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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT
COMPANIES
Investment Company Act file number 811-1879
Janus Investment Fund
(Exact name of registrant as specified in charter)
151 Detroit Street,
Denver, Colorado 80206
(Address of principal executive offices) (Zip code)
Stephanie Grauerholz,
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: 9/30
Date of reporting period:
3/31/16
Item 1 - Reports to Shareholders
SEMIANNUAL REPORT March 31, 2016 | |||
Janus Asia Equity Fund | |||
Janus Investment Fund | |||
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HIGHLIGHTS · Portfolio management perspective · Investment strategy behind your fund · Fund performance, characteristics | |||
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Table of Contents
Janus Asia Equity Fund
Janus Asia Equity Fund (unaudited)
PERFORMANCE SUMMARY
Janus Asia Equity Fund’s Class I Shares returned 5.82% for the six-month period ended March 31, 2016. The Fund’s benchmark, the MSCI All Country Asia ex-Japan Index, returned 5.66%.
MARKET ENVIRONMENT
During the latter part of 2015, Asian financial market took a beating, in part on concerns about growth in the continent’s largest economy – China – and also due to foreign currency headwinds as global investors redirected capital toward the U.S. in expectation of a period of rising interest rates. This trend reversed as consensus coalesced around the idea that the Federal Reserve (Fed) would be much less aggressive in raising rates than it had previously inferred. The shift increased demand for Asian government debt, largely due to the highly attractive yield differentials when compared to developed market sovereigns. The clamoring for currencies to purchase the region’s financial assets resulted in many currencies appreciating steadily, further boosting stock returns when priced in U.S. dollars.
As sentiment – and flows – reversed, many of the region’s stock indices rallied and ultimately delivered returns that outpaced the broader market. Among the strongest performers were Malaysia, Indonesia and South Korea. While they stabilized after the early period descent, mainland Chinese shares were unable to make up all the lost ground and finished the period just in negative territory. Also lagging in the rebound was region’s second economic powerhouse, India. On a sector basis, previously hard-hit energy and materials led sectors higher while health care and industrial stocks weighed down indices.
PERFORMANCE DISCUSSION
On a country basis, Fund’s selection of Chinese and Indian stocks contributed to relative performance, as did our selection of financials stocks. A combination of an overweight to technology along with strong stock selection in the sector also aided relative results. Holdings in Hong Kong and Singapore, and on a sector basis, energy and health care weighed on relative returns.
Taiwan Semiconductor (TSMC) shrugged off any concern about softness in Apple’s supply chain to deliver a relatively favorable earnings report, which covered the first part of the period. For 2015, revenues grew by 10.6%, which can be considered an achievement given the challenging market environment. While the company sees the markets for many of its products declining, it does expect smartphone units to rise by 8% in 2016. On a longer time horizon, TSMC expects to gain market share by introducing high-demand, cutting-edge technologies, including those based on increasingly powerful yet energy efficient transistors.
Samsung of Korea was a solid contributor to Fund performance. Sales for the company’s newest smartphone – the Galaxy 7 – has been better-than-expected and the handset has received favorable reviews. We see the real possibility that sales data for this product will beat guidance over the near-term. Buttressing the launch is fairly weak competition in the Android market for higher-end devices.
Another leading contributor was China’s Tencent Holdings. Among other products, the company provides a word-chat SMS service that also enables sending pictures. The company has been expanding into Singapore, Taiwan and Hong Kong and has experienced impressive user growth. Seventy percent of revenue is from smartphone games. This channel has become especially lucrative as Tencent gets 70% of game revenue and the supplier receives only 30%. Profitability has improved and earnings continue to grow – even from a relatively high base – due to effective monetization.
A cut in orders from Apple hurt electronic components supplier Catcher Technology. The company is an integral part of Apple’s supply chain with roughly half of its sales attributable to the phone and computer giant. While lower
Janus Investment Fund | 1 |
Janus Asia Equity Fund (unaudited)
orders hurt Catcher’s stock price, what was overlooked is how the company has gained market share across its lines of business. Also making the stock attractive to us is management’s commitment to curtail capital expenditure, preferring instead to grow free cash flow, which may be used, in part, to increase its dividend.
Also delivering negative returns was Daqin Railway. The company mainly provides coal transportation service in northern China. It also operates a passenger transportation business. We exited our position in Daqin during the period.
