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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21371
Janus Adviser
(Exact name of registrant as specified in charter)
151 Detroit Street, Denver, Colorado 80206
(Address of principal executive offices) (Zip code)
Kelley Abbott Howes, 151 Detroit Street, Denver, Colorado 80206
(Name and address of agent for service)
Registrant's telephone number, including area code: 303-333-3863
Date of fiscal year end: 02/29
Date of reporting period: For the two months ended 02/29/04
Item 1 - Reports to Shareholders
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2004 ANNUAL REPORT
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JANUS ADVISER US Value Fund
International Equity Fund
[LOGO] JANUS CAPITAL
Group
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TABLE OF CONTENTS
JANUS ADVISER
Portfolio Managers' Commentaries and Schedules of Investments
US Value Fund ............................................. 1
International Equity Fund ................................. 5
Statements of Assets and Liabilities ........................... 10
Statements of Operations ....................................... 11
Statements of Changes in Net Assets ............................ 12
Financial Highlights ........................................... 13
Notes to Schedules of Investments .............................. 17
Notes to Financial Statements .................................. 18
Report of Independent Auditors ................................. 28
Explanations of Charts, Tables and Financial Statements ........ 29
Designation Requirements ....................................... 31
Trustees and Officers .......................................... 32
Note: This Annual Report covers an abbreviated reporting period due to the
Funds' recent reorganization as Janus funds. Going forward, Semiannual and
Annual Reports will be dated as of August 31 and February 28, respectively.
You may also view fund performance, portfolio holdings and other information
regarding your investment at any time on www.janus.com.
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US VALUE FUND (unaudited) Sub-advised by Vontobel
Asset Management, Inc.
FUND PERFORMANCE AND MARKET COMMENTARY
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[PHOTO]
Ed Walczak
portfolio manager
PERFORMANCE OVERVIEW
For the two month period ended February 29, 2004, the Fund gained 3.99% for its
Investor Shares, 3.95% for its Class I Shares, 1.87%*** for its Class C Shares
and (1.99)%*** for its Class A Shares, while its benchmark, the S&P 500 Index,
returned 3.25%.
MARKET OVERVIEW
U.S. stocks generally gained during the two month period, extending the rally
that began in March 2003 and lifting several major indexes to levels not seen in
nearly three years. Factors supporting the market's advance included stronger
corporate earnings and economic growth, signs of job market improvement, a
pickup in merger activity, and repeated assurances from the Federal Reserve that
short-term interest rates will remain low due to low inflation. Also encouraging
were signs that consumer demand remained strong and business spending continued
to improve.
MANAGER'S OVERVIEW
Q. HOW DID YOU MANAGE THE FUND IN THIS ENVIRONMENT?
Many lower-quality, economically sensitive stocks appreciated in price during
the period. While these types of stocks may provide investors short-term periods
of outperformance, we look to invest in companies that have sustainable business
models and will outperform through all types of market conditions. Therefore, we
continued to avoid these lower-quality names, as our investable universe seeks
well-managed companies with long operating histories in understandable,
predictable businesses that are attractively priced.
Over the past two months, higher stock prices allowed us to trim or sell
portfolio holdings that reached our price targets. Although we generally
redeploy such assets among other investments we deem attractive, we felt that
the stocks in our investable universe did not offer attractive entry points and
therefore held a higher cash position than normal.
Q. WHICH INDIVIDUAL HOLDINGS HAD THE GREATEST POSITIVE IMPACT ON PERFORMANCE?
Berkshire Hathaway, owner of a diverse range of businesses, as well as consumer
financial services company Freddie Mac, were among our stronger performers
during the period. We continued to hold large positions in these stocks, as we
believe they are the most undervalued within our investable universe.
Q. WHICH INDIVIDUAL HOLDINGS HAD THE GREATEST NEGATIVE IMPACT ON PERFORMANCE?
The Fund's most significant detractor was Fifth Third Bancorp, a diversified
financial services company. Also holding back results were our positions in
insurance company Old Republic International Corporation and Health Management
Associates, an owner and operator of general acute care hospitals and
psychiatric hospitals in non-urban communities.
Q. WHICH SECTORS HAD THE GREATEST IMPACT ON THE FUND'S PERFORMANCE?
Select holdings in the financial and consumer discretionary groups provided the
biggest boost to the Fund's absolute performance. These two sectors comprised
the majority of the Fund's total assets. Healthcare was the only sector that
contributed negatively to our absolute results.
Q. HOW WILL YOU MANAGE THE FUND IN THE MONTHS AHEAD?
Despite our larger-than-normal cash position and what we believe is a scarcity
of good companies selling for cheap prices, we are optimistic about the future.
We will continue to attempt to prudently manage risk with the goal of delivering
solid, absolute returns for our shareholders.
Janus Adviser February 29, 2004 1
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US VALUE FUND (unaudited)
US Value Fund - Class A Shares(at MOP)*** $57,477
S&P 500(R) Index $45,478
INITIAL INVESTMENT OF $10,000
[LINE GRAPH]
A graphic comparison of the change in value of a hypothetical $10,000 investment
in US Value Fund - Class A Shares(at MOP) and the S&P 500(R) Index. US Value
Fund - Class A Shares(at MOP) is represented by a shaded area of blue. The S&P
500(R) is represented by a solid black line. The "y" axis reflects the value of
the investment. The "x" axis reflects the computation periods from inception,
March 30, 1990, through February 29, 2004. The upper right quadrant reflects the
ending value of the hypothetical investment in US Value Fund - Class A Shares(at
MOP) ($57,477) as compared to the S&P 500(R) ($45,478).
Average Annual Total Return - for the periods ended February 29, 2004
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FISCAL ONE FIVE TEN SINCE
YEAR-TO-DATE YEAR YEAR YEAR INCEPTION*
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US Value Fund
- - Investor Shares 3.99% 38.06% 10.41% 14.45% 13.70%
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US Value Fund
- - Class I Shares 3.95% 38.04% 10.28% 14.30% 13.57%
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US Value Fund
- - Class C Shares at NAV** 3.86% 36.45% 9.62% 13.67% 13.00%
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US Value Fund
- - Class C Shares at MOP*** 1.87% 33.82% 9.40% 13.56% 12.92%
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US Value Fund
- - Class A Shares at NAV** 3.99% 38.18% 10.50% 14.69% 13.87%
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US Value Fund
- - Class A Shares at MOP*** (1.99)% 30.21% 9.20% 14.01% 13.39%
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S&P 500(R)Index 3.25% 38.50% (0.12)% 11.35% 11.50%
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Past performance is no guarantee of future results and investment results and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. Current performance may be higher or lower
than the figures shown. Call 1-800-525-1068 or visit janus.com for current
month-end performance information.
* The Fund's inception date - March 30, 1990. Returns stated for periods
prior to October 13, 2003 are derived from the historical performance of
Class A Shares of Vontobel US Value Fund. Returns are restated to reflect
the higher fees and expenses of US Value Fund.
** Performance is shown at Net Asset Value (NAV) which does not include any
applicable sales loads or contingent deferred sales charges. Performance
would have been lower had these charges been taken into account.
*** Performance is shown at Maximum Offering Price (MOP) which includes the
maximum 5.75% and 1.00% upfront sales charge on Class A Shares and Class C
Shares, respectively.
The performance shown for Class A Shares does not reflect the 1.00%
contingent deferred sales charge that may be imposed on certain redemptions
of Class A Shares bought without an initial sales charge and redeemed
within 12 months of purchase. The one-year performance for Class C Shares
reflects a contingent deferred sales charge of 1.00%, which applies to C
Shares redeemed within 12 months of purchase.
Fund Strategy
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This nondiversified value fund seeks to find US companies of any size that the
portfolio manager believes are attractively priced.
Fund Asset Mix - (% of Net Assets)
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[PIE CHART]
Common Stock - Foreign - 1.5%
Cash and Cash Equivalents - 29.8%
Common Stock - Domestic - 68.7%
Number of Stocks: 25
Top 10 Equities: 48.9%
2 Janus Adviser February 29, 2004
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Top 10 Equity Holdings - (% of Net Assets)
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FEBRUARY 29, 2004 DECEMBER 31, 2003
Berkshire Hathaway, Inc. - Class A 9.2% 12.8%
Freddie Mac 6.6% 8.4%
Fannie Mae 6.1% 8.1%
Cincinnati Financial Corp. 5.6% 6.0%
American International Group, Inc. 4.4% 6.5%
TJX Companies, Inc. 3.8% 4.0%
Markel Corp. 3.5% 4.0%
Universal Health Services, Inc. - Class B 3.3% 3.5%
Fifth Third Bancorp 3.2% 3.8%
Wells Fargo & Co. 3.2% 3.7%
Top Industries - Fund vs. Index (% of Net Assets)
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[BAR CHART]
US Value S&P 500(R)
Fund Index
Finance - Mortgage Loan Banker 12.7% 1.3%
Multi-Line Insurance 11.0% 3.0%
Reinsurance 9.2% -
Medical - Hospitals 7.7% 0.3%
Property and Casualty Insurance 6.9% 0.8%
Super-Regional Banks 6.4% 5.3%
Retail - Discount 3.8% 3.2%
Finance - Credit Card 2.7% 1.2%
Food - Retail 1.7% 0.9%
Beverages - Wine and Spirits 1.5% 0.1%
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All returns include reinvested dividends and capital gains, but do not include
the effect of taxes that a shareholder would pay on Fund distributions or the
redemption of Fund shares. See Notes to Schedules of Investments for index
definitions.
See "Explanations of Charts, Tables and Financial Statements."
See Note 6 in Notes to Financial Statements.
This Fund is designed for long-term investors who can accept the special risks
associated with value investing. A "nondiversified" portfolio has the ability to
take larger positions in a smaller number of issuers than a "diversified"
portfolio. Nondiversified portfolios may experience greater price volatility.
The Fund 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.
A fund's performance for very short time periods may not be indicative of future
performance.
There is no assurance the investment process will consistently lead to
successful investing.
Due to recent market volatility, the Fund may have an increased position in cash
for temporary defensive purposes.
Janus Capital Management LLC has contractually agreed to waive the Fund's total
operating expenses to the levels indicated in the prospectus until at least
September 30, 2005. Without such waivers, total returns would have been lower.
Janus Adviser February 29, 2004 3
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US VALUE FUND
SCHEDULE OF INVESTMENTS
Shares or Principal Amount Market Value
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Common Stock - 70.2%
Beverages - Wine and Spirits - 1.5%
22,200 Diageo PLC (ADR) ............................ $ 1,257,630
Commercial Banks - 1.1%
21,500 Corus Bankshares, Inc. ...................... 873,115
Fiduciary Banks - 1.2%
18,700 State Street Corp. .......................... 1,004,751
Finance - Credit Card - 2.7%
41,900 American Express Co. ........................ 2,238,298
Finance - Mortgage Loan Banker - 12.7%
66,374 Fannie Mae .................................. 4,971,413
86,200 Freddie Mac ................................. 5,337,504
10,308,917
Food - Diversified - 0.8%
13,500 General Mills, Inc. ......................... 620,730
Food - Retail - 1.7%
60,700 Safeway, Inc.* .............................. 1,388,209
Instruments - Controls - 1.4%
48,600 Watts Water Technologies, Inc. - Class A .... 1,124,604
Medical - Hospitals - 7.7%
38,200 HCA, Inc. ................................... 1,624,264
89,300 Health Management Associates, Inc. - Class A 1,990,497
49,300 Universal Health Services, Inc. - Class B ... 2,658,749
6,273,510
Motorcycle and Motor Scooter Manufacturing - 1.0%
15,100 Harley-Davidson, Inc. ....................... 802,112
Multi-Line Insurance - 11.0%
49,000 American International Group, Inc. .......... 3,626,000
100,350 Cincinnati Financial Corp. .................. 4,519,764
34,337 Old Republic International Corp. ............ 810,353
8,956,117
Property and Casualty Insurance - 6.9%
32,800 Chubb Corp. ................................. 2,328,144
10,530 Markel Corp.* ............................... 2,865,845
8,000 Mercury General Corp. ....................... 408,800
5,602,789
Reinsurance - 9.2%
79 Berkshire Hathaway, Inc. - Class A* ......... 7,465,500
Retail - Discount - 3.8%
132,900 TJX Companies, Inc. ......................... 3,129,795
Savings/Loan/Thrifts - 0.7%
5,300 Golden West Financial Corp. ................. 611,726
Super-Regional Banks - 6.4%
46,900 Fifth Third Bancorp ......................... 2,627,338
45,400 Wells Fargo & Co. ........................... 2,603,690
5,231,028
Textile-Home Furnishings - 0.4%
3,800 Mohawk Industries, Inc.* .................... 316,540
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Total Common Stock (cost $44,990,406) ....................... 57,205,371
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Repurchase Agreement - 4.9%
$ 4,000,000 Banc of America Securities LLC, 1.09%
dated 2/27/04, maturing 3/1/04
to be repurchased at $4,000,363
collateralized by $4,485,994
in U.S. Government Agencies
4.00% - 6.50%, 2/1/11 - 2/1/34
with a value of $4,080,000
(cost $4,000,000) ........................ $ 4,000,000
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Short-Term U.S. Government Agencies - 25.2%
Federal Home Loan Bank System
20,500,000 0.91%, 3/1/04
(amortized cost $20,500,000) ............. 20,500,000
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Total Investments (total cost $69,490,406) - 100.3% ......... 81,705,371
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Liabilities, net of Cash, Receivables and Other Assets - (0.3)% (273,494)
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Net Assets - 100% ........................................... $ 81,431,877
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Summary of Investments by Country, February 29, 2004
Country % of Investment Securities Market Value
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United Kingdom 1.5% $ 1,257,630
United States++ 98.5% 80,447,741
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Total 100.0% $ 81,705,371
++ Includes Short - Term Securities (68.5% excluding Short - Term Securities)
See Notes to Schedules of Investments and Financial Statements.
4 Janus Adviser February 29, 2004
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INTERNATIONAL EQUITY FUND (unaudited) Sub-advised by Vontobel
Asset Management, Inc.
FUND PERFORMANCE AND MARKET COMMENTARY
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[PHOTO]
Rajiv Jain
portfolio manager
PERFORMANCE OVERVIEW
For the two month period ended February 29, 2004, the Fund gained 4.25% for its
Investor Shares, 4.25% for its Class I Shares, 2.08%*** for its Class C Shares
and (1.78)%*** for its Class A Shares, while its benchmark, the MSCI EAFE(R)
Index, gained 3.76%.
MARKET OVERVIEW
International stocks generally edged higher during the two-month period,
continuing the powerful surge that began in March 2003. The advance was
broad-based, with indices in all major regions and most countries tacking on
gains. This global economic resurgence was led by significant gains in U.S. GDP
growth, which helped boost investor optimism. Also benefiting results was the
continued weakness of the U.S. dollar.
MANAGER'S OVERVIEW
Q. HOW DID YOU MANAGE THE FUND IN THIS ENVIRONMENT?
We continued to find what we believe are high-quality names. Our investments in
this region have enjoyed decent growth and, in our opinion, have reasonable
valuations and fairly predictable franchises. Meanwhile, we remained wary of the
U.S. dollar.
Q. WHICH INDIVIDUAL HOLDINGS HAD THE GREATEST POSITIVE IMPACT ON PERFORMANCE?
The biggest contributor to the Fund's absolute results was Northern Rock, a
specialized mortgage lender that provides residential mortgages for both the
retail and wholesale markets. Our holdings in Johnston Press, a publishing
company operator, also helped boost performance, as did our investment in
international brewer Heineken.
Q. WHICH INDIVIDUAL HOLDINGS HAD THE GREATEST NEGATIVE IMPACT ON PERFORMANCE?
Amorepacific was the Fund's largest detractor. Also topping our list of
detractors were tobacco company Swedish Match and Macquarie Bank, a national
investment bank providing financial services to customers in Australia.
Q. WHICH SECTORS HAD THE GREATEST IMPACT ON THE FUND'S PERFORMANCE?
Our holdings in the consumer staples and financials groups provided the biggest
boost to the Fund's absolute performance. These two sectors comprised the
majority of the Fund's total assets. Healthcare, which represented a small
percentage of the Fund's total assets, was the only sector that contributed
negatively to our absolute results.
Q. HOW WILL YOU MANAGE THE FUND IN THE MONTHS AHEAD?
While we're pleased with our short-term performance, we take a longer term view
and strive to grow the value of the Fund in absolute terms in the long run.
