions in the portfolio; it was marred by a few poor investment decisions.
The first important mistake was my investment in Tenaga Nasional Berhad, the largest power-generating company in Malaysia, which declined nearly 25% in the period. My investment thesis was predicated on the belief that it was a very attractively valued company with a highly shareholder-focused management team, operating in a market (Malaysia) with a high demand for power. One factor that made this a risky investment was that the government had yet to establish a fuel cost pass-through arrangement. Fuel cost pass-through is vital for a power company because if it cannot pass-through increased input costs such as coal and natural gas, its returns will compress and decrease the intrinsic value of the company. I mistakenly believed that following the general election held in March of 2008, the government would logically allow for a fuel cost pass-through. Unfortunately, the government barely won reelection and now has very little political capital to implement policy that, while economically sound, is politically unpopular. It is the unfortunate nature of politics that unsound policy that is popular often trumps sound policy that is unpopular. The decline in value of Tenaga following the election was harsh and swift, and unfortunately, justified. With coal prices globally skyrocketing, Tenaga will likely face a very difficult environment in the future.
Another investment mistake was the purchase of J.C. Penney Company, which declined approximately 24% in the period. Despite an obviously difficult retail environment, I believe the valuation of J.C. Penney reflected the difficulty, but didn’t
18 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
(unaudited)
reflect the potential impact of a turn-around engineered by CEO Mike Ullman. Unfortunately, it appears this was not the case as weakening sales at J.C. Penney had a disproportionately negative impact on margins. While I expected some of this, the magnitude of the impact surprised me and led me to conclude that the investment decision was a mistake. Though still cheap, during the period I began my complete sell off of the position. I believe any turn-around is likely to take substantially longer than I had anticipated.
The timing of the decision to buy biomedical company Amgen was another important mistake, as it declined nearly 28% in the period. One can never expect to pick the absolute bottom of a company’s stock price, but obviously the closer one comes, the better the potential for attractive future returns. Investing is a process of making decisions with incomplete information. In order to invest effectively, one must consider the likelihood of various outcomes and decide if the risk of a negative outcome is compensated by the potential return of a positive outcome. Unfortunately, sometimes the negative outcome occurs, even when one considers the probability of such an outcome as low. In the case of Amgen, I thought that the probability of a severe restriction on their Epogen and Aranesp drug franchise was low. Unfortunately, the unlikely occurred and resulted in a negative re-rating of the franchise, and therefore of itself. While further risks remain as I await more trials, I nonetheless believe that the current valuation indeed reflects a very negative environment and I have chosen to maintain the position, recognizing that I was wrong to have invested in Amgen when I did. Should further negative outcomes occur, downside certainly exists, but I do believe the upside opportunity compensates for that risk.
Two other important detractors were HMO Coventry Health Care (down slightly over 25%) and ICICI Bank (down approximately 36%). In the case of Coventry, despite weakness among its competitors and a slightly more challenging environment, I believe it remained an extremely well-run company and is extremely attractively valued relative to its returns. It is my view that despite a more severe correction than I would have expected, the decline in Coventry was an opportunity to buy more stock rather than exit the position. If the investment thesis is unchanged, volatility can be the friend of the long-term investor; I therefore chose to buy rather than sell.
ICICI Bank, despite being in my view a very well-run Indian bank, has clearly been penalized for being both a financial company and an Indian company, two very negative attributes in the period. Inflation is clearly accelerating in India, and compounded by increasing costs of credit, it is quite likely to have a negative impact on the demand for credit. Because of this, I chose to reduce the position slightly, despite what I see as an attractive valuation and a very strong management team.
Stocks that Aided Performance
I have chosen to spend the majority of this communication discussing the mistakes and poor performing positions because it is important to me that, as an investor in the Fund, you have a clear understanding of the factors that influenced the returns of your Fund, as well as an understanding about how your manager reacts to those situations. Since the returns of the Fund were substantially negative during the period, it logically follows that the failures should be highlighted more than the successes. That said, there were a few positions that contributed positively during the period. Global glass container manufacturer Owens-Illinois continued to contribute positively and was up slightly over 24% during the period. St. Joe, the largest private landowner in Florida, was up approximately 20% in the period after it had been substantially sold off last year as investors sold investments with exposure to residential real estate. Three energy companies, Forest Oil, Sandridge Energy and Chesapeake Energy, were all beneficiaries of strong oil and natural gas pricing and were up over 21%, 41%, and 31%, respectively.
Outlook
In conclusion, while I remain skeptical about strong equity returns in the face of global commodity inflation and credit contraction, interesting investment opportunities remain. In fact, I took advantage of the sell-off early this year to buy companies I believe were being cast aside without regard for valuation. Indeed, it is in these very types of difficult markets that some of the best opportunities arise. As an example, I was able to purchase a substantial position in ski destination Vail Resorts at a very attractive price because investors had feared that a difficult economy might hurt Vail’s business. That may or may not occur, but from my perspective, it doesn’t matter. The value of a company is the value of cumulative cash flows over time; a temporarily difficult economic environment should have no lasting impact on a franchise as powerful as Vail Resorts. In situations such as this, it is important to me to understand the valuation and buy aggressively when the opportunity presents itself. Our outstanding team of research analysts and I will continue to strive to take advantage of short-term market volatility to make long-term investments for Janus Contrarian Fund. Thank you again for your continued investment.
Janus Core, Risk-Managed and Value Funds April 30, 2008 19
Table of Contents
Janus Contrarian Fund (unaudited)
Janus Contrarian Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Owens-Illinois, Inc. | 1.37% | |||
St. Joe Co. | 0.58% | |||
Forest Oil Corp. | 0.45% | |||
Sandridge Energy, Inc. | 0.35% | |||
Chesapeake Energy Corp. | 0.35% |
5 Bottom Performers – Holdings
Contribution | ||||
ICICI Bank, Ltd. (ADR) | (0.99)% | |||
Coventry Health Care, Inc. | (0.92)% | |||
Tenaga Nasional Berhad | (0.75)% | |||
Amgen, Inc. | (0.73)% | |||
J.C. Penney Company, Inc. | (0.63)% |
5 Top Performers – Sectors
Fund Weighting | S&P 500® | |||||||||||
Fund Contribution | (% of Net Assets) | Index Weighting | ||||||||||
Energy | 1.00% | 13.45% | 12.83% | |||||||||
Materials | 0.07% | 13.93% | 3.45% | |||||||||
Information Technology | 0.03% | 0.30% | 16.07% | |||||||||
Telecommunication Services | 0.00% | 0.00% | 3.46% | |||||||||
Consumer Staples | (0.13)% | 3.90% | 10.51% |
5 Bottom Performers – Sectors
Fund Weighting | S&P 500® | |||||||||||
Fund Contribution | (% of Net Assets) | Index Weighting | ||||||||||
Consumer Discretionary | (2.78)% | 19.15% | 8.67% | |||||||||
Financials | (2.39)% | 26.10% | 17.59% | |||||||||
Utilities | (1.72)% | 10.21% | 3.63% | |||||||||
Health Care | (1.57)% | 8.02% | 12.09% | |||||||||
Industrials | (1.08)% | 4.95% | 11.71% |
20 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2008
Owen-Illinois, Inc. Containers – Metal and Glass | 6.8% | |||
St. Joe Co. Real Estate Operating/Development | 4.4% | |||
Liberty Global Inc. – Class A Broadcast Services and Programming | 4.1% | |||
Liberty Media Corp. – Entertainment – Class A Multimedia | 3.2% | |||
Coventry Health Care, Inc. Medical – HMO | 3.2% | |||
21.7% |
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19p05.gif)
Emerging markets comprised 18.7% of total net assets.
*Includes Securities Sold Short (1.0)%
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19t05.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19c05.gif)
Janus Core, Risk-Managed and Value Funds April 30, 2008 21
Table of Contents
Janus Contrarian Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19m05.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratio – for the fiscal year ended October 31, 2007 | ||||||||||
Fiscal | One | Five | Since | Total Annual Fund | |||||||
Year-to-Date | Year | Year | Inception* | Operating Expenses | |||||||
Janus Contrarian Fund | (7.78)% | 2.20% | 24.23% | 10.66% | 0.98% | ||||||
S&P 500® Index | (9.64)% | (4.68)% | 10.62% | 1.86% | |||||||
Morgan Stanley Capital International All Country World IndexSM | (9.47)% | (0.06)% | 16.46% | 3.78% | |||||||
Lipper Quartile | – | 1st | 1st | 1st | |||||||
Lipper Ranking – based on total return for Multi-Cap Core Funds | – | 98/863 | 1/498 | 12/294 | |||||||
Visit janus.com to view current performance and characteristic information | |||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The Fund has a performance-based management fee that adjusts up or down based on the Fund’s performance relative to an approved benchmark index over a performance measurement period.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.) All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
22 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
(unaudited)
The Fund’s performance may be affected by risks that include those associated with non-diversification, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and other details.
Funds that invest in Real Estate Investment Trusts (REITs) may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: legal, political, liquidity, interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Funds invest in foreign REITs, the Funds may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
The use of short sales may cause the fund to have higher expenses than those of other equity funds. Short sales are speculative transactions and involve special risks, including a greater reliance on the investment team’s ability to accurately anticipate the future value of a security. The Fund’s losses are potentially unlimited in a short sale transaction. The Fund’s use of short sales in effect leverages the Fund’s portfolio. The Fund’s use of leverage may result in risks and can magnify the effect of any losses. There is no assurance that a leveraging strategy will be successful.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – February 29, 2000 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 922.20 | $ | 4.68 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.99 | $ | 4.92 | ||||||||
†Expenses are equal to the annualized expense ratio of 0.98%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period).
Janus Core, Risk-Managed and Value Funds April 30, 2008 23
Table of Contents
Janus Contrarian Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares/Principal/Contract Amounts | Value | |||||||
Common Stock – 97.3% | ||||||||
Airport Development – Maintenance – 0.4% | ||||||||
10,583,003 | Macquarie Airports**,# | $ | 31,192,740 | |||||
Automotive – Cars and Light Trucks – 1.0% | ||||||||
1,561,503 | BMW A.G. | 85,467,414 | ||||||
Brewery – 3.0% | ||||||||
2,993,416 | InBev N.V.# | 246,568,992 | ||||||
Broadcast Services and Programming – 5.3% | ||||||||
9,609,197 | Liberty Global, Inc. – Class A*,#,£ | 340,069,482 | ||||||
2,134,427 | Liberty Global, Inc. – Class C*,# | 70,862,976 | ||||||
1,762,306 | Liberty Media Corp. – Capital – Class A* | 27,086,643 | ||||||
438,019,101 | ||||||||
Building Products – Cement and Aggregate – 2.2% | ||||||||
5,623,888 | Cemex S.A. de C.V. (ADR)*,# | 155,500,503 | ||||||
11,296,954 | Gujarat Ambuja Cements, Ltd. | 31,655,958 | ||||||
187,156,461 | ||||||||
Building Products – Wood – 0.5% | ||||||||
2,447,750 | Masco Corp.# | 44,573,528 | ||||||
Cable Television – 2.6% | ||||||||
8,763,230 | DIRECTV Group, Inc.* | 215,925,987 | ||||||
Casino Hotels – 0.6% | ||||||||
4,665,758 | Crown, Ltd.** | 48,141,700 | ||||||
Commer Banks – 3.0% | ||||||||
3,371,258 | ICICI Bank, Ltd. | 72,985,006 | ||||||
2,456,529 | ICICI Bank, Ltd. (ADR)# | 109,536,628 | ||||||
2,790,300 | Mitsubishi UFJ Financial Group, Inc. | 30,686,652 | ||||||
6,371 | Mizuho Financial Group, Inc.# | 33,121,669 | ||||||
246,329,955 | ||||||||
Containers – Metal and Glass – 6.8% | ||||||||
10,212,200 | Owens-Illinois, Inc.*,**,£ | 563,202,830 | ||||||
Distribution/Wholesale – 1.0% | ||||||||
20,795,660 | Li & Fung, Ltd. | 85,541,103 | ||||||
Diversified Operations – 1.3% | ||||||||
20,908,000 | China Merchants Holdings International Company, Ltd. | 106,710,564 | ||||||
Electric – Generation – 1.5% | ||||||||
26,452,259 | National Thermal Power Corporation, Ltd. | 128,209,734 | ||||||
Electric – Integrated – 2.4% | ||||||||
96,745,100 | Tenaga Nasional Berhad | 201,100,437 | ||||||
Electric – Transmission – 1.6% | ||||||||
51,197,250 | Power Grid Corporation of India, Ltd. | 133,012,165 | ||||||
Engineering – Research and Development Services – 1.3% | ||||||||
1,175,158 | Larsen & Toubro, Ltd. | 86,938,751 | ||||||
323,596 | Larsen & Toubro, Ltd. (GDR) | 23,987,168 | ||||||
110,925,919 | ||||||||
Finance – Mortgage Loan Banker – 0.8% | ||||||||
956,565 | Housing Development Finance Corporation, Ltd. | 66,338,583 | ||||||
Forestry – 5.2% | ||||||||
5,224,770 | Plum Creek Timber Company, Inc.# | 213,379,607 | ||||||
3,397,744 | Weyerhaeuser Co.# | 217,047,887 | ||||||
430,427,494 | ||||||||
Independent Power Producer – 4.3% | ||||||||
5,867,110 | NRG Energy, Inc.*,# | 257,859,484 | ||||||
158,928 | Reliance Power, Ltd.* | 1,544,649 | ||||||
3,783,955 | Reliant Energy, Inc.* | 97,399,002 | ||||||
356,803,135 | ||||||||
Investment Companies – 0.4% | ||||||||
11,224,990 | Australian Infrastructure Fund** | 29,551,421 | ||||||
Investment Management and Advisory Services – 0% | ||||||||
13,665 | Future Capital Holdings, Ltd.* | 211,429 | ||||||
Medical – Biomedical and Genetic – 2.1% | ||||||||
4,207,375 | Amgen, Inc.* | 176,162,791 | ||||||
Medical – HMO – 3.2% | ||||||||
5,877,617 | Coventry Health Care, Inc.* | 262,905,808 | ||||||
Medical Products – 1.7% | ||||||||
1,932,155 | Zimmer Holdings, Inc.* | 143,288,615 | ||||||
Metal – Diversified – 0.3% | ||||||||
2,287,960 | Ivanhoe Mines, Ltd. (U.S. Shares)*,# | 21,987,296 | ||||||
Metal Processors and Fabricators – 0.6% | ||||||||
6,997,083 | Bharat Forge, Ltd. | 50,791,500 | ||||||
Multimedia – 3.9% | ||||||||
10,375,374 | Liberty Media Corp. – Entertainment – Class A* | 269,240,955 | ||||||
2,916,030 | News Corporation, Inc. – Class A | 52,196,937 | ||||||
321,437,892 | ||||||||
Oil Companies – Exploration and Production – 5.8% | ||||||||
2,495,710 | Chesapeake Energy Corp.# | 129,028,207 | ||||||
4,170,660 | Forest Oil Corp.* | 245,776,994 | ||||||
2,424,071 | Sandridge Energy, Inc.*,# | 109,519,528 | ||||||
484,324,729 | ||||||||
Oil Companies – Integrated – 1.6% | ||||||||
1,113,420 | Petroleo Brasileiro S.A. (ADR) | 135,191,456 | ||||||
Oil Refining and Marketing – 2.9% | ||||||||
3,812,165 | Reliance Industries, Ltd. | 245,606,594 | ||||||
Paper and Related Products – 0.5% | ||||||||
51,576,765 | Ballarpur Industries, Ltd.£ | 38,371,548 | ||||||
Pipelines – 4.0% | ||||||||
3,881,435 | Enbridge, Inc.# | 159,683,192 | ||||||
3,125,047 | Kinder Morgan Management LLC*,#,£ | 170,315,061 | ||||||
329,998,253 | ||||||||
Publishing – Periodicals – 0.2% | ||||||||
1,672,155 | Playboy Enterprises, Inc. – Class B*,#,£ | 13,979,216 | ||||||
Real Estate Management/Services – 4.2% | ||||||||
6,574,745 | CB Richard Ellis Group, Inc. – Class A*,# | 152,008,104 | ||||||
6,963,000 | Mitsubishi Estate Company, Ltd.# | 200,844,053 | ||||||
352,852,157 | ||||||||
Real Estate Operating/Development – 8.1% | ||||||||
38,963,000 | CapitaLand, Ltd.** | 196,431,316 | ||||||
44,469,000 | New World Development Company, Ltd. | 114,886,619 | ||||||
8,953,092 | St. Joe Co.#,£ | 364,122,253 | ||||||
675,440,188 | ||||||||
Reinsurance – 1.1% | ||||||||
20,926 | Berkshire Hathaway, Inc. – Class B* | 93,267,182 | ||||||
See Notes to Schedules of Investments and Financial Statements.
24 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares/Principal/Contract Amounts | Value | |||||||
REIT – Diversified – 1.3% | ||||||||
1,161,020 | Vornado Realty Trust# | $ | 108,079,352 | |||||
REIT – Manufactured Homes – 1.0% | ||||||||
2,437,560 | Annaly Mortgage Management, Inc.# | 40,853,506 | ||||||
2,148,703 | Gramercy Capital Corp.£ | 40,825,357 | ||||||
81,678,863 | ||||||||
REIT – Warehouse and Industrial – 3.0% | ||||||||
4,053,195 | ProLogis# | 253,770,539 | ||||||
Resorts and Theme Parks – 1.7% | ||||||||
2,988,565 | Vail Resorts, Inc.*,#,£ | 145,931,629 | ||||||
Retail – Consumer Electronics – 0.9% | ||||||||
845,200 | Yamada Denki Company, Ltd.# | 72,932,191 | ||||||
Retail – Major Department Stores – 1.2% | ||||||||
1,253,760 | J.C. Penney Company, Inc. | 53,284,800 | ||||||
3,746,492 | Pantaloon Retail India, Ltd. | 44,142,870 | ||||||
97,427,670 | ||||||||
Soap and Cleaning Preparations – 1.1% | ||||||||
1,561,589 | Reckitt Benckiser PLC** | 90,977,727 | ||||||
Television – 1.3% | ||||||||
10,338,702 | British Sky Broadcasting Group PLC** | 111,509,681 | ||||||
Transportation – Railroad – 0.4% | ||||||||
2,306,250 | All America Latina Logistica (GDR)# | 29,572,583 | ||||||
Total Common Stock (cost $6,559,112,957) | 8,092,896,152 | |||||||
Purchased Options – Calls – 0.2% | ||||||||
162,442 | Financial Select Sector SPDR Fund expires June 2008 exercise price $27.00 (premiums received $23,554,090) | 15,756,874 | ||||||
Purchased Options – Puts – 1.0% | ||||||||
4,820 | Crude Oil Futures expires November 2008 exercise price $104.00 | 33,981,000 | ||||||
4,035 | Crude Oil Futures expires December 2008 exercise price $95.00 | 14,929,500 | ||||||
63,147 | iShares Russell 2000 Index Fund expires May 2008 exercise price $64.00 | 631,470 | ||||||
486,869 | MSCI World Excluding Europe Index expires May 2008 exercise price $1,235.02 | 993,359 | ||||||
7,001 | S&P 500® Index expires June 2008 exercise price $1,370.00 | 22,557,222 | ||||||
165,565 | S&P Asia 50® Index expires May 2008 exercise price $3,076.45 | 567,259 | ||||||
116,347 | S&P Asia 50® Index expires June 2008 exercise price $3,323.26 | 7,179,560 | ||||||
Total Purchased Options – Puts (premiums received $179,577,320) | 80,839,370 | |||||||
Money Markets – 1.4% | ||||||||
37,981,530 | Janus Institutional Cash Management Fund – Institutional Shares, 2.82% | 37,981,530 | ||||||
79,050,138 | Janus Institutional Money Market Fund – Institutional Shares, 2.74% | 79,050,138 | ||||||
Total Money Markets (cost $117,031,668) | 117,031,668 | |||||||
Other Securities – 13.9% | ||||||||
148,553,039 | Allianz Dresdner Daily Asset Fund† | 148,553,039 | ||||||
249,035,188 | Repurchase Agreements† | 249,035,188 | ||||||
Time Deposits: | ||||||||
60,072,361 | Abbey National Treasury Services, N.A., 2.375%, 5/1/08† | 60,072,361 | ||||||
26,801,728 | ABN-Amro Bank N.V., N.A., 2.26%, 5/1/08† | 26,801,728 | ||||||
31,260,493 | BNP Paribas, New York, N.A., 2.50%, 5/1/08† | 31,260,493 | ||||||
62,520,985 | Calyon, N.A., 2.50%, 5/1/08† | 62,520,985 | ||||||
21,759,549 | Chase Bank U.S.A., N.A., 2.25%, 5/1/08† | 21,759,549 | ||||||
68,773,088 | Danske Bank A/S Cayman, N.A., 2.53%, 5/1/08† | 68,773,088 | ||||||
43,764,696 | Deutsche Bank A.G., N.A., 2.30%, 5/1/08† | 43,764,696 | ||||||
62,520,985 | Dexia Bank S.A. Brussels, N.A., 2.50%, 5/1/08† | 62,520,985 | ||||||
62,520,985 | ING Bank N.V. Amsterdam, N.A., 2.4375%, 5/1/08† | 62,520,985 | ||||||
62,520,985 | Lloyd’s TSB Bank PLC London, N.A., 2.45%, 5/1/08† | 62,520,985 | ||||||
9,392,529 | Natixis, N.A., 2.38%, 5/1/08† | 9,392,529 | ||||||
62,520,985 | Natixis, N.A., 2.43%, 5/1/08† | 62,520,985 | ||||||
62,520,985 | Nordea Bank PLC Finland, N.A., 2.50%, 5/1/08† | 62,520,985 | ||||||
61,717,707 | Svenska Handelsbanken, N.A., 2.40%, 5/1/08† | 61,717,707 | ||||||
62,520,985 | Wells Fargo Bank, N.A., 2.375%, 5/1/08† | 62,520,985 | ||||||
Total Other Securities (cost $1,158,777,273) | 1,158,777,273 | |||||||
Total Investments (total cost $8,038,053,308) – 113.8% | 9,465,301,337 | |||||||
Securities Sold Short – (1.0)% | ||||||||
Automotive – Cars and Light Trucks – (1.0)% | ||||||||
284,025 | Volkswagon A.G. (proceeds $80,113,459) | (84,006,489) | ||||||
Liabilities, net of Cash, Receivables and Other Assets – (12.8%) | (1,063,469,377) | |||||||
Net Assets – 100% | $ | 8,317,825,471 | ||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2008 25
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Janus Contrarian Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Australia | $ | 108,885,862 | 1.2% | |||||
Belgium | 246,568,992 | 2.6% | ||||||
Bermuda | 85,541,103 | 0.9% | ||||||
Brazil | 164,764,039 | 1.7% | ||||||
Canada | 181,670,488 | 1.9% | ||||||
Germany | 85,467,413 | 0.9% | ||||||
Hong Kong | 221,597,184 | 2.3% | ||||||
India | 1,033,332,584 | 10.9% | ||||||
Japan | 337,584,564 | 3.6% | ||||||
Malaysia | 201,100,437 | 2.1% | ||||||
Mexico | 155,500,503 | 1.7% | ||||||
Singapore | 196,431,316 | 2.1% | ||||||
United Kingdom | 202,487,408 | 2.1% | ||||||
United States†† | 6,244,369,444 | 66.0% | ||||||
Total | $ | 9,465,301,337 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (52.5% excluding Short-Term Securities and Other Securities) |
Summary of Investments by Country – (Short Positions)
% of Securities | ||||||||
Country | Value | Sold Short | ||||||
Germany | $ | (84,006,489) | 100.0% | |||||
Total | $ | (84,006,489) | 100.0% |
Forward Currency Contracts, Open
Currency Sold and | Currency | Currency | Unrealized | |||||||||
Settlement Date | Units Sold | Value in U.S. $ | Gain/(Loss) | |||||||||
Australian Dollar 10/16/08 | 96,300,000 | $ | 88,759,032 | $ | (1,827,096) | |||||||
British Pound 5/14/08 | 88,000,000 | 176,432,335 | 3,081,749 | |||||||||
Singapore Dollar 10/16/08 | 179,700,000 | 133,407,013 | (355,036) | |||||||||
Total | $ | 398,598,380 | $ | 899,617 |
See Notes to Schedules of Investments and Financial Statements.
26 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
Janus Fundamental Equity Fund (unaudited) | Ticker: JAEIX |
Fund Snapshot
This conservative growth fund relies on the Janus Research Team to drive its fundamental approach to investing in core holdings and opportunistic companies.
Team Based Approach
Led by Jim Goff,
Director of Research
Led by Jim Goff,
Director of Research
Performance Overview
For the six-month period ended April 30, 2008, Janus Fundamental Equity Fund returned (10.83)%. The Fund underperformed its primary benchmark, the S&P 500® Index, which returned (9.64)%, as well as its secondary benchmark, the Russell 1000® Growth Index, which returned (9.28)%.
Economic Overview
Turmoil in the credit markets, uncertainty surrounding the near-term outlook for the U.S. economy and a weaker corporate profit picture made for a volatile and difficult market environment over the past several months. While sentiment toward the end of the period improved and U.S. equity markets finished well above the mid-March lows, stocks were broadly lower during the six-month period ended April 30, 2008.
Additional subprime-related write-offs, slowing consumer spending and a softening labor market, accompanied by record commodity prices and rising inflation expectations weighed on investor sentiment during the period. Stocks reached their lows in mid-March. Financial markets stabilized somewhat after the Federal Reserve (Fed) aggressively lowered the Federal Funds rate, expanded the collateral it would accept and played an instrumental role in JP Morgan Chase’s purchase of Bear Stearns. In the end, the Fed lowered its target interest rate from 4.50% to 2.00% during the period.
Overall, mid-cap stocks performed better than large- and small-cap stocks, while growth outperformed value stocks. For the broad market all sectors declined with the exception of energy, which turned in a gain for the six-month period amid record crude oil prices. Meanwhile, financials were the worst performing group, suffering from turmoil in the credit markets and larger-than-expected subprime-related write-downs. Information technology was also among the weakest performers while defensive sectors, like consumer staples, posted small declines.
Since November 7, 2007, Janus Fundamental Equity Fund has been team managed, representing the best ideas from Janus’ more than 30 equity analysts and Director of Research Jim Goff oversees the team. Individual analysts primarily drive stock selection, with debate and oversight provided by each one of the seven global sector research teams with which each analyst is aligned. We believe there is great power in individual analysts driving investment decisions, as they are most familiar with the stocks they cover. We strive to keep the Fund sector-neutral compared to its primary benchmark, although the Fund had over 16% non-U.S. exposure at the end of the period. The focus of the Fund is on capturing the best ideas of Janus’ research platform in an attempt to generate strong and consistent investment returns.
Stocks That Hurt Performance
Areas of weakness included the financials, technology and health care sectors, where select holdings fell short of our expectations. The subprime loan issues that have dominated the financial markets for months weighed on the stock price of home mortgage company Fannie Mae. Fannie Mae traded lower due to continued weakness in housing and credit markets. We believe that the company will benefit from the recent reduction in its capital surplus level, as well as improving returns on equity given the existing difference between mortgage rates and U.S. Treasury bond yields.
Staying within financials, E*Trade Financial suffered after the company reported large write-downs in its mortgage business. This weakness violated our initial investment thesis on the stock, which was focused on growth in the online brokerage and banking businesses to drive earnings. Given the mortgage losses impacting the company’s future growth prospects, the position was sold.
In the health care sector, pharmaceutical company Merck was the largest detractor during the period. Performance at Merck was driven largely by a report from the American College of Cardiology suggesting that doctors should limit prescriptions for the company’s jointly sold (with Schering-Plough) cholesterol drugs. The report stated that older, cheaper drugs could be just as effective. Last year, the two drug makers sold $5.2 billion of Vytorin and Zetia, combined. We will be watching the developments of Merck closely in the coming months.
Within the technology sector, EMC hindered performance in the period. This provider of network storage solutions, declined after its majority-owned subsidiary, VMware, provided conservative guidance, which weighed on the price of both stocks. We chose to exit the position.
Janus Core, Risk-Managed and Value Funds April 30, 2008 27
Table of Contents
Janus Fundamental Equity Fund (unaudited)
Investments That Contributed to Performance
The energy sector and select industrials and technology holdings aided performance. Energy company Hess was the top contributor to performance for the period. The company benefited from the rising price of oil during the period, as well as increased appreciation for the future production potential from Hess’ new projects, including deep water projects in the Gulf of Mexico and off the coast of Brazil. Given the price appreciation in the period, we trimmed the position in order to harvest profits.
Oil and gas exploration company EOG Resources was another strong individual contributor during the period. Looking ahead, EOG has rights to shale formations in Canada, which are similar to its Texas formations. We believe this could be an attractive opportunity for EOG to increase its gas reserves.
In the industrials sector Canada-based Potash Corporation of Saskatchewan moved ahead, aided by continued demand and tight supplies. The company continued to benefit from global demand for agricultural products, which is expected to drive further growth in revenue and earnings industry wide. Potash itself is a critical ingredient used in fertilizers for key farming areas like the U.S., Brazil and China. Price increases for the commodity have been enacted for 2008 in many regions, which led to upward revisions in analysts’ estimates and provided a further tailwind for the company’s stock price.
Technology holding First Solar also contributed to performance during the six-month period. First Solar produces solar cells using thin-film technology, a specialized approach to solar energy production. The company continued to report strong results and growth as it ramps up its production due to demand.
Outlook
The Fund remains sector-neutral and we expect stock selection to be a key driver of returns going forward. Volatile markets tend to give many investors a reason to focus on the short term. Therefore, we believe we will see many opportunities for long-term investors to purchase good businesses at attractive prices. Looking ahead, we will continue to invest with conviction in areas where we feel we can develop an edge through research. Through our valuation discipline and focus on risk management, we remain committed to delivering superior long-term results for our clients.
Thank you for your investment in Janus Fundamental Equity Fund.
28 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
(unaudited)
Janus Fundamental Equity Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Hess Corp. | 1.19% | |||
EOG Resources, Inc. | 1.17% | |||
Schlumberger, Ltd. (U.S. Shares) | 0.63% | |||
First Solar, Inc. | 0.45% | |||
Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 0.45% |
5 Bottom Performers – Holdings
Contribution | ||||
Fannie Mae | (1.02)% | |||
E*TRADE Financial Corp. | (0.99)% | |||
Merck & Company, Inc. | (0.98)% | |||
EMC Corp. | (0.90)% | |||
Valero Energy Corp. | (0.87)% |
4 Top Performers – Sectors**
Fund Weighting | S&P 500® | |||||||||||
Fund Contribution | (% of Net Assets) | Index Weighting | ||||||||||
Energy | 1.49% | 15.62% | 16.47% | |||||||||
Industrials | (0.09)% | 16.49% | 16.35% | |||||||||
Other* | (0.26)% | 0.18% | 0.00% | |||||||||
Communications | (1.15)% | 6.68% | 8.54% |
4 Bottom Performers – Sectors**
Fund Weighting | S&P 500® | |||||||||||
Fund Contribution | (% of Net Assets) | Index Weighting | ||||||||||
Financials | (4.25)% | 13.87% | 17.59% | |||||||||
Technology | (2.97)% | 19.26% | 14.17% | |||||||||
Health Care | (1.63)% | 13.81% | 12.86% | |||||||||
Consumer | (1.60)% | 14.11% | 14.04% |
* | Industry not classified by Global Classification Standard. | |
** | The sectors listed above represent those covered by the seven analyst teams who comprise the Janus Research Team. |
Janus Core, Risk-Managed and Value Funds April 30, 2008 29
Table of Contents
Janus Fundamental Equity Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2008
JP Morgan Chase & Co. Finance – Investment Bankers/Brokers | 4.3% | |||
United Parcel Service, Inc.- Class B Transportation Services | 4.0% | |||
Cisco Systems, Inc. Networking Products | 4.0% | |||
CVS/Caremark Corp. Retail-Drug Store | 4.0% | |||
EOG Resources, Inc. Oil Companies-Exploration and Production | 3.9% | |||
20.2% |
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19p03.gif)
Emerging markets comprised 1.3% of total net assets.
Top Country Allocations– Long Positions (% of Investment Securities)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19t03.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19c03.gif)
30 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19m03.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratio – for the fiscal year ended October 31, 2007 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Fundamental Equity Fund | (10.83)% | (1.82)% | 12.54% | 7.70% | 11.65% | 0.87% | |||||||
S&P 500® Index | (9.64)% | (4.68)% | 10.62% | 3.89% | 8.09% | ||||||||
Russell 1000® Growth Index | (9.28)% | (0.23)% | 9.52% | 1.66% | 5.91% | ||||||||
Lipper Quartile | – | 1st | 1st | 1st | 1st | ||||||||
Lipper Ranking – based on total return for Large-Cap Core Funds | – | 201/822 | 34/575 | 3/299 | 1/207 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited, to exchange traded-funds) in which a Fund invests or has invested during the period.) All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
Janus Core, Risk-Managed and Value Funds April 30, 2008 31
Table of Contents
Janus Fundamental Equity Fund (unaudited)
The Fund’s performance may be affected by risks that include those associated with investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and, derivatives. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and other details.
Funds that invest in Real Estate Investment Trusts (REITs) may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: legal, political, liquidity, interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Funds invest in foreign REITs, the Funds may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
June 30, 1996 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date –June 28, 1996 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/01/07) | (4/30/08) | (11/01/07-04/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 891.70 | $ | 4.09 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.54 | $ | 4.37 | ||||||||
†Expenses are equal to the annualized expense ratio of 0.87%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital.
32 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
Janus Fundamental Equity Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Common Stock – 98.7% | ||||||||
Advertising Sales – 2.0% | ||||||||
471,453 | Lamar Advertising Co. – Class A*,# | $ | 18,641,252 | |||||
Agricultural Chemicals – 2.5% | ||||||||
45,635 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 8,394,558 | ||||||
51,199 | Syngenta A.G.** | 15,166,892 | ||||||
23,561,450 | ||||||||
Applications Software – 3.0% | ||||||||
970,915 | Microsoft Corp. | 27,690,496 | ||||||
Athletic Footwear – 0.5% | ||||||||
75,760 | NIKE, Inc. – Class B | 5,060,768 | ||||||
Audio and Video Products – 0.7% | ||||||||
138,400 | Sony Corp. | 6,345,141 | ||||||
Brewery – 1.5% | ||||||||
181,134 | InBev N.V.#,** | 14,920,087 | ||||||
Building – Residential and Commercial – 1.1% | ||||||||
16,285 | NVR, Inc.*,# | 9,990,848 | ||||||
Cellular Telecommunications – 0.5% | ||||||||
1,371,100 | Vodafone Group PLC | 4,336,268 | ||||||
Computers – 1.2% | ||||||||
35,500 | Apple, Inc.* | 6,175,225 | ||||||
107,800 | Hewlett-Packard Co. | 4,996,530 | ||||||
11,171,755 | ||||||||
Containers – Metal and Glass – 0.9% | ||||||||
155,590 | Owens-Illinois, Inc.* | 8,580,789 | ||||||
Cosmetics and Toiletries – 3.6% | ||||||||
865,675 | Avon Products, Inc. | 33,778,639 | ||||||
Diversified Minerals – 0.8% | ||||||||
195,860 | Companhia Vale do Rio Doce (ADR) | 7,654,209 | ||||||
Diversified Operations ��� 5.3% | ||||||||
278,830 | Danaher Corp. | 21,754,317 | ||||||
116,345 | Ingersoll-Rand Co. – Class A# | 5,163,391 | ||||||
188,215 | Siemens A.G.** | 22,302,557 | ||||||
49,220,265 | ||||||||
Drug Delivery Systems – 0.6% | ||||||||
142,360 | Hospira, Inc.* | 5,858,114 | ||||||
Electric – Generation – 2.1% | ||||||||
1,142,795 | AES Corp.* | 19,838,921 | ||||||
Engineering – Research and Development Services – 1.4% | ||||||||
412,586 | ABB, Ltd.** | 12,651,634 | ||||||
Enterprise Software/Services – 2.9% | ||||||||
1,290,730 | Oracle Corp.* | 26,911,721 | ||||||
Finance – Credit Card – 3.7% | ||||||||
710,530 | American Express Co. | 34,119,651 | ||||||
Finance – Investment Bankers/Brokers – 4.3% | ||||||||
848,085 | JP Morgan Chase & Co. | 40,411,249 | ||||||
Finance – Mortgage Loan Banker – 2.6% | ||||||||
707,485 | Fannie Mae | 20,021,825 | ||||||
183,950 | Freddie Mac | 4,582,195 | ||||||
24,604,020 | ||||||||
Finance – Other Services – 0.6% | ||||||||
12,515 | CME Group, Inc. | 5,724,987 | ||||||
Food – Miscellaneous/Diversified – 2.9% | ||||||||
849,521 | Kraft Foods, Inc. – Class A | 26,870,349 | ||||||
Independent Power Producer – 1.3% | ||||||||
282,550 | NRG Energy, Inc.*,# | 12,418,073 | ||||||
Investment Management and Advisory Services – 0.6% | ||||||||
93,160 | T. Rowe Price Group, Inc. | 5,455,450 | ||||||
Medical – Biomedical and Genetic – 1.1% | ||||||||
161,580 | Celgene Corp.* | 10,040,581 | ||||||
Medical – Drugs – 5.0% | ||||||||
790,125 | Merck & Company, Inc. | 30,056,354 | ||||||
97,175 | Roche Holding A.G.** | 16,185,427 | ||||||
46,241,781 | ||||||||
Medical – HMO – 0.6% | ||||||||
117,385 | Coventry Health Care, Inc.* | 5,250,631 | ||||||
Multimedia – 1.9% | ||||||||
201,735 | McGraw-Hill Companies, Inc. | 8,269,118 | ||||||
489,880 | News Corporation, Inc. – Class B | 9,062,780 | ||||||
17,331,898 | ||||||||
Networking Products – 4.0% | ||||||||
1,438,020 | Cisco Systems, Inc.* | 36,870,832 | ||||||
Oil – Field Services – 1.8% | ||||||||
169,450 | Schlumberger, Ltd. (U.S. Shares)** | 17,038,198 | ||||||
Oil Companies – Exploration and Production – 3.9% | ||||||||
275,045 | EOG Resources, Inc.# | 35,887,872 | ||||||
Oil Companies – Integrated – 4.0% | ||||||||
309,430 | Hess Corp. | 32,861,465 | ||||||
36,855 | Petroleo Brasileiro S.A. (ADR) | 4,474,934 | ||||||
37,336,399 | ||||||||
Oil Field Machinery and Equipment – 1.0% | ||||||||
182,970 | Cameron International Corp.* | 9,007,613 | ||||||
Oil Refining and Marketing – 2.9% | ||||||||
552,219 | Valero Energy Corp. | 26,975,898 | ||||||
Real Estate Management/Services – 0.7% | ||||||||
218,000 | Mitsubishi Estate Company, Ltd. | 6,288,095 | ||||||
Reinsurance – 3.3% | ||||||||
6,805 | Berkshire Hathaway, Inc. – Class B* | 30,329,885 | ||||||
REIT – Diversified – 1.4% | ||||||||
916,455 | CapitalSource, Inc.# | 12,876,193 | ||||||
Retail – Apparel and Shoe – 1.3% | ||||||||
147,781 | Industria de Diseno Textil S.A.** | 8,075,891 | ||||||
121,000 | Nordstrom, Inc. | 4,266,460 | ||||||
12,342,351 | ||||||||
Retail – Drug Store – 4.0% | ||||||||
911,140 | CVS/Caremark Corp. | 36,782,722 | ||||||
Semiconductor Equipment – 1.0% | ||||||||
216,250 | KLA-Tencor Corp. | 9,445,800 | ||||||
Television – 1.7% | ||||||||
1,478,305 | British Sky Broadcasting Group PLC | 15,944,489 | ||||||
Therapeutics – 0.9% | ||||||||
159,775 | Gilead Sciences, Inc.* | 8,269,954 | ||||||
Tobacco – 3.1% | ||||||||
689,985 | Altria Group, Inc. | 13,799,700 | ||||||
292,170 | Philip Morris International, Inc.* | 14,909,435 | ||||||
28,709,135 | ||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2008 33
Table of Contents
Janus Fundamental Equity Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Toys – 0.9% | ||||||||
431,110 | Mattel, Inc. | $ | 8,083,313 | |||||
Transportation – Services – 4.0% | ||||||||
514,835 | United Parcel Service, Inc. – Class B | 37,279,201 | ||||||
Wireless Equipment – 3.6% | ||||||||
470,800 | Crown Castle International Corp.* | 18,290,580 | ||||||
344,720 | QUALCOMM, Inc. | 14,888,457 | ||||||
33,179,037 | ||||||||
Total Common Stock (cost $860,782,129) | 917,328,014 | |||||||
Money Markets – 1.2% | ||||||||
11,550 | Janus Institutional Cash Management Fund – Institutional Shares, 2.82% | 11,550 | ||||||
10,872,450 | Janus Institutional Money Market Fund – Institutional Shares, 2.74% | 10,872,450 | ||||||
Total Money Markets (cost $10,884,000) | 10,884,000 | |||||||
Other Securities – 5.6% | ||||||||
16,119,214 | Allianz Dresdner Daily Asset Fund† | 16,119,214 | ||||||
8,834,469 | Repurchase Agreements† | 8,834,469 | ||||||
26,997,967 | Time Deposits† | 26,997,967 | ||||||
Total Other Securities (cost $51,951,650) | 51,951,650 | |||||||
Total Investments (total cost $923,617,779) – 105.5% | 980,163,664 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (5.5)% | (50,806,656) | |||||||
Net Assets – 100% | $ | 929,357,008 | ||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Belgium | $ | 14,920,087 | 1.5% | |||||
Bermuda | 5,163,391 | 0.5% | ||||||
Brazil | 12,129,143 | 1.2% | ||||||
Canada | 8,394,558 | 0.9% | ||||||
Germany | 22,302,558 | 2.3% | ||||||
Japan | 12,633,235 | 1.3% | ||||||
Netherlands | 17,038,198 | 1.7% | ||||||
Spain | 8,075,891 | 0.8% | ||||||
Switzerland | 44,003,953 | 4.5% | ||||||
United Kingdom | 20,280,757 | 2.1% | ||||||
United States†† | 815,221,893 | 83.2% | ||||||
Total | $ | 980,163,664 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (76.8% excluding Short-Term Securities and Other Securities). |
Forward Currency Contracts, Open
Currency Sold and | Currency | Currency | Unrealized | |||||||||
Settlement Date | Units Sold | Value in U.S. $ | Gain/(Loss) | |||||||||
Euro 11/12/08 | 9,000,000 | $ | 13,920,185 | $ | 10,555 | |||||||
Swiss Franc 11/12/08 | 14,000,000 | 13,525,789 | (14,753) | |||||||||
Total | $ | 27,445,974 | $ | (4,198) |
See Notes to Schedules of Investments and Financial Statements.
34 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
Janus Growth and Income Fund (unaudited) | Ticker: JAGIX |
Fund Snapshot
This growth fund seeks to create capital appreciation and income through all types of market conditions by leveraging the best ideas of the Janus Research Team.
![(MARC PINTO PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646ppintoma.jpg)
Marc Pinto
portfolio manager
Performance Overview
For the six-month period ended April 30, 2008, Janus Growth and Income Fund returned (11.83)%. The Fund’s primary benchmark, the S&P 500® Index, and its secondary benchmark, the Russell 1000® Growth Index, returned (9.64)% and (9.28)%, respectively.
Economic Overview
Turmoil in the credit markets, uncertainty surrounding the near-term outlook for the U.S. economy and a weaker corporate profit picture made for a volatile and difficult market environment over the past several months. While sentiment toward the end of the period improved and U.S. equity markets finished well above the mid-March lows, stocks were broadly lower during the six-month period ended April 30, 2008.
Additional subprime-related write-offs, slowing consumer spending and a softening labor market, accompanied by record commodity prices and rising inflation expectations, weighed on investor sentiment during the period. Stocks reached their lows in mid-March amid fears that credit conditions could suffer another setback given a deteriorating liquidity position at investment bank Bear Stearns. Prior to that, periodic liquidity injections by the Federal Reserve (Fed) failed to alleviate the stress in the credit markets. Financial markets stabilized somewhat after the Fed aggressively lowered the Federal Funds rate, expanded the collateral it would accept and played an instrumental role in JP Morgan Chase’s purchase of Bear Stearns. In the end, the Fed lowered its target interest rate from 4.50% to 2.00% during the period.
Overall, mid-cap stocks performed better than large- and small-cap stocks, while growth outperformed value stocks. For the broad market all sectors declined with the exception of energy, which turned in a gain for the six-month period amid record crude oil prices. Meanwhile, financials were the worst performing group, suffering from turmoil in the credit markets and larger-than-expected subprime-related write-downs. Information technology was also among the weakest performers while defensive sectors, like consumer staples, posted small declines. Following the March lows, the equity market’s rally at the end of the period can be attributed in part to improving sentiment as investors began to look ahead to a possible economic recovery. Nevertheless, concerns about elevated inflationary pressures, soft consumer spending, the weak housing market and the lingering possibility of more write-downs continued to weigh on the market.
Holdings within Information Technology, Financials and Industrials Detracted from Performance
Main areas of weakness during the period included the information technology, financials and industrials sectors. Within information technology, EMC was the largest detractor from performance during the six-month period. This provider of network storage solutions declined after its majority-owned subsidiary, VMware, provided conservative guidance, which weighed on the price of both stocks. We held onto the position in EMC given our view of the ongoing stability in the core storage business.
Looking at financials, the credit crisis that has dominated the financial markets for months weighed on the stock price of home mortgage provider Fannie Mae during the period. The stock traded lower due to continued weakness in housing and credit markets. We used the weakness to add to our position, as our research indicates that Fannie Mae will likely benefit from the recent reduction in its capital surplus level, as well as improving returns on equity, given the existing difference between mortgage rates and U.S. Treasury yields.
Staying within financials, E*Trade Financial suffered after the company reported large write-downs in its mortgage business. This weakness violated our initial investment thesis on the stock, which was focused on growth in the online brokerage and banking businesses to drive earnings. Given the mortgage losses impacting the company’s future growth prospects, the position was sold.
Within industrials, General Electric (GE) was also negatively impacted by the weakening economy. GE stock fell after reporting weaker-than-expected profits from its GE Capital division due to capital market disruptions and the inability to complete asset sales. Given our cautious outlook on the credit markets, we chose to reduce our exposure to this security.
Other stocks that negatively impacted performance included oil refiner Valero Energy. The stock declined after pre-announcing weaker than expected results due to refining outages caused by equipment issues, which impacted refining margins. We held the position due to the tight
Janus Core, Risk-Managed and Value Funds April 30, 2008 35
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Janus Growth and Income Fund (unaudited)
capacity in the refining sector and operational improvements taking place at the company.
Energy and Materials Sector Holdings Contributed to Performance
The primary sectors that contributed to Fund performance during the period were energy and materials. Hess, a leader in energy exploration and production, was the top contributor to performance for the period. The company benefited from the rising price of oil during the period, as well as increased appreciation for the future production potential from Hess’ new projects, including deep-water projects in the Gulf of Mexico and off the coast of Brazil. We believe that Hess remains undervalued given the potential reserves in these projects.
Staying within energy, Canada-based oil and gas exploration and production company EnCana gained ground in the period, aided by the increase in natural gas prices and news of interesting projects in Alberta, Canada. We maintained exposure to EnCana given, in our view, its attractive production growth profile, driven by its North American natural gas reserves. Furthermore, we have maintained our overweight position in the energy sector given our belief that demand will continue to outstrip supply.
Finally, our agriculture investments have generated positive returns for investors during the six-month period. Most notably, Canadian company Potash Corporation of Saskatchewan generated positive returns, driven by price increases for potash, a key ingredient for fertilizer. We believe the strength of the company’s competitive position can be evidenced by key price increases it has been able to announce with large trading partners like Brazil and southeast Asia.
Similarly, Syngenta, a leader in crop protection and genetically modified seeds, posted solid gains driven by strong sales in Latin America. We believe that the market is in a strong phase of the agriculture cycle right now and that Syngenta is well positioned to benefit from the desire of farmers to maximize crop yields.
Outlook
Looking ahead, we will be paying close attention to the employment picture, the availability of credit and U.S. consumer confidence, among other things. Should the labor market continue to soften amid continued weakness in the housing market, further slowing in consumer spending is likely. While the government stimulus checks could provide a temporary boost, the current de-leveraging of the U.S. economy could take time to complete, possibly lessening the potential for a sharp rebound in economic activity. Inflation remains a concern for the markets as well, given record commodity prices and its recent elevated level. Although inflation is generally a lagging indicator and should ease with slowing economic growth, it deserves attention given its negative impact and the notion that inflation may limit the Fed’s options to further stimulate economic growth.
Although export growth has been strong, helping to offset domestic weakness, and corporate balance sheets are generally healthy, something that has provided support for equity prices, markets are likely to tread cautiously. Nevertheless, we remain committed to our fundamental investment approach in our effort to find opportunities that we believe represent an attractive risk/reward profile. As always, we will continue to emphasize bottom-up company analysis as our primary tool in our quest to add value for shareholders.
Portfolio Positioning
Since taking over the Fund last November, I have worked to reduce the overall risk profile of the portfolio, given signs of economic deceleration. Steps I have taken include reducing the overweight and underweight sector weightings in the portfolio. For example, I have substantially reduced the position in the financials sector. I have also reduced the total number of holdings in the portfolio in order to focus on our highest-conviction ideas in this uncertain environment where we feel our research is truly differentiated. Finally, I have focused the income-related portion of the portfolio on traditional fixed-income holdings like U.S. Treasuries, corporate bonds and select preferred holdings. In summary, while the Fund underperformed the benchmarks for the period, I am pleased with the performance so far in 2008.
Thank you for your investment in Janus Growth and Income Fund.
36 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
(unaudited)
Janus Growth and Income Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Hess Corp. | 1.38% | |||
EnCana Corp. (U.S. Shares) | 0.51% | |||
EOG Resources, Inc. | 0.50% | |||
Apple, Inc. | 0.43% | |||
Samsung Electronics Company, Ltd. (GDR) | 0.40% |
5 Bottom Performers – Holdings
Contribution | ||||
EMC Corp. | (1.28)% | |||
Fannie Mae | (1.20)% | |||
E*TRADE Financial Corp. | (1.04)% | |||
Valero Energy Corp. | (0.74)% | |||
General Electric Co. | (0.72)% |
5 Top Performers – Sectors
Fund Weighting | S&P 500® | |||||||||||
Fund Contribution | (% of Net Assets) | Index Weighting | ||||||||||
Energy | 1.63% | 17.55% | 12.83% | |||||||||
Materials | 0.15% | 2.39% | 3.45% | |||||||||
Consumer Staples | (0.22)% | 14.36% | 10.51% | |||||||||
Telecommunication Services | (0.24)% | 1.71% | 3.46% | |||||||||
Utilities | (0.29)% | 0.78% | 3.63% |
5 Bottom Performers – Sectors
Fund Weighting | S&P 500® | |||||||||||
Fund Contribution | (% of Net Assets) | Index Weighting | ||||||||||
Financials | (3.99)% | 8.35% | 17.59% | |||||||||
Information Technology | (3.35)% | 22.95% | 16.07% | |||||||||
Consumer Discretionary | (1.73)% | 12.33% | 8.67% | |||||||||
Industrials | (1.72)% | 10.54% | 11.71% | |||||||||
Health Care | (1.12)% | 9.04% | 12.09% |
Janus Core, Risk-Managed and Value Funds April 30, 2008 37
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Janus Growth and Income Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2008
Hess Corp. Oil Companies – Integrated | 4.5% | |||
EnCana Corp. (U.S. Shares) Oil Companies – Exploration and Production | 3.7% | |||
CVS/Caremark Corp. Retail – Drug Store | 3.1% | |||
American Express Co. Finance – Credit Card | 2.9% | |||
InBev N.V. Brewery | 2.3% | |||
16.5% |
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19p07.gif)
Emerging markets comprised 4.7% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19t07.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19c07.gif)
38 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19m07.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratio – for the fiscal year ended October 31, 2007 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Growth and Income Fund | (11.83)% | (2.40)% | 10.62% | 6.10% | 12.34% | 0.87% | |||||||
S&P 500® Index | (9.64)% | (4.68)% | 10.62% | 3.89% | 10.30% | ||||||||
Russell 1000® Growth Index | (9.28)% | (0.23)% | 9.52% | 1.66% | 8.66% | ||||||||
Lipper Quartile | – | 2nd | 2nd | 1st | 1st | ||||||||
Lipper Ranking – based on total return for Large-Cap Core Funds | – | 245/822 | 163/575 | 22/299 | 4/74 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.) All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund’s performance may be affected by risks that include those associated with undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and other details.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
May 16, 1991 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – May 15, 1991 |
Janus Core, Risk-Managed and Value Funds April 30, 2008 39
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Janus Growth and Income Fund (unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 881.70 | $ | 4.02 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.59 | $ | 4.32 | ||||||||
†Expenses are equal to the annualized expense ratio of 0.86%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period).
40 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
Janus Growth and Income Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares/Principal/Contract Amounts | Value | |||||||
Common Stock – 89.3% | ||||||||
Advertising Sales – 0.6% | ||||||||
804,645 | Lamar Advertising Co. – Class A*,# | $ | 31,815,663 | |||||
Aerospace and Defense – 2.3% | ||||||||
954,951 | BAE Systems PLC | 8,803,770 | ||||||
778,855 | Boeing Co. | 66,093,635 | ||||||
1,366,590 | Embraer-Empresa Brasileira de Aeronautica S.A. (ADR)# | 56,959,471 | ||||||
131,856,876 | ||||||||
Agricultural Chemicals – 2.3% | ||||||||
232,855 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 42,833,677 | ||||||
1,493,080 | Syngenta A.G. (ADR)**,# | 88,360,475 | ||||||
131,194,152 | ||||||||
Agricultural Operations – 0.4% | ||||||||
542,524 | Archer-Daniels-Midland Co. | 23,903,607 | ||||||
Apparel Manufacturers – 1.1% | ||||||||
5,122,475 | Esprit Holdings, Ltd. | 63,128,391 | ||||||
Applications Software – 2.7% | ||||||||
916,707 | Infosys Technologies, Ltd. | 39,610,035 | ||||||
3,266,090 | Microsoft Corp. | 93,148,887 | ||||||
2,148,918 | Satyam Computer Services, Ltd. | 25,550,945 | ||||||
158,309,867 | ||||||||
Athletic Footwear – 0.5% | ||||||||
465,560 | NIKE, Inc. – Class B | 31,099,408 | ||||||
Audio and Video Products – 0.4% | ||||||||
465,625 | Sony Corp. (ADR) | 21,320,969 | ||||||
Automotive – Cars and Light Trucks – 0.8% | ||||||||
851,135 | BMW A.G.**,# | 46,586,082 | ||||||
Beverages – Non-Alcoholic – 0.5% | ||||||||
465,625 | Coca-Cola Co. | 27,411,344 | ||||||
Brewery – 2.3% | ||||||||
1,633,048 | InBev N.V.**,# | 134,514,882 | ||||||
Casino Hotels – 0.8% | ||||||||
1,555,964 | Crown, Ltd. | 16,054,573 | ||||||
629,319 | MGM Mirage*,# | 32,189,667 | ||||||
48,244,240 | ||||||||
Commercial Services – Finance – 0.9% | ||||||||
2,350,490 | Western Union Co. | 54,061,270 | ||||||
Computers – 2.2% | ||||||||
582,159 | Apple, Inc.* | 101,266,558 | ||||||
232,865 | Research In Motion, Ltd. (U.S. Shares)* | 28,323,370 | ||||||
129,589,928 | ||||||||
Computers – Integrated Systems – 0.2% | ||||||||
2,527,630 | Bank Tec (144A)*, º º,§,£ | 8,846,705 | ||||||
Computers – Memory Devices – 2.1% | ||||||||
7,952,205 | EMC Corp.* | 122,463,957 | ||||||
Cosmetics and Toiletries – 2.4% | ||||||||
1,396,360 | Avon Products, Inc. | 54,485,967 | ||||||
1,273,110 | Procter & Gamble Co. | 85,362,026 | ||||||
139,847,993 | ||||||||
Diversified Operations – 3.6% | ||||||||
5,700,000 | China Merchants Holdings International Company, Ltd. | 29,091,746 | ||||||
466,615 | Danaher Corp.# | 36,405,302 | ||||||
2,721,926 | General Electric Co. | 89,006,979 | ||||||
18,748,000 | Melco International Development, Ltd. | 25,719,086 | ||||||
232,855 | Siemens A.G.** | 27,592,180 | ||||||
207,815,293 | ||||||||
E-Commerce/Services – 0.9% | ||||||||
955,165 | eBay, Inc.* | 29,887,113 | ||||||
1,397,110 | Liberty Media Corp. – Interactive – Class A* | 21,138,274 | ||||||
51,025,387 | ||||||||
Electronic Components – Semiconductors – 3.3% | ||||||||
294,711 | Samsung Electronics Company, Ltd. (GDR) | 104,015,039 | ||||||
2,890,583 | Texas Instruments, Inc. | 84,289,400 | ||||||
188,304,439 | ||||||||
Energy – Alternate Sources – 0.9% | ||||||||
526,920 | JA Solar Holdings Company, Ltd. (ADR)*,# | 12,651,349 | ||||||
922,605 | Suntech Power Holdings Company, Ltd. (ADR)*,# | 41,268,122 | ||||||
53,919,471 | ||||||||
Enterprise Software/Services – 1.7% | ||||||||
4,657,170 | Oracle Corp.* | 97,101,995 | ||||||
Entertainment Software – 0.8% | ||||||||
932,557 | Electronic Arts, Inc.* | 47,998,709 | ||||||
Finance – Credit Card – 2.9% | ||||||||
3,498,795 | American Express Co. | 168,012,136 | ||||||
Finance – Investment Bankers/Brokers – 2.3% | ||||||||
235,150 | Goldman Sachs Group, Inc. | 45,000,656 | ||||||
1,791,910 | JP Morgan Chase & Co. | 85,384,511 | ||||||
130,385,167 | ||||||||
Finance – Mortgage Loan Banker – 1.5% | ||||||||
3,070,030 | Fannie Mae | 86,881,849 | ||||||
Food – Canned – 0.3% | ||||||||
857,113 | TreeHouse Foods, Inc.*,# | 19,430,752 | ||||||
Food – Miscellaneous/Diversified – 2.3% | ||||||||
278,227 | Nestle S.A.** | 133,321,525 | ||||||
Forestry – 0.5% | ||||||||
443,165 | Weyerhaeuser Co. | 28,309,380 | ||||||
Hotels and Motels – 1.0% | ||||||||
1,117,425 | Starwood Hotels & Resorts Worldwide, Inc.# | 58,340,759 | ||||||
Instruments – Controls – 0.3% | ||||||||
702,847 | Watts Water Technologies, Inc. – Class A# | 18,885,499 | ||||||
Medical – Biomedical and Genetic – 0.5% | ||||||||
465,470 | Celgene Corp.*,# | 28,924,306 | ||||||
Medical – Drugs – 3.9% | ||||||||
1,872,410 | Merck & Company, Inc. | 71,226,476 | ||||||
733,542 | Roche Holding A.G.** | 122,178,449 | ||||||
698,115 | Wyeth | 31,045,174 | ||||||
224,450,099 | ||||||||
Medical – HMO – 1.1% | ||||||||
1,434,980 | Coventry Health Care, Inc.* | 64,186,655 |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2008 41
Table of Contents
Janus Growth and Income Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares/Principal/Contract Amounts | Value | |||||||
Medical Instruments – 0.7% | ||||||||
884,548 | Medtronic, Inc. | $ | 43,059,797 | |||||
Medical Products – 0.3% | ||||||||
466,435 | Nobel Biocare Holding A.G.**,# | 16,860,556 | ||||||
Multimedia – 0.7% | ||||||||
2,104,775 | News Corporation, Inc. – Class B# | 38,938,338 | ||||||
Networking Products – 0.4% | ||||||||
830,710 | Cisco Systems, Inc.* | 21,299,404 | ||||||
Oil Companies – Exploration and Production – 5.3% | ||||||||
2,650,399 | EnCana Corp. (U.S. Shares) | 214,178,742 | ||||||
706,175 | EOG Resources, Inc. | 92,141,714 | ||||||
306,320,456 | ||||||||
Oil Companies – Integrated – 8.6% | ||||||||
1,302,960 | Exxon Mobil Corp. | 121,266,487 | ||||||
2,456,490 | Hess Corp.# | 260,879,237 | ||||||
1,004,244 | Suncor Energy, Inc. | 113,361,473 | ||||||
495,507,197 | ||||||||
Oil Refining and Marketing – 1.8% | ||||||||
2,107,456 | Valero Energy Corp. | 102,949,226 | ||||||
Optical Supplies – 1.5% | ||||||||
558,855 | Alcon, Inc. (U.S. Shares)** | 88,299,090 | ||||||
Real Estate Operating/Development – 0.5% | ||||||||
7,157,175 | Hang Lung Properties, Ltd. | 29,157,636 | ||||||
Retail – Apparel and Shoe – 1.7% | ||||||||
2,749,610 | Nordstrom, Inc.# | 96,951,249 | ||||||
Retail – Drug Store – 3.1% | ||||||||
4,470,865 | CVS/Caremark Corp. | 180,488,820 | ||||||
Retail – Jewelry – 1.3% | ||||||||
1,765,210 | Tiffany & Co. | 76,857,243 | ||||||
Retail – Pet Food and Supplies – 0.4% | ||||||||
984,665 | PETsMART, Inc.# | 22,036,803 | ||||||
Semiconductor Equipment – 0.9% | ||||||||
1,193,895 | KLA-Tencor Corp. | 52,149,334 | ||||||
Soap and Cleaning Preparations – 0.9% | ||||||||
930,951 | Reckitt Benckiser PLC | 54,236,938 | ||||||
Telecommunication Equipment – Fiber Optics – 2.2% | ||||||||
4,648,803 | Corning, Inc. | 124,169,528 | ||||||
Telecommunication Services – 0.8% | ||||||||
2,039,930 | Bharti Tele-Ventures, Ltd.* | 45,349,661 | ||||||
Television – 1.3% | ||||||||
6,808,327 | British Sky Broadcasting Group PLC | 73,432,271 | ||||||
Tobacco – 2.4% | ||||||||
2,441,140 | Altria Group, Inc. | 48,822,800 | ||||||
1,717,920 | Philip Morris International, Inc.* | 87,665,458 | ||||||
136,488,258 | ||||||||
Transportation – Services – 0.4% | ||||||||
342,480 | United Parcel Service, Inc. – Class B | 24,798,977 | ||||||
Water – 0.3% | ||||||||
943,275 | Aqua America, Inc.# | 17,384,558 | ||||||
Web Portals/Internet Service Providers – 1.3% | ||||||||
134,988 | Google, Inc. – Class A* | 77,522,259 | ||||||
Wireless Equipment – 2.2% | ||||||||
2,836,905 | Nokia Oyj (ADR)**,# | 85,305,734 | ||||||
939,060 | QUALCOMM, Inc. | 40,558,001 | ||||||
125,863,735 | ||||||||
Total Common Stock (cost $4,417,555,619) | 5,161,610,089 | |||||||
Corporate Bonds – 0.5% | ||||||||
Energy – Alternate Sources – 0.5% | ||||||||
$ | 23,328,000 | Suntech Power Holdings Co., convertible, 3.00%, due 3/15/13 (144A) (cost $23,328,000) | 30,501,360 | |||||
Preferred Stock – 1.4% | ||||||||
Finance – Investment Bankers/Brokers – 0.1% | ||||||||
233,300 | Citigroup, Inc., 8.125% | 5,914,155 | ||||||
Metal – Diversified – 0.6% | ||||||||
196,775 | Freeport-McMoRan Copper & Gold, Inc. convertible, 6.75% | 32,062,519 | ||||||
U.S. Government Agencies – 0.7% | ||||||||
930,755 | Fannie Mae, 8.25%# | 23,306,105 | ||||||
727,175 | Freddie Mac, 8.375% | 18,615,680 | ||||||
41,921,785 | ||||||||
Total Preferred Stock (cost $67,653,186) | 79,898,459 | |||||||
U.S. Treasury Bonds – 1.0% | ||||||||
$ | 56,494,000 | U.S. Treasury Bonds, 3.25% due 12/31/09# (cost $57,306,331) | 57,442,930 | |||||
Purchased Options – Calls – 0.9% | ||||||||
12,922 | ConocoPhillips (LEAPS) expires January 2009 exercise price $70.00 | 23,776,480 | ||||||
20,242 | CVS/Caremark Corp. (LEAPS) expires January 2010 exercise price $35.00 | 19,047,925 | ||||||
12,156 | Nordstrom, Inc. (LEAPS) expires January 2010 exercise price $40.00 | 7,236,102 | ||||||
12,128 | Texas Instruments, Inc. (LEAPS) expires January 2010 exercise price $35.00 | 2,988,339 | ||||||
Total Purchased Options – Calls (premiums paid $61,557,753) | 53,048,846 | |||||||
Money Markets – 6.5% | ||||||||
258,646,081 | Janus Institutional Cash Management Fund – Institutional Shares, 2.82% | 258,646,081 | ||||||
117,184,230 | Janus Institutional Money Market Fund – Institutional Shares, 2.74% | 117,184,230 | ||||||
Total Money Markets (cost $375,830,311) | 375,830,311 | |||||||
Other Securities – 8.0% | ||||||||
101,039,113 | Allianz Dresdner Daily Asset Fund† | 101,039,113 | ||||||
89,160,261 | Repurchase Agreements† | 89,160,261 | ||||||
272,472,000 | Time Deposits† | 272,472,000 | ||||||
Total Other Securities (cost $462,671,374) | 462,671,374 | |||||||
Total Investments (total cost $5,465,902,574) – 107.6% | 6,221,003,369 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (7.6)% | (439,106,783) | |||||||
Net Assets – 100% | $ | 5,781,896,586 | ||||||
See Notes to Schedules of Investments and Financial Statements.
42 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Australia | $ | 16,054,573 | 0.3% | |||||
Belgium | 134,514,882 | 2.2% | ||||||
Bermuda | 63,128,391 | 1.0% | ||||||
Brazil | 56,959,471 | 0.9% | ||||||
Canada | 398,697,263 | 6.4% | ||||||
Cayman Islands | 53,919,471 | 0.9% | ||||||
Finland | 85,305,733 | 1.4% | ||||||
Germany | 74,178,262 | 1.2% | ||||||
Hong Kong | 83,968,467 | 1.3% | ||||||
India | 110,510,642 | 1.8% | ||||||
Japan | 21,320,969 | 0.3% | ||||||
South Korea | 104,015,039 | 1.7% | ||||||
Switzerland | 449,020,095 | 7.2% | ||||||
United Kingdom | 136,472,979 | 2.2% | ||||||
United States†† | 4,432,937,132 | 71.2% | ||||||
Total | $ | 6,221,003,369 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (57.8% excluding Short-Term Securities and Other Securities) |
Forward Currency Contracts, Open
Currency Sold and | Currency | Currency | Unrealized | |||||||||
Settlement Date | Units Sold | Value in U.S. $ | Gain/(Loss) | |||||||||
Euro 5/14/08 | 4,500,000 | $ | 7,023,070 | $ | (628,683) | |||||||
Euro 10/23/08 | 27,900,000 | 43,192,445 | (131,585) | |||||||||
Euro 11/12/08 | 25,500,000 | 39,440,524 | 29,906 | |||||||||
Swiss Franc 8/14/08 | 26,300,000 | 25,412,317 | (1,497,139) | |||||||||
Swiss Franc 10/23/08 | 31,850,000 | 30,772,052 | (135,269) | |||||||||
Swiss Franc 11/12/08 | 57,000,000 | 55,069,283 | (60,066) | |||||||||
Total | $ | 200,909,691 | $ | (2,422,836) |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2008 43
Table of Contents
INTECH Risk-Managed Stock Fund (unaudited) | Ticker: JRMSX |
Fund Snapshot
This core fund embraces the market’s natural volatility in an attempt to deliver index-beating returns with index-like risk.
Managed by INTECH
Performance Overview
For the six-month period ended April 30, 2008, INTECH Risk-Managed Stock Fund returned (8.84)%. This compares to the (9.64)% return posted by the S&P 500® Index, the Fund’s benchmark.
Investment Strategy in This Environment
While INTECH does not employ fundamental analysis in the management of the Fund, fundamentals can have a significant impact on the general direction of the market in which we participate. The Fund’s goal is to produce long-term returns in excess of its benchmark with an equal or lesser amount of risk.
The Fund’s mathematical investment process seeks to build a more efficient portfolio than its benchmark, the S&P 500® Index. With a focus on risk management, investment decisions are governed by a mathematical investment process. The process does not attempt to predict the direction of the market, nor does it have a particular view of any company in the Fund.
Performance Review
As stock prices moved naturally throughout the period, we continued to implement our mathematical process in a disciplined manner in an effort to maintain a more efficient portfolio than the Index, without increasing relative risk. While other factors may influence performance over the short term, we believe that the consistent application of our process will help the Fund perform well over the long term.
In INTECH’s history, which spans more than 20 years, we have experienced six-month periods of similar magnitude in terms of both underperformance and outperformance. From our perspective, the key is to keep periods of underperformance both short in duration and mild in scope. INTECH aims to achieve its targeted returns over the long term and we believe the Fund remains well positioned for long-term capital growth.
Investment Strategy and Outlook
INTECH’s mathematical, risk-managed investment process seeks to outperform the S&P 500® Index over the long term, while attempting to control risk. We will continue implementing the process in a disciplined and deliberate manner in an effort to achieve our long-term performance goals. The Fund may underperform during shorter time periods, but has the goal of outperformance over a three- to five-year period. Managing risk remains essential to the investment process. We will continue to make marginal improvements to the mathematical process, seeking an efficient portfolio that offers better long-term results than the benchmark, regardless of the market’s direction.
Thank you for your investment in INTECH Risk-Managed Stock Fund.
44 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
(unaudited)
INTECH Risk-Managed Stock Fund At A Glance
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2008
Exxon Mobil Corp. Oil Companies – Integrated | 4.8% | |||
AT&T, Inc. Telephone – Integrated | 3.9% | |||
General Electric Co. Diversified Operations | 3.4% | |||
Merck & Company, Inc. Medical – Drugs | 2.4% | |||
Procter & Gamble Co. Cosmetics and Toiletries | 2.2% | |||
16.7% |
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19p02.gif)
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19t02.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19c02.gif)
Janus Core, Risk-Managed and Value Funds April 30, 2008 45
Table of Contents
INTECH Risk-Managed Stock Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19m02.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratio – for the fiscal year ended October 31, 2007 | ||||||||||
Fiscal | One | Five | Since | Total Annual Fund | |||||||
Year-to-Date | Year | Year | Inception* | Operating Expenses | |||||||
INTECH Risk-Managed Stock Fund | (8.84)% | (5.47)% | 12.42% | 13.41% | 0.78% | ||||||
S&P 500® Index | (9.64)% | (4.68)% | 10.62% | 12.17% | |||||||
Lipper Quartile | – | 3rd | 2nd | 2nd | |||||||
Lipper Ranking – based on total return for Multi-Cap Core Funds | – | 540/863 | 150/498 | 172/497 | |||||||
Visit janus.com to view current performance and characteristic information | |||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The Fund has a performance-based management fee that adjusts up or down based on the Fund’s performance relative to an approved benchmark index over a performance measurement period.
A 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
The voluntary waiver of the Fund’s management fee terminated June 25, 2004. Without such waivers, total returns from inception to June 25, 2004 would have been lower.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.) All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
46 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
(unaudited)
The proprietary mathematical process used by Enhanced Investment Technologies, LLC (“INTECH”) may not achieve the desired results. Since the portfolio is regularly re-balanced, this may result in a higher portfolio turnover rate, higher expenses and potentially higher net taxable gains or losses compared to a “buy and hold” or index fund strategy.
The Fund’s performance may be affected by risks that include those associated with investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and details.
Funds that invest in Real Estate Investment Trusts (REITs) may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: legal, political, liquidity, interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Funds invest in foreign REITs, the Funds may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
There is no assurance the stated objective(s) will be met.
See Notes to Schedules of Investments for index definitions.
The weighting of securities within the portfolio may differ significantly from the weightings within the index. The index is unmanaged and is not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – February 28, 2003 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 911.60 | $ | 3.28 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.43 | $ | 3.47 | ||||||||
†Expenses are equal to the annualized expense ratio of 0.69%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period).
Janus Core, Risk-Managed and Value Funds April 30, 2008 47
Table of Contents
INTECH Risk-Managed Stock Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Common Stock – 99.8% | ||||||||
Advertising Agencies – 0% | ||||||||
2,700 | Omnicom Group, Inc. | $ | 128,898 | |||||
Aerospace and Defense – 2.7% | ||||||||
29,400 | Boeing Co. | 2,494,884 | ||||||
17,900 | General Dynamics Corp. | 1,618,518 | ||||||
47,000 | Lockheed Martin Corp. | 4,983,880 | ||||||
8,000 | Northrop Grumman Corp. | 588,560 | ||||||
13,500 | Raytheon Co. | 863,595 | ||||||
10,549,437 | ||||||||
Aerospace and Defense – Equipment – 1.1% | ||||||||
33,900 | B.F. Goodrich Co. | 2,310,285 | ||||||
27,000 | United Technologies Corp. | 1,956,690 | ||||||
4,266,975 | ||||||||
Agricultural Chemicals – 0.3% | ||||||||
11,100 | Monsanto Co. | 1,265,622 | ||||||
Agricultural Operations – 0% | ||||||||
1,700 | Archer-Daniels-Midland Co. | 74,902 | ||||||
Airlines – 0.1% | ||||||||
21,200 | Southwest Airlines Co. | 280,688 | ||||||
Apparel Manufacturers – 0.4% | ||||||||
22,100 | VF Corp. | 1,643,798 | ||||||
Appliances – 0.1% | ||||||||
3,100 | Whirlpool Corp. | 225,618 | ||||||
Applications Software – 1.3% | ||||||||
9,700 | Citrix Systems, Inc.* | 317,675 | ||||||
10,600 | Compuware Corp.* | 79,924 | ||||||
25,000 | Intuit, Inc.* | 674,250 | ||||||
137,100 | Microsoft Corp. | 3,910,092 | ||||||
4,981,941 | ||||||||
Athletic Footwear – 0.4% | ||||||||
22,400 | NIKE, Inc. – Class B | 1,496,320 | ||||||
Automotive – Cars and Light Trucks – 0.6% | ||||||||
15,700 | Ford Motor Co.*,# | 129,682 | ||||||
90,200 | General Motors Corp.# | 2,092,640 | ||||||
2,222,322 | ||||||||
Automotive – Medium and Heavy Duty Trucks – 0.4% | ||||||||
34,500 | PACCAR, Inc.# | 1,632,540 | ||||||
Automotive – Truck Parts and Equipment – Original – 0.7% | ||||||||
81,500 | Johnson Controls, Inc. | 2,873,690 | ||||||
Beverages – Non-Alcoholic – 4.3% | ||||||||
124,500 | Coca-Cola Co. | 7,329,315 | ||||||
101,700 | Coca-Cola Enterprises, Inc. | 2,288,250 | ||||||
46,600 | Pepsi Bottling Group, Inc. | 1,570,886 | ||||||
80,100 | PepsiCo, Inc. | 5,489,253 | ||||||
16,677,704 | ||||||||
Beverages – Wine and Spirits – 0.8% | ||||||||
26,600 | Brown-Forman Corp. – Class B | 1,809,332 | ||||||
66,100 | Constellation Brands, Inc. – Class A* | 1,213,596 | ||||||
3,022,928 | ||||||||
Brewery – 0.2% | ||||||||
10,200 | Molson Coors Brewing Co. – Class B | 559,368 | ||||||
Broadcast Services and Programming – 0.3% | ||||||||
41,800 | Clear Channel Communications, Inc. | 1,260,270 | ||||||
Building – Residential and Commercial – 0.4% | ||||||||
17,500 | Centex Corp. | 364,350 | ||||||
19,000 | D.R. Horton, Inc. | 294,310 | ||||||
9,400 | KB Home | 211,500 | ||||||
48,200 | Pulte Homes, Inc. | 628,528 | ||||||
1,498,688 | ||||||||
Building Products – Air and Heating – 0% | ||||||||
1,100 | Trane, Inc. | 51,161 | ||||||
Cable Television – 0.9% | ||||||||
92,300 | Comcast Corp. – Class A | 1,896,765 | ||||||
60,300 | DIRECTV Group, Inc.* | 1,485,792 | ||||||
3,382,557 | ||||||||
Casino Services – 0% | ||||||||
3,900 | International Game Technology | 135,486 | ||||||
Chemicals – Diversified – 0.5% | ||||||||
2,400 | Dow Chemical Co. | 96,360 | ||||||
32,800 | PPG Industries, Inc. | 2,012,936 | ||||||
2,109,296 | ||||||||
Chemicals – Specialty – 0.4% | ||||||||
13,900 | Ecolab, Inc. | 638,844 | ||||||
900 | International Flavors & Fragrances, Inc. | 41,049 | ||||||
16,800 | Sigma-Aldrich Corp. | 957,936 | ||||||
1,637,829 | ||||||||
Coal – 0.2% | ||||||||
10,500 | CONSOL Energy, Inc. | 850,080 | ||||||
1,600 | Peabody Energy Corp. | 97,808 | ||||||
947,888 | ||||||||
Coatings and Paint Products – 0% | ||||||||
200 | Sherwin-Williams Co. | 11,064 | ||||||
Commercial Banks – 0.7% | ||||||||
29,600 | BB&T Corp.# | 1,014,984 | ||||||
8,800 | M&T Bank Corp. | 820,424 | ||||||
30,100 | Marshall & Ilsley Corp. | 751,898 | ||||||
2,587,306 | ||||||||
Commercial Services – Finance – 0.2% | ||||||||
4,900 | Equifax, Inc. | 187,523 | ||||||
26,900 | H&R Block, Inc. | 588,303 | ||||||
775,826 | ||||||||
Computer Aided Design – 0% | ||||||||
2,700 | Autodesk, Inc.* | 102,600 | ||||||
Computers – 4.0% | ||||||||
24,900 | Apple, Inc.* | 4,331,355 | ||||||
48,700 | Dell, Inc.* | 907,281 | ||||||
126,400 | Hewlett-Packard Co. | 5,858,640 | ||||||
36,000 | IBM Corp. | 4,345,200 | ||||||
15,442,476 | ||||||||
Computers – Integrated Systems – 0% | ||||||||
1,500 | Terdata Corp.* | 31,935 | ||||||
Computers – Memory Devices – 0.6% | ||||||||
142,800 | EMC Corp.* | 2,199,120 | ||||||
3,700 | SanDisk Corp.* | 100,233 | ||||||
2,299,353 | ||||||||
See Notes to Schedules of Investments and Financial Statements.
48 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Consumer Products – Miscellaneous – 0.1% | ||||||||
3,200 | Fortune Brands, Inc. | $ | 216,384 | |||||
2,000 | Kimberly-Clark Corp. | 127,980 | ||||||
344,364 | ||||||||
Containers – Metal and Glass – 0% | ||||||||
2,300 | Ball Corp. | 123,694 | ||||||
Cosmetics and Toiletries – 3.2% | ||||||||
7,900 | Avon Products, Inc. | 308,258 | ||||||
50,200 | Colgate-Palmolive Co. | 3,549,140 | ||||||
126,587 | Procter & Gamble Co. | 8,487,658 | ||||||
12,345,056 | ||||||||
Cruise Lines – 0% | ||||||||
1,900 | Carnival Corp. (U.S. Shares) | 76,323 | ||||||
Data Processing and Management – 0% | ||||||||
4,600 | Fidelity National Information Services, Inc. | 165,876 | ||||||
Dental Supplies and Equipment – 0.1% | ||||||||
16,000 | Patterson Companies, Inc.* | 547,200 | ||||||
Disposable Medical Products – 0% | ||||||||
900 | C.R. Bard, Inc. | 84,753 | ||||||
Distribution/Wholesale – 0% | ||||||||
1,900 | W.W. Grainger, Inc. | 164,749 | ||||||
Diversified Operations – 7.2% | ||||||||
25,700 | 3M Co. | 1,976,330 | ||||||
15,500 | Cooper Industries, Ltd. – Class A | 657,045 | ||||||
5,500 | Danaher Corp. | 429,110 | ||||||
2,000 | Dover Corp. | 98,940 | ||||||
2,400 | Eaton Corp. | 210,816 | ||||||
411,400 | General Electric Co. | 13,452,780 | ||||||
61,800 | Honeywell International, Inc. | 3,670,920 | ||||||
12,400 | Illinois Tool Works, Inc. | 648,396 | ||||||
52,500 | Ingersoll-Rand Co. – Class A# | 2,329,950 | ||||||
1,500 | ITT Corp. | 96,000 | ||||||
52,400 | Leucadia National Corp.# | 2,683,928 | ||||||
2,400 | Parker Hannifin Corp. | 191,640 | ||||||
29,800 | Textron, Inc. | 1,818,098 | ||||||
28,263,953 | ||||||||
Drug Delivery Systems – 0.1% | ||||||||
4,300 | Hospira, Inc.* | 176,945 | ||||||
E-Commerce/Products – 1.0% | ||||||||
49,800 | Amazon.com, Inc.* | 3,915,774 | ||||||
E-Commerce/Services – 0.1% | ||||||||
17,900 | Expedia, Inc.* | 452,154 | ||||||
Electric – Integrated – 6.4% | ||||||||
6,100 | Allegheny Energy, Inc. | 328,180 | ||||||
27,400 | Ameren Corp. | 1,242,864 | ||||||
33,500 | American Electric Power Company, Inc. | 1,495,105 | ||||||
30,300 | Constellation Energy Group, Inc. | 2,564,895 | ||||||
11,700 | Edison International | 610,389 | ||||||
35,900 | Entergy Corp. | 4,123,474 | ||||||
5,200 | Exelon Corp. | 444,496 | ||||||
22,800 | FirstEnergy Corp. | 1,724,592 | ||||||
66,400 | FPL Group, Inc. | 4,401,656 | ||||||
10,700 | PG&E Corp. | 428,000 | ||||||
99,700 | PPL Corp. | 4,787,594 | ||||||
56,900 | Public Service Enterprise Group, Inc. | 2,498,479 | ||||||
7,200 | Southern Co. | 268,056 | ||||||
24,917,780 | ||||||||
Electric Products – Miscellaneous – 0.1% | ||||||||
3,300 | Emerson Electric Co. | 172,458 | ||||||
7,800 | Molex, Inc. | 221,364 | ||||||
393,822 | ||||||||
Electronic Components – Semiconductors – 1.6% | ||||||||
86,900 | Advanced Micro Devices, Inc.*,# | 517,924 | ||||||
7,100 | Altera Corp. | 151,088 | ||||||
125,500 | Intel Corp. | 2,793,630 | ||||||
9,200 | MEMC Electronic Materials, Inc.* | 579,324 | ||||||
1,500 | Microchip Technology, Inc.# | 55,125 | ||||||
89,000 | Micron Technology, Inc.* | 687,080 | ||||||
4,400 | National Semiconductor Corp. | 89,716 | ||||||
7,700 | NVIDIA Corp.* | 158,235 | ||||||
39,300 | Texas Instruments, Inc. | 1,145,988 | ||||||
6,178,110 | ||||||||
Electronics – Military – 0.2% | ||||||||
6,000 | L-3 Communications Holdings, Inc. | 668,700 | ||||||
Engineering – Research and Development Services – 1.0% | ||||||||
12,000 | Fluor Corp. | 1,834,440 | ||||||
23,400 | Jacobs Engineering Group, Inc.* | 2,020,122 | ||||||
3,854,562 | ||||||||
Engines – Internal Combustion – 0.6% | ||||||||
38,500 | Cummins, Inc. | 2,412,025 | ||||||
Enterprise Software/Services – 0.7% | ||||||||
2,400 | BMC Software, Inc.* | 83,424 | ||||||
134,942 | Oracle Corp.* | 2,813,541 | ||||||
2,896,965 | ||||||||
Entertainment Software – 0.1% | ||||||||
4,100 | Electronic Arts, Inc.* | 211,027 | ||||||
Fiduciary Banks – 0.3% | ||||||||
17,400 | Northern Trust Corp. | 1,289,514 | ||||||
Filtration and Separations Products – 0% | ||||||||
4,300 | Pall Corp. | 149,511 | ||||||
Finance – Consumer Loans – 0.2% | ||||||||
40,700 | SLM Corp. | 754,171 | ||||||
Finance – Credit Card – 0.1% | ||||||||
4,000 | American Express Co. | 192,080 | ||||||
Finance – Investment Bankers/Brokers – 1.0% | ||||||||
14,900 | Charles Schwab Corp. | 321,840 | ||||||
69,900 | Citigroup, Inc. | 1,766,373 | ||||||
4,900 | Goldman Sachs Group, Inc. | 937,713 | ||||||
12,000 | JP Morgan Chase & Co. | 571,800 | ||||||
4,000 | Lehman Brothers Holdings, Inc. | 176,960 | ||||||
3,774,686 | ||||||||
Finance – Mortgage Loan Banker – 0.3% | ||||||||
25,000 | Fannie Mae | 707,500 | ||||||
19,100 | Freddie Mac | 475,781 | ||||||
1,183,281 | ||||||||
Finance – Other Services – 0.3% | ||||||||
1,500 | CME Group, Inc. | 686,175 | ||||||
1,600 | IntercontinentalExchange, Inc.* | 248,240 | ||||||
2,200 | NYSE Euronext | 145,420 | ||||||
1,079,835 | ||||||||
Financial Guarantee Insurance – 0.1% | ||||||||
51,900 | MBIA, Inc.# | 539,760 | ||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2008 49
Table of Contents
INTECH Risk-Managed Stock Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Food – Confectionary – 0.2% | ||||||||
10,800 | Wm. Wrigley Jr. Co.# | $ | 822,528 | |||||
Food – Meat Products – 0.2% | ||||||||
42,400 | Tyson Foods, Inc. – Class A | 754,720 | ||||||
Food – Miscellaneous/Diversified – 1.0% | ||||||||
2,700 | ConAgra Foods, Inc. | 63,612 | ||||||
6,100 | General Mills, Inc. | 368,440 | ||||||
21,300 | H.J. Heinz Co. | 1,001,739 | ||||||
32,700 | Kellogg Co. | 1,673,259 | ||||||
23,200 | Kraft Foods, Inc. – Class A | 733,816 | ||||||
3,840,866 | ||||||||
Food – Retail – 1.7% | ||||||||
117,500 | Kroger Co.# | 3,201,875 | ||||||
41,500 | Safeway, Inc. | 1,311,400 | ||||||
24,100 | Supervalu, Inc. | 797,710 | ||||||
45,400 | Whole Foods Market, Inc.# | 1,481,856 | ||||||
6,792,841 | ||||||||
Food – Wholesale/Distribution – 0.1% | ||||||||
12,000 | Sysco Corp. | 366,840 | ||||||
Forestry – 0.1% | ||||||||
10,300 | Plum Creek Timber Company, Inc. | 420,652 | ||||||
1,700 | Weyerhaeuser Co. | 108,596 | ||||||
529,248 | ||||||||
Gas – Distribution – 0% | ||||||||
1,600 | Sempra Energy Co. | 90,672 | ||||||
Gold Mining – 0% | ||||||||
1,900 | Newmont Mining Corp. | 83,999 | ||||||
Home Decoration Products – 0% | ||||||||
3,500 | Newell Rubbermaid, Inc. | 71,855 | ||||||
Hotels and Motels – 0.1% | ||||||||
8,400 | Wyndham Worldwide Corp. | 180,432 | ||||||
Human Resources – 0% | ||||||||
3,900 | Robert Half International, Inc. | 92,430 | ||||||
Industrial Automation and Robotics – 0.2% | ||||||||
10,500 | Rockwell Automation, Inc. | 569,415 | ||||||
Industrial Gases – 0.7% | ||||||||
14,800 | Air Products and Chemicals, Inc. | 1,456,764 | ||||||
15,300 | Praxair, Inc. | 1,397,043 | ||||||
2,853,807 | ||||||||
Instruments – Scientific – 1.0% | ||||||||
29,500 | Applera Corp. – Applied Biosystems Group | 941,345 | ||||||
7,600 | PerkinElmer, Inc. | 201,856 | ||||||
45,400 | Thermo Fisher Scientific, Inc.* | 2,627,298 | ||||||
3,900 | Waters Corp.* | 239,694 | ||||||
4,010,193 | ||||||||
Insurance Brokers – 0% | ||||||||
2,300 | Aon Corp. | 104,397 | ||||||
Internet Security – 0.4% | ||||||||
63,100 | Symantec Corp.* | 1,086,582 | ||||||
13,800 | VeriSign, Inc.* | 497,490 | ||||||
1,584,072 | ||||||||
Investment Companies – 0% | ||||||||
2,700 | American Capital Strategies, Ltd. | 85,725 | ||||||
Investment Management and Advisory Services – 0.3% | ||||||||
5,900 | Federated Investors, Inc. – Class B | 197,532 | ||||||
800 | Franklin Resources, Inc. | 76,120 | ||||||
12,500 | T. Rowe Price Group, Inc. | 732,000 | ||||||
1,005,652 | ||||||||
Life and Health Insurance – 0.8% | ||||||||
21,000 | Aflac, Inc. | 1,400,070 | ||||||
7,600 | Principal Financial Group, Inc. | 407,816 | ||||||
8,200 | Prudential Financial, Inc.# | 620,822 | ||||||
33,700 | UnumProvident Corp. | 782,177 | ||||||
3,210,885 | ||||||||
Linen Supply and Related Items – 0% | ||||||||
3,000 | Cintas Corp. | 88,830 | ||||||
Machinery – Construction and Mining – 0.7% | ||||||||
27,600 | Caterpillar, Inc. | 2,259,888 | ||||||
4,900 | Terex Corp.* | 341,432 | ||||||
2,601,320 | ||||||||
Machinery – Farm – 0.2% | ||||||||
10,800 | Deere & Co. | 907,956 | ||||||
Medical – Biomedical and Genetic – 0.8% | ||||||||
15,000 | Amgen, Inc.* | 628,050 | ||||||
11,500 | Biogen Idec, Inc.* | 697,935 | ||||||
18,200 | Celgene Corp.* | 1,130,948 | ||||||
9,100 | Genzyme Corp.* | 640,185 | ||||||
3,097,118 | ||||||||
Medical – Drugs – 4.9% | ||||||||
64,900 | Abbott Laboratories | 3,423,475 | ||||||
9,600 | Allergan, Inc. | 541,152 | ||||||
83,300 | Bristol-Myers Squibb Co. | 1,830,101 | ||||||
19,400 | Eli Lilly and Co. | 933,916 | ||||||
243,900 | Merck & Company, Inc. | 9,277,956 | ||||||
76,100 | Pfizer, Inc. | 1,530,371 | ||||||
96,200 | Schering-Plough Corp. | 1,771,042 | ||||||
19,308,013 | ||||||||
Medical – Generic Drugs – 0.1% | ||||||||
6,000 | Watson Pharmaceuticals, Inc.* | 186,240 | ||||||
Medical – HMO – 0.9% | ||||||||
11,600 | Aetna, Inc. | 505,760 | ||||||
65,100 | CIGNA Corp. | 2,780,421 | ||||||
4,000 | Coventry Health Care, Inc.* | 178,920 | ||||||
1,800 | Humana, Inc.* | 86,022 | ||||||
3,551,123 | ||||||||
Medical – Wholesale Drug Distributors – 0% | ||||||||
1,500 | Cardinal Health, Inc. | 78,105 | ||||||
Medical Information Systems – 0.1% | ||||||||
9,700 | IMS Health, Inc. | 240,075 | ||||||
Medical Instruments – 0% | ||||||||
1,400 | Medtronic, Inc. | 68,152 | ||||||
Medical Labs and Testing Services – 0.6% | ||||||||
48,900 | Quest Diagnostics, Inc.# | 2,453,802 | ||||||
Medical Products – 2.7% | ||||||||
54,100 | Baxter International, Inc. | 3,371,512 | ||||||
700 | Becton, Dickinson and Co. | 62,580 | ||||||
47,600 | Johnson & Johnson | 3,193,484 | ||||||
55,200 | Stryker Corp. | 3,578,616 | ||||||
2,400 | Varian Medical Systems, Inc.* | 112,512 |
See Notes to Schedules of Investments and Financial Statements.
50 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Medical Products – (continued) | ||||||||
5,100 | Zimmer Holdings, Inc.* | $ | 378,216 | |||||
10,696,920 | ||||||||
Metal – Aluminum – 0.1% | ||||||||
6,700 | Alcoa, Inc. | 233,026 | ||||||
Metal – Diversified – 0.2% | ||||||||
6,004 | Freeport-McMoRan Copper & Gold, Inc. – Class B | 682,955 | ||||||
Metal Processors and Fabricators – 1.0% | ||||||||
33,400 | Precision Castparts Corp. | 3,926,504 | ||||||
Motorcycle and Motor Scooter Manufacturing – 0% | ||||||||
2,400 | Harley-Davidson, Inc. | 91,800 | ||||||
Multi-line Insurance – 1.9% | ||||||||
5,800 | Allstate Corp. | 292,088 | ||||||
23,100 | American International Group, Inc. | 1,067,220 | ||||||
7,300 | Cincinnati Financial Corp. | 262,070 | ||||||
125,000 | Loews Corp. | 5,263,750 | ||||||
6,200 | MetLife, Inc. | 377,270 | ||||||
4,700 | XL Capital, Ltd. – Class A | 163,983 | ||||||
7,426,381 | ||||||||
Multimedia – 0.6% | ||||||||
8,700 | E.W. Scripps Co. – Class A | 390,717 | ||||||
77,300 | News Corporation, Inc. – Class A | 1,383,670 | ||||||
12,500 | Walt Disney Co. | 405,375 | ||||||
2,179,762 | ||||||||
Networking Products – 1.9% | ||||||||
215,800 | Cisco Systems, Inc.* | 5,533,112 | ||||||
71,600 | Juniper Networks, Inc.*,# | 1,977,592 | ||||||
7,510,704 | ||||||||
Non-Hazardous Waste Disposal – 0% | ||||||||
3,300 | Waste Management, Inc. | 119,130 | ||||||
Oil – Field Services – 2.0% | ||||||||
11,700 | Baker Hughes, Inc. | 946,296 | ||||||
34,600 | Schlumberger, Ltd. (U.S. Shares) | 3,479,030 | ||||||
20,800 | Smith International, Inc.# | 1,591,408 | ||||||
4,634 | Transocean, Inc.* | 683,330 | ||||||
11,800 | Weatherford International, Ltd.* | 951,906 | ||||||
7,651,970 | ||||||||
Oil and Gas Drilling – 0% | ||||||||
2,900 | Noble Corp. | 163,212 | ||||||
Oil Companies – Exploration and Production – 1.3% | ||||||||
16,500 | Anadarko Petroleum Corp. | 1,098,240 | ||||||
3,300 | Apache Corp. | 444,444 | ||||||
2,400 | Chesapeake Energy Corp. | 124,080 | ||||||
2,000 | Devon Energy Corp. | 226,800 | ||||||
1,300 | Noble Energy, Inc. | 113,100 | ||||||
25,600 | Occidental Petroleum Corp. | 2,130,176 | ||||||
11,100 | Questar Corp. | 688,533 | ||||||
400 | Range Resources Corp. | 26,552 | ||||||
3,300 | XTO Energy, Inc. | 204,138 | ||||||
5,056,063 | ||||||||
Oil Companies – Integrated – 8.5% | ||||||||
72,933 | Chevron Corp. | 7,012,507 | ||||||
45,100 | ConocoPhillips | 3,885,365 | ||||||
201,700 | Exxon Mobil Corp. | 18,772,218 | ||||||
900 | Hess Corp. | 95,580 | ||||||
43,622 | Marathon Oil Corp. | 1,987,855 | ||||||
17,400 | Murphy Oil Corp. | 1,571,916 | ||||||
33,325,441 | ||||||||
Oil Field Machinery and Equipment – 0.9% | ||||||||
5,900 | Cameron International Corp.* | 290,457 | ||||||
45,700 | National-Oilwell Varco, Inc.* | 3,128,165 | ||||||
3,418,622 | ||||||||
Oil Refining and Marketing – 0.5% | ||||||||
6,800 | Tesoro Corp. | 170,952 | ||||||
32,300 | Valero Energy Corp. | 1,577,855 | ||||||
1,748,807 | ||||||||
Paper and Related Products – 0% | ||||||||
4,700 | International Paper Co. | 122,999 | ||||||
1,700 | MeadWestvaco Corp. | 44,710 | ||||||
167,709 | ||||||||
Pharmacy Services – 1.4% | ||||||||
11,400 | Express Scripts, Inc. – Class A*,# | 798,228 | ||||||
94,734 | Medco Health Solutions, Inc.* | 4,693,122 | ||||||
5,491,350 | ||||||||
Photo Equipment and Supplies – 0.1% | ||||||||
9,400 | Eastman Kodak Co. | 168,166 | ||||||
Pipelines – 0.1% | ||||||||
4,900 | Williams Companies, Inc. | 173,950 | ||||||
Printing – Commercial – 0% | ||||||||
2,100 | R.R. Donnelley & Sons Co. | 64,344 | ||||||
Property and Casualty Insurance – 0.2% | ||||||||
23,200 | Progressive Corp. | 422,008 | ||||||
1,700 | SAFECO Corp. | 113,458 | ||||||
4,900 | Travelers Companies, Inc. | 246,960 | ||||||
782,426 | ||||||||
Publishing – Newspapers – 0.1% | ||||||||
500 | Washington Post Co. – Class B | 327,800 | ||||||
REIT – Apartments – 0.1% | ||||||||
1,200 | Avalonbay Communities, Inc. | 122,400 | ||||||
5,800 | Equity Residential | 240,816 | ||||||
363,216 | ||||||||
REIT – Health Care – 0.1% | ||||||||
12,300 | HCP, Inc. | 439,110 | ||||||
REIT – Regional Malls – 0% | ||||||||
800 | Simon Property Group, Inc. | 79,888 | ||||||
REIT – Storage – 0% | ||||||||
1,500 | Public Storage | 136,050 | ||||||
REIT – Warehouse and Industrial – 0.1% | ||||||||
3,300 | ProLogis | 206,613 | ||||||
Retail – Apparel and Shoe – 0.4% | ||||||||
5,400 | Abercrombie & Fitch Co. – Class A | 401,274 | ||||||
16,100 | Coach, Inc.* | 572,677 | ||||||
28,200 | Gap, Inc. | 525,084 | ||||||
1,499,035 | ||||||||
Retail – Auto Parts – 0% | ||||||||
100 | AutoZone, Inc.* | 12,075 | ||||||
Retail – Bedding – 0% | ||||||||
2,800 | Bed Bath & Beyond, Inc.* | 91,000 | ||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2008 51
Table of Contents
INTECH Risk-Managed Stock Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Retail – Computer Equipment – 0.4% | ||||||||
26,500 | GameStop Corp. – Class A* | $ | 1,458,560 | |||||
Retail – Consumer Electronics – 0.1% | ||||||||
11,900 | Best Buy Company, Inc. | 511,938 | ||||||
2,700 | RadioShack Corp. | 37,530 | ||||||
549,468 | ||||||||
Retail – Discount – 0.4% | ||||||||
4,200 | Costco Wholesale Corp. | 299,250 | ||||||
6,900 | Target Corp. | 366,597 | ||||||
21,400 | TJX Companies, Inc. | 689,508 | ||||||
5,700 | Wal-Mart Stores, Inc. | 330,486 | ||||||
1,685,841 | ||||||||
Retail – Drug Store – 0.7% | ||||||||
63,699 | CVS/Caremark Corp. | 2,571,529 | ||||||
Retail – Jewelry – 0.3% | ||||||||
24,100 | Tiffany & Co. | 1,049,314 | ||||||
Retail – Major Department Stores – 0.1% | ||||||||
1,900 | Sears Holdings Corp.*,# | 187,359 | ||||||
Retail – Office Supplies – 0.1% | ||||||||
7,500 | Office Depot, Inc.* | 95,100 | ||||||
5,500 | Staples, Inc. | 119,350 | ||||||
214,450 | ||||||||
Retail – Regional Department Stores – 0.1% | ||||||||
9,000 | Kohl’s Corp.*,# | 439,650 | ||||||
Retail – Restaurants – 1.3% | ||||||||
74,400 | McDonald’s Corp. | 4,432,752 | ||||||
15,300 | Yum! Brands, Inc. | 622,404 | ||||||
5,055,156 | ||||||||
Rubber – Tires – 0% | ||||||||
400 | Goodyear Tire & Rubber Co.* | 10,712 | ||||||
Savings/Loan/Thrifts – 0.6% | ||||||||
73,500 | Hudson City Bancorp, Inc. | 1,406,055 | ||||||
60,800 | Washington Mutual, Inc.# | 747,232 | ||||||
2,153,287 | ||||||||
Schools – 0.5% | ||||||||
37,500 | Apollo Group, Inc. – Class A* | 1,908,750 | ||||||
Semiconductor Components/Integrated Circuits – 0.2% | ||||||||
8,300 | Analog Devices, Inc. | 267,343 | ||||||
10,800 | Linear Technology Corp.# | 377,568 | ||||||
644,911 | ||||||||
Semiconductor Equipment – 0.1% | ||||||||
5,700 | Applied Materials, Inc. | 106,362 | ||||||
2,700 | KLA-Tencor Corp. | 117,936 | ||||||
224,298 | ||||||||
Steel – Producers – 0.1% | ||||||||
3,400 | United States Steel Corp. | 523,430 | ||||||
Steel – Specialty – 0% | ||||||||
900 | Allegheny Technologies, Inc. | 61,947 | ||||||
Super-Regional Banks – 1.9% | ||||||||
142,526 | Bank of America Corp. | 5,350,426 | ||||||
2,400 | Capital One Financial Corp. | 127,200 | ||||||
300 | Comerica, Inc. | 10,419 | ||||||
2,000 | Fifth Third Bancorp | 42,860 | ||||||
4,300 | PNC Bank Corp. | 298,205 | ||||||
2,600 | SunTrust Banks, Inc. | 144,950 | ||||||
7,300 | U.S. Bancorp | 247,397 | ||||||
43,800 | Wells Fargo & Co. | 1,303,050 | ||||||
7,524,507 | ||||||||
Telecommunication Equipment – Fiber Optics – 0.3% | ||||||||
17,000 | Ciena Corp.*,# | 574,770 | ||||||
25,900 | Corning, Inc. | 691,789 | ||||||
1,266,559 | ||||||||
Telecommunication Services – 0.2% | ||||||||
20,800 | Embarq Corp. | 864,656 | ||||||
2,016 | Fairpoint Communications, Inc. | 18,568 | ||||||
883,224 | ||||||||
Telephone – Integrated – 4.9% | ||||||||
394,653 | AT&T, Inc. | 15,277,018 | ||||||
3,000 | CenturyTel, Inc. | 97,350 | ||||||
11,500 | Sprint Nextel Corp. | 91,885 | ||||||
96,900 | Verizon Communications, Inc. | 3,728,712 | ||||||
5,308 | Windstream Corp. | 62,316 | ||||||
19,257,281 | ||||||||
Television – 0% | ||||||||
4,400 | CBS Corp. – Class B | 101,508 | ||||||
Therapeutics – 0% | ||||||||
2,100 | Gilead Sciences, Inc.* | 108,696 | ||||||
Tobacco – 0.4% | ||||||||
28,700 | Altria Group, Inc. | 574,000 | ||||||
16,300 | Philip Morris International, Inc.* | 831,789 | ||||||
1,405,789 | ||||||||
Tools – Hand Held – 0.1% | ||||||||
4,000 | Black & Decker Corp. | 262,520 | ||||||
Transportation – Railroad – 0.2% | ||||||||
6,700 | CSX Corp. | 421,765 | ||||||
3,100 | Union Pacific Corp. | 450,089 | ||||||
871,854 | ||||||||
Transportation – Services – 0.2% | ||||||||
10,100 | Expeditors International of Washington, Inc. | 470,559 | ||||||
4,000 | United Parcel Service, Inc. – Class B | 289,640 | ||||||
760,199 | ||||||||
Web Portals/Internet Service Providers – 0.7% | ||||||||
4,800 | Google, Inc. – Class A* | 2,756,592 | ||||||
Wireless Equipment – 0.2% | ||||||||
2,200 | American Tower Corp. – Class A* | 95,524 | ||||||
54,300 | Motorola, Inc. | 540,828 | ||||||
636,352 | ||||||||
Total Common Stock (cost $359,238,312) | 389,772,239 | |||||||
Other Securities – 4.0% | ||||||||
2,283,780 | Allianz Dresdner Daily Asset Fund† | 2,283,780 | ||||||
3,277,959 | Repurchase Agreements† | 3,277,959 |
See Notes to Schedules of Investments and Financial Statements.
52 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Other Securities – (continued) | ||||||||
10,017,380 | Time Deposits† | $ | 10,017,380 | |||||
Total Other Securities (cost $15,579,119) | 15,579,119 | |||||||
Total Investments (total cost $374,817,431) – 103.8% | 405,351,358 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (3.8)% | (14,721,570) | |||||||
Net Assets – 100% | $ | 390,629,788 | ||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 3,938,901 | 1.0% | |||||
Cayman Islands | 1,010,524 | 0.2% | ||||||
Netherlands | 3,479,030 | 0.9% | ||||||
Panama | 76,323 | 0.0% | ||||||
United States†† | 396,846,580 | 97.9% | ||||||
Total | $ | 405,351,358 | 100.0% |
†† | Includes Other Securities (94.1% excluding Other Securities) |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2008 53
Table of Contents
Janus Mid Cap Value Fund (unaudited) | Ticker: JMCVX |
Fund Snapshot
This fund seeks to uncover fundamentally strong mid-sized companies with a catalyst for growth not yet recognized by the market.
Managed by
Perkins, Wolf, McDonnell
and Company, LLC
Perkins, Wolf, McDonnell
and Company, LLC
Performance Overview
During the six months ended April 30, 2008, Janus Mid Cap Value Fund’s Investor Shares and Institutional Shares returned (3.78)% and (3.65)%, respectively, outperforming the Fund’s benchmark, the Russell Midcap® Value Index, which returned (9.20)%. The S&P MidCap 400 Index returned (6.95)% and the S&P 500® Index returned (9.64)% during the same period.
The concerns that we expressed in our last report severely impacted the market in the most recent six months. The problems of subprime lending, leverage and derivatives spread across financial markets. Credit availability became restricted, financial earnings suffered from huge write-offs, and investor confidence was shaken. As a result, the stock market experienced a correction, which at the low in January was down over 15% from its October high.
In general, our stocks held up relatively well compared to the benchmark because of a more risk-sensitive market that favored stocks with the characteristics we traditionally emphasize. We believe that in an uncertain financial environment it is likely that stocks with better balance sheets, strong free cash flow and valuations which incorporate more modest expectations will suffer less downside risk. These stocks may or may not fully participate in a short-term market rally (in fact, we lagged a bit in April), but we believe by doing fairly well in the downturn the likelihood is they will outperform over the full cycle. We are focused on the long term and the favorable impact that preservation of capital has on compounding returns for the Fund.
Merger and Acquisition Activity
As has been the case in each year other than 2002, merger and acquisition activity had a positive impact on the Fund. With the disruption in the credit markets, this activity nearly came to a halt in recent months. While private equity activity is likely to decline from the record levels seen in recent years, we believe that strategic and/or foreign buyers could step in, as evidenced by National-Oilwell’s fourth quarter buyout of Fund holding Grant Prideco and United Technologies’ bid for Fund holding Diebold. This buyout activity is a reinforcement of our belief that our long-standing investment process is successful in identifying strong, attractively valued franchises.
Holdings That Contributed to Performance
Strength in commodity prices was a help to our multi-year overweighted position versus the benchmark in energy – natural gas and crude oil were up approximately 30% and 20%, respectively, in the past six months. While energy prices could retrace some of this strength, we believe that prices will remain high because of tight supply. We still found attractive long-term value plays in the space, such as contributors Southwestern Energy and Sandridge Energy, which are mostly natural gas focused. In addition to initiating our position in Sandridge Energy, we made significant additions to our holding in Forest Oil, as the company continues to transform itself into a steady organic growth company while maintaining what we feel are some of the best cost controls in the industry.
For the six-month period, information technology was one of the worst performing sectors in the Index, but our information technology holdings declined about half as much as the rest of the group. Diebold was the largest individual contributor in this sector. Early this year, because of our confidence in the company’s franchise and long-term outlook, we added to our exposure despite disappointing short term earnings and what we believed to be minor accounting issues. In late February, United Technologies made a bid for the company at over a 60% premium to Diebold’s market price.
