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FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number | 811-1879 | ||||||||
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Janus Investment Fund | |||||||||
(Exact name of registrant as specified in charter) | |||||||||
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151 Detroit Street, Denver, Colorado |
| 80206 | |||||||
(Address of principal executive offices) |
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Stephanie Grauerholz-Lofton, 151 Detroit Street, Denver, Colorado 80206 | |||||||||
(Name and address of agent for service) | |||||||||
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Registrant’s telephone number, including area code: | 303-333-3863 |
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Date of fiscal year end: | 10/31 |
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Date of reporting period: | 4/30/07 |
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Item 1 - Reports to Shareholders
2007 Semiannual Report
Janus Growth Funds
Growth
Janus Fund
Janus Enterprise Fund
Janus Orion Fund
Janus Research Fund
Janus Triton Fund
Janus Twenty Fund
Janus Venture Fund
Specialty Growth
Janus Global Life Sciences Fund
Janus Global Technology Fund
Look Inside. . .
• Portfolio management perspective
• Investment strategy behind your fund
• Fund performance, characteristics and holdings
Table of Contents
Janus Growth Funds
Co-Chief Investment Officers' Letter to Shareholders | 1 | ||||||
Useful Information About Your Fund Report | 4 | ||||||
Management Commentaries and Schedules of Investments | |||||||
Janus Fund | 5 | ||||||
Janus Enterprise Fund | 13 | ||||||
Janus Orion Fund | 21 | ||||||
Janus Research Fund | 29 | ||||||
Janus Triton Fund | 37 | ||||||
Janus Twenty Fund | 45 | ||||||
Janus Venture Fund | 51 | ||||||
Janus Global Life Sciences Fund | 59 | ||||||
Janus Global Technology Fund | 66 | ||||||
Statements of Assets and Liabilities | 74 | ||||||
Statements of Operations | 76 | ||||||
Statements of Changes in Net Assets | 78 | ||||||
Financial Highlights | 82 | ||||||
Notes to Schedules of Investments | 87 | ||||||
Notes to Financial Statements | 91 | ||||||
Additional Information | 102 | ||||||
Explanations of Charts, Tables and Financial Statements | 105 | ||||||
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.
Co–Chief Investment Officers' Letter to the Shareholders
Jonathan Coleman
Co-Chief Investment Officer
Gibson Smith
Co-Chief Investment Officer
Dear Shareholders,
We would like to thank you for your investment in the Janus Funds. Your support is what drives us in our quest to deliver strong, consistent fund performance.
Major Market Themes
Equity markets delivered healthy gains during the six months ended April 30, 2007, amid continued evidence of strong U.S. economic growth with modest inflation. Despite a brief bout of market volatility in late February and early March, markets rebounded quickly on hopes of monetary easing by the Federal Reserve (Fed). While U.S. corporate profit growth showed signs of slowing, robust mergers and acquisitions (M&A) and private equity transactions continued to provide valuation support to equities in the U.S. and around the globe.
Continued Strong Performance
We are pleased to report that several fund managers continued to deliver strong performance compared to their peers. For the one-year period ended April 30, 2007, 81% of Janus' retail funds ranked within Lipper's top two quartiles based on total returns. For the three-year period, 68% of our retail funds achieved first- or second- quartile Lipper rankings, and 67% ranked in Lipper's top two quartiles for the five-year period. (See complete rankings on page 3).
Investment Team Depth
We're proud of the depth we've built in our investment team over the past few years. Recently, we said farewell to several long-term Janus portfolio managers who announced their retirements. In transitioning the leadership of their portfolios, we're confident that our investment team bench strength will ensure smooth transitions.
Management of Janus Global Life Sciences Fund will reside in the capable hands of Andy Acker. Barney Wilson will assume sole portfolio management responsibilities for Janus Global Technology Fund. In addition, Gibson Smith and Darrell Watters, with more than 33 years of combined investment experience, will co-manage Janus Flexible Bond Fund. Jason Groom, a seasoned fixed-income professional with 13 years of investment experience, will assume co-portfolio management responsibilities with Darrell Watters for Janus Short-Term Bond Fund, previously managed by Gibson Smith. Lastly, Craig Jacobson will join Eric Thorderson as Co-Portfolio Manager of all Janus money market funds, with the exception of Janus Tax-Exempt Money Market Fund, for which he will be sole Portfolio Manager.
It's important to note that we will continue to focus on the same investment objectives and employ the same in-depth, fundamental analysis and company-by-company approach to portfolio construction that are Janus hallmarks. We believe all of these individuals possess the skills and experience necessary to lead your Funds to strong performance.
Outlook
Looking ahead, with most U.S. equity indexes near all-time highs at the end of the period, we will closely monitor several fundamental factors for directional cues. First, despite the weakness in the U.S. housing sector and the associated credit quality issues in the subprime mortgage market, the U.S. unemployment rate was near historic lows. We intend to watch the labor market closely for any sign of a slowdown that could impact consumer sentiment and economic growth. Similarly, we plan to monitor the higher-quality prime mortgage market and other areas of consumer lending for any indication of credit quality deterioration.
Second, U.S. corporate profit growth has experienced double-digit gains for several years, which, combined with strong liquidity from corporate M&A and private equity transactions, has supported higher equity valuations. We will continue to watch both the future path of corporate earnings and the overall liquidity in the markets to determine whether current valuations can be sustained.
In summary, while there are both positive and negative factors that could influence the markets in the coming months, we view the fundamental economic outlook as positive. While inflationary concerns and questions about the strength of consumer spending abound, we feel valuations for equities are reasonable by historic standards. In fact, as overall economic growth slows, investors could place an increasing premium on the shares of companies with strong growth prospects. We believe Janus' fundamental research can be beneficial in such an environment. Regardless of the macroeconomic
Janus Growth Funds April 30, 2007 1
Continued
climate, we remain dedicated to rewarding your confidence in Janus with strong, consistent fund performance.
Sincerely,
Jonathan Coleman
Co-Chief Investment Officer
Gibson Smith
Co-Chief Investment Officer
2 Janus Growth Funds April 30, 2007
Lipper Rankings (unaudited)
Lipper Rankings – Based on total return as of 4/30/07 | |||||||||||||||||||||||||||||||||||||||||||||||
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 Fund | |||||||||||||||||||||||||||||||||||||||||||||||
(Inception Date) | |||||||||||||||||||||||||||||||||||||||||||||||
Janus Fund (2/70) | Large-Cap Growth Funds | 5 | 34/723 | 19 | 117/620 | 29 | 147/506 | 38 | 74/195 | 10 | 2/20 | ||||||||||||||||||||||||||||||||||||
Janus Enterprise Fund(1) (9/92) | Mid-Cap Growth Funds | 5 | 26/628 | 11 | 53/499 | 6 | 21/393 | 45 | 72/161 | 34 | 17/49 | ||||||||||||||||||||||||||||||||||||
Janus Orion Fund (6/00) | Multi-Cap Growth Funds | 13 | 62/497 | 2 | 5/395 | 5 | 13/317 | N/A | N/A | 29 | 66/232 | ||||||||||||||||||||||||||||||||||||
Janus Research Fund(1)(2) (5/93) | Large-Cap Growth Funds | 1 | 1/723 | 2 | 9/620 | 3 | 11/506 | 1 | 1/195 | 2 | 1/81 | ||||||||||||||||||||||||||||||||||||
Janus Triton Fund(1) (2/05) | Small-Cap Growth Funds | 33 | 178/536 | N/A | N/A | N/A | N/A | N/A | N/A | 4 | 21/476 | ||||||||||||||||||||||||||||||||||||
Janus Twenty Fund* (4/85) | Large-Cap Growth Funds | 2 | 9/723 | 1 | 3/620 | 1 | 3/506 | 3 | 4/195 | 3 | 1/40 | ||||||||||||||||||||||||||||||||||||
Janus Venture Fund* (4/85) | Small-Cap Growth Funds | 3 | 11/536 | 7 | 29/437 | 10 | 33/364 | 27 | 39/147 | 10 | 1/10 | ||||||||||||||||||||||||||||||||||||
Janus Global Life Sciences Fund (12/98) | Health/Biotechnology Funds | 79 | 134/169 | 50 | 75/151 | 56 | 74/132 | N/A | N/A | 38 | 18/47 | ||||||||||||||||||||||||||||||||||||
Janus Global Technology Fund (12/98) | Science & Technology Funds | 33 | 94/287 | 32 | 83/260 | 52 | 125/241 | N/A | N/A | 27 | 20/75 | ||||||||||||||||||||||||||||||||||||
Janus Balanced Fund(1) (9/92) | Mixed-Asset Target Allocation Moderate Funds | 25 | 102/423 | 17 | 53/319 | 39 | 81/212 | 6 | 6/113 | 4 | 1/29 | ||||||||||||||||||||||||||||||||||||
Janus Contrarian Fund (2/00) | Multi-Cap Core Funds | 1 | 2/897 | 1 | 1/661 | 1 | 2/479 | N/A | N/A | 11 | 31/323 | ||||||||||||||||||||||||||||||||||||
Janus Fundamental Equity Fund(1) (6/96) | Large-Cap Core Funds | 90 | 713/795 | 1 | 10/670 | 7 | 41/567 | 1 | 2/255 | 1 | 1/212 | ||||||||||||||||||||||||||||||||||||
Janus Growth and Income Fund(1) (5/91) | Large-Cap Core Funds | 97 | 772/795 | 12 | 79/670 | 28 | 159/567 | 4 | 9/255 | 6 | 4/76 | ||||||||||||||||||||||||||||||||||||
INTECH Risk-Managed Stock Fund (2/03) | Multi-Cap Core Funds | 49 | 434/897 | 22 | 144/661 | N/A | N/A | N/A | N/A | 32 | 172/548 | ||||||||||||||||||||||||||||||||||||
Janus Mid Cap Value Fund - Inv(1)(3) (8/98) | Mid-Cap Value Funds | 43 | 128/300 | 63 | 147/232 | 41 | 73/178 | N/A | N/A | 6 | 4/68 | ||||||||||||||||||||||||||||||||||||
Janus Small Cap Value Fund - Inv*(3) (10/87) | Small-Cap Core Funds | 14 | 98/713 | 74 | 410/556 | 81 | 350/432 | 11 | 16/145 | 16 | 21/132 | ||||||||||||||||||||||||||||||||||||
Janus Federal Tax-Exempt Fund(1) (5/93) | General Municipal Debt Funds | 56 | 135/241 | 71 | 164/230 | 72 | 155/216 | 79 | 109/137 | 80 | 55/68 | ||||||||||||||||||||||||||||||||||||
Janus Flexible Bond Fund(1) (7/87) | Intermediate Investment Grade Debt Funds | 38 | 198/530 | 52 | 226/442 | 18 | 65/380 | 31 | 54/174 | 24 | 6/24 | ||||||||||||||||||||||||||||||||||||
Janus High-Yield Fund(1) (12/95) | High Current Yield Funds | 40 | 174/443 | 39 | 146/378 | 68 | 209/308 | 16 | 20/127 | 5 | 5/99 | ||||||||||||||||||||||||||||||||||||
Janus Short-Term Bond Fund(1) (9/92) | Short Investment Grade Debt Funds | 53 | 126/237 | 51 | 101/199 | 46 | 65/142 | 41 | 32/79 | 54 | 13/24 | ||||||||||||||||||||||||||||||||||||
Janus Global Opportunities Fund(1) (6/01) | Global Funds | 33 | 132/399 | 94 | 281/301 | 85 | 198/234 | N/A | N/A | 24 | 49/209 | ||||||||||||||||||||||||||||||||||||
Janus Global Research Fund(1)(4) (2/05) | Multi-Cap Growth Funds | 4 | 15/497 | N/A | N/A | N/A | N/A | N/A | N/A | 1 | 4/424 | ||||||||||||||||||||||||||||||||||||
Janus Overseas Fund(1) (5/94) | International Funds | 1 | 1/987 | 1 | 1/803 | 2 | 12/661 | 4 | 11/280 | 1 | 1/117 | ||||||||||||||||||||||||||||||||||||
Janus Worldwide Fund(1) (5/91) | Global Funds | 7 | 25/399 | 90 | 270/301 | 96 | 225/234 | 69 | 66/96 | 32 | 5/15 | ||||||||||||||||||||||||||||||||||||
Janus Smart Portfolio - Growth (12/05) | Mixed-Asset Target Allocation Growth Funds | 11 | 64/609 | N/A | N/A | N/A | N/A | N/A | N/A | 7 | 41/598 | ||||||||||||||||||||||||||||||||||||
Janus Smart Portfolio - Moderate (12/05) | Mixed-Asset Target Allocation Moderate Funds | 18 | 73/423 | N/A | N/A | N/A | N/A | N/A | N/A | 9 | 35/417 | ||||||||||||||||||||||||||||||||||||
Janus Smart Portfolio - Conservative (12/05) | Mixed-Asset Target Allocation Conservative Funds | 8 | 28/365 | N/A | N/A | N/A | N/A | N/A | N/A | 4 | 11/344 |
(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)Formerly named Janus Mercury Fund.
(3)Rating is for the Investor Share class only; other classes may have different performance characteristics.
(4)Formerly named Janus Research Fund.
*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, 2007 3
Useful Information About Your Fund Report
Management Commentaries
The Management Commentaries in this report include valuable insight from the Funds' managers as well as statistical information to help you understand how your Fund's performance and characteristics stack up against those of comparable indices.
Please keep in mind that the opinions expressed by the Funds' managers in the Management Commentaries are just that: opinions. They are a reflection of their best judgment at the time this report was compiled, which was April 30, 2007. 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 Management Commentary within this Semiannual Report. Please refer to this information when reviewing the Expense Example for each Fund.
Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including redemption fees (where applicable) (and any related exchange fees) and (2) ongoing costs, including management fees and other Fund expenses. The example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the six-month period from November 1, 2006 to April 30, 2007.
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, 2008. 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.
4 Janus Growth Funds April 30, 2007
Janus Fund (unaudited)
Ticker: JANSX
Fund Snapshot
For more than 36 years, this traditional growth fund has exemplified Janus' research and stock-picking abilities.
David Corkins
portfolio manager
Let me begin by emphasizing how much I value this opportunity to speak directly with my fellow Janus Fund shareholders. I am pleased to report that performance continued to improve. It was particularly satisfying to see that last year's actions – shrinking the names in the portfolio, leveraging the full resources of the research team and diversifying the portfolio more broadly among sectors – began to have a positive impact on performance.
Performance Overview
Equity markets delivered healthy gains during the period amid continued evidence of strong U.S. economic growth with modest inflation. After a brief period of market volatility in late February and early March, markets rebounded quickly on hopes of monetary easing by the Federal Reserve (Fed). While U.S. corporate profit growth showed signs of slowing, robust mergers and acquisitions (M&A) and private equity transactions continued to provide key valuation support to equities in the U.S. and around the globe.
My goal for the Fund is to provide superior long-term returns for shareholders. In practice, these potential long-term returns begin with positive absolute performance and follow with consistent execution in up and down markets. For the six months ending April 30, 2007, Janus Fund returned 10.98%. By comparison, the Fund's primary benchmark, the Russell 1000® Growth Index returned 8.42% and our secondary benchmark the S&P 500® Index returned 8.60%.
Utilities and Industrials Boosted Performance
Within the Fund, holdings within the industrial, consumer discretionary and utilities sectors made positive contributions to performance during the period.
Among the utility holdings, wholesale power provider, NRG Energy, generated significant gains and was the largest individual contributor to performance for the six-month period. I was initially attracted to NRG last year due to what I saw as its reasonable valuation, high free cash generation, improving returns on capital and a management team that is focused on shareholder value-creation. A buy-out of Texas-based TXU, a smaller holding in the portfolio, which also contributed positively to performance, refocused investor attention on the utility industry and led to a revaluation of the group.
Within industrials, Precision Castparts, a supplier to Boeing and other aerospace manufacturers, benefited from Boeing's market share gains in the wide body commercial aircraft market. Precision Castparts also reported improved margins and returns in its specialty metals division. While remaining constructive on the outlook for the company, I trimmed back the position as the risk/reward profile changed due to the strong increase in the share price.
It should be noted that Boeing was also a top contributor to performance for the time period, driven in part by better-than-expected margins. The company has been able to gain market share at Airbus' expense, given operational difficulties by its competitor.
Looking within the healthcare sector, Coventry Health Care moved ahead after it reported improved financial results for 2007 based on market share gains in its Medicare business. Coventry has appealing membership growth, numerous opportunities to raise margins and an attractive valuation.
Information Technology (IT) and Consumer Staples Holdings Detract From Performance
The Fund holdings within the IT and consumer staples sectors detracted from performance during the time period.
The single largest detractor from performance was Advanced Micro Devices (AMD). Our initial thesis on AMD centered on its manufacturing advantages and the potential to improve margins and returns as the company captured market share from its competitor, Intel. However, AMD's fundamental outlook has been negatively impacted by the price war taking place between it and Intel, as well as industry oversupply issues. I also thought that the company's 2006 acquisition of ATI Technologies severely diluted returns on capital. For these reasons, I elected to exit the position during the period.
Another stock that negatively impacted performance was food retailer, Whole Foods Market, which declined after reporting that comparable store sales had moderated to an 8.6% level after posting years of double-digit gains. The company also guided down future comparable store expectations. I have maintained exposure to the name, given the continued robust
Janus Growth Funds April 30, 2007 5
Janus Fund (unaudited)
outlook for growth as Whole Foods seeks to expand its store base over the next few years.
While, in the aggregate, the Fund's healthcare investments made a positive contribution to performance, select holdings declined during the time period. Varian Medical Systems, a manufacturer and distributor of laser-guided radiation therapy instruments, reported inconsistent order growth from both their domestic and international businesses. From a macro perspective, I remain constructive on the outlook for the business, driven by higher rates of cancer, increases in the number of patients qualifying for radiation treatment and reasonable reimbursement rates.
Outlook
With most U.S. equity indexes near all-time highs at the end of the period, we will closely monitor several fundamental factors for directional cues. First, despite the weakness in the U.S. housing sector and the associated credit quality issues in the subprime mortgage market, the U.S. unemployment rate was near historic lows, mitigating the impact of the housing slowdown on consumer spending and the overall U.S. economy. We will watch the labor market closely for any sign of a slowdown that could impact consumer sentiment and economic growth. Similarly, we will monitor the higher-quality prime mortgage market and other areas of consumer lending for any indication of credit quality deterioration. Second, U.S. corporate profit growth experienced double-digit gains for several years, which, combined with strong liquidity from corporate M&A and private equity transacti ons, supported higher equity valuations.
We will continue to watch both the future path of corporate earnings and the overall liquidity in the markets to determine whether current valuations can be sustained. We will also watch market volatility, which in recent years has been well below average compared to the past 30 years. In my opinion, volatility will likely increase in the future and so my goal is for the Fund to capitalize on the situation.
In sum, I am honored to manage Janus Fund and I want to stress that I believe my investment and incentives are in alignment with yours. Lastly, I want to commend the entire investment team at Janus, who work very hard every day to seek attractive opportunities to grow our principal.
Janus Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
NRG Energy, Inc. | 1.14 | % | |||||
Precision Castparts Corp. | 0.83 | % | |||||
Boeing Co. | 0.57 | % | |||||
Coventry Health Care, Inc. | 0.42 | % | |||||
JP Morgan Chase & Co. | 0.40 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Advanced Micro Devices, Inc. | (0.50 | )% | |||||
Whole Foods Market, Inc. | (0.30 | )% | |||||
Varian Medical Systems, Inc. | (0.12 | )% | |||||
SanDisk Corp. | (0.09 | )% | |||||
Electronic Arts, Inc. | (0.08 | )% |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Russell 1000® Growth Index Weighting | |||||||||||||
Industrials | 2.29 | % | 14.20 | % | 14.32 | % | |||||||||
Consumer Discretionary | 1.71 | % | 10.57 | % | 14.20 | % | |||||||||
Health Care | 1.62 | % | 13.15 | % | 17.46 | % | |||||||||
Utilities | 1.22 | % | 3.86 | % | 1.43 | % | |||||||||
Financials | 1.13 | % | 14.84 | % | 8.54 | % |
5 Lowest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Russell 1000® Growth Index Weighting | |||||||||||||
Telecommunication Services | 0.26 | % | 3.02 | % | 0.90 | % | |||||||||
Consumer Staples | 0.63 | % | 9.35 | % | 9.77 | % | |||||||||
Energy | 0.86 | % | 5.95 | % | 4.01 | % | |||||||||
Materials | 0.93 | % | 4.34 | % | 2.84 | % | |||||||||
Information Technology | 1.10 | % | 20.73 | % | 26.54 | % |
6 Janus Growth Funds April 30, 2007
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2007 | |||||||
JP Morgan Chase & Co. Finance - Investment Bankers/Brokers | 3.5 | % | |||||
Boeing Co. Aerospace and Defense | 3.3 | % | |||||
Procter & Gamble Co. Cosmetics and Toiletries | 3.1 | % | |||||
Exxon Mobil Corp. Oil Companies - Integrated | 2.9 | % | |||||
Roche Holding A.G. Medical - Drugs | 2.8 | % | |||||
15.6 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2007 |
Emerging markets comprised 1.0% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2007 | As of October 31, 2006 | ||||||
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Janus Growth Funds April 30, 2007 7
Janus Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | Total Annual Fund Operating Expenses | ||||||||||||||||||||||
Janus Fund | 10.98 | % | 12.79 | % | 5.82 | % | 6.57 | % | 13.83 | % | 0.91 | % | |||||||||||||||
Russell 1000® Growth Index | 8.42 | % | 12.25 | % | 6.22 | % | 5.32 | % | 11.97 | %** | |||||||||||||||||
S&P 500® Index | 8.60 | % | 15.24 | % | 8.54 | % | 8.05 | % | 11.51 | % | |||||||||||||||||
Lipper Quartile | – | 1 | st | 2 | nd | 2 | nd | 1 | st | ||||||||||||||||||
Lipper Ranking - based on total return for Large-Cap Growth Funds | – | 34/723 | 147/506 | 74/195 | 2/20 |
Visit janus.com to view current performance
and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
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.
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.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – February 5, 1970
**The Russell 1000® Growth Index's since inception returns are calculated from December 31, 1978.
8 Janus Growth Funds April 30, 2007
(unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,109.80 | $ | 4.60 | |||||||||
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).
Janus Growth Funds April 30, 2007 9
Janus Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Common Stock - 98.4% | |||||||||||
Aerospace and Defense - 4.8% | |||||||||||
7,834,454 | BAE Systems PLC** | $ | 71,104,166 | ||||||||
4,152,015 | Boeing Co.** | 386,137,395 | |||||||||
1,173,760 | Lockheed Martin Corp.**,# | 112,845,286 | |||||||||
570,086,847 | |||||||||||
Agricultural Chemicals - 2.8% | |||||||||||
2,773,380 | Monsanto Co.# | 163,601,686 | |||||||||
820,225 | Syngenta A.G.# | 163,149,973 | |||||||||
326,751,659 | |||||||||||
Agricultural Operations - 0.6% | |||||||||||
1,947,565 | Archer-Daniels-Midland Co.# | 75,370,766 | |||||||||
Audio and Video Products - 0.6% | |||||||||||
1,420,200 | Sony Corp.** | 75,646,521 | |||||||||
Automotive - Cars and Light Trucks - 1.1% | |||||||||||
2,044,576 | BMW A.G.**,# | 126,644,657 | |||||||||
Beverages - Non-Alcoholic - 0.4% | |||||||||||
976,155 | Coca-Cola Co.# | 50,945,529 | |||||||||
Building - Residential and Commercial - 0.5% | |||||||||||
66,445 | NVR, Inc.*,# | 54,750,680 | |||||||||
Casino Hotels - 1.8% | |||||||||||
1,415,475 | Harrah's Entertainment, Inc. | 120,740,018 | |||||||||
1,132,040 | Station Casinos, Inc. | 98,487,480 | |||||||||
219,227,498 | |||||||||||
Cellular Telecommunications - 1.0% | |||||||||||
2,226,110 | America Movil S.A. de C.V. - Series L (ADR) | 116,937,558 | |||||||||
Chemicals - Diversified - 0.6% | |||||||||||
1,068,600 | Shin-Etsu Chemical Company, Ltd.** | 69,150,272 | |||||||||
Commercial Services - Finance - 0.9% | |||||||||||
826,385 | Moody's Corp.# | 54,640,576 | |||||||||
2,554,860 | Western Union Co. | 53,779,803 | |||||||||
108,420,379 | |||||||||||
Computers - 3.2% | |||||||||||
1,975,165 | Apple, Inc.*,** | 197,121,467 | |||||||||
3,083,050 | Hewlett-Packard Co.# | 129,919,727 | |||||||||
418,570 | Research In Motion, Ltd. (U.S. Shares)* | 55,075,441 | |||||||||
382,116,635 | |||||||||||
Computers - Memory Devices - 1.8% | |||||||||||
13,692,385 | EMC Corp.*,# | 207,850,404 | |||||||||
Consumer Products - Miscellaneous - 1.1% | |||||||||||
1,779,455 | Kimberly-Clark Corp. | 126,643,812 | |||||||||
Containers - Metal and Glass - 0.8% | |||||||||||
1,843,442 | Ball Corp. | 93,444,075 | |||||||||
Cosmetics and Toiletries - 4.1% | |||||||||||
2,743,548 | Avon Products, Inc.# | 109,193,210 | |||||||||
5,808,380 | Procter & Gamble Co. | 373,536,917 | |||||||||
482,730,127 | |||||||||||
Data Processing and Management - 0.8% | |||||||||||
2,388,592 | Paychex, Inc.# | 88,616,763 | |||||||||
Distribution/Wholesale - 0.7% | |||||||||||
7,139,500 | Esprit Holdings, Ltd. | 86,402,649 | |||||||||
Diversified Operations - 2.7% | |||||||||||
8,798,325 | General Electric Co. | 324,306,260 |
Shares or Principal Amount | Value | ||||||||||
E-Commerce/Services - 0.8% | |||||||||||
2,293,993 | eBay, Inc.*,# | $ | 77,858,122 | ||||||||
553,632 | IAC/InterActiveCorp*,# | 21,104,452 | |||||||||
98,962,574 | |||||||||||
Electric - Integrated - 1.6% | |||||||||||
2,820,780 | TXU Corp. | 184,986,752 | |||||||||
Electric Products - Miscellaneous - 0.5% | |||||||||||
1,347,030 | Emerson Electric Co. | 63,296,940 | |||||||||
Electronic Components - Semiconductors - 2.3% | |||||||||||
7,987,059 | Texas Instruments, Inc.# | 274,515,218 | |||||||||
Electronic Forms - 0.7% | |||||||||||
2,104,745 | Adobe Systems, Inc.*,# | 87,473,202 | |||||||||
Enterprise Software/Services - 1.6% | |||||||||||
6,094,540 | Oracle Corp.*,# | 114,577,352 | |||||||||
1,618,235 | SAP A.G. (ADR)**,# | 77,675,280 | |||||||||
192,252,632 | |||||||||||
Entertainment Software - 1.3% | |||||||||||
3,095,341 | Electronic Arts, Inc.*,** | 156,036,140 | |||||||||
Finance - Consumer Loans - 0.8% | |||||||||||
1,863,695 | SLM Corp.# | 100,322,702 | |||||||||
Finance - Credit Card - 1.3% | |||||||||||
2,590,390 | American Express Co. | 157,158,961 | |||||||||
Finance - Investment Bankers/Brokers - 7.1% | |||||||||||
7,859,760 | JP Morgan Chase & Co. | 409,493,495 | |||||||||
1,828,110 | Merrill Lynch & Company, Inc. | 164,950,365 | |||||||||
2,121,572 | UBS A.G.# | 137,503,265 | |||||||||
1,926,370 | UBS A.G. (U.S. Shares) | 125,021,413 | |||||||||
836,968,538 | |||||||||||
Finance - Mortgage Loan Banker - 1.3% | |||||||||||
2,692,175 | Fannie Mae# | 158,622,951 | |||||||||
Finance - Other Services - 0.7% | |||||||||||
158,412 | Chicago Mercantile Exchange Holdings, Inc.# | 81,859,401 | |||||||||
Food - Retail - 0.5% | |||||||||||
1,277,315 | Whole Foods Market, Inc.# | 59,765,569 | |||||||||
Food - Wholesale/Distribution - 0.4% | |||||||||||
1,420,975 | Sysco Corp.# | 46,522,722 | |||||||||
Independent Power Producer - 2.6% | |||||||||||
3,862,770 | NRG Energy, Inc.*,# | 305,004,319 | |||||||||
Internet Infrastructure Software - 0.5% | |||||||||||
1,280,940 | Akamai Technologies, Inc.*,# | 56,463,835 | |||||||||
Investment Management and Advisory Services - 0.3% | |||||||||||
767,370 | T. Rowe Price Group, Inc. | 38,122,942 | |||||||||
Medical - Biomedical and Genetic - 1.9% | |||||||||||
2,868,856 | Celgene Corp.* | 175,459,233 | |||||||||
672,078 | Genentech, Inc.* | 53,759,519 | |||||||||
229,218,752 | |||||||||||
Medical - Drugs - 4.5% | |||||||||||
3,870,030 | Merck & Company, Inc. | 199,074,343 | |||||||||
1,786,843 | Roche Holding A.G. | 337,070,252 | |||||||||
536,144,595 | |||||||||||
Medical - HMO - 2.0% | |||||||||||
4,044,475 | Coventry Health Care, Inc.* | 233,891,989 | |||||||||
Medical - Wholesale Drug Distributors - 0.9% | |||||||||||
1,559,125 | Cardinal Health, Inc.# | 109,060,794 |
See Notes to Schedules of Investments and Financial Statements.
10 Janus Growth Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Medical Instruments - 0.3% | |||||||||||
237,478 | Intuitive Surgical, Inc.* | $ | 30,791,397 | ||||||||
Medical Products - 0.4% | |||||||||||
1,031,070 | Varian Medical Systems, Inc.*,# | 43,521,465 | |||||||||
Metal Processors and Fabricators - 2.1% | |||||||||||
2,347,085 | Precision Castparts Corp.# | 244,355,019 | |||||||||
Multi-Line Insurance - 1.0% | |||||||||||
1,665,050 | American International Group, Inc. | 116,403,646 | |||||||||
Multimedia - 1.3% | |||||||||||
4,276,175 | News Corporation, Inc. - Class A | 95,743,559 | |||||||||
3,396,816 | Publishing & Broadcasting, Ltd. | 57,523,286 | |||||||||
153,266,845 | |||||||||||
Networking Products - 0.5% | |||||||||||
2,353,870 | Cisco Systems, Inc.* | 62,942,484 | |||||||||
Oil and Gas Drilling - 0.7% | |||||||||||
2,499,635 | Nabors Industries, Ltd.* | 80,288,276 | |||||||||
Oil Companies - Exploration and Production - 1.0% | |||||||||||
770,665 | Apache Corp.# | 55,873,213 | |||||||||
1,205,280 | EnCana Corp. (U.S. Shares) | 63,216,936 | |||||||||
119,090,149 | |||||||||||
Oil Companies - Integrated - 3.5% | |||||||||||
4,366,860 | Exxon Mobil Corp.# | 346,641,346 | |||||||||
1,205,330 | Hess Corp. | 68,402,478 | |||||||||
415,043,824 | |||||||||||
Oil Refining and Marketing - 0.8% | |||||||||||
1,396,435 | Valero Energy Corp. | 98,071,630 | |||||||||
Reinsurance - 0.9% | |||||||||||
27,981 | Berkshire Hathaway, Inc. - Class B* | 101,515,068 | |||||||||
Retail - Apparel and Shoe - 2.7% | |||||||||||
2,171,841 | Industria de Diseno Textil S.A.** | 133,133,991 | |||||||||
3,488,650 | Nordstrom, Inc. | 191,596,658 | |||||||||
324,730,649 | |||||||||||
Retail - Consumer Electronics - 0.8% | |||||||||||
1,995,625 | Best Buy Company, Inc.# | 93,095,906 | |||||||||
Retail - Drug Store - 1.8% | |||||||||||
5,985,029 | CVS/Caremark Corp. | 216,897,451 | |||||||||
Retail - Office Supplies - 1.2% | |||||||||||
5,554,802 | Staples, Inc. | 137,759,090 | |||||||||
Savings/Loan/Thrifts - 0.8% | |||||||||||
3,980,575 | Hudson City Bancorp, Inc.# | 53,021,259 | |||||||||
3,033,949 | NewAlliance Bancshares, Inc.# | 47,359,944 | |||||||||
100,381,203 | |||||||||||
Semiconductor Components/Integrated Circuits - 0.3% | |||||||||||
2,227,685 | Marvell Technology Group, Ltd.* | 35,932,559 | |||||||||
Soap and Cleaning Preparations - 1.3% | |||||||||||
2,837,113 | Reckitt Benckiser PLC** | 155,462,896 | |||||||||
Telecommunication Equipment - Fiber Optics - 0.8% | |||||||||||
3,899,530 | Corning, Inc.* | 92,496,852 | |||||||||
Telecommunication Services - 0.6% | |||||||||||
2,449,085 | NeuStar, Inc. - Class A* | 70,435,685 | |||||||||
Telephone - Integrated - 0.5% | |||||||||||
11,038,880 | Level 3 Communications, Inc.*,**,# | 61,376,173 | |||||||||
Therapeutics - 1.9% | |||||||||||
1,799,760 | Amylin Pharmaceuticals, Inc.*,# | 74,384,081 | |||||||||
1,860,404 | Gilead Sciences, Inc.* | 152,032,215 | |||||||||
226,416,296 |
Shares or Principal Amount | Value | ||||||||||
Tobacco - 0.5% | |||||||||||
930,745 | Altria Group, Inc. | $ | 64,146,945 | ||||||||
Transportation - Railroad - 1.4% | |||||||||||
1,923,680 | Canadian National Railway Co. (U.S. Shares) | 96,645,683 | |||||||||
612,905 | Union Pacific Corp.# | 70,024,396 | |||||||||
166,670,079 | |||||||||||
Transportation - Services - 1.2% | |||||||||||
2,662,595 | C.H. Robinson Worldwide, Inc.# | 142,342,329 | |||||||||
Web Portals/Internet Service Providers - 3.2% | |||||||||||
303,565 | Google, Inc. - Class A*,# | 143,094,470 | |||||||||
8,531,825 | Yahoo!, Inc.*,# | 239,232,373 | |||||||||
382,326,843 | |||||||||||
Wireless Equipment - 3.0% | |||||||||||
3,143,975 | Crown Castle International Corp.*,# | 107,964,102 | |||||||||
2,803,700 | Nokia Oyj (ADR)**,# | 70,793,425 | |||||||||
3,943,320 | QUALCOMM, Inc. | 172,717,416 | |||||||||
351,474,943 | |||||||||||
Total Common Stock (cost $8,681,555,849) | 11,679,930,321 | ||||||||||
Money Markets - 1.5% | |||||||||||
45,177,295 | Janus Institutional Cash Management Fund - Institutional Shares, 5.32% | 45,177,295 | |||||||||
128,903,700 | Janus Institutional Money Market Fund - Institutional Shares, 5.26% | 128,903,700 | |||||||||
Total Money Markets (cost $174,080,995) | 174,080,995 | ||||||||||
Other Securities - 6.6% | |||||||||||
2,345,164 | Foreign Government Bonds† | 2,345,164 | |||||||||
734,966,045 | State Street Navigator Securities Lending Prime Portfolio† | 734,966,045 | |||||||||
43,116,592 | U.S. Treasury Notes/Bonds† | 43,116,592 | |||||||||
Total Other Securities (cost $780,427,801) | 780,427,801 | ||||||||||
Total Investments (total cost $9,636,064,645) – 106.5% | 12,634,439,117 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets** – (6.5)% | (771,018,543 | ) | |||||||||
Net Assets – 100% | $ | 11,863,420,574 |
Summary of Investments by Country – (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Australia | $ | 57,523,286 | 0.5 | % | |||||||
Bermuda | 202,623,484 | 1.6 | % | ||||||||
Canada | 214,938,060 | 1.7 | % | ||||||||
Finland | 70,793,425 | 0.6 | % | ||||||||
Germany | 204,319,937 | 1.6 | % | ||||||||
Japan | 144,796,793 | 1.1 | % | ||||||||
Mexico | 116,937,558 | 0.9 | % | ||||||||
Spain | 133,133,991 | 1.1 | % | ||||||||
Switzerland | 762,744,903 | 6.0 | % | ||||||||
United Kingdom | 226,567,062 | 1.8 | % | ||||||||
United States†† | 10,500,060,618 | 83.1 | % | ||||||||
Total | $ | 12,634,439,117 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (75.6% excluding Short-Term Securities and Other Securities).
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2007 11
Janus Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Forward Currency Contracts, Open
Currency Sold and Settlement Date | Currency Units Sold | Currency Value in $U.S. | Unrealized Gain/(Loss) | ||||||||||||
British Pound 10/17/07 | 18,300,000 | $ | 36,522,093 | $ | (1,203,093 | ) | |||||||||
Euro 6/8/07 | 69,900,000 | 95,530,323 | (4,095,531 | ) | |||||||||||
Euro 10/18/07 | 8,500,000 | 11,665,288 | (79,958 | ) | |||||||||||
Japanese Yen 10/18/07 | 3,000,000,000 | 25,670,960 | (46,141 | ) | |||||||||||
Total | $ | 169,388,664 | $ | (5,424,723 | ) |
Value | |||||||
Schedule of Written Options - Calls | |||||||
Apple, Inc. expires May 2007 992 contracts exercise price $110.00 | $ | (9,920 | ) | ||||
Apple, Inc. expires May 2007 1,588 contracts exercise price $115.00 | (7,940 | ) | |||||
Boeing Co. expires May 2007 1,587 contracts exercise price $100.00 | (11,109 | ) | |||||
Electronic Arts, Inc. expires May 2007 398 contracts exercise price $55.00 | (13,930 | ) | |||||
Electronic Arts, Inc. expires May 2007 795 contracts exercise price $60.00 | (3,975 | ) | |||||
Level 3 Communications, Inc. expires May 2007 3,970 contracts exercise price $7.50 | (19,850 | ) | |||||
Lockheed Martin Corp. expires May 2007 795 contracts exercise price $105.00 | (7,950 | ) | |||||
Total Written Options - Calls | |||||||
10,125 contracts (Premiums received $229,431) | $(74,674) | ||||||
Schedule of Written Options - Puts | |||||||
Best Buy Company, Inc. expires May 2007 1,586 contracts exercise price $45.00 | $ | (49,166 | ) | ||||
Total Written Options - Puts | |||||||
1,586 contracts (Premiums received $30,134) | $(49,166) |
See Notes to Schedules of Investments and Financial Statements.
12 Janus Growth Funds April 30, 2007
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, 2007, Janus Enterprise Fund gained 13.60%. By comparison, the Fund's primary benchmark, the Russell Midcap® Growth Index, and the Fund's secondary benchmark, the S&P MidCap 400 Index, returned 11.77% and 11.98%, respectively.
Economic Overview
Equity markets delivered healthy gains during the period amid continued evidence of strong U.S. economic growth with modest inflation. After a brief period of market volatility in late February and early March, markets rebounded quickly on hopes of monetary easing by the Federal Reserve (Fed). While U.S. corporate profit growth showed signs of slowing, robust mergers and acquisitions (M&A) and private equity transactions continued to provide key valuation support to equities in the U.S. and around the globe.
Materials Stocks Boost Performance
Fund performance for the period benefited from solid stock selection in the materials sector, where it held an above-benchmark weighting. Additionally, solid stock selection in the information technology (IT), consumer discretionary and healthcare sectors contributed positively to results.
Owens-Illinois, a materials holding, was our top contributor for the period. The glass manufacturer benefited from a change in management and investor optimism that new CEO Al Stroucken's focus on pricing and cost reduction could improve operating margins. This thesis gained credibility as the company put at least one high profile capital expenditure on hold in the first quarter. Over time, I think this new management focus on margin improvement could help this business become more predictable and, as a result, receive a higher valuation from investors.
Potash Corporation of Saskatchewan, Canada, also within the materials sector, was the second top-performing holding. Potash holds the world's largest excess supply of potash, a key ingredient in fertilizer. As such, the company has benefited from increasing global demand for agricultural land. Further boosting performance, the company's share of the global potash market increased with the flood of a competitor's mine late in 2006.
Financials Stocks Weigh on Results
On the downside, performance for the period was hindered by the Fund's overweight exposure to the financials sector. While the Fund did not have direct exposure to the subprime mortgage market, several individual financial services holdings were pressured by concerns that subprime mortgage delinquencies could lead to problems in other areas of consumer lending and the economy overall.
Advanced Micro Devices (AMD), an IT holding, was our largest detractor from performance in the period. AMD and rival Intel engaged in a series of price cuts that have taken a toll on margins, which undermined my confidence in the company's long-term outlook. As such, I eliminated the position in AMD.
Additionally, while the Fund's healthcare holdings generally performed well for the period, Varian Medical Systems, a maker of cancer-therapy systems, suffered. The company reported slowing order growth and longer sales cycles due to heightened competition affecting its oncology franchise. Given my concerns over changes in the company's competitive landscape, I trimmed my investment in Varian late in the period.
Outlook
With most U.S. equity indexes near all-time highs at the end of the period, I am closely monitoring several fundamental factors for directional cues. First, despite the weakness in the U.S. housing sector and the associated credit quality issues in the subprime mortgage market, the U.S. unemployment rate is near historical lows, mitigating the impact of the housing slowdown on consumer spending and the overall U.S. economy. I will be watching the labor market closely for any sign of a slowdown which could impact consumer sentiment and economic growth. Similarly, I will be monitoring the higher-quality prime mortgage market and other areas of consumer lending for any indication of a deterioration in credit quality. Second, U.S. corporate profit growth has experienced double-digit gains for several years, which, combined with strong liquidity from corporate M&A and private equity transactions, has supported higher equity valuations. I will continue to watch both the future path of corporate earnings and the overall liquidity in the markets to determine whether current valuations can be sustained.
Janus Growth Funds April 30, 2007 13
Janus Enterprise Fund (unaudited)
Going forward, I remain constructive on the market outlook, but caution that uncertainty over inflation pressures and the Fed policy could keep markets volatile in the near term. Such volatility could present me with attractive buying opportunities as I continue to rely on research-driven approaches to help identify promising investments.
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 | |||||||
Owens-Illinois, Inc. | 1.23 | % | |||||
Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 1.05 | % | |||||
Precision Castparts Corp. | 0.62 | % | |||||
Ball Corp. | 0.61 | % | |||||
Cypress Semiconductor Corp. | 0.58 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Advanced Micro Devices, Inc. | (0.30 | )% | |||||
Varian Medical Systems, Inc. | (0.27 | )% | |||||
Corporate Executive Board Co. | (0.18 | )% | |||||
Jackson Hewitt Tax Service, Inc. | (0.17 | )% | |||||
Office Depot, Inc. | (0.15 | )% |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Russell Midcap® Growth Index Weighting | |||||||||||||
Materials | 3.11 | % | 7.44 | % | 4.09 | % | |||||||||
Health Care | 2.62 | % | 17.13 | % | 14.85 | % | |||||||||
Consumer Discretionary | 2.38 | % | 18.17 | % | 22.38 | % | |||||||||
Information Technology | 2.25 | % | 17.84 | % | 18.49 | % | |||||||||
Industrials | 1.48 | % | 12.25 | % | 14.62 | % |
5 Lowest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Russell Midcap® Growth Index Weighting | |||||||||||||
Consumer Staples | 0.25 | % | 1.91 | % | 4.37 | % | |||||||||
Telecommunication Services | 0.30 | % | 3.70 | % | 2.32 | % | |||||||||
Utilities | 0.35 | % | 0.68 | % | 1.78 | % | |||||||||
Energy | 0.40 | % | 4.82 | % | 7.74 | % | |||||||||
Financials | 0.65 | % | 16.06 | % | 9.36 | % |
14 Janus Growth Funds April 30, 2007
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2007 | |||||||
EOG Resources, Inc. Oil Companies - Exploration and Production | 3.1 | % | |||||
Lamar Advertising Co. Advertising Sales | 3.0 | % | |||||
T. Rowe Price Group, Inc. Investment Management and Advisory Services | 3.0 | % | |||||
Celgene Corp. Medical - Biomedical and Genetic | 2.9 | % | |||||
Ball Corp. Containers - Metal and Glass | 2.9 | % | |||||
14.9 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2007 |
Emerging markets comprised 1.1% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2007 | As of October 31, 2006 | ||||||
![]() | ![]() | ||||||
Janus Growth Funds April 30, 2007 15
Janus Enterprise Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | Total Annual Fund Operating Expenses | ||||||||||||||||||||||
Janus Enterprise Fund | 13.60 | % | 14.94 | % | 12.76 | % | 9.86 | % | 11.85 | % | 1.00 | % | |||||||||||||||
Russell Midcap® Growth Index | 11.77 | % | 11.13 | % | 11.60 | % | 9.65 | % | 11.36 | % | |||||||||||||||||
S&P MidCap 400 Index | 11.98 | % | 10.19 | % | 11.47 | % | 14.34 | % | 14.70 | % | |||||||||||||||||
Lipper Quartile | – | 1 | st | 1 | st | 2 | nd | 2 | nd | ||||||||||||||||||
Lipper Ranking - based on total return for Mid-Cap Growth Funds | – | 26/628 | 21/393 | 72/161 | 17/49 |
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and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
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.
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.
September 3, 1992 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – September 1, 1992
16 Janus Growth Funds April 30, 2007
(unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,136.00 | $ | 5.03 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.08 | $ | 4.76 |
*Expenses are equal to the annualized expense ratio of 0.95%, 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, 2007 17
Janus Enterprise Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Common Stock - 99.2% | |||||||||||
Advertising Sales - 3.0% | |||||||||||
954,090 | Lamar Advertising Co.* | $ | 57,569,790 | ||||||||
Aerospace and Defense - 1.5% | |||||||||||
348,265 | Embraer-Empresa Brasileira de Aeronautica S.A. (ADR) | 16,337,111 | |||||||||
384,870 | Spirit Aerosystems Holdings, Inc.*,# | 12,173,438 | |||||||||
28,510,549 | |||||||||||
Aerospace and Defense - Equipment - 0.3% | |||||||||||
64,875 | Alliant Techsystems, Inc.*,# | 6,041,809 | |||||||||
Agricultural Chemicals - 2.4% | |||||||||||
260,560 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 46,775,731 | |||||||||
Airlines - 1.2% | |||||||||||
503,646 | Ryanair Holdings PLC (ADR)*,# | 23,505,159 | |||||||||
Batteries and Battery Systems - 0.7% | |||||||||||
139,195 | Energizer Holdings, Inc.*,# | 13,526,970 | |||||||||
Beverages - Wine and Spirits - 0.5% | |||||||||||
599,236 | C&C Group PLC | 10,061,510 | |||||||||
Building - Mobile Home and Manufactured Homes - 0.4% | |||||||||||
172,055 | Thor Industries, Inc.# | 6,852,951 | |||||||||
Building - Residential and Commercial - 1.1% | |||||||||||
25,410 | NVR, Inc.*,# | 20,937,840 | |||||||||
Building and Construction Products - Miscellaneous - 0.6% | |||||||||||
228,925 | USG Corp.*,# | 10,564,889 | |||||||||
Casino Hotels - 1.7% | |||||||||||
819,740 | Melco PBL Entertainment (Macau), Ltd. (ADR)*,# | 14,279,871 | |||||||||
217,190 | Station Casinos, Inc. | 18,895,530 | |||||||||
33,175,401 | |||||||||||
Casino Services - 1.4% | |||||||||||
791,005 | Scientific Games Corp. - Class A*,# | 26,332,556 | |||||||||
Cellular Telecommunications - 1.8% | |||||||||||
338,020 | MetroPCS Communications, Inc.*,# | 9,481,461 | |||||||||
318,905 | N.I.I. Holdings, Inc.*,# | 24,475,959 | |||||||||
33,957,420 | |||||||||||
Commercial Banks - 0.5% | |||||||||||
183,970 | SVB Financial Group*,# | 9,422,943 | |||||||||
Commercial Services - 1.0% | |||||||||||
698,517 | Iron Mountain, Inc.*,# | 19,628,328 | |||||||||
Commercial Services - Finance - 1.9% | |||||||||||
113,030 | Equifax, Inc.# | 4,498,594 | |||||||||
429,780 | Jackson Hewitt Tax Service, Inc.# | 11,853,332 | |||||||||
311,723 | Moody's Corp.# | 20,611,125 | |||||||||
36,963,051 | |||||||||||
Computer Services - 2.5% | |||||||||||
843,640 | Ceridian Corp.* | 28,481,286 | |||||||||
457,655 | IHS, Inc. - Class A*,# | 18,919,458 | |||||||||
47,400,744 | |||||||||||
Computers - 1.1% | |||||||||||
210,702 | Apple, Inc.*,# | 21,028,060 | |||||||||
Consulting Services - 1.2% | |||||||||||
117,795 | Corporate Executive Board Co.# | 7,496,474 | |||||||||
589,055 | Gartner Group, Inc.*,# | 14,861,857 | |||||||||
22,358,331 |
Shares or Principal Amount | Value | ||||||||||
Containers - Metal and Glass - 5.3% | |||||||||||
1,084,495 | Ball Corp. | $ | 54,973,051 | ||||||||
1,545,605 | Owens-Illinois, Inc.* | 46,507,254 | |||||||||
101,480,305 | |||||||||||
Data Processing and Management - 2.3% | |||||||||||
324,247 | Global Payments, Inc.# | 12,314,901 | |||||||||
351,130 | NAVTEQ Corp.*,# | 12,415,957 | |||||||||
532,351 | Paychex, Inc.# | 19,750,222 | |||||||||
44,481,080 | |||||||||||
Dental Supplies and Equipment - 0.7% | |||||||||||
394,555 | Sirona Dental Systems, Inc.*,# | 13,024,261 | |||||||||
Diagnostic Kits - 1.8% | |||||||||||
701,180 | Dade Behring Holdings, Inc. | 34,434,950 | |||||||||
Distribution/Wholesale - 1.2% | |||||||||||
1,223,000 | Esprit Holdings, Ltd. | 14,800,818 | |||||||||
2,701,600 | Li & Fung, Ltd. | 8,316,876 | |||||||||
23,117,694 | |||||||||||
Diversified Operations - 0.6% | |||||||||||
35,394,279 | Polytec Asset Holdings, Ltd.§ | 10,856,498 | |||||||||
E-Commerce/Services - 0.5% | |||||||||||
226,520 | IAC/InterActiveCorp*,# | 8,634,942 | |||||||||
Electric Products - Miscellaneous - 1.2% | |||||||||||
606,857 | AMETEK, Inc. | 22,016,772 | |||||||||
Electronic Components - Semiconductors - 1.5% | |||||||||||
445,695 | International Rectifier Corp.*,# | 15,724,119 | |||||||||
180,525 | Microchip Technology, Inc.# | 7,282,379 | |||||||||
196,710 | SiRF Technology Holdings, Inc.* | 4,772,185 | |||||||||
27,778,683 | |||||||||||
Electronic Measuring Instruments - 1.0% | |||||||||||
647,690 | Trimble Navigation, Ltd.*,# | 18,575,749 | |||||||||
Entertainment Software - 1.8% | |||||||||||
1,333,031 | Activision, Inc.*,# | 26,660,620 | |||||||||
148,480 | Electronic Arts, Inc.* | 7,484,877 | |||||||||
34,145,497 | |||||||||||
Fiduciary Banks - 0.9% | |||||||||||
280,590 | Northern Trust Corp. | 17,663,141 | |||||||||
Finance - Consumer Loans - 0.8% | |||||||||||
552,000 | Nelnet, Inc. - Class A# | 14,843,280 | |||||||||
Finance - Investment Bankers/Brokers - 0.5% | |||||||||||
366,035 | optionsXpress Holdings, Inc.# | 9,033,744 | |||||||||
Finance - Other Services - 1.4% | |||||||||||
51,920 | Chicago Mercantile Exchange Holdings, Inc.# | 26,829,660 | |||||||||
Food - Canned - 0.9% | |||||||||||
582,729 | TreeHouse Foods, Inc.* | 17,563,452 | |||||||||
Human Resources - 0.2% | |||||||||||
141,935 | Robert Half International, Inc. | 4,726,436 | |||||||||
Independent Power Producer - 0.8% | |||||||||||
200,115 | NRG Energy, Inc.*,# | 15,801,080 | |||||||||
Industrial Automation and Robotics - 0.4% | |||||||||||
130,122 | Rockwell Automation, Inc.# | 7,747,464 | |||||||||
Instruments - Controls - 0.6% | |||||||||||
117,590 | Mettler-Toledo International, Inc.* | 11,479,136 | |||||||||
Instruments - Scientific - 1.4% | |||||||||||
499,274 | Thermo Electron Corp.* | 25,992,204 | |||||||||
Investment Management and Advisory Services - 3.6% | |||||||||||
272,665 | National Financial Partners Corp. | 12,561,677 | |||||||||
1,133,730 | T. Rowe Price Group, Inc.# | 56,323,705 | |||||||||
68,885,382 |
See Notes to Schedules of Investments and Financial Statements.
18 Janus Growth Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Machinery - General Industrial - 0.2% | |||||||||||
10,832,000 | Shanghai Electric Group Company, Ltd. | $ | 4,618,930 | ||||||||
Machinery - Pumps - 0.5% | |||||||||||
252,575 | Graco, Inc.# | 9,976,713 | |||||||||
Medical - Biomedical and Genetic - 2.9% | |||||||||||
913,148 | Celgene Corp.* | 55,848,131 | |||||||||
Medical - HMO - 2.0% | |||||||||||
649,733 | Coventry Health Care, Inc.* | 37,574,059 | |||||||||
Medical - Nursing Homes - 1.3% | |||||||||||
373,885 | Manor Care, Inc. | 24,261,398 | |||||||||
Medical Instruments - 0.9% | |||||||||||
46,420 | Intuitive Surgical, Inc.* | 6,018,817 | |||||||||
254,595 | Kyphon, Inc.*,# | 11,866,673 | |||||||||
17,885,490 | |||||||||||
Medical Labs and Testing Services - 0.4% | |||||||||||
131,200 | Covance, Inc.*,# | 7,937,600 | |||||||||
Medical Products - 0.5% | |||||||||||
235,110 | Varian Medical Systems, Inc.* | 9,923,993 | |||||||||
Metal Processors and Fabricators - 1.4% | |||||||||||
258,200 | Precision Castparts Corp. | 26,881,202 | |||||||||
Multi-Line Insurance - 1.3% | |||||||||||
425,345 | Assurant, Inc.# | 24,470,098 | |||||||||
Networking Products - 0.5% | |||||||||||
401,950 | Juniper Networks, Inc.*,# | 8,987,602 | |||||||||
Oil and Gas Drilling - 0.6% | |||||||||||
380,810 | Nabors Industries, Ltd.* | 12,231,617 | |||||||||
Oil Companies - Exploration and Production - 3.9% | |||||||||||
256,350 | Chesapeake Energy Corp.# | 8,651,813 | |||||||||
798,985 | EOG Resources, Inc.# | 58,677,457 | |||||||||
210,155 | Forest Oil Corp.* | 7,405,862 | |||||||||
74,735,132 | |||||||||||
Physician Practice Management - 0.8% | |||||||||||
262,115 | Pediatrix Medical Group, Inc.* | 14,953,661 | |||||||||
Property and Casualty Insurance - 0.6% | |||||||||||
346,367 | W. R. Berkley Corp. | 11,253,464 | |||||||||
Racetracks - 0.9% | |||||||||||
347,775 | Penn National Gaming, Inc.* | 16,811,444 | |||||||||
Real Estate Management/Services - 0.7% | |||||||||||
388,500 | CB Richard Ellis Group, Inc.*,# | 13,150,725 | |||||||||
Real Estate Operating/Development - 0.9% | |||||||||||
313,435 | St. Joe Co.# | 17,749,824 | |||||||||
Recreational Vehicles - 0.6% | |||||||||||
230,255 | Polaris Industries, Inc.# | 11,634,785 | |||||||||
Reinsurance - 1.8% | |||||||||||
9,399 | Berkshire Hathaway, Inc. - Class B* | 34,099,572 | |||||||||
REIT - Mortgages - 1.1% | |||||||||||
812,335 | CapitalSource, Inc.# | 20,933,873 | |||||||||
Respiratory Products - 1.5% | |||||||||||
726,720 | Respironics, Inc.*,# | 29,621,107 | |||||||||
Retail - Apparel and Shoe - 2.4% | |||||||||||
302,230 | Abercrombie & Fitch Co. - Class A# | 24,680,102 | |||||||||
170,800 | J. Crew Group, Inc.*,# | 6,915,692 | |||||||||
253,315 | Nordstrom, Inc.# | 13,912,060 | |||||||||
45,507,854 | |||||||||||
Retail - Gardening Products - 0.7% | |||||||||||
246,055 | Tractor Supply Co.*,# | 12,730,886 |
Shares or Principal Amount | Value | ||||||||||
Retail - Office Supplies - 2.0% | |||||||||||
299,625 | Office Depot, Inc.*,# | $ | 10,073,393 | ||||||||
1,118,815 | Staples, Inc.# | 27,746,612 | |||||||||
37,820,005 | |||||||||||
Schools - 0.5% | |||||||||||
201,754 | Apollo Group, Inc. - Class A*,# | 9,542,964 | |||||||||
Semiconductor Components/Integrated Circuits - 2.8% | |||||||||||
1,582,555 | Cypress Semiconductor Corp.* | 36,113,905 | |||||||||
1,038,310 | Marvell Technology Group, Ltd.* | 16,747,940 | |||||||||
52,861,845 | |||||||||||
Telecommunication Equipment - 0.6% | |||||||||||
240,200 | CommScope, Inc.*,# | 11,205,330 | |||||||||
Telecommunication Services - 1.8% | |||||||||||
562,260 | Amdocs, Ltd. (U.S. Shares)*,# | 20,663,055 | |||||||||
625,400 | Time Warner Telecom, Inc. - Class A*,# | 12,820,700 | |||||||||
33,483,755 | |||||||||||
Therapeutics - 1.9% | |||||||||||
283,827 | Gilead Sciences, Inc.* | 23,194,342 | |||||||||
605,415 | MannKind Corp.*,# | 8,802,734 | |||||||||
91,860 | United Therapeutics Corp.* | 5,135,893 | |||||||||
37,132,969 | |||||||||||
Toys - 0.8% | |||||||||||
488,092 | Marvel Entertainment, Inc.* | 14,413,357 | |||||||||
Transportation - Equipment and Leasing - 0.4% | |||||||||||
170,715 | GATX Corp.# | 8,366,742 | |||||||||
Transportation - Marine - 0.4% | |||||||||||
146,215 | Alexander & Baldwin, Inc.# | 7,815,192 | |||||||||
Transportation - Railroad - 0.9% | |||||||||||
325,590 | Canadian National Railway Co. (U.S. Shares) | 16,357,642 | |||||||||
Transportation - Services - 0.8% | |||||||||||
358,795 | Expeditors International of Washington, Inc.# | 14,997,631 | |||||||||
Transportation - Truck - 0.8% | |||||||||||
327,920 | Landstar System, Inc.# | 15,841,815 | |||||||||
Web Hosting/Design - 0.9% | |||||||||||
211,176 | Equinix, Inc.*,# | 17,626,861 | |||||||||
Wireless Equipment - 2.0% | |||||||||||
1,091,990 | Crown Castle International Corp.*,# | 37,498,937 | |||||||||
Total Common Stock (cost $1,198,584,951) | 1,892,469,647 | ||||||||||
Money Markets - 0.8% | |||||||||||
11,772,399 | Janus Institutional Cash Management Fund - Institutional Shares, 5.32% | 11,772,399 | |||||||||
4,252,600 | Janus Institutional Money Market Fund - Institutional Shares, 5.26% | 4,252,600 | |||||||||
Total Money Markets (cost $16,024,999) | 16,024,999 | ||||||||||
Other Securities - 17.0% | |||||||||||
324,530,053 | State Street Navigator Securities Lending Prime Portfolio† | 324,530,053 | |||||||||
745,249 | U.S. Treasury Notes/Bonds† | 745,249 | |||||||||
Total Other Securities (cost $325,275,302) | 325,275,302 | ||||||||||
Total Investments (total cost $1,539,885,252) – 117.0% | 2,233,769,948 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (17.0)% | (325,363,850 | ) | |||||||||
Net Assets – 100% | $ | 1,908,406,098 |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2007 19
Janus Enterprise Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Summary of Investments by Country – (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Bermuda | $ | 52,097,251 | 2.3 | % | |||||||
Brazil | 16,337,111 | 0.7 | % | ||||||||
Canada | 63,133,373 | 2.8 | % | ||||||||
Cayman Islands | 10,856,498 | 0.5 | % | ||||||||
China | 4,618,930 | 0.2 | % | ||||||||
Hong Kong | 14,279,871 | 0.7 | % | ||||||||
Ireland | 33,566,669 | 1.5 | % | ||||||||
United Kingdom | 20,663,055 | 0.9 | % | ||||||||
United States†† | 2,018,217,190 | 90.4 | % | ||||||||
Total | $ | 2,233,769,948 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (75.1% excluding Short-Term Securities and Other Securities).
See Notes to Schedules of Investments and Financial Statements.
20 Janus Growth Funds April 30, 2007
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
Investment Strategy
In keeping with Janus' core investment approach, I focus on individual stocks and company fundamentals. Company fundamentals are often greatly influenced by the macroeconomic environment in which businesses operate. Therefore, I closely monitor the macroeconomic backdrop that feeds the assumptions and expectations I have for each of the companies in the Fund.
At period end, I thought U.S. and global equity markets were reasonably valued based on the fact that I was able to find numerous compelling investment opportunities with what I believed to be attractive risk/reward tradeoffs. That belief was further confirmed by looking at the valuation multiples of the broad market indexes in developed markets relative to the growth expectations for gross domestic product (GDP) and corporate profits. Market participants seemed very cognizant of risk and reacted appropriately as fundamental risks changed.
Within that environment, I continued to find what I believed were great businesses with attractive valuations for the Fund. When I am able to find those types of businesses, I truly enjoy my job. My challenge as Portfolio Manager is less about discovering new attractive investment opportunities and more focused on selecting from a list of attractive risk/reward opportunities uncovered by the research analysts and portfolio managers at Janus. More compelling stock ideas should lead to fewer stocks in the portfolio. Rather than struggling to fill the Fund with many small positions with a reasonably attractive risk/reward tradeoff, I would rather cull what I believe to be great ideas that merit larger position sizes. As of period end, I believed even some of the best-performing positions in the Fund over the past six, 12 and 24 months remained compelling investment opportunities because the business fundamentals had improved in step with or ahe ad of the stock prices. By focusing on the long-term competitive position of a company, I was able to decide whether to hold or sell a stock based on whether its business executed and grew as I had anticipated.
Market Overview
Notwithstanding the strong recent performance of the stocks in Janus Orion Fund, I think the fact that stock indexes across the globe and in most every segment of the market, including commodities and real estate, have performed well should be a cause for concern. Therefore, I have begun to focus on possible risks, such as the existence of "bubbles," stemming from this positive environment. Unfortunately, bubbles are usually only identifiable in hindsight.
While I don't believe the overall stock market is in such a bubble, I do believe there are pockets of the investment universe that have exhibited irrational confidence. For example, real estate in Dublin sold at over 30 times rental costs and the Chinese stock market mirrored the Internet sector of the late 1990s with individual investors opening new accounts at an unprecedented rate.
These developments prompted numerous questions for me. Have other asset classes been pulled into higher valuation ranges by those bubbles? Will a collapse of any small bubble have spillover effects? Historically, bubbles have driven great fundamentals for businesses but I intend to exit early from companies in the Fund that I believe are enjoying the benefits of a market bubble.
Fund Performance
The Fund was up 13.33% during the six-month period ended April 30, 2007, versus a return of 8.34% for the Fund's primary benchmark, the Russell 3000® Growth Index, and a return of 8.60% for the S&P 500® Index, the Fund's secondary benchmark. A number of the top contributors to the Fund over the period were holdings where the company's business model met or exceeded my expectations.
Dade Behring and ABB Were Important Contributors
One of these holdings, Dade Behring Holdings, was the top contributor during the period. This leading player in the clinical diagnostics industry is in the early stages of rolling out a new high-volume integrated chemistry and immunochemistry analyzer. I believe the Dimension Vista analyzer should enable large hospitals to deliver faster, more accurate test results with less labor than current alternatives. In my opinion, the market underestimated the impact of the Dimension Vista, and at the same time, did not give Dade credit for its ability to execute in the small- to mid-size hospital market. I believe the clinical diagnostics industry has great potential for growth over the long term.
Janus Growth Funds April 30, 2007 21
Janus Orion Fund (unaudited)
Another important contributor during the period was ABB, a leading provider of electric grid transmission and distribution equipment and systems. I believe investors finally recognized the great pricing power that ABB enjoyed because of its technologies, long-standing business relationships and established track record of reliability, as well as the breadth and depth of ABB's competitive moat. Because of the multi-year backlog ABB has in some of its most critical end-markets, I believe the strength of its pricing power has not been fully reflected in the company's operating results.
I spoke with ABB's management about its underleveraged balance sheet and stated goal of putting cash to use in an acquisition. Accordingly, I believe the market's fears of a value-destroying acquisition are misplaced. Instead, I believe ABB faces a multi-year growth opportunity in its primary markets and can continue to create value through production rationalization and smart pricing decisions. That said, I believe there are investors who view ABB's current business momentum as a product of an emerging market bubble fueled by China's rapid industrialization and urbanization. While I agree that China has been an important driver of global growth, I do not agree that the global demand for electricity transmission and distribution infrastructure depends solely on China.
Whole Foods, Corporate Executive Board Detracted From Performance
The two largest detractors from performance were Whole Foods Market and Corporate Executive Board.
Whole Foods Market is the leading supermarket chain focused on organic and natural products. I believe it has built strong customer loyalty and has a clear path to growth through new store openings because many landlords view Whole Foods as an attractive tenant. During the period, the company disappointed on two fronts. First, same-store sales, a key driver of operating profit growth, were disappointing. I think this is likely the result of both increased competition in health-conscious products from traditional supermarkets, and the fact that many Whole Foods locations neared maximum utilization as lack of parking and long checkout lines drove incremental customers elsewhere. The other area of disappointment was in the company's projections for new store openings. The rate of new openings was lower than I expected, and the cost of each new store seemed higher than for e arlier locations. While I am a long-term believer in the secular opportunity for healthy food retailing, Whole Foods' lofty valuation demanded strong results from existing stores and rapid expansion into new locations with attractive economic returns. Lacking confidence that Whole Foods would exceed market expectations, I sold the Fund's position.
Corporate Executive Board is a subscription-based consulting business with a business model that I believe should have pricing power and operating leverage as it grows. I watched the stock for years and viewed the market's reaction to a slowdown in projected growth rates as an attractive opportunity to finally establish a position. Unfortunately, the slowdown was the result of some sales force problems at Corporate Executive Board that may take longer to fix than anticipated, so the stock continued to decline after I purchased it. I believe the long-term fundamentals of Corporate Executive Board's business model remain attractive and believe the stock may still have considerable upside from here. That said, I am working to better understand the company's pricing power opportunities with existing customers in the event that reinvigorating new customer growth proves more challenging than the company anticipates.
I am excited about the businesses in the Fund and plan to continue working toward strong results in the future. Thank you for your investment in Janus Orion Fund.
22 Janus Growth Funds April 30, 2007
(unaudited)
Janus Orion Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Dade Behring Holdings, Inc. | 2.54 | % | |||||
ABB, Ltd. | 1.98 | % | |||||
Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 0.81 | % | |||||
America Movil S.A. de C.V. - Series L (ADR) | 0.78 | % | |||||
Intuitive Surgical, Inc. | 0.78 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Whole Foods Market, Inc. | (0.72 | )% | |||||
Corporate Executive Board Co. | (0.44 | )% | |||||
Varian Medical Systems, Inc. | (0.40 | )% | |||||
FedEx Corp. | (0.18 | )% | |||||
CapitalSource, Inc. | (0.14 | )% |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Russell 3000® Growth Index Weighting | |||||||||||||
Health Care | 3.72 | % | 20.67 | % | 17.64 | % | |||||||||
Information Technology | 3.22 | % | 18.25 | % | 26.33 | % | |||||||||
Consumer Discretionary | 2.76 | % | 12.46 | % | 14.39 | % | |||||||||
Materials | 1.62 | % | 4.72 | % | 2.87 | % | |||||||||
Industrials | 1.54 | % | 12.61 | % | 14.60 | % |
5 Lowest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Russell 3000® Growth Index Weighting | |||||||||||||
Energy | 0.00 | % | 0.00 | % | 4.17 | % | |||||||||
Utilities | 0.00 | % | 0.00 | % | 1.32 | % | |||||||||
Consumer Staples | 0.17 | % | 5.93 | % | 9.18 | % | |||||||||
Telecommunication Services | 0.94 | % | 9.56 | % | 0.93 | % | |||||||||
Financials | 1.07 | % | 15.81 | % | 8.59 | % |
Janus Growth Funds April 30, 2007 23
Janus Orion Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2007 | |||||||
Dade Behring Holdings, Inc. Diagnostic Kits | 8.5 | % | |||||
ABB, Ltd. Engineering - Research and Development Services | 5.8 | % | |||||
Celgene Corp. Medical - Biomedical and Genetic | 4.1 | % | |||||
CapitalSource, Inc. REIT - Mortgages | 3.9 | % | |||||
Sony Corp. Audio and Video Products | 3.8 | % | |||||
26.1 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2007 |
Emerging markets comprised 8.5% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2007 | As of October 31, 2006 | ||||||
![]() | ![]() | ||||||
24 Janus Growth Funds April 30, 2007
(unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Five Year | Since Inception* | Total Annual Fund Operating Expenses | |||||||||||||||||||
Janus Orion Fund | 13.33 | % | 13.45 | % | 14.36 | % | 1.23 | % | 1.01 | % | |||||||||||||
Russell 3000® Growth Index | 8.34 | % | 11.53 | % | 6.44 | % | (4.38 | )% | |||||||||||||||
S&P 500® Index | 8.60 | % | 15.24 | % | 8.54 | % | 1.96 | % | |||||||||||||||
Lipper Quartile | – | 1 | st | 1 | st | 2 | nd | ||||||||||||||||
Lipper Ranking - based total return for Multi-Cap Growth Funds | – | 62/497 | 13/317 | 66/232 |
Visit janus.com to view current performance
and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
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.
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.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – June 30, 2000
Janus Growth Funds April 30, 2007 25
Janus Orion Fund (unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,133.30 | $ | 4.71 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.38 | $ | 4.46 |
*Expenses are equal to the annualized expense ratio of 0.89%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
26 Janus Growth Funds April 30, 2007
Janus Orion Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Common Stock - 97.2% | |||||||||||
Advertising Sales - 1.0% | |||||||||||
609,160 | Lamar Advertising Co.* | $ | 36,756,714 | ||||||||
Agricultural Chemicals - 1.8% | |||||||||||
366,680 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 65,826,394 | |||||||||
Audio and Video Products - 3.8% | |||||||||||
2,582,345 | Sony Corp. | 137,547,821 | |||||||||
Beverages - Wine and Spirits - 3.4% | |||||||||||
11,804,838 | Davide Campari - Milano S.P.A. | 122,218,480 | |||||||||
Building - Residential and Commercial - 0.7% | |||||||||||
435,370 | Desarrolladora Homex S.A. (ADR)*,# | 25,268,875 | |||||||||
Casino Services - 1.0% | |||||||||||
1,132,680 | Scientific Games Corp. - Class A*,# | 37,706,917 | |||||||||
Cellular Telecommunications - 4.3% | |||||||||||
2,459,775 | America Movil S.A. de C.V. - Series L (ADR) | 129,211,980 | |||||||||
1,316,110 | Cellcom Israel, Ltd. (U.S. Shares)* | 26,282,717 | |||||||||
155,494,697 | |||||||||||
Chemicals - Specialty - 0% | |||||||||||
29,150 | Cytec Industries, Inc. | 1,600,335 | |||||||||
Commercial Services - 1.6% | |||||||||||
872,928 | CoStar Group, Inc.* | 42,607,615 | |||||||||
1,280,400 | Park24 Company, Ltd. | 15,886,023 | |||||||||
58,493,638 | |||||||||||
Computers - 4.0% | |||||||||||
1,102,700 | Apple, Inc.* | 110,049,460 | |||||||||
262,990 | Research In Motion, Ltd. (U.S. Shares)* | 34,604,224 | |||||||||
144,653,684 | |||||||||||
Consulting Services - 1.5% | |||||||||||
850,180 | Corporate Executive Board Co.# | 54,105,455 | |||||||||
Data Processing and Management - 1.0% | |||||||||||
1,054,395 | NAVTEQ Corp.*,# | 37,283,407 | |||||||||
Diagnostic Kits - 8.5% | |||||||||||
6,268,506 | Dade Behring Holdings, Inc.£ | 307,846,330 | |||||||||
Diversified Minerals - 1.2% | |||||||||||
1,282,858 | Companhia Vale do Rio Doce - Preference Shares | 44,402,007 | |||||||||
E-Commerce/Products - 1.1% | |||||||||||
470,460 | Submarino S.A. | 16,797,676 | |||||||||
319,605 | Submarino S.A. (GDR) | 23,175,102 | |||||||||
39,972,778 | |||||||||||
Electronic Measuring Instruments - 2.9% | |||||||||||
3,599,560 | Trimble Navigation, Ltd.*,£ | 103,235,381 | |||||||||
Engineering - Research and Development Services - 5.8% | |||||||||||
10,494,195 | ABB, Ltd.# | 209,746,300 | |||||||||
Entertainment Software - 0.8% | |||||||||||
560,380 | Electronic Arts, Inc.* | 28,248,756 | |||||||||
Finance - Investment Bankers/Brokers - 3.2% | |||||||||||
200,725 | Goldman Sachs Group, Inc. | 43,880,492 | |||||||||
1,107,294 | UBS A.G.# | 71,765,908 | |||||||||
115,646,400 |
Shares or Principal Amount | Value | ||||||||||
Finance - Other Services - 2.3% | |||||||||||
122,850 | Chicago Mercantile Exchange Holdings, Inc.# | $ | 63,482,738 | ||||||||
1,141,845 | MarketAxess Holdings, Inc.* | 18,703,421 | |||||||||
82,186,159 | |||||||||||
Investment Management and Advisory Services - 2.4% | |||||||||||
1,921,215 | National Financial Partners Corp. | 88,510,375 | |||||||||
Medical - Biomedical and Genetic - 4.1% | |||||||||||
2,451,682 | Celgene Corp.* | 149,944,871 | |||||||||
Medical - Drugs - 3.3% | |||||||||||
631,587 | Roche Holding A.G.# | 119,142,639 | |||||||||
Medical Instruments - 2.7% | |||||||||||
755,731 | Intuitive Surgical, Inc.* | 97,988,081 | |||||||||
Medical Products - 1.2% | |||||||||||
1,043,080 | Varian Medical Systems, Inc.*,# | 44,028,407 | |||||||||
Multi-Line Insurance - 1.9% | |||||||||||
1,206,365 | Assurant, Inc.# | 69,402,178 | |||||||||
Printing - Commercial - 2.7% | |||||||||||
2,618,272 | VistaPrint, Ltd.*,£ | 97,871,007 | |||||||||
REIT - Mortgages - 3.9% | |||||||||||
5,467,752 | CapitalSource, Inc.# | 140,903,969 | |||||||||
Retail - Apparel and Shoe - 2.6% | |||||||||||
1,719,060 | Nordstrom, Inc. | 94,410,775 | |||||||||
Semiconductor Components/Integrated Circuits - 1.8% | |||||||||||
2,793,285 | Cypress Semiconductor Corp.* | 63,742,764 | |||||||||
Soap and Cleaning Preparations - 1.6% | |||||||||||
1,077,260 | Reckitt Benckiser PLC** | 59,029,711 | |||||||||
Storage and Warehousing - 0.7% | |||||||||||
863,870 | Mobile Mini, Inc.*,# | 25,890,184 | |||||||||
Telecommunication Equipment - Fiber Optics - 2.3% | |||||||||||
3,522,860 | Corning, Inc.* | 83,562,239 | |||||||||
Telecommunication Services - 3.7% | |||||||||||
2,203,535 | NeuStar, Inc. - Class A* | 63,373,667 | |||||||||
3,408,137 | Time Warner Telecom, Inc. - Class A*,# | 69,866,808 | |||||||||
133,240,475 | |||||||||||
Telephone - Integrated - 0.5% | |||||||||||
1,324,350 | GVT Holdings S.A.* | 16,757,321 | |||||||||
Transportation - Marine - 0.5% | |||||||||||
329,590 | Alexander & Baldwin, Inc.# | 17,616,586 | |||||||||
Transportation - Railroad - 0.7% | |||||||||||
2,171,200 | All America Latina Logistica (GDR) | 25,356,144 | |||||||||
Transportation - Services - 1.8% | |||||||||||
612,825 | FedEx Corp. | 64,616,268 | |||||||||
Web Hosting/Design - 1.4% | |||||||||||
621,515 | Equinix, Inc.*,# | 51,877,857 | |||||||||
Web Portals/Internet Service Providers - 2.8% | |||||||||||
3,611,665 | Yahoo!, Inc.* | 101,271,087 | |||||||||
Wireless Equipment - 4.7% | |||||||||||
3,007,120 | Crown Castle International Corp.*,# | 103,264,501 | |||||||||
1,523,655 | QUALCOMM, Inc. | 66,736,089 | |||||||||
170,000,590 | |||||||||||
Total Common Stock (cost $2,605,508,241) | 3,523,404,056 |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2007 27
Janus Orion Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Money Markets - 2.4% | |||||||||||
888,850 | Janus Institutional Cash Management Fund - Institutional Shares, 5.32% | $ | 888,850 | ||||||||
84,499,706 | Janus Institutional Money Market Fund - Institutional Shares, 5.26% | 84,499,706 | |||||||||
Total Money Markets (cost $85,388,556) | 85,388,556 | ||||||||||
Other Securities - 13.0% | |||||||||||
5,731,021 | Foreign Government Bonds† | 5,731,021 | |||||||||
460,848,450 | State Street Navigator Securities Lending Prime Portfolio† | 460,848,450 | |||||||||
4,584,991 | U.S. Treasury Notes/Bonds† | 4,584,991 | |||||||||
Total Other Securities (cost $471,164,462) | 471,164,462 | ||||||||||
Total Investments (total cost $3,162,061,259) – 112.6% | 4,079,957,074 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (12.6)% | (455,829,965 | ) | |||||||||
Net Assets – 100% | $ | 3,624,127,109 |
Summary of Investments by Country – (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Bermuda | $ | 97,871,007 | 2.4 | % | |||||||
Brazil | 126,488,250 | 3.1 | % | ||||||||
Canada | 100,430,618 | 2.5 | % | ||||||||
Israel | 26,282,717 | 0.6 | % | ||||||||
Italy | 122,218,480 | 3.0 | % | ||||||||
Japan | 153,433,844 | 3.8 | % | ||||||||
Mexico | 154,480,855 | 3.8 | % | ||||||||
Switzerland | 400,654,847 | 9.8 | % | ||||||||
United Kingdom | 59,029,711 | 1.4 | % | ||||||||
United States†† | 2,839,066,745 | 69.6 | % | ||||||||
Total | $ | 4,079,957,074 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (55.9% 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 6/8/07 | 4,600,000 | $ | 9,195,531 | $ | (273,371 | ) | |||||||||
British Pound 8/15/07 | 400,000 | 799,034 | (28,414 | ) | |||||||||||
Total | $ | 9,994,565 | $ | (301,785 | ) |
See Notes to Schedules of Investments and Financial Statements.
28 Janus Growth Funds April 30, 2007
Janus Research 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
For the six-month period ended April 30, 2007, Janus Research Fund gained 15.96%, outperforming its primary benchmark, the Russell 1000® Growth Index, which advanced 8.42% and its secondary benchmark, the S&P 500® Index, which rose 8.60%.
Equity markets delivered healthy gains during the period amid continued evidence of strong U.S. economic growth with modest inflation. International markets were particularly strong during the period. After a brief period of market volatility in late February and early March, stocks rebounded quickly on hopes of monetary easing by the Federal Reserve (Fed). While U.S. corporate profit growth showed signs of slowing, robust merger and acquisition (M&A) activity and private equity transactions continued to provide key valuation support to equities in the U.S. and around the globe.
Janus Research Fund is comprised of the best ideas of Janus' 35 equity analysts. Stock selection within the portfolio is primarily individual analyst-driven, but benefits from debate and oversight by Janus' eight global sector research teams.
The Janus analyst team managed Janus Research Fund over the past 15 months, as of period end. It focused on driving consistency for long-term shareholders. During that time, we believe the Fund effectively captured the value of Janus' research in a highly diversified fashion. It demonstrated continuity with the formerly named Janus Mercury Fund on many levels – the portfolio was managed in a moderate risk fashion with approximately 79% of its total investments in U.S. stocks and 21% in non-U.S. stocks. More importantly, the portfolio continued to generate strong investment returns.
Janus Research Fund is different than most mutual funds in several important respects. The Fund is directly managed by Janus' analyst team. We believe there is great power in individual analysts making direct investment decisions as they are most familiar with the stocks they cover. The Fund is also managed as sector neutral, which means the Fund's exposure to different sectors is approximately the same as that of the primary benchmark, the Russell 1000® Growth Index. This creates an element of simplicity to the Fund by allowing the analysts to attempt to generate performance through pure stock selection.
Contributors to Fund Performance
Within the Fund, positions in the materials and consumer discretionary sectors provided the largest contributions to relative performance during the period. For the six-month period ended April 30, 2007, each of our eight sector teams outperformed the relevant portion of the primary benchmark index. The top individual contributors during the period were Owens-Illinois, NVR, Companhia Vale do Rio Doce (CVRD), CapitaLand, Precision Castparts, Cypress Semiconductor, NRG Energy, Ceridian, Suntech Power Holdings and Apple.
Two materials stocks, glass manufacturer Owens-Illinois and Brazilian iron ore producer CVRD, were among the strongest individual performers during the period.
Owens-Illinois, the largest contributor, benefited from investor optimism that new CEO Al Stroucken's focus on pricing and cost reductions could drive margin growth. This thesis gained credibility midway through the period as the company put its solidly performing – but non-core – plastics packaging business up for sale.
A key supplier to booming infrastructure markets in India and China, CVRD, the Fund's third top performer, fell out of favor when it announced plans to purchase Canadian nickel producer, Inco, in August 2006. By the period's close, however, we believe the markets had warmed to the fact that the deal effectively diversified CVRD's revenues beyond iron ore and could enhance earnings.
Detractors from Fund Performance
The biggest detractors included Whole Foods Market, optionsXpress Holdings, SanDisk Corp., Varian Medical Systems, Federated Department Stores, SiRf Technology Holdings, Best Buy and Amgen.
A consumer staples stock, organic food retailer, Whole Foods Market, proved the poorest performer during the period. The stock dropped amid reduced same-store sales reports and lowered expectations for same-store sales going forward. Displeased with developments, we exited the position.
Another detractor was online options trading platform operator, optionsXpress. The company faced persistent challenges in adding new accounts, even during the traditionally busy first quarter.
Outlook
We believe our recent investment returns, both on an absolute basis and relative to the Fund's benchmarks, were unsustainably high and should not be expected to continue at
Janus Growth Funds April 30, 2007 29
Janus Research Fund (unaudited)
such a high level. We are gratified by the strength of our recent results, but what is even more important to us is that we produced these results without making large bets in the portfolio on individual companies or sectors. We are excited about the long-term prospects for Janus Research Fund. We have a great team of research analysts, an intensive research process and a disciplined investment process that seeks to produce a diversified portfolio of best ideas. By adding value through our research and managing risk through diversification, we hope to continue to produce strong risk-adjusted returns for our fellow investors. Thank you for your investment in Janus Research Fund.
Janus Research Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Owens-Illinois, Inc. | 1.31 | % | |||||
NVR, Inc. | 0.72 | % | |||||
Companhia Vale do Rio Doce (ADR) | 0.67 | % | |||||
Precision Castparts Corp. | 0.59 | % | |||||
CapitaLand, Ltd. | 0.55 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Whole Foods Market, Inc. | (0.36 | )% | |||||
Varian Medical Systems, Inc. | (0.27 | )% | |||||
SanDisk Corp. | (0.22 | )% | |||||
optionsXpress Holdings, Inc. | (0.22 | )% | |||||
SiRF Technology Holdings, Inc. | (0.16 | )% |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Russell 1000® Growth Index Weighting | |||||||||||||
Information Technology | 3.99 | % | 23.90 | % | 26.54 | % | |||||||||
Consumer Discretionary | 2.95 | % | 17.70 | % | 14.20 | % | |||||||||
Materials | 2.58 | % | 5.28 | % | 2.84 | % | |||||||||
Health Care | 2.42 | % | 16.63 | % | 17.46 | % | |||||||||
Industrials | 1.59 | % | 10.49 | % | 14.32 | % |
5 Lowest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Russell 1000® Growth Index Weighting | |||||||||||||
Telecommunication Services | 0.10 | % | 1.61 | % | 0.90 | % | |||||||||
Utilities | 0.53 | % | 1.02 | % | 1.43 | % | |||||||||
Financials | 0.89 | % | 8.50 | % | 8.54 | % | |||||||||
Energy | 0.89 | % | 4.60 | % | 4.01 | % | |||||||||
Consumer Staples | 0.96 | % | 10.26 | % | 9.77 | % |
30 Janus Growth Funds April 30, 2007
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2007 | |||||||
General Electric Co. Diversified Operations | 2.2 | % | |||||
Owens-Illinois, Inc. Containers - Metal and Glass | 2.1 | % | |||||
Cypress Semiconductor Corp. Semiconductor Components/Integrated Circuits | 1.8 | % | |||||
Apple, Inc. Computers | 1.8 | % | |||||
QUALCOMM, Inc. Wireless Equipment | 1.7 | % | |||||
9.6 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2007 |
Emerging markets comprised 5.1% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2007 | As of October 31, 2006 | ||||||
![]() | ![]() | ||||||
Janus Growth Funds April 30, 2007 31
Janus Research Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | Total Annual Fund Operating Expenses | ||||||||||||||||||||||
Janus Research Fund | 15.96 | % | 17.42 | % | 9.29 | % | 10.31 | % | 13.03 | % | 0.98 | % | |||||||||||||||
Russell 1000® Growth Index | 8.42 | % | 12.25 | % | 6.22 | % | 5.32 | % | 9.01 | % | |||||||||||||||||
S&P 500® Index | 8.60 | % | 15.24 | % | 8.54 | % | 8.05 | % | 11.07 | % | |||||||||||||||||
Lipper Quartile | – | 1 | st | 1 | st | 1 | st | 1 | st | ||||||||||||||||||
Lipper Ranking - based on total return for Large-Cap Growth Funds | – | 1/723 | 11/506 | 1/195 | 1/81 |
Visit janus.com to view current performance
and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The Fund has a performance-based management fee that adjusts upward or downward based on the Fund's performance relative to an approved benchmark index over a performance measurement period.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
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.
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.
May 6, 1993 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
Effective December 31, 2006, Janus Mercury Fund changed its name to "Janus Research Fund." The Fund will continue to be managed with the same investment objective and strategies.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – May 3, 1993
32 Janus Growth Funds April 30, 2007
(unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,159.60 | $ | 5.19 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.98 | $ | 4.86 |
*Expenses are equal to the annualized expense ratio of 0.97%, 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, 2007 33
Janus Research Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Common Stock - 98.9% | |||||||||||
Advertising Sales - 0.7% | |||||||||||
481,780 | Lamar Advertising Co.* | $ | 29,070,605 | ||||||||
Aerospace and Defense - 3.2% | |||||||||||
3,079,215 | BAE Systems PLC** | 27,946,429 | |||||||||
578,900 | Boeing Co. | 53,837,700 | |||||||||
1,177,335 | Embraer-Empresa Brasileira de Aeronautica S.A. (ADR) | 55,228,785 | |||||||||
137,012,914 | |||||||||||
Agricultural Chemicals - 1.3% | |||||||||||
162,590 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares)** | 29,188,156 | |||||||||
136,313 | Syngenta A.G.**,# | 27,113,856 | |||||||||
56,302,012 | |||||||||||
Agricultural Operations - 1.0% | |||||||||||
541,825 | Bunge, Ltd. | 41,048,662 | |||||||||
Applications Software - 0.8% | |||||||||||
1,712,540 | Red Hat, Inc.*,# | 36,203,096 | |||||||||
Athletic Footwear - 0.6% | |||||||||||
462,110 | NIKE, Inc. - Class B# | 24,889,245 | |||||||||
Audio and Video Products - 1.1% | |||||||||||
862,300 | Sony Corp.** | 45,930,147 | |||||||||
Automotive - Cars and Light Trucks - 1.8% | |||||||||||
421,136 | BMW A.G.**,# | 26,085,909 | |||||||||
2,504,500 | Nissan Motor Company, Ltd.**,# | 25,268,485 | |||||||||
1,443,940 | Tata Motors, Ltd. (ADR)# | 26,395,224 | |||||||||
77,749,618 | |||||||||||
Brewery - 0.6% | |||||||||||
335,818 | Interbrew S.A.**,# | 26,147,051 | |||||||||
Broadcast Services and Programming - 0.3% | |||||||||||
469,430 | Grupo Televisa S.A. (ADR) | 13,167,512 | |||||||||
Building - Residential and Commercial - 1.7% | |||||||||||
86,980 | NVR, Inc.*,# | 71,671,520 | |||||||||
Casino Hotels - 1.1% | |||||||||||
312,630 | Harrah's Entertainment, Inc. | 26,667,339 | |||||||||
1,165,355 | Melco PBL Entertainment (Macau), Ltd. (ADR)*,# | 20,300,484 | |||||||||
46,967,823 | |||||||||||
Casino Services - 0.9% | |||||||||||
1,103,510 | Scientific Games Corp. - Class A* | 36,735,848 | |||||||||
Cellular Telecommunications - 0.6% | |||||||||||
454,400 | America Movil S.A. de C.V. - Series L (ADR) | 23,869,632 | |||||||||
Commercial Banks - 0.3% | |||||||||||
230,965 | SVB Financial Group*,# | 11,830,027 | |||||||||
Commercial Services - 0.4% | |||||||||||
1,454,700 | Park24 Company, Ltd.**,# | 18,048,576 | |||||||||
Computer Services - 1.4% | |||||||||||
1,787,490 | Ceridian Corp.* | 60,345,662 | |||||||||
Computers - 1.8% | |||||||||||
751,395 | Apple, Inc.* | 74,989,221 | |||||||||
Computers - Memory Devices - 1.5% | |||||||||||
4,166,890 | EMC Corp.*,# | 63,253,390 | |||||||||
Consumer Products - Miscellaneous - 1.1% | |||||||||||
642,705 | Kimberly-Clark Corp.# | 45,741,315 |
Shares or Principal Amount | Value | ||||||||||
Containers - Metal and Glass - 3.4% | |||||||||||
1,074,048 | Ball Corp. | $ | 54,443,493 | ||||||||
3,017,055 | Owens-Illinois, Inc.* | 90,783,185 | |||||||||
145,226,678 | |||||||||||
Cosmetics and Toiletries - 2.4% | |||||||||||
1,324,630 | Avon Products, Inc. | 52,720,274 | |||||||||
805,030 | Procter & Gamble Co. | 51,771,479 | |||||||||
104,491,753 | |||||||||||
Data Processing and Management - 1.6% | |||||||||||
848,405 | NAVTEQ Corp.*,# | 29,999,601 | |||||||||
1,073,745 | Paychex, Inc.# | 39,835,939 | |||||||||
69,835,540 | |||||||||||
Diagnostic Kits - 1.1% | |||||||||||
940,720 | Dade Behring Holdings, Inc. | 46,198,759 | |||||||||
Distribution/Wholesale - 0.6% | |||||||||||
2,139,600 | Esprit Holdings, Ltd. | 25,893,565 | |||||||||
Diversified Operations - 2.2% | |||||||||||
2,557,090 | General Electric Co. | 94,254,337 | |||||||||
Drug Delivery Systems - 0.9% | |||||||||||
954,390 | Hospira, Inc.* | 38,700,515 | |||||||||
Electronic Components - Semiconductors - 4.7% | |||||||||||
16,166,516 | ARM Holdings PLC** | 43,031,247 | |||||||||
1,197,525 | Microsemi Corp.*,# | 27,674,803 | |||||||||
51,220 | Samsung Electronics Company, Ltd.** | 31,364,341 | |||||||||
1,453,055 | SiRF Technology Holdings, Inc.* | 35,251,114 | |||||||||
1,860,145 | Texas Instruments, Inc. | 63,933,183 | |||||||||
201,254,688 | |||||||||||
Electronic Forms - 1.1% | |||||||||||
1,088,920 | Adobe Systems, Inc.* | 45,255,515 | |||||||||
Energy - Alternate Sources - 0.9% | |||||||||||
1,611,100 | JA Solar Holdings Company, Ltd. (ADR)* | 39,294,729 | |||||||||
Enterprise Software/Services - 0.5% | |||||||||||
1,201,070 | Oracle Corp.* | 22,580,116 | |||||||||
Entertainment Software - 1.6% | |||||||||||
1,148,895 | Activision, Inc.* | 22,977,900 | |||||||||
913,039 | Electronic Arts, Inc.* | 46,026,296 | |||||||||
69,004,196 | |||||||||||
Finance - Consumer Loans - 0.5% | |||||||||||
422,740 | SLM Corp.# | 22,756,094 | |||||||||
Finance - Credit Card - 0.9% | |||||||||||
604,170 | American Express Co.# | 36,654,994 | |||||||||
Finance - Investment Bankers/Brokers - 2.9% | |||||||||||
66,605 | Bear Stearns Companies, Inc.# | 10,370,399 | |||||||||
679,365 | JP Morgan Chase & Co. | 35,394,916 | |||||||||
367,235 | Merrill Lynch & Company, Inc.# | 33,135,614 | |||||||||
1,277,985 | optionsXpress Holdings, Inc.# | 31,540,670 | |||||||||
213,500 | UBS A.G. (U.S. Shares)** | 13,856,150 | |||||||||
124,297,749 | |||||||||||
Finance - Mortgage Loan Banker - 0.7% | |||||||||||
524,565 | Fannie Mae | 30,907,370 | |||||||||
Food - Diversified - 0.5% | |||||||||||
54,494 | Nestle S.A.** | 21,589,343 | |||||||||
Food - Retail - 0.4% | |||||||||||
2,047,267 | Tesco PLC ** | 18,812,993 | |||||||||
Food - Wholesale/Distribution - 0.9% | |||||||||||
1,235,835 | Sysco Corp. | 40,461,238 |
See Notes to Schedules of Investments and Financial Statements.
34 Janus Growth Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Independent Power Producer - 1.2% | |||||||||||
624,666 | NRG Energy, Inc.*,# | $ | 49,323,627 | ||||||||
Industrial Automation and Robotics - 1.1% | |||||||||||
812,190 | Rockwell Automation, Inc. | 48,357,793 | |||||||||
Investment Management and Advisory Services - 0.7% | |||||||||||
642,205 | National Financial Partners Corp. | 29,586,384 | |||||||||
Medical - Biomedical and Genetic - 2.3% | |||||||||||
918,277 | Celgene Corp.* | 56,161,822 | |||||||||
637,775 | Genzyme Corp.*,# | 41,653,085 | |||||||||
97,814,907 | |||||||||||
Medical - Drugs - 4.1% | |||||||||||
1,133,203 | Cubist Pharmaceuticals, Inc.* | 24,307,204 | |||||||||
859,740 | Merck & Company, Inc. | 44,225,026 | |||||||||
748,387 | Novartis A.G.**,# | 43,566,828 | |||||||||
324,349 | Roche Holding A.G.**,# | 61,185,230 | |||||||||
173,284,288 | |||||||||||
Medical - HMO - 1.4% | |||||||||||
1,049,402 | Coventry Health Care, Inc.* | 60,686,918 | |||||||||
Medical - Nursing Homes - 1.1% | |||||||||||
714,680 | Manor Care, Inc. | 46,375,585 | |||||||||
Medical Instruments - 1.5% | |||||||||||
173,165 | Intuitive Surgical, Inc.*,# | 22,452,574 | |||||||||
981,495 | St. Jude Medical, Inc.*,# | 41,998,171 | |||||||||
64,450,745 | |||||||||||
Medical Products - 0.6% | |||||||||||
613,875 | Varian Medical Systems, Inc.*,# | 25,911,664 | |||||||||
Metal Processors and Fabricators - 1.2% | |||||||||||
496,860 | Precision Castparts Corp. | 51,728,095 | |||||||||
Multimedia - 0.7% | |||||||||||
1,378,860 | News Corporation, Inc. - Class A | 30,872,675 | |||||||||
Oil - Field Services - 0.8% | |||||||||||
1,116,130 | BJ Services Co. | 31,988,286 | |||||||||
Oil and Gas Drilling - 0.5% | |||||||||||
670,785 | Nabors Industries, Ltd.* | 21,545,614 | |||||||||
Oil Companies - Exploration and Production - 1.8% | |||||||||||
414,186 | Apache Corp. | 30,028,485 | |||||||||
337,969 | EnCana Corp.** | 17,691,683 | |||||||||
394,879 | EOG Resources, Inc.# | 28,999,914 | |||||||||
76,720,082 | |||||||||||
Oil Refining and Marketing - 1.4% | |||||||||||
794,676 | Reliance Industries, Ltd. | 29,792,211 | |||||||||
452,480 | Valero Energy Corp. | 31,777,671 | |||||||||
61,569,882 | |||||||||||
Optical Supplies - 0.8% | |||||||||||
265,375 | Alcon, Inc. (U.S. Shares)** | 35,807,049 | |||||||||
Real Estate Operating/Development - 1.4% | |||||||||||
8,618,000 | CapitaLand, Ltd.# | 47,539,642 | |||||||||
183,910 | St. Joe Co.# | 10,414,823 | |||||||||
57,954,465 | |||||||||||
Reinsurance - 0.7% | |||||||||||
8,386 | Berkshire Hathaway, Inc. - Class B* | 30,424,408 | |||||||||
REIT - Mortgages - 0.5% | |||||||||||
829,435 | CapitalSource, Inc.# | 21,374,540 |
Shares or Principal Amount | Value | ||||||||||
Respiratory Products - 0.9% | |||||||||||
964,625 | Respironics, Inc.* | $ | 39,318,115 | ||||||||
Retail - Apparel and Shoe - 2.6% | |||||||||||
524,450 | Abercrombie & Fitch Co. - Class A | 42,826,588 | |||||||||
408,698 | Industria de Diseno Textil S.A. **,# | 25,053,213 | |||||||||
760,885 | Nordstrom, Inc. | 41,787,804 | |||||||||
109,667,605 | |||||||||||
Retail - Computer Equipment - 0.7% | |||||||||||
852,760 | GameStop Corp. - Class A* | 28,286,049 | |||||||||
Retail - Consumer Electronics - 1.4% | |||||||||||
725,425 | Best Buy Company, Inc. | 33,841,076 | |||||||||
262,770 | Yamada Denki Company, Ltd.**,# | 24,212,196 | |||||||||
58,053,272 | |||||||||||
Retail - Drug Store - 1.1% | |||||||||||
1,297,395 | CVS/Caremark Corp.# | 47,017,595 | |||||||||
Retail - Major Department Stores - 0.4% | |||||||||||
198,975 | J.C. Penney Company, Inc.# | 15,736,933 | |||||||||
Retail - Pet Food and Supplies - 0.6% | |||||||||||
825,910 | PETsMART, Inc.# | 27,411,953 | |||||||||
Retail - Restaurants - 0.7% | |||||||||||
452,410 | Chipotle Mexican Grill, Inc. - Class A*,# | 29,510,704 | |||||||||
Semiconductor Components/Integrated Circuits - 1.8% | |||||||||||
3,304,390 | Cypress Semiconductor Corp.* | 75,406,180 | |||||||||
Semiconductor Equipment - 0.6% | |||||||||||
954,295 | ASM Lithography Holding N.V. (U.S. Shares)*,**,# | 26,004,539 | |||||||||
Soap and Cleaning Preparations - 0.5% | |||||||||||
390,530 | Reckitt Benckiser PLC** | 21,399,544 | |||||||||
Telecommunication Equipment - Fiber Optics - 1.0% | |||||||||||
1,856,825 | Corning, Inc.* | 44,043,889 | |||||||||
Telecommunication Services - 2.1% | |||||||||||
614,930 | Amdocs, Ltd. (U.S. Shares)*,** | 22,598,678 | |||||||||
740,655 | SAVVIS, Inc.*,# | 38,195,577 | |||||||||
1,454,359 | Time Warner Telecom, Inc. - Class A*,# | 29,814,360 | |||||||||
90,608,615 | |||||||||||
Television - 0.8% | |||||||||||
2,868,196 | British Sky Broadcasting Group PLC**,# | 32,846,666 | |||||||||
Therapeutics - 2.9% | |||||||||||
1,003,410 | Amylin Pharmaceuticals, Inc.*,# | 41,470,935 | |||||||||
543,875 | Gilead Sciences, Inc.* | 44,445,465 | |||||||||
700,943 | United Therapeutics Corp.* | 39,189,723 | |||||||||
125,106,123 | |||||||||||
Tobacco - 1.2% | |||||||||||
760,412 | Altria Group, Inc. | 52,407,595 | |||||||||
Transportation - Services - 1.2% | |||||||||||
706,340 | United Parcel Service, Inc. - Class B# | 49,747,526 | |||||||||
Transportation - Truck - 0.7% | |||||||||||
660,335 | Landstar System, Inc. | 31,900,784 | |||||||||
Web Portals/Internet Service Providers - 0.8% | |||||||||||
1,222,575 | Yahoo!, Inc.* | 34,281,003 |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2007 35
Janus Research Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Wireless Equipment - 3.1% | |||||||||||
1,638,465 | Crown Castle International Corp.*,# | $ | 56,264,888 | ||||||||
1,687,525 | QUALCOMM, Inc. | 73,913,595 | |||||||||
130,178,483 | |||||||||||
Total Common Stock (cost $3,479,640,034) | 4,223,154,228 | ||||||||||
Money Markets - 2.6% | |||||||||||
7,512,441 | Janus Institutional Cash Management Fund - Institutional Shares, 5.32% | 7,512,441 | |||||||||
102,190,942 | Janus Institutional Money Market Fund - Institutional Shares, 5.26% | 102,190,942 | |||||||||
Total Money Markets (cost $109,703,383) | 109,703,383 | ||||||||||
Other Securities - 11.9% | |||||||||||
48,437,452 | Foreign Government Bonds† | 48,437,452 | |||||||||
441,581,181 | State Street Navigator Securities Lending Prime Portfolio† | 441,581,181 | |||||||||
17,455,693 | U.S. Treasury Notes/Bonds† | 17,455,693 | |||||||||
Total Other Securities (cost $507,474,326) | 507,474,326 | ||||||||||
Total Investments (total cost $4,096,817,743) – 113.4% | 4,840,331,937 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (13.4)% | (570,571,098 | ) | |||||||||
Net Assets – 100% | $ | 4,269,760,839 |
Summary of Investments by Country – (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Belgium | $ | 26,147,051 | 0.5 | % | |||||||
Bermuda | 88,487,841 | 1.8 | % | ||||||||
Brazil | 55,228,785 | 1.1 | % | ||||||||
Canada | 46,879,839 | 1.0 | % | ||||||||
China | 39,294,729 | 0.8 | % | ||||||||
Germany | 26,085,909 | 0.5 | % | ||||||||
Hong Kong | 20,300,484 | 0.4 | % | ||||||||
India | 56,187,435 | 1.2 | % | ||||||||
Japan | 113,459,404 | 2.4 | % | ||||||||
Mexico | 37,037,144 | 0.8 | % | ||||||||
Netherlands | 26,004,539 | 0.5 | % | ||||||||
Singapore | 47,539,642 | 1.0 | % | ||||||||
South Korea | 31,364,341 | 0.7 | % | ||||||||
Spain | 25,053,213 | 0.5 | % | ||||||||
Switzerland | 203,118,456 | 4.2 | % | ||||||||
United Kingdom | 166,635,557 | 3.4 | % | ||||||||
United States†† | 3,831,507,568 | 79.2 | % | ||||||||
Total | $ | 4,840,331,937 | 100.0 | % |
†† Includes Short-Term Securities and Other Securities (66.4% 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) | ||||||||||||
British Pound 6/8/07 | 7,000,000 | $ | 13,993,199 | $ | (415,999 | ) | |||||||||
British Pound 10/17/07 | 13,000,000 | 25,944,656 | (854,656 | ) | |||||||||||
Canadian Dollar 6/8/07 | 11,250,000 | 10,151,167 | (578,328 | ) | |||||||||||
Euro 10/17/07 | 4,500,000 | 6,175,555 | (183,062 | ) | |||||||||||
Euro 10/18/07 | 32,000,000 | 43,916,379 | (301,020 | ) | |||||||||||
Japanese Yen 10/18/07 | 3,350,000,000 | 28,665,905 | (51,524 | ) | |||||||||||
South Korean Won 10/17/07 | 20,650,000,000 | 22,298,611 | (417,816 | ) | |||||||||||
Swiss Franc 6/8/07 | 34,300,000 | 28,506,864 | (552,504 | ) | |||||||||||
Total | $ | 179,652,336 | $ | (3,354,909 | ) |
See Notes to Schedules of Investments and Financial Statements.
36 Janus Growth Funds April 30, 2007
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.
Chad Meade
co-portfolio manager
Brian Schaub
co-portfolio manager
Performance Overview
Small- and mid-cap stocks performed admirably during the six-month period ending April 30, 2007. The Russell 2500TM Growth Index returned 10.62%, handedly outperforming large cap growth indexes. Stocks in general shrugged off concerns surrounding subprime mortgage lending, a spike in gasoline prices and the steepest one day sell off in the Shanghai Composite Index in over a decade. Instead, investors chose to focus on the large amount of liquidity in the market and the almost daily announcements of public companies being taken private.
Janus Triton Fund returned 10.12% for the six-month period. While we are pleased with this absolute performance, we are disappointed that the Fund failed to keep pace with the Russell 2500TM Growth Index's return.
Investment Philosophy
Since taking over management of the Fund on July 1, 2006, we have focused our attention on looking for high quality small- and mid-cap growth stocks with sustainable competitive advantages that we believe offer superior return potential over the long term. As we highlighted in our annual letter, we believe what sets us apart is a well thought out investment philosophy; a process that seeks to control risk; a talented, stable and hard working team of research analysts; and virtually unlimited resources to conduct research.
The Concepts of Competitive Advantage and Pricing Power
At the core of our investment philosophy is the concept of competitive advantage. We believe companies with competitive advantages are more likely to have superior long-term growth prospects, the opportunity to expand margins, and high and increasing returns on invested capital. These ingredients, coupled with an attractive valuation, typically make for a good stock. One way to measure a company's competitive advantage is to consider the barriers that a new competitor must overcome to enter the market. Another method is to consider how well positioned a company is relative to its customers and suppliers. A company with patents, one with a proprietary product that would be difficult or impossible to recreate or that has a diverse and powerless base of suppliers with long-term contractual relationships with customers is an example of a company that would be very well positioned from a competitive advantage standpoint. In general, we have learn ed that the best measure of a company's competitive advantage is its ability to raise prices. If we could ask only one question of the many management teams we meet, without a doubt, it would be, "Are you able to raise prices?"
Certain Biotech and Internet Software Stocks Negatively Impacted Returns
Achillion Pharmaceuticals, a biopharmaceutical company with a novel mechanism to treat the Hepatitis C Virus (HCV), suffered a setback when its lead compound was found to create renal toxicity in a Phase I trial. This was clearly a major setback for the company and delayed the program by at least one year. Despite this negative news, we remained enthusiastic because the data from the Phase I trial suggested that the drug's mechanism of action worked. Achillion has a backup compound with a different chemotype that we hope will be metabolized differently than the lead compound and will not create renal toxicity. We believe that the risk/reward profile for the company is solidly in our favor and that if the backup compound successfully gets through the Phase I trial, there is significant upside potential in the stock.
Meanwhile, Adolor was dealt a devastating blow when its leading product in development was found to be unsafe. Entereg, an experimental drug for the treatment of gastrointestinal disease that often accompanies the use of narcotic medications such as codeine, caused increased rates of heart attack, tumors and bone fractures in a year long study of 538 patients taking the drug. This news resulted in a one day 58.72% drop in Adolor's share price and all but ensures that Entereg will never make it to market. We sold Adolor from the Fund entirely.
Another laggard was Japanese company E-Seikatsu. E-Seikatsu offers a web-based subscription service to real estate agents in Japan to help manage rental apartment listings. The Japanese real estate market is quite different than the U.S. market in that the majority of the Japanese population lives in rented apartments instead of owning
Janus Growth Funds April 30, 2007 37
Janus Triton Fund (unaudited)
their own residential property. Additionally, Japanese real estate agents, unlike their U.S. peers, have been slow to adopt technology and instead, have managed all of their listings using an inefficient and cumbersome paper based system. While we believe E-Seikatsu offers a compelling product that continues to gain traction with real estate agents, a system glitch caused the company to suspend sales for approximately one month. This setback forced E-Seikatsu's management to lower financial guidance in January 2007. We continue to be enthusiastic about the company's long-term prospects despite a 67.67% decline in the share price over the six-month period.
Select Investments in the Financial and Information Technology (IT) Sectors Added to Performance
The financial sector suffered from the dramatic demise of several subprime mortgage lenders during the period. The Fund successfully avoided the subprime space and was able to find attractive investment ideas within the sector. MarketAxess Holdings performed especially well, delivering a 45.60% return. MarketAxess operates an electronic platform for high grade corporate and emerging markets bond trading. We believe that electronic trading will take share in bond markets just as it has in equity markets. With a significant first-mover advantage and a superior product that is liked by both broker-dealers and institutional investors, we feel MarketAxess is in an enviable position. As the company grew during the period, it created significant network effects as the number of broker-dealers and institutional investors on the platform continued to increase. This network effect is a barrier to entry that, in our estimation, will make it very hard f or competitors to penetrate the market. For this reason, MarketAxess remains an attractive acquisition target for other companies like the investment banks and Bloomberg, all of whom participate in bond trading. Our investment thesis in the company was confirmed in the six-month period as average monthly volumes traded through the platform increased by approximately 33.7%. We remain optimistic about MarketAxess' long-term prospects but after the stock's strong run we trimmed the Fund's position during the period.
The Fund's investments in the technology sector also performed notably well during the period. Two standouts were Equinix and SAVVIS. Both companies own and operate data centers that provide Internet exchange services to networks, Internet content providers and enterprises. The data center business model has benefited from continued growth in Internet usage driven by the emergence of internet video sites such as YouTube and social media sites such as MySpace. Both companies enjoyed a resurgence after significant overbuilding during the Internet bubble that resulted in many data center owners filing for bankruptcy protection. These bankruptcy filings had the effect of rationalizing the amount of data center space and allowing demand to catch up with supply. Over the past several quarters, Equinix and SAVVIS raised the prices they charge to customers. We believe this is the ultimate sign that they are well positioned and that demand remains he althy. SAVVIS delivered a 65.87% return while Equinix delivered a 22.03% return during the six-month period.
Summary
In conclusion, we would like to reinforce that we are investors in Janus Triton Fund alongside you. We take the responsibility of managing the capital committed to the Fund in a responsible and disciplined manner that we believe will generate consistent long-term results. We look forward to updating you on the Fund's performance in another six months.
Thank you for your investment in Janus Triton Fund.
38 Janus Growth Funds April 30, 2007
(unaudited)
Janus Triton Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
MarketAxess Holdings, Inc. | 0.88 | % | |||||
SAVVIS, Inc. | 0.81 | % | |||||
TransDigm Group, Inc. | 0.69 | % | |||||
Intuitive Surgical, Inc. | 0.59 | % | |||||
Bankrate, Inc. | 0.56 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Adolor Corp. | (0.83 | )% | |||||
Achillion Pharmaceuticals, Inc. | (0.71 | )% | |||||
Corporate Executive Board Co. | (0.62 | )% | |||||
Varian Medical Systems, Inc. | (0.40 | )% | |||||
E-Seikatsu Company, Ltd. | (0.37 | )% |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Russell 2500TM Growth Index Weighting | |||||||||||||
Information Technology | 3.33 | % | 20.76 | % | 20.77 | % | |||||||||
Industrials | 1.91 | % | 22.93 | % | 16.52 | % | |||||||||
Consumer Discretionary | 1.73 | % | 15.04 | % | 17.65 | % | |||||||||
Financials | 1.50 | % | 9.18 | % | 10.84 | % | |||||||||
Energy | 0.60 | % | 4.33 | % | 6.62 | % |
5 Lowest Contributors/Detractors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Russell 2500TM Growth Index Weighting | |||||||||||||
Consumer Staples | (0.11 | )% | 1.22 | % | 2.19 | % | |||||||||
Utilities | 0.00 | % | 0.00 | % | 0.56 | % | |||||||||
Materials | 0.03 | % | 0.34 | % | 4.95 | % | |||||||||
Telecommunication Services | 0.20 | % | 7.06 | % | 1.90 | % | |||||||||
Health Care | 0.42 | % | 19.15 | % | 18.00 | % |
Janus Growth Funds April 30, 2007 39
Janus Triton Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2007 | |||||||
SBA Communications Corp. - Class A Wireless Equipment | 2.0 | % | |||||
Terremark Worldwide, Inc. Web Hosting/Design | 1.8 | % | |||||
Cypress Semiconductor Corp. Semiconductor Components/Integrated Circuits | 1.8 | % | |||||
SAVVIS, Inc. Telecommunication Services | 1.8 | % | |||||
NuCo2, Inc. Distribution/Wholesale | 1.8 | % | |||||
9.2 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2007 |
Emerging markets comprised 4.0% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2007 | As of October 31, 2006 | ||||||
![]() | ![]() | ||||||
40 Janus Growth Funds April 30, 2007
(unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Since Inception* | Total Annual Fund Operating Expenses | Net Annual Fund Operating Expenses | |||||||||||||||||||
Janus Triton Fund | 10.12 | % | 5.07 | % | 18.55 | % | 1.11 | % | 1.11 | % | |||||||||||||
Russell 2500TM Growth Index | 10.62 | % | 7.32 | % | 13.45 | % | |||||||||||||||||
Lipper Quartile | – | 2 | nd | 1 | st | ||||||||||||||||||
Lipper Ranking - based on total return for Small-Cap Growth Funds | – | 178/536 | 21/476 |
Visit janus.com to view current performance
and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
Janus Capital Management LLC has contractually agreed to waive the Fund's total operating expenses (excluding brokerage commissions, interest, taxes, and extraordinary expenses) to a certain limit until at least March 1, 2008. The expense waiver shown reflects the application of such limit and is detailed in the Statement of Additional Information. Total returns shown include fee waivers, if any, and without such waivers, the Fund's total return would have been lower.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. Contractual waivers agreed to by Janus Capital are included under "Net Annual Fund Operating Expenses." All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
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.
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.
February 28, 2005 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the 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.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – February 25, 2005
Janus Growth Funds April 30, 2007 41
Janus Triton Fund (unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,101.20 | $ | 5.78 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.29 | $ | 5.56 |
*Expenses are equal to the annualized expense ratio of 1.11%, 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.
42 Janus Growth Funds April 30, 2007
Janus Triton Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Common Stock - 99.7% | |||||||||||
Advertising Sales - 1.1% | |||||||||||
20,648 | Lamar Advertising Co.* | $ | 1,245,900 | ||||||||
Aerospace and Defense - 3.9% | |||||||||||
29,230 | Embraer-Empresa Brasileira de Aeronautica S.A. (ADR) | 1,371,179 | |||||||||
34,685 | Spirit Aerosystems Holdings, Inc.* | 1,097,087 | |||||||||
53,850 | TransDigm Group, Inc.* | 2,039,299 | |||||||||
4,507,565 | |||||||||||
Airport Development - Maintenance - 0.7% | |||||||||||
27,070 | Grupo Aeroportuario del Centro Norte (ADR)* | 791,527 | |||||||||
Apparel Manufacturers - 1.1% | |||||||||||
93,305 | Quiksilver, Inc.* | 1,240,957 | |||||||||
Applications Software - 0.7% | |||||||||||
36,840 | Red Hat, Inc.* | 778,798 | |||||||||
Auction House - Art Dealer - 0.7% | |||||||||||
13,860 | Ritchie Bros. Auctioneers, Inc. (U.S. Shares) | 818,849 | |||||||||
Audio and Video Products - 1.0% | |||||||||||
50,510 | DTS, Inc.* | 1,130,414 | |||||||||
Building - Mobile Home and Manufactured Homes - 1.0% | |||||||||||
28,845 | Thor Industries, Inc. | 1,148,896 | |||||||||
Casino Services - 1.6% | |||||||||||
53,650 | Scientific Games Corp. - Class A* | 1,786,009 | |||||||||
Chemicals - Plastics - 1.3% | |||||||||||
47,175 | Landec Corp.* | 599,594 | |||||||||
34,475 | Metabolix, Inc.* | 862,220 | |||||||||
1,461,814 | |||||||||||
Commercial Banks - 2.4% | |||||||||||
27,560 | East West Bancorp, Inc. | 1,098,542 | |||||||||
35,490 | Westamerica Bancorporation | 1,661,996 | |||||||||
2,760,538 | |||||||||||
Commercial Services - 1.4% | |||||||||||
32,555 | CoStar Group, Inc.* | 1,589,010 | |||||||||
Commercial Services - Finance - 2.3% | |||||||||||
40,645 | Bankrate, Inc.* | 1,640,838 | |||||||||
34,570 | Jackson Hewitt Tax Service, Inc. | 953,441 | |||||||||
2,594,279 | |||||||||||
Communications Software - 0.8% | |||||||||||
99,405 | InPhonic, Inc.* | 948,324 | |||||||||
Computer Services - 2.5% | |||||||||||
48,855 | Ceridian Corp.* | 1,649,345 | |||||||||
28,485 | IHS, Inc. - Class A* | 1,177,570 | |||||||||
2,826,915 | |||||||||||
Consulting Services - 1.7% | |||||||||||
30,165 | Corporate Executive Board Co. | 1,919,701 | |||||||||
Data Processing and Management - 1.6% | |||||||||||
53,390 | NAVTEQ Corp.* | 1,887,870 | |||||||||
Distribution/Wholesale - 3.1% | |||||||||||
41,605 | MWI Veterinary Supply, Inc.* | 1,546,042 | |||||||||
82,320 | NuCo2, Inc.* | 2,049,768 | |||||||||
3,595,810 | |||||||||||
Diversified Operations - 1.9% | |||||||||||
28,585 | Crane Co. | 1,215,149 | |||||||||
3,134,289 | Polytec Asset Holdings, Ltd.§ | 961,381 | |||||||||
2,176,530 |
Shares or Principal Amount | Value | ||||||||||
Electronic Components - Semiconductors - 5.1% | |||||||||||
30,160 | International Rectifier Corp.* | $ | 1,064,045 | ||||||||
38,260 | IPG Photonics Corp.* | 695,949 | |||||||||
16,570 | Microchip Technology, Inc. | 668,434 | |||||||||
63,425 | Microsemi Corp.* | 1,465,752 | |||||||||
39,718 | Silicon-On-Insulator Technologies (SOITEC)* | 929,197 | |||||||||
43,345 | SiRF Technology Holdings, Inc.* | 1,051,550 | |||||||||
5,874,927 | |||||||||||
Electronic Measuring Instruments - 1.1% | |||||||||||
44,809 | Trimble Navigation, Ltd.* | 1,285,122 | |||||||||
Energy - Alternate Sources - 1.2% | |||||||||||
3,870 | Comverge, Inc.* | 83,012 | |||||||||
52,640 | JA Solar Holdings Company, Ltd. (ADR)* | 1,283,889 | |||||||||
1,366,901 | |||||||||||
Enterprise Software/Services - 1.7% | |||||||||||
85,270 | Omnicell, Inc.* | 1,956,094 | |||||||||
Finance - Consumer Loans - 1.8% | |||||||||||
75,755 | Nelnet, Inc. - Class A | 2,037,052 | |||||||||
Finance - Other Services - 2.2% | |||||||||||
20,175 | International Securities Exchange, Inc. | 1,345,471 | |||||||||
68,980 | MarketAxess Holdings, Inc.* | 1,129,892 | |||||||||
2,475,363 | |||||||||||
Firearms and Ammunition - 1.0% | |||||||||||
90,125 | Sturm Ruger and Company, Inc.* | 1,163,514 | |||||||||
Human Resources - 0.9% | |||||||||||
35,360 | Resources Connection, Inc.* | 1,066,811 | |||||||||
Internet Applications Software - 0.6% | |||||||||||
926 | E-Seikatsu Company, Ltd.* | 635,756 | |||||||||
Internet Content - Information/News - 0.6% | |||||||||||
114,280 | Harris Interactive, Inc.* | 687,966 | |||||||||
Machinery - General Industrial - 0.8% | |||||||||||
2,214,000 | Shanghai Electric Group Company, Ltd. | 944,083 | |||||||||
Medical - Biomedical and Genetic - 0.5% | |||||||||||
14,600 | Alexion Pharmaceuticals, Inc.* | 611,156 | |||||||||
Medical - Drugs - 1.7% | |||||||||||
97,640 | Achillion Pharmaceuticals, Inc.* | 595,604 | |||||||||
45,955 | Array BioPharma, Inc.* | 641,072 | |||||||||
33,335 | Cubist Pharmaceuticals, Inc.* | 715,036 | |||||||||
1,951,712 | |||||||||||
Medical Instruments - 2.0% | |||||||||||
13,091 | Intuitive Surgical, Inc.* | 1,697,379 | |||||||||
13,225 | Ventana Medical Systems, Inc.* | 642,603 | |||||||||
2,339,982 | |||||||||||
Medical Products - 1.3% | |||||||||||
27,655 | Varian Medical Systems, Inc.* | 1,167,318 | |||||||||
26,775 | Xtent, Inc.* | 361,998 | |||||||||
1,529,316 | |||||||||||
Office Furnishings - Original - 1.2% | |||||||||||
59,860 | Knoll, Inc. | 1,389,949 | |||||||||
Oil and Gas Drilling - 1.5% | |||||||||||
53,800 | Helmerich & Payne, Inc. | 1,737,202 | |||||||||
Oil Companies - Exploration and Production - 2.0% | |||||||||||
37,885 | Carrizo Oil & Gas, Inc.* | 1,396,062 | |||||||||
492,295 | Gasco Energy, Inc.* | 886,131 | |||||||||
2,282,193 |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2007 43
Janus Triton Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Physician Practice Management - 2.4% | |||||||||||
32,310 | Healthways, Inc.* | $ | 1,370,590 | ||||||||
24,520 | Pediatrix Medical Group, Inc.* | 1,398,866 | |||||||||
2,769,456 | |||||||||||
Printing - Commercial - 1.3% | |||||||||||
40,685 | VistaPrint, Ltd.* | 1,520,805 | |||||||||
Real Estate Operating/Development - 1.3% | |||||||||||
27,000 | Rodobens Negocios Imobiliarios S.A.* | 264,404 | |||||||||
20,825 | St. Joe Co. | 1,179,319 | |||||||||
1,443,723 | |||||||||||
Recreational Centers - 0.5% | |||||||||||
11,825 | Life Time Fitness, Inc.* | 607,805 | |||||||||
Recreational Vehicles - 0.6% | |||||||||||
12,875 | Polaris Industries, Inc. | 650,574 | |||||||||
REIT - Mortgages - 1.0% | |||||||||||
46,804 | CapitalSource, Inc. | 1,206,139 | |||||||||
Respiratory Products - 1.7% | |||||||||||
49,180 | Respironics, Inc.* | 2,004,577 | |||||||||
Retail - Apparel and Shoe - 0.5% | |||||||||||
7,705 | Abercrombie & Fitch Co. - Class A | 629,190 | |||||||||
Retail - Computer Equipment - 0.8% | |||||||||||
26,920 | GameStop Corp. - Class A* | 892,936 | |||||||||
Retail - Gardening Products - 1.0% | |||||||||||
23,115 | Tractor Supply Co.* | 1,195,970 | |||||||||
Retail - Petroleum Products - 1.1% | |||||||||||
26,420 | World Fuel Services Corp. | 1,220,868 | |||||||||
Retail - Restaurants - 1.1% | |||||||||||
19,470 | Chipotle Mexican Grill, Inc. - Class A*,** | 1,270,028 | |||||||||
Retail - Sporting Goods - 1.5% | |||||||||||
44,250 | Zumiez, Inc.*,** | 1,746,105 | |||||||||
Schools - 1.2% | |||||||||||
10,760 | Strayer Education, Inc. | 1,337,898 | |||||||||
Semiconductor Components/Integrated Circuits - 1.8% | |||||||||||
91,070 | Cypress Semiconductor Corp.* | 2,078,217 | |||||||||
Telecommunication Services - 6.1% | |||||||||||
33,690 | Amdocs, Ltd. (U.S. Shares)* | 1,238,108 | |||||||||
94,945 | FiberTower Corp.* | 428,202 | |||||||||
58,215 | NeuStar, Inc. - Class A* | 1,674,263 | |||||||||
40,140 | SAVVIS, Inc.* | 2,070,019 | |||||||||
78,785 | Time Warner Telecom, Inc. - Class A* | 1,615,093 | |||||||||
7,025,685 | |||||||||||
Theaters - 1.1% | |||||||||||
49,065 | National Cinemedia, Inc.* | 1,289,919 | |||||||||
Therapeutics - 2.0% | |||||||||||
12,305 | Amylin Pharmaceuticals, Inc.* | 508,566 | |||||||||
39,490 | MannKind Corp.* | 574,185 | |||||||||
29,455 | MGI Pharma, Inc.* | 648,598 | |||||||||
18,185 | Theravance, Inc.* | 602,469 | |||||||||
2,333,818 | |||||||||||
Transactional Software - 0.9% | |||||||||||
85,515 | Innerworkings, Inc.* | 1,049,269 | |||||||||
Transportation - Equipment and Leasing - 1.4% | |||||||||||
32,770 | GATX Corp. | 1,606,058 | |||||||||
Transportation - Services - 1.4% | |||||||||||
245,000 | Integrated Distribution Services Group, Ltd. | 689,133 | |||||||||
41,110 | UTi Worldwide, Inc. (U.S. Shares) | 964,852 | |||||||||
1,653,985 |
Shares or Principal Amount | Value | ||||||||||
Transportation - Truck - 3.9% | |||||||||||
25,045 | Con-Way, Inc. | $ | 1,368,208 | ||||||||
67,240 | Heartland Express, Inc. | 1,158,545 | |||||||||
40,530 | Landstar System, Inc. | 1,958,005 | |||||||||
4,484,758 | |||||||||||
Veterinary Diagnostics - 1.2% | |||||||||||
35,930 | VCA Antech, Inc.* | 1,416,720 | |||||||||
Web Hosting/Design - 3.3% | |||||||||||
20,055 | Equinix, Inc.* | 1,673,991 | |||||||||
250,895 | Terremark Worldwide, Inc.* | 2,082,428 | |||||||||
3,756,419 | |||||||||||
Web Portals/Internet Service Providers - 0.6% | |||||||||||
20,695 | SINA Corp. (U.S. Shares)* | 713,564 | |||||||||
Wireless Equipment - 2.0% | |||||||||||
78,870 | SBA Communications Corp. - Class A* | 2,320,355 | |||||||||
Total Common Stock (cost $103,528,309) | 114,769,646 | ||||||||||
Money Markets - 0.9% | |||||||||||
258,826 | Janus Institutional Cash Management Fund - Institutional Shares, 5.32% | 258,826 | |||||||||
752,894 | Janus Institutional Money Market Fund - Institutional Shares, 5.26% | 752,894 | |||||||||
Total Money Markets (cost $1,011,720) | 1,011,720 | ||||||||||
Total Investments (total cost $104,540,029) – 100.6% | 115,781,366 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets — (0.6)% | (663,487 | ) | |||||||||
Net Assets – 100% | $ | 115,117,879 |
Summary of Investments by Country – (Long Positions)
Country | Value | % of Investments Securities | |||||||||
Bermuda | $ | 1,520,805 | 1.3 | % | |||||||
Brazil | 1,635,583 | 1.4 | % | ||||||||
Canada | 818,849 | 0.7 | % | ||||||||
Cayman Islands | 1,674,945 | 1.4 | % | ||||||||
China | 2,227,973 | 1.9 | % | ||||||||
France | 929,197 | 0.8 | % | ||||||||
Hong Kong | 689,133 | 0.6 | % | ||||||||
Japan | 635,756 | 0.6 | % | ||||||||
Mexico | 791,527 | 0.7 | % | ||||||||
United Kingdom | 2,202,959 | 1.9 | % | ||||||||
United States†† | 102,654,639 | 88.7 | % | ||||||||
Total | $ | 115,781,366 | 100.0 | % |
††Includes Short-Term Securities (87.8% excluding Short-Term Securities).
Value | |||||||
Schedule of Written Options - Calls | |||||||
Chipotle Mexican Grill, Inc. - Class A expires June 2007 48 contracts exercise price $65.00 | $ | (14,400 | ) | ||||
Zumiez, Inc. expires May 2007 268 contracts exercise price $40.00 | (40,200 | ) | |||||
Total Written Options - Calls | |||||||
316 contracts (Premiums received $77,970) | $ | (54,600 | ) |
See Notes to Schedules of Investments and Financial Statements.
44 Janus Growth Funds April 30, 2007
Janus Twenty Fund (unaudited) (closed to new investors)
Ticker: JAVLX
Fund Snapshot
This focused growth fund invests primarily in a core group 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-month period ending April 30, 2007, Janus Twenty Fund returned 11.03%. During the same six-month period, the Russell 1000® Growth Index returned 8.42% and the S&P 500® Index, 8.60%.
Needless to say, we continue to be quite pleased with the Fund's performance. When these latest returns, through April 30, 2007, are added to the Fund's past performance, Janus Twenty Fund is solidly in the top performance percentiles compared to its peers for the trailing one-, three-, five- and 10-year periods based on total returns, according to Lipper Analytical Services. The table below depicts the Fund's relative performance in more detail.
One Year | Three Years | Five Years | Ten Years | ||||||||||||||||
Lipper Quartile (Rank as of 4/30/07, based on total Returns for Lipper Large-Cap Growth Funds) | 1st (9 out of 723) | 1st (3 out of 620) | 1st (3 out of 506) | 1st (4 out of 195) |
Data presented reflects past performance, which is no guarantee of future results.
Stewardship of the Fund
In addition to the Fund's performance, I personally take great pride in our stewardship of your investments. Janus Twenty Fund's expense ratio remains well below the Lipper Large Cap Growth industry average. As of the most recent fiscal year end, the Fund's annual expense ratio was 0.92% versus the industry average of 1.40%. One of the contributing factors to keeping fund expenses lower than the industry average is the Fund's lower portfolio turnover rate, which results in lower overall trading costs. Janus Twenty Fund's portfolio turnover rate was 41% versus the industry average of 96% as of 10/31/06. Janus Twenty Fund also remains closed to new investors as it has since April of 1999. While there are some compelling arguments to re-open the Fund, and I have little doubt that our expanded research efforts could support a larger find size, I also continue to believe that there is some truth to the old Wall Street adage that "size is the enem y of performance." So, for at least the time being, I prefer to error on the side of conservatism and keep the fund closed to new investors. Finally, in addition to being the Fund's portfolio manager, I remain one of its largest investors, side by side with each one of you.
Key Contributors
Janus Twenty Fund has a number of investments in agriculture and agriculture-related stocks that contributed positively to the Fund's performance. Specifically, our investment in Potash Corporation of Saskatchewan was the single biggest contributor to the Fund's performance during the past six months. Potash is one of the three primary ingredients used to manufacture fertilizer (the other two being phosphate and nitrogen). As the world becomes more industrialized and standards of living have risen, studies show that people who find themselves in an improved economic condition eat better. They consume more meat, poultry and complex foods of all types. Growing and processing more complex foods requires more feed stocks (primarily corn and soy beans), which in turn require higher yields on increasingly tight farmable acreage. We believe Potash is well-positioned with both i ts potash and phosphate deposits. The company has seen the demand for these mined products increase substantially over the past couple of years. We are often asked if Potash is also an "ethanol" play. The answer is "yes," but ethanol is only one of the positive components of our investment thesis for Potash.
One of the other significant contributors to the Fund's performance was our investment in Syngenta, a Swiss-based company that specializes in the development of seeds and crop-protection products. Syngenta enjoys a very strong market share position in Brazil, which is one of the world's largest agricultural markets; and a competitive position in the U.S. behind Monsanto Corporation, which is also owned in the Fund. The agricultural sector, much like minerals and mining, has historically been very cyclical, and investments in the sector can be volatile and easily misunderstood. I think our research analysts deserve a tremendous amount of credit for the fine work they have done on these investments.
Main Detractor
Whole Foods Market was the biggest detractor to the Fund's performance during the past six months. To be fair, Whole Foods was one of the smaller investments in the Fund and although it was an expensive stock by most financial metrics, we
Janus Growth Funds April 30, 2007 45
Janus Twenty Fund (unaudited)
thought its growth prospects were worthy of a modest investment. Unfortunately, as is often the case with a fast-growing enterprise, it's very difficult to meet the ever-enthusiastic expectations of Wall Street. Whole Foods proved to be no exception. Store openings slowed, food costs rose slightly and sales moderated as the economy softened. Together, the convergence of these three factors caused Whole Foods to fall off our expected growth curve, and as a result the Fund lost money on this investment. Rather than rationalize the bad news as being temporary, I elected to sell the stock. Subsequent to our sale, Whole Foods bought its nearest competitor and I believe the combination of these two enterprises has many potential benefits. We continue to be intrigued with consumers' move toward more natural foods and will be watching their progress.
Outlook Going Forward
The equity markets both here in the U.S. and around the world have been quite strong, but there are signs that the U.S. economy is beginning to slow. Housing in some markets is particularly soft, and the subprime mortgage market has garnered a disproportionate amount of attention, with many pundits claiming this is the first in a series of potential dominos to fall. I am not in that camp. Yes, I think there will be some fallout from the excesses of the recent boom in housing, but our analysis suggests that the economy will be able to absorb these dislocations and after some pause, even the most affected markets should slowly recover.
Outside the U.S., many of the world's economies remain quite strong. In addition to China and India, I believe Latin America and emerging Eastern Europe are particularly robust. I expect some very sharp sell-offs from time to time in these markets, which have historically been faster-growing. I think the sharp sell-offs will spread to the more mature markets. But if there is any lesson to be learned from the past decade, it's that a steady hand is often well-rewarded. I remain optimistic about the global prospects for growth and am confident that our research-centric investment process will continue to find compelling investment opportunities for our investors.
Thank you for you continued confidence and investment in Janus Twenty Fund.
Janus Twenty Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 1.73 | % | |||||
Companhia Vale do Rio Doce (ADR) | 0.98 | % | |||||
Gilead Sciences, Inc. | 0.89 | % | |||||
Syngenta A.G. | 0.88 | % | |||||
Apple, Inc. | 0.82 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Whole Foods Market, Inc. | (0.48 | )% | |||||
Amylin Pharmaceuticals, Inc. | (0.22 | )% | |||||
BHP Billiton, Ltd. (ADR) | (0.15 | )% | |||||
SPDR Trust Series 1 | (0.15 | )% | |||||
Archer-Daniels-Midland Co. | (0.14 | )% |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Russell 1000® Growth Index Weighting | |||||||||||||
Materials | 3.95 | % | 12.50 | % | 2.84 | % | |||||||||
Health Care | 2.50 | % | 21.97 | % | 17.46 | % | |||||||||
Energy | 1.84 | % | 13.51 | % | 4.01 | % | |||||||||
Consumer Discretionary | 1.42 | % | 9.13 | % | 14.20 | % | |||||||||
Information Technology | 1.42 | % | 16.18 | % | 26.54 | % |
5 Lowest Contributors/Detractors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Russell 1000® Growth Index Weighting | |||||||||||||
Consumer Staples | (0.18 | )% | 7.15 | % | 9.77 | % | |||||||||
Utilities | (0.07 | )% | 0.08 | % | 1.43 | % | |||||||||
Telecommunication Services | 0.00 | % | 0.00 | % | 0.90 | % | |||||||||
Industrials | 0.49 | % | 2.40 | % | 14.32 | % | |||||||||
Financials | 0.60 | % | 17.08 | % | 8.54 | % |
46 Janus Growth Funds April 30, 2007
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2007 | |||||||
Google, Inc. - Class A Web Portals/Internet Service Providers | 6.2 | % | |||||
Celgene Corp. Medical - Biomedical and Genetic | 5.3 | % | |||||
Wells Fargo & Co. Super-Regional Banks | 4.8 | % | |||||
Potash Corporation of Saskatchewan, Inc. (U.S. Shares) Agricultural Chemicals | 4.8 | % | |||||
Gilead Sciences, Inc. Therapeutics | 4.7 | % | |||||
25.8 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2007 |
Emerging markets comprised 2.3% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2007 | As of October 31, 2006 | ||||||
![]() | ![]() | ||||||
Janus Growth Funds April 30, 2007 47
Janus Twenty Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception** | Total Annual Fund Operating Expenses | ||||||||||||||||||||||
Janus Twenty Fund* | 11.03 | % | 15.05 | % | 12.23 | % | 9.93 | % | 13.55 | % | 0.92 | % | |||||||||||||||
Russell 1000® Growth Index | 8.42 | % | 12.25 | % | 6.22 | % | 5.32 | % | 11.37 | % | |||||||||||||||||
S&P 500® Index | 8.60 | % | 15.24 | % | 8.54 | % | 8.05 | % | 12.75 | % | |||||||||||||||||
Lipper Quartile | – | 1 | st | 1 | st | 1 | st | 1 | st | ||||||||||||||||||
Lipper Ranking - based on total return for Large-Cap Growth Funds | – | 9/723 | 3/506 | 4/195 | 1/40 |
Visit janus.com to view current performance
and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
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.
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.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*Closed to new investors.
**The Fund's inception date – April 30, 1985
48 Janus Growth Funds April 30, 2007
(unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,110.30 | $ | 4.76 | |||||||||
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, 2007 49
Janus Twenty Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Common Stock - 98.8% | |||||||||||
Aerospace and Defense - 2.3% | |||||||||||
25,682,995 | BAE Systems PLC | $ | 233,094,476 | ||||||||
Agricultural Chemicals - 10.8% | |||||||||||
3,099,255 | Monsanto Co. | 182,825,052 | |||||||||
2,704,920 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 485,587,239 | |||||||||
2,127,776 | Syngenta A.G. | 423,233,377 | |||||||||
1,091,645,668 | |||||||||||
Agricultural Operations - 2.9% | |||||||||||
3,935,525 | Bunge, Ltd. | 298,155,374 | |||||||||
Audio and Video Products - 2.7% | |||||||||||
5,146,110 | Sony Corp. (ADR) | 274,081,819 | |||||||||
Casino Hotels - 4.1% | |||||||||||
4,247,275 | Harrah's Entertainment, Inc. | 362,292,558 | |||||||||
582,275 | Las Vegas Sands Corp.* | 49,604,007 | |||||||||
411,896,565 | |||||||||||
Computers - 7.6% | |||||||||||
4,013,045 | Apple, Inc.* | 400,501,891 | |||||||||
2,840,605 | Research In Motion, Ltd. (U.S. Shares)* | 373,766,806 | |||||||||
774,268,697 | |||||||||||
Cosmetics and Toiletries - 3.7% | |||||||||||
5,870,065 | Procter & Gamble Co. | 377,503,880 | |||||||||
Diversified Minerals - 2.3% | |||||||||||
5,644,590 | Companhia Vale do Rio Doce (ADR) | 229,226,800 | |||||||||
Entertainment Software – 1.0% | |||||||||||
1,914,085 | Electronic Arts, Inc.*,# | 96,489,025 | |||||||||
Finance - Investment Bankers/Brokers - 12.8% | |||||||||||
1,672,380 | Bear Stearns Companies, Inc.# | 260,389,566 | |||||||||
2,074,390 | Goldman Sachs Group, Inc.# | 453,482,397 | |||||||||
3,693,845 | Lehman Brothers Holdings, Inc.# | 278,072,652 | |||||||||
3,421,580 | Merrill Lynch & Company, Inc. | 308,729,163 | |||||||||
1,300,673,778 | |||||||||||
Finance - Other Services - 1.2% | |||||||||||
143,195 | Chicago Mercantile Exchange Holdings, Inc.# | 73,996,016 | |||||||||
350,000 | IntercontinentalExchange, Inc.* | 44,450,000 | |||||||||
118,446,016 | |||||||||||
Medical - Biomedical and Genetic - 7.2% | |||||||||||
8,858,991 | Celgene Corp.* | 541,815,889 | |||||||||
2,399,831 | Genentech, Inc.* | 191,962,482 | |||||||||
733,778,371 | |||||||||||
Medical - Drugs - 4.1% | |||||||||||
2,211,936 | Roche Holding A.G. | 417,259,841 | |||||||||
Multimedia - 1.6% | |||||||||||
9,492,772 | Publishing & Broadcasting, Ltd. | 160,755,084 | |||||||||
Oil Companies - Exploration and Production - 2.2% | |||||||||||
1,508,335 | Apache Corp. | 109,354,288 | |||||||||
1,582,932 | EOG Resources, Inc.# | 116,250,526 | |||||||||
225,604,814 | |||||||||||
Oil Companies - Integrated - 7.4% | |||||||||||
4,352,195 | ConocoPhillips | 301,824,724 | |||||||||
4,060,635 | Hess Corp.# | 230,441,036 | |||||||||
4,374,260 | Occidental Petroleum Corp. | 221,774,982 | |||||||||
754,040,742 |
Shares or Principal Amount | Value | ||||||||||
Oil Refining and Marketing - 1.4% | |||||||||||
2,025,430 | Valero Energy Corp. | $ | 142,245,949 | ||||||||
Optical Supplies - 3.1% | |||||||||||
2,350,925 | Alcon, Inc. (U.S. Shares) | 317,210,310 | |||||||||
Retail - Apparel and Shoe - 1.2% | |||||||||||
2,053,706 | Industria de Diseno Textil S.A. | 125,892,308 | |||||||||
Retail - Consumer Electronics - 1.3% | |||||||||||
1,435,410 | Yamada Denki Company, Ltd. | 132,261,782 | |||||||||
Super-Regional Banks - 4.8% | |||||||||||
13,566,810 | Wells Fargo & Co. | 486,912,811 | |||||||||
Therapeutics - 5.2% | |||||||||||
1,222,948 | Amylin Pharmaceuticals, Inc.*,# | 50,544,441 | |||||||||
5,884,360 | Gilead Sciences, Inc.* | 480,869,899 | |||||||||
531,414,340 | |||||||||||
Web Portals/Internet Service Providers - 6.2% | |||||||||||
1,333,996 | Google, Inc. - Class A* | 628,819,034 | |||||||||
Wireless Equipment - 1.7% | |||||||||||
3,933,695 | QUALCOMM, Inc. | 172,295,841 | |||||||||
Total Common Stock (cost $6,703,413,652) | 10,033,973,325 | ||||||||||
Money Markets - 0.9% | |||||||||||
84,080,082 | Janus Institutional Cash Management Fund - Institutional Shares, 5.32% | 84,080,082 | |||||||||
8,893,000 | Janus Institutional Money Market Fund - Institutional Shares, 5.26% | 8,893,000 | |||||||||
Total Money Markets (cost $92,973,082) | 92,973,082 | ||||||||||
Other Securities - 0.5% | |||||||||||
53,442,838 | State Street Navigator Securities Lending Prime Portfolio † (cost $53,442,838) | 53,442,838 | |||||||||
Total Investments (total cost $6,849,829,572) – 100.2% | 10,180,389,245 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.2)% | (16,682,552 | ) | |||||||||
Net Assets – 100% | $ | 10,163,706,693 |
Summary of Investments by Country – (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Australia | $ | 160,755,084 | 1.6 | % | |||||||
Bermuda | 298,155,374 | 2.9 | % | ||||||||
Brazil | 229,226,800 | 2.3 | % | ||||||||
Canada | 859,354,045 | 8.4 | % | ||||||||
Japan | 406,343,601 | 4.0 | % | ||||||||
Spain | 125,892,308 | 1.2 | % | ||||||||
Switzerland | 1,157,703,528 | 11.4 | % | ||||||||
United Kingdom | 233,094,476 | 2.3 | % | ||||||||
United States†† | 6,709,864,029 | 65.9 | % | ||||||||
Total | $ | 10,180,389,245 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (64.5% excluding Short-Term Securities and Other Securities).
