OMB APPROVAL
OMB Number: 3235-0570
Expires: October 31, 2006
Estimated average burden
hours per response: 19.3
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: 2/28
Date of reporting period: For the six months ended 08/31/04
Item 1 - Reports to Shareholders
- -------------------
----------------------
2004 Semiannual Report
----------------------
Janus Adviser
- --------------------------------------------------------------------------------
Focused Value Fund
International Equity Fund
[LOGO] JANUS CAPITAL
Group
Table of Contents
Janus Adviser
Portfolio Managers' Commentaries and Schedules of Investments
Focused Value Fund .............................................. 2
International Equity Fund ....................................... 6
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
Explanations of Charts, Tables and Financial Statements .............. 27
Useful Information About Your Fund Report
Portfolio Manager Commentaries
The portfolio manager commentaries in this report include valuable insight from
the fund managers as well as statistical information to help you understand how
your fund's performance and characteristics stack up against those of comparable
indices.
Please keep in mind that the opinions expressed by the portfolio managers in
their commentaries are just that: opinions. They are a reflection of their best
judgment at the time this report was compiled, which was August 31, 2004. As the
investing environment changes, so could their opinions. These views are unique
to each manager and aren't necessarily shared by their fellow employees or by
Janus in general.
Fund Expenses
We believe it's important for our shareholders to have a clear understanding of
fund expenses and the impact they have on investment return.
The following is important information regarding each Fund's Expense Example,
which appears in each Fund's Portfolio Manager Commentary within this Semiannual
Report. Please refer to this information when reviewing the Expense Example for
each Fund.
Example
As a shareholder of a fund, you incur two types of costs: (1) transaction costs,
including sales charges (loads) on purchases (applicable to Class A and Class C
Shares); deferred sales charges (applicable to Class C Shares); redemption fees
applicable to Investor Shares and Class I Shares (and any related exchange
fees); and (2) ongoing costs, including management fees; distribution and
shareholder servicing (12b-1) fees; administrative services fees (applicable to
Investor Shares and Class I Shares), and other Fund expenses. The example is
intended to help you understand your ongoing costs (in dollars) of investing in
the Fund and to compare these costs with the ongoing costs of investing in other
mutual funds. The example is based on an investment of $1,000 invested at the
beginning of the period and held for the entire period from March 1, 2004 to
August 31, 2004.
Actual Expenses
The first line of the table in the example provides information about actual
account values and actual expenses. You may use the information in this line,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the first line under the heading entitled "Expenses Paid During the
Period" to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of the tables in the examples provides information about
hypothetical account values and hypothetical expenses based on the Fund's actual
expense ratio and an assumed rate of return of 5% per year before expenses,
which is not the Fund's actual return. The hypothetical account values and
expenses may not be used to estimate the actual ending account balance or
expenses you paid for the period. You may use this information to compare the
ongoing costs of investing in the Fund and other funds. To do so, compare this
5% hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other funds.
Janus Capital has contractually agreed to waive each Fund's total operating
expenses (excluding distribution and shareholder servicing fees, brokerage
commissions, interest, taxes and extraordinary expenses) to certain limits until
at least September 2005. Expenses in the examples reflect application of these
waivers. Had the waivers not been in effect, your expenses would have been
higher. More information regarding the waivers is available in the Funds'
Prospectuses.
Please note that the expenses shown in the tables are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or redemption fees (where applicable). These fees are fully
described in the prospectus. Therefore, the second line of the tables is useful
in comparing ongoing costs only, and will not help you determine the relative
total costs of owning different funds. In addition, if these transactional costs
were included, your costs would have been higher.
Janus Adviser August 31, 2004 1
Sub-advised by Vontobel
Focused Value Fund (unaudited) Asset Management, Inc.
[PHOTO]
Ed Walczak
portfolio manager
================================================================================
Fund Strategy
Janus Focused Value Fund is a concentrated value fund that seeks to provide
strong absolute returns with below-market risk through complete market cycles.
The Fund invests in companies believed to be well-managed, profitable and with
proven operating histories in understandable, predictable businesses that are
attractively priced.
================================================================================
Performance Overview
After making headway in late 2003 and early 2004, equity markets became
unsettled during the period due to signs of weakness in the economy and concerns
about the sustainability of a recovery. Against this backdrop, the Fund lost
ground. For the six months ended August 31, 2004, the Fund declined 2.01% for
its Investor Shares (please see the chart on page 4 for additional Share Class
performance). This compares to the 2.74% loss posted by the S&P 500(R) Index,
the Fund's benchmark.
The discrepancy in performance between the Fund and the Index is due in part to
our select holdings in the healthcare equipment and services industry, which
lagged the performance of healthcare equipment and services stocks held in the
Index. Aiding our performance, however, was a substantial weighting in the
banking industry. We had more than three times the exposure to this sector than
the S&P 500(R) Index and therefore gained ground against the Index when this
group turned in solid returns.
Strategy in This Environment
Our focus remains on companies with long operating histories, stable growth
trends, strong fundamentals and easy-to-understand business strategies. We rely
on in-house research to narrow our investable universe to approximately 100
companies, and we invest in these businesses only when we see stocks that we
feel are priced right.
It's worth noting that, as of August 31, 2004, approximately 30% of our
investable universe consisted of financial stocks, based on market
capitalization. Most of these financials have enjoyed high return on equities
(ROEs) and return on assets (ROAs) over the years and fairly good
earnings-per-share growth rates. In short, they meet our quality criteria. We
believe financials may be more prone to being mispriced on a regular basis than
other groups in the market as they are more complicated to analyze due to the
fact that their businesses may involve estimations of reserves, the use of
derivatives, valuation of mortgage servicing rights, hedging, etc. These
complexities are often not well understood by analysts and are miscommunicated
by the press. Also, there are a number of macro investors who attempt to
forecast interest rates and assume that increases in interest rates must be bad
for the businesses of financial companies. We have learned never to make
investment decisions based on a top-down point of view of where rates might be
going or how strongly the economy might be growing. We also disagree with the
frequent knee-jerk tendency of the market to blindly sell all financial stocks
just because interest rates are going up.
Top 10 Equity Holdings - (% of Net Assets)
- --------------------------------------------------------------------------------
August 31, 2004 February 29, 2004
Berkshire Hathaway, Inc. - Class A 9.8% 9.2%
Fannie Mae 8.7% 6.1%
Freddie Mac 8.2% 6.6%
American International Group, Inc. 4.8% 4.4%
Fifth Third Bancorp 4.7% 3.2%
Cincinnati Financial Corp. 4.7% 5.6%
Markel Corp. 3.8% 3.5%
Chubb Corp. 3.7% 2.9%
TJX Companies, Inc. 3.6% 3.8%
Wells Fargo & Co. 3.2% 3.2%
Portfolio Composition
As of August 31, 2004, 27 stocks were held in the Fund, representing 90.3% of
net assets. The remaining 9.7% was net cash, indicating the relative scarcity of
opportunities that meet our investment criteria and our cautious market outlook.
Meanwhile, the Fund's top 10 equity holdings accounted for 55.2% of total net
assets.
2 Janus Adviser August 31, 2004
(unaudited)
Strong performers included mortgage and motorcycle manufacturing companies
A standout during the period was mortgage lender Fannie Mae. Our research shows
that Fannie Mae's franchise value will not be significantly impacted by
plausible increases in interest rates. The company's business performed well
during periods of rising rates in 1994 and 1999 and the historic refinance
period that ended last year. Over the past decade, despite interest-rate
volatility, the company has generated returns on equity in excess of 20%. Over
the past five years, the fair value of Fannie Mae's common equity has compounded
at 15% per year. Incidentally, we believe the best gauge of Fannie Mae's
long-term operating performance is the growth in the fair value of equity,
adjusted for dividends and share repurchases. This measure is more
representative of the company's underlying economic performance than the
reported Generally Accepted Accounting Principles ("GAAP") results, which are
distorted by the partial marking-to-market of select financial instruments.
Significant Areas of Investment - Fund vs. Index (% of Net Assets)
- --------------------------------------------------------------------------------
[The following table was depicted as a bar chart in the printed material.]
Focused Value Fund S&P 500(R) Index
------------------ ----------------
Finance - Mortgage Loan Banker 16.9% 1.3%
Multi-Line Insurance 10.7% 3.0%
Reinsurance 9.8%
Medical - Hospitals 8.7% 0.3%
Super-Regional Banks 7.9% 5.0%
Property and Casualty Insurance 7.5% 0.8%
Food - Diversified 4.0% 0.9%
Retail - Discount 3.6% 3.0%
Beverages - Wine and Spirits 2.8% 0.1%
Finance - Credit Card 2.7% 1.1%
Another strong performer was Harley-Davidson Inc., a manufacturer of motorcycles
and related apparel. After teetering on the brink of insolvency 20 years ago,
Harley long ago stabilized its business. In fact, the company has built one of
the most enviable records of profitable growth of the last 15 years. We believe
the powerful brand position of its motorcycles is the linchpin of Harley's
success. During the last several years, however, the growth in the number of
motorcycles the company produced has slowed, leading critics to claim that the
company is broken. On the contrary, we believe Harley is undergoing a natural
transition in its business. In 1999, production grew 17% compared to the prior
year. In 2004, the company expects 8% production growth. Today, Harley earns
very attractive returns on the capital provided by shareholders. Except for its
finance subsidiary, the company has almost no debt and produces prodigious
amounts of free cash flow. We applaud its recent use of the cash flow for share
repurchases. And most importantly, we believe Harley-Davidson still has one of
the strongest consumer brands in the world.
Weak performers included hospital operators and insurance companies
Hospital management company Universal Health Services was among the Fund's
largest detractors. The company reported weak first-quarter results due to
rising bad debt expense, weak patient admission, increased competition in select
markets, and the ongoing secular negative of physicians moving lucrative
high-margin surgeries to competing facilities where the surgeon has an equity
stake. Our attraction to Universal Health Services is its excellent long-term
track record and the fact that it has hospitals situated in rapidly growing
markets. Therefore, while continuing to seek more clarity on the competitive
issue, we used weakness in the stock to add to our position.
Although insurance was another weak area for the Fund, the industry's persistent
need to repair its historically frayed balance sheets leads us to believe it's
premature to worry about a return to soft markets just yet. While we will
probably see only modest general price increases in most lines of business in
the next few years, we believe earnings will continue to rise and book values
will continue to grow. We have a lot of confidence in the management of our
three largest insurance holdings, AIG, Chubb and Cincinnati Financial, and
believe their businesses will do fine in the near-term and that their stocks
remain undervalued.
Investment Strategy and Outlook
As we head into the second half of the Fund's fiscal year, we continue to hold a
relatively high cash position, not as a market timing call, but rather because
we believe that, currently, there are few investment opportunities that meet our
high standards. Until they do, we'll maintain our patience and discipline and
only invest our shareholders' money if we find businesses that we believe are
truly worthy and inexpensively priced.
Thank you for your investment.
Janus Adviser August 31, 2004 3
Focused Value Fund (unaudited)
================================================================================
Initial investment of $10,000
[The following table was depicted as a mountain chart in the printed material.]