In the materials sector, leading fertilizer producer Mosaic was another top performer, which along with industrials sector holding, Deere, was a primary beneficiary of strong agricultural prices. Both holdings were reduced on strength.
Holdings That Detracted from Performance
Two of our five largest detractors were financial sector stocks. One of our best performers in the past, AllianceBernstein Holding, witnessed a correction of greater than 25% during the period after a modest near-term earnings shortfall due to reduced performance fees and general market weakness. We believe AllianceBernstein remains a growth franchise with good international exposure and a current dividend yield of over 5%. Regional bank Colonial BancGroup also underperformed, as it was one of many banks to suffer from real estate-related losses.
Packaging and building products manufacturer Temple-Inland was also penalized by the housing slowdown. The stock was the largest detractor for the period due to weakness in demand for building materials and continued increases in
54 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
(unaudited)
raw material prices. We added to our position in Temple-Inland on weakness, as the fundamentals in the packaging industry remain solid and we believe the company has the ability to improve margins. We feel Temple-Inland is trading at a substantial discount to its intrinsic value.
Market Outlook
Over the six-month period we have remained over 90% invested despite near-term economic and market uncertainty as we believe we have found some good long-term values to replace stocks whose risk/reward relationships have become less favorable in our view. We generally characterize our purchases as having better-than-average balance sheets, a likelihood of positive free cash flow even if earnings disappoint, and stock prices that are near their 12-month lows reflecting reduced expectations.
In terms of sector positioning, the relative exposures versus the benchmark remained as they have been for some time. At the end of April, we were overweight in energy, health care and information technology and underweight in consumer discretionary, financials and utilities. The relative weightings are more a reflection of the number of attractively valued stock opportunities we find within a sector than any macro-influenced sector allocation decision. Incidentally, we have been surprised that, in general, small caps have performed relatively well compared to large caps. We continue to think large caps have better risk/reward characteristics than small caps, but we are taking advantage of volatility in selected smaller mid caps to establish or increase positions.
April has seen the market rebound, but it’s unclear how long this respite will continue. The market has digested significant negative news and the Federal Reserve has been very aggressive in addressing the financial problems. However, we suspect the economy and earnings could decline more than expected and, in any case, any recovery is likely to be slow. The financial system’s leverage will take a long time to be rebalanced and is still subject to significant unanticipated shocks. In that context, the Fund has maintained its position in index puts. To date this program has been about break-even, but it has tempered short-term volatility and may be beneficial in a more severe downturn. We think this small investment in “market insurance” is consistent with our sensitivity to the need to preserve capital and our objective of continuing to provide consistent, above average long-term investment returns on both an absolute and relative basis. Please see “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
Thank you for your investment in Janus Mid Cap Value Fund.
Janus Core, Risk-Managed and Value Funds April 30, 2008 55
Table of Contents
Janus Mid Cap Value Fund (unaudited)
Janus Mid Cap Value Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Southwestern Energy Co. | 0.32% | |||
Forest Oil Corp. | 0.32% | |||
Mosaic Co. | 0.26% | |||
Sandridge Energy, Inc. | 0.24% | |||
Redwood Trust, Inc. | 0.22% |
5 Bottom Performers – Holdings
Contribution | ||||
Temple-Inland, Inc. | (0.60)% | |||
Colonial BancGroup, Inc. | (0.57)% | |||
AllianceBernstein Holding L.P. | (0.56)% | |||
Sprint Nextel Corp. | (0.39)% | |||
Health Net, Inc. | (0.31)% |
5 Top Performers – Sectors
Fund Weighting | Russell Midcap® Value | |||||||||||
Fund Contribution | (% of Net Assets) | Index Weighting | ||||||||||
Energy | 1.86% | 13.58% | 8.35% | |||||||||
Utilities | 0.03% | 5.58% | 14.44% | |||||||||
Industrials | (0.13)% | 11.74% | 10.25% | |||||||||
Consumer Staples | (0.14)% | 6.12% | 7.53% | |||||||||
Materials | (0.38)% | 6.51% | 6.92% |
5 Bottom Performers – Sectors
Fund Weighting | Russell Midcap® Value | |||||||||||
Fund Contribution | (% of Net Assets) | Index Weighting | ||||||||||
Financials | (1.72)% | 24.41% | 29.65% | |||||||||
Information Technology | (1.23)% | 8.48% | 6.69% | |||||||||
Telecommunication Services | (0.71)% | 1.81% | 1.86% | |||||||||
Health Care | (0.61)% | 11.84% | 2.34% | |||||||||
Consumer Discretionary | (0.43)% | 9.94% | 11.98% |
56 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2008
AllianceBernstein Holding L.P. Investment Management and Advisory Services | 1.9% | |||
Forest Oil Corp. Oil Companies – Exploration and Production | 1.6% | |||
Protective Life Corp. Life and Health Insurance | 1.6% | |||
Invesco, Ltd. ( U.S. Shares) Investment Management and Advisory Services | 1.5% | |||
Berkshire Hathaway, Inc. – Class B Reinsurance | 1.4% | |||
8.0% |
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19p01.gif)
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2008
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Table of Contents
Janus Mid Cap Value Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19m01.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratios – for the fiscal year ended October 31, 2007 | ||||||||||||
Fiscal | One | Five | Since | Total Annual Fund | Net Annual Fund | ||||||||
Year-to-Date | Year | Year | Inception* | Operating Expenses | Operating Expenses | ||||||||
Janus Mid Cap Value Fund | |||||||||||||
Investor Shares | (3.78)% | (0.05)% | 16.93% | 15.85% | 0.87% | 0.87% | |||||||
Institutional Shares(1) | (3.65)% | 0.14% | 17.13% | 15.99% | 0.82% | 0.78% | |||||||
Russell Midcap® Value Index | (9.20)% | (11.65)% | 16.44% | 10.22% | |||||||||
Lipper Quartile | – | 1st | 1st | 1st | |||||||||
Lipper Ranking – based on total return for Mid-Cap Value Funds | – | 17/332 | 34/204 | 1/66 | |||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The Fund has a performance-based management fee that adjusts up or down based on the Fund’s performance relative to an approved benchmark index over a performance measurement period.
Janus Services LLC has contractually agreed to waive the transfer agency fees applicable to the Fund’s Institutional Shares to the level indicated until at least March 1, 2009. Returns shown include fee waivers, if any, and without such waivers, the Fund’s returns would have been lower.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.) Contractual waivers agreed to by Janus Capital, where applicable, are included in the prospectus under “Net Annual Fund Operating Expenses.” All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
58 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
(unaudited)
The Fund’s performance may be affected by risks that include those associated with undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and other details.
Funds that invest in Real Estate Investment Trusts (REITs) may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: legal, political, liquidity, interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Funds invest in foreign REITs, the Funds may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Berger Mid Cap Value Fund was reorganized into the Fund on April 21, 2003. The returns shown prior to April 21, 2003 for Janus Mid Cap Value Fund – Investor Shares are those of Berger Mid Cap Value Fund – Investor Shares. The returns shown prior to April 21, 2003 for Janus Mid Cap Value Fund – Institutional Shares are those of Berger Mid Cap Value Fund – Institutional Shares for the period May 17, 2002 to April 17, 2003 and Berger Mid Cap Value Fund — Investor Shares for periods prior to May 17, 2002.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
Lipper ranking is for the Investor share class only; other classes may have different performance characteristics.
August 13, 1998 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – August 12, 1998 |
(1) | Closed to new investors. |
Fund Expenses
The examples below show you the ongoing costs (in dollars) of investing in your Fund and allow you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example - Investor Shares | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 962.20 | $ | 5.17 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.59 | $ | 5.32 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example - Institutional Shares | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 963.50 | $ | 3.76 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.03 | $ | 3.87 | ||||||||
†Expenses are equal to the annualized expense ratio of 1.06% for Investor Shares and 0.77% for Institutional Shares, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital for Institutional Shares.
Janus Core, Risk-Managed and Value Funds April 30, 2008 59
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Janus Mid Cap Value Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares/Principal/Contract Amounts | Value | |||||||
Common Stock – 93.9% | ||||||||
Advertising Agencies – 0.4% | ||||||||
600,000 | Omnicom Group, Inc. | $ | 28,644,000 | |||||
Aerospace and Defense – 0.4% | ||||||||
400,000 | Rockwell Collins, Inc. | 25,244,000 | ||||||
Agricultural Chemicals – 0.3% | ||||||||
150,000 | Mosaic Co.* | 18,376,500 | ||||||
Airlines – 0.7% | ||||||||
3,700,000 | Southwest Airlines Co.# | 48,988,000 | ||||||
Applications Software – 0.4% | ||||||||
1,100,000 | Intuit, Inc.* | 29,667,000 | ||||||
Automotive – Truck Parts and Equipment – Original – 0.2% | ||||||||
190,000 | Magna International, Inc. – Class A (U.S. Shares)# | 14,179,700 | ||||||
Beverages – Non-Alcoholic – 0.5% | ||||||||
550,000 | PepsiCo, Inc. | 37,691,500 | ||||||
Beverages – Wine and Spirits – 0.7% | ||||||||
750,000 | Brown-Forman Corp. – Class B# | 51,015,000 | ||||||
Building – Residential and Commercial – 0.6% | ||||||||
800,000 | Centex Corp. | 16,656,000 | ||||||
2,000,000 | Pulte Homes, Inc.# | 26,080,000 | ||||||
42,736,000 | ||||||||
Chemicals – Specialty – 0.9% | ||||||||
1,050,000 | Lubrizol Corp. | 61,236,000 | ||||||
Coal – 0.4% | ||||||||
450,000 | Arch Coal, Inc.# | 25,812,000 | ||||||
Commer Banks – 2.4% | ||||||||
1,750,000 | BB&T Corp.# | 60,007,500 | ||||||
3,998,808 | Colonial BancGroup, Inc.# | 32,550,297 | ||||||
1,049,937 | First Midwest Bancorp, Inc.# | 26,804,892 | ||||||
4,350,000 | Synovus Financial Corp.# | 51,504,000 | ||||||
170,866,689 | ||||||||
Commercial Services – Finance – 0.2% | ||||||||
250,100 | Global Payments, Inc.# | 11,069,426 | ||||||
Computers – Integrated Systems – 1.6% | ||||||||
1,860,000 | Diebold, Inc. | 72,912,000 | ||||||
1,600,000 | NCR Corp.* | 39,408,000 | ||||||
112,320,000 | ||||||||
Consumer Products – Miscellaneous – 0.5% | ||||||||
585,000 | Kimberly-Clark Corp. | 37,434,150 | ||||||
Containers – Metal and Glass – 1.2% | ||||||||
1,550,000 | Ball Corp. | 83,359,000 | ||||||
Containers – Paper and Plastic – 0.4% | ||||||||
1,099,979 | Pactiv Corp.* | 26,168,500 | ||||||
Cosmetics and Toiletries – 0.6% | ||||||||
615,000 | Procter & Gamble Co. | 41,235,750 | ||||||
Data Processing and Management – 0.3% | ||||||||
430,000 | Fiserv, Inc.* | 21,736,500 | ||||||
Distribution/Wholesale – 2.2% | ||||||||
790,000 | Genuine Parts Co. | 33,543,400 | ||||||
2,000,000 | Tech Data Corp.* | 67,220,000 | ||||||
615,100 | W.W. Grainger, Inc. | 53,335,321 | ||||||
154,098,721 | ||||||||
Diversified Operations – 2.0% | ||||||||
1,400,000 | Dover Corp. | 69,258,000 | ||||||
800,000 | Illinois Tool Works, Inc. | 41,832,000 | ||||||
599,967 | Tyco International, Ltd. | 28,072,456 | ||||||
139,162,456 | ||||||||
E-Commerce/Services – 0.6% | ||||||||
1,950,000 | IAC/InterActiveCorp*,# | 40,579,500 | ||||||
Electric – Integrated – 3.7% | ||||||||
2,500,000 | DPL, Inc.# | 69,575,000 | ||||||
850,000 | PG&E Corp.# | 34,000,000 | ||||||
1,560,000 | PPL Corp. | 74,911,200 | ||||||
1,870,000 | Public Service Enterprise Group, Inc. | 82,111,700 | ||||||
260,597,900 | ||||||||
Electronic Components – Miscellaneous – 0.7% | ||||||||
5,400,000 | Vishay Intertechnology, Inc.* | 51,030,000 | ||||||
Electronic Components – Semiconductors – 0.7% | ||||||||
1,440,000 | QLogic Corp.* | 22,982,400 | ||||||
1,100,000 | Xilinx, Inc.# | 27,247,000 | ||||||
50,229,400 | ||||||||
Electronic Connectors – 1.1% | ||||||||
2,050,000 | Thomas & Betts Corp.* | 76,793,000 | ||||||
Electronic Measuring Instruments – 0.7% | ||||||||
1,521,200 | Agilent Technologies, Inc.* | 45,955,452 | ||||||
Engineering – Research and Development Services – 1.4% | ||||||||
2,450,000 | URS Corp.* | 98,833,000 | ||||||
Finance – Investment Bankers/Brokers – 1.0% | ||||||||
2,450,000 | Raymond James Financial, Inc.# | 70,486,500 | ||||||
Food – Miscellaneous/Diversified – 1.6% | ||||||||
680,000 | General Mills, Inc. | 41,072,000 | ||||||
600,000 | Kellogg Co. | 30,702,000 | ||||||
1,330,000 | Kraft Foods, Inc. – Class A | 42,067,900 | ||||||
113,841,900 | ||||||||
Food – Retail – 0.4% | ||||||||
1,000,000 | Kroger Co. | 27,250,000 | ||||||
Forestry – 0.8% | ||||||||
900,000 | Weyerhaeuser Co. | 57,492,000 | ||||||
Gas – Distribution – 0.7% | ||||||||
1,920,000 | Southern Union Co. | 49,190,400 | ||||||
Gold Mining – 0.9% | ||||||||
1,750,000 | Goldcorp, Inc. (U.S. Shares)# | 62,510,000 | ||||||
Hotels and Motels – 0.7% | ||||||||
900,000 | Starwood Hotels & Resorts Worldwide, Inc.# | 46,989,000 | ||||||
Human Resources – 1.2% | ||||||||
600,000 | Manpower, Inc. | 40,278,000 | ||||||
1,850,000 | Robert Half International, Inc. | 43,845,000 | ||||||
84,123,000 | ||||||||
Instruments – Scientific – 2.3% | ||||||||
1,800,000 | Applera Corp. – Applied Biosystems Group | 57,438,000 | ||||||
1,715,000 | PerkinElmer, Inc. | 45,550,400 | ||||||
1,050,000 | Thermo Fisher Scientific, Inc.* | 60,763,500 | ||||||
163,751,900 | ||||||||
See Notes to Schedules of Investments and Financial Statements.
60 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares/Principal/Contract Amounts | Value | |||||||
Internet Infrastructure Equipment – 0.6% | ||||||||
2,203,838 | Avocent Corp.*,£ | $ | 42,996,879 | |||||
Investment Management and Advisory Services – 3.8% | ||||||||
2,100,000 | AllianceBernstein Holding L.P. | 130,242,000 | ||||||
4,129,988 | Invesco, Ltd.# | 105,934,192 | ||||||
400,000 | Legg Mason, Inc. | 24,112,000 | ||||||
295,000 | Waddell & Reed Financial, Inc. – Class A | 9,988,700 | ||||||
270,276,892 | ||||||||
Life and Health Insurance – 1.6% | ||||||||
2,569,980 | Protective Life Corp. | 109,532,548 | ||||||
Machinery – Farm – 0.4% | ||||||||
300,000 | Deere & Co. | 25,221,000 | ||||||
Medical – Biomedical and Genetic – 0.4% | ||||||||
400,000 | Millipore Corp.*,# | 28,040,000 | ||||||
Medical – Drugs – 1.4% | ||||||||
1,200,000 | Endo Pharmaceuticals Holdings, Inc.* | 29,796,000 | ||||||
1,150,000 | Forest Laboratories, Inc.* | 39,916,500 | ||||||
725,000 | Wyeth | 32,240,750 | ||||||
101,953,250 | ||||||||
Medical – Generic Drugs – 0.6% | ||||||||
900,000 | Barr Pharmaceuticals, Inc.* | 45,207,000 | ||||||
Medical – HMO – 0.9% | ||||||||
600,000 | Coventry Health Care, Inc.* | 26,838,000 | ||||||
1,163,600 | Health Net, Inc.* | 34,081,844 | ||||||
60,919,844 | ||||||||
Medical – Wholesale Drug Distributors – 1.1% | ||||||||
1,500,000 | Cardinal Health, Inc. | 78,105,000 | ||||||
Medical Instruments – 0.4% | ||||||||
600,000 | St. Jude Medical, Inc.* | 26,268,000 | ||||||
Medical Labs and Testing Services – 1.2% | ||||||||
1,100,000 | Laboratory Corporation of America Holdings*,# | 83,182,000 | ||||||
Medical Products – 2.2% | ||||||||
1,450,000 | Covidien, Ltd. | 67,700,500 | ||||||
560,000 | Johnson & Johnson | 37,570,400 | ||||||
700,000 | Zimmer Holdings, Inc.* | 51,912,000 | ||||||
157,182,900 | ||||||||
Metal – Aluminum – 0.6% | ||||||||
1,200,000 | Alcoa, Inc. | 41,736,000 | ||||||
Motorcycle and Motor Scooter Manufacturing – 0.3% | ||||||||
600,000 | Harley-Davidson, Inc.# | 22,950,000 | ||||||
Multi-line Insurance – 1.6% | ||||||||
1,000,000 | Loews Corp. | 42,110,000 | ||||||
4,825,000 | Old Republic International Corp. | 69,238,750 | ||||||
111,348,750 | ||||||||
Multimedia – 1.0% | ||||||||
1,050,000 | McGraw-Hill Companies, Inc. | 43,039,500 | ||||||
800,000 | Viacom, Inc. – Class B* | 30,752,000 | ||||||
73,791,500 | ||||||||
Networking Products – 1.1% | ||||||||
3,900,000 | Foundry Networks, Inc.*,# | 49,647,000 | ||||||
1,300,015 | Polycom, Inc.* | 29,120,336 | ||||||
78,767,336 | ||||||||
Non-Hazardous Waste Disposal – 1.8% | ||||||||
2,200,000 | Republic Services, Inc. | 69,938,000 | ||||||
1,520,000 | Waste Management, Inc. | 54,872,000 | ||||||
124,810,000 | ||||||||
Office Automation and Equipment – 0.9% | ||||||||
1,200,000 | Pitney Bowes, Inc. | 43,332,000 | ||||||
1,550,000 | Xerox Corp. | 21,653,500 | ||||||
64,985,500 | ||||||||
Oil – Field Services – 1.0% | ||||||||
475,700 | Transocean, Inc.* | 70,146,722 | ||||||
Oil and Gas Drilling – 0.6% | ||||||||
750,000 | Noble Corp. | 42,210,000 | ||||||
Oil Companies – Exploration and Production – 6.8% | ||||||||
1,200,000 | Anadarko Petroleum Corp.# | 79,872,000 | ||||||
900,000 | Bill Barrett Corp.*,# | 46,287,000 | ||||||
350,000 | Devon Energy Corp. | 39,690,000 | ||||||
1,860,028 | Forest Oil Corp.* | 109,611,450 | ||||||
650,000 | Newfield Exploration Co.* | 39,494,000 | ||||||
800,000 | Noble Energy, Inc. | 69,600,000 | ||||||
1,000,000 | Sandridge Energy, Inc.*,# | 45,180,000 | ||||||
1,200,000 | Southwestern Energy Co.* | 50,772,000 | ||||||
480,506,450 | ||||||||
Oil Companies – Integrated – 0.9% | ||||||||
300,000 | Hess Corp. | 31,860,000 | ||||||
650,000 | Marathon Oil Corp. | 29,620,500 | ||||||
61,480,500 | ||||||||
Oil Field Machinery and Equipment – 0.4% | ||||||||
400,000 | National-Oilwell Varco, Inc.*,# | 27,380,000 | ||||||
Oil Refining and Marketing – 0.9% | ||||||||
1,100,000 | Frontier Oil Corp.# | 27,335,000 | ||||||
790,000 | Valero Energy Corp. | 38,591,500 | ||||||
65,926,500 | ||||||||
Paper and Related Products – 1.9% | ||||||||
900,000 | Potlatch Corp.# | 40,329,000 | ||||||
1,030,000 | Rayonier, Inc. | 43,290,900 | ||||||
4,200,000 | Temple-Inland, Inc.# | 49,014,000 | ||||||
132,633,900 | ||||||||
Pharmacy Services – 0.5% | ||||||||
1,599,880 | Omnicare, Inc.# | 32,557,558 | ||||||
Pipelines – 3.6% | ||||||||
1,000,000 | Enterprise Products Partners L.P.# | 31,230,000 | ||||||
850,000 | Equitable Resources, Inc.# | 56,414,500 | ||||||
1,500,000 | Kinder Morgan Energy Partners L.P.# | 87,810,000 | ||||||
1,600,000 | Plains All American Pipeline L.P. | 77,264,000 | ||||||
252,718,500 | ||||||||
Property and Casualty Insurance – 0.8% | ||||||||
65,881 | Mercury General Corp. | 3,286,803 | ||||||
2,740,000 | Progressive Corp. | 49,840,600 | ||||||
53,127,403 | ||||||||
Reinsurance – 1.4% | ||||||||
22,500 | Berkshire Hathaway, Inc. – Class B* | 100,282,500 | ||||||
REIT – Apartments – 0.9% | ||||||||
300,000 | Avalonbay Communities, Inc.# | 30,600,000 | ||||||
850,000 | Equity Residential | 35,292,000 | ||||||
65,892,000 | ||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2008 61
Table of Contents
Janus Mid Cap Value Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares/Principal/Contract Amounts | Value | |||||||
REIT – Diversified – 0.4% | ||||||||
800,000 | Liberty Property Trust# | $ | 28,024,000 | |||||
REIT – Manufactured Homes – 2.1% | ||||||||
444,700 | Alexandria Real Estate Equities, Inc.# | 46,706,841 | ||||||
1,379,300 | Annaly Mortgage Management, Inc. | 23,117,068 | ||||||
900,000 | Redwood Trust, Inc.# | 29,961,000 | ||||||
500,000 | SL Green Realty Corp.# | 46,400,000 | ||||||
146,184,909 | ||||||||
REIT – Regional Malls – 0.5% | ||||||||
500,000 | Macerich Co.# | 36,565,000 | ||||||
REIT – Warehouse and Industrial – 1.0% | ||||||||
550,000 | AMB Property Corp.# | 31,762,500 | ||||||
580,000 | ProLogis# | 36,313,800 | ||||||
68,076,300 | ||||||||
Retail – Apparel and Shoe – 1.1% | ||||||||
1,200,000 | American Eagle Outfitters, Inc. | 22,044,000 | ||||||
2,700,000 | Foot Locker, Inc. | 34,155,000 | ||||||
700,000 | Ross Stores, Inc. | 23,443,000 | ||||||
79,642,000 | ||||||||
Retail – Auto Parts – 0.9% | ||||||||
1,100,000 | Advance Auto Parts, Inc. | 38,148,000 | ||||||
800,000 | O’Reilly Automotive, Inc.* | 23,096,000 | ||||||
61,244,000 | ||||||||
Retail – Drug Store – 0.7% | ||||||||
1,180,000 | CVS/Caremark Corp. | 47,636,600 | ||||||
Retail – Mail Order – 0% | ||||||||
22 | Williams-Sonoma, Inc. | 581 | ||||||
Retail – Major Department Stores – 1.0% | ||||||||
1,700,000 | J.C. Penney Company, Inc. | 72,250,000 | ||||||
Retail – Office Supplies – 0.8% | ||||||||
1,900,000 | Office Depot, Inc.* | 24,092,000 | ||||||
1,400,000 | Staples, Inc. | 30,380,000 | ||||||
54,472,000 | ||||||||
Retail – Regional Department Stores – 0.8% | ||||||||
600,000 | Kohl’s Corp.*,# | 29,310,000 | ||||||
1,000,000 | Macy’s, Inc. | 25,290,000 | ||||||
54,600,000 | ||||||||
Retail – Restaurants – 0.4% | ||||||||
700,000 | Darden Restaurants, Inc.# | 24,906,000 | ||||||
Savings/Loan/Thrifts – 1.1% | ||||||||
4,600,000 | People’s United Financial, Inc. | 78,062,000 | ||||||
Schools – 0.3% | ||||||||
450,000 | Apollo Group, Inc. – Class A* | 22,905,000 | ||||||
Semiconductor Components/Integrated Circuits – 0.4% | ||||||||
900,000 | Analog Devices, Inc. | 28,989,000 | ||||||
Semiconductor Equipment – 0.2% | ||||||||
900,000 | Applied Materials, Inc. | 16,794,000 | ||||||
Super-Regional Banks – 1.3% | ||||||||
400,000 | PNC Bank Corp. | 27,740,000 | ||||||
1,200,000 | SunTrust Banks, Inc. | 66,900,000 | ||||||
94,640,000 | ||||||||
Telecommunication Services – 0.4% | ||||||||
750,000 | Embarq Corp.# | 31,177,500 | ||||||
Telephone – Integrated – 1.0% | ||||||||
1,600,000 | CenturyTel, Inc. | 51,920,000 | ||||||
2,550,000 | Sprint Nextel Corp. | 20,374,500 | ||||||
72,294,500 | ||||||||
Transportation – Railroad – 1.5% | ||||||||
1,550,000 | Kansas City Southern*,# | 69,874,000 | ||||||
630,000 | Norfolk Southern Corp. | 37,535,400 | ||||||
107,409,400 | ||||||||
Transportation – Truck – 0.8% | ||||||||
1,600,000 | J.B. Hunt Transport Services, Inc.# | 54,352,000 | ||||||
Wireless Equipment – 0.2% | ||||||||
1,265,000 | Motorola, Inc. | 12,599,400 | ||||||
Total Common Stock (cost $6,116,257,681) | 6,605,654,466 | |||||||
Purchased Options – Puts – 0.4% | ||||||||
16,686 | iShares Russell Mid-Cap Value Index expires May 2008 exercise price $122.50** | 382,276 | ||||||
5,812 | iShares Russell Mid-Cap Value Index expires May 2008 exercise price $143.00 | 4,202,425 | ||||||
6,025 | iShares Russell Mid-Cap Value Index expires July 2008 exercise price $136.38** | 3,476,726 | ||||||
160,588 | Russell Mid-Cap Value Index expires May 2008 exercise price $990.46** | 646,559 | ||||||
1,248 | Russell Mid-Cap Value Index expires June 2008 exercise price $975.67** | 2,131,584 | ||||||
160,459 | Russell Mid-Cap Value Index expires June 2008 exercise price $986.37** | 2,206,841 | ||||||
130,479 | Russell Mid-Cap Value Index expires June 2008 exercise price $999.40 | 2,209,140 | ||||||
124,706 | Russell Mid-Cap Value Index expires July 2008 exercise price $980.41** | 2,402,736 | ||||||
82,089 | Russell Mid-Cap Value Index expires July 2008 exercise price $990.46 | 1,825,331 | ||||||
121,825 | Russell Mid-Cap Value Index expires July 2008 exercise price $992.21** | 1,852,422 | ||||||
1,230 | Russell Mid-Cap Value Index expires July 2008 exercise price $1,011.70 | 4,287,780 | ||||||
Total Purchased Options – Puts (premiums paid $68,522,844) | 25,623,820 | |||||||
Other Securities – 11.2% | ||||||||
148,551,164 | Allianz Dresdner Daily Asset Fund† | 148,551,164 | ||||||
157,834,197 | Repurchase Agreements† | 157,834,197 | ||||||
Time Deposits: | ||||||||
38,072,825 | Abbey National Treasury Services, N.A., 2.375%, 5/1/08† | 38,072,825 | ||||||
16,986,472 | ABN-Amro Bank N.V., N.A., 2.26%, 5/1/08† | 16,986,472 | ||||||
19,812,361 | BNP Paribas, New York, N.A., 2.50%, 5/1/08† | 19,812,361 |
See Notes to Schedules of Investments and Financial Statements.
62 Janus Core, Risk-Managed and Value Funds April 30, 2008
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Schedule of Investments (unaudited)
As of April 30, 2008
Shares/Principal/Contract Amounts | Value | |||||||
Other Securities – (continued) | ||||||||
39,624,723 | Calyon, N.A., 2.50%, 5/1/08† | $ | 39,624,723 | |||||
13,790,828 | Chase Bank U.S.A., N.A., 2.25%, 5/1/08† | 13,790,828 | ||||||
43,587,195 | Danske Bank A/S Cayman, N.A., 2.53%, 5/1/08† | 43,587,195 | ||||||
27,737,306 | Deutsche Bank A.G., N.A., 2.30%, 5/1/08† | 27,737,306 | ||||||
39,624,723 | Dexia Bank S.A. Brussels, N.A., 2.50%, 5/1/08† | 39,624,723 | ||||||
39,624,723 | ING Bank N.V. Amsterdam, N.A., 2.4375%, 5/1/08† | 39,624,723 | ||||||
39,624,723 | Lloyd’s TSB Bank PLC London, N.A., 2.45%, 5/1/08† | 39,624,723 | ||||||
5,862,537 | Natixis, N.A., 2.38%, 5/1/08† | 5,862,537 | ||||||
39,624,723 | Natixis, N.A., 2.43%, 5/1/08† | 39,624,723 | ||||||
39,624,723 | Nordea Bank PLC Finland, N.A., 2.50%, 5/1/08† | 39,624,723 | ||||||
39,115,616 | Svenska Handelsbanken, N.A., 2.40%, 5/1/08† | 39,115,616 | ||||||
39,624,723 | Wells Fargo Bank, N.A., 2.375%, 5/1/08† | 39,624,723 | ||||||
Total Other Securities (cost $788,723,562) | 788,723,562 | |||||||
Repurchase Agreements – 6.3% | ||||||||
$ | 323,624,000 | Calyon, New York Branch, 1.75%, dated 4/30/08, maturing 5/1/08, to be repurchased at $323,639,732, collateralized by $256,075,900 in U.S. Treasuries 2.375% – 8.125%, 2/15/10 – 8/15/19 with a value of $330,096,593 | 323,624,000 | |||||
121,369,000 | ING Financial Markets LLC, 1.75%, dated 4/30/08, maturing 5/1/08, to be repurchased at $121,374,900, collateralized by $117,291,876, in U.S. Treasuries 4.00% – 4.50%, 11/15/14 – 2/15/16 with a value of $123,798,208 | 121,369,000 | ||||||
Total Repurchase Agreements (cost $444,993,000) | 444,993,000 | |||||||
Total Investments (total cost $7,418,497,087) – 111.8% | 7,864,994,848 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (11.8)% | (827,134,420) | |||||||
Net Assets – 100% | $ | 7,037,860,428 | ||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 201,707,148 | 2.6% | |||||
Canada | 76,689,700 | 1.0% | ||||||
Cayman Islands | 112,356,722 | 1.4% | ||||||
United States†† | 7,474,241,278 | 95.0% | ||||||
Total | $ | 7,864,994,848 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (79.3% excluding Short-Term Securities and Other Securities) |
Schedule of Written Options – Puts | Value | |||
iShares Russell Mid-Cap Value Index expires May 2008 8,343 contracts exercise price $110.00 | $ | (1) | ||
iShares Russell Mid-Cap Value Index expires July 2008 3,012 contracts exercise price $122.74 | (567,039) | |||
Russell Mid-Cap Value Index expires June 2008 624 contracts exercise price $876.11 | (252,096) | |||
Russell Mid-Cap Value Index expires June 2008 155,166 contracts exercise price $878.99 | (303,303) | |||
Russell Mid-Cap Value Index expires June 2008 121,825 contracts exercise price $890.96 | (300,603) | |||
Russell Mid-Cap Value Index expires June 2008 82,638 contracts exercise price $900.00 | (245,633) | |||
Russell Mid-Cap Value Index expires July 2008 83,016 contracts exercise price $880.37 | (405,517) | |||
Total Written Options – Puts | ||||
(Premiums received $13,227,310) | $ | (2,074,192) | ||
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2008 63
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Janus Small Cap Value Fund (unaudited) (closed to new investors) | Ticker: JSCVX |
Fund Snapshot
This fund searches for small, out-of-favor companies misunderstood by the broader investment community.
Managed by
Perkins, Wolf, McDonnell
and Company, LLC
Perkins, Wolf, McDonnell
and Company, LLC
Performance Overview
During the six months ended April 30, 2008, Janus Small Cap Value Fund’s Investor Shares and Institutional Shares returned (6.03)% and (5.96)%, respectively, versus a return of (11.55)% for the Fund’s benchmark, the Russell 2000® Value Index.
During the six-month period ended April 30, 2008, the stock market suffered a strong decline as the idea of an economic recession this year became the consensus viewpoint. The U.S. Federal Reserve (Fed) attempted to stabilize equity markets in late January with an unprecedented inter-meeting 75-basis point emergency interest rate cut. The Fed followed that up with more easing in February, March and April. Market volatility remained elevated after years of calm amid heightened credit concerns, illustrating how delicate the credit markets have become and the prevailing nervousness in the financial markets. The latest attempts by the Fed to address the credit crisis seemed to be working to steady financial markets somewhat as some investor sentiment gauges recently displayed evidence of cautious optimism.
In this environment our standard risk-sensitive investment approach, emphasizing balance sheet strength, strong free cash flow and stocks pricing in fairly low expectations, has allowed the Fund to hold up relatively well. As was the case last period, most of our outperformance was attributable to positive stock selection.
Holdings That Contributed To Performance
The industrials sector had the best performance versus the benchmark over the last six months. Agricultural distributor UAP Holding, one of the five largest positions in the portfolio during the period, was also among the strongest contributors after fertilizer producer Agrium announced in late February it would purchase the company at a 30% premium to its prior day closing price. Separately, business service provider Navigant Consulting was also among the strongest contributors after management cited an increase in their project pipeline due to an increase in subprime litigation. Railroad and trucking stocks also outperformed, and our overweight in the group was a positive, as investors began rotating into stocks that typically lead during the early stages of an economic turnaround. Kansas City Southern, Heartland Express, and Saia all benefited from this trend. We eliminated Saia from the Fund as it reached our price target.
Within health care, Perrigo, a generic drug manufacturer, delivered strong returns during the period after announcing progress in their pipeline that should help drive growth going forward. We built our position in the company over many years, believing the stock to be undervalued with respect to operational improvements and growth potential in their generic business. The stock was among our 10 largest holdings at the beginning of the period, but we have sold two thirds of our shares as much of the valuation gap has disappeared. While information technology was one of the worst performing sectors in the benchmark, our holdings within the sector declined less than those within the benchmark. Automated teller manufacturer Diebold was the largest individual contributor in this sector. Early in the first quarter of 2008, because of a very attractive free cash flow yield, confidence in the company’s franchise and long-term outlook, we more than doubled our position in the stock despite disappointing earnings and what we believed to be minor accounting issues. In February, aerospace equipment company United Technologies made a cash bid for the company at over a 60% premium to Diebold’s market price.
Holdings That Detracted From Performance
Within information technology, Global Positioning System provider, SiRF Technology Holdings underperformed after reporting disappointing quarterly results, citing margin compression and lack of pricing power. We decided to eliminate our position in SiRF due to the deterioration in the company’s fundamentals.
After strong relative performance in 2007, our financial holdings were down in line with the benchmark for the period due primarily to regional banks Boston Private Financial Holdings and South Financial Group. After telling investors that their portfolio remained in good shape in January, Boston Private surprised investors a month later by announcing credit problems in one of their divisions. We decided to exit our position in Boston Private as we felt less comfortable with the strength of the balance sheet if further problems were to arise. The shares of South Financial Group followed a similar path. We sold nearly half of the shares we owned in the first quarter of 2008 at higher prices as the credit problems of their southeastern peers had yet to be recognized by the bank. With their first quarter earnings report came recognition and a substantially lower stock price. An announced secondary offering and reduced dividend caused further declines. However, we believe these actions improved
64 Janus Core, Risk-Managed and Value Funds April 30, 2008
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(unaudited)
the capital structure of the bank, and with the stock trading well below tangible book, we added to our position late in the period.
The Fund continues to be underweight in the financials sector, as it generally has been for the last four years. Considering the sector’s approximately 33% weight in the benchmark at the end of the period, and the fact that next to consumer discretionary stocks, financials have shown the steepest price decline over the last year, the relative benefit of our position recently is obvious. It could be asked why we have yet to become even equally weighted given the declines and improving valuations relative to book value and longer-term earnings power. Outside of the largest overall detractor from performance, Boston Private Financial Holdings, where credibility became an issue, our stock selection has been very good for the last year. This is primarily due to being disciplined in identifying potential downside risk before getting caught up in the promise of upside in a recovery. We believe patience is warranted as the financial markets continue to sort out the credit issues, which could take some time. We will continue to evaluate opportunities on a case-by-case, bottom-up basis.
Market Outlook
We believe the market has rebounded nicely since the March lows, but it is unclear how long this respite will continue. The market has digested significant negative news and the Fed has been very aggressive in trying to address financial problems. However, we suspect the economy and earnings could decline more than expected and, in any case, any recovery is likely to be slow. We believe the financial system’s leverage will take a long time to be rebalanced and is still subject to significant unanticipated shocks.
With very few exceptions, we believe our purchases are of companies with better-than-average balance sheets, with a greater likelihood of positive free cash flow even if earnings disappoint, and with stock prices that are nearing their 12-month lows, reflecting reduced expectations. Our ability to uncover stocks with these characteristics that we believe also have attractive risk/reward relationships, has continued to drive our level of investment. These stocks may or may not fully participate in a short-term market rally, but we believe by doing better in the downturn it is likely they will outperform over the full cycle. We have remained around 90% invested at the end of the six-month period despite near-term economic and market uncertainty as elevated volatility has enabled us to find what we believe to be some good long-term values. However, we are also sensitive to sharply positive swings in the stocks we own and will continue to pare back and sell those positions that approach and reach our modest objectives. We are focused on the long-term and the favorable impact that preservation of capital has on compounding returns for the Fund.
Thank you for your continued investment in Janus Small Cap Value Fund.
Janus Core, Risk-Managed and Value Funds April 30, 2008 65
Table of Contents
Janus Small Cap Value Fund (unaudited)
Janus Small Cap Value Fund At A Glance
5 Top Performers - Holdings
Contribution | ||||
Perrigo Co. | 0.79% | |||
UAP Holding Corp. | 0.64% | |||
Navigant Consulting, Inc. | 0.41% | |||
Diebold, Inc. | 0.40% | |||
Forest Oil Corp. | 0.36% |
5 Bottom Performers - Holdings
Contribution | ||||
Boston Private Financial Holdings, Inc. | (1.14)% | |||
South Financial Group, Inc. | (0.78)% | |||
Lee Enterprises, Inc. | (0.74)% | |||
HNI Corp. | (0.66)% | |||
SiRF Technology Holdings, Inc. | (0.54)% |
5 Top Performers – Sectors
Fund Weighting | Russell 2000® | |||||||||||
Fund Contribution | (% of Net Assets) | Value Index Weighting | ||||||||||
Industrials | 0.85% | 16.42% | 12.82% | |||||||||
Health Care | 0.43% | 7.79% | 5.83% | |||||||||
Utilities | 0.00% | 0.00% | 5.79% | |||||||||
Energy | 0.00% | 11.97% | 6.45% | |||||||||
Telecommunication Services | (0.09)% | 0.49% | 1.47% |
5 Bottom Performers – Sectors
Fund Weighting | Russell 2000® | |||||||||||
Fund Contribution | (% of Net Assets) | Value Index Weighting | ||||||||||
Financials | (3.16)% | 27.49% | 32.57% | |||||||||
Information Technology | (2.15)% | 14.29% | 12.46% | |||||||||
Consumer Discretionary | (1.85)% | 14.57% | 11.32% | |||||||||
Materials | (0.37)% | 2.99% | 7.45% | |||||||||
Consumer Staples | (0.29)% | 4.02% | 3.84% |
66 Janus Core, Risk-Managed and Value Funds April 30, 2008
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(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2008
Old Republic International Corp. Multi-Line Insurance | 2.9% | |||
Forest Oil Corp. Oil Companies – Exploration and Production | 2.1% | |||
Albany International Corp. – Class A Machinery – General Industrial | 2.0% | |||
F.N.B. Corp. Commercial Banks | 2.0% | |||
Cedar Fair L.P. Resorts and Theme Parks | 1.9% | |||
10.9% |
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19p04.gif)
Emerging markets comprised 1.1% of total net assets.
Top County Allocations – Long Positions (% of Investment Securities)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19t04.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19c04.gif)
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Janus Small Cap Value Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif19m04.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratios – for the fiscal year ended October 31, 2007 | ||||||||||||
Fiscal | One | Five | Ten | Total Annual Fund | Net Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Operating Expenses | Operating Expenses | ||||||||
Janus Small Cap Value Fund(1) | |||||||||||||
Investor Shares | (6.03)% | (3.65)% | 13.60% | 10.13% | 1.03% | 1.03% | |||||||
Institutional Shares | (5.96)% | (3.46)% | 13.84% | 10.42% | 0.99% | 0.82% | |||||||
Russell 2000® Value Index | (11.55)% | (15.13)% | 14.08% | 7.74% | |||||||||
Lipper Quartile | – | 1st | 2nd | 1st | |||||||||
Lipper Ranking – based on total return for Small-Cap Core Funds | – | 84/796 | 214/493 | 25/190 | |||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
Janus Services LLC has contractually agreed to waive the transfer agency fees applicable to the Fund’s Institutional Shares to the level indicated until at least March 1, 2009. Returns shown include fee waivers, if any, and without such waivers, the Fund’s returns would have been lower.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.) Contractual waivers agreed to by Janus Capital, where applicable, are included in the prospectus under “Net Annual Fund Operating Expenses.” All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
68 Janus Core, Risk-Managed and Value Funds April 30, 2008
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(unaudited)
The Fund’s performance may be affected by risks that include those associated with, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and other details.
Funds that invest in Real Estate Investment Trusts (REITs) may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: legal, political, liquidity, interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Funds invest in foreign REITs, the Funds may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Berger Small Cap Value Fund was reorganized into the Fund on April 21, 2003. The returns shown prior to April 21, 2003 for Janus Small Cap Value Fund – Investor Shares are those of Berger Small Cap Value Fund – Investor Shares for the period February 14, 1997 to April 17, 2003 and Berger Small Cap Value Fund – Institutional Shares (then known as The Omni Investment Fund) for periods prior to February 14, 1997. The returns shown for Janus Small Cap Value Fund – Institutional Shares are those of Berger Small Cap Value Fund – Institutional Shares for the periods prior to April 21, 2003.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
Lipper ranking is for the Investor share class only; other classes may have different performance characteristics.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
(1) | Closed to new investors. |
Fund Expenses
The examples below show you the ongoing costs (in dollars) of investing in your Fund and allow you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example - Investor Shares | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 939.70 | $ | 4.87 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.84 | $ | 5.07 | ||||||||
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example - Institutional Shares | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 940.40 | $ | 3.86 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.89 | $ | 4.02 | ||||||||
†Expenses are equal to the annualized expense ratio of 1.01% for Investor Shares and 0.80% for Institutional Shares, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital for Institutional Shares.
Janus Core, Risk-Managed and Value Funds April 30, 2008 69
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Janus Small Cap Value Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Common Stock – 89.5% | ||||||||
Agricultural Chemicals – 1.0% | ||||||||
350,000 | UAP Holding Corp.# | $ | 13,618,500 | |||||
Apparel Manufacturers – 1.2% | ||||||||
575,000 | Carter’s, Inc.*,# | 8,130,500 | ||||||
400,000 | Volcom, Inc.*,# | 7,596,000 | ||||||
15,726,500 | ||||||||
Audio and Video Products – 0.4% | ||||||||
140,000 | Harman International Industries, Inc. | 5,721,800 | ||||||
Automotive – Truck Parts and Equipment – Original – 0.4% | ||||||||
525,000 | Spartan Motors, Inc.# | 4,929,750 | ||||||
Building – Heavy Construction – 0.8% | ||||||||
500,000 | Sterling Construction Company, Inc.* | 10,040,000 | ||||||
Building – Mobile Home and Manufactured Homes – 0.5% | ||||||||
425,000 | Winnebago Industries, Inc.# | 6,838,250 | ||||||
Chemicals – Specialty – 1.8% | ||||||||
400,000 | Lubrizol Corp. | 23,328,000 | ||||||
Commercial Banks – 5.9% | ||||||||
1,550,000 | Colonial BancGroup, Inc.# | 12,617,000 | ||||||
1,700,000 | F.N.B. Corp.# | 26,282,000 | ||||||
625,000 | First Midwest Bancorp, Inc.# | 15,956,250 | ||||||
800,000 | South Financial Group, Inc.# | 4,832,000 | ||||||
1,550,000 | Synovus Financial Corp.# | 18,352,000 | ||||||
78,039,250 | ||||||||
Commercial Services – 0.6% | ||||||||
744,711 | ICT Group, Inc.*,£ | 8,139,691 | ||||||
Commercial Services – Finance – 0.4% | ||||||||
125,000 | Global Payments, Inc. | 5,532,500 | ||||||
Computer Services – 0.5% | ||||||||
250,000 | SRA International, Inc.* | 6,567,500 | ||||||
Computers – Integrated Systems – 1.6% | ||||||||
550,000 | Diebold, Inc. | 21,560,000 | ||||||
Consulting Services – 1.8% | ||||||||
300,000 | CRA International, Inc.*,# | 10,344,000 | ||||||
175,000 | MAXIMUS, Inc.# | 6,636,000 | ||||||
325,000 | Navigant Consulting, Inc.*,# | 6,539,000 | ||||||
23,519,000 | ||||||||
Containers – Paper and Plastic – 0.6% | ||||||||
250,000 | Sonoco Products Co. | 8,237,500 | ||||||
Data Processing and Management – 0.4% | ||||||||
240,000 | Fair Issac Corp. | 5,944,800 | ||||||
Decision Support Software – 0.9% | ||||||||
1,475,000 | Wind River Systems, Inc.* | 12,154,000 | ||||||
Direct Marketing – 0.9% | ||||||||
904,700 | Harte-Hanks Communications, Inc.# | 12,358,202 | ||||||
Distribution/Wholesale – 1.5% | ||||||||
575,000 | Tech Data Corp.* | 19,325,750 | ||||||
Electric Products – Miscellaneous – 0.6% | ||||||||
200,000 | Littelfuse, Inc.* | 7,352,000 | ||||||
Electronic Components – Miscellaneous – 0.9% | ||||||||
1,300,000 | Vishay Intertechnology, Inc.* | 12,285,000 | ||||||
Electronic Components – Semiconductors – 1.2% | ||||||||
400,000 | DSP Group, Inc.* | 5,252,000 | ||||||
250,000 | QLogic Corp.* | 3,990,000 | ||||||
450,000 | Semtech Corp.* | 7,308,000 | ||||||
16,550,000 | ||||||||
Electronic Measuring Instruments – 0.6% | ||||||||
425,000 | Orbotech, Ltd. (U.S. Shares)* | 7,458,750 | ||||||
Engineering – Research and Development Services – 1.5% | ||||||||
500,000 | URS Corp.* | 20,170,000 | ||||||
Enterprise Software/Services – 1.0% | ||||||||
75,000 | Microstrategy, Inc.*,# | 6,654,750 | ||||||
600,000 | Omnicell, Inc.* | 7,212,000 | ||||||
13,866,750 | ||||||||
Fiduciary Banks – 0.4% | ||||||||
180,000 | Wilmington Trust Corp. | 5,918,400 | ||||||
Finance – Investment Bankers/Brokers – 1.2% | ||||||||
700,000 | KBW, Inc.*,# | 16,618,000 | ||||||
Food – Retail – 1.1% | ||||||||
219,800 | Ruddick Corp. | 8,506,260 | ||||||
350,000 | Winn-Dixie Stores, Inc.*,# | 6,205,500 | ||||||
14,711,760 | ||||||||
Footwear and Related Apparel – 2.3% | ||||||||
400,000 | Skechers U.S.A., Inc. – Class A* | 9,460,000 | ||||||
750,000 | Wolverine World Wide, Inc.# | 21,555,000 | ||||||
31,015,000 | ||||||||
Human Resources – 0.7% | ||||||||
425,000 | MPS Group, Inc.* | 4,560,250 | ||||||
260,000 | Resources Connection, Inc.* | 5,254,600 | ||||||
9,814,850 | ||||||||
Instruments – Scientific – 1.3% | ||||||||
650,000 | PerkinElmer, Inc. | 17,264,000 | ||||||
Internet Infrastructure Equipment – 0.9% | ||||||||
580,000 | Avocent Corp.* | 11,315,800 | ||||||
Internet Infrastructure Software – 0.5% | ||||||||
950,000 | RADVision, Ltd. (U.S. Shares)* | 6,545,500 | ||||||
Lasers – Systems and Components – 0.6% | ||||||||
525,000 | Electro Scientific Industries, Inc.* | 8,615,250 | ||||||
Life and Health Insurance – 1.8% | ||||||||
550,000 | Protective Life Corp. | 23,441,000 | ||||||
Machinery – Electrical – 1.3% | ||||||||
475,000 | Regal-Beloit Corp. | 17,617,750 | ||||||
Machinery – General Industrial – 2.0% | ||||||||
750,000 | Albany International Corp. – Class A | 27,225,000 | ||||||
Medical – Generic Drugs – 0.9% | ||||||||
300,000 | Perrigo Co.# | 12,297,000 | ||||||
Medical Imaging Systems – 0.7% | ||||||||
600,000 | Vital Images, Inc.*,# | 9,060,000 | ||||||
Medical Information Systems – 1.0% | ||||||||
146,000 | Cerner Corp.*,# | 6,755,420 | ||||||
350,000 | Computer Programs and Systems, Inc. | 6,657,000 | ||||||
13,412,420 | ||||||||
Medical Instruments – 0.9% | ||||||||
800,000 | AngioDynamics, Inc.* | 11,824,000 | ||||||
See Notes to Schedules of Investments and Financial Statements.
70 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Medical Laser Systems – 0.4% | ||||||||
500,000 | LCA-Vision, Inc.# | $ | 5,055,000 | |||||
Medical Products – 1.1% | ||||||||
600,000 | PSS World Medical, Inc.*,# | 9,882,000 | ||||||
100,000 | West Pharmaceutical Services, Inc. | 4,691,000 | ||||||
14,573,000 | ||||||||
Medical Sterilization Products – 1.0% | ||||||||
500,000 | Steris Corp. | 13,855,000 | ||||||
Metal Processors and Fabricators – 1.5% | ||||||||
380,000 | Kaydon Corp.# | 19,900,600 | ||||||
Multi-line Insurance – 2.9% | ||||||||
2,700,000 | Old Republic International Corp. | 38,745,000 | ||||||
Networking Products – 1.2% | ||||||||
750,000 | Foundry Networks, Inc.* | 9,547,500 | ||||||
262,000 | Polycom, Inc.* | 5,868,800 | ||||||
15,416,300 | ||||||||
Office Furnishings – Original – 1.0% | ||||||||
600,000 | HNI Corp.# | 13,062,000 | ||||||
Oil Companies – Exploration and Production – 3.7% | ||||||||
1,400,000 | Edge Petroleum Corp.*,#,£ | 7,308,000 | ||||||
475,000 | Forest Oil Corp.* | 27,991,750 | ||||||
600,000 | Petrohawk Energy Corp.* | 14,184,000 | ||||||
49,483,750 | ||||||||
Oil Field Machinery and Equipment – 0.9% | ||||||||
160,000 | Lufkin Industries, Inc. | 12,072,000 | ||||||
Oil Refining and Marketing – 0.9% | ||||||||
225,000 | Frontier Oil Corp. | 5,591,250 | ||||||
156,000 | Holly Corp. | 6,470,880 | ||||||
12,062,130 | ||||||||
Paper and Related Products – 2.8% | ||||||||
500,000 | Glatfelter | 7,295,000 | ||||||
175,000 | Potlatch Corp. | 7,841,750 | ||||||
250,000 | Rayonier, Inc.# | 10,507,500 | ||||||
1,000,000 | Temple-Inland, Inc. | 11,670,000 | ||||||
37,314,250 | ||||||||
Pipelines – 3.9% | ||||||||
355,000 | Magellan Midstream Partners L.P.# | 14,441,400 | ||||||
650,000 | Regency Energy Partners L.P.# | 17,894,500 | ||||||
525,000 | Williams Partners L.P.# | 18,973,500 | ||||||
51,309,400 | ||||||||
Poultry – 0.4% | ||||||||
225,000 | Pilgrim’s Pride Corp.# | 5,438,250 | ||||||
Property and Casualty Insurance – 3.6% | ||||||||
600,000 | Infinity Property & Casualty Corp. | 23,256,000 | ||||||
500,000 | RLI Corp.# | 24,000,000 | ||||||
47,256,000 | ||||||||
Publishing – Newspapers – 0.8% | ||||||||
1,450,000 | Lee Enterprises, Inc.# | 11,208,500 | ||||||
Radio – 1.1% | ||||||||
1,400,000 | Entercom Communications Corp.# | 14,840,000 | ||||||
REIT – Manufactured Homes – 2.6% | ||||||||
350,000 | BioMed Realty Trust, Inc. | 9,100,000 | ||||||
125,000 | Equity Lifestyle Properties, Inc. | 6,180,000 | ||||||
250,000 | Mack-Cali Realty Corp. | 9,755,000 | ||||||
225,000 | Parkway Properties, Inc. | 8,923,500 | ||||||
33,958,500 | ||||||||
REIT – Warehouse and Industrial – 0.4% | ||||||||
100,000 | EastGroup Properties, Inc. | 4,771,000 | ||||||
Resorts and Theme Parks – 1.9% | ||||||||
1,100,000 | Cedar Fair L.P.# | 25,938,000 | ||||||
Retail – Apparel and Shoe – 2.2% | ||||||||
200,000 | Brown Shoe Company, Inc. | 3,336,000 | ||||||
850,000 | Foot Locker, Inc. | 10,752,500 | ||||||
225,000 | Men’s Wearhouse, Inc. | 5,991,750 | ||||||
450,000 | Tween Brands, Inc.* | 8,550,000 | ||||||
28,630,250 | ||||||||
Retail – Convenience Stores – 1.7% | ||||||||
1,050,000 | Casey’s General Stores, Inc. | 23,236,500 | ||||||
Retail – Leisure Products – 0.5% | ||||||||
550,000 | MarineMax, Inc.* | 6,270,000 | ||||||
Retail – Propane Distribution – 1.5% | ||||||||
700,000 | Inergy L.P.# | 20,419,000 | ||||||
Retail – Restaurants – 0.7% | ||||||||
1,100,000 | Steak n Shake Co.*,# | 8,712,000 | ||||||
Savings/Loan/Thrifts – 2.8% | ||||||||
1,350,000 | First Niagara Financial Group, Inc.# | 19,480,500 | ||||||
1,150,000 | Provident Financial Services, Inc. | 17,744,500 | ||||||
37,225,000 | ||||||||
Schools – 0.2% | ||||||||
251,810 | Universal Technical Institute* | 2,855,525 | ||||||
Telecommunication Services – 0.9% | ||||||||
850,000 | Harris Stratex Networks, Inc. – Class A* | 8,066,500 | ||||||
300,000 | Premiere Global Services, Inc.* | 4,356,000 | ||||||
12,422,500 | ||||||||
Transportation – Railroad – 1.5% | ||||||||
450,000 | Kansas City Southern*,# | 20,286,000 | ||||||
Transportation – Truck – 0.8% | ||||||||
650,000 | Heartland Express, Inc.# | 10,055,500 | ||||||
Total Common Stock (cost $1,113,994,236) | 1,192,330,178 | |||||||
Other Securities – 17.1% | ||||||||
88,184,647 | Allianz Dresdner Daily Asset Fund† | 88,184,647 | ||||||
34,278,803 | Repurchase Agreements† | 34,278,803 | ||||||
Time Deposits: | ||||||||
8,268,746 | Abbey National Treasury Services, N.A., 2.375%, 5/1/08† | 8,268,746 | ||||||
3,689,162 | ABN-Amro Bank N.V., N.A., 2.26%, 5/1/08† | 3,689,162 | ||||||
4,302,895 | BNP Paribas, New York, N.A., 2.50%, 5/1/08† | 4,302,895 | ||||||
8,605,791 | Calyon, N.A., 2.50%, 5/1/08† | 8,605,791 | ||||||
2,995,124 | Chase Bank U.S.A., N.A., 2.25%, 5/1/08† | 2,995,124 | ||||||
9,466,370 | Danske Bank A/S Cayman, N.A., 2.53%, 5/1/08† | 9,466,370 | ||||||
6,024,053 | Deutsche Bank A.G., N.A., 2.30%, 5/1/08† | 6,024,053 | ||||||
8,605,791 | Dexia Bank S.A. Brussels, N.A., 2.50%, 5/1/08† | 8,605,791 |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2008 71
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Janus Small Cap Value Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Other Securities – (continued) | ||||||||
8,605,791 | ING Bank N.V. Amsterdam, N.A., 2.4375%, 5/1/08† | $ | 8,605,791 | |||||
8,605,791 | Lloyd’s TSB Bank PLC London, N.A., 2.45%, 5/1/08† | 8,605,791 | ||||||
1,273,240 | Natixis, N.A., 2.38%, 5/1/08† | 1,273,240 | ||||||
8,605,791 | Natixis, N.A., 2.43%, 5/1/08† | 8,605,791 | ||||||
8,605,791 | Nordea Bank PLC Finland, N.A., 2.50%, 5/1/08† | 8,605,791 | ||||||
8,495,222 | Svenska Handelsbanken, N.A., 2.40%, 5/1/08† | 8,495,222 | ||||||
8,605,791 | Wells Fargo Bank, N.A., 2.375%, 5/1/08† | 8,605,791 | ||||||
Total Other Securities (cost $227,218,799) | 227,218,799 | |||||||
Repurchase Agreement – 10.4% | ||||||||
$ | 139,101,000 | ING Financial Markets LLC, 1.75%, dated 4/30/08, maturing 5/1/08; to be repurchased at $139,107,762 collateralized by $134,428,208 in U.S. Treasuries; 4.00% – 4.50%, 11/15/14 – 2/15/16; with a value of $141,885,115 (cost $139,101,000) | 139,101,000 | |||||
Total Investments (total cost $1,480,314,035) – 117.0% | 1,558,649,977 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (17.0)% | (226,598,179) | |||||||
Net Assets – 100% | $ | 1,332,051,798 | ||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Israel | $ | 14,004,250 | 0.9% | |||||
United States†† | 1,544,645,727 | 99.1% | ||||||
Total | $ | 1,558,649,977 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (75.6% excluding Short-Term Securities and Other Securities) |
See Notes to Schedules of Investments and Financial Statements.
72 Janus Core, Risk-Managed and Value Funds April 30, 2008
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Janus Core, Risk-Managed and Value Funds April 30, 2008 73
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Statements of Assets and Liabilities
As of April 30, 2008 (unaudited) | Janus Balanced | Janus Contrarian | ||||||||
(all numbers in thousands except net asset value per share) | Fund | Fund | ||||||||
Assets: | ||||||||||
Investments at cost(1) | $ | 3,185,416 | $ | 8,038,053 | ||||||
Unaffiliated investments at value(1) | $ | 3,356,082 | $ | 9,348,269 | ||||||
Affiliated money market investments | 208,273 | 117,032 | ||||||||
Cash | – | 78 | ||||||||
Cash denominated in foreign currency(2) | 820 | 2,696 | ||||||||
Deposits with broker for short sales | – | 80,113 | ||||||||
Receivables: | ||||||||||
Investments sold | 32,280 | 27,197 | ||||||||
Fund shares sold | 2,939 | 7,373 | ||||||||
Dividends | 3,682 | 14,816 | ||||||||
Interest | 15,877 | 1,433 | ||||||||
Non-interested Trustees’ deferred compensation | 49 | 145 | ||||||||
Other assets | 23 | 719 | ||||||||
Forward currency contracts | 97 | 3,082 | ||||||||
Total Assets | 3,620,122 | 9,602,953 | ||||||||
Liabilities: | ||||||||||
Payables: | ||||||||||
Short sales, at value(3) | – | 84,006 | ||||||||
Options written, at value(4) | – | – | ||||||||
Collateral for securities loaned (Note 1) | 699,443 | 1,158,777 | ||||||||
Due to Custodian | 132 | – | ||||||||
Investments purchased | 83,400 | 26,891 | ||||||||
Fund shares repurchased | 4,183 | 6,260 | ||||||||
Dividends and distributions | 39 | 14 | ||||||||
Advisory fees | 1,251 | 5,033 | ||||||||
Transfer agent fees and expenses | 516 | 1,577 | ||||||||
Administrative services fees | N/A | N/A | ||||||||
Non-interested Trustees’ fees and expenses | 24 | 65 | ||||||||
Non-interested Trustees’ deferred compensation fees | 49 | 145 | ||||||||
Accrued expenses | 104 | 178 | ||||||||
Forward currency contracts | 375 | 2,182 | ||||||||
Total Liabilities | 789,516 | 1,285,128 | ||||||||
Net Assets | $ | 2,830,606 | $ | 8,317,825 | ||||||
Net Assets Consist of: | ||||||||||
Capital (par value and paid-in-surplus)* | $ | 2,390,995 | $ | 6,709,091 | ||||||
Undistributed net investment income/(loss)* | 11,980 | 10,444 | ||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | 48,981 | 174,008 | ||||||||
Unrealized appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 378,650 | 1,424,282 | ||||||||
Total Net Assets | $ | 2,830,606 | $ | 8,317,825 | ||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 111,517 | 446,753 | ||||||||
Net Asset Value Per Share | $ | 25.38 | $ | 18.62 | ||||||
Net Assets – Investor Shares | ||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | ||||||||||
Net Asset Value Per Share | ||||||||||
Net Assets – Institutional Shares | ||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | ||||||||||
Net Asset Value Per Share |
* | See Note 4 in Notes to Financial Statements. |
(1) | Investments at cost and value include $681,898,039, $1,119,782,504, $50,406,331, $446,720,361, $15,156,089, $766,075,047 and $218,327,664 of securities loaned for Janus Balanced Fund, Janus Contrarian Fund, Janus Fundamental Equity Fund, Janus Growth and Income Fund, INTECH Risk-Managed Stock Fund, Janus Mid Cap Value Fund and Janus Small Cap Value Fund, respectively (Note 1). | |
(2) | Includes cost of $821,922, $2,709,652, $300,633, and $16,242,710 for Janus Balanced Fund, Janus Contrarian Fund, Janus Fundamental Equity Fund and Janus Growth and Income Fund, respectively. | |
(3) | Includes proceeds of $80,113,459 on short sales for Janus Contrarian Fund. | |
(4) | Includes premiums of $13,227,310 on written options for Janus Mid Cap Value Fund. |
See Notes to Financial Statements.
74 Janus Core, Risk-Managed and Value Funds April 30, 2008
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Janus Growth | ||||||||||||||||||||
Janus Fundamental | and | INTECH Risk-Managed | Janus Mid Cap | Janus Small Cap | ||||||||||||||||
Equity Fund | Income Fund | Stock Fund | Value Fund | Value Fund | ||||||||||||||||
$ | 923,618 | $ | 5,465,903 | $ | 374,817 | $ | 7,418,497 | $ | 1,480,314 | |||||||||||
$ | 969,280 | $ | 5,845,173 | $ | 405,351 | $ | 7,864,995 | $ | 1,558,650 | |||||||||||
10,884 | 375,830 | – | – | – | ||||||||||||||||
151 | 366 | – | 2,214 | 1,325 | ||||||||||||||||
301 | 16,240 | – | – | – | ||||||||||||||||
– | – | – | – | – | ||||||||||||||||
337 | 8,674 | 12,540 | 21,540 | 17,608 | ||||||||||||||||
250 | 1,261 | 54 | 15,120 | 520 | ||||||||||||||||
1,191 | 11,425 | 413 | 7,381 | 756 | ||||||||||||||||
18 | 892 | 5 | 164 | 66 | ||||||||||||||||
16 | 101 | 7 | 123 | 23 | ||||||||||||||||
4 | 32 | 1 | 32 | 9 | ||||||||||||||||
11 | 30 | – | – | – | ||||||||||||||||
982,443 | 6,260,024 | 418,371 | 7,911,569 | 1,578,957 | ||||||||||||||||
– | – | – | – | – | ||||||||||||||||
– | – | – | 2,074 | – | ||||||||||||||||
51,952 | 462,671 | 15,579 | 788,724 | 227,219 | ||||||||||||||||
– | – | 592 | – | – | ||||||||||||||||
– | 3,543 | 10,667 | 64,721 | 17,788 | ||||||||||||||||
363 | 4,905 | 597 | 12,007 | 905 | ||||||||||||||||
1 | – | 2 | – | – | ||||||||||||||||
454 | 2,902 | 101 | 4,210 | 653 | ||||||||||||||||
201 | 1,111 | 111 | 1,446 | 142 | ||||||||||||||||
N/A | N/A | 16 | 281 | 161 | ||||||||||||||||
9 | 53 | 5 | 56 | 14 | ||||||||||||||||
16 | 101 | 7 | 123 | 23 | ||||||||||||||||
75 | 388 | 64 | 67 | – | ||||||||||||||||
15 | 2,453 | – | – | – | ||||||||||||||||
53,086 | 478,127 | 27,741 | 873,709 | 246,905 | ||||||||||||||||
$ | 929,357 | $ | 5,781,897 | $ | 390,630 | $ | 7,037,860 | $ | 1,332,052 | |||||||||||
$ | 803,813 | $ | 5,137,794 | $ | 368,941 | $ | 6,323,655 | $ | 1,167,218 | |||||||||||
3,270 | 14,402 | 1,465 | 25,603 | 9,596 | ||||||||||||||||
65,731 | (122,984) | (10,311) | 230,940 | 76,900 | ||||||||||||||||
56,543 | 752,685 | 30,535 | 457,662 | 78,338 | ||||||||||||||||
$ | 929,357 | $ | 5,781,897 | $ | 390,630 | $ | 7,037,860 | $ | 1,332,052 | |||||||||||
37,598 | 167,311 | 27,349 | ||||||||||||||||||
$ | 24.72 | $ | 34.56 | $ | 14.28 | |||||||||||||||
6,216,349 | 669,300 | |||||||||||||||||||
277,357 | 30,673 | |||||||||||||||||||
$ | 22.41 | $ | 21.82 | |||||||||||||||||
$ | 821,511 | $ | 662,752 | |||||||||||||||||
36,396 | 29,987 | |||||||||||||||||||
$ | 22.57 | $ | 22.10 |
See Notes to Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2008 75
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Statements of Operations
For the six-month period ended April 30, 2008 (unaudited) | Janus Balanced | Janus Contrarian | ||||||||
(all numbers in thousands) | Fund | Fund | ||||||||
Investment Income: | ||||||||||
Interest | $ | 26,098 | $ | 275 | ||||||
Securities lending income | 2,247 | 6,606 | ||||||||
Dividends | 16,544 | 50,930 | ||||||||
Dividends from affiliates | 1,805 | 3,708 | ||||||||
Foreign tax withheld | (1,164) | (3,524) | ||||||||
Total Investment Income | 45,530 | 57,995 | ||||||||
Expenses: | ||||||||||
Advisory fees | 7,371 | 29,902 | ||||||||
Transfer agent fees and expenses | 2,857 | 8,535 | ||||||||
Registration fees | 45 | 107 | ||||||||
Custodian fees | 67 | 298 | ||||||||
Professional fees | 12 | 16 | ||||||||
Non-interested Trustees’ fees and expenses | 21 | 72 | ||||||||
Printing expenses | 40 | 156 | ||||||||
Administrative services fees | N/A | N/A | ||||||||
Other expenses | 122 | 441 | ||||||||
Non-recurring costs (Note 2) | 1 | – | ||||||||
Cost assumed by Janus Capital Management LLC (Note 2) | (1) | – | ||||||||
Total Expenses | 10,535 | 39,527 | ||||||||
Expense and Fee Offset | (57) | (477) | ||||||||
Net Expenses | 10,478 | 39,050 | ||||||||
Less: Excess Expense Reimbursement | – | – | ||||||||
Net Expenses after Expense Reimbursement | 10,478 | 39,050 | ||||||||
Net Investment Income/(Loss) | 35,052 | 18,945 | ||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | ||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 59,420 | 230,726 | ||||||||
Net realized gain/(loss) from options contracts | – | 37,324 | ||||||||
Net realized gain/(loss) from swap contracts | – | – | ||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (141,491) | (955,748) | ||||||||
Payment from affiliate (Note 2) | 1 | 37 | ||||||||
Net Gain/(Loss) on Investments | (82,070) | (687,661) | ||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (47,018) | $ | (668,716) |
See Notes to Financial Statements.
76 Janus Core, Risk-Managed and Value Funds April 30, 2008
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Janus Growth | ||||||||||||||||||||
Janus Fundamental | and | INTECH Risk-Managed | Janus Mid Cap | Janus Small Cap | ||||||||||||||||
Equity Fund | Income Fund | Stock Fund | Value Fund | Value Fund | ||||||||||||||||
$ | 17 | $ | 550 | $ | – | $ | 3,859 | $ | 1,387 | |||||||||||
173 | 840 | 13 | 2,202 | 568 | ||||||||||||||||
10,829 | 67,821 | 5,070 | 86,789 | 13,082 | ||||||||||||||||
371 | 6,065 | 15 | 2,080 | 731 | ||||||||||||||||
(284) | (2,901) | (1) | (51) | – | ||||||||||||||||
11,106 | 72,375 | 5,097 | 94,879 | 15,768 | ||||||||||||||||
2,898 | 18,379 | 716 | 25,186 | 4,900 | ||||||||||||||||
1,108 | 6,495 | 527 | 6,834 | 1,377 | ||||||||||||||||
20 | 46 | 22 | 95 | 33 | ||||||||||||||||
58 | 57 | 26 | 69 | 33 | ||||||||||||||||
11 | 15 | 16 | 20 | 30 | ||||||||||||||||
7 | 45 | 2 | 44 | 8 | ||||||||||||||||
32 | 132 | 21 | 77 | 31 | ||||||||||||||||
N/A | N/A | 108 | 1,620 | 341 | ||||||||||||||||
98 | 421 | 56 | 211 | 70 | ||||||||||||||||
– | – | – | – | – | ||||||||||||||||
– | – | – | – | – | ||||||||||||||||
4,232 | 25,590 | 1,494 | 34,156 | 6,823 | ||||||||||||||||
(25) | (133) | (20) | (120) | (39) | ||||||||||||||||
4,207 | 25,457 | 1,474 | 34,036 | 6,784 | ||||||||||||||||
– | – | – | (1,000) | (631) | ||||||||||||||||
4,207 | 25,457 | 1,474 | 33,036 | 6,153 | ||||||||||||||||
6,899 | 46,918 | 3,623 | 61,843 | 9,615 | ||||||||||||||||
70,274 | (38,516) | (9,124) | 193,888 | 72,139 | ||||||||||||||||
(215) | (14,682) | – | 12,868 | – | ||||||||||||||||
(1,608) | (10,357) | – | – | – | ||||||||||||||||
(197,066) | (826,420) | (40,087) | (495,027) | (179,532) | ||||||||||||||||
10 | 4 | 1 | 7 | 1 | ||||||||||||||||
(128,605) | (889,971) | (49,210) | (288,264) | (107,392) | ||||||||||||||||
$ | (121,706) | $ | (843,053) | $ | (45,587) | $ | (226,421) | $ | (97,777) |
See Notes to Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2008 77
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Statements of Changes in Net Assets
For the six-month period ended April 30, 2008 (unaudited) | Janus Balanced | |||||||||
and for the fiscal year ended October 31, 2007 | Fund | |||||||||
(all numbers in thousands) | 2008 | 2007 | ||||||||
Operations: | ||||||||||
Net investment income/(loss) | $ | 35,052 | $ | 60,645 | ||||||
Net realized gain/(loss) from investment and foreign currency transactions | 59,420 | 186,576 | ||||||||
Net realized gain/(loss) from futures contracts | – | – | ||||||||
Net realized gain/(loss) from options contracts | – | – | ||||||||
Net realized gain/(loss) from swap contracts | – | – | ||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (141,491) | 112,269 | ||||||||
Payment from affiliate (Note 2) | 1 | 13 | ||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (47,018) | 359,503 | ||||||||
Dividends and Distributions to Shareholders: | ||||||||||
Net investment income * | (32,193) | (58,467) | ||||||||
Net realized gain/(loss) from investment transactions* | (87,037) | – | ||||||||
Net (Decrease) from Dividends and Distributions | (119,230) | (58,467) | ||||||||
Capital Share Transactions: | ||||||||||
Shares sold | 381,289 | 467,440 | ||||||||
Redemption fees | – | – | ||||||||
Reinvested dividends and distributions | 117,802 | 57,665 | ||||||||
Shares repurchased | (288,692) | (517,923) | ||||||||
Net Increase/(Decrease) from Capital Share Transactions | 210,399 | 7,182 | ||||||||
Net Increase/(Decrease) in Net Assets | 44,151 | 308,218 | ||||||||
Net Assets: | ||||||||||
Beginning of period | 2,786,455 | 2,478,237 | ||||||||
End of period | $ | 2,830,606 | $ | 2,786,455 | ||||||
Undistributed net investment income/(loss)* | $ | 11,980 | $ | 9,122 |
* | See Note 4 in Notes to Financial Statements. |
See Notes to Financial Statements.
78 Janus Core, Risk-Managed and Value Funds April 30, 2008
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Janus Growth | ||||||||||||||||||||||||||||||||
Janus Contrarian | Janus Fundamental | and | INTECH Risk-Managed | |||||||||||||||||||||||||||||
Fund | Equity Fund | Income Fund | Stock Fund | |||||||||||||||||||||||||||||
2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | |||||||||||||||||||||||||
$ | 18,945 | $ | 23,922 | $ | 6,899 | $ | 5,115 | $ | 46,918 | $ | 133,685 | $ | 3,623 | $ | 5,895 | |||||||||||||||||
230,726 | 459,419 | 70,274 | 79,540 | (38,516) | 669,414 | (9,124) | 39,597 | |||||||||||||||||||||||||
– | – | – | – | – | – | – | 1,508 | |||||||||||||||||||||||||
37,324 | 8,366 | (215) | 331 | (14,682) | 764 | – | – | |||||||||||||||||||||||||
– | – | (1,608) | 34 | (10,357) | 212 | – | – | |||||||||||||||||||||||||
(955,748) | 1,348,396 | (197,066) | 107,998 | (826,420) | 443,645 | (40,087) | 13,256 | |||||||||||||||||||||||||
37 | 134 | 10 | 10 | 4 | 24 | 1 | 7 | |||||||||||||||||||||||||
(668,716) | 1,840,237 | (121,706) | 193,028 | (843,053) | 1,247,744 | (45,587) | 60,263 | |||||||||||||||||||||||||
(31,225) | (49,011) | (8,163) | (4,601) | (50,001) | (107,846) | (6,952) | (3,639) | |||||||||||||||||||||||||
(352,470) | (430,951) | (81,266) | (1,001) | (673,823) | – | (40,538) | (26,902) | |||||||||||||||||||||||||
(383,695) | (479,962) | (89,429) | (5,602) | (723,824) | (107,846) | (47,490) | (30,541) | |||||||||||||||||||||||||
1,504,435 | 3,954,382 | 55,387 | 195,559 | 239,966 | 628,863 | 20,071 | 140,109 | |||||||||||||||||||||||||
– | – | – | – | – | – | 15 | 80 | |||||||||||||||||||||||||
375,038 | 469,017 | 87,707 | 5,486 | 709,838 | 105,416 | 46,886 | 30,089 | |||||||||||||||||||||||||
(961,445) | (1,334,395) | (145,529) | (263,859) | (708,924) | (1,547,100) | (96,102) | (185,745) | |||||||||||||||||||||||||
918,028 | 3,089,004 | (2,435) | (62,814) | 240,880 | (812,821) | (29,130) | (15,467) | |||||||||||||||||||||||||
(134,383) | 4,449,279 | (213,570) | 124,612 | (1,325,997) | 327,077 | (122,207) | 14,255 | |||||||||||||||||||||||||
8,452,208 | 4,002,929 | 1,142,927 | 1,018,315 | 7,107,894 | 6,780,817 | 512,837 | 498,582 | |||||||||||||||||||||||||
$ | 8,317,825 | $ | 8,452,208 | $ | 929,357 | $ | 1,142,927 | $ | 5,781,897 | $ | 7,107,894 | $ | 390,630 | $ | 512,837 | |||||||||||||||||
$ | 10,444 | $ | 22,724 | $ | 3,270 | $ | 4,534 | $ | 14,402 | $ | 17,485 | $ | 1,465 | $ | 4,794 |
See Notes to Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2008 79
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Statements of Changes in Net Assets
For the six-month period ended April 30, 2008 (unaudited) | Janus Mid Cap | Janus Small Cap | ||||||||||||||||
and for the fiscal year ended October 31, 2007 | Value Fund | Value Fund | ||||||||||||||||
(all numbers in thousands) | 2008 | 2007 | 2008 | 2007 | ||||||||||||||
Operations: | ||||||||||||||||||
Net investment income/(loss) | $ | 61,843 | $ | 101,789 | $ | 9,615 | $ | 22,193 | ||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 193,888 | 713,735 | 72,139 | 225,622 | ||||||||||||||
Net realized gain/(loss) from options contracts | 12,868 | (498) | – | – | ||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (495,027) | 150,816 | (179,532) | (59,019) | ||||||||||||||
Payment from affiliate (Note 2) | 7 | 24 | 1 | 6 | ||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (226,421) | 965,866 | (97,777) | 188,802 | ||||||||||||||
Dividends and Distributions to Shareholders: | ||||||||||||||||||
Net investment income * | ||||||||||||||||||
Investor Shares | (88,491) | (65,897) | (9,322) | (16,023) | ||||||||||||||
Institutional Shares | (13,054) | (14,793) | (9,089) | (14,570) | ||||||||||||||
Net realized gain/(loss) from investment transactions* | ||||||||||||||||||
Investor Shares | (603,956) | (339,400) | (116,273) | (171,007) | ||||||||||||||
Institutional Shares | (90,114) | (69,308) | (107,401) | (140,006) | ||||||||||||||
Net Decrease from Dividends and Distributions | (795,615) | (489,398) | (242,085) | (341,606) | ||||||||||||||
Capital Share Transactions: | ||||||||||||||||||
Shares sold | ||||||||||||||||||
Investor Shares | 1,329,889 | 1,338,601 | 44,948 | 99,977 | ||||||||||||||
Institutional Shares | 52,411 | 141,235 | 53,255 | 120,930 | ||||||||||||||
Reinvested dividends and distributions | ||||||||||||||||||
Investor Shares | 658,587 | 390,397 | 119,344 | 180,152 | ||||||||||||||
Institutional Shares | 100,575 | 81,872 | 114,053 | 148,742 | ||||||||||||||
Shares repurchased | ||||||||||||||||||
Investor Shares | (778,872) | (1,414,342) | (132,586) | (533,685) | ||||||||||||||
Institutional Shares | (80,196) | (486,223) | (112,746) | (354,565) | ||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | 1,282,394 | 51,540 | 86,268 | (338,449) | ||||||||||||||
Net Increase/(Decrease) in Net Assets | 260,358 | 528,008 | (253,594) | (491,253) | ||||||||||||||
Net Assets: | ||||||||||||||||||
Beginning of period | 6,777,502 | 6,249,494 | 1,585,646 | 2,076,899 | ||||||||||||||
End of period | $ | 7,037,860 | $ | 6,777,502 | $ | 1,332,052 | $ | 1,585,646 | ||||||||||
Undistributed net investment income/(loss)* | $ | 25,603 | $ | 65,305 | $ | 9,596 | $ | 18,392 |
* | See Note 4 in Notes to Financial Statements. |
See Notes to Financial Statements.
80 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
Financial Highlights
For a share outstanding during the | ||||||||||||||||||||||||||
six-month period ended April 30, 2008 (unaudited) | Janus Balanced Fund | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $27.00 | $24.07 | $21.62 | $20.33 | $19.34 | $18.08 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .32 | .59 | .43 | .42 | .38 | .38 | ||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | (.80) | 2.91 | 2.45 | 1.28 | .99 | 1.28 | ||||||||||||||||||||
Total from Investment Operations | (.48) | 3.50 | 2.88 | 1.70 | 1.37 | 1.66 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.30) | (.57) | (.43) | (.41) | (.38) | (.40) | ||||||||||||||||||||
Distributions (from capital gains)* | (.84) | – | – | – | – | – | ||||||||||||||||||||
Payment from affiliate | –(1) | –(1) | –(1) | –(1) | –(1) | – | ||||||||||||||||||||
Total Distributions and Other | (1.14) | (.57) | (.43) | (.41) | (.38) | (.40) | ||||||||||||||||||||
Net Asset Value, End of Period | $25.38 | $27.00 | $24.07 | $21.62 | $20.33 | $19.34 | ||||||||||||||||||||
Total Return** | (1.72)%(2) | 14.73%(2) | 13.41%(2) | 8.43%(2) | 7.11%(2) | 9.34% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $2,830,606 | $2,786,455 | $2,478,237 | $2,507,307 | $2,849,423 | $3,928,565 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $2,711,984 | $2,593,935 | $2,499,295 | $2,720,829 | $3,234,587 | $4,004,101 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.78% | 0.79% | 0.82% | 0.80% | 0.87% | 0.89% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.78% | 0.79% | 0.81% | 0.79% | 0.87% | 0.88% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.60% | 2.34% | 1.85% | 1.93% | 1.82% | 2.00% | ||||||||||||||||||||
Portfolio Turnover Rates*** | 80% | 60% | 50% | 47% | 45% | 73% |
For a share outstanding during the | ||||||||||||||||||||||||||
six-month period ended April 30, 2008 (unaudited) | Janus Contrarian Fund | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $21.19 | $17.44 | $14.20 | $11.74 | $9.97 | $6.95 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .04 | .06 | .21 | .05 | .01 | – | ||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | (1.65) | 5.71 | 3.25 | 2.44 | 1.76 | 3.03 | ||||||||||||||||||||
Total from Investment Operations | (1.61) | 5.77 | 3.46 | 2.49 | 1.77 | 3.03 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.08) | (.21) | (.04) | (.03) | – | (.01)(5) | ||||||||||||||||||||
Distributions (from capital gains)* | (.88) | (1.81) | (.18) | – | – | – | ||||||||||||||||||||
Payment from affiliate | –(1) | –(1) | –(1) | –(1) | –(1) | – | ||||||||||||||||||||
Total Distributions and Other | (.96) | (2.02) | (.22) | (.03) | – | (.01) | ||||||||||||||||||||
Net Asset Value, End of Period | $18.62 | $21.19 | $17.44 | $14.20 | $11.74 | $9.97 | ||||||||||||||||||||
Total Return** | (7.78)%(2) | 36.17%(2) | 24.60%(2) | 21.19%(2) | 17.75%(2) | 43.57% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $8,317,825 | $8,452,208 | $4,002,929 | $2,906,324 | $2,383,959 | $2,498,836 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $8,115,309 | $6,378,807 | $3,511,568 | $2,716,329 | $2,497,342 | $1,862,723 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.98% | 0.97% | 0.95% | 0.93% | 0.98% | 1.02% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.98% | 0.96% | 0.94% | 0.93% | 0.98% | 1.01% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.47% | 0.38% | 1.41% | 0.45% | 0.07% | (0.17)% | ||||||||||||||||||||
Portfolio Turnover Rates*** | 61% | 28% | 39% | 42% | 30% | 44% |
* | See Note 4 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year or period ended. | |
(2) | During the fiscal year or period ended, Janus Capital and/or Janus Services LLC (“Janus Services”) fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%. | |
(3) | See “Explanations of Charts, Tables and Financial Statements.” | |
(4) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2008, 2007, 2006, 2005 and 2004. | |
(5) | Dividends (from net investment income) include tax return of capital, less than $0.01 per share. |
See Notes to Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2008 81
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Financial Highlights (continued)
For a share outstanding during the | ||||||||||||||||||||||||||
six-month period ended April 30, 2008 (unaudited) | Janus Fundamental Equity Fund | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $30.28 | $25.43 | $22.15 | $18.78 | $17.04 | $14.99 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .19 | .14 | .11 | .11 | .05 | .07 | ||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | (3.34) | 4.85 | 3.24 | 3.34 | 1.75 | 2.09 | ||||||||||||||||||||
Total from Investment Operations | (3.15) | 4.99 | 3.35 | 3.45 | 1.80 | 2.16 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.22) | (.11) | (.07) | (.08) | (.06) | (.11) | ||||||||||||||||||||
Distributions (from capital gains)* | (2.19) | (.03) | – | – | – | – | ||||||||||||||||||||
Payment from affiliate | –(1) | –(1) | –(1) | –(1) | – | – | ||||||||||||||||||||
Total Distributions and Other | (2.41) | (.14) | (.07) | (.08) | (.06) | (.11) | ||||||||||||||||||||
Net Asset Value, End of Period | $24.72 | $30.28 | $25.43 | $22.15 | $18.78 | $17.04 | ||||||||||||||||||||
Total Return** | (10.83)%(2) | 19.71%(2) | 15.15%(2) | 18.44%(3) | 10.61% | 14.54% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $929,357 | $1,142,927 | $1,018,315 | $720,889 | $613,269 | $707,852 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $973,864 | $1,067,882 | $955,696 | $652,913 | $653,639 | $708,023 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 0.87% | 0.87% | 0.92% | 0.90% | 0.97% | 0.97% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Asset***(4) | 0.87% | 0.87% | 0.91% | 0.89% | 0.97% | 0.96% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.42% | 0.48% | 0.49% | 0.50% | 0.24% | 0.40% | ||||||||||||||||||||
Portfolio Turnover Rates*** | 225% | 33% | 46% | 74% | 58% | 77% |
For a share outstanding during the | ||||||||||||||||||||||||||
six-month period ended April 30, 2008 (unaudited) | Janus Growth and Income Fund | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $44.20 | $37.36 | $33.97 | $29.29 | $27.12 | $23.70 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .29 | .63 | .61 | .24 | .07 | .17 | ||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | (5.35) | 6.86 | 3.30 | 4.66 | 2.17 | 3.43 | ||||||||||||||||||||
Total from Investment Operations | (5.06) | 7.49 | 3.91 | 4.90 | 2.24 | 3.60 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.31) | (.65) | (.52) | (.22) | (.07) | (.18) | ||||||||||||||||||||
Distributions (from capital gains)* | (4.27) | – | – | – | – | – | ||||||||||||||||||||
Payment from affiliate | –(1) | –(1) | –(1) | –(1) | –(1) | – | ||||||||||||||||||||
Total Distributions and Other | (4.58) | (.65) | (.52) | (.22) | (.07) | (.18) | ||||||||||||||||||||
Net Asset Value, End of Period | $34.56 | $44.20 | $37.36 | $33.97 | $29.29 | $27.12 | ||||||||||||||||||||
Total Return** | (11.83)%(2) | 20.22%(2) | 11.56%(2) | 16.79%(2) | 8.28%(2) | 15.20% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $5,781,897 | $7,107,894 | $6,780,817 | $5,734,941 | $5,177,210 | $6,003,140 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $6,008,809 | $6,738,311 | $6,677,364 | $5,454,668 | $5,568,170 | $5,715,041 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 0.86% | 0.87% | 0.89% | 0.88% | 0.92% | 0.91% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Asset***(4) | 0.85% | 0.86% | 0.88% | 0.87% | 0.92% | 0.91% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.57% | 1.98% | 1.90% | 0.68% | 0.24% | 0.67% | ||||||||||||||||||||
Portfolio Turnover Rates*** | 85% | 54% | 50% | 38% | 41% | 50% |
* | See Note 4 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year or period ended. | |
(2) | During the fiscal year or period ended, Janus Capital and/or Janus Services fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%. | |
(3) | During the fiscal year ended, Janus Capital and/or Janus Services reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by 0.02%. | |
(4) | See “Explanations of Charts, Tables and Financial Statements.” | |
(5) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2008, 2007, 2006, 2005 and 2004. |
See Notes to Financial Statements.
82 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
For a share outstanding during the | ||||||||||||||||||||||||||
six-month period ended April 30, 2008 (unaudited) | INTECH Risk-Managed Stock Fund | |||||||||||||||||||||||||
and through each fiscal year or period ended October 31 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003(1) | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $17.38 | $16.46 | $15.28 | $13.98 | $12.44 | $10.00 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .13 | .20 | .12 | .12 | .08 | .01 | ||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | (1.57) | 1.71 | 1.96 | 1.89 | 1.75 | 2.43 | ||||||||||||||||||||
Total from Investment Operations | (1.44) | 1.91 | 2.08 | 2.01 | 1.83 | 2.44 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.24) | (.12) | (.13) | (.08) | (.03) | – | ||||||||||||||||||||
Dividends (from capital gains)* | (1.42) | (.87) | (.77) | (.63) | (.26) | – | ||||||||||||||||||||
Redemption Fees | –(2) | –(2) | –(2) | –(2) | –(2) | –(2) | ||||||||||||||||||||
Payment from affiliate | –(3) | –(3) | – | – | – | – | ||||||||||||||||||||
Total Distributions and Other | (1.66) | (.99) | (.90) | (.71) | (.29) | – | ||||||||||||||||||||
Net Asset Value, End of Period | $14.28 | $17.38 | $16.46 | $15.28 | $13.98 | $12.44 | ||||||||||||||||||||
Total Return** | (8.84)%(4) | 12.11%(4) | 14.10% | 14.79% | 15.06% | 24.40% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $390,630 | $512,837 | $498,582 | $379,214 | $181,903 | $88,936 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $432,902 | $543,933 | $433,127 | $308,431 | $129,518 | $50,912 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6) | 0.69% | 0.77% | 0.91% | 0.89% | 0.69%(7) | 1.13%(7) | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5) | 0.68% | 0.77% | 0.90% | 0.88% | 0.69% | 1.13% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.68% | 1.08% | 0.81% | 0.92% | 0.72% | 0.24% | ||||||||||||||||||||
Portfolio Turnover Rates*** | 74% | 109% | 108% | 81% | 71% | 39% |
* | See Note 4 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Period February 28, 2003 (inception date) through October 31, 2003. | |
(2) | Redemption fees aggregated less than $.01 on a per share basis for the fiscal year or period ended. | |
(3) | Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year or period ended. | |
(4) | During the fiscal year or period ended, Janus Capital and/or Janus Services fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%. | |
(5) | See “Explanations of Charts, Tables and Financial Statements.” | |
(6) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2008, 2007, 2006, 2005 and 2004. | |
(7) | The ratio was 1.07% in 2004 and 1.78% in 2003 before waiver of certain fees incurred by the Fund. |
See Notes to Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2008 83
Table of Contents
Financial Highlights – Investor Shares
For a share outstanding during the six-month period ended April 30, 2008 (unaudited) | ||||||||||||||||||||||||||||||
and through the fiscal years ended October 31, 2007, 2006, 2005 and 2004, | ||||||||||||||||||||||||||||||
the six-month fiscal period ended October 31, 2003, | Janus Mid Cap Value Fund(1) | |||||||||||||||||||||||||||||
and the seven-month fiscal period ended April 30, 2003 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2003 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $26.56 | $24.87 | $23.24 | $22.22 | $18.94 | $15.15 | $13.71 | |||||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | .22 | .32 | .37 | .14 | .10 | .03 | .03 | |||||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | (1.24) | 3.30 | 3.33 | 2.89 | 3.28 | 3.76 | 1.44 | |||||||||||||||||||||||
Total from Investment Operations | (1.02) | 3.62 | 3.70 | 3.03 | 3.38 | 3.79 | 1.47 | |||||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (.40) | (.31) | (.24) | (.08) | (.10) | – | (.03) | |||||||||||||||||||||||
Distributions (from capital gains)* | (2.73) | (1.62) | (1.83) | (1.93) | – | – | – | |||||||||||||||||||||||
Payment from affiliate | –(2) | –(2) | –(2) | –(2) | –(2) | – | – | |||||||||||||||||||||||
Total Distributions and Other | (3.13) | (1.93) | (2.07) | (2.01) | (.10) | – | (.03) | |||||||||||||||||||||||
Net Asset Value, End of Period | $22.41 | $26.56 | $24.87 | $23.24 | $22.22 | $18.94 | $15.15 | |||||||||||||||||||||||
Total Return** | (3.78)%(3) | 15.38%(3) | 16.88%(3) | 14.26%(4) | 17.92%(3) | 25.02% | 10.73% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $6,216,349 | $5,892,209 | $5,181,449 | $4,188,183 | $2,978,875 | $1,494,209 | $1,033,772 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $5,698,021 | $5,710,028 | $4,806,698 | $3,797,215 | $2,244,533 | $1,262,496 | $962,030 | |||||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6) | 1.06% | 0.86% | 0.93% | 0.93% | 0.94% | 1.08% | 1.14%(7)(8) | |||||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5) | 1.06% | 0.85% | 0.93% | 0.92% | 0.94% | 1.08% | 1.14%(7)(8) | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.87% | 1.49% | 1.69% | 0.67% | 0.56% | 0.45% | 0.44% | |||||||||||||||||||||||
Portfolio Turnover Rates*** | 93% | 95% | 95% | 86% | 91% | 97% | 94% |
For a share outstanding during the six-month period ended April 30, 2008 (unaudited) | ||||||||||||||||||||||||||||||
and through the fiscal years ended October 31, 2007, 2006, 2005 and 2004, | ||||||||||||||||||||||||||||||
the six-month fiscal period ended October 31, 2003, | Janus Small Cap Value Fund(9) | |||||||||||||||||||||||||||||
and the seven-month fiscal period ended April 30, 2003 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2003 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $27.90 | $30.29 | $31.16 | $32.98 | $28.63 | $23.07 | $21.96 | |||||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | .16 | .32 | .39 | .29 | .31 | .09 | .03 | |||||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | (1.83) | 2.57 | 3.49 | 3.16 | 4.16 | 5.47 | 2.07 | |||||||||||||||||||||||
Total from Investment Operations | (1.67) | 2.89 | 3.88 | 3.45 | 4.47 | 5.56 | 2.10 | |||||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (.33) | (.45) | (.30) | (.31) | (.12) | – | (.03) | |||||||||||||||||||||||
Distributions (from capital gains)* | (4.08) | (4.83) | (4.45) | (4.96) | – | – | (.96) | |||||||||||||||||||||||
Payment from affiliate | – | –(2) | –(2) | –(2) | –(2) | – | – | |||||||||||||||||||||||
Total Distributions and Other | (4.41) | (5.28) | (4.75) | (5.27) | (.12) | – | (.99) | |||||||||||||||||||||||
Net Asset Value, End of Period | $21.82 | $27.90 | $30.29 | $31.16 | $32.98 | $28.63 | $23.07 | |||||||||||||||||||||||
Total Return** | (6.03)% | 10.77%(3) | 13.71%(3) | 11.34%(3) | 15.65%(3) | 24.15% | 9.56% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $669,300 | $813,857 | $1,153,144 | $1,338,093 | $1,480,885 | $1,658,312 | $1,476,575 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $702,733 | $974,404 | $1,259,565 | $1,440,206 | $1,630,099 | $1,575,178 | $1,457,263 | |||||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6) | 1.01% | 1.01% | 1.01% | 1.00% | 1.02% | 1.10% | 1.14%(7)(10) | |||||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5) | 1.01% | 1.00% | 1.00% | 0.99% | 1.02% | 1.10% | 1.13%(7)(10) | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.30% | 1.13% | 1.26% | 0.84% | 0.91% | 0.63% | 0.22% | |||||||||||||||||||||||
Portfolio Turnover Rates*** | 93% | 59% | 62% | 44% | 50% | 60% | 45% |
* | See Note 4 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Berger Mid Cap Value Fund prior to reorganization (Note 1). | |
(2) | Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year or period ended. | |
(3) | During the fiscal year or period ended, Janus Capital and/or Janus Services fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%. | |
(4) | During the fiscal year ended, Janus Capital and/or Janus Services fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by 0.01%. | |
(5) | See “Explanations of Charts, Tables and Financial Statements.” | |
(6) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2008, 2007, 2006, 2005 and 2004. | |
(7) | Certain prior year amounts have been reclassified to conform to current year presentation. | |
(8) | The ratio was 1.17% in 2003, before waiver of certain fees incurred by the Fund. | |
(9) | Berger Small Cap Value Fund prior to reorganization (Note 1). | |
(10) | The ratio was 1.20% in 2003 before waiver of certain fees incurred by the Fund. |
See Notes to Financial Statements.
84 Janus Core, Risk-Managed and Value Funds April 30, 2008
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Financial Highlights – Institutional Shares
For a share outstanding during the six-month period ended April 30, 2008 (unaudited) | ||||||||||||||||||||||||||||||
and through the fiscal years ended October 31, 2007, 2006, 2005 and 2004, | ||||||||||||||||||||||||||||||
the six-month fiscal period ended October 31, 2003, | Janus Mid Cap Value Fund(1) | |||||||||||||||||||||||||||||
and the seven-month fiscal period ended April 30, 2003 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2003 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $26.69 | $24.99 | $23.34 | $22.31 | $19.02 | $15.19 | $13.72 | |||||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | .25 | .39 | .39 | .15 | .14 | .05 | .06 | |||||||||||||||||||||||
Net gains/(loss) on securities (both realized and unrealized) | (1.25) | 3.28 | 3.37 | 2.92 | 3.29 | 3.78 | 1.44 | |||||||||||||||||||||||
Total from Investment Operations | (1.00) | 3.67 | 3.76 | 3.07 | 3.43 | 3.83 | 1.50 | |||||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (.39) | (.35) | (.28) | (.11) | (.14) | – | (.03) | |||||||||||||||||||||||
Distributions (from capital gains)* | (2.73) | (1.62) | (1.83) | (1.93) | – | – | – | |||||||||||||||||||||||
Payment from affiliate | –(2) | – | – | –(2) | –(2) | – | – | |||||||||||||||||||||||
Total Distributions and Other | (3.12) | (1.97) | (2.11) | (2.04) | (.14) | – | (.03) | |||||||||||||||||||||||
Net Asset Value, End of Period | $22.57 | $26.69 | $24.99 | $23.34 | $22.31 | $19.02 | $15.19 | |||||||||||||||||||||||
Total Return** | (3.65)%(3) | 15.49% | 17.08% | 14.40%(3) | 18.14%(3) | 25.21% | 10.96% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $821,511 | $885,293 | $1,068,045 | $734,926 | $464,450 | $292,445 | $176,768 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $818,497 | $1,043,566 | $921,447 | $597,747 | $395,466 | $233,830 | $148,748 | |||||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 0.77% | 0.77%(6) | 0.78%(6) | 0.77%(6) | 0.77%(6) | 0.78%(6) | 0.79%(7) | |||||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 0.77% | 0.77% | 0.77% | 0.77% | 0.77% | 0.78% | 0.79%(7) | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.19% | 1.60% | 1.79% | 0.82% | 0.74% | 0.75% | 0.80% | |||||||||||||||||||||||
Portfolio Turnover Rates*** | 93% | 95% | 95% | 86% | 91% | 97% | 94% |
For a share outstanding during the six-month period ended April 30, 2008 (unaudited) | ||||||||||||||||||||||||||||||
and through the fiscal years ended October 31, 2007, 2006, 2005 and 2004, | ||||||||||||||||||||||||||||||
the six-month fiscal period ended October 31, 2003, | Janus Small Cap Value Fund(8) | |||||||||||||||||||||||||||||
and the seven-month fiscal period ended April 30, 2003 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2003 | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | $28.20 | $30.54 | $31.38 | $33.19 | $28.82 | $23.18 | $22.08 | |||||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||||||
Net investment income/(loss) | .17 | .38 | .54 | .37 | .39 | .13 | .07 | |||||||||||||||||||||||
Net gains/(loss) on securities (both realized and unrealized) | (1.84) | 2.61 | 3.43 | 3.17 | 4.18 | 5.51 | 2.06 | |||||||||||||||||||||||
Total from Investment Operations | (1.67) | 2.99 | 3.97 | 3.54 | 4.57 | 5.64 | 2.13 | |||||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (.35) | (.50) | (.36) | (.39) | (.20) | – | (.07) | |||||||||||||||||||||||
Distributions (from capital gains)* | (4.08) | (4.83) | (4.45) | (4.96) | – | – | (.96) | |||||||||||||||||||||||
Payment from affiliate | –(2) | –(2) | –(2) | –(2) | – | – | – | |||||||||||||||||||||||
Total Distributions and Other | (4.43) | (5.33) | (4.81) | (5.35) | (.20) | – | (1.03) | |||||||||||||||||||||||
Net Asset Value, End of Period | $22.10 | $28.20 | $30.54 | $31.38 | $33.19 | $28.82 | $23.18 | |||||||||||||||||||||||
Total Return** | (5.96)%(9) | 11.06%(3) | 13.93%(3) | 11.57%(3) | 15.91% | 24.23% | 9.74% | |||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $662,752 | $771,789 | $923,755 | $1,185,733 | $1,400,160 | $1,497,333 | $1,286,580 | |||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $669,972 | $831,092 | $1,092,751 | $1,323,226 | $1,486,714 | $1,454,779 | $1,245,661 | |||||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 0.80% | 0.80%(10) | 0.80%(10) | 0.79%(10) | 0.81%(10) | 0.82%(10) | 0.87%(7) | |||||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 0.79% | 0.79% | 0.79% | 0.79% | 0.81% | 0.82% | 0.87%(7) | |||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.52% | 1.34% | 1.51% | 1.05% | 1.12% | 0.91% | 0.48% | |||||||||||||||||||||||
Portfolio Turnover Rates*** | 93% | 59% | 62% | 44% | 50% | 60% | 45% |
* | See Note 4 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Berger Mid Cap Value Fund prior to reorganization (Note 1). | |
(2) | Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year or period ended. | |
(3) | During the fiscal year or period ended, Janus Capital and/or Janus Services fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%. | |
(4) | See “Explanations of Charts, Tables and Financial Statements.” | |
(5) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2008, 2007, 2006, 2005 and 2004. | |
(6) | The ratio was 0.81% in 2007, 0.89% in 2006, 0.88% in 2005, 0.90% in 2004 and 1.08% in 2003, before waiver of certain fees incurred by the Fund. | |
(7) | Certain prior year amounts have been reclassified to conform to current year presentation. | |
(8) | Berger Small Cap Value Fund prior to reorganization (Note 1). | |
(9) | During the period ended, Janus Capital and/or Janus Services fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by 0.01%. | |
(10) | The ratio was 0.97% in 2007, 0.97% in 2006, 0.96% in 2005, 0.99% in 2004 and 1.10% in 2003, before waiver of certain fees incurred by the Fund. |
See Notes to Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2008 85
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Notes to Schedules of Investments (unaudited)
Balanced Index | An internally-calculated, hypothetical combination of unmanaged indices that combines total returns from the S&P 500® Index (55%) and Lehman Brothers Government/Credit Index (45%). | |
Lehman Brothers Government/Credit Index | Is composed of all bonds that are investment grade with at least one year until maturity. | |
Lipper Large-Cap Core Funds | Funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) greater than 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Large-cap core funds have more latitude in the companies in which they invest. These funds typically have an average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P 500® Index. | |
Lipper Mid-Cap Value Funds | Funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) less than 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Mid-cap value funds typically have a below-average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P MidCap 400 Index. | |
Lipper Mixed-Asset Target Allocation Moderate Funds | Funds that, by portfolio practice, maintain a mix of between 40%-60% equity securities, with the remainder invested in bonds, cash, and cash equivalents. | |
Lipper Multi-Cap Core Funds | Funds that, by portfolio practice, invest in a variety of market capitalization ranges without concentrating more than 75% of their equity assets in any one market capitalization range over an extended period of time. Multi-cap funds typically have between 25% to 75% of their assets invested in companies with market capitalizations (on a three-year weighted basis) above 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Multi-cap core funds have more latitude in the companies in which they invest. These funds typically have an average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P SuperComposite 1500 Index. | |
Lipper Small-Cap Core Funds | Funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) less than 250% of the dollar-weighted median of the smallest 500 of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Small-cap core funds have more latitude in the companies in which they invest. These funds typically have an average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P SmallCap 600 Index. | |
Morgan Stanley Capital International All Country World IndexSM | Is an unmanaged, free float-adjusted market capitalization weighted index composed of stocks of companies located in countries throughout the world. It is designed to measure equity market performance in global developed and emerging markets. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
Russell 1000® Growth Index | Measures the performance of those Russell 1000® Index companies with higher price-to-book ratios and higher forecasted growth values. | |
Russell 2000® Value Index | Measures the performance of those Russell 2000® companies with lower price-to-book ratios and lower forecasted growth values. | |
Russell Midcap® Value Index | Measures the performance of those Russell Midcap® Index companies with lower price-to-book ratios and lower forecasted growth values. | |
S&P 500® Index | The Standard & Poor’s (“S&P”) 500® Index is a commonly recognized, market-capitalization weighted index of 500 widely held equity securities, designed to measure broad U.S. Equity performance. |
86 Janus Core, Risk-Managed and Value Funds April 30, 2008
Table of Contents
S&P MidCap 400 Index | An unmanaged group of 400 domestic stocks chosen for their market size, liquidity and industry group representation. | |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. | |
ADR | American Depositary Receipt | |
GDR | Global Depositary Receipt | |
LEAPS | Long-Term Equity Anticipation Securities | |
PLC | Public Limited Company | |
REIT | Real Estate Investment Trust | |
SPDR | Standard & Poor’s Depositary Receipt | |
U.S. Shares | Securities of foreign companies trading on an American Stock Exchange. |
* | Non-income-producing security. | |
** | A portion of this security has been segregated by the custodian to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales and/or securities with extended settlement dates. | |
‡ | Rate is subject to change. Rate shown reflects current rate. | |
Ç | Security is traded on a “to-be-announced” basis. | |
# | Loaned security; a portion or all of the security is on loan at April 30, 2008. | |
† | The security is purchased with the cash collateral received from securities on loan (Note 1). |
º º Schedule of Fair Valued Securities (as of April 30, 2008)
Value as a % | |||||||
Value | of Net Assets | ||||||
Janus Growth and Income Fund | |||||||
Bank Tec (144A) | $ | 8,846,705 | 0.2% | ||||
Securities are valued at “fair value” pursuant to procedures adopted by the Fund’s trustees. The Schedule of Fair Valued Securities does not include international equity securities fair valued pursuant to a systematic fair valuation model.
§ Schedule of Restricted and Illiquid Securities (as of April 30, 2008)
Acquisition | Acquisition | Value as a | ||||||||||
Date | Cost | Value | % of Net Assets | |||||||||
Janus Balanced Fund | ||||||||||||
Atlas Copco A.B., 5.60%, senior unsecured notes, due 5/22/17 (144A) | 5/15/07 | $ | 1,454,345 | $ | 1,458,943 | 0.1% | ||||||
Janus Growth and Income Fund | ||||||||||||
Bank Tec (144A) º º | 6/20/07 | $ | 20,221,040 | $ | 8,846,705 | 0.2% | ||||||
The Funds have registration rights for certain restricted securities held as of April 30, 2008. The issuer incurs all registration costs.
