[Janus Letterhead]
December 26, 2006
VIA EDGAR
---------
U.S. Securities and Exchange Commission Division of Investment Management
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, D.C. 20549-0505
Attention: Messrs. Larry Greene and Richard Pfordte
Re: JANUS INVESTMENT FUND (the "Registrant")
1933 Act File No. 002-34393
1940 Act File No. 811-1879
Dear Gentlemen:
The purpose of this letter is to respond to comments of the staff ("Staff") of
the Securities and Exchange Commission ("SEC"), as communicated in telephone
conferences on October 31, 2006, November 2, 2006, November 17, 2006, November
23, 2006, November 29, 2006, December 6, 2006, and December 20, 2006, with
respect to the preliminary proxy statement and accompanying materials of the
Registrant filed on October 20, 2006, and amended preliminary proxy statement
filed on December 15, 2006 (each, a "Proxy Statement") related to a special
meeting of shareholders of Janus Money Market Fund and Janus Government Money
Market Fund, each a series of the Registrant (each, a "Fund," and collectively,
the "Funds"), to be held on February 16, 2007. The Proxy Statement seeks
shareholder approval of transactions described in an Agreement and Plan of
Reorganization related to the reorganization of Institutional Shares and Service
Shares (each, a "Current Share Class" and collectively, the "Current Share
Classes") of each Fund that transfers assets of the Current Share Classes into
corresponding shares of new money market funds (the "New Funds")(the
"Transaction"). Each Fund's Investor Share class will also vote on the
Transaction and will continue as shareholders of the Current Fund. On behalf of
the Registrant, responses to the comments are as follows:
1. COMMENT: The Staff requested that the Registrant document all comments and
responses and provide a Tandy representation in the letter to be filed as
correspondence separate from the filing.
RESPONSE: The Registrant acknowledges the comment and confirms that it has
complied.
2. COMMENT: The Staff inquired whether disclosure regarding the Transaction
was disclosed in each Fund's prospectus.
RESPONSE: As noted during the discussion, each Fund's prospectus has been
supplemented to reflect the Transaction.
3. COMMENT: The Staff inquired as to whether the Transaction is in compliance
with no-action letters under Rule 145.
RESPONSE: The Registrant has taken the position that the Transaction is in
compliance with Rule 145. As you are aware, in numerous instances the Staff
has interpreted Rule 145(a)(2) under the Securities Act of 1933, as amended,
to apply to "shell" reorganizations of registered investment companies (i.e.
transactions in which the assets of a predecessor are transferred to newly
organized successor). As such, the Staff has permitted such transactions to
be effected on the basis of an ordinary proxy solicitation, rather than
through a registration statement on Form N-14. In so doing, the Staff has
given an expansive interpretation to Rule 145(a)(2) under the 1933 Act,
which on its face applies to "statutory merger . . . or similar plan of
acquisition . . . where the sole purpose of the transaction is to change an
issuer's domicile."
The Staff has granted no-action relief in connection with transactions
involving changes that were considerably more significant than those in the
proposed reorganization, including changes in the form of organization,
investment policies, operating practices and closed-end/open-end or
diversified/non-diversified status. For example in PEMCO (available May 31,
1988) the Staff allowed a New York limited partnership seeking to reorganize
as a Maryland corporation to rely on Rule 145(a)(2) with respect to a
transaction that would concurrently (i) expand the pool of eligible
investors by permitting investment by the general public, (ii) change the
fund from diversified to non-diversified status, (iii) change certain
fundamental investment policies, (iv) allow the purchase and redemption of
fund shares on a daily, rather than a quarterly basis, (v) change the
identity of the custodian and certified public accountants, and (vi) change
the composition of the Board of Directors.
In the present case,
- The acquiring funds are shell entities that will not commence
operations or have any assets before the reorganization date.
- Shareholders will receive shares of a newly formed class of the
applicable shell fund that have substantially the same features as the
current class.
- The acquiring trust will have a board of directors that is identical
to the board of directors for the acquired trust.
