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UNITED STATES
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)
Kelley Abbott Howes, 151 Detroit Street, Denver, Colorado 80206
(Name and address of agent for service)
Registrant’s telephone number, including area code: 303-333-3863
Date of fiscal year end: 10/31
Date of reporting period: 4/30/06
Item 1 - Reports to Shareholders
2006 Semiannual Report
Janus Growth Funds
Growth
Janus Fund
Janus Enterprise Fund
Janus Mercury Fund
Janus Olympus Fund
Janus Orion Fund
Janus Triton Fund
Janus Twenty Fund
Janus Venture Fund
Specialty Growth
Janus Global Life Sciences Fund
Janus Global Technology Fund
Look Inside. . .
• Portfolio manager perspective
• Investment strategy behind your fund
• Fund performance, characteristics and holdings
Table of Contents
Janus Growth Funds
President and CEO Letter to Shareholders | 1 | ||||||
Portfolio Managers' Commentaries and Schedules of Investments | |||||||
Janus Fund | 6 | ||||||
Janus Enterprise Fund | 14 | ||||||
Janus Mercury Fund | 21 | ||||||
Janus Olympus Fund | 28 | ||||||
Janus Orion Fund | 35 | ||||||
Janus Triton Fund | 41 | ||||||
Janus Twenty Fund | 47 | ||||||
Janus Venture Fund | 52 | ||||||
Janus Global Life Sciences Fund | 59 | ||||||
Janus Global Technology Fund | 65 | ||||||
Statements of Assets and Liabilities | 72 | ||||||
Statements of Operations | 74 | ||||||
Statements of Changes in Net Assets | 76 | ||||||
Financial Highlights | 80 | ||||||
Notes to Schedules of Investments and Securities Sold Short | 85 | ||||||
Notes to Financial Statements | 89 | ||||||
Additional Information | 97 | ||||||
Explanations of Charts, Tables and Financial Statements | 101 | ||||||
Shareholder Meeting | 104 | ||||||
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.
CEO's Letter
Gary Black
President and Chief Executive Officer
Dear Shareholders,
Before offering my perspective on the economy, the markets and the progress we've made at Janus during the six months ended April 30, 2006, I'd like to thank you for your continued confidence and investment in Janus' funds. Your unwavering support is the driving force behind our desire to deliver the strong, consistent fund performance that you've come to expect from Janus.
As you'll read on the following pages, our fund managers continued to deliver excellent performance – for the one-year period ended April 30, 2006, 68% of Janus' retail funds ranked within Lipper's top two quartiles based on total returns. For the five years ended April 30, 2006, 57% of our retail funds earned first- or second-quartile Lipper rankings – up from 30% a year ago. Over the past three years, Janus' U.S. equity funds have gained an average of 21% annually, versus a 12% gain for the Russell 1000® Growth Index and a 15% gain for the S&P 500® Index. (See performance and complete ranking figures on pages 3-4).
Staying Focused on Consistent Performance
While we're pleased to report solid performance across different time periods, our goal is to ensure consistency in our investment returns across different market cycles as well. We employ several tools to help us meet this goal, beginning with detailed research processes that help us single out what we feel are the best investments for our funds. The very talented and experienced individuals at the heart of these processes – our research analysts and portfolio managers – are what distinguish Janus from its asset management peers. Additionally, our robust risk management tools and disciplined buy/sell strategies help in our efforts to deliver consistent performance over full market cycles.
...our goal is to ensure consistency in our investment returns across different market cycles...
We recently appointed Chief Investment Officers to oversee our various investment disciplines. Jonathan Coleman and David Decker oversee our U.S. Growth and Core funds, Jason Yee is responsible for our Global and International funds, and Gibson Smith has oversight of our Fixed-Income and Money Market funds. In their respective roles, these individuals serve as player-coaches with the portfolio managers and analysts who work with them and focus on driving performance of the products they oversee.
Combined, we believe these elements of our research process will help us as we strive to deliver strong fund performance in all market environments.
Corporate Profits Remained Strong
On that note, I'd like to summarize the environment we – and other investors – operated in during the past six months. Stronger-than-expected economic data and growing anticipation of a possible conclusion to monetary tightening by the Federal Reserve drove U.S. equity markets higher during the period. Notwithstanding a sharp spike in energy prices in early 2006 and clear signs of a slowdown in the U.S. housing market, corporate profits continued to grow at a healthy clip and consumer spending remained robust. Financial markets observed a smooth transition in leadership at the Federal Reserve Board after Chairman Alan Greenspan's long tenure, and investors appeared to conclude that incoming Chairman Ben Bernanke would pursue a similar course to that of his predecessor, namely, to contain inflation and promote long-term economic growth. Perhaps the biggest risk, in our opinion, is that the Federal Reserve could increase short-term r ates too aggressively to curb potential inflation, which could cause longer-term growth to stall.
Areas of particular strength in the market included economically sensitive sectors such as financial services, industrials and energy, all of which benefited from continued evidence of strong U.S. economic growth. Overseas markets also delivered healthy returns, with Japan's economic recovery reawakening domestic Japanese investors to the Japanese equity market, and rapid industrialization and growing consumer wealth driving significant gains in emerging equity markets like Brazil, China and India.
Greater Diversification Sought by Investors
It was encouraging to see equity markets worldwide climb higher during the period. And yet, if there's one thing that all investors can consistently count on, it's that there is no consistency in the markets. This year's gains could be next year's losses. With this in mind, more and more investors seem to be making a concerted effort to maintain a
Janus Growth Funds April 30, 2006 1
Continued
diversified portfolio. In recognition of this, we launched Janus Smart Portfolios in late December 2005. These Portfolios are geared toward investors who may not have the time to allocate their assets according to their specific goals and risk tolerance.
Janus Smart Portfolios invest in a 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). We believe the unique combination of these two different investment styles, assembled with the view of providing long-term diversification and market opportunity, will be of great benefit to shareholders as they invest toward their goals. And with three different portfolios to choose from – Growth, Moderate and Conservative – investors can choose the level of risk they are willing to take in pursuit of their goals.
A Compelling Case for Growth
In summary, the economic outlook appears positive to us, and we find valuations for U.S. equities attractive. The combination of those two factors continues to make a solid case for growth investing. Although future interest rate increases are becoming less likely, we will continue to closely monitor the actions of the Federal Reserve. Regardless of the macroeconomic climate ahead, we remain dedicated to rewarding your trust and confidence in Janus with strong, consistent fund performance.
Sincerely,
Gary Black
Chief Executive Officer and
Chief Investment Officer
2 Janus Growth Funds April 30, 2006
Lipper Rankings
Lipper Rankings – Based on total return as of 4/30/06 | |||||||||||||||||||||||||||||||||||||||||||||||
ONE YEAR | THREE YEAR | FIVE YEAR | TEN YEAR | SINCE INCEPTION | |||||||||||||||||||||||||||||||||||||||||||
LIPPER CATEGORY | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | |||||||||||||||||||||||||||||||||||||
Janus Investment Funds | |||||||||||||||||||||||||||||||||||||||||||||||
(Inception Date) | |||||||||||||||||||||||||||||||||||||||||||||||
Janus Fund (2/70) | Large-Cap Growth Funds | 43 | 296/698 | 48 | 280/590 | 79 | 374/474 | 44 | 72/165 | 5 | 1/19 | ||||||||||||||||||||||||||||||||||||
Janus Enterprise Fund(1) (9/92) | Mid-Cap Growth Funds | 58 | 324/563 | 30 | 134/461 | 72 | 257/357 | 69 | 88/128 | 40 | 20/49 | ||||||||||||||||||||||||||||||||||||
Janus Mercury Fund(1) (5/93) | Large-Cap Growth Funds | 31 | 210/698 | 9 | 53/590 | 65 | 306/474 | 11 | 18/165 | 2 | 1/84 | ||||||||||||||||||||||||||||||||||||
Janus Olympus Fund(1) (12/95) | Multi-Cap Growth Funds | 44 | 186/423 | 53 | 190/359 | 66 | 188/288 | 27 | 25/95 | 15 | 13/88 | ||||||||||||||||||||||||||||||||||||
Janus Orion Fund (6/00) | Multi-Cap Growth Funds | 3 | 11/423 | 1 | 3/359 | 3 | 8/288 | N/A | N/A | 27 | 61/230 | ||||||||||||||||||||||||||||||||||||
Janus Triton Fund (2/05) | Small-Cap Growth Funds | 12 | 59/533 | N/A | N/A | N/A | N/A | N/A | N/A | 3 | 14/520 | ||||||||||||||||||||||||||||||||||||
Janus Twenty Fund* (4/85) | Large-Cap Growth Funds | 6 | 36/698 | 2 | 6/590 | 12 | 56/474 | 2 | 2/165 | 3 | 1/40 | ||||||||||||||||||||||||||||||||||||
Janus Venture Fund* (4/85) | Small-Cap Growth Funds | 59 | 311/533 | 10 | 45/453 | 20 | 70/363 | 38 | 44/117 | 10 | 1/10 | ||||||||||||||||||||||||||||||||||||
Janus Global Life Sciences Fund (12/98) | Health/Biotechnology Funds | 33 | 57/176 | 25 | 39/161 | 43 | 55/127 | N/A | N/A | 31 | 15/48 | ||||||||||||||||||||||||||||||||||||
Janus Global Technology Fund (12/98) | Science & Technology Funds | 33 | 94/292 | 43 | 113/265 | 58 | 132/230 | N/A | N/A | 23 | 17/76 | ||||||||||||||||||||||||||||||||||||
Janus Balanced Fund(1) (9/92) | Mixed-Asset Target Allocation Moderate Funds | 13 | 49/395 | 52 | 140/271 | 39 | 81/210 | 3 | 2/81 | 4 | 1/27 | ||||||||||||||||||||||||||||||||||||
Janus Contrarian Fund (2/00) | Multi-Cap Core Funds | 1 | 3/834 | 1 | 3/588 | 3 | 11/421 | N/A | N/A | 9 | 29/332 | ||||||||||||||||||||||||||||||||||||
Janus Core Equity Fund(1) (6/96) | Large-Cap Core Funds | 2 | 9/864 | 3 | 20/746 | 3 | 16/618 | N/A | N/A | 2 | 3/248 | ||||||||||||||||||||||||||||||||||||
Janus Growth and Income Fund(1) (5/91) | Large-Cap Core Funds | 5 | 35/864 | 9 | 65/746 | 15 | 90/618 | 3 | 5/240 | 6 | 5/96 | ||||||||||||||||||||||||||||||||||||
Janus Research Fund (2/05) | Multi-Cap Growth Funds | 8 | 31/423 | N/A | N/A | N/A | N/A | N/A | N/A | 7 | 26/410 | ||||||||||||||||||||||||||||||||||||
INTECH Risk-Managed Stock Fund (2/03) | Multi-Cap Core Funds | 58 | 483/834 | 22 | 129/588 | N/A | N/A | N/A | N/A | 26 | 150/586 | ||||||||||||||||||||||||||||||||||||
Janus Mid Cap Value Fund - Inv(1)(2) (8/98) | Mid-Cap Value Funds | 75 | 201/267 | 53 | 114/216 | 35 | 51/146 | N/A | N/A | 5 | 4/81 | ||||||||||||||||||||||||||||||||||||
Janus Small Cap Value Fund - Inv*(2) (10/87) | Small-Cap Core Funds | 97 | 612/633 | 91 | 456/504 | 65 | 243/373 | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||||
Janus Federal Tax-Exempt Fund (5/93) | General Municipal Debt Funds | 60 | 155/260 | 89 | 221/249 | 71 | 156/221 | 86 | 122/142 | 83 | 64/77 | ||||||||||||||||||||||||||||||||||||
Janus Flexible Bond Fund(1) (7/87) | Intermediate Investment Grade Debt Funds | 37 | 172/473 | 36 | 146/406 | 24 | 74/320 | 24 | 35/147 | 24 | 6/25 | ||||||||||||||||||||||||||||||||||||
Janus High-Yield Fund (12/95) | High Current Yield Funds | 38 | 164/439 | 72 | 276/385 | 55 | 169/311 | 9 | 10/111 | 3 | 3/104 | ||||||||||||||||||||||||||||||||||||
Janus Short-Term Bond Fund(1) (9/92) | Short Investment Grade Debt Funds | 30 | 68/228 | 21 | 38/181 | 49 | 63/129 | 20 | 13/66 | 43 | 11/25 | ||||||||||||||||||||||||||||||||||||
Janus Global Opportunities Fund(1) (6/01) | Global Funds | 100 | 360/362 | 54 | 154/286 | N/A | N/A | N/A | N/A | 23 | 50/224 | ||||||||||||||||||||||||||||||||||||
Janus Overseas Fund(1) (5/94) | International Funds | 1 | 2/910 | 1 | 2/770 | 19 | 114/599 | 4 | 8/230 | 2 | 2/120 | ||||||||||||||||||||||||||||||||||||
Janus Worldwide Fund(1) (5/91) | Global Funds | 94 | 339/362 | 98 | 279/286 | 99 | 217/220 | 68 | 56/82 | 28 | 5/17 |
(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.
Data presented represents past performance, which is no guarantee of future results.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
Janus Growth Funds April 30, 2006 3
Performance
Average Annual Total Return for the periods ended 4/30/06 | |||||||||||||||||||||||
ONE YEAR | THREE YEAR | FIVE YEAR | 10 YEAR | SINCE INCEPTION | |||||||||||||||||||
Fund/Index | |||||||||||||||||||||||
(Inception Date) | |||||||||||||||||||||||
Janus Fund (2/70) | 17.28 | % | 11.85 | % | (2.62 | )% | 6.67 | % | 13.86 | % | |||||||||||||
Janus Contrarian Fund(1)(2)(3) (2/00) | 38.81 | % | 31.63 | % | 10.68 | % | N/A | 9.63 | % | ||||||||||||||
Janus Core Equity Fund(3) (6/96) | 31.00 | % | 19.14 | % | 5.74 | % | N/A | 13.43 | % | ||||||||||||||
Janus Enterprise Fund (9/92) | 29.21 | % | 22.74 | % | 1.87 | % | 6.69 | % | 11.63 | % | |||||||||||||
Janus Growth and Income Fund (5/91) | 25.82 | % | 16.82 | % | 3.44 | % | 12.02 | % | 13.80 | % | |||||||||||||
Janus Mercury Fund (5/93) | 19.00 | % | 15.42 | % | (1.74 | )% | 8.56 | % | 12.70 | % | |||||||||||||
Janus Mid Cap Value Fund - Investor Shares(3)(4) (8/98) | 20.64 | % | 23.27 | % | 12.45 | % | N/A | 17.97 | % | ||||||||||||||
Janus Olympus Fund (12/95) | 26.44 | % | 16.83 | % | 0.45 | % | 9.78 | % | 11.77 | % | |||||||||||||
Janus Orion Fund(1)(5)(6)(7) (6/00) | 41.50 | % | 27.95 | % | 10.72 | % | N/A | (0.73 | )% | ||||||||||||||
Janus Small Cap Value Fund - Investor Shares* (10/87) | 20.30 | % | 20.76 | % | 10.80 | % | 15.60 | % | N/A | ||||||||||||||
Janus Twenty Fund*(4)(6) (4/85) | 24.20 | % | 19.02 | % | 2.05 | % | 10.70 | % | 13.48 | % | |||||||||||||
Janus Venture Fund*(8) (4/85) | 32.58 | % | 27.53 | % | 9.14 | % | 9.29 | % | 13.88 | % | |||||||||||||
INTECH Risk-Managed Stock Fund(3) (2/03) | 17.81 | % | 19.16 | % | N/A | N/A | 20.50 | % | |||||||||||||||
S&P 500® Index | 15.42 | % | 14.68 | % | 2.70 | % | 8.94 | % | N/A | ||||||||||||||
Russell 1000® Growth Index | 15.18 | % | 12.05 | % | (0.76 | )% | 6.21 | % | N/A |
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 average performance of Janus' U.S. equity funds over the past three years was calculated using the three-year total returns of the 13 funds contained in the performance chart above. The 13 funds reflected in the performance chart above are those which Janus categorizes as U.S. equity funds and which have performance histories of three or more years.
*Closed to new investors
(1)This Fund may have significant exposure to emerging markets. In general, emerging market investments have historically been subject to significant gains and/or losses. As such, the Fund's returns and NAV may be subject to such volatility.
(2)The Fund has experienced significant gains due, in part, to its investments in India. 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 India.
(3)The Fund will invest at least 80% of its net assets in the type of securities described by its name.
(4)Due to certain investment strategies, the Fund may have an increased position in cash.
(5)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.
(6)Returns have sustained significant gains due to market volatility in the healthcare sector.
(7)Returns have sustained significant gains due to market volatility in the financials sector.
(8)This Fund has been significantly impacted, either positively or negatively, by investing in initial public offerings (IPOs).
Total return includes reinvestment of dividends, distributions and capital gains.
A fund's performance may be affected by risks that include those associated with non-diversification, investments in foreign securities and emerging markets, non-investment grade debt securities, undervalued or overlooked companies, companies with relatively small market capitalizations and investments in specific industries or countries. Please see a Janus prospectus or janus.com for more information about fund holdings and details.
The proprietary mathematical process used by Enhanced Investment Technologies LLC ("INTECH") may not achieve the desired results. Since the portfolio is regularly 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.
There is no assurance that the investment process will consistently lead to successful investing.
Returns shown for Janus Mid Cap Value Fund prior to 4/21/03 are those of Berger Mid Cap Value Fund.
Returns shown for Janus Small Cap Value Fund prior to 4/21/03 are those of Berger Small Cap Value Fund.
Effective 2/1/06, Blaine Rollins is no longer the portfolio manager of Janus Fund, and David Corkins is now the Fund manager.
Effective 2/1/06, David Corkins is no longer the portfolio manager of Janus Mercury Fund. A research team now selects the investments for Janus Mercury Fund led by the Director of Research, Jim Goff.
Effective 2/28/06, Janus Risk-Managed Stock Fund changed its name to INTECH Risk-Managed Stock Fund.
Janus Capital Group Inc. has a 30% ownership stake in the investment advisory business of Perkins, Wolf, McDonnell and Company, LLC.
INTECH is a subsidiary of Janus Capital Group Inc.
A Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
The S&P 500® Index is the Standard & Poor's composite index of 500 stocks, a widely recognized, unmanaged index of common stock prices.
The Russell 1000® Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.
4 Janus Growth Funds April 30, 2006
Useful Information About Your Fund Report
Portfolio Manager Commentaries
The portfolio manager commentaries in this report include valuable insight from the portfolio 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 portfolio managers in their commentaries are just that: opinions. They are a reflection of their best judgment at the time this report was compiled, which was April 30, 2006. As the investing environment changes, so could their 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 Portfolio Manager 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, 2005 to April 30, 2006.
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 the 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, taxes and extraordinary expenses, to certain limits until at least March 1, 2007. 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 (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, 2006 5
Janus Fund (unaudited)
Ticker: JANSX
Fund Snapshot
For more than 35 years, this traditional growth fund has exemplified Janus' research and stock-picking abilities.
David Corkins
portfolio manager
Performance Overview
I very much appreciate the opportunity to speak directly with you for the first time since taking over management of Janus Fund effective February 1, 2006. My hope with this letter is to review the Fund's performance over the last 6 months, further explain our investment process so that all shareholders understand what we do, and finally, share our outlook for the Fund going forward.
Performance Review
Our goal with the Fund is superior long-term returns for shareholders. What does that mean in practice? These potential long-term returns start with positive absolute performance and follow with consistent execution in up and down markets. For the six months ending April 30, 2006, Janus Fund returned 10.51%. By comparison, our primary benchmark the Russell 1000® Growth Index returned 7.06% and our secondary benchmark the S&P 500® Index returned 9.64%.
Our Investment Process
Some of the best advice I ever received about managing investments was succinct: "Know your companies." We believe that understanding the leverage points in a company's business model allows you to properly assess risk as well as calculate the free cash flow and returns on invested capital that drive value creation. Knowing your companies also allows you to potentially take advantage of the inherent volatility in the market. You are more likely to be able to buy when others are fearful and sell when others are greedy. Most importantly, knowing my companies helps me invest with conviction (more concentrated and with lower turnover) and hold on for the long-run.
Likewise, I believe it is imperative that investors in Janus Fund understand our investment process and strategy. I believe in the classic Janus investment style that I learned from previous portfolio managers, the most influential being Tom Bailey, Jim Craig, Tom Marsico and Helen Young Hayes. For me, this style means fundamental, grass-roots growth investing which is a combination of qualitative and quantitative analysis. The quantitative aspect means in-depth, detailed, financial modeling of a company to understand the leverage points in the business, the free cash flow, and the returns on capital. This model allows me to move onto the qualitative focus, which is using the financial information to speak with management, competitors and suppliers to gain a more complete understanding of the company. The next piece of the investment mosaic is to understand the valuation , risk and reward for this investment given the current price of the security and the macro-economic factors impacting it. Finally, the last part of the puzzle is to consider overall portfolio construction, risk and return in addition to the sum of each of the individual securities.
What I've learned over the last 10 years managing money is that this investment method must be iterative – it's a never-ending process of building a deeper and deeper knowledge base about a company. The better your model, the more information you can extract; the more information you get the better your model. Like most businesses, at the end of the day, the harder you work, the better your results.
I also believe it is imperative to think like a partner – I would like my fellow investors to have a good appreciation for their manager's investment in the Fund, as well as how I am compensated for managing the Fund. In that vein, I have made a 7-figure investment in the Fund because I believe in the team and our investment process. I am eating our cooking. In terms of compensation, I am strongly incented with pay for performance: my incentive pay is primarily based on how well the Fund performs relative to its peers over a three-year basis, as well as whether the return is positive on an absolute basis.
What Went Right?
An eclectic group of securities performed quite strongly, and the Fund performed well within the pharmaceutical, semiconductor, financial and capital goods sectors. Since our primary focus is on individual company selection, rather than large sector trading bets, one measure of health for the Fund is whether the winners were from diverse areas of the economy.
The largest single contributor to the Fund's results was Boeing. Boeing is an excellent example of what we look for in a stock: strong competitive positioning, attractive industry dynamics, improving free cash flow and returns on invested capital and management focused on shareholder value. As the leading American aerospace manufacturer, Boeing has benefited from a
6 Janus Growth Funds April 30, 2006
(unaudited)
continued expansion of the aerospace cycle as demand from emerging markets, like China, India and the Middle East, accelerates for fuel-efficient planes given high commodity input costs. Low-cost carriers have also started to spend on next generation planes given the change in domestic networks from hub-and-spoke to point-to-point. Legacy carriers such as United are emerging from bankruptcy and we believe will likely extend the cycle towards 2010 as they pull in orders to remain competitive with the lower-cost carriers. At the same time, a major competitor Airbus has stumbled in next generation product design with a poorly received A350. Finally, we believe a new CEO at Boeing will likely bring a much needed focus on costs, production and return on capital.
We have done extensive research on Boeing and the aerospace industry. We've met with management at various levels of the company as well as interviewed numerous competitors and suppliers, both domestically and overseas. Primary analyst Jeremiah Buckley and the rest of the team continue to build our financial model of the company and gain a deeper knowledge base of the industry. One area of caution remains the defense business, which we believe is seeing a possible slowdown in orders as the U.S. defense cycle wanes from previous years' strength.
Other contributors to the Fund's strong performance were financial companies such as JP Morgan Chase, which is beginning to show the fruits of its waste-cutting and renewed focus on revenue growth and returns. Analyst Gabe Bodhi has done excellent work on this company, which holds a particular interest for me since I worked at its predecessor for seven years before I joined Janus. We hope new leadership at the company will drive returns on capital and free cash flow on a sustainable basis.
I believe our healthcare team does exceptional fundamental research under the aegis of Tom Malley. Analyst Tony Yao helped lead the effort on Celgene which gained over 50% for shareholders due to strong clinical trials for Revlimid. Final product launch for the drug implies long-term success in multiple myeloma (a bone marrow-based cancer) and myelodysplastic syndromes (MDS – a blood-borne cancer) indications, as well as possible success in chronic lymphocytic leukemia (CLL), another blood cancer. Celgene also has a deep pipeline behind current products in the areas of sickle-cell and inflammatory disease.
What Went Wrong?
It's usually more productive to focus on what went wrong rather than over-emphasizing those areas and stocks that performed well. Learning from one's mistakes is a key to longevity in this business.
Two sectors in particular caused relative weakness in the Fund's performance: healthcare services and media. The biggest underperformers in these areas were UnitedHealth Group and Comcast. We have cut our position in UnitedHealth Group meaningfully and sold our position in Comcast.
UnitedHealth Group has been a long-time holding in the Fund. The company is the leading HMO and specialty healthcare services provider in the United States. Operational tenets run deep within the company, pricing and margins remain attractive, demographics continue to drive demand and free cash flow generation is strong. Emerging specialty businesses diversify the business mix from more cyclical commercial underwriting trends. So with all those competitive strengths, what caused us to meaningfully reduce our position in the name? First, the company's outperformance caused its valuation to rise close to our fair value and meaningfully shifted the risk/reward profile; second, industry dynamics have resulted in an excess of capital and nascent signs of price competition; and third, serious questions have arisen regarding options grant timing. We realized profits in the name and reinvested the proceeds in other stocks with more attractive risk/r eward prospects.
Comcast was eliminated completely. Another long-time holding of the Fund, Comcast was sold as the company's business model continues to become more capital intensive and competitive threats from phone and satellite providers rise. Although cable systems offer an excellent gateway into the home, we believe the transition of the media business towards digital and Internet protocols (IP) threatens the primacy of the cable network model and implies lower returns in the future.
We are looking diligently in the media sector for attractive businesses as many of these leading franchises have been sold by disappointed investors looking for growth. Although valuations are becoming much more attractive, many of the high-margin business models are under assault from the move from analog to digital distribution as well as the emergence of the Internet as a media delivery vehicle. We have yet to make significant new investments in the sector.
We also remain cautious on the consumer discretionary areas of the economy in the short-run as a combination of rising energy prices, increased debt payments driven by interest rate increases, and higher healthcare costs squeezes the U.S. consumer. In the longer-term, we believe these areas are ripe for investment as the cyclical pressures ease.
Janus Growth Funds April 30, 2006 7
Janus Fund (unaudited)
Looking Forward
Our outlook remains cautious. Markets have performed strongly year-to-date due to a combination of very strong economic data as well as the anticipation of a conclusion to Federal Reserve monetary tightening. Small-cap stocks and emerging markets have led the way with strong performance coming in just a few months.
Yet clearly the market is in transition after three years of strong outperformance. This transition is driven by higher interest rates and a weaker U.S. dollar. We're cautiously watching several signs to better understand how this transition plays out. One area of focus is monetary liquidity and the U.S. dollar. Money supply growth has been slowing sequentially, Fed Repos have slowed dramatically, yet money flow into equities is quite strong and foreigners have been the driving force. Foreigners were huge beneficiaries of the dollar index, which rallied strongly throughout 2005. In 2006, however, the dollar index is beginning to roll over and the question remains how much of a rate increase or non-inflationary growth is necessary to keep foreigners in our currency and equity market.
Within Janus Fund, our response in general has been to transition from business models that are dependent on an economic tailwind to stronger franchises that have more control over their own sales and margins regardless of macro-economic conditions. In addition, we are cautiously watching the yield curve and U.S. dollar in anticipation of further transition as the economy continues to move forward.
In sum, I am honored with the opportunity to manage Janus Fund. My investment and incentives are aligned with yours. As a former English major, I can't finish this letter without a favorite quote from an old media hand like Samuel Goldwyn: "The harder I work, the luckier I get." It gives me comfort to know the entire investment team at Janus is working very hard every day to find attractive opportunities to grow our principal.
Thank you for your investment in Janus Fund.
Janus Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Boeing Co. Commercial jet aircraft company - U.S. | 0.93 | % | |||||
JP Morgan Chase & Co. Financial products and services provider - U.S. | 0.46 | % | |||||
Nokia Oyj (ADR) Telecommunications company - Finland | 0.44 | % | |||||
Companhia Vale do Rio Doce (ADR) Iron ore producer/seller - Brazil | 0.44 | % | |||||
Schlumberger, Ltd. (U.S. Shares) Oil services company - U.S. | 0.42 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
UnitedHealth Group, Inc. Organized health systems company - U.S. | (0.42 | %) | |||||
Yahoo!, Inc. Global Internet media company - U.S. | (0.37 | %) | |||||
Alcon, Inc. (U.S. Shares) Eye care company - U.S. | (0.32 | %) | |||||
Juniper Networks, Inc. Internet infrastructure solutions provider - U.S. | (0.26 | %) | |||||
Caremark Rx, Inc. Pharmaceutical services provider - U.S. | (0.23 | %) |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Capital Goods | 1.97 | % | 9.84 | % | 11.43 | % | |||||||||
Diversified Financials | 1.52 | % | 6.47 | % | 3.65 | % | |||||||||
Materials | 1.33 | % | 5.42 | % | 2.06 | % | |||||||||
Energy | 1.28 | % | 5.69 | % | 3.69 | % | |||||||||
Technology Hardware and Equipment | 1.20 | % | 8.81 | % | 10.64 | % |
5 Lowest Contributors/Detractors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Healthcare Equipment & Services | (1.33 | %) | 10.91 | % | 9.05 | % | |||||||||
Food & Staples Retailing | (0.19 | %) | 2.07 | % | 3.47 | % | |||||||||
Media | (0.10 | %) | 0.94 | % | 3.03 | % | |||||||||
Food, Beverage & Tobacco | (0.01 | %) | 1.65 | % | 4.48 | % | |||||||||
Commercial Services & Supplies | 0.00 | % | 0.00 | % | 1.03 | % |
8 Janus Growth Funds April 30, 2006
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2006 |
Boeing Co. Aerospace and Defense | 3.3 | % | |||||
Procter & Gamble Co. Cosmetics and Toiletries | 3.1 | % | |||||
JP Morgan Chase & Co. Finance - Investment Bankers/Brokers | 2.8 | % | |||||
Yahoo!, Inc. Web Portals/Internet Service Providers | 2.7 | % | |||||
General Electric Co. Diversified Operations | 2.5 | % | |||||
14.4 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2006 |
Emerging markets comprised 3.7% of total net assets.
5 Largest Country Allocations – (% of Investment Securities)
As of April 30, 2006 | As of October 31, 2005 | ||||||
![]() | ![]() | ||||||
Janus Growth Funds April 30, 2006 9
Janus Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | |||||||||||||||||||
Janus Fund | 10.51 | % | 17.28 | % | (2.62 | )% | 6.67 | % | 13.86 | % | |||||||||||||
Russell 1000® Growth Index | 7.06 | % | 15.18 | % | (0.76 | )% | 6.21 | % | 11.96 | %** | |||||||||||||
S&P 500® Index | 9.64 | % | 15.42 | % | 2.70 | % | 8.94 | % | 11.41 | % | |||||||||||||
Lipper Quartile | N/A | 2 | nd | 4 | th | 2 | nd | 1 | st | ||||||||||||||
Lipper Ranking - based on total return for Large-Cap Growth Funds | N/A*** | 296/698 | 374/474 | 72/165 | 1/19 |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes 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.
*The Fund's inception date – February 5, 1970
**The Russell 1000® Growth Index's since inception returns calculated from December 31, 1978
***The Fund's fiscal year-to-date Lipper ranking is not available.
See "Explanations of Charts, Tables and Financial Statements."
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
Effective 2/1/06, Blaine Rollins is no longer the portfolio manager of Janus Fund, and David Corkins is now the Fund manager.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,105.10 | $ | 4.75 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.28 | $ | 4.56 |
*Expenses are equal to the annualized expense ratio of 0.91%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
10 Janus Growth Funds April 30, 2006
Janus Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Common Stock - 98.0% | |||||||||||
Aerospace and Defense - 4.7% | |||||||||||
5,401,628 | BAE Systems PLC** | $ | 41,124,397 | ||||||||
4,658,990 | Boeing Co. | 388,792,715 | |||||||||
1,494,360 | Lockheed Martin Corp. | 113,421,924 | |||||||||
543,339,036 | |||||||||||
Agricultural Chemicals - 1.8% | |||||||||||
1,386,690 | Monsanto Co. | 115,649,946 | |||||||||
648,568 | Syngenta A.G.* | 90,471,105 | |||||||||
206,121,051 | |||||||||||
Apparel Manufacturers - 0.5% | |||||||||||
1,617,560 | Coach, Inc.* | 53,411,831 | |||||||||
Applications Software - 1.9% | |||||||||||
9,041,305 | Microsoft Corp. | 218,347,516 | |||||||||
Automotive - Cars and Light Trucks - 1.5% | |||||||||||
2,375,506 | BMW A.G.**,# | 129,318,586 | |||||||||
3,368,400 | Nissan Motor Company, Ltd.** | 44,284,853 | |||||||||
173,603,439 | |||||||||||
Automotive - Truck Parts and Equipment - Original - 0.1% | |||||||||||
694,895 | Lear Corp.# | 16,385,624 | |||||||||
Beverages - Non-Alcoholic - 0.8% | |||||||||||
1,549,975 | PepsiCo, Inc. | 90,270,544 | |||||||||
Broadcast Services and Programming - 0.5% | |||||||||||
7,548,271 | Liberty Media Corp. - Class A* | 63,028,063 | |||||||||
Building - Residential and Commercial - 0.3% | |||||||||||
51,365 | NVR, Inc.*,# | 38,780,575 | |||||||||
Building and Construction Products - Miscellaneous - 0.3% | |||||||||||
1,172,145 | Masco Corp. | 37,391,426 | |||||||||
Building Products - Cement and Aggregate - 0.6% | |||||||||||
1,093,265 | Cemex S.A. de C.V. (ADR)# | 73,817,253 | |||||||||
Casino Hotels - 0.7% | |||||||||||
1,053,425 | Harrah's Entertainment, Inc. | 86,001,617 | |||||||||
Cellular Telecommunications - 0.7% | |||||||||||
2,077,100 | America Movil S.A. de C.V. - Series L (ADR) | 76,665,761 | |||||||||
Chemicals - Diversified - 0.5% | |||||||||||
1,068,600 | Shin-Etsu Chemical Company, Ltd.** | 61,751,969 | |||||||||
Commercial Banks - 0.6% | |||||||||||
8,504 | Mizuho Financial Group, Inc.** | 72,519,071 | |||||||||
Commercial Services - Finance - 1.3% | |||||||||||
893,515 | Moody's Corp. | 55,406,865 | |||||||||
2,408,627 | Paychex, Inc. | 97,284,445 | |||||||||
152,691,310 | |||||||||||
Computers - 2.1% | |||||||||||
2,061,165 | Apple Computer, Inc.* | 145,085,405 | |||||||||
1,309,440 | Research In Motion, Ltd. (U.S. Shares)* | 100,342,387 | |||||||||
245,427,792 | |||||||||||
Computers - Memory Devices - 2.1% | |||||||||||
13,063,415 | EMC Corp.* | 176,486,737 | |||||||||
1,016,710 | SanDisk Corp.* | 64,896,599 | |||||||||
241,383,336 | |||||||||||
Containers - Metal and Glass - 0.6% | |||||||||||
1,596,965 | Ball Corp. | 63,846,661 |
Shares or Principal Amount | Value | ||||||||||
Cosmetics and Toiletries - 3.1% | |||||||||||
6,249,985 | Procter & Gamble Co. | $ | 363,811,627 | ||||||||
Dental Supplies and Equipment - 0.5% | |||||||||||
1,886,277 | Patterson Companies, Inc.*,# | 61,454,905 | |||||||||
Distribution/Wholesale - 0.5% | |||||||||||
7,139,500 | Esprit Holdings, Ltd. | 56,999,607 | |||||||||
Diversified Minerals - 1.0% | |||||||||||
2,258,405 | Companhia Vale do Rio Doce (ADR) | 116,353,026 | |||||||||
Diversified Operations - 2.5% | |||||||||||
8,492,190 | General Electric Co. | 293,744,852 | |||||||||
E-Commerce/Services - 1.5% | |||||||||||
2,214,603 | eBay, Inc.* | 76,204,489 | |||||||||
3,356,212 | IAC/InterActiveCorp* | 96,893,841 | |||||||||
173,098,330 | |||||||||||
Electric - Generation - 0.5% | |||||||||||
3,510,260 | AES Corp.* | 59,569,112 | |||||||||
Electric Products - Miscellaneous - 0.6% | |||||||||||
766,410 | Emerson Electric Co. | 65,106,530 | |||||||||
Electronic Components - Semiconductors - 3.8% | |||||||||||
6,626,115 | Advanced Micro Devices, Inc.* | 214,354,820 | |||||||||
6,601,680 | Texas Instruments, Inc. | 229,144,312 | |||||||||
443,499,132 | |||||||||||
Electronic Forms - 0.8% | |||||||||||
2,421,850 | Adobe Systems, Inc.* | 94,936,520 | |||||||||
Enterprise Software/Services - 2.3% | |||||||||||
2,238,595 | CA, Inc. | 56,770,769 | |||||||||
6,886,240 | Oracle Corp.* | 100,470,242 | |||||||||
2,069,110 | SAP A.G. (ADR)** | 113,035,479 | |||||||||
270,276,490 | |||||||||||
Entertainment Software - 1.6% | |||||||||||
3,255,821 | Electronic Arts, Inc.* | 184,930,633 | |||||||||
Finance - Credit Card - 1.6% | |||||||||||
2,210,720 | American Express Co. | 118,958,844 | |||||||||
1,167,700 | Credit Saison Company, Ltd.** | 61,223,106 | |||||||||
180,181,950 | |||||||||||
Finance - Investment Bankers/Brokers - 6.2% | |||||||||||
7,197,950 | JP Morgan Chase & Co. | 326,642,971 | |||||||||
1,759,205 | Merrill Lynch & Company, Inc. | 134,156,973 | |||||||||
2,449,000 | Mitsubishi UFJ Securities Company, Ltd.** | 38,585,219 | |||||||||
1,060,786 | UBS A.G.# | 125,734,190 | |||||||||
823,125 | UBS A.G. (ADR) | 96,182,156 | |||||||||
721,301,509 | |||||||||||
Finance - Mortgage Loan Banker - 1.1% | |||||||||||
2,474,885 | Fannie Mae | 125,229,181 | |||||||||
Finance - Other Services - 0.5% | |||||||||||
137,307 | Chicago Mercantile Exchange Holdings, Inc.# | 62,886,606 | |||||||||
Food - Dairy Products - 0.7% | |||||||||||
2,051,140 | Dean Foods Co.* | 81,245,655 | |||||||||
Food - Retail - 1.0% | |||||||||||
1,843,510 | Whole Foods Market, Inc. | 113,154,644 | |||||||||
Food - Wholesale/Distribution - 0.5% | |||||||||||
2,048,465 | Sysco Corp. | 61,228,619 | |||||||||
Independent Power Producer - 0.5% | |||||||||||
1,312,855 | NRG Energy, Inc.* | 62,478,769 |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2006 11
Janus Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Insurance Brokers - 0.5% | |||||||||||
1,928,360 | Marsh & McLennan Companies, Inc. | $ | 59,142,801 | ||||||||
Internet Infrastructure Software - 0.4% | |||||||||||
1,429,260 | Akamai Technologies, Inc.*,# | 48,151,769 | |||||||||
Machinery - Construction and Mining - 0.3% | |||||||||||
434,950 | Joy Global, Inc. | 28,571,866 | |||||||||
Medical - Biomedical and Genetic - 2.3% | �� | ||||||||||
1,463,595 | Amgen, Inc.* | 99,085,382 | |||||||||
2,783,120 | Celgene Corp.* | 117,336,339 | |||||||||
646,288 | Genentech, Inc.* | 51,515,616 | |||||||||
267,937,337 | |||||||||||
Medical - Drugs - 5.0% | |||||||||||
2,834,040 | Abbott Laboratories | 121,126,870 | |||||||||
5,398,875 | Merck & Company, Inc. | 185,829,277 | |||||||||
1,786,843 | Roche Holding A.G.# | 274,754,845 | |||||||||
581,710,992 | |||||||||||
Medical - Generic Drugs - 1.1% | |||||||||||
3,143,006 | Teva Pharmaceutical Industries, Ltd. (ADR)# | 127,291,743 | |||||||||
Medical - HMO - 2.8% | |||||||||||
638,063 | Aetna, Inc. | 24,565,426 | |||||||||
3,616,950 | Coventry Health Care, Inc.* | 179,653,906 | |||||||||
2,424,730 | UnitedHealth Group, Inc. | 120,606,070 | |||||||||
324,825,402 | |||||||||||
Medical - Wholesale Drug Distributors - 1.0% | |||||||||||
1,732,795 | Cardinal Health, Inc. | 116,703,743 | |||||||||
Medical Instruments - 1.2% | |||||||||||
3,732,975 | Boston Scientific Corp.* | 86,754,339 | |||||||||
425,575 | Intuitive Surgical, Inc.* | 54,048,025 | |||||||||
140,802,364 | |||||||||||
Medical Products - 0.5% | |||||||||||
1,031,070 | Varian Medical Systems, Inc.*,# | 54,007,447 | |||||||||
Metal Processors and Fabricators - 1.2% | |||||||||||
2,269,510 | Precision Castparts Corp. | 142,933,740 | |||||||||
Networking Products - 0.8% | |||||||||||
4,616,155 | Cisco Systems, Inc.* | 96,708,447 | |||||||||
Oil - Field Services - 2.5% | |||||||||||
2,093,520 | Halliburton Co. | 163,608,588 | |||||||||
1,783,380 | Schlumberger, Ltd. (U.S. Shares)**,# | 123,302,893 | |||||||||
286,911,481 | |||||||||||
Oil Companies - Exploration and Production - 1.9% | |||||||||||
943,615 | Apache Corp. | 67,034,410 | |||||||||
1,452,895 | EnCana Corp. (U.S. Shares)# | 72,717,395 | |||||||||
1,128,900 | EOG Resources, Inc.# | 79,282,646 | |||||||||
219,034,451 | |||||||||||
Oil Companies - Integrated - 2.5% | |||||||||||
407,740 | Amerada Hess Corp. | 58,416,910 | |||||||||
3,761,455 | Exxon Mobil Corp. | 237,272,581 | |||||||||
295,689,491 | |||||||||||
Oil Refining and Marketing - 0.3% | |||||||||||
451,895 | Valero Energy Corp. | 29,255,682 | |||||||||
Optical Supplies - 0.8% | |||||||||||
854,800 | Alcon, Inc. (U.S. Shares) | 86,941,708 | |||||||||
Pharmacy Services - 1.1% | |||||||||||
2,683,925 | Caremark Rx, Inc. | 122,252,784 |
Shares or Principal Amount | Value | ||||||||||
Real Estate Management/Services - 0.4% | |||||||||||
2,020,000 | Mitsubishi Estate Company, Ltd.** | $ | 44,173,363 | ||||||||
Reinsurance - 0.7% | |||||||||||
27,981 | Berkshire Hathaway, Inc. - Class B* | 82,599,912 | |||||||||
Retail - Apparel and Shoe - 1.2% | |||||||||||
2,171,841 | Industria de Diseno Textil S.A.** | 88,365,301 | |||||||||
1,302,815 | Nordstrom, Inc. | 49,936,899 | |||||||||
138,302,200 | |||||||||||
Retail - Building Products - 0.7% | |||||||||||
1,302,775 | Lowe's Companies, Inc. | 82,139,964 | |||||||||
Retail - Office Supplies - 1.3% | |||||||||||
5,628,642 | Staples, Inc. | 148,652,435 | |||||||||
Savings/Loan/Thrifts - 0.3% | |||||||||||
2,111,534 | NewAlliance Bancshares, Inc.# | 30,490,551 | |||||||||
Semiconductor Components/Integrated Circuits - 0.5% | |||||||||||
967,845 | Marvell Technology Group, Ltd.* | 55,254,271 | |||||||||
Soap and Cleaning Preparations - 0.9% | |||||||||||
2,837,113 | Reckitt Benckiser PLC** | 103,420,783 | |||||||||
Steel - Producers - 0.3% | |||||||||||
2,509,858 | Tata Steel, Ltd. | 35,448,251 | |||||||||
Telecommunication Services - 0.4% | |||||||||||
1,432,795 | NeuStar, Inc. - Class A* | 50,291,105 | |||||||||
Telephone - Integrated - 0.4% | |||||||||||
8,382,820 | Level 3 Communications, Inc.*,# | 45,267,228 | |||||||||
Television - 0.2% | |||||||||||
751,618 | Univision Communications, Inc. - Class A*,# | 26,825,246 | |||||||||
Therapeutics - 1.7% | |||||||||||
1,603,410 | Amylin Pharmaceuticals, Inc.*,# | 69,828,506 | |||||||||
2,287,100 | Gilead Sciences, Inc.* | 131,508,250 | |||||||||
201,336,756 | |||||||||||
Transportation - Railroad - 1.3% | |||||||||||
1,923,680 | Canadian National Railway Co. (U.S. Shares) | 86,392,468 | |||||||||
667,665 | Union Pacific Corp. | 60,897,725 | |||||||||
147,290,193 | |||||||||||
Transportation - Services - 2.1% | |||||||||||
2,532,595 | C.H. Robinson Worldwide, Inc. | 112,320,588 | |||||||||
1,559,300 | United Parcel Service, Inc. - Class B | 126,412,451 | |||||||||
238,733,039 | |||||||||||
Web Portals/Internet Service Providers - 3.7% | |||||||||||
303,565 | Google, Inc. - Class A* | 126,871,956 | |||||||||
9,409,395 | Yahoo!, Inc.* | 308,439,968 | |||||||||
435,311,924 | |||||||||||
Wireless Equipment - 3.3% | |||||||||||
2,381,030 | Crown Castle International Corp.* | 80,121,660 | |||||||||
6,938,865 | Nokia Oyj (ADR)** | 157,234,680 | |||||||||
2,938,305 | QUALCOMM, Inc. | 150,852,579 | |||||||||
388,208,919 | |||||||||||
Total Common Stock (cost $9,245,435,979) | 11,388,890,960 | ||||||||||
Money Markets - 1.6% | |||||||||||
165,000,000 | Janus Institutional Cash Reserves Fund 4.83% | 165,000,000 | |||||||||
25,000,000 | Janus Money Market Fund 4.77% | 25,000,000 | |||||||||
Total Money Markets (cost $190,000,000) | 190,000,000 |
See Notes to Schedules of Investments and Financial Statements.
12 Janus Growth Funds April 30, 2006
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Other Securities - 4.5% | |||||||||||
522,862,639 | State Street Navigator Securities Lending Prime Portfolio† (cost $522,862,639) | $ | 522,862,639 | ||||||||
Time Deposit - 0.1% | |||||||||||
$ | 11,900,000 | ING Financial, ETD 4.86%, 5/1/06 (cost $11,900,000) | 11,900,000 | ||||||||
Total Investments (total cost $9,970,198,618) – 104.2% | 12,113,653,599 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (4.2)% | (488,270,828 | ) | |||||||||
Net Assets – 100% | $ | 11,625,382,771 |
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Bermuda | $ | 112,253,878 | 0.9 | % | |||||||
Brazil | 116,353,026 | 1.0 | % | ||||||||
Canada | 259,452,250 | 2.1 | % | ||||||||
Finland | 157,234,680 | 1.3 | % | ||||||||
Germany | 242,354,065 | 2.0 | % | ||||||||
India | 35,448,251 | 0.3 | % | ||||||||
Israel | 127,291,743 | 1.1 | % | ||||||||
Japan | 322,537,581 | 2.7 | % | ||||||||
Mexico | 150,483,014 | 1.2 | % | ||||||||
Netherlands | 123,302,893 | 1.0 | % | ||||||||
Spain | 88,365,301 | 0.7 | % | ||||||||
Switzerland | 674,084,004 | 5.6 | % | ||||||||
United Kingdom | 144,545,180 | 1.2 | % | ||||||||
United States†† | 9,559,947,733 | 78.9 | % | ||||||||
Total | $ | 12,113,653,599 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (72.9% excluding Short-Term Securities and Other Securities)
Forward Currency Contracts, Open
Currency Sold and Settlement Date | Currency Units Sold | Currency Value in $ U.S. | Unrealized Gain/(Loss) | ||||||||||||
British Pound 10/19/06 | 20,700,000 | $ | 37,843,245 | $ | (787,968 | ) | |||||||||
Euro 6/28/06 | 88,900,000 | 112,579,871 | (2,560,788 | ) | |||||||||||
Euro 8/24/06 | 8,500,000 | 10,800,699 | (495,299 | ) | |||||||||||
Japanese Yen 8/24/06 | 9,000,000,000 | 80,376,886 | (2,372,173 | ) | |||||||||||
Total | $ | 241,600,701 | $ | (6,216,228 | ) |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2006 13
Janus Enterprise Fund (unaudited)
Ticker: JAENX
Fund Snapshot
This growth fund pursues companies that have grown large enough to be well established but are small enough to still have room to grow.
Jonathan Coleman
portfolio manager
Performance Overview
During the six months ended April 30, 2006, as mid-cap stocks continued to outpace large-cap stocks, Janus Enterprise Fund advanced 14.29%. Meanwhile, the Fund's primary benchmark, the Russell Midcap® Growth Index returned 15.18%. The Fund's secondary benchmark, the S&P MidCap 400 Index, returned 15.27% for the same time period. While this short-term underperformance is disappointing, rest assured that we will not change our investment philosophy to chase momentary hot trends. In short, we look for companies with strong competitive barriers to entry, diverse and predictable revenue streams, an ability to expand profit margins over time, a strong stewardship of investors' capital, and appropriate valuations which we believe provide a reasonable risk and reward tradeoff.
As the performance of the market would suggest, the prior six months have been a strong period, particularly for small- and mid-sized companies. While deciphering the exact reasons for market strength (or weakness) in any period can be perilous, let me offer a few suggestions. First, the six-month period captures a significant rebound from the hurricane-related malaise that plagued the market last October. Consumer confidence, and therefore consumer spending, accelerated after a brief slowdown. As a result, GDP and corporate earnings have grown faster than expected. Additionally, the market has anticipated that the Federal Reserve may be close to ending the series of rate hikes it began in mid-2004. Finally, while energy prices remain elevated, the economy has so far proved to be much more resilient than in the 1970s, the last such period of sustained high energy prices.
Market strength has also been relatively concentrated, with certain groups experiencing very significant price moves in short periods of time. Of particular strength were the capital goods, materials, and telecommunications services industries. These industries are experiencing accelerating demand for their products and services, driven in large part by a surge in capital spending after several years of retrenchment. Given my long-standing investment philosophy that we should have exposure to a broad array of industries rather than a highly concentrated portfolio, there are inevitably periods when our breadth of holdings works against us. This certainly occurred during the last six months. Nevertheless, I do believe that over an entire cycle of up and down markets the approach has considerable merit.
Investment Strategy
As always, there were certain sectors which were positive and negative contributors to performance. I am pleased to report that given the strong market performance, we had positive absolute returns in every sector except for utilities, where we sustained a small loss. Contributing to the Fund's underperformance versus its benchmark were holdings in the materials, healthcare equipment and services, and energy sectors. While we made money in these sectors on an absolute basis, we were either underweight in a strong group or did a poor job of stock selection within the group during the six-month period. We did a better job with our picks in the automobiles and components, media, and pharmaceuticals and biotechnology sectors. Of particular strength was long time holding Celgene, which I have written about in past letters. The company received Federal Drug Administration approval for its cancer-fighting agent Revlimid and the early market uptake appears positive.
Heavy Equipment and RV Manufacturer Boosted Performance
I'd like to discuss a couple of stocks that worked well for us during the period and give you some context on how they fit into our investment philosophy. Industrial heavy equipment manufacturer Terex produced very strong results during the period, aided by increasing demand for its mining, crane and aerial lift businesses. We became interested in Terex after meeting with the company in early 2005 and spending time understanding the company's strategic priorities. Several years ago Terex undertook a strategic review of the business, deciding to de-emphasize acquisitions and instead focus on driving returns on invested capital higher. The company has been able to do this by improving operating margins and reducing its working capital such as inventories and accounts receivable, which unnecessarily tie up cash. Our investment philosophy has consistently been predicated on investing in companies which are growing revenues and earnings while also increasing returns on invested capital. Terex has done just that, showing impressive operating leverage in recent quarters. To be more specific, revenue increased 27% in 2005 versus 2004, while operating profit increased 75% when compared to the prior year. Importantly, returns on invested capital have also increased more than five percentage points over the prior year. These factors led to very strong share price performance. As Terex has become more fairly valued by the market, we have used the opportunity to trim back our holdings.
Towable recreational vehicle (RV) manufacturer Thor Industries is perhaps best known for its iconic Airstream trailer brand. Thor is run by CEO Wade Thompson, who purchased a loss-making Airstream from conglomerate Beatrice International Holdings in 1980. Mr. Thompson is a manager who thinks like an owner, because he in fact owns 30% of the company. As a result, he allocates capital with the care that we value in our core holdings and rewards his managers who expand market share and do so profitably. The proof is in the numbers. Thor has been profitable every year since going public in 1987 and boasts returns on invested capital of greater than 30% in an industry when many competitors struggle with profitability. We believe that Thor can capitalize on a demographic tailwind as baby boomers enter their retirement years. The propensity to purchase an RV increases dramatically after the age of 50 and we believe Thor has the product breadth to s erve the demand. Thor's business has held up very well in spite of the increases in gasoline prices, in part because the majority of its sales are in towable RVs, as opposed to larger more expensive motorized RVs. Consumers have traded down to the cheaper product, which has benefited Thor at the expense of some competitors. While we admire Thor and its management tremendously, we have used the strength in the stock to lighten our position.
Healthcare Industry Holdings Detracted from Performance
I'd also like to discuss some of our losers in the period, explain our investment rationale, and tell you what we have done in response to the disappointments. Several of our most significant losses in the
14 Janus Growth Funds April 30, 2006
(unaudited)
period came in the healthcare industry. Implantable cardiac device manufacturer St. Jude Medical has been a holding in the Fund for over 4 years and has delivered good returns over that period. St. Jude has proven very adept at developing new products with large addressable end markets. This product innovation has driven compounded annual growth in sales of greater than 20% over the last 4 years. Nevertheless, the company has recently experienced a slowing growth rate for its products as the potential patient population for its devices has become more fully penetrated by St. Jude and its competitors. While we believe St. Jude has an enviable franchise, we have become increasingly concerned that the market slowdown could last for an extended period of time. As a result, we have trimmed the position considerably. We continue to monitor market trends closely and, for now, hold our remaining St. Jude shares given their reasonable current valuation.
We also experienced disappointing performance from a more recent purchase, Patterson Companies. Established in 1877, Patterson is a dental and veterinary supply distributor that has an enviable long-term track record of earnings growth, most recently having compounded earnings growth of 21% over the last 9 years. Additionally, the company boasts very high returns on its capital, with returns on equity of 16% or higher each of the last 5 years. As the numbers suggest, this is not the proverbial flash in the pan. I have long admired the company, but I had not owned the stock in the past. In the last 4 quarters the company's growth rate has slowed, causing the stock to underperform sharply. We believe this slowing growth rate is a temporary phenomenon and we initiated a position. In retrospect, we started purchasing too soon, as the stock has continued to perform poorly rel ative to the market since our purchase. Over the long-term we like the opportunity for Patterson to continue to gain share in the very fragmented dental and veterinary markets. We are impressed with the company's 12% operating margins, which are quite strong for a distributor. We have modestly added to our position, as our research suggests signs of better financial results in future periods.
Summary
As I always do in this space, I would like to reiterate to you that I am an investor alongside you in Janus Enterprise Fund. I invest a portion of every paycheck in the Fund and I have never sold a share of the Fund as long as I have managed it. I take the obligation of trust very seriously and work every day to support the trust you have placed in me and in Janus.
Thank you for your investment in Janus Enterprise Fund.
Janus Enterprise Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Celgene Corp. Biopharmaceutical company - U.S. | 1.44 | % | |||||
Terex Corp. Diversified global manufacturer - U.S. | 0.87 | % | |||||
Thor Industries, Inc. Recreation vehicle producer/seller - U.S. | 0.81 | % | |||||
Advanced Micro Devices, Inc. Integrated circuits provider - U.S. | 0.79 | % | |||||
Lamar Advertising Co. Outdoor advertising company - U.S. | 0.74 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Reliant Energy, Inc. Electricity and energy services provider - U.S. | (0.28 | %) | |||||
St. Jude Medical, Inc. Cardiovascular medical devices servicer - U.S. | (0.25 | %) | |||||
Patterson Companies, Inc. Dental, veterinary and rehabilitation supplies distributor - U.S. | (0.24 | %) | |||||
Alcon, Inc. (U.S. Shares) Eye care company - U.S. | (0.22 | %) | |||||
Coventry Health Care, Inc. Managed company - U.S. | (0.14 | %) |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Semiconductor & Semiconductor Equipment | 1.79 | % | 7.67 | % | 7.46 | % | |||||||||
Pharmaceuticals & Biotechnology | 1.78 | % | 8.35 | % | 5.58 | % | |||||||||
Capital Goods | 1.61 | % | 4.27 | % | 7.58 | % | |||||||||
Diversified Financials | 1.51 | % | 6.82 | % | 4.80 | % | |||||||||
Media | 1.02 | % | 5.17 | % | 3.82 | % |
5 Lowest Contributors/Detractors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Utilities | (0.28 | %) | 0.01 | % | 0.91 | % | |||||||||
Banks | 0.00 | % | 0.19 | % | 1.65 | % | |||||||||
Food & Staples Retailing | 0.00 | % | 0.00 | % | 0.52 | % | |||||||||
Household & Personal Products | 0.00 | % | 0.40 | % | 0.61 | % | |||||||||
Materials | 0.01 | % | 3.77 | % | 2.98 | % |
Janus Growth Funds April 30, 2006 15
Janus Enterprise Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2006 |
Lamar Advertising Co. Advertising Sales | 3.4 | % | |||||
Celgene Corp. Medical - Biomedical and Genetic | 3.4 | % | |||||
EOG Resources, Inc. Oil Companies - Exploration and Production | 3.0 | % | |||||
T. Rowe Price Group, Inc. Investment Management and Advisory Services | 2.5 | % | |||||
Nextel Partners, Inc. - Class A Cellular Telecommunications | 2.4 | % | |||||
14.7 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2006 |
Emerging markets comprised 0.4% of total net assets.
5 Largest Country Allocations – (% of Investment Securities)
As of April 30, 2006 | As of October 31, 2005 | ||||||
![]() | ![]() | ||||||
16 Janus Growth Funds April 30, 2006
(unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | |||||||||||||||||||
Janus Enterprise Fund | 14.29 | % | 29.21 | % | 1.87 | % | 6.69 | % | 11.63 | % | |||||||||||||
Russell Midcap® Growth Index | 15.18 | % | 28.27 | % | 5.77 | % | 8.92 | % | 11.38 | % | |||||||||||||
S&P MidCap 400 Index | 15.27 | % | 28.32 | % | 10.73 | % | 14.33 | % | 15.07 | % | |||||||||||||
Lipper Quartile | N/A | 3 | rd | 3 | rd | 3 | rd | 2 | nd | ||||||||||||||
Lipper Ranking - based on total return for Mid-Cap Growth Funds | N/A** | 324/563 | 257/357 | 88/128 | 20/49 |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes 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.
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.
*The Fund's inception date – September 1, 1992
**The Fund's fiscal year-to-date Lipper ranking is not available.
See "Explanations of Charts, Tables and Financial Statements."
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
Funds that emphasize investments in small-sized companies may experience greater price volatility.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,142.90 | $ | 5.21 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.93 | $ | 4.91 |
*Expenses are equal to the annualized expense ratio of 0.98%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Janus Growth Funds April 30, 2006 17
Janus Enterprise Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Common Stock - 97.6% | |||||||||||
Advertising Sales - 3.4% | |||||||||||
1,167,170 | Lamar Advertising Co.* | $ | 64,182,677 | ||||||||
Agricultural Chemicals - 1.3% | |||||||||||
268,530 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 25,424,420 | |||||||||
Airlines - 0.9% | |||||||||||
372,978 | Ryanair Holdings PLC (ADR)*,# | 17,559,804 | |||||||||
Apparel Manufacturers - 0.8% | |||||||||||
445,600 | Coach, Inc.* | 14,713,712 | |||||||||
Applications Software - 0.5% | |||||||||||
221,060 | Citrix Systems, Inc.* | 8,824,715 | |||||||||
Batteries and Battery Systems - 0.4% | |||||||||||
139,195 | Energizer Holdings, Inc.*,# | 7,119,824 | |||||||||
Broadcast Services and Programming - 0.4% | |||||||||||
545,665 | CKX, Inc.*,# | 7,699,333 | |||||||||
Building - Mobile Home and Manufactured Homes - 1.2% | |||||||||||
433,475 | Thor Industries, Inc. | 21,881,818 | |||||||||
Building - Residential and Commercial - 1.0% | |||||||||||
25,410 | NVR, Inc.*,# | 19,184,550 | |||||||||
Casino Services - 0.8% | |||||||||||
391,190 | Scientific Games Corp. - Class A*,# | 14,900,427 | |||||||||
Cellular Telecommunications - 2.4% | |||||||||||
1,609,163 | Nextel Partners, Inc. - Class A*,# | 45,603,679 | |||||||||
Coal - 0.5% | |||||||||||
401,000 | Alpha Natural Resources, Inc.*,# | 10,069,110 | |||||||||
Commercial Banks - 0.5% | |||||||||||
183,970 | SVB Financial Group*,# | 9,340,157 | |||||||||
Commercial Services - 0.9% | |||||||||||
420,962 | Iron Mountain, Inc.*,# | 16,459,614 | |||||||||
Commercial Services - Finance - 3.4% | |||||||||||
456,910 | Jackson Hewitt Tax Service, Inc.# | 13,652,471 | |||||||||
337,111 | Moody's Corp. | 20,904,253 | |||||||||
716,691 | Paychex, Inc. | 28,947,149 | |||||||||
63,503,873 | |||||||||||
Computer Services - 1.6% | |||||||||||
689,225 | Ceridian Corp.* | 16,699,921 | |||||||||
457,655 | IHS, Inc. - Class A*,# | 12,960,790 | |||||||||
29,660,711 | |||||||||||
Computers - 1.0% | |||||||||||
257,287 | Apple Computer, Inc.* | 18,110,432 | |||||||||
Computers - Memory Devices - 0.3% | |||||||||||
98,490 | SanDisk Corp.* | 6,286,617 | |||||||||
Containers - Metal and Glass - 3.0% | |||||||||||
888,855 | Ball Corp. | 35,536,423 | |||||||||
1,180,980 | Owens-Illinois, Inc.* | 21,588,314 | |||||||||
57,124,737 | |||||||||||
Data Processing and Management - 0.7% | |||||||||||
307,850 | NAVTEQ Corp.*,# | 12,781,932 | |||||||||
Dental Supplies and Equipment - 0.8% | |||||||||||
481,330 | Patterson Companies, Inc.*,# | 15,681,731 | |||||||||
Diagnostic Kits - 1.5% | |||||||||||
721,650 | Dade Behring Holdings, Inc. | 28,144,350 |
Shares or Principal Amount | Value | ||||||||||
Distribution/Wholesale - 0.7% | |||||||||||
886,500 | Esprit Holdings, Ltd. | $ | 7,077,548 | ||||||||
2,278,000 | Li & Fung, Ltd. | 5,406,111 | |||||||||
12,483,659 | |||||||||||
E-Commerce/Products - 0.4% | |||||||||||
151,000 | Submarino S.A. (GDR)* | 8,087,032 | |||||||||
E-Commerce/Services - 1.1% | |||||||||||
708,220 | IAC/InterActiveCorp* | 20,446,311 | |||||||||
Electric Products - Miscellaneous - 1.2% | |||||||||||
478,365 | AMETEK, Inc.# | 23,569,044 | |||||||||
Electronic Components - Semiconductors - 3.2% | |||||||||||
893,135 | Advanced Micro Devices, Inc.* | 28,892,917 | |||||||||
665,380 | ATI Technologies, Inc. (U.S. Shares)*,# | 10,326,698 | |||||||||
445,695 | International Rectifier Corp.*,# | 20,145,414 | |||||||||
59,365,029 | |||||||||||
Electronic Measuring Instruments - 0.8% | |||||||||||
303,582 | Trimble Navigation, Ltd.* | 14,383,715 | |||||||||
Entertainment Software - 1.6% | |||||||||||
1,333,031 | Activision, Inc.* | 18,915,710 | |||||||||
181,835 | Electronic Arts, Inc.* | 10,328,228 | |||||||||
29,243,938 | |||||||||||
Fiduciary Banks - 0.9% | |||||||||||
280,590 | Northern Trust Corp. | 16,523,945 | |||||||||
Finance - Investment Bankers/Brokers - 0.5% | |||||||||||
280,435 | optionsXpress Holdings, Inc. | 8,833,703 | |||||||||
Finance - Other Services - 1.5% | |||||||||||
61,875 | Chicago Mercantile Exchange Holdings, Inc. | 28,338,750 | |||||||||
Food - Canned - 0.8% | |||||||||||
582,729 | TreeHouse Foods, Inc.* | 15,267,500 | |||||||||
Food - Dairy Products - 2.4% | |||||||||||
1,125,537 | Dean Foods Co.* | 44,582,521 | |||||||||
Hotels and Motels - 0.6% | |||||||||||
32,680 | Four Seasons Hotels, Inc. | 1,765,374 | |||||||||
160,935 | Starwood Hotels & Resorts Worldwide, Inc. | 9,234,450 | |||||||||
10,999,824 | |||||||||||
Human Resources - 1.2% | |||||||||||
335,405 | Manpower, Inc. | 21,851,636 | |||||||||
Industrial Automation and Robotics - 0.6% | |||||||||||
164,585 | Rockwell Automation, Inc. | 11,925,829 | |||||||||
Instruments - Controls - 0.4% | |||||||||||
117,590 | Mettler-Toledo International, Inc.* | 7,619,832 | |||||||||
Instruments - Scientific - 1.2% | |||||||||||
317,887 | Fisher Scientific International, Inc.* | 22,426,928 | |||||||||
Insurance Brokers - 0.4% | |||||||||||
220,520 | Willis Group Holdings, Ltd. | 7,751,278 | |||||||||
Internet Content - Information/News - 0.3% | |||||||||||
543,715 | CNET Networks, Inc.*,# | 5,861,248 | |||||||||
Investment Management and Advisory Services - 3.0% | |||||||||||
178,065 | National Financial Partners Corp.# | 9,259,380 | |||||||||
566,865 | T. Rowe Price Group, Inc.# | 47,724,364 | |||||||||
56,983,744 | |||||||||||
Leisure and Recreation Products - 0.5% | |||||||||||
236,295 | Brunswick Corp.# | 9,267,490 |
See Notes to Schedules of Investments and Financial Statements.
18 Janus Growth Funds April 30, 2006
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Machinery - Construction and Mining - 0.8% | |||||||||||
168,455 | Terex Corp.* | $ | 14,579,780 | ||||||||
Machinery - Pumps - 0.6% | |||||||||||
252,575 | Graco, Inc.# | 11,807,881 | |||||||||
Medical - Biomedical and Genetic - 4.2% | |||||||||||
1,496,490 | Celgene Corp.* | 63,092,017 | |||||||||
248,160 | Invitrogen Corp.*,# | 16,381,042 | |||||||||
79,473,059 | |||||||||||
Medical - Drugs - 0.4% | |||||||||||
179,370 | Forest Laboratories, Inc.* | 7,242,961 | |||||||||
Medical - HMO - 1.3% | |||||||||||
500,118 | Coventry Health Care, Inc.* | 24,840,861 | |||||||||
Medical - Nursing Homes - 0.9% | |||||||||||
373,885 | Manor Care, Inc.# | 16,394,857 | |||||||||
Medical Instruments - 2.0% | |||||||||||
100,200 | Intuitive Surgical, Inc.* | 12,725,400 | |||||||||
344,460 | Kyphon, Inc.*,# | 14,312,313 | |||||||||
274,160 | St. Jude Medical, Inc.* | 10,823,837 | |||||||||
37,861,550 | |||||||||||
Medical Labs and Testing Services - 0.4% | |||||||||||
131,200 | Covance, Inc.*,# | 7,655,520 | |||||||||
Medical Products - 0.8% | |||||||||||
298,385 | Varian Medical Systems, Inc.* | 15,629,406 | |||||||||
Motion Pictures and Services - 0.5% | |||||||||||
1,040,940 | Lions Gate Entertainment Corp. (U.S. Shares)* | 10,169,984 | |||||||||
Multi-Line Insurance - 1.1% | |||||||||||
425,345 | Assurant, Inc. | 20,488,869 | |||||||||
Networking Products - 0.4% | |||||||||||
401,950 | Juniper Networks, Inc.* | 7,428,036 | |||||||||
Oil Companies - Exploration and Production - 4.2% | |||||||||||
256,350 | Chesapeake Energy Corp.# | 8,121,168 | |||||||||
133,030 | Complete Production Services, Inc.* | 3,515,983 | |||||||||
798,985 | EOG Resources, Inc. | 56,112,716 | |||||||||
210,155 | Forest Oil Corp.*,# | 7,685,368 | |||||||||
170,078 | Mariner Energy, Inc.* | 3,308,017 | |||||||||
78,743,252 | |||||||||||
Optical Supplies - 0.6% | |||||||||||
115,250 | Alcon, Inc. (U.S. Shares) | 11,722,078 | |||||||||
Pipelines - 2.1% | |||||||||||
457,606 | Kinder Morgan, Inc.# | 40,278,480 | |||||||||
Property and Casualty Insurance - 1.0% | |||||||||||
523,177 | W. R. Berkley Corp. | 19,577,283 | |||||||||
Radio - 0.6% | |||||||||||
531,670 | XM Satellite Radio Holdings, Inc. - Class A*,# | 10,750,367 | |||||||||
Recreational Vehicles - 0.8% | |||||||||||
332,030 | Polaris Industries, Inc.# | 15,904,237 | |||||||||
Reinsurance - 1.7% | |||||||||||
10,527 | Berkshire Hathaway, Inc. - Class B* | 31,075,704 | |||||||||
REIT - Mortgages - 1.0% | |||||||||||
812,335 | CapitalSource, Inc.# | 19,089,873 | |||||||||
Respiratory Products - 0.9% | |||||||||||
437,975 | Respironics, Inc.* | 16,038,645 |
Shares or Principal Amount | Value | ||||||||||
Retail - Apparel and Shoe - 0.3% | |||||||||||
138,620 | Nordstrom, Inc. | $ | 5,313,305 | ||||||||
Retail - Auto Parts - 0.6% | |||||||||||
297,309 | Advance Auto Parts, Inc. | 11,957,768 | |||||||||
Retail - Office Supplies - 2.2% | |||||||||||
299,625 | Office Depot, Inc.*,# | 12,158,783 | |||||||||
1,118,815 | Staples, Inc.# | 29,547,904 | |||||||||
41,706,687 | |||||||||||
Schools - 0.6% | |||||||||||
211,359 | Apollo Group, Inc. - Class A*,# | 11,548,656 | |||||||||
Semiconductor Components/Integrated Circuits - 3.2% | |||||||||||
1,019,410 | Cypress Semiconductor Corp.*,# | 17,493,076 | |||||||||
352,845 | Linear Technology Corp.# | 12,525,998 | |||||||||
519,155 | Marvell Technology Group, Ltd.* | 29,638,558 | |||||||||
59,657,632 | |||||||||||
Semiconductor Equipment - 0.7% | |||||||||||
258,550 | KLA-Tencor Corp. | 12,451,768 | |||||||||
Telecommunication Services - 1.6% | |||||||||||
611,140 | Amdocs, Ltd. (U.S. Shares)* | 22,734,408 | |||||||||
393,515 | Time Warner Telecom, Inc. - Class A*,# | 6,599,247 | |||||||||
29,333,655 | |||||||||||
Telephone - Integrated - 0.2% | |||||||||||
820,150 | Level 3 Communications, Inc.*,# | 4,428,810 | |||||||||
Television - 0.9% | |||||||||||
464,738 | Univision Communications, Inc. - Class A*,# | 16,586,499 | |||||||||
Therapeutics - 2.9% | |||||||||||
366,228 | Gilead Sciences, Inc.* | 21,058,110 | |||||||||
486,527 | Neurocrine Biosciences, Inc.* | 27,907,189 | |||||||||
91,860 | United Therapeutics Corp.* | 5,470,263 | |||||||||
54,435,562 | |||||||||||
Toys - 1.1% | |||||||||||
1,044,122 | Marvel Entertainment, Inc.*,# | 20,370,820 | |||||||||
Transportation - Equipment and Leasing - 0.2% | |||||||||||
98,440 | GATX Corp.# | 4,606,992 | |||||||||
Transportation - Marine - 0.6% | |||||||||||
219,495 | Alexander & Baldwin, Inc. | 10,946,216 | |||||||||
Transportation - Railroad - 0.9% | |||||||||||
366,770 | Canadian National Railway Co. (U.S. Shares) | 16,471,641 | |||||||||
Transportation - Services - 1.0% | |||||||||||
226,860 | Expeditors International of Washington, Inc.# | 19,421,485 | |||||||||
Transportation - Truck - 1.4% | |||||||||||
229,565 | Con-Way, Inc.# | 12,791,362 | |||||||||
327,920 | Landstar System, Inc.# | 13,933,321 | |||||||||
26,724,683 | |||||||||||
Web Hosting/Design - 0.8% | |||||||||||
222,981 | Equinix, Inc.* | 14,694,448 | |||||||||
Wireless Equipment - 1.5% | |||||||||||
830,135 | Crown Castle International Corp.*,# | 27,934,043 | |||||||||
Total Common Stock (cost $1,185,206,182) | 1,835,414,532 |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2006 19
Janus Enterprise Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Equity-Linked Structured Notes - 0.8% | |||||||||||
Finance - Investment Bankers/Brokers - 0.8% | |||||||||||
376,070 | Morgan Stanley Co., convertible (Celgene Corp.), 0% (144A)§ (cost $13,162,450) | $ | 15,166,903 | ||||||||
Other Securities - 12.2% | |||||||||||
229,175,404 | State Street Navigator Securities Lending Prime Portfolio† (cost $229,175,404) | 229,175,404 | |||||||||
Time Deposit - 2.3% | |||||||||||
$ | 44,200,000 | ING Financial, ETD 4.86%, 5/1/06 (cost $44,200,000) | 44,200,000 | ||||||||
Total Investments (total cost $1,471,744,036) – 112.9% | 2,123,956,839 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (12.9)% | (241,860,248 | ) | |||||||||
Net Assets – 100% | $ | 1,882,096,591 |
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Bermuda | $ | 49,873,495 | 2.3 | % | |||||||
Brazil | 8,087,032 | 0.4 | % | ||||||||
Canada | 64,158,117 | 3.0 | % | ||||||||
Ireland | 17,559,804 | 0.8 | % | ||||||||
Switzerland | 11,722,078 | 0.6 | % | ||||||||
United Kingdom | 22,734,408 | 1.1 | % | ||||||||
United States†† | 1,949,821,905 | 91.8 | % | ||||||||
Total | $ | 2,123,956,839 | 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.
20 Janus Growth Funds April 30, 2006
Janus Mercury Fund (unaudited)
Ticker: JAMRX
Fund Snapshot
This diversified growth fund typically pursues larger companies believed to be well-positioned for future growth.
Team Based Approach
Led by Jim Goff
Director of Research
Performance Overview
Preoccupation with rising interest rates and historically high oil prices failed to deter the enthusiasm of U.S. investors during the six-month period ended April 30, 2006. As a result, the major domestic indexes settled near five-year highs. During the period, Janus Mercury Fund gained 8.63%, topping its primary benchmark, the Russell 1000® Growth Index, which returned 7.06%. The Fund's results slightly underperformed those of its secondary benchmark, the S&P 500® Index, which returned 9.64% during the period.
Our Investment Process
The Fund spent a portion of the period in transition as portfolio manager David Corkins stepped down after three successful years at the helm so that he could take over as manager of Janus Fund, effective February 1. We consequently moved the management of this Fund to a team-based model, where ideas for investments come from Janus' entire research team. Janus' eight sector teams each manage a portion of the Fund in-line with the representation of its sector in the Russell 1000® Growth Index. Each sector sleeve is composed of the highest conviction "buy-rated" stock ideas from Janus' sector specialists.
As Janus expects to cover 1,200 companies in 2006, I feel confident that there will be no shortage of good ideas from our experienced Janus research team. By focusing on what we believe are the best prospects for the long haul, we hope to deliver Index-beating returns in a moderate risk fashion.
Contributors to Fund Performance
The top-performing individual stock during the period was Canadian National Railway, which extended a rally that ran through the latter part of 2005 and into 2006. The North American freight train system operator delivered robust earnings growth, supported by solid gains in its coal, intermodal and grain transporting segments.
Biotechnology company Celgene also contributed significantly to gains. The stock started 2006 on a roll after the Food and Drug Administration approved its Revlimid treatment for myelodysplastic syndromes, a blood-borne cancer, in the final days of December. Less than two months later, it received another boost when regulators granted priority status to Celgene's application to approve Revlimid for the treatment of multiple myeloma, a bone marrow-based cancer. The accelerated decision is expected by the end of June, and we anticipate the drug will be well received by the medical community for both indications.
A newer holding, Tata Steel of India, outperformed as it posted double-digit gains in finished steel production – benefiting from sustained high global demand for the metal. Janus research analyst Laurent Saltiel believes this Indian steel producer is well exposed to the fastest-growing region of the world. Based on a recent study on 23 world class steel makers, Tata Steel has been ranked the best steel company in the world by World Steel Dynamics, a leading steel industry consultant. Tata Steel owes its competitiveness to high productivity, low labor costs, integration into coal and iron ore production and high manufacturing quality standards. We expect Tata to continue to have strong positive sales growth and returns of capital.
Financial services giant JP Morgan Chase advanced as it announced highly regarded industry executive James Dimon would ascend to the role of chief executive officer six months ahead of schedule. The market is beginning to realize the increased returns and profit that may result from the merger of the legacy Bank One and JP Morgan Chase businesses. Meanwhile, we believe the company's earnings growth remains healthy, supported by increasing margins from merger savings and broad returns across its consumer and wholesale banking franchises. While we remain upbeat on the bank's outlook, we took some profits to keep our position size within our range of comfort.
Detractors from Fund Performance
The period's worst performer was health insurer Aetna, which slipped as costs crept up. Disheartened by the increasing emphasis on membership numbers – and not cash flow performance – we trimmed the Fund's exposure.
Also weighing significantly on returns was Internet services provider Yahoo!. Frequently compared to Web search giant Google (another Fund holding), Yahoo! has taken longer to effectively grow search advertising revenues, which has disappointed some investors. We see the momentum building, but because it has occurred at a slower pace than anticipated,
Janus Growth Funds April 30, 2006 21
Janus Mercury Fund (unaudited)
we're closely monitoring the situation and have scaled back our position. That said, we believe the company's valuation is not much higher than the broader market, it has good fundamentals and its growth prospects are solid, so we remain invested.
Higher energy and raw material prices hurt returns at glass container and packaging concern Owens-Illinois, a newer position. The company is making progress on an ambitious long-term cost-cutting plan that will boost returns, but investors reacted strongly to disappointing near-term earnings. We expected that this company would require some patience when we purchased it, and we still see upside potential.
Looking Forward
Of course, we know that even the best-researched ideas can falter. But by leveraging the top picks from Janus' exceptional analyst team and taking a methodical approach to building and maintaining this Fund, we believe we are offering exposure to market leaders from a broad cross-section of the stock universe. At the same time, by keeping the Fund well-diversified, we're diminishing the potential risk factors that result from outsized investments in a small group of companies or industries.
Thank you for your continued investment in Janus Mercury Fund.
Janus Mercury Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Canadian National Railway Co. (U.S. Shares) Railroad track operator - Canada | 0.65 | % | |||||
Samsung Electronics Company, Ltd. Diversified electronics company - Korea | 0.58 | % | |||||
Celgene Corp. Global biopharmaceutical company - U.S. | 0.57 | % | |||||
Tata Steel, Ltd. Steel company - India | 0.55 | % | |||||
JP Morgan Chase & Co. Financial products and services provider - U.S. | 0.49 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Aetna, Inc. Healthcare and related benefits provider - U.S. | (0.34 | %) | |||||
Yahoo!, Inc. Global Internet media company - U.S. | (0.26 | %) | |||||
Coventry Health Care, Inc. Managed company - U.S. | (0.20 | %) | |||||
Whole Foods Market, Inc. Natural food supermarkets owner/operator - U.S. | (0.19 | %) | |||||
Owens-Illinois, Inc. Plastic and glass packaging manufacturer - U.S. | (0.17 | %) |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Transportation | 1.41 | % | 4.90 | % | 1.84 | % | |||||||||
Semiconductors & Semiconductor Equipment | 1.10 | % | 7.13 | % | 3.15 | % | |||||||||
Pharmaceuticals & Biotechnology | 1.05 | % | 9.33 | % | 7.88 | % | |||||||||
Energy | 0.84 | % | 6.78 | % | 9.65 | % | |||||||||
Materials | 0.81 | % | 3.32 | % | 3.01 | % |
5 Lowest Contributors/Detractors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Healthcare Equipment & Services | (0.43 | %) | 9.02 | % | 5.17 | % | |||||||||
Food & Staples Retailing | (0.19 | %) | 1.95 | % | 2.38 | % | |||||||||
Utilities | (0.10 | %) | 0.69 | % | 3.30 | % | |||||||||
Commercial Services & Supplies | (0.05 | %) | 0.35 | % | 0.73 | % | |||||||||
Consumer Durables & Apparel | 0.01 | % | 4.86 | % | 1.31 | % |
22 Janus Growth Funds April 30, 2006
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2006 |
General Electric Co. Diversified Operations | 2.4 | % | |||||
United Parcel Service, Inc. - Class B Transportation - Services | 2.3 | % | |||||
Roche Holding A.G. Medical - Drugs | 1.9 | % | |||||
Dean Foods Co. Food - Dairy Products | 1.9 | % | |||||
Procter & Gamble Co. Cosmetics and Toiletries | 1.8 | % | |||||
10.3 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2006 |
Emerging markets comprised 5.0% of total net assets.
5 Largest Country Allocations – (% of Investment Securities)
As of April 30, 2006 | As of October 31, 2005 | ||||||
![]() | ![]() | ||||||
Janus Growth Funds April 30, 2006 23
Janus Mercury Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | |||||||||||||||||||
Janus Mercury Fund | 8.63 | % | 19.00 | % | (1.74 | )% | 8.56 | % | 12.70 | % | |||||||||||||
Russell 1000® Growth Index | 7.06 | % | 15.18 | % | (0.76 | )% | 6.21 | % | 8.76 | % | |||||||||||||
S&P 500® Index | 9.64 | % | 15.42 | % | 2.70 | % | 8.94 | % | 10.76 | % | |||||||||||||
Lipper Quartile | N/A | 2 | nd | 3 | rd | 1 | st | 1 | st | ||||||||||||||
Lipper Ranking - based on total return for Large-Cap Growth Funds | N/A** | 210/698 | 306/474 | 18/165 | 1/84 |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes 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.
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.
*The Fund's inception date – May 3, 1993
**The Fund's fiscal year-to-date Lipper ranking is not available.
See "Explanations of Charts, Tables and Financial Statements."
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
Effective 2/1/06, David Corkins is no longer the portfolio manager of Janus Mercury Fund. A research team now selects the investments for Janus Mercury Fund led by the Director of Research, Jim Goff.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,086.30 | $ | 4.97 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.03 | $ | 4.81 |
*Expenses are equal to the annualized expense ratio of 0.96%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
24 Janus Growth Funds April 30, 2006
Janus Mercury Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Common Stock - 95.8% | |||||||||||
Advertising Sales - 0.4% | |||||||||||
314,250 | Lamar Advertising Co.* | $ | 17,280,608 | ||||||||
Aerospace and Defense - 1.9% | |||||||||||
1,734,500 | BAE Systems PLC** | 13,205,328 | |||||||||
780,380 | Boeing Co. | 65,122,711 | |||||||||
78,328,039 | |||||||||||
Agricultural Chemicals - 1.0% | |||||||||||
260,540 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares)** | 24,667,927 | |||||||||
121,803 | Syngenta A.G.*,** | 16,990,743 | |||||||||
41,658,670 | |||||||||||
Agricultural Operations - 0.5% | |||||||||||
370,675 | Bunge, Ltd. | 19,775,511 | |||||||||
Apparel Manufacturers - 1.1% | |||||||||||
987,660 | Coach, Inc.* | 32,612,534 | |||||||||
955,690 | Quiksilver, Inc.*,# | 13,064,282 | |||||||||
45,676,816 | |||||||||||
Applications Software - 1.0% | |||||||||||
1,712,650 | Microsoft Corp. | 41,360,498 | |||||||||
Athletic Footwear - 0.8% | |||||||||||
375,650 | NIKE, Inc. - Class B | 30,743,196 | |||||||||
Automotive - Cars and Light Trucks - 1.7% | |||||||||||
782,508 | BMW A.G.**,# | 42,598,431 | |||||||||
132,220 | Hyundai Motor Company, Ltd.** | 11,621,117 | |||||||||
983,600 | Nissan Motor Company, Ltd.**,# | 12,931,535 | |||||||||
67,151,083 | |||||||||||
Beverages - Wine and Spirits - 0.6% | |||||||||||
124,010 | Pernod Ricard S.A.**,# | 24,046,650 | |||||||||
Broadcast Services and Programming - 0.4% | |||||||||||
818,295 | Liberty Global, Inc. - Class A* | 16,946,889 | |||||||||
Building - Mobile Home and Manufactured Homes - 0.2% | |||||||||||
195,030 | Thor Industries, Inc. | 9,845,114 | |||||||||
Building - Residential and Commercial - 2.0% | |||||||||||
51,535 | NVR, Inc.*,# | 38,908,925 | |||||||||
1,081,995 | Pulte Homes, Inc.# | 40,412,513 | |||||||||
79,321,438 | |||||||||||
Casino Hotels - 0.4% | |||||||||||
209,920 | Harrah's Entertainment, Inc.# | 17,137,869 | |||||||||
Cellular Telecommunications - 0.8% | |||||||||||
4,289,500 | China Mobile, Ltd.# | 24,951,498 | |||||||||
142,600 | Hikari Tsushin, Inc.**,# | 8,816,616 | |||||||||
33,768,114 | |||||||||||
Commercial Banks - 0.9% | |||||||||||
575,585 | Commerce Bancorp, Inc.# | 23,219,099 | |||||||||
223,590 | SVB Financial Group* | , | # | 11,351,664 | |||||||
34,570,763 | |||||||||||
Commercial Services - Finance - 0.8% | |||||||||||
769,745 | Paychex, Inc. | 31,090,001 | |||||||||
Computer Services - 0.7% | |||||||||||
1,132,480 | Ceridian Corp.* | 27,439,990 | |||||||||
Computers - 0.7% | |||||||||||
423,050 | Apple Computer, Inc.* | 29,778,490 |
Shares or Principal Amount | Value | ||||||||||
Computers - Memory Devices - 2.3% | |||||||||||
3,230,985 | EMC Corp.* | $ | 43,650,607 | ||||||||
784,745 | SanDisk Corp.*,# | 50,090,274 | |||||||||
93,740,881 | |||||||||||
Containers - Metal and Glass - 1.9% | |||||||||||
624,080 | Ball Corp. | 24,950,718 | |||||||||
2,903,845 | Owens-Illinois, Inc.* | 53,082,287 | |||||||||
78,033,005 | |||||||||||
Cosmetics and Toiletries - 2.9% | |||||||||||
747,840 | Colgate-Palmolive Co. | 44,212,301 | |||||||||
1,250,695 | Procter & Gamble Co. | 72,802,956 | |||||||||
117,015,257 | |||||||||||
Data Processing and Management - 0.4% | |||||||||||
373,455 | NAVTEQ Corp.*,# | 15,505,852 | |||||||||
Dental Supplies and Equipment - 0.8% | |||||||||||
941,720 | Patterson Companies, Inc.*,# | 30,681,238 | |||||||||
Diagnostic Kits - 0.7% | |||||||||||
753,555 | Dade Behring Holdings, Inc. | 29,388,645 | |||||||||
Distribution/Wholesale - 0.6% | |||||||||||
3,190,000 | Esprit Holdings, Ltd.# | 25,467,994 | |||||||||
Diversified Operations - 3.5% | |||||||||||
2,806,400 | General Electric Co. | 97,073,375 | |||||||||
1,640,615 | Tyco International, Ltd. (U.S. Shares) | 43,230,205 | |||||||||
140,303,580 | |||||||||||
E-Commerce/Products - 0.3% | |||||||||||
380,000 | Submarino S.A.* | 10,287,494 | |||||||||
E-Commerce/Services - 0.8% | |||||||||||
1,071,755 | IAC/InterActiveCorp* | 30,941,567 | |||||||||
Electric - Generation - 0.7% | |||||||||||
1,732,360 | AES Corp.* | 29,398,149 | |||||||||
Electronic Components - Semiconductors - 4.9% | |||||||||||
1,635,690 | Advanced Micro Devices, Inc.* | 52,914,571 | |||||||||
6,888,374 | ARM Holdings PLC** | 17,083,389 | |||||||||
952,430 | Microsemi Corp.*,# | 26,020,388 | |||||||||
41,822 | Samsung Electronics Company, Ltd.** | 28,555,309 | |||||||||
791,220 | SiRF Technology Holdings, Inc.*,# | 27,020,163 | |||||||||
1,493,570 | Texas Instruments, Inc. | 51,841,814 | |||||||||
203,435,634 | |||||||||||
Electronic Forms - 1.0% | |||||||||||
991,785 | Adobe Systems, Inc.* | 38,877,972 | |||||||||
Energy - Alternate Sources - 0.7% | |||||||||||
780,575 | Suntech Power Holdings Company, Ltd. (ADR)*,# | 26,765,917 | |||||||||
Enterprise Software/Services - 1.3% | |||||||||||
3,697,617 | Oracle Corp.* | 53,948,232 | |||||||||
Entertainment Software - 1.2% | |||||||||||
1,129,675 | Activision, Inc.* | 16,030,088 | |||||||||
559,884 | Electronic Arts, Inc.* | 31,801,411 | |||||||||
47,831,499 | |||||||||||
Finance - Credit Card - 1.1% | |||||||||||
826,755 | American Express Co. | 44,487,687 |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2006 25
Janus Mercury Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Finance - Investment Bankers/Brokers - 2.8% | |||||||||||
886,220 | JP Morgan Chase & Co. | $ | 40,216,664 | ||||||||
473,485 | Merrill Lynch & Company, Inc. | 36,107,966 | |||||||||
689,170 | optionsXpress Holdings, Inc. | 21,708,855 | |||||||||
138,400 | UBS A.G. (ADR)** | 16,172,040 | |||||||||
114,205,525 | |||||||||||
Finance - Mortgage Loan Banker - 0.9% | |||||||||||
700,445 | Fannie Mae | 35,442,517 | |||||||||
Food - Dairy Products - 1.9% | |||||||||||
1,928,045 | Dean Foods Co.* | 76,369,862 | |||||||||
Food - Retail - 1.6% | |||||||||||
417,575 | Metro A.G.**,# | 23,632,941 | |||||||||
686,245 | Whole Foods Market, Inc. | 42,121,718 | |||||||||
65,754,659 | |||||||||||
Food - Wholesale/Distribution - 1.0% | |||||||||||
1,367,600 | Sysco Corp. | 40,877,564 | |||||||||
Hotels and Motels - 0.3% | |||||||||||
198,100 | Four Seasons Hotels, Inc.** | 10,701,362 | |||||||||
Independent Power Producer - 0.8% | |||||||||||
665,460 | NRG Energy, Inc.* | 31,669,241 | |||||||||
Insurance Brokers - 0.7% | |||||||||||
632,305 | Marsh & McLennan Companies, Inc.# | 19,392,794 | |||||||||
247,605 | Willis Group Holdings, Ltd. | 8,703,316 | |||||||||
28,096,110 | |||||||||||
Internet Infrastructure Software - 0.4% | |||||||||||
513,150 | Akamai Technologies, Inc.*,# | 17,288,024 | |||||||||
Internet Security - 0.4% | |||||||||||
790,255 | Check Point Software Technologies, Ltd. (U.S. Shares)*,# | 15,291,434 | |||||||||
Investment Management and Advisory Services - 0.4% | |||||||||||
350,185 | National Financial Partners Corp.# | 18,209,620 | |||||||||
Medical - Biomedical and Genetic - 3.2% | |||||||||||
516,685 | Amgen, Inc.* | 34,979,575 | |||||||||
1,399,770 | Celgene Corp.* | 59,014,302 | |||||||||
422,862 | Genentech, Inc.* | 33,706,330 | |||||||||
127,700,207 | |||||||||||
Medical - Drugs - 4.1% | |||||||||||
819,725 | Abbott Laboratories | 35,035,047 | |||||||||
716,153 | Cubist Pharmaceuticals, Inc.* | 16,235,189 | |||||||||
1,158,555 | Merck & Company, Inc. | 39,877,462 | |||||||||
497,108 | Roche Holding A.G.** | 76,438,070 | |||||||||
167,585,768 | |||||||||||
Medical - Generic Drugs - 0.9% | |||||||||||
881,809 | Teva Pharmaceutical Industries, Ltd. (ADR)# | 35,713,265 | |||||||||
Medical - HMO - 3.0% | |||||||||||
525,470 | Aetna, Inc. | 20,230,595 | |||||||||
1,375,602 | Coventry Health Care, Inc.* | 68,326,151 | |||||||||
673,665 | UnitedHealth Group, Inc. | 33,508,097 | |||||||||
122,064,843 | |||||||||||
Medical - Nursing Homes - 1.1% | |||||||||||
980,640 | Manor Care, Inc.# | 43,001,064 | |||||||||
Medical Instruments - 1.0% | |||||||||||
306,870 | Intuitive Surgical, Inc.* | 38,972,490 |
Shares or Principal Amount | Value | ||||||||||
Medical Products - 0.8% | |||||||||||
621,590 | Varian Medical Systems, Inc.*,# | $ | 32,558,884 | ||||||||
Networking Products - 1.2% | |||||||||||
2,573,795 | Juniper Networks, Inc.*,# | 47,563,732 | |||||||||
Oil - Field Services - 0.8% | |||||||||||
424,620 | Halliburton Co.# | 33,184,053 | |||||||||
Oil Companies - Exploration and Production - 2.2% | |||||||||||
459,760 | Apache Corp. | 32,661,351 | |||||||||
266,729 | EnCana Corp.** | 13,331,082 | |||||||||
276,505 | EnCana Corp. (U.S. Shares)** | 13,839,075 | |||||||||
434,725 | EOG Resources, Inc. | 30,530,737 | |||||||||
90,362,245 | |||||||||||
Oil Companies - Integrated - 0.7% | |||||||||||
210,070 | Amerada Hess Corp. | 30,096,729 | |||||||||
Oil Refining and Marketing - 1.7% | |||||||||||
1,547,602 | Reliance Industries, Ltd. | 34,774,514 | |||||||||
524,330 | Valero Energy Corp. | 33,945,124 | |||||||||
68,719,638 | |||||||||||
Real Estate Operating/Development - 0.9% | |||||||||||
8,536,000 | Capitaland, Ltd.# | 26,457,335 | |||||||||
159,665 | St. Joe Co.# | 8,966,786 | |||||||||
35,424,121 | |||||||||||
Recreational Vehicles - 0.4% | |||||||||||
320,950 | Polaris Industries, Inc.# | 15,373,505 | |||||||||
Reinsurance - 0.9% | |||||||||||
11,905 | Berkshire Hathaway, Inc. - Class B* | 35,143,560 | |||||||||
Retail - Apparel and Shoe - 1.4% | |||||||||||
616,369 | Industria de Diseno Textil S.A.**,# | 25,078,094 | |||||||||
775,245 | Nordstrom, Inc.# | 29,715,141 | |||||||||
54,793,235 | |||||||||||
Retail - Auto Parts - 0.2% | |||||||||||
196,005 | Advance Auto Parts, Inc. | 7,883,321 | |||||||||
Retail - Computer Equipment - 0.4% | |||||||||||
331,845 | GameStop Corp. - Class A*,# | 15,663,084 | |||||||||
Retail - Office Supplies - 0.9% | |||||||||||
1,396,182 | Staples, Inc. | 36,873,167 | |||||||||
Retail - Regional Department Stores - 0.9% | |||||||||||
462,700 | Federated Department Stores, Inc. | 36,021,195 | |||||||||
Schools - 0.5% | |||||||||||
365,065 | Apollo Group, Inc. - Class A* | 19,947,152 | |||||||||
Semiconductor Components/Integrated Circuits - 2.2% | |||||||||||
2,803,760 | Cypress Semiconductor Corp.*,# | 48,112,522 | |||||||||
1,172,900 | Maxim Integrated Products, Inc. | 41,356,454 | |||||||||
89,468,976 | |||||||||||
Semiconductor Equipment - 0.7% | |||||||||||
1,367,775 | ASM Lithography Holding N.V. (U.S. Shares)*,** | , | # | 28,928,441 | |||||||
Soap and Cleaning Preparations - 0.6% | |||||||||||
630,416 | Reckitt Benckiser PLC** | 22,980,444 | |||||||||
Steel - Producers - 1.4% | |||||||||||
3,934,530 | Tata Steel, Ltd. | 55,569,759 | |||||||||
Sugar - 0.3% | |||||||||||
1,029,334 | Bajaj Hindusthan, Ltd. | 11,837,341 |
See Notes to Schedules of Investments and Financial Statements.
26 Janus Growth Funds April 30, 2006
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Telecommunication Services - 0.8% | |||||||||||
922,665 | Amdocs, Ltd. (U.S. Shares)*,** | $ | 34,323,138 | ||||||||
Television - 0.5% | |||||||||||
2,244,737 | British Sky Broadcasting Group PLC**,# | 21,510,801 | |||||||||
Therapeutics - 1.7% | |||||||||||
307,245 | Gilead Sciences, Inc.* | 17,666,588 | |||||||||
330,785 | Neurocrine Biosciences, Inc.* | 18,973,828 | |||||||||
532,528 | United Therapeutics Corp.* | 31,712,042 | |||||||||
68,352,458 | |||||||||||
Tobacco - 0.5% | |||||||||||
268,995 | Altria Group, Inc. | 19,679,674 | |||||||||
Toys - 0.5% | |||||||||||
1,121,082 | Marvel Entertainment, Inc.*,# | 21,872,310 | |||||||||
Transportation - Railroad - 0.3% | |||||||||||
264,370 | Canadian National Railway Co. (U.S. Shares)** | 11,872,857 | |||||||||
Transportation - Services - 2.3% | |||||||||||
1,141,050 | United Parcel Service, Inc. - Class B | 92,504,924 | |||||||||
Transportation - Truck - 0.4% | |||||||||||
417,970 | Landstar System, Inc. | 17,759,545 | |||||||||
Web Hosting/Design - 0.4% | |||||||||||
270,699 | Equinix, Inc.* | 17,839,064 | |||||||||
Web Portals/Internet Service Providers - 2.1% | |||||||||||
80,415 | Google, Inc. - Class A* | 33,608,645 | |||||||||
1,551,860 | Yahoo!, Inc.*,# | 50,869,971 | |||||||||
84,478,616 | |||||||||||
Wireless Equipment - 1.7% | |||||||||||
570,765 | Crown Castle International Corp.* | 19,206,242 | |||||||||
953,455 | QUALCOMM, Inc. | 48,950,380 | |||||||||
68,156,622 | |||||||||||
Total Common Stock (cost $3,464,684,973) | 3,877,716,488 | ||||||||||
Equity-Linked Structured Notes - 0.9% | |||||||||||
Finance - Investment Bankers/Brokers - 0.9% | |||||||||||
858,580 | Morgan Stanley Co., convertible (Celgene Corp.), 0% (144A)§ (cost $30,050,300) | 34,626,531 | |||||||||
Money Market - 2.0% | |||||||||||
80,000,000 | Janus Institutional Cash Reserves Fund 4.83% (cost $80,000,000) | 80,000,000 | |||||||||
Other Securities - 9.7% | |||||||||||
5,354,957 | Foreign Bonds† | 5,354,957 | |||||||||
388,879,576 | State Street Navigator Securities Lending Prime Portfolio† | 388,879,576 | |||||||||
Total Other Securities (cost $394,234,533) | 394,234,533 |
Shares or Principal Amount | Value | ||||||||||
Time Deposit - 0.3% | |||||||||||
$ | 13,400,000 | ING Financial, ETD 4.86%, 5/1/06 (cost $13,400,000) | $ | 13,400,000 | |||||||
Total Investments (total cost $3,982,369,806) – 108.7% | 4,399,977,552 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (8.7)% | (352,647,579 | ) | |||||||||
Net Assets – 100% | $ | 4,047,329,973 |
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Bermuda | $ | 97,177,026 | 2.2 | % | |||||||
Brazil | 10,287,494 | 0.2 | % | ||||||||
Canada | 74,412,303 | 1.7 | % | ||||||||
Cayman Islands | 26,765,917 | 0.6 | % | ||||||||
France | 24,046,650 | 0.5 | % | ||||||||
Germany | 66,231,372 | 1.4 | % | ||||||||
Hong Kong | 24,951,498 | 0.6 | % | ||||||||
India | 102,181,614 | 2.3 | % | ||||||||
Israel | 51,004,699 | 1.2 | % | ||||||||
Japan | 21,748,151 | 0.5 | % | ||||||||
Netherlands | 28,928,441 | 0.7 | % | ||||||||
Singapore | 26,457,335 | 0.6 | % | ||||||||
South Korea | 40,176,426 | 0.9 | % | ||||||||
Spain | 25,078,094 | 0.6 | % | ||||||||
Switzerland | 109,600,853 | 2.5 | % | ||||||||
United Kingdom | 109,103,100 | 2.5 | % | ||||||||
United States†† | 3,561,826,579 | 81.0 | % | ||||||||
Total | $ | 4,399,977,552 | 100.0 | % |
†† Includes Short-Term Securities and Other Securities (69.9% excluding Short-Term Securities and Other Securities)
Forward Currency Contracts, Open
Currency Sold and Settlement Date | Currency Units Sold | Currency Value in $ U.S. | Unrealized Gain/(Loss) | ||||||||||||
British Pound 6/28/06 | 7,000,000 | $ | 12,773,699 | $ | (334,699 | ) | |||||||||
British Pound 10/19/06 | 13,000,000 | 23,766,289 | (494,859 | ) | |||||||||||
Canadian Dollar 6/28/06 | 7,500,000 | 6,721,193 | (150,891 | ) | |||||||||||
Euro 6/28/06 | 8,100,000 | 10,257,559 | (233,323 | ) | |||||||||||
Euro 8/24/06 | 41,080,000 | 52,199,141 | (1,823,249 | ) | |||||||||||
Euro 10/19/06 | 4,500,000 | 5,736,498 | (84,926 | ) | |||||||||||
Japanese Yen 8/24/06 | 950,000,000 | 8,484,227 | (84,803 | ) | |||||||||||
South Korean Won 10/19/06 | 17,750,000,000 | 18,937,778 | (99,889 | ) | |||||||||||
Swiss Franc 6/28/06 | 57,800,000 | 46,924,040 | (530,026 | ) | |||||||||||
Total | $ | 185,800,424 | $ | (3,836,665 | ) |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2006 27
Janus Olympus Fund (unaudited)
Ticker: JAOLX
Fund Snapshot
This growth fund invests in what we believe are the market leaders in their respective industries.
Claire Young
portfolio manager
Performance Overview
Equity markets were volatile in the fourth quarter of 2005, as investors confronted uneven economic growth and rising interest rates. Consumer confidence continued to recover from its post-hurricane lows, despite relatively lackluster retail spending during the holiday season. New hiring was restrained and there were signs that higher interest rates were starting to temper the strength in home buying. In the first quarter of 2006, however, equity markets posted solid gains, supported by healthy earnings reports, retreating energy prices and resilient economic growth. Indeed, the performance of the economy remained impressive, especially this late into a Federal Reserve (Fed) credit tightening cycle. Consumer spending and housing market activity continued at a healthy, albeit more moderate pace, and corporations projected increases in capital investment. Meanwhile, inflat ion remained relatively benign by historic standards, despite spikes in fuel prices both at the end of last year and in the first three months of this year. As the Fed continued to step up overnight lending rates, investors began to hope for a near-term end to credit tightening.
Against this backdrop, Janus Olympus Fund advanced 10.11%, outpacing both its primary and secondary benchmarks, the Russell 1000® Growth Index and the S&P 500® Index, which returned 7.06% and 9.64%, respectively.
Contributors to Fund Performance
Biotechnology company Celgene was the Fund's strongest contributor, reflecting the expanding market opportunities tied to its cancer drug, Revlimid. Originally formulated as a drug for blood-borne cancers, Revlimid has shown potential in the treatment of leukemia and non-Hodgkin's lymphoma. Specifically, Revlimid has shown the ability to slow disease progression and enable patients to remain transfusion independent for over two years. We believe the drug will be approved for these additional uses by the Food and Drug Administration in the coming year, which should boost sales and profits significantly.
Another standout was Deutsche Boerse, owner of the Frankfurt Stock Exchange. The German company continues to capitalize on growth in the European financial derivatives market, and recently reported an 80% surge in quarterly earnings. Deutsche Boerse has also benefited from consolidation in the European exchange market, and we believe its hybrid floor-and-electronic trading operation may prove to be the model for other exchanges around the world. We are impressed with the company's business prospects, positioning and valuation, as well as its commitment to returning cash to shareholders in the form of stock repurchase and dividends.
The Fund remains significantly overweight in the healthcare arena, where one of our strongest performers was Intuitive Surgical, maker of the innovative Da Vinci automated surgical system. With this system surgeons use computer-guided robotic arms to pinpoint their procedures, allowing for smaller incisions, shorter hospital stays and speedier recoveries. We particularly like this company because it not only makes money on the initial sale of the system, but also from consumables that must be replaced after every few procedures.
Among our technology holdings, we benefited from our stake in Germany's SAP, the world's largest seller of business applications software. SAP continues to project double-digit growth in licensing revenues and earnings, and recently captured investor attention with its plans to enter the fast-growing market for on-demand, subscription-based business applications software. Such online software has become a popular alternative with end-users, given the minimal upfront investment and quick turnaround time.
We also benefited from a rebound in shares of Research in Motion, maker of the BlackBerry wireless email system. The company was able to settle a patent infringement suit brought by rival NTP, avoiding an injunction on sales of its popular BlackBerry device. We anticipate investor subscriber growth to rebound now that uncertainty over the future of the BlackBerry service has lifted.
Detractors from Fund Performance
On the downside, high-end grocery chain Whole Foods Market stumbled as recent operating performance was stunted by costs associated with the rollout if its new higher-volume, higher-margin stores. The company is refining its store model to a larger, "higher return-on-investment" format with unique prepared food offerings that attempt to generate excitement and intense loyalty among its customers. We expect these new venues to bolster the company's profitability going forward.
28 Janus Growth Funds April 30, 2006
(unaudited)
With only 3% market share of total U.S. grocery sales, we believe Whole Foods has tremendous growth potential over the next several years as the company penetrates new markets.
Also detracting from performance was Internet search and media company Yahoo!, which lost favor with investors after reporting fourth-quarter financial results that only met expectations. However, Yahoo! has benefited from the ongoing migration of advertising dollars from traditional media into the growing Internet space, which allows advertisers to better target and track media spending. We remain confident in the underlying fundamentals supporting Yahoo!, and we will continue to closely monitor their valuations.
Looking Ahead
In my opinion the economy has remained surprisingly robust despite many headwinds – devastation from Hurricane Katrina, high budget deficits that at some point will impact monetary policy, moderating consumer demand due to high oil prices and slowing house price appreciation, and corporate profit squeezes from rising raw material prices and weak end-user pricing ability. We remain cautiously optimistic on the economic and market outlook and believe that the economy will continue to grow, albeit at a slower pace. Moreover, we believe that the Federal Reserve may be close to ending this round of credit tightening, which could help alleviate some market uncertainty. In this environment, we expect to see the market continue to favor companies that provide strong earnings growth despite these impediments, so the Fund remains invested predominantly in stocks that we belie ve can grow organically and have specific catalysts to improve shareholder value.
Thank you for your continued investment in Janus Olympus Fund.
Janus Olympus Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Celgene Corp. Biopharmaceutical company - U.S. | 1.84 | % | |||||
Deutsche Boerse A.G. Marketplace organizer for the trading of shares & securities - Germany | 0.72 | % | |||||
Intuitive Surgical, Inc. Medical equipment manufacturer - U.S. | 0.71 | % | |||||
Research In Motion, Ltd. (U.S. Shares) Wireless solutions provider for mobile communications - U.S. | 0.54 | % | |||||
SAP A.G. (ADR) Software company - Germany | 0.49 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Whole Foods Market, Inc. Natural food supermarkets owner/operator - U.S. | (0.36 | %) | |||||
Yahoo!, Inc. Global Internet media company - U.S. | (0.36 | %) | |||||
Alcon, Inc. (U.S. Shares) Eye care company - U.S. | (0.31 | %) | |||||
UnitedHealth Group, Inc. Organized health systems company - U.S. | (0.29 | %) | |||||
United Therapeutics Corp. Pharmaceutical developer - U.S. | (0.22 | %) |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Pharmaceuticals & Biotechnology | 2.12 | % | 16.74 | % | 7.88 | % | |||||||||
Diversified Financials | 2.06 | % | 8.35 | % | 8.08 | % | |||||||||
Technology Hardware & Equipment | 1.18 | % | 8.76 | % | 7.04 | % | |||||||||
Software & Services | 1.04 | % | 14.94 | % | 5.44 | % | |||||||||
Automobiles & Components | 0.83 | % | 2.36 | % | 0.56 | % |
5 Lowest Contributors/Detractors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Food & Staples Retailing | (0.55 | %) | 4.26 | % | 2.38 | % | |||||||||
Retailing | (0.02 | %) | 2.25 | % | 3.59 | % | |||||||||
Media | 0.00 | % | 1.26 | % | 3.32 | % | |||||||||
Utilities | 0.00 | % | 0.10 | % | 3.30 | % | |||||||||
Other* | 0.00 | % | 0.00 | % | 0.00 | % |
* Industry not classified by Global Industry Classification Standard.
Janus Growth Funds April 30, 2006 29
Janus Olympus Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2006 |
Celgene Corp. Medical - Biomedical and Genetic | 4.5 | % | |||||
Yahoo!, Inc. Web Portal/Internet Service Providers | 3.0 | % | |||||
Whole Foods Market, Inc. Food - Retail | 2.9 | % | |||||
Roche Holding A.G. Medical - Drugs | 2.4 | % | |||||
SAP A.G. (ADR) Enterprise Software/Services | 2.0 | % | |||||
14.8 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2006 |
Emerging markets comprised 4.2% of total net assets.
5 Largest Country Allocations – (% of Investment Securities)
As of April 30, 2006 | As of October 31, 2005 | ||||||
![]() | ![]() | ||||||
30 Janus Growth Funds April 30, 2006
(unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | |||||||||||||||||||
Janus Olympus Fund | 10.11 | % | 26.44 | % | 0.45 | % | 9.78 | % | 11.77 | % | |||||||||||||
Russell 1000® Growth Index | 7.06 | % | 15.18 | % | (0.76 | )% | 6.21 | % | 6.81 | % | |||||||||||||
S&P 500® Index | 9.64 | % | 15.42 | % | 2.70 | % | 8.94 | % | 9.34 | % | |||||||||||||
Lipper Quartile | N/A | 2 | nd | 3 | rd | 2 | nd | 1 | st | ||||||||||||||
Lipper Ranking - based on total return for Multi-Cap Growth Funds | N/A** | 186/423 | 188/288 | 25/95 | 13/88 |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes 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.
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.
*The Fund's inception date – December 29, 1995
**The Fund's fiscal year-to-date Lipper ranking is not available.
See "Explanations of Charts, Tables and Financial Statements."
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,101.10 | $ | 5.11 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.93 | $ | 4.91 |
*Expenses are equal to the annualized expense ratio of 0.98%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Janus Growth Funds April 30, 2006 31
Janus Olympus Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Common Stock - 95.4% | |||||||||||
Advertising Sales - 0.8% | |||||||||||
349,435 | Lamar Advertising Co.* | $ | 19,215,431 | ||||||||
Aerospace and Defense - 1.4% | |||||||||||
419,960 | Boeing Co. | 35,045,662 | |||||||||
Agricultural Chemicals - 1.5% | |||||||||||
380,045 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 35,982,661 | |||||||||
Apparel Manufacturers - 1.7% | |||||||||||
724,460 | Coach, Inc.* | 23,921,669 | |||||||||
1,244,295 | Quiksilver, Inc.*,# | 17,009,513 | |||||||||
40,931,182 | |||||||||||
Applications Software - 1.2% | |||||||||||
415,425 | Citrix Systems, Inc.* | 16,583,766 | |||||||||
783,515 | Quest Software, Inc.*,# | 13,484,293 | |||||||||
30,068,059 | |||||||||||
Automotive - Cars and Light Trucks - 1.9% | |||||||||||
446,264 | BMW A.G.**,# | 24,293,868 | |||||||||
1,570,600 | Nissan Motor Company, Ltd. | 20,648,911 | |||||||||
44,942,779 | |||||||||||
Building - Mobile Home and Manufactured Homes - 0.6% | |||||||||||
293,600 | Thor Industries, Inc. | 14,820,928 | |||||||||
Building - Residential and Commercial - 1.4% | |||||||||||
340,620 | Desarrolladora Homex S.A. (ADR)*,# | 13,052,558 | |||||||||
577,560 | Pulte Homes, Inc. | 21,571,866 | |||||||||
34,624,424 | |||||||||||
Casino Hotels - 1.0% | |||||||||||
295,055 | Harrah's Entertainment, Inc. | 24,088,290 | |||||||||
Casino Services - 1.2% | |||||||||||
760,705 | Scientific Games Corp. - Class A*,# | 28,975,253 | |||||||||
Cellular Telecommunications - 0.9% | |||||||||||
3,537,500 | China Mobile, Ltd. | 20,577,206 | |||||||||
Commercial Banks - 1.4% | |||||||||||
3,998 | Mizuho Financial Group, Inc. | 34,093,514 | |||||||||
Commercial Services - 1.8% | |||||||||||
351,488 | CoStar Group, Inc.* | 19,841,498 | |||||||||
640,200 | Park24 Company, Ltd. | 23,164,484 | |||||||||
43,005,982 | |||||||||||
Commercial Services - Finance - 0.3% | |||||||||||
134,845 | Moody's Corp. | 8,361,738 | |||||||||
Computer Services - 0.7% | |||||||||||
727,075 | Ceridian Corp.* | 17,617,027 | |||||||||
Computers - 1.0% | |||||||||||
115,210 | Apple Computer, Inc.* | 8,109,632 | |||||||||
206,600 | Research In Motion, Ltd. (U.S. Shares)*,# | 15,831,758 | |||||||||
23,941,390 | |||||||||||
Computers - Memory Devices - 2.8% | |||||||||||
1,923,395 | EMC Corp.* | 25,985,066 | |||||||||
659,430 | SanDisk Corp.* | 42,091,417 | |||||||||
68,076,483 | |||||||||||
Cosmetics and Toiletries - 0.9% | |||||||||||
356,215 | Procter & Gamble Co. | 20,735,275 |
Shares or Principal Amount | Value | ||||||||||
Data Processing and Management - 1.1% | |||||||||||
621,370 | NAVTEQ Corp.*,# | $ | 25,799,282 | ||||||||
Diagnostic Kits - 1.3% | |||||||||||
778,776 | Dade Behring Holdings, Inc.# | 30,372,264 | |||||||||
E-Commerce/Products - 0.7% | |||||||||||
265,600 | Submarino S.A.* | 7,190,417 | |||||||||
193,300 | Submarino S.A. (GDR)* | 10,352,471 | |||||||||
17,542,888 | |||||||||||
E-Commerce/Services - 0.9% | |||||||||||
605,320 | eBay, Inc.* | 20,829,061 | |||||||||
Electronic Components - Semiconductors - 2.6% | |||||||||||
366,485 | Advanced Micro Devices, Inc.* | 11,855,790 | |||||||||
550,855 | Broadcom Corp. - Class A*,# | 22,645,649 | |||||||||
1,182,935 | PMC-Sierra, Inc.*,# | 14,703,882 | |||||||||
418,055 | Texas Instruments, Inc. | 14,510,689 | |||||||||
63,716,010 | |||||||||||
Electronic Forms - 1.6% | |||||||||||
972,230 | Adobe Systems, Inc.* | 38,111,416 | |||||||||
Electronic Measuring Instruments - 0.3% | |||||||||||
138,354 | Trimble Navigation, Ltd.*,# | 6,555,213 | |||||||||
Energy - Alternate Sources - 0.5% | |||||||||||
380,300 | Suntech Power Holdings Company, Ltd. (ADR)*,# | 13,040,487 | |||||||||
Enterprise Software/Services - 2.0% | |||||||||||
896,610 | SAP A.G. (ADR)**,# | 48,981,804 | |||||||||
Entertainment Software - 1.4% | |||||||||||
601,425 | Electronic Arts, Inc.* | 34,160,940 | |||||||||
Finance - Credit Card - 2.4% | |||||||||||
451,595 | American Express Co. | 24,300,327 | |||||||||
644,600 | Credit Saison Company, Ltd. | 33,796,707 | |||||||||
58,097,034 | |||||||||||
Finance - Investment Bankers/Brokers - 6.0% | |||||||||||
137,715 | Goldman Sachs Group, Inc. | 22,074,337 | |||||||||
400,110 | Merrill Lynch & Company, Inc. | 30,512,389 | |||||||||
1,313,000 | Mitsubishi UFJ Securities Company, Ltd. | 20,686,971 | |||||||||
1,018,000 | Nikko Cordial Corp. | 16,477,179 | |||||||||
695,760 | optionsXpress Holdings, Inc. | 21,916,440 | |||||||||
284,577 | UBS A.G.**,# | 33,730,704 | |||||||||
145,398,020 | |||||||||||
Finance - Mortgage Loan Banker - 1.0% | |||||||||||
486,030 | Fannie Mae | 24,593,118 | |||||||||
Finance - Other Services - 2.7% | |||||||||||
41,825 | Chicago Mercantile Exchange Holdings, Inc.# | 19,155,850 | |||||||||
311,293 | Deutsche Boerse A.G.**,# | 45,026,421 | |||||||||
64,182,271 | |||||||||||
Food - Retail - 3.3% | |||||||||||
1,155,474 | Whole Foods Market, Inc. | 70,922,994 | |||||||||
530,681 | Wild Oats Markets, Inc.*,# | 9,117,100 | |||||||||
80,040,094 | |||||||||||
Food - Wholesale/Distribution - 1.0% | |||||||||||
777,745 | Sysco Corp.# | 23,246,798 | |||||||||
Hazardous Waste Disposal - 0.9% | |||||||||||
319,270 | Stericycle, Inc.*,# | 21,020,737 |
See Notes to Schedules of Investments and Financial Statements.
32 Janus Growth Funds April 30, 2006
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Hotels and Motels - 1.7% | |||||||||||
762,355 | Four Seasons Hotels, Inc. | $ | 41,182,417 | ||||||||
Insurance Brokers - 0.9% | |||||||||||
732,500 | Marsh & McLennan Companies, Inc.# | 22,465,775 | |||||||||
Internet Infrastructure Software - 0.4% | |||||||||||
1,039,960 | TIBCO Software, Inc.*,# | 8,964,455 | |||||||||
Internet Security - 0.8% | |||||||||||
699,225 | McAfee, Inc.*,# | 18,242,780 | |||||||||
Medical - Biomedical and Genetic - 5.2% | |||||||||||
2,549,272 | Celgene Corp.* | 107,477,308 | |||||||||
242,310 | Genentech, Inc.* | 19,314,530 | |||||||||
126,791,838 | |||||||||||
Medical - Drugs - 4.5% | |||||||||||
695,145 | Cubist Pharmaceuticals, Inc.* | 15,758,937 | |||||||||
1,009,100 | Merck & Company, Inc. | 34,733,222 | |||||||||
377,310 | Roche Holding A.G.** | 58,017,269 | |||||||||
108,509,428 | |||||||||||
Medical - Generic Drugs - 1.8% | |||||||||||
1,084,650 | Teva Pharmaceutical Industries, Ltd. (ADR)# | 43,928,325 | |||||||||
Medical - HMO - 1.8% | |||||||||||
392,985 | Coventry Health Care, Inc.* | 19,519,565 | |||||||||
460,692 | UnitedHealth Group, Inc. | 22,914,820 | |||||||||
42,434,385 | |||||||||||
Medical Instruments - 2.6% | |||||||||||
798,685 | Boston Scientific Corp.*,# | 18,561,439 | |||||||||
249,735 | Intuitive Surgical, Inc.* | 31,716,345 | |||||||||
277,025 | Kyphon, Inc.*,# | 11,510,389 | |||||||||
61,788,173 | |||||||||||
Medical Products - 2.1% | |||||||||||
244,675 | Johnson & Johnson | 14,340,402 | |||||||||
684,915 | Varian Medical Systems, Inc.*,# | 35,875,847 | |||||||||
50,216,249 | |||||||||||
Networking Products - 1.9% | |||||||||||
1,726,842 | Cisco Systems, Inc.* | 36,177,340 | |||||||||
566,035 | Juniper Networks, Inc.*,# | 10,460,327 | |||||||||
46,637,667 | |||||||||||
Oil Companies - Exploration and Production - 0.8% | |||||||||||
260,860 | EOG Resources, Inc.# | 18,320,198 | |||||||||
Publishing - Newspapers - 1.0% | |||||||||||
638,835 | Dow Jones & Company, Inc.# | 23,617,730 | |||||||||
Radio - 0.5% | |||||||||||
559,165 | XM Satellite Radio Holdings, Inc.- Class A*,# | 11,306,316 | |||||||||
Real Estate Management/Services - 0.4% | |||||||||||
416,000 | Mitsubishi Estate Company, Ltd. | 9,097,089 | |||||||||
Retail - Apparel and Shoe - 1.0% | |||||||||||
640,935 | Nordstrom, Inc.# | 24,567,039 | |||||||||
Retail - Discount - 1.0% | |||||||||||
552,765 | Wal-Mart Stores, Inc. | 24,891,008 |
Shares or Principal Amount | Value | ||||||||||
Retail - Drug Store - 0.6% | |||||||||||
517,275 | CVS Corp. | $ | 15,373,413 | ||||||||
Retail - Restaurants - 0.1% | |||||||||||
133,385 | Tim Hortons, Inc. (U.S. Shares)*,# | 3,621,403 | |||||||||
Schools - 0.9% | |||||||||||
417,795 | Apollo Group, Inc. - Class A*,# | 22,828,319 | |||||||||
Semiconductor Components/Integrated Circuits - 0.6% | |||||||||||
869,670 | Cypress Semiconductor Corp.*,# | 14,923,537 | |||||||||
Semiconductor Equipment - 0.7% | |||||||||||
743,460 | ASM Lithography Holding N.V. (U.S. Shares)*,**,# | 15,724,179 | |||||||||
Soap and Cleaning Preparations - 0.8% | |||||||||||
538,650 | Reckitt Benckiser PLC** | 19,635,314 | |||||||||
Telecommunication Services - 0.3% | |||||||||||
482,000 | Time Warner Telecom, Inc. - Class A*,# | 8,083,140 | |||||||||
Therapeutics - 2.5% | |||||||||||
642,369 | Neurocrine Biosciences, Inc.* | 36,846,286 | |||||||||
408,925 | United Therapeutics Corp.* | 24,351,484 | |||||||||
61,197,770 | |||||||||||
Transportation - Services - 2.7% | |||||||||||
690,155 | C.H. Robinson Worldwide, Inc.# | 30,608,374 | |||||||||
439,755 | United Parcel Service, Inc. - Class B | 35,650,938 | |||||||||
66,259,312 | |||||||||||
Web Portals/Internet Service Providers - 3.0% | |||||||||||
2,198,520 | Yahoo!, Inc.* | 72,067,486 | |||||||||
Wireless Equipment - 2.6% | |||||||||||
1,008,275 | Crown Castle International Corp.*,# | 33,928,454 | |||||||||
574,635 | QUALCOMM, Inc. | 29,501,761 | |||||||||
63,430,215 | |||||||||||
Total Common Stock (cost $1,787,420,204) | 2,306,895,681 | ||||||||||
Preferred Stock - 1.1% | |||||||||||
Electronic Components - Semiconductors - 1.1% | |||||||||||
48,870 | Samsung Electronics Company, Ltd. (cost $18,295,111) | 26,476,431 | |||||||||
Money Market - 2.1% | |||||||||||
50,000,000 | Janus Institutional Cash Reserves Fund 4.83% (cost $50,000,000) | 50,000,000 | |||||||||
Other Securities - 13.1% | |||||||||||
316,899,102 | State Street Navigator Securities Lending Prime Portfolio† (cost $316,899,102) | 316,899,102 | |||||||||
Time Deposit - 0.8% | |||||||||||
$ | 19,900,000 | ING Financial, ETD 4.86%, 5/1/06 (cost $19,900,000) | 19,900,000 | ||||||||
Total Investments (total cost $2,192,514,417) – 112.5% | 2,720,171,214 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (12.5)% | (302,136,913 | ) | |||||||||
Net Assets – 100% | $ | 2,418,034,301 |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2006 33
Janus Olympus Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Brazil | $ | 17,542,888 | 0.6 | % | |||||||
Canada | 96,618,239 | 3.6 | % | ||||||||
Cayman Islands | 13,040,487 | 0.5 | % | ||||||||
Germany | 118,302,093 | 4.3 | % | ||||||||
Hong Kong | 20,577,206 | 0.7 | % | ||||||||
Israel | 43,928,325 | 1.6 | % | ||||||||
Japan | 157,964,855 | 5.8 | % | ||||||||
Mexico | 13,052,558 | 0.5 | % | ||||||||
Netherlands | 15,724,179 | 0.6 | % | ||||||||
South Korea | 26,476,431 | 1.0 | % | ||||||||
Switzerland | 91,747,973 | 3.4 | % | ||||||||
United Kingdom | 19,635,314 | 0.7 | % | ||||||||
United States†† | 2,085,560,666 | 76.7 | % | ||||||||
Total | $ | 2,720,171,214 | 100.0 | % |
†† Includes Short-Term Securities and Other Securities (62.5% excluding Short-Term Securities and Other Securities)
Forward Currency Contracts, Open
Currency Sold and Settlement Date | Currency Units Sold | Currency Value in $ U.S. | Unrealized Gain/(Loss) | ||||||||||||
British Pound 6/28/06 | 4,600,000 | $ | 8,394,145 | $ | (167,735 | ) | |||||||||
British Pound 8/10/06 | 400,000 | 730,440 | (35,396 | ) | |||||||||||
Euro 6/28/06 | 28,750,000 | 36,408,001 | (828,151 | ) | |||||||||||
Euro 10/19/06 | 10,500,000 | 13,385,163 | (198,160 | ) | |||||||||||
Swiss Franc 6/28/06 | 57,500,000 | 46,680,489 | (503,169 | ) | |||||||||||
Swiss Franc 8/10/06 | 4,000,000 | 3,262,057 | (163,299 | ) | |||||||||||
Total | $ | 108,860,295 | $ | (1,895,910 | ) |
See Notes to Schedules of Investments and Financial Statements.
34 Janus Growth Funds April 30, 2006
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.
Ron Sachs
portfolio manager
Performance Overview
Equity markets roared out of the gate in early 2006, and I am happy to report that the stocks we held in Janus Orion Fund performed well. The Fund was up 22.45% during the six-month period ended April 30, 2006, versus a return of 8.19% for the Fund's primary benchmark, the Russell 3000® Growth Index, and a return of 9.64% for the S&P 500® Index, the Fund's secondary benchmark. More importantly, longer-term performance has also been strong. Janus Orion Fund was up 10.72%, annualized for the five-year period ended April 30, 2006, versus a loss of 0.22% for the Russell 3000® Growth Index and a return of 2.70% for the S&P 500® Index.
Investment Strategy
I believe it's important to invest with a longer time horizon in mind and have therefore been working to focus on the long term for each stock we analyze and own in the Fund. Few investors focus on the long-term because it is very difficult to do. I must admit that ignoring the short-term noise is challenging when almost every waking hour is spent thinking about companies, stocks and the market. Even the academic literature on investment psychology demonstrates that a short-term focus is wired into our "investment-DNA." The more I understand how this myopia colors investment decision making, the more I believe that taking advantage of the mistakes caused by short-term thinking may lead to good results. That said, it is difficult to ignore some short-term data points on companies in the Fund that I believe are material to stock price movements. Don't expect me to completely disregard the short-term, but do expect me to endeavor to focus more of my analysis on the long-term. I believe thinking about the long-term competitive positioning of the businesses we own is my strength and the strength of the entire Janus research team.
Products of this thinking can be seen in our investments. We own some fast-growing companies with very wide competitive moats that have protected their businesses. Examples and important contributors to the Fund include VistaPrint, Intuitive Surgical and Celgene. I realize that the short-term thinking of the market can lead to short-term volatility in these positions because the stocks appear expensive relative to near-term earnings expectations, but I truly believe that the best strategy is to establish positions in these great businesses for the long-term., I adjust position sizes in an attempt to take advantage of opportunities the market may give us and to reflect the risk of near-term volatility. At the same time, I try not to let the fear of short-term volatility cause me to miss the best long-term opportunities where our valuation models indicate the potential for a significant increase in valuation. For a variety of reasons, most pro fessional investment managers are especially sensitive to short-term volatility in individual holdings – I take advantage of the investment opportunities that their individual position myopia present to us.
You will notice that the number of holdings in the Fund has increased. I am troubled by this. I believe the best investment strategy is to build a concentrated portfolio where our best ideas are meaningful positions that can make a significant impact on the Fund. Position size should increase with our level of conviction that the risk/reward tradeoff for owning the stock is heavily skewed in our favor. You and I both want the best ideas to be big enough positions to impact positive Fund returns. Another way of explaining my view on portfolio concentration is that I believe our 100th best idea should be sold to increase position sizes in our 99 better ideas, if we have conviction in those ideas.
As of April 30, 2006, the Fund is less concentrated than I would like primarily because strong performance has changed the risk/reward tradeoff in many holdings. Also, a number of interesting new ideas were small positions in the Fund during the period. I intend to either develop the conviction to make these positions bigger or to determine through further analysis that the stocks aren't the best risk/reward tradeoffs available and sell them, which may lead to a more concentrated portfolio.
Celgene, ABB and Trimble Navigation Were Important Contributors
Celgene, a leading developer of cancer compounds, was a big contributor to the Fund. Celgene's progress in demonstrating the opportunity for its existing and new compounds for the treatment of a variety of cancers has been rewarded by the market. In my opinion, the market continues to underestimate the size of the opportunity for Celgene's compounds and the profitability of its business model. That said, I believe the risk/reward tradeoff in the stock has changed as its shares have rapidly appreciated. As a result, I may look for opportunities to take profits and reinvest the proceeds in more compelling ideas.
ABB, a leading supplier of electricity transmission and distribution systems based in Zurich, Switzerland, was a standout performer. The company has had continued success in improving margins, as it rationalizes its production facilities and takes advantage of a sustained environment of strong demand to drive improved pricing. ABB's leading market position and technological leadership enable the company to earn attractive returns. I believe the global demand for electricity should continue to grow at multiples of the rate of
Janus Growth Funds April 30, 2006 35
Janus Orion Fund (unaudited)
economic growth, providing a tailwind to the operational improvements the company is working to deliver.
Trimble Navigation was another strong performer. Trimble is a leader in GPS systems for industrial, farming, mining and construction industries. I believe the complexity of these systems and the distribution relationships Trimble has established with heavy equipment suppliers to these industries will create a long-term barrier to competition. Use of GPS gives Trimble customers a high return on investment because Trimble systems drive cost savings in terms of fewer hours of labor and fewer mistakes that need to be corrected. GPS system penetration in these markets remains very low, despite the great results these systems have delivered. That low penetration gives me confidence that Trimble should continue to demonstrate strong growth.
Yahoo! Detracted from Performance
Yahoo!, a leading search engine and online media provider, was the largest detractor from performance for the period. I believe Yahoo!'s large base of regular and registered users is a long-term competitive advantage. The company will soon restructure its paid-search algorithm with the goals of driving more relevant search results and higher revenues from each search. We expect to see these improvements later in 2006 and 2007, and the stock market may wait for clear evidence that the improved revenue generation strategies are working before rewarding Yahoo! shareholders. We don't believe the company's stock price reflects either the short-term opportunity to dramatically improve revenues from paid search or the longer-term opportunity to drive more traditional display advertising. We waited for a pullback in the shares for our buying opportunity, but were clearly prematu re.
Looking Forward
I remain optimistic that we can continue to identify great businesses at reasonable prices in our attempt to deliver strong results in varying economic environments. I look forward to continuing to update you on the Fund's performance.
Thank you for your investment in Janus Orion Fund.
Janus Orion Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Celgene Corp. Biopharmaceutical company - U.S. | 2.25 | % | |||||
ABB, Ltd. Holding company - U.S. | 1.61 | % | |||||
Arcelor Brasil S.A. Steel producer - Brazil | 1.60 | % | |||||
Finansbank A.S. International banking network - Turkey | 1.19 | % | |||||
Trimble Navigation, Ltd. Developer of advanced positioning product (GPS) solutions - U.S. | 1.12 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Yahoo!, Inc. Global Internet media company - U.S. | (0.49 | %) | |||||
XM Satellite Radio Holdings, Inc. - Class A Audio entertainment provider - U.S. | (0.47 | %) | |||||
United Therapeutics Corp. Pharmaceutical developer - U.S. | (0.42 | %) | |||||
Taro Pharmaceutical Industries, Ltd. Pharmaceutical company - U.S. | (0.39 | %) | |||||
CNET Networks, Inc. Global web information provider - U.S. | (0.27 | %) |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Materials | 3.02 | % | 7.07 | % | 3.01 | % | |||||||||
Retailing | 2.46 | % | 8.13 | % | 3.59 | % | |||||||||
Banks | 1.82 | % | 3.90 | % | 7.48 | % | |||||||||
Pharmaceuticals & Biotechnology | 1.72 | % | 12.04 | % | 7.88 | % | |||||||||
Food, Beverage & Tobacco | 1.67 | % | 3.29 | % | 4.61 | % |
5 Lowest Contributors/Detractors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Media | (0.87 | %) | 2.23 | % | 3.32 | % | |||||||||
Software & Services | (0.25 | %) | 4.26 | % | 5.44 | % | |||||||||
Automobiles & Components | 0.00 | % | 0.00 | % | 0.56 | % | |||||||||
Utilities | 0.00 | % | 0.00 | % | 3.30 | % | |||||||||
Household & Personal Products | 0.02 | % | 0.66 | % | 2.44 | % |
36 Janus Growth Funds April 30, 2006
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2006 |
Dade Behring Holdings, Inc. Diagnostic Kits | 6.7 | % | |||||
Celgene Corp. Medical - Biomedical and Genetic | 4.8 | % | |||||
CapitalSource, Inc. REIT - Mortgages | 4.7 | % | |||||
VistaPrint, Ltd. Printing - Commercial | 4.1 | % | |||||
National Financial Partners Corp. Investment Management and Advisory Services | 4.1 | % | |||||
24.4 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2006 |
Emerging markets comprised 22.3% of total net assets.
5 Largest Country Allocations – (% of Investment Securities)
As of April 30, 2006 | As of October 31, 2005 | ||||||
![]() | ![]() | ||||||
Janus Growth Funds April 30, 2006 37
Janus Orion Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year- to-Date | One Year | Five Year | Since Inception* | ||||||||||||||||
Janus Orion Fund | 22.45 | % | 41.50 | % | 10.72 | % | (0.73 | )% | |||||||||||
Russell 3000® Growth Index | 8.19 | % | 16.90 | % | (0.22 | )% | (6.87 | )% | |||||||||||
S&P 500® Index | 9.64 | % | 15.42 | % | 2.70 | % | (0.16 | )% | |||||||||||
Lipper Quartile | N/A | 1 | st | 1 | st | 2 | nd | ||||||||||||
Lipper Ranking - based on total return for Multi-Cap Growth Funds | N/A** | 11/423 | 8/288 | 61/230 |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes 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.
*The Fund's inception date – June 30, 2000
**The Fund's fiscal year-to-date Lipper ranking is not available.
See "Explanations of Charts, Tables and Financial Statements."
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
The Fund is classified as "nondiversified," meaning it has the ability to take larger positions in a smaller number of issuers than a fund that is classified as "diversified." Nondiversified funds may experience greater price volatility.
Concentration may lead to greater price volatility.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund may have significant exposure to emerging markets. In general, emerging market investments have historically been subject to significant gains and/or losses. As such, the Fund's returns and NAV may be subject to such volatility.
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. This Fund may have significant exposure to emerging markets which may lead to greater price volatility.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
Returns have sustained significant gains due to market volatility in the financials and healthcare sectors.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,224.50 | $ | 5.41 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.93 | $ | 4.91 |
*Expenses are equal to the annualized expense ratio of 0.98%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
38 Janus Growth Funds April 30, 2006
Janus Orion Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Common Stock - 98.9% | |||||||||||
Agricultural Operations - 0.2% | |||||||||||
5,300 | BrasilAgro - Companhia Brasileira de Propriedades Agricolas | $ | 2,507,570 | ||||||||
Beverages - Wine and Spirits - 2.6% | |||||||||||
2,860,628 | Davide Campari - Milano S.P.A. | 27,969,655 | |||||||||
Broadcast Services and Programming - 0.5% | |||||||||||
259,455 | Liberty Global, Inc. - Class A* | 5,373,313 | |||||||||
Building - Residential and Commercial - 1.5% | |||||||||||
381,940 | Desarrolladora Homex S.A. (ADR)*,# | 14,635,940 | |||||||||
98,500 | Rossi Residencial S.A. | 1,038,333 | |||||||||
15,674,273 | |||||||||||
Cellular Telecommunications - 3.3% | |||||||||||
960,000 | America Movil S.A. de C.V. - Series L (ADR)# | 35,433,600 | |||||||||
Chemicals - Specialty - 2.4% | |||||||||||
420,860 | Cytec Industries, Inc.# | 25,449,404 | |||||||||
Commercial Banks - 4.6% | |||||||||||
495,425 | Banco Marcro Bansud S.A. (ADR)* | 11,478,997 | |||||||||
711,000 | Banco Nossa Caixa S.A. | 16,046,047 | |||||||||
4,178,657 | Finansbank A.S.* | 21,801,689 | |||||||||
49,326,733 | |||||||||||
Commercial Services - 2.5% | |||||||||||
487,775 | CoStar Group, Inc.* | 27,534,899 | |||||||||
Computers - 1.6% | |||||||||||
230,715 | Research In Motion, Ltd. (U.S. Shares)* | 17,679,690 | |||||||||
Diagnostic Kits - 6.7% | |||||||||||
1,871,865 | Dade Behring Holdings, Inc.# | 73,002,734 | |||||||||
Diversified Minerals - 2.3% | |||||||||||
13,670,230 | Caemi Mineracao e Metalurgica S.A. | 25,152,699 | |||||||||
E-Commerce/Products - 1.4% | |||||||||||
412,660 | Submarino S.A.* | 11,171,677 | |||||||||
83,000 | Submarino S.A. (GDR)* | 4,445,190 | |||||||||
15,616,867 | |||||||||||
E-Commerce/Services - 3.7% | |||||||||||
1,391,769 | IAC/InterActiveCorp* | 40,180,371 | |||||||||
Electronic Components - Semiconductors - 1.6% | |||||||||||
628,150 | MIPS Technologies, Inc.* | 4,654,592 | |||||||||
378,085 | Texas Instruments, Inc.# | 13,123,330 | |||||||||
17,777,922 | |||||||||||
Electronic Measuring Instruments - 2.1% | |||||||||||
467,890 | Trimble Navigation, Ltd.* | 22,168,628 | |||||||||
Engineering - Research and Development Services - 3.2% | |||||||||||
2,460,267 | ABB, Ltd.*,# | 35,112,664 | |||||||||
Entertainment Software - 0.9% | |||||||||||
190,677 | UbiSoft Entertainment S.A.*,# | 9,449,173 | |||||||||
Finance - Other Services - 3.7% | |||||||||||
62,060 | Chicago Mercantile Exchange Holdings, Inc.# | 28,423,480 | |||||||||
1,001,720 | MarketAxess Holdings, Inc.* | 11,179,195 | |||||||||
39,602,675 | |||||||||||
Home Furnishings - 1.9% | |||||||||||
1,303,305 | Tempur-Pedic International, Inc.*,# | 20,579,186 | |||||||||
Internet Content - Information/News - 0.8% | |||||||||||
835,179 | CNET Networks, Inc.*,# | 9,003,230 |
Shares or Principal Amount | Value | ||||||||||
Investment Management and Advisory Services - 4.1% | |||||||||||
848,945 | National Financial Partners Corp.# | $ | 44,145,140 | ||||||||
Medical - Biomedical and Genetic - 4.8% | |||||||||||
1,228,370 | Celgene Corp.* | 51,788,078 | |||||||||
Medical - Drugs - 2.4% | |||||||||||
168,756 | Roche Holding A.G. | 25,948,854 | |||||||||
Medical - Generic Drugs - 1.6% | |||||||||||
428,390 | Teva Pharmaceutical Industries, Ltd. (ADR)# | 17,349,795 | |||||||||
Medical Instruments - 1.8% | |||||||||||
152,081 | Intuitive Surgical, Inc.* | 19,314,287 | |||||||||
Multi-Line Insurance - 2.5% | |||||||||||
554,210 | Assurant, Inc. | 26,696,296 | |||||||||
Oil Companies - Exploration and Production - 1.3% | |||||||||||
203,950 | EOG Resources, Inc. | 14,323,409 | |||||||||
Oil Companies - Integrated - 1.0% | |||||||||||
76,830 | Amerada Hess Corp.# | 11,007,434 | |||||||||
Printing - Commercial - 4.1% | |||||||||||
1,383,900 | VistaPrint, Ltd.*,# | 44,257,122 | |||||||||
Radio - 1.3% | |||||||||||
684,455 | XM Satellite Radio Holdings, Inc. - Class A*,# | 13,839,680 | |||||||||
REIT - Mortgages - 4.7% | |||||||||||
2,156,342 | CapitalSource, Inc.# | 50,674,037 | |||||||||
Retail - Restaurants - 0.2% | |||||||||||
39,235 | Chipotle Mexican Grill, Inc. - Class A*,# | 2,047,675 | |||||||||
Steel - Producers - 3.6% | |||||||||||
2,118,722 | Arcelor Brasil S.A. | 39,085,193 | |||||||||
Steel - Specialty - 0.8% | |||||||||||
255,689 | Companhia Siderurgica Nacional S.A. (ADR)# | 9,002,810 | |||||||||
Storage and Warehousing - 2.3% | |||||||||||
757,860 | Mobile Mini, Inc.* | 24,994,223 | |||||||||
Sugar - 1.9% | |||||||||||
1,459,110 | Bajaj Hindusthan, Ltd. | 16,779,765 | |||||||||
335,300 | Bajaj Hindusthan, Ltd. (GDR) (144A)§ | 3,854,676 | |||||||||
20,634,441 | |||||||||||
Telecommunication Services - 2.9% | |||||||||||
907,250 | NeuStar, Inc. - Class A*,# | 31,844,475 | |||||||||
Therapeutics - 1.3% | |||||||||||
234,460 | United Therapeutics Corp.* | 13,962,093 | |||||||||
Transportation - Marine - 1.3% | |||||||||||
289,145 | Alexander & Baldwin, Inc.# | 14,419,661 | |||||||||
Transportation - Railroad - 1.1% | |||||||||||
190,500 | All America Latina Logistica (GDR) | 12,049,787 | |||||||||
Transportation - Services - 2.0% | |||||||||||
189,450 | FedEx Corp. | 21,811,379 | |||||||||
Web Hosting/Design - 1.7% | |||||||||||
275,340 | Equinix, Inc.* | 18,144,906 | |||||||||
Web Portals/Internet Service Providers - 2.1% | |||||||||||
22,735 | Answers Corp.* | 275,094 | |||||||||
674,215 | Yahoo!, Inc.* | 22,100,767 | |||||||||
22,375,861 | |||||||||||
Wireless Equipment - 0.6% | |||||||||||
196,465 | Crown Castle International Corp.*# | 6,611,047 | |||||||||
Total Common Stock (cost $808,626,749) | 1,070,922,969 |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2006 39
Janus Orion Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Other Securities - 23.1% | |||||||||||
250,086,433 | State Street Navigator Securities Lending Prime Portfolio† (cost $250,086,433) | $ | 250,086,433 | ||||||||
Time Deposit - 1.6% | |||||||||||
$ | 17,100,000 | ING Financial, ETD 4.86%, 5/1/06 (cost $17,100,000) | 17,100,000 | ||||||||
Total Investments (total cost $1,075,813,182) – 123.6% | 1,338,109,402 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (23.6)% | (255,882,516 | ) | |||||||||
Net Assets – 100% | $ | 1,082,226,886 |
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Argentina | $ | 11,478,997 | 0.9 | % | |||||||
Bermuda | 44,257,122 | 3.3 | % | ||||||||
Brazil | 120,499,306 | 9.0 | % | ||||||||
Canada | 17,679,690 | 1.3 | % | ||||||||
France | 9,449,173 | 0.7 | % | ||||||||
India | 20,634,441 | 1.6 | % | ||||||||
Israel | 17,349,795 | 1.3 | % | ||||||||
Italy | 27,969,655 | 2.1 | % | ||||||||
Mexico | 50,069,540 | 3.7 | % | ||||||||
Switzerland | 61,061,518 | 4.6 | % | ||||||||
Turkey | 21,801,689 | 1.6 | % | ||||||||
United States†† | 935,858,476 | 69.9 | % | ||||||||
Total | $ | 1,338,109,402 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (50.0% excluding Short-Term Securities and Other Securities)
See Notes to Schedules of Investments and Financial Statements.
40 Janus Growth Funds April 30, 2006
Janus Triton Fund (unaudited)
Ticker: JATTX
Fund Snapshot
A growth fund that focuses on small- and mid-sized companies believed to have solid growth potential.
Blaine Rollins
portfolio manager
Performance Overview
Janus Triton Fund finished the six months ended April 2006, on a strong note, with small- and medium-sized companies (areas in which Janus Triton Fund primarily invests) as the star performers. This may have taken some investors by surprise, as many market forecasters had predicted that smaller stocks – after leading the way in 2005 – might take a backseat in 2006. Instead, small- and mid-caps continued to surge, seemingly unaffected by market uncertainty over interest rates, which has been the most significant macroeconomic issue in recent months. Early in 2006, the new Federal Reserve Board (Fed) Chairman, Ben Bernanke, expressed his intention to stay focused on containing inflation – a message some investors interpreted as a sign that the Fed's tightening campaign may last longer than expected. This news may have mitigated gains in some areas, but didn' t keep the small- and mid-cap markets from enjoying a bullish quarter.
For the six-month period, the Fund returned 26.98% significantly outperforming its benchmark, the Russell 2500TM Growth Index, which gave back 19.11%.
Since taking over management of the Fund on February 1, I have continued in the same vein as Ron Sachs, the Fund's previous manager, employing a disciplined, bottom-up investment process, leveraging Janus' in-depth research and focusing on what I believe are solid growth companies with top-line revenue growth and strong management teams. Going forward, I expect to increase the breadth of the Fund by adding more positions and diversifying across more geographies.
Contributors Included Advertising, Printing and Agribusiness Stocks
Although we do not specifically target geographical locations – and typically have more stringent growth requirements for companies in emerging markets – our careful selection process, which entails researching potential investments on a name-by-name basis, has yielded many opportunities abroad. Indeed, the leading performer in the period was Focus Media, a Chinese advertising firm that uses liquid crystal display (LCD) panels to target consumers in 44 major Chinese cities.
Another international standout was VistaPrint, a family-run company that operates its business online. This innovative company uses technology to bring long-run print economics to small businesses. It runs all of its business through a Web site where consumers and businesses can purchase business cards, stationery, and other customized printed products that VistaPrint then ships from two centralized locations in North America and Europe. VistaPrint's cost advantage has allowed the company to deliver superior print quality to customers at a significant savings and has generated fantastic margins and returns on capital. The stock has been strong as the company has continued to deliver rapid revenue and earnings growth. We believe VistaPrint should be a long-term share gainer in a huge market for small business and consumer printing. Due to the company's success in marketin g a basic "bricks and mortar" idea using the World Wide Web, it has established one of the top brand name presences for small businesses in the world.
The Fund's third-best performer was another foreign stock, Cosan, a Brazilian company that refines sugar and ethanol from sugar cane. There is a sugar shortage occurring in the world as populations in developing countries are becoming wealthier and changing their diets to include more sugar. On the supply side, the removal of global tariffs (especially in Europe) is causing a decline in the most uneconomical production. A further wrench into the supply/demand balance has been rising energy costs, which has put upward pressure on alternative fuels, ethanol among them. The easiest way to produce ethanol is from sugar cane and the most efficient producers can make it today for $1 per gallon, thus putting the breakeven of ethanol production at about $23 per barrel of crude oil. Our attraction to this company is based on commodity conditions rather than "emerging market" themes.
Detractors Included Internet,
Telecommunications and Healthcare Stocks
Elsewhere, hurting our performance was March Networks, a provider of Internet protocol (IP) based digital video surveillance solutions. We found a great business, in our opinion, but our purchase was ill-timed. We bought the stock after an exceptional quarter and just before Cisco's acquired entry into the business, and therefore suffered a loss during the period. Nonetheless, we believe the business is extremely high quality. Validation of the company's technology came from Wal-Mart, which last year signed a contract to roll out the product to most of the U.S. store base for video recording
Janus Growth Funds April 30, 2006 41
Janus Triton Fund (unaudited)
all cash register checkouts. We therefore maintained a position in March Networks.
Another laggard was Hikari Tsushin, a Japanese company whose core business is the provision of financial call center outsourcing services for insurance companies. We saw Hikari's stock fall in sympathy with other Japanese companies spooked by the Livedoor scandal (Livedoor is not a Fund holding). Livedoor, a provider of services such as concert ticket sales through the Internet, was recently accused of doctoring its financial reports. We remain confident in Hikari, and continue to own the stock for its growing financial call center business, which we believe supports the valuation of the entire enterprise.
Taro Pharmaceuticals was another disappointment during the period. This company focuses on generic ointments and creams, a business that has some very attractive characteristics because of the limited number of competitors that typically enter each product category. It also has superior product line breadth. Unfortunately, Taro's recent results show that the competitive dynamics in its businesses are similar to the cutthroat competition in the pill-based generics industry. Taro's lackluster results indicate that distributors have greater leverage over Taro than our industry analysis leads us to believe. That said, we have subsequently liquidated the holding.
Looking Forward
The small- and mid-cap markets are always rife with opportunity, and we are looking forward to continuing our search for companies poised for growth. Our strategy of buying great businesses at attractive prices remains unchanged. We also expect to maintain a significant cash level in the Fund. Given the high quality of our research, we believe that having funds on hand to facilitate quick action when necessary may be a boon to our shareholders over time.
Thank you for your investment in Janus Triton Fund.
Janus Triton Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Focus Media Holding, Ltd. (ADR) Out-of-home advertising network operator - China | 2.72 | % | |||||
VistaPrint, Ltd. Online graphic design supplier - U.S. | 2.51 | % | |||||
Cosan S.A. Industria e Comercio Food and beverage producer and distributor - Brazil | 1.96 | % | |||||
Submarino S.A. Internet retailer - Brazil | 1.83 | % | |||||
Trimble Navigation, Ltd. Developer of advanced positioning product (GPS) solutions - U.S. | 1.74 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
March Networks Corp. Internet protocol-based digital video surveillance producer - Canada | (0.95 | %) | |||||
Hikari Tsushin, Inc. Communications and technology distributor - Japan | (0.60 | %) | |||||
Taro Pharmaceuticals, Inc. - Class B Pharmaceutical company - U.S. | (0.49 | %) | |||||
United Therapeutics Corp. Biotechnology company - U.S. | (0.43 | %) | |||||
China GrenTech Corporation, Ltd. (ADR) Wireless communications products and services provider - China | (0.34 | %) |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Retailing | 4.65 | % | 11.01 | % | 6.39 | % | |||||||||
Technology Hardware & Equipment | 2.96 | % | 5.04 | % | 7.42 | % | |||||||||
Food, Beverage & Tobacco | 2.96 | % | 3.31 | % | 0.38 | % | |||||||||
Media | 2.76 | % | 3.13 | % | 2.30 | % | |||||||||
Pharmaceuticals & Biotechnology | 2.58 | % | 10.62 | % | 6.41 | % |
5 Lowest Contributors/Detractors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Household & Personal Products | (0.20 | %) | 0.84 | % | 0.79 | % | |||||||||
Food & Staples Retailing | (0.16 | %) | 0.37 | % | 0.33 | % | |||||||||
Utilities | 0.00 | % | 0.00 | % | 0.37 | % | |||||||||
Materials | 0.03 | % | 1.31 | % | 3.47 | % | |||||||||
Banks | 0.04 | % | 0.42 | % | 3.21 | % |
42 Janus Growth Funds April 30, 2006
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2006 |
VistaPrint, Ltd. Printing - Commercial | 3.5 | % | |||||
W-H Energy Services, Inc. Oil - Field Services | 2.8 | % | |||||
Bankrate, Inc. Commercial Services - Finance | 2.4 | % | |||||
Kenexa Corp. Human Resources | 2.1 | % | |||||
Cosan S.A. Industria e Comercio Sugar | 2.0 | % | |||||
12.8 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2006 |
Emerging markets comprised 12.3% of total net assets.
5 Largest Country Allocations – (% of Investment Securities)
As of April 30, 2006 | As of October 31, 2005 | ||||||
![]() | ![]() | ||||||
Janus Growth Funds April 30, 2006 43
Janus Triton Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year- to-Date | One Year | Since Inception* | |||||||||||||
Janus Triton Fund | 26.98 | % | 43.55 | % | 31.37 | % | |||||||||
Russell 2500TM Growth Index | 19.11 | % | 34.07 | % | 18.93 | % | |||||||||
Lipper Quartile | N/A | 1 | st | 1 | st | ||||||||||
Lipper Ranking - based on total return for Small-Cap Growth Funds | N/A** | 59/533 | 14/520 |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes 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.
*The Fund's inception date – February 25, 2005
**The Fund's fiscal year-to-date Lipper ranking is not available.
See "Explanations of Charts, Tables and Financial Statements."
The Fund's portfolio may differ significantly from the securities held in the index. The index is not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
Janus Capital Management LLC has contractually agreed to waive the Fund's total operating expenses to levels indicated in the prospectus until at least March 1, 2007. Without such waivers, total return would have been lower.
There is no assurance that the investment process will consistently lead to successful investing.
Funds that emphasize investments in smaller companies may experience greater price volatility.
The Fund may have significant exposure to emerging markets. In general, emerging market investments have historically been subject to significant gains and/or losses. As such, the Fund's returns and NAV may be subject to such volatility.
Due to certain investment strategies, the Fund may have an increased position in cash for temporary defensive purposes.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,269.80 | $ | 6.08 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.44 | $ | 5.41 |
*Expenses are equal to the annualized expense ratio of 1.08%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital.