Although we believe the Fund should continue to deliver high single to low
double-digit earnings growth, we also believe the risk of underperforming our
benchmark still exists, particularly if global economies continue to grow at
current rates and commodity prices increase even further. By focusing on
companies with long operating histories, stable growth trends, strong
fundamentals and easy-to-understand business strategies, we're confident we
should be able to continue delivering solid results for the Fund's shareholders
in the long run. The Fund has done well in absolute terms over the past 12
months, so some pullback should be expected.
Janus Adviser February 29, 2004 5
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INTERNATIONAL EQUITY FUND (unaudited)
International Equity Fund - Class A Shares (at MOP)*** $20,287
Morgan Stanley Capital International EAFE(R) Index $18,264
INITIAL INVESTMENT OF $10,000
[LINE GRAPH]
A graphic comparison of the change in value of a hypothetical $10,000 investment
in International Equity Fund - Class A Shares (at MOP) and the Morgan Stanley
Capital International EAFE(R) Index. International Equity Fund - Class A Shares
(at MOP) is represented by a shaded area of blue. The Morgan Stanley Capital
International EAFE(R) Index is represented by a solid black line. The "y" axis
reflects the value of the investment. The "x" axis reflects the computation
periods from inception, July 6, 1990, through February 29, 2004. The upper right
quadrant reflects the ending value of the hypothetical investment in
International Equity Fund - Class A Shares (at MOP) ($20,287) as compared to the
Morgan Stanley Capital International EAFE(R) Index ($18,264).
Average Annual Total Return - for the periods ended February 29, 2004
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Fiscal One Five Ten Since
Year-to-Date Year Year Year Inception*
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International Equity Fund
- - Investor Shares 4.25% 45.82% 1.07% 4.09% 5.69%
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International Equity Fund
- - Class I Shares 4.25% 45.70% 0.96% 3.96% 5.57%
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International Equity Fund
- - Class C Shares at NAV** 4.01% 46.61% 0.80% 3.65% 5.20%
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International Equity Fund
- - Class C Shares at MOP*** 2.08% 43.75% 0.60% 3.54% 5.12%
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International Equity Fund
- - Class A Shares at NAV** 4.25% 45.91% 1.15% 4.18% 5.78%
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International Equity Fund
- - Class A Shares at MOP*** (1.78)% 37.52% (0.04)% 3.56% 5.32%
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Morgan Stanley Capital
International EAFE(R)Index# 3.76% 53.58% 1.23% 4.03% 4.51%
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Past performance is no guarantee of future results and investment results and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. Current performance may be higher or lower
than the figures shown. Call 1-800-525-1068 or visit janus.com for current
month-end performance information.
* The Fund's inception date - July 6, 1990. Since inception returns reflect
the returns of Vontobel International Equity Fund from July 6, 1990, when
Vontobel Asset Management, Inc. became the Fund's investment adviser.
Previous periods during which the Fund was advised by other investment
advisers are not shown. Returns stated for periods prior to October 13,
2003 are derived from the historical performance of Class A Shares of
Vontobel International Equity Fund. Returns are restated to reflect the
higher fees and expenses of International Equity Fund.
** Performance is shown at Net Asset Value (NAV) which does not include any
applicable sales loads or contingent deferred sales charges. Performance
would have been lower had these charges been taken into account.
*** Performance is shown at Maximum Offering Price (MOP) which includes the
maximum 5.75% and 1.00% upfront sales charge on Class A Shares and Class C
Shares, respectively.
The performance shown for Class A Shares does not reflect the 1.00%
contingent deferred sales charge that may be imposed on certain redemptions
of Class A Shares bought without an initial sales charge and redeemed
within 12 months of purchase. The one-year performance for Class C Shares
reflects a contingent deferred sales charge of 1.00%, which applies to
Class C Shares redeemed within 12 months of purchase.
# Since inception return is calculated based on historical information from
June 30, 1990 to February 29, 2004.
Fund Strategy
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This diversified fund seeks to invest in securities of companies located
primarily outside the U.S. that the portfolio manager believes are attractively
priced.
Fund Asset Mix - (% of Net Assets)
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[PIE CHART]
Preferred Stock - 1.4%
Cash and Cash Equivalents - 2.0%
Common Stock - Foreign - 96.6%
Number of Stocks: 49
Top 10 Equities: 34.9%
6 Janus Adviser February 29, 2004
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Top 10 Equity Holdings - (% of Net Assets)
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FEBRUARY 29, 2004 DECEMBER 31, 2003
Anglo Irish Bank Corporation PLC 4.5% 4.0%
Northern Rock PLC 4.2% 4.0%
Diageo PLC 4.0% 3.7%
Heineken N.V 3.7% 3.2%
Nestle S.A 3.4% 3.5%
Tesco PLC 3.4% 2.5%
ABN AMRO Holding N.V 3.1% 3.9%
British American Tobacco PLC 3.0% 2.9%
Johnston Press PLC 2.9% 2.5%
Macquarie Bank, Ltd. 2.7% 2.5%
Top Industries - Fund vs. Index (% of Net Assets)
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[BAR CHART]
International MSCI EAFE(R)
Equity Fund Index
Commercial Banks 13.9% 4.9%
Tobacco 9.4% 0.7%
Food - Retail 6.7% 1.5%
Money Center Banks 5.6% 12.7%
Food - Diversified 5.2% 4.9%
Gas - Distribution 4.6% 0.7%
Mortgage Banks 4.2% -
Beverages - Wines and Spirits 4.0% 0.7%
Brewery 3.7% 0.6%
Cosmetics and Toiletries 3.1% 0.6%
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All returns include reinvested dividends and capital gains, but do not include
the effect of taxes that a shareholder would pay on Fund distributions or the
redemption of Fund shares. See Notes to Schedules of Investments for index
definitions.
See "Explanations of Charts, Tables and Financial Statements."
See Note 6 in Notes to Financial Statements.
For Investor Shares and Class I Shares, a 1.00% redemption fee may be imposed on
shares held for 3 months or less. Effective May 1, 2004, the redemption fee will
increase to 2.00% on shares purchased on or after that date.
The Fund 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.
A fund's performance for very short time periods may not be indicative of future
performance.
There is no assurance the investment process will consistently lead to
successful investing.
Janus Capital Management LLC has contractually agreed to waive the Fund's total
operating expenses to the levels indicated in the prospectus until at least
September 30, 2005. Without such waivers, total returns would have been lower.
Foreign investing involves special risks such as currency fluctuations and
political uncertainty.
Janus Adviser February 29, 2004 7
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INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS
Shares or Principal Amount Market Value
================================================================================
Common Stock - 96.6%
Automotive - Cars and Light Trucks - 1.8%
12,800 Honda Motor Company, Ltd. ................... $ 557,642
Beverages - Non-Alocholic - 1.3%
700 Lotte Chilsung Beverage Company, Ltd. ....... 386,905
Beverages - Wine and Spirits - 4.0%
88,515 Diageo PLC** ................................ 1,223,785
Brewery - 3.7%
26,382 Heineken N.V.** ............................. 1,121,062
Building - Residential and Commercial - 2.1%
63,176 Barratt Developments PLC** .................. 650,108
Commercial Banks - 13.9%
42,030 ABN AMRO Holding N.V.** ..................... 970,810
81,577 Anglo Irish Bank Corporation PLC** .......... 1,383,553
38,996 Australia and New Zealand Banking
Group, Ltd.** ............................ 541,272
2,622 Banco Itau Holdings Financeira S.A .......... 249,102
12,733 Banco Popular Espanol S.A.** ................ 772,843
18,300 Svenska Handelsbanken A.B. - Class A ........ 344,161
4,261,741
Commercial Services - 1.1%
299,200 Singapore Airport Terminal Services, Ltd. ... 349,777
Cosmetics and Toiletries - 3.1%
3,760 Amorepacific Corp. .......................... 543,538
20,000 Kao Corp. ................................... 421,929
965,467
Distribution/Wholesale - 1.6%
124,000 Esprit Holdings, Ltd. ....................... 484,285
Diversified Operations - 3.0%
42,900 Remgro, Ltd. ................................ 472,439
21,300 Wesfarmers, Ltd.** .......................... 451,936
924,375
Diversified Operations - Commercial Services - 1.8%
68,086 Bunzl PLC** ................................. 563,540
Electric - Transmission - 2.3%
40,700 Red Electrica de Espana ..................... 692,804
Finance - Investment Bankers/Brokers - 2.7%
32,500 Macquarie Bank, Ltd.** ...................... 829,996
Food - Confectionary - 2.3%
398 Lindt & Spruengli A.G.** .................... 358,813
740 Lotte Confectionery Company, Ltd. ........... 342,942
701,755
Food - Diversified - 5.2%
66,917 Cadbury Schweppes PLC** ..................... 551,381
3,990 Nestle S.A.** ............................... 1,052,439
1,603,820
Food - Retail - 6.7%
1,700 Colruyt N.V.** .............................. 193,693
216,837 Tesco PLC** ................................. 1,036,197
97,281 William Morrison Supermarkets PLC** ......... 442,761
42,900 Woolworths, Ltd.** .......................... 388,258
2,060,909
Gambling - Non-Hotel - 1.5%
51,500 TABCORP Holdings, Ltd.** .................... $ 449,799
Gas - Distribution - 4.6%
61,800 Enagas** .................................... 713,346
191,000 Tokyo Gas Company, Ltd. ..................... 709,738
1,423,084
Money Center Banks - 5.6%
7,500 BNP Paribas S.A.** .......................... 473,858
24,876 Royal Bank of Scotland Group PLC** .......... 786,651
11,900 State Bank of India (GDR) ................... 452,200
1,712,709
Mortgage Banks - 4.2%
90,738 Northern Rock PLC** ......................... 1,304,196
Multi-Line Insurance - 1.5%
8,200 CNP Assurances** ............................ 473,153
Office Automation and Equipment - 1.9%
29,000 Ricoh Company, Ltd. ......................... 586,582
Property and Casualty Insurance - 2.5%
61 Millea Holdings, Inc. ....................... 781,622
Publishing - Newspapers - 2.9%
92,700 Johnston Press PLC** ........................ 889,411
Real Estate Management/Services - 1.3%
11,400 Daito Trust Construction Company, Ltd. ...... 393,355
Real Estate Operating/Development - 1.8%
54,100 Westfield Holdings, Ltd.** .................. 538,457
Retail - Jewelry - 1.5%
241,670 Signet Group PLC** .......................... 455,220
Soap And Cleaning Preparations - 1.3%
15,058 Reckitt Benckiser PLC** ..................... 392,902
Tobacco - 9.4%
59,833 British American Tobacco PLC** .............. 912,735
30,100 Imperial Tobacco Group PLC** ................ 647,414
18,400 ITC, Ltd. (GDR) ............................. 509,312
31,400 Souza Cruz S.A .............................. 330,441
52,400 Swedish Match A.B ........................... 499,772
2,899,674
- --------------------------------------------------------------------------------
Total Common Stock (cost $22,750,254) ....................... 29,678,135
- --------------------------------------------------------------------------------
Preferred Stock - 1.4%
Medical - Hospitals - 1.4%
9,000 Rhoen-Klinikum A.G.** (cost $441,448) ....... 447,299
- --------------------------------------------------------------------------------
Short-Term U.S. Government Agency - 3.6%
Federal Home Loan Bank System
$ 1,100,000 0.91%, 3/1/04
(amortized cost $1,100,000) .............. 1,100,000
- --------------------------------------------------------------------------------
Total Investments (total cost $24,291,702) - 101.6% ......... 31,225,434
- --------------------------------------------------------------------------------
Liabilities, net of Cash, Receivables and Other Assets - (1.6)% (504,888)
- --------------------------------------------------------------------------------
Net Assets - 100%............................................ $30,720,546
- --------------------------------------------------------------------------------
See Notes to Schedules of Investments and Financial Statements.
8 Janus Adviser February 29, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Summary of Investments by Country, February 29, 2004
Country % of Investment Securities Market Value
- --------------------------------------------------------------------------------
Australia 10.2% $ 3,199,718
Belgium 0.6% 193,693
Bermuda 1.6% 484,285
Brazil 1.9% 579,542
France 3.0% 947,011
Germany 1.4% 447,299
India 3.1% 961,512
Ireland 4.4% 1,383,554
Japan 11.1% 3,450,870
Netherlands 6.7% 2,091,872
Singapore 1.1% 349,777
South Africa 1.5% 472,439
South Korea 4.1% 1,273,384
Spain 7.0% 2,178,992
Sweden 2.7% 843,932
Switzerland 4.5% 1,411,252
United Kingdom 31.6% 9,856,302
United States++ 3.5% 1,100,000
- --------------------------------------------------------------------------------
Total 100.0% $ 31,225,434
++ Includes Short-Term Securities (0% excluding Short-Term Securities)
Forward Currency Contracts, Open at February 29, 2004
Currency Sold and Currency Unrealized
Settlement Date Units Value in $ U.S. Gain/(Loss)
- --------------------------------------------------------------------------------
Australian Dollar 9/1/04 1,210,000 $ 935,935 $ (27,878)
British Pound 9/1/04 1,335,000 2,437,169 11,355
Euro 9/1/04 1,640,000 2,027,915 4,947
Swiss Franc 9/1/04 461,000 364,808 1,297
- --------------------------------------------------------------------------------
Total $ 5,765,827 $ (10,279)
See Notes to Schedules of Investments and Financial Statements.
Janus Adviser February 29, 2004 9
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
As of February 29, 2004 US Value International
(all numbers in thousands except net asset value per share) Fund(1) Equity Fund(2)
- -------------------------------------------------------------------------------------------
Assets:
Investments at cost $ 69,490 $ 24,292
Investments at value $ 81,705 $ 31,225
Cash 146 142
Receivables:
Investments sold 164 356
Portfolio shares sold 245 11
Dividends 35 106
Due from Advisor 68 40
Forward currency contracts -- 18
- -------------------------------------------------------------------------------------------
Total Assets 82,363 31,898
- -------------------------------------------------------------------------------------------
Liabilities:
Payables:
Investments purchased 810 769
Portfolio shares repurchased 23 320
Advisory fees 61 24
Transfer agent fees and expenses 2 2
Administrative services fees - Investor Shares 5 2
Administrative services fees - Class I Shares 1 --
Distribution fees - Investor Shares 14 6
Distribution fees - Class I Shares 1 --
Distribution fees - Class C Shares 1 --
Distribution fees - Class A Shares 1 --
Accrued expenses 12 26
Forward currency contracts -- 28
- -------------------------------------------------------------------------------------------
Total Liabilities 931 1,177
- -------------------------------------------------------------------------------------------
Net Assets $ 81,432 $ 30,721
- -------------------------------------------------------------------------------------------
Net Assets Consist of:
Capital (par value and paid-in-surplus)* 62,623 31,162
Undistributed net investment income/(loss)* -- (67)
Undistributed net realized gain/(loss) from investments
and foreign currency transactions* 6,594 (7,314)
Unrealized appreciation/(depreciation) of investments
and foreign currency translations 12,215 6,940
- -------------------------------------------------------------------------------------------
Total Net Assets $ 81,432 $ 30,721
- -------------------------------------------------------------------------------------------
Net Assets - Investor Shares $ 70,034 $ 27,924
Shares Outstanding, $0.001 Par Value
(unlimited shares authorized) 3,092 1,807
- -------------------------------------------------------------------------------------------
Net Asset Value Per Share $ 22.65 $ 15.46
- -------------------------------------------------------------------------------------------
Net Assets - Class I Shares $ 5,825 $ 1,303
Shares Outstanding, $0.001 Par Value
(unlimited shares authorized) 257 84
- -------------------------------------------------------------------------------------------
Net Asset Value Per Share $ 22.64 $ 15.45
- -------------------------------------------------------------------------------------------
Net Assets - Class C Shares $ 1,827 $ 12
Shares Outstanding, $0.001 Par Value
(unlimited shares authorized) 82 1
- -------------------------------------------------------------------------------------------
Net Asset Value and Redemption Price Per Share(3) $ 22.35 $ 15.55
- -------------------------------------------------------------------------------------------
Maximum Offering Price(4) $ 22.57 $ 15.71
- -------------------------------------------------------------------------------------------
Net Assets - Class A Shares $ 3,746 $ 1,482
Shares Outstanding, $0.001 Par Value
(unlimited shares authorized) 165 96
- -------------------------------------------------------------------------------------------
Net Asset Value and Redemption Price Per Share(3) $ 22.69 $ 15.47
- -------------------------------------------------------------------------------------------
Maximum Offering Price(5) $ 24.08 $ 16.41
- -------------------------------------------------------------------------------------------
* See Note 3 in Notes to Financial Statements.