Focused Value Fund - Class A S&P 500(R)
Shares (at MOP) Index
---------------------------- ----------
3/30/1990* $ 9,425 $10,000
3/31/1990 $ 9,425 $10,000
4/30/1990 $ 9,208 $ 9,751
5/31/1990 $10,057 $10,701
6/30/1990 $ 9,943 $10,629
7/31/1990 $ 9,576 $10,595
8/31/1990 $ 8,558 $ 9,637
9/30/1990 $ 7,776 $ 9,168
10/31/1990 $ 7,446 $ 9,129
11/30/1990 $ 8,030 $ 9,719
12/31/1990 $ 8,492 $ 9,990
1/31/1991 $ 9,268 $10,425
2/28/1991 $ 9,949 $11,171
3/31/1991 $10,351 $11,441
4/30/1991 $10,457 $11,468
5/31/1991 $11,109 $11,963
6/30/1991 $10,553 $11,415
7/31/1991 $10,946 $11,947
8/31/1991 $11,348 $12,230
9/30/1991 $11,300 $12,025
10/31/1991 $11,319 $12,187
11/30/1991 $10,524 $11,696
12/31/1991 $11,737 $13,034
1/31/1992 $11,933 $12,791
2/29/1992 $12,181 $12,956
3/31/1992 $11,985 $12,704
4/30/1992 $12,254 $13,077
5/31/1992 $12,316 $13,141
6/30/1992 $12,171 $12,946
7/31/1992 $12,576 $13,475
8/31/1992 $12,233 $13,199
9/30/1992 $12,337 $13,354
10/31/1992 $12,535 $13,400
11/30/1992 $13,221 $13,857
12/31/1992 $13,612 $14,027
1/31/1993 $13,816 $14,144
2/28/1993 $13,702 $14,337
3/31/1993 $13,952 $14,639
4/30/1993 $13,634 $14,285
5/31/1993 $13,793 $14,668
6/30/1993 $13,975 $14,711
7/31/1993 $13,941 $14,651
8/31/1993 $14,292 $15,207
9/30/1993 $14,133 $15,091
10/31/1993 $14,258 $15,403
11/30/1993 $14,156 $15,256
12/31/1993 $14,430 $15,440
1/31/1994 $14,912 $15,965
2/28/1994 $14,597 $15,532
3/31/1994 $14,043 $14,855
4/30/1994 $14,685 $15,045
5/31/1994 $15,152 $15,292
6/30/1994 $14,509 $14,917
7/31/1994 $14,723 $15,407
8/31/1994 $15,240 $16,039
9/30/1994 $14,749 $15,647
10/31/1994 $14,774 $15,998
11/30/1994 $14,282 $15,416
12/31/1994 $14,452 $15,644
1/31/1995 $15,227 $16,050
2/28/1995 $15,790 $16,676
3/31/1995 $16,029 $17,168
4/30/1995 $16,424 $17,673
5/31/1995 $17,086 $18,380
6/30/1995 $17,325 $18,806
7/31/1995 $17,621 $19,430
8/31/1995 $18,001 $19,479
9/30/1995 $18,762 $20,301
10/31/1995 $18,790 $20,228
11/30/1995 $19,847 $21,116
12/31/1995 $20,285 $21,523
1/31/1996 $21,096 $22,256
2/29/1996 $21,218 $22,462
3/31/1996 $21,234 $22,678
4/30/1996 $21,218 $23,013
5/31/1996 $21,433 $23,606
6/30/1996 $21,846 $23,696
7/31/1996 $21,280 $22,649
8/31/1996 $21,770 $23,127
9/30/1996 $22,811 $24,429
10/31/1996 $23,530 $25,103
11/30/1996 $24,678 $27,000
12/31/1996 $24,599 $26,465
1/31/1997 $25,367 $28,118
2/28/1997 $25,706 $28,339
3/31/1997 $25,385 $27,175
4/30/1997 $26,491 $28,797
5/31/1997 $27,188 $30,550
6/30/1997 $28,098 $31,919
7/31/1997 $29,419 $34,458
8/31/1997 $28,402 $32,528
9/30/1997 $29,972 $34,309
10/31/1997 $30,454 $33,163
11/30/1997 $31,740 $34,699
12/31/1997 $33,040 $35,295
1/31/1998 $33,140 $35,685
2/28/1998 $34,621 $38,259
3/31/1998 $35,281 $40,218
4/30/1998 $36,001 $40,622
5/31/1998 $35,601 $39,924
6/30/1998 $36,642 $41,546
7/31/1998 $35,741 $41,104
8/31/1998 $31,679 $35,161
9/30/1998 $32,139 $37,413
10/31/1998 $34,440 $40,457
11/30/1998 $36,811 $42,909
12/31/1998 $37,898 $45,381
1/31/1999 $36,516 $47,279
2/28/1999 $34,885 $45,809
3/31/1999 $35,157 $47,642
4/30/1999 $37,309 $49,487
5/31/1999 $37,830 $48,319
6/30/1999 $38,261 $51,000
7/31/1999 $37,853 $49,408
8/31/1999 $35,316 $49,163
9/30/1999 $32,416 $47,816
10/31/1999 $34,228 $50,841
11/30/1999 $32,817 $51,875
12/31/1999 $32,566 $54,930
1/31/2000 $31,128 $52,170
2/29/2000 $27,203 $51,183
3/31/2000 $31,105 $56,190
4/30/2000 $31,881 $54,499
5/31/2000 $32,634 $53,381
6/30/2000 $31,219 $54,697
7/31/2000 $32,223 $53,842
8/31/2000 $33,319 $57,186
9/30/2000 $36,605 $54,167
10/31/2000 $39,184 $53,938
11/30/2000 $39,709 $49,686
12/31/2000 $44,022 $49,929
1/31/2001 $41,283 $51,700
2/28/2001 $42,356 $46,986
3/31/2001 $42,082 $44,010
4/30/2001 $43,086 $47,430
5/31/2001 $44,798 $47,748
6/30/2001 $45,482 $46,585
7/31/2001 $44,889 $46,127
8/31/2001 $43,269 $43,239
9/30/2001 $43,200 $39,748
10/31/2001 $43,451 $40,505
11/30/2001 $44,113 $43,613
12/31/2001 $45,333 $43,995
1/31/2002 $45,927 $43,353
2/28/2002 $47,229 $42,516
3/31/2002 $48,098 $44,116
4/30/2002 $49,629 $41,441
5/31/2002 $48,920 $41,136
6/30/2002 $46,384 $38,206
7/31/2002 $45,516 $35,228
8/31/2002 $46,201 $35,458
9/30/2002 $42,294 $31,605
10/31/2002 $45,310 $34,387
11/30/2002 $45,334 $36,411
12/31/2002 $44,381 $34,272
1/31/2003 $43,334 $33,374
2/28/2003 $41,596 $32,873
3/31/2003 $41,953 $33,192
4/30/2003 $45,786 $35,926
5/31/2003 $48,286 $37,819
6/30/2003 $47,286 $38,302
7/31/2003 $49,358 $38,977
8/31/2003 $50,334 $39,737
9/30/2003 $50,202 $39,315
10/31/2003 $52,439 $41,539
11/30/2003 $53,718 $41,905
12/31/2003 $55,273 $44,102
1/31/2004 $56,945 $44,912
2/29/2004 $57,477 $45,536
3/31/2004 $56,768 $44,849
4/30/2004 $56,261 $44,145
5/31/2004 $56,059 $44,751
6/30/2004 $57,146 $45,621
7/31/2004 $55,797 $44,111
8/31/2004 $56,347 $44,289
Average Annual Total Return - for the periods ended August 31, 2004
- --------------------------------------------------------------------------------
Fiscal One Five Ten Since
Year-to-Date Year Year Year Inception*
- ----------------------------------------------------------------------------------------
Focused Value Fund
- - Investor Shares (2.01)% 11.72% 9.70% 13.74% 13.03%
- ----------------------------------------------------------------------------------------
Focused Value Fund
- - Class I Shares (2.11)% 11.58% 9.57% 13.58% 12.90%
- ----------------------------------------------------------------------------------------
Focused Value Fund
- - Class C Shares at NAV (2.36)% 9.96% 8.94% 12.95% 12.34%
- ----------------------------------------------------------------------------------------
Focused Value Fund
- - Class C Shares at MOP (4.20)% 7.92% 8.72% 12.84% 12.26%
- ----------------------------------------------------------------------------------------
Focused Value Fund
- - Class A Shares at NAV (1.92)% 11.95% 9.79% 13.97% 13.20%
- ----------------------------------------------------------------------------------------
Focused Value Fund
- - Class A Shares at MOP (7.59)% 5.51% 8.50% 13.29% 12.74%
- ----------------------------------------------------------------------------------------
S&P 500(R) Index (2.74)% 11.46% (2.07)% 10.69% 10.87%
Data presented reflects past performance, which is no guarantee of future
results. Investment results and principal value will fluctuate so that shares,
when redeemed, may be worth more or less than their original cost. Due to market
volatility, current performance may be higher or lower than the performance
shown. Call 1-800-525-3713 or visit www.janus.com for current month end
performance.
The performance shown in the graph at Maximum Offering Price ("MOP") reflects
the maximum 5.75% upfront sales charge on Class A Shares but does not include a
1% contingent deferred sales charge that may be imposed on certain redemptions
of Class A Shares purchased without an initial sales charge and redeemed within
12 months of purchase.
The performance in the table includes the maximum 5.75% and 1.00% upfront sales
charge on Class A Shares and Class C Shares, respectively. 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.
Effective September 30, 2004, the 1.00% upfront sales charge on Class C Shares
is eliminated. The performance in the table at Net Asset Value ("NAV") does not
include any applicable sales loads or contingent deferred sales charges.
Performance would have been lower had these charges been taken into account. 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.
* The Fund's inception date - March 30, 1990
================================================================================
Fund Expenses
- --------------------------------------------------------------------------------
The below examples show you the ongoing costs (in dollars) of investing in your
fund and compare these costs with those of other mutual funds. Please refer to
page 3 for a detailed explanation of the information presented in these tables.
Expense Example - Investor Beginning Account Value Ending Account Value Expenses Paid During Period
Shares (3/1/04) (8/31/04) (3/1/04-8/31/04) *
- ------------------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $979.90 $6.24
- ------------------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,018.90 $6.36
- ------------------------------------------------------------------------------------------------------------------------------------
Expense Example - I Shares Beginning Account Value Ending Account Value Expenses Paid During Period
(3/1/04) (8/31/04) (3/1/04-8/31/04) *
- ------------------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $978.90 $6.98
- ------------------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,018.15 $7.12
- ------------------------------------------------------------------------------------------------------------------------------------
Expense Example - C Shares Beginning Account Value Ending Account Value Expenses Paid During Period
(3/1/04) (8/31/04) (3/1/04-8/31/04) *
- ------------------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $976.40 $9.47
- ------------------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,015.63 $9.65
- ------------------------------------------------------------------------------------------------------------------------------------
Expense Example - A Shares Beginning Account Value Ending Account Value Expenses Paid During Period
(3/1/04) (8/31/04) (3/1/04-8/31/04) *
- ------------------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $980.80 $5.74
- ------------------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,019.41 $5.85
- ------------------------------------------------------------------------------------------------------------------------------------
*Expenses are equal to the annualized expense ratio of 1.25% for Investor
Shares, 1.40% for I Shares, 1.90% for C Shares and 1.15% for A Shares,
multiplied by the average account value over the period, multiplied by 184/365
(to reflect the one-half year period). Expenses include the effect of
contractual waivers by Janus Capital Management LLC ("Janus Capital").
- --------------------------------------------------------------------------------
Performance shown does not include networking/omnibus account fees that will be
incurred by Class A and Class C Shares effective September 30, 2004.
See Notes to Schedules of Investments for index definitions. See "Explanations
of Charts, Tables and Financial Statements." See Note 7 in Notes to Financial
Statements.
Returns shown for Focused Value Fund for periods prior to 10/13/03 are derived
from the historical performance of Class A Shares of Vontobel US Value Fund.
Returns are restated based on the Fund's fees and expenses (ignoring any fee and
expense limitations), which are equal to or higher (prior to application of
contractual expense waivers) than those of the Vontobel Fund.
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.
Effective July 6, 2004, US Value Fund changed its name to Focused Value Fund and
eliminated its policy to invest, under normal circumstances, at least 80% of its
net assets in securities of U.S. companies and will instead adopt a policy to
invest, under normal circumstances, at least 65% of its net assets in securities
of U.S. companies, as defined in the prospectus. 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 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.
4 Janus Adviser August 31, 2004
Schedule of Investments (unaudited)
Shares or Principal Amount Market Value
================================================================================
Common Stock - 90.3%
Apparel Manufacturers - 1.4%
30,800 Liz Claiborne, Inc. ..............................$ 1,172,556
Beverages - Wine and Spirits - 2.8%
45,700 Diageo PLC (ADR) ................................. 2,282,715
Fiduciary Banks - 2.6%
47,200 State Street Corp. ............................... 2,130,608
Finance - Credit Card - 2.7%
44,000 American Express Co. ............................. 2,200,880
Finance - Mortgage Loan Banker - 16.9%
95,574 Fannie Mae ....................................... 7,115,484
101,100 Freddie Mac ...................................... 6,785,832
13,901,316
Food - Diversified - 4.0%
20,200 General Mills, Inc. .............................. 954,450
38,600 Nestle S.A. (ADR) ................................ 2,285,120
3,239,570
Food - Retail - 1.0%
41,700 Safeway, Inc.* ................................... 842,340
Instruments - Controls - 1.5%
48,600 Watts Water Technologies, Inc. - Class A ......... 1,237,356
Medical - Hospitals - 8.7%
61,300 HCA, Inc. ........................................ 2,379,053
118,700 Health Management Associates, Inc. - Class A ..... 2,269,544
54,800 Universal Health Services, Inc. - Class B ........ 2,468,740
7,117,337
Motorcycle and Motor Scooter Manufacturing - 2.1%
27,700 Harley-Davidson, Inc. ............................ 1,690,254
Multi-Line Insurance - 10.7%
54,700 American International Group, Inc. ............... 3,896,829
94,867 Cincinnati Financial Corp. ....................... 3,827,883
42,837 Old Republic International Corp. ................. 1,008,811
8,733,523
Property and Casualty Insurance - 7.5%
44,600 Chubb Corp. ...................................... 3,033,246
10,530 Markel Corp.* .................................... 3,094,241
6,127,487
Radio - 0.1%
4,600 Saga Communications, Inc. - Class A* ............. 82,570
Reinsurance - 9.8%
92 Berkshire Hathaway, Inc. - Class A* .............. 8,004,000
Retail - Discount - 3.6%
138,300 TJX Companies, Inc. .............................. 2,926,428
Retail - Jewelry - 1.7%
43,800 Tiffany & Co. .................................... 1,355,610
Savings/Loan/Thrifts - 2.6%
19,800 Golden West Financial Corp. ...................... 2,142,954
Super-Regional Banks - 7.9%
77,700 Fifth Third Bancorp .............................. 3,870,237
45,400 Wells Fargo & Co. ................................ 2,667,250
6,537,487
Textile-Home Furnishings - 2.7%
28,550 Mohawk Industries, Inc.* ......................... 2,196,066
- --------------------------------------------------------------------------------
Total Common Stock (cost $64,625,480) ............................... 73,921,057
- --------------------------------------------------------------------------------
Short-Term U.S. Government Agency - 9.5%
Fannie Mae
$7,800,000 1.48%, 9/1/04 (amortized cost $7,800,000) ...... 7,800,000
- --------------------------------------------------------------------------------
Total Investments (total cost $72,425,480) - 99.8% .................. 81,721,057
- --------------------------------------------------------------------------------
Cash, Receivables and Other Assets, net of Liabilities - 0.2% ....... 173,676
- --------------------------------------------------------------------------------
Net Assets - 100% ...................................................$81,894,733
- --------------------------------------------------------------------------------
Summary of Investments by Country, August 31, 2004
Country Market Value % of Investment Securities
- --------------------------------------------------------------------------------
Switzerland $ 2,285,120 2.8%
United Kingdom 2,282,715 2.8%
United States++ 77,153,222 94.4%
- --------------------------------------------------------------------------------
Total $81,721,057 100.0%
++Includes Short-Term Securities (84.9% excluding Short-Term Securities)
See Notes to Schedules of Investments and Financial Statements
Janus Adviser August 31, 2004 5
Sub-advised by Vontobel
International Equity Fund (unaudited) Asset Management, Inc.