Janus Core, Risk-Managed and Value Funds April 30, 2008 87
Table of Contents
Notes to Schedules of Investments (unaudited) (continued)
£ | The Investment Company Act of 1940, as amended, defines affiliates as those companies in which a fund holds 5% or more of the outstanding voting securities at any time during the six-month period ended April 30, 2008. |
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/08 | |||||||||||||||
Janus Contrarian Fund | |||||||||||||||||||||
Ballarpur Industries, Ltd.(1) | 41,261,412 | $ | – | – | $ | – | $ | – | $ | 393,166 | $ | 38,371,548 | |||||||||
Ceridian Corp.* | – | – | 8,512,070 | 158,087,930 | 148,346,590 | – | – | ||||||||||||||
Gramercy Capital Corp. | 2,148,703 | 49,529,961 | – | – | – | 1,353,683 | 40,825,357 | ||||||||||||||
Kinder Morgan Management LLC*(2)(3) | 889,566 | 40,742,465 | 8 | 387 | (387) | – | 170,315,061 | ||||||||||||||
Liberty Global, Inc. – Class A* | – | – | – | – | – | – | 340,069,482 | ||||||||||||||
Owens-Illinois, Inc.* | – | – | 706,545 | 15,363,737 | 25,263,540 | – | 563,202,830 | ||||||||||||||
Playboy Enterprises, Inc. – Class B* | – | – | – | – | – | – | 13,979,216 | ||||||||||||||
St. Joe Co. | 1,259,477 | 52,650,744 | – | – | – | – | 364,122,253 | ||||||||||||||
Vail Resorts, Inc.* | 2,988,565 | 141,283,252 | – | – | – | – | 145,931,629 | ||||||||||||||
48,547,723 | $ | 284,206,422 | 9,218,623 | $ | 173,452,054 | $ | 173,609,743 | $ | 1,746,849 | $ | 1,676,817,376 | ||||||||||
Janus Fundamental Equity Fund | |||||||||||||||||||||
Bank Tec (144A)* | – | $ | – | 412,715 | $ | 3,301,720 | $ | (1,870,704) | $ | – | $ | – | |||||||||
Janus Growth and Income Fund | |||||||||||||||||||||
Bank Tec (144A)* | – | $ | – | – | $ | – | $ | – | $ | – | $ | 8,846,705 | |||||||||
Spansion, Inc. – Class A* | 5,521,592 | 24,847,167 | 12,307,272 | 111,574,672 | (64,314,333) | – | – | ||||||||||||||
5,521,592 | $ | 24,847,167 | 12,307,272 | $ | 111,574,672 | $ | (64,314,333) | $ | – | $ | 8,846,705 | ||||||||||
Janus Mid Cap Value Fund | |||||||||||||||||||||
Avocent Corp.* | 1,360,000 | $ | 25,537,394 | 300,000 | $ | 7,519,772 | $ | (1,843,710) | $ | – | $ | 42,996,879 | |||||||||
Janus Small Cap Value Fund | |||||||||||||||||||||
Edge Petroleum Corp.* | 620,640 | $ | 3,800,136 | 600,000 | $ | 5,055,756 | $ | (2,023,631) | $ | – | $ | 7,308,000 | |||||||||
ICT Group, Inc.* | 102,500 | 882,952 | 155,289 | 2,813,731 | (1,146,688) | – | 8,139,691 | ||||||||||||||
$ | 4,683,088 | $ | 7,869,487 | $ | (3,170,319) | $ | – | $ | 15,447,691 | ||||||||||||
(1) | Adjusted for 5:1 Stock Split on 2/29/08. | |
(2) | Adjusted for 1.731% Stock Dividend on 1/29/08. | |
(3) | Adjusted for 1.772% Stock Dividend on 4/28/08. |
Aggregate collateral segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales and/or securities with extended settlement dates as of April 30, 2008 are noted below.
Fund | Aggregate Value | ||||
Core | |||||
Janus Balanced Fund | $ | 362,962,798 | |||
Janus Contrarian Fund | 601,117,342 | ||||
Janus Fundamental Equity Fund | 95,328,365 | ||||
Janus Growth and Income Fund | 555,826,601 | ||||
Value | |||||
Janus Mid Cap Value Fund | 8,913,674 | ||||
Repurchase agreements held by a Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or subcustodian. The collateral is evaluated daily to ensure its market value equals or exceeds the current market value of the repurchase agreements, including accrued interest. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral or proceeds may be subject to legal proceedings.
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Notes to Financial Statements (unaudited)
The following section describes the organization and significant accounting policies and provides more detailed information about the schedules and tables that appear throughout this report. In addition, the Notes to Financial Statements explain the methods used in preparing and presenting this report.
1. | Organization and Significant Accounting Policies |
Janus Balanced Fund, Janus Contrarian Fund, Janus Fundamental Equity Fund, Janus Growth and Income Fund, INTECH Risk-Managed Stock Fund, Janus Mid Cap Value Fund and Janus Small Cap Value Fund (collectively the “Funds” and individually a “Fund”) are series funds. The Funds are part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust has twenty-nine funds. The Funds invest primarily in equity securities. Each Fund in this report is classified as diversified as defined in the 1940 Act, with the exception of Janus Contrarian Fund, which is classified as nondiversified. The Funds are no-load investments.
On April 21, 2003, Berger Small Cap Value Fund and Berger Mid Cap Value Fund (collectively the “Reorganizing Funds”) participated in a tax-free reorganization with Janus Small Cap Value Fund and Janus Mid Cap Value Fund, respectively (collectively the “Value Funds”). Both the Reorganizing Funds and the Value Funds have Investor and Institutional Shares. The plan of reorganization provided for the transfer for assets and liabilities of the Reorganizing Funds to the Value Funds. The Value Funds were created to serve as “shells” for the transfer of net assets of the Reorganizing Funds. For accounting purposes, each Reorganizing Fund is considered the surviving entity, and the financial highlights shown for periods prior to April 30, 2003 are the financial highlights of the Reorganizing Funds. Subsequent to the reorganization, the Value Funds changed their fiscal year end from September 30 to April 30 and then to October 31.
Prior to April 21, 2003 Berger Mid Cap Value Fund was a series established under the Berger Investment Portfolio Trust, a Delaware business trust. Berger Small Cap Value Fund was the only portfolio established under the Berger Omni Investment Trust, a Massachusetts business trust. Berger Mid Cap Value Fund and Berger Small Cap Value Fund offered two separate classes of shares: Investor Shares and Institutional Shares. All classes of each fund had identical rights to earnings, assets and voting privileges. Effective March 31, 2000, both classes of Berger Small Cap Value Fund were closed to new investors. Berger Mid Cap Value Fund – Institutional Shares was also closed to new investors.
The following accounting policies have been consistently followed by the Funds and are in conformity with accounting principles generally accepted in the United States of America in the investment company industry.
Investment Valuation
Securities are valued at the last sales price or the official closing price for securities traded on a principal securities exchange (U.S. or foreign) and on the NASDAQ National Market. Securities traded on over-the-counter markets and listed securities for which no sales are reported are valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Funds’ Trustees. Short-term securities with maturities of 60 days or less may be valued at amortized cost, which approximates market value. Debt securities with a remaining maturity of greater than 60 days are valued in accordance with the evaluated bid price supplied by the pricing service. The evaluated bid price supplied by the pricing service is an evaluation that reflects such factors as security prices, yields, maturities and ratings. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect as of the daily close of the New York Stock Exchange (“NYSE”). When market quotations are not readily available or deemed unreliable, or events or circumstances that may affect the value of portfolio securities held by the Funds are identified between the closing of their principal markets and the time the net asset value (“NAV”) is determined, securities may be valued at fair value as determined in good faith under procedures established by and under the supervision of the Funds’ Trustees. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) when significant events occur which may affect the securities of a single issuer, such as mergers, bankruptcies, or significant issuer-specific developments; (ii) when significant events occur which may affect an entire market, such as natural disasters or significant governmental actions; and (iii) when non-significant events occur such as markets closing early or not opening, security trading halts, or pricing of non-valued securities and restricted or non-public securities. The Funds may use a systematic fair valuation model provided by an independent third party to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the NYSE.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Trust is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign
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Notes to Financial Statements (unaudited) (continued)
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 Funds bear expenses incurred specifically on their behalf as well as a portion of general expenses. Janus Mid Cap Value Fund and Janus Small Cap Value Fund currently offer two classes of shares. Each class of shares bears expenses incurred specifically on its behalf and, in addition, each class bears a portion of general expenses, which may be based upon relative net assets of each class. Expenses are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Securities Lending
Under procedures adopted by the Trustees, the Funds may lend securities to qualified parties (typically brokers or other financial institutions) who need to borrow securities in order to complete certain transactions such as covering short sales, avoiding failures to deliver securities or completing arbitrage activities. The Funds may seek to earn additional income through securities lending. There is the risk of delay in recovering a loaned security or the risk of loss in collateral rights if the borrower fails financially. Janus Capital Management LLC (“Janus Capital”) makes efforts to balance the benefits and risks from granting such loans.
The Funds do not have the right to vote on securities while they are being lent; however, the Funds may attempt to call back the loan and vote the proxy if time permits. All loans will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral permitted by the Securities and Exchange Commission (“SEC”). Cash collateral may be invested in affiliated money market funds or other accounts advised by Janus Capital to the extent consistent with exemptive relief obtained from the SEC or as permitted by the 1940 Act and rules promulgated thereunder. Cash collateral may also be invested in unaffiliated money market funds.
Dresdner Bank AG (the “Lending Agent”) may also invest the cash collateral in the Allianz Dresdner Daily Asset Fund or investments in unaffiliated money market funds or accounts, mutually agreed to by the Funds and the Lending Agent, that comply with Rule 2a-7 of the 1940 Act relating to money market funds.
As of April 30, 2008, the Funds had on loan securities valued as indicated:
Value at | |||||
Fund | April 30, 2008 | ||||
Core | |||||
Janus Balanced Fund | $ | 681,898,039 | |||
Janus Contrarian Fund | 1,119,782,504 | ||||
Janus Fundamental Equity Fund | 50,406,331 | ||||
Janus Growth and Income Fund | 446,720,361 | ||||
Risk-Managed | |||||
INTECH Risk-Managed Stock Fund | 15,156,089 | ||||
Value | |||||
Janus Mid Cap Value Fund | 766,075,047 | ||||
Janus Small Cap Value Fund | 218,327,664 | ||||
As of April 30, 2008, the Funds received cash collateral for securities lending activity as indicated:
Cash Collateral at | |||||
Fund | April 30, 2008 | ||||
Core | |||||
Janus Balanced Fund | $ | 699,442,698 | |||
Janus Contrarian Fund | 1,158,777,273 | ||||
Janus Fundamental Equity Fund | 51,951,650 | ||||
Janus Growth and Income Fund | 462,671,374 | ||||
Risk-Managed | |||||
INTECH Risk-Managed Stock Fund | 15,579,119 | ||||
Value | |||||
Janus Mid Cap Value Fund | 788,723,562 | ||||
Janus Small Cap Value Fund | 227,218,799 | ||||
As of April 30, 2008, all cash collateral received by the Funds was invested in the Allianz Dresdner Daily Asset Fund except as noted in the following tables:
Fund | Time Deposits | ||||
Core | |||||
Janus Balanced Fund | $ | 412,356,231 | |||
Janus Contrarian Fund | 761,189,046 | ||||
Janus Fundamental Equity Fund | 26,997,967 | ||||
Janus Growth and Income Fund | 272,472,000 | ||||
Risk-Managed | |||||
INTECH Risk-Managed Stock Fund | 10,017,380 | ||||
Value | |||||
Janus Mid Cap Value Fund | 482,338,201 | ||||
Janus Small Cap Value Fund | 104,755,349 | ||||
Fund | Repurchase Agreements | ||||
Core | |||||
Janus Balanced Fund | $ | 138,533,428 | |||
Janus Contrarian Fund | 249,035,188 | ||||
Janus Fundamental Equity Fund | 8,834,469 | ||||
Janus Growth and Income Fund | 89,160,261 | ||||
Risk-Managed | |||||
INTECH Risk-Managed Stock Fund | 3,277,959 | ||||
Value | |||||
Janus Mid Cap Value Fund | 157,834,197 | ||||
Janus Small Cap Value Fund | 34,278,803 | ||||
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
90 Janus Core, Risk-Managed and Value Funds April 30, 2008
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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 borrower pays fees at the Funds’ direction to the Lending Agent. The Lending Agent may retain a portion of the interest earned on the cash collateral invested. The cash collateral invested by the Lending Agent is disclosed in the Schedule of Investments (if applicable). The lending fees and the Funds’ portion of the interest income earned on cash collateral are included on the Statement of Operations (if applicable).
Interfund Lending
Pursuant to an exemptive order received from the SEC, each Fund may be party to interfund lending agreements between the Fund and other Janus Capital sponsored mutual funds, which permits them to borrow or lend cash at a rate beneficial to both the borrowing and lending funds. Outstanding borrowings from all sources totaling 10% or more of the borrowing Fund’s total assets must be collateralized at 102% of the outstanding principal value of the loan; loans of less than 10% may be unsecured. During the six-month period ended April 30, 2008, there were no outstanding interfund borrowing or lending arrangements for the Funds.
Forward Currency Transactions
The Funds, except INTECH Risk-Managed Stock Fund, may enter into forward currency contracts in order to reduce exposure to changes in foreign currency exchange rates on foreign portfolio holdings and to lock in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. A forward currency exchange contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated rate. The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a contract is included in “Net realized gain/(loss) from investment and foreign currency transactions” on the Statement of Operations (if applicable). Forward currency contracts held by the Funds are fully collateralized by other securities, which are denoted in the accompanying Schedule of Investments (if applicable). The collateral is evaluated daily to ensure its market value equals or exceeds the current market value of the corresponding forward currency contracts.
Futures Contracts
The Funds may enter into futures contracts to gain exposure to the stock market pending investment of cash balances or to meet liquidity needs. The Funds may also use such derivative instruments to hedge or protect from adverse movements in securities prices, currency rates or interest rates. The use of futures contracts may involve risks such as the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.
Futures contracts are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Statement of Assets and Liabilities (if applicable). When a contract is closed, a realized gain or loss is recorded as “Net realized gain/(loss) from futures contracts” on the Statement of Operations (if applicable), equal to the difference between the opening and closing value of the contract. Generally, futures contracts are marked-to-market (i.e., treated as realized and subject to distribution) for federal income tax purposes at fiscal year-end. Securities designated as collateral for market value on futures contracts are noted in the Schedule of Investments (if applicable). Such collateral is in the possession of the Funds’ custodian.
Swaps
The Funds, except INTECH Risk-Managed Stock Fund, may enter into swap agreements to hedge exposure to interest rates and credit risk or for investment purposes. A swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to changes in specified prices or rates for a specified amount of an underlying asset. The payment flows are usually netted against each other, with the difference being paid by one party to the other. Swap contracts are reported as an asset and liability on the Statement of Assets and Liabilities. Realized gains and losses are reported in “Net realized gain/(loss) from swap contracts” on the Statement of Operations (if applicable).
Risks may arise as a result of the failure of the counterparty to the swap contract to comply with the terms of the swap contract. The loss incurred by the failure of a counterparty is generally limited to the net interim payment to be received by the Funds, and/or the termination value. Therefore, the Funds consider the creditworthiness of each counterparty to a swap contract in evaluating potential credit risk. Additionally, risks may arise from unanticipated movements in interest rates or in the value of the underlying securities.
Options Contracts
The Funds may purchase or write put and call options on futures contracts and on portfolio securities for hedging purposes or as a substitute for an investment. The Funds, except INTECH Risk-Managed Stock Fund, may also purchase or write put and call options on foreign currencies in a manner similar to that in which futures or forward contracts on foreign currencies will be utilized. The Funds may also invest in Long-Term Equity Anticipation Securities (LEAPS), which are long-term option contracts that can be maintained for a period of up to three years. The Funds generally invest in options to hedge against adverse movements in the value of portfolio holdings.
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Notes to Financial Statements (unaudited) (continued)
When an option is written, the Funds receive a premium and become obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. In writing an option, the Funds bear the market risk of an unfavorable change in the price of the security underlying the written option. Exercise of an option written by the Funds could result in the Funds buying or selling a security at a price different from the current market value.
When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option are adjusted by the amount of premium received or paid.
The Funds may also purchase and write exchange-listed and over-the-counter put and call options on domestic securities indices, and on foreign securities indices listed on domestic and foreign securities exchanges. Options on securities indices are similar to options on securities except that (1) the expiration cycles of securities index options are monthly, while those of securities options are currently quarterly, and (2) the delivery requirements are different. Instead of giving the right to take or make delivery of securities at a specified price, an option on a securities index gives the holder the right to receive a cash “exercise settlement amount” equal to (a) the amount, if any, by which the fixed exercise price of the option exceeds (in the case of a put) or is less than (in the case of a call) the closing value of the underlying index on the date of exercise, multiplied by (b) a fixed “index multiplier.” Receipt of this cash amount will depend upon the closing level of the securities index upon which the option is based being greater than, in the case of a call, or less than, in the case of a put, the exercise price of the index and the exercise price of the option times a specified multiple. The writer of the option is obligated, in return for the premium received, to make delivery of this amount.
Holdings designated to cover outstanding written options are noted in the Schedule of Investments (if applicable). Options written are reported as a liability on the Statement of Assets and Liabilities as “Options written at value” (if applicable).
Realized gains and losses are reported as “Net realized gain/(loss) from options contracts” on the Statement of Operations (if applicable). The Funds recognized realized gains/(losses) from written options contracts during the six-month period ended April 30, 2008 as indicated in the table below:
Fund | Gains/(Losses) | ||||
Core | |||||
Janus Contrarian Fund | $ | 16,935,391 | |||
Janus Fundamental Equity Fund | 1,140,857 | ||||
Value | |||||
Janus Mid Cap Value Fund | (22,803,337) | ||||
The risk in writing call options is that the Funds give up the opportunity for profit if the market price of the security increases and the option is exercised. The risk in writing put options is that the Funds may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying options is that the Funds pay a premium whether or not the option is exercised. The use of such instruments may involve certain additional risks as a result of unanticipated movement in the market. A lack of correlation between the value of an instrument underlying an option and the asset being hedged, or unexpected adverse price movements, could render the Funds’ hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. There is no limit to the loss the Funds may recognize due to written call options.
Written option activity for the six-month period ended April 30, 2008 is indicated in the tables below:
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Janus Contrarian Fund | ||||||||
Options outstanding at October 31, 2007 | 25,875 | $ | 2,937,357 | |||||
Options written | 50,004 | 2,668,409 | ||||||
Options expired | (75,879) | (5,605,766) | ||||||
Options closed | – | – | ||||||
Options exercised | – | – | ||||||
Options outstanding at April 30, 2008 | – | $ | – | |||||
Number of | Premiums | |||||||
Put Options | Contracts | Received | ||||||
Janus Contrarian Fund | ||||||||
Options outstanding at October 31, 2007 | 9,773 | $ | 1,290,016 | |||||
Options written | 258,275 | 35,133,455 | ||||||
Options expired | (65,034) | (9,075,876) | ||||||
Options closed | (107,997) | (9,289,893) | ||||||
Options exercised | (95,017) | (18,057,702) | ||||||
Options outstanding at April 30, 2008 | – | $ | – | |||||
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Janus Fundamental Equity Fund | ||||||||
Options outstanding at October 31, 2007 | 10,959 | $ | 1,477,510 | |||||
Options written | – | – | ||||||
Options expired | (2,630) | (380,503) | ||||||
Options closed | (8,329) | (1,097,007) | ||||||
Options exercised | – | – | ||||||
Options outstanding, at April 30, 2008 | – | $ | – | |||||
Number of | Premiums | |||||||
Call Options | Contracts | Received | ||||||
Janus Mid Cap Value Fund | ||||||||
Options outstanding at October 31, 2007 | – | $ | – | |||||
Options written | 6,269 | 3,009,917 | ||||||
Options expired | – | – | ||||||
Options closed | (4,269) | (1,851,675) | ||||||
Options exercised | (2,000) | (1,158,242) | ||||||
Options outstanding at April 30, 2008 | – | $ | – | |||||
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Number of | Premiums | |||||||
Put Options | Contracts | Received | ||||||
Janus Mid Cap Value Fund | ||||||||
Options outstanding at October 31, 2007 | 450,816 | $ | 6,985,888 | |||||
Options written | 1,103,425 | 34,200,463 | ||||||
Options expired | (318,433) | (9,913,180) | ||||||
Options closed | (781,184) | (18,045,861) | ||||||
Options exercised | – | – | ||||||
Options outstanding at April 30, 2008 | 454,624 | $ | 13,227,310 | |||||
Floating Rate Loans
Janus Balanced Fund may invest in floating rate loans. Floating rate loans are debt securities that have floating interest rates tied to a benchmark lending rate such as the London Interbank Offered Rate (“LIBOR”). LIBOR is a short-term interest rate that banks charge one another and that is generally representative of the most competitive and current cash rates. In other cases, the lending rate could be tied to the prime rate offered by one or more major U.S. banks or the rate paid on large certificates of deposit traded in the secondary markets (“the CD Rate”). If the benchmark lending rate changes, the rate payable to lenders under the loan will change at the next scheduled adjustment date specified in the loan agreement. Floating rate loans are typically issued to companies (“borrowers”) in connection with recapitalizations, acquisitions, and refinancings. Floating rate loan investments are generally below investment grade. Senior floating rate loans are secured by specific collateral of a borrower and are senior in the borrower’s capital structure. The senior position in the borrower’s capital structure generally gives holders of senior loans a claim on certain of the borrower’s assets that is senior to subordinated debt and preferred and common stock in the case of a borrower’s default. Floating rate loan investments may involve foreign borrowers, and investments may be denominated in foreign currencies. Floating rate loans often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The Fund may invest in obligations of borrowers who are in bankruptcy proceedings. Floating rate loans may include fully funded term loans or revolving lines of credit.
Bank Loans
Janus Balanced Fund may invest in bank loans, which include institutionally-traded floating rate securities generally acquired as an assignment or participation interest in loans originated by a bank or financial institution (the “Lender”) that acts as agent for all holders. The agent administers the terms of the loan, as specified in the loan agreement. When investing in a loan participation, the Fund has the right to receive payments of principal, interest and any fees to which it is entitled only from the Lender selling the loan agreement and only upon receipt by the Lender of payments from the borrower. The Fund generally has no right to enforce compliance with the terms of the loan agreement with the borrower. Assignments and participations involve credit, interest rate, and liquidity risk. Interest rates on floating rate securities adjust with general interest rate changes and/or issuer credit quality. The interest rates paid on a floating rate security in which the Fund invests generally are readjusted periodically to an increment over a designated benchmark rate, such as the one-month, three-month, six-month, or one-year LIBOR.
The Fund may have difficulty trading assignments and participations to third parties. There may be restrictions on transfer and only limited opportunities may exist to sell such securities in secondary markets. As a result, the Fund may be unable to sell assignments or participations at the desired time or may be able to sell only at a price less than fair market value. The Fund utilizes an independent third party to value individual bank loans on a daily basis.
The average monthly value of borrowings outstanding under bank loan arrangements and the related rate range during the six-month period ended April 30, 2008, are indicated in the table below.
Average Monthly | ||||||||
Fund | Value | Rates | ||||||
Core | ||||||||
Janus Balanced Fund | $ | 10,850,677 | 1.50% - 7.448% | |||||
Short Sales
The Funds, except INTECH Risk-Managed Stock Fund, may engage in “short sales against the box.” Short sales against the box involve either selling short a security that the Funds own, or selling short a security that the Funds have the right to obtain, for delivery at a specified date in the future. The Funds may enter into short sales against the box to hedge against anticipated declines in the market price of portfolio securities. The Funds do not deliver from their portfolios the securities sold short and do not immediately receive the proceeds of the short sale. The Funds borrow the securities sold short and receive proceeds from the short sale only when they deliver the securities to the lender. If the value of the securities sold short increases prior to the scheduled delivery date, the Funds lose the opportunity to participate in the gain.
The Funds, except INTECH Risk-Managed Stock Fund, may also engage in other short sales. The Funds may engage in short sales when the portfolio managers and/or investment personnel anticipate that a security’s market purchase price will be less than its borrowing price. To complete the transaction, the Funds must borrow the security to deliver it to the purchaser and buy that same security in the market to return it to the lender. The total market value of all of a Fund’s short sales positions will not exceed 10% of its net assets. 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 that the
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Notes to Financial Statements (unaudited) (continued)
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. There is no limit to the size of any loss that the Fund may recognize upon termination of a short sale. Short sales held by the Funds are fully collateralized by other securities, which are denoted in the accompanying Schedule of Investments (if applicable).
Foreign Currency Translations
The Funds do not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and market risk. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
When-Issued Securities
The Funds may purchase or sell securities on a when-issued or forward commitment basis. The price of the underlying securities and date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Losses may arise due to changes in the market value of the securities or from the inability of counterparties to meet the terms of the contract. In connection with such purchases, the Funds may hold liquid assets as collateral with the Funds’ custodian sufficient to cover the purchase price.
Equity-Linked Structured Notes
The Funds may invest in equity-linked structured notes. Equity-linked structured notes are derivative securities which are specially designed to combine the characteristics of one or more underlying securities and their equity derivatives in a single note form. The return and/or yield or income component may be based on the performance of the underlying equity securities, an equity index, and/or option positions. Equity-linked structured notes are typically offered in limited transactions by financial institutions in either registered or non-registered form. An investment in equity-linked structured notes creates exposure to the credit risk of the issuing financial institution, as well as to the market risk of the underlying securities. There is no guaranteed return of principal with these securities and the appreciation potential of these securities may be limited by a maximum payment or call right. In certain cases, equity-linked structured notes may be more volatile and less liquid than less complex securities or other types of fixed-income securities. Such securities may exhibit price behavior that does not correlate with other fixed-income securities.
Initial Public Offerings
The Funds may invest in initial public offerings (“IPOs”). IPOs and other investment techniques may have a magnified performance impact on a fund with a small asset base. A Fund may not experience similar performance as their assets grow.
Additional Investment Risk
The Funds, particularly Janus Balanced 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. INTECH Risk-Managed Stock Fund does not intend to invest in high-yield/high-risk bonds.
Restricted Security Transactions
Restricted securities held by a 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 a 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. As of April 30, 2008, Janus Balanced Fund, Janus Fundamental Equity and Janus Growth and Income Fund were invested in restricted securities.
Dividend Distributions
Dividends of net investment income for Janus Balanced Fund and Janus Growth and Income Fund are generally declared and distributed quarterly, and realized capital gains (if any) are distributed annually. The remaining Funds generally declare and distribute dividends of net investment income and capital gains (if any) annually. The majority of dividends and capital gains distributions from a Fund will be automatically reinvested into additional shares of that Fund, based on the discretion of the shareholder.
The Funds may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It
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is quite common for these dividends to exceed the REIT’s taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If a Fund distributes such amounts, such distribution could constitute a return of capital to shareholders for federal income tax purposes.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Federal Income Taxes
No provision for income taxes is included in the accompanying financial statements, as the Funds intend to distribute to shareholders all taxable investment income and realized gains and otherwise comply with Subchapter M of the Internal Revenue Code applicable to regulated investment companies.
The Funds adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes on April 30, 2008. FIN 48 requires an evaluation of tax positions taken (or expected to be taken) in the course of preparing a Fund’s tax return to determine whether these positions meet a “more-likely-than-not” standard that based on the technical merits have a more than fifty percent likelihood of being sustained by a taxing authority upon examination. A tax position that meets the “more-likely-than-not” recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations.
FIN 48 requires management of the Funds to analyze all open tax years, fiscal years 2003 – 2006 as defined by Statute of Limitations, for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of and during the six-month period ended April 30, 2008, the Funds did not have a liability for any unrecognized tax benefits. The Funds have no examination in progress and are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
New Accounting Pronouncements
In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS No. 157”), which defines fair value, established a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not require new fair value measurements, but is applied to the extent that other accounting pronouncements require or permit fair value measurements. SFAS No. 157 emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Management does not believe the adoption of SFAS No. 157 will impact the financial statement amounts; however, the Funds will be required to disclose the extent to which fair value is used to measure assets and liabilities and the inputs used to develop the measurements.
In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS No. 159”), which permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Management does not believe the adoption of SFAS No. 159 will impact the financial statement amounts.
In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS No. 161”), which requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS No. 161 is effective for financial statements issued for fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. Management is in the process of evaluating the impact of SFAS No. 161 on the Funds’ financial statement disclosures.
Janus Core, Risk-Managed and Value Funds April 30, 2008 95
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Notes to Financial Statements (unaudited) (continued)
2. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Funds pay a monthly advisory fee to Janus Capital based upon average daily net assets and calculated at the annual rate shown in the table below:
Average Daily Net | Management | |||||||
Fund | Assets of Fund | Fee (%) | ||||||
Core | ||||||||
Janus Balanced Fund | All Asset Levels | 0.55% | ||||||
Janus Contrarian Fund | All Asset Levels | 0.64% | ||||||
Janus Fundamental Equity Fund | All Asset Levels | 0.60% | ||||||
Janus Growth and Income Fund | All Asset Levels | 0.62% | ||||||
Risk-Managed | ||||||||
INTECH Risk-Managed Stock Fund | All Asset Levels | 0.50% | ||||||
Value | ||||||||
Janus Mid Cap Value Fund | All Asset Levels | 0.64% | ||||||
Janus Small Cap Value Fund | All Asset Levels | 0.72% | ||||||
For Janus Contrarian Fund, INTECH Risk-Managed Stock Fund and Janus Mid Cap Value Fund, the investment advisory fee is determined by calculating a base fee and applying a performance adjustment. The base fee rate is the same as the investment advisory fee rate shown in the table above. The performance adjustment either increases or decreases the base fee depending on how well each Fund has performed relative to its benchmark, as shown below:
Fund | Benchmark Index | ||||
Janus Contrarian Fund | S&P 500® Index | ||||
INTECH Risk-Managed Stock Fund | S&P 500® Index | ||||
Janus Mid Cap Value Fund | Russell Midcap® Value Index | ||||
Only the base fee rate applied until January 2007 for INTECH Risk-Managed Stock Fund, and until February 2007 for Janus Contrarian Fund and Janus Mid Cap Value Fund, at which time the calculation of the performance adjustment is applied as follows:
(Investment Advisory Fee = Base Fee +/- Performance Adjustment).
The investment advisory fee paid to Janus Capital by each of the Funds listed above consists of two components: (i) 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”), plus or minus (ii) a performance-fee adjustment (“Performance Adjustment”) calculated by applying a variable rate of up to 0.15% (positive or negative) to the Fund’s average daily net assets during the applicable performance measurement period.
The performance measurement period generally is the previous 36 months. When a Fund’s performance-based fee structure has been in effect for at least 12 months, but less than 36 months, the performance measurement period will be equal to the time that has elapsed since the performance-based fee structure took effect. As noted above, any Performance Adjustment began January 2007 for INTECH Risk-Managed Stock Fund and February 2007 for Janus Contrarian Fund and Janus Mid Cap Value Fund. No Performance Adjustment will be applied unless the difference between the Fund’s investment performance and the investment record of the Fund’s benchmark index is 0.50% or greater (positive or negative) during the applicable performance measurement period. Because the Performance Adjustment is tied to the Fund’s performance relative to its benchmark index (and not its absolute performance), the Performance Adjustment could increase Janus Capital’s fee even if the Fund’s shares lose value during the performance measurement period and could decrease Janus Capital’s fee even if the Fund’s shares increase in value during the performance measurement period. For purposes of computing the Base Fee and the Performance Adjustment, net assets will be averaged over different periods (average daily net assets during the previous month for the Base Fee, versus average daily net assets during the performance measurement period for the Performance Adjustment). Performance of the Fund is calculated net of expenses, whereas a Fund’s benchmark index does not have any expenses. Reinvestment of dividends and distributions are included in calculating both the performance of the Fund and the Fund’s benchmark index. The Base Fee is calculated and accrued daily. The Performance Adjustment is calculated monthly in arrears and is accrued evenly each day throughout the month. The investment fee is paid monthly in arrears.
The investment performance of Janus Mid Cap Value Fund’s Investor Shares (“Investor Shares”) for the performance measurement period will be used to calculate the Performance Adjustment. After Janus Capital determines whether the Fund’s performance was above or below its benchmark index by comparing the investment performance of the Fund’s Investor Shares against the investment record of its benchmark index, Janus Capital will apply the same Performance Adjustment (positive or negative) across each other class of shares of the Fund.
It is not possible to predict the effect of the Performance Adjustment on future overall compensation to Janus Capital since it will depend on the performance of each Fund relative to the record of the Fund’s benchmark index and future changes to the size of each Fund.
The Fund’s prospectus 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 plus/minus any Performance Adjustment. During the six-month period ended April 30, 2008, the Funds recorded
96 Janus Core, Risk-Managed and Value Funds April 30, 2008
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the following Performance Adjustment as indicated in the table below:
Performance | |||||
Fund | Fee | ||||
Janus Contrarian Fund | $ | 4,126,611 | |||
INTECH Risk-Managed Stock Fund | $ | (359,800) | |||
Janus Mid Cap Value Fund | $ | 4,489,048 | |||
Enhanced Investment Technologies, LLC (“INTECH”) serves as subadviser to INTECH Risk-Managed Stock Fund. Janus Capital indirectly owns approximately 89.9% of the outstanding voting shares of INTECH. Janus Capital pays INTECH a subadvisory fee equal to 0.26% of INTECH Risk-Managed Stock Fund’s average daily net assets during the previous month, plus or minus one-half of any performance fee adjustment paid to Janus Capital by the Fund, pursuant to the Fund’s investment advisory agreement. The Performance Adjustment impacts the current subadvisory fee as of January 1, 2007, when the Performance Adjustment took effect.
Perkins, Wolf, McDonnell and Company, LLC (“Perkins”) serves as subadviser to Janus Mid Cap Value Fund and Janus Small Cap Value Fund (each, a “Value Fund”). As compensation for its services, Perkins receives, directly from each Value Fund, a fee equal to 50% of Janus Capital’s management fee (net of any reimbursement of expenses incurred or fees waived by Janus Capital). Janus Capital has a 30% ownership stake in Perkins’ investment advisory business.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, receives an administrative services fee at an annual rate of up to 0.05% of the average daily net assets of INTECH Risk-Managed Stock Fund, Janus Mid Cap Value Fund and Janus Small Cap Value Fund for providing or procuring recordkeeping, subaccounting and other administrative services to the investors.
Each Fund pays Janus Services an asset-weighted average annual fee based on the proportion of each Fund’s total net assets sold directly and the proportion of each Fund’s net assets sold through financial intermediaries. The applicable fee rates are 0.16% of net assets on the proportion of assets sold directly and 0.21% on the proportion of assets sold through intermediaries. In addition, Janus Services receives $4.00 per open shareholder account (excluding Janus Mid Cap Value Fund – Institutional Shares and Janus Small Cap Value Fund) for transfer agent services.
By written agreement, Janus Services has agreed until March 1, 2009 to waive the transfer agency fee payable so that the total operating expenses (excluding extraordinary expenses and the 0.05% administrative services fee) of the Institutional Shares of Janus Mid Cap Value Fund and Janus Small Cap Value Fund do not exceed 0.77% and 0.79%, respectively. Amounts waived by Janus Capital are disclosed as Excess Expense reimbursement on the Statement of Operations.
A 2.00% redemption fee may be imposed on shares of INTECH Risk-Managed Stock Fund held for 90 days or less. This fee is paid to the Fund rather than Janus Capital, and is designed to deter excessive short-term trading and to offset the brokerage commissions, market impact, and other costs associated with changes in the Fund asset levels and cash flow due to short-term money movements in and out of the Fund. The redemption fee is accounted for as an addition to Paid-in Capital. Total redemption fees received by the Fund for the six-month period ended April 30, 2008 is indicated in the table below:
Redemption | |||||
Fund | Fee | ||||
Risk-Managed | |||||
INTECH Risk-Managed Stock Fund | $ | 15,108 | |||
During the six-month period ended April 30, 2008, Janus Services reimbursed the following Funds as a result of dilutions caused by incorrectly processed shareholder activity as indicated in the table below:
Fund | |||||
Core | |||||
Janus Fundamental Equity Fund | $ | 30 | |||
During the fiscal year ended October 31, 2007, Janus Services reimbursed the following Funds as a result of dilutions caused by incorrectly processed shareholder activity as indicated in the table below:
Fund | |||||
Core | |||||
Janus Balanced Fund | $ | 9,508 | |||
Janus Contrarian Fund | 38,387 | ||||
Janus Fundamental Equity Fund | 10,476 | ||||
Janus Growth and Income Fund | 24,203 | ||||
Risk-Managed | |||||
INTECH Risk-Managed Stock Fund | 6,576 | ||||
Value | |||||
Janus Mid Cap Value Fund - Investor Shares | 23,588 | ||||
Janus Small Cap Value Fund - Investor Shares | 5,530 | ||||
Janus Small Cap Value Fund - Institutional Shares | 3 | ||||
During the six-month period ended April 30, 2008, Janus Capital reimbursed the following Funds as a result of dilutions caused by certain trading and/or pricing errors as indicated in the table below:
Fund | |||||
Core | |||||
Janus Balanced Fund | $ | 742 | |||
Janus Contrarian Fund | 37,434 | ||||
Janus Fundamental Equity Fund | 9,586 | ||||
Janus Growth and Income Fund | 3,708 | ||||
Risk-Managed | |||||
INTECH Risk-Managed Stock Fund | 681 | ||||
Value | |||||
Janus Mid Cap Value Fund - Investor Shares | 7,451 | ||||
Janus Small Cap Value Fund - Institutional Shares | 1,200 | ||||
Janus Core, Risk-Managed and Value Funds April 30, 2008 97
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Notes to Financial Statements (unaudited) (continued)
During the fiscal year ended October 31, 2007, Janus Capital reimbursed the following Fund as a result of dilutions caused by certain trading and/or pricing errors as indicated in the table below:
Fund | |||||
Core | |||||
Janus Balanced Fund | $ | 3,923 | |||
Janus Contrarian Fund | 95,915 | ||||
For the six-month period ended April 30, 2008, Janus Capital assumed $16,904 of legal, consulting and Trustee costs and fees incurred by the funds in Janus Investment Fund, Janus Aspen Series and Janus Adviser Series (the “Portfolios”) in connection with the regulatory and civil litigation matters discussed in the Pending Legal Matters. These non-recurring costs were allocated to all Portfolios based on the Portfolios’ respective net assets as of July 31, 2004. No fees were allocated to the Funds or Portfolios that commenced operations after July 31, 2004. Additionally, all future non-recurring costs will be allocated to the Portfolios based on the Portfolios’ respective net assets on July 31, 2004. These “Non-recurring costs” and “Costs assumed by Janus Capital” are shown on the 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 Funds. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Funds as unrealized appreciation/(depreciation) and is shown as of April 30, 2008 on the Statement of Assets and Liabilities as an asset, “Non-interested Trustees’ deferred compensation,” and a liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the six-month period ended April 30, 2008 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. No deferred fees were paid to any Trustee under the Deferred Plan during the six-month period ended April 30, 2008.
Certain officers of the Funds may also be officers and/or directors of Janus Capital. Such officers receive no compensation from the Funds, except for the Funds’ Chief Compliance Officer. Effective January 1, 2006, the Funds began reimbursing the adviser for a portion of the compensation paid to the Chief Compliance Officer of the Trust. Total compensation of $39,907 was paid by the Trust during the six-month period ended April 30, 2008. Each Fund’s portion is reported as part of “Other Expenses” on the Statement of Operations.
The Funds’ expenses may be reduced by expense offsets from an unaffiliated custodian and/or transfer agent. Such credits or offsets are included in “Expense and Fee Offset” on the Statement of Operations. The transfer agent fee offsets received during the period reduce Transfer Agent Fees and Expenses. Custodian offsets received reduce Custodian Fees. The Funds could have employed the assets used by the custodian and/or transfer agent to produce income if they had not entered into an expense offset arrangement.
The Funds may invest in money market funds, including funds managed by Janus Capital. During the six-month period ended April 30, 2008, the following Funds recorded distributions from affiliated investment companies as affiliated dividend income, and had the following affiliated purchases and sales:
98 Janus Core, Risk-Managed and Value Funds April 30, 2008
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Purchases | Sales | Dividend | Value | |||||||||||
Shares/Cost | Shares/Cost | Income | at 4/30/08 | |||||||||||
Janus Institutional Cash Management Fund - Institutional Shares | ||||||||||||||
Core | ||||||||||||||
Janus Balanced Fund | $ | 224,115,848 | $ | 257,648,535 | $ | 1,414,089 | $ | 43,746,149 | ||||||
Janus Contrarian Fund | 485,485,996 | 549,646,070 | 951,456 | 37,981,530 | ||||||||||
Janus Fundamental Equity Fund | 65,537,726 | 102,684,798 | 221,201 | 11,550 | ||||||||||
Janus Growth and Income Fund | 302,692,445 | 166,827,958 | 4,016,632 | 258,646,081 | ||||||||||
Risk-Managed | ||||||||||||||
INTECH Risk-Managed Stock Fund | 8,999,933 | 8,999,933 | 7,557 | – | ||||||||||
Value | ||||||||||||||
Janus Mid Cap Value Fund | 41,024,888 | 352,227,946 | 1,627,561 | – | ||||||||||
Janus Small Cap Value Fund | 14,154,106 | 155,537,646 | 715,496 | – | ||||||||||
$ | 1,142,010,942 | $ | 1,593,572,886 | $ | 8,953,992 | $ | 340,385,310 | |||||||
Janus Institutional Money Market Fund - Institutional Shares | ||||||||||||||
Core | ||||||||||||||
Janus Balanced Fund | $ | 453,369,995 | $ | 290,948,465 | $ | 390,561 | $ | 164,527,030 | ||||||
Janus Contrarian Fund | 866,449,792 | 819,399,954 | 1,009,313 | 79,050,138 | ||||||||||
Janus Fundamental Equity Fund | 188,317,225 | 182,391,275 | 149,958 | 10,872,450 | ||||||||||
Janus Growth and Income Fund | 702,680,372 | 691,115,042 | 2,048,019 | 117,184,230 | ||||||||||
Risk-Managed | ||||||||||||||
INTECH Risk-Managed Stock Fund | 13,157,509 | 13,157,509 | 7,225 | – | ||||||||||
Value | ||||||||||||||
Janus Mid Cap Value Fund | 87,855,189 | 217,499,588 | 451,965 | – | ||||||||||
Janus Small Cap Value Fund | 21,763,482 | 22,705,982 | 15,125 | – | ||||||||||
$ | 2,333,593,564 | $ | 2,237,217,815 | $ | 4,072,166 | $ | 371,633,848 | |||||||
3. | Purchases and Sales of Investment Securities |
For the six-month period ended April 30, 2008, the aggregate cost of purchases and proceeds from sales of investment securities (excluding short-term securities and options contracts) were as follows:
Purchase of Long- | Proceeds from Sales | |||||||||||||
Purchase of | Proceeds from Sales | -Term U.S. Government | of Long-Term U.S. | |||||||||||
Fund | Securities | of Securities | Obligations | Government Obligations | ||||||||||
Core | ||||||||||||||
Janus Balanced Fund | $ | 550,457,505 | $ | 471,624,570 | $ | 535,768,168 | $ | 576,753,899 | ||||||
Janus Contrarian Fund | 2,969,777,230 | 2,424,294,272 | – | – | ||||||||||
Janus Fundamental Equity Fund | 1,091,916,801 | 1,100,473,518 | – | – | ||||||||||
Janus Growth and Income Fund | 2,381,079,524 | 2,893,095,003 | 57,464,991 | – | ||||||||||
Risk Managed | ||||||||||||||
INTECH Risk-Managed Stock Fund | 160,543,184 | 232,253,888 | – | – | ||||||||||
Value | ||||||||||||||
Janus Mid Cap Value Fund | 3,441,401,767 | 2,847,982,504 | – | – | ||||||||||
Janus Small Cap Value Fund | 577,504,178 | 711,102,588 | – | – | ||||||||||
4. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses and capital loss carryovers.
The Funds have elected to treat gains and losses on forward foreign currency contracts as capital gains and losses. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of April 30, 2008 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 are wash sale loss deferrals and passive foreign investment companies.
Janus Core, Risk-Managed and Value Funds April 30, 2008 99
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Notes to Financial Statements (unaudited) (continued)
Federal Tax | Unrealized | Unrealized | Net Tax | |||||||||||
Fund | Cost | Appreciation | (Depreciation) | Appreciation | ||||||||||
Core | ||||||||||||||
Janus Balanced Fund | $ | 3,191,311,813 | $ | 445,056,120 | $ | (72,013,366) | $ | 373,042,754 | ||||||
Janus Contrarian Fund | 8,080,074,766 | 1,899,507,628 | (514,281,057) | 1,385,226,571 | ||||||||||
Janus Fundamental Equity Fund | 925,323,414 | 97,474,659 | (42,634,409) | 54,840,250 | ||||||||||
Janus Growth and Income Fund | 5,473,076,988 | 1,082,835,065 | (334,908,684) | 747,926,381 | ||||||||||
Risk Managed | ||||||||||||||
INTECH Risk-Managed Stock Fund | 378,530,677 | 43,377,841 | (16,557,160) | 26,820,681 | ||||||||||
Value | ||||||||||||||
Janus Mid Cap Value Fund | 7,444,176,475 | 806,513,426 | (385,695,053) | 420,818,373 | ||||||||||
Janus Small Cap Value Fund | 1,478,545,376 | 207,265,230 | (127,160,629) | 80,104,601 | ||||||||||
Net capital loss carryovers as of October 31, 2007 are indicated in the table below. These losses may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. The following table shows the expiration dates of the carryovers.
October | October | October | October | October | October | Accumulated | |||||||||||||||||
Fund | 31, 2008 | 31, 2009 | 31, 2010 | 31, 2011 | 31, 2012 | 31, 2013 | Capital Losses | ||||||||||||||||
Core | |||||||||||||||||||||||
Janus Balanced Fund(1) | $ | – | $ | (4,346,993) | $ | (2,173,497) | $ | – | $ | – | $ | – | $ | (6,520,490) | |||||||||
Janus Contrarian Fund(1) | (25,915,071) | (25,915,071) | – | (39,096,971) | (38,648,243) | (22,132,836) | (151,708,192) | ||||||||||||||||
Janus Growth and Income Fund(1) | – | (16,656,645) | (8,328,322) | – | – | – | (24,984,967) | ||||||||||||||||
(1) | Capital loss carryovers subject to annual limitations. |
During the year ended October 31, 2007, the following capital loss carryovers were utilized by the Funds as indicated in the table below:
Capital Loss | |||||||||||||||||||||||
Fund | Carryover Utilized | ||||||||||||||||||||||
Core | |||||||||||||||||||||||
Janus Balanced Fund | $ | 98,740,113 | |||||||||||||||||||||
Janus Contrarian Fund | 25,915,071 | ||||||||||||||||||||||
Janus Growth and Income Fund | 62,688,703 | ||||||||||||||||||||||
5. | Capital Share Transactions |
For the six-month period ended | ||||||||||||||||||||||||||||||||||||||||
April 30, 2008 (unaudited) | Janus | Janus Growth | INTECH Risk- | |||||||||||||||||||||||||||||||||||||
and the fiscal year ended | Janus Balanced | Janus Contrarian | Fundamental | and | Managed Stock | |||||||||||||||||||||||||||||||||||
October 31, 2007 | Fund | Fund | Equity Fund | Income Fund | Fund | |||||||||||||||||||||||||||||||||||
(all numbers in thousands) | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||||||||||||||
Transactions in Fund Shares | ||||||||||||||||||||||||||||||||||||||||
Shares sold | 15,046 | 18,465 | 79,240 | 211,607 | 2,182 | 7,278 | 6,745 | 15,674 | 1,401 | 8,584 | ||||||||||||||||||||||||||||||
Reinvested dividends and distributions | 4,680 | 2,283 | 19,442 | 28,035 | 3,361 | 209 | 19,747 | 2,609 | 3,083 | 1,888 | ||||||||||||||||||||||||||||||
Shares repurchased | (11,404) | (20,507) | (50,885) | (70,220) | (5,696) | (9,775) | (19,982) | (38,995) | (6,645) | (11,260) | ||||||||||||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | 8,322 | 241 | 47,797 | 169,422 | (153) | (2,288) | 6,510 | (20,712) | (2,161) | (788) | ||||||||||||||||||||||||||||||
Shares Outstanding, Beginning of Period | 103,195 | 102,954 | 398,956 | 229,534 | 37,751 | 40,039 | 160,801 | 181,513 | 29,510 | 30,298 | ||||||||||||||||||||||||||||||
Shares Outstanding, End of Period | 111,517 | 103,195 | 446,753 | 398,956 | 37,598 | 37,751 | 167,311 | 160,801 | 27,349 | 29,510 |
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Janus Mid | Janus Small | |||||||||||||||||||
For the six-month period ended April 30, 2008 (unaudited) | Cap | Cap | ||||||||||||||||||
and the fiscal year ended October 31, 2007 | Value Fund | Value Fund | ||||||||||||||||||
(all numbers in thousands) | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||
Transactions in Fund Shares – Investor Shares | ||||||||||||||||||||
Shares sold | 60,848 | 52,826 | 2,057 | 3,658 | ||||||||||||||||
Reinvested dividends and distributions | 29,599 | 16,240 | 5,452 | 6,902 | ||||||||||||||||
Shares repurchased | (34,900) | (55,609) | (6,003) | (19,467) | ||||||||||||||||
Net Increase/(Decrease) in Fund Shares | 55,547 | 13,457 | 1,506 | (8,907) | ||||||||||||||||
Shares Outstanding, Beginning of Period | 221,810 | 208,353 | 29,167 | 38,074 | ||||||||||||||||
Shares Outstanding, End of Period | 277,357 | 221,810 | 30,673 | 29,167 | ||||||||||||||||
Transactions in Fund Shares – Institutional Shares | ||||||||||||||||||||
Shares sold | 2,306 | 5,569 | 2,411 | 4,398 | ||||||||||||||||
Reinvested dividends and distributions | 4,494 | 3,392 | 5,149 | 5,649 | ||||||||||||||||
Shares repurchased | (3,574) | (18,532) | (4,945) | (12,921) | ||||||||||||||||
Net Increase/(Decrease) in Fund Shares | 3,226 | (9,571) | 2,615 | (2,874) | ||||||||||||||||
Shares Outstanding, Beginning of Period | 33,170 | 42,741 | 27,372 | 30,246 | ||||||||||||||||
Shares Outstanding, End of Period | 36,396 | 33,170 | 29,987 | 27,372 | ||||||||||||||||
6. | Pending Legal Matters |
In the fall of 2003, the Securities and Exchange Commission (“SEC”), the Office of the New York State Attorney General (“NYAG”), the Colorado Attorney General (“COAG”), and the Colorado Division of Securities (“CDS”) announced that they were investigating alleged frequent trading practices in the mutual fund industry. On August 18, 2004, Janus Capital announced that it had reached final settlements with the SEC, the NYAG, the COAG, and the CDS related to such regulators’ investigations into Janus Capital’s frequent trading arrangements.
A number of civil lawsuits were brought against Janus Capital and certain of its affiliates, the Janus funds, and related entities and individuals based on allegations similar to those announced by the above regulators and were filed in several state and federal jurisdictions. Such lawsuits alleged a variety of theories for recovery including, but not limited to, the federal securities laws, other federal statutes (including ERISA), and various common law doctrines. The Judicial Panel on Multidistrict Litigation transferred these actions to the U.S. District Court for the District of Maryland (the “Court”) for coordinated proceedings. On September 29, 2004, five consolidated amended complaints were filed with the Court that generally include: (i) claims by a putative class of investors in certain Janus funds asserting claims on behalf of the investor class (Marini, et al. v. Janus Investment Fund, et al., U.S. District Court, District of Maryland, Case No. 04-CV-00497); (ii) derivative claims by investors in certain Janus funds ostensibly on behalf of such funds (Steinberg et al. v. Janus Capital Management, LLC et al., U.S. District Court, District of Maryland, Case No. 04-CV-00518); (iii) claims on behalf of participants in the Janus 401(k) plan (Wangberger v. Janus Capital Group Inc., 401(k) Advisory Committee, et al., U.S. District Court, District of Maryland, Case No. JFM-05-2711); (iv) claims brought on behalf of shareholders of Janus Capital Group Inc. (“JCGI”) on a derivative basis against the Board of Directors of JCGI (Chasen v. Whiston, et al., U.S. District Court, District of Maryland, Case No. 04-MD-00855); and (v) claims by a putative class of shareholders of JCGI asserting claims on behalf of the shareholders (Wiggins, et al. v. Janus Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No. 04-CV-00818). Each of the five complaints initially named JCGI and/or Janus Capital as a defendant. In addition, the following were also named as defendants in one or more of the actions: Janus Investment Fund (“JIF”), Janus Aspen Series (“JAS”), Janus Adviser Series (“JAD”), Janus Distributors LLC, Enhanced Investment Technologies, LLC (“INTECH”), Bay Isle Financial LLC (“Bay Isle”), Perkins, Wolf, McDonnell and Company, LLC (“Perkins”), the Advisory Committee of the Janus 401(k) plan, and the current or former directors of JCGI.
On August 25, 2005, the Court entered orders dismissing most of the claims asserted against Janus Capital and its affiliates by fund investors in the Marini and Steinberg cases (actions (i) and (ii) above) except certain claims under Section 10(b) of the Securities Exchange Act of 1934 and under Section 36(b) of the Investment Company Act of 1940, as amended (the “1940 Act”). On August 15, 2006, the Wangberger complaint in the 401(k) plan class action (action (iii) above) was dismissed by the district court with prejudice. The plaintiff appealed that dismissal decision to the United States Court of Appeals for the Fourth Circuit. The appeal is still pending and argument in the matter was held in December 2007. The Court also dismissed the Chasen lawsuit (action (iv) above) against JCGI’s Board of Directors without leave to amend. Finally, a Motion to Dismiss the Wiggins suit (action (v) above) was granted and the matter was dismissed in May 2007. However, in June 2007, Plaintiffs appealed that dismissal to the United States Court of Appeals for the Fourth Circuit. That appeal is currently pending.
In addition to the lawsuits described above, the Auditor of the State of West Virginia (“Auditor”), in his capacity as securities
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Notes to Financial Statements (unaudited) (continued)
commissioner, has initiated administrative proceedings against many of the defendants in the market timing cases (including JCGI and Janus Capital) and, as a part of its relief, is seeking disgorgement and other monetary relief based on similar market timing allegations (In the Matter of Janus Capital Group Inc. et al., Before the Securities Commissioner, State of West Virginia, Summary Order No. 05-1320). The respondents in these proceedings collectively sought a Writ of Prohibition in state court, which was denied. Their subsequent Petition for Appeal was also denied. Consequently, in September 2006, JCGI and Janus Capital filed their answer to the Auditor’s summary order instituting proceedings and requested a hearing. A status conference was held on June 28, 2007, during which the parties were ordered to submit their proposed scheduling order. To date, no scheduling order has been entered in the case. In addition to the pending Motion to Discharge Order to Show Cause, JCGI and Janus Capital, as well as other similarly situated defendants, continue to challenge the statutory authority of the Auditor to bring such an action.
During 2007, two lawsuits were filed against Janus Management Holdings Corporation (“Janus Holdings”), an affiliate of JCGI, by former Janus portfolio managers, alleging that Janus Holdings unilaterally implemented certain changes to compensation in violation of prior agreements. These complaints allege some or all of the following claims: (1) breach of contract; (2) willful and wanton breach of contract; (3) breach of good faith and fair dealing; and (4) estoppel. Janus Holdings filed Answers to these complaints denying any liability for these claims and intends to vigorously defend against the allegations.
Additional lawsuits may be filed against certain of the Janus funds, Janus Capital, and related parties in the future. Janus Capital does not currently believe that these pending actions will materially affect its ability to continue providing services it has agreed to provide to the Janus funds.
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to their portfolio securities is available: (i) without charge, upon request, by calling 1-800-525-3713 (toll free); (ii) on the Funds’ website at www.janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding each Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through www.janus.com and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Funds file their complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Funds’ Form N-Q: (i) is available on the SEC’s website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-3713 (toll free).
Approval of Advisory Agreements During the Period
The Trustees of Janus Investment Fund, none of whom has ever been affiliated with Janus Capital (“Independent Trustees”), oversee the management of each Fund and, as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the three Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed a substantial amount of information provided by Janus Capital and the respective subadvisers in response to requests of the Independent Trustees and their independent legal counsel. They also received and reviewed a considerable amount of information and analysis provided by their independent fee consultant. Throughout their consideration of the agreements, the Independent Trustees were advised by their independent legal counsel. The Independent Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 14, 2007, based on their evaluation of the information provided by Janus Capital, the subadvisers and the independent fee consultant, as well as other information, the Trustees determined that the overall arrangements between each Fund and Janus Capital and each subadviser, as applicable, were fair and reasonable in light of the nature, extent and quality of the services provided by Janus Capital, its affiliates and the subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting the Trustees unanimously approved the continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, for the period from February 1, 2008 through February 1, 2009 (January 1, 2008 through January 1, 2009 for INTECH Risk-Managed Stock Fund and Janus Global Research Fund), subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective and strategy of each Fund, the knowledge of 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, especially those who provide investment management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions, serving as the Funds’ administrator, monitoring adherence to the Funds’ investment restrictions, producing shareholder reports, providing support services for the Trustees and Trustee committees, communicating with shareholders, and overseeing the activities of other service providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital and/or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements; that, taking into account steps taken to address those Funds whose performance lagged that of the median of their peers for certain periods, the quality of those services had been consistent with or superior to quality norms in the industry; and that 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
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Additional Information (unaudited) (continued)
appropriate education and experience, to serve the Funds effectively and had demonstrated its continuing ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the investment performance of each Fund over various time periods. They reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by Lipper Inc., an independent provider of investment company data, and with the Fund’s benchmark index. They concluded that the performance of many Funds was good to very good under current market conditions. Although the performance of some Funds lagged that of the median of their peers for certain periods, the Trustees also concluded that Janus Capital had taken appropriate steps to address those instances of under-performance and that the more recent performance of most of those Funds had been improving.
Costs of Services Provided
The Trustees examined information on the fees and expenses of each Fund in comparison to similar information for comparable funds as provided by Lipper. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and administrative) fees for most of the Funds, after contractual expense limitations, was below the mean management fee rate of the respective peer group of funds selected by Lipper.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital to its separate account clients and to its subadvised funds (for which Janus Capital provides only services related to portfolio management). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administrative services, oversight of the Funds’ other service providers, Trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, the Trustees noted that the spread between the average fee rates charged to the Funds and the fee rates that Janus Capital charged to its separate account clients was significantly smaller than the average spread for such fee rates of other advisers, based on publicly available data and research conducted by their independent fee consultant.
The Trustees reviewed information on the profitability to Janus Capital and its affiliates of their relationships with each Fund, as well as an explanation of the methodology used in allocating various expenses of Janus Capital and its affiliates among the Funds and other clients. They also reviewed the financial statements of Janus Capital’s parent company and its corporate structure. In their review, the Trustees considered whether Janus Capital and each subadviser receives adequate incentives to manage the Funds effectively. They recognized that profitability comparisons among investment advisers are difficult because very little comparative information is publicly available and profitability of any adviser is affected by numerous factors, including the organizational structure of the particular adviser, the types of funds and other accounts it manages, possible other lines of business, the methodology for allocating expenses, and the adviser’s capital structure and cost of capital. However, based on the information available and taking those factors into account, the Trustees concluded that Janus Capital’s profitability with respect to each Fund in relation to the services rendered was not unreasonable.
The Trustees concluded that the management fees and other compensation payable by each Fund to Janus Capital and its affiliates, as well as the fees payable by Janus Capital or the Funds to the subadvisers of subadvised Funds, were reasonable in relation to the nature, extent and quality of the services provided, taking into account the fees charged by other advisers for managing comparable mutual funds with similar strategies and the fees Janus Capital and the subadvisers charge to other clients. They also concluded that the overall expense ratio of each Fund was reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund and any expense limitations agreed to by Janus Capital.
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of the Funds increase. They noted that, although most Funds pay advisory fees at a fixed rate as a percentage of net assets, without any breakpoints, the management fee rate paid by each Fund, after any contractual expense limitations, was below the mean management fee rate of the Fund’s peer group selected by Lipper; and, for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of many of the Funds declined in the past few years, those Funds benefited from having advisory fee rates that remained constant rather than increasing as assets declined. In addition, performance fee structures have been
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implemented for several Funds that will cause the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through lower charges of third-party service providers, based on the combined scale of all of the Funds. Based on all of the information they reviewed, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of economies of scale at the current asset level of the Fund.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and that the transfer agent receives compensation directly from the non-money market Funds for services provided. They also considered Janus Capital’s past and proposed use of commissions paid by Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting those Funds and/or other clients of Janus Capital. The Trustees concluded that Janus Capital’s use of “soft” commission dollars of a Fund to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit the Funds. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital may potentially benefit from their relationship with each other in other ways. They also concluded that Janus Capital benefits from the receipt of proprietary and third-party research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s receipt of those products and services, as well as research products and services acquired through commissions paid by other clients of Janus Capital. They further concluded that success of any Fund could attract other business to Janus Capital or other Janus funds and that the success of Janus Capital could enhance Janus Capital’s ability to serve the Funds.
After full consideration of the above factors, as well as other factors, all of the Trustees, all of whom are Independent Trustees, concluded that the proposed continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, was in the best interest of the respective Funds and their shareholders.
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Explanations of Charts, Tables and
Financial Statements (unaudited)
Financial Statements (unaudited)
1. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in each Fund (from inception) with one or more widely used market indices. The hypothetical example does not represent the returns of any particular investment.
When comparing the performance of a Fund with an index, keep in mind that market indices do not include brokerage commissions that would be incurred if you purchased the individual securities in the index. They also do not include taxes payable on dividends and interest or operating expenses incurred if you maintained a Fund invested in the index.
Average annual total returns are also quoted for each Fund. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized and unsubsidized ratios for the past fiscal year. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting a Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and/or Janus Services LLC and reflects a Fund’s subsidized expense ratio. Both the total annual fund operating expenses ratio and net annual fund operating expenses ratio are based on average net assets as of the fiscal year ended October 31, 2007. The ratios also include expenses indirectly incurred by the Fund as a result of investing in other investment companies or pooled investments, which are not reflected in the “Financial Highlights” of this report. As a result, these ratios may be higher or lower than those shown in the “Financial Highlights” in this report. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
2. | Schedules of Investments |
Following the performance overview section is each Fund’s Schedule of Investments. This schedule reports the industry concentrations and types of securities held in each Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
Funds that invest in foreign securities also provide a summary of investments by country. This summary reports the Fund’s exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country in which the company is incorporated.
2a. Forward Currency Contracts
A table listing forward currency contracts follows each Fund’s Schedule of Investments (if applicable). Forward currency contracts are agreements to deliver or receive a preset amount of currency at a future date. Forward currency contracts are used to hedge against foreign currency risk in the Fund’s long-term holdings.
The table provides the name of the foreign currency, the settlement date of the contract, the amount of the contract, the value of the currency in U.S. dollars and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the change in currency exchange rates from the time the contract was opened to the last day of the reporting period.
2b. Futures
A table listing futures contracts follows each Fund’s Schedule of Investments (if applicable). Futures contracts are contracts that obligate the buyer to receive and the seller to deliver an instrument or money at a specified price on a specified date. Futures are used to hedge against adverse movements in securities prices, currency risk or interest rates.
The table provides the name of the contract, number of contracts held, the expiration date, the principal amount, value and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the marked-to-market amount for the last day of the reporting period.
2c. Options
A table listing written options contracts follows each Fund’s Schedule of Investments (if applicable). Written options contracts are contracts that obligate a Fund to sell or purchase an underlying security at a fixed price, upon exercise of the option. Options are used to hedge against adverse movements in securities prices, currency risk or interest rates.
The table provides the name of the contract, number of contracts held, the expiration date, exercise price, value and premiums received.
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3. | Statement of Assets and Liabilities |
This statement is often referred to as the “balance sheet.” It lists the assets and liabilities of the Funds on the last day of the reporting period.
The Funds’ assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on stocks owned and the receivable for Fund shares sold to investors but not yet settled. The Funds’ liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Funds’ net assets. Because Funds must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Funds’ net assets (assets minus liabilities) by the number of shares outstanding.
4. | Statement of Operations |
This statement details the Funds’ income, expenses, gains and losses on securities and currency transactions, and appreciation or depreciation of current Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from stocks and interest earned from interest-bearing securities in the Funds.
The next section reports the expenses incurred by the Funds, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the increase or decrease in the value of securities held in the Funds. The Funds realize a gain (or loss) when they sell their position in a particular security. An unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Funds during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
5. | Statement of Changes in Net Assets |
This statement reports the increase or decrease in the Funds’ net assets during the reporting period. Changes in the Funds’ net assets are attributable to investment operations, dividends, distributions and capital share transactions. This is important to investors because it shows exactly what caused the Funds’ net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Funds’ investment performance. The Funds’ net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends in cash, money is taken out of the Fund to pay the distribution. If investors reinvest their dividends, the Funds’ net assets will not be affected. If you compare each Fund’s “Net Decrease from Dividends and Distributions” to the “Reinvested dividends and distributions,” you will notice that dividend distributions had little effect on each Fund’s net assets. This is because the majority of Janus investors reinvest their distributions.
The reinvestment of dividends is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Funds through purchases or withdrawals via redemptions. “Redemption Fees” (if applicable) refers to the fee paid to the Funds for shares held for 90 days or less by a shareholder. The Funds’ net assets will increase and decrease in value as investors purchase and redeem shares from the Funds.
6. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect each Fund’s net asset value (“NAV”) for current and past reporting periods. Not only does this table provide you with total return, it also reports total distributions, asset size, expense ratios and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income per share, which comprises dividends and interest income earned on securities held by the Fund. Following is the total of gains/(losses), realized and unrealized. Dividends and distributions are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the average annual total return reported the last day of the period.
Also included are the expense ratios, or the percentage of average net assets that were used to cover operating expenses during the period. Expense ratios vary across the Funds for a number of reasons, including the differences in management fees, the frequency of dividend payments and the extent of foreign investments, which entail greater transaction costs.
The Funds’ expenses may be reduced through expense-reduction arrangements. These arrangements may include the use of balance credits or transfer agent fee offsets. The Statement of Operations reflects total expenses before any such offset, the amount of the offset and the net expenses. The
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Explanations of Charts, Tables and
Financial Statements (unaudited) (continued)
Financial Statements (unaudited) (continued)
expense ratios listed in the Financial Highlights reflect total expenses prior to any expense offset (gross expense ratio) and after the expense offsets (net expense ratio). Both expense ratios reflect expenses after waivers (reimbursements), if applicable.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of a Fund during the reporting period. Don’t confuse this ratio with a Fund’s yield. The net investment income ratio is not a true measure of a Fund’s yield because it doesn’t take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in a Fund. Portfolio turnover is affected by market conditions, changes in the size asset of a Fund, the nature of the Fund’s investments and the investment style of the portfolio manager. A 100% rate implies that an amount equal to the value of the entire portfolio is turned over in a year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the portfolio is traded every six months.
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Notes
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Janus provides access to a wide range of investment disciplines.
Asset Allocation
Janus asset allocation portfolios invest in several underlying mutual funds, rather than individual securities, in an attempt to offer investors an instantly diversified portfolio. Janus Smart Portfolios are unique in their combination of funds that leverage the fundamental research approach of Janus with funds supported by the risk-managed, mathematical investment process of INTECH (a Janus subsidiary).
Growth
Janus growth funds focus on companies believed to be the leaders in their respective industries, with solid management teams, expanding market share, margins and efficiencies.
Core
Janus core funds seek investments in more stable and predictable companies. These funds look for a strategic combination of steady growth and for certain funds, some degree of income.
Risk-Managed
Our risk-managed fund seeks to outperform its index while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH (a Janus subsidiary), this fund uses a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Janus value funds invest in companies they believe are poised for a turnaround or are trading at a significant discount to fair value. The goal is to gain unique insight into a company’s true value and identify and evaluate potential catalysts that may unlock shareholder value.
International & Global
Janus international and global funds seek to leverage Janus’ research capabilities by taking advantage of inefficiencies in foreign markets, where accurate information and analytical insight are often at a premium.
Bond & Money Market
Janus bond funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek maximum current income consistent with stability of capital.
For more information about our funds, go to www.janus.com.
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from www.janus.com. Read it carefully before you invest or send money.
Investments in money market funds are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the money market funds.
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Funds distributed by Janus Distributors LLC (6/08)
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Table of Contents
2008 Semiannual Report
Janus International & Global Funds
Janus Global Research Fund
Janus Overseas Fund
Janus Worldwide Fund
Look Inside. . .
• Portfolio management perspective
• Investment strategy behind your fund
• Fund performance, characteristics and holdings
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Janus International & Global Funds
Co-Chief Investment Officers’ Letter to Shareholders | 1 | |
Useful Information About Your Fund Report | 5 | |
Management Commentaries and Schedules of Investments | ||
Janus Global Opportunities Fund | 6 | |
Janus Global Research Fund | 13 | |
Janus Overseas Fund | 22 | |
Janus Worldwide Fund | 30 | |
Statements of Assets and Liabilities | 37 | |
Statements of Operations | 38 | |
Statements of Changes in Net Assets | 40 | |
Financial Highlights | 42 | |
Notes to Schedules of Investments | 44 | |
Notes to Financial Statements | 46 | |
Additional Information | 56 | |
Explanations of Charts, Tables and Financial Statements | 59 |
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from www.janus.com. Read it carefully before you invest or send money.
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Co-Chief Investment Officers’ Letter to the Shareholders
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Jonathan Coleman
Co-Chief Investment Officer
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Gibson Smith
Co-Chief Investment Officer
Dear Shareholders,
Challenging economic conditions have been the dominant theme for the financial markets over the past several months. Despite recent volatility, our investment team has maintained a relentless focus on our fundamental, bottom-up research process and has continued to discover compelling investment opportunities for our shareholders.
Major Market Themes
Turmoil in the credit markets, uncertainty surrounding the near-term outlook for the U.S. economy and a weaker corporate profit picture made for a volatile and difficult market environment over the past several months. While sentiment toward the end of the period improved and U.S. equity markets finished well above their mid-March lows, stocks were broadly lower over the six months ended April 30, 2008. The Russell 1000® Index declined 9.54%, the Russell 2000® Index was down 12.92% and the Morgan Stanley Capital International (MSCI) All Country World IndexSM gave up 9.47% during the period. Fixed-income markets proved to be volatile over the period with the Lehman Brothers Aggregate Bond Index up 4.08% and the Lehman Brothers High-Yield Bond Index lost 0.74% over the period.
Additional write-offs related to the loose lending practices over the previous 36 months, slowing consumer spending and a softening labor market, accompanied by record commodity prices and rising inflation expectations, weighed on investor sentiment during the period. Stocks reached their lows in mid-March amid fears that credit conditions could suffer another setback given a deteriorating liquidity position at investment bank Bear Stearns. Uncertain market conditions resulted in interest rates hitting five-year lows with the 10-Year Treasury Note touching 3.33%. Prior to that, periodic liquidity injections by the Federal Reserve (Fed) failed to alleviate the stress in the funding and credit markets. Financial markets stabilized somewhat after the Fed aggressively lowered the Federal Funds rate, expanded the collateral it would accept, allowed for broker/dealers to borrow directly from the Fed and played an instrumental role in JP Morgan Chase’s purchase of near-defunct Bear Stearns. All of these moves were vitally important toward stabilizing the financial system while allowing for the recovery process to continue. By the end, the Fed had lowered its target interest rate from 4.50% to 2.00% during the period.
Following the March lows, the equity market’s rally at the end of the six-month period can be attributed to the moves by the Fed and, in part, to improving sentiment as investors began to look ahead to a possible economic recovery. Nevertheless, concerns about elevated inflationary pressures, soft consumer spending, the weak housing market and the lingering possibility of more write-downs continued to weigh on the market.
Performance Notables
For the one-year period ended April 30, 2008, 77% of Janus’ retail funds ranked within Lipper’s top two quartiles, based upon total returns. The results were even stronger over longer time periods as 87% of our retail funds achieved first- or second-quartile Lipper rankings over three years and 86% ranked in Lipper’s top two quartiles over five years. Furthermore, 78.3% of our retail funds had a 4- or 5-star overall Morningstar Ratingtm as of April 30, 2008, well ahead of the 32.5% of funds for which Morningstar awards 4- or 5-stars in each category. (See complete Lipper rankings on page 3 and complete Morningstar Ratingstm on page 4).
Investment Team Update
We continue to enhance the breadth of our global stock coverage and work tirelessly to generate solid investment insights in an attempt to deliver superior investment performance. Our hands-on research approach is critical to our stock selection process. As such, the Janus equity research team traveled over 2.9 million miles in 2007 investigating potential stock and bond picks worldwide. This year, we plan to embark on a multi-year strategy to locate certain investment personnel closer to the companies that they research as an important first step in building out our global footprint from a research standpoint.
While our objective is to develop a research edge and invest with conviction in our funds, we seek to do so in a disciplined and thoughtful way by clearly understanding and managing risk in our portfolios. Dan Scherman, Director of Risk and Trading, works continually with our investment management
Janus International and Global Funds April 30, 2008 1
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Continued
team to ensure that portfolio risks are intentional and calculated. We believe this analysis is both timely and critical as we navigate today’s challenging markets.
Conclusion
As we look back over the past six months, we are relieved that signs of stabilization appeared in the financial markets as the period came to a close. However, we recognize that there are still significant challenges ahead. Increasing risk aversion has resulted in a significant contraction of credit availability for both consumers and corporations. The tightening of credit, along with declining real estate prices, rising energy prices and a climbing unemployment rate may all create significant economic headwinds in the near future. While unsettling, we believe this is a natural and necessary process of recovery from the excessive risk-taking and loose lending standards that developed over the previous several years in many areas of the credit markets. We feel that the environment will improve as the healing process progresses.
So, as we look ahead, we are paying very close attention to the outlook for the global economy, with a keen focus on slowing growth in the United States and the growth rates of the emerging economies around the globe. As these emerging economies become more prosperous, they may be able to move from economies based exclusively on exports fueling their growth to more balanced models emphasizing both exports and internal consumption of the goods they produce. Over a longer period of time, we believe this creates more stability in the global economy. We are also watching rising energy and commodity prices and their impact on inflationary expectations and the absolute level of interest rates. In addition to interest rates, we are focused on the outlook for the housing market and the implications of changes in home prices on the underlying health of the financial system, believing that the recapitalization of the banking and brokerage sectors is a vitally important element of the healing process.
While market volatility is undoubtedly challenging, it can also create an environment that can result in incredibly compelling investment opportunities. Our top priority is to remain committed to our process of in-depth fundamental research, which has been at the core of our investment process since Janus’ inception in 1969. With this singular focus we strive to deliver consistent long-term results for our shareholders.
Thank you for your continued investment in Janus funds.
Sincerely,
![(-s- JONATHAN COLEMAN)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646scolemaj.gif)
Jonathan Coleman
Co-Chief Investment Officer
![(-s- GIBSON SMITH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646ssmithgi.gif)
Gibson Smith
Co-Chief Investment Officer
2 Janus International and Global Funds April 30, 2008
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Lipper Rankings (unaudited)
Lipper Rankings – Based on total returns as of 4/30/08 | ||||||||||||||||||||||||||
One Year | Three Year | Five Year | Ten Year | Since Inception | Since PM Inception | |||||||||||||||||||||
Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | |||||||||||||||
Lipper Category | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | ||||||||||||||
Janus Investment Fund (Inception Date) | ||||||||||||||||||||||||||
Janus Fund (2/70) | Large-Cap Growth Funds | 58 | 429/748 | 26 | 162/634 | 39 | 203/528 | 43 | 107/250 | 11 | 2/18 | 32 | 246/776 | |||||||||||||
Janus Enterprise Fund(1)(9/92) | Mid-Cap Growth Funds | 9 | 50/604 | 6 | 27/503 | 6 | 21/414 | 34 | 60/179 | 26 | 12/46 | 3 | 13/623 | |||||||||||||
Janus Orion Fund (6/00) | Multi-Cap Growth Funds | 2 | 10/513 | 2 | 5/396 | 1 | 1/329 | N/A | N/A | 17 | 35/212 | 3 | 16/558 | |||||||||||||
Janus Research Fund(1) (5/93) | Large-Cap Growth Funds | 19 | 141/748 | 4 | 24/634 | 3 | 14/528 | 3 | 7/250 | 3 | 2/79 | 2 | 9/678 | |||||||||||||
Janus Triton Fund(1)(2/05) | Small-Cap Growth Funds | 8 | 42/598 | 5 | 24/481 | N/A | N/A | N/A | N/A | 2 | 6/471 | 3 | 15/542 | |||||||||||||
Janus Twenty Fund* (4/85) | Large-Cap Growth Funds | 1 | 1/748 | 1 | 1/634 | 1 | 1/528 | 2 | 4/250 | 3 | 1/36 | 1 | 1/807 | |||||||||||||
Janus Venture Fund* (4/85) | Small-Cap Growth Funds | 69 | 410/598 | 32 | 150/481 | 9 | 35/395 | 24 | 44/187 | 9 | 1/11 | 23 | 69/308 | |||||||||||||
Janus Global Life Sciences Fund (12/98) | Health/Biotechnology Funds | 4 | 7/195 | 17 | 25/153 | 13 | 18/141 | N/A | N/A | 13 | 6/47 | 4 | 7/195 | |||||||||||||
Janus Global Technology Fund (12/98) | Science & Technology Funds | 23 | 60/264 | 16 | 38/241 | 29 | 63/219 | N/A | N/A | 19 | 14/74 | 18 | 45/250 | |||||||||||||
Janus Balanced Fund(1) (9/92) | Mixed-Asset Target Allocation Moderate Funds | 2 | 7/451 | 1 | 3/349 | 24 | 55/232 | 6 | 7/136 | 4 | 1/29 | 1 | 3/349 | |||||||||||||
Janus Contrarian Fund (2/00) | Multi-Cap Core Funds | 12 | 98/863 | 1 | 1/680 | 1 | 1/498 | N/A | N/A | 5 | 12/294 | 5 | 12/294 | |||||||||||||
Janus Fundamental Equity Fund(1) (6/96) | Large-Cap Core Funds | 25 | 201/822 | 4 | 26/684 | 6 | 34/575 | 1 | 3/299 | 1 | 1/207 | 26 | 217/848 | |||||||||||||
Janus Growth and Income Fund(1) (5/91) | Large-Cap Core Funds | 30 | 245/822 | 21 | 140/684 | 29 | 163/575 | 8 | 22/299 | 6 | 4/74 | 21 | 173/848 | |||||||||||||
INTECH Risk-Managed Stock Fund (2/03) | Multi-Cap Core Funds | 63 | 540/863 | 64 | 433/680 | 31 | 150/498 | N/A | N/A | 35 | 172/497 | 35 | 172/497 | |||||||||||||
Janus Mid Cap Value Fund – Inv(1)(2) (8/98) | Mid-Cap Value Funds | 6 | 17/332 | 13 | 34/264 | 17 | 34/204 | N/A | N/A | 2 | 1/66 | 2 | 1/66 | |||||||||||||
Janus Small Cap Value Fund – Inv*(2) (10/87) | Small-Cap Core Funds | 11 | 84/796 | 30 | 191/638 | 44 | 214/493 | 14 | 25/190 | 12 | 15/130 | 12 | 15/130 | |||||||||||||
Janus Flexible Bond Fund(1) (7/87) | Intermediate Investment Grade Debt Funds | 11 | 57/559 | 9 | 39/473 | 15 | 59/403 | 36 | 70/194 | 14 | 3/22 | 11 | 60/563 | |||||||||||||
Janus High-Yield Fund(1) (12/95) | High Current Yield Funds | 59 | 270/458 | 49 | 185/383 | 71 | 235/333 | 22 | 35/163 | 5 | 4/97 | 46 | 161/349 | |||||||||||||
Janus Short-Term Bond Fund(1) (9/92) | Short Investment Grade Debt Funds | 28 | 72/262 | 28 | 58/211 | 22 | 35/160 | 33 | 28/84 | 32 | 8/24 | 31 | 79/262 | |||||||||||||
Janus Global Opportunities Fund(1) (6/01) | Global Funds | 73 | 320/443 | 95 | 330/349 | 65 | 173/267 | N/A | N/A | 29 | 60/207 | 29 | 60/207 | |||||||||||||
Janus Global Research Fund(1)(2/05) | Multi-Cap Growth Funds | 4 | 15/443 | 3 | 10/349 | N/A | N/A | N/A | N/A | 4 | 10/324 | 4 | 10/324 | |||||||||||||
Janus Overseas Fund*(1) (5/94) | International Funds | 1 | 7/1122 | 1 | 1/821 | 1 | 1/682 | 3 | 7/331 | 1 | 1/110 | 1 | 1/685 | |||||||||||||
Janus Worldwide Fund(1) (5/91) | Global Funds | 73 | 321/443 | 78 | 271/349 | 96 | 255/267 | 82 | 100/122 | 36 | 6/16 | 80 | 238/299 | |||||||||||||
Janus Smart Portfolio – Growth (12/05) | Mixed-Asset Target Allocation Growth Funds | 3 | 14/669 | N/A | N/A | N/A | N/A | N/A | N/A | 2 | 10/582 | 2 | 10/582 | |||||||||||||
Janus Smart Portfolio – Moderate (12/05) | Mixed-Asset Target Allocation Moderate Funds | 1 | 3/451 | N/A | N/A | N/A | N/A | N/A | N/A | 2 | 7/383 | 2 | 7/383 | |||||||||||||
Janus Smart Portfolio – Conservative (12/05) | Mixed-Asset Target Allocation Conservative Funds | 3 | 9/429 | N/A | N/A | N/A | N/A | N/A | N/A | 2 | 6/339 | 2 | 6/339 | |||||||||||||
(1) | The date of the Lipper ranking is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception. | |
(2) | Rating is for the Investor Share class only; other classes may have different performance characteristics. |
* | Closed to new investors. |
Past performance is no guarantee of future results. Call 1-800-525-3713 or visit janus.com for current month end performance.
If an expense waiver was in effect, it may have had a material effect on the total return or yield, and therefore the ranking for the period.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
Janus International and Global Funds April 30, 2008 3
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Morningstar Ratingstm (unaudited)
Morningstar Ratingstm based on | ||||||||||||||||||||
total returns as of 4/30/08 | ||||||||||||||||||||
OVERALL RATING(1) | THREE-YEAR RATING | FIVE-YEAR RATING | TEN-YEAR RATING | |||||||||||||||||
CATEGORY | STARS | # OF FUNDS | STARS | # OF FUNDS | STARS | # OF FUNDS | STARS | # OF FUNDS | ||||||||||||
Janus Investment Fund | ||||||||||||||||||||
Janus Fund | Large Growth Funds | *** | 1458 | **** | 1458 | *** | 1205 | *** | 566 | |||||||||||
Janus Enterprise Fund | Mid-Cap Growth Funds | **** | 828 | ***** | 828 | ***** | 694 | *** | 311 | |||||||||||
Janus Orion Fund | Mid-Cap Growth Funds | ***** | 828 | ***** | 828 | ***** | 694 | N/A | 311 | |||||||||||
Janus Research Fund | Large Growth Funds | ***** | 1458 | ***** | 1458 | ***** | 1205 | **** | 566 | |||||||||||
Janus Triton Fund | Small Growth Funds | ***** | 688 | ***** | 688 | N/A | 560 | N/A | 270 | |||||||||||
Janus Twenty Fund(2) | Large Growth Funds | ***** | 1458 | ***** | 1458 | ***** | 1205 | ***** | 566 | |||||||||||
Janus Venture Fund(2) | Small Growth Funds | *** | 688 | *** | 688 | **** | 560 | *** | 270 | |||||||||||
Janus Global Life Sciences Fund | Specialty-Health Funds | **** | 183 | **** | 183 | **** | 166 | N/A | 54 | |||||||||||
Janus Global Technology Fund | Specialty-Technology Funds | **** | 264 | **** | 264 | **** | 235 | N/A | 69 | |||||||||||
Janus Balanced Fund | Moderate Allocation Funds | ***** | 937 | ***** | 937 | **** | 717 | ***** | 422 | |||||||||||
Janus Contrarian Fund | Large Blend Funds | ***** | 1695 | ***** | 1695 | ***** | 1316 | N/A | 630 | |||||||||||
Janus Fundamental Equity Fund | Large Blend Funds | ***** | 1695 | ***** | 1695 | **** | 1316 | ***** | 630 | |||||||||||
Janus Growth and Income Fund | Large Growth Funds | **** | 1458 | *** | 1458 | *** | 1205 | ***** | 566 | |||||||||||
INTECH Risk-Managed Stock Fund | Large Blend Funds | **** | 1695 | *** | 1695 | **** | 1316 | N/A | 630 | |||||||||||
Janus Mid Cap Value Fund — Institutional Shares(2) | Mid-Cap Value Funds | ***** | 301 | ***** | 301 | ***** | 217 | N/A | 66 | |||||||||||
Janus Mid Cap Value Fund — Investor Shares | Mid-Cap Value Funds | ***** | 301 | ***** | 301 | ***** | 217 | N/A | 66 | |||||||||||
Janus Small Cap Value Fund — Institutional Shares(2) | Small Value Funds | **** | 338 | **** | 338 | **** | 267 | **** | 102 | |||||||||||
Janus Small Cap Value Fund — Investor Shares(2) | Small Value Funds | **** | 338 | **** | 338 | *** | 267 | **** | 102 | |||||||||||
Janus Flexible Bond Fund | Intermediate-Term Bond Funds | **** | 984 | **** | 984 | **** | 832 | *** | 439 | |||||||||||
Janus High-Yield Fund | High Yield Bond Funds | *** | 470 | *** | 470 | ** | 402 | **** | 210 | |||||||||||
Janus Short-Term Bond Fund | Short-Term Bond Funds | **** | 388 | **** | 388 | **** | 290 | *** | 165 | |||||||||||
Janus Global Opportunities Fund | World Stock Funds | ** | 463 | * | 463 | ** | 390 | N/A | 201 | |||||||||||
Janus Global Research Fund | World Stock Funds | ***** | 463 | ***** | 463 | N/A | 390 | N/A | 201 | |||||||||||
Janus Overseas Fund(2) | Foreign Large Growth Funds | ***** | 184 | ***** | 184 | ***** | 158 | **** | 75 | |||||||||||
Janus Worldwide Fund | World Stock Funds | ** | 463 | ** | 463 | * | 390 | *** | 201 | |||||||||||
Janus Smart Portfolio — Growth | Moderate Allocation Funds | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||
Janus Smart Portfolio — Moderate | Moderate Allocation Funds | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||
Janus Smart Portfolio — Conservative | Conservative Allocation Funds | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||
Percent of funds rated 4 or 5 stars | 78.3% | 73.9% | 71.4% | 57.1% |
(1) | The Overall Morningstar RatingTM is derived from a weighted average of the performance figures associated with its three-, five-, and ten-year (if applicable) Morningstar RatingTM metrics. | |
(2) | Closed to new investors. |
Data presented reflects past performance, which is no guarantee of future results.
For each fund with at least a three-year history, Morningstar calculates a Morningstar RatingTM based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of the funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variation in the distribution percentages.)
© 2008 Morningstar, Inc. All Rights Reserved.
4 Janus International and Global Funds April 30, 2008
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Useful Information About Your Fund Report
Management Commentaries
The Management Commentaries in this report include valuable insight from each of the Funds’ managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
Please keep in mind that the opinions expressed by the Funds’ managers in the Management Commentaries are just that: opinions. They are a reflection of their best judgment at the time this report was compiled, which was April 30, 2008. As the investing environment changes, so could the managers’ opinions. These views are unique to each manager and aren’t necessarily shared by their fellow employees or by Janus in general.
Fund Expenses
We believe it’s important for our shareholders to have a clear understanding of Fund expenses and the impact they have on investment return.
The following is important information regarding each Fund’s Expense Example, which appears in each Fund’s Management Commentary within this Semiannual Report. Please refer to this information when reviewing the Expense Example for each Fund.
Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including redemption fees, where applicable, (and any related exchange fees) and (2) ongoing costs, including management fees and other Fund expenses. The example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the six-month period from November 1, 2007 to April 30, 2008.
Actual Expenses
The first line of the table in each example provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of the table in each example provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Janus Capital Management LLC (“Janus Capital”) has contractually agreed to waive Janus Global Research Fund’s total operating expenses, excluding brokerage commissions, interest, taxes, dividends and extraordinary expenses, to certain limits until at least March 1, 2009. Expenses in the example reflect the application of this waiver. Had the waiver not been in effect, your expenses would have been higher. More information regarding the waiver is available in the Funds’ prospectuses.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as redemption fees. These fees are fully described in the prospectus. Therefore, the second line of each table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Janus International and Global Funds April 30, 2008 5
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Janus Global Opportunities Fund (unaudited) | Ticker: JGVAX |
Fund Snapshot
This global fund seeks to find strong world-class businesses at what we believe are attractive valuations.
![(JASON YEE PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646pyeejaso.jpg)
Jason Yee
co-portfolio manager
![(GREGORY KOLB PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646pkolbgre.jpg)
Gregory Kolb
co-portfolio manager
Performance Overview
Janus Global Opportunities Fund returned (15.00)% over the six-month period ended April 30, 2008, underperforming its primary benchmark, the Morgan Stanley Capital International (MSCI) World IndexSM, which returned (9.37)% during the period.
Economic Overview
Turmoil in the credit markets, uncertainty surrounding the near-term outlook for the U.S. and global economies and a weaker corporate profit picture made for a volatile and difficult market environment over the past several months. While sentiment toward the end of the period improved and world equity markets finished well above the mid-March lows, stocks were broadly lower during the six-month period ended April 30, 2008.
Additional subprime-related write-offs, slowing U.S. consumer spending and a softening U.S. labor market, accompanied by record commodity prices and rising inflation expectations, weighed on investor sentiment during the period. Stocks reached their lows in mid-March amid fears that credit conditions could suffer another setback given a deteriorating liquidity position at investment bank Bear Stearns. Prior to that, periodic liquidity injections by the Federal Reserve (Fed) failed to alleviate the stress in the credit markets. World markets stabilized somewhat after the Fed aggressively lowered the Federal Funds rate, expanded the collateral it would accept and played an instrumental role in JP Morgan Chase’s purchase of Bear Stearns.
Overall, emerging market stocks in Latin America were among the biggest winners during the period amid continued strength in commodity prices. Developing markets in Asia were weak, with China suffering a sharp decline on worries over slowing export growth. In local currency terms, developed non-U.S. markets underperformed both emerging markets and U.S. stocks. The U.S. dollar weakened versus most major currencies for much of the period as concern over economic growth and a more accommodative Fed helped to fuel the negative sentiment toward it. Losses were broad across all sectors. Energy and materials were the only sectors to turn in a gain for the six-month period as the price of oil and other commodities soared. Meanwhile, financials and consumer discretionary stocks were the worst performing groups, suffering from turmoil in the credit markets, larger-than-expected subprime-related write-downs and a weakening economic outlook.
Following the March lows, the equity markets’ rally at the end of the period can be attributed in part to improving sentiment as investors began to look ahead to a possible economic recovery in the U.S. Nevertheless, concerns about elevated inflationary pressures, soft U.S. consumer spending, the weak U.S. housing market and the lingering possibility of more write-downs, continued to weigh on the market.
Stocks That Hindered Performance
The largest detractor from performance during the period was Dell. Worries over Dell’s exposure to the U.S. economy, and more importantly questions about their ability to succeed in their turnaround efforts weighed on the shares. We continue to believe Dell is a highly attractive investment, given its numerous competitive strengths, proven track record of high economic profitability and very well-capitalized balance sheet. Additionally we consider management, who are sizable owners themselves, to be highly capable. We think the company has a number of opportunistic initiatives in place which can improve business results over the coming years.
Apollo Group, which runs for-profit universities, fell in response to fears around its credit exposure and a dip in margins in February. With only a small fraction of their revenue coming from private loans, as opposed to government loans, we believe this issue is over-blown. Regarding margins, Apollo’s business has historically been highly profitable, but has varied from period–to-period, depending on such factors as the level of advertising and promotion expenditures and their ability to leverage their investment in instructional costs. Both of these concerns drove the share price lower during the period, however we believe they are very short-term in nature. We continue to be optimistic that the increasing need for higher education will provide a backdrop against which Apollo can generate meaningful growth over the long-term.
Stocks That Aided Performance
The top contributor to performance during the period was Nipponkoa Insurance Company. This top five non-life insurer in Japan is a conservatively managed company that has a long
6 Janus International and Global Funds April 30, 2008
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(unaudited)
history of generating underwriting profits from the policies it writes, in addition to earning additional income from its investment portfolio. We believe the company’s competitive position is strong and that management is a reasonably good steward of capital. Throughout most of the period, the position was a strong contributor. However, it fell toward the end of the period as the market focused on credit and economic concerns. Our view is that Nipponkoa will emerge relatively unharmed from the current U.S.-centric problems. We believe that the compelling valuation and expected return should compensate us for the modest balance sheet risk.
Syngenta A.G., the Swiss agrichemical company, continued to benefit from strong markets for its insecticides, pesticides and specialized seeds. Also, the company reported results that showed double-digit revenue growth and margin expansion. Although we are monitoring valuation, we believe that this company should have a relatively modest correlation with economic cycles.
Outlook
Looking ahead, we will be paying close attention to the U.S. employment picture, the availability of credit, U.S. consumer confidence and commodity prices, among other things. Should the U.S. labor market continue to soften amid continued weakness in the U.S. housing market, further slowing in U.S. consumer spending is likely. While the government stimulus checks could provide a temporary boost, the current de-leveraging of the U.S. economy could take time to complete, possibly lessening the potential for a sharp rebound in economic activity. Inflation remains a concern for the markets as well, given record commodity prices and its recent elevated level in many regions. Although inflation is generally a lagging indicator and should ease with slowing economic growth, it deserves attention given its negative impact on equity valuations and influence on central bank policy decisions.
While economic activity in the U.S. and other developed parts of the world appears to be slowing, the global economy continues to expand. We will continue to monitor the potential for further slowing in the U.S. and other large economies and the impact this could have on the rest of the global economy. Nevertheless, we remain committed to our fundamental investment approach in our effort to find opportunities that we believe represent an attractive risk/reward profile. As always, we will continue to emphasize bottom-up company analysis as our primary tool in our quest to add value for shareholders.
Thank you for your investment in Janus Global Opportunities Fund.
Janus International and Global Funds April 30, 2008 7
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Janus Global Opportunities Fund (unaudited)
Janus Global Opportunities Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Nipponkoa Insurance Company, Ltd. | 0.35% | |||
Syngenta A.G. | 0.33% | |||
Ryland Group, Inc. | 0.31% | |||
Tyco International, Ltd. | 0.26% | |||
Covidien, Ltd. | 0.23% |
5 Bottom Performers – Holdings
Contribution | ||||
Dell, Inc. | (3.34)% | |||
Apollo Group, Inc. – Class A | (1.36)% | |||
Pasona, Inc. | (1.22)% | |||
British Sky Broadcasting Group PLC | (1.19)% | |||
Esprit Holdings, Ltd. | (1.14)% |
5 Top Performers – Sectors
Fund Weighting | Morgan Stanley Capital International | |||||||||||
Fund Contribution | (% of Net Assets) | World IndexSM Weighting | ||||||||||
Energy | 0.00% | 0.00% | 10.89% | |||||||||
Utilities | 0.00% | 0.00% | 4.70% | |||||||||
Materials | (0.19)% | 4.67% | 7.45% | |||||||||
Telecommunication Services | (0.32)% | 1.83% | 4.78% | |||||||||
Financials | (0.47)% | 21.17% | 22.41% |
5 Bottom Performers – Sectors
Fund Weighting | Morgan Stanley Capital International | |||||||||||
Fund Contribution | (% of Net Assets) | World IndexSM Weighting | ||||||||||
Consumer Discretionary | (7.11)% | 41.33% | 9.74% | |||||||||
Information Technology | (3.25)% | 8.84% | 10.71% | |||||||||
Industrials | (1.47)% | 8.23% | 11.48% | |||||||||
Consumer Staples | (1.21)% | 8.48% | 8.96% | |||||||||
Health Care | (0.91)% | 5.45% | 8.88% |
8 Janus International and Global Funds April 30, 2008
Table of Contents
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2008
Dell, Inc. Computers | 6.6% | |||
Liberty Global, Inc. – Class A Broadcast Services and Programming | 6.5% | |||
Nipponkoa Insurance Company, Ltd. Property and Casualty Insurance | 6.0% | |||
Willis Group Holdings, Ltd. Insurance Brokers | 5.8% | |||
Metro A.G. Food – Retail | 5.3% | |||
30.2% |
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif21p02.gif)
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif21t02.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif21c02.gif)
Janus International and Global Funds April 30, 2008 9
Table of Contents
Janus Global Opportunities Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif21m02.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratio – for the fiscal year ended October 31, 2007 | ||||||||||
Fiscal | One | Five | Since | Total Annual Fund | |||||||
Year-to-Date | Year | Year | Inception* | Operating Expenses | |||||||
Janus Global Opportunities Fund | (15.00)% | (5.20)% | 14.28% | 8.37% | 1.08% | ||||||
Morgan Stanley Capital International World IndexSM | (9.37)% | (2.47)% | 15.18% | 6.73% | |||||||
Lipper Quartile | – | 3rd | 3rd | 2nd | |||||||
Lipper Ranking – based on total return for Global Funds | – | 320/443 | 173/267 | 60/207 | |||||||
Visit janus.com to view current performance and characteristic information | |||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
A 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.) All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
10 Janus International and Global Funds April 30, 2008
Table of Contents
(unaudited)
The Fund’s performance may be affected by risks that include those associated with non-diversification, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”),and derivatives. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and other details.
Foreign securities have additional risks including exchange rate changes, political and economic upheaval, the relative lack of information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. These risks are magnified in emerging markets. The prices of foreign securities held by the fund, and therefore a fund’s performance, may decline in response to such risks.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
June 30, 2001 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
Net dividends reinvested are the dividends that remain to be reinvested after foreign tax obligations have been met. Such obligations vary from country to country.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – June 29, 2001 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 850.00 | $ | 5.20 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,018.85 | $ | 5.67 | ||||||||
† | Expenses are equal to the annualized expense ratio of 1.13%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
Janus International and Global Funds April 30, 2008 11
Table of Contents
Janus Global Opportunities Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Common Stock – 99.3% | ||||||||
Agricultural Chemicals – 1.0% | ||||||||
4,663 | Syngenta A.G. | $ | 1,381,340 | |||||
Apparel Manufacturers – 4.1% | ||||||||
466,600 | Esprit Holdings, Ltd. | 5,750,288 | ||||||
Broadcast Services and Programming – 6.5% | ||||||||
258,953 | Liberty Global, Inc. – Class A* | 9,164,347 | ||||||
Building – Residential and Commercial – 9.7% | ||||||||
91,165 | Centex Corp. | 1,898,055 | ||||||
165,675 | KB Home# | 3,727,688 | ||||||
289,205 | Pulte Homes, Inc. | 3,771,233 | ||||||
131,081 | Ryland Group, Inc.# | 4,191,969 | ||||||
13,588,945 | ||||||||
Cellular Telecommunications – 1.6% | ||||||||
704,164 | Vodafone Group PLC | 2,227,003 | ||||||
Computers – 6.6% | ||||||||
493,500 | Dell, Inc.* | 9,193,905 | ||||||
Diversified Operations – 2.4% | ||||||||
70,653 | Tyco International, Ltd. | 3,305,854 | ||||||
E-Commerce/Services – 5.4% | ||||||||
232,672 | Expedia, Inc.* | 5,877,295 | ||||||
80,632 | IAC/InterActiveCorp* | 1,677,952 | ||||||
7,555,247 | ||||||||
Electronic Components – Miscellaneous – 6.6% | ||||||||
177,115 | Koninklijke (Royal) Philips Electronics N.V. | 6,649,754 | ||||||
70,653 | Tyco Electronics, Ltd. | 2,643,129 | ||||||
9,292,883 | ||||||||
Finance – Investment Bankers/Brokers – 4.9% | ||||||||
144,565 | JP Morgan Chase & Co. | 6,888,522 | ||||||
Food – Canned – 3.5% | ||||||||
215,240 | TreeHouse Foods, Inc.* | 4,879,491 | ||||||
Food – Catering – 3.8% | ||||||||
461,229 | Nissin Healthcare Food Service Company, Ltd. | 5,330,941 | ||||||
Food – Retail – 5.3% | ||||||||
93,430 | Metro A.G. | 7,384,947 | ||||||
Human Resources – 2.5% | ||||||||
4,809 | Pasona Group, Inc. | 3,441,043 | ||||||
Insurance Brokers – 5.8% | ||||||||
234,300 | Willis Group Holdings, Ltd. | 8,141,925 | ||||||
Medical – HMO – 2.4% | ||||||||
102,120 | UnitedHealth Group, Inc. | 3,332,176 | ||||||
Medical Products – 2.3% | ||||||||
70,653 | Covidien, Ltd. | 3,298,789 | ||||||
Property and Casualty Insurance – 6.0% | ||||||||
857,000 | Nipponkoa Insurance Company, Ltd.# | 8,396,561 | ||||||
Reinsurance – 2.9% | ||||||||
913 | Berkshire Hathaway, Inc. – Class B* | 4,069,241 | ||||||
Retail – Apparel and Shoe – 1.2% | ||||||||
74,223 | Next PLC | 1,677,386 | ||||||
Rubber/Plastic Products – 2.6% | ||||||||
260,700 | Tenma Corp. | 3,624,855 | ||||||
Savings/Loan/Thrifts – 4.2% | ||||||||
439,910 | NewAlliance Bancshares, Inc.# | 5,921,189 | ||||||
Schools – 2.9% | ||||||||
78,700 | Apollo Group, Inc. – Class A* | 4,005,830 | ||||||
Television – 5.1% | ||||||||
660,769 | British Sky Broadcasting Group PLC | 7,126,827 | ||||||
Total Common Stock (cost $120,812,555) | 138,979,535 | |||||||
Money Markets – 0.7% | ||||||||
222,360 | Janus Institutional Cash Management Fund – Institutional Shares, 2.82% | 222,360 | ||||||
695,640 | Janus Institutional Money Market Fund – Institutional Shares, 2.74% | 695,640 | ||||||
Total Money Markets (cost $918,000) | 918,000 | |||||||
Other Securities – 8.2% | ||||||||
5,213,276 | Allianz Dresdner Daily Asset Fund† | 5,213,276 | ||||||
1,560,408 | Repurchase Agreements† | 1,560,408 | ||||||
4,768,576 | Time Deposits† | 4,768,576 | ||||||
Total Other Securities (cost $11,542,260) | 11,542,260 | |||||||
Total Investments (total cost $133,272,815) – 108.2% | 151,439,795 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (8.2)% | (11,423,776) | |||||||
Net Assets – 100% | $ | 140,016,019 | ||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 23,139,984 | 15.3% | |||||
Germany | 7,384,947 | 4.9% | ||||||
Japan | 20,793,400 | 13.7% | ||||||
Netherlands | 6,649,755 | 4.4% | ||||||
Switzerland | 1,381,340 | 0.9% | ||||||
United Kingdom | 11,031,216 | 7.3% | ||||||
United States†† | 81,059,153 | 53.5% | ||||||
Total | $ | 151,439,795 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (45.3% excluding Short-Term Securities and Other Securities) |
See Notes to Schedules of Investments and Financial Statements.
12 Janus International and Global Funds April 30, 2008
Table of Contents
Janus Global Research Fund (unaudited) | Ticker: JARFX |
Fund Snapshot
This fund pulls together the best ideas from Janus’ research analysts into a single package.
Team-Based Approach
Led by Jim Goff,
Director of Research
Led by Jim Goff,
Director of Research
Performance Overview
For the six-month period ended April 30, 2008, Janus Global Research Fund returned (6.37)%, ourperforming its primary benchmark, the Morgan Stanley Capital International (MSCI) World Growth Index, which returned (7.51)% and its secondary benchmark, the Russell 1000® Index, which returned (9.54)%.
Economic Overview
Turmoil in the credit markets, uncertainty surrounding the near-term outlook for the U.S. and global economies and a weaker corporate profit picture made for a volatile and difficult market environment over the past several months. While sentiment toward the end of the period improved and world equity markets finished well above the mid-March lows, stocks were broadly lower during the six-month period ended April 30, 2008.
Overall, emerging market stocks in Latin America were among the biggest winners during the period amid continued strength in commodity prices. Developing markets in Asia were weak, with China suffering a sharp decline on worries over slowing export growth. In local currency terms, developed non-U.S. markets underperformed both emerging markets and U.S. stocks. The U.S. dollar weakened versus most major currencies for much of the period as concern over economic growth and a more accommodative Federal Reserve helped to fuel the negative sentiment toward it.
Following the March lows, the equity markets’ rally at the end of the period can be attributed in part to improving sentiment as investors began to look ahead to a possible economic recovery in the U.S. Nevertheless, concerns about elevated inflationary pressures, soft U.S. consumer spending, the weak U.S. housing market and the lingering possibility of more write-downs, continued to weigh on the market. By focusing on deeply researching our investments and maintaining a long term perspective, we were able to outperform the Fund’s benchmark indices for the period. The Fund uses the best stock picks from Janus’ more than 30 research analysts, with similar sector and non-U.S. weights as the Fund’s primary benchmark. Director of Research, Jim Goff, oversees the seven global sector teams and each team discusses ideas among team members to choose what they believe are the best for inclusion in the Fund. The result is a diversified portfolio of well-researched, high-conviction ideas. As of April 30, 2008, the Fund held 115 stocks with the top 10 securities representing 21% of the Fund’s net assets.
Contributors to Fund Performance
Leading the Fund’s performance was fertilizer company Potash Corporation of Saskatchewan. The company produces potash, nitrogen and phosphate, all three important components of fertilizers. We bought Potash because of a long-term bullish view on demand for agricultural products and we believe that the company will benefit from rising prices for potash as supply for this commodity struggles to keep pace with demand. We continue to see a super-cycle among agricultural commodities and related products, such as potash, for which the Canadian company is the world’s largest supplier.
Syngenta, the Swiss agrichemical company, reported results that showed double-digit revenue growth and margin expansion. The company, which produces agrichemicals and specialized seeds, also benefited from the strong agricultural cycle. Long term, we think that the company’s products will help alleviate tight conditions in agricultural commodities by contributing to the increase in yield. As with Potash, Syngenta provided some buffer against the most recent economic cycle.
Detractors from Fund Performance
In terms of country exposure, our holdings in China and the United Kingdom were the primary detractors. The Fund’s top individual detractor was Shanghai Electric Group. This industrial company involved in infrastructure equipment and projects in China fell among weakness in the Chinese market and on some concern about the pace of infrastructure investment in China. However, we continue to believe there is long-term value in this name.
SiRF Technology Holdings, another detractor during the period, is a supplier of semiconductors used in global positioning systems. It declined after reporting weaker-than-expected margins in its most recent quarter. The eroding margins suggested to us that the company’s competitive positioning was weaker than first thought. We chose to exit the position.
Janus International and Global Funds April 30, 2008 13
Table of Contents
Janus Global Research Fund (unaudited)
Outlook
The Fund remains sector-neutral and we expect stock selection to be a key driver of returns going forward. Volatile markets tend to give many investors a reason to focus on the short term. Therefore, we believe we will see many opportunities for long-term investors to purchase good businesses at attractive prices. Looking ahead, we will continue to invest with conviction in areas where we feel we can develop an edge through research. Through our valuation discipline and focus on risk management, we remain committed to delivering superior long-term results for our clients.
Thank you for your investment in Janus Global Research Fund.
14 Janus International and Global Funds April 30, 2008
Table of Contents
(unaudited)
Janus Global Research Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 1.16% | |||
Syngenta A.G. | 0.56% | |||
Owens-Illinois, Inc. | 0.52% | |||
Chaoda Modern Agriculture Holdings, Ltd. | 0.44% | |||
JA Solar Holdings Company, Ltd. (ADR) | 0.40% |
5 Bottom Performers – Holdings
Contribution | ||||
Shanghai Electric Group Company, Ltd. | (0.83)% | |||
SiRF Technology Holdings, Inc. | (0.57)% | |||
SAVVIS, Inc. | (0.48)% | |||
Amylin Pharmaceuticals, Inc. | (0.35)% | |||
ARM Holdings PLC | (0.31)% |
4 Top Performers – Sectors**
Morgan Stanley Capital | ||||||||||||
Fund Weighting | International World | |||||||||||
Fund Contribution | (% of Net Assets) | Growth Index Weighting | ||||||||||
Energy | 0.66% | 10.32% | 10.29% | |||||||||
Industrials | 0.05% | 27.65% | 26.58% | |||||||||
Other* | 0.00% | 0.00% | 0.02% | |||||||||
Health Care | (0.85)% | 10.77% | 11.58% |
4 Bottom Performers – Sectors**
Morgan Stanley Capital | ||||||||||||
Fund Weighting | International World | |||||||||||
Fund Contribution | (% of Net Assets) | Growth Index Weighting | ||||||||||
Communications | (1.72)% | 7.80% | 8.18% | |||||||||
Financials | (1.61)% | 8.99% | 8.96% | |||||||||
Technology | (1.59)% | 17.94% | 18.19% | |||||||||
Consumer | (1.00)% | 16.53% | 16.20% |
* | Industry not classified by Global Classification Standard. | |
** | The sectors listed above represent those covered by the seven analyst teams who comprise the Janus Research Team. |
Janus International and Global Funds April 30, 2008 15
Table of Contents
Janus Global Research Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2008
Potash Corporation of Saskatchewan, Inc. (U.S. Shares) Agricultural Chemicals | 3.5% | |||
Syngenta A.G. Agricultural Chemicals | 2.7% | |||
Siemens A.G. Diversified Operations | 2.2% | |||
Reliance Industries, Ltd. Oil Refining And Marketing | 2.1% | |||
JA Solar Holdings Company, Ltd. (ADR) Energy – Alternate Sources | 2.0% | |||
12.5% |
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif21p01.gif)
Emerging markets comprised 12.3% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif21t01.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif21c01.gif)
16 Janus International and Global Funds April 30, 2008
Table of Contents
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif21m01.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratios – for the fiscal year ended October 31, 2007 | ||||||||||
Fiscal | One | Since | Total Annual Fund | Net Annual Fund | |||||||
Year-to-Date | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Janus Global Research Fund | (6.37)% | 10.63% | 19.08% | 1.12% | 1.12% | ||||||
Morgan Stanley Capital International World Growth Index | (7.51)% | 2.86% | 11.00% | ||||||||
Russell 1000® Index | (9.54)% | (4.62)% | 6.75% | ||||||||
Lipper Quartile | – | 1st | 1st | ||||||||
Lipper Ranking – based on total return for Global Funds | – | 15/443 | 10/324 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
A 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
Janus Capital has contractually agreed to waive the Fund’s total operating expenses (excluding brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to a certain limit until at least March 1, 2009. The expense waiver shown reflects the application of such limit and is detailed in the Statement of Additional Information. Returns shown include fee waivers, if any, and without such waivers, the Fund’s returns would have been lower.