(1) Vontobel US Value Fund prior to reorganization (Note 1).
(2) Vontobel International Equity Fund prior to reorganization (Note 1).
(3) Redemption price per share may be reduced by any applicable contingent
deferred sales charge.
(4) Maximum offering price is computed at 100/99 of net asset value.
(5) Maximum offering price is computed at 100/94.25 of net asset value.
See Notes to Financial Statements.
10 Janus Adviser February 29, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
For the two month fiscal period ended February 29, 2004 and US Value International
for the fiscal year ended December 31, 2003 Fund(1) Equity Fund(2)
(all numbers in thousands) 2004 2003 2004 2003(3)
- ---------------------------------------------------------------------------------------------------------------------------------
Investment Income:
Interest $ 35 $ 15 $ 2 $ 3
Dividends 71 964 78 848
Foreign tax withheld -- -- (8) (73)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 106 979 72 778
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses:
Advisory fees 123 776 49 261
Transfer agent expenses 6 127 1 57
Registration fees 3 179 2 158
Postage and mailing expenses 1 1 -- 1
Custodian fees 2 37 8 78
Printing expenses 8 85 15 25
Legal fees 7 20 8 24
Audit fees 9 36 9 45
Trustees fees and expenses 57 119 23 53
Administrative services fees - Investor Shares 11 120 4 41
Administrative services fees - Class I Shares 2 15 1 3
Administrative services fees - Class C Shares N/A 1 N/A --
Administrative services fees - Class A Shares N/A 6 N/A 2
Distribution fees - Investor Shares 27 35 11 13
Distribution fees - Class I Shares 2 3 1 1
Distribution fees - Class C Shares 3 9 -- --
Distribution fees - Class A Shares 2 2 1 1
Other expenses 4 123 2 84
- ---------------------------------------------------------------------------------------------------------------------------------
Total Expenses 267 1,694 135 847
- ---------------------------------------------------------------------------------------------------------------------------------
Less: Excess Expense Reimbursement (105) -- (68) (88)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Expenses after Expense Reimbursement 162 1,694 67 759
- ---------------------------------------------------------------------------------------------------------------------------------
Net Investment Income/(Loss) (56) (715) 5 19
- ---------------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain/(Loss) on Investments:
Net realized gain/(loss) from securities transactions 2,551 8,813 470 2,096
Net realized gain/(loss) from foreign currency transactions -- -- (252) (444)
Change in net unrealized appreciation or depreciation of
investments and foreign currency transactions 498 5,996 1,005 5,279
- ---------------------------------------------------------------------------------------------------------------------------------
Increase from payment by affiliate (Note 2) -- -- -- 26
- ---------------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain/(Loss) on Investments
and foreign currency translations 3,049 14,809 1,223 6,957
- ---------------------------------------------------------------------------------------------------------------------------------
Net Increase/(Decrease) in Net Assets
Resulting from Operations $ 2,993 $ 14,094 $ 1,228 $ 6,976
- ---------------------------------------------------------------------------------------------------------------------------------
(1) Vontobel US Value Fund prior to reorganization (Note 1).
(2) Vontobel International Equity Fund prior to reorganization (Note 1).
(3) Commencement of operations of Class C Shares was October 13, 2003.
See Notes to Financial Statements.
Janus Adviser February 29, 2004 11
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the two month fiscal period ended February 29, 2004 US Value International
and for the fiscal year or period ended December 31 Fund(1) Equity Fund(2)
(all numbers in thousands) 2004 2003 2002(3)(4) 2004 2003(3)(5) 2002(3)
- ------------------------------------------------------------------------------------------------------------------------------------
Operations:
Net investment income/(loss) $ (56) $ (715) $ (557) $ 5 $ 19 $ 64
Net realized gain/(loss) from
investment transactions 2,551 8,813 5,389 218 1,652 (1,032)
Change in unrealized net appreciation/
(depreciation) of investments and foreign
currency translations 498 5,996 (8,113) 1,005 5,279 (2,106)
Increase from payment by affiliate (Note 2) -- -- -- -- 26 --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase/(Decrease) in Net Assets
Resulting from Operations 2,993 14,094 (3,281) 1,228 6,976 (3,074)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and Distributions to Shareholders:
Net investment income*
Investor Shares -- -- N/A -- (128) N/A
Class I Shares -- -- N/A -- (9) N/A
Class C Shares -- -- -- -- -- --
Class A Shares -- -- -- -- (7) --
Net realized gain from investment transactions*
Investor Shares -- (3,790) N/A -- (704) N/A
Class I Shares -- (386) N/A -- (41) N/A
Class C Shares -- (75) (14) -- -- --
Class A Shares -- (190) (4,966) -- (42) --
Return of Capital*
Investor Shares -- -- N/A -- (91) N/A
Class I Shares -- -- N/A -- (6) N/A
Class C Shares -- -- -- -- -- --
Class A Shares -- -- -- -- (6) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Decrease from Dividends and Distributions -- (4,441) (4,980) -- (1,034) --
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Shares sold
Investor Shares 9,707 5,379 N/A 2,590 2,591 N/A
Capital Transferred N/A 53,231 N/A N/A 20,887 N/A
Class I Shares 44 94 N/A 1 37 N/A
Capital Transferred N/A 5,687 N/A N/A 1,435 N/A
Class C Shares 419 843 352 -- 10 --
Class A Shares 113 15,803 89,364 27 13,148 11,344
Redemption fees
Investor Shares N/A N/A N/A 3 1 N/A
Class I Shares N/A N/A N/A -- -- N/A
Reinvested dividends and distributions
Investor Shares -- 1,774 N/A -- 694 N/A
Class I Shares -- 153 N/A -- 24 N/A
Class C Shares -- 36 14 -- -- --
Class A Shares -- 73 4,700 -- 36 --
Shares repurchased
Investor Shares (4,195) (10,554) N/A (1,285) (3,755) N/A
Class I Shares (455) (1,208) N/A (164) (415) N/A
Class C Shares -- (18) -- -- -- --
Class A Shares (265) (61,614) (59,669) (78) (18,940) (23,600)
Capital Transferred N/A (58,918) N/A N/A (22,322) N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase/(Decrease) from
Capital Share Transactions 5,368 (49,239) 34,761 1,094 (6,569) (12,256)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase/(Decrease) in Net Assets 8,361 (39,586) 26,500 2,322 (627) (15,330)
Net Assets:
Beginning of period 73,071 112,657 86,157 28,399 29,026 44,356
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $ 81,432 $ 73,071 $ 112,657 $ 30,721 $ 28,399 $ 29,026
- ------------------------------------------------------------------------------------------------------------------------------------
Purchases and Sales of Investment Securities:
(excluding short-term securities)
Purchases of securities $ 5,084 $ 15,744 $ 96,456 $ 3,149 $ 16,510 $ 34,874
Proceeds from sales of securities 9,625 85,029 66,158 1,899 25,474 47,884
Purchases of long-term U.S. Government
obligations -- -- -- -- -- --
Proceeds from sales of long-term U.S.
Government obligations -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Undistributed net investment income/(loss)* -- -- -- $ (67) $ (7) --
- ------------------------------------------------------------------------------------------------------------------------------------
* See Note 3 in Notes to Financial Statements.
(1) Vontobel US Value Fund prior to reorganization (Note 1).
(2) Vontobel International Equity Fund prior to reorganization (Note 1).
(3) Certain prior year amounts have been reclassified to conform to current
year presentation.
(4) Commencement of operations of Class C Shares was October 9, 2002.
(5) Commencement of operations of Class C Shares was October 13, 2003.
See Notes to Financial Statements.
12 Janus Adviser February 29, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS - INVESTOR SHARES
For a share outstanding during the Vontobel
two month fiscal period ended US Value Fund(1) US Value Fund - A Shares(1)
February 29, 2004 and during the
fiscal year ended December 31 2004 2003 2002 2001 2000 1999
- --------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 21.78 $ 18.64 $ 19.86 $ 19.29 $ 14.27 $ 16.73
- --------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) --(2) --(2) (.09) (.12) .02 .07
Net realized/unrealized gain/(loss) on
investments and foreign currencies .87 4.46 (.33) .71 5.00 (2.42)
- --------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .87 4.46 (.42) .59 5.02 (2.35)
- --------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income)* -- -- -- (.02) -- (.11)
Distributions (from net realized gains)* -- (1.32) (.80) -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total Distributions -- (1.32) (.80) (.02) -- (.11)
- --------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 22.65 $ 21.78 $ 18.64 $ 19.86 $ 19.29 $ 14.27
- --------------------------------------------------------------------------------------------------------------------------------
Total Return** 3.99% 24.32% (2.20)% 3.06% 35.18% (14.07)%
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $ 70,034 $ 61,970 $112,302 $ 86,157 $137,238 $ 71,480
Average Net Assets for the Period (in thousands) $ 66,560 $ 67,077 N/A N/A N/A N/A
Ratio of Gross Expenses to Average Net Assets*** 1.25%(3) 2.14%(3) 1.74%(4) 1.75%(5) 1.75% 1.87%(6)
Ratio of Net Expenses to Average Net Assets*** 1.25%(3) 2.14%(3) 1.72% 1.75%(5) 1.75% 1.87%
Ratio of Net Investment Income/(Loss)
to Average Net Assets*** (0.42)% (0.90)% (0.63)% (0.43)% 0.23% 0.40%
Portfolio Turnover Rate*** 55% 21% 76% 66% 104% 67%
For a share outstanding during the International Vontobel
two month fiscal period ended Equity Fund(7) International Equity Fund - A Shares(7)
February 29, 2004 and during the
fiscal year ended December 31 2004 2003 2002 2001 2000 1999
- --------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 14.83 $ 11.86 $ 12.88 $ 18.86 $ 28.01 $ 20.18
- --------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) (.03) .12 .03 (.10) (.03) .06
Net gain/(loss) on securities
(both realized and unrealized) .66 3.38 (1.05) (5.41) (5.30) 9.07
- --------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .63 3.50 (1.02) (5.51) (5.33) 9.13
- --------------------------------------------------------------------------------------------------------------------------------
Less Distributions and Other:
Dividends (from net investment income)* -- (.07) -- (.12) (.08) (.05)
Distributions (from capital gains)* -- (.43) -- (.35) (3.74) (1.25)
Tax return of capital* -- (.05) N/A N/A N/A N/A
Redemption fees --(8) --(8) N/A N/A N/A N/A
Payment by affiliate -- .02 -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total Distributions and Other -- (.53) -- (.47) (3.82) (1.30)
- --------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 15.46 $ 14.83 $ 11.86 $ 12.88 $ 18.86 $ 28.01
- --------------------------------------------------------------------------------------------------------------------------------
Total Return** 4.25% 29.99% (7.92)% (29.22)% (18.70)% 46.52%
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $ 27,924 $ 25,506 $ 29,026 $ 44,356 $133,233 $192,537
Average Net Assets for the Period (in thousands) $ 27,413 $ 23,269 N/A N/A N/A N/A
Ratio of Gross Expenses to Average Net Assets*** 1.35%(3) 2.91%(3) 2.44% 1.89%(5) 1.39% 1.28%
Ratio of Net Expenses to Average Net Assets*** 1.35%(3) 2.91%(3) 2.44% 1.88%(5) 1.38% 1.27%
Ratio of Net Investment Income/(Loss)
to Average Net Assets*** 0.09% 0.07% 0.18% (0.38)% (0.15)% 0.03%
Portfolio Turnover Rate*** 41% 65% 98% 92% 69% 38%
* See Note 3 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) Vontobel US Value Fund prior to reorganization (Note 1).
(2) Net investment income/(loss) aggregated less than $.01 on a per share basis
for the fiscal year or period ended.
(3) See Notes 4 and 5 in Notes to Financial Statements.
(4) Expense ratio has been increased to include additional custodian fees which
were offset by custodian fee credits.
(5) Expense ratio has increased by .29% for Vontobel US Value Fund and .13% for
Vontobel International Equity Fund as a result of a change in accounting
principle related to the recording of redemption fees. Prior year numbers
have not been restated to reflect this change.
(6) The ratio was 2.76% in 1999 before waiver of management fees.
(7) Vontobel International Equity Fund prior to reorganization (Note 1).
(8) Redemption fees aggregated less than $.01 on a per share basis for the
fiscal year or period ended.
See Notes to Financial Statements.
Janus Adviser February 29, 2004 13
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS - CLASS I SHARES
For a share outstanding during the Vontobel
two month fiscal period ended US Value Fund(1) US Value Fund - A Shares(1)
February 29, 2004 and during the
fiscal year ended December 31 2004 2003 2002 2001 2000 1999
- --------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 21.78 $ 18.64 $ 19.86 $ 19.29 $ 14.27 $ 16.73
- --------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) (.01) (.02) (.09) (.12) .02 .07
Net realized/unrealized gain/(loss) on
investments and foreign currencies .87 4.48 (.33) .71 5.00 (2.42)
- --------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .86 4.46 (.42) .59 5.02 (2.35)
- --------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income)* -- -- -- (.02) -- (.11)
Distributions (from net realized gains)* -- (1.32) (.80) -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total Distributions -- (1.32) (.80) (.02) -- (.11)
- --------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 22.64 $ 21.78 $ 18.64 $ 19.86 $ 19.29 $ 14.27
- --------------------------------------------------------------------------------------------------------------------------------
Total Return** 3.95% 24.32% (2.20)% 3.06% 35.18% (14.07)%
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $ 5,825 $ 6,005 $112,302 $ 86,157 $137,238 $ 71,480
Average Net Assets for the Period (in thousands) $ 5,915 $ 7,057 N/A N/A N/A N/A
Ratio of Gross Expenses to Average Net Assets*** 1.40%(2) 2.16%(2) 1.74%(3) 1.75%(4) 1.75% 1.87%(5)
Ratio of Net Expenses to Average Net Assets*** 1.40%(2) 2.16%(2) 1.72% 1.75%(4) 1.75% 1.87%
Ratio of Net Investment Income/(Loss)
to Average Net Assets*** (0.58)% (0.92)% (0.63)% (0.43)% 0.23% 0.40%
Portfolio Turnover Rate*** 55% 21% 76% 66% 104% 67%
For a share outstanding during the International Vontobel
two month fiscal period ended Equity Fund(6) International Equity Fund - A Shares(6)
February 29, 2004 and during the
fiscal year ended December 31 2004 2003 2002 2001 2000 1999
- --------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 14.82 $ 11.86 $ 12.88 $ 18.86 $ 28.01 $ 20.18
- --------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) (.03) .10 .03 (.10) (.03) .06
Net gain/(loss) on securities
(both realized and unrealized) .66 3.39 (1.05) (5.41) (5.30) 9.07
- --------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .63 3.49 (1.02) (5.51) (5.33) 9.13
- --------------------------------------------------------------------------------------------------------------------------------
Less Distributions and Other:
Dividends (from net investment income)* -- (.06) -- (.12) (.08) (.05)
Distributions (from capital gains)* -- (.43) -- (.35) (3.74) (1.25)
Tax return of capital* -- (.06) N/A N/A N/A N/A
Redemption fees -(7) -- N/A N/A N/A N/A
Payment by affiliate -- .02 -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total Distributions and Other -- (.53) -- (.47) (3.82) (1.30)
- --------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 15.45 $ 14.82 $ 11.86 $ 12.88 $ 18.86 $ 28.01
- --------------------------------------------------------------------------------------------------------------------------------
Total Return** 4.25% 29.90% (7.92)% (29.22)% (18.70)% 46.52%
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $ 1,303 $ 1,409 $ 29,026 $ 44,356 $133,233 $192,537
Average Net Assets for the Period (in thousands) $ 1,333 $ 1,547 N/A N/A N/A N/A
Ratio of Gross Expenses to Average Net Assets*** 1.50%(2) 2.87%(2) 2.44% 1.89%(4) 1.39% 1.28%
Ratio of Net Expenses to Average Net Assets*** 1.50%(2) 2.87%(2) 2.44% 1.88%(4) 1.38% 1.27%
Ratio of Net Investment Income/(Loss)
to Average Net Assets*** 0.17% 0.11% 0.18% (0.38)% (0.15)% 0.03%
Portfolio Turnover Rate*** 41% 65% 98% 92% 69% 38%
* See Note 3 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) Vontobel US Value Fund prior to reorganization (Note 1).