Being the country’s largest insurance group, China Life Insurance weighed on results, largely as a consequence of it being caught up in the region’s market volatility. Although premium sales have experienced some near-term headwinds, the long-term growth outlook is more optimistic given the current low penetration of insurance products within the country.
Please see the Derivative instruments section in the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
OUTLOOK
We believe there are many reasons to favor Asia stocks as we forge deeper into 2016. Much of the boost provided by recently appreciating regional currencies may be behind us, but we still see the potential for additional gains as global interest rate differentials – mainly between developed market funding currencies and attractive emerging market destinations – become more solidified over the course of the year. We are in the camp that sees global growth continuing to decelerate, but not to the degree that it had in 2015. We think Chinese GDP growth landing at the midpoint of official targets, roughly around 6.7%, is entirely plausible. The mix of this growth is important, too, as a shift in emphasis back toward infrastructure and housing stands to boost exports from the region’s materials producers to their massive trading partner.
We have long favored secular growth stories in China that are linked to the expanding consumer class. This is why we prefer autos and Internet names. At present, we also are sanguine about the prospects of more cyclical sectors such as steel, as it is our view that recent industrial weakness has largely played out. Easier financing for capital equipment should help a recovery in the sector. Added to this are the relatively attractive valuations that the past three quarters’ downdrafts have brought investors.
Thank you for your investment in Janus Asia Equity Fund.
2 | MARCH 31, 2016 |
Janus Asia Equity Fund (unaudited)
Fund At A Glance
March 31, 2016
5 Top Performers - Holdings |
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| 5 Bottom Performers - Holdings |
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Contribution | Contribution | |||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 1.15% | China Life Insurance Co., Ltd. - Class H | -0.41% | |||
Samsung Electronics Co., Ltd. | 1.13% | Daqin Railway Co., Ltd. - Class A | -0.31% | |||
Tencent Holdings, Ltd. | 0.66% | Catcher Technology Co., Ltd. | -0.29% | |||
China Vanke Co., Ltd. - Class A | 0.60% | SK Hynix, Inc. | -0.24% | |||
Bank Mandiri Persero Tbk PT | 0.41% | China Mobile, Ltd. | -0.18% | |||
5 Top Performers - Sectors* |
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Fund Weighting | MSCI All Country Asia ex-Japan Index | |||||
Fund Contribution | (Average % of Equity) | Weighting | ||||
Financials | 1.20% | 31.89% | 31.90% | |||
Information Technology | 0.87% | 28.93% | 22.89% | |||
Consumer Discretionary | 0.39% | 13.14% | 8.64% | |||
Consumer Staples | 0.17% | 1.91% | 5.66% | |||
Utilities | 0.15% | 2.78% | 4.20% | |||
5 Bottom Performers - Sectors* |
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Fund Weighting | MSCI All Country Asia ex-Japan Index | |||||
Fund Contribution | (Average % of Equity) | Weighting | ||||
Energy | -0.39% | 2.44% | 4.19% | |||
Other** | -0.23% | 4.93% | 0.00% | |||
Health Care | -0.15% | 2.24% | 2.69% | |||
Materials | -0.03% | 1.68% | 4.36% | |||
Telecommunication Services | 0.00% | 3.74% | 6.53% | |||
Security contribution to performance is measured by using an algorithm that multiplies the daily performance of each security with the previous day’s ending weight in the portfolio and is gross of advisory fees. Fixed income securities and certain equity securities, such as private placements and some share classes of equity securities, are excluded. | ||||||
* | Based on sector classification according to the Global Industry Classification Standard (“GICS”) codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |||||
** | Not a GICS classified sector. | |||||
Janus Investment Fund | 3 |
Janus Asia Equity Fund (unaudited)
Fund At A Glance
March 31, 2016
5 Largest Equity Holdings - (% of Net Assets) | |
Taiwan Semiconductor Manufacturing Co., Ltd. | |
Semiconductor & Semiconductor Equipment | 5.3% |
Samsung Electronics Co., Ltd. | |
Technology Hardware, Storage & Peripherals | 5.2% |
Tencent Holdings, Ltd. | |
Internet Software & Services | 3.6% |
China Mobile, Ltd. | |
Wireless Telecommunication Services | 2.4% |
AIA Group, Ltd. | |
Insurance | 2.3% |
18.8% | |
Asset Allocation - (% of Net Assets) | |||||
Common Stocks | 94.5% | ||||
Investment Companies | 2.2% | ||||
Preferred Stocks | 1.3% | ||||
OTC Purchased Options – Calls | 0.1% | ||||
Other | 1.9% | ||||
100.0% | |||||
Emerging markets comprised 79.7% of total net assets.