44 Janus Growth Funds April 30, 2006
Janus Triton Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Common Stock - 88.7% | |||||||||||
Advertising Sales - 1.3% | |||||||||||
35,325 | Focus Media Holding, Ltd. (ADR)* | $ | 2,133,277 | ||||||||
Aerospace and Defense - 0.6% | |||||||||||
38,130 | TransDigm Group, Inc.* | 942,955 | |||||||||
Apparel Manufacturers - 1.8% | |||||||||||
55,735 | Quiksilver, Inc.* | 761,897 | |||||||||
62,705 | Volcom, Inc.* | 2,236,688 | |||||||||
2,998,585 | |||||||||||
Applications Software - 0.9% | |||||||||||
87,335 | Quest Software, Inc.* | 1,503,035 | |||||||||
Auction House - Art Dealer - 1.6% | |||||||||||
13,500 | Ritchie Bros. Auctioneers, Inc. (U.S. Shares) | 727,650 | |||||||||
66,665 | Sotheby's Holdings, Inc. - Class A* | 1,999,283 | |||||||||
2,726,933 | |||||||||||
Beverages - Wine and Spirits - 0.4% | |||||||||||
61,855 | Davide Campari - Milano S.P.A. | 604,784 | |||||||||
Building - Residential and Commercial - 0.9% | |||||||||||
39,730 | Desarrolladora Homex S.A. (ADR)* | 1,522,454 | |||||||||
Building and Construction Products - Miscellaneous - 0.9% | |||||||||||
23,065 | NCI Building Systems, Inc.* | 1,498,994 | |||||||||
Business to Business/E-Commerce - 1.3% | |||||||||||
231,110 | webMethods, Inc.* | 2,211,723 | |||||||||
Cellular Telecommunications - 0.8% | |||||||||||
21,100 | Hikari Tsushin, Inc. | 1,304,562 | |||||||||
Chemicals - Specialty - 0.8% | |||||||||||
21,090 | Cytec Industries, Inc. | 1,275,312 | |||||||||
Commercial Banks - 0.7% | |||||||||||
23,450 | SVB Financial Group* | 1,190,557 | |||||||||
Commercial Services - 1.3% | |||||||||||
38,580 | CoStar Group, Inc.* | 2,177,841 | |||||||||
Commercial Services - Finance - 2.4% | |||||||||||
83,710 | Bankrate, Inc.* | 4,040,682 | |||||||||
Computers - Memory Devices - 0.5% | |||||||||||
13,785 | SanDisk Corp.* | 879,897 | |||||||||
Diagnostic Equipment - 0.5% | |||||||||||
22,860 | Neurometrix, Inc.* | 862,279 | |||||||||
Dialysis Centers - 0.6% | |||||||||||
84,415 | Dialysis Corporation of America* | 1,065,317 | |||||||||
Diversified Operations - 0.8% | |||||||||||
542,562 | Triveni Engineering & Industries, Ltd. | 1,258,526 | |||||||||
E-Commerce/Products - 1.9% | |||||||||||
114,960 | Submarino S.A.* | 3,112,238 | |||||||||
Electric - Distribution - 0.4% | |||||||||||
79,500 | Equatorial Energia S.A.* | 590,441 | |||||||||
Electronic Components - Semiconductors - 5.7% | |||||||||||
439,123 | ARM Holdings PLC | 1,089,039 | |||||||||
70,225 | LSI Logic Corp.* | 747,896 | |||||||||
28,665 | Microsemi Corp.* | 783,128 | |||||||||
74,475 | MIPS Technologies, Inc.* | 551,860 | |||||||||
41,150 | Netlogic Microsystems, Inc.* | 1,657,111 | |||||||||
109,165 | PMC-Sierra, Inc.* | 1,356,921 | |||||||||
66,454 | Silicon-On-Insulator Technologies (SOITEC)* | 2,168,910 | |||||||||
29,675 | SiRF Technology Holdings, Inc.* | 1,013,401 | |||||||||
9,368,266 |
Shares or Principal Amount | Value | ||||||||||
Electronic Measuring Instruments - 0.7% | |||||||||||
23,855 | Trimble Navigation, Ltd.* | $ | 1,130,250 | ||||||||
E-Marketing/Information - 0.8% | |||||||||||
127,455 | 24/7 Real Media, Inc.* | 1,289,845 | |||||||||
Enterprise Software/Services - 1.7% | |||||||||||
12,300 | Nomura Research Institute, Ltd. | 1,527,440 | |||||||||
92,205 | Omnicell, Inc.* | 1,228,171 | |||||||||
2,755,611 | |||||||||||
E-Services/Consulting - 1.0% | |||||||||||
87,545 | RightNow Technologies, Inc.* | 1,620,458 | |||||||||
Fiduciary Banks - 0.8% | |||||||||||
21,660 | Northern Trust Corp. | 1,275,557 | |||||||||
Finance - Investment Bankers/Brokers - 2.4% | |||||||||||
70,000 | Mitsubishi UFJ Securities Company, Ltd. | 1,102,885 | |||||||||
93,550 | optionsXpress Holdings, Inc. | 2,946,825 | |||||||||
4,049,710 | |||||||||||
Finance - Other Services - 0.6% | |||||||||||
86,070 | MarketAxess Holdings, Inc.* | 960,541 | |||||||||
Food - Retail - 1.1% | |||||||||||
15,340 | Whole Foods Market, Inc. | 941,569 | |||||||||
48,920 | Wild Oats Markets, Inc.* | 840,446 | |||||||||
1,782,015 | |||||||||||
Human Resources - 4.9% | |||||||||||
183,000 | 104 Corp. | 1,646,117 | |||||||||
118,200 | 51job, Inc. (ADR)* | 2,976,276 | |||||||||
104,410 | Kenexa Corp.* | 3,469,544 | |||||||||
8,091,937 | |||||||||||
Internet Applications Software - 1.3% | |||||||||||
95,818 | March Networks Corp.* | 2,218,799 | |||||||||
Internet Connectivity Services - 1.6% | |||||||||||
115,410 | Redback Networks, Inc.* | 2,585,184 | |||||||||
Investment Management and Advisory Services - 0.5% | |||||||||||
15,665 | National Financial Partners Corp. | 814,580 | |||||||||
Leisure and Recreation Products - 0.6% | |||||||||||
32,335 | WMS Industries, Inc.* | 1,010,469 | |||||||||
Machinery - Electrical - 0.6% | |||||||||||
28,550 | Baldor Electric Co. | 947,860 | |||||||||
Machinery - Material Handling - 1.0% | |||||||||||
64,560 | Columbus McKinnon Corp.* | 1,728,271 | |||||||||
Medical - Drugs - 0.7% | |||||||||||
50,510 | Cubist Pharmaceuticals, Inc.* | 1,145,062 | |||||||||
Medical Instruments - 3.5% | |||||||||||
115,655 | Abaxis, Inc.* | 3,020,909 | |||||||||
418,610 | Cambridge Heart, Inc.* | 1,218,155 | |||||||||
12,650 | Intuitive Surgical, Inc.* | 1,606,550 | |||||||||
5,845,614 | |||||||||||
Medical Laser Systems - 0.7% | |||||||||||
105,900 | IRIDEX Corp.* | 1,209,378 | |||||||||
Metal Processors and Fabricators - 0.9% | |||||||||||
24,675 | Precision Castparts Corp. | 1,554,032 | |||||||||
MRI and Medical Diagnostic Imaging Center - 0.8% | |||||||||||
51,210 | Nighthawk Radiology Holdings, Inc.* | 1,240,818 | |||||||||
Multimedia - 0.7% | |||||||||||
4,836,000 | Tom Group, Ltd.* | 1,085,298 |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2006 45
Janus Triton Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Office Furnishings - Original - 1.0% | |||||||||||
73,340 | Knoll, Inc. | $ | 1,595,145 | ||||||||
Oil - Field Services - 2.8% | |||||||||||
92,005 | W-H Energy Services, Inc.* | 4,623,251 | |||||||||
Oil Companies - Exploration and Production - 0.2% | |||||||||||
11,130 | Complete Production Services, Inc.* | 294,166 | |||||||||
Printing - Commercial - 3.5% | |||||||||||
180,595 | VistaPrint, Ltd.* | 5,775,428 | |||||||||
Public Thoroughfares - 0.5% | |||||||||||
68,400 | Obrascon Huarte Lain Brasil S.A.* | 835,417 | |||||||||
Real Estate Operating/Development - 0.2% | |||||||||||
26,060 | Gafisa S.A.* | 265,969 | |||||||||
Recreational Vehicles - 0.5% | |||||||||||
16,165 | Polaris Industries, Inc. | 774,304 | |||||||||
REIT - Mortgages - 1.3% | |||||||||||
93,124 | CapitalSource, Inc. | 2,188,414 | |||||||||
Research and Development - 1.5% | |||||||||||
691,240 | Qinetiq PLC* | 2,539,933 | |||||||||
Respiratory Products - 0.6% | |||||||||||
28,320 | Respironics, Inc.* | 1,037,078 | |||||||||
Retail - Apparel and Shoe - 2.5% | |||||||||||
83,485 | American Eagle Outfitters, Inc. | 2,704,914 | |||||||||
78,540 | Bebe Stores, Inc. | 1,388,587 | |||||||||
4,093,501 | |||||||||||
Retail - Computer Equipment - 1.8% | |||||||||||
43,883 | GameStop Corp. - Class A* | 2,071,277 | |||||||||
21,665 | GameStop Corp. - Class B* | 920,113 | |||||||||
2,991,390 | |||||||||||
Semiconductor Components/Integrated Circuits - 1.8% | |||||||||||
22,245 | Actions Semiconductor Company, Ltd. (ADR)* | 221,115 | |||||||||
2,152,000 | Advanced Semiconductor Manufacturing Corp.* | 535,689 | |||||||||
129,440 | Cypress Semiconductor Corp.* | 2,221,191 | |||||||||
2,977,995 | |||||||||||
Sugar - 3.6% | |||||||||||
233,309 | Bajaj Hindusthan, Ltd. | 2,683,054 | |||||||||
42,800 | Cosan S.A. Industria e Comercio* | 3,293,569 | |||||||||
5,976,623 | |||||||||||
Telecommunication Services - 2.5% | |||||||||||
68,740 | NeuStar, Inc. - Class A* | 2,412,774 | |||||||||
99,430 | Time Warner Telecom, Inc. - Class A* | 1,667,441 | |||||||||
4,080,215 | |||||||||||
Therapeutics - 1.7% | |||||||||||
14,970 | Neurocrine Biosciences, Inc.* | 858,679 | |||||||||
58,165 | Nuvelo, Inc.* | 952,161 | |||||||||
17,920 | United Therapeutics Corp.* | 1,067,136 | |||||||||
2,877,976 | |||||||||||
Transportation - Equipment and Leasing - 0.8% | |||||||||||
28,535 | GATX Corp. | 1,335,438 | |||||||||
Transportation - Marine - 1.0% | |||||||||||
126,320 | Horizon Lines, Inc. - Class A | 1,729,321 | |||||||||
Transportation - Railroad - 1.3% | |||||||||||
34,210 | All America Latina Logistica (GDR) | 2,163,901 |
Shares or Principal Amount | Value | ||||||||||
Transportation - Truck - 1.9% | |||||||||||
29,620 | Landstar System, Inc. | $ | 1,258,554 | ||||||||
64,010 | Swift Transportation Company, Inc.* | 1,917,099 | |||||||||
3,175,653 | |||||||||||
Water Treatment Services - 1.5% | |||||||||||
81,190 | Woongjin Coway Company, Ltd. | 2,410,221 | |||||||||
Web Hosting/Design - 1.6% | |||||||||||
40,285 | Equinix, Inc.* | 2,654,782 | |||||||||
Wireless Equipment - 1.6% | |||||||||||
24,685 | EFJ, Inc.* | 252,281 | |||||||||
94,105 | SBA Communications Corp. - Class A* | 2,363,917 | |||||||||
2,616,198 | |||||||||||
Total Common Stock (cost $132,671,100) | 146,622,266 | ||||||||||
Repurchase Agreement - 6.5% | |||||||||||
$ | 10,800,000 | Bear Stearns & Company, Inc., 4.830% dated 4/28/06, maturing 5/1/06 to be repurchased at $10,804,347 collateralized by $11,767,217 in U.S. Government Agencies 4.50% - 5.00%, 8/25/25 - 10/15/32 with a value of $11,016,044 (cost $10,800,000) | 10,800,000 | ||||||||
Time Deposit - 4.8% | |||||||||||
8,000,000 | Dexia CLF Finance Co., ETD 4.85%, 5/1/06 (cost $8,000,000) | 8,000,000 | |||||||||
Total Investments (total cost $151,471,100) – 100% | 165,422,266 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – 0% | (51,376 | ) | |||||||||
Net Assets – 100% | $ | 165,370,890 |
Summary of Investments by Country
Country | Value | % of Investments Securities | |||||||||
Bermuda | $ | 5,775,428 | 3.5 | % | |||||||
Brazil | 10,261,535 | 6.2 | % | ||||||||
Canada | 2,946,449 | 1.8 | % | ||||||||
Cayman Islands | 6,415,966 | 3.9 | % | ||||||||
China | 535,689 | 0.3 | % | ||||||||
France | 2,168,909 | 1.3 | % | ||||||||
India | 3,941,580 | 2.4 | % | ||||||||
Italy | 604,784 | 0.4 | % | ||||||||
Japan | 3,934,887 | 2.4 | % | ||||||||
Mexico | 1,522,454 | 0.9 | % | ||||||||
South Korea | 2,410,221 | 1.5 | % | ||||||||
Taiwan | 1,646,117 | 1.0 | % | ||||||||
United Kingdom | 3,628,972 | 2.2 | % | ||||||||
United States†† | 119,629,275 | 72.2 | % | ||||||||
Total | $ | 165,422,266 | 100.0 | % |
††Includes Short-Term Securities (61.0% excluding Short-Term Securities)
See Notes to Schedules of Investments and Financial Statements.
46 Janus Growth Funds April 30, 2006
Janus Twenty Fund (unaudited) (closed to new investors)
Ticker: JAVLX
Fund Snapshot
This focused growth fund invests in a concentrated portfolio of 20-30 companies, including many market leaders whose products and services are being used more often every day.
Scott Schoelzel
portfolio manager
Performance Overview
For the six months ended April 30, 2006, Janus Twenty Fund returned 7.46%. This compares to a 7.06% return for our primary benchmark, the Russell 1000® Growth Index, and a 9.64% return for our secondary benchmark, the S&P 500® Index. In addition to the Fund's performance, the operating metrics of the Fund remained stellar. Turnover remained a modest 31%, and the Fund's expenses remained among the most competitive in the industry at 0.87%. These total results, when added to the peer-beating returns we have delivered over the past few years, add to our conviction that we continue to head in the right direction. Janus Twenty Fund remains in the top quartile of all Lipper Large Cap Growth Funds for the 1-, 3-, 5- and 10-year periods.
One Year | Three Years | Five Years | Ten Years | ||||||||||||||||
Lipper Quartile | 1 | st | 1 | st | 1 | st | 1 | st | |||||||||||
(Rank as of 4/30/06, based on total return for Lipper Large-Cap Growth Funds) | (36 out of 698) | (6 out of 590) | (56 out of 474) | (2 out of 165) |
I am particularly pleased with our performance during this period, as we had to navigate the reduction of two of our largest and longest-held positions, UnitedHealth Group and Genentech. One of the criticisms leveled at Janus over the years has been that we lacked a "sell discipline." Needless to say, I would argue otherwise, and I think these large, timely sales are illustrative of our selling prowess.
Two of Our Largest and Longest Held Positions were Reduced
Our position in UnitedHealth was established many years ago, and we have watched it nearly triple in value as it grew to become one of the largest positions in the portfolio, cresting at just over 15% of the Fund's assets at its peak. We have begun to meaningfully reduce the position, with the bulk of the sales occurring during this six-month period. More specifically, we sold nearly 65% of the entire position (over 10 million shares) during the past six months at prices within 15% of UnitedHealth's all-time high, and before the controversy surrounding the timing of the pricing of the company's stock options for its senior executives became front-page news. In fairness, we had no idea UnitedHealth would become entangled in an option pricing investigation, but this occurred after the stock had begun to fall. Meanwhile, our proactive sales were based on the belief that there was some underappreciated maturation of the company's insured busines s, and our market surveys began to detect an increasingly competitive pricing environment.
During the period we also sold just over 50% of our position in biotechnology company, Genentech. Like UnitedHealth, Genentech was one of our largest and longest-held positions. Genentech had more than quadrupled in value since the stock was acquired, and there were certainly many opportunities to sell the stock along the way. Nevertheless, after nearly seven years we felt that much of what we had anticipated for the company in terms of new indications for their cancer-fighting lineup of bio-engineered drugs was more fully reflected in the price, and we began to cut the position size in half, with all of the sales occurring within 20% of the stock's all-time high.
To be fair, the reduction in these two positions was far from perfect. We didn't (nor was it our intention to) sell the positions to zero. We believe both investments still have merits, and while both detracted from Janus Twenty Fund's positive performance during the period, I am confident that the net result of our sales did indeed benefit the Fund's investors.
Holdings on the Positive Side of the Ledger
Celgene, an emerging powerhouse in the biotechnology field, and ConocoPhillips, the vertically integrated international oil company contributed to Fund performance. I wrote about both of these companies in my last letter to you and, once again, they were among the Fund's strongest performers. In October, Celgene had just received approval for the sale of its cancer-fighting drug, Revlimid. Since that time, Revlimid sales have gotten off to a fast start and we are pleased with the company's progress. Of possibly greater interest, we anticipate that Celgene will receive additional approvals for use of Revlimid, which we believe should expand the company's market opportunities.
Our investment in ConocoPhillips continues to progress and is emblematic of the Funds' overweighted investment in the "oil complex." As we have said from the beginning, we are not believers in "$100 oil," but we do continue to believe there is
Janus Growth Funds April 30, 2006 47
Janus Twenty Fund (unaudited)
an ongoing tightness in the oil complex globally, and we have purchased the stocks we think are best positioned to capitalize on this ongoing opportunity. There is a lot of skepticism about the sustainability of the imbalances currently present in the oil markets, as evidenced by Conoco's very low price/earnings multiple* of 6. We continue to closely monitor supply increases, refining capacity and above all, global demand. While we expect continued volatility in these markets, we believe the natural decline curve of the world's reservoirs to be understated and the world's demand to be stronger than largely recognized, particularly in the Middle East.
Fund Outlook
On the macro front, six months ago I thought we would start to see interest rates begin to crest and the year-over-year change in the price of oil begin to moderate, thereby laying the foundation for an improving equities market. At the time of this writing, neither has happened as quickly as I anticipated. Though oil has shown some signs of moderating (albeit at an overall higher level), the continued rise in interest rates has been of some concern. The Federal Reserve now has raised rates 14 consecutive times, yet gross domestic product growth continues to be stronger than expected with corresponding strength in the commodities markets, especially copper and gold. This, together with a continued weakness in the U.S. dollar, has the markets on edge. I do think that oil, commodities and interest rates will moderate, but the soft slowdown I was anticipating could end up b eing more abrupt. Despite these continued macroeconomic headwinds, we believe there are still companies that will continue to thrive in this environment, and I am confident that our analysts will continue to do masterful work in uncovering those opportunities for our investors. Finally, as has been the case for many years, not only am I the portfolio manager of Janus Twenty Fund, but I am also one of the Fund's largest investors; side by side with each of you.
Thank you for your continued confidence and investment in Janus Twenty Fund.
*Price earnings multiple is a valuation ratio of a company's current share price compared to its per-share earnings.
Janus Twenty Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Celgene Corp. Biopharmaceutical company - U.S. | 1.65 | % | |||||
Occidental Petroleum Corp. Crude oil and natural gas company - U.S. | 1.23 | % | |||||
Peabody Energy Corp. Coal company - U.S. | 1.15 | % | |||||
Harrah's Entertainment, Inc. Casino operator - U.S. | 0.94 | % | |||||
Goldman Sachs Group, Inc. Investment banking and securities firm - U.S. | 0.73 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Alcon, Inc. (U.S. Shares) Eye care company - U.S. | (0.89 | %) | |||||
Genentech, Inc. Biotechnology company - U.S. | (0.80 | %) | |||||
UnitedHealth Group, Inc Organized health systems company - U.S. | (0.79 | %) | |||||
eBay, Inc. Online marketplace - U.S. | (0.44 | %) | |||||
Yahoo!, Inc. Global Internet media company - U.S. | (0.28 | %) |
5 Largest Contributors to Performance – Sectors
Group | Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | ||||||||||||
Energy | 4.40 | % | 29.04 | % | 9.65 | % | |||||||||
Technology Hardware & Equipment | 1.18 | % | 5.52 | % | 7.04 | % | |||||||||
Consumer Services | 1.13 | % | 3.66 | % | 1.65 | % | |||||||||
Pharmaceuticals & Biotechnology | 0.96 | % | 16.81 | % | 7.88 | % | |||||||||
Banks | 0.73 | % | 4.47 | % | 7.48 | % |
5 Largest Detractors from Performance – Sectors
Group | Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | ||||||||||||
Healthcare Equipment & Services | (1.90 | %) | 11.86 | % | 5.17 | % | |||||||||
Software & Services | (0.15 | %) | 12.70 | % | 5.44 | % | |||||||||
Consumer Durables & Apparel | (0.11 | %) | 3.45 | % | 1.31 | % | |||||||||
Food Beverage & Tobacco | (0.05 | %) | 0.04 | % | 4.61 | % | |||||||||
Food & Staples Retailing | (0.01 | %) | 0.08 | % | 2.38 | % |
48 Janus Growth Funds April 30, 2006
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2006 |
ConocoPhillips Oil Companies - Integrated | 6.4 | % | |||||
Wells Fargo & Co. Super-Regional Banks | 4.5 | % | |||||
Occidental Petroleum Corp. Oil Companies - Integrated | 4.4 | % | |||||
Celgene Corp. Medical - Biomedical and Genetic | 4.1 | % | |||||
Roche Holding A.G. Medical - Drugs | 4.0 | % | |||||
23.4 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2006 |
5 Largest Country Allocations – (% of Investment Securities)
As of April 30, 2006 | As of October 31, 2005 | ||||||
![]() | ![]() | ||||||
Janus Growth Funds April 30, 2006 49
Janus Twenty Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | |||||||||||||||||||
Janus Twenty Fund | 7.46 | % | 24.20 | % | 2.05 | % | 10.70 | % | 13.48 | % | |||||||||||||
Russell 1000® Growth Index | 7.06 | % | 15.18 | % | (0.76 | )% | 6.21 | % | 11.33 | % | |||||||||||||
S&P 500® Index | 9.64 | % | 15.42 | % | 2.70 | % | 8.94 | % | 12.64 | % | |||||||||||||
Lipper Quartile | N/A | 1 | st | 1 | st | 1 | st | 1 | st | ||||||||||||||
Lipper Ranking - based on total return for Large-Cap Growth Funds | N/A** | 36/698 | 56/474 | 2/165 | 1/40 |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes 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.
*The Fund's inception date – April 30, 1985
**The Fund's fiscal year-to-date Lipper ranking is not available.
See "Explanations of Charts, Tables and Financial Statements."
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
The Fund is classified as "nondiversified," meaning it has the ability to take larger positions in a smaller number of issuers than a fund that is classified as "diversified." Nondiversified funds may experience greater price volatility.
Concentration may lead to greater price volatility.
Due to certain investment strategies, the Fund may have an increased position in cash for temporary defensive purposes.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
Closed to new investors.
Returns have sustained significant gains due to market volatility in the healthcare sector.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,074.60 | $ | 4.53 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.43 | $ | 4.41 |
*Expenses are equal to the annualized expense ratio of 0.88%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
50 Janus Growth Funds April 30, 2006
Janus Twenty Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Common Stock - 85.5% | |||||||||||
Agricultural Chemicals - 5.3% | |||||||||||
2,448,265 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | $ | 231,801,730 | ||||||||
2,064,226 | Syngenta A.G.* | 287,946,378 | |||||||||
519,748,108 | |||||||||||
Agricultural Operations - 1.0% | |||||||||||
1,877,315 | Bunge, Ltd.# | 100,154,755 | |||||||||
Athletic Footwear - 2.0% | |||||||||||
2,365,465 | NIKE, Inc. - Class B# | 193,589,656 | |||||||||
Casino Hotels - 3.8% | |||||||||||
4,535,340 | Harrah's Entertainment, Inc.# | 370,265,158 | |||||||||
Coal - 2.5% | |||||||||||
3,867,870 | Peabody Energy Corp.# | 247,002,178 | |||||||||
Computers - 4.2% | |||||||||||
2,893,185 | Apple Computer, Inc.* | 203,651,292 | |||||||||
2,645,620 | Research In Motion, Ltd. (U.S. Shares)*,# | 202,733,861 | |||||||||
406,385,153 | |||||||||||
Computers - Memory Devices - 0.8% | |||||||||||
6,032,545 | EMC Corp.* | 81,499,683 | |||||||||
Cosmetics and Toiletries - 3.4% | |||||||||||
5,694,740 | Procter & Gamble Co. | 331,490,815 | |||||||||
E-Commerce/Services - 1.0% | |||||||||||
2,825,268 | eBay, Inc.*.# | 97,217,472 | |||||||||
Entertainment Software - 3.8% | |||||||||||
6,540,970 | Electronic Arts, Inc.* | 371,527,096 | |||||||||
Finance - Consumer Loans - 0.4% | |||||||||||
812,550 | SLM Corp. | 42,967,644 | |||||||||
Finance - Investment Bankers/Brokers - 3.3% | |||||||||||
2,012,435 | Goldman Sachs Group, Inc. | 322,573,206 | |||||||||
Food - Retail - 0.3% | |||||||||||
527,555 | Whole Foods Market, Inc.# | 32,381,326 | |||||||||
Machinery - Farm - 1.0% | |||||||||||
1,147,550 | Deere & Co. | 100,731,939 | |||||||||
Medical - Biomedical and Genetic - 7.2% | |||||||||||
9,580,736 | Celgene Corp.* | 403,923,830 | |||||||||
3,703,431 | Genentech, Inc.*,# | 295,200,485 | |||||||||
699,124,315 | |||||||||||
Medical - Drugs - 4.0% | |||||||||||
2,574,542 | Roche Holding A.G. | 395,875,794 | |||||||||
Medical - HMO - 3.0% | |||||||||||
5,923,260 | UnitedHealth Group, Inc. | 294,622,952 | |||||||||
Oil Companies - Exploration and Production - 6.0% | |||||||||||
5,268,280 | Apache Corp. | 374,258,611 | |||||||||
3,052,487 | EOG Resources, Inc.# | 214,376,162 | |||||||||
588,634,773 | |||||||||||
Oil Companies - Integrated - 16.4% | |||||||||||
1,348,515 | Amerada Hess Corp.# | 193,201,744 | |||||||||
4,764,910 | BP | PLC (ADR)# | 351,269,165 | ||||||||
9,273,605 | ConocoPhillips | 620,404,176 | |||||||||
4,188,610 | Occidental Petroleum Corp. | 430,337,791 | |||||||||
1,595,212,876 | |||||||||||
Oil Refining and Marketing - 2.2% | |||||||||||
3,333,975 | Valero Energy Corp. | 215,841,542 | |||||||||
Optical Supplies - 2.4% | |||||||||||
2,280,710 | Alcon, Inc. (U.S. Shares)# | 231,971,014 | |||||||||
Retail - Apparel and Shoe - 0.6% | |||||||||||
1,467,404 | Industria de Diseno Textil S.A. | 59,704,000 | |||||||||
Retail - Restaurants - 0.7% | |||||||||||
1,883,830 | Starbucks Corp.*,# | 70,210,344 |
Shares or Principal Amount | Value | ||||||||||
Super-Regional Banks - 4.5% | |||||||||||
6,354,825 | Wells Fargo & Co. | $ | 436,512,929 | ||||||||
Therapeutics - 1.0% | |||||||||||
2,000,000 | Amylin Pharmaceuticals, Inc.*,# | 87,100,000 | |||||||||
Web Portals/Internet Service Providers - 2.7% | |||||||||||
626,395 | Google, Inc. - Class A*,# | 261,795,526 | |||||||||
Wireless Equipment - 2.0% | |||||||||||
3,701,505 | QUALCOMM, Inc. | 190,035,267 | |||||||||
Total Common Stock (cost $5,664,599,433) | 8,344,175,521 | ||||||||||
Money Market - 11.9% | |||||||||||
200,000,000 Janus Government Money Market Fund 4.76 | % | 200,000,000 | |||||||||
485,000,000 Janus Institutional Cash Reserves Fund 4.83 | % | 485,000,000 | |||||||||
475,000,000 | Janus Money Market Fund, 4.77% | 475,000,000 | |||||||||
Total Money Market (cost $1,160,000,000) | 1,160,000,000 | ||||||||||
Other Securities - 3.6% | |||||||||||
355,131,715 | State Street Navigator Securities Lending Prime Portfolio† (cost $355,131,715) | 355,131,715 | |||||||||
Repurchase Agreements - 0.9% | |||||||||||
$41,600,000 Bear Stearns & Company, Inc., 4.830% dated 4/28/06, maturing 5/1/06 to be repurchased at $41,616,744 collateralized by $45,325,577 in U.S. Government Agencies 4.50% - 5.00%, 8/25/25 - 10/15/32 with a value of $42,432,170 | (cost $41,600,000) | 41,600,000 | |||||||||
48,700,000 Fortis Bank N.V., 4.850% dated 4/28/06, maturing 5/1/06 to be repurchased at $48,719,683 collateralized by $60,754,512 in U.S. Government Agencies 5.048% - 7.125%, 2/15/23 - 10/25/35 with a value of $49,674,057 | (cost $48,700,000) | 48,700,000 | |||||||||
Total Repurchase Agreements (cost $90,300,000) | 90,300,000 | ||||||||||
Short-Term Corporate Note - 0.3% | |||||||||||
25,000,000 | Wells Fargo & Co., 4.84%, 5/24/06 (amortized cost $24,922,694) | 24,922,694 | |||||||||
Time Deposit - 0.2% | |||||||||||
19,700,000 | Dexia CLF Finance Co., ETD 4.85%, 5/1/06 (cost $19,700,000) | 19,700,000 | |||||||||
Total Investments (total cost $7,314,653,842) – 102.4% | 9,994,229,930 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (2.4)% | (238,766,149 | ) | |||||||||
Net Assets – 100% | $ | 9,755,463,781 |
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Bermuda | $ | 100,154,755 | 1.0 | % | |||||||
Canada | 434,535,591 | 4.3 | % | ||||||||
Spain | 59,704,000 | 0.6 | % | ||||||||
Switzerland | 915,793,186 | 9.2 | % | ||||||||
United Kingdom | 351,269,165 | 3.5 | % | ||||||||
United States†† | 8,132,773,233 | 81.4 | % | ||||||||
Total | $ | 9,994,229,930 | 100.0 | % |
†† Includes Short-Term Securities and Other Securities (64.9% excluding Short-Term Securities and Other Securities)
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2006 51
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
portfolio manager
Performance Overview
Volatile energy markets and the Federal Reserve's unwavering campaign to raise short-term interest rates dimmed investor enthusiasm at the end of 2005. Overshadowing solid corporate profit growth and healthy gross domestic product reports, the malaise weighed on consumers, who responded with a relatively lackluster holiday shopping season. In the first three months of 2006, however, there was a strong rally across several major equity indices, with the S&P 500® Index posting its best first-quarter performance in six years. Despite a strong earnings season and healthy financial indicators, enthusiasm was somewhat dampened by fears of consumer spending slowing as oil prices exceeded $70 per barrel, and the expectation that the Federal Reserve would continue its steady inching up of interest rates. In this environment, Janus Venture Fund returned 22.17%, outperforming both its primary and secondary benchmarks, the Russell 2000® Growth Index and the Russell 2000® Index, which returned 20.31% and 18.91%, respectively.
Holdings that Contributed to Fund Performance
The strongest contributor to the Fund's performance over the six-month period from November 2005 to April 30, 2006 was Ultimate Software, a provider of web-based payroll and employee management software geared toward helping mid-sized companies more efficiently manage employee communications, benefits, payroll and staffing functions. Ultimate Software's method of charging per employee per month is achieving scale in terms of both the number of customers overall and the number of large customers in particular, which has enabled the company to raise its prices. With its recurring revenue-type model and current pricing power, Ultimate appears to be solidifying its position in the industry.
Also posting positive returns was documentation company American Reprographics, which advanced as the market increasingly recognized the viability of its business plan. By digitizing the blueprint and document development process for the architectural and construction industries, among others, American Reprographics is streamlining a traditionally time- and labor-intensive process.
Within the financial sector, the International Securities Exchange (ISE), an electronic exchange for options trading located in New York, continued to show significant year-over-year growth. As a result it contributed significantly to our performance. Created by former E*TRADE and New York Stock Exchange executives, ISE was demutualized in 2002, and has since become the world's largest equity options exchange based on volume. Consolidation discussions among exchanges worldwide have generated a great deal of interest in recent years, and more consolidations are anticipated. The exchanges have very good business models due to their incremental margins, which is attractive to investors seeking potential gains in unpredictable markets.
Holdings that Detracted from Fund Performance
On the downside, SeraCare Life Sciences, a manufacturer of diagnostic tests for various diseases, was the Fund's poorest performer during the period. At the end of 2005, a recently hired audit firm had expressed concerns over the company's revenue recognition practices. We discussed the matter with management and found that due to differing client requirements, there are a myriad of ways the customers accepted products from the company. We were convinced that SeraCare's fundamentals were sound and felt that the company's problems would prove to be short-lived, and padded our stake as a result. However, in March, the company's internal audit committee recommended restating the financial statements for up to three quarters. Shortly thereafter, as there was no way to value the company without the restatements, SeraCare was delisted by NASDAQ and the Securities and Exchange Commission, and we sold our entire position.
Another disappointment came from medical device firm FoxHollow Technologies. The company developed a catheter device – the Silver Hawk – that treats peripheral artery disease, which affects blood flow through the legs. While conducting ongoing studies into the effectiveness of its device, FoxHollow continued aggressive marketing efforts, which resulted in near-term pressure on earnings. In turn, the CEO, Robert Thomas, stepped aside. We continue to believe in the firm and decided to increase our stake on the weakness at the end of 2005, though we are watching new developments closely.
Optimal Group, an online payment processing company, lagged on uncertainty regarding Internet gaming. A large
52 Janus Growth Funds April 30, 2006
(unaudited)
portion of Optimal's business is credit card processing for international online gambling. The entire industry is currently down because of uncertainty regarding whether Congress will legalize or prohibit Internet gaming.
Looking Ahead
Although it looks as if the Fed may be close to ending its rate-hike campaign, the behavior of long-term rates, which moved little through 2005, continues to lurk as an unknown
in 2006. Any sharp moves could further dampen consumer attitudes, as could the worsening turmoil in the energy markets. In addition, the direction of the housing market is uncertain and there are whispers of a global slowdown. These headwinds will not change our long-term focus on investing in small-cap companies with promising growth potential.
Thank you for your continued investment with Janus.
Janus Venture Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Ultimate Software Group, Inc. Web-based payroll software solutions provider - U.S. | 1.36 | % | |||||
Submarino S.A. Internet retailer - Brazil | 1.32 | % | |||||
Equinix, Inc. Internet exchange services producer - U.S. | 1.18 | % | |||||
American Reprographics Co. Reprographic technology and services provider - U.S. | 1.06 | % | |||||
International Securities Exchange, Inc. Fully electronic equity trading platform provider - U.S. | 1.00 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
SeraCare Life Sciences, Inc. Plasma-based diagnostic products producer - U.S. | (0.61 | %) | |||||
Axesstel, Inc. Developer of broadband data products for telecommunications markets - U.S. | (0.33 | %) | |||||
FoxHollow Technologies, Inc. Medical devices producer - U.S. | (0.32 | %) | |||||
Optimal Robotics Corp. - Class A (U.S. Shares) Payments and services company - U.S. | (0.25 | %) | |||||
Idenix Pharmaceuticals, Inc. Biopharmaceutical company - U.S. | (0.25 | %) |
5 Largest Contributors to Performance – Sectors
Group | Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | ||||||||||||
Software & Services | 6.57 | % | 22.76 | % | 7.58 | % | |||||||||
Commercial Services & Supplies | 3.11 | % | 10.45 | % | 3.46 | % | |||||||||
Diversified Financials | 2.17 | % | 4.23 | % | 2.06 | % | |||||||||
Healthcare Equipment & Services | 2.08 | % | 15.95 | % | 6.87 | % | |||||||||
Energy | 2.07 | % | 6.60 | % | 6.44 | % |
5 Lowest Contributors/Detractors to Performance – Sectors
Group | Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | ||||||||||||
Pharmaceuticals & Biotechnology | (0.23 | %) | 5.42 | % | 5.57 | % | |||||||||
Telecommunication Services | (0.04 | %) | 0.99 | % | 1.42 | % | |||||||||
Utilities | 0.00 | % | 0.00 | % | 2.38 | % | |||||||||
Household & Personal Products | 0.00 | % | 0.00 | % | 0.53 | % | |||||||||
Food & Staples Retailing | 0.00 | % | 0.00 | % | 0.80 | % |
Janus Growth Funds April 30, 2006 53
Janus Venture Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2006 |
Ultimate Software Group, Inc. Enterprise Software/Services | 3.1 | % | |||||
Jarden Corp. Consumer Products - Miscellaneous | 2.4 | % | |||||
CoStar Group, Inc. Commercial Services | 2.3 | % | |||||
Submarino S.A. E-Commerce/Products | 2.3 | % | |||||
TALX Corp. Computers - Voice Recognition | 2.1 | % | |||||
12.2 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2006 |
Emerging markets comprised 5.0% of total net assets.
*Includes cash and cash equivalents of (0.2)%.
5 Largest Country Allocations – (% of Investment Securities)
As of April 30, 2006 | As of October 31, 2005 | ||||||
![]() | ![]() | ||||||
54 Janus Growth Funds April 30, 2006
(unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | |||||||||||||||||||
Janus Venture Fund | 22.17 | % | 32.58 | % | 9.14 | % | 9.29 | % | 13.88 | % | |||||||||||||
Russell 2000® Growth Index | 20.31 | % | 36.13 | % | 6.05 | % | 4.70 | % | 8.43 | % | |||||||||||||
Russell 2000® Index | 18.91 | % | 33.47 | % | 10.90 | % | 9.58 | % | 11.27 | % | |||||||||||||
Lipper Quartile | N/A | 3 | rd | 1 | st | 2 | nd | 1 | st | ||||||||||||||
Lipper Ranking - based on total return for Small-Cap Growth Funds | N/A** | 311/533 | 70/363 | 44/117 | 1/10 |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes 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.
*The Fund's inception date – April 30, 1985
**The Fund's fiscal year-to-date Lipper ranking is not available.
See "Explanations of Charts, Tables and Financial Statements."
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
Funds that emphasize investments in smaller companies may experience greater price volatility.
The Fund has been significantly impacted, either positively or negatively, by investing in initial public offerings ("IPOs").
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
Closed to new investors.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,221.70 | $ | 5.01 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.28 | $ | 4.56 |
*Expenses are equal to the annualized expense ratio of 0.91%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Janus Growth Funds April 30, 2006 55
Janus Venture Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Common Stock - 100.0% | |||||||||||
Advanced Materials/Products - 0.8% | |||||||||||
215,851 | Ceradyne, Inc.*,# | $ | 11,440,103 | ||||||||
Aerospace and Defense - 0.5% | |||||||||||
301,305 | TransDigm Group, Inc.* | 7,451,273 | |||||||||
Apparel Manufacturers - 3.8% | |||||||||||
391,625 | Carter's, Inc.*,# | 26,379,859 | |||||||||
810,655 | Quiksilver, Inc.*,# | 11,081,654 | |||||||||
514,154 | Volcom, Inc.*,# | 18,339,873 | |||||||||
55,801,386 | |||||||||||
Applications Software - 2.4% | |||||||||||
687,310 | American Reprographics Co.*,# | 24,378,885 | |||||||||
610,060 | Quest Software, Inc.*,# | 10,499,133 | |||||||||
34,878,018 | |||||||||||
Auction House - Art Dealer - 1.0% | |||||||||||
462,760 | Sotheby's Holdings, Inc. - Class A*,# | 13,878,172 | |||||||||
Building - Residential and Commercial - 0.4% | |||||||||||
148,000 | Rossi Residencial S.A. | 1,560,134 | |||||||||
190,580 | WCI Communities, Inc.*,# | 4,884,566 | |||||||||
6,444,700 | |||||||||||
Commercial Banks - 0.1% | |||||||||||
23,190 | SVB Financial Group* | , | # | 1,177,356 | |||||||
Commercial Services - 3.6% | |||||||||||
610,295 | CoStar Group, Inc.* | 34,451,152 | |||||||||
2,346,939 | Intermap Technologies, Ltd.*,£ | 12,951,669 | |||||||||
115,690 | Providence Service Corp.*,# | 3,623,411 | |||||||||
346,800 | Traffic.com, Inc.*,# | 2,174,436 | |||||||||
53,200,668 | |||||||||||
Commercial Services - Finance - 3.3% | |||||||||||
193,212 | Bankrate, Inc.*,# | 9,326,343 | |||||||||
615,431 | Euronet Worldwide, Inc.*,# | 21,995,503 | |||||||||
544,620 | Heartland Payment Systems, Inc.*,# | 14,290,829 | |||||||||
91,715 | Wright Express Corp.*,# | 2,823,905 | |||||||||
48,436,580 | |||||||||||
Computer Services - 1.4% | |||||||||||
3,080,025 | LivePerson, Inc.*,£ | 21,159,772 | |||||||||
Computer Software - 1.2% | |||||||||||
813,544 | Blackbaud, Inc. | 17,092,559 | |||||||||
Computers - Voice Recognition - 2.1% | |||||||||||
1,214,822 | TALX Corp.#,£ | 31,597,520 | |||||||||
Consulting Services - 4.0% | |||||||||||
478,300 | Advisory Board Co.*,# | 26,842,195 | |||||||||
643,125 | Huron Consulting Group, Inc.*,# | 22,863,094 | |||||||||
446,125 | Navigant Consulting, Inc.*,# | 9,404,315 | |||||||||
59,109,604 | |||||||||||
Consumer Products - Miscellaneous - 2.4% | |||||||||||
1,044,990 | Jarden Corp.*,# | 35,529,660 | |||||||||
Data Processing and Management - 1.8% | |||||||||||
2,158,853 | Infocrossing, Inc.*,#,£ | 26,920,897 | |||||||||
Dialysis Centers - 0% | |||||||||||
13,350 | Dialysis Corporation of America* | 168,477 |
Shares or Principal Amount | Value | ||||||||||
Direct Marketing - 1.6% | |||||||||||
1,704,932 | ValueVision Media, Inc.*,£ | $ | 21,311,650 | ||||||||
211,690 | ValueVision Media, Inc. - Class A* | 2,646,125 | |||||||||
23,957,775 | |||||||||||
Distribution/Wholesale - 1.8% | |||||||||||
481,880 | Beacon Roofing Supply, Inc.*,# | 17,829,560 | |||||||||
249,889 | MWI Veterinary Supply, Inc.*,# | 8,883,554 | |||||||||
26,713,114 | |||||||||||
Drug Delivery Systems - 0.8% | |||||||||||
904,930 | I-Flow Corp.*,# | 12,379,442 | |||||||||
E-Commerce/Products - 2.4% | |||||||||||
29,670 | Baby Universe, Inc.*,# | 265,843 | |||||||||
46,420 | Blue Nile, Inc.*,# | 1,615,416 | |||||||||
1,235,550 | Submarino S.A.* | 33,449,246 | |||||||||
35,330,505 | |||||||||||
E-Commerce/Services - 0.5% | |||||||||||
4,957,152 | Workstream, Inc. (U.S. Shares)*,£ | 6,692,155 | |||||||||
E-Marketing/Information - 1.2% | |||||||||||
232,475 | Liquidity Services, Inc.* | 3,136,088 | |||||||||
896,380 | ValueClick, Inc.*,# | 15,104,003 | |||||||||
18,240,091 | |||||||||||
E-Services/Consulting - 1.0% | |||||||||||
804,165 | GSI Commerce, Inc.* | 14,064,846 | |||||||||
Electronic Components - Semiconductors - 0.7% | |||||||||||
1,011,147 | MIPS Technologies, Inc.* | 7,492,600 | |||||||||
92,675 | SiRF Technology Holdings, Inc.* | 3,164,851 | |||||||||
10,657,451 | |||||||||||
Electronic Measuring Instruments - 1.0% | |||||||||||
296,781 | Trimble Navigation, Ltd.*,# | 14,061,484 | |||||||||
Enterprise Software/Services - 5.0% | |||||||||||
183,440 | Emageon, Inc.*,# | 3,256,060 | |||||||||
1,927,879 | Omnicell, Inc.*,£ | 25,679,348 | |||||||||
1,775,000 | Ultimate Software Group, Inc.*,£ | 45,386,749 | |||||||||
74,322,157 | |||||||||||
Entertainment Software - 0.3% | |||||||||||
1,943,905 | Excapsa Software, Inc.* | 3,987,916 | |||||||||
Finance - Investment Bankers/Brokers - 0.9% | |||||||||||
417,485 | optionsXpress Holdings, Inc. | 13,150,778 | |||||||||
Finance - Other Services - 2.0% | |||||||||||
624,060 | International Securities Exchange, Inc.# | 27,427,437 | |||||||||
185,015 | MarketAxess Holdings, Inc.* | 2,064,767 | |||||||||
29,492,204 | |||||||||||
Food - Canned - 0.8% | |||||||||||
468,575 | TreeHouse Foods, Inc.* | 12,276,665 | |||||||||
Footwear and Related Apparel - 0.3% | |||||||||||
160,845 | Crocs, Inc.*,# | 4,809,266 | |||||||||
Gambling - Non-Hotel - 1.1% | |||||||||||
1,528,091 | Century Casinos, Inc.*,£ | 15,449,000 | |||||||||
Hotels and Motels - 2.2% | |||||||||||
174,740 | Four Seasons Hotels, Inc. | 9,439,455 | |||||||||
569,445 | Orient-Express Hotel, Ltd. - Class A | 23,347,245 | |||||||||
32,786,700 |
See Notes to Schedules of Investments and Financial Statements.
56 Janus Growth Funds April 30, 2006
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Human Resources - 1.9% | |||||||||||
347,695 | Barrett Business Services, Inc.* | $ | 9,186,102 | ||||||||
334,420 | Kenexa Corp.*,# | 11,112,777 | |||||||||
298,770 | Resources Connection, Inc.*,# | 8,036,913 | |||||||||
28,335,792 | |||||||||||
Industrial Audio and Video Products - 1.0% | |||||||||||
794,468 | Sonic Solutions*,# | 14,077,973 | |||||||||
Internet Applications Software - 0.8% | |||||||||||
354,835 | DealerTrack Holdings, Inc.*,# | 7,912,820 | |||||||||
229,610 | Vocus, Inc.*,# | 3,503,849 | |||||||||
11,416,669 | |||||||||||
Internet Content - Entertainment - 0.8% | |||||||||||
2,308,435 | Harris Interactive, Inc.*,# | 11,149,741 | |||||||||
Investment Companies - 0.3% | |||||||||||
230,960 | UTEK Corp.* | 3,736,933 | |||||||||
Investment Management and Advisory Services - 0.8% | |||||||||||
302,505 | Calamos Asset Management, Inc. - Class A# | 11,725,094 | |||||||||
Leisure and Recreation Products - 0.2% | |||||||||||
94,050 | WMS Industries, Inc.*,# | 2,939,063 | |||||||||
Marine Services - 0.4% | |||||||||||
1,748,955 | Odyssey Marine Exploration, Inc.*,# | 6,173,811 | |||||||||
Medical - Biomedical and Genetic - 0.2% | |||||||||||
139,240 | Coley Pharmaceutical Group*,# | 2,226,448 | |||||||||
Medical - Drugs - 0.7% | |||||||||||
176,305 | Adams Respiratory Therapeutics, Inc.*,# | 7,561,721 | |||||||||
50,000 | Cubist Pharmaceuticals, Inc.* | 1,133,500 | |||||||||
196,264 | Idenix Pharmaceuticals, Inc.*,# | 1,970,491 | |||||||||
10,665,712 | |||||||||||
Medical - HMO - 2.6% | |||||||||||
973,779 | Centene Corp.* | 25,016,383 | |||||||||
325,130 | WellCare Health Plans, Inc.*,# | 13,616,444 | |||||||||
38,632,827 | |||||||||||
Medical - Hospitals - 1.4% | |||||||||||
642,502 | United Surgical Partners International, Inc.*,# | 21,208,991 | |||||||||
Medical - Outpatient and Home Medical Care - 3.1% | |||||||||||
1,549,375 | Hythiam, Inc.*,#,£ | 13,851,413 | |||||||||
602,940 | LHC Group LLC*,# | 10,491,156 | |||||||||
852,209 | Radiation Therapy Services, Inc.*,# | 21,773,939 | |||||||||
46,116,508 | |||||||||||
Medical - Wholesale Drug Distributors - 0.3% | |||||||||||
6,100,000 | DrugMax, Inc.*,£ | 3,965,000 | |||||||||
590,098 | DrugMax, Inc.* | 383,564 | |||||||||
4,348,564 | |||||||||||
Medical Instruments - 2.7% | |||||||||||
41,974 | CONMED Corp. | 915,453 | |||||||||
259,605 | Dexcom, Inc.*,# | 6,531,662 | |||||||||
464,590 | ev3, Inc.*,# | 7,289,417 | |||||||||
298,150 | FoxHollow Technologies, Inc.*,# | 9,287,373 | |||||||||
92,485 | Intuitive Surgical, Inc.* | 11,745,594 | |||||||||
92,970 | Ventana Medical Systems, Inc.*,# | 4,527,639 | |||||||||
40,297,138 | |||||||||||
Medical Labs and Testing Services - 0.2% | |||||||||||
142,544 | Bio-Reference Laboratories, Inc.*,# | 2,722,590 |
Shares or Principal Amount | Value | ||||||||||
Medical Products - 1.3% | |||||||||||
939,425 | PSS World Medical, Inc.*,# | $ | 16,947,227 | ||||||||
665,834 | ThermoGenesis Corp.*,# | 2,749,894 | |||||||||
19,697,121 | |||||||||||
Miscellaneous Manufacturing - 1.2% | |||||||||||
505,410 | American Railcar Industries, Inc. | 18,043,137 | |||||||||
Motion Pictures and Services - 1.9% | |||||||||||
2,880,100 | Lions Gate Entertainment Corp. (U.S. Shares)* | 28,138,577 | |||||||||
Music - 0.5% | |||||||||||
3,562,500 | Genius Products, Inc.*,oo,§,£ | 5,775,525 | |||||||||
1,187,500 | Genius Products, Inc.* | 2,291,875 | |||||||||
8,067,400 | |||||||||||
Office Furnishings - Original - 0.8% | |||||||||||
545,040 | Knoll, Inc.# | 11,854,620 | |||||||||
Oil - Field Services - 1.9% | |||||||||||
229,860 | Basic Energy Services, Inc.*,# | 7,661,234 | |||||||||
168,592 | Flint Energy Services, Ltd.* | 9,575,235 | |||||||||
644,820 | Key Energy Services, Inc.*,# | 11,019,974 | |||||||||
28,256,443 | |||||||||||
Oil Companies - Exploration and Production - 2.3% | |||||||||||
277,860 | Carrizo Oil & Gas, Inc.*,# | 8,163,527 | |||||||||
�� | 103,235 | Complete Production Services, Inc.* | 2,728,501 | ||||||||
1,157,115 | Gasco Energy, Inc.*,# | 6,479,844 | |||||||||
518,645 | Western Oil Sands, Inc. - Class A* | 15,683,903 | |||||||||
33,055,775 | |||||||||||
Optical Recognition Equipment - 1.0% | |||||||||||
951,750 | Optimal Robotics Corp. - Class A (U.S. Shares)*,# | 14,647,433 | |||||||||
Pharmacy Services - 1.2% | |||||||||||
446,875 | HealthExtras, Inc.*,# | 12,986,188 | |||||||||
1,591,512 | Ronco Fi-Tek, Inc.*,oo,§,£ | 5,100,000 | |||||||||
18,086,188 | |||||||||||
Quarrying - 0.2% | |||||||||||
277,245 | Birch Mountain Resources, Ltd. (U.S. Shares)*,# | 2,059,930 | |||||||||
Real Estate Operating/Development - 0.3% | |||||||||||
454,470 | Gafisa S.A.* | 4,638,338 | |||||||||
REIT - Mortgages - 0.8% | |||||||||||
503,349 | CapitalSource, Inc.# | 11,828,702 | |||||||||
Research and Development - 0.3% | |||||||||||
185,350 | PRA International*,# | 4,311,241 | |||||||||
Resorts and Theme Parks - 0.6% | |||||||||||
236,755 | Intrawest Corp. (U.S. Shares) | 8,499,505 | |||||||||
Retail - Apparel and Shoe - 0.2% | |||||||||||
185,355 | Bebe Stores, Inc. | 3,277,076 | |||||||||
Retail - Computer Equipment - 0.5% | |||||||||||
394,085 | Insight Enterprises, Inc.*,# | 7,791,060 | |||||||||
Retail - Petroleum Products - 2.1% | |||||||||||
763,405 | World Fuel Services Corp.# | 30,566,736 | |||||||||
Semiconductor Components/Integrated Circuits - 0.5% | |||||||||||
202,857 | Hittite Microwave Corp.*,# | 7,893,166 | |||||||||
Sugar - 0.6% | |||||||||||
2,077,918 | Balrampur Chini Mills, Ltd. | 8,705,042 |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2006 57
Janus Venture Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Telecommunication Services - 1.0% | |||||||||||
422,685 | NeuStar, Inc. - Class A*,# | $ | 14,836,244 | ||||||||
Therapeutics - 2.9% | |||||||||||
718,850 | MGI Pharma, Inc.*,# | 13,428,118 | |||||||||
246,796 | Neurocrine Biosciences, Inc.* | 14,156,219 | |||||||||
202,080 | United Therapeutics Corp.* | 12,033,864 | |||||||||
543,405 | ViaCell, Inc.*,# | 3,146,315 | |||||||||
42,764,516 | |||||||||||
Toys - 1.4% | |||||||||||
1,078,010 | Marvel Entertainment, Inc.*,# | 21,031,975 | |||||||||
Transactional Software - 1.7% | |||||||||||
893,710 | Open Solutions, Inc.*,# | 24,326,786 | |||||||||
Transportation - Railroad - 1.7% | |||||||||||
397,700 | All America Latina Logistica (GDR) | 25,155,907 | |||||||||
Transportation - Services - 1.1% | |||||||||||
491,425 | Pacer International, Inc.# | 16,850,963 | |||||||||
Travel Services - 0.1% | |||||||||||
1,145,454 | OneTravel Holdings, Inc.*,£ | 630,000 | |||||||||
Web Hosting/Design - 2.1% | |||||||||||
473,610 | Equinix, Inc.* | 31,210,899 | |||||||||
Total Common Stock (cost $1,005,548,027) | 1,474,656,928 |
Shares or Principal Amount | Value | ||||||||||
Preferred Stock - 0% | |||||||||||
Computers - Peripheral Equipment - 0% | |||||||||||
665,000 | Candescent Technologies Corp. - Series Eß,•,ºº (cost $3,657,500) | $ | 0 | ||||||||
Warrants - 0.2% | |||||||||||
Data Processing and Management - 0.2% | |||||||||||
521,660 | Infocrossing, Inc. - expires 10/16/08ß,oo | 2,404,853 | |||||||||
Medical - Wholesale Drug Distributors - 0% | |||||||||||
3,050,000 | DrugMax, Inc. - expires 9/29/10oo,§ | 0 | |||||||||
Music - 0% | |||||||||||
1,425,000 | Genius Products, Inc. - expires 12/5/10oo,§ | 529,245 | |||||||||
Travel Services - 0% | |||||||||||
458,181 | OneTravel Holdings, Inc. - expires 4/14/10oo,§ | 0 | |||||||||
Total Warrants (cost $1,464,250) | 2,934,098 | ||||||||||
Other Securities - 24.7% | |||||||||||
364,896,141 | State Street Navigator Securities Lending Prime Portfolio† (cost $364,896,141) | 364,896,141 | |||||||||
Total Investments (total cost $1,375,565,918) – 124.9% | $ | 1,842,487,167 | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (24.9)% | (367,391,779 | ) | |||||||||
Net Assets – 100% | $ | 1,475,095,388 |
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Bermuda | $ | 23,347,245 | 1.3 | % | |||||||
Brazil | 64,803,625 | 3.5 | % | ||||||||
Canada | 111,675,778 | 6.0 | % | ||||||||
India | 8,705,042 | 0.5 | % | ||||||||
United States†† | 1,633,955,477 | 88.7 | % | ||||||||
Total | $ | 1,842,487,167 | 100.0 | % |
††Includes Other Securities (68.9% excluding Other Securities)
See Notes to Schedules of Investments and Financial Statements.
58 Janus Growth Funds April 30, 2006
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.
Thomas Malley
portfolio manager
Performance Overview
Although the outlook for long-term interest rates remained murky and the Federal Reserve kept pushing up short-term yields, small capitalization stocks sparkled during the six-month period ended April 30, 2006, posting double-digit gains that topped the otherwise solid returns posted by mid-cap and large-cap equities.
In the life sciences sector, investors soured on biotechnology and managed healthcare companies late in the period, resulting in a sizeable pullback in both groups, which had previously been standouts. While valuation concerns arose in the biotechnology space, especially in relation to more speculative names, rising medical costs weighed on managed healthcare companies. As a result, the two groups closed out the period ranked among the poorest performing sectors in the industry.
Elsewhere, government reimbursement uncertainties proved increasingly worrisome to medical device companies. Interestingly, large pharmaceutical companies, which have contended with such concerns for much longer, tended to fair better during the period. Holding significant exposure to biotechnology companies and health insurers, the Fund generated a 4.44% return during the period, trailing its benchmarks, the S&P 500® Index and the Morgan Stanley Capital International World Health Care IndexSM, which advanced 9.64% and 6.63%, respectively.
Our exposure to the biotechnology group focused heavily on small capitalization companies, which tend to be tied to drug-related developments. During much of the period, we also sensed an urgency among larger pharmaceutical concerns to acquire cutting edge compounds. We have found that once a small company announces measurable success in a Phase III trial, the market immediately figures the company has added leverage, in terms of a possible licensing deal or potential acquisition, and generally pushes the stock upward. As the price climbs, however, risk factors increase as well, and we regularly assess our reasons for investing.
Detractors from Fund Performance
The largest detractor from performance, United Therapeutics, rose sharply during the first 8 months of 2005 on good earnings growth. However, it fell during the period as the company suffered from inventory destocking and higher market costs. United Therapeutics was one of the names that perhaps got ahead of itself before falling in the wake of a disappointing earnings report. The company's Remodulin treatment for high blood pressure has enjoyed increased sales and it is developing an inhaled version of the drug that we believe holds further promise. In addition, United Therapeutics recently expanded its sales force and has an ovarian cancer antibody, Ovarex, in Phase III trials. Given the potential catalysts for future growth, we continue to hold the stock.
We upped our exposure to another biotechnology laggard, Idenix Pharmaceuticals. The company's stock dropped over misperceptions that experiential trials on the hepatitis C drug it's developing with Novartis of Switzerland were scrapped. Instead, side effects from the treatment prompted researchers to cut the dosage level, and Novartis responded by reiterating its support for the drug development effort.
Conversely, the outlook for LifePoint Hospitals worsened, prompting us to exit the stock. The aftereffects of Hurricane Katrina lingered longer than anticipated for this owner and operator of 53 rural hospitals, including five in Louisiana. Issues with Medicare reimbursement policies and the integration of Province Healthcare, which was acquired in 2005, added to the company's woes, which convinced us to move on.
Contributors to Fund Performance
While investing in small biotechnology companies can indeed be precarious, the Fund also enjoyed some stellar returns from the group, including top performer Adolor, which surged as it released preliminary trial data that showed its Entereg treatment was effective at helping patients recover more quickly from opiod-induced constipation after surgery. On track for a 2007 approval from the Food and Drug Administration (FDA), the drug significantly reduced post-operative intestinal distress among trial subjects. It's also being studied for relief of bowel dysfunction from chronic opiod use.
Another innovative company, Alexion Pharmaceuticals, reported positive developments in Phase III trials for its Soliris treatment for paroxysmal nocturnal hemoglobinuria (PNH). The disease, in which a body's immune system attacks red blood cells, affects about 10,000 people in North America and Europe. If approved, Soliris will significantly reduce the number of required blood transfusions for PNH sufferers, which represents a large quality of life benefit. Pleased with the stock's rally, we took the opportunity to book some profits.
Gilead Sciences continued to see success in the uptake of its once-a-day HIV medication, Truvada, which has steadily taken market share from GlaxoSmithKline's Combivir. Looking ahead, the company has filed for FDA approval of another once-daily combination pill which will mix Truvada and the popular Sustiva treatment from Bristol-Myers Squibb. Given the developments and rise in the stock price, we pared our exposure during the period.
Adding to 2006 gains was Celgene, a biotechnology concern that initiated a fresh rally in the closing days of December when the FDA approved its Revlimid drug for
Janus Growth Funds April 30, 2006 59
Janus Global Life Sciences Fund (unaudited)
treating myelodysplastic syndromes (MDS), a blood-borne cancer. Weeks later, the FDA announced that it had granted a priority review of the company's application for Revlimid to treat multiple myeloma, a bone marrow-based cancer, and a decision was expected by the end of June. Meanwhile, our surveys of physicians suggest Revlimid will enjoy high adoption rates for both indications, so our outlook for the company remains bright. We have moved our position into a six month structured note with Goldman Sachs to reduce volatility to the Fund during the launch period of Revlimid. Our investment position remains the same and at the end of the note, we will receive our old shares back.
Moving beyond healthcare, we actively look for stocks that improve the quality of life in other areas of the market as well. One such industry is agribusiness, an area of the economy that is gaining increased attention as consumer wealth rises across the globe. A new position that meets this criteria and lifted returns immediately was Brazilian agribusiness Cosan, the world's largest processor of sugar cane. Along with Syngenta, another Top 10 performer in the Fund, Cosan has benefited from increases in core food prices around the world, due in part to greater demand from fast-growing Asian countries. Another new name included Stada Arzneimittel of Germany, a leader in the growing European generic drug market.
Looking Ahead
Increasingly, concerns over future Medicare reimbursement levels are dominating discussions within the domestic life sciences sector. From the government plan's massive drug spend to decisions on medical devices and HMO services, fears over healthcare companies' future abilities to effectively raise prices are widespread. Interestingly, in Japan and Europe, price cuts are part of the fundamental equation and are now built into stock prices.
While acknowledging that the U.S. reimbursement debate will likely add to market volatility, we feel good about the long-term potential in the life sciences sector. We believe many of our companies are improving the practices of healthcare and improving the treatment of disease and we're excited about the potential for strong positive developments. Of course, to attempt to mitigate dramatic swings within any individual sector, we will continue to run what we believe to be a balanced, well-diversified portfolio of holdings.
Thank you for your continued investment in Janus Global Life Sciences Fund.
Janus Global Life Sciences Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Adolor Corp. Therapeutic-based biopharmaceutical company - U.S. | 1.54 | % | |||||
Celgene Corp. Global biopharmaceutical company - U.S. | 1.06 | % | |||||
Cosan S.A. Industria e Comercio Food and beverage producer and distributor - Brazil | 0.88 | % | |||||
Alexion Pharmaceuticals, Inc. Biopharmaceutical company - U.S. | 0.86 | % | |||||
Gilead Sciences, Inc. Biopharmaceutical company - U.S. | 0.76 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
United Therapeutics Corp. Vascular pharmaceutical developer - U.S. | (0.73 | %) | |||||
Nabi Biopharmaceuticals Biopharmaceutical company - U.S. | (0.72 | %) | |||||
Idenix Pharmaceuticals, Inc. Biopharmaceutical company - U.S. | (0.68 | %) | |||||
Aetna, Inc. Healthcare and related benefits provider - U.S. | (0.66 | %) | |||||
LifePoint Hospitals, Inc. Health care services provider - U.S. | (0.51 | %) |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Pharmaceuticals & Biotechnology | 5.90 | % | 58.24 | % | 7.88 | % | |||||||||
Food, Beverage & Tobacco | 0.74 | % | 2.13 | % | 4.61 | % | |||||||||
Materials | 0.64 | % | 2.51 | % | 3.01 | % | |||||||||
Insurance | 0.03 | % | 0.31 | % | 4.75 | % | |||||||||
Commercial Services & Supplies | 0.00 | % | 0.00 | % | 0.73 | % |
5 Lowest Contributors/Detractors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Healthcare Equipment & Services | (2.90 | %) | 36.82 | % | 5.17 | % | |||||||||
Utilities | 0.00 | % | 0.00 | % | 3.30 | % | |||||||||
Transportation | 0.00 | % | 0.00 | % | 1.84 | % | |||||||||
Telecommunication Services | 0.00 | % | 0.00 | % | 3.15 | % | |||||||||
Technology Hardware & Equipment | 0.00 | % | 0.00 | % | 7.04 | % |
60 Janus Growth Funds April 30, 2006
(unaudited)
5 Largest Holdings – (% of Net Assets)
As of April 30, 2006 |
Goldman Sachs Group, Inc., convertible, (Celgene Corp.), 0% Finance - Investment Bankers/Brokers | 5.2 | % | |||||
Roche Holding A.G. Medical - Drugs | 4.2 | % | |||||
Coventry Health Care, Inc. Medical - HMO | 3.5 | % | |||||
Aetna, Inc. Medical - HMO | 3.5 | % | |||||
United Therapeutics Corp. Therapeutics | 3.1 | % | |||||
19.5 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2006 |
Emerging markets comprised 4.4% of total net assets.
*Includes short sale of (0.8%).
5 Largest Country Allocations – (% of Investment Securities)
As of April 30, 2006 | As of October 31, 2005 | ||||||
![]() | ![]() | ||||||
Janus Growth Funds April 30, 2006 61
Janus Global Life Sciences Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Five Year | Since Inception* | ||||||||||||||||
Janus Global Life Sciences Fund | 4.44 | % | 15.74 | % | 3.59 | % | 10.10 | % | |||||||||||
S&P 500® Index | 9.64 | % | 15.42 | % | 2.70 | % | 2.45 | % | |||||||||||
Morgan Stanley Capital International World Health Care IndexSM | 6.63 | % | 8.46 | % | 2.84 | % | 1.91 | % | |||||||||||
Lipper Quartile | N/A | 2 | nd | 2 | nd | 2 | nd | ||||||||||||
Lipper Ranking - based on total return for Health/Biotechnology Funds | N/A** | 57/176 | 55/127 | 15/48 |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes 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.
*The Fund's inception date – December 31, 1998
**The Fund's fiscal year-to-date Lipper ranking is not available.
See "Explanations of Charts, Tables and Financial Statements."
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
The Fund emphasizes investments 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).
There is no assurance that the investment process will consistently lead to successful investing.
A 2% redemption fee may be imposed on shares held for 3 months or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
Returns have sustained significant gains due to market volatility in the healthcare sector.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,044.40 | $ | 5.02 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.89 | $ | 4.96 |
*Expenses are equal to the annualized expense ratio of 0.99%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
62 Janus Growth Funds April 30, 2006
Janus Global Life Sciences Fund
Schedule of Investments and Securities Sold Short (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Common Stock – 94.2% | |||||||||||
Agricultural Chemicals - 2.9% | |||||||||||
228,405 | Syngenta A.G.*,** | $ | 31,861,043 | ||||||||
Dental Supplies and Equipment - 1.4% | |||||||||||
476,605 | Patterson Companies, Inc.*,# | 15,527,791 | |||||||||
Diagnostic Kits - 2.0% | |||||||||||
566,076 | Dade Behring Holdings, Inc. | 22,076,964 | |||||||||
Drug Delivery Systems - 1.2% | |||||||||||
337,935 | Hospira, Inc.* | 13,027,394 | |||||||||
Food - Dairy Products - 1.2% | |||||||||||
353,700 | Dean Foods Co.* | 14,010,057 | |||||||||
Instruments - Scientific - 2.2% | |||||||||||
348,790 | Fisher Scientific International, Inc.*,# | 24,607,135 | |||||||||
Medical - Biomedical and Genetic - 10.0% | |||||||||||
443,900 | Advanced Magnetics, Inc.*,# | 11,585,790 | |||||||||
533,280 | Alexion Pharmaceuticals, Inc.* | 18,126,187 | |||||||||
239,080 | Amgen, Inc.*,** | 16,185,716 | |||||||||
1,271,821 | Fibrogen, Inc.*,oo,§ | 9,106,238 | |||||||||
209,500 | Genentech, Inc.* | 16,699,245 | |||||||||
201,300 | Genmab A/S*,# | 7,131,719 | |||||||||
175,140 | Genzyme Corp.* | 10,711,562 | |||||||||
325,845 | Invitrogen Corp.*,# | 21,509,029 | |||||||||
111,055,486 | |||||||||||
Medical - Drugs - 28.6% | |||||||||||
438,955 | Abbott Laboratories | 18,760,937 | |||||||||
1,229,248 | Adolor Corp.*,# | 28,911,913 | |||||||||
1,163,340 | Cubist Pharmaceuticals, Inc.* | 26,372,918 | |||||||||
516,825 | Endo Pharmaceuticals Holdings, Inc.* | 16,254,146 | |||||||||
475,580 | Forest Laboratories, Inc.* | 19,203,920 | |||||||||
653,784 | Idenix Pharmaceuticals, Inc.*,# | 6,563,991 | |||||||||
513,175 | K-V Pharmaceutical Co. - Class A*,# | 11,074,317 | |||||||||
1,346,445 | Ligand Pharmaceuticals, Inc. - Class B*,# | 16,493,951 | |||||||||
765,535 | Merck & Company, Inc. | 26,349,715 | |||||||||
321,039 | Novartis A.G.**,# | 18,417,937 | |||||||||
907,225 | Pfizer, Inc. | 22,980,009 | |||||||||
308,325 | Roche Holding A.G.** | 47,409,753 | |||||||||
505,770 | Shire PLC (ADR)**,# | 23,953,267 | |||||||||
416,486 | Stada Arzneimittel A.G.# | 20,087,631 | |||||||||
314,625 | Wyeth | 15,312,799 | |||||||||
318,147,204 | |||||||||||
Medical - Generic Drugs - 3.0% | |||||||||||
178,110 | Barr Pharmaceuticals, Inc.* | 10,784,561 | |||||||||
559,510 | Teva Pharmaceutical Industries, Ltd. (ADR)# | 22,660,155 | |||||||||
33,444,716 | |||||||||||
Medical - HMO - 11.3% | |||||||||||
998,455 | Aetna, Inc. | 38,440,518 | |||||||||
900,750 | Centene Corp.*,# | 23,140,268 | |||||||||
788,267 | Coventry Health Care, Inc.* | 39,153,221 | |||||||||
493,130 | UnitedHealth Group, Inc. | 24,528,286 | |||||||||
125,262,293 | |||||||||||
Medical - Hospitals - 0.9% | |||||||||||
291,799 | United Surgical Partners International, Inc.*,# | 9,632,285 | |||||||||
Medical - Nursing Homes – 1.7% | |||||||||||
432,305 | Manor Care, Inc.# | 18,956,574 |
Shares or Principal Amount | Value | ||||||||||
Medical - Wholesale Drug Distributors - 2.9% | |||||||||||
486,750 | Cardinal Health, Inc. | $ | 32,782,613 | ||||||||
Medical Instruments - 2.3% | |||||||||||
755,725 | Boston Scientific Corp.* | 17,563,049 | |||||||||
720,985 | Stereotaxis, Inc.*,# | 8,536,462 | |||||||||
26,099,511 | |||||||||||
Medical Products - 2.2% | |||||||||||
267,695 | Stryker Corp. | 11,711,656 | |||||||||
241,355 | Varian Medical Systems, Inc.* | 12,642,175 | |||||||||
24,353,831 | |||||||||||
Optical Supplies - 1.1% | |||||||||||
120,010 | Alcon, Inc. (U.S. Shares)** | 12,206,217 | |||||||||
Pharmacy Services - 1.6% | |||||||||||
331,950 | Medco Health Solutions, Inc.* | 17,669,699 | |||||||||
Physical Therapy and Rehabilitation Centers - 1.7% | |||||||||||
4,097,185 | HEALTHSOUTH Corp.*,# | 18,765,107 | |||||||||
Respiratory Products - 1.4% | |||||||||||
418,860 | Respironics, Inc.* | 15,338,653 | |||||||||
Sugar - 2.4% | |||||||||||
342,900 | Cosan S.A. Industria e Comercio* | 26,387,034 | |||||||||
Therapeutics - 12.2% | |||||||||||
318,255 | Amylin Pharmaceuticals, Inc.*,# | 13,860,005 | |||||||||
588,160 | Gilead Sciences, Inc.* | 33,819,200 | |||||||||
1,094,490 | MGI Pharma, Inc.*,# | 20,445,073 | |||||||||
367,920 | Neurocrine Biosciences, Inc.* | 21,103,891 | |||||||||
763,560 | Nuvelo, Inc.*,# | 12,499,477 | |||||||||
578,984 | United Therapeutics Corp.* | 34,478,498 | |||||||||
136,206,144 | |||||||||||
Total Common Stock (cost $818,081,137) | 1,047,417,751 | ||||||||||
Preferred Stock - 0.3% | |||||||||||
Medical - Biomedical and Genetic - 0.3% | |||||||||||
1,678,901 | Cougar Technology, Inc.oo, § (cost $2,904,499) | 2,904,499 | |||||||||
Equity-Linked Structured Note - 5.2% | |||||||||||
Finance - Investment Bankers/Brokers - 5.2% | |||||||||||
721,700 | Goldman Sachs Group, Inc., convertible (Celgene Corp.), 0% ß (cost $50,584,242) | 57,727,340 | |||||||||
Other Securities - 15.6% | |||||||||||
174,002,620 | State Street Navigator Securities Lending Prime Portfolio † (cost $174,002,620) | 174,002,620 | |||||||||
Securities Sold Short - (0.8)% | |||||||||||
Medical - Nursing Homes - (0.8)% | |||||||||||
354,350 | Kindred Healthcare, Inc.* (proceeds $8,353,528) | (8,596,531 | ) | ||||||||
Total Investments and Securities Sold Short (total cost $1,037,218,970) – 114.5% | 1,273,455,679 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (14.5)% | (160,986,274 | ) | |||||||||
Net Assets – 100% | $ | 1,112,469,405 |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2006 63
Janus Global Life Sciences Fund
Schedule of Investments and Securities Sold Short (unaudited)
As of April 30, 2006
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Brazil | $ | 26,387,034 | 2.1 | % | |||||||
Denmark | 7,131,719 | 0.5 | % | ||||||||
Germany | 20,087,631 | 1.6 | % | ||||||||
Israel | 22,660,155 | 1.8 | % | ||||||||
Switzerland | 109,894,950 | 8.6 | % | ||||||||
United Kingdom | 23,953,267 | 1.9 | % | ||||||||
United States†† | 1,063,340,923 | 83.5 | % | ||||||||
Total | $ | 1,273,455,679 | 100.0 | % |
†† Includes Other Securities (69.8% excluding Other Securities)
Forward Currency Contracts, Open
Currency Sold and Settlement Date | Currency Units Sold | Currency Value in $ U.S. | Unrealized Gain/(Loss) | ||||||||||||
British Pound 8/10/06 | 2,500,000 | $ | 4,565,248 | $ | (221,223 | ) | |||||||||
British Pound 10/19/06 | 600,000 | 1,096,905 | (22,839 | ) | |||||||||||
Swiss Franc 6/28/06 | 26,750,000 | 21,716,576 | (405,334 | ) | |||||||||||
Swiss Franc 8/10/06 | 4,700,000 | 3,832,917 | (191,877 | ) | |||||||||||
Total | $ | 31,211,646 | $ | (841,273 | ) |
See Notes to Schedules of Investments and Financial Statements.
64 Janus Growth Funds April 30, 2006
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.
Team Based Approach
Led by Brad Slingerlend and Barney Wilson
Performance Overview
As inflationary fears and budget deficit concerns simmered beneath an otherwise healthy domestic economic environment, global equities generally outperformed U.S. stocks during the six-month period ended April 30, 2006.
The Federal Reserve did little to help underlying sentiments as it continued its steady drumbeat of quarter-point rate hikes – adding 1.00% to the overnight lending rate during the period.
Buoyed by a number of solid overseas companies, Janus Global Technology Fund generated a 19.01% return during the period, outperforming its benchmarks, the S&P 500® Index, which advanced 9.64%, and the Morgan Stanley Capital International World Information Technology IndexSM, which gained 12.02%.
Investment Strategy
On February 1, 2006, we assumed management responsibility for the Fund and it spent part of the period in transition. While the Fund has always relied on the excellent work done by the Janus technology research team, we've decided to sharpen its focus on the group's best ideas. Accordingly, we're striving for 90% of the Fund's holdings to be "buy" or "strong buy" rated by Janus analysts. As part of the refinement process during the period, we scaled back the number of the Fund's holdings and finished within our ideal target of between 50 and 70 names.
Contributors to Fund Performance
Leading the way on a performance basis was Hon Hai Precision. The Taiwanese contract manufacturer reported a phenomenal 68.3% gain in sales during 2005 while it expanded its share of the personal computer, consumer electronic and enterprise technology markets. As the growth rate slowed somewhat through the first four months of 2006, we're watching carefully to assess this long-term holding's prospects going forward.
Elsewhere, wireless technology developer Research in Motion (RIM) of Canada rallied after resolving a problematic patent issue with its popular BlackBerry communications service. Having tracked the company for several years, we frequently supplemented its own information with subscriber data from wireless service carriers. Thus, we believed that separate from the legal issues, it was still a high growth company with great returns and a courtroom battle wasn't going to stop that from continuing. We added heavily to the Fund's stake in 2005 as a reflection of our conviction. Once the settlement with rival NTP was announced in March, RIM's stock appreciated significantly and we were pleased to take some profits.
Glassworks innovator Corning is another longtime holding that rewarded us during the period. Again, by leveraging our global research efforts and the wide reach of the Janus technology analyst team, we determined the full extent of the company's leadership position in the liquid crystal display (LCD) market.
Following discussions with Corning customers and plant visits in the U.S. and Asia, we concluded that the company, relying on a proprietary manufacturing technology, frequently leads the industry into the next generation of glass displays, both in size and related technology. This edge has proven critical as television manufacturers keep expanding the market for large LCD screens. The first-mover advantage translates into higher margins, which are especially valuable when end-market demand accelerates quicker than anticipated, which happened during the period. However, as Corning's stock climbed, it reached our target price so we liquidated the position.
Our global research efforts also led us to SOITEC, a French developer of silicon technology that essentially provides an insulation layer for semiconductor chips. The structure allows microprocessors to run faster with lower heat, which provides a performance advantage for chip manufacturers. Currently used in a small number of circumstances, we believe the technology will gain traction and proliferate through the chip industry and we'll see more supplier agreements such as the one it recently signed with Advanced Micro Devices. Based on our confidence in the company, we significantly increased the Fund's exposure.
A company with a similarly promising outlook that's already well-entrenched in the industry is business software developer SAP of Germany. Validating SAP's strong marketing message that the company's enterprise software improves business metrics and makes companies more competitive, we believe the return on investment for SAP clients is remarkably high. As the company has consistently delivered on its promises, we believe SAP's growth rate will exceed that of the technology sector for a multi-year period.
Detractors from Fund Performance
Weighing on performance was Internet services outfit Yahoo!, which sagged amid mixed reviews of its search-generated revenue growth rate. We actually believed the response was overblown, viewed the compelling valuation as an opportunity and increased the Fund's position. Ultimately, we believe the potential for paid search and other advertising revenues, along with the increasing complexity of content available on the Web, outweighs any short-term setbacks.
We witnessed another opportunistic shortfall in Internet protocol (IP) network gear Juniper Networks. Underwhelming quarterly results contributed to an extended selloff in the stock, although we added to the Fund's stake. We believe the sagging revenues will prove to be of temporary consequence, rather than the early inklings of a long-term fundamental problem. Eventually, we believe that voice, video and data
Janus Growth Funds April 30, 2006 65
Janus Global Technology Fund (unaudited)
delivery will all converge on IP networks, leading to steady demand for Juniper's equipment, perhaps most notably from the large telecommunication services carriers which will need to upgrade their networks.
Computer maker Dell also declined amid short-term revenue growth issues. Although we locked in some profits on the stock as share prices approached near-term targets, we continue to hold a significant stake in the company. Ultimately, we believe the value of its well-honed direct-distribution model and its track record of strong execution will return to the fore, especially considering double-digit growth projections for computer sales during 2006.
Online auction host eBay continued to disappoint as its flagship domestic marketplace business faltered. Despite steady growth in merchandise listings, the increase in revenue gains eased modestly, tempering management's optimism. The company's PayPal division is a steady outperformer and the voice over Internet protocol service provider Skype boasts high user volumes, although generating revenues from that business has proven challenging. While maintaining a stake in eBay, we're carefully gauging its ability to execute and drive new earnings going forward.
Looking Ahead
As Janus' grassroots research efforts delve deep into company fundamentals, our analysts frequently find stocks that are undervalued in relation to the company's potential. Furthermore, by narrowing the Fund's focus to the team's top 50-70 ideas, we believe we're concentrating on the best prospects for appreciation in the world.
In the coming quarters, the emphasis on company-level research will likely gain in importance as we don't believe any dramatic, broad-based themes will emerge from the technology sector. Instead, we believe exciting names with potential exist in virtually all corners of the technology universe, independent of any overall outlook for the group.
By seeking out and investing in companies that are underestimated, misunderstood and undervalued by the broader market, we will attempt to continue to deliver benchmark-beating returns from the technology sector.
Thank you for your investment in Janus Global Technology Fund.
Janus Global Technology Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Hon Hai Precision Industry Company, Ltd. Personal computer parts company - Taiwan | 1.56 | % | |||||
Marvell Technology Group, Ltd. Communication-related integrated circuits provider - U.S. | 1.17 | % | |||||
Advanced Micro Devices, Inc. Integrated circuits provider - U.S. | 0.97 | % | |||||
Broadcom Corp. - Class A Integrated silicon solutions provider - U.S. | 0.94 | % | |||||
Samsung Electronics Company, Ltd. Diversified electronics manufacturer - Korea | 0.91 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Yahoo!, Inc. Global Internet media company - U.S. | (0.49 | %) | |||||
Juniper Networks, Inc. Internet infrastructure solutions provider - U.S. | (0.42 | %) | |||||
Dell, Inc. Worldwide computer systems and services - U.S. | (0.38 | %) | |||||
eBay, Inc. Online marketplace - U.S. | (0.20 | %) | |||||
Check Point Software Technologies, Ltd. (U.S. Shares) Internet security provider - U.S. | (0.18 | %) |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Semiconductors & Semiconductor Equipment | 8.31 | % | 26.59 | % | 3.15 | % | |||||||||
Technology Hardware & Equipment | 6.04 | % | 31.06 | % | 7.04 | % | |||||||||
Software & Services | 3.60 | % | 32.24 | % | 5.44 | % | |||||||||
Consumer Durables & Apparel | 0.83 | % | 2.18 | % | 1.31 | % | |||||||||
Retailing | 0.43 | % | 2.91 | % | 3.59 | % |
5 Lowest Contributors/Detractors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Pharmaceuticals & Biotechnology | (0.05 | %) | 0.32 | % | 7.88 | % | |||||||||
Utilities | 0.00 | % | 0.00 | % | 3.30 | % | |||||||||
Transportation | 0.00 | % | 0.00 | % | 1.84 | % | |||||||||
Real Estate | 0.00 | % | 0.00 | % | 0.79 | % | |||||||||
Insurance | 0.00 | % | 0.00 | % | 4.75 | % |
66 Janus Growth Funds April 30, 2006
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2006 |
Yahoo!, Inc. Web Portals/Internet Service Providers | 3.8 | % | |||||
Advanced Micro Devices, Inc. Electronic Components - Semiconductors | 3.2 | % | |||||
Oracle Corp. Enterprise Software/Services | 2.9 | % | |||||
Amdocs, Ltd. (U.S. Shares) Telecommunication Services | 2.9 | % | |||||
QUALCOMM, Inc. Wireless Equipment | 2.7 | % | |||||
15.5 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2006 |
Emerging markets comprised 9.1% of total net assets.
5 Largest Country Allocations – (% of Investment Securities)
As of April 30, 2006 | As of October 31, 2005 | ||||||
![]() | ![]() | ||||||
Janus Growth Funds April 30, 2006 67
Janus Global Technology Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Five Year | Since Inception* | ||||||||||||||||
Janus Global Technology Fund | 19.01 | % | 34.60 | % | (4.49 | )% | 3.90 | % | |||||||||||
S&P 500® Index | 9.64 | % | 15.42 | % | 2.70 | % | 2.45 | % | |||||||||||
Morgan Stanley Capital International World Information Technology IndexSM | 12.02 | % | 22.49 | % | (3.36 | )% | (2.35 | )% | |||||||||||
Lipper Quartile | N/A | 2 | nd | 3 | rd | 1 | st | ||||||||||||
Lipper Ranking - based on total return for Science & Technology Funds | N/A** | 94/292 | 132/230 | 17/76 |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes 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.
*The Fund's inception date – December 31, 1998
**The Fund's fiscal year-to-date Lipper ranking is not available.
See "Explanations of Charts, Tables and Financial Statements."
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
There is no assurance that the investment process will consistently lead to successful investing.
A 2% redemption fee may be imposed on shares held for 3 months or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
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).
Returns have sustained significant gains due to market volatility in the information technology sector.
Effective 2/1/06, Mike Lu is no longer the portfolio manager of Janus Global Technology Fund. Brad Slingerlend and Barney Wilson are now leading the Janus Technology Team in selecting investments for the Fund.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,190.10 | $ | 5.81 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.49 | $ | 5.36 |
*Expenses are equal to the annualized expense ratio of 1.07%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
68 Janus Growth Funds April 30, 2006
Janus Global Technology Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Common Stock - 96.8% | |||||||||||
Applications Software - 5.5% | |||||||||||
285,885 | Citrix Systems, Inc.* | $ | 11,412,529 | ||||||||
187,877 | Infosys Technologies, Ltd. | 13,137,372 | |||||||||
845,450 | Microsoft Corp. | 20,417,618 | |||||||||
843,085 | Quest Software, Inc.* | 14,509,493 | |||||||||
59,477,012 | |||||||||||
Audio and Video Products - 1.3% | |||||||||||
276,300 | Sony Corp.** | 13,879,910 | |||||||||
Chemicals - Diversified - 0.6% | |||||||||||
108,600 | Shin-Etsu Chemical Company, Ltd.** | 6,275,748 | |||||||||
Commercial Services - Finance - 1.3% | |||||||||||
343,235 | Paychex, Inc. | 13,863,262 | |||||||||
Computer Services - 1.2% | |||||||||||
517,490 | Ceridian Corp.* | 12,538,783 | |||||||||
Computers - 3.8% | |||||||||||
209,355 | Apple Computer, Inc.* | 14,736,498 | |||||||||
410,465 | Dell, Inc.* | 10,754,183 | |||||||||
205,105 | Research In Motion, Ltd. (U.S. Shares)* | 15,717,197 | |||||||||
41,207,878 | |||||||||||
Computers - Memory Devices - 4.3% | |||||||||||
1,996,425 | EMC Corp.* | 26,971,702 | |||||||||
303,405 | SanDisk Corp.* | 19,366,341 | |||||||||
46,338,043 | |||||||||||
Computers - Peripheral Equipment - 1.2% | |||||||||||
322,018 | Logitech International S.A.* | 13,371,978 | |||||||||
Data Processing and Management - 0.9% | |||||||||||
231,270 | NAVTEQ Corp.* | 9,602,330 | |||||||||
E-Commerce/Products - 2.6% | |||||||||||
325,608 | Amazon.com, Inc.*,# | 11,464,658 | |||||||||
592,030 | Submarino S.A.* | 16,027,645 | |||||||||
27,492,303 | |||||||||||
E-Commerce/Services - 1.0% | |||||||||||
315,505 | eBay, Inc.* | 10,856,527 | |||||||||
Electric Products - Miscellaneous - 1.3% | |||||||||||
2,238,000 | Toshiba Corp.** | 14,249,769 | |||||||||
Electronic Components - Miscellaneous - 2.5% | |||||||||||
2,125,026 | Hon Hai Precision Industry Company, Ltd.** | 14,419,487 | |||||||||
367,912 | Koninklijke (Royal) Philips Electronics N.V.** | 12,694,783 | |||||||||
27,114,270 | |||||||||||
Electronic Components - Semiconductors - 17.1% | |||||||||||
1,060,245 | Advanced Micro Devices, Inc.* | 34,298,926 | |||||||||
10,164,115 | ARM Holdings PLC** | 25,207,331 | |||||||||
338,540 | International Rectifier Corp.*,# | 15,302,008 | |||||||||
1,141,490 | LSI Logic Corp.* | 12,156,869 | |||||||||
410,610 | Microsemi Corp.*,# | 11,217,865 | |||||||||
924,658 | MIPS Technologies, Inc.* | 6,851,716 | |||||||||
38,600 | Samsung Electronics Company, Ltd.** | 26,355,386 | |||||||||
406,976 | Silicon-On-Insulator Technologies (SOITEC)*,**,# | 13,282,788 | |||||||||
314,420 | SiRF Technology Holdings, Inc.*,# | 10,737,443 | |||||||||
833,715 | Texas Instruments, Inc. | 28,938,248 | |||||||||
184,348,580 | |||||||||||
Electronic Forms - 2.1% | |||||||||||
568,245 | Adobe Systems, Inc.* | 22,275,204 |
Shares or Principal Amount | Value | ||||||||||
Electronic Measuring Instruments - 0.7% | |||||||||||
166,585 | Trimble Navigation, Ltd.* | $ | 7,892,797 | ||||||||
Energy - Alternate Sources - 2.5% | |||||||||||
780,900 | Suntech Power Holdings Company, Ltd. (ADR)* | 26,777,061 | |||||||||
Enterprise Software/Services - 5.3% | |||||||||||
481,410 | CA, Inc.# | 12,208,558 | |||||||||
2,146,740 | Oracle Corp.* | 31,320,936 | |||||||||
63,967 | SAP A.G.** | 13,993,588 | |||||||||
57,523,082 | |||||||||||
Entertainment Software - 2.8% | |||||||||||
1,026,980 | Activision, Inc.* | 14,572,846 | |||||||||
282,055 | Electronic Arts, Inc.* | 16,020,724 | |||||||||
30,593,570 | |||||||||||
Internet Connectivity Services - 1.4% | |||||||||||
288,911 | NDS Group PLC (ADR)*,** | 14,561,114 | |||||||||
Internet Infrastructure Software - 1.7% | |||||||||||
180,625 | Akamai Technologies, Inc.*,# | 6,085,256 | |||||||||
1,386,990 | TIBCO Software, Inc.*,# | 11,955,854 | |||||||||
18,041,110 | |||||||||||
Internet Security - 2.3% | |||||||||||
562,875 | Check Point Software Technologies, Ltd. (U.S. Shares)* | 10,891,631 | |||||||||
550,755 | McAfee, Inc.* | 14,369,198 | |||||||||
25,260,829 | |||||||||||
Medical - Drugs - 1.2% | |||||||||||
568,024 | Cubist Pharmaceuticals, Inc.* | 12,877,104 | |||||||||
Networking Products - 3.8% | |||||||||||
656,249 | Cisco Systems, Inc.* | 13,748,417 | |||||||||
1,467,360 | Juniper Networks, Inc.* | 27,116,812 | |||||||||
40,865,229 | |||||||||||
Semiconductor Components/Integrated Circuits - 7.2% | |||||||||||
530,134 | Actions Semiconductor Company, Ltd. (ADR)*,# | 5,269,532 | |||||||||
10,378,000 | Advanced Semiconductor Manufacturing Corp.* | 2,583,357 | |||||||||
1,518,470 | Cypress Semiconductor Corp.*,# | 26,056,946 | |||||||||
205,145 | Marvell Technology Group, Ltd.* | 11,711,728 | |||||||||
497,355 | Maxim Integrated Products, Inc. | 17,536,737 | |||||||||
6,801,646 | Taiwan Semiconductor Manufacturing Company, Ltd.** | 14,517,398 | |||||||||
77,675,698 | |||||||||||
Semiconductor Equipment - 3.4% | |||||||||||
1,151,475 | ASM Lithography Holding N.V. (U.S. Shares)*,**,# | 24,353,696 | |||||||||
244,610 | KLA-Tencor Corp. | 11,780,418 | |||||||||
36,134,114 | |||||||||||
Telecommunication Equipment - 1.1% | |||||||||||
987,019 | Arris Group, Inc.*,# | 11,696,175 | |||||||||
Telecommunication Services - 4.3% | |||||||||||
829,690 | Amdocs, Ltd. (U.S. Shares)*,** | 30,864,468 | |||||||||
433,665 | NeuStar, Inc. - Class A* | 15,221,642 | |||||||||
46,086,110 |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2006 69
Janus Global Technology Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Television - 1.2% | |||||||||||
1,340,443 | British Sky Broadcasting Group PLC** | $ | 12,845,158 | ||||||||
Web Hosting/Design - 0.6% | |||||||||||
96,580 | Equinix, Inc.* | 6,364,622 | |||||||||
Web Portals/Internet Service Providers - 5.3% | |||||||||||
38,140 | Google, Inc. - Class A* | 15,940,232 | |||||||||
1,261,728 | Yahoo!, Inc.* | 41,359,443 | |||||||||
57,299,675 | |||||||||||
Wireless Equipment - 5.3% | |||||||||||
642,870 | Nokia Oyj (ADR)** | 14,567,434 | |||||||||
568,190 | QUALCOMM, Inc. | 29,170,875 | |||||||||
370,890 | Telefonaktiebolaget LM Ericsson (ADR)# | 13,155,468 | |||||||||
56,893,777 | |||||||||||
Total Common Stock (cost $778,455,685) | 1,042,278,822 | ||||||||||
Corporate Bonds - 0% | |||||||||||
$ | 31,700,000 | Candescent Technologies Corp., 8.00% convertible senior subordinated debentures due 5/1/03 (144A) (cost $4,368,283) ‡,¥,ºº,§ | 0 | ||||||||
Preferred Stock - 0.5% | |||||||||||
Wireless Equipment - 0.5% | |||||||||||
102,750 | Crown Castle International Corp. convertible, 6.25% (cost $5,137,500) | 5,651,250 | |||||||||
Other Securities - 7.1% | |||||||||||
76,982,279 | State Street Navigator Securities Lending Prime Portfolio† (cost $76,982,279) | 76,982,279 | |||||||||
Time Deposit - 4.6% | |||||||||||
$ | 49,800,000 | ING Financial, ETD, 4.86%, 5/1/06 (cost $49,800,000) | 49,800,000 | ||||||||
Total Investments (total cost $914,743,747) – 109.0% | 1,174,712,351 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (9.0)% | (96,805,525 | ) | |||||||||
Net Assets – 100% | $ | 1,077,906,826 |
Summary of Investments by Country
Country | Value | % of Investments Securities | |||||||||
Bermuda | $ | 11,711,728 | 1.0 | % | |||||||
Brazil | 16,027,645 | 1.4 | % | ||||||||
Canada | 15,717,197 | 1.3 | % | ||||||||
Cayman Islands | 32,046,593 | 2.7 | % | ||||||||
China | 2,583,357 | 0.2 | % | ||||||||
Finland | 14,567,434 | 1.2 | % | ||||||||
France | 13,282,788 | 1.1 | % | ||||||||
Germany | 13,993,588 | 1.2 | % | ||||||||
India | 13,137,372 | 1.1 | % | ||||||||
Israel | 10,891,631 | 0.9 | % | ||||||||
Japan | 34,405,427 | 2.9 | % | ||||||||
Netherlands | 37,048,479 | 3.2 | % | ||||||||
South Korea | 26,355,386 | 2.2 | % | ||||||||
Sweden | 13,155,468 | 1.1 | % | ||||||||
Switzerland | 13,371,978 | 1.1 | % | ||||||||
Taiwan | 28,936,885 | 2.5 | % | ||||||||
United Kingdom | 83,478,071 | 7.2 | % | ||||||||
United States†† | 794,001,324 | 67.7 | % | ||||||||
Total | $ | 1,174,712,351 | 100.0 | % |
†† Includes Short-Term Securities and Other Securities (56.8% excluding Short-Term Securities and Other Securities)
Forward Currency Contracts, Open
Currency Sold and Settlement Date | Currency Units Sold | Currency Value in $ U.S. | Unrealized Gain/(Loss) | ||||||||||||
British Pound 10/19/06 | 7,735,000 | $ | 14,140,942 | $ | (294,441 | ) | |||||||||
Euro 6/28/06 | 13,500,000 | 17,095,931 | (527,230 | ) | |||||||||||
Japanese Yen 6/28/06 | 924,000,000 | 8,187,333 | 31,845 | ||||||||||||
South Korean Won 10/19/06 | 6,200,000,000 | 6,614,886 | (34,891 | ) | |||||||||||
Taiwan Dollar 10/19/06 | 213,000,000 | 6,824,225 | (56,950 | ) | |||||||||||
Total | $ | 52,863,317 | $ | (881,667 | ) |
See Notes to Schedules of Investments and Financial Statements.
70 Janus Growth Funds April 30, 2006
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Janus Growth Funds April 30, 2006 71
Statements of Assets and Liabilities
As of April 30, 2006 (unaudited) (all numbers in thousands except net asset value per share) | Janus Fund | Janus Enterprise Fund | Janus Mercury Fund | Janus Olympus Fund | Janus Orion Fund | ||||||||||||||||||
Assets: | |||||||||||||||||||||||
Investments at cost(1) | $ | 9,970,199 | $ | 1,471,744 | $ | 3,982,370 | $ | 2,192,514 | $ | 1,075,813 | |||||||||||||
Investments at value(1) | $ | 12,113,654 | $ | 2,123,957 | $ | 4,399,978 | $ | 2,720,171 | $ | 1,338,109 | |||||||||||||
Cash | 16,950 | 1,198 | 1,019 | 1,090 | 1,354 | ||||||||||||||||||
Cash denominated in foreign currency(2) | 2,190 | 50 | 217 | 587 | – | ||||||||||||||||||
Deposits with broker for short sales | – | – | – | – | – | ||||||||||||||||||
Receivables: | |||||||||||||||||||||||
Investments sold | 261,846 | – | 71,439 | 29,746 | – | ||||||||||||||||||
Fund shares sold | 2,226 | 930 | 795 | 1,106 | 1,828 | ||||||||||||||||||
Dividends | 12,367 | 744 | 2,891 | 1,756 | 84 | ||||||||||||||||||
Interest | 985 | 33 | 84 | 81 | 56 | ||||||||||||||||||
Other assets | 200 | 10 | 24 | 16 | 5 | ||||||||||||||||||
Forward currency contracts | – | – | – | – | – | ||||||||||||||||||
Total Assets | 12,410,418 | 2,126,922 | 4,476,447 | 2,754,553 | 1,341,436 | ||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Payables: | |||||||||||||||||||||||
Short sales, at value(3) | – | – | – | – | – | ||||||||||||||||||
Due to custodian | – | – | – | – | – | ||||||||||||||||||
Collateral for securities loaned (Note 1) | 522,863 | 229,175 | 394,235 | 316,899 | 250,086 | ||||||||||||||||||
Investments purchased | 199,533 | 12,588 | 20,541 | 14,072 | 6,823 | ||||||||||||||||||
Fund shares repurchased | 45,845 | 1,330 | 3,045 | 1,445 | 476 | ||||||||||||||||||
Dividends and distributions | – | – | – | – | – | ||||||||||||||||||
Advisory fees | 6,140 | 993 | 2,145 | 1,274 | 550 | ||||||||||||||||||
Transfer agent fees and expenses | 2,183 | 437 | 974 | 553 | 212 | ||||||||||||||||||
Non-interested Trustees' fees and expenses | 1 | 2 | 4 | 2 | 1 | ||||||||||||||||||
Foreign tax liability | 666 | – | 3,620 | 27 | 949 | ||||||||||||||||||
Accrued expenses | 1,588 | 300 | 716 | 351 | 112 | ||||||||||||||||||
Forward currency contracts | 6,216 | – | 3,837 | 1,896 | – | ||||||||||||||||||
Total Liabilities | 785,035 | 244,825 | 429,117 | 336,519 | 259,209 | ||||||||||||||||||
Net Assets | $ | 11,625,383 | $ | 1,882,097 | $ | 4,047,330 | $ | 2,418,034 | $ | 1,082,227 | |||||||||||||
Net Assets Consist of: | |||||||||||||||||||||||
Capital (par value and paid in surplus)* | $ | 15,163,970 | $ | 5,462,489 | $ | 8,760,686 | $ | 3,418,918 | $ | 1,324,824 | |||||||||||||
Undistributed net investment income/(loss)* | 21,559 | (1,134 | ) | 3,927 | 124 | 2,579 | |||||||||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | (5,696,955 | ) | (4,231,473 | ) | (5,127,467 | ) | (1,526,781 | ) | (506,526 | ) | |||||||||||||
Unrealized appreciation/(depreciation) of investments and foreign currency translations | 2,136,809 | (4) | 652,215 | 410,184 | (4) | 525,773 | (4) | 261,350 | (4) | ||||||||||||||
Total Net Assets | $ | 11,625,383 | $ | 1,882,097 | $ | 4,047,330 | $ | 2,418,034 | $ | 1,082,227 | |||||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 430,725 | 41,709 | 169,382 | 70,953 | 114,120 | ||||||||||||||||||
Net Asset Value Per Share | $ | 26.99 | $ | 45.12 | $ | 23.89 | $ | 34.08 | $ | 9.48 |
As of April 30, 2006 (unaudited) (all numbers in thousands except net asset value per share) | Janus Triton Fund | Janus Twenty Fund | Janus Venture Fund | Janus Global Life Sciences Fund | Janus Global Technology Fund | ||||||||||||||||||
Assets: | |||||||||||||||||||||||
Investments at cost(1) | $ | 151,471 | $ | 7,314,654 | $ | 1,375,566 | $ | 1,045,572 | $ | 914,744 | |||||||||||||
Investments at value(1) | $ | 165,422 | $ | 9,994,230 | $ | 1,842,487 | $ | 1,282,052 | $ | 1,174,712 | |||||||||||||
Cash | 156 | 1,375 | – | – | 1,581 | ||||||||||||||||||
Cash denominated in foreign currency(2) | 298 | – | 53 | – | 151 | ||||||||||||||||||
Deposits with broker for short sales | – | – | – | 8,354 | – | ||||||||||||||||||
Receivables: | |||||||||||||||||||||||
Investments sold | 3,320 | 230,835 | 32,621 | 14,400 | 464 | ||||||||||||||||||
Fund shares sold | 1,003 | 2,670 | 184 | 168 | 196 | ||||||||||||||||||
Dividends | 50 | 4,845 | 101 | 175 | 583 | ||||||||||||||||||
Interest | 8 | 3,906 | 95 | 39 | 66 | ||||||||||||||||||
Other assets | – | 96 | 27 | 14 | 15 | ||||||||||||||||||
Forward currency contracts | – | – | – | – | 32 | ||||||||||||||||||
Total Assets | 170,257 | 10,237,957 | 1,875,568 | 1,305,202 | 1,177,800 | ||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Payables: | |||||||||||||||||||||||
Short sales, at value(3) | – | – | – | 8,597 | (3) | – | |||||||||||||||||
Due to custodian | – | – | 10,938 | 1,390 | – | ||||||||||||||||||
Collateral for securities loaned (Note 1) | – | 355,132 | 364,896 | 174,003 | 76,982 | ||||||||||||||||||
Investments purchased | 4,436 | 113,023 | 22,452 | 5,244 | 20,005 | ||||||||||||||||||
Fund shares repurchased | 196 | 6,338 | 455 | 1,438 | 857 | ||||||||||||||||||
Dividends and distributions | – | – | – | – | – | ||||||||||||||||||
Advisory fees | 81 | 5,040 | 771 | 601 | 570 | ||||||||||||||||||
Transfer agent fees and expenses | 29 | 1,650 | 235 | 270 | 271 | ||||||||||||||||||
Non-interested Trustees' fees and expenses | – | 3 | 3 | 3 | 3 | ||||||||||||||||||
Foreign tax liability | 98 | – | 487 | 99 | 59 | ||||||||||||||||||
Accrued expenses | 46 | 1,307 | 236 | 247 | 232 | ||||||||||||||||||
Forward currency contracts | – | – | – | 841 | 914 | ||||||||||||||||||
Total Liabilities | 4,886 | 482,493 | 400,473 | 192,733 | 99,893 | ||||||||||||||||||
Net Assets | $ | 165,371 | $ | 9,755,464 | $ | 1,475,095 | $ | 1,112,469 | $ | 1,077,907 | |||||||||||||
Net Assets Consist of: | |||||||||||||||||||||||
Capital (par value and paid in surplus)* | $ | 145,102 | $ | 9,273,238 | $ | 961,148 | $ | 1,702,561 | $ | 3,392,671 | |||||||||||||
Undistributed net investment income/(loss)* | 101 | 20,420 | (3,289 | ) | (2,505 | ) | (2,679 | ) | |||||||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | 6,313 | (2,218,536 | ) | 50,782 | (822,886 | ) | (2,571,128 | ) | |||||||||||||||
Unrealized appreciation/(depreciation) of investments and foreign currency translations | 13,855 | (4) | 2,680,342 | 466,454 | (4) | 235,299 | (4) | 259,043 | (4) | ||||||||||||||
Total Net Assets | $ | 165,371 | $ | 9,755,464 | $ | 1,475,095 | $ | 1,112,469 | $ | 1,077,907 | |||||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 12,049 | 190,971 | 22,346 | 55,003 | 83,312 | ||||||||||||||||||
Net Asset Value Per Share | $ | 13.73 | $ | 51.08 | $ | 66.01 | $ | 20.23 | $ | 12.94 |
* See Note 4 in Notes to Financial Statements
(1) Investments at cost and value include $505,930,469, $223,640,930, $381,881,851, $307,516,553, $243,484,769, $347,802,617, $355,947,289, $168,908,989 and $74,889,311 of securities loaned for Janus Fund, Janus Enterprise Fund, Janus Mercury Fund, Janus Olympus Fund, Janus Orion Fund, Janus Twenty Fund, Janus Venture Fund, Janus Global Life Sciences Fund and Janus Global Technology Fund, respectively (Note 1).
(2) Includes cost of $2,144,138, $49,480, $212,366, $574,272, $296,403, $53,492 and $150,818 for Janus Fund, Janus Enterprise Fund, Janus Mercury Fund, Janus Olympus Fund, Janus Triton Fund, Janus Venture Fund and Janus Global Technology Fund, respectively.
(3) Includes proceeds of $8,353,528 on short sales for Janus Global Life Sciences Fund.
(4) Net of foreign taxes on investments of $665,761, $3,619,824, $26,574, $948,727, $97,695, $486,618, $99,084 and $59,234 for Janus Fund, Janus Mercury Fund, Janus Olympus Fund, Janus Orion Fund, Janus Triton Fund, Janus Venture Fund, Janus Global Life Sciences Fund and Janus Global Technology Fund, respectively.
See Notes to Financial Statements.
72 Janus Growth Funds April 30, 2006
Janus Growth Funds April 30, 2006 73
Statements of Operations
For the six-month period ended April 30, 2006 (unaudited) (all numbers in thousands) | Janus Fund | Janus Enterprise Fund | Janus Mercury Fund | Janus Olympus Fund | Janus Orion Fund | ||||||||||||||||||
Investment Income: | |||||||||||||||||||||||
Interest | $ | 4,318 | $ | 709 | $ | 1,485 | $ | 830 | $ | 1,067 | |||||||||||||
Securities lending income | 744 | 141 | 226 | 174 | 152 | ||||||||||||||||||
Dividends | 65,810 | 6,766 | 22,910 | 10,888 | 8,862 | ||||||||||||||||||
Dividends from affiliates | 3,834 | 86 | 489 | 26 | 80 | ||||||||||||||||||
Foreign tax withheld | (1,758 | ) | (20 | ) | (600 | ) | (401 | ) | (207 | ) | |||||||||||||
Total Investment Income | 72,948 | 7,682 | 24,510 | 11,517 | 9,954 | ||||||||||||||||||
Expenses: | |||||||||||||||||||||||
Advisory fees | 36,533 | 5,845 | 13,926 | 7,578 | 2,851 | ||||||||||||||||||
Transfer agent fees and expenses | 12,447 | 2,388 | 5,484 | 3,131 | 1,138 | ||||||||||||||||||
Registration fees | 140 | 21 | 34 | 10 | 19 | ||||||||||||||||||
Postage and mailing expenses | 298 | 126 | 238 | 182 | 50 | ||||||||||||||||||
Custodian fees | 125 | 13 | 63 | 50 | 52 | ||||||||||||||||||
Professional fees | 32 | 17 | 20 | 16 | 17 | ||||||||||||||||||
Non-interested Trustees' fees and expenses | 149 | 29 | 67 | 40 | 15 | ||||||||||||||||||
Printing expenses | 353 | 147 | 260 | 241 | 51 | ||||||||||||||||||
Other expenses | 1,765 | 322 | 766 | 339 | 160 | ||||||||||||||||||
Non-recurring costs (Note 2) | – | – | – | – | – | ||||||||||||||||||
Costs assumed by Janus Capital Management LLC (Note 2) | – | – | – | – | – | ||||||||||||||||||
Total Expenses | 51,842 | 8,908 | 20,858 | 11,587 | 4,353 | ||||||||||||||||||
Expense and Fee Offset | (420 | ) | (92 | ) | (275 | ) | (127 | ) | (50 | ) | |||||||||||||
Net Expenses | 51,422 | 8,816 | 20,583 | 11,460 | 4,303 | ||||||||||||||||||
Net Investment Income/(Loss) | 21,526 | (1,134 | ) | 3,927 | 57 | 5,651 | |||||||||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | |||||||||||||||||||||||
Net realized gain/(loss) from securities transactions | 1,020,240 | 133,446 | 1,050,667 | 162,790 | 42,057 | ||||||||||||||||||
Net realized gain/(loss) from foreign currency transactions | 4,290 | (1 | ) | (1,745 | ) | (424 | ) | (75 | )(1) | ||||||||||||||
Net realized gain/(loss) from short sales | – | – | – | – | – | ||||||||||||||||||
Net realized gain/(loss) from option contracts | – | – | – | – | – | ||||||||||||||||||
Change in net unrealized appreciation or depreciation of investments and foreign currency translations | 102,385 | (2) | 108,675 | (683,433 | )(2) | 63,601 | (2) | 129,409 | (2) | ||||||||||||||
Payment from affiliate (Note 2) | 47 | – | – | 1 | – | ||||||||||||||||||
Net Gain/(Loss) on Investments | 1,126,962 | 242,120 | 365,489 | 225,968 | 171,391 | ||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 1,148,488 | $ | 240,986 | $ | 369,416 | $ | 226,025 | $ | 177,042 |
For the six-month period ended April 30, 2006 (unaudited) (all numbers in thousands) | Janus Triton Fund | Janus Twenty Fund | Janus Venture Fund | Janus Global Life Sciences Fund | Janus Global Technology Fund | ||||||||||||||||||
Investment Income: | |||||||||||||||||||||||
Interest | $ | 324 | $ | 9,989 | $ | 12 | $ | 146 | $ | 580 | |||||||||||||
Securities lending income | – | 105 | 485 | 166 | 136 | ||||||||||||||||||
Dividends | 392 | 41,107 | 2,300 | 3,021 | 2,337 | ||||||||||||||||||
Dividends from affiliates | – | 12,852 | 96 | – | – | ||||||||||||||||||
Foreign tax withheld | (6 | ) | (1,223 | ) | (21 | ) | (149 | ) | (170 | ) | |||||||||||||
Total Investment Income | 710 | 62,830 | 2,872 | 3,184 | 2,883 | ||||||||||||||||||
Expenses: | |||||||||||||||||||||||
Advisory fees | 290 | 30,877 | 4,415 | 3,732 | 3,406 | ||||||||||||||||||
Transfer agent fees and expenses | 110 | 9,615 | 1,322 | 1,544 | 1,626 | ||||||||||||||||||
Registration fees | 23 | 25 | 11 | 14 | 18 | ||||||||||||||||||
Postage and mailing expenses | 3 | 280 | 62 | 56 | 131 | ||||||||||||||||||
Custodian fees | 16 | 102 | 103 | 35 | 71 | ||||||||||||||||||
Professional fees | 18 | 21 | 18 | 18 | 28 | ||||||||||||||||||
Non-interested Trustees' fees and expenses | 3 | 132 | 29 | 26 | 23 | ||||||||||||||||||
Printing expenses | 8 | 354 | 84 | 96 | 131 | ||||||||||||||||||
Other expenses | 19 | 1,443 | 238 | 230 | 233 | ||||||||||||||||||
Non-recurring costs (Note 2) | – | – | – | – | – | ||||||||||||||||||
Costs assumed by Janus Capital Management LLC (Note 2) | – | – | – | – | – | ||||||||||||||||||
Total Expenses | 490 | 42,849 | 6,282 | 5,751 | 5,667 | ||||||||||||||||||
Expense and Fee Offset | (6 | ) | (292 | ) | (46 | ) | (62 | ) | (99 | ) | |||||||||||||
Net Expenses | 484 | 42,557 | 6,236 | 5,689 | 5,568 | ||||||||||||||||||
Net Investment Income/(Loss) | 226 | 20,273 | (3,364 | ) | (2,505 | ) | (2,685 | ) | |||||||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | |||||||||||||||||||||||
Net realized gain/(loss) from securities transactions | 6,534 | 1,073,122 | 114,121 | 101,400 | 209,720 | ||||||||||||||||||
Net realized gain/(loss) from foreign currency transactions | (50 | )(1) | (108 | ) | 57 | 1,420 | (1) | (78 | )(1) | ||||||||||||||
Net realized gain/(loss) from short sales | – | – | – | 15 | – | ||||||||||||||||||
Net realized gain/(loss) from option contracts | – | – | – | 37 | – | ||||||||||||||||||
Change in net unrealized appreciation or depreciation of investments and foreign currency translations | 11,694 | (2) | (388,964 | ) | 165,631 | (2) | (48,739 | )(2) | (24,328 | )(2) | |||||||||||||
Payment from affiliate (Note 2) | – | 17 | – | – | 4 | ||||||||||||||||||
Net Gain/(Loss) on Investments | 18,178 | 684,067 | 279,809 | 54,133 | 185,318 | ||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 18,404 | $ | 704,340 | $ | 276,445 | $ | 51,628 | $ | 182,633 |
(1) Net of foreign taxes on investments of $8,190, $13,096, $883 and $3,591 for Janus Orion Fund, Janus Triton Fund, Janus Global Life Sciences Fund and Janus Global Technology Fund, respectively.
(2) Net of foreign taxes on investments of $665,761, $3,619,824, $26,574, $948,727, $97,695, $486,618, $99,084 and $59,234 for Janus Fund, Janus Mercury Fund, Janus Olympus Fund, Janus Orion Fund, Janus Triton Fund, Janus Venture Fund, Janus Global Life Sciences Fund and Janus Global Technology Fund, respectively.
See Notes to Financial Statements.
74 Janus Growth Funds April 30, 2006
Janus Growth Funds April 30, 2006 75
Statements of Changes in Net Assets
For the six-month period ended April 30, 2006 (unaudited) and the fiscal year ended October 31, 2005 (all numbers in thousands) | Janus Fund | Janus Enterprise Fund | Janus Mercury Fund | ||||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2006 | 2005 | ||||||||||||||||||||||
Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | $ | 21,526 | $ | 8,063 | $ | (1,134 | ) | $ | (5,103 | ) | $ | 3,927 | $ | 18,801 | |||||||||||||
Net realized gain/(loss) from investment transactions | 1,024,530 | 2,416,218 | 133,445 | 178,530 | 1,048,922 | 411,889 | |||||||||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments and foreign currency translations | 102,385 | (1,439,602 | ) | 108,675 | 97,620 | (683,433 | ) | 146,894 | |||||||||||||||||||
Payment from affiliate (Note 2) | 47 | 1 | – | – | – | – | |||||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 1,148,488 | 984,680 | 240,986 | 271,047 | 369,416 | 577,584 | |||||||||||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||||||||||
Net investment income* | (7,997 | ) | – | – | – | (12,423 | ) | (6,427 | ) | ||||||||||||||||||
Net realized gain/(loss) from investment transactions* | – | – | – | – | – | – | |||||||||||||||||||||
Net Decrease from Dividends and Distributions | (7,997 | ) | – | – | – | (12,423 | ) | (6,427 | ) | ||||||||||||||||||
Capital Share Transactions: | |||||||||||||||||||||||||||
Shares sold | 835,253 | 378,642 | 149,492 | 228,604 | 192,578 | 703,654 | |||||||||||||||||||||
Reinvested dividends and distributions | 7,772 | – | – | – | 11,886 | 6,103 | |||||||||||||||||||||
Shares repurchased | (1,501,054 | ) | (3,497,874 | ) | (211,923 | ) | (476,067 | ) | (987,558 | ) | (1,278,997 | ) | |||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | (658,029 | ) | (3,119,232 | ) | (62,431 | ) | (247,463 | ) | (783,094 | ) | (569,240 | ) | |||||||||||||||
Net Increase/(Decrease) in Net Assets | 482,462 | (2,134,552 | ) | 178,555 | 23,584 | (426,101 | ) | 1,917 | |||||||||||||||||||
Net Assets: | |||||||||||||||||||||||||||
Beginning of period | 11,142,921 | 13,277,473 | 1,703,542 | 1,679,958 | 4,473,431 | 4,471,514 | |||||||||||||||||||||
End of period | $ | 11,625,383 | $ | 11,142,921 | $ | 1,882,097 | $ | 1,703,542 | $ | 4,047,330 | $ | 4,473,431 | |||||||||||||||
Undistributed net investment income/(loss)* | $ | 21,559 | $ | 8,030 | $ | (1,134 | ) | $ | – | $ | 3,927 | $ | 12,423 |
For the six-month period ended April 30, 2006 (unaudited) and the fiscal year ended October 31, 2005 (all numbers in thousands) | Janus Olympus Fund | Janus Orion Fund | |||||||||||||||||
2006 | 2005 | 2006 | 2005 | ||||||||||||||||
Operations: | |||||||||||||||||||
Net investment income/(loss) | $ | 57 | $ | 762 | $ | 5,651 | $ | 3,091 | |||||||||||
Net realized gain/(loss) from investment transactions | 162,366 | 302,052 | 41,982 | 67,290 | |||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments and foreign currency translations | 63,601 | 72,243 | 129,409 | 56,341 | |||||||||||||||
Payment from affiliate (Note 2) | 1 | 1 | – | – | |||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 226,025 | 375,058 | 177,042 | 126,722 | |||||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||
Net investment income* | (637 | ) | – | (6,052 | ) | – | |||||||||||||
Net realized gain/(loss) from investment transactions* | – | – | – | – | |||||||||||||||
Net Decrease from Dividends and Distributions | (637 | ) | – | (6,052 | ) | – | |||||||||||||
Capital Share Transactions: | |||||||||||||||||||
Shares sold | 135,323 | 94,217 | 308,061 | 167,198 | |||||||||||||||
Reinvested dividends and distributions | 624 | – | 5,942 | – | |||||||||||||||
Shares repurchased | (200,189 | ) | (572,853 | ) | (94,167 | ) | (132,323 | ) | |||||||||||
Net Increase/(Decrease) from Capital Share Transactions | (64,242 | ) | (478,636 | ) | 219,836 | 34,875 | |||||||||||||
Net Increase/(Decrease) in Net Assets | 161,146 | (103,578 | ) | 390,826 | 161,597 | ||||||||||||||
Net Assets: | |||||||||||||||||||
Beginning of period | 2,256,888 | 2,360,466 | 691,401 | 529,804 | |||||||||||||||
End of period | $ | 2,418,034 | $ | 2,256,888 | $ | 1,082,227 | $ | 691,401 | |||||||||||
Undistributed net investment income/(loss)* | $ | 124 | $ | 705 | $ | 2,579 | $ | 2,980 |
* See Note 4 in Notes to Financial Statements.
See Notes to Financial Statements.
76 Janus Growth Funds April 30, 2006
Janus Growth Funds April 30, 2006 77
Statements of Changes in Net Assets (continued)
For the six-month period ended April 30, 2006 (unaudited) and for the fiscal year or period ended October 31, 2005 (all numbers in thousands) | Janus Triton Fund | Janus Twenty Fund | Janus Venture Fund | ||||||||||||||||||||||||
2006 | 2005(1) | 2006 | 2005 | 2006 | 2005 | ||||||||||||||||||||||
Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | $ | 226 | $ | (43 | ) | $ | 20,273 | $ | 20,063 | $ | (3,364 | ) | $ | (8,736 | ) | ||||||||||||
Net realized gain/(loss) from investment transactions | 6,484 | (40 | ) | 1,073,014 | 1,469,039 | 114,178 | 117,762 | ||||||||||||||||||||
Net realized gain/(loss) from short sales | – | – | – | – | – | – | |||||||||||||||||||||
Net realized gain/(loss) from option contracts | – | – | – | – | – | – | |||||||||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments and foreign currency translations | 11,694 | 2,161 | (388,964 | ) | 254,049 | 165,631 | 25,372 | ||||||||||||||||||||
Payment from affiliate (Note 2) | – | – | 17 | 7 | – | – | |||||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 18,404 | 2,078 | 704,340 | 1,743,158 | 276,445 | 134,398 | |||||||||||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||||||||||
Net investment income* | (125 | ) | – | (20,136 | ) | (2,651 | ) | – | – | ||||||||||||||||||
Net realized gain/(loss) from investment transactions* | (88 | ) | – | – | – | (65,399 | ) | – | |||||||||||||||||||
Net Decrease from Dividends and Distributions | (213 | ) | – | (20,136 | ) | (2,651 | ) | (65,399 | ) | – | |||||||||||||||||
Capital Share Transactions: | |||||||||||||||||||||||||||
Shares sold | 123,872 | 45,861 | 232,842 | 542,721 | 17,012 | 36,715 | |||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||
Reinvested dividends and distributions | 209 | – | 19,712 | 2,597 | 62,815 | – | |||||||||||||||||||||
Shares repurchased | (14,596 | ) | (10,244 | ) | (793,797 | ) | (1,696,801 | ) | (108,928 | ) | (205,051 | ) | |||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | 109,485 | 35,617 | (541,243 | ) | (1,151,483 | ) | (29,101 | ) | (168,336 | ) | |||||||||||||||||
Net Increase/(Decrease) in Net Assets | 127,676 | 37,695 | 142,961 | 589,024 | 181,945 | (33,938 | ) | ||||||||||||||||||||
Net Assets: | |||||||||||||||||||||||||||
Beginning of period | 37,695 | – | 9,612,503 | 9,023,479 | 1,293,150 | 1,327,088 | |||||||||||||||||||||
End of Period | $ | 165,371 | $ | 37,695 | $ | 9,755,464 | $ | 9,612,503 | $ | 1,475,095 | $ | 1,293,150 | |||||||||||||||
Undistributed net investment income/(loss)* | $ | 101 | $ | – | $ | 20,420 | $ | 20,284 | $ | (3,289 | ) | $ | 75 |
For the six-month period ended April 30, 2006 (unaudited) and for the fiscal year or period ended October 31, 2005 (all numbers in thousands) | Janus Global Life Sciences Fund | Janus Global Technology Fund | |||||||||||||||||
2006 | 2005 | 2006 | 2005 | ||||||||||||||||
Operations: | |||||||||||||||||||
Net investment income/(loss) | $ | (2,505 | ) | $ | (5,782 | ) | $ | (2,685 | ) | $ | 758 | ||||||||
Net realized gain/(loss) from investment transactions | 102,820 | 175,006 | 209,642 | 99,671 | |||||||||||||||
Net realized gain/(loss) from short sales | 15 | – | – | – | |||||||||||||||
Net realized gain/(loss) from option contracts | 37 | – | – | – | |||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments and foreign currency translations | (48,739 | ) | 51,675 | (24,328 | ) | 33,644 | |||||||||||||
Payment from affiliate (Note 2) | – | – | 4 | – | |||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 51,628 | 220,899 | 182,633 | 134,073 | |||||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||
Net investment income* | – | – | (719 | ) | – | ||||||||||||||
Net realized gain/(loss) from investment transactions* | – | – | – | – | |||||||||||||||
Net Decrease from Dividends and Distributions | – | – | (719 | ) | – | ||||||||||||||
Capital Share Transactions: | |||||||||||||||||||
Shares sold | 42,048 | 51,664 | 40,983 | 46,171 | |||||||||||||||
Redemption fees | 35 | 35 | 54 | 80 | |||||||||||||||
Reinvested dividends and distributions | – | – | 703 | – | |||||||||||||||
Shares repurchased | (130,908 | ) | (306,428 | ) | (139,410 | ) | (441,684 | ) | |||||||||||
Net Increase/(Decrease) from Capital Share Transactions | (88,825 | ) | (254,729 | ) | (97,670 | ) | (395,433 | ) | |||||||||||
Net Increase/(Decrease) in Net Assets | (37,197 | ) | (33,830 | ) | 84,244 | (261,360 | ) | ||||||||||||
Net Assets: | |||||||||||||||||||
Beginning of period | 1,149,666 | 1,183,496 | 993,663 | 1,255,023 | |||||||||||||||
End of Period | $ | 1,112,469 | $ | 1,149,666 | $ | 1,077,907 | $ | 993,663 | |||||||||||
Undistributed net investment income/(loss)* | $ | (2,505 | ) | $ | – | $ | (2,679 | ) | $ | 725 |
* See Note 4 in Notes to Financial Statements.
(1) Period from February 25, 2005 (inception date) through October 31, 2005.
See Notes to Financial Statements.
78 Janus Growth Funds April 30, 2006
Janus Growth Funds April 30, 2006 79
Financial Highlights
Janus Fund | |||||||||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 24.44 | $ | 22.69 | $ | 22.52 | $ | 18.39 | $ | 22.11 | $ | 44.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .05 | .02 | – | (1) | – | (1) | – | (1) | – | (1) | |||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 2.52 | 1.73 | .17 | 4.13 | (3.72 | ) | (17.50 | ) | |||||||||||||||||||
Total from Investment Operations | 2.57 | 1.75 | .17 | 4.13 | (3.72 | ) | (17.50 | ) | |||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.02 | ) | – | – | – | – | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | (4.39 | ) | ||||||||||||||||||||
Payment from affiliate | – | (2) | – | (2) | – | (2) | – | – | – | ||||||||||||||||||
Total Distributions and Other | (.02 | ) | – | – | – | – | (4.39 | ) | |||||||||||||||||||
Net Asset Value, End of Period | $ | 26.99 | $ | 24.44 | $ | 22.69 | $ | 22.52 | $ | 18.39 | $ | 22.11 | |||||||||||||||
Total Return** | 10.51 | %(3) | 7.71 | %(3) | 0.75 | %(3) | 22.46 | % | (16.82 | )% | (43.42 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 11,625,383 | $ | 11,142,921 | $ | 13,277,473 | $ | 17,426,458 | $ | 16,320,421 | $ | 23,513,436 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 11,539,726 | $ | 12,310,464 | $ | 15,433,191 | $ | 16,206,681 | $ | 21,651,285 | $ | 34,254,548 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 0.91 | % | 0.88 | % | 0.90 | % | 0.89 | % | 0.85 | % | 0.84 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 0.90 | % | 0.87 | % | 0.90 | % | 0.89 | % | 0.84 | % | 0.83 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.38 | % | 0.07 | % | (0.17 | )% | (0.17 | )% | (0.24 | )% | (0.16 | )% | |||||||||||||||
Portfolio Turnover Rate*** | 110 | % | 78 | % | 21 | % | 22 | % | 27 | % | 51 | % | |||||||||||||||
Janus Enterprise Fund | |||||||||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 39.48 | $ | 33.73 | $ | 30.02 | $ | 22.93 | $ | 29.67 | $ | 68.41 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | (.03 | ) | – | (1) | – | (1) | – | (1) | – | (1) | – | (1) | |||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 5.67 | 5.75 | 3.71 | 7.09 | (6.74 | ) | (38.74 | ) | |||||||||||||||||||
Total from Investment Operations | 5.64 | 5.75 | 3.71 | 7.09 | (6.74 | ) | (38.74 | ) | |||||||||||||||||||
Less Distributions: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | – | – | – | – | – | – | |||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | |||||||||||||||||||||
Total Distributions | – | – | – | – | – | – | |||||||||||||||||||||
Net Asset Value, End of Period | $ | 45.12 | $ | 39.48 | $ | 33.73 | $ | 30.02 | $ | 22.93 | $ | 29.67 | |||||||||||||||
Total Return** | 14.29 | % | 17.05 | % | 12.36 | % | 30.92 | % | (22.72 | )% | (56.63 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 1,882,097 | $ | 1,703,542 | $ | 1,679,958 | $ | 1,916,706 | $ | 1,854,192 | $ | 3,071,818 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 1,842,337 | $ | 1,728,579 | $ | 1,795,534 | $ | 1,741,680 | $ | 2,518,273 | $ | 4,858,360 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 0.98 | % | 0.96 | % | 1.04 | % | 1.02 | % | 0.93 | % | 0.92 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 0.97 | % | 0.95 | % | 1.03 | % | 1.02 | % | 0.90 | % | 0.90 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | (0.12 | )% | (0.30 | )% | (0.46 | )% | (0.46 | )% | (0.43 | )% | (0.55 | )% | |||||||||||||||
Portfolio Turnover Rate*** | 44 | % | 28 | % | 27 | % | 32 | % | 64 | % | 85 | % |
* 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) Net investment income/(loss) 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%.
See Notes to Financial Statements.
80 Janus Growth Funds April 30, 2006
Janus Mercury Fund | |||||||||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 22.05 | $ | 19.48 | $ | 18.14 | $ | 14.92 | $ | 19.14 | $ | 40.59 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .02 | .09 | – | (1) | – | (1) | – | (1) | .04 | ||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 1.88 | 2.51 | 1.34 | 3.22 | (4.18 | ) | (17.05 | ) | |||||||||||||||||||
Total from Investment Operations | 1.90 | 2.60 | 1.34 | 3.22 | (4.18 | ) | (17.01 | ) | |||||||||||||||||||
Less Distributions: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.06 | ) | (.03 | ) | – | – | (.04 | ) | (.03 | ) | |||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | (4.41 | ) | ||||||||||||||||||||
Total Distributions | (.06 | ) | (.03 | ) | – | – | (.04 | ) | (4.44 | ) | |||||||||||||||||
Net Asset Value, End of Period | $ | 23.89 | $ | 22.05 | $ | 19.48 | $ | 18.14 | $ | 14.92 | $ | 19.14 | |||||||||||||||
Total Return** | 8.63 | % | 13.35 | % | 7.39 | % | 21.58 | % | (21.88 | )% | (46.21 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 4,047,330 | $ | 4,473,431 | $ | 4,471,514 | $ | 5,282,164 | $ | 5,034,041 | $ | 7,910,482 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 4,391,354 | $ | 4,447,616 | $ | 5,007,156 | $ | 5,088,567 | $ | 6,783,864 | $ | 11,243,108 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 0.96 | % | 0.93 | % | 0.97 | % | 0.96 | % | 0.94 | % | 0.89 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.95 | % | 0.92 | % | 0.97 | % | 0.95 | % | 0.92 | % | 0.88 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.18 | % | 0.42 | % | (0.26 | )% | (0.31 | )% | (0.07 | )% | 0.16 | % | |||||||||||||||
Portfolio Turnover Rate*** | 186 | % | 38 | % | 43 | % | 54 | % | 97 | % | 83 | % | |||||||||||||||
Janus Olympus Fund | |||||||||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 30.96 | $ | 26.30 | $ | 25.22 | $ | 20.60 | $ | 24.59 | $ | 50.50 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | – | .01 | – | (1) | – | (1) | – | (1) | .13 | ||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 3.13 | 4.65 | 1.08 | 4.62 | (3.88 | ) | (25.42 | ) | |||||||||||||||||||
Total from Investment Operations | 3.13 | 4.66 | 1.08 | 4.62 | (3.88 | ) | (25.29 | ) | |||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.01 | ) | – | – | – | (.11 | ) | (.23 | ) | ||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | (.39 | ) | ||||||||||||||||||||
Payment from affiliate | – | (4) | – | (4) | – | (4) | – | – | – | ||||||||||||||||||
Total Distributions and Other | (.01 | ) | – | – | – | (.11 | ) | (.62 | ) | ||||||||||||||||||
Net Asset Value, End of Period | $ | 34.08 | $ | 30.96 | $ | 26.30 | $ | 25.22 | $ | 20.60 | $ | 24.59 | |||||||||||||||
Total Return** | 10.11 | %(5) | 17.72 | %(5) | 4.28 | %(5) | 22.38 | % | (15.89 | )% | (50.61 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 2,418,034 | $ | 2,256,888 | $ | 2,360,466 | $ | 2,772,209 | $ | 2,136,167 | $ | 3,074,317 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 2,388,082 | $ | 2,282,832 | $ | 2,575,897 | $ | 2,378,814 | $ | 2,882,934 | $ | 4,767,090 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 0.98 | % | 0.97 | % | 1.03 | % | 0.99 | % | 0.94 | % | 0.91 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.97 | % | 0.96 | % | 1.03 | % | 0.98 | % | 0.91 | % | 0.89 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.00 | % | 0.03 | % | (0.36 | )% | (0.14 | )% | (0.13 | )% | 0.34 | % | |||||||||||||||
Portfolio Turnover Rate*** | 98 | % | 119 | % | 76 | % | 84 | % | 90 | % | 118 | % |
*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) Net investment income/(loss) aggregated less than $.01 on a per share basis for the fiscal year ended.
(2) See "Explanations of Charts, Tables and Financial Statements."
(3) 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%.
(4) Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year or period ended.
(5) 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%.
See Notes to Financial Statements.
Janus Growth Funds April 30, 2006 81
Financial Highlights (continued)
Janus Orion Fund | |||||||||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 7.80 | $ | 6.25 | $ | 5.64 | $ | 4.33 | $ | 5.21 | $ | 8.81 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .05 | .03 | – | (1) | – | (1) | – | (1) | – | (1) | |||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 1.69 | 1.52 | .61 | 1.31 | (.88 | ) | (3.58 | ) | |||||||||||||||||||
Total from Investment Operations | 1.74 | 1.55 | .61 | 1.31 | (.88 | ) | (3.58 | ) | |||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.06 | ) | – | – | – | – | (.02 | ) | |||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | |||||||||||||||||||||
Payment from affiliate | – | – | – | (2) | – | – | – | ||||||||||||||||||||
Total Distributions and Other | (.06 | ) | – | – | – | – | (.02 | ) | |||||||||||||||||||
Net Asset Value, End of Period | $ | 9.48 | $ | 7.80 | $ | 6.25 | $ | 5.64 | $ | 4.33 | $ | 5.21 | |||||||||||||||
Total Return** | 22.45 | % | 24.80 | % | 10.82 | %(3) | 29.95 | % | (16.70 | )% | (40.69 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 1,082,227 | $ | 691,401 | $ | 529,804 | $ | 513,708 | $ | 421,458 | $ | 602,303 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 899,038 | $ | 590,421 | $ | 540,305 | $ | 431,124 | $ | 562,457 | $ | 762,142 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 0.98 | % | 1.02 | % | 1.09 | % | 1.10 | % | 1.09 | % | 1.06 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 0.97 | % | 1.01 | % | 1.08 | % | 1.08 | % | 1.04 | % | 1.03 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.27 | % | 0.52 | % | (0.05 | )% | (0.43 | )% | (0.30 | )% | (0.06 | )% | |||||||||||||||
Portfolio Turnover Rate*** | 54 | % | 68 | % | 69 | % | 72 | % | 161 | % | 206 | % |
Janus Triton Fund | |||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through the period ended October 31 | 2006 | 2005(6) | |||||||||
Net Asset Value, Beginning of Period | $ | 10.86 | $ | 10.00 | |||||||
Income from Investment Operations: | |||||||||||
Net investment income/(loss) | .04 | – | |||||||||
Net gains/(losses) on securities (both realized and unrealized) | 2.88 | .86 | |||||||||
Total from Investment Operations | 2.92 | .86 | |||||||||
Less Distributions: | |||||||||||
Dividends from net investment income* | (.03 | ) | – | ||||||||
Distributions from net realized gains* | (.02 | ) | – | ||||||||
Total Distributions | (.05 | ) | – | ||||||||
Net Asset Value, End of Period | $ | 13.73 | $ | 10.86 | |||||||
Total Return** | 26.98 | % | 8.60 | % | |||||||
Net Assets, End of Period | $ | 165,371 | $ | 37,695 | |||||||
Average Net Assets for the Period | $ | 91,310 | $ | 25,904 | |||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 1.08 | % | 1.27 | %(7) | |||||||
Ratio of Net Expenses to Average Net Assets***(4) | 1.07 | % | 1.25 | % | |||||||
Ratio of Net Invest Income to Average Net Assets*** | 0.50 | % | (0.24 | )% | |||||||
Portfolio Turnover Rate*** | 215 | % | 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) Net investment income/(loss) 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%.
(6) Period from February 25, 2005 (inception date) through October 31, 2005.
(7) The ratio was 1.85% in 2005 before waiver of certain fees incurred by the Fund.
See Notes to Financial Statements.
82 Janus Growth Funds April 30, 2006
Janus Twenty Fund | |||||||||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 47.63 | $ | 39.60 | $ | 34.06 | $ | 30.47 | $ | 36.31 | $ | 71.07 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .11 | .10 | .03 | .17 | .21 | .32 | |||||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 3.44 | 7.94 | 5.68 | 3.63 | (5.71 | ) | (33.33 | ) | |||||||||||||||||||
Total from Investment Operations | 3.55 | 8.04 | 5.71 | 3.80 | (5.50 | ) | (33.01 | ) | |||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.10 | ) | (.01 | ) | (.17 | ) | (.21 | ) | (.34 | ) | – | ||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | (1.75 | ) | ||||||||||||||||||||
Payment from affiliate | – | (1) | – | (1) | – | (1) | – | – | – | ||||||||||||||||||
Total Distributions and Other | (.10 | ) | (.01 | ) | (.17 | ) | (.21 | ) | (.34 | ) | (1.75 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 51.08 | $ | 47.63 | $ | 39.60 | $ | 34.06 | $ | 30.47 | $ | 36.31 | |||||||||||||||
Total Return** | 7.46 | %(2) | 20.31 | %(2) | 16.85 | %(2) | 12.60 | % | (15.35 | )% | (47.43 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 9,755,464 | $ | 9,612,503 | $ | 9,023,479 | $ | 9,821,492 | $ | 10,107,243 | $ | 14,378,453 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 9,820,060 | $ | 9,458,921 | $ | 9,319,532 | $ | 9,749,457 | $ | 12,572,984 | $ | 20,320,750 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.88 | % | 0.86 | % | 0.89 | % | 0.88 | % | 0.84 | % | 0.84 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.87 | % | 0.86 | % | 0.89 | % | 0.88 | % | 0.83 | % | 0.84 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.42 | % | 0.21 | % | 0.06 | % | 0.52 | % | 0.56 | % | 0.63 | % | |||||||||||||||
Portfolio Turnover Rate*** | 31 | % | 44 | % | 14 | % | 44 | % | 53 | % | 50 | % | |||||||||||||||
Janus Venture Fund | |||||||||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 56.82 | $ | 51.57 | $ | 47.77 | $ | 31.59 | $ | 36.99 | $ | 82.39 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | (.15 | ) | – | (5) | – | (5) | – | (5) | – | (5) | – | (5) | |||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 12.27 | 5.25 | 3.80 | 16.18 | (5.40 | ) | (29.02 | ) | |||||||||||||||||||
Total from Investment Operations | 12.12 | 5.25 | 3.80 | 16.18 | (5.40 | ) | (29.02 | ) | |||||||||||||||||||
Less Distributions: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | – | – | – | – | – | – | |||||||||||||||||||||
Distributions (from capital gains)* | (2.93 | ) | – | – | – | – | (16.38 | ) | |||||||||||||||||||
Total Distributions | (2.93 | ) | – | – | – | – | (16.38 | ) | |||||||||||||||||||
Net Asset Value, End of Period | $ | 66.01 | $ | 56.82 | $ | 51.57 | $ | 47.77 | $ | 31.59 | $ | 36.99 | |||||||||||||||
Total Return** | 22.17 | % | 10.18 | % | 7.95 | % | 51.22 | % | (14.60 | )% | (40.67 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 1,475,095 | $ | 1,293,150 | $ | 1,327,088 | $ | 1,392,358 | $ | 756,323 | $ | 1,009,278 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 1,391,021 | $ | 1,367,775 | $ | 1,355,755 | $ | 988,156 | $ | 992,760 | $ | 1,312,759 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.91 | % | 0.87 | % | 0.90 | % | 0.94 | % | 0.88 | % | 0.87 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.90 | % | 0.87 | % | 0.90 | % | 0.93 | % | 0.87 | % | 0.86 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | (0.49 | )% | (0.64 | )% | (0.74 | )% | (0.67 | )% | (0.73 | )% | (0.36 | )% | |||||||||||||||
Portfolio Turnover Rate*** | 56 | % | 63 | % | 61 | % | 75 | % | 90 | % | 70 | % |
*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%.
(5) Net investment income/(loss) aggregated less than $.01 on a per share basis for the fiscal year ended.
See Notes to Financial Statements.
Janus Growth Funds April 30, 2006 83
Financial Highlights (continued)
Janus Global Life Sciences Fund | |||||||||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 19.37 | $ | 16.08 | $ | 14.61 | $ | 12.82 | $ | 16.96 | $ | 22.41 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | (.05 | ) | – | (1) | – | (1) | – | (1) | – | (1) | – | (1) | |||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | .91 | 3.29 | 1.47 | 1.79 | (4.14 | ) | (5.43 | ) | |||||||||||||||||||
Total from Investment Operations | .86 | 3.29 | 1.47 | 1.79 | (4.14 | ) | (5.43 | ) | |||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | – | – | – | – | – | (.02 | ) | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | |||||||||||||||||||||
Redemption fees | – | (2) | – | (2) | – | (2) | – | (2) | N/A | N/A | |||||||||||||||||
Payment from affiliate | – | – | – | (3) | – | – | – | ||||||||||||||||||||
Total Distributions and Other | – | – | – | – | – | (.02 | ) | ||||||||||||||||||||
Net Asset Value, End of Period | $ | 20.23 | $ | 19.37 | $ | 16.08 | $ | 14.61 | $ | 12.82 | $ | 16.96 | |||||||||||||||
Total Return** | 4.44 | % | 20.46 | % | 10.06 | %(4) | 13.87 | % | (24.35 | )% | (24.26 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 1,112,469 | $ | 1,149,666 | $ | 1,183,496 | $ | 1,264,220 | $ | 1,389,723 | $ | 2,415,086 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 1,175,835 | $ | 1,181,741 | $ | 1,288,416 | $ | 1,296,095 | $ | 1,927,734 | $ | 2,957,777 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6) | 0.99 | % | 0.97 | % | 1.02 | % | 0.99 | % | 0.89 | % | 0.93 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5) | 0.98 | % | 0.96 | % | 1.01 | % | 0.98 | % | 0.88 | % | 0.91 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | (0.43 | )% | (0.49 | )% | (0.52 | )% | (0.28 | )% | (0.42 | )% | (0.32 | )% | |||||||||||||||
Portfolio Turnover Rate*** | 84 | % | 77 | % | 78 | % | 135 | % | 73 | % | 84 | % | |||||||||||||||
Janus Global Technology Fund | |||||||||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 10.88 | $ | 9.70 | $ | 10.44 | $ | 7.41 | $ | 10.83 | $ | 27.44 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | (.03 | ) | .01 | .02 | – | (1) | (.01 | ) | .36 | ||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 2.10 | 1.17 | (.76 | ) | 3.03 | (3.41 | ) | (16.64 | ) | ||||||||||||||||||
Total from Investment Operations | 2.07 | 1.18 | (.74 | ) | 3.03 | (3.42 | ) | (16.28 | ) | ||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.01 | ) | – | – | – | – | (.16 | ) | |||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | |||||||||||||||||||||
Tax return of capital* | – | – | – | – | – | (.17 | ) | ||||||||||||||||||||
Redemption fees | – | (2) | – | (2) | – | (2) | – | (2) | N/A | N/A | |||||||||||||||||
Payment from affiliate | – | (3) | – | – | (3) | – | – | – | |||||||||||||||||||
Total Distributions and Other | (.01 | ) | – | – | – | – | (.33 | ) | |||||||||||||||||||
Net Asset Value, End of Period | $ | 12.94 | $ | 10.88 | $ | 9.70 | $ | 10.44 | $ | 7.41 | $ | 10.83 | |||||||||||||||
Total Return** | 19.01 | %(7) | 12.16 | % | (7.09 | )%(4) | 41.08 | % | (31.67 | )% | (59.95 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 1,077,907 | $ | 993,663 | $ | 1,255,023 | $ | 1,655,731 | $ | 1,249,514 | $ | 2,275,691 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 1,073,047 | $ | 1,109,908 | $ | 1,480,508 | $ | 1,332,510 | $ | 1,906,518 | $ | 4,009,850 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6) | 1.07 | % | 1.04 | % | 1.07 | % | 1.07 | % | 0.96 | % | 0.92 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5) | 1.05 | % | 1.03 | % | 1.07 | % | 1.06 | % | 0.94 | % | 0.90 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | (0.50 | )% | 0.07 | % | (0.37 | )% | (0.27 | )% | (0.14 | )% | 0.55 | % | |||||||||||||||
Portfolio Turnover Rate*** | 110 | % | 31 | % | 24 | % | 48 | % | 66 | % | 60 | % |
*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) Net investment income/(loss) aggregated less than $.01 on a per share basis for the fiscal year or period ended.
(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 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%.
(7) During the period ended, Janus Capital and/or Janus Service's 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.
84 Janus Growth Funds April 30, 2006
Notes to Schedules of Investments and
Securities Sold Short (unaudited)
Lipper Health/Biotechnology Funds | Funds that invest at least 65% of their equity portfolio 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. Large-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 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 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 IndexSM | Is a capitalization weighted index that monitors the performance of information technology stocks from around the world. | ||||||
Morgan Stanley Capital International World Health Care IndexSM | Is a capitalization weighted index that monitors the performance of healthcare stocks from developed market countries in North America, Europe, and the Asia/Pacific Region. | ||||||
Russell 1000® Growth Index | Measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. | ||||||
Russell 2000® Growth Index | Measures the performance of those Russell 2000 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 2500 companies with higher price-to-book ratios and higher forecasted growth values. | ||||||
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 | Consists of stocks from the Russell Midcap® Index with a greater-than-average growth orientation. The Russell Midcap® Index consists of the smallest 800 companies in the Russell 1000® Index, as ranked by total market capitalization. | ||||||
Janus Growth Funds April 30, 2006 85
Notes to Schedules of Investments and
Securities Sold Short (unaudited) (continued)
S&P 500® Index | The Standard & Poor's Composite Index of 500 stocks is a widely recognized, unmanaged index of common stock prices. | ||||||
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 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 | ||||||
ETD | Euro Time Deposit | ||||||
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 holding has been segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, short sales, securities with extended settlement dates and/or option contracts.
¥ Security is a defaulted security in Janus Global Technology Fund with accrued interest in the amount of $1,268,000 that was written-off December 10, 2001. A principal payment was received by the Fund on July 13, 2005. It is anticipated that sometime during the third quarter of 2006 a second principal payment will be received by the Fund.
ß Security is illiquid.
# Loaned security; a portion or all of the security is on loan as of April 30, 2006.
† The security is purchased with the cash collateral received from Securities on Loan (Note 1).
• Security is a defaulted security.
ºº Schedule of Fair Valued Securities (as of April 30, 2006)
Value | Value as a % of Net Assets | ||||||||||
Janus Venture Fund | |||||||||||
Candescent Technologies Corp. - Series E | $ | – | 0.0 | % | |||||||
DrugMax, Inc. | – | 0.0 | % | ||||||||
Genius Products, Inc. | 5,775,525 | 0.4 | % | ||||||||
Genius Products, Inc. | 529,245 | 0.0 | % | ||||||||
Infocrossing, Inc. - expires 5/10/07 | 2,404,853 | 0.2 | % | ||||||||
OneTravel Holdings, Inc. | – | 0.0 | % | ||||||||
Ronco Fi-Tek, Inc. | 5,100,000 | 0.3 | % | ||||||||
$ | 13,809,623 | 0.9 | % | ||||||||
Janus Global Life Sciences Fund | |||||||||||
Cougar Technology, Inc. | $ | 2,904,499 | 0.3 | % | |||||||
Fibrogen, Inc. | 9,106,238 | 0.8 | % | ||||||||
$ | 12,010,737 | 1.1 | % | ||||||||
Janus Global Technology Fund | |||||||||||
Candescent Technologies Corp., 8.00% convertible senior subordinated debentures due 5/1/03 (144A) | $ | – | 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 activities fair valued pursuant to a systematic fair valuation model.
86 Janus Growth Funds April 30, 2006
§ Schedule of Restricted and Illiquid Securities
Acquisition Date | Acquisition Cost | Value | Value as a % of Net Assets | ||||||||||||||||
Janus Enterprise Fund | |||||||||||||||||||
Morgan Stanley Co., convertible, (Celgene Corp.), 0% (144A) | 2/21/06 | $ | 13,162,450 | $ | 15,166,903 | 0.8 | % | ||||||||||||
Janus Mercury Fund | |||||||||||||||||||
Morgan Stanley Co., convertible, (Celgene Corp.), 0% (144A) | 2/21/06 | $ | 30,050,300 | $ | 34,626,531 | 0.9 | % | ||||||||||||
Janus Orion Fund | |||||||||||||||||||
Bajaj Hindusthan, Ltd. (GDR) (144A) | 1/27/06 | $ | 2,722,636 | $ | 3,854,676 | 0.4 | % | ||||||||||||
Janus Venture Fund | |||||||||||||||||||
DrugMax, Inc.ºº | 9/23/05 | $ | 381,250 | $ | – | 0.0 | % | ||||||||||||
Genius Products, Inc.ºº | 12/5/05 | 6,312,750 | 5,775,525 | 0.4 | % | ||||||||||||||
Genius Products, Inc.ºº | 12/5/05 | 1,083,000 | 529,245 | 0.0 | % | ||||||||||||||
OneTravel Holdings, Inc.ºº | 4/15/05 | – | – | 0.0 | % | ||||||||||||||
Ronco Fi-Tek, Inc.ºº | 6/24/05 | 6,000,000 | 5,100,000 | 0.3 | % | ||||||||||||||
$ | 13,777,000 | $ | 11,404,770 | 0.7 | % | ||||||||||||||
Janus Global Life Sciences Fund | |||||||||||||||||||
Cougar Technology, Inc.ºº | 3/31/06 | $ | 2,904,499 | $ | 2,904,499 | 0.3 | % | ||||||||||||
Fibrogen, Inc.ºº | 12/28/04 - 11/8/05 | 5,786,786 | 9,106,238 | 0.8 | % | ||||||||||||||
$ | 8,691,285 | $ | 12,010,737 | 1.1 | % | ||||||||||||||
Janus Global Technology Fund | |||||||||||||||||||
Candescent Technologies Corp., 8.00% convertible senior subordinated debentures due 5/1/03 (144A)ºº | 3/6/00 - 2/23/01 | $ | 2,614,147 | $ | – | 0.0 | % |
The Funds have registration rights for certain restricted securities held as of April 30, 2006. The issuer incurs all registration costs.
Janus Growth Funds April 30, 2006 87
Notes to Schedules of Investments and
Securities Sold Short (unaudited) (continued)
£ The Investment Company Act of 1940 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, 2006.
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/06 | |||||||||||||||||||||||||
Janus Venture Fund | |||||||||||||||||||||||||||||||
Axesstel, Inc. | – | $ | – | 2,128,965 | $ | 8,515,860 | $ | (6,726,042 | ) | $ | – | $ | – | ||||||||||||||||||
Century Casinos, Inc.(1) | – | – | – | – | – | – | 15,449,000 | ||||||||||||||||||||||||
DrugMax, Inc. | – | – | – | – | – | – | 3,965,000 | ||||||||||||||||||||||||
Genius Products, Inc. | – | – | – | – | – | – | 5,775,525 | ||||||||||||||||||||||||
Hythiam, Inc. | 911,420 | 4,329,245 | – | – | – | – | 13,851,413 | ||||||||||||||||||||||||
Infocrossing, Inc. | 170,270 | 1,248,391 | – | – | – | – | 26,920,897 | ||||||||||||||||||||||||
Intermap Technologies, Ltd. | – | – | – | – | – | – | 12,951,669 | ||||||||||||||||||||||||
LivePerson, Inc. | 1,930 | 12,560 | – | – | – | – | 21,159,772 | ||||||||||||||||||||||||
Omnicell, Inc. | 562,280 | 6,162,534 | – | – | – | – | 25,679,348 | ||||||||||||||||||||||||
OneTravel Holdings, Inc. | – | – | – | – | – | – | 630,000 | ||||||||||||||||||||||||
Ronco Fi-Tek, Inc. | – | – | – | – | – | – | 5,100,000 | ||||||||||||||||||||||||
SeraCare Life Sciences, Inc. | 92,760 | 923,389 | 935,380 | 11,272,767 | (10,678,539 | ) | – | – | |||||||||||||||||||||||
TALX Corp.(2) | – | – | 394,603 | 7,652,913 | 10,326,610 | 96,005 | 31,597,520 | ||||||||||||||||||||||||
TechTeam Global, Inc. | – | – | 644,992 | 8,326,760 | (1,574,281 | ) | – | – | |||||||||||||||||||||||
TransAct Technologies, Inc. | – | – | 799,760 | 10,407,198 | (3,037,746 | ) | – | – | |||||||||||||||||||||||
Ultimate Software Group, Inc. | – | – | 125,000 | 1,375,000 | 1,868,590 | – | 45,386,749 | ||||||||||||||||||||||||
ValueVision Media, Inc. | – | – | – | – | – | – | 21,311,650 | ||||||||||||||||||||||||
Workstream, Inc. (U.S. Shares) | – | – | – | – | – | – | 6,692,155 | ||||||||||||||||||||||||
$ | 12,676,119 | $ | 47,550,498 | $ | (9,821,408 | ) | $ | 96,005 | $ | 236,470,698 |
(1) Includes 1 for 1 share conversion 11/14/05
(2) Adjusted for 3 for 2 stock split 1/18/06
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, 2006 are noted below.
Fund | Aggregate Value | ||||||
Growth | |||||||
Janus Fund | $ | 980,397,580 | |||||
Janus Mercury Fund | 415,581,452 | ||||||
Janus Olympus Fund | 162,878,399 | ||||||
Specialty Growth | |||||||
Janus Global Life Sciences Fund | 116,384,462 | ||||||
Janus Global Technology Fund | 243,544,483 |
Variable rate notes are notes for which the interest rate is based on an index or market interest rates and is subject to change. Rates in the security description are as of April 30, 2006.
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.
88 Janus Growth Funds April 30, 2006
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 Mercury Fund, Janus Olympus Fund, Janus Orion 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 was 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 thirty-two funds. Each of the Funds 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 con verted 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. 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 and may be subject to withholding taxes in these 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 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. In addition, 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, 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. Cash collateral may also be invested in unaffiliated money market funds or other accounts.
State Street Bank and Trust Company (the "Lending Agent") may also invest the cash collateral in the State Street Navigator Securities Lending Prime Portfolio 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.
Janus Growth Funds April 30, 2006 89
Notes to Financial Statements (unaudited) (continued)
As of April 30, 2006, the following Funds had on loan securities valued as indicated:
Fund | Value at April 30, 2006 | ||||||
Growth | |||||||
Janus Fund | $ | 505,930,469 | |||||
Janus Enterprise Fund | 223,640,930 | ||||||
Janus Mercury Fund | 381,881,851 | ||||||
Janus Olympus Fund | 307,516,553 | ||||||
Janus Orion Fund | 243,484,769 | ||||||
Janus Twenty Fund | 347,802,617 | ||||||
Janus Venture Fund | 355,947,289 | ||||||
Specialty Growth | |||||||
Janus Global Life Sciences Fund | 168,908,989 | ||||||
Janus Global Technology Fund | 74,889,311 |
As of April 30, 2006, the following Funds received cash collateral for securities lending activity as indicated:
Fund | Cash Collateral at April 30, 2006 | ||||||
Growth | |||||||
Janus Fund | $ | 522,862,639 | |||||
Janus Enterprise Fund | 229,175,404 | ||||||
Janus Mercury Fund | 394,234,533 | ||||||
Janus Olympus Fund | 316,899,102 | ||||||
Janus Orion Fund | 250,086,433 | ||||||
Janus Twenty Fund | 355,131,715 | ||||||
Janus Venture Fund | 364,896,141 | ||||||
Specialty Growth | |||||||
Janus Global Life Sciences Fund | 174,002,620 | ||||||
Janus Global Technology Fund | 76,982,279 |
As of April 30, 2006, all cash collateral received was invested in the State Street Navigator Securities Lending Prime Portfolio, except for Janus Mercury Fund, which also invested $5,354,957 in foreign bonds.
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 respective 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 its Lending Agent. The Lending Agent may retain a portion of the interest earned. The cash collateral invested by the Lending Agent is disclosed in the Schedule of Investments. The lending fees and the Funds' portion of the interest income earned on cash collateral are included on the Statement of Operations (if applicable).
During the six-month period ended April 30, 2006, there were no securities lending arrangements for Janus Triton Fund.
Interfund Lending
Pursuant to an exemptive order received from the SEC, each of the Funds may be party to an interfund lending agreement between the Fund and other Janus Capital sponsored mutual funds, which permit it 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 a 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, 2006, there were no outstanding borrowing or lending arrangements for the Funds.
Short Sales
All Funds may engage in "short sales against the box." Short sales against the box involve selling either a security that the Funds own, or a security equivalent in kind and amount to the security sold short 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 in anticipation of an expected decline in the market price of that security. 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.
All Funds may also engage in "naked" short sales. Naked short sales involve a Fund selling a security it does not own to a purchaser at a specified price. To complete the transaction, a Fund must borrow the security to deliver it to the purchaser and buy that same security in the market to return it to the lender. Although the potential for gain is limited to the difference between the price at which a Fund sold the security short and the cost of borrowing the security, its potential for loss could be unlimited because there is no limit to the replacement cost of the borrowed security. There is no assurance that a Fund will be able to close out a short position at any particular time. A gain or a loss will be recognized upon termination of a short sale. There is no limit on the size of any loss that a Fund may recognize upon termination of a short sale. Short sales held by the Funds are fully collateralized by other securities, which are den oted in the accompanying Schedule of Investments (if applicable).
Forward Currency Transactions
The Funds may enter into forward currency contracts in order to reduce their exposure to changes in foreign currency exchange rates on their 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 foreign currency transactions" on the Statement of Operations (if applicable).
90 Janus Growth Funds April 30, 2006
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.
Foreign Currency Translations
The 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 translation 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 security transactions and income.
Foreign-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.
Options Contracts
The Funds may purchase or write put and call options on futures contracts or foreign currencies in a manner similar to that in which futures or forward contracts on foreign currencies will be utilized, and on portfolio securities for hedging purposes or as a substitute for an investment. 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 is 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). Options written are reported as a liability on the Statement of Assets and Liabilities (if applicable). Gains and losses are reported on the Statement of Operations (if applicable). Janus Global Life Sciences Fund recognized realized gains for written options of $37,700 during the six-month period ended April 30, 2006.
The risk in writing a call option 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 a put option 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 an option 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 that the Funds may recognize due to written call options.
Written option activity for the six-month period ended April 30, 2006 was as follows:
Put Options | Number of Options | Premiums Received | |||||||||
Janus Global Life Sciences Fund | |||||||||||
Options outstanding at October 31, 2005 | – | $ | – | ||||||||
Options written | 290 | 58,580 | |||||||||
Options closed | (290 | ) | (58,580 | ) | |||||||
Options expired | – | – | |||||||||
Options exercised | – | – | |||||||||
Options outstanding at April 30, 2006 | – | – |
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. As of April 30, 2006, there were no Funds invested in when-issued securities.
Equity-Linked Structured Notes
The Funds may invest in equity-linked structured notes. Equity-linked structured notes are debt securities which combine the characteristics of common stock and the sale of an option. The return component is based upon the performance of a single equity security, a basket of equity securities, or an equity index and the sale of an option which is recognized as income. Equity-linked structured notes are typically offered in limited transactions to financial institutions by investment banks, examples of which include performance equity-linked redemption quarterly pay securities ("PERQS"), yield-enhanced securities ("YES"), and yield enhanced equity-linked debt securities ("YEELDS"). There is no guaranteed return of principal with these securities. The appreciation
Janus Growth Funds April 30, 2006 91
Notes to Financial Statements (unaudited) (continued)
potential of these securities may be limited by a maximum payment or call right and can be influenced by many unpredictable factors.
Initial Public Offerings
The Funds may invest in initial public offerings ("IPOs"). IPOs and other investment techniques may have a magnified performance impact on a fund with a small asset base. The Funds may not experience similar performance as their assets grow.
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. 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.
Dividend Distributions
Each Fund generally declares and distributes 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.
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.
2. INVESTMENT ADVISORY AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
Each Fund pays a monthly advisory fee to Janus Capital based upon average daily net assets and calculated at the annual rate of 0.64%.
Effective February 1, 2006 for Janus Mercury Fund, the investment advisory fee rates changed from a fixed rate to a rate that adjusts upward or downward based upon the Fund's performance relative to a selected benchmark index. This change does not impact the current investment advisory fee until one year after the effective date when the performance adjustment takes effect.
Until at least March 1, 2007, provided that Janus Capital remains investment adviser to the Funds, Janus Capital has agreed to reimburse the Janus Triton Fund by the amount, if any, that such Fund's normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the brokerage commissions, interest, taxes and extraordinary 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.
Each of the Funds pays Janus Services LLC ("Janus Services"), a wholly-owned subsidiary of Janus Capital, 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, 2006, Janus Services reimbursed the following Funds as a result of dilutions caused by incorrectly processed shareholder activity as indicated in the table below.
Funds | |||||||
Growth | |||||||
Janus Fund | $ | 47,274 | |||||
Janus Olympus Fund | 954 | ||||||
Janus Twenty Fund | 16,870 | ||||||
Special Growth | |||||||
Janus Global Technology Fund | 3,607 |
For the six-month period ended April 30, 2006, Janus Capital assumed $14,642 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 Note 6. These non-recurring costs were allocated to all Portfolios, based upon the Portfolios' respective net assets as of July 31, 2004. No fees were allocated to Janus Research Fund, Janus Triton Fund and the Janus Smart Portfolios as the funds commenced operations after July 31, 2004. Additionally, all future non-recurring costs will be allocated based upon the Portfolios' respective net assets on July 31, 2004. These non-recurring costs and offsetting waivers are shown on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the "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 credited to the account. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance to the Plan. No deferred fees were paid to any Trustee under the Plan during the six-month period ended April 30, 2006.
92 Janus Growth Funds April 30, 2006
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 Funds. $59,577 of total compensation was paid by the funds of the Trust. The Funds' 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 Offsets 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.
A 2.00% redemption fee may be imposed on shares of Janus Global Life Sciences Fund and Janus Global Technology Fund held for three months 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 Janus Global Life Sciences Fund and Janus Global Technology Fund were $34,817 and $53,668, respectively, for the six-month period ended April 30, 2006.