See Notes to Schedules of Investments and Financial Statements.
50 Janus Growth Funds April 30, 2007
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
For the six-month period ending April 30, 2007, the Fund returned 14.48%, outpacing both its primary and secondary benchmarks, the Russell 2000® Growth Index and the Russell 2000® Index, which returned 7.42% and 6.86%, respectively.
Economic Overview
Equity markets delivered healthy gains during the period amid continued evidence of strong U.S. economic growth with modest inflation. After a brief period of market volatility in late February and early March, markets rebounded quickly on hopes of monetary easing by the Federal Reserve (Fed). While U.S. corporate profit growth showed signs of slowing, robust mergers and acquisitions (M&A) and private equity transactions continued to provide key valuation support to equities in the U.S. and around the globe.
With most U.S. equity indexes near all-time highs at the end of the period, I closely monitored several fundamental factors for directional cues. First, despite the weakness in the U.S. housing sector and the associated credit quality issues in the subprime mortgage market, at the end of the period the U.S. unemployment rate was near historic lows, mitigating the impact of the housing slowdown on consumer spending and the overall U.S. economy. I watched the labor market closely for any sign of a slowdown that could impact consumer sentiment and economic growth. Similarly, I monitored the higher-quality prime mortgage market and other areas of consumer lending for any indication of credit quality deterioration. Second, U.S. corporate profit growth experienced double-digit gains for several years, which, combined with strong liquidity from corporate M&A and private equity transactions, supported higher equity valuations. I will continue to watch both the future path of corporate earnings and the overall liquidity in the markets in an effort to determine whether current valuations can be sustained.
Select Consumer and Information Technology (IT) Holdings Aided Performance
I apply a "bottom up" approach in choosing investments. This means that I look at companies one at a time to determine if it is an attractive investment opportunity and if it is consistent with the Fund's investment policies.
For this particular period, Fund performance benefited from successful stock selection in the consumer discretionary and IT sectors, though an overweight to the latter was a detractor from performance Additionally, the Fund's underweight exposure to the financials sector proved fortuitous as consumer lending stocks came under selling pressure early in 2007.
One standout among consumer discretionary holdings was Brazilian online retailer Submarino, which rallied on news that it was being acquired by a larger competitor. Select IT names also aided returns, including employment database provider TALX. This holding with historically recurring revenue streams and strong quarterly results benefited from the recent announcement of its purchase by Equifax.
Industrials Shares Weighed on Performance
On the downside, the Fund suffered from pressure on select names in the industrials sector, where it remained overweight relative to its primary benchmark. Within the industrials sector, IPG Photonics guided to lower-than-expected financial results for the second quarter due to one contract being pulled into the first quarter. I continue to believe the company's laser fabrication technology should earn market share over the long run and use the weakness in its share price to add to the position.
Also within industrials, a relatively new position in non-asset based printing company, InnerWorkings, hurt returns as the stock price suffered. Much of the negative performance of the company's stock came from short positions in the market. I believe the company's competitive advantage is its network of printers and potential clients which should drive positive results.
Outlook
I remain constructive on prospects for the equity market, but caution that uncertainty over the near-term economic outlook could contribute to short-term volatility. Given the recent strength in small cap growth stocks, I will continue to reduce the Fund's positions where I think valuations are less compelling, and use short-term volatility as an opportunity to build positions in the highest-conviction ideas.
Janus Growth Funds April 30, 2007 51
Janus Venture Fund (unaudited)
Janus Venture Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Submarino S.A. | 1.03 | % | |||||
TALX Corp. | 0.97 | % | |||||
Huron Consulting Group, Inc. | 0.75 | % | |||||
International Securities Exchange, Inc. | 0.68 | % | |||||
Omniture, Inc. | 0.59 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
IPG Photonics Corp. | (0.33 | )% | |||||
Advisory Board Co. | (0.25 | )% | |||||
Innerworkings, Inc. | (0.25 | )% | |||||
Century Casinos, Inc. | (0.23 | )% | |||||
Adams Respiratory Therapeutics, Inc. | (0.22 | )% |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Russell 2000® Growth Index Weighting | |||||||||||||
Information Technology | 5.33 | % | 27.19 | % | 23.98 | % | |||||||||
Consumer Discretionary | 4.40 | % | 20.92 | % | 16.45 | % | |||||||||
Industrials | 1.86 | % | 22.04 | % | 17.63 | % | |||||||||
Health Care | 0.81 | % | 16.89 | % | 19.59 | % | |||||||||
Financials | 0.62 | % | 6.78 | % | 9.08 | % |
5 Lowest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Russell 2000® Growth Index Weighting | |||||||||||||
Utilities | 0.00 | % | 0.00 | % | 0.14 | % | |||||||||
Telecommunication Services | 0.00 | % | 1.26 | % | 1.31 | % | |||||||||
Materials | 0.01 | % | 0.04 | % | 3.22 | % | |||||||||
Consumer Staples | 0.21 | % | 1.31 | % | 2.70 | % | |||||||||
Energy | 0.28 | % | 3.57 | % | 5.91 | % |
52 Janus Growth Funds April 30, 2007
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2007 | |||||||
Ultimate Software Group, Inc. Enterprise Software/Services | 3.0 | % | |||||
VistaPrint, Ltd. Printing - Commercial | 2.8 | % | |||||
Equinix, Inc. Web Hosting/Design | 2.7 | % | |||||
Jarden Corp. Consumer Products - Miscellaneous | 2.6 | % | |||||
Omnicell, Inc. Enterprise Software/Services | 2.5 | % | |||||
13.6 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2007 |
Emerging markets comprised 2.5% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2007 | As of October 31, 2006 | ||||||
![]() | ![]() | ||||||
Janus Growth Funds April 30, 2007 53
Janus Venture Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception** | Total Annual Fund Operating Expenses | ||||||||||||||||||||||
Janus Venture Fund* | 14.48 | % | 14.05 | % | 12.54 | % | 12.56 | % | 13.89 | % | 0.91 | % | |||||||||||||||
Russell 2000® Growth Index | 7.42 | % | 4.53 | % | 8.91 | % | 6.71 | % | 8.25 | % | |||||||||||||||||
Russell 2000® Index | 6.86 | % | 7.83 | % | 11.14 | % | 10.40 | % | 11.11 | % | |||||||||||||||||
Lipper Quartile | – | 1 | st | 1 | st | 2 | nd | 1 | st | ||||||||||||||||||
Lipper Ranking - based on total return for Small-Cap Growth Funds | – | 11/536 | 33/364 | 39/147 | 1/10 |
Visit janus.com to view current performance
and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
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.
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.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*Closed to new investors.
**The Fund's inception date – April 30, 1985
54 Janus Growth Funds April 30, 2007
(unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,144.80 | $ | 4.68 | |||||||||
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).
Janus Growth Funds April 30, 2007 55
Janus Venture Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Common Stock - 99.6% | |||||||||||
Advanced Materials/Products - 0.8% | |||||||||||
215,851 | Ceradyne, Inc.*,# | $ | 12,702,831 | ||||||||
Aerospace and Defense - 0.9% | |||||||||||
144,668 | Aerovironment, Inc.*,# | 3,095,895 | |||||||||
301,305 | TransDigm Group, Inc.*,# | 11,410,421 | |||||||||
14,506,316 | |||||||||||
Applications Software - 2.1% | |||||||||||
655,580 | American Reprographics Co.*,# | 21,765,256 | |||||||||
654,450 | Quest Software, Inc.*,# | 11,132,195 | |||||||||
32,897,451 | |||||||||||
Auction House - Art Dealer - 1.3% | |||||||||||
393,240 | Sotheby's Holdings, Inc. - Class A# | 20,299,049 | |||||||||
Audio and Video Products - 0.4% | |||||||||||
274,765 | DTS, Inc.*,# | 6,149,241 | |||||||||
Casino Services - 0.3% | |||||||||||
482,833 | Pokertek, Inc.*,ºº,§,£ | 4,746,248 | |||||||||
Chemicals - Plastics - 0.3% | |||||||||||
213,595 | Metabolix, Inc.*,# | 5,342,011 | |||||||||
Commercial Services - 3.5% | |||||||||||
723,415 | CoStar Group, Inc.*, | 35,309,886 | |||||||||
2,346,939 | Intermap Technologies, Ltd.*,£ | 13,258,228 | |||||||||
229,805 | Providence Service Corp.*,# | 5,510,724 | |||||||||
54,078,838 | |||||||||||
Commercial Services - Finance - 3.0% | |||||||||||
431,330 | Bankrate, Inc.*,# | 17,412,791 | |||||||||
261,726 | Euronet Worldwide, Inc.*,# | 7,289,069 | |||||||||
473,205 | Heartland Payment Systems, Inc.# | 11,797,001 | |||||||||
226,665 | Jackson Hewitt Tax Service, Inc.# | 6,251,421 | |||||||||
91,715 | Wright Express Corp.*,# | 2,889,940 | |||||||||
45,640,222 | |||||||||||
Communications Software - 0.2% | |||||||||||
128,245 | DivX, Inc.*,# | 2,585,419 | |||||||||
Computer Graphics - 0.4% | |||||||||||
321,865 | Trident Microsystems, Inc.*,# | 6,833,194 | |||||||||
Computer Services - 2.6% | |||||||||||
446,700 | IHS, Inc. - Class A*,# | 18,466,578 | |||||||||
3,140,420 | LivePerson, Inc.*,#,£ | 21,982,940 | |||||||||
40,449,518 | |||||||||||
Computer Software - 1.0% | |||||||||||
801,275 | Omniture, Inc.*,# | 15,096,021 | |||||||||
Computers - Integrated Systems - 1.3% | |||||||||||
627,550 | Riverbed Technology, Inc.*,# | 20,025,121 | |||||||||
Consulting Services - 2.9% | |||||||||||
333,380 | Advisory Board Co.*,# | 15,828,882 | |||||||||
471,125 | Huron Consulting Group, Inc.*,# | 28,526,619 | |||||||||
44,355,501 | |||||||||||
Consumer Products - Miscellaneous - 2.6% | |||||||||||
950,745 | Jarden Corp.*,# | 40,064,394 | |||||||||
Cosmetics and Toiletries - 0.3% | |||||||||||
213,470 | Physicians Formula Holdings, Inc.*,# | 4,487,139 |
Shares or Principal Amount | Value | ||||||||||
Data Processing and Management - 1.8% | |||||||||||
1,702,158 | Infocrossing, Inc.*,£ | $ | 27,217,506 | ||||||||
Dental Supplies and Equipment - 0.7% | |||||||||||
329,729 | Sirona Dental Systems, Inc.*,# | 10,884,354 | |||||||||
Dialysis Centers - 0% | |||||||||||
46,410 | Dialysis Corporation of America*,# | 540,677 | |||||||||
Direct Marketing - 1.4% | |||||||||||
1,704,932 | ValueVision Media, Inc.*,§,£ | 19,282,781 | |||||||||
211,690 | ValueVision Media, Inc. - Class A* | 2,394,214 | |||||||||
21,676,995 | |||||||||||
Distribution/Wholesale - 2.3% | |||||||||||
337,680 | Beacon Roofing Supply, Inc.*,# | 5,311,706 | |||||||||
269,866 | MWI Veterinary Supply, Inc.*,# | 10,028,221 | |||||||||
803,330 | NuCo2, Inc.*,#,£ | 20,002,917 | |||||||||
35,342,844 | |||||||||||
Diversified Operations - 0.6% | |||||||||||
27,950,763 | Polytec Asset Holdings, Ltd.§ | 8,573,346 | |||||||||
Drug Delivery Systems - 0.9% | |||||||||||
904,930 | I-Flow Corp.*,# | 14,008,316 | |||||||||
E-Commerce/Products - 0% | |||||||||||
29,670 | Baby Universe, Inc.*,# | 243,294 | |||||||||
E-Commerce/Services - 0.7% | |||||||||||
2,085,250 | Think Partnership, Inc.*,# | 4,816,928 | |||||||||
4,957,152 | Workstream, Inc. (U.S. Shares)*,#,£ | 5,750,296 | |||||||||
10,567,224 | |||||||||||
Electronic Components - Semiconductors - 2.2% | |||||||||||
673,620 | IPG Photonics Corp.* | 12,253,148 | |||||||||
186,255 | Microsemi Corp.*,# | 4,304,353 | |||||||||
733,685 | SiRF Technology Holdings, Inc.* | 17,799,198 | |||||||||
34,356,699 | |||||||||||
Electronic Measuring Instruments - 1.1% | |||||||||||
593,562 | Trimble Navigation, Ltd.* | 17,023,358 | |||||||||
E-Marketing/Information - 0.7% | |||||||||||
232,475 | Liquidity Services, Inc.*,# | 4,854,078 | |||||||||
195,230 | ValueClick, Inc.*,# | 5,583,578 | |||||||||
10,437,656 | |||||||||||
Engineering - Research and Development Services - 0.2% | |||||||||||
172,125 | Stanley, Inc.*,# | 2,600,809 | |||||||||
Enterprise Software/Services - 5.8% | |||||||||||
1,694,539 | Omnicell, Inc.*,£ | 38,872,725 | |||||||||
229,245 | Salary.com, Inc.* | 2,750,940 | |||||||||
1,685,930 | Ultimate Software Group, Inc.*,£ | 46,531,667 | |||||||||
88,155,332 | |||||||||||
E-Services/Consulting - 1.1% | |||||||||||
804,165 | GSI Commerce, Inc.*,# | 17,772,047 | |||||||||
Finance - Consumer Loans - 0.4% | |||||||||||
247,758 | Nelnet, Inc. - Class A# | 6,662,213 | |||||||||
Finance - Investment Bankers/Brokers - 0.7% | |||||||||||
417,485 | optionsXpress Holdings, Inc.# | 10,303,530 | |||||||||
Finance - Other Services - 3.1% | |||||||||||
97,040 | FCStone Group, Inc.*,# | 4,372,622 | |||||||||
579,170 | International Securities Exchange, Inc.# | 38,624,847 | |||||||||
260,015 | MarketAxess Holdings, Inc.*,# | 4,259,046 | |||||||||
47,256,515 |
See Notes to Schedules of Investments and Financial Statements.
56 Janus Growth Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Firearms and Ammunition - 1.4% | |||||||||||
587,825 | Smith & Wesson Holding Corp.*,# | $ | 8,064,959 | ||||||||
1,010,940 | Sturm Ruger and Company, Inc.*,# | 13,051,235 | |||||||||
21,116,194 | |||||||||||
Food - Canned - 0.6% | |||||||||||
318,575 | TreeHouse Foods, Inc.* | 9,601,851 | |||||||||
Gambling - Non-Hotel - 0.8% | |||||||||||
1,528,091 | Century Casinos, Inc.*,£ | 12,805,403 | |||||||||
Hotels and Motels - 1.9% | |||||||||||
569,445 | Orient-Express Hotel, Ltd. - Class A# | 29,981,279 | |||||||||
Human Resources - 2.1% | |||||||||||
425,854 | Barrett Business Services, Inc.# | 9,717,988 | |||||||||
424,790 | Kenexa Corp.*,# | 13,151,499 | |||||||||
298,770 | Resources Connection, Inc.*,# | 9,013,891 | |||||||||
31,883,378 | |||||||||||
Identification Systems and Devices - 0.7% | |||||||||||
575,455 | L-1 Identity Solutions, Inc.*,# | 11,060,245 | |||||||||
Internet Applications Software - 1.0% | |||||||||||
472,245 | DealerTrack Holdings, Inc.*,# | 15,584,085 | |||||||||
Internet Connectivity Services - 0.1% | |||||||||||
115,235 | Internap Network Services Corp.*,# | 1,770,010 | |||||||||
Internet Content - Information/News - 1.3% | |||||||||||
1,808,435 | Harris Interactive, Inc.*,# | 10,886,779 | |||||||||
1,563,480 | Health Grades, Inc.*,£ | 9,380,880 | |||||||||
20,267,659 | |||||||||||
Internet Infrastructure Software - 0.3% | |||||||||||
403,117 | Chordiant Software, Inc.*,# | 5,333,238 | |||||||||
Investment Companies - 0.8% | |||||||||||
568,740 | Hercules Technology Growth Capital, Inc.# | 7,831,550 | |||||||||
30,000 | UTEK Corp.# | 507,000 | |||||||||
230,960 | UTEK Corp.*,§ | 3,903,224 | |||||||||
12,241,774 | |||||||||||
Marine Services - 0.4% | |||||||||||
1,648,955 | Odyssey Marine Exploration, Inc.* | 6,859,653 | |||||||||
Medical - Generic Drugs - 0.1% | |||||||||||
107,290 | Simcere Pharmaceutical Group (ADR)*,# | 1,781,014 | |||||||||
Medical - HMO - 0.8% | |||||||||||
595,994 | Centene Corp.*,# | 12,402,635 | |||||||||
Medical - Outpatient and Home Medical Care - 3.5% | |||||||||||
684,932 | Hythiam, Inc.*,§ | 4,760,277 | |||||||||
1,549,375 | Hythiam, Inc.* | 10,768,156 | |||||||||
557,450 | LHC Group LLC*,# | 14,270,720 | |||||||||
852,209 | Radiation Therapy Services, Inc.* | 25,063,467 | |||||||||
54,862,620 | |||||||||||
Medical Instruments - 0.3% | |||||||||||
92,970 | Ventana Medical Systems, Inc.*,# | 4,517,412 | |||||||||
Medical Labs and Testing Services - 0.3% | |||||||||||
184,763 | Bio-Reference Laboratories, Inc.*,# | 4,983,058 | |||||||||
Medical Products - 1.5% | |||||||||||
170,950 | Accuray, Inc.*,# | 4,034,420 | |||||||||
939,425 | PSS World Medical, Inc.*,# | 18,882,443 | |||||||||
22,916,863 |
Shares or Principal Amount | Value | ||||||||||
Motion Pictures and Services - 2.1% | |||||||||||
2,880,100 | Lions Gate Entertainment Corp. (U.S. Shares)*,# | $ | 32,919,543 | ||||||||
Music - 0.9% | |||||||||||
4,750,000 | Genius Products, Inc.*,§,£ | 14,392,500 | |||||||||
Networking Products - 0.7% | |||||||||||
321,080 | Acme Packet, Inc.*,# | 4,337,791 | |||||||||
388,915 | Switch and Data, Inc.*,# | 7,128,812 | |||||||||
11,466,603 | |||||||||||
Office Furnishings - Original - 0.7% | |||||||||||
456,290 | Knoll, Inc. | 10,595,054 | |||||||||
Oil - Field Services - 1.3% | |||||||||||
229,860 | Basic Energy Services, Inc.*,# | 5,941,881 | |||||||||
563,928 | Flint Energy Services, Ltd.* | 14,002,933 | |||||||||
19,944,814 | |||||||||||
Oil Companies - Exploration and Production - 0.9% | |||||||||||
277,860 | Carrizo Oil & Gas, Inc.*,# | 10,239,141 | |||||||||
2,293,805 | Gasco Energy, Inc.*,# | 4,128,849 | |||||||||
14,367,990 | |||||||||||
Pharmacy Services - 1.1% | |||||||||||
536,785 | HealthExtras, Inc.*,# | 16,613,496 | |||||||||
1,869,694 | Ronco Fi-Tek, Inc.*,ºº,§,£ | 0 | |||||||||
16,613,496 | |||||||||||
Physical Therapy and Rehabilitation Centers - 0.1% | |||||||||||
22,630 | Psychiatric Solutions, Inc.* | 793,634 | |||||||||
Physician Practice Management - 1.5% | |||||||||||
298,355 | Healthways, Inc.*,# | 12,656,219 | |||||||||
192,210 | Pediatrix Medical Group, Inc.*,# | 10,965,581 | |||||||||
23,621,800 | |||||||||||
Printing - Commercial - 2.8% | |||||||||||
1,142,494 | VistaPrint, Ltd.* | 42,706,426 | |||||||||
Private Corrections - 1.2% | |||||||||||
356,440 | Geo Group, Inc.*,# | 18,249,728 | |||||||||
Property and Casualty Insurance - 1.1% | |||||||||||
137,405 | First Mercury Financial Corp.*,# | 2,844,284 | |||||||||
550,950 | OneBeacon Insurance Group, Ltd.# | 13,415,632 | |||||||||
16,259,916 | |||||||||||
Real Estate Management/Services - 0.6% | |||||||||||
562,570 | HFF, Inc.*,# | 8,989,869 | |||||||||
Real Estate Operating/Development - 2.0% | |||||||||||
208,190 | Iguatemi Empresa de Shopping Centers S.A.* | 3,286,186 | |||||||||
1,973,020 | LPS Brasil - Consultoria de Imoveis S.A. | 20,302,357 | |||||||||
504,980 | PDG Realty S.A. Empreendimentos e Participacoes* | 3,505,597 | |||||||||
345,965 | Rodobens Negocios Imobiliarios S.A.* | 3,387,939 | |||||||||
30,482,079 | |||||||||||
Recreational Vehicles - 0.4% | |||||||||||
116,315 | Polaris Industries, Inc.# | 5,877,397 | |||||||||
Retail - Apparel and Shoe - 1.6% | |||||||||||
622,605 | J. Crew Group, Inc.*,# | 25,209,276 | |||||||||
Retail - Petroleum Products - 2.1% | |||||||||||
693,435 | World Fuel Services Corp.# | 32,043,631 |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2007 57
Janus Venture Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Retail - Sporting Goods - 0.8% | |||||||||||
320,760 | Zumiez, Inc.*,# | $ | 12,657,190 | ||||||||
Schools - 0.6% | |||||||||||
644,500 | Anhanguera Educacional* | 7,552,114 | |||||||||
50,825 | Capella Education Co.*,# | 1,776,334 | |||||||||
9,328,448 | |||||||||||
Semiconductor Components/Integrated Circuits - 0.5% | |||||||||||
177,857 | Hittite Microwave Corp.*,# | 8,035,579 | |||||||||
Telecommunication Services - 1.6% | |||||||||||
558,925 | NeuStar, Inc. - Class A* | 16,074,683 | |||||||||
125,580 | SAVVIS, Inc.*,# | 6,476,161 | |||||||||
452,145 | UCN, Inc.* | 1,817,623 | |||||||||
24,368,467 | |||||||||||
Theaters - 1.1% | |||||||||||
632,905 | National Cinemedia, Inc.*,# | 16,639,072 | |||||||||
Therapeutics - 0.5% | |||||||||||
136,635 | United Therapeutics Corp.* | 7,639,263 | |||||||||
Toys - 1.1% | |||||||||||
563,450 | Marvel Entertainment, Inc.* | 16,638,679 | |||||||||
Transactional Software - 2.0% | |||||||||||
1,668,905 | Innerworkings, Inc.* | 20,477,464 | |||||||||
412,955 | Synchronoss Technologies, Inc.* | 9,266,710 | |||||||||
74,132 | Systems Xcellence, Inc. (U.S. Shares)* | 1,690,951 | |||||||||
31,435,125 | |||||||||||
Transportation - Truck - 0.5% | |||||||||||
431,495 | Heartland Express, Inc.# | 7,434,659 | |||||||||
Veterinary Diagnostics - 0.3% | |||||||||||
341,695 | Animal Health International, Inc.* | 4,565,045 | |||||||||
Web Hosting/Design - 4.0% | |||||||||||
492,145 | Equinix, Inc.*,# | 41,079,342 | |||||||||
3,216,205 | NaviSite Inc.*,£ | 20,583,712 | |||||||||
61,663,054 | |||||||||||
Total Common Stock (cost $1,086,120,257) | 1,538,787,937 | ||||||||||
Warrants - 0.4% | |||||||||||
Casino Services - 0% | |||||||||||
146,926 | Pokertek, Inc. - expires 4/23/12*,ºº,§ | 560,317 | |||||||||
Data Processing and Management - 0.3% | |||||||||||
521,660 | Infocrossing, Inc. - expires 10/16/08ºº,§ | 4,541,258 | |||||||||
Medical - Wholesale Drug Distributors - 0% | |||||||||||
305,000 | Familymeds Group, Inc. - expires 9/29/10ºº,§ | 2,898 | |||||||||
Music - 0.1% | |||||||||||
1,425,000 | Genius Products, Inc. - expires 12/5/10ºº,§ | 1,520,760 | |||||||||
Travel Services - 0% | |||||||||||
458,181 | OneTravel Holdings, Inc. - expires 4/14/10ºº,§ | 0 | |||||||||
Total Warrants (cost $2,176,863) | 6,625,233 | ||||||||||
Other Securities - 25.2% | |||||||||||
390,469,502 | State Street Navigator Securities Lending Prime Portfolio (cost $390,469,502)† | 390,469,502 | |||||||||
Total Investments (total cost $1,478,766,622) – 125.2% | 1,935,882,672 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (25.2)% | (389,421,396 | ) | |||||||||
Net Assets – 100% | $ | 1,546,461,276 |
Summary of Investments by Country – (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Bermuda | $ | 86,103,337 | 4.4 | % | |||||||
Brazil | 38,034,193 | 2.0 | % | ||||||||
Canada | 67,621,951 | 3.5 | % | ||||||||
Cayman Islands | 10,354,360 | 0.5 | % | ||||||||
United States†† | 1,733,768,831 | 89.6 | % | ||||||||
Total | $ | 1,935,882,672 | 100.0 | % |
††Includes Other Securities (69.4% excluding Other Securities).
See Notes to Schedules of Investments and Financial Statements.
58 Janus Growth Funds April 30, 2007
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
Equity markets around the globe delivered healthy gains during the period amid continued evidence of strong economic growth and modest inflation. After a brief period of market volatility in late February and early March, stocks rebounded quickly and many indexes posted double-digit gains. While U.S. corporate profit growth showed signs of slowing, robust merger and acquisition (M&A) activity and private equity transactions continued to provide key valuation support to equities in the U.S. and around the world.
Although Janus Global Life Sciences Fund posted a gain of 8.30% during the six month period, it trailed its primary benchmark, the S&P 500® Index, which advanced 8.60%. The Fund beat the 7.37% return of the Morgan Stanley Capital International World Health Care Index, its secondary benchmark.
Select Biotechnology Stocks Weighed on Returns
Select holdings within the healthcare sector detracted from performance during the period. Nuvelo, a California-based biotech company, declined after its anti-clotting drug Alfimeprase, did not meet primary end points for its Phase III trials. Alfimeprase had generated a high level of enthusiasm in the medical community as a novel agent that promised to be faster, safer and easier to administer than currently available clot-busting drugs. However, despite highly positive Phase II results, the Phase III trials failed to meet their primary endpoints. Given this negative development, I sold the stock at a loss.
Adolor was also stymied by negative news surrounding a new drug offering. In November 2006, the company received notification from the Food and Drug Administration (FDA) that approval for its lead drug Entereg, designed for use in post-surgical complications, would be delayed due to concerns about cardiovascular safety issues that arose from a long term trial. In response, I liquidated the stock.
Achillion Pharmaceuticals, which is developing novel compounds for the treatment of Hepatitis C, also received a setback when its initial drug candidate was discontinued due to adverse effects on the kidney. However, I believe this approach still has merit so I held onto the position, awaiting data from the company's second generation products.
Select Biotechnology and Healthcare Service Stocks Aided Returns
The Fund also experienced its share of success stories during the semiannual period. Advanced Magnetics was our top performer. The company posted a sharp gain fueled by positive data for its drug Ferumoxytol, a potential best in class iron replacement therapeutic for chronic kidney disease patients.
I was also pleased with the performance of Medco Health Solutions, one of the country's largest prescription drug benefit managers. Medco advanced during the period on better-than-expected earnings that stemmed from an increase in generic drug utilization and better penetration of specialty biotechnology products.
The Fund also benefited when one of our venture capital investments, Cougar Biotechnology, went public at a significant premium to our initial investment. Cougar has three novel cancer agents in clinical development that I believe could drive further upside potential.
Looking Ahead
The outlook at this juncture is cautiously optimistic. Healthcare spending trends will be carefully watched as there have been signs that Congress may look to restrain the growth of Medicare spending. At the same time, my team and I feel that any changes at the companies in which we invest will be manageable. We are confident in the names we own and feel that the healthcare sector's recent underperformance could be due for a turnaround. Regardless, we will continue to seek investments within the healthcare arena that we feel represent the sector's best opportunities.
In closing, I recently announced that I will retire from my portfolio manager responsibilities for the Janus Global Life Sciences Fund, effective May 1, 2007. Andy Acker will become the portfolio manager of the Fund.
After working closely with Andy over the past eight years researching and investing in leading health care companies, I have high confidence in his ability to successfully manage the Fund. With his 11 years of experience, educational background in business and biochemistry and intuition about the markets, he is ideally suited to take over the reins.
I want to thank you for all your support over the years. It has been an honor to have worked on your behalf.
Janus Growth Funds April 30, 2007 59
Janus Global Life Sciences Fund (unaudited)
Janus Global Life Sciences Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Advanced Magnetics, Inc. | 1.08 | % | |||||
Medco Health Solutions, Inc. | 1.04 | % | |||||
Manor Care, Inc. | 0.93 | % | |||||
Acorda Therapeutics, Inc. | 0.69 | % | |||||
Merck & Company, Inc. | 0.68 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Nuvelo, Inc. | (3.03 | )% | |||||
Adolor Corp. | (0.78 | )% | |||||
Adams Respiratory Therapeutics, Inc. | (0.46 | )% | |||||
Varian Medical Systems, Inc. | (0.37 | )% | |||||
Achillion Pharmaceuticals, Inc. | (0.30 | )% |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | S&P 500® Index Weighting | |||||||||||||
Health Care | 6.58 | % | 90.58 | % | 12.12 | % | |||||||||
Consumer Staples | 0.94 | % | 5.04 | % | 9.34 | % | |||||||||
Materials | 0.45 | % | 2.17 | % | 3.04 | % | |||||||||
Financials | 0.28 | % | 1.75 | % | 21.95 | % | |||||||||
Energy | 0.00 | % | 0.00 | % | 9.82 | % |
5 Largest Detractors from Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | S&P 500® Index Weighting | |||||||||||||
Consumer Discretionary | (0.16 | )% | 0.45 | % | 10.61 | % | |||||||||
Utilities | 0.00 | % | 0.00 | % | 3.54 | % | |||||||||
Telecommunication Services | 0.00 | % | 0.00 | % | 3.52 | % | |||||||||
Information Technology | 0.00 | % | 0.00 | % | 15.18 | % | |||||||||
Industrials | 0.00 | % | 0.00 | % | 10.88 | % |
60 Janus Growth Funds April 30, 2007
(unaudited)
5 Largest Holdings – (% of Net Assets)
As of April 30, 2007 | |||||||
Merck & Company, Inc. Medical - Drugs | 4.1 | % | |||||
Roche Holding A.G. Medical - Drugs | 4.0 | % | |||||
CVS/Caremark Corp. Retail - Drug Store | 3.6 | % | |||||
Gilead Sciences, Inc. Therapeutics | 3.6 | % | |||||
Medco Health Solutions, Inc. Pharmacy Services | 3.4 | % | |||||
18.7 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2007 |
Emerging markets comprised 1.5% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2007 | As of October 31, 2006 | ||||||
![]() | ![]() | ||||||
Janus Growth Funds April 30, 2007 61
Janus Global Life Sciences Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Five Year | Since Inception* | Total Annual Fund Operating Expenses | |||||||||||||||||||
Janus Global Life Sciences Fund | 8.30 | % | 8.46 | % | 6.70 | % | 9.90 | % | 1.02 | % | |||||||||||||
S&P 500® Index | 8.60 | % | 15.24 | % | 8.54 | % | 3.90 | % | |||||||||||||||
Morgan Stanley Capital International World Health Care Index | 7.37 | % | 14.32 | % | 6.83 | % | 3.33 | % | |||||||||||||||
Lipper Quartile | – | 4 | th | 3 | rd | 2 | nd | ||||||||||||||||
Lipper Ranking - based on total return for Health/Biotechnology Funds | – | 134/169 | 74/132 | 18/47 |
Visit janus.com to view current performance
and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
A 2% redemption fee may be imposed on shares held for 3 months or less. Effective with purchases on and after May 15, 2007, a 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
The Fund invests in certain industry groups, which may react similarly to market developments (resulting in greater price volatility), and may have significant exposure to foreign markets (which include risks such as currency fluctuation and political uncertainty).
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.
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.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
Effective May 1, 2007, Andrew Acker became Portfolio Manager of Janus Global Life Sciences Fund.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – December 31, 1998
62 Janus Growth Funds April 30, 2007
(unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,083.00 | $ | 5.27 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.74 | $ | 5.11 |
*Expenses are equal to the annualized expense ratio of 1.02%, 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, 2007 63
Janus Global Life Sciences Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Common Stock - 97.5% | |||||||||||
Agricultural Chemicals - 2.2% | |||||||||||
99,572 | Syngenta A.G.** | $ | 19,805,747 | ||||||||
Diagnostic Kits - 1.4% | |||||||||||
258,431 | Dade Behring Holdings, Inc. | 12,691,546 | |||||||||
Dialysis Centers - 1.6% | |||||||||||
91,294 | Fresenius Medical Care A.G. & Co.**,# | 13,761,837 | |||||||||
Drug Delivery Systems - 2.2% | |||||||||||
469,760 | Hospira, Inc.* | 19,048,768 | |||||||||
Medical - Biomedical and Genetic - 18.4% | |||||||||||
755,792 | Acorda Therapeutics, Inc.*,# | 18,728,526 | |||||||||
131,460 | Advanced Magnetics, Inc.*,# | 8,650,068 | |||||||||
431,801 | Alexion Pharmaceuticals, Inc.*,# | 18,075,190 | |||||||||
234,660 | Amgen, Inc.* | 15,051,092 | |||||||||
470,045 | Celgene Corp.* | 28,747,952 | |||||||||
567,486 | Cougar Biotechnology, Inc.* | 12,059,078 | |||||||||
684,025 | Exelixis, Inc.*,# | 7,346,429 | |||||||||
1,271,821 | Fibrogen, Inc.*,oo,§ | 9,538,658 | |||||||||
185,870 | Genentech, Inc.* | 14,867,741 | |||||||||
245,430 | Genzyme Corp.* | 16,029,033 | |||||||||
176,480 | Millipore Corp.*,# | 13,029,518 | |||||||||
162,123,285 | |||||||||||
Medical - Drugs - 25.3% | |||||||||||
293,720 | Achillion Pharmaceuticals, Inc.* | 1,791,692 | |||||||||
125,455 | Allergan, Inc. | 15,205,146 | |||||||||
632,072 | Cubist Pharmaceuticals, Inc.* | 13,557,944 | |||||||||
772,440 | Dr. Reddy's Laboratories, Ltd. (ADR)# | 13,216,448 | |||||||||
331,660 | Eli Lilly and Co. | 19,611,056 | |||||||||
520,230 | K-V Pharmaceutical Co. - Class A*,# | 13,531,182 | |||||||||
697,805 | Merck & Company, Inc. | 35,895,090 | |||||||||
361,837 | Novartis A.G.**,# | 21,064,089 | |||||||||
409,590 | OSI Pharmaceuticals, Inc.*,# | 14,212,773 | |||||||||
187,123 | Roche Holding A.G.**,# | 35,298,903 | |||||||||
117,079 | Sanofi-Aventis** | 10,751,003 | |||||||||
204,519 | Stada Arzneimittel A.G.** | 13,496,290 | |||||||||
268,725 | Wyeth# | 14,914,238 | |||||||||
222,545,854 | |||||||||||
Medical - Generic Drugs - 0.2% | |||||||||||
122,135 | Simcere Pharmaceutical Group (ADR)* | 2,027,441 | |||||||||
Medical - HMO - 7.7% | |||||||||||
487,099 | Coventry Health Care, Inc.* | 28,168,934 | |||||||||
249,260 | UnitedHealth Group, Inc. | 13,225,736 | |||||||||
335,750 | WellPoint, Inc.* | 26,514,178 | |||||||||
67,908,848 | |||||||||||
Medical - Nursing Homes - 3.1% | |||||||||||
416,555 | Manor Care, Inc. | 27,030,254 | |||||||||
Medical - Wholesale Drug Distributors - 1.2% | |||||||||||
151,265 | Cardinal Health, Inc. | 10,580,987 | |||||||||
Medical Instruments - 3.4% | |||||||||||
225,625 | Medtronic, Inc. | 11,942,331 | |||||||||
422,600 | St. Jude Medical, Inc.* | 18,083,054 | |||||||||
30,025,385 | |||||||||||
Medical Products - 2.4% | |||||||||||
48,366 | Nobel Biocare Holding A.G.**,# | 17,459,876 | |||||||||
258,550 | Xtent, Inc.* | 3,495,596 | |||||||||
20,955,472 |
Shares or Principal Amount | Value | ||||||||||
Optical Supplies - 1.9% | |||||||||||
126,365 | Alcon, Inc. (U.S. Shares)** | $ | 17,050,429 | ||||||||
Pharmacy Services - 4.7% | |||||||||||
120,825 | Express Scripts, Inc. - Class A* | 11,544,829 | |||||||||
379,440 | Medco Health Solutions, Inc.* | 29,603,909 | |||||||||
41,148,738 | |||||||||||
Physician Practice Management - 1.6% | |||||||||||
245,800 | Pediatrix Medical Group, Inc.* | 14,022,890 | |||||||||
REIT - Health Care - 1.1% | |||||||||||
237,115 | Ventas, Inc. | 9,996,768 | |||||||||
REIT - Office Property - 1.2% | |||||||||||
99,315 | Alexandria Real Estate Equities, Inc.# | 10,512,493 | |||||||||
Respiratory Products - 1.7% | |||||||||||
365,090 | Respironics, Inc.* | 14,881,068 | |||||||||
Retail - Drug Store - 3.6% | |||||||||||
878,079 | CVS/Caremark Corp. | 31,821,583 | |||||||||
Soap and Cleaning Preparations - 1.9% | |||||||||||
299,183 | Reckitt Benckiser PLC** | 16,394,079 | |||||||||
Therapeutics - 10.7% | |||||||||||
261,950 | Amylin Pharmaceuticals, Inc.*,# | 10,826,394 | |||||||||
594,525 | BioMarin Pharmaceutical, Inc.*,# | 9,607,524 | |||||||||
382,695 | Gilead Sciences, Inc.* | 31,273,835 | |||||||||
586,890 | MannKind Corp.*,# | 8,533,381 | |||||||||
548,015 | MGI Pharma, Inc.*,# | 12,067,290 | |||||||||
391,099 | United Therapeutics Corp.* | 21,866,345 | |||||||||
94,174,769 | |||||||||||
Total Common Stock (cost $615,690,290) | 858,508,241 | ||||||||||
Preferred Stock - 1.3% | |||||||||||
Medical - Biomedical and Genetic - 0.1% | |||||||||||
26,677 | Cougar Biotechnology, Inc.ºº,§ | 566,886 | |||||||||
Medical - Generic Drugs - 0.8% | |||||||||||
8,364,183 | Mediquest Therapeuticsºº,§ | 7,527,765 | |||||||||
Medical Instruments - 0.4% | |||||||||||
44,502,593 | GMP Companies, Inc.ºº,§ | 3,925,129 | |||||||||
Total Preferred Stock (cost $8,951,512) | 12,019,780 | ||||||||||
Warrants - 0.2% | |||||||||||
Medical - Generic Drugs - 0.1% | |||||||||||
2,093,750 | Mediquest Therapeutics - expires 6/15/11ºº,§ | 628,125 | |||||||||
Medical Instruments – 0.1% | |||||||||||
21,509,194 | GMP Companies, Inc. - expires 6/1/11ºº,§ | 473,202 | |||||||||
3,679,948 | GMP Companies, Inc. - expires 6/1/11ºº,§ | 176,638 | |||||||||
649,840 | |||||||||||
Total Warrants (cost $0) | 1,277,965 | ||||||||||
Other Securities - 17.6% | |||||||||||
152,681,772 | State Street Navigator Securities Lending Prime Portfolio† | 152,681,772 | |||||||||
2,038,343 | U. S. Treasury Notes/Bonds† | 2,038,343 | |||||||||
Total Other Securities (cost $154,720,115) | 154,720,115 | ||||||||||
Total Investments (total cost $779,361,917) – 116.6% | 1,026,526,101 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (16.6)% | (146,454,897 | ) | |||||||||
Net Assets – 100% | $ | 880,071,204 |
See Notes to Schedules of Investments and Financial Statements.
64 Janus Growth Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Summary of Investments by Country – (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Cayman Islands | $ | 2,027,441 | 0.2 | % | |||||||
France | 10,751,003 | 1.0 | % | ||||||||
Germany | 27,258,127 | 2.7 | % | ||||||||
India | 13,216,448 | 1.3 | % | ||||||||
Switzerland | 110,679,044 | 10.8 | % | ||||||||
United Kingdom | 16,394,079 | 1.6 | % | ||||||||
United States†† | 846,199,959 | 82.4 | % | ||||||||
Total | $ | 1,026,526,101 | 100.0 | % |
†† Includes Other Securities (67.4% 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 8/15/07 | 1,793,000 | $ | 3,581,670 | $ | (127,366 | ) | |||||||||
Euro 10/17/07 | 5,900,000 | 8,096,838 | (240,015 | ) | |||||||||||
Swiss Franc 6/8/07 | 14,450,000 | 12,009,451 | (232,760 | ) | |||||||||||
Swiss Franc 8/15/07 | 12,700,000 | 10,612,393 | (133,758 | ) | |||||||||||
Total | $ | 34,300,352 | $ | (733,899 | ) |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2007 65
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
During the six months ended April 30, 2007, Janus Global Technology Fund advanced 12.51%. By comparison, the Fund's benchmarks, the Morgan Stanley Capital International (MSCI) World Information Technology Index and the S&P 500® Index returned 7.85% and 8.60%, respectively.
Investment Strategy
Janus Global Technology Fund's strategy is to seek long-term growth of capital. The Janus team of technology analysts and I look for high quality and innovative technology companies that are growing earnings and cash flow in excess of market expectations. To do this, we scour the globe to find what we believe are the best investment opportunities for the Fund. While investing in the technology sector can be more volatile than a broader market index, we believe the sector can provide an excellent area in which to seek attractive investment returns if one can tolerate the volatility.
As was recently announced, my very capable co-manager, Brad Slingerlend, elected to leave Janus to pursue other opportunities. I want to thank Brad for his many contributions to the Janus technology team over the years and wish him well in his new endeavors. As such, I have assumed responsibility as sole portfolio manager on the Fund and I plan to maintain the current investment strategy. The analysts and I will continue to employ the same in-depth fundamental analysis that is the hallmark of Janus. I intend to maintain the approach of keeping the portfolio close to the Janus analysts' views on stocks and intend to maintain over 90% of the portfolio in "buy" and "strong buy" rated stocks, which we did during the period. In addition, I plan to continue to construct a portfolio that is diversified across subsectors of tech, geographies, market capitalizations and valuation ranges.
The Fund invested in a few exciting themes during the period. One such theme included the increasing interactivity of the Internet as it undergoes a second wave of innovation. Driven by broadband penetration levels reaching above 40% in many developed countries, we are starting to see new and compelling ways to utilize the Internet. Companies like YouTube, recently purchased by Google, are changing the way consumers view their entertainment options. This broader sector theme is borne out in the Fund's investments including Akamai Technologies, Yahoo!, Google, Equinix and Juniper Networks.
Another exciting theme included the globalization of technology development and services. The Janus team of technology analysts visited hundreds of companies around the world during the period. They returned enthusiastic about the rapidly developing skill sets, such as information technology (IT) services and low-cost hardware manufacturing, in Asia. For example, longtime holding Hon Hai Precision Industry, based in Taiwan, has become the largest contract manufacturer in the world and continues to grow rapidly. In India, we think the large and growing pool of skilled software engineers helped contribute to gains in our investments in Infosys Technologies and Satyam Computer. As innovation continues to evolve in these emerging markets we continue to seek what we believe are the best growth technology companies at reasonable valuations.
Contributors to Fund Performance
Select holdings within industrials and consumer discretionary made positive contributions to performance during the time period.
Within industrials, solar company Suntech Power posted significant gains as it was able to maintain high rates of revenue and earnings growth. Another solar company, SunPower Corporation, also contributed to performance. We are quite positive on the multiyear outlook for the leading manufacturers of solar cells and the related food chain. As such, a number of holdings in the Fund are exposed to the secular trend of increasing the use of solar power to meet worldwide energy needs.
Within the consumer discretionary sector, Sony performed well during the time period. Based on our proprietary research, we have increased conviction in the company's ability to achieve manufacturing leverage by driving down costs. Our analysis contradicts Wall Street's skeptical view of Sony's ability to achieve operating margin goals. Furthermore, we are constructive on the flat panel TV market, which we think will likely benefit Sony's electronics market.
Detractors from Performance
While select holdings within the IT semiconductors sub-sector made a positive contribution to performance, certain
66 Janus Growth Funds April 30, 2007
(unaudited)
semiconductor holdings declined in the quarter. Silicon-On-Insulator Technologies (SOITEC), a French-based semiconductor company, was the largest detractor to performance. The company manufactures a layer of insulation that sits on top of a wafer and allows a hot processor to run cooler. Our view is that unit sales remain satisfactory and there are no competitive threats to the technology. While we slightly trimmed the position, we held onto the stock.
SanDisk, a leader in the flash memory market, was another detractor to performance. The company reported in its recent quarter that prices for flash memory had declined more than expected, which negatively impacted margins. While remaining constructive on the outlook for flash memory usage in devices like MP3 players and digital cameras, we sold the stock to reflect the uncertain price environment.
Looking Ahead
The Janus team of technology analysts will continue to focus on anticipating change. What consumer electronic products will be multiyear successes? What business-related technology products will provide more value at lower cost? Where is innovation happening? Which vendors are falling behind and who is gaining share? These are just some of the questions we try to answer before the rest of the investment community. Leveraging the strong grassroots research foundation of Janus, we will utilize Janus' global research platform to uncover what we believe are the best companies with the most upside potential for our shareholders.
Thank you for your investment in Janus Global Technology Fund.
Janus Global Technology Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Suntech Power Holdings Company, Ltd. (ADR) | 0.86 | % | |||||
Submarino S.A. | 0.82 | % | |||||
Sony Corp. | 0.80 | % | |||||
Cypress Semiconductor Corp. | 0.79 | % | |||||
Sunpower Corp. - Class A | 0.77 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Silicon-On-Insulator Technologies (SOITEC) | (0.34 | )% | |||||
SanDisk Corp. | (0.26 | )% | |||||
Marvell Technology Group, Ltd. | (0.22 | )% | |||||
SiRF Technology Holdings, Inc. | (0.20 | )% | |||||
IPG Photonics Corp. | (0.19 | )% |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | S&P 500® Index Weighting | |||||||||||||
Information Technology | 9.43 | % | 78.94 | % | 15.18 | % | |||||||||
Consumer Discretionary | 2.39 | % | 11.35 | % | 10.61 | % | |||||||||
Industrials | 1.45 | % | 3.88 | % | 10.88 | % | |||||||||
Health Care | 0.23 | % | 2.35 | % | 12.12 | % | |||||||||
Materials | 0.08 | % | 0.99 | % | 3.04 | % |
5 Largest Detractors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | S&P 500® Index Weighting | |||||||||||||
Telecommunication Services | (0.02 | )% | 2.43 | % | 3.52 | % | |||||||||
Utilities | 0.00 | % | 0.00 | % | 3.54 | % | |||||||||
Energy | 0.00 | % | 0.00 | % | 9.82 | % | |||||||||
Consumer Staples | 0.00 | % | 0.00 | % | 9.34 | % | |||||||||
Financials | 0.00 | % | 0.07 | % | 21.95 | % |
Janus Growth Funds April 30, 2007 67
Janus Global Technology Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2007 | |||||||
ARM Holdings PLC Electronic Components - Semiconductors | 3.0 | % | |||||
QUALCOMM, Inc. Wireless Equipment | 3.0 | % | |||||
Sony Corp. Audio and Video Products | 2.8 | % | |||||
Cypress Semiconductor Corp. Semiconductor Components/Integrated Circuits | 2.7 | % | |||||
Samsung Electronics Company, Ltd. Electronic Components - Semiconductors | 2.7 | % | |||||
14.2 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2007 |
Emerging markets comprised 11.3% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2007 | As of October 31, 2006 | ||||||
![]() | ![]() | ||||||
68 Janus Growth Funds April 30, 2007
(unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Five Year | Since Inception* | Total Annual Fund Operating Expenses | |||||||||||||||||||
Janus Global Technology Fund | 12.51 | % | 6.34 | % | 6.67 | % | 4.19 | % | 1.13 | % | |||||||||||||
S&P 500® Index | 8.60 | % | 15.24 | % | 8.54 | % | 3.90 | % | |||||||||||||||
Morgan Stanley Capital International World Information Technology Index | 7.85 | % | 9.20 | % | 6.23 | % | (1.03 | )% | |||||||||||||||
Lipper Quartile | – | 2 | nd | 3 | rd | 2 | nd | ||||||||||||||||
Lipper Ranking - based on total return for Science and Technology Funds | – | 94/287 | 125/241 | 20/75 |
Visit janus.com to view current performance
and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
A 2% redemption fee may be imposed on shares held for 3 months or less. Effective with purchases on and after May 15, 2007, a 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
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).
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.
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.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
Effective May 1, 2007, Burton H. Wilson became Portfolio Manager of Janus Global Technology Fund.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – December 31, 1998
Janus Growth Funds April 30, 2007 69
Janus Global Technology Fund (unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,125.10 | $ | 5.64 | |||||||||
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).
70 Janus Growth Funds April 30, 2007
Janus Global Technology Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Common Stock - 96.9% | |||||||||||
Advertising Sales - 0.8% | |||||||||||
118,325 | Lamar Advertising Co.* | $ | 7,139,731 | ||||||||
Aerospace and Defense - 0.8% | |||||||||||
745,786 | BAE Systems PLC** | 6,768,626 | |||||||||
Aerospace and Defense - Equipment - 1.4% | |||||||||||
137,505 | Alliant Techsystems, Inc.*,# | 12,805,841 | |||||||||
Applications Software - 4.7% | |||||||||||
200,685 | Infosys Technologies, Ltd. | 9,956,444 | |||||||||
572,193 | Patni Computer Systems, Ltd. | 6,509,533 | |||||||||
648,845 | Red Hat, Inc.*,**,# | 13,716,583 | |||||||||
110,710 | Salesforce.com, Inc.*,** | 4,649,820 | |||||||||
585,125 | Satyam Computer Services, Ltd. | 6,685,595 | |||||||||
41,517,975 | |||||||||||
Audio and Video Products - 2.8% | |||||||||||
470,900 | Sony Corp.** | 25,082,345 | |||||||||
Batteries and Battery Systems - 0.3% | |||||||||||
476,255 | BYD Company, Ltd.# | 2,925,876 | |||||||||
Chemicals - Diversified - 1.4% | |||||||||||
106,400 | Shin-Etsu Chemical Company, Ltd.** | 6,885,261 | |||||||||
28,571 | Wacker Chemie A.G.** | 5,209,479 | |||||||||
12,094,740 | |||||||||||
Commercial Services - Finance - 0.5% | |||||||||||
120,795 | Bankrate, Inc.*,# | 4,876,494 | |||||||||
Computer Services - 0.9% | |||||||||||
244,180 | Ceridian Corp.* | 8,243,517 | |||||||||
Computers - 5.3% | |||||||||||
189,340 | Apple, Inc.*,** | 18,896,132 | |||||||||
442,670 | Hewlett-Packard Co. | 18,654,114 | |||||||||
75,455 | Research In Motion, Ltd. (U.S. Shares)* | 9,928,369 | |||||||||
47,478,615 | |||||||||||
Computers - Memory Devices - 1.7% | |||||||||||
966,475 | EMC Corp.* | 14,671,091 | |||||||||
Computers - Peripheral Equipment - 1.3% | |||||||||||
428,127 | Logitech International S.A.* | 11,563,422 | |||||||||
Data Processing and Management - 1.6% | |||||||||||
124,140 | NAVTEQ Corp.*,# | 4,389,590 | |||||||||
268,710 | Paychex, Inc. | 9,969,141 | |||||||||
14,358,731 | |||||||||||
Electric Products - Miscellaneous - 1.4% | |||||||||||
680,000 | Sharp Corp.** | 12,446,482 | |||||||||
Electronic Components - Miscellaneous - 3.0% | |||||||||||
1,840,316 | Hon Hai Precision Industry Company, Ltd.** | 12,126,648 | |||||||||
360,637 | Koninklijke (Royal) Philips Electronics N.V.** | 14,748,371 | |||||||||
26,875,019 | |||||||||||
Electronic Components - Semiconductors - 15.1% | |||||||||||
9,963,190 | ARM Holdings PLC** | 26,519,534 | |||||||||
290,695 | International Rectifier Corp.*,# | 10,255,720 | |||||||||
250,035 | IPG Photonics Corp.* | 4,548,137 | |||||||||
270,405 | Microchip Technology, Inc.** | 10,908,138 | |||||||||
647,115 | Microsemi Corp.*,# | 14,954,828 | |||||||||
807,998 | MIPS Technologies, Inc.*,# | 6,932,623 | |||||||||
39,257 | Samsung Electronics Company, Ltd.** | 24,038,850 | |||||||||
433,469 | Silicon-On-Insulator Technologies (SOITEC)*,** | 10,140,951 | |||||||||
400,740 | SiRF Technology Holdings, Inc.*,** | 9,721,952 | |||||||||
458,250 | Texas Instruments, Inc.** | 15,750,053 | |||||||||
133,770,786 |
Shares or Principal Amount | Value | ||||||||||
Electronic Connectors - 0.4% | |||||||||||
94,135 | Amphenol Corp. - Class A | $ | 3,305,080 | ||||||||
Electronic Forms - 1.7% | |||||||||||
364,445 | Adobe Systems, Inc.* | 15,146,334 | |||||||||
Electronic Measuring Instruments - 1.0% | |||||||||||
320,383 | Trimble Navigation, Ltd.* | 9,188,584 | |||||||||
Energy - Alternate Sources - 4.3% | |||||||||||
104,610 | Comverge, Inc.* | 2,243,885 | |||||||||
73,855 | First Solar, Inc.*,** | 4,430,561 | |||||||||
364,895 | JA Solar Holdings Company, Ltd. (ADR)* | 8,899,789 | |||||||||
302,000 | Motech Industries, Inc.** | 3,687,653 | |||||||||
166,040 | SunPower Corp. - Class A*,# | 10,075,307 | |||||||||
240,835 | Suntech Power Holdings Company, Ltd. (ADR)*,** | 8,737,494 | |||||||||
38,074,689 | |||||||||||
Enterprise Software/Services - 3.9% | |||||||||||
546,445 | BEA Systems, Inc.* | 6,442,587 | |||||||||
801,805 | Oracle Corp.* | 15,073,934 | |||||||||
278,213 | SAP A.G.** | 13,390,042 | |||||||||
34,906,563 | |||||||||||
Entertainment Software - 1.2% | |||||||||||
213,495 | Electronic Arts, Inc.* | 10,762,283 | |||||||||
E-Services/Consulting - 0.8% | |||||||||||
464,120 | RightNow Technologies, Inc.*,# | 6,896,823 | |||||||||
Internet Connectivity Services - 1.5% | |||||||||||
264,396 | NDS Group PLC (ADR)*,** | 13,634,902 | |||||||||
Internet Infrastructure Software - 1.1% | |||||||||||
220,445 | Akamai Technologies, Inc.*,# | 9,717,216 | |||||||||
Internet Security - 0.9% | |||||||||||
441,420 | Symantec Corp.*,# | 7,768,992 | |||||||||
Machinery - General Industrial - 0.4% | |||||||||||
8,778,000 | Shanghai Electric Group Company, Ltd.# | 3,743,073 | |||||||||
Medical - Drugs - 1.5% | |||||||||||
599,909 | Cubist Pharmaceuticals, Inc.* | 12,868,048 | |||||||||
Multimedia - 0.7% | |||||||||||
292,175 | News Corporation, Inc. - Class A | 6,541,798 | |||||||||
Networking Products - 2.7% | |||||||||||
345,240 | Cisco Systems, Inc.* | 9,231,718 | |||||||||
673,499 | Juniper Networks, Inc.* | 15,059,437 | |||||||||
24,291,155 | |||||||||||
Retail - Computer Equipment - 0.9% | |||||||||||
237,495 | GameStop Corp. - Class A*,** | 7,877,709 | |||||||||
Retail - Consumer Electronics - 1.9% | |||||||||||
166,150 | Best Buy Company, Inc.# | 7,750,898 | |||||||||
95,260 | Yamada Denki Company, Ltd.** | 8,777,462 | |||||||||
16,528,360 | |||||||||||
Semiconductor Components/Integrated Circuits - 7.3% | |||||||||||
914,120 | Actions Semiconductor Company, Ltd. (ADR)* | 6,599,946 | |||||||||
1,057,420 | Cypress Semiconductor Corp.* | 24,130,324 | |||||||||
725,725 | Marvell Technology Group, Ltd.* | 11,705,944 | |||||||||
3,340,000 | Siliconware Precision Industries Co.** | 6,345,038 | |||||||||
7,736,139 | Taiwan Semiconductor Manufacturing Company, Ltd.** | 15,791,898 | |||||||||
64,573,150 | |||||||||||
Semiconductor Equipment - 2.1% | |||||||||||
362,686 | ASM Lithography Holding N.V. (U.S. Shares)*,**,# | 9,883,194 | |||||||||
153,715 | KLA-Tencor Corp.# | 8,538,868 | |||||||||
18,422,062 |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2007 71
Janus Global Technology Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Telecommunication Equipment - 0.7% | |||||||||||
126,435 | CommScope, Inc.* | $ | 5,898,193 | ||||||||
Telecommunication Equipment - Fiber Optics - 2.1% | |||||||||||
776,880 | Corning, Inc.*,** | 18,427,594 | |||||||||
Telecommunication Services - 4.4% | |||||||||||
517,375 | Amdocs, Ltd. (U.S. Shares)*,** | 19,013,531 | |||||||||
425,090 | NeuStar, Inc. - Class A* | 12,225,588 | |||||||||
146,375 | SAVVIS, Inc.*,# | 7,548,559 | |||||||||
38,787,678 | |||||||||||
Television - 1.0% | |||||||||||
769,905 | British Sky Broadcasting Group PLC** | 8,816,975 | |||||||||
Web Hosting/Design - 1.5% | |||||||||||
99,485 | Equinix, Inc.*,**,# | 8,304,012 | |||||||||
622,965 | Terremark Worldwide, Inc.*,# | 5,170,610 | |||||||||
13,474,622 | |||||||||||
Web Portals/Internet Service Providers - 3.0% | |||||||||||
20,745 | Google, Inc. - Class A* | 9,778,778 | |||||||||
587,223 | Yahoo!, Inc.*,** | 16,465,733 | |||||||||
26,244,511 | |||||||||||
Wireless Equipment - 6.9% | |||||||||||
274,715 | Crown Castle International Corp.* | 9,433,713 | |||||||||
390,745 | Nokia Oyj (ADR)** | 9,866,311 | |||||||||
601,725 | QUALCOMM, Inc. | 26,355,555 | |||||||||
413,965 | Telefonaktiebolaget LM Ericsson (ADR) | 15,801,044 | |||||||||
61,456,623 | |||||||||||
Total Common Stock (cost $634,526,501) | 859,972,308 | ||||||||||
Equity-Linked Structured Notes - 1.0% | |||||||||||
Finance - Investment Bankers/Brokers - 1.0% | |||||||||||
Goldman Sachs Group, Inc.: | |||||||||||
9,803 | convertible, (Google, Inc. - Class A) 0% (144A)§ | 4,720,154 | |||||||||
8,984 | convertible, (Google, Inc. - Class A) 0% (144A)§ | 4,317,639 | |||||||||
Total Equity-Linked Structured Notes (cost $9,052,800) | 9,037,793 | ||||||||||
Money Markets - 3.0% | |||||||||||
11,000 | Janus Institutional Cash Management Fund - Institutional Shares, 5.32% | 11,000 | |||||||||
26,626,000 | Janus Institutional Money Market Fund - Institutional Shares, 5.26% | 26,626,000 | |||||||||
Total Money Markets (cost $26,637,000) | 26,637,000 | ||||||||||
Other Securities - 8.9% | |||||||||||
78,016,409 | State Street Navigator Securities Lending Prime Portfolio† | 78,016,409 | |||||||||
511,665 | U.S. Treasury Notes/Bonds† | 511,665 | |||||||||
Total Other Securities (cost $78,528,074) | 78,528,074 | ||||||||||
Total Investments (total cost $748,744,375) - 109.8% | 974,175,175 | ||||||||||
Securities Sold Short - (1.3)% | |||||||||||
Computers - (0.5)% | |||||||||||
257,110 | Palm, Inc.* | (4,340,017 | ) | ||||||||
Investment Companies - (0.8)% | |||||||||||
152,635 | PowerShares QQQ | (7,015,105 | ) | ||||||||
Total Securities Sold Short (proceeds $10,728,045) | (11,355,122 | ) | |||||||||
Liabilities, net of Cash, Receivables and Other Assets – (8.5)% | (75,214,487 | ) | |||||||||
Net Assets – 100% | $ | 887,605,566 |
Summary of Investments by Country – (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Bermuda | $ | 11,705,944 | 1.2 | % | |||||||
Canada | 9,928,369 | 1.0 | % | ||||||||
Cayman Islands | 15,337,440 | 1.6 | % | ||||||||
China | 15,568,738 | 1.6 | % | ||||||||
Finland | 9,866,311 | 1.0 | % | ||||||||
France | 10,140,951 | 1.0 | % | ||||||||
Germany | 18,599,521 | 1.9 | % | ||||||||
India | 23,151,572 | 2.4 | % | ||||||||
Japan | 53,191,550 | 5.5 | % | ||||||||
Netherlands | 24,631,565 | 2.5 | % | ||||||||
South Korea | 24,038,850 | 2.5 | % | ||||||||
Sweden | 15,801,044 | 1.6 | % | ||||||||
Switzerland | 11,563,422 | 1.2 | % | ||||||||
Taiwan | 37,951,237 | 3.9 | % | ||||||||
United Kingdom | 74,753,568 | 7.7 | % | ||||||||
United States†† | 617,945,093 | 63.4 | % | ||||||||
Total | $ | 974,175,175 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (52.6% excluding Short-Term Securities and Other Securities).
Summary of Investments by Country – (Short Positions)
Country | Value | % of Securities Sold Short | |||||||||
United States | $ | (11,355,122 | ) | 100.0 | % | ||||||
Total | $ | (11,355,122 | ) | 100.0 | % |
Forward Currency Contracts, Open
Currency Sold and Settlement Date | Currency Units Sold | Currency Value in U.S. $ | Unrealized Gain/(Loss) | ||||||||||||
British Pound 10/17/07 | 5,555,000 | $ | 11,086,351 | $ | (365,201 | ) | |||||||||
Euro 6/8/07 | 10,200,000 | 13,940,047 | (597,631 | ) | |||||||||||
Japanese Yen 6/8/07 | 788,000,000 | 6,631,249 | 87,141 | ||||||||||||
South Korean Won 10/17/07 | 7,800,000,000 | 8,422,720 | (157,819 | ) | |||||||||||
Taiwan Dollar 10/17/07 | 213,000,000 | 6,455,871 | 93,944 | ||||||||||||
Total | $ | 46,536,238 | $ | (939,566 | ) |
See Notes to Schedules of Investments and Financial Statements.
72 Janus Growth Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Value | |||||||
Schedule of Written Options - Calls | |||||||
Apple, Inc. expires October 2007 472 contracts exercise price $110.00 | $ | (261,960 | ) | ||||
Equinix, Inc. expires June 2007 550 contracts exercise price $85.00 | (335,500 | ) | |||||
First Solar, Inc. expires September 2007 405 contracts exercise price $55.00 | (473,850 | ) | |||||
GameStop Corp. - Class A expires July 2007 1,660 contracts exercise price $27.50 | (1,162,000 | ) | |||||
Microchip Technology, Inc. expires October 2007 1,194 contracts exercise price $40.00 | (382,080 | ) | |||||
Red Hat, Inc. expires June 2007 1,006 contracts exercise price $25.00 | (15,090 | ) | |||||
Salesforce.com, Inc. expires August 2007 489 contracts exercise price $45.00 | (136,920 | ) | |||||
SiRF Technology Holdings, Inc. expires September 2007 749 contracts exercise price $32.50 | (56,175 | ) | |||||
Suntech Power Holdings Company, Ltd. (ADR) expires June 2007 1,226 contracts exercise price $40.00 | (110,340 | ) | |||||
Yahoo!, Inc. expires July 2007 1,587 contracts exercise price $30.00 | (158,700 | ) | |||||
Total Written Options - Calls | |||||||
9,338 contracts (Premiums received $2,920,726) | $(3,092,615) |
See Notes to Schedules of Investments and Financial Statements.
Janus Growth Funds April 30, 2007 73
Statements of Assets and Liabilities
As of April 30, 2007 (unaudited) (all numbers in thousands except net asset value per share) | Janus Fund | Janus Enterprise Fund | Janus Orion Fund | Janus Research Fund(1) | Janus Triton Fund | ||||||||||||||||||
Assets: | |||||||||||||||||||||||
Investments at cost(2) | $ | 9,636,065 | $ | 1,539,885 | $ | 3,162,061 | $ | 4,096,818 | $ | 104,540 | |||||||||||||
Investments at value(2) | $ | 12,634,439 | $ | 2,233,770 | $ | 4,079,957 | $ | 4,840,332 | $ | 115,781 | |||||||||||||
Cash | 529 | – | 764 | 508 | – | ||||||||||||||||||
Cash denominated in foreign currency(3) | 8,842 | 23 | 1,724 | – | 2 | ||||||||||||||||||
Restricted cash (Note 1) | 7,494 | – | – | – | – | ||||||||||||||||||
Deposits with broker for short sales | – | – | – | – | – | ||||||||||||||||||
Receivables: | |||||||||||||||||||||||
Investments sold | 53,106 | 2,951 | 12,794 | 66,028 | 887 | ||||||||||||||||||
Fund shares sold | 3,828 | 1,400 | 3,106 | 6,111 | 114 | ||||||||||||||||||
Dividends | 10,436 | 265 | 3,093 | 2,868 | 12 | ||||||||||||||||||
Interest | 555 | 199 | 398 | 410 | 11 | ||||||||||||||||||
Other assets | 165 | 18 | 58 | 37 | 1 | ||||||||||||||||||
Forward currency contracts | – | – | – | – | – | ||||||||||||||||||
Total Assets | 12,719,394 | 2,238,626 | 4,101,894 | 4,916,294 | 116,808 | ||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Payables: | |||||||||||||||||||||||
Short sales, at value(4) | – | – | – | – | – | ||||||||||||||||||
Options written, at value(5) | 124 | – | – | – | 55 | ||||||||||||||||||
Collateral for securities loaned (Note 1) | 780,428 | 325,275 | 471,164 | 507,474 | – | ||||||||||||||||||
Due to custodian | – | 28 | – | – | 17 | ||||||||||||||||||
Investments purchased | 47,057 | – | – | 128,046 | 995 | ||||||||||||||||||
Fund shares repurchased | 13,495 | 3,133 | 3,500 | 2,837 | 488 | ||||||||||||||||||
Advisory fees | 6,161 | 994 | 1,879 | 2,630 | 61 | ||||||||||||||||||
Transfer agent fees and expenses | 2,511 | 553 | 484 | 1,161 | 40 | ||||||||||||||||||
Non-interested Trustees' fees and expenses | 76 | 13 | 8 | 23 | 3 | ||||||||||||||||||
Short sale dividends | – | – | – | – | – | ||||||||||||||||||
Foreign tax liability | – | – | 400 | 539 | 1 | ||||||||||||||||||
Accrued expenses | 696 | 224 | 30 | 468 | 30 | ||||||||||||||||||
Forward currency contracts | 5,425 | – | 302 | 3,355 | – | ||||||||||||||||||
Total Liabilities | 855,973 | 330,220 | 477,767 | 646,533 | 1,690 | ||||||||||||||||||
Net Assets | $ | 11,863,421 | $ | 1,908,406 | $ | 3,624,127 | $ | 4,269,761 | $ | 115,118 | |||||||||||||
Net Assets Consist of: | |||||||||||||||||||||||
Capital (par value and paid-in-surplus)* | $ | 14,086,135 | $ | 5,241,912 | $ | 4,456,478 | $ | 8,360,925 | $ | 98,152 | |||||||||||||
Undistributed net investment income/(loss)* | 39,301 | (176 | ) | 7,556 | 4,394 | (460 | ) | ||||||||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | (5,255,029 | ) | (4,027,215 | ) | (1,757,108 | ) | (4,835,177 | ) | 6,162 | ||||||||||||||
Unrealized appreciation/(depreciation) of investments and foreign currency translations | 2,993,014 | 693,885 | 917,201 | (6) | 739,619 | (6) | 11,264 | (6) | |||||||||||||||
Total Net Assets | $ | 11,863,421 | $ | 1,908,406 | $ | 3,624,127 | $ | 4,269,761 | $ | 115,118 | |||||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 391,020 | 36,800 | 337,811 | 152,335 | 8,091 | ||||||||||||||||||
Net Asset Value Per Share | $ | 30.34 | $ | 51.86 | $ | 10.73 | $ | 28.03 | $ | 14.23 |
* See Note 4 in Notes to Financial Statements.
(1) Formerly named Janus Mercury Fund.
(2) Investments at cost and value include $757,517,251, $317,854,138, $454,110,356, $489,819,936, $52,303,796, $380,969,239, $149,682,810 and $76,285,235 of securities loaned for Janus Fund, Janus Enterprise Fund, Janus Orion Fund, Janus Research Fund, Janus Twenty Fund, Janus Venture Fund, Janus Global Life Sciences Fund and Janus Global Technology Fund, respectively (Note 1).
(3) Includes cost of $8,838,280, $22,626, $1,723,907, $2,003 and $17,867 for Janus Fund, Janus Enterprise Fund, Janus Orion Fund, Janus Triton Fund and Janus Venture Fund, respectively.
(4) Includes proceeds of $10,728,045 on short sales for Janus Global Technology Fund.
(5) Includes premiums of $259,565, $77,970 and $2,920,726 on written options for Janus Fund, Janus Triton Fund and Janus Global Technology Fund, respectively.
(6) Net of foreign taxes on investments of $400,495, $539,199, $995 and $144,530 for Janus Orion Fund, Janus Research Fund, Janus Triton Fund and Janus Venture Fund, respectively.
See Notes to Financial Statements.
74 Janus Growth Funds April 30, 2007
As of April 30, 2007 (unaudited) (all numbers in thousands except net asset value per share) | Janus Twenty Fund | Janus Venture Fund | Janus Global Life Sciences Fund | Janus Global Technology Fund | |||||||||||||||
Assets: | |||||||||||||||||||
Investments at cost(2) | $ | 6,849,830 | $ | 1,478,767 | $ | 779,362 | $ | 748,744 | |||||||||||
Investments at value(2) | $ | 10,180,389 | $ | 1,935,883 | $ | 1,026,526 | $ | 974,175 | |||||||||||
Cash | 455 | – | – | – | |||||||||||||||
Cash denominated in foreign currency(3) | – | 18 | – | – | |||||||||||||||
Restricted cash (Note 1) | – | – | – | – | |||||||||||||||
Deposits with broker for short sales | – | – | – | 10,728 | |||||||||||||||
Receivables: | |||||||||||||||||||
Investments sold | 39,139 | 15,454 | 12,548 | – | |||||||||||||||
Fund shares sold | 4,265 | 175 | 172 | 239 | |||||||||||||||
Dividends | 11,116 | 92 | 251 | 609 | |||||||||||||||
Interest | 580 | 149 | 29 | 118 | |||||||||||||||
Other assets | 122 | 29 | 16 | 17 | |||||||||||||||
Forward currency contracts | – | – | – | 181 | |||||||||||||||
Total Assets | 10,236,066 | 1,951,800 | 1,039,542 | 986,067 | |||||||||||||||
Liabilities: | |||||||||||||||||||
Payables: | |||||||||||||||||||
Short sales, at value(4) | – | – | – | 11,355 | |||||||||||||||
Options written, at value(5) | – | – | – | 3,093 | |||||||||||||||
Collateral for securities loaned (Note 1) | 53,443 | 390,470 | 154,720 | 78,528 | |||||||||||||||
Due to custodian | – | 9,605 | 936 | 67 | |||||||||||||||
Investments purchased | – | 3,090 | – | 1,863 | |||||||||||||||
Fund shares repurchased | 8,867 | 807 | 2,150 | 1,278 | |||||||||||||||
Advisory fees | 5,311 | 809 | 460 | 471 | |||||||||||||||
Transfer agent fees and expenses | 1,827 | 274 | 325 | 411 | |||||||||||||||
Non-interested Trustees' fees and expenses | 68 | 11 | 7 | 8 | |||||||||||||||
Short sale dividends | 2,358 | – | – | 3 | |||||||||||||||
Foreign tax liability | – | 145 | – | – | |||||||||||||||
Accrued expenses | 485 | 128 | 139 | 263 | |||||||||||||||
Forward currency contracts | – | – | 734 | 1,121 | |||||||||||||||
Total Liabilities | 72,359 | 405,339 | 159,471 | 98,461 | |||||||||||||||
Net Assets | $ | 10,163,707 | $ | 1,546,461 | $ | 880,071 | $ | 887,606 | |||||||||||
Net Assets Consist of: | |||||||||||||||||||
Capital (par value and paid-in-surplus)* | $ | 8,389,549 | $ | 997,077 | $ | 1,399,266 | $ | 3,155,104 | |||||||||||
Undistributed net investment income/(loss)* | 8,247 | (4,594 | ) | (1,423 | ) | (394 | ) | ||||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | (1,564,644 | ) | 97,012 | (764,205 | ) | (2,490,819 | ) | ||||||||||||
Unrealized appreciation/(depreciation) of investments and foreign currency translations | 3,330,555 | 456,966 | (6) | 246,433 | 223,715 | ||||||||||||||
Total Net Assets | $ | 10,163,707 | $ | 1,546,461 | $ | 880,071 | $ | 887,606 | |||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 173,947 | 23,003 | 40,125 | 64,527 | |||||||||||||||
Net Asset Value Per Share | $ | 58.43 | $ | 67.23 | $ | 21.93 | $ | 13.76 |
See Notes to Financial Statements.
Janus Growth Funds April 30, 2007 75
Statements of Operations
For the six-month period ended April 30, 2007 (unaudited) (all numbers in thousands) | Janus Fund | Janus Enterprise Fund | Janus Orion Fund | Janus Research Fund(1) | Janus Triton Fund | ||||||||||||||||||
Investment Income: | |||||||||||||||||||||||
Interest | $ | 886 | $ | 6 | $ | 1 | $ | 25 | $ | – | |||||||||||||
Securities lending income | 400 | 547 | 279 | 792 | – | ||||||||||||||||||
Dividends | 85,510 | 8,918 | 20,921 | 22,314 | 241 | ||||||||||||||||||
Dividends from affiliates | 4,390 | 501 | 6,271 | 1,162 | 84 | ||||||||||||||||||
Foreign tax withheld | (2,086 | ) | (65 | ) | (1,149 | ) | (930 | ) | (2 | ) | |||||||||||||
Total Investment Income | 89,100 | 9,907 | 26,323 | 23,363 | 323 | ||||||||||||||||||
Expenses: | |||||||||||||||||||||||
Advisory fees | 36,261 | 5,776 | 10,775 | 13,252 | 374 | ||||||||||||||||||
Transfer agent fees and expenses | 11,979 | 2,264 | 3,826 | 4,792 | 160 | ||||||||||||||||||
Registration fees | 91 | 23 | 20 | 28 | 28 | ||||||||||||||||||
Postage and mailing expenses | 534 | 180 | 162 | 359 | 12 | ||||||||||||||||||
Custodian fees | 132 | 20 | 99 | 88 | 11 | ||||||||||||||||||
Professional fees | 24 | 15 | 10 | 16 | 14 | ||||||||||||||||||
Non-interested Trustees' fees and expenses | 210 | 34 | 47 | 66 | 5 | ||||||||||||||||||
Printing expenses | 675 | 239 | 195 | 465 | 31 | ||||||||||||||||||
Short sales dividend expense | – | – | – | – | – | ||||||||||||||||||
Other expenses | 192 | 43 | 57 | 77 | 19 | ||||||||||||||||||
Non-recurring costs (Note 2) | 2 | – | 1 | 1 | – | ||||||||||||||||||
Cost assumed by Janus Capital Management LLC (Note 2) | (2 | ) | – | (1 | ) | (1 | ) | – | |||||||||||||||
Total Expenses | 50,098 | 8,594 | 15,191 | 19,143 | 654 | ||||||||||||||||||
Expense and Fee Offset | (299 | ) | (72 | ) | (195 | ) | (174 | ) | (9 | ) | |||||||||||||
Net Expenses | 49,799 | 8,522 | 14,996 | 18,969 | 645 | ||||||||||||||||||
Net Investment Income/(Loss) | 39,301 | 1,385 | 11,327 | 4,394 | (322 | ) | |||||||||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | |||||||||||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 141,729 | 100,559 | 86,173 | 176,430 | 6,992 | ||||||||||||||||||
Net realized gain/(loss) from short sales | – | – | – | – | – | ||||||||||||||||||
Net realized gain/(loss) from option contracts | 5,573 | – | – | 5,034 | – | ||||||||||||||||||
Change in net unrealized appreciation/(depreciation) of investments and foreign currency translations | 1,008,007 | 129,488 | 329,339 | (2) | 404,887 | (2) | 4,275 | (2) | |||||||||||||||
Payment from affiliate (Note 2) | 6 | 8 | 3 | 15 | 4 | ||||||||||||||||||
Net Gain/(Loss) on Investments | 1,155,315 | 230,055 | 415,515 | 586,366 | 11,271 | ||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 1,194,616 | $ | 231,440 | $ | 426,842 | $ | 590,760 | $ | 10,949 |
(1) Formerly named Janus Mercury Fund.
(2) Net of foreign taxes on investments of $400,495, $539,199, $995 and $144,530 for Janus Orion Fund, Janus Research Fund, Janus Triton Fund and Janus Venture Fund, respectively.
See Notes to Financial Statements.
76 Janus Growth Funds April 30, 2007
For the six-month period ended April 30, 2007 (unaudited) (all numbers in thousands) | Janus Twenty Fund | Janus Venture Fund | Janus Global Life Sciences Fund | Janus Global Technology Fund | |||||||||||||||
Investment Income: | |||||||||||||||||||
Interest | $ | 16 | $ | – | $ | – | $ | 19 | |||||||||||
Securities lending income | 121 | 797 | 303 | 249 | |||||||||||||||
Dividends | 47,094 | 2,409 | 2,793 | 4,150 | |||||||||||||||
Dividends from affiliates | 7,051 | 42 | 64 | 303 | |||||||||||||||
Foreign tax withheld | (1,774 | ) | (150 | ) | (139 | ) | (385 | ) | |||||||||||
Total Investment Income | 52,508 | 3,098 | 3,021 | 4,336 | |||||||||||||||
Expenses: | |||||||||||||||||||
Advisory fees | 31,118 | 4,725 | 2,830 | 2,879 | |||||||||||||||
Transfer agent fees and expenses | 9,499 | 1,388 | 1,212 | 1,392 | |||||||||||||||
Registration fees | 32 | 16 | 18 | 16 | |||||||||||||||
Postage and mailing expenses | 426 | 79 | 119 | 165 | |||||||||||||||
Custodian fees | 134 | 95 | 100 | 60 | |||||||||||||||
Professional fees | 20 | 14 | 16 | 19 | |||||||||||||||
Non-interested Trustees' fees and expenses | 181 | 28 | 15 | 18 | |||||||||||||||
Printing expenses | 525 | 111 | 162 | 236 | |||||||||||||||
Short sales dividend expense | 2,358 | – | – | 3 | |||||||||||||||
Other expenses | 167 | 37 | 32 | 29 | |||||||||||||||
Non-recurring costs (Note 2) | 2 | – | – | – | |||||||||||||||
Cost assumed by Janus Capital Management LLC (Note 2) | (2 | ) | – | – | – | ||||||||||||||
Total Expenses | 44,460 | 6,493 | 4,504 | 4,817 | |||||||||||||||
Expense and Fee Offset | (199 | ) | (34 | ) | (60 | ) | (74 | ) | |||||||||||
Net Expenses | 44,261 | 6,459 | 4,444 | 4,743 | |||||||||||||||
Net Investment Income/(Loss) | 8,247 | (3,361 | ) | (1,423 | ) | (407 | ) | ||||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | |||||||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 310,421 | 147,362 | 210 | 61,298 | |||||||||||||||
Net realized gain/(loss) from short sales | 3,530 | – | (1,123 | ) | 91 | ||||||||||||||
Net realized gain/(loss) from option contracts | – | – | – | 648 | |||||||||||||||
Change in net unrealized appreciation/(depreciation) of investments and foreign currency translations | 708,119 | 55,418 | (2) | 69,890 | 45,496 | ||||||||||||||
Payment from affiliate (Note 2) | 41 | 9 | 3 | 5 | |||||||||||||||
Net Gain/(Loss) on Investments | 1,022,111 | 202,789 | 68,980 | 107,538 | |||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 1,030,358 | $ | 199,428 | $ | 67,557 | $ | 107,131 |
See Notes to Financial Statements.
Janus Growth Funds April 30, 2007 77
Statements of Changes in Net Assets
For the six-month period ended April 30, 2007 (unaudited) | |||||||||||||||||||||||||||
and for the fiscal year ended October 31, 2006 (all numbers in thousands) | Janus Fund | Janus Enterprise Fund | Janus Orion Fund | ||||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2007 | 2006 | ||||||||||||||||||||||
Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | $ | 39,301 | $ | 38,586 | $ | 1,385 | $ | (4,351 | ) | $ | 11,327 | $ | 7,762 | ||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 141,729 | 1,319,127 | 100,559 | 237,157 | 86,173 | 125,852 | |||||||||||||||||||||
Net realized gain/(loss) from option contracts | 5,573 | – | – | – | – | – | |||||||||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments and foreign currency translations | 1,008,007 | (49,416 | ) | 129,488 | 20,858 | 329,339 | 44,104 | ||||||||||||||||||||
Payment from affiliate (Note 2) | 6 | 47 | 8 | – | 3 | – | |||||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 1,194,616 | 1,308,344 | 231,440 | 253,664 | 426,842 | 177,718 | |||||||||||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||||||||||
Net investment income* | (38,592 | ) | (7,997 | ) | – | – | (7,756 | ) | (6,052 | ) | |||||||||||||||||
Net realized gain/(loss) from investment transactions* | – | – | – | – | – | – | |||||||||||||||||||||
Net Decrease from Dividends and Distributions | (38,592 | ) | (7,997 | ) | – | – | (7,756 | ) | (6,052 | ) | |||||||||||||||||
Capital Share Transactions: | |||||||||||||||||||||||||||
Shares sold | 578,446 | 1,366,201 | 156,876 | 219,251 | 308,113 | 546,892 | |||||||||||||||||||||
Shares issued in connection with acquisition** | N/A | N/A | N/A | N/A | N/A | 2,124,929 | |||||||||||||||||||||
Reinvested dividends and distributions | 37,606 | 7,771 | – | – | 7,599 | 5,942 | |||||||||||||||||||||
Shares repurchased | (1,117,284 | ) | (2,608,611 | ) | (223,526 | ) | (432,841 | ) | (353,773 | ) | (297,728 | ) | |||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | (501,232 | ) | (1,234,639 | ) | (66,650 | ) | (213,590 | ) | (38,061 | ) | 2,380,035 | ||||||||||||||||
Net Increase/(Decrease) in Net Assets | 654,792 | 65,708 | 164,790 | 40,074 | 381,025 | 2,551,701 | |||||||||||||||||||||
Net Assets: | |||||||||||||||||||||||||||
Beginning of period | 11,208,629 | 11,142,921 | 1,743,616 | 1,703,542 | 3,243,102 | 691,401 | |||||||||||||||||||||
End of period | $ | 11,863,421 | $ | 11,208,629 | $ | 1,908,406 | $ | 1,743,616 | $ | 3,624,127 | $ | 3,243,102 | |||||||||||||||
Undistributed net investment income/(loss)* | $ | 39,301 | $ | 38,592 | $ | (176 | ) | $ | (1,561 | ) | $ | 7,556 | $ | 3,985 |
* See Note 4 in Notes to Financial Statements.
** See Note 6 in Notes to Financial Statements.
(1) Formerly named Janus Mercury Fund.
See Notes to Financial Statements.
78 Janus Growth Funds April 30, 2007
For the six-month period ended April 30, 2007 (unaudited) | |||||||||||||||||||
and for the fiscal year ended October 31, 2006 (all numbers in thousands) | Janus Research Fund(1) | Janus Triton Fund | |||||||||||||||||
2007 | 2006 | 2007 | 2006 | ||||||||||||||||
Operations: | |||||||||||||||||||
Net investment income/(loss) | $ | 4,394 | $ | 4,370 | $ | (322 | ) | $ | 129 | ||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 176,430 | 1,157,345 | 6,992 | 771 | |||||||||||||||
Net realized gain/(loss) from option contracts | 5,034 | 980 | – | – | |||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments and foreign currency translations | 404,887 | (758,886 | ) | 4,275 | 4,828 | ||||||||||||||
Payment from affiliate (Note 2) | 15 | – | 4 | – | |||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 590,760 | 403,809 | 10,949 | 5,728 | |||||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||
Net investment income* | (2,946 | ) | (12,423 | ) | – | (125 | ) | ||||||||||||
Net realized gain/(loss) from investment transactions* | – | – | (1,572 | ) | (89 | ) | |||||||||||||
Net Decrease from Dividends and Distributions | (2,946 | ) | (12,423 | ) | (1,572 | ) | (214 | ) | |||||||||||
Capital Share Transactions: | |||||||||||||||||||
Shares sold | 217,272 | 410,525 | 28,737 | 161,859 | |||||||||||||||
Shares issued in connection with acquisition** | N/A | N/A | N/A | N/A | |||||||||||||||
Reinvested dividends and distributions | 2,818 | 11,886 | 1,545 | 209 | |||||||||||||||
Shares repurchased | (415,140 | ) | (1,410,231 | ) | (36,534 | ) | (93,284 | ) | |||||||||||
Net Increase/(Decrease) from Capital Share Transactions | (195,050 | ) | (987,820 | ) | (6,252 | ) | 68,784 | ||||||||||||
Net Increase/(Decrease) in Net Assets | 392,764 | (596,434 | ) | 3,125 | 74,298 | ||||||||||||||
Net Assets: | |||||||||||||||||||
Beginning of period | 3,876,997 | 4,473,431 | 111,993 | 37,695 | |||||||||||||||
End of period | $ | 4,269,761 | $ | 3,876,997 | $ | 115,118 | $ | 111,993 | |||||||||||
Undistributed net investment income/(loss)* | $ | 4,394 | $ | 2,946 | $ | (460 | ) | $ | (138 | ) |
See Notes to Financial Statements.
Janus Growth Funds April 30, 2007 79
Statements of Changes in Net Assets (continued)
For the six-month period ended April 30, 2007 (unaudited) and for the fiscal year ended October 31, 2006 (all numbers in thousands) | Janus Twenty Fund | Janus Venture Fund | |||||||||||||||||
2007 | 2006 | 2007 | 2006 | ||||||||||||||||
Operations: | |||||||||||||||||||
Net investment income/(loss) | $ | 8,247 | $ | 56,704 | $ | (3,361 | ) | $ | (7,403 | ) | |||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 310,421 | 1,410,117 | 147,362 | 171,533 | |||||||||||||||
Net realized gain/(loss) from short sales | 3,530 | 3,322 | – | – | |||||||||||||||
Net realized gain/(loss) from option contracts | – | – | – | – | |||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments and foreign currency translations | 708,119 | (446,870 | ) | 55,418 | 100,725 | ||||||||||||||
Payment from affiliate (Note 2) | 41 | 17 | 9 | – | |||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 1,030,358 | 1,023,290 | 199,428 | 264,855 | |||||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||
Net investment income* | (57,335 | ) | (20,137 | ) | – | – | |||||||||||||
Net realized gain/(loss) from investment transactions* | – | – | (158,239 | ) | (65,400 | ) | |||||||||||||
Net Decrease from Dividends and Distributions | (57,335 | ) | (20,137 | ) | (158,239 | ) | (65,400 | ) | |||||||||||
Capital Share Transactions: | |||||||||||||||||||
Shares sold | 228,379 | 433,075 | 29,678 | 31,199 | |||||||||||||||
Redemption fees | N/A | N/A | N/A | N/A | |||||||||||||||
Reinvested dividends and distributions | 56,152 | 19,712 | 152,892 | 62,815 | |||||||||||||||
Shares repurchased | (676,310 | ) | (1,485,980 | ) | (75,753 | ) | (188,164 | ) | |||||||||||
Net Increase/(Decrease) from Capital Share Transactions | (391,779 | ) | (1,033,193 | ) | 106,817 | (94,150 | ) | ||||||||||||
Net Increase/(Decrease) in Net Assets | 581,244 | (30,040 | ) | 148,006 | 105,305 | ||||||||||||||
Net Assets: | |||||||||||||||||||
Beginning of period | 9,582,463 | 9,612,503 | 1,398,455 | 1,293,150 | |||||||||||||||
End of Period | $ | 10,163,707 | $ | 9,582,463 | $ | 1,546,461 | $ | 1,398,455 | |||||||||||
Undistributed net investment income/(loss)* | $ | 8,247 | $ | 57,335 | $ | (4,594 | ) | $ | (1,233 | ) |
* See Note 4 in Notes to Financial Statements.
See Notes to Financial Statements.
80 Janus Growth Funds April 30, 2007
For the six-month period ended April 30, 2007 (unaudited) and for the fiscal year ended October 31, 2006 (all numbers in thousands) | Janus Global Life Sciences Fund | Janus Global Technology Fund | |||||||||||||||||
2007 | 2006 | 2007 | 2006 | ||||||||||||||||
Operations: | |||||||||||||||||||
Net investment income/(loss) | $ | (1,423 | ) | $ | (4,337 | ) | $ | (407 | ) | $ | (3,026 | ) | |||||||
Net realized gain/(loss) from investment and foreign currency transactions | 210 | 164,350 | 61,298 | 227,550 | |||||||||||||||
Net realized gain/(loss) from short sales | (1,123 | ) | (755 | ) | 91 | – | |||||||||||||
Net realized gain/(loss) from option contracts | – | (1,098 | ) | 648 | – | ||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments and foreign currency translations | 69,890 | (107,495 | ) | 45,496 | (105,152 | ) | |||||||||||||
Payment from affiliate (Note 2) | 3 | – | 5 | 4 | |||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 67,557 | 50,665 | 107,131 | 119,376 | |||||||||||||||
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 | 16,694 | 57,712 | 20,369 | 57,580 | |||||||||||||||
Redemption fees | 33 | 69 | 29 | 75 | |||||||||||||||
Reinvested dividends and distributions | – | – | – | 703 | |||||||||||||||
Shares repurchased | (186,243 | ) | (276,082 | ) | (154,272 | ) | (256,329 | ) | |||||||||||
Net Increase/(Decrease) from Capital Share Transactions | (169,516 | ) | (218,301 | ) | (133,874 | ) | (197,971 | ) | |||||||||||
Net Increase/(Decrease) in Net Assets | (101,959 | ) | (167,636 | ) | (26,743 | ) | (79,314 | ) | |||||||||||
Net Assets: | |||||||||||||||||||
Beginning of period | 982,030 | 1,149,666 | 914,349 | 993,663 | |||||||||||||||
End of Period | $ | 880,071 | $ | 982,030 | $ | 887,606 | $ | 914,349 | |||||||||||
Undistributed net investment income/(loss)* | $ | (1,423 | ) | $ | – | $ | (394 | ) | $ | 13 |
See Notes to Financial Statements.
Janus Growth Funds April 30, 2007 81
Financial Highlights
Janus Fund | |||||||||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 27.43 | $ | 24.44 | $ | 22.69 | $ | 22.52 | $ | 18.39 | $ | 22.11 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .10 | .09 | .02 | – | (1) | – | (1) | – | (1) | ||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 2.91 | 2.92 | 1.73 | .17 | 4.13 | (3.72 | ) | ||||||||||||||||||||
Total from Investment Operations | 3.01 | 3.01 | 1.75 | .17 | 4.13 | (3.72 | ) | ||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.10 | ) | (.02 | ) | – | – | – | – | |||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | |||||||||||||||||||||
Payment from affiliate | – | (2) | – | (2) | – | (2) | – | (2) | – | – | |||||||||||||||||
Total Distributions and Other | (.10 | ) | (.02 | ) | – | – | – | – | |||||||||||||||||||
Net Asset Value, End of Period | $ | 30.34 | $ | 27.43 | $ | 24.44 | $ | 22.69 | $ | 22.52 | $ | 18.39 | |||||||||||||||
Total Return** | 10.98 | %(3) | 12.31 | %(3) | 7.71 | %(3) | 0.75 | %(3) | 22.46 | % | (16.82 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 11,863,421 | $ | 11,208,629 | $ | 11,142,921 | $ | 13,277,473 | $ | 17,426,458 | $ | 16,320,421 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 11,451,876 | $ | 11,232,055 | $ | 12,310,464 | $ | 15,433,191 | $ | 16,206,681 | $ | 21,651,285 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 0.88 | % | 0.90 | % | 0.88 | % | 0.90 | % | 0.89 | % | 0.85 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 0.88 | % | 0.90 | % | 0.87 | % | 0.90 | % | 0.89 | % | 0.84 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.69 | % | 0.34 | % | 0.07 | % | (0.17 | )% | (0.17 | )% | (0.24 | )% | |||||||||||||||
Portfolio Turnover Rates*** | 32 | % | 69 | % | 78 | % | 21 | % | 22 | % | 27 | % | |||||||||||||||
Janus Enterprise Fund | |||||||||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 45.65 | $ | 39.48 | $ | 33.73 | $ | 30.02 | $ | 22.93 | $ | 29.67 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .04 | (.04 | ) | – | (1) | – | (1) | – | (1) | – | (1) | ||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 6.17 | 6.21 | 5.75 | 3.71 | 7.09 | (6.74 | ) | ||||||||||||||||||||
Total from Investment Operations | 6.21 | 6.17 | 5.75 | 3.71 | 7.09 | (6.74 | ) | ||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | – | – | – | – | – | – | |||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | |||||||||||||||||||||
Payment from affiliate | – | (2) | – | – | – | – | – | ||||||||||||||||||||
Total Distributions and Other | – | – | – | – | – | – | |||||||||||||||||||||
Net Asset Value, End of Period | $ | 51.86 | $ | 45.65 | $ | 39.48 | $ | 33.73 | $ | 30.02 | $ | 22.93 | |||||||||||||||
Total Return** | 13.60 | %(3) | 15.63 | % | 17.05 | % | 12.36 | % | 30.92 | % | (22.72 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 1,908,406 | $ | 1,743,616 | $ | 1,703,542 | $ | 1,679,958 | $ | 1,916,706 | $ | 1,854,192 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 1,822,946 | $ | 1,778,532 | $ | 1,728,579 | $ | 1,795,534 | $ | 1,741,680 | $ | 2,518,273 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 0.95 | % | 1.00 | % | 0.96 | % | 1.04 | % | 1.02 | % | 0.93 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 0.94 | % | 0.99 | % | 0.95 | % | 1.03 | % | 1.02 | % | 0.90 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.15 | % | (0.24 | )% | (0.30 | )% | (0.46 | )% | (0.46 | )% | (0.43 | )% | |||||||||||||||
Portfolio Turnover Rates*** | 35 | % | 40 | % | 28 | % | 27 | % | 32 | % | 64 | % |
* 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% for the fiscal year or period ended 2007, 2006, 2005 and 2004.
See Notes to Financial Statements.
82 Janus Growth Funds April 30, 2007
Janus Orion Fund(1) | |||||||||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 9.49 | $ | 7.80 | $ | 6.25 | $ | 5.64 | $ | 4.33 | $ | 5.21 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .03 | .04 | .03 | – | (2) | – | (2) | – | (2) | ||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 1.23 | 1.71 | 1.52 | .61 | 1.31 | (.88 | ) | ||||||||||||||||||||
Total from Investment Operations | 1.26 | 1.75 | 1.55 | .61 | 1.31 | (.88 | ) | ||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.02 | ) | (.06 | ) | – | – | – | – | |||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | |||||||||||||||||||||
Payment from affiliate | – | (3) | – | – | – | (3) | – | – | |||||||||||||||||||
Total Distributions and Other | (.02 | ) | (.06 | ) | – | – | – | – | |||||||||||||||||||
Net Asset Value, End of Period | $ | 10.73 | $ | 9.49 | $ | 7.80 | $ | 6.25 | $ | 5.64 | $ | 4.33 | |||||||||||||||
Total Return** | 13.33 | %(4) | 22.58 | % | 24.80 | % | 10.82 | %(4) | 29.95 | % | (16.70 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 3,624,127 | $ | 3,243,102 | $ | 691,401 | $ | 529,804 | $ | 513,708 | $ | 421,458 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 3,429,452 | $ | 966,223 | $ | 590,421 | $ | 540,305 | $ | 431,124 | $ | 562,457 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6) | 0.89 | % | 1.00 | % | 1.02 | % | 1.09 | % | 1.10 | % | 1.09 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5) | 0.88 | % | 0.99 | % | 1.01 | % | 1.08 | % | 1.08 | % | 1.04 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.67 | % | 0.80 | % | 0.52 | % | (0.05 | )% | (0.43 | )% | (0.30 | )% | |||||||||||||||
Portfolio Turnover Rates*** | 40 | % | 63 | % | 68 | % | 69 | % | 72 | % | 161 | % | |||||||||||||||
Janus Research Fund(7) | |||||||||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 24.19 | $ | 22.05 | $ | 19.48 | $ | 18.14 | $ | 14.92 | $ | 19.14 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .03 | .02 | .09 | – | (2) | – | (2) | – | (2) | ||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 3.83 | 2.18 | 2.51 | 1.34 | 3.22 | (4.18 | ) | ||||||||||||||||||||
Total from Investment Operations | 3.86 | 2.20 | 2.60 | 1.34 | 3.22 | (4.18 | ) | ||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.02 | ) | (.06 | ) | (.03 | ) | – | – | (.04 | ) | |||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | |||||||||||||||||||||
Payment from affiliate | – | (3) | – | (3) | – | – | – | – | |||||||||||||||||||
Total Distributions and Other | (.02 | ) | (.06 | ) | (.03 | ) | – | – | (.04 | ) | |||||||||||||||||
Net Asset Value, End of Period | $ | 28.03 | $ | 24.19 | $ | 22.05 | $ | 19.48 | $ | 18.14 | $ | 14.92 | |||||||||||||||
Total Return** | 15.96 | %(4) | 10.00 | %(4) | 13.35 | % | 7.39 | % | 21.58 | % | (21.88 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 4,269,761 | $ | 3,876,997 | $ | 4,473,431 | $ | 4,471,514 | $ | 5,282,164 | $ | 5,034,041 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 3,984,396 | $ | 4,052,013 | $ | 4,447,616 | $ | 5,007,156 | $ | 5,088,567 | $ | 6,783,864 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6) | 0.97 | % | 0.98 | % | 0.93 | % | 0.97 | % | 0.96 | % | 0.94 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5) | 0.96 | % | 0.97 | % | 0.92 | % | 0.97 | % | 0.95 | % | 0.92 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.22 | % | 0.11 | % | 0.42 | % | (0.26 | )% | (0.31 | )% | (0.07 | )% | |||||||||||||||
Portfolio Turnover Rates*** | 66 | % | 147 | % | 38 | % | 43 | % | 54 | % | 97 | % |
* See Note 4 in Notes to Financial Statements.
** Total return not annualized for periods of less than one full year.
*** Annualized for periods of less than one full year.
(1) Effective October 31, 2006, Janus Olympus Fund merged into Janus Orion Fund. See Note 6.
(2) Net investment income/(loss) aggregated less than $.01 on a per share basis for the fiscal year ended.
(3) Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year or period ended.
(4) During the fiscal year or period ended, Janus Capital and/or Janus Services fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%.
(5) See "Explanations of Charts, Tables and Financial Statements."
(6) The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2007, 2006, 2005 and 2004.
(7) Formerly named Janus Mercury Fund.
See Notes to Financial Statements.
Janus Growth Funds April 30, 2007 83
Financial Highlights (continued)
Janus Triton Fund |
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) and through each fiscal year or period ended October 31 | 2007 | 2006 | 2005(1) | ||||||||||||
Net Asset Value, Beginning of Period | $ | 13.09 | $ | 10.86 | $ | 10.00 | |||||||||
Income from Investment Operations: | |||||||||||||||
Net investment income/(loss) | (.04 | ) | .01 | – | |||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 1.36 | 2.27 | .86 | ||||||||||||
Total from Investment Operations | 1.32 | 2.28 | .86 | ||||||||||||
Less Distributions and Other: | |||||||||||||||
Dividends from net investment income* | – | (.03 | ) | – | |||||||||||
Distributions from net realized gains* | (.18 | ) | (.02 | ) | – | ||||||||||
Payment from affiliate | – | (2) | – | – | |||||||||||
Total Distributions and Other | (.18 | ) | (.05 | ) | – | ||||||||||
Net Asset Value, End of Period | $ | 14.23 | $ | 13.09 | $ | 10.86 | |||||||||
Total Return** | 10.12 | %(3) | 21.06 | % | 8.60 | % | |||||||||
Net Assets, End of Period (in thousands) | $ | 115,118 | $ | 111,993 | $ | 37,695 | |||||||||
Average Net Assets for the Period (in thousands) | $ | 118,344 | $ | 105,268 | $ | 25,904 | |||||||||
Ratio of Gross Expenses to Average Net Assets***(4) | 1.11 | % | 1.11 | % | 1.27 | %(5) | |||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 1.10 | % | 1.09 | % | 1.25 | % | |||||||||
Ratio of Net Invest Income to Average Net Assets*** | (0.55 | )% | 0.12 | % | (0.24 | )% | |||||||||
Portfolio Turnover Rates*** | 86 | % | 262 | % | 48 | % |
Janus Twenty Fund | |||||||||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 52.93 | $ | 47.63 | $ | 39.60 | $ | 34.06 | $ | 30.47 | $ | 36.31 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .05 | .32 | .10 | .03 | .17 | .21 | |||||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 5.77 | 5.08 | 7.94 | 5.68 | 3.63 | (5.71 | ) | ||||||||||||||||||||
Total from Investment Operations | 5.82 | 5.40 | 8.04 | 5.71 | 3.80 | (5.50 | ) | ||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.32 | ) | (.10 | ) | (.01 | ) | (.17 | ) | (.21 | ) | (.34 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | |||||||||||||||||||||
Payment from affiliate | – | (2) | – | (2) | – | (2) | – | (2) | – | – | |||||||||||||||||
Total Distributions and Other | (.32 | ) | (.10 | ) | (.01 | ) | (.17 | ) | (.21 | ) | (.34 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 58.43 | $ | 52.93 | $ | 47.63 | $ | 39.60 | $ | 34.06 | $ | 30.47 | |||||||||||||||
Total Return** | 11.03 | %(6) | 11.35 | %(6) | 20.31 | %(6) | 16.85 | %(6) | 12.60 | % | (15.35 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 10,163,707 | $ | 9,582,463 | $ | 9,612,503 | $ | 9,023,479 | $ | 9,821,492 | $ | 10,107,243 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 9,847,364 | $ | 9,511,589 | $ | 9,458,921 | $ | 9,319,532 | $ | 9,749,457 | $ | 12,572,984 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(7) | 0.91 | %(8) | 0.88 | %(8) | 0.86 | % | 0.89 | % | 0.88 | % | 0.84 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 0.91 | %(8) | 0.87 | %(8) | 0.86 | % | 0.89 | % | 0.88 | % | 0.83 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.17 | % | 0.60 | % | 0.21 | % | 0.06 | % | 0.52 | % | 0.56 | % | |||||||||||||||
Portfolio Turnover Rates*** | 34 | % | 41 | % | 44 | % | 14 | % | 44 | % | 53 | % |
* See Note 4 in Notes to Financial Statements.
** Total return not annualized for periods of less than one full year.
*** Annualized for periods of less than one full year.
(1) Period from February 25, 2005 (inception date) through October 31, 2005.
(2) Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year or period ended.
(3) During the period ended, Janus Capital and/or Janus Services fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by 0.01%.
(4) See "Explanations of Charts, Tables and Financial Statements."
(5) The ratio was 1.85% in 2005 before waiver of certain fees incurred by the Fund.
(6) 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%.
(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% for the fiscal year or period ended 2007, 2006, 2005 and 2004.
(8) Ratio of Gross Expenses to Average Net Assets and Ratio of Net Expenses to Average Net Assets includes dividends on short positions. The ratio would be 0.86% and 0.86%, respectively, in 2007 and 0.87% and 0.87%, respectively, in 2006, without the inclusion of dividends on short positions.
See Notes to Financial Statements.
84 Janus Growth Funds April 30, 2007
Janus Venture Fund | |||||||||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 65.75 | $ | 56.82 | $ | 51.57 | $ | 47.77 | $ | 31.59 | $ | 36.99 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | (.14 | ) | (.06 | ) | – | (1) | – | (1) | – | (1) | – | (1) | |||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 9.11 | 11.92 | 5.25 | 3.80 | 16.18 | (5.40 | ) | ||||||||||||||||||||
Total from Investment Operations | 8.97 | 11.86 | 5.25 | 3.80 | 16.18 | (5.40 | ) | ||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | – | – | – | – | – | – | |||||||||||||||||||||
Distributions (from capital gains)* | (7.49 | ) | (2.93 | ) | – | – | – | – | |||||||||||||||||||
Payment from affiliate | – | (2) | – | – | – | – | – | ||||||||||||||||||||
Total Distributions and Other | (7.49 | ) | (2.93 | ) | – | – | – | – | |||||||||||||||||||
Net Asset Value, End of Period | $ | 67.23 | $ | 65.75 | $ | 56.82 | $ | 51.57 | $ | 47.77 | $ | 31.59 | |||||||||||||||
Total Return** | 14.48 | %(3) | 21.69 | % | 10.18 | % | 7.95 | % | 51.22 | % | (14.60 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 1,546,461 | $ | 1,398,455 | $ | 1,293,150 | $ | 1,327,088 | $ | 1,392,358 | $ | 756,323 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 1,489,009 | $ | 1,353,079 | $ | 1,367,775 | $ | 1,355,755 | $ | 988,156 | $ | 992,760 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 0.88 | % | 0.91 | % | 0.87 | % | 0.90 | % | 0.94 | % | 0.88 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 0.87 | % | 0.91 | % | 0.87 | % | 0.90 | % | 0.93 | % | 0.87 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | (0.46 | )% | (0.55 | )% | (0.64 | )% | (0.74 | )% | (0.67 | )% | (0.73 | )% | |||||||||||||||
Portfolio Turnover Rates*** | 54 | % | 55 | % | 63 | % | 61 | % | 75 | % | 90 | % | |||||||||||||||
Janus Global Life Sciences Fund | |||||||||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 20.25 | $ | 19.37 | $ | 16.08 | $ | 14.61 | $ | 12.82 | $ | 16.96 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | (.04 | ) | – | (1) | – | (1) | – | (1) | – | (1) | – | (1) | |||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 1.72 | .88 | 3.29 | 1.47 | 1.79 | (4.14 | ) | ||||||||||||||||||||
Total from Investment Operations | 1.68 | .88 | 3.29 | 1.47 | 1.79 | (4.14 | ) | ||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | – | – | – | – | – | – | |||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | |||||||||||||||||||||
Redemption fees | – | (6) | – | (6) | – | (6) | – | (6) | – | (6) | N/A | ||||||||||||||||
Payment from affiliate | – | (2) | – | – | – | (2) | – | – | |||||||||||||||||||
Total Distributions and Other | – | – | – | – | – | – | |||||||||||||||||||||
Net Asset Value, End of Period | $ | 21.93 | $ | 20.25 | $ | 19.37 | $ | 16.08 | $ | 14.61 | $ | 12.82 | |||||||||||||||
Total Return** | 8.30 | %(3) | 4.54 | % | 20.46 | % | 10.06 | %(3) | 13.87 | % | (24.35 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 880,071 | $ | 982,030 | $ | 1,149,666 | $ | 1,183,496 | $ | 1,264,220 | $ | 1,389,723 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 892,193 | $ | 1,101,726 | $ | 1,181,741 | $ | 1,288,416 | $ | 1,296,095 | $ | 1,927,734 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 1.02 | % | 1.02 | % | 0.97 | % | 1.02 | % | 0.99 | % | 0.89 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 1.00 | % | 1.01 | % | 0.96 | % | 1.01 | % | 0.98 | % | 0.88 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | (0.32 | )% | (0.39 | )% | (0.49 | )% | (0.52 | )% | (0.28 | )% | (0.42 | )% | |||||||||||||||
Portfolio Turnover Rates*** | 56 | % | 87 | % | 77 | % | 78 | % | 135 | % | 73 | % |
* See Note 4 in Notes to Financial Statements.
** Total return not annualized for periods of less than one full year.
*** Annualized for periods of less than one full year.
(1) 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 fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%.
(4) See "Explanations of Charts, Tables and Financial Statements."
(5) The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2007, 2006, 2005 and 2004.
(6) Redemption fees aggregated less than $.01 on a per share basis for the fiscal year or period ended.
See Notes to Financial Statements.
Janus Growth Funds April 30, 2007 85
Financial Highlights (continued)
Janus Global Technology Fund | |||||||||||||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 12.23 | $ | 10.88 | $ | 9.70 | $ | 10.44 | $ | 7.41 | $ | 10.83 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | (.01 | ) | – | (1) | .01 | .02 | – | (1) | (.01 | ) | |||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 1.54 | 1.36 | 1.17 | (.76 | ) | 3.03 | (3.41 | ) | |||||||||||||||||||
Total from Investment Operations | 1.53 | 1.36 | 1.18 | (.74 | ) | 3.03 | (3.42 | ) | |||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | – | (.01 | ) | – | – | – | – | ||||||||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | |||||||||||||||||||||
Redemption fees | – | (2) | – | (2) | – | (2) | – | (2) | – | (2) | N/A | ||||||||||||||||
Payment from affiliate | – | (3) | – | (3) | – | – | (3) | – | – | ||||||||||||||||||
Total Distributions and Other | – | (.01 | ) | – | – | – | – | ||||||||||||||||||||
Net Asset Value, End of Period | $ | 13.76 | $ | 12.23 | $ | 10.88 | $ | 9.70 | $ | 10.44 | $ | 7.41 | |||||||||||||||
Total Return** | 12.51 | %(4) | 12.48 | %(4) | 12.16 | % | (7.09 | )%(4) | 41.08 | % | (31.67 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 887,606 | $ | 914,349 | $ | 993,663 | $ | 1,255,023 | $ | 1,655,731 | $ | 1,249,514 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 908,994 | $ | 999,147 | $ | 1,109,908 | $ | 1,480,508 | $ | 1,332,510 | $ | 1,906,518 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6) | 1.07 | % | 1.13 | % | 1.04 | % | 1.07 | % | 1.07 | % | 0.96 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5) | 1.05 | % | 1.11 | % | 1.03 | % | 1.07 | % | 1.06 | % | 0.94 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | (0.09 | )% | (0.30 | )% | 0.07 | % | (0.37 | )% | (0.27 | )% | (0.14 | )% | |||||||||||||||
Portfolio Turnover Rates*** | 60 | % | 85 | % | 31 | % | 24 | % | 48 | % | 66 | % |
* 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) 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 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 less than 0.01%.
(5) See "Explanations of Charts, Tables and Financial Statements."
(6) The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2007, 2006, 2005 and 2004.
See Notes to Financial Statements.
86 Janus Growth Funds April 30, 2007
Notes to Schedules of Investments (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 Index | Is a capitalization weighted index that monitors the performance of information technology stocks from developed market countries in North America, Europe, and the Asia/Pacific Region. The index includes reinvestment of dividends, net of foreign withholding taxes. | ||||||
Morgan Stanley Capital International World Health Care Index | Is a capitalization weighted index that monitors the performance of healthcare stocks from developed market countries in North America, Europe, and the Asia/Pacific Region. The index includes reinvestment of dividends, net of foreign withholding taxes. | ||||||
Russell 1000® Growth Index | Measures the performance of those Russell 1000® 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 2500TM 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 | Measures the performance of those Russell Midcap® companies with higher price-to-book ratios and higher forecasted growth values. | ||||||
Janus Growth Funds April 30, 2007 87
Notes to Schedules of Investments (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, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. | ||||||
ADR | American Depositary Receipt | ||||||
GDR | Global Depositary Receipt | ||||||
PLC | Public Limited Company | ||||||
REIT | Real Estate Investment Trust | ||||||
U.S. Shares | Securities of foreign companies trading on an American Stock Exchange | ||||||
* Non-income-producing security.
** A portion of this 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.
# Loaned security; a portion or all of the security is on loan as of April 30, 2007.
† 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, 2007)
Value | Value as a % of Net Assets | ||||||||||
Janus Venture Fund | |||||||||||
Familymeds Group, Inc. - expires 9/29/10 | $ | 2,898 | 0.0 | % | |||||||
Genius Products, Inc. - expires 12/5/10 | 1,520,760 | 0.1 | % | ||||||||
Infocrossing, Inc. - expires 10/16/08 | 4,541,258 | 0.3 | % | ||||||||
OneTravel Holdings, Inc. - expires 4/14/10 | – | 0.0 | % | ||||||||
Pokertek Inc. | 4,746,248 | 0.3 | % | ||||||||
Pokertek Inc. - expires 4/23/12 | 560,317 | 0.0 | % | ||||||||
Ronco Fi-Tek, Inc. | – | 0.0 | % | ||||||||
$ | 11,371,481 | 0.7 | % | ||||||||
Janus Global Life Sciences Fund | |||||||||||
Cougar Biotechnology, Inc. | $ | 566,886 | 0.1 | % | |||||||
Fibrogen, Inc. | 9,538,658 | 1.1 | % | ||||||||
GMP Companies, Inc. | 3,925,129 | 0.4 | % | ||||||||
GMP Companies, Inc. - expires 6/1/11 | 473,202 | 0.1 | % | ||||||||
GMP Companies, Inc. - expires 6/1/11 | 176,638 | 0.0 | % | ||||||||
Mediquest Therapeutics | 7,527,765 | 0.8 | % | ||||||||
Mediquest Therapeutics - expires 6/15/11 | 628,125 | 0.1 | % | ||||||||
$ | 22,836,403 | 2.6 | % |
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.
88 Janus Growth Funds April 30, 2007
§ Schedule of Restricted and Illiquid Securities (as of April 30, 2007)
Acquisition Date | Acquisition Cost | Value | Value as a % of Net Assets | ||||||||||||||||
Janus Enterprise Fund | |||||||||||||||||||
Polytec Asset Holdings, Ltd. | 5/5/06 | $ | 9,134,007 | $ | 10,856,498 | 0.6 | % | ||||||||||||
Janus Triton Fund | |||||||||||||||||||
Polytec Asset Holdings, Ltd. | 5/5/06 | $ | 808,849 | $ | 961,381 | 0.8 | % | ||||||||||||
Janus Venture Fund | |||||||||||||||||||
Familymeds Group, Inc. - expires 9/29/10ºº | 9/23/05 | $ | 381,250 | $ | 2,898 | 0.0 | % | ||||||||||||
Genius Products, Inc. | 12/5/05 | 8,417,000 | 14,392,500 | 0.9 | % | ||||||||||||||
Genius Products, Inc. - expires 12/5/10ºº | 12/5/05 | 1,083,000 | 1,520,760 | 0.1 | % | ||||||||||||||
Hythiam, Inc. | 12/12/06 | 5,000,004 | 4,760,277 | 0.3 | % | ||||||||||||||
Infocrossing, Inc. - expires 10/16/08ºº | 10/16/03 | – | 4,541,258 | 0.3 | % | ||||||||||||||
OneTravel Holdings, Inc. - expires 4/14/10ºº | 4/14/05 | – | – | 0.0 | % | ||||||||||||||
Pokertek, Inc.ºº | 4/23/07 | 3,632,884 | 4,746,248 | 0.3 | % | ||||||||||||||
Pokertek, Inc. - expires 4/23/12ºº | 4/23/07 | 712,613 | 560,317 | 0.0 | % | ||||||||||||||
Polytec Asset Holdings, Ltd. | 5/5/06 | 7,213,100 | 8,573,346 | 0.6 | % | ||||||||||||||
Ronco Fi-Tek, Inc.ºº | 6/24/05 - 9/6/06 | 6,000,000 | – | 0.0 | % | ||||||||||||||
UTEK Corp. | 8/12/05 | 2,575,204 | 3,903,224 | 0.3 | % | ||||||||||||||
ValueVision Media, Inc. | 7/8/05 | 18,754,252 | 19,282,781 | 1.2 | % | ||||||||||||||
$ | 53,769,307 | $ | 62,283,609 | 4.0 | % | ||||||||||||||
Janus Global Life Sciences Fund | |||||||||||||||||||
Cougar Biotechnology, Inc.ºº | 3/31/06 | $ | 58,135 | $ | 566,886 | 0.1 | % | ||||||||||||
Fibrogen, Inc.ºº | 12/28/04 - 11/8/05 | 5,786,786 | 9,538,658 | 1.1 | % | ||||||||||||||
GMP Companies, Inc.ºº | 5/31/06 - 10/4/06 | 3,874,867 | 3,925,129 | 0.4 | % | ||||||||||||||
GMP Companies, Inc. - expires 6/1/11ºº | 5/31/06 - 10/4/06 | – | 473,202 | 0.1 | % | ||||||||||||||
GMP Companies, Inc. - expires 6/1/11ºº | 5/31/06 | – | 176,638 | 0.0 | % | ||||||||||||||
Mediquest Therapeuticsºº | 5/11/06 - 6/15/06 | 5,018,510 | 7,527,765 | 0.8 | % | ||||||||||||||
Mediquest Therapeutics - expires 6/15/11ºº | 5/11/06 - 6/15/06 | – | 628,125 | 0.1 | % | ||||||||||||||
$ | 14,738,298 | $ | 22,836,403 | 2.6 | % | ||||||||||||||
Janus Global Technology Fund | |||||||||||||||||||
Goldman Sachs Group, Inc. - Class A convertible, (Google Corp), 0% (144A) | 2/1/07 | $ | 4,801,814 | $ | 4,720,154 | 0.5 | % | ||||||||||||
Goldman Sachs Group, Inc. - Class A convertible, (Google Corp.), 0% (144A) | 3/8/07 | 4,250,986 | 4,317,639 | 0.5 | % | ||||||||||||||
$ | 9,052,800 | $ | 9,037,793 | 1.0 | % |
The Funds have registration rights for certain restricted securities held as of April 30, 2007. The issuer incurs all registration costs.
Janus Growth Funds April 30, 2007 89
Notes to Schedules of Investments (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 six-month period ended April 30, 2007.
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/07 | |||||||||||||||||||||||||
Janus Orion Fund | |||||||||||||||||||||||||||||||
Dade Behring Holdings, Inc. | 1,732,005 | $ | 67,430,277 | – | $ | – | $ | – | $ | 581,792 | $ | 307,846,330 | |||||||||||||||||||
Trimble Navigation, Ltd.(1) | 1,799,780 | – | – | – | – | – | 103,235,381 | ||||||||||||||||||||||||
VistaPrint, Ltd. | – | – | – | – | – | – | 97,871,007 | ||||||||||||||||||||||||
$ | 67,430,277 | $ | – | $ | – | $ | 581,792 | $ | 508,952,718 |
(1) Adjusted for 2 for 1 stock split 2/23/07
Janus Venture Fund | |||||||||||||||||||||||||||||||
Century Casinos, Inc. | – | $ | – | – | $ | – | $ | – | $ | – | $ | 12,805,403 | |||||||||||||||||||
Genius Products, Inc. | – | – | – | – | – | – | 14,392,500 | ||||||||||||||||||||||||
Health Grades, Inc. | 649,880 | 3,174,344 | – | – | – | – | 9,380,880 | ||||||||||||||||||||||||
Infocrossing, Inc. | – | – | 21,470 | 225,435 | 51,953 | – | 27,217,506 | ||||||||||||||||||||||||
Intermap Technologies, Ltd. | – | – | – | – | – | – | 13,258,228 | ||||||||||||||||||||||||
LivePerson, Inc. | – | – | – | – | – | – | 21,982,940 | ||||||||||||||||||||||||
NaviSite Inc. | 3,216,205 | 14,472,923 | – | – | – | – | 20,583,712 | ||||||||||||||||||||||||
NuCo2, Inc. | – | – | – | – | – | – | 20,002,917 | ||||||||||||||||||||||||
Omnicell, Inc. | – | – | 185,190 | 2,766,741 | 1,337,242 | – | 38,872,725 | ||||||||||||||||||||||||
Pokertek, Inc. | 482,833 | 3,632,884 | – | – | – | – | 4,746,248 | ||||||||||||||||||||||||
Ronco Fi-Tek, Inc. | – | – | – | – | – | – | – | ||||||||||||||||||||||||
Ultimate Software Group, Inc. | – | – | 69,690 | 766,590 | 1,048,646 | – | 46,531,667 | ||||||||||||||||||||||||
ValueVision Media, Inc. | – | – | – | – | – | – | 19,282,781 | ||||||||||||||||||||||||
Workstream, Inc. (U.S. Shares) | – | – | – | – | – | – | 5,750,296 | ||||||||||||||||||||||||
$ | 21,280,151 | $ | 3,758,766 | $ | 2,437,841 | $ | – | $ | 254,807,803 |
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, 2007 are noted below.
Fund | Aggregate Value | ||||||
Growth | |||||||
Janus Fund | $ | 734,625,249 | |||||
Janus Orion Fund | 59,029,711 | ||||||
Janus Research Fund(1) | 463,689,351 | ||||||
Janus Triton Fund | 1,370,632 | ||||||
Specialty Growth | |||||||
Janus Global Life Sciences Fund | 106,441,742 | ||||||
Janus Global Technology Fund | 292,100,683 |
(1) Formerly named Janus Mercury Fund.
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, 2007.
90 Janus Growth Funds April 30, 2007
Notes to Financial Statements (unaudited)
The following section describes the organization and significant accounting policies and provides more detailed information about the schedules and tables that appear throughout this report. In addition, the Notes to Financial Statements explain the methods used in preparing and presenting this report.
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Janus Fund, Janus Enterprise Fund, Janus Orion Fund, Janus Research Fund (formerly named Janus Mercury 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 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. 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 or such other collateral permitted by the Securities and Exchange Commission ("SEC"). Cash collateral may be invested in affiliated money market funds or other accounts advised by Janus Capital to the extent consistent with exemptive relief obtained from the SEC or as permitted by the 1940 Act and rules promulgated thereunder. Cash collateral may also be invested in unaffiliated money market funds or other accounts advised by Janus Capital to the extent consistent with exemptive relief obtained from the SEC or as permitted by the 1940 Act and rules promulgated thereunder. Cash collateral may also be invested in unaffi liated 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
Janus Growth Funds April 30, 2007 91
Notes to Financial Statements (unaudited) (continued)
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, 2007, the following Funds had on loan securities valued as indicated:
Fund | Value at April 30, 2007 | ||||||
Growth | |||||||
Janus Fund | $ | 757,517,251 | |||||
Janus Enterprise Fund | 317,854,138 | ||||||
Janus Orion Fund | 454,110,356 | ||||||
Janus Research Fund(1) | 489,819,936 | ||||||
Janus Twenty Fund | 52,303,796 | ||||||
Janus Venture Fund | 380,969,239 | ||||||
Specialty Growth | |||||||
Janus Global Life Sciences Fund | 149,682,810 | ||||||
Janus Global Technology Fund | 76,285,235 |
(1) Formerly named Janus Mercury Fund.
As of April 30, 2007, the following Funds received cash collateral for securities lending activity as indicated:
Fund | Cash Collateral at April 30, 2007 | ||||||
Growth | |||||||
Janus Fund | $ | 780,427,801 | |||||
Janus Enterprise Fund | 325,275,302 | ||||||
Janus Orion Fund | 471,164,462 | ||||||
Janus Research Fund(1) | 507,474,326 | ||||||
Janus Twenty Fund | 53,442,838 | ||||||
Janus Venture Fund | 390,469,502 | ||||||
Specialty Growth | |||||||
Janus Global Life Sciences Fund | 154,720,115 | ||||||
Janus Global Technology Fund | 78,528,074 |
(1) Formerly named Janus Mercury Fund.
As of April 30, 2007, all cash collateral received was invested in the State Street Navigator Securities Lending Prime Portfolio, except for Janus Fund, Janus Orion Fund and Janus Research Fund which also invested $2,345,164, $5,731,021 and $48,437,452, respectively, of the cash collateral in Foreign Government Bonds. Additionally, Janus Fund, Janus Enterprise Fund, Janus Orion Fund, Janus Research Fund, Janus Global Life Sciences Fund and Janus Global Technology Fund invested $43,116,592, $745,249, $4,584,991, $17,455,693, $2,038,343 and $511,665, respectively, of the cash collateral in U.S. Treasury Notes/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 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 ended April 30, 2007, there were no securities lending arrangements for Janus Triton Fund.
Interfund Lending
Pursuant to an exemptive order received from the SEC, each Fund may be party to an interfund lending agreement between the Fund and other Janus Capital sponsored mutual funds, which permits 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, 2007, there were no outstanding interfund borrowing or lending arrangements for the Funds.
Short Sales
The Funds may engage in "short sales against the box." Short sales against the box involve selling either a security that the Fund owns, or a security equivalent in kind and amount to the security sold short that the Fund has the right to obtain, for delivery at a specified date in the future. The Fund may enter into a short sale against the box to hedge against anticipated declines in the market price of portfolio securities. If the value of the securities sold short increases prior to the scheduled delivery date, the Fund loses the opportunity to participate in the gain.
The Funds may also engage in "naked" (uncovered) 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, the Fund must borrow the security to deliver it to the purchaser and buy that same security in the market to return it to the lender. Although the potential for gain is limited to the difference between the price at which the Fund sold the security short and the cost of borrowing the security, its potential for loss is theoretically unlimited because there is no limit to the cost of replacing the borrowed security. There is no assurance that the Fund will be able to close out a short position at a particular time or at an acceptable price. A gain or a loss will be recognized upon termination of a short sale. There is no limit on the size of any loss that a Fund may recognize upon termination of a short sale. Short sales held by the Fund are fully co llateralized by other securities, which are denoted in the accompanying Schedule of Investments (if applicable). As of April 30, 2007, Janus Global Technology Fund was invested in short sales.
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.
92 Janus Growth Funds April 30, 2007
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.
As of April 30, 2007, Janus Fund, Janus Orion Fund, Janus Research Fund, Janus Global Life Sciences Fund and Janus Global Technology Fund were invested in forward currency transactions.
Futures Contracts
The Funds may enter into futures contracts. The Funds intend to use such derivative instruments to hedge or protect from adverse movements in securities prices, currency rates or interest rates. The use of futures contracts may involve risks such as the possibility of illiquid markets or imperfect correlation between the 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 a receivable or payable on the Statement of Assets and Liabilities (if applicable). When a contract is closed, a realized gain or loss is recorded 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.
As of April 30, 2007, the Funds were not invested in futures 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 currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and market risk. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
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 Fund generally invests in options to hedge against adverse movements in the value of portfolio holdings.
When an option is written, the Fund receives a premium and becomes obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. In writing an option, the Fund bears the market risk of an unfavorable change in the price of the security underlying the written option. Exercise of an option written by the Fund could result in the Fund buying or selling a security at a price different from the current market value.
When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option 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). Realized gains and losses are reported on the Statement of Operations (if applicable). The following Funds recognized realized gains or losses from written options during the six-month period ended April 30, 2007.
Fund | Gain/(Loss) | ||||||
Growth | |||||||
Janus Fund | $ | 5,573,500 | |||||
Janus Research Fund(1) | 5,033,932 | ||||||
Janus Triton Fund | – | ||||||
Speciality Growth | |||||||
Janus Global Technology Fund | 647,914 |
(1) Formerly named Janus Mercury Fund.
The risk in writing a call option is that a Fund gives 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 a Fund 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 a Fund pays 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 a Fund's hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. There is no limit to the loss that a Funds may recognize due to written call options.
Janus Growth Funds April 30, 2007 93
Notes to Financial Statements (unaudited) (continued)
Written option activity for the six-month period ended April 30, 2007 was as follows:
Call Options | Number of Contracts | Premiums Received | |||||||||
Janus Fund | |||||||||||
Options outstanding at October 31, 2006 | 29,787 | $ | 1,992,219 | ||||||||
Options written | 63,230 | 2,752,171 | |||||||||
Options closed | (6,456 | ) | (643,876 | ) | |||||||
Options expired | (75,783 | ) | (3,839,296 | ) | |||||||
Options exercised | (653 | ) | (31,787 | ) | |||||||
Options outstanding at April 30, 2007 | 10,125 | $ | 229,431 | ||||||||
Put Options | Number of Contracts | Premiums Received | |||||||||
Janus Fund | |||||||||||
Options outstanding at October 31, 2006 | – | $ | – | ||||||||
Options written | 38,308 | 1,301,153 | |||||||||
Options closed | – | – | |||||||||
Options expired | (36,722 | ) | (1,271,019 | ) | |||||||
Options exercised | – | – | |||||||||
Options outstanding at April 30, 2007 | 1,586 | $ | 30,134 | ||||||||
Call Options | Number of Contracts | Premiums Received | |||||||||
Janus Research Fund(1) | |||||||||||
Options outstanding at October 31, 2006 | – | $ | – | ||||||||
Options written | 7,520 | 5,041,478 | |||||||||
Options closed | (98 | ) | (65,700 | ) | |||||||
Options expired | (7,422 | ) | (4,975,778 | ) | |||||||
Options exercised | – | – | |||||||||
Options outstanding at April 30, 2007 | – | $ | – |
(1) Formerly named Janus Mercury Fund.
Call Options | Number of Contracts | Premiums Received | |||||||||
Janus Triton Fund | |||||||||||
Options outstanding at October 31, 2006 | – | $ | – | ||||||||
Options written | 316 | 77,970 | |||||||||
Options closed | – | – | |||||||||
Options expired | – | – | |||||||||
Options exercised | – | – | |||||||||
Options outstanding at April 30, 2007 | 316 | $ | 77,970 | ||||||||
Call Options | Number of Contracts | Premiums Received | |||||||||
Janus Global Technology Fund | |||||||||||
Options outstanding at October 31, 2006 | 1,032 | $ | 241,312 | ||||||||
Options written | 14,335 | 3,820,651 | |||||||||
Options closed | (4,997 | ) | (899,925 | ) | |||||||
Options expired | (1,032 | ) | (241,312 | ) | |||||||
Options exercised | – | – | |||||||||
Options outstanding at April 30, 2007 | 9,338 | $ | 2,920,726 | ||||||||
Put Options | Number of Contracts | Premiums Received | |||||||||
Janus Global Technology Fund | |||||||||||
Options outstanding at October 31, 2006 | – | $ | – | ||||||||
Options written | 290 | 82,357 | |||||||||
Options closed | (290 | ) | (82,357 | ) | |||||||
Options expired | – | – | |||||||||
Options exercised | – | – | |||||||||
Options outstanding at April 30, 2007 | – | $ | – |
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 Fund may hold liquid assets as collateral with the Fund's custodian sufficient to cover the purchase price. As of April 30, 2007, 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 derivative securities which are specially designed to combine the characteristics of one or more underlying securities and their equity derivatives in a single note form. The return and/or yield or income component may be based on the performance of the underlying equity securities, an equity index, and/or option positions. Equity-linked structured notes are typically offered in limited transactions by financial institutions in either registered or nonregistered form. An investment in equity-linked structured notes creates exposure to the credit risk of the issuing financial institution, as well as to the market risk of the underlying securities. There is no guaranteed return of principal with these securities and the appreciation potential of these securities may be limited by a maximum payment or call right. In certain cases, equity-linked structured notes may be more volatile and less liquid than less complex securities or other types of fixed-income securities. Such securities may exhibit price behavior that does not correlate with other fixed-income securities. As of April 30, 2007, Janus Global Technology Fund was invested in equity-linked structured notes.
Initial Public Offerings
The Funds may invest in initial public offerings ("IPOs"). IPOs and other investment techniques may have a magnified performance impact on a fund with a small asset base. A Fund may not experience similar performance as its assets grow.
Restricted Security Transactions
Restricted securities held by 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.
Restricted Cash
As of April 30, 2007, Janus Fund had restricted cash in the amount of $7,493,850. The restricted cash represents funds in relation to options contracts invested by Janus Fund at April 30, 2007. The restricted cash is held at the Fund's
94 Janus Growth Funds April 30, 2007
custodian, State Street Bank and Trust Company. The carrying value of the restricted cash approximates fair value.
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.
New Accounting Pronouncements
In July 2006, the Financial Accounting Standards Board ("FASB") issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109" (the "Interpretation"). The Interpretation establishes for all entities, including pass-through entities such as the Funds, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. A calendar year open-end or closed-end fund would implement the interpretation no later than June 29, 2007 (the last business day of the semi-annual reporting period) and will also apply to all open tax years as of the date of effectiveness. Management has recently begun to evaluate the application of the Interpretation to the Funds, and is not in a position at this time to estimate the significance of its impact, if any, on the Funds' financial statements.
In September 2006, the SEC issued Staff Accounting Bulletin ("SAB") No. 108 "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements" (SAB 108). SAB 108 requires that public companies utilize a "dual approach" to assessing the quantitative effects of financial misstatements. This dual approach includes both an income statement focused assessment and a balance sheet focused assessment. The guidance in SAB 108 must be applied to annual financial statements for fiscal years ending after November 15, 2006. Management is currently assessing the impact of adopting SAB 108 on each Fund's financial position or results of operations.
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%.
For Janus Research Fund, the investment advisory fee is determined by calculating a base fee and applying a performance adjustment. The base fee rate is the same as the investment advisory fee rate shown in the previous paragraph. The performance adjustment either increases or decreases the base fee depending on how well the Fund has performed relative to its benchmark, as shown below:
Fund | Benchmark Index | ||||||
Janus Research Fund(1) | Russell 1000 Growth® Index |
(1) Formerly named Janus Mercury Fund.
Only the base fee rate applied until February 2007 for Janus Research Fund, at which time the calculation of the performance adjustment is applied as follows:
(Investment Advisory Fee = Base Fee +/- Performance Adjustment).
The investment advisory fee paid to Janus Capital by Janus Research Fund consists of two components: (i) a base fee calculated by applying the contractual fixed-rate of the advisory fee to the Fund's average daily net assets during the previous month ("Base Fee"), plus or minus (ii) a performance-fee adjustment ("Performance Adjustment") calculated by applying a variable rate of up to 0.15% (positive or negative) to the Fund's average daily net assets during the applicable performance measurement period.
The performance measurement period generally is the previous 36 months, although no Performance Adjustment will be made until the Fund's performance-based fee structure has been in effect for at least 12 months. When the Fund's performance-based fee structure has been in effect for at least 12 months, but less than 36 months, the performance measurement period will be equal to the time that has elapsed since the performance-based fee structure took effect. As noted above, any Performance Adjustment began February 2007 for Janus Research Fund. No Performance Adjustment will be applied unless the difference between the Fund's investment performance and the investment record of the Fund's benchmark index is 0.50% or greater (positive or negative) during the applicable performance measurement period. Because the Performance Adjustment is tied to the Fund's relative performance to its benchmark index (and not its absolute performance), the Perfor mance Adjustment could increase Janus Capital's fee even if the Fund's shares lose value during the performance measurement period and could decrease Janus Capital's fee even if the Fund's shares increase in value during the performance measurement period. For purposes of computing the Base Fee and the Performance Adjustment, net assets will be averaged over different periods
Janus Growth Funds April 30, 2007 95
Notes to Financial Statements (unaudited) (continued)
(average daily net assets during the previous month for the Base Fee, versus average daily net assets during the performance measurement period for the Performance Adjustment). Performance of the Fund is calculated net of expenses whereas the Fund's benchmark index does not have any expenses. Reinvestment of dividends and distributions are included in calculating both the performance of the Fund and the Fund's benchmark index. The Base Fee is calculated and accrued daily. The Performance Adjustment is calculated monthly in arrears and is accrued evenly each day throughout the month. The investment fee is paid monthly in arrears.
The Fund's prospectus and statement of additional information contains additional information about performance-based fees. The amount shown as Advisory fees on the Statement of Operations reflects the base fee plus/minus any performance adjustment.
Until at least March 1, 2008, provided that Janus Capital remains investment adviser to the Funds, Janus Capital has agreed to reimburse Janus Triton Fund by the amount, if any, that 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 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, 2007, Janus Services reimbursed the following Funds as a result of dilutions caused by incorrectly processed shareholder activity as indicated in the table below.
Fund | |||||||
Growth | |||||||
Janus Fund | $ | 5,810 | |||||
Janus Enterprise Fund | 8,407 | ||||||
Janus Orion Fund | 3,248 | ||||||
Janus Research Fund(1) | 14,514 | ||||||
Janus Triton Fund | 4,152 | ||||||
Janus Twenty Fund | 41,226 | ||||||
Janus Venture Fund | 8,516 | ||||||
Specialty Growth | |||||||
Janus Global Life Sciences Fund | 2,791 | ||||||
Janus Global Technology Fund | 4,978 |
(1) Formerly named Janus Mercury Fund.
During the fiscal year ended October 31, 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 | |||||||
Growth | |||||||
Janus Fund | $ | 47,274 | |||||
Janus Research(1) | 415 | ||||||
Janus Twenty Fund | 16,951 | ||||||
Special Growth | |||||||
Janus Global Technology Fund | 3,607 |
(1) Formerly named Janus Mercury Fund.
During the fiscal year ended October 31, 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.
Fund | |||||||
Growth | |||||||
Janus Twenty Fund | $ | 227 |
For the six-month period ended April 30, 2007, Janus Capital assumed $18,145 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 7. 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 Global 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 on July 31, 2004. These non-recurring costs and costs assumed by Janus Capital are shown on the Statement of Operations.
Effective January 1, 2006, the Board of Trustees 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 with the Plan. No deferred fees were paid to any Trustee under the Plan during the six-month period ended April 30, 2007.
96 Janus Growth Funds April 30, 2007
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. Total compensation of $59,081 was paid by the Trust during the six-month period ended April 30, 2007. 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 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. Effective with purchases on and after May 15, 2007, a 2% redemption fee may be imposed on shares held for 90 days or less. This fee is paid to the Funds rather than Janus Capital, and is designed to deter excessive short-term trading and to offset the brokerage commissions, market impact, and other costs associated with changes in the Funds' asset levels and cash flow due to short-term money movements in and out of the Funds. The redemption fee is accounted for as an addition to Paid-in Capital. Total redemption fees received by Janus Global Life Sciences Fund and Janus Global Technology Fund were $33,029 and $29,260, respectively, for the six-month period ended April 30, 2007.
The Funds may invest in money market funds, including funds managed by Janus Capital. During the six-month period ended April 30, 2007, 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 4/30/07 | ||||||||||||||||
Janus Institutional Cash Management Fund – Institutional Shares | |||||||||||||||||||
Growth | |||||||||||||||||||
Janus Fund | $ | 170,765,545 | $ | 125,588,250 | $ | 491,554 | $ | 45,177,295 | |||||||||||
Janus Enterprise Fund | 13,247,452 | 1,475,053 | 101,711 | 11,772,399 | |||||||||||||||
Janus Orion Fund | 5,463,557 | 4,574,707 | 5,752 | 888,850 | |||||||||||||||
Janus Research Fund(1) | 62,739,457 | 55,227,016 | 113,754 | 7,512,441 | |||||||||||||||
Janus Triton Fund | 2,928,485 | 2,669,659 | 3,717 | 258,826 | |||||||||||||||
Janus Twenty Fund | 278,081,109 | 194,001,027 | 1,509,740 | 84,080,082 | |||||||||||||||
Janus Venture Fund | 3,741,045 | 3,741,045 | 1,422 | – | |||||||||||||||
Specialty Growth | |||||||||||||||||||
Janus Global Life Sciences Fund | 588,711 | 588,711 | 2,249 | – | |||||||||||||||
Janus Global Technology Fund | 17,184,668 | 17,173,668 | 32,691 | 11,000 | |||||||||||||||
$ | 554,740,029 | $ | 405,039,136 | $ | 2,262,590 | $ | 149,700,893 | ||||||||||||
Janus Institutional Cash Reserves Fund | |||||||||||||||||||
Growth | |||||||||||||||||||
Janus Fund | $ | 246,646,598 | $ | 252,766,598 | $ | 418,617 | $ | – | |||||||||||
Janus Enterprise Fund | 49,821,332 | 53,216,332 | 87,324 | – | |||||||||||||||
Janus Orion Fund | 231,631,663 | 268,913,253 | 2,226,116 | – | |||||||||||||||
Janus Research Fund(1) | 105,284,606 | 136,463,606 | 278,634 | – | |||||||||||||||
Janus Triton Fund | 7,637,990 | 7,637,990 | 20,724 | – | |||||||||||||||
Janus Twenty Fund | 309,378,860 | 309,378,860 | 1,525,223 | – | |||||||||||||||
Janus Venture Fund | 19,617,579 | 25,800,579 | 17,736 | – | |||||||||||||||
Specialty Growth | |||||||||||||||||||
Janus Global Life Sciences Fund | 9,369,000 | 9,369,000 | 7,200 | – | |||||||||||||||
Janus Global Technology Fund | 47,868,602 | 48,226,112 | 100,895 | – | |||||||||||||||
$ | 1,027,256,230 | $ | 1,111,772,330 | $ | 4,682,469 | $ | – | ||||||||||||
Janus Institutional Money Market Fund – Institutional Shares | |||||||||||||||||||
Growth | |||||||||||||||||||
Janus Fund | $ | 397,670,450 | $ | 268,766,750 | $ | 353,807 | $ | 128,903,700 | |||||||||||
Janus Enterprise Fund | 70,616,547 | 66,363,947 | 78,255 | 4,252,600 | |||||||||||||||
Janus Orion Fund | 106,711,456 | 22,211,750 | 286,319 | 84,499,706 | |||||||||||||||
Janus Research Fund(1) | 255,262,925 | 153,071,983 | 299,680 | 102,190,942 | |||||||||||||||
Janus Triton Fund | 9,547,653 | 8,794,759 | 10,942 | 752,894 | |||||||||||||||
Janus Twenty Fund | 364,208,973 | 355,315,973 | 320,856 | 8,893,000 | |||||||||||||||
Janus Venture Fund | 13,950,859 | 13,950,859 | 3,328 | – | |||||||||||||||
Specialty Growth | |||||||||||||||||||
Janus Global Life Sciences Fund | 43,638,927 | 43,638,927 | 41,605 | – | |||||||||||||||
Janus Global Technology Fund | 50,539,436 | 23,913,436 | 31,122 | 26,626,000 | |||||||||||||||
$ | 1,312,147,226 | $ | 956,028,384 | $ | 1,425,914 | $ | 356,118,842 |
(1) Formerly named Janus Mercury Fund.