- Each acquiring fund will have an investment management agreement that
is identical to the investment management agreement for the acquired
fund, except for the term and except for the parties (i.e., the
acquiring trust will be the party).
- Each acquiring fund will have identical fundamental and
non-fundamental policies as the applicable current fund.
As discussed, in 2000, ten series of a new registrant, Janus Adviser
Series were formed from the spin-off of an existing class of ten
corresponding series of Janus Aspen Series, a transaction which was
accomplished by means of an ordinary proxy solicitation rather than a
registration statement on Form N-14. The counsel that represented
Janus Adviser Series and Janus Aspen Series in that transaction has
confirmed that the ability to rely upon Rule 145(a)(2) was discussed
in detail with the Staff. While the Staff raised an issue regarding
the successor's ability to use prior performance information, which
issue was the subject of a no-action letter (see Janus Adviser Series,
publicly available August 28, 2000), the Staff did not deem it
necessary to address the availability of Rule 145 in the no-action
letter. Indeed, we note that the Staff has previously indicated that
it will not consider no-action requests involving Rule 145(a)(2)
transactions unless they involve novel or unusual issues. See, e.g.,
CIGNA Aggressive Growth Fund, Inc. (pub. avail. Feb. 15, 1985).
Prior counsel remembers that the Staff was persuaded by the same
fundamental facts that are present here, i.e. that the successor funds
were newly created entities which immediately following the
transaction would have identical investments to their predecessors and
that the successor funds would have substantially similar investment
characteristics on an ongoing basis. In other words, the planned proxy
solicitation did not involve a new investment decision by
shareholders; rather, the transactions would merely result in the
re-housing of a portion of the predecessor fund in a new but similar
legal entity. For the reasons stated, Registrant believes that it may
proceed with the proposed Transaction without a need for a
registration statement on Form N-14.
4. COMMENT: The Staff inquired as to whether the Transaction is in compliance
with the Registrant's Trust Instrument and applicable state law.
RESPONSE: The Registrant believes that the Transaction is in compliance with
the Registrant's Trust Instrument. The Registrant's Trust Instrument gives
the Trustees power to effect a conversion or re-designation of any class or
series without a shareholder vote provided that certain determinations are
made (step one of the Transaction). The Registrant's Trust Instrument also
authorizes the Trustees to effect a shell fund reorganization without a
shareholder vote (e.g., other mergers not involving the
redemption-upon-demand element are being effected with a shareholder vote)
(step two of the Transaction). To the best knowledge of the Registrant, the
Registrant believes that the Transaction is in compliance with applicable
state law.
5. COMMENT: The Staff inquired as to whether performance of a Current Share
Class would carry over to the corresponding share class of the New Fund.
RESPONSE: Since the investment objective, policies, restrictions and fee
structure are the same pre- and post- the Transaction, the performance of
each Current Share Class is expected to carry forward to the corresponding
class of the New Fund.
6. COMMENT: The Staff indicated that the letter to shareholders contained in
the Proxy Statement should provide greater detail explaining the
Transaction.
RESPONSE: The Registrant has revised the letter to shareholders accordingly.
7. COMMENT: The Staff noted that certain text contained in the shareholder
letter appeared in all capital letters.
RESPONSE: As noted during the discussion, the noted text is in bold font and
appears in all capital letters only in the EDGAR filing.
8. COMMENT: The Staff noted that the disclosure in the Proxy Statement should
be revised to clarify the Transaction.
RESPONSE: The Registrant has revised the Proxy Statement to better reflect
the mechanics of the Transaction and has provided the Staff with additional
analysis with respect to the Transaction, a copy of which is attached as
Exhibit A.
9. COMMENT: The Staff requested clarification with respect to language in the
Proxy Statement regarding retail shareholders ability to avoid certain costs
historically attributable to institutional shareholders.
RESPONSE: The Registrant has revised the disclosure in the Proxy Statement
removing such language as it was not applicable.
10. COMMENT: The Staff requested clarification as to what would occur if
approval for the Transaction was not obtained by all Current Share Classes.