[PHOTO]
Rajiv Jain
portfolio manager
================================================================================
Fund Strategy
Janus International Equity Fund is a diversified fund that invests primarily in
securities located outside the U.S. The Fund invests in companies believed to be
well-managed, profitable and with proven operating histories in understandable,
predictable businesses that are attractively priced.
================================================================================
Performance Overview
After gaining momentum in late 2003 and early 2004, equity markets turned
negative during the summer months, weighed down by high energy prices, fears of
terrorism at high-profile events like the Olympics and slower-than expected
gross domestic product growth in the U.S. These developments created a
challenging environment for investors worldwide, and for the six months ended
August 31, 2004, the Fund declined 1.29% for its Investor Shares (please see the
chart on page 8 for additional Share Class performance). This compares to the
2.06% loss posted by the Morgan Stanley Capital International EAFE(R) Index, the
Fund's benchmark.
The discrepancy in performance between the Fund and the Index is due in part to
select stocks in the banking industry, one of our largest areas of investment
during the period, as well as our lack of exposure to the energy industry,
which, as a whole, performed strongly during the period. Aiding our performance,
however, were several well-chosen stocks in the insurance and food and beverage
sectors. Also contributing to our results was the Fund's limited exposure to the
weaker-performing technology industry, an area that represented a larger part of
the Morgan Stanley Capital International EAFE(R) Index and therefore detracted
from its results.
Strategy in This Environment
As always, we remain focused on our fundamental analysis of individual
businesses rather than on market opinions of their merits or macroeconomic
conditions. This focus resulted in our "better safe than sorry" attitude,
with almost 35-40% of the Fund in consumer staples - one of
the worst-performing sectors in the Index. So how can our conviction remain
unwavering? The simple answer is that we seek long-term sustainable growth.
Sustainability in itself implies high quality, as both the fundamentals of a
business and the quality of management must be exceptional in order for a
business to sustain growth for five-plus years. Additionally, high return on
equity is imperative, as it prevents the need for cash infusion (debt or equity)
to sustain growth. We find value when companies' valuations by the market do
not, in our opinion, correctly reflect the sustainability of the business.
Top 10 Equity Holdings - (% of Net Assets)
- --------------------------------------------------------------------------------
August 31, 2004 February 29, 2004
Anglo Irish Bank Corporation PLC 4.2% 4.5%
Northern Rock PLC 3.9% 4.2%
Tesco PLC 3.9% 3.4%
Diageo PLC 3.5% 4.0%
Enagas 3.2% 2.3%
Nestle S.A. 3.1% 3.4%
British American Tobacco PLC 3.1% 3.0%
Johnston Press PLC 2.8% 2.9%
Macquarie Bank, Ltd. 2.7% 2.7%
Red Electrica de Espana 2.5% 2.3%
Portfolio Composition
As of August 31, 2004, the Fund's 49 holdings were in companies throughout 17
foreign countries, of which 4 were emerging markets, representing 14.5% of the
Fund. Of the remaining 83.1% weighting in international markets, 60.8% were
based in Europe and 20.9% in Asia/Pacific Basin. Meanwhile, the Fund's net cash
position was 2.4% and its top 10 equity holdings accounted for 32.9% of total
net assets.
Strong performers included food and beverage companies as well as tobacco firms
Chocolate manufacturer Lindt & Spruengli performed well on the back of strong
first half results with 12% organic top-line growth, much ahead of the market's
expectations. The company gained market share across the board. Lindt benefited
from its penetration efforts in Europe (France and the UK) as well as expansion
in the U.S.
KT&G (Korean Tobacco and Ginseng) Corp.'s second quarter numbers were above
expectations in terms of sales, up 23.8% year-over-year, and operating income,
up 39.0% year-over-year. However, net income declined by 35.5% year-over-year
due to the conversion of a convertible bond and a one time tax charge. The
excellent top-line performance reflects the strong brand power that KT&G
possesses, and has raised the average selling price through a better mix of
higher-priced products. Operating margins expanded through continued tight cost
control. KT&G's market share remains stable overall but continues to grow on the
premium side of the market. The company has reiterated plans to buy back and
cancel 25% of shares outstanding by 2008. This will be a significant driver of
EPS growth and an efficient way to return excess capital back to shareholders
going forward. The company forecasts that operational performance will be strong
for the fiscal year but net income
6 Janus Adviser August 31, 2004
(unaudited)
and EPS growth will be muted as a result of the two one-time items from this
quarter. Despite this, the company's conservative guidance and planned share
buyback make us very comfortable that the company will be able to grow EPS in
the high single digits.
We believe British American Tobacco has been ticking up, benefiting from its
ongoing share buyback, a modest dividend hike signaling management's confidence
in the company's long-term prospects, the stock's defensiveness, its attractive
valuation, and a high dividend yield.
Imperial Tobacco Group's shares benefited from strong fiscal first half results,
a dividend increase, attractive valuation and a high dividend yield.
Significant Areas of Investment - Fund vs. Index (% of Net Assets)
[The following tables were depicted as bar charts in the printed material.]
International Morgan Stanley Capital
Equity Fund International EAFE(R) Index
------------- ---------------------------
Commercial Banks 14.4% 17.3%
Tobacco 11.3% 0.8%
Food - Retail 7.8% 1.4%
Food - Diversified 4.5% 2.9%
Cosmetics and Toiletries 4.0% 0.6%
Top Countries - (% of Net Assets)
- --------------------------------------------------------------------------------
United Kingdom 31.2%
Australia 12.4%
Spain 7.8%
Japan 7.4%
South Korea 6.4%
Weak performers included select financial holdings and a cosmetic company
State Bank of India's share price was hit with concerns about the impact of
rising interest rates and the inability to benefit from treasury bonds gains
resulting from a declining interest rate environment as it had in the past. In
addition, State Bank of India is expected to be hit by a one time charge
resulting from an industry-wide wage settlement in 2005. We believe the bank
should continue to benefit from the secular growth trend resulting from the
privatization and deregulatory environment in India, thereby growing its loan
book at greater than 10% year-over-year for the next several years while at the
same time reducing the percentage of non-performing loans which will translate
into growth in net interest income. Unfortunately, however, it appears growth in
non-interest income has deteriorated to the extent that it will be difficult for
the bank to grow overall net income for the next several years. For this reason
we are compelled to sell the stock until the environment for non-interest income
stabilizes and no longer detracts from the bank's potential earnings growth.
Northern Rock performed extremely well from an operational standpoint despite
its stock price's weak performance. Total net lending for the first half of 2004
reached a record high increase of 30% on a year-on-year basis, they were able to
increase their market share from 7.8% in December to a current high of 8.4%, and
pre-tax profits were up 14% year-on-year on a like-for-like basis. Earnings per
share was also up by an impressive 11.7% on a year-on-year basis. The share
price weakness stems mostly from financial market worries of a softening UK
residential market as well as more general macro-economic jitters, despite the
fact that the underlying company continues to perform admirably.
Oriflame Cosmetics was admittedly a large disappointment for us this year.
Although Oriflame's operating results for the first half of 2004 were weak, they
were not alone. Avon, their chief competition, delivered results that were quite
discouraging to the market as well. Oriflame was, however, able to deliver
double digit underlying sales growth, net profit growth of 32%, and EPS growth
of 26%. The large majority of Oriflame's growth is now coming from the Russian
market, as they have been unable for the most part to reinvigorate solid growth
in their other traditional markets. This Russian market, however, down
substantially, is most worrying to us as long-term investors. Their growth rate
in what is now their core market, Russia, slowed down substantially in the
second quarter, while Avon was able to massively accelerate their growth over
the same period within the same market. We have become increasingly concerned
that Avon is a much more formidable competitor than we had originally
anticipated and as a result, we were forced to sell out of our Oriflame position
since it no longer met our strict criteria of predictability and sustainability.
Investment Strategy and Outlook
In terms of the overall environment, we remain cautiously optimistic. We own
companies all over the world that we believe are well positioned and selling at
reasonable valuations. In the larger-cap category, however, we currently don't
see much value and therefore, most of our new names are on the smaller side.
Also, we have had difficulty in finding good companies with reasonable
valuations in Japan, a top performing market within the Morgan Stanley Capital
International EAFE(R) Index. Emerging markets exposure remains high by our
standards at around 14%. The prospect of further Federal Reserve rate hikes, we
believe, is keeping valuations more attractive in these markets.
Thank you for your investment.
Janus Adviser August 31, 2004 7
International Equity Fund (unaudited)
================================================================================
Initial investment of $10,000
[The following table was depicted as a mountain chart in the printed material.]
International Equity Fund - Morgan Stanley Capital
Class A Shares (at MOP) International EAFE(R) Index
--------------------------- ---------------------------
7/6/1990* $ 9,422 $10,000
7/31/1990 $ 9,800 $10,141
8/31/1990 $ 8,897 $ 9,156
9/30/1990 $ 7,572 $ 7,880
10/31/1990 $ 8,537 $ 9,108
11/30/1990 $ 8,376 $ 8,570
12/31/1990 $ 8,206 $ 8,710
1/31/1991 $ 8,454 $ 8,991
2/28/1991 $ 8,969 $ 9,955
3/31/1991 $ 9,038 $ 9,357
4/30/1991 $ 9,092 $ 9,449
5/31/1991 $ 9,346 $ 9,548
6/30/1991 $ 9,015 $ 8,847
7/31/1991 $ 9,285 $ 9,281
8/31/1991 $ 9,446 $ 9,093
9/30/1991 $ 9,531 $ 9,605
10/31/1991 $ 9,615 $ 9,741
11/30/1991 $ 9,300 $ 9,286
12/31/1991 $ 9,748 $ 9,766
1/31/1992 $ 9,890 $ 9,558
2/29/1992 $10,009 $ 9,216
3/31/1992 $ 9,697 $ 8,607
4/30/1992 $ 9,854 $ 8,648
5/31/1992 $10,335 $ 9,226
6/30/1992 $ 9,983 $ 8,789
7/31/1992 $ 9,603 $ 8,564
8/31/1992 $ 9,561 $ 9,101
9/30/1992 $ 9,227 $ 8,922
10/31/1992 $ 9,232 $ 8,454
11/30/1992 $ 9,382 $ 8,533
12/31/1992 $ 9,469 $ 8,577
1/31/1993 $ 9,487 $ 8,576
2/28/1993 $ 9,753 $ 8,835
3/31/1993 $10,213 $ 9,605
4/30/1993 $10,561 $10,517
5/31/1993 $10,677 $10,739
6/30/1993 $10,475 $10,572
7/31/1993 $10,782 $10,942
8/31/1993 $11,481 $11,532
9/30/1993 $11,568 $11,273
10/31/1993 $12,245 $11,620
11/30/1993 $11,911 $10,604
12/31/1993 $13,254 $11,370
1/31/1994 $13,922 $12,331
2/28/1994 $13,473 $12,297
3/31/1994 $12,577 $11,768
4/30/1994 $12,799 $12,267
5/31/1994 $12,926 $12,196
6/30/1994 $12,508 $12,369
7/31/1994 $12,982 $12,488
8/31/1994 $13,596 $12,783
9/30/1994 $13,363 $12,381
10/31/1994 $13,420 $12,793
11/30/1994 $12,798 $12,178
12/31/1994 $12,410 $12,254
1/31/1995 $11,486 $11,784
2/28/1995 $11,521 $11,750
3/31/1995 $11,761 $12,483
4/30/1995 $12,090 $12,952
5/31/1995 $12,268 $12,798
6/30/1995 $12,175 $12,573
7/31/1995 $12,856 $13,356
8/31/1995 $12,811 $12,847
9/30/1995 $12,990 $13,098
10/31/1995 $12,927 $12,745
11/30/1995 $13,240 $13,100
12/31/1995 $13,641 $13,628
1/31/1996 $14,049 $13,684
2/29/1996 $14,073 $13,730
3/31/1996 $14,404 $14,022
4/30/1996 $14,675 $14,429
5/31/1996 $14,529 $14,164
6/30/1996 $14,890 $14,244
7/31/1996 $14,091 $13,827
8/31/1996 $14,322 $13,858
9/30/1996 $14,842 $14,226
10/31/1996 $14,906 $14,080
11/30/1996 $15,596 $14,640
12/31/1996 $15,800 $14,452
1/31/1997 $15,776 $13,946
2/28/1997 $16,090 $14,174
3/31/1997 $16,126 $14,226
4/30/1997 $16,120 $14,301
5/31/1997 $17,037 $15,232
6/30/1997 $17,622 $16,072
7/31/1997 $18,501 $16,332
8/31/1997 $16,998 $15,112
9/30/1997 $18,159 $15,959
10/31/1997 $16,813 $14,732
11/30/1997 $16,849 $14,582
12/31/1997 $17,057 $14,709
1/31/1998 $17,488 $15,382
2/28/1998 $18,815 $16,369
3/31/1998 $19,250 $16,873
4/30/1998 $19,594 $17,006
5/31/1998 $19,873 $16,924