Janus Growth Funds April 30, 2007 97
Notes to Financial Statements (unaudited) (continued)
Purchases | Sales Shares/Cost | Dividend Shares/Cost | Value Income | at 4/30/07 | |||||||||||||||
Janus Money Market Fund – Institutional Shares | |||||||||||||||||||
Growth | |||||||||||||||||||
Janus Fund | $ | 599,957,059 | $ | 678,850,664 | $ | 3,126,265 | $ | – | |||||||||||
Janus Enterprise Fund | 112,593,068 | 120,788,352 | 233,964 | – | |||||||||||||||
Janus Orion Fund | 362,665,288 | 381,257,189 | 3,171,171 | – | |||||||||||||||
Janus Research Fund(1) | 333,251,985 | 333,251,985 | 470,205 | – | |||||||||||||||
Janus Triton Fund | 15,909,508 | 16,661,508 | 48,625 | – | |||||||||||||||
Janus Twenty Fund | 860,181,362 | 1,082,862,378 | 3,695,208 | – | |||||||||||||||
Janus Venture Fund | 35,166,003 | 35,166,003 | 19,299 | – | |||||||||||||||
Specialty Growth | |||||||||||||||||||
Janus Global Life Sciences Fund | 30,549,000 | 30,549,000 | 12,621 | – | |||||||||||||||
Janus Global Technology Fund | 79,645,662 | 100,361,892 | 138,214 | – | |||||||||||||||
$ | 2,429,918,935 | $ | 2,779,748,971 | $ | 10,915,572 | $ | – |
(1) Formerly named Janus Mercury Fund.
3. PURCHASES AND SALES OF INVESTMENT SECURITIES
For the six-month period ended April 30, 2007, 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 | $ | 1,615,066,778 | $ | 2,210,733,060 | $ | 144,916,560 | $ | 147,715,836 | |||||||||||
Janus Enterprise Fund | 311,625,644 | 382,496,575 | – | – | |||||||||||||||
Janus Orion Fund | 869,893,371 | 586,602,335 | – | – | |||||||||||||||
Janus Research Fund(1) | 1,287,038,480 | 1,490,300,679 | – | – | |||||||||||||||
Janus Triton Fund | 48,895,333 | 56,617,443 | – | – | |||||||||||||||
Janus Twenty Fund | 1,614,662,832 | 2,031,108,805 | – | – | |||||||||||||||
Janus Venture Fund | 394,718,567 | 444,161,545 | – | – | |||||||||||||||
Specialty Growth | |||||||||||||||||||
Janus Global Life Sciences Fund | 248,609,863 | 432,192,398 | – | – | |||||||||||||||
Janus Global Technology Fund | 261,533,703 | 382,720,453 | 2,169,138 | 2,211,703 |
(1) Formerly named Janus Mercury Fund.
4. FEDERAL INCOME TAX
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, 2007 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 | $ | 9,646,562,914 | $ | 3,106,455,573 | $ | (118,579,370 | ) | $ | 2,987,876,203 | ||||||||||
Janus Enterprise Fund | 1,541,542,499 | 708,944,260 | (16,716,811 | ) | 692,227,449 | ||||||||||||||
Janus Orion Fund | 3,163,104,887 | 955,293,615 | (38,441,428 | ) | 916,852,187 | ||||||||||||||
Janus Research Fund(1) | 4,109,654,215 | 804,859,761 | (74,182,039 | ) | 730,677,722 | ||||||||||||||
Janus Triton Fund | 105,411,618 | 15,559,316 | (5,189,568 | ) | 10,369,748 | ||||||||||||||
Janus Twenty Fund | 6,866,969,883 | 3,341,729,763 | (28,310,401 | ) | 3,313,419,362 | ||||||||||||||
Janus Venture Fund | 1,480,025,699 | 508,707,952 | (52,850,979 | ) | 455,856,973 | ||||||||||||||
Specialty Growth | |||||||||||||||||||
Janus Global Life Sciences Fund | 786,994,336 | 247,655,385 | (8,123,620 | ) | 239,531,765 | ||||||||||||||
Janus Global Technology Fund | 749,970,457 | 246,365,920 | (22,161,202 | ) | 224,204,718 |
(1) Formerly named Janus Mercury Fund.
98 Janus Growth Funds April 30, 2007
Accumulated capital losses noted below represent net capital loss carryovers, as of October 31, 2006, 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.
The capital loss carryforward in Janus Orion Fund is subject to annual limitations under applicable tax laws and may expire unused as a result of the Janus Olympus Fund acquisition during the current year. Due to these limitations, $43,227,226 of the carryforward will not be available for use. As a result, this amount has been reclassified to paid-in-capital.
Capital Loss Carryover Expiration Schedule
For the fiscal year ended October 31, 2006
Fund | October 31, 2008 | October 31, 2009 | October 31, 2010 | October 31, 2011 | Accumulated Capital Losses | ||||||||||||||||||
Growth | |||||||||||||||||||||||
Janus Fund(1) | $ | – | $ | (2,127,412,256 | ) | $ | (2,692,706,418 | ) | $ | (569,521,625 | ) | $ | (5,389,640,299 | ) | |||||||||
Janus Enterprise Fund(1) | – | (2,911,281,962 | ) | (1,180,687,781 | ) | (35,756,979 | ) | (4,127,726,722 | ) | ||||||||||||||
Janus Orion Fund(1) | (2,429,227 | ) | (1,253,924,298 | ) | (584,074,251 | ) | – | (1,840,427,776 | ) | ||||||||||||||
Janus Research Fund(2) | – | (2,099,946,853 | ) | (2,677,021,633 | ) | (222,598,721 | ) | (4,999,567,207 | ) | ||||||||||||||
Janus Triton Fund | – | – | – | – | – | ||||||||||||||||||
Janus Twenty Fund | – | (1,101,301,817 | ) | (117,584,500 | ) | (643,606,306 | ) | (1,862,492,623 | ) | ||||||||||||||
Janus Venture Fund(1) | – | (37,742,360 | ) | (12,580,788 | ) | – | (50,323,148 | ) | |||||||||||||||
Specialty Growth | |||||||||||||||||||||||
Janus Global Life Sciences Fund | – | (400,156,274 | ) | (251,753,591 | ) | (103,237,607 | ) | (755,147,472 | ) | ||||||||||||||
Janus Global Technology Fund | – | (1,611,126,564 | ) | (857,178,929 | ) | (83,082,507 | ) | (2,551,388,000 | ) |
(1) Capital loss carryovers subject to annual limitations.
(2) Formerly named Janus Mercury Fund.
During the year ended October 31, 2006, the following capital loss carryovers were utilized by the Funds as indicated in the table below.
Fund | Capital Loss Carryover Utilized | ||||||
Growth | |||||||
Janus Fund | $ | 1,310,085,732 | |||||
Janus Enterprise Fund | 237,032,537 | ||||||
Janus Orion Fund | 73,742,430 | ||||||
Janus Research Fund(1) | 1,154,206,383 | ||||||
Janus Twenty Fund | 1,413,251,004 | ||||||
Janus Venture Fund | 12,580,786 | ||||||
Specialty Growth | |||||||
Janus Global Life Sciences Fund | 160,320,913 | ||||||
Janus Global Technology Fund | 222,350,382 |
(1) Formerly named Janus Mercury Fund.
5. CAPITAL SHARE TRANSACTIONS
For the six-month period ended April 30, 2007 (unaudited) and the fiscal year ended October 31, 2006 | Janus Fund | Janus Enterprise Fund | Janus Orion Fund | Janus Research Fund(1) | |||||||||||||||||||||||||||||||
(all numbers in thousands) | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |||||||||||||||||||||||||||
Transactions in Fund Shares | |||||||||||||||||||||||||||||||||||
Shares sold | 20,100 | 52,166 | 3,183 | 5,056 | 30,460 | 62,151 | 8,127 | 17,604 | |||||||||||||||||||||||||||
Shares issued in connection with acquisition* | N/A | N/A | N/A | N/A | N/A | 223,865 | N/A | N/A | |||||||||||||||||||||||||||
Reinvested dividends and distributions | 1,317 | 301 | – | – | 763 | 711 | 112 | 513 | |||||||||||||||||||||||||||
Shares repurchased | (38,974 | ) | (99,767 | ) | (4,581 | ) | (10,005 | ) | (35,140 | ) | (33,686 | ) | (16,161 | ) | (60,742 | ) | |||||||||||||||||||
Net Increase/(Decrease) in Capital Share Transactions | (17,557 | ) | (47,300 | ) | (1,398 | ) | (4,949 | ) | (3,917 | ) | 253,041 | (7,922 | ) | (42,625 | ) | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | 408,577 | 455,877 | 38,198 | 43,147 | 341,728 | 88,687 | 160,257 | 202,882 | |||||||||||||||||||||||||||
Shares Outstanding, End of Period | 391,020 | 408,577 | 36,800 | 38,198 | 337,811 | 341,728 | 152,335 | 160,257 |
* See Note 6 in Notes to Financial Statements.
(1) Formerly named Janus Mercury Fund.
Janus Growth Funds April 30, 2007 99
Notes to Financial Statements (unaudited) (continued)
For the six-month period ended April 30, 2007 (unaudited) and the fiscal year ended October 31, 2006 | Janus Triton Fund | Janus Twenty Fund | Janus Venture Fund | ||||||||||||||||||||||||
(all numbers in thousands) | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |||||||||||||||||||||
Transactions in Fund Shares | |||||||||||||||||||||||||||
Shares sold | 2,086 | 12,642 | 4,100 | 8,663 | 452 | 508 | |||||||||||||||||||||
Reinvested dividends and distributions | 113 | 17 | 1,014 | 399 | 2,442 | 1,108 | |||||||||||||||||||||
Shares repurchased | (2,662 | ) | (7,576 | ) | (12,203 | ) | (29,839 | ) | (1,161 | ) | (3,106 | ) | |||||||||||||||
Net Increase/(Decrease) in Capital Share Transactions | (463 | ) | 5,083 | (7,089 | ) | (20,777 | ) | 1,733 | (1,490 | ) | |||||||||||||||||
Shares Outstanding, Beginning of Period | 8,554 | 3,471 | 181,036 | 201,813 | 21,270 | 22,760 | |||||||||||||||||||||
Shares Outstanding, End of Period | 8,091 | 8,554 | 173,947 | 181,036 | 23,003 | 21,270 |
For the six-month period ended April 30, 2007 (unaudited) and the fiscal year ended October 31, 2006 | Janus Global Life Sciences Fund | Janus Global Technology Fund | |||||||||||||||||
(all numbers in thousands) | 2007 | 2006 | 2007 | 2006 | |||||||||||||||
Transactions in Fund Shares | |||||||||||||||||||
Shares sold | 805 | 2,820 | 1,546 | 4,705 | |||||||||||||||
Reinvested dividends and distributions | – | – | – | 59 | |||||||||||||||
Shares repurchased | (9,178 | ) | (13,690 | ) | (11,792 | ) | (21,283 | ) | |||||||||||
Net Increase/(Decrease) in Capital Share Transactions | (8,373 | ) | (10,870 | ) | (10,246 | ) | (16,519 | ) | |||||||||||
Shares Outstanding, Beginning of Period | 48,498 | 59,368 | 74,773 | 91,292 | |||||||||||||||
Shares Outstanding, End of Period | 40,125 | 48,498 | 64,527 | 74,773 |
6. FUND ACQUISITIONS
On October 31, 2006, Janus Orion Fund acquired all of the net assets of Janus Olympus Fund pursuant to a plan of reorganization approved by the Trustees of Janus Investment Fund. The reorganization was accomplished by a tax-free exchange of shares of Janus Olympus Fund in the amount of 63,425,023 shares (valued at $2,124,928,540) for the 223,865,207 shares of Janus Orion Fund, including $411,818,312 of unrealized appreciation. The aggregate net assets of Janus Orion Fund and Janus Olympus Fund immediately before the reorganization were $1,119,129,656 and $2,124,928,540, respectively. The aggregate net assets immediately after the reorganization were $3,244,058,196.
7. PENDING LEGAL MATTERS
In the fall of 2003, the Securities and Exchange Commission ("SEC"), the Office of the New York State Attorney General ("NYAG"), the Colorado Attorney General ("COAG"), and the Colorado Division of Securities ("CDS") announced that they were investigating alleged frequent trading practices in the mutual fund industry. On August 18, 2004, Janus Capital announced that it had reached final settlements with the SEC, the NYAG, the COAG, and the CDS related to such regulators' investigations into Janus Capital's frequent trading arrangements.
A number of civil lawsuits were brought against Janus Capital and certain of its affiliates, the Janus funds, and related entities and individuals based on allegations similar to those announced by the above regulators and were filed in several state and federal jurisdictions. Such lawsuits alleged a variety of theories for recovery including, but not limited to, the federal securities laws, other federal statutes (including ERISA), and various common law doctrines. The Judicial Panel on Multidistrict Litigation transferred these actions to the U.S. District Court for the District of Maryland (the "Court") for coordinated proceedings. On September 29, 2004, five consolidated amended complaints were filed with the Court that generally include: (i) claims by a putative class of investors in certain Janus funds asserting claims on behalf of the investor class (Marini, et al. v. Janus Investment Fund, et al., U.S. District Court, District of Maryland, Case No. 04-CV-00497); (ii) derivative claims by investors in certain Janus funds ostensibly on behalf of such funds (Steinberg et al. v. Janus Capital Management, LLC et al., U.S. District Court, District of Maryland, Case No. 04-CV-00518); (iii) claims on behalf of participants in the Janus 401(k) plan (Wangberger v. Janus Capital Group Inc., 401(k) Advisory Committee, et al., U.S. District Court, District of Maryland, Case No. JFM-05-2711); (iv) claims brought on behalf of shareholde rs of Janus Capital Group Inc. ("JCGI") on a derivative basis against the Board of Directors of JCGI (Chasen v. Whiston, et al., U.S. District Court, District of Maryland, Case No. 04-MD-00855); and (v) claims by a putative class of shareholders of JCGI asserting claims on behalf of the shareholders (Wiggins, et al. v. Janus Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No. 04-CV-00818). Each of the five complaints initially named JCGI and/or Janus Capital as a defendant. In addition, the following were also named as defendants in one or more of the
100 Janus Growth Funds April 30, 2007
actions: Janus Investment Fund ("JIF"), Janus Aspen Series ("JAS"), Janus Adviser Series ("JAD"), Janus Distributors LLC, Enhanced Investment Technologies, LLC ("INTECH"), Bay Isle Financial LLC ("Bay Isle"), Perkins, Wolf, McDonnell and Company, LLC ("Perkins"), the Advisory Committee of the Janus 401(k) plan, and the current or former directors of JCGI.
On August 25, 2005, the Court entered orders dismissing most of the claims asserted against Janus Capital and its affiliates by fund investors in the Marini and Steinberg cases (actions (i) and (ii) above) except certain claims under Section 10(b) of the Securities Exchange Act of 1934 and under Section 36(b) of the Investment Company Act of 1940, as amended (the "1940 Act"). On August 15, 2006, the Wangberger complaint in the 401(k) plan class action (action (iii) above) was dismissed by the district court with prejudice; the plaintiff appealed that dismissal decision to the United States Court of Appeals for the Fourth Circuit. That appeal is still pending. The Court also dismissed the Chasen lawsuit (action (iv) above) against JCGI's Board of Directors without leave to amend. Finally, a Motion to Dismiss the Wiggins suit (action (v) above) was granted and the matter was dismissed in May 2007.
In addition to the lawsuits described above, the Auditor of the State of West Virginia ("Auditor"), in his capacity as securities commissioner, has initiated administrative proceedings against many of the defendants in the market timing cases (including JCGI and Janus Capital) and, as a part of its relief, is seeking disgorgement and other monetary relief based on similar market timing allegations (In the Matter of Janus Capital Group Inc. et al., Before the Securities Commissioner, State of West Virginia, Summary Order No. 05-1320). The respondents in these proceedings collectively sought a Writ of Prohibition in state court, which was denied. Their subsequent Petition for Appeal was also denied. Consequently, in September 2006, JCGI and Janus Capital filed their answer to the Auditor's summa ry order instituting proceedings and requested a hearing. A hearing is currently scheduled for June 28, 2007. JCGI and Janus Capital, as well as other similarly situated defendants, continue to challenge the statutory authority of the Auditor to bring such an action.
In addition to the "market timing" actions described above, Janus Capital was 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 (Walter Sins, et al. v. Janus Capital Management LLC, U.S. District Court, District of Colorado, Case No. 04-CV-01647-WDM-MEH; Michael Fleisher, et al. v. Janus Capital Management, LLC, 04-CV-02395-MSK-CBS). The action was filed in 2004 by fund investors asserting breach of fiduciary duty under Section 36(b) of the 1940 Act. The plaintiffs sought declaratory and injunctive relief and an unspecified amount of damages. In April 2007, the parties in the litigation jointly filed a Stipulation Regarding Dismissal of Claims With Prejudice ("Stipulation of Dismissal"), and on May 2, 2007, the Colorado District Court approved the Stipulation of Dismissal and dismissed the case.
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 (Pfeiffer v. Credit Suisse First Boston aka In re Initial Public Offering Antitrust Litigation, U.S. District Court, Southern District of New York, Case No. 01-CV-2014). 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. In March 2006, the defendants, including Janus Capital, filed a Petition for a Writ of Certiorari with the U.S. Supreme Court to review the decision of the U. S. Court of Appeals. The U.S. Supreme Court granted the Petition for a Writ of Certiorari and heard argument on the matter on March 27, 2007. The parties are now awaiting a decision on the matter from the U.S. Supreme Court.
Additional lawsuits may be filed against certain of the Janus funds, Janus Capital, and related parties in the future. Janus Capital does not currently believe that these pending actions will materially affect its ability to continue providing services it has agreed to provide to the Janus funds.
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to their portfolio securities is available: (i) without charge, upon request, by calling 1-800-525-3713 (toll free); (ii) on the Funds' website at www.janus.com/proxyvoting; and (iii) on the SEC's website at http://www.sec.gov. Additionally, information regarding each Fund's proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through www.janus.com and from the SEC's website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Funds file their complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Funds' Form N-Q: (i) is available on the SEC's website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-3713 (toll free).
Approval of Advisory Agreements During the Period
The Trustees of Janus Investment Fund, more than eighty-five percent of whom have never been affiliated with the adviser ("Independent Trustees"), oversee the management of each of the Funds and, as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the three Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each of the Funds, the Trustees received and reviewed a substantial amount of information provided by Janus Capital and the respective subadvisers in response to requests of the Independent Trustees and their independent legal counsel. They also received and reviewed a considerable amount of information and analysis provided 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 independent legal counsel.
At a meeting held on December 20, 2006, based on their evaluation of the information provided by Janus Capital, the subadvisers and the independent fee consultant and other information, the Trustees determined that the overall arrangements between each Fund and Janus Capital were fair and reasonable in light of the nature, extent and quality of the services provided by Janus Capital, its affiliates and the subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting all of the Trustees unanimously approved the continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, for the period from February 1, 2007 through February 1, 2008 (January 1, 2007 through January 1, 2008 for INTECH Risk-Managed Stock Fund and Janus Global Research Fund), subject to earlier termination as provided in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees' determination to approve the continuation of the agreements are discussed separately below.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective and strategy of each Fund and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, 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 Truste e committees, communicating with shareholders and overseeing the activities of other service providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
The Trustees concluded that: the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements; that, taking into account steps taken to address a small portion of
102 Janus Growth Funds April 30, 2007
the Funds whose performance lagged that of the median of their peers for certain periods, the quality of those services had been consistent with or superior to quality norms in the industry; and that the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the 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 performance results of each Fund over various time periods. They reviewed information comparing each Fund's performance with the performance of comparable funds and peer groups identified by Lipper Inc., an independent provider of investment company data, and with the Fund's benchmark index. They concluded that the performance of most Funds was good to very good under current market conditions. Although the performance of some Funds lagged that of the median of their peers for certain periods, the Trustees also concluded that Janus Capital had taken appropriate steps to address those instances of under-performance and that the more recent performance of most of those Funds had been improving.
Costs of Services Provided
The Trustees examined information on the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by Lipper. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and administrative) fees for most of the Funds, in some cases after contractual expense limitations, was below the mean management fee rate of the respective peer group of funds selected by Lipper.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent and the competitive market for mutual funds in different distribution channels. They concluded that the compensation methodology provided a good alignment of the interests of the portfolio managers with the interests of Fund shareholders.
The Trustees also reviewed management fees charged by Janus Capital to its separate account clients and to its subadvised funds (for which Janus Capital provides only services related to portfolio management). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fees for Funds having a similar strategy, the Trustees noted that, under the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administrative services, oversight of the Funds' other service providers, Trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the spread between the average fee rates charged to the Funds and the fee rates that Janus Capital charged to its separate account clients was significantly smaller than the average spread for such fee rates of other advisers, based on publicly available data and research conducted by their independent fee consultant.
In considering the fees charged by Janus Capital, the Trustees noted that, in addition to the previously approved performance fee structure for Janus Worldwide Fund and certain other Funds that would become operative in February 2007, they also had negotiated with Janus Capital a temporary waiver of a portion of the investment advisory fee paid by Janus Worldwide Fund to Janus Capital to provide for a possible reduction in the rate of advisory fee payable by the Fund for the period July 1, 2006 through January 31, 2007 if the investment performance of the Fund should lag that of its benchmark index performance over the applicable performance measurement period.
The Trustees reviewed information on the profitability of Janus Capital and its affiliates of their relationships with each Fund, as well as an explanation of the methodology utilized in allocating various expenses among the Funds and other clients. The Trustees also reviewed the financial statements of Janus Capital's parent company and its corporate structure. In their review, the Trustees considered whether Janus Capital and each subadviser receive adequate incentives to manage the Funds effectively. The Trustees recognized that profitability comparisons among investment advisers are difficult because very little comparative information is publicly available and profitability of any adviser is affected by numerous factors, including the organizational structure of the particular manager, the types of funds and other accounts it manages, possible other lines of business, the methodology for allocating expenses and the adviser's capital str ucture and cost of capital. However, based on the information available and taking those factors into account, the Trustees concluded that Janus Capital's
Janus Growth Funds April 30, 2007 103
Additional Information (unaudited) (continued)
profitability with respect to each Fund in relation to the services rendered was not unreasonable.
The Trustees concluded that the management fees and other compensation payable by each Fund to Janus Capital and its affiliates, as well as the fees paid by Janus Capital 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 and the subadviser charge 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 and any subadviser, the investment performance of the Fund and any expense limitations agreed to by Janus Capital.
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of the Funds increase. They noted that, although most Funds pay advisory fees at a fixed rate as a percentage of net assets, without any breakpoints, the management fee rate paid by each Fund, after any contractual expense limitations, was below the mean management fee rate of the Fund's peer group selected by Lipper; and, for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of many of the Funds declined in the past few years, these Funds benefited from having advisory fee rates that remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for several Funds that will cause the effective rate of advisor y fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through lower charges of third-party service providers based on the combined scale of all of the Funds. Based on all of the information they reviewed, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of economies of scale at the current asset level of the Fund.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and that the transfer agent receives compensation directly from the non-money market Funds for services provided. The Trustees also considered Janus Capital's past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary research products and services benefiting those Funds and/or other clients of Janus Capital, as well as Janus Capital's prior agreement not to use any Fund's brokerage transactions to obtain third party research products or services. The Trustees concluded that Janus Capital's use of "soft" commission dollars of a Fund to obtain proprietary research products and services was consistent with regulatory requirements and guidelines and was likely to benefit the Funds. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates pursuant to the agreements and the fees to be paid by each Fund therefor the Funds and Janus Capital may potentially benefit from their relationship with each other in other ways. They 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 any Fund could attract other business to Janus Capital or other Janus funds and that the success of Janus Capital could enhance Janus Capital's ability to serve the Funds.
After full consideration of the above factors as well as other factors, all of the Trustees, including all of the Independent Trustees, concluded that the proposed continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, was in the best interest of the respective Funds and their shareholders.
104 Janus Growth Funds April 30, 2007
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.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized and unsubsidized ratios for the past fiscal year. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting a Fund's unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and/or Janus Services, LLC and reflects a Fund's subsidized expense ratio. Both the total annual fund operating expenses ratio and net annual fund operating expenses ratio are based on average net assets as of the fiscal year ended October 31, 2006. The ratios also include expenses indirectly incurred by the Fund as a result of investing in other investment companies or pooled investments, which are not reflected in the "Financial Highlights" of this report. As a result, these ratios may be higher or lower than those shown in the "Financial Highlights" in this report. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
2. SCHEDULES OF INVESTMENTS
Following the performance overview section is each Fund's Schedule of Investments. This schedule reports the industry concentrations and types of securities held in each Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
Funds that invest in foreign securities also provide a summary of investments by country. This summary reports the Fund's exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country in which the company is incorporated.
2A. FORWARD CURRENCY CONTRACTS
A table listing forward currency contracts follows each Fund's Schedule of Investments (if applicable). Forward currency contracts are agreements to deliver or receive a preset amount of currency at a future date. Forward currency contracts are used to hedge against foreign currency risk in the Fund's long-term holdings.
The table provides the name of the foreign currency, the settlement date of the contract, the amount of the contract, the value of the currency in U.S. dollars and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the change in currency exchange rates from the time the contract was opened to the last day of the reporting period.
2B. FUTURES
A table listing futures contracts follows each Fund's Schedule of Investments (if applicable). Futures contracts are contracts that obligate the buyer to receive and the seller to deliver an instrument or money at a specified price on a specified date. Futures are used to hedge against adverse movements in securities prices, currency risk or interest rates.
The table provides the name of the contract, number of contracts held, the expiration date, the principal amount, value and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the marked-to-market amount for the last day of the reporting period.
2C. OPTIONS
A table listing option 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.
Janus Growth Funds April 30, 2007 105
Explanations of Charts, Tables and
Financial Statements (unaudited) (continued)
3. STATEMENT OF ASSETS AND LIABILITIES
This statement is often referred to as the "balance sheet." It lists the assets and liabilities of the Funds on the last day of the reporting period.
The Funds' assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on stocks owned and the receivable for Fund shares sold to investors but not yet settled. The Funds' liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled "Net Assets Consist of" breaks down the components of the Funds' net assets. Because Funds must distribute substantially all earnings, you'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.
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 applicable 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 a 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, expense ratios and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income per share, which comprises dividends and interest income earned on securities held by the Fund. Following is the total of gains/(losses), realized and unrealized. Dividends and distributions are then subtracted to arrive at the NAV per share at the end of the period.
The next line reflects the average annual total return reported the last day of the period.
Also included are the expense ratios, or the percentage of 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.
106 Janus Growth Funds April 30, 2007
The Funds' expenses may be reduced through expense reduction arrangements. These arrangements may include the use of balance credits or transfer agent fee offsets. The Statement of Operations reflects total expenses before any such offset, the amount of the offset and the net expenses. The 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 figure is the portfolio turnover rate, which measures the buying and selling activity in a Fund. Portfolio turnover is affected by market conditions, changes in the 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 Growth Funds April 30, 2007 107
Notes
108 Janus Growth Funds April 30, 2007
Notes
Janus Growth Funds April 30, 2007 109
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 (6/07)
C-0507-333 111-24-103 06-07
2007 Semiannual Report
Janus Core, Risk-Managed and Value Funds
Core
Janus Balanced Fund
Janus Contrarian Fund
Janus Fundamental Equity Fund
Janus Growth and Income Fund
Risk-Managed
INTECH Risk-Managed Stock Fund
Value
Janus Mid Cap Value Fund
Janus Small Cap Value Fund
Look Inside. . .
• Portfolio management perspective
• Investment strategy behind your fund
• Fund performance, characteristics and holdings
Janus Core, Risk-Managed and Value Funds
As of April 30, 2007 (unaudited)
Two footnote definitions were inadvertently excluded from the Notes to Schedules of Investments. Please use the definitions below, in addition to the definitions listed on page 77, when reading the Schedules of Investments.
‡ Rate is subject to change. Rate shown reflects current rate.
ß Security is illiquid.
Table of Contents
Janus Core, Risk-Managed and Value Funds
Co-Chief Investment Officers' Letter to Shareholders | 1 | ||||||
Useful Information About Your Fund Report | 4 | ||||||
Management Commentaries and Schedules of Investments | |||||||
Janus Balanced Fund | 5 | ||||||
Janus Contrarian Fund | 14 | ||||||
Janus Fundamental Equity Fund | 22 | ||||||
Janus Growth and Income Fund | 30 | ||||||
INTECH Risk-Managed Stock Fund | 39 | ||||||
Janus Mid Cap Value Fund | 48 | ||||||
Janus Small Cap Value Fund | 56 | ||||||
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 | 91 | ||||||
Explanations of Charts, Tables and Financial Statements | 94 | ||||||
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.
Co–Chief Investment Officers' Letter to the Shareholders
Jonathan Coleman
Co-Chief Investment Officer
Gibson Smith
Co-Chief Investment Officer
Dear Shareholders,
We would like to thank you for your investment in the Janus Funds. Your support is what drives us in our quest to deliver strong, consistent fund performance.
Major Market Themes
Equity markets delivered healthy gains during the six months ended April 30, 2007, amid continued evidence of strong U.S. economic growth with modest inflation. Despite a brief bout of market volatility in late February and early March, markets rebounded quickly on hopes of monetary easing by the Federal Reserve (Fed). While U.S. corporate profit growth showed signs of slowing, robust mergers and acquisitions (M&A) and private equity transactions continued to provide valuation support to equities in the U.S. and around the globe.
Continued Strong Performance
We are pleased to report that several fund managers continued to deliver strong performance compared to their peers. For the one-year period ended April 30, 2007, 81% of Janus' retail funds ranked within Lipper's top two quartiles based on total returns. For the three-year period, 68% of our retail funds achieved first- or second- quartile Lipper rankings, and 67% ranked in Lipper's top two quartiles for the five-year period. (See complete rankings on page 3).
Investment Team Depth
We're proud of the depth we've built in our investment team over the past few years. Recently, we said farewell to several long-term Janus portfolio managers who announced their retirements. In transitioning the leadership of their portfolios, we're confident that our investment team bench strength will ensure smooth transitions.
Management of Janus Global Life Sciences Fund will reside in the capable hands of Andy Acker. Barney Wilson will assume sole portfolio management responsibilities for Janus Global Technology Fund. In addition, Gibson Smith and Darrell Watters, with more than 33 years of combined investment experience, will co-manage Janus Flexible Bond Fund. Jason Groom, a seasoned fixed-income professional with 13 years of investment experience, will assume co-portfolio management responsibilities with Darrell Watters for Janus Short-Term Bond Fund, previously managed by Gibson Smith. Lastly, Craig Jacobson will join Eric Thorderson as Co-Portfolio Manager of all Janus money market funds, with the exception of Janus Tax-Exempt Money Market Fund, for which he will be sole Portfolio Manager.
It's important to note that we will continue to focus on the same investment objectives and employ the same in-depth, fundamental analysis and company-by-company approach to portfolio construction that are Janus hallmarks. We believe all of these individuals possess the skills and experience necessary to lead your Funds to strong performance.
Outlook
Looking ahead, with most U.S. equity indexes near all-time highs at the end of the period, we will closely monitor several fundamental factors for directional cues. First, despite the weakness in the U.S. housing sector and the associated credit quality issues in the subprime mortgage market, the U.S. unemployment rate was near historic lows. We intend to watch the labor market closely for any sign of a slowdown that could impact consumer sentiment and economic growth. Similarly, we plan to monitor the higher-quality prime mortgage market and other areas of consumer lending for any indication of credit quality deterioration.
Second, U.S. corporate profit growth has experienced double-digit gains for several years, which, combined with strong liquidity from corporate M&A and private equity transactions, has supported higher equity valuations. We will continue to watch both the future path of corporate earnings and the overall liquidity in the markets to determine whether current valuations can be sustained.
In summary, while there are both positive and negative factors that could influence the markets in the coming months, we view the fundamental economic outlook as positive. While inflationary concerns and questions about the strength of consumer spending abound, we feel valuations for equities are reasonable by historic standards. In fact, as overall economic growth slows, investors could place an increasing premium on the shares of companies with strong growth prospects. We believe Janus' fundamental research can be beneficial in
Janus Core, Risk-Managed and Value Funds April 30, 2007 1
Continued
such an environment. Regardless of the macroeconomic climate, we remain dedicated to rewarding your confidence in Janus with strong, consistent fund performance.
Sincerely,
Jonathan Coleman
Co-Chief Investment Officer
Gibson Smith
Co-Chief Investment Officer
2 Janus Core, Risk-Managed and Value Funds April 30, 2007
Lipper Rankings (unaudited)
Lipper Rankings – Based on total return as of 4/30/07 | |||||||||||||||||||||||||||||||||||||||||||||||
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 Fund | |||||||||||||||||||||||||||||||||||||||||||||||
(Inception Date) | |||||||||||||||||||||||||||||||||||||||||||||||
Janus Fund (2/70) | Large-Cap Growth Funds | 5 | 34 / 723 | 19 | 117 / 620 | 29 | 147 / 506 | 38 | 74 / 195 | 10 | 2 / 20 | ||||||||||||||||||||||||||||||||||||
Janus Enterprise Fund(1) (9/92) | Mid-Cap Growth Funds | 5 | 26 / 628 | 11 | 53 / 499 | 6 | 21 / 393 | 45 | 72 / 161 | 34 | 17 / 49 | ||||||||||||||||||||||||||||||||||||
Janus Orion Fund (6/00) | Multi-Cap Growth Funds | 13 | 62 / 497 | 2 | 5 / 395 | 5 | 13 / 317 | N/A | N/A | 29 | 66 / 232 | ||||||||||||||||||||||||||||||||||||
Janus Research Fund(1)(2) (5/93) | Large-Cap Growth Funds | 1 | 1 / 723 | 2 | 9 / 620 | 3 | 11 / 506 | 1 | 1 / 195 | 2 | 1 / 81 | ||||||||||||||||||||||||||||||||||||
Janus Triton Fund(1) (2/05) | Small-Cap Growth Funds | 33 | 178 / 536 | N/A | N/A | N/A | N/A | N/A | N/A | 4 | 21 / 476 | ||||||||||||||||||||||||||||||||||||
Janus Twenty Fund* (4/85) | Large-Cap Growth Funds | 2 | 9 / 723 | 1 | 3 / 620 | 1 | 3 / 506 | 3 | 4 / 195 | 3 | 1 / 40 | ||||||||||||||||||||||||||||||||||||
Janus Venture Fund* (4/85) | Small-Cap Growth Funds | 3 | 11 / 536 | 7 | 29 / 437 | 10 | 33 / 364 | 27 | 39 / 147 | 10 | 1 / 10 | ||||||||||||||||||||||||||||||||||||
Janus Global Life Sciences Fund (12/98) | Health/Biotechnology Funds | 79 | 134 / 169 | 50 | 75 / 151 | 56 | 74 / 132 | N/A | N/A | 38 | 18 / 47 | ||||||||||||||||||||||||||||||||||||
Janus Global Technology Fund (12/98) | Science & Technology Funds | 33 | 94 / 287 | 32 | 83 / 260 | 52 | 125 / 241 | N/A | N/A | 27 | 20 / 75 | ||||||||||||||||||||||||||||||||||||
Janus Balanced Fund(1) (9/92) | Mixed-Asset Target Allocation Moderate Funds | 25 | 102 / 423 | 17 | 53 / 319 | 39 | 81 / 212 | 6 | 6 / 113 | 4 | 1 / 29 | ||||||||||||||||||||||||||||||||||||
Janus Contrarian Fund (2/00) | Multi-Cap Core Funds | 1 | 2 / 897 | 1 | 1 / 661 | 1 | 2 / 479 | N/A | N/A | 11 | 31 / 323 | ||||||||||||||||||||||||||||||||||||
Janus Fundamental Equity Fund(1) (6/96) | Large-Cap Core Funds | 90 | 713 / 795 | 1 | 10 / 670 | 7 | 41 / 567 | 1 | 2 / 255 | 1 | 1 / 212 | ||||||||||||||||||||||||||||||||||||
Janus Growth and Income Fund(1) (5/91) | Large-Cap Core Funds | 97 | 772 / 795 | 12 | 79 / 670 | 28 | 159 / 567 | 4 | 9 / 255 | 6 | 4 / 76 | ||||||||||||||||||||||||||||||||||||
INTECH Risk-Managed Stock Fund (2/03) | Multi-Cap Core Funds | 49 | 434 / 897 | 22 | 144 / 661 | N/A | N/A | N/A | N/A | 32 | 172 / 548 | ||||||||||||||||||||||||||||||||||||
Janus Mid Cap Value Fund - Inv(1)(3) (8/98) | Mid-Cap Value Funds | 43 | 128 / 300 | 63 | 147 / 232 | 41 | 73 / 178 | N/A | N/A | 6 | 4 / 68 | ||||||||||||||||||||||||||||||||||||
Janus Small Cap Value Fund - Inv*(3) (10/87) | Small-Cap Core Funds | 14 | 98 / 713 | 74 | 410 / 556 | 81 | 350 / 432 | 11 | 16 / 145 | 16 | 21 / 132 | ||||||||||||||||||||||||||||||||||||
Janus Federal Tax-Exempt Fund(1) (5/93) | General Municipal Debt Funds | 56 | 135 / 241 | 71 | 164 / 230 | 72 | 155 / 216 | 79 | 109 / 137 | 80 | 55 / 68 | ||||||||||||||||||||||||||||||||||||
Janus Flexible Bond Fund(1) (7/87) | Intermediate Investment Grade Debt Funds | 38 | 198 / 530 | 52 | 226 / 442 | 18 | 65 / 380 | 31 | 54 / 174 | 24 | 6 / 24 | ||||||||||||||||||||||||||||||||||||
Janus High-Yield Fund(1) (12/95) | High Current Yield Funds | 40 | 174 / 443 | 39 | 146 / 378 | 68 | 209 / 308 | 16 | 20 / 127 | 5 | 5 / 99 | ||||||||||||||||||||||||||||||||||||
Janus Short-Term Bond Fund(1) (9/92) | Short Investment Grade Debt Funds | 53 | 126 / 237 | 51 | 101 / 199 | 46 | 65 / 142 | 41 | 32 / 79 | 54 | 13 / 24 | ||||||||||||||||||||||||||||||||||||
Janus Global Opportunities Fund(1) (6/01) | Global Funds | 33 | 132 / 399 | 94 | 281 / 301 | 85 | 198 / 234 | N/A | N/A | 24 | 49 / 209 | ||||||||||||||||||||||||||||||||||||
Janus Global Research Fund(1)(4) (2/05) | Multi-Cap Growth Funds | 4 | 15 / 497 | N/A | N/A | N/A | N/A | N/A | N/A | 1 | 4 / 424 | ||||||||||||||||||||||||||||||||||||
Janus Overseas Fund(1) (5/94) | International Funds | 1 | 1 / 987 | 1 | 1 / 803 | 2 | 12 / 661 | 4 | 11 / 280 | 1 | 1 / 117 | ||||||||||||||||||||||||||||||||||||
Janus Worldwide Fund(1) (5/91) | Global Funds | 7 | 25 / 399 | 90 | 270 / 301 | 96 | 225 / 234 | 69 | 66 / 96 | 32 | 5 / 15 | ||||||||||||||||||||||||||||||||||||
Janus Smart Portfolio - Growth (12/05) | Mixed-Asset Target Allocation Growth Funds | 11 | 64 / 609 | N/A | N/A | N/A | N/A | N/A | N/A | 7 | 41 / 598 | ||||||||||||||||||||||||||||||||||||
Janus Smart Portfolio - Moderate (12/05) | Mixed-Asset Target Allocation Moderate Funds | 18 | 73 / 423 | N/A | N/A | N/A | N/A | N/A | N/A | 9 | 35 / 417 | ||||||||||||||||||||||||||||||||||||
Janus Smart Portfolio - Conservative (12/05) | Mixed-Asset Target Allocation Conservative Funds | 8 | 28 / 365 | N/A | N/A | N/A | N/A | N/A | N/A | 4 | 11 / 344 |
(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)Formerly named Janus Mercury Fund.
(3)Rating is for the Investor Share class only; other classes may have different performance characteristics.
(4)Formerly named Janus Research Fund.
*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, 2007 3
Useful Information About Your Fund Report
Management Commentaries
The Management Commentaries in this report include valuable insight from the Funds' managers as well as statistical information to help you understand how your Fund's performance and characteristics stack up against those of comparable indices.
Please keep in mind that the opinions expressed by the Funds' managers in the Management Commentaries are just that: opinions. They are a reflection of their best judgment at the time this report was compiled, which was April 30, 2007. 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 Management Commentary within this Semiannual Report. Please refer to this information when reviewing the Expense Example for each Fund.
Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including redemption fees (where applicable) (and any related exchange fees) and (2) ongoing costs, including management fees, administrative services fees (where applicable), and other Fund expenses. The example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the six-month period from November 1, 2006 to April 30, 2007.
Actual Expenses
The first line of the table in each example provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of the table in each example provides information about hypothetical account values and hypothetical expenses based upon the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
By written agreement, Janus Capital Management LLC ("Janus Capital") has agreed to waive the transfer agency fees payable to certain limits for the Institutional Shares of Janus Mid Cap Value Fund and Janus Small Cap Value Fund until at least March 1, 2008. 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.
4 Janus Core, Risk-Managed and Value Funds April 30, 2007
Janus Balanced Fund (unaudited)
Ticker: JABAX
Marc Pinto
co-portfolio manager
Gibson Smith
co-portfolio manager
Performance Overview
Janus Balanced Fund advanced 7.24% for the six-month period ending April 30, 2007, compared with a 5.85% return by the Balanced Index, an internally calculated secondary benchmark. The Balanced Index is composed of a 55% weighting in the S&P 500® Index, the Fund's primary benchmark, and a 45% weighting in the Lehman Brothers Government/Credit Index, the Fund's other secondary benchmark, which returned 8.60% and 2.47%, respectively.
Economic Update
Equity markets delivered healthy gains during the period amid continued evidence of strong U.S. economic growth with modest inflation. After a brief period of market volatility in late February and early March, markets rebounded quickly on hopes of monetary easing by the Federal Reserve (Fed). While U.S. corporate profit growth showed signs of slowing, robust mergers and acquisitions (M&A) and private equity transactions continued to provide key valuation support to equities in the U.S. and around the globe.
Fund Snapshot
The fund combines the growth potential of stocks with the balance of bonds.
With most U.S. equity indexes near all-time highs at the end of the period, we closely monitored several fundamental factors for directional cues. First, despite the weakness in the U.S. housing sector and the associated credit quality issues in the subprime mortgage market, the U.S. unemployment rate was near historical lows at period end, mitigating the impact of the housing slowdown on consumer spending and the overall U.S. economy. Second, U.S. corporate profit growth experienced double-digit gains for several years, which, combined with strong liquidity from corporate M&A and private equity transactions, supported higher equity valuations.
Stock Selection Benefited Performance
Fund performance for the period reflected solid stock selection, particularly in the financials, consumer discretionary and consumer staples sectors. The Fund's exposure to the both cyclical and non-cyclical consumer related companies proved particularly favorable.
Exposure to consumer staples company Reckitt Benckiser, a company that manufactures and distributes household cleaning products, boosted performance as the company benefited from strong earnings including top-line growth, margin expansion and solid cash flows.
Another standout was our investment in Canadian company Potash Corporation of Saskatchewan. The company currently holds much of the world's excess supply of potash, an important ingredient in fertilizer. In the fourth quarter of 2006, Potash's leading market position in potash reserves was enhanced following the flood of a competitor's mine.
The Fund also benefited from select positions in the healthcare sector. Notably, Swiss drug maker Roche Holding continued to capitalize on healthy demand for its cancer drugs. We remain constructive on the long-term sales growth potential tied to the expanded European roll-out of key cancer drug, Avastin.
Select Healthcare and Industrial Stocks Detracted from Results
On a negative note, Fund performance was hindered by weakness in its industrial holdings. While negative performance was limited to only four stocks, the Fund's sector position failed to keep pace with the benchmark allocation. Relative results were also dampened by the Fund's lack of exposure to the strong-performing utilities and telecommunications services sectors.
Among individual equity holdings, healthcare company Amgen was pressured by concerns over reimbursements for anemia drug Epogen, as well as from the possibility that the Food and Drug Administration (FDA) might require more stringent warning labeling for Epogen and Amgen's other anemia treatment, Aranesp.
While the Fund's technology stocks generally outperformed during the period, our investment in Samsung Electronics proved a negative. The South Korean semiconductor manufacturer faced worries over demand and pricing trends in its flash memory business.
Janus Core, Risk-Managed and Value Funds April 30, 2007 5
Janus Balanced Fund (unaudited)
Fixed-Income Investments Provided Mixed Results
In an environment where riskier spread-oriented investments outperformed, a conservative posture within the fixed-income holdings hurt Fund performance. In particular, the Fund's exposure to Treasury securities proved detrimental as investors generally favored lower-quality, higher-yield corporate debt as well as mortgage backed securities.
Nonetheless, specific corporate credit holdings, including El Paso, HCA and Owens-Illinois, supported performance. Additionally, the Fund benefited from an out-of-benchmark allocation to short-term bank loans.
Outlook
We intend to watch the labor market closely for any sign of a slowdown, which could impact consumer sentiment and economic growth. Similarly, we plan to monitor the higher-quality prime mortgage market and other areas of consumer lending for any indication of credit quality deterioration. We will continue to watch both the future path of corporate earnings and the overall liquidity in the markets in an effort to determine whether current valuations can be sustained.
Going forward, we remain constructive on the outlook for the financial markets, but caution that uncertainty over the strength of the economy and the Fed response could contribute to short-term volatility. In this environment, we will continue to take a balanced approach to investing, using our rigorous fundamental research-driven approach to seek to uncover the best opportunities in both the equity and fixed-income markets.
Janus Balanced Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Reckitt Benckiser PLC | 0.79 | % | |||||
Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 0.63 | % | |||||
Syngenta A.G. | 0.54 | % | |||||
JP Morgan Chase & Co. | 0.53 | % | |||||
Roche Holding A.G. | 0.53 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Amgem, Inc. | (0.14 | )% | |||||
Melco International Development, Ltd. | (0.12 | )% | |||||
Samsung Electronics Company, Ltd. | (0.09 | )% | |||||
FedEx Corp. | (0.06 | )% | |||||
Johnson & Johnson | (0.05 | )% |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | S&P 500® Index Weighting | |||||||||||||
Consumer Staples | 2.20 | % | 13.16 | % | 9.34 | % | |||||||||
Financials | 1.90 | % | 18.96 | % | 21.95 | % | |||||||||
Health Care | 1.75 | % | 15.15 | % | 12.12 | % | |||||||||
Information Technology | 1.68 | % | 15.22 | % | 15.18 | % | |||||||||
Consumer Discretionary | 1.56 | % | 12.57 | % | 10.61 | % |
5 Lowest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | S&P 500® Index Weighting | |||||||||||||
Utilities | 0.00 | % | 0.00 | % | 3.54 | % | |||||||||
Telecommunication Services | 0.00 | % | 0.00 | % | 3.52 | % | |||||||||
Energy | 0.55 | % | 7.16 | % | 9.82 | % | |||||||||
Industrials | 0.57 | % | 11.36 | % | 10.88 | % | |||||||||
Materials | 1.53 | % | 5.82 | % | 3.04 | % |
6 Janus Core, Risk-Managed and Value Funds April 30, 2007
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2007
Merrill Lynch & Company, Inc. Finance - Investment Bankers/Brokers | 3.2 | % | |||||
Roche Holding A.G. Medical - Drugs | 3.0 | % | |||||
JP Morgan Chase & Co. Finance - Investment Bankers/Brokers | 2.7 | % | |||||
General Electric Co. Diversified Operations | 2.2 | % | |||||
Altria Group, Inc. Tobacco | 2.0 | % | |||||
13.1 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2007
Emerging markets comprised 1.7% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2007 | As of October 31, 2006 | ||||||
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Janus Core, Risk-Managed and Value Funds April 30, 2007 7
Janus Balanced Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | Total Annual Fund Operating Expenses | ||||||||||||||||||||||
Janus Balanced Fund | 7.24 | % | 11.91 | % | 7.73 | % | 9.84 | % | 11.37 | % | 0.82 | % | |||||||||||||||
S&P 500® Index | 8.60 | % | 15.24 | % | 8.54 | % | 8.05 | % | 11.14 | % | |||||||||||||||||
Lehman Brothers Government/Credit Index | 2.47 | % | 7.34 | % | 5.29 | % | 6.42 | % | 6.42 | % | |||||||||||||||||
Balanced Index | 5.85 | % | 11.69 | % | 7.32 | % | 7.67 | % | 9.27 | % | |||||||||||||||||
Lipper Quartile | – | 1 | st | 2 | nd | 1 | st | 1 | st | ||||||||||||||||||
Lipper Ranking - based on total return for Mixed-Asset Target Allocation Moderate Funds | – | 102/423 | 81/212 | 6/113 | 1/29 |
Visit janus.com to view current performance
and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
Funds that invest in bonds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds owned by the Fund. Unlike owning individual bonds, there are ongoing fees and expenses associated with owning shares of bond funds. The return of principal is not guaranteed due to net asset value fluctuation that is caused by changes in the price of specific bonds held in the Fund and selling of bonds within the Fund by the portfolio manager.
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.
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.
September 3, 1992 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – September 1, 1992.
8 Janus Core, Risk-Managed and Value Funds April 30, 2007
(unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,072.40 | $ | 4.11 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.83 | $ | 4.01 |
*Expenses are equal to the annualized expense ratio of 0.80%, 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, 2007 9
Janus Balanced Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Common Stock - 60.2% | |||||||||||
Advertising Sales - 0.8% | |||||||||||
336,670 | Lamar Advertising Co.* | $ | 20,314,668 | ||||||||
Aerospace and Defense - 0.4% | |||||||||||
1,206,930 | BAE Systems PLC** | 10,953,891 | |||||||||
Agricultural Chemicals - 3.8% | |||||||||||
192,175 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 34,499,256 | |||||||||
196,616 | Syngenta A.G. | 39,108,653 | |||||||||
651,605 | Syngenta A.G. (ADR)*,# | 25,868,719 | |||||||||
99,476,628 | |||||||||||
Audio and Video Products - 0.5% | |||||||||||
232,985 | Sony Corp. (ADR)** | 12,408,781 | |||||||||
Automotive - Cars and Light Trucks - 0.8% | |||||||||||
321,949 | BMW A.G.**,# | 19,942,091 | |||||||||
Beverages - Non-Alcoholic - 0.7% | |||||||||||
293,290 | PepsiCo, Inc.# | 19,383,536 | |||||||||
Brewery - 0.6% | |||||||||||
211,985 | Interbrew S.A.**,# | 16,505,317 | |||||||||
Building Products - Air and Heating - 0.3% | |||||||||||
262,585 | Daikin Industries, Ltd.**,# | 8,877,485 | |||||||||
Casino Hotels - 0.3% | |||||||||||
104,135 | Harrah's Entertainment, Inc. | 8,882,716 | |||||||||
Computers - 1.9% | |||||||||||
310,050 | Apple, Inc.* | 30,942,990 | |||||||||
463,525 | Hewlett-Packard Co. | 19,532,944 | |||||||||
50,475,934 | |||||||||||
Computers - Memory Devices - 1.1% | |||||||||||
1,907,020 | EMC Corp.*,# | 28,948,564 | |||||||||
Cosmetics and Toiletries - 2.1% | |||||||||||
357,525 | Avon Products, Inc. | 14,229,495 | |||||||||
617,210 | Procter & Gamble Co. | 39,692,775 | |||||||||
53,922,270 | |||||||||||
Diversified Operations - 2.4% | |||||||||||
1,557,055 | General Electric Co. | 57,393,047 | |||||||||
3,431,000 | Melco International Development, Ltd. | 6,646,598 | |||||||||
64,039,645 | |||||||||||
Electric Products - Miscellaneous - 0.2% | |||||||||||
127,150 | Emerson Electric Co. | 5,974,779 | |||||||||
Electronic Components - Semiconductors - 2.8% | |||||||||||
47,128 | Samsung Electronics Company, Ltd. | 28,858,623 | |||||||||
1,277,095 | Texas Instruments, Inc. | 43,893,755 | |||||||||
72,752,378 | |||||||||||
Enterprise Software/Services - 1.0% | |||||||||||
1,396,625 | Oracle Corp.* | 26,256,550 | |||||||||
Finance - Consumer Loans - 1.5% | |||||||||||
714,180 | SLM Corp. | 38,444,309 | |||||||||
Finance - Credit Card - 1.3% | |||||||||||
581,835 | American Express Co. | 35,299,929 | |||||||||
Finance - Investment Bankers/Brokers - 6.8% | |||||||||||
1,348,625 | JP Morgan Chase & Co. | 70,263,362 | |||||||||
933,550 | Merrill Lynch & Company, Inc. | 84,234,216 | |||||||||
364,030 | UBS A.G. (U.S. Shares) | 23,625,547 | |||||||||
178,123,125 |
Shares or Principal Amount | Value | ||||||||||
Finance - Mortgage Loan Banker - 1.1% | |||||||||||
492,670 | Fannie Mae | $ | 29,028,116 | ||||||||
Food - Diversified - 1.8% | |||||||||||
518,191 | Kraft Foods, Inc. - Class A | 17,343,853 | |||||||||
72,385 | Nestle S.A.# | 28,677,371 | |||||||||
46,021,224 | |||||||||||
Hotels and Motels - 2.1% | |||||||||||
525,605 | Marriott International, Inc. - Class A | 23,762,602 | |||||||||
461,480 | Starwood Hotels & Resorts Worldwide, Inc. | 30,928,390 | |||||||||
54,690,992 | |||||||||||
Industrial Automation and Robotics - 0.4% | |||||||||||
188,650 | Rockwell Automation, Inc.# | 11,232,221 | |||||||||
Machinery - General Industrial - 0.2% | |||||||||||
14,483,170 | Shanghai Electric Group Company, Ltd. | 6,175,844 | |||||||||
Medical - Biomedical and Genetic - 0.8% | |||||||||||
161,300 | Amgen, Inc.* | 10,345,782 | |||||||||
179,100 | Celgene Corp.* | 10,953,756 | |||||||||
21,299,538 | |||||||||||
Medical - Drugs - 5.2% | |||||||||||
233,440 | Merck & Company, Inc. | 12,008,154 | |||||||||
167,085 | Novartis A.G. (ADR) | 9,705,968 | |||||||||
231,670 | Pfizer, Inc. | 6,129,988 | |||||||||
418,245 | Roche Holding A.G.# | 78,897,780 | |||||||||
24,710 | Roche Holding A.G. (ADR) | 2,322,740 | |||||||||
285,079 | Sanofi-Aventis**,# | 26,177,923 | |||||||||
135,242,553 | |||||||||||
Medical Products - 0.3% | |||||||||||
23,630 | Nobel Biocare Holding A.G.# | 8,530,308 | |||||||||
Multimedia - 1.0% | |||||||||||
620,655 | News Corporation, Inc. - Class A | 13,896,465 | |||||||||
707,645 | Publishing & Broadcasting, Ltd. | 11,983,595 | |||||||||
25,880,060 | |||||||||||
Oil Companies - Exploration and Production - 1.4% | |||||||||||
720,950 | EnCana Corp. (U.S. Shares) | 37,813,828 | |||||||||
Oil Companies - Integrated - 2.7% | |||||||||||
666,350 | ConocoPhillips | 46,211,372 | |||||||||
83,755 | Exxon Mobil Corp.# | 6,648,472 | |||||||||
228,287 | Suncor Energy, Inc. | 18,316,026 | |||||||||
71,175,870 | |||||||||||
Optical Supplies - 0.3% | |||||||||||
50,695 | Alcon, Inc. (U.S. Shares) | 6,840,276 | |||||||||
Real Estate Operating/Development - 0.4% | |||||||||||
4,255,015 | Guangzhou R&F Properties Company, Ltd.# | 10,210,548 | |||||||||
Retail - Consumer Electronics - 0.5% | |||||||||||
130,350 | Yamada Denki Company, Ltd.** | 12,010,731 | |||||||||
Retail - Drug Store - 1.0% | |||||||||||
743,872 | CVS/Caremark Corp. | 26,957,921 | |||||||||
Retail - Regional Department Stores - 1.2% | |||||||||||
706,525 | Federated Department Stores, Inc.# | 31,030,578 | |||||||||
Soap and Cleaning Preparations - 1.8% | |||||||||||
871,475 | Reckitt Benckiser PLC** | 47,753,483 | |||||||||
Telecommunication Equipment - Fiber Optics - 0.7% | |||||||||||
764,325 | Corning, Inc.* | 18,129,789 | |||||||||
Therapeutics - 1.2% | |||||||||||
380,715 | Gilead Sciences, Inc.* | 31,112,030 |
See Notes to Schedules of Investments and Financial Statements.
10 Janus Core, Risk-Managed and Value Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Tobacco - 2.0% | |||||||||||
748,805 | Altria Group, Inc. | $ | 51,607,641 | ||||||||
Transportation - Railroad - 2.3% | |||||||||||
815,759 | Canadian National Railway Co. (U.S. Shares) | 40,983,732 | |||||||||
170,435 | Union Pacific Corp. | 19,472,199 | |||||||||
60,455,931 | |||||||||||
Transportation - Services - 0.3% | |||||||||||
86,915 | FedEx Corp. | 9,164,318 | |||||||||
Web Portals/Internet Service Providers - 1.5% | |||||||||||
14,915 | Google, Inc. - Class A* | 7,030,633 | |||||||||
1,137,045 | Yahoo!, Inc.* | 31,882,742 | |||||||||
38,913,375 | |||||||||||
Wireless Equipment - 0.7% | |||||||||||
393,995 | QUALCOMM, Inc. | 17,256,981 | |||||||||
Total Common Stock (cost $1,135,254,878) | 1,579,516,752 | ||||||||||
Corporate Bonds - 7.4% | |||||||||||
Automotive - Cars and Light Trucks - 0.1% | |||||||||||
$ | 2,770,000 | General Motors Nova Financial Corp., 6.85% company guaranteed notes, due 10/15/08 | 2,752,688 | ||||||||
Building - Residential and Commercial - 0% | |||||||||||
1,455,000 | Beazer Homes USA, Inc., 6.875% company guaranteed notes, due 7/15/15 | 1,338,600 | |||||||||
Cable Television - 0.8% | |||||||||||
Comcast Corp.: | |||||||||||
3,821,000 | 5.66%, company guaranteed notes due 7/14/09‡ | 3,826,842 | |||||||||
4,600,000 | 6.50%, company guaranteed notes due 1/15/17 | 4,884,906 | |||||||||
8,007,000 | 6.45%, company guaranteed notes due 3/15/37 | 8,097,758 | |||||||||
CSC Holdings, Inc.: | |||||||||||
1,621,153 | 7.11%, bank loan, due 3/29/13‡ | 1,626,730 | |||||||||
1,282,737 | 7.11%, bank loan, due 3/29/13‡ | 1,287,150 | |||||||||
2,403,359 | 7.11%, bank loan, due 3/29/13‡ | 2,411,627 | |||||||||
310,045 | 7.11%, bank loan, due 3/29/13‡ | 311,112 | |||||||||
22,446,125 | |||||||||||
Commercial Banks - 0.2% | |||||||||||
5,490,000 | US Bank, 5.70% subordinated notes, due 12/15/08 | 5,538,125 | |||||||||
Containers - Metal and Glass - 0.7% | |||||||||||
9,006,000 | Owens-Brockway Glass Container, Inc. 8.875%, company guaranteed notes due 2/15/09 | 9,186,120 | |||||||||
7,945,000 | Owens-Illinois, Inc., 7.35% senior notes, due 5/15/08 | 8,024,450 | |||||||||
17,210,570 | |||||||||||
Diversified Financial Services - 0.2% | |||||||||||
3,815,000 | General Electric Capital Corp., 6.75% notes, due 3/15/32 | 4,343,690 | |||||||||
Electric - Integrated - 0.6% | |||||||||||
2,535,000 | CMS Energy Corp., 7.50% senior notes, due 1/15/09 | 2,607,881 | |||||||||
9,070,000 | MidAmerican Energy Holdings Co., 3.50% senior notes, due 5/15/08 | 8,907,874 | |||||||||
Pacific Gas and Electric Co.: | |||||||||||
770,000 | 3.60%, unsecured notes, due 3/1/09 | 750,059 | |||||||||
2,640,000 | 4.20%, unsecured notes, due 3/1/11 | 2,561,193 | |||||||||
14,827,007 |
Shares or Principal Amount | Value | ||||||||||
Finance - Auto Loans - 0.8% | |||||||||||
Ford Motor Credit Co.: | |||||||||||
$ | 4,342,000 | 9.81%, notes, due 4/15/12‡ | $ | 4,640,699 | |||||||
7,100,000 | 8.00%, senior unsecured notes due 12/15/16 | 6,943,616 | |||||||||
General Motors Acceptance Corp.: | |||||||||||
3,905,000 | 4.375%, notes, due 12/10/07 | 3,860,401 | |||||||||
6,162,000 | 7.25%, notes, due 3/2/11 | 6,264,899 | |||||||||
21,709,615 | |||||||||||
Finance - Consumer Loans - 0.3% | |||||||||||
7,315,000 | Household Finance Corp., 4.75% notes, due 5/15/09 | 7,262,661 | |||||||||
Finance - Investment Bankers/Brokers - 1.0% | |||||||||||
10,541,000 | Citigroup, Inc., 5.00% subordinated notes, due 9/15/14 | 10,314,222 | |||||||||
9,415,000 | Credit Suisse First Boston USA, Inc., 3.875% notes, due 1/15/09 | 9,241,096 | |||||||||
7,640,000 | JP Morgan Chase & Co., 3.80% senior unsecured notes, due 10/2/09 | 7,421,557 | |||||||||
26,976,875 | |||||||||||
Food - Diversified - 0.3% | |||||||||||
7,085,000 | Kellogg Co., 2.875% senior notes, due 6/1/08 | 6,899,571 | |||||||||
Independent Power Producer - 0% | |||||||||||
1,338,000 | NRG Energy, Inc., 7.375% company guaranteed notes, due 1/15/17 | 1,386,503 | |||||||||
Medical - Hospitals - 0.3% | |||||||||||
HCA, Inc.: | |||||||||||
3,025,418 | 7.60%, bank loan, due 11/18/13‡ | 3,057,033 | |||||||||
4,000,000 | 9.25%, secured notes due 11/15/16 (144A) | 4,360,000 | |||||||||
7,417,033 | |||||||||||
Non-Hazardous Waste Disposal - 0.1% | |||||||||||
Allied Waste Industries, Inc.: | |||||||||||
586,870 | 5.3219%, bank loan, due 1/15/12‡ | 590,538 | |||||||||
236,552 | 7.15%, bank loan, due 3/28/14‡ | 237,735 | |||||||||
275,978 | 7.12%, bank loan, due 3/28/14‡ | 277,357 | |||||||||
131,376 | 7.11%, bank loan, due 3/28/14‡ | 132,033 | |||||||||
216,840 | 7.10%, bank loan, due 3/28/14‡ | 217,924 | |||||||||
591,381 | 7.06%, bank loan, due 3/28/14‡ | 594,338 | |||||||||
2,049,925 | |||||||||||
Office Supplies and Forms - 0.1% | |||||||||||
2,318,000 | Acco Brands Corp., 7.625% company guaranteed notes, due 8/15/15 | 2,364,360 | |||||||||
Oil Companies - Exploration and Production - 0.1% | |||||||||||
Sabine Pass LNG L.P.: | |||||||||||
1,500,000 | 7.25%, secured notes due 11/30/13 (144A) | 1,533,750 | |||||||||
1,400,000 | 7.50%, secured notes, due 11/30/16 (144A) | 1,435,000 | |||||||||
2,968,750 | |||||||||||
Photo Equipment and Supplies - 0.1% | |||||||||||
Eastman Kodak Co.: | |||||||||||
1,153,585 | 7.57%, bank loan, due 10/18/12‡ | 1,154,704 | |||||||||
1,134,250 | 7.57%, bank loan, due 10/18/12‡ | 1,135,350 | |||||||||
2,290,054 |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2007 11
Janus Balanced Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Pipelines - 0.1% | |||||||||||
Kinder Morgan Energy Partners L.P.: | |||||||||||
$ | 1,174,000 | 6.00%, senior unsecured notes due 2/1/17 | $ | 1,192,911 | |||||||
710,000 | 6.50%, senior unsecured notes, due 2/1/37 | 717,404 | |||||||||
960,000 | Southern Natural Gas Co., 5.90% notes, due 4/1/17 (144A) | 965,664 | |||||||||
2,875,979 | |||||||||||
Publishing - Periodicals - 0.1% | |||||||||||
3,167,063 | Idearc, Inc., 7.35% bank loan, due 11/17/14‡ | 3,187,300 | |||||||||
Rental Auto/Equipment - 0.1% | |||||||||||
3,396,390 | Avis Budget Car Rental LLC, 6.61% bank loan, due 4/19/12‡ | 3,395,201 | |||||||||
Retail - Building Products - 0.1% | |||||||||||
2,597,000 | Home Depot, Inc., 5.875% senior unsecured notes, due 12/16/36 | 2,517,166 | |||||||||
Retail - Major Department Stores - 0.2% | |||||||||||
4,630,000 | May Department Stores Co., 4.80% unsecured notes, due 7/15/09 | 4,586,584 | |||||||||
Retail - Regional Department Stores - 0.1% | |||||||||||
Neiman Marcus Group, Inc.: | |||||||||||
1,771,684 | 7.34625%, bank loan, due 4/6/13‡ | 1,786,087 | |||||||||
26,443 | 7.34625%, bank loan, due 4/6/13‡ | 26,658 | |||||||||
1,812,745 | |||||||||||
Specified Purpose Acquisition Company - 0.3% | |||||||||||
7,088,000 | Duke Capital Corp., 6.75% senior notes due 2/15/32 | 7,289,703 | |||||||||
Telecommunication Services - 0.5% | |||||||||||
2,900,000 | Embarq Corp., 7.082% senior unsecured notes, due 6/1/16 | 2,996,103 | |||||||||
10,315,000 | Verizon Global Funding Corp., 4.00% senior unsecured notes, due 1/15/08 | 10,223,454 | |||||||||
13,219,557 | |||||||||||
Transportation - Railroad - 0.2% | |||||||||||
Canadian National Railway Co.: | |||||||||||
1,910,000 | 4.25%, notes, due 8/1/09 | 1,874,505 | |||||||||
3,825,000 | 6.25%, bonds, due 8/1/34 | 3,976,267 | |||||||||
5,850,772 | |||||||||||
Total Corporate Bonds (cost $193,627,976) | 194,517,159 | ||||||||||
Mortgage Backed Securities - 1.3% | |||||||||||
U.S. Government Agencies - 1.3% | |||||||||||
13,049,123 | Federal Home Loan Bank System, 5.27% due 12/28/12 | 13,133,942 | |||||||||
Freddie Mac: | |||||||||||
10,832,237 | 5.75%, due 12/15/18 | 10,926,913 | |||||||||
9,268,382 | 5.50%, due 12/15/19 | 9,304,826 | |||||||||
Total Mortgage Backed Securities (cost $33,211,576) | 33,365,681 | ||||||||||
Preferred Stock - 0.1% | |||||||||||
Metal - Diversified - 0.1% | |||||||||||
28,960 | Freeport-McMoRan Copper & Gold, Inc. convertible, 6.75% (cost $2,896,000) | 3,143,318 | |||||||||
U.S. Government Agencies - 1.2% | |||||||||||
Fannie Mae: | |||||||||||
$ | 6,242,000 | 5.25%, due 12/3/07 | 6,241,157 | ||||||||
2,580,000 | 2.50%, due 6/15/08# | 2,509,040 |
Shares or Principal Amount | Value | ||||||||||
Fannie Mae: (continued) | |||||||||||
$ | 4,110,000 | 5.25%, due 1/15/09 | $ | 4,133,801 | |||||||
880,000 | 6.375%, due 6/15/09# | 907,144 | |||||||||
6,723,000 | 5.375%, due 11/15/11# | 6,877,339 | |||||||||
Freddie Mac: | |||||||||||
5,270,000 | 5.75%, due 4/15/08# | 5,300,519 | |||||||||
2,155,000 | 5.75%, due 3/15/09# | 2,188,310 | |||||||||
2,040,000 | 7.00%, due 3/15/10 | 2,158,644 | |||||||||
Total U.S. Government Agencies (cost $30,611,966) | 30,315,954 | ||||||||||
U.S. Treasury Notes/Bonds - 25.7% | |||||||||||
11,328,303 | 3.625%, due 1/15/08#,ÇÇ | 11,472,558 | |||||||||
142,000 | 5.625%, due 5/15/08# | 143,004 | |||||||||
4,456,000 | 3.75%, due 5/15/08# | 4,403,954 | |||||||||
54,317,000 | 4.875%, due 5/31/08# | 54,308,527 | |||||||||
18,373,000 | 4.375%, due 11/15/08# | 18,273,951 | |||||||||
6,770,000 | 4.75%, due 12/31/08# | 6,774,759 | |||||||||
49,555,000 | 4.875%, due 1/31/09# | 49,713,725 | |||||||||
25,563,000 | 4.50%, due 2/15/09# | 25,489,097 | |||||||||
19,831,000 | 3.125%, due 4/15/09# | 19,282,554 | |||||||||
2,435,000 | 4.875%, due 5/15/09# | 2,447,745 | |||||||||
20,937,000 | 6.00%, due 8/15/09# | 21,577,379 | |||||||||
13,734,000 | 4.625%, due 11/15/09 | 13,756,002 | |||||||||
25,912,000 | 4.00%, due 4/15/10# | 25,538,504 | |||||||||
10,866,000 | 3.625%, due 6/15/10# | 10,590,101 | |||||||||
5,166,000 | 5.75%, due 8/15/10# | 5,362,148 | |||||||||
747,000 | 4.25%, due 10/15/10# | 741,252 | |||||||||
28,362,000 | 4.50%, due 11/15/10# | 28,369,743 | |||||||||
5,835,000 | 4.375%, due 12/15/10# | 5,810,837 | |||||||||
18,924,000 | 4.50%, due 2/28/11# | 18,920,310 | |||||||||
21,929,000 | 4.875%, due 4/30/11# | 22,215,963 | |||||||||
10,165,000 | 4.875%, due 7/31/11# | 10,304,769 | |||||||||
20,663,000 | 5.00%, due 8/15/11# | 21,073,037 | |||||||||
4,710,000 | 4.625%, due 8/31/11# | 4,731,892 | |||||||||
6,462,000 | 4.50%, due 9/30/11# | 6,458,213 | |||||||||
1,422,000 | 4.50%, due 11/30/11# | 1,421,444 | |||||||||
1,700,000 | 4.625%, due 2/29/12# | 1,707,703 | |||||||||
13,762,000 | 4.25%, due 8/15/14# | 13,483,003 | |||||||||
25,802,422 | 1.875%, due 7/15/15#,ÇÇ | 25,249,089 | |||||||||
21,841,000 | 4.25%, due 8/15/15# | 21,301,789 | |||||||||
14,930,000 | 4.50%, due 2/15/16# | 14,812,770 | |||||||||
35,827,000 | 5.125%, due 5/15/16# | 37,132,715 | |||||||||
15,822,000 | 7.25%, due 5/15/16# | 18,845,489 | |||||||||
4,649,520 | 2.50%, due 7/15/16#,ÇÇ | 4,774,113 | |||||||||
26,890,000 | 4.875%, due 8/15/16# | 27,383,674 | |||||||||
23,598,000 | 4.625%, due 11/15/16# | 23,583,251 | |||||||||
6,590,000 | 4.625%, due 2/15/17# | 6,586,909 | |||||||||
5,529,000 | 7.875%, due 2/15/21# | 7,206,709 | |||||||||
12,582,000 | 7.25%, due 8/15/22# | 15,798,274 | |||||||||
15,138,000 | 6.00%, due 2/15/26# | 17,187,549 | |||||||||
5,623,601 | 3.375%, due 4/15/32#,ÇÇ | 6,838,388 | |||||||||
45,203,000 | 4.50%, due 2/15/36# | 42,865,146 | |||||||||
235,000 | 4.75%, due 2/15/37# | 232,466 | |||||||||
Total U.S. Treasury Notes/Bonds (cost $671,282,349) | 674,170,505 | ||||||||||
Money Markets - 3.7% | |||||||||||
61,760,476 | Janus Institutional Cash Management Fund - Institutional Shares, 5.32% | 61,760,476 | |||||||||
36,023,510 | Janus Institutional Money Market Fund - Institutional Shares, 5.26% | 36,023,510 | |||||||||
Total Money Markets (cost $97,783,986) | 97,783,986 |
See Notes to Schedules of Investments and Financial Statements.
12 Janus Core, Risk-Managed and Value Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Other Securities - 24.2% | |||||||||||
9,039,293 | Foreign Government Bonds† | $ | 9,039,293 | ||||||||
623,071,926 | State Street Navigator Securities Lending Prime Portfolio† | 623,071,926 | |||||||||
3,727,594 | U.S. Treasury Notes/Bonds† | 3,727,594 | |||||||||
Total Other Securities (cost $635,838,813) | 635,838,813 | ||||||||||
Total Investments (total cost $2,800,507,544) – 123.8% | 3,248,652,168 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (23.8)% | (624,742,980 | ) | |||||||||
Net Assets – 100% | $ | 2,623,909,188 |
Summary of Investments by Country – (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Australia | $ | 11,983,595 | 0.4 | % | |||||||
Belgium | 16,505,317 | 0.5 | % | ||||||||
Canada | 140,216,302 | 4.3 | % | ||||||||
China | 16,386,392 | 0.5 | % | ||||||||
France | 26,177,923 | 0.8 | % | ||||||||
Germany | 19,942,091 | 0.6 | % | ||||||||
Hong Kong | 6,646,598 | 0.2 | % | ||||||||
Japan | 33,296,997 | 1.0 | % | ||||||||
South Korea | 28,858,623 | 0.9 | % | ||||||||
Switzerland | 223,577,362 | 6.9 | % | ||||||||
United Kingdom | 58,707,374 | 1.8 | % | ||||||||
United States†† | 2,666,353,594 | 82.1 | % | ||||||||
Total | $ | 3,248,652,168 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (59.5% 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 6/8/07 | 7,875,000 | $ | 15,742,349 | $ | (467,999 | ) | |||||||||
British Pound 8/15/07 | 1,275,000 | 2,546,921 | (90,569 | ) | |||||||||||
British Pound 10/17/07 | 2,750,000 | 5,488,292 | (180,793 | ) | |||||||||||
Euro 6/8/07 | 11,400,000 | 15,580,053 | (667,941 | ) | |||||||||||
Japanese Yen 8/15/07 | 485,000,000 | 4,116,754 | 97,486 | ||||||||||||
Total | $ | 43,474,369 | $ | (1,309,816 | ) |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2007 13
Janus Contrarian Fund (unaudited)
Ticker: JSVAX
David Decker
portfolio manager
Dear Shareholders,
Thank you for your continued investment in Janus Contrarian Fund. The Fund returned 22.86% during the six-month period ended April 30, 2007, outperforming the 8.60% gain of the S&P® 500 Index, the Fund's primary benchmark and the 12.50% return of the Morgan Stanley Capital International All Country World IndexSM , the Fund's secondary benchmark.
Fund Snapshot
This fund relies on detailed research to find out-of-favor companies believed to have unrecognized value.
Investment Philosophy and Process
The strategy of the Janus Contrarian Fund is to invest in high quality companies when we believe the intrinsic value is not properly reflected in the public markets. I believe that by taking a contrarian position and investing in companies that are out-of-favor or misunderstood, the relationship between risk and reward will often be in our favor due to the fact that much of the "negative news" has already been factored into the valuation of the company. In this way, when our analysis is wrong, the downside should not be severe because the valuation of the company did not have high embedded expectations. Conversely, when our analysis is correct, there should be an excellent opportunity to generate strong returns. The goal of the Fund is to build a portfolio of companies that offer this asymmetrically positive relationship between risk and reward, which in the long run should generate strong risk adjusted returns.
I think it is very important to remember that the intrinsic value of a company is a function of the future stream of cash flows over many years, not the earnings that a company may or may not generate in the next quarter or two. The analyst team and I are constantly looking for situations where we believe the market appears overly focused on short-term earnings as opposed to real intrinsic value (the real value of the company rather than its market price) thereby leaving the company undervalued.
As an example, in the October 31, 2006 letter to shareholders, I wrote about the recent purchase of Owens-Illinois (OI), which was added to the portfolio during a very difficult operating environment. With high energy and transportation costs affecting the near term performance of the company, as well as concerns about the health of its CEO, OI's market value had declined to a level that we believed offered a very compelling investment opportunity. Our analysis suggested that the downside was fully factored into the market price, giving us a very favorable risk-reward. Since the purchase last year, OI has appreciated significantly as its operating cost issues proved temporary and its new CEO, Al Stroucken, continued to build upon the operational improvements set in motion by previous CEO, Steve McCracken.
Impact of Private Equity
Over the past year we have witnessed an increasing number of private equity buyers taking companies private, and the Fund has been the beneficiary of some of these "take-out" transactions. As I will explain, however, for Janus Contrarian Fund investors the impact of this dynamic has been both good and bad. While the Fund has been the recipient of quick gains from some of these transactions, I am not in favor of high-quality companies being taken out of the public markets at valuations that I think do not fully reflect the true intrinsic value of the targeted company. In my view, we have seen this occur most often in management buyouts (MBOs), when the value transfer is substantially in favor of the buyer due to the fact that it is unlikely that management would overpay for the one asset it knows best: its own company. For this reason, while Janus Contrarian Fund has been the beneficiary of gains from companies we owned that were recently tak en private, it is not always something to celebrate.
An example of this was the recent take-out of Station Casinos, a company that has been a significant position in the Contrarian Fund for a number of years. While its recent take-out price appears fairly valued based on near-term earnings, I believe the long-term opportunity to create value is substantial. It is therefore unfortunate to see the company taken private irrespective of the premium we received for our shares.
We have also seen take-outs where we believe the buyer adequately compensated us for the value of our shares, and in those situations I am more comfortable with the take-out. As a recent example, SLM Corporation (Sallie Mae) was taken out at a 50% premium to its market price. I had built a substantial position in Sallie Mae prior to the take-out because our analysis suggested that, even with the political risks of student lending legislation, the valuation of the company relative to its long-term earnings power was very attractive. However, because risks remained, despite the fact that the take-out price of the company was slightly below what we believed the company was worth, we believe the buyers adequately compensated us given the risk they accepted.
14 Janus Core, Risk-Managed and Value Funds April 30, 2007
(unaudited)
The companies owned by the Janus Contrarian Fund are ones that I believe are capable of compounding long-term value and I will only sell them when we believe the market value is higher than what we believe to be its intrinsic value. Sometimes the unfortunate consequence of private equity transactions is that we must give up our shares at a value that doesn't always fully reflect our calculation of intrinsic value, even when we are not in favor of the deal. We will nonetheless always do our best to ensure that shareholders of Janus Contrarian Fund receive the best price in a transaction.
Performance
Despite the generally strong performance of the positions in the portfolio, there was weakness in our two Japanese financial companies, Mitsubishi UFJ Financial Group and Mizuho Financial Group, down about 16% and 21% respectively. I am extremely comfortable with both of these positions and I took the opportunity to increase the position size of both. The Indian market has also been weak recently due to rising interest rates as a result of increasing inflation. While I would not be surprised to see the Indian market continue to struggle during this period, I continue to feel very confident in the outlook for the positions that are owned in the Fund.
Conclusion
While my views of the market do not affect the process of investing for Janus Contrarian Fund, I have become increasingly concerned that the market is not discounting the potential negative impact of the collapse of the U.S. housing market as well as the subprime lending market, and would therefore expect a much more volatile and potentially lower return market in the future. The strategy of Janus Contrarian Fund has always been to buy companies anywhere in the world that we believe are undervalued. This is not to say that in weak markets the positions in the Fund will not go down (this was the case in March); however, we attempt to mitigate downside risk by owning companies that do not have high embedded expectations. Despite my continued concerns about potential economic risks, I am confident that the Fund owns high-quality and attractively valued companies that can create long-term economic value.
Thank you for your continued investment in the Janus Contrarian Fund.
Janus Contrarian Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Owens-Illinois, Inc. | 3.18 | % | |||||
Ceridian Corp. | 2.00 | % | |||||
Liberty Global, Inc. - Class A | 1.99 | % | |||||
NRG Energy, Inc. | 1.61 | % | |||||
CapitaLand, Ltd. | 1.59 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Mitsubishi UFJ Financial Group, Inc. | (0.34 | )% | |||||
Mizuho Financial Group, Inc. | (0.17 | )% | |||||
Weyerhaeuser Co. | (0.08 | )% | |||||
EMI Group PLC | (0.07 | )% | |||||
News Corporation, Inc. - Class A | (0.07 | )% |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | S&P 500® Index Weighting | |||||||||||||
Financials | 5.00 | % | 32.55 | % | 21.95 | % | |||||||||
Materials | 4.50 | % | 12.09 | % | 3.04 | % | |||||||||
Consumer Discretionary | 3.96 | % | 16.05 | % | 10.61 | % | |||||||||
Utilities | 2.47 | % | 7.25 | % | 3.54 | % | |||||||||
Energy | 2.38 | % | 8.98 | % | 9.82 | % |
5 Lowest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | S&P 500® Index Weighting | |||||||||||||
Telecommunication Services | 0.00 | % | 0.00 | % | 3.52 | % | |||||||||
Consumer Staples | 0.68 | % | 2.20 | % | 9.34 | % | |||||||||
Industrials | 1.06 | % | 7.64 | % | 10.88 | % | |||||||||
Health Care | 1.81 | % | 6.25 | % | 12.12 | % | |||||||||
Information Technology | 2.35 | % | 7.01 | % | 15.18 | % |
Janus Core, Risk-Managed and Value Funds April 30, 2007 15
Janus Contrarian Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2007
Liberty Global, Inc. - Class A Broadcast Services and Programming | 5.1 | % | |||||
Owens-Illinois, Inc. Containers - Metal and Glass | 4.9 | % | |||||
Coventry Health Care, Inc. Medical - HMO | 4.4 | % | |||||
St. Joe Co. Real Estate Operating/Development | 4.4 | % | |||||
Ceridian Corp. Computer Services | 4.2 | % | |||||
23.0 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2007
Emerging markets comprised 19.9% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2007 | As of October 31, 2006 | ||||||
![]() | ![]() | ||||||
16 Janus Core, Risk-Managed and Value Funds April 30, 2007
(unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Five Year | Since Inception* | Total Annual Fund Operating Expenses | |||||||||||||||||||
Janus Contrarian Fund | 22.86 | % | 26.95 | % | 18.34 | % | 11.89 | % | 0.95 | % | |||||||||||||
S&P 500® Index | 8.60 | % | 15.24 | % | 8.54 | % | 2.81 | % | |||||||||||||||
Morgan Stanley Capital International All Country World IndexSM | 12.50 | % | 17.11 | % | 12.86 | % | 4.33 | % | |||||||||||||||
Lipper Quartile | – | 1 | st | 1 | st | 1 | st | ||||||||||||||||
Lipper Ranking - based on total return for Multi-Cap Core Funds | – | 2/897 | 2/479 | 34/323 |
Visit janus.com to view current performance
and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The Fund has a performance-based management fee that adjusts upward or downward based on the Fund's performance relative to an approved benchmark index over a performance measurement period.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
The Fund held approximately 10.9% of its assets in Indian securities as of April 30, 2007 and 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.
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.
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.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – February 29, 2000
Janus Core, Risk-Managed and Value Funds April 30, 2007 17
Janus Contrarian Fund (unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,228.60 | $ | 5.25 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.08 | $ | 4.76 |
*Expenses are equal to the annualized expense ratio of 0.95% 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, 2007
Janus Contrarian Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares/Principal/Contract Amounts | Value | ||||||||||
Common Stock - 97.0% | |||||||||||
Airport Development - Maintenance - 0.5% | |||||||||||
10,583,003 | Macquarie Airports** | $ | 34,817,175 | ||||||||
Automotive - Cars and Light Trucks - 0.7% | |||||||||||
2,632,479 | Tata Motors, Ltd.** | 47,756,166 | |||||||||
Broadcast Services and Programming - 7.4% | |||||||||||
9,609,197 | Liberty Global, Inc. - Class A* | 344,874,081 | |||||||||
2,134,427 | Liberty Global, Inc. - Class C*,# | 71,311,206 | |||||||||
751,766 | Liberty Media Corp. - Capital*,# | 84,927,005 | |||||||||
501,112,292 | |||||||||||
Building and Construction Products - Miscellaneous - 0.6% | |||||||||||
923,125 | USG Corp.*,# | 42,602,219 | |||||||||
Building Products - Cement and Aggregate - 2.7% | |||||||||||
3,626,468 | Cemex S.A. de C.V. (ADR)*,# | 117,860,210 | |||||||||
22,593,908 | Gujarat Ambuja Cements, Ltd.** | 64,698,991 | |||||||||
182,559,201 | |||||||||||
Building Products - Wood - 1.3% | |||||||||||
3,263,665 | Masco Corp.# | 88,804,325 | |||||||||
Casino Hotels - 1.9% | |||||||||||
533,180 | Harrah's Entertainment, Inc.# | 45,480,254 | |||||||||
917,802 | Station Casinos, Inc. | 79,848,774 | |||||||||
125,329,028 | |||||||||||
Commercial Banks - 5.2% | |||||||||||
3,371,258 | ICICI Bank, Ltd.** | 70,189,815 | |||||||||
3,275,369 | ICICI Bank, Ltd. (ADR)**,# | 134,028,100 | |||||||||
9,066 | Mitsubishi UFJ Financial Group, Inc. | 94,781,754 | |||||||||
8,495 | Mizuho Financial Group, Inc. | 51,184,895 | |||||||||
350,184,564 | |||||||||||
Computer Services - 4.2% | |||||||||||
8,512,070 | Ceridian Corp.*,£ | 287,367,483 | |||||||||
Containers - Metal and Glass - 4.9% | |||||||||||
10,918,745 | Owens-Illinois, Inc.*,£ | 328,545,037 | |||||||||
Diversified Minerals - 1.2% | |||||||||||
2,049,830 | Companhia Vale do Rio Doce (ADR)** | 83,243,596 | |||||||||
Diversified Operations - 0.7% | |||||||||||
1,542,967 | Tyco International, Ltd. (U.S. Shares) | 50,347,013 | |||||||||
Electric - Generation - 2.3% | |||||||||||
44,119,070 | Datang International Power Generation Company, Ltd.# | 50,347,102 | |||||||||
26,452,259 | National Thermal Power Corporation, Ltd.** | 101,859,070 | |||||||||
152,206,172 | |||||||||||
Electric - Integrated - 3.0% | |||||||||||
61,389,600 | Tenaga Nasional Berhad | 203,302,711 | |||||||||
Engineering - Research and Development Services - 0.7% | |||||||||||
1,175,158 | Larsen & Toubro, Ltd.** | 48,193,169 | |||||||||
Enterprise Software/Services - 1.5% | |||||||||||
3,687,150 | CA, Inc. | 100,511,709 | |||||||||
Finance - Consumer Loans - 2.0% | |||||||||||
2,488,220 | SLM Corp.** | 133,940,883 | |||||||||
Finance - Investment Bankers/Brokers - 3.8% | |||||||||||
2,871,541 | E*TRADE Financial Corp.* | 63,403,625 | |||||||||
1,739,275 | JP Morgan Chase & Co. | 90,616,228 | |||||||||
1,110,465 | Merrill Lynch & Company, Inc. | 100,197,257 | |||||||||
254,217,110 |
Shares/Principal/Contract Amounts | Value | ||||||||||
Finance - Mortgage Loan Banker - 0.6% | |||||||||||
956,565 | Housing Development Finance Corporation, Ltd.** | $ | 38,299,330 | ||||||||
Financial Guarantee Insurance - 0.9% | |||||||||||
885,755 | MBIA, Inc.** | 61,613,118 | |||||||||
Food - Diversified - 1.0% | |||||||||||
5,052,831 | Cadbury Schweppes PLC** | 66,659,244 | |||||||||
Forestry - 3.6% | |||||||||||
2,194,130 | Plum Creek Timber Company, Inc.# | 87,106,961 | |||||||||
1,954,624 | Weyerhaeuser Co.**,# | 154,845,313 | |||||||||
241,952,274 | |||||||||||
Independent Power Producer - 2.8% | |||||||||||
2,409,225 | NRG Energy, Inc.*,# | 190,232,406 | |||||||||
Investment Companies - 0.9% | |||||||||||
18,763,623 | Macquarie Infrastructure Group** | 58,755,302 | |||||||||
Leisure and Recreation Products - 0.5% | |||||||||||
6,887,285 | EMI Group PLC** | 32,024,885 | |||||||||
Machinery - Pumps - 0.3% | |||||||||||
431,850 | Graco, Inc.# | 17,058,075 | |||||||||
Medical - Biomedical and Genetic - 1.0% | |||||||||||
1,105,055 | Amgen, Inc.*,# | 70,878,228 | |||||||||
Medical - HMO - 4.4% | |||||||||||
5,206,392 | Coventry Health Care, Inc.* | 301,085,649 | |||||||||
Medical - Nursing Homes - 1.7% | |||||||||||
1,817,205 | Manor Care, Inc. | 117,918,432 | |||||||||
Metal - Copper - 0.8% | |||||||||||
4,575,925 | Ivanhoe Mines, Ltd. (U.S. Shares)*,# | 56,878,748 | |||||||||
Metal Processors and Fabricators - 0.8% | |||||||||||
6,997,083 | Bharat Forge,** | 54,582,245 | |||||||||
Multimedia - 2.8% | |||||||||||
5,310,095 | News Corporation, Inc. - Class A | 118,893,027 | |||||||||
3,985,949 | Publishing & Broadcasting, Ltd.** | 67,499,943 | |||||||||
186,392,970 | |||||||||||
Oil Companies - Exploration and Production - 2.8% | |||||||||||
1,430,280 | Chesapeake Energy Corp.# | 48,271,950 | |||||||||
2,735,230 | Forest Oil Corp.* | 96,389,505 | |||||||||
2,076,215 | Mariner Energy, Inc.*,# | 46,818,648 | |||||||||
191,480,103 | |||||||||||
Oil Companies - Integrated - 0.2% | |||||||||||
170,570 | Suncor Energy, Inc. (U.S. Shares) | 13,730,885 | |||||||||
Oil Refining and Marketing - 3.6% | |||||||||||
4,484,899 | Reliance Industries, Ltd.** | 168,137,780 | |||||||||
704,921 | SK Corp.** | 76,666,672 | |||||||||
244,804,452 | |||||||||||
Paper and Related Products - 0.8% | |||||||||||
10,315,353 | Ballarpur Industries, Ltd.**,£ | 28,996,731 | |||||||||
2,315,770 | Domtar Corp. (U.S.Shares)* | 22,578,758 | |||||||||
51,575,489 | |||||||||||
Pipelines - 2.3% | |||||||||||
1,275,824 | Enbridge, Inc. | 42,071,501 | |||||||||
2,161,341 | Kinder Morgan Management LLC*,# | 114,853,660 | |||||||||
156,925,161 | |||||||||||
Public Thoroughfares - 0.1% | |||||||||||
6,254,541 | Sydney Roads Group** | 7,415,970 |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2007 19
Janus Contrarian Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares/Principal/Contract Amounts | Value | ||||||||||
Publishing - Periodicals - 0.2% | |||||||||||
1,672,155 | Playboy Enterprises, Inc. - Class B*,#,£ | $ | 16,370,397 | ||||||||
Real Estate Management/Services - 2.2% | |||||||||||
4,760,000 | Mitsubishi Estate Company, Ltd. | 147,356,373 | |||||||||
Real Estate Operating/Development - 8.3% | |||||||||||
34,383,000 | CapitaLand, Ltd.** | 189,667,616 | |||||||||
31,703,000 | New World Development Company, Ltd.# | 74,486,407 | |||||||||
5,252,565 | St. Joe Co.**,#,£ | 297,452,756 | |||||||||
561,606,779 | |||||||||||
Reinsurance - 1.1% | |||||||||||
20,926 | Berkshire Hathaway, Inc. - Class B* | 75,919,528 | |||||||||
REIT - Diversified - 1.8% | |||||||||||
1,001,180 | Vornado Realty Trust# | 118,769,983 | |||||||||
REIT - Warehouse and Industrial - 1.2% | |||||||||||
1,267,010 | ProLogis# | 82,102,248 | |||||||||
Retail - Consumer Electronics - 1.1% | |||||||||||
845,200 | Yamada Denki Company, Ltd.# | 77,878,556 | |||||||||
Retail - Major Department Stores - 0.5% | |||||||||||
3,746,492 | Pantaloon Retail India, Ltd.** | 36,021,440 | |||||||||
Semiconductor Components/Integrated Circuits - 0.7% | |||||||||||
2,176,860 | Cypress Semiconductor Corp.* | 49,675,945 | |||||||||
Soap and Cleaning Preparations - 1.3% | |||||||||||
1,561,589 | Reckitt Benckiser PLC** | 85,569,080 | |||||||||
Television - 1.7% | |||||||||||
10,338,702 | British Sky Broadcasting Group PLC** | 118,399,122 | |||||||||
Transportation - Railroad - 0.4% | |||||||||||
2,306,250 | All America Latina Logistica (GDR) | 27,232,431 | |||||||||
Total Common Stock (cost $4,623,352,367) | 6,572,204,701 | ||||||||||
Corporate Bonds - 0% | |||||||||||
Retail - Discount - 0% | |||||||||||
$ | 16,925,000 | Ames Department Stores, Inc., 10.00% senior notes, due 4/15/06‡,o,ß,oo (cost $7,900,645) | 0 | ||||||||
Purchased Options - Calls - 0.1% | |||||||||||
6,329 | St. Joe Co., expires January 2008 exercise price $60.00 | 3,101,210 | |||||||||
9,773 | Weyerhaeuser Co., expires January 2008 exercise price $85.00 | 4,886,500 | |||||||||
Total Purchased Options - Calls (premiums paid $5,897,739) | 7,987,710 | ||||||||||
Purchased Options - Puts - 0.1% | |||||||||||
8,188 | ICICI Bank, Ltd. (ADR), expires May 2007 exercise price $40.00 | 695,980 | |||||||||
6,882 | S&P 500® Depositary Receipt, expires June 2007 exercise price $17.40** | 9,359,520 | |||||||||
Total Purchased Options - Puts (premiums paid $12,430,887) | 10,055,500 | ||||||||||
Money Markets - 1.9% | |||||||||||
61,809,276 | Janus Institutional Cash Management Fund - Institutional Shares 5.32% | 61,809,276 | |||||||||
63,828,200 | Janus Institutional Money Market Fund - Institutional Shares 5.26% | 63,828,200 | |||||||||
Total Money Markets (cost $125,637,476) | 125,637,476 |
Shares/Principal/Contract Amounts | Value | ||||||||||
Other Securities - 7.9% | |||||||||||
534,501,602 | State Street Navigator Securities Lending Prime Portfolio† (cost $534,501,602) | $ | 534,501,602 | ||||||||
Total Investments (total cost $5,309,720,716) – 107.0% | 7,250,386,989 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets** – (7.0)% | (471,850,293 | ) | |||||||||
Net Assets – 100% | $ | 6,778,536,696 |
Summary of Investments by Country – (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Australia | $ | 168,488,390 | 2.3 | % | |||||||
Bermuda | 50,347,013 | 0.7 | % | ||||||||
Brazil | 110,476,027 | 1.5 | % | ||||||||
Canada | 135,259,892 | 1.9 | % | ||||||||
China | 50,347,102 | 0.7 | % | ||||||||
Hong Kong | 74,486,407 | 1.1 | % | ||||||||
India | 793,458,817 | 10.9 | % | ||||||||
Japan | 371,201,578 | 5.1 | % | ||||||||
Malaysia | 203,302,711 | 2.8 | % | ||||||||
Mexico | 117,860,210 | 1.6 | % | ||||||||
Singapore | 189,667,616 | 2.6 | % | ||||||||
South Korea | 76,666,672 | 1.1 | % | ||||||||
United Kingdom | 302,652,331 | 4.2 | % | ||||||||
United States†† | 4,606,172,223 | 63.5 | % | ||||||||
Total | $ | 7,250,386,989 | 100.0 | % |
†† Includes Short-Term Securities and Other Securities (54.4% 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) | ||||||||||||
Australian Dollar 10/18/07 | 110,000,000 | $ | 90,870,858 | $ | 146,442 | ||||||||||
British Pound 6/8/07 | 11,100,000 | 22,189,216 | (659,656 | ) | |||||||||||
British Pound 10/17/07 | 82,100,000 | 163,850,480 | (5,397,480 | ) | |||||||||||
Indian Rupee 10/18/07 | 2,000,000,000 | 47,190,958 | (518,691 | ) | |||||||||||
Singapore Dollar 10/18/07 | 270,000,000 | 180,037,208 | 470,621 | ||||||||||||
South Korean Won 8/16/07 | 950,000,000 | 1,024,016 | (15,470 | ) | |||||||||||
South Korean Won 10/17/07 | 44,130,000,000 | 47,653,157 | (892,892 | ) | |||||||||||
Total | $ | 552,815,893 | $ | (6,867,126 | ) |
See Notes to Schedules of Investments and Financial Statements.
20 Janus Core, Risk-Managed and Value Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Value | |||||||
Schedule of Written Options - Calls | |||||||
Companhia Vale do Rio Doce (ADR) expires May 2007 5,124 contracts exercise price $42.50 | $ | (281,820 | ) | ||||
ICICI Bank, Ltd. (ADR) expires May 2007 16,376 contracts exercise price $45.00 | (327,520 | ) | |||||
MBIA, Inc. expires January 2008 8,857 contracts exercise price $80.00 | (2,037,110 | ) | |||||
SLM Corp. expires June 2007 4,587 contracts exercise price $55.00 | (366,960 | ) | |||||
St. Joe Co. expires January 2008 6,329 contracts exercise price $70.00 | (1,170,865 | ) | |||||
Weyerhaeuser Co. expires January 2008 19,546 contracts exercise price $95.00 | (3,909,200 | ) | |||||
Total Options Written - Calls | |||||||
60,819 contracts (Premiums received $8,562,596) | $ | (8,093,475 | ) | ||||
Schedule of Written Options - Puts | |||||||
S&P 500 Depositary Receipt expires June 2007 6,882 contracts exercise price $4.50 | (2,477,520 | ) | |||||
St. Joe Co. expires September 2007 6,345 contracts exercise price $50.00 | (1,015,200 | ) | |||||
Weyerhaeuser Co. expires January 2008 9,773 contracts exercise price $60.00 | (1,123,895 | ) | |||||
Total Written Options - Puts | |||||||
23,000 contracts (Premiums received $6,165,732) | $ | (4,616,615 | ) |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2007 21
Janus Fundamental Equity Fund (unaudited)
Ticker: JAEIX
Minyoung Sohn
portfolio manager
The previous six-month period was a good one for stocks, with the market overcoming a sharp correction at the end of February. On February 27th, the S&P 500® Index lost nearly 50 points from 1449 to 1399, a 3.47% drop, following the 9% plunge in the local Chinese stock markets and ensuing weakness in the European markets in overnight trading.1 We now know that this sell-off was largely technical in nature, but at the time, this sparked fears of another market correction similar to the one triggered on May 10, 2006. Despite the correction, we now see that the Chinese markets have continued to surge ahead, with the U.S. stocks exhibiting similar muster. This raises the question, "Did the February correction even matter?"
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.
In light of this view, the Fund played defense against a U.S. economic slowdown. Globalization was a recurring theme in the portfolio – whether it was General Electric, Procter & Gamble or Boeing – because I believe that the Fund will benefit from long-term exposure to faster economic growth overseas. From a sector perspective, the Fund was heavily overweight in energy, so I believe that performance should hold up relatively well in any "oil price shock" scenario. Finally, I intend to carefully monitor U.S. consumer exposure, although at the end of the period, the Fund still held positions in stocks such as Tiffany, Nordstrom and Best Buy due to the analysts' conviction in each company's specific investment merits. If I am wrong, and if the market decides that the positives outweigh the concerns, the Fund may underperform in 2007.
For the six-month period ending April 30, 2007, the Fund returned 8.72%, exceeding the 8.60% return of the S&P 500® Index, the primary benchmark, and the 8.42% return of the Russell 1000® Growth Index, the secondary benchmark.
Stocks That Helped Performance
Hess (formerly Amerada Hess) and Valero Energy were the two largest contributors to performance in the period.
The Fund's holding in Hess gained nearly 40% in the period and was the largest contributor to performance. The Fund owns Hess because I believe that the company is undervalued relative to the rapid improvements in the upstream oil and gas exploration and development business. An industry laggard just a few years ago, Hess delivered solid upstream performance. I believe that the value of recent discoveries in the Gulf of Mexico is not reflected in the share price at the end of the period. As these projects get sanctioned, I expect the company will be able to focus on strong organic reserve replacement, competitive finding and development costs and attractive organic production growth. I held the Fund's large position in Hess because I believe that the shares will re-rate higher as the company completes this execution.
Valero Energy was another large contributor in the period. Valero was built under the visionary leadership of Bill Greehey, who acquired fundamentally advantaged refining assets at trough valuations. The refining business strengthened considerably over the past few years as gasoline demand has outpaced the industry's ability to produce gasoline. Recently, Valero named Bill Klesse to lead the company. In recent meetings with the company, I was impressed by Mr. Klesse and his focus on cost and capital spending discipline, capital management and shareholder value creation. In 2006, Valero reduced its share count by more than 5%, and the company appears on pace to reduce its shares outstanding by over 10% in 2007. Under Mr. Klesse, Valero is reviewing its asset portfolio in an effort to further enhance value by selling refiners which may be worth more to others than they are to Valero. Valero recently announced the sale of its Lima refinery for $1.9 billion. The proceeds from Lima, as well as other potential asset sales, should further add to its share repurchase activity. I applaud management's focus on value creation as I believe that these actions will continue to drive shareholder value. I held the Fund's position.
The Fund's holding in EMC was another large contributor in the period. EMC is a leader in storage hardware and software solutions. I bought EMC through the course of 2006 at an average cost of less than $11 per share because I believed that the shares were attractively valued on a sum-of-the-parts basis. The key to this thesis is my extremely positive view of VMware, a wholly-owned subsidiary of EMC. VMware is the leader in virtualization software, which allows users to run virtual machines on a single piece of hardware. This functionality enables users to more fully utilize the computing capacity of their servers, resulting in significant procurement and operational savings. Despite the buzz and excitement
22 Janus Core, Risk-Managed and Value Funds April 30, 2007
(unaudited)
around virtualization, Janus research suggests VMware is still in its very early stages of rapid growth as this emerging technology enters mainstream adoption. We estimate that VMware sales will be approximately $1 billion in 2007, which could be valued as richly as 10 times sales, placing a value of $10 billion on VMware. This would then represent $5 per share of value for each share of EMC. When the Fund was completing its purchase in EMC at less than $11 per average share price, adjusting for cash and estimated value of VMware, I believed that I was buying the rest of EMC for well under 1.0 times sales. While investing in companies on a sum-of-the-parts-based analysis can admittedly demand patience, I believe that the investment in EMC may be rewarded due to the pending Initial Public Offering of VMware as a catalyst.
Stocks That Hurt Performance
The Fund's position in Advanced Micro Devices (AMD) was the largest detractor, with the shares losing 35.03% in the period. AMD has been a frequent topic of my quarterly commentary since 2005 – both on the upside and downside. To review, the Fund owns a large position in AMD because I believe that the competitive structure of the microprocessor industry is changing into a true duopoly. The corollary to the investment thesis is that AMD should be able to convert its market share into profitable earnings growth. If I am right on these two points, then it seems logical that if AMD can capture, for example, 30% of the sales and profits of the microprocessor industry, that over time investors should reward AMD with an equivalent 30% of the combined value of Intel, its competitor, and AMD. As of period-end, I estimate that while AMD captures a 20% share of industry revenue, it carries only 7% of the industry enterprise value.
In addition to AMD, the Fund's holding in Whole Foods Market was the second-largest detractor to performance. I bought Whole Foods in 2006 based on a positive view of the long-term secular growth of organic and natural foods. Prior to buying the position, the company had been reporting very robust same-store sales growth (or "comps") and much of this momentum began to be reflected in very strong stock performance. However, the shares have declined in recent quarters after the company reported slowing comps, which disappointed the market because it had grown accustomed to comps in excess of 10%. In my view, the Whole Foods story is one typical of growth stocks. In my view, there are different points in time when stocks struggle as they grow into their valuation. In other words, it may take a year or two for the company to increase its earnings to catch up to the expectati ons embedded in its share price. Sometimes, as in the case of Whole Foods, the share price will deflate with lower expectations but then can grow again with earnings growth. I believe what is most important, however, is that Whole Foods has a strong brand, a national footprint in the category and holds of the promise of secular growth for years to come. I held the position.
Closing Comments
At period end, the stock market seemed to be well-supported by a three-legged stool of better-than-expected corporate earnings, substantial corporate and private equity liquidity and expectations of interest rate cuts later this year. These are indeed reasons to be bullish, but I am concerned that inflationary pressures may not allow the Federal Reserve (Fed) to cut rates in the classic mid-cycle slowdown scenario. In my view, the market has also not weighed the possibility of geopolitical risk and the resulting volatility of an "oil price shock." Housing and its potential negative spillover is a wildcard and I believe is too tough to call.
You will notice that your Fund's name was changed from "Janus Core Equity Fund" to "Janus Fundamental Equity Fund." This was designed to better articulate the investment strategy of the Fund. The Fund is built on our research-intensive bottoms-up stock-picking process. Over 80% of the Fund was invested in stocks internally-rated by the Janus investment team as "buy" or "strong buy."
As always, I promise you my utmost effort in the periods ahead. In addition, the overwhelming portion of my personal mutual fund investments are here at Janus in the two Funds under my charge, Janus Fundamental Equity Fund and Janus Growth and Income Fund, and I continue to contribute every month to both.
Thank you for your investment in Janus Fundamental Equity Fund.
1The Shanghai A-Share Stock Price Index (Bloomberg ticker: SHASHR) fell from 3193 to 2911 on February 27, an 8.84% drop. That same day, the Shenzen A-Share Index (Bloomberg ticker: SZASHR) fell from 807 to 738, an 8.54% drop. The Shanghai A-Share Index recovered this loss in less than three weeks and closed Q1 at 3346 and April 30 at 4035. The Shenzen A-Share Index recovered its February 27 loss in two weeks and closed Q1 at 862 and April 30 at 1114!
Janus Core, Risk-Managed and Value Funds April 30, 2007 23
Janus Fundamental Equity Fund (unaudited)
Janus Fundamental Equity Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Hess Corp. | 0.85 | % | |||||
Valero Energy Corp. | 0.81 | % | |||||
EMC Corp. | 0.57 | % | |||||
Coventry Health Care, Inc. | 0.50 | % | |||||
Tiffany & Co. | 0.49 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Commerce Bancorp, Inc. | (0.88 | )% | |||||
Best Buy Company, Inc. | (0.36 | )% | |||||
Spansion, Inc. - Class A | (0.29 | )% | |||||
Whole Foods Market, Inc. | (0.21 | )% | |||||
Advanced Micro Devices, Inc. | (0.08 | )% |
5 Largest Contributors to Performance – Sectors
Fund contribution | Fund Weighting (% of Net Assets) | S&P 500® Index Weighting | |||||||||||||
Energy | 2.96 | % | 17.79 | % | 9.82 | % | |||||||||
Health Care | 1.89 | % | 12.47 | % | 12.12 | % | |||||||||
Industrials | 1.43 | % | 11.34 | % | 10.88 | % | |||||||||
Financials | 1.00 | % | 18.23 | % | 21.95 | % | |||||||||
Consumer Discretionary | 0.89 | % | 9.74 | % | 10.61 | % |
5 Lowest Contributors/Detractors to Performance – Sectors
Fund contribution | Fund Weighting (% of Net Assets) | S&P 500® Index Weighting | |||||||||||||
Telecommunication Services | (0.01 | )% | 0.01 | % | 3.52 | % | |||||||||
Utilities | 0.00 | % | 0.00 | % | 3.54 | % | |||||||||
Consumer Staples | 0.19 | % | 7.21 | % | 9.34 | % | |||||||||
Materials | 0.22 | % | 1.92 | % | 3.04 | % | |||||||||
Information Technology | 0.68 | % | 21.29 | % | 15.18 | % |
24 Janus Core, Risk-Managed and Value Funds April 30, 2007
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2007
JP Morgan Chase & Co. Finance - Investment Bankers/Brokers | 3.9 | % | |||||
General Electric Co. Diversified Operations | 3.7 | % | |||||
Merrill Lynch & Company, Inc. Finance - Investment Bankers/Brokers | 3.6 | % | |||||
Citigroup, Inc. Finance - Investment Bankers/Brokers | 3.3 | % | |||||
Merck & Company, Inc. Medical - Drugs | 2.9 | % | |||||
17.4 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2007
Emerging markets comprised 3.4% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2007 | As of October 31, 2006 | ||||||
![]() | ![]() | ||||||
Janus Core, Risk-Managed and Value Funds April 30, 2007 25
Janus Fundamental Equity Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | Total Annual Fund Operating Expenses | ||||||||||||||||||||||
Janus Fundamental Equity Fund | 8.72 | % | 8.72 | % | 9.39 | % | 11.87 | % | 12.99 | % | 0.92 | % | |||||||||||||||
S&P 500® Index | 8.60 | % | 15.24 | % | 8.54 | % | 8.05 | % | 9.35 | % | |||||||||||||||||
Russell 1000® Growth Index | 8.42 | % | 12.25 | % | 6.22 | % | 5.32 | % | 6.49 | % | |||||||||||||||||
Lipper Quartile | – | 4 | th | 1 | st | 1 | st | 1 | st | ||||||||||||||||||
Lipper Ranking - based on total return for Large-Cap Core Funds | – | 713/795 | 41/567 | 2/255 | 1/212 |
Visit janus.com to view current performance
and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
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.
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.
June 30, 1996 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – June 28, 1996
26 Janus Core, Risk-Managed and Value Funds April 30, 2007
(unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,087.20 | $ | 4.55 | |||||||||
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).
Janus Core, Risk-Managed and Value Funds April 30, 2007 27
Janus Fundamental Equity Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares/Principal/Contract Amounts | Value | ||||||||||
Common Stock - 98.7% | |||||||||||
Advertising Sales - 1.6% | |||||||||||
582,385 | Clear Channel Outdoor Holdings, Inc.*,# | $ | 16,627,092 | ||||||||
Aerospace and Defense - 2.9% | |||||||||||
218,310 | Boeing Co. | 20,302,830 | |||||||||
237,935 | Embraer-Empresa Brasileira de Aeronautica S.A. (ADR) | 11,161,531 | |||||||||
31,464,361 | |||||||||||
Agricultural Operations - 0.8% | |||||||||||
221,625 | Archer-Daniels-Midland Co. | 8,576,888 | |||||||||
Coal - 1.0% | |||||||||||
214,595 | Peabody Energy Corp.# | 10,296,268 | |||||||||
Commercial Banks - 1.8% | |||||||||||
565,475 | Commerce Bancorp, Inc.# | 18,909,484 | |||||||||
Commercial Services - Finance - 0.9% | |||||||||||
435,540 | Western Union Co. | 9,168,117 | |||||||||
Computers - 2.1% | |||||||||||
147,825 | Apple, Inc.*,** | 14,752,935 | |||||||||
314,070 | Dell, Inc.* | 7,917,705 | |||||||||
22,670,640 | |||||||||||
Computers - Memory Devices - 2.5% | |||||||||||
1,789,870 | EMC Corp.* | 27,170,227 | |||||||||
Cosmetics and Toiletries - 2.0% | |||||||||||
340,135 | Procter & Gamble Co. | 21,874,082 | |||||||||
Diversified Operations - 3.7% | |||||||||||
1,080,685 | General Electric Co. | 39,834,049 | |||||||||
Electronic Components - Semiconductors - 5.6% | |||||||||||
928,560 | Advanced Micro Devices, Inc.* | 12,832,699 | |||||||||
210,490 | NVIDIA Corp.* | 6,923,016 | |||||||||
15,545 | Samsung Electronics Company, Ltd. | 9,518,912 | |||||||||
921,165 | Spansion, Inc. - Class A* | 9,045,840 | |||||||||
621,765 | Texas Instruments, Inc. | 21,370,064 | |||||||||
59,690,531 | |||||||||||
Electronic Forms - 1.9% | |||||||||||
498,455 | Adobe Systems, Inc.* | 20,715,790 | |||||||||
Energy - Alternate Sources - 0.8% | |||||||||||
79,230 | First Solar, Inc.*,# | 4,753,008 | |||||||||
107,565 | Suntech Power Holdings Company, Ltd. (ADR)*,**,# | 3,902,458 | |||||||||
8,655,466 | |||||||||||
Enterprise Software/Services - 2.4% | |||||||||||
914,035 | Oracle Corp.* | 17,183,858 | |||||||||
181,825 | SAP A.G. (ADR)**,# | 8,727,600 | |||||||||
25,911,458 | |||||||||||
Entertainment Software - 1.0% | |||||||||||
220,640 | Electronic Arts, Inc.* | 11,122,462 | |||||||||
Finance - Credit Card - 1.1% | |||||||||||
195,300 | American Express Co. | 11,848,851 | |||||||||
Finance - Investment Bankers/Brokers - 10.8% | |||||||||||
648,350 | Citigroup, Inc. | 34,764,527 | |||||||||
805,300 | JP Morgan Chase & Co. | 41,956,129 | |||||||||
429,440 | Merrill Lynch & Company, Inc. | 38,748,371 | |||||||||
115,469,027 | |||||||||||
Finance - Mortgage Loan Banker - 2.3% | |||||||||||
420,405 | Fannie Mae | 24,770,263 |
Shares/Principal/Contract Amounts | Value | ||||||||||
Finance - Other Services - 0.8% | |||||||||||
66,090 | Nymex Holdings, Inc.*,# | $ | 8,572,534 | ||||||||
Food - Canned - 0.6% | |||||||||||
209,045 | TreeHouse Foods, Inc.* | 6,300,616 | |||||||||
Food - Retail - 0.8% | |||||||||||
189,810 | Whole Foods Market, Inc.# | 8,881,210 | |||||||||
Forestry - 1.3% | |||||||||||
175,335 | Weyerhaeuser Co. | 13,890,039 | |||||||||
Gold Mining - 0.4% | |||||||||||
157,180 | Barrick Gold Corp. (U.S. Shares) | 4,418,330 | |||||||||
Industrial Automation and Robotics - 1.0% | |||||||||||
188,530 | Rockwell Automation, Inc. | 11,225,076 | |||||||||
Machinery - Construction and Mining - 0.9% | |||||||||||
130,420 | Caterpillar, Inc. | 9,471,100 | |||||||||
Medical - Biomedical and Genetic - 1.7% | |||||||||||
291,435 | Celgene Corp.* | 17,824,165 | |||||||||
Medical - Drugs - 6.5% | |||||||||||
604,260 | Merck & Company, Inc. | 31,083,133 | |||||||||
156,430 | Roche Holding A.G.# | 29,508,972 | |||||||||
99,724 | Sanofi-Aventis**,# | 9,157,347 | |||||||||
69,749,452 | |||||||||||
Medical - HMO - 2.2% | |||||||||||
413,750 | Coventry Health Care, Inc.* | 23,927,163 | |||||||||
Medical Products - 0.4% | |||||||||||
12,685 | Nobel Biocare Holding A.G.# | 4,579,219 | |||||||||
Multi-Line Insurance - 1.1% | |||||||||||
169,470 | American International Group, Inc. | 11,847,648 | |||||||||
Multimedia - 0.9% | |||||||||||
396,035 | News Corporation, Inc. - Class B# | 9,504,840 | |||||||||
Non-Hazardous Waste Disposal - 0.4% | |||||||||||
108,620 | Waste Management, Inc. | 4,063,474 | |||||||||
Oil - Field Services - 0.7% | |||||||||||
248,410 | Halliburton Co.# | 7,891,986 | |||||||||
Oil and Gas Drilling - 0.6% | |||||||||||
74,385 | Transocean, Inc. (U.S. Shares)* | 6,411,987 | |||||||||
Oil Companies - Exploration and Production - 3.4% | |||||||||||
165,630 | Apache Corp. | 12,008,175 | |||||||||
294,305 | EnCana Corp. (U.S. Shares) | 15,436,297 | |||||||||
123,040 | EOG Resources, Inc. | 9,036,058 | |||||||||
36,480,530 | |||||||||||
Oil Companies - Integrated - 8.5% | |||||||||||
134,740 | ConocoPhillips | 9,344,219 | |||||||||
256,840 | Exxon Mobil Corp. | 20,387,959 | |||||||||
481,400 | Hess Corp. | 27,319,449 | |||||||||
118,895 | Marathon Oil Corp. | 12,073,787 | |||||||||
280,568 | Suncor Energy, Inc. | 22,510,659 | |||||||||
91,636,073 | |||||||||||
Oil Refining and Marketing - 2.7% | |||||||||||
413,634 | Valero Energy Corp. | 29,049,516 | |||||||||
Pharmacy Services - 1.4% | |||||||||||
152,085 | Express Scripts, Inc. - Class A* | 14,531,722 | |||||||||
Retail - Apparel and Shoe - 1.7% | |||||||||||
322,245 | Nordstrom, Inc. | 17,697,695 | |||||||||
Retail - Consumer Electronics - 1.0% | |||||||||||
221,037 | Best Buy Company, Inc. | 10,311,376 |
See Notes to Schedules of Investments and Financial Statements.
28 Janus Core, Risk-Managed and Value Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Shares/Principal/Contract Amounts | Value | ||||||||||
Retail - Drug Store - 2.5% | |||||||||||
734,255 | CVS/Caremark Corp. | $ | 26,609,401 | ||||||||
Retail - Jewelry - 1.4% | |||||||||||
320,650 | Tiffany & Co.# | 15,291,799 | |||||||||
Retail - Major Department Stores - 1.3% | |||||||||||
174,185 | J.C. Penney Company, Inc. | 13,776,292 | |||||||||
Steel - Producers - 1.5% | |||||||||||
1,224,924 | Tata Steel, Ltd. | 16,164,789 | |||||||||
Telecommunication Equipment - Fiber Optics - 1.7% | |||||||||||
760,260 | Corning, Inc.*,** | 18,033,367 | |||||||||
Therapeutics - 0.7% | |||||||||||
92,460 | Gilead Sciences, Inc.* | 7,555,831 | |||||||||
Transportation - Railroad - 2.4% | |||||||||||
246,644 | Canadian National Railway Co. (U.S. Shares) | 12,391,395 | |||||||||
120,780 | Union Pacific Corp. | 13,799,115 | |||||||||
26,190,510 | |||||||||||
Web Portals/Internet Service Providers - 2.4% | |||||||||||
925,020 | Yahoo!, Inc.* | 25,937,561 | |||||||||
Wireless Equipment - 0.6% | |||||||||||
43,515 | American Tower Corp. - Class A* | 1,653,570 | |||||||||
207,085 | Nokia Oyj (ADR)** | 5,228,896 | |||||||||
6,882,466 | |||||||||||
Total Common Stock (cost $870,885,066) | 1,059,482,823 | ||||||||||
Purchased Options - Calls - 0.3% | |||||||||||
2,057 | ConocoPhillips, expires January 2009 exercise price $70.00 | 2,221,560 | |||||||||
921 | Procter & Gamble Co. expires January 2008 exercise price $70.00 | 147,360 | |||||||||
1,753 | Procter & Gamble Co. expires January 2009 exercise price $65.00 | 1,174,510 | |||||||||
Total Purchased Options - Calls (premiums paid $3,435,485) | 3,543,430 | ||||||||||
Money Market - 1.9% | |||||||||||
20,497,000 | Janus Institutional Money Market Fund - Institutional Shares, 5.26% (cost $20,497,000) | 20,497,000 | |||||||||
Other Securities - 9.6% | |||||||||||
102,824,256 | State Street Navigator Securities Lending Prime Portfolio† (cost $102,824,256) | 102,824,256 | |||||||||
Total Investments (total cost $997,641,807) – 110.5% | 1,186,347,509 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (10.5)% | (113,294,518 | ) | |||||||||
Net Assets – 100% | $ | 1,073,052,991 |
Summary of Investments by Country – (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Brazil | $ | 11,161,531 | 0.9 | % | |||||||
Canada | 54,756,681 | 4.6 | % | ||||||||
Cayman Islands | 10,314,445 | 0.9 | % | ||||||||
Finland | 5,228,896 | 0.4 | % | ||||||||
France | 9,157,347 | 0.8 | % | ||||||||
Germany | 8,727,600 | 0.7 | % | ||||||||
India | 16,164,789 | 1.4 | % | ||||||||
South Korea | 9,518,912 | 0.8 | % | ||||||||
Switzerland | 34,088,191 | 2.9 | % | ||||||||
United States†† | 1,027,229,117 | 86.6 | % | ||||||||
Total | $ | 1,186,347,509 | 100.0 | % |
†† Includes Short-Term Securities and Other Securities (76.2% 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 6/8/07 | 5,545,000 | $ | 7,578,192 | $ | (324,889 | ) | |||||||||
Total | $ | 7,578,192 | $ | (324,889 | ) |
Value | |||||||
Schedule of Written Options – Calls | |||||||
Apple, Inc. expires June 2007 1,475 contracts exercise price $115.00 | $ | (44,250 | ) | ||||
Corning, Inc. expires August 2007 7,000 contracts exercise price $30.00 | (140,000 | ) | |||||
Suntech Power Holdings Company, Ltd. (ADR) expires June 2007 1,050 contracts exercise price $45.00 | (21,000 | ) | |||||
Total Written Options – Calls | |||||||
9,525 contracts (Premiums received $246,324) | $ | (205,250 | ) |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2007 29
Janus Growth and Income Fund (unaudited)
Ticker: JAGIX
Minyoung Sohn
portfolio manager
The previous six-month period was a good one for stocks, with the market overcoming a sharp correction at the end of February. On February 27th, the S&P 500® Index lost nearly 50 points from 1449 to 1399, a 3.47% drop, following the 9% plunge in the local Chinese stock markets and ensuing weakness in the European markets in overnight trading.1 We now know that this sell-off was largely technical in nature, but at the time, this sparked fears of another market correction similar to the one triggered on May 10, 2006. Despite the correction, we now see that the Chinese markets continued to surge ahead with the U.S. stocks exhibiting similar muster. This raises the question, "Did the February correction even matter?"
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.
In light of this view, the Fund played defense against a U.S. economic slowdown. Globalization was a recurring theme in the portfolio – whether it was General Electric, Procter & Gamble, UBS or Infosys Technologies – because I believe that the Fund will benefit from long term exposure to faster economic growth overseas. From a sector perspective, the Fund was heavily overweight in energy, so I believe that performance should hold up relatively well in any "oil price shock" scenario. Finally, I intend to carefully monitor U.S. consumer exposure, although at period end the Fund held positions in Tiffany, Nordstrom and Best Buy due to the analysts' conviction in each company's specific investment merits. If I am wrong, and if the market decides that the positives outweigh the concerns, the Fund may underperform in 2007.
For the six-month period ending April 30, 2007, the Fund performed approximately in line with both the S&P 500® Index, the primary benchmark, and the Russell 1000® Growth Index, the secondary benchmark. During the period, the Fund returned 8.61%, exceeding the 8.60% return of the S&P 500® Index and the 8.42% return of the Russell 1000® Growth Index.
First, a Few Words on Process and Portfolio Construction
Before discussing the factors impacting performance over this six-month period, I would like to share my thoughts on the Fund's poor relative performance in calendar year 2006. I took some steps at the beginning of this year in an effort to improve performance and reduce portfolio volatility. Looking back, 2006 was a disappointing year for the Fund, but part of the severe underperformance was due to what I would characterize as faulty portfolio construction during a time when the Fund's performance proved to be "topsy-turvy" due to periods of market volatility. Whereas stock-picking drove the strong relative performance in 2004 and 2005, it was the reason for underperformance last year, as the portfolio was too highly exposed to active risk from just a handful of stocks. Although I expect to have a percentage of the holdings return less than the benchmark in any measurem ent period, in 2006 the impact of the "losers" was too large relative to the majority of the stocks that delivered positive returns. In an attempt to reduce portfolio volatility, I increased the number of stocks in the portfolio by selling approximately 15% of the Fund, pro rata across nearly all holdings. This reduced the concentration of portfolio assets in the top 10 and 20 positions from approximately 35% and 55% to 30% and 50%, respectively during the period. In an effort to improve performance, I used these proceeds to establish new positions in stocks internally- rated as "buy" or "strong buy." I also used a portion of the proceeds to increase the allocation of income-oriented derivative strategies from 6% to nearly 10%.
In the first quarter, we witnessed a real-time test of these portfolio adjustments. Whereas the Fund significantly underperformed the benchmark after the May 10, 2006 correction and the level of underperformance widened throughout the rest of last year, after the most recent correction during March and April 2007, the Fund outperformed its primary benchmark. This was an encouraging sign and it reinforced the importance of portfolio construction.
Stocks That Contributed to Performance
Bharti Airtel, which operates its mobile phone service under the brand "Airtel," is the largest player in India with approximately 21% market share. Bharti shares gained about 67% in the period, and the position was the largest positive
30 Janus Core, Risk-Managed and Value Funds April 30, 2007
(unaudited)
contributor to performance. I bought the position in Bharti in March 2006 because I was bullish on the Indian wireless opportunity. I noted that in India, only 10% of the population had cell phone service, compared to 70% to 100% in markets such as the U.S. and Europe. India's wireless penetration is low even by emerging market standards, compared to countries such as Brazil (52%), China (34%) or Russia (100%).2 In March, I believed that the Indian market could be 300 million by 2010 and that Bharti would grow at an even faster rate by taking market share from its competitors. As I tracked the Indian wireless industry over the past year, I was impressed that the market consistently grew faster than our expectation. I previously thought that 25% of the Indian population would have wireless service by 2010, but I now believe that this could exceed 30%. Accordingly, I increased the five-year target for Indian wireless subscribers by 100 million to approximately 400 million. While I feel Bharti stock is expensive on an earnings-multiple basis, I believe that the rich valuation is justified by its growth prospects. I held the position in Bharti, which I believe was one of the best growth stories in the portfolio.
Valero Energy was another large contributor in the period. Valero was built under the visionary leadership of Bill Greehey, who acquired fundamentally advantaged refining assets at trough valuations. The refining business strengthened considerably over the past few years as gasoline demand has outpaced the industry's ability to produce gasoline. Recently, Valero named Bill Klesse to lead the company. In recent meetings with the company, I was impressed by Mr. Klesse and his focus on cost and capital spending discipline, capital management and shareholder value creation. In 2006, Valero reduced its share count by more than 5%, and the company appears on pace to reduce its shares outstanding by over 10% in 2007. Under Mr. Klesse, Valero is reviewing its asset portfolio in an effort to further enhance value by selling refiners which may be worth more to others than they are to Valero. Valero recently announced the sale of its Lima refinery for $1.9 billion. The proceeds from Lima, as well as other potential asset sales, should further add to its share repurchase activity. I applaud management's focus on value creation as I believe that these actions will continue to drive shareholder value. I held the Fund's position.
Stocks That Hurt Performance
Advanced Micro Devices, or AMD, has been a frequent topic of my quarterly commentary since 2005 – both on the upside and downside. To review, the Fund owns a large position in AMD because I believe that the competitive structure of the microprocessor industry is changing into a true duopoly. The corollary to the investment thesis is that AMD should be able to convert its market share into profitable earnings growth. If I am right on these two points, then it seems logical that if AMD can capture, for example, 30% of the sales and profits of the microprocessor industry, that over time investors should reward AMD with an equivalent 30% of the combined value of Intel, its competitor, and AMD. As of period-end, I estimate that while AMD captures a 20% share of industry revenue, it carries only 7% of the industry enterprise value.
AMD shares peaked in early 2006 above $40 per share but ended the period below $14 per share. I underestimated Intel's ability to defend its market position through its balance sheet and manufacturing capacity. Intel was far better prepared to weather the margin pressure from the ensuing price war and has forced AMD to pare back its ambitious plan to gain market share. Looking ahead, I am optimistic that the microprocessor market will return to normal (rational) pricing levels later this year as both company's financial results have suffered in the fight to establish market share equilibrium.
Closing Comments
At period end, the stock market seemed to be well-supported by a three-legged stool of better-than-expected corporate earnings, substantial corporate and private equity liquidity and expectations of interest rate cuts later this year. These are indeed reasons to be bullish, but I am concerned that inflationary pressures may not allow the Federal Reserve (Fed) to cut rates in the classic mid-cycle slowdown scenario. In my view, the market has not weighed the possibility of geopolitical risk and the resulting volatility of an "oil price shock." Housing and its potential negative spillover is a wildcard and, I believe is too tough to call.
In my opinion, the real challenge in this market environment of rising interest rates is providing you with attractive risk-adjusted returns (after expenses) and earning our keep in your
Janus Core, Risk-Managed and Value Funds April 30, 2007 31
Janus Growth and Income Fund (unaudited)
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. As previously discussed, over 80% of the Fund at period end is invested in stocks internally-rated by the Janus investment team as "buy" or "strong buy."
As always, I promise you my utmost effort in the periods ahead. In addition, the overwhelming portion of my personal mutual fund investments are here at Janus in the two Funds under my charge, Janus Growth and Income Fund and Janus Fundamental Equity Fund, and I continue to contribute every month to both.
Thank you for your investment in Janus Growth and Income Fund.
1The Shanghai A-Share Stock Price Index (Bloomberg ticker: SHASHR) fell from 3193 to 2911 on February 27, an 8.84% drop. That same day, the Shenzen A-Share Index (Bloomberg ticker: SZASHR) fell from 807 to 738, and 8.54% drop. The Shanghai A-Share Index recovered this loss in less than three weeks and closed Q1 at 3346 and April 30 at 4035. The Shenzen A-Share Index recovered its February 27 loss in two weeks and closed Q1 at 862 and April 30 at 1114!
2Source: Merrill Lynch, "Global Wireless Matrix 3Q06: GEMs Continue to Shine," published January 9, 2007.
Janus Growth and Income Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Bharti Tele-Ventures, Ltd. | 0.90 | % | |||||
Valero Energy Corp. | 0.78 | % | |||||
Hess Corp. | 0.73 | % | |||||
EMC Corp. | 0.68 | % | |||||
Tiffany & Co. | 0.48 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Advanced Micro Devices, Inc. | (1.52 | )% | |||||
Spansion, Inc. - Class A | (0.39 | )% | |||||
Best Buy Company, Inc. | (0.23 | )% | |||||
Samsung Electronics Company, Ltd. | (0.23 | )% | |||||
Melco International Development, Ltd. | (0.18 | )% |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | S&P 500® Index Weighting | |||||||||||||
Energy | 2.42 | % | 18.18 | % | 1.37 | % | |||||||||
Consumer Discretionary | 1.99 | % | 14.56 | % | 0.57 | % | |||||||||
Health Care | 1.65 | % | 9.84 | % | 1.13 | % | |||||||||
Telecommunication Services | 0.89 | % | 1.73 | % | 0.46 | % | |||||||||
Financials | 0.77 | % | 11.23 | % | 1.27 | % |
5 Lowest Contributors/Detractors to Performance – Sectors
Fund Weighting Fund Contribution | S&P 500® (% of Net Assets) | Index Weighting | |||||||||||||
Information Technology | (0.68 | )% | 22.88 | % | 15.18 | % | |||||||||
Utilities | 0.00 | % | 0.00 | % | 3.54 | % | |||||||||
Materials | 0.32 | % | 2.05 | % | 3.04 | % | |||||||||
Industrials | 0.71 | % | 12.16 | % | 10.88 | % | |||||||||
Consumer Staples | 0.71 | % | 7.39 | % | 9.34 | % |
32 Janus Core, Risk-Managed and Value Funds April 30, 2007
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2007
General Electric Co. Diversified Operations | 3.0 | % | |||||
CVS/Caremark Corp. Retail - Drug Store | 2.7 | % | |||||
Valero Energy Corp. Oil Refining and Marketing | 2.5 | % | |||||
EMC Corp. Computers - Memory Devices | 2.5 | % | |||||
Procter & Gamble Co. Cosmetics And Toiletries | 2.4 | % | |||||
13.1 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2007
Emerging markets comprised 10.0% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2007 | As of October 31, 2006 | ||||||
![]() | ![]() | ||||||
Janus Core, Risk-Managed and Value Funds April 30, 2007 33
Janus Growth and Income Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | Total Annual Fund Operating Expenses | ||||||||||||||||||||||
Janus Growth and Income Fund | 8.61 | % | 6.46 | % | 8.03 | % | 10.60 | % | 13.33 | % | 0.89 | % | |||||||||||||||
S&P 500® Index | 8.60 | % | 15.24 | % | 8.54 | % | 8.05 | % | 11.31 | % | |||||||||||||||||
Russell 1000® Growth Index | 8.42 | % | 12.25 | % | 6.22 | % | 5.32 | % | 9.24 | % | |||||||||||||||||
Lipper Quartile | – | 4 | th | 2 | nd | 1 | st | 1 | st | ||||||||||||||||||
Lipper Ranking - based on total return for Large-Cap Core Funds | – | 772/795 | 159/567 | 9/255 | 4/76 |
Visit janus.com to view current performance
and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
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.
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.
May 16, 1991 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – May 15, 1991
34 Janus Core, Risk-Managed and Value Funds April 30, 2007
(unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,086.10 | $ | 4.50 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.48 | $ | 4.36 |
*Expenses are equal to the annualized expense ratio of 0.87%, 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, 2007 35
Janus Growth and Income Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares/Principal/Contract Amounts | Value | ||||||||||
Common Stock - 89.4% | |||||||||||
Advertising Sales - 1.0% | |||||||||||
1,068,380 | Lamar Advertising Co.* | $ | 64,466,049 | ||||||||
Aerospace and Defense - 2.6% | |||||||||||
1,070,685 | Boeing Co. | 99,573,705 | |||||||||
1,519,175 | Embraer-Empresa Brasileira de Aeronautica S.A. (ADR) | 71,264,499 | |||||||||
170,838,204 | |||||||||||
Applications Software - 1.2% | |||||||||||
1,038,932 | Infosys Technologies, Ltd. | 51,543,803 | |||||||||
2,435,413 | Satyam Computer Services, Ltd. | 27,826,848 | |||||||||
79,370,651 | |||||||||||
Automotive - Cars and Light Trucks - 0.5% | |||||||||||
1,777,625 | Tata Motors, Ltd. | 32,248,141 | |||||||||
Building - Residential and Commercial - 0.6% | |||||||||||
46,075 | NVR, Inc.*,# | 37,965,800 | |||||||||
Coal - 1.0% | |||||||||||
1,428,416 | Peabody Energy Corp.# | 68,535,400 | |||||||||
Commercial Banks - 1.0% | |||||||||||
1,897,240 | Commerce Bancorp, Inc.# | 63,443,706 | |||||||||
Commercial Services - Finance - 0.7% | |||||||||||
2,297,400 | Western Union Co. | 48,360,270 | |||||||||
Computers - 1.4% | |||||||||||
128,355 | Apple, Inc.*,** | 12,809,829 | |||||||||
3,276,830 | Dell, Inc.*,# | 82,608,884 | |||||||||
95,418,713 | |||||||||||
Computers - Memory Devices - 2.5% | |||||||||||
10,837,370 | EMC Corp.* | 164,511,277 | |||||||||
Cosmetics and Toiletries - 2.4% | |||||||||||
2,448,590 | Procter & Gamble Co. | 157,468,823 | |||||||||
Dental Supplies and Equipment - 0.9% | |||||||||||
2,588,157 | Align Technology, Inc.*,# | 58,647,638 | |||||||||
Diversified Operations - 3.6% | |||||||||||
5,426,551 | General Electric Co. | 200,022,670 | |||||||||
20,929,000 | Melco International Development, Ltd. | 40,544,055 | |||||||||
240,566,725 | |||||||||||
Electronic Components - Semiconductors - 7.9% | |||||||||||
9,622,786 | Advanced Micro Devices, Inc.* | 132,986,903 | |||||||||
2,190,971 | NVIDIA Corp.*,# | 72,061,036 | |||||||||
92,383 | Samsung Electronics Company, Ltd. | 56,570,323 | |||||||||
334,021 | Samsung Electronics Company, Ltd. (GDR) | 102,052,746 | |||||||||
6,085,870 | Spansion, Inc. - Class A*,£ | 59,763,243 | |||||||||
2,962,958 | Texas Instruments, Inc.# | 101,836,866 | |||||||||
525,271,117 | |||||||||||
Energy - Alternate Sources - 0.5% | |||||||||||
904,420 | Suntech Power Holdings Company, Ltd. (ADR)*,**,# | 32,812,358 | |||||||||
Entertainment Software - 1.1% | |||||||||||
1,422,392 | Electronic Arts, Inc.*,# | 71,702,781 | |||||||||
Finance - Investment Bankers/Brokers - 5.3% | |||||||||||
2,773,055 | Citigroup, Inc.# | 148,691,209 | |||||||||
450,615 | E*TRADE Financial Corp.*,# | 9,949,579 | |||||||||
2,507,470 | JP Morgan Chase & Co. | 130,639,187 | |||||||||
945,695 | UBS A.G. (U.S. Shares)** | 61,375,606 | |||||||||
350,655,581 |
Shares/Principal/Contract Amounts | Value | ||||||||||
Finance - Mortgage Loan Banker - 1.9% | |||||||||||
2,142,620 | Fannie Mae# | $ | 126,243,170 | ||||||||
Food - Canned - 0.4% | |||||||||||
896,943 | TreeHouse Foods, Inc.* | 27,033,862 | |||||||||
Forestry - 1.0% | |||||||||||
855,730 | Weyerhaeuser Co.# | 67,790,931 | |||||||||
Gold Mining - 0.4% | |||||||||||
990,235 | Barrick Gold Corp. (U.S. Shares) | 27,835,506 | |||||||||
Industrial Automation and Robotics - 1.3% | |||||||||||
1,421,580 | Rockwell Automation, Inc.# | 84,640,873 | |||||||||
Investment Companies - 0.9% | |||||||||||
2,481,530 | KKR Private Equity Investors L.P. (U.S. Shares) (144A)** | 60,452,574 | |||||||||
Machinery - Construction and Mining - 0.6% | |||||||||||
540,115 | Caterpillar, Inc.# | 39,223,151 | |||||||||
Machinery - General Industrial - 0.5% | |||||||||||
75,394,725 | Shanghai Electric Group Company, Ltd.# | 32,149,458 | |||||||||
Medical - Drugs - 4.6% | |||||||||||
1,339,150 | Merck & Company, Inc. | 68,885,876 | |||||||||
815,457 | Roche Holding A.G.** | 153,827,895 | |||||||||
878,364 | Sanofi-Aventis**,# | 80,657,452 | |||||||||
303,371,223 | |||||||||||
Medical - HMO - 1.3% | |||||||||||
1,432,855 | Coventry Health Care, Inc.* | 82,862,005 | |||||||||
Medical Products - 0.5% | |||||||||||
94,232 | Nobel Biocare Holding A.G.**,# | 34,017,264 | |||||||||
Multi-Line Insurance - 0.7% | |||||||||||
675,225 | American International Group, Inc. | 47,204,980 | |||||||||
Multimedia - 0.8% | |||||||||||
2,339,770 | News Corporation, Inc. - Class B# | 56,154,480 | |||||||||
Non-Hazardous Waste Disposal - 0.3% | |||||||||||
495,195 | Waste Management, Inc.# | 18,525,245 | |||||||||
Oil - Field Services - 1.1% | |||||||||||
2,281,620 | Halliburton Co. | 72,487,067 | |||||||||
Oil Companies - Exploration and Production - 3.5% | |||||||||||
426,730 | Apache Corp.# | 30,937,925 | |||||||||
2,946,304 | EnCana Corp. (U.S. Shares) | 154,533,645 | |||||||||
628,630 | EOG Resources, Inc. | 46,166,587 | |||||||||
231,638,157 | |||||||||||
Oil Companies - Integrated - 7.6% | |||||||||||
1,868,245 | Exxon Mobil Corp. | 148,301,288 | |||||||||
2,730,745 | Hess Corp.# | 154,969,778 | |||||||||
1,234,958 | Petro-Canada | 54,910,512 | |||||||||
1,787,004 | Suncor Energy, Inc. | 143,375,715 | |||||||||
501,557,293 | |||||||||||
Oil Refining and Marketing - 2.5% | |||||||||||
2,342,751 | Valero Energy Corp. | 164,531,403 | |||||||||
Optical Supplies - 0.4% | |||||||||||
176,340 | Alcon, Inc. (U.S. Shares)** | 23,793,556 | |||||||||
Pharmacy Services - 1.4% | |||||||||||
946,005 | Express Scripts, Inc. - Class A*,# | 90,390,778 | |||||||||
Radio - 0.3% | |||||||||||
1,661,915 | XM Satellite Radio Holdings, Inc. - Class A*,# | 19,444,406 |
See Notes to Schedules of Investments and Financial Statements.