RESPONSE: Through numerous conversations with the Staff, this comment is no
longer applicable as the Transaction is no longer a vote of the Current
Classes but instead, is a fund-wide vote. However, the Proxy Statement
explains that each Fund's Board of Trustees retains the right to not proceed
with the Transaction if it is determined that the Transaction is no longer
in the best interests of a Fund.
11. COMMENT: The Staff inquired as to the precedent for the Transaction's
two-step structure.
RESPONSE: As discussed, the Registrant designed the Transaction to mirror
the reorganization of a class of series of another trust managed by Janus
Capital Management LLC ("Janus Capital") into other series also managed by
Janus Capital. That reorganization occurred in 1999/2000 and was discussed
with the Staff at that time. A
copy of a memorandum discussing this two-step process that was previously
provided to the Staff is attached to this letter as Exhibit A.
12. COMMENT: The Staff asked that the disclosure relating to the transfer of
assets and liabilities be revised, as the Staff believed the disclosure
provided in the Proxy Statement was unclear as to what liabilities remained
in each New Fund following the Transaction.
RESPONSE: Clarifying disclosure has been added with respect to the transfer
of assets and liabilities.
13. COMMENT: The Staff requested clarification with respect to the language
"excess cash" in the following sentence: "For the New Funds, if the cash
position of the New Fund is more than one percentage point more than the
cash position of the Current Fund just prior to the Reorganization, Janus
Capital will bear the cost of investing that excess cash."
RESPONSE: The following disclosure has been added to the Proxy Statement to
clarify the meaning of "excess cash:" "It is anticipated that each New Fund
will have, after the Reorganization, a cash position in its portfolio
roughly equivalent to the cash position of the corresponding Current Fund
immediately prior to the Reorganization. If, however, the cash position of
the New Fund, after the Reorganization, is more than one percentage point
greater than the cash position of the Current Fund just prior to the
Reorganization, Janus Capital will bear the cost of investing such excess
cash."
14. COMMENT: The Staff inquired as to the reference to "initial portfolio
manager" as used in the Proxy Statement.
RESPONSE: The disclosure has been revised to remove "initial" from the Proxy
Statement.
15. COMMENT: The Staff inquired whether the chart on page 15 of the initial
preliminary Proxy Statement describes the current and pro forma
capitalizations of the Current Share Classes and whether such chart should
reflect all share classes.
RESPONSE: The chart has been revised to include current and pro forma
capitalizations of each share class of each Fund.
16. COMMENT: The Staff inquired as to whether an expense example should be
included in the Proxy Statement.
RESPONSE: Since this was filing of a proxy statement on Schedule 14A and not
a prospectus/proxy statement on Form N-14, in accordance with instructions
to Schedule 14A, no expense example is required. However, in order to ensure
appropriate communication to the shareholders of current and pro forma fees,
the Registrant has added an expense example to the Proxy Statement.
17. COMMENT: The Staff inquired as to whether, post-Transaction, shareholders
would be subject to different levels of service regarding their investment.
RESPONSE: The Registrant confirmed that post-Transaction shareholders would
not be subject to different levels of service regarding their investment.
18. COMMENT: The Staff advised that they may have further comments regarding
the taxable nature of the Transaction.
RESPONSE: The Registrant acknowledged the Staff's comment.
19. COMMENT: The Staff advised that any additional solicitation material would
need to be filed via EDGAR.
RESPONSE: The Registrant acknowledged the Staff's comment.
20. COMMENT: The Staff requested that the Registrant confirm its position that
the Transaction may be approved by shareholders through a Proxy Statement
rather than an N-14.
RESPONSE: The Registrant confirms its position that the Transaction may be
approved by shareholders through a Proxy Statement rather than on Form N-14.
See the response provided to Comment #3, additional analysis included in
Section III of Exhibit A attached to this letter, and confirmation of such
position included in the attached Exhibit B.
21. COMMENT: The Staff requested additional information as to the analysis with
respect to the determination that each Fund's organizational documents
permits voting of this reorganization by only certain shareholders of the
Fund and not the Fund as a whole as well as that voting by certain share
classes of a reorganization that involves the entire Fund is compliant with
Section 18(i) of the Investment Company Act of 1940, as amended, and Rule
18f-2 thereunder.