(2) See Notes 4 and 5 in Notes to Financial Statements.
(3) Expense ratio has been increased to include additional custodian fees which
were offset by custodian fee credits.
(4) Expense ratio has increased by .29% for Vontobel US Value Fund and .13% for
Vontobel International Equity Fund as a result of a change in accounting
principle related to the recording of redemption fees. Prior year numbers
have not been restated to reflect this change.
(5) The ratio was 2.76% in 1999 before waiver of management fees.
(6) Vontobel International Equity Fund prior to reorganization (Note 1).
(7) Redemption fees aggregated less than $.01 on a per share basis for the
fiscal period ended February 29, 2004.
See Notes to Financial Statements.
14 Janus Adviser February 29, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS - CLASS C SHARES
For a share outstanding during the Vontobel
two month fiscal period ended US Value Fund(1) US Value Fund(1)
February 29, 2004 and during the
fiscal year or period ended December 31 2004 2003 2002(2)
- --------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 21.52 $ 18.60 $ 17.49
- --------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) --(3) (.07) (.06)
Net realized/unrealized gain/(loss)
on investments and foreign currencies .83 4.31 1.97
- --------------------------------------------------------------------------------------
Total from Investment Operations .83 4.24 1.91
- --------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income)* -- -- --
Distributions (from net realized gains)* -- (1.32) (.80)
- --------------------------------------------------------------------------------------
Total Distributions -- (1.32) (.80)
- --------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 22.35 $ 21.52 $ 18.60
- --------------------------------------------------------------------------------------
Total Return** 3.86% 23.18% 10.82%
- --------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $ 1,827 $ 1,344 $ 355
Average Net Assets for the Period (in thousands) $ 1,677 $ 948 N/A
Ratio of Gross Expenses to Average Net Assets*** 1.90%(4) 3.16%(4) 2.74%
Ratio of Net Expenses to Average Net Assets*** 1.90%(4) 3.16%(4) 2.72%
Ratio of Net Investment Income/(Loss)
to Average Net Assets*** (1.05)% (1.81)% (1.63)%
Portfolio Turnover Rate*** 55% 21% 76%
For a share outstanding during the
two month fiscal period ended International Equity Fund(5)
February 29, 2004 and during the
fiscal year or period ended December 31 2004 2003(6)
- --------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 14.95 $ 13.91
- --------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) (.06) .11
Net gain/(loss) on securities
(both realized and unrealized) .66 1.34
- --------------------------------------------------------------------------------
Total from Investment Operations .60 1.45
- --------------------------------------------------------------------------------
Less Distributions and Other:
Dividends (from net investment income)* -- --
Distributions (from capital gains)* -- (.43)
Payment by affiliate -- .02
- --------------------------------------------------------------------------------
Total Distributions and Other -- (.41)
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $ 15.55 $ 14.95
- --------------------------------------------------------------------------------
Total Return** 4.01% 10.71%
- --------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $ 12 $ 11
Average Net Assets for the Period (in thousands) $ 11 $ 10
Ratio of Gross Expenses to Average Net Assets*** 2.00%(4) 1.92%(4)
Ratio of Net Expenses to Average Net Assets*** 2.00%(4) 1.92%(4)
Ratio of Net Investment Income/(Loss)
to Average Net Assets*** (1.05)% (0.14)%
Portfolio Turnover Rate*** 41% 65%
* See Note 3 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) Vontobel US Value Fund prior to reorganization (Note 1).
(2) Period October 9, 2002 (inception date) to December 31, 2002.
(3) Net investment income/(loss) aggregated less than $.01 on a per share basis
for the fiscal period ended February 29, 2004.
(4) See Notes 4 and 5 in Notes to Financial Statements.
(5) Vontobel International Equity Fund prior to reorganization (Note 1).
(6) Period from October 13, 2003 (inception date) to December 31, 2003.
See Notes to Financial Statements.
Janus Adviser February 29, 2004 15
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FINANCIAL HIGHLIGHTS - CLASS A SHARES
For a share outstanding during the Vontobel
two month fiscal period ended US Value Fund(1) US Value Fund - A Shares(1)
February 29, 2004 and during the
fiscal year ended December 31 2004 2003 2002 2001 2000 1999
- --------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 21.82 $ 18.64 $ 19.86 $ 19.29 $ 14.27 $ 16.73
- --------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) --(2) .03 (.09) (.12) .02 .07
Net realized/unrealized gain/(loss)
on investments and foreign currencies .87 4.47 (.33) .71 5.00 (2.42)
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Total from Investment Operations .87 4.50 (.42) .59 5.02 (2.35)
- --------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income)* -- -- -- (.02) -- (.11)
Distributions (from net realized gains)* -- (1.32) (.80) -- -- --
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Total Distributions -- (1.32) (.80) (.02) -- (.11)
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Net Asset Value, End of Period $ 22.69 $ 21.82 $ 18.64 $ 19.86 $ 19.29 $ 14.27
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Total Return** 3.99% 24.54% (2.20)% 3.06% 35.18% (14.07)%
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Net Assets, End of Period (in thousands) $ 3,746 $ 3,752 $112,302 $ 86,157 $137,238 $ 71,480
Average Net Assets for the Period (in thousands) $ 3,720 $ 3,649 N/A N/A N/A N/A
Ratio of Gross Expenses to Average Net Assets*** 1.15%(3) 2.11%(3) 1.74%(4) 1.75%(5) 1.75% 1.87%(6)
Ratio of Net Expenses to Average Net Assets*** 1.15%(3) 2.11%(3) 1.72% 1.75%(5) 1.75% 1.87%
Ratio of Net Investment Income/(Loss)
to Average Net Assets*** (0.33)% (0.88)% (0.63)% (0.43)% 0.23% 0.40%
Portfolio Turnover Rate*** 55% 21% 76% 66% 104% 67%
For a share outstanding during International Vontobel
the two month fiscal period ended Equity Fund(7) International Equity Fund - A Shares(7)
February 29, 2004 and during the
fiscal year ended December 31 2004 2003 2002 2001 2000 1999
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Net Asset Value, Beginning of Period $ 14.84 $ 11.86 $ 12.88 $ 18.86 $ 28.01 $ 20.18
- --------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) (.03) .12 .03 (.10) (.03) .06
Net gain/(loss) on securities
(both realized and unrealized) .66 3.39 (1.05) (5.41) (5.30) 9.07
- --------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .63 3.51 (1.02) (5.51) (5.33) 9.13
- --------------------------------------------------------------------------------------------------------------------------------
Less Distributions and Other:
Dividends (from net investment income)* -- (.06) -- (.12) (.08) (.05)
Distributions (from capital gains)* -- (.43) -- (.35) (3.74) (1.25)
Tax return of capital* -- (.06) N/A N/A N/A N/A
Payment by affiliate -- .02 -- -- -- --
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Total Distributions and Other -- (.53) -- (.47) (3.82) (1.30)
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Net Asset Value, End of Period $ 15.47 $ 14.84 $ 11.86 $ 12.88 $ 18.86 $ 28.01
- --------------------------------------------------------------------------------------------------------------------------------
Total Return** 4.25% 30.07% (7.92)% (29.22)% (18.70)% 46.52%
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Net Assets, End of Period (in thousands) $ 1,482 $ 1,473 $ 29,026 $ 44,356 $133,233 $192,537
Average Net Assets for the Period (in thousands) $ 1,470 $ 1,395 N/A N/A N/A N/A
Ratio of Gross Expenses to Average Net Assets*** 1.25%(3) 2.87%(3) 2.44% 1.89%(5) 1.39% 1.28%
Ratio of Net Expenses to Average Net Assets*** 1.25%(3) 2.87%(3) 2.44% 1.88%(5) 1.38% 1.27%
Ratio of Net Investment Income/(Loss)
to Average Net Assets*** 0.18% 0.11% 0.18% (0.38)% (0.15)% 0.03%
Portfolio Turnover Rate*** 41% 65% 98% 92% 69% 38%
* See Note 3 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) Vontobel US Value Fund prior to reorganization (Note 1).
(2) Net investment income/(loss) aggregated less than $.01 on a per share basis
for the fiscal period ended.
(3) See Notes 4 and 5 in Notes to Financial Statements.
(4) Expense ratio has been increased to include additional custodian fees which
were offset by custodian fee credits.
(5) Expense ratio has increased by .29% for Vontobel US Value Fund and .13% for
Vontobel International Equity Fund as a result of a change in accounting
principle related to the recording of redemption fees. Prior year numbers
have not been restated to reflect this change.
(6) The ratio was 2.76% in 1999 before waiver of management fees.
(7) Vontobel International Equity Fund prior to reorganization (Note 1).
See Notes to Financial Statements.
16 Janus Adviser February 29, 2004
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NOTES TO SCHEDULES OF INVESTMENTS
S&P 500(R)Index The Standard & Poor's Composite Index of 500
stocks, a widely recognized, unmanaged index of
common stock prices.
Morgan Stanley Capital Is a market capitalization weighted index composed
International EAFE(R) Index of companies representative of the market
structure of 20 Developed Market countries in
Europe, Australasia and the Far East.
ADR American Depository Receipt
GDR Global Depository Receipt
PLC Public Limited Company
* Non-income-producing security.
** A portion of this security has been segregated by the custodian to cover
margin or segregation requirements on open futures contracts and/or forward
currency contracts.
Repurchase Agreements held by a fund are fully collateralized, and such
collateral is in the possession of the Fund's custodian or subcustodian. The
collateral is evaluated daily to ensure its market value equals or exceeds the
current market value of the repurchase agreements including accrued interest. In
the event of default on the obligation to repurchase, the Fund has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. In the event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral or proceeds may be
subject to legal proceedings.
Janus Adviser February 29, 2004 17
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NOTES TO FINANCIAL STATEMENTS
The following section describes organization and significant accounting policies
and provides more detailed information about the schedules and tables that
appear throughout this report. In addition, the Notes explain the methods used
in preparing and presenting this report.
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Effective October 13, 2003 ("Reorganization Date"), Vontobel US Value Fund and
Vontobel International Equity Fund (collectively the "Reorganizing Funds")
participated in a tax-free reorganization with US Value Fund and International
Equity Fund, respectively (collectively the "Funds" and individually the
"Fund"). As a result of the reorganization, existing Reorganizing Funds Class A
shareholders who purchased shares directly received the Funds' Investor Class
shares, existing Reorganizing Funds Class A Shareholders who purchased shares
through a financial intermediary without sales charge received the Funds' Class
I Shares, existing Reorganizing Funds Class A Shareholders who purchased shares
with a sales charge received the Funds' Class A Shares, and existing
Reorganizing Funds Class C shareholders received Class C Shares of the
corresponding Fund. The plan of reorganization provided for, among other items
listed in the Shareholder Meeting section of this report, the transfer of assets
and liabilities of the Reorganizing Funds to the Funds. The Funds were created
to serve as "shells" for the transfer of net assets of the Reorganizing Funds.
For accounting purposes, each of the Reorganizing Funds is considered the
surviving entity, and the statement of changes and financial highlights shown
for the fiscal periods prior to December 31, 2003 are of the Reorganizing Funds.
After the reorganization, the Funds changed the fiscal year end from December 31
to the last day of February.
Janus Capital Management LLC ("Janus Capital") invested initial seed capital in
the amount of $10,000 for International Equity Fund - Class C Shares. This class
was effective on October 13, 2003.
US Value Fund and International Equity Fund are series funds. The Funds are part
of Janus Adviser (the "Trust"), which was organized as a Delaware statutory
Trust on May 2, 2003, and is registered under the Investment Company Act of 1940
(the "1940 Act") as an open-end management investment company. The Trust offers
two Funds, which invest primarily in equity securities. International Equity
Fund is classified as diversified, as defined in the 1940 Act. US Value Fund is
classified as nondiversified.
Prior to October 13, 2003, the Reorganizing Funds were series established under
Vontobel Funds, Inc. ("VFI").
The following accounting policies have been consistently followed by the Trust
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 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 making a market for such securities
or by a pricing service approved by the Funds' Trustees. Short-term investments
maturing within 60 days are valued at amortized cost, which approximates market
value. Foreign securities are converted to U.S. dollars using exchange rates at
the close of the New York Stock Exchange ("NYSE"). When market quotations are
not readily available or are deemed not to be reliable because events or
circumstances that may affect the value of portfolio securities are indentified
between the closing of their principle markets and the closing of the NYSE, then
their fair value is 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 the foreign exchanges and the New York Stock
Exchange.
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. 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.
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
sales 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 of
such contract is
18 Janus Adviser February 29, 2004
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- --------------------------------------------------------------------------------
included in net realized gain or loss from foreign currency transactions on the
Statement of Operations.
Forward currency contracts held by the Funds are fully collateralized by other
securities, which are denoted in the accompanying Schedule of Investments (if
applicable). Such collateral is in the possession of the Fund's custodian. The
collateral is evaluated daily to ensure its market value equals or exceeds the
current market value of the corresponding forward currency contracts.
WHEN-ISSUED SECURITIES
The Funds may purchase or sell securities on a when-issued or forward commitment
basis. The price of the underlying securities and date when the securities will
be delivered and paid for are fixed at the time the transaction is negotiated.
Losses may arise due to changes in the market value of the securities or from
the inability of counterparties to meet the terms of the contract. In connection
with such purchases, the Funds are required to hold liquid assets as collateral
with the Fund's custodian sufficient to cover the purchase price.
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 at the date of the financial
statements, resulting from changes in the exchange rates and changes in market
prices of securities held.
Currency gain and loss are also calculated on payables and receivables that are
denominated in foreign currencies. The payables and receivables are generally
related to security transactions and income.
Foreign-denominated assets and forward currency contracts may involve more risks
than domestic transactions, including currency risk, political and economic
risk, regulatory risk and market risk. Risks may arise from the potential
inability of a counterparty to meet the terms of a contract and from
unanticipated movements in the value of foreign currencies relative to the U.S.
dollar.
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 which each Fund seeks to sell. In addition, these
securities may exhibit greater price volatility than securities for which
secondary markets exist.
DIVIDEND DISTRIBUTIONS
Each Fund generally makes semiannual distributions of substantially all of its
investment income and net realized capital gains, if any. The majority of the
dividends and capital gain distributions from a Fund will be automatically
reinvested into additional shares of the Fund.
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 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.
PROXY VOTING
A description of the policies and procedures that the Funds use to determine how
to vote proxies relating to their portfolio securities is available (i) without
charge, upon request, by calling 1-800-525-3713 (toll free); (ii) on the Fund's
website at www.janus.com; and (iii) on the SEC's website at http://www.sec.gov.
2. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES
Janus Capital is the investment adviser to the Funds. US Value Fund is subject
to advisory fees payable to Janus Capital based upon annual rates of .96% of the
first $100 million of average daily net assets, .85% of average daily net assets
over $100 million to $300 million and .75% of average daily net assets in excess
of $300 million. International Equity Fund is subject to advisory fees payable
to Janus Capital based upon annual rates of .99% of the first $100 million of
average daily net assets, .85% of average daily net assets over $100 million to
$300 million and .75% of average daily net assets over $300 million.
Prior to October 13, 2003, Vontobel Asset Management, Inc., formerly named
Vontobel USA Inc., ("Vontobel") served as investment adviser to Vontobel US
Value Fund and Vontobel International Equity Fund, the Funds' predecessors.
Pursuant to Investment Advisory Agreements with each of the Reorganizing Funds,
Vontobel received an annual fee of
Janus Adviser February 29, 2004 19
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NOTES TO FINANCIAL STATEMENTS (continued)
1.00% on the first $100 million of average daily net assets and .75% on average
daily net assets over $100 million.
Vontobel serves as subadviser to the Funds. Janus Capital pays Vontobel a
subadvisory fee from its management fee at the annual rate of between .74% and
..215% for US Value Fund and .408% and .215% for International Equity Fund based
on the value of each Fund's respective average daily net assets.