36 Janus Core, Risk-Managed and Value Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Shares/Principal/Contract Amounts | Value | ||||||||||
Retail - Apparel and Shoe - 1.3% | |||||||||||
1,585,090 | Nordstrom, Inc.# | $ | 87,053,143 | ||||||||
Retail - Consumer Electronics - 1.0% | |||||||||||
1,358,602 | Best Buy Company, Inc. | 63,378,783 | |||||||||
Retail - Drug Store - 2.7% | |||||||||||
4,970,010 | CVS/Caremark Corp. | 180,113,162 | |||||||||
Retail - Jewelry - 1.2% | |||||||||||
1,651,730 | Tiffany & Co.# | 78,771,004 | |||||||||
Retail - Major Department Stores - 0.5% | |||||||||||
450,610 | J.C. Penney Company, Inc.# | 35,638,745 | |||||||||
Retail - Pet Food and Supplies - 1.0% | |||||||||||
2,075,815 | PETsMART, Inc.# | 68,896,300 | |||||||||
Shipbuilding - 1.1% | |||||||||||
1,767,370 | Daewoo Shipbuilding & Marine Engineering Company, Ltd. | 71,458,313 | |||||||||
Steel - Producers - 1.5% | |||||||||||
7,509,223 | Tata Steel, Ltd. | 99,095,945 | |||||||||
Super-Regional Banks - 1.4% | |||||||||||
2,739,663 | U.S. Bancorp# | 94,107,424 | |||||||||
Telecommunication Equipment - Fiber Optics - 0.4% | |||||||||||
1,209,910 | Corning, Inc.* | 28,699,065 | |||||||||
Telecommunication Services - 1.8% | |||||||||||
6,090,707 | Bharti Tele-Ventures, Ltd.* | 119,212,066 | |||||||||
Television - 1.7% | |||||||||||
10,103,012 | British Sky Broadcasting Group PLC# | 115,699,993 | |||||||||
Therapeutics - 0.8% | |||||||||||
901,825 | Amylin Pharmaceuticals, Inc.*,# | 37,272,427 | |||||||||
1,330,175 | Neurocrine Biosciences, Inc.*,# | 16,933,128 | |||||||||
54,205,555 | |||||||||||
Tobacco - 0.7% | |||||||||||
716,325 | Altria Group, Inc. | 49,369,119 | |||||||||
Toys - 1.3% | |||||||||||
3,003,047 | Marvel Entertainment, Inc.* | 88,679,978 | |||||||||
Transportation - Services - 0.8% | |||||||||||
713,925 | United Parcel Service, Inc. - Class B | 50,281,738 | |||||||||
Web Portals/Internet Service Providers - 2.2% | |||||||||||
5,251,355 | Yahoo!, Inc.*,# | 147,247,994 | |||||||||
Wireless Equipment - 1.8% | |||||||||||
450,670 | American Tower Corp. - Class A*,# | 17,125,460 | |||||||||
2,625,415 | Nokia Oyj (ADR)**,# | 66,291,729 | |||||||||
778,695 | QUALCOMM, Inc. | 34,106,841 | |||||||||
117,524,030 | |||||||||||
Total Common Stock (cost $4,765,926,162) | 5,923,062,973 | ||||||||||
Preferred Stock - 0.5% | |||||||||||
Metal - Diversified - 0.5% | |||||||||||
325,140 | Freeport-McMoRan Copper & Gold, Inc. convertible, 6.75% (cost $32,514,000) | 35,290,696 |
Shares/Principal/Contract Amounts | Value | ||||||||||
Equity-Linked Structured Notes - 9.5% | |||||||||||
Finance - Investment Bankers/Brokers - 6.9% | |||||||||||
568,723 | Goldman Sachs Group, Inc., convertible (EOG Resources, Inc., Nordstrom, Inc. Rockwell Automation, Inc.), 30.20%ß | $ | 55,958,931 | ||||||||
Lehman Brothers Holdings, Inc.: | |||||||||||
56,864,000 | convertible, (Advanced Micro Devices, Inc., Archer-Daniels-Midland Co., Valero Energy Corp.), 36.01% (144A)§ | 56,994,787 | |||||||||
56,891,000 | convertible, (Lennar Corp. QUALCOMM, Inc.,Suntech Power Holdings Company, Ltd. (ADR)) 41.26% (144A)§ | 49,489,481 | |||||||||
Merrill Lynch & Company, Inc.: | |||||||||||
974,460 | convertible, (Celgene Corp.) 6.97% (144A)§ | 57,580,841 | |||||||||
1,292,502 | convertible, (Peabody Energy Corp.) 10.50% (144A)§ | 58,653,741 | |||||||||
Morgan Stanley Co.: | |||||||||||
1,589,584 | convertible, (Archer-Daniels-Midland Co.) 8.07% (144A)§ | 58,703,337 | |||||||||
113,043 | convertible, (Google, Inc. - Class A), 7.15% (144A)§ | 53,860,468 | |||||||||
1,537,091 | convertible, (QUALCOMM, Inc.), 10.01% (144A)§ | 65,879,720 | |||||||||
457,121,306 | |||||||||||
Special Purpose Entity - 2.6% | |||||||||||
Allegro Investment Corporation S.A.: | |||||||||||
683,342 | convertible, (Apple, Inc.) 9.08% (144A)**,§ | 65,697,319 | |||||||||
2,482,440 | convertible, (Corning, Inc.) 10.40%, (144A)**,§ | 57,768,365 | |||||||||
645,333 | convertible, (Suncor Energy, Inc. (U.S. Shares)), 8.40% (144A)**,§ | 50,601,529 | |||||||||
174,067,213 | |||||||||||
Total Equity-Linked Structured Notes (cost $605,709,697) | 631,188,519 | ||||||||||
Purchased Options - Calls - 0.3% | |||||||||||
12,922 | ConocoPhillips, expires January 2009 exercise price $70.00 | 13,955,760 | |||||||||
Procter & Gamble Co. | |||||||||||
9,481 | expires January 2008 exercise price $70.00 | 1,516,960 | |||||||||
Procter & Gamble Co. | |||||||||||
9,947 | expires January 2009 exercise price $65.00 | 6,664,490 | |||||||||
Total Purchased Options - Calls (premiums paid $21,604,861) | 22,137,210 | ||||||||||
Money Markets - 0.5% | |||||||||||
33,477,000 | Janus Institutional Money Market Fund, 5.26% (cost $33,477,000) | 33,477,000 | |||||||||
Other Securities - 7.2% | |||||||||||
17,385,552 | Foreign Government Bonds† | 17,385,552 | |||||||||
459,568,117 | State Street Navigator Securities Lending Prime Portfolio† | 459,568,117 | |||||||||
99,740 | U.S. Treasury Notes/Bonds† | 99,740 | |||||||||
Total Other Securities (cost $477,053,409) | 477,053,409 | ||||||||||
Total Investments (total cost $5,936,285,129) – 107.4% | 7,122,209,807 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (7.4)% | (489,315,743 | ) | |||||||||
Net Assets – 100% | $ | 6,632,894,064 |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2007 37
Janus Growth and Income Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Summary of Investments by Country – (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Brazil | $ | 71,264,499 | 1.0 | % | |||||||
Canada | 380,655,378 | 5.3 | % | ||||||||
Cayman Islands | 32,812,358 | 0.5 | % | ||||||||
China | 32,149,458 | 0.5 | % | ||||||||
Finland | 66,291,729 | 0.9 | % | ||||||||
France | 80,657,452 | 1.1 | % | ||||||||
Hong Kong | 40,544,055 | 0.6 | % | ||||||||
India | 329,926,803 | 4.6 | % | ||||||||
Luxembourg | 174,067,213 | 2.5 | % | ||||||||
Netherlands | 60,452,574 | 0.9 | % | ||||||||
South Korea | 230,081,382 | 3.2 | % | ||||||||
Switzerland | 273,014,321 | 3.8 | % | ||||||||
United Kingdom | 115,699,993 | 1.6 | % | ||||||||
United States†† | 5,234,592,592 | 73.5 | % | ||||||||
Total | $ | 7,122,209,807 | 100.0 | % |
†† Includes Short-Term Securities and Other Securities (66.3% 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 6/8/07 | 29,400,000 | $ | 40,180,136 | $ | (1,722,584 | ) | |||||||||
Euro 10/17/07 | 4,500,000 | 6,175,555 | (183,062 | ) | |||||||||||
Swiss Franc 6/8/07 | 31,850,000 | 26,470,659 | (513,039 | ) | |||||||||||
Swiss Franc 8/15/07 | 26,300,000 | 21,976,844 | (276,996 | ) | |||||||||||
Total | $ | 94,803,194 | $ | (2,695,681 | ) |
Value | |||||||
Schedule of Written Options - Calls | |||||||
Apple, Inc. expires June 2007 1,100 contracts exercise price $115.00 | $ | (33,000 | ) | ||||
Suntech Power Holdings Company, Ltd. (ADR) expires June 2007 9,200 contracts exercise price $45.00 | (184,000 | ) | |||||
Total Written Options - Calls | |||||||
10,300 contracts (Premiums received $392,438) | $ | (217,000 | ) |
See Notes to Schedules of Investments and Financial Statements.
38 Janus Core, Risk-Managed and Value Funds April 30, 2007
INTECH Risk-Managed Stock Fund (unaudited)
Ticker: JRMSX
Managed by INTECH
Performance Overview
For the six months ended April 30, 2007, INTECH Risk-Managed Stock Fund returned 8.11%. This compares to an 8.60% gain by the S&P 500® Index, the Fund's benchmark.
Fund Snapshot
This core fund embraces the market's natural volatility in an attempt to deliver index-beating returns with index-like risk.
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 returns 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.
However, periods of underperformance such as the one we just experienced are inevitable and should be expected from time to time. From our perspective, the key is to keep these periods of underperformance both short in duration and mild in scope. The extent to which we are successful on that score will ultimately govern the longer-term success of the Fund.
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.
Janus Core, Risk-Managed and Value Funds April 30, 2007 39
INTECH Risk-Managed Stock Fund (unaudited)
INTECH Risk-Managed Stock Fund At a Glance
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2007
AT&T, Inc. Telephone - Integrated | 3.6 | % | |||||
Merck & Company, Inc. Medical - Drugs | 2.0 | % | |||||
Lockheed Martin Corp. Aerospace and Defense | 1.4 | % | |||||
Loews Corp. Multi-Line Insurance | 1.4 | % | |||||
Procter & Gamble Co. Cosmetics and Toiletries | 1.4 | % | |||||
9.8 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2007
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2007 | As of October 31, 2006 | ||||||
![]() | ![]() | ||||||
40 Janus Core, Risk-Managed and Value Funds April 30, 2007
(unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||
Fiscal Year-to-date | One Year | Since Inception* | Total Annual Fund Operating Expenses | ||||||||||||||||
INTECH Risk-Managed Stock Fund | 8.11 | % | 12.27 | % | 18.47 | % | 0.92 | % | |||||||||||
S&P 500® Index | 8.60 | % | 15.24 | % | 16.64 | % | |||||||||||||
Lipper Quartile | – | 2 | nd | 2 | nd | ||||||||||||||
Lipper Ranking - based on total return for Multi-Cap Core Funds | – | 434/897 | 172/548 |
Visit janus.com to view current performance
and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The Fund has a performance-based management fee that adjusts upward or downward based on the Fund's performance relative to an approved benchmark index over a performance measurement period.
A 2% redemption fee may be imposed on shares held for 3 months or less. Effective with purchases on and after May 15, 2007, a 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
The voluntary waiver of the Fund's management fee terminated June 25, 2004. Without such waivers, total returns from inception to June 25, 2004 would have been lower.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The proprietary mathematical process used by Enhanced Investment Technologies, LLC ("INTECH") may not achieve the desired results. Since the portfolio is regularly re-balanced, this may result in a higher portfolio turnover rate, higher expenses and potentially higher net taxable gains or losses compared to a "buy and hold" or index fund strategy.
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.
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.
There is no assurance the stated objective(s) will be met.
See Notes to Schedules of Investments for index definitions.
The weighting of securities within the portfolio may differ significantly from the weightings within the index. The index is not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – February 28, 2003
Janus Core, Risk-Managed and Value Funds April 30, 2007 41
INTECH Risk-Managed Stock Fund (unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,081.10 | $ | 4.23 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.73 | $ | 4.11 |
*Expenses are equal to the annualized expense ratio of 0.82% multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
42 Janus Core, Risk-Managed and Value Funds April 30, 2007
INTECH Risk-Managed Stock Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Common Stock – 96.0% | |||||||||||
Advertising Agencies - 0.7% | |||||||||||
70,000 | Interpublic Group of Companies, Inc.* | $ | 887,600 | ||||||||
32,200 | Omnicom Group, Inc. | 3,371,662 | |||||||||
4,259,262 | |||||||||||
Aerospace and Defense - 3.8% | |||||||||||
42,100 | Boeing Co. | 3,915,300 | |||||||||
64,400 | General Dynamics Corp. | 5,055,400 | |||||||||
84,500 | Lockheed Martin Corp. | 8,123,830 | |||||||||
3,900 | Northrop Grumman Corp. | 287,196 | |||||||||
64,800 | Raytheon Co. | 3,469,392 | |||||||||
15,000 | Rockwell Collins, Inc. | 985,050 | |||||||||
21,836,168 | |||||||||||
Agricultural Chemicals - 0.2% | |||||||||||
20,700 | Monsanto Co. | 1,221,093 | |||||||||
Agricultural Operations - 0.5% | |||||||||||
76,200 | Archer-Daniels-Midland Co. | 2,948,940 | |||||||||
Apparel Manufacturers - 1.1% | |||||||||||
32,600 | Coach, Inc.* | 1,591,858 | |||||||||
3,000 | Jones Apparel Group, Inc. | 100,170 | |||||||||
15,100 | Polo Ralph Lauren Corp. | 1,390,861 | |||||||||
38,700 | VF Corp. | 3,398,247 | |||||||||
6,481,136 | |||||||||||
Applications Software - 0.3% | |||||||||||
49,500 | Intuit, Inc.* | 1,408,275 | |||||||||
15,100 | Microsoft Corp. | 452,094 | |||||||||
1,860,369 | |||||||||||
Athletic Footwear - 0.2% | |||||||||||
21,400 | NIKE, Inc. - Class B | 1,152,604 | |||||||||
Automotive - Cars and Light Trucks - 0.8% | |||||||||||
152,000 | General Motors Corp.# | 4,746,960 | |||||||||
Automotive - Medium and Heavy Duty Trucks - 0.7% | |||||||||||
50,100 | PACCAR, Inc. | 4,207,398 | |||||||||
Automotive - Truck Parts and Equipment - Original - 0.5% | |||||||||||
28,200 | Johnson Controls, Inc. | 2,885,706 | |||||||||
Beverages - Non-Alcoholic - 1.0% | |||||||||||
12,500 | Coca-Cola Co. | 652,375 | |||||||||
4,800 | Pepsi Bottling Group, Inc. | 157,488 | |||||||||
71,100 | PepsiCo, Inc. | 4,698,999 | |||||||||
5,508,862 | |||||||||||
Brewery - 0.5% | |||||||||||
26,900 | Anheuser-Busch Companies, Inc. | 1,323,211 | |||||||||
17,800 | Molson Coors Brewing Co. - Class B | 1,678,184 | |||||||||
3,001,395 | |||||||||||
Broadcast Services and Programming - 0.2% | |||||||||||
34,400 | Clear Channel Communications, Inc. | 1,218,792 | |||||||||
Cable Television - 2.3% | |||||||||||
275,600 | Comcast Corp. - Class A* | 7,347,496 | |||||||||
253,500 | DIRECTV Group, Inc.* | 6,043,440 | |||||||||
13,390,936 | |||||||||||
Casino Services - 1.0% | |||||||||||
156,200 | International Game Technology | 5,957,468 | |||||||||
Chemicals - Diversified - 0% | |||||||||||
2,600 | E.I. du Pont de Nemours and Co. | 127,842 |
Shares or Principal Amount | Value | ||||||||||
Chemicals - Specialty - 1.1% | |||||||||||
2,200 | Ashland, Inc. | $ | 131,890 | ||||||||
68,100 | Ecolab, Inc. | 2,927,619 | |||||||||
51,200 | Hercules, Inc.* | 964,608 | |||||||||
33,000 | International Flavors & Fragrances, Inc. | 1,606,110 | |||||||||
20,600 | Sigma-Aldrich Corp. | 866,848 | |||||||||
6,497,075 | |||||||||||
Coatings and Paint Products - 0.5% | |||||||||||
41,500 | Sherwin-Williams Co. | 2,646,455 | |||||||||
Commercial Banks - 0.7% | |||||||||||
11,200 | BB&T Corp. | 466,144 | |||||||||
43,700 | Compass Bancshares, Inc.# | 2,979,466 | |||||||||
1,200 | M&T Bank Corp. | 133,608 | |||||||||
8,624 | Regions Financial Corp.# | 302,616 | |||||||||
3,600 | Synovus Financial Corp. | 113,616 | |||||||||
3,995,450 | |||||||||||
Commercial Services - 0.3% | |||||||||||
57,200 | Convergys Corp.*, | 1,444,872 | |||||||||
Commercial Services - Finance - 0% | |||||||||||
300 | Moody's Corp. | 19,836 | |||||||||
Computer Services - 0.6% | |||||||||||
38,400 | Cognizant Technology Solutions Corp.* | 3,432,960 | |||||||||
Computers - 1.4% | |||||||||||
20,200 | Apple, Inc.* | 2,015,960 | |||||||||
142,800 | Hewlett-Packard Co. | 6,017,592 | |||||||||
8,033,552 | |||||||||||
Computers - Memory Devices - 0% | |||||||||||
6,200 | Network Appliance, Inc.* | 230,702 | |||||||||
Computers - Peripheral Equipment - 0.4% | |||||||||||
45,400 | Lexmark International Group, Inc. - Class A*,# | 2,474,300 | |||||||||
Consumer Products - Miscellaneous - 0.3% | |||||||||||
9,500 | Clorox Co. | 637,260 | |||||||||
16,900 | Kimberly-Clark Corp. | 1,202,773 | |||||||||
1,840,033 | |||||||||||
Containers - Paper and Plastic - 0.4% | |||||||||||
500 | Bemis Company, Inc. | 16,610 | |||||||||
58,000 | Pactiv Corp.* | 2,005,640 | |||||||||
2,022,250 | |||||||||||
Cosmetics and Toiletries - 3.0% | |||||||||||
30,400 | Avon Products, Inc. | 1,209,920 | |||||||||
118,200 | Colgate-Palmolive Co. | 8,006,868 | |||||||||
5,800 | Estee Lauder Companies, Inc. - Class A# | 298,236 | |||||||||
124,687 | Procter & Gamble Co. | 8,018,621 | |||||||||
17,533,645 | |||||||||||
Data Processing and Management - 0.3% | |||||||||||
22,200 | Automatic Data Processing, Inc. | 993,672 | |||||||||
15,600 | Fiserv, Inc.* | 829,452 | |||||||||
1,823,124 | |||||||||||
Disposable Medical Products - 0.2% | |||||||||||
15,000 | C.R. Bard, Inc. | 1,246,950 | |||||||||
Diversified Operations - 0.6% | |||||||||||
4,600 | Cooper Industries, Ltd. - Class A | 228,896 | |||||||||
84,100 | General Electric Co. | 3,099,926 | |||||||||
3,328,822 |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2007 43
INTECH Risk-Managed Stock Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
E-Commerce/Products - 0.1% | |||||||||||
5,600 | Amazon.com, Inc.*,# | $ | 343,448 | ||||||||
E-Commerce/Services - 0.4% | |||||||||||
56,600 | IAC/InterActiveCorp*,# | 2,157,592 | |||||||||
Electric - Generation - 0.8% | |||||||||||
211,300 | AES Corp.* | 4,646,487 | |||||||||
Electric - Integrated - 8.3% | |||||||||||
67,800 | Allegheny Energy, Inc.* | 3,624,588 | |||||||||
59,500 | American Electric Power Company, Inc. | 2,988,090 | |||||||||
135,100 | CenterPoint Energy, Inc.# | 2,543,933 | |||||||||
68,400 | CMS Energy Corp. | 1,266,768 | |||||||||
12,800 | Consolidated Edison, Inc.# | 656,128 | |||||||||
30,000 | Constellation Energy Group, Inc. | 2,673,600 | |||||||||
7,400 | Dominion Resources, Inc. | 674,880 | |||||||||
9,500 | DTE Energy Co. | 480,605 | |||||||||
9,800 | Duke Energy Corp. | 201,096 | |||||||||
8,600 | Edison International | 450,210 | |||||||||
40,800 | Entergy Corp. | 4,616,112 | |||||||||
18,000 | Exelon Corp. | 1,357,380 | |||||||||
85,700 | FirstEnergy Corp. | 5,865,308 | |||||||||
91,700 | FPL Group, Inc. | 5,902,729 | |||||||||
7,652 | Integrys Energy Group, Inc.# | 429,277 | |||||||||
89,500 | PG&E Corp. | 4,528,700 | |||||||||
42,700 | Pinnacle West Capital Corp. | 2,061,983 | |||||||||
31,700 | PPL Corp. | 1,382,437 | |||||||||
2,500 | Progress Energy, Inc. | 126,375 | |||||||||
1,400 | Public Service Enterprise Group, Inc. | 121,030 | |||||||||
12,100 | Southern Co. | 457,259 | |||||||||
34,800 | TXU Corp. | 2,282,184 | |||||||||
136,600 | Xcel Energy, Inc.# | 3,290,694 | |||||||||
47,981,366 | |||||||||||
Electric Products - Miscellaneous - 0% | |||||||||||
800 | Emerson Electric Co. | 37,592 | |||||||||
Electronic Components - Semiconductors - 0.4% | |||||||||||
66,100 | NVIDIA Corp.* | 2,174,029 | |||||||||
Electronic Forms - 0% | |||||||||||
6,900 | Adobe Systems, Inc.* | 286,764 | |||||||||
Engines - Internal Combustion - 0.4% | |||||||||||
22,000 | Cummins, Inc. | 2,027,520 | |||||||||
Enterprise Software/Services - 1.5% | |||||||||||
91,100 | BMC Software, Inc.* | 2,948,907 | |||||||||
299,742 | Oracle Corp.* | 5,635,150 | |||||||||
8,584,057 | |||||||||||
Fiduciary Banks - 0.6% | |||||||||||
9,700 | Bank of New York Company, Inc. | 392,656 | |||||||||
55,500 | Mellon Financial Corp. | 2,382,615 | |||||||||
9,500 | Northern Trust Corp. | 598,025 | |||||||||
3,700 | State Street Corp. | 254,819 | |||||||||
3,628,115 | |||||||||||
Filtration and Separations Products - 0.1% | |||||||||||
7,600 | Pall Corp. | 318,820 | |||||||||
Finance - Investment Bankers/Brokers - 3.0% | |||||||||||
3,700 | Bear Stearns Companies, Inc. | 576,090 | |||||||||
48,800 | Citigroup, Inc. | 2,616,656 | |||||||||
32,200 | Goldman Sachs Group, Inc. | 7,039,242 | |||||||||
55,100 | JP Morgan Chase & Co. | 2,870,710 | |||||||||
2,700 | Lehman Brothers Holdings, Inc. | 203,256 | |||||||||
15,700 | Merrill Lynch & Company, Inc. | 1,416,611 | |||||||||
34,400 | Morgan Stanley Co. | 2,889,944 | |||||||||
17,612,509 |
Shares or Principal Amount | Value | ||||||||||
Finance - Other Services - 0.5% | |||||||||||
5,200 | Chicago Mercantile Exchange Holdings, Inc. | $ | 2,687,100 | ||||||||
Financial Guarantee Insurance - 0.2% | |||||||||||
8,300 | Ambac Financial Group, Inc. | 761,940 | |||||||||
4,000 | MBIA, Inc.# | 278,240 | |||||||||
1,040,180 | |||||||||||
Food - Confectionary - 0% | |||||||||||
3,900 | Wm. Wrigley Jr. Co. | 229,632 | |||||||||
Food - Dairy Products - 0.1% | |||||||||||
13,400 | Dean Foods Co.* | 488,162 | |||||||||
Food - Diversified - 3.3% | |||||||||||
91,200 | Campbell Soup Co. | 3,565,920 | |||||||||
130,200 | ConAgra Foods, Inc. | 3,200,316 | |||||||||
55,400 | General Mills, Inc. | 3,318,460 | |||||||||
103,600 | H.J. Heinz Co. | 4,880,596 | |||||||||
28,000 | Kellogg Co. | 1,481,480 | |||||||||
31,507 | Kraft Foods, Inc. - Class A | 1,054,539 | |||||||||
48,200 | McCormick & Company, Inc. | 1,789,184 | |||||||||
19,290,495 | |||||||||||
Food - Meat Products - 0.3% | |||||||||||
78,000 | Tyson Foods, Inc. - Class A | 1,634,880 | |||||||||
Food - Retail - 2.0% | |||||||||||
175,000 | Kroger Co. | 5,164,250 | |||||||||
181,900 | Safeway, Inc. | 6,602,970 | |||||||||
11,767,220 | |||||||||||
Food - Wholesale/Distribution - 0.4% | |||||||||||
32,600 | Supervalu, Inc. | 1,496,340 | |||||||||
20,700 | Sysco Corp. | 677,718 | |||||||||
2,174,058 | |||||||||||
Gas - Distribution - 0.7% | |||||||||||
35,700 | KeySpan Corp. | 1,478,337 | |||||||||
7,600 | Nicor, Inc.# | 389,424 | |||||||||
21,400 | NiSource, Inc. | 526,226 | |||||||||
23,200 | Sempra Energy Co. | 1,472,736 | |||||||||
3,866,723 | |||||||||||
Home Decoration Products - 0.4% | |||||||||||
70,900 | Newell Rubbermaid, Inc. | 2,174,503 | |||||||||
Hotels and Motels - 0.9% | |||||||||||
80,600 | Hilton Hotels Corp. | 2,740,400 | |||||||||
57,700 | Marriott International, Inc. - Class A | 2,608,617 | |||||||||
5,349,017 | |||||||||||
Independent Power Producer - 0% | |||||||||||
12,500 | Dynegy, Inc.* | 117,625 | |||||||||
Instruments - Scientific - 1.5% | |||||||||||
67,100 | Applera Corp. - Applied Biosystems Group | 2,096,204 | |||||||||
114,700 | Thermo Electron Corp.* | 5,971,282 | |||||||||
12,800 | Waters Corp.* | 760,704 | |||||||||
8,828,190 | |||||||||||
Internet Security - 0.1% | |||||||||||
39,100 | Symantec Corp.* | 688,160 | |||||||||
Investment Management and Advisory Services - 0.6% | |||||||||||
25,700 | Ameriprise Financial, Inc. | 1,528,379 | |||||||||
9,800 | Franklin Resources, Inc. | 1,286,838 | |||||||||
15,700 | T. Rowe Price Group, Inc. | 779,976 | |||||||||
3,595,193 |
See Notes to Schedules of Investments and Financial Statements.
44 Janus Core, Risk-Managed and Value Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Life and Health Insurance - 1.3% | |||||||||||
8,500 | CIGNA Corp. | $ | 1,322,515 | ||||||||
24,230 | Lincoln National Corp. | 1,723,965 | |||||||||
44,800 | Principal Financial Group, Inc. | 2,844,352 | |||||||||
3,900 | Prudential Financial, Inc. | 370,500 | |||||||||
17,800 | Torchmark Corp. | 1,215,740 | |||||||||
5,300 | UnumProvident Corp.# | 131,864 | |||||||||
7,608,936 | |||||||||||
Machinery - Construction and Mining - 0.4% | |||||||||||
29,000 | Terex Corp.* | 2,257,650 | |||||||||
Machinery - Farm - 0.2% | |||||||||||
12,800 | Deere & Co. | 1,400,320 | |||||||||
Medical - Biomedical and Genetic - 0.7% | |||||||||||
71,000 | Celgene Corp.* | 4,342,360 | |||||||||
Medical - Drugs - 3.7% | |||||||||||
31,200 | Abbott Laboratories | 1,766,544 | |||||||||
24,000 | Allergan, Inc. | 2,908,800 | |||||||||
19,100 | Bristol-Myers Squibb Co. | 551,226 | |||||||||
49,000 | Forest Laboratories, Inc.* | 2,607,290 | |||||||||
225,700 | Merck & Company, Inc. | 11,610,008 | |||||||||
3,800 | Pfizer, Inc. | 100,548 | |||||||||
45,200 | Schering-Plough Corp. | 1,434,196 | |||||||||
10,100 | Wyeth | 560,550 | |||||||||
21,539,162 | |||||||||||
Medical - HMO - 0.5% | |||||||||||
39,400 | Humana, Inc.* | 2,491,656 | |||||||||
2,900 | UnitedHealth Group, Inc. | 153,874 | |||||||||
2,645,530 | |||||||||||
Medical - Nursing Homes - 0.3% | |||||||||||
24,100 | Manor Care, Inc. | 1,563,849 | |||||||||
Medical - Wholesale Drug Distributors - 0.2% | |||||||||||
26,500 | AmerisourceBergen Corp. | 1,324,735 | |||||||||
Medical Information Systems - 0% | |||||||||||
1,900 | IMS Health, Inc. | 55,727 | |||||||||
Medical Labs and Testing Services - 0.8% | |||||||||||
56,400 | Laboratory Corporation of America Holdings*,# | 4,452,216 | |||||||||
Medical Products - 1.8% | |||||||||||
56,600 | Baxter International, Inc. | 3,205,258 | |||||||||
11,400 | Becton, Dickinson and Co. | 897,066 | |||||||||
3,200 | Biomet, Inc. | 138,240 | |||||||||
42,600 | Johnson & Johnson | 2,735,772 | |||||||||
36,000 | Stryker Corp. | 2,337,840 | |||||||||
2,600 | Varian Medical Systems, Inc.* | 109,746 | |||||||||
14,000 | Zimmer Holdings, Inc.* | 1,266,720 | |||||||||
10,690,642 | |||||||||||
Metal - Diversified - 0.3% | |||||||||||
27,104 | Freeport-McMoRan Copper & Gold, Inc. - Class B | 1,820,305 | |||||||||
Motorcycle and Motor Scooter Manufacturing - 0.8% | |||||||||||
72,500 | Harley-Davidson, Inc.# | 4,590,700 | |||||||||
Multi-Line Insurance - 1.8% | |||||||||||
11,200 | Allstate Corp. | 697,984 | |||||||||
3,600 | Assurant, Inc. | 207,108 | |||||||||
4,400 | Genworth Financial, Inc. - Class A | 160,556 | |||||||||
170,900 | Loews Corp. | 8,086,988 | |||||||||
23,500 | MetLife, Inc. | 1,543,950 | |||||||||
10,696,586 |
Shares or Principal Amount | Value | ||||||||||
Multimedia - 2.7% | |||||||||||
42,400 | McGraw-Hill Companies, Inc. | $ | 2,778,472 | ||||||||
305,700 | News Corporation, Inc. - Class A | 6,844,623 | |||||||||
64,100 | Time Warner, Inc. | 1,322,383 | |||||||||
135,800 | Walt Disney Co. | 4,750,284 | |||||||||
15,695,762 | |||||||||||
Networking Products - 0.8% | |||||||||||
167,600 | Cisco Systems, Inc.* | 4,481,624 | |||||||||
Non-Hazardous Waste Disposal - 0.2% | |||||||||||
3,900 | Allied Waste Industries, Inc.* | 52,143 | |||||||||
22,800 | Waste Management, Inc. | 852,948 | |||||||||
905,091 | |||||||||||
Oil - Field Services - 0% | |||||||||||
3,900 | Schlumberger, Ltd. (U.S. Shares) | 287,937 | |||||||||
Oil Companies - Exploration and Production - 0% | |||||||||||
4,400 | XTO Energy, Inc. | 238,788 | |||||||||
Oil Companies - Integrated - 1.9% | |||||||||||
19,233 | Chevron Corp. | 1,496,135 | |||||||||
87,000 | Exxon Mobil Corp. | 6,906,060 | |||||||||
26,811 | Marathon Oil Corp. | 2,722,657 | |||||||||
11,124,852 | |||||||||||
Paper and Related Products - 0.1% | |||||||||||
8,700 | Temple-Inland, Inc. | 515,388 | |||||||||
Pharmacy Services - 0.3% | |||||||||||
24,317 | Medco Health Solutions, Inc.* | 1,897,212 | |||||||||
Pipelines - 0.3% | |||||||||||
10,500 | Kinder Morgan, Inc.# | 1,118,880 | |||||||||
1,400 | Questar Corp. | 135,982 | |||||||||
1,150 | Spectra Energy Corp. | 30,015 | |||||||||
9,600 | Williams Companies, Inc. | 283,200 | |||||||||
1,568,077 | |||||||||||
Property and Casualty Insurance - 0.6% | |||||||||||
9,700 | Chubb Corp. | 522,151 | |||||||||
23,400 | SAFECO Corp. | 1,561,716 | |||||||||
30,000 | Travelers Companies, Inc. | 1,623,000 | |||||||||
3,706,867 | |||||||||||
Quarrying - 0.1% | |||||||||||
4,700 | Vulcan Materials Co. | 581,249 | |||||||||
Real Estate Management/Services - 0.2% | |||||||||||
37,100 | CB Richard Ellis Group, Inc.* | 1,255,835 | |||||||||
REIT - Apartments - 1.6% | |||||||||||
41,800 | Apartment Investment & Management Co. - Class A | 2,311,540 | |||||||||
61,600 | Archstone-Smith Trust, Inc. | 3,209,976 | |||||||||
8,000 | Avalonbay Communities, Inc. | 978,080 | |||||||||
60,500 | Equity Residential Properties Trust | 2,809,015 | |||||||||
9,308,611 | |||||||||||
REIT - Diversified - 0.9% | |||||||||||
42,400 | Vornado Realty Trust | 5,029,912 | |||||||||
REIT - Hotels - 0.1% | |||||||||||
31,300 | Host Marriott Corp. | 802,532 | |||||||||
REIT - Office Property - 1.1% | |||||||||||
51,800 | Boston Properties, Inc. | 6,089,608 | |||||||||
REIT - Regional Malls - 0.2% | |||||||||||
11,500 | Simon Property Group, Inc. | 1,325,720 |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2007 45
INTECH Risk-Managed Stock Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
REIT - Shopping Centers - 0.6% | |||||||||||
5,400 | Developers Diversified Realty Corp. | $ | 351,540 | ||||||||
66,000 | Kimco Realty Corp. | 3,172,620 | |||||||||
3,524,160 | |||||||||||
REIT - Storage - 0.3% | |||||||||||
21,500 | Public Storage, Inc. | 2,006,380 | |||||||||
REIT - Warehouse and Industrial - 0.2% | |||||||||||
21,900 | ProLogis | 1,419,120 | |||||||||
Retail - Apparel and Shoe - 0.5% | |||||||||||
5,600 | Abercrombie & Fitch Co. - Class A | 457,296 | |||||||||
34,500 | Limited, Inc. | 951,165 | |||||||||
23,200 | Nordstrom, Inc. | 1,274,144 | |||||||||
2,682,605 | |||||||||||
Retail - Auto Parts - 0.3% | |||||||||||
13,800 | AutoZone, Inc.* | 1,835,952 | |||||||||
Retail - Consumer Electronics - 0.2% | |||||||||||
38,900 | RadioShack Corp.# | 1,130,823 | |||||||||
Retail - Discount - 0.7% | |||||||||||
43,400 | Big Lots, Inc.*,# | 1,397,480 | |||||||||
3,400 | Costco Wholesale Corp. | 182,138 | |||||||||
21,600 | Dollar General Corp. | 461,160 | |||||||||
10,700 | Family Dollar Stores, Inc. | 340,688 | |||||||||
58,300 | TJX Companies, Inc. | 1,625,987 | |||||||||
4,007,453 | |||||||||||
Retail - Drug Store - 0.2% | |||||||||||
30,799 | CVS/Caremark Corp.# | 1,116,156 | |||||||||
Retail - Jewelry - 0.1% | |||||||||||
6,900 | Tiffany & Co. | 329,061 | |||||||||
Retail - Major Department Stores - 1.7% | |||||||||||
69,100 | J.C. Penney Company, Inc. | 5,465,119 | |||||||||
23,200 | Sears Holdings Corp.* | 4,429,112 | |||||||||
9,894,231 | |||||||||||
Retail - Office Supplies - 0.5% | |||||||||||
29,300 | Office Depot, Inc.* | 985,066 | |||||||||
33,000 | OfficeMax, Inc. | 1,624,260 | |||||||||
2,609,326 | |||||||||||
Retail - Regional Department Stores - 1.3% | |||||||||||
27,000 | Dillard's, Inc. - Class A | 935,010 | |||||||||
2,880 | Federated Department Stores, Inc. | 126,490 | |||||||||
90,800 | Kohl's Corp.* | 6,722,832 | |||||||||
7,784,332 | |||||||||||
Retail - Restaurants - 0.7% | |||||||||||
67,000 | McDonald's Corp. | 3,234,760 | |||||||||
5,700 | Starbucks Corp.* | 176,814 | |||||||||
13,400 | Wendy's International, Inc.# | 505,180 | |||||||||
5,900 | Yum! Brands, Inc. | 364,974 | |||||||||
4,281,728 | |||||||||||
Rubber - Tires - 0.4% | |||||||||||
67,000 | Goodyear Tire & Rubber Co.*,# | 2,228,420 | |||||||||
Savings/Loan/Thrifts - 0.2% | |||||||||||
11,500 | Hudson City Bancorp, Inc. | 153,180 | |||||||||
34,900 | Sovereign Bancorp, Inc.# | 847,023 | |||||||||
1,000,203 |
Shares or Principal Amount | Value | ||||||||||
Semiconductor Equipment - 0.2% | |||||||||||
32,900 | Novellus Systems, Inc.* | $ | 1,064,973 | ||||||||
Steel - Producers - 0.8% | |||||||||||
66,400 | Nucor Corp. | 4,213,744 | |||||||||
5,500 | United States Steel Corp. | 558,470 | |||||||||
4,772,214 | |||||||||||
Steel - Specialty - 0.7% | |||||||||||
38,500 | Allegheny Technologies, Inc. | 4,218,830 | |||||||||
Super-Regional Banks - 2.4% | |||||||||||
147,826 | Bank of America Corp. | 7,524,343 | |||||||||
2,900 | National City Corp.# | 105,995 | |||||||||
29,800 | PNC Bank Corp. | 2,208,180 | |||||||||
4,200 | SunTrust Banks, Inc. | 354,564 | |||||||||
49,200 | U.S. Bancorp | 1,690,020 | |||||||||
50,600 | Wells Fargo & Co. | 1,816,034 | |||||||||
13,699,136 | |||||||||||
Telecommunication Equipment - 0% | |||||||||||
16,600 | Avaya, Inc.* | 214,472 | |||||||||
Telecommunication Services - 0.1% | |||||||||||
8,600 | Embarq Corp. | 516,344 | |||||||||
Telephone - Integrated - 4.6% | |||||||||||
534,853 | AT&T, Inc. | 20,709,508 | |||||||||
42,500 | CenturyTel, Inc. | 1,957,125 | |||||||||
19,900 | Citizens Communications Co. | 309,843 | |||||||||
26,100 | Verizon Communications, Inc. | 996,498 | |||||||||
192,708 | Windstream Corp. | 2,817,391 | |||||||||
26,790,365 | |||||||||||
Television - 0.3% | |||||||||||
47,100 | CBS Corp. - Class B# | 1,496,367 | |||||||||
Therapeutics - 0.3% | |||||||||||
22,200 | Gilead Sciences, Inc.* | 1,814,184 | |||||||||
Tobacco - 2.1% | |||||||||||
55,500 | Altria Group, Inc. | 3,825,060 | |||||||||
72,900 | Reynolds American, Inc.# | 4,684,554 | |||||||||
67,100 | UST, Inc.# | 3,803,228 | |||||||||
12,312,842 | |||||||||||
Tools - Hand Held - 0.2% | |||||||||||
19,100 | Snap-On, Inc. | 1,040,950 | |||||||||
Toys - 1.2% | |||||||||||
67,900 | Hasbro, Inc. | 2,146,319 | |||||||||
164,900 | Mattel, Inc. | 4,666,670 | |||||||||
6,812,989 | |||||||||||
Transportation - Railroad - 0.5% | |||||||||||
54,100 | CSX Corp. | 2,335,497 | |||||||||
5,600 | Union Pacific Corp. | 639,800 | |||||||||
2,975,297 | |||||||||||
Transportation - Services - 0.1% | |||||||||||
2,700 | C.H. Robinson Worldwide, Inc. | 144,342 | |||||||||
1,100 | FedEx Corp. | 115,984 | |||||||||
3,600 | Ryder System, Inc.# | 189,504 | |||||||||
449,830 | |||||||||||
Web Portals/Internet Service Providers - 0.5% | |||||||||||
6,700 | Google, Inc. - Class A* | 3,158,246 | |||||||||
Total Common Stock (cost $481,996,853) | 558,095,166 |
See Notes to Schedules of Investments and Financial Statements.
46 Janus Core, Risk-Managed and Value Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Money Markets - 3.8% | |||||||||||
8,421,705 | Janus Institutional Cash Management Fund - Institutional Shares, 5.32% | $ | 8,421,705 | ||||||||
13,582,193 | Janus Institutional Money Market Fund - Institutional Shares, 5.26% | 13,582,193 | |||||||||
Total Money Markets (cost $22,003,898) | 22,003,898 | ||||||||||
Other Securities - 5.6% | |||||||||||
30,984,381 | State Street Navigator Securities Lending Prime Portfolio† | 30,984,381 | |||||||||
1,582,354 | U.S. Treasury Notes/Bonds† | 1,582,354 | |||||||||
Total Other Securities (cost $32,566,735) | 32,566,735 | ||||||||||
Short-Term U.S. Treasury Bill - 0.2% | |||||||||||
$ | 1,500,000 | U.S. Treasury Bill, 0%, due 6/21/07** | |||||||||
(amortized cost $1,489,534) | 1,489,534 | ||||||||||
Total Investments (total cost $538,057,020) – 105.6% | 614,155,333 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (5.6)% | (32,663,957 | ) | |||||||||
Net Assets – 100% | $ | 581,491,376 |
Summary of Investments by Country – (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Bermuda | $ | 228,896 | 0.0 | % | |||||||
Netherlands | 287,937 | 0.1 | % | ||||||||
United States†† | 613,638,500 | 99.9 | % | ||||||||
Total | $ | 614,155,333 | 100.0 | % |
†† Includes Short-Term Securities and Other Securities (90.8% excluding Short-Term Securities and Other Securities).
Schedule of Futures Contracts
As of April 30, 2007
Financial Futures - Long | |||||||||||
277 | Contracts | S&P 500® (E-mini) expires June 2007, principal amount $19,716,850, value $20,614,340 cumulative appreciation | $ | 897,490 |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2007 47
Janus Mid Cap Value Fund (unaudited)
Ticker: JMCVX
Managed by
Perkins, Wolf, McDonnell
and Company, LLC
Performance Overview
The rally that began in the second half of 2006 slowed during the first quarter of 2007. Domestic stocks suffered a mid-quarter decline tied to softness in emerging markets and problems in the subprime lending market. However the market then rebounded quickly and moved to a multiyear high in April as the Federal Reserve dropped its reference to the possibility that a rate increase may be necessary.
Fund Snapshot
This fund seeks to uncover fundamentally strong mid-sized companies with a catalyst for growth not yet recognized by the market.
During the six months ended April 30, 2007, Janus Mid Cap Value Fund's Investor Shares appreciated 11.08% and the Fund's Institutional Shares rose 11.12%, while its benchmark, the Russell Midcap® Value Index, climbed 12.78%. The Russell Midcap® Index was up 12.24% and the S&P 500® Index rose 8.60% in the same period.
Strategy in This Environment
The slight underperformance of the Fund was mainly due to our underweight position in utilities and some weakness in select industrial holdings. However, our overweight position in the materials sector, as well as some strong individual performers, aided returns, as did our underweight position in the consumer discretionary area and financials.
Our sector weightings were relatively unchanged from last period, as is normally the case. We remained overweight in energy, healthcare, industrials and information technology (IT). We were underweight in financials, consumer discretionary and utilities. In general, these relative exposures are a reflection of the number of individual investment opportunities we find rather than any top-down macroeconomic view.
Our biggest underweight for the period was utilities, as our investment philosophy emphasizes companies that we believe have strong balance sheets, positive free cash flow and relatively unregulated franchises. These attributes are rarely found in utilities companies. In the past few years we have been penalized for having an underweight exposure to this group, but over the long term this has been a sound strategy.
In addition, we were underweight financials, largely due to an underweight position in real estate investment trusts (REITs). REITs have enjoyed a tremendous run over the past few years, but we feel the industry is broadly overvalued given that the dividend yield of the typical REIT was less than that of a 10-year Treasury note at period-end and the stocks are selling above most estimates of asset value. In the six-month period ending in April, financials had the least price appreciation of any of the major sectors.
IT and Industrials Weighed on Returns
Looking at individual securities, Avocent, which makes analog and digital KVM (keyboard, video and mouse) switching systems to manage multiple servers, was our weakest performer during the most recent six-month period. The company reported disappointing earnings that we believe are a short-term glitch. We believe that Avocent's long-term fundamentals are positive so we used the price weakness to add to our position.
Southwest Airlines was another performance dampener, as it declined 10% from our recent purchase price. Earnings have been somewhat disappointing as operating costs have increased while passenger load factors have fallen slightly. However, we believe this shortfall is discounted in the stock's historically low valuation, especially given the company's superior balance sheet and leading industry position.
Select Financials and Materials Stocks Aided Performance
AllianceBernstein Holding, one of the largest investment managers in the United States and our Portfolio's largest position, was our top contributor over the last six months. The company's organic growth continued to track at a high single-digit annual rate, with contributions from the company's three distribution channels, including a particularly strong showing in its private client unit. At period end, the stock was supported by its dividend yield.
Our holding in Temple-Inland, a manufacturer of paper, corrugated packaging and building products, was our top individual contributor in the best-performing materials sector. Management responded to pressure from Carl Icahn, one of the company's largest investors, by proposing to split the company into three separate entities.
As has been the case every year except 2002, takeover activity significantly contributed to our results. In the last quarter of 2006, some of the mergers and acquisitions announced included Abbott Laboratories' purchase of Kos Pharmaceuticals,
48 Janus Core, Risk-Managed and Value Funds April 30, 2007
(unaudited)
Biomet's takeout by a group of private equity firms and the Bank of New York and Mellon Financial's merger. In 2007, the technology companies Hyperion Solutions and First Data were the primary buyouts. We purchased some of the companies involved in recent deals in 2006 after their prices had declined because of near-term earnings disappointments. This exemplifies our contrarian philosophy of buying franchises we believe have strong, long-term potential at a time when it appears investor expectations are low and more focused on short-term reports rather than on a firm's intrinsic value.
Looking Ahead
We believe that we are well positioned for longer-term trends in the markets. For several quarters we have added to larger-cap stocks as they have become relatively more attractive than small caps and the lower end of the midcap capitalization spectrum. The relative valuations of larger caps are near the lows of recent decades. Thus, given our sensitivity to risk and valuation, the larger caps have become a larger part of our Portfolio. While we recognize that these stocks could lag in the short-term, we believe these equities offer the best long-term risk/reward relationships in the current scenario.
Our style has always accommodated out-of-favor stocks with growth potential that are trading at historically low valuations. Almost every year we have benefited from merger and acquisition activity, which we expect to remain at a high level for the foreseeable future. These factors have been integral to the Fund's consistently strong past performance, even in markets favoring growth, and we believe should continue to serve us well.
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. | 0.56 | % | |||||
Temple-Inland, Inc. | 0.49 | % | |||||
Kos Pharmaceuticals, Inc. | 0.37 | % | |||||
Mosaic Co. | 0.35 | % | |||||
Kinder Morgan Energy Partners L.P. | 0.30 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Constellation Brands, Inc. - Class A | (0.23 | )% | |||||
Tech Data Corp. | (0.15 | )% | |||||
Omnicare, Inc. | (0.10 | )% | |||||
Southwest Airlines Co. | (0.09 | )% | |||||
Avocent Corp. | (0.08 | )% |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Russell Midcap® Value Index Weighting | |||||||||||||
Materials | 2.13 | % | 8.12 | % | 6.90 | % | |||||||||
Energy | 2.01 | % | 12.71 | % | 4.62 | % | |||||||||
Financials | 1.56 | % | 27.17 | % | 31.26 | % | |||||||||
Health Care | 1.54 | % | 9.98 | % | 3.63 | % | |||||||||
Industrials | 1.32 | % | 12.45 | % | 7.95 | % |
5 Lowest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Russell Midcap® Value Index Weighting | |||||||||||||
Other* | 0.01 | % | 0.00 | % | 0.00 | % | |||||||||
Telecommunication Services | 0.25 | % | 1.91 | % | 1.85 | % | |||||||||
Utilities | 0.55 | % | 2.82 | % | 15.79 | % | |||||||||
Consumer Staples | 0.71 | % | 5.51 | % | 7.26 | % | |||||||||
Consumer Discretionary | 1.08 | % | 8.57 | % | 13.41 | % |
*Industry not classified by Global Classification Standard.
Janus Core, Risk-Managed and Value Funds April 30, 2007 49
Janus Mid Cap Value Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2007
AllianceBernstein Holding L.P. Investment Management and Advisory Services | 2.4 | % | |||||
Berkshire Hathaway, Inc. - Class B Reinsurance | 1.4 | % | |||||
Kinder Morgan Energy Partners L.P. Pipelines | 1.3 | % | |||||
Anadarko Petroleum Corp. Oil Companies - Exploration and Production | 1.3 | % | |||||
Temple-Inland, Inc. Paper and Related Products | 1.3 | % | |||||
7.7 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2007
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2007 | As of October 31, 2006 | ||||||
![]() | ![]() | ||||||
50 Janus Core, Risk-Managed and Value Funds April 30, 2007
(unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Five Year | Since Inception* | Total Annual Fund Operating Expenses | Net Annual Fund Operating Expenses | ||||||||||||||||||||||
Janus Mid Cap Value Fund Investor Shares | 11.08 | % | 16.76 | % | 13.27 | % | 17.83 | % | 0.97 | % | 0.97 | % | |||||||||||||||
Institutional Shares(1) | 11.12 | % | 16.92 | % | 13.48 | % | 17.96 | % | 0.93 | % | 0.82 | % | |||||||||||||||
Russell Midcap® Value Index | 12.78 | % | 19.66 | % | 15.95 | % | 13.06 | % | |||||||||||||||||||
Lipper Quartile | – | 2 | nd | 2 | nd | 1 | st | ||||||||||||||||||||
Lipper Ranking - based on total return for Mid-Cap Value Funds | – | 128/300 | 73/178 | 4/68 |
Visit janus.com to view current performance
and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The Fund has a performance-based management fee that adjusts upward or downward based on the Fund's performance relative to an approved benchmark index over a performance measurement period.
Janus Services LLC has contractually agreed to waive the transfer agency fees applicable to the Fund's Institutional Shares to the level indicated in the prospectus until at least March 1, 2008. Total returns shown include fee waivers, if any, and without such waivers, the Fund's total return would have been lower.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. Contractual waivers agreed to by Janus Services LLC are included under "Net Annual Fund Operating Expenses." All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
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.
Berger Mid Cap Value Fund was reorganized into the Fund on April 21, 2003. The returns shown prior to April 21, 2003 for Janus Mid Cap Value Fund - Investor Shares are those of Berger Mid Cap Value Fund - Investor Shares. The returns shown prior to April 21, 2003 for Janus Mid Cap Value Fund - Institutional Shares are those of Berger Mid Cap Value Fund - Institutional Shares for the period May 17, 2002 to April 17, 2003 and Berger Mid Cap Value Fund - Investor Shares for periods prior to May 17, 2002.
Lipper 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.
August 13, 1998 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
Lipper ranking is for the Investor Share class only; other classes may have different performance characteristics.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – August 12, 1998
(1) Closed to new investors.
Janus Core, Risk-Managed and Value Funds April 30, 2007 51
Janus Mid Cap Value Fund (unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example - Investor Shares | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,110.80 | $ | 4.45 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.58 | $ | 4.26 | |||||||||
Expense Example - Institutional Shares | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,111.20 | $ | 4.03 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.98 | $ | 3.86 |
*Expenses are equal to the annualized expense ratio of 0.85% for Investor Shares and 0.77% 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.
52 Janus Core, Risk-Managed and Value Funds April 30, 2007
Janus Mid Cap Value Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Common Stock - 95.5% | |||||||||||
Agricultural Chemicals - 1.0% | |||||||||||
900,000 | Agrium, Inc. (U.S. Shares) | $ | 34,857,000 | ||||||||
1,200,000 | Mosaic Co.*,# | 35,400,000 | |||||||||
70,257,000 | |||||||||||
Airlines - 1.2% | |||||||||||
5,900,000 | Southwest Airlines Co.# | 84,665,000 | |||||||||
Apparel Manufacturers - 0.3% | |||||||||||
450,000 | Liz Claiborne, Inc.# | 20,124,000 | |||||||||
Applications Software - 0.3% | |||||||||||
800,000 | Intuit, Inc.* | 22,760,000 | |||||||||
Automotive - Truck Parts and Equipment - Original - 0.4% | |||||||||||
400,000 | Magna International, Inc. - Class A (U.S. Shares) | 31,660,000 | |||||||||
Beverages - Non-Alcoholic - 0.8% | |||||||||||
900,000 | PepsiCo, Inc. | 59,481,000 | |||||||||
Brewery - 0.3% | |||||||||||
250,000 | Molson Coors Brewing Co. - Class B | 23,570,000 | |||||||||
Broadcast Services and Programming - 0.2% | |||||||||||
500,000 | Clear Channel Communications, Inc.# | 17,715,000 | |||||||||
Building - Residential and Commercial - 0.8% | |||||||||||
950,000 | D.R. Horton, Inc.# | 21,071,000 | |||||||||
700,000 | Pulte Homes, Inc. | 18,830,000 | �� | ||||||||
650,000 | Toll Brothers, Inc.*,# | 19,357,000 | |||||||||
59,258,000 | |||||||||||
Cellular Telecommunications - 0.6% | |||||||||||
650,000 | ALLTEL Corp. | 40,748,500 | |||||||||
Chemicals - Diversified - 0.7% | |||||||||||
2,450,000 | Huntsman Corp. | 48,020,000 | |||||||||
Chemicals - Specialty - 1.6% | |||||||||||
3,000,000 | Chemtura Corp. | 33,090,000 | |||||||||
850,000 | International Flavors & Fragrances, Inc. | 41,369,500 | |||||||||
700,000 | Lubrizol Corp. | 41,958,000 | |||||||||
116,417,500 | |||||||||||
Coal - 0.5% | |||||||||||
900,000 | Arch Coal, Inc.# | 32,463,000 | |||||||||
Commercial Banks - 4.1% | |||||||||||
1,500,000 | Bank of Hawaii Corp. | 79,350,001 | |||||||||
2,758,808 | Colonial BancGroup, Inc. | 66,376,920 | |||||||||
1,000,000 | Cullen/Frost Bankers, Inc.# | 51,170,000 | |||||||||
1,100,000 | Synovus Financial Corp.# | 34,716,000 | |||||||||
2,350,012 | Valley National Bancorp# | 59,619,804 | |||||||||
291,232,725 | |||||||||||
Computers - Integrated Systems - 1.2% | |||||||||||
1,750,000 | Diebold, Inc.# | 83,422,500 | |||||||||
Computers - Memory Devices - 0.3% | |||||||||||
1,100,000 | Western Digital Corp.* | 19,448,000 | |||||||||
Consumer Products - Miscellaneous - 0.6% | |||||||||||
600,000 | Kimberly-Clark Corp. | 42,702,000 | |||||||||
Containers - Metal and Glass - 0.9% | |||||||||||
1,279,990 | Ball Corp. | 64,882,693 | |||||||||
Cosmetics and Toiletries - 1.0% | |||||||||||
1,050,000 | Procter & Gamble Co. | 67,525,500 | |||||||||
Data Processing and Management - 1.1% | |||||||||||
1,400,000 | First Data Corp. | 45,360,000 | |||||||||
650,000 | Fiserv, Inc.* | 34,560,500 | |||||||||
79,920,500 |
Shares or Principal Amount | Value | ||||||||||
Diagnostic Equipment - 0.1% | |||||||||||
137,826 | Cytyc Corp.*,# | $ | 4,855,610 | ||||||||
Distribution/Wholesale - 2.2% | |||||||||||
900,000 | Genuine Parts Co. | 44,469,000 | |||||||||
1,800,000 | Tech Data Corp.* | 63,972,000 | |||||||||
550,000 | W.W. Grainger, Inc. | 45,441,000 | |||||||||
153,882,000 | |||||||||||
Diversified Operations - 1.7% | |||||||||||
400,000 | Dover Corp. | 19,248,000 | |||||||||
1,000,000 | General Electric Co. | 36,860,000 | |||||||||
1,050,000 | Illinois Tool Works, Inc.# | 53,875,500 | |||||||||
400,000 | Tyco International, Ltd. (U.S. Shares) | 13,052,000 | |||||||||
123,035,500 | |||||||||||
Electric - Integrated - 3.0% | |||||||||||
2,300,000 | DPL, Inc.# | 72,105,000 | |||||||||
2,000,000 | PPL Corp.# | 87,220,000 | |||||||||
650,000 | Public Service Enterprise Group, Inc. | 56,192,500 | |||||||||
215,517,500 | |||||||||||
Electronic Components - Miscellaneous - 0.8% | |||||||||||
3,500,000 | Vishay Intertechnology, Inc.* | 58,275,000 | |||||||||
Electronic Components - Semiconductors - 1.4% | |||||||||||
2,100,000 | OmniVision Technologies, Inc.*,#,£ | 28,392,000 | |||||||||
2,400,000 | QLogic Corp.* | 42,912,000 | |||||||||
1,000,000 | Xilinx, Inc.# | 29,480,000 | |||||||||
100,784,000 | |||||||||||
Electronic Connectors - 0.8% | |||||||||||
1,000,000 | Thomas & Betts Corp.* | 54,480,000 | |||||||||
Electronic Measuring Instruments - 0.9% | |||||||||||
1,850,000 | Agilent Technologies, Inc.* | 63,584,500 | |||||||||
Engineering - Research and Development Services - 1.1% | |||||||||||
1,850,000 | URS Corp.* | 80,845,000 | |||||||||
Engines - Internal Combustion - 0.3% | |||||||||||
600,000 | Briggs & Stratton Corp.# | 17,802,000 | |||||||||
E-Services/Consulting - 0.6% | |||||||||||
1,713,500 | Websense, Inc.*,# | 42,340,585 | |||||||||
Fiduciary Banks - 1.1% | |||||||||||
500,000 | State Street Corp. | 34,435,000 | |||||||||
1,125,100 | Wilmington Trust Corp.# | 45,521,546 | |||||||||
79,956,546 | |||||||||||
Food - Confectionary - 0.9% | |||||||||||
550,000 | Hershey Foods Corp.# | 30,228,000 | |||||||||
650,000 | J.M. Smucker Co.# | 36,283,000 | |||||||||
66,511,000 | |||||||||||
Food - Diversified - 1.4% | |||||||||||
900,000 | General Mills, Inc.# | 53,910,000 | |||||||||
300,000 | H.J. Heinz Co.# | 14,133,000 | |||||||||
1,000,000 | Kraft Foods, Inc. - Class A | 33,470,000 | |||||||||
101,513,000 | |||||||||||
Gas - Distribution - 0.6% | |||||||||||
1,300,000 | Southern Union Co. | 39,598,000 | |||||||||
Gold Mining - 0.8% | |||||||||||
1,400,200 | Newmont Mining Corp.# | 58,388,340 | |||||||||
Hotels and Motels - 1.2% | |||||||||||
1,350,000 | Hilton Hotels Corp. | 45,900,000 | |||||||||
600,000 | Starwood Hotels & Resorts Worldwide, Inc. | 40,212,000 | |||||||||
86,112,000 |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2007 53
Janus Mid Cap Value Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Instruments - Scientific - 1.7% | |||||||||||
792,848 | Applera Corp. - Applied Biosystems Group | $ | 24,768,572 | ||||||||
1,900,000 | PerkinElmer, Inc. | 45,980,000 | |||||||||
950,000 | Thermo Electron Corp.* | 49,457,000 | |||||||||
120,205,572 | |||||||||||
Internet Infrastructure Equipment - 0.8% | |||||||||||
2,150,000 | Avocent Corp.*,# | 60,221,500 | |||||||||
Investment Management and Advisory Services - 4.2% | |||||||||||
1,850,030 | AllianceBernstein Holding L.P.# | 168,278,728 | |||||||||
650,000 | Legg Mason, Inc.# | 64,473,500 | |||||||||
2,650,000 | Waddell & Reed Financial, Inc. - Class A | 64,183,000 | |||||||||
296,935,228 | |||||||||||
Life and Health Insurance - 1.5% | |||||||||||
1,000,000 | AFLAC, Inc. | 51,340,000 | |||||||||
1,249,980 | Protective Life Corp. | 58,624,062 | |||||||||
109,964,062 | |||||||||||
Linen Supply and Related Items - 0.3% | |||||||||||
500,000 | Cintas Corp.# | 18,735,000 | |||||||||
Machinery - Construction and Mining - 0.4% | |||||||||||
600,000 | Joy Global, Inc.# | 30,378,000 | |||||||||
Machinery - Farm - 0.8% | |||||||||||
500,000 | Deere & Co. | 54,700,000 | |||||||||
Medical - Biomedical and Genetic - 1.1% | |||||||||||
750,000 | Charles River Laboratories International, Inc.*,# | 35,520,000 | |||||||||
650,000 | Invitrogen Corp.*,# | 42,555,500 | |||||||||
78,075,500 | |||||||||||
Medical - Drugs - 1.9% | |||||||||||
700,000 | Eli Lilly and Co. | 41,391,000 | |||||||||
1,100,000 | Endo Pharmaceuticals Holdings, Inc.* | 34,034,000 | |||||||||
1,100,000 | Wyeth | 61,050,000 | |||||||||
136,475,000 | |||||||||||
Medical - Generic Drugs - 0.7% | |||||||||||
500,000 | Barr Pharmaceuticals, Inc.* | 24,180,000 | |||||||||
1,250,000 | Perrigo Co. | 23,750,000 | |||||||||
47,930,000 | |||||||||||
Medical - HMO - 0.9% | |||||||||||
600,000 | Coventry Health Care, Inc.* | 34,698,000 | |||||||||
478,600 | Health Net, Inc.* | 25,873,116 | |||||||||
60,571,116 | |||||||||||
Medical Instruments - 0.8% | |||||||||||
350,000 | Beckman Coulter, Inc.# | 21,983,500 | |||||||||
750,000 | St. Jude Medical, Inc.* | 32,092,500 | |||||||||
54,076,000 | |||||||||||
Medical Labs and Testing Services - 0.4% | |||||||||||
400,000 | Laboratory Corporation of America Holdings*,# | 31,576,000 | |||||||||
Medical Products - 0.8% | |||||||||||
500,000 | Biomet, Inc. | 21,600,000 | |||||||||
270,260 | Cooper Companies, Inc.# | 13,810,286 | |||||||||
300,000 | Johnson & Johnson | 19,266,000 | |||||||||
54,676,286 | |||||||||||
Metal - Aluminum - 0.4% | |||||||||||
800,000 | Alcoa, Inc. | 28,392,000 |
Shares or Principal Amount | Value | ||||||||||
Multi-Line Insurance - 1.2% | |||||||||||
3,850,000 | Old Republic International Corp. | $ | 81,889,500 | ||||||||
Networking Products - 0.8% | |||||||||||
1,600,000 | Foundry Networks, Inc.*,# | 24,192,000 | |||||||||
1,600,000 | Juniper Networks, Inc.* | 35,776,000 | |||||||||
59,968,000 | |||||||||||
Non-Hazardous Waste Disposal - 1.7% | |||||||||||
2,250,000 | Republic Services, Inc. | 62,842,500 | |||||||||
1,500,000 | Waste Management, Inc.# | 56,115,000 | |||||||||
118,957,500 | |||||||||||
Office Automation and Equipment - 1.3% | |||||||||||
1,300,000 | Pitney Bowes, Inc.# | 62,400,000 | |||||||||
1,600,000 | Xerox Corp.* | 29,600,000 | |||||||||
92,000,000 | |||||||||||
Oil - Field Services - 0.7% | |||||||||||
1,750,000 | BJ Services Co. | 50,155,000 | |||||||||
Oil and Gas Drilling - 0.9% | |||||||||||
1,900,000 | Nabors Industries, Ltd.* | 61,028,000 | |||||||||
Oil Companies - Exploration and Production - 6.8% | |||||||||||
1,950,000 | Anadarko Petroleum Corp. | 90,986,999 | |||||||||
1,500,000 | Bill Barrett Corp.*,# | 55,350,000 | |||||||||
850,000 | Devon Energy Corp. | 61,939,500 | |||||||||
900,000 | Encore Acquisition Co.*,# | 24,039,000 | |||||||||
2,100,000 | Forest Oil Corp.* | 74,004,000 | |||||||||
1,250,000 | Newfield Exploration Co.* | 54,687,500 | |||||||||
650,000 | Noble Energy, Inc. | 38,226,500 | |||||||||
900,000 | Southwestern Energy Co.*,# | 37,800,000 | |||||||||
1,200,000 | St. Mary Land & Exploration Co.# | 43,944,000 | |||||||||
480,977,499 | |||||||||||
Oil Companies - Integrated - 0.5% | |||||||||||
300,000 | Hess Corp. | 17,025,000 | |||||||||
200,000 | Marathon Oil Corp. | 20,310,000 | |||||||||
37,335,000 | |||||||||||
Oil Field Machinery and Equipment - 0.9% | |||||||||||
1,200,000 | Grant Prideco, Inc.* | 61,848,000 | |||||||||
Oil Refining and Marketing - 0.4% | |||||||||||
400,000 | Valero Energy Corp. | 28,092,000 | |||||||||
Paper and Related Products - 1.3% | |||||||||||
1,500,000 | Temple-Inland, Inc.# | 88,860,000 | |||||||||
Pharmacy Services - 0.7% | |||||||||||
1,576,880 | Omnicare, Inc.# | 52,305,110 | |||||||||
Pipelines - 3.3% | |||||||||||
600,000 | Energy Transfer Partners L.P. | 37,554,000 | |||||||||
2,022,200 | Enterprise Products Partners L.P.# | 65,620,390 | |||||||||
1,700,000 | Kinder Morgan Energy Partners L.P.# | 94,265,000 | |||||||||
600,000 | Plains All American Pipeline L.P.# | 35,394,000 | |||||||||
232,833,390 | |||||||||||
Property and Casualty Insurance - 1.5% | |||||||||||
900,000 | Mercury General Corp.# | 48,735,000 | |||||||||
2,550,000 | Progressive Corp.# | 58,828,500 | |||||||||
107,563,500 | |||||||||||
Reinsurance - 2.6% | |||||||||||
28,000 | Berkshire Hathaway, Inc. - Class B* | 101,584,000 | |||||||||
800,000 | Everest Re Group, Ltd.# | 80,512,000 | |||||||||
182,096,000 |
See Notes to Schedules of Investments and Financial Statements.
54 Janus Core, Risk-Managed and Value Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
REIT - Apartments - 1.0% | |||||||||||
400,000 | Archstone-Smith Trust, Inc.# | $ | 20,844,000 | ||||||||
850,000 | Equity Residential Properties Trust | 39,465,500 | |||||||||
204,400 | Home Properties, Inc. | 11,385,080 | |||||||||
71,694,580 | |||||||||||
REIT - Diversified - 1.5% | |||||||||||
800,000 | Crescent Real Estate Equities, Inc.# | 16,408,000 | |||||||||
850,000 | Potlatch Corp.# | 36,881,500 | |||||||||
1,150,000 | Rayonier, Inc. | 49,875,500 | |||||||||
103,165,000 | |||||||||||
REIT - Regional Malls - 0.5% | |||||||||||
700,000 | Pennsylvania Real Estate Investment Trust | 32,522,000 | |||||||||
REIT - Shopping Centers - 0.3% | |||||||||||
500,000 | Weingarten Realty Investors# | 23,930,000 | |||||||||
REIT - Warehouse and Industrial - 1.0% | |||||||||||
488,912 | AMB Property Corp. | 29,779,630 | |||||||||
650,000 | ProLogis | 42,120,000 | |||||||||
71,899,630 | |||||||||||
Rental Auto/Equipment - 0.2% | |||||||||||
564,500 | Aaron Rents, Inc. | 16,014,865 | |||||||||
Retail - Apparel and Shoe - 2.0% | |||||||||||
2,200,000 | Charming Shoppes, Inc.*,# | 27,500,000 | |||||||||
1,100,000 | Chico's FAS, Inc.* | 28,996,000 | |||||||||
1,500,000 | Foot Locker, Inc. | 35,685,000 | |||||||||
700,000 | Ross Stores, Inc.# | 23,205,000 | |||||||||
1,000,000 | Urban Outfitters, Inc.*,# | 25,760,000 | |||||||||
141,146,000 | |||||||||||
Retail - Auto Parts - 1.1% | |||||||||||
1,006,100 | Advance Auto Parts, Inc. | 41,451,320 | |||||||||
250,000 | AutoZone, Inc.*,# | 33,260,000 | |||||||||
74,711,320 | |||||||||||
Retail - Drug Store - 0.5% | |||||||||||
1,050,000 | CVS/Caremark Corp. | 38,052,000 | |||||||||
Retail - Mail Order - 0.4% | |||||||||||
900,000 | Williams-Sonoma, Inc.# | 31,698,000 | |||||||||
Savings/Loan/Thrifts - 1.1% | |||||||||||
2,850,000 | Astoria Financial Corp.# | 75,696,000 | |||||||||
Semiconductor Components/Integrated Circuits - 0.5% | |||||||||||
1,000,000 | Linear Technology Corp.# | 37,420,000 | |||||||||
Super-Regional Banks - 3.3% | |||||||||||
1,169,440 | PNC Bank Corp. | 86,655,504 | |||||||||
800,000 | SunTrust Banks, Inc. | 67,536,000 | |||||||||
2,300,000 | U.S. Bancorp | 79,005,000 | |||||||||
233,196,504 | |||||||||||
Telecommunication Equipment - 0.2% | |||||||||||
1,100,000 | Avaya, Inc.*,# | 14,212,000 | |||||||||
Telecommunication Equipment - Fiber Optics - 0.3% | |||||||||||
1,000,000 | Corning, Inc.* | 23,720,000 | |||||||||
Telecommunication Services - 0.4% | |||||||||||
500,000 | Embarq Corp.# | 30,020,000 | |||||||||
Telephone - Integrated - 1.0% | |||||||||||
550,000 | CenturyTel, Inc.# | 25,327,500 | |||||||||
2,400,000 | Sprint Nextel Corp.# | 48,072,000 | |||||||||
73,399,500 |
Shares or Principal Amount | Value | ||||||||||
Transportation - Railroad - 1.3% | |||||||||||
1,500,000 | Kansas City Southern*,# | $ | 55,725,000 | ||||||||
700,000 | Norfolk Southern Corp. | 37,268,000 | |||||||||
92,993,000 | |||||||||||
Transportation - Truck - 0.8% | |||||||||||
950,000 | J.B. Hunt Transport Services, Inc.# | 25,707,000 | |||||||||
1,500,000 | Knight Transportation, Inc.# | 29,205,000 | |||||||||
54,912,000 | |||||||||||
Total Common Stock (cost $5,759,533,063) | 6,782,975,661 | ||||||||||
Money Markets - 6.1% | |||||||||||
282,503,991 | Janus Institutional Cash Management Fund - Institutional Shares, 5.32% | 282,503,991 | |||||||||
152,697,218 | Janus Institutional Money Market Fund - Institutional Shares, 5.26% | 152,697,218 | |||||||||
Total Money Markets (cost $435,201,209) | 435,201,209 | ||||||||||
Other Securities - 11.3% | |||||||||||
806,321,854 | State Street Navigator Securities Lending Prime Portfolio† (cost $806,321,854) | 806,321,854 | |||||||||
Total Investments (total cost $7,001,056,126) – 112.9% | 8,024,498,724 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (12.9)% | (919,340,219 | ) | |||||||||
Net Assets – 100% | $ | 7,105,158,505 |
Summary of Investments by Country – (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Bermuda | $ | 154,592,000 | 1.9 | % | |||||||
Canada | 66,517,000 | 0.8 | % | ||||||||
United States†† | 7,803,389,724 | 97.3 | % | ||||||||
Total | $ | 8,024,498,724 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (81.8% 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, 2007 55
Janus Small Cap Value Fund (unaudited) (closed to new investors)
Ticker: JSCVX
Managed by
Perkins, Wolf, McDonnell
and Company, LLC
Fund Snapshot
This fund searches for small, out-of-favor companies misunderstood by the broader investment community.
Performance Overview
The rally that began in the second half of 2006 slowed during the first quarter of 2007. Domestic stocks suffered a mid-quarter declining tied to softness in emerging markets and problems in the subprime lending market. However, the market then rebounded quickly and moved to a multiyear high in April as the Federal Reserve dropped its reference to the possibility that a rate increase may be necessary.
In the midst of this elevated volatility, during the six months ended April 30, 2007, Janus Small Cap Value Fund's Investor Shares gained 8.03% and the Fund's Institutional Shares rose 8.18%, outpacing their benchmark the Russell 2000® Value Index, which returned 6.36%.
Both stock selection and group weightings contributed positively to relative performance during the period. The Fund's underweight position to the financial sector paid off in a relative sense, as it was the only sector in the benchmark to post negative returns, whereas, our overweight position to the industrial sector was a benefit given that area's strength. In both cases, our holdings outperformed as well. On the other hand, select holdings within consumer staples and materials lagged and were the Fund's biggest detractors in a relative sense. Over the past six months, around 5% of the Fund's holdings were positively impacted by merger and acquisition (M&A) activity which aided our absolute returns.
Holdings that Contributed to Performance
Industrials have been an area of strength for the past six months. Our overweight position contributed and was bolstered by the performance of most of our larger holdings within the sector. Kansas City Southern, Albany International and Kaydon Corp., three of the Fund's ten largest overall holdings, outperformed both their peers as well as the overall benchmark.
Laidlaw International, a holding that we owned for a number of years, was one of the companies affected by M&A activity. While the deal had yet to close at period end, we liquidated the position and put some of the proceeds to work by taking small positions in truckload carriers such as Heartland Express, Knight Transportation and Celadon at prices well off their highs. These stocks have been under pressure due to capacity and pricing concerns in a slowing economy. However, we believe the balance sheet strength and experienced management teams at Heartland and Knight will enable the companies to bolster their positions in this type of environment, while we also believe Celadon has a nice growth opportunity in Mexico.
Holdings that Detracted from Performance
Oil and gas producer, Edge Petroleum, was our largest detractor during the period. The company's stock price fell as result of lower earnings in the first quarter, driven largely by lower natural gas prices and what we believe to be temporary production shortfalls. We feel comfortable with our position in the stock, given the possibility for long-term growth potential in natural gas and the company's January acquisitions, which we think will lead to a greater depth of drilling prospects going forward.
Another disappointment came from long-term holding Avocent, which makes analog and digital KVM (keyboard, video and mouse) switching systems used to manage multiple servers. In October of last year, we reported that our patience with Avocent had been rewarded. However, the company reported below-expected first-quarter 2007 earnings, due to softness in IT spending, project delays by some customers and a lower level of economic activity than the company had forecasted. We added to our position at prices near our original cost, as we believe Avocent's long term fundamentals remain positive.
Investment Strategy and Outlook
We plan to continue to take gains on stocks that approach our price targets, where we feel the risk/reward profile has deteriorated, and eliminate them when our price objective has been achieved. Over the last six months, our buys and sells have been, for the most part, balanced. However, given that relative valuations of small cap stocks are high and volatility levels are at multiple decade lows, we continue to have difficulty in becoming fully invested.
As always, our focus is on the long-term and the valuations of individual stocks. The slight pick-up in volatility during the last 12 months and during the period presented us with
56 Janus Core, Risk-Managed and Value Funds April 30, 2007
(unaudited)
the opportunity to increase our equity exposure. In many cases these stocks have been stocks with growth potential that we believed were out of favor and/or were at the higher end of our capitalization spectrum, reflecting the underperformance and relative attractiveness of that ilk from a valuation standpoint. We believe that, in general, these equities offer better risk/reward relationships in the current market and will help us provide the positive consistent results to which we are accustomed.
Thank you for your continued investment in Janus Small Cap Value Fund.
Janus Small Cap Value Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Kansas City Southern | 0.76 | % | |||||
Lubrizol Corp. | 0.58 | % | |||||
Bristol West Holdings, Inc. | 0.43 | % | |||||
Cooper Tire & Rubber Co. | 0.40 | % | |||||
Laidlaw International, Inc. | 0.39 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Edge Petroleum Corp. | (0.29 | )% | |||||
Avocent Corp. | (0.23 | )% | |||||
First Charter Corp. | (0.20 | )% | |||||
South Financial Group, Inc. | (0.19 | )% | |||||
Flushing Financial Corp. | (0.15 | )% |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Russell 2000® Value Index Weighting | |||||||||||||
Industrials | 2.95 | % | 18.41 | % | 11.12 | % | |||||||||
Energy | 1.39 | % | 13.18 | % | 4.19 | % | |||||||||
Materials | 1.25 | % | 6.74 | % | 6.16 | % | |||||||||
Information Technology | 1.13 | % | 13.03 | % | 13.41 | % | |||||||||
Consumer Discretionary | 1.05 | % | 9.94 | % | 15.70 | % |
5 Lowest Contributors/Detractors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Russell 2000® Value Index Weighting | |||||||||||||
Financials | (0.23 | )% | 26.18 | % | 34.07 | % | |||||||||
Utilities | 0.00 | % | 0.00 | % | 5.54 | % | |||||||||
Consumer Staples | 0.22 | % | 4.20 | % | 3.62 | % | |||||||||
Telecommunication Services | 0.37 | % | 0.94 | % | 1.50 | % | |||||||||
Health Care | 0.86 | % | 7.40 | % | 4.70 | % |
Janus Core, Risk-Managed and Value Funds April 30, 2007 57
Janus Small Cap Value Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2007
UAP Holding Corp. Agricultural Chemicals | 2.9 | % | |||||
Kansas City Southern Transportation - Railroad | 2.7 | % | |||||
Old Republic International Corp. Multi-Line Insurance | 2.6 | % | |||||
Casey's General Stores, Inc. Retail - Convenience Stores | 2.6 | % | |||||
Waddell & Reed Financial, Inc. - Class A Investment Management and Advisory Services | 2.1 | % | |||||
12.9 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2007
Emerging markets comprised 0.8% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2007 | As of October 31, 2006 | ||||||
![]() | ![]() | ||||||
58 Janus Core, Risk-Managed and Value Funds April 30, 2007
(unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Total Annual Fund Operating Expenses | Net Annual Fund Operating Expenses | ||||||||||||||||||||||
Janus Small Cap Value Fund(1) | |||||||||||||||||||||||||||
Investor Shares | 8.03 | % | 11.53 | % | 9.24 | % | 14.86 | % | 1.05 | % | 1.05 | % | |||||||||||||||
Institutional Shares | 8.18 | % | 11.81 | % | 9.50 | % | 15.19 | % | 1.01 | % | 0.84 | % | |||||||||||||||
Russell 2000® Value Index | 6.36 | % | 11.22 | % | 13.06 | % | 13.42 | % | |||||||||||||||||||
Lipper Quartile | – | 1 | st | 4 | th | N/A* | |||||||||||||||||||||
Lipper Ranking - based on total return for Small-Cap Core Funds | – | 98/713 | 350/432 | N/A* |
Visit janus.com to view current performance
and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
Janus Services LLC has contractually agreed to waive the transfer agency fees applicable to the Fund's Institutional Shares to the level indicated in the prospectus until at least March 1, 2008. Total returns shown include fee waivers, if any, and without such waivers, the Fund's total return would have been lower.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. Contractual waivers agreed to by Janus Services LLC are included under "Net Annual Fund Operating Expenses." All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
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.
Berger Small Cap Value Fund was reorganized into the Fund on April 21, 2003. The returns shown prior to April 21, 2003 for Janus Small Cap Value Fund - Investor Shares are those of Berger Small Cap Value Fund – Investor Shares for the period February 14, 1997 to April 17, 2003 and Berger Small Cap Value Fund - Institutional Shares (then known as The Omni Investment Fund) for periods prior to February 14, 1997. The returns shown for Janus Small Cap Value Fund - Institutional Shares are those of Berger Small Cap Value Fund - Institutional Shares for the periods prior to April 21, 2003.
Lipper 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.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
Due to certain investment strategies, the Fund may have an increased position in cash.
*The Fund's ten-year Lipper ranking is not available.
(1) Closed to new investors.
Janus Core, Risk-Managed and Value Funds April 30, 2007 59
Janus Small Cap Value Fund (unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example - Investor Shares | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,080.30 | $ | 5.21 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.79 | $ | 5.06 | |||||||||
Expense Example - Institutional Shares | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,081.80 | $ | 4.13 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.83 | $ | 4.01 |
*Expenses are equal to the annualized expense ratio of 1.01% for Investor Shares and 0.80% for Institutional Shares, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Expenses may include the effect of contractual waivers by Janus Services for Institutional Shares.
60 Janus Core, Risk-Managed and Value Funds April 30, 2007
Janus Small Cap Value Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Common Stock - 94.1% | |||||||||||
Agricultural Chemicals - 2.9% | |||||||||||
1,900,000 | UAP Holding Corp.# | $ | 52,573,000 | ||||||||
Apparel Manufacturers - 0.7% | |||||||||||
500,000 | Carter's, Inc.*,# | 13,100,000 | |||||||||
Automotive - Medium and Heavy Duty Trucks - 0.5% | |||||||||||
577,500 | A.S.V., Inc.*,# | 8,766,450 | |||||||||
Building - Mobile Home and Manufactured Homes - 0.4% | |||||||||||
450,000 | Monaco Coach Corp.# | 6,898,500 | |||||||||
Building and Construction Products - Miscellaneous - 0.6% | |||||||||||
550,000 | Trex Company, Inc.*,# | 11,214,500 | |||||||||
Chemicals - Specialty - 3.3% | |||||||||||
1,500,000 | Chemtura Corp.# | 16,545,000 | |||||||||
947,300 | Ferro Corp.# | 19,713,313 | |||||||||
400,000 | Lubrizol Corp.# | 23,976,000 | |||||||||
60,234,313 | |||||||||||
Coal - 0.4% | |||||||||||
210,000 | Arch Coal, Inc.# | 7,574,700 | |||||||||
Commercial Banks - 7.9% | |||||||||||
1,900,000 | F.N.B. Corp.# | 31,882,000 | |||||||||
1,250,000 | First Charter Corp.# | 27,425,000 | |||||||||
1,750,010 | First Financial Bancorp.# | 26,075,149 | |||||||||
350,000 | First Midwest Bancorp, Inc.# | 12,579,000 | |||||||||
1,450,000 | Old National Bancorp# | 25,926,000 | |||||||||
800,000 | South Financial Group, Inc.# | 18,104,000 | |||||||||
141,991,149 | |||||||||||
Commercial Services - 0.3% | |||||||||||
303,300 | ICT Group, Inc.*,# | 5,699,007 | |||||||||
Computer Services - 0.9% | |||||||||||
250,000 | Covansys Corp.*,# | 8,350,000 | |||||||||
350,000 | SRA International, Inc.*,# | 8,550,500 | |||||||||
16,900,500 | |||||||||||
Computers - Integrated Systems - 0.3% | |||||||||||
225,000 | Jack Henry & Associates, Inc.# | 5,343,750 | |||||||||
Consulting Services - 1.3% | |||||||||||
350,000 | MAXIMUS, Inc. | 12,229,000 | |||||||||
550,000 | Navigant Consulting, Inc.*,# | 10,549,000 | |||||||||
22,778,000 | |||||||||||
Decision Support Software - 0.5% | |||||||||||
950,000 | Wind River Systems, Inc.* | 9,338,500 | |||||||||
Distribution/Wholesale - 1.0% | |||||||||||
500,000 | Tech Data Corp.* | 17,770,000 | |||||||||
Diversified Operations - 2.2% | |||||||||||
525,000 | A.O. Smith Corp.# | 20,002,500 | |||||||||
1,250,000 | Federal Signal Corp.# | 19,737,500 | |||||||||
39,740,000 | |||||||||||
Electric Products - Miscellaneous - 0.4% | |||||||||||
200,000 | Littelfuse, Inc.*,# | 8,022,000 | |||||||||
Electronic Components - Miscellaneous - 0.9% | |||||||||||
950,000 | Vishay Intertechnology, Inc.*,# | 15,817,500 | |||||||||
Electronic Components - Semiconductors - 2.2% | |||||||||||
1,100,000 | OmniVision Technologies, Inc.*,# | 14,872,000 | |||||||||
800,000 | QLogic Corp.*,# | 14,304,000 | |||||||||
800,000 | Semtech Corp.*,# | 11,536,000 | |||||||||
40,712,000 |
Shares or Principal Amount | Value | ||||||||||
Electronic Measuring Instruments - 0.8% | |||||||||||
600,000 | Orbotech, Ltd. (U.S. Shares)* | $ | 13,758,000 | ||||||||
Engineering - Research and Development Services - 1.4% | |||||||||||
600,000 | URS Corp.* | 26,220,000 | |||||||||
Engines - Internal Combustion - 0.8% | |||||||||||
500,000 | Briggs & Stratton Corp.# | 14,835,000 | |||||||||
E-Services/Consulting - 1.0% | |||||||||||
700,000 | Websense, Inc.*,# | 17,297,000 | |||||||||
Fiduciary Banks - 0.7% | |||||||||||
450,000 | Boston Private Financial Holdings, Inc.# | 12,514,500 | |||||||||
23,100 | Wilmington Trust Corp. | 934,626 | |||||||||
13,449,126 | |||||||||||
Finance - Investment Bankers/Brokers - 1.1% | |||||||||||
600,000 | KBW, Inc.*,# | 19,596,000 | |||||||||
Food - Retail - 1.4% | |||||||||||
875,000 | Ruddick Corp.# | 26,276,250 | |||||||||
Footwear and Related Apparel - 1.7% | |||||||||||
1,100,000 | Wolverine World Wide, Inc.# | 31,438,000 | |||||||||
Industrial Automation and Robotics - 0.8% | |||||||||||
684,300 | Cognex Corp.# | 14,746,665 | |||||||||
Instruments - Scientific - 1.2% | |||||||||||
675,000 | PerkinElmer, Inc.# | 16,335,000 | |||||||||
100,000 | Varian, Inc.*,# | 5,796,000 | |||||||||
22,131,000 | |||||||||||
Internet Infrastructure Equipment - 1.0% | |||||||||||
625,000 | Avocent Corp.*,# | 17,506,250 | |||||||||
Investment Management and Advisory Services - 2.1% | |||||||||||
1,600,000 | Waddell & Reed Financial, Inc. - Class A# | 38,752,000 | |||||||||
Lasers - Systems and Components - 0.6% | |||||||||||
546,700 | Electro Scientific Industries, Inc.*,# | 11,262,020 | |||||||||
Machinery - General Industrial - 2.0% | |||||||||||
950,000 | Albany International Corp. - Class A# | 36,385,000 | |||||||||
Medical - Generic Drugs - 1.9% | |||||||||||
1,850,000 | Perrigo Co. | 35,150,000 | |||||||||
Medical Information Systems - 1.5% | |||||||||||
540,000 | Computer Programs and Systems, Inc.#,£ | 17,199,000 | |||||||||
600,000 | Dendrite International, Inc.* | 9,540,000 | |||||||||
26,739,000 | |||||||||||
Medical Products - 0.3% | |||||||||||
250,000 | Wright Medical Group, Inc.*,# | 5,905,000 | |||||||||
Medical Sterilization Products - 1.4% | |||||||||||
1,000,000 | Steris Corp.# | 25,560,000 | |||||||||
Metal Processors and Fabricators - 1.6% | |||||||||||
600,000 | Kaydon Corp.# | 28,518,000 | |||||||||
Multi-Line Insurance - 2.6% | |||||||||||
2,250,000 | Old Republic International Corp. | 47,857,500 | |||||||||
Networking Products - 0.3% | |||||||||||
400,000 | Foundry Networks, Inc.* | 6,048,000 | |||||||||
Office Furnishings - Original - 0.9% | |||||||||||
400,000 | HNI Corp.# | 16,696,000 | |||||||||
Oil - U.S. Royalty Trusts - 0.5% | |||||||||||
349,957 | Hugoton Royalty Trust# | 9,308,856 | |||||||||
Oil Companies - Exploration and Production - 8.5% | |||||||||||
300,000 | Bill Barrett Corp.*,# | 11,070,000 |
See Notes to Schedules of Investments and Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2007 61
Janus Small Cap Value Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Oil Companies - Exploration and Production - (continued) | |||||||||||
800,000 | Bois d'Arc Energy, Inc.*,# | $ | 11,976,000 | ||||||||
1,150,000 | Compton Petroleum Corp.* | 12,288,494 | |||||||||
1,750,000 | Edge Petroleum Corp.*,#,£ | 24,027,500 | |||||||||
450,000 | Encore Acquisition Co.*,# | 12,019,500 | |||||||||
800,000 | Forest Oil Corp.*, | 28,192,000 | |||||||||
950,000 | Petrohawk Energy Corp.* | 13,727,500 | |||||||||
525,000 | Quest Resource Corp.* | 5,040,000 | |||||||||
950,000 | St. Mary Land & Exploration Co.# | 34,789,000 | |||||||||
153,129,994 | |||||||||||
Oil Field Machinery and Equipment - 0.6% | |||||||||||
175,000 | Lufkin Industries, Inc.# | 10,888,500 | |||||||||
Paper and Related Products - 0.9% | |||||||||||
1,100,000 | Glatfelter# | 16,445,000 | |||||||||
Physician Practice Management - 0.4% | |||||||||||
275,000 | Matria Healthcare, Inc.*,# | 7,969,500 | |||||||||
Pipelines - 2.6% | |||||||||||
175,000 | Magellan Midstream Partners L.P.# | 8,888,250 | |||||||||
450,000 | Regency Energy Partners L.P.# | 12,033,000 | |||||||||
532,800 | Williams Partners L.P.# | 25,537,104 | |||||||||
46,458,354 | |||||||||||
Property and Casualty Insurance - 1.6% | |||||||||||
900,000 | Bristol West Holdings, Inc.# | 19,944,000 | |||||||||
175,000 | RLI Corp.# | 9,745,750 | |||||||||
29,689,750 | |||||||||||
Publishing - Books - 0.6% | |||||||||||
350,000 | Scholastic Corp.*,# | 10,804,500 | |||||||||
Publishing - Newspapers - 0.3% | |||||||||||
213,700 | Lee Enterprises, Inc. | 5,594,666 | |||||||||
Radio - 1.2% | |||||||||||
800,000 | Entercom Communications Corp.# | 22,192,000 | |||||||||
REIT - Diversified - 2.0% | |||||||||||
378,938 | Potlatch Corp.# | 16,442,120 | |||||||||
450,000 | Rayonier, Inc.# | 19,516,500 | |||||||||
35,958,620 | |||||||||||
REIT - Manufactured Homes - 1.3% | |||||||||||
425,000 | Equity Lifestyle Properties, Inc.# | 23,064,750 | |||||||||
REIT - Storage - 0.6% | |||||||||||
550,000 | U-Store-It Trust# | 10,125,500 | |||||||||
REIT - Warehouse and Industrial - 0.6% | |||||||||||
200,000 | EastGroup Properties, Inc. | 10,022,000 | |||||||||
Retail - Apparel and Shoe - 1.6% | |||||||||||
600,000 | Christopher & Banks Corp.# | 10,386,000 | |||||||||
600,000 | Finish Line (The), Inc. - Class A# | 7,914,000 | |||||||||
450,000 | Foot Locker, Inc.# | 10,705,500 | |||||||||
29,005,500 | |||||||||||
Retail - Convenience Stores - 2.6% | |||||||||||
1,900,000 | Casey's General Stores, Inc.# | 47,785,000 | |||||||||
Retail - Discount - 0.4% | |||||||||||
550,000 | Tuesday Morning Corp.# | 7,678,000 | |||||||||
Retail - Leisure Products - 0.3% | |||||||||||
280,500 | MarineMax, Inc.*,# | 5,562,315 | |||||||||
Retail - Mail Order - 0.5% | |||||||||||
250,000 | Williams-Sonoma, Inc.# | 8,805,000 |
Shares or Principal Amount | Value | ||||||||||
Retail - Propane Distribution - 1.3% | |||||||||||
700,000 | Inergy L.P.# | $ | 24,220,000 | ||||||||
Retail - Restaurants - 0.5% | |||||||||||
575,000 | Steak n Shake Co.*,# | 9,297,750 | |||||||||
Rubber - Tires - 0.3% | |||||||||||
300,000 | Cooper Tire & Rubber Co.# | 5,799,000 | |||||||||
Savings/Loan/Thrifts - 4.9% | |||||||||||
375,000 | Astoria Financial Corp.# | 9,960,000 | |||||||||
1,800,000 | Dime Community Bancshares# | 23,958,000 | |||||||||
1,100,000 | First Niagara Financial Group, Inc.# | 14,960,000 | |||||||||
1,320,000 | Flushing Financial Corp.#,£ | 20,526,000 | |||||||||
1,100,000 | Provident Financial Services, Inc.# | 18,854,000 | |||||||||
88,258,000 | |||||||||||
Semiconductor Equipment - 0.3% | |||||||||||
300,000 | Teradyne, Inc.* | 5,235,000 | |||||||||
Telecommunication Services - 1.3% | |||||||||||
449,999 | Harris Stratex Networks, Inc. - Class A*,# | 8,972,980 | |||||||||
1,200,000 | Premiere Global Services, Inc.*,# | 14,604,000 | |||||||||
23,576,980 | |||||||||||
Transportation - Railroad - 2.7% | |||||||||||
1,300,000 | Kansas City Southern*,# | 48,295,000 | |||||||||
Transportation - Truck - 1.9% | |||||||||||
700,000 | Celadon Group, Inc.*,# | 11,522,000 | |||||||||
750,000 | Heartland Express, Inc.# | 12,922,500 | |||||||||
490,000 | Knight Transportation, Inc.# | 9,540,300 | |||||||||
33,984,800 | |||||||||||
Total Common Stock (cost $1,399,305,874) | 1,709,754,015 | ||||||||||
Money Markets - 6.1% | |||||||||||
101,626,263 | Institutional Cash Management Fund - Institutional Shares, 5.32% | 101,626,263 | |||||||||
9,917,943 | Janus Institutional Money Market Fund - Institutional Shares, 5.26% | 9,917,943 | |||||||||
Total Money Markets (cost $111,544,206) | 111,544,206 | ||||||||||
Other Securities - 25.8% | |||||||||||
432,169,908 | State Street Navigator Securities Lending Prime Portfolio† | 432,169,908 | |||||||||
37,598,443 | U.S. Treasury Notes/Bonds† | 37,598,443 | |||||||||
Total Other Securities (cost $469,768,351) | 469,768,351 | ||||||||||
Total Investments (total cost $1,980,618,431) – 126.0% | 2,291,066,572 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (26.0)% | (472,538,602 | ) | |||||||||
Net Assets – 100% | $ | 1,818,527,970 |
Summary of Investments by Country – (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Canada | $ | 12,288,494 | 0.5 | % | |||||||
Israel | 13,758,000 | 0.6 | % | ||||||||
United States†† | 2,265,020,078 | 98.9 | % | ||||||||
Total | $ | 2,291,066,572 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (73.5% excluding Short-Term Securities and Other Securities).
See Notes to Schedules of Investments and Financial Statements.
62 Janus Core, Risk-Managed and Value Funds April 30, 2007
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Janus Core, Risk-Managed and Value Funds April 30, 2007 63
Statements of Assets and Liabilities
As of April 30, 2007 (unaudited) (all numbers in thousands except net asset value per share) | Janus Balanced Fund | Janus Contrarian Fund | Janus Fundamental Equity Fund(1) | Janus Growth and Income Fund | |||||||||||||||
Assets: | |||||||||||||||||||
Investments at cost(2) | $ | 2,800,508 | $ | 5,309,721 | $ | 997,642 | $ | 5,936,285 | |||||||||||
Investments at value(2) | $ | 3,248,652 | $ | 7,250,387 | $ | 1,186,348 | $ | 7,122,210 | |||||||||||
Cash | 205 | 4,354 | 852 | 1,221 | |||||||||||||||
Cash denominated in foreign currency(3) | – | – | – | 1,359 | |||||||||||||||
Restricted cash (Note 1) | – | 94,881 | – | – | |||||||||||||||
Receivables: | |||||||||||||||||||
Investments sold | 9,586 | 704 | 39 | 105,000 | |||||||||||||||
Fund shares sold | 2,775 | 20,438 | 485 | 2,026 | |||||||||||||||
Dividends | 1,469 | 6,684 | 527 | 10,144 | |||||||||||||||
Interest | 12,554 | 1,244 | 34 | 118 | |||||||||||||||
Other assets | 183 | 37 | 10 | 98 | |||||||||||||||
Forward currency contracts | 97 | 617 | – | – | |||||||||||||||
Total Assets | 3,275,521 | 7,379,346 | 1,188,295 | 7,242,176 | |||||||||||||||
Liabilities: | |||||||||||||||||||
Payables: | |||||||||||||||||||
Options written, at value(4) | – | 12,710 | 205 | 217 | |||||||||||||||
Collateral for securities loaned (Note 1) | 635,839 | 534,502 | 102,824 | 477,053 | |||||||||||||||
Due to Custodian | – | – | – | – | |||||||||||||||
Investments purchased | 10,221 | 31,147 | 9,474 | 49,973 | |||||||||||||||
Fund shares repurchased | 2,236 | 5,045 | 1,527 | 70,367 | |||||||||||||||
Dividends and distributions | 39 | 10 | – | – | |||||||||||||||
Advisory fees | 1,163 | 3,879 | 523 | 3,386 | |||||||||||||||
Transfer agent fees and expenses | 539 | 1,271 | 255 | 1,479 | |||||||||||||||
Administrative services fees | N/A | N/A | N/A | N/A | |||||||||||||||
Non-interested Trustees' fees and expenses | 19 | 29 | 9 | 58 | |||||||||||||||
Foreign tax liability | – | 4,455 | – | 3,657 | |||||||||||||||
Accrued expenses | 149 | 277 | 100 | 396 | |||||||||||||||
Variation margin | – | – | – | – | |||||||||||||||
Forward currency contracts | 1,407 | 7,484 | 325 | 2,696 | |||||||||||||||
Total Liabilities | 651,612 | 600,809 | 115,242 | 609,282 | |||||||||||||||
Net Assets | $ | 2,623,909 | $ | 6,778,537 | $ | 1,073,053 | $ | 6,632,894 | |||||||||||
Net Assets Consist of: | |||||||||||||||||||
Capital (par value and paid-in-surplus)* | $ | 2,170,359 | $ | 4,912,307 | $ | 841,943 | $ | 5,056,039 | |||||||||||
Undistributed net investment income/(loss)* | 9,054 | 6,589 | 1,736 | 43,721 | |||||||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | (2,346 | ) | (71,722 | ) | 40,951 | 353,362 | |||||||||||||
Unrealized appreciation/(depreciation) of investments and foreign currency translations | 446,842 | 1,931,363 | (5) | 188,423 | 1,179,772 | (5) | |||||||||||||
Total Net Assets | $ | 2,623,909 | $ | 6,778,537 | $ | 1,073,053 | $ | 6,632,894 | |||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 102,811 | 354,607 | 39,020 | 164,620 | |||||||||||||||
Net Asset Value Per Share | $ | 25.52 | $ | 19.12 | $ | 27.50 | $ | 40.29 | |||||||||||
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 Core Equity Fund.
(2) Investments at cost and value include $619,497,277, $520,732,353, $99,707,880, $463,246,550, $31,812,471, $786,288,256 and $458,268,885 of securities loaned for Janus Balanced Fund, Janus Contrarian Fund, Janus Fundamental Equity Fund, Janus Growth and Income Fund, INTECH Risk-Managed Stock Fund, Janus Mid Cap Value Fund and Janus Small Cap Value Fund, respectively (Note 1).
(3) Includes cost of $1,360,957 for Janus Growth and Income Fund.
(4) Includes premiums of $14,728,328, $246,324 and $392,438 on written options for Janus Contrarian Fund, Janus Fundamental Equity Fund and Janus Growth and Income Fund, respectively.
(5) Net of foreign taxes on investments of $4,455,460 and $3,656,609 for Janus Contrarian Fund and Janus Growth and Income Fund, respectively.
See Notes to Financial Statements.
64 Janus Core, Risk-Managed and Value Funds April 30, 2007
As of April 30, 2007 (unaudited) (all numbers in thousands except net asset value per share) | INTECH Risk-Managed Stock Fund | Janus Mid Cap Value Fund | Janus Small Cap Value Fund | ||||||||||||
Assets: | |||||||||||||||
Investments at cost(2) | $ | 538,057 | $ | 7,001,056 | $ | 1,980,618 | |||||||||
Investments at value(2) | $ | 614,155 | $ | 8,024,499 | $ | 2,291,067 | |||||||||
Cash | 93 | – | 244 | ||||||||||||
Cash denominated in foreign currency(3) | – | – | – | ||||||||||||
Restricted cash (Note 1) | – | – | – | ||||||||||||
Receivables: | |||||||||||||||
Investments sold | – | 43,226 | 12,097 | ||||||||||||
Fund shares sold | 703 | 6,654 | 950 | ||||||||||||
Dividends | 607 | 5,583 | 1,251 | ||||||||||||
Interest | 102 | 1,653 | 736 | ||||||||||||
Other assets | 48 | 58 | 21 | ||||||||||||
Forward currency contracts | – | – | – | ||||||||||||
Total Assets | 615,708 | 8,081,673 | 2,306,366 | ||||||||||||
Liabilities: | |||||||||||||||
Payables: | |||||||||||||||
Options written, at value(4) | – | – | – | ||||||||||||
Collateral for securities loaned (Note 1) | 32,567 | 806,322 | 469,768 | ||||||||||||
Due to Custodian | – | 34 | – | ||||||||||||
Investments purchased | – | 159,726 | 12,642 | ||||||||||||
Fund shares repurchased | 1,026 | 5,731 | 3,985 | ||||||||||||
Dividends and distributions | – | – | – | ||||||||||||
Advisory fees | 205 | 2,905 | 1,077 | ||||||||||||
Transfer agent fees and expenses | 142 | 1,282 | 192 | ||||||||||||
Administrative services fees | 24 | 288 | 76 | ||||||||||||
Non-interested Trustees' fees and expenses | 5 | 46 | 13 | ||||||||||||
Foreign tax liability | – | – | – | ||||||||||||
Accrued expenses | 60 | 180 | 85 | ||||||||||||
Variation margin | 188 | – | – | ||||||||||||
Forward currency contracts | – | – | – | ||||||||||||
Total Liabilities | 34,217 | 976,514 | 487,838 | ||||||||||||
Net Assets | $ | 581,491 | $ | 7,105,159 | $ | 1,818,528 | |||||||||
Net Assets Consist of: | |||||||||||||||
Capital (par value and paid-in-surplus)* | $ | 484,155 | $ | 5,637,382 | $ | 1,355,003 | |||||||||
Undistributed net investment income/(loss)* | 2,249 | 36,596 | 9,748 | ||||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | 18,091 | 407,738 | 143,329 | ||||||||||||
Unrealized appreciation/(depreciation) of investments and foreign currency translations | 76,996 | 1,023,443 | 310,448 | ||||||||||||
Total Net Assets | $ | 581,491 | $ | 7,105,159 | $ | 1,818,528 | |||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 34,686 | ||||||||||||||
Net Asset Value Per Share | $ | 16.76 | |||||||||||||
Net Assets - Investor Shares | $ | 5,907,410 | $ | 973,697 | |||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 231,033 | 35,779 | |||||||||||||
Net Asset Value Per Share | $ | 25.57 | $ | 27.21 | |||||||||||
Net Assets - Institutional Shares | $ | 1,197,749 | $ | 844,831 | |||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 46,642 | 30,755 | |||||||||||||
Net Asset Value Per Share | $ | 25.68 | $ | 27.47 |
See Notes to Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2007 65
Statements of Operations
For the six-month period ended April 30, 2007 (unaudited) (all numbers in thousands) | Janus Balanced Fund | Janus Contrarian Fund | Janus Fundamental Equity Fund(1) | Janus Growth and Income Fund | |||||||||||||||
Investment Income: | |||||||||||||||||||
Interest | $ | 23,553 | $ | – | $ | – | $ | 3 | |||||||||||
Securities lending income | 420 | 4,160 | 190 | 550 | |||||||||||||||
Dividends | 15,933 | 24,556 | 6,365 | 96,459 | |||||||||||||||
Dividends from affiliates | 1,589 | 4,482 | 454 | 2,087 | |||||||||||||||
Foreign tax withheld | (731 | ) | (975 | ) | (127 | ) | (1,769 | ) | |||||||||||
Total Investment Income | 40,764 | 32,223 | 6,882 | 97,330 | |||||||||||||||
Expenses: | |||||||||||||||||||
Advisory fees | 6,856 | 17,832 | 3,094 | 20,602 | |||||||||||||||
Transfer agent fees and expenses | 2,688 | 5,379 | 1,162 | 7,218 | |||||||||||||||
Registration fees | 30 | 109 | 32 | 44 | |||||||||||||||
Postage and mailing expenses | 104 | 298 | 85 | 356 | |||||||||||||||
Custodian fees | 36 | 260 | 24 | 104 | |||||||||||||||
Professional fees | 12 | 14 | 9 | 15 | |||||||||||||||
Non-interested Trustees' fees and expenses | 48 | 95 | 22 | 140 | |||||||||||||||
Printing expenses | 144 | 400 | 113 | 459 | |||||||||||||||
Administrative services fees | N/A | N/A | N/A | N/A | |||||||||||||||
Other expenses | 70 | 73 | 31 | 102 | |||||||||||||||
Non-recurring costs (Note 2) | 1 | – | – | 1 | |||||||||||||||
Cost assumed by Janus Capital Management LLC (Note 2) | (1 | ) | – | – | (1 | ) | |||||||||||||
Total Expenses | 9,988 | 24,460 | 4,572 | 29,040 | |||||||||||||||
Expense and Fee Offset | (75 | ) | (135 | ) | (35 | ) | (224 | ) | |||||||||||
Net Expenses | 9,913 | 24,325 | 4,537 | 28,816 | |||||||||||||||
Less: Excess Expense Reimbursement | – | – | – | – | |||||||||||||||
Net Expenses after Expense Reimbursement | 9,913 | 24,325 | 4,537 | 28,816 | |||||||||||||||
Net Investment Income/(Loss) | 30,851 | 7,898 | 2,345 | 68,514 | |||||||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | |||||||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 107,655 | 137,662 | 41,626 | 439,333 | |||||||||||||||
Net realized gain/(loss) from futures contracts | – | – | – | – | |||||||||||||||
Net realized gain/(loss) from option contracts | – | (43 | ) | 657 | 949 | ||||||||||||||
Change in net unrealized appreciation/(depreciation) of investments and foreign currency translations | 38,970 | 899,730 | (2) | 42,811 | 44,312 | (2) | |||||||||||||
Payment from affiliate (Note 2) | 8 | 31 | 10 | 20 | |||||||||||||||
Net Gain/(Loss) on Investments | 146,633 | 1,037,380 | 85,104 | 484,614 | |||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 177,484 | $ | 1,045,278 | $ | 87,449 | $ | 553,128 |
(1) Formerly named Janus Core Equity Fund.
(2) Net of foreign taxes on investments of $4,455,460 and $3,656,609 for Janus Contrarian Fund and Janus Growth and Income Fund, respectively.
See Notes to Financial Statements.
66 Janus Core, Risk-Managed and Value Funds April 30, 2007
For the six-month period ended April 30, 2007 (unaudited) (all numbers in thousands) | INTECH Risk-Managed Stock Fund | Janus Mid Cap Value Fund | Janus Small Cap Value Fund | ||||||||||||
Investment Income: | |||||||||||||||
Interest | $ | 37 | $ | 41 | $ | 8 | |||||||||
Securities lending income | 5 | 425 | 686 | ||||||||||||
Dividends | 4,879 | 72,090 | 13,346 | ||||||||||||
Dividends from affiliates | 605 | 10,995 | 4,277 | ||||||||||||
Foreign tax withheld | – | (52 | ) | – | |||||||||||
Total Investment Income | 5,526 | 83,499 | 18,317 | ||||||||||||
Expenses: | |||||||||||||||
Advisory fees | 1,171 | 18,669 | 6,752 | ||||||||||||
Transfer agent fees and expenses | 614 | 6,628 | 1,849 | ||||||||||||
Registration fees | 31 | 119 | 52 | ||||||||||||
Postage and mailing expenses | 42 | 144 | 53 | ||||||||||||
Custodian fees | 12 | 33 | 14 | ||||||||||||
Professional fees | 17 | 16 | 15 | ||||||||||||
Non-interested Trustees' fees and expenses | 12 | 129 | 31 | ||||||||||||
Printing expenses | 69 | 229 | 94 | ||||||||||||
Administrative services fees | 135 | 1,648 | 474 | ||||||||||||
Other expenses | 92 | 110 | 51 | ||||||||||||
Non-recurring costs (Note 2) | – | 1 | – | ||||||||||||
Cost assumed by Janus Capital Management LLC (Note 2) | – | (1 | ) | – | |||||||||||
Total Expenses | 2,195 | 27,725 | 9,385 | ||||||||||||
Expense and Fee Offset | (19 | ) | (145 | ) | (90 | ) | |||||||||
Net Expenses | 2,176 | 27,580 | 9,295 | ||||||||||||
Less: Excess Expense Reimbursement | – | (179 | ) | (726 | ) | ||||||||||
Net Expenses after Expense Reimbursement | 2,176 | 27,401 | 8,569 | ||||||||||||
Net Investment Income/(Loss) | 3,350 | 56,098 | 9,748 | ||||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | |||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 18,753 | 420,202 | 144,316 | ||||||||||||
Net realized gain/(loss) from futures contracts | 1,091 | – | – | ||||||||||||
Net realized gain/(loss) from option contracts | – | (498 | ) | – | |||||||||||
Change in net unrealized appreciation/(depreciation) of investments and foreign currency translations | 19,631 | 221,570 | (6,440 | ) | |||||||||||
Payment from affiliate (Note 2) | 7 | 19 | 5 | ||||||||||||
Net Gain/(Loss) on Investments | 39,482 | 641,293 | 137,881 | ||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 42,832 | $ | 697,391 | $ | 147,629 |
See Notes to Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2007 67
Statements of Changes in Net Assets
For the six-month period ended April 30, 2007 (unaudited) | |||||||||||||||||||||||||||
and for the fiscal year ended October 31, 2006 (all numbers in thousands) | Janus Balanced Fund | Janus Contrarian Fund | Janus Fundamental Equity Fund(1) | ||||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2007 | 2006 | ||||||||||||||||||||||
Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | $ | 30,851 | $ | 46,295 | $ | 7,898 | $ | 49,378 | $ | 2,345 | $ | 4,688 | |||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 107,655 | 158,900 | 137,662 | 462,282 | 41,626 | 75,801 | |||||||||||||||||||||
Net realized gain/(loss) from futures contracts | – | – | – | – | – | – | |||||||||||||||||||||
Net realized gain/(loss) from option contracts | – | – | (43 | ) | (459 | ) | 657 | – | |||||||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments and foreign currency translations | 38,970 | 108,343 | 899,730 | 219,385 | 42,811 | 35,646 | |||||||||||||||||||||
Payment from affiliate (Note 2) | 8 | 61 | 31 | 15 | 10 | 1 | |||||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 177,484 | 313,599 | 1,045,278 | 730,601 | 87,449 | 116,136 | |||||||||||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||||||||||
Net investment income* | (28,742 | ) | (46,407 | ) | (49,011 | ) | (7,685 | ) | (4,601 | ) | (2,545 | ) | |||||||||||||||
Net realized gain/(loss) from investment transactions* | – | – | (430,951 | ) | (37,165 | ) | (1,001 | ) | – | ||||||||||||||||||
Net (Decrease) from Dividends and Distributions | (28,742 | ) | (46,407 | ) | (479,962 | ) | (44,850 | ) | (5,602 | ) | (2,545 | ) | |||||||||||||||
Capital Share Transactions: | |||||||||||||||||||||||||||
Shares sold | 224,227 | 251,997 | 2,124,146 | 1,087,962 | 124,281 | 488,915 | |||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||
Reinvested dividends and distributions | 28,337 | 45,658 | 469,017 | 43,903 | 5,486 | 2,455 | |||||||||||||||||||||
Shares repurchased | (255,634 | ) | (593,917 | ) | (382,871 | ) | (721,011 | ) | (156,876 | ) | (307,535 | ) | |||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | (3,070 | ) | (296,262 | ) | 2,210,292 | 410,854 | (27,109 | ) | 183,835 | ||||||||||||||||||
Net Increase/(Decrease) in Net Assets | 145,672 | (29,070 | ) | 2,775,608 | 1,096,605 | 54,738 | 297,426 | ||||||||||||||||||||
Net Assets: | |||||||||||||||||||||||||||
Beginning of period | 2,478,237 | 2,507,307 | 4,002,929 | 2,906,324 | 1,018,315 | 720,889 | |||||||||||||||||||||
End of period | $ | 2,623,909 | $ | 2,478,237 | $ | 6,778,537 | $ | 4,002,929 | $ | 1,073,053 | $ | 1,018,315 | |||||||||||||||
Undistributed net investment income/(loss)* | $ | 9,054 | $ | 6,945 | $ | 6,589 | $ | 47,702 | $ | 1,736 | $ | 3,992 |
*See Note 4 in Notes to Financial Statements.
(1) Formerly named Janus Core Equity Fund
See Notes to Financial Statements.
68 Janus Core, Risk-Managed and Value Funds April 30, 2007
For the six-month period ended April 30, 2007 (unaudited) | |||||||||||||||||||
and for the fiscal year ended October 31, 2006 (all numbers in thousands) | Janus Growth and Income Fund | INTECH Risk-Managed Stock Fund | |||||||||||||||||
2007 | 2006 | 2007 | 2006 | ||||||||||||||||
Operations: | |||||||||||||||||||
Net investment income/(loss) | $ | 68,514 | $ | 126,803 | $ | 3,350 | $ | 3,499 | |||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 439,333 | 451,415 | 18,753 | 24,487 | |||||||||||||||
Net realized gain/(loss) from futures contracts | – | – | 1,091 | 441 | |||||||||||||||
Net realized gain/(loss) from option contracts | 949 | – | – | – | |||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments and foreign currency translations | 44,312 | 84,529 | 19,631 | 28,593 | |||||||||||||||
Payment from affiliate (Note 2) | 20 | 5 | 7 | – | |||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 553,128 | 662,752 | 42,832 | 57,020 | |||||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||
Net investment income* | (47,362 | ) | (96,014 | ) | (3,639 | ) | (3,348 | ) | |||||||||||
Net realized gain/(loss) from investment transactions* | – | – | (26,902 | ) | (19,387 | ) | |||||||||||||
Net (Decrease) from Dividends and Distributions | (47,362 | ) | (96,014 | ) | (30,541 | ) | (22,735 | ) | |||||||||||
Capital Share Transactions: | |||||||||||||||||||
Shares sold | 296,223 | 1,479,788 | 112,797 | 180,936 | |||||||||||||||
Redemption fees | N/A | N/A | 56 | 55 | |||||||||||||||
Reinvested dividends and distributions | 46,251 | 93,503 | 30,089 | 22,377 | |||||||||||||||
Shares repurchased | (996,163 | ) | (1,094,153 | ) | (72,324 | ) | (118,285 | ) | |||||||||||
Net Increase/(Decrease) from Capital Share Transactions | (653,689 | ) | 479,138 | 70,618 | 85,083 | ||||||||||||||
Net Increase/(Decrease) in Net Assets | (147,923 | ) | 1,045,876 | 82,909 | 119,368 | ||||||||||||||
Net Assets: | |||||||||||||||||||
Beginning of period | 6,780,817 | 5,734,941 | 498,582 | 379,214 | |||||||||||||||
End of period | $ | 6,632,894 | $ | 6,780,817 | $ | 581,491 | $ | 498,582 | |||||||||||
Undistributed net investment income/(loss)* | $ | 43,721 | $ | 22,569 | $ | 2,249 | $ | 2,538 |
See Notes to Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2007 69
Statements of Changes in Net Assets (continued)
For the six-month period ended April 30, 2007 (unaudited) | |||||||||||||||||||
and for the fiscal year ended October 31, 2006 (all numbers in thousands) | Janus Mid Cap Value Fund | Janus Small Cap Value Fund | |||||||||||||||||
2007 | 2006 | 2007 | 2006 | ||||||||||||||||
Operations: | |||||||||||||||||||
Net investment income/(loss) | $ | 56,098 | $ | 97,539 | $ | 9,748 | $ | 32,389 | |||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 420,202 | 394,846 | 144,316 | 308,738 | |||||||||||||||
Net realized gain/(loss) from option contracts | (498 | ) | – | – | – | ||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments foreign currency translations | 221,570 | 382,219 | (6,440 | ) | (38,514 | ) | |||||||||||||
Payment from affiliate (Note 2) | 19 | 2 | 5 | 3 | |||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 697,391 | 874,606 | 147,629 | 302,616 | |||||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||
Net investment income* | |||||||||||||||||||
Investor Shares | (65,897 | ) | (44,875 | ) | (16,023 | ) | (12,646 | ) | |||||||||||
Institutional Shares | (14,793 | ) | (9,171 | ) | (14,570 | ) | (13,292 | ) | |||||||||||
Net realized gain from investment transactions* | |||||||||||||||||||
Investor Shares | (339,400 | ) | (338,149 | ) | (171,007 | ) | (186,826 | ) | |||||||||||
Institutional Shares | (69,308 | ) | (60,135 | ) | (140,006 | ) | (165,355 | ) | |||||||||||
Net Decrease from Dividends and Distributions | (489,398 | ) | (452,330 | ) | (341,606 | ) | (378,119 | ) | |||||||||||
Capital Share Transactions: | |||||||||||||||||||
Shares sold | |||||||||||||||||||
Investor Shares | 737,911 | 1,506,032 | 59,485 | 166,714 | |||||||||||||||
Institutional Shares | 79,012 | 297,008 | 74,821 | 122,109 | |||||||||||||||
Reinvested dividends and distributions | |||||||||||||||||||
Investor Shares | 390,397 | 368,965 | 180,152 | 179,568 | |||||||||||||||
Institutional Shares | 81,871 | 67,559 | 148,742 | 169,560 | |||||||||||||||
Shares repurchased | |||||||||||||||||||
Investor Shares | (574,867 | ) | (1,231,742 | ) | (313,190 | ) | (494,047 | ) | |||||||||||
Institutional Shares | (66,652 | ) | (103,713 | ) | (214,404 | ) | (515,328 | ) | |||||||||||
Net Increase/(Decrease) from Capital Share Transactions | 647,672 | 904,109 | (64,394 | ) | (371,424 | ) | |||||||||||||
Net Increase/(Decrease) in Net Assets | 855,665 | 1,326,385 | (258,371 | ) | (446,927 | ) | |||||||||||||
Net Assets: | |||||||||||||||||||
Beginning of period | 6,249,494 | 4,923,109 | 2,076,899 | 2,523,826 | |||||||||||||||
End of period | $ | 7,105,159 | $ | 6,249,494 | $ | 1,818,528 | $ | 2,076,899 | |||||||||||
Undistributed net investment income/(loss)* | $ | 36,596 | $ | 61,188 | $ | 9,748 | $ | 30,593 |
*See Note 4 in Notes to Financial Statements.
See Notes to Financial Statements.
70 Janus Core, Risk-Managed and Value Funds April 30, 2007
Financial Highlights
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) | Janus Balanced Fund | ||||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 24.07 | $ | 21.62 | $ | 20.33 | $ | 19.34 | $ | 18.08 | $ | 19.27 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .30 | .43 | .42 | .38 | .38 | .47 | |||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | 1.43 | 2.45 | 1.28 | .99 | 1.28 | (1.20 | ) | ||||||||||||||||||||
Total from Investment Operations | 1.73 | 2.88 | 1.70 | 1.37 | 1.66 | (.73 | ) | ||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.28 | ) | (.43 | ) | (.41 | ) | (.38 | ) | (.40 | ) | (.46 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | |||||||||||||||||||||
Payment from affiliate | – | (1) | – | (1) | – | (1) | – | (1) | – | – | |||||||||||||||||
Total Distributions and Other | (.28 | ) | (.43 | ) | (.41 | ) | (.38 | ) | (.40 | ) | (.46 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 25.52 | $ | 24.07 | $ | 21.62 | $ | 20.33 | $ | 19.34 | $ | 18.08 | |||||||||||||||
Total Return** | 7.24 | %(2) | 13.41 | %(2) | 8.43 | %(2) | 7.11 | %(2) | 9.34 | % | (3.85 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 2,623,909 | $ | 2,478,237 | $ | 2,507,307 | $ | 2,849,423 | $ | 3,928,565 | $ | 3,935,993 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 2,524,867 | $ | 2,499,295 | $ | 2,720,829 | $ | 3,234,587 | $ | 4,004,101 | $ | 4,278,174 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.80 | % | 0.82 | % | 0.80 | % | 0.87 | % | 0.89 | % | 0.86 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.79 | % | 0.81 | % | 0.79 | % | 0.87 | % | 0.88 | % | 0.84 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.46 | % | 1.85 | % | 1.93 | % | 1.82 | % | 2.00 | % | 2.44 | % | |||||||||||||||
Portfolio Turnover Rates*** | 56 | % | 50 | % | 47 | % | 45 | % | 73 | % | 88 | % | |||||||||||||||
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) | Janus Contrarian Fund | ||||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 17.44 | $ | 14.20 | $ | 11.74 | $ | 9.97 | $ | 6.95 | $ | 8.42 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .02 | .21 | .05 | .01 | – | (5) | – | (5) | |||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | 3.68 | 3.25 | 2.44 | 1.76 | 3.03 | (1.45 | ) | ||||||||||||||||||||
Total from Investment Operations | 3.70 | 3.46 | 2.49 | 1.77 | 3.03 | (1.45 | ) | ||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.21 | ) | (.04 | ) | (.03 | ) | – | (.01 | )(6) | (.02 | ) | ||||||||||||||||
Distributions (from capital gains)* | (1.81 | ) | (.18 | ) | – | – | – | – | |||||||||||||||||||
Payment from affiliate | – | (1) | – | (1) | – | (1) | – | (1) | – | – | |||||||||||||||||
Total Distributions and Other | (2.02 | ) | (.22 | ) | (.03 | ) | – | (.01 | ) | (.02 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 19.12 | $ | 17.44 | $ | 14.20 | $ | 11.74 | $ | 9.97 | $ | 6.95 | |||||||||||||||
Total Return** | 22.86 | %(2) | 24.60 | %(2) | 21.19 | %(2) | 17.75 | %(2) | 43.57 | % | (17.23 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 6,778,537 | $ | 4,002,929 | $ | 2,906,324 | $ | 2,383,959 | $ | 2,498,836 | $ | 1,287,494 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 5,174,297 | $ | 3,511,568 | $ | 2,716,329 | $ | 2,497,342 | $ | 1,862,723 | $ | 1,808,435 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.95 | % | 0.95 | % | 0.93 | % | 0.98 | % | 1.02 | % | 1.01 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.95 | % | 0.94 | % | 0.93 | % | 0.98 | % | 1.01 | % | 0.98 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.31 | % | 1.41 | % | 0.45 | % | 0.07 | % | (0.17 | )% | 0.03 | % | |||||||||||||||
Portfolio Turnover Rates*** | 21 | % | 39 | % | 42 | % | 30 | % | 44 | % | 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) Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year or period ended.
(2) During the fiscal year or period ended, Janus Capital and/or Janus Services LLC ("Janus Services") fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%.
(3) See "Explanations of Charts, Tables and Financial Statements."
(4) The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2007, 2006, 2005 and 2004.
(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, 2007 71
Financial Highlights (continued)
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) | Janus Fundamental Equity Fund(1) | ||||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 25.43 | 22.15 | $ | 18.78 | $ | 17.04 | $ | 14.99 | $ | 16.78 | ||||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .06 | .11 | .11 | .05 | .07 | .11 | |||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | 2.15 | 3.24 | 3.34 | 1.75 | 2.09 | (1.81 | ) | ||||||||||||||||||||
Total from Investment Operations | 2.21 | 3.35 | 3.45 | 1.80 | 2.16 | (1.70 | ) | ||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.11 | ) | (.07 | ) | (.08 | ) | (.06 | ) | (.11 | ) | (.09 | ) | |||||||||||||||
Distributions (from capital gains)* | (.03 | ) | – | – | – | – | – | ||||||||||||||||||||
Payment from affiliate | – | (2) | – | (2) | – | (2) | – | – | – | ||||||||||||||||||
Total Distributions and Other | (.14 | ) | (.07 | ) | (.08 | ) | (.06 | ) | (.11 | ) | (.09 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 27.50 | $ | 25.43 | $ | 22.15 | $ | 18.78 | $ | 17.04 | $ | 14.99 | |||||||||||||||
Total Return** | 8.72 | %(3) | 15.15 | %(3) | 18.44 | %(4) | 10.61 | % | 14.54 | % | (10.26 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 1,073,053 | $ | 1,018,315 | $ | 720,889 | $ | 613,269 | $ | 707,852 | $ | 706,548 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 1,042,681 | $ | 955,696 | $ | 652,913 | $ | 653,639 | $ | 708,023 | $ | 801,601 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6) | 0.88 | % | 0.92 | % | 0.90 | % | 0.97 | % | 0.97 | % | 0.92 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5) | 0.88 | % | 0.91 | % | 0.89 | % | 0.97 | % | 0.96 | % | 0.89 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.45 | % | 0.49 | % | 0.50 | % | 0.24 | % | 0.40 | % | 0.66 | % | |||||||||||||||
Portfolio Turnover Rates*** | 36 | % | 46 | % | 74 | % | 58 | % | 77 | % | 98 | % | |||||||||||||||
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) | Janus Growth and Income Fund | ||||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 37.36 | $ | 33.97 | $ | 29.29 | $ | 27.12 | $ | 23.70 | $ | 27.99 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .42 | .61 | .24 | .07 | .17 | .20 | |||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | 2.78 | 3.30 | 4.66 | 2.17 | 3.43 | (4.28 | ) | ||||||||||||||||||||
Total from Investment Operations | 3.20 | 3.91 | 4.90 | 2.24 | 3.60 | (4.08 | ) | ||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.27 | ) | (.52 | ) | (.22 | ) | (.07 | ) | (.18 | ) | (.21 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | |||||||||||||||||||||
Payment from affiliate | – | (2) | – | (2) | – | (2) | – | (2) | – | – | |||||||||||||||||
Total Distributions and Other | (.27 | ) | (.52 | ) | (.22 | ) | (.07 | ) | (.18 | ) | (.21 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 40.29 | $ | 37.36 | $ | 33.97 | $ | 29.29 | $ | 27.12 | $ | 23.70 | |||||||||||||||
Total Return** | 8.61 | %(3) | 11.56 | %(3) | 16.79 | %(3) | 8.28 | %(3) | 15.20 | % | (14.62 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 6,632,894 | $ | 6,780,817 | $ | 5,734,941 | $ | 5,177,210 | $ | 6,003,140 | $ | 5,327,674 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 6,713,986 | $ | 6,677,364 | $ | 5,454,668 | $ | 5,568,170 | $ | 5,715,041 | $ | 6,479,535 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6) | 0.87 | % | 0.89 | % | 0.88 | % | 0.92 | % | 0.91 | % | 0.90 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5) | 0.87 | % | 0.88 | % | 0.87 | % | 0.92 | % | 0.91 | % | 0.88 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.06 | % | 1.90 | % | 0.68 | % | 0.24 | % | 0.67 | % | 0.73 | % | |||||||||||||||
Portfolio Turnover Rates*** | 60 | % | 50 | % | 38 | % | 41 | % | 50 | % | 49 | % |
* 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) Formerly named Janus Core Equity Fund.
(2) Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year or period ended.
(3) During the fiscal year 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 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%.
(5) See "Explanations of Charts, Tables and Financial Statements."
(6) The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2007, 2006, 2005 and 2004.
See Notes to Financial Statements.
72 Janus Core, Risk-Managed and Value Funds April 30, 2007
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) | INTECH Risk-Managed Stock Fund | ||||||||||||||||||||||
and through each fiscal year or period ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003(1) | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 16.46 | $ | 15.28 | $ | 13.98 | $ | 12.44 | $ | 10.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income/(loss) | .10 | .12 | .12 | .08 | .01 | ||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | 1.19 | 1.96 | 1.89 | 1.75 | 2.43 | ||||||||||||||||||
Total from Investment Operations | 1.29 | 2.08 | 2.01 | 1.83 | 2.44 | ||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||
Dividends (from net investment income)* | (.12 | ) | (.13 | ) | (.08 | ) | (.03 | ) | – | ||||||||||||||
Distributions (from capital gains)* | (.87 | ) | (.77 | ) | (.63 | ) | (.26 | ) | – | ||||||||||||||
Redemption fees | – | (2) | – | (2) | – | (2) | – | (2) | – | (2) | |||||||||||||
Payment from affiliate | – | (3) | – | – | – | – | |||||||||||||||||
Total Distributions and Other | (.99 | ) | (.90 | ) | (.71 | ) | (.29 | ) | – | ||||||||||||||
Net Asset Value, End of Period | $ | 16.76 | $ | 16.46 | $ | 15.28 | $ | 13.98 | $ | 12.44 | |||||||||||||
Total Return** | 8.11 | %(4) | 14.10 | % | 14.79 | % | 15.06 | % | 24.40 | % | |||||||||||||
Net Assets, End of Period (in thousands) | $ | 581,491 | $ | 498,582 | $ | 379,214 | $ | 181,903 | $ | 88,936 | |||||||||||||
Average Net Assets for the Period (in thousands) | $ | 542,921 | $ | 433,127 | $ | 308,431 | $ | 129,518 | $ | 50,912 | |||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6) | 0.82 | % | 0.91 | % | 0.89 | % | 0.69 | %(7) | 1.13 | %(7) | |||||||||||||
Ratio of Net Expenses to Average Net Assets***(5) | 0.81 | % | 0.90 | % | 0.88 | % | 0.69 | % | 1.13 | % | |||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.24 | % | 0.81 | % | 0.92 | % | 0.72 | % | 0.24 | % | |||||||||||||
Portfolio Turnover Rates*** | 89 | % | 108 | % | 81 | % | 71 | % | 39 | % |
*See Note 4 in Notes to Financial Statements.
**Total return not annualized for periods of less than one full year.
***Annualized for periods of less than one full year.
(1) Period February 28, 2003 (inception date) through October 31, 2003.
(2) Redemption fees aggregated less than $.01 on a per share basis for the period or year ended.
(3) Payment from affiliate aggregated less than $.01 on a per share basis for the period ended.
(4) 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%.
(5) See "Explanations of Charts, Tables and Financial Statements."
(6) The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year ended 2006, 2005 and 2004.
(7) The ratio was 1.07% in 2004 and 1.78% in 2003 before waiver of certain fees incurred by the Fund.
See Notes to Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2007 73
Financial Highlights - Investor Shares
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) and through the fiscal years ended October 31, 2006, 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 the fiscal year ended September 30, 2002 | 2007 | 2006 | 2005 | 2004 | 2003 | 2003 | 2002 | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 24.87 | $ | 23.24 | $ | 22.22 | $ | 18.94 | $ | 15.15 | $ | 13.71 | $ | 14.30 | |||||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||||||
Net investment income/(loss) | .20 | .37 | .14 | .10 | .03 | .03 | .02 | ||||||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | 2.43 | 3.33 | 2.89 | 3.28 | 3.76 | 1.44 | (.23 | ) | |||||||||||||||||||||||
Total from Investment Operations | 2.63 | 3.70 | 3.03 | 3.38 | 3.79 | 1.47 | (.21 | ) | |||||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (.31 | ) | (.24 | ) | (.08 | ) | (.10 | ) | – | (.03 | ) | (.03 | ) | ||||||||||||||||||
Distributions (from capital gains)* | (1.62 | ) | (1.83 | ) | (1.93 | ) | – | – | – | (.35 | ) | ||||||||||||||||||||
Payment from affiliate | – | (2) | – | (2) | – | (2) | – | (2) | – | – | – | ||||||||||||||||||||
Total Distributions and Other | (1.93 | ) | (2.07 | ) | (2.01 | ) | (.10 | ) | – | (.03 | ) | (.38 | ) | ||||||||||||||||||
Net Asset Value, End of Period | $ | 25.57 | $ | 24.87 | $ | 23.24 | $ | 22.22 | $ | 18.94 | $ | 15.15 | $ | 13.71 | |||||||||||||||||
Total Return** | 11.08 | %(3) | 16.88 | %(3) | 14.26 | %(4) | 17.92 | %(3) | 25.02 | % | 10.73 | % | (1.96 | )% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $ | 5,907,410 | $ | 5,181,449 | $ | 4,188,183 | $ | 2,978,875 | $ | 1,494,209 | $ | 1,033,772 | $ | 782,101 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 5,512,861 | $ | 4,806,698 | $ | 3,797,215 | $ | 2,244,533 | $ | 1,262,496 | $ | 962,030 | N/A | ||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6) | 0.85 | % | 0.93 | % | 0.93 | % | 0.94 | % | 1.08 | % | 1.14 | %(7)(8) | 1.17 | % | |||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5) | 0.84 | % | 0.93 | % | 0.92 | % | 0.94 | % | 1.08 | % | 1.14 | %(7)(8) | N/A | ||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.69 | % | 1.69 | % | 0.67 | % | 0.56 | % | 0.45 | % | 0.44 | % | 0.28 | % | |||||||||||||||||
Portfolio Turnover Rates*** | 97 | % | 95 | % | 86 | % | 91 | % | 97 | % | 94 | % | 65 | % | |||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) and through the fiscal years ended October 31, 2006, 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 the fiscal year ended September 30, 2002 | 2007 | 2006 | 2005 | 2004 | 2003 | 2003 | 2002 | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 30.29 | $ | 31.16 | $ | 32.98 | $ | 28.63 | $ | 23.07 | $ | 21.96 | $ | 24.49 | |||||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||||||
Net investment income/(loss) | .17 | .39 | .29 | .31 | .09 | .03 | .06 | ||||||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | 2.03 | 3.49 | 3.16 | 4.16 | 5.47 | 2.07 | (.16 | ) | |||||||||||||||||||||||
Total from Investment Operations | 2.20 | 3.88 | 3.45 | 4.47 | 5.56 | 2.10 | (.10 | ) | |||||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (.45 | ) | (.30 | ) | (.31 | ) | (.12 | ) | – | (.03 | ) | (.18 | ) | ||||||||||||||||||
Distributions (from capital gains)* | (4.83 | ) | (4.45 | ) | (4.96 | ) | – | – | (.96 | ) | (2.25 | ) | |||||||||||||||||||
Payment from affiliate | – | (2) | – | (2) | – | (2) | – | (2) | – | – | – | ||||||||||||||||||||
Total Distributions and Other: | (5.28 | ) | (4.75 | ) | (5.27 | ) | (.12 | ) | – | (.99 | ) | (2.43 | ) | ||||||||||||||||||
Net Asset Value, End of Period | $ | 27.21 | $ | 30.29 | $ | 31.16 | $ | 32.98 | $ | 28.63 | $ | 23.07 | $ | 21.96 | |||||||||||||||||
Total Return** | 8.03 | %(3) | 13.71 | %(3) | 11.34 | %(3) | 15.65 | %(3) | 24.15 | % | 9.56 | % | (2.52 | )% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $ | 973,697 | $ | 1,153,144 | $ | 1,338,093 | $ | 1,480,885 | $ | 1,658,312 | $ | 1,476,575 | $ | 1,461,278 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 1,057,724 | $ | 1,259,565 | $ | 1,440,206 | $ | 1,630,099 | $ | 1,575,178 | $ | 1,457,263 | N/A | ||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6) | 1.01 | % | 1.01 | % | 1.00 | % | 1.02 | % | 1.10 | % | 1.14 | %(7)(10) | 1.17 | %(10) | |||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5) | 1.00 | % | 1.00 | % | 0.99 | % | 1.02 | % | 1.10 | % | 1.13 | %(7)(10) | N/A | ||||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.94 | % | 1.26 | % | 0.84 | % | 0.91 | % | 0.63 | % | 0.22 | % | 0.20 | % | |||||||||||||||||
Portfolio Turnover Rates*** | 56 | % | 62 | % | 44 | % | 50 | % | 60 | % | 45 | % | 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) Berger Mid Cap Value Fund prior to reorganization (Note 1).
(2) Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year or period ended.
(3) During the fiscal year or period ended, Janus Capital and/or Janus Services fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%.
(4) During the fiscal year ended, Janus Capital and/or Janus Services fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by 0.01%
(5) See "Explanations of Charts, Tables and Financial Statements."
(6) The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2007, 2006, 2005 and 2004.
(7) Certain prior year amounts have been reclassified to conform to current year presentation.
(8) The ratio was 1.17% in 2003, before waiver of certain fees incurred by the Fund.
(9) Berger Small Cap Value Fund prior to reorganization (Note 1).
(10) The ratio was 1.20% in 2003 and 1.17% in 2002, before waiver of certain fees incurred by the Fund.
See Notes to Financial Statements.
74 Janus Core, Risk-Managed and Value Funds April 30, 2007
Financial Highlights - Institutional Shares
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) and through the fiscal years ended October 31, 2006, 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 | 2007 | 2006 | 2005 | 2004 | 2003 | 2003 | 2002(2) | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 24.99 | $ | 23.34 | $ | 22.31 | $ | 19.02 | $ | 15.19 | $ | 13.72 | $ | 17.88 | |||||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||||||
Net investment income/(loss) | .22 | .39 | .15 | .14 | .05 | .06 | .02 | ||||||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | 2.44 | 3.37 | 2.92 | 3.29 | 3.78 | 1.44 | (4.18 | ) | |||||||||||||||||||||||
Total from Investment Operations | 2.66 | 3.76 | 3.07 | 3.43 | 3.83 | 1.50 | (4.16 | ) | |||||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (.35 | ) | (.28 | ) | (.11 | ) | (.14 | ) | – | (.03 | ) | – | |||||||||||||||||||
Distributions (from capital gains)* | (1.62 | ) | (1.83 | ) | (1.93 | ) | – | – | – | – | |||||||||||||||||||||
Payment from affiliate | – | – | – | (3) | – | (3) | – | – | – | ||||||||||||||||||||||
Total Distributions and Other | (1.97 | ) | (2.11 | ) | (2.04 | ) | (.14 | ) | – | (.03 | ) | – | |||||||||||||||||||
Net Asset Value, End of Period | $ | 25.68 | $ | 24.99 | $ | 23.34 | $ | 22.31 | $ | 19.02 | $ | 15.19 | $ | 13.72 | |||||||||||||||||
Total Return** | 11.12 | % | 17.08 | % | 14.40 | %(4) | 18.14 | %(4) | 25.21 | % | 10.96 | % | (23.27 | )% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $ | 1,197,749 | $ | 1,068,045 | $ | 734,926 | $ | 464,450 | $ | 292,445 | $ | 176,768 | $ | 111,101 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 1,135,642 | $ | 921,447 | $ | 597,747 | $ | 395,466 | $ | 233,830 | $ | 148,748 | N/A | ||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6) | 0.77 | %(7) | 0.78 | %(7) | 0.77 | %(7) | 0.77 | %(7) | 0.78 | %(7) | 0.79 | %(8) | 0.78 | % | |||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5) | 0.77 | % | 0.77 | % | 0.77 | % | 0.77 | % | 0.78 | % | 0.79 | %(8) | 0.78 | % | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.77 | % | 1.79 | % | 0.82 | % | 0.74 | % | 0.75 | % | 0.80 | % | 0.83 | % | |||||||||||||||||
Portfolio Turnover Rates*** | 97 | % | 95 | % | 86 | % | 91 | % | 97 | % | 94 | % | 65 | % | |||||||||||||||||
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) and through the fiscal years ended October 31, 2006, 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 the fiscal year ended September 30, 2002 | 2007 | 2006 | 2005 | 2004 | 2003 | 2003 | 2002 | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 30.54 | $ | 31.38 | $ | 33.19 | $ | 28.82 | $ | 23.18 | $ | 22.08 | $ | 24.58 | |||||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||||||
Net investment income/(loss) | .18 | .54 | .37 | .39 | .13 | .07 | .12 | ||||||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | 2.08 | 3.43 | 3.17 | 4.18 | 5.51 | 2.06 | (.13 | ) | |||||||||||||||||||||||
Total from Investment Operations | 2.26 | 3.97 | 3.54 | 4.57 | 5.64 | 2.13 | (.01 | ) | |||||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||||||
Dividends (from net investment income)* | (.50 | ) | (.36 | ) | (.39 | ) | (.20 | ) | – | (.07 | ) | (.24 | ) | ||||||||||||||||||
Distributions (from capital gains)* | (4.83 | ) | (4.45 | ) | (4.96 | ) | – | – | (.96 | ) | (2.25 | ) | |||||||||||||||||||
Payment from affiliate | – | – | (3) | – | (3) | – | – | – | – | ||||||||||||||||||||||
Total Distributions and Other | (5.33 | ) | (4.81 | ) | (5.35 | ) | (.20 | ) | – | (1.03 | ) | (2.49 | ) | ||||||||||||||||||
Net Asset Value, End of Period | $ | 27.47 | $ | 30.54 | $ | 31.38 | $ | 33.19 | $ | 28.82 | $ | 23.18 | $ | 22.08 | |||||||||||||||||
Total Return** | 8.18 | % | 13.93 | %(4) | 11.57 | %(4) | 15.91 | % | 24.23 | % | 9.74 | % | (2.13 | )% | |||||||||||||||||
Net Assets, End of Period (in thousands) | $ | 844,831 | $ | 923,755 | $ | 1,185,733 | $ | 1,400,160 | $ | 1,497,333 | $ | 1,286,580 | $ | 1,223,227 | |||||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 853,038 | $ | 1,092,751 | $ | 1,323,226 | $ | 1,486,714 | $ | 1,454,779 | $ | 1,245,661 | N/A | ||||||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(5)(6) | 0.80 | %(10) | 0.80 | %(10) | 0.79 | %(10) | 0.81 | %(10) | 0.82 | %(10) | 0.87 | %(8) | 0.82 | % | |||||||||||||||||
Ratio of Net Expenses to Average Net Assets***(5) | 0.79 | % | 0.79 | % | 0.79 | % | 0.81 | % | 0.82 | % | 0.87 | %(8) | 0.82 | % | |||||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.14 | % | 1.51 | % | 1.05 | % | 1.12 | % | 0.91 | % | 0.48 | % | 0.53 | % | |||||||||||||||||
Portfolio Turnover Rates*** | 56 | % | 62 | % | 44 | % | 50 | % | 60 | % | 45 | % | 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) 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) See "Explanations of Charts, Tables and Financial Statements."
(6) The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2007, 2006, 2005 and 2004.
(7) The ratio was 0.81% in 2007, 0.89% in 2006, 0.88% in 2005, 0.90% in 2004 and 1.08% in 2003, before waiver of certain fees incurred by the Fund.
(8) Certain prior year amounts have been reclassified to conform to current year presentation.
(9) Berger Small Cap Value Fund prior to reorganization (Note 1).
(10) The ratio was 0.97% in 2007, 0.97% in 2006, 0.96% in 2005, 0.99% in 2004 and 1.10% in 2003, before waiver of certain fees incurred by the Fund.
See Notes to Financial Statements.
Janus Core, Risk-Managed and Value Funds April 30, 2007 75
Notes to Schedules of Investments (unaudited)
Balanced Index | The Balanced Index is an internally calculated, hypothetical combination of unmanaged 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 Small-Cap Core Funds | Funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) less than 250% of the dollar-weighted median of the smallest 500 of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Small-cap core funds have more latitude in the companies in which they invest. These funds typically have an average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P SmallCap 600 Index. | ||||||
Morgan Stanley Capital International All Country World IndexSM | Is an unmanaged, free float-adjusted market capitalization weighted index composed of stocks of companies located in countries throughout the world. It is designed to measure equity market performance in global developed and emerging markets. The index includes reinvestment of dividends, net of foreign withholding taxes. | ||||||
Russell 1000® Growth Index | Measures the performance of those Russell 1000® companies with higher price-to-book ratios and higher forecasted growth values. | ||||||
Russell 2000® Value Index | Measures the performance of those Russell 2000® companies with lower price-to-book ratios and lower forecasted growth values. | ||||||
Russell Midcap® Index | The 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. | ||||||
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, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. | ||||||
ADR | American Depositary Receipt | ||||||
GDR | Global Depositary Receipt | ||||||
76 Janus Core, Risk-Managed and Value Funds April 30, 2007
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.
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.
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, 2007.
† 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, 2007)
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 (as of April 30, 2007)
Acquisition Date | Acquisition Cost | Value | Value as a % of Net Assets | ||||||||||||||||
Janus Growth and Income Fund | |||||||||||||||||||
Allegro Investment Corporation S.A. convertible, (Apple Inc.), 9.08% (144A) | 11/7/06 | $ | 55,145,690 | $ | 65,697,319 | 1.0 | % | ||||||||||||
Allegro Investment Corporation S.A. convertible, (Corning, Inc.), 10.40% (144A) | 2/6/07 | 55,134,992 | 57,768,365 | 0.9 | % | ||||||||||||||
Allegro Investment Corporation S.A. convertible, (Suncor Energy, Inc. (U.S. Shares)), 8.40% (144A) | 2/21/07 | 47,386,802 | 50,601,529 | 0.8 | % | ||||||||||||||
Lehman Brothers Holdings, Inc. convertible, (Advanced Micro Devices, Inc., Archer-Daniels-Midland Co., Valero Energy Corp.), 36.01% (144A) | 2/20/07 | 56,864,000 | 56,994,787 | 0.9 | % | ||||||||||||||
Lehman Brothers Holdings, Inc. convertible, (Lennar Corp., Qualcomm, Inc., Suntech Power Holdings Co., Ltd.), 41.26% (144A) | 12/8/06 | 56,891,000 | 49,489,481 | 0.7 | % | ||||||||||||||
Merrill Lynch & Company, Inc. convertible, (Celgene Corp.), 6.97% (144A) | 2/26/07 | 55,125,202 | 57,580,841 | 0.9 | % | ||||||||||||||
Merrill Lynch & Company, Inc. convertible, (Peabody Energy Corp.), 10.50% (144A) | 2/26/07 | 55,125,210 | 58,653,741 | 0.9 | % | ||||||||||||||
Morgan Stanley Co. convertible, (Archer-Daniels-Midland Co.), 8.07% (144A) | 2/14/07 | 55,138,218 | 58,703,337 | 0.9 | % | ||||||||||||||
Morgan Stanley Co. convertible, (Google, Inc. - Class A), 7.15% (144A) | 2/1/07 | 55,138,543 | 53,860,468 | 0.8 | % | ||||||||||||||
Morgan Stanley Co. convertible, (QUALCOMM, Inc.), 10.01% (144A) | 11/14/06 | 56,887,738 | 65,879,720 | 1.0 | % | ||||||||||||||
$ | 548,837,395 | $ | 575,229,588 | 8.8 | % |
The Fund has registration rights for certain restricted securities held as of April 30, 2007. The issuer incurs all registration costs.