The Fund has a performance-based management fee that adjusts up or down based on the Fund’s performance relative to an approved benchmark index over a performance measurement period.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.) Contractual waivers agreed to by Janus Capital, where applicable, are included in the prospectus under “Net Annual Fund Operating Expenses.” All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses. The Fund’s total operating expenses did not exceed the expense limit so no waivers were in effect for the most recent period presented.
See important disclosures on the next page.
Janus International and Global Funds April 30, 2008 17
Table of Contents
Janus Global Research Fund (unaudited)
The Fund’s performance may be affected by risks that include those associated with investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and other details.
The Fund invests in Real Estate Investment Trusts (REITs) which may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: legal, political, liquidity, and interest rate risks, a decline in the value of real estate, risks related to economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
Foreign securities have additional risks including exchange rate changes, political and economic upheaval, the relative lack of information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. These risks are magnified in emerging markets. The prices of foreign securities held by the fund, and therefore a fund’s performance, may decline in response to such risks.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
February 28, 2005 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
Net dividends reinvested are the dividends that remain to be reinvested after foreign tax obligations have been met. Such obligations vary from country to country.
Effective January 1, 2007, Janus Global Research Fund compares its performance to the MSCI World Growth Index, and such benchmark index is used to calculate the Fund’s performance-based adjustment to the investment advisory fee for periods after January 1, 2007.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – February 25, 2005 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 936.30 | $ | 5.06 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.64 | $ | 5.27 | ||||||||
† | Expenses are equal to the annualized expense ratio of 1.05%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
18 Janus International and Global Funds April 30, 2008
Table of Contents
Janus Global Research Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Common Stock – 96.1% | ||||||||
Advertising Sales – 0.5% | ||||||||
37,934 | Lamar Advertising Co. – Class A*,# | $ | 1,499,910 | |||||
Aerospace and Defense – 3.8% | ||||||||
537,227 | BAE Systems PLC | 4,952,739 | ||||||
129,032 | Embraer-Empresa Brasileira de Aeronautica S.A. (ADR) | 5,378,053 | ||||||
10,330,792 | ||||||||
Agricultural Chemicals – 6.2% | ||||||||
52,120 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 9,587,475 | ||||||
25,216 | Syngenta A.G. | 7,469,840 | ||||||
17,057,315 | ||||||||
Agricultural Operations – 1.5% | ||||||||
13,528 | Bunge, Ltd.# | 1,543,410 | ||||||
1,844,700 | Chaoda Modern Agriculture Holdings, Ltd. | 2,655,134 | ||||||
4,198,544 | ||||||||
Apparel Manufacturers – 1.1% | ||||||||
241,400 | Esprit Holdings, Ltd. | 2,974,967 | ||||||
Applications Software – 1.6% | ||||||||
45,113 | Infosys Technologies, Ltd. | 1,949,290 | ||||||
83,335 | Microsoft Corp. | 2,376,714 | ||||||
4,326,004 | ||||||||
Athletic Footwear – 0.6% | ||||||||
25,456 | NIKE, Inc. – Class B | 1,700,461 | ||||||
Audio and Video Products – 0.8% | ||||||||
50,000 | Sony Corp. | 2,292,320 | ||||||
Brewery – 1.0% | ||||||||
34,276 | InBev N.V.# | 2,823,329 | ||||||
Building – Residential and Commercial – 1.1% | ||||||||
4,834 | NVR, Inc.* | 2,965,659 | ||||||
Casino Hotels – 0.7% | ||||||||
193,214 | Crown, Ltd. | 1,993,599 | ||||||
Cellular Telecommunications – 2.0% | ||||||||
48,308 | America Movil S.A. de C.V. – Series L (ADR) | 2,799,931 | ||||||
838,378 | Vodafone Group PLC | 2,651,471 | ||||||
5,451,402 | ||||||||
Chemicals – Diversified – 2.0% | ||||||||
25,076 | Bayer A.G.# | 2,132,059 | ||||||
53,500 | Shin-Etsu Chemical Company, Ltd. | 3,338,249 | ||||||
5,470,308 | ||||||||
Chemicals – Specialty – 0.7% | ||||||||
2,035,000 | Huabao International Holdings Limited | 1,818,527 | ||||||
Commer Banks – 0.7% | ||||||||
62,010 | Anglo Irish Bank Corporation PLC | 845,026 | ||||||
33,562 | Standard Chartered PLC | 1,189,059 | ||||||
2,034,085 | ||||||||
Commercial Services – 1.6% | ||||||||
478,100 | Park24 Company, Ltd.# | 4,379,851 | ||||||
Computers – 1.2% | ||||||||
19,100 | Apple, Inc.* | 3,322,445 | ||||||
Containers – Metal and Glass – 0.9% | ||||||||
42,515 | Owens-Illinois, Inc.*,** | 2,344,702 | ||||||
Cosmetics and Toiletries – 1.2% | ||||||||
82,780 | Avon Products, Inc. | 3,230,076 | ||||||
Diversified Minerals – 1.7% | ||||||||
120,806 | Companhia Vale do Rio Doce (ADR) | 4,721,098 | ||||||
Diversified Operations – 5.4% | ||||||||
588,000 | China Merchants Holdings International Company, Ltd. | 3,001,043 | ||||||
38,135 | Cooper Industries, Ltd. – Class A | 1,616,543 | ||||||
20,955 | Danaher Corp. | 1,634,909 | ||||||
29,755 | Ingersoll-Rand Co. – Class A# | 1,320,527 | ||||||
830,000 | Melco International Development, Ltd. | 1,138,620 | ||||||
50,855 | Siemens A.G. | 6,026,069 | ||||||
14,737,711 | ||||||||
Drug Delivery Systems – 0.6% | ||||||||
43,460 | Hospira, Inc.* | 1,788,379 | ||||||
Electric – Generation – 0.4% | ||||||||
70,685 | AES Corp.* | 1,227,092 | ||||||
Electronic Components – Semiconductors – 2.7% | ||||||||
812,501 | ARM Holdings PLC | 1,614,392 | ||||||
49,540 | Microsemi Corp.* | 1,213,730 | ||||||
6,391 | Samsung Electronics Company, Ltd. | 4,551,105 | ||||||
7,379,227 | ||||||||
Energy – Alternate Sources – 2.0% | ||||||||
225,105 | JA Solar Holdings Company, Ltd. (ADR)* | 5,404,771 | ||||||
Engineering – Research and Development Services – 1.9% | ||||||||
170,533 | ABB, Ltd. | 5,229,264 | ||||||
Enterprise Software/Services – 0.5% | ||||||||
64,225 | Oracle Corp.* | 1,339,091 | ||||||
Entertainment Software – 0.5% | ||||||||
26,245 | Electronic Arts, Inc.* | 1,350,830 | ||||||
Finance – Investment Bankers/Brokers – 1.4% | ||||||||
30,356 | JP Morgan Chase & Co. | 1,446,464 | ||||||
82,600 | Nomura Holdings, Inc. | 1,438,384 | ||||||
18,106 | optionsXpress Holdings, Inc. | 388,736 | ||||||
21,100 | UBS A.G. (U.S. Shares)# | 708,749 | �� | |||||
3,982,333 | ||||||||
Finance – Mortgage Loan Banker – 0.3% | ||||||||
32,631 | Fannie Mae | 923,457 | ||||||
Finance – Other Services – 1.1% | ||||||||
6,380 | CME Group, Inc. | 2,918,531 | ||||||
Food – Miscellaneous/Diversified – 2.0% | ||||||||
1,250,000 | FU JI Food & Catering Services# | 2,044,851 | ||||||
41,523 | Kraft Foods, Inc. – Class A | 1,313,372 | ||||||
4,684 | Nestle S.A. | 2,244,492 | ||||||
5,602,715 | ||||||||
Food – Retail – 1.0% | ||||||||
309,571 | Tesco PLC | 2,616,293 | ||||||
Independent Power Producer – 0.7% | ||||||||
43,729 | NRG Energy, Inc.*,# | 1,921,890 | ||||||
Investment Management and Advisory Services – 0.7% | ||||||||
36,034 | National Financial Partners Corp. | 970,035 | ||||||
18,678 | T. Rowe Price Group, Inc. | 1,093,784 | ||||||
2,063,819 | ||||||||
Machinery – General Industrial – 1.1% | ||||||||
5,611,405 | Shanghai Electric Group Company, Ltd.# | 3,164,723 | ||||||
See Notes to Schedules of Investments and Financial Statements.
Janus International and Global Funds April 30, 2008 19
Table of Contents
Janus Global Research Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Medical – Biomedical and Genetic – 1.8% | ||||||||
50,374 | Celgene Corp.* | $ | 3,130,241 | |||||
24,475 | Genzyme Corp.* | 1,721,816 | ||||||
4,852,057 | ||||||||
Medical – Drugs – 2.1% | ||||||||
44,721 | Merck & Company, Inc. | 1,701,187 | ||||||
13,963 | Roche Holding A.G. | 2,325,671 | ||||||
32,850 | Shire PLC (ADR)# | 1,804,779 | ||||||
5,831,637 | ||||||||
Medical – HMO – 1.0% | ||||||||
62,932 | Coventry Health Care, Inc.* | 2,814,948 | ||||||
Medical Instruments – 0.7% | ||||||||
43,744 | St. Jude Medical, Inc.* | 1,915,112 | ||||||
Medical Products – 0.7% | ||||||||
25,115 | Zimmer Holdings, Inc.* | 1,862,528 | ||||||
Multimedia – 0.9% | ||||||||
32,468 | McGraw-Hill Companies, Inc. | 1,330,864 | ||||||
70,676 | News Corporation, Inc. – Class A | 1,265,100 | ||||||
2,595,964 | ||||||||
Networking Products – 0.7% | ||||||||
72,865 | Cisco Systems, Inc.*,** | 1,868,259 | ||||||
Oil – Field Services – 2.0% | ||||||||
184,200 | Acergy S.A.# | 4,546,774 | ||||||
9,360 | Schlumberger, Ltd. (U.S. Shares) | 941,148 | ||||||
5,487,922 | ||||||||
Oil and Gas Drilling – 1.2% | ||||||||
84,635 | Nabors Industries, Ltd.* | 3,177,198 | ||||||
Oil Companies – Integrated – 3.9% | ||||||||
25,995 | Hess Corp. | 2,760,669 | ||||||
18,900 | Lukoil (ADR) | 1,706,670 | ||||||
32,475 | Petroleo Brasileiro S.A. (ADR) | 3,943,115 | ||||||
21,732 | Suncor Energy, Inc. | 2,453,160 | ||||||
10,863,614 | ||||||||
Oil Field Machinery and Equipment – 0.3% | ||||||||
18,775 | Cameron International Corp.* | 924,293 | ||||||
Oil Refining and Marketing – 2.1% | ||||||||
89,428 | Reliance Industries, Ltd. | 5,761,583 | ||||||
Optical Supplies – 0.8% | ||||||||
13,844 | Alcon, Inc. (U.S. Shares) | 2,187,352 | ||||||
Physician Practice Management – 0.7% | ||||||||
26,600 | Pediatrix Medical Group, Inc.* | 1,809,332 | ||||||
Power Converters and Power Supply Equipment – 0.8% | ||||||||
48,612 | Hubbell, Inc. – Class B | 2,174,415 | ||||||
Real Estate Management/Services – 1.1% | ||||||||
109,000 | Mitsubishi Estate Company, Ltd. | 3,144,047 | ||||||
Real Estate Operating/Development – 1.9% | ||||||||
397,000 | CapitaLand, Ltd. | 2,001,469 | ||||||
812,995 | Hang Lung Properties, Ltd. | 3,312,063 | ||||||
5,313,532 | ||||||||
Reinsurance – 0.5% | ||||||||
320 | Berkshire Hathaway, Inc. – Class B* | 1,426,240 | ||||||
REIT – Diversified – 0.4% | ||||||||
70,092 | CapitalSource, Inc. | 984,793 | ||||||
Retail – Apparel and Shoe – 2.1% | ||||||||
40,780 | Abercrombie & Fitch Co. – Class A# | 3,030,362 | ||||||
35,983 | Industria de Diseno Textil S.A. | 1,966,388 | ||||||
24,862 | Nordstrom, Inc. | 876,634 | ||||||
5,873,384 | ||||||||
Retail – Consumer Electronics – 0.5% | ||||||||
17,530 | Yamada Denki Company, Ltd. | 1,512,661 | ||||||
Retail – Drug Store – 0.8% | ||||||||
54,312 | CVS/Caremark Corp. | 2,192,575 | ||||||
Retail – Jewelry – 0.3% | ||||||||
18,560 | Tiffany & Co. | 808,102 | ||||||
Retail – Restaurants – 0.5% | ||||||||
23,285 | McDonald’s Corp. | 1,387,320 | ||||||
Semiconductor Components/Integrated Circuits – 2.7% | ||||||||
337,665 | Atmel Corp.* | 1,256,114 | ||||||
100,965 | Cypress Semiconductor Corp.* | 2,839,136 | ||||||
260,910 | Marvell Technology Group, Ltd.* | 3,378,784 | ||||||
7,474,034 | ||||||||
Telecommunication Equipment – 2.0% | ||||||||
301,759 | Arris Group, Inc.*,# | 2,444,248 | ||||||
62,115 | CommScope, Inc.* | 2,953,568 | ||||||
5,397,816 | ||||||||
Telecommunication Equipment – Fiber Optics – 1.0% | ||||||||
103,515 | Corning, Inc. | 2,764,886 | ||||||
Telecommunication Services – 2.4% | ||||||||
144,580 | Amdocs, Ltd. (U.S. Shares)* | 4,536,920 | ||||||
60,130 | SAVVIS, Inc.*,# | 880,905 | ||||||
64,894 | Time Warner Telecom, Inc. – Class A*,# | 1,271,922 | ||||||
6,689,747 | ||||||||
Television – 1.0% | ||||||||
254,715 | British Sky Broadcasting Group PLC | 2,747,268 | ||||||
Therapeutics – 0.3% | ||||||||
15,088 | Gilead Sciences, Inc.* | 780,955 | ||||||
Tobacco – 1.1% | ||||||||
84,482 | Altria Group, Inc. | 1,689,640 | ||||||
24,907 | Philip Morris International, Inc.* | 1,271,004 | ||||||
2,960,644 | ||||||||
Toys – 0.4% | ||||||||
58,290 | Mattel, Inc. | 1,092,938 | ||||||
Transportation – Services – 1.6% | ||||||||
26,816 | C.H. Robinson Worldwide, Inc. | 1,680,827 | ||||||
36,256 | United Parcel Service, Inc. – Class B | 2,625,297 | ||||||
4,306,124 | ||||||||
Web Portals/Internet Service Providers – 0.5% | ||||||||
2,300 | Google, Inc. – Class A* | 1,320,867 | ||||||
Wireless Equipment – 2.1% | ||||||||
67,596 | Crown Castle International Corp.* | 2,626,105 | ||||||
44,775 | QUALCOMM, Inc. | 1,933,832 | ||||||
482,338 | Telefonaktiebolaget L.M. Ericsson – Class B | 1,229,298 | ||||||
5,789,235 | ||||||||
Total Common Stock (cost $239,256,725) | 264,678,902 | |||||||
See Notes to Schedules of Investments and Financial Statements.
20 Janus International and Global Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Rights – 0% | ||||||||
Finance – Investment Bankers/Brokers – 0% | ||||||||
21,100 | UBS A.G. – expires 5/7/08 (cost $0) | $ | 35,250 | |||||
Money Markets – 4.1% | ||||||||
1,163,600 | Janus Institutional Cash Management Fund – Institutional Shares, 2.82% | 1,163,600 | ||||||
10,147,400 | Janus Institutional Money Market Fund – Institutional Shares, 2.74% | 10,147,400 | ||||||
Total Money Markets (cost $11,311,000) | 11,311,000 | |||||||
Other Securities – 8.3% | ||||||||
3,824,768 | Allianz Dresdner Daily Asset Fund† | 3,824,768 | ||||||
4,705,878 | Repurchase Agreements† | 4,705,878 | ||||||
Time Deposits: | ||||||||
1,135,154 | Abbey National Treasury Services, N.A., 2.375%, 5/1/08† | 1,135,154 | ||||||
506,457 | ABN-Amro Bank N.V., N.A., 2.26%, 5/1/08† | 506,457 | ||||||
590,712 | BNP Paribas, New York, N.A., 2.50%, 5/1/08† | 590,712 | ||||||
1,181,424 | Calyon, N.A., 2.50%, 5/1/08† | 1,181,424 | ||||||
411,178 | Chase Bank U.S.A., N.A., 2.25%, 5/1/08† | 411,178 | ||||||
1,299,567 | Danske Bank A/S Cayman, N.A., 2.53%, 5/1/08† | 1,299,567 | ||||||
826,997 | Deutsche Bank A.G., N.A., 2.30%, 5/1/08† | 826,997 | ||||||
1,181,424 | Dexia Bank S.A. Brussels, N.A., 2.50%, 5/1/08† | 1,181,424 | ||||||
1,181,424 | ING Bank N.V. Amsterdam, N.A., 2.4375%, 5/1/08† | 1,181,424 | ||||||
1,181,424 | Lloyd’s TSB Bank PLC London, N.A., 2.45%, 5/1/08† | 1,181,424 | ||||||
174,793 | Natixis, N.A., 2.38%, 5/1/08† | 174,793 | ||||||
1,181,424 | Natixis, N.A., 2.43%, 5/1/08† | 1,181,424 | ||||||
1,181,424 | Nordea Bank PLC Finland, N.A., 2.50%, 5/1/08† | 1,181,424 | ||||||
1,166,245 | Svenska Handelsbanken, N.A., 2.40%, 5/1/08† | 1,166,245 | ||||||
1,181,424 | Wells Fargo Bank, N.A., 2.375%, 5/1/08† | 1,181,424 | ||||||
Total Other Securities (cost $22,911,717) | 22,911,717 | |||||||
Total Investments (total cost $273,479,442) – 108.5% | 298,936,869 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (8.5)%** | (23,443,418) | |||||||
Net Assets – 100% | $ | 275,493,451 | ||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Australia | $ | 1,993,599 | 0.7% | |||||
Belgium | 2,823,329 | 0.9% | ||||||
Bermuda | 15,829,956 | 5.3% | ||||||
Brazil | 14,042,267 | 4.7% | ||||||
Canada | 12,040,634 | 4.0% | ||||||
Cayman Islands | 10,104,757 | 3.4% | ||||||
China | 3,164,723 | 1.1% | ||||||
Germany | 8,158,128 | 2.7% | ||||||
Guernsey | 4,536,920 | 1.5% | ||||||
Hong Kong | 7,451,726 | 2.5% | ||||||
India | 7,710,873 | 2.6% | ||||||
Ireland | 845,026 | 0.3% | ||||||
Japan | 16,105,513 | 5.4% | ||||||
Luxembourg | 4,546,774 | 1.5% | ||||||
Mexico | 2,799,932 | 0.9% | ||||||
Netherlands | 941,148 | 0.3% | ||||||
Russia | 1,706,670 | 0.6% | ||||||
Singapore | 2,001,469 | 0.7% | ||||||
South Korea | 4,551,104 | 1.5% | ||||||
Spain | 1,966,388 | 0.7% | ||||||
Sweden | 1,229,298 | 0.4% | ||||||
Switzerland | 20,200,617 | 6.7% | ||||||
United Kingdom | 17,576,001 | 5.9% | ||||||
United States†† | 136,610,017 | 45.7% | ||||||
Total | $ | 298,936,869 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (34.3% excluding Short-Term Securities and Other Securities) |
Total Return Swaps outstanding at April 30, 2008
Notional | Return Paid | Return Received | |||||||||||||
Counterparty | Amount | by the Fund | by the Fund | Termination Date | Unrealized Appreciation | ||||||||||
Morgan Stanley Capital Services | $ | 175,835 | 1-month Wynn Resorts, Ltd. plus Federal Funds rate minus 20 basis points | 1-month Melco PBL Entertainment (Macau), Ltd. (ADR) plus Federal Funds rate plus 25 basis points | 11/19/08 | $ | 169,606 | ||||||||
Morgan Stanley Capital Services | 54,334 | 1-month Wynn Resorts, Ltd. plus LIBOR minus 70 basis points | 1-month Melco International Development, Ltd. plus LIBOR plus 45 basis points | 12/11/08 | 34,668 | ||||||||||
$ | 204,274 | ||||||||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus International and Global Funds April 30, 2008 21
Table of Contents
Janus Overseas Fund (unaudited) (closed to new investors) | Ticker: JAOSX |
Fund Snapshot
This growth fund invests in overseas companies based on their individual merits regardless of their geography or industry sector.
![(BRENT LYNN PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646plynnbre.jpg)
Brent Lynn
portfolio manager
Performance Overview
Janus Overseas Fund returned (4.20)% over the six-month period ended April 30, 2008. The Fund’s primary benchmark, the Morgan Stanley Capital International (MSCI) EAFE® Index returned (9.21)%, and its secondary benchmark, the MSCI All Country World ex-U.S. IndexSM, returned (9.34)% during the period.
Economic Overview
The global credit crisis, fears of a U.S. and global economic slowdown, rising oil and commodity prices and inflationary pressures created a difficult market environment over the past six months. Although world equity markets finished above the mid-March lows, stocks were broadly lower during the six-month period ended April 30, 2008.
Energy and commodity stocks were among the biggest winners during the period driven by a strong commodity price environment. Financial and consumer discretionary stocks suffered as a result of the credit crisis and the weakening economic outlook. During the period, most major developed and emerging markets performed poorly. Also, the U.S. dollar weakened versus most major currencies.
Stocks That Aided Performance
The top three contributors to Fund performance during the period were agriculture companies K+S A.G., Potash Corporation of Saskatchewan and Chaoda Modern Agriculture Holdings. Fertilizer companies, German based K+S and Canada based Potash Corporation, benefited from price increases and strong volume growth for potash fertilizer. Rising crop prices, driven by demand growth from emerging economies and from ethanol, combined with limited global supply growth in potash created a favorable environment for potash producers. Although I continue to believe that fundamentals remain strong for K+S and Potash Corporation, I reduced positions in both companies during the period based on valuation. Chinese vegetable producer Chaoda performed well as the company continued to successfully acquire land and grow its vegetable production base. The company is also a potential beneficiary of rising food prices in China.
Stocks That Hindered Performance
Arcandor A.G., a German conglomerate with department store, travel, and mail order businesses, was the largest detractor during the period. The stock was hurt due to concerns about the impact of an economic slowdown on its consumer related businesses and concerns that the company’s ambitious restructuring plans would be stalled by the credit crisis. I believe that the benefits of the company’s restructuring program were not fully appreciated by the market, and I held onto the position during the period.
ARM Holdings, a U.K. semiconductor intellectual property company, fell as a result of disappointing earnings and concerns about the impact of an economic slowdown on its business. I continue to believe that ARM remains well positioned to benefit from the growth in semiconductors across a wide variety of applications. The company is a particular beneficiary of growth in more complex wireless devices like the iPhone.
Outlook
In a volatile market environment, the conviction to hold onto existing positions or buy new ones is critical. My conviction comes from the tremendous in-depth research our analyst team conducts on a daily basis.
The markets have been difficult over the past six months, and they may remain difficult for some time. Throughout turbulent markets, I have not changed my investment approach. I believe the best way to generate solid long-term returns is to make high-conviction, long-term investments in world class companies with exciting growth prospects trading at undeservedly low valuations. As manager of the Fund, my sole focus is to deliver strong, long-term performance for you. I will perform this job to the best of my ability.
Thank you for your continued investment in Janus Overseas Fund.
22 Janus International and Global Funds April 30, 2008
Table of Contents
(unaudited)
Janus Overseas Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
K+S A.G. | 1.40% | |||
Potash Corporation of Saskatchewan, Inc. | 1.24% | |||
Chaoda Modern Agriculture Holdings, Ltd. | 0.74% | |||
Mitsubishi Estate Company, Ltd. | 0.47% | |||
Suntech Power Holdings Company, Ltd. (ADR) | 0.47% |
5 Bottom Performers – Holdings
Contribution | ||||
Arcandor A.G. | (1.09)% | |||
ARM Holdings PLC | (0.81)% | |||
Esprit Holdings, Ltd. | (0.55)% | |||
IVG Immobilien A.G. | (0.44)% | |||
Samsung Electronics Company, Ltd. | (0.39)% |
5 Top Performers – Sectors
Fund Weighting | Morgan Stanley Capital | |||||||||||
Fund Contribution | (% of Net Assets) | International EAFE® Index Weighting | ||||||||||
Materials | 2.63% | 5.23% | 10.29% | |||||||||
Consumer Staples | 0.86% | 10.43% | 8.58% | |||||||||
Other* | 0.05% | 0.04% | 0.00% | |||||||||
Industrials | 0.01% | 7.82% | 12.05% | |||||||||
Utilities | (0.02)% | 0.24% | 5.98% |
5 Bottom Performers – Sectors
Fund Weighting | Morgan Stanley Capital | |||||||||||
Fund Contribution | (% of Net Assets) | International EAFE® Index Weighting | ||||||||||
Financials | (2.46)% | 19.63% | 26.53% | |||||||||
Consumer Discretionary | (2.35)% | 23.94% | 10.75% | |||||||||
Information Technology | (1.82)% | 22.17% | 5.39% | |||||||||
Energy | (0.27)% | 9.17% | 7.79% | |||||||||
Health Care | (0.16)% | 0.29% | 6.49% |
* | Industry not classified by Global Industry Classification Standard. |
Janus International and Global Funds April 30, 2008 23
Table of Contents
Janus Overseas Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2008
Li & Fung, Ltd. Distribution/Wholesale | 6.2% | |||
Taiwan Semiconductor Manufacturing Company, Ltd. Semiconductor Components/Integrated Circuits | 4.3% | |||
Reliance Industries, Ltd. Oil Refining And Marketing | 3.7% | |||
Telefonaktiebolaget L.M. Ericsson – Class B Wireless Equipment | 3.5% | |||
AMSL Holding N.V. Semiconductor Equipment | 3.5% | |||
21.2% |
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif21p03.gif)
Emerging markets comprised 30.6% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif21t03.gif)
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif21c03.gif)
24 Janus International and Global Funds April 30, 2008
Table of Contents
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif21m03.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratio – for the fiscal year ended October 31, 2007 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Overseas Fund(1) | (4.20)% | 21.27% | 33.38% | 13.75% | 15.96% | 0.89% | |||||||
Morgan Stanley Capital International EAFE® Index | (9.21)% | (1.78)% | 20.42% | 6.66% | 7.19% | ||||||||
Morgan Stanley Capital International All Country World ex-U.S. IndexSM | (9.34)% | 3.61% | 22.75% | N/A | N/A** | ||||||||
Lipper Quartile | – | 1st | 1st | 1st | 1st | ||||||||
Lipper Ranking – based on total return for International Funds | – | 7/1122 | 1/682 | 7/331 | 1/110 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
A 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.) All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
Janus International and Global Funds April 30, 2008 25
Table of Contents
Janus Overseas Fund (unaudited)
The Fund’s performance may be affected by risks that include those associated with investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”) and derivatives. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and other details.
Foreign securities have additional risks including exchange rate changes, political and economic upheaval, the relative lack of information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. These risks are magnified in emerging markets. The prices of foreign securities held by the fund, and therefore a fund’s performance, may decline in response to such risks.
Janus Overseas Fund held approximately 12.7% of its assets in Brazilian securities as of April 30, 2008 and the Fund has experienced significant gains due, in part, to its investments in Brazil. While holdings are subject to change without notice, the Fund’s returns and NAV may be affected to a large degree by fluctuations in currency exchange rates or political or economic conditions in Brazil.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
May 5, 1994 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
Net dividends reinvested are the dividends that remain to be reinvested after foreign tax obligations have been met. Such obligations vary from country to country.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
(1) | Closed to new investors. |
* | The Fund’s inception date – May 2, 1994 | |
** | Since inception return is not shown for the index because the index’s inception date differs significantly from the Fund’s inception date. |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 958.00 | $ | 4.28 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.49 | $ | 4.42 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.88%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
26 Janus International and Global Funds April 30, 2008
Table of Contents
Janus Overseas Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amounts | Value | |||||||
Common Stock – 97.9% | ||||||||
Aerospace and Defense – 1.3% | ||||||||
3,259,205 | Embraer-Empresa Brasileira de Aeronautica S.A. (ADR) | $ | 135,843,664 | |||||
Agricultural Chemicals – 1.9% | ||||||||
1,075,671 | Potash Corporation of Saskatchewan, Inc. | 198,071,759 | ||||||
Agricultural Operations – 5.3% | ||||||||
3,440,000 | BrasilAgro – Companhia Brasileira de Propriedades Agricolas*,£ | 22,357,826 | ||||||
2,672,840 | Bunge, Ltd.# | 304,944,317 | ||||||
143,197,897 | Chaoda Modern Agriculture Holdings, Ltd.£ | 206,109,217 | ||||||
27,030,994 | China Green Holdings, Ltd.# | 35,710,052 | ||||||
569,121,412 | ||||||||
Airlines – 0.9% | ||||||||
6,220,000 | UAL Corp.*,# | 92,678,000 | ||||||
Apparel Manufacturers – 1.9% | ||||||||
16,660,000 | Esprit Holdings, Ltd. | 205,314,617 | ||||||
Audio and Video Products – 1.5% | ||||||||
3,402,000 | Sony Corp.# | 155,969,428 | ||||||
Batteries and Battery Systems – 0.5% | ||||||||
28,296,700 | BYD Company, Ltd. | 49,589,940 | ||||||
Beverages – Wine and Spirits – 1.0% | ||||||||
16,371,332 | C&C Group PLC**,£ | 111,541,198 | ||||||
Building – Residential and Commercial – 1.7% | ||||||||
2,748,390 | Gafisa S.A. | 60,353,103 | ||||||
4,070,200 | MRV Engenharia e Participacoes S.A. | 85,729,674 | ||||||
3,219,000 | Rossi Residencial S.A. | 31,827,749 | ||||||
177,910,526 | ||||||||
Casino Hotels – 1.7% | ||||||||
13,220,078 | Crown, Ltd. | 136,405,925 | ||||||
3,693,219 | Melco PBL Entertainment (Macau), Ltd. (ADR)*,# | 48,750,491 | ||||||
185,156,416 | ||||||||
Chemicals – Diversified – 0.9% | ||||||||
233,346 | K+S A.G.** | 96,708,712 | ||||||
Commercial Banks – 2.5% | ||||||||
7,833,962 | Anglo Irish Bank Corporation PLC** | 109,106,375 | ||||||
1,973,525 | Banca Generali S.P.A.**,# | 17,898,996 | ||||||
286,925 | Banco Compartamos S.A.* | 1,205,438 | ||||||
25,111,867 | Banco de Oro | 27,818,841 | ||||||
495,960 | Banco de Oro-EPCI, Inc. (GDR) (144A) | 10,987,160 | ||||||
765,810 | Julius Baer Holding, Ltd. | 56,649,596 | ||||||
2,834,764 | Punjab National Bank, Ltd. | 38,637,415 | ||||||
262,303,821 | ||||||||
Commercial Services – 0.6% | ||||||||
6,769,800 | Park24 Company, Ltd.# | 62,017,810 | ||||||
Computers – 0.2% | ||||||||
4,011,200 | Foxconn Technology Company, Ltd. | 25,653,198 | ||||||
Computers – Other – 0.2% | ||||||||
243,246,597 | A-Max Holdings, Ltd.*,£ | 24,232,235 | ||||||
Computers – Peripheral Equipment – 0.6% | ||||||||
2,017,099 | Logitech International S.A.*,# | 61,034,370 | ||||||
Cosmetics and Toiletries – 0.6% | ||||||||
322,503 | LG Household & Health Care, Ltd. | 66,726,439 | ||||||
Dental Supplies and Equipment – 0.2% | ||||||||
861,873 | Osstem Implant Company, Ltd.*,£ | 20,277,696 | ||||||
Diagnostic Kits – 0.2% | ||||||||
55,035,935 | Trinity, Ltd.*, º º,§,£ | 25,071,228 | ||||||
Distribution/Wholesale – 6.2% | ||||||||
161,718,110 | Li & Fung, Ltd. | 665,213,103 | ||||||
Diversified Financial Services – 0.2% | ||||||||
494,156 | Reliance Capital, Ltd. | 18,344,256 | ||||||
Diversified Operations – 2.2% | ||||||||
4,329,428 | Max India, Ltd.* | 16,897,120 | ||||||
63,469,090 | Melco International Development, Ltd.£ | 87,068,859 | ||||||
97,159,121 | Polytec Asset Holdings, Ltd. | 21,517,200 | ||||||
927,841 | Siemens A.G.** | 109,944,625 | ||||||
235,427,804 | ||||||||
Electric – Distribution – 0.3% | ||||||||
2,780,900 | Equatorial Energia S.A. | 29,119,372 | ||||||
Electric Products – Miscellaneous – 2.2% | ||||||||
14,008,000 | Sharp Corp. | 237,335,800 | ||||||
Electronic Components – Miscellaneous – 2.1% | ||||||||
38,646,000 | Hon Hai Precision Industry Company, Ltd. | 222,844,898 | ||||||
Electronic Components – Semiconductors – 2.0% | ||||||||
83,905,927 | ARM Holdings PLC£ | 166,716,217 | ||||||
136,385 | Oerlikon-Buehrle Holding A.G.*,# | 46,937,090 | ||||||
213,653,307 | ||||||||
Electronic Connectors – 1.2% | ||||||||
1,049,400 | Hirose Electric Company, Ltd.# | 124,971,653 | ||||||
Energy – Alternate Sources – 3.6% | ||||||||
1,621,695 | SunPower Corp. – Class A*,# | 141,525,323 | ||||||
5,340,431 | Suntech Power Holdings Company, Ltd. (ADR)*,# | 238,877,478 | ||||||
380,402,801 | ||||||||
Finance – Mortgage Loan Banker – 0.7% | ||||||||
1,034,729 | Housing Development Finance Corporation, Ltd. | 71,759,322 | ||||||
738,310 | Star Asia Financial, Ltd. (U.S. Shares) (144A) º º,§ | 4,799,015 | ||||||
76,558,337 | ||||||||
Finance – Other Services – 1.5% | ||||||||
22,754,712 | IG Group Holdings PLC£ | 162,724,126 | ||||||
Food – Miscellaneous/Diversified – 0.3% | ||||||||
20,206,000 | FU JI Food & Catering Services# | 33,054,609 | ||||||
Gambling – Non-Hotel – 0.1% | ||||||||
1,206,100 | Great Canadian Gaming Corp.* | 12,159,232 | ||||||
Hotels and Motels – 0.3% | ||||||||
4,121,050 | Kingdom Hotel Investments (GDR)* | 30,083,665 | ||||||
Insurance Brokers – 0.2% | ||||||||
1,354,044 | Eurodekania, Ltd. º º,§,£ | 21,140,752 | ||||||
Internet Connectivity Services – 0.5% | ||||||||
965,304 | NDS Group PLC (ADR)*,£ | 49,664,891 | ||||||
See Notes to Schedules of Investments and Financial Statements.
Janus International and Global Funds April 30, 2008 27
Table of Contents
Janus Overseas Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amounts | Value | |||||||
Investment Companies – 1.4% | ||||||||
3,534,400 | Bradespar S.A. – Preference Shares | $ | 105,604,477 | |||||
7,909,060 | SM Investments Corp. | 46,619,291 | ||||||
152,223,768 | ||||||||
Investment Management and Advisory Services – 0.4% | ||||||||
6,351,869 | Bluebay Asset Management | 40,671,447 | ||||||
Medical Labs and Testing Services – 0.2% | ||||||||
893,355 | Diagnosticos da America | 20,536,897 | ||||||
Oil Companies – Exploration and Production – 1.4% | ||||||||
1,620,217 | Niko Resources, Ltd. | 146,443,928 | ||||||
Oil Companies – Integrated – 3.8% | ||||||||
972,315 | Hess Corp. | 103,259,853 | ||||||
594,680 | Lukoil (ADR) | 53,699,604 | ||||||
2,028,850 | Petroleo Brasileiro S.A. (ADR) | 246,342,967 | ||||||
403,302,424 | ||||||||
Oil Field Machinery and Equipment – 1.1% | ||||||||
4,485,417 | Wellstream Holdings PLC* | 112,370,499 | ||||||
Oil Refining and Marketing – 3.7% | ||||||||
6,151,775 | Reliance Industries, Ltd. | 396,340,794 | ||||||
Public Thoroughfares – 2.0% | ||||||||
8,729,402 | Companhia de Concessoes Rodoviarias | 168,105,473 | ||||||
2,903,400 | Obrascon Huarte Lain Brasil S.A. | 40,186,676 | ||||||
208,292,149 | ||||||||
Real Estate Management/Services – 5.3% | ||||||||
1,212,700 | Daito Trust Construction Company, Ltd. | 56,280,842 | ||||||
2,397,318 | IVG Immobilien A.G.** | 60,244,445 | ||||||
473,065 | Jones Lang LaSalle, Inc.# | 36,714,575 | ||||||
12,514,000 | Mitsubishi Estate Company, Ltd. | 360,959,712 | ||||||
257,787 | Orco Property Group**,# | 22,020,626 | ||||||
2,651,200 | Sao Carlos Empreendimentos e Participacoes S.A. | 22,336,643 | ||||||
558,556,843 | ||||||||
Real Estate Operating/Development – 8.8% | ||||||||
3,235,065 | Ablon Group | 11,448,370 | ||||||
137,368,440 | Ayala Land, Inc. | 31,698,685 | ||||||
4,247,945 | Brascan Residential Properties S.A. | 23,390,923 | ||||||
9,180,000 | CapitaLand, Ltd. | 46,280,817 | ||||||
127,225,000 | China Overseas Land & Investment, Ltd. | 268,225,969 | ||||||
13,755,535 | Cyrela Brazil Realty S.A. | 229,548,646 | ||||||
2,973,300 | Cyrela Commercial Properties SA Empreendimentos e Participacoes | 19,038,281 | ||||||
56,089,000 | Hang Lung Properties, Ltd. | 228,501,140 | ||||||
966,880 | Iguatemi Empresa de Shopping Centers S.A.# | 12,510,032 | ||||||
2,992,955 | PDG Realty S.A. Empreendimentos e Participacoes | 43,857,769 | ||||||
1,584,880 | Rodobens Negocios Imobiliarios S.A. | 21,459,830 | ||||||
935,960,462 | ||||||||
Recreational Centers – 1.0% | ||||||||
6,710,253 | Orascom Hotels & Development* | 106,269,177 | ||||||
Retail – Consumer Electronics – 1.1% | ||||||||
1,323,000 | Yamada Denki Company, Ltd. | 114,161,486 | ||||||
Retail – Major Department Stores – 1.6% | ||||||||
9,265,498 | Arcandor A.G.*,** | 173,404,166 | ||||||
Semiconductor Components/Integrated Circuits – 4.5% | ||||||||
5,783,139 | Actions Semiconductor Company, Ltd. (ADR)*,#,£ | 22,322,917 | ||||||
208,990,579 | Taiwan Semiconductor Manufacturing Company, Ltd. | 455,456,618 | ||||||
1,883,360 | Vimicro International Corp. (ADR)*,#.£ | 6,384,590 | ||||||
484,164,125 | ||||||||
Semiconductor Equipment – 4.4% | ||||||||
12,945,735 | ASML Holding N.V.** | 366,713,507 | ||||||
2,228,331 | KLA-Tencor Corp. | 97,333,498 | ||||||
464,047,005 | ||||||||
Sugar – 3.0% | ||||||||
5,807,259 | Bajaj Hindusthan, Ltd. | 33,445,038 | ||||||
1,009,400 | Bajaj Hindusthan, Ltd. (GDR) (144A) | 5,812,190 | ||||||
13,335,458 | Balrampur Chini Mills, Ltd.*,£ | 33,891,680 | ||||||
10,961,459 | Cosan, Ltd. – Class A*,#,£ | 145,348,946 | ||||||
5,048,700 | Cosan S.A. Industria e Comercio | 90,844,394 | ||||||
4,561,730 | Shree Renuka Sugars, Ltd. | 14,211,674 | ||||||
323,553,922 | ||||||||
Telecommunication Services – 3.0% | ||||||||
8,320,712 | Amdocs, Ltd. (U.S. Shares)* | 261,103,943 | ||||||
4,098,002 | Reliance Communications, Ltd. | 58,664,549 | ||||||
319,768,492 | ||||||||
Telephone – Integrated – 0.3% | ||||||||
1,188,890 | GVT Holdings S.A.* | 28,976,377 | ||||||
Warehousing and Harbor Transport Services – 0.1% | ||||||||
12,114,876 | DP World, Ltd. | 12,720,620 | ||||||
Wireless Equipment – 3.5% | ||||||||
144,402,956 | Telefonaktiebolaget L.M. Ericsson – Class B | 368,028,845 | ||||||
Total Common Stock (cost $8,030,208,233) | 10,407,714,501 | |||||||
Money Markets – 2.2% | ||||||||
217,677,873 | Janus Institutional Cash Management Fund – Institutional Shares, 2.82% | 217,677,873 | ||||||
18,198,280 | Janus Institutional Money Market Fund – Institutional Shares, 2.74% | 18,198,280 | ||||||
Total Money Markets (cost $235,876,153) | 235,876,153 | |||||||
Other Securities – 6.6% | ||||||||
111,891,258 | Allianz Dresdner Daily Asset Fund† | 111,891,258 | ||||||
146,606,557 | Repurchase Agreements† | 146,606,557 | ||||||
448,026,753 | Time Deposits† | 448,026,753 | ||||||
Total Other Securities (cost $706,524,568) | 706,524,568 | |||||||
Total Investments (total cost $8,972,608,954) – 106.7% | 11,350,115,222 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (6.7)% | (712,631,716) | |||||||
Net Assets – 100% | $ | 10,637,483,506 | ||||||
See Notes to Schedules of Investments and Financial Statements.
28 Janus International and Global Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Australia | $ | 136,405,925 | 1.2% | |||||
Bermuda | 1,380,763,269 | 12.2% | ||||||
Brazil | 1,437,970,774 | 12.7% | ||||||
Canada | 356,674,919 | 3.1% | ||||||
Cayman Islands | 607,100,168 | 5.3% | ||||||
China | 49,589,940 | 0.4% | ||||||
Egypt | 106,269,177 | 0.9% | ||||||
Germany | 440,301,950 | 3.9% | ||||||
Guernsey | 277,351,328 | 2.4% | ||||||
Hong Kong | 608,867,195 | 5.4% | ||||||
India | 688,004,037 | 6.1% | ||||||
Ireland | 220,647,573 | 1.9% | ||||||
Italy | 17,898,996 | 0.2% | ||||||
Japan | 1,111,696,730 | 9.8% | ||||||
South Korea | 87,004,134 | 0.8% | ||||||
Luxembourg | 22,020,626 | 0.2% | ||||||
Mexico | 1,205,439 | 0.0% | ||||||
Netherlands | 366,713,507 | 3.2% | ||||||
Philippines | 117,123,977 | 1.0% | ||||||
Russia | 53,699,604 | 0.5% | ||||||
Singapore | 46,280,817 | 0.4% | ||||||
Sweden | 368,028,845 | 3.2% | ||||||
Switzerland | 164,621,056 | 1.5% | ||||||
Taiwan | 703,954,714 | 6.2% | ||||||
United Arab Emirates | 12,720,620 | 0.1% | ||||||
United Kingdom | 553,287,932 | 4.9% | ||||||
United States†† | 1,413,911,970 | 12.5% | ||||||
Total | $ | 11,350,115,222 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (4.2% excluding Short-Term Securities and Other Securities) |
Forward Currency Contracts, Open
Currency Sold and | Currency | Currency | Unrealized | |||||||||
Settlement Date | Units Sold | Value in U.S.$ | Gain/(Loss) | |||||||||
Euro 10/16/08 | 641,500,000 | $ | 993,463,316 | $ | 14,450,416 | |||||||
See Notes to Schedules of Investments and Financial Statements.
Janus International and Global Funds April 30, 2008 29
Table of Contents
Janus Worldwide Fund (unaudited) | Ticker: JAWWX |
Fund Snapshot
This global fund offers geographic diversification in a single portfolio.
![(JASON YEE PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646pyeejaso.jpg)
Jason Yee
portfolio manager
Performance Overview
Janus Worldwide Fund returned (13.57)% over the six-month period ended April 30, 2008, underperforming its benchmark, the Morgan Stanley Capital International (MSCI) World IndexSM, which returned (9.37)% during the period.
Economic Overview
Turmoil in the credit markets, uncertainty surrounding the near-term outlook for the U.S. and global economies and a weaker corporate profit picture made for a volatile and difficult market environment over the past several months. While sentiment toward the end of the period improved and world equity markets finished well above the mid-March lows, stocks were broadly lower during the six-month period ended April 30, 2008.
Additional subprime-related write-offs, slowing U.S. consumer spending and a softening U.S. labor market, accompanied by record commodity prices and rising inflation expectations, weighed on investor sentiment during the period. Stocks reached their lows in mid-March amid fears that credit conditions could suffer another setback given a deteriorating liquidity position at investment bank Bear Stearns. Prior to that, periodic liquidity injections by the Federal Reserve (Fed) failed to alleviate the stress in the credit markets. World markets stabilized somewhat after the Fed aggressively lowered the Federal Funds rate, expanded the collateral it would accept and played an instrumental role in JP Morgan Chase’s purchase of Bear Stearns.
Overall, emerging market stocks in Latin America were among the biggest winners during the period amid continued strength in commodity prices. Developing markets in Asia were weak, with China suffering a sharp decline on worries over slowing export growth. In local currency terms, developed non-U.S. markets underperformed both emerging markets and U.S. stocks. The U.S. dollar weakened versus most major currencies for much of the period as concern over economic growth and a more accommodative Fed helped to fuel the negative sentiment toward it. Losses were broad across all sectors. Energy and materials were the only sectors to turn in a gain for the six-month period as the price of oil and other commodities soared. Meanwhile, financials and consumer discretionary stocks were the worst performing groups, suffering from turmoil in the credit markets, larger-than-expected subprime-related write-downs and a weakening economic outlook.
Following the March lows, the equity markets’ rally at the end of the period can be attributed in part to improving sentiment as investors began to look ahead to a possible economic recovery in the U.S. Nevertheless, concerns about elevated inflationary pressures, soft U.S. consumer spending, the weak U.S. housing market and the lingering possibility of more write-downs, continued to weigh on the market.
Stocks That Hindered Performance
The largest detractor from performance during the period was Dell. Worries over Dell’s exposure to the U.S. economy, and more importantly questions about their ability to succeed in their turnaround efforts weighed on the shares. I continue to believe Dell is a highly attractive investment, given its numerous competitive strengths, proven track record of high economic profitability and very well-capitalized balance sheet. Additionally I consider management, who are sizable owners themselves, to be highly capable. I think the company has a number of opportunistic initiatives in place which can improve business results over the coming years.
British Sky Broadcasting Group was another detractor during the period following a weaker-than-expected earnings report. The U.K.-based pay-television broadcaster’s new broadband and telephone business showed higher costs and lower subscriber growth than most were expecting. I believe that the company’s core satellite broadcasting business represents a highly cash generative, non-cyclical business with potential for good revenue growth and expanding margins.
Stocks That Aided Performance
The top contributor to performance during the period was Potash Corporation of Saskatchewan. The company produces potash, nitrogen and phosphate, all three important components of fertilizers. Potash Corporation rose nearly 50% amid tight potash supply conditions and strong demand for these key ingredients used in fertilizer. I trimmed this position as the valuation rose.
Syngenta A.G., the Swiss agrichemical company, reported results that showed double-digit revenue growth and margin expansion. This stock has benefited from robust markets for agricultural commodities and related products. Although the market fundamentals remain strong in the
30 Janus International and Global Funds April 30, 2008
Table of Contents
(unaudited)
agricultural related industries, I am carefully reviewing the valuations after such strong performance.
Outlook
Looking ahead, I will be paying close attention to the U.S. employment picture, the availability of credit, U.S. consumer confidence and commodity prices, among other things. Should the U.S. labor market continue to soften amid continued weakness in the U.S. housing market, further slowing in U.S. consumer spending is likely. While the government stimulus checks could provide a temporary boost, the current de-leveraging of the U.S. economy could take time to complete, possibly lessening the potential for a sharp rebound in economic activity. Inflation remains a concern for the markets as well, given record commodity prices and its recent elevated level in many regions. Although inflation is generally a lagging indicator and should ease with slowing economic growth, it deserves attention given its negative impact on equity valuations and influence on central bank policy decisions.
While economic activity in the U.S. and other developed parts of the world appears to be slowing, the global economy continues to expand. I will continue to monitor the potential for further slowing in the U.S. and other large economies and the impact this could have on the rest of the global economy. Nevertheless, I remain committed to my fundamental investment approach in my effort to find opportunities that I believe represent an attractive risk/reward profile. As always, I will continue to emphasize bottom-up company analysis as my primary tool in my quest to add value for shareholders.
Thank you for your investment in Janus Worldwide Fund.
Janus Worldwide Fund At A Glance
5 Top Performers – Holdings
Contribution | ||||
Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 0.50% | |||
Syngenta A.G. | 0.31% | |||
Ryland Group, Inc. | 0.30% | |||
Millea Holdings, Inc. | 0.25% | |||
Tyco International, Ltd. | 0.15% |
5 Bottom Performers – Holdings
Contribution | ||||
Dell, Inc. | (2.55)% | |||
British Sky Broadcasting Group PLC | (1.36)% | |||
Sprint Nextel Corp. | (0.75)% | |||
Esprit Holdings, Ltd. | (0.69)% | |||
Willis Group Holdings, Ltd. | (0.66)% |
5 Top Performers – Sectors
Fund Weighting | Morgan Stanley Capital International | |||||||||||
Fund Contribution | (% of Net Assets) | World IndexSM Weighting | ||||||||||
Materials | 0.86% | 5.06% | 7.45% | |||||||||
Energy | 0.00% | 0.00% | 10.89% | |||||||||
Utilities | 0.00% | 0.00% | 4.70% | |||||||||
Consumer Staples | (0.15)% | 1.66% | 8.96% | |||||||||
Industrials | (0.27)% | 6.17% | 11.48% |
5 Bottom Performers – Sectors
Fund Weighting | Morgan Stanley Capital International | |||||||||||
Fund Contribution | (% of Net Assets) | World IndexSM Weighting | ||||||||||
Information Technology | (5.32)% | 26.05% | 10.71% | |||||||||
Consumer Discretionary | (4.68)% | 29.19% | 9.74% | |||||||||
Financials | (1.62)% | 21.25% | 22.41% | |||||||||
Telecommunication Services | (1.02)% | 2.40% | 4.78% | |||||||||
Health Care | (1.00)% | 8.21% | 8.88% |
Janus International and Global Funds April 30, 2008 31
Table of Contents
Janus Worldwide Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2008
British Sky Broadcasting Group PLC Television | 5.6% | |||
Yahoo!, Inc. Web Portals/Internet Service Providers | 5.5% | |||
Dell, Inc. Computers | 4.8% | |||
eBay, Inc. E-Commerce/Services | 4.7% | |||
JP Morgan Chase & Co. Finance – Investment Bankers/Brokers | 3.4% | |||
24.0% |
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif21p04.gif)
Emerging markets comprised 2.6% of total net assets.
Top Country Allocations– Long Positions (% of Investment Securities)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif21t04.gif)
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32 Janus International and Global Funds April 30, 2008
Table of Contents
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif21m04.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratio – for the fiscal year ended October 31, 2007 | ||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | ||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | ||||||||
Janus Worldwide Fund | (13.57)% | (5.20)% | 11.28% | 3.33% | 10.59% | 0.88% | |||||||
Morgan Stanley Capital International World IndexSM | (9.37)% | (2.47)% | 15.18% | 5.02% | 8.36% | ||||||||
Lipper Quartile | – | 3rd | 4th | 4th | 2nd | ||||||||
Lipper Ranking – based on total return for Global Funds | – | 321/443 | 255/267 | 100/122 | 6/16 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
For the period from July 1, 2006 through January 31, 2007 (“Waiver Period”), Janus Capital contractually agreed to waive its right to receive a portion of the Fund’s base management fee, at the annual rate of up to 0.15% of average daily net assets, under certain conditions. This waiver was applied for any calendar month in the Waiver Period if the total return performance of the Fund for the period from February 1, 2006 through the end of the preceding calendar month, calculated as though there had been no waiver of the base management fee, was less than the performance of the Fund’s primary benchmark index for that period.
A 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
The Fund has a performance-based management fee that adjusts up or down based on the Fund’s performance relative to an approved benchmark index over a performance measurement period.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.) All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
Janus International and Global Funds April 30, 2008 33
Table of Contents
Janus Worldwide Fund (unaudited)
The Fund’s performance may be affected by risks that include those associated with investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the fund may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”), and derivatives. Please see a Janus prospectus or www.janus.com for more information about risks, fund holdings and other details.
Foreign securities have additional risks including exchange rate changes, political and economic upheaval, the relative lack of information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. These risks are magnified in emerging markets. The prices of foreign securities held by the fund, and therefore a fund’s performance, may decline in response to such risks.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
May 16, 1991 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception. There is no assurance that the investment process will consistently lead to successful investing.
There is no assurance that the investment process will consistently lead to successful investing.
Net dividends reinvested are the dividends that remain to be reinvested after foreign tax obligations have been met. Such obligations vary from country to country.
The Fund’s portfolio may differ significantly from the securities held in the index. The index is unmanaged and is not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
See Notes to Schedules of Investments for index definitions.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – May 15, 1991 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/01/07) | (4/30/08) | (11/01/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 864.30 | $ | 4.08 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.49 | $ | 4.42 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.88%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital. |
34 Janus International and Global Funds April 30, 2008
Table of Contents
Janus Worldwide Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Common Stock – 99.7% | ||||||||
Agricultural Chemicals – 3.0% | ||||||||
234,470 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | $ | 43,130,757 | |||||
230,049 | Syngenta A.G. | 68,148,366 | ||||||
111,279,123 | ||||||||
Apparel Manufacturers – 2.5% | ||||||||
7,513,000 | Esprit Holdings, Ltd. | 92,588,759 | ||||||
Applications Software – 1.2% | ||||||||
13,945,051 | Misys PLC | 43,202,294 | ||||||
Audio and Video Products – 1.2% | ||||||||
952,100 | Sony Corp. | 43,650,351 | ||||||
Automotive – Cars and Light Trucks – 0% | ||||||||
49 | Nissan Motor Company, Ltd. | 439 | ||||||
Broadcast Services and Programming – 1.3% | ||||||||
1,322,720 | Liberty Global, Inc. – Class A*,# | 46,811,061 | ||||||
Building – Residential and Commercial – 7.5% | ||||||||
2,744,045 | Centex Corp.# | 57,131,017 | ||||||
2,811,365 | Lennar Corp. – Class A# | 51,785,343 | ||||||
4,646,165 | Pulte Homes, Inc.# | 60,585,991 | ||||||
3,386,820 | Ryland Group, Inc.#,£ | 108,310,503 | ||||||
277,812,854 | ||||||||
Building and Construction Products – Miscellaneous – 1.1% | ||||||||
1,173,025 | USG Corp.*,# | 41,419,513 | ||||||
Building Products – Cement and Aggregate – 0.5% | ||||||||
710,985 | Cemex S.A. de C.V. (ADR)*,# | 19,658,735 | ||||||
Casino Hotels – 1.3% | ||||||||
4,418,737 | Crown, Ltd. | 45,592,916 | ||||||
5,095,000 | Galaxy Entertainment Group, Ltd.*,# | 3,874,539 | ||||||
49,467,455 | ||||||||
Cellular Telecommunications – 1.1% | ||||||||
13,366,353 | Vodafone Group PLC | 42,272,689 | ||||||
Chemicals – Diversified – 1.6% | ||||||||
952,000 | Shin-Etsu Chemical Company, Ltd. | 59,402,123 | ||||||
Computers – 4.8% | ||||||||
9,504,775 | Dell, Inc.* | 177,073,958 | ||||||
Distribution/Wholesale – 1.2% | ||||||||
10,702,400 | Li & Fung, Ltd. | 44,023,373 | ||||||
Diversified Operations – 1.0% | ||||||||
816,747 | Tyco International, Ltd. | 38,215,592 | ||||||
E-Commerce/Products – 1.1% | ||||||||
533,310 | Amazon.com, Inc.*,# | 41,934,165 | ||||||
E-Commerce/Services – 6.7% | ||||||||
5,579,290 | eBay, Inc.* | 174,575,984 | ||||||
1,456,411 | Expedia, Inc.*,# | 36,788,942 | ||||||
1,713,490 | IAC/InterActiveCorp* | 35,657,727 | ||||||
247,022,653 | ||||||||
Electronic Components – Miscellaneous – 3.7% | ||||||||
2,561,298 | Koninklijke (Royal) Philips Electronics N.V. | 96,163,534 | ||||||
1,077,462 | Tyco Electronics, Ltd. | 40,307,853 | ||||||
136,471,387 | ||||||||
Electronic Components – Semiconductors – 2.6% | ||||||||
11,169,749 | ARM Holdings PLC | 22,193,644 | ||||||
52,620 | Samsung Electronics Company, Ltd. | 37,471,306 | ||||||
1,225,560 | Texas Instruments, Inc. | 35,737,330 | ||||||
95,402,280 | ||||||||
Energy – Alternate Sources – 0.3% | ||||||||
288,325 | Suntech Power Holdings Company Ltd. (ADR)*,# | 12,896,777 | ||||||
Finance – Consumer Loans – 0.9% | ||||||||
1,790,900 | SLM Corp.*,# | 33,185,377 | ||||||
Finance – Investment Bankers/Brokers – 4.8% | ||||||||
2,651,223 | JP Morgan Chase & Co. | 126,330,776 | ||||||
1,486,336 | UBS A.G.* | 49,983,726 | ||||||
176,314,502 | ||||||||
Finance – Mortgage Loan Banker – 2.1% | ||||||||
702,360 | Fannie Mae | 19,876,788 | ||||||
756,555 | Freddie Mac | 18,845,785 | ||||||
544,215 | Housing Development Finance Corporation, Ltd. | 37,741,766 | ||||||
76,464,339 | ||||||||
Finance – Other Services – 0.5% | ||||||||
36,690 | CME Group, Inc. | 16,783,841 | ||||||
Insurance Brokers – 3.2% | ||||||||
3,388,570 | Willis Group Holdings, Ltd.# | 117,752,808 | ||||||
Investment Companies – 0.1% | ||||||||
356,191 | RHJ International* | 4,640,449 | ||||||
Medical – Biomedical and Genetic – 0.9% | ||||||||
827,240 | Amgen, Inc.* | 34,636,539 | ||||||
Medical – Drugs – 1.5% | ||||||||
585,585 | Merck & Company, Inc. | 22,275,653 | ||||||
203,479 | Roche Holding A.G. | 33,891,378 | ||||||
56,167,031 | ||||||||
Medical – HMO – 1.8% | ||||||||
429,020 | Aetna, Inc. | 18,705,272 | ||||||
340,970 | Coventry Health Care, Inc.* | 15,251,588 | ||||||
1,044,785 | UnitedHealth Group, Inc. | 34,091,335 | ||||||
68,048,195 | ||||||||
Medical Products – 1.1% | ||||||||
843,372 | Covidien, Ltd. | 39,377,039 | ||||||
Multi-line Insurance – 0.5% | ||||||||
417,985 | American International Group, Inc. | 19,310,907 | ||||||
Networking Products – 1.6% | ||||||||
2,371,435 | Cisco Systems, Inc.* | 60,803,593 | ||||||
Pharmacy Services – 1.0% | ||||||||
732,545 | Medco Health Solutions, Inc.* | 36,290,279 | ||||||
Property and Casualty Insurance – 5.1% | ||||||||
1,935,700 | First American Corp. | 63,490,960 | ||||||
2,937,100 | Millea Holdings, Inc. | 123,957,621 | ||||||
187,448,581 | ||||||||
Real Estate Management/Services – 2.2% | ||||||||
523,400 | Daito Trust Construction Company, Ltd. | 24,290,750 | ||||||
2,012,000 | Mitsubishi Estate Company, Ltd.# | 58,035,076 | ||||||
82,325,826 | ||||||||
See Notes to Schedules of Investments and Financial Statements.
Janus International and Global Funds April 30, 2008 35
Table of Contents
Janus Worldwide Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Real Estate Operating/Development – 1.3% | ||||||||
9,682,000 | CapitaLand, Ltd. | $ | 48,811,642 | |||||
Reinsurance – 2.7% | ||||||||
22,740 | Berkshire Hathaway, Inc. – Class B* | 101,352,180 | ||||||
Retail – Apparel and Shoe – 1.3% | ||||||||
901,210 | Industria de Diseno Textil S.A.# | 49,249,050 | ||||||
Retail – Consumer Electronics – 1.6% | ||||||||
694,310 | Yamada Denki Company, Ltd. | 59,911,913 | ||||||
Retail – Drug Store – 1.0% | ||||||||
923,275 | CVS/Caremark Corp. | 37,272,612 | ||||||
Retail – Major Department Stores – 1.0% | ||||||||
377,865 | Sears Holdings Corp.*,# | 37,261,267 | ||||||
Schools – 0.5% | ||||||||
376,050 | Apollo Group, Inc. – Class A* | 19,140,945 | ||||||
Semiconductor Components/Integrated Circuits – 1.4% | ||||||||
4,055,025 | Marvell Technology Group, Ltd.* | 52,512,574 | ||||||
Semiconductor Equipment – 0.6% | ||||||||
767,967 | ASML Holding N.V. | 21,754,182 | ||||||
Telecommunication Equipment – Fiber Optics – 0.7% | ||||||||
993,410 | Corning, Inc. | 26,533,981 | ||||||
Telephone – Integrated – 0.8% | ||||||||
3,687,610 | Sprint Nextel Corp. | 29,464,004 | ||||||
Television – 5.6% | ||||||||
19,153,651 | British Sky Broadcasting Group PLC | 206,584,687 | ||||||
Transportation – Services – 1.2% | ||||||||
626,430 | United Parcel Service, Inc. – Class B | 45,359,796 | ||||||
Water Treatment Services – 0.5% | ||||||||
838,220 | Nalco Holding Co. | 19,270,678 | ||||||
Web Portals/Internet Service Providers – 5.5% | ||||||||
7,435,055 | Yahoo!, Inc.* | 203,794,858 | ||||||
Wireless Equipment – 3.0% | ||||||||
2,186,170 | Nokia Oyj | 65,801,078 | ||||||
17,426,560 | Telefonaktiebolaget L.M. Ericsson – Class B | 44,413,750 | ||||||
110,214,828 | ||||||||
Total Common Stock (cost $3,439,243,142) | 3,698,644,084 | |||||||
Rights – 0% | ||||||||
Finance – Investment Bankers/Brokers – 0% | ||||||||
1,486,336 | UBS A.G* – expires 5/9/08 (cost $0) | 2,510,945 | ||||||
Money Markets – 0.3% | ||||||||
10,712,839 | Janus Institutional Cash Management Fund – Institutional Shares, 2.82% | 10,712,839 | ||||||
1,053,340 | Janus Institutional Money Market Fund – Institutional Shares, 2.74% | 1,053,340 | ||||||
Total Money Markets (cost $11,766,179) | 11,766,179 | |||||||
Other Securities – 10.1% | ||||||||
107,150,466 | Allianz Dresdner Daily Asset Fund† | 107,150,466 | ||||||
66,423,177 | Repurchase Agreements† | 66,423,177 | ||||||
Time Deposits: | ||||||||
16,022,624 | Abbey National Treasury, N.A., 2.375%, 5/1/08† | 16,022,624 | ||||||
7,148,612 | ABN-AMRO Bank N.V., N.A., 2.26%, 5/1/08† | 7,148,612 | ||||||
8,337,864 | BNP Paribas, New York, N.A., 2.50%, 5/1/08† | 8,337,864 | ||||||
16,675,727 | Calyon, N.A., 2.50%, 5/1/08† | 16,675,727 | ||||||
5,803,752 | Chase Bank USA, N.A., 2.25%, 5/1/08† | 5,803,752 | ||||||
18,343,300 | Danske Bank, Cayman Islands, N.A., 2.53%, 5/1/08† | 18,343,300 | ||||||
11,673,009 | Deutsche Bank A.G., N.A., 2.30%, 5/1/08† | 11,673,009 | ||||||
16,675,727 | Dexia Bank S.A. Brussels, N.A., 2.50%, 5/1/08† | 16,675,727 | ||||||
16,675,727 | ING Bank N.V., Amsterdam, N.A., 2.4375%, 5/1/08† | 16,675,727 | ||||||
16,675,727 | Lloyd’s TSB Group PLC, N.A., 2.45%, 5/1/08† | 16,675,727 | ||||||
2,467,199 | Natixis, N.A., 2.38%, 5/1/08† | 2,467,199 | ||||||
16,675,727 | Natixis, N.A., 2.43%, 5/1/08† | 16,675,727 | ||||||
16,675,727 | Nordea Bank Finland PLC, N.A., 2.50%, 5/1/08† | 16,675,727 | ||||||
16,461,474 | Svenska Handelsbanken, N.A., 2.40%, 5/1/08† | 16,461,474 | ||||||
16,675,727 | Wells Fargo Bank, N.A., 2.375%, 5/1/08† | 16,675,727 | ||||||
Total Other Securities (cost $376,561,566) | 376,561,566 | |||||||
Total Investments (total cost $3,827,570,887) – 110.1% | 4,089,482,774 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (10.1)% | (377,026,009) | |||||||
Net Assets – 100% | $ | 3,712,456,765 | ||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Australia | $ | 45,592,916 | 1.1% | |||||
Belgium | 4,640,449 | 0.1% | ||||||
Bermuda | 424,777,997 | 10.4% | ||||||
Canada | 43,130,757 | 1.1% | ||||||
Cayman Islands | 12,896,776 | 0.3% | ||||||
Finland | 65,801,079 | 1.6% | ||||||
Hong Kong | 3,874,539 | 0.1% | ||||||
India | 37,741,766 | 0.9% | ||||||
Japan | 369,248,273 | 9.0% | ||||||
Korea | 37,471,306 | 0.9% | ||||||
Mexico | 19,658,735 | 0.5% | ||||||
Netherlands | 117,917,715 | 2.9% | ||||||
Singapore | 48,811,642 | 1.2% | ||||||
Spain | 49,249,050 | 1.2% | ||||||
Sweden | 44,413,750 | 1.1% | ||||||
Switzerland | 154,534,415 | 3.8% | ||||||
United Kingdom | 314,253,314 | 7.7% | ||||||
United States†† | 2,295,468,295 | 56.1% | ||||||
Total | $ | 4,089,482,774 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (46.6% excluding Short-Term Securities and Other Securities) |
See Notes to Schedules of Investments and Financial Statements.
36 Janus International and Global Funds April 30, 2008
Table of Contents
Statements of Assets and Liabilities
As of April 30, 2008 (unaudited) | Janus Global | Janus Global | Janus Overseas | Janus Worldwide | ||||||||||||||
(all numbers in thousands except net asset value per share) | Opportunities Fund | Research Fund | Fund | Fund | ||||||||||||||
Assets: | ||||||||||||||||||
Investments at cost(1) | $ | 133,273 | $ | 273,479 | $ | 8,972,609 | $ | 3,827,571 | ||||||||||
Unaffiliated investments at value(1) | $ | 150,522 | $ | 287,626 | $ | 11,114,239 | $ | 4,077,717 | ||||||||||
Affiliated money market investments value | 918 | 11,311 | 235,876 | 11,766 | ||||||||||||||
Cash | 51 | 32 | 1,588 | 157 | ||||||||||||||
Cash denominated in foreign currency(2) | 14 | 546 | 6,529 | 1,023 | ||||||||||||||
Restricted cash (Note 1) | – | 160 | – | – | ||||||||||||||
Receivables: | ||||||||||||||||||
Swap contracts | – | 2 | – | – | ||||||||||||||
Investments sold | – | 709 | – | – | ||||||||||||||
Fund shares sold | 58 | 451 | 4,445 | 315 | ||||||||||||||
Dividends | 240 | 434 | 29,548 | 4,497 | ||||||||||||||
Interest | 3 | 22 | 1,667 | 666 | ||||||||||||||
Non-interested Trustees’ deferred compensation | 2 | 5 | 186 | 65 | ||||||||||||||
Other assets | – | 4 | 160 | 283 | ||||||||||||||
Forward currency contracts | – | – | 14,450 | – | ||||||||||||||
Total Assets | 151,808 | 301,302 | 11,408,688 | 4,096,489 | ||||||||||||||
Liabilities: | ||||||||||||||||||
Payables: | ||||||||||||||||||
Collateral for securities loaned (Note 1) | 11,542 | 22,912 | 706,525 | 376,562 | ||||||||||||||
Swap contracts | – | 25 | – | – | ||||||||||||||
Investments purchased | – | 2,496 | 47,627 | – | ||||||||||||||
Fund shares repurchased | 44 | 110 | 5,358 | 4,457 | ||||||||||||||
Dividends and distributions | – | 3 | 11 | 1 | ||||||||||||||
Advisory fees | 73 | 156 | 5,311 | 1,826 | ||||||||||||||
Transfer agent fees and expenses | 80 | 59 | 1,991 | 816 | ||||||||||||||
Non-interested Trustees’ fees and expenses | 2 | 3 | 82 | 36 | ||||||||||||||
Non-interested Trustees’ deferred compensation fees | 2 | 5 | 186 | 65 | ||||||||||||||
Foreign tax liability | – | 20 | 4,012 | – | ||||||||||||||
Accrued expenses | 49 | 20 | 101 | 269 | ||||||||||||||
Total Liabilities | 11,792 | 25,809 | 771,204 | 384,032 | ||||||||||||||
Net Assets | $ | 140,016 | $ | 275,493 | $ | 10,637,484 | $ | 3,712,457 | ||||||||||
Net Assets Consist of: | ||||||||||||||||||
Capital (par value and paid-in-surplus)* | $ | 113,886 | $ | 239,954 | $ | 7,682,383 | $ | 7,996,239 | ||||||||||
Undistributed net investment income/(loss)* | (1,480) | 616 | (107,677) | 12,845 | ||||||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | 9,450 | 9,280 | 674,906 | (4,558,467) | ||||||||||||||
Unrealized appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation(3) | 18,160 | 25,643(3) | 2,387,872(3) | 261,840 | ||||||||||||||
Total Net Assets | $ | 140,016 | $ | 275,493 | $ | 10,637,484 | $ | 3,712,457 | ||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 10,048 | 18,051 | 193,341 | 71,924 | ||||||||||||||
Net Asset Value Per Share | $ | 13.93 | $ | 15.26 | $ | 55.02 | $ | 51.62 |
* | See Note 4 in the Notes to the Financial Statements. |
(1) | Investments at cost and value include $11,097,023, $21,814,505, $685,178,540 and $361,937,048 of securities loaned for Janus Global Opportunities Fund, Janus Global Research Fund, Janus Overseas Fund and Janus Worldwide Fund, respectively (Note 1). | |
(2) | Includes cost of $14,067, $540,714, $6,555,961 and $1,024,695 for Janus Global Opportunities Fund, Janus Global Research Fund, Janus Overseas Fund and Janus Worldwide Fund, respectively. | |
(3) | Net of foreign taxes on investments of $19,648 and $4,011,980 for Janus Global Research Fund and Janus Overseas Fund, respectively. |
See Notes to Financial Statements.
Janus International and Global Funds April 30, 2008 37
Table of Contents
Statements of Operations
For the six-month period ended April 30, 2008 (unaudited) | Janus Global | Janus Global | Janus Overseas | Janus Worldwide | ||||||||||||||
(all numbers in thousands) | Opportunities Fund | Research Fund | Fund | Fund | ||||||||||||||
Investment Income: | ||||||||||||||||||
Interest | $ | 6 | $ | 2 | $ | 118 | $ | 7 | ||||||||||
Securities lending income | 28 | 73 | 2,574 | 2,191 | ||||||||||||||
Dividends | 1,445 | 2,032 | 65,338 | 29,327 | ||||||||||||||
Dividends from affiliates | 62 | 86 | 9,103 | 1,925 | ||||||||||||||
Foreign tax withheld | (51) | (123) | (4,822) | (1,385) | ||||||||||||||
Total Investment Income | 1,490 | 2,070 | 72,311 | 32,065 | ||||||||||||||
Expenses: | ||||||||||||||||||
Advisory fees | 489 | 936 | 32,556 | 12,155 | ||||||||||||||
Transfer agent fees and expenses | 223 | 300 | 10,497 | 4,374 | ||||||||||||||
Registration fees | 11 | 24 | 215 | 22 | ||||||||||||||
Custodian fees | 11 | 44 | 1,013 | 125 | ||||||||||||||
Professional fees | 16 | 15 | 25 | 29 | ||||||||||||||
Non-interested Trustees’ fees and expenses | 1 | 2 | 93 | 26 | ||||||||||||||
Printing expenses | 12 | 11 | 165 | 119 | ||||||||||||||
Interest expense | 124 | – | – | – | ||||||||||||||
Other expenses | 38 | 33 | 355 | 248 | ||||||||||||||
Non-recurring costs (Note 2) | – | N/A | N/A | 1 | ||||||||||||||
Cost assumed by Janus Capital Management LLC (Note 2) | – | N/A | N/A | (1) | ||||||||||||||
Total Expenses | 925 | 1,365 | 44,919 | 17,098 | ||||||||||||||
Expense and Fee Offset | (6) | (10) | (218) | (118) | ||||||||||||||
Net Expenses | 919 | 1,355 | 44,701 | 16,980 | ||||||||||||||
Net Investment Income/(Loss) | 571 | 715 | 27,610 | 15,085 | ||||||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | ||||||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 9,457 | 10,329 | 655,214 | 216,852 | ||||||||||||||
Net realized gain/(loss) from swap contracts | – | (102) | – | – | ||||||||||||||
Net realized gain/(loss) from options contracts | – | – | 30,175 | – | ||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non – interested Trustees’ deferred compensation | (37,608) | (30,842)(1) | (1,255,706)(1) | (858,793) | ||||||||||||||
Payment from affiliate (Note 2) | 2 | 6 | 54 | 5 | ||||||||||||||
Net Gain/(Loss) on Investments | (28,149) | (20,609) | (570,263) | (641,936) | ||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (27,578) | $ | (19,894) | $ | (542,653) | $ | (626,851) |
(1) | Net of foreign taxes on investments of $19,648 and $4,011,980 for Janus Global Research Fund and Janus Overseas Fund, respectively. |
See Notes to Financial Statements.
38 Janus International and Global Funds April 30, 2008
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Janus International and Global Funds April 30, 2008 39
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Statements of Changes in Net Assets
For the six-month period ended April 30, 2008 (unaudited) | Janus Global | |||||||||
and for the fiscal year ended October 31, 2007 | Opportunities Fund | |||||||||
(all numbers in thousands) | 2008 | 2007 | ||||||||
Operations: | ||||||||||
Net investment income/(loss) | $ | 571 | $ | 705 | ||||||
Net realized gain/(loss) from investment and foreign currency transactions | 9,457 | 5,042 | ||||||||
Net realized gain/(loss) from swap contracts | – | – | ||||||||
Net realized gain/(loss) from options contracts | – | – | ||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | (37,608) | 36,966 | ||||||||
Payment from affiliate (Note 2) | 2 | – | ||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (27,578) | 42,713 | ||||||||
Dividends and Distributions to Shareholders: | ||||||||||
Net investment income* | (2,799) | (866) | ||||||||
Net realized gain/(loss) from investment transactions* | (4,999) | (20,656) | ||||||||
Net (Decrease) from Dividends and Distributions | (7,798) | (21,522) | ||||||||
Capital Share Transactions: | ||||||||||
Shares sold | 13,594 | 44,832 | ||||||||
Redemption fees | 108 | 33 | ||||||||
Reinvested dividends and distributions | 7,659 | 21,181 | ||||||||
Shares repurchased | (34,585) | (44,288) | ||||||||
Net Increase/(Decrease) from Capital Share Transactions | (13,224) | 21,758 | ||||||||
Net Increase/(Decrease) in Net Assets | (48,600) | 42,949 | ||||||||
Net Assets: | ||||||||||
Beginning of period | 188,616 | 145,667 | ||||||||
End of period | $ | 140,016 | $ | 188,616 | ||||||
Undistributed Net Investment Income/(Loss)* | $ | (1,480) | $ | 748 |
* | See Note 4 in Notes to Financial Statements |
See Notes to Financial Statements.
40 Janus International and Global Funds April 30, 2008
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Janus Global | Janus Overseas | Janus Worldwide | ||||||||||||||||||||||
Research Fund | Fund | Fund | ||||||||||||||||||||||
2008 | 2007 | 2008 | 2007 | 2008 | 2007 | |||||||||||||||||||
$ | 715 | $ | 622 | $ | 27,610 | $ | 61,247 | $ | 15,085 | $ | 23,903 | |||||||||||||
10,329 | 11,516 | 655,214 | 1,142,936 | 216,852 | 646,757 | |||||||||||||||||||
(102) | – | – | – | – | – | |||||||||||||||||||
– | – | 30,175 | (12,187) | – | – | |||||||||||||||||||
(30,842) | 47,594 | (1,255,706) | 2,154,840 | (858,793) | 388,744 | |||||||||||||||||||
6 | – | 54 | 10 | 5 | – | |||||||||||||||||||
(19,894) | 59,732 | (542,653) | 3,346,846 | (626,851) | 1,059,404 | |||||||||||||||||||
(782) | (423) | (163,518) | (73,786) | (21,825) | (56,930) | |||||||||||||||||||
(12,121) | (6,758) | (794,328) | – | – | – | |||||||||||||||||||
(12,903) | (7,181) | (957,846) | (73,786) | (21,825) | (56,930) | |||||||||||||||||||
80,514 | 153,026 | 1,159,921 | 4,400,670 | 69,418 | 236,119 | |||||||||||||||||||
118 | 43 | 2,078 | 2,808 | 110 | 287 | |||||||||||||||||||
12,720 | 7,069 | 933,537 | 72,052 | 21,345 | 55,754 | |||||||||||||||||||
(69,224) | (41,552) | (1,382,515) | (1,640,750) | (374,993) | (1,022,739) | |||||||||||||||||||
24,128 | 118,586 | 713,021 | 2,834,780 | (284,120) | (730,579) | |||||||||||||||||||
(8,669) | 171,137 | (787,478) | 6,107,840 | (932,796) | 271,895 | |||||||||||||||||||
284,162 | 113,025 | 11,424,962 | 5,317,122 | 4,645,253 | 4,373,358 | |||||||||||||||||||
$ | 275,493 | $ | 284,162 | $ | 10,637,484 | $ | 11,424,962 | $ | 3,712,457 | $ | 4,645,253 | |||||||||||||
$ | 616 | $ | 683 | $ | (107,677) | $ | 28,231 | $ | 12,845 | $ | 19,585 |
See Notes to Financial Statements.
Janus International and Global Funds April 30, 2008 41
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Financial Highlights
For a share outstanding during the six-month period | ||||||||||||||||||||||||||||||||||
ended April 30, 2008 (unaudited) | Janus Global Opportunities Fund | |||||||||||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $17.21 | $15.32 | $13.91 | $12.93 | $11.66 | $8.64 | ||||||||||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||||||||||
Net investment income/(loss) | .05 | .07 | .10 | .10 | .03 | .03 | ||||||||||||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | (2.59) | 4.13 | 1.42 | .91 | 1.27 | 3.02 | ||||||||||||||||||||||||||||
Total from Investment Operations | (2.54) | 4.20 | 1.52 | 1.01 | 1.30 | 3.05 | ||||||||||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (.27) | (.09) | (.11) | (.03) | (.03) | (.04) | ||||||||||||||||||||||||||||
Distributions (from capital gains)* | (.48) | (2.22) | – | – | – | – | ||||||||||||||||||||||||||||
Redemption fees | .01 | –(1) | –(1) | –(1) | –(1) | .01 | ||||||||||||||||||||||||||||
Payment from affiliate | –(2) | –(2) | – | – | – | – | ||||||||||||||||||||||||||||
Total Distributions and Other | (.74) | (2.31) | (.11) | (.03) | (.03) | (.03) | ||||||||||||||||||||||||||||
Net Asset Value, End of Period | $13.93 | $17.21 | $15.32 | $13.91 | $12.93 | $11.66 | ||||||||||||||||||||||||||||
Total Return** | (15.00)%(3) | 30.59%(3) | 10.96% | 7.78%(3) | 11.18% | 35.51% | ||||||||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $140,016 | $188,616 | $145,667 | $177,560 | $207,414 | $143,659 | ||||||||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $154,183 | $162,723 | $161,256 | $218,871 | $175,110 | $132,935 | ||||||||||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4) | 1.13%(5) | 1.07%(5) | 1.17%(6) | 1.03%(5) | 1.09%(5) | 1.17% | ||||||||||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 1.12% | 1.06% | 1.15% | 1.02% | 1.09% | 1.16% | ||||||||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.74% | 0.43% | 0.57% | 0.62% | 0.24% | 0.27% | ||||||||||||||||||||||||||||
Portfolio Turnover Rates*** | 11% | 14% | 38% | 36% | 37% | 31% |
For a share outstanding during the six-month period | ||||||||||||||||||||||||||||||||||
ended April 30, 2008 (unaudited) | Janus Global Research Fund | |||||||||||||||||||||||||||||||||
and through each fiscal year or period ended October 31 | 2008 | 2007 | 2006 | 2005(7) | ||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $17.11 | $13.16 | $11.11 | $10.00 | ||||||||||||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||||||||||
Net investment income/(loss) | .04 | .04 | .10 | (.01) | ||||||||||||||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | (1.13) | 4.72 | 2.22 | 1.12 | ||||||||||||||||||||||||||||||
Total from Investment Operations | (1.09) | 4.76 | 2.32 | 1.11 | ||||||||||||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (.05) | (.05) | (.04) | – | ||||||||||||||||||||||||||||||
Distributions (from capital gains)* | (.72) | (.76) | (.23) | – | ||||||||||||||||||||||||||||||
Redemption fees | .01 | –(1) | N/A | N/A | ||||||||||||||||||||||||||||||
Payment from affiliate | –(2) | –(2) | – | –(2) | ||||||||||||||||||||||||||||||
Total Distributions and Other | (.76) | (.81) | (.27) | – | ||||||||||||||||||||||||||||||
Net Asset Value, End of Period | $15.26 | $17.11 | $13.16 | $11.11 | ||||||||||||||||||||||||||||||
Total Return** | (6.37)%(3) | 38.09%(3) | 21.21% | 11.10%(3) | ||||||||||||||||||||||||||||||
Net Assets, End of Period (in thousands) | $275,493 | $284,162 | $113,025 | $47,404 | ||||||||||||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $260,376 | $173,760 | $79,500 | $29,920 | ||||||||||||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4) | 1.05% | 1.12% | 1.16% | 1.27%(8) | ||||||||||||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 1.05% | 1.11% | 1.14% | 1.25% | ||||||||||||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.55% | 0.36% | 0.48% | (0.24)% | ||||||||||||||||||||||||||||||
Portfolio Turnover Rates*** | 87% | 72% | 118% | 86% |
* | See Note 4 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Redemption fees aggregated less than $.01 on a per share basis for the fiscal year ended. | |
(2) | Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year or period ended. | |
(3) | During the fiscal year or period ended, Janus Capital and/or Janus Services LLC (“Janus Services”) fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%. | |
(4) | See “Explanations of Charts, Tables and Financial Statements.” | |
(5) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01%. | |
(6) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and increased the ratio by 0.02%. | |
(7) | Period from February 25, 2005 (inception date) through October 31, 2005. | |
(8) | The ratio was 1.61% in 2005 before waiver of certain fees incurred by the Fund. |
See Notes to Financial Statements.
42 Janus International and Global Funds April 30, 2008
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For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2008 (unaudited) | Janus Overseas Fund | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $63.02 | $42.45 | $28.42 | $21.62 | $19.50 | $15.44 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .17 | .36 | .49 | .21 | .18 | .24 | ||||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | (3.01) | 20.74 | 13.80 | 6.82 | 2.18 | 3.98 | ||||||||||||||||||||
Total from Investment Operations | (2.84) | 21.10 | 14.29 | 7.03 | 2.36 | 4.22 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.88) | (.55) | (.28) | (.23) | (.24) | (.16) | ||||||||||||||||||||
Distributions (from capital gains)* | (4.29) | – | – | – | – | – | ||||||||||||||||||||
Redemption fees | .01 | .02 | .02 | –(1) | –(1) | –(1) | ||||||||||||||||||||
Payment from affiliate | –(2) | –(2) | –(2) | –(2) | –(2) | – | ||||||||||||||||||||
Total Distributions and Other | (5.16) | (.53) | (.26) | (.26) | (.24) | (.16) | ||||||||||||||||||||
Net Asset Value, End of Period | $55.02 | $63.02 | $42.45 | $28.42 | $21.62 | $19.50 | ||||||||||||||||||||
Total Return** | (4.20)%(3) | 50.24%(3) | 50.71%(3) | 32.74%(3) | 12.24%(3) | 27.62% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $10,637,484 | $11,424,962 | $5,317,122 | $2,554,621 | $2,090,180 | $2,811,437 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $10,261,737 | $7,916,993 | $3,933,175 | $2,272,200 | $2,496,896 | $2,897,732 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 0.88% | 0.89% | 0.92% | 0.90% | 0.93% | 0.94% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 0.88% | 0.89% | 0.91% | 0.89% | 0.93% | 0.94% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.54% | 0.77% | 1.69% | 0.88% | 0.72% | 1.21% | ||||||||||||||||||||
Portfolio Turnover Rates*** | 49% | 51% | 61% | 57% | 58% | 104% |
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2008 (unaudited) | Janus Worldwide Fund | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $60.04 | $48.05 | $41.41 | $38.12 | $37.34 | $32.87 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .21 | .32 | .65 | .46 | .30 | .37 | ||||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | (8.34) | 12.31 | 6.48 | 3.14 | .84 | 4.41 | ||||||||||||||||||||
Total from Investment Operations | (8.13) | 12.63 | 7.13 | 3.60 | 1.14 | 4.78 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.29) | (.64) | (.49) | (.31) | (.36) | (.31) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Redemption fees | –(1) | –(1) | –(1) | –(1) | –(1) | –(1) | ||||||||||||||||||||
Payment from affiliate | –(2) | –(2) | –(2) | –(2) | –(2) | – | ||||||||||||||||||||
Total Distributions and Other | (.29) | (.64) | (.49) | (.31) | (.36) | (.31) | ||||||||||||||||||||
Net Asset Value, End of Period | $51.62 | $60.04 | $48.05 | $41.41 | $38.12 | $37.34 | ||||||||||||||||||||
Total Return** | (13.57)%(3) | 26.53%(3) | 17.34%(3) | 9.47%(3) | 3.06%(3) | 14.65% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $3,712,457 | $4,645,253 | $4,373,358 | $4,957,669 | $7,074,321 | $11,340,655 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $3,926,420 | $4,522,584 | $4,601,953 | $5,984,293 | $9,278,240 | $12,123,565 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 0.88% | 0.88%(6) | 0.87%(6) | 0.85% | 0.92% | 0.93% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 0.88% | 0.87% | 0.86% | 0.85% | 0.92% | 0.92% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.77% | 0.53% | 1.31% | 0.90% | 0.61% | 0.99% | ||||||||||||||||||||
Portfolio Turnover Rates*** | 20% | 27% | 43% | 33% | 120% | 108% |
* | See Note 4 in Notes to Financial Statements. | |
** | Total Return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less that one full year. |
(1) | Redemption fees aggregated less than $.01 on a per share basis for the fiscal year or period ended. | |
(2) | Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year or period ended. | |
(3) | During the fiscal year or period ended, Janus Capital and/or Janus Services LLC (“Janus Services”) fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%. | |
(4) | See “Explanations of Charts, Tables and Financial Statements.” | |
(5) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2008, 2007, 2006, 2005 and 2004. | |
(6) | The ratio was 0.89% in 2007 and 0.90% in 2006 before waiver of certain fees incurred by the Fund. |
See Notes to Financial Statements.
Janus International and Global Funds April 30, 2008 43
Table of Contents
Notes to Schedules of Investments (unaudited)
Lipper Global Funds | Funds that invest at least 25% of their portfolios in securities traded outside of the United States and that may own U.S. securities as well. | |
Lipper International Funds | Funds that invest their assets in securities with primary trading markets outside of the United States. | |
Morgan Stanley Capital International All Country World ex-U.S. IndexSM | Is an unmanaged, free float-adjusted, market capitalization weighted index composed of stocks of companies located in countries throughout the world, excluding the United States. It is designed to measure equity market performance in global developed and emerging markets outside the United States. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
Morgan Stanley Capital International EAFE® Index | Is a free float-adjusted market capitalization weighted index designed to measure developed market equity performance. The MSCI EAFE® Index is composed of companies representative of the market structure of developed market countries. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
Morgan Stanley Capital International World Growth Index | Measures the performance of growth stocks in developed countries throughout the world. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
Morgan Stanley Capital International World IndexSM | Is a market capitalization weighted index composed of companies representative of the market structure of developed market countries in North America, Europe, and the Asia/Pacific Region. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
Russell 1000® Index | Measures the performance of the 1,000 largest companies in the Russell 3000® Index. | |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. | |
ADR | American Depositary Receipt | |
GDR | Global Depositary Receipt | |
PLC | Public Limited Company | |
REIT | Real Estate Investment Trust | |
U.S. Shares | Securities of foreign companies trading on an American Stock Exchange. |
* | Non-income-producing security. | |
** | A portion of this security has been segregated by the custodian to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales and/or securities with extended settlement dates. | |
# | Loaned security; a portion or all of the security is on loan at April 30, 2008. | |
† | The security is purchased with the cash collateral received from securities on loan (Note 1). |
º º Schedule of Fair Valued Securities (as of April 30, 2008)
Value as a | |||||||
Value | % of Net Assets | ||||||
Janus Overseas Fund | |||||||
Eurodekania, Ltd. | $ | 21,140,752 | 0.2% | ||||
Star Asia Financial, Ltd. (U.S. Shares) (144A) | 4,799,015 | 0.0% | |||||
Trinity, Ltd. | 25,071,228 | 0.2% | |||||
$ | 51,010,995 | 0.4% | |||||
Securities are valued at “fair value” pursuant to procedures adopted by the Fund’s trustees. The Schedule of Fair Valued Securities does not include international equity securities fair valued pursuant to a systematic fair valuation model.
44 Janus International and Global Funds April 30, 2008
Table of Contents
§ Schedule of Restricted and Illiquid Securities (as of April 30, 2008)
Acquisition | Acquisition | Value as a | ||||||||||
Date | Cost | Value | % of Net Assets | |||||||||
Janus Overseas Fund | ||||||||||||
Eurodekania, Ltd. º º | 3/8/07 | $ | 17,754,225 | $ | 21,140,752 | 0.2% | ||||||
Star Asia Financial, Ltd. (U.S. Shares)(144A) º º | 2/22/07-6/22/07 | 7,663,913 | 4,799,015 | 0.0% | ||||||||
Trinity, Ltd. º º | 11/14/07 | 25,332,992 | 25,071,228 | 0.2% | ||||||||
$ | 50,751,130 | $ | 51,010,995 | 0.4% | ||||||||
The Fund has registration rights for certain restricted securities held as of April 30, 2008. The issuer incurs all registration costs.
£ | The Investment Company Act of 1940, as amended, defines affiliates as those companies in which a fund holds 5% or more of the outstanding voting securities at any time during the period ended April 30, 2008. |
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/08 | |||||||||||||||
Janus Overseas Fund | |||||||||||||||||||||
Actions Semiconductor Company, Ltd. (ADR)* | – | $ | – | – | $ | – | $ | – | $ | – | $ | 22,322,917 | |||||||||
A-Max Holdings, Ltd.*(1) | 426,816,597 | 44,089,707 | 183,570,000 | 3,093,821 | (540,118) | – | 24,232,235 | ||||||||||||||
ARM Holdings PLC | – | – | – | – | – | 1,981,913 | 166,716,217 | ||||||||||||||
Balrampur Chini Mills, Ltd.* | – | – | – | – | – | – | 33,891,680 | ||||||||||||||
BrasilAgro – Companhia Brasileira de Propriedades Agricolas*(2) | 3,405,600 | – | – | – | – | – | 22,357,826 | ||||||||||||||
C&C Group PLC | – | – | – | – | – | – | 111,541,198 | ||||||||||||||
Chaoda Modern Agriculture Holdings, Ltd.(3) | 1,767,875 | – | – | – | – | 1,017,613 | 206,109,217 | ||||||||||||||
Cosan, Ltd. – Class A (ADR)* | – | – | 7,152,920 | 75,105,660 | 13,827,305 | – | 145,348,946 | ||||||||||||||
Eurodekania, Ltd. | – | – | – | – | – | 594,087 | 21,140,752 | ||||||||||||||
IG Group Holdings PLC | – | – | – | – | – | 1,338,670 | 162,724,126 | ||||||||||||||
Melco International Development, Ltd. | – | – | – | – | – | 81,471 | 87,068,859 | ||||||||||||||
NDS Group PLC (ADR)* | – | – | – | – | – | – | 49,664,891 | ||||||||||||||
Osstem Implant Company, Ltd.* | – | – | – | – | – | – | 20,277,696 | ||||||||||||||
Trinity, Ltd.* | 55,035,935 | 25,332,992 | – | – | – | – | 25,071,228 | ||||||||||||||
Vimicro International Corp. (ADR)* | – | – | – | – | – | – | 6,384,590 | ||||||||||||||
$ | 69,422,699 | $ | 78,199,481 | $ | 13,287,187 | $ | 5,013,754 | $ | 1,104,852,378 | ||||||||||||
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/08 | |||||||||||||||
Janus Worldwide Fund | |||||||||||||||||||||
Ryland Group, Inc. | – | $ | – | – | $ | – | $ | – | $ | 812,837 | $ | 108,310,503 | |||||||||
– | $ | – | – | $ | – | $ | – | $ | 812,837 | $ | 108,310,503 | ||||||||||
(1) | Adjusted for 1:10 Reverse Stock Split on 4/8/08. | |
(2) | Adjusted for 100:1 Stock Split on 11/1/07. | |
(3) | Adjusted for 1.25% Stock Dividend on 11/22/07. |
Aggregate collateral segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales and/or securities with extended settlement dates as of April 30, 2008 is noted below.
Fund | Aggregate Value | ||||
Janus Global Research Fund | $ | 561,386 | |||
Janus Overseas Fund | 1,062,733,345 | ||||
Janus International and Global Funds April 30, 2008 45
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Notes to Financial Statements (unaudited)
The following section describes the organization and significant accounting policies and provides more detailed information about the schedules and tables that appear throughout this report. In addition, the Notes to Financial Statements explain the methods used in preparing and presenting this report.
1. | Organization and Significant Accounting Policies |
Janus Global Opportunities Fund, Janus Global Research Fund, Janus Overseas Fund and Janus Worldwide Fund (collectively the “Funds” and individually a “Fund”) are series funds. The Funds are part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust has twenty-nine funds. The Funds invest primarily in equity securities. Each Fund in this report is classified as diversified as defined in the 1940 Act, with the exception of Janus Global Opportunities Fund, which is classified as nondiversified. The Funds are no-load investments. The following accounting policies have been consistently followed by the Funds and are in conformity with accounting principles generally accepted in the United States of America in the investment company industry.
Effective December 21, 2007, Janus Overseas Fund was closed to new investors. Current investors may continue to invest in the Fund, as well as reinvest any dividends or capital gains distributions. However, once an account is closed, additional investments in the Fund will not be accepted unless you meet certain criteria.
Investment Valuation
Securities are valued at the last sales price or the official closing price for securities traded on a principal securities exchange (U.S. or foreign) and on the NASDAQ National Market. Securities traded on over-the-counter markets and listed securities for which no sales are reported are valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Funds Trustees. Short-term securities with maturities of 60 days or less may be valued at amortized cost, which approximates market value. Debt securities with a remaining maturity of greater than 60 days are valued in accordance with the evaluated bid price supplied by the pricing service. The evaluated bid price supplied by the pricing service is an evaluation that reflects such factors as security prices, yields, maturities and ratings. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect as of the daily close of the New York Stock Exchange (“NYSE”). When market quotations are not readily available or deemed unreliable, or events or circumstances that may affect the value of portfolio securities held by the Funds’ are identified between the closing of their principal markets and the time the net asset value (“NAV”) is determined, securities may be valued at fair value as determined in good faith under procedures established by and under the supervision of the Funds’ Trustees. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) when significant events occur which may affect the securities of a single issuer, such as mergers, bankruptcies, or significant issuer specific developments; (ii) when significant events occur which may affect an entire market, such as natural disasters or significant governmental actions; and (iii) when non-significant events occur such as markets closing early or not opening, security trading halts, or pricing of non-valued securities and restricted or non-public securities. The Funds may use a systematic fair valuation model provided by an independent third party to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the NYSE.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Trust is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes.
Expenses
Each Fund bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which may be allocated pro rata to each of the Fund in the Trust
Securities Lending
Under procedures adopted by the Trustees, the Funds may lend securities to qualified parties (typically brokers or other financial institutions) who need to borrow securities in order to complete certain transactions such as covering short sales, avoiding failures to deliver securities or completing arbitrage activities. The Funds may seek to earn additional income through securities lending. There is the risk of delay in recovering a loaned security or the risk of loss in collateral rights if the borrower fails financially. Janus Capital Management LLC (“Janus Capital”) makes efforts to balance the benefits and risks from granting such loans.
The Funds do not have the right to vote on securities while they are being lent; however, the Funds may attempt to call back the loan and vote the proxy if time permits. All loans will be continuously secured by collateral which may consist of cash,
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U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral permitted by the Securities and Exchange Commission (“SEC”). Cash collateral may be invested in affiliated money market funds or other accounts advised by Janus Capital to the extent consistent with exemptive relief obtained from the SEC or as permitted by the 1940 Act and rules promulgated thereunder. Cash collateral may also be invested in unaffiliated money market funds.
Dresdner Bank AG (the “Lending Agent”) may also invest the cash collateral in the Allianz Dresdner Daily Asset Fund or investments in unaffiliated money market funds or accounts, mutually agreed to by the Funds and the Lending Agent, that comply with Rule 2a-7 of the 1940 Act relating to money market funds.
As of April 30, 2008, the Funds had on loan securities valued as indicated:
Value at | |||||
Fund | April 30, 2008 | ||||
Janus Global Opportunities Fund | $ | 11,097,023 | |||
Janus Global Research Fund | 21,814,505 | ||||
Janus Overseas Fund | 685,178,540 | ||||
Janus Worldwide Fund | 361,937,048 | ||||
As of April 30, 2008, the Funds received cash collateral for securities lending activity as indicated:
Cash Collateral at | |||||
Fund | April 30, 2008 | ||||
Janus Global Opportunities Fund | $ | 11,542,260 | |||
Janus Global Research Fund | 22,911,717 | ||||
Janus Overseas Fund | 706,524,569 | ||||
Janus Worldwide Fund | 376,561,566 | ||||
As of April 30, 2008, all cash collateral received by the Funds was invested in the Allianz Dresdner Daily Asset Fund, except as noted in the following tables:
Fund | Time Deposits | ||||
Janus Global Opportunities Fund | $ | 4,768,576 | |||
Janus Global Research Fund | 14,381,071 | ||||
Janus Overseas Fund | 448,026,753 | ||||
Janus Worldwide Fund | 202,987,923 | ||||
Repurchase | |||||
Fund | Agreements | ||||
Janus Global Opportunities Fund | $ | 1,560,408 | |||
Janus Global Research Fund | 4,705,878 | ||||
Janus Overseas Fund | 146,606,557 | ||||
Janus Worldwide Fund | 66,423,177 | ||||
The value of the collateral must be at least 102% of the market value of the loaned securities that are denominated in U.S. dollars and 105% of the market value of the loaned securities that are not denominated in U.S. dollars. Loaned securities and related collateral are marked-to-market each business day based upon the market value of the loaned securities at the close of business, employing the most recent available pricing information. Collateral levels are then adjusted based upon this mark-to-market evaluation.
The borrower pays fees at the Funds’ direction to the Lending Agent. The Lending Agent may retain a portion of the interest earned on the cash collateral invested. The cash collateral invested by the Lending Agent is disclosed in the Schedule of Investments (if applicable). The lending fees and the Funds’ portion of the interest income earned on cash collateral are included on the Statement of Operations (if applicable).
Interfund Lending
Pursuant to an exemptive order received from the SEC, each Fund may be party to interfund lending agreements between the Fund and other Janus Capital-sponsored mutual funds, which permits them to borrow or lend cash at a rate beneficial to both the borrowing and lending funds. Outstanding borrowings from all sources totaling 10% or more of the borrowing Funds’ total assets must be collateralized at 102% of the outstanding principal value of the loan; loans of less than 10% may be unsecured.
Forward Currency Transactions
The Funds may enter into forward currency contracts in order to reduce exposure to changes in foreign currency exchange rates on foreign portfolio holdings and to lock in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. A forward currency exchange contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated rate. The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a contract is included in “Net realized gain/(loss) from investment and foreign currency transactions” on the Statement of Operations (if applicable). Forward currency contracts held by the Funds are fully collateralized by other securities, which are denoted in the accompanying Schedule of Investments (if applicable). The collateral is evaluated daily to ensure its market value equals or exceeds the current market value of the corresponding forward currency contracts.
Futures Contracts
The Funds may enter into futures contracts to gain exposure to the stock market pending investment of cash balances or to meet liquidity needs. The Funds may also use such derivative instruments to hedge or protect from adverse movements in securities prices, currency rates or interest rates. The use of futures contracts may involve risks such as the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.
Janus International and Global Funds April 30, 2008 47
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Notes to Financial Statements (unaudited) (continued)
Futures contracts are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Statement of Assets and Liabilities (if applicable). When a contract is closed, a realized gain or loss is recorded as “Net realized gain/(loss) from futures contracts” on the Statement of Operations (if applicable), equal to the difference between the opening and closing value of the contract. Generally, futures contracts are marked-to-market (i.e., treated as realized and subject to distribution) for federal income tax purposes at fiscal year-end. Securities designated as collateral for market value on futures contracts are noted in the Schedule of Investments (if applicable). Such collateral is in the possession of the Funds’ custodian.
Swaps
The Funds may enter into swap agreements to hedge exposure to interest rates and credit risk or for investment purposes. A swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to changes in specified prices or rates for a specified amount of an underlying asset. The payment flows are usually netted against each other, with the difference being paid by one party to the other. Swap contracts are reported as an asset and liability on the Statement of Assets and Liabilities. Realized gains and losses are reported in “Net realized gain/(loss) from swap contracts” on the Statement of Operations (if applicable).
Risks may arise as a result of the failure of the counterparty to the swap contract to comply with the terms of the swap contract. The loss incurred by the failure of a counterparty is generally limited to the net interim payment to be received by the Funds, and/or the termination value. Therefore, the Funds consider the creditworthiness of each counterparty to a swap contract in evaluating potential credit risk. Additionally, risks may arise from unanticipated movements in interest rates or in the value of the underlying securities.
Options Contracts
The Funds may purchase or write put and call options on futures contracts and on portfolio securities for hedging purposes or as a substitute for an investment. The Funds may also purchase or write put and call options on foreign currencies in a manner similar to that in which futures or forward contracts on foreign currencies will be utilized. The Funds may also invest in Long-Term Equity Anticipation Securities (LEAPS), which are long-term option contracts that can be maintained for a period of up to three years. The Funds generally invest in options to hedge against adverse movements in the value of portfolio holdings.
When an option is written, the Funds receive a premium and become obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. In writing an option, the Funds bear the market risk of an unfavorable change in the price of the security underlying the written option. Exercise of an option written by the Funds could result in the Funds buying or selling a security at a price different from the current market value.
When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option are adjusted by the amount of premium received or paid.
The Funds may also purchase and write exchange-listed and over-the-counter put and call options on domestic securities indices, and on foreign securities indices listed on domestic and foreign securities exchanges. Options on securities indices are similar to options on securities except that (1) the expiration cycles of securities index options are monthly, while those of securities options are currently quarterly, and (2) the delivery requirements are different. Instead of giving the right to take or make delivery of securities at a specified price, an option on a securities index gives the holder the right to receive a cash “exercise settlement amount” equal to (a) the amount, if any, by which the fixed exercise price of the option exceeds (in the case of a put) or is less than (in the case of a call) the closing value of the underlying index on the date of exercise, multiplied by (b) a fixed “index multiplier.” Receipt of this cash amount will depend upon the closing level of the securities index upon which the option is based being greater than, in the case of a call, or less than, in the case of a put, the exercise price of the index and the exercise price of the option times a specified multiple. The writer of the option is obligated, in return for the premium received, to make delivery of this amount.
Holdings designated to cover outstanding written options are noted in the Schedule of Investments (if applicable). Options written are reported as a liability on the Statement of Assets and Liabilities as “Options written at value” (if applicable).
Realized gains and losses are reported as “Net realized gain/(loss) from options contracts” on the Statement of Operations (if applicable).
The risk in writing call options is that the Funds give up the opportunity for profit if the market price of the security increases and the option is exercised. The risk in writing put options is that the Funds may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying options is that the Funds pay a premium whether or not the option is exercised. The use of such instruments may involve certain additional risks as a result of unanticipated movement in the market. A lack of correlation between the value of an instrument underlying an option and the asset being hedged, or unexpected adverse price movements, could render the Funds’ hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or
48 Janus International and Global Funds April 30, 2008
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sold. There is no limit to the loss the Funds may recognize due to written call options.
Short Sales
The Funds may engage in “short sales against the box.” Short sales against the box involve either selling short a security that the Funds own, or selling short a security that the Funds have the right to obtain, for delivery at a specified date in the future. The Funds may enter into short sales against the box to hedge against anticipated declines in the market price of portfolio securities. The Funds do not deliver from their portfolios the securities sold short and do not immediately receive the proceeds of the short sale. The Funds borrow the securities sold short and receive proceeds from the short sale only when they deliver the securities to the lender. If the value of the securities sold short increases prior to the scheduled delivery date, the Funds lose the opportunity to participate in the gain.
The Funds may also engage in other short sales. The Funds may engage in short sales when the portfolio managers and/or investment personnel anticipate that a security’s market purchase price will be less than its borrowing price. To complete the transaction, the Funds must borrow the security to deliver it to the purchaser and buy that same security in the market to return it to the lender. The total market value of all of a Fund’s short sales positions, other than against the box, will not exceed 10% of its net assets. 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 that 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. There is no limit to the size of any loss that the Fund may recognize upon termination of a short sale. Short sales held by the Funds are fully collateralized by other securities, which are denoted in the accompanying Schedule of Investments (if applicable).
Foreign Currency Translations
The Funds do not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Unrealized net appreciation or depreciation of investments and foreign currency translations arises from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and market risk. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
When-Issued Securities
The Funds may purchase or sell securities on a when-issued or forward commitment basis. The price of the underlying securities and date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Losses may arise due to changes in the market value of the securities or from the inability of counterparties to meet the terms of the contract. In connection with such purchases, the Funds may hold liquid assets as collateral with the Funds custodian sufficient to cover the purchase price.
Exchange-Traded Funds
The Funds may invest in exchange-traded funds, which are index-based investment companies that hold substantially all of their assets in securities representing their specific index. As a shareholder of another investment company, a Fund would bear its pro rata portion of the other investment company’s expenses, including advisory fees, in addition to the expenses the Fund bears directly in connection with its own operations.
Equity-Linked Structured Notes
The Funds may invest in equity-linked structured notes. Equity-linked structured notes are derivative securities which are specially designed to combine the characteristics of one or more underlying securities and their equity derivatives in a single note form. The return and/or yield or income component may be based on the performance of the underlying equity securities, an equity index, and/or option positions. Equity-linked structured notes are typically offered in limited transactions by financial institutions in either registered or non-registered form. An investment in equity-linked structured notes creates exposure to the credit risk of the issuing financial institution, as well as to the market risk of the underlying securities. There is no guaranteed return of principal with these securities and the appreciation potential of these securities may be limited by a maximum payment or call right. In certain cases, equity-linked structured notes may be more volatile and less liquid than less complex securities or other types of fixed-income securities. Such securities may exhibit price behavior that does not correlate with other fixed-income securities.