The Funds may invest in money market funds, including funds managed by Janus Capital. During the six-month period ended April 30, 2006, the following Funds recorded distributions from affiliated investment companies as affiliated dividend income, and had the following affiliated purchases and sales:
Purchases Shares/Cost | Sales Shares/Cost | Dividend Income | Value at 4/30/06 | ||||||||||||||||
Janus Government Money Market Fund | |||||||||||||||||||
Janus Mercury Fund | $ | 40,000,000 | $ | 40,000,000 | $ | 42,970 | $ | – | |||||||||||
Janus Twenty Fund | 290,000,000 | 90,000,000 | 812,816 | 200,000,000 | |||||||||||||||
$ | 330,000,000 | $ | 130,000,000 | $ | 855,786 | $ | 200,000,000 | ||||||||||||
Janus Institutional Cash Reserves Fund | |||||||||||||||||||
Janus Fund | $ | 625,000,000 | $ | 620,000,000 | $ | 2,988,404 | $ | 165,000,000 | |||||||||||
Janus Enterprise Fund | 40,000,000 | 40,000,000 | 85,742 | – | |||||||||||||||
Janus Mercury Fund | 285,000,000 | 205,000,000 | 197,059 | 80,000,000 | |||||||||||||||
Janus Olympus Fund | 50,000,000 | – | 25,932 | 50,000,000 | |||||||||||||||
Janus Orion Fund | 50,000,000 | 50,000,000 | 79,918 | – | |||||||||||||||
Janus Twenty Fund | 310,000,000 | 25,000,000 | 7,533,225 | 485,000,000 | |||||||||||||||
$ | 1,360,000,000 | $ | 940,000,000 | $ | 10,910,280 | $ | 780,000,000 | ||||||||||||
Janus Money Market Fund | |||||||||||||||||||
Janus Fund | $ | 345,000,000 | $ | 420,000,000 | $ | 845,792 | $ | 25,000,000 | |||||||||||
Janus Mercury Fund | 200,000,000 | 200,000,000 | 489,495 | – | |||||||||||||||
Janus Twenty Fund | 850,000,000 | 425,000,000 | 4,506,308 | 475,000,000 | |||||||||||||||
$ | 1,395,000,000 | $ | 1,045,000,000 | $ | 5,841,595 | $ | 500,000,000 |
3. PURCHASES AND SALES OF INVESTMENT SECURITIES
For the six-month period ended April 30, 2006, the aggregate cost of purchases and proceeds from sales of investment securities (excluding short-term securities and options) were as follows:
Fund | Purchase of Securities | Proceeds from Sales of Securities | Purchase of Long- Term U.S. Government Obligations | Proceeds from Sales of Long-Term U.S. Government Obligations | |||||||||||||||
Growth | |||||||||||||||||||
Janus Fund | $ | 6,002,248,571 | $ | 6,005,476,689 | $ | – | $ | – | |||||||||||
Janus Enterprise Fund | 389,076,524 | 448,203,962 | – | – | |||||||||||||||
Janus Mercury Fund | 3,926,916,069 | 4,764,826,802 | – | – | |||||||||||||||
Janus Olympus Fund | 1,126,738,823 | 1,198,009,293 | – | – | |||||||||||||||
Janus Orion Fund | 432,782,648 | 227,100,902 | – | – | |||||||||||||||
Janus Triton Fund | 181,318,581 | 87,018,400 | – | – | |||||||||||||||
Janus Twenty Fund | 1,312,845,778 | 2,471,691,294 | – | – | |||||||||||||||
Janus Venture Fund | 383,839,508 | 482,334,685 | – | – | |||||||||||||||
Specialty Growth | |||||||||||||||||||
Janus Global Life Sciences Fund | 482,728,209 | 567,324,791 | – | – | |||||||||||||||
Janus Global Technology Fund | 564,591,921 | 675,069,940 | – | – |
Janus Growth Funds April 30, 2006 93
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, 2006 are also 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.
Fund | Federal Tax Cost | Unrealized Appreciation | Unrealized (Depreciation) | Net Tax Appreciation/ (Depreciation) | |||||||||||||||
Growth | |||||||||||||||||||
Janus Fund | $ | 9,986,114,406 | $ | 2,266,219,618 | $ | (138,680,425 | ) | $ | 2,127,539,193 | ||||||||||
Janus Enterprise Fund | 1,471,902,239 | 677,581,263 | (25,526,663 | ) | 652,054,600 | ||||||||||||||
Janus Mercury Fund | 3,992,672,519 | 506,388,474 | (99,083,441 | ) | 407,305,033 | ||||||||||||||
Janus Olympus Fund | 2,195,856,693 | 552,099,156 | (27,784,635 | ) | 524,314,521 | ||||||||||||||
Janus Orion Fund | 1,075,813,195 | 279,033,045 | (16,736,838 | ) | 262,296,207 | ||||||||||||||
Janus Triton Fund | 151,608,743 | 17,306,762 | (3,493,239 | ) | 13,813,523 | ||||||||||||||
Janus Twenty Fund | 7,330,756,041 | 2,681,929,402 | (18,455,513 | ) | 2,663,473,889 | ||||||||||||||
Janus Venture Fund | 1,375,566,249 | 520,366,251 | (53,445,333 | ) | 466,920,918 | ||||||||||||||
Specialty Growth | |||||||||||||||||||
Janus Global Life Sciences Fund | 1,046,239,534 | 257,306,772 | (30,090,627 | ) | 227,216,145 | ||||||||||||||
Janus Global Technology Fund | 916,597,277 | 284,030,559 | (25,915,485 | ) | 258,115,074 |
Net capital loss carryovers as of October 31, 2005 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 table below shows the expiration dates of the carryovers.
Capital Loss Carryover Expiration Schedule
For the fiscal year ended October 31, 2005
Fund | October 31, 2007 | October 31, 2008 | October 31, 2009 | October 31, 2010 | October 31, 2011 | Accumulated Capital Losses | |||||||||||||||||||||
Growth | |||||||||||||||||||||||||||
Janus Fund(1) | $ | – | $ | (27,832,088 | ) | $ | (3,409,665,900 | ) | $ | (2,692,706,418 | ) | $ | (569,521,625 | ) | $ | (6,699,726,031 | ) | ||||||||||
Janus Enterprise Fund(1) | (2,880,396 | ) | (220,932,903 | ) | (2,924,501,200 | ) | (1,180,687,781 | ) | (35,756,979 | ) | (4,364,759,259 | ) | |||||||||||||||
Janus Mercury Fund | – | – | (3,254,153,236 | ) | (2,677,021,633 | ) | (222,598,721 | ) | (6,153,773,590 | ) | |||||||||||||||||
Janus Olympus Fund(1) | – | (3,298,969 | ) | (1,147,259,588 | ) | (533,548,088 | ) | – | (1,684,106,645 | ) | |||||||||||||||||
Janus Orion Fund | – | – | (480,697,899 | ) | (67,772,191 | ) | – | (548,470,090 | ) | ||||||||||||||||||
Janus Triton Fund | – | – | – | – | – | – | |||||||||||||||||||||
Janus Twenty Fund | – | – | (2,514,552,821 | ) | (117,584,500 | ) | (643,606,306 | ) | (3,275,743,627 | ) | |||||||||||||||||
Janus Venture Fund(1) | – | – | (50,323,147 | ) | (12,580,788 | ) | – | (62,903,935 | ) | ||||||||||||||||||
Specialty Growth | |||||||||||||||||||||||||||
Janus Global Life Sciences Fund | – | (109,162,517 | ) | (451,314,670 | ) | (251,753,591 | ) | (103,237,607 | ) | (915,468,385 | ) | ||||||||||||||||
Janus Global Technology Fund | – | (6,230,420 | ) | (1,827,246,526 | ) | (857,178,929 | ) | (83,082,507 | ) | (2,773,738,382 | ) |
(1) Capital loss carryovers subject to annual limitations.
94 Janus Growth Funds April 30, 2006
During the fiscal year ended October 31, 2005, the following capital loss carryovers were utilized by the Funds as indicated in the table below.
Fund | Capital Carryover Loss Utilized | ||||||
Growth | |||||||
Janus Fund | $ | 2,439,165,545 | |||||
Janus Enterprise Fund | 178,030,460 | ||||||
Janus Mercury Fund | 337,995,565 | ||||||
Janus Olympus Fund | 299,430,515 | ||||||
Janus Orion Fund | 65,588,058 | ||||||
Janus Twenty Fund | 1,463,811,386 | ||||||
Janus Venture Fund | 52,004,445 | ||||||
Specialty Growth | |||||||
Janus Global Life Sciences Fund | 170,843,244 | ||||||
Janus Global Technology Fund | 97,986,731 |
5. CAPITAL SHARE TRANSACTIONS
For the six-month period ended April 30, 2006 (unaudited) and the fiscal year ended October 31, 2005 | Janus Fund | Janus Enterprise Fund | Janus Mercury Fund | Janus Olympus Fund | |||||||||||||||||||||||||||||||
(all numbers in thousands) | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||||||||||
Transactions in Fund Shares | |||||||||||||||||||||||||||||||||||
Shares sold | 31,817 | 15,753 | 3,442 | 6,111 | 8,253 | 33,707 | 4,050 | 3,301 | |||||||||||||||||||||||||||
Reinvested distributions | 300 | – | – | – | 513 | 289 | 19 | – | |||||||||||||||||||||||||||
Shares repurchased | (57,269 | ) | (145,132 | ) | (4,880 | ) | (12,764 | ) | (42,266 | ) | (60,613 | ) | (6,007 | ) | (20,158 | ) | |||||||||||||||||||
Net Increase/(Decrease) in Capital Share Transactions | (25,152 | ) | (129,379 | ) | (1,438 | ) | (6,653 | ) | (33,500 | ) | (26,617 | ) | (1,938 | ) | (16,857 | ) | |||||||||||||||||||
Shares Outstanding, Beginning of Period | 455,877 | 585,256 | 43,147 | 49,800 | 202,882 | 229,499 | 72,891 | 89,748 | |||||||||||||||||||||||||||
Shares Outstanding, End of Period | 430,725 | 455,877 | 41,709 | 43,147 | 169,382 | 202,882 | 70,953 | 72,891 | |||||||||||||||||||||||||||
For the six-month period ended April 30, 2006 (unaudited) and the fiscal year or period ended October 31, 2005 | Janus Orion Fund | Janus Triton Fund | Janus Twenty Fund | Janus Venture Fund | |||||||||||||||||||||||||||||||
(all numbers in thousands) | 2006 | 2005 | 2006 | 2005(1) | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||||||||||
Transactions in Fund Shares | |||||||||||||||||||||||||||||||||||
Shares sold | 35,447 | 22,671 | 9,686 | 4,486 | 4,666 | 12,470 | 273 | 653 | |||||||||||||||||||||||||||
Reinvested distributions | 712 | – | 18 | – | 399 | 59 | 1,108 | – | |||||||||||||||||||||||||||
Shares repurchased | (10,726 | ) | (18,685 | ) | (1,126 | ) | (1,015 | ) | (15,907 | ) | (38,601 | ) | (1,795 | ) | (3,628 | ) | |||||||||||||||||||
Net Increase/(Decrease) in Capital Share Transactions | 25,433 | 3,986 | 8,578 | 3,471 | (10,842 | ) | (26,072 | ) | (414 | ) | (2,975 | ) | |||||||||||||||||||||||
Shares Outstanding, Beginning of Period | 88,687 | 84,701 | 3,471 | – | 201,813 | 227,885 | 22,760 | 25,735 | |||||||||||||||||||||||||||
Shares Outstanding, End of Period | 114,120 | 88,687 | 12,049 | 3,471 | 190,971 | 201,813 | 22,346 | 22,760 |
For the six-month period ended April 30, 2006 (unaudited) and the fiscal year ended October 31, 2005 | Janus Global Life Sciences Fund | Janus Global Technology Fund | |||||||||||||||||
(all numbers in thousands) | 2006 | 2005 | 2006 | 2005 | |||||||||||||||
Transactions in Fund Shares | |||||||||||||||||||
Shares sold | 2,030 | 2,837 | 3,293 | 4,449 | |||||||||||||||
Reinvested distributions | – | – | 59 | – | |||||||||||||||
Shares repurchased | (6,395 | ) | (17,065 | ) | (11,332 | ) | (42,493 | ) | |||||||||||
Net Increase/(Decrease) in Capital Share Transactions | (4,365 | ) | (14,228 | ) | (7,980 | ) | (38,044 | ) | |||||||||||
Shares Outstanding, Beginning of Period | 59,368 | 73,596 | 91,292 | 129,336 | |||||||||||||||
Shares Outstanding, End of Period | 55,003 | 59,368 | 83,312 | 91,292 |
(1) Period from February 25, 2005 (inception date) through October 31, 2005.
Janus Growth Funds April 30, 2006 95
Notes to Financial Statements (unaudited) (continued)
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 in that Court that generally include: (i) claims by a putative class of investors in certain Janus funds asserting claims on behalf of the investor class; (ii) derivative claims by investors in certain Janus funds ostensibly on behalf of suc h funds; (iii) claims on behalf of participants in the Janus 401(k) plan; (iv) claims brought on behalf of shareholders of Janus Capital Group Inc. ("JCGI") on a derivative basis against the Board of Directors of JCGI; and (v) claims by a putative class of shareholders of JCGI asserting claims on behalf of the shareholders. 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 (actions (i) and (ii) described 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. The complaint in the 401(k) plan class action (action (iii) described above) was voluntarily dismissed, but was refiled using a new named plaintiff and asserting claims similar to the initial complaint. As a result of the above events, JCGI, Janus Capital, the Advisory Committee of the Janus 401(k) plan, and the current or former directors of JCGI are the remaining defendants in one or more of the actions.
The Attorney General's Office for the State of West Virginia filed a separate market timing related civil action against Janus Capital and several other non-affiliated mutual fund companies, claiming violations under the West Virginia Consumer Credit and Protection Act. The civil action requests certain monetary penalties, among other relief. This action has been removed to federal court and transferred to the Multidistrict Litigation case in the U.S. District Court of Baltimore, Maryland described above. In addition, the Auditor of the State of West Virginia, in his capacity as securities commissioner, has issued an order indicating an intent to initiate administrative proceedings against most of the defendants in the market timing cases (including Janus Capital) and seeking disgorgement and other monetary relief based on similar market timing allegations.
In addition to the "market timing" actions described above, Janus Capital is a defendant in a consolidated lawsuit in the U.S. District Court for the District of Colorado challenging the investment advisory fees charged by Janus Capital to certain Janus funds. The action was filed in 2004 by fund investors asserting breach of fiduciary duty under Section 36(b) of the Investment Company Act of 1940. The plaintiffs seek declaratory and injunctive relief and an unspecified amount of damages.
In 2001, Janus Capital's predecessor was also named as a defendant in a class action suit in the U.S. District Court for the Southern District of New York, alleging that certain underwriting firms and institutional investors violated antitrust laws in connection with initial public offerings. The U.S. District Court dismissed the plaintiff's antitrust claims in November 2003, however, the U.S. Court of Appeals vacated that decision and remanded it for further proceedings.
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.
96 Janus Growth Funds April 30, 2006
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; 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
Amendments to Advisory Agreements to Conform to Prevailing Industry Practice
On September 20, 2005, the Board of Trustees, including all of the Independent Trustees, voted unanimously to approve an amended Investment Advisory Agreement ("Amended Agreement") for each Fund and authorized the submission of each Amended Agreement to the Fund's shareholders for approval. Shareholders approved the Amended Agreement for their Fund at a special meeting of Shareholders held on December 29, 2005 for Janus Fund, Janus Orion Fund, Janus Triton Fund, Janus Twenty Fund, and Janus Venture Fund; and on January 9, 2006 for Janus Enterprise Fund, Janus Mercury Fund, Janus Olympus Fund, Janus Global Life Sciences Fund, and Janus Global Technology Fund.
In approving the proposed Amended Agreements, the Trustees considered the recommendations of an independent compliance consultant engaged by Janus Capital regarding the form of each of those agreements and concluded that the proposed changes were consistent with industry practice and would reflect an appropriate delegation of authority to Janus Capital clarifying its investment discretion over the Funds it manages.
In connection with their most recent consideration of the investment advisory agreements for all of the Funds, the Trustees received and reviewed a substantial amount of information provided by Janus Capital and the respective subadvisers for subadvised Funds in response to requests of the Independent Trustees and their counsel. They also received and reviewed a considerable amount of information and analysis provided to the Trustees by an independent fee consultant. Throughout their consideration of the agreements, the Independent Trustees were advised by their independent legal counsel. The Independent Trustees met on two separate occasions with Janus Capital management to consider the agreements, and at each of those meetings they also met separately in executive session with their counsel.
Based on their evaluation of the information provided by Janus Capital, subadvisers, the independent fee consultant, Lipper Inc. ("Lipper"), and other information, the Trustees determined that the overall arrangements between the Funds and Janus Capital were fair and reasonable in light of the nature 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. In considering the 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 agreements are discussed separately below.
Nature, Extent, and Quality of Services
The Trustees reviewed the nature, extent, and quality of the services of Janus Capital and the subadvisers to the Funds, taking into account the investment objective and strategy of each Fund and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis. 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, and overseeing the activities of other service provider s, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations. The Trustees also reviewed the enhanced compliance program of Janus Capital and the actions taken by Janus Capital in response to various legal and regulatory proceedings since the fall of 2003.
Janus Growth Funds April 30, 2006 97
Additional Information (unaudited) (continued)
The Trustees concluded that the nature, extent, and quality of the services provided by Janus Capital and, if applicable, the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory agreements, that 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 appropriate education and experience, to serve the Funds effectively and had demonstrated its continuing ability to attract and retain well-qualified personnel.
Performance of the Funds
The Trustees considered the short-term and longer term performance of each Fund. They reviewed information comparing each Fund's performance with the performance of comparable funds and peer groups identified by Lipper and with the Fund's benchmark index. They concluded that the performance of most Funds was good to very good. Although the performance of some Funds lagged that of their peers for certain periods, they also concluded that Janus Capital had taken appropriate steps to address the 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 information for other comparable funds as provided by Lipper. They noted that the rate of management (investment advisory and administrative) fees for each Fund, 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 in determining compensation payable to portfolio managers, the very competitive environment for investment management talent and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed Janus Capital's management fees for its separate account clients and for its subadvised funds (for which Janus Capital provides only portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fees for Funds having a similar strategy, the Trustees noted that 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. Moreover, they noted that the spread between the average fees charged to the Funds and the fees that Janus Capital charged to its separate account clients was significantly smaller than the average spread for such fees of o ther advisers, based on publicly available data and research conducted by their independent fee consultant.
The Trustees also considered the profitability to Janus Capital and its affiliates of their relationships with each Fund and found Janus Capital's profitability not to be unreasonable.
Finally, the Trustees considered the financial condition of Janus Capital, which they found to be sound.
The Trustees concluded that the management fees and any other compensation payable by each Fund to Janus Capital and its affiliates, as well as the fees paid by Janus Capital or a Fund to the subadvisers of subadvised Funds, were reasonable in relation to the nature 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 charges to other clients. The Trustees also concluded that the overall expense ratio of each Fund was reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital, the investment performance of the Fund, and the expense limitations agreed to by Janus Capital.
Economies of Scale
The Trustees received and considered information about the potential of Janus Capital to experience economies of scale as the assets of the Funds increase. They noted that, although each Fund (except four Funds that have breakpoints) pays an advisory fee at a fixed rate as a percentage of net assets, without any breakpoints, the management fee paid by each Fund, after any applicable contractual expense limitations, was below the mean management fee rate of the Fund's peer group selected by Lipper. The Trustees also took note that, for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of many of the Funds have declined in the past few years, the Funds have benefited from having advisory fee rates that have remained constant rather than fees with breakpoints and higher fee rates at low er asset levels in which the effective fee rate might have increased as assets declined. The Trustees considered certain Amended Agreements that included a change to the advisory fee to reflect a performance-based structure under which the rate of fee would increase or decrease from the current fixed rate if the Fund outperforms or underperforms its benchmark index over a trailing period. Such a fee structure is likely to increase or decrease Janus Capital's economies of scale, depending on whether the effective rate of the fee is increased or decreased. The Trustees also noted that the Funds share directly in economies of scale through lower charges of third party
98 Janus Growth Funds April 30, 2006
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 fee structure in each of the advisory agreements was reasonable and that the current rates of fees reflect a sharing between Janus Capital and the Fund of economies of scale at the current asset level of the Fund.
Other Benefits to the Adviser
The Trustees also considered benefits that accrue to Janus Capital and its affiliates from their relationship with the Funds. They recognized that affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively. The Trustees also considered Janus Capital's use of commissions paid by most Funds on their portfolio brokerage transactions to obtain proprietary research products and services benefiting the Funds and/or other clients of Janus Capital, as well as Janus Capital's agreement not to use any Fund's portfolio brokerage transactions to obtain third party research through brokers. The Trustees concluded that Janus Capital's use of "soft" commission dollars to obtain proprietary research products and services was consistent with regulatory requirements 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 concluded that Janus Capital benefits from the receipt of proprietary 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 each Fund could attract other business to Janus Capital or its other Funds and that the success of Janus Capital could enhance Janus Capital's ability to serve the Funds.
After full consideration of the above factors as well as other factors, the Trustees, including all of the Independent Trustees, concluded that the current Investment Advisory Agreement for each Fund was in the best interest of the Fund and its shareholders. In approving the Amended Agreements, the Independent Trustees also concluded that the Amended Agreement, as proposed, was in the best interest of the Fund and its shareholders.
Performance-Based Investment Advisory Fee Proposal — For Janus Mercury Fund
On September 20, 2005 and October 19, 2005, the Board of Trustees, including all of the Independent Trustees, voted unanimously to approve an Amended Investment Advisory Agreement for the Fund ("Proposed Agreement") and authorized the submission of the Proposed Agreement to the Fund's shareholders for approval. The Proposed Agreement changed the advisory fee paid by the Fund from a fixed rate to a rate that adjusts upward or downward based upon the Fund's performance relative to a selected benchmark index. Shareholders of the Fund approved the Proposed Agreement at a special meeting of Shareholders held on January 9, 2006.
For more than a year the Independent Trustees and their independent fee consultant, in consultation with independent legal counsel to the Independent Trustees, have explored the possibility of modifying the fee structure for certain funds to provide for a performance-based adjustment to the current investment advisory fee rate that would increase or decrease the fee based on whether the Fund's total return performance exceeds or lags a stated relevant benchmark index.
The Independent Trustees also worked with Janus Capital to develop a performance structure that was acceptable to Janus Capital. In doing so, the Independent Trustees were seeking to provide a closer alignment of the interests of Janus Capital with those of the Funds and their shareholders. They believe that the fee structure proposed for each Fund will achieve that objective. Included as part of their analysis of the overall performance fee structure, the Trustees, in consultation with their independent fee consultant, considered the appropriate performance range for achieving the maximum and minimum advisory fee that would result in the Performance Adjustment of up to 0.15% (positive or negative) of a Fund's average daily net assets during the applicable performance measurement period. The Trustees reviewed information provided by Janus Capital and prepared by their independent fee consultant with respect to an appropriate deviation of exc ess/under returns relative to a Fund's benchmark index, taking into consideration expected tracking error of the Fund, expected returns and potential risks and economics involved both for Janus Capital and the Fund's shareholders. The Trustees also reviewed the structure of performance fees applied by other mutual fund complexes. Based on this information, the Trustees determined that a performance range that approximates one standard deviation of excess/under returns relative to a Fund's benchmark index was appropriate for calculating the maximum range (positive or negative) of the Performance Adjustment.
As described above, the Performance Adjustment that will be added to or subtracted from the "Base Fee" (as defined in the Proposed Agreement) as a result of a Fund's performance relative to its benchmark index is a variable up to 0.15% of average net assets during the performance measurement period. Importantly, the performance is computed after deducting the Fund's operating expenses (including advisory fees), which means that in order to receive any upward adjustment from the Base Fee, Janus Capital must deliver a
Janus Growth Funds April 30, 2006 99
Additional Information (unaudited) (continued)
total return after expenses that exceeds the return of the benchmark index, which does not incur any expenses.
The Trustees determined that the benchmark index specified in each of the Proposed Agreements for purposes of computing the performance fee adjustments is appropriate for the respective Fund based on a number of factors, including the fact that the index is broad-based and is composed of securities of the types in which the Fund may invest. The Trustees believe that divergence between the Fund's performance and performance of the index can be attributed, in part, to the ability of the portfolio manager in making investment decisions within the parameters of the Fund's investment objective and investment policies and restrictions.
The Trustees determined that the class of shares of each Fund selected for purposes of calculating the Performance Adjustment as applied to the Fund is the most appropriate class for use in calculating such Fund's Performance Adjustment. In making that determination, the Trustees considered the fee structure and expenses paid by each class of shares, any fees paid to or retained by Janus Capital or its affiliates, as well as the distribution channel for each class of shares.
The time periods to be used in determining any Performance Adjustment were also judged to be of appropriate length to ensure proper correlation and to prevent fee adjustments from being based upon random or insignificant differences between the performance of the Fund and of the index. In that regard, the Trustees concluded that it would be appropriate for there to be no adjustment from the Base Fee for the first 12 months after the effective date of each Proposed Agreement before implementation of any Performance Adjustment, and that, once implemented, the Performance Adjustment should reflect only the Fund's performance subsequent to that effective date. Moreover, the Trustees believed that, upon reaching the thirty-sixth month after the effective date, the performance measurement period would be fully implemented, and that the Performance Adjustment should thereafter be based upon a thirty-six month rolling performance measurement period.
In addition to considering the performance fee structure reflected in each Proposed Agreement, in approving each of those agreements, the Trustees followed the process and considered the factors and reached the conclusions described above under "Amendments to Advisory Agreements to Conform to Prevailing Industry Practice."
100 Janus Growth Funds April 30, 2006
Explanations of Charts, Tables and
Financial Statements (unaudited)
1. PERFORMANCE OVERVIEWS
Performance overview graphs compare the performance of a hypothetical $10,000 investment in each Fund 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 any dividends, distributions and capital gains, 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.
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 options contracts follows each Fund's Schedule of Investments (if applicable). Option 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.
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'll notice that a significant portion of net assets is shareholder capital.
Janus Growth Funds April 30, 2006 101
Explanations of Charts, Tables and
Financial Statements (unaudited) (continued)
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 and expense offsets 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, if any, are also shown.
The last section lists the increase or decrease in the value of securities held in the Funds. 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 Fund's 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'll 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 withdraw via redemptions. The "Redemption Fees" refers to the fee paid to the Funds for shares held for three months 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 the Funds' NAV for current and past reporting periods. Not only does this table provide you with total return, it also reports total distributions, asset size, expense ratios and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income per share, which comprises dividends and interest income earned on securities held by the Funds. Following is the total of gains/(losses), realized and unrealized. Dividends and distributions are then subtracted to arrive at the NAV per share at the end of the period.
The next line reflects the average annual total return reported the last day of the period.
Also included are the expense ratios, or the percentage of 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 average shareholder account size 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 offset and the net expenses. The expense ratios listed in the Financial Highlights reflect total expenses prior to any expense offsets (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 ratio is the portfolio turnover rate, which measures the buying and selling activity in a Fund. Portfolio turnover is affected by market conditions, changes in the asset size of a Fund, the nature of the Fund's investments and the investment style of the portfolio manager. A 100% rate implies that an amount equal to the value of the entire portfolio is turned over in a year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the portfolio is traded every six months.
102 Janus Growth Funds April 30, 2006
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Janus Growth Funds April 30, 2006 103
Shareholder Meeting (unaudited)
A Special Meeting of Shareholders of the Funds was held on November 22, 2005 and adjourned and reconvened to December 29, 2005 and January 9, 2006. At the meetings, the following matters were voted on and approved by the Shareholders. Each vote reported represents one dollar of net asset value held on the record date of the meeting. The results of the Special Meeting of Shareholders are noted below.
Proposal 1
Elect nine Trustees, including eight "independent" candidates.
Record | Number of Votes | Percentage of Total Outstanding Votes | Percentage of Voted | ||||||||||||||||||||||||||||||||||||||||
Trustees | Date Votes | Affirmative | Withheld | Total | Affirmative | Withheld | Total | Affirmative | Withheld | Total | |||||||||||||||||||||||||||||||||
Jerome S. Contro | 72,431,132,779 | 28,415,846,253 | 806,823,785 | 29,222,670,038 | 39.23 | % | 1.12 | % | 40.35 | % | 97.24 | % | 2.76 | % | 100.00 | % | |||||||||||||||||||||||||||
William F. McCalpin | 72,431,132,779 | 28,431,830,093 | 790,839,945 | 29,222,670,038 | 39.26 | % | 1.09 | % | 40.35 | % | 97.29 | % | 2.71 | % | 100.00 | % | |||||||||||||||||||||||||||
John W. McCarter, Jr. | 72,431,132,779 | 28,410,815,406 | 811,854,632 | 29,222,670,038 | 39.23 | % | 1.12 | % | 40.35 | % | 97.22 | % | 2.78 | % | 100.00 | % | |||||||||||||||||||||||||||
Dennis B. Mullen | 72,431,132,779 | 28,408,140,530 | 814,529,508 | 29,222,670,038 | 39.22 | % | 1.13 | % | 40.35 | % | 97.21 | % | 2.79 | % | 100.00 | % | |||||||||||||||||||||||||||
James T. Rothe | 72,431,132,779 | 28,421,678,938 | 800,991,100 | 29,222,670,038 | 39.24 | % | 1.11 | % | 40.35 | % | 97.26 | % | 2.74 | % | 100.00 | % | |||||||||||||||||||||||||||
William D. Stewart | 72,431,132,779 | 28,426,971,191 | 795,698,847 | 29,222,670,038 | 39.25 | % | 1.10 | % | 40.35 | % | 97.28 | % | 2.72 | % | 100.00 | % | |||||||||||||||||||||||||||
Martin H. Waldinger | 72,431,132,779 | 28,400,077,651 | 822,592,387 | 29,222,670,038 | 39.21 | % | 1.14 | % | 40.35 | % | 97.18 | % | 2.82 | % | 100.00 | % | |||||||||||||||||||||||||||
Linda S. Wolf | 72,431,132,779 | 28,406,316,741 | 816,353,297 | 29,222,670,038 | 39.22 | % | 1.13 | % | 40.35 | % | 97.21 | % | 2.79 | % | 100.00 | % | |||||||||||||||||||||||||||
Thomas H. Bailey | 72,431,132,779 | 28,395,482,070 | 827,141,468 | 29,222,623,538 | 39.21 | % | 1.14 | % | 40.35 | % | 97.17 | % | 2.83 | % | 100.00 | % |
Proposal 3a
To approve certain amendments to the Fund's investment advisory agreement with Janus Capital to conform to prevailing industry practice.
Number of Votes | Percentage of Total Outstanding Votes | Percentage of Voted | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Fund | Record Date Votes | Affirmative | Against | Abstain | Broker Non-Votes | Affirmative | Against | Abstain | Broker Non-Votes | Affirmative | Against | Abstain | Broker Non-Votes | ||||||||||||||||||||||||||||||||||||||||||
Growth | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Janus Fund | 11,815,883,814 | 5,141,704,247 | 298,128,737 | 253,100,803 | 1,597,577,073 | 43.52 | % | 2.52 | % | 2.14 | % | 13.52 | % | 70.53 | % | 4.09 | % | 3.47 | % | 21.91 | % | ||||||||||||||||||||||||||||||||||
Janus Enterprise Fund | 1,768,581,761 | 655,989,507 | 39,765,195 | 30,146,258 | 223,066,755 | 37.09 | % | 2.25 | % | 1.71 | % | 12.61 | % | 69.13 | % | 4.19 | % | 3.18 | % | 23.50 | % | ||||||||||||||||||||||||||||||||||
Janus Mercury Fund | 4,543,442,548 | 1,750,195,166 | 110,854,182 | 93,469,589 | 480,923,905 | 38.52 | % | 2.44 | % | 2.06 | % | 10.59 | % | 71.86 | % | 4.55 | % | 3.84 | % | 19.75 | % | ||||||||||||||||||||||||||||||||||
Janus Olympus Fund | 2,299,460,931 | 871,255,022 | 60,570,362 | 45,247,870 | 271,664,004 | 37.89 | % | 2.63 | % | 1.97 | % | 11.81 | % | 69.77 | % | 4.85 | % | 3.62 | % | 21.76 | % | ||||||||||||||||||||||||||||||||||
Janus Orion Fund | 671,127,831 | 291,456,936 | 21,189,706 | 14,196,184 | 65,470,079 | 43.43 | % | 3.16 | % | 2.11 | % | 9.76 | % | 74.29 | % | 5.40 | % | 3.62 | % | 16.69 | % | ||||||||||||||||||||||||||||||||||
Janus Triton Fund | 34,409,032 | 18,943,291 | 1,137,454 | 571,245 | 2,189,775 | 55.05 | % | 3.31 | % | 1.66 | % | 6.36 | % | 82.93 | % | 4.98 | % | 2.50 | % | 9.59 | % | ||||||||||||||||||||||||||||||||||
Janus Twenty Fund | 9,824,414,895 | 4,511,070,075 | 270,345,145 | 161,625,541 | 1,308,505,546 | 45.92 | % | 2.75 | % | 1.65 | % | 13.32 | % | 72.16 | % | 4.33 | % | 2.58 | % | 20.93 | % | ||||||||||||||||||||||||||||||||||
Janus Venture Fund | 1,406,700,835 | 631,791,354 | 51,270,013 | 35,124,403 | 150,422,355 | 44.91 | % | 3.65 | % | 2.50 | % | 10.69 | % | 72.74 | % | 5.90 | % | 4.04 | % | 17.32 | % | ||||||||||||||||||||||||||||||||||
Specialty Growth | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Janus Global Life Sciences Fund | 1,213,179,543 | 502,255,257 | 36,813,843 | 25,335,504 | 142,457,413 | 41.40 | % | 3.03 | % | 2.09 | % | 11.74 | % | 71.06 | % | 5.21 | % | 3.58 | % | 20.15 | % | ||||||||||||||||||||||||||||||||||
Janus Global Technology Fund | 1,059,507,132 | 426,902,165 | 31,772,093 | 22,473,123 | 99,490,344 | 40.29 | % | 3.00 | % | 2.12 | % | 9.39 | % | 73.52 | % | 5.47 | % | 3.87 | % | 17.14 | % |
Proposal 3b
To approve an amended investment advisory agreement between the Fund and Janus Capital to change the investment advisory fee rate from a fixed rate to a rate that adjusts upward or downward based upon the Fund's performance relative to its benchmark index.
Number of Votes | Percentage of Total Outstanding Votes | Percentage of Voted | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Fund | Record Date Votes | Affirmative | Against | Abstain | Broker Non-Votes | Affirmative | Against | Abstain | Broker Non-Votes | Affirmative | Against | Abstain | Broker Non-Votes | ||||||||||||||||||||||||||||||||||||||||||
Growth | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Janus Mercury Fund | 4,543,442,548 | 1,660,646,635 | 207,789,473 | 86,082,829 | 480,923,905 | 36.55 | % | 4.57 | % | 1.90 | % | 10.59 | % | 68.19 | % | 8.53 | % | 3.53 | % | 19.75 | % |
104 Janus Growth Funds April 30, 2006
Janus Growth Funds April 30, 2006 105
Janus provides access to a wide range of investment disciplines.
Asset Allocation
Janus asset allocation funds 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.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
151 Detroit Street
Denver, CO 80206
1-800-525-3713
Funds distributed by Janus Distributors LLC (6/06)
C-0606-22 111-24-103 06-06
2006 Semiannual Report
Janus Core, Risk-Managed and Value Funds
Core
Janus Balanced Fund
Janus Contrarian Fund
Janus Core Equity Fund
Janus Growth and Income Fund
Janus Research Fund
Risk-Managed
INTECH Risk-Managed Stock Fund
Value
Janus Mid Cap Value Fund
Janus Small Cap Value Fund
Look Inside. . .
• Portfolio manager perspective
• Investment strategy behind your fund
• Fund performance, characteristics and holdings
Table of Contents
Janus Core, Risk-Managed and Value Funds
President and CEO Letter to Shareholders | 1 | ||||||
Portfolio Managers' Commentaries and Schedules of Investments | |||||||
Janus Balanced Fund | 6 | ||||||
Janus Contrarian Fund | 14 | ||||||
Janus Core Equity Fund | 21 | ||||||
Janus Growth and Income Fund | 28 | ||||||
Janus Research Fund | 35 | ||||||
INTECH Risk-Managed Stock Fund | 42 | ||||||
Janus Mid Cap Value Fund | 51 | ||||||
Janus Small Cap Value Fund | 58 | ||||||
Statements of Assets and Liabilities | 64 | ||||||
Statements of Operations | 66 | ||||||
Statements of Changes in Net Assets | 68 | ||||||
Financial Highlights | 71 | ||||||
Notes to Schedules of Investments | 76 | ||||||
Notes to Financial Statements | 79 | ||||||
Additional Information | 89 | ||||||
Explanations of Charts, Tables and Financial Statements | 95 | ||||||
Shareholder Meeting | 98 | ||||||
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.
CEO's Letter
Gary Black
President and Chief Executive Officer
Dear Shareholders,
Before offering my perspective on the economy, the markets and the progress we've made at Janus during the six months ended April 30, 2006, I'd like to thank you for your continued confidence and investment in Janus' funds. Your unwavering support is the driving force behind our desire to deliver the strong, consistent fund performance that you've come to expect from Janus.
As you'll read on the following pages, our fund managers continued to deliver excellent performance – for the one-year period ended April 30, 2006, 68% of Janus' retail funds ranked within Lipper's top two quartiles based on total returns. For the five years ended April 30, 2006, 57% of our retail funds earned first- or second-quartile Lipper rankings – up from 30% a year ago. Over the past three years, Janus' U.S. equity funds have gained an average of 21% annually, versus a 12% gain for the Russell 1000® Growth Index and a 15% gain for the S&P 500® Index. (See performance and complete ranking figures on pages 3-4).
Staying Focused on Consistent Performance
While we're pleased to report solid performance across different time periods, our goal is to ensure consistency in our investment returns across different market cycles as well. We employ several tools to help us meet this goal, beginning with detailed research processes that help us single out what we feel are the best investments for our funds. The very talented and experienced individuals at the heart of these processes – our research analysts and portfolio managers – are what distinguish Janus from its asset management peers. Additionally, our robust risk management tools and disciplined buy/sell strategies help in our efforts to deliver consistent performance over full market cycles.
...our goal is to ensure consistency in our investment returns across different market cycles...
We recently appointed Chief Investment Officers to oversee our various investment disciplines. Jonathan Coleman and David Decker oversee our U.S. Growth and Core funds, Jason Yee is responsible for our Global and International funds, and Gibson Smith has oversight of our Fixed-Income and Money Market funds. In their respective roles, these individuals serve as player-coaches with the portfolio managers and analysts who work with them and focus on driving performance of the products they oversee.
Combined, we believe these elements of our research process will help us as we strive to deliver strong fund performance in all market environments.
Corporate Profits Remained Strong
On that note, I'd like to summarize the environment we – and other investors – operated in during the past six months. Stronger-than-expected economic data and growing anticipation of a possible conclusion to monetary tightening by the Federal Reserve drove U.S. equity markets higher during the period. Notwithstanding a sharp spike in energy prices in early 2006 and clear signs of a slowdown in the U.S. housing market, corporate profits continued to grow at a healthy clip and consumer spending remained robust. Financial markets observed a smooth transition in leadership at the Federal Reserve Board after Chairman Alan Greenspan's long tenure, and investors appeared to conclude that incoming Chairman Ben Bernanke would pursue a similar course to that of his predecessor, namely, to contain inflation and promote long-term economic growth. Perhaps the biggest risk, in our opinion, is that the Federal Reserve could increase short-term r ates too aggressively to curb potential inflation, which could cause longer-term growth to stall.
Areas of particular strength in the market included economically sensitive sectors such as financial services, industrials and energy, all of which benefited from continued evidence of strong U.S. economic growth. Overseas markets also delivered healthy returns, with Japan's economic recovery reawakening domestic Japanese investors to the Japanese equity market, and rapid industrialization and growing consumer wealth driving significant gains in emerging equity markets like Brazil, China and India.
Greater Diversification Sought by Investors
It was encouraging to see equity markets worldwide climb higher during the period. And yet, if there's one thing that all investors can consistently count on, it's that there is no consistency in the markets. This year's gains could be next year's losses. With this in mind, more and more investors seem to be making a concerted effort to maintain a
Janus Core, Risk-Managed and Value Funds April 30, 2006 1
Continued
diversified portfolio. In recognition of this, we launched Janus Smart Portfolios in late December 2005. These Portfolios are geared toward investors who may not have the time to allocate their assets according to their specific goals and risk tolerance.
Janus Smart Portfolios invest in a 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). We believe the unique combination of these two different investment styles, assembled with the view of providing long-term diversification and market opportunity, will be of great benefit to shareholders as they invest toward their goals. And with three different portfolios to choose from – Growth, Moderate and Conservative – investors can choose the level of risk they are willing to take in pursuit of their goals.
A Compelling Case for Growth
In summary, the economic outlook appears positive to us, and we find valuations for U.S. equities attractive. The combination of those two factors continues to make a solid case for growth investing. Although future interest rate increases are becoming less likely, we will continue to closely monitor the actions of the Federal Reserve. Regardless of the macroeconomic climate ahead, we remain dedicated to rewarding your trust and confidence in Janus with strong, consistent fund performance.
Sincerely,
Gary Black
Chief Executive Officer and
Chief Investment Officer
2 Janus Core, Risk-Managed and Value Funds April 30, 2006
Lipper Rankings
Lipper Rankings – Based on total return as of 4/30/06 | |||||||||||||||||||||||||||||||||||||||||||||||
ONE YEAR | THREE YEAR | FIVE YEAR | TEN YEAR | SINCE INCEPTION | |||||||||||||||||||||||||||||||||||||||||||
LIPPER CATEGORY | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | |||||||||||||||||||||||||||||||||||||
Janus Investment Funds | |||||||||||||||||||||||||||||||||||||||||||||||
(Inception Date) | |||||||||||||||||||||||||||||||||||||||||||||||
Janus Fund (2/70) | Large-Cap Growth Funds | 43 | 296/698 | 48 | 280/590 | 79 | 374/474 | 44 | 72/165 | 5 | 1/19 | ||||||||||||||||||||||||||||||||||||
Janus Enterprise Fund(1) (9/92) | Mid-Cap Growth Funds | 58 | 324/563 | 30 | 134/461 | 72 | 257/357 | 69 | 88/128 | 40 | 20/49 | ||||||||||||||||||||||||||||||||||||
Janus Mercury Fund(1) (5/93) | Large-Cap Growth Funds | 31 | 210/698 | 9 | 53/590 | 65 | 306/474 | 11 | 18/165 | 2 | 1/84 | ||||||||||||||||||||||||||||||||||||
Janus Olympus Fund(1) (12/95) | Multi-Cap Growth Funds | 44 | 186/423 | 53 | 190/359 | 66 | 188/288 | 27 | 25/95 | 15 | 13/88 | ||||||||||||||||||||||||||||||||||||
Janus Orion Fund (6/00) | Multi-Cap Growth Funds | 3 | 11/423 | 1 | 3/359 | 3 | 8/288 | N/A | N/A | 27 | 61/230 | ||||||||||||||||||||||||||||||||||||
Janus Triton Fund (2/05) | Small-Cap Growth Funds | 12 | 59/533 | N/A | N/A | N/A | N/A | N/A | N/A | 3 | 14/520 | ||||||||||||||||||||||||||||||||||||
Janus Twenty Fund* (4/85) | Large-Cap Growth Funds | 6 | 36/698 | 2 | 6/590 | 12 | 56/474 | 2 | 2/165 | 3 | 1/40 | ||||||||||||||||||||||||||||||||||||
Janus Venture Fund* (4/85) | Small-Cap Growth Funds | 59 | 311/533 | 10 | 45/453 | 20 | 70/363 | 38 | 44/117 | 10 | 1/10 | ||||||||||||||||||||||||||||||||||||
Janus Global Life Sciences Fund (12/98) | Health/Biotechnology Funds | 33 | 57/176 | 25 | 39/161 | 43 | 55/127 | N/A | N/A | 31 | 15/48 | ||||||||||||||||||||||||||||||||||||
Janus Global Technology Fund (12/98) | Science & Technology Funds | 33 | 94/292 | 43 | 113/265 | 58 | 132/230 | N/A | N/A | 23 | 17/76 | ||||||||||||||||||||||||||||||||||||
Janus Balanced Fund(1) (9/92) | Mixed-Asset Target Allocation Moderate Funds | 13 | 49/395 | 52 | 140/271 | 39 | 81/210 | 3 | 2/81 | 4 | 1/27 | ||||||||||||||||||||||||||||||||||||
Janus Contrarian Fund (2/00) | Multi-Cap Core Funds | 1 | 3/834 | 1 | 3/588 | 3 | 11/421 | N/A | N/A | 9 | 29/332 | ||||||||||||||||||||||||||||||||||||
Janus Core Equity Fund(1) (6/96) | Large-Cap Core Funds | 2 | 9/864 | 3 | 20/746 | 3 | 16/618 | N/A | N/A | 2 | 3/248 | ||||||||||||||||||||||||||||||||||||
Janus Growth and Income Fund(1) (5/91) | Large-Cap Core Funds | 5 | 35/864 | 9 | 65/746 | 15 | 90/618 | 3 | 5/240 | 6 | 5/96 | ||||||||||||||||||||||||||||||||||||
Janus Research Fund (2/05) | Multi-Cap Growth Funds | 8 | 31/423 | N/A | N/A | N/A | N/A | N/A | N/A | 7 | 26/410 | ||||||||||||||||||||||||||||||||||||
INTECH Risk-Managed Stock Fund (2/03) | Multi-Cap Core Funds | 58 | 483/834 | 22 | 129/588 | N/A | N/A | N/A | N/A | 26 | 150/586 | ||||||||||||||||||||||||||||||||||||
Janus Mid Cap Value Fund - Inv(1)(2) (8/98) | Mid-Cap Value Funds | 75 | 201/267 | 53 | 114/216 | 35 | 51/146 | N/A | N/A | 5 | 4/81 | ||||||||||||||||||||||||||||||||||||
Janus Small Cap Value Fund - Inv*(2) (10/87) | Small-Cap Core Funds | 97 | 612/633 | 91 | 456/504 | 65 | 243/373 | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||||
Janus Federal Tax-Exempt Fund (5/93) | General Municipal Debt Funds | 60 | 155/260 | 89 | 221/249 | 71 | 156/221 | 86 | 122/142 | 83 | 64/77 | ||||||||||||||||||||||||||||||||||||
Janus Flexible Bond Fund(1) (7/87) | Intermediate Investment Grade Debt Funds | 37 | 172/473 | 36 | 146/406 | 24 | 74/320 | 24 | 35/147 | 24 | 6/25 | ||||||||||||||||||||||||||||||||||||
Janus High-Yield Fund (12/95) | High Current Yield Funds | 38 | 164/439 | 72 | 276/385 | 55 | 169/311 | 9 | 10/111 | 3 | 3/104 | ||||||||||||||||||||||||||||||||||||
Janus Short-Term Bond Fund(1) (9/92) | Short Investment Grade Debt Funds | 30 | 68/228 | 21 | 38/181 | 49 | 63/129 | 20 | 13/66 | 43 | 11/25 | ||||||||||||||||||||||||||||||||||||
Janus Global Opportunities Fund(1) (6/01) | Global Funds | 100 | 360/362 | 54 | 154/286 | N/A | N/A | N/A | N/A | 23 | 50/224 | ||||||||||||||||||||||||||||||||||||
Janus Overseas Fund(1) (5/94) | International Funds | 1 | 2/910 | 1 | 2/770 | 19 | 114/599 | 4 | 8/230 | 2 | 2/120 | ||||||||||||||||||||||||||||||||||||
Janus Worldwide Fund(1) (5/91) | Global Funds | 94 | 339/362 | 98 | 279/286 | 99 | 217/220 | 68 | 56/82 | 28 | 5/17 |
(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.
Data presented represents past performance, which is no guarantee of future results.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe 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, 2006 3
Performance
Average Annual Total Return for the periods ended 4/30/06 | |||||||||||||||||||||||
ONE YEAR | THREE YEAR | FIVE YEAR | 10 YEAR | SINCE INCEPTION | |||||||||||||||||||
Fund/Index | |||||||||||||||||||||||
(Inception Date) | |||||||||||||||||||||||
Janus Fund (2/70) | 17.28 | % | 11.85 | % | (2.62 | )% | 6.67 | % | 13.86 | % | |||||||||||||
Janus Contrarian Fund(1)(2)(3) (2/00) | 38.81 | % | 31.63 | % | 10.68 | % | N/A | 9.63 | % | ||||||||||||||
Janus Core Equity Fund(3) (6/96) | 31.00 | % | 19.14 | % | 5.74 | % | N/A | 13.43 | % | ||||||||||||||
Janus Enterprise Fund (9/92) | 29.21 | % | 22.74 | % | 1.87 | % | 6.69 | % | 11.63 | % | |||||||||||||
Janus Growth and Income Fund (5/91) | 25.82 | % | 16.82 | % | 3.44 | % | 12.02 | % | 13.80 | % | |||||||||||||
Janus Mercury Fund (5/93) | 19.00 | % | 15.42 | % | (1.74 | )% | 8.56 | % | 12.70 | % | |||||||||||||
Janus Mid Cap Value Fund - Investor Shares(3)(4) (8/98) | 20.64 | % | 23.27 | % | 12.45 | % | N/A | 17.97 | % | ||||||||||||||
Janus Olympus Fund (12/95) | 26.44 | % | 16.83 | % | 0.45 | % | 9.78 | % | 11.77 | % | |||||||||||||
Janus Orion Fund(1)(5)(6)(7) (6/00) | 41.50 | % | 27.95 | % | 10.72 | % | N/A | (0.73 | )% | ||||||||||||||
Janus Small Cap Value Fund - Investor Shares* (10/87) | 20.30 | % | 20.76 | % | 10.80 | % | 15.60 | % | N/A | ||||||||||||||
Janus Twenty Fund*(4)(6) (4/85) | 24.20 | % | 19.02 | % | 2.05 | % | 10.70 | % | 13.48 | % | |||||||||||||
Janus Venture Fund*(8) (4/85) | 32.58 | % | 27.53 | % | 9.14 | % | 9.29 | % | 13.88 | % | |||||||||||||
INTECH Risk-Managed Stock Fund(3) (2/03) | 17.81 | % | 19.16 | % | N/A | N/A | 20.50 | % | |||||||||||||||
S&P 500® Index | 15.42 | % | 14.68 | % | 2.70 | % | 8.94 | % | N/A | ||||||||||||||
Russell 1000® Growth Index | 15.18 | % | 12.05 | % | (0.76 | )% | 6.21 | % | N/A |
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 average performance of Janus' U.S. equity funds over the past three years was calculated using the three-year total returns of the 13 funds contained in the performance chart above. The 13 funds reflected in the performance chart above are those which Janus categorizes as U.S. equity funds and which have performance histories of three or more years.
*Closed to new investors
(1)This Fund may have significant exposure to emerging markets. In general, emerging market investments have historically been subject to significant gains and/or losses. As such, the Fund's returns and NAV may be subject to such volatility.
(2)The Fund has experienced significant gains due, in part, to its investments in India. 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 India.
(3)The Fund will invest at least 80% of its net assets in the type of securities described by its name.
(4)Due to certain investment strategies, the Fund may have an increased position in cash.
(5)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.
(6)Returns have sustained significant gains due to market volatility in the healthcare sector.
(7)Returns have sustained significant gains due to market volatility in the financials sector.
(8)This Fund has been significantly impacted, either positively or negatively, by investing in initial public offerings (IPOs).
Total return includes reinvestment of dividends, distributions and capital gains.
A fund's performance may be affected by risks that include those associated with non-diversification, investments in foreign securities and emerging markets, non-investment grade debt securities, undervalued or overlooked companies, companies with relatively small market capitalizations and investments in specific industries or countries. Please see a Janus prospectus or janus.com for more information about fund holdings and details.
The proprietary mathematical process used by Enhanced Investment Technologies LLC ("INTECH") may not achieve the desired results. Since the portfolio is regularly 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.
There is no assurance that the investment process will consistently lead to successful investing.
Returns shown for Janus Mid Cap Value Fund prior to 4/21/03 are those of Berger Mid Cap Value Fund.
Returns shown for Janus Small Cap Value Fund prior to 4/21/03 are those of Berger Small Cap Value Fund.
Effective 2/1/06, Blaine Rollins is no longer the portfolio manager of Janus Fund, and David Corkins is now the Fund manager.
Effective 2/1/06, David Corkins is no longer the portfolio manager of Janus Mercury Fund. A research team now selects the investments for Janus Mercury Fund led by the Director of Research, Jim Goff.
Effective 2/28/06, Janus Risk-Managed Stock Fund changed its name to INTECH Risk-Managed Stock Fund.
Janus Capital Group Inc. has a 30% ownership stake in the investment advisory business of Perkins, Wolf, McDonnell and Company, LLC.
INTECH is a subsidiary of Janus Capital Group Inc.
A Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
The S&P 500® Index is the Standard & Poor's composite index of 500 stocks, a widely recognized, unmanaged index of common stock prices.
The Russell 1000® Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.
4 Janus Core, Risk-Managed and Value Funds April 30, 2006
Useful Information About Your Fund Report
Portfolio Manager Commentaries
The portfolio manager commentaries in this report include valuable insight from the portfolio 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 portfolio managers in their commentaries are just that: opinions. They are a reflection of their best judgment at the time this report was compiled, which was April 30, 2006. As the investing environment changes, so could their 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 Portfolio Manager 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 on an investment of $1,000 invested at the beginning of the period and held for the six-month period from November 1, 2005 to April 30, 2006.
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 for certain Funds, certain expenses to certain limits until at least March 1, 2007. 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 Core, Risk-Managed and Value Funds April 30, 2006 5
Janus Balanced Fund (unaudited)
Ticker: JABAX
Fund Snapshot
The fund combines the growth potential of stocks with the balance of bonds.
Marc Pinto
co-portfolio manager
Gibson Smith
co-portfolio manager
Performance Overview
Fueled by reports of healthy employment growth and steady consumer spending, the U.S. economy remained relatively strong during the six-month period ended April 30, 2006. In response, virtually every sector of the stock market moved higher.
Adding an element of uncertainty, however, were rising interest rates. Entering 2006, many investors expected the Federal Reserve Board (Fed), now led by chairman Ben Bernanke, to hold off on additional rate hikes. Instead, the potential for inflation persisted, and so did the Fed's tightening campaign. Mr. Bernanke seemed intent on sending a message to bond investors regarding his intent to take inflation concerns seriously. Additionally, the market witnessed a reduction in foreign demand for long-term U.S. Treasury bonds. Against this backdrop, bonds fared poorly, with the benchmark 10-year Treasury yield moving from 4.56% on October 31, 2005, to 5.07% on April 28, 2006, the period's final day of trading. As yields move inversely to bond prices, the rising rates indicated falling prices.
In this environment, an effective investment strategy on the fixed-income side of the Fund and strong stock selection on the equity side proved advantageous. Janus Balanced Fund advanced 8.67% during the period outpacing the internally calculated Balanced Index, a secondary benchmark for the Fund, which returned 5.29%. The Balanced Index is composed of a 55% weighting in the S&P 500® Index, the Fund's primary benchmark, and 45% weighting in the Lehman Brothers Government/Credit Index, the Fund's other secondary benchmark, which returned 9.64% and 0.13%, respectively.
Holdings that Contributed to Performance
Among the Fund's individual stock holdings, biotechnology concern Celgene led all gainers. Bolstered by growing sales of its Thalomid drug, which is prescribed by many doctors to treat multiple myeloma, a bone marrow-based cancer, the stock rallied anew in late December when the Food and Drug Administration (FDA) approved its Revlimid drug for treating myelodysplastic syndromes, a blood-borne cancer. Weeks later, the FDA announced that it had granted a priority review of the company's application for Revlimid to treat multiple myeloma, and a decision was expected by the end of June.
Elsewhere, the financial services group enjoyed a bounce during the period as investors reasoned that the Fed was at least nearing the end of its rate-hike campaign. Additionally, investment banks profited from increased merger and acquisition activity and the Fund benefited from its stake in Wall Street stalwarts Merrill Lynch and JPMorgan Chase. Aside from the increased volumes of corporate deals, Merrill Lynch enhanced returns with improved trading in its brokerage business and strong overseas performance, while JPMorgan Chase advanced amid Wall Street's consensus that new CEO James Dimon would significantly improve operations at all levels.
Although our technology holdings lagged their counterparts in the S&P 500® Index as a group, there were some names that bucked this trend. Among these was Research in Motion (RIM), a leader in wireless communications and developer of the popular BlackBerry device. During the period, the company settled a patent dispute with rival NTP. Many businesses had previously refrained from signing contracts with RIM while it was mired in litigation – a situation that has been remedied in the wake of the settlement. We believe that RIM can now take full advantage of the strong demand for wireless data services.
In light of the volatility in the automotive space, we were pleased with the performance of high-yield issuer General Motors Acceptance Corporation (GMAC), a holding within the Fund's fixed-income portion. GMAC is the financing arm of General Motors, which has raised concerns for a number of quarters due to persistent earnings losses. However, during the first quarter of 2006, private equity firm Cerberus Capital Management said it plans to purchase control of GMAC. We believe this sale should behoove GMAC in several ways. First, the company will be able to escape the shadow of General Motors' credit problems, which in turn, will facilitate GMAC's ability to raise capital at a better rate, in our opinion. Once these issues have been resolved, we believe GMAC may be in position to capitalize on its strong presence in the automotive, mortgage and unsecured consumer lending businesses.
Holdings that Detracted from Performance
A slump in health insurers Aetna and UnitedHealth Group hindered the Fund's performance. Aetna actually posted the period's worst performance as concerns over increasing cost trends aggravated a selloff that followed an impressive run through 2005. First quarter profit-taking also pulled down
6 Janus Core, Risk-Managed and Value Funds April 30, 2006
(unaudited)
UnitedHealth, as well as a controversial executive compensation plan. Still encouraged by the group's long-term prospects, we're carefully assessing the situation at both Aetna and UnitedHealth.
Also proving detrimental was the Fund's exposure to Internet service companies Yahoo! and Expedia. While Yahoo!'s results disappointed some investors, Expedia battled increased competition in the online travel industry.
On the fixed-income side of the equation, we scaled back our corporate credit exposure and added to the Fund's weighting in Treasury securities, a tactic designed to add stability to the Fund. Unfortunately, this strategy left us vulnerable to the sharp downward correction in longer-term Treasury bonds toward the end of the period.
Looking ahead
Our outlook at this time is generally positive, mainly because we believe the Fed's tightening cycle may be finally winding down and the economy appears to be fairly robust. We believe it should remain on course, barring another shock in the energy market or a widespread decline in the housing market.
Regardless of the broader trends, our approach to investing in equities remains true to our long-standing strategy. By focusing on companies that combine stable earning potential with the ability to expand top-line revenue growth, we believe we're exposing Fund shareholders to stocks that hold solid promise for appreciation.
On the fixed-income side, individual bond selection continues to be increasingly important, as we see numerous credit situations that present more downside risk than upside potential. In comparison, equities' valuations remain attractive, especially considering the likely increase in risk appetites once the Fed ends its rate-hike campaign.
In both the bond and stock markets we will continue to search for opportunities in an attempt to build a diversified Fund able to navigate a variety of market environments.
Thank you for your continued investment in Janus Balanced Fund.
Janus Balanced Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Celgene Corp. Biopharmaceutical company - U.S. | 1.06% | ||||||
Merrill Lynch & Company, Inc. Investment banking services - U.S. | 0.95% | ||||||
JP Morgan Chase & Co. Global financial services company - U.S. | 0.93% | ||||||
Suncor Energy, Inc. Energy company - Canada | 0.93% | ||||||
Marriott International, Inc. - Class A Worldwide hotel operator and franchisor - U.S. | 0.69% |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Aetna, Inc. Healthcare and related benefits provider - U.S. | (0.48%) | ||||||
Yahoo!, Inc. Global Internet media company - U.S. | (0.32%) | ||||||
Caremark Rx, Inc. Pharmaceutical services provider - U.S. | (0.20%) | ||||||
UnitedHealth Group, Inc. Organized health systems company - U.S. | (0.11%) | ||||||
Alcon, Inc. (U.S. Shares) Eye care company - U.S. | (0.10%) |
5 Largest Contributors to Performance – Sectors
Group | Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | ||||||||||||
Diversified Financial Services | 2.08 | % | 10.70 | % | 8.08 | % | |||||||||
Energy | 1.96 | % | 10.31 | % | 9.65 | % | |||||||||
Consumer Services | 1.92 | % | 6.54 | % | 1.65 | % | |||||||||
Pharmaceuticals & Biotechnology | 1.90 | % | 11.21 | % | 7.88 | % | |||||||||
Semiconductors & Semiconductor Equipment | 1.36 | % | 6.10 | % | 3.15 | % |
5 Lowest Contributors/Detractors to Performance – Sectors
Group | Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | ||||||||||||
Healthcare Equipment & Services | (0.94 | %) | 6.81 | % | 5.17 | % | |||||||||
Consumer Durables & Apparel | (0.02 | %) | 0.75 | % | 1.31 | % | |||||||||
Food, Beverage & Tobacco | (0.01 | %) | 2.06 | % | 4.61 | % | |||||||||
Other* | (0.01 | %) | 0.01 | % | 0.00 | % | |||||||||
Utilities | 0.00 | % | 0.00 | % | 3.30 | % |
* Industry not classified by Global Industry Classification Standard.
Janus Core, Risk-Managed and Value Funds April 30, 2006 7
Janus Balanced Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2006 | |||||||
Merrill Lynch & Company, Inc. Finance - Investment Bankers/Brokers | 3.5 | % | |||||
Exxon Mobil Corp. Oil Companies - Integrated | 3.2 | % | |||||
General Electric Co. Diversified Operations | 2.7 | % | |||||
Roche Holding A.G. Medical - Drugs | 2.7 | % | |||||
JP Morgan Chase & Co. Finance - Investment Bankers/Brokers | 2.6 | % | |||||
14.7 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2006 |
Emerging markets comprised 1.3% of total net assets.
5 Largest Country Allocations – (% of Investment Securities)
As of April 30, 2006 | As of October 31, 2005 | ||||||
![]() | ![]() | ||||||
8 Janus Core, Risk-Managed and Value Funds April 30, 2006
(unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | |||||||||||||||||||
Janus Balanced Fund | 8.67 | % | 15.06 | % | 4.73 | % | 10.19 | % | 11.33 | % | |||||||||||||
S&P 500® Index | 9.64 | % | 15.42 | % | 2.70 | % | 8.94 | % | 10.85 | % | |||||||||||||
Lehman Brothers Government/ Credit Index | 0.13 | % | 0.20 | % | 5.32 | % | 6.36 | % | 6.36 | % | |||||||||||||
Balanced Index | 5.29 | % | 8.39 | % | 4.19 | % | 8.14 | % | 9.10 | % | |||||||||||||
Lipper Quartile | N/A | 1 | st | 2 | nd | 1 | st | 1 | st | ||||||||||||||
Lipper Ranking - based on total return for Mixed Asset Target Allocation Moderate Funds | N/A** | 49/395 | 81/210 | 2/81 | 1/27 |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes 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.
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.
*The Fund's inception date – September 1, 1992
**The Fund's fiscal year-to-date Lipper ranking is not available.
See "Explanations of Charts, Tables and Financial Statements."
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 Funds. The return 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.
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.
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,086.70 | $ | 4.19 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.78 | $ | 4.06 |
*Expenses are equal to the annualized expense ratio of 0.81%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Janus Core, Risk-Managed and Value Funds April 30, 2006 9
Janus Balanced Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Common Stock - 65.3% | |||||||||||
Advertising Sales - 0.7% | |||||||||||
336,670 | Lamar Advertising Co.* | $ | 18,513,483 | ||||||||
Aerospace and Defense - 1.1% | |||||||||||
378,200 | Lockheed Martin Corp. | 28,705,380 | |||||||||
Agricultural Chemicals - 1.8% | |||||||||||
196,616 | Syngenta A.G.* | 27,426,679 | |||||||||
651,605 | Syngenta A.G. (ADR)*,# | 18,101,587 | |||||||||
45,528,266 | |||||||||||
Automotive - Cars and Light Trucks - 0.7% | |||||||||||
321,949 | BMW A.G.** | 17,526,367 | |||||||||
Beverages - Non-Alcoholic - 1.2% | |||||||||||
522,930 | PepsiCo, Inc. | 30,455,443 | |||||||||
Building - Residential and Commercial - 0.5% | |||||||||||
358,525 | Pulte Homes, Inc.# | 13,390,909 | |||||||||
Casino Hotels - 1.2% | |||||||||||
359,405 | Harrah's Entertainment, Inc. | 29,341,824 | |||||||||
Computers - 0.9% | |||||||||||
292,095 | Research In Motion, Ltd. (U.S. Shares)* | 22,383,240 | |||||||||
Computers - Memory Devices - 0.8% | |||||||||||
1,435,265 | EMC Corp.* | 19,390,430 | |||||||||
Cosmetics and Toiletries - 1.7% | |||||||||||
757,385 | Procter & Gamble Co. | 44,087,381 | |||||||||
Dental Supplies and Equipment - 0.3% | |||||||||||
224,515 | Patterson Companies, Inc.*,# | 7,314,699 | |||||||||
Diversified Operations - 4.6% | |||||||||||
2,021,355 | General Electric Co. | 69,918,670 | |||||||||
512,840 | Honeywell International, Inc. | 21,795,700 | |||||||||
3,431,000 | Melco International Development, Ltd. | 7,721,996 | |||||||||
675,495 | Tyco International, Ltd. (U.S. Shares) | 17,799,293 | |||||||||
117,235,659 | |||||||||||
E-Commerce/Services - 1.2% | |||||||||||
1,061,914 | IAC/InterActiveCorp* | 30,657,457 | |||||||||
Electronic Components - Semiconductors - 3.8% | |||||||||||
449,200 | Advanced Micro Devices, Inc.* | 14,531,620 | |||||||||
48,038 | Samsung Electronics Company, Ltd.** | 32,799,483 | |||||||||
1,395,100 | Texas Instruments, Inc.# | 48,423,921 | |||||||||
95,755,024 | |||||||||||
Enterprise Software/Services - 0.8% | |||||||||||
1,359,695 | Oracle Corp.* | 19,837,950 | |||||||||
Finance - Credit Card - 1.1% | |||||||||||
540,845 | American Express Co. | 29,102,869 | |||||||||
Finance - Investment Bankers/Brokers - 6.5% | |||||||||||
1,458,480 | JP Morgan Chase & Co. | 66,185,822 | |||||||||
1,176,740 | Merrill Lynch & Company, Inc. | 89,738,192 | |||||||||
112,215 | UBS A.G. (ADR) | 13,112,323 | |||||||||
169,036,337 | |||||||||||
Finance - Mortgage Loan Banker - 1.0% | |||||||||||
492,670 | Fannie Mae | 24,929,102 | |||||||||
Hotels and Motels - 2.3% | |||||||||||
558,970 | Marriott International, Inc. - Class A# | 40,843,938 | |||||||||
321,405 | Starwood Hotels & Resorts Worldwide, Inc. | 18,442,219 | |||||||||
59,286,157 |
Shares or Principal Amount | Value | ||||||||||
Medical - Biomedical and Genetic - 2.0% | |||||||||||
1,197,160 | Celgene Corp.* | $ | 50,472,266 | ||||||||
Medical - Drugs - 4.5% | |||||||||||
204,695 | Eli Lilly and Co.# | 10,832,459 | |||||||||
128,895 | Forest Laboratories, Inc.*,# | 5,204,780 | |||||||||
447,130 | Roche Holding A.G. | 68,753,178 | |||||||||
24,710 | Roche Holding A.G. (ADR) | 1,902,670 | |||||||||
285,079 | Sanofi-Aventis** | 26,884,406 | |||||||||
113,577,493 | |||||||||||
Medical - HMO - 2.0% | |||||||||||
1,080,710 | Aetna, Inc. | 41,607,335 | |||||||||
194,870 | UnitedHealth Group, Inc. | 9,692,834 | |||||||||
51,300,169 | |||||||||||
Medical Instruments - 0.4% | |||||||||||
449,030 | Boston Scientific Corp.* | 10,435,457 | |||||||||
Medical Products - 0.8% | |||||||||||
334,785 | Johnson & Johnson | 19,621,749 | |||||||||
Networking Products - 0.5% | |||||||||||
618,865 | Cisco Systems, Inc.* | 12,965,222 | |||||||||
Oil Companies - Exploration and Production - 1.2% | |||||||||||
628,635 | EnCana Corp. (U.S. Shares) | 31,463,182 | |||||||||
Oil Companies - Integrated - 6.0% | |||||||||||
491,025 | BP PLC (ADR)** | 36,198,363 | |||||||||
1,278,395 | Exxon Mobil Corp. | 80,641,156 | |||||||||
429,544 | Suncor Energy, Inc. | 36,782,382 | |||||||||
153,621,901 | |||||||||||
Optical Supplies - 0.4% | |||||||||||
109,840 | Alcon, Inc. (U.S. Shares) | 11,171,826 | |||||||||
Pharmacy Services - 0.8% | |||||||||||
429,005 | Caremark Rx, Inc. | 19,541,178 | |||||||||
REIT - Hotels - 0.2% | |||||||||||
196,764 | Host Marriott Corp. | 4,135,979 | |||||||||
Retail - Building Products - 0.9% | |||||||||||
586,065 | Home Depot, Inc. | 23,401,575 | |||||||||
Retail - Regional Department Stores - 1.6% | |||||||||||
531,985 | Federated Department Stores, Inc. | 41,415,032 | |||||||||
Semiconductor Components/Integrated Circuits - 0.2% | |||||||||||
176,625 | Linear Technology Corp.# | 6,270,188 | |||||||||
Soap and Cleaning Preparations - 1.2% | |||||||||||
858,395 | Reckitt Benckiser PLC** | 31,290,922 | |||||||||
Super-Regional Banks - 0.9% | |||||||||||
444,880 | Bank of America Corp. | 22,208,410 | |||||||||
Telecommunication Equipment - Fiber Optics - 1.1% | |||||||||||
974,945 | Corning, Inc.* | 26,937,730 | |||||||||
Therapeutics - 0.8% | |||||||||||
357,765 | Gilead Sciences, Inc.* | 20,571,488 | |||||||||
Tobacco - 0.4% | |||||||||||
133,850 | Altria Group, Inc. | 9,792,466 | |||||||||
Transportation - Railroad - 3.0% | |||||||||||
1,135,734 | Canadian National Railway Co. (U.S. Shares) | 51,005,814 | |||||||||
276,695 | Union Pacific Corp. | 25,237,351 | |||||||||
76,243,165 | |||||||||||
Transportation - Services - 0.5% | |||||||||||
109,200 | FedEx Corp. | 12,572,196 |
See Notes to Schedules of Investments and Financial Statements.
10 Janus Core, Risk-Managed and Value Funds April 30, 2006
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Web Portals/Internet Service Providers - 2.4% | |||||||||||
55,400 | Google, Inc. - Class A* | $ | 23,153,876 | ||||||||
1,128,915 | Yahoo!, Inc.* | 37,005,834 | |||||||||
60,159,710 | |||||||||||
Wireless Equipment - 1.3% | |||||||||||
1,532,055 | Motorola, Inc. | 32,709,374 | |||||||||
Total Common Stock (cost $1,212,716,498) | 1,664,356,655 | ||||||||||
Corporate Bonds - 9.9% | |||||||||||
Aerospace and Defense - 0.1% | |||||||||||
$ | 3,162,000 | Lockheed Martin Corp., 7.65% company guaranteed notes, due 5/1/16 | 3,572,668 | ||||||||
Automotive - Cars and Light Trucks - 0.1% | |||||||||||
2,770,000 | General Motors Nova Financial Corp., 6.85% company guaranteed notes, due 10/15/08 | 2,326,800 | |||||||||
Automotive - Truck Parts and Equipment - Original - 0.1% | |||||||||||
2,723,194 | Lear Corp., 0% bank loan, due 4/25/12‡ | 2,726,598 | |||||||||
Beverages - Non-Alcoholic - 0.2% | |||||||||||
4,385,000 | Pepsi Bottling Holdings, Inc., 5.625% company guaranteed notes due 2/17/09 (144A) | 4,417,392 | |||||||||
Brewery - 0.5% | |||||||||||
Miller Brewing Co.: | |||||||||||
8,530,000 | 4.25%, notes, due 8/15/08 (144A)** | 8,311,692 | |||||||||
4,960,000 | 5.50%, notes, due 8/15/13 (144A) | 4,848,018 | |||||||||
13,159,710 | |||||||||||
Cable Television - 0.2% | |||||||||||
CSC Holdings, Inc.: | |||||||||||
1,621,153 | 6.74%, bank loan, due 3/30/13‡ | 1,626,778 | |||||||||
2,431,729 | 6.67%, bank loan, due 3/30/13‡ | 2,440,168 | |||||||||
1,621,153 | 6.58%, bank loan, due 3/30/13‡ | 1,626,778 | |||||||||
5,693,724 | |||||||||||
Casino Hotels - 0.3% | |||||||||||
8,195,000 | Mandalay Resort Group, 6.50% senior notes, due 7/31/09 | 8,143,781 | |||||||||
Cellular Telecommunications - 0.3% | |||||||||||
6,920,000 | Nextel Communications, Inc., 6.875% senior notes, due 10/31/13 | 7,102,591 | |||||||||
Chemicals - Specialty - 0.3% | |||||||||||
8,480,000 | International Flavors & Fragrances, Inc. 6.45%, notes, due 5/15/06 | 8,482,273 | |||||||||
Commercial Banks - 0.2% | |||||||||||
5,490,000 | US Bank, 5.70% subordinated notes, due 12/15/08 | 5,538,279 | |||||||||
Consumer Products - Miscellaneous - 0.2% | |||||||||||
Fortune Brands, Inc.: | |||||||||||
1,763,000 | 4.875%, notes, due 12/1/13 | 1,644,819 | |||||||||
3,567,000 | 5.375%, notes, due 1/15/16 | 3,376,879 | |||||||||
5,021,698 | |||||||||||
Containers - Metal and Glass - 0.7% | |||||||||||
10,246,000 | Owens-Brockway Glass Container, Inc. 8.875%, company guaranteed notes due 2/15/09 | 10,655,840 | |||||||||
7,945,000 | Owens-Illinois, Inc., 7.35% senior notes, due 5/15/08 | 7,984,725 | |||||||||
18,640,565 |
Shares or Principal Amount | Value | ||||||||||
Dialysis Centers - 0.3% | |||||||||||
Fresenius Medical Care AG & Co.: | |||||||||||
$ | 4,295,933 | 6.4031%, bank loan, due 3/31/11‡ | $ | 4,294,129 | |||||||
1,861,571 | 6.3544%, bank loan, due 3/31/11‡ | 1,860,789 | |||||||||
1,002,384 | 6.3544%, bank loan, due 3/31/11‡ | 1,001,963 | |||||||||
7,156,881 | |||||||||||
Diversified Financial Services - 0.2% | |||||||||||
3,815,000 | General Electric Capital Corp., 6.75% notes, due 3/15/32 | 4,119,540 | |||||||||
Diversified Operations - Commercial Services - 0.1% | |||||||||||
3,629,730 | Avis Rent A Car Systems, Inc., 0% bank loan, due 4/1/13‡ | 3,628,423 | |||||||||
Electric - Integrated - 0.8% | |||||||||||
2,535,000 | CMS Energy Corp., 7.50% senior notes, due 1/15/09 | 2,595,206 | |||||||||
9,070,000 | MidAmerican Energy Holdings Co., 3.50% senior notes, due 5/15/08 | 8,723,671 | |||||||||
Pacific Gas and Electric Co.: | |||||||||||
770,000 | 3.60%, unsecured notes, due 3/1/09 | 732,915 | |||||||||
2,640,000 | 4.20%, unsecured notes, due 3/1/11 | 2,487,273 | |||||||||
TXU Corp.: | |||||||||||
5,485,000 | 5.55%, senior notes, due 11/15/14 | 5,097,057 | |||||||||
1,823,000 | 6.55%, notes, due 11/15/34 | 1,636,905 | |||||||||
21,273,027 | |||||||||||
Electronic Components - Semiconductors - 0.3% | |||||||||||
2,399,000 | Advanced Micro Devices, Inc., 7.75% senior notes, due 11/1/12 | 2,512,953 | |||||||||
5,395,000 | Freescale Semiconductor, Inc., 7.35% senior notes, due 7/15/09‡ | 5,516,387 | |||||||||
8,029,340 | |||||||||||
Electronic Parts Distributors - 0.2% | |||||||||||
5,710,000 | Avnet, Inc., 6.00% notes, due 9/1/15 | 5,443,018 | |||||||||
Finance - Auto Loans - 0.5% | |||||||||||
7,737,000 | Ford Motor Credit Co., 0% notes, due 4/15/12‡ | 7,745,566 | |||||||||
General Motors Acceptance Corp.: | |||||||||||
2,485,000 | 6.15%, bonds, due 4/5/07 | 2,438,744 | |||||||||
3,905,000 | 4.375%, notes, due 12/10/07 | 3,673,187 | |||||||||
13,857,497 | |||||||||||
Finance - Consumer Loans - 0.3% | |||||||||||
7,315,000 | Household Finance Corp., 4.75% notes, due 5/15/09 | 7,171,348 | |||||||||
Finance - Investment Bankers/Brokers - 1.0% | |||||||||||
10,541,000 | Citigroup, Inc., 5.00% subordinated notes, due 9/15/14 | 9,983,466 | |||||||||
9,415,000 | Credit Suisse First Boston USA, Inc., 3.875% notes, due 1/15/09 | 9,065,986 | |||||||||
7,640,000 | JP Morgan Chase & Co., 3.80% notes, due 10/2/09 | 7,250,177 | |||||||||
26,299,629 | |||||||||||
Food - Diversified - 0.3% | |||||||||||
7,085,000 | Kellogg Co., 2.875% senior notes, due 6/1/08 | 6,731,211 | |||||||||
Gas - Distribution - 0.1% | |||||||||||
1,900,000 | Colorado Interstate Gas Co., 6.80% senior notes, due 11/15/15 (144A) | 1,901,381 |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2006 11
Janus Balanced Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Medical - HMO - 0.1% | |||||||||||
$ | 3,145,000 | UnitedHealth Group, Inc., 5.20% senior unsecured notes, due 1/17/07 | $ | 3,142,229 | |||||||
Non-Hazardous Waste Disposal - 0.1% | |||||||||||
Allied Waste North America, Inc.: | |||||||||||
592,859 | 0%, bank loan, due 4/1/13‡ | 594,714 | |||||||||
1,675,536 | 0%, bank loan, due 4/1/13‡ | 1,680,027 | |||||||||
2,274,741 | |||||||||||
Pipelines - 0.7% | |||||||||||
El Paso Corp.: | |||||||||||
1,285,000 | 7.625%, notes, due 9/1/08 (144A)§ | 1,307,488 | |||||||||
14,800,000 | 7.00%, senior notes, due 5/15/11 | 14,763,000 | |||||||||
851,000 | 7.42%, notes, due 2/15/37 (144A)§ | 803,131 | |||||||||
16,873,619 | |||||||||||
Retail - Major Department Stores - 0.2% | |||||||||||
4,630,000 | May Department Stores Co., 4.80% notes, due 7/15/09 | 4,531,742 | |||||||||
Retail - Regional Department Stores - 0.1% | |||||||||||
1,983,228 | Neiman Marcus Group, Inc., 7.34% bank loan, due 3/13/13‡ | 2,008,732 | |||||||||
Special Purpose Entity - 0.4% | |||||||||||
9,005,000 | Resona Preferred Securities, Ltd., 7.191% bonds, due 12/29/49 (144A)‡ | 9,257,968 | |||||||||
Telecommunication Services - 0.4% | |||||||||||
10,315,000 | Verizon Global Funding Corp., 4.00% senior unsecured notes, due 1/15/08 | 10,081,118 | |||||||||
Telephone - Integrated - 0.2% | |||||||||||
4,600,000 | Sprint Capital Corp., 8.375% notes, due 3/15/12 | 5,171,959 | |||||||||
Textile-Home Furnishings - 0.1% | |||||||||||
2,468,000 | Mohawk Industries, Inc., 6.125% senior unsecured notes, due 1/15/16 | 2,424,469 | |||||||||
Transportation - Railroad - 0.3% | |||||||||||
1,134,000 | BNSF Funding Trust I, 6.613% company guaranteed notes, due 12/15/55‡ | 1,089,758 | |||||||||
Canadian National Railway Co.: | |||||||||||
1,910,000 | 4.25%, notes, due 8/1/09 | 1,845,895 | |||||||||
3,825,000 | 6.25%, bonds, due 8/1/34 | 3,903,978 | |||||||||
6,839,631 | |||||||||||
Total Corporate Bonds (cost $256,377,450) | 253,043,582 | ||||||||||
Mortgage Backed Securities - 0.6% | |||||||||||
U.S. Government Agency - 0.6% | |||||||||||
14,998,988 | Federal Home Loan Bank System, 5.27% due 12/28/12 (cost $15,081,743) | 14,815,601 | |||||||||
U.S. Government Agencies - 1.7% | |||||||||||
Fannie Mae: | |||||||||||
13,445,000 | 5.00%, due 1/15/07 | 13,423,353 | |||||||||
6,400,000 | 3.25%, due 11/15/07 | 6,221,542 | |||||||||
2,580,000 | 2.50%, due 6/15/08 | 2,444,852 | |||||||||
4,110,000 | 5.25%, due 1/15/09 | 4,119,926 | |||||||||
880,000 | 6.375%, due 6/15/09 | 910,459 | |||||||||
6,723,000 | 5.375%, due 11/15/11 | 6,746,443 | |||||||||
Freddie Mac: | |||||||||||
5,270,000 | 5.75%, due 4/15/08 | 5,329,709 | |||||||||
2,155,000 | 5.75%, due 3/15/09 | 2,188,392 | |||||||||
2,040,000 | 7.00%, due 3/15/10 | 2,165,809 | |||||||||
Total U.S. Government Agencies (cost $44,614,806) | 43,550,485 |
Shares or Principal Amount | Value | ||||||||||
U.S. Treasury Notes/Bonds - 21.0% | |||||||||||
U.S. Treasury Notes: | |||||||||||
$ | 4,555,000 | 2.375%, due 8/15/06# | $ | 4,522,081 | |||||||
4,993,000 | 3.50%, due 11/15/06# | 4,953,995 | |||||||||
15,375,000 | 3.00%, due 12/31/06# | 15,176,201 | |||||||||
51,025,000 | 3.625%, due 4/30/07# | 50,375,247 | |||||||||
9,469,000 | 3.875%, due 7/31/07# | 9,349,899 | |||||||||
1,860,000 | 4.00%, due 9/30/07# | 1,837,185 | |||||||||
11,062,411 | 3.625%, due 1/15/08ÇÇ,# | 11,397,303 | |||||||||
17,033,000 | 3.375%, due 2/15/08# | 16,595,201 | |||||||||
15,625,000 | 5.625%, due 5/15/08# | 15,847,781 | |||||||||
11,593,000 | 3.75%, due 5/15/08# | 11,343,032 | |||||||||
16,985,000 | 4.375%, due 11/15/08# | 16,779,991 | |||||||||
6,016,000 | 4.50%, due 2/15/09# | 5,956,779 | |||||||||
19,705,000 | 3.125%, due 4/15/09# | 18,762,076 | |||||||||
20,882,000 | 6.00%, due 8/15/09# | 21,578,603 | |||||||||
25,079,000 | 4.00%, due 4/15/10# | 24,269,801 | |||||||||
10,818,000 | 3.625%, due 6/15/10# | 10,308,375 | |||||||||
9,169,000 | 3.875%, due 7/15/10# | 8,815,847 | |||||||||
4,960,000 | 5.75%, due 8/15/10# | 5,121,587 | |||||||||
3,140,000 | 4.125%, due 8/15/10# | 3,045,555 | |||||||||
6,970,000 | 4.25%, due 10/15/10# | 6,785,678 | |||||||||
28,215,000 | 4.50%, due 11/15/10# | 27,744,374 | |||||||||
3,945,000 | 4.375%, due 12/15/10# | 3,856,699 | |||||||||
24,702,000 | 4.50%, due 2/28/11# | 24,250,423 | |||||||||
46,851,000 | 4.75%, due 3/31/11# | 46,481,299 | |||||||||
21,267,000 | 5.00%, due 8/15/11# | 21,350,069 | |||||||||
13,454,000 | 4.25%, due 8/15/14# | 12,741,355 | |||||||||
25,196,600 | 1.875%, due 7/15/15ÇÇ,# | 24,189,719 | |||||||||
21,665,000 | 4.25%, due 8/15/15# | 20,371,015 | |||||||||
18,703,000 | 4.50%, due 2/15/16# | 17,887,661 | |||||||||
16,055,000 | 7.25%, due 5/15/16# | 18,711,605 | |||||||||
13,030,000 | 7.875%, due 2/15/21# | 16,460,551 | |||||||||
12,284,000 | 7.25%, due 8/15/22# | 14,867,473 | |||||||||
14,852,000 | 6.00%, due 2/15/26# | 16,087,731 | |||||||||
6,017,000 | 5.375%, due 2/15/31# | 6,107,255 | |||||||||
2,243,000 | 4.50%, due 2/15/36# | 2,015,721 | |||||||||
Total U.S. Treasury Notes/Bonds (cost $546,371,273) | 535,945,167 | ||||||||||
Other Securities - 18.8% | |||||||||||
480,667,249 | State Street Navigator Securities Lending Prime Portfolio† (cost $480,667,249) | 480,667,249 | |||||||||
Time Deposit - 1.0% | |||||||||||
$ | 25,100,000 | ING Financial, ETD, 4.86%, 5/1/06 (cost $25,100,000) | 25,100,000 | ||||||||
Total Investments (total cost $2,580,929,019) – 118.3% | 3,017,478,739 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (18.3)% | (467,049,732 | ) | |||||||||
Net Assets – 100% | $ | 2,550,429,007 |
See Notes to Schedules of Investments and Financial Statements.
12 Janus Core, Risk-Managed and Value Funds April 30, 2006
Schedule of Investments (unaudited)
As of April 30, 2006
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Bermuda | $ | 17,799,293 | 0.6 | % | |||||||
Canada | 149,711,291 | 4.9 | % | ||||||||
Cayman Islands | 9,257,968 | 0.3 | % | ||||||||
France | 26,884,406 | 0.9 | % | ||||||||
Germany | 17,526,367 | 0.6 | % | ||||||||
Hong Kong | 7,721,996 | 0.3 | % | ||||||||
South Korea | 32,799,483 | 1.1 | % | ||||||||
Switzerland | 140,468,263 | 4.7 | % | ||||||||
United Kingdom | 67,489,285 | 2.2 | % | ||||||||
United States†† | 2,547,820,387 | 84.4 | % | ||||||||
Total | $ | 3,017,478,739 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (67.7% excluding Short-Term Securities and Other Securities)
Forward Currency Contracts, Open
Currency Sold and Settlement Date | Currency Units Sold | Currency Value in $ U.S. | Unrealized Gain/(Loss) | ||||||||||||
British Pound 6/28/06 | 14,775,000 | $ | 26,961,630 | $ | (958,758 | ) | |||||||||
British Pound 8/10/06 | 1,275,000 | 2,328,276 | (112,824 | ) | |||||||||||
British Pound 10/19/06 | 2,750,000 | 5,027,484 | (104,682 | ) | |||||||||||
Euro 6/28/06 | 15,700,000 | 19,881,934 | (556,818 | ) | |||||||||||
South Korean Won 8/10/06 | 4,500,000,000 | 4,790,394 | (179,502 | ) | |||||||||||
South Korean Won 10/19/06 | 2,200,000,000 | 2,347,218 | (12,381 | ) | |||||||||||
Total | $ | 61,336,936 | $ | (1,924,965 | ) |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2006 13
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
portfolio manager
Performance Overview
I would like to thank you for your continued investment in Janus Contrarian Fund. During the six-month period ended April 30, 2006, the Fund returned 20.53% compared to a gain of 9.64% for the S&P 500® Index, the Fund's benchmark.
Investment Philosophy and Process
In an ongoing effort to explain the philosophy and process of Janus Contrarian Fund through these letters, I thought I would explain it this time in the context of a few investment decisions we made during the period.
Janus Contrarian Fund is constructed to have the stocks with the least expected downside at the top of the portfolio rather than the stocks with the most upside. This may seem counter-intuitive, but the process is to identify companies that have an asymmetrically positive risk/reward profile, which is to say companies that we believe have substantially less downside risk than upside potential. Because we are focused on downside risk, we endeavor to build the portfolio such that the largest positions in the Fund have the lowest risk for severe downside. We obviously won't always be right, but we believe the approach on average will help preserve capital in a difficult market. In order to build such a portfolio, it is quite common for us to build positions as the stock price falls (and conversel y reduce positions as the stock price increases). I firmly believe that if we are comfortable with the intrinsic value of a company, if the market offers us the same company for a lower price, we should be a buyer, not a seller. This is not to say we ignore the market; indeed the market is very efficient. However, often market values will come under pressure for reasons that may not be germane to the underlying fundamentals of a company. In these situations, we will continue to build our position.
At the end of the period, the largest position in the Fund was Liberty Global, an international cable company with operations primarily in Europe and Japan. Media distribution has been a very difficult sector globally for the past few years as investors question the future return on invested capital (ROIC) in a much more competitive pricing environment. While I agree with this concern in more mature markets for media distribution, such as the U.S., the markets in which Liberty Global has been growing, such as Eastern Europe, are much less mature and therefore less competitive. Interestingly, the private market value for European cable assets has been higher than the public market value for Liberty Global's assets, which has provided the company the opportunity to monetize non-strategic assets at very attractive prices. We believe the reduction in Liberty Global's stock price has been excessive and we chose to substantially increase the position size during the period.
When buying stocks for Janus Contrarian Fund, I often look for companies with the opportunity to improve its return on invested capital (ROIC). ROIC is a reflection of a company's ability to create value for shareholders. There is a strong relationship between value creation and improving returns on capital, and we are therefore always looking for companies that understand that continued value creation in the company is dependent on its ability to improve, or at a minimum maintain, it's ROIC. This is important because earnings growth alone will not necessarily create value. In fact, if the return on that earnings growth is low, growth will destroy, rather than increase value. This is the primary reason that in building the Fund's portfolio, we spend much less time thinking about earnings growt h than we do about ROIC and free cash flow growth.
An example of this is a new position we built in Owens-Illinois (OI), the Toledo, OH manufacturer of glass bottles. Glass bottle manufacturing is not a high growth business but the company is focusing hard on reducing its cost structure and improving its return on invested capital. Despite good progress, a spike in raw material prices has masked the improvement, which has resulted in a series of earnings disappointments causing the stock to suffer. We believe that the improvement in the underlying fundamentals of the business is not well understood because improvement in ROIC, which OI is already demonstrating despite cost increases, tends to lead rather than follow earnings improvement. We are confident that despite this difficult environment, OI is focused on shareholder value and its stock price will ultimately reflect this.
In past letters I have discussed how we sometimes reduce positions too early, as was clearly the case with Apple. However, because the philosophy of the Fund centers on asymmetric risk/reward, I would prefer to sell too early and reinvest in another low risk opportunity than to sell too late.
A focus on downside risk led us to substantially reduce the position in Advanced Micro Devices (AMD – up 39.32% in the period) following a significant increase in the stock price. When we first began purchasing AMD in the single digits, we
14 Janus Core, Risk-Managed and Value Funds April 30, 2006
(unaudited)
believed that the market value of the company reflected excessive concern about its then competitive position with Intel. AMD has in fact done an outstanding job of improving its competitive position, and its stock price has reacted very positively. However, risks always remain, and we decided that the upside potential did not compensate for the downside risk, and we therefore decided to reduce the position.
International Investments
I thought I would spend a few moments updating the positions in India as well as some of the other international positions that in aggregate make up almost 42% of Janus Contrarian Fund's total net assets. As I have discussed in the past, our approach to investing in India is no different than our approach to investing anywhere else in the world: to capitalize on high quality companies with excellent growth opportunities, selling for attractive valuations. Most of the companies we identified there three years ago with these characteristics were those directly exposed to the tremendous infrastructure opportunity in India – which led us to investments in power, cement, steel, banking and automobiles. While the opportunity remains compelling, we have reduced the position size of some of the very strong performers, such as Tata Motors (up 97.25%), Tata Steel (up 87.90%), and Reliance Industries (up 72.54%). I have maintained important positi ons in all of these companies but following their significant appreciation, the risk/reward has become less favorable. For example, a year ago, Tata Steel, despite being one of the lowest cost steel manufactures in the world with outstanding growth opportunities, was selling for under five times earnings and cash flow. Today it is selling for approximately nine times; still not expensive, in our opinion, given the quality of the company and its excellent growth prospects, but certainly less compelling than before. We are always watching the individual companies in the Fund to ensure that each offers compelling risk/reward potential. When that relationship becomes less compelling, we will reduce or eliminate that position in favor of other opportunities that offer more compelling risk/reward potential.
One Indian company in which we did not reduce the position size is ICICI Bank. Its performance over the past six months of 16.43% has underperformed the Indian market, despite tremendous loan growth, continued improvement in its non-performing loans (NPL), and excellent return on equity (ROE). Despite the concerns over rising interest rates (which I believe has been largely responsible for the weakness in Indian banking stocks), in the long-term I believe that ICICI, with an adjusted price-to-book ratio (P/B) of approximately 1.8 at the end of March, is extremely attractively valued given the continued strong demand for credit.
I am intensely focused on the valuations of each of our holdings in India. We believe the companies in the Fund are well diversified across industries and will continue to compound value for shareholders over time. There is no question that a severe correction in the market would impact our holdings, but our investments in these companies are not trades. Short-term movements in the market that are unrelated to the fundamental outlook of the companies in the Fund will not change our investment thesis on the companies.
While India as a country represents an important part of the Fund's global investments (approximately 17% of total net assets at the end of the period), the strategy of Janus Contrarian Fund is to find attractively valued companies around the world. Two important positions are Macquarie Infrastructure Group (MIG) and Macquarie Airports (MAP), both based in Australia. MIG invests in toll roads globally and MAP invests in airports globally. Neither is a particularly high growth company, but both have generated excellent cash flows due to low fixed capital needs, have excellent long lived assets, and sell for attractive valuations. Toll road privatization, particularly in the United States is accelerating, and global aviation, despite the weak economics of the airlines themselves, continues to grow. The business model of each is almost entirely dependent on the price paid for the asset (or concession). To the extent each can acquire its concess ion for a reasonable price and increase the revenue without a substantial capital outlay, I believe these companies can generate a good risk-adjusted return. Return on investment (ROI) must always be considered in the context of the cost of the capital invested. To the extent a company can generate reasonable risk-adjusted returns that exceed its cost of capital, even in a low growth environment, it can compound substantial value for shareholders.
Investing is an exercise in risk analysis and in order to maximize risk adjusted returns it is important not to constrain the investment universe. Just as U.S. based companies invest globally to maximize opportunities, Janus Contrarian Fund invests globally in an attempt to build a well diversified portfolio of attractively valued companies with the best growth prospects. As long as we see favorable opportunities for international investments, as an investor in Janus Contrarian Fund, you should expect that these investments will continue to be an important part of the Fund's portfolio.
Stocks that Detracted from Performance
In addition to Liberty Global and Owens-Illinois, I would like to discuss one other stock that negatively impacted the Fund. St. Joe, which is the largest private landowner in Florida, suffered due to the impact of the Hurricanes and concern about a housing slowdown. I too am concerned about a housing slowdown, but St. Joe owns very valuable land and
Janus Core, Risk-Managed and Value Funds April 30, 2006 15
Janus Contrarian Fund (unaudited)
has demonstrated an expertise in the land entitlement process. Unlike a home builder that cannot sit on finished inventory indefinitely, St. Joe is under no pressure to sell its land in a depressed environment. We applaud management for thinking about long-term value creation at the expense of near-term earnings and we have taken advantage of the weak stock price by substantially increasing the size of our position.
Stocks that Contributed to Performance
Positive contributors to the Fund were broad-based across both industry and geography. International holdings such as the previously mentioned Indian companies; CapitaLand, a Singapore-based real estate company; SK, a Korean refiner; EMI Group, a UK-based music company; and Cemex, a Mexico-based global manufacturer of cement were important contributors. In addition, domestic holdings such as Advanced Micro Devices, Terex, E*Trade, JPMorgan Chase, J.C. Penney, and Vornado Realty Trust were important contributors to the performance of the Fund in the period.
Outlook
The market has continued its strength, despite historically high oil and commodity prices and 15 consecutive interest rate increases by the Federal Reserve. One of the reasons I don't try to predict the market is if I had known a year ago what I know today, I would have expected a very weak stock market; and I would have been wrong. It is my job and the job of our outstanding team of domestic and international analysts to find attractively valued companies irrespective of the direction of the market. While I would not suggest future performance is likely to be as strong as it has been for the past three years, I have tremendous confidence in the companies that make up the portfolio of Janus Contrarian Fund.
Thank you again for your continued investment in Janus Contrarian Fund.
Janus Contrarian Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Advanced Micro Devices, Inc. Integrated circuits provider - U.S. | 1.84% | ||||||
Reliance Industries, Ltd. Industrial conglomerate with multiple lines of business - India | 1.82% | ||||||
Tata Motors, Ltd. Auto manufacturer - India | 1.81% | ||||||
Tata Steel, Ltd. Steel company - India | 1.67% | ||||||
CapitaLand, Ltd. Residential and commercial properties operator - Singapore | 1.29% |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
St. Joe Co. Real estate operating company - U.S. | (0.45%) | ||||||
CA, Inc Standardized computer software producer - U.S. | (0.40%) | ||||||
Liberty Global Inc. - Class C Broadband distribution and video programming services provider - U.S. | (0.28%) | ||||||
Owens-Illinois, Inc. Plastic and glass packaging manufacturer - U.S. | (0.27%) | ||||||
Kinder Morgan Management LLC Limited partner in Kinder Morgan Energy Partners - U.S. | (0.24%) |
5 Largest Contributors to Performance – Sectors
Group | Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | ||||||||||||
Energy | 3.84 | % | 12.67 | % | 9.65 | % | |||||||||
Capital Goods | 3.25 | % | 9.27 | % | 8.71 | % | |||||||||
Materials | 3.19 | % | 8.98 | % | 3.01 | % | |||||||||
Semiconductors & Semiconductor Equipment | 1.84 | % | 3.50 | % | 3.15 | % | |||||||||
Diversified Financials | 1.75 | % | 5.73 | % | 8.08 | % |
5 Lowest Contributors/Detractors to Performance – Sectors
Group | Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | ||||||||||||
Consumer Durables & Apparel | (0.02 | %) | 0.08 | % | 1.31 | % | |||||||||
Pharmaceuticals & Biotechnology | 0.00 | % | 0.00 | % | 7.88 | % | |||||||||
Food & Staples Retailing | 0.00 | % | 0.00 | % | 2.38 | % | |||||||||
Commercial Services & Supplies | 0.00 | % | 0.00 | % | 0.73 | % | |||||||||
Software & Services | 0.09 | % | 7.00 | % | 5.44 | % |
16 Janus Core, Risk-Managed and Value Funds April 30, 2006
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2006 | |||||||
Liberty Global, Inc. - Class A Broadcast Services and Programming | 5.2 | % | |||||
Ceridian Corp. Computer Services | 4.6 | % | |||||
CA, Inc. Enterprise Software/Services | 3.2 | % | |||||
St. Joe Co. Real Estate Operating/Development | 3.0 | % | |||||
SK Corp. Oil Refining and Marketing | 3.0 | % | |||||
19.0 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2006 |
Emerging markets comprised 23.7% of total net assets.
5 Largest Country Allocations – (% of Investment Securities)
As of April 30, 2006 | As of October 31, 2005 | ||||||
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Janus Core, Risk-Managed and Value Funds April 30, 2006 17
Janus Contrarian Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Five Year | Since Inception* | ||||||||||||||||
Janus Contrarian Fund | 20.53 | % | 38.81 | % | 10.68 | % | 9.63 | % | |||||||||||
S&P 500® Index | 9.64 | % | 15.42 | % | 2.70 | % | 0.93 | % | |||||||||||
Lipper Quartile | N/A | 1 | st | 1 | st | 1 | st | ||||||||||||
Lipper Ranking - based on total return for Multi-Cap Core Funds | N/A** | 3/834 | 11/421 | 29/332 |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes 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.
*The Fund's inception date – February 29, 2000
**The Fund's fiscal year-to-date Lipper ranking is not available.
See "Explanations of Charts, Tables and Financial Statements."
The Fund's portfolio may differ significantly from the securities held in the index. The index is not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
This Fund buys stock in overlooked or underappreciated companies of any size, in any sector. Overlooked and underappreciated stocks present special risks.
The Fund is classified as "nondiversified," meaning it has the ability to take larger positions in a smaller number of issuers than a fund that is classified as "diversified." Nondiversified funds may experience greater price volatility.
There is no assurance that the investment process will consistently lead to successful investing.
This Fund may have significant exposure to emerging markets. In general, emerging market investments have historically been subject to significant gains and/or losses. As such, the Fund's returns and NAV may be subject to such volatility.
The Fund has experienced significant gains due, in part, to its investments in India. 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 India.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,205.30 | $ | 5.14 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.13 | $ | 4.71 |
*Expenses are equal to the annualized expense ratio of 0.94% multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
18 Janus Core, Risk-Managed and Value Funds April 30, 2006
Janus Contrarian Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Common Stock - 98.3% | |||||||||||
Automotive - Cars and Light Trucks - 2.0% | |||||||||||
3,842,727 | Tata Motors, Ltd.** | $ | 79,374,992 | ||||||||
Broadcast Services and Programming - 6.3% | |||||||||||
9,623,812 | Liberty Global Inc. - Class A*,# | 199,309,147 | |||||||||
2,137,672 | Liberty Global Inc. - Class C*,# | 42,689,310 | |||||||||
241,998,457 | |||||||||||
Building - Mobile Home and Manufactured Homes - 0.6% | |||||||||||
428,180 | Thor Industries, Inc. | 21,614,526 | |||||||||
Building and Construction Products - Miscellaneous - 2.7% | |||||||||||
3,293,190 | Masco Corp.# | 105,052,761 | |||||||||
Building Products - Cement and Aggregate - 3.3% | |||||||||||
1,194,608 | Cemex S.A. de C.V. (ADR)# | 80,659,932 | |||||||||
17,643,412 | Gujarat Ambuja Cements, Ltd.** | 45,680,326 | |||||||||
126,340,258 | |||||||||||
Cable Television - 1.7% | |||||||||||
2,101,530 | EchoStar Communications Corp. - Class A*,# | 64,937,277 | |||||||||
Casino Hotels - 2.8% | |||||||||||
398,450 | Harrah's Entertainment, Inc. | 32,529,458 | |||||||||
980,990 | Station Casinos, Inc. | 75,614,709 | |||||||||
108,144,167 | |||||||||||
Commercial Banks - 5.2% | |||||||||||
3,371,258 | ICICI Bank, Ltd.*,** | 43,308,276 | |||||||||
2,370,000 | ICICI Bank, Ltd. (ADR)** | 65,009,100 | |||||||||
4,704 | Mitsubishi UFJ Financial Group, Inc.** | 73,948,624 | |||||||||
2,298 | Mizuho Financial Group, Inc.** | 19,596,522 | |||||||||
201,862,522 | |||||||||||
Computer Services - 4.6% | |||||||||||
7,396,045 | Ceridian Corp.*,£ | 179,206,170 | |||||||||
Computers - 1.0% | |||||||||||
554,619 | Apple Computer, Inc.* | 39,039,631 | |||||||||
Containers - Metal and Glass - 2.0% | |||||||||||
4,261,515 | Owens-Illinois, Inc.* | 77,900,494 | |||||||||
Diversified Minerals - 1.1% | |||||||||||
833,865 | Companhia Vale do Rio Doce (ADR) | 42,960,725 | |||||||||
Diversified Operations - 2.6% | |||||||||||
3,859,310 | Tyco International, Ltd. (U.S. Shares) | 101,692,819 | |||||||||
E-Commerce/Services - 0.5% | |||||||||||
627,833 | IAC/InterActiveCorp* | 18,125,539 | |||||||||
Electric - Generation - 2.1% | |||||||||||
31,741,070 | Datang International Power Generation Company, Ltd.# | 22,516,333 | |||||||||
19,520,596 | National Thermal Power Corporation, Ltd.** | 59,040,021 | |||||||||
81,556,354 | |||||||||||
Electronic Components - Semiconductors - 0.9% | |||||||||||
1,099,840 | Advanced Micro Devices, Inc.*,** | 35,579,824 | |||||||||
Energy - Alternate Sources - 0.1% | |||||||||||
5,536,912 | Reliance Energy Ventures, Ltd.*,** | 5,284,113 | |||||||||
Enterprise Software/Services - 3.2% | |||||||||||
4,937,010 | CA, Inc.# | 125,202,574 | |||||||||
Finance - Investment Bankers/Brokers - 6.0% | |||||||||||
3,677,091 | E*TRADE Financial Corp.* | 91,486,025 | |||||||||
1,893,600 | JP Morgan Chase & Co. | 85,931,568 | |||||||||
719,900 | Merrill Lynch & Company, Inc. | 54,899,574 | |||||||||
232,317,167 |
Shares or Principal Amount | Value | ||||||||||
Finance - Mortgage Loan Banker - 0.7% | |||||||||||
956,565 | Housing Development Finance Corporation, Ltd.** | $ | 27,688,189 | ||||||||
Financial Guarantee Insurance - 1.7% | |||||||||||
1,087,100 | MBIA, Inc.* | 64,823,773 | |||||||||
Food - Dairy Products - 0.7% | |||||||||||
727,060 | Dean Foods Co.* | 28,798,847 | |||||||||
Food - Diversified - 0.8% | |||||||||||
3,054,551 | Cadbury Schweppes PLC** | 30,301,538 | |||||||||
Gas - Distribution - 0.1% | |||||||||||
5,536,912 | Reliance Natural Resources, Ltd.*,** | 3,644,003 | |||||||||
Independent Power Producer - 2.9% | |||||||||||
990,965 | NRG Energy, Inc.* | 47,160,024 | |||||||||
5,650,080 | Reliant Energy, Inc.*,# | 64,128,408 | |||||||||
111,288,432 | |||||||||||
Investment Companies - 2.7% | |||||||||||
21,166,006 | Macquarie Airports** | 52,745,361 | |||||||||
18,763,623 | Macquarie Infrastructure Group** | 50,892,809 | |||||||||
103,638,170 | |||||||||||
Leisure and Recreation Products - 1.9% | |||||||||||
14,576,266 | EMI Group PLC** | 74,957,274 | |||||||||
Machinery - Construction and Mining - 0.7% | |||||||||||
332,325 | Terex Corp.* | 28,762,729 | |||||||||
Machinery - Pumps - 0.5% | |||||||||||
432,505 | Graco, Inc.# | 20,219,609 | |||||||||
Medical - HMO - 2.5% | |||||||||||
1,924,727 | Coventry Health Care, Inc.* | 95,601,190 | |||||||||
Medical - Nursing Homes - 1.5% | |||||||||||
1,289,465 | Manor Care, Inc.# | 56,543,040 | |||||||||
Medical Instruments - 0.5% | |||||||||||
861,780 | Boston Scientific Corp.* | 20,027,767 | |||||||||
Metal Processors and Fabricators - 1.6% | |||||||||||
6,440,835 | Bharat Forge, Ltd.** | 61,173,588 | |||||||||
Oil Companies - Exploration and Production - 2.3% | |||||||||||
1,080,000 | Chesapeake Energy Corp. | 34,214,400 | |||||||||
1,010,070 | Forest Oil Corp.*,# | 36,938,260 | |||||||||
817,449 | Mariner Energy, Inc.*,# | 15,899,383 | |||||||||
87,052,043 | |||||||||||
Oil Companies - Integrated - 1.3% | |||||||||||
596,335 | Suncor Energy, Inc. (U.S. Shares) | 51,129,763 | |||||||||
Oil Refining and Marketing - 5.6% | |||||||||||
4,484,899 | Reliance Industries, Ltd.** | 100,775,381 | |||||||||
1,574,550 | SK Corp.** | 115,854,294 | |||||||||
216,629,675 | |||||||||||
Paper and Related Products - 0.8% | |||||||||||
10,315,353 | Ballarpur Industries, Ltd.**,£ | 29,556,128 | |||||||||
Pipelines - 2.3% | |||||||||||
2,068,328 | Kinder Morgan Management LLC*,# | 88,503,755 | |||||||||
Publishing - Periodicals - 0.6% | |||||||||||
1,674,700 | Playboy Enterprises, Inc. - Class B*,£ | 22,089,293 | |||||||||
Real Estate Management/Services - 0.3% | |||||||||||
526,000 | Mitsubishi Estate Company, Ltd.** | 11,502,569 |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2006 19
Janus Contrarian Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Real Estate Operating/Development - 5.8% | |||||||||||
34,383,000 | CapitaLand, Ltd.** | $ | 106,570,118 | ||||||||
2,084,920 | St. Joe Co.# | 117,089,108 | |||||||||
223,659,226 | |||||||||||
Recreational Vehicles - 0.5% | |||||||||||
366,250 | Polaris Industries, Inc.# | 17,543,375 | |||||||||
Reinsurance - 1.6% | |||||||||||
20,958 | Berkshire Hathaway, Inc. - Class B* | 61,868,016 | |||||||||
REIT - Diversified - 1.5% | |||||||||||
623,650 | Vornado Realty Trust | 59,645,886 | |||||||||
Retail - Major Department Stores - 1.5% | |||||||||||
866,775 | J.C. Penney Company, Inc. | 56,739,092 | |||||||||
Soap and Cleaning Preparations - 1.9% | |||||||||||
2,041,293 | Reckitt Benckiser PLC** | 74,410,896 | |||||||||
Steel - Producers - 2.5% | |||||||||||
6,895,307 | Tata Steel, Ltd.** | 97,386,613 | |||||||||
Telecommunication Services - 0.4% | |||||||||||
2,386,456 | Reliance Communication Ventures, Ltd.*,** | 16,096,619 | |||||||||
Television - 1.4% | |||||||||||
5,644,742 | British Sky Broadcasting Group PLC** | 54,092,270 | |||||||||
Transportation - Railroad - 0.5% | |||||||||||
307,500 | All America Latina Logistica (GDR) | 19,482,954 | |||||||||
Total Common Stock (cost $2,660,425,156) | 3,803,046,692 | ||||||||||
Corporate Bonds - 0% | |||||||||||
Retail - Discount - 0% | |||||||||||
$ 16,925,000 Ames Department Stores, Inc., 10.00% senior notes, due 4/15/06º,ß,ºº | (cost $7,900,645) | 0 | |||||||||
Other Securities - 6.3% | |||||||||||
242,921,745 | State Street Navigator Securities Lending Prime Portfolio† (cost $242,921,745) | 242,921,745 | |||||||||
Time Deposit - 0.9% | |||||||||||
$ | 33,400,000 | ING Financial, ETD 4.86%, 5/1/06 (cost $33,400,000) | 33,400,000 | ||||||||
Total Investments (total cost $2,944,647,546) – 105.5% | 4,079,368,437 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (5.5)%** | (214,183,336 | ) | |||||||||
Net Assets – 100% | $ | 3,865,185,101 |
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Australia | $ | 103,638,170 | 2.5 | % | |||||||
Bermuda | 101,692,819 | 2.5 | % | ||||||||
Brazil | 62,443,679 | 1.5 | % | ||||||||
Canada | 51,129,763 | 1.3 | % | ||||||||
China | 22,516,333 | 0.6 | % | ||||||||
India | 634,017,349 | 15.5 | % | ||||||||
Japan | 105,047,715 | 2.6 | % | ||||||||
Mexico | 80,659,932 | 2.0 | % | ||||||||
Singapore | 106,570,118 | 2.6 | % | ||||||||
South Korea | 115,854,294 | 2.8 | % | ||||||||
United Kingdom | 233,761,978 | 5.7 | % | ||||||||
United States†† | 2,462,036,287 | 60.4 | % | ||||||||
Total | $ | 4,079,368,437 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (53.6% excluding Short-Term Securities and Other Securities)
Forward Currency Contracts, Open
Currency Sold and Settlement Date | Currency Units Sold | Currency Value in $ U.S. | Unrealized Gain/(Loss) | ||||||||||||
Australian Dollar 8/24/06 | 131,400,000 | $ | 99,585,631 | $ | (2,388,871 | ) | |||||||||
British Pound 6/28/06 | 11,100,000 | 20,255,437 | (404,752 | ) | |||||||||||
British Pound 8/10/06 | 15,000,000 | 27,391,487 | (1,327,337 | ) | |||||||||||
British Pound 10/19/06 | 96,100,000 | 175,687,721 | (3,658,150 | ) | |||||||||||
Indian Rupee 8/24/06 | 2,000,000,000 | 44,386,687 | 241,228 | ||||||||||||
Japanese Yen 8/24/06 | 11,511,000,000 | 102,802,038 | (2,667,455 | ) | |||||||||||
Singapore Dollar 8/24/06 | 155,300,000 | 98,808,808 | (2,451,929 | ) | |||||||||||
South Korean Won 8/10/06 | 12,450,000,000 | 13,253,422 | (496,621 | ) | |||||||||||
South Korean Won 10/19/06 | 57,330,000,000 | 61,166,354 | (322,629 | ) | |||||||||||
Total | $ | 643,337,585 | $ | (13,476,516 | ) |
Value | |||||||
Schedule of Written Options - Calls | |||||||
Advanced Micro Devices, Inc. expires July 2006 10,000 contracts exercise price $40.00 | $ | 450,000 | |||||
Schedule of Written Options - Puts | |||||||
Advanced Micro Devices, Inc. expires July 2006 10,000 contracts exercise price $30.00 | $ | 1,400,000 | |||||
Total Options Written | |||||||
20,000 contracts (Premiums received $2,782,113) | $1,850,000 |
See Notes to Schedules of Investments and Financial Statements.
20 Janus Core, Risk-Managed and Value Funds April 30, 2006
Janus Core Equity Fund (unaudited)
Ticker: JAEIX
Fund Snapshot
This conservative growth fund from Janus relies on detailed research to drive its fundamental approach to investing in core holdings and opportunistic companies.
Minyoung Sohn
portfolio manager
Stocks started the year on a promising note, with the S&P 500® Index advancing nearly 3% in January in anticipation that the Federal Reserve (Fed) would soon stop raising interest rates. To the market's chagrin, on January 31, outgoing Fed Chairman Alan Greenspan raised the Federal Funds rate for the thirteenth consecutive time to 4.50%. The market retreated on the rate hike but then drifted higher despite new Fed Chairman Ben Bernanke making it fourteen in a row on March 28 by raising Fed Funds to 4.75% on the continued strength of the economy. I am carefully watching the yield on the 10-year Treasury note, which has risen sharply to 5% after trading in a band around 4.5% for most of last year. Interest rates matter because they impact the value of stocks through the discounting mechanism, and in the real world, higher rates impact business and consum er spending. Despite rising rates and a flattening yield curve, the economy remains strong and generally corporations are in great shape, recording record profits and free cash flow and sitting on their strongest balance sheets in years. So what's to worry about?
As argued articulately by Stephen Roach, Chief Economist of Morgan Stanley, despite the benefits of globalization, it is also sustaining the unsustainable – a large and persistent fiscal deficit and a growing trade deficit which is increasingly financed by savings overseas. For now, foreigners seem content to finance our twin deficits and longer-term interest rates remain low as a result. Despite these concerns, I believe that stocks are attractively valued and I am confident that our bottom-up stock picking approach is the right one.
Performance Overview
I am pleased to report that your Fund delivered strong results on both an absolute and relative basis. For the six months ended April 30, 2006, Janus Core Equity Fund returned 15.15% and exceeded its benchmark, the S&P 500® Index, which returned 9.64%.
One Year | Three Years | Five Years | Since Inception (6/96) | ||||||||||||||||
Lipper Quartile | 1 | st | 1 | st | 1 | st | 1 | st | |||||||||||
(Rank as of 4/30/06 based on total return for Lipper Large-Cap Core Funds) | (9 | out of 864) | (20 | out of 746) | (16 | out of 618) | (3 | out of 248) |
It has been one year since I stepped in for Karen Reidy to serve as the portfolio manager for your Fund. As I wrote in my first letter following the transition, expect to see continuity in the philosophy and strategy as we strive to deliver top-quartile returns in the years ahead.
Investment Philosophy and Strategy – How Stocks Are Selected
My strategy is to deliver superior risk-adjusted returns versus the S&P 500® Index benchmark in a conservative growth strategy. A primary difference between Janus Core Equity Fund and Janus Growth and Income Fund, the other retail fund I manage, is that Janus Core Equity Fund does not have an income requirement. As such, the Fund will be invested predominantly in stocks seeking capital appreciation. My investment strategy is built on the combination of in-depth grassroots research and rigorous quantitative analysis. Our research process begins by identifying companies with sustainable competitive advantages in product manufacturing, product distribution, or research and development. Our analysts devote much of their time and energy in the field – interviewing suppliers, competitors and partners – to develop deep knowledge of the industry ecosystem. After assessing the qualitative characteristics, we look at the f inancial metrics in detail to identify companies poised to deliver improving margins, returns on invested capital and free cash flow. This involves a careful review of the balance sheet and cash flow statement and understanding how they interconnect with the income statement. Our company analysis is not complete until we test the valuation of the stock against a variety of market scenarios using discounted cash flow analysis, and after assigning probabilities to each outcome, we finally derive a price target for the stock.
Advanced Micro Devices and Suncor Energy Continue to Drive Performance
Advanced Micro Devices (AMD) is in the process of changing its profit share of the microprocessor duopoly. Historically, Intel has dominated this industry with over 80% unit share and nearly all of the industry profits and cash flow. After playing second fiddle to Intel for thirty years, AMD is mounting a credible challenge on the strength of its widely acclaimed 64-bit architecture. The traditional AMD value proposition of price-to-performance has been strengthened by customers' increasing focus on power efficiency, and AMD's Opteron server product has demonstrated superiority across
Janus Core, Risk-Managed and Value Funds April 30, 2006 21
Janus Core Equity Fund (unaudited)
these three dimensions. Leadership in the server market is significant because it allows the company to better maintain price (and therefore margin) integrity across its product lineup by defusing Intel's ability to use high-margin products (server and notebook) to subsidize price cuts, which would negatively impact AMD disproportionately.
Suncor is a leveraged play on the long-term price of oil.(1) We remain bullish on oil due to our analysis of long-term supply and demand. Our research suggests that non-OPEC supply will peak in 2009 or 2010 and that OPEC will struggle to increase output meaningfully enough to the meet world's demand growth. This will create a situation where the market must price out demand – this equilibrium price is clearly well above the $70 price we see today. I believe that relative to its intrinsic value, the market is discounting a long term price of oil between $45 and $50 per barrel. I believe there is considerable upside to Suncor's current share price as the market begins to believe in the persistency of higher oil prices and begins to discount this into the share price calculation.
In addition to the standalone case for owning Suncor, I believe that Suncor is a highly attractive acquisition target for the major integrated oil companies, as well as foreign government oil enterprises. The oil sands pose no exploration risk and the development cost, though large, is one which is relatively fixed and could potentially be lowered with technological advances. As it is becoming increasingly difficult to locate and develop conventional oil resources, I believe the fixed cost structure of the abundant oil sands should look increasingly attractive to the majors. Moreover, as the majors are forced to follow the oil into politically unstable regions such as West Africa and the former Soviet Union, the relative stability of Canada should make these assets even more compelling, in my opinion.
Yahoo! and Aetna Were Large Detractors in the Period
Our holding in Yahoo! was a large negative contributor in the period, with shares declining 11% due to concerns about the company's long-term growth rate, as well as its competitive positioning versus Google. The traditional media industry is facing formidable secular challenges as content digitalization and the emergence of new distribution channels are driving increased audience fragmentation and declining audiences in general. Yahoo! is a leading company in the rapidly growing online advertising industry. Due to its large and growing user base, we believe Yahoo! is well positioned to benefit from this trend through multiple revenue streams in branded advertising, sponsored search and premium subscription services. I consequently held the position.
Aetna's shares came under pressure after the company released its earnings results for the 1st quarter of 2006. Although Aetna reported results above expectations, the medical loss ratio spiked to 80% versus expectations of 78%. This sparked concern that the company inadequately priced its book of business against medical cost trends. And unlike past quarters, Aetna did not report a favorable reserve adjustment. Shares fell so much that day (25%) that the company held a second conference call to explain that changes in the mix of business drove higher ratios, as opposed to changes in the cost trend itself. Despite the noise, we believe that underlying medical cost trends are decelerating in line with our expectations and faster than commercial pricing. Our analyst, Ted Shannon, maintains a deep pool of industry contacts which gives us valuable insight into industry trend s and supports our investment thesis. Costs are decelerating with the growing adoption of consumer-driven health plans and we believe could decelerate further next year with the recalibration of government reimbursements. We also believe that while the industry remains competitive, there are no meaningful changes to the overall pricing environment. I recognize that it may take time for management to regain credibility and for the shares to make up lost ground, but I have held the position. Another reason we have liked Aetna is that the company has carried an under-levered balance sheet relative to other health plans such as UNH and Coventry Health Care. The current share price weakness is an excellent opportunity for the company to step up and aggressively buy back shares.
Closing Comments
In my opinion, the real challenge to rising interest rates in this market environment (I have recently seen certificates of deposit paying 4.5%) is providing you with attractive risk-adjusted returns (after expenses) and earning our keep in your investment portfolio. I welcome this challenge, as I am supported by a talented analyst pool. To achieve this, I am holding firm to my strategy of picking stocks one at a time and staying close to the best ideas generated by the Janus research team. Over 80% of the Fund is invested in stocks internally rated by the Janus investment team as "buy" or "strong buy."
Finally, I want you to know that a substantial portion of my discretionary investment dollars is invested along side you in this Fund. I believe that adhering to a disciplined buying and selling approach will continue to reward us over time. I promise to you my utmost effort in the quarters and years ahead.
Thank you for your continued investment.
(1) The Canadian oil sands basin near Fort McMurray, Alberta, is one of the world's largest hydrocarbon resources with over 175 billion oil-equivalent barrels. The Suncor resource base today covers 12 billion barrels of bitumen – enough to produce 10 billion barrels of oil. Although many companies have some exposure to this resource, Suncor is the only large pure play on the oil sands.
22 Janus Core, Risk-Managed and Value Funds April 30, 2006
(unaudited)
Janus Core Equity Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Advanced Micro Devices, Inc. Integrated circuits provider - U.S. | 2.04% | ||||||
Suncor Energy, Inc. Energy company - Canada | 1.36% | ||||||
JP Morgan Chase & Co. Global financial services company - U.S. | 0.90% | ||||||
Komatsu, Ltd. Construction and mining machinery manufacturer - U.S. | 0.73% | ||||||
Celgene Corp. Biopharmaceutical company - U.S. | 0.73% |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Aetna, Inc. Healthcare and related benefits provider - U.S. | (0.43%) | ||||||
Yahoo!, Inc. Global Internet media company - U.S. | (0.38%) | ||||||
Tiffany & Co. Jewelry and specialty retail store operator - U.S. | (0.22%) | ||||||
Fannie Mae Guaranteed mortgage-backed securities issuer/seller - U.S. | (0.21%) | ||||||
Microsoft Corp. Software products company - U.S. | (0.18%) |
5 Largest Contributors to Performance – Sectors
Group | Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | ||||||||||||
Energy | 4.12 | % | 16.70 | % | 9.65 | % | |||||||||
Semiconductors & Semiconductor Equipment | 3.15 | % | 10.25 | % | 3.15 | % | |||||||||
Capital Goods | 2.04 | % | 8.97 | % | 8.71 | % | |||||||||
Diversified Financials | 2.00 | % | 10.32 | % | 8.08 | % | |||||||||
Pharmaceuticals & Biotechnology | 1.46 | % | 11.01 | % | 7.88 | % |
5 Lowest Contributors/Detractors to Performance – Sectors
Group | Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | ||||||||||||
Healthcare Equipment & Services | (0.61 | %) | 5.24 | % | 5.17 | % | |||||||||
Banks | (0.21 | %) | 1.35 | % | 7.48 | % | |||||||||
Food & Staples Retailing | (0.10 | %) | 0.93 | % | 2.38 | % | |||||||||
Other* | 0.00 | % | 0.01 | % | 0.00 | % | |||||||||
Utilities | 0.00 | % | 0.00 | % | 3.30 | % |
* Industry not classified by Global Industry Classification Standard.
Janus Core, Risk-Managed and Value Funds April 30, 2006 23
Janus Core Equity Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2006 | |||||||
General Electric Co. Diversified Operations | 4.0 | % | |||||
JP Morgan Chase & Co. Finance - Investment Bankers/Brokers | 3.9 | % | |||||
Advanced Micro Devices, Inc. Electronic Components - Semiconductors | 3.7 | % | |||||
Citigroup, Inc. Finance - Investment Bankers/Brokers | 3.5 | % | |||||
Merrill Lynch & Company, Inc. Finance - Investment Bankers/Brokers | 3.4 | % | |||||
18.5 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2006 |
Emerging markets comprised 3.5% of total net assets.
5 Largest Country Allocations – (% of Investment Securities)
As of April 30, 2006 | As of October 31, 2005 | ||||||
![]() | ![]() | ||||||
24 Janus Core, Risk-Managed and Value Funds April 30, 2006
(unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Five Year | Since Inception* | ||||||||||||||||
Janus Core Equity Fund | 15.15 | % | 31.00 | % | 5.74 | % | 13.43 | % | |||||||||||
S&P 500® Index | 9.64 | % | 15.42 | % | 2.70 | % | 8.77 | % | |||||||||||
Lipper Quartile | N/A | 1 | st | 1 | st | 1 | st | ||||||||||||
Lipper Ranking - based on total return for Large-Cap Core Funds | N/A** | 9/864 | 16/618 | 3/248 |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes 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.
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.
*The Fund's inception date – June 28, 1996
**The Fund's fiscal year-to-date Lipper ranking is not available.
See "Explanations of Charts, Tables and Financial Statements."
The Fund's portfolio may differ significantly from the securities held in the index. The index is not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,151.50 | $ | 4.80 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.33 | $ | 4.51 |
*Expenses are equal to the annualized expense ratio of 0.90%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Janus Core, Risk-Managed and Value Funds April 30, 2006 25
Janus Core Equity Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Common Stock - 96.1% | |||||||||||
Aerospace and Defense - 3.2% | |||||||||||
275,025 | Boeing Co. | $ | 22,950,836 | ||||||||
145,525 | Lockheed Martin Corp. | 11,045,348 | |||||||||
33,996,184 | |||||||||||
Agricultural Operations - 2.0% | |||||||||||
575,005 | Archer-Daniels-Midland Co. | 20,895,682 | |||||||||
Applications Software - 2.5% | |||||||||||
1,090,480 | Microsoft Corp. | 26,335,092 | |||||||||
Beverages - Non-Alcoholic - 1.5% | |||||||||||
271,850 | PepsiCo, Inc. | 15,832,544 | |||||||||
Casino Hotels - 2.1% | |||||||||||
279,795 | Harrah's Entertainment, Inc. | 22,842,464 | |||||||||
Computers - 0.9% | |||||||||||
360,825 | Dell, Inc.* | 9,453,615 | |||||||||
Cosmetics and Toiletries - 2.1% | |||||||||||
390,770 | Procter & Gamble Co. | 22,746,722 | |||||||||
Diversified Operations - 4.0% | |||||||||||
1,241,565 | General Electric Co. | 42,945,733 | |||||||||
Electronic Components - Semiconductors - 6.8% | |||||||||||
1,210,345 | Advanced Micro Devices, Inc.* | 39,154,661 | |||||||||
17,870 | Samsung Electronics Company, Ltd. | 12,201,315 | |||||||||
598,820 | Texas Instruments, Inc.# | 20,785,042 | |||||||||
72,141,018 | |||||||||||
Electronic Forms - 2.1% | |||||||||||
558,735 | Adobe Systems, Inc.* | 21,902,412 | |||||||||
Enterprise Software/Services - 3.4% | |||||||||||
1,778,765 | Oracle Corp.* | 25,952,181 | |||||||||
199,435 | SAP A.G. (ADR)** | 10,895,134 | |||||||||
36,847,315 | |||||||||||
Entertainment Software - 1.3% | |||||||||||
253,490 | Electronic Arts, Inc.* | 14,398,232 | |||||||||
Finance - Credit Card - 1.1% | |||||||||||
224,375 | American Express Co. | 12,073,619 | |||||||||
Finance - Investment Bankers/Brokers - 10.7% | |||||||||||
744,865 | Citigroup, Inc. | 37,206,006 | |||||||||
925,175 | JP Morgan Chase & Co. | 41,984,441 | |||||||||
471,135 | Merrill Lynch & Company, Inc. | 35,928,755 | |||||||||
115,119,202 | |||||||||||
Finance - Mortgage Loan Banker - 2.3% | |||||||||||
482,990 | Fannie Mae | 24,439,294 | |||||||||
Food - Canned - 0.6% | |||||||||||
240,175 | TreeHouse Foods, Inc.* | 6,292,585 | |||||||||
Food - Dairy Products - 1.9% | |||||||||||
505,465 | Dean Foods Co.* | 20,021,469 | |||||||||
Food - Retail - 0.8% | |||||||||||
134,130 | Whole Foods Market, Inc. | 8,232,899 | |||||||||
Hotels and Motels - 0.5% | |||||||||||
95,790 | Four Seasons Hotels, Inc. | 5,174,576 | |||||||||
Medical - Biomedical and Genetic - 1.1% | |||||||||||
273,110 | Celgene Corp.* | 11,514,318 | |||||||||
Medical - Drugs - 6.3% | |||||||||||
94,770 | Forest Laboratories, Inc.* | 3,826,813 | |||||||||
853,420 | Merck & Company, Inc. | 29,374,716 |
Shares or Principal Amount | Value | ||||||||||
Medical - Drugs - (continued) | |||||||||||
176,180 | Roche Holding A.G. | $ | 27,090,410 | ||||||||
76,571 | Sanofi-Aventis**,# | 7,221,036 | |||||||||
67,512,975 | |||||||||||
Medical - HMO - 4.3% | |||||||||||
705,200 | Aetna, Inc. | 27,150,200 | |||||||||
382,910 | Coventry Health Care, Inc.* | 19,019,140 | |||||||||
46,169,340 | |||||||||||
Medical Instruments - 1.4% | |||||||||||
638,005 | Boston Scientific Corp.*,# | 14,827,236 | |||||||||
Networking Products - 0.7% | |||||||||||
345,700 | Cisco Systems, Inc.* | 7,242,415 | |||||||||
Oil - Field Services - 1.0% | |||||||||||
142,695 | Halliburton Co. | 11,151,614 | |||||||||
Oil Companies - Exploration and Production - 2.8% | |||||||||||
190,295 | Apache Corp. | 13,518,557 | |||||||||
338,120 | EnCana Corp. (U.S. Shares)# | 16,922,906 | |||||||||
30,441,463 | |||||||||||
Oil Companies - Integrated - 10.4% | |||||||||||
200,945 | Amerada Hess Corp. | 28,789,390 | |||||||||
154,805 | ConocoPhillips | 10,356,455 | |||||||||
515,145 | Exxon Mobil Corp. | 32,495,346 | |||||||||
136,595 | Marathon Oil Corp. | 10,840,179 | |||||||||
351,641 | Suncor Energy, Inc. | 30,111,452 | |||||||||
112,592,822 | |||||||||||
Oil Refining and Marketing - 2.9% | |||||||||||
475,214 | Valero Energy Corp. | 30,765,354 | |||||||||
Retail - Consumer Electronics - 0.7% | |||||||||||
123,847 | Best Buy Company, Inc. | 7,017,171 | |||||||||
Retail - Jewelry - 1.4% | |||||||||||
418,450 | Tiffany & Co.# | 14,599,721 | |||||||||
Retail - Regional Department Stores - 2.2% | |||||||||||
298,085 | Federated Department Stores, Inc. | 23,205,917 | |||||||||
Semiconductor Components/Integrated Circuits - 1.0% | |||||||||||
106,180 | Linear Technology Corp.# | 3,769,390 | |||||||||
201,315 | Maxim Integrated Products, Inc. | 7,098,367 | |||||||||
10,867,757 | |||||||||||
Steel - Producers - 1.6% | |||||||||||
1,211,466 | Tata Steel, Ltd. | 17,110,271 | |||||||||
Therapeutics - 1.3% | |||||||||||
106,235 | Gilead Sciences, Inc.* | 6,108,513 | |||||||||
128,835 | Neurocrine Biosciences, Inc.* | 7,389,975 | |||||||||
13,498,488 | |||||||||||
Transportation - Railroad - 4.0% | |||||||||||
471,424 | Canadian National Railway Co. (U.S. Shares) | 21,171,652 | |||||||||
232,810 | Union Pacific Corp. | 21,234,600 | |||||||||
42,406,252 | |||||||||||
Transportation - Services - 0.6% | |||||||||||
55,115 | FedEx Corp. | 6,345,390 | |||||||||
Web Portals/Internet Service Providers - 2.1% | |||||||||||
694,795 | Yahoo!, Inc.* | 22,775,380 | |||||||||
Wireless Equipment - 0.5% | |||||||||||
237,915 | Nokia Oyj (ADR)** | 5,391,154 | |||||||||
Total Common Stock (cost $850,857,092) | 1,027,125,695 |
See Notes to Schedules of Investments and Financial Statements.
26 Janus Core, Risk-Managed and Value Funds April 30, 2006
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Preferred Stock - 0.8% | |||||||||||
Electronic Components - Semiconductors - 0.8% | |||||||||||
15,280 | Samsung Electronics Company, Ltd. (cost $5,713,600) | $ | 8,278,287 | ||||||||
Other Securities - 4.6% | |||||||||||
48,689,478 | State Street Navigator Securities Lending Prime Portfolio† (cost $48,689,478) | 48,689,478 | |||||||||
Short-Term U.S. Government Agencies - 0.9% | |||||||||||
$ | 10,000,000 | Fannie Mae, 4.53%, 5/1/06# (amortized cost $10,000,000) | 10,000,000 | ||||||||
Time Deposit - 1.7% | |||||||||||
18,000,000 | ING Financial, ETD, 4.86%, 5/1/06 (cost $18,000,000) | 18,000,000 | |||||||||
Total Investments (total cost $933,260,170) – 104.1% | 1,112,093,460 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (4.1)% | (43,778,331 | ) | |||||||||
Net Assets – 100% | $ | 1,068,315,129 |
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Canada | $ | 73,380,586 | 6.6 | % | |||||||
Finland | 5,391,154 | 0.5 | % | ||||||||
France | 7,221,036 | 0.6 | % | ||||||||
Germany | 10,895,134 | 1.0 | % | ||||||||
India | 17,110,271 | 1.5 | % | ||||||||
South Korea | 20,479,602 | 1.8 | % | ||||||||
Switzerland | 27,090,410 | 2.4 | % | ||||||||
United States†† | 950,525,267 | 85.6 | % | ||||||||
Total | $ | 1,112,093,460 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (78.6% excluding Short-Term Securities and Other Securities)
Forward Currency Contracts, Open
Currency Sold and Settlement Date | Currency Units Sold | Currency Value in $ U.S. | Unrealized Gain/(Loss) | ||||||||||||
Euro 6/28/06 | 5,545,000 | $ | 7,021,995 | $ | (159,725 | ) | |||||||||
Total | $ | 7,021,995 | $ | (159,725 | ) |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2006 27
Janus Growth and Income Fund (unaudited)
Ticker: JAGIX
Fund Snapshot
This conservative growth fund from Janus combines core holdings and opportunistic companies with income-oriented securities, seeking to deliver consistent returns through all types of market conditions.
Minyoung Sohn
portfolio manager
Stocks started the year on a promising note, with the S&P 500® Index advancing nearly 3% in January in anticipation that the Federal Reserve (Fed) would soon stop raising interest rates. To the market's chagrin, on January 31, outgoing Fed Chairman Alan Greenspan raised the Federal Funds rate for the thirteenth consecutive time to 4.50%. The market retreated on the rate hike but then drifted higher despite new Fed Chairman Ben Bernanke making it fourteen in a row on March 28 by raising Fed Funds to 4.75% on the continued strength of the economy. I am carefully watching the yield on the 10-year Treasury note, which has risen sharply to slightly over 5% after trading in a band around 4.5% for most of last year. Interest rates matter because they impact the value of stocks through the discounting mechanism, and in the real world, higher rates impact busin ess and consumer spending. Despite rising rates and a flattening yield curve, the economy remains strong and generally corporations are in great shape, recording record profits and free cash flow and sitting on their strongest balance sheets in years. So what's to worry about?
As argued articulately by Stephen Roach, Chief Economist of Morgan Stanley, despite the benefits of globalization, it is also sustaining the unsustainable – a large and persistent fiscal deficit and a growing trade deficit which is increasingly financed by savings overseas. For now, foreigners seem content to finance our twin deficits and longer-term interest rates remain low as a result.(1) Despite these concerns, I believe that stocks are attractively valued and I am confident that our bottom-up stock picking approach is the right one.
Performance Overview
I am pleased to report that your Fund delivered strong results on both an absolute and relative basis. For the six months ended April 30, 2006, Janus Growth and Income Fund returned 13.79% and exceeded both its primary benchmark, the S&P 500® Index, and its secondary benchmark, the Russell 1000® Growth Index, which returned 9.64% and 7.06%, respectively.
Investment Philosophy and Strategy
My strategy is to deliver superior risk-adjusted returns versus the S&P 500® Index benchmark in a conservative growth strategy. The Fund is managed for shareholders in pursuit of longer-term financial objectives such as building a retirement nest egg, buying a home or funding a college education – investors who want long-term exposure to the equity market while taking on potentially less risk than a typical large-cap growth fund. What do I mean by "conservative"? A traditional definition of this term implies looking at the price volatility of the Fund, or its beta, relative to a benchmark. I have a broader view where the spirit of conservatism is captured in the Fund's portfolio construction process. I attempt to control risk by monitoring the concentration of the Fund(2) and by limiting the maximum position size to approximately 6%. An d while I employ a bottom-up approach to picking stocks, I will keep an eye on the sector weightings relative to the benchmark.
My investment philosophy is steadfast. I prefer companies that generate (or have the potential to generate) considerable free cash flow. Approximately 60-75% of the Fund is invested in companies which I believe have sustainable competitive advantages in one or more of the following competencies: product manufacturing, product distribution, or research and development. I believe that these companies will generate superior returns on invested capital and outperform their peer groups over time. The balance of the Fund is invested in various special situations opportunities, which include changes to capital allocation (for example, restructuring of the business portfolio, or changes to dividend policy or share repurchase) or product specific catalysts.
What Has Changed
I seek to deliver an income yield comparable to other growth and income funds. Last year, I stated that I was interested in boosting the income from the Fund. After a year of study, I am now convinced that tapping the equity derivative market is the most compelling way to generate income for the Fund. I am primarily using covered call strategies(3) executed through broker-issued "structured notes."(4) The average income yield on the structured note portfolio for the period is approximately 15% on an annualized basis. Although the structured note allocation is only approximately 10% of assets, it generated nearly 200 basis points in income return compared to approximately 110 basis points from the entire rest of the Fund. Over time, I would like to ramp this allocation to 15% of the Fund. Therefore, although the Fund may see an increase in the dividend yield this year, the upside potential for income exists as well.
28 Janus Core, Risk-Managed and Value Funds April 30, 2006
(unaudited)
Advanced Micro Devices and Suncor Energy Continue to Drive Performance
Advanced Micro Devices (AMD) is in the process of changing its profit share of the microprocessor duopoly. Historically, Intel has dominated this industry with over 80% unit share and nearly all of the industry profits and cash flow. After playing second fiddle to Intel for thirty years, AMD is mounting a credible challenge on the strength of its widely acclaimed 64-bit architecture. The traditional AMD value proposition of price-to-performance has been strengthened by customers' increasing focus on power efficiency, and AMD's Opteron server product has demonstrated superiority across these three dimensions. Leadership in the server market is significant because it allows the company to better maintain price (and therefore margin) integrity across its product lineup by defusing Intel's ability to use high-margin products (server and notebook) to subsidize price cuts, which would negatively impact AMD disproportionately.
Suncor is a leveraged play on the long-term price of oil.(5) We remain bullish on oil due to our analysis of long-term supply and demand. Our research suggests that non-OPEC supply will peak in 2009 or 2010 and that OPEC will struggle to increase output meaningfully enough to meet the world's demand growth. This will create a situation where the market must price out demand – this equilibrium price is clearly well above the $70 price we see today. I believe that relative to its intrinsic value, the market is discounting a long-term price of oil between $45 and $50 per barrel. I believe there is considerable upside to Suncor's current share price as the market begins to believe in the persistency of higher oil prices and begins to discount this into its share price calculation.
In addition to the standalone case for owning Suncor, I believe that Suncor is a highly attractive acquisition target for the major integrated oil companies, as well as foreign government oil enterprises. The oil sands pose no exploration risk and the development cost, though large, is one which is relatively fixed and could potentially be lowered with technological advances. As it is becoming increasingly difficult to locate and develop conventional oil resources, I believe the fixed cost structure of the abundant oil sands should look increasingly attractive to the majors. Moreover, as the majors are forced to follow the oil into politically unstable regions such as West Africa and the former Soviet Union, the relative stability of Canada should make these assets even more compelling, in my opinion.
Our Healthcare Service Holdings – UnitedHealth Group and Aetna – Were Negative Performers
UnitedHealth (UNH) and Aetna have been among the Fund's largest contributors over the past few years, but both stocks struggled this period. UNH was hit hard on negative sentiment around the timing of stock option awards for its top executives.(6) Although it is too early to know how this will unfold, the potential worst case outcome is that visionary CEO Bill McGuire will be forced to step down. We have done a lot of digging through past proxies, and for now, we are assuming that these grants were legal despite the ugly picture. At this juncture, it is important to take a step back and review the primary investment merits of owning UNH. Our research tells us that customers choose UNH for its history of production innovation, its strong national network and the company's ability to help them control medical costs. We have also had the privilege to meet many of the company's top managers, and I take comfort in knowing that UNH boasts a deep bench of talent across its major business segments. I have held the position because I believe that the business is far more resilient than the current stock weakness would imply.
Although Aetna outperformed UNH for most of this period, its shares came under pressure after the company released its earnings results for the 1st quarter of 2006. Although Aetna reported results above expectations, the medical loss ratio spiked to 80% versus expectations of 78%. This sparked concern that the company inadequately priced its book of business against medical cost trends. And unlike past quarters, Aetna did not report a favorable reserve adjustment. Shares fell so much that day (25%) that the company held a second conference call to explain that changes in the mix of business drove higher ratios, as opposed to changes in the cost trend itself. Despite the noise, we believe that underlying medical cost trends are decelerating in line with our expectations and faster than commercial pricing. Our analyst, Ted Shannon, maintains a deep pool of industry contacts which gives us valuable insight into industry trends and supports our investment thesis. Costs are decelerating with the growing adoption of consumer-driven health plans and we believe could decelerate further next year with the recalibration of government reimbursements. We also believe that while the industry remains competitive, there are no meaningful changes to the overall pricing environment. I recognize that it may take time for management to regain credibility and for the shares to make up lost ground, but I have held the position. Another reason we have liked Aetna is that the company has carried an under-levered balance sheet relative to other health plans such as UNH and Coventry Health Care, another Fund holding. The current share price weakness is an excellent opportunity for the company to step up and aggressively buy back shares.
Closing Comments
In my opinion, the real challenge to rising interest rates in this market environment (I have recently seen certificates of deposit paying 4.5%) is providing you with attractive
Janus Core, Risk-Managed and Value Funds April 30, 2006 29
Janus Growth and Income Fund (unaudited)
risk-adjusted returns (after expenses) and earning our keep in your investment portfolio. I welcome this challenge, as I am supported by a talented analyst pool. To achieve this, I am holding firm to my strategy of picking stocks one at a time and staying close to the best ideas generated by the Janus research team. Over 80% of the Fund is invested in stocks internally rated by the Janus investment team as "buy" or "strong buy."
Finally, I want you to know that a substantial portion of my discretionary investment dollars is invested along side you in this Fund. I believe that adhering to a disciplined buying and selling approach will continue to reward us over time. I promise to you my utmost effort in the quarters and years ahead.
Thank you for your continued investment.
(1) In a recent note, "World on the Mend," May 1, 2006, Mr. Roach wrote, "I am feeling better about the prognosis for the world economy for the first time in ages," noting that world's central banks are taking steps to carefully address these imbalances.
(2) To put some numbers around this statement: The top 10 positions are expected to comprise approximately 30% of the assets and the top 20 positions are expected to be approximately 50-55% of assets.
(3) A covered call transaction is one where the investor sells a call option against an underlying stock position. Covered call strategies may be viewed as one of the most conservative ways to have equity market exposure and have historically worked best in a period of moderate price appreciation.
(4) I use the term "structured note" as a generic reference to the Fund's equity derivative activities. These notes are characterized as fixed-income securities issued on the broker's medium-term note program with an equity price rider linked to the performance of the underlying stock or basket of stocks. The premium earned by selling the call option (or other derivative) is paid in the form of a monthly or quarterly coupon.
(5) The Canadian oil sands basin near Fort McMurray, Alberta, is one of the world's largest hydrocarbon resources with over 175 billion oil-equivalent barrels. The Suncor resource base today covers 12 billion barrels of bitumen – enough to produce 10 billion barrels of oil. Although many companies have some exposure to this resource, Suncor is the only large pure play on the oil sands.
(6) For background information, see the Wall Street Journal story "UnitedHealth Option Grants Raise Questions," on April 17, 2006, page C1.
Janus Growth and Income Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Advanced Micro Devices, Inc. Integrated circuits provider - U.S. | 2.07% | ||||||
Suncor Energy, Inc. Energy company - Canada | 2.02% | ||||||
Samsung Electronics Company, Ltd. Diversified electronics company - Korea | 0.64% | ||||||
Petro-Canada Oil and gas company - Canada | 0.59% | ||||||
Exxon Mobil Corp. Petroleum and petrochemical business operator - U.S. | 0.58% |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
UnitedHealth Group, Inc. Organized health systems company - U.S. | (0.56%) | ||||||
Aetna, Inc. Healthcare and related benefits provider - U.S. | (0.31%) | ||||||
Yahoo!, Inc. Global Internet media company - U.S. | (0.27%) | ||||||
Tiffany & Co. Jewelry and specialty retail store operator - U.S. | (0.22%) | ||||||
Caremark Rx, Inc. Provider of pharmacy benefit management services - U.S. | (0.20%) |
5 Largest Contributors to Performance – Sectors
Group | Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | ||||||||||||
Energy | 4.48 | % | 17.62 | % | 9.65 | % | |||||||||
Semiconductors & Semiconductor Equipment | 4.24 | % | 14.70 | % | 3.15 | % | |||||||||
Capital Goods | 1.68 | % | 8.32 | % | 8.71 | % | |||||||||
Technology Hardware & Equipment | 1.10 | % | 5.53 | % | 7.04 | % | |||||||||
Consumer Services | 0.94 | % | 2.49 | % | 1.65 | % |
5 Lowest Contributors/Detractors to Performance – Sectors
Group | Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | ||||||||||||
Healthcare Equipment & Services | (1.01 | %) | 7.90 | % | 5.17 | % | |||||||||
Software & Services | (0.06 | %) | 9.02 | % | 5.44 | % | |||||||||
Other* | (0.01 | %) | 0.01 | % | 0.00 | % | |||||||||
Real Estate | 0.00 | % | 0.00 | % | 0.79 | % | |||||||||
Food & Staples Retailing | 0.00 | % | 0.00 | % | 2.38 | % |
* Industry not classified by Global Industry Classification Standard.
30 Janus Core, Risk-Managed and Value Funds April 30, 2006
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2006 | |||||||
Advanced Micro Devices, Inc. Electronic Components - Semiconductors | 4.4 | % | |||||
Exxon Mobil Corp. Oil Companies - Integrated | 3.6 | % | |||||
General Electric Co. Diversified Operations | 3.4 | % | |||||
Suncor Energy, Inc. Oil Companies - Integrated | 3.3 | % | |||||
EnCana Corp. (U.S. Shares) Oil Companies - Exploration and Production | 2.6 | % | |||||
17.3 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2006 |
Emerging markets comprised 7.1% of total net assets.
5 Largest Country Allocations – (% of Investment Securities)
As of April 30, 2006 | As of October 31, 2005 | ||||||
![]() | ![]() | ||||||
Janus Core, Risk-Managed and Value Funds April 30, 2006 31
Janus Growth and Income Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | |||||||||||||||||||
Janus Growth and Income Fund | 13.79 | % | 25.82 | % | 3.44 | % | 12.02 | % | 13.80 | % | |||||||||||||
S&P 500® Index | 9.64 | % | 15.42 | % | 2.70 | % | 8.94 | % | 11.05 | % | |||||||||||||
Russell 1000® Growth Index | 7.06 | % | 15.18 | % | (0.76 | )% | 6.21 | % | 9.05 | % | |||||||||||||
Lipper Quartile | N/A | 1 | st | 1 | st | 1 | st | 1 | st | ||||||||||||||
Lipper Ranking - based on total return for Large-Cap Core Funds | N/A** | 35/864 | 90/618 | 5/240 | 5/96 |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes 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.
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.
*The Fund's inception date – May 15, 1991
**The Fund's fiscal year-to-date Lipper ranking is not available.
See "Explanations of Charts, Tables and Financial Statements."
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,137.90 | $ | 4.66 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.43 | $ | 4.41 |
*Expenses are equal to the annualized expense ratio of 0.88%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
32 Janus Core, Risk-Managed and Value Funds April 30, 2006
Janus Growth and Income Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Common Stock - 87.5% | |||||||||||
Advertising Sales - 1.1% | |||||||||||
1,373,175 | Lamar Advertising Co.* | $ | 75,510,893 | ||||||||
Aerospace and Defense - 1.7% | |||||||||||
1,464,225 | Boeing Co. | 122,189,576 | |||||||||
Agricultural Operations - 0.9% | |||||||||||
1,831,105 | Archer-Daniels-Midland Co.# | 66,542,356 | |||||||||
Applications Software - 2.0% | |||||||||||
5,879,577 | Microsoft Corp.# | 141,991,785 | |||||||||
Beverages - Non-Alcoholic - 1.8% | |||||||||||
2,201,353 | PepsiCo, Inc. | 128,206,799 | |||||||||
Building - Residential and Commercial - 0.7% | |||||||||||
64,885 | NVR, Inc.*,# | 48,988,175 | |||||||||
Casino Hotels - 1.0% | |||||||||||
914,115 | Harrah's Entertainment, Inc.# | 74,628,349 | |||||||||
Computers - 2.3% | |||||||||||
2,838,380 | Dell, Inc.*,# | 74,365,556 | |||||||||
2,703,765 | Hewlett-Packard Co. | 87,791,250 | |||||||||
162,156,806 | |||||||||||
Computers - Memory Devices - 1.0% | |||||||||||
5,550,900 | EMC Corp.* | 74,992,659 | |||||||||
Cosmetics and Toiletries - 2.3% | |||||||||||
2,826,515 | Procter & Gamble Co. | 164,531,438 | |||||||||
Dental Supplies and Equipment - 0.4% | |||||||||||
3,135,720 | Align Technology, Inc.*,£ | 27,562,979 | |||||||||
Diversified Operations - 4.1% | |||||||||||
6,974,606 | General Electric Co. | 241,251,622 | |||||||||
23,101,000 | Melco International Development, Ltd. | 51,992,371 | |||||||||
293,243,993 | |||||||||||
Electric - Generation - 0.2% | |||||||||||
915,305 | AES Corp.*,# | 15,532,726 | |||||||||
Electronic Components - Semiconductors - 9.7% | |||||||||||
9,723,760 | Advanced Micro Devices, Inc.*,# | 314,563,635 | |||||||||
1,563,796 | NVIDIA Corp.*,# | 45,694,119 | |||||||||
116,483 | Samsung Electronics Company, Ltd. | 79,532,498 | |||||||||
421,111 | Samsung Electronics Company, Ltd. (GDR) | 143,598,850 | |||||||||
1,964,730 | Spansion, Inc. - Class A*,# | 33,636,178 | |||||||||
2,252,018 | Texas Instruments, Inc.# | 78,167,545 | |||||||||
695,192,825 | |||||||||||
Electronic Forms - 0.5% | |||||||||||
917,615 | Adobe Systems, Inc.*,# | 35,970,508 | |||||||||
Enterprise Software/Services - 1.9% | |||||||||||
9,416,645 | Oracle Corp.* | 137,388,851 | |||||||||
Entertainment Software - 1.4% | |||||||||||
1,828,172 | Electronic Arts, Inc.*,# | 103,840,170 | |||||||||
Finance - Investment Bankers/Brokers - 4.5% | |||||||||||
3,564,140 | Citigroup, Inc. | 178,028,793 | |||||||||
3,222,795 | JP Morgan Chase & Co. | 146,250,437 | |||||||||
324,279,230 | |||||||||||
Finance - Mortgage Loan Banker - 1.8% | |||||||||||
2,563,115 | Fannie Mae | 129,693,619 | |||||||||
Food - Canned - 0.4% | |||||||||||
1,140,238 | TreeHouse Foods, Inc.* | 29,874,236 |
Shares or Principal Amount | Value | ||||||||||
Food - Dairy Products - 1.3% | |||||||||||
2,330,900 | Dean Foods Co.* | $ | 92,326,949 | ||||||||
Hotels and Motels - 0.7% | |||||||||||
880,500 | Four Seasons Hotels, Inc. | 47,564,610 | |||||||||
Industrial Automation and Robotics - 1.4% | |||||||||||
1,398,900 | Rockwell Automation, Inc.# | 101,364,294 | |||||||||
Medical - Drugs - 3.6% | |||||||||||
1,048,102 | Roche Holding A.G.** | 161,161,951 | |||||||||
1,054,610 | Sanofi-Aventis**,# | 99,455,109 | |||||||||
260,617,060 | |||||||||||
Medical - HMO - 4.9% | |||||||||||
2,986,700 | Aetna, Inc.# | 114,987,950 | |||||||||
1,104,285 | Coventry Health Care, Inc.* | 54,849,836 | |||||||||
3,709,146 | UnitedHealth Group, Inc. | 184,492,922 | |||||||||
354,330,708 | |||||||||||
Networking Products - 1.3% | |||||||||||
4,465,025 | Cisco Systems, Inc.*,# | 93,542,274 | |||||||||
Oil - Field Services - 1.1% | |||||||||||
1,016,525 | Halliburton Co.# | 79,441,429 | |||||||||
Oil Companies - Exploration and Production - 3.2% | |||||||||||
548,485 | Apache Corp.# | 38,964,374 | |||||||||
3,786,814 | EnCana Corp. (U.S. Shares)# | 189,530,041 | |||||||||
228,494,415 | |||||||||||
Oil Companies - Integrated - 9.6% | |||||||||||
617,060 | Amerada Hess Corp.# | 88,406,186 | |||||||||
4,101,685 | Exxon Mobil Corp. | 258,734,289 | |||||||||
2,186,148 | Petro-Canada | 107,542,722 | |||||||||
2,753,449 | Suncor Energy, Inc. | 235,781,232 | |||||||||
690,464,429 | |||||||||||
Oil Refining and Marketing - 1.7% | |||||||||||
1,831,660 | Valero Energy Corp. | 118,581,668 | |||||||||
Pharmacy Services - 1.0% | |||||||||||
1,576,120 | Caremark Rx, Inc. | 71,792,266 | |||||||||
Retail - Consumer Electronics - 0.6% | |||||||||||
821,762 | Best Buy Company, Inc. | 46,561,035 | |||||||||
Retail - Jewelry - 1.2% | |||||||||||
2,361,380 | Tiffany & Co.# | 82,388,548 | |||||||||
Retail - Pet Food and Supplies - 1.0% | |||||||||||
2,485,120 | PETsMART, Inc.# | 68,738,419 | |||||||||
Semiconductor Components/Integrated Circuits - 1.6% | |||||||||||
1,640,435 | Linear Technology Corp.# | 58,235,443 | |||||||||
1,652,165 | Maxim Integrated Products, Inc.# | 58,255,337 | |||||||||
116,490,780 | |||||||||||
Shipbuilding - 0.9% | |||||||||||
2,228,130 | Daewoo Shipbuilding & Marine Engineering Company, Ltd. | 65,081,617 | |||||||||
Steel - Producers - 1.7% | |||||||||||
8,387,246 | Tata Steel, Ltd. | 118,458,175 | |||||||||
Super-Regional Banks - 1.4% | |||||||||||
3,277,328 | U.S. Bancorp# | 103,039,192 | |||||||||
Telecommunication Services - 0.6% | |||||||||||
4,575,740 | Bharti Tele-Ventures, Ltd.* | 41,344,715 | |||||||||
Television - 1.6% | |||||||||||
11,662,332 | British Sky Broadcasting Group PLC | 111,757,458 |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2006 33
Janus Growth and Income Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Therapeutics - 0.7% | |||||||||||
834,205 | Neurocrine Biosciences, Inc.* | $ | 47,849,999 | ||||||||
Tobacco - 0.9% | |||||||||||
920,690 | Altria Group, Inc. | 67,357,680 | |||||||||
Toys - 1.1% | |||||||||||
3,859,747 | Marvel Entertainment, Inc.*,# | 75,303,664 | |||||||||
Transportation - Railroad - 1.1% | |||||||||||
1,739,834 | Canadian National Railway Co. (U.S. Shares) | 78,135,945 | |||||||||
Transportation - Services - 1.0% | |||||||||||
917,610 | United Parcel Service, Inc. - Class B# | 74,390,643 | |||||||||
Web Portals/Internet Service Providers - 1.6% | |||||||||||
3,420,465 | Yahoo!, Inc.* | 112,122,843 | |||||||||
Wireless Equipment - 1.0% | |||||||||||
3,140,655 | Nokia Oyj (ADR)**,# | 71,167,242 | |||||||||
Total Common Stock (cost $4,679,232,684) | 6,271,026,030 | ||||||||||
Preferred Stock - 1.9% | |||||||||||
Electronic Components - Semiconductors - 0.9% | |||||||||||
114,660 | Samsung Electronics Company, Ltd. | 62,119,656 | |||||||||
Oil Companies - Integrated - 1.0% | |||||||||||
579,900 | Amerada Hess Corp., convertible, 7.00%# | 69,941,739 | |||||||||
Total Preferred Stock (cost $74,919,234) | 132,061,395 | ||||||||||
Equity-Linked Structured Notes - 9.9% | |||||||||||
Finance - Investment Bankers/Brokers - 8.4% | |||||||||||
Goldman Sachs Group, Inc.: | |||||||||||
376,525 | convertible, (Amerada Hess Corp.) 8.50%ß | 54,558,849 | |||||||||
323,195 | convertible, (Amerada Hess Corp.) 19.45%ß | 47,428,220 | |||||||||
621,120 | convertible, (Apple Computer, Inc.) 25.8%ß | 44,820,640 | |||||||||
643,625 | convertible, (Suncor Energy, Inc.), 9.05%ß | 52,230,169 | |||||||||
Lehman Brothers Holdings, Inc.: | |||||||||||
1,154,678 | convertible, (Advanced Micro Devices, Inc.) 0%ß | 42,988,662 | |||||||||
1,154,678 | convertible, (Advanced Micro Devices, Inc.) 20.00%ß | 40,286,715 | |||||||||
614,510 | convertible, (SanDisk Corp.), 28.20%ß | 40,932,511 | |||||||||
324,145 | convertible, (Whole Foods Market, Inc.) 18.55%ß | 46,069,108 | |||||||||
Merrill Lynch & Company, Inc.: | |||||||||||
82,498 | convertible, (Google, Inc.), 5.30% (144A)§ | 32,173,395 | |||||||||
943,486 | convertible, (Valero Energy Corp.) 16.55% (144A)§ | 57,231,860 | |||||||||
Morgan Stanley Co.: | |||||||||||
1,186,640 | convertible, (Amylin Pharmaceuticals, Inc.) 12.00% (144A)§ | 53,007,210 | |||||||||
2,249,985 | convertible, (Juniper Networks, Inc.) 13.00% (144A)§ | 42,052,220 | |||||||||
474,415 | convertible, (Neurocrine Biosciences, Inc.) 7.25%ß | 26,168,731 | |||||||||
4,540,525 | convertible, (Sirius Satellite Radio, Inc.) 14.00% (144A)§ | 22,793,436 | |||||||||
602,741,726 |
Shares or Principal Amount | Value | ||||||||||
Special Purpose Entity - 1.5% | |||||||||||
944,558 | Allegro Investment Corporation S.A. convertible, (SanDisk Corp.), 20.65%**,ß | $ | 59,332,316 | ||||||||
415,530 | IXIS Financial Products, Inc., convertible (Alcon, Inc.), 20.90% (144A)§ | 45,604,418 | |||||||||
104,936,734 | |||||||||||
Total Equity-Linked Structured Notes (cost $722,299,863) | 707,678,460 | ||||||||||
Money Market - 0.4% | |||||||||||
30,000,000 | Janus Institutional Cash Reserves Fund 4.83% (cost $30,000,000) | 30,000,000 | |||||||||
Other Securities - 5.6% | |||||||||||
399,818,545 | State Street Navigator Securities Lending Prime Portfolio† (cost $399,818,545) | 399,818,545 | |||||||||
Time Deposit - 0.1% | |||||||||||
$ | 8,700,000 | ING Financial, ETD 4.86%, 5/1/06 (cost $8,700,000) | 8,700,000 | ||||||||
Total Investments (total cost $5,914,970,326) – 105.4% | 7,549,284,430 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (5.4)% | (389,948,463 | ) | |||||||||
Net Assets – 100% | $ | 7,159,335,967 |
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Canada | $ | 658,554,550 | 8.7 | % | |||||||
Finland | 71,167,242 | 1.0 | % | ||||||||
France | 99,455,109 | 1.3 | % | ||||||||
Hong Kong | 51,992,371 | 0.7 | % | ||||||||
India | 159,802,890 | 2.1 | % | ||||||||
Luxembourg | 59,332,316 | 0.8 | % | ||||||||
South Korea | 350,332,621 | 4.6 | % | ||||||||
Switzerland | 161,161,951 | 2.1 | % | ||||||||
United Kingdom | 111,757,458 | 1.5 | % | ||||||||
United States†† | 5,825,727,922 | 77.2 | % | ||||||||
Total | $ | 7,549,284,430 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (71.4% excluding Short-Term Securities and Other Securities)
Forward Currency Contracts, Open
Currency Sold and Settlement Date | Currency Units Sold | Currency Value in $ U.S. | Unrealized Gain/(Loss) | ||||||||||||
Euro 6/28/06 | 29,400,000 | $ | 37,231,139 | $ | (846,875 | ) | |||||||||
Euro 10/19/06 | 4,500,000 | 5,736,498 | (84,926 | ) | |||||||||||
Swiss Franc 6/28/06 | 31,850,000 | 25,856,932 | (278,712 | ) | |||||||||||
Swiss Franc 8/10/06 | 26,300,000 | 21,448,023 | (1,073,693 | ) | |||||||||||
Total | $ | 90,272,592 | $ | (2,284,206 | ) |
See Notes to Schedules of Investments and Financial Statements.