RESPONSE: The Registrant believes that its organizational documents permit
consideration of the Transaction by only the Current Share Classes.
Specifically, Section 4.2(e) of the Registrant's Trust Instrument provides,
in relevant part, that "[a]ll shares of all Series and classes thereof shall
vote together as a single class; provided, however, that . . . (ii) as to
any matter which affects the interests of one or more particular Series or
classes thereof, only the holders of shares of the one or more affected
Series or classes shall be entitled to vote, and each such Series or class
shall vote as a separate class."
While the Registrant continues to believes that voting on the Transaction by
only certain share classes (i.e., the Current Share Classes) rather than all
Fund shareholders is permitted under the Registrant's organizational
documents and is compliant with Section 18(i) and Rule 18f-2 (as discussed
further in Exhibit B), as requested by the Staff, the
Registrant has revised the Proxy Statement such that approval of the
Transaction is a fund-wide, rather than a class-level, vote for purposes of
obtaining a "1940 Act majority vote."
22. COMMENT: The Staff indicated its position that the Registrant must be
comfortable with its analysis under Rule 145 that approval of the
Transaction may be done through a Proxy Statement rather than an N-14 and
that the Staff does not necessarily support that position.
RESPONSE: The Registrant acknowledges the Staff's position and reiterates
its position that the Transaction may, in accordance with applicable law and
guidance from SEC no-action letters, be approved by shareholders through a
Proxy Statement rather than an N-14.
23. COMMENT: The Staff indicated its position that approval of the Transaction
requires a fund-wide, rather than class level vote and therefore requested
that the Investor Shares participate in the vote.
RESPONSE: The Registrant has revised the Proxy Statement to incorporate the
Investor Share Class and has changed the vote from a share class vote to a
Fund vote. However, as discussed, since the Transaction was being submitted
for shareholder approval rather than falling under Rule 17a-8 under the 1940
Act in order to satisfy regulations of the Internal Revenue Service
regarding the tax consequences (as this Transaction otherwise complied with
the conditions under Rule 17a-8), in order to proceed with the Transaction
without incurring potential adverse tax implications for the Current Funds
or holders of a Current Share Class, the Transaction will be contingent upon
approval of the majority of holders of each Current Share class.
24. COMMENT: The Staff requested clarification with respect to the Registrant's
ability to remove the voluntary fee waiver noted in the Proxy Statement with
respect to Investor Shares.
RESPONSE: The Registrant has added clarifying language to the Proxy
Statement reflecting the Registrant's ability to change or remove such
voluntary waiver at any time at its discretion.
The Registrant acknowledges responsibility for the adequacy and accuracy of the
disclosure in the definitive proxy statement filed on Schedule 14A. In addition,
the Registrant acknowledges that Staff comments, or changes to disclosure in
response to Staff comments, in the preliminary proxy statement filed October 20,
2006 on Schedule 14A and amended preliminary proxy statement filed on December
15, 2006, each reviewed by the Staff, do not foreclose the Commission from
taking any action with respect to the filings, and the Registrant may not assert
Staff comments as a defense in any proceeding initiated by the Commission or any
person under the federal securities laws of the United States.
If you have any concerns regarding the above responses, please call me at (303)
394-6459. Thank you for your assistance in this matter.