The Trust currently offers four classes of shares: Investor Shares, Class I
Shares, Class C Shares and Class A Shares. Each class represents an interest in
the same portfolio of investments. Class I Shares have an aggregate account
balance requirement. Class A, C and Investor Shares have a minimum initial
investment requirement. Certain financial intermediaries may offer only one
class of shares. Class A and C Shares include a maximum 5.75% and 1.00% upfront
sales charge of the offering price, respectively. Class C Shares includes a
1.00% contingent deferred sales charge paid by the redeeming shareholder. This
sales charge applies to shares redeemed within 12 months. The redemption price
may differ from the net asset value per share. During the two month fiscal
period ended February 29, 2004, US Value Fund - Class C Shareholders and
International Equity Fund - Class C Shareholders did not pay contingent deferred
sales charges.
The Reorganizing Funds offered Class A Shares which included a maximum front-end
sales charge of 5.75% and a maximum contingent deferred sales charge of 2.00% on
the proceeds of Class A Shares redeemed within 360 days. Class A Shares may have
been purchased without a front-end sales charge through certain third-party fund
"supermarkets." Vontobel US Value Fund also offered Class C Shares which
included a maximum front-end sales charge of 1.00% and a maximum contingent
deferred sales charge of 1.00% on the proceeds of Class C Shares redeemed within
2 years of purchase.
Janus Services LLC ("Janus Services"), a wholly owned subsidiary of Janus
Capital, receives from the Funds a fee at an annual rate of up to .10% of the
average daily net assets of the Investor Shares of each of the Funds and at an
annual rate of up to .25% of the average daily net assets of Class I Shares of
each of the Funds, to compensate Janus Services for providing, or arranging for
the recordkeeping, sub-accounting, and administrative services.
Prior to October 13, 2003, Commonwealth Shareholder Services, Inc. ("CSS"), the
administrative agent for the Reorganizing Funds, provided shareholder,
recordkeeping, administrative and blue-sky filing services. The Reorganizing
Funds compensated CSS for blue-sky and certain shareholder servicing on an
hourly rate basis. For other administrative services, CSS received 0.15% of
average daily net assets from the Vontobel US Value Fund and 0.20% of average
daily net assets from the Vontobel International Equity Fund.
Prior to October 13, 2003, Fund Services, Inc. ("FSI") provided transfer and
dividend disbursing agent services to the Reorganizing Funds.
Prior to October 13, 2003, Dominion Capital Corp. ("FDCC") acted as the
Reorganizing Funds' principal underwriter in the continuous public offering of
the Reorganizing Funds' shares. In addition to underwriting fees and commissions
received relating to the distribution of the Reorganizing Funds' shares, FDCC
received a maximum contingent deferred sales charge ("CDSC") of 2.00% for
certain share redemptions occurring within 360 days of purchase of Class A
Shares and within 2 years of purchase of Class C Shares. Shares redeemed subject
to a CDSC will receive a lower redemption value per share.
For the period January 1, 2003 through October 13, 2003, affiliated parties of
the Reorganizing Funds received the following for administrative, underwriting
and transfer agent services rendered:
FDCC
(Commissions FDCC
Fund CSS and Fees) (CDSC) FSI
- --------------------------------------------------------------------------------
Vontobel US Value Fund $146,468 $ 10,116 $ 77,677 $ 82,009
Vontobel International Equity Fund 49,917 1,473 71,973 33,549
- --------------------------------------------------------------------------------
Prior to October 13, 2003, certain officers and/or directors of the Reorganizing
Funds were also officers and/or directors of Vontobel Asset Management, Inc.,
FDCC, CSS, and FSI.
Janus Capital has agreed to reimburse the Funds by the amount if any, that the
normal operating expenses in any fiscal year, including the investment advisory
fee but excluding the administrative services fee applicable to Investor Shares
and Class I Shares, and the distribution and shareholder servicing fee
applicable to Investor Shares, Class I Shares, Class A Shares and Class C
Shares, brokerage commissions, interest, taxes and extraordinary expenses,
exceed an annual rate of .90% for US Value Fund and 1.00% for International
Equity Fund of the average daily net assets of each of the Funds until at least
September 30, 2005. Janus Capital will be entitled to recoup such reimbursement
or fee reduction from the Funds for a three-year period commencing with the
operations of the Funds, provided that at no time during such period shall the
normal operating expenses allocated to any
20 Janus Adviser February 29, 2004
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class of the Funds, with the exceptions noted above, exceed the percentages
stated. For the two month fiscal period ended February 29, 2004, total fees and
expenses absorbed by Janus Capital were $104,703 and $68,424 for US Value Fund
and International Equity Fund, respectively. For the fiscal year ended December
31, 2003, total fees absorbed for International Equity Fund were $88. At
February 29, 2004, the reimbursement that may be potentially made to Janus
Capital by the US Value Fund, expiring during the year ended December 31, 2006,
was $104,703 and by the International Equity Fund, expiring during the year
ended December 31, 2006, was $68,512.
Prior to October 13, 2003, Vontobel had voluntarily agreed to waive its fees and
reimburse International Equity Fund for expenses in order to limit the operating
expenses to 1.89% of average net assets of the Fund. During 2003 Vontobel waived
$88,172 through the Reorganization Date.
Janus Services receives certain out-of-pocket expenses for transfer agent
services.
Certain officers and trustees of the Funds may also be officers and/or directors
of Janus Capital; however, such officers and trustees receive no compensation
from the Funds.
Janus Distributors LLC, a wholly owned subsidiary of Janus Capital, is a
distributor of the Funds. The Investor Shares, Class I Shares and Class A Shares
of each Fund have each adopted a Distribution and Shareholder Servicing Plan
(the "Plans") pursuant to Rule 12b-1 under the 1940 Act. The Plans authorize
payments by the Funds in connection with the distribution of the Investor, Class
I and Class A Shares at an annual rate, as determined from time to time by the
Board of Trustees, of up to .25% of the Investor, Class I and Class A Shares'
average daily net assets. The Class C Shares have adopted a Distribution and
Shareholder Servicing Plan (the "Class C Plan") pursuant to Rule 12b-1 under the
1940 Act. The Class C Plan authorizes payments by the Funds in connection with
the distribution of the Class C Shares at an annual rate of up to 1.00% average
daily net assets of Class C Shares. Up to .75% of this fee is for activities
which are primarily intended to result in sales of Class C Shares of each Fund.
In addition, the Class C Plan permits the payment of up to .25% of this fee for
shareholder servicing activities.
Vontobel US Value Fund had adopted a Distribution Plan (the "Plan") for Class C
Shares in accordance with Rule 12b-1 under the 1940 Act, providing for the
payment of distribution and service fees to the distributors of Vontobel US
Value Fund. The Plan provided that Vontobel US Value Fund pay a fee to the
Distributor at an annual rate of 1.00% of average daily net assets. Of this
amount, 0.75% represented distribution 12b-1 fees and 0.25% represented
shareholder servicing fees.
As of the date of this report, a 1.00% redemption fee may be imposed on Investor
and Class I Shares of the International Equity Fund held for three months or
less. Effective May 1, 2004, the redemption fee will increase to 2.00% on shares
purchased on or after that date. The redemption fee is designed to offset
transaction costs and other expenses associated with short-term redemptions.
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 level
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. Redemption
fees received by International Equity Fund, Investor and Class I Shares, during
the two month fiscal period ended February 29, 2004 were $2,910 and $3,
respectively. Redemption fees received by International Equity Fund, Investor
and Class I Shares during the fiscal year ended December 31, 2003 were $633 and
$0, respectively.
During the fiscal year ended December 31, 2003, Janus Capital reimbursed
International Equity Fund $26,260 as a result of the reorganization between
Vontobel International Equity Fund and International Equity Fund on October 13,
2003. Various foreign security shares held in the portfolio of Vontobel
International Equity Fund could not be converted to International Equity Fund's
portfolio due to foreign regulation constraints on the transfer of the shares
from one entity to another, i.e. Vontobel International Equity Fund to
International Equity Fund. International Equity Fund was required to sell the
foreign shares prior to the conversion and buy them back in the open market
following the conversion. This resulted in a realized loss to the Fund and was
subsequently reimbursed by Janus Capital on October 30, 2003.
DST Systems, Inc. ("DST"), an affiliate of Janus Capital Group Inc. ("JCGI"),
parent to the Funds' adviser, provides a shareholder accounting system to the
Funds for a fee. As of December 1, 2003, following a share exchange transaction
in which JCGI exchanged 32.3 million shares of its holdings of DST common stock
for all of the stock of a wholly-owned subsidiary of DST, JCGI owned
approximately 9% of the outstanding common shares of DST. DST Fees are included
in Transfer Agent Fees and Expenses in the Statement of Operations. US Value
Fund and International Equity Fund paid $1,337 and $851, respectively for DST
Systems Cost from October 13, 2003 through December 31, 2003 and $2,716 and
$2,351, respectively for the period January 1, 2004 through February 29, 2004.
Janus Adviser February 29, 2004 21
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NOTES TO FINANCIAL STATEMENTS (continued)
3. FEDERAL INCOME TAX
The tax components of capital shown in the table below represent: (1)
distribution requirements the Funds must satisfy under the income tax
regulations, (2) losses or deductions the Funds may be able to offset against
income and gains realized in future years, and (3) unrealized appreciation or
depreciation of investments for federal income tax purposes.
Accumulated capital losses noted below represent net capital loss carryovers, as
of February 29, 2004, that may be available to offset future realized capital
gains and thereby reduce future taxable gains distributions. These carryovers
expire between February 28, 2009, and February 28, 2010.
The International Equity Fund incurred "Post-October" losses during the period
from November 1, 2003 through February 29, 2004. These losses will be deferred
for tax purposes and recognized during the year ended February 28, 2005.
Other book-to-tax differences in the current year primarily consist of foreign
currency contract adjustments. Subsequent to the merger date, the Funds have
elected to treat gains and losses on forward foreign currency contracts as
capital gains and losses. Other foreign currency gains and losses on debt
instruments are treated as ordinary income for federal income tax purposes
pursuant to Section 988 of the Internal Revenue Code.
The capital loss carryforward in International Equity Fund includes $16,037,872
acquired in the reorganization of Vontobel International Equity Fund described
in Note 6. This capital loss carryover may be subject to annual limitations
under applicable tax laws and may expire unutilized. Due to these limitations,
$7,741,091 of the carryforward will not be available for use. As a result, this
amount has been reclassified to paid-in-capital. During the period ended
February 29, 2004, International Equity Fund utilized $501,865 of its capital
loss carryforward.
Net Tax AP/DP
Undistributed Undistributed on Foreign Net Tax
Ordinary Long-Term Accumulated Post-October Currency AP/DP on
Fund Income Gains Capital Losses Deferral and Futures Investments
- ------------------------------------------------------------------------------------------------------------------------
US Value Fund(1) $ 56,068 $ 6,578,132 -- -- -- $12,174,313
International Equity Fund(2) -- 470,066 $(7,794,916) $ (14,018) $ 15,393 6,881,305
- ------------------------------------------------------------------------------------------------------------------------
(1) Vontobel US Value Fund prior to reorganization (Note 1).
(2) Vontobel International Equity Fund prior to reorganization (Note 1).
The aggregate cost of investments and the composition of unrealized appreciation
and depreciation of investments for federal income tax purposes as of February
29, 2004 are noted below. Unrealized appreciation and unrealized depreciation in
the table below exclude appreciation/depreciation on foreign currency
translations. The primary difference between book and tax appreciation or
depreciation of investments is wash sale loss deferrals.
Federal Tax Unrealized Unrealized
Fund Cost Appreciation (Depreciation)
- --------------------------------------------------------------------------------
US Value Fund(1) $69,531,058 $12,233,087 $ (58,774)
International Equity Fund(2) 24,344,129 6,944,282 (62,977)
- --------------------------------------------------------------------------------
(1) Vontobel US Value Fund prior to reorganization (Note 1).
(2) Vontobel International Equity Fund prior to reorganization (Note 1).
22 Janus Adviser February 29, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Income and capital gains distributions are determined in accordance with income
tax regulations that may differ from accounting principles generally accepted in
the United States of America. These differences are due to differing treatments
for items such as net short-term gains, deferral of wash sale losses, foreign
currency transactions, net investment losses and capital loss carryovers.
Certain permanent differences such as tax returns of capital and net investment
losses noted below have been reclassified to paid-in capital.
For the two month fiscal Distributions
period February 29, 2004 ----------------------------------------------
From Ordinary From Long-Term Tax Return of Net Investment
Fund Income Capital Gains Capital Loss
- ----------------------------------------------------------------------------------------------------
US Value Fund(1) -- -- -- --
International Equity Fund(2) -- -- -- --
- ----------------------------------------------------------------------------------------------------
(1) Vontobel US Value Fund prior to reorganization (Note 1).
(2) Vontobel International Equity Fund prior to reorganization (Note 1).
For the fiscal period or Distributions
year ended December 31, 2003 ----------------------------------------------
From Ordinary From Long-Term Tax Return of Net Investment
Fund Income Capital Gains Capital Loss
- ----------------------------------------------------------------------------------------------------
US Value Fund(1) -- $4,441,095 -- --
International Equity Fund(2) $ 143,837 787,056 $ 102,709 $ (185,610)
- ----------------------------------------------------------------------------------------------------
(1) Vontobel US Value Fund prior to reorganization (Note 1).
(2) Vontobel International Equity Fund prior to reorganization (Note 1).
For the fiscal period or year Distributions
ended December 31, 2002 ------------------------------
From Ordinary From Long-Term Net Investment
Fund Income Capital Gains Loss
- ------------------------------------------------------------------------------------
Vontobel US Value Fund -- $4,979,832 $ (557,163)
Vontobel International Equity Fund -- -- --
- ------------------------------------------------------------------------------------
4. 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 as well as a
portion of general expenses, which are allocated pro rata to each of the Funds.
5. EXPENSE RATIOS
The expense ratios listed in the Financial Highlights reflect expenses prior to
any expense offset (gross expense ratio) and after expense offsets (net expense
ratio). Both expense ratios reflect expenses after waivers (reimbursement).
Listed below are the gross expense ratios for the various Funds that would be in
effect, absent the waiver of certain fees.
For the two month fiscal period
ended February 29, 2004 and
the fiscal period or year
ended December 31, 2003 Investor Shares Class I Shares Class C Shares Class A Shares
Fund 2004 2003 2004 2003 2004 2003 2004 2003
- ---------------------------------------------------------------------------------------------------------
US Value Fund*(1) 2.07% 2.14% 2.21% 2.16% 2.72% 3.16% 1.96% 2.11%
International Equity Fund*(2) 2.73% 3.24% 2.87% 3.21% 3.38% 5.85%(3) 2.63% 3.21%
- ---------------------------------------------------------------------------------------------------------
* Annualized for periods of less than one year.
(1) Vontobel US Value Fund prior to reorganization (Note 1).
(2) Vontobel International Equity Fund prior to reorganization (Note 1).
(3) Period from October 13, 2003 (inception date) to December 31, 2003.
Janus Adviser February 29, 2004 23
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
6. FUND REORGANIZATION
Effective October 13, 2003, Vontobel US Value Fund and Vontobel International
Equity Fund participated in a tax-free reorganization with US Value Fund and
International Equity Fund, respectively. The plan of the reorganization provided
for the transfer of assets and liabilities as follows: Existing Vontobel US
Value Fund Class A shareholders and Vontobel International Equity Fund Class A
shareholders who purchased shares directly received US Value Fund - Investor
Shares and International Equity Fund - Investor Shares, respectively. Existing
Vontobel US Value Fund Class A shareholders and Vontobel International Equity
Fund Class A shareholders who purchased shares through a financial intermediary
without sales charge received US Value Fund - Class I Shares and International
Equity Fund - Class I Shares, respectively. Existing Vontobel US Value Fund
Class A shareholders and Vontobel International Equity Fund Class A shareholders
who purchased shares with a sales charge received US Value Fund - Class A Shares
and International Equity Fund - Class A Shares, respectively. Existing Vontobel
US Value Fund Class C shareholders received US Value Fund - Class C Shares.
Vontobel US Value Fund - Class A Shares transferred net assets and shares
outstanding to US Value Fund - Investor Shares and Class I Shares as detailed
below.