34 Janus Core, Risk-Managed and Value Funds April 30, 2006
Janus 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
Performance Overview
Continued economic prosperity around the globe lifted equity markets during the six-month period ended April 30, 2006. Investors shrugged off rising commodity prices and volatile energy markets to push numerous equity indices to five-year highs as continued growth around the world kept international markets strong. Major indices in the U.S. joined in the rally, although four more quarter-point interest rate hikes somewhat dampened domestic sentiments.
During the period, Janus Research Fund, which is roughly equally-weighted between U.S. stocks and international stocks, advanced 18.17%, handily outperforming its primary benchmark, the Russell 1000® Index, which returned 9.92%. It also outperformed its secondary benchmark, the Russell 3000® Index, which returned 10.70%.
It is important to point out the broad-based nature of the Fund's gains during the six-month period. The Fund is managed as roughly sector neutral relative to the Russell 1000® Index, so it was encouraging to see that the Fund outperformed the Index in eight out of eleven sectors. In addition to its lack of concentration in individual sectors, the Fund also has a low level of concentration in individual securities, with the top ten holdings representing only 17% of assets. So while the Fund had its share of big winners during the six-month period, it was consistency of stock selection across a wide range of sectors and holdings that drove outperformance. We will continue to strive to achieve our objective of delivering strong risk-adjusted returns by investing in a highly diversified portfolio of best ideas from the Janus research team.
Holdings that Contributed to Fund Performance
Contributions to performance came from a broad range of Fund holdings, led by biotechnology firm Alexion Pharmaceuticals. This pick by analyst Andy Acker focuses on treatments for autoimmune diseases and cancer. Its share price jumped after the company reported positive developments in Phase III trials of its Soliris treatment for a rare form of anemia. Pleased with the stock's performance and committed to our sell discipline, we locked in profits by liquidating our position when we felt it had reached full value.
Janus' research efforts truly span the globe and the Fund certainly profited from its overseas exposure during the period. More specifically, All America Latina Logistica, a Brazilian railroad operator, and CapitaLand, a Singapore-based real estate developer, ranked among the top individual performers.
All America Latina Logistica, a company that Janus Research Analyst Laurent Saltiel follows, profited from Brazil's robust commodities industry, which relies on rail service providers to move large quantities of raw materials and agricultural products. Despite widespread soybean crop losses caused by a drought in Southern Brazil, the railroad reported more than 30% growth in cash flow and nearly a 14% increase in net income for 2005 thanks to solid demand growth for other commodities and tight cost controls. We think this is a well run business with a strong and sustainable competitive advantage and attractive long-term growth prospects.
With operations in 17 countries, CapitaLand is a leading commercial property and management company in Asia, Australia and Europe. It's viewed as a top partner for overseas entities hoping to enter its markets, as evidenced by its relationship with MGM Mirage in the bidding for the first casino within Singapore. Analyst Stephen Lew also explored CapitaLand's agreement with Wal-Mart Stores and determined that it is an attractive way to invest in the growth of the Chinese consumer. Having enjoyed some appreciation, we trimmed our position and booked some profits during the period.
We exited International Securities Exchange (ISE), a leading gainer from the financial services sector. The electronic options marketplace operator surged during the period as a number of high-profile financial exchanges went public and awareness of the group heightened. Although ISE is a solid small-cap growth stock, in our opinion, and holds a good market position, we opted to cash out as it reached our target price. Interestingly, our experience with ISE demonstrates the flexibility of our analyst team: small-cap analyst Chad Meade doesn't necessarily focus on the financial industry, but he discovered the company, did the necessary work and helped us profit from it.
The Fund's stake in oil services company Schlumberger rallied as well. Despite the headlines surrounding the price of oil, exploration and production, companies have been hesitant to hike capital investment levels. However, the longer crude oil prices linger above $55 a barrel and spending plans start to expand, we believe Schlumberger, the largest company in the services group, stands to benefit. Analyst Geoff Jay also believes Schlumberger's commitment to innovation will further set it apart from its peers, especially if demand for drilling equipment continues to pick up.
Holdings that Detracted from Fund Performance
On the flip side, United Therapeutics' stock tumbled as the biotechnology firm's revenues and earnings slumped. Despite the short-term turbulence, prospects for the company's Remodulin treatment for high blood pressure remain solid, in our opinion, especially as an investigational inhaled version advances through clinical trials. Analyst Andy Acker also sees a potential lift from the firm's Ovarex drug, an ovarian cancer antibody that is currently in Phase III clinical trials, and recent expansion of its sales force.
It is not unusual for a portion of the Fund to include recent underperformers in the market. Buying businesses at attractive valuations is critical to our investment approach. So while we require good growth prospects, we are not averse to contrarian thinking in looking for good businesses that are beaten up in the marketplace for what we believe are the wrong reasons. By being opportunistic and investing in companies far from the spotlight, we believe we will ultimately realize superior returns.
This philosophy helps explain our thinking on telecommunications equipment manufacturer Juniper Networks, which specializes in Internet protocol networking gear.
Janus Core, Risk-Managed and Value Funds April 30, 2006 35
Janus Research Fund (unaudited)
Though this stock performed poorly during the period, analyst Brad Slingerlend believes a recovery in capital spending among large telecommunications companies will play out over a number of years, especially in light of recent consolidation among national service providers. We're content to see how trends – including some stirring of merger and acquisition activity within the equipment space – develop, and maintained our position.
While reviewing the Fund's leading contributors and detractors helps explain its outperformance during the past six months, it is important to note that our risk-adjusted returns are impressive. By building a broadly diversified portfolio, where no individual sector or stock dominates, the chance that a single event will significantly undercut performance is reduced.
We are Steadfastly Focused on Generating Consistent Investment Returns
- The Janus research team is in the best shape it has ever been. We have a stable and experienced investment team of 33 equity analysts averaging over 9 years of experience. Experienced analysts who have been through market cycles in their sector provide valuable perspective which may allow us to better navigate market downturns.
- Our research team pursues an in-depth and differentiated research process focused on end-market research. This focus allows us to pick up on inflection points in industries and sectors in an attempt to avoid experiencing our "fair share" of negative surprises in our Fund.
- Our valuation discipline is based on long-term generation of free cash flow which yields well-grounded price targets. Our use of scenario analysis also forces us to think about downside scenarios.
- Janus has developed a robust risk-management process. While our objective is to develop a research edge and invest with conviction in our Fund, we seek to do this in a disciplined and thoughtful way, in an attempt to understand and manage our risks.
- Our broad research coverage enables us to create a portfolio of best ideas from the Janus research team which is highly diversified across market caps, sectors, geographies and investment styles.
Summary
We are very pleased with Janus Research Fund's performance over the last six months, both on an absolute basis and relative to the primary benchmark, the Russell 1000® Index. We would also like to caution investors that the margin of outperformance of the Fund versus the Index during the six months (18.17% vs. 9.92%) and since its inception is not sustainable. We are particularly excited, though, about the investment process and disciplines that are in place to help drive consistently strong investment results.
Thank you for your investment in Janus Research Fund.
Janus Research Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Alexion Pharmaceuticals, Inc. Biopharmaceutical company - U.S. | 1.17% | ||||||
Reliance Industries, Ltd. Industrial conglomerate with multiple lines of business - India | 0.97% | ||||||
All America Latina Logistica (GDR) Freight transporter - Brazil | 0.82% | ||||||
Suncor Energy, Inc. Energy company - Canada | 0.82% | ||||||
Schlumberger, Ltd. (U.S. Shares) Oil services company - U.S. | 0.78% |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
United Therapeutics Corp. Biotechnology company - U.S. | (0.26%) | ||||||
Reliant Energy, Inc. Energy company - U.S. | (0.26%) | ||||||
Juniper Networks, Inc. Internet infrastructure solutions provider - U.S. | (0.24%) | ||||||
Patterson Companies, Inc. Dental, veterinary and rehabilitation supplies distributor - U.S. | (0.20%) | ||||||
Alcon, Inc. (U.S. Shares) Eye care company - U.S. | (0.18%) |
5 Largest Contributors to Performance – Sectors
Group | Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | ||||||||||||
Energy | 3.92 | % | 8.75 | % | 8.75 | % | |||||||||
Diversified Financials | 2.68 | % | 8.18 | % | 7.82 | % | |||||||||
Pharmaceuticals & Biotechnology | 1.91 | % | 9.55 | % | 7.74 | % | |||||||||
Real Estate | 1.24 | % | 2.39 | % | 1.95 | % | |||||||||
Materials | 1.21 | % | 4.88 | % | 3.16 | % |
5 Lowest Contributors/Detractors to Performance – Sectors
Group | Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | ||||||||||||
Utilities | (0.08 | %) | 2.01 | % | 3.63 | % | |||||||||
Healthcare Equipment & Services | (0.02 | %) | 6.96 | % | 5.43 | % | |||||||||
Other* | 0.02 | % | 0.01 | % | 0.00 | % | |||||||||
Insurance | 0.04 | % | 3.12 | % | 4.29 | % | |||||||||
Food & Staples Retailing | 0.14 | % | 2.63 | % | 2.20 | % |
* Industry not classified by Global Industry Classification Standard.
36 Janus Core, Risk-Managed and Value Funds April 30, 2006
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2006 | |||||||
Reckitt Benckiser PLC Soap and Cleaning Preparations | 2.0 | % | |||||
Tata Steel, Ltd. Steel - Producers | 1.9 | % | |||||
Reliance Industries, Ltd. Oil Refining and Marketing | 1.9 | % | |||||
Pernod Ricard S.A. Beverages - Wine and Spirits | 1.7 | % | |||||
Metro A.G. Food - Retail | 1.7 | % | |||||
9.2 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2006 |
Emerging markets comprised 11.3% of total net assets.
5 Largest Country Allocations – (% of Investment Securities)
As of April 30, 2006 | As of October 31, 2005 | ||||||
![]() | ![]() | ||||||
Janus Core, Risk-Managed and Value Funds April 30, 2006 37
Janus Research Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Since Inception* | |||||||||||||
Janus Research Fund | 18.17 | % | 37.04 | % | 26.06 | % | |||||||||
Russell 1000® Index | 9.92 | % | 16.71 | % | 10.14 | % | |||||||||
Russell 3000® Index | 10.70 | % | 18.08 | % | 10.83 | % | |||||||||
Lipper Quartile | N/A | 1 | st | 1 | st | ||||||||||
Lipper Ranking - based on total return for Multi-Cap Growth Funds | N/A** | 31/423 | 26/410 |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes 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.
*The Fund's inception date – February 25, 2005
**The Fund's fiscal year-to-date Lipper ranking is not available.
See "Explanations of Charts, Tables and Financial Statements."
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
Janus Capital Management LLC has contractually agreed to waive the Fund's total operating expenses to levels indicated in the prospectus until at least March 1, 2007. Without such waivers, the Fund's total return would have been lower.
There is no assurance that the investment process will consistently lead to successful investing.
Foreign investing involves special risks such as currency fluctuations and political uncertainty.
The Fund may have significant exposure to emerging markets. In general, emerging market investments have historically been subject to significant gains and/or losses. As such, the Fund's returns and NAV may be subject to such volatility.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,181.70 | $ | 6.27 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.04 | $ | 5.81 |
*Expenses are equal to the annualized expense ratio of 1.16%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital.
38 Janus Core, Risk-Managed and Value Funds April 30, 2006
Janus Research Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Common Stock - 99.3% | |||||||||||
Advertising Sales - 0.4% | |||||||||||
7,055 | Lamar Advertising Co.* | $ | 387,954 | ||||||||
Advertising Services - 1.4% | |||||||||||
100,268 | WPP Group PLC** | 1,237,854 | |||||||||
Aerospace and Defense - 1.8% | |||||||||||
66,876 | BAE Systems PLC** | 509,149 | |||||||||
12,525 | Boeing Co. | 1,045,212 | |||||||||
1,554,361 | |||||||||||
Agricultural Chemicals - 2.6% | |||||||||||
15,095 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares)** | 1,429,195 | |||||||||
1,394 | Syngenta A.G.*,** | 194,454 | |||||||||
23,305 | Syngenta A.G. (ADR)*,** | 647,413 | |||||||||
2,271,062 | |||||||||||
Agricultural Operations - 0.5% | |||||||||||
7,850 | Bunge, Ltd. | 418,798 | |||||||||
Apparel Manufacturers - 0.8% | |||||||||||
43,791 | Burberry Group PLC** | 376,518 | |||||||||
9,465 | Coach, Inc.* | 312,534 | |||||||||
689,052 | |||||||||||
Applications Software - 0.5% | |||||||||||
17,465 | Microsoft Corp. | 421,780 | |||||||||
Athletic Footwear - 0.4% | |||||||||||
4,030 | NIKE, Inc. - Class B | 329,815 | |||||||||
Audio and Video Products - 0.7% | |||||||||||
12,600 | Sony Corp.** | 632,960 | |||||||||
Automotive - Cars and Light Trucks - 2.0% | |||||||||||
15,885 | BMW A.G.** | 864,753 | |||||||||
5,030 | Hyundai Motor Company, Ltd.** | 442,098 | |||||||||
30,600 | Nissan Motor Company, Ltd.** | 402,303 | |||||||||
1,709,154 | |||||||||||
Beverages - Wine and Spirits - 1.7% | |||||||||||
7,753 | Pernod Ricard S.A.** | 1,503,376 | |||||||||
Broadcast Services and Programming - 0.4% | |||||||||||
18,875 | Liberty Global, Inc. - Class A* | 390,901 | |||||||||
Building - Residential and Commercial - 0.6% | |||||||||||
370 | NVR, Inc.* | 279,350 | |||||||||
7,355 | Pulte Homes, Inc. | 274,709 | |||||||||
554,059 | |||||||||||
Casino Hotels - 0.4% | |||||||||||
4,740 | Harrah's Entertainment, Inc. | 386,974 | |||||||||
Casino Services - 0.2% | |||||||||||
5,310 | Scientific Games Corp. - Class A* | 202,258 | |||||||||
Cellular Telecommunications - 2.3% | |||||||||||
206,000 | China Mobile, Ltd. | 1,198,277 | |||||||||
12,900 | Hikari Tsushin, Inc.** | 797,576 | |||||||||
1,995,853 | |||||||||||
Chemicals - Diversified - 0.6% | |||||||||||
8,700 | Shin-Etsu Chemical Company, Ltd.** | 502,753 | |||||||||
Commercial Banks - 0.5% | |||||||||||
15,573 | Standard Chartered PLC** | 413,478 | |||||||||
Commercial Services - Finance - 0.5% | |||||||||||
9,990 | Paychex, Inc. | 403,496 |
Shares or Principal Amount | Value | ||||||||||
Computer Services - 0.4% | |||||||||||
14,815 | Ceridian Corp.* | $ | 358,967 | ||||||||
Computers - 0.4% | |||||||||||
5,335 | Apple Computer, Inc.* | 375,531 | |||||||||
Computers - Memory Devices - 1.0% | |||||||||||
33,845 | EMC Corp.* | 457,246 | |||||||||
6,220 | SanDisk Corp.* | 397,023 | |||||||||
854,269 | |||||||||||
Computers - Peripheral Equipment - 0.7% | |||||||||||
14,740 | Logitech International S.A.*,** | 612,087 | |||||||||
Containers - Metal and Glass - 2.1% | |||||||||||
11,280 | Ball Corp. | 450,974 | |||||||||
74,470 | Owens-Illinois, Inc.* | 1,361,312 | |||||||||
1,812,286 | |||||||||||
Cosmetics and Toiletries - 1.8% | |||||||||||
10,245 | Colgate-Palmolive Co. | 605,684 | |||||||||
16,420 | Procter & Gamble Co. | 955,809 | |||||||||
1,561,493 | |||||||||||
Data Processing and Management - 0.7% | |||||||||||
14,450 | NAVTEQ Corp.* | 599,964 | |||||||||
Dental Supplies and Equipment - 0.4% | |||||||||||
10,185 | Patterson Companies, Inc.* | 331,827 | |||||||||
Diagnostic Kits - 0.5% | |||||||||||
10,140 | Dade Behring Holdings, Inc. | 395,460 | |||||||||
Distribution/Wholesale - 1.5% | |||||||||||
83,000 | Esprit Holdings, Ltd. | 662,646 | |||||||||
276,000 | Li & Fung, Ltd. | 654,999 | |||||||||
1,317,645 | |||||||||||
Diversified Operations - 4.3% | |||||||||||
22,480 | General Electric Co. | 777,583 | |||||||||
88,000 | Hutchison Whampoa, Ltd. | 863,735 | |||||||||
3,434 | Louis Vuitton Moet Hennessy S.A.** | 361,535 | |||||||||
303,000 | Melco International Development, Ltd. | 681,948 | |||||||||
39,885 | Tyco International, Ltd. (U.S. Shares) | 1,050,970 | |||||||||
3,735,771 | |||||||||||
E-Commerce/Products - 0.6% | |||||||||||
20,300 | Submarino S.A.* | 549,569 | |||||||||
E-Commerce/Services - 0.8% | |||||||||||
24,270 | IAC/InterActiveCorp* | 700,675 | |||||||||
Electric - Generation - 0.9% | |||||||||||
47,775 | AES Corp.* | 810,742 | |||||||||
Electric Products - Miscellaneous - 0.7% | |||||||||||
101,000 | Toshiba Corp.** | 643,086 | |||||||||
Electronic Components - Semiconductors - 3.8% | |||||||||||
24,320 | Advanced Micro Devices, Inc.* | 786,751 | |||||||||
262,522 | ARM Holdings PLC** | 651,063 | |||||||||
12,870 | Microsemi Corp.* | 351,608 | |||||||||
870 | Samsung Electronics Company, Ltd.** | 594,020 | |||||||||
10,790 | SiRF Technology Holdings, Inc.* | 368,479 | |||||||||
15,520 | Texas Instruments, Inc. | 538,699 | |||||||||
3,290,620 | |||||||||||
Electronic Forms - 0.5% | |||||||||||
10,100 | Adobe Systems, Inc.* | 395,920 |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2006 39
Janus Research Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Energy - Alternate Sources - 0.5% | |||||||||||
13,900 | Suntech Power Holdings Company, Ltd. (ADR)* | $ | 476,631 | ||||||||
Enterprise Software/Services - 1.0% | |||||||||||
34,515 | Oracle Corp.* | 503,574 | |||||||||
1,560 | SAP A.G.** | 341,270 | |||||||||
844,844 | |||||||||||
Entertainment Software - 1.0% | |||||||||||
31,200 | Activision, Inc.* | 442,728 | |||||||||
7,350 | Electronic Arts, Inc.* | 417,480 | |||||||||
860,208 | |||||||||||
Finance - Consumer Loans - 0.3% | |||||||||||
3,950 | Promise Company, Ltd.** | 243,525 | |||||||||
Finance - Credit Card - 1.4% | |||||||||||
13,595 | American Express Co. | 731,547 | |||||||||
9,000 | Credit Saison Company, Ltd.** | 471,875 | |||||||||
1,203,422 | |||||||||||
Finance - Investment Bankers/Brokers - 3.5% | |||||||||||
17,735 | JP Morgan Chase & Co. | 804,813 | |||||||||
9,625 | Merrill Lynch & Company, Inc. | 734,003 | |||||||||
26,000 | Mitsubishi UFJ Securities Company, Ltd.** | 409,643 | |||||||||
21,710 | optionsXpress Holdings, Inc. | 683,865 | |||||||||
3,664 | UBS A.G.** | 434,291 | |||||||||
3,066,615 | |||||||||||
Finance - Mortgage Loan Banker - 0.8% | |||||||||||
14,160 | Fannie Mae | 716,496 | |||||||||
Food - Dairy Products - 1.2% | |||||||||||
25,835 | Dean Foods Co.* | 1,023,324 | |||||||||
Food - Retail - 2.3% | |||||||||||
26,331 | Metro A.G.** | 1,490,220 | |||||||||
9,175 | Whole Foods Market, Inc. | 563,162 | |||||||||
2,053,382 | |||||||||||
Food - Wholesale/Distribution - 0.6% | |||||||||||
18,815 | Sysco Corp. | 562,380 | |||||||||
Independent Power Producer - 1.0% | |||||||||||
18,215 | NRG Energy, Inc.* | 866,852 | |||||||||
Insurance Brokers - 0.4% | |||||||||||
12,480 | Marsh & McLennan Companies, Inc. | 382,762 | |||||||||
Internet Infrastructure Software - 0.4% | |||||||||||
11,340 | Akamai Technologies, Inc.* | 382,045 | |||||||||
Internet Security - 0.6% | |||||||||||
28,240 | Check Point Software Technologies, Ltd. (U.S. Shares)* | 546,444 | |||||||||
Investment Management and Advisory Services - 0.5% | |||||||||||
8,505 | National Financial Partners Corp. | 442,260 | |||||||||
Medical - Biomedical and Genetic - 2.5% | |||||||||||
8,670 | Amgen, Inc.* | 586,959 | |||||||||
22,435 | Celgene Corp.* | 945,860 | |||||||||
7,800 | Genentech, Inc.* | 621,738 | |||||||||
2,154,557 | |||||||||||
Medical - Drugs - 3.3% | |||||||||||
14,490 | Abbott Laboratories | 619,303 | |||||||||
17,205 | Cubist Pharmaceuticals, Inc.* | 390,037 | |||||||||
17,005 | Forest Laboratories, Inc.* | 686,661 | |||||||||
7,883 | Roche Holding A.G.** | 1,212,133 | |||||||||
2,908,134 |
Shares or Principal Amount | Value | ||||||||||
Medical - Generic Drugs - 1.3% | |||||||||||
28,005 | Teva Pharmaceutical Industries, Ltd. (ADR) | $ | 1,134,203 | ||||||||
Medical - HMO - 1.6% | |||||||||||
4,110 | Aetna, Inc. | 158,235 | |||||||||
10,640 | Coventry Health Care, Inc.* | 528,489 | |||||||||
14,335 | UnitedHealth Group, Inc. | 713,023 | |||||||||
1,399,747 | |||||||||||
Medical - Nursing Homes - 0.8% | |||||||||||
15,695 | Manor Care, Inc. | 688,226 | |||||||||
Medical Instruments - 0.6% | |||||||||||
4,025 | Intuitive Surgical, Inc.* | 511,175 | |||||||||
Medical Products - 0.7% | |||||||||||
11,620 | Varian Medical Systems, Inc.* | 608,656 | |||||||||
Networking Products - 0.5% | |||||||||||
23,845 | Juniper Networks, Inc.* | 440,656 | |||||||||
Oil - Field Services - 1.6% | |||||||||||
20,810 | Schlumberger, Ltd. (U.S. Shares)** | 1,438,803 | |||||||||
Oil Companies - Exploration and Production - 2.6% | |||||||||||
12,695 | Apache Corp. | 901,853 | |||||||||
27,437 | EnCana Corp.** | 1,371,298 | |||||||||
2,273,151 | |||||||||||
Oil Companies - Integrated - 2.7% | |||||||||||
16,275 | Lukoil (ADR) | 1,474,514 | |||||||||
10,741 | Suncor Energy, Inc.** | 919,765 | |||||||||
2,394,279 | |||||||||||
Oil Refining and Marketing - 1.9% | |||||||||||
74,479 | Reliance Industries, Ltd. | 1,673,538 | |||||||||
Optical Supplies - 1.1% | |||||||||||
9,580 | Alcon, Inc. (U.S. Shares)** | 974,382 | |||||||||
Property and Casualty Insurance - 0.5% | |||||||||||
3,139 | Samsung Fire & Marine Insurance Company, Ltd.** | 450,948 | |||||||||
Real Estate Management/Services - 0.3% | |||||||||||
13,000 | Mitsubishi Estate Company, Ltd.** | 284,284 | |||||||||
Real Estate Operating/Development - 1.2% | |||||||||||
328,000 | CapitaLand, Ltd. | 1,016,636 | |||||||||
Recreational Vehicles - 0.4% | |||||||||||
7,050 | Polaris Industries, Inc. | 337,695 | |||||||||
Reinsurance - 0.8% | |||||||||||
244 | Berkshire Hathaway, Inc. - Class B* | 720,288 | |||||||||
Retail - Apparel and Shoe - 1.2% | |||||||||||
17,416 | Industria de Diseno Textil S.A.** | 708,602 | |||||||||
8,255 | Nordstrom, Inc. | 316,414 | |||||||||
1,025,016 | |||||||||||
Retail - Computer Equipment - 0.3% | |||||||||||
5,250 | GameStop Corp. - Class A* | 247,800 | |||||||||
Retail - Office Supplies - 0.4% | |||||||||||
14,390 | Staples, Inc. | 380,040 | |||||||||
Retail - Regional Department Stores - 0.7% | |||||||||||
4,725 | Federated Department Stores, Inc. | 367,842 | |||||||||
4,535 | Kohl's Corp.* | 253,234 | |||||||||
621,076 |
See Notes to Schedules of Investments and Financial Statements.
40 Janus Core, Risk-Managed and Value Funds April 30, 2006
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Schools - 0.3% | |||||||||||
4,115 | Apollo Group, Inc. - Class A* | $ | 224,844 | ||||||||
Semiconductor Components/Integrated Circuits - 1.0% | |||||||||||
27,210 | Cypress Semiconductor Corp.* | 466,923 | |||||||||
12,945 | Maxim Integrated Products, Inc. | 456,441 | |||||||||
923,364 | |||||||||||
Semiconductor Equipment - 0.7% | |||||||||||
30,275 | ASM Lithography Holding N.V. (U.S. Shares)*,** | 640,316 | |||||||||
Soap and Cleaning Preparations - 2.0% | |||||||||||
47,030 | Reckitt Benckiser PLC** | 1,714,376 | |||||||||
Steel - Producers - 1.9% | |||||||||||
119,206 | Tata Steel, Ltd. | 1,683,619 | |||||||||
Telecommunication Services - 0.8% | |||||||||||
18,790 | Amdocs, Ltd. (U.S. Shares)*,** | 698,988 | |||||||||
Television - 1.5% | |||||||||||
132,264 | British Sky Broadcasting Group PLC** | 1,267,456 | |||||||||
Therapeutics - 1.5% | |||||||||||
5,935 | Gilead Sciences, Inc.* | 341,263 | |||||||||
5,320 | Neurocrine Biosciences, Inc.* | 305,155 | |||||||||
10,690 | United Therapeutics Corp.* | 636,589 | |||||||||
1,283,007 | |||||||||||
Tobacco - 0.5% | |||||||||||
5,900 | Altria Group, Inc. | 431,644 | |||||||||
Toys - 0.4% | |||||||||||
17,356 | Marvel Entertainment, Inc.* | 338,616 | |||||||||
Transportation - Railroad - 1.5% | |||||||||||
21,260 | All America Latina Logistica (GDR) | 1,344,769 | |||||||||
Transportation - Services - 1.1% | |||||||||||
11,975 | United Parcel Service, Inc. - Class B | 970,813 | |||||||||
Transportation - Truck - 0.6% | |||||||||||
11,785 | Landstar System, Inc. | 500,745 | |||||||||
Web Hosting/Design - 0.5% | |||||||||||
6,365 | Equinix, Inc.* | 419,454 | |||||||||
Web Portals/Internet Service Providers - 2.0% | |||||||||||
1,750 | Google, Inc. - Class A* | 731,395 | |||||||||
30,280 | Yahoo!, Inc.* | 992,578 | |||||||||
1,723,973 | |||||||||||
Wireless Equipment - 1.1% | |||||||||||
13,720 | Crown Castle International Corp.* | 461,678 | |||||||||
9,390 | QUALCOMM, Inc. | 482,083 | |||||||||
943,761 | |||||||||||
Total Common Stock (cost $78,920,895) | 86,816,075 | ||||||||||
Time Deposit - 0.9% | |||||||||||
$ | 800,000 | Dexia CLF Finance Co., ETD 4.82%, 5/1/06 (cost $800,000) | 800,000 | ||||||||
Total Investments (total cost $79,720,895) – 100.2% | 87,616,075 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.2)% | (213,085 | ) | |||||||||
Net Assets – 100% | $ | 87,402,990 |
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Bermuda | $ | 2,787,413 | 3.2 | % | |||||||
Brazil | 1,894,338 | 2.2 | % | ||||||||
Canada | 3,720,258 | 4.2 | % | ||||||||
Cayman Islands | 476,631 | 0.5 | % | ||||||||
France | 1,864,911 | 2.1 | % | ||||||||
Germany | 2,696,243 | 3.1 | % | ||||||||
Hong Kong | 2,743,960 | 3.1 | % | ||||||||
India | 3,357,157 | 3.8 | % | ||||||||
Israel | 1,680,647 | 1.9 | % | ||||||||
Japan | 4,388,005 | 5.0 | % | ||||||||
Netherlands | 2,079,119 | 2.4 | % | ||||||||
Russia | 1,474,514 | 1.7 | % | ||||||||
Singapore | 1,016,636 | 1.2 | % | ||||||||
South Korea | 1,487,066 | 1.7 | % | ||||||||
Spain | 708,602 | 0.8 | % | ||||||||
Switzerland | 4,074,760 | 4.7 | % | ||||||||
United Kingdom | 6,868,882 | 7.8 | % | ||||||||
United States†† | 44,296,933 | 50.6 | % | ||||||||
Total | $ | 87,616,075 | 100.0 | % |
††Includes Short-Term Securities (49.6% excluding Short-Term Securities)
Forward Currency Contracts, Open
Currency Sold and Settlement Date | Currency Units Sold | Currency Value in $ U.S. | Unrealized Gain/(Loss) | ||||||||||||
British Pound 6/28/06 | 1,524,000 | $ | 2,781,017 | $ | (66,921 | ) | |||||||||
Canadian Dollar 6/28/06 | 1,300,000 | 1,165,007 | (26,154 | ) | |||||||||||
Euro 6/28/06 | 2,204,000 | 2,791,069 | (71,377 | ) | |||||||||||
Japanese Yen 6/28/06 | 122,000,000 | 1,081,011 | 4,205 | ||||||||||||
Japanese Yen 8/24/06 | 60,000,000 | 535,846 | (5,356 | ) | |||||||||||
South Korean Won 10/19/06 | 450,000,000 | 480,113 | (2,533 | ) | |||||||||||
Swiss Franc 6/28/06 | 1,885,000 | 1,530,308 | (29,324 | ) | |||||||||||
Total | $ | 10,364,371 | $ | (197,460 | ) |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2006 41
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 months ended April 30, 2006, INTECH Risk-Managed Stock Fund returned 9.87%. This compares to a 9.64% gain by the S&P 500® Index, the Fund's benchmark.
Investment Strategy in This Environment
While fundamental analysis does not factor into our management of the Fund, fundamentals certainly have a significant impact on the general direction of the market in which we participate. The Fund's goal is to produce returns in excess of its benchmark with an equal or lesser amount of risk.
The Fund's mathematical investing process seeks to build a more efficient Fund than its benchmark, the S&P 500® Index. With a focus on risk management, investment decisions are governed by a mathematical investment process, which aims to deliver return over and above the Index over the long-term without assuming additional risk relative to the benchmark. This 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
Throughout the period, as stock prices naturally moved, we adjusted each comparable stock's weighting in the Fund in an attempt to keep the Fund more efficient than the Index, without increasing relative risk. While individual stock volatility was low during the period, we believe there was indeed adequate fluctuation overall to allow our process to work well. We continued to implement the mathematical process in a disciplined manner during the period. 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.
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 to implement the process in a disciplined and deliberate manner. As a result, the Fund may experience underperformance during shorter time periods, but has a goal of outperformance over a three- to five-year term. While managing risk will remain essential to our investment process, we will continue to make marginal improvements to the mathematical process, seeking an efficient portfolio that offers better long-term results than its benchmark regardless of the market's direction.
Thank you for your investment in INTECH Risk-Managed Stock Fund.
42 Janus Core, Risk-Managed and Value Funds April 30, 2006
(unaudited)
INTECH Risk-Managed Stock Fund At a Glance
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2006 | |||||||
Procter & Gamble Co. Cosmetics and Toiletries | 1.7 | % | |||||
Progressive Corp. Property and Casualty Insurance | 1.4 | % | |||||
Loews Corp. Multi-Line Insurance | 1.1 | % | |||||
Franklin Resources, Inc. Investment Management and Advisory Services | 1.1 | % | |||||
ConocoPhillips Oil Companies - Integrated | 1.1 | % | |||||
6.4 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2006 |
5 Largest Country Allocations – (% of Investment Securities)
As of April 30, 2006 | As of October 31, 2005 | ||||||
![]() | ![]() | ||||||
Janus Core, Risk-Managed and Value Funds April 30, 2006 43
INTECH Risk-Managed Stock Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Since Inception* | |||||||||||||
INTECH Risk-Managed Stock Fund | 9.87 | % | 17.81 | % | 20.50 | % | |||||||||
S&P 500® Index | 9.64 | % | 15.42 | % | 17.09 | % | |||||||||
Lipper Quartile | N/A | 3 | rd | 2 | nd | ||||||||||
Lipper Ranking - based on total return for Multi-Cap Core Funds | N/A** | 483/834 | 150/586 |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes 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.
*The Fund's inception date – February 28, 2003
**The Fund's fiscal year-to-date Lipper ranking is not available.
The proprietary mathematical process used by Enhanced Investment Technologies, LLC ("INTECH") may not achieve the desired results. Rebalancing techniques used may result in a higher portfolio turnover rate and higher expenses compared to a "buy and hold" or index fund strategy. This increases the likelihood of higher net taxable gains or losses for investors.
See "Explanations of Charts, Tables and Financial Statements."
INTECH is a subsidiary of Janus Capital Group Inc.
A 2% redemption fee may be imposed on shares held for 3 months or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
The weighting of securities within the portfolio may differ significantly from the weightings within the index. The index is not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
There is no assurance the stated objective(s) will be met.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
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.
Effective February 28, 2006, Janus Risk-Managed Stock Fund changed its name to INTECH Risk-Managed Stock Fund.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,098.70 | $ | 4.74 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.28 | $ | 4.56 |
*Expenses are equal to the annualized expense ratio of 0.91% multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital.
44 Janus Core, Risk-Managed and Value Funds April 30, 2006
INTECH Risk-Managed Stock Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Common Stock - 96.0% | |||||||||||
Advertising Agencies - 0% | |||||||||||
1,500 | Omnicom Group, Inc. | $ | 135,015 | ||||||||
Aerospace and Defense - 1.5% | |||||||||||
26,900 | Boeing Co. | 2,244,805 | |||||||||
20,500 | General Dynamics Corp. | 1,345,210 | |||||||||
14,200 | Lockheed Martin Corp.# | 1,077,780 | |||||||||
3,700 | Northrop Grumman Corp. | 247,530 | |||||||||
22,100 | Raytheon Co. | 978,367 | |||||||||
14,300 | Rockwell Collins, Inc. | 817,960 | |||||||||
6,711,652 | |||||||||||
Aerospace and Defense - Equipment - 0.1% | |||||||||||
5,000 | B.F. Goodrich Co. | 222,500 | |||||||||
3,400 | United Technologies Corp. | 213,554 | |||||||||
436,054 | |||||||||||
Agricultural Chemicals - 0.3% | |||||||||||
15,400 | Monsanto Co. | 1,284,360 | |||||||||
Agricultural Operations - 0.3% | |||||||||||
31,900 | Archer-Daniels-Midland Co. | 1,159,246 | |||||||||
Airlines - 0.4% | |||||||||||
115,700 | Southwest Airlines Co.# | 1,876,654 | |||||||||
Apparel Manufacturers - 0.1% | |||||||||||
8,600 | V. F. Corp. | 526,234 | |||||||||
Appliances - 0.4% | |||||||||||
21,616 | Whirlpool Corp.# | 1,940,036 | |||||||||
Applications Software - 1.1% | |||||||||||
30,800 | Citrix Systems, Inc.* | 1,229,536 | |||||||||
27,100 | Intuit, Inc.*,# | 1,468,007 | |||||||||
94,300 | Microsoft Corp. | 2,277,345 | |||||||||
4,974,888 | |||||||||||
Athletic Footwear - 0% | |||||||||||
1,000 | NIKE, Inc. - Class B | 81,840 | |||||||||
Audio and Video Products - 0.3% | |||||||||||
14,100 | Harman International Industries, Inc.# | 1,240,659 | |||||||||
Automotive - Truck Parts and Equipment - Original - 0.4% | |||||||||||
21,500 | Johnson Controls, Inc. | 1,753,325 | |||||||||
Beverages - Non-Alcoholic - 1.3% | |||||||||||
39,700 | Coca-Cola Co. | 1,665,812 | |||||||||
40,200 | Coca-Cola Enterprises, Inc. | 785,106 | |||||||||
11,500 | Pepsi Bottling Group, Inc. | 369,150 | |||||||||
46,400 | PepsiCo, Inc. | 2,702,336 | |||||||||
5,522,404 | |||||||||||
Beverages - Wine and Spirits - 0.5% | |||||||||||
29,400 | Brown-Forman Corp. - Class B | 2,190,300 | |||||||||
Broadcast Services and Programming - 0% | |||||||||||
4,700 | Clear Channel Communications, Inc. | 134,091 | |||||||||
Building - Residential and Commercial - 0% | |||||||||||
3,300 | KB Home# | 203,181 | |||||||||
Cable Television - 0% | |||||||||||
3,200 | Comcast Corp. - Class A* | 99,040 | |||||||||
Casino Hotels - 0.1% | |||||||||||
2,800 | Harrah's Entertainment, Inc. | 228,592 | |||||||||
Casino Services - 0.1% | |||||||||||
9,900 | International Game Technology | 375,507 |
Shares or Principal Amount | Value | ||||||||||
Chemicals - Specialty - 0.1% | |||||||||||
200 | Ashland, Inc. | $ | 13,164 | ||||||||
7,900 | Ecolab, Inc. | 298,620 | |||||||||
5,700 | Engelhard Corp. | 218,937 | |||||||||
530,721 | |||||||||||
Coatings and Paint Products - 0.2% | |||||||||||
16,900 | Sherwin-Williams Co.# | 860,886 | |||||||||
Commercial Banks - 1.1% | |||||||||||
3,800 | AmSouth Bancorporation | 109,972 | |||||||||
40,300 | BB&T Corp. | 1,730,482 | |||||||||
3,100 | Compass Bancshares, Inc. | 170,376 | |||||||||
10,900 | M&T Bank Corp. | 1,301,460 | |||||||||
5,300 | Regions Financial Corp.# | 193,503 | |||||||||
6,300 | Synovus Financial Corp. | 176,400 | |||||||||
15,200 | Zions Bancorporation* | 1,262,056 | |||||||||
4,944,249 | |||||||||||
Commercial Services - 0.1% | |||||||||||
15,300 | Convergys Corp.* | 297,891 | |||||||||
Commercial Services - Finance - 1.8% | |||||||||||
34,300 | Equifax, Inc.# | 1,321,922 | |||||||||
54,000 | Moody's Corp. | 3,348,540 | |||||||||
75,300 | Paychex, Inc.# | 3,041,367 | |||||||||
7,711,829 | |||||||||||
Computer Aided Design - 0.2% | |||||||||||
22,500 | Autodesk, Inc.* | 945,900 | |||||||||
Computer Services - 0.4% | |||||||||||
3,200 | Affiliated Computer Services, Inc. - Class A*,# | 178,432 | |||||||||
9,300 | Computer Sciences Corp.* | 544,515 | |||||||||
31,800 | Electronic Data Systems Corp. | 861,144 | |||||||||
1,584,091 | |||||||||||
Computers - 1.3% | |||||||||||
35,700 | Apple Computer, Inc.* | 2,512,923 | |||||||||
100,200 | Hewlett-Packard Co. | 3,253,494 | |||||||||
5,766,417 | |||||||||||
Computers - Integrated Systems - 0% | |||||||||||
4,200 | NCR Corp.* | 165,480 | |||||||||
Computers - Memory Devices - 0.1% | |||||||||||
2,500 | EMC Corp.* | 33,775 | |||||||||
9,500 | SanDisk Corp.* | 606,385 | |||||||||
640,160 | |||||||||||
Consumer Products - Miscellaneous - 0.3% | |||||||||||
12,800 | Clorox Co.# | 821,504 | |||||||||
6,100 | Fortune Brands, Inc. | 489,830 | |||||||||
1,311,334 | |||||||||||
Cosmetics and Toiletries - 2.3% | |||||||||||
48,600 | Colgate-Palmolive Co. | 2,873,232 | |||||||||
125,687 | Procter & Gamble Co. | 7,316,240 | |||||||||
10,189,472 | |||||||||||
Data Processing and Management - 1.1% | |||||||||||
33,000 | Automatic Data Processing, Inc. | 1,454,640 | |||||||||
44,300 | First Data Corp. | 2,112,667 | |||||||||
25,300 | Fiserv, Inc.* | 1,140,524 | |||||||||
4,707,831 | |||||||||||
Disposable Medical Products - 0% | |||||||||||
1,400 | C.R. Bard, Inc.# | 104,244 |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2006 45
INTECH Risk-Managed Stock Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Distribution/Wholesale - 0.6% | |||||||||||
33,800 | Genuine Parts Co. | $ | 1,475,370 | ||||||||
12,300 | W.W. Grainger, Inc. | 946,116 | |||||||||
2,421,486 | |||||||||||
Diversified Operations - 2.0% | |||||||||||
1,900 | Danaher Corp. | 121,809 | |||||||||
27,100 | Dover Corp. | 1,348,225 | |||||||||
130,400 | General Electric Co. | 4,510,536 | |||||||||
44,200 | ITT Industries, Inc. | 2,485,366 | |||||||||
2,600 | Parker Hannifin Corp. | 210,730 | |||||||||
8,676,666 | |||||||||||
Drug Delivery Systems - 0.6% | |||||||||||
64,800 | Hospira, Inc.* | 2,498,040 | |||||||||
E-Commerce/Products - 0.1% | |||||||||||
12,300 | Amazon.com, Inc.*,# | 433,083 | |||||||||
E-Commerce/Services - 0.1% | |||||||||||
13,300 | eBay, Inc.*,# | 457,653 | |||||||||
Electric - Integrated - 5.6% | |||||||||||
14,600 | Allegheny Energy, Inc.* | 520,198 | |||||||||
14,700 | Ameren Corp. | 740,439 | |||||||||
7,400 | American Electric Power Company, Inc. | 247,604 | |||||||||
2,500 | CMS Energy Corp.* | 33,300 | |||||||||
23,300 | Consolidated Edison, Inc.# | 1,004,696 | |||||||||
3,100 | Constellation Energy Group, Inc. | 170,252 | |||||||||
18,900 | Dominion Resources, Inc. | 1,415,043 | |||||||||
6,400 | DTE Energy Co. | 260,992 | |||||||||
1,560 | Duke Energy Corp. | 45,427 | |||||||||
105,600 | Edison International | 4,267,296 | |||||||||
5,000 | Entergy Corp. | 349,700 | |||||||||
33,400 | Exelon Corp. | 1,803,600 | |||||||||
60,200 | FirstEnergy Corp. | 3,052,742 | |||||||||
9,100 | FPL Group, Inc.# | 360,360 | |||||||||
57,200 | PG&E Corp. | 2,278,848 | |||||||||
5,200 | Pinnacle West Capital Corp.# | 208,520 | |||||||||
9,600 | PPL Corp. | 278,784 | |||||||||
57,800 | Public Service Enterprise Group, Inc. | 3,624,060 | |||||||||
19,900 | Southern Co. | 641,377 | |||||||||
10,700 | TECO Energy, Inc. | 170,986 | |||||||||
36,600 | TXU Corp. | 1,816,458 | |||||||||
43,200 | Xcel Energy, Inc.# | 813,888 | |||||||||
24,104,570 | |||||||||||
Electric Products - Miscellaneous - 0.2% | |||||||||||
3,800 | Emerson Electric Co. | 322,810 | |||||||||
17,500 | Molex, Inc.# | 649,600 | |||||||||
972,410 | |||||||||||
Electronic Components - Miscellaneous - 0.4% | |||||||||||
45,900 | Jabil Circuit, Inc.*,# | 1,789,641 | |||||||||
Electronic Components - Semiconductors - 1.8% | |||||||||||
25,800 | Advanced Micro Devices, Inc.* | 834,630 | |||||||||
56,950 | Broadcom Corp. - Class A* | 2,341,215 | |||||||||
9,200 | Freescale Semiconductor, Inc. - Class B*,# | 291,364 | |||||||||
6,100 | Intel Corp. | 121,878 | |||||||||
65,000 | Micron Technology, Inc.* | 1,103,050 | |||||||||
46,100 | National Semiconductor Corp.# | 1,382,078 | |||||||||
33,100 | NVIDIA Corp.* | 967,182 | |||||||||
4,400 | QLogic Corp.* | 91,564 | |||||||||
16,700 | Texas Instruments, Inc. | 579,657 | |||||||||
7,712,618 |
Shares or Principal Amount | Value | ||||||||||
Electronic Measuring Instruments - 0.6% | |||||||||||
58,200 | Agilent Technologies, Inc.*,# | $ | 2,236,044 | ||||||||
12,400 | Tektronix, Inc. | 437,968 | |||||||||
2,674,012 | |||||||||||
Electronics - Military - 0.1% | |||||||||||
3,500 | L-3 Communications Holdings, Inc. | 285,950 | |||||||||
Engines - Internal Combustion - 0.4% | |||||||||||
15,700 | Cummins, Inc.*,# | 1,640,650 | |||||||||
Enterprise Software/Services - 0.4% | |||||||||||
62,100 | BMC Software, Inc.* | 1,337,634 | |||||||||
21,242 | Oracle Corp.* | 309,921 | |||||||||
1,647,555 | |||||||||||
Fiduciary Banks - 1.6% | |||||||||||
35,200 | Bank of New York Company, Inc. | 1,237,280 | |||||||||
58,300 | Mellon Financial Corp. | 2,193,829 | |||||||||
26,700 | Northern Trust Corp. | 1,572,363 | |||||||||
32,100 | State Street Corp. | 2,096,772 | |||||||||
7,100,244 | |||||||||||
Filtration and Separations Products - 0% | |||||||||||
3,000 | Pall Corp.# | 90,540 | |||||||||
Finance - Commercial - 0.2% | |||||||||||
16,400 | CIT Group, Inc. | 885,764 | |||||||||
Finance - Consumer Loans - 0.5% | |||||||||||
44,400 | SLM Corp. | 2,347,872 | |||||||||
Finance - Credit Card - 0.2% | |||||||||||
12,000 | American Express Co. | 645,720 | |||||||||
1,100 | Capital One Financial Corp. | 95,304 | |||||||||
741,024 | |||||||||||
Finance - Investment Bankers/Brokers - 3.5% | |||||||||||
500 | Bear Stearns Companies, Inc. | 71,255 | |||||||||
121,900 | Charles Schwab Corp. | 2,182,010 | |||||||||
61,100 | Citigroup, Inc. | 3,051,945 | |||||||||
77,600 | E*TRADE Financial Corp.* | 1,930,688 | |||||||||
10,800 | Goldman Sachs Group, Inc. | 1,731,132 | |||||||||
23,700 | JP Morgan Chase & Co. | 1,075,506 | |||||||||
24,700 | Lehman Brothers Holdings, Inc. | 3,733,405 | |||||||||
12,300 | Merrill Lynch & Company, Inc. | 937,998 | |||||||||
1,500 | Morgan Stanley Co. | 96,450 | |||||||||
14,810,389 | |||||||||||
Financial Guarantee Insurance - 0.2% | |||||||||||
2,700 | Ambac Financial Group, Inc. | 222,372 | |||||||||
11,000 | MGIC Investment Corp. | 777,700 | |||||||||
1,000,072 | |||||||||||
Food - Confectionary - 0.6% | |||||||||||
11,600 | Hershey Foods Corp.# | 618,744 | |||||||||
38,000 | Wm. Wrigley Jr. Co. | 1,788,660 | |||||||||
9,500 | Wm. Wrigley Jr. Co. - Class B | 447,450 | |||||||||
2,854,854 | |||||||||||
Food - Dairy Products - 0% | |||||||||||
4,700 | Dean Foods Co.*,# | 186,167 | |||||||||
Food - Diversified - 0.4% | |||||||||||
18,500 | Campbell Soup Co. | 594,590 | |||||||||
5,900 | General Mills, Inc. | 291,106 | |||||||||
21,900 | Kellogg Co. | 1,014,189 | |||||||||
1,899,885 |
See Notes to Schedules of Investments and Financial Statements.
46 Janus Core, Risk-Managed and Value Funds April 30, 2006
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Food - Meat Products - 0% | |||||||||||
13,800 | Tyson Foods, Inc. - Class A# | $ | 201,480 | ||||||||
Food - Retail - 1.7% | |||||||||||
54,800 | Albertson's, Inc. | 1,388,084 | |||||||||
110,400 | Kroger Co.# | 2,236,704 | |||||||||
133,500 | Safeway, Inc. | 3,354,855 | |||||||||
6,300 | Whole Foods Market, Inc. | 386,694 | |||||||||
7,366,337 | |||||||||||
Food - Wholesale/Distribution - 0% | |||||||||||
3,200 | Sysco Corp. | 95,648 | |||||||||
Gas - Distribution - 0.4% | |||||||||||
10,500 | Nicor, Inc.# | 415,905 | |||||||||
30,800 | Sempra Energy Co. | 1,417,416 | |||||||||
1,833,321 | |||||||||||
Gold Mining - 0.2% | |||||||||||
12,400 | Newmont Mining Corp. | 723,664 | |||||||||
Health Care Cost Containment - 0.9% | |||||||||||
79,500 | McKesson Corp. | 3,862,905 | |||||||||
Home Decoration Products - 0.3% | |||||||||||
51,900 | Newell Rubbermaid, Inc.# | 1,423,098 | |||||||||
Hotels and Motels - 0.2% | |||||||||||
2,900 | Hilton Hotels Corp. | 78,126 | |||||||||
1,500 | Marriott International, Inc. - Class A | 109,605 | |||||||||
13,900 | Starwood Hotels & Resorts Worldwide, Inc. | 797,582 | |||||||||
985,313 | |||||||||||
Human Resources - 0.6% | |||||||||||
10,100 | Monster Worldwide, Inc.* | 579,740 | |||||||||
53,900 | Robert Half International, Inc. | 2,278,353 | |||||||||
2,858,093 | |||||||||||
Instruments - Controls - 0.3% | |||||||||||
30,700 | Thermo Electron Corp.* | 1,183,178 | |||||||||
Instruments - Scientific - 0.2% | |||||||||||
17,200 | Applera Corp. - Applied Biosystems Group | 496,048 | |||||||||
1,300 | Fisher Scientific International, Inc.* | 91,715 | |||||||||
5,200 | PerkinElmer, Inc. | 111,488 | |||||||||
699,251 | |||||||||||
Insurance Brokers - 1.5% | |||||||||||
107,900 | Aon Corp. | 4,522,089 | |||||||||
60,700 | Marsh & McLennan Companies, Inc. | 1,861,669 | |||||||||
6,383,758 | |||||||||||
Internet Security - 0% | |||||||||||
1,400 | VeriSign, Inc.* | 32,928 | |||||||||
Investment Management and Advisory Services - 1.8% | |||||||||||
23,600 | Ameriprise Financial, Inc. | 1,157,344 | |||||||||
34,500 | Federated Investors, Inc. - Class B | 1,210,950 | |||||||||
53,200 | Franklin Resources, Inc. | 4,953,984 | |||||||||
4,700 | Legg Mason, Inc. | 556,856 | |||||||||
1,300 | T. Rowe Price Group, Inc.# | 109,447 | |||||||||
7,988,581 | |||||||||||
Life and Health Insurance - 2.6% | |||||||||||
61,500 | AFLAC, Inc. | 2,923,710 | |||||||||
29,000 | CIGNA Corp. | 3,103,000 | |||||||||
13,430 | Lincoln National Corp. | 780,014 | |||||||||
36,000 | Principal Financial Group, Inc. | 1,847,160 | |||||||||
27,600 | Prudential Financial, Inc. | 2,156,388 |
Shares or Principal Amount | Value | ||||||||||
Life and Health Insurance - (continued) | |||||||||||
2,900 | Torchmark Corp. | $ | 174,319 | ||||||||
20,500 | UnumProvident Corp.# | 416,355 | |||||||||
11,400,946 | |||||||||||
Machinery - Construction and Mining - 0.1% | |||||||||||
8,100 | Caterpillar, Inc. | 613,494 | |||||||||
Medical - Biomedical and Genetic - 1.3% | |||||||||||
54,300 | Amgen, Inc.* | 3,676,110 | |||||||||
10,400 | Genzyme Corp.* | 636,064 | |||||||||
19,100 | Millipore Corp.* | 1,409,198 | |||||||||
5,721,372 | |||||||||||
Medical - Drugs - 4.2% | |||||||||||
10,100 | Abbott Laboratories | 431,674 | |||||||||
17,900 | Bristol-Myers Squibb Co. | 454,302 | |||||||||
25,400 | Eli Lilly and Co. | 1,344,168 | |||||||||
40,700 | Forest Laboratories, Inc.* | 1,643,466 | |||||||||
93,300 | King Pharmaceuticals, Inc.*,# | 1,622,487 | |||||||||
100,500 | MedImmune, Inc.* | 3,162,735 | |||||||||
109,900 | Merck & Company, Inc. | 3,782,758 | |||||||||
52,780 | Pfizer, Inc. | 1,336,917 | |||||||||
80,800 | Schering-Plough Corp.# | 1,561,056 | |||||||||
53,600 | Wyeth | 2,608,712 | |||||||||
17,948,275 | |||||||||||
Medical - Generic Drugs - 0.7% | |||||||||||
10,400 | Barr Pharmaceuticals, Inc.*,# | 629,720 | |||||||||
80,500 | Mylan Laboratories, Inc. | 1,758,120 | |||||||||
18,700 | Watson Pharmaceuticals, Inc.* | 531,828 | |||||||||
2,919,668 | |||||||||||
Medical - HMO - 2.2% | |||||||||||
64,400 | Aetna, Inc. | 2,479,400 | |||||||||
31,400 | Coventry Health Care, Inc.* | 1,559,638 | |||||||||
18,300 | Humana, Inc.* | 826,794 | |||||||||
50,100 | UnitedHealth Group, Inc. | 2,491,974 | |||||||||
33,900 | WellPoint, Inc.* | 2,406,900 | |||||||||
9,764,706 | |||||||||||
Medical - Hospitals - 0.4% | |||||||||||
33,100 | HCA, Inc.# | 1,452,759 | |||||||||
6,100 | Health Management Associates, Inc. - Class A | 126,331 | |||||||||
1,579,090 | |||||||||||
Medical - Nursing Homes - 0.2% | |||||||||||
18,500 | Manor Care, Inc.# | 811,225 | |||||||||
Medical - Wholesale Drug Distributors - 1.5% | |||||||||||
77,100 | AmerisourceBergen Corp. | 3,326,865 | |||||||||
48,200 | Cardinal Health, Inc. | 3,246,270 | |||||||||
6,573,135 | |||||||||||
Medical Information Systems - 0% | |||||||||||
3,300 | IMS Health, Inc. | 89,694 | |||||||||
Medical Instruments - 1.6% | |||||||||||
38,853 | Boston Scientific Corp.* | 902,944 | |||||||||
62,600 | Medtronic, Inc. | 3,137,512 | |||||||||
78,600 | St. Jude Medical, Inc.* | 3,103,128 | |||||||||
7,143,584 | |||||||||||
Medical Labs and Testing Services - 0.1% | |||||||||||
4,500 | Laboratory Corporation of America Holdings*,# | 256,950 | |||||||||
5,600 | Quest Diagnostics, Inc.# | 312,088 | |||||||||
569,038 |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2006 47
INTECH Risk-Managed Stock Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Medical Products - 1.3% | |||||||||||
51,500 | Baxter International, Inc. | $ | 1,941,550 | ||||||||
1,400 | Becton, Dickinson and Co. | 88,256 | |||||||||
55,800 | Johnson & Johnson | 3,270,438 | |||||||||
7,600 | Stryker Corp.# | 332,500 | |||||||||
1,100 | Zimmer Holdings, Inc.* | 69,190 | |||||||||
5,701,934 | |||||||||||
Metal - Copper - 0.1% | |||||||||||
5,500 | Phelps Dodge Corp. | 474,045 | |||||||||
Metal - Diversified - 0.1% | |||||||||||
5,700 | Freeport-McMoRan Copper & Gold, Inc. - Class B# | 368,106 | |||||||||
Multi-Line Insurance - 2.8% | |||||||||||
24,800 | ACE, Ltd. | 1,377,392 | |||||||||
19,600 | Allstate Corp. | 1,107,204 | |||||||||
22,200 | American International Group, Inc. | 1,448,550 | |||||||||
16,700 | Genworth Financial, Inc. - Class A | 554,440 | |||||||||
4,900 | Hartford Financial Services Group, Inc. | 450,457 | |||||||||
47,000 | Loews Corp. | 4,989,050 | |||||||||
39,400 | MetLife, Inc. | 2,052,740 | |||||||||
11,979,833 | |||||||||||
Multimedia - 0.6% | |||||||||||
16,100 | E.W. Scripps Co. - Class A | 741,888 | |||||||||
16,700 | McGraw-Hill Companies, Inc.# | 929,522 | |||||||||
16,500 | Meredith Corp.# | 818,400 | |||||||||
18,800 | News Corporation, Inc. - Class A | 322,608 | |||||||||
2,812,418 | |||||||||||
Non-Hazardous Waste Disposal - 0.1% | |||||||||||
7,400 | Allied Waste Industries, Inc.*,# | 104,784 | |||||||||
3,500 | Waste Management, Inc. | 131,110 | |||||||||
235,894 | |||||||||||
Oil - Field Services - 1.5% | |||||||||||
21,400 | Baker Hughes, Inc.# | 1,729,762 | |||||||||
58,500 | BJ Services Co. | 2,225,925 | |||||||||
15,300 | Halliburton Co. | 1,195,695 | |||||||||
21,700 | Schlumberger, Ltd. (U.S. Shares)# | 1,500,338 | |||||||||
1,700 | Weatherford International, Ltd* | 89,981 | |||||||||
6,741,701 | |||||||||||
Oil - U.S. Royalty Trusts - 0% | |||||||||||
59 | Hugoton Royalty Trust | 1,631 | |||||||||
Oil and Gas Drilling - 0.2% | |||||||||||
3,200 | Nabors Industries, Ltd.*,# | 119,456 | |||||||||
1,000 | Noble Corp. | 78,940 | |||||||||
11,100 | Transocean, Inc.* | 899,877 | |||||||||
1,098,273 | |||||||||||
Oil Companies - Exploration and Production - 1.6% | |||||||||||
6,900 | Anadarko Petroleum Corp. | 723,258 | |||||||||
12,400 | Chesapeake Energy Corp.# | 392,832 | |||||||||
14,300 | Devon Energy Corp. | 859,573 | |||||||||
37,500 | EOG Resources, Inc. | 2,633,625 | |||||||||
25,178 | Kerr-McGee Corp. | 2,514,275 | |||||||||
1,000 | XTO Energy, Inc. | 42,350 | |||||||||
7,165,913 | |||||||||||
Oil Companies - Integrated - 3.2% | |||||||||||
5,700 | Amerada Hess Corp. | 816,639 | |||||||||
7,433 | Chevron Corp. | 453,562 |
Shares or Principal Amount | Value | ||||||||||
Oil Companies - Integrated - (continued) | |||||||||||
72,910 | ConocoPhillips | $ | 4,877,679 | ||||||||
65,100 | Exxon Mobil Corp. | 4,106,508 | |||||||||
29,811 | Marathon Oil Corp. | 2,365,801 | |||||||||
8,000 | Occidental Petroleum Corp. | 821,920 | |||||||||
13,442,109 | |||||||||||
Oil Field Machinery and Equipment - 0.1% | |||||||||||
5,900 | National-Oilwell Varco, Inc.* | 406,923 | |||||||||
Oil Refining and Marketing - 1.0% | |||||||||||
26,000 | Sunoco, Inc. | 2,107,040 | |||||||||
36,000 | Valero Energy Corp. | 2,330,640 | |||||||||
4,437,680 | |||||||||||
Optical Supplies - 1.1% | |||||||||||
45,300 | Allergan, Inc. | 4,653,216 | |||||||||
3,200 | Bausch & Lomb, Inc.# | 156,640 | |||||||||
4,809,856 | |||||||||||
Paper and Related Products - 0% | |||||||||||
3,400 | Temple-Inland, Inc. | 157,896 | |||||||||
Pharmacy Services - 2.0% | |||||||||||
32,100 | Caremark Rx, Inc. | 1,462,155 | |||||||||
59,500 | Express Scripts, Inc. - Class A* | 4,649,330 | |||||||||
49,817 | Medco Health Solutions, Inc.* | 2,651,759 | |||||||||
8,763,244 | |||||||||||
Pipelines - 0.6% | |||||||||||
30,100 | Kinder Morgan, Inc.# | 2,649,402 | |||||||||
Printing - Commercial - 0.3% | |||||||||||
45,100 | R.R. Donnelley & Sons Co. | 1,519,419 | |||||||||
Property and Casualty Insurance - 2.9% | |||||||||||
28,400 | Chubb Corp. | 1,463,736 | |||||||||
56,300 | Progressive Corp. | 6,110,239 | |||||||||
27,300 | SAFECO Corp. | 1,416,870 | |||||||||
80,200 | St. Paul Travelers Companies, Inc. | 3,531,206 | |||||||||
12,522,051 | |||||||||||
Publishing - Newspapers - 0.2% | |||||||||||
16,300 | Dow Jones & Company, Inc.# | 602,611 | |||||||||
2,100 | Knight-Ridder, Inc. | 130,200 | |||||||||
732,811 | |||||||||||
Quarrying - 0.1% | |||||||||||
6,700 | Vulcan Materials Co. | 569,232 | |||||||||
REIT - Apartments - 0.9% | |||||||||||
2,300 | Apartment Investment & Management Co. - Class A | 102,787 | |||||||||
31,700 | Archstone-Smith Trust, Inc. | 1,549,496 | |||||||||
50,200 | Equity Residential Properties Trust | 2,252,474 | |||||||||
3,904,757 | |||||||||||
REIT - Diversified - 0% | |||||||||||
1,200 | Vornado Realty Trust | 114,768 | |||||||||
REIT - Hotels - 0.1% | |||||||||||
11,509 | Host Marriott Corp. | 241,919 | |||||||||
REIT - Office Property - 0.2% | |||||||||||
3,200 | Boston Properties, Inc. | 282,464 | |||||||||
15,200 | Equity Office Properties Trust | 490,960 | |||||||||
773,424 | |||||||||||
REIT - Regional Malls - 0.3% | |||||||||||
14,000 | Simon Property Group, Inc. | 1,146,320 |
See Notes to Schedules of Investments and Financial Statements.
48 Janus Core, Risk-Managed and Value Funds April 30, 2006
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
REIT - Shopping Centers - 0.1% | |||||||||||
7,200 | Kimco Realty Corp. | $ | 267,336 | ||||||||
REIT - Storage - 0.1% | |||||||||||
7,800 | Public Storage, Inc. | 599,664 | |||||||||
REIT - Warehouse and Industrial - 0.1% | |||||||||||
6,900 | ProLogis | 346,518 | |||||||||
Retail - Apparel and Shoe - 0.3% | |||||||||||
29,500 | Nordstrom, Inc. | 1,130,735 | |||||||||
Retail - Auto Parts - 0% | |||||||||||
1,200 | AutoZone, Inc.* | 112,332 | |||||||||
Retail - Automobile - 0.1% | |||||||||||
17,700 | Auto Nation, Inc.* | 398,604 | |||||||||
Retail - Building Products - 0.1% | |||||||||||
6,200 | Home Depot, Inc. | 247,566 | |||||||||
5,900 | Lowe's Companies, Inc. | 371,995 | |||||||||
619,561 | |||||||||||
Retail - Consumer Electronics - 0.5% | |||||||||||
21,300 | Best Buy Company, Inc.# | 1,206,858 | |||||||||
41,800 | Circuit City Stores, Inc.# | 1,201,750 | |||||||||
2,408,608 | |||||||||||
Retail - Discount - 0.8% | |||||||||||
29,700 | Big Lots, Inc.*,# | 429,165 | |||||||||
26,700 | Costco Wholesale Corp. | 1,453,281 | |||||||||
7,700 | Dollar General Corp. | 134,442 | |||||||||
25,300 | Target Corp. | 1,343,430 | |||||||||
3,360,318 | |||||||||||
Retail - Drug Store - 0.5% | |||||||||||
22,600 | CVS Corp. | 671,672 | |||||||||
32,500 | Walgreen Co. | 1,362,725 | |||||||||
2,034,397 | |||||||||||
Retail - Jewelry - 0.3% | |||||||||||
42,100 | Tiffany & Co. | 1,468,869 | |||||||||
Retail - Major Department Stores - 0.3% | |||||||||||
20,000 | J.C. Penney Company, Inc. | 1,309,200 | |||||||||
603 | Sears Holdings Corp.*,# | 86,645 | |||||||||
1,395,845 | |||||||||||
Retail - Office Supplies - 0.9% | |||||||||||
99,400 | Office Depot, Inc.* | 4,033,652 | |||||||||
3,500 | Staples, Inc. | 92,435 | |||||||||
4,126,087 | |||||||||||
Retail - Regional Department Stores - 0.3% | |||||||||||
13,590 | Federated Department Stores, Inc. | 1,057,982 | |||||||||
7,700 | Kohl's Corp.* | 429,968 | |||||||||
1,487,950 | |||||||||||
Retail - Restaurants - 1.3% | |||||||||||
35,100 | Darden Restaurants, Inc.# | 1,389,960 | |||||||||
21,400 | McDonald's Corp. | 739,798 | |||||||||
39,000 | Starbucks Corp.* | 1,453,530 | |||||||||
22,500 | Wendy's International, Inc. | 1,390,050 | |||||||||
16,100 | Yum! Brands, Inc.# | 832,048 | |||||||||
5,805,386 | |||||||||||
Savings/Loan/Thrifts - 0% | |||||||||||
2,800 | Golden West Financial Corp. | 201,236 |
Shares or Principal Amount | Value | ||||||||||
Semiconductor Components/Integrated Circuits - 0% | |||||||||||
700 | Linear Technology Corp.# | $ | 24,850 | ||||||||
Semiconductor Equipment - 0.1% | |||||||||||
31,600 | Applied Materials, Inc. | 567,220 | |||||||||
Steel - Producers - 0% | |||||||||||
1,200 | Nucor Corp. | 130,584 | |||||||||
Steel - Specialty - 0.1% | |||||||||||
4,700 | Allegheny Technologies, Inc. | 325,898 | |||||||||
Super-Regional Banks - 2.0% | |||||||||||
79,726 | Bank of America Corp. | 3,979,922 | |||||||||
16,700 | Comerica, Inc. | 949,729 | |||||||||
2,400 | KeyCorp | 91,728 | |||||||||
37,600 | National City Corp. | 1,387,440 | |||||||||
16,500 | PNC Bank Corp. | 1,179,255 | |||||||||
4,000 | SunTrust Banks, Inc. | 309,320 | |||||||||
8,000 | U.S. Bancorp | 251,520 | |||||||||
3,097 | Wachovia Corp. | 185,355 | |||||||||
8,000 | Wells Fargo & Co. | 549,520 | |||||||||
8,883,789 | |||||||||||
Telecommunication Equipment - 0.3% | |||||||||||
13,500 | ADC Telecommunications, Inc.*,# | 302,265 | |||||||||
57,800 | Tellabs, Inc.* | 916,130 | |||||||||
1,218,395 | |||||||||||
Telecommunication Equipment - Fiber Optics - 0.6% | |||||||||||
95,200 | Corning, Inc.* | 2,630,376 | |||||||||
Telephone - Integrated - 2.0% | |||||||||||
19,500 | ALLTEL Corp. | 1,255,215 | |||||||||
146,173 | AT&T, Inc. | 3,831,195 | |||||||||
12,300 | BellSouth Corp. | 415,494 | |||||||||
39,300 | CenturyTel, Inc. | 1,481,610 | |||||||||
72,500 | Citizens Communications Co. | 962,800 | |||||||||
19,524 | Sprint Nextel Corp. | 484,195 | |||||||||
15,500 | Verizon Communications, Inc. | 511,965 | |||||||||
8,942,474 | |||||||||||
Television - 0.1% | |||||||||||
9,100 | Univision Communications, Inc. - Class A* | 324,779 | |||||||||
Therapeutics - 0.7% | |||||||||||
51,400 | Gilead Sciences, Inc.* | 2,955,500 | |||||||||
Tobacco - 0.8% | |||||||||||
40,500 | Altria Group, Inc. | 2,962,980 | |||||||||
6,500 | Reynolds American, Inc.# | 712,725 | |||||||||
3,675,705 | |||||||||||
Tools - Hand Held - 0.1% | |||||||||||
13,300 | Snap-On, Inc. | 551,950 | |||||||||
Transportation - Railroad - 1.5% | |||||||||||
39,900 | Burlington Northern Santa Fe Corp. | 3,173,247 | |||||||||
10,500 | CSX Corp. | 719,145 | |||||||||
17,200 | Norfolk Southern Corp. | 928,800 | |||||||||
21,200 | Union Pacific Corp. | 1,933,652 | |||||||||
6,754,844 | |||||||||||
Transportation - Services - 0.4% | |||||||||||
4,800 | FedEx Corp. | 552,624 | |||||||||
5,500 | Ryder System, Inc. | 286,825 | |||||||||
11,300 | United Parcel Service, Inc. - Class B | 916,091 | |||||||||
1,755,540 |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2006 49
INTECH Risk-Managed Stock Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Travel Services - 0.2% | |||||||||||
45,500 | Sabre Group Holdings, Inc. | $ | 1,050,595 | ||||||||
Web Portals/Internet Service Providers - 0.6% | |||||||||||
6,400 | Google, Inc. - Class A* | 2,674,816 | |||||||||
4,400 | Yahoo!, Inc.* | 144,232 | |||||||||
2,819,048 | |||||||||||
Wireless Equipment - 0.5% | |||||||||||
51,100 | Motorola, Inc. | 1,090,985 | |||||||||
25,000 | QUALCOMM, Inc. | 1,283,500 | |||||||||
2,374,485 | |||||||||||
Total Common Stock (cost $378,535,589) | 422,157,547 | ||||||||||
Other Securities - 5.1% | |||||||||||
22,576,940 | State Street Navigator Securities Lending Prime Portfolio† (cost $22,576,940) | 22,576,940 | |||||||||
Repurchase Agreement - 2.2% | |||||||||||
$ | 9,900,000 | Fortis Bank N.V., 4.850% dated 4/28/06, maturing 5/1/06 to be repurchased at $9,904,001 collateralized by $12,350,507 in U.S. Government Agencies 5.048% - 7.125%, 2/15/23 - 10/25/35 with a value of $10,098,012 (cost $9,900,000) | 9,900,000 | ||||||||
Short-Term U.S. Treasury Bill - 0.3% | |||||||||||
1,500,000 | U.S. Treasury Bill, 4.565%, due 6/22/06** (amortized cost $1,490,109) | 1,490,109 | |||||||||
Time Deposit - 2.7% | |||||||||||
11,700,000 | ING Financial, ETD, 4.86%, 5/1/06 (cost $11,700,000) | 11,700,000 | |||||||||
Total Investments (total cost $424,202,638) – 106.3% | 467,824,596 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (6.3)% | (27,785,410 | ) | |||||||||
Net Assets – 100% | $ | 440,039,186 |
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Bermuda | $ | 209,437 | 0.1 | % | |||||||
Cayman Islands | 2,356,209 | 0.5 | % | ||||||||
Netherlands | 1,500,338 | 0.3 | % | ||||||||
United States†† | 463,758,612 | 99.1 | % | ||||||||
Total | $ | 467,824,596 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (89.4% excluding Short-Term Securities and Other Securities)
Financial Futures - | Long | ||||||||||
235 Contracts | S&P 500® E-mini expires June 2006, principle amount $15,369,379, value $15,461,825 cumulative appreciation | $92,446 |
See Notes to Schedules of Investments and Financial Statements.
50 Janus Core, Risk-Managed and Value Funds April 30, 2006
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
Performance Overview
During the six months ended April 30, 2006, Janus Mid Cap Value Fund's Investor Shares returned 11.19% and the Fund's Institutional Shares returned 11.27%, while its benchmark, the Russell Midcap® Value Index, appreciated 13.58%. The Russell Midcap® Index was up 14.35% and the S&P 500® Index rose 9.64% in the same period. Our stocks performed almost in line with the Russell Midcap® Value Index benchmark, but our relatively high cash position was a drag on our returns.
Strategy in This Environment
Our sector weightings were a positive influence, as we were overweight in three of the strongest groups in the market including transportation, capital goods and diversified financials. Some of our larger buys in the past 6 months (AllianceBernstein, Norfolk Southern and Union Pacific) have returned 20-30% from our purchase prices and now are among our biggest holdings. Longer-term holdings in these sub-sectors, such as Deere and Waste Management, also had better than 20% appreciation. Unlike the previous period, our normal underweightings in utilities helped us, as that sector was among the period's poorest performers. Our long-standing overweightings relative to the benchmark remain in energy, healthcare and industrials, while we continue to be underweight in financials and utilities.
Although we had positive returns in all sectors, in some areas our stocks did not match their respective sector's strong performance. This was the case in the materials area, which was the strongest in the market, led by the metals stocks. We have been surprised by the extreme cyclical strength in these commodities and thus we had eliminated (in retrospect, prematurely) our holdings in prior periods at substantial gains. Thus we did not benefit from the continued strength in this group in the most recent six month period. Other areas that showed well above average returns and where our stocks lagged were in the retailing and telecommunications sectors. The only issues that were down over 25% were Westwood One and Wireless Facilities. Each was a relatively small position, so their negative impact was less than half that of the gains in each of the stocks we mentioned above. Their long-term fundamentals have deteriorated, so we have reduced ou r holdings. Normally, if long-term prospects have not worsened, we take advantage of price weakness to increase our positions. Thus we added to companies such as Mercury General, J.M. Smucker and Invitrogen after those stocks declined.
Our performance has historically been enhanced by merger and acquisition activity. In the last six months, Fairmont Hotels was acquired by Colony Capital at over twice the price we originally paid in late 2002. Univision and Jones Apparel (both purchased within the last six months) appreciated over 15% after they announced that they had hired investment bankers to assess their value. Consistent with our style, we had bought all these stocks after they had dropped because of near-term earnings disappointments. We believed that at these reduced prices, their long-term prospects were not adequately valued. A significantly smaller gain was realized in the proposed acquisition of Stone Energy. Stone has had operational disappointments, but because we bought it at depressed prices below our calculations of asset value, we had a reasonable positive return. Although we don't kno w which of our holdings will be targets, we believe that merger and acquisition activity will remain at a high level and may bolster Fund performance.
We are somewhat surprised by the sustained outperformance of small-cap stocks and stocks at the lower end of the mid-cap range. For a variety of reasons, we have always believed that over long periods of time those stocks will outperform their larger-cap brethren. However, within that long-term pattern, there are periods in which the roles are reversed and large-caps do relatively better. The current cycle of large-cap underperformance began in 2000, at a time when large-caps were considerably more expensive than small-caps. Now the valuation disparity has been reversed and small-caps are at or near historic high premiums relative to large-caps. While market momentum could prolong and widen this anomaly, we believe that eventually these relative valuations will become more closely aligned. Unfortunately, this return to more normal relationships could occur in a market decline in which larger-caps drop less than smaller-caps.
Over the life of the Fund, we have stayed within our charter, yet exercised the flexibility allowed by it to pursue value wherever we find it in a broad range of market caps. Reflecting the better values we have found developing in larger-caps, the average market cap of the Fund has moved gradually from below that of the Russell Midcap® Value Index to above it. As of April 28, 2006, over 31% of the Fund was invested in stocks with market caps above $10 billion. Our experience has been that our investment criteria and process has added value with larger-caps as well as smaller. The performance over this past period of our larger-caps such as AllianceBernstein, CVS,
Janus Core, Risk-Managed and Value Funds April 30, 2006 51
Janus Mid Cap Value Fund (unaudited)
Deere, Marathon Oil, Millipore, Norfolk Southern, State Street, Union Pacific and Waste Management has been above average and indicative of the applicability of our approach in this area.
Looking Ahead
We are encouraged that earnings continue to show good growth and that stock prices have not kept pace, resulting in earnings multiples drifting lower. Corporate balance sheets have improving liquidity, and merger and acquisition activity shows signs of sustaining its strong pace. Interest rates are at reasonable levels but are somewhat higher than had been expected, and their peak is still likely in the future. Thus, the near-term macro background is solid, but we think is adequately reflected in current valuation levels. Moreover, the current investor complacency is always subject to an unforeseeable shock and long-term problems, such as federal and trade deficits and mounting healthcare liabilities, are not being addressed. We continue to be concerned that a market correction could be exacerbated by the extensive use of derivatives.
As always, we are more interested in underestimated company valuations than the macro backdrop. In that context, we continue to have difficulty finding enough compelling values to replace stocks that have reached our price objectives and no longer have favorable risk/reward characteristics. We intend to maintain the patient, disciplined approach that has served us well in the past and will avail ourselves of opportunities as they present themselves. In fact, during the period, we did find a few more attractive situations and cash positions were reduced, but remain at an above normal level of over 10%. Most importantly, we are not managing the Fund for quarterly returns, or even annual returns. Rather, we are focused on delivering superior multi-year results versus our benchmark and peers. Thus, we were gratified to be recognized by Standard and Poor's/BusinessWeek as one of 18 "Excellence in Fund Management" award winners for 2006. This awar d is based on five-year risk-adjusted returns.
As always, we appreciate your joining us as co-investors in the Fund.
Janus Mid Cap Value Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
AllianceBernstein Holding L.P. Investment management firm - U.S. | 0.74% | ||||||
Norfolk Southern Corp. Rail transportation company - U.S. | 0.44% | ||||||
Union Pacific Corp. Rail transportation operator/provider - U.S. | 0.38% | ||||||
QLogic Corp. Management products/semiconductor provider - U.S. | 0.37% | ||||||
Waste Management, Inc. Waste management services provider - U.S. | 0.35% |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Westwood One, Inc. Radio & television information services & programming provider - U.S. | (0.17%) | ||||||
J.M. Smucker Co. Worldwide food products manufacturer - U.S. | (0.13%) | ||||||
LifePoint Hospitals, Inc. Healthcare services provider - U.S. | (0.13%) | ||||||
Check Point Software Technologies, Ltd. (U.S. Shares) Internet security provider - U.S. | (0.13%) | ||||||
H&R Block, Inc. Financial products and services provider - U.S. | (0.09%) |
5 Largest Contributors to Performance – Sectors
Group | Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | ||||||||||||
Energy | 1.99 | % | 11.75 | % | 4.61 | % | |||||||||
Diversified Financials | 1.50 | % | 7.24 | % | 5.13 | % | |||||||||
Transportation | 1.43 | % | 6.14 | % | 2.29 | % | |||||||||
Technological Hardware & Equipment | 1.02 | % | 6.69 | % | 4.06 | % | |||||||||
Healthcare Equipment & Services | 1.01 | % | 9.21 | % | 3.42 | % |
5 Lowest Contributors to Performance – Sectors
Group | Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | ||||||||||||
Software & Services | 0.02 | % | 2.50 | % | 2.99 | % | |||||||||
Utilities | 0.10 | % | 1.43 | % | 13.64 | % | |||||||||
Semiconductors & Semiconductor Equipment | 0.11 | % | 0.37 | % | 1.45 | % | |||||||||
Automobiles & Components | 0.13 | % | 1.97 | % | 1.32 | % | |||||||||
Retailing | 0.13 | % | 2.49 | % | 3.40 | % |
52 Janus Core, Risk-Managed and Value Funds April 30, 2006
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2006 | |||||||
AllianceBernstein Holding L.P. Investment Management and Advisory Services | 2.4 | % | |||||
SunTrust Banks, Inc. Super-Regional Banks | 2.0 | % | |||||
Berkshire Hathaway, Inc. - Class B Reinsurance | 1.9 | % | |||||
Old Republic International Corp. Multi-Line Insurance | 1.8 | % | |||||
DPL, Inc. Electric - Integrated | 1.3 | % | |||||
9.4 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2006 |
Emerging markets comprised 0.9% of total net assets.
5 Largest Country Allocations – (% of Investment Securities)
As of April 30, 2006 | As of October 31, 2005 | ||||||
![]() | ![]() | ||||||
Janus Core, Risk-Managed and Value Funds April 30, 2006 53
Janus Mid Cap Value Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Five Year | Since Inception* | ||||||||||||||||
Janus Mid Cap Value Fund Investor Shares | 11.19 | % | 20.64 | % | 12.45 | % | 17.97 | % | |||||||||||
Institutional Shares(1) | 11.27 | % | 20.79 | % | 12.64 | % | 18.09 | % | |||||||||||
Russell Midcap® Value Index | 13.58 | % | 24.75 | % | 13.69 | % | 12.23 | % | |||||||||||
Lipper Quartile | N/A | 3 | rd | 2 | nd | 1 | st | ||||||||||||
Lipper Ranking - based on total return for Mid-Cap Value Funds | N/A** | 201/267 | 51/146 | 4/81 |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes 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.
*The Fund's inception date – August 12, 1998
**The Fund's fiscal year-to-date Lipper ranking is not available.
(1) Closed to new investors.
See "Explanations of Charts, Tables and Financial Statements."
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.
Due to certain investment strategies, the Fund may have an increased position in cash for temporary defensive purposes.
The Fund's portfolio may differ significantly from the securities held in the index. The index is not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
This Fund is designed for long-term investors who can accept the special risks associated with value investing.
Janus Services LLC has contractually agreed to waive the transfer agency fees payable by the Fund's Institutional Shares to the level indicated in the prospectus until at least March 1, 2007. Without such waivers, the Fund's total return would have been lower.
Janus Capital Group Inc. has a 30% ownership stake in the investment advisory business of Perkins, Wolf, McDonnell and Company, LLC.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe 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.
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 page 5 for a detailed explanation of the information presented in these charts.
Investor Shares Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,111.90 | $ | 4.92 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.13 | $ | 4.71 | |||||||||
Institutional Shares Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,112.70 | $ | 4.09 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.93 | $ | 3.91 |
*Expenses are equal to the annualized expense ratio of 0.94% for Investor Shares and 0.78% for Institutional Shares, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Services for Institutional Shares.
54 Janus Core, Risk-Managed and Value Funds April 30, 2006
Janus Mid Cap Value Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Common Stock - 89.8% | |||||||||||
Advertising Agencies - 0.7% | |||||||||||
450,000 | Omnicom Group, Inc. | $ | 40,504,500 | ||||||||
Agricultural Chemicals - 0.9% | |||||||||||
900,000 | Agrium, Inc. (U.S. Shares) | 23,238,000 | |||||||||
2,000,000 | Mosaic Co.*,# | 30,000,000 | |||||||||
53,238,000 | |||||||||||
Apparel Manufacturers - 0.8% | |||||||||||
750,000 | Jones Apparel Group, Inc. | 25,762,500 | |||||||||
500,000 | Liz Claiborne, Inc. | 19,525,000 | |||||||||
45,287,500 | |||||||||||
Automotive - Truck Parts and Equipment - Original - 0.9% | |||||||||||
650,000 | Magna International, Inc. - Class A (U.S. Shares)# | 50,992,500 | |||||||||
Brewery - 1.0% | |||||||||||
800,000 | Molson Coors Brewing Co. - Class B | 59,088,000 | |||||||||
Broadcast Services and Programming - 0.5% | |||||||||||
3,500,000 | Liberty Media Corp. - Class A* | 29,225,000 | |||||||||
Chemicals - Diversified - 0.6% | |||||||||||
1,800,000 | Huntsman Corp.*,# | 35,370,000 | |||||||||
Chemicals - Specialty - 1.9% | |||||||||||
4,100,000 | Chemtura Corp.# | 50,020,000 | |||||||||
1,500,000 | Lubrizol Corp. | 65,415,000 | |||||||||
115,435,000 | |||||||||||
Coal - 1.0% | |||||||||||
600,000 | Arch Coal, Inc.# | 56,994,000 | |||||||||
Commercial Banks - 3.7% | |||||||||||
900,000 | Compass Bancshares, Inc. | 49,464,000 | |||||||||
700,000 | HSBC Holdings PLC (ADR)# | 60,676,000 | |||||||||
2,500,000 | Synovus Financial Corp. | 70,000,000 | |||||||||
1,700,000 | Valley National Bancorp# | 44,268,000 | |||||||||
224,408,000 | |||||||||||
Commercial Services - 0.3% | |||||||||||
1,500,000 | ServiceMaster Co.# | 18,060,000 | |||||||||
Commercial Services - Finance - 0.3% | |||||||||||
900,000 | H&R Block, Inc. | 20,547,000 | |||||||||
Computers - Integrated Systems - 1.1% | |||||||||||
1,500,000 | Diebold, Inc.# | 63,825,000 | |||||||||
Containers - Metal and Glass - 0.9% | |||||||||||
1,400,000 | Ball Corp. | 55,972,000 | |||||||||
Cosmetics and Toiletries - 1.3% | |||||||||||
700,000 | Alberto-Culver Co. | 31,479,000 | |||||||||
600,000 | Avon Products, Inc.# | 19,566,000 | |||||||||
700,000 | International Flavors & Fragrances, Inc.* | 24,731,000 | |||||||||
75,776,000 | |||||||||||
Data Processing and Management - 0.9% | |||||||||||
1,200,000 | Fiserv, Inc.* | 54,096,000 | |||||||||
Diagnostic Equipment - 0.5% | |||||||||||
1,050,000 | Cytyc Corp.*,# | 27,142,500 | |||||||||
Disposable Medical Products - 0.6% | |||||||||||
500,000 | C.R. Bard, Inc. | 37,230,000 | |||||||||
Distribution/Wholesale - 1.7% | |||||||||||
500,000 | Genuine Parts Co. | 21,825,000 | |||||||||
1,500,000 | Tech Data Corp.* | 55,080,000 | |||||||||
350,000 | W.W. Grainger, Inc. | 26,922,000 | |||||||||
103,827,000 |
Shares or Principal Amount | Value | ||||||||||
Diversified Operations - 1.6% | |||||||||||
750,000 | Dover Corp.# | $ | 37,312,500 | ||||||||
300,000 | Illinois Tool Works, Inc. | 30,810,000 | |||||||||
1,100,000 | Tyco International, Ltd. (U.S. Shares) | 28,985,000 | |||||||||
97,107,500 | |||||||||||
Diversified Operations - Commercial Services - 0.7% | |||||||||||
2,500,000 | Cendant Corp. | 43,575,000 | |||||||||
Electric - Integrated - 1.3% | |||||||||||
2,900,000 | DPL, Inc.# | 78,793,000 | |||||||||
Electric Products - Miscellaneous - 0.3% | |||||||||||
200,000 | Emerson Electric Co. | 16,990,000 | |||||||||
Electronic Components - Miscellaneous - 0.7% | |||||||||||
2,450,000 | Flextronics International, Ltd. (U.S. Shares)*,# | 27,832,000 | |||||||||
800,000 | Vishay Intertechnology, Inc.*,# | 12,496,000 | |||||||||
40,328,000 | |||||||||||
Electronic Components - Semiconductors - 0.8% | |||||||||||
1,500,000 | QLogic Corp.* | 31,215,000 | |||||||||
700,000 | Xilinx, Inc. | 19,369,000 | |||||||||
50,584,000 | |||||||||||
Fiduciary Banks - 1.6% | |||||||||||
1,250,000 | Bank of New York Company, Inc. | 43,937,500 | |||||||||
1,450,000 | Mellon Financial Corp. | 54,563,500 | |||||||||
98,501,000 | |||||||||||
Finance - Commercial - 0.5% | |||||||||||
600,000 | CIT Group, Inc. | 32,406,000 | |||||||||
Food - Confectionary - 0.7% | |||||||||||
1,100,000 | J.M. Smucker Co.# | 43,186,000 | |||||||||
Food - Diversified - 0.6% | |||||||||||
800,000 | H.J. Heinz Co. | 33,208,000 | |||||||||
Food - Wholesale/Distribution - 0.3% | |||||||||||
650,000 | Supervalu, Inc. | 18,856,500 | |||||||||
Forestry - 0.6% | |||||||||||
1,000,000 | Plum Creek Timber Company, Inc.# | 36,300,000 | |||||||||
Hotels and Motels - 0.9% | |||||||||||
2,050,000 | Hilton Hotels Corp. | 55,227,000 | |||||||||
Human Resources - 0.8% | |||||||||||
1,050,500 | Hewitt Associates, Inc. - Class A* | 30,453,995 | |||||||||
250,000 | Manpower, Inc.# | 16,287,500 | |||||||||
46,741,495 | |||||||||||
Industrial Gases - 0.8% | |||||||||||
700,000 | Air Products and Chemicals, Inc. | 47,964,000 | |||||||||
Instruments - Scientific - 1.0% | |||||||||||
700,000 | Fisher Scientific International, Inc.*,# | 49,385,000 | |||||||||
200,000 | Waters Corp.* | 9,064,000 | |||||||||
58,449,000 | |||||||||||
Insurance Brokers - 0.5% | |||||||||||
1,000,000 | Arthur J. Gallagher & Co.# | 27,440,000 | |||||||||
Internet Infrastructure Equipment - 0.4% | |||||||||||
1,000,000 | Avocent Corp.*,# | 26,940,000 |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2006 55
Janus Mid Cap Value Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Internet Security - 0.9% | |||||||||||
2,700,000 | Check Point Software Technologies, Ltd. (U.S. Shares)*,# | $ | 52,245,000 | ||||||||
200,000 | Symantec Corp.* | 3,276,000 | |||||||||
55,521,000 | |||||||||||
Investment Management and Advisory Services - 3.8% | |||||||||||
2,250,000 | AllianceBernstein Holding L.P.# | 145,012,500 | |||||||||
250,000 | Federated Investors, Inc. - Class B | 8,775,000 | |||||||||
250,000 | Franklin Resources, Inc. | 23,280,000 | |||||||||
2,100,000 | Waddell & Reed Financial, Inc. - Class A# | 49,392,000 | |||||||||
226,459,500 | |||||||||||
Machinery - Farm - 0.6% | |||||||||||
400,000 | Deere & Co. | 35,112,000 | |||||||||
Medical - Biomedical and Genetic - 0.8% | |||||||||||
700,000 | Invitrogen Corp.*,# | 46,207,000 | |||||||||
Medical - Drugs - 0.1% | |||||||||||
250,000 | Endo Pharmaceuticals Holdings, Inc.* | 7,862,500 | |||||||||
Medical - Generic Drugs - 0.6% | |||||||||||
2,350,000 | Perrigo Co.# | 37,506,000 | |||||||||
Medical - Hospitals - 0.8% | |||||||||||
1,500,000 | Health Management Associates, Inc. - Class A# | 31,065,000 | |||||||||
500,000 | LifePoint Hospitals, Inc.*,# | 15,850,000 | |||||||||
46,915,000 | |||||||||||
Medical - Nursing Homes - 0.8% | |||||||||||
1,050,000 | Manor Care, Inc.# | 46,042,500 | |||||||||
Medical Instruments - 0.7% | |||||||||||
650,000 | Beckman Coulter, Inc.# | 33,384,000 | |||||||||
350,000 | Boston Scientific Corp.* | 8,134,000 | |||||||||
41,518,000 | |||||||||||
Medical Labs and Testing Services - 0.7% | |||||||||||
750,000 | Laboratory Corporation of America Holdings* | 42,825,000 | |||||||||
Medical Products - 1.5% | |||||||||||
1,050,000 | Biomet, Inc.# | 39,039,000 | |||||||||
550,000 | Cooper Companies, Inc.# | 30,151,000 | |||||||||
400,000 | Henry Schein, Inc.* | 18,648,000 | |||||||||
87,838,000 | |||||||||||
Medical Sterilization Products - 0.1% | |||||||||||
371,600 | Steris Corp. | 8,554,232 | |||||||||
Multi-Line Insurance - 1.8% | |||||||||||
4,750,000 | Old Republic International Corp. | 105,687,500 | |||||||||
Multimedia - 0.6% | |||||||||||
700,000 | McGraw-Hill Companies, Inc. | 38,962,000 | |||||||||
Networking Products - 0.6% | |||||||||||
600,000 | Foundry Networks, Inc.*,# | 8,526,000 | |||||||||
1,600,000 | Juniper Networks, Inc.* | 29,568,000 | |||||||||
38,094,000 | |||||||||||
Non-Hazardous Waste Disposal - 1.7% | |||||||||||
550,000 | Republic Services, Inc. | 24,205,500 | |||||||||
2,050,000 | Waste Management, Inc. | 76,793,000 | |||||||||
100,998,500 | |||||||||||
Office Automation and Equipment - 1.8% | |||||||||||
1,600,000 | Pitney Bowes, Inc. | 66,960,000 | |||||||||
3,000,000 | Xerox Corp.* | 42,120,000 | |||||||||
109,080,000 |
Shares or Principal Amount | Value | ||||||||||
Oil - Field Services - 0.8% | |||||||||||
600,000 | BJ Services Co. | $ | 22,830,000 | ||||||||
300,000 | Halliburton Co. | 23,445,000 | |||||||||
46,275,000 | |||||||||||
Oil Companies - Exploration and Production - 7.3% | |||||||||||
650,000 | Anadarko Petroleum Corp.# | 68,133,000 | |||||||||
450,000 | Apache Corp. | 31,968,000 | |||||||||
1,000,000 | Cimarex Energy Co.# | 42,950,000 | |||||||||
1,100,000 | Forest Oil Corp.*,# | 40,227,000 | |||||||||
1,100,000 | Murphy Oil Corp.# | 55,198,000 | |||||||||
1,750,000 | Newfield Exploration Co.* | 78,049,999 | |||||||||
1,450,000 | Noble Energy, Inc. | 65,221,000 | |||||||||
300,000 | Southwestern Energy Co.* | 10,806,000 | |||||||||
550,000 | St. Mary Land & Exploration Co. | 23,188,000 | |||||||||
450,000 | Stone Energy Corp.*,# | 21,195,000 | |||||||||
436,935,999 | |||||||||||
Oil Companies - Integrated - 0.5% | |||||||||||
400,000 | Marathon Oil Corp. | 31,744,000 | |||||||||
Oil Refining and Marketing - 0.3% | |||||||||||
250,000 | Sunoco, Inc. | 20,260,000 | |||||||||
Paper and Related Products - 2.9% | |||||||||||
1,287,480 | Potlatch Corp.# | 50,134,471 | |||||||||
1,250,000 | Rayonier, Inc.# | 51,450,000 | |||||||||
1,600,000 | Smurfit-Stone Container Corp.*,# | 20,720,000 | |||||||||
1,050,000 | Temple-Inland, Inc.# | 48,762,000 | |||||||||
171,066,471 | |||||||||||
Pharmacy Services - 0.5% | |||||||||||
550,000 | Omnicare, Inc.# | 31,190,500 | |||||||||
Pipelines - 1.0% | |||||||||||
1,100,000 | Western Gas Resources, Inc.# | 57,200,000 | |||||||||
Property and Casualty Insurance - 0.5% | |||||||||||
600,000 | Mercury General Corp. | 32,022,000 | |||||||||
Publishing - Newspapers - 0.2% | |||||||||||
500,000 | Tribune Co.# | 14,415,000 | |||||||||
Publishing - Periodicals - 0.2% | |||||||||||
700,000 | Reader's Digest Association, Inc.# | 9,646,000 | |||||||||
Radio - 0.5% | |||||||||||
2,300,000 | Cox Radio, Inc. - Class A*,#,£ | 29,693,000 | |||||||||
Real Estate Operating/Development - 0.2% | |||||||||||
200,000 | St. Joe Co.# | 11,232,000 | |||||||||
Reinsurance - 2.9% | |||||||||||
38,000 | Berkshire Hathaway, Inc. - Class B*,# | 112,176,000 | |||||||||
2,300,000 | IPC Holdings, Ltd.# | 61,341,000 | |||||||||
173,517,000 | |||||||||||
REIT - Apartments - 0.3% | |||||||||||
400,000 | Archstone-Smith Trust, Inc. | 19,552,000 | |||||||||
REIT - Health Care - 0.5% | |||||||||||
1,150,000 | Health Care Property Investors, Inc. | 31,533,000 | |||||||||
REIT - Office Property - 0.4% | |||||||||||
250,000 | Alexandria Real Estate Equities, Inc. | 22,650,000 | |||||||||
REIT - Regional Malls - 0.4% | |||||||||||
300,000 | Macerich Co. | 21,966,000 | |||||||||
REIT - Shopping Centers - 0.3% | |||||||||||
400,000 | Weingarten Realty Investors | 15,764,000 |
See Notes to Schedules of Investments and Financial Statements.
56 Janus Core, Risk-Managed and Value Funds April 30, 2006
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
REIT - Warehouse and Industrial - 1.0% | |||||||||||
1,250,000 | ProLogis# | $ | 62,775,000 | ||||||||
Resorts and Theme Parks - 0.7% | |||||||||||
650,000 | Intrawest Corp. (U.S. Shares)# | 23,335,000 | |||||||||
500,000 | Vail Resorts, Inc.*,# | 18,800,000 | |||||||||
42,135,000 | |||||||||||
Retail - Apparel and Shoe - 1.3% | |||||||||||
1,600,000 | Foot Locker, Inc. | 37,088,000 | |||||||||
800,000 | Gap, Inc. | 14,472,000 | |||||||||
1,000,000 | Talbots, Inc.# | 23,720,000 | |||||||||
75,280,000 | |||||||||||
Retail - Auto Parts - 0.6% | |||||||||||
400,000 | AutoZone, Inc.* | 37,444,000 | |||||||||
Retail - Drug Store - 0.8% | |||||||||||
1,700,000 | CVS Corp. | 50,524,000 | |||||||||
Retail - Major Department Stores - 0.4% | |||||||||||
1,050,000 | Saks, Inc.*,# | 21,147,000 | |||||||||
Retail - Restaurants - 0.3% | |||||||||||
800,000 | Applebee's International, Inc.# | 18,568,000 | |||||||||
Rubber - Tires - 0.6% | |||||||||||
2,923,400 | Cooper Tire & Rubber Co.#,£ | 37,127,180 | |||||||||
Savings/Loan/Thrifts - 1.1% | |||||||||||
1,450,000 | Astoria Financial Corp.# | 45,414,000 | |||||||||
800,000 | Washington Federal, Inc.# | 19,136,000 | |||||||||
64,550,000 | |||||||||||
Schools - 0.3% | |||||||||||
300,000 | Apollo Group, Inc. - Class A* | 16,392,000 | |||||||||
Super-Regional Banks - 2.8% | |||||||||||
700,000 | PNC Bank Corp. | 50,029,000 | |||||||||
1,550,000 | SunTrust Banks, Inc. | 119,861,500 | |||||||||
169,890,500 | |||||||||||
Telecommunication Equipment - 0.4% | |||||||||||
1,400,000 | Andrew Corp.*,# | 14,812,000 | |||||||||
700,000 | Avaya, Inc.*,# | 8,400,000 | |||||||||
23,212,000 | |||||||||||
Telephone - Integrated - 1.4% | |||||||||||
950,000 | ALLTEL Corp. | 61,151,500 | |||||||||
650,000 | CenturyTel, Inc.# | 24,505,000 | |||||||||
85,656,500 | |||||||||||
Television - 0.7% | |||||||||||
1,100,000 | Univision Communications, Inc. - Class A*,# | 39,259,000 | |||||||||
Toys - 0.3% | |||||||||||
1,200,000 | Mattel, Inc. | 19,416,000 | |||||||||
Transportation - Railroad - 3.3% | |||||||||||
500,000 | CSX Corp. | 34,245,000 | |||||||||
2,000,000 | Kansas City Southern*,# | 48,600,000 | |||||||||
1,250,000 | Norfolk Southern Corp. | 67,500,000 | |||||||||
550,000 | Union Pacific Corp. | 50,165,500 | |||||||||
200,510,500 |
Shares or Principal Amount | Value | ||||||||||
Transportation - Services - 1.1% | |||||||||||
2,598,800 | Laidlaw International, Inc. | $ | 64,320,300 | ||||||||
Transportation - Truck - 1.3% | |||||||||||
3,250,000 | J.B. Hunt Transport Services, Inc.# | 77,447,500 | |||||||||
Wireless Equipment - 0.1% | |||||||||||
989,129 | Wireless Facilities, Inc.*,# | 4,322,494 | |||||||||
Total Common Stock (cost $4,712,316,515) | 5,381,436,171 | ||||||||||
Money Markets - 8.6% | |||||||||||
290,000,000 | Janus Institutional Cash Reserves Fund, 4.83% | 290,000,000 | |||||||||
225,000,000 | Janus Money Market Fund, 4.77% | 225,000,000 | |||||||||
Total Money Markets (cost $515,000,000) | 515,000,000 | ||||||||||
Other Securities - 9.6% | |||||||||||
575,727,492 | State Street Navigator Securities Lending Prime Portfolio† (cost $575,727,492) | 575,727,492 | |||||||||
Short-Term U.S. Government Agencies - 0.6% | |||||||||||
$ | 20,000,000 | Fannie Mae 4.35%, 3/8/06 | 20,000,000 | ||||||||
20,000,000 | Freddie Mac 4.54%, 5/30/06 | 19,926,856 | |||||||||
Total Short-Term U.S. Government Agencies (amortized cost $39,926,856) | 39,926,856 | ||||||||||
Time Deposits - 1.3% | |||||||||||
Dexia CLF Finance Co., ETD: | |||||||||||
14,000,000 | 4.85%, 5/1/06 | 14,000,000 | |||||||||
66,400,000 | 4.82%, 5/1/06 | 66,400,000 | |||||||||
Total Time Deposits (cost $80,400,000) | 80,400,000 | ||||||||||
Total Investments (total cost $5,923,370,863) – 109.9% | 6,592,490,519 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (9.9)% | (595,655,375 | ) | |||||||||
Net Assets – 100% | $ | 5,996,835,144 |
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Bermuda | $ | 90,326,000 | 1.4 | % | |||||||
Canada | 97,565,500 | 1.5 | % | ||||||||
Israel | 52,245,000 | 0.8 | % | ||||||||
Singapore | 27,832,000 | 0.4 | % | ||||||||
United Kingdom | 60,676,000 | 0.9 | % | ||||||||
United States†† | 6,263,846,019 | 95.0 | % | ||||||||
Total | $ | 6,592,490,519 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (76.6% excluding Short-Term Securities and Other Securities)
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2006 57
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
Performance Overview
Janus Small Cap Value Fund lagged its benchmark, the Russell 2000® Value Index, through the first four months of 2006. As a result, the Fund's Investor Shares and Institutional Shares posted gains of 10.15% and 10.28%, respectively, during the six-month period ended April 30, 2006 while the benchmark advanced 17.52%.
While 2005 was a year in which stock picking took on increasing importance and the Fund faired relatively well, stock selection detracted from performance for the six-month period ended April 30, 2006. Of the broader 24 sectors comprising the benchmark, only two posted negative returns – media, and automobiles and components. The Fund's holdings in these two areas performed relatively well, but a larger than the benchmark stake in both, as well as significantly underperforming holdings in the telecommunication services sector detracted from results.
However, these three areas aren't responsible for all of the underperformance in the period. As we have often said, we do not manage the Fund for short-term returns. Within our investment process, we attempt to identify companies that we believe are being temporarily mis-priced relative to long-term prospects, or try to identify out-of-favor industries. This becomes increasingly difficult when volatility is low and broad-based momentum takes over, as seemed to be the case for the market through the first four months of 2006, especially with respect to small-cap stocks. Furthermore, we sell positions when they reach the price targets we set which are based on what we feel are realistic multiples of longer-term normalized earnings streams. While we managed to marginally reduce the negative effect of a relatively large cash position by adding to our equity holdings, we continued to emphasize companies that are financially sound and have relativ ely predictable cash flows. Accordingly, it could be argued that our adherence to this process affected our relative returns. Merrill Lynch strategists determined low-quality small-cap stocks (defined as companies with market caps less than $2.7 billion) generally outperformed high-quality small-caps during the period. And after realizing significant long-term gains in the highly cyclical stocks that we eliminated in 2005 at what history says were fair multiples of our estimates of peak earnings, we have seen their multiples expand as though those earnings estimates are merely mid-cycle.
Holdings that Detracted from Performance
Looking at the Fund's individual holdings, the worst performer during the period was specialty communications consulting firm Wireless Facilities. Having endured a rough 2005, in which costs ran higher than anticipated, the wireless network designer struggled to meet financial targets during the period. As it shed its problematic operations in Mexico and holds minimal long-term debt, we waited out a potential turnaround.
Another notable detractor was LifePoint Hospitals, which owns and operates 53 rural hospitals, including five in Louisiana. The company struggled to recover from Hurricane Katrina and contended with concerns over Medicare reimbursement policies and its integration of Province Healthcare – a 2005 acquisition – but our analysis prompted us to increase the Fund's exposure.
Our media names performed essentially in line with the Index, but as noted previously, the Fund's overweight position in the sector hurt relative results. During the period, radio broadcaster Entercom Communications announced it would start returning cash to shareholders in the form of a dividend. Resulting in a projected yield of around 5%, the stock held up better than the rest of the media group, although it still diminished returns. Recently, consolidation in the industry has increased, and based on multiples being paid, it appears to us that Entercom is undervalued, so we increased our stake.
Among auto-related names, the Fund absorbed losses in tiremaker Cooper Tire & Rubber and Superior Industries International, which manufactures aluminum wheels. We remain comfortable with the long-term prospects of Cooper Tire, which recently entered the Chinese market with an acquisition, but we feel the headwinds facing Superior have become quite strong, so we pared back our stake.
Holdings that Contributed to Performance
Areas of strength for the Fund during the period included the industrial, information technology and material sectors. These economically sensitive areas extended the relative strength each experienced in the fourth quarter of 2005, most likely due to the general consensus that interest rate hikes are nearing an end and corporate spending will continue. The period's best performer and also a top ten holding for the Fund, cash-rich machinery company Kaydon, is a member of the industrial group. The position was built, for the most part, in 2005 as the stock lagged its peers. As Kaydon reported earnings above expectations, and the market began to understand the flexibility of its balance sheet, the stock began to narrow the valuation gap.
While we had a relatively large exposure to materials, the weighting consisted entirely of paper/forest product and specialty chemical stocks. Although the chemical stocks ranked among the Fund's best performers in 2005 from a relative standpoint, our holding's gains this year have lagged more speculative peers. We built positions in paper/forest product companies Glatfelter and Wausau Paper in 2005 as the stocks lagged the sector. These investments rewarded shareholders during the period as earnings prospects for both companies improved off of a low base, and the market remains preoccupied with the value of land – of which both have substantial tracts.
Within the consumer discretionary group, we were rewarded for adding to our position in apparel retailer Aeropostale on
58 Janus Core, Risk-Managed and Value Funds April 30, 2006
(unaudited)
weakness. The stock recovered nicely, and we were pleased to exit the position once our price objective was met. We had a similar experience with retailer Border's Group during the period, albeit with less dramatic returns. While we are generally skeptical of the earnings prospects for consumer stocks for the balance of 2006 and into 2007, we continue to believe in the strategy of opportunistically buying companies with healthy balance sheets, trading at historically low valuations on lowered expectations
Lastly, within the technology industry, transaction processing software developer TNS announced in March that it had received a management-led buyout offer. As we had taken advantage of a slump in the stock following a disappointing quarterly report, we enjoyed the takeout-driven lift and locked in some profits by selling a portion of our stake as it reached our target.
Investment Strategy and Outlook
For a variety of reasons, we have always believed that over long periods of time small-cap stocks outperform their larger-cap brethren. However, within that pattern of long-term performance, there are periods in which the roles are reversed and large-cap stocks do relatively better. Our Fund, over multiple market cycles has shown the ability to generate top tier returns, as evidenced by our 10-year annualized return of 15.60% for the Fund's Investor Shares and 15.90% for the Fund's Institutional Shares versus our benchmark's 13.75% return and the 8.94% annualized return of the S&P 500® Index.
The current cycle of small-cap outperformance began in 2000, at a time when large-caps were considerably more expensive than small-caps. Now, the valuation disparity has been reversed and small-caps are at or near historically high premiums relative to large-caps. While market momentum could prolong and widen this anomaly, we believe that eventually these relative valuations will become more closely aligned. Unfortunately, this reversion could occur in a market decline in which larger-caps drop less than smaller-caps, which historically has been the type of market in which the Fund has done relatively well.
In any case, we feel our disciplined approach to investing is the best approach to above-average returns over multiple market cycles. And, in sticking to our process of investing in what we view as temporarily mis-priced, fundamentally sound situations, we have recently added to our personal investments in the Fund.
As always, we appreciate your joining us as co-investors in Janus Small Cap Value Fund.
Janus Small Cap Value Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Kaydon Corp. Custom-engineered products designer - U.S. | 0.77% | ||||||
Stratex Networks, Inc. Wireless solutions company - U.S. | 0.68% | ||||||
Home Properties, Inc Real estate investment trust - U.S. | 0.67% | ||||||
Wolverine World Wide, Inc. Shoe manufacturer - U.S. | 0.50% | ||||||
TTM Technologies, Inc. Manufacturer of printed circuit boards - U.S. | 0.46% |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Wireless Facilities, Inc. Diversified communication services company - U.S. | (0.23%) | ||||||
LifePoint Hospitals, Inc. Healthcare services provider - U.S. | (0.20%) | ||||||
Pixelworks, Inc. Semiconductor and software developer - U.S. | (0.17%) | ||||||
First Financial Bancorp Financial holding company - U.S. | (0.16%) | ||||||
Reader's Digest Association, Inc Publisher - U.S. | (0.16%) |
5 Largest Contributors to Performance – Sectors
Group | Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | ||||||||||||
Capital Goods | 1.92 | % | 7.99 | % | 11.15 | % | |||||||||
Materials | 1.78 | % | 9.82 | % | 6.15 | % | |||||||||
Technology Hardware & Equipment | 1.77 | % | 5.04 | % | 6.48 | % | |||||||||
Energy | 1.59 | % | 9.79 | % | 4.87 | % | |||||||||
Real Estate | 1.31 | % | 7.77 | % | 10.78 | % |
5 Largest Detractors from Performance – Sectors
Group | Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | ||||||||||||
Media | (0.50 | %) | 3.84 | % | 1.94 | % | |||||||||
Telecommunications Services | (0.30 | %) | 1.05 | % | 1.83 | % | |||||||||
Semiconductors & Semiconductor Equipment | (0.15 | %) | 0.81 | % | 2.94 | % | |||||||||
Food & Staples Retailing | (0.07 | %) | 3.96 | % | 0.94 | % | |||||||||
Automobiles & Components | (0.02 | %) | 3.48 | % | 1.42 | % |
Janus Core, Risk-Managed and Value Funds April 30, 2006 59
Janus Small Cap Value Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2006 | |||||||
Wolverine World Wide, Inc. Footwear & Related Apparel | 2.7 | % | |||||
Lubrizol Corp. Chemicals - Specialty | 2.4 | % | |||||
Laidlaw International, Inc. Transportation - Services | 2.2 | % | |||||
Kaydon Corp. Metal Processors and Fabricators | 2.1 | % | |||||
Old Republic International Corp. Multi-Line Insurance | 2.1 | % | |||||
11.5 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2006 |
Emerging markets comprised 1.1% of total net assets.
5 Largest Country Allocations – (% of Investment Securities)
As of April 30, 2006 | As of October 31, 2005 | ||||||
![]() | ![]() | ||||||
60 Janus Core, Risk-Managed and Value Funds April 30, 2006
(unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Five Year | Ten Year | ||||||||||||||||
Janus Small Cap Value Fund Investor Shares | 10.15 | % | 20.30 | % | 10.80 | % | 15.60 | % | |||||||||||
Institutional Shares(1) | 10.28 | % | 20.53 | % | 11.08 | % | 15.90 | % | |||||||||||
Russell 2000® Value Index | 17.52 | % | 30.85 | % | 15.25 | % | 13.75 | % | |||||||||||
Lipper Quartile | N/A | 4 | th | 3 | rd | N/A | |||||||||||||
Lipper Ranking - based on total return for Small-Cap Core Funds | N/A* | 612/633 | 243/373 | N/A* |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes 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.
*The Fund's fiscal year-to-date and ten-year Lipper rankings are not available.
(1) Closed to new investors.
See "Explanations of Charts, Tables and Financial Statements."
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.
Janus Capital Group Inc. has a 30% ownership stake in the investment advisory business of Perkins, Wolf, McDonnell and Company, LLC.
The Fund's portfolio may differ significantly from the securities held in the index. The index is not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
Funds that emphasize investments in smaller companies may experience greater price volatility. This Fund is designed for long-term investors who can accept the special risks associated with value investing.
Janus Services LLC has contractually agreed to waive the transfer agency fees payable by the Fund's Institutional Shares to the level indicated in the prospectus until at least March 1, 2007. Without such waivers, the Fund's total return would have been lower.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe 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.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example - Investor Shares | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,101.50 | $ | 5.31 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.74 | $ | 5.11 | |||||||||
Expense Example - Institutional Shares | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,102.80 | $ | 4.17 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.83 | $ | 4.01 |
*Expenses are equal to the annualized expense ratio of 1.02% for Investor Shares and 0.80% for Institutional Shares, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Services for Institutional Shares.
Janus Core, Risk-Managed and Value Funds April 30, 2006 61
Janus Small Cap Value Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Common Stock - 92.4% | |||||||||||
Agricultural Chemicals - 1.6% | |||||||||||
1,825,327 | UAP Holding Corp. | $ | 37,711,256 | ||||||||
Athletic Equipment - 0.3% | |||||||||||
482,600 | Nautilus, Inc.# | 7,914,640 | |||||||||
Automotive - Truck Parts and Equipment - Original - 0.6% | |||||||||||
95,260 | Modine Manufacturing Co.# | 2,763,493 | |||||||||
600,000 | Superior Industries International, Inc.# | 11,292,000 | |||||||||
14,055,493 | |||||||||||
Building - Mobile Home and Manufactured Homes - 0.7% | |||||||||||
1,200,000 | Monaco Coach Corp.# | 16,704,000 | |||||||||
Building and Construction Products - Miscellaneous - 0.7% | |||||||||||
600,000 | Trex Company, Inc.*,# | 17,928,000 | |||||||||
Chemicals - Plastics - 0.3% | |||||||||||
300,000 | Spartech Corp.# | 7,089,000 | |||||||||
Chemicals - Specialty - 5.7% | |||||||||||
1,850,000 | Ferro Corp.# | 35,668,000 | |||||||||
1,350,000 | Lubrizol Corp. | 58,873,500 | |||||||||
1,254,500 | MacDermid, Inc.# | 43,029,350 | |||||||||
137,570,850 | |||||||||||
Circuit Boards - 0.5% | |||||||||||
700,000 | TTM Technologies, Inc.*,# | 11,382,000 | |||||||||
Coal - 1.5% | |||||||||||
390,000 | Arch Coal, Inc.# | 37,046,100 | |||||||||
Commercial Banks - 6.1% | |||||||||||
1,900,000 | F.N.B. Corp.# | 31,882,000 | |||||||||
863,939 | First Charter Corp.# | 20,535,830 | |||||||||
1,460,000 | First Financial Bancorp.# | 23,403,800 | |||||||||
200,800 | First Midwest Bancorp, Inc.# | 7,234,824 | |||||||||
1,350,000 | Old National Bancorp# | 27,864,000 | |||||||||
1,000,000 | Susquehanna Bancshares, Inc.# | 23,870,000 | |||||||||
403,845 | TD Banknorth, Inc.# | 11,990,158 | |||||||||
146,780,612 | |||||||||||
Commercial Services - Finance - 0.7% | |||||||||||
800,000 | TNS, Inc.*,# | 16,584,000 | |||||||||
Communications Software - 0.5% | |||||||||||
570,800 | Inter-Tel, Inc.# | 13,094,152 | |||||||||
Computer Services - 1.7% | |||||||||||
1,200,000 | Covansys Corp.* | 20,880,000 | |||||||||
909,700 | Manhattan Associates, Inc.*,# | 19,749,587 | |||||||||
40,629,587 | |||||||||||
Consulting Services - 0.4% | |||||||||||
246,300 | MAXIMUS, Inc. | 8,581,092 | |||||||||
Decision Support Software - 0.8% | |||||||||||
1,700,000 | NetIQ Corp.*,# | 20,400,000 | |||||||||
Distribution/Wholesale - 0.8% | |||||||||||
525,000 | Tech Data Corp.* | 19,278,000 | |||||||||
Diversified Operations - 0.9% | |||||||||||
1,150,000 | Federal Signal Corp.# | 21,539,500 | |||||||||
Electric Products - Miscellaneous - 0.5% | |||||||||||
400,000 | Littelfuse, Inc.*,# | 12,916,000 | |||||||||
Electronic Components - Semiconductors - 0.3% | |||||||||||
1,783,000 | Pixelworks, Inc.*,# | 7,042,850 | |||||||||
Electronic Measuring Instruments - 0.7% | |||||||||||
700,000 | Orbotech, Ltd.*,# | 17,787,000 |
Shares or Principal Amount | Value | ||||||||||
Engines - Internal Combustion - 0.3% | |||||||||||
221,700 | Briggs & Stratton Corp.# | $ | 7,480,158 | ||||||||
Food - Diversified - 0.4% | |||||||||||
375,000 | Corn Products International, Inc.# | 10,500,000 | |||||||||
Food - Retail - 1.1% | |||||||||||
1,100,000 | Ruddick Corp.# | 25,531,000 | |||||||||
Food - Wholesale/Distribution - 1.0% | |||||||||||
800,000 | Supervalu, Inc. | 23,208,000 | |||||||||
Footwear and Related Apparel - 2.7% | |||||||||||
2,649,100 | Wolverine World Wide, Inc.# | 65,803,644 | |||||||||
Instruments - Scientific - 1.3% | |||||||||||
620,000 | FEI Co.*,# | 13,478,800 | |||||||||
425,000 | Varian, Inc.*,# | 18,389,750 | |||||||||
31,868,550 | |||||||||||
Internet Infrastructure Equipment - 0.6% | |||||||||||
550,000 | Avocent Corp.*,# | 14,817,000 | |||||||||
Internet Infrastructure Software - 0.3% | |||||||||||
500,300 | RADWARE Ltd. (U.S. Shares)*,# | 7,929,755 | |||||||||
Internet Security - 0.4% | |||||||||||
1,200,000 | SonicWALL, Inc.* | 10,188,000 | |||||||||
Investment Management and Advisory Services - 2.0% | |||||||||||
2,000,000 | Waddell & Reed Financial, Inc. - Class A# | 47,040,000 | |||||||||
Machinery - General Industrial - 1.5% | |||||||||||
950,000 | Albany International Corp. - Class A# | 37,145,000 | |||||||||
Medical - Biomedical and Genetic - 0.5% | |||||||||||
392,900 | Serologicals Corp.*,# | 12,227,048 | |||||||||
Medical - Generic Drugs - 1.8% | |||||||||||
2,700,000 | Perrigo Co.# | 43,092,000 | |||||||||
Medical - HMO - 0.8% | |||||||||||
575,000 | Molina Healthcare, Inc.*,# | 18,802,500 | |||||||||
Medical - Hospitals - 0.9% | |||||||||||
690,000 | LifePoint Hospitals, Inc.*,# | 21,873,000 | |||||||||
Medical - Nursing Homes - 0.7% | |||||||||||
400,000 | Manor Care, Inc.# | 17,540,000 | |||||||||
Medical Information Systems - 0.6% | |||||||||||
1,200,000 | Dendrite International, Inc.*,# | 14,916,000 | |||||||||
Medical Instruments - 0.2% | |||||||||||
298,642 | Symmetry Medical, Inc.*,# | 5,942,976 | |||||||||
Medical Products - 2.3% | |||||||||||
825,000 | Invacare Corp.# | 25,286,250 | |||||||||
1,250,000 | Wright Medical Group, Inc.*,# | 29,337,500 | |||||||||
54,623,750 | |||||||||||
Medical Sterilization Products - 1.1% | |||||||||||
1,106,100 | Steris Corp. | 25,462,422 | |||||||||
Metal Processors and Fabricators - 2.1% | |||||||||||
1,200,000 | Kaydon Corp.# | 51,528,000 | |||||||||
Multi-Line Insurance - 2.1% | |||||||||||
2,250,000 | Old Republic International Corp. | 50,062,500 | |||||||||
Oil Companies - Exploration and Production - 6.1% | |||||||||||
171,243 | Complete Production Services, Inc.* | 4,525,952 | |||||||||
500,000 | Edge Petroleum Corp.*,# | 11,555,000 | |||||||||
850,000 | Forest Oil Corp.* | 31,084,500 | |||||||||
300,000 | Newfield Exploration Co.* | 13,380,000 | |||||||||
1,200,000 | Petrohawk Energy Corp.*,# | 15,096,000 |
See Notes to Schedules of Investments and Financial Statements.
62 Janus Core, Risk-Managed and Value Funds April 30, 2006
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Oil Companies - Exploration and Production - (continued) | |||||||||||
950,000 | St. Mary Land & Exploration Co.# | $ | 40,052,000 | ||||||||
650,000 | Stone Energy Corp.*,# | 30,615,000 | |||||||||
146,308,452 | |||||||||||
Paper and Related Products - 4.8% | |||||||||||
900,000 | Glatfelter# | 16,848,000 | |||||||||
478,938 | Potlatch Corp.# | 18,649,846 | |||||||||
950,000 | Rayonier, Inc. | 39,102,000 | |||||||||
700,000 | Schweitzer-Mauduit International, Inc.# | 16,947,000 | |||||||||
1,650,000 | Wausau Paper Corp.# | 23,727,000 | |||||||||
115,273,846 | |||||||||||
Property and Casualty Insurance - 0.4% | |||||||||||
314,133 | Harleysville Group, Inc.# | 9,423,990 | |||||||||
Publishing - Books - 0.6% | |||||||||||
575,000 | Scholastic Corp.*,# | 15,260,500 | |||||||||
Publishing - Periodicals - 1.4% | |||||||||||
2,400,000 | Reader's Digest Association, Inc.# | 33,072,000 | |||||||||
Radio - 1.7% | |||||||||||
975,000 | Cox Radio, Inc. - Class A*,# | 12,587,250 | |||||||||
1,100,000 | Entercom Communications Corp.# | 29,117,000 | |||||||||
41,704,250 | |||||||||||
Reinsurance - 0.7% | |||||||||||
628,200 | IPC Holdings, Ltd.# | 16,754,094 | |||||||||
REIT - Apartments - 1.2% | |||||||||||
575,000 | Home Properties, Inc. | 28,761,500 | |||||||||
REIT - Manufactured Homes - 0.8% | |||||||||||
425,000 | Equity Lifestyle Properties, Inc.# | 18,695,750 | |||||||||
REIT - Office Property - 0.6% | |||||||||||
150,000 | Alexandria Real Estate Equities, Inc.# | 13,590,000 | |||||||||
REIT - Warehouse and Industrial - 0.6% | |||||||||||
300,000 | EastGroup Properties, Inc. | 13,401,000 | |||||||||
Research and Development - 0.6% | �� | ||||||||||
625,000 | PRA International* | 14,537,500 | |||||||||
Resorts and Theme Parks - 0.6% | |||||||||||
379,600 | Intrawest Corp. (U.S. Shares)# | 13,627,640 | |||||||||
Retail - Apparel and Shoe - 1.6% | |||||||||||
800,000 | Hot Topic, Inc.*,# | 11,864,000 | |||||||||
584,300 | Kenneth Cole Productions, Inc.# | 14,905,493 | |||||||||
550,000 | Talbots, Inc.# | 13,046,000 | |||||||||
39,815,493 | |||||||||||
Retail - Convenience Stores - 1.7% | |||||||||||
1,900,000 | Casey's General Stores, Inc.# | 40,641,000 | |||||||||
Retail - Discount - 2.3% | |||||||||||
1,300,000 | Big Lots, Inc.*,# | 18,785,000 | |||||||||
1,747,000 | Fred's, Inc. | 24,789,930 | |||||||||
575,000 | Tuesday Morning Corp.# | 10,896,250 | |||||||||
54,471,180 | |||||||||||
Retail - Pet Food and Supplies - 0.5% | |||||||||||
600,000 | PETCO Animal Supplies, Inc.* | 13,140,000 | |||||||||
Retail - Propane Distribution - 1.1% | |||||||||||
1,000,000 | Inergy L.P.# | 26,550,000 | |||||||||
Rubber - Tires - 1.2% | |||||||||||
2,200,000 | Cooper Tire & Rubber Co.# | 27,940,000 |
Shares or Principal Amount | Value | ||||||||||
Savings/Loan/Thrifts - 5.6% | |||||||||||
1,700,000 | Brookline Bancorp, Inc.# | $ | 25,160,000 | ||||||||
1,800,000 | Dime Community Bancshares# | 25,506,000 | |||||||||
1,800,000 | First Niagara Financial Group, Inc.# | 25,200,000 | |||||||||
1,000,000 | Flushing Financial Corp.#,£ | 16,930,000 | |||||||||
1,500,000 | Provident Financial Services, Inc.# | 27,375,000 | |||||||||
650,000 | Washington Federal, Inc.# | 15,548,000 | |||||||||
135,719,000 | |||||||||||
Schools - 0.4% | |||||||||||
431,900 | Universal Technical Institute, Inc.* | 10,646,335 | |||||||||
Semiconductor Components/Integrated Circuits - 0.3% | |||||||||||
335,800 | Standard Microsystems Corp.* | 7,824,140 | |||||||||
Semiconductor Equipment - 0.8% | |||||||||||
750,000 | Brooks Automation, Inc.*,# | 10,140,000 | |||||||||
450,000 | Photronics, Inc.*,# | 8,086,500 | |||||||||
18,226,500 | |||||||||||
Telecommunication Services - 0.7% | |||||||||||
2,144,100 | Premiere Global Services, Inc.*,# | 16,745,421 | |||||||||
Transportation - Railroad - 1.6% | |||||||||||
1,600,000 | Kansas City Southern*,# | 38,880,000 | |||||||||
Transportation - Services - 2.2% | |||||||||||
2,100,000 | Laidlaw International, Inc.# | 51,975,000 | |||||||||
Transportation - Truck - 1.1% | |||||||||||
1,100,000 | J.B. Hunt Transport Services, Inc.# | 26,213,000 | |||||||||
Wireless Equipment - 1.2% | |||||||||||
3,424,862 | Stratex Networks, Inc.*,# | 21,610,879 | |||||||||
1,829,294 | Wireless Facilities, Inc.*,# | 7,994,015 | |||||||||
29,604,894 | |||||||||||
Total Common Stock (cost $1,832,239,175) | 2,228,417,920 | ||||||||||
Money Markets - 6.6% | |||||||||||
85,000,000 | Janus Institutional Cash Reserves Fund, 4.83% | 85,000,000 | |||||||||
75,000,000 | Janus Money Market Fund, 4.77% | 75,000,000 | |||||||||
Total Money Markets (cost $160,000,000) | 160,000,000 | ||||||||||
Other Securities - 20.1% | |||||||||||
483,417,062 | State Street Navigator Securities Lending Prime Portfolio† (cost $483,417,062) | 483,417,062 | |||||||||
Time Deposit - 0.7% | |||||||||||
$ | 15,900,000 | Dexia CLF Finance Co., ETD 4.82%, 5/1/06 (cost $15,900,000) | 15,900,000 | ||||||||
Total Investments (total cost $2,491,556,237) – 119.8% | 2,887,734,982 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (19.8)% | (477,774,427 | ) | |||||||||
Net Assets – 100% | $ | 2,409,960,555 |
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Bermuda | $ | 16,754,094 | 0.6 | % | |||||||
Canada | 13,627,640 | 0.5 | % | ||||||||
Israel | 25,716,755 | 0.9 | % | ||||||||
United States†† | 2,831,636,493 | 98.0 | % | ||||||||
Total | $ | 2,887,734,982 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (75.2% excluding Short-Term Securities and Other Securities)
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2006 63
Statements of Assets and Liabilities
As of April 30, 2006 (unaudited) (all numbers in thousands except net asset value per share) | Janus Balanced Fund | Janus Contrarian Fund | Janus Core Equity Fund | Janus Growth and Income Fund | |||||||||||||||
Assets: | |||||||||||||||||||
Investments at cost(2) | $ | 2,580,929 | $ | 2,944,648 | $ | 933,260 | $ | 5,914,970 | |||||||||||
Investments at value(2) | $ | 3,017,479 | $ | 4,079,368 | $ | 1,112,093 | $ | 7,549,284 | |||||||||||
Cash | 7,310 | 34,579 | 1,064 | 2,901 | |||||||||||||||
Cash denominated in foreign currency(3) | – | 566 | – | 1,170 | |||||||||||||||
Receivables: | |||||||||||||||||||
Investments sold | 11,319 | 19,603 | 3,908 | 21,411 | |||||||||||||||
Fund shares sold | 1,083 | 3,589 | 1,932 | 6,719 | |||||||||||||||
Dividends | 1,461 | 4,075 | 1,125 | 7,174 | |||||||||||||||
Interest | 11,274 | 26 | 17 | 198 | |||||||||||||||
Other assets | 15 | 20 | 5 | 34 | |||||||||||||||
Forward currency contracts | – | 241 | – | – | |||||||||||||||
Total Assets | 3,049,941 | 4,142,067 | 1,120,144 | 7,588,891 | |||||||||||||||
Liabilities: | |||||||||||||||||||
Payables: | |||||||||||||||||||
Options written, at value(4) | – | 1,850 | – | – | |||||||||||||||
Collateral for securities loaned (Note 1) | 480,667 | 242,922 | 48,689 | 399,819 | |||||||||||||||
Investments purchased | 12,873 | 12,723 | 1,487 | 17,517 | |||||||||||||||
Fund shares repurchased | 2,139 | 1,428 | 515 | 3,406 | |||||||||||||||
Dividends and distributions | – | – | – | – | |||||||||||||||
Advisory fees | 1,158 | 1,995 | 521 | 3,624 | |||||||||||||||
Transfer agent fees and expenses | 469 | 685 | 189 | 1,261 | |||||||||||||||
Administrative services fees | N/A | N/A | N/A | N/A | |||||||||||||||
Non-interested Trustees' fees and expenses | 3 | – | 1 | 3 | |||||||||||||||
Foreign tax liability | – | 1,116 | 143 | 1,011 | |||||||||||||||
Accrued expenses | 278 | 445 | 124 | 630 | |||||||||||||||
Variation margin | – | – | – | – | |||||||||||||||
Forward currency contracts | 1,925 | 13,718 | 160 | 2,284 | |||||||||||||||
Total Liabilities | 499,512 | 276,882 | 51,829 | 429,555 | |||||||||||||||
Net Assets | $ | 2,550,429 | $ | 3,865,185 | $ | 1,068,315 | $ | 7,159,336 | |||||||||||
Net Assets Consist of: | |||||||||||||||||||
Capital (par value and paid-in-surplus)* | $ | 2,323,740 | $ | 2,583,809 | $ | 916,525 | $ | 5,875,053 | |||||||||||
Undistributed net investment income/(loss)* | 5,563 | 28,587 | 2,228 | 21,527 | |||||||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | (213,514 | ) | 131,586 | (28,965 | ) | (368,288 | ) | ||||||||||||
Unrealized appreciation/(depreciation) of investments and foreign currency translations | 434,640 | 1,121,203 | (5) | 178,527 | (5) | 1,631,044 | (5) | ||||||||||||
Total Net Assets | $ | 2,550,429 | $ | 3,865,185 | $ | 1,068,315 | $ | 7,159,336 | |||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 109,532 | 229,117 | 42,017 | 186,108 | |||||||||||||||
Net Asset Value Per Share | $ | 23.28 | $ | 16.87 | $ | 25.43 | $ | 38.47 | |||||||||||
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) Formerly named Janus Risk-Managed Stock Fund.
(2) Investments at cost and value include $470,886,436, $236,297,908, $47,478,505, $388,905,906, $22,076,337, $561,808,810 and $471,106,330 of securities loaned for Janus Balanced Fund, Janus Contrarian Fund, Janus Core 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).
(3) Includes cost of $555,166, $1,147,002 and $15,055 for Janus Contrarian Fund, Janus Growth and Income Fund and Janus Research Fund, respectively.
(4) Includes premiums of $2,782,113 on written options for Janus Contrarian Fund.
(5) Net of foreign taxes on investments of $1,116,496, $143,189, $1,011,254 and $133,357 for Janus Contrarian Fund, Janus Core Equity Fund, Janus Growth and Income Fund and Janus Research Fund, respectively.
See Notes to Financial Statements.
64 Janus Core, Risk-Managed and Value Funds April 30, 2006
As of April 30, 2006 (unaudited) (all numbers in thousands except net asset value per share) | Janus Research Fund | INTECH Risk-Managed Stock Fund(1) | Janus Mid Cap Value Fund | Janus Small Cap Value Fund | |||||||||||||||
Assets: | |||||||||||||||||||
Investments at cost(2) | $ | 79,721 | $ | 424,203 | $ | 5,923,371 | $ | 2,491,556 | |||||||||||
Investments at value(2) | $ | 87,616 | $ | 467,825 | $ | 6,592,491 | $ | 2,887,735 | |||||||||||
Cash | 260 | 187 | 1,180 | 505 | |||||||||||||||
Cash denominated in foreign currency(3) | 15 | – | – | – | |||||||||||||||
Receivables: | |||||||||||||||||||
Investments sold | 913 | 10,780 | 70,346 | 22,429 | |||||||||||||||
Fund shares sold | 453 | 667 | 11,468 | 1,328 | |||||||||||||||
Dividends | 93 | 389 | 2,808 | 1,870 | |||||||||||||||
Interest | – | 10 | 1,729 | 676 | |||||||||||||||
Other assets | – | 2 | 34 | 19 | |||||||||||||||
Forward currency contracts | 4 | – | – | – | |||||||||||||||
Total Assets | 89,354 | 479,867 | 6,680,056 | 2,914,562 | |||||||||||||||
Liabilities: | |||||||||||||||||||
Payables: | |||||||||||||||||||
Options written, at value(4) | – | – | – | – | |||||||||||||||
Collateral for securities loaned (Note 1) | – | 22,577 | 575,727 | 483,417 | |||||||||||||||
Investments purchased | 1,454 | 16,569 | 97,876 | 14,058 | |||||||||||||||
Fund shares repurchased | 68 | 308 | 4,582 | 4,911 | |||||||||||||||
Dividends and distributions | – | – | – | 1 | |||||||||||||||
Advisory fees | 45 | 178 | 3,082 | 1,441 | |||||||||||||||
Transfer agent fees and expenses | 16 | 80 | 912 | 271 | |||||||||||||||
Administrative services fees | N/A | 18 | 244 | 101 | |||||||||||||||
Non-interested Trustees' fees and expenses | 1 | 3 | 2 | 7 | |||||||||||||||
Foreign tax liability | 133 | – | – | – | |||||||||||||||
Accrued expenses | 33 | 95 | 796 | 394 | |||||||||||||||
Variation margin | – | 7 | – | – | |||||||||||||||
Forward currency contracts | 201 | – | – | – | |||||||||||||||
Total Liabilities | 1,951 | 39,828 | 683,221 | 504,601 | |||||||||||||||
Net Assets | $ | 87,403 | $ | 440,039 | $ | 5,996,835 | $ | 2,409,961 | |||||||||||
Net Assets Consist of: | |||||||||||||||||||
Capital (par value and paid-in-surplus)* | $ | 74,610 | $ | 374,180 | $ | 5,040,728 | $ | 1,805,164 | |||||||||||
Undistributed net investment income/(loss)* | 39 | 993 | 34,801 | 24,721 | |||||||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | 5,201 | 21,164 | 252,186 | 183,897 | |||||||||||||||
Unrealized appreciation/(depreciation) of investments and foreign currency translations | 7,553 | (5) | 43,702 | 669,120 | 396,179 | ||||||||||||||
Total Net Assets | $ | 87,403 | $ | 440,039 | $ | 5,996,835 | $ | 2,409,961 | |||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 6,813 | 27,771 | |||||||||||||||||
Net Asset Value Per Share | $ | 12.83 | $ | 15.85 | |||||||||||||||
Net Assets - Investor Shares | $ | 5,037,409 | $ | 1,278,235 | |||||||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 212,944 | 43,568 | |||||||||||||||||
Net Asset Value Per Share | $ | 23.66 | $ | 29.34 | |||||||||||||||
Net Assets - Institutional Shares | $ | 959,426 | $ | 1,131,726 | |||||||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 40,393 | 38,290 | |||||||||||||||||
Net Asset Value Per Share | $ | 23.75 | $ | 29.56 |
See Notes to Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2006 65
Statements of Operations
For the six-month period ended April 30, 2006 (unaudited) (all numbers in thousands) | Janus Balanced Fund | Janus Contrarian Fund | Janus Core Equity Fund | Janus Growth and Income Fund | |||||||||||||||
Investment Income: | |||||||||||||||||||
Interest | $ | 21,321 | $ | 867 | $ | 882 | $ | 1,519 | |||||||||||
Securities lending income | 410 | 77 | 48 | 426 | |||||||||||||||
Dividends | 11,036 | 44,454 | 6,165 | 74,279 | |||||||||||||||
Dividends from affiliate | – | 638 | – | 464 | |||||||||||||||
Foreign tax withheld | (279 | ) | (1,054 | ) | (137 | ) | (1,206 | ) | |||||||||||
Total Investment Income | 32,488 | 44,982 | 6,958 | 75,482 | |||||||||||||||
Expenses: | |||||||||||||||||||
Advisory fees | 7,003 | 10,638 | 2,727 | 20,235 | |||||||||||||||
Transfer agent fees and expenses | 2,767 | 3,754 | 1,035 | 7,040 | |||||||||||||||
Registration fees | 25 | 68 | 45 | 123 | |||||||||||||||
Postage and mailing expenses | 67 | 209 | 48 | 277 | |||||||||||||||
Custodian fees | 31 | 170 | 15 | 79 | |||||||||||||||
Professional fees | 15 | 17 | 12 | 18 | |||||||||||||||
Non-interested Trustees' fees and expenses | 40 | 49 | 21 | 87 | |||||||||||||||
Printing expenses | 101 | 249 | 68 | 320 | |||||||||||||||
System fees | 11 | 8 | 7 | 7 | |||||||||||||||
Administrative services fees | N/A | N/A | N/A | N/A | |||||||||||||||
Other expenses | 296 | 416 | 126 | 627 | |||||||||||||||
Non-recurring costs (Note 2) | – | – | – | – | |||||||||||||||
Cost assumed by Janus Capital Management LLC (Note 2) | – | – | – | – | |||||||||||||||
Total Expenses | 10,356 | 15,578 | 4,104 | 28,813 | |||||||||||||||
Expense and Fee Offset | (109 | ) | (124 | ) | (39 | ) | (184 | ) | |||||||||||
Net Expenses | 10,247 | 15,454 | 4,065 | 28,629 | |||||||||||||||
Less: Excess Expense Reimbursement | – | – | – | – | |||||||||||||||
Net Expenses after Expense Reimbursement | 10,247 | 15,454 | 4,065 | 28,629 | |||||||||||||||
Net Investment Income/(Loss) | 22,241 | 29,528 | 2,893 | 46,853 | |||||||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | |||||||||||||||||||
Net realized gain/(loss) from securities transactions | 55,055 | 281,095 | 47,162 | 183,523 | |||||||||||||||
Net realized gain/(loss) from foreign currency transactions | 328 | (7,804 | ) | 36 | 1,222 | ||||||||||||||
Net realized gain/(loss) from futures contracts | – | – | – | – | |||||||||||||||
Net realized gain/(loss) from options contracts | – | (636 | ) | – | – | ||||||||||||||
Change in net unrealized appreciation or depreciation of investments and foreign currency translations | 135,111 | 308,955 | (3) | 68,561 | (3) | 580,114 | (3) | ||||||||||||
Payment from affiliate (Note 2) | 2 | 7 | – | 4 | |||||||||||||||
Net Gain/(Loss) on Investments | 190,496 | 581,617 | 115,759 | 764,863 | |||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 212,737 | $ | 611,145 | $ | 118,652 | $ | 811,716 |
(1) Formerly named Janus Risk-Managed Stock Fund.
(2) Net of capital gain taxes on investments of $3,725 for Janus Research Fund.
(3) Net of foreign taxes on investments of $1,116,496, $143,189, $1,011,254 and $133,357 for Janus Contrarian Fund, Janus Core Equity Fund, Janus Growth and Income Fund and Janus Research Fund, respectively.
See Notes to Financial Statements.
66 Janus Core, Risk-Managed and Value Funds April 30, 2006
For the six-month period ended April 30, 2006 (unaudited) (all numbers in thousands) | Janus Research Fund | INTECH Risk-Managed Stock Fund(1) | Janus Mid Cap Value Fund | Janus Small Cap Value Fund | |||||||||||||||
Investment Income: | |||||||||||||||||||
Interest | $ | 49 | $ | 404 | $ | 5,054 | $ | 3,567 | |||||||||||
Securities lending income | – | 1 | 232 | 531 | |||||||||||||||
Dividends | 645 | 3,411 | 74,639 | 28,056 | |||||||||||||||
Dividends from affiliate | – | – | 9,379 | 4,119 | |||||||||||||||
Foreign tax withheld | (12 | ) | – | (125 | ) | (2 | ) | ||||||||||||
Total Investment Income | 682 | 3,816 | 89,179 | 36,271 | |||||||||||||||
Expenses: | |||||||||||||||||||
Advisory fees | 219 | 1,030 | 17,402 | 9,057 | |||||||||||||||
Transfer agent fees and expenses | 86 | 484 | 5,575 | 2,498 | |||||||||||||||
Registration fees | 22 | 34 | 126 | 45 | |||||||||||||||
Postage and mailing expenses | 5 | 43 | 148 | 13 | |||||||||||||||
Custodian fees | 11 | 14 | 28 | 15 | |||||||||||||||
Professional fees | 18 | 20 | 21 | 20 | |||||||||||||||
Non-interested Trustees' fees and expenses | 3 | 14 | 77 | 35 | |||||||||||||||
Printing expenses | 17 | 56 | 205 | 45 | |||||||||||||||
System fees | 9 | 7 | 8 | 8 | |||||||||||||||
Administrative services fees | N/A | 103 | 1,375 | 635 | |||||||||||||||
Other expenses | 6 | 75 | 769 | 397 | |||||||||||||||
Non-recurring costs (Note 2) | – | – | – | – | |||||||||||||||
Cost assumed by Janus Capital Management LLC (Note 2) | – | – | – | – | |||||||||||||||
Total Expenses | 396 | 1,880 | 25,734 | 12,768 | |||||||||||||||
Expense and Fee Offset | (4 | ) | (17 | ) | (164 | ) | (108 | ) | |||||||||||
Net Expenses | 392 | 1,863 | 25,570 | 12,660 | |||||||||||||||
Less: Excess Expense Reimbursement | – | – | (525 | ) | (1,110 | ) | |||||||||||||
Net Expenses after Expense Reimbursement | 392 | 1,863 | 25,045 | 11,550 | |||||||||||||||
Net Investment Income/(Loss) | 290 | 1,953 | 64,134 | 24,721 | |||||||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | |||||||||||||||||||
Net realized gain/(loss) from securities transactions | 5,312 | 20,315 | 257,324 | 184,406 | |||||||||||||||
Net realized gain/(loss) from foreign currency transactions | 38 | (2) | – | (16 | ) | – | |||||||||||||
Net realized gain/(loss) from futures contracts | – | 627 | – | – | |||||||||||||||
Net realized gain/(loss) from options contracts | – | – | – | – | |||||||||||||||
Change in net unrealized appreciation or depreciation of investments and foreign currency translations | 5,104 | (3) | 14,931 | 249,465 | 40,776 | ||||||||||||||
Payment from affiliate (Note 2) | – | – | 1 | 3 | |||||||||||||||
Net Gain/(Loss) on Investments | 10,454 | 35,873 | 506,774 | 225,185 | |||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 10,744 | $ | 37,826 | $ | 570,908 | $ | 249,906 |
See Notes to Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2006 67
Statements of Changes in Net Assets
For the six-month period ended April 30, 2006 (unaudited) and the fiscal year or period ended October 31, 2005 | Janus Balanced Fund | Janus Contrarian Fund | Janus Core Equity Fund | ||||||||||||||||||||||||
(all numbers in thousands) | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||||
Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | $ | 22,241 | $ | 52,402 | $ | 29,528 | $ | 12,232 | $ | 2,893 | $ | 3,265 | |||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 55,383 | 133,277 | 273,291 | 327,599 | 47,198 | 85,248 | |||||||||||||||||||||
Net realized gain/(loss) from futures contracts | – | – | – | – | – | – | |||||||||||||||||||||
Net realized gain/(loss) from option contracts | – | – | (636 | ) | – | – | – | ||||||||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments foreign currency translations | 135,111 | 40,241 | 308,955 | 155,720 | 68,561 | 19,261 | |||||||||||||||||||||
Payment from affiliate (Note 2) | 2 | 47 | 7 | 1 | – | 150 | |||||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 212,737 | 225,967 | 611,145 | 495,552 | 118,652 | 107,924 | |||||||||||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||||||||||
Net investment income* | (23,731 | ) | (52,907 | ) | (7,685 | ) | (5,326 | ) | (2,545 | ) | (2,694 | ) | |||||||||||||||
Net realized gain/(loss) from investment transactions* | – | – | (37,165 | ) | – | – | – | ||||||||||||||||||||
Net Increase/(Decrease) from Dividends and Distributions | (23,731 | ) | (52,907 | ) | (44,850 | ) | (5,326 | ) | (2,545 | ) | (2,694 | ) | |||||||||||||||
Capital Share Transactions: | |||||||||||||||||||||||||||
Shares sold | 135,376 | 283,331 | 573,125 | 559,308 | 338,628 | 142,128 | |||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||
Reinvested dividends and distributions | 23,358 | 52,071 | 43,903 | 5,190 | 2,454 | 2,609 | |||||||||||||||||||||
Shares repurchased | (304,618 | ) | (850,578 | ) | (224,462 | ) | (532,359 | ) | (109,763 | ) | (142,347 | ) | |||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | (145,884 | ) | (515,176 | ) | 392,566 | 32,139 | 231,319 | 2,390 | |||||||||||||||||||
Net Increase/(Decrease) in Net Assets | 43,122 | (342,116 | ) | 958,861 | 522,365 | 347,426 | 107,620 | ||||||||||||||||||||
Net Assets: | |||||||||||||||||||||||||||
Beginning of period | 2,507,307 | 2,849,423 | 2,906,324 | 2,383,959 | 720,889 | 613,269 | |||||||||||||||||||||
End of period | $ | 2,550,429 | $ | 2,507,307 | $ | 3,865,185 | $ | 2,906,324 | $ | 1,068,315 | $ | 720,889 | |||||||||||||||
Undistributed net investment income/(loss)* | $ | 5,563 | $ | 7,053 | $ | 28,587 | $ | 6,744 | $ | 2,228 | $ | 1,879 |
*See Note 4 in Notes to Financial Statements.
(1) Formerly named Janus Risk-Managed Stock Fund.
(2) Period from February 25, 2005 (inception date) through October 31, 2005.
See Notes to Financial Statements.
68 Janus Core, Risk-Managed and Value Funds April 30, 2006
For the six-month period ended April 30, 2006 (unaudited) and the fiscal year or period ended October 31, 2005 | Janus Growth and Income Fund | Janus Research Fund | INTECH Risk-Managed Stock Fund(1) | ||||||||||||||||||||||||
(all numbers in thousands) | 2006 | 2005 | 2006 | 2005(2) | 2006 | 2005 | |||||||||||||||||||||
Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | $ | 46,853 | $ | 37,014 | $ | 290 | $ | (50 | ) | $ | 1,953 | $ | 2,846 | ||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 184,745 | 402,783 | 5,350 | 957 | 20,315 | 18,888 | |||||||||||||||||||||
Net realized gain/(loss) from futures contracts | – | – | – | – | 627 | 948 | |||||||||||||||||||||
Net realized gain/(loss) from option contracts | – | – | – | – | – | – | |||||||||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments foreign currency translations | 580,114 | 395,783 | 5,104 | 2,449 | 14,931 | 13,575 | |||||||||||||||||||||
Payment from affiliate (Note 2) | 4 | 1 | – | – | – | – | |||||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 811,716 | 835,581 | 10,744 | 3,356 | 37,826 | 36,257 | |||||||||||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||||||||||
Net investment income* | (31,804 | ) | (38,046 | ) | (194 | ) | – | (3,348 | ) | (1,229 | ) | ||||||||||||||||
Net realized gain/(loss) from investment transactions* | – | – | (1,113 | ) | – | (19,387 | ) | (9,375 | ) | ||||||||||||||||||
Net Increase/(Decrease) from Dividends and Distributions | (31,804 | ) | (38,046 | ) | (1,307 | ) | – | (22,735 | ) | (10,604 | ) | ||||||||||||||||
Capital Share Transactions: | |||||||||||||||||||||||||||
Shares sold | 1,033,374 | 904,078 | 43,986 | 50,006 | 78,516 | 218,693 | |||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | N/A | 21 | 61 | |||||||||||||||||||||
Reinvested dividends and distributions | 30,959 | 36,957 | 1,281 | – | 22,377 | 10,475 | |||||||||||||||||||||
Shares repurchased | (419,850 | ) | (1,180,839 | ) | (14,705 | ) | (5,958 | ) | (55,180 | ) | (57,571 | ) | |||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | 644,483 | (239,804 | ) | 30,562 | 44,048 | 45,734 | 171,658 | ||||||||||||||||||||
Net Increase/(Decrease) in Net Assets | 1,424,395 | 557,731 | 39,999 | 47,404 | 60,825 | 197,311 | |||||||||||||||||||||
Net Assets: | |||||||||||||||||||||||||||
Beginning of period | 5,734,941 | 5,177,210 | 47,404 | – | 379,214 | 181,903 | |||||||||||||||||||||
End of period | $ | 7,159,336 | $ | 5,734,941 | $ | 87,403 | $ | 47,404 | $ | 440,039 | $ | 379,214 | |||||||||||||||
Undistributed net investment income/(loss)* | $ | 21,527 | $ | 6,478 | $ | 39 | $ | (57 | ) | $ | 993 | $ | 2,387 |
See Notes to Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2006 69
Statements of Changes in Net Assets (continued)
For the six-month period ended April 30, 2006 (unaudited) and for the fiscal year ended October 31, 2005 | Janus Mid Cap Value Fund | Janus Small Cap Value Fund | |||||||||||||||||
(all numbers in thousands) | 2006 | 2005 | 2006 | 2005 | |||||||||||||||
Operations: | |||||||||||||||||||
Net investment income/(loss) | $ | 64,134 | $ | 30,406 | $ | 24,721 | $ | 25,938 | |||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 257,308 | 398,535 | 184,406 | 355,236 | |||||||||||||||
Net realized gain/(loss) from futures contracts | – | – | – | – | |||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments foreign currency translations | 249,465 | 115,055 | 40,776 | (74,087 | ) | ||||||||||||||
Payment from affiliate (Note 2) | 1 | 46 | 3 | 106 | |||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 570,908 | 544,042 | 249,906 | 307,193 | |||||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||
Net investment income* | |||||||||||||||||||
Investor Shares | (44,874 | ) | (11,969 | ) | (12,646 | ) | (13,720 | ) | |||||||||||
Institutional Shares | (9,171 | ) | (2,433 | ) | (13,292 | ) | (16,289 | ) | |||||||||||
Net realized gain from investment transactions* | |||||||||||||||||||
Investor Shares | (338,149 | ) | (273,351 | ) | (186,825 | ) | (218,723 | ) | |||||||||||
Institutional Shares | (60,136 | ) | (41,556 | ) | (165,356 | ) | (207,212 | ) | |||||||||||
Net Increase/Decrease from Dividends and Distributions | (452,330 | ) | (329,309 | ) | (378,119 | ) | (455,944 | ) | |||||||||||
Capital Share Transactions: | |||||||||||||||||||
Shares sold | |||||||||||||||||||
Investor Shares | 953,160 | 1,675,465 | 106,140 | 236,048 | |||||||||||||||
Institutional Shares | 180,285 | 261,928 | 66,239 | 184,760 | |||||||||||||||
Reinvested dividends and distributions | |||||||||||||||||||
Investor Shares | 368,965 | 270,828 | 179,568 | 207,625 | |||||||||||||||
Institutional Shares | 67,559 | 42,831 | 169,560 | 203,816 | |||||||||||||||
Shares repurchased | |||||||||||||||||||
Investor Shares | (572,922 | ) | (921,816 | ) | (277,284 | ) | (511,627 | ) | |||||||||||
Institutional Shares | (41,899 | ) | (64,185 | ) | (229,875 | ) | (529,090 | ) | |||||||||||
Net Increase/(Decrease) from Capital Share Transactions | 955,148 | 1,265,051 | 14,348 | (208,468 | ) | ||||||||||||||
Net Increase/(Decrease) in Net Assets | 1,073,726 | 1,479,784 | (113,865 | ) | (357,219 | ) | |||||||||||||
Net Assets: | |||||||||||||||||||
Beginning of period | 4,923,109 | 3,443,325 | 2,523,826 | 2,881,045 | |||||||||||||||
End of period | $ | 5,996,835 | $ | 4,923,109 | $ | 2,409,961 | $ | 2,523,826 | |||||||||||
Undistributed net investment income/(loss)* | $ | 34,801 | $ | 24,712 | $ | 24,721 | $ | 25,938 |
*See Note 4 in Notes to Financial Statements.
See Notes to Financial Statements.
70 Janus Core, Risk-Managed and Value Funds April 30, 2006
Financial Highlights
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) | Janus Balanced Fund | ||||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 21.62 | $ | 20.33 | $ | 19.34 | $ | 18.08 | $ | 19.27 | $ | 22.83 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .20 | .42 | .38 | .38 | .47 | .56 | |||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | 1.67 | 1.28 | .99 | 1.28 | (1.20 | ) | (2.48 | ) | |||||||||||||||||||
Total from Investment Operations | 1.87 | 1.70 | 1.37 | 1.66 | (.73 | ) | (1.92 | ) | |||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.21 | ) | (.41 | ) | (.38 | ) | (.40 | ) | (.46 | ) | (.61 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | (1.03 | ) | ||||||||||||||||||||
Payment from affiliate | – | (1) | – | (1) | – | (1) | – | – | – | ||||||||||||||||||
Total Distributions and Other | (.21 | ) | (.41 | ) | (.38 | ) | (.40 | ) | (.46 | ) | (1.64 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 23.28 | $ | 21.62 | $ | 20.33 | $ | 19.34 | $ | 18.08 | $ | 19.27 | |||||||||||||||
Total Return** | 8.67 | %(2) | 8.43 | %(2) | 7.11 | %(2) | 9.34 | % | (3.85 | )% | (8.83 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 2,550,429 | $ | 2,507,307 | $ | 2,849,423 | $ | 3,928,565 | $ | 3,935,993 | $ | 4,410,240 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 2,567,472 | $ | 2,720,829 | $ | 3,234,587 | $ | 4,004,101 | $ | 4,278,174 | $ | 4,663,032 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.81 | % | 0.80 | % | 0.87 | % | 0.89 | % | 0.86 | % | 0.85 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.80 | % | 0.79 | % | 0.87 | % | 0.88 | % | 0.84 | % | 0.83 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.75 | % | 1.93 | % | 1.82 | % | 2.00 | % | 2.44 | % | 2.79 | % | |||||||||||||||
Portfolio Turnover Rate*** | 43 | % | 47 | % | 45 | % | 73 | % | 88 | % | 117 | % | |||||||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) | Janus Contrarian Fund | ||||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 14.20 | $ | 11.74 | $ | 9.97 | $ | 6.95 | $ | 8.42 | $ | 11.29 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .13 | .05 | .01 | – | (5) | – | (5) | .03 | |||||||||||||||||||
Net gain/(loss) on securities both realized and unrealized) | 2.76 | 2.44 | 1.76 | 3.03 | (1.45 | ) | (2.65 | ) | |||||||||||||||||||
Total from Investment Operations | 2.89 | 2.49 | 1.77 | 3.03 | (1.45 | ) | (2.62 | ) | |||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.04 | ) | (.03 | ) | – | (.01 | )(6) | (.02 | ) | (.02 | ) | ||||||||||||||||
Distributions (from capital gains)* | (.18 | ) | – | – | – | – | (.23 | ) | |||||||||||||||||||
Payment from affiliate | – | (1) | – | (1) | – | (1) | – | – | – | ||||||||||||||||||
Total Distributions and Other | (.22 | ) | (.03 | ) | – | (.01 | ) | (.02 | ) | (.25 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 16.87 | $ | 14.20 | $ | 11.74 | $ | 9.97 | $ | 6.95 | $ | 8.42 | |||||||||||||||
Total Return** | 20.53 | %(2) | 21.19 | %(2) | 17.75 | %(2) | 43.57 | % | (17.23 | )% | (23.61 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 3,865,185 | $ | 2,906,324 | $ | 2,383,959 | $ | 2,498,836 | $ | 1,287,494 | $ | 1,954,667 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 3,352,305 | $ | 2,716,329 | $ | 2,497,342 | $ | 1,862,723 | $ | 1,808,435 | $ | 2,665,589 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.94 | % | 0.93 | % | 0.98 | % | 1.02 | % | 1.01 | % | 0.92 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.93 | % | 0.93 | % | 0.98 | % | 1.01 | % | 0.98 | % | 0.91 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.78 | % | 0.45 | % | 0.07 | % | (0.17 | )% | 0.03 | % | 0.29 | % | |||||||||||||||
Portfolio Turnover Rate*** | 41 | % | 42 | % | 30 | % | 44 | % | 60 | % | 77 | % |
*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, 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%.
(5) Net investment income/(loss) aggregated less than $.01 on a per share basis for the fiscal year ended.
(6) Dividends (from net investment income) includes tax return of capital, less than $0.01 per share.