Janus International and Global Funds April 30, 2008 49
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Notes to Financial Statements (unaudited) (continued)
Restricted Cash
As of April 30, 2008, Janus Global Research Fund had restricted cash in the amount of $160,000. The restricted cash represents funds in relation to swap contracts invested by the Funds as of April 30, 2008. The restricted cash is held at the Fund’s custodian, State Street Bank and Trust Company. The carrying value of the restricted cash approximates fair value.
Initial Public Offerings
The Funds may invest in initial public offerings (“IPOs”). IPOs and other investment techniques may have a magnified performance impact on a fund with a small asset base. A Fund may not experience similar performance as its assets grow.
Restricted Security Transactions
Restricted securities held by the Funds may not be sold except in exempt transactions or in a public offering registered under the Securities Act of 1933, as amended. The risk of investing in such securities is generally greater than the risk of investing in the securities of widely held, publicly traded companies. Lack of a secondary market and resale restrictions may result in the inability of the Funds to sell a security at a fair price and may substantially delay the sale of the security. In addition, these securities may exhibit greater price volatility than securities for which secondary markets exist.
Dividend Distributions
Each Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually, The majority of dividends and capital gains distributions from a Fund will be automatically reinvested into additional shares of that Fund, based on the discretion of the shareholder.
The Funds may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REIT’s taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Funds distribute such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Federal Income Taxes
No provision for income taxes is included in the accompanying financial statements, as the Funds intend to distribute to shareholders all taxable investment income and realized gains and otherwise comply with Subchapter M of the Internal Revenue Code applicable to regulated investment companies.
The Funds adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes on April 30, 2008. FIN 48 requires an evaluation of tax positions taken (or expected to be taken) in the course of preparing a Fund’s tax return to determine whether these positions meet a “more-likely-than-not” standard that based on the technical merits have a more than fifty percent likelihood of being sustained by a taxing authority upon examination. A tax position that meets the “more-likely-than-not” recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations.
FIN 48 requires management of the Funds to analyze all open tax years, fiscal years 2003 - 2006 as defined by Statute of Limitations, for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of and during the six-month period ended April 30, 2008, the Funds did not have a liability for any unrecognized tax benefits. The Funds have no examination in progress and are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
New Accounting Pronouncements
In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS No. 157”), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not require new fair value measurements, but is applied to the extent that other accounting pronouncements require or permit fair value measurements. SFAS No. 157 emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Management does not believe the adoption of SFAS No. 157 will impact the financial statement amounts; however, the Funds will be required to disclose the extent to which fair value is used to measure assets and liabilities and the inputs used to develop the measurements.
In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for
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Financial Assets and Financial Liabilities” (“SFAS No. 159”), which permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Management does not believe the adoption of SFAS No. 159 will impact the financial statement amounts.
In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS No. 161”), which requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS No. 161 is effective for financial statements issued for fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. Management is in the process of evaluating the impact of SFAS No. 161 on the Funds’ financial statement disclosures.
2. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Funds pay a monthly advisory fee to Janus Capital based upon average daily net assets and calculated at the annual rate shown in the table below:
Fund | Advisory Fee % | ||||
Janus Global Opportunities Fund | 0.64% | ||||
Janus Global Research Fund | 0.64% | ||||
Janus Overseas Fund | 0.64% | ||||
Janus Worldwide Fund | 0.60% | ||||
For Janus Global Research Fund and Janus Worldwide Fund, the investment advisory fee is determined by calculating a base fee and applying a performance adjustment. The base fee rate is the same as the investment advisory fee rate shown in the table above. The performance adjustment either increases or decreases the base fee depending on how well each Fund has performed relative to its benchmark, as shown below:
Fund | Benchmark Index | ||||
Janus Global Research Fund | MSCI World Growth Index | ||||
Janus Worldwide Fund | MSCI World IndexSM | ||||
Any performance adjustment commenced on January 1, 2007 for Janus Global Research Fund and February 1, 2007 for Janus Worldwide Fund, prior to which only the base fee rate applied. Only the base fee rate will apply until January 2007 for Janus Global Research Fund and February 2007 for Janus Worldwide Fund, at which time the calculation of the performance adjustment is applied as follows:
(Investment Advisory Fee = Base Fee +/- Performance Adjustment).
The investment advisory fee paid to Janus Capital by the Funds consists of two components: (i) 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”), plus or minus (ii) a performance-fee adjustment (“Performance Adjustment”) calculated by applying a variable rate of up to 0.15% (positive or negative) to the Fund’s average daily net assets during the applicable performance measurement period.
The performance measurement period generally is the previous 36 months. When the Fund’s performance-based fee structure has been in effect for at least 12 months, but less than 36 months, the performance measurement period will be equal to the time that has elapsed since the performance-based fee structure took effect. As noted above, any Performance Adjustment began January 2007 for Global Research Fund and February 2007 for Janus Worldwide Fund. No Performance Adjustment will be applied unless the difference between the Fund’s investment performance and the investment record of the Fund’s benchmark index is 0.50% or greater (positive or negative) during the applicable performance measurement period. For Janus Global Research Fund, the Performance Adjustment is made in even increments for every 0.50% difference in the investment performance of the Fund compared to the cumulative investment record of the Russell 1000® Index (for periods prior to January 1, 2007) and the MSCI World Growth Index (for periods commencing January 1, 2007). The aggregate of the Fund’s performance versus these two benchmark indices, respectively, are used for purposes of calculating the Performance Adjustment. Because the Performance Adjustment is tied to the Fund’s performance relative to its benchmark index (and not its absolute performance), the Performance Adjustment could increase Janus Capital’s fee even if the Fund’s shares lose value during the performance measurement period and could decrease Janus Capital’s fee even if the Fund’s shares increase in value during the performance measurement period. For purposes of computing the Base Fee and the Performance Adjustment, net assets will be averaged over different periods (average daily net assets during the previous month for the Base Fee, versus average daily net assets during the performance measurement period for the Performance Adjustment). Performance of a Fund is calculated net of expenses, whereas a Fund’s benchmark index does not have any expenses. Reinvestment of dividends and distributions are included in calculating both the performance of a Fund and the Fund’s benchmark index. The Base Fee is calculated and accrued daily. The Performance Adjustment is calculated monthly in
Janus International and Global Funds April 30, 2008 51
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Notes to Financial Statements (unaudited) (continued)
arrears and is accrued evenly each day throughout the month. The investment fee is paid monthly in arrears.
The Funds’ prospectus 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 plus/minus any Performance Adjustment. During the six-month period ended April 30, 2008, the Funds recorded the following Performance Adjustment as indicated in the table below:
Performance | |||||
Fund | Fee | ||||
Janus Global Research | $ | 109,619 | |||
Janus Worldwide | 467,015 | ||||
Until at least March 1, 2009, provided that Janus Capital remains investment adviser to the Funds, Janus Capital has agreed to reimburse Janus Global Research Fund by the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding brokerage commissions, interest, taxes and extraordinary expenses, (including, but not limited to, acquired fund fees and expenses) exceed the annual rate of 1.25%. If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as Excess Expense Reimbursement on the Statement of Operations.
The Funds’ expenses may be reduced by expense offsets from an unaffiliated custodian and/or transfer agent. Such credits or offsets are included in “Expense and Fee Offset” on the Statement of Operations. The transfer agent fee offsets received during the period reduce Transfer Agent Fees and Expenses. Custodian offsets received reduce Custodian Fees. The Funds could have employed the assets used by the custodian and/or transfer agent to produce income if they had not entered into an expense offset arrangement.
Each Fund pays Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital and the Funds’ transfer agent, an asset-weighted average annual fee based on the proportion of each Fund’s total net assets sold directly and the proportion of each Fund’s net assets sold through financial intermediaries. The applicable fee rates are 0.16% of net assets on the proportion of assets sold directly and 0.21% on the proportion of assets sold through intermediaries. In addition, Janus Services receives $4.00 per open shareholder account from each of the Funds excluding Janus Overseas Fund for transfer agent services.
During the six-month period ended April 30, 2008, Janus Services reimbursed the following Funds as a result of dilutions caused by incorrectly processed shareholder activity as indicated in the table below:
Fund | |||||
Janus Global Opportunities Fund | $ | 1,847 | |||
Janus Global Research Fund | 5,647 | ||||
Janus Overseas Fund | 53,663 | ||||
Janus Worldwide Fund | 4,699 | ||||
During the fiscal year ended October 31, 2007, Janus Services reimbursed the following Fund as a result of dilutions caused by incorrectly processed shareholder activity as indicated in the table below:
Fund | |||||
Janus Global Opportunities Fund | $ | 3 | |||
Janus Overseas Fund | 9,628 | ||||
Janus Worldwide Fund | 400 | ||||
During the six-month period ended April 30, 2008, Janus Capital reimbursed the following Funds as a result of dilutions caused by certain trading and/or pricing errors as indicated in the table below:
Fund | |||||
Janus Worldwide Fund | $ | 3 | |||
During the fiscal year ended October 31, 2007, Janus Capital reimbursed the following Funds as a result of dilutions caused by certain trading and/or pricing errors as indicated in the table below:
Fund | |||||
Janus Global Research Fund | –(1) | ||||
(1) | Amounts reimbursed were less than a dollar. |
For the six-month period ended April 30, 2008, Janus Capital assumed $16,904 of legal, consulting and Trustee costs and fees incurred by the funds in Janus Investment Fund, Janus Aspen Series and Janus Adviser Series (the “Portfolios”) in connection with the regulatory and civil litigation matters discussed in the Pending Legal Matters. These non-recurring costs were allocated to all Portfolios based on the Portfolios’ respective net assets as of July 31, 2004. No fees were allocated to the Funds that commenced operations after July 31, 2004. As a result, no fees were allocated to Janus Global Research Fund. Additionally, all future non-recurring costs will be allocated to the Portfolios based upon the Portfolios’ respective net assets on July 31, 2004. These “Non-recurring costs” and “Costs assumed by Janus Capital” are shown 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 Funds. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one
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or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Funds as unrealized appreciation/(depreciation) and is shown as of April 30, 2008 on the Statement of Assets and Liabilities as an asset, “Non-interested Trustees’ deferred compensation,” and a liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the six-month period ended April 30, 2008 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. No deferred fees were paid to any Trustee under the Deferred Plan during the six-month period ended April 30, 2008.
Certain officers of the Funds may also be officers and/or directors of Janus Capital. Such officers receive no compensation from the Funds, except for the Funds’ Chief Compliance Officer. Effective January 1, 2006, the Funds began reimbursing the adviser for a portion of the compensation paid to the Chief Compliance Officer of the Trust. Total compensation of $39,907 was paid by the Trust during the six-month period ended April 30, 2008. Each Fund’s portion is reported as part of “Other Expenses” on the Statement of Operations.
A 2.00% redemption fee may be imposed on shares of Janus Global Opportunities Fund, Janus Global Research Fund, Janus Overseas Fund and Janus Worldwide held for 90 days or less. This fee is paid to the Fund rather than Janus Capital, and is designed to deter excessive short-term trading and to offset the brokerage commissions, market impact, and other costs associated with changes in the Fund’s asset level and cash flow due to short-term money movements in and out of the Fund. The redemption fee is accounted for as an addition to Paid-in Capital. Total redemption fees received by the Funds for the six-month period ended April 30, 2008 are indicated in the table below:
Fund | Redemption Fee | ||||
Janus Global Opportunities Fund | $ | 107,500 | |||
Janus Global Research Fund | 118,645 | ||||
Janus Overseas Fund | 2,077,767 | ||||
Janus Worldwide Fund | 110,491 | ||||
The Funds may invest in money market funds, including funds managed by Janus Capital. During the six-month period ended April 30, 2008, the following Funds recorded distributions from affiliated investment companies as affiliated dividend income, and had the following affiliated purchases and sales:
Purchases | Sales | Dividend | Value | |||||||||||||||||
Shares/Cost | Shares/Cost | Income | at 4/30/08 | |||||||||||||||||
Janus Institutional Cash Management Fund - Institutional Shares | ||||||||||||||||||||
Janus Global Opportunities Fund | $ | 6,274,537 | $ | 9,855,773 | $ | 29,119 | $ | 222,360 | ||||||||||||
Janus Global Research Fund | 21,338,665 | 27,491,235 | 55,591 | 1,163,600 | ||||||||||||||||
Janus Overseas Fund | 719,627,790 | 539,013,867 | 3,079,031 | 217,677,873 | ||||||||||||||||
Janus Worldwide Fund | 79,081,095 | 116,115,191 | 653,371 | 10,712,839 | ||||||||||||||||
$ | 826,322,087 | $ | 692,476,066 | $ | 3,817,112 | $ | 229,776,672 | |||||||||||||
Janus Institutional Money Market Fund - Institutional Shares | ||||||||||||||||||||
Janus Global Opportunities Fund | $ | 18,514,004 | $ | 17,818,364 | $ | 33,010 | $ | 695,640 | ||||||||||||
Janus Global Research Fund | 36,754,745 | 28,130,745 | 30,399 | 10,147,400 | ||||||||||||||||
Janus Overseas Fund | 736,865,057 | 764,739,827 | 1,009,998 | 18,198,280 | ||||||||||||||||
Janus Worldwide Fund | 244,064,020 | 243,010,680 | 459,193 | 1,053,340 | ||||||||||||||||
$ | 1,036,197,826 | $ | 1,053,699,616 | $ | 1,532,600 | $ | 30,094,660 | |||||||||||||
3. | Purchases and Sales of Investment Securities |
For the six-month period ended April 30, 2008, the aggregate cost of purchases and proceeds from sales of investment
securities (excluding short-term securities and options contracts) were as follows:
Purchase of Long- | Proceeds from Sales | |||||||||||||
Purchase of | Proceeds from Sales | Term U.S. Government | of Long-Term U.S. | |||||||||||
Fund | Securities | of Securities | Obligations | Government Obligations | ||||||||||
Janus Global Opportunities Fund | $ | 8,081,346 | $ | 25,227,649 | $ | – | $ | – | ||||||
Janus Global Research Fund | 118,806,412 | 112,166,868 | – | – | ||||||||||
Janus Overseas Fund | 2,528,793,095 | 2,731,085,872 | – | – | ||||||||||
Janus Worldwide Fund | 386,184,865 | 617,945,662 | – | – | ||||||||||
Janus International and Global Funds April 30, 2008 53
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Notes to Financial Statements (unaudited) (continued)
4. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses and capital loss carryovers.
The Funds have elected to treat gains and losses on forward foreign currency contracts as capital gains and losses. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of April 30, 2008 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 are wash sale loss deferrals and passive foreign investment companies.
Federal Tax | Unrealized | Unrealized | Net Tax | |||||||||||
Fund | Cost | Appreciation | (Depreciation) | Appreciation | ||||||||||
Janus Global Opportunities Fund | $ | 135,114,326 | $ | 27,433,390 | $ | (11,107,921) | $ | 16,325,469 | ||||||
Janus Global Research Fund | 275,748,256 | 39,675,501 | (16,486,888) | 23,188,613 | ||||||||||
Janus Overseas Fund | 9,108,663,704 | 2,858,219,115 | (616,767,597) | 2,241,451,518 | ||||||||||
Janus Worldwide Fund | 3,861,869,172 | 699,432,202 | (471,818,600) | 227,613,602 | ||||||||||
Net capital loss carryovers as of October 31, 2007 are indicated in the table below. These losses may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. The following table shows the expiration dates of the carryovers.
Capital Loss Carryover Expiration Schedule
For the year ended October 31, 2007
Accumulated | ||||||||||||||
Fund | October 31, 2009 | October 31, 2010 | October 31, 2011 | Capital Losses | ||||||||||
Janus Overseas Fund(1) | $ | – | $ | (1,382,484) | $ | – | $ | (1,382,484) | ||||||
Janus Worldwide Fund | (883,114,609) | (3,186,843,718) | (670,957,456) | (4,740,915,783) | ||||||||||
(1) | Capital loss carryovers subject to annual limitations. |
During the year ended October 31, 2007, the following capital loss carryovers were utilized by the Funds as indicated in the table below:
Capital Loss | ||||||||||||||
Fund | Carryover Utilized | |||||||||||||
Janus Overseas Fund | $ | 340,081,426 | ||||||||||||
Janus Worldwide Fund | 649,963,100 | |||||||||||||
5. | Capital Share Transactions |
Janus Global | ||||||||||||||||||||||||||||||||||||
For the six-month period ended April 30, 2008 (unaudited) | Opportunities | Janus Global | Janus Overseas | Janus Worldwide | ||||||||||||||||||||||||||||||||
and the fiscal year ended October 31, 2007 | Fund | Research Fund | Fund | Fund | ||||||||||||||||||||||||||||||||
(all numbers in thousands) | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||||||||||||
Transactions in Fund Shares | ||||||||||||||||||||||||||||||||||||
Shares sold | 903 | 2,819 | 5,362 | 10,385 | 21,179 | 87,171 | 1,329 | 4,375 | ||||||||||||||||||||||||||||
Reinvested dividends and distributions | 510 | 1,489 | 830 | 544 | 17,531 | 1,571 | 392 | 1,098 | ||||||||||||||||||||||||||||
Shares repurchased | (2,324) | (2,858) | (4,747) | (2,912) | (26,647) | (32,720) | (7,172) | (19,107) | ||||||||||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | (911) | 1,450 | 1,445 | 8,017 | 12,063 | 56,022 | (5,451) | (13,634) | ||||||||||||||||||||||||||||
Shares Outstanding, Beginning of Period | 10,959 | 9,509 | 16,606 | 8,589 | 181,278 | 125,256 | 77,375 | 91,009 | ||||||||||||||||||||||||||||
Shares Outstanding, End of Period | 10,048 | 10,959 | 18,051 | 16,606 | 193,341 | 181,278 | 71,924 | 77,375 |
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6. | Pending Legal Matters |
In the fall of 2003, the Securities and Exchange Commission (“SEC”), the Office of the New York State Attorney General (“NYAG”), the Colorado Attorney General (“COAG”), and the Colorado Division of Securities (“CDS”) announced that they were investigating alleged frequent trading practices in the mutual fund industry. On August 18, 2004, Janus Capital announced that it had reached final settlements with the SEC, the NYAG, the COAG, and the CDS related to such regulators’ investigations into Janus Capital’s frequent trading arrangements.
A number of civil lawsuits were brought against Janus Capital and certain of its affiliates, the Janus funds, and related entities and individuals based on allegations similar to those announced by the above regulators and were filed in several state and federal jurisdictions. Such lawsuits alleged a variety of theories for recovery including, but not limited to, the federal securities laws, other federal statutes (including ERISA), and various common law doctrines. The Judicial Panel on Multidistrict Litigation transferred these actions to the U.S. District Court for the District of Maryland (the “Court”) for coordinated proceedings. On September 29, 2004, five consolidated amended complaints were filed with the Court that generally include: (i) claims by a putative class of investors in certain Janus funds asserting claims on behalf of the investor class (Marini, et al. v. Janus Investment Fund, et al., U.S. District Court, District of Maryland, Case No. 04-CV-00497); (ii) derivative claims by investors in certain Janus funds ostensibly on behalf of such funds (Steinberg et al. v. Janus Capital Management, LLC et al., U.S. District Court, District of Maryland, Case No. 04-CV-00518); (iii) claims on behalf of participants in the Janus 401(k) plan (Wangberger v. Janus Capital Group Inc., 401(k) Advisory Committee, et al., U.S. District Court, District of Maryland, Case No. JFM-05-2711); (iv) claims brought on behalf of shareholders of Janus Capital Group Inc. (“JCGI”) on a derivative basis against the Board of Directors of JCGI (Chasen v. Whiston, et al., U.S. District Court, District of Maryland, Case No. 04-MD-00855); and (v) claims by a putative class of shareholders of JCGI asserting claims on behalf of the shareholders (Wiggins, et al. v. Janus Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No. 04-CV-00818). Each of the five complaints initially named JCGI and/or Janus Capital as a defendant. In addition, the following were also named as defendants in one or more of the actions: Janus Investment Fund (“JIF”), Janus Aspen Series (“JAS”), Janus Adviser Series (“JAD”), Janus Distributors LLC, Enhanced Investment Technologies, LLC (“INTECH”), Bay Isle Financial LLC (“Bay Isle”), Perkins, Wolf, McDonnell and Company, LLC (“Perkins”), the Advisory Committee of the Janus 401(k) plan, and the current or former directors of JCGI.
On August 25, 2005, the Court entered orders dismissing most of the claims asserted against Janus Capital and its affiliates by fund investors in the Marini and Steinberg cases (actions (i) and (ii) above) except certain claims under Section 10(b) of the Securities Exchange Act of 1934 and under Section 36(b) of the Investment Company Act of 1940, as amended (the “1940 Act”). On August 15, 2006, the Wangberger complaint in the 401(k) plan class action (action (iii) above) was dismissed by the district court with prejudice. The plaintiff appealed that dismissal decision to the United States Court of Appeals for the Fourth Circuit. The appeal is still pending and argument in the matter was held in December 2007. The Court also dismissed the Chasen lawsuit (action (iv) above) against JCGI’s Board of Directors without leave to amend. Finally, a Motion to Dismiss the Wiggins suit (action (v) above) was granted and the matter was dismissed in May 2007. However, in June 2007, Plaintiffs appealed that dismissal to the United States Court of Appeals for the Fourth Circuit. That appeal is currently pending.
In addition to the lawsuits described above, the Auditor of the State of West Virginia (“Auditor”), in his capacity as securities commissioner, has initiated administrative proceedings against many of the defendants in the market timing cases (including JCGI and Janus Capital) and, as a part of its relief, is seeking disgorgement and other monetary relief based on similar market timing allegations (In the Matter of Janus Capital Group Inc. et al., Before the Securities Commissioner, State of West Virginia, Summary Order No. 05-1320). The respondents in these proceedings collectively sought a Writ of Prohibition in state court, which was denied. Their subsequent Petition for Appeal was also denied. Consequently, in September 2006, JCGI and Janus Capital filed their answer to the Auditor’s summary order instituting proceedings and requested a hearing. A status conference was held on June 28, 2007, during which the parties were ordered to submit their proposed scheduling order. To date, no scheduling order has been entered in the case. In addition to the pending Motion to Discharge Order to Show Cause, JCGI and Janus Capital, as well as other similarly situated defendants, continue to challenge the statutory authority of the Auditor to bring such an action.
During 2007, two lawsuits were filed against Janus Management Holdings Corporation (“Janus Holdings”), an affiliate of JCGI, by former Janus portfolio managers, alleging that Janus Holdings unilaterally implemented certain changes to compensation in violation of prior agreements. These complaints allege some or all of the following claims: (1) breach of contract; (2) willful and wanton breach of contract; (3) breach of good faith and fair dealing; and (4) estoppel. Janus Holdings filed Answers to these complaints denying any liability for these claims and intends to vigorously defend against the allegations.
Additional lawsuits may be filed against certain of the Janus funds, Janus Capital, and related parties in the future. Janus Capital does not currently believe that these pending actions will materially affect its ability to continue providing services it has agreed to provide to the Janus funds.
Janus International and Global Funds April 30, 2008 55
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to their portfolio securities is available: (i) without charge, upon request, by calling 1-800-525-3713 (toll free); (ii) on the Funds’ website at www.janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding each Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through www.janus.com and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Funds file their complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Funds’ Form N-Q: (i) is available on the SEC’s website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-3713 (toll free).
Approval of Advisory Agreements During the Period
The Trustees of Janus Investment Fund, none of whom has ever been affiliated with Janus Capital (“Independent Trustees”), oversee the management of each Fund and, as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the three Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed a substantial amount of information provided by Janus Capital and the respective subadvisers in response to requests of the Independent Trustees and their independent legal counsel. They also received and reviewed a considerable amount of information and analysis provided by their independent fee consultant. Throughout their consideration of the agreements, the Independent Trustees were advised by their independent legal counsel. The Independent Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 14, 2007, based on their evaluation of the information provided by Janus Capital, the subadvisers and the independent fee consultant, as well as other information, the Trustees determined that the overall arrangements between each Fund and Janus Capital and each subadviser, as applicable, were fair and reasonable in light of the nature, extent and quality of the services provided by Janus Capital, its affiliates and the subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting the Trustees unanimously approved the continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, for the period from February 1, 2008 through February 1, 2009 (January 1, 2008 through January 1, 2009 for INTECH Risk-Managed Stock Fund and Janus Global Research Fund), subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective and strategy of each Fund, the knowledge of 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, especially those who provide investment management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions, serving as the Funds’ administrator, monitoring adherence to the Funds’ investment restrictions, producing shareholder reports, providing support services for the Trustees and Trustee committees, communicating with shareholders, and overseeing the activities of other service providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital and/or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements; that, taking into account steps taken to address those Funds whose performance lagged that of the median of their peers for certain periods, the quality of those services had been consistent with or superior to quality norms in the industry; and that 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
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appropriate education and experience, to serve the Funds effectively and had demonstrated its continuing ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the investment performance of each Fund over various time periods. They reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by Lipper Inc., an independent provider of investment company data, and with the Fund’s benchmark index. They concluded that the performance of many Funds was good to very good under current market conditions. Although the performance of some Funds lagged that of the median of their peers for certain periods, the Trustees also concluded that Janus Capital had taken appropriate steps to address those instances of under-performance and that the more recent performance of most of those Funds had been improving.
Costs of Services Provided
The Trustees examined information on the fees and expenses of each Fund in comparison to similar information for comparable funds as provided by Lipper. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and administrative) fees for most of the Funds, after contractual expense limitations, was below the mean management fee rate of the respective peer group of funds selected by Lipper.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital to its separate account clients and to its subadvised funds (for which Janus Capital provides only services related to portfolio management). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administrative services, oversight of the Funds’ other service providers, Trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, the Trustees noted that the spread between the average fee rates charged to the Funds and the fee rates that Janus Capital charged to its separate account clients was significantly smaller than the average spread for such fee rates of other advisers, based on publicly available data and research conducted by their independent fee consultant.
The Trustees reviewed information on the profitability to Janus Capital and its affiliates of their relationships with each Fund, as well as an explanation of the methodology used in allocating various expenses of Janus Capital and its affiliates among the Funds and other clients. They also reviewed the financial statements of Janus Capital’s parent company and its corporate structure. In their review, the Trustees considered whether Janus Capital and each subadviser receives adequate incentives to manage the Funds effectively. They recognized that profitability comparisons among investment advisers are difficult because very little comparative information is publicly available and profitability of any adviser is affected by numerous factors, including the organizational structure of the particular adviser, the types of funds and other accounts it manages, possible other lines of business, the methodology for allocating expenses, and the adviser’s capital structure and cost of capital. However, based on the information available and taking those factors into account, the Trustees concluded that Janus Capital’s profitability with respect to each Fund in relation to the services rendered was not unreasonable.
The Trustees concluded that the management fees and other compensation payable by each Fund to Janus Capital and its affiliates, as well as the fees payable by Janus Capital or the Funds to the subadvisers of subadvised Funds, were reasonable in relation to the nature, extent and quality of the services provided, taking into account the fees charged by other advisers for managing comparable mutual funds with similar strategies and the fees Janus Capital and the subadvisers charge to other clients. They also concluded that the overall expense ratio of each Fund was reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund and any expense limitations agreed to by Janus Capital.
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of the Funds increase. They noted that, although most Funds pay advisory fees at a fixed rate as a percentage of net assets, without any breakpoints, the management fee rate paid by each Fund, after any contractual expense limitations, was below the mean management fee rate of the Fund’s peer group selected by Lipper; and, for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of many of the Funds declined in the past few years, those Funds benefited from having advisory fee rates that remained constant rather than increasing as assets declined. In addition, performance fee structures have been
Janus International and Global Funds April 30, 2008 57
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Additional Information (unaudited) (continued)
implemented for several Funds that will cause the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through lower charges of third-party service providers, based on the combined scale of all of the Funds. Based on all of the information they reviewed, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of economies of scale at the current asset level of the Fund.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and that the transfer agent receives compensation directly from the non-money market Funds for services provided. They also considered Janus Capital’s past and proposed use of commissions paid by Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting those Funds and/or other clients of Janus Capital. The Trustees concluded that Janus Capital’s use of “soft” commission dollars of a Fund to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit the Funds. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital may potentially benefit from their relationship with each other in other ways. They also concluded that Janus Capital benefits from the receipt of proprietary and third-party research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s receipt of those products and services, as well as research products and services acquired through commissions paid by other clients of Janus Capital. They further concluded that success of any Fund could attract other business to Janus Capital or other Janus funds and that the success of Janus Capital could enhance Janus Capital’s ability to serve the Funds.
After full consideration of the above factors, as well as other factors, all of the Trustees, all of whom are Independent Trustees, concluded that the proposed continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, was in the best interest of the respective Funds and their shareholders.
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Explanations of Charts, Tables and
Financial Statements (unaudited)
Financial Statements (unaudited)
1. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in each Fund (from inception) with one or more widely used market indices. The hypothetical example does not represent the returns of any particular investment.
When comparing the performance of a Fund with an index, keep in mind that market indices do not include brokerage commissions that would be incurred if you purchased the individual securities in the index. They also do not include taxes payable on dividends and interest or operating expenses incurred if you maintained a Fund invested in the index.
Average annual total returns are also quoted for each Fund. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized and unsubsidized ratios for the past fiscal year. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting a Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and/or Janus Services LLC and reflects a Fund’s subsidized expense ratio. Both the total annual fund operating expenses ratio and net annual fund operating expenses ratio are based on average net assets as of the fiscal year ended October 31, 2007. The ratios also include expenses indirectly incurred by the Fund as a result of investing in other investment companies or pooled investments, which are not reflected in the “Financial Highlights” of this report. As a result, these ratios may be higher or lower than those shown in the “Financial Highlights” in this report. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
2. | Schedules of Investments |
Following the performance overview section is each Fund’s Schedule of Investments. This schedule reports the industry concentrations and types of securities held in each Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
Funds that invest in foreign securities also provide a summary of investments by country. This summary reports the Fund’s exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country in which the company is incorporated.
2a. Forward Currency Contracts
A table listing forward currency contracts follows each Fund’s Schedule of Investments (if applicable). Forward currency contracts are agreements to deliver or receive a preset amount of currency at a future date. Forward currency contracts are used to hedge against foreign currency risk in the Fund’s long-term holdings.
The table provides the name of the foreign currency, the settlement date of the contract, the amount of the contract, the value of the currency in U.S. dollars and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the change in currency exchange rates from the time the contract was opened to the last day of the reporting period.
2b. Futures
A table listing futures contracts follows each Fund’s Schedule of Investments (if applicable). Futures contracts are contracts that obligate the buyer to receive and the seller to deliver an instrument or money at a specified price on a specified date. Futures are used to hedge against adverse movements in securities prices, currency risk or interest rates.
The table provides the name of the contract, number of contracts held, the expiration date, the principal amount, value and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the marked-to-market amount for the last day of the reporting period.
2c. Options
A table listing written options contracts follows each Fund’s Schedule of Investments (if applicable). Written options contracts are contracts that obligate a Fund to sell or purchase an underlying security at a fixed price, upon exercise of the option. Options are used to hedge against adverse movements in securities prices, currency risk or interest rates.
The table provides the name of the contract, number of contracts held, the expiration date, exercise price, value and premiums received.
Janus International and Global Funds April 30, 2008 59
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Explanations of Charts, Tables and
Financial Statements (unaudited) (continued)
Financial Statements (unaudited) (continued)
3. | Statement of Assets and Liabilities |
This statement is often referred to as the “balance sheet.” It lists the assets and liabilities of the Funds on the last day of the reporting period.
The Funds’ assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on stocks owned and the receivable for Fund shares sold to investors but not yet settled. The Funds’ liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Funds’ net assets. Because Funds must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Funds’ net assets (assets minus liabilities) by the number of shares outstanding.
4. | Statement of Operations |
This statement details the Funds’ income, expenses, gains and losses on securities and currency transactions, and appreciation or depreciation of current Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from stocks and interest earned from interest-bearing securities in the Funds.
The next section reports the expenses incurred by the Funds, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the increase or decrease in the value of securities held in the Funds. The Funds realize a gain (or loss) when they sell their position in a particular security. An unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Funds during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
5. | Statement of Changes in Net Assets |
This statement reports the increase or decrease in the Funds’ net assets during the reporting period. Changes in the Funds’ net assets are attributable to investment operations, dividends, distributions and capital share transactions. This is important to investors because it shows exactly what caused the Funds’ net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Funds’ investment performance. The Funds’ net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends in cash, money is taken out of the Fund to pay the distribution. If investors reinvest their dividends, the Funds’ net assets will not be affected. If you compare each Fund’s “Net Decrease from Dividends and Distributions” to the “Reinvested dividends and distributions,” you will notice that dividend distributions had little effect on each Fund’s net assets. This is because the majority of Janus investors reinvest their distributions.
The reinvestment of dividends is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Funds through purchases or withdrawals via redemptions. “Redemption Fees” (if applicable) refers to the fee paid to the Funds for shares held for 90 days or less by a shareholder. The Funds’ net assets will increase and decrease in value as investors purchase and redeem shares from the Funds.
6. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect each Fund’s net asset value (“NAV”) for current and past reporting periods. Not only does this table provide you with total return, it also reports total distributions, asset size, expense ratios and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income per share, which comprises dividends and interest income earned on securities held by the Fund. Following is the total of gains/(losses), realized and unrealized. Dividends and distributions are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the average annual total return reported the last day of the period.
Also included are the expense ratios, or the percentage of average net assets that were used to cover operating expenses during the period. Expense ratios vary across the Funds for a number of reasons, including the differences in management fees, the frequency of dividend payments and the extent of foreign investments, which entail greater transaction costs.
The Funds’ expenses may be reduced through expense-reduction arrangements. These arrangements may include the use of balance credits or transfer agent fee offsets. The Statement of Operations reflects total expenses before any such offset, the amount of the offset and the net expenses. The
60 Janus International and Global Funds April 30, 2008
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expense ratios listed in the Financial Highlights reflect total expenses prior to any expense offset (gross expense ratio) and after the expense offsets (net expense ratio). Both expense ratios reflect expenses after waivers (reimbursements), if applicable.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of a Fund during the reporting period. Don’t confuse this ratio with a Fund’s yield. The net investment income ratio is not a true measure of a Fund’s yield because it doesn’t take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in a Fund. Portfolio turnover is affected by market conditions, changes in the size asset of a Fund, the nature of the Fund’s investments and the investment style of the portfolio manager. A 100% rate implies that an amount equal to the value of the entire portfolio is turned over in a year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the portfolio is traded every six months.
Janus International and Global Funds April 30, 2008 61
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Janus provides access to a wide range of investment disciplines.
Asset Allocation
Janus asset allocation portfolios invest in several underlying mutual funds, rather than individual securities, in an attempt to offer investors an instantly diversified portfolio. Janus Smart Portfolios are unique in their combination of funds that leverage the fundamental research approach of Janus with funds supported by the risk-managed, mathematical investment process of INTECH (a Janus subsidiary).
Growth
Janus growth funds focus on companies believed to be the leaders in their respective industries, with solid management teams, expanding market share, margins and efficiencies.
Core
Janus core funds seek investments in more stable and predictable companies. These funds look for a strategic combination of steady growth and for certain funds, some degree of income.
Risk-Managed
Our risk-managed fund seeks to outperform its index while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH (a Janus subsidiary), this fund uses a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Janus value funds invest in companies they believe are poised for a turnaround or are trading at a significant discount to fair value. The goal is to gain unique insight into a company’s true value and identify and evaluate potential catalysts that may unlock shareholder value.
International & Global
Janus international and global funds seek to leverage Janus’ research capabilities by taking advantage of inefficiencies in foreign markets, where accurate information and analytical insight are often at a premium.
Bond & Money Market
Janus bond funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek maximum current income consistent with stability of capital.
For more information about our funds, go to www.janus.com.
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from www.janus.com. Read it carefully before you invest or send money.
Investments in money market funds are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the money market funds.
![]() | 151 Detroit Street Denver, CO 80206 1-800-525-3713 |
Funds distributed by Janus Distributors LLC (6/08)
C-0307-52 | 111-24-105 06-08 |
Table of Contents
2008 Semiannual Report
Janus Bond & Money Market Funds
Janus Flexible Bond Fund
Janus High-Yield Fund
Janus Short-Term Bond Fund
Money Market
Janus Money Market Fund
Janus Government Money Market Fund
Janus Tax-Exempt Money Market Fund
Look Inside. . .
• Portfolio management perspective
• Investment strategy behind your fund
• Fund performance, characteristics and holdings
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646janus.gif)
Table of Contents
Table of Contents
Janus Bond & Money Market Funds
Co-Chief Investment Officers’ Letter to Shareholders | 1 | |
Useful Information About Your Fund Report | 5 | |
Management Commentaries and Schedules of Investments | ||
Janus Flexible Bond Fund | 6 | |
Janus High-Yield Fund | 16 | |
Janus Short-Term Bond Fund | 28 | |
Janus Money Market Fund | 35 | |
Janus Government Money Market Fund | 39 | |
Janus Tax-Exempt Money Market Fund | 40 | |
Statements of Assets and Liabilities – Bond Funds | 42 | |
Statements of Operations – Bond Funds | 43 | |
Statements of Changes in Net Assets – Bond Funds | 44 | |
Financial Highlights – Bond Funds | 45 | |
Statements of Assets and Liabilities – Money Market Funds | 47 | |
Statements of Operations – Money Market Funds | 48 | |
Statements of Changes in Net Assets – Money Market Funds | 49 | |
Financial Highlights – Money Market Funds | 50 | |
Notes to Schedules of Investments | 52 | |
Notes to Financial Statements | 54 | |
Additional Information | 66 | |
Explanations of Charts, Tables and Financial Statements | 69 |
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from www.janus.com. Read it carefully before you invest or send money.
Investment in money market funds are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in money market funds.
Investment in money market funds are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in money market funds.
Table of Contents
Co-Chief Investment Officers’ Letter to the Shareholders
![(JONATHAN COLEMAN PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646pcolemaj.jpg)
Jonathan Coleman
Co-Chief Investment
Officer
![(GIBSON SMITH PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646psmithgi.jpg)
Gibson Smith
Co-Chief Investment
Officer
Dear Shareholders,
Challenging economic conditions have been the dominant theme for the financial markets over the past several months. Despite recent volatility, our investment team has maintained a relentless focus on our fundamental, bottom-up research process and has continued to discover compelling investment opportunities for our shareholders.
Major Market Themes
Turmoil in the credit markets, uncertainty surrounding the near-term outlook for the U.S. economy and a weaker corporate profit picture made for a volatile and difficult market environment over the past several months. While sentiment toward the end of the period improved and U.S. equity markets finished well above their mid-March lows, stocks were broadly lower over the six months ended April 30, 2008. The Russell 1000® Index declined 9.54%, the Russell 2000® Index was down 12.92% and the Morgan Stanley Capital International (MSCI) All Country World IndexSM gave up 9.47% during the period. Fixed-income markets proved to be volatile over the period with the Lehman Brothers Aggregate Bond Index up 4.08% and the Lehman Brothers High-Yield Bond Index lost 0.74% over the period.
Additional write-offs related to the loose lending practices over the previous 36 months, slowing consumer spending and a softening labor market, accompanied by record commodity prices and rising inflation expectations, weighed on investor sentiment during the period. Stocks reached their lows in mid-March amid fears that credit conditions could suffer another setback given a deteriorating liquidity position at investment bank Bear Stearns. Uncertain market conditions resulted in interest rates hitting five-year lows with the 10-Year Treasury Note touching 3.33%. Prior to that, periodic liquidity injections by the Federal Reserve (Fed) failed to alleviate the stress in the funding and credit markets. Financial markets stabilized somewhat after the Fed aggressively lowered the Federal Funds rate, expanded the collateral it would accept, allowed for broker/dealers to borrow directly from the Fed and played an instrumental role in JP Morgan Chase’s purchase of near-defunct Bear Stearns. All of these moves were vitally important toward stabilizing the financial system while allowing for the recovery process to continue. By the end, the Fed had lowered its target interest rate from 4.50% to 2.00% during the period.
Following the March lows, the equity market’s rally at the end of the six-month period can be attributed to the moves by the Fed and, in part, to improving sentiment as investors began to look ahead to a possible economic recovery. Nevertheless, concerns about elevated inflationary pressures, soft consumer spending, the weak housing market and the lingering possibility of more write-downs continued to weigh on the market.
Performance Notables
For the one-year period ended April 30, 2008, 77% of Janus’ retail funds ranked within Lipper’s top two quartiles, based upon total returns. The results were even stronger over longer time periods as 87% of our retail funds achieved first- or second-quartile Lipper rankings over three years and 86% ranked in Lipper’s top two quartiles over five years. Furthermore, 78.3% of our retail funds had a 4- or 5-star overall Morningstar Ratingtm as of April 30, 2008, well ahead of the 32.5% of funds for which Morningstar awards 4- or 5-stars in each category. (See complete Lipper rankings on page 3 and complete Morningstar Ratingstm on page 4).
Investment Team Update
We continue to enhance the breadth of our global stock coverage and work tirelessly to generate solid investment insights in an attempt to deliver superior investment performance. Our hands-on research approach is critical to our stock selection process. As such, the Janus equity research team traveled over 2.9 million miles in 2007 investigating potential stock and bond picks worldwide. This year, we plan to embark on a multi-year strategy to locate certain investment personnel closer to the companies that they research as an important first step in building out our global footprint from a research standpoint.
While our objective is to develop a research edge and invest with conviction in our funds, we seek to do so in a disciplined and thoughtful way by clearly understanding and managing risk in our portfolios. Dan Scherman, Director of Risk and Trading, works continually with our investment management
Janus Bond and Money Market Funds April 30, 2008 1
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Continued
team to ensure that portfolio risks are intentional and calculated. We believe this analysis is both timely and critical as we navigate today’s challenging markets.
Conclusion
As we look back over the past six months, we are relieved that signs of stabilization appeared in the financial markets as the period came to a close. However, we recognize that there are still significant challenges ahead. Increasing risk aversion has resulted in a significant contraction of credit availability for both consumers and corporations. The tightening of credit, along with declining real estate prices, rising energy prices and a climbing unemployment rate may all create significant economic headwinds in the near future. While unsettling, we believe this is a natural and necessary process of recovery from the excessive risk-taking and loose lending standards that developed over the previous several years in many areas of the credit markets. We feel that the environment will improve as the healing process progresses.
So, as we look ahead, we are paying very close attention to the outlook for the global economy, with a keen focus on slowing growth in the United States and the growth rates of the emerging economies around the globe. As these emerging economies become more prosperous, they may be able to move from economies based exclusively on exports fueling their growth to more balanced models emphasizing both exports and internal consumption of the goods they produce. Over a longer period of time, we believe this creates more stability in the global economy. We are also watching rising energy and commodity prices and their impact on inflationary expectations and the absolute level of interest rates. In addition to interest rates, we are focused on the outlook for the housing market and the implications of changes in home prices on the underlying health of the financial system, believing that the recapitalization of the banking and brokerage sectors is a vitally important element of the healing process.
While market volatility is undoubtedly challenging, it can also create an environment that can result in incredibly compelling investment opportunities. Our top priority is to remain committed to our process of in-depth fundamental research, which has been at the core of our investment process since Janus’ inception in 1969. With this singular focus we strive to deliver consistent long-term results for our shareholders.
Thank you for your continued investment in Janus funds.
Sincerely,
![(-s- JONATHAN COLEMAN)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646scolemaj.gif)
Jonathan Coleman
Co-Chief Investment Officer
![(-s- GIBSON SMITH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646ssmithgi.gif)
Gibson Smith
Co-Chief Investment Officer
2 Janus Bond and Money Market Funds April 30, 2008
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Lipper Rankings (unaudited)
Lipper Rankings – Based on total returns as of 4/30/08 | ||||||||||||||||||||||||||
One Year | Three Year | Five Year | Ten Year | Since Inception | Since PM Inception | |||||||||||||||||||||
Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | |||||||||||||||
Lipper Category | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | ||||||||||||||
Janus Investment Fund (Inception Date) | ||||||||||||||||||||||||||
Janus Fund (2/70) | Large-Cap Growth Funds | 58 | 429/748 | 26 | 162/634 | 39 | 203/528 | 43 | 107/250 | 11 | 2/18 | 32 | 246/776 | |||||||||||||
Janus Enterprise Fund(1) (9/92) | Mid-Cap Growth Funds | 9 | 50/604 | 6 | 27/503 | 6 | 21/414 | 34 | 60/179 | 26 | 12/46 | 3 | 13/623 | |||||||||||||
Janus Orion Fund (6/00) | Multi-Cap Growth Funds | 2 | 10/513 | 2 | 5/396 | 1 | 1/329 | N/A | N/A | 17 | 35/212 | 3 | 16/558 | |||||||||||||
Janus Research Fund(1) (5/93) | Large-Cap Growth Funds | 19 | 141/748 | 4 | 24/634 | 3 | 14/528 | 3 | 7/250 | 3 | 2/79 | 2 | 9/678 | |||||||||||||
Janus Triton Fund(1)(2/05) | Small-Cap Growth Funds | 8 | 42/598 | 5 | 24/481 | N/A | N/A | N/A | N/A | 2 | 6/471 | 3 | 15/542 | |||||||||||||
Janus Twenty Fund* (4/85) | Large-Cap Growth Funds | 1 | 1/748 | 1 | 1/634 | 1 | 1/528 | 2 | 4/250 | 3 | 1/36 | 1 | 1/807 | |||||||||||||
Janus Venture Fund* (4/85) | Small-Cap Growth Funds | 69 | 410/598 | 32 | 150/481 | 9 | 35/395 | 24 | 44/187 | 9 | 1/11 | 23 | 69/308 | |||||||||||||
Janus Global Life Sciences Fund (12/98) | Health/Biotechnology Funds | 4 | 7/195 | 17 | 25/153 | 13 | 18/141 | N/A | N/A | 13 | 6/47 | 4 | 7/195 | |||||||||||||
Janus Global Technology Fund (12/98) | Science & Technology Funds | 23 | 60/264 | 16 | 38/241 | 29 | 63/219 | N/A | N/A | 19 | 14/74 | 18 | 45/250 | |||||||||||||
Janus Balanced Fund(1) (9/92) | Mixed-Asset Target Allocation Moderate Funds | 2 | 7/451 | 1 | 3/349 | 24 | 55/232 | 6 | 7/136 | 4 | 1/29 | 1 | 3/349 | |||||||||||||
Janus Contrarian Fund (2/00) | Multi-Cap Core Funds | 12 | 98/863 | 1 | 1/680 | 1 | 1/498 | N/A | N/A | 5 | 12/294 | 5 | 12/294 | |||||||||||||
Janus Fundamental Equity Fund(1) (6/96) | Large-Cap Core Funds | 25 | 201/822 | 4 | 26/684 | 6 | 34/575 | 1 | 3/299 | 1 | 1/207 | 26 | 217/848 | |||||||||||||
Janus Growth and Income Fund(1) (5/91) | Large-Cap Core Funds | 30 | 245/822 | 21 | 140/684 | 29 | 163/575 | 8 | 22/299 | 6 | 4/74 | 21 | 173/848 | |||||||||||||
INTECH Risk-Managed Stock Fund (2/03) | Multi-Cap Core Funds | 63 | 540/863 | 64 | 433/680 | 31 | 150/498 | N/A | N/A | 35 | 172/497 | 35 | 172/497 | |||||||||||||
Janus Mid Cap Value Fund – Inv(1)(2) (8/98) | Mid-Cap Value Funds | 6 | 17/332 | 13 | 34/264 | 17 | 34/204 | N/A | N/A | 2 | 1/66 | 2 | 1/66 | |||||||||||||
Janus Small Cap Value Fund – Inv*(2) (10/87) | Small-Cap Core Funds | 11 | 84/796 | 30 | 191/638 | 44 | 214/493 | 14 | 25/190 | 12 | 15/130 | 12 | 15/130 | |||||||||||||
Janus Flexible Bond Fund(1) (7/87) | Intermediate Investment Grade Debt Funds | 11 | 57/559 | 9 | 39/473 | 15 | 59/403 | 36 | 70/194 | 14 | 3/22 | 11 | 60/563 | |||||||||||||
Janus High-Yield Fund(1) (12/95) | High Current Yield Funds | 59 | 270/458 | 49 | 185/383 | 71 | 235/333 | 22 | 35/163 | 5 | 4/97 | 46 | 161/349 | |||||||||||||
Janus Short-Term Bond Fund(1) (9/92) | Short Investment Grade Debt Funds | 28 | 72/262 | 28 | 58/211 | 22 | 35/160 | 33 | 28/84 | 32 | 8/24 | 31 | 79/262 | |||||||||||||
Janus Global Opportunities Fund(1) (6/01) | Global Funds | 73 | 320/443 | 95 | 330/349 | 65 | 173/267 | N/A | N/A | 29 | 60/207 | 29 | 60/207 | |||||||||||||
Janus Global Research Fund(1)(2/05) | Multi-Cap Growth Funds | 4 | 15/443 | 3 | 10/349 | N/A | N/A | N/A | N/A | 4 | 10/324 | 4 | 10/324 | |||||||||||||
Janus Overseas Fund*(1) (5/94) | International Funds | 1 | 7/1122 | 1 | 1/821 | 1 | 1/682 | 3 | 7/331 | 1 | 1/110 | 1 | 1/685 | |||||||||||||
Janus Worldwide Fund(1) (5/91) | Global Funds | 73 | 321/443 | 78 | 271/349 | 96 | 255/267 | 82 | 100/122 | 36 | 6/16 | 80 | 238/299 | |||||||||||||
Janus Smart Portfolio – Growth (12/05) | Mixed-Asset Target Allocation Growth Funds | 3 | 14/669 | N/A | N/A | N/A | N/A | N/A | N/A | 2 | 10/582 | 2 | 10/582 | |||||||||||||
Janus Smart Portfolio – Moderate (12/05) | Mixed-Asset Target Allocation Moderate Funds | 1 | 3/451 | N/A | N/A | N/A | N/A | N/A | N/A | 2 | 7/383 | 2 | 7/383 | |||||||||||||
Janus Smart Portfolio – Conservative (12/05) | Mixed-Asset Target Allocation Conservative Funds | 3 | 9/429 | N/A | N/A | N/A | N/A | N/A | N/A | 2 | 6/339 | 2 | 6/339 | |||||||||||||
(1) | The date of the Lipper ranking is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception. | |
(2) | Rating is for the Investor Share class only; other classes may have different performance characteristics. |
* | Closed to new investors. |
Past performance is no guarantee of future results. Call 1-800-525-3713 or visit janus.com for current month end performance.
If an expense waiver was in effect, it may have had a material effect on the total return or yield, and therefore the ranking for the period.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
Janus Bond and Money Market Funds April 30, 2008 3
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Morningstar Ratingstm (unaudited)
Morningstar Ratingstm based on | ||||||||||||||||||||
total returns as of 4/30/08 | ||||||||||||||||||||
OVERALL RATING(1) | THREE-YEAR RATING | FIVE-YEAR RATING | TEN-YEAR RATING | |||||||||||||||||
CATEGORY | STARS | # OF FUNDS | STARS | # OF FUNDS | STARS | # OF FUNDS | STARS | # OF FUNDS | ||||||||||||
Janus Investment Fund | ||||||||||||||||||||
Janus Fund | Large Growth Funds | *** | 1458 | **** | 1458 | *** | 1205 | *** | 566 | |||||||||||
Janus Enterprise Fund | Mid-Cap Growth Funds | **** | 828 | ***** | 828 | ***** | 694 | *** | 311 | |||||||||||
Janus Orion Fund | Mid-Cap Growth Funds | ***** | 828 | ***** | 828 | ***** | 694 | N/A | 311 | |||||||||||
Janus Research Fund | Large Growth Funds | ***** | 1458 | ***** | 1458 | ***** | 1205 | **** | 566 | |||||||||||
Janus Triton Fund | Small Growth Funds | ***** | 688 | ***** | 688 | N/A | 560 | N/A | 270 | |||||||||||
Janus Twenty Fund(2) | Large Growth Funds | ***** | 1458 | ***** | 1458 | ***** | 1205 | ***** | 566 | |||||||||||
Janus Venture Fund(2) | Small Growth Funds | *** | 688 | *** | 688 | **** | 560 | *** | 270 | |||||||||||
Janus Global Life Sciences Fund | Specialty-Health Funds | **** | 183 | **** | 183 | **** | 166 | N/A | 54 | |||||||||||
Janus Global Technology Fund | Specialty-Technology Funds | **** | 264 | **** | 264 | **** | 235 | N/A | 69 | |||||||||||
Janus Balanced Fund | Moderate Allocation Funds | ***** | 937 | ***** | 937 | **** | 717 | ***** | 422 | |||||||||||
Janus Contrarian Fund | Large Blend Funds | ***** | 1695 | ***** | 1695 | ***** | 1316 | N/A | 630 | |||||||||||
Janus Fundamental Equity Fund | Large Blend Funds | ***** | 1695 | ***** | 1695 | **** | 1316 | ***** | 630 | |||||||||||
Janus Growth and Income Fund | Large Growth Funds | **** | 1458 | *** | 1458 | *** | 1205 | ***** | 566 | |||||||||||
INTECH Risk-Managed Stock Fund | Large Blend Funds | **** | 1695 | *** | 1695 | **** | 1316 | N/A | 630 | |||||||||||
Janus Mid Cap Value Fund — Institutional Shares(2) | Mid-Cap Value Funds | ***** | 301 | ***** | 301 | ***** | 217 | N/A | 66 | |||||||||||
Janus Mid Cap Value Fund — Investor Shares | Mid-Cap Value Funds | ***** | 301 | ***** | 301 | ***** | 217 | N/A | 66 | |||||||||||
Janus Small Cap Value Fund — Institutional Shares(2) | Small Value Funds | **** | 338 | **** | 338 | **** | 267 | **** | 102 | |||||||||||
Janus Small Cap Value Fund — Investor Shares(2) | Small Value Funds | **** | 338 | **** | 338 | *** | 267 | **** | 102 | |||||||||||
Janus Flexible Bond Fund | Intermediate-Term Bond Funds | **** | 984 | **** | 984 | **** | 832 | *** | 439 | |||||||||||
Janus High-Yield Fund | High Yield Bond Funds | *** | 470 | *** | 470 | ** | 402 | **** | 210 | |||||||||||
Janus Short-Term Bond Fund | Short-Term Bond Funds | **** | 388 | **** | 388 | **** | 290 | *** | 165 | |||||||||||
Janus Global Opportunities Fund | World Stock Funds | ** | 463 | * | 463 | ** | 390 | N/A | 201 | |||||||||||
Janus Global Research Fund | World Stock Funds | ***** | 463 | ***** | 463 | N/A | 390 | N/A | 201 | |||||||||||
Janus Overseas Fund(2) | Foreign Large Growth Funds | ***** | 184 | ***** | 184 | ***** | 158 | **** | 75 | |||||||||||
Janus Worldwide Fund | World Stock Funds | ** | 463 | ** | 463 | * | 390 | *** | 201 | |||||||||||
Janus Smart Portfolio — Growth | Moderate Allocation Funds | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||
Janus Smart Portfolio — Moderate | Moderate Allocation Funds | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||
Janus Smart Portfolio — Conservative | Conservative Allocation Funds | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||
Percent of funds rated 4 or 5 stars | 78.3% | 73.9% | 71.4% | 57.1% |
(1) | The Overall Morningstar RatingTM is derived from a weighted average of the performance figures associated with its three-, five-, and ten-year (if applicable) Morningstar RatingTM metrics. | |
(2) | Closed to new investors. |
Data presented reflects past performance, which is no guarantee of future results.
For each fund with at least a three-year history, Morningstar calculates a Morningstar RatingTM based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of the funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variation in the distribution percentages.)
© 2008 Morningstar, Inc. All Rights Reserved.
4 Janus Bond and Money Market Funds April 30, 2008
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Useful Information About Your Fund Report
Management Commentaries
The Management Commentaries in this report include valuable insight from each of the Funds’ managers as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
Please keep in mind that the opinions expressed by the Funds’ managers in the Management Commentaries are just that: opinions. They are a reflection of their best judgment at the time this report was compiled, which was April 30, 2008. As the investing environment changes, so could the managers’ opinions. These views are unique to each manager and aren’t necessarily shared by their fellow employees or by Janus in general.
Fund Expenses
We believe it’s important for our shareholders to have a clear understanding of Fund expenses and the impact they have on investment return.
The following is important information regarding each Fund’s Expense Example, which appears in each Fund’s Management Commentary within this Semiannual Report. Please refer to this information when reviewing the Expense Example for each Fund.
Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including redemption fees, where applicable (and any related exchange fees) and (2) ongoing costs, including management fees and other Fund expenses. The example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-month period from November 1, 2007 to April 30, 2008.
Actual Expenses
The first line of the table in each example provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of the table in each example provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Janus Capital Management LLC (“Janus Capital”) has contractually agreed to waive each Bond Fund’s total operating expenses, excluding brokerage commissions, interest, dividends, taxes and extraordinary expenses including, but not limited to, acquired fund fees and expenses, to certain limits until at least March 1, 2009. Janus Capital has agreed to waive one-half of its advisory fee for each Money Market Fund. Such waiver is voluntary and could change or be terminated at any time at the discretion of Janus Capital. Expenses in the examples reflect application of these waivers. Had the waivers not been in effect, your expenses would have been higher. More information regarding the waivers is available in the Funds’ prospectuses.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as redemption fees (where applicable). These fees are fully described in the prospectus. Therefore, the second line of each table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Janus Bond and Money Market Funds April 30, 2008 5
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Janus Flexible Bond Fund (unaudited) | Ticker: JAFIX |
Fund Snapshot
This bond fund continually adjusts its allocations among different types of bond investments in an attempt to take advantage of ever-changing market conditions.
![(GIBSON SMITH PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646psmithgi.jpg)
Gibson Smith
co-portfolio manager
![(DARRELL WATTERS PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646pwatterd.jpg)
Darrell Watters
co-portfolio manager
Performance Overview
During the six-month period ended April 30, 2008, Janus Flexible Bond Fund returned 4.75%, compared to a 4.08% return for the Fund’s benchmark, the Lehman Brothers Aggregate Bond Index.
Economic Update
Turmoil in the credit markets, uncertainty surrounding the near-term outlook for the U.S. economy and a weaker corporate profit picture made for a volatile and difficult market environment over the past several months. During this period of growing uncertainty, investors were attracted to U.S. Treasuries versus spread assets, helping to push interest rates lower across the yield curve. The escalation of the credit crisis and the Federal Reserve’s (Fed) aggressive interest rate reduction campaign, including an unprecedented inter-meeting cut of 75 basis points in January, helped to accelerate the downward move on interest rates for much of the period. The yield curve finished the six-month period ended April 30, 2008, with a much steeper slope as the yield on the 3-month Treasury bill fell by 253 basis points (2.53%) to 1.38% and the 10-year Treasury yield declined 74 basis points to 3.73%.
Additional subprime and mortgage related write-offs, slowing consumer spending and a softening labor market, accompanied by record commodity prices and rising inflation expectations, weighed on investor sentiment during the period. Interest rates reached their lows for the period and credit spreads moved to their widest levels in mid-March amid fears that credit conditions could suffer additional setbacks given a deteriorating liquidity position at investment bank Bear Stearns. Prior to that, periodic liquidity injections by the Fed failed to alleviate the stress in the credit markets. Financial markets stabilized after the Fed aggressively lowered the Federal Funds rate, expanded the collateral it would accept along with allowing broker/dealers to post collateral and borrow directly from the Fed and played an instrumental role in facilitating the saving of Bear Stearns by investment bank JP Morgan Chase. Without these moves the impact on the financial system and the overall economy would likely have been severe. By the end, the Fed had lowered its target interest rate from 4.50% to 2.00% during the period.
The decline in interest rates resulted in U.S. Treasuries outperforming other segments of the fixed-income markets during the period, but these moves were not without volatility. Inflation expectations rose given near-record commodity prices and the more accommodative stance taken by the Fed. But more moderate inflation readings late in the period tempered some of the anxiety. Meanwhile, spreads between mortgage-backed securities and high-yield and investment grade corporate debt to U.S. Treasuries increased to their widest levels on record, before declining a bit toward the end of the period. High-yield bonds posted modest declines in light of the significant widening in spreads during the period along side investment grade. The financials sector, which includes banks and broker/dealers, was among the weakest performing sectors for the period. The moves by the Fed stabilized the market, reducing liquidity premiums, helping spreads narrow late in the period and finish off well inside their widest levels reached before the bail out of Bear Stearns.
The uptrend in interest rates to close out the period can be attributed in part to investors beginning to look ahead to a possible economic recovery but more importantly to the rise of oil prices passing $110 per barrel during the period. Concerns about elevated inflationary pressures, soft consumer spending, the weak housing market and the lingering possibility of more write-downs in the financial sector, continued to weigh on the bond market.
U.S. Treasury and Bond Selection in the Credit Sector Aided Performance
Against the backdrop of uncertainty and risk aversion, the U.S. Treasury overweight position versus the benchmark provided the strongest contribution. We believe our bias toward holding a large position in U.S. Treasuries and other high-quality securities protected shareholders from much of the spread widening that occurred in the credit and mortgage areas of the market. This defensive position, in the interest of preservation of capital, proved timely.
Within our credit allocation, individual credits boosted performance. Among the top contributing credits over the period were Kinder Morgan Finance and Energy Future
6 Janus Bond and Money Market Funds April 30, 2008
Table of Contents
(unaudited)
Holdings formerly TXU Energy before it was taken private. We have a high level of conviction in Kinder Morgan’s management team, their business model and the stable cash flows generated from their business and believe they are committed to paying down debt and achieving solid investment grade ratings. Energy Future Holdings was a solid performer as this Texas-based utility company benefited from what we believe is its competitive position, its ability to generate strong free cash flows and reduce overall leverage.
Mortgage-Backed Securities Detracted from Returns
Our relative underweight position in mortgage-backed securities benefited us as spreads were widening and MBS spreads reached levels never seen before as concerns around the housing markets and the stability of Fannie Mae and Freddie Mac raised concerns in the sector. This underweight proved detrimental toward the end of the period, as the Fed engineered market stability. While volatility persisted among mortgage-backed securities, their total returns benefited from the generally higher yields compared to U.S. Treasuries. Given the recent, Fed-engineered, stability in the markets, we will continue to look for opportunities to reduce our underweight, but remain committed to emphasizing the highest quality segments of the market.
During the period, the top individual detractors were floating rate notes and bank loans such as those issued by National Semiconductor and Univision Communications. National Semiconductor’s floating rate notes suffered relative to other issues within the company’s capital structure as the company pre-announced an earnings miss in February. Though the company eventually met estimates with its March report, the floating rate notes continued to underperform in other parts of the capital structure as the floating rate portion of the market has been under significant stress during the credit crunch. Bank loans from Univision Communications suffered as the market shied away from newly-issued, highly-levered debt used to finance many buy outs prior to the summer’s credit malaise. These holdings were also significantly hurt by the very quick and large declines in short-term interest rates directed by the Fed. As the London Interbank Offered Rate (LIBOR) reset lower, these securities re-priced to reflect the new short-term interest rates.
Outlook
Looking ahead, we will be paying close attention to the employment picture, the availability of credit and consumer confidence, among other things. Should the labor market continue to soften amid continued weakness in the housing market and the turmoil within the financial system, declining credit creation and further slowing in consumer spending is likely. While the government stimulus checks could provide a temporary boost, the current de-leveraging of the U.S. consumer could take time to complete, possibly lessening the potential for a sharp rebound in economic activity. Inflation remains a concern for the markets as well, given record commodity prices and the Consumer Price Index’s recent elevated level. Although inflation is generally a lagging indicator and should ease with slowing economic growth, it deserves attention given its negative impact and the notion that inflation may limit the Fed’s options to further stimulate economic growth.
The housing market could be the real problem for the U.S. economy and future consumption, given its ties to interest rates and credit markets. If the end-of-period uptrend in long-term interest rates continues and the spreads between mortgage-backed securities fail to narrow, or even widen, further weakness in housing could result. Away from the housing market, many investment-grade corporate balance sheets remained in relatively great shape with large cash balances and low leverage metrics. Because the new facilities introduced by the Fed and the current administration make almost the entire investment-grade market eligible as collateral and thus inexpensively financed, liquidity and trading within fixed-income markets should improve. In terms of the high-yield market, more care must be taken, as certain areas and names could do very well while other areas, namely highly levered companies, could struggle amid the system-wide de-leveraging – the health of the economy being very important for the high-yield market. Lastly, while corporate default rates are likely to rise over the next year, we could see a significant increase in merger & acquisition activity with many of the small high-yield issuers being bought by cash rich organizations taking advantage of their strong balance sheets and high-equity valuations. This could have important implications for business capital expenditures and thus economic activity. While this may be some months away, we will closely monitor these situations and their potential effect on our overall portfolio positioning and individual holdings.
Thank you for entrusting your assets to us and your investment in Janus Flexible Bond Fund.
Janus Bond and Money Market Funds April 30, 2008 7
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Janus Flexible Bond Fund (unaudited)
Janus Flexible Bond Fund At A Glance
Fund Profile
April 30, 2008
Weighted Average Maturity | 6.3 Years | |
Average Effective Duration* | 4.3 Years | |
30-day Current Yield** | 3.39% | |
Weighted Average Fixed Income Credit Rating | AA | |
Number of Bonds/Notes | 196 |
* | A Theoretical measure of price volatility | |
** | Yield will fluctuate |
Ratings† Summary – (% of Net Assets)
April 30, 2008
AAA | 58.6% | |
AA | 6.1% | |
A | 4.2% | |
BBB | 11.1% | |
BB | 5.7% | |
B | 3.9% | |
Other | 10.4% |
† | Rated by Standard & Poor’s |
Significant Areas of Investment – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif18b07.gif)
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif18p07.gif)
Emerging markets comprised 0.1% of total net assets.
8 Janus Bond and Money Market Funds April 30, 2008
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(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif18m07.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratios – for the fiscal year ended October 31, 2007 | ||||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | Net Annual Fund | |||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | Operating Expenses | |||||||||
Janus Flexible Bond Fund | 4.75% | 7.28% | 4.40% | 5.26% | 7.45% | 0.80% | 0.80% | ||||||||
Lehman Brothers Aggregate Bond Index | 4.08% | 6.87% | 4.37% | 5.96% | 7.50%** | ||||||||||
Lipper Quartile | – | 1st | 1st | 2nd | 1st | ||||||||||
Lipper Ranking – based on total return for Intermediate Investment Grade Debt | – | 57/559 | 59/403 | 70/194 | 3/22 | ||||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
Janus Capital has contractually agreed to waive the Fund’s total operating expenses (excluding brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to a certain limit until at least March 1, 2009. The expense waiver is detailed in the Statement of Additional Information. Returns and yields shown include fee waivers, if any, and without such waivers, the Fund’s yield and returns would have been lower.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.) Contractual waivers agreed to by Janus Capital, where applicable, are included in the prospectus under “Net Annual Fund Operating Expenses.” All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund’s total operating expenses did not exceed the expense limit so no waivers were in effect for the most recent period presented.
See important disclosures on the next page.
Janus Bond and Money Market Funds April 30, 2008 9
Table of Contents
Janus Flexible Bond Fund (unaudited)
Funds that invest in bonds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds owned by the Fund. Unlike owning individual bonds, there are ongoing fees and expenses associated with owning shares of bond funds. The return of principal is not guaranteed due to net asset value fluctuation that is caused by changes in the price of specific bonds held in the Fund and selling of bonds within the Fund by the portfolio managers.
High-yield/high-risk bonds involve a greater risk of default and price volatility than U.S. Government and other high-quality bonds. High-yield/ high-risk bonds can experience sudden and sharp price swings which will affect net asset value.
Returns include reinvestment of dividends, distributions and capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
July 9, 1987 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the index. The index is unmanaged not available for direct investment; therefore performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – July 7, 1987 | |
** | The Lehman Brothers Aggregate Bond Index’s since inception returns are calculated from June 30, 1987. |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,047.50 | $ | 3.87 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.08 | $ | 3.82 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.76%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
10 Janus Bond and Money Market Funds April 30, 2008
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Janus Flexible Bond Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Bank Loan – 0.2% | ||||||||
Satellite Telecommunications – 0.2% | ||||||||
$ | 1,414,000 | INTELSAT Bermuda, Ltd., 5.20% bank loan, due 2/3/14‡ (cost $1,407,994) | $ | 1,408,698 | ||||
Corporate Bonds – 33.0% | ||||||||
Agricultural Operations – 0.7% | ||||||||
Bunge Limited Finance, Co.: | ||||||||
1,406,000 | 4.375%, company guaranteed notes due 12/15/08 | 1,409,176 | ||||||
4,575,000 | 5.875%, company guaranteed notes due 5/15/13 | 4,585,093 | ||||||
5,994,269 | ||||||||
Applications Software – 0.2% | ||||||||
1,930,000 | Intuit, Inc., 5.75% senior unsecured notes, due 3/15/17 | 1,870,019 | ||||||
Automotive – Cars and Light Trucks – 0.4% | ||||||||
4,600,000 | �� | Ford Motor Co., 7.45% senior unsecured notes, due 7/16/31 | 3,438,500 | |||||
Beverages – Non-Alcoholic – 0.8% | ||||||||
Dr Pepper Snapple Group: | ||||||||
2,825,000 | 6.12%, senior notes, due 5/1/13 (144A) | 2,889,949 | ||||||
1,900,000 | 6.82%, senior notes, due 5/1/18 (144A) | 1,970,969 | ||||||
2,250,000 | 7.45%, notes, due 5/1/38 (144A) | 2,408,846 | ||||||
7,269,764 | ||||||||
Brewery – 0.1% | ||||||||
600,000 | Anheuser Bush COS, Inc., 5.50% senior unsecured notes, due 1/15/18 | 610,735 | ||||||
Cable Television – 1.4% | ||||||||
Comcast Corp.: | ||||||||
4,350,000 | 6.30%, company guaranteed notes due 11/15/17 | 4,519,985 | ||||||
4,350,000 | 6.95%, company guaranteed notes due 8/15/37 | 4,597,758 | ||||||
3,843,000 | Cox Communications, Inc., 4.625% senior unsecured notes, due 1/15/10 | 3,826,072 | ||||||
12,943,815 | ||||||||
Casino Hotels – 0% | ||||||||
375,000 | Seminole Hard Rock Entertainment 8.19438%, senior secured notes due 3/15/14 (144A)‡,§ | 314,063 | ||||||
Cellular Telecommunications – 0.2% | ||||||||
1,592,000 | Rogers Wireless, Inc., 6.375% senior secured notes, due 3/1/14 | 1,630,208 | ||||||
Chemicals – Diversified – 0.5% | ||||||||
4,325,000 | E.I. Du Pont De Nemours, 5.00% senior unsecured notes, 11/5/13 | 4,413,260 | ||||||
Commercial Banks – 0.3% | ||||||||
2,275,000 | Barclays PLC, 7.70% notes, due 4/25/18 (144A)‡ | 2,354,034 | ||||||
Commercial Services – 0.6% | ||||||||
2,300,000 | Aramark Corp., 8.50% senior unsecured notes, due 2/1/15 | 2,397,750 | ||||||
3,028,000 | Iron Mountain, Inc., 8.625% company guaranteed notes, due 4/1/13 | 3,080,990 | ||||||
5,478,740 | ||||||||
Consumer Products – Miscellaneous – 0.3% | ||||||||
Clorox Co.: | ||||||||
1,046,000 | 5.00%, senior unsecured notes due 3/1/13 | 1,033,163 | ||||||
1,850,000 | 5.95%, senior unsecured notes due 10/15/17 | 1,855,219 | ||||||
2,888,382 | ||||||||
Containers – Metal and Glass – 0.2% | ||||||||
1,705,000 | Owens-Illinois, Inc., 7.35% senior notes, due 5/15/08 | 1,705,000 | ||||||
Data Processing and Management – 0.5% | ||||||||
Fiserv, Inc.: | ||||||||
2,140,000 | 6.125%, company guaranteed notes due 11/20/15 | 2,174,167 | ||||||
2,140,000 | 6.80%, company guaranteed notes due 11/20/17 | 2,181,987 | ||||||
4,356,154 | ||||||||
Diversified Financial Services – 0.9% | ||||||||
General Electric Capital Corp.: | ||||||||
5,480,000 | 4.875%, senior unsecured notes due 10/21/10 | 5,616,759 | ||||||
2,600,000 | 4.375%, senior unsecured notes due 11/21/11 | 2,620,836 | ||||||
8,237,595 | ||||||||
Diversified Operations – 2.0% | ||||||||
Dover Corp.: | ||||||||
1,543,000 | 5.45%, senior unsecured notes due 3/15/18 | 1,541,718 | ||||||
773,000 | 6.60%, senior unsecured notes due 3/15/38 | 810,395 | ||||||
8,007,000 | General Electric Co., 5.25% senior unsecured notes, due 12/6/17 | 7,968,462 | ||||||
2,866,000 | Kansas City Southern, 7.50% company guaranteed notes, due 6/15/09 | 2,937,650 | ||||||
1,475,000 | SPX Corp., 7.625% senior notes, due 12/15/14 (144A) | 1,541,375 | ||||||
2,750,000 | Textron, Inc., 6.375% senior unsecured notes, due 11/15/08 | 2,793,123 | ||||||
17,592,723 | ||||||||
Electric – Generation – 0.8% | ||||||||
2,300,000 | Allegheny Energy Supply Company LLC 8.25%, senior unsecured notes due 4/15/12 (144A)‡ | 2,449,500 | ||||||
4,870,000 | Edison Mission Energy, 7.00% senior unsecured notes, due 5/15/17 | 4,918,700 | ||||||
7,368,200 | ||||||||
Electric – Integrated – 4.2% | ||||||||
4,588,000 | CMS Energy Corp., 6.30% senior unsecured notes, due 2/1/12 | 4,642,129 | ||||||
770,000 | Consumers Energy Company, 5.65% first mortgage notes, due 9/15/18 | 769,282 | ||||||
Duke Energy Carolinas: | ||||||||
1,100,000 | 5.10%, company first mortgage notes due 4/15/18 | 1,093,109 | ||||||
1,525,000 | 6.05%, company first mortgage notes due 4/15/38 | 1,539,513 | ||||||
1,225,000 | Energy Future Holdings, 10.875% company guaranteed notes due 11/1/17 (144A) | 1,304,625 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond and Money Market Funds April 30, 2008 11
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Janus Flexible Bond Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Electric – Integrated – (continued) | ||||||||
$ | 1,900,000 | MidAmerican Energy Holdings Co., 3.50% senior notes, due 5/15/08 | $ | 1,899,662 | ||||
4,017,000 | Monongahela Power Co., 6.70% first mortgage notes, due 6/15/14 | 4,326,329 | ||||||
1,800,000 | Pacific Gas and Electric Co., 4.80% senior unsecured notes, due 3/1/14 | 1,794,371 | ||||||
1,425,000 | Pacificorp, 6.25% first mortgage notes, due 10/15/37 | 1,457,749 | ||||||
4,330,000 | Southern California Edison Co., 7.625% senior unsecured notes, due 1/15/10 | 4,528,210 | ||||||
Texas Competitive Electric Holdings Co. LLC: | ||||||||
1,785,000 | 10.25%, company guaranteed notes due 11/1/15 (144A) | 1,860,863 | ||||||
4,348,000 | 10.25%, company guaranteed notes due 11/1/15 (144A) | 4,532,790 | ||||||
3,993,000 | Virginia Electric & Power Co., 5.10% senior unsecured notes, due 11/30/12 | 4,059,495 | ||||||
3,965,000 | West Penn Power Co., 5.95% first mortgage notes due 12/15/17 (144A) | 4,048,765 | ||||||
37,856,892 | ||||||||
Electronic Components – Semiconductors – 0.4% | ||||||||
3,600,000 | National Semiconductor Corp., 5.94438% senior unsecured notes, due 6/15/10‡,ß | 3,324,308 | ||||||
Fiduciary Banks – 0.2% | ||||||||
2,230,000 | Bank of New York Mellon, 4.50% senior unsecured notes, due 4/1/13# | 2,222,677 | ||||||
Finance – Consumer Loans – 0.2% | ||||||||
1,579,000 | John Deere Capital Corp., 4.875% senior unsecured notes, due 10/15/10 | 1,617,614 | ||||||
Finance – Investment Bankers/Brokers – 4.0% | ||||||||
Citigroup, Inc.: | ||||||||
2,300,000 | 6.125%, senior unsecured notes due 11/21/17 | 2,334,583 | ||||||
1,200,000 | 6.125%, subordinated notes due 8/25/36 | 1,101,486 | ||||||
Goldman Sachs Group, Inc.: | ||||||||
2,175,000 | 5.95%, senior unsecured notes due 1/18/18 | 2,170,850 | ||||||
5,650,000 | 6.15%, senior notes due 4/1/18 | 5,715,269 | ||||||
4,461,000 | JP Morgan Chase & Co, 6.00% senior notes, due 1/15/18# | 4,623,840 | ||||||
Lehman Brothers Holdings: | ||||||||
4,575,000 | 6.00%, company senior notes due 7/19/12 | 4,619,519 | ||||||
4,850,000 | 6.875%, company notes due 5/2/18 | 4,960,299 | ||||||
Morgan Stanley Co.: | ||||||||
5,535,000 | 5.95%, senior unsecured notes due 12/28/17 | 5,482,716 | ||||||
4,600,000 | 6.625%, senior unsecured notes due 4/1/18 | 4,769,367 | ||||||
35,777,929 | ||||||||
Food – Diversified – 0.3% | ||||||||
1,621,000 | General Mills, Inc., 5.20% senior unsecured notes, 3/17/15 | 1,629,447 | ||||||
1,150,000 | Kellogg Company, 4.25% senior unsecured notes, due 3/6/13 | 1,130,708 | ||||||
2,760,155 | ||||||||
Food – Retail – 0.4% | ||||||||
1,050,000 | Kroger Co., 6.15% company guaranteed notes, due 1/15/20 | 1,093,470 | ||||||
Stater Brothers Holdings, Inc.: | ||||||||
1,010,000 | 8.125%, company guaranteed notes due 6/15/12 | 1,025,150 | ||||||
1,700,000 | 7.75%, company guaranteed notes due 4/15/15 | 1,704,250 | ||||||
3,822,870 | ||||||||
Food – Wholesale/Distribution – 0.4% | ||||||||
3,650,000 | Supervalu, Inc., 7.50% senior unsecured notes, due 11/15/14 | 3,777,750 | ||||||
Gas – Distribution – 0.1% | ||||||||
1,030,000 | Southern Star Central Corp., 6.00% notes, due 6/1/16 (144A) | 1,022,275 | ||||||
Independent Power Producer – 0.5% | ||||||||
Reliant Energy, Inc.: | ||||||||
3,237,000 | 7.625%, senior unsecured notes due 6/15/14 | 3,366,480 | ||||||
1,125,000 | 7.875%, senior unsecured notes due 6/15/17# | 1,172,813 | ||||||
4,539,293 | ||||||||
Medical – Hospitals – 0.5% | ||||||||
HCA, Inc.: | ||||||||
2,300,000 | 6.50%, senior unsecured notes due 2/15/16 | 2,058,500 | ||||||
2,605,000 | 9.25%, senior secured notes due 11/15/16 | 2,800,375 | ||||||
4,858,875 | ||||||||
Metal – Diversified – 0.2% | ||||||||
1,925,000 | Freeport-McMoRan Copper & Gold, Inc. 8.375%, senior unsecured notes due 4/1/17 | 2,127,125 | ||||||
Multimedia – 0.7% | ||||||||
4,410,000 | Walt Disney Company, 4.70% senior unsecured notes, due 12/1/12 | 4,487,880 | ||||||
Viacom, Inc.: | ||||||||
850,000 | 6.25%, senior unsecured notes due 4/30/16 | 858,971 | ||||||
925,000 | 6.125%, senior unsecured notes due 10/5/17 | 927,827 | ||||||
6,274,678 | ||||||||
Non-Hazardous Waste Disposal – 0.6% | ||||||||
2,878,000 | Allied Waste Industries, Inc., 6.50% secured notes, due 11/15/10 | 2,903,183 | ||||||
2,400,000 | Waste Management, Inc., 7.375% senior unsecured notes, due 8/1/10 | 2,538,864 | ||||||
5,442,047 | ||||||||
See Notes to Schedules of Investments and Financial Statements.
12 Janus Bond and Money Market Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Office Automation and Equipment – 0.4% | ||||||||
Xerox Corp.: | ||||||||
$ | 1,524,000 | 5.65%, senior notes, due 5/15/13 | $ | 1,527,929 | ||||
2,200,000 | 6.35%, senior notes, due 5/15/18 | 2,211,112 | ||||||
3,739,041 | ||||||||
Oil Companies – Exploration and Production – 1.9% | ||||||||
4,573,000 | Encana, Corp., 6.50% unsubordinated notes, due 2/1/38 | 4,687,795 | ||||||
Forest Oil Corp.: | ||||||||
300,000 | 8.00%, company guaranteed notes due 12/15/11 | 316,875 | ||||||
1,200,000 | 7.25%, senior unsecured notes due 6/15/19 (144A) | 1,239,000 | ||||||
3,083,000 | 7.25%, company guaranteed notes due 6/15/19 | 3,183,197 | ||||||
2,208,000 | Kerr-McGee Corp., 6.875% company guaranteed notes, due 9/15/11 | 2,344,945 | ||||||
XTO Energy Inc.: | ||||||||
2,100,000 | 5.50%, senior unsecured notes due 6/15/18 | 2,084,057 | ||||||
1,311,000 | 6.10%, senior unsecured notes due 4/1/36 | 1,271,639 | ||||||
2,100,000 | 6.375%, senior unsecured notes due 6/15/38 | 2,118,436 | ||||||
17,245,944 | ||||||||
Pipelines – 2.3% | ||||||||
4,575,000 | El Paso Corp., 7.00% senior unsecured notes, due 6/15/17 | 4,774,383 | ||||||
Kinder Morgan Energy Partners: | ||||||||
750,000 | 5.95%, senior unsecured notes due 2/15/18 | 743,892 | ||||||
750,000 | 6.95%, senior unsecured notes due 1/15/38 | 760,320 | ||||||
9,045,000 | Kinder Morgan Finance Co., 5.70% company guaranteed notes, due 1/5/16 | 8,660,588 | ||||||
1,125,000 | Plains All American Pipeline, 6.50% senior unsecured notes due 5/1/2018 (144A) | 1,148,956 | ||||||
Teppco Partners, L.P.: | ||||||||
2,225,000 | 6.65%, corporate notes, due 4/15/18 | 2,239,133 | ||||||
2,225,000 | 7.55%, corporate bonds, due 4/15/38 | 2,380,080 | ||||||
20,707,352 | ||||||||
Reinsurance – 0.2% | ||||||||
1,400,000 | Berkshire Hathaway, Inc., 4.625% company guaranteed notes, due 10/15/13 | 1,422,121 | ||||||
Retail – Discount – 0.3% | ||||||||
Wal-Mart Stores, Inc.: | ||||||||
1,525,000 | 4.25%, company senior notes due 4/15/13 | 1,531,184 | ||||||
1,525,000 | 6.20%, company senior notes due 4/15/38 | 1,552,142 | ||||||
3,083,326 | ||||||||
Special Purpose Entity – 1.0% | ||||||||
Pearson Dollar Finance PLC: | ||||||||
2,200,000 | 5.50%, company guaranteed notes due 5/6/13 (144A) | 2,217,182 | ||||||
2,200,000 | 6.25%, company guaranteed notes due 5/6/18 (144A) | 2,234,144 | ||||||
Petroplus Finance, Ltd.: | ||||||||
1,930,000 | 6.75%, company guaranteed notes due 5/1/14 (144A) | 1,814,200 | ||||||
1,412,000 | 7.00%, company guaranteed notes due 5/1/17 (144A) | 1,313,160 | ||||||
1,390,000 | Source Gas LLC, 5.90% senior unsecured notes due 4/1/17 (144A)§ | 1,332,909 | ||||||
8,911,595 | ||||||||
Steel – Producers – 0.5% | ||||||||
4,591,000 | Steel Dynamics, Inc., 7.75% senior notes, due 4/15/16 (144A) | 4,694,298 | ||||||
Super-Regional Banks – 1.7% | ||||||||
Bank of America Corp.: | ||||||||
4,625,000 | 4.90%, notes, due 5/1/13 | 4,635,082 | ||||||
4,625,000 | 5.65%, notes, due 5/1/18 | 4,628,423 | ||||||
1,135,000 | Bank of America N.A., 6.00% company subordinated notes due 10/15/36 | 1,121,221 | ||||||
4,425,000 | Wells Fargo Co., 5.625% senior unsecured notes, due 12/11/17 | 4,561,051 | ||||||
14,945,777 | ||||||||
Telephone – Integrated – 1.2% | ||||||||
1,650,000 | AT&T, Inc., 5.50% senior unsecured notes, due 2/1/18 | 1,649,723 | ||||||
2,950,000 | BellSouth Corp., 4.75% senior unsecured notes, due 11/15/12 | 2,945,203 | ||||||
4,686,000 | Qwest Communications International 7.25%, company guaranteed notes due 2/15/11‡ | 4,650,855 | ||||||
1,275,000 | Telefonica Emisiones S.A.U., 5.984% company guaranteed notes, due 6/20/11 | 1,301,927 | ||||||
10,547,708 | ||||||||
Transportation – Railroad – 0.8% | ||||||||
1,850,000 | Burlington North Santa Fe, 5.75% senior unsecured notes, due 3/15/18 | 1,876,255 | ||||||
675,000 | Kansas City Southern de Mexico, 7.375% senior notes, due 6/1/14 (144A) | 640,406 | ||||||
4,445,000 | Union Pacific Corp., 5.70% senior unsecured notes, due 8/15/18 | 4,496,309 | ||||||
7,012,970 | ||||||||
Transportation – Services – 0.1% | ||||||||
1,270,000 | Fedex Corp., 5.50% company guaranteed notes, due 8/15/09 | 1,286,599 | ||||||
Total Corporate Bonds (cost $294,611,570) | 297,486,680 | |||||||
Preferred Stock – 0% | ||||||||
Savings/Loan/Thrifts – 0% | ||||||||
7,360 | Chevy Chase Bank FSB, 8.00% (cost $184,000) | 177,376 | ||||||
Mortgage Backed Securities – 17.7% | ||||||||
U.S. Government Agencies – 15.4% | ||||||||
Fannie Mae: | ||||||||
$ | 623,148 | 6.50%, due 11/1/17 | 648,457 | |||||
1,874,333 | 5.00%, due 11/1/18 | 1,893,992 | ||||||
2,714,411 | 4.50%, due 5/1/19 | 2,696,227 | ||||||
490,458 | 5.50%, due 8/1/19 | 501,426 | ||||||
189,696 | 5.50%, due 9/1/19 | 194,138 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond and Money Market Funds April 30, 2008 13
Table of Contents
Janus Flexible Bond Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
U.S. Government Agencies – (continued) | ||||||||
$ | 1,211,237 | 5.50%, due 9/1/19 | $ | 1,238,324 | ||||
Fannie Mae: | ||||||||
468,766 | 4.50%, due 4/1/20 | 464,454 | ||||||
2,005,336 | 6.00%, due 10/1/21 | 2,067,357 | ||||||
2,345,916 | 5.00%, due 4/1/23 | 2,359,478 | ||||||
2,629,003 | 5.50%, due 9/1/24 | 2,666,094 | ||||||
632,407 | 7.00%, due 11/1/28 | 673,653 | ||||||
820,049 | 6.50%, due 2/1/31 | 855,160 | ||||||
1,549,253 | 7.00%, due 2/1/32 | 1,650,296 | ||||||
5,295,765 | 6.00%, due 10/1/32 | 5,446,592 | ||||||
4,490,572 | 5.50%, due 2/1/33 | 4,533,494 | ||||||
1,287,227 | 6.50%, due 3/1/33 | 1,339,978 | ||||||
3,214,879 | 5.50%, due 11/1/33 | 3,243,598 | ||||||
3,869,148 | 5.00%, due 4/1/34 | 3,811,278 | ||||||
5,988,645 | 6.00%, due 7/1/34 | 6,174,073 | ||||||
516,242 | 6.50%, due 9/1/34 | 543,932 | ||||||
811,142 | 5.50%, due 11/1/34 | 817,881 | ||||||
5,405,544 | 5.50%, due 11/1/34 | 5,450,454 | ||||||
4,600,000 | 5.00%, due 5/15/35Ç | 4,518,065 | ||||||
13,850,000 | 5.50%, due 5/15/35Ç | 13,923,570 | ||||||
1,613,003 | 6.50%, due 1/1/36 | 1,671,040 | ||||||
4,008,110 | 6.00%, due 3/1/36 | 4,102,223 | ||||||
883,709 | 6.00%, due 8/1/36 | 904,459 | ||||||
1,449,975 | 6.00%, due 1/1/37 | 1,484,022 | ||||||
4,575,000 | 5.50%, due 6/1/37 | 4,604,890 | ||||||
4,605,000 | 6.00%, due 8/25/37Ç | 4,707,176 | ||||||
1,051,429 | 4.50%, due 5/1/38Ç | 1,000,500 | ||||||
3,548,571 | 4.50%, due 5/1/38Ç | 3,376,685 | ||||||
Federal Home Loan Bank System: | ||||||||
756,072 | 5.50%, due 12/1/34 | 763,062 | ||||||
2,707,864 | 5.50%, due 12/1/34 | 2,732,900 | ||||||
Freddie Mac: | ||||||||
946,382 | 5.50%, due 1/1/16 | 968,553 | ||||||
1,652,748 | 5.50%, due 1/1/18 | 1,691,745 | ||||||
4,600,000 | 4.50%, due 5/15/20Ç | 4,535,315 | ||||||
1,153,069 | 5.50%, due 2/1/21 | 1,175,024 | ||||||
1,114,021 | 5.00%, due 4/1/21 | 1,121,862 | ||||||
1,639,724 | 6.00%, due 11/1/33 | 1,685,630 | ||||||
2,690,301 | 6.00%, due 2/1/34 | 2,767,956 | ||||||
797,020 | 6.50%, due 7/1/34 | 835,189 | ||||||
4,625,000 | 5.00%, due 5/15/35Ç | 4,544,063 | ||||||
7,944,472 | 5.00%, due 10/1/35 | 7,821,794 | ||||||
7,382,742 | 5.00%, due 11/1/35 | 7,268,738 | ||||||
2,240,000 | 5.50%, due 02/01/38 | 2,256,510 | ||||||
Ginnie Mae: | ||||||||
2,574,529 | 6.00%, due 10/20/34 | 2,649,295 | ||||||
1,215,474 | 6.50%, due 2/20/35 | 1,264,555 | ||||||
4,593,665 | 5.50%, due 3/20/35 | 4,654,387 | ||||||
138,299,544 | ||||||||
U.S. Government Agency Variable Notes – 2.3% | ||||||||
Fannie Mae: | ||||||||
5,977,103 | 5.035%, due 1/1/33 | 6,000,976 | ||||||
2,860,345 | 4.566%, due 4/1/33 | 2,903,893 | ||||||
2,108,102 | 4.605%, due 12/1/34 | 2,130,233 | ||||||
4,744,107 | 5.585%, due 11/1/36 | 4,818,479 | ||||||
1,505,786 | Federal Home Loan Bank System, 5.713% due 3/1/37 | 1,532,411 | ||||||
3,514,892 | Freddie Mac, 3.756% due 7/1/34 | 3,540,694 | ||||||
20,926,686 | ||||||||
Total Mortgage Backed Securities (cost $158,174,967) | 159,226,230 | |||||||
U.S. Treasury Notes/Bonds – 42.8% | ||||||||
U.S. Treasury Notes/Bonds: | ||||||||
25,075,000 | 4.875%, due 5/31/09** | 25,842,922 | ||||||
18,369,000 | 4.625%, due 7/31/09# | 18,953,079 | ||||||
20,147,000 | 3.25%, due 12/31/09**,# | 20,485,409 | ||||||
26,952,000 | 2.125%, due 1/31/10**,# | 26,899,363 | ||||||
7,320,000 | 2.00%, due 2/28/10# | 7,287,404 | ||||||
33,000 | 1.75%, due 3/31/10# | 32,688 | ||||||
85,342,000 | 4.50%, due 5/15/10**,# | 89,235,728 | ||||||
8,350,000 | 5.125%, due 6/30/11** | 8,997,776 | ||||||
16,880,000 | 4.50%, due 11/30/11# | 17,941,600 | ||||||
27,310,000 | 4.625%, due 2/29/12# | 29,117,157 | ||||||
44,151,000 | 4.75%, due 5/31/12**,# | 47,310,534 | ||||||
15,934,000 | 4.625%, due 7/31/12# | 16,997,101 | ||||||
1,911,000 | 3.875%, due 10/31/12# | 1,982,066 | ||||||
1,849,000 | 3.375%, due 11/30/12# | 1,876,879 | ||||||
4,338,000 | 3.625%, due 12/31/12# | 4,454,584 | ||||||
5,657,000 | 2.875%, due 1/31/13# | 5,620,320 | ||||||
343,000 | 2.75%, due 2/28/13# | 338,605 | ||||||
53,000 | 2.50%, due 3/31/13# | 51,716 | ||||||
1,247,000 | 4.625%, due 2/15/17# | 1,334,095 | ||||||
1,365,000 | 8.875%, due 8/15/17# | 1,896,816 | ||||||
1,184,000 | 3.50%, due 2/15/18# | 1,158,840 | ||||||
1,443,000 | 8.875%, due 2/15/19 | 2,048,046 | ||||||
9,360,000 | 7.25%, due 8/15/22# | 12,211,880 | ||||||
18,461,000 | 6.25%, due 8/15/23 | 22,218,109 | ||||||
1,220,000 | 4.75%, due 2/15/37# | 1,271,183 | ||||||
12,017,000 | 5.00%, due 5/15/37# | 13,023,424 | ||||||
8,544,000 | 4.375%, due 2/15/38 | 8,377,794 | ||||||
Total U.S. Treasury Notes/Bonds (cost $372,597,850) | 386,965,118 | |||||||
Money Markets – 11.0% | ||||||||
4,703,082 | Janus Institutional Cash Management Fund – Institutional Shares, 2.82% | 4,703,082 | ||||||
94,609,110 | Janus Institutional Money Market Fund – Institutional Shares, 2.74% | 94,609,110 | ||||||
Total Money Markets (cost $99,312,192) | 99,312,192 | |||||||
Other Securities – 24.2% | ||||||||
84,117,770 | Allianz Dresdner Daily Asset Fund† | 84,117,770 | ||||||
34,550,137 | Repurchase Agreements† | 34,550,137 | ||||||
Time Deposits: | ||||||||
8,334,197 | Abbey National Treasury, N.A., 2.375% 5/1/08† | 8,334,197 | ||||||
3,718,364 | ABN-AMRO Bank N.V., N.A., 2.26% 5/1/08† | 3,718,364 | ||||||
4,336,955 | BNP Paribas, New York, N.A., 2.50% 5/1/08† | 4,336,955 | ||||||
8,673,910 | Calyon, N.A., 2.50%, 5/1/08† | 8,673,910 | ||||||
3,018,832 | Chase Bank USA, N.A., 2.25%, 5/1/08† | 3,018,832 | ||||||
3,815,204 | Danske Bank, Cayman Islands, N.A. 2.53%, 5/1/08† | 3,815,204 | ||||||
6,071,737 | Deutsche Bank A.G., N.A., 2.30%, 5/1/08† | 6,071,737 | ||||||
8,673,910 | Dexia Bank S.A. Brussels, N.A., 2.50% 5/1/08† | 8,673,910 |
See Notes to Schedules of Investments and Financial Statements.
14 Janus Bond and Money Market Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Other Securities – (continued) | ||||||||
8,673,910 | ING Bank N.V., Amsterdam, N.A. 2.4375%, 5/1/08† | $ | 8,673,910 | |||||
8,673,910 | Lloyd’s TSB Group PLC, N.A., 2.45% 5/1/08† | 8,673,910 | ||||||
1,303,082 | Natixis, N.A., 2.38%, 5/1/08† | 1,303,082 | ||||||
8,673,910 | Natixis, N.A., 2.43%, 5/1/08† | 8,673,910 | ||||||
8,673,910 | Nordea Bank Finland PLC, N.A., 2.50% 5/1/08† | 8,673,910 | ||||||
8,562,466 | Svenska Handelsbanken, N.A., 2.40% 5/1/08† | 8,562,466 | ||||||
8,673,910 | Wells Fargo Bank, N.A., 2.375%, 5/1/08† | 8,673,910 | ||||||
Total Other Securities (cost $218,546,114) | 218,546,114 | |||||||
Total Investments (total cost $1,144,834,687) – 128.9% | 1,163,122,408 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (28.9)% | (261,081,153) | |||||||
Net Assets – 100% | $ | 902,041,255 | ||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Canada | $ | 8,660,588 | 0.7% | |||||
China | 1,313,160 | 0.1% | ||||||
Spain | 1,301,927 | 0.1% | ||||||
United Kingdom | 2,354,034 | 0.2% | ||||||
United States†† | 1,149,492,699 | 98.9% | ||||||
Total | $ | 1,163,122,408 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (71.5% excluding Short-Term Securities and Other Securities) |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond and Money Market Funds April 30, 2008 15
Table of Contents
Janus High-Yield Fund (unaudited) | Ticker: JAHYX |
Fund Snapshot
This bond fund strives to provide exposure to the best income and total return opportunities in the high-yield market.
![(GIBSON SMITH PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646psmithgi.jpg)
Gibson Smith
portfolio manager
Performance Overview
For the six-month period ended April 30, 2008, Janus High-Yield Fund returned (1.65)%, compared to a (0.74)% return of its benchmark, the Lehman Brothers High-Yield Bond Index.
Economic Update
Turmoil in the credit markets, uncertainty surrounding the near-term outlook for the U.S. economy and a weaker corporate profit picture made for a volatile and difficult market environment over the past several months. During this period of growing uncertainty, investors were attracted to less risky U.S. Treasuries, at the expense of the high-yield market, helping to push interest rates lower across the yield curve. The Federal Reserve’s (Fed) aggressive interest rate reductions, including an unprecedented inter-meeting cut of 75 basis points drop in January, facilitated a significant decline in interest rates for much of the period. The yield curve finished the six-month period ended April 30, 2008, with a much steeper slope as the yield on the 3-month Treasury bill fell by 253 basis points (2.53%) to 1.38% and the 10-year Treasury yield declined 74 basis points to 3.73%.
Significant write-offs related to loose standards on mortgage, credit and subprime lending, slowing consumer spending and a softening labor market, accompanied by record commodity prices and rising inflation expectations, weighed on investor sentiment during the period. Interest rates reached their lows for the period and credit spreads moved to their widest levels in mid-March amid fears that credit conditions could suffer another setback given a deteriorating liquidity position at investment bank Bear Stearns along with problems at other broker/dealers and regional banks. Prior to that, periodic liquidity injections by the Fed failed to alleviate the stress in the funding and credit markets. Financial markets stabilized somewhat after the Fed aggressively lowered the Federal Funds rate, expanded the collateral it would accept on repurchase agreements, allowed broker/dealers to post collateral and borrow directly from the Fed and ultimately facilitated the purchase of near-defunct Bear Stearns by JP Morgan Chase. Had the Fed not acted quickly and decisively on all of these fronts the impact on the financial system and the overall economy would likely have been very severe. By the end, the Fed had lowered its target interest rate from 4.50% to 2.00% during the period and provided significant liquidity to help ease the strains on the funding markets. These actions led to a significant decline in liquidity premiums and a return of some risk taking in the markets.
The decline in interest rates helped U.S. Treasuries outperform other segments of the bond market during the period, but these moves were not without volatility. Inflation expectations rose given near-record commodity prices and the more accommodative stance taken by the Fed. But more moderate inflation readings late in the period tempered some of the inflation anxieties in the market. Meanwhile, spreads between high-yield and investment-grade corporate debt to U.S. Treasuries widened, rising to levels not seen since the bursting of the NASDAQ bubble in 2001, before declining toward the end of the period. High-yield bonds posted modest declines, in light of the spread widening, during the period. Away from the pressure on the high-yield market, the financials sector was among the weakest performing within the credit markets. The moves by the Fed, resulting in increased market stability and declining liquidity premiums, helped spreads narrow late in the period and finish off their widest levels. Broker/dealers and banks staged a significant recovery in their spreads as the overall liquidity in the credit markets improved. This served as a positive for the high-yield market.
While spreads recovered, the uptrend in interest rates to close out the period can be attributed in part to investors beginning to look ahead to a possible economic recovery but more importantly the escalation of energy and commodity prices over the period leading to fears around rising inflation. As I write, oil has surpassed $110 a barrel and commodity prices hit new highs. Concerns about elevated inflationary pressures, soft consumer spending, the weak housing market and the lingering possibility of more write-downs, continued to weigh on the bond market.
Focus on More Liquid Credits Proved a Short-Term Negative
Early in the correction I saw significant pressure on the riskiest credits within the high-yield market. I was quick to reduce many of the riskier positions within the Fund, upgrading to higher quality more liquid names. My view was that rising liquidity premiums, due to the fundamental deterioration of the bank and brokerage sector, would put significant pressure on the high-yield market. Our expectation of spread widening
16 Janus Bond and Money Market Funds April 30, 2008
Table of Contents
(unaudited)
played out through the purchase of Bear Stearns. I focused on holding companies with strong fundamentals and high-liquidity positions. These securities, while fundamentally safe, tend to suffer the brunt of the initial sell-off as market participants look to unload their most marketable bonds first. I saw the effects of this early in the correction. Nonetheless, I believe these more stable, fundamentally better issues should perform well on a relative basis as long as uncertainty remains in the credit markets. As the correction accelerated, I saw the more illiquid and lower-rated names push to the downside, with many individual credits trading down 10-15 points. I avoided many of the names that saw the largest price declines (less liquid, lower quality). Post the bail out of Bear Stearns, risk taking returned to the market and liquidity premiums collapsed as the perception that the Fed would remedy any new problems presented in the market. This led to a snap back in these credits and overall improvement in the market. While remaining in a defensive position, I did not capture the upside generated by the higher-risk, lower-quality positions in the market.
The largest detractor from performance for the period was a bank loan issued by Travelport Holdings. As a travel company providing reservation services to consumers and businesses, rising oil prices and concerns about a slowing economy put downward pressure on expectations for the company’s results. I held Travelport based on my view that a near-term liquidity event would give the company the opportunity to pay down existing debt. Given the credit market conditions at the end of the period, such an event is likely pushed further into the future. Negative expectations around the liquidity event as well as the bank loan’s lower position in the capital structure also pressured the security.
Another detractor was R.H. Donnelley. Concerns about the macro-environment pressured expectations for R.H. Donnelley as a significant portion of its revenues come from small business advertising. Historically the yellow page businesses have proven to be very recession resistant, providing stable cash flows. The company surprised the market with an earnings pre-announcement that drove the shares lower and brought into question the long-term sustainability of the business model. Given the surprise and the more cyclical correlation to the economy, I sold our position to zero early in the correction. As the market rebounded I received more clarity around the operating conditions of the company and their liquidity position, so if conditions continue to improve I plan to repurchase a position in the name. I am watching the fundamentals and the liquidity position of the company closely and believe that the bonds could offer good upside potential versus downside risk in the Fund.
Select Energy and Non-Cyclical Food and Beverage Bonds Aided Performance
Energy Future Holdings, formerly TXU Energy, was the top contributing security in the Fund during the period. I bought the bonds after the leveraged buyout (LBO) as I saw a significant de-leveraging opportunity for this deregulated power producer. Post LBO, the company began heading in the right direction and could benefit from rising energy prices in Texas. In addition, the company’s competitive position in the state of Texas remained well protected at period end.
Another top contributor for the period was Aramark, a commercial services company that exhibited strong free cash flow and has historically been a recession-resistant business. The risk/reward profile for our Aramark position remained compelling and I believe over the longer term this high-quality business model and non-cyclical business should be able to generate free cash flow throughout the economic cycle. Aramark is led by a management that understands value creation in moving a company from public to private and then back to public, I feel this is a rare opportunity to be aligned with a management team as a bond holder of the company.
Outlook
Looking ahead, I will be paying close attention to the employment picture, the state of the financial sector, the availability of credit and consumer confidence, among other things. Should the labor market continue to soften amid contracting credit conditions and continued weakness in the housing market, further slowing in consumer spending is likely. While the government stimulus checks could provide a temporary boost, the current de-leveraging of the U.S. consumer could take time to complete, possibly lessening the potential for a sharp rebound in economic activity. Inflation remains a concern for the markets as well, given record commodity prices and the Consumer Price Index’s recent elevated level. Although inflation is generally a lagging indicator and should ease with slowing economic growth, it deserves attention given its negative impact and the notion that inflation may limit the Fed’s options to further stimulate economic growth. I recognize that housing plays an important role in the current calculation of the inflation figures but have tended to pay more close attention to the inflation pressures on staple goods and their effects of discretionary consumption patterns of the U.S. consumer.
Janus Bond and Money Market Funds April 30, 2008 17
Table of Contents
Janus High-Yield Fund (unaudited)
In light of this, the housing market could be the core problem for the U.S. economy going forward, given its ties to interest rates and credit markets. If the end-of-period uptrend in long-term interest rates continues and the spreads between mortgage-backed securities fail to narrow, or even widen, further weakness in housing could result. This environment would likely result in additional write-downs within the financial sector, further delaying the recovery process. This could also spell additional risk for the high-yield market as liquidity premiums would likely reverse course leading to wider spreads. Away from the significant deterioration in the fundamentals of the financial sector, many investment-grade corporate balance sheets remained in great shape with large cash balances. Because the new facilities introduced by the Fed and the current administration make almost the entire investment-grade market eligible as collateral and thus inexpensively financed, liquidity and trading within fixed income markets could improve. In terms of the high-yield market, more care must be taken, as certain areas and names could do very well while other areas, namely highly levered companies, could struggle amid the system-wide deleveraging. Lastly, while corporate default rates are likely to rise over the next year, we could see a significant increase in merger and acquisition activity with many of the small high-yield issuers being bought by cash rich, larger organizations taking advantage of their strong balance sheets and high-equity valuations. This could have important implications for business capital expenditures and thus economic activity. While this may be some months away, I will closely monitor these situations and their potential effect on our individual holdings.
Within the Fund, I will continue to seek to uncover opportunities through fundamental bottom-up research that I believe present an attractive risk/reward profile. I’m supported by a fantastic team of analysts, traders and risk professionals that are focused on delivering for our clients. While these have been very volatile times, filled with periods of significant uncertainty, preservation of capital remains a primary focus followed by exploiting the opportunities presented by the ever-changing market. Many of our best investment ideas currently generate free cash flow and are supported by asset-heavy balance sheets and historically recession-resistant businesses. In addition, I am focusing on management teams that have managed through difficult times and understand the importance of balance within their capital structures. All in all, strong businesses with excellent management tend to thrive in volatile times.
Thank you for entrusting your assets to us and for your investment in Janus High-Yield Fund.
18 Janus Bond and Money Market Funds April 30, 2008
Table of Contents
(unaudited)
Janus High-Yield Fund At A Glance
Fund Profile
April 30, 2008
Weighted Average Maturity | 6.2 Years | |
Average Effective Duration* | 3.9 Years | |
30-day Current Yield** | 8.13% | |
Weighted Average Fixed Income Credit Rating | BB | |
Number of Bonds/Notes | 191 |
* | A Theoretical measure of price volatility | |
** | Yield will fluctuate |
Ratings† Summary – (% of Net Assets)
April 30, 2008
AAA | 0.3% | |
AA | 1.5% | |
A | 0.7% | |
BBB | 5.7% | |
BB | 25.8% | |
B | 51.8% | |
CCC | 6.7% | |
Other | 7.5% |
† | Rated by Standard & Poor’s |
Significant Areas of Investment – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif18b02.gif)
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif18p02.gif)
Emerging markets comprised 1.6% of total net assets.
Janus Bond and Money Market Funds April 30, 2008 19
Table of Contents
Janus High-Yield Fund (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif18m02.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratios – for the fiscal year ended October 31, 2007 | ||||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | Net Annual Fund | |||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | Operating Expenses | |||||||||
Janus High-Yield Fund | (1.65)% | (2.11)% | 6.60% | 5.06% | 7.59% | 0.88% | 0.88% | ||||||||
Lehman Brothers High-Yield Bond Index | (0.74)% | (0.88)% | 8.29% | 5.24% | 6.49% | ||||||||||
Lipper Quartile | – | 3rd | 3rd | 1st | 1st | ||||||||||
Lipper Ranking – based on total return for High Current Yield Funds | – | 270/458 | 235/333 | 35/163 | 4/97 | ||||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
Janus Capital has contractually agreed to waive the Fund’s total operating expenses (excluding brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to a certain limit until at least March 1, 2009. The expense waiver shown reflects the application of such limit and is detailed in the Statement of Additional Information. Returns and yields shown include fee waivers, if any, and without such waivers, the Fund’s yield and returns would have been lower.