6/30/1998 $19,918 $17,052
7/31/1998 $20,263 $17,225
8/31/1998 $17,313 $15,091
9/30/1998 $16,641 $14,628
10/31/1998 $18,003 $16,153
11/30/1998 $19,051 $16,980
12/31/1998 $19,796 $17,650
1/31/1999 $19,861 $17,598
2/28/1999 $19,160 $17,179
3/31/1999 $19,904 $17,896
4/30/1999 $20,562 $18,621
5/31/1999 $19,384 $17,662
6/30/1999 $20,496 $18,351
7/31/1999 $20,865 $18,896
8/31/1999 $21,213 $18,965
9/30/1999 $21,395 $19,156
10/31/1999 $22,722 $19,873
11/30/1999 $25,436 $20,564
12/31/1999 $28,813 $22,410
1/31/2000 $26,335 $20,986
2/29/2000 $28,356 $21,551
3/31/2000 $27,712 $22,386
4/30/2000 $25,761 $21,208
5/31/2000 $24,191 $20,690
6/30/2000 $25,063 $21,499
7/31/2000 $24,233 $20,598
8/31/2000 $25,047 $20,777
9/30/2000 $23,661 $19,765
10/31/2000 $23,098 $19,298
11/30/2000 $22,215 $18,574
12/31/2000 $23,062 $19,235
1/31/2001 $22,658 $19,225
2/28/2001 $20,257 $17,783
3/31/2001 $18,496 $16,598
4/30/2001 $19,875 $17,751
5/31/2001 $19,000 $17,125
6/30/2001 $18,102 $16,425
7/31/2001 $17,696 $16,126
8/31/2001 $17,300 $15,717
9/30/2001 $15,220 $14,125
10/31/2001 $15,774 $14,487
11/30/2001 $16,113 $15,021
12/31/2001 $16,225 $15,110
1/31/2002 $15,107 $14,307
2/28/2002 $15,197 $14,408
3/31/2002 $16,122 $15,257
4/30/2002 $16,626 $15,288
5/31/2002 $16,977 $15,481
6/30/2002 $16,642 $14,865
7/31/2002 $15,339 $13,398
8/31/2002 $15,611 $13,367
9/30/2002 $14,101 $11,932
10/31/2002 $14,777 $12,573
11/30/2002 $15,057 $13,144
12/31/2002 $14,893 $12,702
1/31/2003 $14,015 $12,171
2/28/2003 $13,904 $11,892
3/31/2003 $13,914 $11,658
4/30/2003 $15,094 $12,801
5/31/2003 $15,821 $13,577
6/30/2003 $15,959 $13,905
7/31/2003 $15,862 $14,241
8/31/2003 $16,352 $14,585
9/30/2003 $16,998 $15,035
10/31/2003 $17,772 $15,972
11/30/2003 $18,128 $16,327
12/31/2003 $19,462 $17,603
1/31/2004 $19,803 $17,852
2/29/2004 $20,287 $18,264
3/31/2004 $20,419 $18,366
4/30/2004 $20,183 $17,951
5/31/2004 $19,881 $18,011
6/30/2004 $20,386 $18,406
7/31/2004 $19,933 $17,809
8/31/2004 $20,040 $17,887
Average Annual Total Return - for the periods ended August 31, 2004
- --------------------------------------------------------------------------------
Fiscal One Five Ten Since
Year-to-Date Year Year Year Inception*
- -----------------------------------------------------------------------------------------------
International Equity Fund
- - Investor Shares (1.29)% 22.40% (1.22)% 3.86% 5.39%
- -----------------------------------------------------------------------------------------------
International Equity Fund
- - Class I Shares (1.35)% 22.24% (1.34)% 3.73% 5.26%
- -----------------------------------------------------------------------------------------------
International Equity Fund
- - Class C Shares at NAV (1.60)% 22.75% (1.55)% 3.40% 4.89%
- -----------------------------------------------------------------------------------------------
International Equity Fund
- - Class C Shares at MOP (3.56)% 20.37% (1.74)% 3.30% 4.81%
- -----------------------------------------------------------------------------------------------
International Equity Fund
- - Class A Shares at NAV (1.22)% 22.56% (1.13)% 3.96% 5.47%
- -----------------------------------------------------------------------------------------------
International Equity Fund
- - Class A Shares at MOP (6.88)% 15.51% (2.30)% 3.34% 5.03%
- -----------------------------------------------------------------------------------------------
Morgan Stanley Capital
International EAFE(R) Index# (2.06)% 22.64% (1.16)% 3.42% 4.19%
Data presented represents past performance, which is no guarantee of future
results. Investment results and principal value will fluctuate so that shares,
when redeemed, may be worth more or less than their original cost. Due to market
volatility, current performance may be higher or lower than the performance
shown. Call 1-800-525-3713 or visit www.janus.com for current month end
performance.
The performance shown in the graph at Maximum Offering Price ("MOP") reflects
the maximum 5.75% upfront sales charge on Class A Shares but does not include a
1% contingent deferred sales charge that may be imposed on certain redemptions
of Class A Shares purchased without an initial sales charge and redeemed within
12 months of purchase.
The performance in the table includes the maximum 5.75% and 1.00% upfront sales
charge on Class A Shares and Class C Shares, respectively. 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.
Effective September 30, 2004, the 1.00% upfront sales charge on Class C Shares
is eliminated. The performance in the table at Net Asset Value ("NAV") does not
include any applicable sales loads or contingent deferred sales charges.
Performance would have been lower had these charges been taken into account. 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.
# Since inception return is calculated based on historical information from June
30, 1990 to August 31, 2004.
* The Fund's inception date - July 6, 1990.
================================================================================
Fund Expenses
The below examples show you the ongoing costs (in dollars) of investing in your
fund and compare these costs with those of other mutual funds. Please refer to
page 3 for a detailed explanation of the information presented in these tables.
Expense Example - Investor Beginning Account Value Ending Account Value Expenses Paid During Period
Shares (3/1/04) (8/31/04) (3/1/04-8/31/04) *
- ------------------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $987.10 $6.76
- ------------------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,018.40 $6.87
- ------------------------------------------------------------------------------------------------------------------------------------
Expense Example - I Shares Beginning Account Value Ending Account Value Expenses Paid During Period
(3/1/04) (8/31/04) (3/1/04-8/31/04) *
- ------------------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $986.50 $7.51
- ------------------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,017.64 $7.63
- ------------------------------------------------------------------------------------------------------------------------------------
Expense Example - C Shares Beginning Account Value Ending Account Value Expenses Paid During Period
(3/1/04) (8/31/04) (3/1/04-8/31/04) *
- ------------------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $984.00 $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,015.12 $10.16
- ------------------------------------------------------------------------------------------------------------------------------------
Expense Example - A Shares Beginning Account Value Ending Account Value Expenses Paid During Period
(3/1/04) (8/31/04) (3/1/04-8/31/04) *
- ------------------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $987.80 $6.26
- ------------------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,018.90 $6.36
- ------------------------------------------------------------------------------------------------------------------------------------
*Expenses are equal to the annualized expense ratio of 1.35% for Investor
Shares, 1.50% for I Shares, 2.00% for C Shares and 1.25% for A Shares,
multiplied by the average account value over the period, multiplied by 184/365
(to reflect the one-half year period). Expenses include the effect of
contractual waivers by Janus Capital.
- --------------------------------------------------------------------------------
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 based on the Fund's
fees and expenses (ignoring any fee and expense limitations), which are equal to
or higher (prior to application of contractual expense waivers) than those of
the Vontobel Fund.
Performance shown does not include networking/omnibus account fees that will be
incurred by Class A and Class C Shares effective September 30, 2004.
See Notes to Schedules of Investments for index definitions. See "Explanations
of Charts, Tables and Financial Statements." See Note 7 in Notes to Financial
Statements.
For Investor Shares and Class I Shares, a 2.00% redemption fee may be imposed on
shares held for 3 months or less.
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.
This Fund may have significant exposure to emerging markets which may lead to
greater price volatility.
There is no assurance the investment process will consistently lead to
successful investing.
Janus Capital 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.
8 Janus Adviser August 31, 2004
Schedule of Investments (unaudited)
Shares or Principal Amount Market Value
================================================================================
Common Stock - 96.0%
Athletic Footwear - 1.6%
1,950 Puma A.G. Rudolf Dassler Sport ..................$ 477,457
Beverages - Non-Alcoholic - 1.4%
700 Lotte Chilsung Beverage Company, Ltd. ........... 411,625
Beverages - Wine and Spirits - 3.5%
84,407 Diageo PLC ...................................... 1,039,910
Brewery - 1.9%
18,652 Heineken N.V. ................................... 563,948
Building - Residential and Commercial - 2.4%
66,176 Barratt Developments PLC ........................ 705,712
Commercial Banks - 14.4%
16,472 ABN AMRO Holding N.V. ........................... 331,742
75,071 Anglo Irish Bank Corporation PLC ................ 1,252,703
4,768 Banco Itau Holdings Financeira S.A. ............. 481,189
11,433 Banco Popular Espanol S.A. ...................... 620,104
6,800 BNP Paribas S.A. ................................ 413,332
15,900 HDFC Bank, Ltd. (ADR) ........................... 446,949
25,402 Royal Bank of Scotland Group PLC ................ 709,185
4,255,204
Commercial Services - 1.2%
299,200 Singapore Airport Terminal Services, Ltd. ....... 358,696
Cosmetics and Toiletries - 4.0%
3,660 Amorepacific Corp. .............................. 696,616
20,000 Kao Corp. ....................................... 491,250
1,187,866
Distribution/Wholesale - 1.4%
83,500 Esprit Holdings, Ltd. ........................... 402,331
Diversified Operations - 3.9%
39,000 Remgro, Ltd. .................................... 475,044
31,700 Wesfarmers, Ltd. ................................ 673,580
1,148,624
Diversified Operations - Commercial Services - 1.5%
58,198 Bunzl PLC ....................................... 445,053
Electric - Transmission - 2.5%
44,200 Red Electrica de Espana ......................... 749,491
Finance - Investment Bankers/Brokers - 2.7%
33,100 Macquarie Bank, Ltd. ............................ 793,835
Food - Confectionary - 2.3%
288 Lindt & Spruengli A.G. .......................... 334,184
740 Lotte Confectionery Company, Ltd. ............... 363,008
697,192
Food - Diversified - 4.5%
50,505 Cadbury Schweppes PLC ........................... 405,858
3,870 Nestle S.A. ..................................... 916,595
1,322,453
Food - Retail - 7.8%
3,300 Colruyt N.V. .................................... 434,561
238,392 Tesco PLC ....................................... 1,143,217
87,800 William Morrison Supermarkets PLC ............... 285,996
51,665 Woolworths, Ltd. ................................ 461,799
2,325,573
Gambling - Non-Hotel - 1.8%
50,581 TABCORP Holdings, Ltd. .......................... 537,193
Gas - Distribution - 3.2%
84,200 Enagas .......................................... 935,006
Mortgage Banks - 3.9%
90,738 Northern Rock PLC ............................... 1,161,885
Multi-Line Insurance - 1.5%
7,400 CNP Assurances .................................. 448,797
Office Automation and Equipment - 2.2%
33,000 Ricoh Company, Ltd. ............................. 646,259
Property and Casualty Insurance - 3.8%
147,900 Insurance Australia Group, Ltd. ................. 531,441
44 Millea Holdings, Inc. ........................... 607,600
1,139,041
Property Trust - 2.2%
60,900 Westfield Group* ................................ 663,833
Publishing - Newspapers - 2.8%
88,500 Johnston Press PLC .............................. 826,119
Real Estate Management/Services - 1.5%
11,400 Daito Trust Construction Company, Ltd. .......... 432,382
Retail - Jewelry - 1.7%
258,770 Signet Group PLC ................................ 489,076
Soap and Cleaning Preparations - 1.5%
16,698 Reckitt Benckiser PLC ........................... 439,524
Television - 1.6%
18,900 M6 Metropole Television ......................... 472,800
Tobacco - 11.3%
60,692 British American Tobacco PLC .................... 916,288
31,212 Imperial Tobacco Group PLC ...................... 680,627
23,200 ITC, Ltd. (GDR) ................................. 521,536
16,300 KT&G Corp. ...................................... 415,983
47,600 Souza Cruz S.A. ................................. 467,399
32,200 Swedish Match A.B. .............................. 326,520
3,328,353
- --------------------------------------------------------------------------------
Total Common Stock (cost $23,231,455) .............................. 28,405,238
- --------------------------------------------------------------------------------
Preferred Stock - 1.6%
Medical - Hospitals - 1.6%
10,000 Rhoen-Klinikum A.G.