Top Country Allocations - Long Positions - (% of Investment Securities) | |
As of March 31, 2016
| As of September 30, 2015
|
4 | MARCH 31, 2016 |
Janus Asia Equity Fund (unaudited)
Performance
See important disclosures on the next page. |
| Expense Ratios - | ||||||||
Average Annual Total Return - for the periods ended March 31, 2016 |
|
| per the January 28, 2016 prospectuses | ||||||
|
| Fiscal
| One
| Since |
|
| Total Annual Fund
| Net Annual Fund
| |
Class A Shares at NAV |
| 5.61% | -12.32% | -0.31% |
|
| 2.87% | 1.45% | |
Class A Shares at MOP |
| -0.49% | -17.36% | -1.56% |
|
|
|
| |
Class C Shares at NAV | 5.25% | -13.01% | -1.01% |
|
| 3.59% | 2.11% | ||
Class C Shares at CDSC |
| 4.25% | -13.84% | -1.01% |
|
|
|
| |
Class D Shares(1) |
| 5.79% | -12.19% | -0.16% |
|
| 2.75% | 1.24% | |
Class I Shares |
| 5.82% | -12.05% | -0.01% |
|
| 2.56% | 1.09% | |
Class S Shares |
| 5.49% | -12.24% | -0.37% |
|
| 3.06% | 1.59% | |
Class T Shares |
| 5.67% | -12.21% | -0.19% |
|
| 2.73% | 1.35% | |
MSCI All Country Asia ex-Japan Index |
| 5.66% | -11.85% | -0.27% |
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Morningstar Quartile - Class I Shares |
| - | 2nd | 3rd |
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Morningstar Ranking - based on total returns for Pacific/Asia ex-Japan Stock Funds |
| - | 47/94 | 40/77 |
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Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
This Fund has a performance-based management fee that may adjust up or down based on the Fund’s performance.
Janus Investment Fund | 5 |
Janus Asia Equity Fund (unaudited)
Performance
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility, lower liquidity and differing financial and information reporting standards, all of which are magnified in emerging markets.
The Fund will normally invest at least 80% of its net assets, measured at the time of purchase, in the type of securities described by its name.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
See Financial Highlights for actual expense ratios during the reporting period.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2016 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An index is unmanaged and is not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
*The Fund’s inception date – July 29, 2011
(1) Closed to certain new investors.
6 | MARCH 31, 2016 |
Janus Asia Equity Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, 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 appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Actual | Hypothetical
| |||||||||
| Beginning | Ending | Expenses |
| Beginning | Ending | Expenses | Net Annualized | ||
Class A Shares | $1,000.00 | $1,056.10 | $8.22 |
| $1,000.00 | $1,017.00 | $8.07 | 1.60% | ||
Class C Shares | $1,000.00 | $1,052.50 | $11.75 |
| $1,000.00 | $1,013.55 | $11.53 | 2.29% | ||
Class D Shares | $1,000.00 | $1,057.90 | $7.20 |
| $1,000.00 | $1,018.00 | $7.06 | 1.40% | ||
Class I Shares | $1,000.00 | $1,058.20 | $6.48 |
| $1,000.00 | $1,018.70 | $6.36 | 1.26% | ||
Class S Shares | $1,000.00 | $1,054.90 | $8.48 |
| $1,000.00 | $1,016.75 | $8.32 | 1.65% | ||
Class T Shares | $1,000.00 | $1,056.70 | $7.66 |
| $1,000.00 | $1,017.55 | $7.52 | 1.49% | ||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. | |||||||||