A 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.) Contractual waivers agreed to by Janus Capital, where applicable, are included in the prospectus under “Net Annual Fund Operating Expenses.” All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund’s total operating expenses did not exceed the expense limit so no waivers were in effect for the most recent period.
See important disclosures on the next page.
20 Janus Bond and Money Market Funds April 30, 2008
Table of Contents
(unaudited)
Funds that invest in bonds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds owned by the Fund. Unlike owning individual bonds, there are ongoing fees and expenses associated with owning shares of bond funds. The return of principal is not guaranteed due to net asset value fluctuation that is caused by changes in the price of specific bonds held in the Fund and selling of bonds within the Fund by the portfolio manager.
High-yield/high-risk bonds involve a greater risk of default and price volatility than U.S. Government and other high-quality bonds. High-yield/ high-risk bonds can experience sudden and sharp price swings which will affect net asset value.
The Fund invests in Real Estate Investment Trusts (REITs) which may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: liquidity, decline in the value of real estate, risks related to general and economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
Returns include reinvestment of dividends, distributions and capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
December 31, 1995 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the indiex. The index is unmanaged and is not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – December 29, 1995 |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 983.50 | $ | 4.29 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.54 | $ | 4.37 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.87%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
Janus Bond and Money Market Funds April 30, 2008 21
Table of Contents
Janus High-Yield Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Bank Loans – 1.3% | ||||||||
Diversified Operations – 0.5% | ||||||||
$ | 3,982,273 | Travelport Holdings, Ltd., 9.9125% bank loan, due 3/27/12‡,ß | $ | 2,787,591 | ||||
Medical – Outpatient and Home Medical Care – 0.2% | ||||||||
National Mentor Holdings, Inc.: | ||||||||
967,570 | 4.70%, bank loan, due 6/29/13‡,ß | 851,462 | ||||||
59,158 | 6.60%, bank loan, due 6/29/13‡,ß | 52,059 | ||||||
903,521 | ||||||||
Satellite Telecommunications – 0.6% | ||||||||
3,325,000 | INTELSAT Bermuda Ltd., 5.20% bank loan, due 2/3/14‡ | 3,312,531 | ||||||
Total Bank Loans (cost $8,316,612) | 7,003,643 | |||||||
Corporate Bonds – 91.1% | ||||||||
Aerospace and Defense – Equipment – 0.3% | ||||||||
1,774,000 | DRS Technologies, Inc., 6.875% company guaranteed notes, due 11/1/13 | 1,760,695 | ||||||
Agricultural Chemicals – 0.4% | ||||||||
1,975,000 | Mosaic Co., 6.25% senior unsecured notes due 12/1/16 (144A)‡ | 2,162,625 | ||||||
Apparel Manufacturers – 0.8% | ||||||||
Levi Strauss & Co.: | ||||||||
1,599,000 | 9.75%, senior unsubordinated notes due 1/15/15 | 1,670,955 | ||||||
2,333,000 | 8.875%, senior unsecured notes due 4/1/16 | 2,373,828 | ||||||
4,044,783 | ||||||||
Automotive – Cars and Light Trucks – 1.2% | ||||||||
2,250,000 | Ford Motor Co., 7.45% senior unsecured notes, due 7/16/31 | 1,681,875 | ||||||
General Motors Corp.: | ||||||||
4,143,000 | 7.125%, senior unsecured notes due 7/15/13# | 3,376,545 | ||||||
1,484,000 | 8.375%, senior unsecured notes due 7/15/33# | 1,129,695 | ||||||
6,188,115 | ||||||||
Automotive – Truck Parts and Equipment – 0.8% | ||||||||
1,450,000 | American Axle and Manufacturing Inc. 7.875%, company guaranteed notes due 3/1/17 | 1,324,938 | ||||||
1,535,000 | TRW Automotive, Inc., 7.25% company guaranteed notes due 3/15/17 (144A) | 1,494,706 | ||||||
1,687,000 | Visteon Corp., 8.25% senior unsecured notes, due 8/1/10# | 1,484,560 | ||||||
4,304,204 | ||||||||
Beverages – Non-Alcoholic – 0.8% | ||||||||
Dr Pepper Snapple Group: | ||||||||
1,660,000 | 6.12%, senior notes, due 5/1/13 (144A) | 1,698,166 | ||||||
1,075,000 | 6.82%, senior notes, due 5/1/18 (144A) | 1,115,153 | ||||||
1,325,000 | 7.45%, notes, due 5/1/38 (144A) | 1,418,542 | ||||||
4,231,861 | ||||||||
Building – Residential and Commercial – 1.4% | ||||||||
1,775,000 | Centex Corp., 5.45% senior unsecured notes, due 8/15/12 | 1,586,406 | ||||||
1,625,000 | Lennar Corp., 7.625% senior unsecured notes, due 3/1/09 | 1,598,594 | ||||||
3,225,000 | Meritage Homes Corp., 6.255% company guaranteed notes, due 3/15/15 | 2,676,750 | ||||||
1,625,000 | Ryland Group, 6.875% company guaranteed notes, due 6/15/13 | 1,583,693 | ||||||
7,445,443 | ||||||||
Cable Television – 0.8% | ||||||||
1,615,000 | CCH I LLC, 11.00% secured notes, due 10/1/15 | 1,259,700 | ||||||
1,530,000 | Charter Communications Holdings II 10.25%, senior unsecured notes due 9/15/10 | 1,472,625 | ||||||
1,525,000 | Charter Communications Operating LLC 8.00%, senior notes, due 4/30/12 (144A) | 1,471,625 | ||||||
4,203,950 | ||||||||
Casino Hotels – 0.7% | ||||||||
1,525,000 | Park Place Entertainment Corp., 7.875% company guaranteed notes, due 3/15/10# | 1,433,500 | ||||||
2,523,000 | Seminole Hard Rock Entertainment 8.19438%, senior secured notes due 3/15/14 (144A)‡,§ | 2,113,013 | ||||||
3,546,513 | ||||||||
Cellular Telecommunications – 1.0% | ||||||||
3,174,000 | MetroPCS Wireless, Inc., 9.25% company guaranteed notes, due 11/1/14 | 3,118,455 | ||||||
890,000 | Rogers Wireless Communications, Inc. 6.375% secured notes, due 3/1/14 | 911,360 | ||||||
945,000 | Suncom Wireless Holdings, Inc., 8.50% company guaranteed notes, due 6/1/13 | 983,981 | ||||||
5,013,796 | ||||||||
Chemicals – Diversified – 0.3% | ||||||||
1,409,000 | Innophos Holdings, Inc., 9.50% senior unsecured notes due 4/15/12 (144A)§ | 1,359,685 | ||||||
Chemicals – Specialty – 1.0% | ||||||||
2,074,000 | Macdermid, Inc., 9.50% senior subordinated notes due 4/15/17 (144A)# | 1,980,670 | ||||||
1,750,000 | Momentive Performance, 11.50% company guaranteed notes, due 12/1/16# | 1,535,625 | ||||||
1,735,000 | Nalco Co., 7.75% senior unsecured notes, due 11/15/11 | 1,782,713 | ||||||
5,299,008 | ||||||||
Coal – 0.8% | ||||||||
4,414,000 | Massey Energy Co., 6.875% company guaranteed notes, due 12/15/13 | 4,414,000 | ||||||
Commercial Banks – 0.1% | ||||||||
450,000 | Barclays PLC, 7.70% notes, due 4/25/18 (144A)‡ | 465,633 | ||||||
See Notes to Schedules of Investments and Financial Statements.
22 Janus Bond and Money Market Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Commercial Services – 2.0% | ||||||||
$ | 8,819,000 | Aramark Corp., 8.50% senior unsecured notes, due 2/1/15 | $ | 9,193,808 | ||||
1,469,000 | U.S. Investigation Services, 10.50% company guaranteed notes due 11/1/15 (144A) | 1,300,065 | ||||||
10,493,873 | ||||||||
Commercial Services – Finance – 0.5% | ||||||||
Cardtronics, Inc.: | ||||||||
525,000 | 9.25%, company guaranteed notes due 8/15/13‡ | 499,406 | ||||||
2,327,000 | 9.25%, senior subordinated notes due 8/15/13 (144A)§ | 2,213,559 | ||||||
2,712,965 | ||||||||
Computer Services – 0.5% | ||||||||
SunGard Data Systems, Inc.: | ||||||||
1,342,000 | 9.125%, company guaranteed notes due 8/15/13 | 1,402,390 | ||||||
1,357,000 | 10.25%, company guaranteed notes due 8/15/15 | 1,441,813 | ||||||
2,844,203 | ||||||||
Consumer Products – Miscellaneous – 1.7% | ||||||||
2,293,000 | Amscan Holdings, Inc., 8.75% senior subordinated notes, due 5/1/14 | 2,075,165 | ||||||
1,496,000 | Jarden Corp., 7.50% company guaranteed notes, due 5/1/17 | 1,376,320 | ||||||
5,306,000 | Visant Holding Corp., 8.75% senior notes, due 12/1/13 | 5,226,410 | ||||||
8,677,895 | ||||||||
Containers – Metal and Glass – 1.1% | ||||||||
1,260,000 | Greif, Inc, 6.75% senior unsecured notes, due 2/1/17 | 1,250,550 | ||||||
Owens-Brockway Glass Container, Inc.: | ||||||||
819,000 | 8.25%, company guaranteed notes due 5/15/13 | 851,760 | ||||||
2,519,000 | 6.75%, company guaranteed notes due 12/1/14 | 2,556,785 | ||||||
874,000 | Owens-Illinois, Inc., 7.80% debentures, due 5/15/18 | 882,740 | ||||||
5,541,835 | ||||||||
Containers – Paper and Plastic – 0.7% | ||||||||
Graham Packaging Co.: | ||||||||
1,219,000 | 8.50%, company guaranteed notes due 10/15/12 | 1,194,620 | ||||||
2,559,000 | 9.875%, company guaranteed notes due 10/15/14 | 2,405,460 | ||||||
3,600,080 | ||||||||
Cosmetics and Toiletries – 0.6% | ||||||||
3,090,000 | Chattem, Inc., 7.00% senior subordinated notes, due 3/1/14 | 3,074,550 | ||||||
Data Processing and Management – 0.3% | ||||||||
1,998,000 | First Data Corp., 9.875% company guaranteed notes due 9/24/15 (144A)# | 1,818,180 | ||||||
Direct Marketing – 1.1% | ||||||||
3,480,000 | Affinion Group, Inc., 11.50% company guaranteed notes, due 10/15/15 | 3,414,750 | ||||||
2,429,000 | Visant Corp., 7.625% company guaranteed notes, due 10/1/12 | 2,416,855 | ||||||
5,831,605 | ||||||||
Distribution/Wholesale – 0.3% | ||||||||
1,814,000 | Nebraska Book Company, Inc., 8.625% company guaranteed notes, due 3/15/12 | 1,650,740 | ||||||
Diversified Operations – 2.1% | ||||||||
Capmark Financial Group: | ||||||||
1,025,000 | 5.875%, company guaranteed notes due 5/10/12 | 851,618 | ||||||
1,025,000 | 6.30%, company guaranteed notes due 5/10/17 | 745,766 | ||||||
Harland Clarke Holdings: | ||||||||
2,048,000 | 9.50%, company guaranteed notes due 5/15/15 | 1,653,760 | ||||||
2,520,000 | 10.3075%, company guaranteed notes due 5/15/15‡,ß | 1,814,401 | ||||||
1,382,000 | Kansas City Southern, 7.50% company guaranteed notes, due 6/15/09 | 1,416,550 | ||||||
Sally Holdings LLC: | ||||||||
1,731,000 | 9.25%, company guaranteed notes due 11/15/14# | 1,748,310 | ||||||
1,415,000 | 10.50%, company guaranteed notes due 11/15/16# | 1,407,925 | ||||||
1,224,000 | SPX Corp., 7.625% senior notes, due 12/15/14 (144A) | 1,279,080 | ||||||
10,917,410 | ||||||||
Diversified Operations – Commercial Services – 0.6% | ||||||||
3,375,000 | Aramark Corp., 8.85625% company guaranteed notes, due 2/1/15‡,ß | 3,248,438 | ||||||
Electric – Generation – 1.7% | ||||||||
1,842,000 | AES Corp., 8.00% senior unsecured notes, due 10/15/17 | 1,920,285 | ||||||
Edison Mission Energy: | ||||||||
3,090,000 | 7.00%, senior unsecured notes due 5/15/17 | 3,120,900 | ||||||
3,126,000 | 7.20%, senior unsecured notes due 5/15/19 | 3,149,445 | ||||||
996,910 | Tenaska Alabama II Partners, 7.00% senior secured notes due 6/30/21 (144A)‡ | 925,475 | ||||||
9,116,105 | ||||||||
Electric – Integrated – 2.2% | ||||||||
2,288,000 | CMS Energy Corp., 6.31% senior unsecured notes, due 1/15/13‡,ß | 2,058,637 | ||||||
1,105,000 | Energy Future Holdings, 10.875% company guaranteed notes due 11/1/17 (144A) | 1,176,825 | ||||||
774,000 | Nevada Power Co., 5.875% general refunding mortgage, due 1/15/15 | 768,188 | ||||||
Texas Competitive Electric Holdings Co. LLC: | ||||||||
1,889,000 | 10.25%, company guaranteed notes due 11/1/15 (144A) | 1,969,283 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond and Money Market Funds April 30, 2008 23
Table of Contents
Janus High-Yield Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Electric – Integrated – (continued) | ||||||||
$ | 5,494,000 | 10.25%, company guaranteed notes due 11/1/15 (144A) | $ | 5,727,494 | ||||
11,700,427 | ||||||||
Electronic Components – Semiconductors – 1.1% | ||||||||
3,674,000 | Freescale Semiconductor, 10.125% company guaranteed notes due 12/15/16# | 2,893,275 | ||||||
3,000,000 | National Semiconductor Corp., 5.94438% senior unsecured notes, due 6/15/10‡,ß | 2,770,257 | ||||||
5,663,532 | ||||||||
Electronics – Military – 0.5% | ||||||||
2,680,000 | L-3 Communications Corp., 6.375% company guaranteed notes, due 10/15/15 | 2,649,850 | ||||||
Finance – Auto Loans – 2.9% | ||||||||
Ford Motor Credit Co.: | ||||||||
3,748,000 | 6.625%, senior unsecured notes due 6/16/08 | 3,727,569 | ||||||
4,883,000 | 7.375%, senior unsecured notes due 10/28/09 | 4,700,512 | ||||||
3,787,000 | 9.81%, senior unsecured notes due 4/15/12‡ | 3,712,365 | ||||||
1,770,000 | 7.80%, senior unsecured notes due 6/1/12 | 1,582,761 | ||||||
1,734,000 | 7.00%, senior unsecured notes due 10/1/13 | 1,496,071 | ||||||
15,219,278 | ||||||||
Finance – Investment Bankers/Brokers – 2.0% | ||||||||
2,000,000 | Goldman Sachs Group, Inc., 6.15% senior notes, due 4/1/18 | 2,023,104 | ||||||
Lehman Brothers Holdings: | ||||||||
1,275,000 | 6.75%, subordinated notes due 12/28/17 | 1,272,472 | ||||||
2,575,000 | 6.875%, company guaranteed notes due 5/2/18 | 2,633,561 | ||||||
1,300,000 | Merrill Lynch & Co., 6.875% company guaranteed notes, due 4/25/18 | 1,310,609 | ||||||
2,910,000 | Morgan Stanley Co., 6.625% senior unsecured notes, due 4/1/18 | 3,017,143 | ||||||
10,256,889 | ||||||||
Food – Diversified – 3.0% | ||||||||
975,000 | Chiquita Brands International, 7.50% senior notes, due 11/1/14 | 879,938 | ||||||
5,358,000 | Del Monte Corp., 6.75% company guaranteed notes, due 2/15/15 | 5,170,469 | ||||||
Dole Food Company, Inc.: | ||||||||
4,764,000 | 8.625%, senior notes, due 5/1/09‡ | 4,609,170 | ||||||
6,053,000 | 8.75%, debentures, due 7/15/13‡,# | 5,145,050 | ||||||
15,804,627 | ||||||||
Food – Meat Products – 0.7% | ||||||||
2,833,000 | National Beef Packing Company LLC 10.50%, senior unsecured notes due 8/1/11‡ | 2,663,020 | ||||||
2,493,000 | Pierre Foods, Inc., 9.875% company guaranteed notes, due 7/15/12 | 1,196,640 | ||||||
3,859,660 | ||||||||
Food – Retail – 0.8% | ||||||||
4,293,000 | Stater Brothers Holdings, Inc., 7.75% company guaranteed notes, due 4/15/15 | 4,303,733 | ||||||
Food – Wholesale/Distribution – 0.6% | ||||||||
3,225,000 | Supervalu, Inc., 7.50% senior unsecured notes, due 11/15/14 | 3,337,875 | ||||||
Gambling – Non-Hotel – 1.4% | ||||||||
Pinnacle Entertainment, Inc.: | ||||||||
3,155,000 | 8.25%, company guaranteed notes due 3/15/12 | 3,139,225 | ||||||
425,000 | 8.75%, company guaranteed notes due 10/1/13 | 431,375 | ||||||
649,000 | Pokagon Gaming Authority, 10.375% senior notes, due 6/15/14 (144A) | 692,808 | ||||||
3,618,000 | Shingle Springs Tribal Gaming, 9.375% senior notes, due 6/15/15 (144A) | 3,201,930 | ||||||
7,465,338 | ||||||||
Independent Power Producer – 2.6% | ||||||||
1,700,000 | AES China Generating Company, Ltd. 8.25%, senior unsecured notes due 6/26/10 | 1,588,279 | ||||||
5,752,000 | NRG Energy, Inc., 7.375% company guaranteed notes, due 2/1/16 | 5,924,559 | ||||||
Reliant Energy, Inc.: | ||||||||
3,684,000 | 7.625%, senior unsecured notes due 6/15/14# | 3,831,360 | ||||||
2,235,000 | 7.875%, senior unsecured notes due 6/15/17# | 2,329,988 | ||||||
13,674,186 | ||||||||
Medical – Hospitals – 3.2% | ||||||||
HCA, Inc.: | ||||||||
5,202,000 | 6.50%, senior unsecured notes due 2/15/16 | 4,655,790 | ||||||
10,006,000 | 9.25%, senior secured notes due 11/15/16 | 10,756,449 | ||||||
1,300,000 | Tenet Healthcare Corp., 9.25% senior unsecured notes, due 2/1/15‡ | 1,293,500 | ||||||
16,705,739 | ||||||||
Medical – Outpatient and Home Medical Care – 0.3% | ||||||||
1,148,000 | CRC Health Corp., 10.75% company guaranteed notes, due 2/1/16 | 975,800 | ||||||
702,000 | National Mentor Holdings, Inc., 11.25% company guaranteed notes, due 7/1/14 | 719,550 | ||||||
1,695,350 | ||||||||
Metal – Diversified – 1.2% | ||||||||
Freeport-McMoRan Copper & Gold, Inc.: | ||||||||
2,835,000 | 8.25%, senior unsecured notes due 4/1/15 | 3,079,519 | ||||||
2,829,000 | 8.375%, senior unsecured notes due 4/1/17 | 3,126,045 | ||||||
6,205,564 | ||||||||
Multimedia – 0.4% | ||||||||
2,208,000 | LBI Media, Inc., 8.50% senior subordinated notes due 8/1/17 (144A) | 1,832,640 | ||||||
Music – 1.0% | ||||||||
5,726,000 | Steinway Musical Instruments, Inc., 7.00% senior notes, due 3/1/14 (144A)§ | 5,038,880 | ||||||
See Notes to Schedules of Investments and Financial Statements.
24 Janus Bond and Money Market Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Non-Hazardous Waste Disposal – 1.0% | ||||||||
Allied Waste Industries, Inc.: | ||||||||
$ | 1,540,000 | 6.375%, secured notes due 4/15/11 | $ | 1,547,700 | ||||
992,000 | 7.875%, senior unsecured notes due 4/15/13 | 1,030,440 | ||||||
2,438,000 | 7.25%, senior secured notes due 3/15/15 | 2,459,333 | ||||||
5,037,473 | ||||||||
Office Automation and Equipment – 0.2% | ||||||||
1,124,000 | Xerox Corp., 6.875% senior unsecured notes, due 8/15/11 | 1,171,704 | ||||||
Office Supplies and Forms – 1.3% | ||||||||
7,563,000 | Acco Brands Corp., 7.625% company guaranteed notes, due 8/15/15 | 6,882,330 | ||||||
Oil Companies – Exploration and Production – 4.9% | ||||||||
4,256,000 | Chesapeake Energy Corp., 7.75% company guaranteed notes, due 1/15/15 | 4,394,319 | ||||||
3,479,000 | Cimarex Energy Co., 7.125% company guaranteed notes, due 5/1/17 | 3,531,184 | ||||||
3,152,000 | Encore Acquisition Co., 6.25% company guaranteed notes, due 4/15/14 | 2,962,880 | ||||||
Forest Oil Corp.: | ||||||||
2,192,000 | 8.00%, senior unsecured notes due 6/15/08 | 2,194,740 | ||||||
250,000 | 8.00%, company guaranteed notes due 12/15/11 | 264,063 | ||||||
1,048,000 | 7.25%, senior unsecured notes due 6/15/19 (144A) | 1,082,060 | ||||||
2,152,000 | Hilcorp Energy Finance, 7.75% senior unsecured notes due 11/1/15 (144A) | 2,119,720 | ||||||
699,000 | Hilcorp Energy I, 9.00% senior unsecured notes due 6/1/16 (144A) | 728,708 | ||||||
2,205,000 | Petrohawk Energy Corp., 9.125% company guaranteed notes, due 7/15/13 | 2,331,788 | ||||||
3,155,000 | Quicksilver Resources, Inc., 7.125% company guaranteed notes, due 4/1/16 | 3,123,449 | ||||||
550,000 | Southwestern Energy Co., 7.50% senior unsecured notes due 2/1/18 (144A) | 582,999 | ||||||
1,745,000 | Whiting Petroleum, Corp., 7.00% company guaranteed notes, due 2/1/14 | 1,749,363 | ||||||
25,065,273 | ||||||||
Oil Field Machinery and Equipment – 0.2% | ||||||||
1,054,000 | Dresser-Rand Group, Inc., 7.625% company guaranteed notes, due 11/1/14‡ | 1,054,000 | ||||||
Oil Refining and Marketing – 0.6% | ||||||||
2,994,000 | Enterprise Products Operations, 6.30% company guaranteed notes, due 9/15/17 | 3,050,907 | ||||||
Optical Supplies – 0.3% | ||||||||
1,249,000 | Bausch & Lomb, Inc., 9.875% senior unsecured notes due 11/1/15 (144A)# | 1,330,185 | ||||||
Paper and Related Products – 2.3% | ||||||||
2,635,000 | Boise Cascade LLC, 7.125% company guaranteed notes, due 10/15/14 | 2,345,150 | ||||||
3,954,000 | Georgia-Pacific Corp., 7.125% company guaranteed notes due 1/15/17 (144A) | 3,914,459 | ||||||
NewPage Corp.: | ||||||||
1,224,000 | 10.00%, secured notes due 5/1/12 (144A) | 1,306,620 | ||||||
2,364,000 | 12.00%, company guaranteed notes due 5/1/13# | 2,505,840 | ||||||
1,549,000 | Rock-Tenn Co., 9.25% senior notes, due 3/15/16 (144A) | 1,626,450 | ||||||
524,000 | Verso Paper Holdings LLC, 11.375% company guaranteed notes, due 8/1/16 | 537,100 | ||||||
12,235,619 | ||||||||
Physical Therapy and Rehabilitation Centers – 0.5% | ||||||||
2,513,000 | HealthSouth Corp., 10.75% company guaranteed notes, due 6/15/16# | 2,701,475 | ||||||
Pipelines – 3.2% | ||||||||
2,963,000 | Dynegy Holdings, Inc., 8.75% senior unsecured notes, due 2/15/12 | 3,140,780 | ||||||
6,301,000 | El Paso Corp., 7.00% senior unsecured notes, due 6/15/17 | 6,575,603 | ||||||
Kinder Morgan Energy Partners: | ||||||||
450,000 | 5.95%, senior unsecured notes due 2/15/18 | 446,335 | ||||||
461,000 | 6.95%, senior unsecured notes due 1/15/38 | 467,343 | ||||||
2,749,000 | Kinder Morgan Finance Co., 5.70% company guaranteed notes, due 1/5/16# | 2,632,168 | ||||||
3,138,000 | Williams Cos, Inc., 7.125% senior unsecured notes, due 9/1/11 | 3,334,125 | ||||||
16,596,354 | ||||||||
Poultry – 0.8% | ||||||||
Pilgrims Pride Corp.: | ||||||||
2,900,000 | 7.625%, company guaranteed notes due 5/1/15 | 2,755,000 | ||||||
1,450,000 | 8.375%, company guaranteed notes due 5/1/17 | 1,290,500 | ||||||
4,045,500 | ||||||||
Private Corrections – 0.3% | ||||||||
Corrections Corporation of America: | ||||||||
1,130,000 | 7.50%, senior unsecured notes due 5/1/11 | 1,146,950 | ||||||
674,000 | 6.25%, company guaranteed notes due 3/15/13 | 670,630 | ||||||
1,817,580 | ||||||||
Publishing – Books – 0.4% | ||||||||
2,521,000 | Cengage Learning Acquisitions, 10.50% senior notes, due 1/15/15 (144A) | 2,281,505 | ||||||
Publishing – Newspapers – 0.9% | ||||||||
5,043,000 | Block Communications, Inc., 8.25% senior notes, due 12/15/15 (144A) | 4,828,673 | ||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Bond and Money Market Funds April 30, 2008 25
Table of Contents
Janus High-Yield Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Publishing – Periodicals – 0.3% | ||||||||
$ | 1,358,000 | Medimedia USA, Inc., 11.375% senior subordinated notes due 11/15/14 (144A)§ | $ | 1,385,160 | ||||
Recycling – 0.3% | ||||||||
2,175,000 | Aleris International, Inc., 10.00% company guaranteed notes due 12/15/16# | 1,348,500 | ||||||
REIT – Health Care – 0.3% | ||||||||
1,736,000 | Senior Housing Properties Trust, 8.625% senior unsecured notes, due 1/15/12 | 1,801,100 | ||||||
REIT – Hotels – 0.4% | ||||||||
1,961,000 | Host Marriott L.P., 6.375% senior secured notes, due 3/15/15 | 1,882,560 | ||||||
Rental Auto/Equipment – 0.3% | ||||||||
1,525,000 | Hertz Corp., 8.875% company guaranteed notes, due 1/1/14 | 1,536,438 | ||||||
Retail – Apparel and Shoe – 0.8% | ||||||||
4,228,000 | Hanesbrands, Inc., 8.78406% company guaranteed notes due 12/15/14‡,ß | 3,984,890 | ||||||
Retail – Arts and Crafts – 0.2% | ||||||||
1,450,000 | Michael’s Stores, Inc., 11.375% company guaranteed notes, due 11/1/16 | 1,301,375 | ||||||
Retail – Computer Equipment – 0.5% | ||||||||
2,206,000 | GameStop Corp., 8.00% company guaranteed notes, due 10/1/12 | 2,349,390 | ||||||
Retail – Drug Store – 0.3% | ||||||||
1,536,000 | Rite Aid Corp., 7.50% company guaranteed notes, due 1/15/15 | 1,474,560 | ||||||
Retail – Miscellaneous/Diversified – 0.7% | ||||||||
976,000 | Eye Care Centers of America, Inc., 10.75% company guaranteed notes, due 2/15/15 | 1,004,060 | ||||||
Harry & David Holdings, Inc.: | ||||||||
1,689,000 | 10.62125%, company guaranteed notes due 3/1/12‡,ß | 1,418,760 | ||||||
1,249,000 | 9.00%, company guaranteed notes due 3/1/13 | 1,111,610 | ||||||
3,534,430 | ||||||||
Retail – Propane Distribution – 1.4% | ||||||||
3,464,000 | Amerigas Partners L.P., 7.25% senior unsecured notes, due 5/20/15 | 3,498,640 | ||||||
Ferrellgas Partners L.P.: | ||||||||
1,976,000 | 8.75%, senior notes due 6/15/12 | 2,030,340 | ||||||
1,797,000 | 6.75%, senior unsecured notes due 5/1/14 | 1,770,045 | ||||||
7,299,025 | ||||||||
Retail – Restaurants – 1.0% | ||||||||
1,844,000 | Denny’s Holdings, Inc., 10.00% company guaranteed notes, due 10/1/12# | 1,758,715 | ||||||
3,479,000 | Landry’s Restaurants, Inc., 9.50% company guaranteed notes due 12/15/14‡ | 3,378,979 | ||||||
5,137,694 | ||||||||
Retail – Vitamins/Nutritional Supplement – 0.4% | ||||||||
2,482,000 | General Nutrition Center, 10.00938% company guaranteed notes due 3/15/14‡,ß | 2,165,545 | ||||||
Rubber – Tires – 0.3% | ||||||||
1,379,000 | Goodyear Tire & Rubber Co., 9.00% senior unsecured notes, due 7/1/15# | 1,499,663 | ||||||
Seismic Data Collection – 0.3% | ||||||||
1,263,000 | Compagnie Generale de Geophysique-Veritas, 7.75%, company guaranteed notes, due 5/15/17 | 1,304,048 | ||||||
Special Purpose Entity – 12.6% | ||||||||
28,695,150 | Dow Jones Credit Default Index HY 9 T1 8.75%, secured, due 12/29/12 (144A) | 28,049,508 | ||||||
24,120,000 | Dow Jones Credit Default Index HY 10 T1 8.875%, pass through certificates due 6/29/13 (144A) | 23,620,716 | ||||||
Kar Holding, Inc.: | ||||||||
2,889,000 | 8.75%, company guaranteed notes due 5/1/14 | 2,773,440 | ||||||
1,203,000 | 10.00%, company guaranteed notes due 5/1/15 | 1,142,850 | ||||||
2,516,000 | NSG Holdings LLC, 7.75% senior secured notes due 12/15/25 (144A) | 2,453,100 | ||||||
7,454,000 | Petroplus Finance, Ltd., 7.00% company guaranteed notes due 5/1/17 (144A) | 6,932,220 | ||||||
64,971,834 | ||||||||
Steel – Producers – 0.7% | ||||||||
Steel Dynamics, Inc.: | ||||||||
941,000 | 7.375%, senior notes due 11/1/12 (144A) | 957,468 | ||||||
2,628,000 | 7.75%, senior notes, due 4/15/16 (144A) | 2,687,130 | ||||||
3,644,598 | ||||||||
Telecommunication Services – 1.2% | ||||||||
3,149,000 | Fairpoint Communications, 13.125% senior notes, due 4/1/18 (144A) | 3,180,490 | ||||||
675,000 | Qwest Corp., 5.625% senior unsecured notes, due 11/15/08 | 674,156 | ||||||
2,525,000 | Time Warner Telecom Holdings, Inc., 9.25% company guaranteed notes, due 2/15/14 | 2,613,375 | ||||||
6,468,021 | ||||||||
Telephone – Integrated – 2.4% | ||||||||
2,519,000 | Cincinnati Bell, Inc., 8.375% company guaranteed notes, due 1/15/14 | 2,506,405 | ||||||
1,375,000 | Citizens Communications Company, 6.625% senior unsecured notes, due 3/15/15 | 1,289,063 | ||||||
3,225,000 | Level 3 Financing, Inc., 8.75% company guaranteed notes, due 2/15/17 | 2,757,375 | ||||||
4,572,000 | Qwest Communications International 7.25%, company guaranteed notes due 2/15/11‡,# | 4,537,709 | ||||||
1,738,000 | Virgin Media Finance PLC, 9.125% company guaranteed notes, due 8/15/16 | 1,677,170 | ||||||
12,767,722 | ||||||||
See Notes to Schedules of Investments and Financial Statements.
26 Janus Bond and Money Market Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Transportation – Marine – 0.7% | ||||||||
$ | 3,672,000 | Ship Finance International, Ltd., 8.50% company guaranteed notes, due 12/15/13 | $ | 3,708,720 | ||||
Transportation – Railroad – 0.9% | ||||||||
1,147,000 | Grupo Transportacion Ferroviaria Mexicana S.A. de C.V., 9.375%, senior unsubordinated notes, due 5/1/12 | 1,195,748 | ||||||
Kansas City Southern de Mexico: | ||||||||
2,593,000 | 7.625%, senior unsubordinated notes due 12/1/13 | 2,479,556 | ||||||
1,100,000 | 7.375%, senior notes, due 6/1/14 (144A) | 1,043,625 | ||||||
4,718,929 | ||||||||
Wire and Cable Products – 0.7% | ||||||||
3,479,000 | General Cable Corp., 7.125% company guaranteed notes, due 4/1/17 | 3,392,025 | ||||||
Total Corporate Bonds (cost $480,297,499) | 475,156,563 | |||||||
Preferred Stock – 0.3% | ||||||||
Finance – Investment Bankers/Brokers – 0.3% | ||||||||
51,750 | Citigroup, Inc., 8.25% (cost $1,293,750) | 1,311,863 | ||||||
Warrants – 0% | ||||||||
Casino Services – 0% | ||||||||
166,722 | Progressive Gaming Corp. – expires 8/15/08 oo,§ (cost $167) | 150 | ||||||
Money Markets – 8.4% | ||||||||
41,329,861 | Janus Institutional Cash Management Fund – Institutional Shares, 2.82% | 41,329,861 | ||||||
2,329,280 | Janus Institutional Money Market Fund – Institutional Shares, 2.74% | 2,329,280 | ||||||
Total Money Markets (cost $43,659,141) | 43,659,141 | |||||||
Other Securities – 5.7% | ||||||||
13,949,196 | Allianz Dresdner Daily Asset Fund† | 13,949,196 | ||||||
3,906,746 | Repurchase Agreements† | 3,906,746 | ||||||
11,938,943 | Time Deposits† | 11,938,943 | ||||||
Total Other Securities (cost $29,794,885) | 29,794,885 | |||||||
Total Investments (total cost $563,362,054) – 106.8% | 556,926,245 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (6.8)% | (35,286,121) | |||||||
Net Assets – 100% | $ | 521,640,124 | ||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
Bermuda | $ | 5,296,999 | 1.0% | |||||
Canada | 2,632,168 | 0.5% | ||||||
China | 6,932,220 | 1.3% | ||||||
Mexico | 1,195,748 | 0.2% | ||||||
United Kingdom | 2,142,803 | 0.4% | ||||||
United States†† | 538,726,307 | 96.6% | ||||||
Total | $ | 556,926,245 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (83.5% excluding Short-Term Securities and Other Securities) |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond and Money Market Funds April 30, 2008 27
Table of Contents
Janus Short-Term Bond Fund (unaudited) | Ticker: JASBX |
Fund Snapshot
This conservative bond fund looks for investments that can provide a modest return while minimizing risk.
![(JASON GROOM PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646pgroomja.jpg)
Jason Groom
co-portfolio manager
![(DARRELL WATTERS PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646pwatterd.jpg)
Darrell Watters
co-portfolio manager
Performance Overview
For the six-month period ended April 30, 2008, Janus Short-Term Bond Fund posted a gain of 2.39%, compared to a 3.88% increase of its benchmark, the Lehman Brothers Government/Credit 1-3 Year Index.
Economic Update
Turmoil in the credit markets, uncertainty surrounding the near-term outlook for the U.S. economy and a weaker corporate profit picture made for a volatile and difficult market environment over the past several months. During this period of growing uncertainty, investors were attracted to less risky U.S. Treasuries, helping to push interest rates lower across the yield curve. The Federal Reserve’s aggressive interest rate reduction, including an unprecedented inter-meeting cut of 75 basis points (bps) in January, helped to keep the downward pressure on interest rates for much of the period. The yield curve finished the six month period ended April 30, 2008, with a much steeper slope as the yield on the 3-month Treasury bill fell by 253 bps to 1.38% and the 10-year Treasury yield declined 74 bps to 3.73%.
Additional subprime-related write-offs, slowing consumer spending and a softening labor market, accompanied by record commodity prices and rising inflation expectations, weighed on investor sentiment during the period. Interest rates reached their lows for the period and credit spreads moved to their widest levels in mid-March amid fears that credit conditions could suffer another setback given a deteriorating liquidity position at investment bank Bear Stearns. Prior to that, periodic liquidity injections by the Federal Reserve (Fed) failed to alleviate the stress in the credit markets. Financial markets stabilized somewhat after the Fed aggressively lowered the Federal Funds rate, expanded the collateral it would accept and played an instrumental role in JP Morgan Chase’s purchase of Bear Stearns. In the end, the Fed lowered its target interest rate from 4.50% to 2.00% during the period.
The decline in interest rates helped U.S. Treasuries outperform other segments of the bond market during the period, but these moves were not without volatility. Inflation expectations rose given near-record commodity prices and the more accommodative stance taken by the Fed. But more moderate inflation readings late in the period tempered some of the anxiety. Meanwhile, mortgage-backed security, high-yield and investment grade spreads to U.S. Treasuries widened, or rose to their highest levels, before declining a bit toward the end of the period.
The uptrend in interest rates to close out the period can be attributed in part to investors beginning to look ahead to a possible economic recovery. Nevertheless, concerns about elevated inflationary pressures, soft consumer spending, the weak housing market and the lingering possibility of more write-downs, continued to weigh on the bond market.
Credit and Agency/Government Sponsored Debt Exposure Hindered Performance
The Fund’s underperformance during the period was largely driven by our allocation to high yield and leveraged loans. Below investment grade credit significantly underperformed higher grade credit, as most investors moved up in credit quality.
An underweight to agency/government sponsored debt also detracted from performance during the period. While we will look to add to our agency position, bringing it closer to the benchmark weight, we continue to believe that among the highest quality debt, U.S. Treasuries offer the best defense against market uncertainty.
Our credit position in Denny’s, a restaurant chain, also fell on concerns about a consumer-led economic slowdown hurting their business, however, operations at the company remained strong and same-store sales increased. Within Denny’s capital structure, they have been selling off stores to franchisees and using the proceeds to pay down debt.
Treasury Holdings Benefited Results
Against the backdrop of uncertainty and risk aversion, the U.S. Treasury overweight position versus the benchmark made the strongest contribution. We believe our bias toward the highest-quality securities protected shareholders from much of the spread widening that occurred in the credit and mortgage areas of the market.
Among individual credits, bonds issued by Berkshire Hathaway were the top contributor to performance in the
28 Janus Bond and Money Market Funds April 30, 2008
Table of Contents
(unaudited)
six-month period. During the tumultuous market conditions, investors gravitated toward blue chip names finding comfort in what we believe to be exceptional management teams with a long-standing history of market leadership.
Outlook
Looking ahead, we will be paying close attention to the employment picture, the availability of credit and consumer confidence, among other things. Should the labor market continue to soften amid continued weakness in the housing market, further slowing in consumer spending is likely. While the government stimulus checks could provide a temporary boost, the current de-leveraging of the U.S. economy could take time to complete, possibly lessening the potential for a sharp rebound in economic activity. Inflation remains a concern for the markets as well, given record commodity prices and the Consumer Price Index’s recent elevated level. Although inflation is generally a lagging indicator and should ease with slowing economic growth, it deserves attention given its negative impact and the notion that inflation may limit the Fed’s options to further stimulate economic growth.
The housing market could be the real problem for consumers, given its ties to interest rates and credit markets. If the end-of-period uptrend in long-term interest rates continues and borrowing costs widen, further weakness in housing could result. Nevertheless, investment-grade corporate balance sheets remained in great shape with large cash balances. Because the new facilities introduced by the Fed and the Bush administration make almost the entire investment-grade market eligible as collateral and thus inexpensively financed, liquidity and trading within fixed income markets could improve. Lastly, while corporate default rates are likely to rise over the next year, we could see a significant increase in merger and acquisition activity with many of the small high-yield issuers being bought by cash rich organizations taking advantage of their strong balance sheets and high equity valuations. This could have important implications for business capital expenditures and thus economic activity. While this may be some months away, we will closely monitor these situations and their potential effect on our individual holdings.
Thank you for your investment in Janus Short-Term Bond Fund.
Janus Bond and Money Market Funds April 30, 2008 29
Table of Contents
Janus Short-Term Bond Fund (unaudited)
Janus Short-Term Bond Fund At A Glance
Fund Profile
April 30, 2008
Weighted Average Maturity | 2.0 Years | |
Average Effective Duration* | 1.7 Years | |
30-day Current Yield** | ||
Without Reimbursement | 1.61% | |
With Reimbursement | 1.88% | |
Weighted Average Fixed Income Credit Rating | AA+ | |
Number of Bonds/Notes | 63 |
* | A Theoretical measure of price volatility | |
** | Yield will fluctuate |
Ratings†Summary – (% of Net Assets)
April 30, 2008
AAA | 83.7% | |
AA | 4.6% | |
A | 2.1% | |
BBB | 3.8% | |
BB | 2.6% | |
B | 0.8% | |
CCC | 0.6% | |
Other | 1.8% |
† | Rated by Standard & Poor’s |
Significant Areas of Investment – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif18b04.gif)
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif18p04.gif)
30 Janus Bond and Money Market Funds April 30, 2008
Table of Contents
(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif18m04.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratios – for the fiscal year ended October 31, 2007 | ||||||||||||||
Fiscal | One | Five | Ten | Since | Total Annual Fund | Net Annual Fund | |||||||||
Year-to-Date | Year | Year | Year | Inception* | Operating Expenses | Operating Expenses | |||||||||
Janus Short-Term Bond Fund | 2.39% | 4.58% | 3.20% | 4.32% | 4.67% | 1.01% | 0.65% | ||||||||
Lehman Brothers Government/Credit 1-3 Year Index | 3.88% | 7.18% | 3.55% | 5.01% | 5.23%** | ||||||||||
Lipper Quartile | – | 2nd | 1st | 2nd | 2nd | ||||||||||
Lipper Ranking – based on total return for Short Investment Grade Debt | – | 72/262 | 35/160 | 28/84 | 8/24 | ||||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
Janus Capital has contractually agreed to waive the Fund’s total operating expenses (excluding brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to a certain limit until at least March 1, 2009. The expense waiver is detailed in the Statement of Additional Information. Returns and yields shown include fee waivers, if any, and without such waivers, the Fund’s yield and returns would have been lower.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2008. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Fund invests or has invested during the period.) Contractual waivers agreed to by Janus Capital, where applicable, are included in the prospectus under “Net Annual Fund Operating Expenses.” All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
Janus Bond and Money Market Funds April 30, 2008 31
Table of Contents
Janus Short-Term Bond Fund (unaudited)
Funds that invest in bonds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds owned by the Fund. Unlike owning individual bonds, there are ongoing fees and expenses associated with owning shares of bond funds. The return of principal is not guaranteed due to net asset value fluctuation that is caused by changes in the price of specific bonds held in the Fund and selling of bonds within the Fund by the portfolio managers.
High-yield/high-risk bonds involve a greater risk of default and price volatility than U.S. Government and other high-quality bonds. High-yield/ high-risk bonds can experience sudden and sharp price swings which will affect net asset value.
The Fund invests in Real Estate Investment Trusts (REITs) which may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographic region. REITs may be subject to risks including, but not limited to: liquidity, decline in the value of real estate, risks related to general and economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers. To the extent the Fund invests in foreign REITs, the Fund may be subject to fluctuations in currency rates or political or economic conditions in a particular country.
Returns include reinvestment of dividends, distributions and capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
September 3, 1992 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
See Notes to Schedules of Investments for index definitions.
The Fund’s portfolio may differ significantly from the securities held in the index. The index is unmanaged and is not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Fund’s inception date – September 1, 1992 | |
** | The Lehman Brothers Government/Credit 1-3 Year Index’s since inception returns are calculated from August 31, 1992. |
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 1,022.60 | $ | 3.27 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.63 | $ | 3.27 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.65%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
32 Janus Bond and Money Market Funds April 30, 2008
Table of Contents
Janus Short-Term Bond Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
Bank Loan – 0.6% | ||||||||
Satellite Telecommunications – 0.6% | ||||||||
$ | 1,110,000 | INTELSAT Bermuda, Ltd., 5.20% bank loan, due 2/3/14‡ (cost $1,105,203) | $ | 1,105,755 | ||||
Corporate Bonds – 15.9% | ||||||||
Aerospace and Defense – Equipment – 0.2% | ||||||||
470,000 | United Technologies Corp., 6.50% senior unsecured notes, due 6/1/09 | 485,334 | ||||||
Beverages – Non-Alcoholic – 0.4% | ||||||||
470,000 | Coca-Cola, Co., 5.75% senior unsecured notes, due 3/15/11 | 494,252 | ||||||
255,000 | Dr Pepper Snapple Group, 6.12% senior notes, due 5/1/13 (144A) | 260,863 | ||||||
755,115 | ||||||||
Electric – Generation – 0.5% | ||||||||
925,000 | AES China Generating Company, Ltd. 9.25% ,senior unsecured notes due 6/26/10 | 962,926 | ||||||
Electric – Integrated – 1.3% | ||||||||
925,000 | CMS Energy Corp., 6.31% senior unsecured notes, due 1/15/13 | 978,188 | ||||||
785,000 | Nevada Power Co., 8.25% general refunding mortgage, due 6/1/11 | 832,614 | ||||||
785,000 | Wisconsin Energy Corp., 6.50% senior unsubordinated notes, due 4/1/11 | 822,047 | ||||||
2,632,849 | ||||||||
Electronic Components – Semiconductors – 0.4% | ||||||||
810,000 | National Semiconductor Corp., 5.94438% senior unsecured notes, due 6/15/10‡,ß | 747,969 | ||||||
Finance – Commercial – 0.5% | ||||||||
990,000 | Textron Financial Corp., 5.125% senior unsecured notes, due 11/1/10 | 1,013,507 | ||||||
Finance – Investment Bankers/Brokers – 2.8% | ||||||||
990,000 | Credit Suisse USA, Inc., 6.125% company guaranteed notes, due 11/15/11 | 1,030,565 | ||||||
980,000 | Goldman Sachs Group, Inc., 5.00% senior unsecured notes, due 1/15/11 | 990,531 | ||||||
1,450,000 | J.P. Morgan Chase & Co., 6.75% subordinated notes, due 2/1/11 | 1,512,246 | ||||||
990,000 | Lehman Brothers Holdings, Inc., 4.50% notes, due 7/26/10 | 973,734 | ||||||
990,000 | Morgan Stanley Co., 5.05% notes, due 1/21/11 | 982,407 | ||||||
5,489,483 | ||||||||
Food – Dairy Products – 0.5% | ||||||||
925,000 | Dean Foods Co., 6.625% senior notes, due 5/15/09 | 931,938 | ||||||
Food – Retail – 0.2% | ||||||||
470,000 | Kroger Co., 7.25% company guaranteed notes, due 6/1/09 | 480,258 | ||||||
Machinery – Construction and Mining – 0.3% | ||||||||
470,000 | Caterpillar Inc., 6.55% senior unsecured notes, due 5/1/11 | 503,169 | ||||||
Office Automation and Equipment – 0.8% | ||||||||
1,640,000 | Xerox Corp., 6.39625% senior unsecured notes, due 12/18/09‡ | 1,611,607 | ||||||
Oil Companies – Exploration and Production – 0.3% | ||||||||
490,000 | Anadarko Finance Co., 6.75% company guaranteed notes, due 5/1/11 | 517,560 | ||||||
Pipelines – 1.0% | ||||||||
935,000 | Kinder Morgan Energy Partners L.P., 6.75% senior unsecured notes, due 3/15/11 | 974,585 | ||||||
935,000 | Oneok Inc., 7.125% senior unsecured notes, due 4/15/11 | 984,557 | ||||||
1,959,142 | ||||||||
Reinsurance – 2.0% | ||||||||
3,823,000 | Berkshire Hathaway, Inc., 3.375% senior unsecured notes, due 10/15/08 | 3,825,817 | ||||||
REIT – Health Care – 0.5% | ||||||||
925,000 | HCA, Inc., 6.50% senior unsecured notes, due 2/15/16 | 955,063 | ||||||
Retail – Apparel and Shoe – 0.2% | ||||||||
505,000 | Hanesbrands, Inc., 8.78406% company guaranteed notes due 12/15/14‡,ß | 475,963 | ||||||
Retail – Drug Store – 0.2% | ||||||||
470,000 | CVS Caremark Corp. 4.00% senior unsecured notes, due 9/15/09 | 466,904 | ||||||
Retail – Hypermarkets – 0.5% | ||||||||
925,000 | New Albertsons, Inc., 6.95% senior secured notes, due 8/1/09 | 948,125 | ||||||
Retail – Restaurants – 0.6% | ||||||||
1,170,000 | Landry’s Restaurants, Inc., 9.50% company guaranteed notes due 12/15/14‡,# | 1,136,363 | ||||||
Rubber – Tires – 0.2% | ||||||||
305,000 | Goodyear Tire & Rubber Co., 9.13475% company guaranteed notes, due 12/1/09‡ | 305,381 | ||||||
Super-Regional Banks – 1.6% | ||||||||
1,525,000 | Bank of America Corp., 4.375% senior unsecured notes, due 12/1/10 | 1,536,704 | ||||||
980,000 | Wells Fargo Bank, N.A., 6.45% subordinated notes, due 2/1/11 | 1,028,269 | ||||||
580,000 | Wells Fargo & Company, 5.30% senior unsecured notes, due 8/26/11 | 591,957 | ||||||
3,156,930 | ||||||||
Telephone – Integrated – 0.7% | ||||||||
470,000 | AT&T Corp., 6.00% senior unsecured notes, due 3/15/09 | 476,758 | ||||||
785,000 | AT&T, Inc., 5.30% senior unsecured notes, due 11/15/10 | 808,836 | ||||||
1,285,594 | ||||||||
Transportation – Railroad – 0.2% | ||||||||
490,000 | Union Pacific Corp., 3.825% senior unsecured notes, due 2/15/09 | 489,843 | ||||||
Total Corporate Bonds (cost $31,486,436) | 31,136,840 | |||||||
U.S. Government Agencies – 8.8% | ||||||||
Fannie Mae: | ||||||||
2,135,000 | 5.125%, due 7/13/09 | 2,193,371 | ||||||
4,860,000 | 6.00%, due 5/15/11 | 5,232,582 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond and Money Market Funds April 30, 2008 33
Table of Contents
Janus Short-Term Bond Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Shares or Principal Amount | Value | |||||||
U.S. Government Agencies – (continued) | ||||||||
Federal Home Loan Bank System: | ||||||||
$ | 4,650,000 | 2.375%, due 4/30/10 | $ | 4,614,510 | ||||
2,000,000 | 2.75%, due 6/18/10 | 1,997,570 | ||||||
2,975,000 | Freddie Mac, 5.125% due 4/18/11 | 3,144,572 | ||||||
Total U.S. Government Agencies (cost $17,241,527) | 17,182,605 | |||||||
U.S. Treasury Notes/Bonds – 73.0% | ||||||||
U.S. Treasury Notes/Bonds: | ||||||||
336,000 | 4.625%, due 9/30/08 | 340,226 | ||||||
6,107,000 | 4.875%, due 10/31/08# | 6,203,375 | ||||||
3,010,000 | 4.375%, due 11/15/08 | 3,053,034 | ||||||
1,279,000 | 4.75%, due 12/31/08 | 1,304,580 | ||||||
14,263,000 | 4.875%, due 1/3109# | 14,592,832 | ||||||
9,083,000 | 4.50%, due 2/15/09 | 9,271,754 | ||||||
3,140,000 | 4.75%, due 2/28/09# | 3,214,085 | ||||||
845,000 | 4.50%, due 3/31/09 | 865,003 | ||||||
14,740,000 | 4.875%, due 5/31/09 | 15,191,412 | ||||||
2,692,000 | 4.00%, due 6/15/09# | 2,752,570 | ||||||
2,468,000 | 3.50%, due 8/15/09 | 2,511,383 | ||||||
1,720,000 | 3.625%, due 10/15/09 | 1,757,087 | ||||||
21,480,000 | 4.625%, due 11/15/09 | 22,272,074 | ||||||
265,000 | 3.25%, due 12/31/09 | 269,451 | ||||||
7,090,000 | 2.125%, due 1/31/10 | 7,076,153 | ||||||
4,983,000 | 4.75%, due 2/15/10 | 5,206,069 | ||||||
4,537,000 | 2.00%, due 2/28/10# | 4,516,797 | ||||||
13,874,000 | 4.50%, due 5/15/10# | 14,507,001 | ||||||
9,658,000 | 4.50%, due 11/15/10# | 10,183,907 | ||||||
1,750,000 | 3.375%, due 11/30/12# | 1,776,387 | ||||||
11,536,000 | 3.625%, due 12/31/12# | 11,846,030 | ||||||
2,776,000 | 2.50%, due 3/31/13# | 2,708,768 | ||||||
1,310,000 | 3.125%, due 4/30/13 | 1,316,857 | ||||||
Total U.S. Treasury Notes/Bonds (cost $140,283,640) | 142,736,835 | |||||||
Money Market – 0.2% | ||||||||
455,000 | Janus Institutional Money Market Fund – Institutional Shares, 2.74% (cost $455,000) | 455,000 | ||||||
Other Securities – 25.5% | ||||||||
18,134,839 | Allianz Dresdner Daily Asset Fund† | 18,134,839 | ||||||
7,842,381 | Repurchase Agreements† | 7,842,381 | ||||||
Time Deposits: | ||||||||
1,891,742 | Abbey National Treasury, N.A., 2.375% 5/1/08† | 1,891,742 | ||||||
844,015 | ABN-AMRO Bank N.V., N.A., 2.26% 5/1/08† | 844,015 | ||||||
984,426 | BNP Paribas, New York, N.A., 2.50% 5/1/08† | 984,426 | ||||||
1,968,852 | Calyon, N.A., 2.50%, 5/1/08† | 1,968,852 | ||||||
685,231 | Chase Bank USA, N.A., 2.25%, 5/1/08† | 685,231 | ||||||
2,165,737 | Danske Bank, Cayman Islands, N.A., 2.53% 5/1/08† | 2,165,737 | ||||||
1,378,196 | Deutsche Bank A.G., N.A., 2.30%, 5/1/08† | 1,378,196 | ||||||
1,968,852 | Dexia Bank S.A. Brussels, N.A., 2.50% 5/1/08† | 1,968,852 | ||||||
1,968,852 | ING Bank N.V., Amsterdam, N.A., 2.4375% 5/1/08† | 1,968,852 | ||||||
1,968,852 | Lloyd’s TSB Group PLC, N.A., 2.45% 5/1/08† | 1,968,852 | ||||||
291,295 | Natixis, N.A., 2.38%, 5/1/08† | 291,295 | ||||||
1,968,852 | Natixis, N.A., 2.43%, 5/1/08† | 1,968,852 | ||||||
1,968,852 | Nordea Bank Finland PLC, N.A., 2.50% 5/1/08† | $ | 1,968,852 | |||||
1,943,556 | Svenska Handelsbanken, N.A., 2.40% 5/1/08† | 1,943,556 | ||||||
1,968,852 | Wells Fargo Bank, N.A., 2.375%, 5/1/08† | 1,968,852 | ||||||
Total Other Securities (cost $49,943,382) | 49,943,382 | |||||||
Short-Term Taxable Variable Rate Demand Note – 0.5% | ||||||||
$ | 1,077,425 | California Infrastructure and Economic Development Bank Industrial Revenue Series B, 5.42%, 4/1/24† (amortized cost $1,077,425) | 1,077,425 | |||||
Total Investments (total cost $241,592,613) – 124.5% | 243,637,842 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (24.5)% | (47,979,674) | |||||||
Net Assets – 100% | $ | 195,658,168 | ||||||
Summary of Investments by Country – (Long Positions)
% of Investment | ||||||||
Country | Value | Securities | ||||||
United States†† | $ | 243,637,842 | 100.0% | |||||
Total | $ | 243,637,842 | 100.0% |
†† | Includes Short-Term Securities and Other Securities (78.9% excluding Short-Term Securities and Other Securities) |
See Notes to Schedules of Investments and Financial Statements.
34 Janus Bond and Money Market Funds April 30, 2008
Table of Contents
Janus Money Market Funds (unaudited)
Ticker: JAMXX
Janus Money Market Fund | Co-Portfolio Managers | |
Average Annual Total Return | Eric Thorderson | |
For the Periods Ended April 30, 2008 | Craig Jacobson | |
Investor Shares | ||
Fiscal Year-to-Date | 1.77% | |
1 Year | 4.28% | |
5 Year | 2.90% | |
10 Year | 3.42% | |
Since Inception (February 14, 1995) | 3.87% | |
Seven-Day Current Yield | ||
Investor Shares | ||
With Reimbursement | 2.16% | |
Without Reimbursement | 2.06% | |
Expense Ratios | ||
For the Fiscal Year ended October 31, 2007 | ||
Investor Shares | ||
Total Annual Fund Operating Expenses | 0.70% | |
Ticker: JAGXX
Janus Government Money Market Fund | Co-Portfolio Managers | |
Average Annual Total Return | Eric Thorderson | |
For the Periods Ended April 30, 2008 | Craig Jacobson | |
Investor Shares | ||
Fiscal Year-to-Date | 1.60% | |
1 Year | 4.00% | |
5 Year | 2.79% | |
10 Year | 3.32% | |
Since Inception (February 14, 1995) | 3.76% | |
Seven-Day Current Yield | ||
Investor Shares | ||
With Reimbursement | 1.85% | |
Without Reimbursement | 1.75% | |
Expense Ratios | ||
For the Fiscal Year ended October 31, 2007 | ||
Investor Shares | ||
Total Annual Fund Operating Expenses | 0.71% | |
Ticker: JATXX
Janus Tax-Exempt Money Market Fund | ||
Average Annual Total Return | Portfolio Manager | |
For the Periods Ended April 30, 2008 | Craig Jacobson | |
Investor Shares | ||
Fiscal Year-to-Date | 1.09% | |
1 Year | 2.72% | |
5 Year | 1.92% | |
10 Year | 2.19% | |
Since Inception (February 14, 1995) | 2.45% | |
Seven-Day Current Yield | ||
Investor Shares | ||
With Reimbursement | 1.85% | |
Without Reimbursement | 1.75% | |
Expense Ratios | ||
For the Fiscal Year ended October 31, 2007 | ||
Investor Shares | ||
Total Annual Fund Operating Expenses | 0.73% | |
Data presented represents past performance, which is no guarantee of future results. Current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
Investments in money market funds are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the money market funds.
Janus Capital Management LLC has agreed to waive one-half of its advisory fee. Such waiver is voluntary and could change or be terminated at any time at the discretion of Janus Capital. Total returns shown include fee waivers, if any, and without such waivers, the Fund’s yields and total returns would have been lower.
Each Fund’s expense ratios were determined based on average assets as of the fiscal year ended October 31, 2007. Detailed information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
Total return includes reinvestment of dividends and capital gains.
The yield more closely reflects the current earnings of each Money Market Fund than the total return.
The Funds will invest at least 80% of their net assets in the type of securities described by their name.
Income may be subject to state or local taxes and, to a limited extent, certain federal tax.
See Notes to Schedules of Investments and Financial Statements.
See “Explanations of Charts, Tables and Financial Statements.”
Janus Bond and Money Market Funds April 30, 2008 35
Table of Contents
Janus Money Market Fund (unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)* | |||||||||||
Actual | $ | 1,000.00 | $ | 1,017.70 | $ | 3.01 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.88 | $ | 3.02 | ||||||||
* | Expenses are equal to the annualized expense ratio of 0.60%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
Janus Government Money Market Fund (unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)* | |||||||||||
Actual | $ | 1,000.00 | $ | 1,016.00 | $ | 3.06 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.83 | $ | 3.07 | ||||||||
* | Expenses are equal to the annualized expense ratio of 0.61%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
Janus Tax-Exempt Money Market Fund (unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)* | |||||||||||
Actual | $ | 1,000.00 | $ | 1,010.90 | $ | 3.10 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.78 | $ | 3.12 | ||||||||
* | Expenses are equal to the annualized expense ratio of 0.62%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
36 Janus Bond and Money Market Funds April 30, 2008
Table of Contents
Janus Money Market Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Principal Amount | Value | |||||||
Certificates of Deposit – 19.2% | ||||||||
$ | 10,000,000 | Banco Bilboa Vizcaya, 2.72%, 10/8/08 | $ | 10,000,000 | ||||
15,000,000 | Banco Santander Totta S.A., 2.80%, 10/7/08 | 15,006,535 | ||||||
Bank of Montreal, Chicago: | ||||||||
25,000,000 | 2.72%, 10/2/08 | 25,000,000 | ||||||
25,000,000 | 2.72%, 10/3/08 | 25,000,000 | ||||||
20,000,000 | Calyon, New York, 2.73%, 10/14/08 | 20,004,548 | ||||||
40,000,000 | Dexia Bank, New York, 2.45%, 5/1/08 | 40,000,000 | ||||||
Fortis Bank, N.V.: | ||||||||
25,000,000 | 2.70%, 10/14/08 | 25,000,000 | ||||||
25,000,000 | 2.80%, 10/17/08 | 25,000,000 | ||||||
Mizuho Corporate Bank, New York: | ||||||||
15,000,000 | 2.86%, 5/8/08 | 15,000,000 | ||||||
40,000,000 | 2.78%, 7/11/08 | 40,000,001 | ||||||
Natexis Banques Populaires, New York: | ||||||||
20,000,000 | 2.90%, 7/7/08 | 20,000,000 | ||||||
20,000,000 | 3.15%, 10/23/08 | 20,000,000 | ||||||
25,000,000 | Shinkin Central Bank, New York, 3.09%, 5/6/08 | 25,000,000 | ||||||
Sumitomo Mitsui Banking Corp.: | ||||||||
20,000,000 | 2.91%, 5/8/08 | 20,000,000 | ||||||
20,000,000 | 2.90%, 5/19/08 | 20,000,000 | ||||||
10,000,000 | 2.88%, 5/23/08 | 10,000,000 | ||||||
5,000,000 | Svenska Handelsbanken AB, 5.00%, 10/9/08 | 5,000,000 | ||||||
Total Certificates of Deposit (amortized cost $360,011,084) | 360,011,084 | |||||||
Commercial Paper – 30.9% | ||||||||
59,000,000 | Atlantic Asset Securitization LLC, 2.72%, 5/15/08 (Section 4(2)) | 58,937,590 | ||||||
59,000,000 | Banco Bilbao Vizcaya, 2.65%, 5/5/08 (Section 4(2)) | 58,982,627 | ||||||
Bryant Park Funding LLC: | ||||||||
20,000,000 | 2.75%, 5/7/08 (Section 4(2)) | 19,990,833 | ||||||
15,000,000 | 2.77%, 5/15/08 (Section 4(2)) | 14,983,842 | ||||||
24,000,000 | 2.85%, 7/28/08 (Section 4(2)) | 23,832,800 | ||||||
20,000,000 | ICICI Bank, Ltd (LOC: Bank of America, N.A.), 2.80%, 9/30/08 | 19,763,556 | ||||||
20,000,000 | Lloyd’s TSB Group PLC, 2.85%, 10/24/08 | 20,000,000 | ||||||
50,000,000 | Manhattan Asset Funding Company LLC, 2.75%, 5/14/08 (Section 4(2)) | 49,950,347 | ||||||
23,200,000 | Medical Building Funding IV Series 2002 LLC, 2.86%, 5/2/08 | 23,198,157 | ||||||
Morrigan TRR Funding LLC: | ||||||||
50,000,000 | 3.22%, 5/13/08 | 49,946,333 | ||||||
9,000,000 | 3.20%, 5/16/08 | 8,988,000 | ||||||
10,000,000 | Natexis, 2.86%, 7/14/08 | 9,941,215 | ||||||
Nieuw Amsterdam Receivables Corp.: | ||||||||
7,000,000 | 2.85%, 5/27/08 (Section 4(2)) | 6,985,592 | ||||||
29,176,000 | 2.90%, 6/23/08 (Section 4(2)) | 29,051,435 | ||||||
55,000,000 | Scaldis Capital LLC, 3.00%, 5/7/08 (Section 4(2)) | 54,972,499 | ||||||
25,000,000 | Solitaire Funding LLC, 3.15%, 5/6/08 | 24,989,063 | ||||||
53,000,000 | Thames Asset Global Securitization No. 1, Inc., 2.95%, 7/11/08 (Section 4(2)) | 52,691,643 | ||||||
Three Pillars Funding LLC: | ||||||||
39,000,000 | 2.75%, 5/15/08 (Section 4(2)) | 38,958,292 | ||||||
20,000,000 | 2.91%, 5/27/08 (Section 4(2)) | 19,957,967 | ||||||
15,145,000 | Ticonderoga Funding LLC, 2.73%, 5/8/08 (144A) | 15,136,961 | ||||||
9,000,000 | Victory Receivables Corp., 2.80%, 5/8/08 (Section 4(2)) | 8,995,100 | ||||||
Total Commercial Paper (amortized cost $610,253,852) | 610,253,852 | |||||||
Floating Rate Notes – 26.7% | ||||||||
Allied Irish Banks: | ||||||||
10,000,000 | 2.78%, 8/18/08 (144A) | 9,991,571 | ||||||
5,000,000 | 3.21%, 11/19/08 | 5,000,000 | ||||||
10,000,000 | 3.31188%, 2/4/09 | 10,000,000 | ||||||
5,000,000 | ANZ National, 2.75125%, 9/5/08 (144A) | 5,000,084 | ||||||
15,996,000 | Ares VII CLO, Ltd., Class A-1A, 3.1775%, 5/8/15 (144A)§ | 15,996,000 | ||||||
31,000,000 | Banc of America Securities LLC, (same day put), 2.5475%, 5/1/08 | 31,000,000 | ||||||
7,466,000 | Banco Santander Totta S.A., 2.72313%, 9/15/08 (144A) | 7,466,000 | ||||||
25,000,000 | Barclay’s Bank, New York, 3.00%, 10/23/08 | 25,000,000 | ||||||
20,000,000 | BCP Finance Bank, Ltd., 2.75313%, 10/2/08 (144A) | 20,000,000 | ||||||
25,000,000 | BES Finance, Ltd., 2.75313%, 10/1/08 (144A) | 25,000,000 | ||||||
10,000,000 | Caja de Ahorros y Pensiones de Barcelona 2.92%, 7/23/08 (144A) | 10,000,000 | ||||||
45,000,000 | CAM U.S. Finance S.A., 4.7125%, 7/25/08 (144A) | 45,000,000 | ||||||
30,000,000 | Credit Suisse, 2.88563%, 1/12/09 | 30,024,104 | ||||||
4,266,000 | Dekabank, New York, 2.8675%, 11/19/15 (144A) | 4,266,000 | ||||||
15,000,000 | Dexia Bank, New York, 2.775%, 1/20/09 | 14,995,123 | ||||||
5,000,000 | Dorada Finance Corp., 2.82%, 8/20/08 (144A)§ | 4,999,090 | ||||||
HSH Nordbank A.G., New York: | ||||||||
6,399,000 | 2.81%, 9/19/08 (144A) | 6,399,000 | ||||||
19,195,000 | 2.9575%, 4/23/09 (144A) | 19,195,000 | ||||||
51,000,000 | Lehman Brothers, Inc. (90 day put) 2.5875%, 5/21/08ß | 51,000,000 | ||||||
6,399,000 | Natexis Banques Populaires, New York 2.72594%, 9/12/08 (144A) | 6,399,000 | ||||||
15,000,000 | Santander U.S. Debt S.A. Unipersonal 2.65875%, 9/19/08 (144A) | 15,016,127 | ||||||
5,000,000 | Sedna Finance, Inc., 2.90%, 8/20/08 (144A)§ | 5,000,000 | ||||||
Skandinaviska Enskilda Bank, New York: | ||||||||
6,900,000 | 3.05%, 8/21/08 | 6,893,744 | ||||||
15,000,000 | 2.58875%, 8/22/08 (144A) | 15,010,020 | ||||||
25,000,000 | Societe Generale, New York, 2.835% 6/30/08 | 24,990,030 | ||||||
21,328,000 | Totta (Ireland) PLC, 2.75125%, 9/5/08 (144A) | 21,328,000 | ||||||
Unicredito Italiano Bank (Ireland): | ||||||||
30,000,000 | 2.70563%, 8/8/08 (144A) | 30,000,000 | ||||||
17,916,000 | 2.75438%, 9/8/08 (144A) | 17,916,000 | ||||||
Union Hamilton Special Purpose Funding LLC: | ||||||||
5,000,000 | 3.10%, 6/16/08 (144A) | 5,000,000 | ||||||
15,000,000 | 2.89875%, 6/23/08 (144A) | 15,000,000 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond and Money Market Funds April 30, 2008 37
Table of Contents
Janus Money Market Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Principal Amount | Value | |||||||
Floating Rate Notes – (continued) | ||||||||
$ | 15,000,000 | Union Hamilton Special Purpose Funding LLC, 3.17125%, 6/30/08 (144A) | $ | 15,000,000 | ||||
29,859,000 | Westdeutsche Landesbank A.G. 2.791563%, 4/9/09 (144A) | 29,859,000 | ||||||
Total Floating Rate Notes (amortized cost $547,743,893) | 547,743,893 | |||||||
Repurchase Agreements – 20.7% | ||||||||
88,000,000 | Calyon, New York Branch 2.05%; dated 4/30/08; maturing 5/1/08; to be repurchased at $88,005,011; collateralized by $107,052,797 in U.S. Government Agencies; 3.265% – 3.295%, 1/25/37-4/25/37; with a value of $89,760,000 | 88,000,000 | ||||||
51,000,000 | Citigroup Global Markets, Inc., 2.6375%; dated 4/30/08; maturing 5/1/08; to be repurchased at $51,003,736; collateralized by $51,000,000 in Commercial Paper; 0.001%, 5/24/36 – 4/17/38; with a value of $59,134,451 | 51,000,000 | ||||||
41,000,000 | Deutsche Bank Securities, Inc., 2.588%; dated 4/30/08; maturing 5/1/08; to be repurchased at $41,002,947; collateralized by $82,117,264 in Collateralized Mortgage Obligations; 0%, 10/28/47; with a value of $41,820,000 | 41,000,000 | ||||||
59,000,000 | Dresdner Kleinwort Securities LLC, 2.5375%; dated 4/30/08; maturing 5/1/08; to be repurchased at $59,004,159; collateralized by $137,738,520 in Collateralized Mortgage Obligations; 0% – 5.86%, 7/20/35 – 9/20/46; with a value of $61,953,428 | 59,000,000 | ||||||
48,000,000 | JP Morgan Securities, Inc., 2.5875%; dated 4/30/08; maturing 5/1/08; to be repurchased at $48,003,450; collateralized by $48,000,000 in Corporate Notes; 0% – 11.625%, 1/15/10 – 3/1/42; with a value of $49,028,649 | 48,000,000 | ||||||
59,000,000 | RBC Capital Markets Corp., 2.5375%; dated 4/30/08; maturing 5/1/08; to be repurchased at $59,004,159; collateralized by $12,700,000 in Asset Backed Securities; 7.6021%, 6/25/43; $110,485,981 in Collateralized Mortgage Obligations; 6.723376%, 8/25/36; with respective values of $1,264,726 and $58,915,274 | 59,000,000 | ||||||
9,800,000 | RBC Capital Markets Corp., 2.00%; dated 4/30/08; maturing 5/1/08; to be repurchased at $9,800,544; collateralized by $11,388,989 in U.S. Government Agencies; 3.75% – 10.05%, 5/15/08 – 4/1/38; with a value of $9,996,000 | 9,800,000 | ||||||
51,000,000 | Wachovia Bank, N.A., 2.54%; dated 4/30/08; maturing 5/1/08; to be repurchased at $51,003,598; collateralized by $55,802,037 in Corporate Bonds; 0% – 11.50%, 8/5/08 – 12/31/49; with a value of $53,550,000 | 51,000,000 | ||||||
Total Repurchase Agreements (amortized cost $406,800,000) | 406,800,000 | |||||||
Short-Term Corporate Notes – 0.5% | ||||||||
10,000,000 | Mazarin Funding LLC, 5.33%, 5/15/08 (144A) (amortized cost $10,000,000) | 10,000,000 | ||||||
Taxable Variable Rate Demand Notes – 1.8% | ||||||||
Breckenridge Terrace LLC: | ||||||||
790,000 | 2.945%, 5/1/39 | 790,000 | ||||||
3,195,000 | 2.945%, 5/1/39 | 3,195,000 | ||||||
3,420,000 | Colorado Natural Gas, Inc., Series 2002, 2.94%, 7/1/32 | 3,420,000 | ||||||
1,795,000 | Cornerstone Funding Corp. I, Series 2003C, 2.74%, 4/1/13 | 1,795,000 | ||||||
185,000 | Edison Chouest Offshore LLC, 3.15%, 3/1/14 | 185,000 | ||||||
930,000 | FJM Properties-Wilmar, 3.00%, 10/1/24 | 930,000 | ||||||
3,180,000 | HHH Supply and Investment Co., 2.90%, 7/1/29 | 3,180,000 | ||||||
2,940,000 | Hillcrest Medical Plaza, 3.00%, 9/1/23 | 2,940,000 | ||||||
102,000 | Holston Medical Group, 3.15%, 1/1/13 | 102,000 | ||||||
755,000 | Lenexa, Kansas Industrial Revenue (Labone, Inc. Project), Series A, 2.97%, 9/1/09 | 755,000 | ||||||
110,000 | McElroy Metal Mill, Inc., Series 2003, 3.15%, 7/1/18 | 110,000 | ||||||
830,000 | Montgomery-Engelside, Alabama Medical Clinic Board Revenue, (Surgical Center), 2.90%, 3/1/24 | 830,000 | ||||||
2,300,000 | Racetrac Capital LLC, Series 1998-A, 2.93%, 4/1/18 | 2,300,000 | ||||||
5,400,000 | Rehau, Inc., 3.22%, 10/1/19 | 5,400,000 | ||||||
2,300,000 | Shoosmith Brothers, Inc., 2.93%, 3/1/15 | 2,300,000 | ||||||
4,060,000 | Timber Ridge County Affordable Housing Corp., Series 2003, 2.90%, 12/1/32 | 4,060,000 | ||||||
2,600,000 | Village Green Finance Co., 2.93%, 11/1/22 | 2,600,000 | ||||||
Total Taxable Variable Rate Demand Notes (amortized cost $34,892,000) | 34,892,000 | |||||||
Total Investments (total amortized cost $1,969,700,829) – 99.8% | 1,969,700,829 | |||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.2% | 4,250,746 | |||||||
Net Assets – 100% | $ | 1,973,951,575 | ||||||
See Notes to Schedules of Investments and Financial Statements.
38 Janus Bond and Money Market Funds April 30, 2008
Table of Contents
Janus Government Money Market Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Principal Amount | Value | |||||||
U.S. Government Agency Notes – 10.0% | ||||||||
Fannie Mae: | ||||||||
$ | 1,800,000 | 5.02%, 5/30/08 | $ | 1,792,721 | ||||
965,000 | 4.481%, 8/29/08 | 949,879 | ||||||
5,000,000 | 2.489%, 1/30/09 | 4,905,280 | ||||||
4,000,000 | 2.92%, 3/30/09 | 4,000,000 | ||||||
Federal Home Loan Bank System: | ||||||||
1,500,000 | 3.90%, 9/8/08 | 1,478,875 | ||||||
196,000 | 4.07%, 11/6/08 | 191,812 | ||||||
155,000 | 3.40%, 11/21/08 | 152,014 | ||||||
410,000 | 2.40%, 2/11/09 | 402,183 | ||||||
359,000 | 2.20%, 3/3/09 | 352,287 | ||||||
290,000 | 2.35%, 4/16/09 | 283,374 | ||||||
Freddie Mac: | ||||||||
1,060,000 | 4.75%, 5/30/08 | 1,055,944 | ||||||
1,673,000 | 4.92%, 6/13/08 | 1,663,168 | ||||||
2,000,000 | 4.98%, 6/23/08 | 1,985,337 | ||||||
327,000 | 4.36%, 9/15/08 | 321,574 | ||||||
3,000,000 | 3.93%, 12/8/08 | 2,927,623 | ||||||
Total U.S Government Agency Notes (amortized cost $22,462,071) | 22,462,071 | |||||||
U.S. Government Agency Variable Notes – 26.4% | ||||||||
Fannie Mae: | ||||||||
2,000,000 | 2.32%, 1/16/09 | 2,000,000 | ||||||
Federal Farm Credit Bank: | ||||||||
380,000 | 2.74625%, 10/28/08 | 379,927 | ||||||
3,000,000 | 2.60688%, 2/11/09 | 3,000,000 | ||||||
3,000,000 | 2.28%, 4/17/09 | 3,000,000 | ||||||
Federal Home Loan Bank System: | ||||||||
190,000 | 2.76%, 10/24/08 | 189,955 | ||||||
4,000,000 | 2.36%, 12/3/08 | 4,000,000 | ||||||
3,000,000 | 2.35%, 12/17/08 | 2,998,886 | ||||||
3,000,000 | 2.75%, 2/20/09 | 3,000,000 | ||||||
5,000,000 | 2.9118%, 2/27/09 | 5,001,481 | ||||||
3,000,000 | 2.618%, 3/13/09 | 3,000,000 | ||||||
3,000,000 | 2.85%, 3/17/09 | 3,000,000 | ||||||
3,000,000 | 2.68%, 3/27/09 | 3,000,000 | ||||||
10,000,000 | 2.415%, 4/21/09 | 10,000,000 | ||||||
3,000,000 | 2.65%, 5/6/09 | 3,000,000 | ||||||
5,000,000 | 2.41%, 6/18/08 | 5,000,000 | ||||||
Freddie Mac: | ||||||||
5,450,000 | 2.60%, 3/18/09 | 5,450,000 | ||||||
2,000,000 | 2.6487%, 4/7/09 | 2,000,000 | ||||||
1,245,072 | 2.895%, 1/15/42 | 1,245,072 | ||||||
Total U.S. Government Agency Variable Notes (amortized cost $59,265,321) | 59,265,321 | |||||||
U.S. Government Guaranteed Loan Notes – 5.8% | ||||||||
Army & Air Force Exchange Services: | ||||||||
6,000,000 | 3.16%, 5/6/08 | 5,999,999 | ||||||
2,000,000 | 2.97%, 5/7/08ß | 2,000,000 | ||||||
5,000,000 | 3.26%, 6/27/08ß | 5,000,000 | ||||||
Total U.S. Government Guaranteed Loan Notes (amortized cost $12,999,999) | 12,999,999 | |||||||
Floating Rate Notes – 1.8% | ||||||||
Cypress Bend Real Estate Development LLC | ||||||||
4,000,000 | 2.82%, 4/1/33 (amortized cost $4,000,000) | 4,000,000 | ||||||
Repurchase Agreements – 57.2% | ||||||||
33,000,000 | Calyon, New York Branch, 2.05%; dated 4/30/08; maturing 5/1/08; to be repurchased at $33,001,879; collateralized by $40,144,799 in U.S. Government Agencies; 3.265% – 3.295%, 1/25/37-4/25/37; with a value of $33,660,000 | 33,000,000 | ||||||
30,700,000 | Credit Suisse Securities (USA) LLC, 2.4575%; dated 4/30/08; maturing 5/1/08; to be repurchased at $30,702,096; collateralized by $63,023,600 in U.S. Government Agencies; 3.185% – 14.30928%, 5/25/17 – 2/25/38; with a value of $31,314,152 | 30,700,000 | ||||||
33,000,000 | Deutsche Bank Securities, Inc., 2.00%; dated 4/30/08; maturing 5/1/08; to be repurchased at $33,001,833; collateralized by $34,567,606 in U.S. Government Agencies; 5.0% – 6.5%, 11/01/37 – 3/1/38; with a value of $33,660,000 | 33,000,000 | ||||||
30,000,000 | ING Financial Markets LLC, 1.98%; dated 4/30/08; maturing 5/1/08; to be repurchased at $30,001,650; collateralized by $34,696,573 in U.S. Government Agencies; 4.25% – 7.015%, 7/29/08 – 10/1/46; with a value of $30,600,191 | 30,000,000 | ||||||
1,900,000 | RBC Capital Markets Corp., 2.00%; dated 4/30/08; maturing 5/1/08; to be repurchased at $1,900,106; collateralized by $2,208,069 in U.S. Government Agencies; 3.75% – 10.05%, 5/15/08 – 4/1/38; with a value of $1,938,000 | 1,900,000 | ||||||
Total Repurchase Agreements (amortized cost $128,600,000) | 128,600,000 | |||||||
Total Investments (total amortized cost $227,327,391) – 101.2% | 227,327,391 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (1.2)% | (2,665,293) | |||||||
Net Assets – 100% | $ | 224,662,098 | ||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Bond and Money Market Funds April 30, 2008 39
Table of Contents
Janus Tax-Exempt Money Market Fund
Schedule of Investments (unaudited)
As of April 30, 2008
Principal Amount | Value | |||||||
Municipal Securities – 96.1% | ||||||||
Arizona – 0.3% | ||||||||
$ | 300,000 | Casa Grande, Arizona, Industrial Development Authority Multi-family Housing Revenue Variable Rate, 2.56%, 6/15/31 | $ | 300,000 | ||||
Colorado – 19.5% | ||||||||
3,000,000 | Brighton Crossing Metropolitan District No.4 Variable Rate, 2.55%, 12/1/34 | 3,000,000 | ||||||
3,525,000 | Colorado Educational and Cultural Facilities Authority Revenue, Variable Rate, 2.68%, 5/15/38 | 3,525,000 | ||||||
1,990,000 | Commerce City, Colorado, Northern Infrastructure General Improvement District, Variable Rate, 2.48%, 12/1/31 | 1,990,000 | ||||||
Ebert Metropolitan District Securitization Trust: | ||||||||
4,000,000 | Series 2004-S1 Variable Rate, 2.55%, 12/1/34 | 4,000,000 | ||||||
1,300,000 | Series 2005-S1 Variable Rate, 2.55%, 12/1/09 | 1,300,000 | ||||||
2,750,000 | NBC Metropolitan District, Colorado Variable Rate, 2.48%, 12/1/30 | 2,750,000 | ||||||
1,000,000 | Telluride, Colorado, Excise Tax Revenue (Open Space Project) Variable Rate, 2.65%, 12/1/36 | 1,000,000 | ||||||
17,565,000 | ||||||||
Delaware – 1.2% | ||||||||
1,100,000 | Delaware Economic Development Authority (Archmere Academy, Inc. Project), Variable Rate, 2.43%, 7/1/36 | 1,100,000 | ||||||
District of Columbia – 2.2% | ||||||||
1,975,000 | District of Columbia Revenue (Market School) Variable Rate, 2.70%, 10/1/33 | 1,975,000 | ||||||
Florida – 5.3% | ||||||||
660,000 | Florida State Board Regent Housing Revenue, (Florida International University), 6.30%, 7/1/08 | 663,244 | ||||||
2,000,000 | Jacksonville, Florida, Educational Facilities Revenue, (Edward Waters College Project), Variable Rate, 2.45%, 12/1/29 | 2,000,000 | ||||||
900,000 | Palm Beach County, Florida, Health Facilities Authority Revenue, (Bethesda Healthcare System Project), Variable Rate, 2.58%, 12/1/31 | 900,000 | ||||||
1,250,000 | Pinellas County, Florida, Health Facilities Authority Revenue, (Bayfront Project), Variable Rate, 2.58%, 7/1/34 | 1,250,000 | ||||||
4,813,244 | ||||||||
Georgia – 7.4% | ||||||||
300,000 | Athens-Clarke County, Georgia, Development Authority Revenue, (University of Georgia Athletic Association Project), Variable Rate, 2.58%, 9/1/31 | 300,000 | ||||||
3,015,000 | Cobb County, Georgia, Housing Authority, (Cobb – Six Flags Association), Variable Rate, 2.57%, 11/15/29 | 3,015,000 | ||||||
855,000 | DeKalb County, Georgia, Development Authority Revenue, (Martins Episcopal School), Variable Rate, 2.49%, 10/1/22 | 855,000 | ||||||
2,460,000 | Roswell, Georgia, Housing Authority Multifamily Revenue, (Wood Crossing Project), (Freddie Mac Insured), Variable Rate, 2.43%, 8/1/24 | 2,460,000 | ||||||
6,630,000 | ||||||||
Illinois – 10.2% | ||||||||
600,000 | Chicago, Illinois, Tax Increment, Series B, Variable Rate, 2.73%, 12/1/14 | 600,000 | ||||||
Illinois Development Finance Authority Revenue: | ||||||||
4,400,000 | (Shelby Memorial Hospital Association, Inc.), Series B-1, Variable Rate, 2.75%, 10/1/29 | 4,400,000 | ||||||
425,000 | (St. Anthony’s Health Center), Program E-1, Variable Rate, 2.72%, 10/1/29 | 425,000 | ||||||
2,300,000 | Illinois Finance Authority Revenue, (Resurrection Health), Series B, 2.78%, due 5/15/35 | 2,300,000 | ||||||
1,400,000 | Montgomery, Illinois, Special Service Area, (Blackberry Crossing West), Variable Rate, 2.67%, due 3/1/25 | 1,400,000 | ||||||
9,125,000 | ||||||||
Iowa – 7.2% | ||||||||
5,250,000 | Buffalo, Iowa, Pollution Control Revenue, (LaFarge Corp.), Series B, Variable Rate, 2.70%, 10/1/10 | 5,250,000 | ||||||
1,275,000 | Iowa Finance Authority Small Business Development Revenue, (Terrace Center Association), Variable Rate, 2.60%, 3/1/22 | 1,275,000 | ||||||
6,525,000 | ||||||||
Kentucky – 0.8% | ||||||||
685,000 | Hardin County, Kentucky, Water District Revenue, Variable Rate, 2.48%, 9/1/22 | 685,000 | ||||||
Maryland – 3.1% | ||||||||
1,300,000 | Maryland State Economic Development Corp., (Emerge Inc. Facilities), Series A, Variable Rate, 2.43%, 4/1/22 | 1,300,000 | ||||||
1,500,000 | Maryland State Health and Higher Educational Facilities Authority Revenue, (Bishop McNamara High School), Variable Rate, 2.43%, 7/1/32 | 1,500,000 | ||||||
2,800,000 | ||||||||
Massachusetts – 3.5% | ||||||||
2,300,000 | Massachusetts State Health and Educational Facilities Authority Revenue, (Alliance Health Southeastern), Variable Rate, 2.46%, 7/1/37 | 2,300,000 | ||||||
823,000 | Massachusetts State Industrial Finance Agency, (Chestnut House Apartments), Variable Rate, 2.75%, 8/1/26 | 823,000 | ||||||
3,123,000 | ||||||||
Michigan – 1.5% | ||||||||
1,390,000 | Eastern Michigan University Revenues, (FGIC Insured), Series A, 5.80%, 6/1/08 | 1,392,374 | ||||||
See Notes to Schedules of Investments and Financial Statements.
40 Janus Bond and Money Market Funds April 30, 2008
Table of Contents
Schedule of Investments (unaudited)
As of April 30, 2008
Principal Amount | Value | |||||||
Minnesota – 3.4% | ||||||||
$ | 300,000 | North Suburban Hospital District Minnanoka and Ramsey Counties Hospital Revenue, (Health Center), Variable Rate, 2.40%, 8/1/14 | $ | 300,000 | ||||
1,100,000 | Stillwater, Minnesota, Private School Facilities Revenue, (Catholic Finance Corp. Project), Variable Rate, 2.60%, 12/1/22 | 1,100,000 | ||||||
St. Paul, Minnesota, Housing and Redevelopment Authority Revenue: | ||||||||
1,005,000 | (Goodwill/Easter Seals), Variable Rate, 2.60%, 8/1/25 | 1,005,000 | ||||||
500,000 | Variable Rate, 2.60%, 10/1/25 | 500,000 | ||||||
200,000 | St. Paul, Minnesota, Port Authority Revenue, Variable Rate, 2.60%, 4/1/36 | 200,000 | ||||||
3,105,000 | ||||||||
Missouri – 4.8% | ||||||||
100,000 | Kansas City, Missouri, Industrial Development Authority Multi-family Housing Revenue, Variable Rate, 2.56%, 11/1/30 | 100,000 | ||||||
Missouri Health and Educational Facilities Authority Revenue: | ||||||||
3,900,000 | (Var-Ranken Technical College), Variable Rate, 2.60%, 11/15/31 | 3,900,000 | ||||||
300,000 | (Washington University), Series C, Variable Rate, 2.65%, 3/1/40 | 300,000 | ||||||
4,300,000 | ||||||||
Nebraska – 2.1% | ||||||||
1,900,000 | Norfolk, Nebraska, Industrial Development Revenue, (Supervalu, Inc.), Variable Rate, 2.65%, 11/1/14 | 1,900,000 | ||||||
New Jersey – 3.3% | ||||||||
3,000,000 | New Jersey Economic Development Authority Revenue, Variable Rate, 2.60%, 3/1/31 | 3,000,000 | ||||||
New York – 2.7% | ||||||||
2,400,000 | Nassau County, New York, Industrial Development Agency, (Amsterdam at Harborside), Variable Rate, 2.53%, 1/1/28 | 2,400,000 | ||||||
North Carolina – 0.4% | ||||||||
400,000 | New Hanover County, North Carolina, Industrial Facilities and Pollution Central Financing, (Corning Project), Variable Rate, 2.45%, 5/1/10 | 400,000 | ||||||
North Dakota – 0.6% | ||||||||
500,000 | Grand Forks Hospital Facilities Revenue, (United Hospital Obligation Group), Variable Rate, 2.68%, 12/1/16 | 500,000 | ||||||
Ohio – 1.1% | ||||||||
995,000 | Akron Bath Copley, Ohio, Joint Township Hospital District Revenue, (Summner Project), Variable Rate, 2.48%, 12/1/32 | 995,000 | ||||||
Pennsylvania – 2.3% | ||||||||
1,300,000 | Delaware County Pennsylvania, (Dunwoody Village), Variable Rate, 2.43%, 4/1/30 | 1,300,000 | ||||||
745,000 | Pennsylvania Higher Educational Facilities Authority Revenue, (Mercyhurst College), Series E1, Variable Rate, 2.38%, 11/1/19 | 745,000 | ||||||
2,045,000 | ||||||||
Texas – 5.5% | ||||||||
1,000,000 | Austin, Texas, Housing Finance Corporation Revenue, (Stassney Woods Apartments), (Fannie Mae Insured), Variable Rate, 2.60% 10/15/32 | 1,000,000 | ||||||
365,000 | Bell County, Texas, Health Facilities Development, (Baptist Care, Inc.), Variable Rate, 3.00%, 5/1/23 | 365,000 | ||||||
600,000 | Garland, Texas, Health Facilities Development Corp., (Chambrel Club Hill), (Fannie Mae Insured), Variable Rate, 2.44%, 11/15/32 | 600,000 | ||||||
3,000,000 | Texas State Tax and Revenue Anticipation Notes, 4.50%, 8/28/08 | 3,028,786 | ||||||
4,993,786 | ||||||||
Washington – 4.0% | ||||||||
1,625,000 | Washigton State Economic Development Revenue, (Benaroya Research), Variable Rate, 2.48%, 12/1/24 | 1,625,000 | ||||||
2,000,000 | Washington State Housing Finance Community Revenue, (Eastside Catholic School), Variable Rate, 2.47%, 7/1/38 | 2,000,000 | ||||||
3,625,000 | ||||||||
Wisconsin – 2.5% | ||||||||
2,265,000 | Wisconsin State Health and Educational Facilities Authority Revenue, (Grace Luthern Foundation Project), Variable Rate, 2.72%, 6/1/25 | 2,265,000 | ||||||
Wyoming – 1.2% | ||||||||
Sweetwater County, Wyoming, Hospital Revenue, (Memorial Hospital Project): | ||||||||
400,000 | Series A, Variable Rate, 2.58%, 9/1/37 | 400,000 | ||||||
650,000 | Series B, Variable Rate, 2.56%, 9/1/37 | 650,000 | ||||||
1,050,000 | ||||||||
Total Investments (total amortized cost $86,612,404) – 96.1% | 86,612,404 | |||||||
Cash, Receivables and Other Assets, net of Liabilities – 3.9% | 3,501,196 | |||||||
Net Assets – 100% | $ | 90,113,600 | ||||||
See Notes to Schedules of Investments and Financial Statements.
Janus Bond and Money Market Funds April 30, 2008 41
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Statements of Assets and Liabilities – Bond Funds
As of April 30, 2008 (unaudited) | Janus Flexible | Janus High-Yield | Janus Short-Term | |||||||||||
(all numbers in thousands except net asset value per share) | Bond Fund | Fund | Bond Fund | |||||||||||
Assets: | ||||||||||||||
Investments at cost(1) | $ | 1,144,835 | $ | 563,362 | $ | 241,593 | ||||||||
Unaffiliated investments at value(1) | $ | 1,063,810 | $ | 513,267 | $ | 243,183 | ||||||||
Affiliated money market investments | 99,312 | 43,659 | 455 | |||||||||||
Cash | 515 | 1,687 | 223 | |||||||||||
Receivables: | ||||||||||||||
Investments sold | 12,790 | 5,900 | 5,568 | |||||||||||
Fund shares sold | 370 | 558 | 179 | |||||||||||
Interest | 11,290 | 11,069 | 2,802 | |||||||||||
Non-interested Trustees’ deferred compensation | 16 | 9 | 3 | |||||||||||
Other assets | 58 | 4 | 1 | |||||||||||
Total Assets | 1,188,161 | 576,153 | 252,414 | |||||||||||
Liabilities: | ||||||||||||||
Payables: | ||||||||||||||
Collateral for securities loaned (Note 1) | 218,546 | 29,795 | 49,943 | |||||||||||
Investments purchased | 65,913 | 23,425 | 6,205 | |||||||||||
Fund shares repurchased | 918 | 686 | 449 | �� | ||||||||||
Dividends and distributions | 170 | 185 | 11 | |||||||||||
Advisory fees | 375 | 251 | 59 | |||||||||||
Transfer agent fees and expenses | 175 | 122 | 58 | |||||||||||
Non-interested Trustees’ fees and expenses | 7 | 6 | 2 | |||||||||||
Non-interested Trustees’ deferred compensation fees | 16 | 9 | 3 | |||||||||||
Accrued expenses | – | 34 | 26 | |||||||||||
Total Liabilities | 286,120 | 54,513 | 56,756 | |||||||||||
Net Assets | $ | 902,041 | $ | 521,640 | $ | 195,658 | ||||||||
Net Assets Consist of: | ||||||||||||||
Capital (par value and paid-in surplus)* | $ | 902,416 | $ | 586,462 | $ | 198,707 | ||||||||
Undistributed net investment income/(loss)* | 1,203 | 319 | 54 | |||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | (20,020) | (58,706) | (5,148) | |||||||||||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 18,442 | (6,435) | 2,045 | |||||||||||
Total Net Assets | $ | 902,041 | $ | 521,640 | $ | 195,658 | ||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 93,075 | 57,791 | 67,794 | |||||||||||
Net Asset Value Per Share | $ | 9.69 | $ | 9.03 | $ | 2.89 |
* | See Note 4 in Notes to Financial Statements. |
(1) | Investments at cost and value include $213,754,560, $29,097,099, and $48,772,783 of securities loaned for Janus Flexible Bond Fund, Janus High – Yield Fund, and Janus Short – Term Bond Fund, respectively (Note 1). |
See Notes to Financial Statements.
42 Janus Bond and Money Market Funds April 30, 2008
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Statements of Operations – Bond Funds
For the six-month period ended April 30, 2008 (unaudited) | Janus Flexible | Janus High-Yield | Janus Short-Term | |||||||||||
(all numbers in thousands) | Bond Fund | Fund | Bond Fund | |||||||||||
Investment Income: | ||||||||||||||
Interest | $ | 19,253 | $ | 20,678 | $ | 4,040 | ||||||||
Securities lending income | 812 | 96 | 188 | |||||||||||
Dividends | 306 | 146 | – | |||||||||||
Dividends from affiliates | 667 | 1,256 | 136 | |||||||||||
Total Investment Income | 21,038 | 22,176 | 4,364 | |||||||||||
Expenses: | ||||||||||||||
Advisory fees | 2,126 | 1,578 | 591 | |||||||||||
Transfer agent fees and expenses | 898 | 606 | 222 | |||||||||||
Registration fees | 20 | 36 | 12 | |||||||||||
Postage and mailing expenses | 25 | 15 | 7 | |||||||||||
Custodian fees | – | 13 | 7 | |||||||||||
Professional fees | 16 | 13 | 8 | |||||||||||
Non-interested Trustees’ fees and expenses | 6 | 4 | 1 | |||||||||||
Printing expenses | 24 | 15 | 9 | |||||||||||
Other expenses | 35 | 34 | 26 | |||||||||||
Non-recurring costs (Note 2) | – | – | – | |||||||||||
Cost assumed by Janus Capital Management LLC (Note 2) | – | – | – | |||||||||||
Total Expenses | 3,150 | 2,314 | 883 | |||||||||||
Expense and Fee Offset | (38) | (42) | (9) | |||||||||||
Net Expenses | 3,112 | 2,272 | 874 | |||||||||||
Less: Excess Expense Reimbursement | – | – | (284) | |||||||||||
Net Expenses after Expense Reimbursement | 3,112 | 2,272 | 590 | |||||||||||
Net Investment Income/(Loss) | 17,926 | 19,904 | 3,774 | |||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | ||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 7,053 | (33,084) | (2,030) | |||||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 12,011 | 2,253 | 1,889 | |||||||||||
Payment from affiliate (Note 2) | – | 61 | – | |||||||||||
Net Gain/(Loss) on Investments | 19,064 | (30,770) | (141) | |||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 36,990 | $ | (10,866) | $ | 3,633 |
See Notes to Financial Statements.
Janus Bond and Money Market Funds April 30, 2008 43
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Statements of Changes in Net Assets – Bond Funds
For the six-month period ended April 30, 2008 (unaudited) | Janus Flexible | Janus High-Yield | Janus Short-Term | |||||||||||||||||||||||
and for the fiscal year ended October 31, 2007 | Bond Fund | Fund | Bond Fund | |||||||||||||||||||||||
(all numbers in thousands) | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | $ | 17,926 | $ | 36,371 | $ | 19,904 | $ | 43,715 | $ | 3,774 | $ | 7,985 | ||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 7,053 | (3,797) | (33,084) | 1,271 | (2,030) | (566) | ||||||||||||||||||||
Net realized gain/(loss) from futures contracts | – | (114) | – | – | – | – | ||||||||||||||||||||
Net realized gain/(loss) from short sales | – | 17 | – | – | – | – | ||||||||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 12,011 | 6,132 | 2,253 | (15,451) | 1,889 | 803 | ||||||||||||||||||||
Payment from affiliate (Note 2) | – | 38 | 61 | 8 | – | 6 | ||||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 36,990 | 38,647 | (10,866) | 29,543 | 3,633 | 8,228 | ||||||||||||||||||||
Dividends and Distributions to Shareholders: | ||||||||||||||||||||||||||
Net investment income* | (17,843) | (36,463) | (19,891) | (43,659) | (3,747) | (7,978) | ||||||||||||||||||||
Net realized gain/(loss) from investment transactions* | – | – | – | – | – | – | ||||||||||||||||||||
Net (Decrease) from Dividends and Distributions | (17,843) | (36,463) | (19,891) | (43,659) | (3,747) | (7,978) | ||||||||||||||||||||
Capital Share Transactions: | ||||||||||||||||||||||||||
Shares sold | 197,712 | 142,761 | 56,379 | 241,189 | 51,517 | 45,519 | ||||||||||||||||||||
Redemption fees | N/A | N/A | 58 | 220 | N/A | N/A | ||||||||||||||||||||
Reinvested dividends and distributions | 16,605 | 33,662 | 18,161 | 39,712 | 3,635 | 7,704 | ||||||||||||||||||||
Shares repurchased | (90,999) | (185,894) | (114,077) | (186,748) | (32,022) | (56,089) | ||||||||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | 123,318 | (9,471) | (39,479) | 94,373 | 23,130 | (2,866) | ||||||||||||||||||||
Net Increase/(Decrease) in Net Assets | 142,465 | (7,287) | (70,236) | 80,257 | 23,016 | (2,616) | ||||||||||||||||||||
Net Assets: | ||||||||||||||||||||||||||
Beginning of period | 759,576 | 766,863 | 591,876 | 511,619 | 172,642 | 175,258 | ||||||||||||||||||||
End of period | $ | 902,041 | $ | 759,576 | $ | 521,640 | $ | 591,876 | $ | 195,658 | $ | 172,642 | ||||||||||||||
Undistributed net investment income/(loss)* | $ | 1,203 | $ | 1,120 | $ | 319 | $ | 306 | $ | 54 | $ | 27 |
* | See Note 4 in Notes to Financial Statements. |
See Notes to Financial Statements.
44 Janus Bond and Money Market Funds April 30, 2008
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Financial Highlights – Bond Funds
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2008 (unaudited) | Janus Flexible Bond Fund | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.45 | $9.42 | $9.41 | $9.76 | $9.74 | $9.51 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .21 | .46 | .42 | .40 | .46 | .46 | ||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | .24 | .02 | .02 | (.34) | .01 | .21 | ||||||||||||||||||||
Total from Investment Operations | .45 | .48 | .44 | .06 | .47 | .67 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.21) | (.45) | (.43) | (.41) | (.45) | (.44) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Payment from affiliate | – | –(1) | –(1) | –(1) | –(1) | – | ||||||||||||||||||||
Total Distributions and Other | (.21) | (.45) | (.43) | (.41) | (.45) | (.44) | ||||||||||||||||||||
Net Asset Value, End of Period | $9.69 | $9.45 | $9.42 | $9.41 | $9.76 | $9.74 | ||||||||||||||||||||
Total Return ** | 4.75% | 5.27%(2) | 4.80%(2) | 0.60%(2) | 4.97%(2) | 7.12% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $902,041 | $759,576 | $766,863 | $935,168 | $1,159,921 | $1,533,940 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $834,826 | $755,593 | $827,407 | $1,037,336 | $1,288,903 | $1,731,995 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.76% | 0.80% | 0.83% | 0.78% | 0.85% | 0.83% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.75% | 0.80% | 0.82% | 0.77% | 0.85% | 0.83% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.32% | 4.81% | 4.37% | 4.01% | 4.27% | 4.47% | ||||||||||||||||||||
Portfolio Turnover Rates*** | 133% | 140%(5) | 144%(5) | 174%(5) | 149% | 163% |
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2008 (unaudited) | Janus High-Yield Fund | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.53 | $9.69 | $9.48 | $9.86 | $9.55 | $8.82 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .34 | .73 | .71 | .65 | .67 | .64 | ||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | (.50) | (.16) | .20 | (.38) | .31 | .72 | ||||||||||||||||||||
Total from Investment Operations | (.16) | .57 | .91 | .27 | .98 | 1.36 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.34) | (.73) | (.70) | (.65) | (.67) | (.64) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Redemption Fees | –(6) | –(6) | –(6) | –(6) | –(6) | .01 | ||||||||||||||||||||
Payment from affiliate | –(1) | –(1) | –(1) | –(1) | – | – | ||||||||||||||||||||
Total Distributions and Other | (.34) | (.73) | (.70) | (.65) | (.67) | (.63) | ||||||||||||||||||||
Net Asset Value, End of Period | $9.03 | $9.53 | $9.69 | $9.48 | $9.86 | $9.55 | ||||||||||||||||||||
Total Return** | (1.65)%(7) | 6.04%(2) | 10.00%(2) | 2.76%(2) | 10.62% | 16.00% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $521,640 | $591,876 | $511,619 | $523,183 | $557,836 | $768,033 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $533,863 | $579,507 | $490,849 | $548,993 | $582,992 | $842,175 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.87% | 0.87% | 0.91%(8) | 0.88% | 0.96% | 0.95% | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.86% | 0.86% | 0.90% | 0.87% | 0.96% | 0.95% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 7.50% | 7.54% | 7.37% | 6.65% | 6.96% | 6.90% | ||||||||||||||||||||
Portfolio Turnover Rates*** | 120% | 114% | 119% | 102% | 133% | 203% |
* | See Note 4 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year or period ended. | |
(2) | During the fiscal year ended, Janus Capital and/or Janus Services LLC (“Janus Services”) fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%. | |
(3) | See “Explanations of Charts, Tables and Financial Statements.” | |
(4) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2008, 2007, 2006, 2005 and 2004. | |
(5) | Excluding mortgage dollar roll transactions. If mortgage dollar roll transactions had been included, the portfolio turnover rate would have been 141% in 2007, 147% in 2006 and 180% in 2005. | |
(6) | Redemption fees aggregated less than $.01 on a per share basis for the fiscal year or period ended. | |
(7) | During the fiscal year or period ended, Janus Capital and/or Janus Services fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by 0.01%. | |
(8) | The ratio was 0.93% in 2006 before waiver of certain fees incurred by the Fund. |
See Notes to Financial Statements.
Janus Bond and Money Market Funds April 30, 2008 45
Table of Contents
Financial Highlights – Bond Funds (continued)
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2008 (unaudited) | Janus Short-Term Bond Fund | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $2.88 | $2.88 | $2.87 | $2.94 | $2.97 | $2.93 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .06 | .13 | .11 | .08 | .08 | .08 | ||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | .01 | – | .01 | (.06) | .01 | .04 | ||||||||||||||||||||
Total from Investment Operations | .07 | .13 | .12 | .02 | .09 | .12 | ||||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.06) | (.13) | (.11) | (.08) | (.08) | (.08) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | (.01) | (.04) | – | ||||||||||||||||||||
Payment from affiliate | – | –(1) | –(1) | –(1) | – | – | ||||||||||||||||||||
Total Distributions and Other | (.06) | (.13) | (.11) | (.09) | (.12) | (.08) | ||||||||||||||||||||
Net Asset Value, End of Period | $2.89 | $2.88 | $2.88 | $2.87 | $2.94 | $2.97 | ||||||||||||||||||||
Total Return** | 2.39% | 4.74%(2) | 4.08%(2) | 0.65%(2) | 2.94% | 4.12% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $195,658 | $172,642 | $175,258 | $201,493 | $270,761 | $366,037 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $186,488 | $172,326 | $182,285 | $233,536 | $299,461 | $456,695 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.65%(5) | 0.65%(5) | 0.65%(5) | 0.65%(5) | 0.65%(5) | 0.65%(5) | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Asset***(3) | 0.64% | 0.64% | 0.64% | 0.64% | 0.65% | 0.65% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.07% | 4.63% | 3.65% | 2.75% | 2.64% | 2.68% | ||||||||||||||||||||
Portfolio Turnover Rates*** | 258% | 130% | 120% | 97% | 110% | 238% |
* | See Note 4 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year ended. | |
(2) | During the fiscal year ended, Janus Capital and/or Janus Services fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%. | |
(3) | See “Explanations of Charts, Tables and Financial Statements.” | |
(4) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2008, 2007, 2006, 2005 and 2004. | |
(5) | The ratio was 0.95% in 2008, 1.01% in 2007, 1.06% in 2006, 0.97% in 2005, 1.00% in 2004 and 0.91% in 2003 before waiver of certain fees incurred by the Fund. |
See Notes to Financial Statements.