See Notes to Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2006 71
Financial Highlights (continued)
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) | Janus Core Equity Fund | ||||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 22.15 | $ | 18.78 | $ | 17.04 | $ | 14.99 | $ | 16.78 | $ | 24.25 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .07 | .11 | .05 | .07 | .11 | .17 | |||||||||||||||||||||
Net gain/(loss) on securities both realized and unrealized) | 3.28 | 3.34 | 1.75 | 2.09 | (1.81 | ) | (4.98 | ) | |||||||||||||||||||
Total from Investment Operations | 3.35 | 3.45 | 1.80 | 2.16 | (1.70 | ) | (4.81 | ) | |||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.07 | ) | (.08 | ) | (.06 | ) | (.11 | ) | (.09 | ) | (.13 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | (2.53 | ) | ||||||||||||||||||||
Payment from affiliate | – | – | (1) | – | – | – | – | ||||||||||||||||||||
Total Distributions and Other | (.07 | ) | (.08 | ) | (.06 | ) | (.11 | ) | (.09 | ) | (2.66 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 25.43 | $ | 22.15 | $ | 18.78 | $ | 17.04 | $ | 14.99 | $ | 16.78 | |||||||||||||||
Total Return** | 15.15 | % | 18.44 | %(2) | 10.61 | % | 14.54 | % | (10.26 | )% | (21.70 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 1,068,315 | $ | 720,889 | $ | 613,269 | $ | 707,852 | $ | 706,548 | $ | 732,949 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 916,555 | $ | 652,913 | $ | 653,639 | $ | 708,023 | $ | 801,601 | $ | 875,515 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.90 | % | 0.90 | % | 0.97 | % | 0.97 | % | 0.92 | % | 0.95 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.89 | % | 0.89 | % | 0.97 | % | 0.96 | % | 0.89 | % | 0.93 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.64 | % | 0.50 | % | 0.24 | % | 0.40 | % | 0.66 | % | 0.85 | % | |||||||||||||||
Portfolio Turnover Rate*** | 49 | % | 74 | % | 58 | % | 77 | % | 98 | % | 115 | % | |||||||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) | Janus Growth and Income Fund | ||||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 33.97 | $ | 29.29 | $ | 27.12 | $ | 23.70 | $ | 27.99 | $ | 40.88 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .26 | .24 | .07 | .17 | .20 | .32 | |||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | 4.42 | 4.66 | 2.17 | 3.43 | (4.28 | ) | (11.24 | ) | |||||||||||||||||||
Total from Investment Operations | 4.68 | 4.90 | 2.24 | 3.60 | (4.08 | ) | (10.92 | ) | |||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.18 | ) | (.22 | ) | (.07 | ) | (.18 | ) | (.21 | ) | (.35 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | (1.62 | ) | ||||||||||||||||||||
Payment from affiliate | – | (1) | – | (1) | – | (1) | – | – | – | ||||||||||||||||||
Total Distributions and Other | (.18 | ) | (.22 | ) | (.07 | ) | (.18 | ) | (.21 | ) | (1.97 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 38.47 | $ | 33.97 | $ | 29.29 | $ | 27.12 | $ | 23.70 | $ | 27.99 | |||||||||||||||
Total Return** | 13.79 | %(5) | 16.79 | %(5) | 8.28 | %(5) | 15.20 | % | (14.62 | )% | (27.66 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 7,159,336 | $ | 5,734,941 | $ | 5,177,210 | $ | 6,003,140 | $ | 5,327,674 | $ | 6,575,281 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 6,584,778 | $ | 5,454,668 | $ | 5,568,170 | $ | 5,715,041 | $ | 6,479,535 | $ | 7,758,499 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.88 | % | 0.88 | % | 0.92 | % | 0.91 | % | 0.90 | % | 0.87 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.88 | % | 0.87 | % | 0.92 | % | 0.91 | % | 0.88 | % | 0.86 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.43 | % | 0.68 | % | 0.24 | % | 0.67 | % | 0.73 | % | 0.96 | % | |||||||||||||||
Portfolio Turnover Rate*** | 39 | % | 38 | % | 41 | % | 50 | % | 49 | % | 59 | % |
*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 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%.
(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%.
(5) 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%.
See Notes to Financial Statements.
72 Janus Core, Risk-Managed and Value Funds April 30, 2006
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) | Janus Research Fund | ||||||||||
and through the period ended October 31 | 2006 | 2005(1) | |||||||||
Net Asset Value, Beginning of Period | $ | 11.11 | $ | 10.00 | |||||||
Income from Investment Operations: | |||||||||||
Net investment income/(loss) | .06 | (.01 | ) | ||||||||
Net gain/(loss) on securities (both realized and unrealized) | 1.93 | 1.12 | |||||||||
Total from Investment Operations | 1.99 | 1.11 | |||||||||
Less Distributions and Other: | |||||||||||
Dividends from net investment income* | (.04 | ) | – | ||||||||
Distributions from net realized gains* | (.23 | ) | – | ||||||||
Payment from affiliate | – | – | (2) | ||||||||
Total Distributions and Other | (.27 | ) | – | ||||||||
Net Asset Value, End of Period (in thousands) | $ | 12.83 | $ | 11.11 | |||||||
Total Return** | 18.17 | % | 11.10 | %(3) | |||||||
Net Assets, End of Period (in thousands) | $ | 87,403 | $ | 47,404 | |||||||
Average Net Assets for the Period (in thousands) | $ | 69,006 | $ | 29,920 | |||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 1.16 | % | 1.27 | %(6) | |||||||
Ratio of Net Expenses to Average Net Assets***(4) | 1.15 | % | 1.25 | % | |||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.85 | % | (0.24 | )% | |||||||
Portfolio Turnover Rate*** | 169 | % | 86 | % |
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) | INTECH Risk-Managed Stock Fund(7) | ||||||||||||||||||
and through each fiscal year or period ended October 31 | 2006 | 2005 | 2004 | 2003(8) | |||||||||||||||
Net Asset Value, Beginning of Period | $ | 15.28 | $ | 13.98 | $ | 12.44 | $ | 10.00 | |||||||||||
Income from Investment Operations: | |||||||||||||||||||
Net investment income/(loss) | .07 | .12 | .08 | .01 | |||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | 1.40 | 1.89 | 1.75 | 2.43 | |||||||||||||||
Total from Investment Operations | 1.47 | 2.01 | 1.83 | 2.44 | |||||||||||||||
Less Distributions and Other: | |||||||||||||||||||
Dividends (from net investment income)* | (.13 | ) | (.08 | ) | (.03 | ) | – | ||||||||||||
Distributions (from capital gains)* | (.77 | ) | (.63 | ) | (.26 | ) | – | ||||||||||||
Redemption fees | – | (9) | – | (9) | – | (9) | – | (9) | |||||||||||
Total Distributions and Other | (.90 | ) | (.71 | ) | (.29 | ) | – | ||||||||||||
Net Asset Value, End of Period | $ | 15.85 | $ | 15.28 | $ | 13.98 | $ | 12.44 | |||||||||||
Total Return** | 9.87 | % | 14.79 | % | 15.06 | % | 24.40 | % | |||||||||||
Net Assets, End of Period (in thousands) | $ | 440,039 | $ | 379,214 | $ | 181,903 | $ | 88,936 | |||||||||||
Average Net Assets for the Period (in thousands) | $ | 415,435 | $ | 308,431 | $ | 129,518 | $ | 50,912 | |||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 0.91 | % | 0.89 | % | 0.69 | %(10) | 1.13 | %(10) | |||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 0.90 | % | 0.88 | % | 0.69 | % | 1.13 | % | |||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.95 | % | 0.92 | % | 0.72 | % | 0.24 | % | |||||||||||
Portfolio Turnover Rate*** | 102 | % | 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 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 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 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 ratio was 1.61% in 2005 before waiver of certain fees incurred by the Fund.
(7) Formerly named Janus Risk-Managed Stock Fund.
(8) Period February 28, 2003 (inception date) through October 31, 2003.
(9) Redemption fees aggregated less than $.01 on a per share basis for the period or year ended.
(10) 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, 2006 73
Financial Highlights - Investor Shares
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31, 2005 and 2004, the six-month fiscal period ended October 31, 2003, the seven-month fiscal period ended April 30, 2003 | Janus Mid Cap Value Fund(1) | ||||||||||||||||||||||||||||||
and through each fiscal year ended September 30, 2002 and 2001 | 2006 | 2005 | 2004 | 2003 | 2003 | 2002 | 2001 | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 23.24 | $ | 22.22 | $ | 18.94 | $ | 15.15 | $ | 13.71 | $ | 14.30 | $ | 14.43 | |||||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||||||
Net investment income/(loss) | .27 | .14 | .10 | .03 | .03 | .02 | .06 | ||||||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | 2.22 | 2.89 | 3.28 | 3.76 | 1.44 | (.23 | ) | 1.27 | |||||||||||||||||||||||
Total from Investment Operations | 2.49 | 3.03 | 3.38 | 3.79 | 1.47 | (.21 | ) | 1.33 | |||||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (.24 | ) | (.08 | ) | (.10 | ) | – | (.03 | ) | (.03 | ) | (.10 | ) | ||||||||||||||||||
Distributions (from capital gains)* | (1.83 | ) | (1.93 | ) | – | – | – | (.35 | ) | (1.36 | ) | ||||||||||||||||||||
Payment from affiliate | – | (2) | – | (2) | – | (2) | – | – | – | – | |||||||||||||||||||||
Total Distributions and Other | (2.07 | ) | (2.01 | ) | (.10 | ) | – | (.03 | ) | (.38 | ) | (1.46 | ) | ||||||||||||||||||
Net Asset Value, End of Period | $ | 23.66 | $ | 23.24 | $ | 22.22 | $ | 18.94 | $ | 15.15 | $ | 13.71 | $ | 14.30 | |||||||||||||||||
Total Return** | 11.19 | %(3) | 14.26 | %(4) | 17.92 | %(3) | 25.02 | % | 10.73 | % | (1.96 | )% | 9.70 | % | |||||||||||||||||
Net Assets, End of Period (in thousands) | $ | 5,037,409 | $ | 4,188,183 | $ | 2,978,875 | $ | 1,494,209 | $ | 1,033,772 | $ | 782,101 | $ | 148,505 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 4,691,832 | $ | 3,797,215 | $ | 2,244,533 | $ | 1,262,496 | $ | 962,030 | N/A | N/A | |||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6)(7) | 0.94 | % | 0.93 | % | 0.94 | % | 1.08 | % | 1.14 | %(8) | 1.17 | % | 1.22 | % | |||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5)(6) | 0.94 | % | 0.92 | % | 0.94 | % | 1.08 | % | 1.14 | % | N/A | N/A | |||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.31 | % | 0.67 | % | 0.56 | % | 0.45 | % | 0.44 | % | 0.28 | % | 0.78 | % | |||||||||||||||||
Portfolio Turnover Rate*** | 89 | % | 86 | % | 91 | % | 97 | % | 94 | % | 65 | % | 116 | % | |||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31, 2005 and 2004 the six-month fiscal period ended October 31, 2003, the seven-month fiscal period ended April 30, 2003 | Janus Small Cap Value Fund(9) | ||||||||||||||||||||||||||||||
and through each fiscal year ended September 30, 2002 and 2001 | 2006 | 2005 | 2004 | 2003 | 2003 | 2002 | 2001 | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 31.16 | $ | 32.98 | $ | 28.63 | $ | 23.07 | $ | 21.96 | $ | 24.49 | $ | 24.78 | |||||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||||||
Net investment income/(loss) | .29 | .29 | .31 | .09 | .03 | .06 | .22 | ||||||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | 2.64 | 3.16 | 4.16 | 5.47 | 2.07 | (.16 | ) | 1.41 | |||||||||||||||||||||||
Total from Investment Operations | 2.93 | 3.45 | 4.47 | 5.56 | 2.10 | (.10 | ) | 1.63 | |||||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (.30 | ) | (.31 | ) | (.12 | ) | – | (.03 | ) | (.18 | ) | (.32 | ) | ||||||||||||||||||
Distributions (from capital gains)* | (4.45 | ) | (4.96 | ) | – | – | (.96 | ) | (2.25 | ) | (1.60 | ) | |||||||||||||||||||
Payment from affiliate | – | (2) | – | (2) | – | (2) | – | – | – | – | |||||||||||||||||||||
Total Distributions and Other: | (4.75 | ) | (5.27 | ) | (.12 | ) | – | (.99 | ) | (2.43 | ) | (1.92 | ) | ||||||||||||||||||
Net Asset Value, End of Period | $ | 29.34 | $ | 31.16 | $ | 32.98 | $ | 28.63 | $ | 23.07 | $ | 21.96 | $ | 24.49 | |||||||||||||||||
Total Return** | 10.15 | %(3) | 11.34 | %(3) | 15.65 | %(3) | 24.15 | % | 9.56 | % | (2.52 | )% | 6.65 | % | |||||||||||||||||
Net Assets, End of Period (in thousands) | $ | 1,278,235 | $ | 1,338,093 | $ | 1,480,885 | $ | 1,658,312 | $ | 1,476,575 | $ | 1,461,278 | $ | 1,378,894 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 1,358,753 | $ | 1,440,206 | $ | 1,630,099 | $ | 1,575,178 | $ | 1,457,263 | N/A | N/A | |||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6)(7) | 1.02 | % | 1.00 | % | 1.02 | % | 1.10 | % | 1.14 | %(10) | 1.17 | %(10) | 1.14 | %(10) | |||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5)(6) | 1.01 | % | 0.99 | % | 1.02 | % | 1.10 | % | 1.13 | %(10) | N/A | N/A | |||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.84 | % | 0.84 | % | 0.91 | % | 0.63 | % | 0.22 | % | 0.20 | % | 0.99 | % | |||||||||||||||||
Portfolio Turnover Rate*** | 68 | % | 44 | % | 50 | % | 60 | % | 45 | % | 39 | % | 47 | % |
* 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) Certain prior year amounts have been reclassified to conform to current year presentation.
(6) See "Explanations of Charts, Tables and Financial Statements."
(7) 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%.
(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, 1.17% in 2002 and 1.14% in 2001.
See Notes to Financial Statements.
74 Janus Core, Risk-Managed and Value Funds April 30, 2006
Financial Highlights - Institutional Shares
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31, 2005 and 2004 the six-month fiscal period ended October 31, 2003, the seven-month fiscal period ended April 30, 2003 | Janus Mid Cap Value Fund(1) | ||||||||||||||||||||||||||
and through the fiscal period ended September 30, 2002 | 2006 | 2005 | 2004 | 2003 | 2003 | 2002(2) | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 23.34 | $ | 22.31 | $ | 19.02 | $ | 15.19 | $ | 13.72 | $ | 17.88 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .28 | .15 | .14 | .05 | .06 | .02 | |||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | 2.24 | 2.92 | 3.29 | 3.78 | 1.44 | (4.18 | ) | ||||||||||||||||||||
Total from Investment Operations | 2.52 | 3.07 | 3.43 | 3.83 | 1.50 | (4.16 | ) | ||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.28 | ) | (.11 | ) | (.14 | ) | – | (.03 | ) | – | |||||||||||||||||
Distributions (from capital gains)* | (1.83 | ) | (1.93 | ) | – | – | – | – | |||||||||||||||||||
Payment from affiliate | – | – | (3) | – | (3) | – | – | – | |||||||||||||||||||
Total Distributions and Other | (2.11 | ) | (2.04 | ) | (.14 | ) | – | (.03 | ) | – | |||||||||||||||||
Net Asset Value, End of Period | $ | 23.75 | $ | 23.34 | $ | 22.31 | $ | 19.02 | $ | 15.19 | $ | 13.72 | |||||||||||||||
Total Return** | 11.27 | % | 14.40 | %(4) | 18.14 | %(4) | 25.21 | % | 10.96 | % | (23.27 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 959,426 | $ | 734,926 | $ | 464,450 | $ | 292,445 | $ | 176,768 | $ | 111,101 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 855,191 | $ | 597,747 | $ | 395,466 | $ | 233,830 | $ | 148,748 | N/A | ||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6)(7) | 0.78 | %(8) | 0.77 | %(8) | 0.77 | %(8) | 0.78 | %(8) | 0.79 | % | 0.78 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5)(6) | 0.77 | % | 0.77 | % | 0.77 | % | 0.78 | % | 0.79 | % | 0.78 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.45 | % | 0.82 | % | 0.74 | % | 0.75 | % | 0.80 | % | 0.83 | % | |||||||||||||||
Portfolio Turnover Rate*** | 89 | % | 86 | % | 91 | % | 97 | % | 94 | % | 65 | % |
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31, 2005 and 2004 the six-month fiscal period ended October 31, 2003, the seven-month fiscal period ended April 30, 2003 | Janus Small Cap Value Fund(9) | ||||||||||||||||||||||||||||||
and through each fiscal year ended September 30, 2002 and 2001 | 2006 | 2005 | 2004 | 2003 | 2003 | 2002 | 2001 | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 31.38 | $ | 33.19 | $ | 28.82 | $ | 23.18 | $ | 22.08 | $ | 24.58 | $ | 24.87 | |||||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||||||
Net investment income/(loss) | .33 | .37 | .39 | .13 | .07 | .12 | .28 | ||||||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | 2.66 | 3.17 | 4.18 | 5.51 | 2.06 | (.13 | ) | 1.42 | |||||||||||||||||||||||
Total from Investment Operations | 2.99 | 3.54 | 4.57 | 5.64 | 2.13 | (.01 | ) | 1.70 | |||||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (.36 | ) | (.39 | ) | (.20 | ) | – | (.07 | ) | (.24 | ) | (.39 | ) | ||||||||||||||||||
Distributions (from capital gains)* | (4.45 | ) | (4.96 | ) | – | – | (.96 | ) | (2.25 | ) | (1.60 | ) | |||||||||||||||||||
Payment from affiliate | – | – | (3) | – | – | – | – | – | |||||||||||||||||||||||
Total Distributions and Other | (4.81 | ) | (5.35 | ) | (.20 | ) | – | (1.03 | ) | (2.49 | ) | (1.99 | ) | ||||||||||||||||||
Net Asset Value, End of Period | $ | 29.56 | $ | 31.38 | $ | 33.19 | $ | 28.82 | $ | 23.18 | $ | 22.08 | $ | 24.58 | |||||||||||||||||
Total Return** | 10.28 | % | 11.57 | %(4) | 15.91 | % | 24.23 | % | 9.74 | % | (2.13 | )% | 6.93 | % | |||||||||||||||||
Net Assets, End of Period (in thousands) | $ | 1,131,726 | $ | 1,185,733 | $ | 1,400,160 | $ | 1,497,333 | $ | 1,286,580 | $ | 1,223,227 | $ | 1,185,004 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 1,204,350 | $ | 1,323,226 | $ | 1,486,714 | $ | 1,454,779 | $ | 1,245,661 | N/A | N/A | |||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6)(7) | 0.80 | %(10) | 0.79 | %(10) | 0.81 | %(10) | 0.82 | %(10) | 0.87 | % | 0.82 | % | 0.84 | % | |||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5)(6) | 0.79 | % | 0.79 | % | 0.81 | % | 0.82 | % | 0.87 | % | 0.82 | % | 0.84 | % | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.07 | % | 1.05 | % | 1.12 | % | 0.91 | % | 0.48 | % | 0.53 | % | 1.26 | % | |||||||||||||||||
Portfolio Turnover Rate*** | 68 | % | 44 | % | 50 | % | 60 | % | 45 | % | 39 | % | 47 | % |
* 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) Fiscal period May 17, 2002 (inception date) through September 30, 2002.
(3) Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year ended.
(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 less than 0.01%.
(5) Certain prior year amounts have been reclassified to conform to current year presentation.
(6) See "Explanations of Charts, Tables and Financial Statements."
(7) 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%.
(8) The ratio was 0.90% in 2006, 0.88% in 2005, 0.90% in 2004 and 1.08% 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 0.98% 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, 2006 75
Notes to Schedules of Investments (unaudited)
Balanced Index | The Balanced Index is an internally calculated, hypothetical combination of indices that combines the total returns from the S&P 500® Index (55%) and the 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 75% of their equity assets in any one market capitalization range over an extended period of time. Multi-cap funds typically have between 25% to 75% of their assets invested in companies with market capitalizations (on a three year weighted basis) above 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Multi-cap core funds have more latitude in the companies in which they invest. These funds typically have an average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P SuperComposite 1500 Index. | ||||||
Lipper Multi-Cap Growth Funds | Funds that, by portfolio practice, invest in a variety of market capitalization ranges without concentrating 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 Small-Cap Core Funds | Funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) less than 250% of the dollar-weighted median of the smallest 500 of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Small-cap core funds have more latitude in the companies in which they invest. These funds typically have an average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P SmallCap 600 Index. | ||||||
Russell 1000® Growth Index | Measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. | ||||||
Russell 1000® Index | Measures the performance of the 1,000 largest companies in the Russell 3000® Index. | ||||||
Russell 2000® Value Index | Measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. | ||||||
Russell 3000® Index | Measures the performance of the 3,000 largest U.S. companies based on total market capitalization. | ||||||
Russell Midcap® Index | Measures the performance of the 800 smallest companies in the Russell 1000® Index. | ||||||
Russell Midcap® Value Index | Measures the performance of those Russell MidCap companies with lower price-to-book ratios and lower forecasted growth values. The stocks are also members of the Russell 1000® Value Index. | ||||||
76 Janus Core, Risk-Managed and Value Funds April 30, 2006
S&P 500® Index | The Standard & Poor's Composite Index of 500 stocks is a widely recognized, unmanaged index of common stock prices. | ||||||
144A | Securities sold under Rule 144A of the Securities Act of 1933 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 | ||||||
ETD | Euro Time Deposit | ||||||
GDR | Global Depositary Receipt | ||||||
PLC | Public Limited Company | ||||||
REIT | Real Estate Investment Trust | ||||||
U.S. Shares | Securities of foreign companies trading on an American Exchange | ||||||
* Non-income-producing security.
** A portion of this holding has been segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, securities with extended settlement dates and/or option contracts.
‡ Rate is subject to change. Rate shown reflects current rate.
º Security is a defaulted security in Janus Contrarian Fund with accrued interest in the amount of $601,787 that was written-off August 21, 2001.
ß Security is illiquid.
ÇÇ Security is a U.S. Treasury Inflation-Protected Security (TIPS).
# Loaned security; a portion or all of the security is on loan as of April 30, 2006.
† The security is purchased with the cash collateral received from Securities on Loan (Note 1).
ºº Schedule of Fair Valued Securities (as of April 30, 2006)
Value | Value as a % of Net Assets | ||||||||||
Janus Contrarian Fund | |||||||||||
Ames Department Stores, Inc., 10.00% senior notes, due 4/15/06 | $ | – | 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 activities fair valued pursuant to a systematic fair valuation model.
§Schedule of Restricted and Illiquid Securities
Acquisition Date | Acquisition Cost | Value | Value as a % of Net Assets | ||||||||||||||||
Janus Balanced Fund | |||||||||||||||||||
El Paso Corp., 7.625% notes, due 9/1/08 (144A) | 10/7/04 | $ | 1,333,081 | $ | 1,307,488 | 0.1 | % | ||||||||||||
El Paso Corp., 7.42% | |||||||||||||||||||
notes, due 2/15/37 (144A) | 10/7/04 | 743,561 | 803,131 | 0.0 | % | ||||||||||||||
$ | 2,076,642 | $ | 2,110,619 | 0.1 | % | ||||||||||||||
Janus Growth and Income Fund | |||||||||||||||||||
IXIS Financial Products, Inc. convertible, (Alcon, Inc.), 20.90% (144A) | 2/9/06 | $ | 47,428,594 | $ | 45,604,418 | 0.6 | % | ||||||||||||
Merrill Lynch & Company, Inc. convertible, (Google, Inc.), 5.30% (144A) | 2/28/06 | 30,000,249 | 32,173,395 | 0.4 | % | ||||||||||||||
Merrill Lynch & Company, Inc. convertible, (Valero Energy Corp.), 16.55% (144A) | 1/23/06 | 57,599,820 | 57,231,860 | 0.8 | % | ||||||||||||||
Morgan Stanley Co. convertible, (Amylin Pharmaceuticals, Inc.), 12.00% (144A) | 4/21/06 | 56,377,266 | 53,007,210 | 0.7 | % | ||||||||||||||
Morgan Stanley Co. convertible, (Juniper Networks, Inc.), 13.00% (144A) | 1/9/06 | 47,294,685 | 42,052,220 | 0.6 | % | ||||||||||||||
Morgan Stanley Co. convertible, (Sirius Satellite Radio, Inc.), 14.00% (144A) | 1/11/06 | 28,378,281 | 22,793,436 | 0.3 | % | ||||||||||||||
$ | 267,078,895 | $ | 252,862,539 | 3.4 | % |
Janus Core, Risk-Managed and Value Funds April 30, 2006 77
Notes to Schedules of Investments (unaudited) (continued)
The Funds have registration rights for certain restricted securities held as of April 30, 2006. The issuer incurs all registration costs.
£The Investment Company Act of 1940 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, 2006.
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/06 | |||||||||||||||||||||||||
Janus Contrarian Fund | |||||||||||||||||||||||||||||||
Ballarpur Industries, Ltd. | – | $ | – | – | $ | – | $ | – | $ | 574,148 | $ | 29,556,128 | |||||||||||||||||||
Ceridian Corp. | 1,120,140 | 28,142,729 | – | – | – | – | 179,206,170 | ||||||||||||||||||||||||
Playboy Enterprises, Inc. - Class B | – | – | – | – | – | – | 22,089,293 | ||||||||||||||||||||||||
$ | 28,142,729 | $ | – | $ | – | $ | 574,148 | $ | 230,851,591 | ||||||||||||||||||||||
Janus Growth and Income Fund | |||||||||||||||||||||||||||||||
Align Technology, Inc. | – | $ | – | – | $ | – | $ | – | $ | – | $ | 27,562,979 | |||||||||||||||||||
Janus Mid Cap Value Fund | |||||||||||||||||||||||||||||||
Cooper Tire & Rubber Co. | 950,000 | $ | 13,981,863 | 676,600 | $ | 11,668,571 | $ | (1,486,709 | ) | $ | – | $ | 37,127,180 | ||||||||||||||||||
Cox Radio, Inc. - Class A | 400,000 | 5,947,732 | – | – | – | – | 29,693,000 | ||||||||||||||||||||||||
$ | 19,929,595 | $ | 11,668,571 | $ | (1,486,709 | ) | $ | – | $ | 66,820,180 | |||||||||||||||||||||
Janus Small Cap Value Fund | |||||||||||||||||||||||||||||||
Flushing Financial Corp. | 1,000,000 | $ | 16,813,222 | – | $ | – | $ | – | $ | 30,206 | $ | 16,930,000 |
Aggregate collateral segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts and/or securities with extended settlement dates as of April 30, 2006 are noted below.
Fund | Aggregate Value | ||||||
Core | |||||||
Janus Balanced Fund | $ | 147,486,324 | |||||
Janus Contrarian Fund | 1,362,739,626 | ||||||
Janus Core Equity Fund | 18,053,216 | ||||||
Janus Growth and Income Fund | 312,742,125 | ||||||
Janus Research Fund | 27,887,846 | ||||||
Risk-Managed | |||||||
INTECH Risk-Managed Stock Fund(1) | 1,490,109 |
(1) Formerly named Janus Risk-Managed Stock Fund.
Repurchase Agreements held by a Fund are fully collateralized, and such collateral is in the possession of a 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.
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, 2006.
78 Janus Core, Risk-Managed and Value Funds April 30, 2006
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 Core Equity Fund, Janus Growth and Income Fund, Janus Research Fund, INTECH Risk-Managed Stock Fund (Formerly named Janus 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 was 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 thirty-two funds. Each of the Funds 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 con verted 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. 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 and may be subject to withholding taxes in these 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 unrealized and realized, 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.
Janus Core, Risk-Managed and Value Funds April 30, 2006 79
Notes to Financial Statements (unaudited) (continued)
Expenses
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. Each Fund bears expenses incurred specifically on its behalf and, in addition, each Fund bears a portion of general expenses, which may be based upon relative net assets of each 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. In addition, 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, 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. Cash collateral may also be invested in unaffiliated money market funds or other accounts.
State Street Bank and Trust Company (the "Lending Agent") may also invest the cash collateral in the State Street Navigator Securities Lending Prime Portfolio 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, 2006, the following Funds had on loan securities valued as indicated:
Fund | Value at April 30, 2006 | ||||||
Core | |||||||
Janus Balanced Fund | $ | 470,886,436 | |||||
Janus Contrarian Fund | 236,297,908 | ||||||
Janus Core Equity Fund | 47,478,505 | ||||||
Janus Growth and Income Fund | 388,905,906 | ||||||
Risk-Managed | |||||||
INTECH Risk-Managed Stock Fund(1) | 22,076,337 | ||||||
Value | |||||||
Janus Mid Cap Value Fund | 561,808,810 | ||||||
Janus Small Cap Value Fund | 471,106,330 |
(1) Formerly named Janus Risk-Managed Stock Fund.
As of April 30, 2006, the following Funds received cash collateral for securities lending activity as indicated:
Fund | Cash Collateral at April 30, 2006 | ||||||
Core | |||||||
Janus Balanced Fund | $ | 480,667,249 | |||||
Janus Contrarian Fund | 242,921,745 | ||||||
Janus Core Equity Fund | 48,689,478 | ||||||
Janus Growth and Income Fund | 399,818,545 | ||||||
Risk-Managed | |||||||
INTECH Risk-Managed Stock Fund(1) | 22,576,940 | ||||||
Value | |||||||
Janus Mid Cap Value Fund | 575,727,492 | ||||||
Janus Small Cap Value Fund | 483,417,062 |
(1) Formerly named Janus Risk-Managed Stock Fund.
As of April 30, 2006, all cash collateral received by the Funds was invested in the State Street Navigator Securities Lending Prime Portfolio.
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 respective 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 its Lending Agent. The Lending Agent may retain a portion of the interest earned. The cash collateral invested by the Lending Agent is disclosed in the Schedule of Investments. The lending fees and the Funds' portion of the interest income earned on cash collateral are included on the Statement of Operations (if applicable).
During the six-month period ended April 30, 2006, there were no securities lending arrangements for Janus Research Fund.
Interfund Lending
Pursuant to an exemptive order received from the SEC, each of the Funds may be party to an interfund lending agreement between the Fund and other Janus Capital sponsored mutual funds, which permit it 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 a 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, 2006, there were no outstanding borrowing or lending arrangements for the Funds.
Forward Currency Transactions
The Funds may enter into forward currency contracts in order to reduce their exposure to changes in foreign currency
80 Janus Core, Risk-Managed and Value Funds April 30, 2006
exchange rates on their 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 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.
Foreign Currency Translations
The 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 translation 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 security transactions and income.
Foreign-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.
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, a Fund has the right to receive payments of principal, interest and any fees to which it is entitled only from the Lender selling the loan agreement and only upon receipt by the Lender of payments from the borrower. A Fund generally has no right to enforce compliance with the terms of the loan agreement with the borrower. Assignments and participations involve credit risk and liquidity risk. Interest rates on floating rate securities adjust with general interest rate changes and/o r issuer credit quality. The interest rates paid on a floating rate security in which a Fund invests generally are readjusted every 45-60 days, on average, to an increment over a designated benchmark rate, such as the one-month, three-month, six-month, or one-year London Interbank Offered Rate ("LIBOR'').
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 Funds utilize an independent third party to value individual bank loans on a daily basis.
The average daily value of borrowings outstanding under bank loan arrangements was $5,419,223 and the related weighted average rate range was 6.21982% to 7.34% during the six-month period ended April 30, 2006 for Janus Balanced Fund.
Futures Contracts
The Funds may enter into futures contracts. The Funds intend to use such derivative instruments primarily to hedge or protect from adverse movements in securities prices, currency rates or interest rates. In addition, INTECH Risk-Managed Stock Fund may use futures contracts to gain exposure to the stock market pending investment of cash balances or to meet liquidity needs. The use of futures contracts may involve risks such as the possibility of illiquid markets or imperfect correlation between the value 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 an unrealized gain or loss on the Statement of Assets and Liabilities (if applicable). When a contract is closed, a realized gain or loss is recorded 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.
Options Contracts
The Funds may purchase or write put and call options on futures contracts or foreign currencies in a manner similar to that in which futures or forward contracts on foreign currencies will be utilized, and on portfolio securities for hedging purposes or as a substitute for an investment. The Funds generally invest in options to hedge against adverse
Janus Core, Risk-Managed and Value Funds April 30, 2006 81
Notes to Financial Statements (unaudited) (continued)
movements in the value of portfolio holdings. In addition, INTECH Risk-Managed Stock Fund may use options contracts to gain exposure to the stock market for the pending investment of cash balances or to meet liquidity needs.
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 is 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). Options written are reported as a liability on the Statement of Assets and Liabilities (if applicable). Gains and losses are reported on the Statement of Operations (if applicable). Janus Contrarian Fund recognized realized gains for written options of $3,106,595 during the six-month period ended April 30, 2006.
The risk in writing a call option 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 a put option 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 an option 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 that the Funds may recognize due to written call options.
Written option activity for the six-month period ended April 30, 2006 was as follows:
Call Options | Number of Options | Premiums Received | |||||||||
Janus Contrarian Fund | |||||||||||
Options outstanding at October 31, 2005 | – | $ | – | ||||||||
Options written | 20,800 | 3,684,806 | |||||||||
Options closed | – | – | |||||||||
Options expired | (10,800 | ) | (2,040,357 | ) | |||||||
Options exercised | – | – | |||||||||
Options outstanding at April 30, 2006 | 10,000 | $ | 1,644,449 |
Put Options | Number of Options | Premiums Received | |||||||||
Janus Contrarian Fund | |||||||||||
Options outstanding at October 31, 2005 | – | $ | – | ||||||||
Options written | 20,800 | 2,203,902 | |||||||||
Options closed | – | – | |||||||||
Options expired | (10,800 | ) | (1,066,238 | ) | |||||||
Options exercised | – | – | |||||||||
Options outstanding at April 30, 2006 | 10,000 | $ | 1,137,664 |
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. As of April 30, 2006, there were no Funds invested in when-issued securities.
Equity-Linked Structured Notes
The Funds may invest in equity-linked structured notes. Equity-linked structured notes are debt securities which combine the characteristics of common stock and the sale of an option. The return component is based upon the performance of a single equity security, a basket of equity securities, or an equity index and the sale of an option which is recognized as income. Equity-linked structured notes are typically offered in limited transactions to financial institutions by investment banks, examples of which include performance equity-linked redemption quarterly pay securities ("PERQS"), yield-enhanced securities ("YES"), and yield enhanced equity-linked debt securities ("YEELDS"). There is no guaranteed return of principal with these securities. The appreciation potential of these securities may be limited by a maximum payment or call right and can be influenced by many unpredictable factors.
Initial Public Offerings
The Funds may invest in initial public offerings ("IPOs"). IPOs and other investment techniques may have a magnified performance impact on a fund with a small asset base. The Funds 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 because of changes in the economy, political environment, or adverse developments specific to the issuer.
82 Janus Core, Risk-Managed and Value Funds April 30, 2006
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. 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.
Dividend Distributions
Dividends for Janus Balanced Fund and Janus Growth and Income Fund are declared and distributed quarterly, and 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.
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.
2. INVESTMENT ADVISORY AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
Each Fund pays a monthly advisory fee to Janus Capital based upon average daily net assets and calculated at the annual rate shown in the table below for each Fund.
Fund | Average Daily Net Assets of Fund | Management Fee (%) | |||||||||
Core | |||||||||||
Janus Balanced Fund | All Asset Levels | 0.55 | |||||||||
Janus Contrarian Fund | All Asset Levels | 0.64 | |||||||||
Janus Core Equity Fund | All Asset Levels | 0.60 | |||||||||
Janus Growth and Income Fund | All Asset Levels | 0.62 | |||||||||
Janus Research Fund | All Asset Levels | 0.64 | |||||||||
Risk-Managed | |||||||||||
INTECH Risk-Managed Stock Fund(1) | All Asset Levels | 0.50 |
Fund | Average Daily Net Assets of Fund | Management Fee (%) | |||||||||
Value | |||||||||||
Janus Mid Cap Value Fund | All Asset Levels | 0.64 | |||||||||
Janus Small Cap Value Fund | All Asset Levels | 0.72 |
(1) Formerly named Janus Risk-Managed Stock Fund.
Effective January 1, 2006 for Janus Research Fund and INTECH Risk-Managed Stock Fund and effective February 1, 2006 for Janus Contrarian Fund and Janus Mid Cap Value Fund, the investment advisory fee rates changed from a fixed rate to a rate that adjusts upward or downward based upon the Fund's performance relative to a selected benchmark index. This change does not impact the current investment advisory fee until one year after the effective date when the performance adjustment takes effect.
Enhanced Investment Technologies, LLC ("INTECH") serves as subadviser to INTECH Risk-Managed Stock Fund. Janus Capital indirectly owns approximately 77.5% of the outstanding voting shares of INTECH. Janus Capital pays INTECH a subadvisory fee at the annual rate of 0.26% of average daily net assets from its management fee for managing the Fund.
Perkins, Wolf, McDonnell and Company, LLC ("Perkins") serves as subadviser to Janus Mid Cap Value Fund and Janus Small Cap 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 of the Funds 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.
Janus Core, Risk-Managed and Value Funds April 30, 2006 83
Notes to Financial Statements (unaudited) (continued)
By written agreement, Janus Services has agreed until March 1, 2007 to waive the transfer agency fee payable so that the total operating expenses (excluding extraordinary expenses) by 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.
Until at least March 1, 2007, provided that Janus Capital remains investment adviser to the Funds, Janus Capital has agreed to reimburse Janus Research Fund by the amount, if any, that such Fund's normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the brokerage commissions, interest, taxes and extraordinary 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.
A 2.00% redemption fee may be imposed on shares of INTECH Risk-Managed Stock Fund held for three months 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 INTECH Risk-Managed Stock Fund were $21,150 for the six-month period ended April 30, 2006.
During the six-month period ended April 30, 2006, Janus Services reimbursed the following Funds as a result of dilutions caused by incorrectly processed shareholder activity as indicated in the table below.
Funds | |||||||
Core | |||||||
Janus Balanced Fund | $ | 2,044 | |||||
Janus Contrarian Fund | 7,162 | ||||||
Janus Growth and Income Fund | 4,173 | ||||||
Value | |||||||
Janus Mid Cap Value Fund - Investor Shares | 944 | ||||||
Janus Small Cap Value Fund - Investor Shares | 3,188 |
For the six-month period ended April 30, 2006, Janus Capital assumed $14,642 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 Note 6. These non-recurring costs were allocated to all Portfolios based on the Portfolios' respective net assets at July 31, 2004. No fees were allocated to Janus Research Fund, Janus Triton Fund and the Janus Smart Portfolios as the funds commenced operations after July 31, 2004. Additionally, all future non-recurring costs will be allocated based upon the Portfolio's respective net assets at July 31, 2004. These non-recurring costs and offsetting waivers are shown on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the "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 credited to the account. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance to the Plan. No deferred fees were paid to any Trustee under the Plan during the six-month period ended April 30, 2006.
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 Funds. $59,577 of total compensation was paid by the funds of the Trust. The Funds' 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 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, 2006, the following Funds recorded
84 Janus Core, Risk-Managed and Value Funds April 30, 2006
distributions from affiliated investment companies as affiliated dividend income, and had the following affiliated purchases and sales:
Purchases Shares/Cost | Sales Shares/Cost | Dividend Income | Value at 4/30/06 | ||||||||||||||||
Janus Government Money Market Fund | |||||||||||||||||||
Janus Growth and Income Fund | $ | 50,000,000 | $ | 50,000,000 | $ | 120,973 | $ | – | |||||||||||
Janus Mid Cap Value Fund | – | 100,000,000 | 1,498,274 | – | |||||||||||||||
Janus Small Cap Value Fund | – | 25,000,000 | 452,041 | – | |||||||||||||||
$ | 50,000,000 | $ | 175,000,000 | $ | 2,071,288 | $ | – | ||||||||||||
Janus Institutional Cash Reserves Fund | |||||||||||||||||||
Janus Contrarian Fund | $ | 50,000,000 | $ | 50,000,000 | $ | 63,973 | $ | – | |||||||||||
Janus Growth and Income Fund | 210,000,000 | 180,000,000 | 342,909 | 30,000,000 | |||||||||||||||
Janus Mid Cap Value Fund | 45,000,000 | – | 5,303,007 | 290,000,000 | |||||||||||||||
Janus Small Cap Value Fund | 10,000,000 | 55,000,000 | 2,690,667 | 85,000,000 | |||||||||||||||
$ | 315,000,000 | $ | 285,000,000 | $ | 8,400,556 | $ | 405,000,000 | ||||||||||||
Janus Money Market Fund | |||||||||||||||||||
Janus Mid Cap Value Fund | $ | 650,000,000 | $ | 625,000,000 | $ | 1,973,808 | $ | 225,000,000 | |||||||||||
Janus Small Cap Value Fund | 75,000,000 | 100,000,000 | 946,281 | 75,000,000 | |||||||||||||||
$ | 725,000,000 | $ | 725,000,000 | $ | 2,920,089 | $ | 300,000,000 |
3. PURCHASES AND SALES OF INVESTMENT SECURITIES
For the six-month period ended April 30, 2006, the aggregate cost of purchases and proceeds from sales of investment securities (excluding short-term securities and options) were as follows:
Fund | Purchase of Securities | Proceeds from Sales of Securities | Purchase of Long- Term U.S. Government Obligations | Proceeds from Sales of Long-Term U.S. Government Obligations | |||||||||||||||
Core | |||||||||||||||||||
Janus Balanced Fund | $ | 244,456,184 | $ | 381,892,411 | $ | 292,696,892 | $ | 266,012,458 | |||||||||||
Janus Contrarian Fund | 994,436,362 | 684,889,983 | – | – | |||||||||||||||
Janus Core Equity Fund | 437,511,162 | 211,275,367 | – | – | |||||||||||||||
Janus Growth and Income Fund | 1,906,066,721 | 1,253,297,791 | – | – | |||||||||||||||
Janus Research Fund | 85,479,064 | 55,826,944 | – | – | |||||||||||||||
Risk-Managed | |||||||||||||||||||
INTECH Risk-Managed Stock Fund(1) | 225,293,869 | 200,741,007 | – | – | |||||||||||||||
Value | |||||||||||||||||||
Janus Mid Cap Value Fund | 2,841,856,283 | 2,151,682,458 | – | – | |||||||||||||||
Janus Small Cap Value Fund | 733,259,282 | 796,852,785 | – | – |
(1) Formerly named Janus Risk-Managed Stock Fund.
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
Janus Core, Risk-Managed and Value Funds April 30, 2006 85
Notes to Financial Statements (unaudited) (continued)
securities for federal income tax purposes as of April 30, 2006 are also 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.
Fund | Federal Tax Cost | Unrealized Appreciation | Unrealized (Depreciation) | Net Tax Appreciation/ (Depreciation) | |||||||||||||||
Core | |||||||||||||||||||
Janus Balanced Fund | $ | 2,588,563,838 | $ | 462,805,988 | $ | (33,891,087 | ) | $ | 428,914,901 | ||||||||||
Janus Contrarian Fund | 2,979,497,528 | 1,174,582,559 | (74,711,650 | ) | 1,099,870,909 | ||||||||||||||
Janus Core Equity Fund | 934,590,319 | 195,977,836 | (18,474,695 | ) | 177,503,141 | ||||||||||||||
Janus Growth and Income Fund | 5,926,249,139 | 1,770,908,284 | (147,872,993 | ) | 1,623,035,291 | ||||||||||||||
Janus Research Fund | 80,170,371 | 9,175,895 | (1,730,191 | ) | 7,445,704 | ||||||||||||||
Risk-Managed | |||||||||||||||||||
INTECH Risk-Managed Stock Fund(1) | 424,519,859 | 49,759,007 | (6,454,270 | ) | 43,304,737 | ||||||||||||||
Value | |||||||||||||||||||
Janus Mid Cap Value Fund | 5,932,554,496 | 767,469,958 | (107,533,935 | ) | 659,936,023 | ||||||||||||||
Janus Small Cap Value Fund | 2,492,839,444 | 473,171,152 | (78,275,614 | ) | 394,895,538 |
(1) Formerly named Janus Risk-Managed Stock Fund.
Net capital loss carryovers as of October 31, 2005 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 table below shows the expiration dates of the carryovers.
Capital Loss Carryover Expiration Schedule
For the fiscal year ended October 31, 2005
Fund | October 31, 2008 | October 31, 2009 | October 31, 2010 | October 31, 2011 | Accumulated Capital Losses | ||||||||||||||||||
Core | |||||||||||||||||||||||
Janus Balanced Fund(1) | $ | – | $ | (8,693,986 | ) | $ | (174,075,450 | ) | $ | (77,135,986 | ) | $ | (259,905,422 | ) | |||||||||
Janus Contrarian Fund(1) | (77,745,214 | ) | (25,915,071 | ) | – | – | (103,660,285 | ) | |||||||||||||||
Janus Core Equity Fund | – | – | (40,494,247 | ) | (33,485,208 | ) | (73,979,455 | ) | |||||||||||||||
Janus Growth and Income Fund(1) | – | (33,313,289 | ) | (317,554,980 | ) | (174,193,844 | ) | (525,062,113 | ) | ||||||||||||||
Janus Research Fund | – | – | – | – | – | ||||||||||||||||||
Risk-Managed | |||||||||||||||||||||||
INTECH Risk-Managed Stock Fund(2) | – | – | – | – | – | ||||||||||||||||||
Value | |||||||||||||||||||||||
Janus Mid Cap Value Fund | – | – | – | – | – | ||||||||||||||||||
Janus Small Cap Value Fund | – | – | – | – | – |
(1) Capital loss carryovers subject to annual limitations.
(2) Formerly named Janus Risk-Managed Stock Fund.
During the fiscal year ended October 31, 2005 the following capital loss carryovers were utilized by the Funds as indicated in the table below.
Fund | Capital Carryover Loss Utilized | ||||||
Core | |||||||
Janus Balanced Fund | $ | 135,675,175 | |||||
Janus Contrarian Fund | 314,392,752 | ||||||
Janus Core Equity Fund | 85,742,202 | ||||||
Janus Growth and Income Fund | 406,325,697 |
86 Janus Core, Risk-Managed and Value Funds April 30, 2006
5. CAPITAL SHARE TRANSACTIONS
For the six-month period ended April 30, 2006 (unaudited) and the fiscal year ended October 31, 2005 | Janus Balanced Fund | Janus Contrarian Fund | Janus Core Equity Fund | ||||||||||||||||||||||||
(all numbers in thousands) | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||||
Transactions in Fund Shares | |||||||||||||||||||||||||||
Shares sold | 5,911 | 13,370 | 35,732 | 41,749 | 13,820 | 6,715 | |||||||||||||||||||||
Reinvested dividends and distributions | 1,025 | 2,454 | 2,933 | 403 | 103 | 131 | |||||||||||||||||||||
Shares repurchased | (13,358 | ) | (40,060 | ) | (14,285 | ) | (40,488 | ) | (4,447 | ) | (6,954 | ) | |||||||||||||||
Net Increase/(Decrease) in Fund Shares | (6,422 | ) | (24,236 | ) | 24,380 | 1,664 | 9,476 | (108 | ) | ||||||||||||||||||
Shares Outstanding, Beginning of Period | 115,954 | 140,190 | 204,737 | 203,073 | 32,541 | 32,649 | |||||||||||||||||||||
Shares Outstanding, End of Period | 109,532 | 115,954 | 229,117 | 204,737 | 42,017 | 32,541 | |||||||||||||||||||||
For the six-month period ended April 30, 2006 (unaudited) and the fiscal year ended October 31, 2005 | Janus Growth and Income Fund | Janus Research Fund | INTECH Risk-Managed Stock Fund(2) | ||||||||||||||||||||||||
(all numbers in thousands) | 2006 | 2005 | 2006 | 2005(1) | 2006 | 2005 | |||||||||||||||||||||
Transactions in Fund Shares | |||||||||||||||||||||||||||
Shares sold | 27,748 | 27,633 | 3,619 | 4,847 | 5,010 | 14,951 | |||||||||||||||||||||
Reinvested dividends and distributions | 834 | 1,150 | 111 | – | 1,463 | 737 | |||||||||||||||||||||
Shares repurchased | (11,276 | ) | (36,747 | ) | (1,185 | ) | (579 | ) | (3,521 | ) | (3,877 | ) | |||||||||||||||
Net Increase/(Decrease) in Fund Shares | 17,306 | (7,964 | ) | 2,545 | 4,268 | 2,952 | 11,811 | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | 168,802 | 176,766 | 4,268 | – | 24,819 | 13,008 | |||||||||||||||||||||
Shares Outstanding, End of Period | 186,108 | 168,802 | 6,813 | 4,268 | 27,771 | 24,819 |
For the six-month period ended April 30, 2006 (unaudited) and the fiscal year ended October 31, 2005 | Janus Mid Cap Value Fund | Janus Small Cap Value Fund | |||||||||||||||||
(all numbers in thousands) | 2006 | 2005 | 2006 | 2005 | |||||||||||||||
Transactions in Fund Shares – Investor Shares | |||||||||||||||||||
Shares sold | 40,995 | 74,639 | 3,616 | 7,704 | |||||||||||||||
Reinvested dividends and distributions | 16,435 | 12,435 | 6,418 | 7,031 | |||||||||||||||
Shares repurchased | (24,687 | ) | (40,916 | ) | (9,411 | ) | (16,691 | ) | |||||||||||
Net Increase/(Decrease) in Fund Shares | 32,743 | 46,158 | 623 | 1,956 | |||||||||||||||
Shares Outstanding, Beginning of Period | 180,201 | 134,043 | 42,945 | 44,901 | |||||||||||||||
Shares Outstanding, End of Period | 212,944 | 180,201 | 43,568 | 42,945 | |||||||||||||||
Transactions in Fund Shares – Institutional Shares | |||||||||||||||||||
Shares sold | 7,707 | 11,541 | 2,230 | 5,968 | |||||||||||||||
Reinvested dividends and distributions | 2,999 | 1,961 | 6,019 | 6,865 | |||||||||||||||
Shares repurchased | (1,795 | ) | (2,840 | ) | (7,747 | ) | (17,228 | ) | |||||||||||
Net Increase/(Decrease) in Fund Shares | 8,911 | 10,662 | 502 | (4,395 | ) | ||||||||||||||
Shares Outstanding, Beginning of Period | 31,482 | 20,820 | 37,788 | 42,183 | |||||||||||||||
Shares Outstanding, End of Period | 40,393 | 31,482 | 38,290 | 37,788 |
(1) Period from February 25, 2005 (inception date) through October 31, 2005.
(2) Formerly named Janus Risk-Managed Stock Fund.
Janus Core, Risk-Managed and Value Funds April 30, 2006 87
Notes to Financial Statements (unaudited) (continued)
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 in that Court that generally include: (i) claims by a putative class of investors in certain Janus funds asserting claims on behalf of the investor class; (ii) derivative claims by investors in certain Janus funds ostensibly on behalf of suc h funds; (iii) claims on behalf of participants in the Janus 401(k) plan; (iv) claims brought on behalf of shareholders of Janus Capital Group Inc. ("JCGI") on a derivative basis against the Board of Directors of JCGI; and (v) claims by a putative class of shareholders of JCGI asserting claims on behalf of the shareholders. 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 (actions (i) and (ii) described 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. The complaint in the 401(k) plan class action (action (iii) described above) was voluntarily dismissed, but was refiled using a new named plaintiff and asserting claims similar to the initial complaint. As a result of the above events, JCGI, Janus Capital, the Advisory Committee of the Janus 401(k) plan, and the current or former directors of JCGI are the remaining defendants in one or more of the actions.
The Attorney General's Office for the State of West Virginia filed a separate market timing related civil action against Janus Capital and several other non-affiliated mutual fund companies, claiming violations under the West Virginia Consumer Credit and Protection Act. The civil action requests certain monetary penalties, among other relief. This action has been removed to federal court and transferred to the Multidistrict Litigation case in the U.S. District Court of Baltimore, Maryland described above. In addition, the Auditor of the State of West Virginia, in his capacity as securities commissioner, has issued an order indicating an intent to initiate administrative proceedings against most of the defendants in the market timing cases (including Janus Capital) and seeking disgorgement and other monetary relief based on similar market timing allegations.
In addition to the "market timing" actions described above, Janus Capital is a defendant in a consolidated lawsuit in the U.S. District Court for the District of Colorado challenging the investment advisory fees charged by Janus Capital to certain Janus funds. The action was filed in 2004 by fund investors asserting breach of fiduciary duty under Section 36(b) of the Investment Company Act of 1940. The plaintiffs seek declaratory and injunctive relief and an unspecified amount of damages.
In 2001, Janus Capital's predecessor was also named as a defendant in a class action suit in the U.S. District Court for the Southern District of New York, alleging that certain underwriting firms and institutional investors violated antitrust laws in connection with initial public offerings. The U.S. District Court dismissed the plaintiff's antitrust claims in November 2003, however, the U.S. Court of Appeals vacated that decision and remanded it for further proceedings.
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.
88 Janus Core, Risk-Managed and Value Funds April 30, 2006
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 Fund's website at www.janus.com; 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
Amendments to Advisory Agreements to Conform to Prevailing Industry Practice – For all Funds Except INTECH Risk-Managed Stock Fund, and Janus Mid Cap Value Fund
On September 20, 2005, the Board of Trustees, including all of the Independent Trustees, voted unanimously to approve an amended Investment Advisory Agreement ("Amended Agreement") for each applicable Fund and authorized the submission of each Amended Agreement to the Fund's shareholders for approval. Shareholders approved the Amended Agreement for their Fund at a special meeting of Shareholders held on December 29, 2005 for Janus Research Fund, and on January 9, 2006 for Janus Balanced Fund, Janus Contrarian Fund, Janus Core Equity Fund and Janus Growth and Income Fund.
In approving the proposed Amended Agreements, the Trustees considered the recommendations of an independent compliance consultant engaged by Janus Capital regarding the form of each of those agreements and concluded that the proposed changes were consistent with industry practice and would reflect an appropriate delegation of authority to Janus Capital clarifying its investment discretion over the Funds it manages.
In connection with their most recent consideration of the investment advisory agreements for all of the Funds, the Trustees received and reviewed a substantial amount of information provided by Janus Capital and the respective subadvisers for subadvised Funds in response to requests of the Independent Trustees and their counsel. They also received and reviewed a considerable amount of information and analysis provided to the Trustees by an independent fee consultant. Throughout their consideration of the agreements, the Independent Trustees were advised by their independent legal counsel. The Independent Trustees met on two separate occasions with Janus Capital management to consider the agreements, and at each of those meetings they also met separately in executive session with their counsel.
Based on their evaluation of the information provided by Janus Capital, subadvisers, the independent fee consultant, Lipper Inc. ("Lipper"), and other information, the Trustees determined that the overall arrangements between the Funds and Janus Capital were fair and reasonable in light of the nature 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. In considering the 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 agreements are discussed separately below.
Nature, Extent, and Quality of Services
The Trustees reviewed the nature, extent, and quality of the services of Janus Capital and the subadvisers to the Funds, taking into account the investment objective and strategy of each Fund and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis. 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, and overseeing the activities of other service provider s, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
Janus Core, Risk-Managed and Value Funds April 30, 2006 89
Additional Information (unaudited) (continued)
The Trustees also reviewed the enhanced compliance program of Janus Capital and the actions taken by Janus Capital in response to various legal and regulatory proceedings since the fall of 2003.
The Trustees concluded that the nature, extent, and quality of the services provided by Janus Capital and, if applicable, the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory agreements, that 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 appropriate education and experience, to serve the Funds effectively and had demonstrated its continuing ability to attract and retain well-qualified personnel.
Performance of the Funds
The Trustees considered the short-term and longer term performance of each Fund. They reviewed information comparing each Fund's performance with the performance of comparable funds and peer groups identified by Lipper and with the Fund's benchmark index. They concluded that the performance of most Funds was good to very good. Although the performance of some Funds lagged that of their peers for certain periods, they also concluded that Janus Capital had taken appropriate steps to address the 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 information for other comparable funds as provided by Lipper. They noted that the rate of management (investment advisory and administrative) fees for each Fund, 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 in determining compensation payable to portfolio managers, the very competitive environment for investment management talent and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed Janus Capital's management fees for its separate account clients and for its subadvised funds (for which Janus Capital provides only portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fees for Funds having a similar strategy, the Trustees noted that 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. Moreover, they noted that the spread between the average fees charged to the Funds and the fees that Janus Capital charged to its separate account clients was significantly smaller than the average spread for such fees of o ther advisers, based on publicly available data and research conducted by their independent fee consultant.
The Trustees also considered the profitability to Janus Capital and its affiliates of their relationships with each Fund and found Janus Capital's profitability not to be unreasonable.
Finally, the Trustees considered the financial condition of Janus Capital, which they found to be sound.
The Trustees concluded that the management fees and any other compensation payable by each Fund to Janus Capital and its affiliates, as well as the fees paid by Janus Capital or a Fund to the subadvisers of subadvised Funds, were reasonable in relation to the nature 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 charges to other clients. The Trustees also concluded that the overall expense ratio of each Fund was reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital, the investment performance of the Fund, and the expense limitations agreed to by Janus Capital.
Economies of Scale
The Trustees received and considered information about the potential of Janus Capital to experience economies of scale as the assets of the Funds increase. They noted that, although each Fund (except four Funds that have breakpoints) pays an advisory fee at a fixed rate as a percentage of net assets, without any breakpoints, the management fee paid by each Fund, after any applicable contractual expense limitations, was below the mean management fee rate of the Fund's peer group selected by Lipper. The Trustees also took note that, for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of many of the Funds have declined in the past few years, the Funds have benefited from having advisory fee rates that have remained constant rather than fees with breakpoints and higher fee rates at low er asset levels in which the effective fee rate might have increased as assets declined. The Trustees
90 Janus Core, Risk-Managed and Value Funds April 30, 2006
considered certain Amended Agreements that included a change to the advisory fee to reflect a performance-based structure under which the rate of fee would increase or decrease from the current fixed rate if the Fund outperforms or underperforms its benchmark index over a trailing period. Such a fee structure is likely to increase or decrease Janus Capital's economies of scale, depending on whether the effective rate of the fee is increased or decreased. 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 fee structure in each of the advisory agreements was reasonable and that the current rates of fees reflect a sharing between Janus Capital and the Fund of economies of scale at the current asset level of the Fund.
Other Benefits to the Adviser
The Trustees also considered benefits that accrue to Janus Capital and its affiliates from their relationship with the Funds. They recognized that affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively. The Trustees also considered Janus Capital's use of commissions paid by most Funds on their portfolio brokerage transactions to obtain proprietary research products and services benefiting the Funds and/or other clients of Janus Capital, as well as Janus Capital's agreement not to use any Fund's portfolio brokerage transactions to obtain third party research through brokers. The Trustees concluded that Janus Capital's use of "soft" commission dollars to obtain proprietary research products and services was consistent with regulatory requirements 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 concluded that Janus Capital benefits from the receipt of proprietary 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 each Fund could attract other business to Janus Capital or its other Funds and that the success of Janus Capital could enhance Janus Capital's ability to serve the Funds.
After full consideration of the above factors as well as other factors, the Trustees, including all of the Independent Trustees, concluded that the current Investment Advisory Agreement for each Fund was in the best interest of the Fund and its shareholders. In approving the Amended Agreements, the Independent Trustees also concluded that the Amended Agreement, as proposed, was in the best interest of the Fund and its shareholders.
Performance-Based Investment Advisory Fee Proposal – For Janus Contrarian Fund, Janus Research Fund, INTECH Risk-Managed Stock Fund, and Janus Mid Cap Value Fund
On September 20, 2005 and October 19, 2005, the Board of Trustees, including all of the Independent Trustees, voted unanimously to approve an Amended Investment Advisory Agreement for the Fund ("Proposed Agreement") and authorized the submission of the Proposed Agreement to the Fund's shareholders for approval. The Proposed Agreement changed the advisory fee paid by the Fund from a fixed rate to a rate that adjusts upward or downward based upon the Fund's performance relative to a selected benchmark index. Shareholders of the Fund approved the Proposed Agreement at a special meeting of Shareholders held on December 29, 2005 for Janus Research Fund and INTECH Risk- Managed Stock Fund; and on January 9, 2006 for Janus Contrarian Fund, and Janus Mid Cap Value Fund.
For more than a year the Independent Trustees and their independent fee consultant, in consultation with independent legal counsel to the Independent Trustees, have explored the possibility of modifying the fee structure for certain funds to provide for a performance-based adjustment to the current investment advisory fee rate that would increase or decrease the fee based on whether the Fund's total return performance exceeds or lags a stated relevant benchmark index.
The Independent Trustees also worked with Janus Capital to develop a performance structure that was acceptable to Janus Capital. In doing so, the Independent Trustees were seeking to provide a closer alignment of the interests of Janus Capital with those of the Funds and their shareholders. They believe that the fee structure proposed for each Fund will achieve that objective. Included as part of their analysis of the overall performance fee structure, the Trustees, in consultation with their independent fee consultant, considered the appropriate performance range for achieving the maximum and minimum advisory fee that would result in the Performance Adjustment of up to 0.15% (positive or negative) of a Fund's average daily net assets during the applicable performance measurement period. The Trustees reviewed information provided by Janus Capital and prepared by their independent fee consultant with respect to an appropriate deviation of exc ess/under returns relative to a Fund's
Janus Core, Risk-Managed and Value Funds April 30, 2006 91
Additional Information (unaudited) (continued)
benchmark index, taking into consideration expected tracking error of the Fund, expected returns and potential risks and economics involved both for Janus Capital and the Fund's shareholders. The Trustees also reviewed the structure of performance fees applied by other mutual fund complexes. Based on this information, the Trustees determined that a performance range that approximates one standard deviation of excess/under returns relative to a Fund's benchmark index was appropriate for calculating the maximum range (positive or negative) of the Performance Adjustment.
As described above, the Performance Adjustment that will be added to or subtracted from the "Base Fee" (as defined in the Proposed Agreement) as a result of a Fund's performance relative to its benchmark index is a variable up to 0.15% of average net assets during the performance measurement period. Importantly, the performance is computed after deducting the Fund's operating expenses (including advisory fees), which means that in order to receive any upward adjustment from the Base Fee, Janus Capital must deliver a total return after expenses that exceeds the return of the benchmark index, which does not incur any expenses.
The Trustees determined that the benchmark index specified in each of the Proposed Agreements for purposes of computing the performance fee adjustments is appropriate for the respective Fund based on a number of factors, including the fact that the index is broad-based and is composed of securities of the types in which the Fund may invest. The Trustees believe that divergence between the Fund's performance and performance of the index can be attributed, in part, to the ability of the portfolio manager in making investment decisions within the parameters of the Fund's investment objective and investment policies and restrictions.
The Trustees determined that the class of shares of each Fund selected for purposes of calculating the Performance Adjustment as applied to the Fund is the most appropriate class for use in calculating such Fund's Performance Adjustment. In making that determination, the Trustees considered the fee structure and expenses paid by each class of shares, any fees paid to or retained by Janus Capital or its affiliates, as well as the distribution channel for each class of shares.
The time periods to be used in determining any Performance Adjustment were also judged to be of appropriate length to ensure proper correlation and to prevent fee adjustments from being based upon random or insignificant differences between the performance of the Fund and of the index. In that regard, the Trustees concluded that it would be appropriate for there to be no adjustment from the Base Fee for the first 12 months after the effective date of each Proposed Agreement before implementation of any Performance Adjustment, and that, once implemented, the Performance Adjustment should reflect only the Fund's performance subsequent to that effective date. Moreover, the Trustees believed that, upon reaching the thirty sixth month after the effective date, the performance measurement period would be fully implemented, and that the Performance Adjustment should thereafter be based upon a thirty-six month rolling performance measurement period.
In addition to considering the performance fee structure reflected in each Proposed Agreement, in approving each of those agreements, the Trustees followed the process and considered the factors and reached the conclusions described above under "Amendments to Advisory Agreements to Conform to Prevailing Industry Practice."
Performance-Based Sub-Advisory Fee Proposal – For INTECH Risk-Managed Stock Fund
On September 20, 2005, the Board of Trustees, including all of the Independent Trustees, voted unanimously to approve amendments to the current Sub-Advisory Agreement ("Proposed Amended Sub-Advisory Agreement") for INTECH Risk-Managed Stock Fund and authorized the submission of the Proposed Amended Sub-Advisory Agreement to the Fund's shareholders for approval. Shareholders of the Fund approved the Proposed Amended Sub-Advisory Agreement at a Special Meeting of Shareholders held on December 29, 2005.
The Trustees determined that, if the fees paid by the Fund to Janus Capital are to be performance-based, the fees paid by Janus Capital to INTECH should be determined under a corresponding performance-based fee structure. In approving the proposed performance fee structure for the Proposed Amended Sub-Advisory Agreement, the Trustees considered the factors and reached the conclusions described above under "Performance-Based Advisory Fee Proposal."
In addition, in approving the Proposed Amended Sub-Advisory Agreement, the Trustees followed the process and considered the factors and reached the conclusions described above under "Amendments to Advisory Agreements to Conform to Prevailing Industry Practice."
92 Janus Core, Risk-Managed and Value Funds April 30, 2006
Amendments to Advisory Agreements to Conform to Prevailing Industry Practice – For Janus Small Cap Value Fund
The Trustees of Janus Investment Fund, more than eighty-five percent of whom have never been affiliated with the Funds' adviser ("Independent Trustees"), oversee the management of each of the Funds and, as required by law, determine annually whether to continue the investment advisory agreements for each of the Funds and the sub-advisory agreements for the three Funds that utilize sub-advisers.
In connection with their most recent consideration of those agreements for all of the Funds, the Trustees received and reviewed a substantial amount of information provided by Janus Capital (the "Adviser") and the respective sub-advisers in response to requests of the Independent Trustees and their counsel. They also received and reviewed a considerable amount of information and analysis provided to the Trustees 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 on two separate occasions with management to consider the agreements, and at each of those meetings they also met separately in executive session with their counsel.
At a meeting held on June 14, 2005, based on their evaluation of the information provided by the Adviser, sub-advisers and the independent fee consultant and other information, the Trustees determined that the overall arrangements between the Funds and the Adviser were fair and reasonable in light of the nature and quality of the services provided by the Adviser, its affiliates and the sub-advisers, 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, including all of the Independent Trustees, unanimously approved the continuation of the investment advisory agreement for each Fund, and of the sub-advisory agreement for each sub-advised Fund, for an additional one-year period, subject to earlier termination as provided in each agreement. In considering the continuation of the 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 of the Adviser and the sub-advisers to the Funds, taking into account the investment objective and strategy of each Fund and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis. In addition, the Trustees reviewed the resources and key personnel of the Adviser and sub-advisers, especially those who provide investment management services to the Funds. The Trustees also considered other services provided to the Funds by the Adviser or sub-advisers, 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 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 also reviewed the enhanced compliance program of the Adviser and the actions taken by the Adviser in response to various legal and regulatory proceedings since the fall of 2003.
The Trustees concluded that the nature, extent and quality of the services provided by the Adviser or sub-adviser to each Fund were appropriate and consistent with the terms of the respective advisory agreements, that 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 the Adviser and each sub-adviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its continuing ability to attract and retain well-qualified personnel.
Performance of the Funds
The Trustees considered the short-term and longer term performance of each Fund. They reviewed information comparing each Fund's performance with the performance of comparable funds and peer groups identified by Lipper Inc. and with the Fund's benchmark. They concluded that the performance of most Funds was good to very good. Although the performance of some Funds lagged that of their peers for certain periods, they also concluded that the Adviser had taken appropriate steps to address the 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 information for other
Janus Core, Risk-Managed and Value Funds April 30, 2006 93
Additional Information (unaudited) (continued)
comparable funds as provided by Lipper. They noted that the rate of management fees for each Fund, after contractual expense limitations, was below the mean management fee rate of the respective peer group of funds selected by Lipper and for more than two-thirds of the Funds was in the lowest cost quartile.
The Trustees considered the methodology used by the Adviser in determining compensation payable to portfolio managers, the very competitive environment for investment management talent and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed the Adviser's management fees for its separate account clients and for its sub-advised funds (for which the Adviser provides only portfolio management services). Although in most instances sub-advisory and separate account fee rates for various investment strategies were lower than management fees for Funds having a similar strategy, the Trustees noted that the Adviser 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. Moreover, they noted that the spread between the average fees charged to the Funds and the fees that the Adviser charged to its separate account clients was significantly smaller than the average spread for such fees of other advisers, based on publicly available data and research conducted by their independent fee consultant.
The Trustees also considered the profitability to the Adviser and its affiliates of their relationships with each Fund and found the Adviser's profitability not to be unreasonable.
Finally, the Trustees considered the financial condition of the Adviser, which they found to be sound.
The Trustees concluded that the management fees and other compensation payable by each Fund to the Adviser and its affiliates, as well as the fees paid by the Adviser to the sub-advisers of sub-advised Funds, were reasonable in relation to the nature 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 the Adviser charges to other clients. The Trustees also concluded that the overall expense ratio of each Fund was reasonable, taking into account the size of the Fund, the quality of services provided by the Adviser, the investment performance of the Fund and the expense limitations agreed to by the Adviser.
Economies of Scale
The Trustees received and considered information about the potential of the Adviser to experience economies of scale as the assets of the Funds increase. They noted that, although each Fund pays an advisory fee at a fixed rate as a percentage of net assets, without any breakpoints, the management fee paid by each Fund after 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 the Adviser, the Adviser is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of many of the Funds have declined in the past few years the Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets decline. The Trustees also noted that the Funds sha re 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 the Adviser and the Fund of economies of scale at the current asset level of the Fund.
Other Benefits to the Adviser
The Trustees also considered benefits that accrue to the Adviser and its affiliates from their relationship with the Funds. They recognized that affiliates of the Adviser separately serve the Funds as transfer agent and distributor, respectively. The Trustees also considered the Adviser's use of commissions paid by most Funds on their portfolio brokerage transactions to obtain proprietary research products and services benefiting the Funds and/or other clients of the Adviser, as well as the Adviser's agreement not to use any Fund's portfolio brokerage transactions to obtain third party research through brokers. The Trustees concluded that the Adviser's use of "soft" commission dollars to obtain proprietary research products and services was consistent with regulatory requirements and was likely to benefit the Funds. The Trustees also concluded that, other than the services provided by the Adviser and its affiliates pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and the Adviser may potentially benefit from their relationship with each other in other ways. They concluded that the Adviser benefits from the receipt of proprietary research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from the Adviser's receipt of those products and services, as well as research products and services acquired through commissions paid by other clients of the Adviser. They further concluded that success of each Fund could attract other business to the Adviser or its other Funds and that the success of the Adviser could enhance the Adviser's ability to serve the Funds.
After full consideration of the above factors as well as other factors, the Trustees, including all of the Independent Trustees, concluded that the continuation of the investment advisory agreement for each Fund was in the best interest of the Fund and its shareholders.
94 Janus Core, Risk-Managed and Value Funds April 30, 2006
Explanations of Charts, Tables and
Financial Statements (unaudited)
1. PERFORMANCE OVERVIEWS
Performance overview graphs compare the performance of a hypothetical $10,000 investment in each Fund 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 any dividends, distributions and capital gains, 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.
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 options contracts follows each Fund's Schedule of Investments (if applicable). Option 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.
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'll 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.
Janus Core, Risk-Managed and Value Funds April 30, 2006 95
Explanations of Charts, Tables and
Financial Statements (unaudited) (continued)
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 and expense offsets 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, if any, are also shown.
The last section lists the increase or decrease in the value of securities held in the Funds. 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 Fund's 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'll 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 withdraw via redemptions. The "Redemption Fees" refers to the fee paid to the Funds for shares held for three months 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 the Funds' NAV for current and past reporting periods. Not only does this table provide you with total return, it also reports total distributions, asset size, expense ratios and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income per share, which comprises dividends and interest income earned on securities held by the Funds. Following is the total of gains/(losses), realized and unrealized. Dividends and distributions are then subtracted to arrive at the NAV per share at the end of the period.
The next line reflects the average annual total return reported the last day of the period.
Also included are the expense ratios, or the percentage of 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 average shareholder account size 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 offset and the net expenses. The expense ratios listed in the Financial Highlights reflect total expenses prior to any expense offsets (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 ratio is the portfolio turnover rate, which measures the buying and selling activity in a Fund. Portfolio turnover is affected by market conditions, changes in the asset size of a Fund, the nature of the Fund's investments and the investment style of the portfolio manager. A 100% rate implies that an amount equal to the value of the entire portfolio is turned over in a year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the portfolio is traded every six months.
96 Janus Core, Risk-Managed and Value Funds April 30, 2006
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Janus Core, Risk-Managed and Value Funds April 30, 2006 97
Shareholder Meeting (unaudited)
A Special Meeting of Shareholders of the Funds was held on November 22, 2005 and adjourned and reconvened to December 29, 2005 and January 9, 2006. At the meetings, the following matters were voted on and approved by the Shareholders. Each vote reported represents one dollar of net asset value held on the record date of the meeting. The results of the Special Meeting of Shareholders are noted below.
Proposal 1
Elect nine Trustees, including eight "independent" candidates.
Record | Number of Votes | Percentage of Total Outstanding Votes | Percentage of Voted | ||||||||||||||||||||||||||||||||||||||||
Trustees | Date Votes | Affirmative | Withheld | Total | Affirmative | Withheld | Total | Affirmative | Withheld | Total | |||||||||||||||||||||||||||||||||
Jerome S. Contro | 72,431,132,779 | 28,415,846,253 | 806,823,785 | 29,222,670,038 | 39.23 | % | 1.12 | % | 40.35 | % | 97.24 | % | 2.76 | % | 100.00 | % | |||||||||||||||||||||||||||
William F. McCalpin | 72,431,132,779 | 28,431,830,093 | 790,839,945 | 29,222,670,038 | 39.26 | % | 1.09 | % | 40.35 | % | 97.29 | % | 2.71 | % | 100.00 | % | |||||||||||||||||||||||||||
John W. McCarter, Jr. | 72,431,132,779 | 28,410,815,406 | 811,854,632 | 29,222,670,038 | 39.23 | % | 1.12 | % | 40.35 | % | 97.22 | % | 2.78 | % | 100.00 | % | |||||||||||||||||||||||||||
Dennis B. Mullen | 72,431,132,779 | 28,408,140,530 | 814,529,508 | 29,222,670,038 | 39.22 | % | 1.13 | % | 40.35 | % | 97.21 | % | 2.79 | % | 100.00 | % | |||||||||||||||||||||||||||
James T. Rothe | 72,431,132,779 | 28,421,678,938 | 800,991,100 | 29,222,670,038 | 39.24 | % | 1.11 | % | 40.35 | % | 97.26 | % | 2.74 | % | 100.00 | % | |||||||||||||||||||||||||||
William D. Stewart | 72,431,132,779 | 28,426,971,191 | 795,698,847 | 29,222,670,038 | 39.25 | % | 1.10 | % | 40.35 | % | 97.28 | % | 2.72 | % | 100.00 | % | |||||||||||||||||||||||||||
Martin H. Waldinger | 72,431,132,779 | 28,400,077,651 | 822,592,387 | 29,222,670,038 | 39.21 | % | 1.14 | % | 40.35 | % | 97.18 | % | 2.82 | % | 100.00 | % | |||||||||||||||||||||||||||
Linda S. Wolf | 72,431,132,779 | 28,406,316,741 | 816,353,297 | 29,222,670,038 | 39.22 | % | 1.13 | % | 40.35 | % | 97.21 | % | 2.79 | % | 100.00 | % | |||||||||||||||||||||||||||
Thomas H. Bailey | 72,431,132,779 | 28,395,482,070 | 827,141,468 | 29,222,623,538 | 39.21 | % | 1.14 | % | 40.35 | % | 97.17 | % | 2.83 | % | 100.00 | % |
Proposal 3a
To approve certain amendments to the Fund's investment advisory agreement with Janus Capital to conform to prevailing industry practice.
Number of Votes | Percentage of Total Outstanding Votes | Percentage of Voted | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Fund | Record Date Votes | Affirmative | Against | Abstain | Broker Non-Votes | Affirmative | Against | Abstain | Broker Non-Votes | Affirmative | Against | Abstain | Broker Non-Votes | ||||||||||||||||||||||||||||||||||||||||||
Core | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Janus Balanced Fund | 2,626,107,826 | 1,052,522,170 | 41,349,072 | 65,699,796 | 322,963,243 | 40.08 | % | 1.58 | % | 2.50 | % | 12.30 | % | 70.99 | % | 2.79 | % | 4.43 | % | 21.79 | % | ||||||||||||||||||||||||||||||||||
Janus Contrarian Fund | 2,877,224,518 | 1,264,014,407 | 96,127,820 | 62,690,994 | 326,141,983 | 43.93 | % | 3.34 | % | 2.18 | % | 11.34 | % | 72.27 | % | 5.50 | % | 3.58 | % | 18.65 | % | ||||||||||||||||||||||||||||||||||
Janus Core Equity Fund | 698,668,131 | 297,645,077 | 17,770,999 | 14,654,698 | 75,970,161 | 42.60 | % | 2.54 | % | 2.10 | % | 10.87 | % | 73.30 | % | 4.38 | % | 3.61 | % | 18.71 | % | ||||||||||||||||||||||||||||||||||
Janus Growth and Income Fund | 5,863,188,110 | 2,443,014,652 | 125,746,680 | 100,850,196 | 651,929,747 | 41.67 | % | 2.15 | % | 1.72 | % | 11.12 | % | 73.55 | % | 3.79 | % | 3.03 | % | 19.63 | % | ||||||||||||||||||||||||||||||||||
Janus Research Fund | 39,533,389 | 23,433,451 | 790,878 | 578,110 | 7,613,742 | 59.28 | % | 2.00 | % | 1.46 | % | 19.26 | % | 72.29 | % | 2.44 | % | 1.78 | % | 23.49 | % |
Proposal 3b
To approve an amended investment advisory agreement between the Fund and Janus Capital to change the investment advisory fee rate from a fixed rate to a rate that adjusts upward or downward based upon the Fund's performance relative to its benchmark index.
Number of Votes | Percentage of Total Outstanding Votes | Percentage of Voted | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Fund | Record Date Votes | Affirmative | Against | Abstain | Broker Non-Votes | Affirmative | Against | Abstain | Broker Non-Votes | Affirmative | Against | Abstain | Broker Non-Votes | ||||||||||||||||||||||||||||||||||||||||||
Core | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Janus Contrarian Fund | 2,877,224,518 | 1,227,892,553 | 138,956,666 | 55,984,002 | 326,141,983 | 42.68 | % | 4.83 | % | 1.95 | % | 11.34 | % | 70.21 | % | 7.94 | % | 3.20 | % | 18.65 | % | ||||||||||||||||||||||||||||||||||
Janus Research Fund | 39,533,389 | 22,480,356 | 1,867,261 | 454,823 | 7,613,742 | 56.86 | % | 4.72 | % | 1.15 | % | 19.26 | % | 69.35 | % | 5.76 | % | 1.40 | % | 23.49 | % | ||||||||||||||||||||||||||||||||||
Risk-Managed | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
INTECH Risk-Managed Stock Fund(1) | 385,547,495 | 196,911,369 | 20,479,892 | 7,468,239 | 29,222,202 | 51.07 | % | 5.31 | % | 1.94 | % | 7.58 | % | 77.50 | % | 8.06 | % | 2.94 | % | 11.50 | % | ||||||||||||||||||||||||||||||||||
Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Janus Mid Cap Value Fund | 5,049,828,607 | 1,928,216,074 | 183,614,393 | 107,908,756 | 564,590,162 | 38.18 | % | 3.64 | % | 2.14 | % | 11.18 | % | 69.25 | % | 6.59 | % | 3.88 | % | 20.28 | % |
(1) Formerly named Janus Risk-Managed Stock Fund.
Proposal 4
To approve an amended subadvisory agreement between Janus Capital, on behalf of the Fund, and INTECH to change the subadvisory fee rate paid by Janus Capital to INTECH from a fixed rate to a rate that adjusts upward or downward based upon the Fund's performance relative to its benchmark index.
Number of Votes | Percentage of Total Outstanding Votes | Percentage of Voted | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Fund | Record Date Votes | Affirmative | Against | Abstain | Broker Non-Votes | Affirmative | Against | Abstain | Broker Non-Votes | Affirmative | Against | Abstain | Broker Non-Votes | ||||||||||||||||||||||||||||||||||||||||||
Risk-Managed | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
INTECH Risk-Managed Stock Fund(1) | 385,547,495 | 196,147,928 | 21,482,764 | 7,228,808 | 29,222,202 | 50.88 | % | 5.57 | % | 1.88 | % | 7.58 | % | 77.20 | % | 8.46 | % | 2.84 | % | 11.50 | % |
(1) Formerly named Janus Risk-Managed Stock Fund.
98 Janus Core, Risk-Managed and Value Funds April 30, 2006
Janus Core, Risk-Managed and Value Funds April 30, 2006 99
Notes
100 Janus Core, Risk-Managed and Value Funds April 30, 2006
Notes
Janus Core, Risk-Managed and Value Funds April 30, 2006 101
Janus provides access to a wide range of investment disciplines.
Asset Allocation
Janus asset allocation funds 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.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
151 Detroit Street
Denver, CO 80206
1-800-525-3713
Funds distributed by Janus Distributors LLC (6/06)
C-0606-22 111-24-104 06-06
2006 Semiannual Report
Janus International & Global Funds
Janus Global Opportunities Fund
Janus Overseas Fund
Janus Worldwide Fund
Look Inside. . .
• Portfolio manager perspective
• Investment strategy behind your fund
• Fund performance, characteristics and holdings
Table of Contents
Janus International & Global Funds
President and CEO Letter to Shareholders | 1 | ||||||
Portfolio Managers' Commentaries and Schedules of Investments | |||||||
Janus Global Opportunities Fund | 6 | ||||||
Janus Overseas Fund | 11 | ||||||
Janus Worldwide Fund | 17 | ||||||
Statements of Assets and Liabilities | 23 | ||||||
Statements of Operations | 24 | ||||||
Statements of Changes in Net Assets | 25 | ||||||
Financial Highlights | 26 | ||||||
Notes to Schedules of Investments | 28 | ||||||
Notes to Financial Statements | 30 | ||||||
Additional Information | 36 | ||||||
Explanations of Charts, Tables and Financial Statements | 40 | ||||||
Shareholder Meeting | 42 | ||||||
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.
CEO's Letter
Gary Black
President and Chief Executive Officer
Dear Shareholders,
Before offering my perspective on the economy, the markets and the progress we've made at Janus during the six months ended April 30, 2006, I'd like to thank you for your continued confidence and investment in Janus' funds. Your unwavering support is the driving force behind our desire to deliver the strong, consistent fund performance that you've come to expect from Janus.
As you'll read on the following pages, our fund managers continued to deliver excellent performance – for the one-year period ended April 30, 2006, 68% of Janus' retail funds ranked within Lipper's top two quartiles based on total returns. For the five years ended April 30, 2006, 57% of our retail funds earned first- or second-quartile Lipper rankings – up from 30% a year ago. Over the past three years, Janus' U.S. equity funds have gained an average of 21% annually, versus a 12% gain for the Russell 1000® Growth Index and a 15% gain for the S&P 500® Index. (See performance and complete ranking figures on pages 3-4).
Staying Focused on Consistent Performance
While we're pleased to report solid performance across different time periods, our goal is to ensure consistency in our investment returns across different market cycles as well. We employ several tools to help us meet this goal, beginning with detailed research processes that help us single out what we feel are the best investments for our funds. The very talented and experienced individuals at the heart of these processes – our research analysts and portfolio managers – are what distinguish Janus from its asset management peers. Additionally, our robust risk management tools and disciplined buy/sell strategies help in our efforts to deliver consistent performance over full market cycles.
...our goal is to ensure consistency in our investment returns across different market cycles...
We recently appointed Chief Investment Officers to oversee our various investment disciplines. Jonathan Coleman and David Decker oversee our U.S. Growth and Core funds, Jason Yee is responsible for our Global and International funds, and Gibson Smith has oversight of our Fixed-Income and Money Market funds. In their respective roles, these individuals serve as player-coaches with the portfolio managers and analysts who work with them and focus on driving performance of the products they oversee.
Combined, we believe these elements of our research process will help us as we strive to deliver strong fund performance in all market environments.
Corporate Profits Remained Strong
On that note, I'd like to summarize the environment we – and other investors – operated in during the past six months. Stronger-than-expected economic data and growing anticipation of a possible conclusion to monetary tightening by the Federal Reserve drove U.S. equity markets higher during the period. Notwithstanding a sharp spike in energy prices in early 2006 and clear signs of a slowdown in the U.S. housing market, corporate profits continued to grow at a healthy clip and consumer spending remained robust. Financial markets observed a smooth transition in leadership at the Federal Reserve Board after Chairman Alan Greenspan's long tenure, and investors appeared to conclude that incoming Chairman Ben Bernanke would pursue a similar course to that of his predecessor, namely, to contain inflation and promote long-term economic growth. Perhaps the biggest risk, in our opinion, is that the Federal Reserve could increase short-term r ates too aggressively to curb potential inflation, which could cause longer-term growth to stall.
Areas of particular strength in the market included economically sensitive sectors such as financial services, industrials and energy, all of which benefited from continued evidence of strong U.S. economic growth. Overseas markets also delivered healthy returns, with Japan's economic recovery reawakening domestic Japanese investors to the Japanese equity market, and rapid industrialization and growing consumer wealth driving significant gains in emerging equity markets like Brazil, China and India.
Greater Diversification Sought by Investors
It was encouraging to see equity markets worldwide climb higher during the period. And yet, if there's one thing that all investors can consistently count on, it's that there is no consistency in the markets. This year's gains could be next year's losses. With this in mind, more and more investors seem to be making a concerted effort to maintain a
Janus International & Global Funds April 30, 2006 1
Continued
diversified portfolio. In recognition of this, we launched Janus Smart Portfolios in late December 2005. These Portfolios are geared toward investors who may not have the time to allocate their assets according to their specific goals and risk tolerance.
Janus Smart Portfolios invest in a 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). We believe the unique combination of these two different investment styles, assembled with the view of providing long-term diversification and market opportunity, will be of great benefit to shareholders as they invest toward their goals. And with three different portfolios to choose from – Growth, Moderate and Conservative – investors can choose the level of risk they are willing to take in pursuit of their goals.
A Compelling Case for Growth
In summary, the economic outlook appears positive to us, and we find valuations for U.S. equities attractive. The combination of those two factors continues to make a solid case for growth investing. Although future interest rate increases are becoming less likely, we will continue to closely monitor the actions of the Federal Reserve. Regardless of the macroeconomic climate ahead, we remain dedicated to rewarding your trust and confidence in Janus with strong, consistent fund performance.
Sincerely,
Gary Black
Chief Executive Officer and
Chief Investment Officer
2 Janus International & Global Funds April 30, 2006
Lipper Rankings
Lipper Rankings – Based on total return as of 4/30/06 | |||||||||||||||||||||||||||||||||||||||||||||||
ONE YEAR | THREE YEAR | FIVE YEAR | TEN YEAR | SINCE INCEPTION | |||||||||||||||||||||||||||||||||||||||||||
LIPPER CATEGORY | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | |||||||||||||||||||||||||||||||||||||
Janus Investment Funds | |||||||||||||||||||||||||||||||||||||||||||||||
(Inception Date) | |||||||||||||||||||||||||||||||||||||||||||||||
Janus Fund (2/70) | Large-Cap Growth Funds | 43 | 296/698 | 48 | 280/590 | 79 | 374/474 | 44 | 72/165 | 5 | 1/19 | ||||||||||||||||||||||||||||||||||||
Janus Enterprise Fund(1) (9/92) | Mid-Cap Growth Funds | 58 | 324/563 | 30 | 134/461 | 72 | 257/357 | 69 | 88/128 | 40 | 20/49 | ||||||||||||||||||||||||||||||||||||
Janus Mercury Fund(1) (5/93) | Large-Cap Growth Funds | 31 | 210/698 | 9 | 53/590 | 65 | 306/474 | 11 | 18/165 | 2 | 1/84 | ||||||||||||||||||||||||||||||||||||
Janus Olympus Fund(1) (12/95) | Multi-Cap Growth Funds | 44 | 186/423 | 53 | 190/359 | 66 | 188/288 | 27 | 25/95 | 15 | 13/88 | ||||||||||||||||||||||||||||||||||||
Janus Orion Fund (6/00) | Multi-Cap Growth Funds | 3 | 11/423 | 1 | 3/359 | 3 | 8/288 | N/A | N/A | 27 | 61/230 | ||||||||||||||||||||||||||||||||||||
Janus Triton Fund (2/05) | Small-Cap Growth Funds | 12 | 59/533 | N/A | N/A | N/A | N/A | N/A | N/A | 3 | 14/520 | ||||||||||||||||||||||||||||||||||||
Janus Twenty Fund* (4/85) | Large-Cap Growth Funds | 6 | 36/698 | 2 | 6/590 | 12 | 56/474 | 2 | 2/165 | 3 | 1/40 | ||||||||||||||||||||||||||||||||||||
Janus Venture Fund* (4/85) | Small-Cap Growth Funds | 59 | 311/533 | 10 | 45/453 | 20 | 70/363 | 38 | 44/117 | 10 | 1/10 | ||||||||||||||||||||||||||||||||||||
Janus Global Life Sciences Fund (12/98) | Health/Biotechnology Funds | 33 | 57/176 | 25 | 39/161 | 43 | 55/127 | N/A | N/A | 31 | 15/48 | ||||||||||||||||||||||||||||||||||||
Janus Global Technology Fund (12/98) | Science & Technology Funds | 33 | 94/292 | 43 | 113/265 | 58 | 132/230 | N/A | N/A | 23 | 17/76 | ||||||||||||||||||||||||||||||||||||
Janus Balanced Fund(1) (9/92) | Mixed-Asset Target Allocation Moderate Funds | 13 | 49/395 | 52 | 140/271 | 39 | 81/210 | 3 | 2/81 | 4 | 1/27 | ||||||||||||||||||||||||||||||||||||
Janus Contrarian Fund (2/00) | Multi-Cap Core Funds | 1 | 3/834 | 1 | 3/588 | 3 | 11/421 | N/A | N/A | 9 | 29/332 | ||||||||||||||||||||||||||||||||||||
Janus Core Equity Fund(1) (6/96) | Large-Cap Core Funds | 2 | 9/864 | 3 | 20/746 | 3 | 16/618 | N/A | N/A | 2 | 3/248 | ||||||||||||||||||||||||||||||||||||
Janus Growth and Income Fund(1) (5/91) | Large-Cap Core Funds | 5 | 35/864 | 9 | 65/746 | 15 | 90/618 | 3 | 5/240 | 6 | 5/96 | ||||||||||||||||||||||||||||||||||||
Janus Research Fund (2/05) | Multi-Cap Growth Funds | 8 | 31/423 | N/A | N/A | N/A | N/A | N/A | N/A | 7 | 26/410 | ||||||||||||||||||||||||||||||||||||
INTECH Risk-Managed Stock Fund (2/03) | Multi-Cap Core Funds | 58 | 483/834 | 22 | 129/588 | N/A | N/A | N/A | N/A | 26 | 150/586 | ||||||||||||||||||||||||||||||||||||
Janus Mid Cap Value Fund - Inv(1)(2) (8/98) | Mid-Cap Value Funds | 75 | 201/267 | 53 | 114/216 | 35 | 51/146 | N/A | N/A | 5 | 4/81 | ||||||||||||||||||||||||||||||||||||
Janus Small Cap Value Fund - Inv*(2) (10/87) | Small-Cap Core Funds | 97 | 612/633 | 91 | 456/504 | 65 | 243/373 | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||||
Janus Federal Tax-Exempt Fund (5/93) | General Municipal Debt Funds | 60 | 155/260 | 89 | 221/249 | 71 | 156/221 | 86 | 122/142 | 83 | 64/77 | ||||||||||||||||||||||||||||||||||||
Janus Flexible Bond Fund(1) (7/87) | Intermediate Investment Grade Debt Funds | 37 | 172/473 | 36 | 146/406 | 24 | 74/320 | 24 | 35/147 | 24 | 6/25 | ||||||||||||||||||||||||||||||||||||
Janus High-Yield Fund (12/95) | High Current Yield Funds | 38 | 164/439 | 72 | 276/385 | 55 | 169/311 | 9 | 10/111 | 3 | 3/104 | ||||||||||||||||||||||||||||||||||||
Janus Short-Term Bond Fund(1) (9/92) | Short Investment Grade Debt Funds | 30 | 68/228 | 21 | 38/181 | 49 | 63/129 | 20 | 13/66 | 43 | 11/25 | ||||||||||||||||||||||||||||||||||||
Janus Global Opportunities Fund(1) (6/01) | Global Funds | 100 | 360/362 | 54 | 154/286 | N/A | N/A | N/A | N/A | 23 | 50/224 | ||||||||||||||||||||||||||||||||||||
Janus Overseas Fund(1) (5/94) | International Funds | 1 | 2/910 | 1 | 2/770 | 19 | 114/599 | 4 | 8/230 | 2 | 2/120 | ||||||||||||||||||||||||||||||||||||
Janus Worldwide Fund(1) (5/91) | Global Funds | 94 | 339/362 | 98 | 279/286 | 99 | 217/220 | 68 | 56/82 | 28 | 5/17 |
(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.
Data presented represents past performance, which is no guarantee of future results.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
Janus International & Global Funds April 30, 2006 3
Performance
Average Annual Total Return for the periods ended 4/30/06 | |||||||||||||||||||||||
ONE YEAR | THREE YEAR | FIVE YEAR | 10 YEAR | SINCE INCEPTION | |||||||||||||||||||
Fund/Index | |||||||||||||||||||||||
(Inception Date) | |||||||||||||||||||||||
Janus Fund (2/70) | 17.28 | % | 11.85 | % | (2.62 | )% | 6.67 | % | 13.86 | % | |||||||||||||
Janus Contrarian Fund(1)(2)(3) (2/00) | 38.81 | % | 31.63 | % | 10.68 | % | N/A | 9.63 | % | ||||||||||||||
Janus Core Equity Fund(3) (6/96) | 31.00 | % | 19.14 | % | 5.74 | % | N/A | 13.43 | % | ||||||||||||||
Janus Enterprise Fund (9/92) | 29.21 | % | 22.74 | % | 1.87 | % | 6.69 | % | 11.63 | % | |||||||||||||
Janus Growth and Income Fund (5/91) | 25.82 | % | 16.82 | % | 3.44 | % | 12.02 | % | 13.80 | % | |||||||||||||
Janus Mercury Fund (5/93) | 19.00 | % | 15.42 | % | (1.74 | )% | 8.56 | % | 12.70 | % | |||||||||||||
Janus Mid Cap Value Fund - Investor Shares(3)(4) (8/98) | 20.64 | % | 23.27 | % | 12.45 | % | N/A | 17.97 | % | ||||||||||||||
Janus Olympus Fund (12/95) | 26.44 | % | 16.83 | % | 0.45 | % | 9.78 | % | 11.77 | % | |||||||||||||
Janus Orion Fund(1)(5)(6)(7) (6/00) | 41.50 | % | 27.95 | % | 10.72 | % | N/A | (0.73 | )% | ||||||||||||||
Janus Small Cap Value Fund - Investor Shares* (10/87) | 20.30 | % | 20.76 | % | 10.80 | % | 15.60 | % | N/A | ||||||||||||||
Janus Twenty Fund*(4)(6) (4/85) | 24.20 | % | 19.02 | % | 2.05 | % | 10.70 | % | 13.48 | % | |||||||||||||
Janus Venture Fund*(8) (4/85) | 32.58 | % | 27.53 | % | 9.14 | % | 9.29 | % | 13.88 | % | |||||||||||||
INTECH Risk-Managed Stock Fund(3) (2/03) | 17.81 | % | 19.16 | % | N/A | N/A | 20.50 | % | |||||||||||||||
S&P 500® Index | 15.42 | % | 14.68 | % | 2.70 | % | 8.94 | % | N/A | ||||||||||||||
Russell 1000® Growth Index | 15.18 | % | 12.05 | % | (0.76 | )% | 6.21 | % | N/A |
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 average performance of Janus' U.S. equity funds over the past three years was calculated using the three-year total returns of the 13 funds contained in the performance chart above. The 13 funds reflected in the performance chart above are those which Janus categorizes as U.S. equity funds and which have performance histories of three or more years.
*Closed to new investors
(1)This Fund may have significant exposure to emerging markets. In general, emerging market investments have historically been subject to significant gains and/or losses. As such, the Fund's returns and NAV may be subject to such volatility.
(2)The Fund has experienced significant gains due, in part, to its investments in India. 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 India.
(3)The Fund will invest at least 80% of its net assets in the type of securities described by its name.
(4)Due to certain investment strategies, the Fund may have an increased position in cash.
(5)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.
(6)Returns have sustained significant gains due to market volatility in the healthcare sector.
(7)Returns have sustained significant gains due to market volatility in the financials sector.
(8)This Fund has been significantly impacted, either positively or negatively, by investing in initial public offerings (IPOs).
Total return includes reinvestment of dividends, distributions and capital gains.
A fund's performance may be affected by risks that include those associated with non-diversification, investments in foreign securities and emerging markets, non-investment grade debt securities, undervalued or overlooked companies, companies with relatively small market capitalizations and investments in specific industries or countries. Please see a Janus prospectus or janus.com for more information about fund holdings and details.
The proprietary mathematical process used by Enhanced Investment Technologies LLC ("INTECH") may not achieve the desired results. Since the portfolio is regularly 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.
There is no assurance that the investment process will consistently lead to successful investing.
Returns shown for Janus Mid Cap Value Fund prior to 4/21/03 are those of Berger Mid Cap Value Fund.
Returns shown for Janus Small Cap Value Fund prior to 4/21/03 are those of Berger Small Cap Value Fund.
Effective 2/1/06, Blaine Rollins is no longer the portfolio manager of Janus Fund, and David Corkins is now the Fund manager.
Effective 2/1/06, David Corkins is no longer the portfolio manager of Janus Mercury Fund. A research team now selects the investments for Janus Mercury Fund led by the Director of Research, Jim Goff.
Effective 2/28/06, Janus Risk-Managed Stock Fund changed its name to INTECH Risk-Managed Stock Fund.
Janus Capital Group Inc. has a 30% ownership stake in the investment advisory business of Perkins, Wolf, McDonnell and Company, LLC.
INTECH is a subsidiary of Janus Capital Group Inc.
A Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
The S&P 500® Index is the Standard & Poor's composite index of 500 stocks, a widely recognized, unmanaged index of common stock prices.
The Russell 1000® Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.
4 Janus International & Global Funds April 30, 2006
Useful Information About Your Fund Report
Portfolio Manager Commentaries
The portfolio manager commentaries in this report include valuable insight from the portfolio 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 portfolio managers in their commentaries are just that: opinions. They are a reflection of their best judgment at the time this report was compiled, which was April 30, 2006. As the investing environment changes, so could their 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 Portfolio Manager 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 (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, 2005 to April 30, 2006.
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.
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 & Global Funds April 30, 2006 5
Janus Global Opportunities Fund (unaudited)
Ticker: JGVAX
Fund Snapshot
This fund gives investors direct access to the broad range of Janus' relentless research.
Performance Overview
For the six months ended April 30, 2006, Janus Global Opportunities Fund returned 11.47%, underperforming its benchmark, the Morgan Stanley Capital International (MSCI) WorldSM Index, which gained 16.01% for the period.
Jason Yee
co-portfolio manager
Gregory Kolb
co-portfolio manager
Despite concerns over inflation and rising interest rates, global equity markets gained support from relatively strong growth in the world's largest economies. The U.S. economy remained relatively healthy, fueled by sustained strength in consumer spending and an improving labor market. Meanwhile, the Japanese economy continued its recovery, while emerging markets such as India and China sustained impressive growth rates. Nonetheless, the global economic expansion has put upward pressure on commodity prices. In particular, crude oil prices spiked to around $70 per barrel in April, and showed few signs of easing. Against this backdrop, the U.S. Federal Reserve continued to tighten credit conditions, taking the Federal Funds rate to 4.75% in March, while the European Central Bank raised its key lending rate by 50 basis points during the six-month period. Longer-term yields also moved higher worldwide.
The current market environment continues to be characterized by earnings momentum and driven primarily by a handful of sectors and geographies. Investors seem to once again be chasing where performance is today rather than investing where performance will be tomorrow. As Warren Buffett recently remarked, "What the wise man does in the beginning, fools do in the end. With any asset class that has a big move, first the fundamentals attract speculation, then the speculation becomes dominant." Especially in vogue today are the emerging markets and commodity stocks. These are both areas to which the Fund has limited exposure. We do not find the risk/reward profiles particularly compelling at this time and generally are finding better opportunities elsewhere. While this positioning has, and may continue to, hurt performance in the short term, we believe that the investments available in other areas of the market will prove to be more attractive ov er the next few years.
Performance benefited from the Fund's overweight exposure to consumer durables and media shares, as well as strong stock selection in the healthcare arena. On the downside, a number of the Fund's individual holdings in the financial services, capital goods and technology sectors weighed on results. Relative performance was also hurt by our lack of exposure to the energy sector, which earned double-digit returns for the period.
Fund Composition
The Fund remained most overweight in consumer discretionary and insurance stocks, as well as in the healthcare services and equipment industry. On the other hand, the Fund carried below-market weightings in technology, energy, utilities and banking stocks.
Select Healthcare, Consumer Discretionary, Materials and Financial Stocks Aid Performance
The Fund's strongest performer for the period was Ligand Pharmaceuticals, a biotechnology company that markets a treatment for chronic pain, Avinza, while also boasting a promising development pipeline. After a series of operational and financial missteps, the company seems to have recovered reasonably well and is approaching our target prices. This is a perfect example of our contrarian strategy, where we attempt to take advantage of overwhelming negative perception and sentiment to find unloved and undervalued investment ideas.
Another standout was a new holding, TreeHouse Foods, a company that manufactures pickles, creamers, soups and other products. Dean Foods spun off the company in 2005 with little fanfare. I believe spin-offs are often another great place to look for undervalued opportunities. In this particular instance, the company's strong management team, proven financial track record, and low valuation offered us an attractive investment opportunity.
While the Fund remained underweight in the materials sector, performance by individual holdings in this area was very robust. One top contributor for the period was India's Tata Steel, which has capitalized on robust raw materials demand and firm commodity prices. The company has also benefited from favorable logistics, a proximity to mines and steel plants, and a low overall cost structure. As the company shifts production to higher-margin grades of steel, we expect these favorable dynamics to translate into expanding capacity and higher returns.
Finally, JP Morgan Chase was another strong contributor. Under the guidance of CEO Jamie Dimon, the financial services powerhouse continued to capitalize on its 2004 merger with Bank One. In April, the company reported a 35% year-over-year increase in its net income, fueled by improving fee-based revenues and investment banking returns.
Insurance, Internet Retailers and Technology Shares Hinder Performance
Our stake in U.K.-based insurer Willis Group weighed on performance. The world's third-largest insurance brokerage
6 Janus International & Global Funds April 30, 2006
(unaudited)
firm, Willis lost ground as rising expenses threatened near-term earnings prospects. However, we believe that 2006 will begin to see attractive returns on the investments the company is making in their business and people.
A handful of consumer discretionary shares also struggled, including Internet retailers Expedia and Amazon.com. Online travel agent Expedia was hurt by concerns over its rising cost structure and heightened competition from airlines and hotels booking travelers through their own proprietary websites. Meanwhile, Amazon.com declined on increased upfront spending, which masked its near-term profitability. Nonetheless, the company continues to generate significant cash flow and has been spending that cash to improve the customer experience on its website. We continue to hold the stock because we see the significant competitive advantages of its business model, also characterized by low capital intensity and high incremental returns on capital.
Meanwhile, computer hardware manufacturer Dell continued to struggle against concerns over moderating industry growth and heightened competition. Despite reporting better-than-expected financial results in February, Dell is also facing concerns over increasing margin pressure in its core business. Despite its recent underperformance, we increased our position in Dell. It is rare to be able to invest in such a competitively advantaged business model for such a reasonable valuation, and we believe this is currently one of the most attractive investments in the Fund.
Market Outlook
We remain cautiously optimistic on the outlook for the remainder of the year. In particular, we are confident in our rigorous stock selection process, and in our ability to identify promising investments that may be trading at a discount to their fundamental business worth. While it may take some time for the broader market to recognize the value of the shares we own, we believe that our research efforts ultimately will be rewarded. By purchasing good businesses at reasonable prices, we continue our efforts to generate solid long-term results for our shareholders.
Thank you for your continued support.
Janus Global Opportunities Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Ligand Pharmaceuticals, Inc. - Class B Pharmaceutical developer - U.S. | 2.64% | ||||||
Koninklijke (Royal) Philips Electronics N.V. Global electronics company - Netherlands | 1.53% | ||||||
JP Morgan Chase & Co. Global financial services company - U.S. | 1.40% | ||||||
Tata Steel, Ltd. Steel company - India | 1.29% | ||||||
McKesson Corp. Pharmaceuticals distributor - U.S. | 0.70% |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Dell, Inc. Worldwide computer systems and services - U.S. | (0.45%) | ||||||
Amazon.com, Inc. Online retailer - U.S. | (0.44%) | ||||||
Willis Group Holdings, Ltd. Insurance brokerage and risk management consulting services provider - U.S. | (0.33%) | ||||||
Vodafone Group PLC Mobile telecommunications services provider - U.S. | (0.15%) | ||||||
Patterson Companies, Inc. Dental, veterinary and rehabilitation supplies distributor - U.S. | (0.15%) |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Consumer Durables & Apparel | 3.58 | % | 12.75 | % | 2.24 | % | |||||||||
Pharmaceuticals & Biotechnology | 2.66 | % | 5.16 | % | 7.04 | % | |||||||||
Materials | 1.72 | % | 2.86 | % | 5.66 | % | |||||||||
Diversified Financials | 1.44 | % | 6.97 | % | 6.56 | % | |||||||||
Media | 1.23 | % | 12.97 | % | 3.01 | % |
5 Largest Detractors from Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Technological Hardware & Equipment | (0.45 | %) | 1.29 | % | 5.51 | % | |||||||||
Telecommunications Services | (0.15 | %) | 1.65 | % | 4.20 | % | |||||||||
Communication Services & Supplies | 0.00 | % | 0.81 | % | 0.83 | % | |||||||||
Transportation | 0.00 | % | 0.00 | % | 2.04 | % | |||||||||
Utilities | 0.00 | % | 0.00 | % | 3.99 | % |
Janus International & Global Funds April 30, 2006 7
Janus Global Opportunities Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2006 | |||||||
JP Morgan Chase & Co. Finance - Investment Bankers/Brokers | 5.4 | % | |||||
British Sky Broadcasting Group PLC Television | 5.0 | % | |||||
Willis Group Holdings, Ltd. Insurance Brokers | 5.0 | % | |||||
Tyco International, Ltd. (U.S. Shares) Diversified Operations | 4.6 | % | |||||
Nipponkoa Insurance Company, Ltd. Property and Casualty Insurance | 4.4 | % | |||||
24.4 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2006 |
Emerging markets comprised 3.3% of total net assets.
5 Largest Country Allocations – (% of Investment Securities)
As of April 30, 2006 | As of October 31, 2005 | ||||||
![]() | ![]() | ||||||
8 Janus International & Global Funds April 30, 2006
(unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Since Inception* | |||||||||||||
Janus Global Opportunities Fund | 11.47 | % | 13.76 | % | 9.75 | % | |||||||||
Morgan Stanley Capital International World IndexSM | 16.01 | % | 24.32 | % | 6.69 | % | |||||||||
Lipper Quartile | N/A | 4 | th | 1 | st | ||||||||||
Lipper Ranking - based on total return for Global Funds | N/A** | 360/362 | 50/224 |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes 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.
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.
*The Fund's inception date – June 29, 2001
**The Fund's fiscal year-to-date Lipper ranking is not available.
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 "Explanations of Charts, Tables and Financial Statements."
The Fund's portfolio may differ significantly from the securities held in the index. The index is not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
This Fund is designed for long-term investors who can accept the special risks associated with value investing and having significant exposure to foreign markets (which include risks such as currency fluctuation and political uncertainty).
The Fund is classified as "nondiversified," meaning it has the ability to take larger positions in a smaller number of issuers than a "diversified" fund. Nondiversified funds may experience greater price volatility.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
A 2% redemption fee may be imposed on shares held for 3 months or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,114.70 | $ | 5.92 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.19 | $ | 5.66 |
*Expenses are equal to the annualized expense ratio of 1.13%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Janus International & Global Funds April 30, 2006 9
Janus Global Opportunities Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Common Stock - 98.8% | |||||||||||
Agricultural Chemicals - 1.8% | |||||||||||
21,351 | Syngenta A.G.* | $ | 2,978,329 | ||||||||
Audio and Video Products - 1.8% | |||||||||||
57,300 | Sony Corp. | 2,878,461 | |||||||||
Beverages - Wine and Spirits - 2.2% | |||||||||||
217,624 | Diageo PLC | 3,591,483 | |||||||||
Broadcast Services and Programming - 3.6% | |||||||||||
266,573 | Liberty Global, Inc. - Class A* | 5,520,727 | |||||||||
21,043 | Liberty Global, Inc. - Class C* | 420,229 | |||||||||
5,940,956 | |||||||||||
Cellular Telecommunications - 1.8% | |||||||||||
1,263,305 | Vodafone Group PLC | 2,983,296 | |||||||||
Computers - 3.6% | |||||||||||
225,175 | Dell, Inc.* | 5,899,585 | |||||||||
Dental Supplies and Equipment - 1.9% | |||||||||||
94,815 | Patterson Companies, Inc.*,# | 3,089,073 | |||||||||
Distribution/Wholesale - 3.7% | |||||||||||
755,500 | Esprit Holdings, Ltd. | 6,031,683 | |||||||||
Diversified Operations - 8.8% | |||||||||||
293,000 | Hutchison Whampoa, Ltd. | 2,875,846 | |||||||||
36,613 | Louis Vuitton Moet Hennessy S.A.# | 3,854,656 | |||||||||
292,495 | Tyco International, Ltd. (U.S. Shares) | 7,707,243 | |||||||||
14,437,745 | |||||||||||
E-Commerce/Products - 2.8% | |||||||||||
130,055 | Amazon.com, Inc.* | 4,579,237 | |||||||||
E-Commerce/Services - 7.4% | |||||||||||
299,987 | Expedia, Inc.*,# | 5,594,758 | |||||||||
230,127 | IAC/InterActiveCorp* | 6,643,766 | |||||||||
12,238,524 | |||||||||||
Electronic Components - Miscellaneous - 3.7% | |||||||||||
177,115 | Koninklijke (Royal) Philips Electronics N.V. | 6,111,343 | |||||||||
Finance - Consumer Loans - 3.9% | |||||||||||
45,080 | Acom Company, Ltd. | 2,628,825 | |||||||||
60,100 | Promise Company, Ltd. | 3,705,283 | |||||||||
6,334,108 | |||||||||||
Finance - Investment Bankers/Brokers - 5.4% | |||||||||||
193,900 | JP Morgan Chase & Co. | 8,799,182 | |||||||||
Food - Canned - 2.4% | |||||||||||
152,820 | TreeHouse Foods, Inc.* | 4,003,884 | |||||||||
Food - Catering - 3.4% | |||||||||||
364,629 | Nissin Healthcare Food Service Company, Ltd. | 5,568,786 | |||||||||
Insurance Brokers - 5.0% | |||||||||||
233,175 | Willis Group Holdings, Ltd. | 8,196,101 | |||||||||
Medical - Drugs - 2.9% | |||||||||||
382,765 | Ligand Pharmaceuticals, Inc. - Class B*,# | 4,688,871 | |||||||||
Medical - Hospitals - 2.9% | |||||||||||
234,040 | Health Management Associates, Inc. - Class A | 4,846,968 | |||||||||
Multimedia - 2.4% | |||||||||||
107,935 | Vivendi Universal S.A.# | 3,940,804 | |||||||||
Property and Casualty Insurance - 4.4% | |||||||||||
807,000 | Nipponkoa Insurance Company, Ltd. | 7,207,825 |
Shares or Principal Amount | Value | ||||||||||
Reinsurance - 3.1% | |||||||||||
1,744 | Berkshire Hathaway, Inc. - Class B* | $ | 5,148,288 | ||||||||
Retail - Apparel and Shoe - 1.3% | |||||||||||
74,223 | Next PLC | 2,181,835 | |||||||||
Rubber/Plastic Products - 4.2% | |||||||||||
358,800 | Tenma Corp. | 6,869,398 | |||||||||
Savings/Loan/Thrifts - 1.8% | |||||||||||
206,270 | NewAlliance Bancshares, Inc.# | 2,978,539 | |||||||||
Schools - 4.3% | |||||||||||
130,470 | Apollo Group, Inc. - Class A*,# | 7,128,881 | |||||||||
Steel - Producers - 3.3% | |||||||||||
382,706 | Tata Steel, Ltd. | 5,405,190 | |||||||||
Television - 5.0% | |||||||||||
856,719 | British Sky Broadcasting Group PLC | 8,209,742 | |||||||||
Total Common Stock (cost $134,370,157) | 162,268,117 | ||||||||||
Other Securities - 9.1% | |||||||||||
15,003,594 | State Street Navigator Securities Lending Prime Portfolio† (cost $15,003,594) | 15,003,594 | |||||||||
Time Deposit - 1.0% | |||||||||||
$ | 1,700,000 | ING Financial, 4.86%, 5/1/06 (cost $1,700,000) | 1,700,000 | ||||||||
Total Investments (total cost $151,073,751) – 108.9% | 178,971,711 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (8.9)% | (14,568,570 | ) | |||||||||
Net Assets – 100% | $ | 164,403,141 |
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Bermuda | $ | 21,935,027 | 12.3 | % | |||||||
France | 7,795,460 | 4.4 | % | ||||||||
Hong Kong | 2,875,846 | 1.6 | % | ||||||||
India | 5,405,190 | 3.0 | % | ||||||||
Japan | 28,858,578 | 16.1 | % | ||||||||
Netherlands | 6,111,343 | 3.4 | % | ||||||||
Switzerland | 2,978,329 | 1.7 | % | ||||||||
United Kingdom | 16,966,356 | 9.5 | % | ||||||||
United States†† | 86,045,582 | 48.0 | % | ||||||||
Total | $ | 178,971,711 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (38.7% excluding Short-Term Securities and Other Securities)
See Notes to Schedules of Investments and Financial Statements.
10 Janus International & Global Funds April 30, 2006
Janus Overseas Fund (unaudited)
Ticker: JAOSX
Fund Snapshot
This growth fund invests in overseas companies based on their individual merits regardless of their geography or industry sector.
Performance Overview
For the six months ended April 30, 2006, Janus Overseas Fund returned 41.09%, outperforming both its primary and secondary benchmarks, the Morgan Stanley Capital International EAFE® Index, and the Morgan Stanley Capital International EAFE Growth® Index and the Morgan Stanley Capital International All Country World ex-U.S. IndexSM, which gained 22.26%, 22.89% and 24.83%, respectively.
Brent Lynn
portfolio manager
Fund performance benefited from solid stock selection, particularly in the energy, consumer products, and real estate sectors. The Fund also was rewarded by its sizable stakes in emerging markets such as India, and Brazil, as well as from its above-market exposure to energy and technology shares.
The international investment climate was supportive during the period, as the world's largest economies continued to grow at a solid pace, contributing to equity gains in many international markets. The U.S. economy remained healthy, despite the backdrop of higher interest rates and rising energy prices. Turning to the international arena, Asian markets gained support from signs of recovery in Japan, and vigorous economic growth in China and India. Meanwhile, European shares continued to perform well, despite elevated energy costs and credit tightening by the European Central Bank.
Given the global economic expansion, inflation remained a concern, especially as energy prices tested new highs. Crude oil prices exceeded $70 per gallon in April as geopolitical pressures in oil-producing countries such as Iran and Nigeria. Inflation concerns triggered monetary tightening around the globe. The U.S. Federal Reserve continued its campaign of steady but measured credit tightening, while the European Central Bank raised its key interest rate by 50 basis points during the period, to 2.50%. As central banks around the globe removed liquidity from the system, longer-term interest rates moved higher.
Investment Strategy
While the portfolio strategy remained relatively unchanged, the Fund experienced some natural turnover as we identified new investment opportunities and sold off stocks that either reached our price targets or lost our fullest confidence.
Strong Performers Included Materials, Energy and Real Estate Stocks
Among the strongest contributors to Fund performance were emerging market shares, such as Cosan, the largest sugar producer in Brazil. We believe Cosan is well positioned to benefit from an anticipated drop in European sugar exports, which is expected now that the European Union has slashed subsidies for sugar farmers. On the demand side, sugar consumption continues to expand in fast-growing emerging markets such as China. Additionally, Cosan has benefited from the Brazilian government's promotion of ethanol fuel. Most of the ethanol in Brazil is sugar-based, rather than the corn-based formula used in the United States. The Brazilian government has promoted the development of flex-fuel automobiles, which can run on either gasoline or ethanol. There are also pressures within Japan and European countries to boost the mandated use of ethanol in automotive fuels. These devel opments have added to our excitement over Cosan's prospects.
The Fund maintained a significant above-market weighting in Indian shares, many of which have delivered impressive performance. One standout was Tata Steel. While the company has benefited from firm pricing within the commodity markets, we believe it is positioned to be profitable even if steel prices fall, given its access to low-cost iron ore and coal. Meanwhile, steel demand in India is accelerating rapidly, and Tata Steel is shifting production to more value-added, higher margin grades of steel. The company plans to triple capacity over the next five years. Given its advantageous cost structure, we believe that Tata Steel is poised to translate expanding capacity into higher returns.
Hong Kong-based gaming company Melco International was another strong performer. Melco is positioned to benefit from the rapid growth in tourism and gaming in Asia, in our opinion. The company plans to partner with leading Australian gaming company PBL in opening high-end and mid-market hotels and casinos in Macau, which is attempting to transform itself into the Las Vegas of Asia.
The Fund also benefited from strong performance by its energy shares, particularly Indian conglomerate Reliance Industries, the top-contributing holding for the period, and Canadian oil sands company Suncor. Additionally, the Fund capitalized on solid returns by its Japanese real estate holdings, including Mitsubishi Estate and Sumitomo Realty. During the period, we also initiated a position in Singapore-based CapitaLand, Southeast Asia's largest property developer and manager. The company's transformation from a traditional property conglomerate to an "asset-light" management model fits two of our key investment criteria – historically higher returns on capital and capital efficiency.
Janus International & Global Funds April 30, 2006 11
Janus Overseas Fund (unaudited)
Software Services and Financial Companies Weighed on Performance
Fund performance was hindered by weakness in a handful of individual names that failed to meet investor expectations. Detractors included soybean processor and fertilizer manufacturer Bunge Limited, which fell after reporting a 41% drop in its first quarter profits. The company's recent results have suffered from weakness in its South American market.
Our stake on Israeli security software firm Check Point Software Technologies also weighed on performance. Check Point reported disappointing first quarter financial results, which reflected weaker than expected growth in new product revenues.
Insurance stocks were also weak, and laggards in this area included Japan's Millea Holdings and the United Kingdom's Willis Group.
During the period, we took profits in some Japanese financial companies which had reached our valuation targets, reducing our positions in Mizuho Financial Group, Mitsubishi UFJ Financial Group, and Sumitomo Realty. Meanwhile, we also invested in two of China's life insurance franchises, Ping An and China Life.
Investment Strategy and Outlook
Looking ahead, we believe that the global economy is still healthy, despite uncertainty over higher energy prices and rising interest rates. We do, however, recognize the risk of some pullback in the emerging markets, given their impressive performance over the past six months. Nonetheless, the portfolio maintains its geographical diversity, while it continues to reflect the best investment ideas identified by our team. Our focus remains on identifying companies with durable franchises, exciting long-term growth prospects, and reasonable valuations. We recognize that markets can be volatile in the short-term, but we believe that our investment approach will aid us in our goal of delivering strong, long-term returns to our shareholders.
Janus Overseas Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Reliance Industries, Ltd. Industrial conglomerate with multiple lines of business - India | 3.56% | ||||||
Cosan S.A. Industria e Comercio Food and beverage producer and distributor - Brazil | 2.85% | ||||||
Tata Steel, Ltd. Steel company - India | 2.69% | ||||||
Melco International Development, Ltd. Holding company - China | 2.04% | ||||||
Sony Corp. Consumer and industrial electronic equipment producer - Japan | 1.31% |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Bunge, Ltd. Integrated global agribusiness and food company - U.S. | (0.22%) | ||||||
Check Point Software Technologies, Ltd. (U.S. Shares) Internet security provider - U.S. | (0.16%) | ||||||
Companhia de Concessoes Rodoviarias Toll road operator - Brazil | (0.12%) | ||||||
Obrascon Huarte Lain Brasil S.A. Construction and civil engineering company - Brazil | (0.11%) | ||||||
Rossi Residencial S.A. Construction company - Brazil | (0.10%) |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Energy | 6.30 | % | 11.48 | % | 8.20 | % | |||||||||
Materials | 4.47 | % | 9.92 | % | 8.06 | % | |||||||||
Real Estate | 3.63 | % | 7.25 | % | 2.61 | % | |||||||||
Banks | 3.44 | % | 9.49 | % | 16.20 | % | |||||||||
Food, Beverage & Tobacco | 3.34 | % | 4.82 | % | 5.04 | % |
5 Lowest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Other* | 0.13 | % | 0.12 | % | 0.00 | % | |||||||||
Healthcare Equipment & Services | 0.14 | % | 0.96 | % | 0.84 | % | |||||||||
Food & Staples Retailing | 0.17 | % | 0.31 | % | 1.89 | % | |||||||||
Pharmaceuticals & Biotechnology | 0.23 | % | 2.43 | % | 6.94 | % | |||||||||
Media | 0.27 | % | 2.31 | % | 2.17 | % |
*Industry not classified by Global Industry Classification Standard.
12 Janus International & Global Funds April 30, 2006
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2006 | |||||||
Reliance Industries, Ltd. Oil Refining and Marketing | 4.9 | % | |||||
Samsung Electronics Company, Ltd. Electronic Components - Semiconductors | 4.2 | % | |||||
Tata Steel, Ltd. Steel - Producers | 3.8 | % | |||||
Potash Corporation of Saskatchewan, Inc. Agricultural Chemicals | 3.0 | % | |||||
ASML Holding N.V. Semiconductor Equipment | 2.9 | % | |||||
18.8 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2006 |
Emerging markets comprised 41.5% of total net assets.
5 Largest Country Allocations – (% of Investment Securities)
As of April 30, 2006 | As of October 31, 2005 | ||||||
![]() | ![]() | ||||||
Janus International & Global Funds April 30, 2006 13
Janus Overseas Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | |||||||||||||||||||
Janus Overseas Fund | 41.09 | % | 71.36 | % | 11.62 | % | 14.06 | % | 14.65 | % | |||||||||||||
Morgan Stanley Capital International EAFE® Index | 22.26 | % | 32.82 | % | 7.06 | % | 4.15 | % | 4.74 | % | |||||||||||||
Morgan Stanley Capital International EAFE® Growth Index | 22.89 | % | 33.49 | % | 9.18 | % | 6.68 | % | 6.98 | %** | |||||||||||||
Morgan Stanley Capital International All Country World ex-U.S. IndexSM | 24.83 | % | 37.62 | % | 11.02 | % | N/A | 7.75 | %*** | ||||||||||||||
Lipper Quartile | N/A | 1 | st | 1 | st | 1 | st | 1 | st | ||||||||||||||
Lipper Ranking - based on total return for International Funds | N/A**** | 2/910 | 114/599 | 8/230 | 2/120 |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes 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.
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.
*The Fund's inception date – May 2, 1994
**The Morgan Stanley Capital International EAFE® Growth Index's since inception returns are calculated from April 30, 1994.
***The MSCI All Country World ex-U.S. Index's since inception returns are calculated from December 31, 1998.
****The Fund's fiscal year-to-date Lipper ranking is not available.
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 "Explanations of Charts, Tables and Financial Statements."
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
Foreign investing involves special risks such as currency fluctuations and political uncertainty.
There is no assurance that the investment process will consistently lead to successful investing.
A 2% redemption fee may be imposed on shares held for 3 months or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
This Fund may have significant exposure to emerging markets. In general, emerging market investments have historically been subject to significant gains and/or losses. As such, the Fund's returns and NAV may be subject to such volatility.
The Fund held approximately 13.7% and 11.6% of its total investments in Indian and Brazilian securities, respectively, as of April 30, 2006, and the Fund has experienced significant gains due, in part, to its investments in India and 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 India and/or Brazil.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,410.90 | $ | 5.44 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.28 | $ | 4.56 |
*Expenses are equal to the annualized expense ratio of 0.91%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
14 Janus International & Global Funds April 30, 2006
Janus Overseas Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Common Stock - 99.4% | |||||||||||
Agricultural Chemicals - 3.0% | |||||||||||
1,446,520 | Potash Corporation of Saskatchewan, Inc.# | $ | 136,934,553 | ||||||||
Agricultural Operations - 3.2% | |||||||||||
22,100 | BrasilAgro - Companhia Brasileira de Propriedades Agricolas | 10,456,094 | |||||||||
1,589,325 | Bunge, Ltd.# | 84,790,489 | |||||||||
69,906,000 | Chaoda Modern Agriculture Holdings, Ltd.# | 48,687,965 | |||||||||
143,934,548 | |||||||||||
Apparel Manufacturers - 0.7% | |||||||||||
3,901,900 | Burberry Group PLC | 33,548,741 | |||||||||
Audio and Video Products - 2.5% | |||||||||||
2,268,200 | Sony Corp.# | 113,942,862 | |||||||||
Automotive - Cars and Light Trucks - 3.5% | |||||||||||
1,153,784 | BMW A.G.# | 62,810,077 | |||||||||
7,386,900 | Nissan Motor Company, Ltd.# | 97,116,667 | |||||||||
159,926,744 | |||||||||||
Automotive - Truck Parts and Equipment - Original - 0% | |||||||||||
144,600 | TI Automotive, Ltd.*,ß,oo | 0 | |||||||||
Brewery - 0.4% | |||||||||||
118,560 | Hite Brewery Company, Ltd.# | 15,586,768 | |||||||||
Broadcast Services and Programming - 0.7% | |||||||||||
1,558,060 | Grupo Televisa S.A. (ADR) | 33,030,872 | |||||||||
Building - Residential and Commercial - 1.3% | |||||||||||
1,043,285 | Desarrolladora Homex S.A. (ADR)*,# | 39,978,681 | |||||||||
1,609,500 | Rossi Residencial S.A. | 16,966,459 | |||||||||
56,945,140 | |||||||||||
Commercial Banks - 7.7% | |||||||||||
1,323,237 | Anglo Irish Bank Corporation PLC | 21,785,732 | |||||||||
26,611,717 | Banco De Oro | 18,246,566 | |||||||||
495,960 | Banco De Oro (GDR)* | 6,801,843 | |||||||||
1,911,640 | Banco Marcro Bansud S.A. (ADR)* | 44,292,698 | |||||||||
1,850,600 | Banco Nossa Caixa S.A. | 41,764,859 | |||||||||
979,314 | Commerzbank A.G.# | 40,462,926 | |||||||||
382,905 | Julius Baer Holding, Ltd.# | 36,709,728 | |||||||||
318,560 | Kookmin Bank | 28,539,355 | |||||||||
2,632 | Mitsubishi UFJ Financial Group, Inc. | 41,376,015 | |||||||||
4,733 | Mizuho Financial Group, Inc.# | 40,361,331 | |||||||||
2,834,764 | Punjab National Bank, Ltd. | 26,412,551 | |||||||||
346,753,604 | |||||||||||
Computers - 1.4% | |||||||||||
834,413 | Research In Motion, Ltd. (U.S. Shares)* | 63,941,068 | |||||||||
Computers - Peripheral Equipment - 0.5% | |||||||||||
559,480 | Logitech International S.A.* | 23,232,721 | |||||||||
Cosmetics and Toiletries - 1.3% | |||||||||||
704,680 | LG Household & Health Care, Ltd. | 56,257,850 | |||||||||
Distribution/Wholesale - 4.0% | |||||||||||
11,738,500 | Esprit Holdings, Ltd.# | 93,716,631 | |||||||||
36,040,000 | Li & Fung, Ltd. | 85,529,516 | |||||||||
179,246,147 | |||||||||||
Diversified Financial Services - 0.1% | |||||||||||
9,883,152 | Reliance Capital Ventures, Ltd.* | 5,667,955 | |||||||||
Diversified Minerals - 1.3% | |||||||||||
32,053,350 | Caemi Mineracao e Metalurgica S.A. | 58,976,935 |
Shares or Principal Amount | Value | ||||||||||
Diversified Operations - 5.6% | |||||||||||
883,600 | Bradespar S.A.* | $ | 35,246,622 | ||||||||
16,224,000 | China Resources Enterprise, Ltd.# | 34,735,970 | |||||||||
680,067 | Louis Vuitton Moet Hennessy S.A.# | 71,598,192 | |||||||||
49,821,000 | Melco International Development, Ltd. | 112,129,861 | |||||||||
253,710,645 | |||||||||||
Electric - Distribution - 0.5% | |||||||||||
2,780,900 | Equatorial Energia S.A.*,£ | 20,653,546 | |||||||||
Electric Products - Miscellaneous - 1.8% | |||||||||||
12,672,000 | Toshiba Corp.# | 80,685,022 | |||||||||
Electronic Components - Semiconductors - 6.4% | |||||||||||
34,457,540 | ARM Holdings PLC | 85,455,805 | |||||||||
14,857,000 | Chartered Semiconductor Manufacturing, Ltd.* | 16,916,060 | |||||||||
274,940 | Samsung Electronics Company, Ltd. | 187,724,088 | |||||||||
290,095,953 | |||||||||||
Energy - Alternate Sources - 0.8% | |||||||||||
1,084,900 | Suntech Power Holdings Company, Ltd. (ADR)*,# | 37,201,221 | |||||||||
Finance - Investment Bankers/Brokers - 1.9% | |||||||||||
5,314,000 | Mitsubishi UFJ Securities Company, Ltd.# | 83,724,727 | |||||||||
Finance - Mortgage Loan Banker - 1.2% | |||||||||||
1,843,110 | Housing Development Finance Corporation, Ltd. | 53,349,619 | |||||||||
Food - Retail - 1.4% | |||||||||||
1,090,814 | Metro A.G.# | 61,735,360 | |||||||||
Gas - Distribution - 0.1% | |||||||||||
9,883,152 | Reliance Natural Resources, Ltd.* | 6,504,391 | |||||||||
Hotels and Motels - 0.5% | |||||||||||
410,570 | Four Seasons Hotels, Inc. | 22,178,991 | |||||||||
Insurance Brokers - 0.9% | |||||||||||
1,185,770 | Willis Group Holdings, Ltd. | 41,679,816 | |||||||||
Internet Gambling - 0.9% | |||||||||||
9,969,022 | IG Group Holdings PLC | 41,993,583 | |||||||||
Internet Security - 0.7% | |||||||||||
1,534,320 | Check Point Software Technologies, Ltd. (U.S. Shares)*,# | 29,689,092 | |||||||||
Investment Companies - 0.8% | |||||||||||
8,578,064 | SM Investments Corp. | 38,106,320 | |||||||||
Medical - Drugs - 1.4% | |||||||||||
420,611 | Roche Holding A.G.# | 64,675,470 | |||||||||
Medical Instruments - 1.4% | |||||||||||
3,738,774 | Elekta AB - Class B# | 61,727,798 | |||||||||
Metal - Diversified - 0.8% | |||||||||||
632,389 | Inco, Ltd.# | 35,673,516 | |||||||||
Mortgage Banks - 0.4% | |||||||||||
408,961 | Aareal Bank A.G.* | 19,286,135 | |||||||||
Multi-Line Insurance - 0.9% | |||||||||||
214,619 | Allianz A.G.# | 35,876,335 | |||||||||
1,065,000 | Ping An Insurance Group Company of China, Ltd. - Class H# | 2,932,654 | |||||||||
38,808,989 | |||||||||||
Oil - Field Services - 1.2% | |||||||||||
825,156 | Technip S.A.# | 52,103,171 |
See Notes to Schedules of Investments and Financial Statements.
Janus International & Global Funds April 30, 2006 15
Janus Overseas Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Oil Companies - Exploration and Production - 0.9% | |||||||||||
31,427 | Niko Resources, Ltd. | $ | 1,829,880 | ||||||||
1,306,311 | Western Oil Sands, Inc. - Class A* | 39,503,041 | |||||||||
41,332,921 | |||||||||||
Oil Companies - Integrated - 3.0% | |||||||||||
771,580 | Lukoil (ADR) | 69,905,148 | |||||||||
745,575 | Suncor Energy, Inc. | 63,844,507 | |||||||||
133,749,655 | |||||||||||
Oil Refining and Marketing - 4.9% | |||||||||||
9,883,152 | Reliance Industries, Ltd. | 222,073,765 | |||||||||
Paper and Related Products - 0.2% | |||||||||||
1,247,200 | Suzano Bahia Sul Papel e Celulose S.A. | 8,826,614 | |||||||||
Power Converters and Power Supply Equipment - 0.3% | |||||||||||
553,936 | Suzlon Energy, Ltd. | 15,540,434 | |||||||||
Public Thoroughfares - 1.6% | |||||||||||
3,981,600 | Companhia de Concessoes Rodoviarias | 34,912,928 | |||||||||
2,903,400 | Obrascon Huarte Lain Brasil S.A.* | 35,461,268 | |||||||||
70,374,196 | |||||||||||
Real Estate Management/Services - 1.8% | |||||||||||
3,804,000 | Mitsubishi Estate Company, Ltd.# | 83,185,878 | |||||||||
Real Estate Operating/Development - 5.9% | |||||||||||
78,415,800 | Ayala Land, Inc. | 17,795,957 | |||||||||
5,635,000 | Capitaland, Ltd. | 17,465,684 | |||||||||
90,066,000 | China Overseas Land & Investment, Ltd.# | 57,501,541 | |||||||||
4,839,500 | Cyrela Brazil Realty S.A. | 82,320,197 | |||||||||
2,748,390 | Gafisa S.A.* | 28,050,171 | |||||||||
13,019,000 | Hang Lung Properties, Ltd.# | 26,194,833 | |||||||||
3,310,000 | Sun Hung Kai Properties, Ltd.# | 37,824,668 | |||||||||
267,153,051 | |||||||||||
Rental Auto/Equipment - 0.1% | |||||||||||
234,700 | Localiza Rent a Car S.A. | 4,948,155 | |||||||||
Research and Development - 0.8% | |||||||||||
10,195,004 | Qinetiq PLC* | 37,461,127 | |||||||||
Semiconductor Equipment - 2.9% | |||||||||||
6,116,876 | ASML Holding N.V.* | 129,647,150 | |||||||||
Steel - Producers - 3.8% | |||||||||||
12,191,285 | Tata Steel, Ltd. | 172,184,931 | |||||||||
Sugar - 5.7% | |||||||||||
4,049,231 | Bajaj Hindusthan, Ltd. | 46,566,157 | |||||||||
1,009,400 | Bajaj Hindusthan, Ltd. (GDR) (144A)§ | 11,604,264 | |||||||||
13,335,458 | Balrampur Chini Mills, Ltd.£ | 55,866,362 | |||||||||
1,682,900 | Cosan S.A. Industria e Comercio* | 129,503,468 | |||||||||
456,173 | Shree Renuka Sugars, Ltd. | 14,286,648 | |||||||||
257,826,899 | |||||||||||
Telecommunication Services - 3.5% | |||||||||||
2,416,405 | Amdocs, Ltd. (U.S. Shares)* | 89,890,266 | |||||||||
9,883,152 | Reliance Communication Ventures, Ltd.* | 66,661,750 | |||||||||
156,552,016 | |||||||||||
Television - 1.0% | |||||||||||
4,771,961 | British Sky Broadcasting Group PLC | 45,728,610 | |||||||||
Transportation - Railroad - 1.8% | |||||||||||
1,289,500 | All America Latina Logistica (GDR) | 81,565,355 | |||||||||
Total Common Stock (cost $3,032,953,092) | 4,489,660,630 |
Shares or Principal Amount | Value | ||||||||||
Other Securities - 13.0% | |||||||||||
583,705,707 | State Street Navigator Securities Lending Prime Portfolio† | $ | 583,705,707 | ||||||||
2,008,588 | U.S. Treasury Notes/Bonds† | 2,008,588 | |||||||||
Total Other Securities (cost $585,714,295) | 585,714,295 | ||||||||||
Total Investments (total cost $3,618,667,387) – 112.4% | 5,075,374,925 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (12.4)% | (561,068,305 | ) | |||||||||
Net Assets – 100% | $ | 4,514,306,620 |
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Argentina | $ | 44,292,698 | 0.9 | % | |||||||
Bermuda | 305,716,452 | 6.0 | % | ||||||||
Brazil | 589,652,671 | 11.6 | % | ||||||||
Canada | 363,905,556 | 7.2 | % | ||||||||
Cayman Islands | 85,889,186 | 1.7 | % | ||||||||
China | 2,932,654 | 0.1 | % | ||||||||
France | 123,701,363 | 2.4 | % | ||||||||
Germany | 220,170,833 | 4.3 | % | ||||||||
Hong Kong | 268,386,873 | 5.3 | % | ||||||||
India | 696,718,827 | 13.7 | % | ||||||||
Ireland | 21,785,732 | 0.4 | % | ||||||||
Israel | 29,689,092 | 0.6 | % | ||||||||
Japan | 540,392,502 | 10.6 | % | ||||||||
Mexico | 73,009,553 | 1.4 | % | ||||||||
Netherlands | 129,647,150 | 2.6 | % | ||||||||
Philippines | 80,950,686 | 1.6 | % | ||||||||
Russia | 69,905,148 | 1.4 | % | ||||||||
Singapore | 34,381,744 | 0.7 | % | ||||||||
South Korea | 288,108,061 | 5.7 | % | ||||||||
Sweden | 61,727,798 | 1.2 | % | ||||||||
Switzerland | 124,617,919 | 2.5 | % | ||||||||
United Kingdom | 334,078,132 | 6.6 | % | ||||||||
United States†† | 585,714,295 | 11.5 | % | ||||||||
Total | $ | 5,075,374,925 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (0% excluding Short-Term Securities and Other Securities)
See Notes to Schedules of Investments and Financial Statements.
16 Janus International & Global Funds April 30, 2006
Janus Worldwide Fund (unaudited)
Ticker: JAWWX
Fund Snapshot
This global fund offers geographic diversification in a single portfolio.
Performance Overview
For the six months ended April 30, 2006, Janus Worldwide Fund returned 11.97%, underperforming its benchmark, the Morgan Stanley Capital International (MSCI) World IndexSM, which gained 16.01% for the same period.
Jason Yee
portfolio manager
The world's equity markets gained support during the period from generally healthy economic growth. The U.S. and European economies sustained economic expansions, Japanese business fundamentals improved, and emerging markets such as China and India continued to experience rapid growth. Nonetheless, these trends fueled higher inflation, especially in the energy and commodity markets. Indeed, the price of crude oil exceeded $70 per barrel in April, and showed no signs of significant easing. As inflation concerns mounted, central banks worldwide continued to tighten credit conditions. The U.S. Federal Reserve raised overnight rates by 100 basis points between the end of October and the end of April, while the European Central Bank increased its key lending rate by 50 basis points. Against this backdrop, long-term interest rates moved higher.
The current market environment continues to be characterized by earnings momentum and driven primarily by a handful of sectors and geographies. Investors seem to once again be chasing where performance is today rather than investing where performance will potentially be tomorrow. As Warren Buffett recently remarked, "What the wise man does in the beginning, fools do in the end. With any asset class that has a big move, first the fundamentals attract speculation, then the speculation becomes dominant." Especially in vogue today are the emerging markets and commodity stocks. These are both areas to which the Fund has limited exposure. We do not find the risk/reward profile particularly compelling at this time and generally are finding better opportunities elsewhere. While this positioning has, and may continue to, hurt performance in the short-term, we believe that the investments available in other areas of the market will prove to be more at tractive over the next few years.
Fund Composition
The Fund remained overweight relative to its benchmark in the consumer discretionary sector, particularly in retailing, consumer durables and media shares. It also carried an above-market weighting in diversified financial companies and healthcare equipment and services firms. In contrast, the Fund was underweight in consumer staples stocks, as well as in the energy, utilities, banking and technology areas.
Contributors Include Electronic Components, Select Technology, and Financial Services Stocks
The Fund's relative performance benefited from its above-market weighting and strong stock selection within the consumer discretionary sector. One of the strongest performers for the period was Dutch electronics conglomerate Koninklijke (Royal) Philips Electronics. Philips benefits from a strong presence in the semiconductor manufacturing market, as well as from its stake in other businesses, from high-end medical equipment and consumer electronics to lighting products and appliances. We have subsequently reduced our investment in Philips Electronics. While we still believe the company is undervalued, there are currently other risk/reward opportunities that we find more attractive.
Meanwhile, we built our stake in networking equipment manufacturer Cisco Systems, another top performer for the period. Cisco continued to report impressive financial results, fueled by exploding demand for infrastructure to deliver high-speed Internet service, voice communications and streaming video. Many years after the Internet "bubble", Cisco is trading at an undemanding valuation relative to its long-term growth prospects. As an industry leader, we believe the company is well-positioned to benefit from both cyclical and secular trends in the networking equipment area.
Financial services powerhouse JP Morgan Chase was another strong contributor. Under the guidance of seasoned financial industry veteran, CEO Jamie Dimon, JP Morgan began to capitalize on the cost synergies created through its 2004 merger with Bank One. In April, the company reported a 35% year-over-year increase in its net income, fueled by improving fee-based revenues and investment-banking returns.
Detractors Include Select Technology, Insurance, Media, and Consumer Discretionary Stocks
Technology was the weakest overall sector, due in part to pressure on hardware maker Dell, which was the Fund's biggest individual detractor for the period. Despite reporting better-than-expected financial results in February, Dell has been overshadowed by concerns over increasing margin pressure in its core business. In spite of its recent underperformance, we have increased our position in Dell. In our opinion, it is rare to be able to invest in such a competitively advantaged business model for such a reasonable valuation, and we believe this is currently one of the most attractive investments in the Fund.
Our stake in U.K.-based insurer Willis Group also weighed on performance. The world's third-largest insurance brokerage firm, Willis lost ground as rising expenses threatened near-term earnings prospects. However, we believe that 2006 will
Janus International & Global Funds April 30, 2006 17
Janus Worldwide Fund (unaudited)
begin to see attractive returns on the investments the company is making in their business and people.
A number of consumer discretionary stocks also hindered results. These included online retailer Amazon.com, which faced concerns that upfront spending increases could jeopardize its near-term profitability. Nonetheless, this leading company continues to reinvest in improving its services and website features, and offers an attractive mix of low capital requirements and solid return potential.
Our stake in cable television provider Liberty Global also hurt performance. The media distribution business continues to be out of favor due to technological disruption of existing business models. We believe much of this pessimism has been discounted in the stock. Despite the vast complexity of the business operations around the globe, the strong management team continues to execute on their business strategy of profitably growing or consolidating select international cable markets in Europe and Japan.
Market Outlook
We remain cautiously optimistic on the outlook for the remainder of the year. In particular, we are confident in our rigorous stock selection process, and in our ability to identify promising investments that may be trading at a discount to their fundamental business worth. While it may take some time for the broader market to recognize the value of the shares we own, we believe that our research efforts ultimately will be rewarded. By purchasing good businesses at reasonable prices, we continue our efforts to generate solid long-term results for our shareholders.
Thank you for your continued support.
Janus Worldwide Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Koninklijke (Royal) Philips Electronics N.V. Global electronics company - U.S. | 1.30% | ||||||
JP Morgan Chase & Co. Global financial services company - U.S. | 1.11% | ||||||
Reliance Industries, Ltd. Industrial conglomerate with multiple lines of business - India | 1.11% | ||||||
Syngenta A.G. Agricultural chemicals company - Switzerland | 0.72% | ||||||
Louis Vuitton Moet Hennessy S.A. Diversified luxury goods conglomerate - France | 0.59% |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Dell, Inc. Worldwide computer systems and services - U.S. | (0.54 | %) | |||||
Willis Group Holdings, Ltd. Insurance brokerage and risk management consulting services provider - U.S. | (0.34 | %) | |||||
Amazon.com, Inc. Online retailer - U.S. | (0.33 | %) | |||||
Liberty Global, Inc. - Class A Broadband distribution and video programming services provider - U.S. | (0.25 | %) | |||||
Vodafone Group PLC Mobile telecommunications services provider - England | (0.21 | %) |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Consumer Durables & Apparel | 2.74 | % | 10.35 | % | 2.24 | % | |||||||||
Diversified Financials | 2.29 | % | 9.48 | % | 6.56 | % | |||||||||
Materials | 1.41 | % | 5.52 | % | 5.66 | % | |||||||||
Energy | 1.12 | % | 1.84 | % | 9.43 | % | |||||||||
Media | 1.10 | % | 13.91 | % | 3.01 | % |
5 Lowest Contributors/Detractors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Primary Benchmark Weighting | |||||||||||||
Software & Services | (0.26 | %) | 1.84 | % | 3.85 | % | |||||||||
Healthcare Equipment & Services | (0.17 | %) | 4.72 | % | 3.05 | % | |||||||||
Technology Hardware & Equipment | (0.06 | %) | 4.65 | % | 5.51 | % | |||||||||
Food & Staples Retailing | 0.00 | % | 0.00 | % | 2.12 | % | |||||||||
Semiconductors & Semiconductor Equipment | 0.06 | % | 0.65 | % | 1.95 | % |
18 Janus International & Global Funds April 30, 2006
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2006 | |||||||
British Sky Broadcasting Group PLC Television | 5.6 | % | |||||
Willis Group Holdings, Ltd. Insurance Brokers | 4.9 | % | |||||
JP Morgan Chase & Co. Finance - Investment Bankers/Brokers | 4.5 | % | |||||
Koninklijke (Royal) Philips Electronics N.V. Electronic Components - Miscellaneous | 3.7 | % | |||||
Tyco International, Ltd. (U.S. Shares) Diversified Operations | 3.5 | % | |||||
22.2 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2006 |
Emerging markets comprised 5.9% of total net assets.
5 Largest Country Allocations – (% of Investment Securities)
As of April 30, 2006 | As of October 31, 2005 | ||||||
![]() | ![]() | ||||||
Janus International & Global Funds April 30, 2006 19
Janus Worldwide Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | |||||||||||||||||||
Janus Worldwide Fund | 11.97 | % | 16.89 | % | (1.58 | %) | 6.77 | % | 11.07 | % | |||||||||||||
Morgan Stanley Capital International World IndexSM | 16.01 | % | 24.32 | % | 5.51 | % | 7.37 | % | 8.57 | % | |||||||||||||
Lipper Quartile | N/A | 4 | th | 4 | th | 3 | rd | 2 | nd | ||||||||||||||
Lipper Ranking - based on total return for Global Funds | N/A** | 339/362 | 217/220 | 56/82 | 5/17 |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes 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.
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.
*The Fund's inception date – May 15, 1991
**The Fund's fiscal year-to-date Lipper ranking is not available.
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 "Explanations of Charts, Tables and Financial Statements."
The Fund's portfolio may differ significantly from the securities held in the index. The index is not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
Foreign investing involves special risks such as currency fluctuations and political uncertainty.
There is no assurance that the investment process will consistently lead to successful investing.
A 2% redemption fee may be imposed on shares held for 3 months or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,119.70 | $ | 4.73 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.33 | $ | 4.51 |
*Expenses are equal to the annualized expense ratio of 0.90%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
20 Janus International & Global Funds April 30, 2006
Janus Worldwide Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Common Stock - 99.9% | |||||||||||
Advertising Services - 1.6% | |||||||||||
5,945,984 | WPP Group PLC | $ | 73,405,871 | ||||||||
Agricultural Chemicals - 3.3% | |||||||||||
878,995 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares)# | 83,223,246 | |||||||||
503,958 | Syngenta A.G.*,# | 70,298,931 | |||||||||
153,522,177 | |||||||||||
Apparel Manufacturers - 1.8% | |||||||||||
9,908,510 | Burberry Group PLC | 85,193,889 | |||||||||
Audio and Video Products - 1.2% | |||||||||||
1,108,100 | Sony Corp. | 55,665,323 | |||||||||
Automotive - Cars and Light Trucks - 3.7% | |||||||||||
1,260,583 | BMW A.G. | 68,624,037 | |||||||||
537,300 | Hyundai Motor Company, Ltd. | 47,224,523 | |||||||||
4,441,214 | Nissan Motor Company, Ltd. | 58,389,297 | |||||||||
174,237,857 | |||||||||||
Broadcast Services and Programming - 1.7% | |||||||||||
2,845,160 | Liberty Global, Inc. - Class A*,# | 58,923,264 | |||||||||
970,755 | Liberty Global, Inc. - Class C* | 19,385,977 | |||||||||
78,309,241 | |||||||||||
Building - Residential and Commercial - 2.1% | |||||||||||
579,400 | Centex Corp.# | 32,214,640 | |||||||||
609,780 | Lennar Corp.# | 33,495,216 | |||||||||
881,235 | Pulte Homes, Inc.# | 32,914,127 | |||||||||
98,623,983 | |||||||||||
Casino Hotels - 1.1% | |||||||||||
620,725 | Harrah's Entertainment, Inc.# | 50,675,989 | |||||||||
Cellular Telecommunications - 2.6% | |||||||||||
311,900 | Hikari Tsushin, Inc. | 19,284,029 | |||||||||
44,240,883 | Vodafone Group PLC | 104,474,896 | |||||||||
123,758,925 | |||||||||||
Chemicals - Diversified - 1.4% | |||||||||||
1,166,800 | Shin-Etsu Chemical Company, Ltd. | 67,426,725 | |||||||||
Commercial Banks - 0.5% | |||||||||||
1,864,894 | ICICI Bank, Ltd.* | 23,957,035 | |||||||||
Computers - 3.5% | |||||||||||
6,229,510 | Dell, Inc.*,# | 163,213,162 | |||||||||
Distribution/Wholesale - 3.7% | |||||||||||
18,166,000 | Esprit Holdings, Ltd. | 145,031,845 | |||||||||
11,924,000 | Li & Fung, Ltd. | 28,297,834 | |||||||||
173,329,679 | |||||||||||
Diversified Minerals - 1.1% | |||||||||||
1,007,530 | Companhia Vale do Rio Doce (ADR)# | 51,907,946 | |||||||||
Diversified Operations - 5.7% | |||||||||||
2,478,000 | Hutchison Whampoa, Ltd. | 24,322,005 | |||||||||
731,746 | Louis Vuitton Moet Hennessy S.A.# | 77,039,013 | |||||||||
6,383,955 | Tyco International, Ltd. (U.S. Shares)# | 168,217,214 | |||||||||
269,578,232 | |||||||||||
E-Commerce/Products - 2.0% | |||||||||||
2,725,455 | Amazon.com, Inc.*,# | 95,963,271 | |||||||||
E-Commerce/Services - 6.6% | |||||||||||
1,411,715 | eBay, Inc.*,# | 48,577,113 | |||||||||
5,413,481 | Expedia, Inc.* | 100,961,421 | |||||||||
5,482,755 | IAC/InterActiveCorp* | 158,287,137 |
Shares or Principal Amount | Value | ||||||||||
307,825,671 | |||||||||||
Electronic Components - Miscellaneous - 3.7% | |||||||||||
4,971,412 | Koninklijke (Royal) Philips Electronics N.V.# | $ | 171,538,300 | ||||||||
Electronic Components - Semiconductors - 0.9% | |||||||||||
64,990 | Samsung Electronics Company, Ltd. | 44,374,003 | |||||||||
Enterprise Software/Services - 0.7% | |||||||||||
1,325,390 | CA, Inc.# | 33,611,890 | |||||||||
Entertainment Software - 0.5% | |||||||||||
1,761,450 | Activision, Inc.*,# | 24,994,976 | |||||||||
Finance - Consumer Loans - 2.0% | |||||||||||
768,610 | Acom Company, Ltd. | 44,821,239 | |||||||||
779,350 | Promise Company, Ltd. | 48,048,452 | |||||||||
92,869,691 | |||||||||||
Finance - Investment Bankers/Brokers - 8.9% | |||||||||||
1,639,745 | Citigroup, Inc. | 81,905,263 | |||||||||
4,658,073 | JP Morgan Chase & Co. | 211,383,352 | |||||||||
3,743,000 | Mitsubishi UFJ Securities Company, Ltd. | 58,972,836 | |||||||||
574,221 | UBS A.G.# | 68,061,996 | |||||||||
420,323,447 | |||||||||||
Finance - Mortgage Loan Banker - 1.2% | |||||||||||
440,370 | Fannie Mae | 22,282,722 | |||||||||
1,246,142 | Housing Development Finance Corporation, Ltd. | 36,070,121 | |||||||||
58,352,843 | |||||||||||
Health Care Cost Containment - 0.5% | |||||||||||
483,980 | McKesson Corp. | 23,516,588 | |||||||||
Insurance Brokers - 4.9% | |||||||||||
6,520,585 | Willis Group Holdings, Ltd.£ | 229,198,563 | |||||||||
Internet Security - 0.5% | |||||||||||
1,297,030 | Symantec Corp.* | 21,245,351 | |||||||||
Investment Companies - 0.2% | |||||||||||
424,887 | RHJ International* | 10,559,994 | |||||||||
Medical - Drugs - 2.1% | |||||||||||
717,645 | Merck & Company, Inc. | 24,701,341 | |||||||||
1,143,995 | Pfizer, Inc. | 28,977,393 | |||||||||
302,172 | Roche Holding A.G.# | 46,463,635 | |||||||||
100,142,369 | |||||||||||
Medical - HMO - 1.8% | |||||||||||
525,780 | Aetna, Inc. | 20,242,530 | |||||||||
417,895 | Coventry Health Care, Inc.* | 20,756,845 | |||||||||
838,170 | UnitedHealth Group, Inc. | 41,690,575 | |||||||||
82,689,950 | |||||||||||
Medical - Hospitals - 0.9% | |||||||||||
1,956,565 | Health Management Associates, Inc. - Class A# | 40,520,461 | |||||||||
Multi-Line Insurance - 0.5% | |||||||||||
148,185 | Allianz A.G. | 24,771,034 | |||||||||
Multimedia - 2.3% | |||||||||||
3,847,440 | Walt Disney Co.# | 107,574,422 | |||||||||
Networking Products - 3.0% | |||||||||||
6,626,425 | Cisco Systems, Inc.* | 138,823,604 | |||||||||
Oil Refining and Marketing - 1.6% | |||||||||||
3,254,858 | Reliance Industries, Ltd. | 73,136,442 | |||||||||
Property and Casualty Insurance - 3.0% | |||||||||||
7,202 | Millea Holdings, Inc. | 143,578,273 |
See Notes to Schedules of Investments and Financial Statements.
Janus International & Global Funds April 30, 2006 21
Janus Worldwide Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Real Estate Management/Services - 0.8% | |||||||||||
1,743,000 | Mitsubishi Estate Company, Ltd. | $ | 38,115,927 | ||||||||
Real Estate Operating/Development - 0.5% | |||||||||||
7,981,000 | Capitaland, Ltd. | 24,737,112 | |||||||||
Reinsurance - 2.5% | |||||||||||
39,820 | Berkshire Hathaway, Inc. - Class B*,# | 117,548,640 | |||||||||
Retail - Apparel and Shoe - 1.5% | |||||||||||
1,690,016 | Industria de Diseno Textil S.A. | 68,761,375 | |||||||||
Schools - 0.5% | |||||||||||
460,870 | Apollo Group, Inc. - Class A*,# | 25,181,937 | |||||||||
Semiconductor Equipment - 1.0% | |||||||||||
2,187,109 | ASML Holding N.V.* | 46,355,762 | |||||||||
Soap and Cleaning Preparations - 1.1% | |||||||||||
1,469,481 | Reckitt Benckiser PLC | 53,566,733 | |||||||||
Telephone - Integrated - 1.0% | |||||||||||
1,819,375 | Sprint Nextel Corp. | 45,120,500 | |||||||||
Television - 5.6% | |||||||||||
27,530,080 | British Sky Broadcasting Group PLC | 263,814,454 | |||||||||
Tobacco - 0.3% | |||||||||||
169,815 | Altria Group, Inc. | 12,423,665 | |||||||||
Transportation - Services - 1.3% | |||||||||||
767,710 | United Parcel Service, Inc. - Class B | 62,238,250 | |||||||||
Web Portals/Internet Service Providers - 1.0% | |||||||||||
1,448,725 | Yahoo!, Inc.* | 47,489,206 | |||||||||
Total Common Stock (cost $4,043,434,516) | 4,693,770,738 |
Shares or Principal Amount | Value | ||||||||||
Other Securities - 10.8% | |||||||||||
505,960,521 | State Street Navigator Securities Lending Prime Portfolio† (cost $505,960,521) | $ | 505,960,521 | ||||||||
Total Investments (total cost $4,549,395,037) – 110.7% | 5,199,731,259 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (10.7)% | (501,596,642 | ) | |||||||||
Net Assets – 100% | $ | 4,698,134,617 |
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Belgium | $ | 10,559,994 | 0.2 | % | |||||||
Bermuda | 570,745,456 | 11.0 | % | ||||||||
Brazil | 51,907,946 | 1.0 | % | ||||||||
Canada | 83,223,246 | 1.6 | % | ||||||||
France | 77,039,013 | 1.5 | % | ||||||||
Germany | 93,395,071 | 1.8 | % | ||||||||
Hong Kong | 24,322,005 | 0.5 | % | ||||||||
India | 133,163,598 | 2.5 | % | ||||||||
Japan | 534,302,101 | 10.3 | % | ||||||||
Netherlands | 217,894,062 | 4.2 | % | ||||||||
Singapore | 24,737,112 | 0.5 | % | ||||||||
South Korea | 91,598,526 | 1.8 | % | ||||||||
Spain | 68,761,375 | 1.3 | % | ||||||||
Switzerland | 184,824,562 | 3.5 | % | ||||||||
United Kingdom | 580,455,843 | 11.1 | % | ||||||||
United States†† | 2,452,801,349 | 47.2 | % | ||||||||
Total | $ | 5,199,731,259 | 100.0 | % |
††Includes Other Securities (37.4% excluding Other Securities)
See Notes to Schedules of Investments and Financial Statements.
22 Janus International & Global Funds April 30, 2006
Statements of Assets and Liabilities
As of April 30, 2006 (unaudited) (all numbers in thousands except net asset value per share) | Janus Global Opportunities Fund | Janus Overseas Fund | Janus Worldwide Fund | ||||||||||||
Assets: | |||||||||||||||
Investments at cost(1) | $ | 151,074 | $ | 3,618,667 | $ | 4,549,395 | |||||||||
Investments at value(1) | $ | 178,972 | $ | 5,075,375 | $ | 5,199,731 | |||||||||
Cash | 629 | – | – | ||||||||||||
Cash denominated in foreign currency(2) | 86 | 8,620 | 4,203 | ||||||||||||
Receivables: | |||||||||||||||
Investments sold | – | 107,437 | 25,035 | ||||||||||||
Fund shares sold | 113 | 11,068 | – | ||||||||||||
Dividends | 303 | 3,850 | 8,334 | ||||||||||||
Interest | 9 | 136 | 60 | ||||||||||||
Other assets | 1 | 61 | 41 | ||||||||||||
Total Assets | 180,113 | 5,206,547 | 5,237,404 | ||||||||||||
Liabilities: | |||||||||||||||
Payables: | |||||||||||||||
Collateral for securities loaned (Note 1) | 15,004 | 585,714 | 505,961 | ||||||||||||
Due to custodian | – | 17,326 | 10,924 | ||||||||||||
Investments purchased | – | 69,928 | 5,163 | ||||||||||||
Fund shares repurchased | 287 | 716 | 13,113 | ||||||||||||
Dividends and distributions | – | – | – | ||||||||||||
Advisory fees | 87 | 2,260 | 2,330 | ||||||||||||
Transfer agent fees and expenses | 48 | 696 | 959 | ||||||||||||
Non-interested Trustees' fees and expenses | 4 | 1 | 6 | ||||||||||||
Foreign tax liability | 214 | 15,280 | – | ||||||||||||
Accrued expenses | 66 | 319 | 813 | ||||||||||||
Total Liabilities | 15,710 | 692,240 | 539,269 | ||||||||||||
Net Assets | $ | 164,403 | $ | 4,514,307 | $ | 4,698,135 | |||||||||
Net Assets Consist of: | |||||||||||||||
Capital (par value and paid-in surplus)* | $ | 122,700 | $ | 3,650,132 | $ | 9,520,880 | |||||||||
Undistributed net investment income/(loss)* | 215 | 36,694 | 32,134 | ||||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | 13,795 | (614,235 | ) | (5,505,597 | ) | ||||||||||
Unrealized appreciation/(depreciation) of investments and foreign currency translations | 27,693 | (3) | 1,441,716 | (3) | 650,718 | ||||||||||
Total Net Assets | $ | 164,403 | $ | 4,514,307 | $ | 4,698,135 | |||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 10,684 | 113,588 | 102,473 | ||||||||||||
Net Asset Value Per Share | $ | 15.39 | $ | 39.74 | $ | 45.85 |
*See Note 4 in the Notes to the Financial Statements.