Regards,
/s/ Stephanie Grauerholz-Lofton
Stephanie Grauerholz-Lofton
Vice-President & Associate Counsel
cc: Gregory P. Dulski
Richard C. Noyes
Donna L. Brungardt
Cindy A. Antonson
EXHIBIT A
MEMORANDUM
To: Larry Greene, Division of Investment Management of the U.S. Securities
and Exchange Commission
From: Stephanie Grauerholz-Lofton, Assistant Vice-President & Associate
Counsel Gregory Dulski, Associate Counsel, each of Janus Capital
Management LLC ("Janus")
Date: November 2, 2006
Re: Janus Money Market Fund Proxy Structure Analysis
--------------------------------------------------------------------------------
As discussed on our call today, November 2, 2006, the following
summarizes (i) the two-step process of the reorganization structure of the
1999/2000 spin-off of the Retirement Shares class of each then existing series
of Janus Aspen Series ("JAS"), a Delaware statutory trust, to create
corresponding series of Janus Adviser Series ("JAD"), a Delaware statutory
trust, and (ii) the determination to file using Schedule 14A as opposed to Form
N-14, each discussed with and reviewed by the staff ("Staff") of the Securities
and Exchange Commission ("SEC") at that time. Members of the Staff involved in
those discussions included Nadya Roytblat, then Branch Chief in the Applications
Office, and Richard Pfordte, Branch Chief. The JAS spin-off of 2000 is referred
to in this memo as the "Precedent Transaction." In addition, Janus sought and
obtained a private letter ruling from the Internal Revenue Service ("IRS") in
connection with the Precedent Transaction whereby the IRS concluded that, under
Section 852(b)(6) of the Internal Revenue Code, a fund will recognize neither
gain nor loss upon the distribution of shares of the new fund to its
shareholders in exchange for retirement shares pursuant to the transaction.
As discussed with you by telephone on October 31, 2006, in consultation
with our outside counsel, we believe that the Precedent Transaction is
substantially similar to the Proposed Transaction described in the preliminary
proxy statement filed on October 20, 2006, and therefore, the same analysis
applies. The "Proposed Transaction" referred to in this memo is the spin-off of
Institutional Shares and Service Shares of each of Janus Money Market Fund and
Janus Government Money Market Fund of Janus Investment Fund ("JIF"), a
Massachusetts business trust, into corresponding Institutional Shares and
Service Shares of newly created series in JAD, namely Janus Institutional Money
Market Fund and Janus Institutional Government Money Market Fund, respectively.
The Proposed Transaction has been structured in accordance with the structure of
the Precedent Transaction.
I. TWO-STEP STRUCTURE
A. Precedent Transaction
The Precedent Transaction involved the following two steps to occur on
the effective date of the reorganization:
1. Redesignation. JAS designated the Retirement Shares class of each
series as a separate series rather than just a separate class.
Each then existing series allocated to the corresponding
newly-designated series a portion of its assets having a value
equal to the aggregate net asset value of all issued and
outstanding shares of the then existing Retirement Shares class.
2. Transfer of Assets and Shares. Each newly-designated Retirement
Shares series of JAS transferred all of its assets to the
corresponding new JAD fund. In exchange, each new JAD fund
delivered to the corresponding Retirement Shares series new fund
shares with a value equal to the value of the assets allocated to
the Retirement Shares.
After these two steps, each Retirement Shares series distributed to
shareholders of record shares of the corresponding new fund, and all issued and
outstanding Retirement Shares were canceled.
As discussed with and agreed to by the Staff in 1999, step 1 was
designed to satisfy the requirements of Rule 17a-7 under the Investment Company
Act of 1940, as amended (the "1940 Act") and step 2 was designed to satisfy the
requirements of Rule 17a-8 under the 1940 Act with the overall two-step approach
supporting the position that no Section 17 application was required (as
confirmed by Ms. Roytblat by telephone with our outside counsel on October 25,
1999).
B. Proposed Transaction
The Proposed Transaction is structured to follow the same two step
approach of the Precedent Transaction previously discussed with the Staff:
1. Redesignation. JIF, the current Trust, will designate the
Institutional Shares and the Service Shares of Janus Money Market
Fund as separate classes of shares in a separate series. JIF will
also designate the Institutional Shares and Service Shares of
Janus Government Money Market Fund as separate classes of shares
of a separate series. As a part of this redesignation, Janus Money
Market Fund and Janus Government Money Market Fund in JIF will
allocate to the corresponding newly-designated Janus Money Market
Fund and Janus Government Money Market Fund, respectively, a
portion of its assets having a value equal to the aggregate net
asset value of all issued and outstanding shares of the then
existing Institutional Shares class and Service Shares class.