46 Janus Bond and Money Market Funds April 30, 2008
Table of Contents
Statements of Assets and Liabilities – Money Market Funds
Janus Government | Janus Tax-Exempt | |||||||||||||
As of April 30, 2008 (unaudited) | Janus Money | Money | Money | |||||||||||
(all numbers in thousands except net asset value per share) | Market Fund | Market Fund | Market Fund | |||||||||||
Assets: | ||||||||||||||
Investments at amortized cost | $ | 1,562,901 | $ | 98,727 | $ | 86,612 | ||||||||
Repurchase Agreements | 406,800 | 128,600 | – | |||||||||||
Cash | 354 | 202 | 12 | |||||||||||
Receivables: | ||||||||||||||
Investments sold | 1,880 | – | 4,240 | |||||||||||
Fund shares sold | 3,248 | 363 | 42 | |||||||||||
Interest | 2,737 | 268 | 267 | |||||||||||
Non-interested Trustees’ deferred compensation | 34 | 4 | 2 | |||||||||||
Other assets | 1 | – | – | |||||||||||
Total Assets | 1,977,955 | 228,164 | 91,175 | |||||||||||
Liabilities: | ||||||||||||||
Payables: | ||||||||||||||
Investments purchased | – | 3,000 | 926 | |||||||||||
Fund shares repurchased | 2,595 | 377 | 75 | |||||||||||
Dividends and distributions | 377 | 5 | 9 | |||||||||||
Advisory fees | 162 | 18 | 7 | |||||||||||
Administrative services fees | 813 | 92 | 37 | |||||||||||
Professional fees | 10 | 4 | 4 | |||||||||||
Non-interested Trustees’ fees and expenses | 12 | 2 | 1 | |||||||||||
Non-interested Trustees’ deferred compensation fees | 34 | 4 | 2 | |||||||||||
Total Liabilities | 4,003 | 3,502 | 1,061 | |||||||||||
Net Assets | $ | 1,973,952 | $ | 224,662 | $ | 90,114 | ||||||||
Net Assets Consist of: | ||||||||||||||
Capital (par value and paid-in surplus)* | $ | 1,973,962 | $ | 224,662 | $ | 90,150 | ||||||||
Undistributed net investment income/(loss)* | (3) | – | – | |||||||||||
Undistributed net realized gain/(loss) from investment transactions* | (10) | – | (36) | |||||||||||
Unrealized net appreciation/(depreciation) of non-interested Trustees’ deferred compensation | 3 | – | – | |||||||||||
Total Net Assets | $ | 1,973,952 | $ | 224,662 | $ | 90,114 | ||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,973,954 | 224,662 | 90,150 | |||||||||||
Net Asset Value Per Share | $ | 1.00 | $ | 1.00 | $ | 1.00 |
* | See Note 4 in Notes to Financial Statements |
See Notes to Financial Statements.
Janus Bond and Money Market Funds April 30, 2008 47
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Statements of Operations – Money Market Funds
Janus Government | Janus Tax-Exempt | |||||||||||||
For the six-month period ended April 30, 2008 (unaudited) | Janus Money | Money | Money | |||||||||||
(all numbers in thousands) | Market Fund | Market Fund | Market Fund | |||||||||||
Investment Income: | ||||||||||||||
Interest | $ | 38,521 | $ | 3,890 | $ | 1,185 | ||||||||
Total Investment Income | 38,521 | 3,890 | 1,185 | |||||||||||
Expenses: | ||||||||||||||
Advisory fees | 1,881 | 208 | 85 | |||||||||||
Professional fees | 11 | 7 | 8 | |||||||||||
Non-interested Trustees’ fees and expenses | 19 | 1 | 3 | |||||||||||
Administrative services fees | 4,704 | 519 | 213 | |||||||||||
Non-recurring costs (Note 2) | 1 | – | – | |||||||||||
Cost assumed by Janus Capital Management LLC (Note 2) | (1) | – | – | |||||||||||
Total Expenses | 6,615 | 735 | 309 | |||||||||||
Less: Excess Expense Reimbursement | (941) | (104) | (43) | |||||||||||
Net Expenses after Expense Reimbursement | 5,674 | 631 | 266 | |||||||||||
Net Investment Income/(Loss) | 32,847 | 3,259 | 919 | |||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | ||||||||||||||
Net realized gain/(loss) from investment transactions | 2 | – | (16) | |||||||||||
Change in unrealized net appreciation/(depreciation) of non-interested Trustees’ deferred compensation | (2) | – | – | |||||||||||
Net Gain/(Loss) on Investments | – | – | (16) | |||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 32,847 | $ | 3,259 | $ | 903 |
See Notes to Financial Statements.
48 Janus Bond and Money Market Funds April 30, 2008
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Statements of Changes in Net Assets – Money Market Funds
Janus Government | Janus Tax-Exempt | |||||||||||||||||||||||||
For the six-month period ended April 30, 2008 (unaudited) | Janus Money | Money | Money | |||||||||||||||||||||||
and for the fiscal year ended October 31, 2007 | Market Fund | Market Fund | Market Fund | |||||||||||||||||||||||
(all numbers in thousands) | 2008 | 2007(1) | 2008 | 2007(1) | 2008 | 2007(1) | ||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | $ | 32,847 | $ | 76,064 | $ | 3,259 | $ | 8,324 | $ | 919 | $ | 2,451 | ||||||||||||||
Net realized gain/(loss) from investment transactions | 2 | 2 | – | 1 | (16) | – | ||||||||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | (2) | 5 | – | – | – | – | ||||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 32,847 | 76,071 | 3,259 | 8,325 | 903 | 2,451 | ||||||||||||||||||||
Dividends and Distributions to Shareholders: | ||||||||||||||||||||||||||
Net investment income* | ||||||||||||||||||||||||||
Investor Shares | (32,845) | (76,071) | (3,259) | (8,324) | (919) | (2,451) | ||||||||||||||||||||
Institutional Shares | – | (10) | – | – | – | – | ||||||||||||||||||||
Service Shares | – | – | – | – | – | – | ||||||||||||||||||||
Net realized gain/(loss) from investment transactions* | ||||||||||||||||||||||||||
Investor Shares | (14) | – | – | (1) | – | – | ||||||||||||||||||||
Institutional Shares | – | – | – | – | – | – | ||||||||||||||||||||
Service Shares | – | – | – | – | – | – | ||||||||||||||||||||
Net Decrease from Dividends and Distributions | (32,859) | (76,081) | (3,259) | (8,325) | (919) | (2,451) | ||||||||||||||||||||
Capital Share Transactions: | ||||||||||||||||||||||||||
Shares sold | ||||||||||||||||||||||||||
Investor Shares | 841,205 | 1,332,997 | 79,927 | 104,097 | 38,028 | 54,413 | ||||||||||||||||||||
Institutional Shares | – | 22,247,144 | – | 1,611,594 | – | 124,711 | ||||||||||||||||||||
Service Shares | – | 13,984 | – | 164,498 | – | – | ||||||||||||||||||||
Reinvested dividends and distributions | ||||||||||||||||||||||||||
Investor Shares | 29,443 | 69,259 | 3,204 | 8,141 | 893 | 2,394 | ||||||||||||||||||||
Institutional Shares | – | 44,041 | – | 1,865 | – | 50 | ||||||||||||||||||||
Service Shares | – | 169 | – | 739 | – | – | ||||||||||||||||||||
Shares repurchased | ||||||||||||||||||||||||||
Investor Shares | (618,598) | (1,093,269) | (46,602) | (100,293) | (27,737) | (54,152) | ||||||||||||||||||||
Institutional Shares | – | (28,608,178)(2) | – | (2,149,520)(2) | – | (132,699)(3) | ||||||||||||||||||||
Service Shares | – | (48,559)(2) | – | (330,717)(2) | – | (10)(3) | ||||||||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | 252,050 | (6,042,412) | 36,529 | (689,596) | 11,184 | (5,293) | ||||||||||||||||||||
Net Increase/(Decrease) in Net Assets | 252,038 | (6,042,422) | 36,529 | (689,596) | 11,168 | (5,293) | ||||||||||||||||||||
Net Assets: | ||||||||||||||||||||||||||
Beginning of period | 1,721,914 | 7,764,336 | 188,133 | 877,729 | 78,946 | 84,239 | ||||||||||||||||||||
End of period | $ | 1,973,952 | $ | 1,721,914 | $ | 224,662 | $ | 188,133 | $ | 90,114 | $ | 78,946 | ||||||||||||||
Undistributed net investment income/(loss)* | $ | (3) | $ | (5) | $ | – | $ | (1) | $ | – | $ | – |
* | See Note 4 in the Notes to Financial Statements. |
(1) | Period from November 1, 2006 through February 23, 2007 for InstitutionalShares and ServiceShares. | |
(2) | A reorganization of the Institutional Shares and Service Shares occurred at the close of business on February 23, 2007. All Capital and Shares were transferred to the corresponding classes of Janus Institutional Money Market Fund and Janus Institutional Government Money Market Fund. See Note 1 in the Notes to Financial Statements. | |
(3) | A liquidation of the Institutional Shares and Service Shares occurred at the close of business on February 23, 2007. |
See Notes to Financial Statements.
Janus Bond and Money Market Funds April 30, 2008 49
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Financial Highlights – Money Market Funds
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2008 (unaudited) | Janus Money Market Fund | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .02 | .05 | .04 | .02 | .01 | .01 | ||||||||||||||||||||
Net gain/(loss) on investments | – | – | – | – | – | – | ||||||||||||||||||||
Total from Investment Operations | .02 | .05 | .04 | .02 | .01 | .01 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.02) | (.05) | (.04) | (.02) | (.01) | (.01) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Total Distributions | (.02) | (.05) | (.04) | (.02) | (.01) | (.01) | ||||||||||||||||||||
Net Asset Value, End of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | ||||||||||||||||||||
Total Return** | 1.77% | 4.93% | 4.39% | 2.41% | 0.75% | 0.79% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $1,973,952 | $1,721,914 | $1,412,927 | $1,360,997 | $1,588,804 | $2,197,167 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $1,891,758 | $1,577,950 | $1,362,170 | $1,449,569 | $1,790,472 | $2,658,402 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(1)(2) | 0.60%(3) | 0.60%(3) | 0.60%(3) | 0.60%(3) | 0.60%(3) | 0.60%(3) | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(1) | 0.60% | 0.60% | 0.60% | 0.60% | 0.60% | 0.60% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.49% | 4.82% | 4.31% | 2.36% | 0.74% | 0.80% |
For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2008 (unaudited) | Janus Government Money Market Fund | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .02 | .05 | .04 | .02 | .01 | .01 | ||||||||||||||||||||
Net gain/(loss) on investments | – | – | – | – | – | – | ||||||||||||||||||||
Total from Investment Operations | .02 | .05 | .04 | .02 | .01 | .01 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.02) | (.05) | (.04) | (.02) | (.01) | (.01) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Total Distributions | (.02) | (.05) | (.04) | (.02) | (.01) | (.01) | ||||||||||||||||||||
Net Asset Value, End of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | ||||||||||||||||||||
Total Return** | 1.60% | 4.79% | 4.31% | 2.34% | 0.68% | 0.72% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $224,662 | $188,133 | $176,188 | $186,361 | $224,084 | $313,691 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $208,605 | $177,655 | $176,580 | $198,231 | $253,183 | $388,077 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(1)(2) | 0.61%(4) | 0.61%(4) | 0.61%(4) | 0.61%(4) | 0.60%(4) | 0.40%(4) | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(1) | 0.61% | 0.61% | 0.61% | 0.61% | 0.60% | 0.60% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.14% | 4.69% | 4.22% | 2.29% | 0.66% | 0.73% |
* | See Note 4 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | See “Explanations of Charts, Tables and Financial Statements.” | |
(2) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year ended 2007, 2006, 2005 and 2004. | |
(3) | The ratio was 0.70% in 2008, 0.70% in 2007, 0.70% in 2006, 0.70% in 2005, 0.70% in 2004 and 0.70% in 2003 before waiver of certain fees incurred by the Fund. | |
(4) | The ratio was 0.71% in 2008, 0.71% in 2007, 0.71% in 2006, 0.71% in 2005, 0.70% in 2004 and 0.70% in 2003 before waiver of certain fees incurred by the Fund. |
See Notes to Financial Statements.
50 Janus Bond and Money Market Funds April 30, 2008
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For a share outstanding during the six-month period | ||||||||||||||||||||||||||
ended April 30, 2008 (unaudited) | Janus Tax-Exempt Money Market Fund | |||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | ||||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | .01 | .03 | .03 | .02 | .01 | .01 | ||||||||||||||||||||
Net gain/(loss) on investments | – | – | – | – | – | – | ||||||||||||||||||||
Total from Investment Operations | .01 | .03 | .03 | .02 | .01 | .01 | ||||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||||
Dividends (from net investment income)* | (.01) | (.03) | (.03) | (.02) | (.01) | (.01) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | ||||||||||||||||||||
Total Distributions | (.01) | (.03) | (.03) | (.02) | (.01) | (.01) | ||||||||||||||||||||
Net Asset Value, End of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | ||||||||||||||||||||
Total Return** | 1.09% | 3.19% | 2.81% | 1.63% | 0.59% | 0.64% | ||||||||||||||||||||
Net Assets, End of Period (in thousands) | $90,114 | $78,946 | $76,295 | $85,799 | $107,386 | $140,087 | ||||||||||||||||||||
Average Net Assets for the Period (in thousands) | $85,760 | $77,935 | $78,564 | $96,230 | $120,544 | $173,152 | ||||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(1)(2) | 0.62%(3) | 0.63%(3) | 0.65%(3) | 0.62%(3) | 0.61%(3) | 0.60%(3) | ||||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(1) | 0.62% | 0.63% | 0.65% | 0.62% | 0.61% | 0.60% | ||||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.16% | 3.14% | 2.77% | 1.60% | 0.59% | 0.65% |
* | See Note 4 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | See “Explanations of Charts, Tables and Financial Statements.” | |
(2) | The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year ended 2007, 2006, 2005 and 2004. | |
(3) | The ratio was 0.72% in 2008, 0.73% in 2007, 0.75% in 2006, 0.72% in 2005, 0.71% in 2004 and 0.70% in 2003 before waiver of certain fees incurred by the Fund. |
See Notes to Financial Statements.
Janus Bond and Money Market Funds April 30, 2008 51
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Notes to Schedules of Investments (unaudited)
Lehman Brothers Aggregate Bond Index | Is made up of the Lehman Brothers Government/Corporate Bond Index, Mortgage-Backed Securities Index, and Asset-Backed Securities Index, including securities that are of investment grade quality or better, have at least one year to maturity, and have an outstanding par value of at least $100 million. | |
Lehman Brothers Government/Credit 1-3 Year Index | Is composed of all bonds of investment grade with a maturity between one and three years. | |
Lehman Brothers High-Yield Bond Index | Is composed of fixed-rate, publicly issued, non-investment grade debt. | |
Lipper High Current Yield Funds | Funds that aim at high (relative) current yield from fixed income securities, have no quality or maturity restrictions, and tend to invest in lower grade debt issues. | |
Lipper Intermediate Investment Grade Debt Funds | Funds that invest at least 65% of their assets in investment grade debt issues (rated in top four grades) with dollar-weighted average maturities of five to ten years. | |
Lipper Short Investment Grade Debt Funds | Funds that invest at least 65% of their assets in investment grade debt issues (rated in top four grades) with dollar-weighted average maturities of less than three years. | |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. | |
FGIC | Financial Guaranty Insurance Co. | |
PLC | Public Limited Company | |
REIT | Real Estate Investment Trust | |
Section 4(2) | Securities subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the Securities Act of 1933, as amended. |
** | A portion of this security has been segregated by the custodian to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales and/or securities with extended settlement dates. | |
‡ | Rate is subject to change. Rate shown reflects current rate. | |
ß | Security is illiquid. | |
Ç | Security is traded on a “to-be-announced” basis. | |
# | Loaned security; a portion or all of the security is on loan at April 30, 2008. | |
† | The security is purchased with the cash collateral received from securities on loan (Note 1). |
º º Schedule of Fair Valued Securities (as of April 30, 2008)
Value as a % | |||||||
Value | of Net Assets | ||||||
Janus High-Yield Fund | |||||||
Progressive Gaming Corp. – expires 8/15/08 | $ | 150 | 0.0% | ||||
Securities are valued at “fair value” pursuant to procedures adopted by the Funds’ trustees. The Schedule of Fair Valued Securities does not include international equity securities fair valued pursuant to a systematic fair valuation model.
52 Janus Bond and Money Market Funds April 30, 2008
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§ Schedule of Restricted and Illiquid Securities (as of April 30, 2008)
Acquisition | Acquisition | Value as a % | ||||||||||
Date | Cost | Value | of Net Assets | |||||||||
Janus Flexible Bond Fund | ||||||||||||
Seminole Hard Rock Entertainment, 8.19438%, senior secured notes, due 3/15/14 (144A) | 2/27/07 | $ | 375,000 | $ | 314,063 | 0.0% | ||||||
Source Gas LLC, 5.90%, senior unsecured notes, due 4/1/17 (144A) | 4/11/07-9/20/07 | 1,383,772 | 1,332,909 | 0.1% | ||||||||
$ | 1,758,772 | $ | 1,646,972 | 0.1% | ||||||||
Janus High-Yield Fund | ||||||||||||
Cardtronics, Inc., 9.25%, senior subordinated notes, due 8/15/13 (144A) | 7/17/07-12/18/07 | $ | 2,263,453 | $ | 2,213,559 | 0.4% | ||||||
Innophos Holdings, Inc., 9.50%, senior unsecured notes, due 4/15/12 (144A) | 4/11/07 | 1,409,000 | 1,359,685 | 0.3% | ||||||||
Medimedia USA, Inc., 11.375%, senior subordinated notes, due 11/15/14 (144A) | 11/1/06-12/18/07 | 1,386,718 | 1,385,160 | 0.3% | ||||||||
Progressive Gaming Corp.-expires 8/15/08 º º | 9/26/03 | 167 | 150 | 0.0% | ||||||||
Seminole Hard Rock Entertainment, 8.19438%, senior secured notes, due 3/15/14 (144A) | 5/9/07-6/1/07 | 2,589,653 | 2,113,013 | 0.4% | ||||||||
Steinway Musical Instruments, Inc., 7.00%, senior notes, due 3/1/14 (144A) | 9/13/06-12/18/07 | 5,686,038 | 5,038,880 | 1.0% | ||||||||
$ | 13,335,029 | $ | 12,110,447 | 2.4% | ||||||||
Janus Money Market Fund | ||||||||||||
Ares VII CLO, Ltd., Class A-1A, 3.1775%, 5/8/15 (144A) | 4/23/03 | $ | 15,996,000 | $ | 15,996,000 | 0.8% | ||||||
Dorada Finance Corp., 2.82%, 8/20/08 (144A) | 8/13/07 | 4,997,000 | 4,999,090 | 0.3% | ||||||||
Sedna Finance, Inc., 2.90%, 8/20/08 (144A) | 8/20/07 | 5,000,000 | 5,000,000 | 0.3% | ||||||||
$ | 25,993,000 | $ | 25,995,090 | 1.4% | ||||||||
The Funds have registration rights for certain restricted securities held as of April 30, 2008. The issuer incurs all registration costs.
Aggregate collateral segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales and/or securities with extended settlement dates as of April 30, 2008 is noted below.
Fund | Aggregate Value | ||||
Bond | |||||
Janus Flexible Bond Fund | $ | 35,983,221 | |||
The interest rate on floating rate notes is based on an index or market interest rates and is subject to change. Rates in the security description are as of April 30, 2008.
Money market funds may hold securities with stated maturities of greater than 397 days when those securities have features that allow a fund to “put” back the security to the issuer or to a third party within 397 days of acquisition. The maturity dates shown in the security descriptions are the stated maturity dates.
Repurchase agreements held by a Fund are fully collateralized, and such collateral is in the possession of the Fund’s custodian or subcustodian. The collateral is evaluated daily to ensure its market value equals or exceeds the current market value of the repurchase agreements, including accrued interest. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral or proceeds may be subject to legal proceedings.
Janus Bond and Money Market Funds April 30, 2008 53
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Notes to Financial Statements (unaudited)
The following section describes the organization and significant accounting policies and provides more detailed information about the schedules and tables that appear throughout this report. In addition, the Notes to Financial Statements explain the methods used in preparing and presenting this report.
1. | Organization and Significant Accounting Policies |
Janus Flexible Bond Fund, Janus High-Yield Fund and Janus Short-Term Bond Fund (collectively the “Bond Funds”) and Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax- Exempt Money Market Fund (collectively the “Money Market Funds”) are series funds. The Bond Funds and the Money Market Funds (collectively the “Funds” and individually a “Fund”) are part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust has twenty-nine funds. The Bond Funds invest primarily in income-producing securities, and the Money Market Funds invest in high-quality money market instruments. Each Bond Fund in this report is classified as diversified as defined in the 1940 Act. The Funds are no-load investments.
Effective February 23, 2007, the Institutional Shares and Service Shares of Janus Money Market Fund and Janus Government Money Market Fund were reorganized into corresponding classes of Janus Institutional Money Market Fund and Janus Institutional Government Money Market Fund, respectively. The Institutional Shares and Service Shares of Janus Tax-Exempt Money Market Fund were liquidated from the Trust. Accordingly, Institutional Shares and Service Shares of Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund are no longer offered for sale.
On December 14, 2007, the Board of Trustees of the Trust approved a plan to liquidate and terminate Janus Federal Tax-Exempt Fund. Effective February 26, 2008, Janus Federal Tax-Exempt Fund was liquidated from the Trust.
The following accounting policies have been consistently followed by the Funds and are in conformity with accounting principles generally accepted in the United States of America in the investment company industry.
Investment Valuation
Securities are valued at the last sales price or the official closing price for securities traded on a principal securities exchange (U.S. or foreign) and on the NASDAQ National Market. Securities traded on over-the-counter markets and listed securities for which no sales are reported are valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Funds’ Trustees. Short-term securities with maturities of 60 days or less may be valued at amortized cost, which approximates market value. Investments held by the Money Market Funds are valued utilizing the amortized cost method of valuation permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under the amortized cost method, which does not take into account unrealized capital gains or losses, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization to maturity of any discount or premium. Debt securities with a remaining maturity of greater than 60 days are valued in accordance with the evaluated bid price supplied by the pricing service. The evaluated bid price supplied by the pricing service is an evaluation that reflects such factors as security prices, yields, maturities and ratings. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect as of the daily close of the New York Stock Exchange (“NYSE”). When market quotations are not readily available or deemed unreliable, or events or circumstances that may affect the value of portfolio securities held by the Funds are identified between the closing of their principal markets and the time the net asset value (“NAV”) is determined, securities may be valued at fair value as determined in good faith under procedures established by and under the supervision of the Funds’ Trustees. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) when significant events occur which may affect the securities of a single issuer, such as mergers, bankruptcies, or significant issuer-specific developments; (ii) when significant events occur which may affect an entire market, such as natural disasters or significant governmental actions; and (iii) when non-significant events occur such as markets closing early or not opening, security trading halts, or pricing of non-valued securities and restricted or non-public securities. The Funds may use a systematic fair valuation model provided by an independent third party to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the NYSE.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Trust is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes.
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Expenses
Each Fund bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which may be allocated pro rata to each of the Funds in the Trust.
Securities Lending
Under procedures adopted by the Trustees, the Funds may lend securities to qualified parties (typically brokers or other financial institutions) who need to borrow securities in order to complete certain transactions such as covering short sales, avoiding failures to deliver securities or completing arbitrage activities. The Funds may seek to earn additional income through securities lending. There is the risk of delay in recovering a loaned security or the risk of loss in collateral rights if the borrower fails financially. Janus Capital Management LLC (“Janus Capital”) makes efforts to balance the benefits and risks from granting such loans.
The Funds do not have the right to vote on securities while they are being lent; however, the Funds may attempt to call back the loan and vote the proxy if time permits. All loans will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral permitted by the Securities and Exchange Commission (“SEC”). Cash collateral may be invested in affiliated money market funds or other accounts advised by Janus Capital to the extent consistent with exemptive relief obtained from the SEC or as permitted by the 1940 Act and rules promulgated thereunder.
Dresdner Bank AG (the “Lending Agent”) may also invest the cash collateral in the Allianz Dresdner Daily Asset Fund or investments in unaffiliated money market funds or accounts, mutually agreed to by the Funds and the Lending Agent, that comply with Rule 2a-7 of the 1940 Act relating to money market funds.
As of April 30, 2008, the Funds had on loan securities valued as indicated:
Value at | |||||
Fund | April 30, 2008 | ||||
Bond | |||||
Janus Flexible Bond Fund | $ | 213,754,560 | |||
Janus High-Yield Fund | 29,097,099 | ||||
Janus Short-Term Bond Fund | 48,772,783 | ||||
As of April 30, 2008, the Funds received cash collateral for securities lending activity as indicated:
Cash Collateral at | |||||
Fund | April 30, 2008 | ||||
Bond | |||||
Janus Flexible Bond Fund | $ | 218,546,114 | |||
Janus High-Yield Fund | 29,794,885 | ||||
Janus Short-Term Bond Fund | 49,943,382 | ||||
As of April 30, 2008, all cash collateral received by the Funds was invested in the Allianz Dresdner Daily Asset Fund, except as noted in the following tables:
Fund | Time Deposits | ||||
Bond | |||||
Janus Flexible Bond Fund | $ | 99,878,207 | |||
Janus High-Yield Fund | 11,938,943 | ||||
Janus Short-Term Bond Fund | 23,966,162 | ||||
Fund | Repurchase Agreements | ||||
Bond | |||||
Janus Flexible Bond Fund | $ | 34,550,137 | |||
Janus High-Yield Fund | 3,906,746 | ||||
Janus Short-Term Bond Fund | 7,842,381 | ||||
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 borrower pays fees at the Funds’ direction to the Lending Agent. The Lending Agent may retain a portion of the interest earned on the cash collateral invested. The cash collateral invested by the Lending Agent is disclosed in the Schedule of Investments (if applicable). The lending fees and the Funds’ portion of the interest income earned on cash collateral are included on the Statement of Operations (if applicable).
Interfund Lending
Pursuant to an exemptive order received from the SEC, the Funds may be party to interfund lending agreements between the Funds and other Janus Capital-sponsored mutual funds, which permit them to borrow or lend cash at a rate beneficial to both the borrowing and lending funds. Outstanding borrowings from all sources totaling 10% or more of the borrowing Funds’ total assets must be collateralized at 102% of the outstanding principal value of the loan; loans of less than 10% may be unsecured.
Forward Currency Transactions
The Bond Funds may enter into forward currency contracts in order to reduce exposure to changes in foreign currency exchange rates on foreign portfolio holdings and to lock in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. A forward currency exchange contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated rate. The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a contract is included in “Net realized gain/(loss) from
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Notes to Financial Statements (unaudited) (continued)
investment and foreign currency transactions” on the Statement of Operations (if applicable). Forward currency contracts held by the Bond Funds are fully collateralized by other securities, which are denoted in the accompanying Schedule of Investments (if applicable). The collateral is evaluated daily to ensure its market value equals or exceeds the current market value of the corresponding forward currency contracts.
Futures Contracts
The Bond Funds may enter into futures contracts to gain exposure to the stock market pending investment of cash balances or to meet liquidity needs. The Funds may also use such derivative instruments to hedge or protect from adverse movements in securities prices, currency rates or interest rates. The use of futures contracts may involve risks such as the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.
Futures contracts are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Statement of Assets and Liabilities (if applicable). When a contract is closed, a realized gain or loss is recorded as “Net realized gain/(loss) from futures contracts” on the Statement of Operations (if applicable) equal to the difference between the opening and closing value of the contract. Generally, futures contracts are marked-to-market (i.e., treated as realized and subject to distribution) for federal income tax purposes at fiscal year-end. Securities designated as collateral for market value on futures contracts are noted in the Schedule of Investments (if applicable). Such collateral is in the possession of Funds’ custodian.
Swaps
The Bond Funds may enter into swap agreements to hedge their exposure to interest rates and credit risk or for investment purposes. A swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to changes in specified prices or rates for a specified amount of an underlying asset. The payment flows are usually netted against each other, with the difference being paid by one party to the other. Swap contracts are reported as an asset and liability on the Statement of Assets and Liabilities. Realized gains and losses are reported in “Net realized gain/(loss) from swap contracts” on the Statement of Operations (if applicable).
Risks may arise as a result of the failure of the counterparty to the swap contract to comply with the terms of the swap contract. The loss incurred by the failure of a counterparty is generally limited to the net interim payment to be received by the Funds, and/or the termination value. Therefore, the Funds consider the creditworthiness of each counterparty to a swap contract in evaluating potential credit risk. Additionally, risks may arise from unanticipated movements in interest rates or in the value of the underlying securities.
Options Contracts
The Bond Funds may purchase or write put and call options on futures contracts and portfolio securities for hedging purposes or as a substitute for an investment. The Bond Funds may also purchase or write put and call options on foreign currencies in a manner similar to that in which futures or forward contracts on foreign currencies will be utilized. The Funds may also invest in Long-Term Equity Anticipation Securities (LEAPS), which are long-term option contracts that can be maintained for a period up to three years. The Bond Funds generally invest in options to hedge against adverse movements in the value of portfolio holdings.
When an option is written, the Funds receive a premium and become obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. In writing an option, the Funds bear the market risk of an unfavorable change in the price of the security underlying the written option. Exercise of an option written by the Funds could result in the Funds buying or selling a security at a price different from the current market value.
When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option are adjusted by the amount of premium received or paid. Holdings designated to cover outstanding written options are noted in the Schedule of Investments (if applicable).
The Funds may also purchase and write exchange-listed and over-the-counter put and call options on domestic securities indices, and on foreign securities indices listed on domestic and foreign securities exchanges. Options on securities indices are similar to options on securities except that (1) the expiration cycles of securities index options are monthly, while those of securities options are currently quarterly, and (2) the delivery requirements are different. Instead of giving the right to take or make delivery of securities at a specified price, an option on a securities index gives the holder the right to receive a cash “exercise settlement amount” equal to (a) the amount, if any, by which the fixed exercise price of the option exceeds (in the case of a put) or is less than (in the case of a call) the closing value of the underlying index on the date of exercise, multiplied by (b) a fixed “index multiplier.” Receipt of this cash amount will depend upon the closing level of the securities index upon which the option is based being greater than, in the case of a call, or less than, in the case of a put, the exercise price of the index and the exercise price of the option times a specified multiple. The writer of the option is obligated, in return for the premium received, to make delivery of this amount.
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Holdings designated to cover outstanding written options are noted in the Schedule of Investments (if applicable). Options written are reported as a liability on the Statement of Assets and Liabilities as “Options written at value” (if applicable).
Realized gains and losses are reported as “Net realized gain/(loss) from options contracts” on the Statement of Operations (if applicable).
The risk in writing call options is that the Funds give up the opportunity for profit if the market price of the security increases and the option is exercised. The risk in writing put options is that the Funds may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying options is that the Funds pay a premium whether or not the option is exercised. The use of such instruments may involve certain additional risks as a result of unanticipated movement in the market. A lack of correlation between the value of an instrument underlying an option and the asset being hedged, or unexpected adverse price movements, could render the Funds’ hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. There is no limit to the loss the Funds may recognize due to written call options.
Mortgage Dollar Rolls
The Bond Funds may enter into “mortgage dollar rolls.” In a “mortgage dollar roll” transaction, the Funds sell a mortgage-related security (such as a Government National Mortgage Association (“Ginnie Mae”) security) to a dealer and simultaneously agree to repurchase a similar security (but not the same security) in the future at a pre-determined price. The Funds will not be entitled to receive interest and principal payments while the dealer holds the security. The difference between the sale price and the future purchase price is recorded as an adjustment to investment income.
The Funds’ obligations under a dollar roll agreement must be covered by cash, U.S. Government securities or other liquid high-grade debt obligations equal in value to the securities subject to repurchase by the Funds, maintained in a segregated account. To the extent that the Funds collateralize their obligations under a dollar roll agreement, the asset coverage requirements of the 1940 Act will not apply to such transactions. Furthermore, under certain circumstances, an underlying mortgage-backed security that is part of a dollar roll transaction may be considered illiquid.
Successful use of mortgage dollar rolls depends on the portfolio managers’ ability to predict interest rates and mortgage payments. Dollar roll transactions involve the risk that the market value of the securities the Funds are required to purchase may decline below the agreed upon repurchase price.
Securities Traded on a To-Be-Announced Basis
The Bond Funds may trade securities on a to-be-announced (“TBA”) basis. In a TBA transaction, the Funds commit to purchasing or selling securities for which specific information is not yet known at the time of the trade, particularly the face amount and maturity date in Ginnie Mae, Federal National Mortgage Association (“Fannie Mae”) and/or Federal Home Loan Mortgage Corporation (“Freddie Mac”) transactions.
Securities purchased on a TBA basis are not settled until they are delivered to the Funds, normally 15 to 45 days later. Beginning on the date the Funds enter into a TBA transaction, cash, U.S. Government securities or other liquid high-grade debt obligations are segregated in an amount equal in value to the purchase price of the TBA security. These transactions are subject to market fluctuations and their current value is determined in the same manner as for other securities.
Floating Rate Loans
The Bond Funds may invest in floating rate loans. Floating rate loans are debt securities that have floating interest rates which adjust periodically are tied to a benchmark lending rate such as the London Interbank Offered Rate (“LIBOR”). LIBOR is a short-term interest rate that banks charge one another and that is generally representative of the most competitive and current cash rates. In other cases, the lending rate could be tied to the prime rate offered by one or more major U.S. banks (“Prime Rate”) or the rate paid on large certificates of deposit traded in the secondary markets (“CD Rate”). If the benchmark lending rate changes, the rate payable to lenders under the loan will change at the next scheduled adjustment date specified in the loan agreement. Floating rate loans are typically issued to companies (“borrowers”) in connection with recapitalizations, acquisitions, and refinancings. Floating rate loan investments are generally below investment grade. Senior floating rate loans are secured by specific collateral of a borrower and are senior in the borrower’s capital structure. The senior position in the borrower’s capital structure generally gives holders of senior loans a claim on certain of the borrower’s assets that is senior to subordinated debt and preferred and common stock in the case of a borrower’s default. Floating rate loan investments may involve foreign borrowers, and investments may be denominated in foreign currencies. Floating rate loans often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The Funds may invest in obligations of borrowers who are in bankruptcy proceedings. Floating rate loans may include fully funded term loans or revolving lines of credit.
Bank Loans
The Bond Funds may invest in bank loans, which include institutionally-traded floating rate securities generally acquired as an assignment or participation interest in loans originated by a bank or financial institution (the “Lender”) that acts as agent for all holders. The agent administers the terms of
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Notes to Financial Statements (unaudited) (continued)
the loan, as specified in the loan agreement. When investing in a loan participation, the Funds have the right to receive payments of principal, interest and any fees to which they are entitled only from the Lender selling the loan agreement and only upon receipt by the Lender of payments from the borrower. The Funds generally have no right to enforce compliance with the terms of the loan agreement with the borrower. Assignments and participations involve credit, interest rate, and liquidity risk. Interest rates on floating rate securities adjust with general interest rate changes and/or issuer credit quality. The interest rates paid on a floating rate security in which the Funds invest generally are readjusted periodically to an increment over a designated benchmark rate, such as the one-month, three-month, six-month, or one-year LIBOR.
The Funds may have difficulty trading assignments and participations to third parties. There may be restrictions on transfer and only limited opportunities may exist to sell such securities in secondary markets. As a result, the Funds may be unable to sell assignments or participations at the desired time or may be able to sell only at a price less than fair market value. The Funds utilize an independent third party to value individual bank loans on a daily basis.
The average monthly value of borrowings outstanding under bank loan arrangements and the related rate range during the six-month period ended April 30, 2008, are indicated in the table below.
Average Monthly | ||||||||
Fund | Value | Rates | ||||||
Bond | ||||||||
Janus Flexible Bond Fund | $ | 11,312,284 | 0.2948%-8.70% | |||||
Janus High-Yield Fund | 22,452,888 | 0.15%-12.198% | ||||||
Janus Short-Term Bond Fund | 7,777,319 | 1.85%-9.00% | ||||||
Short Sales
The Funds may engage in “short sales against the box.” Short sales against the box involve either selling short a security that the Funds own, or selling short a security that the Funds have the right to obtain, for delivery at a specified date in the future. The Funds may enter into a short sale against the box to hedge against anticipated declines in the market price of portfolio securities. The Funds do not deliver from their portfolios the securities sold short and do not immediately receive the proceeds of the short sale. The Funds borrow the securities sold short and receive proceeds from the short sale only when they deliver the securities to the lender. If the value of the securities sold short increases prior to the scheduled delivery date, the Funds lose the opportunity to participate in the gain.
Foreign Currency Translations
The Funds do not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Unrealized net appreciation or depreciation of investments and foreign currency translations arises from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and market risk. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
When-Issued Securities
The Funds may purchase or sell securities on a when-issued or forward commitment basis. The price of the underlying securities and date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Losses may arise due to changes in the market value of the securities or from the inability of counterparties to meet the terms of the contract. In connection with such purchases, the Funds may hold liquid assets as collateral with the Funds’ custodian sufficient to cover the purchase price.
Exchange-Traded Funds
The Bond Funds may invest in exchange-traded funds, which are index-based investment companies which hold substantially all of their assets in securities representing their specific index. As a shareholder of another investment company, a Fund would bear its pro rata portion of the other investment company’s expenses, including advisory fees, in addition to the expenses the Fund bears directly in connection with its own operations.
Equity-Linked Structured Notes
The Bond Funds may invest in equity-linked structured notes. Equity-linked structured notes are derivative securities which are specially designed to combine the characteristics of one or more underlying securities and their equity derivatives in a single note form. The return and/or yield or income component may be based on the performance of the underlying equity securities, an equity index, and/or option positions. Equity-linked structured notes are typically offered in limited transactions by financial institutions in either registered or non-registered form. An investment in equity-linked structured notes creates exposure to the credit risk of the issuing financial institution, as well as to the market risk of
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the underlying securities. There is no guaranteed return of principal with these securities and the appreciation potential of these securities may be limited by a maximum payment or call right. In certain cases, equity-linked structured notes may be more volatile and less liquid than less complex securities or other types of fixed-income securities. Such securities may exhibit price behavior that does not correlate with other fixed-income securities.
Initial Public Offerings
The Bond Funds may invest in initial public offerings (“IPOs”). IPOs and other investment techniques may have a magnified performance impact on a fund with a small asset base. The Funds may not experience similar performance as their assets grow.
Additional Investment Risk
The Bond Funds may be invested in lower-rated debt securities that have a higher risk of default or loss of value since these securities may be sensitive to economic changes, political changes or adverse developments specific to the issuer.
Restricted Security Transactions
Restricted securities held by the Funds may not be sold except in exempt transactions or in a public offering registered under the Securities Act of 1933, as amended. The risk of investing in such securities is generally greater than the risk of investing in the securities of widely held, publicly traded companies. Lack of a secondary market and resale restrictions may result in the inability of the Funds to sell a security at a fair price and may substantially delay the sale of the security. In addition, these securities may exhibit greater price volatility than securities for which secondary markets exist.
Dividend Distributions
Dividends of net investment income are declared daily and generally distributed monthly. Realized capital gains, if any, are declared and distributed in December. The majority of dividends and capital gains distributions from the Funds will be automatically reinvested into additional shares of that Fund, based on the discretion of the shareholder.
The Bond Funds may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REIT’s taxable earnings and profits resulting in the excess portion of such dividends being designated as a return of capital. If the Funds distribute such amounts, such distribution could constitute a return of capital to shareholders for federal income tax purposes.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Federal Income Taxes
No provision for income taxes is included in the accompanying financial statements, as the Funds intend to distribute to shareholders all taxable investment income and realized gains and otherwise comply with Subchapter M of the Internal Revenue Code applicable to regulated investment companies.
The Funds adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”). Accounting for Uncertainty in Income Taxes on April 30, 2008. FIN 48 requires an evaluation of tax positions taken (or expected to be taken) in the course of preparing a Fund’s tax return to determine whether these positions meet a “more-likely-than-not” standard that based on the technical merits have a more than fifty percent likelihood of being sustained by a taxing authority upon examination. A tax position that meets the “more-likely-than-not” recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations.
FIN 48 requires management of the Funds to analyze all open tax years, fiscal years 2003-2006 as defined by Statute of Limitations, for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of and during the six-month period ended April 30, 2008, the Funds did not have a liability for any unrecognized tax benefits. The Funds have no examination in progress and are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
New Accounting Pronouncements
In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS No. 157”), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not require new fair value measurements, but is applied to the extent that other accounting pronouncements require or permit fair value measurements. SFAS No. 157 emphasizes that fair value is a market-based measurement that should be determined based
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Notes to Financial Statements (unaudited) (continued)
on the assumptions that market participants would use in pricing an asset or liability. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Management does not believe the adoption of SFAS No. 157 will impact the financial statement amounts; however, the Funds will be required to disclose the extent to which fair value is used to measure assets and liabilities and the inputs used to develop the measurements.
In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS No. 159”), which permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Management does not believe the adoption of SFAS No. 159 will impact the financial statement amounts.
In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS No. 161”), which requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS No. 161 is effective for financial statements issued for fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. Management is in the process of evaluating the impact of SFAS No. 161 on the Funds’ financial statement disclosures.
2. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Funds pay a monthly advisory fee to Janus Capital based upon average daily net assets and calculated at the annual rate shown in the table below:
Average | ||||||||
Daily Net | Management | |||||||
Fund | Assets of Fund | Fee (%) | ||||||
Janus Flexible Bond Fund | First $ | 300 Million | 0.58% | |||||
Over $ | 300 Million | 0.48% | ||||||
Janus High-Yield Fund | First $ | 300 Million | 0.65% | |||||
Over $ | 300 Million | 0.55% | ||||||
Janus Short-Term Bond Fund | First $ | 300 Million | 0.64% | |||||
Over $ | 300 Million | 0.54% | ||||||
Until at least March 1, 2009, provided that Janus Capital remains investment adviser to the Bond Funds, Janus Capital has agreed to reimburse the following Funds by the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding brokerage commissions, interest, dividends, taxes and extraordinary expenses (including, but not limited to, acquired fund fees and expenses), exceed the annual rates noted below. If applicable, amounts reimbursed to the Funds by Janus Capital are disclosed as Excess Expense Reimbursement on the Statement of Operations.
Fund | Expense Limit % | ||||
Bond | |||||
Janus Flexible Bond Fund | 0.93% | ||||
Janus High-Yield Fund | 0.90% | ||||
Janus Short-Term Bond Fund | 0.64% | ||||
Each of the Money Market Funds pays Janus Capital 0.20% of its average daily net assets as an investment advisory fee. However, Janus Capital has agreed to waive one-half of its advisory fee. Such waiver is voluntary and could change or be terminated at any time at the discretion of Janus Capital. In addition, the Money Market Funds pay Janus Capital an administrative services fee of 0.50% of average daily net assets. The Money Market Funds pay those expenses not assumed by Janus Capital. The expenses not assumed by Janus Capital include interest and taxes, fees and expenses of Trustees who are not interested persons of Janus Capital, audit fees and expenses, and extraordinary expenses.
Each Fund pays Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital and the Funds’ transfer agent, an asset-weighted average annual fee based on the proportion of each Fund’s total net assets sold directly and the proportion of each Fund’s net assets sold through financial intermediaries. The applicable fee rates are 0.16% of net assets on the proportion of assets sold directly and 0.21% on the proportion of assets sold through intermediaries. In addition, Janus Services receives $4.00 per open shareholder account for transfer agent services.
During the fiscal year ended October 31, 2007, Janus Services reimbursed the following Fund as a result of dilutions caused by incorrectly processed shareholder activity as indicated in the table below.
Fund | |||||
Bond | |||||
Janus Flexible Bond Fund | $ | 974 | |||
During the six-month period ended April 30, 2008, Janus Capital reimbursed the following Funds as a result of dilutions caused by certain trading and/or pricing errors as indicated in the table below.
Fund | |||||
Bond | |||||
Janus High-Yield Fund | $ | 60,996 | |||
During the fiscal year ended October 31, 2007, Janus Capital reimbursed the following Funds as a result of dilutions caused
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by certain trading and/or pricing errors as indicated in the table below.
Fund | |||||
Bond | |||||
Janus Flexible Bond Fund | $ | 37,026 | |||
Janus High-Yield Fund | 7,740 | ||||
Janus Short-Term Bond Fund | 5,553 | ||||
For the six-month period ended April 30, 2008, Janus Capital assumed $16,904 of legal, consulting and Trustee costs and fees incurred by the funds in Janus Investment Fund, Janus Aspen Series and Janus Adviser Series (the “Portfolios”) in connection with the regulatory and civil litigation matters discussed in the Pending Legal Matters. These non-recurring costs were allocated to all Portfolios based on the Portfolios’ respective net assets as of July 31, 2004. No fees were allocated to the Portfolios that commenced operations after July 31, 2004. Additionally, all future non-recurring costs will be allocated to the Portfolios based on the Portfolios’ respective net assets on July 31, 2004. These “Non-recurring costs” and “Costs assumed by Janus Capital” are shown on the 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 Funds. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Funds as unrealized appreciation/(depreciation) and is shown as of April 30, 2008 on the Statement of Assets and Liabilities as an asset, “Non-interested Trustees’ deferred compensation,” and a liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” for the Bond Funds, and “Unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation” for the Money Market Funds on the Statement of Assets and Liabilities. Deferred compensation expenses for the six-month period ended April 30, 2008 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. No deferred fees were paid to any Trustee under the Deferred Plan during the six-month period ended April 30, 2008.
Certain officers of the Funds may also be officers and/or directors of Janus Capital. Such officers receive no compensation from the Funds, except for the Funds’ Chief Compliance Officer. Effective January 1, 2006, the Funds began reimbursing the adviser for a portion of the compensation paid to the Chief Compliance Officer of the Trust. Total compensation of $39,907 was paid by the Trust during the six-month period ended April 30, 2008. Each Fund’s portion is reported as part of “Other Expenses” on the Statement of Operations.
A 2.00% redemption fee may be imposed on shares of Janus High-Yield Fund held for 90 days or less. This fee is paid to the Fund rather than Janus Capital, and is designed to deter excessive short-term trading and to offset the brokerage commissions, market impact, and other costs associated with changes in the Fund’s asset level and cash flow due to short-term money movements in and out of the Fund. The redemption fee is accounted for as an addition to Paid-in Capital. Total redemption fees received by the Fund for the six-month period ended April 30, 2008 are indicated in the table below:
Fund | Redemption Fee | ||||
Janus High-Yield Fund | $ | 58,478 | |||
The Bond Funds’ expenses may be reduced by expense offsets from an unaffiliated custodian and/or transfer agent. Such credits or offsets are included in “Expense and Fee Offset” on the Statement of Operations. The transfer agent fee offsets received during the period reduce Transfer Agent Fees and Expenses. Custodian offsets received reduce Custodian Fees. The Funds could have employed the assets used by the custodian and/or transfer agent to produce income if they had not entered into an expense offset arrangement.
The Bond Funds may invest in money market funds, including funds managed by Janus Capital. During the six-month period ended April 30, 2008, the following Funds recorded distributions from affiliated investment companies as affiliated dividend income, and had the following affiliated purchases and sales:
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Notes to Financial Statements (unaudited) (continued)
Purchases | Sales | Dividend | Value | |||||||||||
Shares/Cost | Shares/Cost | Income | at 4/30/08 | |||||||||||
Janus Institutional Cash Management Fund – Institutional Shares | ||||||||||||||
Janus Flexible Bond Fund | $ | 144,071,196 | $ | 153,394,647 | $ | 459,135 | $ | 4,703,082 | ||||||
Janus High-Yield Fund | 79,033,379 | 40,840,618 | 677,494 | 41,329,861 | ||||||||||
Janus Short-Term Bond Fund | 21,217,791 | 34,716,643 | 118,600 | – | ||||||||||
$ | 244,322,366 | $ | 228,951,908 | $ | 1,255,229 | $ | 46,032,943 | |||||||
Janus Institutional Money Market Fund – Institutional Shares | ||||||||||||||
Janus Flexible Bond Fund | $ | 244,130,992 | $ | 153,862,432 | $ | 207,694 | $ | 94,609,110 | ||||||
Janus High-Yield Fund | 165,151,762 | 164,243,382 | 578,778 | 2,329,280 | ||||||||||
Janus Short-Term Bond Fund | 39,117,974 | 38,662,974 | 17,180 | 455,000 | ||||||||||
$ | 448,400,728 | $ | 356,768,788 | $ | 803,652 | $ | 97,393,390 | |||||||
3. | Purchases and Sales of Investment Securities |
For the six-month period ended April 30, 2008, the aggregate cost of purchases and proceeds from sales of investment securities (excluding short-term securities, options contracts and mortgage dollar roll transactions) were as follows:
Purchase of | Proceeds from Sales | |||||||||||||
Purchase of | Proceeds from Sales | Long-Term U.S. | of Long-Term U.S. | |||||||||||
Fund | Securities | of Securities | Government Obligations | Government Obligations | ||||||||||
Bond | ||||||||||||||
Janus Flexible Bond Fund | $ | 307,687,564 | $ | 166,036,058 | $ | 330,828,863 | $ | 362,676,976 | ||||||
Janus High-Yield Fund | 282,406,169 | 343,042,098 | – | – | ||||||||||
Janus Short-Term Bond Fund | 30,693,680 | 40,822,104 | 89,736,872 | 46,065,251 | ||||||||||
4. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses and capital loss carryovers.
The Funds have elected to treat gains and losses on forward foreign currency contracts as capital gains and losses. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of April 30, 2008 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary difference between book and tax appreciation or depreciation of investments is wash sale loss deferrals.
Net Tax | ||||||||||||||
Federal Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||
Fund | Cost | Appreciation | (Depreciation) | (Depreciation) | ||||||||||
Bond | ||||||||||||||
Janus Flexible Bond Fund | $ | 1,145,806,618 | $ | 19,679,998 | $ | (2,364,208) | $ | 17,315,790 | ||||||
Janus High-Yield Fund | 564,869,824 | 7,111,493 | (15,055,072) | (7,943,579) | ||||||||||
Janus Short-Term Bond Fund | 241,636,137 | 2,800,518 | (798,813) | 2,001,705 | ||||||||||
Money Market | ||||||||||||||
Janus Money Market Fund | 1,969,700,829 | – | – | – | ||||||||||
Janus Government Money Market Fund | 227,327,391 | – | – | – | ||||||||||
Janus Tax-Exempt Money Market Fund | 86,612,404 | – | – | – | ||||||||||
Net capital loss carryovers as of October 31, 2007 are indicated in the table below. These losses may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. The following table shows the expiration dates of the carryovers.
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Accumulated | |||||||||||||||||
Fund | October 31, 2010 | October 31, 2013 | October 31, 2014 | October 31, 2015 | Capital Losses | ||||||||||||
Bond | |||||||||||||||||
Janus Flexible Bond Fund | $ | (7,014,730) | $ | – | $ | (15,306,508) | $ | (3,818,681) | $ | (26,139,919) | |||||||
Janus High-Yield Fund | (25,200,139) | – | – | – | (25,200,139) | ||||||||||||
Janus Short-Term Bond Fund | – | (681,569) | (1,853,016) | (560,770) | (3,095,355) | ||||||||||||
Money Market | |||||||||||||||||
Janus Money Market Fund | – | – | – | – | – | ||||||||||||
Janus Government Money Market Fund | – | – | – | – | – | ||||||||||||
Janus Tax-Exempt Money Market Fund | – | (12,220) | (8,370) | – | (20,590) | ||||||||||||
During the year ended October 31, 2007, the following capital loss carryovers were utilized by the Funds as indicated in the table below:
Capital Loss | |||||||||||||||||
Fund | Carryover Utilized | ||||||||||||||||
Janus High-Yield Fund | $ | 950,009 | |||||||||||||||
5. | Capital Share Transactions |
For the six-month period ended April 30, 2008 (unaudited) | ||||||||||||||||||||||||||||
and the fiscal year ended October 31, 2007 | Janus Flexible | Janus Short-Term | ||||||||||||||||||||||||||
(all numbers in thousands) | Bond Fund | Janus High-Yield Fund | Bond Fund | |||||||||||||||||||||||||
Bond Funds | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||||||
Transactions in Fund Shares | ||||||||||||||||||||||||||||
Shares sold | 20,411 | 15,192 | 6,235 | 24,599 | 17,745 | 15,797 | ||||||||||||||||||||||
Reinvested dividends and distributions | 1,714 | 3,581 | 2,010 | 4,091 | 1,253 | 2,675 | ||||||||||||||||||||||
Shares repurchased | (9,417) | (19,788) | (12,581) | (19,336) | (11,050) | (19,464) | ||||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | 12,708 | (1,015) | (4,336) | 9,354 | 7,948 | (992) | ||||||||||||||||||||||
Shares Outstanding, Beginning of Period | 80,367 | 81,382 | 62,127 | 52,773 | 59,846 | 60,838 | ||||||||||||||||||||||
Shares Outstanding, End of Period | 93,075 | 80,367 | 57,791 | 62,127 | 67,794 | 59,846 |
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Notes to Financial Statements (unaudited) (continued)
For the six-month period ended April 30, 2008 (unaudited) | Janus Government | Janus Tax-Exempt | ||||||||||||||||||||||||||
and the fiscal year ended October 31, 2007 | Janus Money | Money | Money | |||||||||||||||||||||||||
(all numbers in thousands) | Market Fund | Market Fund | Market Fund | |||||||||||||||||||||||||
Money Market Funds | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||||||
Transactions in Fund Shares – Investor Shares | ||||||||||||||||||||||||||||
Shares sold | 841,205 | 1,332,989 | 79,927 | 104,097 | 38,028 | 54,414 | ||||||||||||||||||||||
Reinvested dividends and distributions | 29,443 | 69,259 | 3,204 | 8,141 | 893 | 2,394 | ||||||||||||||||||||||
Shares repurchased | (618,598) | (1,093,269) | (46,602) | (100,293) | (27,737) | (54,152) | ||||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | 252,050 | 308,979 | 36,529 | 11,945 | 11,184 | 2,656 | ||||||||||||||||||||||
Shares Outstanding, Beginning of Period | 1,721,904 | 1,412,925 | 188,133 | 176,188 | 78,966 | 76,311 | ||||||||||||||||||||||
Shares Outstanding, End of Period | 1,973,954 | 1,721,904 | 224,662 | 188,133 | 90,150 | 78,967 | ||||||||||||||||||||||
Transactions in Fund Shares – Institutional Shares | ||||||||||||||||||||||||||||
Shares sold | N/A | 22,247,144 | N/A | 1,611,594 | N/A | 124,711 | ||||||||||||||||||||||
Reinvested dividends and distributions | N/A | 44,041 | N/A | 1,865 | N/A | 50 | ||||||||||||||||||||||
Shares repurchased | N/A | (28,608,178) | N/A | (2,149,521) | N/A | (132,699) | ||||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | N/A | (6,316,993) | N/A | (536,062) | N/A | (7,938) | ||||||||||||||||||||||
Shares Outstanding, Beginning of Period | N/A | 6,316,993 | N/A | 536,062 | N/A | 7,938 | ||||||||||||||||||||||
Shares Outstanding, End of Period | N/A | – | N/A | – | N/A | – | ||||||||||||||||||||||
Transactions in Fund Shares – Service Shares | ||||||||||||||||||||||||||||
Shares sold | N/A | 13,983 | N/A | 164,498 | N/A | – | ||||||||||||||||||||||
Reinvested dividends and distributions | N/A | 169 | N/A | 739 | N/A | – | ||||||||||||||||||||||
Shares repurchased | N/A | (48,559) | N/A | (330,716) | N/A | (10) | ||||||||||||||||||||||
Net Increase/(Decrease) in Fund Shares | N/A | (34,407) | N/A | (165,479) | N/A | (10) | ||||||||||||||||||||||
Shares Outstanding, Beginning of Period | N/A | 34,407 | N/A | 165,479 | N/A | 10 | ||||||||||||||||||||||
Shares Outstanding, End of Period | N/A | – | N/A | – | N/A | – |
6. | Pending Legal Matters |
In the fall of 2003, the Securities and Exchange Commission (“SEC”), the Office of the New York State Attorney General (“NYAG”), the Colorado Attorney General (“COAG”), and the Colorado Division of Securities (“CDS”) announced that they were investigating alleged frequent trading practices in the mutual fund industry. On August 18, 2004, Janus Capital announced that it had reached final settlements with the SEC, the NYAG, the COAG, and the CDS related to such regulators’ investigations into Janus Capital’s frequent trading arrangements.
A number of civil lawsuits were brought against Janus Capital and certain of its affiliates, the Janus funds, and related entities and individuals based on allegations similar to those announced by the above regulators and were filed in several state and federal jurisdictions. Such lawsuits alleged a variety of theories for recovery including, but not limited to, the federal securities laws, other federal statutes (including ERISA), and various common law doctrines. The Judicial Panel on Multidistrict Litigation transferred these actions to the U.S. District Court for the District of Maryland (the “Court”) for coordinated proceedings. On September 29, 2004, five consolidated amended complaints were filed with the Court that generally include: (i) claims by a putative class of investors in certain Janus funds asserting claims on behalf of the investor class (Marini, et al. v. Janus Investment Fund, et al., U.S. District Court, District of Maryland, Case No. 04-CV-00497); (ii) derivative claims by investors in certain Janus funds ostensibly on behalf of such funds (Steinberg et al. v. Janus Capital Management, LLC et al., U.S. District Court, District of Maryland, Case No. 04-CV-00518); (iii) claims on behalf of participants in the Janus 401(k) plan (Wangberger v. Janus Capital Group Inc., 401(k) Advisory Committee, et al., U.S. District Court, District of Maryland, Case No. JFM-05-2711); (iv) claims brought on behalf of shareholders of Janus Capital Group Inc. (“JCGI”) on a derivative basis against the Board of Directors of JCGI (Chasen v. Whiston, et al., U.S. District Court, District of Maryland, Case No. 04-MD-00855); and (v) claims by a putative class of shareholders of JCGI asserting claims on behalf of the shareholders (Wiggins, et al. v. Janus Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No. 04-CV-00818). Each of the five complaints initially named JCGI and/or Janus Capital as a defendant. In addition, the following were also named as defendants in one or more of the actions: Janus Investment Fund (“JIF”), Janus Aspen Series (“JAS”), Janus Adviser Series (“JAD”), Janus Distributors LLC, Enhanced Investment Technologies, LLC (“INTECH”), Bay Isle Financial LLC (“Bay Isle”), Perkins, Wolf, McDonnell and Company, LLC (“Perkins”), the Advisory Committee of the Janus 401(k) plan, and the current or former directors of JCGI.
On August 25, 2005, the Court entered orders dismissing most of the claims asserted against Janus Capital and its affiliates by fund investors in the Marini and Steinberg cases (actions (i) and (ii) above) except certain claims under Section 10(b) of the Securities Exchange Act of 1934 and under Section 36(b) of the Investment Company Act of 1940, as
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amended (the “1940 Act”). On August 15, 2006, the Wangberger complaint in the 401(k) plan class action (action (iii) above) was dismissed by the district court with prejudice. The plaintiff appealed that dismissal decision to the United States Court of Appeals for the Fourth Circuit. The appeal is still pending and argument in the matter was held in December 2007. The Court also dismissed the Chasen lawsuit (action (iv) above) against JCGI’s Board of Directors without leave to amend. Finally, a Motion to Dismiss the Wiggins suit (action (v) above) was granted and the matter was dismissed in May 2007. However, in June 2007, Plaintiffs appealed that dismissal to the United States Court of Appeals for the Fourth Circuit. That appeal is currently pending.
In addition to the lawsuits described above, the Auditor of the State of West Virginia (“Auditor”), in his capacity as securities commissioner, has initiated administrative proceedings against many of the defendants in the market timing cases (including JCGI and Janus Capital) and, as a part of its relief, is seeking disgorgement and other monetary relief based on similar market timing allegations (In the Matter of Janus Capital Group Inc. et al., Before the Securities Commissioner, State of West Virginia, Summary Order No. 05-1320). The respondents in these proceedings collectively sought a Writ of Prohibition in state court, which was denied. Their subsequent Petition for Appeal was also denied. Consequently, in September 2006, JCGI and Janus Capital filed their answer to the Auditor’s summary order instituting proceedings and requested a hearing. A status conference was held on June 28, 2007, during which the parties were ordered to submit their proposed scheduling order. To date, no scheduling order has been entered in the case. In addition to the pending Motion to Discharge Order to Show Cause, JCGI and Janus Capital, as well as other similarly situated defendants, continue to challenge the statutory authority of the Auditor to bring such an action.
During 2007, two lawsuits were filed against Janus Management Holdings Corporation (“Janus Holdings”), an affiliate of JCGI, by former Janus portfolio managers, alleging that Janus Holdings unilaterally implemented certain changes to compensation in violation of prior agreements. These complaints allege some or all of the following claims: (1) breach of contract; (2) willful and wanton breach of contract; (3) breach of good faith and fair dealing; and (4) estoppel. Janus Holdings filed Answers to these complaints denying any liability for these claims and intends to vigorously defend against the allegations.
Additional lawsuits may be filed against certain of the Janus funds, Janus Capital, and related parties in the future. Janus Capital does not currently believe that these pending actions will materially affect its ability to continue providing services it has agreed to provide to the Janus funds.
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to their portfolio securities is available: (i) without charge, upon request, by calling 1-800-525-3713 (toll free); (ii) on the Funds’ website at www.janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding each Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through www.janus.com and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Funds file their complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Funds’ Form N-Q: (i) is available on the SEC’s website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-3713 (toll free).
Approval of Advisory Agreements During the Period
The Trustees of Janus Investment Fund, none of whom has ever been affiliated with Janus Capital (“Independent Trustees”), oversee the management of each Fund and, as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the three Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed a substantial amount of information provided by Janus Capital and the respective subadvisers in response to requests of the Independent Trustees and their independent legal counsel. They also received and reviewed a considerable amount of information and analysis provided by their independent fee consultant. Throughout their consideration of the agreements, the Independent Trustees were advised by their independent legal counsel. The Independent Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 14, 2007, based on their evaluation of the information provided by Janus Capital, the subadvisers and the independent fee consultant, as well as other information, the Trustees determined that the overall arrangements between each Fund and Janus Capital and each subadviser, as applicable, were fair and reasonable in light of the nature, extent and quality of the services provided by Janus Capital, its affiliates and the subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting the Trustees unanimously approved the continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, for the period from February 1, 2008 through February 1, 2009 (January 1, 2008 through January 1, 2009 for INTECH Risk-Managed Stock Fund and Janus Global Research Fund), subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective and strategy of each Fund, the knowledge of 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, especially those who provide investment management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions, serving as the Funds’ administrator, monitoring adherence to the Funds’ investment restrictions, producing shareholder reports, providing support services for the Trustees and Trustee committees, communicating with shareholders, and overseeing the activities of other service providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital and/or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements; that, taking into account steps taken to address those Funds whose performance lagged that of the median of their peers for certain periods, the quality of those services had been consistent with or superior to quality norms in the industry; and that 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
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appropriate education and experience, to serve the Funds effectively and had demonstrated its continuing ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the investment performance of each Fund over various time periods. They reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by Lipper Inc., an independent provider of investment company data, and with the Fund’s benchmark index. They concluded that the performance of many Funds was good to very good under current market conditions. Although the performance of some Funds lagged that of the median of their peers for certain periods, the Trustees also concluded that Janus Capital had taken appropriate steps to address those instances of under-performance and that the more recent performance of most of those Funds had been improving.
Costs of Services Provided
The Trustees examined information on the fees and expenses of each Fund in comparison to similar information for comparable funds as provided by Lipper. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and administrative) fees for most of the Funds, after contractual expense limitations, was below the mean management fee rate of the respective peer group of funds selected by Lipper.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital to its separate account clients and to its subadvised funds (for which Janus Capital provides only services related to portfolio management). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administrative services, oversight of the Funds’ other service providers, Trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, the Trustees noted that the spread between the average fee rates charged to the Funds and the fee rates that Janus Capital charged to its separate account clients was significantly smaller than the average spread for such fee rates of other advisers, based on publicly available data and research conducted by their independent fee consultant.
The Trustees reviewed information on the profitability to Janus Capital and its affiliates of their relationships with each Fund, as well as an explanation of the methodology used in allocating various expenses of Janus Capital and its affiliates among the Funds and other clients. They also reviewed the financial statements of Janus Capital’s parent company and its corporate structure. In their review, the Trustees considered whether Janus Capital and each subadviser receives adequate incentives to manage the Funds effectively. They recognized that profitability comparisons among investment advisers are difficult because very little comparative information is publicly available and profitability of any adviser is affected by numerous factors, including the organizational structure of the particular adviser, the types of funds and other accounts it manages, possible other lines of business, the methodology for allocating expenses, and the adviser’s capital structure and cost of capital. However, based on the information available and taking those factors into account, the Trustees concluded that Janus Capital’s profitability with respect to each Fund in relation to the services rendered was not unreasonable.
The Trustees concluded that the management fees and other compensation payable by each Fund to Janus Capital and its affiliates, as well as the fees payable by Janus Capital or the Funds to the subadvisers of subadvised Funds, were reasonable in relation to the nature, extent and quality of the services provided, taking into account the fees charged by other advisers for managing comparable mutual funds with similar strategies and the fees Janus Capital and the subadvisers charge to other clients. They also concluded that the overall expense ratio of each Fund was reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund and any expense limitations agreed to by Janus Capital.
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of the Funds increase. They noted that, although most Funds pay advisory fees at a fixed rate as a percentage of net assets, without any breakpoints, the management fee rate paid by each Fund, after any contractual expense limitations, was below the mean management fee rate of the Fund’s peer group selected by Lipper; and, for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of many of the Funds declined in the past few years, those Funds benefited from having advisory fee rates that remained constant rather than increasing as assets declined. In addition, performance fee structures have been
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Additional Information (unaudited) (continued)
implemented for several Funds that will cause the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through lower charges of third-party service providers, based on the combined scale of all of the Funds. Based on all of the information they reviewed, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of economies of scale at the current asset level of the Fund.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and that the transfer agent receives compensation directly from the non-money market Funds for services provided. They also considered Janus Capital’s past and proposed use of commissions paid by Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting those Funds and/or other clients of Janus Capital. The Trustees concluded that Janus Capital’s use of “soft” commission dollars of a Fund to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit the Funds. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital may potentially benefit from their relationship with each other in other ways. They also concluded that Janus Capital benefits from the receipt of proprietary and third-party research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s receipt of those products and services, as well as research products and services acquired through commissions paid by other clients of Janus Capital. They further concluded that success of any Fund could attract other business to Janus Capital or other Janus funds and that the success of Janus Capital could enhance Janus Capital’s ability to serve the Funds.
After full consideration of the above factors, as well as other factors, all of the Trustees, all of whom are Independent Trustees, concluded that the proposed continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, was in the best interest of the respective Funds and their shareholders.
68 Janus Bond and Money Market Funds April 30, 2008
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Explanations of Charts, Tables and
Financial Statements (unaudited)
Financial Statements (unaudited)
1. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in each Fund (from inception) with one or more widely used market indices. The hypothetical example does not represent the returns of any particular investment.
When comparing the performance of a Fund with an index, keep in mind that market indices do not include brokerage commissions that would be incurred if you purchased the individual securities in the index. They also do not include taxes payable on dividends and interest or operating expenses incurred if you maintained a Fund invested in the index.
Average annual total returns are also quoted for each Fund. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized and unsubsidized ratios for the past fiscal year. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting a Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and/or Janus Services and reflects a Fund’s subsidized expense ratio. Both the total annual fund operating expenses ratio and net annual fund operating expenses ratio are based on average net assets as of the fiscal year ended October 31, 2007. The ratios also include expenses indirectly incurred by the Fund as a result of investing in other investment companies or pooled investments, which are not reflected in the “Financial Highlights” of this report. As a result, these ratios may be higher or lower than those shown in the “Financial Highlights” in this report. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
2. | Schedules of Investments |
Following the performance overview section is each Fund’s Schedule of Investments. This schedule reports the industry concentrations and types of securities held in each Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
Funds that invest in foreign securities also provide a summary of investments by country. This summary reports the Fund’s exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country in which the company is incorporated.
2a. Forward Currency Contracts
A table listing forward currency contracts follows each Fund’s Schedule of Investments (if applicable). Forward currency contracts are agreements to deliver or receive a preset amount of currency at a future date. Forward currency contracts are used to hedge against foreign currency risk in the Fund’s long-term holdings.
The table provides the name of the foreign currency, the settlement date of the contract, the amount of the contract, the value of the currency in U.S. dollars and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the change in currency exchange rates from the time the contract was opened to the last day of the reporting period.
2b. Futures
A table listing futures contracts follows each Fund’s Schedule of Investments (if applicable). Futures contracts are contracts that obligate the buyer to receive and the seller to deliver an instrument or money at a specified price on a specified date. Futures are used to hedge against adverse movements in securities prices, currency risk or interest rates.
The table provides the name of the contract, number of contracts held, the expiration date, the principal amount, value and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the marked-to-market amount for the last day of the reporting period.
2c. Options
A table listing written options contracts follows each Fund’s Schedule of Investments (if applicable). Written options contracts are contracts that obligate a Fund to sell or purchase an underlying security at a fixed price, upon exercise of the option. Options are used to hedge against adverse movements in securities prices, currency risk or interest rates.
The table provides the name of the contract, number of contracts held, the expiration date, exercise price, value and premiums received.
Janus Bond and Money Market Funds April 30, 2008 69
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Explanations of Charts, Tables and
Financial Statements (unaudited) (continued)
Financial Statements (unaudited) (continued)
3. | Statement of Assets and Liabilities |
This statement is often referred to as the “balance sheet.” It lists the assets and liabilities of the Funds on the last day of the reporting period.
The Funds’ assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on stocks owned and the receivable for Fund shares sold to investors but not yet settled. The Funds’ liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Funds’ net assets. Because Funds must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Funds’ net assets (assets minus liabilities) by the number of shares outstanding.
4. | Statement of Operations |
This statement details the Funds’ income, expenses, gains and losses on securities and currency transactions, and appreciation or depreciation of current Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from stocks and interest earned from interest-bearing securities in the Funds.
The next section reports the expenses incurred by the Funds, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the increase or decrease in the value of securities held in the Funds. The Funds realize a gain (or loss) when they sell their position in a particular security. An unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Funds during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
5. | Statement of Changes in Net Assets |
This statement reports the increase or decrease in the Funds’ net assets during the reporting period. Changes in the Funds’ net assets are attributable to investment operations, dividends, distributions and capital share transactions. This is important to investors because it shows exactly what caused the Funds’ net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Funds’ investment performance. The Funds’ net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends in cash, money is taken out of the Fund to pay the distribution. If investors reinvest their dividends, the Funds’ net assets will not be affected. If you compare each Fund’s “Net Decrease from Dividends and Distributions” to the “Reinvested dividends and distributions,” you will notice that dividend distributions had little effect on each Fund’s net assets. This is because the majority of Janus investors reinvest their distributions.
The reinvestment of dividends is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Funds through purchases or withdrawals via redemptions. “Redemption Fees” (if applicable) refers to the fee paid to the Funds for shares held for 90 days or less by a shareholder. The Funds’ net assets will increase and decrease in value as investors purchase and redeem shares from the Funds.
6. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect each Fund’s net asset value (“NAV”) for current and past reporting periods. Not only does this table provide you with total return, it also reports total distributions, asset size, expense ratios and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income per share, which comprises dividends and interest income earned on securities held by the Fund. Following is the total of gains/(losses), realized and unrealized. Dividends and distributions are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the average annual total return reported the last day of the period.
Also included are the expense ratios, or the percentage of average net assets that were used to cover operating expenses during the period. Expense ratios vary across the Funds for a number of reasons, including the differences in management fees, the frequency of dividend payments and the extent of foreign investments, which entail greater transaction costs.
The Funds’ expenses may be reduced through expense-reduction arrangements. These arrangements may include the use of balance credits or transfer agent fee offsets. The Statement of Operations reflects total expenses before any such offset, the amount of the offset and the net expenses. The
70 Janus Bond and Money Market Funds April 30, 2008
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expense ratios listed in the Financial Highlights reflect total expenses prior to any expense offset (gross expense ratio) and after the expense offsets (net expense ratio). Both expense ratios reflect expenses after waivers (reimbursements), if applicable.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of a Fund during the reporting period. Don’t confuse this ratio with a Fund’s yield. The net investment income ratio is not a true measure of a Fund’s yield because it doesn’t take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in a Fund. Portfolio turnover is affected by market conditions, changes in the size asset of a Fund, the nature of the Fund’s investments and the investment style of the portfolio manager. A 100% rate implies that an amount equal to the value of the entire portfolio is turned over in a year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the portfolio is traded every six months.
Janus Bond and Money Market Funds April 30, 2008 71
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Notes
72 Janus Bond and Money Market Funds April 30, 2008
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Notes
Janus Bond and Money Market Funds April 30, 2008 73
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Janus provides access to a wide range of investment disciplines.
Asset Allocation
Janus asset allocation portfolios invest in several underlying mutual funds, rather than individual securities, in an attempt to offer investors an instantly diversified portfolio. Janus Smart Portfolios are unique in their combination of funds that leverage the fundamental research approach of Janus with funds supported by the risk-managed, mathematical investment process of INTECH (a Janus subsidiary).
Growth
Janus growth funds focus on companies believed to be the leaders in their respective industries, with solid management teams, expanding market share, margins and efficiencies.
Core
Janus core funds seek investments in more stable and predictable companies. These funds look for a strategic combination of steady growth and for certain funds, some degree of income.
Risk-Managed
Our risk-managed fund seeks to outperform its index while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH (a Janus subsidiary), this fund uses a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Janus value funds invest in companies they believe are poised for a turnaround or are trading at a significant discount to fair value. The goal is to gain unique insight into a company’s true value and identify and evaluate potential catalysts that may unlock shareholder value.
International & Global
Janus international and global funds seek to leverage Janus’ research capabilities by taking advantage of inefficiencies in foreign markets, where accurate information and analytical insight are often at a premium.
Bond & Money Market
Janus bond funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek maximum current income consistent with stability of capital.
For more information about our funds, go to www.janus.com.
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from www.janus.com. Read it carefully before you invest or send money.
Investments in money market funds are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the money market funds.
![]() | 151 Detroit Street Denver, CO 80206 1-800-525-3713 |
Funds distributed by Janus Distributors LLC (6/08)
C-0307-52 | 111-24-102 06-08 |
Table of Contents
2008 Semiannual Report
Janus Smart Portfolios
Janus Smart Portfolio – Moderate
Janus Smart Portfolio – Conservative
Look Inside. . .
• Portfolio management perspective
• Investment strategy behind your fund
• Fund performance, characteristics and holdings
![(JANUS LOGO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646janus.gif)
Table of Contents
Table of Contents
Janus Smart Portfolios
Co-Chief Investment Officers’ Letter to Shareholders | 1 | |
Useful Information About Your Portfolio Report | 5 | |
Management Commentaries and Schedules of Investments | ||
Janus Smart Portfolio – Growth | 6 | |
Janus Smart Portfolio – Moderate | 11 | |
Janus Smart Portfolio – Conservative | 16 | |
Statements of Assets and Liabilities | 21 | |
Statements of Operations | 22 | |
Statements of Changes in Net Assets | 23 | |
Financial Highlights | 24 | |
Notes to Schedules of Investments | 26 | |
Notes to Financial Statements | 27 | |
Additional Information | 42 | |
Explanations of Charts, Tables and Financial Statements | 45 |
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from www.janus.com. Read it carefully before you invest or send money.
Table of Contents
Co-Chief Investment Officers’ Letter to the Shareholders
![(JONATHAN COLEMAN PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646pcolemaj.jpg)
Jonathan Coleman
Co-Chief Investment Officer
![(GIBSON SMITH PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646psmithgi.jpg)
Gibson Smith
Co-Chief Investment Officer
Dear Shareholders,
Challenging economic conditions have been the dominant theme for the financial markets over the past several months. Despite recent volatility, our investment team has maintained a relentless focus on our fundamental, bottom-up research process and has continued to discover compelling investment opportunities for our shareholders.
Major Market Themes
Turmoil in the credit markets, uncertainty surrounding the near-term outlook for the U.S. economy and a weaker corporate profit picture made for a volatile and difficult market environment over the past several months. While sentiment toward the end of the period improved and U.S. equity markets finished well above their mid-March lows, stocks were broadly lower over the six months ended April 30, 2008. The Russell 1000® Index declined 9.54%, the Russell 2000® Index was down 12.92% and the Morgan Stanley Capital International (MSCI) All Country World IndexSM gave up 9.47% during the period. Fixed-income markets proved to be volatile over the period with the Lehman Brothers Aggregate Bond Index up 4.08% and the Lehman Brothers High-Yield Bond Index lost 0.74% over the period.
Additional write-offs related to the loose lending practices over the previous 36 months, slowing consumer spending and a softening labor market, accompanied by record commodity prices and rising inflation expectations, weighed on investor sentiment during the period. Stocks reached their lows in mid-March amid fears that credit conditions could suffer another setback given a deteriorating liquidity position at investment bank Bear Stearns. Uncertain market conditions resulted in interest rates hitting five-year lows with the 10-Year Treasury Note touching 3.33%. Prior to that, periodic liquidity injections by the Federal Reserve (Fed) failed to alleviate the stress in the funding and credit markets. Financial markets stabilized somewhat after the Fed aggressively lowered the Federal Funds rate, expanded the collateral it would accept, allowed for broker/dealers to borrow directly from the Fed and played an instrumental role in JPMorgan Chase’s purchase of near-defunct Bear Stearns. All of these moves were vitally important toward stabilizing the financial system while allowing for the recovery process to continue. By the end, the Fed had lowered its target interest rate from 4.50% to 2.00% during the period.
Following the March lows, the equity market’s rally at the end of the six-month period can be attributed to the moves by the Fed and, in part, to improving sentiment as investors began to look ahead to a possible economic recovery. Nevertheless, concerns about elevated inflationary pressures, soft consumer spending, the weak housing market and the lingering possibility of more write-downs continued to weigh on the market.
Performance Notables
For the one-year period ended April 30, 2008, 77% of Janus’ retail funds ranked within Lipper’s top two quartiles, based upon total returns. The results were even stronger over longer time periods as 87% of our retail funds achieved first- or second-quartile Lipper rankings over three years and 86% ranked in Lipper’s top two quartiles over five years. Furthermore, 78.3% of our retail funds had a 4- or 5-star overall Morningstar Ratingtm as of April 30, 2008, well ahead of the 32.5% of funds for which Morningstar awards 4- or 5-stars in each category. (See complete Lipper rankings on page 3 and complete Morningstar Ratingstm on page 4).
Investment Team Update
We continue to enhance the breadth of our global stock coverage and work tirelessly to generate solid investment insights in an attempt to deliver superior investment performance. Our hands-on research approach is critical to our stock selection process. As such, the Janus equity research team traveled over 2.9 million miles in 2007 investigating potential stock and bond picks worldwide. This year, we plan to embark on a multi-year strategy to locate certain investment personnel closer to the companies that they research as an important first step in building out our global footprint from a research standpoint.
While our objective is to develop a research edge and invest with conviction in our funds, we seek to do so in a disciplined and thoughtful way by clearly understanding and managing risk in our portfolios. Dan Scherman, Director of Risk and Trading, works continually with our investment management
Janus Smart Portfolios April 30, 2008 1
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Continued
team to ensure that portfolio risks are intentional and calculated. We believe this analysis is both timely and critical as we navigate today’s challenging markets.
Conclusion
As we look back over the past six months, we are relieved that signs of stabilization appeared in the financial markets as the period came to a close. However, we recognize that there are still significant challenges ahead. Increasing risk aversion has resulted in a significant contraction of credit availability for both consumers and corporations. The tightening of credit, along with declining real estate prices, rising energy prices and a climbing unemployment rate may all create significant economic headwinds in the near future. While unsettling, we believe this is a natural and necessary process of recovery from the excessive risk-taking and loose lending standards that developed over the previous several years in many areas of the credit markets. We feel that the environment will improve as the healing process progresses.
So, as we look ahead, we are paying very close attention to the outlook for the global economy, with a keen focus on slowing growth in the United States and the growth rates of the emerging economies around the globe. As these emerging economies become more prosperous, they may be able to move from economies based exclusively on exports fueling their growth to more balanced models emphasizing both exports and internal consumption of the goods they produce. Over a longer period of time, we believe this creates more stability in the global economy. We are also watching rising energy and commodity prices and their impact on inflationary expectations and the absolute level of interest rates. In addition to interest rates, we are focused on the outlook for the housing market and the implications of changes in home prices on the underlying health of the financial system, believing that the recapitalization of the banking and brokerage sectors is a vitally important element of the healing process.
While market volatility is undoubtedly challenging, it can also create an environment that can result in incredibly compelling investment opportunities. Our top priority is to remain committed to our process of in-depth fundamental research, which has been at the core of our investment process since Janus’ inception in 1969. With this singular focus we strive to deliver consistent long-term results for our shareholders.
Thank you for your continued investment in Janus funds.
Sincerely,
![(-s- JONATHAN COLEMAN)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646scolemaj.gif)
Jonathan Coleman
Co-Chief Investment Officer
![(-s- GIBSON SMITH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646ssmithgi.gif)
Gibson Smith
Co-Chief Investment Officer
2 Janus Smart Portfolios April 30, 2008
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Lipper Rankings (unaudited)
Lipper Rankings – Based on total returns as of 4/30/08 | ||||||||||||||||||||||||||
One Year | Three Year | Five Year | Ten Year | Since Inception | Since PM Inception | |||||||||||||||||||||
Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | Percentile | Rank/ | |||||||||||||||
Lipper Category | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | Rank (%) | Total Funds | ||||||||||||||
Janus Investment Fund (Inception Date) | ||||||||||||||||||||||||||
Janus Fund (2/70) | Large-Cap Growth Funds | 58 | 429/748 | 26 | 162/634 | 39 | 203/528 | 43 | 107/250 | 11 | 2/18 | 32 | 246/776 | |||||||||||||
Janus Enterprise Fund(1)(9/92) | Mid-Cap Growth Funds | 9 | 50/604 | 6 | 27/503 | 6 | 21/414 | 34 | 60/179 | 26 | 12/46 | 3 | 13/623 | |||||||||||||
Janus Orion Fund (6/00) | Multi-Cap Growth Funds | 2 | 10/513 | 2 | 5/396 | 1 | 1/329 | N/A | N/A | 17 | 35/212 | 3 | 16/558 | |||||||||||||
Janus Research Fund(1) (5/93) | Large-Cap Growth Funds | 19 | 141/748 | 4 | 24/634 | 3 | 14/528 | 3 | 7/250 | 3 | 2/79 | 2 | 9/678 | |||||||||||||
Janus Triton Fund(1)(2/05) | Small-Cap Growth Funds | 8 | 42/598 | 5 | 24/481 | N/A | N/A | N/A | N/A | 2 | 6/471 | 3 | 15/542 | |||||||||||||
Janus Twenty Fund* (4/85) | Large-Cap Growth Funds | 1 | 1/748 | 1 | 1/634 | 1 | 1/528 | 2 | 4/250 | 3 | 1/36 | 1 | 1/807 | |||||||||||||
Janus Venture Fund* (4/85) | Small-Cap Growth Funds | 69 | 410/598 | 32 | 150/481 | 9 | 35/395 | 24 | 44/187 | 9 | 1/11 | 23 | 69/308 | |||||||||||||
Janus Global Life Sciences Fund (12/98) | Health/Biotechnology Funds | 4 | 7/195 | 17 | 25/153 | 13 | 18/141 | N/A | N/A | 13 | 6/47 | 4 | 7/195 | |||||||||||||
Janus Global Technology Fund (12/98) | Science & Technology Funds | 23 | 60/264 | 16 | 38/241 | 29 | 63/219 | N/A | N/A | 19 | 14/74 | 18 | 45/250 | |||||||||||||
Janus Balanced Fund(1) (9/92) | Mixed-Asset Target Allocation Moderate Funds | 2 | 7/451 | 1 | 3/349 | 24 | 55/232 | 6 | 7/136 | 4 | 1/29 | 1 | 3/349 | |||||||||||||
Janus Contrarian Fund (2/00) | Multi-Cap Core Funds | 12 | 98/863 | 1 | 1/680 | 1 | 1/498 | N/A | N/A | 5 | 12/294 | 5 | 12/294 | |||||||||||||
Janus Fundamental Equity Fund(1) (6/96) | Large-Cap Core Funds | 25 | 201/822 | 4 | 26/684 | 6 | 34/575 | 1 | 3/299 | 1 | 1/207 | 26 | 217/848 | |||||||||||||
Janus Growth and Income Fund(1) (5/91) | Large-Cap Core Funds | 30 | 245/822 | 21 | 140/684 | 29 | 163/575 | 8 | 22/299 | 6 | 4/74 | 21 | 173/848 | |||||||||||||
INTECH Risk-Managed Stock Fund (2/03) | Multi-Cap Core Funds | 63 | 540/863 | 64 | 433/680 | 31 | 150/498 | N/A | N/A | 35 | 172/497 | 35 | 172/497 | |||||||||||||
Janus Mid Cap Value Fund – Inv(1)(2) (8/98) | Mid-Cap Value Funds | 6 | 17/332 | 13 | 34/264 | 17 | 34/204 | N/A | N/A | 2 | 1/66 | 2 | 1/66 | |||||||||||||
Janus Small Cap Value Fund – Inv*(2) (10/87) | Small-Cap Core Funds | 11 | 84/796 | 30 | 191/638 | 44 | 214/493 | 14 | 25/190 | 12 | 15/130 | 12 | 15/130 | |||||||||||||
Janus Flexible Bond Fund(1) (7/87) | Intermediate Investment Grade Debt Funds | 11 | 57/559 | 9 | 39/473 | 15 | 59/403 | 36 | 70/194 | 14 | 3/22 | 11 | 60/563 | |||||||||||||
Janus High-Yield Fund(1) (12/95) | High Current Yield Funds | 59 | 270/458 | 49 | 185/383 | 71 | 235/333 | 22 | 35/163 | 5 | 4/97 | 46 | 161/349 | |||||||||||||
Janus Short-Term Bond Fund(1) (9/92) | Short Investment Grade Debt Funds | 28 | 72/262 | 28 | 58/211 | 22 | 35/160 | 33 | 28/84 | 32 | 8/24 | 31 | 79/262 | |||||||||||||
Janus Global Opportunities Fund(1) (6/01) | Global Funds | 73 | 320/443 | 95 | 330/349 | 65 | 173/267 | N/A | N/A | 29 | 60/207 | 29 | 60/207 | |||||||||||||
Janus Global Research Fund(1)(2/05) | Multi-Cap Growth Funds | 4 | 15/443 | 3 | 10/349 | N/A | N/A | N/A | N/A | 4 | 10/324 | 4 | 10/324 | |||||||||||||
Janus Overseas Fund*(1) (5/94) | International Funds | 1 | 7/1122 | 1 | 1/821 | 1 | 1/682 | 3 | 7/331 | 1 | 1/110 | 1 | 1/685 | |||||||||||||
Janus Worldwide Fund(1) (5/91) | Global Funds | 73 | 321/443 | 78 | 271/349 | 96 | 255/267 | 82 | 100/122 | 36 | 6/16 | 80 | 238/299 | |||||||||||||
Janus Smart Portfolio – Growth (12/05) | Mixed-Asset Target Allocation Growth Funds | 3 | 14/669 | N/A | N/A | N/A | N/A | N/A | N/A | 2 | 10/582 | 2 | 10/582 | |||||||||||||
Janus Smart Portfolio – Moderate (12/05) | Mixed-Asset Target Allocation Moderate Funds | 1 | 3/451 | N/A | N/A | N/A | N/A | N/A | N/A | 2 | 7/383 | 2 | 7/383 | |||||||||||||
Janus Smart Portfolio – Conservative (12/05) | Mixed-Asset Target Allocation Conservative Funds | 3 | 9/429 | N/A | N/A | N/A | N/A | N/A | N/A | 2 | 6/339 | 2 | 6/339 | |||||||||||||
(1) | The date of the Lipper ranking is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception. | |
(2) | Rating is for the Investor Share class only; other classes may have different performance characteristics. |
* | Closed to new investors. |
Past performance is no guarantee of future results. Call 1-800-525-3713 or visit janus.com for current month end performance.
If an expense waiver was in effect, it may have had a material effect on the total return or yield, and therefore the ranking for the period.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
Janus Smart Portfolios April 30, 2008 3
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Morningstar Ratingstm (unaudited)
Morningstar Ratingstm based on | ||||||||||||||||||||
total returns as of 4/30/08 | ||||||||||||||||||||
OVERALL RATING(1) | THREE-YEAR RATING | FIVE-YEAR RATING | TEN-YEAR RATING | |||||||||||||||||
CATEGORY | STARS | # OF FUNDS | STARS | # OF FUNDS | STARS | # OF FUNDS | STARS | # OF FUNDS | ||||||||||||
Janus Investment Fund | ||||||||||||||||||||
Janus Fund | Large Growth Funds | *** | 1458 | **** | 1458 | *** | 1205 | *** | 566 | |||||||||||
Janus Enterprise Fund | Mid-Cap Growth Funds | **** | 828 | ***** | 828 | ** *** | 694 | *** | 311 | |||||||||||
Janus Orion Fund | Mid-Cap Growth Funds | ***** | 828 | ***** | 828 | ***** | 694 | N/A | 311 | |||||||||||
Janus Research Fund | Large Growth Funds | ***** | 1458 | ***** | 1458 | ***** | 1205 | **** | 566 | |||||||||||
Janus Triton Fund | Small Growth Funds | ***** | 688 | ***** | 688 | N/A | 560 | N/A | 270 | |||||||||||
Janus Twenty Fund(2) | Large Growth Funds | ***** | 1458 | ***** | 1458 | ***** | 1205 | ***** | 566 | |||||||||||
Janus Venture Fund(2) | Small Growth Funds | *** | 688 | *** | 688 | **** | 560 | *** | 270 | |||||||||||
Janus Global Life Sciences Fund | Specialty-Health Funds | **** | 183 | **** | 183 | **** | 166 | N/A | 54 | |||||||||||
Janus Global Technology Fund | Specialty-Technology Funds | **** | 264 | **** | 264 | **** | 235 | N/A | 69 | |||||||||||
Janus Balanced Fund | Moderate Allocation Funds | ***** | 937 | ***** | 937 | **** | 717 | ***** | 422 | |||||||||||
Janus Contrarian Fund | Large Blend Funds | ***** | 1695 | ***** | 1695 | ***** | 1316 | N/A | 630 | |||||||||||
Janus Fundamental Equity Fund | Large Blend Funds | ***** | 1695 | ***** | 1695 | **** | 1316 | ***** | 630 | |||||||||||
Janus Growth and Income Fund | Large Growth Funds | **** | 1458 | *** | 1458 | *** | 1205 | ***** | 566 | |||||||||||
INTECH Risk-Managed Stock Fund | Large Blend Funds | **** | 1695 | *** | 1695 | **** | 1316 | N/A | 630 | |||||||||||
Janus Mid Cap Value Fund – Institutional Shares(2) | Mid-Cap Value Funds | ***** | 301 | ***** | 301 | ***** | 217 | N/A | 66 | |||||||||||
Janus Mid Cap Value Fund – Investor Shares | Mid-Cap Value Funds | ***** | 301 | ***** | 301 | ***** | 217 | N/A | 66 | |||||||||||
Janus Small Cap Value Fund – Institutional Shares(2) | Small Value Funds | **** | 338 | **** | 338 | **** | 267 | **** | 102 | |||||||||||
Janus Small Cap Value Fund – Investor Shares(2) | Small Value Funds | **** | 338 | **** | 338 | *** | 267 | **** | 102 | |||||||||||
Janus Flexible Bond Fund | Intermediate-Term Bond Funds | **** | 984 | **** | 984 | **** | 832 | *** | 439 | |||||||||||
Janus High-Yield Fund | High Yield Bond Funds | *** | 470 | *** | 470 | ** | 402 | **** | 210 | |||||||||||
Janus Short-Term Bond Fund | Short-Term Bond Funds | **** | 388 | **** | 388 | **** | 290 | *** | 165 | |||||||||||
Janus Global Opportunities Fund | World Stock Funds | ** | 463 | * | 463 | ** | 390 | N/A | 201 | |||||||||||
Janus Global Research Fund | World Stock Funds | ***** | 463 | ***** | 463 | N/A | 390 | N/A | 201 | |||||||||||
Janus Overseas Fund(2) | Foreign Large Growth Funds | ***** | 184 | ***** | 184 | ***** | 158 | **** | 75 | |||||||||||
Janus Worldwide Fund | World Stock Funds | ** | 463 | ** | 463 | * | 390 | *** | 201 | |||||||||||
Janus Smart Portfolio – Growth | Moderate Allocation Funds | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||
Janus Smart Portfolio – Moderate | Moderate Allocation Funds | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||
Janus Smart Portfolio – Conservative | Conservative Allocation Funds | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||
Percent of funds rated 4 or 5 stars | 78.3% | 73.9% | 71.4% | 57.1% |
(1) | The Overall Morningstar RatingTM is derived from a weighted average of the performance figures associated with its three-, five-, and ten-year (if applicable) Morningstar RatingTM metrics. | |
(2) | Closed to new investors. |
Data presented reflects past performance, which is no guarantee of future results.
For each fund with at least a three-year history, Morningstar calculates a Morningstar RatingTM based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of the funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variation in the distribution percentages.)
© 2008 Morningstar, Inc. All Rights Reserved.
4 Janus Smart Portfolios April 30, 2008
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Useful Information About Your Portfolio Report
Management Commentaries
The Management Commentaries in this report include valuable insight from the Portfolios’ manager as well as statistical information to help you understand how your Portfolio’s performance and characteristics stack up against those of comparable indices.
Please keep in mind that the opinions expressed by the Portfolios’ manager in the Management Commentaries are just that: opinions. They are a reflection of their best judgment at the time this report was compiled, which was April 30, 2008. As the investing environment changes, so could the manager’s opinions. These views are unique to the manager and aren’t necessarily shared by his fellow employees or by Janus in general.
Portfolio Expenses
We believe it’s important for our shareholders to have a clear understanding of Portfolio expenses and the impact they have on investment return.
The following is important information regarding each Portfolio’s Expense Example, which appears in each Portfolio’s Management Commentary within this Semiannual Report. Please refer to this information when reviewing the Expense Example for each Portfolio.
Example
As a shareholder of a Portfolio, you incur two types of costs: (1) transaction costs, such as underlying funds’ redemption fees, where applicable (and any related exchange fees) and (2) ongoing costs, including management fees and other Portfolio expenses. The example is intended to help you understand your ongoing costs (in dollars) of investing in a Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-month period from November 1, 2007 to April 30, 2008.
Actual Expenses
The first line of the table in each example provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of the table in each example provides information about hypothetical account values and hypothetical expenses based upon the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Janus Capital Management LLC (“Janus Capital”) has contractually agreed to waive each Portfolio’s total operating expenses, excluding any expenses of an underlying fund, brokerage commissions, interest, dividends, taxes and extraordinary expenses including, but not limited to, acquired fund fees and expenses to certain limits until at least March 1, 2009. Expenses in the examples reflect application of these waivers. Had the waivers not been in effect, your expenses would have been higher. More information regarding the waivers is available in the Portfolios’ prospectuses.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as underlying funds’ redemption fees (where applicable). Redemption fees are fully described in the prospectus. Therefore, the second line of each table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Janus Smart Portfolios April 30, 2008 5
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Janus Smart Portfolio – Growth (unaudited) | Ticker: JSPGX |
Portfolio Snapshot
This asset allocation fund combines funds backed by Janus’ fundamental research approach with those using the mathematical approach of INTECH. The portfolio seeks growth of capital with approximately 80% allocated to stocks and 20% to bonds and money markets.
![(DAN SCHERMAN PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646pschermd.jpg)
Dan Scherman
portfolio manager
Performance Overview
Janus Smart Portfolio – Growth returned (4.53)% for the six-month period ended April 30, 2008. That compares to a return of (9.64)% for the Portfolio’s primary benchmark, the S&P 500® Index, during the same period. The Portfolio also fared better than its secondary benchmark, the Growth Allocation Index – a hypothetical combination of unmanaged indices – which returned (6.91)%. This internally-calculated index combines the total returns from the Dow Jones Wilshire 5000 Index (50%), the Morgan Stanley Capital International (MSCI) EAFE® Index (25%), the Lehman Brothers Aggregate Bond Index (20%) and the MSCI Emerging Markets Free IndexSM (5%). The outperformance was consistent with the Portfolio’s objective, which is to seek the highest return over time consistent with a primary emphasis on growth of capital and a secondary emphasis on income.
Market Review
Many of the same issues that conspired to create last summer’s sudden spike in market volatility remained unresolved during the period, creating a challenging environment for investors. If anything, the outlook darkened somewhat during the last six months as plunging consumer confidence, a sharp decline in the U.S. dollar, a softening of the labor market and growing fears of a global recession joined the housing and mortgage market crises as the latest worries holding back the market. The result was a continued “risk aversion” trend that saw investors flee some of the more aggressive areas of the market for the perceived relative security of bonds and so-called “hard assets” like gold and commodities, which some view as a good place to ride out the storm.
Portfolio Review
This shift in attitudes about risk had a direct impact on our bond holdings. Not coincidentally, Janus Flexible Bond Fund – a fairly conservative fund and the primary way that we seek to participate in the bond market – rose 4.75% during the period to become the top performing position in our lineup. Its more aggressive counterpart, Janus High-Yield Fund, declined 1.65% in the period as investors rotated away from riskier corporate bonds and toward the calmer waters of the investment-grade and government bond markets.
Although the impacts of this rising aversion to risk were not surprising to us – even predictable with respect to our bond holdings – the impact of the market’s preference for commodities was more subtle. Skyrocketing oil prices dominated headlines in recent months, but prices of many non-energy commodities have been rising just as fast. That has provided a powerful tailwind for stocks exposed to extremely bullish trends in materials, energy and agricultural markets – themes that have helped drive performance of Janus Twenty Fund for quite some time. Largely as a result of this tailwind, Janus Twenty Fund overcame a steep decline in the stock market to post a gain of 2.39% for the six-month period amid a decidedly negative market, making it the best-performing equity fund in the Portfolio during the period.
On the other side of the ledger, many of our holdings were caught in the market’s general weakness. One example was our position in Janus Growth and Income Fund, which lost 11.83% during the period. Portfolio manager Marc Pinto, who recently took the reins from Minyoung Sohn, has many years of investment experience and has my full confidence. I have maintained a position in the fund despite this setback.
I remain similarly committed to our positions in the risk-managed large-cap growth and large-cap value funds managed by our mathematical affiliate INTECH, even though these funds have recently failed to keep pace with their benchmarks. I view periodic underperformance by these strategies as a natural occurrence and remain confident that they will continue to perform well over the longer term.
Portfolio Strategy
Although I am contemplating some modest changes to the underlying fund allocations, there were no substantial changes to the Portfolio’s strategy during the period. Janus Smart Portfolio – Growth is structured as a “fund of funds” portfolio that provides investors with broad, diversified exposure to various types of investments with a clear emphasis on growth. The Portfolio is also designed to blend the two core competencies Janus enjoys as an organization: mathematically driven, risk-managed strategies and fundamentally driven, growth-oriented investments. I believe that combining these two very different approaches in a single investment can produce a portfolio with a unique and powerful performance profile.
6 Janus Smart Portfolios April 30, 2008
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(unaudited)
Our investment process involves setting return expectations for a broad range of possible Janus and INTECH mutual funds that the analyst team and I believe best represent the full opportunity set available to today’s investor. Then, acting in conjunction with an outside consultant, we establish an ideal “model” portfolio based upon the specific risk/return objective of Janus Smart Portfolio – Growth. Finally, we select our desired exposure.
At period-end, 79.6% of the Portfolio was allocated to equity funds, with the remaining 20.4% of the Portfolio invested in fixed-income funds. Under normal market conditions, a broadly diversified portfolio attempts to buffer the risk that an all-stock portfolio might ordinarily bear. The allocations assigned to each selected underlying fund were consistent with our view of market conditions and the long-term trade-off between risk and reward that each of these investment types represents. However, as a result of changing market conditions, both the mix of underlying funds and the allocations to these funds will change from time to time.
Thank you for investing in Janus Smart Portfolio – Growth.
Janus Smart Portfolio – Growth (% of Net Assets)
Janus Flexible Bond Fund | 17.6% | |||
Janus Overseas Fund | 15.2% | |||
Janus Adviser INTECH Risk-Managed Growth Fund – Class I Shares | 12.8% | |||
Janus Adviser INTECH Risk-Managed Value Fund – Class I Shares | 12.2% | |||
Janus Adviser International Equity Fund – Class I Shares | 9.4% | |||
Janus Twenty Fund | 9.4% | |||
Janus Research Fund | 7.9% | |||
Janus Growth and Income Fund | 7.3% | |||
Janus Orion Fund | 5.4% | |||
Janus High-Yield Fund | 2.8% |
Janus Smart Portfolio – Growth At A Glance
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif23p02.gif)
Janus Smart Portfolios April 30, 2008 7
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Janus Smart Portfolio – Growth (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif23m02.gif)
Average Annual Total Return – for the periods ended April 30, 2008 | Expense Ratios – for the fiscal year ended October 31, 2007 | ||||||||||
Fiscal | One | Since | Total Annual Fund | Net Annual Fund | |||||||
Year-to-Date | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Janus Smart Portfolio – Growth | (4.53)% | 7.40% | 13.78% | 0.90% | 0.87% | ||||||
S&P 500® Index | (9.64)% | (4.68)% | 6.58% | ||||||||
Growth Allocation Index | (6.91)% | (0.12)% | 9.40% | ||||||||
Lipper Quartile | – | 1st | 1st | ||||||||
Lipper Ranking – based on total return for Mixed-Asset Target Allocation Growth Funds | – | 14/669 | 10/582 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
A Portfolio which redeems or exchanges certain underlying funds’ shares held for 90 days or less may be subject to an underlying fund’s 2.00% redemption fee, if any.
Janus Capital has contractually agreed to waive the Portfolio’s total operating expenses (excluding any expenses of an underlying fund, brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to a certain limit until at least March 1, 2009. For a period of three years subsequent to the Portfolios’ commencement of operations, Janus Capital may recover from each Portfolio, fees and expenses previously waived or reimbursed if that Portfolio’s expense ratio, including recovered expenses, falls below the respective expense limit. The expense waivers are detailed in the Statement of Additional Information. Returns shown include fee waivers and without such waivers returns would have been lower.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Portfolio invests or has invested during the period.) Contractual waivers agreed to by Janus Capital, where applicable, are included in the prospectus under “Net Annual Fund Operating Expenses.” All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
8 Janus Smart Portfolios April 30, 2008
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(unaudited)
An underlying fund’s performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Portfolio may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and other details.
Because Janus Capital is the adviser to the Janus Smart Portfolios and to the underlying funds held within the Portfolios, it is subject to certain potential conflicts of interest when allocating the assets of the Portfolios among underlying Janus funds. Performance of Janus Smart Portfolios depends on that of the underlying funds. They are subject to the volatility of the financial markets in the U.S. and abroad and to the additional risks associated with investments.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Portfolio’s holdings may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Portfolio’s inception date – December 30, 2005 |
Portfolio Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Portfolio and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Portfolio Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 954.70 | $ | 1.22 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,023.62 | $ | 1.26 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.25%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital. The expense ratio does not include acquired fund fees and expenses. |
Janus Smart Portfolios April 30, 2008 9
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Janus Smart Portfolio – Growth
Schedule of Investments (unaudited)
As of April 30, 2008
Shares | Value | |||||||
Mutual Funds(1) – 100.0% | ||||||||
Equity Funds – 79.6% | ||||||||
1,894,425 | Janus Adviser INTECH Risk-Managed Growth Fund – Class I Shares | $ | 25,726,291 | |||||
2,254,203 | Janus Adviser INTECH Risk-Managed Value Fund – Class I Shares | 24,367,933 | ||||||
1,465,286 | Janus Adviser International Equity Fund – Class I Shares | 18,784,967 | ||||||
421,583 | Janus Growth and Income Fund | 14,565,683 | ||||||
840,329 | Janus Orion Fund | 10,798,227 | ||||||
552,717 | Janus Overseas Fund | 30,471,314 | ||||||
528,956 | Janus Research Fund | 15,762,881 | ||||||
245,391 | Janus Twenty Fund | 18,733,122 | ||||||
159,210,418 | ||||||||
Fixed-Income Funds – 20.4% | ||||||||
3,622,731 | Janus Flexible Bond Fund | 35,104,264 | ||||||
630,997 | Janus High-Yield Fund | 5,697,904 | ||||||
40,802,168 | ||||||||
Total Investments (total cost $187,850,373) – 100.0% | 200,012,586 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.0)% | (34,568) | |||||||
Net Assets – 100% | $ | 199,978,018 | ||||||
(1) | The Portfolio invests in mutual funds within the Janus family of funds and they may be deemed to be under common control because they share the same Board of Trustees. |
See Notes to Schedules of Investments and Financial Statements.
10 Janus Smart Portfolios April 30, 2008
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Janus Smart Portfolio – Moderate (unaudited) | Ticker: JSPMX |
Portfolio Snapshot
This asset allocation fund combines funds backed by Janus’ fundamental research approach with those using the mathematical approach of INTECH. The portfolio seeks growth of capital and income with approximately 60% allocated to stocks and 40% to bonds and money markets.
![(DAN SCHERMAN PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646pschermd.jpg)
Dan Scherman
portfolio manager
Performance Overview
Janus Smart Portfolio – Moderate returned (2.90)% for the six-month period ended April 30, 2008. That compares to a return of (9.64)% for the Portfolio’s primary benchmark, the S&P 500® Index, during the same period. The Portfolio also fared better than its secondary benchmark, the Moderate Allocation Index – a hypothetical combination of unmanaged indices – which returned (4.20)%. This internally-calculated index combines the total returns from the Dow Jones Wilshire 5000 Index (40%), the Lehman Brothers Aggregate Bond Index (40%), the Morgan Stanley Capital International (MSCI) EAFE® Index (18%) and the MSCI Emerging Markets Free IndexSM (2%). The outperformance was consistent with the Portfolio’s objective, which is to seek the highest return over time consistent with an emphasis on growth of capital and income.
Market Review
Many of the same issues that conspired to create last summer’s sudden spike in market volatility remained unresolved during the period, creating a challenging environment for investors. If anything, the outlook darkened somewhat during the last six months as plunging consumer confidence, a sharp decline in the U.S. dollar, a softening of the labor market and growing fears of a global recession joined the housing and mortgage market crises as the latest worries holding back the market. The result was a continued “risk aversion” trend that saw investors flee some of the more aggressive areas of the market for the perceived relative security of bonds and so-called “hard assets” like gold and commodities, which some view as a good place to ride out the storm.
Portfolio Review
This shift in attitudes about risk had a direct impact on our bond holdings. Not coincidentally, Janus Flexible Bond Fund – a fairly conservative fund and the primary way that we seek to participate in the bond market – rose 4.75% during the period to become the top performing position in our lineup. Its more aggressive counterpart, Janus High-Yield Fund, declined 1.65% in the period as investors rotated away from riskier corporate bonds and toward the calmer waters of the investment-grade and government bond markets.
Although the impacts of this rising aversion to risk were not surprising to us – even predictable with respect to our bond holdings – the impact of the market’s preference for commodities was more subtle. Skyrocketing oil prices dominated headlines in recent months, but prices of many non-energy commodities have been rising just as fast. That has provided a powerful tailwind for stocks exposed to extremely bullish trends in materials, energy and agricultural markets – themes that have helped drive performance of Janus Twenty Fund for quite some time. Largely as a result of this tailwind, Janus Twenty Fund overcame a steep decline in the stock market to post a gain of 2.39% for the six-month period amid a decidedly negative market, making it the best-performing equity fund in the Portfolio during the period.
On the other side of the ledger, many of our holdings were caught in the market’s general weakness. One example was our position in Janus Growth and Income Fund, which lost 11.83% during the period. Portfolio manager Marc Pinto, who recently took the reins from Minyoung Sohn, has many years of investment experience and has my full confidence. I have maintained a position in the fund despite this setback.
I remain similarly committed to our positions in the risk-managed large-cap growth and large-cap value funds managed by our mathematical affiliate INTECH, even though these funds have recently failed to keep pace with their benchmarks. I view periodic underperformance by these strategies as a natural occurrence and remain confident that they will continue to perform well over the longer term.
Portfolio Strategy
Although I am contemplating some modest changes to the underlying fund allocations, there were no substantial changes to the Portfolio’s strategy during the period. Janus Smart Portfolio – Moderate is structured as a “fund of funds” portfolio that provides investors with broad, diversified exposure to various types of investments with a clear emphasis on growth. The Portfolio is also designed to blend the two core competencies Janus enjoys as an organization: mathematically driven, risk-managed strategies and fundamentally driven, growth-oriented investments. I believe that combining these two very different approaches in a single investment can produce a portfolio with a unique and powerful performance profile.
Janus Smart Portfolios April 30, 2008 11
Table of Contents
Janus Smart Portfolio – Moderate (unaudited)
Our investment process involves setting return expectations for a broad range of possible Janus and INTECH mutual funds that the analyst team and I believe best represent the full opportunity set available to today’s investor. Then, acting in conjunction with an outside consultant, we establish an ideal “model” portfolio based upon the specific risk/return objective of Janus Smart Portfolio – Moderate. Finally, we select our desired exposure.
At period-end, 59.1% of the Portfolio was allocated to equity funds, with the remaining 40.9% of the Portfolio invested in fixed-income funds. Under normal market conditions, a broadly diversified portfolio attempts to buffer the risk that an all-stock portfolio might ordinarily bear. The allocations assigned to each selected underlying fund were consistent with our view of market conditions and the long-term trade-off between risk and reward that each of these investment types represents. However, as a result of changing market conditions, both the mix of underlying funds and the allocations to these funds will change from time to time.