Fund Net Assets Shares Transferred
- --------------------------------------------------------------------------------
US Value Fund - Investor Shares $ 63,503,746 3,003,063
US Value Fund - Class I Shares $ 6,776,017 320,433
- --------------------------------------------------------------------------------
$ 70,279,763 3,323,496
- --------------------------------------------------------------------------------
Vontobel US Value Fund - Class C transferred net assets of $1,163,895 and shares
outstanding of 55,606 to US Value Fund - Class C Shares. The remaining net
assets of $3,265,888 and shares outstanding of 154,441 of Vontobel US Value Fund
- - Class A were transferred directly into US Value - Class A Shares.
Vontobel International Equity Fund - Class A Shares transferred net assets and
shares outstanding to International Equity Fund - Investor Shares and Class I
Shares as detailed below.
Fund Net Assets Shares Transferred
- --------------------------------------------------------------------------------
International Equity Fund - Investor Shares $ 24,444,903 1,757,101
International Equity Fund - Class I Shares $ 1,674,733 120,345
- --------------------------------------------------------------------------------
$ 26,119,636 1,877,446
- --------------------------------------------------------------------------------
The remaining net assets of $1,288,651 and shares outstanding of 92,625 of
Vontobel International Equity Fund - Class A were transferred directly into
International Equity Fund - Class A Shares.
24 Janus Adviser February 29, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. CAPITAL SHARE TRANSACTIONS
For the two month fiscal period ended February 29, 2004 US Value International
and for the fiscal year ended December 31 Fund(1) Equity Fund(2)
(all numbers in thousands) 2004 2003 2002(3) 2004 2003(4) 2002
- --------------------------------------------------------------------------------------------------------------------------
Transactions in Fund Shares - Investor Shares:
Shares sold 435 249 N/A 170 182 N/A
Shares transferred N/A 3,003 N/A N/A 1,757 N/A
Reinvested dividends and distributions -- 83 N/A -- 48 N/A
- --------------------------------------------------------------------------------------------------------------------------
Total 435 3,335 N/A 170 1,987 N/A
- --------------------------------------------------------------------------------------------------------------------------
Shares repurchased (188) (490) N/A (83) (267) N/A
Net Increase/(Decrease) in Fund Shares 247 2,845 N/A 87 1,720 N/A
Shares Outstanding, Beginning of Period 2,845 -- N/A 1,720 -- N/A
- --------------------------------------------------------------------------------------------------------------------------
Shares Outstanding, End of Period 3,092 2,845 N/A 1,807 1,720 N/A
- --------------------------------------------------------------------------------------------------------------------------
Transactions in Fund Shares - Class I Shares:
Shares sold 2 5 N/A -- 3 N/A
Shares transferred N/A 320 N/A N/A 120 N/A
Reinvested dividends and distributions -- 7 N/A -- 2 N/A
- --------------------------------------------------------------------------------------------------------------------------
Total 2 332 N/A -- 125 N/A
- --------------------------------------------------------------------------------------------------------------------------
Shares repurchased (21) (56) N/A (11) (30) N/A
Net Increase/(Decrease) in Fund Shares (19) 276 N/A (11) 95 N/A
Shares Outstanding, Beginning of Period 276 -- N/A 95 -- N/A
- --------------------------------------------------------------------------------------------------------------------------
Shares Outstanding, End of Period 257 276 N/A 84 95 N/A
- --------------------------------------------------------------------------------------------------------------------------
Transactions in Fund Shares - Class C Shares:
Shares sold 20 42 18 -- 1 N/A
Reinvested dividends and distributions -- 2 1 -- -- N/A
- --------------------------------------------------------------------------------------------------------------------------
Total 20 44 19 -- 1 N/A
- --------------------------------------------------------------------------------------------------------------------------
Shares repurchased -- (1) -- -- -- N/A
Net Increase/(Decrease) in Fund Shares 20 44 19 -- 1 N/A
Shares Outstanding, Beginning of Period 62 19 -- 1 -- N/A
- --------------------------------------------------------------------------------------------------------------------------
Shares Outstanding, End of Period 82 62 19 1 1 N/A
- --------------------------------------------------------------------------------------------------------------------------
Transactions in Fund Shares - Class A Shares:
Shares sold 5 810 4,454 2 1,124 914
Reinvested dividends and distributions -- 4 248 -- 3 --
- --------------------------------------------------------------------------------------------------------------------------
Total 5 814 4,702 2 1,127 914
- --------------------------------------------------------------------------------------------------------------------------
Shares repurchased (12) (3,343) (3,016) (5) (1,599) (1,910)
Shares transferred N/A (3,323) N/A N/A (1,877) N/A
Net Increase/(Decrease) in Fund Shares (7) (5,852) 1,686 (3) (2,349) (996)
Shares Outstanding, Beginning of Period 172 6,024 4,338 99 2,448 3,444
- --------------------------------------------------------------------------------------------------------------------------
Shares Outstanding, End of Period 165 172 6,024 96 99 2,448
- --------------------------------------------------------------------------------------------------------------------------
(1) Vontobel US Value Fund prior to reorganization (Note 1).
(2) Vontobel International Equity Fund prior to reorganization (Note 1).
(3) Commencement of operations of Class C Shares was October 9, 2002.
(4) Commencement of operations of Class C Shares was October 13, 2003.
Janus Adviser February 29, 2004 25
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
8. PENDING LEGAL MATTERS In September 2003, the Securities and Exchange
Commission ("SEC") and the Office of the New York State Attorney General
("NYAG") publicly announced that they were investigating trading practices in
the mutual fund industry. The investigations were prompted by the NYAG's
settlement with a hedge fund, Canary Capital, which allegedly engaged in
irregular trading practices with certain mutual fund companies. While Janus
Capital was not named as a defendant in the NYAG complaint against the hedge
fund, Janus Capital was mentioned in the complaint as having allowed Canary
Capital to "market time" certain Janus funds. Market timing is an investment
technique involving frequent short-term trading of mutual fund shares that is
designed to exploit market movements or inefficiencies in the way mutual fund
companies price their shares. The NYAG complaint alleged that this practice is
in contradiction to policies stated in the prospectuses for certain Janus funds.
These allegations predate the start of operations for the Trust, and
accordingly, do not involve either of the Funds described in this report.
The investigations by the NYAG, the SEC, and certain other agencies, including
the Colorado Securities Commissioner and the Colorado Attorney General ("COAG"),
also sought to determine whether late trading occurred in mutual funds managed
by Janus Capital. The term "late trading" generally refers to the practice of
permitting or processing a fund purchase or redemption in a manner that
improperly allows the current day's fund share price to be used for an order
that was placed or improperly processed at a time following the deadline for
obtaining that day's share price (normally, 4:00 p.m. (eastern time)). Because
many mutual fund transactions are cleared and settled through financial
intermediaries, Janus Capital cannot exclude the possibility that one or more
intermediaries may have submitted improper or unauthorized late trade
transactions to Janus Capital in violation of Janus Capital's agreements with
those intermediaries.
Other documentation and information sought by various regulatory agencies,
including the National Association of Securities Dealers, the West Virginia
Attorney General, the Florida Department of Financial Services, the NYAG, the
SEC, the COAG, the Colorado Securities Commissioner and one or more U.S.
Attorney offices, relate to a variety of matters, including but not limited to:
improper disclosure of portfolio holdings, trading by executives in fund shares,
certain revenue sharing arrangements, information related to cash and non-cash
compensation paid to brokers, trading by Janus Capital investment personnel in
portfolio securities owned by certain Janus funds, information provided to the
Trustees of certain Janus funds in connection with the review and approval of
management contracts related to such Janus funds, information related to certain
types of distribution and sales arrangements with brokers and other distributors
of mutual fund products, and other topics related to the foregoing. The Janus
funds, Janus Capital Group Inc. and its subsidiaries have either complied with
or intend to comply with these subpoenas and other document and information
requests.
On April 27, 2004, Janus Capital announced agreements in principle with the
NYAG, the COAG and the Colorado Division of Securities setting forth financial
agreements and certain corporate governance and compliance initiatives that will
be required by such regulators. Janus Capital also announced an agreement in
principle with respect to monetary terms with the SEC, subject to the approval
of the SEC Commissioners. Pursuant to such agreements, Janus Capital will
establish a pool of $100 million that will be available to compensate investors
for the adverse effects of frequent trading and other mutual fund practices. Of
this amount, $50 million will be in the form of a civil money penalty. Janus
Capital also agreed to reduce its management fees in the amount of $25 million
per annum, in the aggregate, for at least a five year period. Janus also agreed
to make $1.2 million in other settlement-related payments required by the State
of Colorado.
Subsequent to the initiation of the regulatory investigations, a number of civil
lawsuits were brought against Janus Capital and certain of its affiliates, the
Janus funds, and related entities and individuals on behalf of Janus fund
shareholders and shareholders of Janus Capital Group Inc. The factual
allegations made in these actions are generally based on the NYAG complaint
against Canary Capital and in general allege that Janus Capital allowed certain
hedge funds and other investors to engage in "market timing" trades in Janus
funds. Such lawsuits allege a variety of theories for recovery including, but
not limited to: (i) violation of various provisions of the federal securities
laws; (ii) breach of fiduciary duties, as established by state common law or
federal law, to the funds and/or individual investors; (iii) breach of contract;
(iv) unjust enrichment; and (v) violations of Section 1962 of the Racketeering,
Influenced and Corrupt Organizations Act.
26 Janus Adviser February 29, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The "market timing" lawsuits include actions purportedly on behalf of a class of
Janus fund investors, cases allegedly brought on behalf of the funds themselves,
a case asserting claims both on behalf of an investor class and derivatively on
behalf of the funds, cases brought on behalf of shareholders of Janus Capital
Group Inc. on a derivative basis against the Board of Directors of Janus Capital
Group Inc., purported ERISA actions against the managers of the Janus 401(k)
plan, and a non-class "representative action" purportedly brought on behalf of
the general public. The complaints also name various defendants. One or more
Janus entities (Janus Capital Group Inc., Janus Capital Management LLC or Janus
Capital Corporation) are named in every action. In addition, actions have been
brought against Janus Investment Fund and/or one or more of the individual Janus
funds, the Janus fund Trustees, officers of the Janus funds, officers of Janus
Capital, officers of Janus Capital Group Inc., and directors of Janus Capital
Group Inc.
The "market timing" lawsuits were filed in a number of state and federal
jurisdictions. The Judicial Panel on Multidistrict Litigation has finally or
conditionally transferred all but one of these actions to the United States
District Court for the District of Maryland for coordinated proceedings. One
action (alleging failure to adequately implement fair value pricing) has been
remanded to state court in Madison County, Illinois and is not subject to the
federal transfer procedures.
In addition to the "market timing" actions described above, civil lawsuits have
been filed against Janus Capital challenging the investment advisory fees
charged by Janus Capital to certain funds managed by Janus Capital, including
the Funds. 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 any of the pending actions will materially affect its
ability to continue to provide to the Funds the services it has agreed to
provide.
Janus Adviser February 29, 2004 27
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT AUDITORS
To the Board of Trustees and Shareholders
of Janus Adviser Trust
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of US Value Fund (formerly Vontobel US
Value Fund, one of the funds constituting the series of Vontobel Funds, Inc.)
and International Equity Fund (formerly Vontobel International Equity Fund, one
of the funds constituting the series of Vontobel Funds, Inc.), two of the funds
constituting Janus Adviser Trust (hereafter referred to as the "Funds") at
February 29, 2004, the results of each of their operations, the changes in each
of their net assets and the financial highlights for the two month period ended
February 29, 2004 and for the year ended December 31, 2003 in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Funds' management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at February 29, 2004 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where securities purchased had not been received, provide a reasonable basis for
the opinion expressed above. The Statement of Changes in Net Assets for the year
ended December 31, 2002 and the Financial Highlights for each of the four years
in the period then ended were audited by other independent accountants whose
report dated February 14, 2003, expressed an unqualified opinion on these
statements.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Denver, Colorado
April 27, 2004
28 Janus Adviser February 29, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXPLANATIONS OF CHARTS, TABLES AND FINANCIAL STATEMENTS
(unaudited)
1. PERFORMANCE OVERVIEWS
Performance overview graphs on the previous pages compare the performance of a
$10,000 investment in each Fund (from inception) with one or more widely used
market indices through February 29, 2004.
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 quoted for each class of the Fund. Average
annual total return is calculated by taking the growth or decline in value of an
investment over a period of time, including reinvestment of dividends and
distributions, then calculating the annual compounded percentage rate that would
have produced the same result had the rate of growth been constant throughout
the period. Average annual total return does not reflect the deduction of taxes
that a shareholder would pay on Fund distributions or redemption of Fund shares.
2. SCHEDULES OF INVESTMENTS
Following the performance overview section is each Fund's Schedule of
Investments. This schedule reports the industry concentrations and types of
securities held in each Fund on the last day of the reporting period. Securities
are usually listed by type (common stock, corporate bonds, U.S. government
obligations, etc.) and by industry classification (banking, communications,
insurance, etc.).
The market value of each security is quoted as of the last day of the reporting
period. The values of securities denominated in foreign currencies are converted
into U.S. dollars.
A summary of investments by country is provided if the Fund invested in foreign
securities as of February 29, 2004. This summary reports the Fund's exposure to
different countries by providing the percentage of securities invested in each
country.
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 fiscal 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 last line of this statement reports the Funds' net asset value (NAV) per
share on the last day of the reporting period for each class of the Fund. 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 Fund.
The next section reports the expenses and expense offsets incurred by the Funds,
including the advisory fee paid to the investment adviser and transfer agent
fees.
The last section lists the increase or decrease in the value of securities held
in the Funds. Funds realize a gain (or loss)
Janus Adviser February 29, 2004 29
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXPLANATIONS OF CHARTS, TABLES AND FINANCIAL STATEMENTS
(unaudited) (continued)
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 period. "Net Realized and Unrealized Gain/ (Loss) on Investments" is
affected both by changes in the market value of Fund holdings and by gains (or
losses) realized during the reporting period.
5. STATEMENT OF CHANGES IN NET ASSETS
This statement reports the increase or decrease in the Funds' net assets during
the reporting period. Changes in the Funds' net assets are attributable to
investment operations, dividends, distributions and capital share transactions.
This is important to investors because it shows exactly what caused the Funds'
net asset size to change during the period.
The first section summarizes the information from the Statement of Operations
regarding changes in net assets due to the Funds' investment performance. The
Funds' net assets may also change as a result of dividend and capital gains
distributions to investors. If investors receive their dividends in cash, money
is taken out of the Fund to pay the distribution. If investors reinvest their
dividends, the Funds' net assets will not be affected. If you compare each
Fund's "Net Decrease from Dividends and Distributions" to the "Reinvested
dividends and distributions," you'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 withdrawal via redemptions. Each Fund's net assets will increase
and decrease in value as investors purchase and redeem shares from a Fund.
6. FINANCIAL HIGHLIGHTS
This schedule provides a per-share breakdown of the components that affect the
net asset value (NAV) for current and past reporting periods for each class of
the Fund. Not only does this table provide you with total return, it also
reports total distributions, asset size, expense ratios and fund 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 Funds' net investment income per
share, which comprises dividends and interest income earned on securities held
by the Funds. Following is the total of gains, 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 return
reported the last day of the period.
Also included are the Funds' expense ratios, or the percentage of net assets
that was used to cover operating expenses during the period. Expense ratios vary
across the Funds for a number of reasons, including the differences in
management fees, the frequency of dividend payments and the extent of foreign
investments, which entail greater transaction costs.
The Funds' expenses may be reduced through expense-reduction arrangements. These
arrangements include the use of brokerage commissions, uninvested cash balances
earning interest or balance credits. 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 both
prior to any expense offset and after the offsets.
The ratio of net investment income/(loss) summarizes the income earned less
expenses divided by the average net assets of a Fund during the reporting
period. Don't confuse this ratio with a Fund's yield. The net investment income
ratio is not a true measure of a Fund's yield because it doesn't take into
account the dividends distributed to the Fund's investors.
The next ratio is the fund turnover rate, which measures the buying and selling
activity in a Fund. Fund turnover is affected by market conditions, changes in
the 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 Fund is turned over in a year; a 50% rate means that an
amount equal to the value of half the Fund is traded in a year; and a 200% rate
means that an amount equal to the value of the Fund is sold every six months.