(cost $478,595) ................................ 474,142
- --------------------------------------------------------------------------------
Short-Term U.S. Government Agencies - 3.0%
Fannie Mae
$900,000 1.48%, 9/1/04 (amortized cost $900,000) ........ 900,000
- --------------------------------------------------------------------------------
Total Investments (total cost $24,610,050) - 100.6% ................ 29,779,380
- --------------------------------------------------------------------------------
Liabilities, net of Cash, Receivables and Other Assets - (0.6)% .... (170,875)
- --------------------------------------------------------------------------------
Net Assets - 100% ..................................................$29,608,505
- --------------------------------------------------------------------------------
Summary of Investments by Country, August 31, 2004
Country Market Value % of Investment Securities
- --------------------------------------------------------------------
Australia $3,661,681 12.3%
Belgium 434,561 1.5%
Bermuda 402,331 1.3%
Brazil 948,588 3.2%
France 1,334,929 4.5%
Germany 951,599 3.2%
India 968,485 3.2%
Ireland 1,252,703 4.2%
Japan 2,177,491 7.3%
Netherlands 895,691 3.1%
Singapore 358,696 1.2%
South Africa 475,044 1.6%
South Korea 1,887,232 6.3%
Spain 2,304,601 7.7%
Sweden 326,520 1.1%
Switzerland 1,250,779 4.2%
United Kingdom 9,248,449 31.1%
United States++ 900,000 3.0%
- --------------------------------------------------------------------
Total $29,779,380 100.0%
++Includes Short-Term Securities (0% excluding Short-Term Securities)
See Notes to Schedules of Investments and Financial Statements
Janus Adviser August 31, 2004 9
Statements of Assets and Liabilities
As of August 31, 2004 (unaudited) Focused Value International
(all numbers in thousands except net asset value per share) Fund(1) Equity Fund
- -------------------------------------------------------------------------------------------------------------------------------
Assets:
Investments at cost $ 72,425 $ 24,610
Investments at value $ 81,721 $ 29,779
Cash 121 113
Receivables:
Investments sold -- 140
Portfolio shares sold 46 46
Dividends 47 109
Due from Adviser 80 37
Other assets 3 1
- -------------------------------------------------------------------------------------------------------------------------------
Total Assets 82,018 30,225
- -------------------------------------------------------------------------------------------------------------------------------
Liabilities:
Payables:
Investments purchased 23 575
Portfolio shares repurchased 8 3
Dividends -- --
Advisory fees 66 24
Transfer agent fees and expenses -- --
Administrative services fees - Investor Shares 6 2
Administrative services fees - Class I Shares 1 --
Distribution fees - Investor Shares 15 6
Distribution fees - Class I Shares 1 --
Distribution fees - Class C Shares 2 --
Distribution fees - Class A Shares 1 --
Foreign tax liability -- 4
Accrued expenses -- 2
- -------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 123 616
Net Assets $ 81,895 $ 29,609
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets Consist of:
Capital (par value and paid-in-surplus)* $ 71,378 $ 30,916
Undistributed net investment income/(loss)* 7 302
Undistributed net realized gain/(loss) from investments and foreign currency transactions* 1,214 (6,779)
Unrealized appreciation/(depreciation) of investments and foreign currency translations 9,296 5,170(2)
- -------------------------------------------------------------------------------------------------------------------------------
Total Net Assets $ 81,895 $ 29,609
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets - Investor Shares $ 69,927 $ 27,084
Shares Outstanding, $0.001 Par Value (unlimited shares authorized) 3,424 1,803
- -------------------------------------------------------------------------------------------------------------------------------
Net Asset Value Per Share $ 20.42 $ 15.02
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets - Class I Shares $ 4,823 $ 1,140
Shares Outstanding, $0.001 Par Value (unlimited shares authorized) 236 76
- -------------------------------------------------------------------------------------------------------------------------------
Net Asset Value Per Share $ 20.39 $ 15.00
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets - Class C Shares $ 2,269 $ 11
Shares Outstanding, $0.001 Par Value (unlimited shares authorized) 113 1
- -------------------------------------------------------------------------------------------------------------------------------
Net Asset Value and Redemption Price Per Share(3) $ 20.05 $ 15.06
- -------------------------------------------------------------------------------------------------------------------------------
Maximum Offering Price(4) $ 20.26 $ 15.21
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets - Class A Shares $ 4,876 $ 1,374
Shares Outstanding, $0.001 Par Value (unlimited shares authorized) 238 91
- -------------------------------------------------------------------------------------------------------------------------------
Net Asset Value and Redemption Price Per Share(3) $ 20.48 $ 15.04
Maximum Offering Price(5) $ 21.72 $ 15.96
- -------------------------------------------------------------------------------------------------------------------------------
*See Note 4 in Notes to Financial Statements.
(1) Formerly named US Value Fund.
(2) Net of foreign taxes on investments of $3,642 for International Equity Fund.
(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 August 31, 2004
Statements of Operations
Focused Value International
For the six month period ended August 31, 2004 (unaudited) Fund(1) Equity Fund
(all numbers in thousands) 2004 2004
- -------------------------------------------------------------------------------------------------------------
Investment Income:
Interest $ 75 $ 1
Dividends 456 640
Foreign tax withheld (3) (68)
- -------------------------------------------------------------------------------------------------------------
Total Investment Income 528 573
- -------------------------------------------------------------------------------------------------------------
Expenses:
Advisory fees 394 149
Transfer agent fees and expenses 16 12
Registration fees 57 40
Postage and mailing expenses 2 2
Custodian fees 18 10
Printing expenses 4 3
Legal fees 18 17
Audit fees 9 10
Trustees fees and expenses 120 47
Administrative services fees - Investor Shares 35 14
Administrative services fees - Class I Shares 6 2
Distribution fees - Investor Shares 88 34
Distribution fees - Class I Shares 6 2
Distribution fees - Class C Shares 10 --
Distribution fees - Class A Shares 6 2
Other expenses 9 12
- -------------------------------------------------------------------------------------------------------------
Total Expenses 798 356
Less: Excess Expense Reimbursement (277) (152)
Net Expenses after Expense Reimbursement 521 204
Net Investment Income/(Loss) 7 369
- -------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain/(Loss) on Investments:
Net realized gain/(loss) from securities transactions 1,255 1,269
Net realized gain/(loss) from foreign currency transactions -- (263)
Change in net unrealized appreciation/(depreciation) of investments and
foreign currency translations (2,919) (1,770)(2)
- -------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain/(Loss) on Investments
and foreign currency transactions (1,664) (764)
- -------------------------------------------------------------------------------------------------------------
Net Increase/(Decrease) in Net Assets Resulting from Operations $(1,657) $ (395)
- -------------------------------------------------------------------------------------------------------------
(1) Formerly named US Value Fund.
(2) Net of foreign taxes on investments of $3,642 for International Equity Fund.
See Notes to Financial Statements.
Janus Adviser August 31, 2004 11
Statements of Changes in Net Assets
For the six month period ended August 31, 2004 (unaudited), Focused Value International
the two month fiscal period ended February 29, 2004 and for the Fund(1)(2) Equity(3)
fiscal year ended December 31, 2003 (all numbers in thousands) 2004 2004 2003 2004 2004 2003(4)(5)
- ------------------------------------------------------------------------------------------------------------------------------------
Operations:
Net investment income/(loss) $ 7 $ (56) $ (715) $ 369 $ 5 $ 19
Net realized gain/(loss) from investment transactions 1,255 2,551 8,813 1,006 218 1,652
Change in unrealized net appreciation/(depreciation)
of investments and foreign currency translations (2,919) 498 5,996 (1,770) 1,005 5,279
Increase from payment by affiliate (Note 2) -- -- -- -- -- 26
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase/(Decrease) in Net Assets Resulting from Operations (1,657) 2,993 14,094 (395) 1,228 6,976
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and Distributions to Shareholders:
Net investment income*
Investor Shares -- -- -- -- -- (128)
Class I Shares -- -- -- -- -- (9)
Class C Shares -- -- -- -- -- --
Class A Shares -- -- -- -- -- (7)
Net realized gain from investment transactions*
Investor Shares (5,665) -- (3,790) (428) -- (704)
Class I Shares (406) -- (386) (19) -- (41)
Class C Shares (177) -- (75) -- -- --
Class A Shares (386) -- (190) (23) -- (42)
Return of Capital*
Investor Shares _ -- -- -- -- (91)
Class I Shares _ -- -- -- -- (6)
Class C Shares _ -- -- -- -- --
Class A Shares _ -- -- -- -- (6)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Decrease from Dividends and Distributions (6,634) -- (4,441) (470) -- (1,034)
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Shares sold
Investor Shares 10,348 9,707 5,379 4,440 2,590 2,591
Capital Transferred N/A N/A 53,231 N/A N/A 20,887
Class I Shares 75 44 94 12 1 37
Capital Transferred N/A N/A 5,687 N/A N/A 1,435
Class C Shares 514 419 843 -- -- 10
Class A Shares 1,571 113 15,803 122 27 13,148
Redemption fees
Investor Shares N/A N/A N/A 4 3 1
Class I Shares N/A N/A N/A -- -- --
Reinvested dividends and distributions
Investor Shares 5,556 -- 1,774 423 -- 694
Class I Shares 356 -- 153 13 -- 24
Class C Shares 168 -- 36 -- -- --
Class A Shares 366 -- 73 22 -- 36
Shares repurchased
Investor Shares (8,930) (4,195) (10,554) (4,919) (1,285) (3,755)
Class I Shares (912) (455) (1,208) (152) (164) (415)
Class C Shares (21) -- (18) -- -- --
Class A Shares (337) (265) (61,614) (212) (78) (18,940)
Capital Transferred N/A N/A (58,918) N/A N/A (22,322)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase/(Decrease) from Capital Share Transactions 8,754 5,368 (49,239) (247) 1,094 (6,569)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase/(Decrease) in Net Assets 463 8,361 (39,586) (1,112) 2,322 (627)
Net Assets:
Beginning of period 81,432 73,071 112,657 30,721 28,399 29,026
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $81,895 $81,432 $ 73,071 $29,609 $30,721 $ 28,399
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Undistributed net investment income/(loss)* $ 7 -- -- $ 302 $ (67) $ (7)
- ------------------------------------------------------------------------------------------------------------------------------------
*See Note 4 in Notes to Financial Statements.
(1) Formerly named US Value Fund
(2) Vontobel US Value Fund prior to reorganization (Note 1).
(3) Vontobel International Equity Fund prior to reorganization (Note 1).
(4) Certain prior year amounts have been reclassified to conform to current year
presentation.
(5) Commencement of operations of Class C Shares was October 13, 2003.
See Notes to Financial Statements.
12 Janus Adviser August 31, 2004
Financial Highlights - Investor Shares
For a share outstanding during the six month period ended
August 31, 2004 (unaudited), the two month fiscal period ended Focused Value Fund(1)(2)
February 29, 2004 and through each fiscal year ended December 31 2004 2004 2003
- ---------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $22.65 $21.78 $18.64
- ---------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) --(3) --(3) --(3)
Net gains/(losses) on securities (both realized and unrealized) (.43) .87 4.46
- ---------------------------------------------------------------------------------------------------------------
Total from Investment Operations (.43) .87 4.46
- ---------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income)* -- -- --
Distributions (from net realized gains)* (1.80) -- (1.32)
- ---------------------------------------------------------------------------------------------------------------
Total Distributions (1.80) -- (1.32)
- ---------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $20.42 $22.65 $21.78
- ---------------------------------------------------------------------------------------------------------------
Total Return** (2.01)% 3.99% 24.32%
- ---------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $69,927 $70,034 $61,970
Average Net Assets for the Period (in thousands) $69,755 $66,560 $67,077
Ratio of Gross Expenses to Average Net Assets*** 1.25%(4) 1.25%(4) 2.14%(4)
Ratio of Net Expenses to Average Net Assets*** 1.25%(4) 1.25%(4) 2.14%(4)
Ratio of Net Investment Income/(Loss) to Average Net Assets*** 0.04% (0.42)% (0.90)%
Portfolio Turnover Rate*** 13% 55% 21%
For a share outstanding during the six month period ended Vontobel
August 31, 2004 (unaudited), the two month fiscal period ended US Value Fund - A Shares
February 29, 2004 and through each fiscal year ended December 31 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $19.86 $19.29 $14.27 $16.73
- ------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) (.09) (.12) .02 .07
Net gains/(losses) on securities (both realized and unrealized) (.33) .71 5.00 (2.42)
- ------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (.42) .59 5.02 (2.35)
- ------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income)* -- (.02) -- (.11)
Distributions (from net realized gains)* (.80) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Total Distributions (.80) (.02) -- (.11)
- ------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $18.64 $19.86 $19.29 $14.27
- ------------------------------------------------------------------------------------------------------------------------------
Total Return** (2.20)% 3.06% 35.18% (14.07)%
- ------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $112,302 $86,157 $137,238 $71,480
Average Net Assets for the Period (in thousands) N/A N/A N/A N/A
Ratio of Gross Expenses to Average Net Assets*** 1.74%(5) 1.75%(6) 1.75% 1.87%(7)
Ratio of Net Expenses to Average Net Assets*** 1.72% 1.75%(6) 1.75% 1.87%
Ratio of Net Investment Income/(Loss) to Average Net Assets*** (0.63)% (0.43)% 0.23% 0.40%
Portfolio Turnover Rate*** 76% 66% 104% 67%
For a share outstanding during the six month period ended International
August 31, 2004 (unaudited), the two month fiscal period ended Equity Fund(8)
February 29, 2004 and through each fiscal year ended December 31 2004 2004 2003
- --------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $15.46 $14.83 $11.86
- --------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) .19 (.03) .12
Net gains/(losses) on securities (both realized and unrealized) (.38) .66 3.38
- --------------------------------------------------------------------------------------------------------------
Total from Investment Operations (.19) .63 3.50
- --------------------------------------------------------------------------------------------------------------
Less Distributions and Other:
Dividends (from net investment income)* -- -- (.07)
Distributions (from capital gains)* (.25) -- (.43)
Tax return of capital* -- -- (.05)
Redemption fees --(9) --(9) --(9)
Payment by affiliate -- _ .02
- --------------------------------------------------------------------------------------------------------------
Total Distributions and Other (.25) -- (.53)
- --------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $15.02 $15.46 $14.83
- --------------------------------------------------------------------------------------------------------------
Total Return** (1.29)% 4.25% 29.99%
- --------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $27,084 $27,924 $25,506
Average Net Assets for the Period (in thousands) $27,344 $27,413 $23,269
Ratio of Gross Expenses to Average Net Assets*** 1.35%(4) 1.35%(4) 2.91%(4)
Ratio of Net Expenses to Average Net Assets*** 1.35%(4) 1.35%(4) 2.91%(4)
Ratio of Net Investment Income/(Loss) to Average Net Assets*** 2.44% 0.09% 0.07%
Portfolio Turnover Rate*** 41% 41% 65%
For a share outstanding during the six month period ended Vontobel
August 31, 2004 (unaudited), the two month fiscal period ended International Equity Fund - A Shares
February 29, 2004 and through each fiscal year ended December 31 2002 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $12.88 $18.86 $28.01 $20.18
- ----------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) .03 (.10) (.03) .06
Net gains/(losses) on securities (both realized and unrealized) (1.05) (5.41) (5.30) 9.07
- ----------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (1.02) (5.51) (5.33) 9.13
- ----------------------------------------------------------------------------------------------------------------------------
Less Distributions and Other:
Dividends (from net investment income)* -- (.12) (.08) (.05)
Distributions (from capital gains)* -- (.35) (3.74) (1.25)
Tax return of capital* N/A N/A N/A N/A
Redemption fees N/A N/A N/A N/A
Payment by affiliate -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
Total Distributions and Other -- (.47) (3.82) (1.30)
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $11.86 $12.88 $18.86 $28.01
- ----------------------------------------------------------------------------------------------------------------------------
Total Return** (7.92)% (29.22)% (18.70)% 46.52%
- ----------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $29,026 $44,356 $133,233 $192,537
Average Net Assets for the Period (in thousands) N/A N/A N/A N/A
Ratio of Gross Expenses to Average Net Assets*** 2.44% 1.89%(6) 1.39% 1.28%
Ratio of Net Expenses to Average Net Assets*** 2.44% 1.88%(6) 1.38% 1.27%
Ratio of Net Investment Income/(Loss) to Average Net Assets*** 0.18% (0.38)% (0.15)% 0.03%
Portfolio Turnover Rate*** 98% 92% 69% 38%
*See Note 4 in Notes to Financial Statements.