(1) Investments at cost and value include $14,517,893, $559,213,912 and $488,019,172 of securities loaned for Janus Global Opportunities Fund, Janus Overseas Fund and Janus Worldwide Fund, respectively (Note 1).
(2) Includes cost of $84,259, $8,596,255 and $4,119,495 for Janus Global Opportunities Fund, Janus Overseas Fund and Janus Worldwide Fund, respectively.
(3) Net of foreign taxes on investments of $214,151 and $15,280,423 for Janus Global Opportunities Fund and Janus Overseas Fund, respectively.
See Notes to Financial Statements.
Janus International & Global Funds April 30, 2006 23
Statements of Operations
For the six-month period ended April 30, 2006 (unaudited) (all numbers in thousands) | Janus Global Opportunities Fund | Janus Overseas Fund | Janus Worldwide Fund | ||||||||||||
Investment Income: | |||||||||||||||
Interest | $ | 37 | $ | 772 | $ | 1,002 | |||||||||
Securities lending income | 37 | 311 | 274 | ||||||||||||
Dividends | 1,166 | 66,242 | 55,813 | ||||||||||||
Dividends from affiliate | – | – | 3,758 | ||||||||||||
Foreign tax withheld | (29 | ) | (1,209 | ) | (1,155 | ) | |||||||||
Total Investment Income | 1,211 | 66,116 | 59,692 | ||||||||||||
Expenses: | |||||||||||||||
Advisory fees | 549 | 10,864 | 14,615 | ||||||||||||
Transfer agent fees and expenses | 248 | 3,535 | 5,647 | ||||||||||||
Registration fees | 14 | 87 | 24 | ||||||||||||
Postage and mailing expenses | 24 | 67 | 145 | ||||||||||||
Custodian fees | 9 | 450 | 260 | ||||||||||||
Professional fees | 18 | 20 | 34 | ||||||||||||
Non-interested Trustees' fees and expenses | 12 | 45 | 75 | ||||||||||||
Printing expenses | 39 | 69 | 199 | ||||||||||||
Proxy expenses | 26 | 295 | 738 | ||||||||||||
Other expenses | 31 | 77 | 120 | ||||||||||||
Non-recurring costs (Note 2) | – | – | – | ||||||||||||
Costs assumed by Janus Capital Management LLC (Note 2) | – | – | – | ||||||||||||
Total Expenses | 970 | 15,509 | 21,857 | ||||||||||||
Expense and Fee Offset | (14 | ) | (129 | ) | (277 | ) | |||||||||
Net Expenses | 956 | 15,380 | 21,580 | ||||||||||||
Net Investment Income/(Loss) | 255 | 50,736 | 38,112 | ||||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | |||||||||||||||
Net realized gain/(loss) from securities transactions | 21,952 | 369,692 | 412,237 | ||||||||||||
Net realized gain/(loss) from foreign currency transactions | (10 | ) | (4,099 | )(1) | (1,929 | ) | |||||||||
Change in net unrealized appreciation or depreciation of investments and foreign currency translations | (3,153 | )(2) | 727,578 | (2) | 110,630 | ||||||||||
Payment from affiliate (Note 2) | – | 44 | 13 | ||||||||||||
Net Gain/(Loss) on Investments | 18,789 | 1,093,215 | 520,951 | ||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 19,044 | $ | 1,143,951 | $ | 559,063 |
(1) Net of capital gain taxes on investments of $1,662,822 for Janus Overseas Fund.
(2) Net of foreign taxes on investments of $214,151 and $15,280,423 for Janus Global Opportunities Fund and Janus Overseas Fund, respectively.
See Notes to Financial Statements.
24 Janus International & Global Funds April 30, 2006
Statements of Changes in Net Assets
For the six-month period ended April 30, 2006 (unaudited) and the fiscal year ended October 31, 2005 | Janus Global Opportunities Fund | Janus Overseas Fund | Janus Worldwide Fund | ||||||||||||||||||||||||
(all numbers in thousands) | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||||
Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | $ | 255 | $ | 1,366 | $ | 50,736 | $ | 19,929 | $ | 38,112 | $ | 53,703 | |||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 21,942 | 16,029 | 365,593 | 309,470 | 410,308 | 522,026 | |||||||||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments and foreign currency translations | (3,153 | ) | (1,257 | ) | 727,578 | 307,038 | 110,630 | 42,790 | |||||||||||||||||||
Payment from affiliate (Note 2) | – | 5 | 44 | 1 | 13 | 1 | |||||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 19,044 | 16,143 | 1,143,951 | 636,438 | 559,063 | 618,520 | |||||||||||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||||||||||
Net investment income* | (1,352 | ) | (414 | ) | (25,913 | ) | (21,691 | ) | (56,798 | ) | (53,489 | ) | |||||||||||||||
Net realized gain/(loss) from investment transactions* | – | – | – | – | – | – | |||||||||||||||||||||
Net Increase/(Decrease) from Dividends and Distributions | (1,352 | ) | (414 | ) | (25,913 | ) | (21,691 | ) | (56,798 | ) | (53,489 | ) | |||||||||||||||
Capital Share Transactions: | |||||||||||||||||||||||||||
Shares sold | 9,570 | 45,661 | 1,060,269 | 444,629 | 75,590 | 193,894 | |||||||||||||||||||||
Redemption fees | 7 | 29 | 296 | 163 | 57 | 164 | |||||||||||||||||||||
Reinvested dividends and distributions | 1,330 | 407 | 25,301 | 21,232 | 55,607 | 52,441 | |||||||||||||||||||||
Shares repurchased | (41,756 | ) | (91,680 | ) | (244,218 | ) | (616,330 | ) | (893,053 | ) | (2,928,182 | ) | |||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | (30,849 | ) | (45,583 | ) | 841,648 | (150,306 | ) | (761,799 | ) | (2,681,683 | ) | ||||||||||||||||
Net Increase/(Decrease) in Net Assets | (13,157 | ) | (29,854 | ) | 1,959,686 | 464,441 | (259,534 | ) | (2,116,652 | ) | |||||||||||||||||
Net Assets: | |||||||||||||||||||||||||||
Beginning of period | 177,560 | 207,414 | 2,554,621 | 2,090,180 | 4,957,669 | 7,074,321 | |||||||||||||||||||||
End of period | $ | 164,403 | $ | 177,560 | $ | 4,514,307 | $ | 2,554,621 | $ | 4,698,135 | $ | 4,957,669 | |||||||||||||||
Undistributed Net Investment Income/(Loss)* | $ | 215 | $ | 1,312 | $ | 36,694 | $ | 11,872 | $ | 32,134 | $ | 50,820 |
*See Note 4 in Notes to Financial Statements.
See Notes to Financial Statements.
Janus International & Global Funds April 30, 2006 25
Financial Highlights
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) | Janus Global Opportunities Fund | ||||||||||||||||||||||||||
and through each fiscal year or period ended October 31 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001(1) | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 13.91 | $ | 12.93 | $ | 11.66 | $ | 8.64 | $ | 9.68 | $ | 10.00 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .03 | .10 | .03 | .03 | .03 | .02 | |||||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 1.56 | .91 | 1.27 | 3.02 | (1.04 | ) | (.34 | ) | |||||||||||||||||||
Total from Investment Operations | 1.59 | 1.01 | 1.30 | 3.05 | (1.01 | ) | (.32 | ) | |||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.11 | ) | (.03 | ) | (.03 | ) | (.04 | ) | (.02 | ) | – | ||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | (.01 | ) | – | ||||||||||||||||||||
Redemption fees | – | (2) | – | (2) | – | (2) | .01 | N/A | N/A | ||||||||||||||||||
Payment from affiliate | – | – | (3) | – | – | – | – | ||||||||||||||||||||
Total Distributions and Other | (.11 | ) | (.03 | ) | (.03 | ) | (.03 | ) | (.03 | ) | – | ||||||||||||||||
Net Asset Value, End of Period | $ | 15.39 | $ | 13.91 | $ | 12.93 | $ | 11.66 | $ | 8.64 | $ | 9.68 | |||||||||||||||
Total Return** | 11.47 | % | 7.78 | %(4) | 11.18 | % | 35.51 | % | (10.59 | )% | (3.10 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 164,403 | $ | 177,560 | $ | 207,414 | $ | 143,659 | $ | 148,890 | $ | 63,425 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 173,017 | $ | 218,871 | $ | 175,110 | $ | 132,935 | $ | 155,411 | $ | 54,832 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6) | 1.13 | % | 1.03 | % | 1.09 | % | 1.17 | % | 1.19 | % | 1.52 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5) | 1.11 | % | 1.02 | % | 1.09 | % | 1.16 | % | 1.16 | % | 1.50 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.30 | % | 0.62 | % | 0.24 | % | 0.27 | % | 0.40 | % | 0.64 | % | |||||||||||||||
Portfolio Turnover Rate*** | 53 | % | 36 | % | 37 | % | 31 | % | 84 | % | 0 | % | |||||||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) | Janus Overseas Fund | ||||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 28.42 | $ | 21.62 | $ | 19.50 | $ | 15.44 | $ | 18.44 | $ | 33.44 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .47 | .21 | .18 | .24 | .15 | .28 | |||||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 11.13 | 6.82 | 2.18 | 3.98 | (3.05 | ) | (11.42 | ) | |||||||||||||||||||
Total from Investment Operations | 11.60 | 7.03 | 2.36 | 4.22 | (2.90 | ) | (11.14 | ) | |||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.28 | ) | (.23 | ) | (.24 | ) | (.16 | ) | (.10 | ) | (.20 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | (3.66 | ) | ||||||||||||||||||||
Redemption fees | – | (2) | – | (2) | – | (2) | – | (2) | N/A | N/A | |||||||||||||||||
Payment from affiliate | – | (3) | – | (3) | – | (3) | – | – | – | ||||||||||||||||||
Total Distributions and Other | (.28 | ) | (.23 | ) | (.24 | ) | (.16 | ) | (.10 | ) | (3.86 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 39.74 | $ | 28.42 | $ | 21.62 | $ | 19.50 | $ | 15.44 | $ | 18.44 | |||||||||||||||
Total Return** | 41.09 | %(4) | 32.74 | %(4) | 12.24 | %(4) | 27.62 | % | (15.78 | )% | (37.09 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 4,514,307 | $ | 2,554,621 | $ | 2,090,180 | $ | 2,811,437 | $ | 3,242,597 | $ | 4,988,637 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 3,423,277 | $ | 2,272,200 | $ | 2,496,896 | $ | 2,897,732 | $ | 4,445,864 | $ | 6,945,505 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6) | 0.91 | % | 0.90 | % | 0.93 | % | 0.94 | % | 0.91 | % | 0.87 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5) | 0.91 | % | 0.89 | % | 0.93 | % | 0.94 | % | 0.89 | % | 0.85 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.99 | % | 0.88 | % | 0.72 | % | 1.21 | % | 0.69 | % | 0.77 | % | |||||||||||||||
Portfolio Turnover Rate*** | 84 | % | 57 | % | 58 | % | 104 | % | 63 | % | 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) Fiscal period from June 29, 2001 (inception date) through October 31, 2001.
(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 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%.
(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%.
See Notes to Financial Statements.
26 Janus International & Global Funds April 30, 2006
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) | Janus Worldwide Fund | ||||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 41.41 | $ | 38.12 | $ | 37.34 | $ | 32.87 | $ | 40.17 | $ | 70.74 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .38 | .46 | .30 | .37 | .27 | .39 | |||||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 4.55 | 3.14 | .84 | 4.41 | (7.56 | ) | (24.04 | ) | |||||||||||||||||||
Total from Investment Operations | 4.93 | 3.60 | 1.14 | 4.78 | (7.29 | ) | (23.65 | ) | |||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.49 | ) | (.31 | ) | (.36 | ) | (.31 | ) | (.01 | ) | (.41 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | (6.51 | ) | ||||||||||||||||||||
Redemption fees | – | (1) | – | (1) | – | (1) | – | (1) | N/A | N/A | |||||||||||||||||
Payment from affiliate | – | (2) | – | (2) | – | (2) | – | – | – | ||||||||||||||||||
Total Distributions and Other | (.49 | ) | (.31 | ) | (.36 | ) | (.31 | ) | (.01 | ) | (6.92 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 45.85 | $ | 41.41 | $ | 38.12 | $ | 37.34 | $ | 32.87 | $ | 40.17 | |||||||||||||||
Total Return** | 11.97 | %(3) | 9.47 | %(3) | 3.06 | %(3) | 14.65 | % | (18.15 | )% | (36.56 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 4,698,135 | $ | 4,957,669 | $ | 7,074,321 | $ | 11,340,655 | $ | 13,465,168 | $ | 20,331,383 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 4,912,216 | $ | 5,984,293 | $ | 9,278,240 | $ | 12,123,565 | $ | 18,185,263 | $ | 27,993,000 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 0.90 | % | 0.85 | % | 0.92 | % | 0.93 | % | 0.87 | % | 0.87 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 0.89 | % | 0.85 | % | 0.92 | % | 0.92 | % | 0.86 | % | 0.85 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.56 | % | 0.90 | % | 0.61 | % | 0.99 | % | 0.62 | % | 0.53 | % | |||||||||||||||
Portfolio Turnover Rate*** | 56 | % | 33 | % | 120 | % | 108 | % | 73 | % | 78 | % |
*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 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 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%.
See Notes to Financial Statements.
Janus International & Global Funds April 30, 2006 27
Notes to Schedules of Investments (unaudited)
Lipper Global Funds | Funds that invest at least 25% of their portfolio 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. | ||||||
Morgan Stanley Capital International EAFE® Index | Is a market capitalization weighted index composed of companies representative of the market structure of 21 developed market countries in Europe, Australasia, and the Far East. | ||||||
Morgan Stanley Capital International EAFE® Growth Index | Is a subset of the Morgan Stanley Capital International EAFE® Index and contains constituents of the Morgan Stanley Capital International EAFE® Index, which are categorized as growth securities. | ||||||
Morgan Stanley Capital International World IndexSM | Is a market capitalization weighted index composed of companies representative of the market structure of 23 developed market countries in North America, Europe, and the Asia/Pacific Region. | ||||||
144A | Securities sold under Rule 144A of the Securities Act of 1933 are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the1933 Act. | ||||||
ADR | American Depositary Receipt | ||||||
GDR | Global Depositary Receipt | ||||||
PLC | Public Limited Company | ||||||
U.S. Shares | Securities of foreign companies trading on an American Stock Exchange | ||||||
* Non-income-producing security.
ß Security is illiquid.
# Loaned security; a portion or all of the security is on loan as of April 30, 2006.
† The security is purchased with the cash collateral received from Securities on Loan (Note 1).
ºº Schedule of Fair Valued Securities (as of April 30, 2006)
Value | Value as a % of Net Assets | ||||||||||
Janus Overseas Fund | |||||||||||
TI Automotive, Ltd. | $ | – | 0.0 | % |
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 activities fair valued pursuant to a systematic fair valuation model.
§ Schedule of Restricted and Illiquid Securities
Acquisition Date | Acquisition Cost | Value | Value as a % of Net Assets | ||||||||||||||||
Janus Overseas Fund | |||||||||||||||||||
Bajaj Hindusthan, Ltd. (GDR) (144A) | 1/27/06 | $ | 8,196,328 | $ | 11,604,264 | 0.3 | % |
The Funds have registration rights for certain restricted securities held as of April 30, 2006. The issuer incurs all registration costs.
28 Janus International & Global Funds April 30, 2006
£The Investment Company Act of 1940 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, 2006.
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/06 | |||||||||||||||||||||||||
Janus Overseas Fund | |||||||||||||||||||||||||||||||
Balrampur Chini Mills, Ltd. | 14,025,028 | $ | 47,657,059 | 689,570 | $ | 1,928,079 | $ | 908,430 | $ | – | $ | 55,866,362 | |||||||||||||||||||
China Construction Bank | – | – | 25,400,000 | 7,771,932 | 529,738 | – | – | ||||||||||||||||||||||||
Equatorial Energia S.A. | 2,780,900 | 20,200,942 | – | – | – | – | 20,653,546 | ||||||||||||||||||||||||
$ | 67,858,001 | $ | 9,700,011 | $ | 1,438,168 | $ | – | $ | 76,519,908 | ||||||||||||||||||||||
Janus Worldwide Fund | |||||||||||||||||||||||||||||||
Willis Group Holdings, Ltd. | – | $ | – | 2,353,120 | $ | 93,969,969 | $ | (13,405,048 | ) | $ | 3,725,620 | $ | 229,198,563 |
Janus International & Global Funds April 30, 2006 29
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 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 was 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 thirty-two funds. Each of the Funds 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.
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 co nverted 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. 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 and may be subject to withholding taxes in these 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 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. In addition, 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, 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. Cash collateral may also be invested in unaffiliated money market funds or other accounts.
State Street Bank and Trust Company (the "Lending Agent") may also invest the cash collateral in the State Street Navigator Securities Lending Prime Portfolio 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.
30 Janus International & Global Funds April 30, 2006
As of April 30, 2006, the following Funds had on loan securities valued as indicated:
Fund | Value at April 30, 2006 | ||||||
Janus Global Opportunities Fund | $ | 14,517,893 | |||||
Janus Overseas Fund | 559,213,912 | ||||||
Janus Worldwide Fund | 488,019,172 |
As of April 30, 2006, the following Funds received cash collateral for securities lending activity as indicated:
Fund | Cash Collateral at April 30, 2006 | ||||||
Janus Global Opportunities Fund | $ | 15,003,594 | |||||
Janus Overseas Fund | 585,714,295 | ||||||
Janus Worldwide Fund | 505,960,521 |
As of April 30, 2006, all cash collateral received was invested in the State Street Navigator Securities Lending Prime Portfolio, except for Janus Overseas Fund, which also invested $2,088,588 in U.S. Treasury notes and bonds.
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 respective 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 its Lending Agent. The Lending Agent may retain a portion of the interest earned. The cash collateral invested by the Lending Agent is disclosed in the Schedule of Investments. 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 of the Funds may be party to an interfund lending agreement between the Fund and other Janus Capital sponsored mutual funds, which permit it 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 a 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, 2006, there were no outstanding borrowing or lending arrangements for the Funds.
Forward Currency Transactions
The Funds may enter into forward currency contracts in order to reduce their exposure to changes in foreign currency exchange rates on their 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 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.
Foreign Currency Translations
The 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 translation 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 security transactions and income.
Foreign-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. As of April 30, 2006, there were no Funds invested in when-issued securities.
Janus International & Global Funds April 30, 2006 31
Notes to Financial Statements (unaudited) (continued)
Equity-Linked Structured Notes
The Funds may invest in equity-linked structured notes. Equity-linked structured notes are debt securities which combine the characteristics of common stock and the sale of an option. The return component is based upon the performance of a single equity security, a basket of equity securities, or an equity index and the sale of an option which is recognized as income. Equity-linked structured notes are typically offered in limited transactions to financial institutions by investment banks, examples of which include performance equity-linked redemption quarterly pay securities (''PERQS''), yield-enhanced securities (''YES''), and yield enhanced equity-linked debt securities (''YEELDS''). There is no guaranteed return of principal with these securities. The appreciation potential of these securities may be limited by a maximum payment or call right and can be influenced by many unpredictable factors.
Initial Public Offerings
The Funds may invest in initial public offerings ("IPOs"). IPOs and other investment techniques may have a magnified performance impact on a fund with a small asset base. The Funds may not experience similar performance as their assets grow.
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. 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.
Dividend Distributions
Each Fund generally declares and distributes 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.
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.
2. INVESTMENT ADVISORY AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
Each Fund pays a monthly advisory fee to Janus Capital based upon average daily net assets and calculated at the annual rate of 0.64% (0.60% for Janus Worldwide Fund).
Effective February 1, 2006 for Janus Worldwide Fund, the investment advisory fee rates changed from a fixed rate to a rate that adjusts upward or downward based upon the Fund's performance relative to a selected benchmark index. This change does not impact the current investment advisory fee until one year after the effective date when the performance adjustment takes effect.
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 of the Funds pays Janus Services LLC ("Janus Services"), a wholly-owned subsidiary of Janus Capital, 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.
A 2.00% redemption fee may be imposed on shares of the Funds held for three months 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 Janus Global Opportunities Fund, Janus Overseas Fund and Janus Worldwide Fund were $6,745, $296,372 and $56,910, respectively, for the six-month period ended April 30, 2006.
For the six-month period ended April 30, 2006, Janus Capital assumed $14,642 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
32 Janus International & Global Funds April 30, 2006
discussed in Note 6. These non-recurring costs were allocated to all Portfolios based on the Portfolios' respective net assets at July 31, 2004. No fees were allocated to Janus Research Fund, Janus Triton Fund and the Janus Smart Portfolios as the funds commenced operations after July 31, 2004. Additionally, all future non-recurring costs will be allocated to all Portfolios based upon the Portfolios' respective net assets at July 31, 2004. These non-recurring costs and offsetting waivers are shown on the Statement of Operations.
Certain officers of the Funds may also be officers and/or directors of Janus Capital. Such officers receive no compensation from the Funds, except for the Funds' Chief Compliance Officer. Effective January 1, 2006, the Funds began reimbursing the adviser for a portion of the compensation paid to the Chief Compliance Officer of the Funds. $59,577 of total compensation was paid by the funds of the Trust. The Funds' portion is reported as part of "Other Expenses" on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the "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 credited to the account. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance to the Plan. No deferred fees were paid to any Trustee under the Plan during the s ix-month period ended April 30, 2006.
During the six-month period ended April 30, 2006, 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 Overseas Fund | $ | 23,621 | |||||
Janus Worldwide Fund | 12,653 |
During the six-month period ended April 30, 2006, 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.
Funds | |||||||
Janus Overseas Fund | $ | 19,964 |
The Funds may invest in money market funds, including funds managed by Janus Capital. During the six-month period ended April 30, 2006, the following Fund recorded distributions from affiliated investment companies as affiliated dividend income, and had the following affiliated purchases and sales:
Purchases Shares/Cost | Sales Shares/Cost | Dividend Income | Value at 4/30/06 | ||||||||||||||||
Janus Institutional Cash Reserves Fund | |||||||||||||||||||
Janus Worldwide Fund | $ | 50,000,000 | $ | 50,000,000 | $ | 32,192 | $ | – |
3. PURCHASES AND SALES OF INVESTMENT SECURITIES
For the six-month period ended April 30, 2006, the aggregate cost of purchases and proceeds from sales of investment securities (excluding short-term securities) were as follows:
Fund | Purchase of Securities | Proceeds from Sales of Securities | Purchase of Long- Term U.S. Government Obligations | Proceeds from Sales of Long-Term U.S. Government Obligations | |||||||||||||||
Janus Global Opportunities Fund | $ | 44,752,565 | $ | 76,104,323 | $ | – | $ | – | |||||||||||
Janus Overseas Fund | 1,984,169,111 | 1,415,590,826 | – | – | |||||||||||||||
Janus Worldwide Fund | 1,341,258,106 | 2,014,580,017 | – | – |
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
Janus International & Global Funds April 30, 2006 33
Notes to Financial Statements (unaudited) (continued)
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, 2006 are also noted in the table 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.
Fund | Federal Tax Cost | Unrealized Appreciation | Unrealized Depreciation | Net Tax Appreciation/ (Depreciation) | |||||||||||||||
Janus Global Opportunities Fund | $ | 151,080,889 | $ | 30,669,138 | $ | (2,778,316 | ) | $ | 27,890,822 | ||||||||||
Janus Overseas Fund | 3,637,098,496 | 1,476,816,129 | (38,539,700 | ) | 1,438,276,429 | ||||||||||||||
Janus Worldwide Fund | 4,561,865,770 | 763,974,062 | (126,108,573 | ) | 637,865,489 |
Net capital loss carryovers as of October 31, 2005 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 table below shows the expiration dates of the carryovers.
Capital Loss Carryover Expiration Schedule
For the fiscal year ended October 31, 2005
Fund | October 31, 2009 | October 31, 2010 | October 31, 2011 | Accumulated Capital Losses | |||||||||||||||
Janus Global Opportunities Fund | $ | – | $ | – | $ | (8,141,177 | ) | $ | (8,141,177 | ) | |||||||||
Janus Overseas Fund(1) | (244,714,221 | ) | (665,476,594 | ) | (60,722,110 | ) | (970,912,925 | ) | |||||||||||
Janus Worldwide Fund | (2,045,508,921 | ) | (3,186,843,718 | ) | (670,957,456 | ) | (5,903,310,095 | ) |
(1) Capital loss carryovers subject to annual limitations.
During the fiscal year ended October 31, 2005, the following capital loss carryovers were utilized by the Funds as indicated in the table below.
Fund | Capital Carryover Loss Utilized | ||||||
Janus Global Opportunities Fund | $ | 16,770,315 | |||||
Janus Overseas Fund | 309,774,985 | ||||||
Janus Worldwide Fund | 510,425,390 |
5. CAPITAL SHARE TRANSACTIONS
For the six-month period ended April 30, 2006 (unaudited) and the fiscal year ended October 31, 2005 | Janus Global Opportunities Fund | Janus Overseas Fund | Janus Worldwide Fund | ||||||||||||||||||||||||
(all numbers in thousands) | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||||
Transactions in Fund Shares | |||||||||||||||||||||||||||
Shares sold | 642 | 3,263 | 30,129 | 17,223 | 1,707 | 4,754 | |||||||||||||||||||||
Reinvested distributions | 89 | 29 | 815 | 918 | 1,272 | 1,301 | |||||||||||||||||||||
Shares repurchased | (2,814 | ) | (6,562 | ) | (7,256 | ) | (24,928 | ) | (20,230 | ) | (71,888 | ) | |||||||||||||||
Net Increase/(Decrease) in Capital Share Transactions | (2,083 | ) | (3,270 | ) | 23,688 | (6,787 | ) | (17,251 | ) | (65,833 | ) | ||||||||||||||||
Shares Outstanding, Beginning of Period | 12,767 | 16,037 | 89,900 | 96,687 | 119,724 | 185,557 | |||||||||||||||||||||
Shares Outstanding, End of Period | 10,684 | 12,767 | 113,588 | 89,900 | 102,473 | 119,724 |
34 Janus International & Global Funds April 30, 2006
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 in that Court that generally include: (i) claims by a putative class of investors in certain Janus funds asserting claims on behalf of the investor class; (ii) derivative claims by investors in certain Janus funds ostensibly on behalf of suc h funds; (iii) claims on behalf of participants in the Janus 401(k) plan; (iv) claims brought on behalf of shareholders of Janus Capital Group Inc. ("JCGI") on a derivative basis against the Board of Directors of JCGI; and (v) claims by a putative class of shareholders of JCGI asserting claims on behalf of the shareholders. 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 (actions (i) and (ii) described 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. The complaint in the 401(k) plan class action (action (iii) described above) was voluntarily dismissed, but was refiled using a new named plaintiff and asserting claims similar to the initial complaint. As a result of the above events, JCGI, Janus Capital, the Advisory Committee of the Janus 401(k) plan, and the current or former directors of JCGI are the remaining defendants in one or more of the actions.
The Attorney General's Office for the State of West Virginia filed a separate market timing related civil action against Janus Capital and several other non-affiliated mutual fund companies, claiming violations under the West Virginia Consumer Credit and Protection Act. The civil action requests certain monetary penalties, among other relief. This action has been removed to federal court and transferred to the Multidistrict Litigation case in the U.S. District Court of Baltimore, Maryland described above. In addition, the Auditor of the State of West Virginia, in his capacity as securities commissioner, has issued an order indicating an intent to initiate administrative proceedings against most of the defendants in the market timing cases (including Janus Capital) and seeking disgorgement and other monetary relief based on similar market timing allegations.
In addition to the "market timing" actions described above, Janus Capital is a defendant in a consolidated lawsuit in the U.S. District Court for the District of Colorado challenging the investment advisory fees charged by Janus Capital to certain Janus funds. The action was filed in 2004 by fund investors asserting breach of fiduciary duty under Section 36(b) of the Investment Company Act of 1940. The plaintiffs seek declaratory and injunctive relief and an unspecified amount of damages.
In 2001, Janus Capital's predecessor was also named as a defendant in a class action suit in the U.S. District Court for the Southern District of New York, alleging that certain underwriting firms and institutional investors violated antitrust laws in connection with initial public offerings. The U.S. District Court dismissed the plaintiff's antitrust claims in November 2003, however, the U.S. Court of Appeals vacated that decision and remanded it for further proceedings.
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 & Global Funds April 30, 2006 35
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 Fund's website at www.janus.com; 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 Investment Advisory Agreements
Amendments to Advisory Agreements to Conform to Prevailing Industry Practice
On September 20, 2005, the Board of Trustees, including all of the Independent Trustees, voted unanimously to approve an amended Investment Advisory Agreement ("Amended Agreement") for each applicable Fund and authorized the submission of each Amended Agreement to the Fund's shareholders for approval. Shareholders approved the Amended Agreement for their Fund at a special meeting of Shareholders held on January 9, 2006 for Janus Global Opportunities Fund, Janus Overseas Fund, and Janus Worldwide Fund.
In approving the proposed Amended Agreements, the Trustees considered the recommendations of an independent compliance consultant engaged by Janus Capital regarding the form of each of those agreements and concluded that the proposed changes were consistent with industry practice and would reflect an appropriate delegation of authority to Janus Capital clarifying its investment discretion over the Funds it manages.
In connection with their most recent consideration of the investment advisory agreements for all of the Funds, the Trustees received and reviewed a substantial amount of information provided by Janus Capital and the respective subadvisers for subadvised Funds in response to requests of the Independent Trustees and their counsel. They also received and reviewed a considerable amount of information and analysis provided to the Trustees by an independent fee consultant. Throughout their consideration of the agreements, the Independent Trustees were advised by their independent legal counsel. The Independent Trustees met on two separate occasions with Janus Capital management to consider the agreements, and at each of those meetings they also met separately in executive session with their counsel.
Based on their evaluation of the information provided by Janus Capital, subadvisers, the independent fee consultant, Lipper Inc. ("Lipper"), and other information, the Trustees determined that the overall arrangements between the Funds and Janus Capital were fair and reasonable in light of the nature 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. In considering the 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 agreements are discussed separately below.
Nature, Extent, and Quality of Services
The Trustees reviewed the nature, extent, and quality of the services of Janus Capital and the subadvisers to the Funds, taking into account the investment objective and strategy of each Fund and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis. 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, and overseeing the activities of other service provider s, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations. The Trustees also reviewed the enhanced compliance program of Janus Capital and the actions taken by Janus Capital in response to various legal and regulatory proceedings since the fall of 2003.
The Trustees concluded that the nature, extent, and quality of the services provided by Janus Capital and, if applicable, the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory agreements, that the quality of those services had been consistent with or superior to quality norms in the industry, and that the Funds were
36 Janus International & Global Funds April 30, 2006
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 and retain well-qualified personnel.
Performance of the Funds
The Trustees considered the short-term and longer term performance of each Fund. They reviewed information comparing each Fund's performance with the performance of comparable funds and peer groups identified by Lipper and with the Fund's benchmark index. They concluded that the performance of most Funds was good to very good. Although the performance of some Funds lagged that of their peers for certain periods, they also concluded that Janus Capital had taken appropriate steps to address the 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 information for other comparable funds as provided by Lipper. They noted that the rate of management (investment advisory and administrative) fees for each Fund, 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 in determining compensation payable to portfolio managers, the very competitive environment for investment management talent and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed Janus Capital's management fees for its separate account clients and for its subadvised funds (for which Janus Capital provides only portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fees for Funds having a similar strategy, the Trustees noted that 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. Moreover, they noted that the spread between the average fees charged to the Funds and the fees that Janus Capital charged to its separate account clients was significantly smaller than the average spread for such fees of other advisers, based on publicly available data and research conducted b y their independent fee consultant.
The Trustees also considered the profitability to Janus Capital and its affiliates of their relationships with each Fund and found Janus Capital's profitability not to be unreasonable.
Finally, the Trustees considered the financial condition of Janus Capital, which they found to be sound.
The Trustees concluded that the management fees and any other compensation payable by each Fund to Janus Capital and its affiliates, as well as the fees paid by Janus Capital or a Fund to the subadvisers of subadvised Funds, were reasonable in relation to the nature 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 charges to other clients. The Trustees also concluded that the overall expense ratio of each Fund was reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital, the investment performance of the Fund, and the expense limitations agreed to by Janus Capital.
Economies of Scale
The Trustees received and considered information about the potential of Janus Capital to experience economies of scale as the assets of the Funds increase. They noted that, although each Fund (except four Funds that have breakpoints) pays an advisory fee at a fixed rate as a percentage of net assets, without any breakpoints, the management fee paid by each Fund, after any applicable contractual expense limitations, was below the mean management fee rate of the Fund's peer group selected by Lipper. The Trustees also took note that, for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of many of the Funds have declined in the past few years, the Funds have benefited from having advisory fee rates that have remained constant rather than fees with breakpoints and higher fee rates at low er asset levels in which the effective fee rate might have increased as assets declined. The Trustees considered certain Amended Agreements that included a change to the advisory fee to reflect a performance-based structure under which the rate of fee would increase or decrease from the current fixed rate if the Fund outperforms or underperforms its benchmark index over a trailing period. Such a fee structure is likely to increase or decrease Janus Capital's economies of scale, depending on whether the effective rate of the fee is increased or decreased. 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 fee structure in each of the advisory agreements was reasonable and that the current rates of fees reflect a sharing between Janus Capital and the Fund of economies of scale at the current asset level of the Fund.
Janus International & Global Funds April 30, 2006 37
Additional Information (unaudited) (continued)
Other Benefits to the Adviser
The Trustees also considered benefits that accrue to Janus Capital and its affiliates from their relationship with the Funds. They recognized that affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively. The Trustees also considered Janus Capital's use of commissions paid by most Funds on their portfolio brokerage transactions to obtain proprietary research products and services benefiting the Funds and/or other clients of Janus Capital, as well as Janus Capital's agreement not to use any Fund's portfolio brokerage transactions to obtain third party research through brokers. The Trustees concluded that Janus Capital's use of "soft" commission dollars to obtain proprietary research products and services was consistent with regulatory requirements 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 concluded that Janus Capital benefits from the receipt of proprietary 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 each Fund could attract other business to Janus Capital or its other Funds and that the success of Janus Capital could enhance Janus Capital's ability to serve the Funds.
After full consideration of the above factors as well as other factors, the Trustees, including all of the Independent Trustees, concluded that the current Investment Advisory Agreement for each Fund was in the best interest of the Fund and its shareholders. In approving the Amended Agreements, the Independent Trustees also concluded that the Amended Agreement, as proposed, was in the best interest of the Fund and its shareholders.
Performance-Based Investment Advisory Fee Proposal — For Janus Worldwide Fund
On September 20, 2005 and October 19, 2005, the Board of Trustees, including all of the Independent Trustees, voted unanimously to approve an Amended Investment Advisory Agreement for the Fund ("Proposed Agreement") and authorized the submission of the Proposed Agreement to the Fund's shareholders for approval. The Proposed Agreement changed the advisory fee paid by the Fund from a fixed rate to a rate that adjusts upward or downward based upon the Fund's performance relative to a selected benchmark index. Shareholders of the Fund approved the Proposed Agreement at a special meeting of Shareholders held on January 9, 2006 for Janus Worldwide Fund.
For more than a year the Independent Trustees and their independent fee consultant, in consultation with independent legal counsel to the Independent Trustees, have explored the possibility of modifying the fee structure for certain funds to provide for a performance-based adjustment to the current investment advisory fee rate that would increase or decrease the fee based on whether the Fund's total return performance exceeds or lags a stated relevant benchmark index.
The Independent Trustees also worked with Janus Capital to develop a performance structure that was acceptable to Janus Capital. In doing so, the Independent Trustees were seeking to provide a closer alignment of the interests of Janus Capital with those of the Funds and their shareholders. They believe that the fee structure proposed for each Fund will achieve that objective. Included as part of their analysis of the overall performance fee structure, the Trustees, in consultation with their independent fee consultant, considered the appropriate performance range for achieving the maximum and minimum advisory fee that would result in the Performance Adjustment of up to 0.15% (positive or negative) of a Fund's average daily net assets during the applicable performance measurement period. The Trustees reviewed information provided by Janus Capital and prepared by their independent fee consultant with respect to an appropriate deviation of exc ess/under returns relative to a Fund's benchmark index, taking into consideration expected tracking error of the Fund, expected returns and potential risks and economics involved both for Janus Capital and the Fund's shareholders. The Trustees also reviewed the structure of performance fees applied by other mutual fund complexes. Based on this information, the Trustees determined that a performance range that approximates one standard deviation of excess/under returns relative to a Fund's benchmark index was appropriate for calculating the maximum range (positive or negative) of the Performance Adjustment.
As described above, the Performance Adjustment that will be added to or subtracted from the "Base Fee" (as defined in the Proposed Agreement) as a result of a Fund's performance relative to its benchmark index is a variable up to 0.15% of average net assets during the performance measurement period. Importantly, the performance is computed after deducting the Fund's operating expenses (including advisory fees), which means that in order to receive any upward adjustment from the Base Fee, Janus Capital must deliver a total return after expenses that exceeds the return of the benchmark index, which does not incur any expenses.
The Trustees determined that the benchmark index specified in each of the Proposed Agreements for purposes of computing the performance fee adjustments is appropriate for the respective Fund based on a number of factors, including the fact that the index is broad-based and is composed of securities of the types in which the Fund may invest. The
38 Janus International & Global Funds April 30, 2006
Trustees believe that divergence between the Fund's performance and performance of the index can be attributed, in part, to the ability of the portfolio manager in making investment decisions within the parameters of the Fund's investment objective and investment policies and restrictions.
The Trustees determined that the class of shares of each Fund selected for purposes of calculating the Performance Adjustment as applied to the Fund is the most appropriate class for use in calculating such Fund's Performance Adjustment. In making that determination, the Trustees considered the fee structure and expenses paid by each class of shares, any fees paid to or retained by Janus Capital or its affiliates, as well as the distribution channel for each class of shares.
The time periods to be used in determining any Performance Adjustment were also judged to be of appropriate length to ensure proper correlation and to prevent fee adjustments from being based upon random or insignificant differences between the performance of the Fund and of the index. In that regard, the Trustees concluded that it would be appropriate for there to be no adjustment from the Base Fee for the first 12 months after the effective date of each Proposed Agreement before implementation of any Performance Adjustment, and that, once implemented, the Performance Adjustment should reflect only the Fund's performance subsequent to that effective date. Moreover, the Trustees believed that, upon reaching the thirty sixth month after the effective date, the performance measurement period would be fully implemented, and that the Performance Adjustment should thereafter be based upon a thirty-six month rolling performance measurement period.
In addition to considering the performance fee structure reflected in each Proposed Agreement, in approving each of those agreements, the Trustees followed the process and considered the factors and reached the conclusions described above under "Amendments to Advisory Agreements to Conform to Prevailing Industry Practice."
Janus International & Global Funds April 30, 2006 39
Explanations of Charts, Tables and
Financial Statements (unaudited)
1. PERFORMANCE OVERVIEWS
Performance overview graphs compare the performance of a hypothetical $10,000 investment in each Fund 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 any dividends, distributions and capital gains, 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.
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.
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'll 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.
40 Janus International & Global Funds April 30, 2006
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 and expense offsets 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, if any, are also shown.
The last section lists the increase or decrease in the value of securities held in the Funds. 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 Fund's 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'll 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 withdraw via redemptions. The "Redemption Fees" refers to the fee paid to the Funds for shares held for three months 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 the Funds' NAV for current and past reporting periods. Not only does this table provide you with total return, it also reports total distributions, asset size, expense ratios and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income per share, which comprises dividends and interest income earned on securities held by the Funds. Following is the total of gains/(losses), realized and unrealized. Dividends and distributions are then subtracted to arrive at the NAV per share at the end of the period.
The next line reflects the average annual total return reported the last day of the period.
Also included are the expense ratios, or the percentage of 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 average shareholder account size 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 offset and the net expenses. The expense ratios listed in the Financial Highlights reflect total expenses prior to any expense offsets (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 ratio is the portfolio turnover rate, which measures the buying and selling activity in a Fund. Portfolio turnover is affected by market conditions, changes in the asset size of a Fund, the nature of the Fund's investments and the investment style of the portfolio manager. A 100% rate implies that an amount equal to the value of the entire portfolio is turned over in a year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the portfolio is traded every six months.
Janus International & Global Funds April 30, 2006 41
Shareholder Meeting (unaudited)
A Special Meeting of Shareholders of the Funds was held on November 22, 2005 and adjourned and reconvened to December 29, 2005 and January 9, 2006. At the meetings, the following matters were voted on and approved by the Shareholders. Each vote reported represents one dollar of net asset value held on the record date of the meeting. The results of the Special Meeting of Shareholders are noted below.
Proposal 1
Elect nine Trustees, including eight "independent" candidates.
Record | Number of Votes | Percentage of Total Outstanding Votes | Percentage of Voted | ||||||||||||||||||||||||||||||||||||||||
Trustees | Date Votes | Affirmative | Withheld | Total | Affirmative | Withheld | Total | Affirmative | Withheld | Total | |||||||||||||||||||||||||||||||||
Jerome S. Contro | 72,431,132,779 | 28,415,846,253 | 806,823,785 | 29,222,670,038 | 39.23 | % | 1.12 | % | 40.35 | % | 97.24 | % | 2.76 | % | 100.00 | % | |||||||||||||||||||||||||||
William F. McCalpin | 72,431,132,779 | 28,431,830,093 | 790,839,945 | 29,222,670,038 | 39.26 | % | 1.09 | % | 40.35 | % | 97.29 | % | 2.71 | % | 100.00 | % | |||||||||||||||||||||||||||
John W. McCarter, Jr. | 72,431,132,779 | 28,410,815,406 | 811,854,632 | 29,222,670,038 | 39.23 | % | 1.12 | % | 40.35 | % | 97.22 | % | 2.78 | % | 100.00 | % | |||||||||||||||||||||||||||
Dennis B. Mullen | 72,431,132,779 | 28,408,140,530 | 814,529,508 | 29,222,670,038 | 39.22 | % | 1.13 | % | 40.35 | % | 97.21 | % | 2.79 | % | 100.00 | % | |||||||||||||||||||||||||||
James T. Rothe | 72,431,132,779 | 28,421,678,938 | 800,991,100 | 29,222,670,038 | 39.24 | % | 1.11 | % | 40.35 | % | 97.26 | % | 2.74 | % | 100.00 | % | |||||||||||||||||||||||||||
William D. Stewart | 72,431,132,779 | 28,426,971,191 | 795,698,847 | 29,222,670,038 | 39.25 | % | 1.10 | % | 40.35 | % | 97.28 | % | 2.72 | % | 100.00 | % | |||||||||||||||||||||||||||
Martin H. Waldinger | 72,431,132,779 | 28,400,077,651 | 822,592,387 | 29,222,670,038 | 39.21 | % | 1.14 | % | 40.35 | % | 97.18 | % | 2.82 | % | 100.00 | % | |||||||||||||||||||||||||||
Linda S. Wolf | 72,431,132,779 | 28,406,316,741 | 816,353,297 | 29,222,670,038 | 39.22 | % | 1.13 | % | 40.35 | % | 97.21 | % | 2.79 | % | 100.00 | % | |||||||||||||||||||||||||||
Thomas H. Bailey | 72,431,132,779 | 28,395,482,070 | 827,141,468 | 29,222,623,538 | 39.21 | % | 1.14 | % | 40.35 | % | 97.17 | % | 2.83 | % | 100.00 | % |
Proposal 3a
To approve certain amendments to the Fund's investment advisory agreement with Janus Capital to conform to prevailing industry practice.
Number of Votes | Percentage of Total Outstanding Votes | Percentage of Voted | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Fund | Record Date Votes | Affirmative | Against | Abstain | Broker Non-Votes | Affirmative | Against | Abstain | Broker Non-Votes | Affirmative | Against | Abstain | Broker Non-Votes | ||||||||||||||||||||||||||||||||||||||||||
Janus Global Opportunities Fund | 197,366,318 | 88,824,724 | 6,792,564 | 4,439,696 | 24,242,581 | 45.01 | % | 3.44 | % | 2.25 | % | 12.28 | % | 71.46 | % | 5.47 | % | 3.57 | % | 19.50 | % | ||||||||||||||||||||||||||||||||||
Janus Overseas Fund | 2,434,653,611 | 963,274,666 | 52,803,391 | 42,169,609 | 317,147,325 | 39.57 | % | 2.17 | % | 1.73 | % | 13.03 | % | 70.04 | % | 3.84 | % | 3.06 | % | 23.06 | % | ||||||||||||||||||||||||||||||||||
Janus Worldwide Fund | 5,332,949,989 | 2,254,772,115 | 132,852,859 | 104,602,815 | 749,149,257 | 42.28 | % | 2.49 | % | 1.96 | % | 14.05 | % | 69.56 | % | 4.10 | % | 3.23 | % | 23.11 | % |
Proposal 3b
To approve an amended investment advisory agreement between the Fund and Janus Capital to change the investment advisory fee rate from a fixed rate to a rate that adjusts upward or downward based upon the Fund's performance relative to its benchmark index.
Number of Votes | Percentage of Total Outstanding Votes | Percentage of Voted | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Fund | Record Date Votes | Affirmative | Against | Abstain | Broker Non-Votes | Affirmative | Against | Abstain | Broker Non-Votes | Affirmative | Against | Abstain | Broker Non-Votes | ||||||||||||||||||||||||||||||||||||||||||
Janus Worldwide Fund | 5,332,949,989 | 2,228,686,867 | 167,929,741 | 95,611,181 | 749,149,257 | 41.79 | % | 3.15 | % | 1.79 | % | 14.05 | % | 68.76 | % | 5.18 | % | 2.95 | % | 23.11 | % |
42 Janus International & Global Funds April 30, 2006
Janus International & Global Funds April 30, 2006 43
Notes
44 Janus International & Global Funds April 30, 2006
Notes
Janus International & Global Funds April 30, 2006 45
Janus provides access to a wide range of investment disciplines.
Asset Allocation
Janus asset allocation funds 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.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
151 Detroit Street
Denver, CO 80206
1-800-525-3713
Funds distributed by Janus Distributors LLC (6/06)
C-0606-22 111-24-105 06-06
2006 Semiannual Report
Janus Bond & Money Market Funds
Bond
Janus Federal Tax-Exempt Fund
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 manager perspective
• Investment strategy behind your fund
• Fund performance, characteristics and holdings
Table of Contents
Janus Bond & Money Market Funds
President and CEO Letter to Shareholders | 1 | ||||||
Portfolio Managers' Commentaries and Schedules of Investments | |||||||
Janus Federal Tax-Exempt Fund | 6 | ||||||
Janus Flexible Bond Fund | 12 | ||||||
Janus High-Yield Fund | 20 | ||||||
Janus Short-Term Bond Fund | 30 | ||||||
Janus Money Market Fund | 39 | ||||||
Janus Government Money Market Fund | 42 | ||||||
Janus Tax-Exempt Money Market Fund | 43 | ||||||
Statements of Assets and Liabilities - Bond Funds | 44 | ||||||
Statements of Operations - Bond Funds | 45 | ||||||
Statements of Changes in Net Assets - Bond Funds | 46 | ||||||
Financial Highlights - Bond Funds | 47 | ||||||
Statements of Assets and Liabilities - Money Market Funds | 49 | ||||||
Statements of Operations - Money Market Funds | 50 | ||||||
Statements of Changes in Net Assets - Money Market Funds | 51 | ||||||
Financial Highlights - Money Market Funds | 52 | ||||||
Notes to Schedules of Investments | 57 | ||||||
Notes to Financial Statements | 61 | ||||||
Additional Information | 72 | ||||||
Explanations of Charts, Tables and Financial Statements | 74 | ||||||
Shareholder Meeting | 76 | ||||||
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.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
CEO's Letter
Gary Black
President and Chief Executive Officer
Dear Shareholders,
Before offering my perspective on the economy, the markets and the progress we've made at Janus during the six months ended April 30, 2006, I'd like to thank you for your continued confidence and investment in Janus' funds. Your unwavering support is the driving force behind our desire to deliver the strong, consistent fund performance that you've come to expect from Janus.
As you'll read on the following pages, our fund managers continued to deliver excellent performance – for the one-year period ended April 30, 2006, 68% of Janus' retail funds ranked within Lipper's top two quartiles based on total returns. For the five years ended April 30, 2006, 57% of our retail funds earned first- or second-quartile Lipper rankings – up from 30% a year ago. Over the past three years, Janus' U.S. equity funds have gained an average of 21% annually, versus a 12% gain for the Russell 1000® Growth Index and a 15% gain for the S&P 500® Index. (See performance and complete ranking figures on pages 3-4).
Staying Focused on Consistent Performance
While we're pleased to report solid performance across different time periods, our goal is to ensure consistency in our investment returns across different market cycles as well. We employ several tools to help us meet this goal, beginning with detailed research processes that help us single out what we feel are the best investments for our funds. The very talented and experienced individuals at the heart of these processes – our research analysts and portfolio managers – are what distinguish Janus from its asset management peers. Additionally, our robust risk management tools and disciplined buy/sell strategies help in our efforts to deliver consistent performance over full market cycles.
...our goal is to ensure consistency in our investment returns across different market cycles...
We recently appointed Chief Investment Officers to oversee our various investment disciplines. Jonathan Coleman and David Decker oversee our U.S. Growth and Core funds, Jason Yee is responsible for our Global and International funds, and Gibson Smith has oversight of our Fixed-Income and Money Market funds. In their respective roles, these individuals serve as player-coaches with the portfolio managers and analysts who work with them and focus on driving performance of the products they oversee.
Combined, we believe these elements of our research process will help us as we strive to deliver strong fund performance in all market environments.
Corporate Profits Remained Strong
On that note, I'd like to summarize the environment we – and other investors – operated in during the past six months. Stronger-than-expected economic data and growing anticipation of a possible conclusion to monetary tightening by the Federal Reserve drove U.S. equity markets higher during the period. Notwithstanding a sharp spike in energy prices in early 2006 and clear signs of a slowdown in the U.S. housing market, corporate profits continued to grow at a healthy clip and consumer spending remained robust. Financial markets observed a smooth transition in leadership at the Federal Reserve Board after Chairman Alan Greenspan's long tenure, and investors appeared to conclude that incoming Chairman Ben Bernanke would pursue a similar course to that of his predecessor, namely, to contain inflation and promote long-term economic growth. Perhaps the biggest risk, in our opinion, is that the Federal Reserve could increase short-term r ates too aggressively to curb potential inflation, which could cause longer-term growth to stall.
Areas of particular strength in the market included economically sensitive sectors such as financial services, industrials and energy, all of which benefited from continued evidence of strong U.S. economic growth. Overseas markets also delivered healthy returns, with Japan's economic recovery reawakening domestic Japanese investors to the Japanese equity market, and rapid industrialization and growing consumer wealth driving significant gains in emerging equity markets like Brazil, China and India.
Greater Diversification Sought by Investors
It was encouraging to see equity markets worldwide climb higher during the period. And yet, if there's one thing that all investors can consistently count on, it's that there is no consistency in the markets. This year's gains could be next year's losses. With this in mind, more and more investors seem to be making a concerted effort to maintain a
Janus Bond & Money Market Funds April 30, 2006 1
Continued
diversified portfolio. In recognition of this, we launched Janus Smart Portfolios in late December 2005. These Portfolios are geared toward investors who may not have the time to allocate their assets according to their specific goals and risk tolerance.
Janus Smart Portfolios invest in a 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). We believe the unique combination of these two different investment styles, assembled with the view of providing long-term diversification and market opportunity, will be of great benefit to shareholders as they invest toward their goals. And with three different portfolios to choose from – Growth, Moderate and Conservative – investors can choose the level of risk they are willing to take in pursuit of their goals.
A Compelling Case for Growth
In summary, the economic outlook appears positive to us, and we find valuations for U.S. equities attractive. The combination of those two factors continues to make a solid case for growth investing. Although future interest rate increases are becoming less likely, we will continue to closely monitor the actions of the Federal Reserve. Regardless of the macroeconomic climate ahead, we remain dedicated to rewarding your trust and confidence in Janus with strong, consistent fund performance.
Sincerely,
Gary Black
Chief Executive Officer and
Chief Investment Officer
2 Janus Bond & Money Market Funds April 30, 2006
Lipper Rankings
Lipper Rankings – Based on total return as of 4/30/06 | |||||||||||||||||||||||||||||||||||||||||||||||
ONE YEAR | THREE YEAR | FIVE YEAR | TEN YEAR | SINCE INCEPTION | |||||||||||||||||||||||||||||||||||||||||||
LIPPER CATEGORY | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | |||||||||||||||||||||||||||||||||||||
Janus Investment Funds | |||||||||||||||||||||||||||||||||||||||||||||||
(Inception Date) | |||||||||||||||||||||||||||||||||||||||||||||||
Janus Fund (2/70) | Large-Cap Growth Funds | 43 | 296/698 | 48 | 280/590 | 79 | 374/474 | 44 | 72/165 | 5 | 1/19 | ||||||||||||||||||||||||||||||||||||
Janus Enterprise Fund(1) (9/92) | Mid-Cap Growth Funds | 58 | 324/563 | 30 | 134/461 | 72 | 257/357 | 69 | 88/128 | 40 | 20/49 | ||||||||||||||||||||||||||||||||||||
Janus Mercury Fund(1) (5/93) | Large-Cap Growth Funds | 31 | 210/698 | 9 | 53/590 | 65 | 306/474 | 11 | 18/165 | 2 | 1/84 | ||||||||||||||||||||||||||||||||||||
Janus Olympus Fund(1) (12/95) | Multi-Cap Growth Funds | 44 | 186/423 | 53 | 190/359 | 66 | 188/288 | 27 | 25/95 | 15 | 13/88 | ||||||||||||||||||||||||||||||||||||
Janus Orion Fund (6/00) | Multi-Cap Growth Funds | 3 | 11/423 | 1 | 3/359 | 3 | 8/288 | N/A | N/A | 27 | 61/230 | ||||||||||||||||||||||||||||||||||||
Janus Triton Fund (2/05) | Small-Cap Growth Funds | 12 | 59/533 | N/A | N/A | N/A | N/A | N/A | N/A | 3 | 14/520 | ||||||||||||||||||||||||||||||||||||
Janus Twenty Fund* (4/85) | Large-Cap Growth Funds | 6 | 36/698 | 2 | 6/590 | 12 | 56/474 | 2 | 2/165 | 3 | 1/40 | ||||||||||||||||||||||||||||||||||||
Janus Venture Fund* (4/85) | Small-Cap Growth Funds | 59 | 311/533 | 10 | 45/453 | 20 | 70/363 | 38 | 44/117 | 10 | 1/10 | ||||||||||||||||||||||||||||||||||||
Janus Global Life Sciences Fund (12/98) | Health/Biotechnology Funds | 33 | 57/176 | 25 | 39/161 | 43 | 55/127 | N/A | N/A | 31 | 15/48 | ||||||||||||||||||||||||||||||||||||
Janus Global Technology Fund (12/98) | Science & Technology Funds | 33 | 94/292 | 43 | 113/265 | 58 | 132/230 | N/A | N/A | 23 | 17/76 | ||||||||||||||||||||||||||||||||||||
Janus Balanced Fund(1) (9/92) | Mixed-Asset Target Allocation Moderate Funds | 13 | 49/395 | 52 | 140/271 | 39 | 81/210 | 3 | 2/81 | 4 | 1/27 | ||||||||||||||||||||||||||||||||||||
Janus Contrarian Fund (2/00) | Multi-Cap Core Funds | 1 | 3/834 | 1 | 3/588 | 3 | 11/421 | N/A | N/A | 9 | 29/332 | ||||||||||||||||||||||||||||||||||||
Janus Core Equity Fund(1) (6/96) | Large-Cap Core Funds | 2 | 9/864 | 3 | 20/746 | 3 | 16/618 | N/A | N/A | 2 | 3/248 | ||||||||||||||||||||||||||||||||||||
Janus Growth and Income Fund(1) (5/91) | Large-Cap Core Funds | 5 | 35/864 | 9 | 65/746 | 15 | 90/618 | 3 | 5/240 | 6 | 5/96 | ||||||||||||||||||||||||||||||||||||
Janus Research Fund (2/05) | Multi-Cap Growth Funds | 8 | 31/423 | N/A | N/A | N/A | N/A | N/A | N/A | 7 | 26/410 | ||||||||||||||||||||||||||||||||||||
INTECH Risk-Managed Stock Fund (2/03) | Multi-Cap Core Funds | 58 | 483/834 | 22 | 129/588 | N/A | N/A | N/A | N/A | 26 | 150/586 | ||||||||||||||||||||||||||||||||||||
Janus Mid Cap Value Fund - Inv(1)(2) (8/98) | Mid-Cap Value Funds | 75 | 201/267 | 53 | 114/216 | 35 | 51/146 | N/A | N/A | 5 | 4/81 | ||||||||||||||||||||||||||||||||||||
Janus Small Cap Value Fund - Inv*(2) (10/87) | Small-Cap Core Funds | 97 | 612/633 | 91 | 456/504 | 65 | 243/373 | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||||
Janus Federal Tax-Exempt Fund (5/93) | General Municipal Debt Funds | 60 | 155/260 | 89 | 221/249 | 71 | 156/221 | 86 | 122/142 | 83 | 64/77 | ||||||||||||||||||||||||||||||||||||
Janus Flexible Bond Fund(1) (7/87) | Intermediate Investment Grade Debt Funds | 37 | 172/473 | 36 | 146/406 | 24 | 74/320 | 24 | 35/147 | 24 | 6/25 | ||||||||||||||||||||||||||||||||||||
Janus High-Yield Fund (12/95) | High Current Yield Funds | 38 | 164/439 | 72 | 276/385 | 55 | 169/311 | 9 | 10/111 | 3 | 3/104 | ||||||||||||||||||||||||||||||||||||
Janus Short-Term Bond Fund(1) (9/92) | Short Investment Grade Debt Funds | 30 | 68/228 | 21 | 38/181 | 49 | 63/129 | 20 | 13/66 | 43 | 11/25 | ||||||||||||||||||||||||||||||||||||
Janus Global Opportunities Fund(1) (6/01) | Global Funds | 100 | 360/362 | 54 | 154/286 | N/A | N/A | N/A | N/A | 23 | 50/224 | ||||||||||||||||||||||||||||||||||||
Janus Overseas Fund(1) (5/94) | International Funds | 1 | 2/910 | 1 | 2/770 | 19 | 114/599 | 4 | 8/230 | 2 | 2/120 | ||||||||||||||||||||||||||||||||||||
Janus Worldwide Fund(1) (5/91) | Global Funds | 94 | 339/362 | 98 | 279/286 | 99 | 217/220 | 68 | 56/82 | 28 | 5/17 |
(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.
Data presented represents past performance, which is no guarantee of future results.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
Janus Bond & Money Market Funds April 30, 2006 3
Performance
Average Annual Total Return for the periods ended 4/30/06 | |||||||||||||||||||||||
ONE YEAR | THREE YEAR | FIVE YEAR | 10 YEAR | SINCE INCEPTION | |||||||||||||||||||
Fund/Index | |||||||||||||||||||||||
(Inception Date) | |||||||||||||||||||||||
Janus Fund (2/70) | 17.28 | % | 11.85 | % | (2.62 | )% | 6.67 | % | 13.86 | % | |||||||||||||
Janus Contrarian Fund(1)(2)(3) (2/00) | 38.81 | % | 31.63 | % | 10.68 | % | N/A | 9.63 | % | ||||||||||||||
Janus Core Equity Fund(3) (6/96) | 31.00 | % | 19.14 | % | 5.74 | % | N/A | 13.43 | % | ||||||||||||||
Janus Enterprise Fund (9/92) | 29.21 | % | 22.74 | % | 1.87 | % | 6.69 | % | 11.63 | % | |||||||||||||
Janus Growth and Income Fund (5/91) | 25.82 | % | 16.82 | % | 3.44 | % | 12.02 | % | 13.80 | % | |||||||||||||
Janus Mercury Fund (5/93) | 19.00 | % | 15.42 | % | (1.74 | )% | 8.56 | % | 12.70 | % | |||||||||||||
Janus Mid Cap Value Fund - Investor Shares(3)(4) (8/98) | 20.64 | % | 23.27 | % | 12.45 | % | N/A | 17.97 | % | ||||||||||||||
Janus Olympus Fund (12/95) | 26.44 | % | 16.83 | % | 0.45 | % | 9.78 | % | 11.77 | % | |||||||||||||
Janus Orion Fund(1)(5)(6)(7) (6/00) | 41.50 | % | 27.95 | % | 10.72 | % | N/A | (0.73 | )% | ||||||||||||||
Janus Small Cap Value Fund - Investor Shares* (10/87) | 20.30 | % | 20.76 | % | 10.80 | % | 15.60 | % | N/A | ||||||||||||||
Janus Twenty Fund*(4)(6) (4/85) | 24.20 | % | 19.02 | % | 2.05 | % | 10.70 | % | 13.48 | % | |||||||||||||
Janus Venture Fund*(8) (4/85) | 32.58 | % | 27.53 | % | 9.14 | % | 9.29 | % | 13.88 | % | |||||||||||||
INTECH Risk-Managed Stock Fund(3) (2/03) | 17.81 | % | 19.16 | % | N/A | N/A | 20.50 | % | |||||||||||||||
S&P 500® Index | 15.42 | % | 14.68 | % | 2.70 | % | 8.94 | % | N/A | ||||||||||||||
Russell 1000® Growth Index | 15.18 | % | 12.05 | % | (0.76 | )% | 6.21 | % | N/A |
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 average performance of Janus' U.S. equity funds over the past three years was calculated using the three-year total returns of the 13 funds contained in the performance chart above. The 13 funds reflected in the performance chart above are those which Janus categorizes as U.S. equity funds and which have performance histories of three or more years.
*Closed to new investors
(1)This Fund may have significant exposure to emerging markets. In general, emerging market investments have historically been subject to significant gains and/or losses. As such, the Fund's returns and NAV may be subject to such volatility.
(2)The Fund has experienced significant gains due, in part, to its investments in India. 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 India.
(3)The Fund will invest at least 80% of its net assets in the type of securities described by its name.
(4)Due to certain investment strategies, the Fund may have an increased position in cash.
(5)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.
(6)Returns have sustained significant gains due to market volatility in the healthcare sector.
(7)Returns have sustained significant gains due to market volatility in the financials sector.
(8)This Fund has been significantly impacted, either positively or negatively, by investing in initial public offerings (IPOs).
Total return includes reinvestment of dividends, distributions and capital gains.
A fund's performance may be affected by risks that include those associated with non-diversification, investments in foreign securities and emerging markets, non-investment grade debt securities, undervalued or overlooked companies, companies with relatively small market capitalizations and investments in specific industries or countries. Please see a Janus prospectus or janus.com for more information about fund holdings and details.
The proprietary mathematical process used by Enhanced Investment Technologies LLC ("INTECH") may not achieve the desired results. Since the portfolio is regularly 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.
There is no assurance that the investment process will consistently lead to successful investing.
Returns shown for Janus Mid Cap Value Fund prior to 4/21/03 are those of Berger Mid Cap Value Fund.
Returns shown for Janus Small Cap Value Fund prior to 4/21/03 are those of Berger Small Cap Value Fund.
Effective 2/1/06, Blaine Rollins is no longer the portfolio manager of Janus Fund, and David Corkins is now the Fund manager.
Effective 2/1/06, David Corkins is no longer the portfolio manager of Janus Mercury Fund. A research team now selects the investments for Janus Mercury Fund led by the Director of Research, Jim Goff.
Effective 2/28/06, Janus Risk-Managed Stock Fund changed its name to INTECH Risk-Managed Stock Fund.
Janus Capital Group Inc. has a 30% ownership stake in the investment advisory business of Perkins, Wolf, McDonnell and Company, LLC.
INTECH is a subsidiary of Janus Capital Group Inc.
A Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
The S&P 500® Index is the Standard & Poor's composite index of 500 stocks, a widely recognized, unmanaged index of common stock prices.
The Russell 1000® Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.
4 Janus Bond & Money Market Funds April 30, 2006
Useful Information About Your Fund Report
Portfolio Manager Commentaries
The portfolio manager commentaries in this report include valuable insight from the portfolio 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 portfolio managers in their commentaries are just that: opinions. They are a reflection of their best judgment at the time this report was compiled, which was April 30, 2006. As the investing environment changes, so could their 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 Portfolio Manager 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, 2005 to April 30, 2006.
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 on 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, taxes and extraordinary expenses, to certain limits until at least March 1, 2007. 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 & Money Market Funds April 30, 2006 5
Janus Federal Tax-Exempt Fund (unaudited)
Ticker: JATEX
Fund Snapshot
This bond fund invests primarily in federally tax-exempt municipal bonds of any maturity.
Doug Nelson
portfolio manager
Performance Overview
For the six month period ended April 30, 2006, Janus Federal Tax-Exempt Fund gained 1.54%, while its benchmark, the Lehman Brothers Municipal Bond Index, returned 1.56%.
The bond market remained volatile throughout the period, against a backdrop of shifting interest rates, mixed economic signals and continued Federal Reserve credit tightening. Energy prices also remained a concern, as fuel prices retreated from their post-hurricane highs in 2005 before climbing to new peaks in April of 2006. Meanwhile, U.S. economic growth rebounded strongly in the first quarter, after moderating somewhat in the fourth. Consumer spending has shown impressive resilience, especially given rising interest rates and higher fuel prices.
Against this backdrop, the Federal Reserve continued its campaign of interest-rate hikes. The Fed raised overnight rates by 100 basis points during the six-month period, and has increased the benchmark by 375 basis points since it began this cycle of monetary tightening in the summer of 2004. The steady beat of Fed rate hikes has kept upward pressure on short-term bond yields, even as uncertainty over the extent of additional credit tightening has contributed to volatility at the long-end of the market. Late in 2005, hopes for a pause in Fed credit tightening, as well as robust foreign demand for U.S. debt, helped to temper the rise in longer-term yields. As a result, the yield curve flattened late in 2005 before inverting in December, as the 10-year Treasury yield fell slightly below the yield on the 2-year Treasury note.
This inversion proved short-lived, however. Longer-term interest rates started to climb in early 2006 as investors reassessed the outlook for Fed monetary policy. In particular, economic growth remained relatively robust, and Fed policymakers continued to express concerns over underlying inflation pressures, particularly in the labor and commodity markets. The Fed raised overnight rates in January and March, and signaled that additional monetary tightening was likely in the months to come. As a result, yields moved higher across the maturity spectrum. The 10-year Treasury yield rose to 5.07% by the end of April, as the yield curve steepened.
Investment Philosophy
We continue to manage the Fund with the intention of providing investors with maximum federally tax-exempt income, while insulating them from market and interest-rate
risk. Depending on the balance of market opportunities and risks, we may at times extend the duration of the Fund's holdings to pursue higher yields. Additionally, we may bolster yield by adding incremental exposure to both investment-grade and high-yield municipal securities. In selecting municipal bond investments, we continue to rely on exacting fundamental research and financial analysis to identify issuers with solid balance sheets and improving credit quality.
Duration Positioning Slowed Performance
Performance over the six-month period was hindered by the Fund's longer duration relative to its benchmark. This positioning reflected our view that economic growth was likely to moderate, as the cumulative effects of the Fed's ongoing credit tightening began to impact the housing market and consumer sector. In our view, such an economic slowdown ultimately would favor the bond market, with the most pronounced benefit at the longer-end of the maturity spectrum. Our longer duration was also an attempt to capitalize on some expanded yield opportunities in the steeper municipal bond curve. Unfortunately, the Fund's extended duration left us vulnerable to the recent upward move in longer-term interest rates and an example of this was our holding in Rockford, MI bonds maturing in 2019.
Results Benefited from Shift to Higher-Yielding Assets
On a positive note, our performance benefited from our efforts to add more exposure to triple-B rated bonds. Spreads have continued to tighten on higher-yielding municipal securities, as investors have sought higher coupons to bolster income and cushion against rising interest rates. In selecting investments for the Fund, we continue to rely on rigorous credit analysis and hands-on research. We continue to visit many of the properties and projects that we invest in, monitoring developments and gaining conviction in our decision-making. Top performers among our individual holdings included development projects in Texas, Colorado, Florida and Washington D.C.
6 Janus Bond & Money Market Funds April 30, 2006
(unaudited)
Strategy in the Months Ahead
We recognize that economic crosscurrents and volatile energy prices could keep the interest rate outlook uncertain. The markets have already priced in a 25-basis point Fed rate increase for May, as well as the likelihood of one or two additional rate hikes later in the summer. The extent and timing of additional moves will depend on the strength of economic data, and the behavior of inflation. Nonetheless, given the rise in yields across the maturity spectrum, it seems likely that we may begin to see more signs of moderation in housing market activity and consumer spending in our
opinion. As such a slowdown becomes more evident, we believe it would likely temper yields at the longer-end of the bond market.
At the same time, we remain encouraged by developments within the tax-exempt market, as many agencies and municipalities continue to refinance debt, streamline their balance sheets and bolster their overall credit quality. Above all, we remain careful in our credit selection, as we look for tax-exempt investment opportunities that offer sound fundamentals and healthy total return potential.
Janus Federal Tax-Exempt Fund At a Glance
Fund Profile
April 30, 2006 | |||||||
Weighted Average Maturity | 9.9 Years | ||||||
Average Modified Duration* | 6.1 Years | ||||||
30-Day Current Yield** | |||||||
With Reimbursement | 4.06 | % | |||||
Without Reimbursement | 3.50 | % | |||||
Weighted Average Fixed Income Credit Rating | A | ||||||
Number of Bonds/Notes | 80 |
*A theoretical measure of price volatility
**Yield will fluctuate
Ratings† Summary – (% of Net Assets)
April 30, 2006 | |||||||
AAA | 20.9 | % | |||||
AA | 9.0 | % | |||||
A | 26.5 | % | |||||
BBB | 23.4 | % | |||||
BB | 2.0 | % | |||||
Other | 18.0 | % |
†Rated by Standard & Poor's
Significant Areas of Investment – (% of Net Assets) | Significant Areas of Investment – (% of Net Assets) | ||||||
As of April 30, 2006 | As of October 31, 2005 | ||||||
![]() | ![]() | ||||||
Janus Bond & Money Market Funds April 30, 2006 7
Janus Federal Tax-Exempt Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | |||||||||||||||||||
Janus Federal Tax-Exempt Fund | 1.54 | % | 1.60 | % | 4.24 | % | 4.32 | % | 4.51 | % | |||||||||||||
Lehman Brothers Municipal Bond Index | 1.56 | % | 2.16 | % | 5.40 | % | 5.89 | % | 5.82 | %** | |||||||||||||
Lipper Quartile | N/A | 3 | rd | 3 | rd | 4 | th | 4 | th | ||||||||||||||
Lipper Ranking - based on total return for General Municipal Debt Funds | N/A*** | 155/260 | 156/221 | 122/142 | 64/77 |
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes reinvestment of dividends and capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares.
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.
*The Fund's inception date – May 3, 1993
**The Lehman Brothers Municipal Bond Index's since inception returns are calculated from April 30, 1993.
***The Fund's fiscal year-to-date Lipper ranking is not available.
See "Explanations of Charts, Tables and Financial Statements."
Bond funds 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 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.
The Fund's portfolio may differ significantly from the securities held in the index. The index is not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
Income may be subject to state or local taxes and to a limited extent certain federal taxes. Capital gains are subject to federal, state and local taxes.
Janus Capital Management LLC has contractually agreed to waive the Fund's total operating expenses to levels indicated in the prospectus until at least March 1, 2007. Total returns shown include fee waivers, if any, and without such waivers, the Fund's yields and total return would have been lower.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,015.40 | $ | 2.80 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.02 | $ | 2.81 |
*Expenses are equal to the annualized expense ratio of 0.56%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital.
8 Janus Bond & Money Market Funds April 30, 2006
Janus Federal Tax-Exempt Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Municipal Securities - 97.3% | |||||||||||
Alabama - 3.0% | |||||||||||
$ | 2,000,000 | Birmingham, Alabama, Baptist Medical Centers, Special Care Facilities Financing Authority Revenue, (Baptist Health System, Inc.), Series A 5.00%, due 11/15/13 | $ | 2,061,980 | |||||||
1,000,000 | Tuscaloosa, Alabama, Special Care Facilities Financing Authority, Residential Care (Capstone Village), Series A 5.125%, due 8/1/15 | 989,070 | |||||||||
3,051,050 | |||||||||||
Arizona - 1.0% | |||||||||||
1,000,000 | Pinal County, Arizona, Industrial Development Authority, Correctional Facility Contract Revenue, (Florence West Prison Project), (ACA Insured), Series A 5.25%, due 10/1/12 | 1,054,420 | |||||||||
Arkansas - 3.3% | |||||||||||
1,000,000 | Independence County, Arkansas, Pollution Control Revenue Refunding Bonds (Entergy Arkansas, Inc. Project) 5.00%, due 1/1/21 | 1,005,150 | |||||||||
1,355,000 | Norphlet, Arkansas, Industrial Development Revenue Bonds, (Norphlet Chemical, Inc. Project), (ADED GTD Insured) 5.00%, due 2/1/12 | 1,379,810 | |||||||||
1,000,000 | Washington County, Arkansas, Hospital Revenue, (Regional Medical Center) Series B, 5.00%, due 2/1/12 | 1,031,120 | |||||||||
3,416,080 | |||||||||||
California - 4.7% | |||||||||||
500,000 | California Health Facilities Financing Authority Insured Revenue Bonds (California-Nevada Methodist Homes) 5.00%, due 7/1/12 (WI) | 522,040 | |||||||||
2,000,000 | California Statewide Communities Development Authority Revenue Huntington Memorial Hospital 5.00%, due 7/1/19 | 2,080,379 | |||||||||
1,005,000 | San Bernardino County, California Redevelopment Agency Tax Allocation (San Sevaine Redevelopment Project) (RDN Insured), Series A 5.00%, due 9/1/13 | 1,051,974 | |||||||||
1,170,000 | San Diego County, California, Certificates of Participation, Burnham Institute for Medical Research, 5.00%, due 9/1/11 | 1,213,197 | |||||||||
4,867,590 | |||||||||||
Colorado - 4.2% | |||||||||||
500,000 | Broomfield, Colorado, Certificates of Participation, Westminster Open Space Foundation, 5.00%, due 12/1/12 | 523,350 | |||||||||
2,475,000 | Colorado Educational and Cultural Facilities Authority Revenue, Student Housing Revenue Bonds, (Inn at Auraria LLC Project), Series A, 5.375%, due 7/1/15 | 2,473,045 | |||||||||
1,225,000 | Denver, Colorado, City and County Golf Enterprise Revenue Bonds, Department of Parks and Recreation 5.50%, due 9/1/12 | 1,293,110 | |||||||||
4,289,505 |
Shares or Principal Amount | Value | ||||||||||
Connecticut - 1.0% | |||||||||||
$ | 1,000,000 | Connecticut Development Authority Pollution Control Revenue, (Connecticut Light and Power Company Project) Series B, 5.95%, due 9/1/28 | $ | 1,052,820 | |||||||
Delaware - 1.1% | |||||||||||
1,075,000 | Sussex County, Delaware, First Mortgage Revenue Bonds, (Cadbury at Lewes Project), Series A, 5.15%, due 1/1/12 | 1,075,075 | |||||||||
Florida - 11.4% | |||||||||||
2,350,000 | Destin, Florida, Community Redevelopment Agency Revenue, (Town Center Area Redevelopment), 5.25%, due 5/1/14 | 2,367,390 | |||||||||
1,455,000 | Florida Ports Financing Commission Revenue Bonds, (State Transportation Trust Fund-Intermodel Program) (FGIC Insured), 5.50%, due 10/1/12 | 1,526,150 | |||||||||
2,160,000 | Glades County, Florida, Correctional Development Corporation, First Mortgage Revenue, (Glades County Detention Center Project), 5.00%, due 3/1/11 | 2,155,378 | |||||||||
2,000,000 | Hillsborough County, Florida, Industrial Development Authority Hospital Revenue (Tampa General Hospital Project) Series B, 5.25%, due 10/1/28 | 2,050,460 | |||||||||
1,470,000 | Miami-Dade County, Florida, School Board Certificates of Participation, (MBIA Insured), Series B, 5.00%, due 5/1/31 | 1,541,383 | |||||||||
2,000,000 | Palm Beach County, Florida, Health Facilities Authority Revenue, Hospital Refunding Bonds, (BRCH Corp. Obligated Group), 5.50%, due 12/1/21 | 2,066,699 | |||||||||
11,707,460 | |||||||||||
Georgia - 1.4% | |||||||||||
1,365,000 | City of Gainesville and Hall County, Georgia Hospital Authority Revenue Anticipation Certificates, (Northeast Georgia Health System, Inc. Project), 5.00%, due 5/15/11 | 1,423,490 | |||||||||
Guam - 1.0% | |||||||||||
1,000,000 | Guam Waterworks Authority, Water and Wastewater System Revenue Bonds 5.00%, due 7/1/12 | 1,011,720 | |||||||||
Idaho - 0.4% | |||||||||||
405,000 | Madison County, Idaho, Hospital Revenue Bonds, Certificates of Participation 5.00%, due 9/1/12 | 415,161 | |||||||||
Illinois - 11.8% | |||||||||||
2,150,000 | Hodgkins, Illinois, Tax Increment Revenue Senior Lien, 5.00%, due 1/1/14 | 2,210,694 | |||||||||
2,000,000 | Illinois Development Finance Authority Solid Waste Disposal Revenue, (Waste Management, Inc. Project) 5.05%, due 1/1/10 | 2,052,240 | |||||||||
1,500,000 | Illinois Educational Facilities Authority Revenue, Art Institute of Chicago Series A, 5.375%, due 3/1/18 | 1,588,980 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2006 9
Janus Federal Tax-Exempt Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Illinois - (continued) | |||||||||||
Illinois Finance Authority Revenue: (City of East St. Louis Project) | |||||||||||
$ | 1,840,000 | 5.00%, due 11/15/13 | $ | 1,935,404 | |||||||
(Clare at Water Tower Project), Series A | |||||||||||
1,000,000 | 5.20%, due 5/15/12 | 997,480 | |||||||||
1,000,000 | 5.30%, due 5/15/13 | 1,002,140 | |||||||||
(SwedishAmerican Hospital) (AMBAC Insured) | |||||||||||
1,170,000 | 5.00%, due 11/15/11 | 1,236,468 | |||||||||
1,000,000 | Lake and McHenry Counties, Illinois Community Unit School District 118 (FSA Insured), Series A 5.00%, due 1/1/20 | 1,042,030 | |||||||||
12,065,436 | |||||||||||
Indiana - 4.1% | |||||||||||
Indiana Health and Educational Facility Financing Authority Revenue Baptist Homes of Indiana: | |||||||||||
1,000,000 | 5.00%, due 11/15/12 | 1,032,960 | |||||||||
1,000,000 | 5.00%, due 11/15/13 | 1,032,360 | |||||||||
2,000,000 | Indianapolis, Indiana, Local Public Improvement Bond Bank, (Airport Authority Project), (FSA Insured) Series A, 5.625%, due 1/1/17 | 2,128,120 | |||||||||
4,193,440 | |||||||||||
Kansas - 0.5% | |||||||||||
500,000 | Kansas State Development Finance Authority Health Facilities Revenue, (Hays Medical Center, Inc.), Series L 5.25%, due 11/15/12 | 525,925 | |||||||||
Michigan - 2.5% | |||||||||||
1,035,000 | Michigan Public Educational Facilities Authority Revenue, Limited Obligation (Old Redford Academy Project) Series 2005A, 5.00%, due 12/1/13 | 1,037,546 | |||||||||
1,500,000 | Rockford, Michigan, Public Schools (Q-SBLF Insured), Series A 5.00%, due 5/1/19 | 1,554,960 | |||||||||
2,592,506 | |||||||||||
Minnesota - 1.0% | |||||||||||
1,000,000 | Minnesota State Higher Education Facilities Authority Revenue, (St. John's University) Series 6-G, 5.00%, due 10/1/14 | 1,049,650 | |||||||||
Missouri - 1.5% | |||||||||||
500,000 | Fenton, Missouri, Tax Increment Revenue (Gravois Bluffs Redevelopment Project) 5.00%, due 4/1/12 | 517,550 | |||||||||
1,000,000 | Missouri State Development Finance Board Infrastructure Revenue Bonds (Crackerneck Creek Project), Series C 5.00%, due 3/1/26 | 1,008,310 | |||||||||
1,525,860 | |||||||||||
Nebraska - 2.0% | |||||||||||
Nebraska Educational Facilities Authority Revenue, (Dana College), Series A: | |||||||||||
1,030,000 | 5.50%, due 3/15/20 | 1,056,378 | |||||||||
1,000,000 | 5.50%, due 3/15/25 | 1,020,360 | |||||||||
2,076,738 |
Shares or Principal Amount | Value | ||||||||||
New Hampshire - 2.5% | |||||||||||
$ | 2,500,000 | New Hampshire Health and Educational Facilities Authority, Healthcare System (Covenant Health), 5.375%, due 7/1/24 | $ | 2,595,950 | |||||||
New Jersey - 1.6% | |||||||||||
1,630,000 | Camden County, New Jersey, Improvement Authority, Health Care Redevelopment Revenue, Cooper Health System Obligated Group, Series A, 5.00%, due 2/15/13 | 1,658,949 | |||||||||
New York - 1.8% | |||||||||||
725,000 | Erie County, New York, Industrial Development Agency Revenue, (Orchard Park CCRC, Inc. Project), Series A 5.50%, due 11/15/11 | 746,156 | |||||||||
1,000,000 | New York City Industrial Development Agency, Special Facility Revenue Bonds (Terminal One Group Association L.P. Project), 5.00%, due 1/1/12 | 1,035,290 | |||||||||
1,781,446 | |||||||||||
Ohio - 2.3% | |||||||||||
2,235,000 | Dayton, Ohio, Airport Revenue, (James M. Cox Dayton International Airport), (XLCA Insured), Series B 5.00%, due 12/1/14 | 2,346,169 | |||||||||
Oklahoma - 1.1% | |||||||||||
1,000,000 | Comanche County, Oklahoma, Development Financial Authority Revenue, (Comanche County Memorial Hospital Project) Series B, 6.60%, due 7/1/31 | 1,086,090 | |||||||||
Pennsylvania - 7.6% | |||||||||||
Bucks County, Pennsylvania, Industrial Development Authority, Retirement Community Revenue, (Ann's Choice Inc. Facility), Series A: | |||||||||||
1,000,000 | 5.10%, due 1/1/12 | 995,000 | |||||||||
1,000,000 | 5.20%, due 1/1/13 | 996,310 | |||||||||
1,600,000 | Cumberland County, Pennsylvania Municipal Authority Revenue (Presbyterian Homes, Inc. Project) (RDN Insured), Series A 5.00%, due 12/1/13 | 1,661,232 | |||||||||
620,000 | Delaware River Joint Toll Bridge Commission Pennsylvania-New Jersey Bridge System Revenue Bonds, 5.25%, due 7/1/10** | 652,804 | |||||||||
1,205,000 | McKean County, Pennsylvania, Hospital Authority Revenue, (Bradford Hospital Project), (ACA Insured) 5.00%, due 10/1/17 | 1,228,510 | |||||||||
1,205,000 | Pennsylvania State Higher Educational Facilities Authority Revenue, Philadelphia University, 5.00%, due 6/1/13 | 1,236,728 | |||||||||
1,000,000 | Philadelphia, Pennsylvania, Airport Revenue, (MBIA Insured), Series A 5.00%, due 6/15/14 | 1,036,390 | |||||||||
7,806,974 | |||||||||||
Rhode Island - 2.3% | |||||||||||
1,250,000 | Providence, Rhode Island, Special Obligation Tax Increment Refunding Bonds, Series E, 5.00%, due 6/1/13 | 1,305,187 |
See Notes to Schedules of Investments and Financial Statements.
10 Janus Bond & Money Market Funds April 30, 2006
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Rhode Island - (continued) | |||||||||||
$ | 1,000,000 | Rhode Island State Economic Development Corp., Providence Place Mall, (RDN Insured), 6.125%, due 7/1/20 | $ | 1,085,960 | |||||||
2,391,147 | |||||||||||
South Carolina - 2.2% | |||||||||||
South Carolina Jobs-Economic Development Authority, Student Housing Revenue (Coastal Housing Foundation LLC Project), (CIFG Insured), Series A: | |||||||||||
1,040,000 | 5.00%, due 4/1/17 | 1,089,452 | |||||||||
1,095,000 | 5.00%, due 4/1/18 | 1,143,782 | |||||||||
2,233,234 | |||||||||||
Tennessee - 3.0% | |||||||||||
2,000,000 | Memphis-Shelby County, Tennessee, Airport Authority Special Facilities Revenue (Federal Express Corp.) 5.05%, due 9/1/12 | 2,088,980 | |||||||||
1,000,000 | Shelby County, Tennessee, Health Educational and Housing Facility Board (Trezevant Manor Project), Series A 4.90%, due 9/1/11 | 994,790 | |||||||||
3,083,770 | |||||||||||
Texas - 8.4% | |||||||||||
1,790,000 | Beasley, Texas, Higher Education Finance Corporation Revenue, (Uplift Education) (ACA Insured), Series A 5.25%, due 12/1/18 | 1,866,666 | |||||||||
2,820,000 | Brazos River Authority, Texas, Pollution Control Revenue, (TXU Electric Company Project), 5.75%, due 5/1/36 | 2,991,315 | |||||||||
1,000,000 | Dallas-Fort Worth, Texas, International Airport Revenue, (XLCA Insured) Series A, 5.00%, due 11/1/14 | 1,024,120 | |||||||||
1,100,000 | Harris County, Texas, Municipal Utility District No. 368, (RDN Insured) 6.125%, due 9/1/29 | 1,215,236 | |||||||||
1,495,000 | Midtown Redevelopment Authority, Texas Tax Increment Contract Revenue (AMBAC Insured), 5.00%, due 1/1/20 | 1,557,835 | |||||||||
8,655,172 | |||||||||||
Virginia - 3.1% | |||||||||||
Virginia Port Authority: Commonwealth Port Fund Revenue Bonds, (2002 Resolution) | |||||||||||
1,315,000 | 5.00%, due 7/1/12 | 1,384,643 | |||||||||
Port Facilities Revenue (MBIA Insured) | |||||||||||
1,665,000 | 5.25%, due 7/1/18 | 1,761,170 | |||||||||
3,145,813 | |||||||||||
Wisconsin - 5.5% | |||||||||||
1,000,000 | Milwaukee County, Wisconsin, Airport Revenue, (FGIC Insured), Series A 5.75%, due 12/1/25 | 1,054,540 | |||||||||
1,050,000 | Milwaukee, Wisconsin, Redevelopment Authority Revenue, (Science Education Consortium Project), Series A 5.125%, due 8/1/15 | 1,028,213 |
Shares or Principal Amount | Value | ||||||||||
Wisconsin - (continued) | |||||||||||
Wisconsin Health and Educational Facilities Authority Revenue Bonds (Marshfield Clinic), Series A: | |||||||||||
500,000 | 5.00%, due 2/15/11 | $ | 513,215 | ||||||||
250,000 | 5.00%, due 2/15/12 | 256,158 | |||||||||
Wisconsin Health and Educational Facilities Authority Revenue Bonds, (Wheaton Franciscan Services, Inc. System), Series A: | |||||||||||
$ | 765,000 | 5.00%, due 8/15/09 | $ | 785,433 | |||||||
2,000,000 | 5.125%, due 8/15/33 | 2,027,140 | |||||||||
5,664,699 | |||||||||||
Total Municipal Securities (cost $100,805,081) | 99,843,339 | ||||||||||
Short-Term Municipal Securities - 1.9% | |||||||||||
California - 1.0% | |||||||||||
1,000,000 | Los Angeles Regional Airport Improvements Corp. Lease Revenue, (Sublease - L.A. International) Variable Rate, 3.79%, 12/1/25 | 1,000,000 | |||||||||
Pennsylvania - 0.1% | |||||||||||
100,000 | Montgomery County, Pennsylvania Industrial Development Authority Revenue, (Gloria Dei Project) Variable Rate, 3.81%, 1/1/23 | 100,000 | |||||||||
Texas - 0.5% | |||||||||||
200,000 | North Central Texas Health Facility Development Corp. Revenue (Presbyterian Medical Center), Series D Variable Rate, 3.79%, 12/1/15 | 200,000 | |||||||||
300,000 | San Antonio, Texas, Water System Subordinate Lien Revenue and Refunding Bonds, (MBIA Insured), Series A Variable Rate, 3.81%, 5/15/33 | 300,000 | |||||||||
500,000 | |||||||||||
Washington - 0.3% | |||||||||||
400,000 | Washington State Housing Finance Commission, Nonprofit Revenue Bonds (Annie Wright School Project) Variable Rate, 3.74%, 12/1/23 | 400,000 | |||||||||
Total Short-Term Municipal Securities | (amortized cost $2,000,000) | 2,000,000 | |||||||||
Total Investments (total cost $102,805,081) – 99.2% | 101,843,339 | ||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.8% | 797,521 | ||||||||||
Net Assets – 100% | $ | 102,640,860 |
ACA - American Capital Access Corp.
ADED-GTD - Arkansas Department of Economic Development - Guaranteed
AMBAC - American Municipal Bond Assurance Corp.
CIFG - CDC IXIS Financial Guaranty Group
FGIC - Financial Guaranty Insurance Co.
FSA - Financial Security Assurance, Inc.
MBIA - Municipal Bond Investors Assurance Corp.
Q-SBLF - Qualified - School Bond Loan Fund
RDN - Radian Asset Assurance, Inc.
XLCA - XL Capital Assurance, Inc.
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2006 11
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.
Ron Speaker
portfolio manager
Performance Overview
For the six-month period ended April 30, 2006, Janus Flexible Bond Fund returned 0.64%, outperforming its benchmark, the Lehman Brothers Aggregate Bond Index, which returned 0.56%.
Rising interest rates have overshadowed the fixed-income markets in recent months, as the Federal Reserve (Fed) continued to tighten credit conditions against a backdrop of resilient economic growth and persistent inflation concerns. The Fed raised overnight rates by 100 basis points during the six-month period ending April 30, 2006, taking the Federal Funds rate to 4.75%. This brings the number of Fed rate hikes since the summer of 2004 to fourteen, for a total of 375 basis points.
Despite this steady tightening, the economy continues to grow at a healthy pace. Inflation-adjusted GDP growth rebounded to a vigorous 4.8% annual rate in the first quarter of 2006, after moderating somewhat in the fourth quarter. Consumer confidence reached its highest level in nearly four years in April, despite elevated energy prices, and housing market activity remains relatively strong. Furthermore, corporate profits remain healthy and payroll employment continues to expand. Despite these encouraging developments, the spike in energy prices poses a risk for the economic outlook. After retreating from their post-hurricane levels last winter, crude oil prices tested new highs in April, exceeding $70 per barrel. Consumers in some U.S. cities are paying close to $3.00 per gallon at the pump. Higher energy prices contributed to a 0.4% rise in the overall consumer price index for March, while the closely-watched core inflation rate showed a w orrisome acceleration.
Inflation concerns have dashed the hopes of many investors looking for a near-term end to Fed monetary tightening. Late in 2005, investors had welcomed signs of moderating fuel prices, and had found encouragement from Fed policy memos that no longer used the word "accommodative" to describe the current level of interest rates. As the year came to a close, tempered inflation expectations and hopes for a pause in Fed credit tightening helped ease upward pressure on the longer end of the Treasury market. As a result, the 10-year Treasury yield ended the year at 4.40%, up only modestly from its third quarter close and below the yield on the 2-year Treasury note. This yield curve inversion sent tremors through the financial markets, given the historical correlation between such inversions and economic recessions. Nonetheless, many astute investors recognized that moderate long-term yields in part reflected external market changes, as well as robu st foreign demand for U.S. debt.
The yield curve regained its upward orientation in the first four months of 2006, as central bank policymakers continued to warn of inflation risks, particularly in the labor and commodity markets. According to the Fed's official statement from the March meeting of the Federal Reserve Open Market Committee, policymakers believed that "some further policy firming may be needed" to balance the risks to sustainable economic growth and price stability. The market began to price in the prospect of another Fed rate increase in May, and uncertainty as to the extent of additional monetary tightening
contributed to market volatility. Despite some mixed signals from new Fed Chairman Bernard Bernanke, many investors think at least one or two additional rate hikes are likely in the summer. Against this backdrop, yields have moved higher across the maturity spectrum, due in part to reduced foreign demand for U.S. debt. The 10-year Treasury yield ended April at 5.07%, up over twenty basis points from its levels at the start of the month.
Strategy in This Environment
Throughout this period, the Fund benefited from its flexible investment approach, which enabled us to remain nimble and respond to changing market pressures while providing investors with a solid return and mitigating risk. We maintained a balanced portfolio with exposure to Treasury and agency bonds, higher quality corporate issues and mortgage-backed securities. We also held a small but carefully targeted weighting in high-yield securities chosen through our rigorous, hands-on research efforts. High-yield securities have outperformed other areas of the fixed-income market, as spreads continue to tighten against a backdrop of healthy economic growth and reduced credit concerns.
Fund performance also benefited from our efforts to insulate investors from interest rate volatility, particularly the steps we took to shorten the relative duration of our holdings. At the same time, we maintained a slightly reduced weighting as compared to the Index in collateralized mortgage obligations. Backed by a pool of mortgages, these securities tend to be less sensitive to interest rate changes than other fixed-income securities.
While the overall Fund composition did not change dramatically during the period, we added some exposure to bank-originated loans, including investments in retailer Neiman Marcus and paper products manufacturer Georgia Pacific. Bank-originated loans are considered to be better quality instruments, since they have a higher claim on corporate assets than do most of the corporate securities we typically hold. Yet they also provide an adjustable rate structure, as well as an extra spread allowance to help compensate investors for their credit exposure. Consequently, we believe these securities offer an attractive mix of mitigated risk and positive return potential, particularly at their current valuations.
Several High-Yield Investments Benefit Performance
Results benefited from solid performance by a number of our high-yield investments, particularly shorter-dated securities with maturities of one year or less. Standouts included our investment in SunGard Data Systems, a software company that provides business solutions to financial services companies, universities and the public sector. SunGard was bought out by a private equity consortium last August, and has continued to
12 Janus Bond & Money Market Funds April 30, 2006
(unaudited)
garner new business, supplying financial and modeling software to everyone from Raymond James Financial to Bank of America. Our Fresenius Finance bonds also aided performance. The financial subsidiary of Germany's Fresenius AG, the world's largest provider of kidney dialysis services, Fresenius recently completed a new high-yield offering, using the proceeds to refinance its higher-rate debt.
Another standout was our investment in Resona, an Osaka-based bank that has benefited from strong performance by the Nikkei 225 and an improved Japanese economic outlook. In December, the company's credit was put on watch list for a possible upgrade, in recognition of improved earnings and asset quality. Resona remains one of our largest holdings.
Treasury Bonds and Select Investment-Grade Securities Weigh on Results
On the downside, our significant weighting in Treasury bonds proved detrimental in the higher interest rate environment. Additionally, we suffered from our stake in other interest rate-sensitive holdings, including agency bonds and longer-dated, high quality corporate issues, such as our investments in OneAmerica Financial, ZFS Finance and Teva Pharmaceuticals. A flood of new supply contributed to widening spreads in the investment-grade market, as corporations hurried to issue or refinance debt ahead of prospective interest rate increases.
Our investment in General Motors Acceptance Corporation (GMAC) also proved a negative for the period. The financing arm of General Motors, GMAC has been overshadowed by the troubles of its parent company, which has struggled with cash
outflows, falling vehicle sales and labor unrest at one of its suppliers. Nonetheless, we were encouraged by news of GMAC's planned sale to Cerberus Capital Management, a private equity group, for $14 billion in cash. Freed from the overhang of its parent company's credit problems, GMAC should be able to raise capital at a more advantageous rate, in our opinion. This will help the company capitalize on its global footprint and strong presence in the automotive, mortgage and unsecured consumer lending businesses. Despite the underlying fundamentals supporting GMAC itself, we recognize that the automotive industry faces considerable challenges. For this reason, the Fund remains substantially underweight in automotive credits.
Strategy in the Months Ahead
Looking ahead, we caution that the fixed-income market could remain volatile as investors try to assess the outlook for Fed monetary policy. Despite the uncertainty over interest rates, we remain positive on the outlook for bondholders. We think valuations and spreads in the Treasury market appear more attractive than they did at the beginning of the year, and underlying credit quality remains relatively sound. Nonetheless, tight spreads have made us more cautious on the outlook for high-yield securities. We will continue to rely on intensive research and exacting financial analysis as we select investments for our portfolio. At the same time, we will continue our nimble investment approach, alert and ready to respond to changing market pressures seeking to provide our investors solid return and mitigated risk.
Thank you for your investment in Janus Flexible Bond Fund.
Janus Flexible Bond Fund At a Glance
Fund Profile
April 30, 2006 | |||||||
Weighted Average Maturity | 6.5 Years | ||||||
Average Modified Duration* | 4.2 Years | ||||||
30-Day Current Yield** | 4.56 | % | |||||
Weighted Average Fixed Income Credit Rating | AA | ||||||
Number of Bonds/Notes | 240 |
*A theoretical measure of price volatility
**Yield will fluctuate
Ratings† Summary – (% of Net Assets)
April 30, 2006 | |||||||
AAA | 70.8 | % | |||||
AA | 2.8 | % | |||||
A | 5.1 | % | |||||
BBB | 11.9 | % | |||||
BB | 4.0 | % | |||||
B | 2.5 | % | |||||
Other | 2.9 | % |
†Rated by Standard & Poor's
Significant Areas of Investment – (% of Net Assets) | Asset Allocation – (% of Net Assets) | ||||||
As of April 30, 2006 | As of April 30, 2006 | ||||||
![]() | ![]() | ||||||
Janus Bond & Money Market Funds April 30, 2006 13
Janus Flexible Bond Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | |||||||||||||||||||
Janus Flexible Bond Fund | 0.64 | % | 0.72 | % | 5.16 | % | 6.14 | % | 7.48 | % | |||||||||||||
Lehman Brothers Aggregate Bond Index | 0.56 | % | 0.71 | % | 5.16 | % | 6.33 | % | 7.54 | %** | |||||||||||||
Lipper Quartile | N/A | 2 | nd | 1 | st | 1 | st | 1 | st | ||||||||||||||
Lipper Ranking - based on total return for Intermediate Investment Grade Debt Funds | N/A*** | 172/473 | 74/320 | 35/147 | 6/25 |
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedule of Investments for index definitions.
Total return includes reinvestment of dividends and capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares.
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.
* The Fund's inception date – July 7, 1987
** The Lehman Brothers Aggregate Bond Index's since inception returns are calculated from June 30, 1987.
*** The Fund's fiscal year-to-date Lipper ranking is not available.
See "Explanations of Charts, Tables and Financial Statements."
Bond funds 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 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's portfolio may differ significantly from the securities held in the index. The index is not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
Janus Capital Management LLC has contractually agreed to waive the Fund's total operating expenses to levels indicated in the prospectus until at least March 1, 2007. Without such waivers, the Fund's yield and total return would have been lower.
The Fund's total operating expenses did not exceed the expense limit so no waivers were in effect for the most recent period presented.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
The Fund's prospectus allows for investment in non-investment grade securities.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,006.40 | $ | 4.13 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.68 | $ | 4.16 |
*Expenses are equal to the annualized expense ratio of 0.83%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital.
14 Janus Bond & Money Market Funds April 30, 2006
Janus Flexible Bond Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Corporate Bonds - 28.5% | |||||||||||
Advertising Agencies - 0.3% | |||||||||||
$ | 2,125,000 | Omnicom Group, Inc., 5.90% company guaranteed notes, due 4/15/16 | $ | 2,073,335 | |||||||
Agricultural Operations - 0.2% | |||||||||||
1,421,000 | Bunge Limited Finance Corp., 4.375% company guaranteed notes, due 12/15/08 | 1,379,922 | |||||||||
Cable Television - 0.9% | |||||||||||
3,900,000 | Cox Communications, Inc., 4.625% notes, due 1/15/10 | 3,748,115 | |||||||||
CSC Holdings, Inc.: | |||||||||||
912,193 | 6.58%, bank loan, due 3/30/13‡ | 915,358 | |||||||||
1,368,290 | 6.67%, bank loan, due 3/30/13‡ | 1,373,038 | |||||||||
912,193 | 6.74%, bank loan, due 3/30/13‡ | 915,358 | |||||||||
6,951,869 | |||||||||||
Casino Hotels - 0.4% | |||||||||||
2,750,000 | Hard Rock Hotel, Inc., 8.875% notes, due 6/1/13 | 2,956,250 | |||||||||
Cellular Telecommunications - 0.7% | |||||||||||
Nextel Communications, Inc.: | |||||||||||
2,200,000 | 6.875%, senior notes, due 10/31/13 | 2,258,049 | |||||||||
1,350,000 | 7.375%, senior notes, due 8/1/15 | 1,409,366 | |||||||||
2,000,000 | Rogers Wireless Communications, Inc. 7.61625%, secured notes, due 12/15/10‡ | 2,060,000 | |||||||||
5,727,415 | |||||||||||
Chemicals - Specialty - 0.1% | |||||||||||
520,000 | Lubrizol Corp., 6.50% debentures, due 10/1/34 | 504,259 | |||||||||
Commercial Banks - 0.6% | |||||||||||
850,000 | Commonwealth Bank of Australia, 6.024% bonds, due 3/15/49 (144A)‡ | 828,726 | |||||||||
2,500,000 | Shinsei Bank, Ltd., 6.418% bonds, due 1/20/49 (144A)‡ | 2,427,405 | |||||||||
1,950,000 | Skandinaviska Enskilda Banken AB, 5.471% unsecured notes, due 3/29/49 (144A)‡ | 1,824,933 | |||||||||
5,081,064 | |||||||||||
Computer Services - 0.5% | |||||||||||
1,076,831 | Affiliated Computer Services, Inc. 6.42938%, bank loan, due 8/20/13‡ | 1,084,907 | |||||||||
SunGard Data Systems, Inc.: | |||||||||||
1,320,000 | 9.125%, senior unsecured notes due 8/15/13 (144A) | 1,409,100 | |||||||||
1,648,000 | 10.25%, senior subordinated notes due 8/15/15(144A) | 1,771,600 | |||||||||
4,265,607 | |||||||||||
Computers - Peripheral Equipment - 0% | |||||||||||
Candescent Technologies Corp.: | |||||||||||
4,250,000 | 8.00%, convertible senior subordinated debentures, due 5/1/03 (144A)‡,º,ºº,§ | 0 | |||||||||
2,750,000 | 8.00%, convertible senior subordinated debentures, due 5/1/03 (144A)‡,##,ºº,§ | 0 | |||||||||
Consumer Products - Miscellaneous - 0.2% | |||||||||||
1,600,000 | Fortune Brands, Inc., 4.875% notes, due 12/1/13 | 1,492,746 | |||||||||
Containers - Metal and Glass - 0.5% | |||||||||||
2,500,000 | Owens-Brockway Glass Container, Inc. 8.875%, company guaranteed notes due 2/15/09 | 2,600,000 |
Shares or Principal Amount | Value | ||||||||||
Containers - Metal and Glass - (continued) | |||||||||||
$ | 1,720,000 | Owens-Illinois, Inc., 7.35% senior notes, due 5/15/08 | $ | 1,728,600 | |||||||
4,328,600 | |||||||||||
Cosmetics and Toiletries - 1.0% | |||||||||||
5,150,000 | Gillette Co., 4.125% senior notes, due 8/30/07**,‡ | 5,063,362 | |||||||||
3,000,000 | Procter & Gamble Co., 4.75% senior notes, due 6/15/07 | 2,984,415 | |||||||||
8,047,777 | |||||||||||
Dialysis Centers - 0.3% | |||||||||||
Fresenius Medical Care AG & Co.: | |||||||||||
616,513 | 6.3544%, bank loan, due 3/31/11‡ | 616,254 | |||||||||
331,969 | 6.3544%, bank loan, due 3/31/11‡ | 331,829 | |||||||||
1,422,723 | 6.4031%, bank loan, due 3/31/11‡ | 1,422,126 | |||||||||
2,370,209 | |||||||||||
Diversified Financial Services - 1.3% | |||||||||||
General Electric Capital Corp.: | |||||||||||
1,500,000 | 4.125%, senior unsecured notes due 9/1/09 | 1,445,861 | |||||||||
3,250,000 | 3.75%, notes, due 12/15/09 | 3,079,742 | |||||||||
2,650,000 | 4.375%, notes, due 11/21/11 | 2,505,922 | |||||||||
4,000,000 | Zurich Financial Services USA, 6.45% bonds, due 12/15/65 (144A)‡ | 3,767,763 | |||||||||
10,799,288 | |||||||||||
Diversified Operations - 0.1% | |||||||||||
525,000 | Covalence Specialty Materials Corp., 10.25% senior subordinated notes due 3/1/16 (144A) | 540,750 | |||||||||
Diversified Operations - Commercial Services - 0.2% | |||||||||||
1,698,388 | Avis Rent A Car Systems, Inc., 0% bank loan, due 4/1/13‡ | 1,697,777 | |||||||||
Electric - Integrated - 2.9% | |||||||||||
1,790,000 | Allegheny Energy Supply Company LLC 8.25%, senior unsecured notes due 4/15/12 (144A)§ | 1,946,625 | |||||||||
2,775,000 | Dominion Resources, Inc., 5.125% senior notes, due 12/15/09 | 2,725,192 | |||||||||
MidAmerican Energy Holdings Co.: | |||||||||||
1,900,000 | 3.50%, senior notes, due 5/15/08 | 1,827,450 | |||||||||
1,400,000 | 6.125%, bonds, due 4/1/36 (144A) | 1,335,475 | |||||||||
4,500,000 | Monongahela Power Co., 6.70% first mortgage notes, due 6/15/14 | 4,708,800 | |||||||||
1,785,000 | Pacific Gas and Electric Co., 4.80% unsecured notes, due 3/1/14 | 1,676,067 | |||||||||
Southern California Edison Co.: | |||||||||||
4,500,000 | 7.625%, notes, due 1/15/10 | 4,784,449 | |||||||||
1,575,000 | 6.00%, first mortgage notes, due 1/15/34 | 1,516,268 | |||||||||
TXU Corp.: | |||||||||||
2,385,000 | 4.80%, senior notes, due 11/15/09 | 2,298,033 | |||||||||
1,150,000 | 6.55%, notes, due 11/15/34 | 1,032,606 | |||||||||
23,850,965 | |||||||||||
Electronic Components - Semiconductors - 0.2% | |||||||||||
1,937,000 | Advanced Micro Devices, Inc., 7.75% senior notes, due 11/1/12 | 2,029,008 | |||||||||
Finance - Auto Loans - 0.5% | |||||||||||
1,800,000 | Ford Motor Credit Co., 0% notes, due 4/15/12‡ | 1,801,993 | |||||||||
2,000,000 | General Motors Acceptance Corp., 6.125% notes, due 8/28/07 | 1,944,068 | |||||||||
3,746,061 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2006 15
Janus Flexible Bond Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Finance - Commercial - 0.5% | |||||||||||
$ | 3,800,000 | CIT Group, Inc., 3.65% senior notes, due 11/23/07 | $ | 3,706,121 | |||||||
Finance - Consumer Loans - 1.0% | |||||||||||
3,389,000 | John Deere Capital Corp., 4.875% notes, due 10/15/10 | 3,300,052 | |||||||||
3,500,000 | Household Finance Corp., 4.625% notes, due 1/15/08 | 3,460,124 | |||||||||
1,750,000 | SLM Corp., 4.92% notes, due 1/31/14‡ | 1,683,028 | |||||||||
8,443,204 | |||||||||||
Finance - Investment Bankers/Brokers - 1.1% | |||||||||||
E*Trade Financial Corp.: | |||||||||||
770,000 | 8.005%, senior notes, due 6/15/11 | 795,025 | |||||||||
1,250,000 | 7.375%, senior notes, due 9/15/13 | 1,271,875 | |||||||||
Goldman Sachs Group, Inc.: | |||||||||||
1,250,000 | 5.35%, senior notes, due 1/15/16 | 1,194,813 | |||||||||
1,275,000 | 6.45%, subordinated notes, due 5/1/36 | 1,259,884 | |||||||||
Jefferies Group, Inc.: | |||||||||||
2,055,000 | 5.50%, senior notes, due 3/15/16 | 1,928,372 | |||||||||
3,540,000 | 6.25%, senior unsecured notes due 1/15/36 | 3,234,076 | |||||||||
9,684,045 | |||||||||||
Finance - Mortgage Loan Banker - 0.4% | |||||||||||
Residential Capital Corp.: | |||||||||||
835,000 | 6.00%, company guaranteed notes due 2/22/11 | 817,913 | |||||||||
2,088,000 | 6.50%, senior notes, due 4/17/13 | 2,081,105 | |||||||||
2,899,018 | |||||||||||
Food - Diversified - 1.0% | |||||||||||
Dole Food Co.: | |||||||||||
198,141 | 4.92%, bank loan, due 4/11/13‡ | 198,266 | |||||||||
416,097 | 6.6875%, bank loan, due 4/11/13‡ | 416,488 | |||||||||
1,456,339 | 6.6875%, bank loan, due 4/12/13‡ | 1,455,436 | |||||||||
29,721 | 8.50%, bank loan, due 4/12/13‡ | 29,749 | |||||||||
29,721 | 8.50%, bank loan, due 4/12/13‡ | 29,703 | |||||||||
2,950,000 | General Mills, Inc., 3.875% notes, due 11/30/07 | 2,880,047 | |||||||||
4,350,000 | Kellogg Co., 2.875% senior notes, due 6/1/08 | 4,132,782 | |||||||||
9,142,471 | |||||||||||
Food - Retail - 0.1% | |||||||||||
425,000 | Stater Brothers Holdings, Inc., 8.125% senior notes, due 6/15/12 | 425,000 | |||||||||
Food - Wholesale/Distribution - 0% | |||||||||||
Roundy's Supermarket, Inc.: | |||||||||||
139,715 | 7.72%, bank loan, due 10/27/11‡ | 141,461 | |||||||||
139,016 | 7.87%, bank loan, due 10/27/11‡ | 140,754 | |||||||||
282,215 | |||||||||||
Foreign Government - 0.4% | |||||||||||
3,300,000 | Canada Mortgage & Housing Corp., 4.80% local government guaranteed notes due 10/1/10 | 3,246,121 | |||||||||
Gas - Distribution - 0.9% | |||||||||||
1,100,000 | Colorado Interstate Gas Co., 6.80% senior notes, due 11/15/15 (144A) | 1,100,800 | |||||||||
2,130,000 | Southern Star Central Corp., 6.00% notes, due 6/1/16 (144A) | 2,100,713 | |||||||||
3,750,000 | Southwest Gas Corp., 7.625% senior notes, due 5/15/12 | 4,014,164 | |||||||||
7,215,677 |
Shares or Principal Amount | Value | ||||||||||
Independent Power Producer - 0.5% | |||||||||||
$ | 415,958 | Mirant North America LLC, 6.59875% bank loan, due 1/3/13‡ | $ | 419,373 | |||||||
NRG Energy, Inc.: | |||||||||||
3,126,448 | 6.82%, bank loan, due 9/30/12‡ | 3,159,025 | |||||||||
232,192 | 6.97938%, bank loan, due 9/30/12‡ | 234,321 | |||||||||
630,000 | 7.375%, company guaranteed notes due 2/1/16 | 635,513 | |||||||||
4,448,232 | |||||||||||
Investment Management and Advisory Services - 1.3% | |||||||||||
Ameriprise Financial, Inc: | |||||||||||
1,250,000 | 5.35%, senior unsecured notes due 11/15/10 | 1,234,153 | |||||||||
1,025,000 | 5.65%, senior unsecured note due 11/15/15 | 996,901 | |||||||||
3,500,000 | Franklin Resources, Inc., 3.70% notes, due 4/15/08 | 3,388,290 | |||||||||
Nuveen Investments: | |||||||||||
2,050,000 | 5.00%, senior notes, due 9/15/10 | 1,972,585 | |||||||||
2,800,000 | 5.50%, senior notes, due 9/15/15 | 2,650,664 | |||||||||
10,242,593 | |||||||||||
Life and Health Insurance - 0.8% | |||||||||||
3,320,000 | Americo Life, Inc., 7.875% notes, due 5/1/13 (144A)§ | 3,321,733 | |||||||||
2,800,000 | StanCorp Financial Group, Inc., 6.875% senior notes, due 10/1/12 | 2,924,508 | |||||||||
6,246,241 | |||||||||||
Medical - Drugs - 0.1% | |||||||||||
1,235,000 | Teva Pharmaceutical Finance Company LLC 6.15%, company guaranteed notes due 2/1/36 | 1,141,044 | |||||||||
Medical - HMO - 1.0% | |||||||||||
Coventry Health Care, Inc.: | |||||||||||
1,540,000 | 5.875%, senior notes, due 1/15/12 | 1,509,200 | |||||||||
2,000,000 | 6.125%, senior notes, due 1/15/15 | 1,955,000 | |||||||||
4,500,000 | UnitedHealth Group, Inc., 3.30% senior notes, due 1/30/08 | 4,344,327 | |||||||||
7,808,527 | |||||||||||
Medical - Hospitals - 0.2% | |||||||||||
1,300,000 | HCA, Inc., 6.50% bonds, due 2/15/16 | 1,249,981 | |||||||||
Miscellaneous Manufacturing - 0.1% | |||||||||||
1,061,815 | Nutro Products, Inc., 0% bank loan, due 4/26/13‡ | 1,071,775 | |||||||||
Motorcycle and Motor Scooter Manufacturing - 0.3% | |||||||||||
2,750,000 | Harley-Davidson, Inc., 3.625% notes, due 12/15/08 (144A) | 2,633,923 | |||||||||
Multi-Line Insurance - 0.1% | |||||||||||
800,000 | Horace Mann Educators Corp., 6.85% senior notes, due 4/15/16 | 793,178 | |||||||||
Multimedia - 0.2% | |||||||||||
409,940 | Entravision Communications Corp., 6.49% bank loan, due 3/7/13‡ | 412,842 | |||||||||
850,000 | Viacom, Inc., 6.875% bonds, due 4/30/36 (144A) | 837,692 | |||||||||
1,250,534 | |||||||||||
Mutual Insurance - 0.2% | |||||||||||
1,950,000 | North Front, 5.81% bonds, due 12/15/24 (144A)‡ | 1,868,443 |
See Notes to Schedules of Investments and Financial Statements.
16 Janus Bond & Money Market Funds April 30, 2006
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Non-Hazardous Waste Disposal - 0.7% | |||||||||||
$ | 2,950,000 | Allied Waste North America, Inc., 6.50% secured notes, due 11/15/10 | $ | 2,913,125 | |||||||
2,450,000 | Waste Management, Inc., 7.375% senior notes, due 8/1/10 | 2,601,533 | |||||||||
5,514,658 | |||||||||||
Oil Companies - Exploration and Production - 0.7% | |||||||||||
1,225,000 | Kerr-McGee Corp., 6.95% secured notes, due 7/1/24 | 1,230,499 | |||||||||
1,080,000 | Magnum Hunter Resources, Inc., 9.60% company guaranteed notes, due 3/15/12 | 1,152,900 | |||||||||
Pemex Project Funding Master Trust: | |||||||||||
610,000 | 5.75%, company guaranteed notes due 12/15/15 | 578,280 | |||||||||
500,000 | 8.625%, company guaranteed notes due 2/1/22‡ | 579,000 | |||||||||
1,280,000 | Pioneer Natural Resources Co., 6.875% bonds, due 5/1/18 | 1,282,688 | |||||||||
1,025,000 | Ras Laffan LNG III, 5.838% bonds, due 9/30/27 (144A) | 946,526 | |||||||||
5,769,893 | |||||||||||
Oil Companies - Integrated - 0.6% | |||||||||||
5,250,000 | ChevronTexaco Capital Co., 3.50% company guaranteed notes, due 9/17/07 | 5,129,854 | |||||||||
Oil Refining and Marketing - 0.3% | |||||||||||
Enterprise Products Operating L.P.: | |||||||||||
1,475,000 | 4.95%, senior notes, due 6/1/10 | 1,427,902 | |||||||||
1,250,000 | Series B, 6.375% company guaranteed notes, due 2/1/13 | 1,268,424 | |||||||||
2,696,326 | |||||||||||
Paper and Related Products - 0.3% | |||||||||||
Georgia Pacific Corp., Inc.: | |||||||||||
2,000,246 | 6.88%, bank loan, due 12/20/12‡ | 2,010,407 | |||||||||
94,762 | 6.97938%, bank loan, due 12/20/12‡ | 95,243 | |||||||||
2,105,650 | |||||||||||
Pipelines - 0.6% | |||||||||||
3,305,000 | El Paso Corp., 7.625% notes, due 9/1/08 (144A)§ | 3,362,837 | |||||||||
1,810,000 | Panhandle Eastern Pipe Line Co., 4.80% senior notes, due 8/15/08 | 1,778,119 | |||||||||
5,140,956 | |||||||||||
Property and Casualty Insurance - 1.0% | |||||||||||
3,750,000 | Kingsway America, Inc., 7.50% senior notes, due 2/1/14 | 3,733,924 | |||||||||
4,150,000 | Ohio Casualty Corp., 7.30% senior unsecured notes, due 6/15/14 | 4,266,951 | |||||||||
8,000,875 | |||||||||||
Publishing - Periodicals - 0.2% | |||||||||||
1,475,000 | Dex Media East LLC, 12.125% company guaranteed notes, due 11/15/12 | 1,668,594 | |||||||||
Reinsurance - 0.2% | |||||||||||
1,400,000 | Berkshire Hathaway, Inc., 4.625% company guaranteed notes, due 10/15/13 | 1,312,387 | |||||||||
Retail - Building Products - 0.3% | |||||||||||
2,088,000 | Home Depot, Inc., 5.20% senior notes, due 3/1/11 | 2,066,928 | |||||||||
Retail - Regional Department Stores - 0% | |||||||||||
373,101 | Neiman Marcus Group, Inc., 7.34% bank loan, due 3/13/13‡ | 377,899 |
Shares or Principal Amount | Value | ||||||||||
Retail - Restaurants - 0.1% | |||||||||||
$ | 463,408 | Dunkin Brands, Inc., 7.32563% bank loan, due 2/6/13‡ | $ | 463,408 | |||||||
Savings/Loan/Thrifts - 0.5% | |||||||||||
625,000 | Sovereign Bancorp, Inc., 4.80% senior notes, due 9/1/10 (144A) | 601,746 | |||||||||
2,085,000 | Webster Bank, 5.875% subordinated notes, due 1/15/13 | 2,048,192 | |||||||||
1,000,000 | Webster Capital Trust II, 10.00% company guaranteed notes, due 4/1/27 | 1,081,044 | |||||||||
3,730,982 | |||||||||||
Special Purpose Entity - 1.0% | |||||||||||
1,300,000 | Mitsubishi UFJ Financial Group, Inc., 6.346% company guaranteed notes, due 7/16/49‡ | 1,273,826 | |||||||||
3,200,000 | OneAmerica Financial Partners, 7.00% bonds, due 10/15/33 (144A) | 3,291,066 | |||||||||
3,375,000 | Resona Preferred Securities, Ltd., 7.191% bonds, due 12/29/49 (144A)‡ | 3,469,810 | |||||||||
8,034,702 | |||||||||||
Telephone - Integrated - 0.8% | |||||||||||
3,000,000 | BellSouth Corp., 4.75% senior unsecured notes, due 11/15/12 | 2,826,132 | |||||||||
3,350,000 | Deutsche Telekom International Finance B.V., 3.875%, company guaranteed notes due 7/22/08** | 3,247,051 | |||||||||
750,000 | Qwest Corp., 7.74125% senior notes, due 6/15/13‡ | 816,563 | |||||||||
6,889,746 | |||||||||||
Transportation - Railroad - 0.1% | |||||||||||
1,050,000 | BNSF Funding Trust I, 6.613% company guaranteed notes, due 12/15/55‡ | 1,009,035 | |||||||||
Total Corporate Bonds (cost $236,307,316) | 231,553,138 | ||||||||||
Foreign Bonds - 0.2% | |||||||||||
Cable Television - 0.2% | |||||||||||
EUR | 1,300,000 | Telenet Communications N.V., 9.00% senior notes, due 12/15/13 (144A)** (cost $1,655,718) | 1,820,499 | ||||||||
Mortgage Backed Securities - 36.3% | |||||||||||
Finance - Investment Bankers/Brokers - 0.4% | |||||||||||
$ | 3,764,180 | Credit Suisse First Boston Mortgage Securities Corp., 5.00%, due 8/25/20 | 3,680,072 | ||||||||
U.S. Government Agencies - 35.9% | |||||||||||
Fannie Mae: | |||||||||||
4,124,270 | 7.00%, due 9/1/14 | 4,244,167 | |||||||||
3,116,081 | 6.00%, due 6/1/17 | 3,157,291 | |||||||||
2,694,260 | 5.00%, due 11/1/18 | 2,628,514 | |||||||||
1,799,052 | 4.50%, due 5/1/19 | 1,715,596 | |||||||||
4,860,086 | 4.50%, due 5/1/19 | 4,634,632 | |||||||||
5,779,764 | 4.50%, due 5/1/19 | 5,511,647 | |||||||||
1,827,527 | 4.00%, due 6/1/19 | 1,703,776 | |||||||||
550,111 | 5.50%, due 8/1/19 | 546,342 | |||||||||
4,942,371 | 5.00%, due 8/1/19 | 4,818,336 | |||||||||
1,059,654 | 5.50%, due 9/1/19 | 1,052,394 | |||||||||
290,906 | 5.50%, due 9/1/19 | 289,074 | |||||||||
1,392,090 | 4.00%, due 2/1/20 | 1,296,506 | |||||||||
720,431 | 4.50%, due 4/1/20 | 686,284 | |||||||||
6,351,687 | 5.50%, due 9/1/24 | 6,222,212 | |||||||||
4,480,677 | 5.00%, due 5/1/25 | 4,285,336 | |||||||||
1,089,707 | 7.00%, due 11/1/28 | 1,122,883 | |||||||||
1,204,419 | 6.50%, due 2/1/31 | 1,240,930 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2006 17
Janus Flexible Bond Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Mortgage Backed Securities - (continued) | |||||||||||
U.S. Government Agencies - (continued) | |||||||||||
Fannie Mae - (continued) | |||||||||||
$ | 2,416,083 | 7.00%, due 2/1/32 | $ | 2,489,640 | |||||||
2,291,686 | 6.50%, due 5/1/32 | 2,348,955 | |||||||||
1,012,419 | 6.50%, due 7/1/32 | 1,032,377 | |||||||||
9,023,184 | 5.50%, due 2/1/33 | 8,790,309 | |||||||||
1,819,801 | 6.50%, due 3/1/33 | 1,855,674 | |||||||||
3,815,563 | 5.50%, due 11/1/33 | 3,715,877 | |||||||||
4,658,663 | 5.00%, due 11/1/33 | 4,422,889 | |||||||||
2,747,753 | 5.50%, due 1/1/34 | 2,675,965 | |||||||||
4,329,395 | 5.50%, due 2/1/34 | 4,211,392 | |||||||||
11,265,182 | 5.00%, due 3/1/34 | 10,695,052 | |||||||||
4,726,177 | 5.00%, due 4/1/34 | 4,481,008 | |||||||||
1,814,908 | 5.00%, due 4/1/34 | 1,723,056 | |||||||||
3,838,087 | 3.887%, due 5/1/34 | 3,715,489 | |||||||||
3,837,498 | 5.00%, due 6/1/34 | 3,638,429 | |||||||||
2,050,750 | 4.50%, due 6/1/34 | 1,882,548 | |||||||||
7,478,630 | 6.00%, due 7/1/34 | 7,471,007 | |||||||||
1,646,443 | 5.00%, due 7/1/34 | 1,561,034 | |||||||||
2,409,353 | 6.50%, due 8/1/34 | 2,459,359 | |||||||||
471,673 | 6.50%, due 9/1/34 | 483,414 | |||||||||
1,031,723 | 5.50%, due 11/1/34 | 1,003,602 | |||||||||
8,947,080 | 5.50%, due 12/1/34 | 8,703,215 | |||||||||
4,026,693 | 5.50%, due 2/1/35 | 3,921,491 | |||||||||
4,695,032 | 5.50%, due 3/1/35 | 4,561,272 | |||||||||
1,389,159 | 5.00%, due 4/1/35 | 1,314,311 | |||||||||
1,121,434 | 4.50%, due 4/1/35 | 1,027,094 | |||||||||
6,071,032 | 5.00%, due 5/1/35 | 5,743,926 | |||||||||
4,443,639 | 5.50%, due 7/1/35 | 4,317,041 | |||||||||
2,284,559 | 4.694%, due 7/1/35 | 2,220,796 | |||||||||
2,557,834 | 4.43%, due 7/1/35 | 2,520,572 | |||||||||
3,797,589 | 6.00%, due 9/1/35 | 3,792,906 | |||||||||
1,751,801 | 6.50%, due 10/1/35 | 1,782,053 | |||||||||
3,194,199 | 6.00%, due 12/1/35 | 3,181,978 | |||||||||
517,880 | 7.00%, due 1/1/36 | 532,487 | |||||||||
2,233,089 | 7.00%, due 1/1/36 | 2,295,726 | |||||||||
2,017,297 | 6.50%, due 1/1/36 | 2,052,057 | |||||||||
2,813,708 | 7.00%, due 2/1/36 | 2,892,631 | |||||||||
5,272,155 | 7.00%, due 3/1/36 | 5,420,858 | |||||||||
4,402,124 | 6.00%, due 3/1/36 | 4,383,577 | |||||||||
Federal Home Loan Bank System: | |||||||||||
3,611,083 | 4.75%, due 10/25/10 | 3,533,219 | |||||||||
4,657,155 | 5.27%, due 12/28/12 | 4,600,214 | |||||||||
3,117,664 | 5.50%, due 12/1/34 | 3,033,564 | |||||||||
3,758,237 | 5.50%, due 12/1/34 | 3,656,856 | |||||||||
Freddie Mac: | |||||||||||
3,281,228 | 6.50%, due 3/1/13 | 3,317,052 | |||||||||
1,431,626 | 5.50%, due 1/1/16 | 1,420,566 | |||||||||
2,171,532 | 5.50%, due 1/1/18 | 2,154,505 | |||||||||
7,307,755 | 4.50%, due 2/1/18 | 6,971,102 | |||||||||
3,979,606 | 5.00%, due 9/1/18 | 3,876,766 | |||||||||
1,828,067 | 4.00%, due 4/1/19 | 1,702,928 | |||||||||
1,993,802 | 5.00%, due 2/1/20 | 1,938,975 | |||||||||
1,649,845 | 5.50%, due 2/1/21 | 1,635,483 | |||||||||
1,500,000 | 5.00%, due 4/1/21 | 1,458,348 | |||||||||
2,018,597 | 6.00%, due 11/1/33 | 2,015,716 | |||||||||
2,393,159 | 5.50%, due 11/1/33 | 2,330,875 | |||||||||
4,062,748 | 6.00%, due 2/1/34 | 4,070,090 | |||||||||
1,622,647 | 5.00%, due 5/1/34 | 1,537,736 | |||||||||
2,281,113 | 5.00%, due 5/1/34 | 2,161,746 | |||||||||
909,138 | 6.50%, due 7/1/34 | 928,821 |
Shares or Principal Amount | Value | ||||||||||
Mortgage Backed Securities - (continued) | |||||||||||
U.S. Government Agencies - (continued) | |||||||||||
Fannie Mae - (continued) | |||||||||||
$ | 414,880 | 6.50%, due 7/1/34 | $ | 423,947 | |||||||
474,759 | 6.50%, due 6/1/35 | 482,860 | |||||||||
6,972,652 | 5.50%, due 6/1/35 | 6,784,561 | |||||||||
15,879,034 | 5.00%, due 7/1/35 | 15,017,877 | |||||||||
2,609,553 | 5.00%, due 8/1/35 | 2,468,031 | |||||||||
1,263,408 | 5.50%, due 9/1/35 | 1,227,725 | |||||||||
3,946,476 | 5.50%, due 9/1/35 | 3,835,013 | |||||||||
4,197,588 | 5.50%, due 10/1/35 | 4,083,062 | |||||||||
Ginnie Mae: | |||||||||||
1,815,484 | 6.00%, due 2/15/33 | 1,823,314 | |||||||||
2,685,322 | 4.50%, due 10/15/33 | 2,506,699 | |||||||||
5,643,820 | 6.00%, due 10/20/34 | 5,650,101 | |||||||||
2,244,919 | 6.50%, due 2/20/35 | 2,288,124 | |||||||||
5,987,485 | 5.50%, due 3/20/35 | 5,855,098 | |||||||||
4,223,832 | 5.50%, due 5/20/35 | 4,130,441 | |||||||||
7,289,649 | 5.00%, due 10/15/35 | 6,989,497 | |||||||||
Total Mortgage Backed Securities (cost $305,877,274) | 296,067,971 | ||||||||||
Preferred Stock - 0.9% | |||||||||||
Finance - Other Services - 0.3% | |||||||||||
38,945 | Chevy Chase Preferred Capital Corp. Series A, convertible, 10.375% | 2,083,558 | |||||||||
REIT - Diversified - 0.3% | |||||||||||
96,600 | iStar Financial, Inc., 7.875% | 2,423,694 | |||||||||
Savings/Loan/Thrifts - 0.3% | |||||||||||
91,960 | Chevy Chase Bank FSB, 8.00% | 2,464,528 | |||||||||
Total Preferred Stock (cost $7,083,886) | 6,971,780 | ||||||||||
U.S. Government Agencies - 14.7% | |||||||||||
Fannie Mae: | |||||||||||
$ | 5,195,000 | 4.25%, due 9/15/07 | 5,132,395 | ||||||||
38,955,000 | 3.25%, due 11/15/07 | 37,868,779 | |||||||||
27,720,000 | 5.50%, due 3/15/11 | 27,973,887 | |||||||||
2,550,000 | 5.00%, due 3/15/16# | 2,476,506 | |||||||||
3,535,000 | 6.625%, due 11/15/30# | 4,035,719 | |||||||||
Freddie Mac: | |||||||||||
8,155,000 | 3.875%, due 6/15/08# | 7,950,024 | |||||||||
15,051,000 | 4.875%, due 2/17/09# | 14,947,148 | |||||||||
19,785,000 | 4.125%, due 7/12/10# | 18,960,480 | |||||||||
Total U.S. Government Agencies (cost $121,645,093) | 119,344,938 | ||||||||||
U.S. Treasury Notes/Bonds - 18.0% | |||||||||||
8,095,000 | 4.125%, due 8/15/08# | 7,972,628 | |||||||||
35,415,000 | 4.375%, due 11/15/08# | 34,987,540 | |||||||||
17,318,000 | 4.50%, due 2/15/09# | 17,147,522 | |||||||||
2,505,000 | 3.125%, due 4/15/09# | 2,385,131 | |||||||||
18,360,000 | 4.50%, due 2/28/11# | 18,024,361 | |||||||||
5,346,000 | 4.75%, due 3/31/11# | 5,303,815 | |||||||||
1,513,986 | 1.625%, due 1/15/15ÇÇ,# | 1,426,991 | |||||||||
12,750,000 | 4.50%, due 11/15/15# | 12,202,145 | |||||||||
3,280,000 | 4.50%, due 2/15/16# | 3,137,012 | |||||||||
6,405,000 | 8.875%, due 8/15/17# | 8,411,565 | |||||||||
6,220,000 | 8.875%, due 2/15/19# | 8,308,558 | |||||||||
6,555,000 | 7.25%, due 8/15/22# | 7,933,595 | |||||||||
11,759,000 | 6.25%, due 8/15/23# | 12,995,529 | |||||||||
4,134,000 | 5.25%, due 2/15/29# | 4,102,995 | |||||||||
1,648,000 | 6.25%, due 5/15/30# | 1,862,497 | |||||||||
Total U.S. Treasury Notes/Bonds (cost $150,820,663) | 146,201,884 |
See Notes to Schedules of Investments and Financial Statements.
18 Janus Bond & Money Market Funds April 30, 2006
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Other Securities - 18.1% | |||||||||||
147,008,374 | State Street Navigator Securities Lending Prime Portfolio† (cost $147,008,374) | $ | 147,008,374 | ||||||||
Time Deposit - 0.6% | |||||||||||
$ | 5,100,000 | ING Financial, ETD 4.86%, 5/1/06 (cost $5,100,000) | 5,100,000 | ||||||||
Total Investments (total cost $975,498,324) – 117.3% | 954,068,584 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (17.3)% | (140,943,456 | ) | |||||||||
Net Assets – 100% | $ | 813,125,128 |
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Australia | $ | 828,726 | 0.1 | % | |||||||
Belgium | 1,820,499 | 0.2 | % | ||||||||
Canada | 10,435,975 | 1.1 | % | ||||||||
Cayman Islands | 7,171,041 | 0.8 | % | ||||||||
Netherlands | 3,247,051 | 0.3 | % | ||||||||
Qatar | 946,526 | 0.1 | % | ||||||||
Sweden | 1,824,933 | 0.2 | % | ||||||||
United States†† | 927,793,833 | 97.2 | % | ||||||||
Total | $ | 954,068,584 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (81.3% excluding Short-Term Securities and Other Securities)
Forward Currency Contracts, Open
Currency Sold and Settlement Date | Currency Units Sold | Currency Value in $ U.S. | Unrealized Gain/(Loss) | ||||||||||||
Euro 6/28/06 | 1,400,000 | $ | 1,772,911 | $ | (40,327 | ) | |||||||||
Total | $ | 1,772,911 | $ | (40,327 | ) |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2006 19
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
portfolio manager
Performance Overview
Rising interest rates around the globe pressured fixed-income market returns during the six months ended April 30, 2006. The Federal Reserve (Fed) continued its tightening campaign by raising the Fed Funds target rate to 4.75%. This brought the total number of consecutive rate hikes to fifteen. In addition to the Fed, the European Central Bank raised interest rates. The Bank of Japan announced the end of its zero interest rate policy and indicated that monetary policy would be less stimulative going forward. As Central Banks around the globe removed liquidity from the system, ending a period of low-cost financing, longer-term interest rates rose worldwide.
For the six month period ended April 30, 2006, Janus High-Yield Fund posted a gain of 5.50%, outpacing the 4.95% increase of its benchmark, the Lehman Brothers High-Yield Bond Index. The high-yield market showed incredible resilience in the face of the rising rates over the period, with all rating categories within the Lehman Brothers High-Yield Bond Index producing positive returns for the period. Investors' continued appetite for yield drove spreads tighter, with the lowest-rated segments of the market outperforming. Low-rated triple-C securities returned 8.20% versus the Index return of 5.50%. Double-C to defaulted securities returned 10.88%, as compared to the Russell 2000® Index return of 18.91%.
Credit fundamentals continued to be supportive for the high-yield market as the default rate remained contained and corporate liquidity remained very high, supported by top line growth and margin improvement.
After the uncertain climate in 2005, I gained more clarity around the direction of the economy, interest rates and the ultimate motivations of the Federal Reserve as we entered 2006. In light of expectations around the economy slowing, it seemed clear to me that the economy was on good footing and that the trend would be toward higher interest rates. As former Federal Reserve Chairman Alan Greenspan handed over the reins to Ben Bernanke, it was evident that Mr. Bernanke would follow in Mr. Greenspan's footsteps with a disciplined approach toward fighting inflation. In this environment, I continued to position the Fund with a short duration, keeping the duration lower than that of its benchmark. In addition, I chose to underweight the BB segment of the market due to its high correlation to interest rates and the low breakeven spreads. I continued to overweight single Bs and increased the Fund's weighting in triple Cs. The Fund's overweight po sition in triple Cs helped performance, as triple Cs outperformed both single Bs and double Bs during the period. Aside from the weightings by rating category, individual credit selection continued to be one of the key drivers of the Fund's returns. Several of the Fund's holdings produced double-digit percentage returns within the period.
With concerns around rising interest rates, part of the Fund's short duration strategy was to increase the allocation to floating-rate high-yield bonds and bank loans. These securities performed well in the rising rate environment, and I continue to believe that the bank loan market offers excellent return opportunities within the levered credit universe.
Holdings that Helped Performance
The Fund's holdings in Allied Waste (AW), an Arizona-based waste management company, added to performance. New management has instilled discipline at AW, with a primary focus on operational excellence and return generation from the business. Amid higher energy costs, improved pricing within the
sector allowed for margin improvement, giving the management team the ability to de-leverage the balance sheet. I continue to like the AW story and believe that the solid execution by management will lead to upgrades by the rating agencies.
The Fund's out-of-consensus weightings in airline companies American Airlines (AMR) and Continental Airlines (CAL) both contributed to performance. Both airlines, operating within a difficult sector, have significant liquidity positions, with AMR carrying over $3 billion in cash on the balance sheet and CAL carrying over $1 billion. Management teams have communicated the importance of liquidity due to the difficult operating environment that they have experienced post September 11, 2001. In addition to significant liquidity, both companies have been focused on improving operating metrics, pricing and optimizing their fleets.
The Fund's automotive positions also aided performance during the period, as both Ford and General Motors continued to take steps to improve their businesses. Similar to the airlines' past experience, both companies are facing a difficult environment and have chosen to keep their liquidity positions high, with large cash positions on their balance sheets. Asset sales have added to these liquidity positions. I am keeping a close eye on this sector due to rising interest rates, input costs, energy prices, and increasing competition. Add the Delphi bankruptcy, the relationship with the unions and the fact that the automotive sector represents over a 13% weighting in the Index and one can see why the sector demands attention.
Holdings that Detracted from Performance
On the negative side, the Fund's positions in auto part supplier, Visteon, underperformed during the period. Rising input costs and concerns around pricing power weighed on the company.
The position in truck builder and pickup truck topper builder, JB Poindexter, also underperformed during the period. Rising commodity prices and concerns over sales of sport utility vehicles weighed on the credit. The liquidity profile of JB Poindexter remains strong and I believe that management will remain disciplined around the capital structure of the company.
Many of the Fund's higher-rated positions that tend to be highly correlated to interest rates, such as holdings in TXU, Mid-American Energy, HCA, Stations Casino and Xerox, underperformed during the period due to the increasing levels of interest rates.
Strategy in This Environment
As I've discussed in previous commentaries, the move by many corporations to a more shareholder-friendly stance continues to be one of the key themes in the market. The increase in share repurchase programs, increased dividends and an up-tick in
20 Janus Bond & Money Market Funds April 30, 2006
(unaudited)
mergers and acquisition activity, on top of the resurgence in public-to-private transactions, have kept bond holders in a very cautious stance. Shareholder-friendly activities facilitated via balance sheet destruction remain one of the primary risks within the levered credit markets.
The focus by company management teams over the last five years on de-leveraging their balance sheets and improving liquidity profiles has produced capital structures that are sub-optimal to us. In many cases the under-levered nature of the capital structure is disadvantageous for the equity holders of the company. Many management teams have recognized this and have moved to more shareholder-friendly activity at the expense of bond holders. Those who have chosen not to adjust their capital structures run the risk of facing activist shareholder activity from many of the levered players in the market.
Increased activity by the private equity and hedge fund community within the credit markets reinforces the importance of in-depth fundamental credit research. Close attention must be paid to the covenants within bond indentures and in-depth modeling of individual company capital structures is required. These activities remain a top priority.
In light of the concerns mentioned above, strong fundamentals, dictated by a low and sustainable default rate, allow for spreads to remain tight. With an abundance of liquidity, creating the current yield-seeking environment, and with limited yield alternatives outside the high-yield market, I believe spread valuations will remain tight and in a tight range. While it's impossible to argue that current valuations are cheap on a historical basis, strong fundamentals and technicals remain supportive of the overall market. I continue to believe that individual credit/security selection will ultimately drive the returns that we produce and
will help to protect against the downside, though I remain cautious on the high-yield market.
I am very fortunate to have a strong team behind me that is dedicated to uncovering opportunities for our shareholders. We continue to emphasize disciplined, detailed, in-depth credit analysis, relying on our bottom-up fundamental research to drive returns within the credit universe.
Keeping all of this in mind, we remain committed to uncovering and investing in companies that are focused on achieving an optimal capital structure and generating returns for their shareholders, both equity and debt. We look for companies that we believe adhere to a strict discipline around their capital structure and are focused on reducing leverage, improving margins, and maximizing overall cash flows from the business. We believe that management holds the key to generating returns for shareholders and we will tend to overweight businesses with top management teams that are concerned with both debt and equity shareholders.
Looking Ahead
Going forward I intend to maintain a short duration positioning versus the Fund's benchmark in the interest of preserving capital in the rising rate environment. I am watching the global economy and the Federal Reserve closely, and if I see any indication of the economy slowing or the Federal Reserve ending their tightening campaign I may reconsider the duration and BB positioning of the Fund. I continue to believe there are outstanding opportunities within the high-yield market but that they exist on an individual name basis. Sticking with our disciplined investment process, I will likely continue to overweight individual credits where we have a high conviction around the return profile and fundamentals.
Thank you for your continued investment in Janus High-Yield Fund.
Janus High-Yield Fund At a Glance
Fund Profile
April 30, 2006 | |||||||
Weighted Average Maturity | 7.0 Years | ||||||
Average Modified Duration* | 4.1 Years | ||||||
30-Day Current Yield** | 7.24 | % | |||||
Weighted Average Fixed Income Credit Rating | B | ||||||
Number of Bonds/Notes | 282 |
*A theoretical measure of price volatility
**Yield will fluctuate
Ratings† Summary – (% of Net Assets)
April 30, 2006 | |||||||
AAA | 0.2 | % | |||||
A | 0.9 | % | |||||
BBB | 2.1 | % | |||||
BB | 27.2 | % | |||||
B | 55.3 | % | |||||
CCC | 10.4 | % | |||||
Other | 3.9 | % |
†Rated by Standard & Poor's
Significant Areas of Investment – (% of Net Assets) | Asset Allocation – (% of Net Assets) | ||||||
As of April 30, 2006 | As of April 30, 2006 | ||||||
![]() | ![]() | ||||||
Janus Bond & Money Market Funds April 30, 2006 21
Janus High-Yield Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | |||||||||||||||||||
Janus High-Yield Fund | 5.50 | % | 9.10 | % | 7.06 | % | 7.50 | % | 8.25 | % | |||||||||||||
Lehman Brothers High-Yield Bond Index | 4.95 | % | 9.15 | % | 8.54 | % | 6.70 | % | 6.68 | % | |||||||||||||
Lipper Quartile | N/A | 2 | nd | 3 | rd | 1 | st | 1 | st | ||||||||||||||
Lipper Ranking - based on total return for High Current Yield Funds | N/A** | 164/439 | 169/311 | 10/111 | 3/104 |
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes reinvestment of dividends and capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares.
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.
* The Fund's inception date – December 29, 1995
** The Fund's fiscal year-to-date Lipper ranking is not available.
See "Explanations of Charts, Tables and Financial Statements."
Bond funds 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 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.
The Fund's portfolio may differ significantly from the securities held in the index. The index is not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
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.
Janus Capital Management LLC has contractually agreed to waive the Fund's total operating expenses to levels indicated in the prospectus until at least March 1, 2007. Total returns shown include fee waivers, if any, and without such waivers, the Fund's yield and total return would have been lower.
The Fund's total operating expenses did not exceed the expense limit so no waivers were in effect for the most recent period presented.
There is no assurance that the investment process will consistently lead to successful investing.
A 2% redemption fee may be imposed on shares held for 3 months or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
The Fund's prospectus allows for investment in non-investment grade securities.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,055.00 | $ | 4.64 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.28 | $ | 4.56 |
*Expenses are equal to the annualized expense ratio of 0.91%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital.
22 Janus Bond & Money Market Funds April 30, 2006
Janus High-Yield Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Corporate Bonds - 95.6% | |||||||||||
Advertising Sales - 0.2% | |||||||||||
$ | 826,000 | Lamar Advertising Co., 2.875% senior notes, due 12/31/10 | $ | 977,778 | |||||||
Advertising Services - 1.0% | |||||||||||
R.H. Donnelley Corp.: | |||||||||||
2,198,000 | 6.875%, senior discount notes due 1/15/13 (144A) | 2,044,140 | |||||||||
1,224,000 | 6.875%, senior discount notes due 1/15/13 (144A) | 1,138,320 | |||||||||
1,699,000 | 8.875%, senior notes, due 1/15/16 (144A) | 1,747,846 | |||||||||
4,930,306 | |||||||||||
Aerospace and Defense - Equipment - 0.3% | |||||||||||
1,227,000 | DRS Technologies, Inc., 6.875% senior subordinated notes, due 11/1/13 | 1,216,264 | |||||||||
Agricultural Chemicals - 0.3% | |||||||||||
1,119,000 | IMC Global, Inc. - Series B, 10.875% company guaranteed notes, due 6/1/08 | 1,208,520 | |||||||||
Airlines - 0.6% | |||||||||||
1,248,000 | AMR Corp., 9.00% debentures, due 8/1/12 | 1,201,200 | |||||||||
1,677,093 | US Airways Group, Inc., 8.50% bank loan, due 3/31/11‡ | 1,697,537 | |||||||||
2,898,737 | |||||||||||
Apparel Manufacturers - 1.8% | |||||||||||
Levi Strauss & Co.: | |||||||||||
975,000 | 9.28%, senior unsubordinated notes due 4/1/12‡ | 1,015,219 | |||||||||
2,174,000 | 9.75%, senior notes, due 1/15/15 | 2,293,570 | |||||||||
2,350,000 | 8.875%, senior notes, due 4/1/16 (144A) | 2,355,875 | |||||||||
2,050,000 | Quiksilver, Inc., 6.875% company guaranteed notes, due 4/15/15 | 1,978,250 | |||||||||
686,000 | Russell Corp., 9.25% company guaranteed notes, due 5/1/10 | 716,870 | |||||||||
8,359,784 | |||||||||||
Applications Software - 0.1% | |||||||||||
333,000 | Serena Software, Inc., 10.375% senior subordinated notes due 3/15/16 (144A) | 354,645 | |||||||||
Athletic Equipment - 0.2% | |||||||||||
1,025,000 | Riddell Bell Holdings, Inc., 8.375% company guaranteed notes, due 10/1/12 | 1,022,438 | |||||||||
Automotive - Cars and Light Trucks - 1.7% | |||||||||||
1,399,000 | Ford Capital B.V., 9.50% debentures, due 6/1/10 | 1,245,110 | |||||||||
Ford Motor Co.: | |||||||||||
3,022,000 | 7.25%, notes, due 10/1/08 | 2,742,465 | |||||||||
1,674,000 | 7.45%, notes, due 7/16/31 | 1,222,020 | |||||||||
General Motors Corp.: | |||||||||||
2,175,000 | 7.125%, senior notes, due 7/15/13 | 1,636,688 | |||||||||
1,569,000 | 8.375%, debentures, due 7/15/33 | 1,168,905 | |||||||||
8,015,188 | |||||||||||
Automotive - Truck Parts and Equipment - Original - 2.0% | |||||||||||
2,674,000 | Accuride Corp., 8.50% company guaranteed notes, due 2/1/15 | 2,640,574 | |||||||||
Lear Corp.: | |||||||||||
1,025,000 | 8.11%, company guaranteed notes due 5/15/09 | 1,001,938 | |||||||||
538,149 | 0%, bank loan, due 4/25/12‡ | 538,822 | |||||||||
675,000 | 5.75%, company guaranteed notes due 8/1/14 | 567,000 |
Shares or Principal Amount | Value | ||||||||||
Automotive - Truck Parts and Equipment - Original - (continued) | |||||||||||
Tenneco Automotive, Inc.: | |||||||||||
$ | 350,000 | 10.25%, secured notes, due 7/15/13 | $ | 387,625 | |||||||
1,205,000 | 8.625%, company guaranteed notes due 11/15/14 | 1,220,063 | |||||||||
699,000 | TRW Automotive, Inc., 9.375% senior notes, due 2/15/13 | 751,425 | |||||||||
1,024,000 | United Components, Inc., 9.375% senior subordinated notes, due 6/15/13 | 1,003,520 | |||||||||
1,350,000 | Visteon Corp., 8.25% senior notes, due 8/1/10 | 1,211,625 | |||||||||
9,322,592 | |||||||||||
Automotive - Truck Parts and Equipment - Replacement - 0.1% | |||||||||||
389,000 | Affinia Group, Inc., 9.00% company guaranteed notes, due 11/30/14 | 345,238 | |||||||||
Building - Heavy Construction - 0.4% | |||||||||||
1,849,000 | Ahern Rentals, Inc., 9.25% company guaranteed notes, due 8/15/13 | 1,927,583 | |||||||||
Building - Maintenance and Service - 0.3% | |||||||||||
1,359,000 | HydroChem Industrial Services, Inc., 9.25% senior subordinated notes due 2/15/13 (144A)§ | 1,348,808 | |||||||||
Building - Residential and Commercial - 1.0% | |||||||||||
1,374,000 | Beazer Homes USA, Inc., 6.875% company guaranteed notes, due 7/15/15 | 1,315,605 | |||||||||
K. Hovnanian Enterprises, Inc.: | |||||||||||
1,049,000 | 6.50%, company guaranteed notes due 1/15/14 | 989,550 | |||||||||
500,000 | 7.50%, company guaranteed notes due 5/15/16 | 494,138 | |||||||||
1,720,000 | William Lyon Homes, Inc., 10.75% company guaranteed notes, due 4/1/13 | 1,720,000 | |||||||||
4,519,293 | |||||||||||
Building and Construction Products - Miscellaneous - 0.9% | |||||||||||
1,875,000 | Nortek, Inc., 8.50% senior subordinated notes, due 9/1/14 | 1,921,875 | |||||||||
2,450,000 | Ply Gem Industries, Inc., 9.00% senior subordinated notes, due 2/15/12 | 2,358,125 | |||||||||
4,280,000 | |||||||||||
Building Products - Air and Heating - 0.2% | |||||||||||
699,000 | Goodman Global Holdings, Inc., 7.875% senior subordinated notes, due 12/15/12 | 699,000 | |||||||||
Building Products - Wood - 0.3% | |||||||||||
1,499,000 | Ainsworth Lumber Company, Ltd., 7.25% company guaranteed notes, due 10/1/12 | 1,345,353 | |||||||||
Cable Television - 2.8% | |||||||||||
674,000 | Cablevision Systems Corp., 8.00% senior notes, due 4/15/12 | 672,315 | |||||||||
3,871,000 | CCH I LLC, 11.00% secured notes, due 10/1/15 | 3,445,189 | |||||||||
2,338,000 | Charter Communications Holdings II 10.25%, senior notes, due 9/15/10 | 2,355,535 | |||||||||
Charter Communications Operating LLC: | |||||||||||
1,685,899 | 0%, bank loan, due 4/27/11‡ | 1,691,513 | |||||||||
1,399,000 | 8.00%, senior notes, due 4/30/12 (144A) | 1,405,995 | |||||||||
CSC Holdings, Inc.: | |||||||||||
1,024,000 | 7.00%, senior notes, due 4/15/12 (144A)‡ | 1,018,880 | |||||||||
506,966 | 6.67%, bank loan, due 3/30/13‡ | 508,725 | |||||||||
2,373,000 | Mediacom LLC/Mediacom Capital Corp. 9.50%, senior notes, due 1/15/13 | 2,426,393 | |||||||||
13,524,545 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2006 23
Janus High-Yield Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Casino Hotels - 3.9% | |||||||||||
$ | 1,699,000 | Boyd Gaming Corp., 7.125% senior subordinated notes, due 2/1/16 | $ | 1,701,123 | |||||||
Majestic Star Casino LLC: | |||||||||||
350,000 | 9.50%, company guaranteed notes due 10/15/10 | 372,750 | |||||||||
2,295,000 | 9.75%, secured notes, due 1/15/11 (144A)§ | 2,352,374 | |||||||||
695,000 | Mandalay Resort Group, 10.25% senior subordinated notes, due 8/1/07 | 728,013 | |||||||||
MGM Mirage, Inc.: | |||||||||||
1,045,000 | 9.75%, company guaranteed notes due 6/1/07 | 1,084,188 | |||||||||
1,573,000 | 8.375%, company guaranteed notes due 2/1/11 | 1,655,583 | |||||||||
1,224,000 | MTR Gaming Group, Inc., 9.75% company guaranteed notes, due 4/1/10 | 1,300,500 | |||||||||
695,000 | Park Place Entertainment Corp., 9.375% senior subordinated notes, due 2/15/07 | 713,244 | |||||||||
350,000 | Poster Financial Group, Inc., 8.75% secured notes, due 12/1/11 | 369,250 | |||||||||
Station Casinos, Inc.: | |||||||||||
1,747,000 | 6.875%, senior subordinated notes due 3/1/16 | 1,716,427 | |||||||||
675,000 | 6.625%, senior subordinated notes due 3/15/18 (144A) | 642,094 | |||||||||
5,843,000 | Trump Entertainment Resorts, Inc., 8.50% secured notes, due 6/1/15 | 5,755,354 | |||||||||
18,390,900 | |||||||||||
Casino Services - 1.4% | |||||||||||
Virgin River Casino Corp.: | |||||||||||
4,785,000 | 9.00%, company guaranteed notes due 1/15/12‡ | 4,856,775 | |||||||||
2,348,000 | 0%, senior subordinated notes due 1/15/13 | 1,584,900 | |||||||||
6,441,675 | |||||||||||
Cellular Telecommunications - 3.3% | |||||||||||
Centennial Communications Corp.: | |||||||||||
1,348,000 | 10.00%, senior notes, due 1/1/13 | 1,401,920 | |||||||||
1,550,000 | 10.125%, company guaranteed notes due 6/15/13 | 1,695,313 | |||||||||
744,000 | Dobson Cellular Systems, Inc., 9.875% secured notes, due 11/1/12 | 812,820 | |||||||||
Dobson Communications Corp.: | |||||||||||
1,029,000 | 8.85%, senior notes, due 10/15/12‡ | 1,044,435 | |||||||||
1,197,000 | 8.875%, senior notes, due 10/1/13 | 1,223,933 | |||||||||
Nextel Communications, Inc.: | |||||||||||
2,197,000 | 6.875%, senior notes, due 10/31/13 | 2,254,969 | |||||||||
2,103,000 | 5.95%, senior notes, due 3/15/14 | 2,068,035 | |||||||||
1,714,000 | Rogers Cantel, Inc., 9.75% debentures, due 6/1/16 | 2,052,514 | |||||||||
Rogers Wireless Communications, Inc.: | |||||||||||
1,400,000 | 7.61625%, secured notes, due 12/15/10‡ | 1,442,000 | |||||||||
849,000 | 8.00%, senior subordinated notes due 12/15/12 | 891,450 | |||||||||
875,000 | 7.50%, secured notes, due 3/15/15 | 920,938 | |||||||||
15,808,327 | |||||||||||
Chemicals - Diversified - 2.7% | |||||||||||
684,000 | Huntsman Company LLC, 11.85% company guaranteed notes, due 7/15/11‡ | 718,200 | |||||||||
2,425,000 | Ineos Group Holdings PLC, 8.50% notes, due 2/15/16 (144A) | 2,303,750 |
Shares or Principal Amount | Value | ||||||||||
Chemicals - Diversified - (continued) | |||||||||||
Lyondell Chemical Co.: | |||||||||||
$ | 1,496,000 | 9.50%, company guaranteed notes due 12/15/08 | $ | 1,559,580 | |||||||
4,369,000 | 11.125%, secured notes, due 7/15/12 | 4,827,744 | |||||||||
3,474,000 | Nova Chemicals Corp., 6.50% senior notes, due 1/15/12 | 3,248,190 | |||||||||
12,657,464 | |||||||||||
Chemicals - Plastics - 0.9% | |||||||||||
Polyone Corp.: | |||||||||||
1,375,000 | 10.625%, company guaranteed notes due 5/15/10 | 1,485,000 | |||||||||
2,167,000 | 8.875%, senior notes, due 5/1/12 | 2,199,505 | |||||||||
704,000 | Resolution Performance Products LLC 13.50%, senior subordinated notes due 11/15/10 | 753,280 | |||||||||
4,437,785 | |||||||||||
Chemicals - Specialty - 2.1% | |||||||||||
1,350,000 | Chemtura Corp., 6.875% senior notes, due 6/1/16 | 1,346,116 | |||||||||
1,100,000 | MacDermid, Inc., 9.125% company guaranteed notes, due 7/15/11 | 1,155,000 | |||||||||
1,196,000 | Nalco Co., 7.75% senior notes, due 11/15/11 | 1,201,980 | |||||||||
2,748,000 | OM Group, Inc., 9.25% company guaranteed notes, due 12/15/11 | 2,837,310 | |||||||||
3,425,000 | Tronox Worldwide LLC, 9.50% senior notes, due 12/1/12 (144A) | 3,596,250 | |||||||||
10,136,656 | |||||||||||
Computer Services - 0.4% | |||||||||||
SunGard Data Systems, Inc.: | |||||||||||
600,000 | 9.125%, senior unsecured notes due 8/15/13 (144A) | 640,500 | |||||||||
1,368,000 | 10.25%, senior subordinated notes due 8/15/15(144A) | 1,470,600 | |||||||||
2,111,100 | |||||||||||
Consumer Products - Miscellaneous - 1.0% | |||||||||||
1,025,958 | Amscan Holdings, Inc., 9.77% bank loan, due 12/22/13‡ | 1,033,653 | |||||||||
2,200,000 | Jarden Corp., 9.75% company guaranteed notes, due 5/1/12 | 2,288,000 | |||||||||
1,675,000 | Visant Holding Corp., 8.75% senior notes, due 12/1/13 (144A) | 1,633,125 | |||||||||
4,954,778 | |||||||||||
Containers - Metal and Glass - 1.6% | |||||||||||
Owens-Brockway Glass Container, Inc.: | |||||||||||
3,141,000 | 8.875%, company guaranteed notes due 2/15/09 | 3,266,640 | |||||||||
821,000 | 8.25%, company guaranteed notes due 5/15/13 | 843,578 | |||||||||
Owens-Illinois, Inc.: | |||||||||||
1,894,000 | 8.10%, senior notes, due 5/15/07 | 1,912,940 | |||||||||
1,423,000 | 7.80%, debentures, due 5/15/18 | 1,387,425 | |||||||||
7,410,583 | |||||||||||
Containers - Paper and Plastic - 2.2% | |||||||||||
Graham Packaging Co.: | |||||||||||
1,399,000 | 8.50%, company guaranteed notes due 10/15/12 | 1,426,980 | |||||||||
6,671,000 | 9.875%, subordinated notes, due 10/15/14 | 6,854,452 |
See Notes to Schedules of Investments and Financial Statements.