30 Janus Adviser February 29, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DESIGNATION REQUIREMENTS (unaudited)
For federal income tax purposes, the Funds designated the following for the tax
year October 11, 2003 through February 29, 2004:
LONG-TERM CAPITAL GAINS
Fund LT Gain Distribution
- --------------------------------------------------------------------------------
U.S. Value Fund $ 2,107,623
International Equity Fund 787,056
- --------------------------------------------------------------------------------
Janus Adviser February 29, 2004 31
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TRUSTEES AND OFFICERS (unaudited)
The Trust's Statement of Additional Information includes additional information
about the Trustees and officers and is available, without charge, by calling
1-800-525-0020.
The following are the names of the Trustees and officers of the Trust, together
with a brief description of their principal occupations during the last five
years. Each Trustee has served in that capacity since he or she was originally
elected or appointed. The Trustees do not serve a specified term of office. Each
Trustee will hold office until the termination of the Trust or his or her
earlier death, resignation, retirement, incapacity or removal. The retirement
age for Trustees is 72.
The Trust's Nominating and Governance Committee will consider nominees for the
position of Trustee recommended by shareholders. Shareholders may submit the
name of a candidate for consideration by the Committee by submitting their
recommendations to the Trust's Secretary. The Trust's officers are elected
annually by the Trustees for a one-year term. Certain Trustees and officers also
serve three other registered investment companies advised by Janus Capital:
Janus Investment Fund, Janus Aspen Series and Janus Adviser Series. As of the
date of this report, collectively, the four registered investment companies
consist of 61 series or funds.
TRUSTEES
Number of
Funds in
Name, Age as of Fund Complex Other
February 29, 2004 Positions Held Length of Principal Occupations Overseen Directorships
and Address with Funds Time Served During the Past Five Years by Trustee Held by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Interested Trustee
Thomas H. Bailey* Trustee 5/03-Present Formerly, President (1978-2002) 61 N/A
151 Detroit Street and Chief Executive Officer (1994-
Denver, CO 80206 2002) of Janus Capital or Janus
Age 66 Capital Corporation. Chairman
and Director (1978-2002) of Janus
Capital Corporation; and Director
(1997-2001) of Janus Distributors,
Inc.; President and Director (1994-
2002) of the Janus Foundation.
- ------------------------------------------------------------------------------------------------------------------------------------
* The Funds are treating Mr. Bailey as an "interested person" of the Trust by
virtue of his past positions and continuing relationships with Janus Capital.
32 Janus Adviser February 29, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Number of
Funds in
Name, Age as of Fund Complex
February 29, 2004 Positions Held Length of Principal Occupations Overseen Other Directorships
and Address with Funds Time Served During the Past Five Years by Trustee Held by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Independent Trustees
James T. Rothe Chairman 4/04-Present Professor of Business, University 61 Director, Optika,
151 Detroit Street Trustee 5/03-Present of Colorado, Colorado Springs, CO Inc.
Denver, CO 80206 (since 1986). Formerly, Distinguished
Age 60 Visiting Professor of Business (2001-
2002), Thunderbird (American
Graduate School of International
Management), Phoenix, AZ; and
Principal (1988-1999) of Phillips-
Smith Retail Group, Addison, TX
(a venture capital firm).
Samuel Boyd, Jr. Trustee 8/03-Present Manager (since 1978) of Customer 2 Director, World
151 Detroit Street Service Operations and Accounting Funds Inc., The
Denver, CO 80206 Division, Potomac Electric Power World Insurance
Age 63 Company, Washington, D.C. Trust, Vontobel
Funds USA and
Satuit Capital
Management Trust.
Thomas I. Florence Trustee 5/03-Present Consultant, President, Dividend 2 N/A
151 Detroit Street Capital Securities LLC (since July
Denver, CO 80206 2003). Formerly, President
Age 41 Morningstar Investment Services
(3/00-12/02) and Managing Director,
Pilgrim Baxter & Associates
(12/96-3/00).
Arthur F. Lerner Trustee 5/03-Present Retired. Formerly, Senior Vice 2 Director, Sthenos
151 Detroit Street President Arnhold and Capital(United
Denver, CO 80206 S. Bleichroeder (investment Kingdom).
Age 61 manager) (12/69-1/03).
Dennis B. Mullen Trustee 5/03-Present Private Investor. 61 Director, Red Robin
151 Detroit Street Gourmet Burgers,
Denver, CO 80206 Inc.
Age 60
Maureen T. Upton Trustee 5/03-Present Formerly, Director of Sales and 2 N/A
151 Detroit Street Marketing, Intelligent Markets, Inc.
Denver, CO 80206 (3/00-3/03); Associate Equities
Age 37 Division, Goldman Sachs & Co.
(8/98-1/00).
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Adviser February 29, 2004 33
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TRUSTEES AND OFFICERS (continued)
OFFICERS
Name, Age as of
February 29, 2004 Term of Office* and Principal Occupations
and Address Positions Held with Funds Length of Time Served During the Past Five Years
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas A. Early** Senior Vice President, Chief Corporate
151 Detroit Street Affairs Officer, and Secretary of Janus
Denver, CO 80206 Capital and Janus Capital Group Inc.;
Age 48 General Counsel of Janus Capital
Group Inc.; Vice President, General
Counsel and Secretary of Janus Services
LLC, Janus Capital International LLC,
Janus Institutional Services LLC, Janus
Distributors LLC and the Janus
Foundation. Formerly, General Counsel of
Capital (1998-2004); Intrim Director of
Janus Capital (2002-2003); Director (2001)
of Janus Distributors, Inc. and Janus
Services, Inc.; General Counsel, Secretary
and Director (2000-2002) of Janus
International Holding, Inc.; Vice
President, General Counsel and Director to
Janus International (Asia) Limited (2000-
2004); Vice President and General Counsel
(1999-2004) and Director (1999-2004) to
Janus International Limited; Director for
Janus Capital Trust Manager Limited,
Janus World Principal Protected Funds and
Janus World Funds (1999-2004); and Board
member of Janus Global Funds SPC (1999-
2004)
Anita E. Falicia Vice President, Treasurer and 5/03-Present Vice President of Investment
151 Detroit Street Principal Accounting Officer Accounting of Janus Capital.
Denver, CO 80206 Chief Financial Officer 5/03-10/03 Formerly, Assistant Vice President
Age 35 (2000-2002) of Investment
Accounting of Janus Capital or Janus
Capital Corporation; Director (1999-
2000) of Investment Accounting
of Janus Capital Corporation; and
Director (1997-1999) of Fund
Accounting of Janus Capital
Corporation.
Bonnie M. Howe Vice President 5/03-Present Vice President and Assistant General
151 Detroit Street Counsel to Janus Capital, Janus
Denver, CO 80206 Distributors LLC and Janus Services
Age 38 LLC. Formerly, Assistant Vice
President (1997-1999) and Associate
Counsel (1995-1999) for Janus
Capital Corporation and Assistant
Vice President (1998-2000) for Janus
Service Corporation.
Kelley Abbott Howes General Counsel 4/04-Present Vice President of Domestic Funds
151 Detroit Street Vice President and Secretary 5/03-Present and General Counsel of Janus
Denver, CO 80206 Capital; Vice President and Assistant
Age 38 General Counsel of Janus Distributors
Distributors LLC and Janus Services
LLC. Formerly, Assistant General
Counsel of Janus Capital (1999-
2004); Assistant Vice President (1997-
1999) of Janus Capital Corporation;
Chief Compliance Officer, Director
and President (1997-1999) of Janus
Distributors, Inc.; and Assistant Vice
President (1998-2000) of Janus
Service Corporation.
- ------------------------------------------------------------------------------------------------------------------------------------
* Officers are elected annually by the Trustees for a one-year term.
** Effective about mid-May 2004, Mr. Early has announced his intention to
retire his positions with Janus Capital Group Inc. and its subsidiaries.
Also effective at that time, Mr. Early will retire as Vice President and
General Counsel of the Trust.
34 Janus Adviser February 29, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OFFICERS (cont.)
Name, Age as of
February 29, 2004 Term of Office* and Principal Occupations
and Address Positions Held with Funds Length of Time Served During the Past Five Years
- ------------------------------------------------------------------------------------------------------------------------------------
David R. Kowalski Vice President and 5/03-Present Vice President and Chief Compliance
151 Detroit Street Chief Compliance Officer Officer of Janus Capital and Janus
Denver, CO 80206 Distributors LLC; and Assistant Vice
Age 46 President of Janus Services LLC.
Formerly, Senior Vice President and
Director (1985-2000) of Mutual Fund
Compliance for Van Kampen Funds.
Girard C. Miller President and Chief Executive Officer 10/03-Present Executive Vice President and Chief
151 Detroit Street Operating Officer of Janus Capital
Denver, CO 80206 Group Inc. and Janus Capital; and
Age 52 President of Janus Distributors LLC.
Formerly, President and Chief
Executive Officer of ICMA Retirement
Corporation (1993-2003).
Loren M. Starr Vice President and Chief Financial 10/03-Present Senior Vice President and Chief
151 Detroit Street Officer Financial Officer of Janus Capital and
Denver, CO 80206 President and Chief Executive Officer 5/03-10/03 Janus Capital Group Inc.; Vice President
Age 42 and Chief Financial Officer of Janus
Services LLC, Janus Distributors LLC,
Janus Capital International LLC and
Janus Institutional Services LLC; Vice
President, Treasurer, Chief Financial
Officer and Director of Janus
International Limited; Director of Janus
Capital Trust Manager Limited, Janus
World Principal Protected Funds, Janus
International (Asia) Limited and Janus
World Funds; and Board member of
Janus Global Funds SPC. Formerly,
Interim Director of Janus Capital
(2002-2003); Vice President of
Finance, Treasurer, Chief Financial
Officer (2001-2002) and Director
(2002) for Janus International Holding,
Inc.; and Managing Director, Treasurer
and Head of Corporate Finance and
Reporting (1998-2001) for Putnam
Investments.
Heidi J. Walter Vice President 5/03-Present Vice President and Assistant General
151 Detroit Street Counsel to Janus Capital and Janus
Denver, CO 80206 Services LLC. Formerly, Vice President
Age 36 and Senior Legal Counsel (1995-1999)
for Stein Roe & Farnham, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
*Officers are elected annually by the Trustees for a one-year term.
Janus Adviser February 29, 2004 35
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Notes
36 Janus Adviser February 29, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Notes
Janus Adviser February 29, 2004 37
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
JANUS PROVIDES ACCESS TO A WIDE RANGE OF INVESTMENT DISCIPLINES.
GROWTH INTERNATIONAL/GLOBAL CORE
Janus growth funds focus on companies Janus international and global funds Janus core funds seek investments in
believed to be the leaders in their seek to leverage Janus' research more stable and predictable companies.
respective industries, with solid capabilities by taking advantage of These funds look for a strategic
management teams, expanding market inefficiencies in foreign markets, where combination of steady growth and for
share, margins and efficiencies. accurate information and analytical certain funds, some degree of income.
insight are often at a premium.
RISK-MANAGED VALUE INCOME
Janus risk-managed funds seek to Value funds invest in companies they Janus income funds attempt to provide
outperform their respective indices believe are poised for a turnaround or less risk relative to equities while
while maintaining a risk profile equal are trading at a significant discount to seeking to deliver a competitive total
to or lower than the index itself. fair value. The goal is to gain unique return through high current income and
Managed by INTECH, these funds use a insight into a company's true value and appreciation.
mathematical process in an attempt to identify and evaluate potential
build a more "efficient" portfolio than catalysts that may unlock shareholder
the index. value.
FOR MORE INFORMATION ABOUT ANY OF OUR FUNDS, VISIT WWW.JANUS.COM.
[LOGO] JANUS CAPITAL
Group
151 Detroit Street
Denver, CO 80206
1-800-525-3713
Funds distributed by Janus Distributors LLC. This material must be preceded or
accompanied by a prospectus. (4/04)
119-02-100 05-04
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Item 2 - Code of Ethics
As of the end of the period covered by this Form N-CSR, the Registrant
has adopted a Code of Ethics (as defined in Item 2(b) of Form N-CSR),
which is posted on the Registrant's website: www.janus.com. Registrant
intends to post any amendments to, or waivers from (as defined in Item
2 of Form N-CSR), such code on www.janus.com within five business days
following the date of such amendment or waiver.
Item 3 - Audit Committee Financial Expert
Janus Adviser's Board of Trustees has determined that the following
members of Janus Adviser's Audit Committee are "audit committee
financial experts," as defined in Item 3 to Form N-CSR: Dennis B.
Mullen (Chairman), Samuel Boyd, Jr. and Arthur F. Lerner each of whom
is "independent" under the standards set forth in Item 3 to Form
N-CSR. Relevant financial experience for Arthur F. Lerner includes
corporate experience supervising persons responsible for preparing and
analyzing financial statements and experience in the investment
management field, including analysis of financial statements.
An "audit committee financial expert" is not an "expert" for any
purpose, including for purposes of Section 11 of the Securities Act of
1933, as a result of being designated as an "audit committee financial
expert." Further, the designation of a person as an "audit committee
financial expert" does not mean that the person has any greater
duties, obligations, or liability than those imposed on the person
without the "audit committee financial expert" designation. Similarly,
the designation of a person as an "audit committee financial expert"
does not affect the duties, obligations, or liability of any other
member of the audit committee or board of directors.
Item 4 - Principal Accountant Fees and Services
Pre-reorganization:
Effective October 13, 2003, Vontobel U.S. Value Fund and Vontobel
International Equity Fund, separate series of Vontobel Funds, Inc.
(the "Predecessor Fund"), participated in a tax-free reorganization
with US Value Fund and International Equity Fund, separate series of
Janus Adviser (the "Fund"), respectively. US Value Fund and
International Equity Fund were created as "shells" for the transfer of
net assets of Vontobel U.S. Value Fund and Vontobel International
Equity Fund, respectively. For accounting purposes, the Predecessor
Fund is considered the surviving entity. The Predecessor Fund's
auditor was Tait, Weller & Baker (the "Predecessor Auditor"). The
Fund's auditor is PricewaterhouseCoopers LLP (the "Auditor"). The
Principal Accountant Fees and Services information shown below is
organized into two sections, one pre-reorganization and one
post-reorganization.
The following table shows the amount of fees that Predecessor Auditor,
billed to the Predecessor Fund during the Predecessor Fund's fiscal
year ended December 31, 2002 and for the period January 1, 2003
through the date of reorganization, October 13, 2003. For engagements
with Predecessor Auditor entered into on or after May 6, 2003, the
Predecessor Audit Committee approved in advance all audit services and
non-audit services that Predecessor Auditor provided to the
Predecessor Fund, except for those non-audit services that were
subject to the pre-approval exception under Rule 2-01 of Regulation
S-X (the "pre-approval exception"). The pre-approval exception for
services provided directly to the Predecessor Fund waives the
pre-approval requirement for services other than audit, review or
attest services if: (A) the aggregate amount of all such services
provided constitutes no more than 5% of the total amount of revenues
paid by the Predecessor Fund during the fiscal year in which the
services are provided; (B) the Predecessor Fund did not recognize the
services as non-audit services at the time of the engagement; and (C)
the services are promptly brought to the Predecessor Audit Committee's
attention, and the Committee (or its delegate) approves the services
before the audit is completed.
<table>
Services that the Predecessor Auditor Billed to the Predecessor Fund
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
Fiscal Year Ended Audit Fees Audit-Related Tax Fees All Other Fees
December 31 Billed to Fees Billed to Billed to Billed to
Predecessor Fund Predecessor Fund Predecessor Fund Predecessor Fund
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
2003* $76,500 $0 $5,500 $0
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
Percentage approved pursuant N/A 0% 0% 0%
to pre-approval exception
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
2002 $56,500 $0 $0 $0
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
Percentage approved pursuant N/A N/A N/A N/A
to pre-approval exception
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
</table>
*January 1, 2003 through October 13, 2003 (date of reorganization)
The above "Audit Fees" were billed for amounts related to the audit of
the Predecessor Fund's financial statements and services normally
provided by the accountant in connection with statutory and regulatory
filings. The above "Tax Fees" were billed for amounts related to tax
compliance, tax planning, and tax advice.
Services that the Predecessor Fund's Auditor Billed to the Predecessor
Adviser and Affiliated Predecessor Fund Service Providers
The following table shows the amount of fees billed by Auditor to
Vontobel Asset Management, Inc. (the "Predecessor Adviser"), and any
entity controlling, controlled by or under common control with the
Predecessor Adviser ("Predecessor Control Affiliate") that provided
ongoing services to the Predecessor Fund ("Affiliated Predecessor Fund
Service Provider"), for engagements directly related to the
Predecessor Fund's operations and financial reporting, during the
Predecessor Fund's fiscal year ended December 31, 2002 and the period
January 1, 2003 through the date of reorganization, October 13, 2003.