**Total return not annualized for periods of less than one full year.
***Annualized for periods of less than one full year.
(1) Formerly named US Value Fund.
(2) Vontobel US Value Fund prior to reorganization (Note 1).
(3) Net investment income/(loss) aggregated less than $.01 on a per share basis
for the fiscal year or period ended.
(4) See Notes 5 and 6 in Notes to Financial Statements.
(5) Expense ratio has been increased to include additional custodian fees which
were offset by custodian fee credits.
(6) Expense ratio has increased by 0.29% for Vontobel US Value Fund and 0.13%
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.
(7) The ratio was 2.76% in 1999 before waiver of management fees.
(8) Vontobel International Equity Fund prior to reorganization (Note 1).
(9) 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 August 31, 2004 13
Financial Highlights - Class I Shares
For a share outstanding during the six month period ended
August 31,2004 (unaudited), the two month fiscal period ended Focused Value Fund(1)(2)
February 29, 2004 and through each fiscal year ended December 31 2004 2004 2003
- -----------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $22.64 $21.78 $18.64
- -----------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) (.01) (.01) (.02)
Net gains/(losses) on securities (both realized and unrealized) (.44) .87 4.48
- -----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (.45) .86 4.46
- -----------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income)* -- -- --
Distributions (from net realized gains)* (1.80) -- (1.32)
- -----------------------------------------------------------------------------------------------------------------------
Total Distributions (1.80) -- (1.32)
- -----------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $20.39 $22.64 $21.78
- -----------------------------------------------------------------------------------------------------------------------
Total Return** (2.11)% 3.95% 24.32%
- -----------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $4,823 $5,825 $6,005
Average Net Assets for the Period (in thousands) $5,098 $5,915 $7,057
Ratio of Gross Expenses to Average Net Assets*** 1.40%(3) 1.40%(3) 2.16%(3)
Ratio of Net Expenses to Average Net Assets*** 1.40%(3) 1.40%(3) 2.16%(3)
Ratio of Net Investment Income/(Loss) to Average Net Assets*** (0.10)% (0.58)% (0.92)%
Portfolio Turnover Rate*** 13% 55% 21%
For a share outstanding during the six month period ended Vontobel
August 31,2004 (unaudited), the two month fiscal period ended US Value Fund - A Shares
February 29, 2004 and through each fiscal year ended December 31 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $19.86 $19.29 $14.27 $16.73
- -----------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) (.09) (.12) .02 .07
Net gains/(losses) on securities (both realized and unrealized) (.33) .71 5.00 (2.42)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (.42) .59 5.02 (2.35)
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income)* -- (.02) -- (.11)
Distributions (from net realized gains)* (.80) -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions (.80) (.02) -- (.11)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $18.64 $19.86 $19.29 $14.27
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return** (2.20)% 3.06% 35.18% (14.07)%
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $112,302 $86,157 $137,238 $71,480
Average Net Assets for the Period (in thousands) N/A N/A N/A N/A
Ratio of Gross Expenses to Average Net Assets*** 1.74%(4) 1.75%(5) 1.75% 1.87%(6)
Ratio of Net Expenses to Average Net Assets*** 1.72% 1.75%(5) 1.75% 1.87%
Ratio of Net Investment Income/(Loss) to Average Net Assets*** (0.63)% (0.43)% 0.23% 0.40%
Portfolio Turnover Rate*** 76% 66% 104% 67%
For a share outstanding during the six month period ended International
August 31, 2004 (unaudited), the two month fiscal period ended Equity Fund(7)
February 29, 2004 and through each fiscal year ended December 31 2004 2004 2003
- ------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $15.45 $14.82 $11.86
- ------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) .18 (.03) .10
Net gains/(losses) on securities (both realized and unrealized) (.38) .66 3.39
- ------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (.20) .63 3.49
- ------------------------------------------------------------------------------------------------------------------------
Less Distributions and Other:
Dividends (from net investment income)* -- -- (.06)
Distributions (from capital gains)* (.25) -- (.43)
Tax return of capital* -- -- (.06)
Redemption fees` --(8) --(8) --
Payment by affiliate -- -- .02
- ------------------------------------------------------------------------------------------------------------------------
Total Distributions and Other (.25) -- (.53)
- ------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $15.00 $15.45 $14.82
- ------------------------------------------------------------------------------------------------------------------------
Total Return** (1.35)% 4.25% 29.90%
- ------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $1,140 $1,303 $1,409
Average Net Assets for the Period (in thousands) $1,195 $1,333 $1,547
Ratio of Gross Expenses to Average Net Assets*** 1.50%(3) 1.50%(3) 2.87%(3)
Ratio of Net Expenses to Average Net Assets*** 1.50%(3) 1.50%(3) 2.87%(3)
Ratio of Net Investment Income/(Loss) to Average Net Assets*** 2.31% 0.17% 0.11%
Portfolio Turnover Rate*** 41% 41% 65%
For a share outstanding during the six month period ended Vontobel
August 31, 2004 (unaudited), the two month fiscal period ended International Equity Fund - A Shares
February 29, 2004 and through each fiscal year ended December 31 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $12.88 $18.86 $28.01 $20.18
- -----------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) .03 (.10) (.03) .06
Net gains/(losses) on securities (both realized and unrealized) (1.05) (5.41) (5.30) 9.07
- -----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (1.02) (5.51) (5.33) 9.13
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions and Other:
Dividends (from net investment income)* -- (.12) (.08) (.05)
Distributions (from capital gains)* -- (.35) (3.74) (1.25)
Tax return of capital* N/A N/A N/A N/A
Redemption fees` N/A N/A N/A N/A
Payment by affiliate -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions and Other -- (.47) (3.82) (1.30)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $11.86 $12.88 $18.86 $28.01
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return** (7.92)% (29.22)% (18.70)% 46.52%
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $29,026 $44,356 $133,233 $192,537
Average Net Assets for the Period (in thousands) N/A N/A N/A N/A
Ratio of Gross Expenses to Average Net Assets*** 2.44% 1.89%(5) 1.39% 1.28%
Ratio of Net Expenses to Average Net Assets*** 2.44% 1.88%(5) 1.38% 1.27%
Ratio of Net Investment Income/(Loss) to Average Net Assets*** 0.18% (0.38)% (0.15)% 0.03%
Portfolio Turnover Rate*** 98% 92% 69% 38%
*See Note 4 in Notes to Financial Statements.
**Total return not annualized for periods of less than one full year.
***Annualized for periods of less than one full year.
(1) Formerly named US Value Fund.
(2) Vontobel US Value Fund prior to reorganization (Note 1).
(3) See Notes 5 and 6 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 0.29% for Vontobel US Value Fund and 0.13%
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 period ended.
See Notes to Financial Statements.
14 Janus Adviser August 31, 2004
Financial Highlights - Class C Shares
For a share outstanding during the six month period ended
August 31, 2004 (unaudited), the two month fiscal period Vontobel
ended February 29, 2004 and through each fiscal year Focused Value Fund(1)(2) US Value Fund
ended December 31 2004 2004 2003 2002(3)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $22.35 $21.52 $18.60 $17.49
- -----------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) (.04) --(4) (.07) (.06)
Net gains/(losses) on securities (both realized and unrealized) (.46) .83 4.31 1.97
- -----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (.50) .83 4.24 1.91
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income)* -- -- -- --
Distributions (from net realized gains)* (1.80) -- (1.32) (.80)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions (1.80) -- (1.32) (.80)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $20.05 $22.35 $21.52 $18.60
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return** (2.36)% 3.86% 23.18% 10.82%
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $2,269 $1,827 $1,344 $355
Average Net Assets for the Period (in thousands) $2,030 $1,677 $948 N/A
Ratio of Gross Expenses to Average Net Assets*** 1.90%(5) 1.90%(5) 3.16%(5) 2.74%
Ratio of Net Expenses to Average Net Assets*** 1.90%(5) 1.90%(5) 3.16%(5) 2.72%
Ratio of Net Investment Income/(Loss) to Average Net Assets*** (0.63)% (1.05)% (1.81)% (1.63)%
Portfolio Turnover Rate*** 13% 55% 21% 76%
For a share outstanding during the six month period ended August 31, 2004
(unaudited), the two month fiscal period ended February 29, 2004 International Equity Fund
and through each fiscal period ended December 31, 2003 2004 2004 2003(6)
- --------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $15.55 $14.95 $13.91
- --------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(losses) .14 (.06) .11
Net gains/(losses) on securities (both realized and unrealized) (.38) .66 1.34
- --------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (.24) .60 1.45
- --------------------------------------------------------------------------------------------------------------------
Less Distributions and Other:
Dividends (from net investment income)* -- -- --
Distributions (from capital gains)* (.25) -- (.43)
Payment by affiliate -- -- .02
- --------------------------------------------------------------------------------------------------------------------
Total Distributions and Other (.25) -- (.41)
- --------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $15.06 $15.55 $14.95
- --------------------------------------------------------------------------------------------------------------------
Total Return** (1.60)% 4.01% 10.71%
- --------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $11 $12 $11
Average Net Assets for the Period (in thousands) $11 $11 $10
Ratio of Gross Expenses to Average Net Assets*** 2.00%(5) 2.00%(5) 1.92%(5)
Ratio of Net Expenses to Average Net Assets*** 2.00%(5) 2.00%(5) 1.92%(5)
Ratio of Net Investment Income/(Loss) to Average Net Assets*** 1.80% (1.05)% (0.14)%
Portfolio Turnover Rate*** 41% 41% 65%
*See Note 4 in Notes to Financial Statements.
**Total return not annualized for periods of less than one full year.
***Annualized for periods of less than one full year.
(1) Formerly named US Value Fund
(2) Vontobel US Value Fund prior to reorganization (Note 1).
(3) Period October 9, 2002 (inception date) to December 31, 2002.
(4) Net investment income/(loss) aggregated less than $.01 on a per share basis
for the fiscal period ended February 29, 2004.
(5) See Notes 5 and 6 in Notes to Financial Statements.
(6) Period from October 13, 2003 (inception date) to December 31, 2003.
See Notes to Financial Statements.