Janus Investment Fund | 7 |
Janus Asia Equity Fund
Schedule of Investments (unaudited)
March 31, 2016
Shares
or | Value | ||||||
Common Stocks – 94.5% | |||||||
Airlines – 0.6% | |||||||
China Eastern Airlines Corp., Ltd.* | 92,000 | $51,591 | |||||
Auto Components – 0.6% | |||||||
Hyundai Mobis Co., Ltd. | 257 | 55,967 | |||||
Automobiles – 6.1% | |||||||
Astra International Tbk PT | 143,700 | 78,599 | |||||
Chongqing Changan Automobile Co., Ltd. - Class B | 104,400 | 195,554 | |||||
Great Wall Motor Co., Ltd. - Class H | 53,500 | 43,451 | |||||
Hyundai Motor Co. | 733 | 97,763 | |||||
Mahindra & Mahindra, Ltd. | 2,649 | 48,434 | |||||
Yulon Motor Co., Ltd. | 71,000 | 68,952 | |||||
532,753 | |||||||
Capital Markets – 1.6% | |||||||
CITIC Securities Co., Ltd. - Class H | 37,000 | 86,715 | |||||
Haitong International Securities Group, Ltd. | 96,359 | 55,651 | |||||
142,366 | |||||||
Commercial Banks – 13.3% | |||||||
Axis Bank, Ltd. | 14,704 | 98,626 | |||||
Bangkok Bank PCL (NVDR) | 11,200 | 57,322 | |||||
Bank Mandiri Persero Tbk PT | 90,500 | 70,324 | |||||
Bank of China, Ltd. - Class H | 106,000 | 44,001 | |||||
BOC Hong Kong Holdings, Ltd. | 25,000 | 74,609 | |||||
China Construction Bank Corp. - Class H | 266,000 | 169,741 | |||||
DBS Group Holdings, Ltd. | 12,300 | 140,389 | |||||
Hana Financial Group, Inc. | 8,570 | 185,881 | |||||
Industrial & Commercial Bank of China, Ltd. - Class H | 288,000 | 161,132 | |||||
Metropolitan Bank & Trust Co. | 30,354 | 54,383 | |||||
Shinhan Financial Group Co., Ltd. | 2,820 | 99,886 | |||||
1,156,294 | |||||||
Construction & Engineering – 0.6% | |||||||
Louis XIII Holdings, Ltd.* | 102,371 | 28,110 | |||||
Voltas, Ltd. | 6,201 | 26,043 | |||||
54,153 | |||||||
Construction Materials – 0.5% | |||||||
BBMG Corp. - Class H | 61,000 | 47,104 | |||||
Diversified Telecommunication Services – 1.9% | |||||||
China Telecom Corp., Ltd. - Class H | 123,894 | 65,484 | |||||
KT Corp. | 1,690 | 44,046 | |||||
Singapore Telecommunications, Ltd. | 19,000 | 53,863 | |||||
163,393 | |||||||
Electric Utilities – 1.7% | |||||||
Power Grid Corp. of India, Ltd. | 38,117 | 80,071 | |||||
Tenaga Nasional Bhd | 18,500 | 66,177 | |||||
146,248 | |||||||
Electrical Equipment – 0.3% | |||||||
Finolex Cables, Ltd. | 5,767 | 24,490 | |||||
Electronic Equipment, Instruments & Components – 5.6% | |||||||
Chroma ATE, Inc. | 20,000 | 43,011 | |||||
Delta Electronics, Inc. | 11,577 | 51,089 | |||||
Hangzhou Hikvision Digital Technology Co., Ltd.ß | 15,900 | 75,768 | |||||
Hon Hai Precision Industry Co., Ltd. | 49,577 | 130,652 | |||||
Largan Precision Co., Ltd. | 1,000 | 77,537 | |||||
TPK Holding Co., Ltd. | 17,000 | 36,982 | |||||
WPG Holdings, Ltd. | 67,000 | 71,418 | |||||
486,457 | |||||||
Food & Staples Retailing – 0.6% | |||||||
Robinsons Retail Holdings, Inc. | 32,270 | 51,890 | |||||
Food Products – 0.8% | |||||||
San Miguel Pure Foods Co., Inc. | 18,000 | 68,057 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
8 | MARCH 31, 2016 |
Janus Asia Equity Fund
Schedule of Investments (unaudited)
March 31, 2016
Shares
or | Value | ||||||
Common Stocks – (continued) | |||||||
Hotels, Restaurants & Leisure – 1.3% | |||||||
Genting Malaysia Bhd | 74,100 | $86,326 | |||||
Melco International Development, Ltd. | 18,000 | 25,061 | |||||