2. Transfer of Assets and Shares. Each newly-designated Janus Money
Market Fund and Janus Government Money Market Fund in JIF, the
current Trust, will then
transfer all of its assets to the corresponding new JAD fund:
Janus Institutional Money Market Fund and Janus Institutional
Government Money Market Fund, respectively. In exchange, each new
JAD fund, Janus Institutional Money Market Fund and Janus
Institutional Government Money Market Fund, will deliver to the
corresponding Institutional Shares and Service Shares of JIF new
fund shares with a value equal to the value of the assets
allocated to such Institutional Shares and Service Shares.
After these two steps, Janus Money Market Fund and Janus Government
Money Market Fund will distribute to shareholders of record of Institutional
Shares and Service Shares, corresponding shares of Janus Institutional Money
Market Fund and Janus Institutional Government Money Market Fund, respectively,
and all issued and outstanding Institutional Shares and Service Shares of Janus
Money Market Fund and Janus Government Money Market Fund will be canceled. For
your reference, a side-by-side comparison of the Precedent Transaction and
Proposed Transaction is provided as an Appendix at the end of the memo.
II. SECTION 17 ANALYSIS
A. Rule 17a-7
In making its determination that the first step of the Precedent
Transaction did not fall under Section 17, the Staff agreed that if the
transferred assets were valued in accordance with Rule 17a-7, no Section 17
application would be required. Moreover, the Staff agreed that Janus could rely
on a series of no-action letters that permit one fund to exchange its assets for
the shares of another fund provided all of the requirements of Rule 17a-7 are
satisfied (other than the requirement that the assets be exchanged for cash).1
Rule 17a-7 and the no-action letters include the following requirements:
1. The securities sold must be valued in accordance with the selling
fund's standard valuation methods and must be consistent with the
valuation requirements of Rule 17a-7(b).
2. The transaction must be consistent with the policy of each fund.
3. No brokerage commission, fee (except for customary transfer fee), or
other remuneration may be paid in connection with the transaction.
4. The boards of the purchasing and selling funds must comply with the
requirements of Rule 17a-7(e), which require the boards to adopt
procedures and approve the transactions.
5. Each fund must maintain records in accordance with Rule 17a-7(f).
-----------
1 See, e.g., DFA Investment Trust Co., 1996 SEC No-Act Lexis 533 (March 21,
1996) and 1995 SEC No-Act Lexis 756 (Oct. 17, 1995); Federated Investors,
1994 SEC No-Act Lexis 464 (April 21, 1994); First National Bank of Chicago,
1992 SEC No-Act Lexis 968 (Sept. 22, 1992).
6. The two funds must be affiliated persons of one another (under the
Section 17 affiliation rules) solely by reason of having a common
investment adviser, common directors and/or common officers.
The Precedent Transaction complied with each of the requirements set forth above
and the Proposed Transaction is also expected to comply with each of these
requirements.
B. Rule 17a-8
The Staff also agreed that Janus could rely on Rule 17a-8 for the
second step of the Precedent Transaction -- the transfer of assets and shares
between the Retirement Shares series and the new funds. Rule 17a-8 imposes the
following requirements:
1. Rule 17a-8 is available only for funds that are affiliated solely by
reason of having a common investment adviser, common directors and/or
common officers.
2. The board of each fund, including a majority of independent trustees,
must determine: (1) that participation in the transaction is in the
best interest of the fund, and (2) that the interest of existing
shareholders will not be diluted as a result of its affecting the
transaction.
3. The board findings, and the basis upon which the finding s were made,
must be recorded fully in the minute books of each fund.
The Precedent Transaction complied with each of the 17a-8 conditions set forth
above and the Proposed Transaction has also satisfied the 17a-8 conditions set
forth above.
III. PROXY STATEMENT V. N-14
Discussions with the Staff surrounding the Precedent Transaction
focused on whether a proxy statement or N-14 would be required. The Staff agreed
that a proxy statement filing on Schedule 14A could be used in lieu of filing on
Form N-14 primarily because the additional disclosure requirements in an N-14
were not relevant to a spin-off (e.g. differences between the funds, such as
objective, strategy, adviser and fees, all of which were remaining the same).