Thank you for investing in Janus Smart Portfolio – Moderate.
Janus Smart Portfolio – Moderate (% of Net Assets)
Janus Flexible Bond Fund | 34.1% | |||
Janus Overseas Fund | 12.0% | |||
Janus Adviser INTECH Risk-Managed Growth Fund – Class I Shares | 10.1% | |||
Janus Adviser INTECH Risk-Managed Value Fund – Class I Shares | 8.7% | |||
Janus Growth and Income Fund | 8.2% | |||
Janus Adviser International Equity Fund – Class I Shares | 6.3% | |||
Janus Research Fund | 5.9% | |||
Janus Twenty Fund | 4.7% | |||
Janus Short-Term Bond Fund | 4.0% | |||
Janus Orion Fund | 3.2% | |||
Janus High-Yield Fund | 2.8% |
Janus Smart Portfolio – Moderate At A Glance
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif23p03.gif)
12 Janus Smart Portfolios April 30, 2008
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(unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif23m03.gif)
Expense Ratios – for the fiscal year ended | |||||||||||
Average Annual Total Return – for the periods ended April 30, 2008 | October 31, 2007 | ||||||||||
Fiscal | One | Since | Total Annual Fund | Net Annual Fund | |||||||
Year-to-Date | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Janus Smart Portfolio – Moderate | (2.90)% | 6.48% | 11.07% | 0.90% | 0.84% | ||||||
S&P 500® Index | (9.64)% | (4.68)% | 6.58% | ||||||||
Moderate Allocation Index | (4.20)% | 1.16% | 8.13% | ||||||||
Lipper Quartile | – | 1st | 1st | ||||||||
Lipper Ranking – based on total return for Mixed-Asset Target Allocation Moderate Funds | – | 3/451 | 7/383 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
A Portfolio which redeems or exchanges certain underlying funds’ shares held for 90 days or less may be subject to an underlying fund’s 2.00% redemption fee, if any.
Janus Capital has contractually agreed to waive the Portfolio’s total operating expenses (excluding any expenses of an underlying fund, brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to a certain limit until at least March 1, 2009. For a period of three years subsequent to the Portfolios’ commencement of operations, Janus Capital may recover from each Portfolio, fees and expenses previously waived or reimbursed if that Portfolio’s expense ratio, including recovered expenses, falls below the respective expense limit. The expense waivers are detailed in the Statement of Additional Information. Returns shown include fee waivers and without such waivers returns would have been lower.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Portfolio invests or has invested during the period.) Contractual waivers agreed to by Janus Capital, where applicable, are included in the prospectus under “Net Annual Fund Operating Expenses.” All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
Janus Smart Portfolios April 30, 2008 13
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Janus Smart Portfolio – Moderate (unaudited)
An underlying fund’s performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Portfolio may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and other details.
Because Janus Capital is the adviser to the Janus Smart Portfolios and to the underlying funds held within the Portfolios, it is subject to certain potential conflicts of interest when allocating the assets of the Portfolios among underlying Janus funds. Performance of Janus Smart Portfolios depends on that of the underlying funds. They are subject to the volatility of the financial markets in the U.S. and abroad and to the additional risks associated with investments.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Portfolio’s holdings may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Portfolio’s inception date – December 30, 2005 |
Portfolio Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Portfolio and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Portfolio Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07-4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 971.00 | $ | 1.03 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,023.87 | $ | 1.06 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.21%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital. The expense ratio does not include acquired fund fees and expenses. |
14 Janus Smart Portfolios April 30, 2008
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Janus Smart Portfolio – Moderate
Schedule of Investments (unaudited)
As of April 30, 2008
Shares | Value | |||||||
Mutual Funds(1) – 100.0% | ||||||||
Equity Funds – 59.1 % | ||||||||
1,059,564 | Janus Adviser INTECH Risk-Managed Growth Fund – Class I Shares | $ | 14,388,861 | |||||
1,147,714 | Janus Adviser INTECH Risk-Managed Value Fund – Class I Shares | 12,406,783 | ||||||
694,560 | Janus Adviser International Equity Fund – Class I Shares | 8,904,255 | ||||||
337,456 | Janus Growth and Income Fund | 11,659,103 | ||||||
358,272 | Janus Orion Fund | 4,603,799 | ||||||
308,460 | Janus Overseas Fund | 17,008,144 | ||||||
282,224 | Janus Research Fund | 8,410,260 | ||||||
87,092 | Janus Twenty Fund | 6,648,613 | ||||||
84,029,818 | ||||||||
Fixed-Income Funds – 40.9 % | ||||||||
5,004,012 | Janus Flexible Bond Fund | 48,488,863 | ||||||
449,522 | Janus High-Yield Fund | 4,059,186 | ||||||
1,977,535 | Janus Short-Term Bond Fund | 5,715,076 | ||||||
58,263,125 | ||||||||
Total Investments (total cost $136,380,434) – 100.0% | 142,292,943 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.0)% | (27,965) | |||||||
Net Assets – 100% | $ | 142,264,978 | ||||||
(1) | The Portfolio invests in mutual funds within the Janus family of funds and they may be deemed to be under common control because they share the same Board of Trustees. |
See Notes to Schedules of Investments and Financial Statements.
Janus Smart Portfolios April 30, 2008 15
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Janus Smart Portfolio – Conservative (unaudited) | Ticker: JSPCX |
Portfolio Snapshot
This asset allocation fund combines funds backed by Janus’ fundamental research approach with those using the mathematical approach of INTECH. The portfolio seeks income and a secondary emphasis of growth of capital with approximately 60% allocated to bonds and money markets and 40% to stocks.
![(DAN SCHERMAN PHOTO)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646pschermd.jpg)
Dan Scherman
portfolio manager
Performance Overview
Janus Smart Portfolio – Conservative returned (0.92)% for the six-month period ended April 30, 2008. That compares to a return of (9.64)% for the Portfolio’s primary benchmark, the S&P 500® Index, during the same period. The Portfolio also fared better than its secondary benchmark, the Conservative Allocation Index – a hypothetical combination of unmanaged indices – which returned (1.47)%. This internally-calculated index combines the total returns from the Lehman Brothers Aggregate Bond Index (60%), the Dow Jones Wilshire 5000 Index (28%) and the Morgan Stanley Capital International (MSCI) EAFE® Index (12%). The outperformance was consistent with the Portfolio’s objective, which is to seek the highest return over time consistent with a primary emphasis on income and a secondary emphasis on growth of capital.
Market Review
Many of the same issues that conspired to create last summer’s sudden spike in market volatility remained unresolved during the period, creating a challenging environment for investors. If anything, the outlook darkened somewhat during the last six months as plunging consumer confidence, a sharp decline in the U.S. dollar, a softening of the labor market and growing fears of a global recession joined the housing and mortgage market crises as the latest worries holding back the market. The result was a continued “risk aversion” trend that saw investors flee some of the more aggressive areas of the market for the perceived relative security of bonds and so-called “hard assets” like gold and commodities, which some view as a good place to ride out the storm.
Portfolio Review
This shift in attitudes about risk had a direct impact on our bond holdings. Not coincidentally, Janus Flexible Bond Fund – a fairly conservative fund that represents more than half of the Portfolio’s net assets – rose 4.75% during the period to become the top performing position in our lineup. Its more aggressive counterpart, Janus High-Yield Fund, declined 1.65% in the period as investors rotated away from riskier corporate bonds and toward the calmer waters of the investment-grade and government bond markets. Our position in Janus Short-Term Bond Fund, which rounds out our exposure to fixed-income markets, held its own by turning in a gain of 2.39% for the six-month period.
On the other side of the ledger, all of our equity fund holdings were caught in the market’s downdraft and finished the period lower. Notably, however, all but three performed better than their respective benchmarks – a fact that gives me additional confidence in the decision to allocate a portion of the Portfolio to them.
However, some holdings failed to keep pace. One example was our position in Janus Growth and Income Fund, which lost 11.83% during the period. Portfolio manager Marc Pinto, who recently took the reins from Minyoung Sohn, has many years of investment experience and has my full confidence. I have maintained a position in the fund despite this setback.
I remain similarly committed to our positions in the risk-managed large-cap growth and large-cap value funds managed by our mathematical affiliate INTECH, even though these funds have recently underperformed their respective benchmarks. I view periodic underperformance by these strategies as a natural occurrence and remain confident that they will continue to perform well over the longer term.
Portfolio Strategy
Although I am contemplating some modest changes to the underlying fund allocations, there were no substantial changes to the Portfolio’s strategy during the period. Janus Smart Portfolio – Conservative is structured as a “fund of funds” portfolio that provides investors with broad, diversified exposure to various types of investments with a clear emphasis on income. The Portfolio is also designed to blend income with the two core competencies Janus enjoys as an organization: mathematically driven, risk-managed strategies and fundamentally driven, growth-oriented investments. I believe that combining these very different approaches in a single investment can produce a portfolio with a unique and powerful performance profile.
Our investment process involves setting return expectations for a broad range of possible Janus and INTECH mutual funds that the analyst team and I believe best represent the full opportunity set available to today’s investor. Then, acting in conjunction with an outside consultant, we establish an ideal “model” portfolio based upon the specific risk/return objective
16 Janus Smart Portfolios April 30, 2008
Table of Contents
(unaudited)
of Janus Smart Portfolio – Conservative. Finally, we select our desired exposure.
At period-end, 61.2% of the Portfolio was invested in fixed-income funds, with the remaining 38.8% of the Portfolio in equity funds. Under normal market conditions, a broadly diversified portfolio attempts to buffer the risk that an all-stock portfolio might ordinarily bear. The allocations assigned to each selected underlying fund were consistent with our view of market conditions and the long-term trade-off between risk and reward that each of these investment types represents. However, as a result of changing market conditions, both the mix of underlying funds and the allocations to these funds will change from time to time.
Thank you for investing in Janus Smart Portfolio – Conservative.
Janus Smart Portfolio – Conservative (% of Net Assets)
Janus Flexible Bond Fund | 52.3% | |||
Janus Adviser INTECH Risk-Managed Growth Fund — Class I Shares | 7.4% | |||
Janus Adviser INTECH Risk-Managed Value Fund — Class I Shares | 7.2% | |||
Janus Overseas Fund | 6.5% | |||
Janus Short-Term Bond Fund | 6.0% | |||
Janus Growth and Income Fund | 4.6% | |||
Janus Contrarian Fund | 3.8% | |||
Janus Orion Fund | 3.2% | |||
Janus Adviser International Equity Fund – Class I Shares | 3.1% | |||
Janus Research Fund | 3.0% | |||
Janus High-Yield Fund | 2.9% |
Janus Smart Portfolio — Conservative At A Glance
Asset Allocation – (% of Net Assets)
As of April 30, 2008
![(GRAPH)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif23p01.gif)
Janus Smart Portfolios April 30, 2008 17
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Janus Smart Portfolio – Conservative (unaudited)
Performance
![(PERFORMANCE CHART)](https://capedge.com/proxy/N-CSRS/0001035704-08-000298/d57646jif23m01.gif)
Expense Ratios – for the fiscal year ended | |||||||||||
Average Annual Total Return – for the periods ended April 30, 2008 | October 31, 2007 | ||||||||||
Fiscal | One | Since | Total Annual Fund | Net Annual Fund | |||||||
Year-to-Date | Year | Inception* | Operating Expenses | Operating Expenses | |||||||
Janus Smart Portfolio – Conservative | (0.92)% | 5.45% | 8.98% | 0.91% | 0.73% | ||||||
S&P 500® Index | (9.64)% | (4.68)% | 6.58% | ||||||||
Conservative Allocation Index | (1.47)% | 2.70% | 7.08% | ||||||||
Lipper Quartile | – | 1st | 1st | ||||||||
Lipper Ranking – based on total return for Mixed-Asset Target Allocation Conservative Funds | – | 9/429 | 6/339 | ||||||||
Visit janus.com to view current performance and characteristic information | |||||||||||
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
A Portfolio which redeems or exchanges certain underlying funds’ shares held for 90 days or less may be subject to an underlying fund’s 2.00% redemption fee, if any.
Janus Capital has contractually agreed to waive the Portfolio’s total operating expenses (excluding any expenses of an underlying fund, brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to a certain limit until at least March 1, 2009. For a period of three years subsequent to the Portfolios’ commencement of operations, Janus Capital may recover from each Portfolio, fees and expenses previously waived or reimbursed if that Portfolio’s expense ratio, including recovered expenses, falls below the respective expense limit. The expense waivers are detailed in the Statement of Additional Information. Returns shown include fee waivers and without such waivers returns would have been lower.
The fees and expenses shown were determined based on net assets as of the fiscal year ended October 31, 2007. The expense information shown may include “acquired fund” fees and expenses. (“Acquired Fund” means any underlying fund (including, but not limited to, exchange-traded funds) in which a Portfolio invests or has invested during the period.) Contractual waivers agreed to by Janus Capital, where applicable, are included in the prospectus under “Net Annual Fund Operating Expenses.” All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
See important disclosures on the next page.
18 Janus Smart Portfolios April 30, 2008
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(unaudited)
An underlying fund’s performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Portfolio may include those associated with investing in foreign securities, emerging markets, initial public offerings (“IPOs”), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risks, portfolio holdings and other details.
Because Janus Capital is the adviser to the Janus Smart Portfolios and to the underlying funds held within the Portfolios, it is subject to certain potential conflicts of interest when allocating the assets of the Portfolios among underlying Janus funds. Performance of Janus Smart Portfolios depends on that of the underlying funds. They are subject to the volatility of the financial markets in the U.S. and abroad and to the additional risks associated with investments.
Returns include reinvestment of dividends from net investment income and distributions from capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Portfolio’s holdings may differ significantly from the securities held in the indices. The indices are unmanaged and are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Explanations of Charts, Tables and Financial Statements.”
* | The Portfolio’s inception date – December 30, 2005 |
Portfolio Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Portfolio and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Portfolio Report for a detailed explanation of the information presented in this chart.
Beginning Account Value | Ending Account Value | Expenses Paid During Period | ||||||||||||
Expense Example | (11/1/07) | (4/30/08) | (11/1/07- 4/30/08)† | |||||||||||
Actual | $ | 1,000.00 | $ | 990.80 | $ | 0.89 | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,023.97 | $ | 0.91 | ||||||||
† | Expenses are equal to the annualized expense ratio of 0.18%, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital. The expense ratio does not include acquired fund fees and expenses. |
Janus Smart Portfolios April 30, 2008 19
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Janus Smart Portfolio – Conservative
Schedule of Investments (unaudited)
As of April 30, 2008
Shares | Value | |||||||
Mutual Funds(1) – 100.0% | ||||||||
Equity Funds – 38.8% | ||||||||
532,571 | Janus Adviser INTECH Risk-Managed Growth Fund – Class I Shares | $ | 7,232,318 | |||||
643,340 | Janus Adviser INTECH Risk-Managed Value Fund – Class I Shares | 6,954,501 | ||||||
237,533 | Janus Adviser International Equity Fund – Class I Shares | 3,045,171 | ||||||
198,815 | Janus Contrarian Fund | 3,699,947 | ||||||
130,129 | Janus Growth and Income Fund | 4,495,948 | ||||||
242,332 | Janus Orion Fund | 3,113,969 | ||||||
114,189 | Janus Overseas Fund | 6,295,250 | ||||||
96,685 | Janus Research Fund | 2,881,221 | ||||||
37,718,325 | ||||||||
Fixed-Income Funds – 61.2% | ||||||||
5,245,548 | Janus Flexible Bond Fund | 5,840,902 | ||||||
310,274 | Janus High-Yield Fund | 2,801,773 | ||||||
2,021,073 | Janus Short-Term Bond Fund | 50,829,364 | ||||||
59,472,039 | ||||||||
Total Investments (total cost $95,415,367) – 100.0% | 97,190,364 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.0)% | (21,662) | |||||||
Net Assets – 100% | $ | 97,168,702 | ||||||
(1) | The Portfolio invests in mutual funds within the Janus family of funds and they may be deemed to be under common control because they share the same Board of Trustees. |
See Notes to Schedules of Investments and Financial Statements.
20 Janus Smart Portfolios April 30, 2008
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Statements of Assets and Liabilities
Janus Smart | Janus Smart | Janus Smart | ||||||||||||
As of April 30, 2008 (unaudited) | Portfolio – | Portfolio – | Portfolio – | |||||||||||
(all numbers in thousands except net asset value per share) | Growth | Moderate | Conservative | |||||||||||
Assets: | ||||||||||||||
Investments at cost | $ | 187,850 | $ | 136,380 | $ | 95,415 | ||||||||
Investments at value | $ | 200,013 | $ | 142,293 | $ | 97,190 | ||||||||
Receivables: | ||||||||||||||
Fund shares sold | 432 | 194 | 228 | |||||||||||
Due from adviser | – | – | 3 | |||||||||||
Non-interested Trustees’ deferred compensation | 3 | 2 | 2 | |||||||||||
Other assets | 149 | 200 | 201 | |||||||||||
Total Assets | 200,597 | 142,689 | 97,624 | |||||||||||
Liabilities: | ||||||||||||||
Payables: | ||||||||||||||
Investments purchased | 332 | 283 | 210 | |||||||||||
Fund shares repurchased | 234 | 99 | 214 | |||||||||||
Advisory fees | 8 | 6 | 1 | |||||||||||
Due to Adviser (Note 2) | 9 | 1 | – | |||||||||||
Transfer agent fees and expenses | 22 | 19 | 14 | |||||||||||
Non-interested Trustees’ fees and expenses | 2 | 2 | 1 | |||||||||||
Non-interested Trustees’ deferred compensation fees | 3 | 2 | 2 | |||||||||||
Accrued expenses | 9 | 12 | 13 | |||||||||||
Total Liabilities | 619 | 424 | 455 | |||||||||||
Net Assets | $ | 199,978 | $ | 142,265 | $ | 97,169 | ||||||||
Net Assets Consist of: | ||||||||||||||
Capital (par value and paid-in surplus)* | $ | 184,258 | $ | 133,680 | $ | 93,880 | ||||||||
Undistributed net investment income/(loss)* | 500 | 748 | 741 | |||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | 3,057 | 1,924 | 773 | |||||||||||
Unrealized appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 12,163 | 5,913 | 1,775 | |||||||||||
Total Net Assets | $ | 199,978 | $ | 142,265 | $ | 97,169 | ||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 15,762 | 11,851 | 8,417 | |||||||||||
Net Asset Value Per Share | $ | 12.69 | $ | 12.00 | $ | 11.54 |
* | See Note 4 in Notes to Financial Statements. |
See Notes to Financial Statements.
Janus Smart Portfolios April 30, 2008 21
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Statements of Operations
Janus Smart | Janus Smart | Janus Smart | ||||||||||||
For the six-month period ended April 30, 2008 (unaudited) | Portfolio – | Portfolio – | Portfolio – | |||||||||||
(all numbers in thousands) | Growth | Moderate | Conservative | |||||||||||
Investment Income: | ||||||||||||||
Dividends from affiliates | $ | 2,839 | $ | 2,294 | $ | 1,553 | ||||||||
Total Investment Income | 2,839 | 2,294 | 1,553 | |||||||||||
Expenses: | ||||||||||||||
Advisory fees | 44 | 31 | 20 | |||||||||||
Transfer agent fees and expenses | 113 | 69 | 38 | |||||||||||
Postage and mailing expenses | 4 | 5 | 5 | |||||||||||
Professional fees | 9 | 9 | 9 | |||||||||||
Non-interested Trustees’ fees and expenses | 1 | – | – | |||||||||||
Printing expenses | 14 | 9 | 5 | |||||||||||
Other expenses | 3 | 4 | 4 | |||||||||||
Total Expenses | 188 | 127 | 81 | |||||||||||
Expense and Fee Offset | (6) | (4) | (3) | |||||||||||
Net Expenses | 182 | 123 | 78 | |||||||||||
Less: Excess Expense Reimbursement | – | – | (9) | |||||||||||
Plus: Previously waived investment advisory fees recouped by the Adviser (Note 2) | 29 | 3 | – | |||||||||||
Net Expenses after Expense Reimbursement or Investment Advisory Fees Recouped | 211 | 126 | 69 | |||||||||||
Net Investment Income/(Loss) | 2,628 | 2,168 | 1,484 | |||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | ||||||||||||||
Net realized gain/(loss) from investment transactions | 3,248 | 2,023 | 824 | |||||||||||
Change in unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | (13,284) | (7,344) | (2,472) | |||||||||||
Payment from affiliate (Note 2) | 8 | 8 | 1 | |||||||||||
Net Gain/(Loss) on Investments | (10,028) | (5,313) | (1,647) | |||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (7,400) | $ | (3,145) | $ | (163) |
See Notes to Financial Statements.
22 Janus Smart Portfolios April 30, 2008
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Statements of Changes in Net Assets
Janus Smart | Janus Smart | Janus Smart | ||||||||||||||||||||||||
For the six-month period ended April 30, 2008 (unaudited) | Portfolio – | Portfolio – | Portfolio – | |||||||||||||||||||||||
and for the fiscal year ended October 31, 2007 | Growth | Moderate | Conservative | |||||||||||||||||||||||
(all numbers in thousands) | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||
Net investment income/(loss) | $ | 2,628 | $ | 1,653 | $ | 2,168 | $ | 1,964 | $ | 1,484 | $ | 1,264 | ||||||||||||||
Net realized gain/(loss) from investment transactions | 3,248 | 5,104 | 2,023 | 2,742 | 824 | 879 | ||||||||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | (13,284) | 22,020 | (7,344) | 11,179 | (2,472) | 3,570 | ||||||||||||||||||||
Payment from affiliate (Note 2) | 8 | – | 8 | – | 1 | 1 | ||||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (7,400) | 28,777 | (3,145) | 15,885 | (163) | 5,714 | ||||||||||||||||||||
Dividends and Distributions to Shareholders: | ||||||||||||||||||||||||||
Net investment income* | (3,164) | (896) | (2,927) | (872) | (1,824) | (416) | ||||||||||||||||||||
Net realized gain/(loss) from investment transactions* | (5,239) | (293) | (2,811) | (82) | (926) | (46) | ||||||||||||||||||||
Net Decrease from Dividends and Distributions | (8,403) | (1,189) | (5,738) | (954) | (2,750) | (462) | ||||||||||||||||||||
Capital Share Transactions: | ||||||||||||||||||||||||||
Shares sold | 58,446 | 117,647 | 44,727 | 76,960 | 49,212 | 62,011 | ||||||||||||||||||||
Reinvested dividends and distributions | 8,341 | 1,183 | 5,704 | 940 | 2,739 | 459 | ||||||||||||||||||||
Shares repurchased | (27,467) | (36,751) | (22,290) | (21,090) | (20,573) | (18,507) | ||||||||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | 39,320 | 82,079 | 28,141 | 56,810 | 31,378 | 43,963 | ||||||||||||||||||||
Net Increase/(Decrease) in Net Assets | 23,517 | 109,667 | 19,258 | 71,741 | 28,465 | 49,215 | ||||||||||||||||||||
Net Assets: | ||||||||||||||||||||||||||
Beginning of period | 176,461 | 66,794 | 123,007 | 51,266 | 68,704 | 19,489 | ||||||||||||||||||||
End of period | $ | 199,978 | $ | 176,461 | $ | 142,265 | $ | 123,007 | $ | 97,169 | $ | 68,704 | ||||||||||||||
Undistributed net investment income/(loss)* | $ | 500 | $ | 1,036 | $ | 748 | $ | 1,507 | $ | 741 | $ | 1,081 |
* | See Note 4 in Notes to Financial Statements. |
See Notes to Financial Statements.
Janus Smart Portfolios April 30, 2008 23
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Financial Highlights
For a share outstanding during the six-month period ended April 30, 2008 (unaudited) | Janus Smart Portfolio – Growth | |||||||||||||||||||||
and through each fiscal year or period ended October 31 | 2008 | 2007 | 2006(1) | |||||||||||||||||||
Net Asset Value, Beginning of Period | $13.95 | $11.34 | $10.00 | |||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | .19 | .16 | .05 | |||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | (.81) | 2.62 | 1.29 | |||||||||||||||||||
Total from Investment Operations | (.62) | 2.78 | 1.34 | |||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||
Dividends (from net investment income)* | (.24) | (.13) | – | |||||||||||||||||||
Distributions (from capital gains)* | (.40) | (.04) | – | |||||||||||||||||||
Payment from affiliate | –(2) | –(2) | – | |||||||||||||||||||
Total Distributions and Other | (.64) | (.17) | – | |||||||||||||||||||
Net Asset Value, End of Period | �� | $12.69 | $13.95 | $11.34 | ||||||||||||||||||
Total Return** | (4.53)%(3) | 24.81%(4) | 13.40% | |||||||||||||||||||
Net Assets, End of Period (in thousands) | $199,978 | $176,461 | $66,794 | |||||||||||||||||||
Average Net Assets for the Period (in thousands) | $177,690 | $124,708 | $34,131 | |||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5) | 0.25%(6)(7) | 0.25%(7) | 0.25%(7) | |||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5) | 0.24% | 0.24% | 0.24% | |||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.97% | 1.32% | 0.98% | |||||||||||||||||||
Portfolio Turnover Rate*** | 5% | 19% | 28% |
For a share outstanding during the six-month period ended April 30, 2008 (unaudited) | Janus Smart Portfolio – Moderate | |||||||||||||||||||||
and through each fiscal year or period ended October 31 | 2008 | 2007 | 2006(1) | |||||||||||||||||||
Net Asset Value, Beginning of Period | $12.95 | $11.04 | $10.00 | |||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | .20 | .23 | .09 | |||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | (.58) | 1.86 | .95 | |||||||||||||||||||
Total from Investment Operations | (.38) | 2.09 | 1.04 | |||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||
Dividends (from net investment income)* | (.29) | (.16) | – | |||||||||||||||||||
Distributions (from capital gains)* | (.28) | (.02) | – | |||||||||||||||||||
Payment from affiliate | –(2) | – | –(2) | |||||||||||||||||||
Total Distributions and Other | (.57) | (.18) | – | |||||||||||||||||||
Net Asset Value, End of Period | $12.00 | $12.95 | $11.04 | |||||||||||||||||||
Total Return** | (2.90)%(3) | 19.16% | 10.40%(4) | |||||||||||||||||||
Net Assets, End of Period (in thousands) | $142,265 | $123,007 | $51,266 | |||||||||||||||||||
Average Net Assets for the Period (in thousands) | $126,642 | $87,462 | $25,078 | |||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5) | 0.21%(8)(9) | 0.21%(9) | 0.21%(9) | |||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5) | 0.20% | 0.20% | 0.20% | |||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.44% | 2.24% | 1.97% | |||||||||||||||||||
Portfolio Turnover Rate*** | 6% | 15% | 16% |
* | See Note 4 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Period from December 30, 2005 (inception date) through October 31, 2006. | |
(2) | Payment from affiliate aggregated less than $.01 on a per share basis for the period ended. | |
(3) | During the fiscal period ended, Janus Capital and/or Janus Services LLC (“Janus Services”) fully reimbursed the Portfolio for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by 0.01%. | |
(4) | During the fiscal period ended, Janus Capital and/or Janus Services fully reimbursed the Portfolio for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%. | |
(5) | See “Explanations of Charts, Tables and Financial Statements.” | |
(6) | Absent the recoupment of fees previously waived and reimbursed by the Adviser, the ratio of expenses to average net assets would have been 0.21% in 2008. | |
(7) | The ratio was 0.28% in 2007 and 0.39% in 2006 before waiver of certain fees incurred by the Portfolio. | |
(8) | Absent the recoupment of fees previously waived and reimbursed by the Adviser, the ratio of expenses to average net assets would have been 0.20% in 2008. | |
(9) | The ratio was 0.27% in 2007 and 0.42% in 2006 before waiver of certain fees incurred by the Portfolio. |
See Notes to Financial Statements.
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For a share outstanding during the six-month period ended April 30, 2008 (unaudited) | Janus Smart Portfolio – Conservative | |||||||||||||||||||||
and through each fiscal year or period ended October 31 | 2008 | 2007 | 2006(1) | |||||||||||||||||||
Net Asset Value, Beginning of Period | $12.09 | $10.82 | $10.00 | |||||||||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||
Net investment income/(loss) | .19 | .26 | .13 | |||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | (.30) | 1.23 | .69 | |||||||||||||||||||
Total from Investment Operations | (.11) | 1.49 | .82 | |||||||||||||||||||
Less Distributions and Other: | ||||||||||||||||||||||
Dividends (from net investment income)* | (.29) | (.20) | – | |||||||||||||||||||
Distributions (from capital gains)* | (.15) | (.02) | – | |||||||||||||||||||
Payment from affiliate | –(2) | –(2) | – | |||||||||||||||||||
Total Distributions and Other | (.44) | (.22) | – | |||||||||||||||||||
Net Asset Value, End of Period | $11.54 | $12.09 | $10.82 | |||||||||||||||||||
Total Return** | (0.92)%(3) | 13.98%(3) | 8.20% | |||||||||||||||||||
Net Assets, End of Period (in thousands) | $97,169 | $68,704 | $19,489 | |||||||||||||||||||
Average Net Assets for the Period (in thousands) | $82,166 | $41,512 | $9,992 | |||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4) | 0.18%(5) | 0.18%(5) | 0.18%(5) | |||||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 0.17% | 0.17% | 0.17% | |||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.63% | 3.04% | 2.78% | |||||||||||||||||||
Portfolio Turnover Rate*** | 8% | 16% | 20% |
* | See Note 4 in Notes to Financial Statements. | |
** | Total return not annualized for periods of less than one full year. | |
*** | Annualized for periods of less than one full year. |
(1) | Period from December 30, 2005 (inception date) through October 31, 2006. | |
(2) | Payment from affiliate aggregated less than $.01 on a per share basis for the period ended. | |
(3) | During the period ended, Janus Capital and/or Janus Services fully reimbursed the Portfolio for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%. | |
(4) | See “Explanations of Charts, Tables and Financial Statements.” | |
(5) | The ratio was 0.20% in 2008, 0.36% in 2007 and 0.69% in 2006 before waiver of certain fees incurred by the Portfolio. | |
See Notes to Financial Statements.
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Notes to Schedules of Investments (unaudited)
Conservative Allocation Index | An internally calculated, hypothetical combination of unmanaged indices that combines the total returns from the Lehman Brothers Aggregate Bond Index (60%), the Dow Jones Wilshire 5000 Index (28%) and the MSCI EAFE® Index (12%). | |
Dow Jones Wilshire 5000 Index | An index that measures the performance of all U.S. headquartered equity securities with readily available price data. Over 5,000 capitalization-weighted security returns are used and the Dow Jones Wilshire 5000 Index is considered one of the premier measures of the entire U.S. stock market. | |
Growth Allocation Index | An internally calculated, hypothetical combination of unmanaged indices that combines the total returns from the Dow Jones Wilshire 5000 Index (50%), the MSCI EAFE® Index (25%), the Lehman Brothers Aggregate Bond Index (20%) and the MSCI Emerging Markets IndexSM (5%). | |
Lehman Brothers Aggregate Bond Index | Is made up of the Lehman Brothers Government/Corporate Bond Index, Mortgage-Backed Securities Index, and Asset-Backed Securities Index, including securities that are of investment grade quality or better, have at least one year to maturity, and have an outstanding par value of at least $100 million. | |
Lipper Mixed-Asset Target Allocation Conservative Funds | The Lipper Mixed-Asset Target Allocation Conservative Funds Average represents the average annual returns for all Mixed-Asset Target Allocation Conservative Funds for the respective time periods. | |
Lipper Mixed-Asset Target Allocation Growth Funds | The Lipper Mixed-Asset Target Allocation Growth Funds Average represents the average annual returns for all Mixed-Asset Target Allocation Growth Funds for the respective time periods. | |
Lipper Mixed-Asset Target Allocation Moderate Funds | Funds that, by portfolio practice, maintain a mix of between 40%-60% equity securities, with the remainder invested in bonds, cash, and cash equivalents. | |
Moderate Allocation Index | An internally calculated, hypothetical combination of unmanaged indices that combines the total returns from the Dow Jones Wilshire 5000 Index (40%), the Lehman Brothers Aggregate Bond Index (40%), the MSCI EAFE® Index (18%) and the MSCI Emerging Markets IndexSM (2%). | |
Morgan Stanley Capital International EAFE® Index | Is a free float-adjusted market capitalization weighted index designed to measure developed market equity performance. The MSCI EAFE® Index is composed of companies representative of the market structure of developed market countries. The index includes reinvestment of dividends, net of foreign withholding taxes. | |
Morgan Stanley Capital International Emerging Markets IndexSM | Is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. | |
S&P 500® Index | The Standard & Poor’s (“S&P”) 500® Index is a commonly recognized, market-capitalization weighted index of 500 widely held equity securities, designed to measure broad U.S. Equity performance. |
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Notes to Financial Statements (unaudited)
The following section describes the organization and significant accounting policies and provides more detailed information about the schedules and tables that appear throughout this report. In addition, the Notes to Financial Statements explain the methods used in preparing and presenting this report.
1. | Organization and Significant Accounting Policies |
Janus Smart Portfolio – Growth, Janus Smart Portfolio – Moderate and Janus Smart Portfolio – Conservative, (collectively the “Portfolios” and individually a “Portfolio”) are series Portfolios. The Portfolios each operate as a “fund of funds,” meaning substantially all of the Portfolios’ assets will be invested in other Janus mutual funds (the “underlying funds”). Each Portfolio invests in a variety of underlying funds to pursue a target allocation of stocks and bonds, and may also invest in money market instruments or cash/cash equivalents. The Portfolios are part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust has twenty-nine funds. Each Portfolio in this report is classified as diversified as defined in the 1940 Act. The Portfolios are no-load investments.
Underlying Funds
Each Portfolio invests in a variety of underlying funds to pursue a target allocation of stocks and bonds, and may also invest in money market instruments or cash/cash equivalents. Each Portfolio has a target allocation, which is how each Portfolio’s investments generally will be allocated among the major asset classes over the long term, as well as normal ranges within which each Portfolio’s asset class allocations generally will vary over short-term periods. The normal asset allocation ranges are as follows: (1) 75%-85% stocks and 15%-25% bonds and money market instruments for Janus Smart Portfolio – Growth; (2) 55%-65% stocks and 35%-45% bonds and money market instruments for Janus Smart Portfolio – Moderate; and (3) 35%-45% stocks and 55%-65% bonds and money market instruments for Janus Smart Portfolio – Conservative. A brief description of each of the underlying funds that the Portfolios may invest in are as follows.
Investments in Equity Securities
INTECH RISK-MANAGED STOCK FUND seeks long-term growth of capital. The fund invests, under normal circumstances, at least 80% of its net assets in common stocks from the universe of the fund’s benchmark, which is the S&P 500® Index. Stocks are selected for their potential contribution to the long-term growth of capital, utilizing INTECH’s mathematical investment process.
JANUS ADVISER BALANCED FUND – CLASS I and JANUS BALANCED FUND seek long-term capital growth, consistent with preservation of capital and balanced by current income. Each fund pursues its investment objective by normally investing 50-60% of its assets in equity securities selected primarily for their growth potential and 40-50% of its assets in securities selected primarily for their income potential. Each fund normally invests at least 25% of its assets in fixed-income senior securities.
JANUS ADVISER CONTRARIAN FUND – CLASS I and JANUS CONTRARIAN FUND seek long-term growth of capital. Each fund pursues its investment objective by investing, under normal circumstances, at least 80% of its net assets in equity securities with the potential for long-term growth of capital. The portfolio manager emphasizes investments in companies with an attractive price/free cash flow, which is the relationship between the price of a stock and the company’s available cash from operations minus capital expenditures. The portfolio manager will typically seek attractively valued companies that are improving their free cash flow and returns on invested capital. Such companies may also include special situations companies that are experiencing management changes and/or are currently out of favor.
JANUS ADVISER FORTY FUND – CLASS I seeks long-term growth of capital. The fund pursues its investment objective by normally investing primarily in a core group of 20-40 common stocks selected for their growth potential. The fund may invest in companies of any size, from larger, well-established companies to smaller, emerging growth companies.
JANUS ADVISER FUNDAMENTAL EQUITY FUND – CLASS I and JANUS FUNDAMENTAL EQUITY FUND seek long-term growth of capital. Each fund pursues its investment objective by investing, under normal circumstances, at least 80% of its net assets in equity securities selected for their growth potential. Eligible equity securities in which each fund may invest include: (i) domestic and foreign common stocks; (ii) preferred stocks; (iii) securities convertible into common stocks or preferred stocks such as convertible preferred stocks, bonds, and debentures; and (iv) other securities with equity characteristics (including the use of swaps). Each fund may invest in companies of any size.
JANUS ADVISER GLOBAL REAL ESTATE FUND – CLASS I seeks total return through a combination of capital appreciation and current income. The fund invests, under normal circumstances, at least 80% of its net assets plus the amount of any borrowings for investment purposes, in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, preferred stocks and other equity securities, including, but not limited to, real estate investment trusts (REITs) and similar REIT-like entities. As a
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Notes to Financial Statements (unaudited) (continued)
fundamental policy, the fund will concentrate 25% or more of its net assets in securities of issuers in real estate or real estate-related industries. The fund’s investment in companies engaged in businesses outside the real estate industry which possess significant real estate holdings will be deemed to be in the real estate industry for purposes of the fund’s investment objective and its policy on industry concentration. The fund expects under normal market conditions to maintain investments in issuers from several different developed countries, including the United States. Under unusual circumstances, the fund may invest all of its assets in a single country. The fund may invest in emerging markets, but will normally limit such investments to 15% of its net assets, measured at the time of purchase. Within the parameters of its specific investment policies, the fund may invest in foreign equity and debt securities.
JANUS ADVISER GLOBAL RESEARCH FUND – CLASS I and JANUS GLOBAL RESEARCH FUND seek long-term growth of capital. Each fund pursues its investment objective by investing primarily in common stocks selected for their growth potential. Each fund may invest in companies of any size and located anywhere in the world, from larger, well-established companies to smaller, emerging growth companies. Each fund normally invests at least 40% of its net assets in securities of issuers from different countries located throughout the world, excluding the United States. Each fund may have significant exposure to emerging markets.
JANUS ADVISER GROWTH AND INCOME FUND – CLASS I and JANUS GROWTH AND INCOME FUND seek long-term capital growth and current income. Each fund pursues its investment objective by normally emphasizing investments in common stocks. Each fund will normally invest up to 75% of its assets in equity securities selected primarily for their growth potential and at least 25% of its assets in securities the portfolio manager believes have income potential. Eligible equity securities in which each fund may invest include: (i) domestic and foreign common stocks; (ii) preferred stocks; (iii) securities convertible into common stocks or preferred stocks, such as convertible preferred stocks, bonds, and debentures; and (iv) other securities with equity characteristics (including the use of swaps). Equity securities may make up part or all of the income component if they currently pay dividends or the portfolio manager believes they have potential for increasing or commencing dividend payments.
JANUS ADVISER INTECH RISK-MANAGED CORE FUND – CLASS I seeks long-term growth of capital. The fund invests primarily in common stocks from the universe of the fund’s benchmark index, which is the S&P 500® Index. Stocks are selected for their potential contribution to the long-term growth of capital, utilizing INTECH’s mathematical investment process.
JANUS ADVISER INTECH RISK-MANAGED GROWTH FUND – CLASS I seeks long-term growth of capital. The fund invests primarily in common stocks from the universe of the fund’s benchmark index, which is the Russell 1000® Growth Index. Stocks are selected for their potential contribution to the long-term growth of capital, utilizing INTECH’s mathematical investment process.
JANUS ADVISER INTECH RISK-MANAGED INTERNATIONAL FUND – CLASS I seeks long-term growth of capital. The fund invests primarily in common stocks from the universe of the fund’s benchmark index, which is the Morgan Stanley Capital International (“MSCI”) EAFE® (Europe, Australasia, Far East) Index. Stocks are selected for their potential contribution to the long-term growth of capital, utilizing INTECH’s mathematical investment process.
JANUS ADVISER INTECH RISK-MANAGED VALUE FUND – CLASS I seeks long-term growth of capital. The fund invests primarily in common stocks from the universe of the fund’s benchmark index, which is the Russell 1000® Value Index. Stocks are selected for their potential contribution to the long-term growth of capital, utilizing INTECH’s mathematical investment process.
JANUS ADVISER INTERNATIONAL EQUITY FUND – CLASS I seeks long-term growth of capital. The fund invests, under normal circumstances, at least 80% of its net assets in equity securities. The fund normally invests in a core group of 50-70 equity securities of issuers from different countries located throughout the world, excluding the United States. The fund may, under unusual circumstances, invest all of its assets in a single country. The fund may invest in emerging markets, but will normally limit such investments to 15% of its net assets, measured at the time of purchase. Within the parameters of its specific investment policies, the fund may invest in foreign equity and debt securities.
JANUS ADVISER INTERNATIONAL GROWTH FUND – CLASS I and JANUS OVERSEAS FUND seek long-term growth of capital. Each fund invests, under normal circumstances, at least 80% of its net assets in securities of issuers from countries outside of the United States. Each fund normally invests in securities of issuers from several different countries, excluding the United States. Although each fund intends to invest substantially all of its assets in issuers located outside the United States, it may at times invest in U.S. issuers, and it may, under unusual circumstances, invest all of its assets in a single country. Each fund may have significant exposure to emerging markets.
JANUS ADVISER LARGE CAP GROWTH FUND – CLASS I seeks long-term growth of capital in a manner consistent with the preservation of capital. The fund pursues its investment objective by investing, under normal circumstances, at least 80% of its net assets in common stocks of large-sized companies. Large-sized companies are those whose market
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capitalization falls within the range of companies in the Russell 1000® Index at the time of purchase. The market capitalizations within the index will vary, but as of December 31, 2007, they ranged from approximately $479 million to $527.8 billion.
JANUS ADVISER LONG/SHORT FUND – CLASS I seeks strong absolute risk-adjusted returns over a full market cycle. Under normal circumstances, the fund generally pursues its investment objective by taking both long and short positions in domestic and foreign equity securities, including those in emerging markets. The fund’s investment team believes that a combination of long and short positions may provide positive returns regardless of market conditions through a complete market cycle, and may offer reduced risk. In choosing both long and short positions, the investment team utilizes fundamental research. In other words, the fund’s investment team looks at companies one at a time to determine if a company is an attractive investment opportunity and if it is consistent with the fund’s investment policies.
JANUS ADVISER MID CAP GROWTH FUND – CLASS I seeks long-term growth of capital. The fund pursues its investment objective by investing, under normal circumstances, at least 80% of its net assets in equity securities of mid-sized companies whose market capitalization falls, at the time of purchase, in the 12-month average of the capitalization range of the Russell Midcap® Growth Index. Market capitalization is a commonly used measure of the size and value of a company. The market capitalizations within the index will vary, but as of December 31, 2007, they ranged from approximately $624 million to $42.1 billion.
JANUS ADVISER MID CAP VALUE FUND – CLASS I and JANUS MID CAP VALUE FUND – INVESTOR SHARES seek capital appreciation. Each fund pursues its investment objective by investing primarily in common stocks selected for their capital appreciation potential. Each fund primarily invests in the common stocks of mid-sized companies whose stock prices the portfolio managers believe to be undervalued. Each fund invests, under normal circumstances, at least 80% of its assets in equity securities of companies whose market capitalization falls, at the time of purchase, within the 12-month average of the capitalization range of the Russell Midcap® Value Index. This average is updated monthly. The market capitalizations within the index will vary, but as of December 31, 2007, they ranged from approximately $479 million to $42.1 billion.
JANUS ADVISER ORION FUND – CLASS I and JANUS ORION FUND seek long-term growth of capital. Each fund pursues its investment objective by normally investing primarily in a core group of 20-30 domestic and foreign common stocks selected for their growth potential. Each fund may invest in companies of any size, from larger, well-established companies to smaller, emerging growth companies. As of December 31, 2007, Janus Adviser Orion Fund held stocks of 45 companies. Of these holdings, 30 comprised approximately 76.8% of the fund’s holdings. As of December 31, 2007, Janus Orion Fund held stocks of 46 companies. Of these holdings, 30 comprised approximately 84.8% of the fund’s holdings.
JANUS ADVISER SMALL COMPANY VALUE FUND – CLASS I seeks capital appreciation. The fund pursues its investment objective by investing primarily in common stocks selected for their capital appreciation potential. The fund primarily invests in the common stocks of small companies whose stock prices are believed to be undervalued by the fund’s portfolio manager. The fund invests, under normal circumstances, at least 80% of its assets in equity securities of small companies whose market capitalization, at the time of initial purchase, is less than the 12-month average of the maximum market capitalization for companies included in the Russell 2000® Value Index. This average is updated monthly. The market capitalizations within the index will vary, but as of December 31, 2007, they ranged from approximately $27 million to $6.1 billion.
JANUS ADVISER SMALL-MID GROWTH FUND – CLASS I seeks long-term growth of capital. The fund pursues its investment objective by investing primarily in common stocks selected for their growth potential. The fund invests, under normal circumstances, at least 80% of its net assets in equity securities of small- and medium-sized companies. Generally, small- and medium-sized companies have a market capitalization of less than $10 billion. Market capitalization is a commonly used measure of the size and value of a company.
JANUS ADVISER WORLDWIDE FUND – CLASS I and JANUS WORLDWIDE FUND seek long-term growth of capital in a manner consistent with the preservation of capital. Each fund pursues its investment objective by investing primarily in common stocks of companies of any size located throughout the world. Each fund normally invests in issuers from several different countries, including the United States. Each fund may, under unusual circumstances, invest in a single country. Each fund may have significant exposure to emerging markets.
JANUS ENTERPRISE FUND seeks long-term growth of capital. The fund pursues its investment objective by investing primarily in common stocks selected for their growth potential, and normally invests at least 50% of its equity assets in medium-sized companies. Medium-sized companies are those whose market capitalization falls within the range of companies in the Russell Midcap® Growth Index. The market capitalizations within the index will vary, but as of December 31, 2007, they ranged from approximately $624 million to $42.1 billion.
JANUS FUND seeks long-term growth of capital in a manner consistent with the preservation of capital. The fund pursues
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Notes to Financial Statements (unaudited) (continued)
its investment objective by investing primarily in common stocks selected for their growth potential. Although the fund may invest in companies of any size, it generally invests in larger, more established companies. As of December 31, 2007, the fund’s weighted average market capitalization was $91.1 billion.
JANUS GLOBAL LIFE SCIENCES FUND seeks long-term growth of capital. The fund invests, under normal circumstances, at least 80% of its net assets in securities of companies that the portfolio manager believes have a life science orientation. Generally speaking, the “life sciences” relate to maintaining or improving quality of life. The fund implements this policy by investing primarily in equity securities of U.S. and foreign companies selected for their growth potential. The fund normally invests in issuers from several different countries, which may include the United States. The fund may, under unusual circumstances, invest in a single country. As a fundamental policy, the fund normally invests at least 25% of its total assets in the “life sciences” sector, which may include companies in the following industries: health care; pharmaceuticals; agriculture; cosmetics/personal care; and biotechnology. The fund may have significant exposure to emerging markets.
JANUS GLOBAL OPPORTUNITIES FUND seeks long-term growth of capital. The fund pursues its investment objective by investing primarily in common stocks of companies of any size located throughout the world with the potential for long-term growth of capital. The fund normally invests in issuers from several different countries, which may include the United States. The fund may, under unusual circumstances, invest in a single country. The fund may have significant exposure to emerging markets.
JANUS GLOBAL TECHNOLOGY FUND seeks long-term growth of capital. The fund invests, under normal circumstances, at least 80% of its net assets in securities of companies that the portfolio manager believes will benefit significantly from advances or improvements in technology. These companies generally fall into two categories: (i) companies that the portfolio manager believes have or will develop products, processes, or services that will provide significant technological advancements or improvements and (ii) companies that the portfolio manager believes rely extensively on technology in connection with their operations or services. The fund implements this policy by investing primarily in equity securities of U.S. and foreign companies selected for their growth potential. The fund normally invests in issuers from several different countries, which may include the United States. The fund may, under unusual circumstances, invest in a single country. The fund may have significant exposure to emerging markets.
JANUS RESEARCH FUND seeks long-term growth of capital. The fund pursues its investment objective by investing primarily in common stocks selected for their growth potential. The fund may invest in companies of any size, from larger, well-established companies to smaller, emerging growth companies.
JANUS TRITON FUND seeks long-term growth of capital. The fund pursues its investment objective by investing primarily in common stocks selected for their growth potential. In pursuing that objective, the fund invests in equity securities of small- and medium-sized companies. Generally, small- and medium-sized companies have a market capitalization of less than $10 billion.
JANUS TWENTY FUND seeks long-term growth of capital. The fund pursues its investment objective by normally investing primarily in a core group of 20-30 common stocks selected for their growth potential.
JANUS VENTURE FUND seeks capital appreciation. The fund pursues its investment objective by investing at least 50% of its equity assets in small-sized companies. Small-sized companies are those who have market capitalizations of less than $1 billion or annual gross revenues of less than $500 million. Companies whose capitalization or revenues fall outside these ranges after the fund’s initial purchase continue to be considered small-sized. The fund may also invest in larger companies with strong growth potential or relatively well-known and large companies with potential for capital appreciation.
Investments in Fixed-Income Securities
JANUS ADVISER FLEXIBLE BOND FUND – CLASS I and JANUS FLEXIBLE BOND FUND seek to obtain maximum total return, consistent with preservation of capital. Each fund pursues its investment objective by primarily investing, under normal circumstances, at least 80% of its assets in bonds. Bonds include, but are not limited to, government bonds, corporate bonds, convertible bonds, mortgage-backed securities, and zero-coupon bonds. Each fund will invest at least 65% of its assets in investment grade debt securities and will maintain an average-weighted effective maturity of five to ten years. Each fund will limit its investment in high-yield/high-risk bonds to 35% or less of its net assets. Each fund generates total return from a combination of current income and capital appreciation, but income is usually the dominant portion.
JANUS ADVISER FLOATING RATE HIGH INCOME FUND – CLASS I seeks to obtain high current income. The fund pursues its investment objective by investing, under normal circumstances, at least 80% of its net assets plus the amount of any borrowings for investment purposes, in floating or adjustable rate loans and other floating or adjustable rate securities, including other senior loan investment companies and derivatives with exposure to senior loans. While the fund generally seeks to invest in senior floating
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rate loans, the fund may invest in other types of securities including, but not limited to, unsecured floating rate loans, subordinated or junior debt, corporate bonds, U.S. Government securities, mortgage-backed and other asset-backed securities, repurchase agreements, certain money market instruments, high-yield/high-risk bonds, and other instruments (including synthetic or hybrid) that pay interest at rates that adjust whenever a specified interest rate changes and/or reset on predetermined dates. The fund’s investments in floating rate securities are generally rated below investment grade or are unrated and have characteristics considered below investment grade.
JANUS ADVISER HIGH-YIELD FUND – CLASS I and JANUS HIGH-YIELD FUND seek to obtain high current income. Capital appreciation is a secondary objective when consistent with its primary objective. Each fund pursues its investment objectives by investing, under normal circumstances, at least 80% of its net assets in high-yield/high-risk securities rated below investment grade. Securities rated below investment grade may include their unrated equivalents or other high-yielding securities the portfolio manager believes offer attractive risk/return characteristics. Each fund may at times invest all of its assets in such securities.
JANUS SHORT-TERM BOND FUND seeks as high a level of current income as is consistent with preservation of capital. The fund invests, under normal circumstances, at least 80% of its net assets in short- and intermediate-term securities such as corporate bonds or notes or government securities, including agency securities. The fund may invest up to 35% of its net assets in high-yield/high risk bonds. The fund expects to maintain an average-weighted effective maturity of three years or less under normal circumstances.
Investments in Cash Equivalents
JANUS MONEY MARKET FUND – INVESTOR SHARES seeks maximum current income to the extent consistent with stability of capital. The fund pursues its investment objective by investing primarily in high quality debt obligations and obligations of financial institutions. Debt obligations may include commercial paper, notes and bonds, and variable amount master demand notes. Obligations of financial institutions include certificates of deposit and time deposits. The fund also intends to invest in repurchase agreements.
CASH EQUIVALENTS include money market instruments (such as certificates of deposit, time deposits, and repurchase agreements), shares of affiliated money market funds or high-quality debt obligations (such as U.S. Government obligations, commercial paper, and other short-term corporate instruments).
The following accounting policies have been consistently followed by the Portfolios and are in conformity with accounting principles generally accepted in the United States of America in the investment company industry.
Investment Valuation
A Portfolio’s net asset value (“NAV”) is calculated based upon the NAV of each of the underlying funds in which the Portfolio invests on the day of valuation. In the case of underlying funds with share classes, the NAV for each class is computed by dividing the total value of securities and other assets allocated to the class, less liabilities allocated to that class, by the total number of shares outstanding for the class.
Securities held by the underlying funds are valued at the last sales price or the official closing price for securities traded on a principal securities exchange (U.S. or foreign) and on the NASDAQ National Market. Securities held by the underlying funds traded on over-the-counter markets and listed securities for which no sales are reported are valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the underlying funds’ Trustees. Short-term securities held by the underlying funds with maturities of 60 days or less may be valued at amortized cost, which approximates market value. Investments held by the underlying money market fund are valued utilizing the amortized cost method of valuation permitted in accordance with Rule 2a-7 under the 1940 Act and certain conditions therein. Under the amortized cost method, which does not take into account unrealized capital gains or losses, an instrument is initially valued at its cost and thereafter assumes a constant accretion/amortization to maturity of any discount or premium. Debt securities held by the underlying funds with a remaining maturity of greater than 60 days are valued in accordance with the evaluated bid price supplied by the pricing service. The evaluated bid price supplied by the pricing service is an evaluation that reflects such factors as security prices, yields, maturities and ratings. Foreign securities and currencies held by the underlying funds are converted to U.S. dollars using the applicable exchange rate in effect as of the daily close of the New York Stock Exchange (“NYSE”). When market quotations are not readily available or deemed unreliable, or events or circumstances that may affect the value of portfolio securities held by the underlying funds are identified between the closing of their principal markets and the time the net asset value (“NAV”) is determined, securities may be valued at fair value as determined in good faith under procedures established by and under the supervision of the underlying funds’ Trustees. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) when significant events occur which may affect the securities of a single issuer, such as mergers, bankruptcies, or significant issuer specific developments; (ii) when significant events occur which may affect an entire market, such as natural disasters or significant governmental actions; and (iii) when non-significant events
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occur such as markets closing early or not opening, security trading halts, or pricing of non-valued securities and restricted or nonpublic securities. The underlying funds may use a systematic fair valuation model provided by an independent third party to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the NYSE.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income and capital gain distributions, if any, from the underlying funds are recorded on the ex-dividend date. Certain dividends from foreign securities held by the underlying funds will be recorded as soon as the Trust is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income of the underlying funds is recorded on the accrual basis and includes amortization of premiums and accretion of discounts.
Expenses
Each Portfolio bears expenses incurred specifically on its behalf as well as a portion of general expenses, which may be allocated pro rata to each of the funds or Portfolios in the Trust. Additionally, each Portfolio, as a shareholder in the underlying funds, will also indirectly bear its pro rata share of the expenses incurred by the underlying funds.
Securities Lending
Under procedures adopted by the Trustees, the underlying funds may lend securities to qualified parties (typically brokers or other financial institutions) who need to borrow securities in order to complete certain transactions such as covering short sales, avoiding failures to deliver securities or completing arbitrage activities. The underlying funds may seek to earn additional income through securities lending. There is the risk of delay in recovering a loaned security or the risk of loss in collateral rights if the borrower fails financially. Janus Capital Management LLC (“Janus Capital”) makes efforts to balance the benefits and risks from granting such loans.
The underlying funds do not have the right to vote on securities while they are being lent; however, the underlying funds may attempt to call back the loan and vote the proxy if time permits. All loans will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral permitted by the Securities and Exchange Commission (“SEC”). Cash collateral may be invested in affiliated money market funds or other accounts advised by Janus Capital to the extent consistent with exemptive relief obtained from the SEC or as permitted by the 1940 Act and rules promulgated thereunder.
Dresdner Bank AG (the “Lending Agent”) may also invest the cash collateral in the Allianz Dresdner Daily Asset Fund or investments in unaffiliated money market funds or accounts, mutually agreed to by the underlying funds and the Lending Agent, that comply with Rule 2a-7 of the 1940 Act relating to money market funds.
The value of the collateral must be at least 102% of the market value of the loaned securities of the underlying funds that are denominated in U.S. dollars and 105% of the market value of the loaned securities of the underlying funds that are not denominated in U.S. dollars. Loaned securities and related collateral of the underlying funds are marked-to-market each business day based upon the market value of the loaned securities at the close of business, employing the most recent available pricing information. Collateral levels are then adjusted based on this mark-to-market evaluation.
The borrower pays fees at the underlying funds’ direction to the Lending Agent. The Lending Agent may retain a portion of the interest earned on the cash collateral invested. The cash collateral invested by the Lending Agent is disclosed in the Schedule of Investments (if applicable).
Interfund Lending
Pursuant to an exemptive order received from the SEC, the underlying funds may be party to interfund lending agreements between the underlying funds and other Janus Capital sponsored mutual funds, which permits them to borrow or lend cash at a rate beneficial to both the borrowing and lending funds. Outstanding borrowings from all sources totaling 10% or more of the borrowing underlying fund’s total assets must be collateralized at 102% of the outstanding principal value of the loan; loans of less than 10% may be unsecured.
Forward Currency Transactions
The underlying funds, except INTECH Risk-Managed Stock Fund, Janus Adviser INTECH Risk-Managed Core Fund, Janus Adviser INTECH Risk-Managed Growth Fund, Janus Adviser INTECH Risk-Managed International Fund, Janus Adviser INTECH Risk-Managed Value Fund (together, the “Risk-Managed funds”) and Janus Money Market Fund, may enter into forward currency contracts in order to reduce exposure to changes in foreign currency exchange rates on foreign portfolio holdings of the underlying funds and to lock in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. A forward currency exchange contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated rate. Gains or losses arise from the difference between the U.S. dollar cost of the original contract and the
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value of the foreign currency in U.S. dollars upon closing a contract. Forward currency contracts held by the underlying funds are fully collateralized by other securities. The collateral is evaluated daily to ensure its market value equals or exceeds the current market value of the corresponding forward currency contracts.
Futures Contracts
The underlying funds, except Janus Money Market Fund, may enter into futures contracts to gain exposure to the stock market pending investment of cash balances or to meet liquidity needs. The underlying funds may also use such derivative instruments to hedge or protect from adverse movements in securities prices, currency rates or interest rates. The use of futures contracts may involve risks such as the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.
Futures contracts are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable. When a contract is closed, a realized gain or loss is recorded equal to the difference between the opening and closing value of the contract. Generally, futures contracts are marked-to-market (i.e., treated as realized and subject to distribution) for federal income tax purposes at fiscal year-end. Securities of the underlying funds are designated as collateral for market value on futures contracts. Such collateral is in the possession of the underlying funds’ custodian.
Swaps
The underlying funds, except the Risk-Managed funds and Janus Money Market Fund, may enter into swap agreements to hedge their exposure to interest rates and credit risk or for investment purposes. A swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to changes in specified prices or rates for a specified amount of an underlying asset. The payment flows are usually netted against each other, with the difference being paid by one party to the other.
Risks may arise as a result of the failure of the counterparty to the swap contract to comply with the terms of the swap contract. The loss incurred by the failure of a counterparty is generally limited to the net interim payment to be received by the underlying funds, and/or the termination value. Therefore, the underlying funds consider the creditworthiness of each counterparty to a swap contract in evaluating potential credit risk. Additionally, risks may arise from unanticipated movements in interest rates or in the value of the underlying securities.
Options Contracts
The underlying funds, except Janus Money Market Fund, may purchase or write put and call options on futures contracts and on portfolio securities for hedging purposes or as a substitute for an investment. The underlying funds, except the Risk-Managed funds and Janus Money Market Fund, may also purchase or write put and call options on foreign currencies in a manner similar to that in which futures or forward contracts on foreign currencies will be utilized. The underlying funds may also invest in Long-Term Equity Anticipation Securities (LEAPS), which are long-term option contracts that can be maintained for a period up to three years. The underlying funds generally invest in options to hedge against adverse movements in the value of portfolio holdings.
When an option is written, the underlying funds receive a premium and become obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. In writing an option, the underlying funds bear the market risk of an unfavorable change in the price of the security underlying the written option. Exercise of an option written by the underlying funds could result in the underlying funds buying or selling a security at a price different from the current market value.
When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option are adjusted by the amount of premium received or paid by the underlying funds.
The underlying funds may also purchase and write exchange-listed and over-the-counter put and call options on domestic securities indices, and on foreign securities indices listed on domestic and foreign securities exchanges. Options on securities indices are similar to options on securities except that (1) the expiration cycles of securities index options are monthly, while those of securities options are currently quarterly, and (2) the delivery requirements are different. Instead of giving the right to take or make delivery of securities at a specified price, an option on a securities index gives the holder the right to receive a cash “exercise settlement amount” equal to (a) the amount, if any, by which the fixed exercise price of the option exceeds (in the case of a put) or is less than (in the case of a call) the closing value of the underlying index on the date of exercise, multiplied by (b) a fixed “index multiplier.” Receipt of this cash amount will depend upon the closing level of the securities index upon which the option is based being greater than, in the case of a call, or less than, in the case of a put, the exercise price of the index and the exercise price of the option times a specified multiple. The writer of the option is obligated, in return for the premium received, to make delivery of this amount.
The risk in writing call options is that the underlying funds give up the opportunity for profit if the market price of the security
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increases and the option is exercised. The risk in writing put options is that the underlying funds may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying options is that the underlying funds pay a premium whether or not the option is exercised. The use of such instruments may involve certain additional risks as a result of unanticipated movement in the market. A lack of correlation between the value of an instrument underlying an option and the asset being hedged, or unexpected adverse price movements, could render the underlying funds’ hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. There is no limit to the loss the underlying funds may recognize due to written call options.
Mortgage Dollar Rolls
The underlying funds, Janus Adviser Global Real Estate Fund, Janus Adviser Long/Short Fund, Janus Adviser Flexible Bond Fund, Janus Flexible Bond Fund, Janus Adviser Floating Rate High Income Fund, Janus Adviser High-Yield Fund, Janus High-Yield Fund and Janus Short-Term Bond Fund, may enter into “mortgage dollar rolls.” In a “mortgage dollar roll” transaction, the underlying funds sell a mortgage-related security (such as a Government National Mortgage Association (“Ginnie Mae”) security) to a dealer and simultaneously agrees to repurchase a similar security (but not the same security) in the future at a pre-determined price. The underlying funds will not be entitled to receive interest and principal payments while the dealer holds the security. The difference between the sale price and the future purchase price is recorded as an adjustment to investment income of the underlying funds.
The underlying funds’ obligations under a dollar roll agreement must be covered by cash, U.S. Government securities or other liquid high-grade debt obligations equal in value to the securities subject to repurchase by the underlying funds, maintained in a segregated account. To the extent that the underlying funds collateralize their obligations under a dollar roll agreement, the asset coverage requirements of the 1940 Act will not apply to such transactions. Furthermore, under certain circumstances, an underlying mortgage-backed security that is part of a dollar roll transaction may be considered illiquid.
Successful use of mortgage dollar rolls depends on the portfolio managers’ ability to predict interest rates and mortgage payments. Dollar roll transactions involve the risk that the market value of the securities the underlying fund is required to purchase may decline below the agreed upon repurchase price.
Securities Traded on a To-Be-Announced Basis
The underlying funds, Janus Adviser Flexible Bond Fund, Janus Flexible Bond Fund, Janus Adviser Floating Rate High Income Fund, Janus Adviser High-Yield Fund, Janus High-Yield Fund and Janus Short-Term Bond Fund, may trade securities on a to-be-announced (“TBA”) basis. In a TBA transaction, the underlying funds commit to purchasing or selling securities for which specific information is not yet known at the time of the trade, particularly the face amount and maturity date in Ginnie Mae, Federal National Mortgage Association (“Fannie Mae”) and/or Federal Home Loan Mortgage Corporation (“Freddie Mac”) transactions.
Securities purchased on a TBA basis are not settled until they are delivered to the underlying funds, normally 15 to 45 days later. Beginning on the date the underlying funds enter into a TBA transaction, cash, U.S. Government securities or other liquid high-grade debt obligations are segregated in an amount equal in value to the purchase price of the TBA security. These transactions are subject to market fluctuations and their current value is determined in the same manner as for other securities.
Floating Rate Loans
The underlying funds, Janus Adviser Balanced Fund, Janus Balanced Fund, Janus Adviser Long/Short Fund, Janus Adviser Flexible Bond Fund, Janus Flexible Bond Fund, Janus Adviser Floating Rate High Income Fund, Janus Adviser High-Yield Fund, Janus High-Yield Fund and Janus Short-Term Bond Fund, may invest in floating rate loans. Floating rate loans are debt securities that have floating interest rates which adjust periodically and are tied to a benchmark lending rate such as the London Interbank Offered Rate (“LIBOR”). LIBOR is a short-term interest rate that banks charge one another and that is generally representative of the most competitive and current cash rates. In other cases, the lending rate could be tied to the prime rate offered by one or more major U.S. banks or the rate paid on large certificates of deposit traded in the secondary markets. If the benchmark lending rate changes, the rate payable to lenders under the loan will change at the next scheduled adjustment date specified in the loan agreement. Floating rate loans are typically issued to companies (“borrowers”) in connection with recapitalizations, acquisitions, and refinancings. Floating rate loan investments are generally below investment grade. Senior floating rate loans are secured by specific collateral of a borrower and are senior in the borrower’s capital structure. The senior position in the borrower’s capital structure generally gives holders of senior loans a claim on certain of the borrower’s assets that is senior to subordinated debt and preferred and common stock in the case of a borrower’s default. Floating rate loan investments may involve foreign borrowers, and investments may be denominated in foreign currencies. Floating rate loans often involve borrowers whose financial condition is troubled or uncertain and companies
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that are highly leveraged. The underlying funds may invest in obligations of borrowers who are in bankruptcy proceedings. Floating rate loans may include fully funded term loans or revolving lines of credit.
Bank Loans
The underlying funds, Janus Adviser Balanced Fund, Janus Balanced Fund, Janus Adviser Long/Short Fund, Janus Adviser Flexible Bond Fund, Janus Flexible Bond Fund, Janus Adviser Floating Rate High Income Fund, Janus Adviser High-Yield Fund, Janus High-Yield Fund and Janus Short-Term Bond Fund, may invest in bank loans, which include institutionally-traded floating rate securities generally acquired as an assignment or participation interest in loans originated by a bank or financial institution (the “Lender”) that acts as agent for all holders. The agent administers the terms of the loan, as specified in the loan agreement. When investing in a loan participation, the underlying funds have the right to receive payments of principal, interest and any fees to which it is entitled only from the Lender selling the loan agreement and only upon receipt by the Lender of payments from the borrower. The underlying funds generally have no right to enforce compliance with the terms of the loan agreement with the borrower. Assignments and participations involve credit, interest rate, and liquidity risk. Interest rates on floating rate securities adjust with general interest rate changes and/or issuer credit quality. The interest rates paid on a floating rate security in which the underlying funds invest generally are readjusted periodically to an increment over a designated benchmark rate, such as the one-month, three-month, six-month, or one-year LIBOR.
The underlying funds may have difficulty trading assignments and participations to third parties. There may be restrictions on transfer and only limited opportunities may exist to sell such securities in secondary markets. As a result, the underlying funds may be unable to sell assignments or participations at the desired time or may be able to sell only at a price less than fair market value. The underlying funds utilize an independent third party to value individual bank loans on a daily basis.
Short Sales
The underlying funds, except the Risk-Managed funds, may engage in “short sales against the box.” Short sales against the box involve either selling short a security that the underlying funds own, or selling short a security that the underlying funds have the right to obtain, for delivery at a specified date in the future. The underlying funds may enter into a short sale against the box to hedge against anticipated declines in the market price of portfolio securities. The underlying funds do not deliver from their portfolio the securities sold short and do not immediately receive the proceeds of the short sale. The underlying funds borrow 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 underlying funds lose the opportunity to participate in the gain.
The underlying funds, except the Risk-Managed funds and Janus Money Market Fund, may also engage in other short sales. The underlying funds may engage in short sales when the portfolio managers and/or investment personnel anticipate that a security’s market purchase price will be less than its borrowing price. To complete the transaction, the underlying funds must borrow the security to deliver it to the purchaser and buy that same security in the market to return it to the lender. The total market value of all of the underlying funds’ short sales positions will not exceed 10% of their net assets. Although the potential for gain as a result of a short sale is limited to the price at which the underlying funds sold the security short less the cost of borrowing the security, the potential for loss is theoretically unlimited because there is no limit to the cost of replacing the borrowed security. There is no assurance that the underlying funds will be able to close out a short position at a particular time or at an acceptable price. A gain or a loss will be recognized upon termination of a short sale. There is no limit to the size of any loss that the underlying funds may recognize upon termination of a short sale. Short sales held by the underlying funds are fully collateralized by other securities.
Foreign Currency Translations
The underlying funds do not isolate that portion of the results of operations resulting from 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 on investments and foreign currency translations arises from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses of the underlying funds are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income.
Foreign currency-denominated assets and forward currency contracts of the underlying funds may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and market risk. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
When-Issued Securities
The underlying funds may purchase or sell securities on a when-issued or forward commitment basis. The price of the
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underlying securities and date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Losses may arise due to changes in the market value of the securities or from the inability of counterparties to meet the terms of the contract. In connection with such purchases, the underlying funds may hold liquid assets as collateral with the underlying funds’ custodian sufficient to cover the purchase price.
Exchange-Traded Funds
The underlying funds, except Janus Money Market Fund, may invest in exchange-traded funds, which are index-based investment companies which hold substantially all of their assets in securities with equity characteristics. As a shareholder of another investment company, the underlying fund would bear its pro rata portion of the other investment company’s expenses, including advisory fees, in addition to the expenses the underlying fund bears directly in connection with its own operations.
Equity-Linked Structured Notes
The underlying funds may invest in equity-linked structured notes. Equity-linked structured notes are derivative securities which are specially designed to combine the characteristics of one or more underlying securities and their equity derivatives in a single note form. The return and/or yield or income component may be based on the performance of the underlying equity securities, an equity index, and/or option positions. Equity-linked structured notes are typically offered in limited transactions by financial institutions in either registered or non-registered form. An investment in equity-linked structured notes creates exposure to the credit risk of the issuing financial institution, as well as to the market risk of the underlying securities. There is no guaranteed return of principal with these securities and the appreciation potential of these securities may be limited by a maximum payment or call right. In certain cases, equity-linked structured notes may be more volatile and less liquid than less complex securities or other types of fixed-income securities. Such securities may exhibit price behavior that does not correlate with other fixed-income securities.
Initial Public Offerings
The underlying funds, except Janus Money Market Fund, may invest in initial public offerings (“IPOs”). IPOs and other investment techniques may have a magnified performance impact on an underlying fund with a small asset base. The underlying funds may not experience similar performance as their assets grow.
Additional Investment Risk
The underlying funds, particularly Janus Adviser Flexible Bond Fund, Janus Flexible Bond Fund, Janus Adviser Floating Rate High Income Fund, Janus Adviser High-Yield Fund, Janus High-Yield Fund and Janus Short-Term Bond Fund, may be invested in lower-rated debt securities that have a higher risk of default or loss of value since these securities may be sensitive to economic changes, political changes or adverse developments specific to the issuer. The Risk-Managed funds does not intend to invest in high-yield/high-risk bonds.
Restricted Security Transactions
Restricted securities held by the underlying funds may not be sold except in exempt transactions or in a public offering registered under the Securities Act of 1933, as amended. The risk of investing in such securities is generally greater than the risk of investing in the securities of widely held, publicly traded companies. Lack of a secondary market and resale restrictions may result in the inability of the underlying funds to sell a security at a fair price and may substantially delay the sale of the security. In addition, these securities may exhibit greater price volatility than securities for which secondary markets exist.
Dividend Distributions
Dividends of net investment income and realized capital gains (if any) are generally declared and distributed annually. The majority of dividends and capital gains distributions from a Portfolio may be automatically reinvested into additional shares of that Portfolio, based upon the discretion of the shareholder.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Federal Income Taxes
No provision for income taxes is included in the accompanying financial statements, as the Portfolios intend to distribute to shareholders all taxable investment income and realized gains and otherwise comply with Subchapter M of the Internal Revenue Code applicable to regulated investment companies.
The Portfolios adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes on April 30, 2008. FIN 48 requires an evaluation of tax positions taken (or expected to be taken) in the course of preparing a Portfolio’s tax return to determine whether these positions meet a “more-likely-than-not” standard that based on the technical merits have a more than fifty percent likelihood of being sustained by a taxing authority upon examination. A tax position that meets the “more-likely-than-not” recognition
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threshold is measured to determine the amount of benefit to recognize in the financial statements. The Portfolios recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations.
FIN 48 requires management of the Portfolios to analyze all open tax years, fiscal years 2003-2006 as defined by Statute of Limitations, for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of and during the six-month period ended April 30, 2008, the Portfolios did not have a liability for any unrecognized tax benefits. The Portfolios have no examination in progress and are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
New Accounting Pronouncements
In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS No. 157”), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not require new fair value measurements, but is applied to the extent that other accounting pronouncements require or permit fair value measurements. SFAS No. 157 emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Management does not believe the adoption of SFAS No. 157 will impact the financial statement amounts; however, the Portfolios will be required to disclose the extent to which fair value is used to measure assets and liabilities and the inputs used to develop the measurements.
In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS No. 159”), which permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Management does not believe the adoption of SFAS No. 159 will impact the financial statement amounts.
In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS No. 161”), which requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS No. 161 is effective for financial statements issued for fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. Management is in the process of evaluating the impact of SFAS No. 161 on the Portfolios’ financial statement disclosures.
2. | Investment Advisory Agreements and Other Transactions with Affiliates |
The Portfolios pay a monthly advisory fee to Janus Capital based upon average daily net assets and calculated at the annual rate shown in the table below:
Advisory | |||||
Portfolio | Fee % | ||||
Janus Smart Portfolio — Growth | 0.05% | ||||
Janus Smart Portfolio — Moderate | 0.05% | ||||
Janus Smart Portfolio — Conservative | 0.05% | ||||
Janus Capital has agreed until at least March 1, 2009 to reimburse the Portfolios by the amount, if any, that such Portfolio’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding any expenses of an underlying fund, brokerage commissions, interest, dividends, taxes and extraordinary expenses including, but not limited to, acquired fund fees and expenses, exceed the following annual rates noted below. If applicable, amounts reimbursed to the Portfolios by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Portfolio | Expense Limit Fee % | ||||
Janus Smart Portfolio — Growth | 0.24% | ||||
Janus Smart Portfolio — Moderate | 0.20% | ||||
Janus Smart Portfolio — Conservative | 0.17% | ||||
Janus Capital will be entitled to recoup such reimbursement or fee reduction from the Portfolios for a three-year period commencing with the operations of the Portfolios, provided that at no time during such period shall the normal operating expenses allocated to any of the Portfolios, with the exceptions noted above, exceed the percentages stated. This recoup of such reimbursements will expire December 30, 2008. Although Janus Capital is entitled to recoup such reimbursement, Janus Capital has agreed to waive its right of reimbursement upon termination of the current advisory agreements. For the six-month period ended April 30, 2008, total reimbursement by Janus Capital and the recoupment that
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Notes to Financial Statements (unaudited) (continued)
may be potentially made to Janus Capital are indicated in the table below:
Portfolio | Reimbursement | Total Recoupment | ||||||
Janus Smart Portfolio — Growth | $ | – | $ | 46,539 | ||||
Janus Smart Portfolio — Moderate | – | 99,565 | ||||||
Janus Smart Portfolio — Conservative | 9,020 | 129,731 | ||||||
For the six-month period ended April 30, 2008, total previously waived recoupment received by Janus Capital was $29,338 and $3,006 for Janus Smart Portfolio – Growth and Janus Smart Portfolio – Moderate, respectively.
The Portfolios’ expenses may be reduced by expense offsets from an unaffiliated transfer agent. Such offsets are included in Expense and Fee Offsets on the Statement of Operations. The transfer agent fee offsets received during the period reduce Transfer Agent Fees and Expenses. The Portfolios could have employed the assets used by the transfer agent to produce income if they had not entered into an expense offset arrangement.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Portfolios’ and the underlying funds’ transfer agent. For transfer agency and other services, Janus Services receives a fee at an annual rate of 0.05% of the Portfolio’s total net assets. In addition, Janus Services receives $4.00 per open shareholder account for transfer agent services.
Janus Capital has entered into an agreement with Wilshire Associates Inc. (“Wilshire”), a global investment technology, investment consulting, and investment management firm, to act as a consultant to Janus Capital. Wilshire provides research and advice regarding asset allocation methodologies, which Janus Capital uses when determining asset class allocations for the Portfolios. For its consulting services, Janus Capital pays Wilshire an annual fee, payable monthly, that is comprised of a combination of an initial program establishment fee, fixed fee, and an asset-based fee.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Portfolios. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Portfolios as unrealized appreciation/(depreciation) and is shown as of April 30, 2008 on the Statement of Assets and Liabilities as an asset, “Non-interested Trustees’ deferred compensation,” and a liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the six-month period ended April 30, 2008 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. No deferred fees were paid to any Trustee under the Deferred Plan during the six-month period ended April 30, 2008.
During the six-month period ended April 30, 2008, Janus Services reimbursed the following Portfolios as a result of dilutions caused by incorrectly processed shareholder activity.
Portfolio | |||||
Janus Smart Portfolio — Growth | $ | 8,030 | |||
Janus Smart Portfolio — Moderate | 7,728 | ||||
Janus Smart Portfolio — Conservative | 929 | ||||
During the fiscal year ended October 31, 2007, Janus Services reimbursed the following Portfolios as a result of dilutions caused by incorrectly processed shareholder activity.
Portfolio | |||||
Janus Smart Portfolio — Growth | $ | 121 | |||
Janus Smart Portfolio — Conservative | 716 | ||||
Certain officers of the Portfolios may also be officers and/or directors of Janus Capital. Such officers receive no compensation from the Portfolios, except for the Portfolios’ Chief Compliance Officer. Effective January 1, 2006, the Portfolios began reimbursing the adviser for a portion of the compensation paid to the Chief Compliance Officer of the Trust. Total compensation of $39,907 was paid by the Trust during the six-month period ended April 30, 2008. Each Portfolio’s portion is reported as part of “Other Expenses” on the Statement of Operations.
3. | Purchases and Sales of Investment Securities |
For the six-month period ended April 30, 2008, the aggregate cost of purchases and proceeds from sales of investment securities (excluding short-term securities and options contracts) were as follows:
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Purchase of | Proceeds from Sales | |||||||||||||
Purchase of | Proceeds from Sales | Long-Term U.S. | of Long-Term U.S. | |||||||||||
Portfolio | Securities | of Securities | Government Obligations | Government Obligations | ||||||||||
Janus Smart Portfolio — Growth | $ | 41,750,563 | $ | 5,799,424 | $ | – | $ | – | ||||||
Janus Smart Portfolio — Moderate | 31,112,391 | 4,977,645 | – | – | ||||||||||
Janus Smart Portfolio — Conservative | 34,298,254 | 3,622,865 | – | – | ||||||||||
4. | Federal Income Tax |
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses and capital loss carryovers.
The Funds have elected to treat gains and losses on forward foreign currency contracts as capital gains and losses. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of April 30, 2008 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 | Net Tax | |||||||||||
Portfolio | Cost | Appreciation | (Depreciation) | Appreciation | ||||||||||
Janus Smart Portfolio — Growth | $ | 188,645,812 | $ | 15,493,721 | $ | (4,126,947) | $ | 11,366,774 | ||||||
Janus Smart Portfolio — Moderate | 136,913,913 | 7,860,979 | (2,481,949) | 5,379,030 | ||||||||||
Janus Smart Portfolio — Conservative | 95,644,722 | 3,038,750 | (1,493,108) | 1,545,642 | ||||||||||
5. | Capital Share Transactions |
Janus Smart | Janus Smart | Janus Smart | ||||||||||||||||||||||||||
For the six-month period ended April 30, 2008 (unaudited) | Portfolio — | Portfolio — | Portfolio — | |||||||||||||||||||||||||
and the fiscal year ended October 31, 2007 | Growth | Moderate | Conservative | |||||||||||||||||||||||||
(all numbers are in thousands) | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||||||
Transactions in Portfolio Shares | ||||||||||||||||||||||||||||
Shares sold | 4,678 | 9,614 | 3,763 | 6,564 | 4,288 | 5,460 | ||||||||||||||||||||||
Reinvested dividends and distributions | 648 | 101 | 473 | 83 | 238 | 42 | ||||||||||||||||||||||
Shares repurchased | (2,214) | (2,954) | (1,887) | (1,788) | (1,791) | (1,621) | ||||||||||||||||||||||
Net Increase/(Decrease) in Portfolio Shares | 3,112 | 6,761 | 2,349 | 4,859 | 2,735 | 3,881 | ||||||||||||||||||||||
Shares Outstanding, Beginning of Period | 12,650 | 5,889 | 9,502 | 4,643 | 5,682 | 1,801 | ||||||||||||||||||||||
Shares Outstanding, End of Period | 15,762 | 12,650 | 11,851 | 9,502 | 8,417 | 5,682 |
6. | Affiliated Fund of Funds Transactions |
The Portfolios invest in certain mutual funds within the Janus family of funds. While each Portfolio can invest in any or all of the underlying funds, it is expected that each Portfolio will normally invest in only some of the underlying funds at any particular time. All of the realized gain/(loss) recognized by the Portfolios is derived from affiliates. A Portfolio’s investment in any of the underlying funds may exceed 25% of such Portfolio’s total assets. In such instances, the financial statements for the underlying fund may be obtained on the underlying fund’s website at www.janus.com. During the six month period ended April 30, 2008, the Portfolios recorded distributions from affiliated investment companies as dividend income and had the following affiliated purchases and sales:
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Notes to Financial Statements (unaudited) (continued)
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/08 | |||||||||||||||
Janus Smart Portfolio – Growth | |||||||||||||||||||||
Janus Adviser INTECH Risk-Managed Growth Fund – Class I Shares | 435,994 | $ | 6,083,188 | (47,370) | $ | (746,686) | $ | (102,773) | $ | 341,232 | $ | 25,726,291 | |||||||||
Janus Adviser INTECH Risk-Managed Value Fund – Class I Shares | 512,647 | 5,618,133 | (60,158) | (760,180) | (116,267) | 519,936 | 24,367,933 | ||||||||||||||
Janus Adviser International Equity Fund – Class I Shares | 268,588 | 3,304,762 | (34,632) | (451,850) | (37,906) | 132,525 | 18,784,967 | ||||||||||||||
Janus Flexible Bond Fund | 677,075 | 6,546,811 | (80,776) | (780,076) | 1,817 | 676,765 | 35,104,264 | ||||||||||||||
Janus Growth and Income Fund | 121,339 | 4,297,341 | (10,838) | (472,059) | (104,110) | 268,281 | 14,565,683 | ||||||||||||||
Janus High-Yield Fund | 134,335 | 1,212,124 | (15,354) | (153,096) | (15,115) | 188,875 | 5,697,904 | ||||||||||||||
Janus Orion Fund | 145,386 | 1,791,682 | (19,398) | (257,789) | (27,820) | 30,996 | 10,798,227 | ||||||||||||||
Janus Overseas Fund | 136,447 | 7,218,122 | (12,718) | (776,558) | (132,644) | 632,705 | 30,471,314 | ||||||||||||||
Janus Research Fund | 96,526 | 2,829,633 | (12,874) | (406,839) | (38,889) | 12,535 | 15,762,881 | ||||||||||||||
Janus Twenty Fund | 39,976 | 2,848,767 | (5,302) | (394,267) | (26,317) | 31,669 | 18,733,122 | ||||||||||||||
$ | 41,750,563 | $ | (5,199,400) | $ | (600,024) | $ | 2,838,519 | $ | 200,012,586 | ||||||||||||
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/08 | |||||||||||||||
Janus Smart Portfolio – Moderate | |||||||||||||||||||||
Janus Adviser INTECH Risk-Managed Growth Fund – Class I Shares | 255,953 | $ | 3,572,670 | (33,550) | $ | (527,920) | $ | (73,007) | $ | 192,178 | $ | 14,388,861 | |||||||||
Janus Adviser INTECH Risk-Managed Value Fund – Class I Shares | 275,080 | 3,010,427 | (38,719) | (487,033) | (73,477) | 266,692 | 12,406,783 | ||||||||||||||
Janus Adviser International Equity Fund – Class I Shares | 134,652 | 1,659,155 | (20,879) | (271,583) | (23,448) | 64,701 | 8,904,255 | ||||||||||||||
Janus Flexible Bond Fund | 986,522 | 9,540,636 | (141,136) | (1,357,599) | 7,138 | 938,859 | 48,488,863 | ||||||||||||||
Janus Growth and Income Fund | 101,038 | 3,580,555 | (10,975) | (477,797) | (105,597) | 215,241 | 11,659,103 | ||||||||||||||
Janus High-Yield Fund | 100,612 | 907,635 | (13,713) | (136,765) | (12,698) | 126,740 | 4,059,186 | ||||||||||||||
Janus Orion Fund | 65,909 | 810,477 | (10,395) | (137,553) | (13,486) | 13,250 | 4,603,799 | ||||||||||||||
Janus Overseas Fund | 79,373 | 4,204,394 | (8,964) | (544,306) | (89,394) | 354,269 | 17,008,144 | ||||||||||||||
Janus Research Fund | 54,687 | 1,601,162 | (8,635) | (272,076) | (23,942) | 6,709 | 8,410,260 | ||||||||||||||
Janus Short-Term Bond Fund | 396,944 | 1,151,030 | (57,123) | (165,852) | (429) | 104,176 | 5,715,076 | ||||||||||||||
Janus Twenty Fund | 15,041 | 1,074,250 | (2,388) | (178,122) | (12,699) | 11,280 | 6,648,613 | ||||||||||||||
$ | 31,112,391 | $ | (4,556,606) | $ | (421,039) | $ | 2,294,095 | $ | 142,292,943 | ||||||||||||
�� | |||||||||||||||||||||
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/08 | |||||||||||||||
Janus Smart Portfolio – Conservative | |||||||||||||||||||||
Janus Adviser INTECH Risk-Managed Growth Fund – Class I Shares | 204,138 | $ | 2,841,400 | (18,570) | $ | (291,908) | $ | (29,292) | $ | 84,420 | $ | 7,232,318 | |||||||||
Janus Adviser INTECH Risk-Managed Value Fund – Class I Shares | 249,904 | 2,728,051 | (23,655) | (297,670) | (35,055) | 129,919 | 6,954,501 | ||||||||||||||
Janus Adviser International Equity Fund – Class I Shares | 80,199 | 977,983 | (7,906) | (103,467) | (4,986) | 19,452 | 3,045,171 | ||||||||||||||
Janus Contrarian Fund | 74,319 | 1,415,774 | (6,776) | (140,230) | (8,922) | 12,395 | 3,699,947 | ||||||||||||||
Janus Flexible Bond Fund | 1,763,712 | 17,049,170 | (173,776) | (1,684,533) | (10,359) | 922,180 | 5,840,902 | ||||||||||||||
Janus Growth and Income Fund | 56,405 | 1,996,162 | (4,499) | (196,831) | (32,697) | 73,310 | 4,495,948 | ||||||||||||||
Janus High-Yield Fund | 113,797 | 1,029,434 | (10,843) | (108,131) | (9,650) | 87,126 | 2,801,773 | ||||||||||||||
Janus Orion Fund | 79,259 | 966,391 | (7,880) | (105,355) | (6,874) | 7,859 | 3,113,969 | ||||||||||||||
Janus Overseas Fund | 44,285 | 2,332,838 | (3,613) | (222,061) | (25,099) | 114,965 | 6,295,250 | ||||||||||||||
Janus Research Fund | 32,953 | 960,539 | (3,321) | (105,108) | (6,627) | 2,007 | 2,881,221 | ||||||||||||||
Janus Short-Term Bond Fund | 690,206 | 2,000,512 | (67,985) | (197,486) | (524) | 99,554 | 50,829,364 | ||||||||||||||
$ | 34,298,254 | $ | (3,452,780) | $ | (170,085) | $ | 1,553,187 | $ | 97,190,364 | ||||||||||||
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7. | Pending Legal Matters |
In the fall of 2003, the Securities and Exchange Commission (“SEC”), the Office of the New York State Attorney General (“NYAG”), the Colorado Attorney General (“COAG”), and the Colorado Division of Securities (“CDS”) announced that they were investigating alleged frequent trading practices in the mutual fund industry. On August 18, 2004, Janus Capital announced that it had reached final settlements with the SEC, the NYAG, the COAG, and the CDS related to such regulators’ investigations into Janus Capital’s frequent trading arrangements.
A number of civil lawsuits were brought against Janus Capital and certain of its affiliates, the Janus funds, and related entities and individuals based on allegations similar to those announced by the above regulators and were filed in several state and federal jurisdictions. Such lawsuits alleged a variety of theories for recovery including, but not limited to, the federal securities laws, other federal statutes (including ERISA), and various common law doctrines. The Judicial Panel on Multidistrict Litigation transferred these actions to the U.S. District Court for the District of Maryland (the “Court”) for coordinated proceedings. On September 29, 2004, five consolidated amended complaints were filed with the Court that generally include: (i) claims by a putative class of investors in certain Janus funds asserting claims on behalf of the investor class (Marini, et al. v. Janus Investment Fund, et al., U.S. District Court, District of Maryland, Case No. 04-CV-00497); (ii) derivative claims by investors in certain Janus funds ostensibly on behalf of such funds (Steinberg et al. v. Janus Capital Management, LLC et al., U.S. District Court, District of Maryland, Case No. 04-CV-00518); (iii) claims on behalf of participants in the Janus 401(k) plan (Wangberger v. Janus Capital Group Inc., 401(k) Advisory Committee, et al., U.S. District Court, District of Maryland, Case No. JFM-05-2711); (iv) claims brought on behalf of shareholders of Janus Capital Group Inc. (“JCGI”) on a derivative basis against the Board of Directors of JCGI (Chasen v. Whiston, et al., U.S. District Court, District of Maryland, Case No. 04-MD-00855); and (v) claims by a putative class of shareholders of JCGI asserting claims on behalf of the shareholders (Wiggins, et al. v. Janus Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No. 04-CV-00818). Each of the five complaints initially named JCGI and/or Janus Capital as a defendant. In addition, the following were also named as defendants in one or more of the actions: Janus Investment Fund (“JIF”), Janus Aspen Series (“JAS”), Janus Adviser Series (“JAD”), Janus Distributors LLC, Enhanced Investment Technologies, LLC (“INTECH”), Bay Isle Financial LLC (“Bay Isle”), Perkins, Wolf, McDonnell and Company, LLC (“Perkins”), the Advisory Committee of the Janus 401(k) plan, and the current or former directors of JCGI.
On August 25, 2005, the Court entered orders dismissing most of the claims asserted against Janus Capital and its affiliates by fund investors in the Marini and Steinberg cases (actions (i) and (ii) above) except certain claims under Section 10(b) of the Securities Exchange Act of 1934 and under Section 36(b) of the Investment Company Act of 1940, as amended (the “1940 Act”). On August 15, 2006, the Wangberger complaint in the 401(k) plan class action (action (iii) above) was dismissed by the district court with prejudice. The plaintiff appealed that dismissal decision to the United States Court of Appeals for the Fourth Circuit. The appeal is still pending and argument in the matter was held in December 2007. The Court also dismissed the Chasen lawsuit (action (iv) above) against JCGI’s Board of Directors without leave to amend. Finally, a Motion to Dismiss the Wiggins suit (action (v) above) was granted and the matter was dismissed in May 2007. However, in June 2007, Plaintiffs appealed that dismissal to the United States Court of Appeals for the Fourth Circuit. That appeal is currently pending.
In addition to the lawsuits described above, the Auditor of the State of West Virginia (“Auditor”), in his capacity as securities commissioner, has initiated administrative proceedings against many of the defendants in the market timing cases (including JCGI and Janus Capital) and, as a part of its relief, is seeking disgorgement and other monetary relief based on similar market timing allegations (In the Matter of Janus Capital Group Inc. et al., Before the Securities Commissioner, State of West Virginia, Summary Order No. 05-1320). The respondents in these proceedings collectively sought a Writ of Prohibition in state court, which was denied. Their subsequent Petition for Appeal was also denied. Consequently, in September 2006, JCGI and Janus Capital filed their answer to the Auditor’s summary order instituting proceedings and requested a hearing. A status conference was held on June 28, 2007, during which the parties were ordered to submit their proposed scheduling order. To date, no scheduling order has been entered in the case. In addition to the pending Motion to Discharge Order to Show Cause, JCGI and Janus Capital, as well as other similarly situated defendants, continue to challenge the statutory authority of the Auditor to bring such an action.
During 2007, two lawsuits were filed against Janus Management Holdings Corporation (“Janus Holdings”), an affiliate of JCGI, by former Janus portfolio managers, alleging that Janus Holdings unilaterally implemented certain changes to compensation in violation of prior agreements. These complaints allege some or all of the following claims: (1) breach of contract; (2) willful and wanton breach of contract; (3) breach of good faith and fair dealing; and (4) estoppel. Janus Holdings filed Answers to these complaints denying any liability for these claims and intends to vigorously defend against the allegations.
Additional lawsuits may be filed against certain of the Janus funds, Janus Capital, and related parties in the future. Janus Capital does not currently believe that these pending actions will materially affect its ability to continue providing services it has agreed to provide to the Janus funds.
Janus Smart Portfolios April 30, 2008 41
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Portfolios use to determine how to vote proxies relating to their portfolio securities is available: (i) without charge, upon request, by calling 1-800-525-3713 (toll free); (ii) on the Portfolios’ website at www.janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding each Portfolio’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through www.janus.com and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Portfolios file their complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Portfolios’ Form N-Q: (i) is available on the SEC’s website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-3713 (toll free).
Approval of Advisory Agreements During the Period
In this disclosure, each fund and portfolio of Janus Investment Fund are referred to as “Fund” and, collectively, as “Funds.”
The Trustees of Janus Investment Fund, none of whom has ever been affiliated with Janus Capital (“Independent Trustees”), oversee the management of each Fund and, as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the three Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed a substantial amount of information provided by Janus Capital and the respective subadvisers in response to requests of the Independent Trustees and their independent legal counsel. They also received and reviewed a considerable amount of information and analysis provided by their independent fee consultant. Throughout their consideration of the agreements, the Independent Trustees were advised by their independent legal counsel. The Independent Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 14, 2007, based on their evaluation of the information provided by Janus Capital, the subadvisers and the independent fee consultant, as well as other information, the Trustees determined that the overall arrangements between each Fund and Janus Capital and each subadviser, as applicable, were fair and reasonable in light of the nature, extent and quality of the services provided by Janus Capital, its affiliates and the subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting the Trustees unanimously approved the continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, for the period from February 1, 2008 through February 1, 2009 (January 1, 2008 through January 1, 2009 for INTECH Risk-Managed Stock Fund and Janus Global Research Fund), subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective and strategy of each Fund, the knowledge of 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, especially those who provide investment management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions, serving as the Funds’ administrator, monitoring adherence to the Funds’ investment restrictions, producing shareholder reports, providing support services for the Trustees and Trustee committees, communicating with shareholders, and overseeing the activities of other service providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital and/or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements; that, taking into account steps taken to address those Funds whose performance lagged that of the median of their peers for certain periods, the quality of those services had been
42 Janus Smart Portfolios April 30, 2008
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consistent with or superior to quality norms in the industry; and that the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its continuing ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the investment performance of each Fund over various time periods. They reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by Lipper Inc., an independent provider of investment company data, and with the Fund’s benchmark index. They concluded that the performance of many Funds was good to very good under current market conditions. Although the performance of some Funds lagged that of the median of their peers for certain periods, the Trustees also concluded that Janus Capital had taken appropriate steps to address those instances of under-performance and that the more recent performance of most of those Funds had been improving.
Costs of Services Provided
The Trustees examined information on the fees and expenses of each Fund in comparison to similar information for comparable funds as provided by Lipper. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and administrative) fees for most of the Funds, after contractual expense limitations, was below the mean management fee rate of the respective peer group of funds selected by Lipper.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital to its separate account clients and to its subadvised funds (for which Janus Capital provides only services related to portfolio management). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administrative services, oversight of the Funds’ other service providers, Trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, the Trustees noted that the spread between the average fee rates charged to the Funds and the fee rates that Janus Capital charged to its separate account clients was significantly smaller than the average spread for such fee rates of other advisers, based on publicly available data and research conducted by their independent fee consultant.
The Trustees reviewed information on the profitability to Janus Capital and its affiliates of their relationships with each Fund, as well as an explanation of the methodology used in allocating various expenses of Janus Capital and its affiliates among the Funds and other clients. They also reviewed the financial statements of Janus Capital’s parent company and its corporate structure. In their review, the Trustees considered whether Janus Capital and each subadviser receives adequate incentives to manage the Funds effectively. They recognized that profitability comparisons among investment advisers are difficult because very little comparative information is publicly available and profitability of any adviser is affected by numerous factors, including the organizational structure of the particular adviser, the types of funds and other accounts it manages, possible other lines of business, the methodology for allocating expenses, and the adviser’s capital structure and cost of capital. However, based on the information available and taking those factors into account, the Trustees concluded that Janus Capital’s profitability with respect to each Fund in relation to the services rendered was not unreasonable.
The Trustees concluded that the management fees and other compensation payable by each Fund to Janus Capital and its affiliates, as well as the fees payable by Janus Capital or the Funds to the subadvisers of subadvised Funds, were reasonable in relation to the nature, extent and quality of the services provided, taking into account the fees charged by other advisers for managing comparable mutual funds with similar strategies and the fees Janus Capital and the subadvisers charge to other clients. They also concluded that the overall expense ratio of each Fund was reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund and any expense limitations agreed to by Janus Capital.
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of the Funds increase. They noted that, although most Funds pay advisory fees at a fixed rate as a percentage of net assets, without any breakpoints, the management fee rate paid by each Fund, after any contractual expense limitations, was below the mean management fee rate of the Fund’s peer group selected by Lipper; and, for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the
Janus Smart Portfolios April 30, 2008 43
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Additional Information (unaudited) (continued)
Funds because they have not reached adequate scale. Moreover, as the assets of many of the Funds declined in the past few years, those Funds benefited from having advisory fee rates that remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for several Funds that will cause the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through lower charges of third-party service providers, based on the combined scale of all of the Funds. Based on all of the information they reviewed, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of economies of scale at the current asset level of the Fund.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and that the transfer agent receives compensation directly from the non-money market Funds for services provided. They also considered Janus Capital’s past and proposed use of commissions paid by Funds on their portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting those Funds and/or other clients of Janus Capital. The Trustees concluded that Janus Capital’s use of “soft” commission dollars of a Fund to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit the Funds. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital may potentially benefit from their relationship with each other in other ways. They also concluded that Janus Capital benefits from the receipt of proprietary and third-party research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s receipt of those products and services, as well as research products and services acquired through commissions paid by other clients of Janus Capital. They further concluded that success of any Fund could attract other business to Janus Capital or other Janus funds and that the success of Janus Capital could enhance Janus Capital’s ability to serve the Funds.
After full consideration of the above factors, as well as other factors, all of the Trustees, all of whom are Independent Trustees, concluded that the proposed continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, was in the best interest of the respective Funds and their shareholders.
44 Janus Smart Portfolios April 30, 2008
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Explanations of Charts, Tables and
Financial Statements (unaudited)
Financial Statements (unaudited)
1. | Performance Overviews |
Performance overview graphs compare the performance of a hypothetical $10,000 investment in each Portfolio (from inception) with one or more widely used market indices. The hypothetical example does not represent the returns of any particular investment.
When comparing the performance of a Portfolio with an index, keep in mind that market indices do not include brokerage commissions that would be incurred if you purchased the individual securities in the index. They also do not include taxes payable on dividends and interest or operating expenses incurred if you maintained a Portfolio invested in the index.
Average annual total returns are also quoted for each Portfolio. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or redemptions of Portfolio shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized and unsubsidized ratios for the past fiscal year. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting a Portfolio’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects a Portfolio’s subsidized expense ratio. Both the total annual fund operating expenses ratio and net annual fund operating expenses ratio are based on average net assets as of the fiscal year ended October 31, 2007. The ratios also include expenses indirectly incurred by the Portfolio as a result of investing in other investment companies or pooled investments, which are not reflected in the “Financial Highlights” of this report. As a result, these ratios may be higher or lower than those shown in the “Financial Highlights” in this report. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
2. | Schedules of Investments |
Following the performance overview section is each Portfolio’s Schedule of Investments. This schedule reports the types of securities held in each Portfolio on the last day of the reporting period. Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period.
3. | Statement of Assets and Liabilities |
This statement is often referred to as the “balance sheet.” It lists the assets and liabilities of the Portfolios on the last day of the reporting period.
The Portfolios’ assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on underlying fund shares owned and the receivable for Portfolio shares sold to investors but not yet settled. The Portfolios’ liabilities include payables for securities purchased but not yet settled, Portfolio shares redeemed but not yet paid and expenses owed but not yet paid. Additionally, there may be other assets and liabilities.
The section entitled “Net Assets Consist of” breaks down the components of the Portfolios’ net assets. Because Portfolios must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Portfolios’ net assets (assets minus liabilities) by the number of shares outstanding.
4. | Statement of Operations |
This statement details the Portfolios’ income, expenses, gains and losses on securities and currency transactions, and appreciation or depreciation of current Portfolio holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from underlying fund shares and interest earned from interest-bearing securities in the Portfolios.
The next section reports the expenses incurred by the Portfolios, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the increase or decrease in the value of securities held in the Portfolios. The Portfolios realize a gain (or loss) when they sell their position in a particular security. An unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Portfolios during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Portfolio holdings and by gains (or losses) realized during the reporting period.
5. | Statement of Changes in Net Assets |
This statement reports the increase or decrease in the Portfolios’ net assets during the reporting period. Changes
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Explanations of Charts, Tables and
Financial Statements (unaudited) (continued)
Financial Statements (unaudited) (continued)
in the Portfolios’ net assets are attributable to investment operations, dividends, distributions and capital share transactions. This is important to investors because it shows exactly what caused the Portfolios’ net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Portfolios’ investment performance. The Portfolios’ net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends in cash, money is taken out of the Portfolio to pay the distribution. If investors reinvest their dividends, the Portfolios’ net assets will not be affected. If you compare each Portfolio’s “Net Decrease from Dividends and Distributions” to the “Reinvested dividends and distributions,” you will notice that dividend distributions had little effect on each Portfolio’s net assets. This is because the majority of Janus investors reinvest their distributions.
The reinvestment of dividends is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Portfolios through purchases or withdrawals via redemptions. The Portfolios’ net assets will increase and decrease in value as investors purchase and redeem shares from the Portfolios.
6. | Financial Highlights |
This schedule provides a per-share breakdown of the components that affect each Portfolio’s net asset value (“NAV”) for current and past reporting periods. Not only does this table provide you with total return, it also reports total distributions, asset size, expense ratios and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income per share, which comprises dividends and interest income earned on securities held by the Portfolio. Following is the total of gains/(losses), realized and unrealized. Dividends and distributions are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the average annual total return reported the last day of the period.
Also included are the expense ratios, or the percentage of average net assets that were used to cover operating expenses during the period. Expense ratios vary across the Portfolios for a number of reasons, including the differences in management fees, the frequency of dividend payments and the extent of foreign investments, which entail greater transaction costs.
The Portfolios’ expenses may be reduced through expense reduction arrangements. These arrangements may include the use of balance credits or transfer agent fee offsets. The Statement of Operations reflects total expenses before any such offset, the amount of the offset and the net expenses. The expense ratios listed in the Financial Highlights reflect total expenses prior to any expense offset (gross expense ratio) and after the expense offsets (net expense ratio). Both expense ratios reflect expenses after waivers (reimbursements), if applicable.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of a Portfolio during the reporting period. Don’t confuse this ratio with a Portfolio’s yield. The net investment income ratio is not a true measure of a Portfolio’s yield because it doesn’t take into account the dividends distributed to the Portfolio’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in a Portfolio. Portfolio turnover is affected by market conditions, changes in the asset size of a Portfolio, the nature of the Portfolio’s investments, changes in the target allocation and the investment style of the portfolio manager. A 100% rate implies that an amount equal to the value of the entire portfolio is turned over in a year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the portfolio is traded every six months.
46 Janus Smart Portfolios April 30, 2008
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Notes
Janus Smart Portfolios April 30, 2008 47
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Notes
48 Janus Smart Portfolios April 30, 2008
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Notes
Janus Smart Portfolios April 30, 2008 49
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Janus provides access to a wide range of investment disciplines.
Asset Allocation
Janus asset allocation portfolios invest in several underlying mutual funds, rather than individual securities, in an attempt to offer investors an instantly diversified portfolio. Janus Smart Portfolios are unique in their combination of funds that leverage the fundamental research approach of Janus with funds supported by the risk-managed, mathematical investment process of INTECH (a Janus subsidiary).
Growth
Janus growth funds focus on companies believed to be the leaders in their respective industries, with solid management teams, expanding market share, margins and efficiencies.
Core
Janus core funds seek investments in more stable and predictable companies. These funds look for a strategic combination of steady growth and for certain funds, some degree of income.
Risk-Managed
Our risk-managed fund seeks to outperform its index while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH (a Janus subsidiary), this fund uses a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Janus value funds invest in companies they believe are poised for a turnaround or are trading at a significant discount to fair value. The goal is to gain unique insight into a company’s true value and identify and evaluate potential catalysts that may unlock shareholder value.
International & Global
Janus international and global funds seek to leverage Janus’ research capabilities by taking advantage of inefficiencies in foreign markets, where accurate information and analytical insight are often at a premium.
Bond & Money Market
Janus bond funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek maximum current income consistent with stability of capital.
For more information about our funds, go to www.janus.com.
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from www.janus.com. Read it carefully before you invest or send money.
Investments in money market funds are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the money market funds.
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Funds distributed by Janus Distributors LLC (6/08)
C-0307-52 | 111-24-106 06-08 |
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Item 2 — Code of Ethics
Not applicable to semiannual reports.
Item 3 — Audit Committee Financial Expert
Not applicable to semiannual reports.
Item 4 — Principal Accountant Fees and Services
Not applicable to semiannual reports.
Item 5 — Audit Committee of Listed Registrants
Not applicable.
Item 6 — Schedule of Investments
(a) | Please see Schedule of Investments contained in the Reports to Shareholders included under Item 1 of this Form N-CSR. | ||
(b) | Using credible information that is available to the public, the Funds have not divested from any securities of any issuers that conduct or have direct investments in certain business operations in Sudan. |
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Item 7 — Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8 — Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9 — Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 10 — Submission of Matters to a Vote of Security Holders
There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees.
Item 11 — Controls and Procedures
(a) | The Registrant’s Principal Executive Officer and Principal Financial Officer have evaluated the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) within 90 days of this filing and have concluded that the Registrant’s disclosure controls and procedures were effective, as of that date. | ||
(b) | There was no change in the Registrant’s internal control over financial reporting during Registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
Item 12 — Exhibits
(a)(1) | Not applicable because the Registrant has posted its Code of Ethics (as defined in Item 2(b) of Form N-CSR) on its website pursuant to paragraph (f)(2) of Item 2 of Form N-CSR. | ||
(a)(2) | Separate certifications for the Registrant’s Principal Executive Officer and Principal Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached as Ex99.CERT. | ||
(a)(3) | Not applicable to open-end companies. | ||
(b) | A certification for the Registrant’s Principal Executive Officer and Principal Financial Officer, as required by Rule 30a-2(b) under the Investment Company Act of 1940, is attached as Ex99.906CERT. The certification furnished pursuant to this paragraph is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certification is not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates it by reference. |
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Janus Investment Fund
By: | /s/ Robin C. Beery | |||
Robin C. Beery, | ||||
President and Chief Executive Officer of Janus Investment Fund (Principal Executive Officer) |
Date: June 27, 2008
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: | /s/ Robin C. Beery | |||
Robin C. Beery, | ||||
President and Chief Executive Officer of Janus Investment Fund (Principal Executive Officer) |
Date: June 27, 2008
By: | /s/ Jesper Nergaard | |||
Jesper Nergaard, | ||||
Vice President, Chief Financial Officer, Treasurer and Principal Accounting Officer of Janus Investment Fund (Principal Accounting Officer and Principal Financial Officer) |
Date: June 27, 2008