The table also shows the percentage of fees subject to the
pre-approval exception. The pre-approval exception for services
provided to Predecessor Adviser and any Affiliated Predecessor Fund
Service Provider (other than audit, review or attest services) waives
the pre-approval requirement if: (A) the aggregate amount of all such
services provided constitutes no more than 5% of the total amount of
revenues paid the Predecessor Adviser by the Fund, the Predecessor
Adviser and Affiliated Predecessor Fund Service Providers during the
fiscal year in which the services are provided that would have to be
pre-approved by the Audit Committee; (B) the Predecessor Fund did not
recognize the services as non-audit at the time of the engagement; and
(C) the services are promptly brought to the Audit Committee's
attention, and the Committee (or its delegate) approves the services
before the Predecessor Fund's audit is completed.
<table>
<s> <c>
- ------------------------------- --------------------- ---------------------- ----------------------
Audit-Related All Other Fees
Fees Billed to Tax Fees Billed to Billed to Predecessor
Predecessor Adviser Predecessor Adviser Adviser and Affiliated
and Affiliated and Affiliated Fund Fund Service
Fiscal Year Ended Predecessor Fund Predecessor Fund Predecessor Fund
December 31 Service Providers Service Providers Service Providers
- ------------------------------- --------------------- ---------------------- ---------------------
- ------------------------------- --------------------- ---------------------- ---------------------
2003* $0 $0 $0
- ------------------------------- --------------------- ---------------------- ---------------------
- ------------------------------- --------------------- ---------------------- ---------------------
Percentage approved pursuant 0% 0% 0%
to pre-approval exception
- ------------------------------- --------------------- ---------------------- ---------------------
- ------------------------------- --------------------- ---------------------- ---------------------
2002 $0 $0 $0
- ------------------------------- --------------------- ---------------------- ---------------------
- ------------------------------- --------------------- ---------------------- ---------------------
Percentage approved pursuant N/A N/A N/A
to pre-approval exception
- ------------------------------- --------------------- ---------------------- ---------------------
</table>
* January 1, 2003 through October 13, 2003 (date of reorganization)
Non-Audit Services
The following table shows the amount of fees that Predecessor Auditor
billed during the Predecessor Fund's fiscal year ended December 31,
2002 and the period January 1, 2003 through October 13, 2003 (date of
the reorganization) for non-audit services. For engagements entered
into on or after May 6, 2003, the Audit Committee was required to
pre-approve non-audit services that Auditor provided to the Adviser
and any Affiliated Predecessor Fund Service Provider, if the
engagement related directly to the Predecessor Fund's operations and
financial reporting (except for those subject to the pre-approval
exception described above). The Audit Committee requested and received
information from Predecessor Auditor about any non-audit services that
Predecessor Auditor rendered during the Predecessor Fund's fiscal year
ended December 31, 2002 and the period January 1, 2003 through the
date of the reorganization, October 13, 2003, to the Predecessor
Adviser and any Affiliated Predecessor Fund Service Provider. The
Predecessor Audit Committee considered this information in evaluating
Predecessor Auditor's independence.
<table>
<s> <c>
- ------------------------------- --------------------- ------------------------ ----------------------- ----------------------
Total Non-Audit Fees
billed to Adviser and
Affiliated Predecessor Total Non-Audit
Fund Service Providers Fees billed to
(engagement related Predecessor Adviser
Total directly to the and Affiliated
Non-Audit Fees operations and financial Predecessor Fund
Billed to the reporting of the Service Providers
Fiscal Year Ended Predecessor Fund Predecessor Fund) (all other engagements) Total of (A), (B)
December 31 (A) (B) (C) and (C)1
- ------------------------------- --------------------- ------------------------ ----------------------- -----------------------
- ------------------------------- --------------------- ------------------------ ----------------------- -----------------------
2003* $0 $0 $0 $0
- ------------------------------- --------------------- ------------------------ ----------------------- -----------------------
- ------------------------------- --------------------- ------------------------ ----------------------- -----------------------
2002 $0 $0 $0 $0
- ------------------------------- --------------------- ------------------------ ----------------------- -----------------------
</table>
1. The Audit Committee also considered amounts billed by Predecessor
Auditor to all other Predecessor Control Affiliates in evaluating
Predecessor Auditor's independence.
* Period January 1, 2003 through October 13, 2003 (date of
reorganization)
Pre-Approval Policies
The Predecessor Fund's Audit Committee Charter required the
Predecessor Fund's Audit Committee to pre-approve any engagement of
Predecessor Auditor (i) to provide Audit or Non-Audit Services to the
Predecessor Fund or (ii) to provide Non-Audit Services to Predecessor
Adviser or any Affiliated Fund Service Provider, if the engagement
related directly to the operations and financial reporting of the
Predecessor Fund, except for those non-audit services that were
subject to the pre-approval exception under Rule 2-01 of Regulation
S-X. The Chairman of the Audit Committee or, if the Chairman is
unavailable, another member of the Audit Committee, could grant the
pre-approval. All such delegated pre-approvals were presented to
the Audit Committee no later than the next Audit Committee meeting.
Post-reorganization:
The following table shows the amount of fees that Auditor billed to
the Fund during the Fund's first fiscal year ended December 31, 2003,
subsequent to the date of the reorganization, October 13, 2003. After
the reorganization, the Fund changed the fiscal year from December 31
to the last day of February. The following table also shows the amount
of fees that Auditor billed to the Fund during the reporting period
January 1, 2004 through February 29, 2004. The Audit Committee
approved in advance all audit services and non-audit services that
Auditor provided to the Fund, except for those non-audit services that
were subject to the pre-approval exception under Rule 2-01 of
Regulation S-X (the "pre-approval exception"). The pre-approval
exception for services provided directly to the Fund waives the
pre-approval requirement for services other than audit, review or
attest services if: (A) the aggregate amount of all such services
provided constitutes no more than 5% of the total amount of revenues
paid by the Fund to the Auditor during the fiscal year in which the
services are provided; (B) the Fund did not recognize the services as
non-audit services at the time of the engagement; and (C) the services
are promptly brought to the Audit Committee's attention, and the
Committee (or its delegate) approves the services before the audit is
completed.
<table>
Services that the Fund's Auditor Billed to the Fund
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
Fiscal Year Ended Audit Fees Audit-Related Tax Fees All Other Fees
December 31/February 29 Billed to Fund Fees Billed to Fund Billed to Fund Billed to Fund
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
2004* $13,000 $0 $2,000 $0
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
Percentage approved pursuant N/A 0% 0% 0%
to pre-approval exception
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
2003** $28,500 $0 $0 $0
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
Percentage approved pursuant N/A 0% 0% 0%
to pre-approval exception
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
</table>
* For reporting period January 1, 2004 to February 29, 2004
** Subsequent to October 13, 2003 (date of reorganization) to
December 31, 2003
The above "Tax Fees" were billed for amounts related to tax
compliance, tax planning and tax advise.
Services that the Fund's Auditor Billed to the Adviser
and Affiliated Fund Service Providers
The following table shows the amount of fees billed by Auditor to
Janus Capital Management LLC (the "Adviser"), and any entity
controlling, controlled by or under common control with the Adviser
("Control Affiliate") that provides ongoing services to the Fund
("Affiliated Fund Service Provider"), for engagements directly related
to the Fund's operations and financial reporting, during the Fund's
first fiscal year ended December 31, 2003, subsequent to the date of
the reorganization, October 13, 2003. After the reorganization, the
Funds changed the fiscal year from December 31 to the last day of
February. The following table also shows the amount of fees billed by
Auditor to the Adviser and any Affiliated Fund Service Provider during
the reporting period January 1, 2004 through February 29, 2004.
The table also shows the percentage of fees subject to the
pre-approval exception. The pre-approval exception for services
provided to Adviser and any Affiliated Fund Service Provider (other
than audit, review or attest services) waives the pre-approval
requirement if: (A) the aggregate amount of all such services provided
constitutes no more than 5% of the total amount of revenues paid by
the Fund to the Adviser and Affiliated Fund Service Providers during
the fiscal year in which the services are provided that would have to
be pre-approved by the Audit Committee; (B) the Fund did not recognize
the services as non-audit at the time of the engagement; and (C) the
services are promptly brought to the Audit Committee's attention, and
the Committee (or its delegate) approves the services before the
Fund's audit is completed.
<table>
<s> <c> <c>
- ------------------------------- -------------------- --------------------- ---------------------- -------------------
Audit Fees Billed Audit-Related All Other Fees
to Adviser Fees Billed to Tax Fees Billed to Billed to Adviser
and Affiliated Adviser and Adviser and and Affiliated
Fiscal Year Ended Fund Service Affiliated Fund Affiliated Fund Fund Service
December 31 Providers Service Providers Service Providers Providers
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
2004* $0 $0 $25,360 $0
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
Percentage approved pursuant 0% 0% 0% 0%
to pre-approval exception
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
2003** $0 $228,395 $23,215 $119,000
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
Percentage approved pursuant 0% 0% 0% 0%
to pre-approval exception
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
- ------------------------------- --------------------- --------------------- ---------------------- -------------------
</table>
* For reporting period January 1, 2004 to February 29, 2004
** Subsequent to October 13, 2003 (date of reorganization) to
December 31, 2003
The above "Audit-Related Fees" were billed for amounts related to the
due diligence related to mergers and acquisitions and semi-annual
financial statement disclosure review. The above "Tax Fees" were
billed for amounts related to tax compliance, tax planning and tax
advise.
Non-Audit Services
The following table shows the amount of fees that Auditor billed
during the Fund's first fiscal year ended December 31, 2003 for
non-audit services, subsequent to the date of the reorganization,
October 13, 2003. After the reorganization, the Funds changed the
fiscal year from December 31 to the last day of February. The
following table also shows the amount of fees the Auditor billed
during the reporting period January 1, 2004 through February 29, 2004
for non-audit services. For engagements entered into on or after May
6, 2003, the Audit Committee is required to pre-approve non-audit
services that Auditor provides to the Adviser and any Affiliated Fund
Service Provider, if the engagement relates directly to the Fund's
operations and financial reporting (except for those subject to the
pre-approval exception described above). The Audit Committee requested
and received information from Auditor about any non-audit services
that Auditor rendered during the Fund's last fiscal year to the
Adviser and any Affiliated Fund Service Provider. The Committee
considered this information in evaluating Auditor's independence.
<table>
<s> <c>
- ------------------------------- --------------------- ------------------------ ----------------------- ----------------------
Total Non-Audit Fees
billed to Adviser Fund
Service Providers Total Non-Audit
(engagements related Fees billed to
directly to the Adviser and
Total operations and Affiliated Fund
Non-Audit Fees financial reporting of Service Providers
Fiscal Year Ended Billed to the Fund the Fund ) (all other engagements) Total of (A), (B)
December 31/February 29 (A) (B) (C) and (C)1
- ------------------------------- --------------------- ------------------------ ----------------------- -----------------------
- ------------------------------- --------------------- ------------------------ ----------------------- -----------------------
2004* $0 $0 $0 $0
- ------------------------------- --------------------- ------------------------ ----------------------- -----------------------
- ------------------------------- --------------------- ------------------------ ----------------------- -----------------------
2003** $0 $0 $0 $0
- ------------------------------- --------------------- ------------------------ ----------------------- -----------------------
- ------------------------------- --------------------- ------------------------ ----------------------- -----------------------
2002 N/A N/A N/A N/A
- ------------------------------- --------------------- ------------------------ ----------------------- -----------------------
</table>
* For reporting period January 1, 2004 to February 29, 2004
** Subsequent to October 13, 2003 (date of reorganization) to
December 31, 2003
1. The Audit Committee also considered amounts billed by
Auditor to all other Control Affiliates in evaluating
Auditor's independence.
Pre-Approval Policies
The Fund's Audit Committee Charter requires the Fund's Audit Committee
to pre-approve any engagement of Auditor (i) to provide Audit or
Non-Audit Services to the Fund or (ii) to provide Non-Audit Services
to Adviser or any Affiliated Fund Service Provider, if the engagement
relates directly to the operations and financial reporting of the
Fund, except for those non-audit services that were subject to the
pre-approval exception under Rule 2-01 of Regulation S-X. The Chairman
of the Audit Committee or, if the Chairman is unavailable, another
member of the Audit Committee, may grant the pre-approval. All such
delegated pre-approvals must be presented to the Audit Committee no
later than the next Audit Committee meeting.
Item 5 - Audit Committee of Listed Registrants
Not applicable.
Item 6 - [Reserved]
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies
Not applicable.
Item 8 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers
Not applicable.
Item 9 - Submission of Matters to Vote of Security Holders
The Fund's Nominating and Governance Committee ("Committee") is
responsible for identifying and nominating candidates for appointment
as Trustees of the Trust. Shareholders of a Fund may submit names of
potential candidates for nomination as Trustee of the Trust in
accordance with procedures adopted by the Committee. Shareholders of a
Fund who wish to nominate a candidate to the Trust's Board of Trustees
("Nominating Shareholder") must submit any such recommendation in
writing via regular mail to the attention of the Secretary of the
Trust, at the address of the principal executive office of the Trust
("Shareholder Recommendation"). The Shareholder Recommendation must
include: (i) the class or series and number of all shares of the Fund
owned beneficially or of record by the Nominating Shareholder at the
time the recommendation is submitted and the dates on which such
shares were acquired, specifying the number of shares owned
beneficially; (ii) a full listing of the proposed candidate's
education, experience (including knowledge of the investment company
industry, experience as a director or senior officer of public or
private companies, and directorships on other boards of other
registered investment companies), current employment, date of birth,
business and residence address, and the names and addresses of at
least three professional references; (iii) information as to whether
the candidate is or may be an "interested person" (as such term is
defined in the Investment Company Act of 1940, as amended) of the
Fund, Janus Capital Management LLC, or any sub-adviser to a Fund, and,
if believed not to be an "interested person," information regarding
the candidate that will be sufficient for the Fund to make such
determination; (iv) the written and signed consent of the candidate to
be named as a nominee and to serve as a Trustee of the Trust, if
elected; (v) a description of all arrangements or understandings
between the Nominating Shareholder, the candidate and/or any other
person or persons (including their names) pursuant to which the
Shareholder Recommendation is being made, and if none, so specify;
(vi) the class or series and number of all shares of the Fund owned of
record or beneficially by the candidate, as reported by the candidate;
and (vii) such other information that would be helpful to the
Committee in evaluating the candidate. The Committee may require the
Nominating Shareholder to furnish such other information as it may
reasonably require. When the Committee is not actively recruiting new
Trustees, Shareholder Recommendations will be kept on file until
active recruitment is under way.
Item 10 - Controls and Procedures
(a) The Registrant's Principal Executive Officer and Principal
Financial Officer have evaluated the Registrant's disclosure
controls and procedures (as defined in Rule 30a-3(c) under the
Investment Company Act of 1940) within 90 days of this filing and
have concluded that the Registrant's disclosure controls and
procedures were effective, as of that date.
(b) There was no change in the Registrant's internal control over
financial reporting during Registrant's second fiscal half-year
that has materially affected, or is reasonably likely to
materially affect, the Registrant's internal control over
financial reporting.
Item 11 - Exhibits
(a)(1) Not applicable because the Registrant has posted its Code of
Ethics (as defined in Item 2(b) of Form N-CSR) on its website
pursuant to paragraph (f)(2) of Item 2 of Form N-CSR.
(a)(2) Separate certifications for the Registrant's Principal
Executive Officer and Principal Financial Officer, as required by
Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a)
under the Investment Company Act of 1940, are attached as
Ex99.CERT.
(a) (3) Not applicable.
(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.
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 Adviser
By: _/s/ Girard C. Miller_______
Girard C. Miller,
President, Chief Executive Officer (Principal Executive Officer)
Date: April 29, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
By: _/s/ Girard C. Miller________
Girard C. Miller,
President, Chief Executive Officer (Principal Executive Officer)
Date: April 29, 2004
By: _/s/ Loren M. Starr________
Loren M. Starr,
Vice President and Chief Financial Officer (Principal Financial Officer)
Date: April 29, 2004