Janus Core, Risk-Managed and Value Funds April 30, 2007 77
Notes to Schedules of Investments (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 six-month period ended April 30, 2007.
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/07 | |||||||||||||||||||||||||
Janus Contrarian Fund | |||||||||||||||||||||||||||||||
Ballarpur Industries, Ltd. | – | $ | – | – | $ | – | $ | – | $ | 696,635 | $ | 28,996,731 | |||||||||||||||||||
Ceridian Corp. | – | – | – | – | – | – | 287,367,483 | ||||||||||||||||||||||||
Owens-Illinois, Inc. | 100,000 | 1,807,379 | – | – | – | – | 328,545,037 | ||||||||||||||||||||||||
Playboy Enterprises, Inc. - Class B | – | – | – | – | – | – | 16,370,397 | ||||||||||||||||||||||||
St. Joe Co. | 586,985 | 32,505,671 | – | – | – | 1,534,166 | 297,452,756 | ||||||||||||||||||||||||
$ | 34,313,050 | $ | – | $ | – | $ | 2,230,801 | $ | 958,732,404 | ||||||||||||||||||||||
Janus Growth and Income Fund | |||||||||||||||||||||||||||||||
Spansion, Inc. - Class A | 2,022,500 | $ | 22,811,434 | 169,145 | $ | 2,029,740 | $ | (96,655 | ) | $ | – | $ | 59,763,243 | ||||||||||||||||||
Janus Mid Cap Value Fund | |||||||||||||||||||||||||||||||
OmniVision Technologies, Inc. | 3,200,000 | $ | 44,833,744 | 1,100,000 | $ | 15,479,063 | $ | (1,425,121 | ) | $ | – | $ | 28,392,000 | ||||||||||||||||||
Janus Small Cap Value Fund | |||||||||||||||||||||||||||||||
Computer Programs and Systems, Inc. | 340,000 | $ | 10,983,541 | – | $ | – | $ | – | $ | 266,400 | $ | 17,199,000 | |||||||||||||||||||
Edge Petroleum Corp. | 650,000 | 8,880,692 | – | – | – | – | 24,027,500 | ||||||||||||||||||||||||
Flushing Financial Corp. | – | – | – | – | – | 303,600 | 20,526,000 | ||||||||||||||||||||||||
$ | 19,864,233 | $ | – | $ | – | $ | 570,000 | $ | 61,752,500 |
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, 2007 are noted below.
Fund | Aggregate Value | ||||||
Core | |||||||
Janus Balanced Fund | $ | 107,511,052 | |||||
Janus Contrarian Fund | 1,918,913,837 | ||||||
Janus Fundamental Equity Fund(1) | 42,669,322 | ||||||
Janus Growth and Income Fund | 548,401,527 | ||||||
Risk-Managed | |||||||
INTECH Risk-Managed Stock Fund | 1,489,534 |
(1) Formerly named Janus Core Equity Fund.
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, 2007.
78 Janus Core, Risk-Managed and Value Funds April 30, 2007
Notes to Financial Statements (unaudited)
The following section describes the organization and significant accounting policies and provides more detailed information about the schedules and tables that appear throughout this report. In addition, the Notes to Financial Statements explain the methods used in preparing and presenting this report.
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Janus Balanced Fund, Janus Contrarian Fund, Janus Fundamental Equity Fund, Janus Growth and Income Fund, INTECH Risk-Managed Stock Fund, Janus Mid Cap Value Fund and Janus Small Cap Value Fund (collectively the "Funds" and individually a "Fund") are series funds. The Funds are part of Janus Investment Fund (the "Trust"), which 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 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, 2007 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. 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 or such other collateral permitted by the Securities and Exchange Commission ("SEC"). Cash collateral may be invested in affiliated money market funds or other accounts advised by Janus Capital to the extent consistent with exemptive relief obtained from the SEC or as permitted by the 1940 Act and rules promulgated thereunder. Cash collateral may also be invested in unaffiliated money market funds or other accounts advised by Janus Capital to the extent consistent with exemptive relief obtained from the SEC or as permitted by the 1940 Act and rules promulgated thereunder. Cash collateral may also be invested in unaffi liated 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, 2007, the following Funds had on loan securities valued as indicated:
Fund | Value at April 30, 2007 | ||||||
Core | |||||||
Janus Balanced Fund | $ | 619,497,277 | |||||
Janus Contrarian Fund | 520,732,353 | ||||||
Janus Fundamental Equity Fund(1) | 99,707,880 | ||||||
Janus Growth and Income Fund | 463,246,550 | ||||||
Risk-Managed | |||||||
INTECH Risk-Managed Stock Fund | 31,812,471 | ||||||
Value | |||||||
Janus Mid Cap Value Fund | 786,288,256 | ||||||
Janus Small Cap Value Fund | 458,268,885 |
(1) Formerly named Janus Core Equity Fund.
As of April 30, 2007, the following Funds received cash collateral for securities lending activity as indicated:
Fund | Cash Collateral at April 30, 2007 | ||||||
Core | |||||||
Janus Balanced Fund | $ | 635,838,813 | |||||
Janus Contrarian Fund | 534,501,602 | ||||||
Janus Fundamental Equity Fund(1) | 102,824,256 | ||||||
Janus Growth and Income Fund | 477,053,409 | ||||||
Risk-Managed | |||||||
INTECH Risk-Managed Stock Fund | 32,566,735 | ||||||
Value | |||||||
Janus Mid Cap Value Fund | 806,321,854 | ||||||
Janus Small Cap Value Fund | 469,768,351 |
(1) Formerly named Janus Core Equity Fund.
As of April 30, 2007, all cash collateral received by the Funds was invested in the State Street Navigator Securities Lending Prime Portfolio, except for Janus Balanced Fund and Janus Growth and Income Fund which also invested $9,039,293 and $17,385,552, respectively, of the cash collateral in Foreign Government Bonds. Additionally, Janus Balanced Fund, Janus Growth and Income Fund, INTECH Risk-Managed Stock Fund and Janus Small Cap Value Fund invested $3,727,594, $99,740, $1,582,354 and $37,598,773, respectively, of the cash collateral in U.S. Treasury Notes/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 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).
Interfund Lending
Pursuant to an exemptive order received from the SEC, each Fund may be party to an interfund lending agreement between the Fund and other Janus Capital sponsored mutual funds, which permits 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, 2007, there were no outstanding interfund borrowing or lending arrangements for the Funds.
80 Janus Core, Risk-Managed and Value Funds April 30, 2007
Short Sales
The Funds, except INTECH Risk-Managed Stock Fund, may engage in "short sales against the box." Short sales against the box involve selling either a security that the Fund owns, or a security equivalent in kind and amount to the security sold short that the Fund has the right to obtain, for delivery at a specified date in the future. The Fund may enter into a short sale against the box to hedge against anticipated declines in the market price of portfolio securities. If the value of the securities sold short increases prior to the scheduled delivery date, the Fund loses the opportunity to participate in the gain.
The Funds, except INTECH Risk-Managed Stock Fund, may also engage in "naked" (uncovered) 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, the Fund must borrow the security to deliver it to the purchaser and buy that same security in the market to return it to the lender. Although the potential for gain is limited to the difference between the price at which the Fund sold the security short and the cost of borrowing the security, its potential for loss is theoretically unlimited because there is no limit to the cost of replacing the borrowed security. There is no assurance that the Fund will be able to close out a short position at a particular time or at an acceptable price. A gain or a loss will be recognized upon termination of a short sale. There is no limit on the size of any loss that a Fund may recognize upon termination of a short sale. S hort sales held by the Fund are fully collateralized by other securities, which are denoted in the accompanying Schedule of Investments (if applicable). As of April 30, 2007, the Funds were not invested in short sales.
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.
As of April 30, 2007, Janus Balanced Fund, Janus Contrarian Fund, Janus Fundamental Equity Fund and Janus Growth and Income Fund were invested in forward currency transactions.
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 currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and market risk. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Bank Loans
Janus Balanced Fund may invest in bank loans, which include institutionally-traded floating rate securities generally acquired as an assignment or participation interest in loans originated by a bank or financial institution (the "Lender") that acts as agent for all holders. The agent administers the terms of the loan, as specified in the loan agreement. When investing in a loan participation, the Fund has the right to receive payments of principal, interest and any fees to which it is entitled only from the Lender selling the loan agreement and only upon receipt by the Lender of payments from the borrower. The Fund generally has no right to enforce compliance with the terms of the loan agreement with the borrower. Assignments and participations involve credit risk and liquidity risk. Interest rates on floating rate securities adjust with general interest rate changes and/or issuer credit quality. The interest rates paid on a floating rate security in which the Fund invests generally are readjusted 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 Fund utilizes an independent third party to value individual bank loans on a daily basis.
The average monthly value of borrowings outstanding under bank loan arrangements was $21,604,042 and the rate range was 1.75%-8.11375% during the six-month period ended April 30, 2007 for Janus Balanced Fund.
Futures Contracts
The Funds may enter into futures contracts. The Funds intend to use such derivative instruments 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
Janus Core, Risk-Managed and Value Funds April 30, 2007 81
Notes to Financial Statements (unaudited) (continued)
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 a receivable or payable on the Statement of Assets and Liabilities (if applicable). When a contract is closed, a realized gain or loss is recorded 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.
As of April 30, 2007, INTECH Risk-Managed Stock Fund was the only Fund invested in futures contracts.
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 Fund generally invests in options to hedge against adverse 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 Fund receives a premium and becomes obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. In writing an option, the Fund bears the market risk of an unfavorable change in the price of the security underlying the written option. Exercise of an option written by the Fund could result in the Fund buying or selling a security at a price different from the current market value.
When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option 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). Realized gains and losses are reported on the Statement of Operations (if applicable).The following Funds recognized realized gains or losses for written options during the six-month period ended April 30, 2007.
Fund | Gain/(Loss) | ||||||
Core | |||||||
Janus Contrarian Fund | $ | – | |||||
Janus Fundamental Equity Fund(1) | 657,202 | ||||||
Janus Growth and Income Fund | 948,694 | ||||||
Value | |||||||
Janus Mid Cap Value Fund | (497,930 | ) |
(1) Formerly named Janus Core Equity Fund.
The risk in writing a call option is that a Fund gives 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 a Fund 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 a Fund pays 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 a Fund's hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. There is no limit to the loss that a Fund may recognize due to written call options.
Written option activity for the six-month period ended April 30, 2007 was as follows:
Call Options | Number of Contracts | Premiums Received | |||||||||
Janus Contrarian Fund | |||||||||||
Options outstanding, at October 31, 2006 | – | $ | – | ||||||||
Options written | 60,819 | 8,562,596 | |||||||||
Options expired | – | – | |||||||||
Options closed | – | – | |||||||||
Options exercised | – | – | |||||||||
Options outstanding, at April 30, 2007 | 60,819 | $ | 8,562,596 | ||||||||
Put Options | Number of Contracts | Premiums Received | |||||||||
Janus Contrarian Fund | |||||||||||
Options outstanding, at October 31, 2006 | – | $ | – | ||||||||
Options written | 23,000 | 6,165,732 | |||||||||
Options expired | – | – | |||||||||
Options closed | – | – | |||||||||
Options exercised | – | – | |||||||||
Options outstanding, at April 30, 2007 | 23,000 | $ | 6,165,732 | ||||||||
Call Options | Number of Contracts | Premiums Received | |||||||||
Janus Fundamental Equity Fund(1) | |||||||||||
Options outstanding at October 31, 2006 | – | $ | – | ||||||||
Options written | 11,182 | 912,500 | |||||||||
Options expired | – | – | |||||||||
Options closed | (1,657 | ) | (666,176 | ) | |||||||
Options exercised | – | – | |||||||||
Options outstanding at April 30, 2007 | 9,525 | $ | 246,324 |
(1) Formerly named Janus Core Equity Fund.
Put Options | Number of Contracts | Premiums Received | |||||||||
Janus Fundamental Equity Fund(1) | |||||||||||
Options outstanding at October 31, 2006 | – | $ | – | ||||||||
Options written | 920 | 133,433 | |||||||||
Options expired | – | ||||||||||
Options closed | (920 | ) | (133,433 | ) | |||||||
Options exercised | – | – | |||||||||
Options outstanding at April 30, 2007 | – | $ | – |
(1) Formerly named Janus Core Equity Fund.
82 Janus Core, Risk-Managed and Value Funds April 30, 2007
Call Options | Number of Contracts | Premiums Received | |||||||||
Janus Growth and Income Fund | |||||||||||
Options outstanding, at October 31, 2006 | – | $ | – | ||||||||
Options written | 11,932 | 1,048,563 | |||||||||
Options expired | – | – | |||||||||
Options closed | (1,632 | ) | (656,125 | ) | |||||||
Options exercised | – | – | |||||||||
Options outstanding, at April 30, 2007 | 10,300 | $ | 392,438 | ||||||||
Put Options | Number of Contracts | Premiums Received | |||||||||
Janus Growth and Income Fund | |||||||||||
Options outstanding, at October 31, 2006 | – | $ | – | ||||||||
Options written | 9,482 | 1,375,226 | |||||||||
Options expired | – | – | |||||||||
Options closed | (9,482 | ) | (1,375,226 | ) | |||||||
Options exercised | – | – | |||||||||
Options outstanding, at April 30, 2007 | – | $ | – | ||||||||
Call Options | Number of Contracts | Premiums Received | |||||||||
Janus Mid Cap Value Fund | |||||||||||
Options outstanding at October 31, 2006 | – | $ | – | ||||||||
Options written | 5,500 | 1,114,805 | |||||||||
Options expired | – | – | |||||||||
Options closed | (5,500 | ) | (1,114,805 | ) | |||||||
Options exercised | – | – | |||||||||
Options outstanding at April 30, 2007 | – | $ | – |
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 Fund may hold liquid assets as collateral with the Fund's custodian sufficient to cover the purchase price. As of April 30, 2007, 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 derivative securities which are specially designed to combine the characteristics of one or more underlying securities and their equity derivatives in a single note form. The return and/or yield or income component may be based on the performance of the underlying equity securities, an equity index, and/or option positions. Equity-linked structured notes are typically offered in limited transactions by financial institutions in either registered or nonregistered form. An investment in equity-linked structured notes creates exposure to the credit risk of the issuing financial institution, as well as to the market risk of the underlying securities. There is no guaranteed return of principal with these securities and the appreciation potential of these securities may be limited by a maximum payment or call right. In certain cases, equity-linked structured notes may be more volatile and less liquid than less complex securities or other types of fixed-income securities. Such securities may exhibit price behavior that does not correlate with other fixed-income securities). As of April 30, 2007, the Janus Growth and Income Fund was invested in equity-linked structured notes.
Initial Public Offerings
The Funds may invest in initial public offerings ("IPOs"). IPOs and other investment techniques may have a magnified performance impact on a fund with a small asset base. A Fund may not experience similar performance as its assets grow.
Additional Investment Risk
The Funds, particularly Janus Balanced Fund, may be invested in lower-rated debt securities that have a higher risk of default or loss of value since these securities may be sensitive to economic changes, political changes or adverse developments specific to the issuer. INTECH Risk-Managed Stock Fund does not intend to invest in high-yield/high-risk bonds.
Restricted Security Transactions
Restricted securities held by a Fund may not be sold except in exempt transactions or in a public offering registered under the Securities Act of 1933. 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.
Restricted Cash
As of April 30, 2007, Janus Contrarian Fund had restricted cash in the amount of $94,881,150. The restricted cash represents funds in relation to options contracts invested by Janus Contrarian Fund at April 30, 2007. The restricted cash is held at the Fund's custodian, State Street Bank and Trust Company. The carrying value of the restricted cash approximates fair value.
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.
Janus Core, Risk-Managed and Value Funds April 30, 2007 83
Notes to Financial Statements (unaudited) (continued)
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.
New Accounting Pronouncements
In July 2006, the Financial Accounting Standards Board ("FASB") issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109" (the "Interpretation"). The Interpretation establishes for all entities, including pass-through entities such as the Funds, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. A calendar year open-end or closed-end fund would implement the interpretation no later than June 29, 2007 (the last business day of the semi-annual reporting period) and will also apply to all open tax years as of the date of effectiveness. Management has recently begun to evaluate the application of the Interpretation to the Funds, and is not in a position at this time to estimate the significance of its impact, if any, on the Funds' financial statements.
In September 2006, the SEC issued Staff Accounting Bulletin ("SAB") No. 108 "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements" (SAB 108). SAB 108 requires that public companies utilize a "dual approach" to assessing the quantitative effects of financial misstatements. This dual approach includes both an income statement focused assessment and a balance sheet focused assessment. The guidance in SAB 108 must be applied to annual financial statements for fiscal years ending after November 15, 2006. Management is currently assessing the impact of adopting SAB 108 on each Fund's financial position or results of operations.
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 Fundamental Equity Fund(1) | All Asset Levels | 0.60 | |||||||||
Janus Growth and Income Fund | All Asset Levels | 0.62 | |||||||||
Risk-Managed | |||||||||||
INTECH Risk-Managed Stock Fund | All Asset Levels | 0.50 | |||||||||
Value | |||||||||||
Janus Mid Cap Value Fund | All Asset Levels | 0.64 | |||||||||
Janus Small Cap Value Fund | All Asset Levels | 0.72 |
(1) Formerly named Janus Core Equity Fund.
For Janus Contrarian Fund, INTECH Risk-Managed Stock Fund and Janus Mid Cap Value Fund, the investment advisory fee is determined by calculating a base fee and applying a performance adjustment. The base fee rate is the same as the investment advisory fee rate shown in the table above. The performance adjustment either increases or decreases the base fee depending on how well each Fund has performed relative to its benchmark, as shown below:
Fund | Benchmark Index | ||||||
Janus Contrarian Fund | S&P 500® Index | ||||||
INTECH Risk-Managed Stock Fund | S&P 500® Index | ||||||
Janus Mid Cap Value Fund | Russell Midcap® | ||||||
Value Index |
Only the base fee rate applied until January 2007 for INTECH Risk-Managed Stock Fund, and until February 2007 for Janus Contrarian Fund and Janus Mid Cap Value Fund, at which time the calculation of the performance adjustment is applied as follows:
(Investment Advisory Fee = Base Fee +/- Performance Adjustment).
The investment advisory fee paid to Janus Capital by each of the Funds listed above consists of two components: (i) a base fee calculated by applying the contractual fixed-rate of the advisory fee to the Fund's average daily net assets during the previous month ("Base Fee"), plus or minus (ii) a performance-fee adjustment ("Performance Adjustment") calculated by applying a variable rate of up to 0.15% (positive or negative) to the Fund's average daily net assets during the applicable performance measurement period.
The performance measurement period generally is the previous 36 months, although no Performance Adjustment will be made until a Fund's performance-based fee structure has been in effect for at least 12 months. When a Fund's performance-based fee structure has been in effect for at least 12 months, but less than 36 months, the performance measurement period will be equal to the time that has elapsed since the performance-based fee structure took effect. As noted above, any Performance Adjustment began January 2007 for INTECH Risk-Managed Stock Fund and February 2007 for Janus Contrarian Fund and Janus Mid Cap Value Fund. No Performance Adjustment will be applied unless the difference between the Fund's investment performance and the investment record of the Fund's benchmark index is 0.50% or greater (positive or negative) during the applicable performance measurement period. Because the Performance Adjustment is tied to a Fund's relative perf ormance to its benchmark index (and not its absolute performance), the Performance Adjustment could increase Janus Capital's fee even if the Fund's shares lose value during the performance measurement period and could decrease Janus Capital's fee even if the Fund's shares increase in value during the performance measurement period. For purposes of computing the Base Fee and the Performance Adjustment, net assets will be averaged over different periods (average daily net assets during the previous month for the Base Fee, versus average daily net assets during the performance measurement period for the Performance Adjustment). Performance of a Fund is calculated net of expenses whereas a Fund's benchmark index does not have any expenses.
84 Janus Core, Risk-Managed and Value Funds April 30, 2007
Reinvestment of dividends and distributions are included in calculating both the performance of a Fund and the Fund's benchmark index. The Base Fee is calculated and accrued daily. The Performance Adjustment is calculated monthly in arrears and is accrued evenly each day throughout the month. The investment fee is paid monthly in arrears.
The investment performance of Janus Mid Cap Value Fund's Investor Shares ("Investor Shares") for the performance measurement period will be used to calculate the Performance Adjustment. After Janus Capital determines whether a particular Fund's performance was above or below its benchmark index by comparing the investment performance of the Investor Shares for the Fund against the investment record of that Fund's benchmark index, Janus Capital will apply the same Performance Adjustment (positive or negative) across each other class of shares of the Fund. It is not possible to predict the effect of the Performance Adjustment on future overall compensation to Janus Capital since it will depend on the performance of each Fund relative to the record of the Fund's benchmark index and future changes to the size of each Fund. The Funds' prospectus and statement of additional information contains additional information about performance-based fees. The amount shown as Advisory fees on the Statement of Operations reflects the base fee plus/minus any performance adjustment.
Enhanced Investment Technologies, LLC ("INTECH") serves as subadviser to INTECH Risk-Managed Stock Fund. Janus Capital indirectly owns approximately 86.5% 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.
By written agreement, Janus Services has agreed until March 1, 2008 to waive the transfer agency fee payable so that the total operating expenses (excluding extraordinary expenses and the 0.05% administrative services fee) 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.
A 2.00% redemption fee may be imposed on shares of INTECH Risk-Managed Stock Fund held for three months or less. Effective with purchases on and after May 15, 2007, a 2% redemption fee may be imposed on shares held for 90 days or less. This fee is paid to the Fund rather than Janus Capital, and is designed to deter excessive short-term trading and to offset the brokerage commissions, market impact, and other costs associated with changes in the Fund's asset level and cash flow due to short-term money movements in and out of the Fund. The redemption fee is accounted for as an addition to Paid-in Capital. Total redemption fees received by INTECH Risk-Managed Stock Fund were $55,688 for the six-month period ended April 30, 2007.
During the six-month period ended April 30, 2007, Janus Services reimbursed the following Funds as a result of dilutions caused by incorrectly processed shareholder activity as indicated in the table below.
Fund | |||||||
Core | |||||||
Janus Balanced Fund | $ | 8,118 | |||||
Janus Contrarian Fund | 31,070 | ||||||
Janus Fundamental Equity Fund(1) | 9,689 | ||||||
Janus Growth and Income Fund | 20,128 | ||||||
Risk-Managed | |||||||
INTECH Risk-Managed Stock Fund | 6,559 | ||||||
Value | |||||||
Janus Mid Cap Value Fund - Investor Shares | 18,915 | ||||||
Janus Small Cap Value Fund - Investor Shares | 5,404 |
(1) Formerly named Janus Core Equity Fund.
During the fiscal year ended October 31, 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 | |||||||
Core | |||||||
Janus Balanced Fund | $ | 57,489 | |||||
Janus Contrarian Fund | 15,387 | ||||||
Janus Fundamental Equity Fund(1) | 1,193 | ||||||
Janus Growth and Income Fund | 4,848 | ||||||
Value | |||||||
Janus Mid Cap Value Fund - Investor Shares | 2,457 | ||||||
Janus Small Cap Value Fund - Investor Shares | 3,220 | ||||||
Janus Small Cap Value Fund - Institutional Shares | 21 |
(1) Formerly named Janus Core Equity Fund.
During the fiscal year ended October 31, 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.
Fund | |||||||
Core | |||||||
Janus Balanced Fund | $ | 3,230 |
For the six-month period ended April 30, 2007, Janus Capital assumed $18,145 of legal, consulting and Trustee costs and fees incurred by the funds in Janus Investment Fund,
Janus Core, Risk-Managed and Value Funds April 30, 2007 85
Notes to Financial Statements (unaudited) (continued)
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 as of July 31, 2004. No fees were allocated to Janus Global 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 on July 31, 2004. These non-recurring costs and costs assumed by Janus Capital are shown on the Statement of Operations.
Effective January 1, 2006, the Board of Trustees 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 with the Plan. No deferred fees were paid to any Trustee under the Plan during the six-month period ended April 30, 2007.
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. Total compensation of $56,756 was paid by the Trust during the six-month period ended April 30, 2007. 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 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.
The Funds may invest in money market funds, including funds managed by Janus Capital. During the six-month period ended April 30, 2007, 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 4/30/07 | ||||||||||||||||
Janus Institutional Cash Management Fund - Institutional Shares | |||||||||||||||||||
Core | |||||||||||||||||||
Janus Balanced Fund | $ | 61,760,476 | $ | – | $ | 459,094 | $ | 61,760,476 | |||||||||||
Janus Contrarian Fund | 173,869,844 | 112,060,568 | 526,274 | 61,809,276 | |||||||||||||||
Janus Fundamental Equity Fund(1) | 13,794,684 | 13,794,684 | 67,136 | – | |||||||||||||||
Janus Growth and Income Fund | 270,322,216 | 270,322,216 | 230,298 | – | |||||||||||||||
Risk-Managed | |||||||||||||||||||
INTECH Risk-Managed Stock Fund | 8,421,705 | – | 72,984 | 8,421,705 | |||||||||||||||
Value | |||||||||||||||||||
Janus Mid Cap Value Fund | 282,503,991 | – | 2,521,737 | 282,503,991 | |||||||||||||||
Janus Small Cap Value Fund | 101,626,263 | – | 855,962 | 101,626,263 | |||||||||||||||
$ | 912,299,179 | $ | 396,177,468 | $ | 4,733,485 | $ | 516,121,711 | ||||||||||||
Janus Institutional Cash Reserves Fund | |||||||||||||||||||
Core | |||||||||||||||||||
Janus Balanced Fund | $ | 50,519,178 | $ | 79,243,178 | $ | 152,669 | $ | – | |||||||||||
Janus Contrarian Fund | 127,258,241 | 137,841,241 | 383,086 | – | |||||||||||||||
Janus Fundamental Equity Fund(1) | 10,951,838 | 22,367,338 | 177,039 | – | |||||||||||||||
Janus Growth and Income Fund | 185,578,233 | 221,348,233 | 337,797 | – | |||||||||||||||
Risk-Managed | |||||||||||||||||||
INTECH Risk-Managed Stock Fund | 11,832,080 | 21,891,919 | 66,221 | – | |||||||||||||||
Value | |||||||||||||||||||
Janus Mid Cap Value Fund | 250,572,956 | 458,085,547 | 3,118,215 | – | |||||||||||||||
Janus Small Cap Value Fund | 36,187,057 | 201,360,746 | 1,154,255 | – | |||||||||||||||
$ | 672,899,583 | $ | 1,142,138,202 | $ | 5,389,282 | $ | – |
(1) Formerly named Janus Core Equity Fund.
86 Janus Core, Risk-Managed and Value Funds April 30, 2007
Purchases Shares/Cost | Sales Shares/Cost | Dividend Income | Value at 4/30/07 | ||||||||||||||||
Janus Institutional Money Market Fund - Institutional Shares | |||||||||||||||||||
Core | |||||||||||||||||||
Janus Balanced Fund | $ | 146,686,510 | $ | 110,663,000 | $ | 364,050 | $ | 36,023,510 | |||||||||||
Janus Contrarian Fund | 527,276,632 | 463,448,432 | 508,541 | 63,828,200 | |||||||||||||||
Janus Fundamental Equity Fund(1) | 70,731,845 | 50,234,845 | 61,692 | 20,497,000 | |||||||||||||||
Janus Growth and Income Fund | 258,755,485 | 225,278,485 | 220,045 | 33,477,000 | |||||||||||||||
Risk-Managed | |||||||||||||||||||
INTECH Risk-Managed Stock Fund | 36,119,193 | 22,537,000 | 143,685 | 13,582,193 | |||||||||||||||
Value | |||||||||||||||||||
Janus Mid Cap Value Fund | 584,024,218 | 431,327,000 | 1,096,735 | 152,697,218 | |||||||||||||||
Janus Small Cap Value Fund | 123,689,943 | 113,772,000 | 425,651 | 9,917,943 | |||||||||||||||
$ | 1,747,283,826 | $ | 1,417,260,762 | $ | 2,820,399 | $ | 330,023,064 | ||||||||||||
Janus Money Market Fund - Institutional Shares | |||||||||||||||||||
Core | |||||||||||||||||||
Janus Balanced Fund | $ | 181,694,949 | $ | 188,936,407 | $ | 613,569 | $ | – | |||||||||||
Janus Contrarian Fund | 351,500,426 | 364,532,153 | 833,009 | – | |||||||||||||||
Janus Fundamental Equity Fund(1) | 52,849,584 | 59,197,084 | 148,617 | – | |||||||||||||||
Janus Growth and Income Fund | 731,240,591 | 731,240,591 | 1,298,893 | – | |||||||||||||||
Risk-Managed | |||||||||||||||||||
INTECH Risk-Managed Stock Fund | 38,009,617 | 49,427,136 | 321,972 | – | |||||||||||||||
Value | |||||||||||||||||||
Janus Mid Cap Value Fund | 412,078,356 | 689,258,035 | 4,258,222 | – | |||||||||||||||
Janus Small Cap Value Fund | 174,591,271 | 257,939,142 | 1,271,250 | – | |||||||||||||||
$ | 1,941,964,794 | $ | 2,340,530,548 | $ | 8,745,532 | $ | – |
(1) Formerly named Janus Core Equity Fund.
3. PURCHASES AND SALES OF INVESTMENT SECURITIES
For the six-month period ended April 30, 2007, 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 | $ | 370,749,072 | $ | 408,877,735 | $ | 306,477,016 | $ | 341,253,598 | |||||||||||
Janus Contrarian Fund | 2,040,838,555 | 523,969,997 | – | – | |||||||||||||||
Janus Fundamental Equity Fund(1) | 183,589,990 | 200,311,998 | – | – | |||||||||||||||
Janus Growth and Income Fund | 1,946,503,439 | 2,542,407,219 | – | – | |||||||||||||||
Risk-Managed | |||||||||||||||||||
INTECH Risk-Managed Stock Fund | 270,000,144 | 227,551,728 | – | – | |||||||||||||||
Value | |||||||||||||||||||
Janus Mid Cap Value Fund | 3,356,597,373 | 2,990,433,695 | – | – | |||||||||||||||
Janus Small Cap Value Fund | 492,215,988 | 766,239,251 | – | – |
(1) Formerly named Janus Core Equity Fund.
4. FEDERAL INCOME TAX
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, 2007 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.
Janus Core, Risk-Managed and Value Funds April 30, 2007 87
Notes to Financial Statements (unaudited) (continued)
Fund | Federal Tax Cost | Unrealized Appreciation | Unrealized (Depreciation) | Net Tax Appreciation/ (Depreciation) | |||||||||||||||
Core | |||||||||||||||||||
Janus Balanced Fund | $ | 2,806,746,539 | $ | 455,008,980 | $ | (13,103,351 | ) | $ | 441,905,629 | ||||||||||
Janus Contrarian Fund | 5,341,235,573 | 1,995,297,839 | (86,146,423 | ) | 1,909,151,416 | ||||||||||||||
Janus Fundamental Equity Fund(1) | 999,029,257 | 211,922,725 | (24,604,473 | ) | 187,318,252 | ||||||||||||||
Janus Growth and Income Fund | 5,924,069,670 | 1,345,338,726 | (147,198,589 | ) | 1,198,140,137 | ||||||||||||||
Risk-Managed | |||||||||||||||||||
INTECH Risk-Managed Stock Fund | 538,457,243 | 79,803,024 | (4,104,934 | ) | 75,698,090 | ||||||||||||||
Value | |||||||||||||||||||
Janus Mid Cap Value Fund | 7,010,121,941 | 1,076,622,656 | (62,245,873 | ) | 1,014,376,783 | ||||||||||||||
Janus Small Cap Value Fund | 1,981,125,032 | 359,823,804 | (49,882,264 | ) | 309,941,540 |
(1) Formerly named Janus Core Equity Fund.
Accumulated capital losses noted below represent net capital loss carryovers, as of October 31, 2006, 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, 2006
Fund | October 31, 2008 | October 31, 2009 | October 31, 2010 | October 31, 2011 | October 31, 2012 | October 31, 2013 | Accumulated Capital Losses | ||||||||||||||||||||||||
Core | |||||||||||||||||||||||||||||||
Janus Balanced Fund(1) | $ | – | $ | – | $ | (28,124,616 | ) | $ | (77,135,986 | ) | $ | – | $ | – | $ | (105,260,602 | ) | ||||||||||||||
Janus Contrarian Fund(1) | (51,830,143 | ) | (25,915,071 | ) | – | (39,096,971 | ) | (38,648,243 | ) | (22,132,836 | ) | (177,623,264 | ) | ||||||||||||||||||
Janus Growth and Income Fund(1) | – | – | – | (87,673,670 | ) | – | – | (87,673,670 | ) |
(1) Capital loss carryovers subject to annual limitations.
During the year ended October 31, 2006 the following capital loss carryovers were utilized by the Funds as indicated in the table below.
Fund | Capital Loss Carryover Utilized | ||||||
Core | |||||||
Janus Balanced Fund | $ | 154,644,820 | |||||
Janus Contrarian Fund | 25,915,071 | ||||||
Janus Fundamental Equity Fund(1) | 73,979,455 | ||||||
Janus Growth and Income Fund | 437,388,443 |
(1) Formerly named Janus Core Equity Fund.
5. CAPITAL SHARE TRANSACTIONS
For the six-month period ended April 30, 2007 (unaudited) and the fiscal year ended October 31, 2006 | Janus Balanced Fund | Janus Contrarian Fund | Janus Fundamental Equity Fund(1) | ||||||||||||||||||||||||
(all numbers in thousands) | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |||||||||||||||||||||
Transactions in Fund Shares | |||||||||||||||||||||||||||
Shares sold | 9,074 | 10,962 | 118,598 | 66,916 | 4,778 | 19,971 | |||||||||||||||||||||
Reinvested dividends and distributions | 1,152 | 1,990 | 28,034 | 2,933 | 209 | 103 | |||||||||||||||||||||
Shares repurchased | (10,369 | ) | (25,952 | ) | (21,559 | ) | (45,052 | ) | (6,006 | ) | (12,576 | ) | |||||||||||||||
Net Increase/(Decrease) in Fund Shares | (143 | ) | (13,000 | ) | 125,073 | 24,797 | (1,019 | ) | 7,498 | ||||||||||||||||||
Shares Outstanding, Beginning of Period | 102,954 | 115,954 | 229,534 | 204,737 | 40,039 | 32,541 | |||||||||||||||||||||
Shares Outstanding, End of Period | 102,811 | 102,954 | 354,607 | 229,534 | 39,020 | 40,039 |
(1) Formerly named Janus Core Equity Fund.
88 Janus Core, Risk-Managed and Value Funds April 30, 2007
For the six-month period ended April 30, 2007 (unaudited) and the fiscal year ended October 31, 2006 | Janus Growth and Income Fund | INTECH Risk-Managed Stock Fund | |||||||||||||||||
(all numbers in thousands) | 2007 | 2006 | 2007 | 2006 | |||||||||||||||
Transactions in Fund Shares | |||||||||||||||||||
Shares sold | 7,695 | 39,962 | 6,943 | 11,598 | |||||||||||||||
Reinvested dividends and distributions | 1,198 | 2,557 | 1,888 | 1,463 | |||||||||||||||
Shares repurchased | (25,786 | ) | (29,808 | ) | (4,443 | ) | (7,582 | ) | |||||||||||
Net Increase/(Decrease) in Fund Shares | (16,893 | ) | 12,711 | 4,388 | 5,479 | ||||||||||||||
Shares Outstanding, Beginning of Period | 181,513 | 168,802 | 30,298 | 24,819 | |||||||||||||||
Shares Outstanding, End of Period | 164,620 | 181,513 | 34,686 | 30,298 | |||||||||||||||
For the six-month period ended April 30, 2007 (unaudited) and the fiscal year ended October 31, 2006 | Janus Mid Cap Value Fund | Janus Small Cap Value Fund | |||||||||||||||||
(all numbers in thousands) | 2007 | 2006 | 2007 | 2006 | |||||||||||||||
Transactions in Fund Shares – Investor Shares | |||||||||||||||||||
Shares sold | 29,744 | 64,536 | 2,182 | 5,736 | |||||||||||||||
Reinvested dividends and distributions | 16,240 | 16,434 | 6,902 | 6,418 | |||||||||||||||
Shares repurchased | (23,304 | ) | (52,818 | ) | (11,379 | ) | (17,025 | ) | |||||||||||
Net Increase/(Decrease) in Fund Shares | 22,680 | 28,152 | (2,295 | ) | (4,871 | ) | |||||||||||||
Shares Outstanding, Beginning of Period | 208,353 | 180,201 | 38,074 | 42,945 | |||||||||||||||
Shares Outstanding, End of Period | 231,033 | 208,353 | 35,779 | 38,074 | |||||||||||||||
Transactions in Fund Shares – Institutional Shares | |||||||||||||||||||
Shares sold | 3,188 | 12,688 | 2,731 | 4,182 | |||||||||||||||
Reinvested dividends and distributions | 3,392 | 2,999 | 5,649 | 6,019 | |||||||||||||||
Shares repurchased | (2,679 | ) | (4,428 | ) | (7,871 | ) | (17,743 | ) | |||||||||||
Net Increase/(Decrease) in Fund Shares | 3,901 | 11,259 | 509 | (7,542 | ) | ||||||||||||||
Shares Outstanding, Beginning of Period | 42,741 | 31,482 | 30,246 | 37,788 | |||||||||||||||
Shares Outstanding, End of Period | 46,642 | 42,741 | 30,755 | 30,246 |
6. PENDING LEGAL MATTERS
In the fall of 2003, the Securities and Exchange Commission ("SEC"), the Office of the New York State Attorney General ("NYAG"), the Colorado Attorney General ("COAG"), and the Colorado Division of Securities ("CDS") announced that they were investigating alleged frequent trading practices in the mutual fund industry. On August 18, 2004, Janus Capital announced that it had reached final settlements with the SEC, the NYAG, the COAG, and the CDS related to such regulators' investigations into Janus Capital's frequent trading arrangements.
A number of civil lawsuits were brought against Janus Capital and certain of its affiliates, the Janus funds, and related entities and individuals based on allegations similar to those announced by the above regulators and were filed in several state and federal jurisdictions. Such lawsuits alleged a variety of theories for recovery including, but not limited to, the federal securities laws, other federal statutes (including ERISA), and various common law doctrines. The Judicial Panel on Multidistrict Litigation transferred these actions to the U.S. District Court for the District of Maryland (the "Court") for coordinated proceedings. On September 29, 2004, five consolidated amended complaints were filed with the Court that generally include: (i) claims by a putative class of investors in certain Janus funds asserting claims on behalf of the investor class (Marini, et al. v. Janus Investment Fund, et al., U.S. District Court, District of Maryland, Case No. 04-CV-00497); (ii) derivative claims by investors in certain Janus funds ostensibly on behalf of such funds (Steinberg et al. v. Janus Capital Management, LLC et al., U.S. District Court, District of Maryland, Case No. 04-CV-00518); (iii) claims on behalf of participants in the Janus 401(k) plan (Wangberger v. Janus Capital Group Inc., 401(k) Advisory Committee, et al., U.S. District Court, District of Maryland, Case No. JFM-05-2711); (iv) claims brought on behalf of shareholde rs of Janus Capital Group Inc. ("JCGI") on a derivative basis against the Board of Directors of JCGI (Chasen v. Whiston, et al., U.S. District Court, District of Maryland, Case No. 04-MD-00855); and (v) claims by a putative class of shareholders of JCGI asserting claims on behalf of the shareholders (Wiggins, et al. v. Janus Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No. 04-CV-00818). Each of the five complaints initially named JCGI and/or Janus Capital as a defendant. In addition, the
Janus Core, Risk-Managed and Value Funds April 30, 2007 89
Notes to Financial Statements (unaudited) (continued)
following were also named as defendants in one or more of the actions: Janus Investment Fund ("JIF"), Janus Aspen Series ("JAS"), Janus Adviser Series ("JAD"), Janus Distributors LLC, Enhanced Investment Technologies, LLC ("INTECH"), Bay Isle Financial LLC ("Bay Isle"), Perkins, Wolf, McDonnell and Company, LLC ("Perkins"), the Advisory Committee of the Janus 401(k) plan, and the current or former directors of JCGI.
On August 25, 2005, the Court entered orders dismissing most of the claims asserted against Janus Capital and its affiliates by fund investors in the Marini and Steinberg cases (actions (i) and (ii) above) except certain claims under Section 10(b) of the Securities Exchange Act of 1934 and under Section 36(b) of the Investment Company Act of 1940, as amended (the "1940 Act"). On August 15, 2006, the Wangberger complaint in the 401(k) plan class action (action (iii) above) was dismissed by the district court with prejudice; the plaintiff appealed that dismissal decision to the United States Court of Appeals for the Fourth Circuit. That appeal is still pending. The Court also dismissed the Chasen lawsuit (action (iv) above) against JCGI's Board of Directors without leave to amend. Finally, a Motion to Dismiss the Wiggins suit (action (v) above) was granted and the matter was dismissed in May 2007.
In addition to the lawsuits described above, the Auditor of the State of West Virginia ("Auditor"), in his capacity as securities commissioner, has initiated administrative proceedings against many of the defendants in the market timing cases (including JCGI and Janus Capital) and, as a part of its relief, is seeking disgorgement and other monetary relief based on similar market timing allegations (In the Matter of Janus Capital Group Inc. et al., Before the Securities Commissioner, State of West Virginia, Summary Order No. 05-1320). The respondents in these proceedings collectively sought a Writ of Prohibition in state court, which was denied. Their subsequent Petition for Appeal was also denied. Consequently, in September 2006, JCGI and Janus Capital filed their answer to the Auditor's summa ry order instituting proceedings and requested a hearing. A hearing is currently scheduled for June 28, 2007. JCGI and Janus Capital, as well as other similarly situated defendants, continue to challenge the statutory authority of the Auditor to bring such an action.
In addition to the "market timing" actions described above, Janus Capital was 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 (Walter Sins, et al. v. Janus Capital Management LLC, U.S. District Court, District of Colorado, Case No. 04-CV-01647-WDM-MEH; Michael Fleisher, et al. v. Janus Capital Management, LLC, 04-CV-02395-MSK-CBS). The action was filed in 2004 by fund investors asserting breach of fiduciary duty under Section 36(b) of the 1940 Act. The plaintiffs sought declaratory and injunctive relief and an unspecified amount of damages. In April 2007, the parties in the litigation jointly filed a Stipulation Regarding Dismissal of Claims With Prejudice ("Stipulation of Dismissal"), and on May 2, 2007, the Colorado District Court approved the Stipulation of Dismissal and dismissed the case.
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 (Pfeiffer v. Credit Suisse First Boston aka In re Initial Public Offering Antitrust Litigation, U.S. District Court, Southern District of New York, Case No. 01-CV-2014). 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. In March 2006, the defendants, including Janus Capital, filed a Petition for a Writ of Certiorari with the U.S. Supreme Court to review the decision of the U. S. Court of Appeals. The U.S. Supreme Court granted the Petition for a Writ of Certiorari and heard argument on the matter on March 27, 2007. The parties are now awaiting a decision on the matter from the U.S. Supreme Court.
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.
90 Janus Core, Risk-Managed and Value Funds April 30, 2007
Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to their portfolio securities is available: (i) without charge, upon request, by calling 1-800-525-3713 (toll free); (ii) on the Funds' website at www.janus.com/proxyvoting; and (iii) on the SEC's website at http://www.sec.gov. Additionally, information regarding each Fund's proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through www.janus.com and from the SEC's website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Funds file their complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Funds' Form N-Q: (i) is available on the SEC's website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-3713 (toll free).
Approval of Advisory Agreements During the Period
The Trustees of Janus Investment Fund, more than eighty-five percent of whom have never been affiliated with the adviser ("Independent Trustees"), oversee the management of each of the Funds and, as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the three Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each of the Funds, the Trustees received and reviewed a substantial amount of information provided by Janus Capital and the respective subadvisers in response to requests of the Independent Trustees and their independent legal counsel. They also received and reviewed a considerable amount of information and analysis provided 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 independent legal counsel.
At a meeting held on December 20, 2006, based on their evaluation of the information provided by Janus Capital, the subadvisers and the independent fee consultant and other information, the Trustees determined that the overall arrangements between each Fund and Janus Capital were fair and reasonable in light of the nature, extent and quality of the services provided by Janus Capital, its affiliates and the subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting all of the Trustees unanimously approved the continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, for the period from February 1, 2007 through February 1, 2008 (January 1, 2007 through January 1, 2008 for INTECH Risk-Managed Stock Fund and Janus Global Research Fund), subject to earlier termination as provided in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees' determination to approve the continuation of the agreements are discussed separately below.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective and strategy of each Fund and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, 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 Truste e committees, communicating with shareholders and overseeing the activities of other service providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
The Trustees concluded that: the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements; that, taking into account steps taken to address a small portion of the Funds whose performance lagged that of the median of their peers for certain periods, the
Janus Core, Risk-Managed and Value Funds April 30, 2007 91
Additional Information (unaudited) (continued)
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 performance results of each Fund over various time periods. They reviewed information comparing each Fund's performance with the performance of comparable funds and peer groups identified by Lipper Inc., an independent provider of investment company data, and with the Fund's benchmark index. They concluded that the performance of most Funds was good to very good under current market conditions. Although the performance of some Funds lagged that of the median of their peers for certain periods, the Trustees also concluded that Janus Capital had taken appropriate steps to address those instances of under-performance and that the more recent performance of most of those Funds had been improving.
Costs of Services Provided
The Trustees examined information on the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by Lipper. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and administrative) fees for most of the Funds, in some cases after contractual expense limitations, was below the mean management fee rate of the respective peer group of funds selected by Lipper.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent and the competitive market for mutual funds in different distribution channels. They concluded that the compensation methodology provided a good alignment of the interests of the portfolio managers with the interests of Fund shareholders.
The Trustees also reviewed management fees charged by Janus Capital to its separate account clients and to its subadvised funds (for which Janus Capital provides only services related to portfolio management). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fees for Funds having a similar strategy, the Trustees noted that, under the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administrative services, oversight of the Funds' other service providers, Trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the spread between the average fee rates charged to the Funds and the fee rates that Janus Capital charged to its separate account clients was significantly smaller than the average spread for such fee rates of other advisers, based on publicly available data and research conducted by their independent fee consultant.
In considering the fees charged by Janus Capital, the Trustees noted that, in addition to the previously approved performance fee structure for Janus Worldwide Fund and certain other Funds that would become operative in February 2007, they also had negotiated with Janus Capital a temporary waiver of a portion of the investment advisory fee paid by Janus Worldwide Fund to Janus Capital to provide for a possible reduction in the rate of advisory fee payable by the Fund for the period July 1, 2006 through January 31, 2007 if the investment performance of the Fund should lag that of its benchmark index performance over the applicable performance measurement period.
The Trustees reviewed information on the profitability of Janus Capital and its affiliates of their relationships with each Fund, as well as an explanation of the methodology utilized in allocating various expenses among the Funds and other clients. The Trustees also reviewed the financial statements of Janus Capital's parent company and its corporate structure. In their review, the Trustees considered whether Janus Capital and each subadviser receive adequate incentives to manage the Funds effectively. The Trustees recognized that profitability comparisons among investment advisers are difficult because very little comparative information is publicly available and profitability of any adviser is affected by numerous factors, including the organizational structure of the particular manager, the types of funds and other accounts it manages, possible other lines of business, the methodology for allocating expenses and the Adviser's capital str ucture and cost of capital. However, based on the information available and taking those factors into account, the Trustees concluded that Janus Capital's profitability with respect to each Fund in relation to the services rendered was not unreasonable.
The Trustees concluded that the management fees and other compensation payable by each Fund to Janus Capital and its affiliates, as well as the fees paid by Janus Capital to the
92 Janus Core, Risk-Managed and Value Funds April 30, 2007
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 and the subadviser charge 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 and any subadviser, the investment performance of the Fund and any expense limitations agreed to by Janus Capital.
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of the Funds increase. They noted that, although most Funds pay advisory fees at a fixed rate as a percentage of net assets, without any breakpoints, the management fee rate paid by each Fund, after any contractual expense limitations, was below the mean management fee rate of the Fund's peer group selected by Lipper; and, for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of many of the Funds declined in the past few years, these Funds benefited from having advisory fee rates that remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for several Funds that will cause the effective rate of advisor y fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through lower charges of third-party service providers based on the combined scale of all of the Funds. Based on all of the information they reviewed, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of economies of scale at the current asset level of the Fund.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and that the transfer agent receives compensation directly from the non-money market Funds for services provided. The Trustees also considered Janus Capital's past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary research products and services benefiting those Funds and/or other clients of Janus Capital, as well as Janus Capital's prior agreement not to use any Fund's brokerage transactions to obtain third party research products or services. The Trustees concluded that Janus Capital's use of "soft" commission dollars of a Fund to obtain proprietary resear ch products and services was consistent with regulatory requirements and guidelines and was likely to benefit the Funds. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital may potentially benefit from their relationship with each other in other ways. They 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 any Fund could attract other business to Janus Capital or other Janus funds and that the success of Janus Capital could enhance Janus Capital's ability to serve the Funds.
After full consideration of the above factors as well as other factors, all of the Trustees, including all of the Independent Trustees, concluded that the proposed continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, was in the best interest of the respective Funds and their shareholders.
Janus Core, Risk-Managed and Value Funds April 30, 2007 93
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.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized and unsubsidized ratios for the past fiscal year. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting a Fund's unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and/or Janus Services, LLC and reflects a Fund's subsidized expense ratio. Both the total annual fund operating expenses ratio and net annual fund operating expenses ratio are based on average net assets as of the fiscal year ended October 31, 2006. The ratios also include expenses indirectly incurred by the Fund as a result of investing in other investment companies or pooled investments, which are not reflected in the "Financial Highlights" of this report. As a result, these ratios may be higher or lower than those shown in the "Financial Highlights" in this repo rt. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
2. SCHEDULES OF INVESTMENTS
Following the performance overview section is each Fund's Schedule of Investments. This schedule reports the industry concentrations and types of securities held in each Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
Funds that invest in foreign securities also provide a summary of investments by country. This summary reports the Fund's exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country in which the company is incorporated.
2A. FORWARD CURRENCY CONTRACTS
A table listing forward currency contracts follows each Fund's Schedule of Investments (if applicable). Forward currency contracts are agreements to deliver or receive a preset amount of currency at a future date. Forward currency contracts are used to hedge against foreign currency risk in the Fund's long-term holdings.
The table provides the name of the foreign currency, the settlement date of the contract, the amount of the contract, the value of the currency in U.S. dollars and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the change in currency exchange rates from the time the contract was opened to the last day of the reporting period.
2B. FUTURES
A table listing futures contracts follows each Fund's Schedule of Investments (if applicable). Futures contracts are contracts that obligate the buyer to receive and the seller to deliver an instrument or money at a specified price on a specified date. Futures are used to hedge against adverse movements in securities prices, currency risk or interest rates.
The table provides the name of the contract, number of contracts held, the expiration date, the principal amount, value and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the marked-to-market amount for the last day of the reporting period.
2C. OPTIONS
A table listing option 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.
94 Janus Core, Risk-Managed and Value Funds April 30, 2007
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.
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 applicable 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 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, expense ratios and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income per share, which comprises dividends and interest income earned on securities held by the Fund. Following is the total of gains/(losses), realized and unrealized. Dividends and distributions are then subtracted to arrive at the NAV per share at the end of the period.
The next line reflects the average annual total return reported the last day of the period.
Also included are the expense ratios, or the percentage of 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 the 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 figure is the portfolio turnover rate, which measures the buying and selling activity in a Fund. Portfolio turnover is affected by market conditions, changes in the 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 Core, Risk-Managed and Value Funds April 30, 2007 95
Notes
96 Janus Core, Risk-Managed and Value Funds April 30, 2007
Notes
Janus Core, Risk-Managed and Value Funds April 30, 2007 97
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 (6/07)
C-0507-333 111-24-104 06-07
2007 Semiannual Report
Janus International & Global Funds
Janus Global Opportunities Fund
Janus Global Research Fund
Janus Overseas Fund
Janus Worldwide Fund
Look Inside. . .
• Portfolio management perspective
• Investment strategy behind your fund
• Fund performance, characteristics and holdings
Table of Contents
Janus International & Global Funds
Co-Chief Investment Officers' Letter to Shareholders | 1 | ||||||
Useful Information About Your Fund Report | 4 | ||||||
Management Commentaries and Schedules of Investments | |||||||
Janus Global Opportunities Fund | 5 | ||||||
Janus Global Research Fund | 11 | ||||||
Janus Overseas Fund | 19 | ||||||
Janus Worldwide Fund | 26 | ||||||
Statements of Assets and Liabilities | 34 | ||||||
Statements of Operations | 35 | ||||||
Statements of Changes in Net Assets | 36 | ||||||
Financial Highlights | 38 | ||||||
Notes to Schedules of Investments | 40 | ||||||
Notes to Financial Statements | 42 | ||||||
Additional Information | 51 | ||||||
Explanations of Charts, Tables and Financial Statements | 54 | ||||||
Shareholder Meeting | 56 | ||||||
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.
Co–Chief Investment Officers' Letter to the Shareholders
Jonathan Coleman
Co-Chief Investment Officer
Gibson Smith
Co-Chief Investment Officer
Dear Shareholders,
We would like to thank you for your investment in the Janus Funds. Your support is what drives us in our quest to deliver strong, consistent fund performance.
Major Market Themes
Equity markets delivered healthy gains during the six months ended April 30, 2007, amid continued evidence of strong U.S. economic growth with modest inflation. Despite a brief bout of market volatility in late February and early March, markets rebounded quickly on hopes of monetary easing by the Federal Reserve (Fed). While U.S. corporate profit growth showed signs of slowing, robust mergers and acquisitions (M&A) and private equity transactions continued to provide valuation support to equities in the U.S. and around the globe.
Continued Strong Performance
We are pleased to report that several fund managers continued to deliver strong performance compared to their peers. For the one-year period ended April 30, 2007, 81% of Janus' retail funds ranked within Lipper's top two quartiles based on total returns. For the three-year period, 68% of our retail funds achieved first- or second- quartile Lipper rankings, and 67% ranked in Lipper's top two quartiles for the five-year period. (See complete rankings on page 3)
Investment Team Depth
We're proud of the depth we've built in our investment team over the past few years. Recently, we said farewell to several long-term Janus portfolio managers who announced their retirements. In transitioning the leadership of their portfolios, we're confident that our investment team bench strength will ensure smooth transitions.
Management of Janus Global Life Sciences Fund will reside in the capable hands of Andy Acker. Barney Wilson will assume sole portfolio management responsibilities for Janus Global Technology Fund. In addition, Gibson Smith and Darrell Watters, with more than 33 years of combined investment experience, will co-manage Janus Flexible Bond Fund. Jason Groom, a seasoned fixed-income professional with 13 years of investment experience, will assume co-portfolio management responsibilities with Darrell Watters for Janus Short-Term Bond Fund, previously managed by Gibson Smith. Lastly, Craig Jacobson will join Eric Thorderson as Co-Portfolio Manager of all Janus money market funds, with the exception of Janus Tax-Exempt Money Market Fund, for which he will be sole Portfolio Manager.
It's important to note that we will continue to focus on the same investment objectives and employ the same in-depth, fundamental analysis and company-by-company approach to portfolio construction that are Janus hallmarks. We believe all of these individuals possess the skills and experience necessary to lead your Funds to strong performance.
Outlook
Looking ahead, with most U.S. equity indexes near all-time highs at the end of the period, we will closely monitor several fundamental factors for directional cues. First, despite the weakness in the U.S. housing sector and the associated credit quality issues in the subprime mortgage market, the U.S. unemployment rate was near historic lows. We intend to watch the labor market closely for any sign of a slowdown that could impact consumer sentiment and economic growth. Similarly, we plan to monitor the higher-quality prime mortgage market and other areas of consumer lending for any indication of credit quality deterioration.
Second, U.S. corporate profit growth has experienced double-digit gains for several years, which, combined with strong liquidity from corporate M&A and private equity transactions, has supported higher equity valuations. We will continue to watch both the future path of corporate earnings and the overall liquidity in the markets to determine whether current valuations can be sustained.
In summary, while there are both positive and negative factors that could influence the markets in the coming months, we view the fundamental economic outlook as positive. While inflationary concerns and questions about the strength of consumer spending abound, we feel valuations for equities are reasonable by historic standards. In fact, as overall economic growth slows, investors could place an increasing premium on the
Janus International & Global Funds April 30, 2007 1
Continued
shares of companies with strong growth prospects. We believe Janus' fundamental research can be beneficial in such an environment. Regardless of the macroeconomic climate, we remain dedicated to rewarding your confidence in Janus with strong, consistent fund performance.
Sincerely,
Jonathan Coleman
Co-Chief Investment Officer
Gibson Smith
Co-Chief Investment Officer
2 Janus International & Global Funds April 30, 2007
Lipper Rankings (unaudited)
Lipper Rankings – Based on total return as of 4/30/07 | |||||||||||||||||||||||||||||||||||||||||||||||
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 Fund | |||||||||||||||||||||||||||||||||||||||||||||||
(Inception Date) | |||||||||||||||||||||||||||||||||||||||||||||||
Janus Fund (2/70) | Large-Cap Growth Funds | 5 | 34 / 723 | 19 | 117 / 620 | 29 | 147 / 506 | 38 | 74 / 195 | 10 | 2 / 20 | ||||||||||||||||||||||||||||||||||||
Janus Enterprise Fund(1) (9/92) | Mid-Cap Growth Funds | 5 | 26 / 628 | 11 | 53 / 499 | 6 | 21 / 393 | 45 | 72 / 161 | 34 | 17 / 49 | ||||||||||||||||||||||||||||||||||||
Janus Orion Fund (6/00) | Multi-Cap Growth Funds | 13 | 62 / 497 | 2 | 5 / 395 | 5 | 13 / 317 | N/A | N/A | 29 | 66 / 232 | ||||||||||||||||||||||||||||||||||||
Janus Research Fund(1)(2) (5/93) | Large-Cap Growth Funds | 1 | 1 / 723 | 2 | 9 / 620 | 3 | 11 / 506 | 1 | 1 / 195 | 2 | 1 / 81 | ||||||||||||||||||||||||||||||||||||
Janus Triton Fund(1) (2/05) | Small-Cap Growth Funds | 33 | 178 / 536 | N/A | N/A | N/A | N/A | N/A | N/A | 4 | 21 / 476 | ||||||||||||||||||||||||||||||||||||
Janus Twenty Fund* (4/85) | Large-Cap Growth Funds | 2 | 9 / 723 | 1 | 3 / 620 | 1 | 3 / 506 | 3 | 4 / 195 | 3 | 1 / 40 | ||||||||||||||||||||||||||||||||||||
Janus Venture Fund* (4/85) | Small-Cap Growth Funds | 3 | 11 / 536 | 7 | 29 / 437 | 10 | 33 / 364 | 27 | 39 / 147 | 10 | 1 / 10 | ||||||||||||||||||||||||||||||||||||
Janus Global Life Sciences Fund (12/98) | Health/Biotechnology Funds | 79 | 134 / 169 | 50 | 75 / 151 | 56 | 74 / 132 | N/A | N/A | 38 | 18 / 47 | ||||||||||||||||||||||||||||||||||||
Janus Global Technology Fund (12/98) | Science & Technology Funds | 33 | 94 / 287 | 32 | 83 / 260 | 52 | 125 / 241 | N/A | N/A | 27 | 20 / 75 | ||||||||||||||||||||||||||||||||||||
Janus Balanced Fund(1) (9/92) | Mixed-Asset Target Allocation Moderate Funds | 25 | 102 / 423 | 17 | 53 / 319 | 39 | 81 / 212 | 6 | 6 / 113 | 4 | 1 / 29 | ||||||||||||||||||||||||||||||||||||
Janus Contrarian Fund (2/00) | Multi-Cap Core Funds | 1 | 2 / 897 | 1 | 1 / 661 | 1 | 2 / 479 | N/A | N/A | 11 | 31 / 323 | ||||||||||||||||||||||||||||||||||||
Janus Fundamental Equity Fund(1) (6/96) | Large-Cap Core Funds | 90 | 713 / 795 | 1 | 10 / 670 | 7 | 41 / 567 | 1 | 2 / 255 | 1 | 1 / 212 | ||||||||||||||||||||||||||||||||||||
Janus Growth and Income Fund(1) (5/91) | Large-Cap Core Funds | 97 | 772 / 795 | 12 | 79 / 670 | 28 | 159 / 567 | 4 | 9 / 255 | 6 | 4 / 76 | ||||||||||||||||||||||||||||||||||||
INTECH Risk-Managed Stock Fund (2/03) | Multi-Cap Core Funds | 49 | 434 / 897 | 22 | 144 / 661 | N/A | N/A | N/A | N/A | 32 | 172 / 548 | ||||||||||||||||||||||||||||||||||||
Janus Mid Cap Value Fund - Inv(1)(3) (8/98) | Mid-Cap Value Funds | 43 | 128 / 300 | 63 | 147 / 232 | 41 | 73 / 178 | N/A | N/A | 6 | 4 / 68 | ||||||||||||||||||||||||||||||||||||
Janus Small Cap Value Fund - Inv*(3) (10/87) | Small-Cap Core Funds | 14 | 98 / 713 | 74 | 410 / 556 | 81 | 350 / 432 | 11 | 16 / 145 | 16 | 21 / 132 | ||||||||||||||||||||||||||||||||||||
Janus Federal Tax-Exempt Fund(1) (5/93) | General Municipal Debt Funds | 56 | 135 / 241 | 71 | 164 / 230 | 72 | 155 / 216 | 79 | 109 / 137 | 80 | 55 / 68 | ||||||||||||||||||||||||||||||||||||
Janus Flexible Bond Fund(1) (7/87) | Intermediate Investment Grade Debt Funds | 38 | 198 / 530 | 52 | 226 / 442 | 18 | 65 / 380 | 31 | 54 / 174 | 24 | 6 / 24 | ||||||||||||||||||||||||||||||||||||
Janus High-Yield Fund(1) (12/95) | High Current Yield Funds | 40 | 174 / 443 | 39 | 146 / 378 | 68 | 209 / 308 | 16 | 20 / 127 | 5 | 5 / 99 | ||||||||||||||||||||||||||||||||||||
Janus Short-Term Bond Fund(1) (9/92) | Short Investment Grade Debt Funds | 53 | 126 / 237 | 51 | 101 / 199 | 46 | 65 / 142 | 41 | 32 / 79 | 54 | 13 / 24 | ||||||||||||||||||||||||||||||||||||
Janus Global Opportunities Fund(1) (6/01) | Global Funds | 33 | 132 / 399 | 94 | 281 / 301 | 85 | 198 / 234 | N/A | N/A | 24 | 49 / 209 | ||||||||||||||||||||||||||||||||||||
Janus Global Research Fund(1)(4) (2/05) | Multi-Cap Growth Funds | 4 | 15 / 497 | N/A | N/A | N/A | N/A | N/A | N/A | 1 | 4 / 424 | ||||||||||||||||||||||||||||||||||||
Janus Overseas Fund(1) (5/94) | International Funds | 1 | 1 / 987 | 1 | 1 / 803 | 2 | 12 / 661 | 4 | 11 / 280 | 1 | 1 / 117 | ||||||||||||||||||||||||||||||||||||
Janus Worldwide Fund(1) (5/91) | Global Funds | 7 | 25 / 399 | 90 | 270 / 301 | 96 | 225 / 234 | 69 | 66 / 96 | 32 | 5 / 15 | ||||||||||||||||||||||||||||||||||||
Janus Smart Portfolio - Growth (12/05) | Mixed-Asset Target Allocation Growth Funds | 11 | 64 / 609 | N/A | N/A | N/A | N/A | N/A | N/A | 7 | 41 / 598 | ||||||||||||||||||||||||||||||||||||
Janus Smart Portfolio - Moderate (12/05) | Mixed-Asset Target Allocation Moderate Funds | 18 | 73 / 423 | N/A | N/A | N/A | N/A | N/A | N/A | 9 | 35 / 417 | ||||||||||||||||||||||||||||||||||||
Janus Smart Portfolio - Conservative (12/05) | Mixed-Asset Target Allocation Conservative Funds | 8 | 28 / 365 | N/A | N/A | N/A | N/A | N/A | N/A | 4 | 11 / 344 |
(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)Formerly named Janus Mercury Fund.
(3)Rating is for the Investor Share class only; other classes may have different performance characteristics.
(4)Formerly named Janus Research Fund.
*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, 2007 3
Useful Information About Your Fund Report
Management Commentaries
The Management Commentaries in this report include valuable insight from the Funds' managers as well as statistical information to help you understand how your Fund's performance and characteristics stack up against those of comparable indices.
Please keep in mind that the opinions expressed by the Funds' managers in the Management Commentaries are just that: opinions. They are a reflection of their best judgment at the time this report was compiled, which was April 30, 2007. 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 Management Commentary within this Semiannual Report. Please refer to this information when reviewing the Expense Example for each Fund.
Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including redemption fees (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, 2006 to April 30, 2007.
Actual Expenses
The first line of the table in each example provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of the table in each example provides information about hypothetical account values and hypothetical expenses based upon the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Janus Capital Management LLC ("Janus Capital") has contractually agreed to waive Janus Global Research Fund's total operating expenses, excluding brokerage commissions, interest, taxes and extraordinary expenses, to certain limits until at least March 1, 2008. Expenses in the example reflect the application of this waiver. Had the waiver not been in effect, your expenses would have been higher. More information regarding the waiver is available in the Funds' prospectuses.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as redemption fees. These fees are fully described in the prospectus. Therefore, the second line of each table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
4 Janus International & Global Funds April 30, 2007
Janus Global Opportunities Fund (unaudited)
Ticker: JGVAX
Fund Snapshot
This global fund seeks to find strong world-class businesses at attractive valuations.
Jason Yee
co-portfolio
manager
Gregory Kolb
co-portfolio
manager
Performance Overview
For the six months ending April 30, 2007, Janus Global Opportunities Fund gained 17.08%, outperforming its benchmark, the Morgan Stanley Capital International (MSCI) World IndexSM, which advanced 11.87%.
Equity markets around the globe delivered healthy gains during the period amid continued evidence of strong economic growth and modest inflation. After a brief period of market volatility in late February and early March, markets rebounded quickly and many indexes posted double-digit gains. While U.S. corporate profit growth showed signs of slowing, robust mergers and acquisitions (M&A) and private equity transactions continued to provide key valuation support to equities in the U.S. and around the world.
Holdings that Contributed to Performance
Within the Fund, holdings in the consumer discretionary and consumer staples sectors drove performance, relative to the benchmark.
Among consumer discretionary positions, Amazon.com advanced as our thesis for investing in the U.S.-based online retailer played out. While the rest of the market fretted over higher operational investments that resulted in lower profits, we believed this was a short-term issue. Over the past six months, the slowdown in Amazon's spending started to materialize and the resulting operating leverage contributed largely to strong profits and cash flow levels. The company also announced its first share buyback, which should further enhance returns going forward. Despite a nearly 38% rise in the stock, we believe Amazon was attractively valued and we maintained our position at period-end.
Another consumer discretionary position, international cable television system operator Liberty Global, contributed significantly. A business with historically robust cash flow stemming from millions of cable television subscribers, the stock benefited from market enthusiasm for management's share buyback during the period. Additionally, as European M&A activity heightened, the private market valuations on recent deals within the cable space suggested that the company's shares were still attractively valued.
Apparel company Esprit Holdings of Hong Kong added to gains as it continued to grow rapidly. An increasingly-established brand in Europe, the company expanded in under-penetrated markets such as Germany, France and Spain. Solid execution has translated into strong earnings and we were rewarded for our conviction in this position.
Holdings that Detracted from Performance
Diminishing relative returns were select investments in the financials, industrials and information technology sectors.
Two Japanese consumer lending companies, Promise Company and Acom Company, were among those that weighed on the financials sector. Shares of both companies lagged the market amid rising concerns that new government regulations may pose a future risk to the historically high-margin unsecured lending business. Fundamentally, we believe the companies should continue to maintain healthy margins, albeit lower than before the new regulations came into effect. In our opinion, shares may continue to be pressured in the near future by cautious investor sentiment.
Multifaceted conglomerate Berkshire Hathaway also ranked among the Fund's largest detractors during the period. Considering its run-up in the preceding six months, it was not surprising to see some weakness in the shares as investors took profits. We continue to believe this holding represents an attractive risk/reward.
Outlook
With equity indexes around the world near multi-year or all-time highs at the end of the period, we are closely monitoring several fundamental factors for directional cues. First, despite the weakness in the U.S. housing sector and the associated credit quality issues in the subprime mortgage market, the U.S. economy has remained healthy. Should any signs of a U.S. slowdown appear, markets around the world could experience an adverse reaction. Second, corporate M&A and private equity transactions, which have supported higher equity valuations in the U.S., have swept into Europe and contributed to higher prices there. While watching
Janus International & Global Funds April 30, 2007 5
Janus Global Opportunities Fund (unaudited)
developments on the economic and liquidity fronts, we will continue to adhere to our rigorous stock selection process in an effort to identify promising investments that may be trading at a discount to their intrinsic value.
Janus Global Opportunities Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Amazon.com, Inc. | 2.28 | % | |||||
Liberty Global, Inc. - Class A | 1.90 | % | |||||
Esprit Holdings, Ltd. | 1.62 | % | |||||
Expedia, Inc. | 1.60 | % | |||||
IAC/InterActiveCorp | 1.42 | % |
5 Lowest Contributors/Detractors to Performance – Holdings
Contribution | |||||||
Promise Company, Ltd. | (0.26 | )% | |||||
Acom Company, Ltd. | (0.07 | )% | |||||
NewAlliance Bancshares, Inc. | 0.05 | % | |||||
Berkshire Hathaway, Inc. - Class B | 0.07 | % | |||||
Nissin Healthcare Food Service Company, Ltd. | 0.11 | % |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Morgan Stanley Capital International World IndexSM Weighting | |||||||||||||
Consumer Discretionary | 12.62 | % | 46.39 | % | 11.46 | % | |||||||||
Consumer Staples | 1.76 | % | 7.33 | % | 8.11 | % | |||||||||
Financials | 1.19 | % | 23.53 | % | 26.20 | % | |||||||||
Materials | 0.85 | % | 3.66 | % | 6.05 | % | |||||||||
Industrials | 0.70 | % | 5.91 | % | 10.76 | % |
5 Lowest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Morgan Stanley Capital International World IndexSM Weighting | |||||||||||||
Utilities | 0.00 | % | 0.00 | % | 4.39 | % | |||||||||
Energy | 0.00 | % | 0.00 | % | 8.95 | % | |||||||||
Health Care | 0.27 | % | 2.90 | % | 9.20 | % | |||||||||
Telecommunication Services | 0.27 | % | 2.06 | % | 4.49 | % | |||||||||
Information Technology | 0.33 | % | 8.22 | % | 10.41 | % |
6 Janus International & Global Funds April 30, 2007
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2007
Dell, Inc. Computers | 7.8 | % | |||||
Liberty Global, Inc. - Class A Broadcast Services and Programming | 6.0 | % | |||||
Esprit Holdings, Ltd. Distribution/Wholesale | 5.8 | % | |||||
Willis Group Holdings, Ltd. Insurance Brokers | 5.8 | % | |||||
Tyco International, Ltd. (U.S. Shares) Diversified Operations | 5.8 | % | |||||
31.2 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2007
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2007 | As of October 31, 2006 | ||||||
![]() | ![]() | ||||||
Janus International & Global Funds April 30, 2007 7
Janus Global Opportunities Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Five Year | Since Inception* | Total Annual Fund Operating Expenses | |||||||||||||||||||
Janus Global Opportunities Fund | 17.08 | % | 16.55 | % | 9.29 | % | 10.88 | % | 1.17 | % | |||||||||||||
Morgan Stanley Capital International World IndexSM | 11.87 | % | 16.98 | % | 12.17 | % | 8.39 | % | |||||||||||||||
Lipper Quartile | – | 2 | nd | 4 | th | 1 | st | ||||||||||||||||
Lipper Ranking - based on total return for Global Funds | – | 132/399 | 198/234 | 49/209 |
Visit janus.com to view current performance
and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
A 2% redemption fee may be imposed on shares held for 3 months or less. Effective with purchases on and after May 15, 2007, a 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
Foreign investing involves special risks such as currency fluctuations and political uncertainty.
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.
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.
June 30, 2001 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
Net dividends reinvested are the dividends that remain to be reinvested after foreign tax obligations have been met. Such obligations vary from country to country.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – June 29, 2001
8 Janus International & Global Funds April 30, 2007
(unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,170.80 | $ | 5.87 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.39 | $ | 5.46 |
*Expenses are equal to the annualized expense ratio of 1.09%, 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, 2007 9
Janus Global Opportunities Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Common Stock - 97.5% | |||||||||||
Agricultural Chemicals - 2.5% | |||||||||||
20,007 | Syngenta A.G. | $ | 3,979,568 | ||||||||
Broadcast Services and Programming - 6.0% | |||||||||||
266,573 | Liberty Global, Inc. - Class A* | 9,567,305 | |||||||||
Cellular Telecommunications - 2.0% | |||||||||||
1,105,391 | Vodafone Group PLC | 3,146,570 | |||||||||
Computers - 7.8% | |||||||||||
493,500 | Dell, Inc.* | 12,441,134 | |||||||||
Dental Supplies and Equipment - 2.7% | |||||||||||
120,725 | Patterson Companies, Inc.*,# | 4,353,344 | |||||||||
Distribution/Wholesale - 5.8% | |||||||||||
773,500 | Esprit Holdings, Ltd. | 9,360,942 | |||||||||
Diversified Operations - 5.8% | |||||||||||
282,615 | Tyco International, Ltd. (U.S. Shares) | 9,221,727 | |||||||||
E-Commerce/Products - 5.0% | |||||||||||
130,055 | Amazon.com, Inc.*,# | 7,976,273 | |||||||||
E-Commerce/Services - 6.4% | |||||||||||
299,987 | Expedia, Inc.* | 7,085,693 | |||||||||
80,632 | IAC/InterActiveCorp* | 3,073,692 | |||||||||
10,159,385 | |||||||||||
Electronic Components - Miscellaneous - 4.5% | |||||||||||
177,115 | Koninklijke (Royal) Philips Electronics N.V. | 7,243,177 | |||||||||
Finance - Consumer Loans - 2.3% | |||||||||||
49,350 | Acom Company, Ltd.# | 1,780,614 | |||||||||
62,850 | Promise Company, Ltd.# | 1,891,036 | |||||||||
3,671,650 | |||||||||||
Finance - Investment Bankers/Brokers - 4.7% | |||||||||||
144,565 | JP Morgan Chase & Co. | 7,531,837 | |||||||||
Food - Canned - 2.9% | |||||||||||
152,820 | TreeHouse Foods, Inc.* | 4,605,995 | |||||||||
Food - Catering - 2.9% | |||||||||||
364,629 | Nissin Healthcare Food Service Company, Ltd. | 4,660,873 | |||||||||
Food - Retail - 4.5% | |||||||||||
93,430 | Metro A.G.# | 7,235,493 | |||||||||
Insurance Brokers - 5.8% | |||||||||||
225,575 | Willis Group Holdings, Ltd.# | 9,253,087 | |||||||||
Multimedia - 2.3% | |||||||||||
89,822 | Vivendi Universal S.A.# | 3,702,238 | |||||||||
Property and Casualty Insurance - 3.9% | |||||||||||
745,000 | Nipponkoa Insurance Company, Ltd. | 6,214,352 | |||||||||
Reinsurance - 2.1% | |||||||||||
913 | Berkshire Hathaway, Inc. - Class B* | 3,312,364 |
Shares or Principal Amount | Value | ||||||||||
Retail - Apparel and Shoe - 2.2% | |||||||||||
74,223 | Next PLC | $ | 3,458,484 | ||||||||
Rubber/Plastic Products - 3.4% | |||||||||||
288,100 | Tenma Corp. | 5,415,150 | |||||||||
Savings/Loan/Thrifts - 3.2% | |||||||||||
329,060 | NewAlliance Bancshares, Inc.# | 5,136,627 | |||||||||
Schools - 3.9% | |||||||||||
130,470 | Apollo Group, Inc. - Class A* | 6,171,231 | |||||||||
Television - 4.9% | |||||||||||
680,669 | British Sky Broadcasting Group PLC | 7,795,042 | |||||||||
Total Common Stock (cost $116,562,868) | 155,613,848 | ||||||||||
Money Markets - 2.2% | |||||||||||
13,750 | Janus Institutional Cash Management Fund - Institutional Shares, 5.32% | 13,750 | |||||||||
3,485,250 | Janus Institutional Money Market Fund - Institutional Shares, 5.26% | 3,485,250 | |||||||||
Total Money Markets (cost $3,499,000) | 3,499,000 | ||||||||||
Other Securities - 18.7% | |||||||||||
2,377,058 | Foreign Government Bonds† | 2,377,058 | |||||||||
23,997,241 | State Street Navigator Securities Lending Prime Portfolio† | 23,997,241 | |||||||||
3,407,849 | U.S. Treasury Notes/Bonds† | 3,407,849 | |||||||||
Total Other Securities (cost $29,782,148) | 29,782,148 | ||||||||||
Total Investments (total cost $149,844,016) – 118.4% | 188,894,996 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (18.4)% | (29,317,737 | ) | |||||||||
Net Assets – 100% | $ | 159,577,259 |
Summary of Investments by Country - (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Bermuda | $ | 27,835,756 | 14.7 | % | |||||||
France | 3,702,238 | 2.0 | % | ||||||||
Germany | 7,235,493 | 3.8 | % | ||||||||
Japan | 19,962,025 | 10.6 | % | ||||||||
Netherlands | 7,243,177 | 3.8 | % | ||||||||
Switzerland | 3,979,568 | 2.1 | % | ||||||||
United Kingdom | 14,400,096 | 7.6 | % | ||||||||
United States†† | 104,536,643 | 55.4 | % | ||||||||
Total | $ | 188,894,996 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (37.7% excluding Short-Term Securities and Other Securities).
See Notes to Schedules of Investments and Financial Statements.
10 Janus International & Global Funds April 30, 2007
Janus Global Research Fund (unaudited)
Ticker: JARFX
Fund Snapshot
This fund pulls together the best ideas from Janus' research analysts into a single package.
Team-Based Approach
Led by Jim Goff,
Director of Research
Performance Overview
For the six-month period ended April 30, 2007, Janus Global Research Fund gained 16.87%, outgaining the 11.55% return posted by its primary benchmark, the Morgan Stanley Capital International (MSCI) World Growth Index and the 9.10% return of its secondary benchmark, the Russell 1000® Index.
Equity markets around the globe delivered healthy gains during the period amid continued evidence of strong economic growth and modest inflation. International markets outperformed the U.S. market during the period. After a brief period of market volatility in late February and early March, stocks rebounded strongly, and many indexes posted double-digit gains. While U.S. corporate profit growth showed signs of slowing, robust merger and acquisition (M&A) activity and private equity transactions continued to provide key valuation support to equities in the U.S. and around the world.
There are two primary factors that drive the basic character and composition of a mutual fund. The first is its prospectus, or investment guidelines, which defines allowable areas of investment. Janus Global Research Fund's broad investment guidelines allow us to invest in what we believe to be the most attractive equity markets in the world. The second driver is the portfolio manager, whose specific criteria or investment style normally determines which types of stocks are favored for investment. In the case of Janus Global Research Fund, the research analyst team at Janus directly drives the portfolio. We believe that this approach allows consideration of more ideas and styles than management by a single portfolio manager would permit. We also believe that the Fund's high level of diversification across individual holdings, sectors, market caps and geographies is the result of this method, thereby supporting our objective to generate stron g investment returns while managing risk through diversification.
Janus Global Research Fund is managed to be sector neutral, meaning that the Fund's exposure to different sectors is approximately equal to that of the benchmark. The Fund relies on the strength of our research analysts' stock selections in seeking to generate superior performance, rather than making sector bets. Accordingly, our research and investment process focuses on finding the best ideas within each sector, rather than trying to guess which sectors will perform best in any given period. For the six-month period ended April 30, 2007, each of our eight sector teams outperformed the corresponding portion of the benchmark.
Discussion of Individual Holdings that Contributed to Fund Performance
While this discussion may be less relevant here than for most funds due to the nature of Janus Global Research Fund, we believe it is worthwhile to recognize why the Fund was able to outperform its benchmark during the period. The Fund is not only diversified across sectors, but also individual holdings. As of 4/30/07, the Fund held 120 stocks with the top 10 securities representing only around 17% of the Fund's net assets. This low level of concentration means that it is not likely that the returns of one or even a handful of stocks drove the fortunes of the Fund. The important thing, however, is that winners far outnumbered losers.
Holdings that Benefited Fund Performance
Within the Fund, positions in the materials and financials sectors provided the largest contributions to relative performance during the period. Our top seven contributors to performance during the period were Owens-Illinois, Companhia Vale Rio Doce (CVRD), CapitaLand, Potash Corporation of Saskatchewan, Reliance Industries, NRG Energy and Suntech Power Holdings. This list of securities represents seven different sectors, thereby highlighting the diversity of the Fund.
Owens-Illinois led all individual performers during the period. The company benefited from investor optimism that new CEO Al Stroucken's focus on pricing and cost reductions may drive margin growth. This thesis gained credibility midway through the period as the company put its solidly performing – but non-core – plastics packaging business up for sale.
Brazilian iron ore producer, CVRD, also contributed to performance. A key supplier to booming infrastructure markets in India and China, the company fell out of favor when it announced plans to purchase Canadian nickel producer, Inco, in August 2006. By the period's close, however, the markets had warmed to the fact that the deal effectively diversified CVRD's revenues beyond iron ore and could enhance earnings.
Janus International & Global Funds April 30, 2007 11
Janus Global Research Fund (unaudited)
A top performer from the financials space, Singapore-based real estate developer, CapitaLand, added significantly to gains. In addition to a beneficial supply/demand environment in Singapore, we believe the company is also well-positioned to profit from the expected growth of real estate opportunities across Asia.
Holdings that Detracted from Fund Performance
Our biggest detractors included optionsXpress Holdings, Whole Foods Market, Nissan Motor, Varian Medical Systems, Melco International Development, SanDisk and SiRF Technology Holdings.
From an individual security standpoint, the poorest performer was online options trading platform operator, optionsXpress. The company faced persistent challenges in adding new accounts, even during the traditionally busy first quarter, but we still believe the stock offers a very attractive risk/reward and added to the position.
Another laggard was organic food retailer, Whole Foods Market. The stock dropped amid reduced same-store sales reports, and lowered expectations going forward. Displeased with developments, we liquidated our stake.
Outlook
We would caution investors that our recent investment returns, both on an absolute basis and relative to the market, were unsustainably high and should not be expected to continue at such a high level. Simply put, though, we are excited about Janus Global Research Fund. We are pleased not only with our performance during the period, but also with how we achieved it – through outperformance by each of our eight sector teams. Long term, we are optimistic about our ability to potentially produce market-beating returns due to the strength of the Janus research team and a consistent and repeatable investment process that seeks to produce a well-diversified portfolio of best ideas. The Fund attempts to add value through research, and to manage risk through diversification, in an effort to produce strong risk-adjusted returns for our investors. We appreciate your investment in the Fund, and we are committed as substantial investors alongside o f you.
Janus Global Research Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Owens-Illinois, Inc. | 1.09 | % | |||||
Companhia Vale do Rio Doce (ADR) | 0.96 | % | |||||
CapitaLand, Ltd. | 0.87 | % | |||||
Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 0.75 | % | |||||
Reliance Industries, Ltd. | 0.68 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
optionsXpress Holdings, Inc. | (0.28 | )% | |||||
Whole Foods Market, Inc. | (0.21 | )% | |||||
Nissan Motor Company, Ltd. | (0.19 | )% | |||||
Varian Medical Systems, Inc. | (0.18 | )% | |||||
Melco International Development, Ltd. | (0.13 | )% |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Morgan Stanley Capital International World Growth Index Weighting | |||||||||||||
Materials | 3.28 | % | 8.35 | % | 7.50 | % | |||||||||
Consumer Discretionary | 3.11 | % | 18.29 | % | 14.60 | % | |||||||||
Consumer Staples | 2.58 | % | 11.22 | % | 11.05 | % | |||||||||
Information Technology | 2.44 | % | 16.07 | % | 18.08 | % | |||||||||
Financials | 1.79 | % | 12.87 | % | 13.15 | % |
5 Lowest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Morgan Stanley Capital International World Growth Index Weighting | |||||||||||||
Telecommunication Services | 0.12 | % | 1.34 | % | 2.35 | % | |||||||||
Utilities | 0.66 | % | 1.25 | % | 2.49 | % | |||||||||
Industrials | 1.23 | % | 10.39 | % | 11.58 | % | |||||||||
Energy | 1.36 | % | 7.81 | % | 6.26 | % | |||||||||
Health Care | 1.77 | % | 12.41 | % | 12.94 | % |
12 Janus International & Global Funds April 30, 2007
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2007
Syngenta A.G. Agricultural Chemicals | 2.0 | % | |||||
Owens-Illinois, Inc. Containers - Metal and Glass | 2.0 | % | |||||
Reliance Industries, Ltd. Oil Refining and Marketing | 1.9 | % | |||||
Potash Corporation of Saskatchewan, Inc. (U.S. Shares) Agricultural Chemicals | 1.9 | % | |||||
BAE Systems PLC Aerospace and Defense | 1.8 | % | |||||
9.6 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2007
Emerging markets comprised 8.8% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2007 | As of October 31, 2006 | ||||||
![]() | ![]() | ||||||
Janus International & Global Funds April 30, 2007 13
Janus Global Research Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Since Inception* | Total Annual Fund Operating Expenses | Net Annual Fund Operating Expenses | |||||||||||||||||||
Janus Global Research Fund | 16.87 | % | 19.87 | % | 23.18 | % | 1.16 | % | 1.16 | % | |||||||||||||
Morgan Stanley Capital International World Growth Index | 11.55 | % | 13.91 | % | 14.96 | % | |||||||||||||||||
Russell 1000® Index | 9.10 | % | 15.16 | % | 12.42 | % | |||||||||||||||||
Lipper Quartile | – | 1 | st | 1 | st | ||||||||||||||||||
Lipper Ranking - based on total return for Multi-Cap Growth Funds | – | 15/497 | 4/424 |
Visit janus.com to view current performance
and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The Fund has a performance-based management fee that adjusts upward or downward based on the Fund's performance relative to an approved benchmark index over a performance measurement period.
A 2% redemption fee may be imposed on shares held for 3 months or less. Effective with purchases on and after May 15, 2007, a 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
Janus Capital Management LLC has contractually agreed to waive the Fund's total operating expenses (excluding brokerage commissions, interest, taxes, and extraordinary expenses) to a certain limit until at least March 1, 2008. The expense waiver shown reflects the application of such limit and is detailed in the Statement of Additional Information. Total returns shown include fee waivers, if any, and without such waivers, the Fund's total return would have been lower.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. Contractual waivers agreed to by Janus Services LLC are included under "Net Annual Fund Operating Expenses." All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
Foreign investing involves special risks such as currency fluctuations and political uncertainty.
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.
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.
February 28, 2005 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
Net dividends reinvested are the dividends that remain to be reinvested after foreign tax obligations have been met. Such obligations vary from country to country.
Effective December 31, 2006, Janus Research Fund changed its name to "Janus Global Research Fund" and adopted an additional investment strategy to normally invest at least 40% of its net assets in securities of issuers from different countries located throughout the world, excluding the United States.
See Notes to Schedules of Investments for index definitions.
Effective January 1, 2007, the Fund changed its primary benchmark from the Russell 1000® Index to the Morgan Stanley Capital International ("MSCI") World Growth Index. The new benchmark provides a more appropriate representation of the Fund's investments. The benchmark index is used to calculate the Fund's performance-based fee adjustment to the investment advisory fee for periods after January 1, 2007.
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.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – February 25, 2005
14 Janus International & Global Funds April 30, 2007
(unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,168.70 | $ | 6.18 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.09 | $ | 5.76 |
*Expenses are equal to the annualized expense ratio of 1.15%, 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.
Janus International & Global Funds April 30, 2007 15
Janus Global Research Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Common Stock - 98.2% | |||||||||||
Advertising Sales - 0.5% | |||||||||||
14,880 | Lamar Advertising Co.*,# | $ | 897,859 | ||||||||
Advertising Services - 1.2% | |||||||||||
137,993 | WPP Group PLC | 2,043,330 | |||||||||
Aerospace and Defense - 4.2% | |||||||||||
325,235 | BAE Systems PLC | 2,951,776 | |||||||||
20,755 | Boeing Co. | 1,930,215 | |||||||||
45,415 | Embraer-Empresa Brasileira de Aeronautica S.A. (ADR) | 2,130,418 | |||||||||
7,012,409 | |||||||||||
Agricultural Chemicals - 3.9% | |||||||||||
17,325 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 3,110,184 | |||||||||
16,870 | Syngenta A.G.# | 3,355,591 | |||||||||
6,465,775 | |||||||||||
Agricultural Operations - 2.0% | |||||||||||
17,465 | Bunge, Ltd. | 1,323,148 | |||||||||
2,412,000 | Chaoda Modern Agriculture Holdings, Ltd. | 1,986,309 | |||||||||
3,309,457 | |||||||||||
Apparel Manufacturers - 0.7% | |||||||||||
410,500 | Ports Design, Ltd. | 1,155,543 | |||||||||
Applications Software - 0.5% | |||||||||||
36,460 | Red Hat, Inc.*,# | 770,764 | |||||||||
Audio and Video Products - 1.2% | |||||||||||
38,500 | Sony Corp. | 2,050,691 | |||||||||
Automotive - Cars and Light Trucks - 2.3% | |||||||||||
38,711 | BMW A.G.# | 2,397,828 | |||||||||
133,500 | Nissan Motor Company, Ltd. | 1,346,913 | |||||||||
3,744,741 | |||||||||||
Beverages - Wine and Spirits - 0.6% | |||||||||||
60,905 | C&C Group PLC | 1,017,715 | |||||||||
Brewery - 1.3% | |||||||||||
28,496 | Interbrew S.A.# | 2,218,721 | |||||||||
Broadcast Services and Programming - 0.5% | |||||||||||
31,320 | Grupo Televisa S.A. (ADR) | 878,526 | |||||||||
Building - Residential and Commercial - 1.1% | |||||||||||
2,245 | NVR, Inc.*,# | 1,849,880 | |||||||||
Casino Hotels - 0.4% | |||||||||||
8,325 | Harrah's Entertainment, Inc. | 710,123 | |||||||||
Casino Services - 0.7% | |||||||||||
37,245 | Scientific Games Corp. - Class A* | 1,239,886 | |||||||||
Cellular Telecommunications - 0.7% | |||||||||||
20,595 | America Movil S.A. de C.V. - Series L (ADR) | 1,081,855 | |||||||||
Chemicals - Diversified - 0.9% | |||||||||||
24,300 | Shin-Etsu Chemical Company, Ltd. | 1,572,480 | |||||||||
Commercial Banks - 1.1% | |||||||||||
54,000 | Fukuoka Financial Group, Inc.* | 411,265 | |||||||||
23,782 | Standard Chartered PLC | 737,241 | |||||||||
14,890 | SVB Financial Group*,# | 762,666 | |||||||||
1,911,172 | |||||||||||
Commercial Services - 0.2% | |||||||||||
33,100 | Park24 Company, Ltd.# | 410,674 | |||||||||
Computer Services - 0.7% | |||||||||||
32,425 | Ceridian Corp.* | 1,094,668 |
Shares or Principal Amount | Value | ||||||||||
Computers - 1.1% | |||||||||||
17,800 | Apple, Inc.* | $ | 1,776,440 | ||||||||
Computers - Memory Devices - 0.9% | |||||||||||
97,760 | EMC Corp.* | 1,483,997 | |||||||||
Computers - Peripheral Equipment - 0.7% | |||||||||||
42,517 | Logitech International S.A.* | 1,148,356 | |||||||||
Consumer Products - Miscellaneous - 0.6% | |||||||||||
14,830 | Kimberly-Clark Corp. | 1,055,451 | |||||||||
Containers - Metal and Glass - 2.5% | |||||||||||
18,345 | Ball Corp. | 929,908 | |||||||||
109,740 | Owens-Illinois, Inc.* | 3,302,077 | |||||||||
4,231,985 | |||||||||||
Cosmetics and Toiletries - 0.7% | |||||||||||
29,635 | Avon Products, Inc. | 1,179,473 | |||||||||
Data Processing and Management - 0.4% | |||||||||||
17,995 | NAVTEQ Corp.*,# | 636,303 | |||||||||
Diagnostic Kits - 0.7% | |||||||||||
23,365 | Dade Behring Holdings, Inc. | 1,147,455 | |||||||||
Distribution/Wholesale - 1.3% | |||||||||||
99,600 | Esprit Holdings, Ltd. | 1,205,365 | |||||||||
329,600 | Li & Fung, Ltd. | 1,014,674 | |||||||||
2,220,039 | |||||||||||
Diversified Minerals - 1.3% | |||||||||||
51,250 | Companhia Vale do Rio Doce (ADR) | 2,081,263 | |||||||||
Diversified Operations - 2.5% | |||||||||||
56,865 | General Electric Co. | 2,096,044 | |||||||||
140,000 | Hutchison Whampoa, Ltd. | 1,346,686 | |||||||||
359,000 | Melco International Development, Ltd. | 695,462 | |||||||||
4,138,192 | |||||||||||
Drug Delivery Systems - 0.7% | |||||||||||
27,075 | Hospira, Inc.* | 1,097,891 | |||||||||
Electronic Components - Semiconductors - 3.6% | |||||||||||
579,769 | ARM Holdings PLC | 1,543,201 | |||||||||
36,100 | Microsemi Corp.*,# | 834,271 | |||||||||
1,905 | Samsung Electronics Company, Ltd. | 1,166,518 | |||||||||
39,125 | SiRF Technology Holdings, Inc.* | 949,173 | |||||||||
44,490 | Texas Instruments, Inc. | 1,529,121 | |||||||||
6,022,284 | |||||||||||
Electronic Forms - 0.6% | |||||||||||
26,005 | Adobe Systems, Inc.* | 1,080,768 | |||||||||
Energy - Alternate Sources - 0.9% | |||||||||||
58,090 | JA Solar Holdings Company, Ltd. (ADR)* | 1,416,815 | |||||||||
Enterprise Software/Services - 0.5% | |||||||||||
45,740 | Oracle Corp.* | 859,912 | |||||||||
Entertainment Software - 0.6% | |||||||||||
18,605 | Electronic Arts, Inc.* | 937,878 | |||||||||
Finance - Consumer Loans - 0.4% | |||||||||||
12,730 | SLM Corp. | 685,256 | |||||||||
Finance - Credit Card - 0.5% | |||||||||||
13,450 | American Express Co. | 816,012 |
See Notes to Schedules of Investments and Financial Statements.
16 Janus International & Global Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Finance - Investment Bankers/Brokers - 5.8% | |||||||||||
6,325 | Bear Stearns Companies, Inc. | $ | 984,803 | ||||||||
26,610 | JP Morgan Chase & Co. | 1,386,381 | |||||||||
35,714 | Macquarie Bank, Ltd.# | 2,548,299 | |||||||||
20,120 | Merrill Lynch & Company, Inc. | 1,815,427 | |||||||||
63,770 | optionsXpress Holdings, Inc. | 1,573,844 | |||||||||
24,407 | UBS A.G.# | 1,581,866 | |||||||||
9,890,620 | |||||||||||
Finance - Mortgage Loan Banker - 1.1% | |||||||||||
30,070 | Fannie Mae | 1,771,724 | |||||||||
Food - Diversified - 1.6% | |||||||||||
72,676 | Cadbury Schweppes PLC | 958,775 | |||||||||
4,219 | Nestle S.A. | 1,671,476 | |||||||||
2,630,251 | |||||||||||
Food - Retail - 1.1% | |||||||||||
193,550 | Tesco PLC | 1,778,593 | |||||||||
Food - Wholesale/Distribution - 0.5% | |||||||||||
24,345 | Sysco Corp. | 797,055 | |||||||||
Independent Power Producer - 0.4% | |||||||||||
8,102 | NRG Energy, Inc.*,# | 639,734 | |||||||||
Investment Management and Advisory Services - 1.5% | |||||||||||
33,230 | National Financial Partners Corp. | 1,530,906 | |||||||||
20,010 | T. Rowe Price Group, Inc. | 994,097 | |||||||||
2,525,003 | |||||||||||
Machinery - General Industrial - 0.9% | |||||||||||
3,420,000 | Shanghai Electric Group Company, Ltd. | 1,458,340 | |||||||||
Medical - Biomedical and Genetic - 1.1% | |||||||||||
9,635 | Celgene Corp.* | 589,277 | |||||||||
18,135 | Genzyme Corp.* | 1,184,396 | |||||||||
1,773,673 | |||||||||||
Medical - Drugs - 3.7% | |||||||||||
41,630 | Cubist Pharmaceuticals, Inc.*,# | 892,964 | |||||||||
24,465 | Merck & Company, Inc. | 1,258,479 | |||||||||
25,075 | Novartis A.G.# | 1,459,723 | |||||||||
13,216 | Roche Holding A.G. | 2,493,067 | |||||||||
6,104,233 | |||||||||||
Medical - HMO - 0.7% | |||||||||||
19,615 | Coventry Health Care, Inc.* | 1,134,335 | |||||||||
Medical - Nursing Homes - 0.8% | |||||||||||
20,295 | Manor Care, Inc. | 1,316,943 | |||||||||
Medical Instruments - 1.1% | |||||||||||
4,890 | Intuitive Surgical, Inc.*,# | 634,037 | |||||||||
27,980 | St. Jude Medical, Inc.* | 1,197,265 | |||||||||
1,831,302 | |||||||||||
Medical Products - 0.4% | |||||||||||
16,315 | Varian Medical Systems, Inc.* | 688,656 | |||||||||
Multimedia - 0.6% | |||||||||||
42,495 | News Corporation, Inc. - Class A | 951,463 | |||||||||
Oil - Field Services - 0.3% | |||||||||||
7,435 | Schlumberger, Ltd. (U.S. Shares) | 548,926 | |||||||||
Oil and Gas Drilling - 1.2% | |||||||||||
62,555 | Nabors Industries, Ltd.* | 2,009,267 | |||||||||
Oil Companies - Exploration and Production - 1.5% | |||||||||||
6,962 | Apache Corp. | 504,745 | |||||||||
37,709 | EnCana Corp. | 1,973,955 | |||||||||
2,478,700 |
Shares or Principal Amount | Value | ||||||||||
Oil Companies - Integrated - 1.4% | |||||||||||
16,240 | Lukoil (ADR) | $ | 1,252,006 | ||||||||
12,550 | Suncor Energy, Inc. | 1,006,917 | |||||||||
2,258,923 | |||||||||||
Oil Field Machinery and Equipment - 1.1% | |||||||||||
240,775 | Wellstream Holdings PLC* | 1,829,597 | |||||||||
Oil Refining and Marketing - 1.9% | |||||||||||
86,316 | Reliance Industries, Ltd. | 3,235,966 | |||||||||
Optical Supplies - 0.8% | |||||||||||
9,355 | Alcon, Inc. (U.S. Shares) | 1,262,270 | |||||||||
Power Converters and Power Supply Equipment - 1.0% | |||||||||||
31,805 | Hubbell, Inc. | 1,644,000 | |||||||||
Real Estate Management/Services - 0.5% | |||||||||||
25,000 | Mitsubishi Estate Company, Ltd. | 773,931 | |||||||||
Real Estate Operating/Development - 1.6% | |||||||||||
497,000 | CapitaLand, Ltd.# | 2,741,611 | |||||||||
Reinsurance - 0.7% | |||||||||||
322 | Berkshire Hathaway, Inc. - Class B* | 1,168,216 | |||||||||
Respiratory Products - 0.7% | |||||||||||
27,445 | Respironics, Inc.* | 1,118,658 | |||||||||
Retail - Apparel and Shoe - 1.8% | |||||||||||
11,505 | Abercrombie & Fitch Co. - Class A | 939,498 | |||||||||
18,384 | Industria de Diseno Textil S.A.# | 1,126,940 | |||||||||
18,190 | Nordstrom, Inc. | 998,995 | |||||||||
3,065,433 | |||||||||||
Retail - Consumer Electronics - 1.1% | |||||||||||
18,095 | Best Buy Company, Inc. | 844,132 | |||||||||
11,360 | Yamada Denki Company, Ltd.# | 1,046,735 | |||||||||
1,890,867 | |||||||||||
Retail - Drug Store - 0.9% | |||||||||||
40,895 | CVS/Caremark Corp. | 1,482,035 | |||||||||
Retail - Major Department Stores - 0.3% | |||||||||||
5,875 | J.C. Penney Company, Inc. | 464,654 | |||||||||
Retail - Restaurants - 0.4% | |||||||||||
9,080 | Chipotle Mexican Grill, Inc. - Class A*,# | 592,288 | |||||||||
Semiconductor Components/Integrated Circuits - 1.1% | |||||||||||
77,535 | Cypress Semiconductor Corp.* | 1,769,349 | |||||||||
Semiconductor Equipment - 0.8% | |||||||||||
46,680 | ASM Lithography Holding N.V. (U.S. Shares)*,# | 1,272,030 | |||||||||
Soap and Cleaning Preparations - 1.1% | |||||||||||
34,134 | Reckitt Benckiser PLC | 1,870,412 | |||||||||
Telecommunication Equipment - Fiber Optics - 0.9% | |||||||||||
60,555 | Corning, Inc.* | 1,436,365 | |||||||||
Telecommunication Services - 2.2% | |||||||||||
42,430 | Amdocs, Ltd. (U.S. Shares)* | 1,559,302 | |||||||||
24,160 | SAVVIS, Inc.*,# | 1,245,931 | |||||||||
43,289 | Time Warner Telecom, Inc. - Class A* | 887,425 | |||||||||
3,692,658 | |||||||||||
Television - 1.4% | |||||||||||
205,044 | British Sky Broadcasting Group PLC# | 2,348,170 | |||||||||
Therapeutics - 2.1% | |||||||||||
28,560 | Amylin Pharmaceuticals, Inc.*,# | 1,180,385 | |||||||||
15,480 | Gilead Sciences, Inc.* | 1,265,026 | |||||||||
19,940 | United Therapeutics Corp.* | 1,114,845 | |||||||||
3,560,256 |
See Notes to Schedules of Investments and Financial Statements.
Janus International & Global Funds April 30, 2007 17
Janus Global Research Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Tobacco - 1.0% | |||||||||||
23,814 | Altria Group, Inc. | $ | 1,641,261 | ||||||||
Transportation - Services - 0.7% | |||||||||||
16,595 | United Parcel Service, Inc. - Class B | 1,168,786 | |||||||||
Transportation - Truck - 0.5% | |||||||||||
18,915 | Landstar System, Inc. | 913,784 | |||||||||
Web Portals/Internet Service Providers - 0.6% | |||||||||||
35,610 | Yahoo!, Inc.* | 998,504 | |||||||||
Wireless Equipment - 2.1% | |||||||||||
57,100 | Crown Castle International Corp.* | 1,960,814 | |||||||||
33,905 | QUALCOMM, Inc. | 1,485,039 | |||||||||
3,445,853 | |||||||||||
Total Common Stock (cost $138,159,315) | 163,426,734 | ||||||||||
Money Markets - 2.1% | |||||||||||
2,032,758 | Janus Institutional Cash Management Fund - Institutional Shares, 5.32% | 2,032,758 | |||||||||
1,455,342 | Janus Institutional Money Market Fund - Institutional Shares, 5.26% | 1,455,342 | |||||||||
Total Money Markets (cost $3,488,100) | 3,488,100 | ||||||||||
Other Securities - 11.5% | |||||||||||
4,705,491 | Foreign Government Bonds† | 4,705,491 | |||||||||
14,341,098 | State Street Navigator Securities Lending Prime Portfolio† | 14,341,098 | |||||||||
16,177 | U.S. Treasury Notes/Bonds† | 16,177 | |||||||||
Total Other Securities (cost $19,062,766) | 19,062,766 | ||||||||||
Total Investments (total cost $160,710,181) – 111.8% | 185,977,600 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (11.8)% | (19,621,967 | ) | |||||||||
Net Assets – 100% | $ | 166,355,633 |
Summary of Investments by Country - (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Australia | $ | 2,548,299 | 1.4 | % | |||||||
Belgium | 2,218,721 | 1.2 | % | ||||||||
Bermuda | 6,707,997 | 3.6 | % | ||||||||
Brazil | 4,211,681 | 2.3 | % | ||||||||
Canada | 6,091,056 | 3.3 | % | ||||||||
Cayman Islands | 1,986,309 | 1.1 | % | ||||||||
China | 2,875,155 | 1.5 | % | ||||||||
Germany | 2,397,828 | 1.3 | % | ||||||||
Hong Kong | 2,042,148 | 1.1 | % | ||||||||
India | 3,235,966 | 1.7 | % | ||||||||
Ireland | 1,017,715 | 0.5 | % | ||||||||
Japan | 7,612,689 | 4.1 | % | ||||||||
Mexico | 1,960,381 | 1.1 | % | ||||||||
Netherlands | 1,820,956 | 1.0 | % | ||||||||
Russia | 1,252,006 | 0.7 | % | ||||||||
Singapore | 2,741,611 | 1.5 | % | ||||||||
South Korea | 1,166,518 | 0.6 | % | ||||||||
Spain | 1,126,940 | 0.6 | % | ||||||||
Switzerland | 12,972,349 | 7.0 | % | ||||||||
United Kingdom | 17,620,397 | 9.4 | % | ||||||||
United States†† | 102,370,878 | 55.0 | % | ||||||||
Total | $ | 185,977,600 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (42.9% excluding Short-Term Securities and Other Securities).
See Notes to Schedules of Investments and Financial Statements.
18 Janus International & Global Funds April 30, 2007
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.
Brent Lynn
portfolio manager
Performance Overview
For the six months ended April 30, 2007, Janus Overseas Fund gained 18.92%. The Fund's primary benchmark, the Morgan Stanley Capital International (MSCI) EAFE® Index, advanced 15.46%, and its secondary benchmark, the MSCI All Country World ex-U.S. IndexSM, appreciated 15.89%.
Equity markets around the globe delivered healthy gains during the period amid continued evidence of reasonable economic growth and modest inflation. After a brief period of market volatility in late February and early March, markets rebounded quickly and many indexes posted double-digit gains for the period. While the U.S. economy showed signs of slowing, many other key countries showed signs of economic strength. Robust merger and acquisition (M&A) activity and private equity transactions continued to provide valuation support to equities in the U.S. and around the world. Among emerging markets, China continued to be a top performer, backed by double-digit economic growth rates and strong local Chinese investor demand for equities.
Strong Performers Included Materials and Consumer Discretionary
Within the Fund, holdings in the materials and consumer discretionary sectors were among those that led performance, relative to the benchmark.
Brazilian iron ore producer Companhia Vale do Rio Doce (CVRD), a materials holding, was the leading individual performer during the period. Steel demand in China and other emerging economies was a key driver of growth for CVRD. The company purchased Canadian nickel producer Inco in January 2007. I believe that the acquisition of Inco will enhance CVRD's earnings power, diversify its mining assets and create significant synergies in its nickel business.
Another key contributor within the materials space was Canadian fertilizer company, Potash Corporation of Saskatchewan. As the world's largest potash fertilizer company and also a large producer of phosphate and nitrogen fertilizers, I believe Potash Corp is well positioned to benefit from higher agricultural product prices and increased fertilizer usage.
Japanese electronics manufacturer Sony, a consumer discretionary name, also contributed to performance. Despite a high-profile recall of laptop batteries and marketplace uncertainties over its PlayStation® 3 (PS3) game console, I believe the company's restructuring effort is gaining traction and the consumer electronics business is improving.
Select Information Technology (IT), Industrials and Consumer Staples Weighed on Performance
From a sector perspective, detractors included IT, industrials and consumer staples.
In the IT space, Silicon-On-Insulator Technologies (SOITEC), the French innovator of silicon-on-insulator wafer technology for semiconductor chips, lagged amid concerns over near-term customer demand. Despite near-term issues, I believe SOITEC's technology will gain traction in a wider variety of semiconductors over time.
Another detractor was Macau gaming company Melco International Development. Macau is rapidly becoming the gaming capital of Asia. Despite some cost overruns and delays in the construction of its Crown Macau casino, I continue to believe that Melco is well positioned to capitalize on the rapid growth in Asian gaming.
Additionally, Indian sugar producer Bajaj Hindusthan underperformed as sugar prices came off 2006 highs. Looking forward, I believe that sugar demand will expand due to ethanol growth worldwide and increased sugar consumption in emerging markets.
Outlook
With many equity indexes around the world near multi-year or all-time highs, I am naturally monitoring the global market closely. During the past six months, the markets and the Fund performed well. I consider six months to be a short length of time, and in future six-month periods, the performance of the Fund may certainly be worse or even negative. Throughout turbulent markets, I have not changed my investment approach. I believe the best way to generate great long-term returns is to make high conviction, long-term investments in world-class companies with exciting growth prospects trading at undeservedly low valuations. As manager of the Fund, my
Janus International & Global Funds April 30, 2007 19
Janus Overseas Fund (unaudited)
sole focus is to deliver superior long-term performance for you. I will perform this job to the best of my ability.
Thank you for your continued investment in Janus Overseas Fund.
Janus Overseas Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Companhia Vale do Rio Doce (ADR) | 2.18 | % | |||||
Potash Corporation of Saskatchewan, Inc. | 1.83 | % | |||||
Reliance Industries, Ltd. | 1.80 | % | |||||
Sony Corp. | 1.64 | % | |||||
Li & Fung, Ltd. | 0.99 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Silicon-On-Insulator Technologies (SOITEC) | (0.56 | )% | |||||
Melco PBL Entertainment (Macau), Ltd. (ADR) | (0.38 | )% | |||||
Bajaj Hindusthan, Ltd. (GDR) | (0.32 | )% | |||||
Park24 Company, Ltd. | (0.22 | )% | |||||
Balrampur Chini Mills, Ltd. | (0.18 | )% |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Morgan Stanley Capital International EAFE® Index Weighting | |||||||||||||
Consumer Discretionary | 4.69 | % | 23.36 | % | 11.91 | % | |||||||||
Materials | 4.28 | % | 9.89 | % | 8.47 | % | |||||||||
Financials | 3.61 | % | 13.05 | % | 29.89 | % | |||||||||
Energy | 3.05 | % | 13.02 | % | 7.02 | % | |||||||||
Industrials | 1.74 | % | 10.19 | % | 11.28 | % |
5 Lowest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Morgan Stanley Capital International EAFE® Index Weighting | |||||||||||||
Utilities | 0.13 | % | 0.37 | % | 5.53 | % | |||||||||
Other* | 0.14 | % | 0.29 | % | 0.00 | % | |||||||||
Telecommunication Services | 0.37 | % | 1.00 | % | 5.46 | % | |||||||||
Health Care | 0.44 | % | 3.58 | % | 7.03 | % | |||||||||
Information Technology | 0.62 | % | 16.70 | % | 5.48 | % |
*Industry not classified by Global Industry Classification Standard.
20 Janus International & Global Funds April 30, 2007
(unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2007
Sony Corp. Audio and Video Products | 5.2 | % | |||||
Reliance Industries, Ltd. Oil Refining and Marketing | 4.6 | % | |||||
Taiwan Semiconductor Manufacturing Company, Ltd. Semiconductor Components/Integrated Circuits | 3.9 | % | |||||
Li & Fung, Ltd. Distribution/Wholesale | 3.9 | % | |||||
Bunge, Ltd. Agricultural Operations | 3.8 | % | |||||
21.4 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2007
Emerging markets comprised 35.6% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2007 | As of October 31, 2006 | ||||||
![]() | ![]() | ||||||
Janus International & Global Funds April 30, 2007 21
Janus Overseas Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | Total Annual Fund Operating Expenses | ||||||||||||||||||||||
Janus Overseas Fund | 18.92 | % | 27.03 | % | 22.00 | % | 14.48 | % | 15.56 | % | 0.92 | % | |||||||||||||||
Morgan Stanley Capital International EAFE® Index | 15.46 | % | 19.81 | % | 16.64 | % | 8.72 | % | 7.91 | % | |||||||||||||||||
Morgan Stanley Capital International All Country World ex- U.S. IndexSM | 15.89 | % | 19.20 | % | 17.83 | % | N/A | 9.07 | %** | ||||||||||||||||||
Morgan Stanley Capital International EAFE® Growth Index | 15.81 | % | 17.49 | % | 14.30 | % | 6.15 | % | 5.67 | %*** | |||||||||||||||||
Lipper Quartile | – | 1 | st | 1 | st | 1 | st | 1 | st | ||||||||||||||||||
Lipper Ranking - based on total return for International Funds | – | 1/987 | 12/661 | 11/280 | 1/117 |
Visit janus.com to view current performance
and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
A 2% redemption fee may be imposed on shares held for 3 months or less. Effective with purchases on and after May 15, 2007, a 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
Foreign investing involves special risks such as currency fluctuations and political uncertainty.
The Fund held approximately 13.0% of its assets in Brazilian securities as of April 30, 2007 and the Fund has experienced significant gains due, in part, to its investments in Brazil. While holdings are subject to change without notice, the Fund's returns and NAV may be affected to a large degree by fluctuations in currency exchange rates or political or economic conditions in Brazil.
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.
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.
May 5, 1994 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
Net dividends reinvested are the dividends that remain to be reinvested after foreign tax obligations have been met. Such obligations vary from country to country.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – May 2, 1994
**The Morgan Stanley Capital International (MSCI) All Country World ex-U.S. Index'sSM since inception returns are calculated from December 31, 1998.
***The Morgan Stanley Capital International (MSCI) EAFE® Growth Index's since inception returns are calculated from April 30, 1994.
22 Janus International & Global Funds April 30, 2007
(unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,189.20 | $ | 4.83 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.38 | $ | 4.46 |
*Expenses are equal to the annualized expense ratio of 0.89%, 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, 2007 23
Janus Overseas Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares/Principal/Contract Amounts | Value | ||||||||||
Common Stock - 99.3% | |||||||||||
Aerospace and Defense - 3.1% | |||||||||||
11,993,004 | BAE Systems PLC | $ | 108,846,456 | ||||||||
2,876,880 | Embraer-Empresa Brasileira de Aeronautica S.A. (ADR)# | 134,954,440 | |||||||||
243,800,896 | |||||||||||
Agricultural Chemicals - 2.8% | |||||||||||
1,222,349 | Potash Corporation of Saskatchewan, Inc. | 218,941,329 | |||||||||
Agricultural Operations - 5.5% | |||||||||||
34,400 | BrasilAgro - Companhia Brasileira de Propriedades Agricolas*,£ | 22,000,689 | |||||||||
3,995,585 | Bunge, Ltd. | 302,705,520 | |||||||||
130,988,317 | Chaoda Modern Agriculture Holdings, Ltd.£ | 107,870,304 | |||||||||
432,576,513 | |||||||||||
Audio and Video Products - 5.2% | |||||||||||
7,652,700 | Sony Corp.# | 407,618,738 | |||||||||
Automotive - Cars and Light Trucks - 0.5% | |||||||||||
2,344,073 | Tata Motors, Ltd. | 42,524,152 | |||||||||
Automotive - Truck Parts and Equipment - Original - 0% | |||||||||||
144,600 | TI Automotive, Ltd.*,ß,oo | 0 | |||||||||
Batteries and Battery Systems - 0% | |||||||||||
529,000 | BYD Company, Ltd.# | 3,249,915 | |||||||||
Broadcast Services and Programming - 0.5% | |||||||||||
1,558,060 | Grupo Televisa S.A. (ADR)# | 43,703,583 | |||||||||
Building - Residential and Commercial - 2.7% | |||||||||||
14,866,500 | Cyrela Brazil Realty S.A. | 155,903,919 | |||||||||
2,748,390 | Gafisa S.A. | 38,727,252 | |||||||||
1,609,500 | Rossi Residencial S.A. | 21,958,173 | |||||||||
216,589,344 | |||||||||||
Casino Hotels - 0.7% | |||||||||||
3,246,540 | Melco PBL Entertainment (Macau), Ltd. (ADR)*,# | 56,554,727 | |||||||||
Commercial Banks - 3.0% | |||||||||||
1,323,237 | Anglo Irish Bank Corporation PLC | 29,733,110 | |||||||||
1,973,525 | Banca Generali S.P.A. (144A) | 27,526,346 | |||||||||
25,111,867 | Banco de Oro | 31,123,136 | |||||||||
495,960 | Banco de Oro (GDR) (144A) | 12,293,286 | |||||||||
1,259,120 | Banco Macro Bansud S.A. (ADR)# | 45,580,144 | |||||||||
765,810 | Julius Baer Holding, Ltd.# | 53,351,359 | |||||||||
2,834,764 | Punjab National Bank, Ltd. | 33,966,753 | |||||||||
233,574,134 | |||||||||||
Commercial Services - 1.0% | |||||||||||
6,385,800 | Park24 Company, Ltd. | 79,229,119 | |||||||||
Computers - Peripheral Equipment - 0.7% | |||||||||||
2,017,099 | Logitech International S.A.* | 54,480,484 | |||||||||
Cosmetics and Toiletries - 1.2% | |||||||||||
704,680 | LG Household & Health Care, Ltd. | 93,412,052 | |||||||||
Dental Supplies and Equipment - 0.3% | |||||||||||
513,427 | Osstem Implant Company, Ltd.* | 23,939,450 | |||||||||
Distribution/Wholesale - 6.4% | |||||||||||
16,660,000 | Esprit Holdings, Ltd.# | 201,620,299 | |||||||||
99,736,110 | Li & Fung, Ltd. | 307,037,633 | |||||||||
508,657,932 | |||||||||||
Diversified Financial Services - 0.1% | |||||||||||
494,156 | Reliance Capital, Ltd. | 8,502,785 |
Shares/Principal/Contract Amounts | Value | ||||||||||
Diversified Minerals - 2.7% | |||||||||||
5,201,735 | Companhia Vale do Rio Doce (ADR)# | $ | 211,242,458 | ||||||||
Diversified Operations - 2.4% | |||||||||||
1,767,200 | Bradespar S.A. | 59,164,788 | |||||||||
53,122,000 | Melco International Development, Ltd. | 102,908,944 | |||||||||
88,157,621 | Polytec Asset Holdings, Ltd.§,£ | 27,040,613 | |||||||||
189,114,345 | |||||||||||
Electric - Distribution - 0.3% | |||||||||||
2,780,900 | Equatorial Energia S.A. | 26,972,444 | |||||||||
Electric Products - Miscellaneous - 2.7% | |||||||||||
11,505,000 | Sharp Corp.# | 210,583,489 | |||||||||
Electronic Components - Semiconductors - 7.1% | |||||||||||
72,886,857 | ARM Holdings PLC | 194,006,697 | |||||||||
425,274 | Samsung Electronics Company, Ltd.# | 260,414,660 | |||||||||
4,590,623 | Silicon-On-Insulator Technologies (SOITEC)*,£ | 107,397,034 | |||||||||
561,818,391 | |||||||||||
Energy - Alternate Sources - 1.7% | |||||||||||
1,034,765 | SunPower Corp. - Class A*,#,£ | 62,789,540 | |||||||||
1,882,270 | Suntech Power Holdings Company, Ltd. (ADR)*,# | 68,288,756 | |||||||||
131,078,296 | |||||||||||
Enterprise Software/Services - 1.0% | |||||||||||
1,582,473 | SAP A.G.# | 76,162,437 | |||||||||
Finance - Commercial - 0.1% | |||||||||||
1,355,525 | Banco Compartamos S.A.* | 6,840,810 | |||||||||
Finance - Mortgage Loan Banker - 0.8% | |||||||||||
1,619,890 | Housing Development Finance Corporation, Ltd. | 64,857,800 | |||||||||
Food - Diversified - 0.3% | |||||||||||
8,276,740 | FU JI Food & Catering Services# | 25,154,907 | |||||||||
Gambling - Non-Hotel - 0.2% | |||||||||||
1,206,100 | Great Canadian Gaming Corp.*,# | 14,365,837 | |||||||||
Hotels and Motels - 0.4% | |||||||||||
3,293,500 | Kingdom Hotel Investments (ADR)* | 30,253,546 | |||||||||
Insurance Brokers - 0.2% | |||||||||||
1,354,044 | Eurodekania, Ltd.*,oo,§,£ | 18,477,927 | |||||||||
Internet Connectivity Services - 0.6% | |||||||||||
965,304 | NDS Group PLC (ADR)*,£ | 49,780,727 | |||||||||
Internet Gambling - 1.4% | |||||||||||
17,910,367 | IG Group Holdings PLC£ | 108,807,372 | |||||||||
Investment Companies - 0.7% | |||||||||||
7,585,174 | SM Investments Corp. | 56,272,582 | |||||||||
Investment Management and Advisory Services - 0.3% | |||||||||||
2,602,432 | Bluebay Asset Management*,# | 23,759,723 | |||||||||
Medical - Biomedical and Genetic - 1.7% | |||||||||||
2,168,395 | Celgene Corp.* | 132,619,038 | |||||||||
Medical - Drugs - 1.3% | |||||||||||
568,460 | Roche Holding A.G.# | 107,234,355 | |||||||||
Multimedia - 2.2% | |||||||||||
10,080,402 | Publishing & Broadcasting, Ltd. | 170,706,288 | |||||||||
Non-Hazardous Waste Disposal - 0.4% | |||||||||||
63,334,512 | China Water Affairs Group, Ltd.*,£ | 33,758,526 | |||||||||
Oil and Gas Drilling - 2.7% | |||||||||||
6,612,137 | Nabors Industries, Ltd.*,# | 212,381,840 |
See Notes to Schedules of Investments and Financial Statements.
24 Janus International & Global Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Shares/Principal/Contract Amounts | Value | ||||||||||
Oil Companies - Exploration and Production - 1.6% | |||||||||||
1,620,217 | Niko Resources, Ltd. | $ | 129,191,102 | ||||||||
Oil Companies - Integrated - 1.3% | |||||||||||
594,680 | Lukoil (ADR) | 45,846,227 | |||||||||
536,765 | Petroleo Brasileiro S.A. (ADR) | 54,336,721 | |||||||||
100,182,948 | |||||||||||
Oil Field Machinery and Equipment - 0.5% | |||||||||||
4,842,701 | Wellstream Holdings PLC* | 36,798,640 | |||||||||
Oil Refining and Marketing - 5.7% | |||||||||||
1,045,875 | Petroplus Holdings A.G.* | 85,548,548 | |||||||||
9,756,730 | Reliance Industries, Ltd. | 365,777,451 | |||||||||
451,325,999 | |||||||||||
Petrochemicals - 0.2% | |||||||||||
506,830 | LG Petrochemical Company, Ltd. | 17,027,430 | |||||||||
Public Thoroughfares - 2.1% | |||||||||||
7,714,465 | Companhia de Concessoes Rodoviarias | 120,667,891 | |||||||||
2,903,400 | Obrascon Huarte Lain Brasil S.A.* | 44,670,991 | |||||||||
165,338,882 | |||||||||||
Real Estate Management/Services - 0.7% | |||||||||||
827,100 | Daito Trust Construction Company, Ltd.# | 38,008,900 | |||||||||
2,651,200 | Sao Carlos Empreendimentos e Participacoes S.A.£ | 21,015,371 | |||||||||
59,024,271 | |||||||||||
Real Estate Operating/Development - 5.1% | |||||||||||
3,235,065 | Ablon Group* | 20,764,301 | |||||||||
114,473,700 | Ayala Land, Inc. | 41,602,576 | |||||||||
4,247,945 | Brascan Residential Properties S.A.* | 32,291,995 | |||||||||
9,180,000 | CapitaLand, Ltd. | 50,639,813 | |||||||||
171,991,000 | China Overseas Land & Investment, Ltd. | 209,288,892 | |||||||||
966,880 | Iguatemi Empresa de Shopping Centers S.A.* | 15,261,766 | |||||||||
2,992,955 | PDG Realty S.A. Empreendimentos e Participacoes* | 20,777,247 | |||||||||
1,584,880 | Rodobens Negocios Imobiliarios S.A.* | 15,520,291 | |||||||||
406,146,881 | |||||||||||
Recreational Centers - 0.6% | |||||||||||
5,787,807 | Orascom Hotels & Development* | 46,982,330 | |||||||||
Retail - Consumer Electronics - 0.9% | |||||||||||
745,000 | Yamada Denki Company, Ltd.# | 68,645,911 | |||||||||
Retail - Major Department Stores - 1.8% | |||||||||||
3,579,064 | KarstadtQuelle A.G.* | 138,632,223 | |||||||||
Semiconductor Components/Integrated Circuits - 5.6% | |||||||||||
5,783,139 | Actions Semiconductor Company, Ltd. (ADR)*,£ | 41,754,264 | |||||||||
5,060,075 | Marvell Technology Group, Ltd.*,# | 81,619,010 | |||||||||
151,591,746 | Taiwan Semiconductor Manufacturing Company, Ltd. | 309,446,529 | |||||||||
1,883,360 | Vimicro International Corp. (ADR)*,£ | 10,433,814 | |||||||||
443,253,617 | |||||||||||
Semiconductor Equipment - 1.4% | |||||||||||
4,144,941 | ASML Holding N.V.*,# | 111,845,860 | |||||||||
Sugar - 1.9% | |||||||||||
5,807,259 | Bajaj Hindusthan, Ltd. | 22,567,013 | |||||||||
1,009,400 | Bajaj Hindusthan, Ltd. (GDR) (144A) | 3,922,033 | |||||||||
13,335,458 | Balrampur Chini Mills, Ltd.£ | 19,771,202 | |||||||||
5,048,700 | Cosan S.A. Industria e Comercio*,£ | 97,190,770 | |||||||||
456,173 | Shree Renuka Sugars, Ltd. | 4,809,987 | |||||||||
148,261,005 |
Shares/Principal/Contract Amounts | Value | ||||||||||
Telecommunication Equipment - Fiber Optics - 1.0% | |||||||||||
3,379,220 | Corning, Inc.*,# | $ | 80,155,098 | ||||||||
Telecommunication Services - 3.7% | |||||||||||
5,925,995 | Amdocs, Ltd. (U.S. Shares)*,# | 217,780,316 | |||||||||
6,314,808 | Reliance Communications, Ltd.* | 72,955,425 | |||||||||
290,735,741 | |||||||||||
Telephone - Integrated - 0.2% | |||||||||||
1,188,890 | GVT Holdings S.A.* | 15,043,313 | |||||||||
Transportation - Marine - 0.1% | |||||||||||
473,740 | Star Asia Financial, Ltd. (144A)*,oo,§ | 4,737,400 | |||||||||
Total Common Stock (cost $5,809,315,760) | 7,842,926,942 | ||||||||||
Money Markets - 0.9% | |||||||||||
69,225,000 | Janus Institutional Money Market Fund - Institutional Shares 5.26% (cost $69,225,000) | 69,225,000 | |||||||||
Purchased Options - Puts - 0.1% | |||||||||||
16,212 | Brazil Bovespa Stock Index expires August 2007, exercise price $197.81 (premiums paid $12,186,398) | 4,096,892 | |||||||||
Other Securities - 7.7% | |||||||||||
7,723,424 | Foreign Government Bonds† | 7,723,424 | |||||||||
598,577,078 | State Street Navigator Securities Lending Prime Portfolio† | 598,577,078 | |||||||||
Total Other Securities (cost $606,300,502) | 606,300,502 | ||||||||||
Total Investments (total cost $6,497,027,660) – 108.0% | 8,522,549,336 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (8.0)% | (634,045,544 | ) | |||||||||
Net Assets – 100% | $ | 7,888,503,792 |
Summary of Investments by Country - (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Argentina | $ | 45,580,144 | 0.5 | % | |||||||
Australia | 170,706,288 | 2.0 | % | ||||||||
Bermuda | 1,105,364,302 | 13.0 | % | ||||||||
Brazil | 1,111,797,411 | 13.0 | % | ||||||||
Canada | 362,498,268 | 4.3 | % | ||||||||
Cayman Islands | 310,796,204 | 3.7 | % | ||||||||
China | 3,249,915 | 0.1 | % | ||||||||
Egypt | 46,982,330 | 0.6 | % | ||||||||
France | 107,397,034 | 1.3 | % | ||||||||
Germany | 214,794,660 | 2.5 | % | ||||||||
Hong Kong | 402,511,089 | 4.7 | % | ||||||||
Hungary | 20,764,301 | 0.2 | % | ||||||||
India | 639,654,601 | 7.5 | % | ||||||||
Ireland | 29,733,110 | 0.4 | % | ||||||||
Italy | 27,526,346 | 0.3 | % | ||||||||
Japan | 804,086,157 | 9.4 | % | ||||||||
Mexico | 50,544,393 | 0.6 | % | ||||||||
Netherlands | 111,845,860 | 1.3 | % | ||||||||
Philippines | 141,291,580 | 1.7 | % | ||||||||
Russia | 45,846,227 | 0.5 | % | ||||||||
Singapore | 50,639,813 | 0.6 | % | ||||||||
South Korea | 394,793,592 | 4.6 | % | ||||||||
Switzerland | 300,614,746 | 3.5 | % | ||||||||
Taiwan | 309,446,529 | 3.6 | % | ||||||||
United Kingdom | 758,257,858 | 8.9 | % | ||||||||
United States†† | 955,826,578 | 11.2 | % | ||||||||
Total | $ | 8,522,549,336 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (3.3% excluding Short-Term Securities and Other Securities).
See Notes to Schedules of Investments and Financial Statements.
Janus International & Global Funds April 30, 2007 25
Janus Worldwide Fund (unaudited)
Ticker: JAWWX
Fund Snapshot
This global fund offers geographic diversification in a single portfolio.
Jason Yee
portfolio manager
For the six months ending April 30, 2007, Janus Worldwide Fund advanced 15.34%, outpacing its benchmark, the Morgan Stanley Capital International (MSCI) World IndexSM, which returned 11.87%.
Equity markets around the globe delivered healthy gains during the period amid continued evidence of strong economic growth and modest inflation. After a brief period of market volatility in late February and early March, markets rebounded quickly and many indexes posted double-digit gains. While U.S. corporate profit growth showed signs of slowing, robust merger and acquisition (M&A) activity and private equity transactions continued to provide key valuation support to equities in the U.S. and around the world.
Select Holdings that Contributed to Fund Performance
Within the Fund, holdings in the consumer discretionary, healthcare and materials sectors led performance, relative to the benchmark.
Among consumer discretionary positions, Amazon.com contributed significantly as my thesis for investing in the U.S.-based online retailer played out. While the rest of the market fretted over higher capital investments that resulted in lower profits, I believed this was a short-term issue. Over the past six months, the slowdown in Amazon's spending started to materialize and the resulting operating leverage contributed largely to strong profits and cash flow. The company also announced its first share buyback, which should further enhance returns going forward. Despite a nearly 38% rise in the stock, I believe Amazon was attractively valued and I maintained the Fund's position at period end.
Another consumer discretionary company, specialty retailer Esprit Holdings of Hong Kong, added to gains as it continued to grow rapidly. An increasingly-established brand in Europe, the company is expanding in under-penetrated markets such as Germany, France and Spain. Solid execution translated into strong earnings and I was rewarded for my conviction in this position.
A healthcare position that contributed to performance was U.S. pharmacy benefit manager Medco Health Solutions. Over the long haul, I expect this business to benefit from the increasing use of generic drugs by U.S. consumers, operating leverage and strong free cash flow generation. During the period, my stake appreciated as a bidding war broke out over competitor Caremark. Drugstore operator CVS eventually won the right to purchase Caremark, which I believe left Medco well positioned as the sole pharmacy benefit manager in the U.S. devoted to this line of business.
Holdings that Detracted from Performance
The Fund's consumer discretionary performance was curtailed somewhat by three U.S. homebuilders that ranked among the largest detractors during the period. Centex, Lennar and Pulte Homes all declined on concerns about the upcoming spring home-selling season, lingering worries that defaults on subprime mortgages will drive existing home inventories higher and overall weak fundamentals in the industry. I believed, however, that with prices near book value, the companies were undervalued. Furthermore, I feel each is poised to outperform to the extent that the Federal Reserve decides to reduce short-term interest rates.
Further diminishing relative returns were investments in the industrials and telecommunication services sectors.
Outlook
With equity indexes around the world near multi-year or all-time highs at the end of the period, we are closely monitoring several fundamental factors for directional cues. First, despite the weakness in the U.S. housing sector and the associated credit quality issues in the subprime mortgage market, the U.S. economy has remained healthy. Should any signs of a U.S. slowdown appear, I believe markets around the world could experience an adverse reaction. Second, corporate M&A and private equity transactions, which have supported higher
26 Janus International & Global Funds April 30, 2007
(unaudited)
equity valuations in the U.S., have swept into Europe and contributed to higher prices there. While watching developments on the economic and liquidity fronts, I will continue to adhere to my rigorous stock selection process in order to identify promising investments that may be trading at a discount to their intrinsic value.
Janus Worldwide Fund At a Glance
5 Largest Contributors to Performance – Holdings
Contribution | |||||||
Amazon.com, Inc. | 1.65 | % | |||||
Esprit Holdings, Ltd. | 1.04 | % | |||||
Medco Health Solutions, Inc. | 1.00 | % | |||||
Expedia, Inc. | 0.81 | % | |||||
IAC/InterActiveCorp | 0.76 | % |
5 Largest Detractors from Performance – Holdings
Contribution | |||||||
Centex Corp. | (0.19 | )% | |||||
Pulte Homes, Inc. | (0.19 | )% | |||||
Marvell Technology Group, Ltd. | (0.17 | )% | |||||
Lennar Corp. | (0.15 | )% | |||||
Nissan Motor Company, Ltd. | (0.11 | )% |
5 Largest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Morgan Stanley Capital International World IndexSM Weighting | |||||||||||||
Consumer Discretionary | 7.69 | % | 36.77 | % | 11.46 | % | |||||||||
Financials | 2.24 | % | 20.07 | % | 26.20 | % | |||||||||
Information Technology | 1.95 | % | 20.01 | % | 10.41 | % | |||||||||
Health Care | 1.56 | % | 6.34 | % | 9.20 | % | |||||||||
Materials | 1.49 | % | 5.64 | % | 6.05 | % |
5 Lowest Contributors to Performance – Sectors
Fund Contribution | Fund Weighting (% of Net Assets) | Morgan Stanley Capital International World IndexSM Weighting | |||||||||||||
Energy | 0.00 | % | 0.00 | % | 8.95 | % | |||||||||
Utilities | 0.00 | % | 0.00 | % | 4.39 | % | |||||||||
Telecommunication Services | 0.41 | % | 3.27 | % | 4.49 | % | |||||||||
Industrials | 0.50 | % | 5.35 | % | 10.76 | % | |||||||||
Consumer Staples | 0.65 | % | 2.56 | % | 8.11 | % |
Janus International & Global Funds April 30, 2007 27
Janus Worldwide Fund (unaudited)
5 Largest Equity Holdings – (% of Net Assets)
As of April 30, 2007
Dell, Inc. Computers | 5.3 | % | |||||
British Sky Broadcasting Group PLC Television | 5.3 | % | |||||
Willis Group Holdings, Ltd. Insurance Brokers | 4.1 | % | |||||
Tyco International, Ltd. (U.S. Shares) Diversified Operations | 3.8 | % | |||||
Amazon.com, Inc. E-Commerce/Products | 3.7 | % | |||||
22.2 | % |
Asset Allocation – (% of Net Assets)
As of April 30, 2007
Emerging markets comprised 2.6% of total net assets.
Top Country Allocations – Long Positions (% of Investment Securities)
As of April 30, 2007 | As of October 31, 2006 | ||||||
![]() | ![]() | ||||||
28 Janus International & Global Funds April 30, 2007
(unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | Total Annual Fund Operating Expenses | ||||||||||||||||||||||
Janus Worldwide Fund | 15.34 | % | 20.90 | % | 7.00 | % | 6.99 | % | 11.66 | % | 0.87 | % | |||||||||||||||
Morgan Stanley Capital International World IndexSM | 11.87 | % | 16.98 | % | 12.17 | % | 8.00 | % | 9.08 | % | |||||||||||||||||
Lipper Quartile | – | 1 | st | 4 | th | 3 | rd | 2 | nd | ||||||||||||||||||
Lipper Ranking - based on total return for Global Funds | – | 25/399 | 225/234 | 66/96 | 5/15 |
Visit janus.com to view current performance
and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
The Fund has a performance-based management fee that adjusts upward or downward based on the Fund's performance relative to an approved benchmark index over a performance measurement period.
A 2% redemption fee may be imposed on shares held for 3 months or less. Effective with purchases on and after May 15, 2007, a 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
For the period from July 1, 2006 through January 31, 2007 (''Waiver Period''), Janus Capital contractually agreed to waive its right to receive a portion of the Fund's base management fee, at the annual rate of up to 0.15% of average daily net assets, under certain conditions. This waiver was applied for any calendar month in the Waiver Period if the total return performance of the Fund for the period from February 1, 2006 through the end of the preceding calendar month, calculated as though there had been no waiver of the base management fee, was less than performance of the Fund's primary benchmark index for that period.
The Fund's expense ratios were determined based on net average assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Fund may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
Foreign investing involves special risks such as currency fluctuations and political uncertainty.
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.
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.
May 16, 1991 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
Net dividends reinvested are the dividends that remain to be reinvested after foreign tax obligations have been met. Such obligations vary from country to country.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – May 15, 1991
Janus International & Global Funds April 30, 2007 29
Janus Worldwide Fund (unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,153.40 | $ | 4.48 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.63 | $ | 4.21 |
*Expenses are equal to the annualized expense ratio of 0.84%, 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.
30 Janus International & Global Funds April 30, 2007
Janus Worldwide Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Common Stock - 98.4% | |||||||||||
Advertising Services - 0.5% | |||||||||||
1,446,601 | WPP Group PLC | $ | 21,420,532 | ||||||||
Aerospace and Defense - 0.3% | |||||||||||
1,347,480 | BAE Systems PLC | 12,229,498 | |||||||||
Agricultural Chemicals - 3.1% | |||||||||||
405,650 | Potash Corporation of Saskatchewan, Inc. (U.S. Shares) | 72,822,288 | |||||||||
339,959 | Syngenta A.G. | 67,620,838 | |||||||||
140,443,126 | |||||||||||
Apparel Manufacturers - 0.8% | |||||||||||
2,529,700 | Burberry Group PLC | 34,718,935 | |||||||||
Applications Software - 0.9% | |||||||||||
8,317,886 | Misys PLC | 41,263,065 | |||||||||
Audio and Video Products - 1.1% | |||||||||||
964,900 | Sony Corp.# | 51,395,105 | |||||||||
Automotive - Cars and Light Trucks - 1.8% | |||||||||||
944,357 | BMW A.G.# | 58,495,144 | |||||||||
2,512,414 | Nissan Motor Company, Ltd. | 25,348,332 | |||||||||
83,843,476 | |||||||||||
Broadcast Services and Programming - 1.6% | |||||||||||
2,019,080 | Liberty Global, Inc. - Class A* | 72,464,781 | |||||||||
Building - Residential and Commercial - 5.2% | |||||||||||
1,567,910 | Centex Corp.# | 70,195,331 | |||||||||
1,497,340 | Lennar Corp.# | 63,951,391 | |||||||||
2,494,740 | Pulte Homes, Inc.# | 67,108,506 | |||||||||
808,740 | Ryland Group, Inc.# | 35,827,182 | |||||||||
237,082,410 | |||||||||||
Casino Hotels - 0.5% | |||||||||||
264,725 | Harrah's Entertainment, Inc. | 22,581,043 | |||||||||
Cellular Telecommunications - 1.5% | |||||||||||
23,916,753 | Vodafone Group PLC | 68,080,648 | |||||||||
Chemicals - Diversified - 1.4% | |||||||||||
964,800 | Shin-Etsu Chemical Company, Ltd. | 62,433,261 | |||||||||
Computers - 5.3% | |||||||||||
9,633,050 | Dell, Inc.*,# | 242,849,190 | |||||||||
Computers - Memory Devices - 0.5% | |||||||||||
1,548,790 | EMC Corp.*,# | 23,510,632 | |||||||||
Distribution/Wholesale - 4.3% | |||||||||||
13,503,200 | Esprit Holdings, Ltd. | 163,416,520 | |||||||||
10,848,400 | Li & Fung, Ltd. | 33,396,801 | |||||||||
196,813,321 | |||||||||||
Diversified Minerals - 0.9% | |||||||||||
1,059,490 | Companhia Vale do Rio Doce (ADR) | 43,025,889 | |||||||||
Diversified Operations - 3.8% | |||||||||||
5,279,650 | Tyco International, Ltd. (U.S. Shares) | 172,274,980 | |||||||||
E-Commerce/Products - 3.7% | |||||||||||
2,762,485 | Amazon.com, Inc.*,# | 169,423,205 | |||||||||
E-Commerce/Services - 5.5% | |||||||||||
2,457,070 | eBay, Inc.*,# | 83,392,956 | |||||||||
4,477,046 | Expedia, Inc.*,# | 105,747,826 | |||||||||
1,736,620 | IAC/InterActiveCorp*,# | 66,199,954 | |||||||||
255,340,736 | |||||||||||
Electronic Components - Miscellaneous - 2.3% | |||||||||||
2,595,868 | Koninklijke (Royal) Philips Electronics N.V.# | 106,158,890 |
Shares or Principal Amount | Value | ||||||||||
Electronic Components - Semiconductors - 2.5% | |||||||||||
11,320,499 | ARM Holdings PLC | $ | 30,132,355 | ||||||||
53,335 | Samsung Electronics Company, Ltd. | 32,659,452 | |||||||||
1,513,190 | Texas Instruments, Inc. | 52,008,340 | |||||||||
114,800,147 | |||||||||||
Energy - Alternate Sources - 0.2% | |||||||||||
292,220 | Suntech Power Holdings Company, Ltd. (ADR)*,# | 10,601,742 | |||||||||
Finance - Investment Bankers/Brokers - 6.1% | |||||||||||
1,136,100 | Citigroup, Inc. | 60,917,682 | |||||||||
2,687,008 | JP Morgan Chase & Co. | 139,993,116 | |||||||||
1,247,706 | UBS A.G.# | 80,866,286 | |||||||||
281,777,084 | |||||||||||
Finance - Mortgage Loan Banker - 1.4% | |||||||||||
364,175 | Fannie Mae# | 21,457,191 | |||||||||
1,030,565 | Housing Development Finance Corporation, Ltd. | 41,262,171 | |||||||||
62,719,362 | |||||||||||
Food - Retail - 0.5% | |||||||||||
312,901 | Metro A.G.# | 24,231,971 | |||||||||
Insurance Brokers - 4.1% | |||||||||||
4,523,860 | Willis Group Holdings, Ltd.# | 185,568,737 | |||||||||
Investment Companies - 0.2% | |||||||||||
361,001 | RHJ International* | 7,293,377 | |||||||||
Medical - Drugs - 2.2% | |||||||||||
593,495 | Merck & Company, Inc. | 30,529,383 | |||||||||
946,080 | Pfizer, Inc. | 25,033,277 | |||||||||
249,809 | Roche Holding A.G. | 47,123,996 | |||||||||
102,686,656 | |||||||||||
Medical - HMO - 2.1% | |||||||||||
434,815 | Aetna, Inc. | 20,384,127 | |||||||||
345,580 | Coventry Health Care, Inc.* | 19,984,891 | |||||||||
1,058,885 | UnitedHealth Group, Inc. | 56,184,439 | |||||||||
96,553,457 | |||||||||||
Multimedia - 0.9% | |||||||||||
1,237,460 | Walt Disney Co.# | 43,286,351 | |||||||||
Networking Products - 2.0% | |||||||||||
3,455,955 | Cisco Systems, Inc.* | 92,412,237 | |||||||||
Pharmacy Services - 2.8% | |||||||||||
1,645,290 | Medco Health Solutions, Inc.*,# | 128,365,526 | |||||||||
Property and Casualty Insurance - 2.4% | |||||||||||
2,976,800 | Millea Holdings, Inc. | 110,228,210 | |||||||||
Real Estate Management/Services - 1.0% | |||||||||||
1,442,000 | Mitsubishi Estate Company, Ltd. | 44,640,313 | |||||||||
Real Estate Operating/Development - 1.2% | |||||||||||
9,813,000 | CapitaLand, Ltd. | 54,131,644 | |||||||||
Reinsurance - 2.3% | |||||||||||
29,545 | Berkshire Hathaway, Inc. - Class B* | 107,189,260 | |||||||||
Retail - Apparel and Shoe - 1.8% | |||||||||||
1,307,810 | Industria de Diseno Textil S.A. | 80,168,836 | |||||||||
Retail - Consumer Electronics - 1.1% | |||||||||||
541,540 | Yamada Denki Company, Ltd. | 49,898,667 | |||||||||
Retail - Drug Store - 1.6% | |||||||||||
1,986,675 | CVS/Caremark Corp. | 71,997,102 |
See Notes to Schedules of Investments and Financial Statements.