24 Janus Bond & Money Market Funds April 30, 2006
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Containers - Paper and Plastic - (continued) | |||||||||||
$ | 2,498,000 | Smurfit-Stone Container Corp., 7.375% company guaranteed notes, due 7/15/14 | $ | 2,298,160 | |||||||
10,579,592 | |||||||||||
Direct Marketing - 0.7% | |||||||||||
3,200,000 | Affinion Group, Inc., 11.50% senior subordinated notes due 10/15/15 (144A) | 3,280,000 | |||||||||
Diversified Operations - 2.2% | |||||||||||
4,468,000 | Covalence Specialty Materials Corp. 10.25%, senior subordinated notes due 3/1/16 (144A) | 4,602,040 | |||||||||
2,522,000 | J.B. Poindexter & Company, Inc., 8.75% company guaranteed notes, due 3/15/14 | 2,049,125 | |||||||||
1,073,000 | Jacuzzi Brands, Inc., 9.625% secured notes, due 7/1/10 | 1,149,451 | |||||||||
1,049,000 | Kansas City Southern, 7.50% company guaranteed notes, due 6/15/09 | 1,060,801 | |||||||||
1,522,000 | Park-Ohio Industries, Inc., 8.375% company guaranteed notes, due 11/15/14 | 1,438,290 | |||||||||
10,299,707 | |||||||||||
Electric - Generation - 1.4% | |||||||||||
2,172,000 | AES Corp., 8.875% senior notes, due 2/15/11 | 2,334,900 | |||||||||
1,898,000 | Edison Mission Energy, 7.73% senior notes, due 6/15/09 | 1,943,078 | |||||||||
1,173,000 | Reliant Energy, Inc., 9.50% secured notes, due 7/15/13 | 1,190,595 | |||||||||
1,403,996 | Tenaska Alabama II Partners, 7.00% secured notes, due 6/30/21 (144A)‡,§ | 1,388,114 | |||||||||
6,856,687 | |||||||||||
Electric - Integrated - 3.6% | |||||||||||
Allegheny Energy Supply Company LLC: | |||||||||||
1,117,000 | 7.80%, notes, due 3/15/11 | 1,181,228 | |||||||||
1,067,000 | 8.25%, senior unsecured notes due 4/15/12 (144A)§ | 1,160,363 | |||||||||
CMS Energy Corp.: | |||||||||||
2,171,000 | 7.50%, senior notes, due 1/15/09 | 2,222,560 | |||||||||
1,224,000 | 6.875%, senior unsecured notes due 12/15/15 | 1,217,880 | |||||||||
2,275,000 | MidAmerican Energy Holdings Co., 6.125% bonds, due 4/1/36 (144A) | 2,170,147 | |||||||||
3,995,000 | Mission Energy Holding, Inc., 13.50% secured notes, due 7/15/08 | 4,539,318 | |||||||||
775,000 | Nevada Power Co., 5.875% general refunding mortgage, due 1/15/15 | 746,640 | |||||||||
TXU Corp.: | |||||||||||
1,499,000 | 5.55%, senior notes, due 11/15/14 | 1,392,979 | |||||||||
699,000 | 6.50%, senior notes, due 11/15/24 | 636,399 | |||||||||
2,103,000 | 6.55%, notes, due 11/15/34 | 1,888,322 | |||||||||
17,155,836 | |||||||||||
Electronic Components - Miscellaneous - 0.3% | |||||||||||
1,299,000 | Aavid Thermal Technologies, Inc., 12.75% company guaranteed notes, due 2/1/07 | 1,324,980 | |||||||||
Electronic Components - Semiconductors - 1.6% | |||||||||||
2,199,000 | Advanced Micro Devices, Inc., 7.75% senior notes, due 11/1/12** | 2,303,453 | |||||||||
2,200,000 | Amkor Technology, Inc., 9.25% senior notes, due 2/15/08 | 2,320,999 | |||||||||
2,153,000 | Freescale Semiconductor, Inc., 7.35% senior notes, due 7/15/09‡ | 2,201,443 |
Shares or Principal Amount | Value | ||||||||||
Electronic Components - Semiconductors - (continued) | |||||||||||
$ | 1,024,000 | STATS ChipPAC, Ltd., 6.75% company guaranteed notes, due 11/15/11 | $ | 1,000,960 | |||||||
7,826,855 | |||||||||||
Electronic Parts Distributors - 0.2% | |||||||||||
1,173,000 | Avnet, Inc., 6.00% notes, due 9/1/15 | 1,118,154 | |||||||||
Finance - Auto Loans - 2.9% | |||||||||||
Ford Motor Credit Co.: | |||||||||||
4,000,000 | 6.625%, notes, due 6/16/08 | 3,758,175 | |||||||||
2,875,000 | 0%, notes, due 4/15/12‡ | 2,878,183 | |||||||||
General Motors Acceptance Corp.: | |||||||||||
1,197,000 | 6.15%, bonds, due 4/5/07 | 1,174,719 | |||||||||
1,197,000 | 5.85%, senior unsubordinated notes due 1/14/09 | 1,125,447 | |||||||||
4,142,000 | 7.75%, notes, due 1/19/10 | 4,073,528 | |||||||||
674,000 | 7.25%, notes, due 3/2/11 | 644,426 | |||||||||
13,654,478 | |||||||||||
Finance - Investment Bankers/Brokers - 0.3% | |||||||||||
1,093,000 | BCP Crystal Holdings Corp., 9.625% senior subordinated notes, due 6/15/14 | 1,202,300 | |||||||||
Finance - Other Services - 0.6% | |||||||||||
2,103,000 | Alamosa Delaware, Inc., 8.50% senior notes, due 1/31/12 | 2,252,839 | |||||||||
539,000 | Madison River Capital LLC/Madison River Finance Corp., 13.25% senior notes, due 3/1/10 | 563,255 | |||||||||
2,816,094 | |||||||||||
Food - Diversified - 1.8% | |||||||||||
3,719,000 | Chiquita Brands International, Inc., 8.875% senior notes, due 12/1/15 | 3,421,480 | |||||||||
1,899,000 | Doane Pet Care Co., 10.625% senior subordinated notes, due 11/15/15 | 2,316,780 | |||||||||
Dole Food Company, Inc.: | |||||||||||
325,000 | 8.625%, senior notes, due 5/1/09‡ | 320,938 | |||||||||
575,000 | 7.25%, company guaranteed notes due 6/15/10 | 537,625 | |||||||||
2,023,000 | Wornick Co., 10.875% secured notes, due 7/15/11 | 2,093,805 | |||||||||
8,690,628 | |||||||||||
Food - Meat Products - 0.6% | |||||||||||
1,615,000 | National Beef Packing Company LLC, 10.50% senior notes, due 8/1/11‡ | 1,627,112 | |||||||||
1,226,000 | Pierre Foods, Inc., 9.875% senior subordinated notes, due 7/15/12 | 1,273,508 | |||||||||
2,900,620 | |||||||||||
Food - Wholesale/Distribution - 0.1% | |||||||||||
Roundy's Supermarket, Inc.: | |||||||||||
200,860 | 7.72%, bank loan, due 10/27/11‡ | 203,371 | |||||||||
199,856 | 7.87%, bank loan, due 10/27/11‡ | 202,354 | |||||||||
405,725 | |||||||||||
Gambling - Non-Hotel - 1.4% | |||||||||||
1,399,000 | Mohegan Tribal Gaming Authority, 8.00% senior subordinated notes, due 4/1/12 | 1,454,960 | |||||||||
Pinnacle Entertainment, Inc.: | |||||||||||
836,919 | 6.93%, bank loan, due 12/14/11‡ | 839,011 | |||||||||
2,103,000 | 8.25%, senior subordinated notes due 3/15/12 | 2,197,635 | |||||||||
2,023,000 | River Rock Entertainment Authority, 9.75% senior notes, due 11/1/11 | 2,179,783 | |||||||||
6,671,389 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2006 25
Janus High-Yield Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Gas - Distribution - 0.2% | |||||||||||
Colorado Interstate Gas Co.: | |||||||||||
$ | 684,000 | 5.95%, senior notes, due 3/15/15 | $ | 647,038 | |||||||
400,000 | 6.80%, senior notes, due 11/15/15 (144A) | 400,291 | |||||||||
1,047,329 | |||||||||||
Health Care Cost Containment - 0.6% | |||||||||||
2,693,000 | Team Health, Inc., 11.25% senior subordinated notes due 12/1/13 (144A)§ | 2,773,790 | |||||||||
Hotels and Motels - 0.2% | |||||||||||
799,000 | Starwood Hotels & Resorts Worldwide, Inc. 7.875%, company guaranteed notes due 5/1/12‡ | 858,925 | |||||||||
Independent Power Producer - 1.7% | |||||||||||
1,700,000 | AES China Generating Company, Ltd. 8.25%, bonds, due 6/26/10 | 1,706,686 | |||||||||
NRG Energy, Inc.: | |||||||||||
973,405 | 6.82%, bank loan, due 9/30/12‡ | 983,548 | |||||||||
221,929 | 6.97938%, bank loan, due 9/30/12‡ | 223,964 | |||||||||
4,098,000 | 7.375%, company guaranteed notes due 2/1/16 | 4,133,858 | |||||||||
1,300,000 | Reliant Energy, Inc., 6.75% secured notes, due 12/15/14 | 1,183,000 | |||||||||
8,231,056 | |||||||||||
Machinery - Construction and Mining - 0.3% | |||||||||||
1,549,000 | Terex Corp., 10.375% company guaranteed notes, due 4/1/11 | 1,630,323 | |||||||||
Machinery - Farm - 0.4% | |||||||||||
1,574,000 | Case New Holland, Inc., 9.25% company guaranteed notes, due 8/1/11 | 1,672,375 | |||||||||
Medical - Hospitals - 1.0% | |||||||||||
HCA, Inc.: | |||||||||||
1,399,000 | 5.75%, senior notes, due 3/15/14 | 1,298,517 | |||||||||
1,499,000 | 6.50%, bonds, due 2/15/16 | 1,441,325 | |||||||||
1,137,000 | Tenet Healthcare Corp., 9.50% senior notes, due 2/1/15 (144A)‡ | 1,159,740 | |||||||||
1,049,000 | Triad Hospitals, Inc., 7.00% senior subordinated notes, due 11/15/13 | 1,024,086 | |||||||||
4,923,668 | |||||||||||
Medical - Outpatient and Home Medical Care - 0.2% | |||||||||||
1,149,000 | CRC Health Corp., 10.75% senior subordinated notes due 2/1/16 (144A)§ | 1,180,598 | |||||||||
Metal - Aluminum - 0.8% | |||||||||||
3,874,000 | Novelis, Inc., 7.50% senior notes, due 2/15/15 (144A)‡,§ | 3,757,780 | |||||||||
Metal - Diversified - 0.5% | |||||||||||
2,013,000 | Earle M. Jorgensen Co., 9.75% secured notes, due 6/1/12 | 2,174,040 | |||||||||
Metal Products - Fasteners - 0.7% | |||||||||||
3,321,000 | FastenTech, Inc., 12.50% company guaranteed notes, due 5/1/11‡ | 3,387,420 | |||||||||
Miscellaneous Manufacturing - 0.5% | |||||||||||
Nutro Products, Inc.: | |||||||||||
724,820 | 0%, bank loan, due 4/26/13‡ | 731,619 | |||||||||
30,000 | 0%, senior notes, due 10/15/13 (144A)‡ | 30,600 | |||||||||
1,380,000 | 10.75%, senior subordinated notes due 4/15/14 (144A) | 1,428,300 | |||||||||
2,190,519 |
Shares or Principal Amount | Value | ||||||||||
Multimedia - 0.4% | |||||||||||
$ | 1,924,000 | LBI Media, Inc., 10.125% company guaranteed notes, due 7/15/12 | $ | 2,068,300 | |||||||
Non-Hazardous Waste Disposal - 1.1% | |||||||||||
350,000 | Allied Waste Industries, Inc., 9.25% debentures, due 5/1/21 | 371,000 | |||||||||
Allied Waste North America, Inc.: | |||||||||||
1,686,000 | 6.375%, secured notes, due 4/15/11 | 1,652,280 | |||||||||
1,075,000 | 7.875%, senior notes, due 4/15/13 | 1,118,000 | |||||||||
2,000,000 | 7.25%, senior notes, due 3/15/15 | 2,035,000 | |||||||||
5,176,280 | |||||||||||
Office Automation and Equipment - 0.4% | |||||||||||
Xerox Corp.: | |||||||||||
1,171,000 | 6.875%, senior notes, due 8/15/11 | 1,190,029 | |||||||||
592,000 | 6.40%, senior unsecured notes, due 3/15/16 | 576,460 | |||||||||
1,766,489 | |||||||||||
Office Supplies and Forms - 1.5% | |||||||||||
7,251,000 | Acco Brands Corp., 7.625% company guaranteed notes, due 8/15/15 | 6,888,450 | |||||||||
Oil - Field Services - 0.3% | |||||||||||
699,000 | Hornbeck Offshore Services, Inc., 6.125% senior notes, due 12/1/14 | 672,788 | |||||||||
1,000,000 | Titan Petrochemicals Group, Ltd., 8.50% company guaranteed notes due 3/18/12 (144A)§ | 910,000 | |||||||||
1,582,788 | |||||||||||
Oil Companies - Exploration and Production - 1.6% | |||||||||||
850,000 | Cheseapeake Energy Corp., 6.505% senior notes, due 8/15/17 (144A) | 811,750 | |||||||||
1,049,000 | Encore Acquisition Co., 6.25% senior subordinated notes, due 4/15/14 | 996,550 | |||||||||
1,788,000 | Energy Partners, Ltd., 8.75% company guaranteed notes, due 8/1/10 | 1,828,230 | |||||||||
2,302,000 | Forest Oil Corp., 8.00% senior notes, due 6/15/08 | 2,373,937 | |||||||||
675,000 | Magnum Hunter Resources, Inc., 9.60% company guaranteed notes, due 3/15/12 | 720,563 | |||||||||
700,000 | Swift Energy Co., 9.375% senior subordinated notes, due 5/1/12 | 743,750 | |||||||||
7,474,780 | |||||||||||
Oil Field Machinery and Equipment - 0.3% | |||||||||||
1,187,000 | Dresser-Rand Group, Inc., 7.375% senior subordinated notes, due 11/1/14 | 1,213,708 | |||||||||
Paper and Related Products - 3.2% | |||||||||||
Boise Cascade LLC: | |||||||||||
1,800,000 | 7.475%, company guaranteed notes due 10/15/12‡ | 1,813,500 | |||||||||
2,972,000 | 7.125%, company guaranteed notes due 10/15/14** | 2,823,400 | |||||||||
Georgia Pacific Corporation, Inc.: | |||||||||||
4,085,057 | 6.88%, bank loan, due 12/20/12‡ | 4,105,808 | |||||||||
193,530 | 6.97938%, bank loan, due 12/20/12‡ | 194,513 | |||||||||
317,727 | 7.88%, bank loan, due 12/23/13‡ | 324,345 | |||||||||
158,863 | 7.88%, bank loan, due 12/23/13‡ | 162,172 | |||||||||
317,727 | 7.92%, bank loan, due 12/23/13‡ | 324,345 | |||||||||
317,727 | 7.9575%, bank loan, due 12/23/13‡ | 324,345 | |||||||||
317,727 | 8.02938%, bank loan, due 12/23/13‡ | 324,345 |
See Notes to Schedules of Investments and Financial Statements.
26 Janus Bond & Money Market Funds April 30, 2006
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Paper and Related Products - (continued) | |||||||||||
$ | 2,328,000 | NewPage Corp., 12.00% senior subordinated notes, due 5/1/13 | $ | 2,525,880 | |||||||
Rock-Tenn Co.: | |||||||||||
699,000 | 8.20%, senior notes, due 8/15/11 | 695,505 | |||||||||
1,748,000 | 5.625%, bonds, due 3/15/13 | 1,516,390 | |||||||||
15,134,548 | |||||||||||
Physician Practice Management - 0.5% | |||||||||||
1,025,000 | US Oncology Holdings, Inc., 9.26375% senior notes, due 3/15/15‡ | 1,040,375 | |||||||||
999,000 | US Oncology, Inc., 10.75% company guaranteed notes, due 8/15/14 | 1,117,631 | |||||||||
2,158,006 | |||||||||||
Pipelines - 5.3% | |||||||||||
1,025,000 | ANR Pipeline Co., 8.875% notes, due 3/15/10 | 1,088,038 | |||||||||
1,024,000 | Dynegy Holdings, Inc., 6.875% senior notes, due 4/1/11 | 983,040 | |||||||||
El Paso Corp.: | |||||||||||
2,321,000 | 6.50%, debentures, due 6/1/08 (144A)§ | 2,309,395 | |||||||||
1,200,000 | 7.625%, notes, due 9/1/08 (144A)§ | 1,221,000 | |||||||||
1,648,000 | 6.375%, notes, due 2/1/09 (144A)§ | 1,627,400 | |||||||||
984,000 | 7.00%, senior notes, due 5/15/11 | 981,540 | |||||||||
2,267,000 | 9.6255%, debentures, due 5/15/12 (144A)§ | 2,505,035 | |||||||||
1,891,000 | 7.42%, notes, due 2/15/37 (144A)§ | 1,784,631 | |||||||||
1,026,000 | El Paso Natural Gas Co., 7.625% senior notes, due 8/1/10 | 1,063,193 | |||||||||
684,000 | Holly Energy Partners L.P., 6.25% company guaranteed notes, due 3/1/15 | 644,670 | |||||||||
2,828,000 | Northwest Pipeline Corp., 8.125% company guaranteed notes, due 3/1/10 | 2,980,004 | |||||||||
1,474,000 | Southern Natural Gas Co., 8.875% unsubordinated notes, due 3/15/10 | 1,564,651 | |||||||||
3,221,000 | Transcontinental Gas Pipe Line Corp., 7.00% notes, due 8/15/11 | 3,337,760 | |||||||||
1,795,000 | TransMontaigne, Inc., 9.125% senior subordinated notes, due 6/1/10 | 1,934,113 | |||||||||
1,022,000 | Utilicorp Canada Finance Corp., 7.75% company guaranteed notes, due 6/15/11 | 1,057,770 | |||||||||
25,082,240 | |||||||||||
Private Corrections - 0.4% | |||||||||||
Corrections Corporation of America: | |||||||||||
1,225,000 | 7.50%, senior notes, due 5/1/11 | 1,240,312 | |||||||||
675,000 | 6.25%, company guaranteed notes due 3/15/13 | 642,938 | |||||||||
1,883,250 | |||||||||||
Publishing - Newspapers - 0.7% | |||||||||||
3,525,000 | Block Communications, Inc., 8.25% senior notes, due 12/15/15 (144A)§ | 3,445,688 | |||||||||
Publishing - Periodicals - 2.5% | |||||||||||
1,174,000 | CBD Media Holdings LLC, 9.25% senior notes, due 7/15/12 | 1,197,480 | |||||||||
675,000 | CBD Media, Inc., 8.625% company guaranteed notes, due 6/1/11 | 685,125 | |||||||||
3,674,000 | Dex Media, Inc., 8.00% notes, due 11/15/13 | 3,770,443 | |||||||||
Primedia, Inc.: | |||||||||||
1,716,000 | 10.12375%, senior notes, due 5/15/10‡ | 1,754,610 | |||||||||
4,650,000 | 8.875%, company guaranteed notes due 5/15/11 | 4,475,624 | |||||||||
11,883,282 |
Shares or Principal Amount | Value | ||||||||||
Racetracks - 0.2% | |||||||||||
$ | 1,048,000 | Penn National Gaming, Inc., 6.75% senior subordinated notes, due 3/1/15 | $ | 1,029,660 | |||||||
Recycling - 0.3% | |||||||||||
1,374,000 | Aleris International, Inc., 10.375% secured notes, due 10/15/10 | 1,507,965 | |||||||||
REIT - Health Care - 0.4% | |||||||||||
1,924,000 | Senior Housing Properties Trust, 8.625% senior notes, due 1/15/12 | 2,106,780 | |||||||||
REIT - Hotels - 0.4% | |||||||||||
2,172,000 | Host Marriott L.P., 6.375% company guaranteed notes, due 3/15/15 | 2,101,410 | |||||||||
Rental Auto/Equipment - 0.1% | |||||||||||
525,000 | Hertz Corp., 8.875% senior notes, due 1/1/14 (144A) | 557,813 | |||||||||
Resorts and Theme Parks - 0.5% | |||||||||||
2,581,000 | Six Flags, Inc., 8.875% senior notes, due 2/1/10 | 2,587,453 | |||||||||
Retail - Computer Equipment - 0.8% | |||||||||||
GSC Holdings Corp.: | |||||||||||
225,000 | 8.865% company guaranteed notes | ||||||||||
due 10/1/11 (144A)‡ | 232,031 | ||||||||||
3,374,000 | 8.00% company guaranteed notes | ||||||||||
due 10/1/12 (144A) | 3,378,218 | ||||||||||
3,610,249 | |||||||||||
Retail - Drug Store - 1.5% | |||||||||||
Jean Coutu Group, Inc.: | |||||||||||
2,473,000 | 7.625%, senior notes, due 8/1/12 | 2,429,723 | |||||||||
3,347,000 | 8.50%, senior subordinated notes due 8/1/14 | 3,137,812 | |||||||||
1,722,000 | Rite Aid Corp., 7.50% company guaranteed notes, due 1/15/15 | 1,691,865 | |||||||||
7,259,400 | |||||||||||
Retail - Miscellaneous/Diversified - 0.3% | |||||||||||
1,005,000 | Eye Care Centers of America, Inc., 10.75% company guaranteed notes, due 2/15/15 | 1,010,025 | |||||||||
675,000 | Harry & David Operations Corp., 9.82% company guaranteed notes, due 3/1/12‡ | 642,938 | |||||||||
1,652,963 | |||||||||||
Retail - Propane Distribution - 0.7% | |||||||||||
696,000 | Amerigas Partners L.P., 7.25% senior unsecured notes, due 5/20/15 | 692,520 | |||||||||
Ferrellgas Partners L.P.: | |||||||||||
2,073,000 | 8.75%, senior notes, due 6/15/12 | 2,093,730 | |||||||||
699,000 | 6.75%, senior notes, due 5/1/14 | 671,040 | |||||||||
3,457,290 | |||||||||||
Retail - Regional Department Stores - 0.3% | |||||||||||
1,349,000 | Bon-Ton Stores, Inc., 10.25% senior notes, due 3/15/14 (144A) | 1,288,295 | |||||||||
Retail - Restaurants - 1.4% | |||||||||||
2,846,000 | Friendly Ice Cream Corp., 8.375% senior notes, due 6/15/12 | 2,540,055 | |||||||||
1,024,000 | Landry's Restaurants, Inc., 7.50% company guaranteed notes, due 12/15/14 | 983,040 | |||||||||
1,349,000 | Restaurant Co., 10.00% senior unsecured notes, due 10/1/13 | 1,268,060 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2006 27
Janus High-Yield Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Retail - Restaurants - (continued) | |||||||||||
$ | 1,979,000 | VICORP Restaurants, Inc., 10.50% senior notes, due 4/15/11 | $ | 1,850,365 | |||||||
6,641,520 | |||||||||||
Rubber - Tires - 1.9% | |||||||||||
Goodyear Tire & Rubber Co.: | |||||||||||
2,498,000 | 8.50%, notes, due 3/15/07 | 2,532,348 | |||||||||
2,599,000 | 7.857%, notes, due 8/15/11 | 2,560,015 | |||||||||
3,874,000 | 9.00%, senior notes, due 7/1/15 | 3,990,220 | |||||||||
9,082,583 | |||||||||||
Satellite Telecommunications - 1.5% | |||||||||||
INTELSAT Bermuda, Ltd.: | |||||||||||
750,000 | 8.50%, senior notes, due 1/15/13 | 764,063 | |||||||||
3,375,000 | 6.50%, notes, due 11/1/13 | 2,649,374 | |||||||||
1,374,000 | 8.625%, company guaranteed notes due 1/15/15‡ | 1,428,960 | |||||||||
1,350,000 | INTELSAT Subsidiary Holding Company, Ltd. 9.61375%, company guaranteed | ||||||||||
notes, due 1/15/12‡ | 1,370,250 | ||||||||||
675,000 | PanAmSat Corp., 9.00% company guaranteed notes, due 8/15/14 | 709,594 | |||||||||
6,922,241 | |||||||||||
Semiconductor Equipment - 0.1% | |||||||||||
675,000 | Sensata Technologies B.V., 8.00% senior notes, due 5/1/14 (144A) | 678,375 | |||||||||
Special Purpose Entity - 2.1% | |||||||||||
1,106,000 | American Commercial Lines LLC, 9.50% company guaranteed notes, due 2/15/15 | 1,219,365 | |||||||||
CCM Merger, Inc.: | |||||||||||
354,901 | 6.80%, bank loan, due 7/21/12‡ | 356,587 | |||||||||
141,961 | 6.85%, bank loan, due 7/21/12‡ | 142,635 | |||||||||
1,335,494 | 6.96475%, bank loan, due 7/21/12‡ | 1,341,837 | |||||||||
1,574,000 | 8.00%, notes, due 8/1/13 (144A) | 1,526,779 | |||||||||
1,675,000 | Festival Fun Parks LLC, 10.875% senior notes, due 4/15/14 (144A) | 1,695,937 | |||||||||
1,297,000 | K&F Acquisition, Inc., 7.75% company guaranteed notes, due 11/15/14 | 1,326,183 | |||||||||
Vanguard Health Holding Company II LLC: | |||||||||||
1,334,186 | 6.95%, bank loan, due 9/23/11‡ | 1,352,944 | |||||||||
1,150,000 | 9.00%, senior subordinated notes due 10/1/14 | 1,187,375 | |||||||||
10,149,642 | |||||||||||
Specified Purpose Acquisition Company - 0.2% | |||||||||||
1,141,375 | Solar Capital Corp., 7.215% bank loan, due 1/5/13‡ | 1,153,839 | |||||||||
Steel - Producers - 0.5% | |||||||||||
2,275,000 | AK Steel Corp., 7.75% company guaranteed notes, due 6/15/12 | 2,303,438 | |||||||||
Telecommunication Equipment - 0.3% | |||||||||||
1,648,000 | Eschelon Operating Co., 8.375% company guaranteed notes, due 3/15/10 | 1,582,080 | |||||||||
Telecommunication Services - 0.4% | |||||||||||
1,348,000 | Time Warner Telecom Holdings, Inc., 9.25% company guaranteed notes, due 2/15/14 | 1,435,620 | |||||||||
675,000 | US WEST Communications, Inc., 5.625% notes, due 11/15/08 | 664,875 | |||||||||
2,100,495 |
Shares or Principal Amount | Value | ||||||||||
Telephone - Integrated - 3.0% | |||||||||||
Cincinnati Bell, Inc.: | |||||||||||
$ | 350,000 | 7.25%, company guaranteed notes due 7/15/13 | $ | 357,000 | |||||||
1,024,000 | 8.375%, senior subordinated notes due 1/15/14 | 1,047,040 | |||||||||
513,000 | Hawaiian Telcom Communications, Inc. 9.75%, senior notes, due 5/1/13 (144A)§ | 530,955 | |||||||||
Level 3 Financing, Inc.: | |||||||||||
2,025,000 | 10.75%, company guaranteed notes due 10/15/11 | 2,090,813 | |||||||||
1,350,000 | 12.25%, senior notes, due 3/15/13 (144A) | 1,444,500 | |||||||||
1,198,000 | Qwest Communications International, Inc. | ||||||||||
7.50%, company guaranteed notes due 2/15/14 | 1,206,985 | ||||||||||
Qwest Corp.: | |||||||||||
2,671,000 | 7.875%, senior notes, due 9/1/11 | 2,801,211 | |||||||||
4,183,000 | 8.875%, notes, due 3/15/12‡ | 4,580,384 | |||||||||
14,058,888 | |||||||||||
Textile - Products - 0.2% | |||||||||||
699,000 | Invista, Inc., 9.25% notes, due 5/1/12 (144A) | 746,183 | |||||||||
Textile-Home Furnishings - 0.3% | |||||||||||
1,674,000 | Mohawk Industries, Inc., 6.125% senior unsecured notes, due 1/15/16 | 1,644,474 | |||||||||
Theaters - 0.5% | |||||||||||
2,124,000 | AMC Entertainment, Inc., 11.00% | ||||||||||
company guaranteed notes due 2/1/16 (144A) | 2,304,540 | ||||||||||
Transportation - Marine - 0.7% | |||||||||||
450,000 | H-Lines Finance Holding Corp., 0% senior discount notes, due 4/1/13 | 382,500 | |||||||||
1,463,000 | Horizon Lines LLC, 9.00% company guaranteed notes, due 11/1/12 | 1,523,349 | |||||||||
1,348,000 | Ship Finance International, Ltd., 8.50% senior notes, due 12/15/13 | 1,263,750 | |||||||||
3,169,599 | |||||||||||
Transportation - Railroad - 0.3% | |||||||||||
TFM S.A. de C.V.: | |||||||||||
1,100,000 | 9.375%, senior notes, due 5/1/12 | 1,182,500 | |||||||||
350,000 | 12.50%, senior notes, due 6/15/12 | 387,625 | |||||||||
1,570,125 | |||||||||||
Total Corporate Bonds (cost $452,815,317) | 454,281,317 | ||||||||||
Preferred Stock - 2.1% | |||||||||||
Airlines - 0.6% | |||||||||||
79,100 | Continental Airlines, Inc., 6.00% | 2,570,750 | |||||||||
Containers - Metal and Glass - 0% | |||||||||||
2,925 | Owens-Illinois, Inc., convertible, 4.75%# | 101,644 | |||||||||
Independent Power Producer - 0.8% | |||||||||||
14,750 | NRG Energy, Inc., convertible, 5.75% | 3,648,781 | |||||||||
Non-Hazardous Waste Disposal - 0.6% | |||||||||||
6,880 | Allied Waste Industries, Inc. convertible, 6.25%# | 2,648,180 | |||||||||
REIT - Hotels - 0.1% | |||||||||||
23,465 | Strategic Hotels & Resorts, Inc. 8.50% (144A)§ | 596,159 | |||||||||
Total Preferred Stock (cost $8,660,650) | 9,565,514 |
See Notes to Schedules of Investments and Financial Statements.
28 Janus Bond & Money Market Funds April 30, 2006
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Warrants - 0.2% | |||||||||||
Casino Services - 0.2% | |||||||||||
166,722 | Progressive Gaming Corp. - expires 8/15/08ß,ºº (cost $167) | $ | 1,018,671 | ||||||||
Other Securities - 0.2% | |||||||||||
952,325 | State Street Navigator Securities Lending Prime Portfolio† (cost $952,325) | 952,325 | |||||||||
Time Deposit - 0.5% | |||||||||||
$ | 2,500,000 | ING Financial, ETD 4.86%, 5/1/06 (cost $2,500,000) | 2,500,000 | ||||||||
Total Investments (total cost $464,928,459) – 98.6% | 468,317,827 | ||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 1.4% | 6,662,517 | ||||||||||
Net Assets – 100% | $ | 474,980,344 |
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Bermuda | $ | 10,093,083 | 2.2 | % | |||||||
Canada | 22,581,690 | 4.8 | % | ||||||||
Mexico | 1,570,125 | 0.3 | % | ||||||||
Netherlands | 1,245,110 | 0.3 | % | ||||||||
Singapore | 1,000,960 | 0.2 | % | ||||||||
United Kingdom | 2,303,750 | 0.5 | % | ||||||||
United States†† | 429,523,109 | 91.7 | % | ||||||||
Total | $ | 468,317,827 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (91.0% excluding Short-Term Securities and Other Securities)
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2006 29
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.
Gibson Smith
portfolio manager
Economic and Performance Overview
Fixed-income markets remained volatile in the period ended April 30, 2006, as investors speculated as to when the Federal Reserve's tightening campaign would come to an end and renewed their focus on the rising energy and commodity prices. Specifically, oil grabbed the attention of investors as it crossed levels not seen since the hurricanes hit the Gulf last year. There was also considerable attention paid to the global central banks, with new speculation that the end of the global liquidity cycle was near. The Federal Reserve (Fed) raised interest rates four times during the period. The European Central Bank followed the Fed's lead and hiked rates, and the Japanese Central Bank indicated that its zero interest rate policy was coming to an end. The trend in interest rates was higher around the globe.
In the credit markets, concerns about management actions that favor stockholders over bondholders – such as share buybacks and dividend increases – eased somewhat. As a result, credit markets were firm with spreads unchanged with tighter and lower-quality credit significantly outperforming in the quarter.
At the beginning of the year the consensus was that the U.S. economy was going to lose momentum, fostered by higher energy prices and 14 consecutive rate hikes by the Fed since June 30, 2004. Interest rates declined in the first three weeks of 2006, and the yield curve, measured by the difference between 30-year Treasuries and 2-year Treasuries, inverted (an infrequent event where the 2-year Treasury yields more than the 30-year Treasury). In light of the consensus, the Fed continued its tightening campaign by raising the Fed Funds target rate twice during the first quarter of 2006, taking it to 4.75%. By the end of January, the consensus started to shift as economic growth and inflationary expectations began to rise. This led to an increase in the entire term structure of interest rates and a steepening of the curve. The yield on the 5-year Treasury note staged a significant move in the period, rising by 47 basis points, and the 2-year Trea sury and 10-year Treasury were both up over 48 basis points.
The global economic data pointed toward signs of continued strength, while job growth remained robust and tightening labor markets pushed the unemployment rate below 4.7%. Manufacturing was robust during the period, and the U.S. service sector continued to show signs of strength.
Oil exceeded $70 a barrel during the period, levels not seen since the hurricanes hit the Gulf region, and commodity prices continued their march higher with copper, sugar and gold all hitting near-term highs within the period. Overall strength in commodities led to rising inflation expectations and forced many to question the state of the economy.
The housing market continues to be a focal point, as any signs of slowing demand could weigh on the overall consumption patterns within the domestic economy.
Based on concerns in the credit markets around shareholder-friendly activity and potential balance sheet destruction by "Corporate America," credit spreads remained firm throughout the period, with the lowest-quality segment of the market
significantly outperforming. The credit markets remain focused on the automotive sector, with a keen eye toward General Motors (GM). The tone of the automotive sector changed by the day due to speculation around the sale of General Motors Acceptance Corporation (GMAC) (GM's automotive finance division). Discussions with the UAW around benefits and their pensions, bankruptcy, and potential strikes all led to increased volatility. In light of the volatility in the automotive sector, the rest of the market traded tighter in spread. The non-investment grade market (high-yield) traded significantly tighter in the period. Investors returned to the high-yield and bank loan markets in search of higher yields and returns less sensitive to interest rates.
Against this backdrop, I stuck with our disciplined strategy and focused on the current interest rate environment, paying very close attention to the downside risk in the market while scouring the credit markets for companies that are committed to improving their financial metrics. For the six-month period ended April 30, 2006, Janus Short-Term Bond Fund posted a 1.67% gain, outperforming the 1.50% increase of its benchmark, the Lehman Brothers Government/Credit 1-3 Year Index.
Strategy in this Environment
Entering 2006, I was impressed with the apparently unending strength in the economy and became skeptical of the consensus view that the global economy was slowing. Yet, after significant rate increases from the Fed, it seems clear that policymakers are close to ending their tightening campaign. In light of this, I remained concerned with the rising commodity prices, climbing energy prices, tightening labor markets and rising inflationary expectations. My biggest concern remains that input price pressure could ultimately be passed on to the end consumer and that the tightening labor markets could potentially fuel wage increases, further pressuring inflation expectations. While we have seen an increase in overall pricing, the core gauges of inflation remain very well contained.
I managed Janus Short-Term Bond Fund to a duration that was shorter than the Fund's benchmark. I achieved the shorter duration positioning by swapping many of the securities with maturities longer than three years into shorter-maturity bonds, and by adding floating-rate securities (corporate bonds and bank loans) that are traditionally less sensitive to moves in interest rates.
30 Janus Bond & Money Market Funds April 30, 2006
(unaudited)
I continue to maintain a significant portion of the portfolio in U.S. Treasury notes and hold a small allocation in U.S. Treasury inflation-protected securities (TIPS). During the period, I continued to reduce the overall holdings in investment-grade credit, opting for exposure to lower-rated bank loans and high-yield bonds. This strategy has helped increase the overall yield in the portfolio, reduce the interest rate sensitivity, and diversify the credit risk away from the very tight investment grade market and toward more credit-specific names that we believe are focused on improving their credit profiles.
Detractors and Contributors to Fund Performance
Due to the large percentage of the Fund invested in U.S. Treasury notes, the largest detractors from performance were U.S. Treasuries with longer maturities. On the positive side, our lower-rated holdings outperformed in the period. Our positions in automotive companies, Ford and GMAC, performed well versus some of our other treasury holdings. Despite the concerns around the future of GM and Ford, the companies' liquidity profiles remain very strong, with large cash positions on their balance sheets and management teams focused on turning around the operations. Our holdings in energy producer, Williams, also performed well with higher energy prices leading to solid operating metrics at the company. Freescale Semiconductor, the semiconductor producer spun out of Motorola last year, was another solid
contributor. The company was upgraded to investment grade status by Standard & Poor's ratings agency in February and we expect ratings agencies Fitch and Moody's to follow suit, as the company has a very large cash balance and continues to concentrate on its balance sheet.
Looking Ahead
Going forward, I intend to maintain a short duration positioning versus the benchmark in the interest of preserving capital in the rising rate environment. I am watching the global economy and the Fed very closely, and if I see any indications of the economy slowing or the Fed ending its tightening campaign, I will reconsider the duration positioning of the Fund. I will continue to monitor the spread relationship between the 2-year U.S. Treasury and the target Federal Funds rate as a good gauge of market expectations. I will also continue to monitor the credit markets for opportunities. Wider spreads should present the opportunity for us to increase our weighting in credit in the Fund. In the meantime, I will continue to concentrate on individual companies that are focused on improving their credit metrics. I am very fortunate to have a very strong team behind me that is dedicated to uncovering opportunities for our shareholders. We continue our commitment to disciplined, detailed, in-depth credit research, relying on our bottom-up fundamental research within the credit universe.
Thank you for your continued investment in Janus Short-Term Bond Fund.
Janus Short-Term Bond Fund At a Glance
Fund Profile
April 30, 2006 | |||||||
Weighted Average Maturity | 1.7 Years | ||||||
Average Modified Duration* | 1.1 Years | ||||||
30-Day Current Yield** | |||||||
With Reimbursement | 4.56 | % | |||||
Without Reimbursement | 4.07 | % | |||||
Weighted Average Fixed Income Credit Rating | AAA | ||||||
Number of Bonds/Notes | 68 |
*A theoretical measure of price volatility
**Yield will fluctuate
Ratings† Summary – (% of Net Assets)
April 30, 2006 | |||||||
AAA | 74.2 | % | |||||
AA | 2.8 | % | |||||
A | 2.4 | % | |||||
BBB | 5.3 | % | |||||
BB | 7.5 | % | |||||
B | 1.1 | % | |||||
Other | 6.7 | % |
†Rated by Standard & Poor's
Significant Areas of Investment – (% of Net Assets) | Asset Allocation – (% of Net Assets) | ||||||
As of April 30, 2006 | As of April 30, 2006 | ||||||
![]() | ![]() | ||||||
Janus Bond & Money Market Funds April 30, 2006 31
Janus Short-Term Bond Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2006
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | |||||||||||||||||||
Janus Short-Term Bond Fund | 1.67 | % | 2.43 | % | 3.11 | % | 4.89 | % | 4.66 | % | |||||||||||||
Lehman Brothers Government/ Credit 1-3 Year Index | 1.50 | % | 2.25 | % | 3.64 | % | 5.09 | % | 5.08 | %** | |||||||||||||
Lipper Quartile | N/A | 2 | nd | 2 | nd | 1 | st | 2 | nd | ||||||||||||||
Lipper Ranking - based on total return for Short Investment Grade Debt Funds | N/A*** | 68/228 | 63/129 | 13/66 | 11/25 |
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes reinvestment of dividends and capital gains. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares.
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.
* 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.
*** The Fund's fiscal year-to-date Lipper ranking is not available.
See "Explanations of Charts, Tables and Financial Statements."
Bond funds 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 bonds funds. The return 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.
The Fund's portfolio may differ significantly from the securities held in the index. The index is not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
Janus Capital Management LLC has contractually agreed to waive the Fund's total operating expenses to levels indicated in the prospectus until at least March 1, 2007. Total returns shown include fee waivers, if any, and without such waivers, the Fund's yields and total return would have been lower.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
The Fund will invest at least 80% of its assets in the type of securities described by its name.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,016.70 | $ | 3.25 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.57 | $ | 3.26 |
*Expenses are equal to the annualized expense ratio of 0.65%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital.
32 Janus Bond & Money Market Funds April 30, 2006
Janus Short-Term Bond Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Corporate Bonds - 24.6% | |||||||||||
Automotive - Truck Parts and Equipment - Original - 0.2% | |||||||||||
$ | 344,534 | Lear Corp., 0% bank loan, due 4/25/12‡ | $ | 344,965 | |||||||
Beverages - Non-Alcoholic - 1.1% | |||||||||||
2,000,000 | Bottling Group LLC, 2.45% senior notes, due 10/16/06 | 1,973,706 | |||||||||
Cable Television - 1.5% | |||||||||||
CSC Holdings, Inc.: | |||||||||||
332,905 | 6.74%, bank loan, due 3/30/13‡ | 334,060 | |||||||||
499,357 | 6.67%, bank loan, due 3/30/13‡ | 501,090 | |||||||||
332,905 | 6.58%, bank loan, due 3/30/13‡ | 334,060 | |||||||||
1,525,000 | Lenfest Communications, Inc., 10.50% senior subordinated notes, due 6/15/06 | 1,532,579 | |||||||||
2,701,789 | |||||||||||
Cellular Telecommunications - 0.4% | |||||||||||
725,000 | Rogers Wireless Communications, Inc. 7.61625%, secured notes, due 12/15/10‡ | 746,750 | |||||||||
Computer Services - 0.3% | |||||||||||
456,375 | Affiliated Computer Services, Inc. 6.42938%, bank loan, due 8/20/13‡ | 459,798 | |||||||||
Dialysis Centers - 0.3% | |||||||||||
Fresenius Medical Care AG & Co.: | |||||||||||
302,457 | 6.4031%, bank loan, due 3/31/11‡ | 302,329 | |||||||||
70,573 | 6.3544%, bank loan, due 3/31/11‡ | 70,544 | |||||||||
131,065 | 6.3544%, bank loan, due 3/31/11‡ | 131,010 | |||||||||
503,883 | |||||||||||
Diversified Financial Services - 2.0% | |||||||||||
3,520,000 | General Electric Capital Corp., 3.50% notes, due 8/15/07 | 3,445,049 | |||||||||
Electric - Integrated - 2.8% | |||||||||||
4,615,000 | FirstEnergy Corp., 5.50%, notes due 11/15/06** | 4,614,653 | |||||||||
550,000 | TXU Corp., 6.375%, senior notes due 6/15/06 | 550,520 | |||||||||
5,165,173 | |||||||||||
Electronic Components - Semiconductors - 0.7% | |||||||||||
1,125,000 | Freescale Semiconductor, Inc., 7.35% senior notes, due 7/15/09‡ | 1,150,313 | |||||||||
Finance - Auto Loans - 3.2% | |||||||||||
Ford Motor Credit Co.: | |||||||||||
1,025,000 | 6.625%, notes, due 6/16/08 | 963,033 | |||||||||
2,830,000 | 0%, notes, due 4/15/12‡ | 2,833,132 | |||||||||
2,000,000 | General Motors Acceptance Corp., 4.50% notes, due 7/15/06 | 1,985,417 | |||||||||
5,781,582 | |||||||||||
Finance - Investment Bankers/Brokers - 1.7% | |||||||||||
3,010,000 | Citigroup, Inc., 3.50% notes, due 2/1/08** | 2,922,517 | |||||||||
Food - Wholesale/Distribution - 0.1% | |||||||||||
Roundy's Supermarket, Inc.: | |||||||||||
49,904 | 7.87%, bank loan, due 10/27/11‡ | 50,528 | |||||||||
50,155 | 7.72%, bank loan, due 10/27/11‡ | 50,781 | |||||||||
101,309 | |||||||||||
Independent Power Producer - 1.5% | |||||||||||
NRG Energy, Inc.: | |||||||||||
485,240 | 6.97938%, bank loan, due 9/30/12‡ | 489,690 | |||||||||
2,128,309 | 6.82%, bank loan, due 9/30/12‡ | 2,150,486 | |||||||||
2,640,176 |
Shares or Principal Amount | Value | ||||||||||
Miscellaneous Manufacturing - 0.2% | |||||||||||
$ | 275,012 | Nutro Products, Inc., 0% bank loan, due 4/26/13‡ | $ | 277,592 | |||||||
Oil Companies - Integrated - 2.0% | |||||||||||
2,000,000 | BP Capital Markets PLC, 2.75% company guaranteed notes, due 12/29/06 | 1,970,487 | |||||||||
1,560,000 | ConocoPhillips, 0% company guaranteed notes, due 4/11/07‡ | 1,559,443 | |||||||||
3,529,930 | |||||||||||
Paper and Related Products - 1.2% | |||||||||||
Georgia Pacific Corporation, Inc.: | |||||||||||
73,379 | 6.97938%, bank loan, due 12/20/12‡ | 73,752 | |||||||||
1,548,893 | 6.88%, bank loan, due 12/20/12‡ | 1,556,762 | |||||||||
120,470 | 8.02938%, bank loan, due 12/23/13‡ | 122,979 | |||||||||
120,470 | 7.9575%, bank loan, due 12/23/13‡ | 122,979 | |||||||||
120,470 | 7.92%, bank loan, due 12/23/13‡ | 122,979 | |||||||||
120,470 | 7.88%, bank loan, due 12/23/13‡ | 122,979 | |||||||||
60,235 | 7.88%, bank loan, due 12/23/13‡ | 61,489 | |||||||||
2,183,919 | |||||||||||
Pipelines - 1.5% | |||||||||||
1,610,000 | Enterprise Products Operating L.P., 4.00% senior notes, due 10/15/07 | 1,573,290 | |||||||||
985,000 | Williams Companies, Inc., 6.53625% notes, due 10/1/10 (144A)‡,§ | 1,012,088 | |||||||||
2,585,378 | |||||||||||
Reinsurance - 1.9% | |||||||||||
3,445,000 | Berkshire Hathaway, Inc., 3.375% notes, due 10/15/08 | 3,300,872 | |||||||||
Retail - Computer Equipment - 0.2% | |||||||||||
260,000 | GameStop Holdings Corp., 8.865% | ||||||||||
company guaranteed notes due 10/1/11 (144A)‡ | 268,125 | ||||||||||
Specified Purpose Acquisition Company - 0.3% | |||||||||||
471,438 | Solar Capital Corp., 7.215% bank loan, due 1/5/13‡ | 476,586 | |||||||||
Telecommunication Services - 0.4% | |||||||||||
750,000 | Verizon Global Funding Corp., 4.00% senior unsecured notes, due 1/15/08 | 732,995 | |||||||||
Telephone - Integrated - 0.6% | |||||||||||
1,100,000 | Mountain States Telephone & Telegraph Co. 6.00%, debentures, due 8/1/07 | 1,100,000 | |||||||||
Transportation - Railroad - 0.5% | |||||||||||
735,000 | TFM S.A. de C.V., 12.50% senior notes, due 6/15/12 | 814,013 | |||||||||
Total Corporate Bonds (cost $43,611,285) | 43,206,420 | ||||||||||
U.S. Government Agencies - 4.4% | |||||||||||
1,665,000 | Federal Home Loan Bank System, 3.75% due 5/15/07 | 1,640,889 | |||||||||
6,215,000 | Freddie Mac, 3.625%, due 9/15/06 | 6,179,618 | |||||||||
Total U.S. Government Agencies (cost $7,874,531) | 7,820,507 | ||||||||||
U.S. Treasury Notes - 65.9% | |||||||||||
U.S. Treasury Notes: | |||||||||||
425,000 | 2.50%, due 9/30/06 | 420,700 | |||||||||
1,330,000 | 2.50%, due 10/31/06# | 1,314,103 | |||||||||
2,342,000 | 3.50%, due 11/15/06# | 2,323,704 | |||||||||
305,000 | 3.00%, due 12/31/06# | 301,056 | |||||||||
3,574,043 | 3.375%, due 1/15/07ÇÇ,# | 3,616,205 | |||||||||
8,115,000 | 3.125%, due 1/31/07 | 8,005,634 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2006 33
Janus Short-Term Bond Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
U.S. Treasury Notes - (continued) | |||||||||||
$ | 6,225,000 | 3.75%, due 3/31/07# | $ | 6,158,131 | |||||||
11,190,000 | 3.625%, due 4/30/07# | 11,047,507 | |||||||||
2,980,000 | 3.125%, due 5/15/07 | 2,925,871 | |||||||||
1,610,000 | 3.875%, due 7/31/07# | 1,589,749 | |||||||||
15,455,000 | 2.75%, due 8/15/07# | 15,039,647 | |||||||||
185,000 | 4.00%, due 9/30/07# | 182,731 | |||||||||
12,000,000 | 4.25%, due 10/31/07# | 11,888,904 | |||||||||
8,645,000 | 3.00%, due 11/15/07# | 8,403,882 | |||||||||
9,260,000 | 4.375%, due 1/31/08# | 9,180,058 | |||||||||
1,580,000 | 4.625%, due 2/29/08# | 1,572,841 | |||||||||
9,848,000 | 4.625%, due 3/31/08# | 9,802,227 | |||||||||
990,000 | 3.75%, due 5/15/08# | 968,654 | |||||||||
2,850,000 | 4.375%, due 11/15/08# | 2,815,601 | |||||||||
13,770,000 | 4.50%, due 2/15/09# | 13,634,448 | |||||||||
2,540,000 | 4.00%, due 6/15/09# | 2,474,913 | |||||||||
2,337,000 | 3.50%, due 8/15/09# | 2,238,956 | |||||||||
Total U.S. Treasury Notes (cost $116,986,980) | 115,905,522 | ||||||||||
Floating Rate Note - 1.9% | |||||||||||
1,312,425 | California Infrastructure and Economic Development Bank Industrial Revenue Series B, 1.20%, 4/1/24 | 1,312,425 | |||||||||
1,335,450 | Cunat Capital Corp., Series 1998-A 5.21%, 12/1/28 | 1,335,450 | |||||||||
755,000 | Unicredito Italiano Bank of Ireland 4.85875%, 3/9/11 | 755,000 | |||||||||
Total Floating Rate Note (amortized cost $3,402,875) | 3,402,875 | ||||||||||
Other Securities - 25.5% | |||||||||||
44,872,848 | State Street Navigator Securities Lending Prime Portfolio† (cost $44,872,848) | 44,872,848 | |||||||||
Time Deposit - 2.1% | |||||||||||
$ | 3,700,000 | ING Financial, ETD 4.86% due 5/1/06 (cost $3,700,000) | 3,700,000 | ||||||||
Total Investments (total cost $220,448,519) – 124.4% | 218,908,172 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (24.4)% | (42,951,120 | ) | |||||||||
Net Assets – 100% | $ | 175,957,052 |
Summary of Investments by Country
Country | Value | % of Investment Securities | |||||||||
Canada | $ | 746,750 | 0.3 | % | |||||||
Mexico | 814,013 | 0.4 | % | ||||||||
United Kingdom | 1,970,487 | 0.9 | % | ||||||||
United States†† | 215,376,922 | 98.4 | % | ||||||||
Total | $ | 218,908,172 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (76.2% excluding Short-Term Securities and Other Securities)
See Notes to Schedules of Investments and Financial Statements.
34 Janus Bond & Money Market Funds April 30, 2006
Janus Money Market Funds (unaudited)
Ticker: JAMXX
Janus Money Market Fund Average Annual Total Return For the Periods Ended April 30, 2006 | Portfolio Managers Sharon Pichler J. Eric Thorderson | ||||||
Investor Shares | |||||||
Fiscal Year-to-Date | 1.95 | % | |||||
1 Year | 3.42 | % | |||||
5 Year | 1.83 | % | |||||
10 Year | 3.54 | % | |||||
Since Inception (February 14, 1995) | 3.74 | % | |||||
Institutional Shares | |||||||
Fiscal Year-to-Date | 2.16 | % | |||||
1 Year | 3.86 | % | |||||
5 Year | 2.26 | % | |||||
10 Year | 3.99 | % | |||||
Since Inception (April 14, 1995) | 4.16 | % | |||||
Service Shares | |||||||
Fiscal Year-to-Date | 2.04 | % | |||||
1 Year | 3.60 | % | |||||
5 Year | 2.00 | % | |||||
Since Inception (November 22, 1996) | 3.64 | % | |||||
Seven-Day Current Yield | |||||||
Investor Shares: | |||||||
With Reimbursement | 4.32 | % | |||||
Without Reimbursement | 4.22 | % | |||||
Institutional Shares: | |||||||
With Reimbursement | 4.74 | % | |||||
Without Reimbursement | 4.57 | % | |||||
Service Shares: | |||||||
With Reimbursement | 4.49 | % | |||||
Without Reimbursement | 4.32 | % |
Ticker: JATXX
Janus Tax-Exempt Money Market Fund Average Annual Total Return For the Periods Ended April 30, 2006 | Portfolio Manager Sharon Pichler | ||||||
Investor Shares | |||||||
Fiscal Year-to-Date | 1.27 | % | |||||
1 Year | 2.26 | % | |||||
5 Year | 1.28 | % | |||||
10 Year | 2.25 | % | |||||
Since Inception (February 14, 1995) | 2.37 | % | |||||
Institutional Shares | |||||||
Fiscal Year-to-Date | 1.48 | % | |||||
1 Year | 2.69 | % | |||||
5 Year | 1.71 | % | |||||
10 Year | 2.69 | % | |||||
Since Inception (April 14, 1995) | 2.79 | % | |||||
Service Shares | |||||||
Fiscal Year-to-Date | 1.35 | % | |||||
1 Year | 2.43 | % | |||||
5 Year | 1.46 | % | |||||
Since Inception (November 22, 1996) | 2.39 | % | |||||
Seven-Day Current Yield | |||||||
Investor Shares: | |||||||
With Reimbursement | 3.11 | % | |||||
Without Reimbursement | 3.01 | % | |||||
Institutional Shares: | |||||||
With Reimbursement | 3.52 | % | |||||
Without Reimbursement | 3.26 | % | |||||
Service Shares: | |||||||
With Reimbursement | 3.28 | % | |||||
Without Reimbursement | 3.10 | % |
Ticker: JAGXX
Janus Government Money Market Fund Average Annual Total Return For the Periods Ended April 30, 2006 | Portfolio Managers J. Eric Thorderson Jeanine Morroni | ||||||
Investor Shares | |||||||
Fiscal Year-to-Date | 1.91 | % | |||||
1 Year | 3.36 | % | |||||
5 Year | 1.77 | % | |||||
10 Year | 3.45 | % | |||||
Since Inception (February 14, 1995) | 3.65 | % | |||||
Institutional Shares | |||||||
Fiscal Year-to-Date | 2.14 | % | |||||
1 Year | 3.82 | % | |||||
5 Year | 2.23 | % | |||||
10 Year | 3.91 | % | |||||
Since Inception (April 14, 1995) | 4.09 | % | |||||
Service Shares | |||||||
Fiscal Year-to-Date | 2.01 | % | |||||
1 Year | 3.56 | % | |||||
5 Year | 1.97 | % | |||||
Since Inception (November 22, 1996) | 3.57 | % | |||||
Seven-Day Current Yield | |||||||
Investor Shares: | |||||||
With Reimbursement | 4.25 | % | |||||
Without Reimbursement | 4.13 | % | |||||
Institutional Shares: | |||||||
With Reimbursement | 4.70 | % | |||||
Without Reimbursement | 4.48 | % | |||||
Service Shares: | |||||||
With Reimbursement | 4.45 | % | |||||
Without Reimbursement | 4.23 | % |
Data presented represents past performance, which is no guarantee of future results. 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.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Funds.
See "Explanations of Charts, Tables and Financial Statements."
Income may be subject to state or local taxes and to a limited extent certain federal tax.
The yield more closely reflects the current earnings of each Money Market Fund than the total return.
Total return includes reinvestment of dividends and capital gains.
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.
See Notes to Schedules of Investments and Financial Statements.
The Funds will invest at least 80% of their net assets in the type of securities described by their name.
Janus Bond & Money Market Funds April 30, 2006 35
Janus Money Market Fund (unaudited)
Fund Expenses
The examples below show you the ongoing costs (in dollars) of investing in your Fund and allow you to compare these costs with those of other mutual funds. Please refer to page 5 for a detailed explanation of the information presented in these charts.
Expense Example - Investor Shares | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,019.50 | $ | 3.00 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.82 | $ | 3.01 |
*Expenses are equal to the annualized expense ratio of 0.60%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual or voluntary waivers by Janus Capital.
Expense Example - Institutional Shares | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,021.60 | $ | 0.90 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,023.90 | $ | 0.90 |
*Expenses are equal to the annualized expense ratio of 0.18%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual or voluntary waivers by Janus Capital.
Expense Example - Service Shares | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,020.40 | $ | 2.15 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.66 | $ | 2.16 |
*Expenses are equal to the annualized expense ratio of 0.43%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual or voluntary waivers by Janus Capital.
36 Janus Bond & Money Market Funds April 30, 2006
Janus Government Money Market Fund (unaudited)
Fund Expenses
The examples below show you the ongoing costs (in dollars) of investing in your Fund and allow you to compare these costs with those of other mutual funds. Please refer to page 5 for a detailed explanation of the information presented in these charts.
Expense Example - Investor Shares | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,019.10 | $ | 3.05 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.77 | $ | 3.06 |
*Expenses are equal to the annualized expense ratio of 0.61%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual or voluntary waivers by Janus Capital.
Expense Example - Institutional Shares | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,021.40 | $ | 0.80 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,024.00 | $ | 0.80 |
*Expenses are equal to the annualized expense ratio of 0.16%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual or voluntary waivers by Janus Capital.
Expense Example - Service Shares | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,020.10 | $ | 2.05 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.76 | $ | 2.06 |
*Expenses are equal to the annualized expense ratio of 0.41%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual or voluntary waivers by Janus Capital.
Janus Bond & Money Market Funds April 30, 2006 37
Janus Tax-Exempt Money Market Fund (unaudited)
Fund Expenses
The examples below show you the ongoing costs (in dollars) of investing in your Fund and allow you to compare these costs with those of other mutual funds. Please refer to page 5 for a detailed explanation of the information presented in these charts.
Expense Example - Investor Shares | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,012.70 | $ | 3.24 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.57 | $ | 3.26 |
*Expenses are equal to the annualized expense ratio of 0.65%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual or voluntary waivers by Janus Capital.
Expense Example - Institutional Shares | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,014.80 | $ | 1.10 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,023.70 | $ | 1.10 |
*Expenses are equal to the annualized expense ratio of 0.22%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual or voluntary waivers by Janus Capital.
Expense Example - Service Shares | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,013.50 | $ | 2.40 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,022.41 | $ | 2.41 |
*Expenses are equal to the annualized expense ratio of 0.48%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual or voluntary waivers by Janus Capital.
38 Janus Bond & Money Market Funds April 30, 2006
Janus Money Market Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Principal Amount | Value | ||||||||||
Certificates of Deposit - 16.1% | |||||||||||
$ | 50,000,000 | ABN Amro Bank N.V., Chicago 4.945%, 2/2/07 | $ | 50,000,000 | |||||||
Calyon, New York: | |||||||||||
30,000,000 | 4.00%, 7/19/06 | 29,998,735 | |||||||||
18,000,000 | 4.22%, 8/30/06 | 17,998,726 | |||||||||
Mitsubishi Trust and Bank: | |||||||||||
50,000,000 | 4.73%, 5/15/06 | 50,000,000 | |||||||||
50,000,000 | 4.925%, 5/22/06 | 50,000,000 | |||||||||
35,000,000 | 5.03%, 6/26/06 | 35,000,000 | |||||||||
50,000,000 | Natexis Banques Populaires, New York 5.00%, 2/5/07 | 50,000,000 | |||||||||
Norinchunkin Bank, New York: | |||||||||||
35,000,000 | 4.84%, 5/8/06 | 35,000,000 | |||||||||
35,000,000 | 4.79%, 5/25/06 | 35,000,000 | |||||||||
50,000,000 | 4.96%, 6/9/06 | 50,000,000 | |||||||||
45,000,000 | 5.00%, 6/19/06 | 45,000,000 | |||||||||
50,000,000 | Royal Bank of Canada, New York 4.06%, 7/25/06 | 50,000,000 | |||||||||
25,000,000 | Royal Bank of Scotland, New York 4.175%, 9/22/06 | 25,000,480 | |||||||||
Shinkin Central Bank: | |||||||||||
30,000,000 | 4.75%, 5/8/06 | 30,000,000 | |||||||||
40,000,000 | 4.775%, 5/10/06 | 40,000,000 | |||||||||
50,000,000 | Skandinaviska Enskilda Bank, New York 5.27%, 4/11/07 | 50,002,296 | |||||||||
50,000,000 | Societe Generale, New York 3.80%, 6/14/06 | 50,000,000 | |||||||||
60,000,000 | Sumitomo Mitsui, New York 4.89%, 5/17/06 | 60,000,000 | |||||||||
Sumitomo Trust and Bank: | |||||||||||
50,000,000 | 4.73%, 5/10/06 | 50,000,000 | |||||||||
55,000,000 | 4.73%, 5/11/06 | 55,000,000 | |||||||||
50,000,000 | Toronto Dominion Bank, New York 3.75%, 5/11/06 | 50,000,000 | |||||||||
Total Certificates of Deposit (cost $908,000,237) | 908,000,237 | ||||||||||
Commercial Paper - 21.6% | |||||||||||
35,000,000 | Bavaria TRR Corp. 4.94%, 5/24/06 (Section 4(2)) | 34,889,536 | |||||||||
19,000,000 | BTM Capital Corp. 4.93%, 6/5/06 | 18,908,932 | |||||||||
G Street Finance Corp.: | |||||||||||
35,000,000 | 4.82%, 5/8/06 (144A)§ | 34,967,197 | |||||||||
15,493,000 | 4.89%, 5/19/06 (144A)§ | 15,455,120 | |||||||||
30,000,000 | 4.93%, 6/9/06 (144A)§ | 29,839,775 | |||||||||
30,000,000 | 4.98%, 7/7/06 (144A)§ | 29,721,950 | |||||||||
40,000,000 | Gotham Funding Corp. 4.82%, 5/11/06 (Section 4(2)) | 39,946,444 | |||||||||
Klio Funding Corp.: | |||||||||||
87,924,000 | 4.66%, 5/9/06 (144A) | 87,832,838 | |||||||||
25,943,000 | 4.67%, 5/12/06 (144A) | 25,905,981 | |||||||||
50,000,000 | 4.90%, 5/22/06 (144A) | 49,857,083 | |||||||||
25,000,000 | 4.75%, 5/26/06 (144A) | 24,917,535 | |||||||||
Klio II Funding Corp.: | |||||||||||
50,000,000 | 4.905%, 5/22/06 (144A) | 49,856,938 | |||||||||
35,000,000 | 4.94%, 5/25/06 (144A) | 34,884,733 | |||||||||
50,000,000 | Klio III Funding Corp. 4.88%, 5/18/06 (144A) | 49,884,778 | |||||||||
La Fayette Asset Securitization LLC: | |||||||||||
50,000,000 | 4.86%, 5/15/06 (Section 4(2)) | 49,905,500 | |||||||||
25,000,000 | 4.87%, 5/16/06 (Section 4(2)) | 24,949,271 | |||||||||
48,670,000 | 4.965%, 6/15/06 (Section 4(2)) | 48,367,942 |
Principal Amount | Value | ||||||||||
Commercial Paper - (continued) | |||||||||||
Manhattan Asset Funding Company LLC: | |||||||||||
$ | 55,000,000 | 4.83%, 5/11/06 (Section 4(2)) | $ | 54,926,125 | |||||||
57,134,000 | 4.84%, 5/12/06 (Section 4(2)) | 57,049,505 | |||||||||
23,800,000 | 4.99%, 6/29/06 (Section 4(2)) | 23,605,362 | |||||||||
30,000,000 | 4.96%, 6/30/06 (Section 4(2)) | 29,752,000 | |||||||||
30,100,000 | Medical Building Funding IV LLC 5.06%, 5/22/06 | 30,011,155 | |||||||||
PB Finance (Delaware), Inc.: | |||||||||||
43,500,000 | 4.69%, 5/17/06 | 43,409,327 | |||||||||
22,000,000 | 4.935%, 6/12/06 | 21,873,335 | |||||||||
Scaldis Capital LLC: | |||||||||||
50,000,000 | 4.865%, 5/15/06 (Section 4(2)) | 49,905,403 | |||||||||
50,000,000 | 4.875%, 5/17/06 (Section 4(2)) | 49,891,667 | |||||||||
Thames Asset Global Securitization No. 1, Inc.: | |||||||||||
75,599,000 | 4.675%, 6/5/06 (Section 4(2)) | 75,255,391 | |||||||||
60,953,000 | 4.675%, 6/6/06 (Section 4(2)) | 60,668,045 | |||||||||
50,000,000 | Victory Receivables Corp. 4.86%, 5/15/06 (Section 4(2)) | 49,905,500 | |||||||||
18,222,000 | Whistlejacket Capital, Ltd. 4.97%, 6/20/06 (144A) | 18,096,218 | |||||||||
Total Commercial Paper (cost $1,214,440,586) | 1,214,440,586 | ||||||||||
Floating Rate Notes – 23.2% | |||||||||||
75,000,000 | Ares VII CLO, Ltd., Class A-1A 4.765%, 5/8/15 (144A)§ | 75,000,000 | |||||||||
169,000,000 | Bank of America Securities LLC (same day put) 4.95%, 5/1/06 | 169,000,001 | |||||||||
20,000,000 | Dekabank, New York 5.09688%, 5/18/07 (144A)§ | 20,000,000 | |||||||||
150,000,000 | EMC Mortgage Corp. (same day put) 4.995%, 5/8/06 | 150,000,001 | |||||||||
10,000,000 | Harrier Finance Funding LLC 4.86125%, 12/15/06 (144A) | 9,997,507 | |||||||||
130,000,000 | HSH Nordbank A.G., New York 4.95%, 6/22/07 (144A) | 130,000,000 | |||||||||
Lehman Brothers, Inc.: | |||||||||||
120,000,000 | (90 day put) 5.025%, 4/5/27ß | 120,000,000 | |||||||||
45,000,000 | (same day put) 4.995%, 4/17/27 | 45,000,000 | |||||||||
50,000,000 | Natexis Banques Populaires, New York 4.88125%, 6/15/07 (144A) | 49,994,795 | |||||||||
32,975,194 | Park Place Securities Trust, 2004-MM1 AM3, 4.99938%, 2/25/35 (144A)§ | 32,975,194 | |||||||||
101,250,000 | Putnam Structured Product Funding | ||||||||||
2003-1 LLC, Class A-15, 4.92125% 10/15/38 (144A) | 101,250,000 | ||||||||||
27,000,000 | Standard Chartered Bank, New York 4.88688%, 6/16/06 | 26,998,683 | |||||||||
75,000,000 | Unicredito Italiano Bank of Ireland 4.85875%, 5/9/07 | 75,000,000 | |||||||||
75,000,000 | Union Hamilton Special 4.93%, 6/21/06 (144A) | 75,000,000 | |||||||||
150,000,000 | Westdeutsche Landesbank A.G. New York 4.88875%, 6/8/07 | 150,000,000 | |||||||||
77,600,000 | Whistlejacket Capital, Ltd. 4.8825%, 11/27/06 (144A) | 77,582,326 | |||||||||
Total Floating Rate Notes (cost $1,307,798,507) | 1,307,798,507 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2006 39
Janus Money Market Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Principal Amount | Value | ||||||||||
Repurchase Agreements – 23.8% | |||||||||||
$ | 169,000,000 | Citigroup Global Markets, Inc., 5.045% dated 4/28/06, maturing 5/1/06 to be repurchased at $169,071,050 collateralized by $195,009,809 in Credit Enhanced Mortgage Loans 0.001% - 8.62%, 5/31/30 - 3/15/36 with a value of $188,145,226 | $ | 169,000,000 | |||||||
169,000,000 | Credit Suisse First Boston LLC, 4.975% dated 4/28/06, maturing 5/1/06 to be repurchased at $169,070,065 collateralized by $344,679,975 in Asset Backed Securities; 0% - 10.00%, 10/15/10 - 2/27/36 $47,616,000 in Collateralized Mortgage Obligations; 0.04%, 12/12/44; with respective values of $177,223,056 and $221,272 | 169,000,000 | |||||||||
169,000,000 | Deutsche Bank Securities, Inc., 4.985% dated 4/28/06, maturing 5/1/06 to be repurchased at $169,070,205 collateralized by $181,210,956 in Collateralized Mortgage Obligations 4.367% - 6.0311%, 9/15/19 - 5/10/43 with a value of $172,380,000 | 169,000,000 | |||||||||
131,000,000 | Goldman Sachs & Co., 4.975% dated 4/28/06, maturing 5/1/06 to be repurchased at $131,054,310 collateralized by $137,414,965 in Asset Backed Securities 0% - 8.95938%, 7/27/10 - 2/25/46 with a value of $137,550,001 | 131,000,000 | |||||||||
119,000,000 | IXIS Financial Products, Inc., 4.975% dated 4/28/06, maturing 5/1/06 to be repurchased at $119,049,335 collateralized by $305,724,292 in Collateralized Mortgage Obligations 4.95502% - 5.629%, 11/25/41 - 9/25/45 with a value of $121,430,322 | 119,000,000 | |||||||||
169,000,000 | J.P. Morgan Securities, Inc., 4.985% dated 4/28/06, maturing 5/1/06 to be repurchased at $169,070,205 collateralized by $175,765,000 in Corporate Notes 4.50% - 9.50%, 2/01/09 - 3/01/46 with a value of $177,451,485 | 169,000,000 | |||||||||
119,000,000 | Royal Bank of Canada, 4.945% dated 4/28/06, maturing 5/1/06 to be repurchased at $119,049,038 collateralized by $121,982,643 in Commercial Paper 0%, 5/30/06 - 6/1/06 with a value of $121,380,001 | 119,000,000 | |||||||||
196,600,000 | UBS Financial Services, Inc., 4.885% dated 4/28/06, maturing 5/1/06 to be repurchased at $196,680,033 collateralized by $339,442,858 in U.S. Government Agencies 5.00% - 10.00%, 9/15/18 - 2/15/36 with a value of $200,536,159 | 196,600,000 |
Principal Amount | Value | ||||||||||
Repurchase Agreements - (continued) | |||||||||||
$ | 100,000,000 | Wachovia Capital Markets LLC, 4.950% dated 4/28/06, maturing 5/1/06 to be repurchased at $100,041,250 collateralized by $1,275,024,383 in Collateralized Mortgage Obligations 0.066695% - 6.00125%, 3/15/14 - 7/15/42 with a value of $102,609,405 | $ | 100,000,000 | |||||||
Total Repurchase Agreements (cost $1,341,600,000) | 1,341,600,000 | ||||||||||
Short-Term Corporate Notes - 1.3% | |||||||||||
K2 (USA) LLC: | |||||||||||
25,000,000 | 4.645%, 10/30/06 (144A) | 25,000,000 | |||||||||
50,000,000 | 4.835%, 1/23/07 (144A) | 50,000,000 | |||||||||
Total Short-Term Corporate Notes (cost $75,000,000) | 75,000,000 | ||||||||||
Taxable Variable Rate Demand Notes - 8.3% | |||||||||||
11,650,000 | Arbor Properties, Inc., Series 2004 4.98%, 11/1/24 | 11,650,000 | |||||||||
18,670,000 | Breckenridge Terrace LLC 5.05%, 5/1/39 | 18,670,000 | |||||||||
32,610,000 | Cambridge-Plano Partners 5.01%, 10/1/28 | 32,610,000 | |||||||||
10,250,000 | City of Irondale, AL 4.98%, 10/1/35 | 10,250,000 | |||||||||
16,025,000 | Colorado Natural Gas, Inc., Series 2004 5.05%, 7/1/32 | 16,025,000 | |||||||||
32,600,000 | Cook County, Illinois, Series A 5.02%, 11/1/23 | 32,600,000 | |||||||||
Cornerstone Funding Corp. I: | |||||||||||
9,770,000 | Series 2003C, 5.04%, 4/1/13 | 9,770,000 | |||||||||
7,132,000 | Series 2005A, 5.04%, 5/1/25 | 7,132,000 | |||||||||
21,664,000 | Series 2004C, 5.04%, 1/1/30 | 21,664,000 | |||||||||
10,884,000 | Series 2003E, 5.04%, 7/1/30 | 10,884,000 | |||||||||
11,200,000 | Series 2003B, 4.99%, 12/1/30 | 11,200,000 | |||||||||
12,715,000 | Custom Window Systems 5.10%, 11/1/26 | 12,715,000 | |||||||||
2,400,000 | First United Pentecostal 5.10%, 3/1/23 | 2,400,000 | |||||||||
6,070,000 | FJM Properties-Wilmar 5.01%, 10/1/24 | 6,070,000 | |||||||||
15,980,000 | HHH Supply and Investment Co. 4.86%, 7/1/29 | 15,980,000 | |||||||||
15,255,000 | Hillcrest Medical Plaza 4.95%, 9/1/23 | 15,255,000 | |||||||||
13,002,000 | Holston Medical Group 5.10%, 1/1/13 | 13,002,000 | |||||||||
4,940,000 | J&E Land Company 5.03%, 6/1/23 | 4,940,000 | |||||||||
7,200,000 | Lenexa, Kansas Industrial Revenue (Labone, Inc. Project), Series A 5.10%, 9/1/09 | 7,200,000 | |||||||||
20,675,000 | Louisiana Health Systems Corp. Revenue Series B, 4.99%, 10/1/22 | 20,675,000 | |||||||||
10,285,000 | Medical Clinic Board, Mobile, AL 5.01%, 9/1/11 | 10,285,000 | |||||||||
18,570,000 | Mississippi Business Finance Corp. 5.10%, 12/1/22 | 18,570,000 | |||||||||
3,870,000 | Montgomery-Engelside, Alabama Medical Clinic Board Revenue, (Surgical Center) 4.98%, 3/1/24 | 3,870,000 | |||||||||
10,500,000 | Nautical Transport LLC 5.10%, 6/1/16 | 10,500,000 |
See Notes to Schedules of Investments and Financial Statements.
40 Janus Bond & Money Market Funds April 30, 2006
Schedule of Investments (unaudited)
As of April 30, 2006
Principal Amount | Value | ||||||||||
Taxable Variable Rate Demand Notes - (continued) | |||||||||||
$ | 30,700,000 | Olympic Club, California Revenue Series 2002, 5.04%, 10/1/32 | $ | 30,700,000 | |||||||
10,000,000 | Patrick Schaumburg Automobiles, Inc. 5.00%, 7/1/08 (144A)§ | 10,000,000 | |||||||||
14,150,000 | Phenix City Taxable Water and Sewer 5.00%, 8/15/29 | 14,150,000 | |||||||||
10,500,000 | Racetrac Capital LLC, Series 1998-A 4.90%, 4/1/18 | 10,500,000 | |||||||||
25,000,000 | Rehau, Inc. 5.34%, 10/1/19 | 25,000,000 | |||||||||
5,570,000 | Ron Investments, Ltd. 5.01%, 3/1/19 | 5,570,000 | |||||||||
26,300,000 | Shoosmith Brothers, Inc. 4.90%, 3/1/15 | 26,300,000 | |||||||||
19,025,000 | Timber Ridge County Affordable Housing Corporation, Series 2003, 5.10%, 12/1/32 | 19,025,000 | |||||||||
4,375,000 | Union City, Tennessee Industrial Development Board, (Cobank LLC Project), 5.04%, 1/1/25 | 4,375,000 | |||||||||
Total Taxable Variable Rate Demand Notes (cost $469,537,000) | 469,537,000 | ||||||||||
Time Deposits - 5.6% | |||||||||||
147,300,000 | Dexia CLF Finance Co., ETD 4.85%, 5/1/06 | 147,300,000 | |||||||||
167,000,000 | ING Financial, ETD 4.86%, 5/1/06 | 167,000,000 | |||||||||
Total Time Deposits (cost $314,300,000) | 314,300,000 | ||||||||||
Total Investments (total cost $5,630,676,330) – 99.9% | 5,630,676,330 | ||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.1% | 7,692,072 | ||||||||||
Net Assets – 100% | $ | 5,638,368,402 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2006 41
Janus Government Money Market Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Principal Amount | Value | ||||||||||
U.S. Government Agency Floating Rate Notes - 12.4% | |||||||||||
Fannie Mae: | |||||||||||
$ | 10,000,000 | 4.66531%, 5/22/06 | $ | 9,999,654 | |||||||
3,400,000 | 4.72%, 9/7/06 | 3,399,180 | |||||||||
13,500,000 | 4.805%, 9/21/06 | 13,496,580 | |||||||||
5,000,000 | 4.80538%, 12/22/06 | 4,998,097 | |||||||||
5,000,000 | 4.79%, 6/21/07 | 4,997,779 | |||||||||
Federal Farm Credit Bank: | |||||||||||
10,000,000 | 4.76%, 9/29/06 | 9,998,773 | |||||||||
3,000,000 | 4.75063%, 1/3/07 | 3,000,311 | |||||||||
5,000,000 | 4.895%, 7/11/07 | 4,998,458 | |||||||||
Federal Home Loan Bank System: | |||||||||||
2,000,000 | 4.70%, 6/1/06 | 1,999,886 | |||||||||
10,000,000 | 4.716%, 6/2/06 | 9,999,430 | |||||||||
10,000,000 | 4.77%, 6/13/06 | 9,999,182 | |||||||||
10,000,000 | 4.57%, 8/2/06 | 9,998,445 | |||||||||
2,200,000 | 4.77%, 12/13/06 | 2,199,775 | |||||||||
Freddie Mac: | |||||||||||
5,400,000 | 4.83%, 12/27/06 | 5,398,118 | |||||||||
15,000,000 | 4.80%, 6/19/07 | 14,995,025 | |||||||||
7,144,049 | 5.00%, 1/15/42 | 7,144,049 | |||||||||
Total U.S. Government Agency Floating Rate Notes (cost $116,622,742) | 116,622,742 | ||||||||||
U.S. Government Agency Notes - 11.4% | |||||||||||
Fannie Mae: | |||||||||||
5,000,000 | 3.535%, 5/30/06 | 4,985,762 | |||||||||
5,000,000 | 3.71%, 6/30/06 | 4,969,083 | |||||||||
5,042,000 | 4.50%, 9/29/06 | 4,946,832 | |||||||||
5,000,000 | 4.49%, 12/1/06 | 4,866,547 | |||||||||
5,000,000 | 4.665%, 1/26/07 | 4,825,063 | |||||||||
5,000,000 | 4.777%, 2/23/07 | 4,802,285 | |||||||||
5,000,000 | 4.89%, 3/30/07 | 4,773,838 | |||||||||
Freddie Mac: | |||||||||||
10,000,000 | 3.82%-3.98%, 7/25/06 | 9,907,917 | |||||||||
5,000,000 | 4.045%, 8/15/06 | 4,940,449 | |||||||||
5,000,000 | 3.908%, 8/22/06 | 4,938,666 | |||||||||
5,000,000 | 4.14%, 9/19/06 | 4,918,925 | |||||||||
5,000,000 | 4.875%, 10/3/06 | 4,895,052 | |||||||||
10,000,000 | 4.263%-4.88%, 10/17/06 | 9,785,393 | |||||||||
5,000,000 | 4.41%, 11/1/06 | 4,887,300 | |||||||||
10,000,000 | 4.48%-4.545%, 1/9/07 | 9,682,872 | |||||||||
5,000,000 | 4.735%, 2/16/07 | 4,808,627 | |||||||||
5,000,000 | 4.90%, 3/5/07 | 5,000,000 | |||||||||
5,000,000 | 4.805%, 3/6/07 | �� | 4,793,785 | ||||||||
5,000,000 | 4.97%, 4/3/07 | 4,767,376 | |||||||||
Total U.S. Government Agency Notes (cost $107,495,772) | 107,495,772 |
Principal Amount | Value | ||||||||||
Repurchase Agreements - 76.3% | |||||||||||
$ | 150,000,000 | Bear Sterns & Company, Inc., 4.925% dated 4/28/06, maturing 5/1/06 to be repurchased at $150,061,563 collateralized by $413,372,165 in U.S. Government Agencies 0% - 12.00%, 11/25/35 - 5/25/36 with a value of $153,000,219 | $ | 150,000,000 | |||||||
175,000,000 | Credit Suisse First Boston LLC, 4.925% dated 4/28/06, maturing 5/1/06 to be repurchased at $175,071,823 collateralized by $814,793,742 in U.S. Government Agencies 0% - 13.48979%, 5/25/17 - 5/25/36 with a value of $178,502,163 | 175,000,000 | |||||||||
200,600,000 | Fortis Bank N.V., 4.85% dated 4/28/06, maturing 5/1/06 to be repurchased at $200,681,076 collateralized by $250,253,698 in U.S. Government Agencies 5.048% - 7.125%, 2/15/23 - 10/25/35 with a value of $204,612,234 | 200,600,000 | |||||||||
100,000,000 | HSBC Securities (USA), Inc., 4.850% dated 4/28/06, maturing 5/1/06 to be repurchased at $100,040,417 collateralized by $105,664,460 in U.S. Government Agencies 5.50% - 10.44%, 4/25/17 - 5/25/36 with a value of $102,004,602 | 100,000,000 | |||||||||
92,500,000 | Lehman Brothers, Inc., 4.885% dated 4/28/06, maturing 5/1/06 to be repurchased at $92,537,655 collateralized by $562,355,050 in U.S. Government Agencies 0% - 3.79%, 5/18/28 - 11/01/35 with a value of $94,350,446 | 92,500,000 | |||||||||
Total Repurchase Agreements (cost $718,100,000) | 718,100,000 | ||||||||||
Total Investments (total cost $942,218,514) – 100.1% | 942,218,514 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.1)% | (671,182 | ) | |||||||||
Net Assets – 100% | $ | 941,547,332 |
See Notes to Schedules of Investments and Financial Statements.
42 Janus Bond & Money Market Funds April 30, 2006
Janus Tax-Exempt Money Market Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Principal Amount | Value | ||||||||||
Municipal Securities – 99.1% | |||||||||||
Arizona - 0.4% | |||||||||||
$ | 300,000 | Arizona State University, System Revenue Bonds, Series A Variable Rate, 3.80%, 7/1/34 | $ | 300,000 | |||||||
California - 0.5% | |||||||||||
400,000 | Los Angeles Regional Airport Improvements Corp. Lease Revenue, (Sublease - L.A. International) Variable Rate, 3.79%, 12/1/25 | 400,000 | |||||||||
Colorado - 38.4% | |||||||||||
900,000 | Arvada, Colorado Variable Rate, 3.55%, 11/1/20 | 900,000 | |||||||||
1,555,000 | Aurora, Colorado, Centretech Metropolitan District, Series A Variable Rate, 3.45%, 12/1/28ß | 1,555,000 | |||||||||
3,000,000 | Brighton Crossing Metropolitan District No.4, Variable Rate, 3.95%, 12/1/34 | 3,000,000 | |||||||||
Colorado Educational and Cultural Facilities Authority Revenue: | |||||||||||
7,000,000 | (California Baptist University Project) Variable Rate, 3.90%, 9/1/35 | 7,000,000 | |||||||||
725,000 | (Charter School-James Irwin) Variable Rate, 3.80%, 9/1/34 | 725,000 | |||||||||
1,990,000 | Commerce City, Colorado, Northern Infrastructure General Improvement District, Variable Rate, 3.85%, 12/1/31 | 1,990,000 | |||||||||
Ebert Metropolitan District Securitization Trust: | |||||||||||
4,000,000 | Series 2004-S1 Variable Rate, 3.95%, 12/1/34 | 4,000,000 | |||||||||
1,300,000 | Series 2005-S1 Variable Rate, 3.95%, 12/1/09 | 1,300,000 | |||||||||
1,000,000 | Four Mile Ranch Metropolitan District No. 1, Colorado Variable Rate, 3.50%, 12/1/35 | 1,000,000 | |||||||||
2,750,000 | NBC Metropolitan District, Colorado Variable Rate, 3.90%, 12/1/30 | 2,750,000 | |||||||||
2,000,000 | Summit County, Colorado, School District RE-1, Tax Anticipation Notes 3.50%, 6/30/06 | 2,001,697 | |||||||||
3,215,000 | Triview, Colorado, Metropolitan District Variable Rate, 3.375%, 11/21/23 | 3,215,000 | |||||||||
29,436,697 | |||||||||||
Georgia - 2.6% | |||||||||||
2,000,000 | Atlanta, Georgia, Subordinate Lien Tax Allocation Bonds, (Atlantic Station Project) Variable Rate, 3.90%, 12/1/24 | 2,000,000 | |||||||||
Illinois - 22.9% | |||||||||||
2,500,000 | Chicago, Illinois, Tax Increment, Series B Variable Rate, 3.87%, 12/1/14 | 2,500,000 | |||||||||
Illinois Development Finance Authority Revenue: | |||||||||||
8,025,000 | (Illinois Central College) Series A, Variable Rate, 3.99%, 6/1/33 | 8,025,000 | |||||||||
2,900,000 | (Shelby Memorial Hospital Association, Inc.) Series B-1, Variable Rate, 3.89%, 10/1/29 | 2,900,000 | |||||||||
1,275,000 | (St. Anthony's Health Center), Program E-1 Variable Rate, 3.89%, 10/1/29 | 1,275,000 | |||||||||
2,835,000 | Illinois Health Facilities Authority Revenue (Blessing Hospital), (FSA Insured) | ||||||||||
Series B, Variable Rate, 3.84%, 11/15/29 | 2,835,000 | ||||||||||
17,535,000 |
Principal Amount | Value | ||||||||||
Indiana - 1.4% | |||||||||||
$ | 1,100,000 | Logansport, Indiana, Economic Development Revenue, (Modine Manufacturing Co.) Variable Rate, 3.87%, 1/1/08 | $ | 1,100,000 | |||||||
Iowa - 8.5% | |||||||||||
5,250,000 | Buffalo, Iowa, Pollution Control Revenue (LaFarge Corp.), Series B Variable Rate, 4.05%, 10/1/10 | 5,250,000 | |||||||||
1,275,000 | Iowa Finance Authority Small Business Development Revenue, (Terrace Center Association) Variable Rate, 3.95%, 3/1/22 | 1,275,000 | |||||||||
6,525,000 | |||||||||||
Kansas - 1.6% | |||||||||||
1,200,000 | Salina, Kansas, Revenue, (Salina Central Mall - Dillards) Variable Rate, 4.00%, 12/1/14 | 1,200,000 | |||||||||
Minnesota - 3.5% | |||||||||||
1,170,000 | St. Paul, Minnesota, Housing and Redevelopment Authority Revenue (Goodwill/Easter Seals) Variable Rate, 3.95%, 8/1/25 | 1,170,000 | |||||||||
1,500,000 | Stillwater, Minnesota, Private School Facilities Revenue, (Catholic Finance | ||||||||||
Corporation Project) | |||||||||||
Variable Rate, 3.95%, 12/1/22 | 1,500,000 | ||||||||||
2,670,000 | |||||||||||
Nebraska - 2.5% | |||||||||||
1,900,000 | Norfolk, Nebraska, Industrial Development Revenue, (Supervalu, Inc.) | ||||||||||
Variable Rate, 3.92%, 11/1/14 | 1,900,000 | ||||||||||
Nevada - 2.5% | |||||||||||
1,900,000 | Clark County, Nevada, Economic Development Revenue, (Lutheran Secondary School Association) Variable Rate, 4.00%, 2/1/30 | 1,900,000 | |||||||||
Oklahoma - 1.0% | |||||||||||
800,000 | Oklahoma City, Oklahoma, Industrial and Cultural Facilities Trust Revenue (Oklahoma Christian College) Variable Rate, 3.98%, 7/1/15 | 800,000 | |||||||||
Pennsylvania - 2.5% | |||||||||||
1,900,000 | Washington County, Pennsylvania Hospital Authority Revenue Variable Rate, 2.80%, 7/1/31 | 1,900,000 | |||||||||
Texas - 10.8% | |||||||||||
4,675,000 | Alamo Heights, Texas, Higher Education Facilities Corp. Revenue, (University of the Incarnate Word) Variable Rate, 3.90%, 4/1/19 | 4,675,000 | |||||||||
3,615,000 | State of Texas, (Tax and Revenue Anticipation Notes), 4.50%, 8/31/06 | 3,630,274 | |||||||||
8,305,274 | |||||||||||
Total Investments (total cost $75,971,971) – 99.1% | 75,971,971 | ||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.9% | 703,602 | ||||||||||
Net Assets – 100% | $ | 76,675,573 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2006 43
Statements of Assets and Liabilities – Bond Funds
As of April 30, 2006 (unaudited) (all numbers in thousands except net asset value per share) | Janus Federal Tax-Exempt Fund | Janus Flexible Bond Fund | Janus High-Yield Fund | Janus Short-Term Bond Fund | |||||||||||||||
Assets: | |||||||||||||||||||
Investments at cost(1) | $ | 102,805 | $ | 975,498 | $ | 464,928 | $ | 220,449 | |||||||||||
Investments at value(1) | $ | 101,843 | $ | 954,069 | $ | 468,318 | $ | 218,908 | |||||||||||
Cash | 18 | 411 | 830 | 318 | |||||||||||||||
Receivables: | |||||||||||||||||||
Investments sold | – | 7,364 | 8,391 | 3,785 | |||||||||||||||
Fund shares sold | 17 | 599 | 471 | 151 | |||||||||||||||
Dividends | – | – | 2 | – | |||||||||||||||
Interest | 1,510 | 8,373 | 9,942 | 1,876 | |||||||||||||||
Due from adviser | 47 | – | – | – | |||||||||||||||
Other assets | 2 | 9 | 7 | 2 | |||||||||||||||
Total Assets | 103,437 | 970,825 | 487,961 | 225,040 | |||||||||||||||
Liabilities: | |||||||||||||||||||
Payables: | |||||||||||||||||||
Collateral for securities loaned (Note 1) | – | 147,008 | 952 | 44,873 | |||||||||||||||
Investments purchased | 523 | 8,447 | 10,738 | 3,853 | |||||||||||||||
Fund shares repurchased | 126 | 1,236 | 570 | 223 | |||||||||||||||
Dividends and distributions | 47 | 248 | 279 | 15 | |||||||||||||||
Advisory fees | 43 | 351 | 231 | 21 | |||||||||||||||
Transfer agent fees and expenses | 23 | 179 | 103 | 45 | |||||||||||||||
Non-interested Trustees' fees and expenses | 4 | 4 | 4 | 4 | |||||||||||||||
Accrued expenses | 30 | 187 | 104 | 49 | |||||||||||||||
Forward currency contracts | – | 40 | – | – | |||||||||||||||
Total Liabilities | 796 | 157,700 | 12,981 | 49,083 | |||||||||||||||
Net Assets | $ | 102,641 | $ | 813,125 | $ | 474,980 | $ | 175,957 | |||||||||||
Net Assets Consist of: | |||||||||||||||||||
Capital (par value and paid-in-surplus)* | $ | 106,472 | $ | 848,219 | $ | 497,540 | $ | 180,025 | |||||||||||
Undistributed net investment income/(loss)* | – | 513 | 109 | 46 | |||||||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | (2,869 | ) | (14,139 | ) | (26,058 | ) | (2,574 | ) | |||||||||||
Unrealized appreciation/(depreciation) of investments and foreign currency translations | (962 | ) | (21,468 | ) | 3,389 | (1,540 | ) | ||||||||||||
Total Net Assets | $ | 102,641 | $ | 813,125 | $ | 474,980 | $ | 175,957 | |||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 14,844 | 87,839 | 49,239 | 61,386 | |||||||||||||||
Net Asset Value Per Share | $ | 6.91 | $ | 9.26 | $ | 9.65 | $ | 2.87 |
*See Note 4 in Notes to Financial Statements.
(1) Investments at cost and value include $144,078,547, $933,173 and $43,976,837 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.
44 Janus Bond & Money Market Funds April 30, 2006
Statements of Operations - Bond Funds
For the six-month period ended April 30, 2006 (unaudited) (all numbers in thousands) | Janus Federal Tax-Exempt Fund | Janus Flexible Bond Fund | Janus High-Yield Fund | Janus Short-Term Bond Fund | |||||||||||||||
Investment Income: | |||||||||||||||||||
Interest | $ | 2,421 | $ | 21,480 | $ | 19,905 | $ | 3,688 | |||||||||||
Securities lending income | – | 160 | 2 | 26 | |||||||||||||||
Dividends | – | 288 | 135 | – | |||||||||||||||
Total Investment Income | 2,421 | 21,928 | 20,042 | 3,714 | |||||||||||||||
Expenses: | |||||||||||||||||||
Advisory fees | 269 | 2,246 | 1,504 | 595 | |||||||||||||||
Transfer agent fees and expenses | 127 | 1,001 | 567 | 244 | |||||||||||||||
Registration fees | 23 | 17 | 33 | 11 | |||||||||||||||
Postage and mailing expenses | 6 | 35 | 22 | 5 | |||||||||||||||
Custodian fees | 2 | 32 | 11 | 7 | |||||||||||||||
Professional fees | 11 | 18 | 13 | 11 | |||||||||||||||
Non-interested Trustees' fees and expenses | 11 | 22 | 18 | 12 | |||||||||||||||
Printing expenses | 11 | 56 | 33 | 16 | |||||||||||||||
Proxy expenses | 16 | 133 | 68 | 31 | |||||||||||||||
Legal expenses | 19 | 19 | 19 | 19 | |||||||||||||||
Other expenses | 22 | 27 | 21 | 16 | |||||||||||||||
Non-recurring Costs (Note 2) | – | – | – | – | |||||||||||||||
Cost assumed by Janus Capital Management LLC (Note 2) | – | – | – | – | |||||||||||||||
Total Expenses | 517 | 3,606 | 2,309 | 967 | |||||||||||||||
Expense and Fee Offset | (6 | ) | (47 | ) | (31 | ) | (13 | ) | |||||||||||
Net Expenses | 511 | 3,559 | 2,278 | 954 | |||||||||||||||
Less: Excess Expense Reimbursement | (215 | ) | – | (60 | ) | (359 | ) | ||||||||||||
Net Expenses after Expense Reimbursement | 296 | 3,559 | 2,218 | 595 | |||||||||||||||
Net Investment Income/(Loss) | 2,125 | 18,369 | 17,824 | 3,119 | |||||||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | |||||||||||||||||||
Net realized gain/(loss) from securities transactions | (742 | ) | (5,553 | ) | 560 | (1,577 | ) | ||||||||||||
Net realized gain/(loss) from foreign currency transactions | – | 303 | – | – | |||||||||||||||
Net realized gain/(loss) from futures contracts | – | 85 | – | – | |||||||||||||||
Change in net unrealized appreciation or depreciation of investments and foreign currency | 458 | (7,209 | ) | 8,070 | 1,341 | ||||||||||||||
Payment from affiliate (Note 2) | – | 2 | 1 | 1 | |||||||||||||||
Net Gain/(Loss) on Investments | (284 | ) | (12,372 | ) | 8,631 | (235 | ) | ||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 1,841 | $ | 5,997 | $ | 26,455 | $ | 2,884 |
See Notes to Financial Statements.
Janus Bond & Money Market Funds April 30, 2006 45
Statements of Changes in Net Assets - Bond Funds
For the six-month period ended April 30, 2006 (unaudited) and the fiscal year ended October 31, 2005 | Janus Federal Tax-Exempt Fund | Janus Flexible Bond Fund | Janus High-Yield Fund | Janus Short-Term Bond Fund | |||||||||||||||||||||||||||||||
(all numbers in thousands) | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||||||||||
Operations: | |||||||||||||||||||||||||||||||||||
Net investment income/(loss) | $ | 2,125 | $ | 4,439 | $ | 18,369 | $ | 41,640 | $ | 17,824 | $ | 36,483 | $ | 3,119 | $ | 6,431 | |||||||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | (742 | ) | 2,287 | (5,250 | ) | 1,787 | 560 | 8,754 | (1,577 | ) | (579 | ) | |||||||||||||||||||||||
Net realized gain/(loss) from futures contracts | – | – | 85 | 498 | – | – | – | (113 | ) | ||||||||||||||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments and foreign currency translations | 458 | (5,372 | ) | (7,209 | ) | (37,345 | ) | 8,070 | (30,791 | ) | 1,341 | (4,278 | ) | ||||||||||||||||||||||
Payment from affiliate (Note 2) | – | – | 2 | 3 | 1 | – | 1 | 3 | |||||||||||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 1,841 | 1,354 | 5,997 | 6,583 | 26,455 | 14,446 | 2,884 | 1,464 | |||||||||||||||||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||||||||||||||||||
Net investment income* | (2,125 | ) | ( 4,439) | (19,745 | ) | (44,124 | ) | (17,824 | ) | (36,483 | ) | (3,098 | ) | (6,425 | ) | ||||||||||||||||||||
Net realized gain/(loss) from investment transactions* | – | – | – | – | – | – | – | (744 | ) | ||||||||||||||||||||||||||
Net Increase/(Decrease) from Dividends and Distributions | (2,125 | ) | (4,439 | ) | (19,745 | ) | (44,124 | ) | (17,824 | ) | (36,483 | ) | (3,098 | ) | (7,169 | ) | |||||||||||||||||||
Capital Share Transactions: | |||||||||||||||||||||||||||||||||||
Shares sold | 4,995 | 14,125 | 50,659 | 113,495 | 43,928 | 167,717 | 15,241 | 39,948 | |||||||||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | N/A | 33 | 110 | N/A | N/A | |||||||||||||||||||||||||||
Reinvested dividends and distributions | 1,813 | 3,858 | 17,954 | 40,301 | 15,930 | 32,817 | 2,976 | 6,871 | |||||||||||||||||||||||||||
Shares repurchased | (15,827 | ) | (35,221 | ) | (176,908 | ) | (341,008 | ) | (116,725 | ) | (213,260 | ) | (43,539 | ) | (110,382 | ) | |||||||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | (9,019 | ) | (17,238 | ) | (108,295 | ) | (187,212 | ) | (56,834 | ) | (12,616 | ) | (25,322 | ) | (63,563 | ) | |||||||||||||||||||
Net Increase/(Decrease) in Net Assets | (9,303 | ) | (20,323 | ) | (122,043 | ) | (224,753 | ) | (48,203 | ) | (34,653 | ) | (25,536 | ) | (69,268 | ) | |||||||||||||||||||
Net Assets: | |||||||||||||||||||||||||||||||||||
Beginning of Period | 111,944 | 132,267 | 935,168 | 1,159,921 | 523,183 | 557,836 | 201,493 | 270,761 | |||||||||||||||||||||||||||
End of Period | $ | 102,641 | $ | 111,944 | $ | 813,125 | $ | 935,168 | $ | 474,980 | $ | 523,183 | $ | 175,957 | $ | 201,493 | |||||||||||||||||||
Undistributed Net Investment Income/(Loss)* | $ | – | $ | – | $ | 513 | $ | 1,889 | $ | 109 | $ | 109 | $ | 46 | $ | 24 |
*See Note 4 in Notes to Financial Statements.
See Notes to Financial Statements.
46 Janus Bond & Money Market Funds April 30, 2006
Financial Highlights - Bond Funds
Janus Federal Tax-Exempt Fund | |||||||||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 6.94 | $ | 7.12 | $ | 7.07 | $ | 7.05 | $ | 7.01 | $ | 6.74 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .14 | .26 | .23 | .26 | .27 | .31 | |||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | (.03 | ) | (.18 | ) | .05 | .02 | .04 | .27 | |||||||||||||||||||
Total from Investment Operations | .11 | .08 | .28 | .28 | .31 | .58 | |||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.14 | ) | (.26 | ) | (.23 | ) | (.26 | ) | (.27 | ) | (.31 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | |||||||||||||||||||||
Payment from affiliate | – | – | (1) | – | – | – | – | ||||||||||||||||||||
Total Distributions and Other | (.14 | ) | (.26 | ) | (.23 | ) | (.26 | ) | (.27 | ) | (.31 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 6.91 | $ | 6.94 | $ | 7.12 | $ | 7.07 | $ | 7.05 | $ | 7.01 | |||||||||||||||
Total Return** | 1.54 | % | 1.12 | %(2) | 4.07 | % | 3.97 | % | 4.56 | % | 8.80 | % | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 102,641 | $ | 111,944 | $ | 132,267 | $ | 183,669 | $ | 230,077 | $ | 128,951 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 108,548 | $ | 121,027 | $ | 151,433 | $ | 228,760 | $ | 148,070 | $ | 105,066 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.56 | %(5) | 0.56 | %(5) | 0.62 | %(5) | 0.65 | %(5) | 0.66 | %(5) | 0.68 | %(5) | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.55 | % | 0.55 | % | 0.62 | % | 0.65 | % | 0.65 | % | 0.65 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.95 | % | 3.67 | % | 3.30 | % | 3.58 | % | 3.83 | % | 4.50 | % | |||||||||||||||
Portfolio Turnover Rate*** | 99 | % | 149 | % | 52 | % | 39 | % | 58 | % | 60 | % | |||||||||||||||
Janus Flexible Bond Fund | |||||||||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 9.41 | $ | 9.76 | $ | 9.74 | $ | 9.51 | $ | 9.49 | $ | 8.99 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .20 | .40 | .46 | .46 | .49 | .58 | |||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | (.14 | ) | (.34 | ) | .01 | .21 | .02 | .50 | |||||||||||||||||||
Total from Investment Operations | .06 | .06 | .47 | .67 | .51 | 1.08 | |||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.21 | ) | (.41 | ) | (.45 | ) | (.44 | ) | (.49 | ) | (.58 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | |||||||||||||||||||||
Payment from affiliate | – | (1) | – | (1) | – | (1) | – | – | – | ||||||||||||||||||
Total Distributions and Other | (.21 | ) | (.41 | ) | (.45 | ) | (.44 | ) | (.49 | ) | (.58 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 9.26 | $ | 9.41 | $ | 9.76 | $ | 9.74 | $ | 9.51 | $ | 9.49 | |||||||||||||||
Total Return** | 0.64 | %(2) | 0.60 | %(2) | 4.97 | %(2) | 7.12 | % | 5.63 | % | 12.41 | % | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 813,125 | $ | 935,168 | $ | 1,159,921 | $ | 1,533,940 | $ | 1,585,108 | $ | 1,326,110 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 881,230 | $ | 1,037,336 | $ | 1,288,903 | $ | 1,731,995 | $ | 1,347,054 | $ | 1,147,222 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.83 | % | 0.78 | % | 0.85 | % | 0.83 | % | 0.81 | % | 0.79 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.81 | % | 0.77 | % | 0.85 | % | 0.83 | % | 0.81 | % | 0.77 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.20 | % | 4.01 | % | 4.27 | % | 4.47 | % | 5.24 | % | 6.33 | % | |||||||||||||||
Portfolio Turnover Rate*** | 120 | %(6) | 174 | %(6) | 149 | % | 163 | % | 243 | % | 284 | % |
*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 Capital 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%.
(5) The ratio was 0.96% in 2006, 0.87% in 2005, 0.99% in 2004, 0.90% in 2003, 0.92% in 2002 and 1.05% in 2001 before waiver of certain fees incurred by the Fund.
(6) Excluding mortgage dollar roll transactions. If mortgage dollar roll transactions had been included, the portfolio turnover rate would have been 123% in 2006 and 180% in 2005.
See Notes to Financial Statements.
Janus Bond & Money Market Funds April 30, 2006 47
Financial Highlights - Bond Funds (continued)
Janus High-Yield Fund | |||||||||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001(1) | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 9.48 | $ | 9.86 | $ | 9.55 | $ | 8.82 | $ | 9.28 | $ | 9.84 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .34 | .65 | .67 | .64 | .65 | .78 | |||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | .17 | (.38 | ) | .31 | .72 | (.46 | ) | (.57 | ) | ||||||||||||||||||
Total from Investment Operations | .51 | .27 | .98 | 1.36 | .19 | .21 | |||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.34 | ) | (.65 | ) | (.67 | ) | (.64 | ) | (.65 | ) | (.78 | )(2) | |||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | |||||||||||||||||||||
Redemption fees | – | (3) | – | (3) | – | (3) | .01 | – | (3) | .01 | |||||||||||||||||
Payment from affiliate | – | (4) | – | (4) | – | – | – | – | |||||||||||||||||||
Total Distributions and Other | (.34 | ) | (.65 | ) | (.67 | ) | (.63 | ) | (.65 | ) | (.77 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 9.65 | $ | 9.48 | $ | 9.86 | $ | 9.55 | $ | 8.82 | $ | 9.28 | |||||||||||||||
Total Return** | 5.50 | %(5) | 2.76 | %(5) | 10.62 | % | 16.00 | % | 1.97 | % | 2.23 | % | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 474,980 | $ | 523,183 | $ | 557,836 | $ | 768,033 | $ | 573,388 | $ | 409,366 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 496,968 | $ | 548,993 | $ | 582,992 | $ | 842,175 | $ | 490,524 | $ | 382,153 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(6)(7) | 0.91 | %(8) | 0.88 | % | 0.96 | % | 0.95 | % | 0.96 | % | 1.03 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(6) | 0.90 | % | 0.87 | % | 0.96 | % | 0.95 | % | 0.96 | % | 0.99 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 7.23 | % | 6.65 | % | 6.96 | % | 6.90 | % | 7.02 | % | 8.04 | % | |||||||||||||||
Portfolio Turnover Rate*** | 124 | % | 102 | % | 133 | % | 203 | % | 161 | % | 358 | % | |||||||||||||||
Janus Short-Term Bond Fund | |||||||||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 2.87 | $ | 2.94 | $ | 2.97 | $ | 2.93 | $ | 2.97 | $ | 2.86 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .05 | .08 | .08 | .08 | .10 | .14 | |||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | – | (.06 | ) | .01 | .04 | (.04 | ) | .11 | |||||||||||||||||||
Total from Investment Operations | .05 | .02 | .09 | .12 | .06 | .25 | |||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.05 | ) | (.08 | ) | (.08 | ) | (.08 | ) | (.10 | )(2) | (.14 | ) | |||||||||||||||
Distributions (from capital gains)* | – | (.01 | ) | (.04 | ) | – | – | – | |||||||||||||||||||
Payment from affiliate | – | (4) | – | (4) | – | – | – | – | |||||||||||||||||||
Total Distributions and Other | (.05 | ) | (.09 | ) | (.12 | ) | (.08 | ) | (.10 | ) | (.14 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 2.87 | $ | 2.87 | $ | 2.94 | $ | 2.97 | $ | 2.93 | $ | 2.97 | |||||||||||||||
Total Return** | 1.67 | %(5) | 0.65 | %(5) | 2.94 | % | 4.12 | % | 2.22 | % | 9.50 | % | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 175,957 | $ | 201,493 | $ | 270,761 | $ | 366,037 | $ | 492,557 | $ | 523,600 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 187,558 | $ | 233,536 | $ | 299,461 | $ | 456,695 | $ | 499,807 | $ | 284,977 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(6)(7) | 0.65 | %(9) | 0.65 | %(9) | 0.65 | %(9) | 0.65 | %(9) | 0.65 | %(9) | 0.66 | %(9) | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(6) | 0.64 | % | 0.64 | % | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.35 | % | 2.75 | % | 2.64 | % | 2.68 | % | 3.55 | % | 4.70 | % | |||||||||||||||
Portfolio Turnover Rate*** | 142 | % | 97 | % | 110 | % | 238 | % | 164 | % | 201 | % |
*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) Certain prior year amounts have been reclassified to conform with current year presentation.
(2) Dividends (from net investment income) includes tax return of capital, less than $0.01 per share.
(3) Redemption fees aggregated less than $.01 on a per share basis for the fiscal year or period ended.
(4) Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year or period ended.
(5) 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%.
(6) See "Explanations of Charts, Tables and Financial Statements."
(7) 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%.
(8) The ratio was 0.94% in 2006 before waiver of certain fees incurred by the fund.
(9) The ratio was 1.04% in 2006, 0.97% in 2005, 1.00% in 2004, 0.91% in 2003, 0.88% in 2002 and 0.98% in 2001 before waiver of certain fees incurred by the Fund.
See Notes to Financial Statements.
48 Janus Bond & Money Market Funds April 30, 2006
Statements of Assets and Liabilities - Money Market Funds
As of April 30, 2006 (unaudited) (all numbers in thousands except net asset value per share) | Janus Money Market Fund | Janus Government Money Market Fund | Janus Tax-Exempt Money Market Fund | ||||||||||||
Assets: | |||||||||||||||
Investments at amortized cost | $ | 4,289,076 | $ | 224,119 | $ | 75,972 | |||||||||
Repurchase agreements | 1,341,600 | 718,100 | – | ||||||||||||
Cash | 193 | 56 | 91 | ||||||||||||
Receivables: | |||||||||||||||
Fund shares sold | 4,257 | 142 | 372 | ||||||||||||
Interest | 18,906 | 1,035 | 442 | ||||||||||||
Total Assets | 5,654,032 | 943,452 | 76,877 | ||||||||||||
Liabilities: | |||||||||||||||
Payables: | |||||||||||||||
Fund shares repurchased | 3,854 | 246 | 152 | ||||||||||||
Dividends and distributions | 10,513 | 1,440 | 5 | ||||||||||||
Advisory fees | 461 | 79 | 7 | ||||||||||||
Administrative services fees – Investor Shares | 537 | 70 | 31 | ||||||||||||
Administrative services fees – Institutional Shares | 281 | 27 | – | ||||||||||||
Administrative services fees – Service Shares | 2 | 6 | – | ||||||||||||
Service fees – Service Shares | 6 | 29 | – | ||||||||||||
Professional fees | 10 | 6 | 2 | ||||||||||||
Non-interested Trustees' fees and expenses | – | 2 | 4 | ||||||||||||
Total Liabilities | 15,664 | 1,905 | 201 | ||||||||||||
Net Assets | $ | 5,638,368 | $ | 941,547 | $ | 76,676 | |||||||||
Net Assets Consist of: | |||||||||||||||
Capital (par value and paid-in-surplus)* | $ | 5,638,368 | $ | 941,547 | $ | 76,695 | |||||||||
Undistributed net realized gain/(loss) from investments* | – | – | (19 | ) | |||||||||||
Total Net Assets | $ | 5,638,368 | $ | 941,547 | $ | 76,676 | |||||||||
Net Assets – Investor Shares | $ | 1,305,586 | $ | 171,565 | $ | 74,016 | |||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,305,586 | 171,565 | 74,031 | ||||||||||||
Net Asset Value Per Share | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||
Net Assets – Institutional Shares | $ | 4,308,458 | $ | 634,732 | $ | 2,650 | |||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 4,308,458 | 634,735 | 2,654 | ||||||||||||
Net Asset Value Per Share | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||
Net Assets – Service Shares | $ | 24,324 | $ | 135,250 | $ | 10 | |||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 24,324 | 135,247 | 10 | ||||||||||||
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 & Money Market Funds April 30, 2006 49
Statements of Operations - Money Market Funds
For the six-month period ended April 30, 2006 (unaudited) (all numbers in thousands) | Janus Money Market Fund | Janus Government Money Market Fund | Janus Tax-Exempt Money Market Fund | ||||||||||||
Investment Income: | |||||||||||||||
Interest | $ | 122,112 | $ | 18,727 | $ | 1,323 | |||||||||
Total Investment Income | 122,112 | 18,727 | 1,323 | ||||||||||||
Expenses: | |||||||||||||||
Advisory fees | 5,416 | 844 | 83 | ||||||||||||
Professional fees | 17 | 10 | 9 | ||||||||||||
Non-interested Trustees' fees and expenses | 91 | 22 | 11 | ||||||||||||
Administrative services fees - Investor Shares | 3,283 | 439 | 198 | ||||||||||||
Administrative services fees - Institutional Shares | 3,057 | 398 | 2 | ||||||||||||
Administrative services fees - Service Shares | 20 | 103 | – | ||||||||||||
Service fees – Service Shares | 33 | 172 | – | ||||||||||||
Non-recurring costs (Note 2) | – | – | – | ||||||||||||
Costs assumed by Janus Capital Management LLC (Note 2) | – | – | – | ||||||||||||
Total Expenses | 11,917 | 1,988 | 303 | ||||||||||||
Less: Excess Expense Reimbursement | (4,144 | ) | (756 | ) | (42 | ) | |||||||||
Net Expenses after Expense Reimbursement | 7,773 | 1,232 | 261 | ||||||||||||
Net Investment Income/(Loss) | 114,339 | 17,495 | 1,062 | ||||||||||||
Net Realized Gain/(Loss) on Investments: | |||||||||||||||
Net realized gain/(loss) from securities transactions | – | – | (8 | ) | |||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 114,339 | $ | 17,495 | $ | 1,054 |
See Notes to Financial Statements.
50 Janus Bond & Money Market Funds April 30, 2006
Statements of Changes in Net Assets - Money Market Funds
For the six-month period ended April 30, 2006 (unaudited) and the fiscal year ended October 31, 2005 | Janus Money Market Fund | Janus Government Money Market Fund | Janus Tax-Exempt Money Market Fund | ||||||||||||||||||||||||
(all numbers in thousands) | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||||
Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | $ | 114,339 | $ | 167,870 | $ | 17,495 | $ | 22,819 | $ | 1,062 | $ | 2,393 | |||||||||||||||
Net realized gain/(loss) from investment transactions | – | 4 | – | 2 | (8 | ) | (12 | ) | |||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 114,339 | 167,874 | 17,495 | 22,821 | 1,054 | 2,381 | |||||||||||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||||||||||
Net investment income* | |||||||||||||||||||||||||||
Investor Shares | (25,590 | ) | (34,195 | ) | (3,350 | ) | (4,541 | ) | (1,011 | ) | (1,541 | ) | |||||||||||||||
Institutional Shares | (88,217 | ) | (133,086 | ) | (11,376 | ) | (14,793 | ) | (51 | ) | (850 | ) | |||||||||||||||
Service Shares | (532 | ) | (589 | ) | (2,769 | ) | (3,485 | ) | – | (2 | ) | ||||||||||||||||
Net realized gain from investment transactions* | |||||||||||||||||||||||||||
Investor Shares | – | (1 | ) | – | (1 | ) | – | – | |||||||||||||||||||
Institutional Shares | – | (3 | ) | – | (1 | ) | – | – | |||||||||||||||||||
Service Shares | – | – | – | – | – | – | |||||||||||||||||||||
Net Decrease from Dividends and Distributions | (114,339 | ) | (167,874 | ) | (17,495 | ) | (22,821 | ) | (1,062 | ) | (2,393 | ) | |||||||||||||||
Capital Share Transactions: | |||||||||||||||||||||||||||
Shares sold | |||||||||||||||||||||||||||
Investor Shares | 418,485 | 816,551 | 28,715 | 72,199 | 20,900 | 47,929 | |||||||||||||||||||||
Institutional Shares | 15,355,633 | 31,608,314 | 2,495,941 | 5,039,102 | 13,980 | 61,356 | |||||||||||||||||||||
Service Shares | 32,061 | 67,543 | 392,828 | 725,906 | – | 10 | |||||||||||||||||||||
Reinvested dividends and distributions | |||||||||||||||||||||||||||
Investor Shares | 25,070 | 33,426 | 3,292 | 4,447 | 981 | 1,503 | |||||||||||||||||||||
Institutional Shares | 28,272 | 55,423 | 3,872 | 4,379 | 41 | 820 | |||||||||||||||||||||
Service Shares | 185 | 260 | 902 | 1,037 | – | 3 | |||||||||||||||||||||
Shares repurchased | |||||||||||||||||||||||||||
Investor Shares | (498,966 | ) | (1,077,784 | ) | (46,803 | ) | (114,369 | ) | (33,658 | ) | (71,010 | ) | |||||||||||||||
Institutional Shares | (14,713,465 | ) | (36,149,295 | ) | (2,382,728 | ) | (4,910,599 | ) | (13,370 | ) | (109,557 | ) | |||||||||||||||
Service Shares | (34,771 | ) | (66,684 | ) | (387,566 | ) | (740,717 | ) | – | (401 | ) | ||||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | 612,504 | (4,712,246 | ) | 108,453 | 81,385 | (11,126 | ) | (69,347 | ) | ||||||||||||||||||
Net Increase/(Decrease) in Net Assets | 612,504 | (4,712,246 | ) | 108,453 | 81,385 | (11,134 | ) | (69,359 | ) | ||||||||||||||||||
Net Assets: | |||||||||||||||||||||||||||
Beginning of period | 5,025,864 | 9,738,110 | 833,094 | 751,709 | 87,810 | 157,169 | |||||||||||||||||||||
End of period | $ | 5,638,368 | $ | 5,025,864 | $ | 941,547 | $ | 833,094 | $ | 76,676 | $ | 87,810 |
*See Note 4 in Notes to Financial Statements.
See Notes to Financial Statements.
Janus Bond & Money Market Funds April 30, 2006 51
Financial Highlights - Money Market Funds
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | Janus Money Market Fund | ||||||||||||||||||||||||||
Investor Shares | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
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 | .02 | .01 | .01 | .02 | .04 | |||||||||||||||||||||
Net gains/(losses) on securities | – | – | (1) | – | (1) | – | (1) | – | (1) | – | (1) | ||||||||||||||||
Total from Investment Operations | .02 | .02 | .01 | .01 | .02 | .04 | |||||||||||||||||||||
Less Distributions: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.02 | ) | (.02 | ) | (.01 | ) | (.01 | ) | (.02 | ) | (.04 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | (1) | – | (1) | – | (1) | – | (1) | – | (1) | ||||||||||||||||
Total Distributions | (.02 | ) | (.02 | ) | (.01 | ) | (.01 | ) | (.02 | ) | (.04 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total Return** | 1.95 | % | 2.41 | % | 0.75 | % | 0.79 | % | 1.53 | % | 4.52 | % | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 1,305,586 | $ | 1,360,997 | $ | 1,588,804 | $ | 2,197,167 | $ | 3,041,637 | $ | 3,614,097 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 1,324,077 | $ | 1,449,569 | $ | 1,790,472 | $ | 2,658,402 | $ | 3,180,307 | $ | 3,629,621 | |||||||||||||||
Ratio of Expenses to Average Net Assets***(2)(3) | 0.60 | %(4) | 0.60 | %(4) | 0.60 | %(4) | 0.60 | %(4) | 0.60 | %(4) | 0.60 | %(4) | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.90 | % | 2.36 | % | 0.74 | % | 0.80 | % | 1.53 | % | 4.43 | % | |||||||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | Janus Government Money Market Fund | ||||||||||||||||||||||||||
Investor Shares | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
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 | .02 | .01 | .01 | .01 | .04 | |||||||||||||||||||||
Net gains/(losses) on securities | – | – | (1) | – | (1) | – | – | (1) | – | (1) | |||||||||||||||||
Total from Investment Operations | .02 | .02 | .01 | .01 | .01 | .04 | |||||||||||||||||||||
Less Distributions: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.02 | ) | (.02 | ) | (.01 | ) | (.01 | ) | (.01 | ) | (.04 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | (1) | – | (1) | – | – | (1) | – | (1) | |||||||||||||||||
Total Distributions | (.02 | ) | (.02 | ) | (.01 | ) | (.01 | ) | (.01 | ) | (.04 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total Return** | 1.91 | % | 2.34 | % | 0.68 | % | 0.72 | % | 1.49 | % | 4.47 | % | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 171,565 | $ | 186,361 | $ | 224,084 | $ | 313,691 | $ | 447,313 | $ | 471,335 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 177,007 | $ | 198,231 | $ | 253,183 | $ | 388,077 | $ | 431,132 | $ | 402,844 | |||||||||||||||
Ratio of Expenses to Average Net Assets***(2)(3) | 0.61 | %(5) | 0.61 | %(5) | 0.60 | %(5) | 0.60 | %(5) | 0.60 | %(5) | 0.60 | %(5) | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.82 | % | 2.29 | % | 0.66 | % | 0.73 | % | 1.48 | % | 4.25 | % |
*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) Net gains/(losses) on securities and/or distributions (from capital gains) aggregated less than $.01 on a per share basis for the fiscal year ended.
(2) See "Explanations of Charts, Tables and Financial Statements."
(3) 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%.
(4) The ratio was 0.70% in 2006, 0.70% in 2005, 0.70% in 2004, 0.70% in 2003, 0.70% in 2002 and 0.70% in 2001 before waiver of certain fees incurred by the Fund.
(5) The ratio was 0.71% in 2006, 0.71% in 2005, 0.70% in 2004, 0.70% in 2003, 0.70% in 2002 and 0.70% in 2001 before waiver of certain fees incurred by the Fund.
See Notes to Financial Statements.
52 Janus Bond & Money Market Funds April 30, 2006
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | Janus Tax-Exempt Money Market Fund | ||||||||||||||||||||||||||
Investor Shares | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
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 | .02 | .01 | .01 | .01 | .03 | |||||||||||||||||||||
Net gains/(losses) on securities | – | (1) | – | (1) | – | (1) | – | (1) | – | – | |||||||||||||||||
Total from Investment Operations | .01 | .02 | .01 | .01 | .01 | .03 | |||||||||||||||||||||
Less Distributions: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.01 | ) | (.02 | ) | (.01 | ) | (.01 | ) | (.01 | ) | (.03 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | – | (1) | – | (1) | – | – | |||||||||||||||||||
Total Distributions | (.01 | ) | (.02 | ) | (.01 | ) | (.01 | ) | (.01 | ) | (.03 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total Return** | 1.27 | % | 1.63 | % | 0.59 | % | 0.64 | % | 1.09 | % | 2.84 | % | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 74,016 | $ | 85,799 | $ | 107,386 | $ | 140,087 | $ | 187,272 | $ | 205,510 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 79,979 | $ | 96,230 | $ | 120,544 | $ | 173,152 | $ | 192,498 | $ | 190,597 | |||||||||||||||
Ratio of Expenses to Average Net Assets***(2)(3) | 0.65 | %(4) | 0.62 | %(4) | 0.61 | %(4) | 0.60 | %(4) | 0.60 | %(4) | 0.61 | %(4) | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.55 | % | 1.60 | % | 0.59 | % | 0.65 | % | 1.08 | % | 2.79 | % | |||||||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | Janus Money Market Fund | ||||||||||||||||||||||||||
Institutional Shares | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
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 | .03 | .01 | .01 | .02 | .05 | |||||||||||||||||||||
Net gains/(losses) on securities | – | – | (1) | – | (1) | – | (1) | – | (1) | – | (1) | ||||||||||||||||
Total from Investment Operations | .02 | .03 | .01 | .01 | .02 | .05 | |||||||||||||||||||||
Less Distributions: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.02 | ) | (.03 | ) | (.01 | ) | (.01 | ) | (.02 | ) | (.05 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | (1) | – | (1) | – | (1) | – | (1) | – | (1) | ||||||||||||||||
Total Distributions | (.02 | ) | (.03 | ) | (.01 | ) | (.01 | ) | (.02 | ) | (.05 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total Return** | 2.16 | % | 2.84 | % | 1.17 | % | 1.22 | % | 1.96 | % | 4.96 | % | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 4,308,458 | $ | 3,638,018 | $ | 8,123,575 | $ | 9,141,167 | $ | 10,541,200 | $ | 13,268,612 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 4,110,371 | $ | 5,028,377 | $ | 7,453,480 | $ | 10,403,767 | $ | 12,632,647 | $ | 10,427,053 | |||||||||||||||
Ratio of Expenses to Average Net Assets***(2)(3) | 0.18 | %(5) | 0.18 | %(5) | 0.18 | %(5) | 0.18 | %(5) | 0.18 | %(5) | 0.18 | %(5) | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.33 | % | 2.65 | % | 1.17 | % | 1.21 | % | 1.95 | % | 4.70 | % |
*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) Net gains/(losses) on securities and/or distributions (from capital gains) aggregated less than $.01 on a per share basis for the fiscal year or period ended.
(2) See "Explanations of Charts, Tables and Financial Statements."
(3) 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%.
(4) The ratio was 0.75% in 2006, 0.72% in 2005, 0.71% in 2004, 0.70% in 2003, 0.70% in 2002 and 0.71% in 2001 before waiver of certain fees incurred by the Fund.
(5) The ratio was 0.35% in 2006, 0.35% in 2005, 0.35% in 2004, 0.35% in 2003, 0.35% in 2002 and 0.35% in 2001 before waiver of certain fees incurred by the Fund.
See Notes to Financial Statements.
Janus Bond & Money Market Funds April 30, 2006 53
Financial Highlights - Money Market Funds (continued)
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | Janus Government Money Market Fund | ||||||||||||||||||||||||||
Institutional Shares | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
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 | .03 | .01 | .01 | .02 | .05 | |||||||||||||||||||||
Net gains/(losses) on securities | – | – | (1) | – | (1) | – | – | (1) | – | (1) | |||||||||||||||||
Total from Investment Operations | .02 | .03 | .01 | .01 | .02 | .05 | |||||||||||||||||||||
Less Distributions: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.02 | ) | (.03 | ) | (.01 | ) | (.01 | ) | (.02 | ) | (.05 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | (1) | – | (1) | – | – | (1) | – | (1) | |||||||||||||||||
Total Distributions | (.02 | ) | (.03 | ) | (.01 | ) | (.01 | ) | (.02 | ) | (.05 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total Return** | 2.14 | % | 2.81 | % | 1.13 | % | 1.18 | % | 1.95 | % | 4.93 | % | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 634,732 | $ | 517,650 | $ | 384,769 | $ | 775,826 | $ | 1,274,650 | $ | 933,973 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 535,278 | $ | 539,553 | $ | 610,052 | $ | 1,136,909 | $ | 1,250,675 | $ | 751,585 | |||||||||||||||
Ratio of Expenses to Average Net Assets***(2)(3) | 0.16 | %(4) | 0.16 | %(4) | 0.15 | %(4) | 0.15 | %(4) | 0.15 | %(4) | 0.15 | %(4) | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.28 | % | 2.74 | % | 1.12 | % | 1.17 | % | 1.90 | % | 4.72 | % | |||||||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | Janus Tax-Exempt Money Market Fund | ||||||||||||||||||||||||||
Institutional Shares | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
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 | .02 | .01 | .01 | .02 | .03 | |||||||||||||||||||||
Net gains/(losses) on securities | – | (1) | – | (1) | – | (1) | – | (1) | – | – | |||||||||||||||||
Total from Investment Operations | .01 | .02 | .01 | .01 | .02 | .03 | |||||||||||||||||||||
Less Distributions: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.01 | ) | (.02 | ) | (.01 | ) | (.01 | ) | (.02 | ) | (.03 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | – | (1) | – | (1) | – | – | |||||||||||||||||||
Total Distributions | (.01 | ) | (.02 | ) | (.01 | ) | (.01 | ) | (.02 | ) | (.03 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total Return** | 1.48 | % | 2.06 | % | 1.01 | % | 1.07 | % | 1.51 | % | 3.27 | % | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 2,650 | $ | 2,001 | $ | 49,385 | $ | 73,039 | $ | 105,009 | $ | 136,557 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 3,356 | $ | 43,135 | $ | 61,801 | $ | 101,230 | $ | 109,354 | $ | 61,859 | |||||||||||||||
Ratio of Expenses to Average Net Assets***(2)(3) | 0.22 | %(5) | 0.20 | %(5) | 0.19 | %(5) | 0.18 | %(5) | 0.18 | %(5) | 0.19 | %(5) | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.06 | % | 1.97 | % | 1.01 | % | 1.07 | % | 1.51 | % | 3.10 | % |
*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) Net gains/(losses) on securities and/or distributions (from capital gains) aggregated less than $.01 on a per share basis for the fiscal year or period ended.
(2) See "Explanations of Charts, Tables and Financial Statements."
(3) 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%.
(4) The ratio was 0.36% in 2006, 0.36% in 2005, 0.35% in 2004, 0.35% in 2003, 0.35% in 2002 and 0.35% in 2001 before waiver of certain fees incurred by the Fund.
(5) The ratio was 0.39% in 2006, 0.37% in 2005, 0.36% in 2004, 0.35% in 2003, 0.35% in 2002 and 0.36% in 2001 before waiver of certain fees incurred by the Fund.
See Notes to Financial Statements.
54 Janus Bond & Money Market Funds April 30, 2006
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | Janus Money Market Fund | ||||||||||||||||||||||||||
Service Shares | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
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 | .03 | .01 | .01 | .02 | .05 | |||||||||||||||||||||
Net gains/(losses) on securities | – | – | (1) | – | (1) | – | (1) | – | (1) | – | (1) | ||||||||||||||||
Total from Investment Operations | .02 | .03 | .01 | .01 | .02 | .05 | |||||||||||||||||||||
Less Distributions: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.02 | ) | (.03 | ) | (.01 | ) | (.01 | ) | (.02 | ) | (.05 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | (1) | – | (1) | – | (1) | – | (1) | – | (1) | ||||||||||||||||
Total Distributions | (.02 | ) | (.03 | ) | (.01 | ) | (.01 | ) | (.02 | ) | (.05 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total Return** | 2.04 | % | 2.58 | % | 0.92 | % | 0.96 | % | 1.70 | % | 4.70 | % | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 24,324 | $ | 26,849 | $ | 25,731 | $ | 60,326 | $ | 98,643 | $ | 74,515 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 26,391 | $ | 22,738 | $ | 36,421 | $ | 68,106 | $ | 80,774 | $ | 99,861 | |||||||||||||||
Ratio of Expenses to Average Net Assets***(2)(3) | 0.43 | %(4) | 0.43 | %(4) | 0.43 | %(4) | 0.43 | %(4) | 0.43 | %(4) | 0.43 | %(4) | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.06 | % | 2.59 | % | 0.88 | % | 0.95 | % | 1.71 | % | 4.62 | % | |||||||||||||||
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | Janus Government Money Market Fund | ||||||||||||||||||||||||||
Service Shares | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
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 | .03 | .01 | .01 | .02 | .05 | |||||||||||||||||||||
Net gains/(losses) on securities | – | – | (1) | – | (1) | – | – | (1) | – | (1) | |||||||||||||||||
Total from Investment Operations | .02 | .03 | .01 | .01 | .02 | .05 | |||||||||||||||||||||
Less Distributions: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.02 | ) | (.03 | ) | (.01 | ) | (.01 | ) | (.02 | ) | (.05 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | (1) | – | (1) | – | – | (1) | – | (1) | |||||||||||||||||
Total Distributions | (.02 | ) | (.03 | ) | (.01 | ) | (.01 | ) | (.02 | ) | (.05 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total Return** | 2.01 | % | 2.55 | % | 0.88 | % | 0.92 | % | 1.69 | % | 4.67 | % | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 135,250 | $ | 129,083 | $ | 142,856 | $ | 190,913 | $ | 173,292 | $ | 85,589 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 138,637 | $ | 140,016 | $ | 164,773 | $ | 189,811 | $ | 118,192 | $ | 103,932 | |||||||||||||||
Ratio of Expenses to Average Net Assets***(2)(3) | 0.41 | %(5) | 0.41 | %(5) | 0.40 | %(5) | 0.40 | %(5) | 0.40 | %(5) | 0.40 | %(5) | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.03 | % | 2.49 | % | 0.87 | % | 0.91 | % | 1.64 | % | 4.57 | % |
*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) Net gains/(losses) on securities and/or distributions (from capital gains) aggregated less than $.01 on a per share basis for the fiscal year ended.
(2) See "Explanations of Charts, Tables and Financial Statements."
(3) 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%.
(4) The ratio was 0.60% in 2006, 0.60% in 2005, 0.60% in 2004, 0.60% in 2003, 0.60% in 2002 and 0.60% in 2001 before waiver of certain fees incurred by the Fund.
(5) The ratio was 0.61% in 2006, 0.61% in 2005, 0.60% in 2004, 0.60% in 2003, 0.60% in 2002 and 0.60% in 2001 before waiver of certain fees incurred by the Fund.
See Notes to Financial Statements.
Janus Bond & Money Market Funds April 30, 2006 55
Financial Highlights - Money Market Funds (continued)
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) and through each fiscal year ended October 31 | Janus Tax-Exempt Money Market Fund | ||||||||||||||||||||||||||
Service Shares | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||
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 | .02 | .01 | .01 | .01 | .03 | |||||||||||||||||||||
Net gains/(losses) on securities | – | (1) | – | (1) | – | (1) | – | (1) | – | – | |||||||||||||||||
Total from Investment Operations | .01 | .02 | .01 | .01 | .01 | .03 | |||||||||||||||||||||
Less Distributions: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.01 | ) | (.02 | ) | (.01 | ) | (.01 | ) | (.01 | ) | (.03 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | – | (1) | – | (1) | – | – | |||||||||||||||||||
Total Distributions | (.01 | ) | (.02 | ) | (.01 | ) | (.01 | ) | (.01 | ) | (.03 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total Return** | 1.35 | % | 1.80 | % | 0.76 | % | 0.81 | % | 1.27 | % | 3.02 | % | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 10 | $ | 10 | $ | 398 | $ | 91 | $ | 663 | $ | 10 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 10 | $ | 185 | $ | 124 | $ | 233 | $ | 192 | $ | 10 | |||||||||||||||
Ratio of Expenses to Average Net Assets***(2)(3) | 0.48 | %(4) | 0.46 | %(4) | 0.44 | %(4) | 0.43 | %(4) | 0.43 | %(4) | 0.43 | %(4) | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.73 | % | 1.46 | % | 0.88 | % | 0.89 | % | 1.21 | % | 2.98 | % |
*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) Net gains/(losses) on securities and/or distributions (from capital gains) aggregated less than $.01 on a per share basis for the fiscal year or period ended.
(2) See "Explanations of Charts, Tables and Financial Statements."
(3) 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%.
(4) The ratio was 0.65% in 2006, 0.63% in 2005, 0.61% in 2004, 0.60% in 2003, 0.60% in 2002 and 0.60% in 2001 before waiver of certain fees incurred by the Fund.
See Notes to Financial Statements.
56 Janus Bond & Money Market Funds April 30, 2006
Notes to Schedules of Investments (unaudited)
Lehman Brothers Aggregate Bond Index | The Lehman Brothers Aggregate Bond Index is made up of the Lehman Brothers Government/Corporate Bond Index, Mortgage-Backed Securities Index, and Asset-Based 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 | The 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 | The Lehman Brothers High-Yield Bond Index is composed of fixed-rate, publicly issued, non-investment grade debt. | ||||||
Lehman Brothers Municipal Bond Index | The Lehman Brothers Municipal Bond Index is composed of approximately 1,100 bonds; 60% of which are revenue bonds and 40% of which are state government obligations. | ||||||
Lipper General Municipal Debt Funds | Funds that invest at least 65% of their assets in municipal debt issues in the top four credit ratings. | ||||||
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. | ||||||
Russell 2000® Index | The Russell 2000® Index is an index that measures the performance of the 2,000 smallest companies in the Russell 3000® Index. | ||||||
144A | Securities sold under Rule 144A of the Securities Act of 1933 are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the1933 Act. | ||||||
ETD | Euro Time Deposit | ||||||
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. | ||||||
WI | When-Issued Securities | ||||||
** A portion of this holding has been segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, when-issued securities and/or securities with extended settlement dates.
‡ Rate is subject to change. Rate shown reflects current rate.
º Security is a defaulted security in Janus Flexible Bond Fund with accrued interest in the amount of $170,000 that was written-off December 10, 2001. A principal payment was received by the Fund on July 13, 2005. It is anticipated that sometime during the third quarter of 2006, a second principal payment will be received by the Fund.
## Security is a defaulted security in Janus Flexible Bond Fund with accrued interest in the amount of $110,000 that was written-off December 10, 2001. A principal payment was received by the Fund on July 13, 2005. It is anticipated that sometime during the third quarter of 2006, a second principal payment will be received by the Fund.
çç Security is a U.S. Treasury Inflation-Protected Security (TIPS).
ß Security is illiquid.
# Loaned security; a portion or all of the security is on loan as of April 30, 2006.
† The security is purchased with the cash collateral received from Securities on Loan (Note 1).
Janus Bond & Money Market Funds April 30, 2006 57
Notes to Schedules of Investments (unaudited) (continued)
ºº Schedule of Fair Valued Securities (as of April 30, 2006)
Value | Value as a % of Net Assets | ||||||||||
Janus Flexible Bond Fund | |||||||||||
Candescent Technologies Corp., 8.00% convertible senior subordinated debentures, due 5/1/03 (144A) | $ | – | 0.0 | % | |||||||
Candescent Technologies Corp., 8.00% convertible senior subordinated debentures, due 5/1/03 (144A) | – | 0.0 | % | ||||||||
$ | – | 0.0 | % | ||||||||
Janus High-Yield Fund | |||||||||||
Progressive Gaming Corp. - expires 8/15/08 | $ | 1,018,671 | 0.2 | % |
Securities are valued at "fair value" pursuant to procedures adopted by the Funds' Trustees. The Schedule of Fair Valued Securities does not include international activities fair valued pursuant to a systematic fair valuation model.
§ Schedule of Restricted and Illiquid Securities
Acquisition Date | Acquisition Cost | Value | Value as % of Net Assets | ||||||||||||||||
Janus Flexible Bond Fund | |||||||||||||||||||
Allegheny Energy Supply Company LLC, 8.25% unsecured notes, due 4/15/12 (144A) | 5/11/04 - 7/13/04 | $ | 1,794,850 | $ | 1,946,625 | 0.2 | % | ||||||||||||
Americo Life, Inc., 7.875% notes, due 5/1/13 (144A) | 4/25/03 - 5/21/03 | 3,298,666 | 3,321,733 | 0.4 | % | ||||||||||||||
Candescent Technologies Corp., 8.00% convertible senior subordinated debentures, due 5/1/03 (144A)ºº | 4/17/98 | 458,575 | – | 0.0 | % | ||||||||||||||
Candescent Technologies Corp., 8.00% convertible senior subordinated debentures, due 5/1/03 (144A)ºº | 3/6/00 | 237,380 | – | 0.0 | % | ||||||||||||||
El Paso Corp., 7.625% notes, due 9/1/08 (144A) | 11/5/04 - 1/18/06 | 3,387,156 | 3,362,837 | 0.4 | % | ||||||||||||||
$ | 9,176,627 | $ | 8,631,195 | 1.0 | % | ||||||||||||||
Janus High-Yield Fund | |||||||||||||||||||
Allegheny Energy Supply Company LLC, 8.25% senior unsecured notes, due 4/15/12 (144A) | 3/23/04 - 4/2/04 | $ | 1,060,705 | $ | 1,160,363 | 0.3 | % | ||||||||||||
Block Communications, Inc., 8.25% senior notes, due 12/15/15 (144A) | 12/13/05 - 4/12/06 | 3,483,884 | 3,445,688 | 0.7 | % | ||||||||||||||
CRC Health Corp., 10.75% senior subordinated notes, due 2/1/16 (144A) | 2/6/06 - 2/21/06 | 1,182,605 | 1,180,598 | 0.2 | % | ||||||||||||||
El Paso Corp., 6.50% debentures, due 6/1/08 (144A) | 12/22/04 - 11/10/05 | 2,299,810 | 2,309,395 | 0.5 | % | ||||||||||||||
El Paso Corp., 7.625% notes, due 9/1/08 (144A) | 10/7/04 | 1,244,438 | 1,221,000 | 0.3 | % | ||||||||||||||
El Paso Corp., 6.375% notes, due 2/1/09 (144A) | 11/2/04 | 1,637,700 | 1,627,400 | 0.3 | % | ||||||||||||||
El Paso Corp., 9.625% debentures, due 5/15/12 (144A) | 10/8/04 - 11/10/05 | 2,457,510 | 2,505,035 | 0.5 | % | ||||||||||||||
El Paso Corp., 7.42% notes, due 2/15/37 (144A) | 1/6/05 - 11/10/05 | 1,706,965 | 1,784,631 | 0.4 | % | ||||||||||||||
Hawaiian Telcom Communications, Inc., 9.75% senior notes, due 5/1/13 (144A) | 4/27/05 | 513,000 | 530,955 | 0.1 | % | ||||||||||||||
HydroChem Industrial Services, Inc., 9.25% senior subordinated notes, due 2/15/13 (144A) | 6/2/05 - 3/28/06 | 1,313,696 | 1,348,808 | 0.3 | % | ||||||||||||||
Majestic Star Casino LLC, 9.75% secured notes, due 1/15/11 (144A) | 12/16/05 - 3/13/06 | 2,329,875 | 2,352,374 | 0.5 | % | ||||||||||||||
Novelis, Inc., 7.50% senior notes, due 2/15/15 (144A) | 1/5/06 - 2/1/06 | 3,697,175 | 3,757,780 | 0.8 | % | ||||||||||||||
Strategic Hotels & Resorts, Inc. 8.50% (144A) | 3/9/05 | 586,625 | 596,159 | 0.1 | % | ||||||||||||||
Team Health, Inc., 11.25% senior subordinated notes, due 12/1/13 (144A) | 11/17/05 - 3/16/06 | 2,742,810 | 2,773,790 | 0.6 | % | ||||||||||||||
Tenaska Alabama II Partners, 7.00% secured notes, due 6/30/21 (144A) | 6/13/05 | 1,403,996 | 1,388,114 | 0.3 | % | ||||||||||||||
Titan Petrochemicals Group, Ltd., 8.50% company guaranteed notes, due 3/18/12 (144A) | 3/10/05 | 1,000,000 | 910,000 | 0.2 | % | ||||||||||||||
$ | 28,660,794 | $ | 28,892,090 | 6.1 | % |
58 Janus Bond & Money Market Funds April 30, 2006
Acquisition Date | Acquisition Cost | Value | Value as % of Net Assets | ||||||||||||||||
Janus Short-Term Bond Fund | |||||||||||||||||||
Williams Companies, Inc., 6.53625% | |||||||||||||||||||
notes, due 10/1/10 (144A) | 9/8/05 | $ | 985,000 | $ | 1,012,088 | 0.6 | % | ||||||||||||
Janus Money Market Fund | |||||||||||||||||||
Ares VII CLO, Ltd., Class A-1A 4.765%, 5/8/15 (144A) | 4/23/03 | $ | 75,000,000 | $ | 75,000,000 | 1.3 | % | ||||||||||||
Dekabank, New York 5.09688%, 11/19/15 (144A) | 4/19/06 | 20,000,000 | 20,000,000 | 0.4 | % | ||||||||||||||
G Street Finance Corp. 4.82%, 5/8/06 (144A) | 4/10/06 | 34,868,785 | 34,967,197 | 0.6 | % | ||||||||||||||
G Street Finance Corp. 4.89%, 5/19/06 (144A) | 4/20/06 | 15,431,958 | 15,455,120 | 0.3 | % | ||||||||||||||
G Street Finance Corp. 4.93%, 6/9/06 (144A) | 4/10/06 | 29,753,490 | 29,839,775 | 0.5 | % | ||||||||||||||
G Street Finance Corp. 4.98%, 7/7/06 (144A) | 4/10/06 | 29,634,780 | 29,721,950 | 0.5 | % | ||||||||||||||
Park Place Securities Trust, 2004-MM1 AM3 4.99938%, 2/25/35 (144A) | 11/23/05 | 32,975,194 | 32,975,194 | 0.6 | % | ||||||||||||||
Patrick Schaumburg Automobiles, Inc. 5.00%, 7/1/08 (144A) | 9/17/04 | 10,000,000 | 10,000,000 | 0.2 | % | ||||||||||||||
$ | 247,664,207 | $ | 247,959,236 | 4.4 | % |
The Funds have registration rights for certain restricted securities held as of April 30, 2006. The issuer incurs all registration costs.
Janus Bond & Money Market Funds April 30, 2006 59
Notes to Schedules of Investments (unaudited) (continued)
Aggregate collateral segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, when-issued securities and/or securities with extended settlement dates as of April 30, 2006 are noted below.
Fund | Aggregate Value | ||||||
Janus Federal Tax-Exempt Fund | $ | 579,100 | |||||
Janus Flexible Bond Fund | 6,168,700 | ||||||
Janus High-Yield Fund | 1,335,993 | ||||||
Janus Short-Term Bond Fund | 642,425 |
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, 2006.
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.
60 Janus Bond & Money Market Funds April 30, 2006
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 Federal Tax-Exempt Fund, 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 was 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 thirty-two funds. The Bond Funds invest primarily in income-producing securities, and the Money Market Funds invest in high-quality money market instruments. Each of the Bond Funds in this report is classified as diversified as defined in the 1940 Act. The Funds are no-load investments.
The Money Market Funds offer three classes of shares: "Investor Shares" are available to the general public, "Institutional Shares" are available only to investors that meet certain minimum dollar limits, and "Service Shares" are available through banks and other financial institutions.
Janus Capital Management LLC ("Janus Capital") invested $10,000 of seed capital in Janus Tax-Exempt Money Market Fund – Service Shares on June 10, 2005.
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 at 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 ga ins 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 u nder the supervision of the Funds' Trustees. 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 and may be subject to withholding taxes in these 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 for each of the Money Market Funds based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
Each Bond Fund bears expenses incurred specifically on its behalf as well as a portion of general expenses. Each class of shares of each Money Market Fund 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 new 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.
Janus Bond & Money Market Funds April 30, 2006 61
Notes to Financial Statements (unaudited) (continued)
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. In addition, 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, 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. Cash collateral may also be invested in unaffiliated money market funds or other accounts.
State Street Bank and Trust Company (the "Lending Agent") may also invest the cash collateral in the State Street Navigator Securities Lending Prime Portfolio 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, 2006, the following Funds had on loan securities valued as indicated:
Fund | Value at April 30, 2006 | ||||||
Janus Flexible Bond Fund | $ | 144,078,547 | |||||
Janus High-Yield Fund | 933,173 | ||||||
Janus Short-Term Bond Fund | 43,976,837 |
As of April 30, 2006, the following Funds received cash collateral for securities lending activity as indicated:
Fund | Cash Collateral at April 30, 2006 | ||||||
Janus Flexible Bond Fund | $ | 147,008,374 | |||||
Janus High-Yield Fund | 952,325 | ||||||
Janus Short-Term Bond Fund | 44,872,848 |
As of April 30, 2006, all cash collateral received by the Funds was invested in the State Street Navigator Securities Lending Prime Portfolio.
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 respective 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 its Lending Agent. The Lending Agent may retain a portion of the interest earned. The cash collateral invested by the Lending Agent is disclosed in the Schedule of Investments. The lending fees and the Funds' portion of the interest income earned on cash collateral are included on the Statement of Operations (if applicable).
During the six-month period ended April 30, 2006, there were no securities lending arrangements for Janus Federal Tax-Exempt Fund or the Money Market Funds.
Interfund Lending
Pursuant to an exemptive order received from the SEC, each of the Funds may be party to an interfund lending agreement between the Fund and other Janus Capital sponsored mutual funds, which permit it 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 a 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, 2006, there were no outstanding borrowing or lending arrangements for the Funds.
Forward Currency Transactions
The Bond Funds may enter into forward currency contracts in order to reduce their exposure to changes in foreign currency exchange rates on their 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 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. The Bond Funds intend to use such derivative instruments primarily to
62 Janus Bond & Money Market Funds April 30, 2006
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 value 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 an unrealized gain or loss. 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 designated as collateral for market value on futures contracts are noted in the Schedule of Investments. Such collateral is in the possession of the Funds' custodian.
Mortgage Dollar Rolls
The Bond Funds may enter into "mortgage dollar rolls." In a "mortgage dollar roll" transaction, the Fund sells a mortgage-related security (such as a Government National Mortgage Association ("GNMA") 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 Fund 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 Fund's 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 Fund, maintained in a segregated account. To the extent that the Fund collateralizes its 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 Fund's ability to predict interest rates and mortgage payments. Dollar roll transactions involve the risk that the market value of the securities the Fund is required to purchase may decline below the agreed upon repurchase price.
The average monthly balance of dollar rolls outstanding during the six-month period ended April 30, 2006 was $6,771,060 for Janus Flexible Bond Fund, which was the only Fund to participate during the period. At April 30, 2006, the Bond Funds were not invested in dollar rolls.
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 the loan, as specified in the loan agreement. When investing in a loan participation, a Fund has the right to receive payments of principal, interest and any fees to which it is entitled only from the Lender selling the loan agreement and only upon receipt by the Lender of payments from the borrower. A 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 r ate changes and/or issuer credit quality. The interest rates paid on a floating rate security in which a Fund invests generally are readjusted every 45-60 days, on average, to an increment over a designated benchmark rate, such as the one-month, three-month, six-month, or one-year London Interbank Offered Rate ("LIBOR'').
A 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, a 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 Funds utilize an independent third party to value individual bank loans on a daily basis.
The average daily value of borrowings outstanding under bank loan arrangements and the related weighted average rate range during the six-month fiscal year ended April 30, 2006 are noted in the table below.
Fund | Average Daily Value | Rates | |||||||||
Janus Flexible Bond Fund | $ | 5,573,798 | 4.92%-8.5% | ||||||||
Janus High-Yield Fund | 17,709,738 | 4.08313%-11.01% | |||||||||
Janus Short-Term Bond Fund | 3,642,240 | 5.51%-10.24313% |
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 Fund commits 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 GNMA, Federal National Mortgage Association ("FNMA") and/or Federal Home Loan Mortgage Corporation ("FHLMC") transactions. Securities purchased on a TBA basis are not settled until they are delivered to the Fund, normally 15 to 45 days later. Beginning on the date the Fund enters 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.
At April 30, 2006, the Bond Funds were not invested in TBA securities.
Janus Bond & Money Market Funds April 30, 2006 63
Notes to Financial Statements (unaudited) (continued)
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. As of April 30, 2006, Janus Federal Tax-Exempt Fund was invested in when-issued securities.
Foreign Currency Translation
The 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 translation arise from changes in the value of assets and liabilities, including investments in securities 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 security transactions and income.
Foreign-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.
Equity-Linked Structured Notes
The Funds may invest in equity-linked structured notes. Equity-linked structured notes are debt securities which combine the characteristics of common stock and the sale of an option. The return component is based upon the performance of a single equity security, a basket of equity securities, or an equity index and the sale of an option which is recognized as income. Equity-linked structured notes are typically offered in limited transactions to financial institutions by investment banks, examples of which include performance equity-linked redemption quarterly pay securities ("PERQS"), yield-enhanced securities ("YES"), and yield-enhanced equity-linked debt securities ("YEELDS"). There is no guaranteed return of principal with these securities. The appreciation potential of these securities may be limited by a maximum payment or call right and can be influenced by many unpredictable factors.
Initial Public Offerings
The Funds may invest in initial public offerings ("IPOs"). IPOs and other investment techniques may have a magnified performance impact on a fund with a small asset base. The Funds may not experience similar performance as their assets grow.
Additional Investment Risk
Janus High-Yield Fund, Janus Flexible Bond 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 because of changes in the economy, political environment, or adverse developments specific to the issuer.
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. 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.
Dividend Distributions
Dividends representing substantially all of the net investment income and any net realized capital gains on sales of securities are declared daily and distributed monthly. 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.
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.
2. INVESTMENT ADVISORY AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
Each Bond Fund pays 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 | Average Daily Net Assets of Fund | Management Fee % | |||||||||
Janus Federal Tax-Exempt Fund | First $300 Million Over $300 Million | 0.50% 0.45% | |||||||||
Janus Flexible Bond Fund | First $300 Million Over $300 Million | 0.58% 0.48% | |||||||||
Janus High-Yield Fund | First $300 Million Over $300 Million | 0.65% 0.55% | |||||||||
Janus Short-Term Bond Fund | First $300 Million Over $300 Million | 0.64% 0.54% | |||||||||
64 Janus Bond & Money Market Funds April 30, 2006
Until at least March 1, 2007, 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 such Fund's normal operating expenses in any fiscal year, including the investment advisory fee, but excluding brokerage commissions, interest, taxes and extraordinary 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 Fee % | ||||||
Janus Federal Tax-Exempt Fund | 0.55 | % | |||||
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, each class of shares of each of the Money Market Funds pays Janus Capital an administrative services fee. This fee is 0.50%, 0.15%, and 0.40% of average daily net assets for the Investor Shares, Institutional Shares, and Service Shares, respectively. Effective April 1, 2002, Janus Capital has agreed to reduce the administrative services fee to 0.08% and 0.33% on the Institutional Shares and Service Shares, respectively, for both Janus Money Market Fund and Janus Tax-Exempt Money Market Fund until March 2007. Additionally, the administrative services fee was reduced to 0.05% and 0.30% on the Institutional Shares and Service Shares, resp ectively, for Janus Government Money Market Fund effective April 1, 2002 until March 2007. For the Service Shares of each of the Money Market Funds, a portion of the administrative services fee, designated separately as service fees, is used to compensate Financial Institutions for providing administrative services to their customers who invest in the shares. Each of 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.
A 2.00% redemption fee may be imposed on shares of Janus High-Yield Fund held for three months 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 Janus High-Yield Fund were $30,887 for the six-month period ended April 30, 2006.
Each of the Bond Funds pays Janus Services LLC ("Janus Services"), a wholly owned subsidiary of Janus Capital, an asset-weighted average annual fee based on the proportion of each Bond Fund's total net assets sold directly and the proportion of each Bond Fund's net assets sold through 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 Bond Fund for transfer agent services.
During the six-month period ended April 30, 2006, Janus Services reimbursed the following Funds as a result of dilutions caused by incorrectly processed shareholder activity as indicated in the table below.
Funds | |||||||
Janus Flexible Bond Fund | $ | 1,649 | |||||
Janus High-Yield Fund | 804 | ||||||
Janus Short-Term Bond Fund | 727 |
For the six-month period ended April 30, 2006, Janus Capital assumed $14,642 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 Note 6. These non-recurring costs were allocated to all Portfolios based upon the Portfolios' respective net assets as of July 31, 2004. No fees were allocated to Janus Research Fund, Janus Triton Fund and the Janus Smart Portfolios as the funds commenced operations after July 31, 2004. Additionally, all future non-recurring costs will be allocated based upon the Portfolios' respective net assets on July 31, 2004. These non-recurring costs and offsetting waivers are shown on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the "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 credited to the account. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance to the Plan. No deferred fees were paid to any Trustee under the Plan during the six-month period ended April 30, 2006.
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
Janus Bond & Money Market Funds April 30, 2006 65
Notes to Financial Statements (unaudited) (continued)
began reimbursing the adviser for a portion of the compensation paid to the Chief Compliance Officer of the Funds. $59,577 of total compensation was paid by the funds of the Trust. The Funds' portion is reported as part of "Other Expenses" on the Statement of Operations.
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 Offsets 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 it had not entered into an expense offset arrangement.
Other Funds managed by Janus Capital may invest in the Money Market Funds. During the six-month period ended April 30, 2006, the following funds recorded distributions from affiliated investment companies as affiliated dividend income, and the had the following affiliated purchases and sales:
Subscriptions | Redemptions | Dividend Paid | Value at 4/30/06 | ||||||||||||||||
Janus Government Money Market Fund | |||||||||||||||||||
Janus Growth and Income Fund | $ | 50,000,000 | $ | 50,000,000 | $ | 120,973 | $ | – | |||||||||||
Janus Mercury Fund | 40,000,000 | 40,000,000 | 42,970 | – | |||||||||||||||
Janus Mid Cap Value Fund | – | 100,000,000 | 1,498,274 | – | |||||||||||||||
Janus Small Cap Value Fund | – | 25,000,000 | 452,041 | – | |||||||||||||||
Janus Twenty Fund | 290,000,000 | 90,000,000 | 812,816 | 200,000,000 | |||||||||||||||
$ | 380,000,000 | $ | 305,000,000 | $ | 2,927,074 | $ | 200,000,000 | ||||||||||||
Janus Money Market Fund | |||||||||||||||||||
Janus Fund | $ | 345,000,000 | $ | 420,000,000 | $ | 845,792 | $ | 25,000,000 | |||||||||||
Janus Mercury Fund | 200,000,000 | 200,000,000 | 489,495 | – | |||||||||||||||
Janus Mid Cap Value Fund | 650,000,000 | 625,000,000 | 1,973,808 | 225,000,000 | |||||||||||||||
Janus Small Cap Value Fund | 75,000,000 | 100,000,000 | 946,281 | 75,000,000 | |||||||||||||||
Janus Twenty Fund | 850,000,000 | 425,000,000 | 4,506,308 | 475,000,000 | |||||||||||||||
$ | 2,120,000,000 | $ | 1,770,000,000 | $ | 8,761,684 | $ | 800,000,000 |
3. PURCHASES AND SALES OF INVESTMENT SECURITIES
For the six-month period ended April 30, 2006, the aggregate cost of purchases and proceeds from sales of investment securities (excluding short-term securities and mortgage dollar roll transactions) were as follows:
Fund | Purchase of Securities | Proceeds from Sales of Securities | Purchase of Long- Term U.S. Government Obligations | Proceeds from Sales of Long-Term U.S. Government Obligations | |||||||||||||||
Janus Federal Tax-Exempt Fund | $ | 52,472,645 | $ | 63,856,882 | $ | – | $ | – | |||||||||||
Janus Flexible Bond Fund | 178,719,604 | 195,834,217 | 336,738,295 | 401,471,549 | |||||||||||||||
Janus High-Yield Fund | 293,322,066 | 330,247,052 | – | – | |||||||||||||||
Janus Short-Term Bond Fund | 46,309,919 | 60,766,173 | 82,093,546 | 101,802,919 |
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, 2006 are also noted in the table on the next page.
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.
66 Janus Bond & Money Market Funds April 30, 2006
Fund | Federal Tax Cost | Unrealized Appreciation | Unrealized (Depreciation) | Net Tax Appreciation/ (Depreciation) | |||||||||||||||
Janus Federal Tax-Exempt Fund | $ | 102,805,081 | $ | 53,587 | $ | (1,015,329 | ) | $ | (961,742 | ) | |||||||||
Janus Flexible Bond Fund | 976,141,029 | 2,111,531 | (24,183,976 | ) | (22,072,445 | ) | |||||||||||||
Janus High-Yield Fund | 465,358,375 | 9,127,455 | (6,168,003 | ) | 2,959,452 | ||||||||||||||
Janus Short-Term Bond Fund | 220,531,249 | 133,396 | (1,756,473 | ) | (1,623,077 | ) | |||||||||||||
Janus Money Market Fund | 5,630,676,330 | – | – | – | |||||||||||||||
Janus Government Money Market Fund | 942,218,514 | – | – | – | |||||||||||||||
Janus Tax-Exempt Money Market Fund | 75,971,971 | – | – | – |
Net capital loss carryovers as of October 31, 2005 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 table below shows the expiration dates of the carryovers.
Capital Loss Carryover Expiration Schedule
For the fiscal year ended October 31, 2005
Fund | October 31, 2008 | October 31, 2010 | October 31, 2012 | October 31, 2013 | Accumulated Capital Losses | ||||||||||||||||||
Janus Federal Tax-Exempt Fund | $ | (2,127,380 | ) | $ | – | $ | – | $ | – | $ | (2,127,380 | ) | |||||||||||
Janus Flexible Bond Fund | – | (7,014,730 | ) | – | – | (7,014,730 | ) | ||||||||||||||||
Janus High-Yield Fund | – | (26,518,550 | ) | – | – | (26,518,550 | ) | ||||||||||||||||
Janus Short-Term Bond Fund | – | – | (681,569 | ) | – | (681,569 | ) | ||||||||||||||||
Janus Money Market Fund | – | – | – | – | – | ||||||||||||||||||
Janus Government Money Market Fund | – | – | – | – | – | ||||||||||||||||||
Janus Tax-Exempt Money Market Fund | – | – | – | (12,220 | ) | (12,220 | ) |
During the fiscal year ended October 31, 2005, the following capital loss carryovers were utilized by the Funds as indicated in the table below.