Janus determined, and the Staff agreed, that the no-action letters relating to
fund re-domestications (i.e., changing from a Maryland corporation to a Delaware
trust), where a proxy statement was used instead of an N-14, was also
appropriate precedent.
The same analysis applies to the Proposed Transaction. The investment
objectives, strategies, policies, restrictions and investment adviser of the
existing Janus Money Market Fund and Janus Government Money Market Fund are
identical to that of the corresponding new series of JAD. In addition, the fee
structure of the Institutional Shares and Service Shares of Janus Money Market
Fund and Janus Government Money Market Fund is also designed to be the same as
that of Institutional Shares and Service Shares of the new Janus Institutional
Money Market Fund and Janus Institutional Government Money Market Fund,
respectively. Therefore, Janus
applied the same analysis to the Proposed Transaction that was discussed with
the Staff in connection with the Precedent Transaction and file a proxy
statement on Schedule 14A rather than on Form N-14.
APPENDIX
Side-By-Side Comparison of Precedent Transaction & Proposed Transaction
<Table>
<Caption>
--------------------- ----------------------------------------------- ---------------------------------------------
Precedent Transaction Proposed Transaction
--------------------- ----------------------------------------------- ---------------------------------------------
Step 1: JAS designated the Retirement Shares class of JIF will designate Institutional Shares and
Redesignation each then current fund as a separate series Service Shares classes of each of Janus
rather than just a separate class. Each Money Market Fund and Janus Government
current fund allocated to the corresponding Money Market Fund (the "Funds") as
newly-designated Retirement Shares series in separate share classes of separate series
JAS a portion of its assets having a value of JIF (each, a "Transition Series"). Each
equal to the aggregate net asset value of all Fund will allocate to its corresponding
issued and outstanding shares of the Transition Series a portion of its assets
Retirement Shares class. having a value equal to the aggregate net
asset value of all issued and outstanding
shares of the Institutional and Service
Shares Classes.
--------------------- ----------------------------------------------- ---------------------------------------------
Step 2: Each newly-designated Retirement Shares Each Transition Series will then transfer
Transfer of series then transferred all of its assets to all of its assets to the corresponding
Assets & the corresponding new Fund of JAD. In share classes of the new JAD funds, more
Shares exchange, each new JAD Fund delivered to the specifically, Janus Institutional Money
corresponding Retirement Shares series new Market Fund and Janus Institutional
Fund shares with a value equal to the value Government Money Market Fund (the "New
of the assets allocated to the Retirement Funds"). In exchange, each New Fund will
Shares. deliver to the corresponding Transition
Series New Fund shares with a value equal to
the value of the assets allocated to the
Institutional Shares and Service shares
classes of the Transition Series.
--------------------- ----------------------------------------------- ---------------------------------------------
</Table>
EXHIBIT B
[on Goodwin Procter LLP letterhead]
November 28, 2006
U.S. Securities & Exchange Commission
100 F Street, NE
Washington, DC 20549
Attention: Richard Pfordte, Esquire
Dear Mr. Pfordte:
We refer to the preliminary proxy statement filed with the Commission on October
20, 2006 by Janus Investment Fund, which proxy statement is designed to seek the
approval of an Agreement and Plan of Reorganization from the shareholders of the
Institutional Shares and Service Shares of Janus Money Market Fund and Janus
Government Money Market Fund. This letter is being furnished to you in
accordance with our discussion with you and your colleague, Mr. Green, on
November 17, 2006 and your subsequent discussions with representatives of Janus
Capital Management.
In accordance with your request, we hereby confirm that it is our view that the
transactions described in the above-referenced preliminary proxy statement are
within the scope of Rule 145(a)(2) under the Securities Act of 1933, as amended,
as it has been interpreted by the Staff. We further confirm that under the
Amended and Restated Agreement and Declaration of Trust of Janus Investment
Fund, as currently in effect, no vote of Investor Shares of Janus Money Market
Fund or Janus Government Money Market Fund is required with respect to the
above-referenced Agreement and Plan of Reorganization.