Janus International & Global Funds April 30, 2007 31
Janus Worldwide Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Schools - 0.4% | |||||||||||
381,130 | Apollo Group, Inc. - Class A*,# | $ | 18,027,449 | ||||||||
Semiconductor Components/Integrated Circuits - 1.1% | |||||||||||
3,009,960 | Marvell Technology Group, Ltd.* | 48,550,655 | |||||||||
Semiconductor Equipment - 0.5% | |||||||||||
875,628 | ASML Holding N.V.* | 23,627,687 | |||||||||
Soap and Cleaning Preparations - 1.3% | |||||||||||
1,124,512 | Reckitt Benckiser PLC | 61,618,939 | |||||||||
Telecommunication Equipment - Fiber Optics - 0.5% | |||||||||||
1,006,825 | Corning, Inc.* | 23,881,889 | |||||||||
Telephone - Integrated - 1.6% | |||||||||||
3,737,380 | Sprint Nextel Corp.# | 74,859,721 | |||||||||
Television - 5.3% | |||||||||||
21,191,161 | British Sky Broadcasting Group PLC# | 242,681,803 | |||||||||
Transportation - Services - 1.0% | |||||||||||
634,890 | United Parcel Service, Inc. - Class B# | 44,715,303 | |||||||||
Web Portals/Internet Service Providers - 3.6% | |||||||||||
5,839,690 | Yahoo!, Inc.* | 163,744,908 | |||||||||
Wireless Equipment - 1.7% | |||||||||||
3,145,000 | Nokia Oyj# | 79,504,191 | |||||||||
Total Common Stock (cost $3,398,756,751) | 4,507,115,947 | ||||||||||
Money Markets - 1.6% | |||||||||||
4,829,002 | Janus Institutional Cash Management Fund - Institutional Shares, 5.32% | 4,829,002 | |||||||||
69,247,000 | Janus Institutional Money Market Fund - Institutional Shares, 5.26% | 69,247,000 | |||||||||
Total Money Markets (cost $74,076,002) | 74,076,002 | ||||||||||
Other Securities - 16.1% | |||||||||||
169,866,625 | Foreign Government Bonds† | 169,866,625 | |||||||||
550,133,160 | State Street Navigator Securities Lending Prime Portfolio† | 550,133,160 | |||||||||
16,326,105 | U. S. Treasury Notes/Bonds† | 16,326,105 | |||||||||
Total Other Securities (cost $736,325,890) | 736,325,890 | ||||||||||
Total Investments (total cost $4,209,158,643) – 116.1% | 5,317,517,839 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (16.1)% | (736,631,194 | ) | |||||||||
Net Assets – 100% | $ | 4,580,886,645 |
Summary of Investments by Country - (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Belgium | $ | 7,293,377 | 0.1 | % | |||||||
Bermuda | 603,207,693 | 11.3 | % | ||||||||
Brazil | 43,025,889 | 0.8 | % | ||||||||
Canada | 72,822,288 | 1.4 | % | ||||||||
Cayman Islands | 10,601,742 | 0.2 | % | ||||||||
Finland | 79,504,191 | 1.5 | % | ||||||||
Germany | 82,727,115 | 1.6 | % | ||||||||
India | 41,262,171 | 0.8 | % | ||||||||
Japan | 343,943,888 | 6.5 | % | ||||||||
Netherlands | 129,786,577 | 2.4 | % | ||||||||
Singapore | 54,131,644 | 1.0 | % | ||||||||
South Korea | 32,659,452 | 0.6 | % | ||||||||
Spain | 80,168,836 | 1.5 | % | ||||||||
Switzerland | 195,611,120 | 3.7 | % | ||||||||
United Kingdom | 512,145,775 | 9.6 | % | ||||||||
United States†† | 3,028,626,081 | 57.0 | % | ||||||||
Total | $ | 5,317,517,839 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (41.7% excluding Short-Term Securities and Other Securities).
See Notes to Schedules of Investments and Financial Statements.
32 Janus International & Global Funds April 30, 2007
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Janus International & Global Funds April 30, 2007 33
Statements of Assets and Liabilities
As of April 30, 2007 (unaudited) (all numbers in thousands except net asset value per share) | Janus Global Opportunities Fund | Janus Global Research Fund(1) | Janus Overseas Fund | Janus Worldwide Fund | |||||||||||||||
Assets: | |||||||||||||||||||
Investments at cost(2) | $ | 149,844 | $ | 160,710 | $ | 6,497,028 | $ | 4,209,159 | |||||||||||
Investments at value(2) | $ | 188,895 | $ | 185,978 | $ | 8,522,549 | $ | 5,317,518 | |||||||||||
Cash | 313 | 36 | – | 438 | |||||||||||||||
Cash denominated in foreign currency(3) | – | – | 12,309 | 4,274 | |||||||||||||||
Receivables: | |||||||||||||||||||
Investments sold | – | 5,606 | 5,858 | – | |||||||||||||||
Fund shares sold | 344 | 912 | 16,410 | 656 | |||||||||||||||
Dividends | 200 | 207 | 10,130 | 3,856 | |||||||||||||||
Interest | 9 | 17 | 440 | 453 | |||||||||||||||
Other assets | 1 | – | 192 | 58 | |||||||||||||||
Total Assets | 189,762 | 192,756 | 8,567,888 | 5,327,253 | |||||||||||||||
Liabilities: | |||||||||||||||||||
Payables: | |||||||||||||||||||
Collateral for securities loaned (Note 1) | 29,782 | 19,063 | 606,301 | 736,326 | |||||||||||||||
Due to custodian | – | – | 1,079 | – | |||||||||||||||
Investments purchased | – | 7,058 | 51,069 | – | |||||||||||||||
Fund shares repurchased | 204 | 89 | 8,804 | 6,437 | |||||||||||||||
Dividends and distributions | – | – | – | 1 | |||||||||||||||
Advisory fees | 81 | 94 | 4,063 | 2,227 | |||||||||||||||
Transfer agent fees and expenses | 57 | 40 | 1,351 | 1,061 | |||||||||||||||
Non-interested Trustees' fees and expenses | 3 | 4 | 60 | 29 | |||||||||||||||
Foreign tax liability | – | 45 | 6,505 | – | |||||||||||||||
Accrued expenses | 58 | 7 | 152 | 285 | |||||||||||||||
Total Liabilities | 30,185 | 26,400 | 679,384 | 746,366 | |||||||||||||||
Net Assets | $ | 159,577 | $ | 166,356 | $ | 7,888,504 | $ | 4,580,887 | |||||||||||
Net Assets Consist of: | |||||||||||||||||||
Capital (par value and paid-in-surplus)* | $ | 117,081 | $ | 136,922 | $ | 5,669,992 | $ | 8,636,973 | |||||||||||
Undistributed net investment income/(loss)* | 427 | 197 | (14,042 | ) | 7,028 | ||||||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | 3,020 | 4,021 | 213,590 | (5,171,512 | ) | ||||||||||||||
Unrealized appreciation/(depreciation) of investments and foreign currency translations | 39,049 | 25,216 | (4) | 2,018,964 | (4) | 1,108,398 | |||||||||||||
Total Net Assets | $ | 159,577 | $ | 166,356 | $ | 7,888,504 | $ | 4,580,887 | |||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 10,343 | 11,490 | 158,140 | 83,705 | |||||||||||||||
Net Asset Value Per Share | $ | 15.43 | $ | 14.48 | $ | 49.88 | $ | 54.73 |
*See Note 4 in the Notes to the Financial Statements.
(1) Formerly named Janus Research Fund.
(2) Investments at cost and value include $28,802,674, $18,317,832, $581,123,963 and $710,067,834 of securities loaned for Janus Global Opportunities Fund, Janus Global Research Fund, Janus Overseas Fund and Janus Worldwide Fund, respectively (Note 1).
(3) Includes cost of $12,308,619 and $4,274,957 for Janus Overseas and Janus Worldwide Fund, respectively.
(4) Net of foreign taxes on investments of $45,010 and $6,504,853 for Janus Global Research Fund and Janus Overseas Fund, respectively.
See Notes to Financial Statements.
34 Janus International & Global Funds April 30, 2007
Statements of Operations
For the six-month period ended April 30, 2007 (unaudited) (all numbers in thousands) | Janus Global Opportunities Fund | Janus Global Research Fund(1) | Janus Overseas Fund | Janus Worldwide Fund | |||||||||||||||
Investment Income: | |||||||||||||||||||
Interest | $ | – | $ | – | $ | 19 | $ | 20 | |||||||||||
Securities lending income | 13 | 22 | 842 | 175 | |||||||||||||||
Dividends | 1,208 | 917 | 42,415 | 29,623 | |||||||||||||||
Dividends from affiliates | 53 | 61 | 5,386 | 1,075 | |||||||||||||||
Foreign tax withheld | (43 | ) | (47 | ) | (3,137 | ) | (1,090 | ) | |||||||||||
Total Investment Income | 1,231 | 953 | 45,525 | 29,803 | |||||||||||||||
Expenses: | |||||||||||||||||||
Advisory fees | 479 | 462 | 21,271 | 13,365 | |||||||||||||||
Transfer agent fees and expenses | 212 | 162 | 6,757 | 4,951 | |||||||||||||||
Registration fees | 18 | 29 | 166 | 25 | |||||||||||||||
Postage and mailing expenses | 20 | 10 | 115 | 238 | |||||||||||||||
Custodian fees | 7 | 34 | 739 | 153 | |||||||||||||||
Professional fees | 15 | 16 | 22 | 22 | |||||||||||||||
Non-interested Trustees' fees and expenses | 4 | 7 | 154 | 79 | |||||||||||||||
Printing expenses | 40 | 24 | 172 | 319 | |||||||||||||||
Other expenses | 17 | 19 | 83 | 86 | |||||||||||||||
Non-recurring costs (Note 2) | – | – | – | 2 | |||||||||||||||
Cost assumed by Janus Capital Management LLC (Note 2) | – | – | – | (2 | ) | ||||||||||||||
Total Expenses | 812 | 763 | 29,479 | 19,238 | |||||||||||||||
Expense and Fee Offset | (8 | ) | (7 | ) | (155 | ) | (144 | ) | |||||||||||
Net Expenses | 804 | 756 | 29,324 | 19,094 | |||||||||||||||
Less: Excess Expense Reimbursement | – | – | – | (552 | ) | ||||||||||||||
Net Expenses after Expense Reimbursement | 804 | 756 | 29,324 | 18,542 | |||||||||||||||
Net Investment Income/(Loss) | 427 | 197 | 16,201 | 11,261 | |||||||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | |||||||||||||||||||
Net realized gain/(loss) from investment transactions and foreign currency transactions | 3,027 | 4,301 | 563,267 | 250,649 | |||||||||||||||
Change in net unrealized appreciation/(depreciation) of investments and foreign currency translations | 20,248 | 16,326 | (2) | 530,227 | (2) | 376,509 | |||||||||||||
Payment from affiliate (Note 2) | – | – | 5 | – | |||||||||||||||
Net Gain/(Loss) on Investments | 23,275 | 20,627 | 1,093,499 | 627,158 | |||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 23,702 | $ | 20,824 | $ | 1,109,700 | $ | 638,419 |
(1) Formerly named Janus Research Fund.
(2) Net of foreign taxes on investments of $45,010 and $6,504,853 for Janus Global Research Fund and Janus Overseas Fund, respectively.
See Notes to Financial Statements.
Janus International & Global Funds April 30, 2007 35
Statements of Changes in Net Assets
For the six-month period ended April 30, 2007 (unaudited) and for the fiscal year ended October 31, 2006 | Janus Global Opportunities Fund | Janus Global Research Fund(1) | |||||||||||||||||
(all numbers in thousands) | 2007 | 2006 | 2007 | 2006 | |||||||||||||||
Operations: | |||||||||||||||||||
Net investment income/(loss) | $ | 427 | $ | 914 | $ | 197 | $ | 379 | |||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 3,027 | 28,789 | 4,301 | 6,922 | |||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments and foreign currency translations | 20,248 | (12,044 | ) | 16,326 | 6,441 | ||||||||||||||
Payment from affiliate (Note 2) | – | – | – | – | |||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 23,702 | 17,659 | 20,824 | 13,742 | |||||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||
Net investment income* | (866 | ) | (1,352 | ) | (423 | ) | (194 | ) | |||||||||||
Net realized gain/(loss) from investment transactions* | (20,656 | ) | – | (6,758 | ) | (1,113 | ) | ||||||||||||
Net Decrease from Dividends and Distributions | (21,522 | ) | (1,352 | ) | (7,181 | ) | (1,307 | ) | |||||||||||
Capital Share Transactions: | |||||||||||||||||||
Shares sold | 12,857 | 15,085 | 50,698 | 82,642 | |||||||||||||||
Redemption fees | 6 | 13 | 7 | N/A | |||||||||||||||
Reinvested dividends and distributions | 21,181 | 1,330 | 7,069 | 1,280 | |||||||||||||||
Shares repurchased | (22,314 | ) | (64,628 | ) | (18,086 | ) | (30,736 | ) | |||||||||||
Net Increase/(Decrease) from Capital Share Transactions | 11,730 | (48,200 | ) | 39,688 | 53,186 | ||||||||||||||
Net Increase/(Decrease) in Net Assets | 13,910 | (31,893 | ) | 53,331 | 65,621 | ||||||||||||||
Net Assets: | |||||||||||||||||||
Beginning of period | 145,667 | 177,560 | 113,025 | 47,404 | |||||||||||||||
End of period | $ | 159,577 | $ | 145,667 | $ | 166,356 | $ | 113,025 | |||||||||||
Undistributed Net Investment Income/(Loss)* | $ | 427 | $ | 866 | $ | 197 | $ | 423 |
(1) Formerly named Janus Research Fund.
*See Note 4 in Notes to Financial Statements.
See Notes to Financial Statements.
36 Janus International & Global Funds April 30, 2007
For the six-month period ended April 30, 2007 (unaudited) and for the fiscal year ended October 31, 2006 | Janus Overseas Fund | Janus Worldwide Fund | |||||||||||||||||
(all numbers in thousands) | 2007 | 2006 | 2007 | 2006 | |||||||||||||||
Operations: | |||||||||||||||||||
Net investment income/(loss) | $ | 16,201 | $ | 66,286 | $ | 11,261 | $ | 60,132 | |||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 563,267 | 621,442 | 250,649 | 492,289 | |||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments and foreign currency translations | 530,227 | 774,600 | 376,509 | 191,800 | |||||||||||||||
Payment from affiliate (Note 2) | 5 | 48 | – | 13 | |||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 1,109,700 | 1,462,376 | 638,419 | 744,234 | |||||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||
Net investment income* | (73,786 | ) | (25,913 | ) | (56,930 | ) | (56,798 | ) | |||||||||||
Net realized gain/(loss) from investment transactions* | – | – | – | – | |||||||||||||||
Net Decrease from Dividends and Distributions | (73,786 | ) | (25,913 | ) | (56,930 | ) | (56,798 | ) | |||||||||||
Capital Share Transactions: | |||||||||||||||||||
Shares sold | 2,166,818 | 2,106,763 | 116,332 | 136,022 | |||||||||||||||
Redemption fees | 1,308 | 1,991 | 105 | 91 | |||||||||||||||
Reinvested dividends and distributions | 72,052 | 25,301 | 55,754 | 55,607 | |||||||||||||||
Shares repurchased | (704,710 | ) | (808,017 | ) | (546,151 | ) | (1,463,467 | ) | |||||||||||
Net Increase/(Decrease) from Capital Share Transactions | 1,535,468 | 1,326,038 | (373,960 | ) | (1,271,747 | ) | |||||||||||||
Net Increase/(Decrease) in Net Assets | 2,571,382 | 2,762,501 | 207,529 | (584,311 | ) | ||||||||||||||
Net Assets: | |||||||||||||||||||
Beginning of period | 5,317,122 | 2,554,621 | 4,373,358 | 4,957,669 | |||||||||||||||
End of period | $ | 7,888,504 | $ | 5,317,122 | $ | 4,580,887 | $ | 4,373,358 | |||||||||||
Undistributed Net Investment Income/(Loss)* | $ | (14,042 | ) | $ | 43,543 | $ | 7,028 | $ | 52,697 |
Janus International & Global Funds April 30, 2007 37
Financial Highlights
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) | Janus Global Opportunities Fund | ||||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 15.32 | $ | 13.91 | $ | 12.93 | $ | 11.66 | $ | 8.64 | $ | 9.68 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .04 | .10 | .10 | .03 | .03 | .03 | |||||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 2.38 | 1.42 | .91 | 1.27 | 3.02 | (1.04 | ) | ||||||||||||||||||||
Total from Investment Operations | 2.42 | 1.52 | 1.01 | 1.30 | 3.05 | (1.01 | ) | ||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.09 | ) | (.11 | ) | (.03 | ) | (.03 | ) | (.04 | ) | (.02 | ) | |||||||||||||||
Distributions (from capital gains)* | (2.22 | ) | – | – | – | – | (.01 | ) | |||||||||||||||||||
Redemption fees | – | (1) | – | (1) | – | (1) | – | (1) | .01 | N/A | |||||||||||||||||
Payment from affiliate | – | – | – | (2) | – | – | – | ||||||||||||||||||||
Total Distributions and Other | (2.31 | ) | (.11 | ) | (.03 | ) | (.03 | ) | (.03 | ) | (.03 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 15.43 | $ | 15.32 | $ | 13.91 | $ | 12.93 | $ | 11.66 | $ | 8.64 | |||||||||||||||
Total Return** | 17.08 | % | 10.96 | % | 7.78 | %(3) | 11.18 | % | 35.51 | % | (10.59 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 159,577 | $ | 145,667 | $ | 177,560 | $ | 207,414 | $ | 143,659 | $ | 148,890 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 150,987 | $ | 161,256 | $ | 218,871 | $ | 175,110 | $ | 132,935 | $ | 155,411 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4) | 1.09 | %(5) | 1.17 | %(6) | 1.03 | %(5) | 1.09 | %(5) | 1.17 | % | 1.19 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 1.07 | % | 1.15 | % | 1.02 | % | 1.09 | % | 1.16 | % | 1.16 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.57 | % | 0.57 | % | 0.62 | % | 0.24 | % | 0.27 | % | 0.40 | % | |||||||||||||||
Portfolio Turnover Rates*** | 0 | % | 38 | % | 36 | % | 37 | % | 31 | % | 84 | % |
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) | Janus Global Research Fund(7) | ||||||||||||||
and through each fiscal year or period ended October 31 | 2007 | 2006 | 2005(8) | ||||||||||||
Net Asset Value, Beginning of Period | $ | 13.16 | $ | 11.11 | $ | 10.00 | |||||||||
Income from Investment Operations: | |||||||||||||||
Net investment income/(loss) | .02 | .10 | (.01 | ) | |||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 2.11 | 2.22 | 1.12 | ||||||||||||
Total from Investment Operations | 2.13 | 2.32 | 1.11 | ||||||||||||
Less Distributions and Other: | |||||||||||||||
Dividends (from net investment income)* | (.05 | ) | (.04 | ) | – | ||||||||||
Distributions (from capital gains)* | (.76 | ) | (.23 | ) | – | ||||||||||
Redemption fees | – | (1) | N/A | N/A | |||||||||||
Payment from affiliate | – | – | – | (2) | |||||||||||
Total Distributions and Other | (.81 | ) | (.27 | ) | – | ||||||||||
Net Asset Value, End of Period | $ | 14.48 | $ | 13.16 | $ | 11.11 | |||||||||
Total Return** | 16.87 | % | 21.21 | % | 11.10 | %(3) | |||||||||
Net Assets, End of Period (in thousands) | $ | 166,356 | $ | 113,025 | $ | 47,404 | |||||||||
Average Net Assets for the Period (in thousands) | $ | 133,365 | $ | 79,500 | $ | 29,920 | |||||||||
Ratio of Gross Expenses to Average Net Assets***(4) | 1.15 | % | 1.16 | % | 1.27 | %(9) | |||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 1.14 | % | 1.14 | % | 1.25 | % | |||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.30 | % | 0.48 | % | (0.24 | )% | |||||||||
Portfolio Turnover Rates*** | 78 | % | 118 | % | 86 | % |
* See Note 4 in Notes to Financial Statements.
** Total return not annualized for periods of less than one full year.
*** Annualized for periods of less than one full year.
(1) Redemption fees aggregated less than $.01 on a per share basis for the fiscal year or period ended.
(2) Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year or period ended.
(3) During the fiscal year or period ended, Janus Capital and/or Janus Services LLC ("Janus Services") fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%.
(4) See "Explanations of Charts, Tables and Financial Statements."
(5) The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01%.
(6) The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and increased the ratio by 0.02%.
(7) Formerly named Janus Research Fund.
(8) Period from February 25, 2005 (inception date) through October 31, 2005.
(9) The ratio was 1.61% in 2005 before waiver of certain fees incurred by the Fund.
See Notes to Financial Statements.
38 Janus International & Global Funds April 30, 2007
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) | Janus Overseas Fund | ||||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 42.45 | $ | 28.42 | $ | 21.62 | $ | 19.50 | $ | 15.44 | $ | 18.44 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .12 | .49 | .21 | .18 | .24 | .15 | |||||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 7.85 | 13.80 | 6.82 | 2.18 | 3.98 | (3.05 | ) | ||||||||||||||||||||
Total from Investment Operations | 7.97 | 14.29 | 7.03 | 2.36 | 4.22 | (2.90 | ) | ||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.55 | ) | (.28 | ) | (.23 | ) | (.24 | ) | (.16 | ) | (.10 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | |||||||||||||||||||||
Redemption fees | .01 | .02 | – | (1) | – | (1) | – | (1) | N/A | ||||||||||||||||||
Payment from affiliate | – | (2) | – | (2) | – | (2) | – | (2) | – | – | |||||||||||||||||
Total Distributions and Other | (.54 | ) | (.26 | ) | (.23 | ) | (.24 | ) | (.16 | ) | (.10 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 49.88 | $ | 42.45 | $ | 28.42 | $ | 21.62 | $ | 19.50 | $ | 15.44 | |||||||||||||||
Total Return** | 18.92 | %(3) | 50.71 | %(3) | 32.74 | %(3) | 12.24 | %(3) | 27.62 | % | (15.78 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 7,888,504 | $ | 5,317,122 | $ | 2,554,621 | $ | 2,090,180 | $ | 2,811,437 | $ | 3,242,597 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 6,716,654 | $ | 3,933,175 | $ | 2,272,200 | $ | 2,496,896 | $ | 2,897,732 | $ | 4,445,864 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 0.89 | % | 0.92 | % | 0.90 | % | 0.93 | % | 0.94 | % | 0.91 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 0.88 | % | 0.91 | % | 0.89 | % | 0.93 | % | 0.94 | % | 0.89 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.49 | % | 1.69 | % | 0.88 | % | 0.72 | % | 1.21 | % | 0.69 | % | |||||||||||||||
Portfolio Turnover Rates*** | 54 | % | 61 | % | 57 | % | 58 | % | 104 | % | 63 | % | |||||||||||||||
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) | Janus Worldwide Fund | ||||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 48.05 | $ | 41.41 | $ | 38.12 | $ | 37.34 | $ | 32.87 | $ | 40.17 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .15 | .65 | .46 | .30 | .37 | .27 | |||||||||||||||||||||
Net gains/(losses) on securities (both realized and unrealized) | 7.17 | 6.48 | 3.14 | .84 | 4.41 | (7.56 | ) | ||||||||||||||||||||
Total from Investment Operations | 7.32 | 7.13 | 3.60 | 1.14 | 4.78 | (7.29 | ) | ||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.64 | ) | (.49 | ) | (.31 | ) | (.36 | ) | (.31 | ) | (.01 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | |||||||||||||||||||||
Redemption fees | – | (1) | – | (1) | – | (1) | – | (1) | – | (1) | N/A | ||||||||||||||||
Payment from affiliate | – | – | (2) | – | (2) | – | (2) | �� | – | – | |||||||||||||||||
Total Distributions and Other | (.64 | ) | (.49 | ) | (.31 | ) | (.36 | ) | (.31 | ) | (.01 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 54.73 | $ | 48.05 | $ | 41.41 | $ | 38.12 | $ | 37.34 | $ | 32.87 | |||||||||||||||
Total Return** | 15.34 | % | 17.34 | %(3) | 9.47 | %(3) | 3.06 | %(3) | 14.65 | % | (18.15 | )% | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 4,580,887 | $ | 4,373,358 | $ | 4,957,669 | $ | 7,074,321 | $ | 11,340,655 | $ | 13,465,168 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 4,484,536 | $ | 4,601,953 | $ | 5,984,293 | $ | 9,278,240 | $ | 12,123,565 | $ | 18,185,263 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 0.84 | %(6) | 0.87 | %(6) | 0.85 | % | 0.92 | % | 0.93 | % | 0.87 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 0.83 | % | 0.86 | % | 0.85 | % | 0.92 | % | 0.92 | % | 0.86 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 0.51 | % | 1.31 | % | 0.90 | % | 0.61 | % | 0.99 | % | 0.62 | % | |||||||||||||||
Portfolio Turnover Rates*** | 27 | % | 43 | % | 33 | % | 120 | % | 108 | % | 73 | % |
* See Note 4 in Notes to Financial Statements.
** Total return not annualized for periods of less than one full year.
*** Annualized for periods of less than one full year.
(1) Redemption fees aggregated less than $.01 on a per share basis for the fiscal year or period ended.
(2) Payment from affiliate aggregated less than $.01 on a per share basis for the fiscal year or period ended.
(3) During the fiscal year or period ended, Janus Capital and/or Janus Services LLC ("Janus Services") fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%.
(4) See "Explanations of Charts, Tables and Financial Statements."
(5) The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2007, 2006, 2005 and 2004.
(6) The ratio was 0.87% in 2007 and 0.90% in 2006 before waiver of certain fees incurred by the Fund.
See Notes to Financial Statements.
Janus International & Global Funds April 30, 2007 39
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. | ||||||
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. | ||||||
Morgan Stanley Capital International All Country World ex-U.S. IndexSM | Is an unmanaged, free float-adjusted, market capitalization weighted index composed of stocks of companies located in countries throughout the world, excluding the United States. It is designed to measure equity market performance in global developed and emerging markets outside the United States. The index includes reinvestment of dividends, net of foreign withholding taxes. | ||||||
Morgan Stanley Capital International EAFE® Index | Is a free float-adjusted market capitalization weighted index designed to measure developed market equity performance. The MSCI EAFE® Index is composed of companies representative of the market structure of developed market countries. The index includes reinvestment of dividends, net of foreign withholding taxes. | ||||||
Morgan Stanley Capital International 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 and contains constituents of the MSCI EAFE® Index, which are categorized as growth securities. The index includes reinvestment of dividends, net of foreign withholding taxes. | ||||||
Morgan Stanley Capital International World IndexSM | Is a market capitalization weighted index composed of companies representative of the market structure of developed market countries in North America, Europe, and the Asia/Pacific Region. The index includes reinvestment of dividends, net of foreign withholding taxes. | ||||||
Morgan Stanley Capital International World Growth Index | Measures the performance of growth stocks in developed countries throughout the world. The index includes reinvestment of dividends, net of foreign withholding taxes. | ||||||
Russell 1000® Index | Measures the performance of the 1,000 largest companies in the Russell 3000® Index. | ||||||
144A | Securities sold under Rule 144A of the Securities Act of 1933 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, 2007.
† The security is purchased with the cash collateral received from Securities on Loan (Note 1).
40 Janus International & Global Funds April 30, 2007
ºº Schedule of Fair Valued Securities (as of April 30, 2007)
Value | Value as a % of Net Assets | ||||||||||
Janus Overseas Fund | |||||||||||
Eurodekania, Ltd. | $ | 18,477,927 | 0.2 | % | |||||||
Star Asia Financial, Ltd. (144A) | 4,737,400 | 0.1 | % | ||||||||
TI Automotive, Ltd. | – | 0.0 | % | ||||||||
$ | 23,215,327 | 0.3 | % |
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 (as of April 30, 2007)
Acquisition Date | Acquisition Cost | Value | Value as a % of Net Assets | ||||||||||||||||
Janus Overseas Fund | |||||||||||||||||||
Eurodekania, Ltd.ºº | 3/8/07 | $ | 17,754,225 | $ | 18,477,927 | 0.2 | % | ||||||||||||
Polytec Asset Holdings, Ltd. | 5/5/06 | 22,750,354 | 27,040,613 | 0.3 | % | ||||||||||||||
Star Asia Financial, Ltd. (144A)ºº | 2/22/07 | 4,737,400 | 4,737,400 | 0.1 | % | ||||||||||||||
$ | 45,241,979 | $ | 50,255,940 | 0.6 | % |
The Fund has registration rights for certain restricted securities held as of April 30, 2007. 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 six-month period ended April 30, 2007.
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/07 | |||||||||||||||||||||||||
Janus Overseas Fund | |||||||||||||||||||||||||||||||
Actions Semiconductor Company, Ltd. (ADR) | 1,680,624 | $ | 13,922,491 | – | $ | – | $ | – | $ | – | $ | 41,754,264 | |||||||||||||||||||
Balrampur Chini Mills, Ltd. | – | – | – | – | – | 448,351 | 19,771,202 | ||||||||||||||||||||||||
BrasilAgro - Companhia Brasileira de Propriedades Agricolas | – | – | – | – | – | – | 22,000,689 | ||||||||||||||||||||||||
Chaoda Modern Agriculture Holdings, Ltd. | 8,460,000 | 5,120,189 | – | – | – | 1,790,212 | 107,870,304 | ||||||||||||||||||||||||
China Water Affairs Group, Ltd. | 63,334,512 | 22,244,107 | – | – | – | – | 33,758,526 | ||||||||||||||||||||||||
Cosan S.A. Industria e Comercio | – | – | – | – | – | – | 97,190,770 | ||||||||||||||||||||||||
Eurodekania, Ltd. | 4,062,132 | 53,448,017 | – | – | – | – | 18,477,927 | ||||||||||||||||||||||||
IG Group Holdings PLC | 234,516 | 1,299,230 | – | – | – | 693,742 | 108,807,372 | ||||||||||||||||||||||||
NDS Group PLC (ADR) | 965,304 | 46,052,833 | – | – | – | – | 49,780,727 | ||||||||||||||||||||||||
Polytec Asset Holdings, Ltd. | – | – | – | – | – | 56,436 | 27,040,613 | ||||||||||||||||||||||||
Sao Carlos Empreendimentos e Participacoes S.A. | 2,651,200 | 24,009,139 | – | – | – | – | 21,015,371 | ||||||||||||||||||||||||
Silicon-On-Insulator Technologies (SOITEC) | 3,023,796 | 98,279,399 | – | – | – | – | 107,397,034 | ||||||||||||||||||||||||
SunPower Corp. - Class A | 1,034,765 | 39,112,408 | – | – | – | – | 62,789,540 | ||||||||||||||||||||||||
Vimicro International Corp. (ADR) | 1,500,600 | 15,562,001 | – | – | – | – | 10,433,814 | ||||||||||||||||||||||||
$ | 319,049,814 | $ | – | $ | – | $ | 2,988,741 | $ | 728,088,153 |
Janus International & Global Funds April 30, 2007 41
Notes to Financial Statements (unaudited)
The following section describes the organization and significant accounting policies and provides more detailed information about the schedules and tables that appear throughout this report. In addition, the Notes to Financial Statements explain the methods used in preparing and presenting this report.
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Janus Global Opportunities Fund, Janus Global Research Fund (formerly named Janus Research Fund), Janus Overseas Fund and Janus Worldwide Fund (collectively the "Funds" and individually a "Fund") are series funds. The Funds are part of Janus Investment Fund (the "Trust"), which 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 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. 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 or such other collateral permitted by the Securities and Exchange Commission ("SEC"). Cash collateral may be invested in affiliated money market funds or other accounts advised by Janus Capital to the extent consistent with exemptive relief obtained from the SEC or as permitted by the 1940 Act and rules promulgated thereunder. Cash collateral may also be invested in unaffiliated money market funds or other accounts advised by Janus Capital to the extent consistent with exemptive relief obtained from the SEC or as permitted by the 1940 Act and rules promulgated thereunder. Cash collateral may also be invested in unaffi liated 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
42 Janus International & Global Funds April 30, 2007
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, 2007, the following Funds had on loan securities valued as indicated:
Fund | Value at April 30, 2007 | ||||||
Janus Global Opportunities Fund | $ | 28,802,674 | |||||
Janus Global Research Fund(1) | 18,317,832 | ||||||
Janus Overseas Fund | 581,123,963 | ||||||
Janus Worldwide Fund | 710,067,834 |
(1) Formerly named Janus Research Fund.
As of April 30, 2007, the following Funds received cash collateral for securities lending activity as indicated:
Fund | Cash Collateral at April 30, 2007 | ||||||
Janus Global Opportunities Fund | $ | 29,782,148 | |||||
Janus Global Research Fund(1) | 19,062,766 | ||||||
Janus Overseas Fund | 606,300,502 | ||||||
Janus Worldwide Fund | 736,325,890 |
(1) Formerly named Janus Research Fund.
As of April 30, 2007, all cash collateral received was invested in the State Street Navigator Securities Lending Prime Portfolio except Janus Global Opportunities Fund, Janus Global Research Fund, Janus Overseas Fund and Janus Worldwide Fund which invested $2,377,058, $4,705,491, $7,723,424 and $169,866,625, respectively, of the cash collateral in Foreign Government Bonds. Additionally, Janus Global Opportunities Fund, Janus Global Research Fund and Janus Worldwide Fund invested $3,407,849, $16,177 and $16,326,105, respectively, of the cash collateral in U.S. Treasury Notes/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 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).
Interfund Lending
Pursuant to an exemptive order received from the SEC, each Fund may be party to an interfund lending agreement between the Fund and other Janus Capital sponsored mutual funds, which permits 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, 2007, there were no outstanding interfund borrowing or lending arrangements for the Funds.
Short Sales
The Funds may engage in "short sales against the box." Short sales against the box involve selling either a security that the Fund owns, or a security equivalent in kind and amount to the security sold short that the Fund has the right to obtain, for delivery at a specified date in the future. The Fund may enter into a short sale against the box to hedge against anticipated declines in the market price of portfolio securities. If the value of the securities sold short increases prior to the scheduled delivery date, the Fund loses the opportunity to participate in the gain.
The Funds may also engage in "naked" (uncovered) 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, the Fund must borrow the security to deliver it to the purchaser and buy that same security in the market to return it to the lender. Although the potential for gain is limited to the difference between the price at which the Fund sold the security short and the cost of borrowing the security, its potential for loss is theoretically unlimited because there is no limit to the cost of replacing the borrowed security. There is no assurance that the Fund will be able to close out a short position at a particular time or at an acceptable price. A gain or a loss will be recognized upon termination of a short sale. There is no limit on the size of any loss that a Fund may recognize upon termination of a short sale. Short sales held by the Fund are fully co llateralized by other securities, which are denoted in the accompanying Schedule of Investments (if applicable). As of April 30, 2007, the Funds were not invested in short sales.
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).
Janus International & Global Funds April 30, 2007 43
Notes to Financial Statements (unaudited) (continued)
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.
As of April 30, 2007, the Funds were not invested in forward currency transactions.
Futures Contracts
The Funds may enter into futures contracts. The Funds intend to use such derivative instruments to hedge or protect from adverse movements in securities prices, currency rates or interest rates. The use of futures contracts may involve risks such as the possibility of illiquid markets or imperfect correlation between the 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 a receivable or payable on the Statement of Assets and Liabilities (if applicable). When a contract is closed, a realized gain or loss is recorded 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.
As of April 30, 2007, the Funds were not invested in futures 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 currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and market risk. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
When-issued Securities
The Funds may purchase or sell securities on a when-issued or forward commitment basis. The price of the underlying securities and date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Losses may arise due to changes in the market value of the securities or from the inability of counterparties to meet the terms of the contract. In connection with such purchases, the Fund may hold liquid assets as collateral with the Fund's custodian sufficient to cover the purchase price. As of April 30, 2007, 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 derivative securities which are specially designed to combine the characteristics of one or more underlying securities and their equity derivatives in a single note form. The return and/or yield or income component may be based on the performance of the underlying equity securities, an equity index, and/or option positions. Equity-linked structured notes are typically offered in limited transactions by financial institutions in either registered or nonregistered form. An investment in equity-linked structured notes creates exposure to the credit risk of the issuing financial institution, as well as to the market risk of the underlying securities. There is no guaranteed return of principal with these securities and the appreciation potential of these securities may be limited by a maximum payment or call right. In certain cases, equity-linked structured notes may be more volatile and less liquid than less complex securities or other types of fixed-income securities. Such securities may exhibit price behavior that does not correlate with other fixed-income securities. As of April 30, 2007, the Funds were not invested in equity-linked structured notes.
Initial Public Offerings
The Funds may invest in initial public offerings ("IPOs"). IPOs and other investment techniques may have a magnified performance impact on a fund with a small asset base. A Fund may not experience similar performance as its assets grow.
Restricted Security Transactions
Restricted securities held by 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.
44 Janus International & Global Funds April 30, 2007
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.
New Accounting Pronouncements
In July 2006, the Financial Accounting Standards Board ("FASB") issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109" (the "Interpretation"). The Interpretation establishes for all entities, including pass-through entities such as the Funds, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. A calendar year open-end or closed-end fund would implement the interpretation no later than June 29, 2007 (the last business day of the semi-annual reporting period) and will also apply to all open tax years as of the date of effectiveness. Management has recently begun to evaluate the application of the Interpretation to the Funds, and is not in a position at this time to estimate the significance of its impact, if any, on the Funds' financial statements.
In September 2006, the SEC issued Staff Accounting Bulletin ("SAB") No. 108 "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements" (SAB 108). SAB 108 requires that public companies utilize a "dual approach" to assessing the quantitative effects of financial misstatements. This dual approach includes both an income statement focused assessment and a balance sheet focused assessment. The guidance in SAB 108 must be applied to annual financial statements for fiscal years ending after November 15, 2006. Management is currently assessing the impact of adopting SAB 108 on each Fund's financial position or results of operations.
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).
For Janus Global Research Fund and Janus Worldwide Fund, the investment advisory fee is determined by calculating a base fee and applying a performance adjustment. The base fee rate is the same as the investment advisory fee rate shown in the previous paragraph. The performance adjustment either increases or decreases the base fee depending on how well each Fund has performed relative to its benchmark, as shown below:
Fund | Benchmark Index | ||||||
Janus Global Research Fund(1) | MSCI World Growth Index(2) | ||||||
Janus Worldwide Fund | MSCI World IndexSM |
(1) Formerly named Janus Research Fund.
(2) Effective January 1, 2007, Janus Global Research Fund's benchmark changed from the Russell 1000® Index to the MSCI World Growth Index for purposes of measuring the Fund's performance and calculating the performance adjustment.
Only the base fee rate applied until January 2007 for Janus Global Research Fund and February 2007 for Janus Worldwide Fund, at which time the calculation of the performance adjustment is applied as follows:
(Investment Advisory Fee = Base Fee +/- Performance Adjustment).
The investment advisory fee paid to Janus Capital by Janus Global Research Fund and Janus Worldwide Fund consists of two components: (i) a base fee calculated by applying the contractual fixed-rate of the advisory fee to the Fund's average daily net assets during the previous month ("Base Fee"), plus or minus (ii) a performance-fee adjustment ("Performance Adjustment") calculated by applying a variable rate of up to 0.15% (positive or negative) to the Fund's average daily net assets during the applicable performance measurement period.
The performance measurement period generally is the previous 36 months, although no Performance Adjustment will be made until the Fund's performance-based fee structure has been in effect for at least 12 months. When the Fund's performance-based fee structure has been in effect for at least 12 months, but less than 36 months, the performance measurement period will be equal to the time that has elapsed since the performance-based fee structure took effect. As noted above, any Performance Adjustment began January 2007 for Global Research Fund and February 2007 for Janus Worldwide Fund. No Performance Adjustment will be applied unless the difference between the Fund's investment performance and the investment record of the Fund's benchmark indices are 0.50% or greater (positive or negative) during the applicable performance measurement period. For Janus Global Research Fund, the Performance Adjustment is made in even increments for every 0.50% difference in the investment performance of the Fund compared to the cumulative investment record of the Russell 1000® Index (for periods prior to January 1, 2007) and the MSCI World Growth Index (for periods commencing January 1, 2007). The aggregate of the Fund's performance
Janus International & Global Funds April 30, 2007 45
Notes to Financial Statements (unaudited) (continued)
versus these two benchmark indices, respectively, are used for purposes of calculating the Performance Adjustment. Because the Performance Adjustment is tied to the Fund's relative performance to its benchmark index (and not its absolute performance), the Performance Adjustment could increase Janus Capital's fee even if the Fund's shares lose value during the performance measurement period and could decrease Janus Capital's fee even if the Fund's shares increase in value during the performance measurement period. For purposes of computing the Base Fee and the Performance Adjustment, net assets will be averaged over different periods (average daily net assets during the previous month for the Base Fee, versus average daily net assets during the performance measurement period for the Performance Adjustment). Performance of a Fund is calculated net of expenses whereas a Fund's benchmark index does not have any expenses. Reinvestment of dividend s and distributions are included in calculating both the performance of a Fund and the Fund's benchmark index. The Base Fee is calculated and accrued daily. The Performance Adjustment is calculated monthly in arrears and is accrued evenly each day throughout the month. The investment fee is paid monthly in arrears.
The Funds' prospectus and statement of additional information contains additional information about performance-based fees. The amount shown as Advisory fees on the Statement of Operations reflects the base fee plus/minus any performance adjustment.
Effective for the period from July 1, 2006 through January 31, 2007 ("Waiver Period") for Janus Worldwide Fund, Janus Capital contractually agreed to waive its right to receive a portion of the Fund's advisory fee, at the annual rate of up to 0.15% of average daily net assets, under certain conditions. This waiver applied for any calendar month in the Waiver Period if the Fund's performance for the period from February 1, 2006 through the end of the preceding calendar month, calculated as though there had been no waiver of the advisory fee, was less than benchmark performance for that period.
Until at least March 1, 2008, provided that Janus Capital remains investment adviser to the Funds, Janus Capital has agreed to reimburse Janus Global Research Fund by the amount, if any, that 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 rate of 1.25%. If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as Excess Expense Reimbursement on the Statement of Operations.
The Funds' expenses may be reduced by expense offsets from an unaffiliated custodian and/or transfer agent. Such 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.
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. Effective with purchases on and after May 15, 2007, a 2% redemption fee may be imposed on shares held for 90 days or less. This fee is paid to the Funds rather than Janus Capital, and is designed to deter excessive short-term trading and to offset the brokerage commissions, market impact, and other costs associated with changes in the Funds' asset levels and cash flow due to short-term money movements in and out of the Funds. The redemption fee is accounted for as an addition to Paid-in Capital. Total redemption fees received by Janus Global Opportunities Fund, Janus Global Research Fund, Janus Overseas Fund and Janus Worldwide Fund were $5,972, $7,123, $1,307,897 and $104,704, respectively, for the six-month period ended April 30, 2007.
For the six-month period ended April 30, 2007, Janus Capital assumed $18,145 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 as of July 31, 2004. No fees were allocated to Janus Global 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 on July 31, 2004. These non-recurring costs and costs assumed by Janus Capital are shown on the Statement of Operations.
During the fiscal year ended October 31, 2006, Janus Capital assumed tax expenses incurred by Janus Global Opportunities Fund, Janus Overseas Fund and Janus Worldwide Fund in the amount of $23,452, $109,415 and $584,700, respectively, payable to the Internal Revenue Service arising from the overstatements of the foreign taxes paid and the resulting overstatement of reportable foreign tax credits during the 2003 and/or 2004 taxable years. In addition, Janus Capital assumed $68,838 of the interest owed to the Internal Revenue Service.
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. Total compensation of $59,081 was paid by the Trust during the six-month period ended April 30, 2007. The Funds' portion is reported as part of "Other Expenses" on the Statement of Operations.
Effective January 1, 2006, the Board of Trustees adopted a deferred compensation plan (the "Plan") for independent
46 Janus International & Global Funds April 30, 2007
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 with the Plan. No deferred fees were paid to any Trustee under the Plan during the six-month period ended April 30, 2007.
During the six-month period ended April 30, 2007, Janus Services reimbursed the following Fund as a result of dilutions caused by incorrectly processed shareholder activity as indicated in the table below.
Fund | |||||||
Janus Overseas Fund | $ | 4,648 |
During the fiscal year ended October 31, 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 | $ | 19,335 | |||||
Janus Worldwide Fund | 12,653 |
During the fiscal year ended October 31, 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.
Fund | |||||||
Janus Overseas Fund | $ | 28,474 |
The Funds may invest in money market funds, including funds managed by Janus Capital. During the six-month period ended April 30, 2007, 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 4/30/07 | ||||||||||||||||
Janus Institutional Cash Management Fund - Institutional Shares | |||||||||||||||||||
Janus Global Opportunities Fund | $ | 3,884,430 | $ | 3,870,680 | $ | 9,899 | $ | 13,750 | |||||||||||
Janus Global Research Fund(1) | 5,016,982 | 2,984,224 | 7,371 | 2,032,758 | |||||||||||||||
Janus Overseas Fund | 67,296,627 | 67,296,627 | 86,073 | – | |||||||||||||||
Janus Worldwide Fund | 31,349,238 | 26,520,236 | 116,569 | 4,829,002 | |||||||||||||||
$ | 107,547,277 | $ | 100,671,767 | $ | 219,912 | $ | 6,875,510 | ||||||||||||
Janus Institutional Cash Reserves Fund | |||||||||||||||||||
Janus Global Opportunities Fund | $ | 7,017,040 | $ | 7,017,040 | $ | 13,169 | $ | – | |||||||||||
Janus Global Research Fund(1) | 6,933,984 | 7,231,984 | 16,419 | – | |||||||||||||||
Janus Overseas Fund | 116,144,531 | 125,951,531 | 294,918 | – | |||||||||||||||
Janus Worldwide Fund | 62,663,586 | 79,209,586 | 125,554 | – | |||||||||||||||
$ | 192,759,141 | $ | 219,410,141 | $ | 450,060 | $ | – | ||||||||||||
Janus Institutional Money Market Fund - Institutional Shares | |||||||||||||||||||
Janus Global Opportunities Fund | $ | 4,073,250 | $ | 588,000 | $ | 3,992 | $ | 3,485,250 | |||||||||||
Janus Global Research Fund(1) | 13,512,522 | 12,057,180 | 10,991 | 1,455,342 | |||||||||||||||
Janus Overseas Fund | 446,558,956 | 377,333,956 | 481,810 | 69,225,000 | |||||||||||||||
Janus Worldwide Fund | 188,551,764 | 119,304,764 | 400,616 | 69,247,000 | |||||||||||||||
$ | 652,696,492 | $ | 509,283,900 | $ | 897,409 | $ | 143,412,592 | ||||||||||||
Janus Money Market Fund - Institutional Shares | |||||||||||||||||||
Janus Global Opportunities Fund | $ | 5,219,190 | $ | 5,219,190 | $ | 25,950 | $ | – | |||||||||||
Janus Global Research Fund(1) | 16,897,644 | 17,055,583 | 26,529 | – | |||||||||||||||
Janus Overseas Fund | 657,139,654 | 702,351,823 | 1,534,267 | – | |||||||||||||||
Janus Worldwide Fund | 303,353,019 | 303,353,019 | 432,501 | – | |||||||||||||||
$ | 982,609,507 | $ | 1,027,979,615 | $ | 2,019,247 | $ | – |
(1) Formerly named Janus Research Fund.
Janus International & Global Funds April 30, 2007 47
Notes to Financial Statements (unaudited) (continued)
3. PURCHASES AND SALES OF INVESTMENT SECURITIES
For the six-month period ended April 30, 2007, 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 | $ | – | $ | 7,727,116 | $ | – | $ | – | |||||||||||
Janus Global Research Fund(1) | 82,017,071 | 50,997,647 | – | – | |||||||||||||||
Janus Overseas Fund | 3,240,068,635 | 1,766,520,382 | – | – | |||||||||||||||
Janus Worldwide Fund | 590,564,033 | 1,068,755,337 | – | – |
(1) Formerly named Janus Research Fund.
4. FEDERAL INCOME TAX
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, 2007 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 | $ | 149,851,154 | $ | 44,763,068 | $ | (5,719,226 | ) | $ | 39,043,842 | ||||||||||
Janus Global Research Fund(1) | 161,355,269 | 26,768,655 | (2,146,324 | ) | 24,622,331 | ||||||||||||||
Janus Overseas Fund | 6,530,167,312 | 2,166,595,916 | (174,213,892 | ) | 1,992,382,024 | ||||||||||||||
Janus Worldwide Fund | 4,241,943,321 | 1,164,999,659 | (89,425,141 | ) | 1,075,574,518 |
(1) Formerly named Janus Research Fund.
Accumulated capital losses noted below represent net capital loss carryovers, as of October 31, 2006, 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, 2006
Fund | October 31, 2009 | October 31, 2010 | October 31, 2011 | Accumulated Capital Losses | |||||||||||||||
Janus Global Opportunities Fund | $ | – | $ | – | $ | – | $ | – | |||||||||||
Janus Global Research Fund(1) | – | – | – | – | |||||||||||||||
Janus Overseas Fund(2) | – | (280,741,800 | ) | (60,722,110 | ) | (341,463,910 | ) | ||||||||||||
Janus Worldwide Fund | (1,533,032,325 | ) | (3,186,843,718 | ) | (670,957,456 | ) | (5,390,833,499 | ) |
(1) Formerly named Janus Research Fund.
(2) Capital loss carryovers subject to annual limitations.
During the year ended October 31, 2006, the following capital loss carryovers were utilized by the Funds as indicated in the table below.
Fund | Capital Loss Carryover Utilized | ||||||
Janus Global Opportunities Fund | $ | 8,141,177 | |||||
Janus Overseas Fund | 629,449,015 | ||||||
Janus Worldwide Fund | 512,476,596 |
48 Janus International & Global Funds April 30, 2007
5. CAPITAL SHARE TRANSACTIONS
For the six-month period ended April 30, 2007 (unaudited) and the fiscal year ended October 31, 2006 | Janus Global Opportunities Fund | Janus Global Research Fund(1) | Janus Overseas Fund | Janus Worldwide Fund | |||||||||||||||||||||||||||||||
(all numbers in thousands) | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |||||||||||||||||||||||||||
Transactions in Fund Shares | |||||||||||||||||||||||||||||||||||
Shares sold | 858 | 1,015 | 3,712 | 6,700 | 46,493 | 57,011 | 2,252 | 3,059 | |||||||||||||||||||||||||||
Reinvested dividends and distributions | 1,490 | 90 | 544 | 111 | 1,570 | 815 | 1,098 | 1,272 | |||||||||||||||||||||||||||
Shares repurchased | (1,514 | ) | (4,363 | ) | (1,355 | ) | (2,490 | ) | (15,179 | ) | (22,470 | ) | (10,654 | ) | (33,046 | ) | |||||||||||||||||||
Net Increase/(Decrease) in Capital Share Transactions | 834 | (3,258 | ) | 2,901 | 4,321 | 32,884 | 35,356 | (7,304 | ) | (28,715 | ) | ||||||||||||||||||||||||
Shares Outstanding, Beginning of Period | 9,509 | 12,767 | 8,589 | 4,268 | 125,256 | 89,900 | 91,009 | 119,724 | |||||||||||||||||||||||||||
Shares Outstanding, End of Period | 10,343 | 9,509 | 11,490 | 8,589 | 158,140 | 125,256 | 83,705 | 91,009 |
(1) Formerly named Janus Research Fund.
6. PENDING LEGAL MATTERS
In the fall of 2003, the Securities and Exchange Commission ("SEC"), the Office of the New York State Attorney General ("NYAG"), the Colorado Attorney General ("COAG"), and the Colorado Division of Securities ("CDS") announced that they were investigating alleged frequent trading practices in the mutual fund industry. On August 18, 2004, Janus Capital announced that it had reached final settlements with the SEC, the NYAG, the COAG, and the CDS related to such regulators' investigations into Janus Capital's frequent trading arrangements.
A number of civil lawsuits were brought against Janus Capital and certain of its affiliates, the Janus funds, and related entities and individuals based on allegations similar to those announced by the above regulators and were filed in several state and federal jurisdictions. Such lawsuits alleged a variety of theories for recovery including, but not limited to, the federal securities laws, other federal statutes (including ERISA), and various common law doctrines. The Judicial Panel on Multidistrict Litigation transferred these actions to the U.S. District Court for the District of Maryland (the "Court") for coordinated proceedings. On September 29, 2004, five consolidated amended complaints were filed with the Court that generally include: (i) claims by a putative class of investors in certain Janus funds asserting claims on behalf of the investor class (Marini, et al. v. Janus Investment Fund, et al., U.S. District Court, District of Maryland, Case No. 04-CV-00497); (ii) derivative claims by investors in certain Janus funds ostensibly on behalf of such funds (Steinberg et al. v. Janus Capital Management, LLC et al., U.S. District Court, District of Maryland, Case No. 04-CV-00518); (iii) claims on behalf of participants in the Janus 401(k) plan (Wangberger v. Janus Capital Group Inc., 401(k) Advisory Committee, et al., U.S. District Court, District of Maryland, Case No. JFM-05-2711); (iv) claims brought on behalf of shareholders of Janus Capital Group Inc. ("JCGI") on a derivative basis against th e Board of Directors of JCGI (Chasen v. Whiston, et al., U.S. District Court, District of Maryland, Case No. 04-MD-00855); and (v) claims by a putative class of shareholders of JCGI asserting claims on behalf of the shareholders (Wiggins, et al. v. Janus Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No. 04-CV-00818). Each of the five complaints initially named JCGI and/or Janus Capital as a defendant. In addition, the following were also named as defendants in one or more of the actions: Janus Investment Fund ("JIF"), Janus Aspen Series ("JAS"), Janus Adviser Series ("JAD"), Janus Distributors LLC, Enhanced Inv estment Technologies, LLC ("INTECH"), Bay Isle Financial LLC ("Bay Isle"), Perkins, Wolf, McDonnell and Company, LLC ("Perkins"), the Advisory Committee of the Janus 401(k) plan, and the current or former directors of JCGI.
On August 25, 2005, the Court entered orders dismissing most of the claims asserted against Janus Capital and its affiliates by fund investors in the Marini and Steinberg cases (actions (i) and (ii) above) except certain claims under Section 10(b) of the Securities Exchange Act of 1934 and under Section 36(b) of the Investment Company Act of 1940, as amended (the "1940 Act"). On August 15, 2006, the Wangberger complaint in the 401(k) plan class action (action (iii) above) was dismissed by the district court with prejudice; the plaintiff appealed that dismissal decision to the United States Court of Appeals for the Fourth Circuit. That appeal is still pending. The Court also dismissed the Chasen lawsuit (action (iv) above) against JCGI's Board of Directors without leave to amend. Finally, a Motion to Dismiss the Wiggins suit (action (v) above) was granted and the matter was dismissed in May 2007.
In addition to the lawsuits described above, the Auditor of the State of West Virginia ("Auditor"), in his capacity as securities commissioner, has initiated administrative proceedings against
Janus International & Global Funds April 30, 2007 49
Notes to Financial Statements (unaudited) (continued)
many of the defendants in the market timing cases (including JCGI and Janus Capital) and, as a part of its relief, is seeking disgorgement and other monetary relief based on similar market timing allegations (In the Matter of Janus Capital Group Inc. et al., Before the Securities Commissioner, State of West Virginia, Summary Order No. 05-1320). The respondents in these proceedings collectively sought a Writ of Prohibition in state court, which was denied. Their subsequent Petition for Appeal was also denied. Consequently, in September 2006, JCGI and Janus Capital filed their answer to the Auditor's summary order instituting proceedings and requested a hearing. A hearing is currently scheduled for June 28, 2007. JCGI and Janus Capital, as well as other similarly situated defendants, continue to challenge the statutory authority of the Auditor to bring such an action.
In addition to the "market timing" actions described above, Janus Capital was 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 (Walter Sins, et al. v. Janus Capital Management LLC, U.S. District Court, District of Colorado, Case No. 04-CV-01647-WDM-MEH; Michael Fleisher, et al. v. Janus Capital Management, LLC, 04-CV-02395-MSK-CBS). The action was filed in 2004 by fund investors asserting breach of fiduciary duty under Section 36(b) of the 1940 Act. The plaintiffs sought declaratory and injunctive relief and an unspecified amount of damages. In April 2007, the parties in the litigation jointly filed a Stipulation Regarding Dismissal of Claims With Prejudice ("Stipulation of Dismissal"), and on May 2, 2007, the Colorado District Court approved the Stipulation of Dismissal and dismissed the case.
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 (Pfeiffer v. Credit Suisse First Boston aka In re Initial Public Offering Antitrust Litigation, U.S. District Court, Southern District of New York, Case No. 01-CV-2014). 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. In March 2006, the defendants, including Janus Capital, filed a Petition for a Writ of Certiorari with the U.S. Supreme Court to review the decision of the U. S. Court of Appeals. The U.S. Supreme Court granted the Petition for a Writ of Certiorari and heard argument on the matter on March 27, 2007. The parties are now awaiting a decision on the matter from the U.S. Supreme Court.
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.
50 Janus International & Global Funds April 30, 2007
Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to their portfolio securities is available: (i) without charge, upon request, by calling 1-800-525-3713 (toll free); (ii) on the Funds' website at www.janus.com/proxyvoting; and (iii) on the SEC's website at http://www.sec.gov. Additionally, information regarding each Fund's proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through www.janus.com and from the SEC's website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Funds file their complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Funds' Form N-Q: (i) is available on the SEC's website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-3713 (toll free).
Approval of Advisory Agreements During the Period
The Trustees of Janus Investment Fund, more than eighty-five percent of whom have never been affiliated with the adviser ("Independent Trustees"), oversee the management of each of the Funds and, as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the three Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each of the Funds, the Trustees received and reviewed a substantial amount of information provided by Janus Capital and the respective subadvisers in response to requests of the Independent Trustees and their independent legal counsel. They also received and reviewed a considerable amount of information and analysis provided 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 independent legal counsel.
At a meeting held on December 20, 2006, based on their evaluation of the information provided by Janus Capital, the subadvisers and the independent fee consultant and other information, the Trustees determined that the overall arrangements between each Fund and Janus Capital were fair and reasonable in light of the nature, extent and quality of the services provided by Janus Capital, its affiliates and the subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting all of the Trustees unanimously approved the continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, for the period from February 1, 2007 through February 1, 2008 (January 1, 2007 through January 1, 2008 for INTECH Risk-Managed Stock Fund and Janus Global Research Fund), subject to earlier termination as provided in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees' determination to approve the continuation of the agreements are discussed separately below.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital 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 and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, especially those who provide investment management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions, serving as the Funds' administrator, monitoring adherence to the Funds' investment restrictions, producing shareholder reports, providing support services for the Trustees and Trustee co mmittees, communicating with shareholders and overseeing the activities of other service providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
The Trustees concluded that: the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements; that, taking into account steps taken to address a small portion of the Funds whose performance lagged that of the median of their peers for certain periods, the quality of those services had been consistent with or superior to quality norms in the industry; and that the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the 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 performance results of each Fund over various time periods. They reviewed information
Janus International & Global Funds April 30, 2007 51
Additional Information (unaudited) (continued)
comparing each Fund's performance with the performance of comparable funds and peer groups identified by Lipper Inc., an independent provider of investment company data, and with the Fund's benchmark index. They concluded that the performance of most Funds was good to very good under current market conditions. Although the performance of some Funds lagged that of the median of their peers for certain periods, the Trustees also concluded that Janus Capital had taken appropriate steps to address those instances of under-performance and that the more recent performance of most of those Funds had been improving.
Costs of Services Provided
The Trustees examined information on the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by Lipper. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and administrative) fees for most of the Funds, in some cases after contractual expense limitations, was below the mean management fee rate of the respective peer group of funds selected by Lipper.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent and the competitive market for mutual funds in different distribution channels. They concluded that the compensation methodology provided a good alignment of the interests of the portfolio managers with the interests of Fund shareholders.
The Trustees also reviewed management fees charged by Janus Capital to its separate account clients and to its subadvised funds (for which Janus Capital provides only services related to portfolio management). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fees for Funds having a similar strategy, the Trustees noted that, under the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administrative services, oversight of the Funds' other service providers, Trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the spread between the average fee rates charged to the Funds and the fee ra tes that Janus Capital charged to its separate account clients was significantly smaller than the average spread for such fee rates of other advisers, based on publicly available data and research conducted by their independent fee consultant.
In considering the fees charged by Janus Capital, the Trustees noted that, in addition to the previously approved performance fee structure for Janus Worldwide Fund and certain other Funds that would become operative in February 2007, they also had negotiated with Janus Capital a temporary waiver of a portion of the investment advisory fee paid by Janus Worldwide Fund to Janus Capital to provide for a possible reduction in the rate of advisory fee payable by the Fund for the period July 1, 2006 through January 31, 2007 if the investment performance of the Fund should lag that of its benchmark index performance over the applicable performance measurement period.
The Trustees reviewed information on the profitability of Janus Capital and its affiliates of their relationships with each Fund, as well as an explanation of the methodology utilized in allocating various expenses among the Funds and other clients. The Trustees also reviewed the financial statements of Janus Capital's parent company and its corporate structure. In their review, the Trustees considered whether Janus Capital and each subadviser receive adequate incentives to manage the Funds effectively. The Trustees recognized that profitability comparisons among investment advisers are difficult because very little comparative information is publicly available and profitability of any adviser is affected by numerous factors, including the organizational structure of the particular manager, the types of funds and other accounts it manages, possible other lines of business, the methodology for allocating expenses and the adviser's capital str ucture and cost of capital. However, based on the information available and taking those factors into account, the Trustees concluded that Janus Capital's profitability with respect to each Fund in relation to the services rendered was not unreasonable.
The Trustees concluded that the management fees and other compensation payable by each Fund to Janus Capital and its affiliates, as well as the fees paid by Janus Capital 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 and the subadviser charge 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 and any subadviser, the investment performance of the Fund and any expense limitations agreed to by Janus Capital.
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of the Funds increase. They noted that, although most Funds pay advisory fees at a fixed rate as a percentage of net assets, without any breakpoints, the management fee rate paid by each Fund, after any contractual expense limitations, was below the mean management fee rate of the Fund's peer group selected by Lipper; and, for those Funds whose expenses are being reduced by the contractual expense limitations of Janus
52 Janus International & Global Funds April 30, 2007
Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of many of the Funds declined in the past few years, these Funds benefited from having advisory fee rates that remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for several Funds that will cause the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through lower charges of third-party service providers based on the combined scale of all of the Funds. Based on all of the information they reviewed, the Trustees concluded that the current fee structure of eac h Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of economies of scale at the current asset level of the Fund.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and that the transfer agent receives compensation directly from the non-money market Funds for services provided. The Trustees also considered Janus Capital's past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary research products and services benefiting those Funds and/or other clients of Janus Capital, as well as Janus Capital's prior agreement not to use any Fund's brokerage transactions to obtain third party research products or services. The Trustees concluded that Janus Capital's use of "soft" commission dollars of a Fund to obtain proprietary research products and services was consistent with regulatory requirements and guidelines and was likely to benefit the Funds. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates pursuant to the agreements and the fees to be paid by each Fund therefor the Funds and Janus Capital may potentially benefit from their relationship with each other in other ways. They 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 any Fund could attract other business to Janus Capital or other Janus funds and that the success of Janus Capital could enhance Janus Capital's ability to serve the Funds.After full consideration of the above factors as well as other factors, all of the Trustees, including all of the Independent Trustees, concluded that the proposed continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, was in the best interest of the respective Funds and their shareholders.
Janus International & Global Funds April 30, 2007 53
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.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized and unsubsidized ratios for the past fiscal year. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting a Fund's unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and/or Janus Services, LLC and reflects a Fund's subsidized expense ratio. Both the total annual fund operating expenses ratio and net annual fund operating expenses ratio are based on average net assets as of the fiscal year ended October 31, 2006. The ratios also include expenses indirectly incurred by the Fund as a result of investing in other investment companies or pooled investments, which are not reflected in the "Financial Highlights" of this report. As a result, these ratios may be higher or lower than those shown in the "Financial Highlights" in this repo rt. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
2. SCHEDULES OF INVESTMENTS
Following the performance overview section is each Fund's Schedule of Investments. This schedule reports the industry concentrations and types of securities held in each Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
Funds that invest in foreign securities also provide a summary of investments by country. This summary reports the Fund's exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country in which the company is incorporated.
2A. FORWARD CURRENCY CONTRACTS
A table listing forward currency contracts follows each Fund's Schedule of Investments (if applicable). Forward currency contracts are agreements to deliver or receive a preset amount of currency at a future date. Forward currency contracts are used to hedge against foreign currency risk in the Fund's long-term holdings.
The table provides the name of the foreign currency, the settlement date of the contract, the amount of the contract, the value of the currency in U.S. dollars and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the change in currency exchange rates from the time the contract was opened to the last day of the reporting period.
2B. FUTURES
A table listing futures contracts follows each Fund's Schedule of Investments (if applicable). Futures contracts are contracts that obligate the buyer to receive and the seller to deliver an instrument or money at a specified price on a specified date. Futures are used to hedge against adverse movements in securities prices, currency risk or interest rates.
The table provides the name of the contract, number of contracts held, the expiration date, the principal amount, value and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the marked-to-market amount for the last day of the reporting period.
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.
54 Janus International & Global Funds April 30, 2007
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 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, expense ratios and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income per share, which comprises dividends and interest income earned on securities held by the Fund. Following is the total of gains/(losses), realized and unrealized. Dividends and distributions are then subtracted to arrive at the NAV per share at the end of the period.
The next line reflects the average annual total return reported the last day of the period.
Also included are the expense ratios, or the percentage of 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 the 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 figure 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, 2007 55
Shareholder Meeting (unaudited)
A Special Meeting of Shareholders of the Funds was held on December 14, 2006. At the meeting, the following matter was 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 result of the Special Meeting of Shareholders is noted below.
Proposal
To approve an amendment to the Fund's investment advisory agreement, which changes the Fund's benchmark index for purposes of calculating the performance-based advisory fee.
Number of Votes | |||||||||||||||||||
Fund | Record Date Votes | Affirmative | Against | Abstain | |||||||||||||||
Janus Global Research Fund(1) | 92,238,430 | 42,231,208 | 3,432,697 | 1,949,841 |
(1) Formerly named Janus Research Fund.
Percentage of Total Outstanding Votes | Percentage of Voted | ||||||||||||||||||||||||||
Fund | Affirmative | Against | Abstain | Affirmative | Against | Abstain | |||||||||||||||||||||
Janus Global Research Fund(1) | 45.79 | % | 3.72 | % | 2.11 | % | 88.70 | % | 7.20 | % | 4.10 | % |
56 Janus International & Global Funds April 30, 2007
Janus International & Global Funds April 30, 2007 57
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 (6/07)
C-0507-333 111-24-105 06-07
2007 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 management perspective
• Investment strategy behind your fund
��� Fund performance, characteristics and holdings
Table of Contents
Janus Bond & Money Market Funds
Co-Chief Investment Officers' Letter to Shareholders | 1 | ||||||
Useful Information About Your Fund Report | 4 | ||||||
Management Commentaries and Schedules of Investments | |||||||
Janus Federal Tax-Exempt Fund | 5 | ||||||
Janus Flexible Bond Fund | 12 | ||||||
Janus High-Yield Fund | 22 | ||||||
Janus Short-Term Bond Fund | 34 | ||||||
Janus Money Market Fund | 42 | ||||||
Janus Government Money Market Fund | 45 | ||||||
Janus Tax-Exempt Money Market Fund | 46 | ||||||
Statements of Assets and Liabilities - Bond Funds | 48 | ||||||
Statements of Operations - Bond Funds | 49 | ||||||
Statements of Changes in Net Assets - Bond Funds | 50 | ||||||
Financial Highlights - Bond Funds | 51 | ||||||
Statements of Assets and Liabilities - Money Market Funds | 53 | ||||||
Statements of Operations - Money Market Funds | 54 | ||||||
Statements of Changes in Net Assets - Money Market Funds | 55 | ||||||
Financial Highlights - Money Market Funds | 56 | ||||||
Notes to Schedules of Investments | 58 | ||||||
Notes to Financial Statements | 61 | ||||||
Additional Information | 71 | ||||||
Explanations of Charts, Tables and Financial Statements | 74 | ||||||
Shareholder Meeting | 78 | ||||||
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.
Co–Chief Investment Officers' Letter to the Shareholders
Jonathan Coleman
Co-Chief Investment Officer
Gibson Smith
Co-Chief Investment Officer
Dear Shareholders,
We would like to thank you for your investment in the Janus Funds. Your support is what drives us in our quest to deliver strong, consistent fund performance.
Major Market Themes
Equity markets delivered healthy gains during the six months ended April 30, 2007, amid continued evidence of strong U.S. economic growth with modest inflation. Despite a brief bout of market volatility in late February and early March, markets rebounded quickly on hopes of monetary easing by the Federal Reserve (Fed). While U.S. corporate profit growth showed signs of slowing, robust mergers and acquisitions (M&A) and private equity transactions continued to provide valuation support to equities in the U.S. and around the globe.
Continued Strong Performance
We are pleased to report that several fund managers continued to deliver strong performance compared to their peers. For the one-year period ended April 30, 2007, 81% of Janus' retail funds ranked within Lipper's top two quartiles based on total returns. For the three-year period, 68% of our retail funds achieved first- or second- quartile Lipper rankings, and 67% ranked in Lipper's top two quartiles for the five-year period. (See complete rankings on page 3.)
Investment Team Depth
We're proud of the depth we've built in our investment team over the past few years. Recently, we said farewell to several long-term Janus portfolio managers who announced their retirements. In transitioning the leadership of their portfolios, we're confident that our investment team bench strength will ensure smooth transitions.
Management of Janus Global Life Sciences Fund will reside in the capable hands of Andy Acker. Barney Wilson will assume sole portfolio management responsibilities for Janus Global Technology Fund. In addition, Gibson Smith and Darrell Watters, with more than 33 years of combined investment experience, will co-manage Janus Flexible Bond Fund. Jason Groom, a seasoned fixed-income professional with 13 years of investment experience, will assume co-portfolio management responsibilities with Darrell Watters for Janus Short-Term Bond Fund, previously managed by Gibson Smith. Lastly, Craig Jacobson will join Eric Thorderson as Co-Portfolio Manager of all Janus money market funds, with the exception of Janus Tax-Exempt Money Market Fund, for which he will be sole Portfolio Manager.
It's important to note that we will continue to focus on the same investment objectives and employ the same in-depth, fundamental analysis and company-by-company approach to portfolio construction that are Janus hallmarks. We believe all of these individuals possess the skills and experience necessary to lead your Funds to strong performance.
Outlook
Looking ahead, with most U.S. equity indexes near all-time highs at the end of the period, we will closely monitor several fundamental factors for directional cues. First, despite the weakness in the U.S. housing sector and the associated credit quality issues in the subprime mortgage market, the U.S. unemployment rate was near historic lows. We intend to watch the labor market closely for any sign of a slowdown that could impact consumer sentiment and economic growth. Similarly, we plan to monitor the higher-quality prime mortgage market and other areas of consumer lending for any indication of credit quality deterioration.
Second, U.S. corporate profit growth has experienced double-digit gains for several years, which, combined with strong liquidity from corporate M&A and private equity transactions, has supported higher equity valuations. We will continue to watch both the future path of corporate earnings and the overall liquidity in the markets to determine whether current valuations can be sustained.
In summary, while there are both positive and negative factors that could influence the markets in the coming months, we view the fundamental economic outlook as positive. While inflationary concerns and questions about the strength of consumer spending abound, we feel valuations for equities are reasonable by historic standards. In fact, as overall economic growth slows, investors could place an increasing premium on the shares of companies with strong growth prospects. We
Janus Bond & Money Market Funds April 30, 2007 1
Continued
believe Janus' fundamental research can be beneficial in such an environment. Regardless of the macroeconomic climate, we remain dedicated to rewarding your confidence in Janus with strong, consistent fund performance.
Sincerely,
Jonathan Coleman
Co-Chief Investment Officer
Gibson Smith
Co-Chief Investment Officer
2 Janus Bond & Money Market Funds April 30, 2007
Lipper Rankings (unaudited)
Lipper Rankings – Based on total return as of 4/30/07 | |||||||||||||||||||||||||||||||||||||||||||||||
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 Fund | |||||||||||||||||||||||||||||||||||||||||||||||
(Inception Date) | |||||||||||||||||||||||||||||||||||||||||||||||
Janus Fund (2/70) | Large-Cap Growth Funds | 5 | 34 / 723 | 19 | 117 / 620 | 29 | 147 / 506 | 38 | 74 / 195 | 10 | 2 / 20 | ||||||||||||||||||||||||||||||||||||
Janus Enterprise Fund(1) (9/92) | Mid-Cap Growth Funds | 5 | 26 / 628 | 11 | 53 / 499 | 6 | 21 / 393 | 45 | 72 / 161 | 34 | 17 / 49 | ||||||||||||||||||||||||||||||||||||
Janus Orion Fund (6/00) | Multi-Cap Growth Funds | 13 | 62 / 497 | 2 | 5 / 395 | 5 | 13 / 317 | N/A | N/A | 29 | 66 / 232 | ||||||||||||||||||||||||||||||||||||
Janus Research Fund(1)(2) (5/93) | Large-Cap Growth Funds | 1 | 1 / 723 | 2 | 9 / 620 | 3 | 11 / 506 | 1 | 1 / 195 | 2 | 1 / 81 | ||||||||||||||||||||||||||||||||||||
Janus Triton Fund(1) (2/05) | Small-Cap Growth Funds | 33 | 178 / 536 | N/A | N/A | N/A | N/A | N/A | N/A | 4 | 21 / 476 | ||||||||||||||||||||||||||||||||||||
Janus Twenty Fund* (4/85) | Large-Cap Growth Funds | 2 | 9 / 723 | 1 | 3 / 620 | 1 | 3 / 506 | 3 | 4 / 195 | 3 | 1 / 40 | ||||||||||||||||||||||||||||||||||||
Janus Venture Fund* (4/85) | Small-Cap Growth Funds | 3 | 11 / 536 | 7 | 29 / 437 | 10 | 33 / 364 | 27 | 39 / 147 | 10 | 1 / 10 | ||||||||||||||||||||||||||||||||||||
Janus Global Life Sciences Fund (12/98) | Health/Biotechnology Funds | 79 | 134 / 169 | 50 | 75 / 151 | 56 | 74 / 132 | N/A | N/A | 38 | 18 / 47 | ||||||||||||||||||||||||||||||||||||
Janus Global Technology Fund (12/98) | Science & Technology Funds | 33 | 94 / 287 | 32 | 83 / 260 | 52 | 125 / 241 | N/A | N/A | 27 | 20 / 75 | ||||||||||||||||||||||||||||||||||||
Janus Balanced Fund(1) (9/92) | Mixed-Asset Target Allocation Moderate Funds | 25 | 102 / 423 | 17 | 53 / 319 | 39 | 81 / 212 | 6 | 6 / 113 | 4 | 1 / 29 | ||||||||||||||||||||||||||||||||||||
Janus Contrarian Fund (2/00) | Multi-Cap Core Funds | 1 | 2 / 897 | 1 | 1 / 661 | 1 | 2 / 479 | N/A | N/A | 11 | 31 / 323 | ||||||||||||||||||||||||||||||||||||
Janus Fundamental Equity Fund(1) (6/96) | Large-Cap Core Funds | 90 | 713 / 795 | 1 | 10 / 670 | 7 | 41 / 567 | 1 | 2 / 255 | 1 | 1 / 212 | ||||||||||||||||||||||||||||||||||||
Janus Growth and Income Fund(1) (5/91) | Large-Cap Core Funds | 97 | 772 / 795 | 12 | 79 / 670 | 28 | 159 / 567 | 4 | 9 / 255 | 6 | 4 / 76 | ||||||||||||||||||||||||||||||||||||
INTECH Risk-Managed Stock Fund (2/03) | Multi-Cap Core Funds | 49 | 434 / 897 | 22 | 144 / 661 | N/A | N/A | N/A | N/A | 32 | 172 / 548 | ||||||||||||||||||||||||||||||||||||
Janus Mid Cap Value Fund - Inv(1)(3) (8/98) | Mid-Cap Value Funds | 43 | 128 / 300 | 63 | 147 / 232 | 41 | 73 / 178 | N/A | N/A | 6 | 4 / 68 | ||||||||||||||||||||||||||||||||||||
Janus Small Cap Value Fund - Inv*(3) (10/87) | Small-Cap Core Funds | 14 | 98 / 713 | 74 | 410 / 556 | 81 | 350 / 432 | 11 | 16 / 145 | 16 | 21 / 132 | ||||||||||||||||||||||||||||||||||||
Janus Federal Tax-Exempt Fund(1) (5/93) | General Municipal Debt Funds | 56 | 135 / 241 | 71 | 164 / 230 | 72 | 155 / 216 | 79 | 109 / 137 | 80 | 55 / 68 | ||||||||||||||||||||||||||||||||||||
Janus Flexible Bond Fund(1) (7/87) | Intermediate Investment Grade Debt Funds | 38 | 198 / 530 | 52 | 226 / 442 | 18 | 65 / 380 | 31 | 54 / 174 | 24 | 6 / 24 | ||||||||||||||||||||||||||||||||||||
Janus High-Yield Fund(1) (12/95) | High Current Yield Funds | 40 | 174 / 443 | 39 | 146 / 378 | 68 | 209 / 308 | 16 | 20 / 127 | 5 | 5 / 99 | ||||||||||||||||||||||||||||||||||||
Janus Short-Term Bond Fund(1) (9/92) | Short Investment Grade Debt Funds | 53 | 126 / 237 | 51 | 101 / 199 | 46 | 65 / 142 | 41 | 32 / 79 | 54 | 13 / 24 | ||||||||||||||||||||||||||||||||||||
Janus Global Opportunities Fund(1) (6/01) | Global Funds | 33 | 132 / 399 | 94 | 281 / 301 | 85 | 198 / 234 | N/A | N/A | 24 | 49 / 209 | ||||||||||||||||||||||||||||||||||||
Janus Global Research Fund(1)(4) (2/05) | Multi-Cap Growth Funds | 4 | 15 / 497 | N/A | N/A | N/A | N/A | N/A | N/A | 1 | 4 / 424 | ||||||||||||||||||||||||||||||||||||
Janus Overseas Fund(1) (5/94) | International Funds | 1 | 1 / 987 | 1 | 1 / 803 | 2 | 12 / 661 | 4 | 11 / 280 | 1 | 1 / 117 | ||||||||||||||||||||||||||||||||||||
Janus Worldwide Fund(1) (5/91) | Global Funds | 7 | 25 / 399 | 90 | 270 / 301 | 96 | 225 / 234 | 69 | 66 / 96 | 32 | 5 / 15 | ||||||||||||||||||||||||||||||||||||
Janus Smart Portfolio - Growth (12/05) | Mixed-Asset Target Allocation Growth Funds | 11 | 64 / 609 | N/A | N/A | N/A | N/A | N/A | N/A | 7 | 41 / 598 | ||||||||||||||||||||||||||||||||||||
Janus Smart Portfolio - Moderate (12/05) | Mixed-Asset Target Allocation Moderate Funds | 18 | 73 / 423 | N/A | N/A | N/A | N/A | N/A | N/A | 9 | 35 / 417 | ||||||||||||||||||||||||||||||||||||
Janus Smart Portfolio - Conservative (12/05) | Mixed-Asset Target Allocation Conservative Funds | 8 | 28 / 365 | N/A | N/A | N/A | N/A | N/A | N/A | 4 | 11 / 344 |
(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) Formerly named Janus Mercury Fund.
(3)Rating is for the Investor Share class only; other classes may have different performance characteristics.
(4) Formerly named Janus Research Fund.
*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, 2007 3
Useful Information About Your Fund Report
Management Commentaries
The Management Commentaries in this report include valuable insight from the Funds' managers as well as statistical information to help you understand how your Fund's performance and characteristics stack up against those of comparable indices.
Please keep in mind that the opinions expressed by the Funds' managers in the Management Commentaries are just that: opinions. They are a reflection of their best judgment at the time this report was compiled, which was April 30, 2007. 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 Management Commentary within this Semiannual Report. Please refer to this information when reviewing the Expense Example for each Fund.
Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including redemption fees (where applicable) (and any related exchange fees) and (2) ongoing costs, including management fees and other Fund expenses. The example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the six-month period from November 1, 2006 to April 30, 2007.
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, 2008. 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.
4 Janus Bond & Money Market Funds April 30, 2007
Janus Federal Tax-Exempt Fund (unaudited)
Ticker: JATEX
Performance Overview
For the six-month period ended April 30, 2007, Janus Federal Tax-Exempt Fund gained 1.32%, while its benchmark, the Lehman Brothers Municipal Bond Index, returned 1.59%.
Doug Nelson
portfolio manager
Fund Snapshot
This bond fund invests primarily in federally tax-exempt municipal bonds of any maturity.
Economic Update
Longer term interest rates remained range-bound in the period with the 10-year Treasury falling to a low of nearly 4.40% in early December and backing up to a high of almost 4.90% by late January. Equity markets delivered healthy gains during the period amid continued evidence of strong U.S. economic growth with modest inflation. After a brief period of market volatility in late February and early March, markets rebounded quickly on hopes of monetary easing by the Federal Reserve (Fed).
The Fed left its target interest rate unchanged during the period, taking a more neutral stance in late March by removing its reference to "additional firming" from its monetary policy statement. Though the markets took this to mean a greater potential for a rate cut, the subtle change in the language provided the Fed with some flexibility to adjust monetary policy in either direction. Nevertheless, Fed Chairman Ben Bernanke reiterated the committee's concern over inflation's still elevated level and the Fed's view that although the risks of slower economic growth have risen, the potential for higher inflation remains the greater risk.
Generally, the pace of U.S. economic growth began slowing during the last quarter of 2006, but remained in modest territory. The weak housing market, a slowdown in manufacturing activity and corporate spending, coupled with other pressures facing the consumer are serving to bring into question the economy's ability to maintain its upward momentum. On the other hand, the economy remains fundamentally solid as job growth continued to hold steady, which could serve to prolong the current expansion.
Performance Update
In managing the Fund, my objective is to provide investors with a high level of federally tax-exempt income consistent with the preservation of capital. Depending on my market outlook, I may extend the duration of the Fund's holdings to pursue higher yields and capital appreciation should yields fall. Through much of the recent period, I chose to extend the Fund's duration due to my belief that moderate economic growth might ultimately favor the bond market, particularly at the longer-end of the maturity spectrum. Unfortunately, in a period where yields generally rose, the Fund's longer duration proved detrimental to overall performance, but the additional yield generated from longer-term securities helped to offset the negative impact. This longer duration positioning strategy benefited shareholders later in the period as yields declined below January highs.
Over the course of the six months, I continued to take advantage of robust new issuance within the municipal market, which afforded the opportunity to use rigorous bottom-up credit research and security selection to add value through my allocation to high-yield municipal investments.
The two largest detractors from performance were University of Kansas Hospital Authority Health Facilities Revenue and Cumberland County, Pennsylvania Municipal Authority Revenue due to widening spreads of securities in the investment grade healthcare sector. This sector has experienced pricing pressure due to heavy issuance. The two best performing bonds were Norfolk, Virginia Economic Development Authority and Harrisburg, Pennsylvania Authority Revenue. These two securities are both non-rated high-yield municipals. Spreads have continued to tighten in the high-yield market as investors continue to search for yield and there has been a dearth of high-yield issuance.
Outlook
Looking ahead, I will continue to carefully monitor developments affecting the tax-exempt market and the economy as a whole. It will be most important to watch the Fed balance its dual mandate of sustainable growth and price stability. Continued issuance in the municipal market should present opportunity for individual security selection in both the investment grade and high-yield municipal markets.
Janus Bond & Money Market Funds April 30, 2007 5
Janus Federal Tax-Exempt Fund (unaudited)
Janus Federal Tax-Exempt Fund At a Glance
Fund Profile
April 30, 2007 | |||||||
Weighted Average Maturity | 23.4 Years | ||||||
Average Modified Duration* | 9.9 Years | ||||||
30-Day Current Yield** | |||||||
With Reimbursement | 4.26 | % | |||||
Without Reimbursement | 3.79 | % | |||||
Weighted Average Fixed Income Credit Rating | A | ||||||
Number of Bonds/Notes | 77 |
* A theoretical measure of price volatility
** Yield will fluctuate
Ratings† Summary – (% of Net Assets)
April 30, 2007 | |||||||
AAA | 17.0 | % | |||||
AA | 9.8 | % | |||||
A | 27.3 | % | |||||
BBB | 15.9 | % | |||||
BB | 1.1 | % | |||||
B | 1.9 | % | |||||
CCC | 2.0 | % | |||||
Other | 25.0 | % |
† Rated by Standard & Poor's
Significant Areas of Investment – (% of Net Assets) | Significant Areas of Investment – (% of Net Assets) | ||||||
As of April 30, 2007 | As of October 31, 2006 | ||||||
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6 Janus Bond & Money Market Funds April 30, 2007
(unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | Total Annual Fund Operating Expenses | Net Annual Fund Operating Expenses | |||||||||||||||||||||||||
Janus Federal Tax- Exempt Fund | 1.32 | % | 5.09 | % | 4.06 | % | 4.42 | % | 4.55 | % | 0.97 | % | 0.56 | % | |||||||||||||||||
Lehman Brothers Municipal Bond Index | 1.59 | % | 5.78 | % | 5.16 | % | 5.81 | % | 5.81 | %** | |||||||||||||||||||||
Lipper Quartile | – | 3 | rd | 3 | rd | 4 | th | 4 | th | ||||||||||||||||||||||
Lipper Ranking - based on total return for General Municipal Debt Funds | – | 135/241 | 155/216 | 109/137 | 55/68 |
Visit janus.com to view current performance and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
Janus Capital has contractually agreed to waive the Fund's total operating expenses (excluding brokerage commissions, interest, taxes, and extraordinary expenses) to a certain limit until at least March 1, 2008. The expense waiver shown reflects the application of such limit and is detailed in the Statement of Additional Information. Total returns and yields shown include fee waivers, if any, and without such waivers, the Fund's yield and total returns would have been lower.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. Contractual waivers agreed to by Janus Capital are included under "Net Annual Fund Operating Expenses." All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
Funds that invest in bonds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds owned by the Fund. Unlike owning individual bonds, there are ongoing fees and expenses associated with owning shares of bond funds. The return of principal is not guaranteed due to net asset value fluctuation that is caused by changes in the price of specific bonds held in the Fund and selling of bonds within the Fund by the portfolio manager.
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.
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.
May 6, 1993 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
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.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – May 3, 1993
**The Lehman Brothers Municipal Bond Index's since inception returns are calculated from April 30, 1993.
Janus Bond & Money Market Funds April 30, 2007 7
Janus Federal Tax-Exempt Fund (unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,013.20 | $ | 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, 2007
Janus Federal Tax-Exempt Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Municipal Securities - 99.1% | |||||||||||
Arizona - 1.1% | |||||||||||
$ | 1,000,000 | Glendale, Arizona, Industrial Development Authority, (Midwestern University) 5.25%, due 5/15/22 | $ | 1,099,700 | |||||||
California - 5.0% | |||||||||||
1,440,000 | California Municipal Financial Authority Revenue, (University Students COOP Association), 5.00%, due 4/1/37 | 1,476,144 | |||||||||
750,000 | California Pollution Control Financing Authority, Solid Waste Disposal (Republic Services, Inc. Project) Series B, 5.25%, due 6/1/23 | 791,730 | |||||||||
1,500,000 | Independent Cities California Lease Financial Authority, (Westlake Mobile Home Park), 5.00%, due 4/15/47 | 1,538,024 | |||||||||
1,000,000 | Richmond, California, Joint Powers Multi Family Housing Revenue (Westridge Hilltop Apartments) 5.00%, due 12/15/33 | 1,011,160 | |||||||||
4,817,058 | |||||||||||
Colorado - 6.0% | |||||||||||
1,000,000 | Confluence Metro District, Colorado (Tax Supported Revenue) 5.45%, due 12/1/34 | 1,007,060 | |||||||||
1,805,000 | Hyland Hills Metro Parks and Recreation District, Colorado 5.00%, due 12/15/21** | 1,903,824 | |||||||||
1,000,000 | Mountain Shadows Metro District Colorado, (Limited Tax) 5.625%, due 12/1/37 | 996,720 | |||||||||
750,000 | North Range Metro District No.1 Colorado, 5.00%, due 12/15/24 | 778,380 | |||||||||
1,000,000 | Pinery West Metro District, Colorado (RDN Insured) 5.00%, due 12/1/27 | 1,041,680 | |||||||||
5,727,664 | |||||||||||
District of Columbia - 1.1% | |||||||||||
1,000,000 | District of Columbia Revenue Friendship Public Charter School (ACA Insured), 5.00%, due 6/1/35 | 1,033,120 | |||||||||
Florida - 2.7% | |||||||||||
2,000,000 | Hillsborough County, Florida, Industrial Development Authority Hospital Revenue (Tampa General Hospital Project) Series B, 5.25%, due 10/1/28 | 2,072,520 | |||||||||
500,000 | Northern Palm Beach County Improvement District, Florida (Water Control & Improvement - No. 43) Series B, 5.00%, due 8/1/31 | 514,920 | |||||||||
2,587,440 | |||||||||||
Georgia - 1.1% | |||||||||||
1,000,000 | Valdosta and Lowndes County, Georgia Hospital Authority Revenue, (South Georgia Medical Center Project) 5.00%, due 10/1/33 | 1,031,090 | |||||||||
Illinois - 12.3% | |||||||||||
2,500,000 | Crystal Lake, Illinois, Special Service Area 5.75%, due 3/1/36ß | 2,502,825 |
Shares or Principal Amount | Value | ||||||||||
Illinois - (continued) | |||||||||||
$ | 2,000,000 | East Peoria Illinois Revenue (Centenial College Foundation) (RDN Insured), 5.125%, due 6/1/36 | $ | 2,085,480 | |||||||
1,215,000 | Hampshire, Illinois, Special Service Area No. 9, Special Tax, (RDN Insured) 5.00%, due 12/30/20** | 1,278,630 | |||||||||
Illinois Finance Authority Revenue: | |||||||||||
1,000,000 | (Franciscan Communities) 5.50%, due 5/15/37 | 1,014,830 | |||||||||
(Montgomery Place Project), Series A | |||||||||||
500,000 | 5.50%, due 5/15/26 | 511,335 | |||||||||
2,000,000 | 5.00%, due 8/1/34 | 2,096,300 | |||||||||
2,200,000 | Illinois Housing Development Authority Family Revenue, (Sunrise Apartments) Series D, 5.00%, due 1/1/42 | 2,230,536 | |||||||||
11,719,936 | |||||||||||
Indiana - 4.3% | |||||||||||
1,000,000 | Anderson, Indiana, Economic Development Revenue, (Anderson University Project) 5.00%, due 10/1/32 | 1,012,300 | |||||||||
2,000,000 | Indiana Health and Educational Facility Financing Authority Revenue, Clarian Health Obligation Group, Series B 5.00%, due 2/15/24 | 2,073,220 | |||||||||
1,000,000 | Noblesville, Indiana, Redevelopment Authority Economic Development Lease Rental Bonds, (Hamilton Town Center Project), Series B 5.00%, due 8/1/25** | 1,036,640 | |||||||||
4,122,160 | |||||||||||
Iowa - 0.5% | |||||||||||
500,000 | Coralville, Iowa, Urban Renewal Revenue (Tax Increment), Series C 5.00%, due 6/1/47 | 500,765 | |||||||||
Kansas - 5.0% | |||||||||||
1,350,000 | Manhattan, Kansas, Industrial Revenue (Farrar Corp.), 5.375%, due 8/1/17ß | 1,346,909 | |||||||||
1,360,000 | Norwich, Kansas, Industrial Revenue (Farrar Corp.), 5.75%, due 8/1/17ß | 1,395,197 | |||||||||
2,000,000 | University of Kansas Hospital Authority Health Facilities Revenue, (University of Kansas Health System) 5.00%, due 9/1/36 | 2,050,840 | |||||||||
4,792,946 | |||||||||||
Kentucky - 0.7% | |||||||||||
680,000 | Louisville-Jefferson County, Kentucky Farmdale Improvement 5.50%, due 12/1/26ß | 676,654 | |||||||||
Michigan - 3.8% | |||||||||||
1,000,000 | Conner Creek Academy East, Michigan Public School Revenue 5.25%, due 11/1/31 | 1,012,430 | |||||||||
1,530,000 | Kentwood, Michigan, Economic Development Limited Obligation (Holland Home), Series A 5.25%, due 11/15/14 | 1,604,664 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2007 9
Janus Federal Tax-Exempt Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Michigan - (continued) | |||||||||||
$ | 1,000,000 | Michigan State Hospital Financial Authority Revenue, (Oakwood Hospital Obligations) Group A, 5.00%, due 7/15/21 | $ | 1,036,330 | |||||||
3,653,424 | |||||||||||
Minnesota - 0.5% | |||||||||||
500,000 | Inver Grove Heights, Minnesota Nursing Home Revenue, (Presbyterian Homes Care), 5.50%, due 10/1/33 | 508,470 | |||||||||
Missouri - 1.1% | |||||||||||
1,000,000 | Riverside, Missouri, Industrial Development Authority, (Horizons Project) Series A, 5.00%, due 5/1/27 | 1,036,630 | |||||||||
Montana - 1.1% | |||||||||||
1,000,000 | Montana Facilities Finance Authority Hospital Facilities Revenue, (St. Peter's Hospital), 5.00%, due 6/1/36 | 1,036,020 | |||||||||
Nevada - 1.6% | |||||||||||
1,550,000 | Reno, Nevada, Redevelopment Agency Tax Allocation, Series C, 5.40%, due 6/1/27 | 1,571,592 | |||||||||
New Hampshire - 0.5% | |||||||||||
500,000 | New Hampshire Health and Educational Facilities Authority Revenue, (Southern New Hampshire University) (ACA Insured), 5.00%, due 1/1/27 | 521,775 | |||||||||
New Jersey - 2.3% | |||||||||||
200,000 | New Jersey Economic Development Authority, (Glimcher Properties LP Project), 6.00%, due 11/1/28 | 202,822 | |||||||||
2,000,000 | New Jersey Tobacco Settlement Financing Corporation, Series 1A, 5.00%, due 6/1/41 | 1,965,260 | |||||||||
2,168,082 | |||||||||||
New York - 6.3% | |||||||||||
1,000,000 | Hudson Yards Infrastructure Corp. New York, Revenue Bonds, Series A 5.00%, due 2/15/47 | 1,048,840 | |||||||||
1,130,000 | Niagra County, New York, Industrial Development Agency, Multi Family Revenue, (Foxwood), (GNMA Insured) 5.00%, due 7/20/38 | 1,138,565 | |||||||||
2,200,000 | Onondaga County, New York, Industrial Development Agency, Pollution Control Revenue, (Anheuser-Busch Project) Series B, 4.95%, due 7/1/36 | 2,237,048 | |||||||||
1,500,000 | Syracuse, New York, Industrial Development Agency, (Carousel Center Project), Series A, 5.00%, due 1/1/36 | 1,564,125 | |||||||||
5,988,578 | |||||||||||
North Carolina - 2.3% | |||||||||||
700,000 | North Carolina Medical Care Community Health Facilities Revenue, (Arbor Acres) 5.00%, due 1/1/18 | 739,452 | |||||||||
1,385,000 | Wilson, North Carolina, Certificate Participation, (Public Facilities Project) Series A, 5.00%, due 5/1/29 | 1,455,039 | |||||||||
2,194,491 |
Shares or Principal Amount | Value | ||||||||||
Ohio - 2.2% | |||||||||||
$ | 2,000,000 | Richland County, Ohio, Hospital Facilities Revenue, Medcentral Health System Obligation, 5.125%, due 11/15/21 | $ | 2,113,480 | |||||||
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 | 1,093,490 | |||||||||
Pennsylvania - 6.4% | |||||||||||
1,676,637 | Abington Township, Pennsylvania, Municipal Authority Revenue, (Scranton Cultural Center), 5.00%, due 2/15/17ß | 1,676,671 | |||||||||
Cumberland County, Pennsylvania Municipal Authority Revenue, (Diakon Lutheran Ministries Project): | |||||||||||
1,000,000 | 5.00%, due 1/1/27 | 1,028,360 | |||||||||
1,250,000 | 5.00%, due 1/1/36 | 1,275,650 | |||||||||
1,000,000 | Harrisburg, Pennsylvania, Authority University Revenue, Harrisburg University of Science, Series B 6.00%, due 9/1/36 | 1,037,130 | |||||||||
1,000,000 | Philadelphia, Pennsylvania, Authority for Industrial Development Revenue (Franklin Towne Charter High School Project), Series A, 5.375%, due 1/1/32 | 1,038,330 | |||||||||
6,056,141 | |||||||||||
South Carolina - 1.0% | |||||||||||
1,000,000 | South Carolina Jobs-Economic Development Authority, Hospital Revenue, (Hampton Regional Medical), 5.25%, due 11/1/28 | 984,310 | |||||||||
Texas - 13.6% | |||||||||||
2,000,000 | Austin, Texas, Convention Enterprises, Inc. Convention Center Hotel First Tier Revenue Bonds, (XLCA Insured) Series A, 5.00%, due 1/1/34 | 2,098,320 | |||||||||
2,700,000 | Dallas Fort-Worth, Texas, International Airport Revenue, (AMBAC Insured) Series A, 5.00%, due 11/1/32** | 2,746,386 | |||||||||
1,000,000 | Gulf Coast, Texas, Waste Disposal Authority Revenue, (Waste Management of Texas), Series A, 5.20%, due 5/1/28 | 1,026,980 | |||||||||
1,130,000 | La Vernia, Texas, Higher Education Financial Revenue, (Southwest Winners Foundation), (ACA Insured), Series A 5.00%, due 2/15/21** | 1,170,431 | |||||||||
1,000,000 | Midlothian, Texas, Development Authority Tax, Series A, 5.00%, due 11/15/26 | 1,047,880 | |||||||||
1,795,000 | Pecos County, Texas, Iraan General Hospital (RDN Insured), 5.00%, due 2/15/26 | 1,867,913 | |||||||||
2,000,000 | Texas Alliance Airport Authority Special Facilities Authority Revenue, (American Airlines), 5.25%, due 12/1/29 | 1,938,260 | |||||||||
1,000,000 | Willacy County, Texas, Local Government Corporate Revenue, 6.00%, due 3/1/09 | 1,012,770 | |||||||||
12,908,940 | |||||||||||
Utah - 2.1% | |||||||||||
1,000,000 | Spanish Fork City, Utah, Charter School Revenue, (American Leadership Academy) 5.55%, due 11/15/21§ | 1,030,360 |
See Notes to Schedules of Investments and Financial Statements.
10 Janus Bond & Money Market Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Utah - (continued) | |||||||||||
$ | 1,000,000 | West Valley City, Utah, Charter Schools Revenue, (Monticello Academy) 6.375%, due 6/1/37 | $ | 1,025,760 | |||||||
2,056,120 | |||||||||||
Virginia - 2.1% | |||||||||||
1,000,000 | Norfolk Virginia Economic Development Authority, (Old Dominion University) 6.00%, due 11/1/36 | 1,048,210 | |||||||||
1,000,000 | Tobacco Settlement Financing Corp. (Senior), Series B1, 5.00%, due 6/1/47 | 985,000 | |||||||||
2,033,210 | |||||||||||
Washington - 5.1% | |||||||||||
2,000,000 | Washington State Healthcare Facilities Authority Revenue, (Group Health COOP) 5.00%, due 12/1/36 | 2,080,200 | |||||||||
2,000,000 | Washington State Higher Education Facilities Authority Revenue, (Pacific Lutheran University), (RDN Insured) 5.00%, due 11/1/31 | 2,100,240 | |||||||||
700,000 | Washington State Housing Finance Community, (Skyline First Hill Project) Series A, 5.625%, due 1/1/38 | 715,225 | |||||||||
4,895,665 | |||||||||||
Wisconsin - 6.2% | |||||||||||
Wisconsin State Health and Educational Facilities Authority Revenue Bonds: | |||||||||||
2,000,000 | (Franciscan Sisters Healthcare) 5.00%, due 9/1/33 | 2,006,260 | |||||||||
1,000,000 | (Milwaukee Catholic Home) 5.00%, due 7/1/26 | 1,031,080 | |||||||||
2,685,000 | (Synergy Health, Inc.) 6.00%, due 11/15/23 | 2,911,023 | |||||||||
5,948,363 | |||||||||||
Total Municipal Securities (cost $94,804,517) | 94,877,314 | ||||||||||
Short-Term Municipal Securities - 4.5% | |||||||||||
Alaska - 2.8% | |||||||||||
2,700,000 | North Slope Borough, Alaska, General Obligation Refunding Bonds, (MBIA Insured), Series A, Variable Rate 3.08%, 6/30/10 | 2,700,000 | |||||||||
Illinois - 0.9% | |||||||||||
800,000 | Illinois Health Facilities Authority Revenue (Blessing Hospital), (FSA Insured) Series B, Variable Rate, 3.51%, 11/15/29 | 800,000 | |||||||||
New York - 0.2% | |||||||||||
200,000 | New York City, New York, Subseries E-3 Variable Rate, 3.17%, 8/1/34 | 200,000 | |||||||||
Pennsylvania - 0.4% | |||||||||||
400,000 | South Fork Municipal Authority Hospital Revenue, (Conemaugh Health System) Series A, Variable Rate, 3.98%, 7/1/28 | 400,000 |
Shares or Principal Amount | Value | ||||||||||
Texas - 0.2% | |||||||||||
$ | 200,000 | Brownsville, Texas, Utility System, (MBIA Insured), Sub Lien Series A Variable Rate, 3.21%, 9/1/27 | $ | 200,000 | |||||||
5,000 | San Antonio, Texas, Water System Subordinate Lien Revenue and Refunding Bonds, (MBIA Insured) Series A, Variable Rate, 3.65%, 5/15/33 | 5,000 | |||||||||
205,000 | |||||||||||
Total Short-Term Municipal Securities (cost $4,305,000) | 4,305,000 | ||||||||||
Total Investments (total cost $99,109,517) – 103.6% | 99,182,314 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (3.6)% | (3,464,407 | ) | |||||||||
Net Assets – 100% | $ | 95,717,907 |
ACA - American Capital Access Corp.
AMBAC - American Municipal Bond Assurance Corp.
FSA - Financial Security Assurance, Inc.
GNMA - Government National Mortgage Association
MBIA - Municipal Bond Investors Assurance Corp.
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, 2007 11
Janus Flexible Bond Fund (unaudited)
Ticker: JAFIX
Performance Overview
For the six-month period ended April 30, 2007, Janus Flexible Bond Fund returned 2.79%, modestly outperforming its benchmark, the Lehman Brothers Aggregate Bond Index, which returned 2.64%.
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
Economic Update
Throughout the period, longer term interest rates stayed within the range we expected. The 10-year Treasury fell to a low of nearly 4.40% in early December and increased to a high of almost 4.90% by late January. Equity markets delivered healthy gains during the period amid continued evidence of modestly slowing U.S. economic growth with modest inflation. After a brief period of market volatility in late February and early March, markets rebounded quickly on hopes of monetary easing by the Federal Reserve (Fed).
The Fed left its target interest rate unchanged during the period, taking a more neutral stance in late March by removing its reference to "additional firming" from its monetary policy statement. Although the markets took this to indicate a greater potential for a rate cut, the subtle change in the language simply provided the Fed with some flexibility to adjust monetary policy in either direction. Nevertheless, Fed Chairman Ben Bernanke reiterated the committee's concern over inflation's still elevated level and the Fed's view that although the risks of slower economic growth rose, the potential for higher inflation remains the greater risk.
Generally, the pace of U.S. economic growth slowed during the last quarter of 2006, but remained in modest territory. The weak housing market, a slowdown in manufacturing activity and corporate spending, coupled with other consumer pressures brought into question the economy's ability to maintain its upward momentum. On the other hand, the economy remained fundamentally solid as job growth continued to hold steady, which could serve to prolong the current expansion.
Corporate Bonds and Mortgage-Backed Securities Aided Performance
Relative performance during the period was supported by the Fund's exposure to corporate bonds. An example was Xerox, which received a credit upgrade from Moody's Investor Service in recognition of its stable profitability and healthy cash flow growth, as well as the expectation that the company may reduce leverage.
Additionally, the Fund benefited from its above-benchmark weighting in higher-yield corporate bonds, which performed well for the period overall. In particular, I capitalized on my decision to invest in bonds issued by hospital management firm, HCA, following its November management-led leveraged buyout. The bonds of this asset-rich, cash flow generative business subsequently rallied, benefiting performance. Finally, results were supported by my stake in mortgage-backed securities, which generally perform well in an environment of low-yield volatility.
Duration Strategy Provided Mixed Results
The Fund's duration positioning provided mixed results. On a positive note, the out-of-benchmark investment in short-term bank loans and high-yield bonds served to reduce duration, while yields generally rose in the period. On the other hand, I used longer-term treasury securities in an effort to offset this shortening impact, which proved detrimental in the rising yield environment.
Additionally, while the Fund avoided major credit problems, I was disappointed by the performance of the TXU bonds. The Texas-based energy utility faced concerns that a recent buyout could increase debt and hurt the interests of current bondholders.
Outlook
Looking ahead, the team will continue to carefully monitor developments affecting the fixed-income markets. In this environment, Treasury yields are expected to remain range-bound, while investors await more clarity on the strength of the economy, the risks of inflation and the likely response of the Fed policymakers. The team will continue to utilize a flexible investment strategy in an effort to mitigate downside risk, while seeking opportunities to augment total return by investing in spread instruments such as mortgage-backed securities and corporate bonds.
In closing, I recently announced that after 21 years with Janus, I will retire from my portfolio manager responsibilities for Janus Flexible Bond Fund, effective May 15, 2007. Gibson Smith, Co-Chief Investment Officer of Janus Capital,
12 Janus Bond & Money Market Funds April 30, 2007
(unaudited)
co-portfolio manager of Janus Balanced Fund and portfolio manager of Janus High-Yield Fund; and Darrell Watters, a 14-year veteran of the fixed-income team with 21 years of professional investment experience, will succeed me and will serve as co-portfolio managers of the Fund.
After working closely with Gibson and Darrell over the last several years, I have high confidence in their ability to successfully manage the Fund. They will work closely to manage the Fund with the support of the strong fixed-income analyst team that we have built over the years. I believe that Gibson's and Darrell's combined experience and knowledge about the markets make them ideally suited to take over the Fund.
It has been an honor to have worked on your behalf. Thank you for your support over the years.
Janus Flexible Bond Fund At a Glance
Fund Profile
April 30, 2007 | |||||||
Weighted Average Maturity | 7.1 Years | ||||||
Average Modified Duration* | 4.4 Years | ||||||
30-Day Current Yield** | 4.79% | ||||||
Weighted Average Fixed Income Credit Rating | AA | ||||||
Number of Bonds/Notes | 265 |
* A theoretical measure of price volatility
** Yield will fluctuate
Ratings† Summary – (% of Net Assets)
April 30, 2007 | |||||||
AAA | 62.8 | % | |||||
AA | 5.4 | % | |||||
A | 3.0 | % | |||||
BBB | 13.1 | % | |||||
BB | 5.4 | % | |||||
B | 3.2 | % | |||||
CCC | 0.3 | % | |||||
Other | 6.8 | % |
†Rated by Standard & Poor's
Significant Areas of Investment – (% of Net Assets) | Asset Allocation – (% of Net Assets) | ||||||
As of April 30, 2007 | As of April 30, 2007 | ||||||
![]() | ![]() | ||||||
Emerging markets comprised 0.3% of total net assets.
Janus Bond & Money Market Funds April 30, 2007 13
Janus Flexible Bond Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | Total Annual Fund Operating Expenses | Net Annual Fund Operating Expenses | |||||||||||||||||||||||||
Janus Flexible Bond Fund | 2.79 | % | 7.04 | % | 5.27 | % | 5.99 | % | 7.46 | % | 0.83 | % | 0.83 | % | |||||||||||||||||
Lehman Brothers Aggregate Bond Index | 2.64 | % | 7.36 | % | 5.06 | % | 6.35 | % | 7.53 | %** | |||||||||||||||||||||
Lipper Quartile | – | 2 | nd | 1 | st | 2 | nd | 1 | st | ||||||||||||||||||||||
Lipper Ranking - based on total return for Intermediate Investment Grade Debt Funds | – | 198/530 | 65/380 | 54/174 | 6/24 |
Visit janus.com to view current performance and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
Janus Capital has contractually agreed to waive the Fund's total operating expenses (excluding brokerage commissions, interest, taxes, and extraordinary expenses) to a certain limit until at least March 1, 2008. The expense waiver shown reflects the application of such limit and is detailed in the Statement of Additional Information. Total returns and yields shown include fee waivers, if any, and without such waivers, the Fund's yield and total returns would have been lower.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. Contractual waivers agreed to by Janus Capital are included under "Net Annual Fund Operating Expenses." All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
The Fund's total operating expenses did not exceed the expense limit so no waivers were in effect for the most recent period presented.
Funds that invest in bonds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds owned by the Fund. Unlike owning individual bonds, there are ongoing fees and expenses associated with owning shares of bond funds. The return of principal is not guaranteed due to net asset value fluctuation that is caused by changes in the price of specific bonds held in the Fund and selling of bonds within the Fund by the portfolio manager.
High-yield/high-risk bonds involve a greater risk of default and price volatility than U.S. Government and other high-quality bonds. High-yield/high-risk bonds can experience sudden and sharp price swings which will affect net asset value.
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.
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.
July 9, 1987 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
Effective May 15, 2007, Gibson Smith and Darrell Watters will become Co-Portfolio Managers of Janus Flexible Bond Fund.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – July 7, 1987
**The Lehman Brothers Aggregate Bond Index's since inception returns are calculated from June 30, 1987.
14 Janus Bond & Money Market Funds April 30, 2007
(unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,027.90 | $ | 4.02 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.83 | $ | 4.01 |
*Expenses are equal to the annualized expense ratio of 0.80%, 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.
Janus Bond & Money Market Funds April 30, 2007 15
Janus Flexible Bond Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Corporate Bonds - 26.8% | |||||||||||
Aerospace and Defense - 0.2% | |||||||||||
Hawker Beechcraft, Inc.: | |||||||||||
$ | 105,319 | 5.25%, bank loan, due 3/26/14‡ | $ | 105,714 | |||||||
1,244,681 | 7.32%, bank loan, due 3/26/14‡ | 1,249,734 | |||||||||
1,355,448 | |||||||||||
Agricultural Operations - 0.2% | |||||||||||
1,421,000 | Bunge Limited Finance Corp., 4.375% company guaranteed notes, due 12/15/08 | 1,399,323 | |||||||||
Applications Software - 0.2% | |||||||||||
1,125,000 | Intuit, Inc., 5.75% senior unsecured notes, due 3/15/17 | 1,114,065 | |||||||||
Auction House - Art Dealer - 0.1% | |||||||||||
985,955 | Adesa, Inc., 0% bank loan, due 9/22/13‡ | 991,812 | |||||||||
Automotive - Cars and Light Trucks - 0.3% | |||||||||||
1,800,000 | Ford Motor Co., 8.36% bank loan, due 12/16/13‡ | 1,810,134 | |||||||||
773,063 | General Motors Corp., 7.725% bank loan, due 11/29/13‡ | 778,381 | |||||||||
2,588,515 | |||||||||||
Automotive - Medium and Heavy Duty Trucks - 0.2% | |||||||||||
Navistar International Corp.: | |||||||||||
35,000 | 8.47%, bank loan, 1/19/12‡ | 35,430 | |||||||||
431,667 | 8.60988%, bank loan, due 1/19/12‡ | 436,972 | |||||||||
1,283,333 | 8.60988%, bank loan, due 1/19/12‡ | 1,299,375 | |||||||||
1,771,777 | |||||||||||
Automotive - Truck Parts and Equipment - Original - 0% | |||||||||||
225,000 | American Axle & Manufacturing, Inc. 7.875%, company guaranteed notes due 3/1/17 | 225,563 | |||||||||
Building and Construction Products - Miscellaneous - 0.3% | |||||||||||
2,135,000 | CRH America, Inc., 6.00% company guaranteed notes, due 9/30/16 | 2,182,572 | |||||||||
Building Products - Cement and Aggregate - 0.3% | |||||||||||
Lafarge S.A.: | |||||||||||
865,000 | 6.50%, senior notes, due 7/15/16** | 914,554 | |||||||||
860,000 | 7.125%, senior unsecured notes due 7/15/36** | 940,128 | |||||||||
1,854,682 | |||||||||||
Cable Television - 2.0% | |||||||||||
1,750,000 | Charter Communications Operating LLC 7.35%, bank loan, due 3/5/14‡ | 1,744,540 | |||||||||
Comcast Corp.: | |||||||||||
2,775,000 | 5.85%, company guaranteed notes due 1/15/10 | 2,825,658 | |||||||||
3,395,000 | 6.50%, company guaranteed notes due 1/15/17 | 3,605,273 | |||||||||
3,850,000 | Cox Communications, Inc., 4.625% senior unsecured notes, due 1/15/10 | 3,796,915 | |||||||||
CSC Holdings, Inc.: | |||||||||||
721,773 | 7.07%, bank loan, due 3/29/13‡ | 724,256 | |||||||||
1,352,326 | 7.07%, bank loan, due 3/29/13‡ | 1,356,978 | |||||||||
174,457 | 7.11%, bank loan, due 3/29/13‡ | 175,057 | |||||||||
912,193 | 7.11%, bank loan, due 3/29/13‡ | 915,331 | |||||||||
15,144,008 |
Shares or Principal Amount | Value | ||||||||||
Casino Hotels - 0.3% | |||||||||||
$ | 867,273 | Green Valley Ranch Gaming, 7.36% bank loan, due 2/16/14‡ | $ | 870,890 | |||||||
1,250,000 | Majestic Star Casino LLC, 9.75% senior unsecured notes, due 1/15/11 | 1,200,000 | |||||||||
450,000 | Seminole Hard Rock Entertainment, 7.8475% secured notes, due 3/15/14 (144A)‡ | 461,250 | |||||||||
2,532,140 | |||||||||||
Cellular Telecommunications - 0.6% | |||||||||||
2,200,000 | Nextel Communications, Inc., 6.875% company guaranteed notes, due 10/31/13 | 2,260,894 | |||||||||
2,000,000 | Rogers Wireless Communications, Inc. 8.47988%, company guaranteed notes due 12/15/10‡ | 2,040,000 | |||||||||
4,300,894 | |||||||||||
Commercial Banks - 0.5% | |||||||||||
1,575,000 | ICICI Bank, Ltd., 7.25% bonds, due 10/31/16 (144A)‡ | 1,636,321 | |||||||||
1,325,000 | Shinsei Bank, Ltd., 6.418% junior subordinated notes due 7/20/16 (144A)‡ | 1,340,027 | |||||||||
1,135,000 | Standard Chartered PLC, 6.409% subordinated notes, due 12/29/49 (144A)‡ | 1,129,974 | |||||||||
4,106,322 | |||||||||||
Commercial Services - 0.4% | |||||||||||
3,050,000 | Iron Mountain, Inc., 8.625% company guaranteed notes, due 4/1/13 | 3,141,500 | |||||||||
Computer Services - 0.2% | |||||||||||
1,320,000 | SunGard Data Systems, Inc., 9.125% company guaranteed notes, due 8/15/13 | 1,415,700 | |||||||||
Containers - Metal and Glass - 0.5% | |||||||||||
2,153,000 | Owens-Brockway Glass Container, Inc. 8.875%, company guaranteed notes due 2/15/09 | 2,196,060 | |||||||||
1,720,000 | Owens-Illinois, Inc., 7.35% senior notes, due 5/15/08 | 1,737,200 | |||||||||
3,933,260 | |||||||||||
Diversified Financial Services - 1.0% | |||||||||||
General Electric Capital Corp.: | |||||||||||
5,145,000 | 4.875%, notes, due 10/21/10 | 5,122,829 | |||||||||
2,600,000 | 4.375%, unsecured notes, due 11/21/11 | 2,528,898 | |||||||||
7,651,727 | |||||||||||
Diversified Operations - 0.4% | |||||||||||
405,000 | 3M Co., 5.125% notes, due 11/6/09 | 407,508 | |||||||||
2,750,000 | Textron, Inc., 6.375% notes, due 11/15/08 | 2,800,045 | |||||||||
3,207,553 | |||||||||||
Diversified Operations - Commercial Services - 0.2% | |||||||||||
Aramark Corp.: | |||||||||||
41,151 | 5.20%, bank loan, due 1/26/14‡ | 41,354 | |||||||||
575,805 | 7.475%, bank loan, due 1/26/14‡ | 578,604 | |||||||||
750,000 | 8.50%, senior notes, due 2/1/15 (144A) | 784,687 | |||||||||
1,404,645 | |||||||||||
Drug Delivery Systems - 0.1% | |||||||||||
900,000 | Hospira, Inc., 6.05% senior notes, due 3/30/17 | 909,264 |
See Notes to Schedules of Investments and Financial Statements.
16 Janus Bond & Money Market Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Electric - Integrated - 2.1% | |||||||||||
$ | 1,275,000 | Consolidated Edison, Inc., 5.50% debentures, due 9/15/16 | $ | 1,286,052 | |||||||
1,900,000 | MidAmerican Energy Holdings Co., 3.50% senior notes, due 5/15/08 | 1,866,038 | |||||||||
4,035,000 | Monongahela Power Co., 6.70% first mortgage notes, due 6/15/14 | 4,297,129 | |||||||||
1,785,000 | Pacific Gas and Electric Co., 4.80% unsecured notes, due 3/1/14 | 1,733,303 | |||||||||
4,350,000 | Southern California Edison Co., 7.625% unsecured notes, due 1/15/10 | 4,625,106 | |||||||||
2,335,000 | TXU Corp., 4.80% senior notes, due 11/15/09 | 2,297,652 | |||||||||
16,105,280 | |||||||||||
Electronic Components - Semiconductors - 0.1% | |||||||||||
725,000 | Spansion LLC, 8.36% bank loan, due 11/1/12‡ | 728,625 | |||||||||
Energy - Alternate Sources - 0.1% | |||||||||||
850,000 | Huish Detergent Corp., 0% bank loan, due 4/26/14‡ | 851,063 | |||||||||
Finance - Auto Loans - 0.9% | |||||||||||
Ford Motor Credit Co.: | |||||||||||
843,000 | 9.75%, notes, due 9/15/10 | 892,041 | |||||||||
2,550,000 | 9.81%, notes, due 4/15/12‡ | 2,725,422 | |||||||||
General Motors Acceptance Corp.: | |||||||||||
2,000,000 | 6.125%, notes, due 8/28/07 | 1,997,466 | |||||||||
865,000 | 6.75%, notes, due 12/1/14 | 853,022 | |||||||||
6,467,951 | |||||||||||
Finance - Consumer Loans - 0.2% | |||||||||||
1,579,000 | John Deere Capital Corp., 4.875% notes, due 10/15/10 | 1,569,505 | |||||||||
Finance - Investment Bankers/Brokers - 0.8% | |||||||||||
E*TRADE Financial Corp.: | |||||||||||
770,000 | 8.005%, senior unsecured notes due 6/15/11 | 809,463 | |||||||||
2,190,000 | 7.375%, senior unsecured notes due 9/15/13 | 2,285,812 | |||||||||
Jefferies Group, Inc.: | |||||||||||
805,000 | 5.50%, senior unsecured notes due 3/15/16 | 790,017 | |||||||||
2,235,000 | 6.25%, senior unsecured notes due 1/15/36 | 2,168,127 | |||||||||
6,053,419 | |||||||||||
Finance - Leasing Companies - 0.2% | |||||||||||
1,575,000 | Orix Corp., 5.48% unsubordinated notes, due 11/22/11 | 1,584,007 | |||||||||
Finance - Other Services - 0.4% | |||||||||||
Pinnacle Foods Finance LLC: | |||||||||||
1,800,000 | 0%, bank loan, due 4/2/14‡ | 1,811,250 | |||||||||
925,000 | 9.25%, senior notes, due 4/1/15 (144A) | 925,000 | |||||||||
2,736,250 | |||||||||||
Food - Retail - 0.4% | |||||||||||
Stater Brothers Holdings, Inc.: | |||||||||||
1,010,000 | 8.125%, senior notes, due 6/15/12 | 1,040,300 | |||||||||
1,700,000 | 7.75%, senior notes, due 4/15/15 (144A) | 1,746,750 | |||||||||
2,787,050 |
Shares or Principal Amount | Value | ||||||||||
Foreign Government - 0.4% | |||||||||||
$ | 3,150,000 | Quebec Province, 6.125% unsecured notes, due 1/22/11 | $ | 3,277,736 | |||||||
Gas - Distribution - 0.1% | |||||||||||
1,030,000 | Southern Star Central Corp., 6.00% notes, due 6/1/16 (144A) | 1,044,163 | |||||||||
Independent Power Producer - 0.4% | |||||||||||
NRG Energy, Inc.: | |||||||||||
232,192 | 7.35%, bank loan, due 2/1/13‡ | 233,759 | |||||||||
2,745,371 | 7.35%, bank loan, due 2/1/13‡ | 2,766,538 | |||||||||
3,000,297 | |||||||||||
Investment Management and Advisory Services - 0.9% | |||||||||||
2,095,000 | Ameriprise Financial, Inc., 7.5185% junior subordinated notes, due 6/1/66‡ | 2,273,748 | |||||||||
Nuveen Investments, Inc.: | |||||||||||
2,080,000 | 5.00%, senior unsecured notes, due 9/15/10 | 2,062,135 | |||||||||
2,845,000 | 5.50%, senior unsecured notes, due 9/15/15 | 2,801,769 | |||||||||
7,137,652 | |||||||||||
Life and Health Insurance - 0.5% | |||||||||||
1,340,000 | Americo Life, Inc., 7.875% notes, due 5/1/13 (144A)§ | 1,379,084 | |||||||||
2,520,000 | StanCorp Financial Group, Inc., 6.875% senior notes, due 10/1/12 | 2,673,501 | |||||||||
4,052,585 | |||||||||||
Machinery - Electrical - 0.1% | |||||||||||
826,875 | Baldor Electric Co., 7.125% bank loan, due 1/31/14‡ | 829,769 | |||||||||
Medical - HMO - 0.2% | |||||||||||
1,800,000 | Coventry Health Care, Inc., 5.95% senior unsecured notes, due 3/15/17 | 1,787,935 | |||||||||
Medical - Hospitals - 0.5% | |||||||||||
HCA, Inc.: | |||||||||||
850,000 | 0%, bank loan, due 11/18/13‡ | 858,883 | |||||||||
2,625,000 | 9.25%, secured notes, due 11/15/16 (144A) | 2,861,250 | |||||||||
3,720,133 | |||||||||||
Medical Products - 0% | |||||||||||
75,000 | Encore Medical Finance, 11.75% senior subordinated notes due 11/15/14 (144A) | 78,563 | |||||||||
Metal - Diversified - 0.3% | |||||||||||
Freeport-McMoRan Copper & Gold, Inc.: | |||||||||||
465,840 | 0%, bank loan, due 3/19/14‡ | 467,224 | |||||||||
1,925,000 | 8.375%, senior unsecured notes, due 4/1/17 | 2,105,468 | |||||||||
2,572,692 | |||||||||||
Multi-Line Insurance - 0.6% | |||||||||||
1,325,000 | AXA S.A., 6.379% subordinated notes due 12/14/36 (144A)**,‡ | 1,289,664 | |||||||||
1,775,000 | Catlin Insurance Company, Ltd., 7.249% notes, due 1/19/17 (144A)‡ | 1,789,435 | |||||||||
1,295,000 | Metlife, Inc., 6.40% junior subordinated notes, due 12/15/36 | 1,292,492 | |||||||||
4,371,591 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2007 17
Janus Flexible Bond Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Multimedia - 0.5% | |||||||||||
$ | 1,075,000 | Time Warner, Inc., 6.50% company guaranteed notes, due 11/15/36 | $ | 1,075,807 | |||||||
850,000 | Viacom, Inc., 6.25% senior notes, due 4/30/16 | 862,239 | |||||||||
1,750,000 | VNU, Inc., 0% bank loan, due 5/31/14‡ | 1,765,155 | |||||||||
3,703,201 | |||||||||||
Mutual Insurance - 0.4% | |||||||||||
Liberty Mutual Group: | |||||||||||
1,700,000 | 7.00% bonds, due 3/15/34 (144A)§ | 1,760,806 | |||||||||
900,000 | 7.50%, bonds, due 8/15/36 (144A)§ | 975,794 | |||||||||
2,736,600 | |||||||||||
Non-Hazardous Waste Disposal - 0.7% | |||||||||||
2,900,000 | Allied Waste Industries, Inc., 6.50% secured notes, due 11/15/10 | 2,925,375 | |||||||||
2,400,000 | Waste Management, Inc., 7.375% senior unsubordinated notes, due 8/1/10 | 2,546,741 | |||||||||
5,472,116 | |||||||||||
Office Automation and Equipment - 0.5% | |||||||||||
3,450,000 | Xerox Corp., 6.75% senior unsecured notes, due 2/1/17 | 3,637,632 | |||||||||
Oil Companies - Exploration and Production - 1.1% | |||||||||||
2,110,000 | Kerr-McGee Corp., 6.875% company guaranteed notes, due 9/15/11 | 2,236,176 | |||||||||
1,080,000 | Magnum Hunter Resources, Inc., 9.60% company guaranteed notes, due 3/15/12 | 1,131,840 | |||||||||
Pemex Project Funding Master Trust: | |||||||||||
600,000 | 5.75%, company guaranteed notes due 2/1/22 | 609,300 | |||||||||
500,000 | 8.625%, company guaranteed notes due 2/1/22‡ | 630,500 | |||||||||
2,200,000 | Sabine Pass LNG L.P., 7.50% secured notes, due 11/30/16 (144A) | 2,254,999 | |||||||||
1,325,000 | XTO Energy, Inc., 6.10% senior unsecured notes, due 4/1/36 | 1,303,698 | |||||||||
8,166,513 | |||||||||||
Paper and Related Products - 0.3% | |||||||||||
Georgia Pacific Corporation, Inc.: | |||||||||||
100,012 | 7.09%, bank loan, due 12/20/12‡ | 100,458 | |||||||||
200,025 | 7.09%, bank loan, due 12/20/12‡ | 200,917 | |||||||||
1,600,197 | 7.09%, bank loan, due 12/20/12‡ | 1,607,334 | |||||||||
173,771 | 7.10%, bank loan, due 12/20/12‡ | 174,546 | |||||||||
2,083,255 | |||||||||||
Photo Equipment and Supplies - 0.2% | |||||||||||
Eastman Kodak Co.: | |||||||||||
605,439 | 7.57%, bank loan, due 10/18/12‡ | 606,026 | |||||||||
615,764 | 7.57%, bank loan, due 10/18/12‡ | 616,361 | |||||||||
1,222,387 | |||||||||||
Pipelines - 0.1% | |||||||||||
850,000 | Kinder Morgan Finance Co., 5.70% company guaranteed notes, due 1/5/16 | 814,048 |
Shares or Principal Amount | Value | ||||||||||
Property and Casualty Insurance - 0.7% | |||||||||||
$ | 675,000 | Chubb Corp., 6.375% junior subordinated notes, due 3/29/67‡ | $ | 683,139 | |||||||
3,805,000 | Kingsway America, Inc., 7.50% senior notes, due 2/1/14 | 3,937,388 | |||||||||
905,000 | Markel Corp., 7.35% unsubordinated notes, due 8/15/34 | 974,061 | |||||||||
5,594,588 | |||||||||||
Publishing - Periodicals - 0.5% | |||||||||||
1,475,000 | Dex Media East LLC, 12.125% company guaranteed notes, due 11/15/12 | 1,607,749 | |||||||||
Idearc, Inc.: | |||||||||||
1,022,438 | 7.35%, bank loan, due 11/17/14‡ | 1,028,971 | |||||||||
879,000 | 8.00%, senior notes, due 11/15/16 (144A)§ | 916,358 | |||||||||
3,553,078 | |||||||||||
Real Estate Management/Services - 0.3% | |||||||||||
Realogy Corp.: | |||||||||||
467,727 | 8.32%, bank loan, due 10/10/13‡ | 469,336 | |||||||||
1,737,273 | 8.35%, bank loan, due 10/10/13‡ | 1,745,699 | |||||||||
2,215,035 | |||||||||||
Reinsurance - 0.2% | |||||||||||
1,400,000 | Berkshire Hathaway, Inc., 4.625% company guaranteed notes, due 10/15/13 | 1,357,244 | |||||||||
Retail - Building Products - 0.1% | |||||||||||
730,000 | Home Depot, Inc., 5.25% senior unsecured notes, due 12/16/13 | 725,067 | |||||||||
Retail - Pet Food and Supplies - 0% | |||||||||||
Petco Animal Supplies, Inc.: | |||||||||||
161,688 | 7.85%, bank loan, due 10/28/13‡ | 162,950 | |||||||||
162,500 | 7.855%, bank loan, due 10/28/13‡ | 163,769 | |||||||||
326,719 | |||||||||||
Retail - Regional Department Stores - 0.1% | |||||||||||
Neiman Marcus Group, Inc.: | |||||||||||
4,975 | 7.34625%, bank loan, due 4/6/13‡ | 5,015 | |||||||||
333,304 | 7.34625%, bank loan, due 4/6/13‡ | 336,014 | |||||||||
341,029 | |||||||||||
Satellite Telecommunications - 0.2% | |||||||||||
1,414,000 | INTELSAT Bermuda, Ltd., 7.86% bank loan, due 2/1/14‡ | 1,418,242 | |||||||||
Savings/Loan/Thrifts - 0.1% | |||||||||||
525,000 | Sovereign Bancorp, Inc., 4.80% senior notes, due 9/1/10‡ | 516,799 | |||||||||
Schools - 0.1% | |||||||||||
626,591 | Education Management LLC, 7.375% bank loan, due 6/1/13‡ | 628,941 |
See Notes to Schedules of Investments and Financial Statements.
18 Janus Bond & Money Market Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Special Purpose Entity - 1.1% | |||||||||||
$ | 1,052,000 | JPMorgan Chase Capital XX, 6.55% junior subordinated notes, due 9/29/36 | $ | 1,074,945 | |||||||
KAR Holdings, Inc.: | |||||||||||
125,000 | 8.75%, senior notes, due 5/1/14 (144A) | 128,438 | |||||||||
325,000 | 10.00%, senior subordinated notes due 5/1/15 (144A) | 336,781 | |||||||||
3,250,000 | OneAmerica Financial Partners, 7.00% bonds, due 10/15/33 (144A) | 3,378,140 | |||||||||
975,000 | Petroplus Finance, Ltd., 7.00% company guaranteed notes due 5/1/17 (144A) | 983,531 | |||||||||
1,296,000 | Resona Preferred Securities, Ltd., 7.191% bonds, due 12/29/49 (144A)‡ | 1,369,977 | |||||||||
1,340,000 | Source Gas LLC., 5.90%, senior notes due 4/1/17 (144A)§ | 1,341,970 | |||||||||
8,613,782 | |||||||||||
Specified Purpose Acquisition Company - 0.3% | |||||||||||
1,800,000 | Duke Capital Corp., 6.75% senior notes, due 2/15/32 | 1,851,223 | |||||||||
224,438 | Solar Capital Corp., 7.36% bank loan, due 2/28/14‡ | 226,098 | |||||||||
2,077,321 | |||||||||||
Telecommunication Services - 0.3% | |||||||||||
1,065,000 | Embarq Corp., 7.082% senior unsecured notes, due 6/1/16 | 1,100,293 | |||||||||
750,000 | Qwest Corp., 8.60488% senior notes, due 6/15/13‡ | 820,313 | |||||||||
1,920,606 | |||||||||||
Telephone - Integrated - 0.8% | |||||||||||
2,950,000 | BellSouth Corp., 4.75% senior unsecured notes, due 11/15/12 | 2,880,454 | |||||||||
1,750,000 | Level 3 Communications, Inc., 0% bank loan, due 12/2/11‡ | 1,758,015 | |||||||||
1,275,000 | Telefonica Emisiones S.A.U., 5.984% company guaranteed notes, due 6/20/11** | 1,309,444 | |||||||||
5,947,913 | |||||||||||
Television - 0.2% | |||||||||||
1,750,000 | Univision Communications, 0% bank loan, due 9/29/14‡ | 1,730,313 | |||||||||
Transportation - Railroad - 0.6% | |||||||||||
Burlington Northern Santa Fe Corp.: | |||||||||||
900,000 | 5.65%, unsecured notes, due 5/1/17 | 904,020 | |||||||||
1,350,000 | 6.15%, unsecured notes, due 5/1/37 | 1,360,973 | |||||||||
2,545,000 | Kansas City Southern, 7.50% company guaranteed notes, due 6/15/09 | 2,602,263 | |||||||||
4,867,256 | |||||||||||
Transportation - Services - 0.2% | |||||||||||
1,270,000 | Fedex Corp., 5.50% company guaranteed notes, due 8/15/09 | 1,279,721 | |||||||||
Total Corporate Bonds (cost $200,432,350) | 202,936,442 | ||||||||||
Foreign Bonds - 0.2% | |||||||||||
Cable Television - 0.2% | |||||||||||
EUR | 971,100 | Telenet Communications N.V., 9.00% senior notes, due 12/15/13** (cost $1,246,775) | 1,449,447 |
Shares or Principal Amount | Value | ||||||||||
Mortgage Backed Securities - 41.0% | |||||||||||
U.S. Government Agencies - 41.0% | |||||||||||
Fannie Mae: | |||||||||||
$ | 3,102,003 | 7.00%, due 9/1/14 | $ | 3,200,583 | |||||||
782,061 | 6.50%, due 11/1/17 | 801,414 | |||||||||
2,248,607 | 5.00%, due 11/1/18 | 2,222,363 | |||||||||
1,561,049 | 4.50%, due 5/1/19 | 1,513,923 | |||||||||
4,150,809 | 4.50%, due 5/1/19 | 4,025,502 | |||||||||
4,971,720 | 4.50%, due 5/1/19 | 4,821,631 | |||||||||
4,293,568 | 5.00%, due 8/1/19 | 4,239,008 | |||||||||
521,577 | 5.50%, due 8/1/19 | 522,990 | |||||||||
223,154 | 5.50%, due 9/1/19 | 223,904 | |||||||||
830,336 | 5.50%, due 9/1/19 | 832,586 | |||||||||
580,785 | 4.50%, due 4/1/20 | 562,427 | |||||||||
2,508,485 | 6.00%, due 10/1/21 | 2,549,522 | |||||||||
3,054,246 | 5.50%, due 9/1/24 | 3,042,203 | |||||||||
3,477,586 | 5.00%, due 5/1/25 | 3,390,869 | |||||||||
764,508 | 7.00%, due 11/1/28 | 799,168 | |||||||||
979,460 | 6.50%, due 2/1/31 | 1,011,288 | |||||||||
1,929,147 | 7.00%, due 2/1/32 | 2,016,608 | |||||||||
1,826,691 | 6.50%, due 5/1/32 | 1,886,480 | |||||||||
847,358 | 6.50%, due 7/1/32 | 873,214 | |||||||||
5,738,213 | 6.00%, due 10/1/32 | 5,815,088 | |||||||||
7,268,807 | 5.035%, due 1/1/33 | 7,286,881 | |||||||||
7,926,849 | 5.50%, due 2/1/33 | 7,859,505 | |||||||||
1,434,157 | 6.50%, due 3/1/33 | 1,477,920 | |||||||||
3,111,661 | 4.566%, due 4/1/33 | 3,086,886 | |||||||||
4,216,416 | 5.00%, due 11/1/33 | 4,083,728 | |||||||||
3,221,842 | 5.50%, due 11/1/33 | 3,194,563 | |||||||||
10,052,017 | 5.00%, due 3/1/34 | 9,735,686 | |||||||||
1,612,458 | 5.00%, due 4/1/34 | 1,561,714 | |||||||||
3,867,813 | 5.00%, due 4/1/34 | 3,743,897 | |||||||||
3,480,699 | 5.00%, due 6/1/34 | 3,369,185 | |||||||||
1,478,808 | 5.00%, due 7/1/34 | 1,431,430 | |||||||||
6,139,088 | 6.00%, due 7/1/34 | 6,218,375 | |||||||||
2,150,583 | 6.50%, due 8/1/34 | 2,217,562 | |||||||||
466,108 | 6.50%, due 9/1/34 | 482,064 | |||||||||
906,827 | 5.50%, due 11/1/34 | 898,566 | |||||||||
5,766,417 | 5.50%, due 11/1/34 | 5,713,890 | |||||||||
2,367,734 | 4.605%, due 12/1/34 | 2,351,998 | |||||||||
3,980,356 | 5.50%, due 3/1/35 | 3,941,284 | |||||||||
2,783,485 | 5.00%, due 5/1/35 | 2,691,871 | |||||||||
2,994,361 | 4.50%, due 6/1/35 | 2,815,281 | |||||||||
1,190,782 | 5.00%, due 7/1/35 | 1,151,590 | |||||||||
2,854,935 | 5.50%, due 7/1/35 | 2,826,911 | |||||||||
6,604,428 | 5.50%, due 9/1/35 | 6,539,598 | |||||||||
3,401,541 | 6.00%, due 9/1/35 | 3,435,377 | |||||||||
3,816,513 | 5.50%, due 12/1/35 | 3,779,049 | |||||||||
2,733,541 | 6.00%, due 12/1/35 | 2,756,598 | |||||||||
1,757,263 | 6.50%, due 1/1/36 | 1,794,323 | |||||||||
3,756,591 | 5.50%, due 2/1/36 | 3,719,716 | |||||||||
2,904,016 | 5.50%, due 3/1/36 | 2,875,510 | |||||||||
4,197,421 | 6.00%, due 3/1/36 | 4,230,107 | |||||||||
5,414,098 | 5.50%, due 4/1/36 | 5,360,952 | |||||||||
1,672,250 | 5.50%, due 7/1/36 | 1,654,195 | |||||||||
935,660 | 6.50%, due 7/1/36 | 955,393 | |||||||||
1,199,443 | 6.00%, due 8/1/36 | 1,208,783 | |||||||||
3,268,973 | 6.00%, due 8/1/36 | 3,294,429 | |||||||||
1,923,332 | 6.50%, due 8/1/36 | 1,963,895 | |||||||||
3,961,286 | 6.50%, due 8/1/36 | 4,044,828 | |||||||||
755,779 | 6.50%, due 9/1/36 | 771,718 | |||||||||
2,354,759 | 6.00%, due 10/1/36 | 2,373,095 | |||||||||
6,466,740 | 5.585%, due 11/1/36 | 6,517,034 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2007 19
Janus Flexible Bond Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Fannie Mae: (continued) | |||||||||||
$ | 5,188,858 | 6.00%, due 11/1/36 | $ | 5,229,264 | |||||||
1,690,718 | 6.00%, due 1/1/37 | 1,703,884 | |||||||||
3,415,883 | 6.00%, due 1/1/37 | 3,442,482 | |||||||||
4,427,670 | 6.50%, due 4/1/37 | 4,520,979 | |||||||||
Federal Home Loan Bank System: | |||||||||||
3,964,814 | 5.27%, due 12/28/12 | 3,990,586 | |||||||||
2,678,401 | 5.50%, due 12/1/34 | 2,654,133 | |||||||||
3,218,849 | 5.50%, due 12/1/34 | 3,189,685 | |||||||||
2,352,579 | 6.00%, due 12/1/36 | 2,372,365 | |||||||||
1,799,580 | 5.713%, due 3/1/37 | 1,815,083 | |||||||||
Freddie Mac: | |||||||||||
1,163,957 | 5.50%, due 1/1/16 | 1,169,150 | |||||||||
1,787,939 | 5.50%, due 1/1/18 | 1,795,084 | |||||||||
4,485,250 | 4.50%, due 2/1/18 | 4,358,518 | |||||||||
3,458,143 | 5.00%, due 9/1/18 | 3,417,864 | |||||||||
6,044,358 | 5.75%, due 12/15/18 | 6,097,187 | |||||||||
7,390,315 | 5.50%, due 12/15/19 | 7,419,375 | |||||||||
1,705,123 | 5.00%, due 2/1/20 | 1,681,891 | |||||||||
1,497,970 | 5.50%, due 2/1/21 | 1,500,050 | |||||||||
1,352,543 | 5.00%, due 4/1/21 | 1,333,425 | |||||||||
2,103,030 | 5.50%, due 11/1/33 | 2,085,143 | |||||||||
1,722,094 | 6.00%, due 11/1/33 | 1,744,080 | |||||||||
3,222,469 | 6.00%, due 2/1/34 | 3,264,609 | |||||||||
1,432,705 | 5.00%, due 5/1/34 | 1,387,215 | |||||||||
2,118,353 | 5.00%, due 5/1/34 | 2,052,464 | |||||||||
4,381,844 | 3.756%, due 7/1/34 | 4,266,630 | |||||||||
363,406 | 6.50%, due 7/1/34 | 374,737 | |||||||||
804,791 | 6.50%, due 7/1/34 | 829,894 | |||||||||
6,185,571 | 5.50%, due 6/1/35 | 6,129,527 | |||||||||
383,944 | 6.50%, due 6/1/35 | 394,365 | |||||||||
8,108,782 | 5.00%, due 7/1/35 | 7,844,202 | |||||||||
5,135,545 | 5.00%, due 9/1/35 | 4,967,979 | |||||||||
1,149,194 | 5.50%, due 9/1/35 | 1,137,867 | |||||||||
3,489,138 | 5.50%, due 9/1/35 | 3,454,746 | |||||||||
3,724,093 | 5.50%, due 10/1/35 | 3,694,519 | |||||||||
2,661,723 | 5.00%, due 6/1/36 | 2,574,874 | |||||||||
1,303,311 | 6.50%, due 8/1/36 | 1,331,199 | |||||||||
2,571,169 | 5.00%, due 10/1/36 | 2,485,569 | |||||||||
Ginnie Mae: | |||||||||||
1,447,617 | 6.00%, due 2/15/33 | 1,470,582 | |||||||||
4,639,031 | 6.00%, due 10/20/34 | 4,703,487 | |||||||||
1,648,251 | 6.50%, due 2/20/35 | 1,692,658 | |||||||||
5,138,063 | 5.50%, due 3/20/35 | 5,103,960 | |||||||||
3,669,784 | 5.50%, due 5/20/35 | 3,645,426 | |||||||||
6,695,580 | 5.00%, due 10/15/35 | 6,516,735 | |||||||||
Total Mortgage Backed Securities (cost $313,324,894) | 310,609,630 | ||||||||||
Preferred Stock - 1.1% | |||||||||||
Finance - Other Services - 0.3% | |||||||||||
38,945 | Chevy Chase Preferred Capital Corp. Series A, convertible, 10.375% | 2,071,485 | |||||||||
REIT - Diversified - 0.5% | |||||||||||
96,600 | iStar Financial, Inc., 7.875% | 2,449,775 | |||||||||
52,200 | Lexington Realty Trust, Series D, 7.55% | 1,336,320 | |||||||||
3,786,095 | |||||||||||
Savings/Loan/Thrifts - 0.3% | |||||||||||
91,960 | Chevy Chase Bank FSB, 8.00% | 2,430,503 | |||||||||
Total Preferred Stock (cost $8,388,886) | 8,288,083 |
Shares or Principal Amount | Value | ||||||||||
U.S. Government Agencies - 15.1% | |||||||||||
Fannie Mae: | |||||||||||
$ | 32,095,000 | 5.50%, due 3/15/11# | $ | 32,835,817 | |||||||
20,655,000 | 5.25%, due 8/1/12# | 20,912,836 | |||||||||
6,645,000 | 5.25%, due 9/15/16# | 6,776,272 | |||||||||
11,710,000 | 6.625%, due 11/15/30# | 13,862,895 | |||||||||
Federal Home Loan Bank System: | |||||||||||
4,375,000 | 5.00%, due 2/20/09 | 4,383,597 | |||||||||
13,945,000 | 5.625%, due 6/13/16 | 14,365,079 | |||||||||
Freddie Mac: | |||||||||||
16,542,000 | 5.25%, due 5/21/09# | 16,670,598 | |||||||||
4,575,000 | 5.25%, due 7/18/11# | 4,646,750 | |||||||||
Total U.S. Government Agencies (cost $113,089,112) | 114,453,844 | ||||||||||
U.S. Treasury Notes/Bonds - 12.9% | |||||||||||
U.S. Treasury Notes/Bonds: | |||||||||||
525,000 | 4.75%, due 2/28/09# | 525,779 | |||||||||
900,000 | 4.75%, due 2/15/10# | 904,992 | |||||||||
8,335,000 | 5.125%, due 6/30/11# | 8,527,422 | |||||||||
1,250,000 | 4.75%, due 1/31/12# | 1,262,159 | |||||||||
17,030,000 | 4.625%, due 2/29/12# | 17,107,163 | |||||||||
2,045,000 | 4.50%, due 3/31/12# | 2,043,323 | |||||||||
1,530,000 | 4.50%, due 4/30/12 | 1,529,044 | |||||||||
7,246,000 | 4.625%, due 11/15/16# | 7,241,471 | |||||||||
8,747,000 | 4.625%, due 2/15/17**,# | 8,742,898 | |||||||||
3,110,000 | 8.875%, due 8/15/17 | 4,163,998 | |||||||||
6,145,000 | 8.875%, due 2/15/19# | 8,410,969 | |||||||||
8,705,000 | 7.25%, due 8/15/22# | 10,930,216 | |||||||||
19,836,000 | 6.25%, due 8/15/23# | 22,871,839 | |||||||||
3,445,000 | 4.75%, due 2/15/37# | 3,407,859 | |||||||||
Total U.S. Treasury Notes/Bonds (cost $97,932,978) | 97,669,132 | ||||||||||
Commercial Paper - 2.1% | |||||||||||
16,000,000 | Ford Motor Credit Co., 5.77%, 5/3/07 (cost $15,994,871) | 15,994,871 | |||||||||
Money Markets - 2.2% | |||||||||||
7,538,820 | Janus Institutional Cash Management Fund - Institutional Shares, 5.32% | 7,538,820 | |||||||||
9,408,200 | Janus Institutional Money Market Fund - Institutional Shares, 5.26% | 9,408,200 | |||||||||
Total Money Markets (cost $16,947,020) | 16,947,020 | ||||||||||
Other Securities - 16.2% | |||||||||||
122,427,015 | State Street Navigator Securities Lending Prime Portfolio† (cost $122,427,015) | 122,427,015 | |||||||||
Total Investments (total cost $889,783,901) – 117.6% | 890,775,484 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (17.6)% | (133,159,139 | ) | |||||||||
Net Assets – 100% | $ | 757,616,345 |
See Notes to Schedules of Investments and Financial Statements.