Fund | Capital Carryover Loss Utilized | ||||||
Janus Federal Tax-Exempt Fund | $ | 2,287,357 | |||||
Janus Flexible Bond Fund | 2,259,912 | ||||||
Janus High-Yield Fund | 8,609,936 |
Janus Bond & Money Market Funds April 30, 2006 67
Notes to Financial Statements (unaudited) (continued)
5. CAPITAL SHARES TRANSACTIONS
For the six-month period ended April 30, 2006 (unaudited) and the fiscal year ended October 31, 2005 (all numbers in thousands) | Janus Federal Tax-Exempt Fund | Janus Flexible Bond Fund | Janus High-Yield Fund | Janus Short-Term Bond Fund | |||||||||||||||||||||||||||||||
Bond Funds | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||||||||||
Transactions in Fund Shares | |||||||||||||||||||||||||||||||||||
Shares sold | 717 | 2,001 | 5,385 | 11,790 | 4,592 | 17,160 | 5,313 | 13,783 | |||||||||||||||||||||||||||
Reinvested distributions | 260 | 548 | 1,912 | 4,193 | 1,663 | 3,379 | 1,037 | 2,374 | |||||||||||||||||||||||||||
Shares repurchased | (2,271 | ) | (4,996 | ) | (18,836 | ) | (35,436 | ) | (12,209 | ) | (21,915 | ) | (15,178 | ) | (38,083 | ) | |||||||||||||||||||
Net Increase/(Decrease) in Capital Share Transactions | (1,294 | ) | (2,447 | ) | (11,539 | ) | (19,453 | ) | (5,954 | ) | (1,376 | ) | (8,828 | ) | (21,926 | ) | |||||||||||||||||||
Shares Outstanding, Beginning of Period | 16,138 | 18,585 | 99,378 | 118,831 | 55,193 | 56,569 | 70,214 | 92,140 | |||||||||||||||||||||||||||
Shares Outstanding, End of Period | 14,844 | 16,138 | 87,839 | 99,378 | 49,239 | 55,193 | 61,386 | 70,214 |
For the six-month period ended April 30, 2006 (unaudited) and the fiscal year ended October 31, 2005 (all numbers in thousands) | Janus Money Market Fund | Janus Government Money Market Fund | Janus Tax-Exempt Money Market Fund | ||||||||||||||||||||||||
Money Market Funds | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||||
Transactions in Fund Shares – Investor Shares | |||||||||||||||||||||||||||
Shares sold | 418,486 | 816,550 | 28,715 | 72,199 | 20,900 | 47,929 | |||||||||||||||||||||
Reinvested dividends and distributions | 25,070 | 33,426 | 3,292 | 4,447 | 981 | 1,503 | |||||||||||||||||||||
Shares repurchased | (498,966 | ) | (1,077,784 | ) | (46,803 | ) | (114,369 | ) | (33,658 | ) | (71,010 | ) | |||||||||||||||
Net Increase/(Decrease) in Capital Share Transactions | (55,410 | ) | (227,808 | ) | (14,796 | ) | (37,723 | ) | (11,777 | ) | (21,578 | ) | |||||||||||||||
Shares Outstanding, Beginning of Period | 1,360,996 | 1,588,804 | 186,361 | 224,084 | 85,808 | 107,386 | |||||||||||||||||||||
Shares Outstanding, End of Period | 1,305,586 | 1,360,996 | 171,565 | 186,361 | 74,031 | 85,808 | |||||||||||||||||||||
Transactions in Fund Shares – Institutional Shares | |||||||||||||||||||||||||||
Shares sold | 15,355,633 | 31,608,314 | 2,495,941 | 5,039,102 | 13,980 | 61,356 | |||||||||||||||||||||
Reinvested dividends and distributions | 28,272 | 55,423 | 3,872 | 4,378 | 40 | 820 | |||||||||||||||||||||
Shares repurchased | (14,713,465 | ) | (36,149,294 | ) | (2,382,728 | ) | (4,910,599 | ) | (13,370 | ) | (109,557 | ) | |||||||||||||||
Net Increase/(Decrease) in Capital Share Transactions | 670,440 | (4,485,557 | ) | 117,085 | 132,881 | 650 | (47,381 | ) | |||||||||||||||||||
Shares Outstanding, Beginning of Period | 3,638,018 | 8,123,575 | 517,650 | 384,769 | 2,004 | 49,385 | |||||||||||||||||||||
Shares Outstanding, End of Period | 4,308,458 | 3,638,018 | 634,735 | 517,650 | 2,654 | 2,004 | |||||||||||||||||||||
Transactions in Fund Shares – Service Shares | |||||||||||||||||||||||||||
Shares sold | 32,061 | 67,542 | 392,828 | 725,906 | – | 10 | |||||||||||||||||||||
Reinvested dividends and distributions | 185 | 260 | 902 | 1,037 | – | 3 | |||||||||||||||||||||
Shares repurchased | (34,771 | ) | (66,684 | ) | (387,566 | ) | (740,716 | ) | – | (401 | ) | ||||||||||||||||
Net Increase/(Decrease) in Capital Share Transactions | (2,525 | ) | 1,118 | 6,164 | (13,773 | ) | – | (388 | ) | ||||||||||||||||||
Shares Outstanding, Beginning of Period | 26,849 | 25,731 | 129,083 | 142,856 | 10 | 398 | |||||||||||||||||||||
Shares Outstanding, End of Period | 24,324 | 26,849 | 135,247 | 129,083 | 10 | 10 |
68 Janus Bond & Money Market Funds April 30, 2006
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 in that Court that generally include: (i) claims by a putative class of investors in certain Janus funds asserting claims on behalf of the investor class; (ii) derivative claims by investors in certain Janus funds ostensibly on behalf of suc h funds; (iii) claims on behalf of participants in the Janus 401(k) plan; (iv) claims brought on behalf of shareholders of Janus Capital Group Inc. ("JCGI") on a derivative basis against the Board of Directors of JCGI; and (v) claims by a putative class of shareholders of JCGI asserting claims on behalf of the shareholders. 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 (actions (i) and (ii) described 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. The complaint in the 401(k) plan class action (action (iii) described above) was voluntarily dismissed, but was refiled using a new named plaintiff and asserting claims similar to the initial complaint. As a result of the above events, JCGI, Janus Capital, the Advisory Committee of the Janus 401(k) plan, and the current or former directors of JCGI are the remaining defendants in one or more of the actions.
The Attorney General's Office for the State of West Virginia filed a separate market timing related civil action against Janus Capital and several other non-affiliated mutual fund companies, claiming violations under the West Virginia Consumer Credit and Protection Act. The civil action requests certain monetary penalties, among other relief. This action has been removed to federal court and transferred to the Multidistrict Litigation case in the U.S. District Court of Baltimore, Maryland described above. In addition, the Auditor of the State of West Virginia, in his capacity as securities commissioner, has issued an order indicating an intent to initiate administrative proceedings against most of the defendants in the market timing cases (including Janus Capital) and seeking disgorgement and other monetary relief based on similar market timing allegations.
In addition to the "market timing" actions described above, Janus Capital is a defendant in a consolidated lawsuit in the U.S. District Court for the District of Colorado challenging the investment advisory fees charged by Janus Capital to certain Janus funds. The action was filed in 2004 by fund investors asserting breach of fiduciary duty under Section 36(b) of the Investment Company Act of 1940. The plaintiffs seek declaratory and injunctive relief and an unspecified amount of damages.
In 2001, Janus Capital's predecessor was also named as a defendant in a class action suit in the U.S. District Court for the Southern District of New York, alleging that certain underwriting firms and institutional investors violated antitrust laws in connection with initial public offerings. The U.S. District Court dismissed the plaintiff's antitrust claims in November 2003, however, the U.S. Court of Appeals vacated that decision and remanded it for further proceedings.
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 Bond & Money Market Funds April 30, 2006 69
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 Fund's website at www.janus.com; 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).
Amendments to Advisory Agreements to Conform to Prevailing Industry Practice
On September 20, 2005, the Board of Trustees, including all of the Independent Trustees, voted unanimously to approve an amended Investment Advisory Agreement ("Amended Agreement") for each applicable Fund and authorized the submission of each Amended Agreement to the Fund's shareholders for approval. Shareholders approved the Amended Agreement for their Fund at a special meeting of Shareholders held on December 29, 2005 for Janus Short-Term Bond Fund and Janus Federal Tax-Exempt Fund; and on January 9, 2006 for Janus Flexible Bond Fund and Janus High-Yield Fund.
In approving the proposed Amended Agreements, the Trustees considered the recommendations of an independent compliance consultant engaged by Janus Capital regarding the form of each of those agreements and concluded that the proposed changes were consistent with industry practice and would reflect an appropriate delegation of authority to Janus Capital clarifying its investment discretion over the Funds it manages.
In connection with their most recent consideration of the investment advisory agreements for all of the Funds, the Trustees received and reviewed a substantial amount of information provided by Janus Capital and the respective subadvisers for subadvised Funds in response to requests of the Independent Trustees and their counsel. They also received and reviewed a considerable amount of information and analysis provided to the Trustees by an independent fee consultant. Throughout their consideration of the agreements, the Independent Trustees were advised by their independent legal counsel. The Independent Trustees met on two separate occasions with Janus Capital management to consider the agreements, and at each of those meetings they also met separately in executive session with their counsel.
Based on their evaluation of the information provided by Janus Capital, subadvisers, the independent fee consultant, Lipper Inc. ("Lipper"), and other information, the Trustees determined that the overall arrangements between the Funds and Janus Capital were fair and reasonable in light of the nature 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. In considering the 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 agreements are discussed separately below.
Nature, Extent, and Quality of Services
The Trustees reviewed the nature, extent, and quality of the services of Janus Capital and the subadvisers to the Funds, taking into account the investment objective and strategy of each Fund and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis. 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, and overseeing the activities of other service provider s, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations. The Trustees also reviewed the enhanced compliance program of Janus Capital and the actions taken by Janus Capital in response to various legal and regulatory proceedings since the fall of 2003.
The Trustees concluded that the nature, extent, and quality of the services provided by Janus Capital and, if applicable, the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory agreements, that 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
70 Janus Bond & Money Market Funds April 30, 2006
subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its continuing ability to attract and retain well-qualified personnel.
Performance of the Funds
The Trustees considered the short-term and longer term performance of each Fund. They reviewed information comparing each Fund's performance with the performance of comparable funds and peer groups identified by Lipper and with the Fund's benchmark index. They concluded that the performance of most Funds was good to very good. Although the performance of some Funds lagged that of their peers for certain periods, they also concluded that Janus Capital had taken appropriate steps to address the 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 information for other comparable funds as provided by Lipper. They noted that the rate of management (investment advisory and administrative) fees for each Fund, 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 in determining compensation payable to portfolio managers, the very competitive environment for investment management talent and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed Janus Capital's management fees for its separate account clients and for its subadvised funds (for which Janus Capital provides only portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fees for Funds having a similar strategy, the Trustees noted that 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. Moreover, they noted that the spread between the average fees charged to the Funds and the fees that Janus Capital charged to its separate account clients was significantly smaller than the average spread for such fees of other advisers, based on publicly available data and research conducted b y their independent fee consultant.
The Trustees also considered the profitability to Janus Capital and its affiliates of their relationships with each Fund and found Janus Capital's profitability not to be unreasonable.
Finally, the Trustees considered the financial condition of Janus Capital, which they found to be sound.
The Trustees concluded that the management fees and any other compensation payable by each Fund to Janus Capital and its affiliates, as well as the fees paid by Janus Capital or a Fund to the subadvisers of subadvised Funds, were reasonable in relation to the nature 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 charges to other clients. The Trustees also concluded that the overall expense ratio of each Fund was reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital, the investment performance of the Fund, and the expense limitations agreed to by Janus Capital.
Economies of Scale
The Trustees received and considered information about the potential of Janus Capital to experience economies of scale as the assets of the Funds increase. They noted that, although each Fund (except four Funds that have breakpoints) pays an advisory fee at a fixed rate as a percentage of net assets, without any breakpoints, the management fee paid by each Fund, after any applicable contractual expense limitations, was below the mean management fee rate of the Fund's peer group selected by Lipper. The Trustees also took note that, for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of many of the Funds have declined in the past few years, the Funds have benefited from having advisory fee rates that have remained constant rather than fees with breakpoints and higher fee rates at low er asset levels in which the effective fee rate might have increased as assets declined. The Trustees considered certain Amended Agreements that included a change to the advisory fee to reflect a performance-based structure under which the rate of fee would increase or decrease from the current fixed rate if the Fund outperforms or underperforms its benchmark index over a trailing period. Such a fee structure is likely to increase or decrease Janus Capital's economies of scale, depending on whether the effective rate of the fee is increased or decreased. 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 fee structure in each of the advisory agreements was reasonable and that the current rates of fees reflect a sharing between Janus Capital and the Fund of economies of scale at the current asset level of the Fund.
Other Benefits to the Adviser
The Trustees also considered benefits that accrue to Janus Capital and its affiliates from their relationship with the Funds.
Janus Bond & Money Market Funds April 30, 2006 71
Additional Information (unaudited) (continued)
They recognized that affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively. The Trustees also considered Janus Capital's use of commissions paid by most Funds on their portfolio brokerage transactions to obtain proprietary research products and services benefiting the Funds and/or other clients of Janus Capital, as well as Janus Capital's agreement not to use any Fund's portfolio brokerage transactions to obtain third party research through brokers. The Trustees concluded that Janus Capital's use of "soft" commission dollars to obtain proprietary research products and services was consistent with regulatory requirements 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 r elationship with each other in other ways. They concluded that Janus Capital benefits from the receipt of proprietary 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 each Fund could attract other business to Janus Capital or its other Funds and that the success of Janus Capital could enhance Janus Capital's ability to serve the Funds.
After full consideration of the above factors as well as other factors, the Trustees, including all of the Independent Trustees, concluded that the current Investment Advisory Agreement for each Fund was in the best interest of the Fund and its shareholders. In approving the Amended Agreements, the Independent Trustees also concluded that the Amended Agreement, as proposed, was in the best interest of the Fund and its shareholders.
72 Janus Bond & Money Market Funds April 30, 2006
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Janus Bond & Money Market Funds April 30, 2006 73
Explanations of Charts, Tables and
Financial Statements (unaudited)
1. PERFORMANCE OVERVIEWS
Performance overview graphs compare the performance of a hypothetical $10,000 investment in each Fund 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 any dividends, distributions and capital gains, 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.
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.
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'll 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.
74 Janus Bond & Money Market Funds April 30, 2006
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 and expense offsets 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, prospectuses and other expenses. Expense offsets, if any, are also shown.
The last section lists the increase or decrease in the value of securities held in the Funds. 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 Fund's 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'll 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 withdraw via redemptions. The "Redemption Fees" refers to the fee paid to the Funds for shares held for three months 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 the Funds' NAV for current and past reporting periods. Not only does this table provide you with total return, it also reports total distributions, asset size, expense ratios and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income per share, which comprises dividends and interest income earned on securities held by the Funds. Following is the total of gains/(losses), realized and unrealized. Dividends and distributions are then subtracted to arrive at the NAV per share at the end of the period.
The next line reflects the average annual total return reported the last day of the period.
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 average shareholder account size 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 offset and the net expenses. The expense ratios listed in the Financial Highlights reflect total expenses prior to any expense offsets (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 ratio is the portfolio turnover rate, which measures the buying and selling activity in a Fund. Portfolio turnover is affected by market conditions, changes in the asset size of a Fund, the nature of the Fund's investments and the investment style of the portfolio manager. A 100% rate implies that an amount equal to the value of the entire portfolio is turned over in a year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the portfolio is traded every six months.
Janus Bond & Money Market Funds April 30, 2006 75
Shareholder Meeting (unaudited)
A Special Meeting of Shareholders of the Funds was held on November 22, 2005 and adjourned and reconvened to December 29, 2005 and January 9, 2006. At the meetings, the following matters were voted on and approved by the Shareholders. Each vote reported represents one dollar of net asset value held on the record date of the meeting. The results of the Special Meeting of Shareholders are noted below.
Proposal 1
Elect nine Trustees, including eight "independent" candidates.
Record | Number of Votes | Percentage of Total Outstanding Votes | Percentage of Voted | ||||||||||||||||||||||||||||||||||||||||
Trustees | Date Votes | Affirmative | Withheld | Total | Affirmative | Withheld | Total | Affirmative | Withheld | Total | |||||||||||||||||||||||||||||||||
Jerome S. Contro | 72,431,132,779 | 28,415,846,253 | 806,823,785 | 29,222,670,038 | 39.23 | % | 1.12 | % | 40.35 | % | 97.24 | % | 2.76 | % | 100.00 | % | |||||||||||||||||||||||||||
William F. McCalpin | 72,431,132,779 | 28,431,830,093 | 790,839,945 | 29,222,670,038 | 39.26 | % | 1.09 | % | 40.35 | % | 97.29 | % | 2.71 | % | 100.00 | % | |||||||||||||||||||||||||||
John W. McCarter, Jr. | 72,431,132,779 | 28,410,815,406 | 811,854,632 | 29,222,670,038 | 39.23 | % | 1.12 | % | 40.35 | % | 97.22 | % | 2.78 | % | 100.00 | % | |||||||||||||||||||||||||||
Dennis B. Mullen | 72,431,132,779 | 28,408,140,530 | 814,529,508 | 29,222,670,038 | 39.22 | % | 1.13 | % | 40.35 | % | 97.21 | % | 2.79 | % | 100.00 | % | |||||||||||||||||||||||||||
James T. Rothe | 72,431,132,779 | 28,421,678,938 | 800,991,100 | 29,222,670,038 | 39.24 | % | 1.11 | % | 40.35 | % | 97.26 | % | 2.74 | % | 100.00 | % | |||||||||||||||||||||||||||
William D. Stewart | 72,431,132,779 | 28,426,971,191 | 795,698,847 | 29,222,670,038 | 39.25 | % | 1.10 | % | 40.35 | % | 97.28 | % | 2.72 | % | 100.00 | % | |||||||||||||||||||||||||||
Martin H. Waldinger | 72,431,132,779 | 28,400,077,651 | 822,592,387 | 29,222,670,038 | 39.21 | % | 1.14 | % | 40.35 | % | 97.18 | % | 2.82 | % | 100.00 | % | |||||||||||||||||||||||||||
Linda S. Wolf | 72,431,132,779 | 28,406,316,741 | 816,353,297 | 29,222,670,038 | 39.22 | % | 1.13 | % | 40.35 | % | 97.21 | % | 2.79 | % | 100.00 | % | |||||||||||||||||||||||||||
Thomas H. Bailey | 72,431,132,779 | 28,395,482,070 | 827,141,468 | 29,222,623,538 | 39.21 | % | 1.14 | % | 40.35 | % | 97.17 | % | 2.83 | % | 100.00 | % |
Proposal 2
To approve the elimination of the Fund's fundamental policy regarding investments in income-producing securities.
Number of Votes | Percentage of Total Outstanding Votes | Percentage of Voted | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Fund | Record Date Votes | Affirmative | Against | Abstain | Broker Non-Votes | Affirmative | Against | Abstain | Broker Non-Votes | Affirmative | Against | Abstain | Broker Non-Votes | ||||||||||||||||||||||||||||||||||||||||||
Janus Flexible Bond Fund | 984,730,229 | 466,207,919 | 54,440,628 | 24,189,665 | 117,369,233 | 47.34 | % | 5.53 | % | 2.46 | % | 11.92 | % | 70.40 | % | 8.22 | % | 3.65 | % | 17.73 | % |
Proposal 3a
To approve certain amendments to the Fund's investment advisory agreement with Janus Capital to conform to prevailing industry practice.
Number of Votes | Percentage of Total Outstanding Votes | Percentage of Voted | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Fund | Record Date Votes | Affirmative | Against | Abstain | Broker Non-Votes | Affirmative | Against | Abstain | Broker Non-Votes | Affirmative | Against | Abstain | Broker Non-Votes | ||||||||||||||||||||||||||||||||||||||||||
Janus Federal Tax-Exempt Fund | 117,282,903 | 60,876,682 | 5,356,370 | 3,458,526 | 7,058,564 | 51.91 | % | 4.57 | % | 2.95 | % | 6.02 | % | 79.32 | % | 6.98 | % | 4.50 | % | 9.20 | % | ||||||||||||||||||||||||||||||||||
Janus Flexible Bond Fund | 984,730,229 | 485,771,534 | 33,206,407 | 25,860,272 | 117,369,233 | 49.33 | % | 3.37 | % | 2.63 | % | 11.92 | % | 73.36 | % | 5.02 | % | 3.90 | % | 17.72 | % | ||||||||||||||||||||||||||||||||||
Janus High-Yield Fund | 544,302,954 | 262,419,997 | 13,272,342 | 12,019,816 | 67,919,621 | 48.21 | % | 2.44 | % | 2.21 | % | 12.48 | % | 73.79 | % | 3.73 | % | 3.38 | % | 19.10 | % | ||||||||||||||||||||||||||||||||||
Janus Short-Term Bond Fund | 210,622,465 | 92,713,052 | 4,716,024 | 4,250,698 | 28,075,113 | 44.02 | % | 2.24 | % | 2.02 | % | 13.33 | % | 71.45 | % | 3.63 | % | 3.28 | % | 21.64 | % | ||||||||||||||||||||||||||||||||||
Janus Money Market Fund | 5,417,974,934 | 2,672,045,842 | 60,115,517 | 106,306,092 | 16,178,457 | 49.32 | % | 1.11 | % | 1.96 | % | 0.30 | % | 93.60 | % | 2.11 | % | 3.72 | % | 0.57 | % | ||||||||||||||||||||||||||||||||||
Janus Government Money Market Fund | 809,139,268 | 499,990,416 | 8,140,535 | 7,242,327 | 2,838,850 | 61.79 | % | 1.01 | % | 0.90 | % | 0.35 | % | 96.48 | % | 1.57 | % | 1.40 | % | 0.55 | % | ||||||||||||||||||||||||||||||||||
Janus Tax-Exempt Money Market Fund | 132,499,868 | 84,309,532 | 2,999,719 | 2,627,055 | 41,475 | 63.63 | % | 2.26 | % | 1.98 | % | 0.03 | % | 93.70 | % | 3.33 | % | 2.92 | % | 0.05 | % |
76 Janus Bond & Money Market Funds April 30, 2006
Janus Bond & Money Market Funds April 30, 2006 77
Janus provides access to a wide range of investment disciplines.
Asset Allocation
Janus asset allocation funds 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.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
151 Detroit Street
Denver, CO 80206
1-800-525-3713
Funds distributed by Janus Distributors LLC (06/06)
C-0606-22 111-24-102 06-06
2006 Semiannual Report
Janus Institutional Cash Reserves Fund
Table of Contents
Schedule of Investments | 3 | ||||||
Statement of Assets and Liabilities | 5 | ||||||
Statement of Operations | 6 | ||||||
Statements of Changes in Net Assets | 7 | ||||||
Financial Highlights | 8 | ||||||
Notes to Schedule of Investments | 9 | ||||||
Notes to Financial Statements | 10 | ||||||
Additional Information | 14 | ||||||
Explanations of Charts, Tables and Financial Statements | 17 | ||||||
Shareholder Meeting | 20 | ||||||
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-1068 or download the file from www.janus.com. Read it carefully before you invest or send money.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
Useful Information About Your Fund Report
Fund Expenses
We believe it's important for our shareholders to have a clear understanding of Fund expenses and the impact they have on investment return.
The following is important information regarding the Fund's Expense Example, which appears on page 2 of this Semiannual Report. Please refer to this information when reviewing the Expense Example for the Fund.
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs 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, 2005 to April 30, 2006.
Actual Expenses
The first line of the table in the 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 the example provides information about hypothetical account values and hypothetical expenses based on 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 agreed to waive one-half of its advisory fee for the 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 Fund's prospectus.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the prospectus. Therefore, the second line of the 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 Institutional Cash Reserves Fund April 30, 2006 1
Janus Institutional Cash Reserves
Fund (unaudited)
For the Periods Ended April 30, 2006 | |||||||
Institutional Shares | |||||||
Fiscal Year-to-Date | 2.16 | % | |||||
1 Year | 3.86 | % | |||||
Since Inception (May 15, 2002) | 2.11 | % | |||||
Seven-Day Current Yield | |||||||
Institutional Shares: | |||||||
With Reimbursement | 4.77 | % | |||||
Without Reimbursement | 4.60 | % |
Data presented represents past performance, which is no guarantee of future results. Call 800.525.1068 or visit www.janus.com for performance current to the most recent month-end.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
Total return includes reinvestment of dividends and distributions.
Portfolio Managers Sharon Pichler
Eric Thorderson
See "Explanations of Charts, Tables and Financial Statements."
The yield more closely reflects the current earnings of Janus Institutional Cash Reserves Fund than the total return.
Janus Capital Management LLC 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. Without such waivers, the Fund's yields and total returns would have been lower.
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 page 1 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (11/1/05-4/30/06)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,021.60 | $ | 0.95 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,023.85 | $ | 0.95 |
*Expenses are equal to the annualized expense ratio of 0.19%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses include the effect of contractual waivers by Janus Capital.
2 Janus Institutional Cash Reserves Fund April 30, 2006
Janus Institutional Cash Reserves Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Principal Amount | Value | ||||||||||
Certificates of Deposit - 16.8% | |||||||||||
Calyon, New York: | |||||||||||
$ | 20,000,000 | 4.00%, 7/19/06 | $ | 19,999,157 | |||||||
19,000,000 | 4.22%, 8/30/06 | 18,998,655 | |||||||||
Mitsubishi Trust and Bank: | |||||||||||
10,000,000 | 4.73%, 5/15/06 | 10,000,000 | |||||||||
20,000,000 | 4.925%, 5/22/06 | 20,000,000 | |||||||||
15,000,000 | 5.03%, 6/26/06 | 15,000,000 | |||||||||
Natexis Banques Populaires, New York: | |||||||||||
10,000,000 | 4.73%, 11/22/06 | 10,000,000 | |||||||||
10,000,000 | 5.00%, 2/5/07 | 10,000,000 | |||||||||
20,000,000 | 5.13%, 2/27/07 | 20,000,000 | |||||||||
Norinchunkin Bank, New York: | |||||||||||
25,000,000 | 4.84%, 5/8/06 | 25,000,000 | |||||||||
5,000,000 | 4.79%, 5/25/06 | 5,000,000 | |||||||||
10,000,000 | 4.96%, 6/9/06 | 10,000,000 | |||||||||
25,000,000 | 5.00%, 6/19/06 | 25,000,000 | |||||||||
25,000,000 | Royal Bank of Scotland, New York 4.175%, 9/22/06 | 25,000,480 | |||||||||
10,000,000 | Shinkin Central Bank 4.75%, 5/8/06 | 10,000,000 | |||||||||
20,000,000 | Skandinaviska Enskilda Bank, New York 5.27%, 4/11/07 | 20,000,919 | |||||||||
20,000,000 | Societe Generale, New York 3.80%, 6/14/06 | 20,000,000 | |||||||||
10,000,000 | Sumitomo Mitsui, New York 4.89%, 5/17/06 | 10,000,000 | |||||||||
Sumitomo Trust and Bank: | |||||||||||
20,000,000 | 4.73%, 5/10/06 | 20,000,000 | |||||||||
15,000,000 | 4.73%, 5/11/06 | 15,000,000 | |||||||||
45,000,000 | Swedbank, New York 4.79%, 12/6/06 | 44,999,999 | |||||||||
22,500,000 | Toronto Dominion Bank, New York 3.75%, 5/11/06 | 22,500,000 | |||||||||
Total Certificates of Deposit (cost $376,499,210) | 376,499,210 | ||||||||||
Commercial Paper - 22.4% | |||||||||||
15,000,000 | Bavaria TRR Corp. 4.94%, 5/24/06 (Section 4(2)) | 14,952,658 | |||||||||
Check Point Charlie, Inc.: | |||||||||||
20,000,000 | 4.64%, 5/2/06 (Section 4(2)) | 19,997,422 | |||||||||
25,000,000 | 4.83%, 5/12/06 (Section 4(2)) | 24,963,104 | |||||||||
16,000,000 | 4.84%, 5/15/06 (Section 4(2)) | 15,969,884 | |||||||||
G Street Finance Corp.: | |||||||||||
15,000,000 | 4.82%, 5/8/06 (144A)§ | 14,985,942 | |||||||||
15,000,000 | 4.93%, 6/9/06 (144A)§ | 14,919,888 | |||||||||
15,000,000 | 4.98%, 7/7/06 (144A)§ | 14,860,975 | |||||||||
14,752,000 | Gotham Funding Corp. 4.82%, 5/11/06 (Section 4(2)) | 14,732,249 | |||||||||
Klio Funding Corp.: | |||||||||||
15,000,000 | 4.66%, 5/9/06 (144A) | 14,984,433 | |||||||||
13,000,000 | 4.67%, 5/12/06 (144A) | 12,981,370 | |||||||||
15,000,000 | 4.90%, 5/22/06 (144A) | 14,957,125 | |||||||||
Klio II Funding Corp.: | |||||||||||
25,408,000 | 4.88%, 5/18/06 (144A) | 25,349,449 | |||||||||
20,000,000 | 4.905%, 5/22/06 (144A) | 19,942,775 | |||||||||
La Fayette Asset Securitization LLC: | |||||||||||
37,417,000 | 4.86%, 5/15/06 (Section 4(2)) | 37,346,282 | |||||||||
12,820,000 | 4.87%, 5/16/06 (Section 4(2)) | 12,793,986 | |||||||||
10,000,000 | 4.965%, 6/15/06 (Section 4(2)) | 9,937,938 | |||||||||
Manhattan Asset Funding Company LLC: | |||||||||||
40,059,000 | 4.83%, 5/11/06 (Section 4(2)) | 40,005,211 | |||||||||
11,900,000 | 4.99%, 6/29/06 (Section 4(2)) | 11,802,681 | |||||||||
15,000,000 | 4.96%, 6/30/06 (Section 4(2)) | 14,876,000 | |||||||||
5,000,000 | Medical Building Funding IV LLC: 5.06%, 5/22/06 | 4,985,242 | |||||||||
PB Finance (Delaware), Inc.: | |||||||||||
14,000,000 | 4.69%, 5/17/06 | 13,970,818 | |||||||||
12,000,000 | 4.935%, 6/12/06 | 11,930,910 |
Principal Amount | Value | ||||||||||
Commercial Paper (continued) | |||||||||||
Rhineland Funding Capital Corp.: | |||||||||||
$ | 9,147,000 | 4.66%, 5/2/06 (Section 4(2)) | $ | 9,145,812 | |||||||
13,000,000 | 4.66%, 5/3/06 (Section 4(2)) | 12,996,634 | |||||||||
12,300,000 | 4.99%, 6/21/06 (Section 4(2)) | 12,213,049 | |||||||||
35,000,000 | 4.97%, 7/3/06 (Section 4(2)) | 34,695,588 | |||||||||
Scaldis Capital LLC: | |||||||||||
5,552,000 | 4.865%, 5/15/06 (Section 4(2)) | 5,541,496 | |||||||||
17,923,000 | 4.875%, 5/17/06 (Section 4(2)) | 17,884,167 | |||||||||
30,101,000 | Victory Receivables Corp. 4.86%, 5/15/06 (Section 4(2)) | 30,044,997 | |||||||||
Total Commercial Paper (cost $503,768,085) | 503,768,085 | ||||||||||
Floating Rate Notes - 17.7% | |||||||||||
25,000,000 | Ares VII CLO, Ltd. Class A-1A, 4.765%, 5/8/15 (144A)§ | 25,000,000 | |||||||||
69,000,000 | Bank of America Securities LLC (same day put), 4.95%, 5/1/06 | 69,000,000 | |||||||||
35,000,000 | EMC Mortgage Corp. (same day put) 4.995%, 5/8/06 | 35,000,000 | |||||||||
30,000,000 | Harrier Finance Funding LLC 4.86125%, 12/15/06 (144A) | 29,992,522 | |||||||||
10,000,000 | HSH Nordbank A.G., New York 4.95%, 6/22/07 (144A) | 10,000,000 | |||||||||
45,000,000 | Lehman Brothers, Inc. (90 day put) 5.025%, 4/5/27ß | 45,000,000 | |||||||||
10,000,000 | Natexis Banques Populaires, New York 4.88125%, 6/15/07 (144A) | 9,998,959 | |||||||||
15,000,000 | Oakhill Secured Funding II Series A-A, 5.78%, 10/16/06 (144A)§ | 15,028,405 | |||||||||
6,595,039 | Park Place Securities Trust, 2004-MM1 AM3 4.99938%, 2/25/35 (144A)§ | 6,595,039 | |||||||||
20,000,000 | Putnam Structured Product Funding 2003-1 LLC, Class A-15 4.92125%, 10/15/38 (144A) | 20,000,000 | |||||||||
24,000,000 | Unicredito Italiano Bank of Ireland 4.85875%, 5/9/07 | 24,000,000 | |||||||||
30,000,000 | Union Hamilton Special 4.93%, 6/21/06 (144A) | 30,000,000 | |||||||||
40,000,000 | Westdeutsche Landesbank A.G., New York 4.88875%, 6/8/07 | 40,000,000 | |||||||||
37,000,000 | Whistlejacket Capital, Ltd. 4.8825%, 11/27/06 (144A) | 36,991,573 | |||||||||
Total Floating Rate Notes (cost $396,606,498) | 396,606,498 | ||||||||||
Repurchase Agreements - 25.4% | |||||||||||
69,000,000 | Citigroup Global Markets, Inc., 5.045% dated 4/28/06, maturing 5/1/06 to be repurchased at $69,029,009 collateralized by $79,496,291 in Credit Enhanced Mortgage Loans 0% - 0.002%, 6/1/28 - 4/12/36 with a value of $78,197,870 | 69,000,000 | |||||||||
69,000,000 | Credit Suisse First Boston LLC, 4.975% dated 4/28/06, maturing 5/1/06 to be repurchased at $69,028,606 collateralized by $1,060,213,256 in Collateralized Mortgage Obligations 0% - 6.669%, 1/25/19 - 1/15/45 with a value of $72,109,409 | 69,000,000 | |||||||||
69,000,000 | Deutsche Bank Securities, Inc., 4.985% dated 4/28/06, maturing 5/1/06 to be repurchased at $69,028,664 collateralized by $120,588,455 in Collateralized Mortgage Obligations 4.338371% - 6.187382%, 6/19/34 - 12/10/41 with a value of $70,380,000 | 69,000,000 | |||||||||
89,000,000 | Fortis Bank N.V., 4.850% dated 4/28/06, maturing 5/1/06 to be repurchased at $89,035,971 collateralized by $111,029,806 in U.S. Government Agencies 5.048% - 7.125%, 2/15/23 - 10/25/35 with a value of $90,780,104 | 89,000,000 |
See Notes to Schedule of Investments and Financial Statements.
Janus Institutional Cash Reserves Fund April 30, 2006 3
Janus Institutional Cash Reserves Fund
Schedule of Investments (unaudited)
As of April 30, 2006
Principal Amount | Value | ||||||||||
Repurchase Agreements (continued) | |||||||||||
$ | 69,000,000 | Goldman Sachs & Co., 4.975% dated 4/28/06, maturing 5/1/06 to be repurchased at $69,028,606 collateralized by $30,739,664 in Certificate of Deposit; 0% 7/21/06 $33,720,569 in Corporate Bonds 0% - 9.50%, 11/15/07 - 8/15/32 with respective values of $30,132,706 and $41,413,313 | $ | 69,000,000 | |||||||
69,000,000 | IXIS Financial Products, Inc., 4.975% dated 4/28/06, maturing 5/1/06 to be repurchased at $69,028,606 collateralized by $77,623,419 in Collateralized Mortgage Obligations 5.991333%, 1/25/36 with a value of $70,409,179 | 69,000,000 | |||||||||
69,000,000 | J.P. Morgan Securities, Inc., 4.985% dated 4/28/06, maturing 5/1/06 to be repurchased at $69,028,664 collateralized by $68,469,000 in Corporate Notes 3.80% - 9.75%, 8/15/06 - 10/15/33 with a value of $72,452,431 | 69,000,000 | |||||||||
69,000,000 | Royal Bank of Canada, 4.945% dated 4/28/06, maturing 5/1/06 to be repurchased at $69,028,434 collateralized by $70,627,335 in Commercial Paper 0% - 4.34%, 5/1/06 - 7/12/06 with a value of $70,380,000 | 69,000,000 | |||||||||
Total Repurchase Agreements (cost $572,000,000) | 572,000,000 | ||||||||||
Short-Term Corporate Notes – 1.3% | |||||||||||
K2 (USA) LLC: | |||||||||||
10,000,000 | 4.645%, 10/30/06 (144A) | 10,000,000 | |||||||||
20,000,000 | 4.835%, 1/23/07 (144A) | 20,000,000 | |||||||||
Total Short-Term Corporate Notes (cost $30,000,000) | 30,000,000 | ||||||||||
Taxable Variable Rate Demand Notes - 11.5% | |||||||||||
1,780,000 | A.E. Realty LLC, Series 2003 5.00%, 10/1/23 | 1,780,000 | |||||||||
8,200,000 | American Health Centers, Inc., Series 2001 5.10%, 3/1/19 | 8,200,000 | |||||||||
16,045,000 | Brooklyn Tabernacle 5.05%, 4/1/24 | 16,045,000 | |||||||||
3,779,800 | Campus Research Corp. 5.11%, 6/1/13 | 3,779,800 | |||||||||
2,200,000 | Capel, Inc. 4.90%, 9/1/09 | 2,200,000 | |||||||||
4,350,000 | Colorado Housing Facilities Revenue (Tenderfoot Seasonal Housing LLC), Series A 5.05%, 7/1/35 | 4,350,000 | |||||||||
6,000,000 | Colorado Natural Gas, Inc., Series 2004 5.05%, 7/1/32 | 6,000,000 | |||||||||
Cornerstone Funding Corp. I: | |||||||||||
3,248,000 | Series 2003B, 5.04%, 2/26/23 | 3,248,000 | |||||||||
9,788,000 | Series 2004D, 5.14%, 1/1/25 | 9,788,000 | |||||||||
13,131,000 | Series 2003J, 5.04%, 1/1/29 | 13,131,000 | |||||||||
5,520,000 | Courtesy Realty LLC, Series 2002 5.10%, 12/1/17 | 5,520,000 | |||||||||
7,935,000 | Crozer-Keystone Health Systems 5.04%, 12/15/21 | 7,935,000 | |||||||||
17,100,000 | Eagle County, Colorado Housing Facility Revenue (BC Housing LLC Project), Series A 5.05%, 5/1/39 | 17,100,000 |
Principal Amount | Value | ||||||||||
Taxable Variable Rate Demand Notes (continued) | |||||||||||
$ | 10,135,000 | Edison Chouest Offshore LLC 5.10%, 2/1/14 | $ | 10,135,000 | |||||||
5,725,000 | Fairfield Christian Church 5.10%, 4/1/22 | 5,725,000 | |||||||||
4,935,000 | H.C. Equities L.P. 4.95%, 12/1/23 | 4,935,000 | |||||||||
4,050,000 | J.D. Parks and Lissa Parks, Series 2002 5.10%, 6/1/22 | 4,050,000 | |||||||||
7,500,000 | Jasper, Morgan, Newton and Walton Counties, Georgia Joint Development Authority Revenue (Industrial Park Project) 4.93%, 12/1/20 | 7,500,000 | |||||||||
4,300,000 | Lowell Family LLC 5.04%, 4/1/30 | 4,300,000 | |||||||||
8,245,000 | Luxor Management Company 5.10%, 4/1/18 | 8,245,000 | |||||||||
7,110,000 | McElroy Metal Mill, Inc., Series 2003 5.10%, 7/1/18 | 7,110,000 | |||||||||
10,195,000 | Mississippi Business Finance Corp. 5.10%, 12/1/22 | 10,195,000 | |||||||||
5,325,000 | Montgomery, Alabama Downtown Development Board of Revenue Improvement Revenue 4.98%, 11/1/18 | 5,325,000 | |||||||||
4,400,000 | Montgomery, Alabama Industrial Development Board of Revenue (Jenkins Brick Co.), Series A 5.05%, 9/1/14 | 4,400,000 | |||||||||
4,590,000 | Ohio Health Care Facility Revenue Bonds (United Church Homes, Inc. Project) Series 2002, 5.04%, 9/1/27 | 4,590,000 | |||||||||
7,820,000 | Orthopedic Institute of Ohio 5.10%, 12/1/11 | 7,820,000 | |||||||||
3,305,000 | Public Building Authority of Irondale, AL 4.98%, 10/2/35 | 3,305,000 | |||||||||
20,000,000 | Pueblo Serra Worship Holdings 5.06%, 3/1/37 | 20,000,000 | |||||||||
13,300,000 | Russell Lands, Inc., Series 2002 5.10%, 8/1/12 | 13,300,000 | |||||||||
5,900,000 | Stone-Lee Partners LLC 4.90%, 3/1/21 | 5,900,000 | |||||||||
6,300,000 | Tennessee Aluminum Processors, Inc. 4.98%, 5/1/14 | 6,300,000 | |||||||||
4,032,000 | TOG Properties LLC 5.10%, 9/1/18 | 4,032,000 | |||||||||
13,000,000 | Village Green Finance Co. 4.90%, 11/1/22 | 13,000,000 | |||||||||
9,545,000 | West Park Apartments and Cedar Pines Apartments, Series 2002 5.01%, 9/1/22 | 9,545,000 | |||||||||
Total Taxable Variable Rate Demand Notes (cost $258,788,800) | 258,788,800 | ||||||||||
Time Deposits - 6.1% | |||||||||||
69,000,000 | Dexia CLF Finance Co., ETD 4.85%, 5/1/06 | 69,000,000 | |||||||||
69,000,000 | ING Financial, ETD 4.86%, 5/1/06 | 69,000,000 | |||||||||
Total Time Deposits (cost $138,000,000) | 138,000,000 | ||||||||||
Total Investments (total cost $2,275,662,593) – 101.2% | 2,275,662,593 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (1.2)% | (27,669,220 | ) | |||||||||
Net Assets – 100% | $ | 2,247,993,373 |
See Notes to Schedule of Investments and Financial Statements.
4 Janus Institutional Cash Reserves Fund April 30, 2006
Statement of Assets and Liabilities
As of April 30, 2006 (unaudited) (all numbers in thousands except net asset value per share) | Janus Institutional Cash Reserves Fund | ||||||
Assets: | |||||||
Investments at amortized cost | $ | 1,703,663 | |||||
Repurchase agreements | 572,000 | ||||||
Receivables: | |||||||
Fund shares sold | 4 | ||||||
Interest | 8,862 | ||||||
Total Assets | 2,284,529 | ||||||
Liabilities: | |||||||
Payables: | |||||||
Due to custodian | 31,773 | ||||||
Dividends and distributions | 4,440 | ||||||
Advisory fees | 177 | ||||||
Administrative services fees | 142 | ||||||
Accrued expenses | 4 | ||||||
Total Liabilities | 36,536 | ||||||
Net Assets | $ | 2,247,993 | |||||
Net Assets Consist of: | |||||||
Capital (par value and paid-in-surplus)* | $ | 2,248,189 | |||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | (196 | ) | |||||
Total Net Assets | $ | 2,247,993 | |||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,248,189 | ||||||
Net Asset Value Per Share | $ | 1.00 |
*See Note 3 in Notes to Financial Statements.
See Notes to Financial Statements.
Janus Institutional Cash Reserves Fund April 30, 2006 5
Statement of Operations
For the six-month period ended April 30, 2006 (unaudited) (all numbers in thousands) | Janus Institutional Cash Reserves Fund | ||||||
Investment Income: | |||||||
Interest | $ | 40,330 | |||||
Total Investment Income | 40,330 | ||||||
Expenses: | |||||||
Advisory fees | 1,778 | ||||||
Professional fees | 15 | ||||||
Non-interested Trustees' fees and expenses | 33 | ||||||
Administrative services fees | 1,333 | ||||||
Non-recurring costs (Note 2) | – | ||||||
Costs assumed by Janus Capital Management LLC (Note 2) | – | ||||||
Total Expenses | 3,159 | ||||||
Less: Excess Expense Reimbursement | (1,511 | ) | |||||
Net Expenses after Expense Reimbursement | 1,648 | ||||||
Net Investment Income/(Loss) | 38,682 | ||||||
Net Realized Gain/(Loss) on Investments: | |||||||
Net realized gain/(loss) from securities transactions | 16 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 38,698 |
See Notes to Financial Statements.
6 Janus Institutional Cash Reserves Fund April 30, 2006
Statements of Changes in Net Assets
For the six-month period ended April 30, 2006 (unaudited) and for the fiscal year ended October 31, 2005 | Janus Institutional Cash Reserves Fund | ||||||||||
(all numbers in thousands) | 2006 | 2005 | |||||||||
Operations: | |||||||||||
Net investment income/(loss) | $ | 38,682 | $ | 41,280 | |||||||
Net realized gain/(loss) from investment transactions | 16 | (212 | ) | ||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 38,698 | 41,068 | |||||||||
Dividends and Distributions to Shareholders: | |||||||||||
Net investment income* | (38,683 | ) | (41,280 | ) | |||||||
Net realized gain from investment transactions* | – | – | |||||||||
Net Decrease from Dividends and Distributions | (38,683 | ) | (41,280 | ) | |||||||
Capital Share Transactions: | |||||||||||
Shares sold | 4,801,028 | 10,077,313 | |||||||||
Reinvested dividends and distributions | 16,858 | 19,417 | |||||||||
Shares repurchased | (4,092,918 | ) | (10,446,726 | ) | |||||||
Net Increase/(Decrease) from Capital Share Transactions | 724,968 | (349,996 | ) | ||||||||
Net Increase/(Decrease) in Net Assets | 724,983 | (350,208 | ) | ||||||||
Net Assets: | |||||||||||
Beginning of period | 1,523,010 | 1,873,218 | |||||||||
End of period | $ | 2,247,993 | $ | 1,523,010 |
*See Note 3 in Notes to Financial Statements.
See Notes to Financial Statements.
Janus Institutional Cash Reserves Fund April 30, 2006 7
Financial Highlights
For a share outstanding during the six-month period ended April 30, 2006 (unaudited) | Janus Institutional Cash Reserves Fund | ||||||||||||||||||||||
and through each fiscal year or period ended October 31 | 2006 | 2005 | 2004 | 2003 | 2002(1) | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income/(loss) | .02 | .03 | .01 | .01 | .01 | ||||||||||||||||||
Net realized gain/(loss) on securities | – | (2) | – | (2) | – | (2) | – | (2) | – | ||||||||||||||
Total from Investment Operations | .02 | .03 | .01 | .01 | .01 | ||||||||||||||||||
Less Distributions: | |||||||||||||||||||||||
Dividends (from net investment income)* | (.02 | ) | (.03 | ) | (.01 | ) | (.01 | ) | (.01 | ) | |||||||||||||
Distributions (from net capital gains)* | – | – | (2) | – | (2) | – | (2) | – | |||||||||||||||
Total Distributions | (.02 | ) | (.03 | ) | (.01 | ) | (.01 | ) | (.01 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total Return** | 2.16 | % | 2.84 | % | 1.20 | % | 1.27 | % | 0.87 | % | |||||||||||||
Net Assets, End of Period (in thousands) | $ | 2,247,993 | $ | 1,523,010 | $ | 1,873,218 | $ | 2,795,864 | $ | 1,792,158 | |||||||||||||
Average Net Assets for the Period (in thousands) | $ | 1,792,244 | $ | 1,494,573 | $ | 2,216,408 | $ | 2,495,376 | $ | 1,262,186 | |||||||||||||
Ratio of Expenses to Average Net Assets***(3) | 0.19 | %(4) | 0.18 | %(4) | 0.18 | %(4) | 0.18 | %(4) | 0.18 | %(4) | |||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.35 | % | 2.76 | % | 1.18 | % | 1.24 | % | 1.86 | % |
* See Note 3 in Notes to Financial Statements.
** Total return not annualized for periods of less than one full year.
*** Annualized for periods less than one full year.
(1) Period May 15, 2002 (inception date) through October 31, 2002.
(2) Net realized gain/(loss) on securities and distributions (from net capital gains) aggregated less than a $.01 on a per share basis for the fiscal year ended.
(3) See "Explanations of Charts, Tables and Financial Statements."
(4) The ratio was 0.36% in 2006 and 0.35% in 2005, 2004, 2003 and 2002, before waiver of certain fees incurred by the Fund.
See Notes to Financial Statements.
8 Janus Institutional Cash Reserves Fund April 30, 2006
Notes to Schedule of Investments (unaudited)
144A | Securities sold under Rule 144A of the Securities Act of 1933 are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. | ||||||
ETD | Euro Time Deposit | ||||||
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. | ||||||
ß | Security is illiquid | ||||||
§ Schedule of Restricted and Illiquid Securities
Acquisition Date | Acquisition Cost | Value | Value as a % of Net Assets | ||||||||||||||||
Janus Institutional Cash Reserves Fund | |||||||||||||||||||
Ares VII CLO, Ltd., Class A-1A 4.765%, 5/8/15 (144A) | 4/23/03 | $ | 25,000,000 | $ | 25,000,000 | 1.1 | % | ||||||||||||
G Street Finance Corp. 4.82%, 5/8/06 (144A) | 4/10/06 | 14,943,765 | 14,985,942 | 0.7 | % | ||||||||||||||
G Street Finance Corp. 4.93%, 6/9/06 (144A) | 4/10/06 | 14,876,745 | 14,919,888 | 0.7 | % | ||||||||||||||
G Street Finance Corp. 4.98%, 7/7/06 (144A) | 4/10/06 | 14,817,390 | 14,860,975 | 0.6 | % | ||||||||||||||
Oakhill Secured Funding II, Series A-A 5.78%, 10/16/06 (144A) | 11/1/05 | 15,058,500 | 15,028,405 | 0.7 | % | ||||||||||||||
Park Place Securities Trust, 2004-MM1 AM3 4.99938%, 2/25/35 (144A) | 11/23/05 | 6,595,039 | 6,595,039 | 0.3 | % | ||||||||||||||
$ | 91,291,439 | $ | 91,390,249 | 4.1 | % |
The Fund has registration rights for certain restricted securities held as of April 30, 2006. The issuer incurs all registration costs.
Variable rate notes are notes for which the interest rate is based on an index or market interest rates and is subject to change. Rates in the security description are as of April 30, 2006.
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 the 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 Institutional Cash Reserves Fund April 30, 2006 9
Notes to Financial Statements (unaudited)
The following section describes the organization and significant accounting policies of Janus Institutional Cash Reserves Fund (the "Fund") and provides more detailed information about the schedules and tables that appear throughout this report. In addition, the Notes to Financial Statements explain how the Fund operates and the methods used in preparing and presenting this report.
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Fund is part of Janus Investment Fund (the "Trust"), which was 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 thirty-two funds. The Fund invests primarily in high-quality money market instruments. The Fund is a no-load investment.
The Fund currently offers the initial class of shares exclusively to institutional and individual clients that meet the minimum investment requirement of $5,000,000.
The following accounting policies have been consistently followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America in the investment company industry.
Investment Valuation
Securities held by the Fund are valued at their market value determined by 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. If management believes that such valuation does not reflect the securities' fair value, these securities may be valued at fair value as determined in good faith under procedures established by the Fund's Trustees. Restricted and illiquid securities are valued in accordance with procedures established by the Fund's Trustees.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). 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
The Fund bears expenses incurred specifically on its behalf as well as a portion of general expenses, which may be allocated pro rata to each of the funds in the Trust.
Interfund Lending
Pursuant to an exemptive order received from the SEC, the Fund may be party to an interfund lending agreement between the Fund and other Janus Capital Management LLC ("Janus Capital") sponsored mutual funds, which permit it 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 a 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, 2006, there were no outstanding borrowing or lending arrangements for the Fund.
When-issued Securities
The Fund 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 Fund is required to hold liquid assets as collateral with the Fund's custodian sufficient to cover the purchase price. As of April 30, 2006, the Fund was not invested in when-issued securities.
Restricted Security Transactions
Restricted securities held by the Fund may not be sold except in exempt transactions or in a public offering registered under the Securities Act of 1933. The risk of investing in such securities is generally greater than the risk of investing in the securities of widely held, publicly traded companies. Lack of a secondary market and resale restrictions may result in the inability of the Fund to sell a security at a fair price and may substantially delay the sale of the security which the Fund seeks to sell. In addition, these securities may exhibit greater price volatility than securities for which secondary markets exist.
Dividend Distributions
Dividends representing substantially all of the Fund's net investment income and any net realized capital gains on sales of securities are declared daily and distributed monthly. The majority of dividends and capital gains distributions from the Fund will be automatically reinvested into additional shares of the Fund, based on 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.
10 Janus Institutional Cash Reserves Fund April 30, 2006
Federal Income Taxes
No provision for income taxes is included in the accompanying financial statements, as the Fund intends to distribute to shareholders all taxable investment income and realized gains and otherwise comply with Subchapter M of the Internal Revenue Code applicable to regulated investment companies.
2. INVESTMENT ADVISORY AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund pays Janus Capital 0.20% of 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 Fund pays Janus Capital an administrative services fee of 0.15%, which Janus Capital agreed to reduce to 0.08% until at least the next annual renewal of the advisory agreement. All other expenses of the Fund except interest and taxes, fees and expenses of Trustees who are not interested persons of Janus Capital, audit fees and extraordinary costs are paid by Janus Capital.
For the six-month period ended April 30, 2005, Janus Capital assumed $14,642 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 Note 5. These non-recurring costs were allocated to all Portfolios, except Janus Research Fund, Janus Triton Fund and the Janus Smart Portfolios based on the Portfolios' respective net assets at July 31, 2004. Additionally, all future non-recurring costs will be allocated to all Portfolios based on the Portfolios' respective net assets at July 31, 2004. These nonrecurring costs and offsetting waiver are shown on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the "Plan") for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts credited to the account. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance to the Plan. No deferred fees were paid to any Trustee under the Plan during the six-month period ended April 30, 2006.
Certain officers of the Fund may also be officers and/or directors of Janus Capital. Such officers receive no compensation from the Fund, except for the Fund's Chief Compliance Officer. Effective January 1, 2006, the Fund began reimbursing the adviser for a portion of the compensation paid to the Chief Compliance Officer of the Fund. $59,577 of total compensation was paid by the funds of the Trust. The Fund's portion is reported as part of "Other Expenses" on the Statement of Operations.
Other funds managed by Janus Capital may invest in the Fund. During the six-month period ended April 30, 2006, the Fund had the following affiliated activity:
Subscriptions | Redemptions | Dividends Paid | Value at 4/30/06 | ||||||||||||||||
Janus Institutional Cash Reserves Fund | |||||||||||||||||||
Janus Fund | $ | 625,000,000 | $ | 620,000,000 | $ | 2,988,404 | $ | 165,000,000 | |||||||||||
Janus Contrarian Fund | 50,000,000 | 50,000,000 | 63,973 | – | |||||||||||||||
Janus Enterprise Fund | 40,000,000 | 40,000,000 | 85,742 | – | |||||||||||||||
Janus Growth and Income Fund | 210,000,000 | 180,000,000 | 342,909 | 30,000,000 | |||||||||||||||
Janus Mercury Fund | 285,000,000 | 205,000,000 | 197,059 | 80,000,000 | |||||||||||||||
Janus Mid Cap Value Fund | 45,000,000 | – | 5,303,007 | 290,000,000 | |||||||||||||||
Janus Olympus Fund | 50,000,000 | – | 25,932 | 50,000,000 | |||||||||||||||
Janus Orion Fund | 50,000,000 | 50,000,000 | 79,918 | – | |||||||||||||||
Janus Small Cap Value Fund | 10,000,000 | 55,000,000 | 2,690,667 | 85,000,000 | |||||||||||||||
Janus Twenty Fund | 310,000,000 | 25,000,000 | 7,533,225 | 485,000,000 | |||||||||||||||
Janus Worldwide Fund | 50,000,000 | 50,000,000 | 32,192 | – | |||||||||||||||
$ | 1,725,000,000 | $ | 1,275,000,000 | $ | 19,343,028 | $ | 1,185,000,000 |
Janus Institutional Cash Reserves Fund April 30, 2006 11
Notes to Financial Statements (unaudited)(continued)
3. FEDERAL INCOME TAX
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains.
For the six-month period ended April 30, 2006
Fund | Federal Tax Cost | ||||||
Janus Institutional Cash Reserves Fund | $ | 2,275,662,593 |
Accumulated capital losses noted below represent net capital loss carryovers, as of October 31, 2005, that may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. The table below shows the expiration dates of the carryovers.
Capital Loss Carryover Expiration Schedule
For the year ended October 31, 2005
Fund | October 31, 2013 | ||||||
Janus Institutional Cash Reserves Fund | $ | (211,778 | ) |
4. CAPITAL SHARE TRANSACTIONS
For the six-month period ended April 30, 2006 (unaudited) | Janus Institutional Cash Reserves Fund | ||||||||||
and the fiscal year ended October 31, 2005 (all numbers in thousands) | 2006 | 2005 | |||||||||
Transactions in Fund Shares | |||||||||||
Shares sold | 4,801,028 | 10,077,313 | |||||||||
Reinvested dividends and distributions | 16,857 | 19,417 | |||||||||
Shares repurchased | (4,092,918 | ) | (10,446,726 | ) | |||||||
Net Increase/(Decrease) in Capital Share Transactions | 724,967 | (349,996 | ) | ||||||||
Shares Outstanding, Beginning of Period | 1,523,222 | 1,873,218 | |||||||||
Shares Outstanding, End of Period | 2,248,189 | 1,523,222 |
12 Janus Institutional Cash Reserves Fund April 30, 2006
5. 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 in that Court that generally include: (i) claims by a putative class of investors in certain Janus funds asserting claims on behalf of the investor class; (ii) derivative claims by investors in certain Janus funds ostensibly on behalf of suc h funds; (iii) claims on behalf of participants in the Janus 401(k) plan; (iv) claims brought on behalf of shareholders of Janus Capital Group Inc. ("JCGI") on a derivative basis against the Board of Directors of JCGI; and (v) claims by a putative class of shareholders of JCGI asserting claims on behalf of the shareholders. 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 (actions (i) and (ii) described 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. The complaint in the 401(k) plan class action (action (iii) described above) was voluntarily dismissed, but was refiled using a new named plaintiff and asserting claims similar to the initial complaint. On February 27, 2006, the court issued an order announcing its intent to dismiss the claims asserted against Janus Capital and its affiliates that were brought on behalf of JCGI's corporate shareholders (action (v) above). As a result of the above events, JCGI, Janus Capital, the Advisory Committee of the Janus 401(k) plan, and the current or former d irectors of JCGI are the remaining defendants in one or more of the actions.
The Attorney General's Office for the State of West Virginia filed a separate market timing related civil action against Janus Capital and several other non-affiliated mutual fund companies, claiming violations under the West Virginia Consumer Credit and Protection Act. The civil action requests certain monetary penalties, among other relief. This action has been removed to federal court and transferred to the Multidistrict Litigation case in the U.S. District Court of Baltimore, Maryland described above. In addition, the Auditor of the State of West Virginia, in his capacity as securities commissioner, has issued an order indicating an intent to initiate administrative proceedings against most of the defendants in the market timing cases (including Janus Capital) and seeking disgorgement and other monetary relief based on similar market timing allegations.
In addition to the "market timing" actions described above, Janus Capital is a defendant in a consolidated lawsuit in the U.S. District Court for the District of Colorado challenging the investment advisory fees charged by Janus Capital to certain Janus funds. The action was filed in 2004 by fund investors asserting breach of fiduciary duty under Section 36(b) of the Investment Company Act of 1940. The plaintiffs seek declaratory and injunctive relief and an unspecified amount of damages.
In 2001, Janus Capital's predecessor was also named as a defendant in a class action suit in the U.S. District Court for the Southern District of New York, alleging that certain underwriting firms and institutional investors violated antitrust laws in connection with initial public offerings. The U.S. District Court dismissed the plaintiff's antitrust claims in November 2003, however, the U.S. Court of Appeals vacated that decision and remanded it for further proceedings.
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 Institutional Cash Reserves Fund April 30, 2006 13
Additional Information (unaudited)
Proxy Voting Polices and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available: (i) without charge, upon request, by calling 1-800-525-3713 (toll free); (ii) on the Fund's website at www.janus.com; and (iii) on the SEC's website at http://www.sec.gov. Additionally, information regarding the Fund's proxy voting record for the most recent twelve month period ended June 30 is also available, free of charge, through www.janus.com and from the SEC's website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Fund files its complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Fund's Form N-Q: (i) is available on the SEC's website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-3713 (toll free).
Approval of Investment Advisory Agreement
Amendments to Advisory Agreements to Conform to Prevailing Industry Practice
On September 20, 2005, the Board of Trustees, including all of the Independent Trustees, voted unanimously to approve an amended Investment Advisory Agreement ("Amended Agreement") for each applicable Fund and authorized the submission of each Amended Agreement to the Fund's shareholders for approval. Shareholders approved the Amended Agreement for their Fund at a special meeting of Shareholders held on December 29, 2005 for Janus Institutional Cash Reserves Fund.
In approving the proposed Amended Agreements, the Trustees considered the recommendations of an independent compliance consultant engaged by Janus Capital regarding the form of each of those agreements and concluded that the proposed changes were consistent with industry practice and would reflect an appropriate delegation of authority to Janus Capital clarifying its investment discretion over the Funds it manages.
In connection with their most recent consideration of the investment advisory agreements for all of the Funds, the Trustees received and reviewed a substantial amount of information provided by Janus Capital and the respective subadvisers for subadvised Funds in response to requests of the Independent Trustees and their counsel. They also received and reviewed a considerable amount of information and analysis provided to the Trustees by an independent fee consultant. Throughout their consideration of the agreements, the Independent Trustees were advised by their independent legal counsel. The Independent Trustees met on two separate occasions with Janus Capital management to consider the agreements, and at each of those meetings they also met separately in executive session with their counsel.
Based on their evaluation of the information provided by Janus Capital, subadvisers, the independent fee consultant, Lipper Inc. ("Lipper"), and other information, the Trustees determined that the overall arrangements between the Funds and Janus Capital were fair and reasonable in light of the nature 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.
In considering the 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 agreements are discussed separately below.
Nature, Extent, and Quality of Services
The Trustees reviewed the nature, extent, and quality of the services of Janus Capital and the subadvisers to the Funds, taking into account the investment objective and strategy of each Fund and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis. 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, and overseeing the activities of other service provider s, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
14 Janus Institutional Cash Reserves Fund April 30, 2006
The Trustees also reviewed the enhanced compliance program of Janus Capital and the actions taken by Janus Capital in response to various legal and regulatory proceedings since the fall of 2003.
The Trustees concluded that the nature, extent, and quality of the services provided by Janus Capital and, if applicable, the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory agreements, that 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 appropriate education and experience, to serve the Funds effectively and had demonstrated its continuing ability to attract and retain well-qualified personnel.
Performance of the Funds
The Trustees considered the short-term and longer term performance of each Fund. They reviewed information comparing each Fund's performance with the performance of comparable funds and peer groups identified by Lipper and with the Fund's benchmark index. They concluded that the performance of most Funds was good to very good. Although the performance of some Funds lagged that of their peers for certain periods, they also concluded that Janus Capital had taken appropriate steps to address the 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 information for other comparable funds as provided by Lipper. They noted that the rate of management (investment advisory and administrative) fees for each Fund, 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 in determining compensation payable to portfolio managers, the very competitive environment for investment management talent and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed Janus Capital's management fees for its separate account clients and for its subadvised funds (for which Janus Capital provides only portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fees for Funds having a similar strategy, the Trustees noted that 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. Moreover, they noted that the spread between the average fees charged to the Funds and the fees that Janus Capital charged to its separate account clients was significantly smaller than the average spread for such fees of o ther advisers, based on publicly available data and research conducted by their independent fee consultant.
The Trustees also considered the profitability to Janus Capital and its affiliates of their relationships with each Fund and found Janus Capital's profitability not to be unreasonable.
Finally, the Trustees considered the financial condition of Janus Capital, which they found to be sound.
The Trustees concluded that the management fees and any other compensation payable by each Fund to Janus Capital and its affiliates, as well as the fees paid by Janus Capital or a Fund to the subadvisers of subadvised Funds, were reasonable in relation to the nature 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 charges to other clients. The Trustees also concluded that the overall expense ratio of each Fund was reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital, the investment performance of the Fund, and the expense limitations agreed to by Janus Capital.
Economies of Scale
The Trustees received and considered information about the potential of Janus Capital to experience economies of scale as the assets of the Funds increase. They noted that, although each Fund (except four Funds that have breakpoints) pays an advisory fee at a fixed rate as a percentage of net assets, without any breakpoints, the management fee paid by each Fund, after any applicable contractual expense limitations, was below the mean management fee rate of the Fund's peer group selected by Lipper. The Trustees also took note that, for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached
Janus Institutional Cash Reserves Fund April 30, 2006 15
Additional Information (unaudited) (continued)
adequate scale. Moreover, as the assets of many of the Funds have declined in the past few years, the Funds have benefited from having advisory fee rates that have remained constant rather than fees with breakpoints and higher fee rates at lower asset levels in which the effective fee rate might have increased as assets declined. The Trustees considered certain Amended Agreements that included a change to the advisory fee to reflect a performance-based structure under which the rate of fee would increase or decrease from the current fixed rate if the Fund outperforms or underperforms its benchmark index over a trailing period. Such a fee structure is likely to increase or decrease Janus Capital's economies of scale, depending on whether the effective rate of the fee is increased or decreased. The Trustees also noted that the Funds share directly in economies of scale through lower charges of third-party service providers based on the combine d scale of all of the Funds. Based on all of the information they reviewed, the Trustees concluded that the fee structure in each of the advisory agreements was reasonable and that the current rates of fees reflect a sharing between Janus Capital and the Fund of economies of scale at the current asset level of the Fund.
Other Benefits to the Adviser
The Trustees also considered benefits that accrue to Janus Capital and its affiliates from their relationship with the Funds. They recognized that affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively. The Trustees also considered Janus Capital's use of commissions paid by most Funds on their portfolio brokerage transactions to obtain proprietary research products and services benefiting the Funds and/or other clients of Janus Capital, as well as Janus Capital's agreement not to use any Fund's portfolio brokerage transactions to obtain third party research through brokers. The Trustees concluded that Janus Capital's use of "soft" commission dollars to obtain proprietary research products and services was consistent with regulatory requirements 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 concluded that Janus Capital benefits from the receipt of proprietary 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 each Fund could attract other business to Janus Capital or its other Funds and that the success of Janus Capital could enhance Janus Capital's ability to serve the Funds. After full consideration of the above factors as well as other factors, the Trustees, including all of the Independent Trustees, concluded that the current Investment Advisory Agreement for each Fund was in the best interest of the Fund and its shareholders. In approving the Amended Agreements, the Independent Trustees also concluded that the Amended Agreement, as proposed, was in the best interest of the Fund and its shareholders.
16 Janus Institutional Cash Reserves Fund April 30, 2006
Explanations of Charts, Tables and
Financial Statements (unaudited)
1. PERFORMANCE OVERVIEWS
Average annual total returns are quoted for the Fund. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of any dividends, distributions and capital gains, 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.
2. SCHEDULE OF INVESTMENTS
Following the performance overview section is the Fund's Schedule of Investments. This schedule reports the industry concentrations and types of securities held in each Fund on the last day of the reporting period. Securities are usually listed by type (commercial paper, demand notes, U.S. Government notes, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. Short-term investments maturing within 60 days are valued at amortized cost, which approximates market value. Short-term investments maturing within 60 days are valued at amortized cost, which approximates market value.
3. STATEMENT OF ASSETS AND LIABILITIES
This statement is often referred to as the "balance sheet." It lists the assets and liabilities of the Fund on the last day of the reporting period.
The Fund's assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on stocks owned and the receivable for Fund shares sold to investors but not yet settled. The Fund's liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid and expenses owed but not yet paid.
The section entitled "Net Assets Consist of" breaks down the components of the Fund's net assets. Because the Fund must distribute substantially all earnings, you'll notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the Fund's net asset value ("NAV") per share on the last day of the reporting period. The NAV is calculated by dividing the Fund's net assets (assets minus liabilities) by the number of shares outstanding.
4. STATEMENT OF OPERATIONS
This statement details the Fund's income, expenses, gains and losses on securities and currency transactions, and appreciation or depreciation of current Fund holdings.
The first section in this statement, entitled "Investment Income," reports the interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees, shareholder servicing expenses, and printing and postage for mailing statements, financial reports and prospectuses.
The last section lists the increase or decrease in the value of securities held in the Fund. The Fund realizes a gain (or loss) when it sells its position in a particular security.
5. STATEMENT OF CHANGES IN NET ASSETS
This statement reports the increase or decrease in the Fund's net assets during the reporting period. Changes in the Fund's net assets are attributable to investment operations, dividends, distributions and capital share transactions. This is important to investors because it shows exactly what caused the Fund's net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund's investment performance. The Fund's net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends in cash, money is taken out of the Fund to pay the distribution. If investors reinvest their dividends, the Fund's net assets will not be affected. If you compare the Fund's "Net Decrease from Dividends and Distributions" to the "Reinvested dividends and distributions," you'll notice that dividend distributions had little effect on the Fund's net assets. This is because the majority of Janus investors reinvest their distributions.
The reinvestment of dividends is included under "Capital Share Transactions." "Capital Shares" refers to the money investors contribute to the Fund through purchases or withdraw via redemptions. The Fund's net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
6. FINANCIAL HIGHLIGHTS
This schedule provides a per-share breakdown of the components that affect the Fund's NAV for current and past reporting periods. Not only does this table provide you with total return, it also reports total distributions, asset size and expense ratios.
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
Janus Institutional Cash Reserves Fund April 30, 2006 17
Explanations of Charts, Tables and
Financial Statements (unaudited) (continued)
and interest income earned on securities held by the Fund. Following is the total of gains/(losses). 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 net assets that were used to cover operating expenses during the period.
The ratio of net investment income/(loss) summarizes the income earned less expenses divided by the average net assets of the Fund during the reporting period. Don't confuse this ratio with the Fund's yield. The net investment income ratio is not a true measure of a Fund's yield because it doesn't take into account the dividends distributed to the Fund's investors.
18 Janus Institutional Cash Reserves Fund April 30, 2006
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Janus Institutional Cash Reserves Fund April 30, 2006 19
Shareholder Meeting (unaudited)
A Special Meeting of Shareholders of the Funds was held on November 22, 2005 and adjourned and reconvened to December 29, 2005 and January 9, 2006. At the meetings, the following matters were voted on and approved by the Shareholders. Each vote reported represents one dollar of net asset value held on the record date of the meeting. The results of the Special Meeting of Shareholders are noted below.
Proposal 1
Elect nine Trustees, including eight "independent" candidates.
Record | Number of Votes | Percentage of Total Outstanding Votes | Percentage of Voted | ||||||||||||||||||||||||||||||||||||||||
Trustees | Date Votes | Affirmative | Withheld | Total | Affirmative | Withheld | Total | Affirmative | Withheld | Total | |||||||||||||||||||||||||||||||||
Jerome S. Contro | 72,431,132,779 | 28,415,846,253 | 806,823,785 | 29,222,670,038 | 39.23 | % | 1.12 | % | 40.35 | % | 97.24 | % | 2.76 | % | 100.00 | % | |||||||||||||||||||||||||||
William F. McCalpin | 72,431,132,779 | 28,431,830,093 | 790,839,945 | 29,222,670,038 | 39.26 | % | 1.09 | % | 40.35 | % | 97.29 | % | 2.71 | % | 100.00 | % | |||||||||||||||||||||||||||
John W. McCarter, Jr. | 72,431,132,779 | 28,410,815,406 | 811,854,632 | 29,222,670,038 | 39.23 | % | 1.12 | % | 40.35 | % | 97.22 | % | 2.78 | % | 100.00 | % | |||||||||||||||||||||||||||
Dennis B. Mullen | 72,431,132,779 | 28,408,140,530 | 814,529,508 | 29,222,670,038 | 39.22 | % | 1.13 | % | 40.35 | % | 97.21 | % | 2.79 | % | 100.00 | % | |||||||||||||||||||||||||||
James T. Rothe | 72,431,132,779 | 28,421,678,938 | 800,991,100 | 29,222,670,038 | 39.24 | % | 1.11 | % | 40.35 | % | 97.26 | % | 2.74 | % | 100.00 | % | |||||||||||||||||||||||||||
William D. Stewart | 72,431,132,779 | 28,426,971,191 | 795,698,847 | 29,222,670,038 | 39.25 | % | 1.10 | % | 40.35 | % | 97.28 | % | 2.72 | % | 100.00 | % | |||||||||||||||||||||||||||
Martin H. Waldinger | 72,431,132,779 | 28,400,077,651 | 822,592,387 | 29,222,670,038 | 39.21 | % | 1.14 | % | 40.35 | % | 97.18 | % | 2.82 | % | 100.00 | % | |||||||||||||||||||||||||||
Linda S. Wolf | 72,431,132,779 | 28,406,316,741 | 816,353,297 | 29,222,670,038 | 39.22 | % | 1.13 | % | 40.35 | % | 97.21 | % | 2.79 | % | 100.00 | % | |||||||||||||||||||||||||||
Thomas H. Bailey | 72,431,132,779 | 28,395,482,070 | 827,141,468 | 29,222,623,538 | 39.21 | % | 1.14 | % | 40.35 | % | 97.17 | % | 2.83 | % | 100.00 | % |
Proposal 3a
To approve certain amendments to the Fund's investment advisory agreement with Janus Capital to conform to prevailing industry practice.
Number of Votes | Percentage of Total Outstanding Votes | Percentage of Voted | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Fund | Record Date Votes | Affirmative | Against | Abstain | Broker Non-Votes | Affirmative | Against | Abstain | Broker Non-Votes | Affirmative | Against | Abstain | Broker Non-Votes | ||||||||||||||||||||||||||||||||||||||||||
Janus Institutional Cash Reserves Fund | 1,409,167,592 | 1,162,702,357 | – | – | 3,126,172 | 82.51 | % | 0.00 | % | 0.00 | % | 0.22 | % | 99.73 | % | 0.00 | % | 0.00 | % | 0.27 | % |
20 Janus Institutional Cash Reserves Fund April 30, 2006
Janus Institutional Cash Reserves Fund April 30, 2006 21
Janus provides access to a wide range of investment disciplines.
Asset Allocation
Janus asset allocation funds 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.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
151 Detroit Street
Denver, CO 80206
1-800-525-3713
Funds distributed by Janus Distributors LLC (6/06)
C-0606-22 103-24-100 06-06
2006 Semiannual Report
Janus Smart Portfolios
Janus Smart Portfolio - Growth
Janus Smart Portfolio - Moderate
Janus Smart Portfolio - Conservative
Look Inside. . .
• Portfolio manager perspective
• Investment strategy behind your fund
• Fund performance, characteristics and holdings
Table of Contents
Janus Smart Portfolios
President and CEO Letter to Shareholders | 1 | ||||||
Portfolio Managers' Commentaries and Schedules of Investments | |||||||
Janus Smart Portfolio - Growth | 6 | ||||||
Janus Smart Portfolio - Moderate | 10 | ||||||
Janus Smart Portfolio - Conservative | 14 | ||||||
Statements of Assets and Liabilities | 18 | ||||||
Statements of Operations | 19 | ||||||
Statements of Changes in Net Assets | 20 | ||||||
Financial Highlights | 21 | ||||||
Notes to Schedules of Investments | 23 | ||||||
Notes to Financial Statements | 24 | ||||||
Additional Information | 36 | ||||||
Explanations of Charts, Tables and Financial Statements | 38 | ||||||
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.
CEO's Letter
Gary Black
President and Chief Executive Officer
Dear Shareholders,
Before offering my perspective on the economy, the markets and the progress we've made at Janus during the six months ended April 30, 2006, I'd like to thank you for your continued confidence and investment in Janus' funds. Your unwavering support is the driving force behind our desire to deliver the strong, consistent fund performance that you've come to expect from Janus.
As you'll read on the following pages, our fund managers continued to deliver excellent performance – for the one-year period ended April 30, 2006, 68% of Janus' retail funds ranked within Lipper's top two quartiles based on total returns. For the five years ended April 30, 2006, 57% of our retail funds earned first- or second-quartile Lipper rankings – up from 30% a year ago. Over the past three years, Janus' U.S. equity funds have gained an average of 21% annually, versus a 12% gain for the Russell 1000® Growth Index and a 15% gain for the S&P 500® Index. (See performance and complete ranking figures on pages 3-4).
Staying Focused on Consistent Performance
While we're pleased to report solid performance across different time periods, our goal is to ensure consistency in our investment returns across different market cycles as well. We employ several tools to help us meet this goal, beginning with detailed research processes that help us single out what we feel are the best investments for our funds. The very talented and experienced individuals at the heart of these processes – our research analysts and portfolio managers – are what distinguish Janus from its asset management peers. Additionally, our robust risk management tools and disciplined buy/sell strategies help in our efforts to deliver consistent performance over full market cycles.
...our goal is to ensure consistency in our investment returns across different market cycles...
We recently appointed Chief Investment Officers to oversee our various investment disciplines. Jonathan Coleman and David Decker oversee our U.S. Growth and Core funds, Jason Yee is responsible for our Global and International funds, and Gibson Smith has oversight of our Fixed-Income and Money Market funds. In their respective roles, these individuals serve as player-coaches with the portfolio managers and analysts who work with them and focus on driving performance of the products they oversee.
Combined, we believe these elements of our research process will help us as we strive to deliver strong fund performance in all market environments.
Corporate Profits Remained Strong
On that note, I'd like to summarize the environment we – and other investors – operated in during the past six months. Stronger-than-expected economic data and growing anticipation of a possible conclusion to monetary tightening by the Federal Reserve drove U.S. equity markets higher during the period. Notwithstanding a sharp spike in energy prices in early 2006 and clear signs of a slowdown in the U.S. housing market, corporate profits continued to grow at a healthy clip and consumer spending remained robust. Financial markets observed a smooth transition in leadership at the Federal Reserve Board after Chairman Alan Greenspan's long tenure, and investors appeared to conclude that incoming Chairman Ben Bernanke would pursue a similar course to that of his predecessor, namely, to contain inflation and promote long-term economic growth. Perhaps the biggest risk, in our opinion, is that the Federal Reserve could increase short-term r ates too aggressively to curb potential inflation, which could cause longer-term growth to stall.
Areas of particular strength in the market included economically sensitive sectors such as financial services, industrials and energy, all of which benefited from continued evidence of strong U.S. economic growth. Overseas markets also delivered healthy returns, with Japan's economic recovery reawakening domestic Japanese investors to the Japanese equity market, and rapid industrialization and growing consumer wealth driving significant gains in emerging equity markets like Brazil, China and India.
Greater Diversification Sought by Investors
It was encouraging to see equity markets worldwide climb higher during the period. And yet, if there's one thing that all investors can consistently count on, it's that there is no consistency in the markets. This year's gains could be next year's losses. With this in mind, more and more investors seem to be making a concerted effort to maintain a
Janus Smart Portfolios April 30, 2006 1
Continued
diversified portfolio. In recognition of this, we launched Janus Smart Portfolios in late December 2005. These Portfolios are geared toward investors who may not have the time to allocate their assets according to their specific goals and risk tolerance.
Janus Smart Portfolios invest in a 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). We believe the unique combination of these two different investment styles, assembled with the view of providing long-term diversification and market opportunity, will be of great benefit to shareholders as they invest toward their goals. And with three different portfolios to choose from – Growth, Moderate and Conservative – investors can choose the level of risk they are willing to take in pursuit of their goals.
A Compelling Case for Growth
In summary, the economic outlook appears positive to us, and we find valuations for U.S. equities attractive. The combination of those two factors continues to make a solid case for growth investing. Although future interest rate increases are becoming less likely, we will continue to closely monitor the actions of the Federal Reserve. Regardless of the macroeconomic climate ahead, we remain dedicated to rewarding your trust and confidence in Janus with strong, consistent fund performance.
Sincerely,
Gary Black
Chief Executive Officer and
Chief Investment Officer
2 Janus Smart Portfolios April 30, 2006
Lipper Rankings
Lipper Rankings – Based on total return as of 4/30/06 | |||||||||||||||||||||||||||||||||||||||||||||||
ONE YEAR | THREE YEAR | FIVE YEAR | TEN YEAR | SINCE INCEPTION | |||||||||||||||||||||||||||||||||||||||||||
LIPPER CATEGORY | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | PERCENTILE RANK (%) | RANK/ TOTAL FUNDS | |||||||||||||||||||||||||||||||||||||
Janus Investment Funds | |||||||||||||||||||||||||||||||||||||||||||||||
(Inception Date) | |||||||||||||||||||||||||||||||||||||||||||||||
Janus Fund (2/70) | Large-Cap Growth Funds | 43 | 296/698 | 48 | 280/590 | 79 | 374/474 | 44 | 72/165 | 5 | 1/19 | ||||||||||||||||||||||||||||||||||||
Janus Enterprise Fund(1) (9/92) | Mid-Cap Growth Funds | 58 | 324/563 | 30 | 134/461 | 72 | 257/357 | 69 | 88/128 | 40 | 20/49 | ||||||||||||||||||||||||||||||||||||
Janus Mercury Fund(1) (5/93) | Large-Cap Growth Funds | 31 | 210/698 | 9 | 53/590 | 65 | 306/474 | 11 | 18/165 | 2 | 1/84 | ||||||||||||||||||||||||||||||||||||
Janus Olympus Fund(1) (12/95) | Multi-Cap Growth Funds | 44 | 186/423 | 53 | 190/359 | 66 | 188/288 | 27 | 25/95 | 15 | 13/88 | ||||||||||||||||||||||||||||||||||||
Janus Orion Fund (6/00) | Multi-Cap Growth Funds | 3 | 11/423 | 1 | 3/359 | 3 | 8/288 | N/A | N/A | 27 | 61/230 | ||||||||||||||||||||||||||||||||||||
Janus Triton Fund (2/05) | Small-Cap Growth Funds | 12 | 59/533 | N/A | N/A | N/A | N/A | N/A | N/A | 3 | 14/520 | ||||||||||||||||||||||||||||||||||||
Janus Twenty Fund* (4/85) | Large-Cap Growth Funds | 6 | 36/698 | 2 | 6/590 | 12 | 56/474 | 2 | 2/165 | 3 | 1/40 | ||||||||||||||||||||||||||||||||||||
Janus Venture Fund* (4/85) | Small-Cap Growth Funds | 59 | 311/533 | 10 | 45/453 | 20 | 70/363 | 38 | 44/117 | 10 | 1/10 | ||||||||||||||||||||||||||||||||||||
Janus Global Life Sciences Fund (12/98) | Health/Biotechnology Funds | 33 | 57/176 | 25 | 39/161 | 43 | 55/127 | N/A | N/A | 31 | 15/48 | ||||||||||||||||||||||||||||||||||||
Janus Global Technology Fund (12/98) | Science & Technology Funds | 33 | 94/292 | 43 | 113/265 | 58 | 132/230 | N/A | N/A | 23 | 17/76 | ||||||||||||||||||||||||||||||||||||
Janus Balanced Fund(1) (9/92) | Mixed-Asset Target Allocation Moderate Funds | 13 | 49/395 | 52 | 140/271 | 39 | 81/210 | 3 | 2/81 | 4 | 1/27 | ||||||||||||||||||||||||||||||||||||
Janus Contrarian Fund (2/00) | Multi-Cap Core Funds | 1 | 3/834 | 1 | 3/588 | 3 | 11/421 | N/A | N/A | 9 | 29/332 | ||||||||||||||||||||||||||||||||||||
Janus Core Equity Fund(1) (6/96) | Large-Cap Core Funds | 2 | 9/864 | 3 | 20/746 | 3 | 16/618 | N/A | N/A | 2 | 3/248 | ||||||||||||||||||||||||||||||||||||
Janus Growth and Income Fund(1) (5/91) | Large-Cap Core Funds | 5 | 35/864 | 9 | 65/746 | 15 | 90/618 | 3 | 5/240 | 6 | 5/96 | ||||||||||||||||||||||||||||||||||||
Janus Research Fund (2/05) | Multi-Cap Growth Funds | 8 | 31/423 | N/A | N/A | N/A | N/A | N/A | N/A | 7 | 26/410 | ||||||||||||||||||||||||||||||||||||
INTECH Risk-Managed Stock Fund (2/03) | Multi-Cap Core Funds | 58 | 483/834 | 22 | 129/588 | N/A | N/A | N/A | N/A | 26 | 150/586 | ||||||||||||||||||||||||||||||||||||
Janus Mid Cap Value Fund - Inv(1)(2) (8/98) | Mid-Cap Value Funds | 75 | 201/267 | 53 | 114/216 | 35 | 51/146 | N/A | N/A | 5 | 4/81 | ||||||||||||||||||||||||||||||||||||
Janus Small Cap Value Fund - Inv*(2) (10/87) | Small-Cap Core Funds | 97 | 612/633 | 91 | 456/504 | 65 | 243/373 | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||||
Janus Federal Tax-Exempt Fund (5/93) | General Municipal Debt Funds | 60 | 155/260 | 89 | 221/249 | 71 | 156/221 | 86 | 122/142 | 83 | 64/77 | ||||||||||||||||||||||||||||||||||||
Janus Flexible Bond Fund(1) (7/87) | Intermediate Investment Grade Debt Funds | 37 | 172/473 | 36 | 146/406 | 24 | 74/320 | 24 | 35/147 | 24 | 6/25 | ||||||||||||||||||||||||||||||||||||
Janus High-Yield Fund (12/95) | High Current Yield Funds | 38 | 164/439 | 72 | 276/385 | 55 | 169/311 | 9 | 10/111 | 3 | 3/104 | ||||||||||||||||||||||||||||||||||||
Janus Short-Term Bond Fund(1) (9/92) | Short Investment Grade Debt Funds | 30 | 68/228 | 21 | 38/181 | 49 | 63/129 | 20 | 13/66 | 43 | 11/25 | ||||||||||||||||||||||||||||||||||||
Janus Global Opportunities Fund(1) (6/01) | Global Funds | 100 | 360/362 | 54 | 154/286 | N/A | N/A | N/A | N/A | 23 | 50/224 | ||||||||||||||||||||||||||||||||||||
Janus Overseas Fund(1) (5/94) | International Funds | 1 | 2/910 | 1 | 2/770 | 19 | 114/599 | 4 | 8/230 | 2 | 2/120 | ||||||||||||||||||||||||||||||||||||
Janus Worldwide Fund(1) (5/91) | Global Funds | 94 | 339/362 | 98 | 279/286 | 99 | 217/220 | 68 | 56/82 | 28 | 5/17 |
(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.
Data presented represents past performance, which is no guarantee of future results.
There is no assurance that the investment process will consistently lead to successful investing.
Lipper Inc. - A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
Janus Smart Portfolios April 30, 2006 3
Performance
Average Annual Total Return for the periods ended 4/30/06 | |||||||||||||||||||||||
ONE YEAR | THREE YEAR | FIVE YEAR | 10 YEAR | SINCE INCEPTION | |||||||||||||||||||
Fund/Index | |||||||||||||||||||||||
(Inception Date) | |||||||||||||||||||||||
Janus Fund (2/70) | 17.28 | % | 11.85 | % | (2.62 | )% | 6.67 | % | 13.86 | % | |||||||||||||
Janus Contrarian Fund(1)(2)(3) (2/00) | 38.81 | % | 31.63 | % | 10.68 | % | N/A | 9.63 | % | ||||||||||||||
Janus Core Equity Fund(3) (6/96) | 31.00 | % | 19.14 | % | 5.74 | % | N/A | 13.43 | % | ||||||||||||||
Janus Enterprise Fund (9/92) | 29.21 | % | 22.74 | % | 1.87 | % | 6.69 | % | 11.63 | % | |||||||||||||
Janus Growth and Income Fund (5/91) | 25.82 | % | 16.82 | % | 3.44 | % | 12.02 | % | 13.80 | % | |||||||||||||
Janus Mercury Fund (5/93) | 19.00 | % | 15.42 | % | (1.74 | )% | 8.56 | % | 12.70 | % | |||||||||||||
Janus Mid Cap Value Fund - Investor Shares(3)(4) (8/98) | 20.64 | % | 23.27 | % | 12.45 | % | N/A | 17.97 | % | ||||||||||||||
Janus Olympus Fund (12/95) | 26.44 | % | 16.83 | % | 0.45 | % | 9.78 | % | 11.77 | % | |||||||||||||
Janus Orion Fund(1)(5)(6)(7) (6/00) | 41.50 | % | 27.95 | % | 10.72 | % | N/A | (0.73 | )% | ||||||||||||||
Janus Small Cap Value Fund - Investor Shares* (10/87) | 20.30 | % | 20.76 | % | 10.80 | % | 15.60 | % | N/A | ||||||||||||||
Janus Twenty Fund*(4)(6) (4/85) | 24.20 | % | 19.02 | % | 2.05 | % | 10.70 | % | 13.48 | % | |||||||||||||
Janus Venture Fund*(8) (4/85) | 32.58 | % | 27.53 | % | 9.14 | % | 9.29 | % | 13.88 | % | |||||||||||||
INTECH Risk-Managed Stock Fund(3) (2/03) | 17.81 | % | 19.16 | % | N/A | N/A | 20.50 | % | |||||||||||||||
S&P 500® Index | 15.42 | % | 14.68 | % | 2.70 | % | 8.94 | % | N/A | ||||||||||||||
Russell 1000® Growth Index | 15.18 | % | 12.05 | % | (0.76 | )% | 6.21 | % | N/A |
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 average performance of Janus' U.S. equity funds over the past three years was calculated using the three-year total returns of the 13 funds contained in the performance chart above. The 13 funds reflected in the performance chart above are those which Janus categorizes as U.S. equity funds and which have performance histories of three or more years.
*Closed to new investors
(1)This Fund may have significant exposure to emerging markets. In general, emerging market investments have historically been subject to significant gains and/or losses. As such, the Fund's returns and NAV may be subject to such volatility.
(2)The Fund has experienced significant gains due, in part, to its investments in India. 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 India.
(3)The Fund will invest at least 80% of its net assets in the type of securities described by its name.
(4)Due to certain investment strategies, the Fund may have an increased position in cash.
(5)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.
(6)Returns have sustained significant gains due to market volatility in the healthcare sector.
(7)Returns have sustained significant gains due to market volatility in the financials sector.
(8)This Fund has been significantly impacted, either positively or negatively, by investing in initial public offerings (IPOs).
Total return includes reinvestment of dividends, distributions and capital gains.
A fund's performance may be affected by risks that include those associated with non-diversification, investments in foreign securities and emerging markets, non-investment grade debt securities, undervalued or overlooked companies, companies with relatively small market capitalizations and investments in specific industries or countries. Please see a Janus prospectus or janus.com for more information about fund holdings and details.
The proprietary mathematical process used by Enhanced Investment Technologies LLC ("INTECH") may not achieve the desired results. Since the portfolio is regularly 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.
There is no assurance that the investment process will consistently lead to successful investing.
Returns shown for Janus Mid Cap Value Fund prior to 4/21/03 are those of Berger Mid Cap Value Fund.
Returns shown for Janus Small Cap Value Fund prior to 4/21/03 are those of Berger Small Cap Value Fund.
Effective 2/1/06, Blaine Rollins is no longer the portfolio manager of Janus Fund, and David Corkins is now the Fund manager.
Effective 2/1/06, David Corkins is no longer the portfolio manager of Janus Mercury Fund. A research team now selects the investments for Janus Mercury Fund led by the Director of Research, Jim Goff.
Effective 2/28/06, Janus Risk-Managed Stock Fund changed its name to INTECH Risk-Managed Stock Fund.
Janus Capital Group Inc. has a 30% ownership stake in the investment advisory business of Perkins, Wolf, McDonnell and Company, LLC.
INTECH is a subsidiary of Janus Capital Group Inc.
A Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
The S&P 500® Index is the Standard & Poor's composite index of 500 stocks, a widely recognized, unmanaged index of common stock prices.
The Russell 1000® Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.
4 Janus Smart Portfolios April 30, 2006
Useful Information About Your Fund Report
Portfolio Manager Commentaries
The portfolio manager commentaries in this report include valuable insight from the portfolio managers 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 portfolio managers in their commentaries are just that: opinions. They are a reflection of the their best judgment at the time this report was compiled, which was April 30, 2006. As the investing environment changes, so could their 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 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 Portfolio Manager 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 on an investment of $1,000 invested at the beginning of the period and held for the period from December 30, 2005 to April 30, 2006.
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 the 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 on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses. This 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, taxes and extraordinary expenses to certain limits until at least March 1, 2007. 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 Portfolios' prospectus.
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). 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 Smart Portfolios April 30, 2006 5
Janus Smart Portfolio – Growth (unaudited)
Ticker: JSPGX
Fund 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
portfolio manager
Performance Overview
Janus Smart Portfolio – Growth has gained 9.30% since its inception on December 30, 2005 through April 30, 2006 and outpaced its primary benchmark, the S&P 500® Index, which returned 5.61% for the period. The Portfolio also beat its secondary benchmark, the internally-calculated Growth Allocation Index, which returned 7.72%. The Growth Allocation Index is comprised of a 50% weighting in the Dow Jones Wilshire 5000 Index, a 25% weighting in the Morgan Stanley Capital International (MSCI) EAFE® Index, a 20% weighting in the Lehman Brothers Aggregate Bond Index, and a 5% weighting in the MSCI Emerging Markets Free (EMF) IndexSM. These results are consistent with the Portfolio's objective, which is to provide exposure to both stocks and bonds with a clear emphasis on growth of capital.
Investment Process
Janus Smart Portfolio – Growth is structured as a "fund of funds" portfolio that provides investors with broad, diversified exposure to various types of investments with 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. We believe that combining these two 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 all of the possible investment instruments in conjunction with an outside consultant, establishing an ideal "model" portfolio based on the specific risk/return objective of Janus Smart Portfolio – Growth, and then selecting the appropriate Janus and INTECH funds, which replicate our desired exposure.
Under normal market conditions, a broadly diversified portfolio attempts to buffer the risk an all-stock portfolio might ordinarily bear. The allocations we choose are consistent with our view of both current 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, the model Portfolio's exposure may change as well as the underlying funds used to achieve the desired results.
To achieve the desired asset allocation targets, we invested in the following Funds as of the end of the period:
Janus Smart Portfolio – Growth (% of Net Assets)
Janus Overseas Fund | 26.7 | % | |||||
Janus Flexible Bond Fund | 14.4 | % | |||||
Janus Adviser INTECH Risk-Managed Value Fund | 12.4 | % | |||||
Janus Adviser INTECH Risk-Managed Growth Fund | 12.1 | % | |||||
Janus Mercury Fund | 9.9 | % | |||||
Janus Growth and Income Fund | 9.8 | % | |||||
Janus Twenty Fund | 9.8 | % | |||||
Janus High-Yield Fund | 4.9 | % |
Notably, we made one change during the period. In April, we traded our position in Janus Research Fund for a position in Janus Mercury Fund. This change was made in recognition of Janus Mercury Fund's switch to a team-based portfolio management process that is consistent with our objectives in managing the Janus Smart Portfolios. It is in no way a reflection of the performance of Janus Research Fund, which has been an outstanding contributor to the Portfolio's results.
Individual Performers and Detractors
As you might expect, the Portfolio's returns reflected some of the market's broader themes during the period. For example, bond investors showed a clear preference for riskier bonds that have greater sensitivity to the overall health of the economy
6 Janus Smart Portfolios April 30, 2006
(unaudited)
than they do to the overall direction of interest rates. Accordingly, our investment in Janus High-Yield Fund – which invests in these types of higher-yielding bonds – outperformed our investment in Janus Flexible Bond Fund, which is relatively more sensitive to a rising rate environment.
The equity portion of the Portfolio also mirrored broader market trends. For example, international stocks continued to outshine domestic stocks as they have done for several years running. In particular, stocks in emerging markets such as Brazil and India have performed particularly well. Our investment in Janus Overseas Fund, which was the Portfolio's largest single holding during the period, gained substantially in part due to its exposure to emerging markets equities.
Elsewhere, the market's continued preference for smaller stocks relative to their larger-cap peers showed up in the relative outperformance of Janus Research Fund, which tends to invest a greater portion of its assets in smaller stocks than our other holdings. While our investments in larger-cap holdings like Janus Growth and Income Fund and Janus Twenty Fund performed well during the period, Janus Research Fund was among our best performing positions during the period. As noted above, we have since swapped our exposure in Janus Research Fund for a similar position in Janus Mercury Fund.
Finally, investors have continued to favor large-cap value-oriented stocks at the expense of large-cap growth stocks. That trend was visible in the outperformance of Janus Adviser INTECH Risk-Managed Value Fund over its close mathematical cousin, Janus Adviser INTECH Risk-Managed Growth Fund. By maintaining similar exposures to each of these funds, we expect to participate equally, whether investors continue to prefer large-cap value stocks or if – as some investors expect – the pendulum ultimately swings back toward large-cap growth stocks.
Investment Strategy and Outlook
If there is a theme to this letter, it is simply that investors favor different asset classes (and investment styles) at different points in the market cycle. Our objective is to provide exposure to as broad a range of investments as possible in the hope that doing so will allow us to participate in market gains no matter what the current "flavor of the day" is and to provide a smoother, more stable ride in the process.
Thank you for your investment in Janus Smart Portfolio – Growth.
Janus Smart Portfolio – Growth At a Glance
Asset Allocation – (% of Net Assets) | |||
As of April 30, 2006 | |||
![]() | |||
Janus Smart Portfolios April 30, 2006 7
Janus Smart Portfolio – Growth (unaudited)
Performance
Cumulative Total Return – for the period ended April 30, 2006
Since Inception* | |||||||
Janus Smart Portfolio - Growth | 9.30 | % | |||||
S&P 500® Index | 5.61 | % | |||||
Growth Allocation Index | 7.72 | % |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes reinvestment of dividends, distributions and 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.
A portfolio's performance for very short time periods may not be indicative of future performance.
*The Portfolio's inception date – December 30, 2005
See "Explanations of Charts, Tables and Financial Statements."
The Portfolio's holdings may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
There is no assurance that the investment process will consistently lead to successful investing.
Janus Capital Management LLC has contractually agreed to waive the Portfolio's total operating expenses to levels indicated in the prospectus until at least March 1, 2007. Total returns shown include fee waivers, if any, and without such waivers, total return would have been lower.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (12/30/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (12/30/05-4/30/06) | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,093.00 | $ | 0.84 | * | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,023.60 | $ | 1.20 | ** |
*Expenses paid reflect only the inception period (December 30, 2005 to April 30, 2006). Therefore, expenses shown are lower than would be expected for a six-month period. Expenses for the six-month period will be reflected in future reports. Expenses are equal to the annualized expense ratio of 0.24% multiplied by the average account value over the period, multiplied by 122/365 (to reflect the inception period). Expenses may include the effect of contractual waivers by Janus Capital.
**Expenses are equal to the annualized expense ratio of 0.24% multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital.
8 Janus Smart Portfolios April 30, 2006
Janus Smart Portfolio – Growth
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Mutual Funds(1) - 100% | |||||||||||
Equity Funds - 80.7% | |||||||||||
305,429 | Janus Adviser INTECH Risk-Managed Growth Fund - I Shares | $ | 4,095,806 | ||||||||
393,064 | Janus Adviser INTECH Risk-Managed Value Fund - I Shares | 4,209,713 | |||||||||
86,590 | Janus Growth and Income Fund | 3,331,129 | |||||||||
141,146 | Janus Mercury Fund | 3,371,974 | |||||||||
227,670 | Janus Overseas Fund | 9,047,607 | |||||||||
65,234 | Janus Twenty Fund | 3,332,134 | |||||||||
27,388,363 | |||||||||||
Fixed-Income Funds - 19.3% | |||||||||||
526,637 | Janus Flexible Bond Fund | 4,876,656 | |||||||||
172,803 | Janus High-Yield Fund | 1,667,550 | |||||||||
6,544,206 | |||||||||||
Total Investments (total cost $32,867,256) – 100% | 33,932,569 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0)% | (11,132 | ) | |||||||||
Net Assets – 100% | $ | 33,921,437 |
(1) The Portfolio may invest 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, 2006 9
Janus Smart Portfolio – Moderate (unaudited)
Ticker: JSPMX
Fund 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
portfolio manager
Performance Overview
Janus Smart Portfolio – Moderate has gained 6.70% since its inception on December 30, 2005 through April 30, 2006 and outpaced its primary benchmark, the S&P 500® Index, which returned 5.61% for the period. The Portfolio also beat its secondary benchmark, the internally-calculated Moderate Allocation Index, which returned 5.26%. The Moderate Allocation Index is comprised of a 40% weighting in the Dow Jones Wilshire 5000 Index, a 40% weighting in the Lehman Brothers Aggregate Bond Index, and 18% weighting in the Morgan Stanley Capital International (MSCI) EAFE® Index, and a 2% weighting in the MSCI Emerging Markets Free (EMF) IndexSM. These results are consistent with the Portfolio's objective, which is to provide balanced exposure to both stocks and bonds.
Investment Process
Janus Smart Portfolio – Moderate is structured as a "fund of funds" portfolio that provides investors with broad, diversified exposure to various types of investments with an emphasis on modest growth. Our investment process involves setting return expectations for all of the possible investment instruments in conjunction with an outside consultant, establishing an ideal "model" portfolio based on the specific risk/return objective of Janus Smart Portfolio - Moderate, and then selecting the appropriate Janus and INTECH funds, which replicate our desired exposure.
Under normal market conditions, a broadly diversified portfolio attempts to buffer the risk an all-stock portfolio might ordinarily bear. The allocations we choose are consistent with our view of both current 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, the model Portfolio's exposure may change as well as the underlying funds used to achieve the desired results.
To achieve the desired asset allocation targets, we invested in the following Funds as of the end of the period:
Janus Smart Portfolio – Moderate (% of Net Assets)
Janus Flexible Bond Fund | 29.1 | % | |||||
Janus Overseas Fund | 18.3 | % | |||||
Janus Growth and Income Fund | 12.9 | % | |||||
Janus Adviser INTECH Risk-Managed Value Fund | 10.1 | % | |||||
Janus Adviser INTECH Risk-Managed Growth Fund | 9.8 | % | |||||
Janus Mercury Fund | 5.0 | % | |||||
Janus Twenty Fund | 5.0 | % | |||||
Janus High-Yield Fund | 5.0 | % | |||||
Janus Short-Term Bond Fund | 4.9 | % |
Notably, we made one change during the period. In April, we traded our position in Janus Research Fund for a position in Janus Mercury Fund. This change was made in recognition of Janus Mercury Fund's switch to a team-based portfolio management process that is consistent with our objectives in managing the Janus Smart Portfolios. It is in no way a reflection of the performance of Janus Research Fund, which has been an outstanding contributor to the Portfolio's results.
Individual Performers and Detractors
As you might expect, the Portfolio's returns reflected some of the market's broader themes during the period. For example, bond investors showed a clear preference for riskier bonds that have greater sensitivity to the overall health of the economy than they do to the direction of interest rates. Accordingly, our investment in Janus High-Yield Fund – which invests in these types of higher-yielding bonds – performed well. Meanwhile, the rising interest rate environment worked against both Janus Flexible Bond Fund and Janus Short-Term Bond Fund, something wholly consistent with these Funds' sensitivity to rising interest rates. Janus Short-Term Bond Fund held up better than Janus Flexible Bond Fund given its shorter duration, which tends to provide insulation against rising interest rates.
The equity portion of the Portfolio also mirrored broad market trends. For example, international stocks continued to outshine domestic stocks, as they have done for several years running. In particular, stocks domiciled in emerging markets such as Brazil and India have done especially well. Our investment in Janus Overseas Fund, which was one of the Portfolio's largest holdings during the period, gained
10 Janus Smart Portfolios April 30, 2006
(unaudited)
substantially, due in part to its exposure to emerging market equities.
Elsewhere, the market's continued preference for smaller stocks relative to their larger-cap peers showed up in the relative outperformance of Janus Research Fund, which tends to invest a greater portion of its assets in smaller stocks than our other holdings. While our investments in larger-cap holdings like Janus Growth and Income Fund and Janus Twenty Fund performed well during the period, Janus Research Fund was among our best performing positions during the period. As noted above, we have since swapped our exposure in Janus Research Fund for a similar position in Janus Mercury Fund.
Finally, investors have continued to favor large-cap value-oriented stocks at the expense of large-cap growth stocks. That trend was visible in the outperformance of Janus Adviser INTECH Risk-Managed Value Fund over its close mathematical cousin, Janus Adviser INTECH Risk-Managed Growth Fund. By maintaining similar exposures to each of these funds, we hope to participate equally, whether investors continue to prefer large-cap value stocks or if – as some investors expect – the pendulum ultimately swings back toward large-cap growth stocks.
Investment Strategy and Outlook
If there is a theme to this letter, it is simply that investors favor different asset classes (and investment styles) at different points in the market cycle. Our objective is to provide exposure to as broad a range of investments as possible in the hope that doing so will allow us to participate in market gains no matter what the current "flavor of the day" is and to provide a smoother, more stable ride in the process.
Thank you for your investment in Janus Smart Portfolio – Moderate.
Janus Smart Portfolio – Moderate At a Glance
Asset Allocation – (% of Net Assets) | |||
As of April 30, 2006 | |||
![]() | |||
*Includes cash and cash equivalents of (0.1)%. | |||
Janus Smart Portfolios April 30, 2006 11
Janus Smart Portfolio – Moderate (unaudited)
Performance
Cumulative Total Return – for the period ended April 30, 2006
Since Inception* | |||||||
Janus Smart Portfolio - Moderate | 6.70 | % | |||||
S&P 500® Index | 5.61 | % | |||||
Moderate Allocation Index | 5.26 | % |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes reinvestment of dividends, distributions and 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.
A portfolio's performance for very short time periods may not be indicative of future performance.
* The Portfolio's inception date – December 30, 2005
See "Explanations of Charts, Tables and Financial Statements."
The Portfolio's holdings may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
There is no assurance that the investment process will consistently lead to successful investing.
Janus Capital Management LLC has contractually agreed to waive the Portfolio's total operating expenses to levels indicated in the prospectus until at least March 1, 2007. Total returns shown include fee waivers, if any, and without such waivers, total return would have been lower.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (12/30/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (12/30/05-4/30/06) | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,067.00 | $ | 0.69 | * | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,023.80 | $ | 1.00 | ** |
*Expenses paid reflect only the inception period (December 30, 2005 to April 30, 2006). Therefore, expenses shown are lower than would be expected for a six-month period. Expenses for the six-month period will be reflected in future reports. Expenses are equal to the annualized expense ratio of 0.20% multiplied by the average account value over the period, multiplied by 122/365 (to reflect the inception period). Expenses may include the effect of contractual waivers by Janus Capital.
**Expenses are equal to the annualized expense ratio of 0.20% multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital.
12 Janus Smart Portfolios April 30, 2006
Janus Smart Portfolio – Moderate
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Mutual Funds(1) - 100.1% | |||||||||||
Equity Funds - 61.1% | |||||||||||
170,734 | Janus Adviser INTECH Risk-Managed Growth Fund - I Shares | $ | 2,289,538 | ||||||||
219,704 | Janus Adviser INTECH Risk-Managed Value Fund - I Shares | 2,353,032 | |||||||||
78,606 | Janus Growth and Income Fund | 3,023,967 | |||||||||
49,245 | Janus Mercury Fund | 1,176,452 | |||||||||
107,904 | Janus Overseas Fund | 4,288,115 | |||||||||
22,790 | Janus Twenty Fund | 1,164,122 | |||||||||
14,295,226 | |||||||||||
Fixed-Income Funds - 39.0% | |||||||||||
736,390 | Janus Flexible Bond Fund | 6,818,968 | |||||||||
120,750 | Janus High-Yield Fund | 1,165,233 | |||||||||
401,003 | Janus Short-Term Bond Fund | 1,150,880 | |||||||||
9,135,081 | |||||||||||
Total Investments (total cost $22,977,210) – 100.1% | 23,430,307 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.1)% | (18,260 | ) | |||||||||
Net Assets – 100% | $ | 23,412,047 |
(1) The Portfolio may invest 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, 2006 13
Janus Smart Portfolio – Conservative (unaudited)
Ticker: JSPCX
Fund 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
portfolio manager
Performance Overview
Janus Smart Portfolio – Conservative has gained 4.40% since its inception on December 30, 2005 through April 30, 2006 and slightly underperformed the primary benchmark, the S&P 500® Index, which returned 5.61% for the same period. The Portfolio beat a 3.04% return by its secondary benchmark, the internally-calculated Conservative Allocation Index. The Conservative Allocation Index is comprised of a 60% weighting in the Lehman Brothers Aggregate Bond Index, a 28% weighting in the Dow Jones Wilshire 5000 Index, and a 12% weighting in the Morgan Stanley Capital International EAFE® Index. These results are consistent with the Portfolio's objective, which is to provide exposure to both stocks and bonds while emphasizing the downside protection typically offered by fixed-income securities.
Investment Process
Janus Smart Portfolio – Conservative is structured as a "fund of funds" portfolio that provides investors with broad, diversified exposure to various types of investments with an emphasis on controlling risk. 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. We believe that combining these two 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 all of the possible investment instruments in conjunction with an outside consultant, establishing an ideal "model" portfolio based on the specific risk/return objective of the Janus Smart Portfolio – Conservative, and then selecting the appropriate Janus and INTECH funds, which replicate our desired exposure.
The allocations we choose are consistent with our view of both current 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, the model Portfolio's exposure may change as well as the underlying funds used to achieve the desired results.
To achieve the desired asset allocation targets, we invested in the following Funds as of the end of the period:
Janus Smart Portfolio – Conservative (% of Net Assets)
Janus Flexible Bond Fund | 44.0 | % | |||||
Janus Overseas Fund | 10.9 | % | |||||
Janus Short-Term Bond Fund | 9.9 | % | |||||
Janus Adviser INTECH Risk-Managed Value Fund | 7.6 | % | |||||
Janus Adviser INTECH Risk-Managed Growth Fund | 7.4 | % | |||||
Janus Contrarian Fund | 5.2 | % | |||||
Janus Mercury Fund | 5.1 | % | |||||
Janus Growth and Income Fund | 5.0 | % | |||||
Janus High-Yield Fund | 5.0 | % |
Notably, we made one change during the period. In April, we traded our position in Janus Research Fund for a position in Janus Mercury Fund. This change was made in recognition of Janus Mercury Fund's switch to a team-based portfolio management process that is consistent with our objectives in managing Janus Smart Portfolios. It is in no way a reflection of the performance of Janus Research Fund, which has been an outstanding contributor to the Portfolio's results.
Individual Performers and Detractors
As you might expect, the Portfolio's returns reflected some of the market's broader themes during the period. For example,
14 Janus Smart Portfolios April 30, 2006
(unaudited)
bond investors showed a clear preference for riskier bonds that have greater sensitivity to the overall health of the economy than they do to the direction of interest rates. Accordingly, our investment in Janus High-Yield Fund – which invests in these types of higher-yielding bonds – performed well. Meanwhile, the rising rate environment worked against both Janus Flexible Bond Fund and Janus Short-Term Bond Fund, something wholly consistent with these Funds' sensitivity to rising interest rates. Rising interest rates typically cause bond prices to fall, and prices of bonds with longer maturities tend to be more sensitive to changes in interest rates than bonds with shorter maturities. Therefore, Janus Short Term Bond Fund was slightly more insulated from the rising interest rate environment than Janus Flexible Bond Fund.
The equity portion of the Portfolio also mirrored broader market trends. For example, international stocks continued to outshine domestic stocks as they have done for several years running. In particular, stocks domiciled in emerging markets such as Brazil and India have been among the best performers. Our investment in Janus Overseas Fund, which was the Portfolio's largest equity holding during the period, gained substantially in part due to its exposure to these rapidly growing regions. Similarly, we benefited from our investment in Janus Contrarian Fund, which held a sizable portion of its assets in companies located outside the United States.
Elsewhere, the market's continued preference for smaller stocks relative to their larger-cap peers showed up in the relative outperformance of Janus Research Fund, which tends to invest a greater portion of its assets in smaller stocks than our other holdings. While our investments in larger-cap holdings like Janus Growth and Income Fund performed well during the period, Janus Research Fund was among our best performing positions. As noted above, we have since swapped our exposure in Janus Research Fund for a similar position in Janus Mercury Fund.
Finally, investors have continued to favor large-cap value-oriented stocks at the expense of large-cap growth stocks. That trend was visible in the outperformance of Janus Adviser INTECH Risk-Managed Value Fund over its close mathematical cousin, Janus Adviser INTECH Risk-Managed Growth Fund. By maintaining similar exposures to each of these funds, we hope to participate equally, whether investors continue to prefer large-cap value stocks or if – as some investors expect – the pendulum ultimately swings back toward large-cap growth stocks.
Investment Strategy and Outlook
If there is a theme to this letter, it is simply that investors favor different asset classes (and investment styles) at different points in the market cycle. Our objective is to provide exposure to as broad a range of investments as possible in the hope that doing so will allow us to participate in market gains no matter what the current "flavor of the day" and provide a smoother, more stable ride in the process.
Thank you for your investment in Janus Smart Portfolio – Conservative.
Janus Smart Portfolio – Conservative At a Glance
Asset Allocation – (% of Net Assets) | |||
As of April 30, 2006 | |||
![]() | |||
*Includes cash and cash equivalents of (0.1)%.
Janus Smart Portfolios April 30, 2006 15
Janus Smart Portfolio – Conservative (unaudited)
Performance
Cumulative Total Return – for the period ended April 30, 2006
Since Inception* | |||||||
Janus Smart Portfolio - Conservative | 4.40 | % | |||||
S&P 500® Index | 5.61 | % | |||||
Conservative Allocation Index | 3.04 | % |
Visit janus.com to view up to date performance and characteristic information
Data presented represents past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
See Notes to Schedules of Investments for index definitions.
Total return includes reinvestment of dividends, distributions and 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.
A portfolio's performance for very short time periods may not be indicative of future performance.
* The Portfolio's inception date – December 30, 2005
See "Explanations of Charts, Tables and Financial Statements."
The Portfolio's holdings may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
There is no assurance that the investment process will consistently lead to successful investing.
Janus Capital Management LLC has contractually agreed to waive the Portfolio's total operating expenses to levels indicated in the prospectus until at least March 1, 2007. Total returns shown include fee waivers, if any, and without such waivers, total return would have been lower.
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 page 5 for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (12/30/05) | Ending Account Value (4/30/06) | Expenses Paid During Period (12/30/05-4/30/06) | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,044.00 | $ | 0.61 | * | ||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,023.90 | $ | 0.90 | ** |
*Expenses paid reflect only the inception period (December 30, 2005 to April 30, 2006). There fore, expenses shown are lower than would be expected for a six-month period. Expenses for the six-month period will be reflected in future reports. Expenses are equal to the annualized expense ratio of 0.18% multiplied by the average account value over the period, multiplied by 122/365 (to reflect the inception period). Expenses may include the effect of contractual waivers by Janus Capital.
**Expenses are equal to the annualized expense ratio of 0.18% multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Capital.
16 Janus Smart Portfolios April 30, 2006
Janus Smart Portfolio – Conservative
Schedule of Investments (unaudited)
As of April 30, 2006
Shares or Principal Amount | Value | ||||||||||
Mutual Funds(1) - 100.1% | |||||||||||
Equity Funds - 41.2% | |||||||||||
44,860 | Janus Adviser INTECH Risk-Managed Growth Fund - I Shares | $ | 601,570 | ||||||||
57,735 | Janus Adviser INTECH Risk-Managed Value Fund - I Shares | 618,351 | |||||||||
24,881 | Janus Contrarian Fund | 419,737 | |||||||||
10,598 | Janus Growth and Income Fund | 407,710 | |||||||||
17,280 | Janus Mercury Fund | 412,817 | |||||||||
22,309 | Janus Overseas Fund | 886,571 | |||||||||
3,346,756 | |||||||||||
Fixed-Income Funds - 58.9% | |||||||||||
385,859 | Janus Flexible Bond Fund | 3,573,051 | |||||||||
42,301 | Janus High-Yield Fund | 408,203 | |||||||||
280,809 | Janus Short-Term Bond Fund | 805,919 | |||||||||
4,787,173 | |||||||||||
Total Investments (total cost $8,050,073) – 100.1% | 8,133,929 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.1)% | (5,878 | ) | |||||||||
Net Assets – 100% | $ | 8,128,051 |
(1) The Portfolio may invest 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, 2006 17
Statements of Assets and Liabilities
As of April 30, 2006 (unaudited) (all numbers in thousands except net asset value per share) | Janus Smart Portfolio - Growth | Janus Smart Portfolio - Moderate | Janus Smart Portfolio - Conservative | ||||||||||||
Assets: | |||||||||||||||
Investments at cost | $ | 32,867 | $ | 22,977 | $ | 8,050 | |||||||||
Investments at value | $ | 33,933 | $ | 23,430 | $ | 8,134 | |||||||||
Receivables: | |||||||||||||||
Fund shares sold | 480 | 352 | 20 | ||||||||||||
Due from adviser | 1 | 5 | 3 | ||||||||||||
Dividends | 24 | 31 | 16 | ||||||||||||
Total Assets | 34,438 | 23,818 | 8,173 | ||||||||||||
Liabilities: | |||||||||||||||
Payables: | |||||||||||||||
Investments purchased | 444 | 270 | 21 | ||||||||||||
Portfolio shares repurchased | 59 | 116 | 15 | ||||||||||||
Advisory fees | 1 | 1 | – | ||||||||||||
Transfer agent fees and expenses | 7 | 11 | 4 | ||||||||||||
Non-interested Trustees' fees and expenses | – | – | – | ||||||||||||
Accrued expenses | 6 | 8 | 5 | ||||||||||||
Total Liabilities | 517 | 406 | 45 | ||||||||||||
Net Assets | $ | 33,921 | $ | 23,412 | $ | 8,128 | |||||||||
Net Assets Consist of: | |||||||||||||||
Capital (par value and paid in surplus)* | $ | 32,707 | $ | 22,854 | $ | 7,994 | |||||||||
Undistributed net investment income/(loss)* | 54 | 74 | 38 | ||||||||||||
Undistributed net realized gain/(loss) from investments* | 95 | 31 | 12 | ||||||||||||
Unrealized appreciation/(depreciation) of investments | 1,065 | 453 | 84 | ||||||||||||
Total Net Assets | $ | 33,921 | $ | 23,412 | $ | 8,128 | |||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 3,104 | 2,195 | 779 | ||||||||||||
Net Asset Value Per Share | $ | 10.93 | $ | 10.67 | $ | 10.44 |
* See Note 4 in Notes to Financial Statements
See Notes to Financial Statements.
18 Janus Smart Portfolios April 30, 2006
Statements of Operations
For the period ended April 30, 2006 (unaudited) (all numbers in thousands) | Janus Smart Portfolio - Growth(1) | Janus Smart Portfolio - Moderate(1) | Janus Smart Portfolio - Conservative(1) | ||||||||||||
Investment Income: | |||||||||||||||
Dividends from affiliates | $ | 68 | $ | 82 | $ | 41 | |||||||||
Total Investment Income | 68 | 82 | 41 | ||||||||||||
Expenses: | |||||||||||||||
Advisory fees | 3 | 2 | 1 | ||||||||||||
Transfer agent fees and expenses | 15 | 17 | 8 | ||||||||||||
Postage and mailing expenses | 2 | 3 | 1 | ||||||||||||
Professional fees | 3 | 3 | 3 | ||||||||||||
Non-interested Trustees' fees and expenses | – | – | – | ||||||||||||
Printing expenses | 2 | 3 | 1 | ||||||||||||
Other expenses | 1 | 1 | 1 | ||||||||||||
Total Expenses | 26 | 29 | 15 | ||||||||||||
Expense and Fee Offset | – | – | – | ||||||||||||
Net Expenses | 26 | 29 | 15 | ||||||||||||
Less: Excess Expense Reimbursement | (12 | ) | (21 | ) | (12 | ) | |||||||||
Net Expenses after Expense Reimbursement | 14 | 8 | 3 | ||||||||||||
Net Investment Income/(Loss) | 54 | 74 | �� | 38 | |||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | |||||||||||||||
Net realized gain/(loss) from securities transactions | 95 | 31 | 12 | ||||||||||||
Change in net unrealized appreciation or depreciation of investments | 1,065 | 453 | 84 | ||||||||||||
Net Gain/(Loss) on Investments | 1,160 | 484 | 96 | ||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 1,214 | $ | 558 | $ | 134 |
(1) Period from December 30, 2005 (inception date) through April 30, 2006.
See Notes to Financial Statements.
Janus Smart Portfolios April 30, 2006 19
Statements of Changes in Net Assets
For the period ended April 30, 2006 (unaudited) (all numbers in thousands) | Janus Smart Portfolio - Growth 2006(1) | Janus Smart Portfolio - Moderate 2006(1) | Janus Smart Portfolio - Conservative 2006(1) | ||||||||||||
Operations: | |||||||||||||||
Net investment income/(loss) | $ | 54 | $ | 74 | $ | 38 | |||||||||
Net realized gain/(loss) from investment transactions | 95 | 31 | 12 | ||||||||||||
Change in unrealized net appreciation/(depreciation) of investments | 1,065 | 453 | 84 | ||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 1,214 | 558 | 134 | ||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||
Net investment income* | – | – | – | ||||||||||||
Net realized gain/(loss) from investment transactions* | – | – | – | ||||||||||||
Net Decrease from Dividends and Distributions | – | – | – | ||||||||||||
Capital Share Transactions: | |||||||||||||||
Shares sold | 34,056 | 24,564 | 8,683 | ||||||||||||
Reinvested dividends and distributions | – | – | – | ||||||||||||
Shares repurchased | (1,349 | ) | (1,710 | ) | (689 | ) | |||||||||
Net Increase/(Decrease) from Capital Share Transactions | 32,707 | 22,854 | 7,994 | ||||||||||||
Net Increase/(Decrease) in Net Assets | 33,921 | 23,412 | 8,128 | ||||||||||||
Net Assets: | |||||||||||||||
Beginning of period | – | – | – | ||||||||||||
End of period | $ | 33,921 | $ | 23,412 | $ | 8,128 | |||||||||
Undistributed net investment income/(loss)* | $ | 54 | $ | 74 | $ | 38 |
(1) Period from December 30, 2005 (inception date) through April 30, 2006.
* See Note 4 in Notes to Financial Statements.
See Notes to Financial Statements.
20 Janus Smart Portfolios April 30, 2006
Financial Highlights
Janus Smart Portfolio - Growth | |||||||
For a share outstanding during the period ended April 30 (unaudited) | 2006(1) | ||||||
Net Asset Value, Beginning of Period | $ | 10.00 | |||||
Income from Investment Operations: | |||||||
Net investment income/(loss) | .02 | ||||||
Net gains/(losses) on securities (both realized and unrealized) | .91 | ||||||
Total from Investment Operations | .93 | ||||||
Less Distributions: | |||||||
Dividends (from net investment income)* | – | ||||||
Distributions (from capital gains)* | – | ||||||
Total Distributions | – | ||||||
Net Asset Value, End of Period | $ | 10.93 | |||||
Total Return** | 9.30 | % | |||||
Net Assets, End of Period (in thousands) | $ | 33,921 | |||||
Average Net Assets for the Period (in thousands) | $ | 17,257 | |||||
Ratio of Gross Expenses to Average Net Assets***(2) | 0.24 | %(3) | |||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.24 | % | |||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.94 | % | |||||
Portfolio Turnover Rate*** | 36 | % | |||||
Janus Smart Portfolio - Moderate | |||||||
For a share outstanding during the period ended April 30 (unaudited) | 2006(1) | ||||||
Net Asset Value, Beginning of Period | $ | 10.00 | |||||
Income from Investment Operations: | |||||||
Net investment income/(loss) | .03 | ||||||
Net gains/(losses) on securities (both realized and unrealized) | .64 | ||||||
Total from Investment Operations | .67 | ||||||
Less Distributions: | |||||||
Dividends (from net investment income)* | – | ||||||
Distributions (from capital gains)* | – | ||||||
Total Distributions | – | ||||||
Net Asset Value, End of Period | $ | 10.67 | |||||
Total Return** | 6.70 | % | |||||
Net Assets, End of Period (in thousands) | $ | 23,412 | |||||
Average Net Assets for the Period (in thousands) | $ | 11,696 | |||||
Ratio of Gross Expenses to Average Net Assets***(2) | 0.20 | %(4) | |||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.20 | % | |||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.90 | % | |||||
Portfolio Turnover Rate*** | 18 | % |
* 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 April 30, 2006.
(2) See "Explanations of Charts, Tables and Financial Statements."
(3) The ratio was 0.46% in 2006 before waiver of certain fees incurred by the Portfolio.
(4) The ratio was 0.74% in 2006 before waiver of certain fees incurred by the Portfolio.
See Notes to Financial Statements.
Janus Smart Portfolios April 30, 2006 21
Financial Highlights (continued)
Janus Smart Portfolios - Conservative | |||||||
For a share outstanding during the period ended April 30 (unaudited) | 2006(1) | ||||||
Net Asset Value, Beginning of Period | $ | 10.00 | |||||
Income from Investment Operations: | |||||||
Net investment income/(loss) | .05 | ||||||
Net gains/(losses) on securities (both realized and unrealized) | .39 | ||||||
Total from Investment Operations | .44 | ||||||
Less Distributions: | |||||||
Dividends (from net investment income)* | – | ||||||
Distributions (from capital gains)* | – | ||||||
Total Distributions | – | ||||||
Net Asset Value, End of Period | $ | 10.44 | |||||
Total Return** | 4.40 | % | |||||
Net Assets, End of Period (in thousands) | $ | 8,128 | |||||
Average Net Assets for the Period (in thousands) | $ | 4,196 | |||||
Ratio of Gross Expenses to Average Net Assets***(2) | 0.18 | %(3) | |||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.17 | % | |||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.72 | % | |||||
Portfolio Turnover Rate*** | 18 | % |
*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 April 30, 2006.
(2) See "Explanations of Charts, Tables and Financial Statements."
(3) The ratio was 1.05% in 2006 before waiver of certain fees incurred by the Portfolio.
See Notes to Financial Statements.
22 Janus Smart Portfolios April 30, 2006
Notes to Schedules of Investments (unaudited)
Conservative Allocation Index | An internally calculated index that 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) Europe, Australasia, Far East (EAFE®) Index (12%). | ||||||
Growth Allocation Index | An internally calculated index 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 Free (EMF) IndexSM (5%). | ||||||
Moderate Allocation Index | An internally calculated index 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 EMF IndexSM (2%). | ||||||
S&P 500® Index | The Standard & Poor's Composite Index of 500 stocks is a widely recognized, unmanaged index of common stock prices. | ||||||
Lehman Brothers Aggregate Bond Index | Is made up of the Lehman Brothers Government/Corporate Bond Index, Mortgage-Backed Securities Index, and Asset-Based 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. | ||||||
Morgan Stanley Capital International EAFE® Index | Is a market capitalization weighted index composed of companies representative of the market structure of 21 developed market countries in Europe, Australasia, and the Far East. | ||||||
Morgan Stanley Capital International EMF IndexSM | An unmanaged index reflecting approximately 60% of the market capitalization, by industry, in each of 26 emerging market countries. | ||||||
Dow Jones Wilshire 500 Index | A comprehensive measure of the U.S. stock market designed to represent the performance of all U.S.-headquartered equity securities with readily available price data. | ||||||
Janus Smart Portfolios April 30, 2006 23
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 operate as "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 was 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 thirty-two funds. Each of the Portfolios in this report is classified as diversified as defined in the 1940 Act. The Portfolios are no-load investment s.
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 follows.
INVESTMENTS IN EQUITY SECURITIES
JANUS FUND seeks long-term growth of capital in a manner consistent with the preservation of capital. The fund pursues its objective by investing primarily in common stocks selected for their growth potential. Although the fund may invest in companies of any size, it generally invests in larger, more established companies.
JANUS ENTERPRISE FUND seeks long-term growth of capital. The fund pursues its 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(R) Growth Index.
JANUS MERCURY FUND seeks long-term growth of capital. The fund pursues its 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 OLYMPUS FUND seeks long-term growth of capital. The fund pursues its 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 ORION FUND seeks long-term growth of capital. The fund pursues its objective by normally investing primarily in a core group of 20-30 domestic and foreign common stocks selected for their growth potential. The fund may invest in companies of any size, from larger, well-established companies to smaller, emerging growth companies.
JANUS TRITON FUND seeks long-term growth of capital. The fund pursues its 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 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 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.
24 Janus Smart Portfolios April 30, 2006
JANUS GLOBAL LIFE SCIENCES FUND seeks long-term growth of capital. The fund invests, under normal circumstances at least 80% of its net assets plus the amount of any borrowings for investment purposes, 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 indu stries: health care; pharmaceuticals; agriculture; cosmetics/personal care; and biotechnology. 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 plus the amount of any borrowings for investment purposes, in securities of companies that the Technology Team believes will benefit significantly from advances or improvements in technology. These companies generally fall into two categories: (a) companies that the Technology Team believes have or will develop products, processes, or services that will provide significant technological advancements or improvements and (b) companies that the Technology Team 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 BALANCED FUND seeks long-term capital growth, consistent with preservation of capital and balanced by current income. The fund pursues its objective by normally investing 50-60% of its assets in equity securities selected primarily for their growth potential and 40-50% of its assets in securities selected primarily for their income potential. The fund normally invests at least 25% of its assets in fixed-income senior securities.
JANUS CONTRARIAN FUND seeks long-term growth of capital. The fund pursues its objective by investing, under normal circumstances, at least 80% of its net assets plus the amount of any borrowings for investment purposes, in equity securities with the potential for long-term growth of capital. The portfolio manager emphasizes investments in companies with attractive price/free cash flow, which is the relationship between the price of a stock and the company's available cash from operations, minus capital expenditures. The portfolio manager will typically seek attractively valued companies that are improving their free cash flow and returns on invested capital. These companies may also include special situations companies that are experiencing management changes and/or are currently out of favor.
JANUS CORE EQUITY FUND seeks long-term growth of capital. The fund pursues its objective by investing, under normal circumstances, at least 80% of its net assets plus the amount of any borrowings for investment purposes, in equity securities selected for their growth potential. Eligible equity securities in which the fund may invest include: (a) domestic and foreign common stocks; (b) preferred stocks; (c) securities convertible into common stocks or preferred stocks such as convertible preferred stocks, bonds, and debentures; and (d) other securities with equity characteristics. The fund may invest in companies of any size.
JANUS GROWTH AND INCOME FUND seeks long-term capital growth and current income. The fund pursues its objective by normally emphasizing investments in common stocks. It 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. Equity securities may make up part or all of this income component if they currently pay dividends or the portfolio manager believes they have potential for increasing or commencing dividend payments.
JANUS RESEARCH FUND seeks long-term growth of capital. The fund pursues its objective by investing primarily in common stocks selected for their growth potential. The fund may invest in companies of any size and located anywhere in the world, from larger, well-established companies to smaller, emerging growth companies.
INTECH RISK-MANAGED STOCK FUND seeks long-term growth of capital. The fund invests, under normal circumstances, at least 80% of its net assets plus the amount of any borrowings for investment purposes, in common stocks from the universe of the fund's benchmark, which is the S&P 500(R) Index. Stocks are selected for their potential contribution to the long-term growth of capital, utilizing INTECH's mathematical process. The primary aim of the strategy is to outperform the fund's benchmark index.
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(R) Growth Index. Stocks are selected for their potential contribution to the
Janus Smart Portfolios April 30, 2006 25
Notes to Financial Statements (unaudited) (continued)
long-term growth of capital, utilizing INTECH's mathematical 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(R) Value Index. Stocks are selected for their potential contribution to the long-term growth of capital, utilizing INTECH's mathematical process.
JANUS MID CAP VALUE FUND - INVESTOR SHARES seeks capital appreciation. The fund pursues its objective by investing primarily in common stocks selected for their capital appreciation potential. The fund primarily invests in the common stocks of mid-sized companies whose stock prices the portfolio managers believe to be undervalued. The fund invests, under normal circumstances, at least 80% of its assets plus the amount of any borrowings for investment purposes, 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(R) Value Index. This average is updated monthly.
JANUS ADVISER SMALL COMPANY VALUE FUND - CLASS I seeks capital appreciation. The fund invests primarily in common stocks selected for their capital appreciation potential. In pursuing that objective, 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 normally invests at least 80% of its assets, determined at the time of purchase, 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(R) Value Index. This average is updated monthly.
JANUS GLOBAL OPPORTUNITIES FUND seeks long-term growth of capital. The fund pursues its 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 OVERSEAS FUND seeks long-term growth of capital. The fund invests, under normal circumstances, at least 80% of its net assets plus the amount of any borrowings for investment purposes, in securities of issuers from countries outside of the United States. The fund normally invests in securities of issuers from several different countries, excluding the United States. Although the fund intends to invest substantially all of its assets in issuers located outside the United States, it may at times invest in U.S. issuers, and it may, under unusual circumstances, invest all of its assets in a single country. The fund may have significant exposure to emerging markets.
JANUS WORLDWIDE FUND seeks long-term growth of capital in a manner consistent with the preservation of capital. The fund pursues its objective by investing primarily in common stocks of companies of any size located throughout the world. The fund normally invests in issuers from several different countries, including the United States. The fund may, under unusual circumstances, invest in a single country. The fund may have significant exposure to emerging markets.
JANUS ADVISER FOREIGN STOCK FUND - CLASS I seeks long-term growth of capital. The fund pursues its objective by investing, under normal circumstances, at least 80% of its net assets, determined at the time of purchase, in stocks of issuers located in several different countries, excluding the United States. Although the fund intends to invest substantially all of its assets in issuers located outside the United States, it may at times invest in U.S. issuers, and it may, under unusual circumstances, invest all of its assets in a single country. The fund emphasizes investments in companies the portfolio manager believes are undervalued relative to their intrinsic worth. The fund may have significant exposure to emerging markets.
INVESTMENTS IN FIXED-INCOME SECURITIES
JANUS FLEXIBLE BOND FUND seeks to obtain maximum total return, consistent with preservation of capital. The fund pursues its objective by primarily investing, under normal circumstances, at least 80% of its assets plus the amount of any borrowings for investment purposes, in bonds. Bonds include, but are not limited to, government bonds, corporate bonds, convertible bonds, mortgage-backed securities, and zero-coupon bonds. The fund will invest at least 65% of its assets in investment grade debt securities and will maintain an average-weighted effective maturity of five to ten years. The fund will limit its investment in high-yield/high-risk bonds to 35% or less of its net assets. This fund generates total return from a combination of current income and capital appreciation, but income is usually the dominant portion.
JANUS HIGH-YIELD FUND seeks to obtain high current income. Capital appreciation is a secondary objective when consistent with its primary objective. The fund pursues its objectives by investing, under normal circumstances, at least 80% of its net assets plus the amount of any borrowings for investment purposes, 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
26 Janus Smart Portfolios April 30, 2006
attractive risk/return characteristics. The fund may at times invest all of its assets in such securities.
JANUS SHORT-TERM BOND FUND seeks as high a level of current income as is consistent with preservation of capital. The fund invests, under normal circumstances, at least 80% of its net assets plus the amount of any borrowings for investment purposes, 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.
JANUS MONEY MARKET FUND - INVESTOR SHARES seeks maximum current income to the extent consistent with stability of capital. The fund pursues its 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.
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 Portfolios commenced operations on December 30, 2005. Janus Capital Management LLC ("Janus Capital") invested $125,000 of initial seed capital in each Portfolio on December 30, 2005. Janus Capital redeemed the initial seed capital of $125,000 on April 19, 2006.
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 underlying fund 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 sale 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 that are 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 money market underlying funds are valued at the amortized cost method of valuation permitted in accordance with Rule 2a-7 under the 1940 Act and ce rtain 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 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 NAV is determined, securities held by the underlying funds may be valued at fair value as determined in good faith under procedures established by and under the supervision of the Portfolios' Trustees. 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 of 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. 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. Additionally, each Portfolio, as a shareholder in the underlying funds, will also indirectly bear its pro rata share of
Janus Smart Portfolios April 30, 2006 27
Notes to Financial Statements (unaudited) (continued)
the expenses incurred by the underlying funds. Each Portfolio bears expenses incurred specifically on its behalf as well as a portion of general expenses, which may be allocated pro rata to each of the funds in the Trust.
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. In addition, 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, 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. Cash collateral may also be invested in unaffiliated money market funds or other accounts.
State Street Bank and Trust Company (the "Lending Agent") may also invest the cash collateral of the underlying funds in the State Street Navigator Securities Lending Prime Portfolio 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 respective 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.
Interfund Lending
Pursuant to an exemptive order received from the SEC, the underlying funds may be party to an interfund lending agreement between the underlying funds and other Janus Capital sponsored mutual funds, which permit it 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 a 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 underlying funds may enter into forward currency contracts in order to reduce their exposure to changes in foreign currency exchange rates on their 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. Gains or losses arise 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.
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.
Mortgage Dollar Rolls
The underlying Janus Flexible Bond Fund, Janus High-Yield Fund and Janus Short-Term Fund may enter into "mortgage dollar rolls." In a "mortgage dollar roll" transaction, the underlying fund sells a mortgage related security (such as a Government National Mortgage Association ("GNMA") 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 fund 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 underlying fund's 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 fund, maintained in a segregated account. To the extent that the underlying fund collateralizes its 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 underlying fund's ability to predict interest rates and mortgage
28 Janus Smart Portfolios April 30, 2006
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 Janus Flexible Bond Fund, Janus High-Yield Fund and Janus Short-Term Fund may trade securities on a to-be-announced ("TBA") basis. In a TBA transaction, the underlying fund commits 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 GNMA, Federal National Mortgage Association ("FNMA") and/or Federal Home Loan Mortgage Corporation ("FHLMC") transactions.
Securities purchased on a TBA basis are not settled until they are delivered to the underlying fund, normally 15 to 45 days later. Beginning on the date the underlying fund enters 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.
Bank Loans
The underlying Janus Balanced Fund, Janus Flexible Bond Fund, Janus High-Yield Fund and Janus Short-Term 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 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 underlying 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 secu rities adjust with general interest rate changes and/or issuer credit quality. The interest rates paid on a floating rate security in which the underlying fund invests generally are readjusted every 45-60 days, on average, to an increment over a designated benchmark rate, such as the one-month, three-month, six-month or one-year London Interbank Offered Rate ("LIBOR").
The underlying 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 underlying 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 underlying fund utilizes an independent third party to value individual bank loans on a daily basis.
Futures Contracts
The underlying funds, except Janus Money Market Fund - Investor Shares, may enter into futures contracts. The underlying funds intend to use such derivative instruments primarily to hedge or protect from adverse movements in securities prices, currency rates or interest rates. In addition, some of the underlying funds may use futures contracts to gain exposure to the stock market pending investment of cash balances or to meet liquidity needs. The use of futures contracts may involve risks such as the possibility of illiquid markets or imperfect correlation between the value 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 an unrealized gain or loss. 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 segregated as collateral for market value on futures contracts. Such collateral is in the possession of the underlying funds' custodian.
Options Contracts
The underlying funds, except Janus Money Market Fund – Investor Shares may purchase or write put and call options on futures contracts or foreign currencies in a manner similar to that in which futures or forward contracts on foreign currencies will be utilized and on portfolio securities for hedging purposes or as a substitute for an investment. 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 is
Janus Smart Portfolios April 30, 2006 29
Notes to Financial Statements (unaudited) (continued)
adjusted by the amount of premium received or paid. Securities are segregated to cover outstanding written options.
The risk in writing a call option is that the underlying funds give up the opportunity for profit if the market price of the security increases and the option is exercised. The risk in writing a put option 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 an option 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.
Short Sales
The underlying funds may engage in "short sales against the box." Short sales against the box involve selling either a security that the underlying funds own, or a security equivalent in kind and amount to the security sold short 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 in anticipation of an expected decline in the market price of that security. 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.
All underlying funds, except Janus Flexible Bond Fund, Janus High-Yield Fund, Janus Short-Term Bond Fund and Janus Money Market Fund – Investor Shares, may also engage in "naked" short sales. Naked short sales involve the underlying funds selling a security it does not own to a purchaser at a specified 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. Although the potential for gain is limited to the difference between the price at which the underlying funds sold the security short and the cost of borrowing the security, its potential for loss could be unlimited because there is no limit to the replacement cost of the borrowed security. There is no assurance that the underlying fund will be able to close out a short position at any particular time. A gain or a loss will be recognized upon termination of a s hort sale. There is no limit on the size of any loss that the underlying fund may recognize upon termination of a short sale.
Foreign Currency Translations
The underlying funds, except Janus Money Market Fund - Investor Shares, 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 translation arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses of the underlying funds are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to security transactions and income.
Foreign-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 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.
Initial Public Offerings
Certain underlying funds may invest in initial public offerings ("IPOs"). IPOs and other investment techniques may have a magnified performance impact on an underlying fund with a small asset base. The underlying funds may not experience similar performance as their assets grow.
Additional Investment Risk
Certain underlying funds may be invested in lower rated debt securities that have a higher risk of default or loss of value because of changes in the economy, or political environment, or adverse developments specific to the issuer.
Restricted Security Transactions
Restricted securities held by underlying funds may not be sold except in exempt transactions or in a public offering registered under the Securities Act of 1933. 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
30 Janus Smart Portfolios April 30, 2006
inability of an underlying 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.
Dividend Distributions
Dividends and net realized capital gains (if any) are generally declared and distributed annually. The majority of dividends and net realized 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.
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 of 0.05%.
Janus Capital has agreed until at least March 1, 2007 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, taxes and extraordinary 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, 2006, total reimbursement by Janus Capital and the recoupment that may be potentially made to Janus Capital are indicated in the table below:
Portfolio | Reimbursement | Total Recoupment | |||||||||
Janus Smart Portfolio - Growth | $ | 12,165 | $ | 12,165 | |||||||
Janus Smart Portfolio - Moderate | 21,000 | 21,000 | |||||||||
Janus Smart Portfolio - Conservative | 12,247 | 12,247 |
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. Portfolios could have employed the assets used by the transfer agent to produce income if it 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 "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
Janus Smart Portfolios April 30, 2006 31
Notes to Financial Statements (unaudited) (continued)
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 credited to the account. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance to the Plan. No deferred fees were paid to any Trustee under the Plan during the six-month period ended April 30, 2006.
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 Funds. $59,577 of total compensation was paid by the funds of the Trust. The Portfolios' 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, 2006, the aggregate cost of purchases and proceeds from sales of investment securities (excluding short-term securities) were as follows:
Fund | Purchase of Securities | Proceeds from Sales of Securities | Purchase of Long- Term U.S. Government Obligations | Proceeds from Sales of Long-Term U.S. Government Obligations | |||||||||||||||
Janus Smart Portfolio - Growth | $ | 35,433,727 | $ | 2,660,958 | $ | – | $ | – | |||||||||||
Janus Smart Portfolio - Moderate | 23,865,152 | 918,617 | – | – | |||||||||||||||
Janus Smart Portfolio - Conservative | 8,363,383 | 325,132 | – | – |
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, net investment losses and capital loss carryovers.
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, 2006 are also noted below.
The primary difference between book and tax appreciation or depreciation of investments is wash sale loss deferrals.
Portfolio | Federal Tax Cost | Unrealized Appreciation | Unrealized (Depreciation) | Net Tax Appreciation/ (Depreciation) | |||||||||||||||
Janus Smart Portfolio - Growth | $ | 32,867,256 | $ | 1,150,450 | $ | (85,137 | ) | $ | 1,065,313 | ||||||||||
Janus Smart Portfolio - Moderate | 22,977,210 | 557,737 | (104,640 | ) | 453,097 | ||||||||||||||
Janus Smart Portfolio - Conservative | 8,050,086 | 138,405 | (54,562 | ) | 83,843 |
5. CAPITAL SHARE TRANSACTIONS
For the period ended April 30, 2006(unaudited) (all numbers are in thousands) | Janus Smart Portfolio - Growth 2006(1) | Janus Smart Portfolio - Moderate 2006(1) | Janus Smart Portfolio - Conservative 2006(1) | ||||||||||||
Transactions in Portfolio Shares | |||||||||||||||
Shares sold | 3,229 | 2,358 | 845 | ||||||||||||
Reinvested dividends and distributions | – | – | – | ||||||||||||
Shares repurchased | (125 | ) | (163 | ) | (66 | ) | |||||||||
Net Increase(Decrease) in Portfolio Shares | 3,104 | 2,195 | 779 | ||||||||||||
Shares Outstanding, Beginning of Period | – | – | – | ||||||||||||
Shares Outstanding, End of Period | 3,104 | 2,195 | 779 |
(1) Period from December 30, 2005 (inception date) through April 30, 2006.
32 Janus Smart Portfolios April 30, 2006
6. AFFILIATED FUND OF FUNDS TRANSACTIONS
The Portfolios may 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. A Portfolio's investment in any underlying fund may exceed 25% of such Portfolio's total assets. During the period ended April 30, 2006, the Portfolios recorded distributions from affiliated investment companies as dividend income and had the following affiliated purchases and sales:
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/06 | |||||||||||||||||||||||||
Janus Smart Portfolio - Growth(1) | |||||||||||||||||||||||||||||||
Janus Adviser INTECH Risk-Managed Growth Fund - I Shares | 305,429 | $ | 4,088,125 | – | $ | – | $ | – | $ | – | $ | 4,095,806 | |||||||||||||||||||
Janus Adviser INTECH Risk-Managed Value Fund - I Shares | 393,064 | 4,088,125 | – | – | – | – | 4,209,713 | ||||||||||||||||||||||||
Janus Flexible Bond Fund | 524,968 | 4,945,646 | – | – | – | 39,948 | 4,876,656 | ||||||||||||||||||||||||
Janus Growth and Income Fund | 86,590 | 3,276,910 | – | – | – | 6,410 | 3,331,129 | ||||||||||||||||||||||||
Janus High-Yield Fund | 171,919 | 1,656,713 | – | – | – | 21,478 | 1,667,550 | ||||||||||||||||||||||||
Janus Mercury Fund | 141,146 | 3,364,987 | – | – | – | – | 3,371,974 | ||||||||||||||||||||||||
Janus Overseas Fund | 227,670 | 8,176,250 | – | – | – | – | 9,047,607 | ||||||||||||||||||||||||
Janus Research Fund | 210,020 | 2,566,471 | (210,020 | ) | (2,566,471 | ) | 94,487 | – | – | ||||||||||||||||||||||
Janus Twenty Fund | 65,234 | 3,270,500 | – | – | – | – | 3,332,134 | ||||||||||||||||||||||||
$ | 35,433,727 | $ | (2,566,471 | ) | $ | 94,487 | $ | 67,836 | $ | 33,932,569 |
(1) Period from December 30, 2005 (inception date) through April 30, 2006.
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/06 | |||||||||||||||||||||||||
Janus Smart Portfolio - Moderate(1) | |||||||||||||||||||||||||||||||
Janus Adviser INTECH Risk-Managed Growth Fund - I Shares | 170,734 | $ | 2,286,452 | – | $ | – | $ | – | $ | – | $ | 2,289,538 | |||||||||||||||||||
Janus Adviser INTECH Risk-Managed Value Fund - I Shares | 219,704 | 2,286,452 | – | – | – | – | 2,353,032 | ||||||||||||||||||||||||
Janus Flexible Bond Fund | 734,051 | 6,913,950 | – | – | – | 54,671 | 6,818,968 | ||||||||||||||||||||||||
Janus Growth and Income Fund | 78,606 | 2,978,138 | – | – | – | 5,751 | 3,023,967 | ||||||||||||||||||||||||
Janus High-Yield Fund | 120,130 | 1,157,906 | – | – | – | 14,692 | 1,165,233 | ||||||||||||||||||||||||
Janus Mercury Fund | 49,245 | 1,173,901 | – | – | – | – | 1,176,452 | ||||||||||||||||||||||||
Janus Overseas Fund | 107,904 | 3,886,968 | – | – | – | – | 4,288,115 | ||||||||||||||||||||||||
Janus Research Fund | 72,503 | 887,942 | (72,503 | ) | (887,942 | ) | 30,675 | – | – | ||||||||||||||||||||||
Janus Short-Term Bond Fund | 399,920 | 1,150,217 | – | – | – | 6,958 | 1,150,880 | ||||||||||||||||||||||||
Janus Twenty Fund | 22,790 | 1,143,226 | – | – | – | – | 1,164,122 | ||||||||||||||||||||||||
$ | 23,865,152 | $ | (887,942 | ) | $ | 30,675 | $ | 82,072 | $ | 23,430,307 |
(1) Period from December 30, 2005 (inception date) through April 30, 2006.
Janus Smart Portfolios April 30, 2006 33
Notes to Financial Statements (unaudited) (continued)
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/06 | |||||||||||||||||||||||||
Janus Smart Portfolio - Conservative(1) | |||||||||||||||||||||||||||||||
Janus Adviser INTECH Risk-Managed Growth Fund - I Shares | 44,860 | $ | 600,315 | – | $ | – | $ | – | $ | – | $ | 601,570 | |||||||||||||||||||
Janus Adviser INTECH Risk-Managed Value Fund - I Shares | 57,736 | 600,315 | – | – | – | – | 618,351 | ||||||||||||||||||||||||
Janus Contrarian Fund | 24,881 | 400,210 | – | – | – | – | 419,737 | ||||||||||||||||||||||||
Janus Flexible Bond Fund | 386,546 | 3,631,345 | (687 | ) | (6,510 | ) | (14 | ) | 29,486 | 3,573,051 | |||||||||||||||||||||
Janus Growth and Income Fund | 10,598 | 400,981 | – | – | – | 771 | 407,710 | ||||||||||||||||||||||||
Janus High-Yield Fund | 42,301 | 405,511 | – | – | – | 5,320 | 408,203 | ||||||||||||||||||||||||
Janus Mercury Fund | 17,280 | 412,045 | – | – | – | – | 412,817 | ||||||||||||||||||||||||
Janus Overseas Fund | 22,309 | 800,419 | – | – | – | – | 886,571 | ||||||||||||||||||||||||
Janus Research Fund | 25,149 | 306,800 | (25,149 | ) | (306,800 | ) | 11,835 | – | – | ||||||||||||||||||||||
Janus Short-Term Bond Fund | 280,808 | 805,443 | – | – | – | 4,997 | 805,919 | ||||||||||||||||||||||||
$ | 8,363,383 | $ | (313,310 | ) | $ | 11,821 | $ | 40,574 | $ | 8,133,929 |
(1) Period from December 30, 2005 (inception date) through April 30, 2006.
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 in that Court that generally include: (i) claims by a putative class of investors in certain Janus funds asserting claims on behalf of the investor class; (ii) derivative claims by investors in certain Janus funds ostensibly on behalf of suc h funds; (iii) claims on behalf of participants in the Janus 401(k) plan; (iv) claims brought on behalf of shareholders of Janus Capital Group Inc. ("JCGI") on a derivative basis against the Board of Directors of JCGI; and (v) claims by a putative class of shareholders of JCGI asserting claims on behalf of the shareholders. 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 (actions (i) and (ii) described 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. The complaint in the 401(k) plan class action (action (iii) described above) was voluntarily dismissed, but was refiled using a new named plaintiff and asserting claims similar to the initial complaint. On February 27, 2006, the court issued an order announcing its intent to dismiss the claims asserted against Janus Capital and its affiliates that were brought on behalf of JCGI's corporate shareholders (action (v) above). As a result of the above events, JCGI, Janus Capital, the Advisory Committee of the Janus 401(k) plan, and the current or former directors of JCGI are the remaining defendants in one or more of the acti ons.
The Attorney General's Office for the State of West Virginia filed a separate market timing related civil action against Janus Capital and several other non-affiliated mutual fund companies, claiming violations under the West Virginia Consumer Credit and Protection Act. The civil action requests certain monetary penalties, among other relief. This action has been removed to federal court and transferred to the
34 Janus Smart Portfolios April 30, 2006
Multidistrict Litigation case in the U.S. District Court of Baltimore, Maryland described above. In addition, the Auditor of the State of West Virginia, in his capacity as securities commissioner, has issued an order indicating an intent to initiate administrative proceedings against most of the defendants in the market timing cases (including Janus Capital) and seeking disgorgement and other monetary relief based on similar market timing allegations.
In addition to the "market timing" actions described above, Janus Capital is a defendant in a consolidated lawsuit in the U.S. District Court for the District of Colorado challenging the investment advisory fees charged by Janus Capital to certain Janus funds. The action was filed in 2004 by fund investors asserting breach of fiduciary duty under Section 36(b) of the Investment Company Act of 1940. The plaintiffs seek declaratory and injunctive relief and an unspecified amount of damages.
In 2001, Janus Capital's predecessor was also named as a defendant in a class action suit in the U.S. District Court for the Southern District of New York, alleging that certain underwriting firms and institutional investors violated antitrust laws in connection with initial public offerings. The U.S. District Court dismissed the plaintiff's antitrust claims in November 2003, however, the U.S. Court of Appeals vacated that decision and remanded it for further proceedings.
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, 2006 35
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; 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
Approval of Advisory Agreements for Janus Smart Portfolios
The Trustees of Janus Investment Fund, more than eighty-five percent of whom ("Independent Trustees") have never been affiliated with Janus Smart Portfolio-Growth's, Janus Smart Portfolio-Moderate's, and Janus Smart Portfolio-Conservative's (the "New Portfolios") adviser, considered the proposed investment advisory agreements for the New Portfolios. In the course of their consideration of those agreements the Independent Trustees met in executive session and were advised by their independent legal counsel. The Independent Trustees received and reviewed a substantial amount of information provided by Janus Capital in response to requests of the Trustees and their counsel. They also received and reviewed a considerable amount of information provided to the Trustees by their independent fee consultant. Based on their evaluation of that information and other information, the Trustees, including all of the Independent Trustees, at a meeting held on September 20, 2005, approved the investment advisory agreement for the New Portfolios for a period through July 1, 2007.
In considering the agreements and reaching their conclusions, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described as follows.
Nature, Extent and Quality of Services
The Trustees' analysis of the nature, extent, and quality of Janus Capital's services to the New Portfolios took into account the investment objectives and strategies of the New Portfolios and the knowledge of the Trustees gained from the Trustees' regular meetings with management throughout the prior year. In addition, the Trustees reviewed Janus Capital's resources and key personnel, especially those who would be providing investment management services to the New Portfolios. The Trustees also considered other services to be provided to the New Portfolios by Janus Capital, such as selecting broker-dealers for executing portfolio transactions, serving as the New Portfolios' administrator, monitoring adherence to the New Portfolios' investment restrictions, producing shareholder reports, providing support services for the Trustees and Trustee committees, and overseeing the activities of other service providers, including monitoring complianc e with various Portfolio policies and procedures and with applicable securities laws and regulations. The Trustees concluded that the nature, extent, and quality of the services to be provided by Janus Capital to the New Portfolios were appropriate and consistent with the terms of the respective proposed advisory agreements and that the New Portfolios were likely to benefit from services provided under their agreements with Janus Capital. They also concluded that the quality of Janus Capital's services to the other Janus funds had been consistent with or superior to quality norms in the industry and that Janus Capital had sufficient personnel, with the appropriate education and experience, to serve the New Portfolios effectively and had demonstrated its continuing ability to attract and retain well-qualified personnel.
The Trustees also reviewed the response of Janus Capital to various legal and regulatory proceedings since the fall of 2003.
Costs of Services Provided
The Trustees examined the fee information and expenses for the New Portfolios in comparison to information for other comparable funds as provided by Lipper Inc.
The Trustees considered the methodology used by Janus Capital in determining compensation payable to the portfolio manager and the competition for investment management talent, and they also considered the competitive market for mutual funds in different distribution channels.
36 Janus Smart Portfolios April 30, 2006
The Trustees had also reviewed Janus Capital's management fees for its institutional separate accounts and for its subadvised funds (funds for which Janus Capital provides portfolio management services only). In most instances sub-advisory and institutional separate account fees are lower than the New Portfolios' management fees. However, the Trustees noted that Janus Capital performs significant additional services for the New Portfolios that it does not provide to those other clients, including administrative services, oversight of the Portfolios' other service providers, trustee support, regulatory compliance, and numerous other services. The Trustees had also considered the profitability to Janus Capital and its affiliates of their relationships with the other Janus funds in connection with their consideration of the advisory agreements for those funds and had found the profitability not to be unreasonable.
Finally, the Trustees considered the financial condition of Janus Capital, which they found to be sound.
The Trustees concluded that the management fees and other compensation to be paid by the New Portfolios to Janus Capital and its affiliates were reasonable in relation to the nature and quality of the services to be provided, taking into account the fees charged by other advisers for managing comparable mutual funds with similar strategies and the fees Janus Capital charges to other clients, and that the estimated overall expense ratios of the New Portfolios, taking into account the expense limitations agreed to by Janus Capital, were comparable to or more favorable than the mean or median expense ratio of its peers.
Benefits Derived from the Relationship with the New Portfolios
The Trustees also considered benefits that would accrue to Janus Capital and its affiliates from their relationship with the New Portfolios. The Trustees recognized that two affiliates of Janus Capital would serve the New Portfolios as transfer agent and distributor and that the transfer agent would receive compensation from the New Portfolios for its services to the New Portfolios. The Trustees also considered Janus Capital's use of commissions to be paid by the underlying funds to be held by the New Portfolios on their portfolio brokerage transactions to obtain proprietary research products and services benefiting the New Portfolios and/or other clients of Janus Capital and Janus Capital's agreement not to use the New Portfolios' portfolio brokerage transactions to obtain third party research through brokers. The Trustees concluded that Janus Capital's use of "soft" commission dollars to obtain proprietary research products and services wa s consistent with regulatory requirements and would benefit the New Portfolios. The Trustees concluded that, other than the services to be provided by Janus Capital and its affiliates pursuant to the proposed agreements and the fees to be paid by the New Portfolios therefor (and fees of the underlying funds), the New Portfolios and Janus Capital may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital would benefit from the receipt of proprietary research products and services to be acquired through commissions paid on portfolio transactions of the underlying funds and that the New Portfolios would indirectly 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 also concluded that success of the New Portfolios could attract other business to Janus Capita l or its other funds and that the success of Janus Capital could enhance Janus Capital's ability to serve the New Portfolios.
After full consideration of the above factors as well as other factors, the Trustees, including all of the Independent Trustees, concluded that approval of the New Portfolios' agreements were in the best interest of the New Portfolios and their shareholders.
Janus Smart Portfolios April 30, 2006 37
Explanations of Charts, Tables and
Financial Statements (unaudited)
1. PERFORMANCE OVERVIEWS
Performance overview graphs compare the performance of a hypothetical $10,000 investment in each Portfolio 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 any dividends, distributions and capital gains, 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.
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'll 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 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 and expense offsets 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, prospectuses and other expenses. Expense offsets, if any, are also shown.
The last section lists the increase or decrease in the value of securities held in the Portfolios. 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 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'll notice that dividend distributions had little effect on each Portfolio's net assets.
38 Janus Smart Portfolios April 30, 2006
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 the Portfolios' NAV for current and past reporting periods. Not only does this table provide you with total return, it also reports total distributions, asset size, expense ratios and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income per share, which comprises dividends and interest income earned on securities held by the Portfolios. Following is the total of gains/(losses), realized and unrealized. Dividends and distributions are then subtracted to arrive at the NAV per share at the end of the period.
The next line reflects the average annual total return reported the last day of the period.
Also included are the expense ratios, or the percentage of 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 average shareholder account size and the frequency of dividend payments.
The Portfolios' expenses may be reduced through expense reduction arrangements. These arrangements may include the use of transfer agent fee offsets. The Statement of Operations reflects total expenses before any such offset, the amount of offset and the net expenses. The expense ratios listed in the Financial Highlights reflect total expenses prior to any expense offsets (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 ratio is the portfolio turnover rate, which measures the buying and selling activity in a Portfolio. Portfolio turnover is affected by changes in the target allocation. 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 Smart Portfolios April 30, 2006 39
Notes
40 Janus Smart Portfolios April 30, 2006
Notes
Janus Smart Portfolios April 30, 2006 41
Janus provides access to a wide range of investment disciplines.
Asset Allocation
Janus asset allocation funds 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.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
151 Detroit Street
Denver, CO 80206
1-800-525-3713
Funds distributed by Janus Distributors LLC (6/06)
C-0606-22 111-24-106 06-06
Item 2 - Code of Ethics
Not applicable to semi-annual reports;
Item 3 - Audit Committee Financial Expert
Not applicable to semi-annual reports;
Item 4 - Principal Accountant Fees and Services
Not applicable to semi-annual reports;
Item 5 - Audit Committee of Listed Registrants
Not applicable.
Item 6 - Schedule of Investments
Please see Schedule of Investments contained in the Reports to Shareholders included under Item 1 of this Form N-CSR.
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 Directors.
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.
(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.
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 | ||
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By: |
| /s/ Kelley Abbott Howes |
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| Kelley Abbott Howes, |
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| President and Chief Executive Officer of Janus Investment Fund (Principal |
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| Executive Officer) |
Date: June 30, 2006
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.
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By: |
| /s/ Kelley Abbott Howes |
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| Kelley Abbott Howes, |
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| President and Chief Executive Officer of Janus Investment Fund (Principal |
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| Executive Officer) |
Date: June 30, 2006
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By: |
| /s/ Jesper Nergaard |
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| Jesper Nergaard, |
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| Vice President, Chief Financial Officer, Treasurer and Principal |
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| Accounting Officer of Janus Investment Fund (Principal Accounting |
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| Officer and Principal Financial Officer) |
Date: June 30, 2006