We understand that the Staff has also asked for an explanation of why no vote of
Investor Shares of Janus Money Market Fund and Janus Government Money Market
Fund is required pursuant to Section 18(i) of the Investment Company Act of
1940, as amended (the "1940 Act"), or Rule 18f-2 thereunder.
Section 18(i) provides, in relevant part that, "every share of stock hereafter
issued by a registered management company . . . shall be a voting stock and have
equal voting rights with every other outstanding voting stock." However, in
accordance with Rule 18f-3 under the 1940 Act, a registered open-end fund may
issue more than one class of voting stock, notwithstanding sections 18(f)(1) and
18(i) of the 1940 Act. We respectfully submit that the voting arrangements
contemplated by the Agreement and Plan of Reorganization are consistent with
subsection (2)(a) of Rule 18f-3, which requires that each class "shall have
exclusive voting rights on any matter submitted to shareholders that relates
solely to its arrangement."
Rule 18f-2 provides, in relevant part that "a series company is a registered
open-end investment company which, in accordance with the provisions of section
18(f)(2) of the Act, issues two or more classes or series of preferred or
special stock each of which is preferred over all other classes or series in
respect of assets specifically allocated to that class or series. Any matter
required to be submitted . . . to the holders of the outstanding voting
securities of a series company shall not be deemed to have been effectively
acted upon unless approved by the holders of a majority of the outstanding
voting securities of each class or series of stock affected by such matter."
Subsection (b) provides "[f]or the purposes of paragraph (a) of this Rule 18f-2,
a class or series of stock will be deemed to be affected by such a matter,
unless: . . . (2) the matter does not affect any interest of such class or
series."
It is not clear that Rule 18f-2 is relevant in determining the voting rights of
the Investor Shares of Janus Money Market Fund or Janus Government Money Market
Fund.1 Nonetheless, assuming for purposes of this letter that the phrase "class
or series" should be given its broadest meaning, the question would be whether
the Investor Shares of each fund are a class of stock "affected" by the proposed
Reorganizations.
The proposed Reorganizations will not result in any change in the investment
program or contractual arrangements of Janus Money Market Fund or Janus
Government Money Market Fund or the rights or privileges of the holders of
Investor Shares. Indeed, while the current Funds will have a smaller asset size
immediately following the transaction, management does not expect any increase
in pro forma operating expense ratios borne by the holders of Investor Shares.2
Accordingly we think it is clear that the holders Investor Shares are not
"affected" by the Reorganization.
-----------
1 Rule 18f-2 predates the advent of modern multi-class capital structures.
Rule 18f-2 was adopted in 1972 to define the circumstances under which the
shareholders of a fund that was operating within a "series company" would have
a separate vote on a particular matter, rather than voting collectively with
the shareholders of all other funds within the series company. See Investment
Company Act Release No. 7276 (August 8, 1972). Although, on its face,
Rule 18f-2 uses the phrase "class or series of stock," that phrase is used to
refer to "classes or series of preferred or special stock each of which is
preferred over all other classes or series in respect of assets specifically
allocated to that class or series," i.e. a "fund," "portfolio" or "series," in
modern parlance.
2 Given the favorable facts present here, the Staff need not reach the question
of whether Investor Class shareholders would be "affected" by the
Reorganization solely because of an increase in expense ratios. We note
however that it is quite common for the assets of one or more funds to leave a
series company via a merger or other reorganization and we do not believe that
the Commission or the Staff has ever interpreted Rule 17f-2 to require the
approval of shareholders of each remaining fund, even where the decrease in
total assets will have an adverse impact on the expense ratios of the
remaining funds.
For the foregoing reason we respectfully submit that no vote of Investor Shares
is required pursuant to Section 18(i) of the 1940 Act or Rule 18f-2 thereunder.
Sincerely yours,
/s/ Geoffrey R.T. Kenyon
Geoffrey R.T. Kenyon
cc: Larry Green, Esquire
Stephanie Grauerholz-Lofton, Esquire
Gregory P. Dulski, Esquire
Christopher E. Palmer, Esquire
GRK/cbc