20 Janus Bond & Money Market Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Summary of Investments by Country - (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Belgium | $ | 1,449,447 | 0.2 | % | |||||||
Canada | 6,131,784 | 0.7 | % | ||||||||
Cayman Islands | 2,710,004 | 0.3 | % | ||||||||
China | 983,531 | 0.1 | % | ||||||||
France | 3,144,346 | 0.4 | % | ||||||||
India | 1,636,321 | 0.2 | % | ||||||||
Japan | 1,584,007 | 0.2 | % | ||||||||
Spain | 1,309,444 | 0.1 | % | ||||||||
United Kingdom | 1,129,974 | 0.1 | % | ||||||||
United States†† | 870,696,626 | 97.7 | % | ||||||||
Total | $ | 890,775,484 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (82.1% 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 6/8/07 | 1,025,000 | $ | 1,400,838 | $ | (60,056 | ) | |||||||||
Total | $ | 1,400,838 | $ | (60,056 | ) |
Schedule of Futures Contracts
As of April 30, 2007
Financial Futures - Long
135 Contracts | U.S. Treasury 2 Year Note expires June 2007, principal amount $27,691,828, value $27,637,031 cumulative depreciation | $ | (54,797 | ) |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2007 21
Janus High-Yield Fund (unaudited)
Ticker: JAHYX
Performance Overview
For the six-month period ended April 30, 2007, Janus High-Yield Fund posted a gain of 6.53%, compared to a 6.88% increase of its benchmark, the Lehman Brothers High-Yield Bond Index.
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
Economic Update
Throughout the period, longer term interest rates stayed within the range we expected. The 10-year Treasury fell to a low of nearly 4.40% in early December and increased to a high of almost 4.90% by late January. Equity markets delivered healthy gains during the period amid continued evidence of strong U.S. economic growth with modest inflation. After a brief period of market volatility in late February and early March, markets rebounded quickly on hopes of monetary easing by the Federal Reserve (Fed).
The Fed left its target interest rate unchanged during the period, taking a more neutral stance in late March by removing its reference to "additional firming" from its monetary policy statement. Although the markets took this to indicate a greater potential for a rate cut, the subtle change in the language simply provided the Fed with some flexibility to adjust monetary policy in either direction. Nevertheless, Fed Chairman Ben Bernanke reiterated the committee's concern over inflation's still elevated level and the Fed's view that although the risks of slower economic growth rose, the potential for higher inflation remains the greater risk.
Generally, the pace of U.S. economic growth slowed during the last quarter of 2006, but remained in modest territory. The weak housing market, a slowdown in manufacturing activity and corporate spending, coupled with other pressures facing the consumer brought into question the economy's ability to maintain its upward momentum. On the other hand, the economy remained fundamentally solid as job growth continued to hold steady, which could serve to prolong the current expansion.
Homebuilder Investments Weighed on Results
While the Fund's relative performance benefited from a lack of direct exposure to troubled subprime lenders, the pressures in this market cast a shadow over the fixed-income investments in the homebuilder market. Specifically, homebuilders K. Hovnanian Enterprises and Beazer Homes USA faced concerns over an existing oversupply of new homes for sale, as well as from the possibility that rising foreclosures might flood the market with a supply of existing properties.
Additionally, among our utilities holdings, positions in energy utility TXU experienced downward pressure as concerns that the recent buyout by a private investment firm would add to the company's existing debt load, and could negatively impact credit quality.
Healthcare, Automotive and Gaming Bonds Aided Performance
Performance benefited from exposure to select healthcare names researched by Jason Groom our fixed-income healthcare analyst. These included our investments in HCA, a hospital management company, and HEALTHSOUTH, a provider of surgical, rehabilitation and medical-imaging services. I purchased our HCA bonds following the company's management-led leveraged buyout. The bonds of this asset-heavy, free cash flow generative business subsequently rallied, supporting performance. The position in HEALTHSOUTH, meanwhile, benefited from speculation that the company might use cash generated by the recent sale of non-core assets as tender for some of its outstanding debt.
Results were further supported by exposure to the automotive and gaming sectors. In the automotive sector, Dan Porter's overweight recommendation on Goodyear Tire & Rubber benefited from encouraging news about replacement tire pricing and resolution of labor disputes, as well as from its ongoing efforts to deleverage its balance sheet by paying down debt. Turning to the gaming industry, another Jason Groom pick, Trump Entertainment Resorts bonds gained ground on market anticipation that the casino and hotel company might be sold.
Outlook
Looking ahead, I plan to continue to carefully monitor developments affecting the macro economy and the fixed-income markets. A more resilient than expected economy could prove positive for the high-yield market, while resurgent inflation pressures putting upward pressure on interest rates, could lead to a repricing of risk in the credit markets. The upsurge in activity by private equity firms taking companies
22 Janus Bond & Money Market Funds April 30, 2007
(unaudited)
private demands attention. We are paying very close attention to valuations in the credit markets with a keen focus on the upside/downside relationship on the securities that enter the portfolios. In this environment, with my very strong fixed income team, we will continue to look across the entire credit spectrum for what we believe are the best opportunities in the credit markets.
Thank you for your interest in Janus High-Yield Fund.
Janus High-Yield Fund At a Glance
Fund Profile
April 30, 2007 | |||||||
Weighted Average Maturity | 6.9 Years | ||||||
Average Modified Duration* | 3.5 Years | ||||||
30-Day Current Yield** | 6.89% | ||||||
Weighted Average Fixed Income Credit Rating | B+ | ||||||
Number of Bonds/Notes | 305 |
* A theoretical measure of price volatility
** Yield will fluctuate
Ratings† Summary – (% of Net Assets)
April 30, 2007 | |||||||
AAA | 0.0 | % | |||||
AA | 0.1 | % | |||||
BBB | 2.8 | % | |||||
BB | 20.5 | % | |||||
B | 52.0 | % | |||||
CCC | 13.7 | % | |||||
Other | 10.9 | % |
†Rated by Standard & Poor's
Significant Areas of Investment – (% of Net Assets) | Asset Allocation – (% of Net Assets) | ||||||
As of April 30, 2007 | As of April 30, 2007 | ||||||
![]() | ![]() | ||||||
Emerging markets comprised 0.7% of total net assets.
Janus Bond & Money Market Funds April 30, 2007 23
Janus High-Yield Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | Total Annual Fund Operating Expenses | Net Annual Fund Operating Expenses | |||||||||||||||||||||||||
Janus High-Yield Fund | 6.53 | % | 11.07 | % | 8.36 | % | 7.12 | % | 8.49 | % | 0.94 | % | 0.92 | % | |||||||||||||||||
Lehman Brothers High-Yield Bond Index | 6.88 | % | 12.33 | % | 10.32 | % | 6.77 | % | 7.17 | % | |||||||||||||||||||||
Lipper Quartile | – | 2 | nd | 3 | rd | 1 | st | 1 | st | ||||||||||||||||||||||
Lipper Ranking - based on total return for High Current Yield Funds | – | 174/443 | 209/308 | 20/127 | 5/99 |
Visit janus.com to view current performance and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
A 2% redemption fee may be imposed on shares held for 3 months or less. Effective with purchases on and after May 15, 2007, a 2% redemption fee may be imposed on shares held for 90 days or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.
Janus Capital has contractually agreed to waive the Fund's total operating expenses (excluding brokerage commissions, interest, taxes, and extraordinary expenses) to a certain limit until at least March 1, 2008. The expense waiver shown reflects the application of such limit and is detailed in the Statement of Additional Information. Total returns and yields shown include fee waivers, if any, and without such waivers, the Fund's yield and total returns would have been lower.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. Contractual waivers agreed to by Janus Capital are included under "Net Annual Fund Operating Expenses." All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
Funds that invest in bonds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds owned by the Fund. Unlike owning individual bonds, there are ongoing fees and expenses associated with owning shares of bond funds. The return of principal is not guaranteed due to net asset value fluctuation that is caused by changes in the price of specific bonds held in the Fund and selling of bonds within the Fund by the portfolio manager.
High-yield/high-risk bonds involve a greater risk of default and price volatility than U.S. Government and other high-quality bonds. High-yield/high-risk bonds can experience sudden and sharp price swings which will affect net asset value.
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.
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.
December 31, 1995 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the 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.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – December 29, 1995
24 Janus Bond & Money Market Funds April 30, 2007
(unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,065.30 | $ | 4.46 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.48 | $ | 4.36 |
*Expenses are equal to the annualized expense ratio of 0.87%, 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.
Janus Bond & Money Market Funds April 30, 2007 25
Janus High-Yield Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Corporate Bonds - 92.9% | |||||||||||
Advanced Materials/Products - 0.1% | |||||||||||
$ | 350,000 | Foamex L.P., 10.10563% bank loan, due 2/14/13‡ | $ | 354,375 | |||||||
Advertising Services - 1.1% | |||||||||||
Penton Media Inc.: | |||||||||||
1,016,129 | 7.595%, bank loan, due 2/1/13‡ | 1,020,153 | |||||||||
33,871 | 7.60%, bank loan, due 2/1/13‡ | 34,005 | |||||||||
1,950,000 | 7.10%, bank loan, due 2/1/14‡ | 1,965,854 | |||||||||
R.H. Donnelley Corp.: | |||||||||||
1,274,000 | 6.875%, senior discount notes due 1/15/13 | 1,262,853 | |||||||||
2,208,000 | 6.875%, senior discount notes due 1/15/13# | 2,188,679 | |||||||||
6,471,544 | |||||||||||
Aerospace and Defense - Equipment - 0.2% | |||||||||||
1,282,000 | DRS Technologies, Inc., 6.875% company guaranteed notes, due 11/1/13 | 1,294,820 | |||||||||
Agricultural Chemicals - 0.4% | |||||||||||
2,168,000 | Mosaic Global Holdings, Inc., 7.625% senior notes, due 12/1/16 (144A)# | 2,314,340 | |||||||||
Airlines - 0.5% | |||||||||||
2,250,000 | Continental Airlines, Inc., 8.75% unsubordinated notes, due 12/1/11# | 2,221,875 | |||||||||
550,000 | Delta Air Lines, Inc., 0% bank loan, due 4/24/14‡ | 556,875 | |||||||||
297,000 | US Airways Group, Inc., 0% bank loan, due 3/23/14‡ | 298,485 | |||||||||
3,077,235 | |||||||||||
Apparel Manufacturers - 2.1% | |||||||||||
4,350,000 | Hanesbrands, Inc., 8.735% senior notes, due 12/15/14 (144A)**,‡ | 4,469,624 | |||||||||
Levi Strauss & Co.: | |||||||||||
2,244,000 | 9.75%, senior unsubordinated notes due 1/15/15# | 2,462,790 | |||||||||
3,164,000 | 8.875%, senior unsecured notes due 4/1/16# | 3,397,345 | |||||||||
2,150,000 | Quiksilver, Inc., 6.875% company guaranteed notes, due 4/15/15# | 2,096,250 | |||||||||
12,426,009 | |||||||||||
Athletic Equipment - 0.2% | |||||||||||
1,075,000 | Easton-Bell Sports, Inc., 8.375% company guaranteed notes, due 10/1/12 | 1,069,625 | |||||||||
Automotive - Cars and Light Trucks - 3.1% | |||||||||||
Ford Motor Co.: | |||||||||||
275,000 | 8.36%, bank loan, due 12/15/13‡ | 276,548 | |||||||||
6,383,000 | 7.45%, unsecured notes, due 7/16/31# | 5,050,549 | |||||||||
1,200,000 | 4.25%, senior notes, due 12/15/36 | 1,350,000 | |||||||||
General Motors Corp.: | |||||||||||
5,802,000 | 7.125%, senior notes, due 7/15/13# | 5,359,597 | |||||||||
947,625 | 7.725%, bank loan, due 11/29/13‡ | 954,145 | |||||||||
6,463,000 | 8.375%, senior unsubordinated notes due 7/15/33# | 5,840,935 | |||||||||
18,831,774 |
Shares or Principal Amount | Value | ||||||||||
Automotive - Truck Parts and Equipment - Original - 3.3% | |||||||||||
$ | 2,284,000 | Accuride Corp., 8.50% company guaranteed notes, due 2/1/15 | $ | 2,358,230 | |||||||
2,675,000 | American Axle & Manufacturing, Inc. 7.875%, company guaranteed notes due 3/1/17 | 2,681,688 | |||||||||
TRW Automotive, Inc.: | |||||||||||
2,620,000 | 7.00%, company guaranteed notes due 3/15/14 (144A)# | 2,593,800 | |||||||||
3,925,000 | 7.25%, company guaranteed notes due 3/15/17 (144A) | 3,895,562 | |||||||||
7,454,000 | Visteon Corp., 8.25% senior unsecured notes, due 8/1/10 | 7,603,079 | |||||||||
19,132,359 | |||||||||||
Building - Heavy Construction - 0.4% | |||||||||||
2,247,000 | Ahern Rentals, Inc., 9.25% secured notes, due 8/15/13 | 2,342,498 | |||||||||
Building - Residential and Commercial - 1.0% | |||||||||||
Beazer Homes USA, Inc.: | |||||||||||
1,200,000 | 8.625%, company guaranteed notes due 5/15/11 | 1,204,500 | |||||||||
629,000 | 6.875%, company guaranteed notes due 7/15/15# | 578,680 | |||||||||
K. Hovnanian Enterprises, Inc.: | |||||||||||
1,049,000 | 6.50%, company guaranteed notes due 1/15/14# | 965,080 | |||||||||
1,382,000 | 6.25%, company guaranteed notes due 1/15/15# | 1,254,165 | |||||||||
500,000 | 7.50%, company guaranteed notes due 5/15/16# | 480,000 | |||||||||
1,382,000 | 8.625%, senior notes, due 1/15/17# | 1,388,910 | |||||||||
5,871,335 | |||||||||||
Building and Construction Products - Miscellaneous - 1.1% | |||||||||||
Building Materials Corporation of America: | |||||||||||
898,375 | 8.1875%, bank loan, due 2/22/14‡ | 891,260 | |||||||||
2,800,000 | 7.75%, company guaranteed notes due 8/1/14# | 2,771,999 | |||||||||
325,000 | 11.125%, bank loan, due 9/14/14‡ | 319,719 | |||||||||
991,000 | Nortek, Inc., 8.50% senior subordinated notes, due 9/1/14# | 978,613 | |||||||||
2,094,000 | Ply Gem Industries, Inc., 9.00% company guaranteed notes, due 2/15/12# | 1,889,835 | |||||||||
6,851,426 | |||||||||||
Cable Television - 1.4% | |||||||||||
2,614,000 | CCH I LLC, 11.00% secured notes, due 10/1/15 | 2,777,375 | |||||||||
4,500,000 | Charter Communications Operating LLC 8.00%, senior notes, due 4/30/12 (144A) | 4,713,750 | |||||||||
1,024,000 | CSC Holdings, Inc., 7.25% senior notes, due 4/15/12 (144A)‡ | 1,022,720 | |||||||||
8,513,845 | |||||||||||
Casino Hotels - 3.2% | |||||||||||
Green Valley Ranch Gaming: | |||||||||||
674,546 | 7.36%, bank loan, due 2/16/14‡ | 677,359 | |||||||||
2,526,000 | 8.61%, bank loan, due 8/6/14‡ | 2,549,290 |
See Notes to Schedules of Investments and Financial Statements.
26 Janus Bond & Money Market Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Casino Hotels - (continued) | |||||||||||
Majestic Star Casino LLC: | |||||||||||
$ | 350,000 | 9.50%, company guaranteed notes due 10/15/10 | $ | 368,375 | |||||||
3,950,000 | 9.75%, senior unsecured notes, due 1/15/11# | 3,791,999 | |||||||||
696,000 | Mandalay Resort Group, 10.25% senior subordinated notes, due 8/1/07 | 702,960 | |||||||||
1,044,000 | MGM Mirage, Inc., 9.75% company guaranteed notes, due 6/1/07 | 1,047,915 | |||||||||
1,224,000 | MTR Gaming Group, Inc., 9.75% company guaranteed notes, due 4/1/10 | 1,285,200 | |||||||||
350,000 | Poster Financial Group, Inc., 8.75% secured notes, due 12/1/11 | 364,000 | |||||||||
500,000 | Seminole Hard Rock Entertainment 7.8475%, secured notes due 3/15/14 (144A)‡ | 512,500 | |||||||||
7,770,000 | Trump Entertainment Resorts, Inc., 8.50% secured notes, due 6/1/15# | 7,818,562 | |||||||||
19,118,160 | |||||||||||
Casino Services - 1.1% | |||||||||||
Virgin River Casino Corp.: | |||||||||||
4,648,000 | 9.00%, company guaranteed notes due 1/15/12‡,# | 4,857,160 | |||||||||
2,317,000 | 0%, senior subordinated notes due 1/15/13‡ | 1,784,090 | |||||||||
6,641,250 | |||||||||||
Cellular Telecommunications - 2.2% | |||||||||||
Centennial Communications Corp.: | |||||||||||
1,262,000 | 10.00%, senior notes, due 1/1/13# | 1,366,115 | |||||||||
1,768,000 | 10.125%, company guaranteed notes due 6/15/13 | 1,909,440 | |||||||||
3,350,000 | Cricket Communications, Inc., 9.375% senior notes, due 11/1/14 (144A)# | 3,576,124 | |||||||||
710,000 | Dobson Cellular Systems, Inc. 9.875%, secured notes, due 11/1/12 | 775,675 | |||||||||
Dobson Communications Corp.: | |||||||||||
1,036,000 | 9.61%, senior notes, due 10/15/12‡ | 1,067,080 | |||||||||
1,441,000 | 8.875%, senior notes, due 10/1/13# | 1,486,031 | |||||||||
1,420,000 | Rogers Wireless Communications, Inc. 8.47988%, company guaranteed notes due 12/15/10‡ | 1,448,400 | |||||||||
1,422,000 | Suncom Wireless Holdings, Inc., 8.50% company guaranteed notes, due 6/1/13# | 1,484,213 | |||||||||
13,113,078 | |||||||||||
Chemicals - Diversified - 2.0% | |||||||||||
3,270,000 | Ineos Group Holdings PLC, 8.50% senior subordinated notes due 2/15/16 (144A)# | 3,163,725 | |||||||||
1,550,000 | Innophos Holdings, Inc., 9.50% senior unsecured notes due 4/15/12 (144A)§ | 1,573,250 | |||||||||
Lyondell Chemical Co.: | |||||||||||
4,552,000 | 11.125%, company guaranteed notes due 7/15/12# | 4,847,879 | |||||||||
1,085,000 | 8.00%, company guaranteed notes due 9/15/14# | 1,136,538 | |||||||||
1,417,000 | 8.25%, company guaranteed notes due 9/15/16# | 1,516,190 | |||||||||
12,237,582 |
Shares or Principal Amount | Value | ||||||||||
Chemicals - Other - 0.3% | |||||||||||
$ | 1,885,000 | Innophos, Inc., 8.875% company guaranteed note, due 8/15/14‡,# | $ | 1,974,538 | |||||||
Chemicals - Specialty - 1.0% | |||||||||||
1,583,000 | Macdermid, Inc., 9.50% senior subordinated notes due 4/15/17 (144A) | 1,642,363 | |||||||||
3,145,000 | Momentive Performance, 9.75% senior notes, due 12/1/14 (144A) | 3,325,837 | |||||||||
1,261,000 | Nalco Co., 7.75% senior unsecured notes, due 11/15/11# | 1,298,830 | |||||||||
6,267,030 | |||||||||||
Coal - 0.2% | |||||||||||
325,000 | Arch West Finance, 6.75% company guaranteed notes, due 7/1/13‡ | 322,563 | |||||||||
675,000 | Peabody Energy Corp., 5.875% company guaranteed notes, due 4/15/16 | 646,312 | |||||||||
968,875 | |||||||||||
Commercial Services - Finance - 0.3% | |||||||||||
1,726,000 | Ipayment, Inc., 9.75% company guaranteed notes, due 5/15/14 | 1,797,198 | |||||||||
Computer Services - 0.8% | |||||||||||
SunGard Data Systems, Inc.: | |||||||||||
600,000 | 9.125%, company guaranteed notes due 8/15/13 | 643,500 | |||||||||
3,517,000 | 10.25%, company guaranteed notes due 8/15/15# | 3,868,700 | |||||||||
4,512,200 | |||||||||||
Computers - Memory Devices - 0.5% | |||||||||||
2,418,000 | EMC Corp., 1.75% convertible senior unsecured notes due 12/1/11 (144A) | 2,705,138 | |||||||||
Consumer Products - Miscellaneous - 1.2% | |||||||||||
1,235,000 | Amscan Holdings, Inc., 8.75% senior subordinated notes, due 5/1/14 | 1,244,263 | |||||||||
1,225,000 | Jarden Corp., 7.50% company guaranteed notes, due 5/1/17 | 1,254,094 | |||||||||
4,608,000 | Visant Holding Corp., 8.75% senior notes, due 12/1/13 | 4,849,919 | |||||||||
7,348,276 | |||||||||||
Containers - Metal and Glass - 1.4% | |||||||||||
1,378,000 | Greif, Inc., 6.75% senior notes, due 2/1/17 (144A)# | 1,402,115 | |||||||||
Owens-Brockway Glass Container, Inc.: | |||||||||||
2,769,000 | 8.875%, company guaranteed notes due 2/15/09 | 2,824,380 | |||||||||
820,000 | 8.25%, company guaranteed notes due 5/15/13# | 865,100 | |||||||||
1,350,000 | 6.75%, company guaranteed notes due 12/1/14# | 1,358,438 | |||||||||
1,864,000 | Owens-Illinois, Inc., 8.10% senior notes, due 5/15/07 | 1,864,000 | |||||||||
8,314,033 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2007 27
Janus High-Yield Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Containers - Paper and Plastic - 2.0% | |||||||||||
Graham Packaging Co.: | |||||||||||
$ | 1,720,000 | 8.50%, company guaranteed notes due 10/15/12 | $ | 1,754,400 | |||||||
3,839,000 | 9.875%, company guaranteed notes due 10/15/14# | 3,973,365 | |||||||||
Smurfit-Stone Container Corp.: | |||||||||||
5,389,000 | 7.375%, company guaranteed notes, due 7/15/14# | 5,294,692 | |||||||||
975,000 | 8.00%, senior notes, due 3/15/17 (144A) | 970,125 | |||||||||
11,992,582 | |||||||||||
Cosmetics and Toiletries - 0.2% | |||||||||||
1,275,000 | Chattem, Inc., 7.00% senior subordinated notes, due 3/1/14# | 1,275,000 | |||||||||
Direct Marketing - 0.6% | |||||||||||
3,516,000 | Affinion Group, Inc., 11.50% company guaranteed notes, due 10/15/15 | 3,867,600 | |||||||||
Distribution/Wholesale - 0.4% | |||||||||||
2,199,000 | Nebraska Book Company, Inc., 8.625% company guaranteed notes, due 3/15/12 | 2,215,493 | |||||||||
Diversified Operations - 1.3% | |||||||||||
Clarke American Corp.: | |||||||||||
570,000 | 10.10625%, senior notes due 5/15/15 (144A) | 570,000 | |||||||||
750,000 | 9.50%, senior notes, due 5/15/15 (144A) | 756,563 | |||||||||
1,037,000 | Covalence Specialty Materials Corp., 10.25% senior subordinated notes due 3/1/16 (144A)# | 1,060,332 | |||||||||
Jacuzzi Brands, Inc.: | |||||||||||
12,162 | 5.25%, bank loan, due 2/7/14‡ | 12,162 | |||||||||
97,297 | 7.59788%, bank loan, due 2/7/14‡ | 97,054 | |||||||||
20,270 | 7.61%, bank loan, due 2/7/14‡ | 20,220 | |||||||||
20,270 | 7.62875%, bank loan, due 2/7/14‡ | 20,220 | |||||||||
466,667 | 11.34788%, bank loan 8/7/14‡ | 463,167 | |||||||||
216,667 | 11.34788%, bank loan, due 8/7/14‡ | 215,042 | |||||||||
170,833 | 11.36%, bank loan, due 8/7/14‡ | 169,552 | |||||||||
170,833 | 11.37875%, bank loan, due 8/7/14‡ | 169,552 | |||||||||
1,572,000 | Park-Ohio Industries, Inc., 8.375% company guaranteed notes, due 11/15/14# | 1,556,279 | |||||||||
2,715,000 | Travelport Holdings, Ltd., 12.35% bank loan, due 3/27/12‡ | 2,667,488 | |||||||||
7,777,631 | |||||||||||
Diversified Operations - Commercial Services - 1.2% | |||||||||||
Aramark Corp.: | |||||||||||
4,116,000 | 8.50% senior notes, due 2/1/15 (144A)# | 4,306,365 | |||||||||
2,769,000 | 8.86% senior notes, due 2/1/15 (144A)‡ | 2,845,148 | |||||||||
7,151,513 | |||||||||||
Educational Software - 0.2% | |||||||||||
1,196,979 | Riverdeep Interactive Learning, 8.10% bank loan, due 12/20/13‡ | 1,202,462 | |||||||||
Electric - Generation - 0.7% | |||||||||||
2,716,000 | Edison Mission Energy, 7.73% senior notes, due 6/15/09# | 2,851,800 | |||||||||
1,356,526 | Tenaska Alabama II Partners, 7.00% secured notes, due 6/30/21 (144A)‡ | 1,372,233 | |||||||||
4,224,033 |
Shares or Principal Amount | Value | ||||||||||
Electric - Integrated - 1.2% | |||||||||||
$ | 2,178,000 | CMS Energy Corp., 7.50% senior notes, due 1/15/09# | $ | 2,240,618 | |||||||
3,833,000 | Mission Energy Holding, Inc., 13.50% secured notes, due 7/15/08 | 4,187,552 | |||||||||
774,000 | Nevada Power Co., 5.875% general refunding mortgage, due 1/15/15 | 779,874 | |||||||||
7,208,044 | |||||||||||
Electronic Components - Miscellaneous - 0.4% | |||||||||||
NXP BV: | |||||||||||
500,000 | 7.875%, secured notes due 10/15/14 (144A) | 520,000 | |||||||||
1,744,000 | 9.50%, senior notes, due 10/15/15 (144A)# | 1,831,200 | |||||||||
2,351,200 | |||||||||||
Electronic Components - Semiconductors - 0.9% | |||||||||||
Spansion LLC: | |||||||||||
700,000 | 8.36%, bank loan, due 11/1/12‡ | 703,500 | |||||||||
3,456,000 | 11.25%, senior notes, due 1/15/16 (144A)# | 3,576,960 | |||||||||
1,723,000 | 2.25%, senior subordinate notes due 6/15/16 (144A)# | 1,391,323 | |||||||||
5,671,783 | |||||||||||
Energy - Alternate Sources - 0.1% | |||||||||||
250,000 | Huish Detergent Corp., 0% bank loan, due 10/26/14‡ | 254,063 | |||||||||
Sandridge Energy, Inc.: | |||||||||||
350,000 | 8.625%, bank loan, due 4/1/14‡ | 358,750 | |||||||||
350,000 | 8.975%, bank loan, due 4/1/15‡ | 360,500 | |||||||||
973,313 | |||||||||||
Finance - Auto Loans - 4.5% | |||||||||||
Ford Motor Credit Co.: | |||||||||||
3,869,000 | 6.625%, senior unsecured notes due 6/16/08# | 3,866,787 | |||||||||
3,166,000 | 7.375%, unsecured notes, due 10/28/09 | 3,168,450 | |||||||||
1,188,000 | 9.75%, senior secured notes, 9/15/10 | 1,257,111 | |||||||||
3,908,000 | 9.81%, notes, due 4/15/12‡,# | 4,176,843 | |||||||||
1,388,000 | 7.00%, notes, due 10/1/13# | 1,312,484 | |||||||||
General Motors Acceptance Corp.: | |||||||||||
1,207,000 | 5.85%, senior unsubordinated notes due 1/14/09 | 1,193,571 | |||||||||
4,544,000 | 7.75%, unsubordinated notes due 1/19/10# | 4,660,585 | |||||||||
1,727,000 | 7.25%, notes, due 3/2/11 | 1,755,839 | |||||||||
1,425,000 | 6.75%, notes, due 12/1/14 | 1,405,268 | |||||||||
4,165,000 | 8.00%, bonds, due 11/1/31 | 4,470,440 | |||||||||
27,267,378 | |||||||||||
Finance - Other Services - 0.6% | |||||||||||
Pinnacle Foods Finance LLC: | |||||||||||
2,459,000 | 7.10%, bank loan, due 4/1/14‡ | 2,474,369 | |||||||||
1,282,000 | 10.625%, senior subordinate notes due 4/1/17 (144A)# | 1,285,205 | |||||||||
3,759,574 | |||||||||||
Food - Diversified - 1.5% | |||||||||||
2,602,000 | Del Monte Corp., 6.75% company guaranteed notes due 2/15/15# | 2,608,505 |
See Notes to Schedules of Investments and Financial Statements.
28 Janus Bond & Money Market Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Food - Diversified - (continued) | |||||||||||
Dole Food Company, Inc.: | |||||||||||
$ | 1,066,000 | 8.625%, senior notes, due 5/1/09‡,# | $ | 1,081,990 | |||||||
5,352,000 | 8.75%, debentures, due 7/15/13‡,# | 5,325,240 | |||||||||
9,015,735 | |||||||||||
Food - Meat Products - 0.5% | |||||||||||
1,333,000 | National Beef Packing Company LLC 10.50%, senior unsecured notes due 8/1/11 | 1,402,983 | |||||||||
1,495,000 | Pierre Foods, Inc., 9.875% senior subordinated notes due 7/15/12# | 1,551,062 | |||||||||
2,954,045 | |||||||||||
Food - Retail - 0.3% | |||||||||||
1,550,000 | Stater Brothers Holdings, 7.75% senior notes, due 4/15/15 (144A) | 1,592,625 | |||||||||
Food - Wholesale/Distribution - 0.5% | |||||||||||
2,635,000 | Supervalu, Inc., 7.50% senior unsecured notes, due 11/15/14 | 2,753,575 | |||||||||
Gambling - Non-Hotel - 1.5% | |||||||||||
2,417,000 | Jacobs Entertainment, Inc., 9.75% company guaranteed notes, due 6/15/14 | 2,549,935 | |||||||||
1,399,000 | Mohegan Tribal Gaming Authority, 8.00% senior subordinated notes, due 4/1/12 | 1,447,965 | |||||||||
2,079,000 | Pinnacle Entertainment, Inc., 8.25% senior subordinated notes, due 3/15/12 | 2,136,173 | |||||||||
696,000 | Pokagon Gaming Authority, 10.375% senior notes, due 6/15/14 (144A) | 779,520 | |||||||||
2,048,000 | River Rock Entertainment Authority, 9.75% secured notes, due 11/1/11 | 2,168,320 | |||||||||
9,081,913 | |||||||||||
Housewares - 0.3% | |||||||||||
1,445,000 | Libbey Glass, Inc., 12.34813% secured notes, due 6/1/11 | 1,589,500 | |||||||||
Independent Power Producer - 1.7% | |||||||||||
1,700,000 | AES China Generating Company, Ltd. 8.25%, bonds, due 6/26/10 | 1,697,707 | |||||||||
280,000 | Calpine Corp., 7.59% bank loan, due 3/29/09‡ | 281,487 | |||||||||
NRG Energy, Inc.: | |||||||||||
854,759 | 7.35%, bank loan, due 2/1/13‡ | 861,349 | |||||||||
221,929 | 7.35%, bank loan, due 2/1/13‡ | 223,427 | |||||||||
6,479,000 | 7.375%, company guaranteed notes due 2/1/16 | 6,730,060 | |||||||||
450,000 | Reliant Energy, Inc., 9.25% secured notes, due 7/15/10 | 471,938 | |||||||||
10,265,968 | |||||||||||
Machinery - Electrical - 0.1% | |||||||||||
661,500 | Baldor Electric Co., 0% bank loan, due 12/31/13‡ | 663,815 | |||||||||
Medical - Hospitals - 3.4% | |||||||||||
HCA, Inc.: | |||||||||||
1,546,125 | 7.60%, bank loan, due 11/18/13‡ | 1,562,282 | |||||||||
1,350,000 | 6.50%, senior unsecured notes due 2/15/16# | 1,176,188 | |||||||||
9,536,000 | 9.25%, secured notes due 11/15/16 (144A)** | 10,394,239 |
Shares or Principal Amount | Value | ||||||||||
Medical - Hospitals - (continued) | |||||||||||
$ | 6,010,000 | Tenet Healthcare Corp., 9.25% senior unsecured notes, due 2/1/15‡,# | $ | 6,009,999 | |||||||
1,050,000 | Triad Hospitals, Inc., 7.00% senior notes, due 5/15/12 | 1,092,000 | |||||||||
297,000 | United Surgical Partners, 8.875% senior subordinated notes due 5/1/17 (144A) | 305,539 | |||||||||
20,540,247 | |||||||||||
Medical - Nursing Homes - 0.1% | |||||||||||
612,000 | Manor Care, Inc., 2.00% senior notes, due 6/1/36 | 818,550 | |||||||||
Medical - Outpatient and Home Medical Care - 0.5% | |||||||||||
1,149,000 | CRC Health Corp., 10.75% company guaranteed notes, due 2/1/16# | 1,258,154 | |||||||||
National Mentor Holdings, Inc.: | |||||||||||
59,158 | 5.32%, bank loan, due 6/29/13‡ | 59,158 | |||||||||
369 | 7.35%, bank loan, due 6/29/13‡ | 370 | |||||||||
643,987 | 7.35%, bank loan, due 6/29/13‡ | 644,792 | |||||||||
333,062 | 7.36%, bank loan, due 6/30/13‡ | 333,479 | |||||||||
702,000 | 11.25%, company guaranteed notes due 7/1/14 | 772,200 | |||||||||
3,068,153 | |||||||||||
Medical Imaging Systems - 0% | |||||||||||
125,000 | Carestream Health, Inc., 7.10% bank loan, due 10/30/13‡ | 126,250 | |||||||||
Medical Products - 0% | |||||||||||
125,000 | Encore Medical Finance, 11.75% senior subordinated notes due 11/15/14 (144A) | 130,938 | |||||||||
Metal - Diversified - 1.1% | |||||||||||
Freeport-McMoRan Copper & Gold, Inc.: | |||||||||||
336,440 | 7.10%, bank loan, due 3/19/14‡ | 337,439 | |||||||||
1,300,000 | 8.25%, senior unsecured notes due 4/1/15‡,# | 1,405,625 | |||||||||
2,100,000 | 8.56438%, senior unsecured notes due 4/1/15‡ | 2,215,500 | |||||||||
2,500,000 | 8.375%, senior unsecured notes due 4/1/17 | 2,734,375 | |||||||||
6,692,939 | |||||||||||
Metal Products - Fasteners - 0.6% | |||||||||||
3,174,000 | FastenTech, Inc., 12.50% company guaranteed notes, due 5/1/11‡,# | 3,368,408 | |||||||||
Miscellaneous Manufacturing - 0.4% | |||||||||||
2,384,000 | Nutro Products, Inc., 10.75% senior subordinated notes due 4/15/14 (144A) | 2,527,040 | |||||||||
Motion Pictures and Services - 0% | |||||||||||
275,000 | Metro-Goldwyn-Mayer, Inc., 0% bank loan, due 4/8/12‡ | 275,000 | |||||||||
Multimedia - 0.3% | |||||||||||
1,903,000 | LBI Media, Inc., 10.125% company guaranteed notes, due 7/15/12 | 2,002,908 | |||||||||
Music - 0.5% | |||||||||||
2,871,000 | Steinway Musical Instruments, Inc. 7.00%, senior notes, due 3/1/14 (144A)§ | 2,842,290 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2007 29
Janus High-Yield Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Non-Hazardous Waste Disposal - 0.8% | |||||||||||
Allied Waste Industries, Inc.: | |||||||||||
$ | 1,761,000 | 6.375%, secured notes, due 4/15/11# | $ | 1,765,403 | |||||||
1,135,000 | 7.875%, senior notes, due 4/15/13 | 1,186,075 | |||||||||
1,982,000 | 7.25%, company guaranteed notes due 3/15/15 | 2,036,505 | |||||||||
4,987,983 | |||||||||||
Office Automation and Equipment - 0.3% | |||||||||||
Xerox Corp.: | |||||||||||
1,124,000 | 6.875%, senior unsecured notes due 8/15/11 | 1,177,390 | |||||||||
592,000 | 6.40%, company guaranteed notes due 3/15/16# | 609,974 | |||||||||
1,787,364 | |||||||||||
Office Supplies and Forms - 1.2% | |||||||||||
7,185,000 | Acco Brands Corp., 7.625% company guaranteed notes, due 8/15/15 | 7,328,700 | |||||||||
Oil - Field Services - 0.3% | |||||||||||
699,000 | Hornbeck Offshore Services, Inc., 6.125% company guaranteed notes, due 12/1/14 | 672,788 | |||||||||
1,055,000 | Titan Petrochemicals Group, Ltd., 8.50% company guaranteed notes due 3/18/12 (144A)§ | 1,020,712 | |||||||||
1,693,500 | |||||||||||
Oil Companies - Exploration and Production - 4.4% | |||||||||||
4,676,000 | Chaparral Energy, Inc., 8.875% senior notes, due 2/1/17 (144A) | 4,792,899 | |||||||||
600,000 | Cimarex Energy Co., 7.125% senior notes, due 5/1/17 | 606,000 | |||||||||
Encore Acquisition Co.: | |||||||||||
2,813,000 | 6.25%, company guaranteed notes due 4/15/14 | 2,623,123 | |||||||||
1,200,000 | 7.25%, company guaranteed notes due 12/1/17 | 1,161,000 | |||||||||
2,399,000 | Forest Oil Corp., 8.00% senior unsecured notes, due 6/15/08 | 2,452,978 | |||||||||
2,450,000 | Hilcorp Energy Finance, 7.75% senior unsecured notes, due 11/1/15 (144A) | 2,462,250 | |||||||||
700,000 | Hilcorp Energy I, 9.00% senior notes, due 6/1/16 (144A)# | 749,000 | |||||||||
674,000 | Magnum Hunter Resources, Inc., 9.60% company guaranteed notes, due 3/15/12 | 706,352 | |||||||||
2,418,000 | Petrohawk Energy Corp., 9.125% company guaranteed note, due 7/15/13# | 2,590,283 | |||||||||
1,000,000 | Plains Exploration & Production Co., 7.00% company guaranteed notes, due 3/15/17 | 1,001,250 | |||||||||
3,520,000 | Quicksilver Resources, Inc., 7.125% company guaranteed notes, due 4/1/16 | 3,502,399 | |||||||||
2,775,000 | Stone Energy Corp., 8.25% senior subordinated notes, due 12/15/11# | 2,761,125 | |||||||||
700,000 | Swift Energy Co., 9.375% senior unsecured notes, due 5/1/12# | 731,500 | |||||||||
575,000 | Venoco, Inc., 8.75% senior unsecured notes, due 12/15/11# | 586,500 | |||||||||
26,726,659 | |||||||||||
Oil Field Machinery and Equipment - 0.2% | |||||||||||
1,205,000 | Dresser-Rand Group, Inc., 7.625% company guaranteed notes, due 11/1/14‡ | 1,229,100 |
Shares or Principal Amount | Value | ||||||||||
Paper and Related Products - 1.9% | |||||||||||
$ | 3,861,000 | Boise Cascade LLC, 7.125% company guaranteed notes, due 10/15/14# | $ | 3,841,694 | |||||||
Georgia Pacific Corporation, Inc.: | |||||||||||
187,235 | 7.09%, bank loan, due 12/20/12‡ | 188,071 | |||||||||
1,497,884 | 7.09%, bank loan, due 12/20/12‡ | 1,504,564 | |||||||||
93,618 | 7.09%, bank loan, due 12/20/12‡ | 94,035 | |||||||||
162,661 | 7.10%, bank loan, due 12/20/12‡ | 163,386 | |||||||||
1,400,000 | 7.125%, company guaranteed notes due 1/15/17 (144A) | 1,407,000 | |||||||||
2,651,000 | NewPage Corp., 12.00% company guaranteed notes, due 5/1/13# | 2,945,924 | |||||||||
Verso Paper Holdings LLC: | |||||||||||
681,000 | 9.11%, secured notes, due 8/1/14 (144A)‡ | 701,430 | |||||||||
525,000 | 11.375%, senior subordinated notes due 8/1/16 (144A)# | 561,750 | |||||||||
11,407,854 | |||||||||||
Photo Equipment and Supplies - 0.3% | |||||||||||
Eastman Kodak Co.: | |||||||||||
472,331 | 7.57%, bank loan, due 10/18/12‡ | 472,790 | |||||||||
684,599 | 7.57%, bank loan, due 10/18/12‡ | 685,263 | |||||||||
480,388 | 7.57%, bank loan, due 10/18/12‡ | 480,854 | |||||||||
69,964 | 9.50%, bank loan, due 10/18/12‡ | 70,032 | |||||||||
1,708,939 | |||||||||||
Physical Therapy and Rehabilitation Centers - 0.5% | |||||||||||
2,748,000 | HEALTHSOUTH Corp., 10.75% senior notes, due 6/15/16 (144A)# | 2,995,320 | |||||||||
Pipelines - 0.4% | |||||||||||
2,331,000 | Holly Energy Partners L.P., 6.25% company guaranteed notes, due 3/1/15 | 2,237,760 | |||||||||
Poultry - 1.0% | |||||||||||
5,673,000 | Pilgrims Pride Corp., 8.375% senior subordinated notes, due 5/1/17# | 5,743,913 | |||||||||
Private Corrections - 0.3% | |||||||||||
Corrections Corporation of America: | |||||||||||
1,239,000 | 7.50%, senior notes, due 5/1/11# | 1,285,463 | |||||||||
675,000 | 6.25%, company guaranteed notes due 3/15/13# | 675,000 | |||||||||
1,960,463 | |||||||||||
Publishing - Newspapers - 0.6% | |||||||||||
3,801,000 | Block Communications, Inc., 8.25% senior notes, due 12/15/15 (144A) | 3,896,417 | |||||||||
Publishing - Periodicals - 1.8% | |||||||||||
CBD Media, Inc.: | |||||||||||
675,000 | 8.625%, company guaranteed notes due 6/1/11 | 709,594 | |||||||||
1,229,000 | 9.25%, senior subordinated notes due 7/15/12 | 1,290,450 | |||||||||
1,727,000 | Medimedia USA, Inc., 11.375% senior subordinated notes due 11/15/14 (144A) | 1,839,255 | |||||||||
PRIMEDIA, Inc.: | |||||||||||
1,728,000 | 10.735%, senior notes, due 5/15/10‡ | 1,786,320 | |||||||||
2,814,000 | 8.875%, company guaranteed notes due 5/15/11# | 2,898,419 | |||||||||
2,425,000 | 8.00%, company guaranteed notes due 5/15/13‡ | 2,522,000 | |||||||||
11,046,038 |
See Notes to Schedules of Investments and Financial Statements.
30 Janus Bond & Money Market Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Racetracks - 0.2% | |||||||||||
$ | 1,048,000 | Penn National Gaming, Inc., 6.75% senior subordinated notes, due 3/1/15# | $ | 1,040,140 | |||||||
Real Estate Management/Services - 0.2% | |||||||||||
1,200,000 | Realogy Corp., 12.375% senior notes, due 4/15/15 (144A)# | 1,200,000 | |||||||||
Real Estate Operating/Development - 0.2% | |||||||||||
1,415,000 | Kimball Hill, Inc., 10.50% company guaranteed notes, due 12/15/12 | 1,379,625 | |||||||||
REIT - Health Care - 0.3% | |||||||||||
1,905,000 | Senior Housing Properties Trust, 8.625% senior unsecured notes, due 1/15/12# | 2,081,213 | |||||||||
REIT - Hotels - 0.4% | |||||||||||
2,149,000 | Host Marriott L.P., 6.375% company guaranteed notes, due 3/15/15 | 2,157,059 | |||||||||
Rental Auto/Equipment - 0.5% | |||||||||||
2,588,000 | Hertz Corp., 8.875% company guaranteed notes, due 1/1/14 | 2,788,570 | |||||||||
Retail - Apparel and Shoe - 0% | |||||||||||
275,000 | Burlington Coat Factory, 0% bank loan, due 5/28/13‡ | 273,127 | |||||||||
Retail - Arts and Crafts - 0.3% | |||||||||||
Michaels Stores, Inc.: | |||||||||||
274,311 | 8.125%, bank loan, due 10/11/13‡ | 276,042 | |||||||||
1,500,000 | 11.375%, senior subordinated notes due 11/1/16 (144A)# | 1,650,000 | |||||||||
1,926,042 | |||||||||||
Retail - Building Products - 0.1% | |||||||||||
700,000 | Home Depot, Inc., 5.875% senior unsecured notes, due 12/16/36# | 678,481 | |||||||||
Retail - Computer Equipment - 0.3% | |||||||||||
1,726,000 | GameStop Corp., 8.00% company guaranteed notes, due 10/1/12# | 1,840,348 | |||||||||
Retail - Drug Store - 0.3% | |||||||||||
1,727,000 | Rite Aid Corp., 7.50% company guaranteed notes, due 1/15/15# | 1,761,540 | |||||||||
Retail - Miscellaneous/Diversified - 0.5% | |||||||||||
978,000 | Eye Care Centers of America, Inc., 10.75% company guaranteed notes, due 2/15/15 | 1,090,470 | |||||||||
Harry & David Holdings, Inc.: | |||||||||||
725,000 | 10.36%, company guaranteed notes due 3/1/12‡ | 737,688 | |||||||||
1,250,000 | 9.00%, company guaranteed notes due 3/1/13# | 1,306,250 | |||||||||
3,134,408 | |||||||||||
Retail - Propane Distribution - 0.8% | |||||||||||
696,000 | Amerigas Partners L.P., 7.25% senior unsecured notes, due 5/20/15 | 708,180 | |||||||||
Ferrellgas Partners L.P.: | |||||||||||
2,192,000 | 8.75%, senior notes, due 6/15/12# | 2,279,680 | |||||||||
2,005,000 | 6.75%, senior unsecured notes, due 5/1/14 | 1,989,963 | |||||||||
4,977,823 | |||||||||||
Retail - Restaurants - 1.0% | |||||||||||
Buffets, Inc.: | |||||||||||
104,417 | 8.10%, bank loan, due 6/1/13‡ | 104,939 | |||||||||
790,583 | 8.11%, bank loan, due 11/1/13‡ | 794,868 |
Shares or Principal Amount | Value | ||||||||||
Retail - Restaurants - (continued) | |||||||||||
$ | 2,919,000 | Friendly Ice Cream Corp., 8.375% senior notes, due 6/15/12 | $ | 2,889,810 | |||||||
699,000 | Restaurant Co., 10.00% company guaranteed notes, due 10/1/13 | 686,768 | |||||||||
1,468,000 | VICORP Restaurants, Inc., 10.50% company guaranteed notes, due 4/15/11# | 1,335,880 | |||||||||
5,812,265 | |||||||||||
Retail - Vitamins/Nutritional Supplement - 0.3% | |||||||||||
1,682,000 | General Nutrition Center, 9.79625% senior notes, due 3/15/14 (144A)‡ | 1,646,258 | |||||||||
Rubber - Tires - 0.9% | |||||||||||
Goodyear Tire & Rubber Co.: | |||||||||||
1,275,000 | 9.14%, senior notes, due 12/1/09 (144A)‡ | 1,287,750 | |||||||||
800,000 | 8.625%, senior notes, due 12/1/11 (144A)# | 864,000 | |||||||||
3,072,000 | 9.00%, senior notes, due 7/1/15 | 3,386,880 | |||||||||
5,538,630 | |||||||||||
Satellite Telecommunications - 1.4% | |||||||||||
2,458,000 | Inmarsat Finance PLC, 7.625% company guaranteed notes, due 6/30/12 | 2,568,609 | |||||||||
INTELSAT Bermuda, Ltd.: | |||||||||||
721,000 | 8.50%, senior notes, due 1/15/13‡ | 749,840 | |||||||||
1,925,000 | 7.86%, bank loan, due 2/1/14‡ | 1,930,775 | |||||||||
350,000 | 9.25%, company guaranteed notes due 6/15/16 | 385,000 | |||||||||
INTELSAT Corporation: | |||||||||||
675,000 | 9.00%, company guaranteed notes due 8/15/14# | 729,000 | |||||||||
350,000 | 9.00%, company guaranteed notes due 6/15/16 | 383,688 | |||||||||
1,414,000 | INTELSAT Subsidiary Holding Company, Ltd. 8.625%, company guaranteed notes due 1/15/15‡,# | 1,511,213 | |||||||||
8,258,125 | |||||||||||
Schools - 0.5% | |||||||||||
Education Management LLC: | |||||||||||
500,134 | 7.375%, bank loan, due 6/1/13‡ | 502,009 | |||||||||
2,596,000 | 8.75%, company guaranteed notes due 6/1/14 | 2,745,270 | |||||||||
3,247,279 | |||||||||||
Seismic Data Collection - 0.2% | |||||||||||
1,400,000 | Compagnie Generale de Geophysique-Veritas 7.75%, company guaranteed notes due 5/15/17 | 1,480,500 | |||||||||
Semiconductor Equipment - 0.4% | |||||||||||
2,418,000 | Sensata Technologies B.V., 8.00% company guaranteed notes, due 5/1/14# | 2,424,045 | |||||||||
Special Purpose Entity - 6.1% | |||||||||||
3,555,000 | Affinion Holding Co., 11.65963% bank loan, due 1/24/12‡ | 3,580,169 | |||||||||
CCM Merger, Inc.: | |||||||||||
141,961 | 7.33%, bank loan, due 7/21/12‡ | 142,670 | |||||||||
354,901 | 7.36%, bank loan, due 7/21/12‡ | 356,676 | |||||||||
1,317,039 | 7.49%, bank loan, due 7/21/12‡ | 1,323,624 | |||||||||
3,975,000 | 8.00%, notes, due 8/1/13 (144A)# | 4,024,688 | |||||||||
Hawker Beechcraft Acquisition Co.: | |||||||||||
325,000 | 8.50%, senior notes, due 4/1/15 (144A) | 342,875 | |||||||||
325,000 | 9.75%, senior subordinated notes due 4/1/17 (144A)# | 348,563 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2007 31
Janus High-Yield Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Special Purpose Entity - (continued) | |||||||||||
KAR Holdings, Inc.: | |||||||||||
$ | 6,000,000 | 8.75%, senior notes, due 5/1/14 (144A) | $ | 6,164,999 | |||||||
6,053,000 | 10.00%, senior subordinated notes due 5/1/15 (144A) | 6,272,420 | |||||||||
2,725,000 | NSG Holdings LLC, 7.75% secured notes, due 12/15/25 (144A) | 2,868,063 | |||||||||
2,725,000 | Petroplus Finance, Ltd., 7.00% company guaranteed notes due 5/1/17 (144A) | 2,748,844 | |||||||||
350,000 | PGS Solutions, Inc., 9.625% senior subordinated notes due 2/15/15 (144A) | 355,607 | |||||||||
656,716 | Vanguard Health Holding Company II LLC 7.74875%, bank loan, due 9/23/11‡ | 660,821 | |||||||||
Wimar Opco LLC.: | |||||||||||
1,900,000 | 7.85%, bank loan, due 1/3/12‡ | 1,917,936 | |||||||||
5,646,000 | 9.625%, senior subordinated notes due 12/15/14 (144A) | 5,730,690 | |||||||||
36,838,645 | |||||||||||
Specified Purpose Acquisition Company - 0.2% | |||||||||||
1,129,918 | Solar Capital Corp., 7.36% bank loan, due 2/28/14‡ | 1,138,280 | |||||||||
Telecommunication Services - 2.1% | |||||||||||
1,451,000 | Embarq Corp., 7.082% senior unsecured notes, due 6/1/16# | 1,499,085 | |||||||||
1,546,000 | Eschelon Operating Co., 8.375% secured notes, due 3/15/10 | 1,493,823 | |||||||||
Qwest Corp.: | |||||||||||
675,000 | 5.625%, notes, due 11/15/08# | 675,000 | |||||||||
2,784,000 | 7.875%, senior notes, due 9/1/11 | 2,964,959 | |||||||||
4,327,000 | 8.875%, notes, due 3/15/12‡ | 4,781,334 | |||||||||
1,000,000 | Time Warner Telecom, Inc., 2.375% debentures, due 4/1/26 | 1,285,000 | |||||||||
12,699,201 | |||||||||||
Telephone - Integrated - 1.8% | |||||||||||
2,757,000 | Cincinnati Bell, Inc., 8.375% company guaranteed notes, due 1/15/14# | 2,822,478 | |||||||||
1,072,595 | Hawaiian Telecom Communications, 7.10% bank loan, due 10/31/12‡ | 1,073,174 | |||||||||
2,025,000 | Level 3 Communications, Inc., 3.50% senior notes, due 6/15/12 | 2,500,875 | |||||||||
Level 3 Financing, Inc.: | |||||||||||
745,000 | 9.15%, senior notes, due 2/15/15 (144A)‡ | 754,313 | |||||||||
1,800,000 | 8.75%, senior notes, due 2/15/17 (144A) | 1,831,500 | |||||||||
700,000 | NTL Cable PLC, 9.125% company guaranteed notes, due 8/15/16# | 747,250 | |||||||||
1,243,000 | Qwest Communications International, Inc. 7.50%, company guaranteed notes due 2/15/14# | 1,283,398 | |||||||||
11,012,988 | |||||||||||
Television - 0.3% | |||||||||||
1,680,000 | Umbrella Acquisition, 9.75% senior notes, due 3/15/15 (144A)# | 1,686,300 | |||||||||
Theaters - 0.4% | |||||||||||
AMC Entertainment, Inc.: | |||||||||||
1,425,000 | 8.00%, senior subordinated notes due 3/1/14# | 1,457,062 | |||||||||
833,000 | 11.00%, company guaranteed notes due 2/1/16# | 955,868 | |||||||||
2,412,930 |
Shares or Principal Amount | Value | ||||||||||
Transactional Software - 0.1% | |||||||||||
$ | 358,000 | Open Solutions, Inc., 9.75% senior subordinated notes due 2/1/15 (144A) | $ | 369,635 | |||||||
Transportation - Marine - 1.0% | |||||||||||
452,000 | H-Lines Finance Holding Corp., 0% senior unsecured notes, due 4/1/13‡ | 426,010 | |||||||||
2,890,000 | Horizon Lines LLC, 9.00% company guaranteed notes, due 11/1/12** | 3,041,725 | |||||||||
2,714,000 | Ship Finance International, Ltd., 8.50% company guaranteed notes, due 12/15/13 | 2,795,420 | |||||||||
6,263,155 | |||||||||||
Transportation - Railroad - 0.5% | |||||||||||
Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V.: | |||||||||||
1,149,000 | 9.375%, senior notes, due 5/1/12 | 1,240,919 | |||||||||
825,000 | 7.625%, senior notes, due 12/1/13 (144A) | 839,438 | |||||||||
1,049,000 | Kansas City Southern, 7.50% company guaranteed notes, due 6/15/09 | 1,072,603 | |||||||||
3,152,960 | |||||||||||
Travel Services - 0.1% | |||||||||||
700,000 | Worldspan L.P., 12.35% bank loan, due 12/7/14‡ | 703,066 | |||||||||
Wire and Cable Products - 0.4% | |||||||||||
1,702,000 | Belden CDT, Inc., 7.00% senior subordinated notes due 3/15/17 (144A) | 1,740,707 | |||||||||
800,000 | General Cable Corp., 7.125% senior notes, due 4/1/17 (144A) | 812,000 | |||||||||
2,552,707 | |||||||||||
Total Corporate Bonds (cost $544,798,608) | 558,021,403 | ||||||||||
Preferred Stock - 0.9% | |||||||||||
Automotive - Cars and Light Trucks - 0.2% | |||||||||||
62,375 | General Motors Corp., convertible, 6.25% | 1,434,001 | |||||||||
Containers - Metal and Glass - 0% | |||||||||||
3,500 | Owens-Illinois, Inc., convertible, 4.75% | 138,250 | |||||||||
Metal - Diversified - 0.2% | |||||||||||
12,925 | Freeport-McMoRan Copper & Gold, Inc. convertible, 6.75% | 1,402,880 | |||||||||
Non-Hazardous Waste Disposal - 0.3% | |||||||||||
4,360 | Allied Waste Industries, Inc. convertible, 6.25% | 1,545,619 | |||||||||
Oil Companies - Exploration and Production - 0.2% | |||||||||||
8,005 | Chesapeake Energy Corp., convertible, 5.00% | 1,156,723 | |||||||||
Total Preferred Stock (cost $5,416,185) | 5,677,473 | ||||||||||
Warrants - 0% | |||||||||||
Casino Services - 0% | |||||||||||
166,722 | Progressive Gaming Corp.- expires 8/15/08oo,§ (cost $167) | 120,940 | |||||||||
Money Markets - 6.0% | |||||||||||
18,099,090 | Janus Institutional Cash Management Fund - Institutional Shares, 5.32% | 18,099,090 | |||||||||
17,941,750 | Janus Institutional Money Market Fund - Institutional Shares, 5.26% | 17,941,750 | |||||||||
Total Money Markets (cost $36,040,840) | 36,040,840 |
See Notes to Schedules of Investments and Financial Statements.
32 Janus Bond & Money Market Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Other Securities - 19.3% | |||||||||||
116,209,915 | State Street Navigator Securities Lending Prime Portfolio† (cost $116,209,915) | $ | 116,209,915 | ||||||||
Total Investments (total cost $702,465,715) – 119.1% | 716,070,571 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (19.1)% | (114,875,095 | ) | |||||||||
Net Assets – 100% | $ | 601,195,476 |
Summary of Investments by Country - (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Bermuda | $ | 8,159,892 | 1.1 | % | |||||||
Canada | 6,743,092 | 0.9 | % | ||||||||
China | 2,748,844 | 0.4 | % | ||||||||
Mexico | 1,240,919 | 0.2 | % | ||||||||
Netherlands | 4,775,245 | 0.7 | % | ||||||||
United Kingdom | 6,479,584 | 0.9 | % | ||||||||
United States†† | 685,922,995 | 95.8 | % | ||||||||
Total | $ | 716,070,571 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (74.5% excluding Short-Term Securities and Other Securities).
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2007 33
Janus Short-Term Bond Fund (unaudited)
Ticker: JASBX
Performance Overview
For the six-month period ended April 30, 2007, Janus Short-Term Bond Fund returned 2.54%, slightly outperforming a 2.42% increase of its benchmark, the Lehman Brothers Government/Credit 1-3 Year Index.
Gibson Smith
portfolio manager
Fund Snapshot
This conservative bond fund looks for investments that can provide a modest return while minimizing risk.
Economic Update
Longer term interest rates remained range-bound in the period with the 10-year Treasury falling to a low of nearly 4.40% in early December and backing up to a high of almost 4.90% by late January. Equity markets delivered healthy gains during the period amid continued evidence of strong U.S. economic growth with modest inflation. After a brief period of market volatility in late February and early March, markets rebounded quickly on hopes of monetary easing by the Federal Reserve (Fed).
The Fed left its target interest rate unchanged during the period, taking a more neutral stance in late March by removing its reference to "additional firming" from its monetary policy statement. Though the markets took this to mean a greater potential for a rate cut, the subtle change in the language provided the Fed with some flexibility to adjust monetary policy in either direction. Nevertheless, Fed Chairman Ben Bernanke reiterated the committee's concern over inflation's still elevated level and the Fed's view that although the risks of slower economic growth rose, the potential for higher inflation remained the greater risk.
Generally, the pace of U.S. economic growth slowed during the last quarter of 2006, but remained in modest territory. The weak housing market, a slowdown in manufacturing activity and corporate spending, coupled with other pressures facing the consumer served to bring into question the economy's ability to maintain its upward momentum. On the other hand, the economy remained fundamentally solid as job growth continued to hold steady, which could serve to prolong the current expansion.
Short-Term Bank Loans Aided Performance
On a positive note, the Fund benefited from its out-of-benchmark allocation to floating rate bank loans, as well as from its investment in copper mining company Freeport-McMoran Copper & Gold. Freeport completed its acquisition of Phelps Dodge in March creating the world's largest copper company. Subsequent to the acquisition, the company launched a new public stock offering and earmarked a portion of the proceeds for repayment of debt incurred in the buyout. This announcement of the company's intention to de-leverage its balance sheet benefited the outstanding debt issues.
Among corporate credit holdings, my investment in energy utility TXU Energy contributed to the Fund's performance. However, the company recently announced a leveraged buyout that we think could result in higher balance sheet leverage, to the detriment of its outstanding debt. We believe the holdings in the Short-Term Bond Fund would be required to be tendered to facilitate the private transaction.
Focus on Treasury Holdings Hindered Results
During a period in which lower quality, high-yielding bonds tended to outperform the broader fixed-income category, the Fund's more conservative positions hindered performance. In particular, the Fund suffered from its overweight to U.S. Treasury bonds, which struggled as yields were range-bound and spread-based products (products designed to generate income based on the difference between investment returns on the supporting assets and the returns credited to customers) outperformed. Despite these results, I stand by my efforts to preserve capital in what I felt was an uncertain investment climate.
Outlook
Looking ahead, I expect Treasury yields to remain range-bound, while investors await more clarity on the strength of the economy, the risks of inflation and the likely response of Federal Reserve policymakers. In this environment, I will continue to carefully monitor economic developments, while relying on disciplined, bottom-up fundamental research to uncover opportunities for a moderate out-of-benchmark allocation to floating rate bank loans.
In closing, I recently announced that, in addition to my responsibilities as co-chief investment officer for the firm and portfolio manager of the Janus high yield strategies and co-manager of the Janus balanced strategies, I will also co-manage the flexible bond strategies. This means I will now entrust the Janus Short-Term Bond Fund to two of my very capable colleagues.
34 Janus Bond & Money Market Funds April 30, 2007
(unaudited)
I am pleased to announce that Darrell Watters, a 14-year veteran of the fixed income team with 21 years of professional investment experience, and Jason Groom, a seasoned fixed income professional with 13 years of investment experience, will succeed me and will serve as co-managers of the Fund.
I have worked closely with Darrell and Jason and I am confident in their ability to successfully manage the Fund. I believe that their combined experience and market knowledge should make them ideally suited to take over the Fund. In addition, they will work closely in managing the Fund with the strong fixed income team that we have built over the years. You will find that both Darrell and Jason embrace the same disciplined principles that I hold dear to the entire fixed income group, with a cornerstone of in-depth fundamental research and a focus on delivering solid risk adjusted returns.
It has been a privilege to have worked on your behalf. Thank you for all your support over the years.
Janus Short-Term Bond Fund At a Glance
Fund Profile
April 30, 2007 | |||||||
Weighted Average Maturity | 3.0 Years | ||||||
Average Modified Duration* | 1.2 Years | ||||||
30-Day Current Yield** | |||||||
With Reimbursement | 4.66 | % | |||||
Without Reimbursement | 4.30 | % | |||||
Weighted Average Fixed Income Credit Rating | AA | ||||||
Number of Bonds/Notes | 65 |
*A theoretical measure of price volatility
**Yield will fluctuate
Ratings† Summary – (% of Net Assets)
April 30, 2007 | |||||||
AAA | 66.5 | % | |||||
A | 0.5 | % | |||||
BBB | 6.1 | % | |||||
BB | 5.1 | % | |||||
B | 7.2 | % | |||||
Other | 14.6 | % |
†Rated by Standard & Poor's
Significant Areas of Investment – (% of Net Assets) | Asset Allocation – (% of Net Assets) | ||||||
As of April 30, 2007 | As of April 30, 2007 | ||||||
![]() | ![]() | ||||||
Emerging markets comprised 1.0% of total net assets.
Janus Bond & Money Market Funds April 30, 2007 35
Janus Short-Term Bond Fund (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Five Year | Ten Year | Since Inception* | Total Annual Fund Operating Expenses | Net Annual Fund Operating Expenses | |||||||||||||||||||||||||
Janus Short-Term Bond Fund | 2.54 | % | 4.98 | % | 3.16 | % | 4.56 | % | 4.68 | % | 1.07 | % | 0.66 | % | |||||||||||||||||
Lehman Brothers Government/ Credit 1-3 Year Index | 2.42 | % | 5.33 | % | 3.40 | % | 5.01 | % | 5.09 | %** | |||||||||||||||||||||
Lipper Quartile | – | 3 | rd | 2 | nd | 2 | nd | 3 | rd | ||||||||||||||||||||||
Lipper Ranking - based on total return for Short Investment Grade Debt Funds | – | 126/237 | 65/142 | 32/79 | 13/24 |
Visit janus.com to view current performance and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
Janus Capital has contractually agreed to waive the Fund's total operating expenses (excluding brokerage commissions, interest, taxes, and extraordinary expenses) to a certain limit until at least March 1, 2008. The expense waiver shown reflects the application of such limit and is detailed in the Statement of Additional Information. Total returns and yields shown include fee waivers, if any, and without such waivers, the Fund's yield and total returns would have been lower.
The Fund's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. Contractual waivers agreed to by Janus Capital are included under "Net Annual Fund Operating Expenses." All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
Funds that invest in bonds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds owned by the Fund. Unlike owning individual bonds, there are ongoing fees and expenses associated with owning shares of bond funds. The return of principal is not guaranteed due to net asset value fluctuation that is caused by changes in the price of specific bonds held in the Fund and selling of bonds within the Fund by the portfolio manager.
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.
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.
September 3, 1992 is the date used to calculate the since-inception Lipper ranking, which is slightly different from when the Fund began operations since Lipper provides fund rankings as of the last day of the month or the first Thursday after fund inception.
There is no assurance that the investment process will consistently lead to successful investing.
The Fund will invest at least 80% of its net assets in the type of securities described by its name.
Effective May 15, 2007, Darrell Watters and Jason Groom will become Co-Portfolio Managers of Janus Short-Term Bond Fund.
See Notes to Schedules of Investments for index definitions.
The Fund's portfolio may differ significantly from the securities held in the index. The index is not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – September 1, 1992
**The Lehman Brothers Government/Credit 1-3 Year Index's since inception returns are calculated from August 31, 1992.
36 Janus Bond & Money Market Funds April 30, 2007
(unaudited)
Fund Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Fund and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,025.40 | $ | 3.26 | |||||||||
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.
Janus Bond & Money Market Funds April 30, 2007 37
Janus Short-Term Bond Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Corporate Bonds - 29.5% | |||||||||||
Apparel Manufacturers - 1.0% | |||||||||||
$ | 1,690,000 | Hanesbrands, Inc., 8.735% senior notes, due 12/15/14 (144A)‡ | $ | 1,736,475 | |||||||
Auction House - Art Dealer - 1.0% | |||||||||||
1,693,958 | Adesa, Inc., 0% bank loan, due 10/20/13‡ | 1,704,020 | |||||||||
Automotive - Cars and Light Trucks - 0.3% | |||||||||||
458,850 | General Motors Corp., 7.725% bank loan, due 11/29/13‡ | 462,007 | |||||||||
Brewery - 0.9% | |||||||||||
1,620,000 | SABMiller PLC, 5.66% company guaranteed notes due 7/1/09 (144A)‡ | 1,622,552 | |||||||||
Cable Television - 0.8% | |||||||||||
1,365,000 | Comcast Corp., 5.66% company guaranteed notes, due 7/14/09‡ | 1,367,087 | |||||||||
Casino Hotels - 0.7% | |||||||||||
795,000 | Green Valley Ranch Gaming, 7.36% bank loan, due 2/16/14‡ | 798,315 | |||||||||
420,000 | Seminole Hard Rock Entertainment, 7.8475% secured notes, due 3/15/14 (144A)‡ | 430,500 | |||||||||
1,228,815 | |||||||||||
Cellular Telecommunications - 0.5% | |||||||||||
850,000 | Rogers Wireless Communications, Inc. 8.47988%, company guaranteed notes due 12/15/10‡ | 867,000 | |||||||||
Diversified Operations - Commercial Services - 1.0% | |||||||||||
1,685,000 | Aramark Corp., 8.86% senior notes, due 2/1/15 (144A)‡ | 1,731,338 | |||||||||
Drug Delivery Systems - 1.0% | |||||||||||
1,675,000 | Hospira, Inc., 5.83% senior notes, due 3/30/10‡ | 1,680,149 | |||||||||
Educational Software - 0.8% | |||||||||||
1,361,564 | Riverdeep Interactive Learning, 8.10% bank loan, due 12/20/13‡ | 1,367,800 | |||||||||
Electric - Integrated - 1.9% | |||||||||||
3,370,000 | TXU Energy Company LLC, 5.85% senior unsecured notes due 9/16/08 (144A)‡ | 3,370,272 | |||||||||
Electronic Components - Semiconductors - 0.8% | |||||||||||
1,316,000 | Spansion LLC, 8.36% bank loan, due 11/1/12‡ | 1,322,580 | |||||||||
Food - Canned - 1.0% | |||||||||||
1,675,000 | Birds Eye Foods, Inc., 7.09% bank loan, due 3/22/13‡ | 1,677,630 | |||||||||
Independent Power Producer - 1.4% | |||||||||||
760,000 | LS Power Funding, 0% bank loan, 5/4/14‡ | 760,000 | |||||||||
NRG Energy, Inc.: | |||||||||||
485,240 | 7.35%, bank loan, due 2/1/13‡ | 488,515 | |||||||||
1,096,685 | 7.35%, bank loan, due 2/1/13‡ | 1,105,141 | |||||||||
2,353,656 | |||||||||||
Machinery - Electrical - 0.4% | |||||||||||
779,625 | Baldor Electric Co., 7.125% bank loan, due 1/31/14‡ | 782,353 |
Shares or Principal Amount | Value | ||||||||||
Medical - Hospitals - 0.7% | |||||||||||
$ | 1,239,893 | HCA, Inc., 7.60% bank loan, due 11/18/13‡ | $ | 1,252,849 | |||||||
Medical Products - 0.5% | |||||||||||
900,000 | Cardinal Health 409, Inc., 7.60% bank loan, due 4/10/14‡ | 901,872 | |||||||||
Metal - Diversified - 1.0% | |||||||||||
Freeport-McMoRan Copper & Gold, Inc.: | |||||||||||
434,784 | 0%, bank loan, due 3/19/14‡ | 436,075 | |||||||||
1,280,000 | 8.56438%, senior unsecured notes due 4/1/15‡ | 1,350,400 | |||||||||
1,786,475 | |||||||||||
Office Automation and Equipment - 0.9% | |||||||||||
1,640,000 | Xerox Corp., 6.10% senior unsecured notes, due 12/18/09‡ | 1,650,260 | |||||||||
Oil Refining and Marketing - 1.0% | |||||||||||
1,815,000 | Enterprise Products Operating L.P., 4.00% company guaranteed notes, due 10/15/07 | 1,803,353 | |||||||||
Photo Equipment and Supplies - 0.8% | |||||||||||
Eastman Kodak Co.: | |||||||||||
381,246 | 7.57%, bank loan, due 10/18/12‡ | 381,616 | |||||||||
490,995 | 7.57%, bank loan, due 10/18/12‡ | 491,471 | |||||||||
500,613 | 7.57%, bank loan, due 10/18/12‡ | 501,099 | |||||||||
38,963 | 9.50%, bank loan, due 10/18/12‡ | 39,000 | |||||||||
1,413,186 | |||||||||||
Publishing - Periodicals - 0.5% | |||||||||||
915,705 | Idearc, Inc., 7.35% bank loan, due 11/17/14‡ | 921,556 | |||||||||
Reinsurance - 2.1% | |||||||||||
3,823,000 | Berkshire Hathaway, Inc., 3.375% notes, due 10/15/08 | 3,729,920 | |||||||||
Retail - Computer Equipment - 0.5% | |||||||||||
834,000 | GameStop Corp., 9.235% company guaranteed notes, due 10/1/11‡ | 864,233 | |||||||||
Retail - Pet Food and Supplies - 0.9% | |||||||||||
Petco Animal Supplies, Inc.: | |||||||||||
813,628 | 7.855%, bank loan, due 10/28/13‡ | 819,983 | |||||||||
809,560 | 8.10%, bank loan, due 10/28/13‡ | 815,882 | |||||||||
1,635,865 | |||||||||||
Retail - Restaurants - 0.5% | |||||||||||
825,000 | Sbarro, Inc., 7.84813% bank loan, due 1/31/14‡ | 832,219 | |||||||||
Rubber - Tires - 0.2% | |||||||||||
305,000 | Goodyear Tire & Rubber Co., 9.14% senior notes, due 12/1/09 (144A)‡ | 308,050 | |||||||||
Satellite Telecommunications - 1.1% | |||||||||||
INTELSAT Bermuda, Ltd.: | |||||||||||
1,110,000 | 7.86%, bank loan, due 2/1/14‡ | 1,113,330 | |||||||||
820,000 | 8.87188%, company guaranteed notes due 1/15/15 | 838,450 | |||||||||
1,951,780 | |||||||||||
Special Purpose Entity - 1.7% | |||||||||||
1,685,000 | KAR Holdings, Inc., 9.35813% senior notes, due 5/1/14 (144A)‡ | 1,722,913 | |||||||||
1,142,139 | Wimar Opco LLC, 7.85% bank loan, due 1/3/12‡ | 1,152,921 | |||||||||
2,875,834 |
See Notes to Schedules of Investments and Financial Statements.
38 Janus Bond & Money Market Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Shares or Principal Amount | Value | ||||||||||
Specified Purpose Acquisition Company - 0.3% | |||||||||||
$ | 466,705 | Solar Capital Corp., 7.36% bank loan, due 2/28/14‡ | $ | 470,159 | |||||||
Telecommunication Services - 0.5% | |||||||||||
880,000 | Verizon Global Funding Corp., 4.00% senior unsecured notes, due 1/15/08 | 872,190 | |||||||||
Telephone - Integrated - 1.3% | |||||||||||
1,000,000 | Level 3 Communications, Inc., 7.605% bank loan, due 3/13/14‡ | 1,004,580 | |||||||||
1,305,000 | Mountain States Telephone & Telegraph Co. 6.00%, debentures, due 8/1/07 | 1,305,000 | |||||||||
2,309,580 | |||||||||||
Transportation - Railroad - 1.0% | |||||||||||
1,655,000 | Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V., 12.50% senior notes, due 6/15/12 | 1,767,540 | |||||||||
Wire and Cable Products - 0.5% | |||||||||||
840,000 | General Cable Corp., 7.725% senior notes, due 4/1/15 (144A) | 848,400 | |||||||||
Total Corporate Bonds (cost $51,251,541) | 51,469,055 | ||||||||||
U.S. Treasury Notes/Bonds - 64.3% | |||||||||||
8,290,000 | 4.625%, due 3/31/08# | 8,264,417 | |||||||||
3,320,000 | 4.875%, due 4/30/08 | 3,317,407 | |||||||||
1,067,000 | 3.75%, due 5/15/08# | 1,054,537 | |||||||||
583,000 | 4.875%, due 5/31/08# | 582,909 | |||||||||
3,376,000 | 5.00%, due 7/31/08# | 3,382,857 | |||||||||
827,000 | 4.875%, due 8/31/08 | 827,452 | |||||||||
3,440,000 | 4.625%, due 9/30/08# | 3,432,879 | |||||||||
6,107,000 | 4.875%, due 10/31/08# | 6,116,539 | |||||||||
3,010,000 | 4.375%, due 11/15/08# | 2,993,773 | |||||||||
14,712,000 | 4.75%, due 12/31/08# | 14,722,343 | |||||||||
16,398,000 | 4.875%, due 1/31/09# | 16,450,523 | |||||||||
16,058,000 | 4.50%, due 2/15/09# | 16,011,576 | |||||||||
4,130,000 | 4.75%, due 2/28/09# | 4,136,129 | |||||||||
845,000 | 4.50%, due 3/31/09# | 843,085 | |||||||||
2,692,000 | 4.00%, due 6/15/09# | 2,661,295 | |||||||||
2,468,000 | 3.50%, due 8/15/09# | 2,410,639 | |||||||||
21,480,000 | 4.625%, due 11/15/09# | 21,514,412 | |||||||||
3,298,000 | 4.75%, due 2/15/10# | 3,316,294 | |||||||||
Total U.S. Treasury Notes/Bonds (cost $111,887,529) | 112,039,066 | ||||||||||
Money Markets - 5.7% | |||||||||||
1,054,850 | Janus Institutional Cash Management Fund - Institutional Shares, 5.32% | 1,054,850 | |||||||||
8,950,000 | Janus Institutional Money Market Fund - Institutional Shares, 5.26% | 8,950,000 | |||||||||
Total Money Markets (cost $10,004,850) | 10,004,850 | ||||||||||
Other Securities - 25.5% | |||||||||||
44,397,740 | State Street Navigator Securities Lending Prime Portfolio† (cost $44,397,740) | 44,397,740 | |||||||||
Short-Term Floating Rate Note - 1.0% | |||||||||||
1,679,199 | Wachovia Asset Securitization, Inc., 5.46% 7/25/37 (cost $1,679,199) | 1,679,199 |
Shares or Principal Amount | Value | ||||||||||
Short-Term Taxable Variable Rate Demand Note - 0.7% | |||||||||||
$ | 1,217,425 | California Infrastructure and Economic Development Bank Industrial Revenue Series B, 5.42%, 4/1/24 (cost $1,217,425) | $ | 1,217,425 | |||||||
Total Investments (total cost $220,438,284) – 126.7% | 220,807,335 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (26.7)% | (46,602,907 | ) | |||||||||
Net Assets – 100% | $ | 174,204,428 |
Summary of Investments by Country - (Long Positions)
Country | Value | % of Investment Securities | |||||||||
Bermuda | $ | 838,450 | 0.4 | % | |||||||
Canada | 867,000 | 0.4 | % | ||||||||
Mexico | 1,767,540 | 0.8 | % | ||||||||
United Kingdom | 1,622,552 | 0.7 | % | ||||||||
United States†† | 215,711,793 | 97.7 | % | ||||||||
Total | $ | 220,807,335 | 100.0 | % |
††Includes Short-Term Securities and Other Securities (71.7% excluding Short-Term Securities and Other Securities).
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2007 39
Janus Money Market Funds (unaudited)
Ticker: JAMXX
Janus Money Market Fund Average Annual Total Return For the Periods Ended April 30, 2007 | Portfolio Managers J. Eric Thorderson Craig Jacobson | ||||||
Investor Shares | |||||||
Fiscal Year-to-Date | 2.41 | % | |||||
1 Year | 4.85 | % | |||||
5 Year | 2.28 | % | |||||
10 Year | 3.52 | % | |||||
Since Inception (February 14, 1995) | 3.83 | % | |||||
Seven-Day Current Yield | |||||||
Investor Shares: | |||||||
With Reimbursement | 4.81 | % | |||||
Without Reimbursement | 4.71 | % | |||||
Expense Ratios For the Fiscal Year ended October 31, 2006 | |||||||
Investor Shares | |||||||
Total Annual Fund Operating Expenses | 0.70 | % |
Ticker: JATXX
Janus Tax-Exempt Money Market Fund Average Annual Total Return For the Periods Ended April 30, 2007 | Portfolio Manager Craig Jacobson | ||||||
Investor Shares | |||||||
Fiscal Year-to-Date | 1.55 | % | |||||
1 Year | 3.10 | % | |||||
5 Year | 1.55 | % | |||||
10 Year | 2.24 | % | |||||
Since Inception (February 14, 1995) | 2.43 | % | |||||
Seven-Day Current Yield | |||||||
Investor Shares: | |||||||
With Reimbursement | 3.35 | % | |||||
Without Reimbursement | 3.25 | % | |||||
Expense Ratios For the Fiscal Year ended October 31, 2006 | |||||||
Investor Shares | |||||||
Total Annual Fund Operating Expenses | 0.75 | % |
Ticker: JAGXX
Janus Government Money Market Fund Average Annual Total Return For the Periods Ended April 30, 2007 | Portfolio Managers J. Eric Thorderson Craig Jacobson | ||||||
Investor Shares | |||||||
Fiscal Year-to-Date | 2.37 | % | |||||
1 Year | 4.78 | % | |||||
5 Year | 2.21 | % | |||||
10 Year | 3.43 | % | |||||
Since Inception (February 14, 1995) | 3.74 | % | |||||
Seven-Day Current Yield | |||||||
Investor Shares: | |||||||
With Reimbursement | 4.72 | % | |||||
Without Reimbursement | 4.62 | % | |||||
Expense Ratios For the Fiscal Year ended October 31, 2006 | |||||||
Investor Shares | |||||||
Total Annual Fund Operating Expenses | 0.71 | % |
Data presented represents past performance, which is no guarantee of future results. Current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
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.
Janus Capital Management LLC has agreed to waive one-half of its advisory fee. Such waiver is voluntary and could change or be terminated at any time at the discretion of Janus Capital. Total returns shown include fee waivers, if any, and without such waivers, the Fund's yields and total returns would have been lower.
Each Fund's expense ratios were determined based on average assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
Total return includes reinvestment of dividends and capital gains.
The yield more closely reflects the current earnings of each Money Market Fund than the total return.
The Funds will invest at least 80% of their net assets in the type of securities described by their name.
Income may be subject to state or local taxes and to a limited extent certain federal tax.
Effective April 16, 2007, Craig Jacobson became Co-Portfolio Manager of Janus Money Market Fund.
Effective April 16, 2007, Craig Jacobson became Co-Portfolio Manager of Janus Government Money Market Fund.
Effective April 16, 2007, Craig Jacobson became Portfolio Manager of Janus Tax-Exempt Money Market Fund.
See Notes to Schedules of Investments and Financial Statements.
See "Explanations of Charts, Tables and Financial Statements."
40 Janus Bond & Money Market Funds April 30, 2007
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 the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example - Investor Shares | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,024.10 | $ | 3.01 | |||||||||
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 voluntary waivers by Janus Capital.
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 the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example - Investor Shares | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,023.70 | $ | 3.06 | |||||||||
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 voluntary waivers by Janus Capital.
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 the section Useful Information About Your Fund Report for a detailed explanation of the information presented in these charts.
Expense Example - Investor Shares | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,015.50 | $ | 3.15 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,021.67 | $ | 3.16 |
*Expenses are equal to the annualized expense ratio of 0.63%, 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 voluntary waivers by Janus Capital.
Janus Bond & Money Market Funds April 30, 2007 41
Janus Money Market Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Principal Amount | Value | ||||||||||
Certificates of Deposit - 4.7% | |||||||||||
$ | 10,664,000 | Deutsche Bank Securities, Inc. 5.40%, 11/21/07 | $ | 10,664,000 | |||||||
10,665,000 | Natexis Banques Populaires, New York 5.40%, 1/14/08 | 10,665,000 | |||||||||
Norinchunkin Bank, New York: | |||||||||||
10,665,000 | 5.36%, 5/14/07 | 10,665,000 | |||||||||
10,665,000 | 5.355%, 6/12/07 | 10,665,000 | |||||||||
5,120,000 | 5.37%, 7/17/07 | 5,120,000 | |||||||||
Shinkin Central Bank, New York: | |||||||||||
7,465,000 | 5.335%, 5/23/07 | 7,465,000 | |||||||||
4,270,000 | 5.37%, 7/20/07 | 4,270,000 | |||||||||
7,465,000 | Societe Generale, New York 5.45%, 6/4/07 | 7,465,000 | |||||||||
Sumitomo Trust and Bank: | |||||||||||
5,332,000 | 5.32%, 5/21/07 | 5,332,000 | |||||||||
3,839,000 | 5.37%, 7/20/07 | 3,839,000 | |||||||||
Total Certificates of Deposit (cost $76,150,000) | 76,150,000 | ||||||||||
Commercial Paper - 23.9% | |||||||||||
48,000,000 | Banco Bilbao Vizcaya Argentaria, Puerto Rico 5.27%, 6/15/07 (Section 4(2)) | 47,683,800 | |||||||||
Check Point Charlie LLC: | |||||||||||
27,500,000 | 5.29%, 5/10/07 (Section 4(2)) | 27,463,631 | |||||||||
20,000,000 | 5.30%, 5/16/07 (Section 4(2)) | 19,955,833 | |||||||||
Davis Square Funding IV Corp.: | |||||||||||
8,500,000 | 5.31%, 5/2/07 (Section 4(2)) | 8,498,746 | |||||||||
30,000,000 | 5.31%, 5/3/07 (Section 4(2)) | 29,991,150 | |||||||||
15,000,000 | Davis Square Funding V Corp. 5.30%, 5/3/07 (Section 4(2)) | 14,995,583 | |||||||||
13,500,000 | Gotham Funding Corp. 5.30% - 5.4625%, 5/15/07 (Section 4(2)) | 13,472,175 | |||||||||
20,169,000 | Klio Funding Corp. 5.26%, 7/24/07 (144A) | 19,921,459 | |||||||||
48,000,000 | Klio II Funding Corp. 5.26%, 7/25/07 (144A) | 47,403,867 | |||||||||
48,000,000 | Klio III Funding Corp. 5.26%, 7/24/07 (144A) | 47,410,880 | |||||||||
La Fayette Asset Securitization LLC: | |||||||||||
7,000,000 | 5.30%, 5/14/07 (Section 4(2)) | 6,986,603 | |||||||||
32,000,000 | 5.28%, 5/23/07 (Section 4(2)) | 31,896,747 | |||||||||
8,267,000 | 5.29%, 5/29/07 (Section 4(2)) | 8,232,986 | |||||||||
Morrigan TRR Funding LLC: | |||||||||||
28,000,000 | 5.31%, 5/15/07 (144A) | 27,942,180 | |||||||||
20,000,000 | 5.29%, 6/1/07 (144A) | 19,908,894 | |||||||||
Stanfield Victoria Funding LLC: | |||||||||||
8,212,000 | 5.20%, 5/15/07 (144A) | 8,195,394 | |||||||||
6,825,000 | 5.17%, 6/12/07 (144A) | 6,783,834 | |||||||||
Total Commercial Paper (cost $386,743,762) | 386,743,762 | ||||||||||
Floating Rate Notes - 29.7% | |||||||||||
15,996,000 | Ares VII CLO, Ltd., Class A-1A 5.41%, 5/8/15§ | 15,996,000 | |||||||||
7,466,000 | Banco Santander Totta SA 5.32%, 7/16/11 (144A) | 7,466,000 | |||||||||
48,000,000 | Bank of America Securities LLC (same day put), 5.3725%, 5/1/07 | 48,000,000 | |||||||||
20,000,000 | BCP Finance Bank, Ltd. 5.36983%, 5/2/12§ | 20,000,000 | |||||||||
45,000,000 | CAM US Finance S.A. Unipersonal 5.36%, 4/3/12 (144A) | 45,000,000 |
Principal Amount | Value | ||||||||||
Floating Rate Notes - (continued) | |||||||||||
$ | 4,266,000 | Dekabank, New York 5.39988%, 11/19/15 (144A) | $ | 4,266,000 | |||||||
53,000,000 | EMC Mortgage Corp. (same day put) 5.4325%, 5/8/26 | 53,000,000 | |||||||||
HSH Nordbank A.G., New York: | |||||||||||
6,399,000 | 5.33%, 11/21/11 (144A) | 6,399,000 | |||||||||
19,195,000 | 5.35%, 6/23/15 (144A) | 19,195,000 | |||||||||
5,332,000 | K2 (USA) LLC, 5.32% 5.32%, 12/3/07 (144A) | 5,331,674 | |||||||||
51,000,000 | Lehman Brothers, Inc. (90 day put) 5.38% - 5.4625%, 4/5/27 ß | 51,000,000 | |||||||||
6,399,000 | Natixis 5.33%, 10/15/10 (144A) | 6,399,000 | |||||||||
Putnam Structured Product Funding 2003-1 LLC: | |||||||||||
21,487,240 | Class A-1A, 5.34%, 10/15/38 | 21,487,240 | |||||||||
8,744,188 | Class A-1B, 5.34%, 10/15/38 | 8,744,188 | |||||||||
15,000,000 | Shiprock Finance SPC - SF-1, Series 2007-3A 5.39%, 4/11/08§ | 15,000,000 | |||||||||
Sumitomo Trust and Banking Co. Ltd.: | |||||||||||
5,332,000 | 5.32%, 5/14/07 | 5,332,000 | |||||||||
10,664,000 | 5.32%, 5/15/07 | 10,664,000 | |||||||||
16,000,000 | 5.32%, 9/12/07 | 16,000,000 | |||||||||
21,328,000 | Totta (Ireland) PLC 5.32%, 3/7/12 (144A) | 21,328,000 | |||||||||
Unicredito Italiano Bank (Ireland): | |||||||||||
17,916,000 | 5.34%, 3/9/11 (144A) | 17,916,000 | |||||||||
30,000,000 | 5.34%, 5/10/12 (144A) | 30,000,000 | |||||||||
Union Hamilton Special Purpose Funding LLC: | |||||||||||
6,399,000 | 5.35488%, 6/15/07 (144A) | 6,399,000 | |||||||||
15,996,000 | 5.35%, 6/21/07 (144A) | 15,996,000 | |||||||||
29,859,000 | Westdeutsche Landesbank A.G. 5.38%, 3/10/15 (144A) | 29,859,000 | |||||||||
Total Floating Rate Notes (cost $480,778,102) | 480,778,102 | ||||||||||
Repurchase Agreements - 26.5% | |||||||||||
6,000,000 | Citigroup Financial Products, Inc., 5.4625% dated 4/30/07, maturing 5/1/07 to be repurchased at $6,000,910 collateralized by $8,370,634 in Trust Receipts 0.001%, 11/24/34 - 9/22/36 with a value of $6,966,332 | 6,000,000 | |||||||||
42,000,000 | Credit Suisse Securities (USA) LLC, 5.3925% dated 4/30/07, maturing 5/1/07 to be repurchased at $42,006,291 collateralized by $852,183,523 in Collateralized Mortgage Obligations 0% - 8.00%, 5/31/17 - 12/28/42 with a value of $44,100,076 | 42,000,000 | |||||||||
6,000,000 | Credit Suisse Securities (USA) LLC, 5.4125% dated 4/30/07, maturing 5/1/07 to be repurchased at $6,000,902 collateralized by $8,849,304 in Collateralized Mortgage Obligations 0% - 6.55%, 3/25/11 - 10/17/38 with a value of $6,301,567 | 6,000,000 |
See Notes to Schedules of Investments and Financial Statements.
42 Janus Bond & Money Market Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Principal Amount | Value | ||||||||||
Repurchase Agreements - (continued) | |||||||||||
$ | 6,000,000 | Deutsche Bank Securities, Inc., 5.4125% dated 4/30/07, maturing 5/1/07 to be repurchased at $6,000,902 collateralized by $39,567,207 in U.S. Government Agencies 0%, 7/25/31; with a value of $6,120,000 | $ | 6,000,000 | |||||||
22,000,000 | Dresdner Kleinwort Securities LLC, 5.3625% dated 4/30/07, maturing 5/1/07 to be repurchased at $22,003,277 collateralized by $56,790,000 in Asset Backed Securities 0% - 5.695%, 6/25/34 - 12/20/36 with a value of $23,104,354 | 22,000,000 | |||||||||
44,000,000 | Goldman Sachs & Co., 5.4125% dated 4/30/07, maturing 5/1/07 to be repurchased at $44,006,615 collateralized by $31,300,000 in Certificates of Deposit 0% - 5.50%, 10/3/07 - 4/1/13 $10,000,000 in Collateralized Mortgage Obligations; 5.96526%, 3/10/39 $3,856,970 in Corporate Notes 8.50%, 3/1/23; with respective values of $31,157,437, $9,281,311 and $4,844,858 | 44,000,000 | |||||||||
32,000,000 | Greenwich Capital Markets, Inc., 5.4625% dated 4/30/07, maturing 5/1/07 to be repurchased at $32,004,856 collateralized by $34,637,314 in Trust Receipts 0% - 11.203%, 10/20/36 - 4/14/37 with a value of $33,707,512 | 32,000,000 | |||||||||
500,000 | ING Financial Markets LLC, 5.26% dated 4/30/07, maturing 5/1/07 to be repurchased at $500,073 collateralized by $993,269 in U.S. Government Agencies 0% - 7.0002%, 5/18/27 - 12/1/34 with a value of $510,032 | 500,000 | |||||||||
48,000,000 | J.P. Morgan Securities, Inc., 5.4025% dated 4/30/07, maturing 5/1/07 to be repurchased at $48,007,203 collateralized by $57,639,142 in Corporate Notes, 0% - 12.375% 2/1/06 - 10/15/49; $570,000 in Medium Term Notes; 3.85%, 11/6/08; with respective values of $49,832,886 and $568,380 | 48,000,000 | |||||||||
48,000,000 | Merrill Lynch, Pierce, Fenner & Smith 5.4825%; dated 4/30/07, maturing 5/1/07 to be repurchased at $48,007,310 collateralized by $112,535,000 in Asset Backed Securities 0.04% - 9.71%, 7/2/07 - 12/5/46 with a value of $50,770,441 | 48,000,000 | |||||||||
48,000,000 | Morgan Stanley & Co., Inc., 5.3625% dated 4/30/07, maturing 5/1/07 to be repurchased at $48,007,150 collateralized by $1,899,328,829 in Collateralized Mortgage Obligations 0% - 5.78781%, 8/11/16 - 1/20/47 with a value of $50,532,557 | 48,000,000 |
Principal Amount | Value | ||||||||||
Repurchase Agreements - (continued) | |||||||||||
$ | 48,000,000 | RBC Capital Markets Corp., 5.3825% dated 4/30/07, maturing 5/1/07 to be repurchased at $48,007,177 collateralized by $49,206,031 in Commercial Paper; 0%, 5/29/07 with a value of $48,960,001 | $ | 48,000,000 | |||||||
61,000,000 | Societe Generale, New York, 5.3125% dated 4/30/07, maturing 5/1/07 to be repurchased at $61,009,002 collateralized by $262,686,407 in U.S. Government Agencies 0% - 7.423%, 12/15/13 - 6/1/40 with a value of $62,220,000 | 61,000,000 | |||||||||
19,000,000 | Wachovia Capital Markets LLC, 5.38% dated 4/30/07, maturing 5/1/07 to be repurchased at $19,002,839 collateralized by $19,609,352 in Corporate Notes; 2.875% - 9.375% 6/1/07 - 12/16/36; with a value of $19,941,433 | 19,000,000 | |||||||||
Total Repurchase Agreements (cost $430,500,000) | 430,500,000 | ||||||||||
Short-Term Corporate Notes - 2.3% | |||||||||||
20,000,000 | Cullinan Finance Corp. 5.37%, 3/25/08 (144A) | 20,000,000 | |||||||||
10,664,000 | Sedna Finance, Inc. 5.60%, 6/20/07 (144A) | 10,664,000 | |||||||||
6,399,000 | Stanfield Victoria Funding LLC 5.45%, 2/1/08 | 6,399,000 | |||||||||
Total Short-Term Corporate Notes (cost $37,063,000) | 37,063,000 | ||||||||||
Taxable Variable Rate Demand Notes - 5.5% | |||||||||||
2,400,000 | Arbor Properties, Inc., Series 2004 5.32%, 11/1/24 | 2,400,000 | |||||||||
590,000 | Aurora Colorado CenterTech Metropolitan District, Series B, 5.55%, 12/1/17 | 590,000 | |||||||||
Breckenridge Terrace LLC: | |||||||||||
3,195,000 | 1999 A, 5.37%, 5/1/39 | 3,195,000 | |||||||||
790,000 | 1999 B, 5.37%, 5/1/39 | 790,000 | |||||||||
2,160,000 | City of Irondale, Alabama 5.32%, 10/1/35 | 2,160,000 | |||||||||
3,420,000 | Colorado Natural Gas, Inc., Series 2002 5.36%, 7/1/32 | 3,420,000 | |||||||||
6,800,000 | Cook County, Illinois, Series A 5.34%, 11/1/23 | 6,800,000 | |||||||||
Cornerstone Funding Corp. I: | |||||||||||
2,021,000 | Series 2003C, 5.40%, 4/1/13 | 2,021,000 | |||||||||
1,742,000 | Series 2003E, 5.40%, 7/1/30 | 1,742,000 | |||||||||
2,353,000 | Series 2003B, 5.35% - 5.4125%, 12/1/30 | 2,353,000 | |||||||||
2,713,000 | Custom Window Systems 5.37%, 11/1/26 | 2,713,000 | |||||||||
1,940,000 | Edison Chouest Offshore LLC 5.35%, 3/1/14 | 1,940,000 | |||||||||
487,000 | First United Pentecostal 5.39%, 3/1/23 | 487,000 | |||||||||
1,105,000 | FJM Properties-Wilmar 5.33%, 10/1/24 | 1,105,000 | |||||||||
3,345,000 | HHH Supply and Investment Co. 5.37%, 7/1/29 | 3,345,000 | |||||||||
3,085,000 | Hillcrest Medical Plaza 5.32%, 9/1/23 | 3,085,000 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2007 43
Janus Money Market Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Principal Amount | Value | ||||||||||
Taxable Variable Rate Demand Notes - (continued) | |||||||||||
$ | 1,840,000 | Holston Medical Group 5.35%, 1/1/13 | $ | 1,840,000 | |||||||
1,025,000 | J&E Land Co. 5.35%, 6/1/23 | 1,025,000 | |||||||||
1,155,000 | Lenexa, Kansas Industrial Revenue (Labone, Inc. Project), Series A 5.40%, 9/1/09 | 1,155,000 | |||||||||
4,410,000 | Louisiana Health Systems Corp. Revenue Series B, 5.32%, 10/1/22 | 4,410,000 | |||||||||
1,195,000 | Luxor Management Company 5.35%, 4/1/18 | 1,195,000 | |||||||||
1,345,000 | McElroy Metal Mill, Inc., Series 2003 5.35%, 7/1/18 | 1,345,000 | |||||||||
1,895,000 | Medical Clinic Board, Mobile, Alabama 5.33%, 9/1/11 | 1,895,000 | |||||||||
3,645,000 | Mississippi Business Finance Corp. 5.33%, 10/1/18 | 3,645,000 | |||||||||
830,000 | Montgomery-Engelside, Alabama Medical Clinic Board Revenue, (Surgical Center) 5.32%, 3/1/24 | 830,000 | |||||||||
1,945,000 | Nautical Transport LLC 5.36%, 10/15/10 (144A) | 1,945,000 | |||||||||
6,500,000 | Olympic Club, California Revenue Series 2002, 5.36%, 10/1/32 | 6,500,000 | |||||||||
1,880,000 | Patrick Schaumburg Automobiles, Inc. 5.32%, 7/1/08 (144A) | 1,880,000 | |||||||||
2,300,000 | Racetrac Capital LLC, Series 1998-A 5.32%, 4/1/18 | 2,300,000 | |||||||||
5,400,000 | Rehau, Inc. 5.49%, 10/1/19 | 5,400,000 | |||||||||
2,840,000 | Russell Lands, Inc., Series 2002 5.35%, 8/1/12 | 2,840,000 | |||||||||
2,600,000 | Shoosmith Brothers, Inc. 5.32%, 3/1/15 | 2,600,000 | |||||||||
2,115,000 | Robinette Co. 5.32%, 1/1/17 | 2,115,000 | |||||||||
4,060,000 | Timber Ridge County Affordable Housing Corp., Series 2003 5.42%, 12/1/32 | 4,060,000 | |||||||||
910,000 | Union City, Tennessee Industrial Development Board (Cobank LLC Project) 5.36%, 1/1/25 | 910,000 | |||||||||
2,700,000 | Village Green Finance Co. 5.32%, 11/1/22 | 2,700,000 | |||||||||
Total Taxable Variable Rate Demand Notes (cost $88,736,000) | 88,736,000 | ||||||||||
Time Deposits – 7.2% | |||||||||||
48,000,000 | BNP Paribas, Grand Cayman 5.32%, 5/1/07 | 48,000,000 | |||||||||
48,300,000 | Calyon, Grand Cayman 5.32%, 5/1/07 | 48,300,000 | |||||||||
21,000,000 | Dexia Credit Local, Grand Cayman 5.32% - 5.3625%, 5/1/07 | 21,000,000 | |||||||||
Total Time Deposits (cost $117,300,000) | 117,300,000 | ||||||||||
Total Investments (total cost $1,617,270,864) – 99.8% | 1,617,270,864 | ||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.2% | 3,150,828 | ||||||||||
Net Assets – 100% | $ | 1,620,421,692 |
See Notes to Schedules of Investments and Financial Statements.
44 Janus Bond & Money Market Funds April 30, 2007
Janus Government Money Market Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Principal Amount | Value | ||||||||||
U.S. Government Agency Notes - 11.8% | |||||||||||
$ | 2,000,000 | Army & Air Force Exchange 5.31%, 5/30/07ß | $ | 2,000,000 | |||||||
Fannie Mae: | |||||||||||
878,000 | 5.27%, 6/1/07 | 874,016 | |||||||||
4,390,000 | 5.11%, 6/29/07 | 4,353,235 | |||||||||
1,756,000 | 5.011%, 12/28/07 | 1,697,093 | |||||||||
Federal Home Loan Bank System: | |||||||||||
880,000 | 5.32%, 1/11/08 | 880,000 | |||||||||
1,000,000 | 5.40%, 4/9/08 | 1,000,000 | |||||||||
Freddie Mac: | |||||||||||
878,000 | 5.003%, 5/1/07 | 878,000 | |||||||||
878,000 | 5.03%, 5/29/07 | 874,565 | |||||||||
878,000 | 5.075%, 6/22/07 | 871,564 | |||||||||
878,000 | 5.11%, 6/29/07 | 870,647 | |||||||||
2,634,000 | 4.96%, 9/18/07 | 2,583,193 | |||||||||
878,000 | 4.965%, 10/16/07 | 857,657 | |||||||||
878,000 | 4.995%, 11/30/07 | 852,052 | |||||||||
1,756,000 | 5.03%, 12/11/07 | 1,701,041 | |||||||||
Total U.S. Government Agency Notes (cost $20,293,063) | 20,293,063 | ||||||||||
U.S. Government Agency Variable Notes - 11.6% | |||||||||||
1,054,000 | Fannie Mae 5.21%, 6/21/07 | 1,053,962 | |||||||||
Federal Farm Credit Bank: | |||||||||||
878,000 | 5.116%, 7/11/07 | 877,956 | |||||||||
878,000 | 5.235%, 8/1/07 | 877,967 | |||||||||
659,000 | 5.245%, 9/24/07 | 659,101 | |||||||||
1,756,000 | 5.17%, 1/18/08 | 1,755,615 | |||||||||
878,000 | 5.23%, 1/24/08 | 877,875 | |||||||||
878,000 | 5.23%, 2/21/08 | 877,863 | |||||||||
1,756,000 | 5.23%, 3/26/08 | 1,755,692 | |||||||||
Federal Home Loan Bank System: | |||||||||||
1,760,000 | 5.24%, 7/18/07 | 1,759,952 | |||||||||
880,000 | 5.176%, 11/15/07 | 880,000 | |||||||||
2,635,000 | 5.165%, 3/14/08 | 2,634,107 | |||||||||
Freddie Mac: | |||||||||||
2,633,000 | 5.22%, 6/19/07 | 2,632,897 | |||||||||
270,000 | 5.215%, 7/6/07 | 269,990 | |||||||||
1,756,000 | 5.1725%, 9/27/07 | 1,755,721 | |||||||||
1,263,784 | 5.32%, 1/15/42 | 1,263,784 | |||||||||
Total U.S. Government Agency Variable Notes (cost $19,932,482) | 19,932,482 | ||||||||||
Repurchase Agreements - 76.6% | |||||||||||
16,000,000 | Bear Stearns & Company, Inc., 5.26% dated 4/30/07, maturing 5/1/07 to be repurchased at $16,002,338 collateralized by $22,105,000 in U.S. Government Agencies 0%, 12/15/36 with a value of $16,322,076 | 16,000,000 | |||||||||
26,300,000 | Bear Stearns & Company, Inc., 5.3625% dated 4/30/07, maturing 5/1/07 to be repurchased at $26,303,918 collateralized by $50,050,000 in U.S. Government Agencies 0%, 10/1/35 with a value of $26,826,270 | 26,300,000 |
Principal Amount | Value | ||||||||||
Repurchase Agreements - (continued) | |||||||||||
$ | 30,700,000 | Credit Suisse Securities (USA) LLC, 5.3325% dated 4/30/07, maturing 5/1/07 to be repurchased at $30,704,547 collateralized by $48,621,295 in U.S. Government Agencies 1.36% - 5.50%, 8/25/35 - 4/25/37 with a value of $31,317,990 | $ | 30,700,000 | |||||||
10,000,000 | ING Financial Markets LLC, 5.25% dated 4/30/07, maturing 5/1/07 to be repurchased at $10,001,458 collateralized by $138,880,000 in U.S. Government Agencies 0%, 4/1/32 - 12/1/34 with a value of $10,200,184 | 10,000,000 | |||||||||
7,000,000 | ING Financial Markets LLC, 5.26% dated 4/30/07, maturing 5/1/07 to be repurchased at $7,001,023 collateralized by $13,905,769 in U.S. Government Agencies 0% - 7.0002%, 5/18/27 - 12/1/34 with a value of $7,140,455 | 7,000,000 | |||||||||
42,000,000 | Societe Generale, New York Branch, 5.3125%; dated 4/30/07, maturing 5/1/07 to be repurchased at $42,006,198 collateralized by $180,866,051 in U.S. Government Agencies 0% - 7.423%, 12/15/13 - 6/1/40 with a value of $42,840,000 | 42,000,000 | |||||||||
Total Repurchase Agreements (cost $132,000,000) | 132,000,000 | ||||||||||
Total Investments (total cost $172,225,545) – 100.0% | 172,225,545 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.0)% | (58,790 | ) | |||||||||
Net Assets – 100% | $ | 172,166,755 |
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2007 45
Janus Tax-Exempt Money Market Fund
Schedule of Investments (unaudited)
As of April 30, 2007
Principal Amount | Value | ||||||||||
Municipal Securities - 99.3% | |||||||||||
Alaska - 0.7% | |||||||||||
$ | 560,000 | North Slope Borough, Alaska, General Obligation Refunding Bonds (MBIA Insured), Series A Variable Rate, 3.08%, 6/30/10 | $ | 560,000 | |||||||
Colorado - 31.0% | |||||||||||
800,000 | Arvada, Colorado Variable Rate, 2.00%, 11/1/20 | 800,000 | |||||||||
340,000 | Aspen Valley Hospital District, Colorado Variable Rate, 2.37%, 10/15/33 | 340,000 | |||||||||
1,540,000 | Aurora, Colorado, Centretech Metropolitan District, Series A Variable Rate, 2.30%, 12/1/28 | 1,540,000 | |||||||||
3,000,000 | Brighton Crossing Metropolitan District No.4 Variable Rate, 2.01%, 12/1/34 | 3,000,000 | |||||||||
7,000,000 | Colorado Educational and Cultural Facilities Authority Revenue (California Baptist University Project) Variable Rate, 2.53%, 9/1/35 | 7,000,000 | |||||||||
1,990,000 | Commerce City, Colorado, Northern Infrastructure General Improvement District, Variable Rate, 3.61%, 12/1/31 | 1,990,000 | |||||||||
200,000 | Denver, Colorado, City and County Certificates of Participation (Wellington E. Webb), Series C2 Variable Rate, 1.88%, 12/1/29 | 200,000 | |||||||||
Ebert Metropolitan District Securitization Trust: | |||||||||||
4,000,000 | Series 2004-S1 Variable Rate, 2.01%, 12/1/34 | 4,000,000 | |||||||||
1,300,000 | Series 2005-S1 Variable Rate, 3.66%, 12/1/09 | 1,300,000 | |||||||||
1,000,000 | Four Mile Ranch Metropolitan District No. 1, Colorado Variable Rate, 2.80%, 12/1/35 | 1,000,000 | |||||||||
2,750,000 | NBC Metropolitan District, Colorado Variable Rate, 1.96%, 12/1/30 | 2,750,000 | |||||||||
23,920,000 | |||||||||||
Delaware - 0.3% | |||||||||||
200,000 | Delaware Economic Development Authority, (Archmere Academy Inc. Project) Variable Rate, 3.99%, 7/1/36 | 200,000 | |||||||||
Florida - 2.6% | |||||||||||
2,000,000 | Jacksonville, Florida, Educational Facilities Revenue, (Edward Waters College Project) Variable Rate, 3.97%, 12/1/29 | 2,000,000 | |||||||||
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 - 20.8% | |||||||||||
2,300,000 | Chicago, Illinois, Tax Increment, Series B Variable Rate, 1.95%, 12/1/14 | 2,300,000 |
Principal Amount | Value | ||||||||||
Illinois - (continued) | |||||||||||
Illinois Development Finance Authority Revenue: | |||||||||||
$ | 8,025,000 | (Illinois Central College) Series A, Variable Rate, 4.12%, 6/1/33 | $ | 8,025,000 | |||||||
850,000 | (St. Anthony's Health Center) Program E-1, Variable Rate 3.06%, 10/1/29 | 850,000 | |||||||||
2,800,000 | (Shelby Memorial Hospital Association, Inc.), Series B-1 Variable Rate, 3.84%, 10/1/29 | 2,800,000 | |||||||||
2,035,000 | Illinois Health Facilities Authority Revenue (Blessing Hospital), (FSA Insured) Series B, Variable Rate, 3.51%, 11/15/29 | 2,035,000 | |||||||||
16,010,000 | |||||||||||
Indiana - 5.1% | |||||||||||
1,300,000 | Indiana Health and Educational Facility Financing Authority Revenue, (Charity Obligated Group), Series D Variable Rate, 5.00%, 11/1/26 | 1,316,555 | |||||||||
2,600,000 | Logansport, Indiana, Economic Development Revenue, (Modine Manufacturing Co.) Variable Rate, 2.14%, 1/1/08 | 2,600,000 | |||||||||
3,916,555 | |||||||||||
Iowa - 8.5% | |||||||||||
5,250,000 | Buffalo, Iowa, Pollution Control Revenue (LaFarge Corp.), Series B Variable Rate, 2.12%, 10/1/10 | 5,250,000 | |||||||||
1,275,000 | Iowa Finance Authority Small Business Development Revenue, (Terrace Center Association), Variable Rate, 2.02%, 3/1/22 | 1,275,000 | |||||||||
6,525,000 | |||||||||||
Maryland - 0.1% | |||||||||||
100,000 | Maryland State Health and Higher Educational Facilities Authority Revenue (Edenwald Project), Series B Variable Rate, 3.65%, 1/1/37 | 100,000 | |||||||||
Minnesota - 3.4% | |||||||||||
1,090,000 | St. Paul, Minnesota, Housing and Redevelopment Authority Revenue (Goodwill/Easter Seals) Variable Rate, 2.02%, 8/1/25 | 1,090,000 | |||||||||
1,500,000 | Stillwater, Minnesota, Private School Facilities Revenue, (Catholic Finance Corporation Project) Variable Rate, 2.02%, 12/1/22 | 1,500,000 | |||||||||
2,590,000 | |||||||||||
Nebraska - 2.5% | |||||||||||
1,900,000 | Norfolk, Nebraska, Industrial Development Revenue, (Supervalu, Inc.) Variable Rate, 1.98%, 11/1/14 | 1,900,000 | |||||||||
Nevada - 2.5% | |||||||||||
1,900,000 | Clark County, Nevada, Economic Development Revenue, (Lutheran Secondary School Association) Variable Rate, 2.07%, 2/1/30 | 1,900,000 | |||||||||
Ohio - 2.6% | |||||||||||
2,000,000 | Hilliard, Ohio, School District Bond Anticipation Notes Variable Purpose, 4.50%, 6/14/07 | 2,001,932 |
See Notes to Schedules of Investments and Financial Statements.
46 Janus Bond & Money Market Funds April 30, 2007
Schedule of Investments (unaudited)
As of April 30, 2007
Principal Amount | Value | ||||||||||
Pennsylvania - 6.2% | |||||||||||
$ | 1,200,000 | Cumberland County, Pennsylvania Municipal Authority Revenue (Messiah Village Project) | |||||||||
Variable Rate, 3.19%, 7/1/27 | $ | 1,200,000 | |||||||||
1,800,000 | Delaware County Pennsylvania (Dunwoody Village) Variable Rate, 3.65%, 4/1/30 | 1,800,000 | |||||||||
1,800,000 | Washington County, Pennsylvania, Hospital Authority Revenue Variable Rate, 1.80%, 7/1/31 | 1,800,000 | |||||||||
4,800,000 | |||||||||||
South Carolina - 0.7% | |||||||||||
Piedmont, South Carolina, Municipal Power Agency Electric Revenue Bonds: | |||||||||||
300,000 | Subseries B-6 Variable Rate, 3.64%, 1/1/31 | 300,000 | |||||||||
260,000 | Series B Variable Rate, 1.86%, 1/1/34 | 260,000 | |||||||||
560,000 | |||||||||||
Texas - 3.7% | |||||||||||
500,000 | Duncanville, Texas, Independant School District, 4.50%, 2/15/08 | 503,254 | |||||||||
2,300,000 | Texas State Tax and Revenue Anticipation Notes, 4.50%, 8/31/07 | 2,305,819 | |||||||||
2,809,073 | |||||||||||
Virginia - 0.5% | |||||||||||
400,000 | Arlington County, Virginia (Ballston Public Parking) Variable Rate, 3.93%, 8/1/17 | 400,000 | |||||||||
Washington - 4.8% | |||||||||||
1,720,000 | Washington State Economic Development Revenue, (Benaroya Research) Variable Rate, 3.72%, 12/1/24 | 1,720,000 | |||||||||
2,000,000 | Washington State Housing Finance Community Revenue (Eastside Catholic School) Variable Rate, 3.69%, 7/1/38 | 2,000,000 | |||||||||
3,720,000 | |||||||||||
Wyoming - 0.7% | |||||||||||
500,000 | Sweetwater County, Wyoming, Hospital Revenue, (Memorial Hospital Project) Series B, Variable Rate, 3.52%, 9/1/37 | 500,000 | |||||||||
Total Investments (total cost $76,412,560) – 99.3% | 76,412,560 | ||||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.7% | 514,539 | ||||||||||
Net Assets – 100% | $ | 76,927,099 |
FSA - Financial Security Assurance, Inc.
See Notes to Schedules of Investments and Financial Statements.
Janus Bond & Money Market Funds April 30, 2007 47
Statements of Assets and Liabilities – Bond Funds
As of April 30, 2007 (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) | $ | 99,110 | $ | 889,784 | $ | 702,466 | $ | 220,438 | |||||||||||
Investments at value(1) | $ | 99,182 | $ | 890,775 | $ | 716,071 | $ | 220,807 | |||||||||||
Cash | – | – | 3,288 | 94 | |||||||||||||||
Receivables: | |||||||||||||||||||
Investments sold | 3,120 | 12,309 | 3,955 | 1,123 | |||||||||||||||
Fund shares sold | 130 | 912 | 2,041 | 334 | |||||||||||||||
Dividends | – | – | 2 | – | |||||||||||||||
Interest | 1,125 | 7,380 | 11,518 | 1,874 | |||||||||||||||
Other assets | 13 | 237 | 16 | 326 | |||||||||||||||
Variation margin | – | 30 | – | – | |||||||||||||||
Total Assets | 103,570 | 911,643 | 736,891 | 224,558 | |||||||||||||||
Liabilities: | |||||||||||||||||||
Payables: | |||||||||||||||||||
Collateral for securities loaned (Note 1) | – | 122,427 | 116,210 | 44,398 | |||||||||||||||
Due to Custodian | 8 | 3,525 | – | – | |||||||||||||||
Investments purchased | 7,698 | 25,980 | 17,948 | 5,517 | |||||||||||||||
Fund shares repurchased | 37 | 1,228 | 817 | 288 | |||||||||||||||
Dividends and distributions | 52 | 207 | 268 | 18 | |||||||||||||||
Advisory fees | 2 | 322 | 287 | 40 | |||||||||||||||
Transfer agent fees and expenses | 27 | 192 | 123 | 54 | |||||||||||||||
Professional fees | 8 | 16 | 12 | 8 | |||||||||||||||
Non-interested Trustees' fees and expenses | 2 | 5 | 5 | 3 | |||||||||||||||
Accrued expenses | 18 | 65 | 26 | 28 | |||||||||||||||
Forward currency contracts | – | 60 | – | – | |||||||||||||||
Total Liabilities | 7,852 | 154,027 | 135,696 | 50,354 | |||||||||||||||
Net Assets | $ | 95,718 | $ | 757,616 | $ | 601,195 | $ | 174,204 | |||||||||||
Net Assets Consist of: | |||||||||||||||||||
Capital (par value and paid-in-surplus)* | $ | 98,565 | $ | 776,871 | $ | 607,249 | $ | 176,650 | |||||||||||
Undistributed net investment income/(loss)* | (1 | ) | 868 | 246 | 28 | ||||||||||||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions* | (2,919 | ) | (21,001 | ) | (19,905 | ) | (2,843 | ) | |||||||||||
Unrealized appreciation/(depreciation) of investments and foreign currency translations | 73 | 878 | 13,605 | 369 | |||||||||||||||
Total Net Assets | $ | 95,718 | $ | 757,616 | $ | 601,195 | $ | 174,204 | |||||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 13,708 | 80,134 | 60,434 | 60,215 | |||||||||||||||
Net Asset Value Per Share | $ | 6.98 | $ | 9.45 | $ | 9.95 | $ | 2.89 |
* See Note 4 in Notes to Financial Statements.
(1) Investments at cost and value include $119,997,565, $113,833,835 and $43,509,242 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.
48 Janus Bond & Money Market Funds April 30, 2007
Statements of Operations - Bond Funds
For the six-month period ended April 30, 2007 (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 | $ | 2,207 | $ | 20,793 | $ | 21,815 | $ | 4,161 | |||||||||||
Securities lending income | – | 38 | 125 | 17 | |||||||||||||||
Dividends | – | 291 | 62 | – | |||||||||||||||
Dividends from affiliates | – | 270 | 712 | 117 | |||||||||||||||
Total Investment Income | 2,207 | 21,392 | 22,714 | 4,295 | |||||||||||||||
Expenses: | |||||||||||||||||||
Advisory fees | 238 | 1,953 | 1,638 | 546 | |||||||||||||||
Transfer agent fees and expenses | 111 | 854 | 587 | 214 | |||||||||||||||
Registration fees | 19 | 17 | 24 | 13 | |||||||||||||||
Postage and mailing expenses | 8 | 49 | 23 | 14 | |||||||||||||||
Custodian fees | 4 | – | 9 | 5 | |||||||||||||||
Professional fees | 8 | 16 | 12 | 8 | |||||||||||||||
Non-interested Trustees' fees and expenses | 3 | 13 | 11 | 4 | |||||||||||||||
Printing expenses | 27 | 76 | 42 | 33 | |||||||||||||||
System fees | 25 | 13 | 12 | 11 | |||||||||||||||
Other expenses | 6 | 16 | 13 | 8 | |||||||||||||||
Non-recurring costs (Note 2) | – | – | – | – | |||||||||||||||
Cost assumed by Janus Capital Management LLC (Note 2) | – | – | – | – | |||||||||||||||
Total Expenses | 449 | 3,007 | 2,371 | 856 | |||||||||||||||
Expense and Fee Offset | (4 | ) | (28 | ) | (16 | ) | (8 | ) | |||||||||||
Net Expenses | 445 | 2,979 | 2,355 | 848 | |||||||||||||||
Less: Excess Expense Reimbursement | (183 | ) | – | – | (302 | ) | |||||||||||||
Net Expenses after Expense Reimbursement | 262 | 2,979 | 2,355 | 546 | |||||||||||||||
Net Investment Income/(Loss) | 1,945 | 18,413 | 20,359 | 3,749 | |||||||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | |||||||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 274 | 1,937 | 6,963 | (290 | ) | ||||||||||||||
Net realized gain/(loss) from short sales | – | 17 | – | – | |||||||||||||||
Change in net unrealized appreciation/(depreciation) of investments and foreign currency translations | (982 | ) | 580 | 6,842 | 1,016 | ||||||||||||||
Payment from affiliate (Note 2) | – | 1 | – | – | |||||||||||||||
Net Gain/(Loss) on Investments | (708 | ) | 2,535 | 13,805 | 726 | ||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 1,237 | $ | 20,948 | $ | 34,164 | $ | 4,475 |
See Notes to Financial Statements.
Janus Bond & Money Market Funds April 30, 2007 49
Statements of Changes in Net Assets - Bond Funds
For the six-month period ended April 30, 2007 (unaudited) and for the fiscal year ended October 31, 2006 | Janus Federal Tax-Exempt Fund | Janus Flexible Bond Fund | Janus High-Yield Fund | Janus Short-Term Bond Fund | |||||||||||||||||||||||||||||||
(all numbers in thousands) | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |||||||||||||||||||||||||||
Operations: | |||||||||||||||||||||||||||||||||||
Net investment income/(loss) | $ | 1,945 | $ | 4,062 | $ | 18,413 | $ | 36,164 | $ | 20,359 | $ | 36,181 | $ | 3,749 | $ | 6,644 | |||||||||||||||||||
Net realized gain/(loss) from investment and foreign currency transactions | 274 | (1,066 | ) | 1,937 | (13,156 | ) | 6,963 | (159 | ) | (290 | ) | (1,521 | ) | ||||||||||||||||||||||
Net realized gain/(loss) from futures contracts | – | – | – | 29 | – | – | – | (35 | ) | ||||||||||||||||||||||||||
Net realized gain/(loss) from short sales | – | – | 17 | (6 | ) | – | – | – | – | ||||||||||||||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments and foreign currency translations | (982 | ) | 2,474 | 580 | 14,557 | 6,842 | 11,443 | 1,016 | 2,235 | ||||||||||||||||||||||||||
Payment from affiliate (Note 2) | – | – | 1 | 4 | – | 1 | – | 1 | |||||||||||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 1,237 | 5,470 | 20,948 | 37,592 | 34,164 | 47,466 | 4,475 | 7,324 | |||||||||||||||||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||||||||||||||||||
Net investment income* | (1,945 | ) | (4,063 | ) | (18,498 | ) | (37,948 | ) | (20,337 | ) | (36,157 | ) | (3,741 | ) | (6,649 | ) | |||||||||||||||||||
Net realized gain/(loss) from investment transactions* | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
Net Decrease from Dividends and Distributions | (1,945 | ) | (4,063 | ) | (18,498 | ) | (37,948 | ) | (20,337 | ) | (36,157 | ) | (3,741 | ) | (6,649 | ) | |||||||||||||||||||
Capital Share Transactions: | |||||||||||||||||||||||||||||||||||
Shares sold | 6,980 | 12,089 | 69,865 | 100,728 | 116,474 | 123,966 | 21,660 | 35,262 | |||||||||||||||||||||||||||
Redemption fees | N/A | N/A | N/A | N/A | 61 | 110 | N/A | N/A | |||||||||||||||||||||||||||
Reinvested dividends and distributions | 1,633 | 3,446 | 17,034 | 34,502 | 18,429 | 32,287 | 3,609 | 6,407 | |||||||||||||||||||||||||||
Shares repurchased | (10,006 | ) | (31,067 | ) | (98,596 | ) | (303,179 | ) | (59,215 | ) | (179,236 | ) | (27,057 | ) | (68,579 | ) | |||||||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | (1,393 | ) | (15,532 | ) | (11,697 | ) | (167,949 | ) | 75,749 | (22,873 | ) | (1,788 | ) | (26,910 | ) | ||||||||||||||||||||
Net Increase/(Decrease) in Net Assets | (2,101 | ) | (14,125 | ) | (9,247 | ) | (168,305 | ) | 89,576 | (11,564 | ) | (1,054 | ) | (26,235 | ) | ||||||||||||||||||||
Net Assets: | |||||||||||||||||||||||||||||||||||
Beginning of period | 97,819 | 111,944 | 766,863 | 935,168 | 511,619 | 523,183 | 175,258 | 201,493 | |||||||||||||||||||||||||||
End of period | $ | 95,718 | $ | 97,819 | $ | 757,616 | $ | 766,863 | $ | 601,195 | $ | 511,619 | $ | 174,204 | $ | 175,258 | |||||||||||||||||||
Undistributed net investment income/(loss)* | $ | (1 | ) | $ | (1 | ) | $ | 868 | $ | 953 | $ | 246 | $ | 224 | $ | 28 | $ | 20 |
*See Note 4 in Notes to Financial Statements.
See Notes to Financial Statements.
50 Janus Bond & Money Market Funds April 30, 2007
Financial Highlights - Bond Funds
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) | Janus Federal Tax-Exempt Fund | ||||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 7.03 | $ | 6.94 | $ | 7.12 | $ | 7.07 | $ | 7.05 | $ | 7.01 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .14 | .27 | .26 | .23 | .26 | .27 | |||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | (.05 | ) | .09 | (.18 | ) | .05 | .02 | .04 | |||||||||||||||||||
Total from Investment Operations | .09 | .36 | .08 | .28 | .28 | .31 | |||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.14 | ) | (.27 | ) | (.26 | ) | (.23 | ) | (.26 | ) | (.27 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | |||||||||||||||||||||
Payment from affiliate | – | – | – | (1) | – | – | – | ||||||||||||||||||||
Total Distributions and Other | (.14 | ) | (.27 | ) | (.26 | ) | (.23 | ) | (.26 | ) | (.27 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 6.98 | $ | 7.03 | $ | 6.94 | $ | 7.12 | $ | 7.07 | $ | 7.05 | |||||||||||||||
Total Return** | 1.32 | % | 5.31 | % | 1.12 | %(2) | 4.07 | % | 3.97 | % | 4.56 | % | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 95,718 | $ | 97,819 | $ | 111,944 | $ | 132,267 | $ | 183,669 | $ | 230,077 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 95,936 | $ | 104,293 | $ | 121,027 | $ | 151,433 | $ | 228,760 | $ | 148,070 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.56 | %(5) | 0.56 | %(5) | 0.56 | %(5) | 0.62 | %(5) | 0.65 | %(5) | 0.66 | %(5) | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.55 | % | 0.55 | % | 0.55 | % | 0.62 | % | 0.65 | % | 0.65 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.09 | % | 3.89 | % | 3.67 | % | 3.30 | % | 3.58 | % | 3.83 | % | |||||||||||||||
Portfolio Turnover Rates*** | 210 | % | 112 | % | 149 | % | 52 | % | 39 | % | 58 | % | |||||||||||||||
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) | Janus Flexible Bond Fund | ||||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 9.42 | $ | 9.41 | $ | 9.76 | $ | 9.74 | $ | 9.51 | $ | 9.49 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .23 | .42 | .40 | .46 | .46 | .49 | |||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | .03 | .02 | (.34 | ) | .01 | .21 | .02 | ||||||||||||||||||||
Total from Investment Operations | .26 | .44 | .06 | .47 | .67 | .51 | |||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.23 | ) | (.43 | ) | (.41 | ) | (.45 | ) | (.44 | ) | (.49 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | |||||||||||||||||||||
Payment from affiliate | – | (1) | – | (1) | – | (1) | – | (1) | – | – | |||||||||||||||||
Total Distributions and Other | (.23 | ) | (.43 | ) | (.41 | ) | (.45 | ) | (.44 | ) | (.49 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 9.45 | $ | 9.42 | $ | 9.41 | $ | 9.76 | $ | 9.74 | $ | 9.51 | |||||||||||||||
Total Return** | 2.79 | %(2) | 4.80 | %(2) | 0.60 | %(2) | 4.97 | %(2) | 7.12 | % | 5.63 | % | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 757,616 | $ | 766,863 | $ | 935,168 | $ | 1,159,921 | $ | 1,533,940 | $ | 1,585,108 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 760,049 | $ | 827,407 | $ | 1,037,336 | $ | 1,288,903 | $ | 1,731,995 | $ | 1,347,054 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(3)(4) | 0.80 | % | 0.83 | % | 0.78 | % | 0.85 | % | 0.83 | % | 0.81 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(3) | 0.79 | % | 0.82 | % | 0.77 | % | 0.85 | % | 0.83 | % | 0.81 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.89 | % | 4.37 | % | 4.01 | % | 4.27 | % | 4.47 | % | 5.24 | % | |||||||||||||||
Portfolio Turnover Rates*** | 122 | % | 144 | %(6) | 174 | %(6) | 149 | % | 163 | % | 243 | % |
*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% for the fiscal year or period ended 2007, 2006, 2005 and 2004.
(5) The ratio was 0.94% in 2007, 0.97% in 2006, 0.87% in 2005, 0.99% in 2004, 0.90% in 2003 and 0.92% in 2002 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 147% in 2006 and 180% in 2005.
See Notes to Financial Statements.
Janus Bond & Money Market Funds April 30, 2007 51
Financial Highlights - Bond Funds (continued)
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) | Janus High-Yield Fund | ||||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 9.69 | $ | 9.48 | $ | 9.86 | $ | 9.55 | $ | 8.82 | $ | 9.28 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .36 | .71 | .65 | .67 | .64 | .65 | |||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | .26 | .20 | (.38 | ) | .31 | .72 | (.46 | ) | |||||||||||||||||||
Total from Investment Operations | .62 | .91 | .27 | .98 | 1.36 | .19 | |||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.36 | ) | (.70 | ) | (.65 | ) | (.67 | ) | (.64 | ) | (.65 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | – | – | – | – | |||||||||||||||||||||
Redemption fees | – | (1) | – | (1) | – | (1) | – | (1) | .01 | – | (1) | ||||||||||||||||
Payment from affiliate | – | – | (2) | – | (2) | – | – | – | |||||||||||||||||||
Total Distributions and Other | (.36 | ) | (.70 | ) | (.65 | ) | (.67 | ) | (.63 | ) | (.65 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 9.95 | $ | 9.69 | $ | 9.48 | $ | 9.86 | $ | 9.55 | $ | 8.82 | |||||||||||||||
Total Return** | 6.53 | % | 10.00 | %(3) | 2.76 | %(3) | 10.62 | % | 16.00 | % | 1.97 | % | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 601,195 | $ | 511,619 | $ | 523,183 | $ | 557,836 | $ | 768,033 | $ | 573,388 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 551,068 | $ | 490,849 | $ | 548,993 | $ | 582,992 | $ | 842,175 | $ | 490,524 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 0.87 | % | 0.91 | %(6) | 0.88 | % | 0.96 | % | 0.95 | % | 0.96 | % | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 0.86 | % | 0.90 | % | 0.87 | % | 0.96 | % | 0.95 | % | 0.96 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 7.45 | % | 7.37 | % | 6.65 | % | 6.96 | % | 6.90 | % | 7.02 | % | |||||||||||||||
Portfolio Turnover Rates*** | 110 | % | 119 | % | 102 | % | 133 | % | 203 | % | 161 | % | |||||||||||||||
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) | Janus Short-Term Bond Fund | ||||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 2.88 | $ | 2.87 | $ | 2.94 | $ | 2.97 | $ | 2.93 | $ | 2.97 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | .06 | .11 | .08 | .08 | .08 | .10 | |||||||||||||||||||||
Net gain/(loss) on securities (both realized and unrealized) | .01 | .01 | (.06 | ) | .01 | .04 | (.04 | ) | |||||||||||||||||||
Total from Investment Operations | .07 | .12 | .02 | .09 | .12 | .06 | |||||||||||||||||||||
Less Distributions and Other: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.06 | ) | (.11 | ) | (.08 | ) | (.08 | ) | (.08 | ) | (.10 | )(7) | |||||||||||||||
Distributions (from capital gains)* | – | – | (.01 | ) | (.04 | ) | – | – | |||||||||||||||||||
Payment from affiliate | – | – | (2) | – | (2) | – | – | – | |||||||||||||||||||
Total Distributions and Other | (.06 | ) | (.11 | ) | (.09 | ) | (.12 | ) | (.08 | ) | (.10 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 2.89 | $ | 2.88 | $ | 2.87 | $ | 2.94 | $ | 2.97 | $ | 2.93 | |||||||||||||||
Total Return** | 2.54 | % | 4.08 | %(3) | 0.65 | %(3) | 2.94 | % | 4.12 | % | 2.22 | % | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 174,204 | $ | 175,258 | $ | 201,493 | $ | 270,761 | $ | 366,037 | $ | 492,557 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 172,674 | $ | 182,285 | $ | 233,536 | $ | 299,461 | $ | 456,695 | $ | 499,807 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(4)(5) | 0.65 | %(8) | 0.65 | %(8) | 0.65 | %(8) | 0.65 | %(8) | 0.65 | %(8) | 0.65 | %(8) | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(4) | 0.64 | % | 0.64 | % | 0.64 | % | 0.65 | % | 0.65 | % | 0.65 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.38 | % | 3.65 | % | 2.75 | % | 2.64 | % | 2.68 | % | 3.55 | % | |||||||||||||||
Portfolio Turnover Rates*** | 197 | % | 120 | % | 97 | % | 110 | % | 238 | % | 164 | % |
*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 ended.
(3) During the fiscal year ended, Janus Capital and/or Janus Services fully reimbursed the Fund for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%.
(4) See "Explanations of Charts, Tables and Financial Statements."
(5) The effect of non-recurring costs assumed by Janus Capital (Note 2) is included in the ratio of gross expenses to average net assets and was less than 0.01% for the fiscal year or period ended 2007, 2006, 2005 and 2004.
(6) The ratio was 0.93% in 2006 before waiver of certain fees incurred by the Fund.
(7) Dividends (from net investment income) includes tax return of capital, less than $0.01 per share.
(8) The ratio was 1.00% in 2007, 1.06% in 2006, 0.97% in 2005, 1.00% in 2004, 0.91% in 2003 and 0.88% in 2002 before waiver of certain fees incurred by the Fund.
See Notes to Financial Statements.
52 Janus Bond & Money Market Funds April 30, 2007
Statements of Assets and Liabilities - Money Market Funds
As of April 30, 2007 (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 | $ | 1,186,771 | $ | 40,226 | $ | 76,413 | |||||||||
Repurchase agreements | $ | 430,500 | $ | 132,000 | $ | – | |||||||||
Receivables | |||||||||||||||
Fund shares sold | 7,152 | 351 | 260 | ||||||||||||
Interest | 5,145 | 126 | 441 | ||||||||||||
Total Assets | 1,629,568 | 172,703 | 77,114 | ||||||||||||
Liabilities: | |||||||||||||||
Payables: | |||||||||||||||
Due to Custodian | 1,948 | 35 | 8 | ||||||||||||
Fund shares repurchased | 5,684 | 389 | 124 | ||||||||||||
Dividends and distributions | 700 | 9 | 7 | ||||||||||||
Advisory fees | 132 | 14 | 6 | ||||||||||||
Administrative services fees | 663 | 71 | 32 | ||||||||||||
Professional fees | 14 | 8 | 8 | ||||||||||||
Non-interested Trustees' fees and expenses | 5 | 10 | 2 | ||||||||||||
Total Liabilities | 9,146 | 536 | 187 | ||||||||||||
Net Assets | $ | 1,620,422 | $ | 172,167 | $ | 76,927 | |||||||||
Net Assets Consist of: | |||||||||||||||
Capital (par value and paid-in-surplus)* | $ | 1,620,432 | $ | 172,164 | $ | 76,948 | |||||||||
Undistributed net investment income/(loss)* | – | 1 | – | ||||||||||||
Undistributed net realized gain/(loss) from investments* | (10 | ) | 2 | (21 | ) | ||||||||||
Total Net Assets | $ | 1,620,422 | $ | 172,167 | $ | 76,927 | |||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,620,424 | 172,165 | 76,948 | ||||||||||||
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, 2007 53
Statements of Operations - Money Market Funds
For the six-month period ended April 30, 2007 (unaudited) (all numbers in thousands) | Janus Money Market Fund | Janus Government Money Market Fund | Janus Tax-Exempt Money Market Fund | ||||||||||||
Investment Income: | |||||||||||||||
Interest | $ | 39,562 | $ | 4,578 | $ | 1,425 | |||||||||
Total Investment Income | 39,562 | 4,578 | 1,425 | ||||||||||||
Expenses: | |||||||||||||||
Advisory fees | 1,463 | 172 | 76 | ||||||||||||
Professional fees | 6 | 4 | 8 | ||||||||||||
Non-interested Trustees' fees and expenses | 22 | 6 | 3 | ||||||||||||
Administrative services fees | 3,658 | 429 | 190 | ||||||||||||
Non-recurring costs (Note 2) | – | – | – | ||||||||||||
Cost assumed by Janus Capital Management LLC (Note 2) | – | – | – | ||||||||||||
Total Expenses | 5,149 | 611 | 277 | ||||||||||||
Less: Excess Expense Reimbursement | (732 | ) | (86 | ) | (38 | ) | |||||||||
Net Expenses after Expense Reimbursement | 4,417 | 525 | 239 | ||||||||||||
Net Investment Income/(Loss) | 35,145 | 4,053 | 1,186 | ||||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | |||||||||||||||
Net realized gain/(loss) from investment transactions | (10 | ) | 2 | – | |||||||||||
Net Gain/(Loss) on Investments | (10 | ) | 2 | – | |||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 35,135 | $ | 4,055 | $ | 1,186 |
See Notes to Financial Statements.
54 Janus Bond & Money Market Funds April 30, 2007
Statements of Changes in Net Assets - Money Market Funds
For the six-month period ended April 30, 2007 (unaudited) and for the fiscal year ended October 31, 2006 | Janus Money Market Fund | Janus Government Money Market Fund | Janus Tax-Exempt Money Market Fund | ||||||||||||||||||||||||
(all numbers in thousands) | 2007(1) | 2006 | 2007(1) | 2006 | 2007(1) | 2006 | |||||||||||||||||||||
Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | $ | 35,145 | $ | 289,288 | $ | 4,053 | $ | 44,525 | $ | 1,186 | $ | 2,308 | |||||||||||||||
Net realized gain/(loss) from investment transactions | (10 | ) | 12 | 2 | – | – | (9 | ) | |||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 35,135 | 289,300 | 4,055 | 44,525 | 1,186 | 2,299 | |||||||||||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||||||||||
Net investment income* | |||||||||||||||||||||||||||
Investor Shares | (35,147 | ) | (58,753 | ) | (4,053 | ) | (7,454 | ) | (1,186 | ) | (2,176 | ) | |||||||||||||||
Institutional Shares | (10 | ) | (229,324 | ) | N/A | (30,687 | ) | N/A | (132 | ) | |||||||||||||||||
Service Shares | – | (1,199 | ) | N/A | (6,384 | ) | N/A | – | |||||||||||||||||||
Net realized gain/(loss) from investment transactions* | |||||||||||||||||||||||||||
Investor Shares | – | (2 | ) | – | – | – | – | ||||||||||||||||||||
Institutional Shares | N/A | (10 | ) | N/A | – | N/A | – | ||||||||||||||||||||
Service Shares | N/A | – | N/A | – | N/A | – | |||||||||||||||||||||
Net Decrease from Dividends and Distributions | (35,157 | ) | (289,288 | ) | (4,053 | ) | (44,525 | ) | (1,186 | ) | (2,308 | ) | |||||||||||||||
Capital Share Transactions: | |||||||||||||||||||||||||||
Shares sold | |||||||||||||||||||||||||||
Investor Shares | 699,842 | 991,952 | 39,243 | 73,414 | 28,104 | 45,857 | |||||||||||||||||||||
Institutional Shares | 22,247,144 | 38,462,494 | 1,611,593 | 6,103,342 | 124,711 | 76,977 | |||||||||||||||||||||
Service Shares | 13,984 | 55,553 | 164,498 | 758,324 | – | – | |||||||||||||||||||||
Reinvested dividends and distributions | |||||||||||||||||||||||||||
Investor Shares | 33,021 | 57,565 | 3,971 | 7,318 | 1,160 | 2,120 | |||||||||||||||||||||
Institutional Shares | 44,041 | 89,719 | 1,865 | 11,032 | 50 | 92 | |||||||||||||||||||||
Service Shares | 169 | 424 | 740 | 2,391 | – | – | |||||||||||||||||||||
Shares repurchased | |||||||||||||||||||||||||||
Investor Shares | (525,356 | ) | (997,589 | ) | (47,237 | ) | (90,905 | ) | (28,627 | ) | (57,473 | ) | |||||||||||||||
Institutional Shares | (28,608,178 | )(2) | (35,873,239 | ) | (2,149,520 | )(2) | (6,095,962 | ) | (132,699 | )(3) | (71,135 | ) | |||||||||||||||
Service Shares | (48,559 | )(2) | (48,419 | ) | (330,717 | )(2) | (724,319 | ) | (11 | )(3) | – | ||||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | (6,143,892 | ) | 2,738,460 | (705,564 | ) | 44,635 | (7,312 | ) | (3,562 | ) | |||||||||||||||||
Net Increase/(Decrease) in Net Assets | (6,143,914 | ) | 2,738,472 | (705,562 | ) | 44,635 | (7,312 | ) | (3,571 | ) | |||||||||||||||||
Net Assets: | |||||||||||||||||||||||||||
Beginning of period | 7,764,336 | 5,025,864 | 877,729 | 833,094 | 84,239 | 87,810 | |||||||||||||||||||||
End of period | $ | 1,620,422 | $ | 7,764,336 | $ | 172,167 | $ | 877,729 | $ | 76,927 | $ | 84,239 | |||||||||||||||
Undistributed net investment income/(loss)* | $ | – | $ | 12 | $ | 1 | $ | – | $ | – | $ | – |
(1) Period from November 1, 2006 through February 23, 2007 for Institutional Shares and Service Shares.