Janus Adviser August 31, 2004 15
Financial Highlights - Class A Shares
For a share outstanding during the six month period ended
August 31, 2004 (unaudited), the two month fiscal period ended Focused Value Fund(1)(2)
February 29, 2004 and through each fiscal year ended December 31 2004 2004 2003
- -----------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $22.69 $21.82 $18.64
- -----------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) --(3) --(3) .03
Net gains/(losses) on securities (both realized and unrealized) (.41) .87 4.47
- -----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (.41) .87 4.50
- -----------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income)* -- -- --
Distributions (from net realized gains)* (1.80) -- (1.32)
- -----------------------------------------------------------------------------------------------------------------------
Total Distributions (1.80) -- (1.32)
- -----------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $20.48 $22.69 $21.82
- -----------------------------------------------------------------------------------------------------------------------
Total Return** (1.92)% 3.99% 24.54%
- -----------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $4,876 $3,746 $3,752
Average Net Assets for the Period (in thousands) $4,603 $3,720 $3,649
Ratio of Gross Expenses to Average Net Assets*** 1.15%(4) 1.15%(4) 2.11%(4)
Ratio of Net Expenses to Average Net Assets*** 1.15%(4) 1.15%(4) 2.11%(4)
Ratio of Net Investment Income/(Loss) to Average Net Assets*** 0.11% (0.33)% (0.88)%
Portfolio Turnover Rate*** 13% 55% 21%
For a share outstanding during the six month period ended Vontobel
August 31, 2004 (unaudited), the two month fiscal period ended US Value Fund - A Shares
February 29, 2004 and through each fiscal year ended December 31 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $19.86 $19.29 $14.27 $16.73
- -----------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) (.09) (.12) .02 .07
Net gains/(losses) on securities (both realized and unrealized) (.33) .71 5.00 (2.42)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (.42) .59 5.02 (2.35)
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income)* -- (.02) -- (.11)
Distributions (from net realized gains)* (.80) -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions (.80) (.02) -- (.11)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $18.64 $19.86 $19.29 $14.27
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return** (2.20)% 3.06% 35.18% (14.07)%
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $112,302 $86,157 $137,238 $71,480
Average Net Assets for the Period (in thousands) N/A N/A N/A N/A
Ratio of Gross Expenses to Average Net Assets*** 1.74%(5) 1.75%(6) 1.75% 1.87%(7)
Ratio of Net Expenses to Average Net Assets*** 1.72% 1.75%(6) 1.75% 1.87%
Ratio of Net Investment Income/(Loss) to Average Net Assets*** (0.63)% (0.43)% 0.23% 0.40%
Portfolio Turnover Rate*** 76% 66% 104% 67%
For a share outstanding during the six month period ended International
August 31, 2004 (unaudited), the two month fiscal period ended Equity Fund(8)
February 29, 2004 and through each fiscal year ended December 31 2004 2004 2003
- -----------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $15.47 $14.84 $11.86
- -----------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) .20 (.03) .12
Net gains/(losses) on securities (both realized and unrealized) (.38) .66 3.39
- -----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (.18) .63 3.51
- -----------------------------------------------------------------------------------------------------------------------
Less Distributions and Other:
Dividends (from net investment income)* -- -- (.06)
Distributions (from capital gains)* (.25) -- (.43)
Tax return of capital* -- -- (.06)
Payment by affiliate -- -- .02
- -----------------------------------------------------------------------------------------------------------------------
Total Distributions and Other (.25) -- (.53)
- -----------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $15.04 $15.47 $14.84
- -----------------------------------------------------------------------------------------------------------------------
Total Return** (1.22)% 4.25% 30.07%
- -----------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $1,374 $1,482 $1,473
Average Net Assets for the Period (in thousands) $1,404 $1,470 $1,395
Ratio of Gross Expenses to Average Net Assets*** 1.25%(4) 1.25%(4) 2.87%(4)
Ratio of Net Expenses to Average Net Assets*** 1.25%(4) 1.25%(4) 2.87%(4)
Ratio of Net Investment Income/(Loss) to Average Net Assets*** 2.57% 0.18% 0.11%
Portfolio Turnover Rate*** 41% 41% 65%
For a share outstanding during the six month period ended Vontobel
August 31, 2004 (unaudited), the two month fiscal period ended International Equity Fund - A Shares
February 29, 2004 and through each fiscal year ended December 31 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $12.88 $18.86 $28.01 $20.18
- -----------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) .03 (.10) (.03) .06
Net gains/(losses) on securities (both realized and unrealized) (1.05) (5.41) (5.30) 9.07
- -----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (1.02) (5.51) (5.33) 9.13
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions and Other:
Dividends (from net investment income)* -- (.12) (.08) (.05)
Distributions (from capital gains)* -- (.35) (3.74) (1.25)
Tax return of capital* N/A N/A N/A N/A
Payment by affiliate -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions and Other -- (.47) (3.82) (1.30)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $11.86 $12.88 $18.86 $28.01
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return** (7.92)% (29.22)% (18.70)% 46.52%
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $29,026 $44,356 $133,233 $192,537
Average Net Assets for the Period (in thousands) N/A N/A N/A N/A
Ratio of Gross Expenses to Average Net Assets*** 2.44% 1.89%(6) 1.39% 1.28%
Ratio of Net Expenses to Average Net Assets*** 2.44% 1.88%(6) 1.38% 1.27%
Ratio of Net Investment Income/(Loss) to Average Net Assets*** 0.18% (0.38)% (0.15)% 0.03%
Portfolio Turnover Rate*** 98% 92% 69% 38%
*See Note 4 in Notes to Financial Statements.
**Total return not annualized for periods of less than one full year.
***Annualized for periods of less than one full year.
(1) Formerly named US Value Fund.
(2) Vontobel US Value Fund prior to reorganization (Note 1).
(3) Net investment income/(loss) aggregated less than $.01 on a per share basis
for the fiscal period ended.
(4) See Notes 5 and 6 in Notes to Financial Statements.
(5) Expense ratio has been increased to include additional custodian fees which
were offset by custodian fee credits.
(6) Expense ratio has increased by 0.29% for Vontobel US Value Fund and 0.13%
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.
(7) The ratio was 2.76% in 1999 before waiver of management fees.
(8) Vontobel International Equity Fund prior to reorganization (Note 1).
See Notes to Financial Statements.
16 Janus Adviser August 31, 2004
Notes to Schedules of Investments (unaudited)
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
International EAFE(R) Index composed of companies representative of the
market structure of 21 Developed Market
countries in Europe, Australasia and the Far East.
ADR American Depositary Receipt
GDR Global Depositary Receipt
PLC Public Limited Company
*Non-income-producing security.
Janus Adviser August 31, 2004 17
Notes to Financial Statements (unaudited)
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 to Financial Statements
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 Focused Value Fund (formerly 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.
Focused 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. Focused 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 securities
maturing within 60 days are valued at amortized cost, which approximates market
value. Currently, foreign securities and currencies are converted to U.S.
dollars using the applicable rate in effect as of 1:00 p.m. (New York time). It
is anticipated that sometime during the fourth calendar quarter, the conversion
to U.S. dollars will use the applicable rate in effect as of the daily close of
the New York Stock Exchange ("NYSE"). When market quotations are not readily
available, or events or circumstances that may affect the value of portfolio
securities are identified between the closing of their principal markets and the
time the net asset value ("NAV") is determined, securities are valued at fair
value as determined in good faith under procedures established by and under the
supervision of the Funds' Trustees. The Funds may use a systematic fair
valuation model provided by an independent third party to value international
equity securities in order to adjust for stale pricing, which may occur between
the close of the foreign exchanges and the NYSE.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold
(trade date). Dividend income is recorded on the ex-dividend date. Certain
dividends from foreign securities will be recorded as soon as the Trust is
informed of the dividend if such information is obtained subsequent to the
ex-dividend date. 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 contract is a commitment to purchase or sell a
foreign currency at a future date at a negotiated rate. The gain or loss
18 Janus Adviser August 31, 2004
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 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 gains and losses are also calculated on payables and receivables that
are denominated in foreign currencies. The payables and receivables are
generally related to security transactions and income.
Foreign-denominated assets and forward currency contracts may involve more risks
than domestic transactions, including currency risk, political and economic
risk, regulatory risk and market risk. Risks may arise from the potential
inability of a counterparty to meet the terms of a contract and from
unanticipated movements in the value of foreign currencies relative to the U.S.
dollar.
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 declares and distributes dividends and capital gains (if
any) annually. 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 Policies and Voting Record
A description of the policies and procedures that the Funds use to determine how
to vote proxies relating to their portfolio securities is available (i) without
charge, upon request, by calling 1-800-525-3713 (toll free); (ii) on the Fund's
website at www.janus.com; and (iii) on the SEC's website at http://www.sec.gov.
Additionally, information regarding each Fund's proxy voting record for the most
recent twelve month period ended June 30, 2004 is also available, free of
charge, through www.janus.com and from the SEC's website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Funds will file their complete portfolio holdings (schedule of investments)
with the SEC for the first and third quarters of each fiscal year on Form N-Q
within 60 days of the end of the fiscal quarter. The Funds' Form N-Q: (i) will
be available on the SEC's website at http://www.sec.gov; (ii) may be reviewed
and copied at the SEC's Public Reference Room in Washington, D.C. (information
on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and
(iii) will be available without charge, upon request, by calling Janus at
1-800-525-3713 (toll free).
2. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES
Janus Capital is the investment adviser to the Funds. Focused Value Fund is
subject to advisory fees payable to Janus Capital
Janus Adviser August 31, 2004 19
Notes to Financial Statements(unaudited) (continued)
based upon annual rates of 0.96% of the first $100 million of average daily net
assets, 0.85% of average daily net assets over $100 million to $300 million and
0.75% 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 0.99% of the first $100 million of average daily net assets,
0.85% of average daily net assets over $100 million to $300 million and 0.75% 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 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 ranging from 0.215%
to 0.74% for Focused Value Fund and ranging from 0.215% to 0.408% 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. Effective September 30, 2004,
the 1.00% upfront sales charge on C shares will be eliminated. 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 six
month period ended August 31, 2004, Focused Value Fund - Class C Shareholders
and International Equity Fund - Class C Shareholders did not pay contingent
deferred sales charges.
As of August 31, 2004, Janus Capital assumed $1.4 million of legal, consulting
and Trustee costs and fees incurred in connection with the regulatory and civil
litigation matters discussed in Note 9. These non-recurring costs were allocated
to all Funds in the Janus Investment Fund, Janus Aspen Series and Janus Adviser
Series based on their respective net assets as of July 31, 2004. The Trust did
not receive an allocation of these non-recurring costs.
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 0.10% of the
average daily net assets of the Investor Shares of each of the Funds and at an
annual rate of up to 0.25% 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. Janus Services
receives certain out-of-pocket expenses for transfer agent services.
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 0.90% for Focused 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 class of the Funds, with
the exceptions noted above, exceed the percentages stated. For the six month
period ended August 31, 2004, total fees and expenses absorbed by Janus Capital
were $276,823 and $152,106, for Focused Value Fund and International Equity
Fund, respectively. As of August 31, 2004, the reimbursement that may be
potentially made to Janus Capital by the Focused Value Fund and International
Equity Fund is $256,809 and $345,335, respectively. This recoup of such
reimbursements will expire October 13, 2006.
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 0.25% 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
20 Janus Adviser August 31, 2004
Shares. Up to 0.75% 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 0.25% of this fee for shareholder servicing
activities.
As of the date of this report, a 2.00% 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 increased from 1.00% 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 six month period ended August 31, 2004 were $4,269 and $36, respectively.
DST Systems, Inc. ("DST"), an affiliate prior to June 16, 2004 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. As
of June 16, 2004, JCGI sold its remaining shares of common stock of DST. As a
result, JCGI does not own any shares of DST. DST fees are included in Transfer
Agent Fees and Expenses in the Statement of Operations. Focused Value Fund and
International Equity Fund did not pay DST fees during the period March 1, 2004
through June 16, 2004.
3. PURCHASES AND SALES OF INVESTMENT SECURITIES
For the six month period ended August 31, 2004, the aggregate cost of purchases
and proceeds from sales of investment securities (excluding short-term
securities) were as follows:
For the six month period ended August 31, 2004 (unaudited) (all numbers in
thousands)
Purchase of Long- Proceeds from Sales
Purchase of Proceeds from Sales Term U.S. Government of Long-Term U.S.
Fund Securities of Securities Obligations Government Obligations
- -------------------------------------------------------------------------------------------------------------------
Focused Value Fund (1) $22,843 $4,463 $-- $--
International Equity Fund 6,222 6,991 -- --
- -------------------------------------------------------------------------------------------------------------------
(1) Formerly named US Value Fund.
Janus Adviser August 31, 2004 21
Notes to Financial Statements(unaudited) (continued)
4. FEDERAL INCOME TAX
Income and capital gains distributions are determined in accordance with income
tax regulations that may differ from accounting principles generally accepted in
the United States of America. These differences are due to differing treatments
for items such as deferral of wash sale losses, foreign currency transactions,
net short-term gains, net investment losses and capital loss carryovers.
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 gain distributions. The table below
shows the expiration dates of the carryovers.
The aggregate cost of investments and the composition of unrealized appreciation
and depreciation of investment securities for federal income tax purposes as of
August 31, 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.
Accumulated Federal Tax Unrealized Unrealized Net Appreciation/
Fund Capital Losses Cost Appreciation (Depreciation) (Depreciation)
- -----------------------------------------------------------------------------------------------------------------
Focused Value Fund(1) -- $72,466,132 $10,365,622 $(1,110,697) $9,254,925
International Equity Fund $(7,794,916)(2) 24,610,050 5,469,868 (300,538) 5,169,330
- -----------------------------------------------------------------------------------------------------------------
(1) Formerly named US Value Fund.