(2) A reorganization of the Institutional Shares and Service Shares occurred at the close of business on February 23, 2007. All Capital and Shares were transferred to the corresponding classes of Janus Institutional Money Market Fund and Janus Institutional Government Money Market Fund. See Note 1 in Notes to Financial Statements.
(3) A liquidation of the Institutional Shares and Service Shares occured at the close of business on February 23, 2007. See Note 1 in Notes to Financial Statements.
* See Note 4 in Notes to Financial Statements.
See Notes to Financial Statements.
Janus Bond & Money Market Funds April 30, 2007 55
Financial Highlights - Money Market Funds
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) | Janus Money Market Fund | ||||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
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 | .04 | .02 | .01 | .01 | .02 | |||||||||||||||||||||
Net gain/(loss) on investments (both realized and unrealized) | – | (1) | – | (1) | – | (1) | – | (1) | – | (1) | – | (1) | |||||||||||||||
Total from Investment Operations | .02 | .04 | .02 | .01 | .01 | .02 | |||||||||||||||||||||
Less Distributions: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.02 | ) | (.04 | ) | (.02 | ) | (.01 | ) | (.01 | ) | (.02 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | (1) | – | (1) | – | (1) | – | (1) | – | (1) | ||||||||||||||||
Total Distributions | (.02 | ) | (.04 | ) | (.02 | ) | (.01 | ) | (.01 | ) | (.02 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total Return** | 2.41 | % | 4.39 | % | 2.41 | % | 0.75 | % | 0.79 | % | 1.53 | % | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 1,620,422 | $ | 1,412,927 | $ | 1,360,997 | $ | 1,588,804 | $ | 2,197,167 | $ | 3,041,637 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 1,475,548 | $ | 1,362,170 | $ | 1,449,569 | $ | 1,790,472 | $ | 2,658,402 | $ | 3,180,307 | |||||||||||||||
Ratio of Gross 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 Expenses to Average Net Assets***(2) | 0.60 | % | 0.60 | % | 0.60 | % | 0.60 | % | 0.60 | % | 0.60 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.80 | % | 4.31 | % | 2.36 | % | 0.74 | % | 0.80 | % | 1.53 | % | |||||||||||||||
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) | Janus Government Money Market Fund | ||||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
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 | .04 | .02 | .01 | .01 | .01 | |||||||||||||||||||||
Net gains/(losses) on securities | – | (1) | – | – | (1) | – | (1) | – | – | (1) | |||||||||||||||||
Total from Investment Operations | .02 | .04 | .02 | .01 | .01 | .01 | |||||||||||||||||||||
Less Distributions: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.02 | ) | (.04 | ) | (.02 | ) | (.01 | ) | (.01 | ) | (.01 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | – | (1) | – | (1) | – | – | (1) | ||||||||||||||||||
Total Distributions | (.02 | ) | (.04 | ) | (.02 | ) | (.01 | ) | (.01 | ) | (.01 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total Return** | 2.37 | % | 4.31 | % | 2.34 | % | 0.68 | % | 0.72 | % | 1.49 | % | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 172,167 | $ | 176,188 | $ | 186,361 | $ | 224,084 | $ | 313,691 | $ | 447,313 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 172,884 | $ | 176,580 | $ | 198,231 | $ | 253,183 | $ | 388,077 | $ | 431,132 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 0.61 | %(5) | 0.61 | %(5) | 0.61 | %(5) | 0.60 | %(5) | 0.60 | %(5) | 0.60 | %(5) | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.61 | % | 0.61 | % | 0.61 | % | 0.60 | % | 0.60 | % | 0.60 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.73 | % | 4.22 | % | 2.29 | % | 0.66 | % | 0.73 | % | 1.48 | % |
*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 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% for the fiscal year or period ended 2007, 2006, 2005 and 2004.
(4) The ratio was 0.70% in 2007, 0.70% in 2006, 0.70% in 2005, 0.70% in 2004, 0.70% in 2003 and 0.70% in 2002 before waiver of certain fees incurred by the Fund.
(5) The ratio was 0.71% in 2007, 0.71% in 2006, 0.71% in 2005, 0.70% in 2004, 0.70% in 2003 and 0.70% in 2002 before waiver of certain fees incurred by the Fund.
See Notes to Financial Statements.
56 Janus Bond & Money Market Funds April 30, 2007
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) | Janus Tax-Exempt Money Market Fund | ||||||||||||||||||||||||||
and through each fiscal year ended October 31 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||
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 | .02 | .01 | .01 | .01 | |||||||||||||||||||||
Net gains/(losses) on securities | – | (1) | – | (1) | – | (1) | – | (1) | – | (1) | – | ||||||||||||||||
Total from Investment Operations | .02 | .03 | .02 | .01 | .01 | .01 | |||||||||||||||||||||
Less Distributions: | |||||||||||||||||||||||||||
Dividends (from net investment income)* | (.02 | ) | (.03 | ) | (.02 | ) | (.01 | ) | (.01 | ) | (.01 | ) | |||||||||||||||
Distributions (from capital gains)* | – | – | – | – | (1) | – | (1) | – | |||||||||||||||||||
Total Distributions | (.02 | ) | (.03 | ) | (.02 | ) | (.01 | ) | (.01 | ) | (.01 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||||
Total Return** | 1.55 | % | 2.81 | % | 1.63 | % | 0.59 | % | 0.64 | % | 1.09 | % | |||||||||||||||
Net Assets, End of Period (in thousands) | $ | 76,927 | $ | 76,295 | $ | 85,799 | $ | 107,386 | $ | 140,087 | $ | 187,272 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $ | 76,744 | $ | 78,564 | $ | 96,230 | $ | 120,544 | $ | 173,152 | $ | 192,498 | |||||||||||||||
Ratio of Gross Expenses to Average Net Assets***(2)(3) | 0.63 | %(4) | 0.65 | %(4) | 0.62 | %(4) | 0.61 | %(4) | 0.60 | %(4) | 0.60 | %(4) | |||||||||||||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.63 | % | 0.65 | % | 0.62 | % | 0.61 | % | 0.60 | % | 0.60 | % | |||||||||||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 3.12 | % | 2.77 | % | 1.60 | % | 0.59 | % | 0.65 | % | 1.08 | % |
*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% for the fiscal year or period ended 2007, 2006, 2005 and 2004.
(4) The ratio was 0.73% in 2007, 0.75% in 2006, 0.72% in 2005, 0.71% in 2004, 0.70% in 2003 and 0.70% in 2002 before waiver of certain fees incurred by the Fund.
See Notes to Financial Statements.
Janus Bond & Money Market Funds April 30, 2007 57
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. | ||||||
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. | ||||||
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. | ||||||
** 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.
ß Security is illiquid.
# Loaned security; a portion or all of the security is on loan as of April 30, 2007.
† The security is purchased with the cash collateral received from Securities on Loan (Note 1).
58 Janus Bond & Money Market Funds April 30, 2007
ºº Schedule of Fair Valued Securities (as of April 30, 2007)
Value | Value as a % of Net Assets | ||||||||||
Janus High-Yield Fund | |||||||||||
Progressive Gaming Corp. - expires 8/15/08 | $ | 120,940 | 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 (as of April 30, 2007)
Acquisition Date | Acquisition Cost | Value | Value as a % of Net Assets | ||||||||||||||||
Janus Federal Tax-Exempt Fund | |||||||||||||||||||
Spanish Fork City, Utah, Charter School Revenue | |||||||||||||||||||
(American Leadership Academy), 5.55% due 11/15/21 | 11/6/06 | $ | 1,007,620 | $ | 1,030,360 | 1.1 | % | ||||||||||||
Janus Flexible Bond Fund | |||||||||||||||||||
Americo Life, Inc., 7.875% | |||||||||||||||||||
notes, due 5/1/13 (144A) | 4/25/03 - 10/5/06 | $ | 1,342,577 | $ | 1,379,084 | 0.2 | % | ||||||||||||
Idearc, Inc., 8.00% senior notes, due 11/15/16 (144A) | 11/1/06 | 879,000 | 916,358 | 0.1% | |||||||||||||||
Liberty Mutual Group, 7.00% bonds, due 3/15/34 (144A) | 3/7/07 | 1,782,960 | 1,760,806 | 0.3% | |||||||||||||||
Liberty Mutual Group, 7.50% bonds, due 8/15/36 (144A) | 2/5/07 - 2/7/07 | 990,699 | 975,794 | 0.1% | |||||||||||||||
Source Gas LLC., 5.90% senior notes, due 4/1/17 (144A) | 4/11/07 | 1,335,779 | 1,341,970 | 0.2% | |||||||||||||||
$ | 6,331,015 | $ | 6,374,012 | 0.9 | % | ||||||||||||||
Janus High-Yield Fund | |||||||||||||||||||
Innophos Holdings, Inc., 9.50% | |||||||||||||||||||
senior unsecured notes, due 4/15/12 (144A) | 4/11/07 | $ | 1,550,000 | $ | 1,573,250 | 0.3 | % | ||||||||||||
Progressive Gaming Corp. - expires 8/15/08ºº | 9/26/03 | 167 | 120,940 | 0.0 | % | ||||||||||||||
Steinway Musical Instruments, Inc., 7.00% senior notes, due 3/1/14 (144A) | 9/13/06 - 12/19/06 | 2,825,371 | 2,842,290 | 0.5% | |||||||||||||||
Titan Petrochemicals Group, Ltd., 8.50% company guaranteed notes, due 3/18/12 (144A) | 3/10/05 - 11/1/06 | 1,047,575 | 1,020,712 | 0.2% | |||||||||||||||
$ | 5,423,113 | $ | 5,557,192 | 1.0 | % | ||||||||||||||
Janus Money Market Fund | |||||||||||||||||||
Ares VII CLO, Ltd., Class A-1A | |||||||||||||||||||
5.41%, 5/8/15 (144A) | 4/23/03 | $ | 15,996,000 | $ | 15,996,000 | 1.0 | % | ||||||||||||
BCP Finance Bank, Ltd. 5.36983%, 5/2/12 | 4/4/07 | 20,000,000 | 20,000,000 | 1.2% | |||||||||||||||
Shiprock Finance SPC - SF - 1, Series 2007-3A 5.39%, 4/11/08 (144A) | 3/14/07 | 15,000,000 | 15,000,000 | 0.9% | |||||||||||||||
$ | 50,996,000 | $ | 50,996,000 | 3.1 | % |
The Funds have registration rights for certain restricted securities held as of April 30, 2007. The issuer incurs all registration costs.
Janus Bond & Money Market Funds April 30, 2007 59
Notes to Schedules of Investments (unaudited) (continued)
Aggregate collateral segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales, when-issued securities and/or securities with extended settlement dates as of April 30, 2007 are noted below.
Fund | Aggregate Value | ||||||
Bond | |||||||
Janus Federal Tax-Exempt Fund | $ | 5,534,496 | |||||
Janus Flexible Bond Fund | 6,008,188 | ||||||
Janus High-Yield Fund | 2,626,125 |
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, 2007.
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, 2007
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 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.
Effective February 23, 2007, the Institutional Shares and Service Shares of Janus Money Market Fund and Janus Government Money Market Fund were reorganized into corresponding classes of Janus Institutional Money Market Fund and Janus Institutional Government Money Market Fund, respectively. The Institutional Shares and Service Shares of Janus Tax-Exempt Money Market Fund were liquidated from the Trust. Accordingly, Institutional Shares and Service Shares of Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund are no longer offered for sale.
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, 2007 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. 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 or such other collateral permitted by the Securities and Exchange Commission ("SEC"). Cash collateral may be invested in affiliated money market funds or other accounts advised by Janus Capital to the extent consistent with exemptive relief obtained from the SEC or as permitted by the 1940 Act and rules promulgated thereunder. Cash collateral may also be invested in unaffiliated money market funds or other accounts advised by Janus Capital to the extent consistent with exemptive relief obtained from the SEC or as permitted by the 1940 Act and rules promulgated thereunder. Cash collateral may also be invested in unaff iliated 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, 2007, the following Funds had on loan securities valued as indicated:
Fund | Value at April 30, 2007 | ||||||
Bond | |||||||
Janus Flexible Bond Fund | $ | 119,997,565 | |||||
Janus High-Yield Fund | 113,833,835 | ||||||
Janus Short-Term Bond Fund | 43,509,242 |
As of April 30, 2007, the following Funds received cash collateral for securities lending activity as indicated:
Fund | Cash Collateral at April 30, 2007 | ||||||
Bond | |||||||
Janus Flexible Bond Fund | $ | 122,427,015 | |||||
Janus High-Yield Fund | 116,209,915 | ||||||
Janus Short-Term Bond Fund | 44,397,740 |
As of April 30, 2007, 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, 2007, 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 Fund may be party to an interfund lending agreement between the Fund and other Janus Capital sponsored mutual funds, which permits 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, 2007, there were no outstanding interfund borrowing or lending arrangements for the Funds.
Short Sales
The Funds may engage in "short sales against the box." Short sales against the box involve selling either a security that the Fund owns, or a security equivalent in kind and amount to the security sold short that the Fund has the right to obtain, for delivery at a specified date in the future. The Fund may enter into a short sale against the box to hedge against anticipated declines in the market price of portfolio securities. If the value of the securities sold short increases prior to the scheduled delivery date, the Fund loses the opportunity to participate in the gain. As of April 30, 2007, the Funds were not invested in short sales.
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
62 Janus Bond & Money Market Funds April 30, 2007
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.
As of April 30, 2007, Janus Flexible Bond Fund was invested in forward currency transactions.
Futures Contracts
The Bond Funds may enter into futures contracts. The Bond Funds intend to use such derivative instruments to hedge or protect from adverse movements in securities prices, currency rates or interest rates. The use of futures contracts may involve risks such as the possibility of illiquid markets or imperfect correlation between the 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 a receivable or payable on the Statement of Assets and Liabilities (if applicable). When a contract is closed, a realized gain or loss is recorded 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. As of April 30, 2007, Janus Flexible Bond Fund was invested in futures contracts.
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 Bond Funds were not invested in dollar rolls during the six-month period ended April 30, 2007.
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, the Fund has the right to receive payments of principal, interest and any fees to which it is entitled only from the Lender selling the loan agreement and only upon receipt by the Lender of payments from the borrower. The Fund generally has no right to enforce compliance with the terms of the loan agreement with the borrower. Assignments and participations involve credit, interest rate, and liquidity risk. Interest rates on floating rate securities adjust with general interest rate changes and/or issuer credit quality. The interest rates paid on a floating rate security in which the Fund invests generally are readjusted 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 Fund utilizes an independent third party to value individual bank loans on a daily basis.
The average monthly value of borrowings outstanding under bank loan arrangements during the six-month period ended April 30, 2007 are noted in the table below.
Fund | Average Monthly Value | Rates | |||||||||
Bond | |||||||||||
Janus Flexible Bond Fund | $ | 20,193,318 | 2.10%-8.60988% | ||||||||
Janus High-Yield Fund | 26,726,401 | 0.500%-12.36% | |||||||||
Janus Short-Term Bond Fund | 15,785,004 | 7.06250%-9.50% |
Janus Bond & Money Market Funds April 30, 2007 63
Notes to Financial Statements (unaudited) (continued)
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, 2007, the Bond Funds were not invested in TBA securities.
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 Fund may hold liquid assets as collateral with the Fund's custodian sufficient to cover the purchase price. As of April 30, 2007, the Funds were not 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 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 currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk and market risk. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Equity-Linked Structured Notes
The Funds may invest in equity-linked structured notes. Equity-linked structured notes are derivative securities which are specially designed to combine the characteristics of one or more underlying securities and their equity derivatives in a single note form. The return and/or yield or income component may be based on the performance of the underlying equity securities, an equity index, and/or option positions. Equity-linked structured notes are typically offered in limited transactions by financial institutions in either registered or nonregistered form. An investment in equity-linked structured notes creates exposure to the credit risk of the issuing financial institution, as well as to the market risk of the underlying securities. There is no guaranteed return of principal with these securities and the appreciation potential of these securities may be limited by a m aximum payment or call right. In certain cases, equity-linked structured notes may be more volatile and less liquid than less complex securities or other types of fixed-income securities. Such securities may exhibit price behavior that does not correlate with other fixed-income securities. As of April 30, 2007, the Funds were not invested in equity-linked structured notes.
Initial Public Offerings
The Bond Funds may invest in initial public offerings ("IPOs"). IPOs and other investment techniques may have a magnified performance impact on a fund with a small asset base. A Fund may not experience similar performance as its 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 since these securities may be sensitive to economic changes, political changes or adverse developments specific to the issuer.
Restricted Security Transactions
Restricted securities held by 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 Money Market Funds' net investment income are declared daily and generally distributed monthly. Capital gains, if any, are declared and distributed in December. 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
64 Janus Bond & Money Market Funds April 30, 2007
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.
New Accounting Pronouncements
In July 2006, the Financial Accounting Standards Board ("FASB") issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109" (the "Interpretation"). The Interpretation establishes for all entities, including pass-through entities such as the Funds, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. A calendar year open-end or closed-end fund would implement the interpretation no later than June 29, 2007 (the last business day of the semi-annual reporting period) and will also apply to all open tax years as of the date of effectiveness. Management has recently begun to evaluate the application of the Interpretation to the Funds, and is not in a position at this time to estimate the significance of its impact, if any, on the Funds' financial statements.
In September 2006, the SEC issued Staff Accounting Bulletin ("SAB") No. 108 "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements" (SAB 108). SAB 108 requires that public companies utilize a "dual approach" to assessing the quantitative effects of financial misstatements. This dual approach includes both an income statement focused assessment and a balance sheet focused assessment. The guidance in SAB 108 must be applied to annual financial statements for fiscal years ending after November 15, 2006. Management is currently assessing the impact of adopting SAB 108 on each Fund's financial position or results of operations.
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% |
Until at least March 1, 2008, 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 % | ||||||
Bond | |||||||
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, 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. 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. Effective with purchases on and after May 15, 2007, a 2% redemption fee may be imposed on shares held for 90 days or less. This fee is paid to the Fund rather than Janus Capital, and is designed to deter excessive short-term trading and to offset the brokerage commissions, market impact, and other costs associated with changes in the Fund's asset level and cash flow due to short-term money movements in and out of the Fund. The redemption fee is accounted for as an addition to Paid-in Capital. Total redemption fees received by Janus High-Yield Fund were $61,141 for the six-month period ended April 30, 2007.
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, 2007, Janus Services reimbursed the following Fund as a result of dilutions
Janus Bond & Money Market Funds April 30, 2007 65
Notes to Financial Statements (unaudited) (continued)
caused by incorrectly processed shareholder activity as indicated in the table below.
Fund | |||||||
Bond | |||||||
Janus Flexible Bond Fund | $ | 974 |
During the fiscal year ended October 31, 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 | |||||||
Bond | |||||||
Janus Flexible Bond Fund | $ | 3,786 | |||||
Janus High-Yield Fund | 798 | ||||||
Janus Short-Term Bond Fund | 727 |
During the fiscal year ended October 31, 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.
Fund | |||||||
Bond | |||||||
Janus High-Yield Fund | $ | 6 |
For the six-month period ended April 30, 2007, Janus Capital assumed $18,145 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 Global 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 on July 31, 2004. These non-recurring costs and costs assumed by Janus Capital are shown on the Statement of Operations.
Effective January 1, 2006, the Board of Trustees 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 with the Plan. No deferred fees were paid to any Trustee under the Plan during the six-month period ended April 30, 2007.
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. Total compensation of $59,081 was paid by the Trust during the six-month period ended April 30, 2007. 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 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.
66 Janus Bond & Money Market Funds April 30, 2007
Other Funds managed by Janus Capital may invest in the Money Market Funds. During the six-month period ended April 30, 2007, the following funds recorded distributions from affiliated investment companies as affiliated dividend income, and the had the following affiliated purchases and sales:
Purchases Shares/Cost | Sales Shares/Cost | Dividend Income | Value at 4/30/07 | ||||||||||||||||
Janus Institutional Cash Management Fund - Institutional Shares | |||||||||||||||||||
Janus Flexible Bond Fund | $ | 31,001,405 | $ | 23,462,585 | $ | 45,410 | $ | 7,538,820 | |||||||||||
Janus High-Yield Fund | 44,507,961 | 26,408,871 | 194,029 | 18,099,090 | |||||||||||||||
Janus Short-Term Bond Fund | 5,373,891 | 4,319,041 | 12,062 | 1,054,850 | |||||||||||||||
$ | 80,883,257 | $ | 54,190,497 | $ | 251,501 | $ | 26,692,760 | ||||||||||||
Janus Institutional Cash Reserves Fund | |||||||||||||||||||
Janus Flexible Bond Fund | $ | 42,368,031 | $ | 45,972,031 | $ | 75,949 | $ | – | |||||||||||
Janus High-Yield Fund | 33,606,971 | 39,708,950 | 245,673 | – | |||||||||||||||
Janus Short-Term Bond Fund | 19,347,163 | 21,293,163 | 27,366 | – | |||||||||||||||
$ | 95,322,165 | $ | 106,974,144 | $ | 348,988 | $ | – | ||||||||||||
Janus Institutional Money Market Fund - Institutional Shares | |||||||||||||||||||
Janus Flexible Bond Fund | $ | 79,548,061 | $ | 70,139,861 | $ | 49,213 | $ | 9,408,200 | |||||||||||
Janus High-Yield Fund | 58,439,879 | 40,498,129 | 46,591 | 17,941,750 | |||||||||||||||
Janus Short-Term Bond Fund | 30,925,959 | 21,975,959 | 38,742 | 8,950,000 | |||||||||||||||
$ | 168,913,899 | $ | 132,613,949 | $ | 134,546 | $ | 36,299,950 | ||||||||||||
Janus Money Market Fund - Institutional Shares | |||||||||||||||||||
Janus Flexible Bond Fund | $ | 87,051,625 | $ | 90,785,625 | $ | 99,565 | $ | – | |||||||||||
Janus High-Yield Fund | 75,884,597 | 87,068,964 | 225,308 | – | |||||||||||||||
Janus Short-Term Bond Fund | 26,968,576 | 31,052,475 | 38,653 | – | |||||||||||||||
$ | 189,904,798 | $ | 208,907,064 | $ | 363,526 | $ | – |
3. PURCHASES AND SALES OF INVESTMENT SECURITIES
For the six-month period ended April 30, 2007, 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 | |||||||||||||||
Bond | |||||||||||||||||||
Janus Federal Tax-Exempt Fund | $ | 99,849,915 | $ | 102,700,450 | $ | – | $ | – | |||||||||||
Janus Flexible Bond Fund | 209,824,866 | 203,206,781 | 237,650,581 | 250,679,570 | |||||||||||||||
Janus High-Yield Fund | 342,435,917 | 281,961,002 | 3,537,519 | 3,527,829 | |||||||||||||||
Janus Short-Term Bond Fund | 54,480,473 | 44,519,368 | 109,141,756 | 125,456,935 |
Janus Bond & Money Market Funds April 30, 2007 67
Notes to Financial Statements (unaudited) (continued)
4. FEDERAL INCOME TAX
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, 2007 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) | |||||||||||||||
Bond | |||||||||||||||||||
Janus Federal Tax- Exempt Fund | $ | 99,109,517 | $ | 425,145 | $ | (352,348 | ) | $ | 72,797 | ||||||||||
Janus Flexible Bond Fund | 890,910,331 | 5,892,766 | (6,027,613 | ) | (134,847 | ) | |||||||||||||
Janus High-Yield Fund | 702,659,854 | 16,875,350 | (3,464,633 | ) | 13,410,717 | ||||||||||||||
Janus Short-Term Bond Fund | 220,462,053 | 588,969 | (243,687 | ) | 345,282 | ||||||||||||||
Money Market | |||||||||||||||||||
Janus Money Market Fund | 1,617,270,864 | – | – | – | |||||||||||||||
Janus Government Money Market Fund | 172,225,545 | – | – | – | |||||||||||||||
Janus Tax-Exempt Money Market Fund | 76,412,560 | – | – | – |
Accumulated capital losses noted below represent net capital loss carryovers, as of October 31, 2006, 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, 2006
Fund | October 31, 2008 | October 31, 2010 | October 31, 2012 | October 31, 2013 | October 31, 2014 | Accumulated Capital Losses | |||||||||||||||||||||
Bond | |||||||||||||||||||||||||||
Janus Federal Tax- Exempt Fund | $ | (2,127,380 | ) | $ | – | $ | – | $ | – | $ | (1,065,562 | ) | $ | (3,192,942 | ) | ||||||||||||
Janus Flexible Bond Fund | – | (7,014,730 | ) | – | – | (15,306,508 | ) | (22,321,238 | ) | ||||||||||||||||||
Janus High-Yield Fund | – | (26,150,148 | ) | – | – | – | (26,150,148 | ) | |||||||||||||||||||
Janus Short-Term Bond Fund | – | – | (681,569 | ) | – | (1,853,016 | ) | (2,534,585 | ) | ||||||||||||||||||
Money Market | |||||||||||||||||||||||||||
Janus Money Market Fund | – | – | – | – | – | – | |||||||||||||||||||||
Janus Government Money | – | – | – | – | – | – | |||||||||||||||||||||
Market Fund | – | – | – | – | – | – | |||||||||||||||||||||
Janus Tax-Exempt Money Market Fund | – | – | – | (12,220 | ) | (8,370 | ) | (20,590 | ) |
During the year ended October 31, 2006, the following capital loss carryovers were utilized by the Funds as indicated in the table below.
Fund | Capital Loss Carryover Utilized | ||||||
Janus High-Yield Fund | $ | 368,401 |
5. CAPITAL SHARES TRANSACTIONS
For the six-month period ended April 30, 2007 (unaudited) and the fiscal year ended October 31, 2006 (all numbers in thousands) | Janus Federal Tax-Exempt Fund | Janus Flexible Bond Fund | Janus High-Yield Fund | Janus Short-Term Bond Fund | |||||||||||||||||||||||||||||||
Bond Funds | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |||||||||||||||||||||||||||
Transactions in Fund Shares | |||||||||||||||||||||||||||||||||||
Shares sold | 996 | 1,741 | 7,397 | 10,779 | 11,797 | 12,957 | 7,504 | 12,298 | |||||||||||||||||||||||||||
Reinvested dividends and distributions | 233 | 495 | 1,804 | 3,691 | 1,867 | 3,373 | 1,251 | 2,232 | |||||||||||||||||||||||||||
Shares repurchased | (1,428 | ) | (4,467 | ) | (10,449 | ) | (32,466 | ) | (6,003 | ) | (18,750 | ) | (9,378 | ) | (23,906 | ) | |||||||||||||||||||
Net Increase/(Decrease) in Capital Share Transactions | (199 | ) | (2,231 | ) | (1,248 | ) | (17,996 | ) | 7,661 | (2,420 | ) | (623 | ) | (9,376 | ) | ||||||||||||||||||||
Shares Outstanding, Beginning of Period | 13,907 | 16,138 | 81,382 | 99,378 | 52,773 | 55,193 | 60,838 | 70,214 | |||||||||||||||||||||||||||
Shares Outstanding, End of Period | 13,708 | 13,907 | 80,134 | 81,382 | 60,434 | 52,773 | 60,215 | 60,838 |
68 Janus Bond & Money Market Funds April 30, 2007
For the six-month period ended April 30, 2007 (unaudited) and the fiscal year ended October 31, 2006 (all numbers in thousands) | Janus Money Market Fund | Janus Government Money Market Fund | Janus Tax-Exempt Money Market Fund | ||||||||||||||||||||||||
Money Market Funds | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |||||||||||||||||||||
Transactions in Fund Shares – Investor Shares | |||||||||||||||||||||||||||
Shares sold | 699,835 | 991,952 | 39,243 | 73,414 | 28,104 | 45,857 | |||||||||||||||||||||
Reinvested dividends and distributions | 33,021 | 57,566 | 3,971 | 7,318 | 1,160 | 2,120 | |||||||||||||||||||||
Shares repurchased | (525,357 | ) | (997,589 | ) | (47,237 | ) | (90,905 | ) | (28,627 | ) | (57,474 | ) | |||||||||||||||
Net Increase/(Decrease) in Capital Share Transactions | 207,499 | 51,929 | (4,023 | ) | (10,173 | ) | 637 | (9,497 | ) | ||||||||||||||||||
Shares Outstanding, Beginning of Period | 1,412,925 | 1,360,996 | 176,188 | 186,361 | 76,311 | 85,808 | |||||||||||||||||||||
Shares Outstanding, End of Period | 1,620,424 | 1,412,925 | 172,165 | 176,188 | 76,948 | 76,311 | |||||||||||||||||||||
Transactions in Fund Shares – Institutional Shares | |||||||||||||||||||||||||||
Shares sold | 22,247,144 | 38,462,494 | 1,611,593 | 6,103,342 | 124,711 | 76,977 | |||||||||||||||||||||
Reinvested dividends and distributions | 44,041 | 89,719 | 1,865 | 11,032 | 50 | 92 | |||||||||||||||||||||
Shares repurchased | (28,608,178 | ) | (35,873,238 | ) | (2,149,520 | ) | (6,095,962 | ) | (132,699 | ) | (71,135 | ) | |||||||||||||||
Net Increase/(Decrease) in Fund Shares | (6,316,993 | ) | 2,678,975 | (536,062 | ) | 18,412 | (7,938 | ) | 5,934 | ||||||||||||||||||
Shares Outstanding, Beginning of Period | 6,316,993 | 3,638,018 | 536,062 | 517,650 | 7,938 | 2,004 | |||||||||||||||||||||
Shares Outstanding, End of Period | – | 6,316,993 | – | 536,062 | – | 7,938 | |||||||||||||||||||||
Transactions in Fund Shares – Service Shares | |||||||||||||||||||||||||||
Shares sold | 13,983 | 55,553 | 164,498 | 758,324 | – | – | |||||||||||||||||||||
Reinvested dividends and distributions | 169 | 424 | 740 | 2,391 | – | – | |||||||||||||||||||||
Shares repurchased | (48,559 | ) | (48,419 | ) | (330,717 | ) | (724,319 | ) | (10 | ) | – | ||||||||||||||||
Net Increase/(Decrease) in Fund Shares | (34,407 | ) | 7,558 | (165,479 | ) | 36,396 | (10 | ) | – | ||||||||||||||||||
Shares Outstanding, Beginning of Period | 34,407 | 26,849 | 165,479 | 129,083 | 10 | 10 | |||||||||||||||||||||
Shares Outstanding, End of Period | – | 34,407 | – | 165,479 | – | 10 |
6. PENDING LEGAL MATTERS
In the fall of 2003, the Securities and Exchange Commission ("SEC"), the Office of the New York State Attorney General ("NYAG"), the Colorado Attorney General ("COAG"), and the Colorado Division of Securities ("CDS") announced that they were investigating alleged frequent trading practices in the mutual fund industry. On August 18, 2004, Janus Capital announced that it had reached final settlements with the SEC, the NYAG, the COAG, and the CDS related to such regulators' investigations into Janus Capital's frequent trading arrangements.
A number of civil lawsuits were brought against Janus Capital and certain of its affiliates, the Janus funds, and related entities and individuals based on allegations similar to those announced by the above regulators and were filed in several state and federal jurisdictions. Such lawsuits alleged a variety of theories for recovery including, but not limited to, the federal securities laws, other federal statutes (including ERISA), and various common law doctrines. The Judicial Panel on Multidistrict Litigation transferred these actions to the U.S. District Court for the District of Maryland (the "Court") for coordinated proceedings. On September 29, 2004, five consolidated amended complaints were filed with the Court that generally include: (i) claims by a putative class of investors in certain Janus funds asserting claims on behalf of the investor class (Marini, et al. v. Janus Investment Fund, et al., U.S. District Court, District of Maryland, Case No. 04-CV-00497); (ii) derivative claims by investors in certain Janus funds ostensibly on behalf of such funds (Steinberg et al. v. Janus Capital Management, LLC et al., U.S. District Court, District of Maryland, Case No. 04-CV-00518); (iii) claims on behalf of participants in the Janus 401(k) plan (Wangberger v. Janus Capital Group Inc., 401(k) Advisory Committee, et al., U.S. District Court, District of Maryland, Case No. JFM-05-2711); (iv) claims brought on behalf of sha reholders of Janus Capital Group Inc. ("JCGI") on a derivative basis against the Board of Directors of JCGI (Chasen v. Whiston, et al., U.S. District Court, District of Maryland, Case No. 04-MD-00855); and (v) claims by a putative class of shareholders of JCGI asserting claims on behalf of the shareholders (Wiggins, et al. v. Janus Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No. 04-CV-00818). Each of the five complaints initially named JCGI and/or Janus Capital as a defendant. In addition, the following were also named as defendants in one or more of the actions: Janus Investment Fund ("JIF"), Janus Aspen Series ("JAS"), Janus Adviser Series ("JAD"), Janus Distributors LLC, Enhan ced 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.
Janus Bond & Money Market Funds April 30, 2007 69
Notes to Financial Statements (unaudited) (continued)
On August 25, 2005, the Court entered orders dismissing most of the claims asserted against Janus Capital and its affiliates by fund investors in the Marini and Steinberg cases (actions (i) and (ii) above) except certain claims under Section 10(b) of the Securities Exchange Act of 1934 and under Section 36(b) of the Investment Company Act of 1940, as amended (the "1940 Act"). On August 15, 2006, the Wangberger complaint in the 401(k) plan class action (action (iii) above) was dismissed by the district court with prejudice; the plaintiff appealed that dismissal decision to the United States Court of Appeals for the Fourth Circuit. That appeal is still pending. The Court also dismissed the Chasen lawsuit (action (iv) above) against JCGI's Board of Directors without leave to amend. Finally, a Motion to Dismiss the Wiggins suit (action (v) above) was granted and the matter was dismissed in May 2007.
In addition to the lawsuits described above, the Auditor of the State of West Virginia ("Auditor"), in his capacity as securities commissioner, has initiated administrative proceedings against many of the defendants in the market timing cases (including JCGI and Janus Capital) and, as a part of its relief, is seeking disgorgement and other monetary relief based on similar market timing allegations (In the Matter of Janus Capital Group Inc. et al., Before the Securities Commissioner, State of West Virginia, Summary Order No. 05-1320). The respondents in these proceedings collectively sought a Writ of Prohibition in state court, which was denied. Their subsequent Petition for Appeal was also denied. Consequently, in September 2006, JCGI and Janus Capital filed their answer to the Auditor's summa ry order instituting proceedings and requested a hearing. A hearing is currently scheduled for June 28, 2007. JCGI and Janus Capital, as well as other similarly situated defendants, continue to challenge the statutory authority of the Auditor to bring such an action.
In addition to the "market timing" actions described above, Janus Capital was 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 (Walter Sins, et al. v. Janus Capital Management LLC, U.S. District Court, District of Colorado, Case No. 04-CV-01647-WDM-MEH; Michael Fleisher, et al. v. Janus Capital Management, LLC, 04-CV-02395-MSK-CBS). The action was filed in 2004 by fund investors asserting breach of fiduciary duty under Section 36(b) of the 1940 Act. The plaintiffs sought declaratory and injunctive relief and an unspecified amount of damages. In April 2007, the parties in the litigation joint ly filed a Stipulation Regarding Dismissal of Claims With Prejudice ("Stipulation of Dismissal"), and on May 2, 2007, the Colorado District Court approved the Stipulation of Dismissal and dismissed the case.
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 (Pfeiffer v. Credit Suisse First Boston aka In re Initial Public Offering Antitrust Litigation, U.S. District Court, Southern District of New York, Case No. 01-CV-2014). 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. In March 2006, the defendants, including Janus Capital, filed a Petition for a Writ of Certiorari with the U.S. Supreme Court to review the decision of the U. S. Court of Appeals. The U.S. Supreme Court granted the Petition for a Writ of Certiorari and heard argument on the matter on March 27, 2007. The parties are now awaiting a decision on the matter from the U.S. Supreme Court.
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.
70 Janus Bond & Money Market Funds April 30, 2007
Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to their portfolio securities is available: (i) without charge, upon request, by calling 1-800-525-3713 (toll free); (ii) on the Funds' website at www.janus.com/proxyvoting; and (iii) on the SEC's website at http://www.sec.gov. Additionally, information regarding each Fund's proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through www.janus.com and from the SEC's website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Funds file their complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Funds' Form N-Q: (i) is available on the SEC's website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-3713 (toll free).
Approval of Advisory Agreements During the Period
The Trustees of Janus Investment Fund, more than eighty-five percent of whom have never been affiliated with the adviser ("Independent Trustees"), oversee the management of each of the Funds and, as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the three Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each of the Funds, the Trustees received and reviewed a substantial amount of information provided by Janus Capital and the respective subadvisers in response to requests of the Independent Trustees and their independent legal counsel. They also received and reviewed a considerable amount of information and analysis provided 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 independent legal counsel.
At a meeting held on December 20, 2006, based on their evaluation of the information provided by Janus Capital, the subadvisers and the independent fee consultant and other information, the Trustees determined that the overall arrangements between each Fund and Janus Capital were fair and reasonable in light of the nature, extent and quality of the services provided by Janus Capital, its affiliates and the subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting all of the Trustees unanimously approved the continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, for the period from February 1, 2007 through February 1, 2008 (January 1, 2007 through January 1, 2008 for INTECH Risk-Managed Stock Fund and Janus Global Research Fund), subject to earlier termination as provided in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees' determination to approve the continuation of the agreements are discussed separately below.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective and strategy of each Fund and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, 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 Truste e committees, communicating with shareholders and overseeing the activities of other service providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
The Trustees concluded that: the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements; that, taking into account steps taken to address a small portion of the Funds whose performance lagged that of the median of their peers for certain periods, the quality of those services had been consistent with or superior to quality norms in the industry; and that the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to
Janus Bond & Money Market Funds April 30, 2007 71
Additional Information (unaudited) (continued)
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 performance results of each Fund over various time periods. They reviewed information comparing each Fund's performance with the performance of comparable funds and peer groups identified by Lipper Inc., an independent provider of investment company data, and with the Fund's benchmark index. They concluded that the performance of most Funds was good to very good under current market conditions. Although the performance of some Funds lagged that of the median of their peers for certain periods, the Trustees also concluded that Janus Capital had taken appropriate steps to address those instances of under-performance and that the more recent performance of most of those Funds had been improving.
Costs of Services Provided
The Trustees examined information on the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by Lipper. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and administrative) fees for most of the Funds, in some cases after contractual expense limitations, was below the mean management fee rate of the respective peer group of funds selected by Lipper.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent and the competitive market for mutual funds in different distribution channels. They concluded that the compensation methodology provided a good alignment of the interests of the portfolio managers with the interests of Fund shareholders.
The Trustees also reviewed management fees charged by Janus Capital to its separate account clients and to its subadvised funds (for which Janus Capital provides only services related to portfolio management). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fees for Funds having a similar strategy, the Trustees noted that, under the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administrative services, oversight of the Funds' other service providers, Trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the spread between the average fee rates charged to the Funds and the fee rates that Janus Capital charged to its separate account clients was significantly smaller than the average spread for such fee rates of other advisers, based on publicly available data and research conducted by their independent fee consultant.
In considering the fees charged by Janus Capital, the Trustees noted that, in addition to the previously approved performance fee structure for Janus Worldwide Fund and certain other Funds that would become operative in February 2007, they also had negotiated with Janus Capital a temporary waiver of a portion of the investment advisory fee paid by Janus Worldwide Fund to Janus Capital to provide for a possible reduction in the rate of advisory fee payable by the Fund for the period July 1, 2006 through January 31, 2007 if the investment performance of the Fund should lag that of its benchmark index performance over the applicable performance measurement period.
The Trustees reviewed information on the profitability of Janus Capital and its affiliates of their relationships with each Fund, as well as an explanation of the methodology utilized in allocating various expenses among the Funds and other clients. The Trustees also reviewed the financial statements of Janus Capital's parent company and its corporate structure. In their review, the Trustees considered whether Janus Capital and each subadviser receive adequate incentives to manage the Funds effectively. The Trustees recognized that profitability comparisons among investment advisers are difficult because very little comparative information is publicly available and profitability of any adviser is affected by numerous factors, including the organizational structure of the particular manager, the types of funds and other accounts it manages, possible other lines of business, the methodology for allocating expenses and the adviser's capital str ucture and cost of capital. However, based on the information available and taking those factors into account, the Trustees concluded that Janus Capital's profitability with respect to each Fund in relation to the services rendered was not unreasonable.
The Trustees concluded that the management fees and other compensation payable by each Fund to Janus Capital and its affiliates, as well as the fees paid by Janus Capital 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 and the subadviser charge to other clients. The Trustees also concluded that the overall expense ratio of each Fund was reasonable, taking into account the size of the
72 Janus Bond & Money Market Funds April 30, 2007
Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund and any expense limitations agreed to by Janus Capital.
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of the Funds increase. They noted that, although most Funds pay advisory fees at a fixed rate as a percentage of net assets, without any breakpoints, the management fee rate paid by each Fund, after any contractual expense limitations, was below the mean management fee rate of the Fund's peer group selected by Lipper; and, for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of many of the Funds declined in the past few years, these Funds benefited from having advisory fee rates that remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for several Funds that will cause the effective rate of advisor y fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through lower charges of third-party service providers based on the combined scale of all of the Funds. Based on all of the information they reviewed, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of economies of scale at the current asset level of the Fund.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and that the transfer agent receives compensation directly from the non-money market Funds for services provided. The Trustees also considered Janus Capital's past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary research products and services benefiting those Funds and/or other clients of Janus Capital, as well as Janus Capital's prior agreement not to use any Fund's brokerage transactions to obtain third party research products or services. The Trustees concluded that Janus Capital's use of "soft" commission dollars of a Fund to obtain proprietary research products and services was consistent with regulatory requirements and guidelines and was likely to benefit the Funds. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital may potentially benefit from their relationship with each other in other ways. They 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 any Fund could attract other business to Janus Capital or other Janus funds and that the success of Janus Capital could enhance Janus Capital's ability to serve the Funds.
After full consideration of the above factors as well as other factors, all of the Trustees, including all of the Independent Trustees, concluded that the proposed continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, was in the best interest of the respective Funds and their shareholders.
Janus Bond & Money Market Funds April 30, 2007 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.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized and unsubsidized ratios for the past fiscal year. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting a Fund's unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and/or Janus Services, LLC and reflects a Fund's subsidized expense ratio. Both the total annual fund operating expenses ratio and net annual fund operating expenses ratio are based on average net assets as of the fiscal year ended October 31, 2006. The ratios also include expenses indirectly incurred by the Fund as a result of investing in other investment companies or pooled investments, which are not reflected in the "Financial Highlights" of this report. As a result, these ratios may be higher or lower than those shown in the "Financial Highlights" in this report. All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
2. SCHEDULES OF INVESTMENTS
Following the performance overview section is each Fund's Schedule of Investments. This schedule reports the industry concentrations and types of securities held in each Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
Funds that invest in foreign securities also provide a summary of investments by country. This summary reports the Fund's exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country in which the company is incorporated.
2A. FORWARD CURRENCY CONTRACTS
A table listing forward currency contracts follows each Fund's Schedule of Investments (if applicable). Forward currency contracts are agreements to deliver or receive a preset amount of currency at a future date. Forward currency contracts are used to hedge against foreign currency risk in the Fund's long-term holdings.
The table provides the name of the foreign currency, the settlement date of the contract, the amount of the contract, the value of the currency in U.S. dollars and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the change in currency exchange rates from the time the contract was opened to the last day of the reporting period.
2B. FUTURES
A table listing futures contracts follows each Fund's Schedule of Investments (if applicable). Futures contracts are contracts that obligate the buyer to receive and the seller to deliver an instrument or money at a specified price on a specified date. Futures are used to hedge against adverse movements in securities prices, currency risk or interest rates.
The table provides the name of the contract, number of contracts held, the expiration date, the principal amount, value and the amount of unrealized gain or loss. The amount of unrealized gain or loss reflects the marked-to-market amount for the last day of the reporting period.
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
74 Janus Bond & Money Market Funds April 30, 2007
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.
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 certain 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 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, expense ratios and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income per share, which comprises dividends and interest income earned on securities held by the Fund. Following is the total of gains/(losses), realized and unrealized. Dividends and distributions are then subtracted to arrive at the NAV per share at the end of the period.
The next line reflects the average annual total return reported the last day of the period.
Also included are the expense ratios, or the percentage of average net assets that were used to cover operating expenses during the period. Expense ratios vary across the Funds for a number of reasons, including the differences in management fees, the 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
Janus Bond & Money Market Funds April 30, 2007 75
Explanations of Charts, Tables and
Financial Statements (unaudited) (continued)
of a Fund during the reporting period. Don't confuse this ratio with a Fund's yield. The net investment income ratio is not a true measure of a Fund's yield because it doesn't take into account the dividends distributed to the Fund's investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in a Fund. Portfolio turnover is affected by market conditions, changes in the 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.
76 Janus Bond & Money Market Funds April 30, 2007
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Janus Bond & Money Market Funds April 30, 2007 77
Shareholder Meeting (unaudited)
A Special Meeting of Shareholders of the Funds was held on February 16, 2007. At the meeting, the following matter was 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 result of the Special Meeting of Shareholders is noted below.
Proposal 1
To approve the transactions contemplated under an Agreement and Plan of Reorganization.
Number of Votes | Percentage of Total Outstanding Votes | Percentage of Voted | |||||||||||||||||||||||||||||||||||||||||
Fund | Record Date Votes | Affirmative | Against | Abstain | Affirmative | Against | Abstain | Affirmative | Against | Abstain | |||||||||||||||||||||||||||||||||
Janus Money Market Fund – Investor Shares | 9,217,486,425 | 4,667,332,486 | 61,080,440 | 56,864,335 | 50.64 | % | 0.66 | % | 0.62 | % | 97.54 | % | 1.28 | % | 1.18 | % | |||||||||||||||||||||||||||
Janus Money Market Fund – Institutional Shares | 7,785,595,300 | 4,274,430,895 | 3,716,508 | 13,529,383 | 54.90 | % | 0.05 | % | 0.17 | % | 99.60 | % | 0.09 | % | 0.31 | % | |||||||||||||||||||||||||||
Janus Money Market Fund – Service Shares | 35,069,354 | 26,475,292 | – | – | 75.49 | % | – | – | 100.00 | % | – | �� | – |
Proposal 2
To approve the transactions contemplated under an Agreement and Plan of Reorganization.
Number of Votes | Percentage of Total Outstanding Votes | Percentage of Voted | |||||||||||||||||||||||||||||||||||||||||
Fund | Record Date Votes | Affirmative | Against | Abstain | Affirmative | Against | Abstain | Affirmative | Against | Abstain | |||||||||||||||||||||||||||||||||
Janus Government Money Market Fund – Investor Shares | 900,895,265 | 460,770,245 | 8,326,377 | 5,654,346 | 51.15 | % | 0.92 | % | 0.62 | % | 97.06 | % | 1.75 | % | 1.19 | % | |||||||||||||||||||||||||||
Janus Government Money Market Fund – Institutional Shares | 567,547,749 | 299,234,746 | – | – | 52.72 | % | – | – | 100.00 | % | – | – | |||||||||||||||||||||||||||||||
Janus Government Money Market Fund – Service Shares | 158,304,676 | 114,329,286 | 1,495,136 | – | 72.22 | % | 0.94 | % | – | 98.71 | % | 1.29 | % | – |
78 Janus Bond & Money Market Funds April 30, 2007
Janus Bond & Money Market Funds April 30, 2007 79
Notes
80 Janus Bond & Money Market Funds April 30, 2007
Notes
Janus Bond & Money Market Funds April 30, 2007 81
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 (6/07)
C-0507-333 111-24-102 06-07
2007 Semiannual Report
Janus Smart Portfolios
Janus Smart Portfolio - Growth
Janus Smart Portfolio - Moderate
Janus Smart Portfolio - Conservative
Look Inside. . .
• Portfolio management perspective
• Investment strategy behind your fund
• Fund performance, characteristics and holdings
Table of Contents
Janus Smart Portfolios
Co-Chief Investment Officers' Letter to Shareholders | 1 | ||||||
Useful Information About Your Portfolio Report | 4 | ||||||
Management Commentaries and Schedules of Investments | |||||||
Janus Smart Portfolio - Growth | 5 | ||||||
Janus Smart Portfolio - Moderate | 10 | ||||||
Janus Smart Portfolio - Conservative | 15 | ||||||
Statements of Assets and Liabilities | 20 | ||||||
Statements of Operations | 21 | ||||||
Statements of Changes in Net Assets | 22 | ||||||
Financial Highlights | 23 | ||||||
Notes to Schedules of Investments | 25 | ||||||
Notes to Financial Statements | 26 | ||||||
Additional Information | 38 | ||||||
Explanations of Charts, Tables and Financial Statements | 41 | ||||||
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.
Co-Chief Investment Officers' Letter to the Shareholders
Dear Shareholders,
We would like to thank you for your investment in the Janus Funds. Your support is what drives us in our quest to deliver strong, consistent fund performance.
Major Market Themes
Equity markets delivered healthy gains during the six months ended April 30, 2007, amid continued evidence of strong U.S. economic growth with modest inflation. Despite a brief bout of market volatility in late February and early March, markets rebounded quickly on hopes of monetary easing by the Federal Reserve (Fed). While U.S. corporate profit growth showed signs of slowing, robust mergers and acquisitions (M&A) and private equity transactions continued to provide valuation support to equities in the U.S. and around the globe.
Continued Strong Performance
We are pleased to report that several fund managers continued to deliver strong performance compared to their peers. For the one-year period ended April 30, 2007, 81% of Janus' retail funds ranked within Lipper's top two quartiles based on total returns. For the three-year period, 68% of our retail funds achieved first- or second- quartile Lipper rankings, and 67% ranked in Lipper's top two quartiles for the five-year period. (See complete rankings on page 3).
Investment Team Depth
We're proud of the depth we've built in our investment team over the past few years. Recently, we said farewell to several long-term Janus portfolio managers who announced their retirements. In transitioning the leadership of their portfolios, we're confident that our investment team bench strength will ensure smooth transitions.
Management of Janus Global Life Sciences Fund will reside in the capable hands of Andy Acker. Barney Wilson will assume sole portfolio management responsibilities for Janus Global Technology Fund. In addition, Gibson Smith and Darrell Watters, with more than 33 years of combined investment experience, will co-manage Janus Flexible Bond Fund. Jason Groom, a seasoned fixed-income professional with 13 years of investment experience, will assume co-portfolio management responsibilities with Darrell Watters for Janus Short-Term Bond Fund, previously managed by Gibson Smith. Lastly, Craig Jacobson will join Eric Thorderson as Co-Portfolio Manager of all Janus money market funds, with the exception of Janus Tax-Exempt Money Market Fund for which he will be sole Portfolio Manager.
It's important to note that we will continue to focus on the same investment objectives and employ the same in-depth, fundamental analysis and company-by-company approach to portfolio construction that are Janus hallmarks. We believe all of these individuals possess the skills and experience necessary to lead your Funds to strong performance.
Outlook
Looking ahead, with most U.S. equity indexes near all-time highs at the end of the period, we will closely monitor several fundamental factors for directional cues. First, despite the weakness in the U.S. housing sector and the associated credit quality issues in the subprime mortgage market, the U.S. unemployment rate was near historic lows. We intend to watch the labor market closely for any sign of a slowdown that could impact consumer sentiment and economic growth. Similarly, we plan to monitor the higher-quality prime mortgage market and other areas of consumer lending for any indication of credit quality deterioration.
Second, U.S. corporate profit growth has experienced double-digit gains for several years, which, combined with strong liquidity from corporate M&A and private equity transactions, has supported higher equity valuations. We will continue to watch both the future path of corporate earnings and the overall liquidity in the markets to determine whether current valuations can be sustained.
In summary, while there are both positive and negative factors that could influence the markets in the coming months, we view the fundamental economic outlook as positive. While inflationary concerns and questions
Jonathan Coleman
Co-Chief Investment Officer
Gibson Smith
Co-Chief Investment Officer
Janus Smart Portfolios April 30, 2007 1
Continued
about the strength of consumer spending abound, we feel valuations for equities are reasonable by historic standards. In fact, as overall economic growth slows, investors could place an increasing premium on the shares of companies with strong growth prospects. We believe Janus' fundamental research can be beneficial in such an environment. Regardless of the macroeconomic climate, we remain dedicated to rewarding your confidence in Janus with strong, consistent fund performance.
Sincerely,
Jonathan Coleman
Co-Chief Investment Officer
Gibson Smith
Co-Chief Investment Officer
2 Janus Smart Portfolios April 30, 2007
Lipper Rankings (unaudited)
Lipper Rankings – Based on total return as of 4/30/07 | |||||||||||||||||||||||||||||||||||||||||||||||
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 Fund | |||||||||||||||||||||||||||||||||||||||||||||||
(Inception Date) | |||||||||||||||||||||||||||||||||||||||||||||||
Janus Fund (2/70) | Large-Cap Growth Funds | 5 | 34/723 | 19 | 117/620 | 29 | 147/506 | 38 | 74/195 | 10 | 2/20 | ||||||||||||||||||||||||||||||||||||
Janus Enterprise Fund(1) (9/92) | Mid-Cap Growth Funds | 5 | 26/628 | 11 | 53/499 | 6 | 21/393 | 45 | 72/161 | 34 | 17/49 | ||||||||||||||||||||||||||||||||||||
Janus Orion Fund (6/00) | Multi-Cap Growth Funds | 13 | 62/497 | 2 | 5/395 | 5 | 13/317 | N/A | N/A | 29 | 66/232 | ||||||||||||||||||||||||||||||||||||
Janus Research Fund(1)(2) (5/93) | Large-Cap Growth Funds | 1 | 1/723 | 2 | 9/620 | 3 | 11/506 | 1 | 1/195 | 2 | 1/81 | ||||||||||||||||||||||||||||||||||||
Janus Triton Fund(1) (2/05) | Small-Cap Growth Funds | 33 | 178/536 | N/A | N/A | N/A | N/A | N/A | N/A | 4 | 21/476 | ||||||||||||||||||||||||||||||||||||
Janus Twenty Fund* (4/85) | Large-Cap Growth Funds | 2 | 9/723 | 1 | 3/620 | 1 | 3/506 | 3 | 4/195 | 3 | 1/40 | ||||||||||||||||||||||||||||||||||||
Janus Venture Fund* (4/85) | Small-Cap Growth Funds | 3 | 11/536 | 7 | 29/437 | 10 | 33/364 | 27 | 39/147 | 10 | 1/10 | ||||||||||||||||||||||||||||||||||||
Janus Global Life Sciences Fund (12/98) | Health/Biotechnology Funds | 79 | 134/169 | 50 | 75/151 | 56 | 74/132 | N/A | N/A | 38 | 18/47 | ||||||||||||||||||||||||||||||||||||
Janus Global Technology Fund (12/98) | Science & Technology Funds | 33 | 94/287 | 32 | 83/260 | 52 | 125/241 | N/A | N/A | 27 | 20/75 | ||||||||||||||||||||||||||||||||||||
Janus Balanced Fund(1) (9/92) | Mixed-Asset Target Allocation Moderate Funds | 25 | 102/423 | 17 | 53/319 | 39 | 81/212 | 6 | 6/113 | 4 | 1/29 | ||||||||||||||||||||||||||||||||||||
Janus Contrarian Fund (2/00) | Multi-Cap Core Funds | 1 | 2/897 | 1 | 1/661 | 1 | 2/479 | N/A | N/A | 11 | 31/323 | ||||||||||||||||||||||||||||||||||||
Janus Fundamental Equity Fund(1) (6/96) | Large-Cap Core Funds | 90 | 713/795 | 1 | 10/670 | 7 | 41/567 | 1 | 2/255 | 1 | 1/212 | ||||||||||||||||||||||||||||||||||||
Janus Growth and Income Fund(1) (5/91) | Large-Cap Core Funds | 97 | 772/795 | 12 | 79/670 | 28 | 159/567 | 4 | 9/255 | 6 | 4/76 | ||||||||||||||||||||||||||||||||||||
INTECH Risk-Managed Stock Fund (2/03) | Multi-Cap Core Funds | 49 | 434/897 | 22 | 144/661 | N/A | N/A | N/A | N/A | 32 | 172/548 | ||||||||||||||||||||||||||||||||||||
Janus Mid Cap Value Fund - Inv(1)(3) (8/98) | Mid-Cap Value Funds | 43 | 128/300 | 63 | 147/232 | 41 | 73/178 | N/A | N/A | 6 | 4/68 | ||||||||||||||||||||||||||||||||||||
Janus Small Cap Value Fund - Inv*(3) (10/87) | Small-Cap Core Funds | 14 | 98/713 | 74 | 410/556 | 81 | 350/432 | 11 | 16/145 | 16 | 21/132 | ||||||||||||||||||||||||||||||||||||
Janus Federal Tax-Exempt Fund(1) (5/93) | General Municipal Debt Funds | 56 | 135/241 | 71 | 164/230 | 72 | 155/216 | 79 | 109/137 | 80 | 55/68 | ||||||||||||||||||||||||||||||||||||
Janus Flexible Bond Fund(1) (7/87) | Intermediate Investment Grade Debt Funds | 38 | 198/530 | 52 | 226/442 | 18 | 65/380 | 31 | 54/174 | 24 | 6/24 | ||||||||||||||||||||||||||||||||||||
Janus High-Yield Fund(1) (12/95) | High Current Yield Funds | 40 | 174/443 | 39 | 146/378 | 68 | 209/308 | 16 | 20/127 | 5 | 5/99 | ||||||||||||||||||||||||||||||||||||
Janus Short-Term Bond Fund(1) (9/92) | Short Investment Grade Debt Funds | 53 | 126/237 | 51 | 101/199 | 46 | 65/142 | 41 | 32/79 | 54 | 13/24 | ||||||||||||||||||||||||||||||||||||
Janus Global Opportunities Fund(1) (6/01) | Global Funds | 33 | 132/399 | 94 | 281/301 | 85 | 198/234 | N/A | N/A | 24 | 49/209 | ||||||||||||||||||||||||||||||||||||
Janus Global Research Fund(1)(4) (2/05) | Multi-Cap Growth Funds | 4 | 15/497 | N/A | N/A | N/A | N/A | N/A | N/A | 1 | 4/424 | ||||||||||||||||||||||||||||||||||||
Janus Overseas Fund(1) (5/94) | International Funds | 1 | 1/987 | 1 | 1/803 | 2 | 12/661 | 4 | 11/280 | 1 | 1/117 | ||||||||||||||||||||||||||||||||||||
Janus Worldwide Fund(1) (5/91) | Global Funds | 7 | 25/399 | 90 | 270/301 | 96 | 225/234 | 69 | 66/96 | 32 | 5/15 | ||||||||||||||||||||||||||||||||||||
Janus Smart Portfolio - Growth (12/05) | Mixed-Asset Target Allocation Growth Funds | 11 | 64/609 | N/A | N/A | N/A | N/A | N/A | N/A | 7 | 41/598 | ||||||||||||||||||||||||||||||||||||
Janus Smart Portfolio - Moderate (12/05) | Mixed-Asset Target Allocation Moderate Funds | 18 | 73/423 | N/A | N/A | N/A | N/A | N/A | N/A | 9 | 35/417 | ||||||||||||||||||||||||||||||||||||
Janus Smart Portfolio - Conservative (12/05) | Mixed-Asset Target Allocation Conservative Funds | 8 | 28/365 | N/A | N/A | N/A | N/A | N/A | N/A | 4 | 11/344 |
(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)Formerly named Janus Mercury Fund.
(3)Rating is for the Investor Share class only; other classes may have different performance characteristics.
(4)Formerly named Janus Research Fund.
*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, 2007 3
Useful Information About Your Portfolio Report
Management Commentaries
The Management Commentaries in this report include valuable insight from the Portfolios' manager as well as statistical information to help you understand how your Portfolio's performance and characteristics stack up against those of comparable indices.
Please keep in mind that the opinions expressed by the Portfolios' manager in the Management Commentaries are just that: opinions. They are a reflection of his best judgment at the time this report was compiled, which was April 30, 2007. As the investing environment changes, so could his opinions. These views are unique to the manager and aren't necessarily shared by his 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 Management Commentary within this Semiannual Report. Please refer to this information when reviewing the Expense Example for each Portfolio.
Example
As a shareholder of a Portfolio, you incur two types of costs: (1) transaction costs, such as underlying funds' redemption fees (where applicable) (and any related exchange fees) and (2) ongoing costs, including management fees and other Portfolio expenses. The example is intended to help you understand your ongoing costs (in dollars) of investing in a Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the period from November 1, 2006 to April 30, 2007.
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, 2008. 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.
4 Janus Smart Portfolios April 30, 2007
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.
Janus Smart Portfolio – Growth gained 10.95% for the six-month period ending April 30, 2007, compared to the S&P 500® Index's return of 8.60% for the same period. The Portfolio outpaced its secondary benchmark, the internally calculated, hypothetical Growth Allocation Index, which returned 9.87%. These results were consistent with the Portfolio's objective, which is to provide exposure to both stocks and bonds with a clear emphasis on growth of capital.
Dan Scherman
portfolio manager
Market Review
Equity markets delivered healthy gains during the period amid continued evidence of strong U.S. economic growth with modest inflation. After a brief period of market volatility in late February and early March, markets rebounded quickly on hopes of monetary easing by the Federal Reserve. While U.S. corporate profit growth showed signs of slowing, robust mergers and acquisitions and private equity transactions continued to provide key valuation support to equities in the U.S. and around the globe.
Portfolio Strategy
There were no substantial changes to the portfolio's composition or strategy during the period. Janus Smart Portfolio – Growth is structured as a "fund of funds" portfolio that provides investors with broad, diversified exposure to various types of investments with a clear emphasis on growth. The Portfolio is also designed to blend the two core competencies Janus enjoys as an organization: mathematically driven, risk-managed strategies and fundamentally driven, growth-oriented investments. I believe that combining these two very different approaches in a single investment can produce a Portfolio with a unique and powerful performance profile.
Our investment process involves setting return expectations for a broad range of possible Janus mutual funds that the analyst team and I believe best represents the full opportunity set available to today's investor. Then, acting in conjunction with an outside consultant, we establish an ideal "model" portfolio based upon the specific risk/return objective of Janus Smart Portfolio – Growth. Finally, we select our desired exposure.
At period end, approximately 81.3% of the Portfolio was allocated to the equity funds, with the remaining 18.7% of the Portfolio invested in the fixed-income funds. Under normal market conditions, a broadly diversified portfolio attempts to buffer the risk that an all-stock portfolio might ordinarily bear. The allocations assigned to each selected underlying fund were consistent with our view of market conditions and the long-term trade-off between risk and reward that each of these investment types represents. However, as a result of changing market conditions, both the mix of underlying funds and the allocations to these funds will change from time to time.
Portfolio Review
The majority of the equity fund holdings gained. One standout was the position in Janus Overseas Fund, which benefited from strength in international markets – particularly in developing countries such as China, India and South Korea. Just as with the bond fund holdings, we invested in Janus Overseas Fund for very specific reasons that have as much to do with our desired asset allocation targets as they did with its ability to potentially generate returns. As the Portfolio's primary source of non-U.S. exposure, I felt it was critical that Janus Overseas Fund maintain a return profile that was more in synch with international markets than it was with U.S. markets, thereby providing the geographical diversification I feel is necessary for the Portfolio to deliver on its intended asset allocation goals. This period, Janus Overseas Fund proved up to that task. The investments in Janus Twenty Fund and Janus Research Fund also posted strong n umbers in the period.
While positions in Janus Flexible Bond Fund and Janus High-Yield Fund performed well for us in previous periods, these positions were among our weaker performers this period. This is not altogether surprising given the current environment for bonds, which is characterized by an inverted yield curve and lingering unease about the direction of interest rates in general. More specific to the high-yield market, unusually tight credit spreads also acted as a headwind for this specialized and sometimes challenging segment of the fixed-income market. Given all this, however, the Fund's allocation to bonds continued to fulfill its primary purpose, which is to act as a counter-balance to the natural volatility that our equity positions introduce into returns. For that reason, I intend for them to continue to play an important role in the portfolio.
Janus Smart Portfolios April 30, 2007 5
Janus Smart Portfolio – Growth (unaudited)
Investment Strategy and Outlook
We plan to continue to monitor market conditions as well as the performance and composition of the underlying funds in which we invest for directional cues. However, all Janus Smart Portfolios (including this one) are designed to be long-term investment vehicles, and we firmly believe that excessive trading in response to short-term market conditions or to chase the latest investment fad almost always proves counter-productive. Accordingly, we expect to make only relatively modest changes to the portfolio in coming months.
Instead, we will remain focused on trying to ensure that the Portfolio fulfills its mandate of delivering access to some of the best strategies Janus has to offer while at the same time maintaining broad exposure to a wide range of asset classes. It remains a primary goal to provide these things in a professionally allocated, systematically re-balanced and risk-controlled investment vehicle.
In closing, thank you for your investment in Janus Smart Portfolio – Growth.
Janus Smart Portfolio – Growth (% of Net Assets)
Janus Overseas Fund | 24.5 | % | |||||
Janus Flexible Bond Fund | 15.8 | % | |||||
Janus Adviser INTECH Risk-Managed Value Fund - I Shares | 13.4 | % | |||||
Janus Adviser INTECH Risk-Managed Growth Fund - I Shares | 13.2 | % | |||||
Janus Growth and Income Fund | 9.7 | % | |||||
Janus Twenty Fund | 8.1 | % | |||||
Janus Research Fund(1) | 7.3 | % | |||||
Janus Orion Fund | 5.1 | % | |||||
Janus High-Yield Fund | 2.9 | % |
(1) Formerly named Janus Mercury Fund.
Janus Smart Portfolio – Growth At a Glance
Asset Allocation – (% of Net Assets) | |||
As of April 30, 2007 |
6 Janus Smart Portfolios April 30, 2007
(unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Since Inception* | Total Annual Fund Operating Expenses | Net Annual Fund Operating Expenses | |||||||||||||||||||
Janus Smart Portfolio - Growth | 10.95 | % | 15.11 | % | 18.82 | % | 1.14 | % | 1.00 | % | |||||||||||||
S&P 500® Index | 8.60 | % | 15.24 | % | 15.89 | % | |||||||||||||||||
Growth Allocation Index | 9.87 | % | 14.60 | % | 17.14 | % | |||||||||||||||||
Lipper Quartile | – | 1 | st | 1 | st | ||||||||||||||||||
Lipper Ranking - based on total return for Mixed-Asset Target Allocation Growth Funds | – | 64/609 | 41/598 |
Visit janus.com to view current performance and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
A Portfolio which redeems or exchanges certain underlying funds' shares held for three months or less may be subject to an underlying fund's 2.00% redemption fee, if any. Effective for underlying fund shares purchased on or after May 15, 2007, the period during which a redemption fee may apply will change from three months to 90 days.
Janus Capital has contractually agreed to waive the Portfolio's total operating expenses (excluding any expenses of an underlying fund, brokerage commissions, interest, taxes, and extraordinary expenses) to a certain limit until at least March 1, 2008. For a period of three years subsequent to the Portfolios' commencement of operations, Janus Capital may recover from each Portfolio, fees and expenses previously waived or reimbursed if that Portfolio's expense ratio, including recovered expenses, falls below the respective expense limit. The expense waiver is detailed in the Statement of Additional Information. Total returns shown include fee waivers and without such waivers total returns would have been lower.
The Portfolio's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. Contractual waivers agreed to by Janus Capital are included under "Net Annual Fund Operating Expenses." All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce transfer agent expenses.
An underlying fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Portfolio may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
Because Janus Capital is the adviser to the Janus Smart Portfolios and to the underlying funds held within the Portfolios, it is subject to certain potential conflicts of interest when allocating the assets of the Portfolios among underlying Janus funds.
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.
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.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Portfolio's holdings may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – December 30, 2005
Janus Smart Portfolios April 30, 2007 7
Janus Smart Portfolio – Growth (unaudited)
Portfolio Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Portfolio and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Portfolio Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,109.50 | $ | 1.31 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,023.55 | $ | 1.25 |
*Expenses are equal to the annualized expense ratio of 0.25% 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, 2007
Janus Smart Portfolio – Growth
Schedule of Investments (unaudited)
As of April 30, 2007
Shares | Value | ||||||||||
Mutual Funds(1) - 100.0% | |||||||||||
Equity Funds - 81.3% | |||||||||||
1,209,826 | Janus Adviser INTECH Risk-Managed Growth Fund - I Shares | $ | 17,736,042 | ||||||||
1,465,287 | Janus Adviser INTECH Risk-Managed Value Fund - I Shares | 18,023,032 | |||||||||
324,631 | Janus Growth and Income Fund | 13,076,141 | |||||||||
642,424 | Janus Orion Fund | 6,893,207 | |||||||||
661,936 | Janus Overseas Fund | 33,017,344 | |||||||||
348,923 | Janus Research Fund | 9,780,320 | |||||||||
185,804 | Janus Twenty Fund | 10,856,506 | |||||||||
109,382,592 | |||||||||||
Fixed-Income Funds - 18.7% | |||||||||||
2,245,428 | Janus Flexible Bond Fund | 21,219,295 | |||||||||
388,615 | Janus High-Yield Fund | 3,866,726 | |||||||||
25,086,021 | |||||||||||
Total Investments (total cost $121,875,076) – 100.0% | 134,468,613 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.0)% | (17,089 | ) | |||||||||
Net Assets – 100% | $ | 134,451,524 |
(1) The Portfolio invests in mutual funds within the Janus family of funds and they may be deemed to be under common control because they share the same Board of Trustees.
See Notes to Schedules of Investments and Financial Statements.
Janus Smart Portfolios April 30, 2007 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.
Performance Overview
Janus Smart Portfolio – Moderate gained 8.67% for the six-month period ended April 30, 2007. This compares to a return of 8.60% by the S&P 500® Index, the Portfolio's benchmark for the same period. The Portfolio outpaced the 7.80% return by its secondary benchmark, the internally calculated, hypothetical Moderate Allocation Index. These results were consistent with the Portfolio's objective, which is to provide exposure to both stocks and bonds while emphasizing the potential downside protection and income typically offered by fixed-income securities.
Dan Scherman
portfolio manager
It is important to me that the Portfolio outperform the Moderate Allocation Index, a benchmark that more closely resembles the target asset allocation established for the Portfolio. We accomplished that goal during the period, and we will strive to continue to do so in the future.
Market Review
Equity markets delivered healthy gains during the period amid continued evidence of strong U.S. economic growth with modest inflation. After a brief period of market volatility in late February and early March, markets rebounded quickly on hopes of monetary easing by the Federal Reserve (Fed). While U.S. corporate profit growth showed signs of slowing, robust mergers and acquisitions (M&A) and private equity transactions continued to provide key valuation support to equities in the U.S. and around the globe.
Portfolio Strategy
There were no substantial changes to the Portfolio's composition or strategy during the period. Janus Smart Portfolio – Moderate is structured as a "fund of funds" portfolio that attempts to provide investors with broad, diversified exposure to various types of investments with an emphasis on modest growth. Our investment process involves setting return expectations for a broad range of Janus mutual funds that we believe best represent the full opportunity set available to today's investor. Then, acting in conjunction with an outside consultant, we establish an ideal "model" portfolio based on the specific risk/return objective of Janus Smart Portfolio – Moderate. Finally, we select appropriate Janus funds that replicate our desired exposure.
Under normal market conditions, a broadly diversified portfolio attempts to buffer the risk that a stock-only portfolio might ordinarily bear. The allocations assigned to each selected underlying fund were consistent with our view of market conditions and the long-term trade-off between risk and reward potential that each of these investment types represents. However, as a result of changing market conditions, both the mix of underlying funds and the allocations to these funds will change from time to time.
At period-end, about 62% of the Portfolio was allocated to stocks, with the remaining 38% of the Portfolio invested in bonds, cash and other fixed-income securities. Under normal market conditions, this allocation of assets should buffer the risk that an all-stock portfolio might ordinarily bear and is intended to be consistent with our view on both market conditions and long-term risk-reward profiles.
Portfolio Review
The majority of our equity fund holdings reported gains during the period. One standout was our position in Janus Overseas Fund, which benefited from strength in international markets – particularly in developing countries such as China, India and South Korea. Just as with the bond fund holdings, the Portfolio invested in Janus Overseas Fund for very specific reasons that had as much to do with the desired asset allocation targets as with its ability to generate potential returns. As the Portfolio's primary source of non-U.S. exposure, I felt it was critical for Janus Overseas Fund to maintain a return profile that was more in synch with international markets than with U.S. markets, thereby providing the geographical diversification I feel is necessary for the Portfolio to deliver on its intended asset allocation goals. This year, Janus Overseas Fund proved up to that task. Janus Research Fund and Janus Twenty Fund, which have larger-ca p holdings, also posted strong numbers in the period.
The Portfolio's returns reflected some of the market's broader themes during the period. While our positions in
10 Janus Smart Portfolios April 30, 2007
(unaudited)
Janus Flexible Bond Fund, Janus Short-Term Bond Fund and Janus High-Yield Fund performed well for us in past periods, in the most recent environment the bond funds were collectively our weaker performers. Performance among the bond holdings lived up to expectations, however, and we believe these funds will continue to play an important role in the Portfolio.
Finally, investors continued to favor large-cap value-oriented stocks at the expense of large-cap growth stocks. That trend was visible in the calendar year-to-date outperformance of Janus Adviser INTECH Risk-Managed Value Fund over 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
We will continue to monitor market conditions as well as the performance and composition of the underlying funds in which we invest for directional cues. However, all Janus Smart Portfolios (including this one) are designed to be long-term investment vehicles, and we firmly believe that excessive trading in response to short-term market conditions or to chase the latest investment fad almost proves counter-productive. Accordingly, we expect to make only relatively modest changes to the Portfolio in coming months.
Instead, we will remain focused on trying to ensure that the Portfolio fulfills its mandate of delivering access to some of the best strategies Janus has to offer while at the same time maintaining broad exposure to a wide range of asset classes. It remains a primary goal to provide these things in a professionally allocated, systematically re-balanced and risk-controlled investment vehicle.
Thank you for your investment in Janus Smart Portfolio – Moderate.
Janus Smart Portfolio – Moderate (% of Net Assets)
Janus Flexible Bond Fund | 30.2 | % | |||||
Janus Overseas Fund | 18.6 | % | |||||
Janus Adviser INTECH Risk-Managed Growth Fund - I Shares | 11.0 | % | |||||
Janus Growth and Income Fund | 10.9 | % | |||||
Janus Adviser INTECH Risk-Managed Value Fund - I Shares | 10.2 | % | |||||
Janus Short-Term Bond Fund | 4.7 | % | |||||
Janus Research Fund(1) | 4.3 | % | |||||
Janus Twenty Fund | 4.1 | % | |||||
Janus Orion Fund | 3.2 | % | |||||
Janus High-Yield Fund | 2.9 | % |
(1) Formerly named Janus Mercury Fund.
Janus Smart Portfolio – Moderate At a Glance
Asset Allocation – (% of Net Assets) | |||
As of April 30, 2007 |
![]() | |||
*Includes cash and cash equivalents of (0.1)% | |||
Janus Smart Portfolios April 30, 2007 11
Janus Smart Portfolio – Moderate (unaudited)
Performance
Average Annual Total Return – for the periods ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Since Inception* | Total Annual Fund Operating Expenses | Net Annual Fund Operating Expenses | |||||||||||||||||||
Janus Smart Portfolio - Moderate | 8.67 | % | 12.43 | % | 14.65 | % | 1.16 | % | 0.95 | % | |||||||||||||
S&P 500® Index | 8.60 | % | 15.24 | % | 15.89 | % | |||||||||||||||||
Moderate Allocation Index | 7.80 | % | 12.68 | % | 13.67 | % | |||||||||||||||||
Lipper Quartile | – | 1 | st | 1 | st | ||||||||||||||||||
Lipper Ranking - based on total return for Mixed-Asset Target Allocation Moderate Funds | – | 73/423 | 35/417 |
Visit janus.com to view current performance and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
A Portfolio which redeems or exchanges certain underlying funds' shares held for three months or less may be subject to an underlying fund's 2.00% redemption fee, if any. Effective for underlying fund shares purchased on or after May 15, 2007, the period during which a redemption fee may apply will change from three months to 90 days.
Janus Capital has contractually agreed to waive the Portfolio's total operating expenses (excluding any expenses of an underlying fund, brokerage commissions, interest, taxes, and extraordinary expenses) to a certain limit until at least March 1, 2008. For a period of three years subsequent to the Portfolios' commencement of operations, Janus Capital may recover from each Portfolio, fees and expenses previously waived or reimbursed if that Portfolio's expense ratio, including recovered expenses, falls below the respective expense limit. The expense waiver is detailed in the Statement of Additional Information. Total returns shown include fee waivers and without such waivers total returns would have been lower.
The Portfolio's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. Contractual waivers agreed to by Janus Capital are included under "Net Annual Fund Operating Expenses." All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce transfer agent expenses.
An underlying fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Portfolio may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
Because Janus Capital is the adviser to the Janus Smart Portfolios and to the underlying funds held within the Portfolios, it is subject to certain potential conflicts of interest when allocating the assets of the Portfolios among underlying Janus funds.
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.
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.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Portfolio's holdings may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – December 30, 2005
12 Janus Smart Portfolios April 30, 2007
(unaudited)
Portfolio Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Portfolio and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Portfolio Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,086.70 | $ | 1.09 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,023.75 | $ | 1.05 |
*Expenses are equal to the annualized expense ratio of 0.21% 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.
Janus Smart Portfolios April 30, 2007 13
Janus Smart Portfolio – Moderate
Schedule of Investments (unaudited)
As of April 30, 2007
Shares | Value | ||||||||||
Mutual Funds(1) - 100.1% | |||||||||||
Equity Funds - 62.2% | |||||||||||
691,186 | Janus Adviser INTECH Risk-Managed Growth Fund - I Shares | $ | 10,132,786 | ||||||||
761,174 | Janus Adviser INTECH Risk-Managed Value Fund - I Shares | 9,362,444 | |||||||||
249,810 | Janus Growth and Income Fund | 10,062,339 | |||||||||
270,807 | Janus Orion Fund | 2,905,764 | |||||||||
344,936 | Janus Overseas Fund | 17,205,399 | |||||||||
139,889 | Janus Research Fund | 3,921,098 | |||||||||
65,214 | Janus Twenty Fund | 3,810,436 | |||||||||
57,400,266 | |||||||||||
Fixed-Income Funds - 37.9% | |||||||||||
2,953,480 | Janus Flexible Bond Fund | 27,910,387 | |||||||||
272,082 | Janus High-Yield Fund | 2,707,215 | |||||||||
1,500,832 | Janus Short-Term Bond Fund | 4,337,404 | |||||||||
34,955,006 | |||||||||||
Total Investments (total cost $85,388,566) – 100.1% | 92,355,272 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.1)% | (53,867 | ) | |||||||||
Net Assets – 100% | $ | 92,301,405 |
(1) The Portfolio invests in mutual funds within the Janus family of funds and they may be deemed to be under common control because they share the same Board of Trustees.
See Notes to Schedules of Investments and Financial Statements.
14 Janus Smart Portfolios April 30, 2007
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.
Performance Overview
Janus Smart Portfolio – Conservative gained 7.10% for the six-month period ending April 30, 2007. This compares to a return of 8.60% for the S&P 500® Index, the Portfolio's benchmark, for the same period. The Portfolio beat a 5.92% return by its secondary benchmark, the Conservative Allocation 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.
Dan Scherman
portfolio manager
Market Review
Equity markets delivered healthy gains during the period amid continued evidence of strong U.S. economic growth with modest inflation. After a brief period of market volatility in late February and early March, markets rebounded quickly on hopes of monetary easing by the Federal Reserve (Fed). While U.S. corporate profit growth showed signs of slowing, robust mergers and acquisitions (M&A) and private equity transactions continued to provide key valuation support to equities in the U.S. and around the globe.
Investment Process
There were no substantial changes to the Portfolio's composition or strategy during the period. Janus Smart Portfolio – Conservative is structured as a "fund of funds" portfolio that provides investors with broad, diversified exposure to various types of investments with an emphasis on controlling risk. The Portfolio is also designed to blend the two core competencies that 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 potentially produce a Portfolio with a unique and powerful performance profile.
The investment process involves setting return expectations for a broad range of possible Janus mutual funds that we believe best represent the full opportunity set available to today's investor. Then, acting in conjunction with an outside consultant, we establish an ideal "model" portfolio based upon the specific risk/return objective of Janus Smart Portfolio – Conservative. Finally, we select the appropriate Janus funds that replicate our desired exposure. The allocations assigned to each selected underlying fund were consistent with our view of current market conditions and the long-term trade-off between risk and reward potential that each of these investment types represents. However, as a result of changing market conditions, both the mix of underlying funds and the allocations to these funds will change from time to time.
Portfolio Review
The Portfolio's returns reflected some of the market's broader themes during the period. While our positions in Janus Flexible Bond Fund, Janus Short-Term Bond Fund and Janus High-Yield Fund performed well for us in past periods, in the most recent environment the bond funds were collectively our weaker performers. Performance among our bond holdings continued to live up to our expectations, however, and we believe these funds will continue to play an important role in the Portfolio.
The equity portion of the Portfolio also mirrored broader market trends. For example, international stocks continued to outshine domestic stocks as they had done for several years running. In particular, stocks domiciled in emerging markets such as Brazil and India were among the best performers. The 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, the Portfolio benefited from its investment in Janus Contrarian Fund, which held a sizable portion of its assets in companies located outside the United States.
Finally, investors continued to favor large-cap value-oriented stocks at the expense of large-cap growth stocks. That trend was visible in the calendar year-to-date outperformance of Janus Adviser INTECH Risk-Managed Value Fund over Janus Adviser INTECH Risk-Managed Growth Fund. By maintaining similar exposures to each of these funds, we
Janus Smart Portfolios April 30, 2007 15
Janus Smart Portfolio – Conservative (unaudited)
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
We plan to continue to monitor market conditions as well as the performance and composition of the underlying funds in which we invest for directional cues. However, all Janus Smart Portfolios (including this one) are designed to be long-term investment vehicles, and we firmly believe that excessive trading in response to short-term market conditions or to chase the latest investment fad almost always proves counter-productive. Accordingly, we expect to make only relatively modest changes to the Portfolio in coming months.
Instead, we will remain focused on trying to ensure that the Portfolio fulfills its mandate of delivering access to some of the best strategies Janus has to offer while at the same time maintaining broad exposure to a wide range of asset classes. It remains a primary goal to provide these things in a professionally allocated, systematically re-balanced and risk-controlled investment vehicle.
In closing, thank you for your investment in Janus Smart Portfolio – Conservative.
Janus Smart Portfolio – Conservative (% of Net Assets)
Janus Flexible Bond Fund | 45.5 | % | |||||
Janus Overseas Fund | 9.9 | % | |||||
Janus Short-Term Bond Fund | 9.2 | % | |||||
Janus Adviser INTECH Risk-Managed Value Fund - I Shares | 8.3 | % | |||||
Janus Adviser INTECH Risk-Managed Growth Fund - I Shares | 8.1 | % | |||||
Janus Growth and Income Fund | 5.1 | % | |||||
Janus Contrarian Fund | 4.5 | % | |||||
Janus Orion Fund | 3.2 | % | |||||
Janus Research Fund(1) | 3.2 | % | |||||
Janus High-Yield Fund | 3.0 | % |
(1) Formerly named Janus Mercury Fund.
Janus Smart Portfolio – Conservative At a Glance
Asset Allocation – (% of Net Assets) | |||
As of April 30, 2007 |
16 Janus Smart Portfolios April 30, 2007
(unaudited)
Performance
Average Annual Total Return – for the period ended April 30, 2007 | Expense Ratios – for the fiscal year ended October 31, 2006 | ||||||||||||||||||||||
Fiscal Year-to-Date | One Year | Since Inception* | Total Annual Fund Operating Expenses | Net Annual Fund Operating Expenses | |||||||||||||||||||
Janus Smart Portfolio - Conservative | 7.10 | % | 11.00 | % | 11.71 | % | 1.42 | % | 0.91 | % | |||||||||||||
S&P 500® Index | 8.60 | % | 15.24 | % | 15.89 | % | |||||||||||||||||
Conservative Allocation Index | 5.92 | % | 10.85 | % | 10.50 | % | |||||||||||||||||
Lipper Quartile | – | 1 | st | 1 | st | ||||||||||||||||||
Lipper Ranking - based on total return for Mixed-Asset Target Allocation Conservative Funds | – | 28/365 | 11/344 |
Visit janus.com to view current performance and characteristic information
Data presented reflects past performance, which is no guarantee of future results. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. Call 800.525.3713 or visit www.janus.com for performance current to the most recent month-end.
A Portfolio which redeems or exchanges certain underlying funds' shares held for three months or less may be subject to an underlying fund's 2.00% redemption fee, if any. Effective for underlying fund shares purchased on or after May 15, 2007, the period during which a redemption fee may apply will change from three months to 90 days.
Janus Capital has contractually agreed to waive the Portfolio's total operating expenses (excluding any expenses of an underlying fund, brokerage commissions, interest, taxes, and extraordinary expenses) to a certain limit until at least March 1, 2008. For a period of three years subsequent to the Portfolios' commencement of operations, Janus Capital may recover from each Portfolio, fees and expenses previously waived or reimbursed if that Portfolio's expense ratio, including recovered expenses, falls below the respective expense limit. The expense waiver is detailed in the Statement of Additional Information. Total returns shown include fee waivers and without such waivers total returns would have been lower.
The Portfolio's expense ratios were determined based on average net assets as of the fiscal year ended October 31, 2006. Detailed information is available in the prospectus. Contractual waivers agreed to by Janus Capital are included under "Net Annual Fund Operating Expenses." All expenses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce transfer agent expenses.
An underlying fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the Portfolio may include those associated with investing in foreign securities, emerging markets, initial public offerings ("IPO"s), derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or www.janus.com for more information about risk, portfolio holdings and details.
Because Janus Capital is the adviser to the Janus Smart Portfolios and to the underlying funds held within the Portfolios, it is subject to certain potential conflicts of interest when allocating the assets of the Portfolios among underlying Janus funds.
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.
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.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedules of Investments for index definitions.
The Portfolio's holdings may differ significantly from the securities held in the indices. The indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual portfolio.
See "Explanations of Charts, Tables and Financial Statements."
*The Fund's inception date – December 30, 2005
Janus Smart Portfolios April 30, 2007 17
Janus Smart Portfolio – Conservative (unaudited)
Portfolio Expenses
The example below shows you the ongoing costs (in dollars) of investing in your Portfolio and allows you to compare these costs with those of other mutual funds. Please refer to the section Useful Information About Your Portfolio Report for a detailed explanation of the information presented in these charts.
Expense Example | Beginning Account Value (11/1/06) | Ending Account Value (4/30/07) | Expenses Paid During Period (11/1/06-4/30/07)* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,071.00 | $ | 0.92 | |||||||||
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 waivers by Janus Capital.
18 Janus Smart Portfolios April 30, 2007
Janus Smart Portfolio – Conservative
Schedule of Investments (unaudited)
As of April 30, 2007
Shares | Value | ||||||||||
Mutual Funds(1) - 100.0% | |||||||||||
Equity Funds - 42.3% | |||||||||||
240,666 | Janus Adviser INTECH Risk-Managed Growth Fund - I Shares | $ | 3,528,169 | ||||||||
290,786 | Janus Adviser INTECH Risk-Managed Value Fund - I Shares | 3,576,664 | |||||||||
101,314 | Janus Contrarian Fund | 1,936,112 | |||||||||
54,509 | Janus Growth and Income Fund | 2,195,641 | |||||||||
128,838 | Janus Orion Fund | 1,382,426 | |||||||||
86,302 | Janus Overseas Fund | 4,304,724 | |||||||||
49,884 | Janus Research Fund | 1,398,249 | |||||||||
18,321,985 | |||||||||||
Fixed-Income Funds - 57.7% | |||||||||||
2,082,282 | Janus Flexible Bond Fund | 19,677,571 | |||||||||
130,090 | Janus High-Yield Fund | 1,294,396 | |||||||||
1,375,127 | Janus Short-Term Bond Fund | 3,974,116 | |||||||||
24,946,083 | |||||||||||
Total Investments (total cost $41,124,752) – 100.0% | 43,268,068 | ||||||||||
Liabilities, net of Cash, Receivables and Other Assets – (0.0)% | (14,683 | ) | |||||||||
Net Assets – 100% | $ | 43,253,385 |
(1) The Portfolio invests in mutual funds within the Janus family of funds and they may be deemed to be under common control because they share the same Board of Trustees.
See Notes to Schedules of Investments and Financial Statements.
Janus Smart Portfolios April 30, 2007 19
Statements of Assets and Liabilities
As of April 30, 2007 (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 | $ | 121,875 | $ | 85,389 | $ | 41,125 | |||||||||
Investments at value | $ | 134,469 | $ | 92,355 | $ | 43,268 | |||||||||
Receivables: | |||||||||||||||
Fund shares sold | 623 | 775 | 790 | ||||||||||||
Due from adviser | – | 5 | 6 | ||||||||||||
Other assets | 102 | 99 | 92 | ||||||||||||
Total Assets | 135,194 | 93,234 | 44,156 | ||||||||||||
Liabilities: | |||||||||||||||
Payables: | |||||||||||||||
Due to custodian | 77 | – | – | ||||||||||||
Investments purchased | 559 | 700 | 828 | ||||||||||||
Fund shares repurchased | 79 | 206 | 54 | ||||||||||||
Dividends and distributions | – | – | – | ||||||||||||
Advisory fees | 4 | 4 | 2 | ||||||||||||
Transfer agent fees and expenses | 9 | 7 | 4 | ||||||||||||
Non-interested Trustees' fees and expenses | 3 | 3 | 2 | ||||||||||||
Accrued expenses | 11 | 13 | 13 | ||||||||||||
Total Liabilities | 742 | 933 | 903 | ||||||||||||
Net Assets | $ | 134,452 | $ | 92,301 | $ | 43,253 | |||||||||
Net Assets Consist of: | |||||||||||||||
Capital (par value and paid-in-surplus)* | $ | 121,572 | $ | 84,907 | $ | 40,723 | |||||||||
Undistributed net investment income/(loss)* | 342 | 458 | 392 | ||||||||||||
Undistributed net realized gain/(loss) from investments transactions* | (56 | ) | (31 | ) | (5 | ) | |||||||||
Unrealized appreciation/(depreciation) of investments | 12,594 | 6,967 | 2,143 | ||||||||||||
Total Net Assets | $ | 134,452 | $ | 92,301 | $ | 43,253 | |||||||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 10,847 | 7,815 | 3,807 | ||||||||||||
Net Asset Value Per Share | $ | 12.40 | $ | 11.81 | $ | 11.36 |
* See Note 4 in Notes to Financial Statements.
See Notes to Financial Statements.
20 Janus Smart Portfolios April 30, 2007
Statements of Operations
For the six-month period ended April 30, 2007 (unaudited) (all numbers in thousands) | Janus Smart Portfolio - Growth | Janus Smart Portfolio - Moderate | Janus Smart Portfolio - Conservative | ||||||||||||
Investment Income: | |||||||||||||||
Dividends from affiliates | $ | 1,077 | $ | 985 | $ | 599 | |||||||||
Total Investment Income | 1,077 | 985 | 599 | ||||||||||||
Expenses: | |||||||||||||||
Advisory fees | 25 | 17 | 7 | ||||||||||||
Transfer agent fees and expenses | 59 | 38 | 18 | ||||||||||||
Postage and mailing expenses | 2 | – | – | ||||||||||||
Professional fees | 13 | 13 | 13 | ||||||||||||
Non-interested Trustees' fees and expenses | 3 | 2 | 1 | ||||||||||||
Printing expenses | 28 | 24 | 19 | ||||||||||||
Legal expenses | 3 | 4 | 4 | ||||||||||||
Total Expenses | 133 | 98 | 62 | ||||||||||||
Expense and Fee Offset | (3 | ) | (2 | ) | (1 | ) | |||||||||
Net Expenses | 130 | 96 | 61 | ||||||||||||
Less: Excess Expense Reimbursement | (12 | ) | (26 | ) | (37 | ) | |||||||||
Net Expenses after Expense Reimbursement | 118 | 70 | 24 | ||||||||||||
Net Investment Income/(Loss) | 959 | 915 | 575 | ||||||||||||
Net Realized and Unrealized Gain/(Loss) on Investments: | |||||||||||||||
Net realized gain/(loss) from investment transactions | – | – | – | ||||||||||||
Change in net unrealized appreciation or depreciation of investments | 9,168 | 4,889 | 1,466 | ||||||||||||
Payment from affiliate (Note 2) | – | – | 1 | ||||||||||||
Net Gain/(Loss) on Investments | 9,168 | 4,889 | 1,467 | ||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 10,127 | $ | 5,804 | $ | 2,042 |
See Notes to Financial Statements.
Janus Smart Portfolios April 30, 2007 21
Statements of Changes in Net Assets
For the six-month period ended April 30, 2007 (unaudited) and for the fiscal period ended October 31, 2006 | Janus Smart Portfolio - Growth | Janus Smart Portfolio - Moderate | Janus Smart Portfolio - Conservative | ||||||||||||||||||||||||
(all numbers in thousands) | 2007 | 2006(1) | 2007 | 2006(1) | 2007 | 2006(1) | |||||||||||||||||||||
Operations: | |||||||||||||||||||||||||||
Net investment income/(loss) | $ | 959 | $ | 279 | $ | 915 | $ | 415 | $ | 575 | $ | 233 | |||||||||||||||
Net realized gain/(loss) from investment transactions | – | 237 | – | 51 | – | 41 | |||||||||||||||||||||
Change in unrealized net appreciation/(depreciation) of investments | 9,168 | 3,426 | 4,889 | 2,078 | 1,466 | 677 | |||||||||||||||||||||
Payment from affiliate | – | – | – | – | 1 | – | |||||||||||||||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | 10,127 | 3,942 | 5,804 | 2,544 | 2,042 | 951 | |||||||||||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||||||||||
Net investment income * | (896 | ) | – | (872 | ) | – | (416 | ) | – | ||||||||||||||||||
Net realized gain/(loss) from investment transactions* | (292 | ) | – | (82 | ) | – | (46 | ) | – | ||||||||||||||||||
Net Decrease from Dividends and Distributions | (1,188 | ) | – | (954 | ) | – | (462 | ) | – | ||||||||||||||||||
Capital Share Transactions: | |||||||||||||||||||||||||||
Shares sold | 71,652 | 71,396 | 44,074 | 55,258 | 26,652 | 22,867 | |||||||||||||||||||||
Reinvested dividends and distributions | 1,183 | – | 940 | – | 458 | – | |||||||||||||||||||||
Shares repurchased | (14,116 | ) | (8,544 | ) | (8,829 | ) | (6,536 | ) | (4,926 | ) | (4,329 | ) | |||||||||||||||
Net Increase/(Decrease) from Capital Share Transactions | 58,719 | 62,852 | 36,185 | 48,722 | 22,184 | 18,538 | |||||||||||||||||||||
Net Increase/(Decrease) in Net Assets | 67,658 | 66,794 | 41,035 | 51,266 | 23,764 | 19,489 | |||||||||||||||||||||
Net Assets: | |||||||||||||||||||||||||||
Beginning of period | 66,794 | – | 51,266 | – | 19,489 | – | |||||||||||||||||||||
End of period | $ | 134,452 | $ | 66,794 | $ | 92,301 | $ | 51,266 | $ | 43,253 | $ | 19,489 | |||||||||||||||
Undistributed net investment income/(loss)* | $ | 342 | $ | 279 | $ | 458 | $ | 415 | $ | 392 | $ | 233 |
* See Note 4 in Notes to Financial Statements.
(1) Period from December 30, 2005 (inception date) through October 31, 2006.
See Notes to Financial Statements.
22 Janus Smart Portfolios April 30, 2007
Financial Highlights
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) | Janus Smart Portfolio - Growth | ||||||||||
and through the fiscal period ended October 31, 2006 | 2007 | 2006(1) | |||||||||
Net Asset Value, Beginning of Period | $ | 11.34 | $ | 10.00 | |||||||
Income from Investment Operations: | |||||||||||
Net investment income/(loss) | .11 | .05 | |||||||||
Net gains/(losses) on securities (both realized and unrealized) | 1.12 | 1.29 | |||||||||
Total from Investment Operations | 1.23 | 1.34 | |||||||||
Less Distributions: | |||||||||||
Dividends (from net investment income)* | (.13 | ) | – | ||||||||
Distributions (from capital gains)* | (.04 | ) | – | ||||||||
Total Distributions | (.17 | ) | – | ||||||||
Net Asset Value, End of Period | $ | 12.40 | $ | 11.34 | |||||||
Total Return** | 10.95 | % | 13.40 | % | |||||||
Net Assets, End of Period (in thousands) | $ | 134,452 | $ | 66,794 | |||||||
Average Net Assets for the Period (in thousands) | $ | 99,079 | $ | 34,131 | |||||||
Ratio of Gross Expenses to Average Net Assets***(2) | 0.25 | %(3) | 0.25 | %(3) | |||||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.24 | % | 0.24 | % | |||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 1.95 | % | 0.98 | % | |||||||
Portfolio Turnover Rates*** | 0 | % | 28 | % | |||||||
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) | Janus Smart Portfolio - Moderate | ||||||||||
and through the fiscal period ended October 31, 2006 | 2007 | 2006(1) | |||||||||
Net Asset Value, Beginning of Period | $ | 11.04 | $ | 10.00 | |||||||
Income from Investment Operations: | |||||||||||
Net investment income/(loss) | .13 | .09 | |||||||||
Net gains/(losses) on securities (both realized and unrealized) | .82 | .95 | |||||||||
Total from Investment Operations | .95 | 1.04 | |||||||||
Less Distributions and Other: | |||||||||||
Dividends (from net investment income)* | (.16 | ) | – | ||||||||
Distributions (from capital gains)* | (.02 | ) | – | ||||||||
Payment from affiliate | – | – | (4) | ||||||||
Total Distributions and Other | (.18 | ) | – | ||||||||
Net Asset Value, End of Period | $ | 11.81 | $ | 11.04 | |||||||
Total Return** | 8.67 | % | 10.40 | %(5) | |||||||
Net Assets, End of Period (in thousands) | $ | 92,301 | $ | 51,266 | |||||||
Average Net Assets for the Period (in thousands) | $ | 70,381 | $ | 25,078 | |||||||
Ratio of Gross Expenses to Average Net Assets***(2) | 0.21 | %(6) | 0.21 | %(6) | |||||||
Ratio of Net Expenses to Average Net Assets***(2) | 0.20 | % | 0.20 | % | |||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 2.62 | % | 1.97 | % | |||||||
Portfolio Turnover Rates*** | 0 | % | 16 | % |
* See Note 4 in Notes to Financial Statements.
** Total return not annualized for periods of less than one full year.
*** Annualized for periods of less than one full year.
(1) Period from December 30, 2005 (inception date) through October 31, 2006.
(2) See "Explanations of Charts, Tables and Financial Statements."
(3) The ratio was 0.27% in 2007 and 0.39% in 2006 before waiver of certain fees incurred by the Portfolio.
(4) Payment from affiliate aggregated less than $.01 on a per share basis for the period ended.
(5) During the fiscal period ended, Janus Capital and/or Janus Services LLC ("Janus Services") fully reimbursed the Portfolio for a loss on a transaction resulting from certain trading, pricing and/or shareholder activity errors, which otherwise would have reduced total return by less than 0.01%.
(6) The ratio was 0.28% in 2007 and 0.42% in 2006 before waiver of certain fees incurred by the Portfolio.
See Notes to Financial Statements.
Janus Smart Portfolios April 30, 2007 23
Financial Highlights (continued)
For a share outstanding during the six-month period ended April 30, 2007 (unaudited) | Janus Smart Portfolio - Conservative | ||||||||||
and through the fiscal period ended October 31, 2006 | 2007 | 2006(1) | |||||||||
Net Asset Value, Beginning of Period | $ | 10.82 | $ | 10.00 | |||||||
Income from Investment Operations: | |||||||||||
Net investment income/(loss) | .17 | .13 | |||||||||
Net gains/(losses) on securities (both realized and unrealized) | .59 | .69 | |||||||||
Total from Investment Operations | .76 | .82 | |||||||||
Less Distributions and Other: | |||||||||||
Dividends (from net investment income)* | (.20 | ) | – | ||||||||
Distributions (from capital gains)* | (.02 | ) | – | ||||||||
Payment from affiliate | – | (2) | – | ||||||||
Total Distributions and Other | (.22 | ) | – | ||||||||
Net Asset Value, End of Period | $ | 11.36 | $ | 10.82 | |||||||
Total Return** | 7.10 | %(3) | 8.20 | % | |||||||
Net Assets, End of Period (in thousands) | $ | 43,253 | $ | 19,489 | |||||||
Average Net Assets for the Period (in thousands) | $ | 28,853 | $ | 9,992 | |||||||
Ratio of Gross Expenses to Average Net Assets***(4) | 0.18 | %(5) | 0.18 | %(5) | |||||||
Ratio of Net Expenses to Average Net Assets***(4) | 0.17 | % | 0.17 | % | |||||||
Ratio of Net Investment Income/(Loss) to Average Net Assets*** | 4.02 | % | 2.78 | % | |||||||
Portfolio Turnover Rates*** | 0 | % | 20 | % |
*See Note 4 in Notes to Financial Statements.
**Total return not annualized for periods of less than one full year.
***Annualized for periods of less than one full year.
(1) Period from December 30, 2005 (inception date) through October 31, 2006.
(2) Payment from affiliate aggregated less than $.01 on a per share basis for the period ended.
(3) During the period ended, Janus Capital and/or Janus Services fully reimbursed the 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 ratio was 0.44% in 2007 and 0.69% in 2006 before waiver of certain fees incurred by the Portfolio.
See Notes to Financial Statements.
24 Janus Smart Portfolios April 30, 2007
Notes to Schedules of Investments (unaudited)
Conservative Allocation Index | An internally calculated, hypothetical combination of unmanaged indices that combines the total returns from the Lehman Brothers Aggregate Bond Index (60%), the Dow Jones Wilshire 5000 Index (28%) and the MSCI EAFE® Index (12%). | ||||||
Growth Allocation Index | An internally calculated, hypothetical combination of unmanaged indices that combines the total returns from the Dow Jones Wilshire 5000 Index (50%), the MSCI EAFE® Index (25%), the Lehman Brothers Aggregate Bond Index (20%) and the MSCI Emerging Markets (Free) IndexSM (5%). | ||||||
Lipper Mixed-Asset Target Allocation Conservative Funds | The Lipper Mixed-Asset Target Allocation Conservative Funds Average represents the average annual returns for all Mixed-Asset Target Allocation Conservative Funds for the respective time periods. | ||||||
Lipper Mixed-Asset Target Allocation Growth Funds | The Lipper Mixed-Asset Target Allocation Growth Funds Average represents the average annual returns for all Mixed-Asset Target Allocation Growth Funds for the respective time periods. | ||||||
Lipper Mixed-Asset Target Allocation Moderate Funds | The Lipper Mixed-Asset Target Allocation Moderate Funds Average represents the average annual returns for all Mixed-Asset Target Allocation Moderate Funds for the respective time periods. | ||||||
Moderate Allocation Index | An internally calculated, hypothetical combination of unmanaged indices that combines the total returns from the Dow Jones Wilshire 5000 Index (40%), the Lehman Brothers Aggregate Bond Index (40%), the MSCI EAFE® Index (18%) and the MSCI Emerging Markets (Free) 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. | ||||||
Janus Smart Portfolios April 30, 2007 25
Notes to Financial Statements (unaudited)
The following section describes the organization and significant accounting policies and provides more detailed information about the schedules and tables that appear throughout this report. In addition, the Notes to Financial Statements explain the methods used in preparing and presenting this report.
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Janus Smart Portfolio - Growth, Janus Smart Portfolio - Moderate and Janus Smart Portfolio - Conservative, (collectively the "Portfolios" and individually a "Portfolio") are series Portfolios. The Portfolios each operate as a "fund of funds," meaning substantially all of the Portfolios' assets will be invested in other Janus mutual funds (the "underlying funds"). Each Portfolio invests in a variety of underlying funds to pursue a target allocation of stocks and bonds, and may also invest in money market instruments or cash/cash equivalents. The Portfolios are part of Janus Investment Fund (the "Trust"), which 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 funds. Each of the Portfolios in this report is classified as diversified as defined in the 1940 Act. The Portfolios are no-load invest ments.
Underlying Funds
Each Portfolio invests in a variety of underlying funds to pursue a target allocation of stocks and bonds, and may also invest in money market instruments or cash/cash equivalents. Each Portfolio has a target allocation, which is how each Portfolio's investments generally will be allocated among the major asset classes over the long term, as well as normal ranges within which each Portfolio's asset class allocations generally will vary over short-term periods. The normal asset allocation ranges are as follows: (1) 75%-85% stocks and 15%-25% bonds and money market instruments for Janus Smart Portfolio - Growth; (2) 55%-65% stocks and 35%-45% bonds and money market instruments for Janus Smart Portfolio - Moderate; and (3) 35%-45% stocks and 55%-65% bonds and money market instruments for Janus Smart Portfolio - Conservative. A brief description of each of the underlying funds that the Portfolios may invest in are as follows.
INVESTMENTS IN EQUITY SECURITIES
JANUS FUND seeks long-term growth of capital in a manner consistent with the preservation of capital. The fund pursues its investment objective by investing primarily in common stocks selected for their growth potential. Although the fund may invest in companies of any size, it generally invests in larger, more established companies.
JANUS ENTERPRISE FUND seeks long-term growth of capital. The fund pursues its investment objective by investing primarily in common stocks selected for their growth potential, and normally invests at least 50% of its equity assets in medium-sized companies. Medium-sized companies are those whose market capitalization falls within the range of companies in the Russell Midcap(R) Growth Index.
JANUS ORION FUND seeks long-term growth of capital. The fund pursues its investment objective by normally investing primarily in a core group of 20-30 domestic and foreign common stocks selected for their growth potential. The fund may invest in companies of any size, from larger, well-established companies to smaller, emerging growth companies.
JANUS RESEARCH FUND seeks long-term growth of capital. The fund pursues its investment objective by investing primarily in common stocks selected for their growth potential. The fund may invest in companies of any size, from larger, well-established companies to smaller, emerging growth companies.
JANUS TRITON FUND seeks long-term growth of capital. The fund pursues its investment objective by investing primarily in common stocks selected for their growth potential. In pursuing that objective, the fund invests in equity securities of small- and medium-sized companies. Generally, small- and medium-sized companies have a market capitalization of less than $10 billion.
JANUS TWENTY FUND seeks long-term growth of capital. The fund pursues its investment objective by normally investing primarily in a core group of 20-30 common stocks selected for their growth potential.
JANUS VENTURE FUND seeks capital appreciation. The fund pursues its investment objective by investing at least 50% of its equity assets in small-sized companies. Small-sized companies are those who have market capitalizations of less than $1 billion or annual gross revenues of less than $500 million. Companies whose capitalization or revenues fall outside these ranges after the fund's initial purchase continue to be considered small-sized. The fund may also invest in larger companies with strong growth potential or relatively well-known and large companies with potential for capital appreciation.
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
26 Janus Smart Portfolios April 30, 2007
securities of U.S. and foreign companies selected for their growth potential. The fund normally invests in issuers from several different countries, which may include the United States. The fund may, under unusual circumstances, invest in a single country. As a fundamental policy, the fund normally invests at least 25% of its total assets in the "life sciences" sector, which may include companies in the following industries: health care; pharmaceuticals; agriculture; cosmetics/personal care; and biotechnology. The fund may have significant exposure to emerging markets.
JANUS GLOBAL 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 portfolio manager believes will benefit significantly from advances or improvements in technology. These companies generally fall into two categories: (a) companies that the portfolio manager believes have or will develop products, processes, or services that will provide significant technological advancements or improvements and (b) companies that the portfolio manager believes rely extensively on technology in connection with their operations or services. The fund implements this policy by investing primarily in equity securities of U.S. and foreign companies selected for their growth potential. The fund normally invests in issuer s 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 investment objective by normally investing 50-60% of its assets in equity securities selected primarily for their growth potential and 40-50% of its assets in securities selected primarily for their income potential. 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 investment 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. Such companies may also include special situations companies that are experiencing management changes and/or are currently out of favor.
JANUS FUNDAMENTAL EQUITY FUND seeks long-term growth of capital. The fund pursues its investment objective by investing, under normal circumstances, at least 80% of its net assets plus the amount of any borrowings for investment purposes, in 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 investment objective by normally emphasizing investments in common stocks. The fund will normally invest up to 75% of its assets in equity securities selected primarily for their growth potential, and at least 25% of its assets in securities the portfolio manager believes have income potential. 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. All or part of the fund's income component may consist of structured securities such as equity-linked structured notes.
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 investment process.
JANUS ADVISER INTECH RISK-MANAGED GROWTH FUND - CLASS I seeks long-term growth of capital. The fund invests primarily in common stocks from the universe of the fund's benchmark index, which is the Russell 1000(R) Growth Index. Stocks are selected for their potential contribution to the long-term growth of capital, utilizing INTECH's mathematical investment process.
JANUS ADVISER INTECH RISK-MANAGED 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 investment process.
JANUS MID CAP VALUE FUND - INVESTOR SHARES seeks capital appreciation. The fund pursues its investment objective by investing primarily in common stocks selected for their capital appreciation potential. The fund primarily invests in
Janus Smart Portfolios April 30, 2007 27
Notes to Financial Statements (unaudited) (continued)
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 pursues its investment objective by investing primarily in common stocks selected for their capital appreciation potential. The fund primarily invests in the common stocks of small companies whose stock prices are believed to be undervalued by the fund's portfolio manager. The fund invests, under normal circumstances, at least 80% of its assets, plus the amount of any borrowings for investment purposes, 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 investment objective by investing primarily in common stocks of companies of any size located throughout the world with the potential for long-term growth of capital. The fund normally invests in issuers from several different countries, which may include the United States. The fund may, under unusual circumstances, invest in a single country. The fund may have significant exposure to emerging markets.
JANUS GLOBAL 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. The fund normally invests at least 40% of its net assets in securities of issuers from different countries located throughout the world, excluding the United States. 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 investment 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.
INVESTMENTS IN FIXED-INCOME SECURITIES
JANUS FLEXIBLE BOND FUND seeks to obtain maximum total return, consistent with preservation of capital. The fund pursues its investment 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 investment objectives. 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 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.
28 Janus Smart Portfolios April 30, 2007
INVESTMENTS IN CASH EQUIVALENTS
JANUS MONEY MARKET FUND - INVESTOR SHARES seeks maximum current income to the extent consistent with stability of capital. The fund pursues its investment objective by investing primarily in high quality debt obligations and obligations of financial institutions. Debt obligations may include commercial paper, notes and bonds, and variable amount master demand notes. Obligations of financial institutions include certificates of deposit and time deposits.
CASH EQUIVALENTS include money market instruments (such as certificates of deposit, time deposits, and repurchase agreements), shares of affiliated money market funds or high-quality debt obligations (such as U.S. Government obligations, commercial paper, and other short-term corporate instruments).
The following accounting policies have been consistently followed by the Portfolios and are in conformity with accounting principles generally accepted in the United States of America in the investment company industry.
Investment Valuation
A Portfolio's net asset value ("NAV") is calculated based upon the NAV of each 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 the underlying money market fund 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 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 thei r 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 held by the underlying funds will be recorded as soon as the Trust is informed of the dividend if such information is obtained subsequent to the ex-dividend date. 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 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.
Janus Smart Portfolios April 30, 2007 29
Notes to Financial Statements (unaudited) (continued)
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. 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 or such other collateral permitted by the Securities and Exchange Commission ("SEC"). Cash collateral may be invested in affiliated money market funds or other accounts advised by Janus Capital to the extent consistent with exemptive relief obtained from the SEC or as permitted by the 1940 Act and rules promulgated thereunder. Cash collateral may also be invested in unaffiliated money market funds or other accounts advised by Janus Capital to the extent consistent with exemptive relief obtained from the SEC or as permitted by the 1940 Act and rules promulgated thereunder. Cash collateral may also be invested in unaffiliated money market funds 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 on 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 permits them to borrow or lend cash at a rate beneficial to both the borrowing and lending funds. Outstanding borrowings from all sources totaling 10% or more of 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 Bond 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 of the underlying fund.
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 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 Bond 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
30 Janus Smart Portfolios April 30, 2007
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 Bond Fund may invest in bank loans, which include institutionally traded floating rate securities generally acquired as an assignment or participation interest in loans originated by a bank or financial institution (the "Lender") that acts as agent for all holders. The agent administers the terms of the loan, as specified in the loan agreement. When investing in a loan participation, the underlying 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 securities adjust with general interest rate changes and/or issuer credit quality. The interest rates paid on a floating rate security in which the underlying 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, may enter into futures contracts. The underlying funds intend to use such derivative instruments 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 a receivable or payable. When a contract is closed, a realized gain or loss is recorded by the underlying funds 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, 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 adjusted by the amount of premium received or paid by the underlying funds. 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
Janus Smart Portfolios April 30, 2007 31
Notes to Financial Statements (unaudited) (continued)
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, with the exception of INTECH Risk-Managed Stock Fund, Janus Adviser INTECH Risk-Managed Growth Fund and Janus Adviser INTECH Risk-Managed Value Fund, 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 to hedge against anticipated declines in the market price of portfolio securities. If the value of the securities sold short increases prior to the scheduled delivery date, the underlying funds lose the opportunity to participate in the gain.
The underlying funds, except INTECH Risk-Managed Stock Fund, Janus Adviser INTECH Risk-Managed Growth Fund, Janus Adviser INTECH Risk-Managed Value Fund, 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 an underlying fund selling a security it does not own to a purchaser at a specified price. To complete the transaction, the underlying 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 the underlying fund sold the security short and the cost of borrowing the security, its potential for loss is theoretically unlimited because there is no limit to the cost of replacing the borrowed security. There is no assurance that the underlying fund will be able to close out a short position at a particular time or at an acceptable price. A gain or a loss will be recognized upon termination of a short sale. There is no limit on the size of any loss that an underlying fund may recognize upon termination of a short sale.
Foreign Currency Translations
The underlying funds do not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation on investments and foreign currency 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.
Equity-Linked Structured Notes
The underlying funds may invest in equity-linked structured notes. Equity-linked structured notes are derivative securities which are specially designed to combine the characteristics of one or more underlying securities and their equity derivatives in a single note form. The return and/or yield or income component may be based on the performance of the underlying equity securities, an equity index, and/or option positions. Equity-linked structured notes are typically offered in limited transactions by financial institutions in either registered or nonregistered form. An investment in equity-linked structured notes creates exposure to the credit risk of the issuing financial institution, as well as to the market risk of the underlying securities. There is no guaranteed return of principal with these securities and the appreciation potential of these securities may be limited by a maximum payment or call right. In certain cases, equity-linke d structured notes may be more volatile and less liquid than less complex securities or other types of fixed-income securities. Such securities may exhibit price behavior that does not correlate with other fixed-income securities.
Initial Public Offerings
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.
32 Janus Smart Portfolios April 30, 2007
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 since these securities my be sensitive to economic changes, political changes 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 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.
New Accounting Pronouncements
In July 2006, the Financial Accounting Standards Board ("FASB") issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109" (the "Interpretation"). The Interpretation establishes for all entities, including pass-through entities such as the Funds, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. A calendar year open-end or closed-end fund would implement the interpretation no later than June 29, 2007 (the last business day of the semi-annual reporting period) and will also apply to all open tax years as of the date of effectiveness. Management has recently begun to evaluate the application of the Interpretation to the Funds, an d is not in a position at this time to estimate the significance of its impact, if any, on the Funds' financial statements.
In September 2006, the SEC issued Staff Accounting Bulletin ("SAB") No. 108 "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements" (SAB 108). SAB 108 requires that public companies utilize a "dual approach" to assessing the quantitative effects of financial misstatements. This dual approach includes both an income statement focused assessment and a balance sheet focused assessment. The guidance in SAB 108 must be applied to annual financial statements for fiscal years ending after November 15, 2006. Management is currently assessing the impact of adopting SAB 108 on each Portfolio's financial position or results of operations.
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, 2008 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
Janus Smart Portfolios April 30, 2007 33
Notes to Financial Statements (unaudited) (continued)
reimbursement upon termination of the current advisory agreements. For the six-month period ended April 30, 2007, 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 | $ | 12,316 | $ | 52,692 | |||||||
Janus Smart Portfolio - Moderate | 26,139 | 71,042 | |||||||||
Janus Smart Portfolio - Conservative | 37,173 | 80,208 |
The Portfolios' expenses may be reduced by expense offsets from an unaffiliated transfer agent. Such offsets are included in Expense and Fee Offsets on the Statement of Operations. The transfer agent fee offsets received during the period reduce Transfer Agent Fees and Expenses. The Portfolios could have employed the assets used by the transfer agent to produce income if they had not entered into an expense offset arrangement.
Janus Services LLC ("Janus Services"), a wholly-owned subsidiary of Janus Capital, is the Portfolios' and the underlying funds' transfer agent. For transfer agency and other services, Janus Services receives a fee at an annual rate of 0.05% of the Portfolio's total net assets. In addition, Janus Services receives $4.00 per open shareholder account for transfer agent services.
Janus Capital has entered into an agreement with Wilshire Associates Inc. (''Wilshire''), a global investment technology, investment consulting, and investment management firm, to act as a consultant to Janus Capital. Wilshire provides research and advice regarding asset allocation methodologies, which Janus Capital uses when determining asset class allocations for the Portfolios. For its consulting services, Janus Capital pays Wilshire an annual fee, payable monthly, that is comprised of a combination of an initial program establishment fee, fixed fee, and an asset-based fee.
Effective January 1, 2006, the Board of Trustees 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 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 with the Plan. No deferred fees were paid to any Trustee under the Plan during the six-month period ended April 30, 2007.
During the six-month period ended April 30, 2007, Janus Services reimbursed Janus Smart Portfolio - Conservative $716 as a result of dilutions caused by incorrectly processed shareholder activity.
During the period ended October 31, 2006, Janus Services reimbursed Janus Smart Portfolio - Moderate $222 as a result of dilutions caused by incorrectly processed shareholder activity.
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 Portfolios. Total compensation of $56,756 was paid by the Trust during the six-month period ended April 30, 2007. 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, 2007, the aggregate cost of purchases and proceeds from sales of investment securities (excluding short-term securities) were as follows:
Portfolio | 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 | $ | 58,505,694 | $ | – | $ | – | $ | – | |||||||||||
Janus Smart Portfolio - Moderate | 36,182,709 | – | – | – | |||||||||||||||
Janus Smart Portfolio - Conservative | 22,309,642 | – | – | – |
34 Janus Smart Portfolios April 30, 2007
4. FEDERAL INCOME TAX
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, 2007 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 | $ | 121,931,134 | $ | 12,567,748 | $ | (30,269 | ) | $ | 12,537,479 | ||||||||||
Janus Smart Portfolio - Moderate | 85,419,505 | 6,967,663 | (31,896 | ) | 6,935,767 | ||||||||||||||
Janus Smart Portfolio - Conservative | 41,130,210 | 2,161,965 | (24,107 | ) | 2,137,858 |
5. CAPITAL SHARE TRANSACTIONS
For the six-month period ended April 30, 2007 (unaudited) and the fiscal period ended October 31, 2006 | Janus Smart Portfolio - Growth | Janus Smart Portfolio - Moderate | Janus Smart Portfolio - Conservative | ||||||||||||||||||||||||
(all numbers are in thousands) | 2007 | 2006(1) | 2007 | 2006(1) | 2007 | 2006(1) | |||||||||||||||||||||
Transactions in Portfolio Shares | |||||||||||||||||||||||||||
Shares sold | 6,045 | 6,692 | 3,861 | 5,267 | 2,409 | 2,219 | |||||||||||||||||||||
Reinvested dividends and distributions | 101 | – | 84 | – | 42 | – | |||||||||||||||||||||
Shares repurchased | (1,188 | ) | (803 | ) | (773 | ) | (624 | ) | (445 | ) | (418 | ) | |||||||||||||||
Net Increase/(Decrease) in Portfolio Shares | 4,958 | 5,889 | 3,172 | 4,643 | 2,006 | 1,801 | |||||||||||||||||||||
Shares Outstanding, Beginning of Period | 5,889 | – | 4,643 | – | 1,801 | – | |||||||||||||||||||||
Shares Outstanding, End of Period | 10,847 | 5,889 | 7,815 | 4,643 | 3,807 | 1,801 |
(1) Period from December 30, 2005 (inception date) through October 31, 2006.
6. AFFILIATED FUND OF FUNDS TRANSACTIONS
The Portfolios invest in certain mutual funds within the Janus family of funds. While each Portfolio can invest in any or all of the underlying funds, it is expected that each Portfolio will normally invest in only some of the underlying funds at any particular time. All of the realized gain/(loss) recognized by the Portfolios is derived from affiliates. Portfolio's investment in any of the underlying funds may exceed 25% of such Portfolio's total assets. In such instances, the financial statements for the underlying fund may be obtained on the underlying fund's website at www.janus.com. During the six-month period ended April 30, 2007, 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 4/30/07 | |||||||||||||||||||||||||
Janus Smart Portfolio - Growth | |||||||||||||||||||||||||||||||
Janus Adviser INTECH Risk-Managed Growth Fund - I Shares | 550,105 | 7,803,964 | – | – | – | $ | 51,130 | $ | 17,736,042 | ||||||||||||||||||||||
Janus Adviser INTECH Risk-Managed Value Fund - I Shares | 674,805 | 7,928,440 | – | – | – | 175,606 | 18,023,032 | ||||||||||||||||||||||||
Janus Flexible Bond Fund | 1,076,243 | 10,152,284 | – | – | – | 389,561 | 21,219,295 | ||||||||||||||||||||||||
Janus Growth and Income Fund | 151,039 | 5,814,668 | – | – | – | 71,828 | 13,076,141 | ||||||||||||||||||||||||
Janus High-Yield Fund | 185,421 | 1,829,723 | – | – | – | 106,870 | 3,866,726 | ||||||||||||||||||||||||
Janus Orion Fund | 285,149 | 2,880,670 | – | – | – | 9,250 | 6,893,207 | ||||||||||||||||||||||||
Janus Overseas Fund | 288,368 | 13,440,514 | – | – | – | 231,983 | 33,017,344 | ||||||||||||||||||||||||
Janus Research Fund(1) | 155,814 | 4,024,096 | – | – | – | 4,109 | 9,780,320 | ||||||||||||||||||||||||
Janus Twenty Fund | 83,511 | 4,631,335 | – | – | – | 37,064 | 10,856,506 | ||||||||||||||||||||||||
Total | $ | 58,505,694 | $ | – | $ | – | $ | 1,077,401 | $ | 134,468,613 |
(1) Formerly named Janus Mercury Fund.
Janus Smart Portfolios April 30, 2007 35
Notes to Financial Statements (unaudited) (continued)
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/07 | |||||||||||||||||||||||||
Janus Smart Portfolio - Moderate | |||||||||||||||||||||||||||||||
Janus Adviser INTECH Risk-Managed Growth Fund - I Shares | 274,730 | 3,899,981 | – | – | – | $ | 32,030 | $ | 10,132,786 | ||||||||||||||||||||||
Janus Adviser INTECH Risk-Managed Value Fund - I Shares | 307,516 | 3,616,326 | – | – | – | 100,007 | 9,362,444 | ||||||||||||||||||||||||
Janus Flexible Bond Fund | 1,248,066 | 11,779,367 | – | – | – | 530,811 | 27,910,387 | ||||||||||||||||||||||||
Janus Growth and Income Fund | 101,825 | 3,924,897 | – | – | – | 17,582 | 10,062,339 | ||||||||||||||||||||||||
Janus High-Yield Fund | 114,687 | 1,131,842 | – | – | – | 77,342 | 2,707,215 | ||||||||||||||||||||||||
Janus Orion Fund | 104,689 | 1,059,184 | – | – | – | 4,288 | 2,905,764 | ||||||||||||||||||||||||
Janus Overseas Fund | 130,945 | 6,110,219 | – | – | – | 132,477 | 17,205,399 | ||||||||||||||||||||||||
Janus Research Fund(1) | 54,399 | 1,408,342 | – | – | – | 1,814 | 3,921,098 | ||||||||||||||||||||||||
Janus Short-Term Bond Fund | 634,875 | 1,831,705 | – | – | – | 74,018 | 4,337,404 | ||||||||||||||||||||||||
Janus Twenty Fund | 25,577 | 1,420,846 | – | – | – | 14,319 | 3,810,436 | ||||||||||||||||||||||||
Total | $ | 36,182,709 | $ | – | $ | – | $ | 984,688 | $ | 92,355,272 |
(1) Formerly named Janus Mercury Fund.
Purchases | Sales | Realized | Dividend | Value | |||||||||||||||||||||||||||
Shares | Cost | Shares | Cost | Gain/(Loss) | Income | at 4/30/07 | |||||||||||||||||||||||||
Janus Smart Portfolio - Conservative | |||||||||||||||||||||||||||||||
Janus Adviser INTECH Risk-Managed Growth Fund - I Shares | 123,260 | 1,745,739 | – | – | – | $ | 8,938 | $ | 3,528,169 | ||||||||||||||||||||||
Janus Adviser INTECH Risk-Managed Value Fund - I Shares | 150,282 | 1,767,462 | – | – | – | 30,661 | 3,576,664 | ||||||||||||||||||||||||
Janus Contrarian Fund | 54,983 | 973,571 | – | – | – | 18,530 | 1,936,112 | ||||||||||||||||||||||||
Janus Flexible Bond Fund | 1,114,903 | 10,527,876 | – | – | – | 323,951 | 19,677,571 | ||||||||||||||||||||||||
Janus Growth and Income Fund | 28,545 | 1,096,931 | – | – | – | 11,767 | 2,195,641 | ||||||||||||||||||||||||
Janus High-Yield Fund | 69,209 | 683,522 | – | – | – | 32,074 | 1,294,396 | ||||||||||||||||||||||||
Janus Orion Fund | 64,498 | 652,959 | – | – | – | 1,659 | 1,382,426 | ||||||||||||||||||||||||
Janus Overseas Fund | 42,414 | 1,981,043 | – | – | – | 27,140 | 4,304,724 | ||||||||||||||||||||||||
Janus Research Fund(1) | 25,037 | 651,828 | – | – | – | 527 | 1,398,249 | ||||||||||||||||||||||||
Janus Short-Term Bond Fund | 772,117 | 2,228,711 | – | – | – | 57,576 | 3,974,116 | ||||||||||||||||||||||||
Total | $ | 22,309,642 | $ | – | $ | – | $ | 512,823 | $ | 43,268,068 |
(1) Formerly named Janus Mercury Fund.
PENDING LEGAL MATTERS
In the fall of 2003, the Securities and Exchange Commission ("SEC"), the Office of the New York State Attorney General ("NYAG"), the Colorado Attorney General ("COAG"), and the Colorado Division of Securities ("CDS") announced that they were investigating alleged frequent trading practices in the mutual fund industry. On August 18, 2004, Janus Capital announced that it had reached final settlements with the SEC, the NYAG, the COAG, and the CDS related to such regulators' investigations into Janus Capital's frequent trading arrangements.
A number of civil lawsuits were brought against Janus Capital and certain of its affiliates, the Janus funds, and related entities and individuals based on allegations similar to those announced by the above regulators and were filed in several state and federal jurisdictions. Such lawsuits alleged a variety of theories for recovery including, but not limited to, the federal securities laws, other federal statutes (including ERISA), and various common law doctrines. The Judicial Panel on Multidistrict Litigation transferred these actions to the U.S. District Court for the District of Maryland (the "Court") for coordinated proceedings. On September 29, 2004, five consolidated amended complaints were filed with the Court that generally include: (i) claims by a putative class of investors in certain Janus funds asserting claims on behalf of the investor class (Marini, et al. v. Janus Investment Fund, et al., U.S. District Court, District of Maryland, Case No. 04-CV-00497); (ii) derivative claims by investors in certain Janus funds ostensibly on behalf of such funds (Steinberg et al. v. Janus Capital Management, LLC et al., U.S. District Court, District of Maryland, Case No. 04-CV-00518); (iii) claims on behalf of participants in the Janus 401(k) plan (Wangberger v. Janus Capital Group Inc., 401(k) Advisory Committee, et al., U.S. District Court, District of Maryland, Case No. JFM-05-2711); (iv) claims brought on behalf of shareholde rs of Janus Capital Group Inc. ("JCGI") on a derivative basis against the Board of Directors of JCGI (Chasen v. Whiston, et al., U.S. District Court, District of Maryland, Case No. 04-MD-00855); and (v) claims
36 Janus Smart Portfolios April 30, 2007
by a putative class of shareholders of JCGI asserting claims on behalf of the shareholders (Wiggins, et al. v. Janus Capital Group, Inc., et al., U.S. District Court, District of Maryland, Case No. 04-CV-00818). Each of the five complaints initially named JCGI and/or Janus Capital as a defendant. In addition, the following were also named as defendants in one or more of the actions: Janus Investment Fund ("JIF"), Janus Aspen Series ("JAS"), Janus Adviser Series ("JAD"), Janus Distributors LLC, Enhanced Investment Technologies, LLC ("INTECH"), Bay Isle Financial LLC ("Bay Isle"), Perkins, Wolf, McDonnell and Company, LLC ("Perkins"), the Advisory Committee of the Janus 401(k) plan, and the current or former directors of JCGI.
On August 25, 2005, the Court entered orders dismissing most of the claims asserted against Janus Capital and its affiliates by fund investors in the Marini and Steinberg cases (actions (i) and (ii) above) except certain claims under Section 10(b) of the Securities Exchange Act of 1934 and under Section 36(b) of the Investment Company Act of 1940, as amended (the "1940 Act"). On August 15, 2006, the Wangberger complaint in the 401(k) plan class action (action (iii) above) was dismissed by the district court with prejudice; the plaintiff appealed that dismissal decision to the United States Court of Appeals for the Fourth Circuit. That appeal is still pending. The Court also dismissed the Chasen lawsuit (action (iv) above) against JCGI's Board of Directors without leave to amend. Finally, a Motion to Dismiss the Wiggins suit (action (v) above) was granted and the matter was dismissed in May 2007.
In addition to the lawsuits described above, the Auditor of the State of West Virginia ("Auditor"), in his capacity as securities commissioner, has initiated administrative proceedings against many of the defendants in the market timing cases (including JCGI and Janus Capital) and, as a part of its relief, is seeking disgorgement and other monetary relief based on similar market timing allegations (In the Matter of Janus Capital Group Inc. et al., Before the Securities Commissioner, State of West Virginia, Summary Order No. 05-1320). The respondents in these proceedings collectively sought a Writ of Prohibition in state court, which was denied. Their subsequent Petition for Appeal was also denied. Consequently, in September 2006, JCGI and Janus Capital filed their answer to the Auditor's summa ry order instituting proceedings and requested a hearing. A hearing is currently scheduled for June 28, 2007.
JCGI and Janus Capital, as well as other similarly situated defendants, continue to challenge the statutory authority of the Auditor to bring such an action.
In addition to the "market timing" actions described above, Janus Capital was 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 (Walter Sins, et al. v. Janus Capital Management LLC, U.S. District Court, District of Colorado, Case No. 04-CV-01647-WDM-MEH; Michael Fleisher, et al. v. Janus Capital Management, LLC, 04-CV-02395-MSK-CBS). The action was filed in 2004 by fund investors asserting breach of fiduciary duty under Section 36(b) of the 1940 Act. The plaintiffs sought declaratory and injunctive relief and an unspecified amount of damages. In April 2007, the parties in the litigation jointly filed a Stipulation Regarding Dismissal of Claims With Prejudice ("Stipulation of Dismissal"), and on May 2, 2007, the Colorado District Court approved the Stipulation of Dismissal and dismissed the case.
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 (Pfeiffer v. Credit Suisse First Boston aka In re Initial Public Offering Antitrust Litigation, U.S. District Court, Southern District of New York, Case No. 01-CV-2014). 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. In March 2006, the defendants, including Janus Capital, filed a Petition for a Writ of Certiorari with the U.S. Supreme Court to review the decision of the U. S. Court of Appeals. The U.S. Supreme Court granted the Petition for a Writ of Certiorari and heard argument on the matter on March 27, 2007. The parties are now awaiting a decision on the matter from the U.S. Supreme Court.
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, 2007 37
Additional Information (unaudited)
PROXY VOTING POLICIES AND VOTING RECORD
A description of the policies and procedures that the Portfolios use to determine how to vote proxies relating to their portfolio securities is available: (i) without charge, upon request, by calling 1-800-525-3713 (toll free); (ii) on the Portfolios' website at www.janus.com/proxyvoting; and (iii) on the SEC's website at http://www.sec.gov. Additionally, information regarding each Portfolio's proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through www.janus.com and from the SEC's website at http://www.sec.gov.
QUARTERLY PORTFOLIO HOLDINGS
The Portfolios file their complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Portfolios' Form N-Q: (i) is available on the SEC's website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-3713 (toll free).
APPROVAL OF ADVISORY AGREEMENTS DURING THE PERIOD
In this disclosure, each fund and portfolio of Janus Investment Fund are referred to as "Fund" and collectively as "Funds."
The Trustees of Janus Investment Fund, more than eighty-five percent of whom have never been affiliated with the adviser ("Independent Trustees"), oversee the management of each of the Funds and, as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the three Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each of the Funds, the Trustees received and reviewed a substantial amount of information provided by Janus Capital and the respective subadvisers in response to requests of the Independent Trustees and their independent legal counsel. They also received and reviewed a considerable amount of information and analysis provided 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 independent legal counsel.
At a meeting held on December 20, 2006, based on their evaluation of the information provided by Janus Capital, the subadvisers and the independent fee consultant and other information, the Trustees determined that the overall arrangements between each Fund and Janus Capital were fair and reasonable in light of the nature, extent and quality of the services provided by Janus Capital, its affiliates and the subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting all of the Trustees unanimously approved the continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, for the period from February 1, 2007 through February 1, 2008 (January 1, 2007 through January 1, 2008 for INTECH Risk-Managed Stock Fund and Janus Global Research Fund), subject to earlier termination as provided in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees' determination to approve the continuation of the agreements are discussed separately below.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective and strategy of each Fund and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, 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 Truste e committees, communicating with shareholders and overseeing the activities of other service providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
The Trustees concluded that: the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements; that, taking into account steps taken to address a small portion of the Funds whose performance lagged that of the median of their peers for certain periods, the quality of those services
38 Janus Smart Portfolios April 30, 2007
Additional Information (unaudited) (continued)
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 performance results of each Fund over various time periods. They reviewed information comparing each Fund's performance with the performance of comparable funds and peer groups identified by Lipper Inc., an independent provider of investment company data, and with the Fund's benchmark index. They concluded that the performance of most Funds was good to very good under current market conditions. Although the performance of some Funds lagged that of the median of their peers for certain periods, the Trustees also concluded that Janus Capital had taken appropriate steps to address those instances of under-performance and that the more recent performance of most of those Funds had been improving.
Costs of Services Provided
The Trustees examined information on the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by Lipper. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and administrative) fees for most of the Funds, in some cases after contractual expense limitations, was below the mean management fee rate of the respective peer group of funds selected by Lipper.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent and the competitive market for mutual funds in different distribution channels. They concluded that the compensation methodology provided a good alignment of the interests of the portfolio managers with the interests of Fund shareholders.
The Trustees also reviewed management fees charged by Janus Capital to its separate account clients and to its subadvised funds (for which Janus Capital provides only services related to portfolio management). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fees for Funds having a similar strategy, the Trustees noted that, under the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administrative services, oversight of the Funds' other service providers, Trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks that it does not assume in servicing its other clients. Moreover, they noted that the spread between the average fee rates charged to the Funds and the fee rates that Janus Capital charged to its separate account clients was significantly smaller than the average spread for such fee rates of other advisers, based on publicly available data and research conducted by their independent fee consultant.
In considering the fees charged by Janus Capital, the Trustees noted that, in addition to the previously approved performance fee structure for Janus Worldwide Fund and certain other Funds that would become operative in February 2007, they also had negotiated with Janus Capital a temporary waiver of a portion of the investment advisory fee paid by Janus Worldwide Fund to Janus Capital to provide for a possible reduction in the rate of advisory fee payable by the Fund for the period July 1, 2006 through January 31, 2007 if the investment performance of the Fund should lag that of its benchmark index performance over the applicable performance measurement period.
The Trustees reviewed information on the profitability of Janus Capital and its affiliates of their relationships with each Fund, as well as an explanation of the methodology utilized in allocating various expenses among the Funds and other clients. The Trustees also reviewed the financial statements of Janus Capital's parent company and its corporate structure. In their review, the Trustees considered whether Janus Capital and each subadviser receive adequate incentives to manage the Funds effectively. The Trustees recognized that profitability comparisons among investment advisers are difficult because very little comparative information is publicly available and profitability of any adviser is affected by numerous factors, including the organizational structure of the particular manager, the types of funds and other accounts it manages, possible other lines of business, the methodology for allocating expenses and the adviser's capital str ucture and cost of capital. However, based on the information available and taking those factors into account, the Trustees concluded that Janus Capital's profitability with respect to each Fund in relation to the services rendered was not unreasonable.
The Trustees concluded that the management fees and other compensation payable by each Fund to Janus Capital and its affiliates, as well as the fees paid by Janus Capital 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
Janus Smart Portfolios April 30, 2007 39
comparable mutual funds with similar strategies and the fees Janus Capital and the subadviser charge 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 and any subadviser, the investment performance of the Fund and any expense limitations agreed to by Janus Capital.
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of the Funds increase. They noted that, although most Funds pay advisory fees at a fixed rate as a percentage of net assets, without any breakpoints, the management fee rate paid by each Fund, after any contractual expense limitations, was below the mean management fee rate of the Fund's peer group selected by Lipper; and, for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of many of the Funds declined in the past few years, these Funds benefited from having advisory fee rates that remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for several Funds that will cause the effective rate of advisor y fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through lower charges of third-party service providers based on the combined scale of all of the Funds. Based on all of the information they reviewed, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of economies of scale at the current asset level of the Fund.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and that the transfer agent receives compensation directly from the non-money market Funds for services provided. The Trustees also considered Janus Capital's past and proposed use of commissions paid by the Funds on their portfolio brokerage transactions to obtain proprietary research products and services benefiting those Funds and/or other clients of Janus Capital, as well as Janus Capital's prior agreement not to use any Fund's brokerage transactions to obtain third party research products or services. The Trustees concluded that Janus Capital's use of "soft" commission dollars of a Fund to obtain proprietary resear ch products and services was consistent with regulatory requirements and guidelines and was likely to benefit the Funds. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital may potentially benefit from their relationship with each other in other ways. They 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 any Fund could attract other business to Janus Capital or other Janus funds and that the success of Janus Capital could enhance Janus Capital's ability to serve the Funds.
After full consideration of the above factors as well as other factors, all of the Trustees, including all of the Independent Trustees, concluded that the proposed continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, was in the best interest of the respective Funds and their shareholders.
40 Janus Smart Portfolios April 30, 2007
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.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized and unsubsidized ratios for the past fiscal year. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting a Portfolio's unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects a Portfolio's subsidized expense ratio. Both the total annual fund operating expenses ratio and net annual fund operating expenses ratio are based on average net assets as of the fiscal year ended October 31, 2006. The ratios also include expenses indirectly incurred by the Portfolio as a result of investing in other investment companies or pooled investments, which are not reflected in the "Financial Highlights" of this report. As a result, these ratios may be higher or lower than those shown in the "Financial Highlights" in this report. All ex penses are shown without the effect of expense offset arrangements. Pursuant to such arrangements, credits realized as a result of uninvested cash balances are used to reduce custodian and transfer agent expenses.
2. SCHEDULES OF INVESTMENTS
Following the performance overview section is each Portfolio's Schedule of Investments. This schedule reports the types of securities held in each Portfolio on the last day of the reporting period. Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period.
3. STATEMENT OF ASSETS AND LIABILITIES
This statement is often referred to as the "balance sheet." It lists the assets and liabilities of the Portfolios on the last day of the reporting period.
The Portfolios' assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on underlying fund shares owned and the receivable for Portfolio shares sold to investors but not yet settled. The Portfolios' liabilities include payables for securities purchased but not yet settled, Portfolio shares redeemed but not yet paid and expenses owed but not yet paid. Additionally, there may be other assets and liabilities.
The section entitled "Net Assets Consist of" breaks down the components of the Portfolios' net assets. Because Portfolios must distribute substantially all earnings, you'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.
Janus Smart Portfolios April 30, 2007 41
Explanations of Charts, Tables and
Financial Statements (unaudited) (continued)
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.
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 a Portfolio'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, expense ratios and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income per share, which comprises dividends and interest income earned on securities held by the Portfolio. Following is the total of gains/(losses), realized and unrealized. Dividends and distributions are then subtracted to arrive at the NAV per share at the end of the period.
The next line reflects the average annual total return reported the last day of the period.
Also included are the expense ratios, or the percentage of 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 the 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 figure 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.
42 Janus Smart Portfolios April 30, 2007
Notes
Janus Smart Portfolios April 30, 2007 43
Notes
44 Janus Smart Portfolios April 30, 2007
Notes
Janus Smart Portfolios April 30, 2007 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-0507-333 111-24-106 06-07
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| 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. | |
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| (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. | |
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| (a)(3) |
| Not applicable to open-end companies. | |
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| (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/ Andrew J. Iseman |
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| Andrew J. Iseman, |
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| President and Chief Executive Officer of Janus Investment Fund (Principal Executive Officer) | ||
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Date: June 22, 2007 | |||
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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/ Andrew J. Iseman |
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| Andrew J. Iseman, | ||
| President and Chief Executive Officer of Janus Investment Fund (Principal Executive Officer) | ||
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Date: June 22, 2007 | |||
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By: | /s/ Jesper Nergaard |
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| Jesper Nergaard, | ||
| Vice President, Chief Financial Officer, Treasurer and Principal Accounting Officer of Janus Investment Fund (Principal Accounting Officer and Principal Financial Officer) | ||
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Date: June 22, 2007 | |||