(2) Capital loss carryover subject to annual limitations
Capital Loss Carryover Expiration Schedule
For the year ended February 29, 2004
Fund 2009 2010
- ---------------------------------------------------------
Focused Value Fund(1) -- --
International Equity Fund(2) $6,495,763 $1,299,153
- ---------------------------------------------------------
(1) Formerly named US Value Fund.
(2) Capital loss carryover subject to annual limitations
22 Janus Adviser August 31, 2004
5. 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.
6. 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 and offsets.
For the six month period ended August 31, 2004 (unaudited),
the two month fiscal period ended February 29, 2004 and for the
fiscal year ended December 31
Investor Shares Class I Shares Class C Shares Class A Shares
Fund 2004 2004 2003 2004 2004 2003 2004 2004 2003 2004 2004 2003
- -----------------------------------------------------------------------------------------------------------------------------------
Focused Value Fund*(1) 1.92% 2.07% 2.14% 2.06% 2.21% 2.16% 2.59% 2.72% 3.16% 1.84% 1.96% 2.11%
International Equity Fund* 2.36% 2.73% 3.24% 2.50% 2.87% 3.21% 3.01% 3.38% 5.85%(2) 2.26% 2.63% 3.21%
- -----------------------------------------------------------------------------------------------------------------------------------
* Annualized for periods of less than one year.
(1) Formerly named US Value Fund.
(2) Period from October 13, 2003 (inception date) to December 31, 2003.
Janus Adviser August 31, 2004 23
Notes to Financial Statements (unaudited) (continued)
7. FUND REORGANIZATION
Effective October 13, 2003, Vontobel US Value Fund and Vontobel International
Equity Fund participated in a tax-free reorganization with Focused Value Fund
(formerly 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 Focused 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
Focused 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 Focused Value Fund - Class A Shares and
International Equity Fund - Class A Shares, respectively. Existing Vontobel US
Value Fund Class C shareholders received Focused Value Fund - Class C Shares.
Vontobel US Value Fund - Class A Shares transferred net assets and shares
outstanding to Focused Value Fund - Investor Shares and Class I Shares as
detailed below.
Fund Net Assets Shares Transferred
- --------------------------------------------------------------------------------
Focused Value Fund - Investor Shares $63,503,746 3,003,063
Focused 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 Focused 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 Focused 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 August 31, 2004
8. CAPITAL SHARE TRANSACTIONS
For the six month period ended August 31, 2004 (unaudited), Focused Value International
the two month fiscal period ended February 29, 2004 and Fund(1)(2) Equity Fund(3)
for the fiscal year ended December 31, 2003
(all numbers in thousands) 2004 2004 2003 2004 2004 2003(4)
- ----------------------------------------------------------------------------------------------------------------------
Transactions in Fund Shares - Investor Shares:
Shares sold 476 435 249 290 170 182
Shares transferred N/A N/A 3,003 N/A N/A 1,757
Reinvested dividends and distributions 268 -- 83 28 -- 48
- ----------------------------------------------------------------------------------------------------------------------
Total 744 435 3,335 318 170 1,987
- ----------------------------------------------------------------------------------------------------------------------
Shares repurchased (412) (188) (490) (322) (83) (267)
Net Increase/(Decrease) in Fund Shares 332 247 2,845 (4) 87 1,720
Shares Outstanding, Beginning of Period 3,092 2,845 -- 1,807 1,720 --
- ----------------------------------------------------------------------------------------------------------------------
Shares Outstanding, End of Period 3,424 3,092 2,845 1,803 1,807 1,720
- ----------------------------------------------------------------------------------------------------------------------
Transactions in Fund Shares - Class I Shares:
Shares sold 3 2 5 1 -- 3
Shares transferred N/A N/A 320 N/A N/A 120
Reinvested dividends and distributions 17 -- 7 1 -- 2
- ----------------------------------------------------------------------------------------------------------------------
Total 20 2 332 2 -- 125
- ----------------------------------------------------------------------------------------------------------------------
Shares repurchased (41) (21) (56) (10) (11) (30)
Net Increase/(Decrease) in Fund Shares (21) (19) 276 (8) (11) 95
Shares Outstanding, Beginning of Period 257 276 -- 84 95 --
- ----------------------------------------------------------------------------------------------------------------------
Shares Outstanding, End of Period 236 257 276 76 84 95
- ----------------------------------------------------------------------------------------------------------------------
Transactions in Fund Shares - Class C Shares:
Shares sold 24 20 42 -- -- 1
Reinvested dividends and distributions 8 -- 2 -- -- --
- ----------------------------------------------------------------------------------------------------------------------
Total 32 20 44 -- -- 1
- ----------------------------------------------------------------------------------------------------------------------
Shares repurchased (1) -- (1) -- -- --
Net Increase/(Decrease) in Fund Shares 31 20 44 -- -- 1
Shares Outstanding, Beginning of Period 82 62 19 1 1 --
- ----------------------------------------------------------------------------------------------------------------------
Shares Outstanding, End of Period 113 82 62 1 1 1
- ----------------------------------------------------------------------------------------------------------------------
Transactions in Fund Shares - Class A Shares:
Shares sold 71 5 810 8 2 1,124
Reinvested dividends and distributions 18 -- 4 1 -- 3
- ----------------------------------------------------------------------------------------------------------------------
Total 89 5 814 9 2 1,127
- ----------------------------------------------------------------------------------------------------------------------
Shares repurchased (16) (12) (3,343) (14) (5) (1,599)
Shares transferred N/A N/A (3,323) N/A N/A (1,877)
Net Increase/(Decrease) in Fund Shares 73 (7) (5,852) (5) (3) (2,349)
Shares Outstanding, Beginning of Period 165 172 6,024 96 99 2,448
- ----------------------------------------------------------------------------------------------------------------------
Shares Outstanding, End of Period 238 165 172 91 96 99
- ----------------------------------------------------------------------------------------------------------------------
(1) Formerly named US Value Fund.
(2) Vontobel US Value Fund prior to reorganization (Note 1).
(3) Vontobel International Equity Fund prior to reorganization (Note 1).
(4) Commencement of operations of Class C Shares was October 13, 2003.
Janus Adviser August 31, 2004 25
Notes to Financial Statements (unaudited) (continued)
9. 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.
Subsequent to the announcements by the SEC and the NYAG, the Colorado Attorney
General ("COAG") and the Colorado Division of Securities announced that they
were each initiating investigations into Janus Capital's mutual fund trading
practices.
On August 18, 2004, Janus Capital announced that it had reached final
settlements with the NYAG, the COAG, the Colorado Division of Securities and the
SEC related to such regulators' investigations into Janus Capital's frequent
trading arrangements. Pursuant to such agreements, Janus Capital agreed to pay
$50 million in restoration to compensate investors for any adverse effects of
frequent trading and $50 million in civil penalties. Janus Capital also agreed
to reduce its management fees in the amount of $25 million per year for five
years. Specific fee reductions, effective July 1, 2004, were determined on a
fund-by-fund basis and were calculated using assets under management as of May
31, 2004. Therefore, the total reduction in revenue over a five-year period
could be greater than or less than $125 million, depending on whether assets
under management in the affected funds increase or decrease. Janus also agreed
to make $1.2 million in other settlement-related payments required by the COAG
and to implement certain corporate governance and compliance initiatives.
A number of civil lawsuits have also been brought against Janus Capital and
certain of its affiliates, the Janus funds, and related entities and
individuals. These actions generally allege that Janus Capital allowed certain
hedge funds and other investors to engage in "market timing" trades in certain
Janus funds. Such lawsuits allege a variety of theories for recovery including,
but not limited to the federal securities laws, other federal statutes
(including ERISA and RICO), and various common law doctrines.
The "market timing" lawsuits include actions purportedly brought 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 funds' 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 currently subject
to the federal transfer procedures. Janus Capital has appealed this decision to
the Seventh Circuit Court of Appeals.
In addition to the "market timing" actions described above, two civil lawsuits
have been filed against Janus Capital challenging the investment advisory fees
charged by Janus Capital to certain funds managed by Janus Capital. These
lawsuits are currently pending in the U.S. District Court for the Western
District of Missouri and the U.S. District Court for the District of Colorado.
Additional lawsuits may be filed against certain Janus funds, Janus Capital and
related parties in the future. Janus Capital does not currently believe that
these pending actions will materially affect its ability to continue to provide
to the Funds the services it has agreed to provide.
26 Janus Adviser August 31, 2004
Explanations of Charts, Tables and Financial Statements (unaudited)
1. PERFORMANCE OVERVIEWS
Performance overview graphs compare the performance of a hypothetical $10,000
investment in each Fund (from inception) with one or more widely used market
indices through August 31, 2004. The hypothetical example does not represent the
returns of any particular investment.
When comparing the performance of a Fund with an index, keep in mind that market
indices do not include brokerage commissions that would be incurred if you
purchased the individual securities in the index. They also do not include taxes
payable on dividends and interest or operating expenses incurred if you
maintained a Fund invested in the index.
Average annual total returns are 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.). Holdings are subject to change without notice.
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 August 31, 2004. This summary reports the Fund's exposure to
different countries by providing the percentage of securities invested in each
country. The country of each security represents the country in which the
company is incorporated.
2A. FORWARD CURRENCY CONTRACTS
A table listing forward currency contracts follows each Fund's Schedule of
Investments (if applicable). Forward currency contracts are agreements to
deliver or receive a preset amount of currency at a future date. Forward
currency contracts are used to hedge against foreign currency risk in the Fund's
long-term holdings.
The table provides the name of the foreign currency, the settlement date of the
contract, the amount of the contract, the value of the currency in U.S. dollars
and the amount of unrealized gain or loss. The amount of unrealized gain or loss
reflects the change in currency exchange rates from the time the contract was
opened to the last day of the reporting period.
2B. FUTURES
A table listing futures contracts follows each Fund's Schedule of Investments
(if applicable). Futures contracts are contracts that obligate the buyer to
receive and the seller to deliver an instrument or money at a specified price on
a specified date. Futures are used to hedge against adverse movements in
securities prices, currency risk or interest rates.
The table provides the name of the contract, number of contracts held, the
expiration date, the principal amount, value and the amount of unrealized gain
or loss. The amount of unrealized gain or loss reflects the marked to market
amount for the last day of the 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 section entitled "Net Assets Consist of" breaks down the components of the
Fund net assets. Because Funds must distribute substantially all earnings,
you'll notice that a significant portion of net assets is shareholder capital.
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.
Janus Adviser August 31, 2004 27
Explanations of Charts, Tables and Financial Statements (unaudited) (continued)
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) 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 the 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 portfolio turnover
rate.
The first line in the table reflects the NAV per share at the beginning of the
reporting period. The next line reports the net investment income per share,
which comprises dividends and interest income earned on securities held by the
Funds. Following is the total of gains, 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 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,
average shareholder account size, 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 portfolio turnover rate, which measures the buying and
selling activity in a Fund. Portfolio 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 portfolio is turned over in a year; a 50% rate
means that an amount equal to the value of half the portfolio is traded in a
year; and a 200% rate means that an amount equal to the value of the portfolio
is sold every six months.
28 Janus Adviser August 31, 2004
Notes
Janus Adviser August 31, 2004 29
Janus provides access to a wide range of investment disciplines.
- --------------------------------------------------------------------------------
Growth
Janus growth funds focus on companies believed to be the leaders in their
respective industries, with solid management teams, expanding market share,
margins and efficiencies.
International/Global
Janus international and global funds seek to leverage Janus' research
capabilities by taking advantage of inefficiencies in foreign markets, where
accurate information and analytical insight are often at a premium.
Core
Janus core funds seek investments in more stable and predictable companies.
These funds look for a strategic combination of steady growth and for certain
funds, some degree of income.
Risk-Managed
Janus risk-managed funds seek to outperform their respective indices while
maintaining a risk profile equal to or lower than the index itself. Managed by
INTECH, these funds use a mathematical process in an attempt to build a more
"efficient" portfolio than the index.
Value
Janus value funds invest in companies they believe are poised for a turnaround
or are trading at a significant discount to fair value. The goal is to gain
unique insight into a company's true value and identify and evaluate potential
catalysts that may unlock shareholder value.
Income
Janus income funds attempt to provide less risk relative to equities while
seeking to deliver a competitive total return through high current income and
appreciation.
For more information about our funds go to www.janus.com.
[LOGO] JANUS CAPITAL | 151 Detroit Street
Group | Denver, CO 80206
| 1-800-525-3713
This material must be preceded or accompanied by a prospectus.
Funds distributed by Janus Distributors LLC (9/04)
C-0904-155 119-24-100 10-04
- -------------------
Item 2 - Code of Ethics
Not applicable to semi-annual reports.
Item 3 - Audit Committee Financial Expert
Not applicable to semi-annual reports.
Item 4 - Principal Accountant Fees and Services
Not applicable to semi-annual reports.
Item 5 - Audit Committee of Listed Registrants
Not applicable.
Item 6 - Schedule of Investments
Please see Schedule of Investments contained in the Report to
Shareholders included under Item 1 of this Form N-CSR.
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies
Not applicable.
Item 8 - 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
There have been no material changes to the procedures by which
shareholders may recommend nominees to the Registrant's Board of
Directors.
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 last 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 to semi-annual reports.
(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: October 25, 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: October 25, 2004
By: _/s/ Loren M. Starr________
Loren M. Starr,
Vice President and Chief Financial Officer (Principal Financial Officer)
Date: October 25, 2004