111,387 | |||||||
Household Durables – 1.4% | |||||||
Midea Group Co., Ltd. - Class Aß | 26,300 | 125,449 | |||||
Independent Power and Renewable Electricity Producers – 1.2% | |||||||
Beijing Jingneng Clean Energy Co., Ltd. - Class H | 333,021 | 106,469 | |||||
Industrial Conglomerates – 3.6% | |||||||
CK Hutchison Holdings, Ltd. | 7,340 | 95,285 | |||||
Keppel Corp., Ltd. | 12,100 | 52,351 | |||||
Seibu Holdings, Inc. | 6,669 | 141,108 | |||||
Shun Tak Holdings, Ltd. | 67,500 | 22,363 | |||||
311,107 | |||||||
Information Technology Services – 1.6% | |||||||
Cognizant Technology Solutions Corp. - Class A* | 1,825 | 114,428 | |||||
Samsung SDS Co., Ltd. | 135 | 20,662 | |||||
135,090 | |||||||
Insurance – 5.6% | |||||||
AIA Group, Ltd. | 35,200 | 199,435 | |||||
Cathay Financial Holding Co., Ltd. | 47,000 | 56,307 | |||||
China Life Insurance Co., Ltd. - Class H | 35,000 | 86,360 | |||||
Hyundai Marine & Fire Insurance Co., Ltd. | 1,791 | 52,004 | |||||
Ping An Insurance Group Co. of China, Ltd. - Class H | 18,500 | 88,480 | |||||
482,586 | |||||||
Internet & Catalog Retail – 1.2% | |||||||
Ctrip.com International, Ltd. (ADR)* | 998 | 44,172 | |||||
JD.com, Inc. (ADR)*,# | 2,279 | 60,394 | |||||
104,566 | |||||||
Internet Software & Services – 7.8% | |||||||
Alibaba Group Holding, Ltd. (ADR)*,# | 2,303 | 182,006 | |||||
Baidu, Inc. (ADR)* | 473 | 90,286 | |||||
NAVER Corp. | 164 | 91,366 | |||||
Tencent Holdings, Ltd. | 15,200 | 310,384 | |||||
674,042 | |||||||
Marine – 1.2% | |||||||
First Steamship Co., Ltd. | 210,411 | 57,935 | |||||
SITC International Holdings Co., Ltd. | 90,000 | 44,437 | |||||
102,372 | |||||||
Metals & Mining – 1.2% | |||||||
Hindustan Zinc, Ltd. | 11,989 | 33,242 | |||||
POSCO | 377 | 72,373 | |||||
105,615 | |||||||
Multiline Retail – 0.7% | |||||||
Lifestyle International Holdings, Ltd. | 43,500 | 58,657 | |||||
Oil, Gas & Consumable Fuels – 2.4% | |||||||
China Petroleum & Chemical Corp. - Class H | 90,400 | 59,318 | |||||
PetroChina Co., Ltd. - Class H | 130,000 | 86,476 | |||||
Reliance Industries, Ltd. | 3,768 | 59,475 | |||||
205,269 | |||||||
Pharmaceuticals – 2.5% | |||||||
China Traditional Chinese Medicine Co., Ltd.* | 54,058 | 26,551 | |||||
Yunnan Baiyao Group Co., Ltd. - Class Aß | 20,300 | 192,404 | |||||
218,955 | |||||||
Real Estate Management & Development – 5.7% | |||||||
Belle Corp. | 621,121 | 40,355 | |||||
Central China Real Estate, Ltd. | 387,440 | 73,921 | |||||
Century Properties Group, Inc. | 3,806,102 | 45,488 | |||||
Cheung Kong Property Holdings, Ltd. | 8,353 | 53,787 | |||||
China Overseas Land & Investment, Ltd. | 14,000 | 44,308 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 9 |
Janus Asia Equity Fund
Schedule of Investments (unaudited)
March 31, 2016
Shares
or | Value | ||||||
Common Stocks – (continued) | |||||||
Real Estate Management & Development – (continued) | |||||||
China Vanke Co., Ltd. - Class Aß | 14,900 | $46,404 | |||||
CSI Properties, Ltd. | 2,740,000 | 77,710 | |||||
Siam Future Development PCL | 284,200 | 48,081 | |||||
Sun Hung Kai Properties, Ltd. | 5,000 | 61,138 | |||||
491,192 | |||||||
Semiconductor & Semiconductor Equipment – 8.2% | |||||||
Hua Hong Semiconductor, Ltd. (144A) | 73,260 | 73,193 | |||||
SK Hynix, Inc. | 7,273 | 179,058 | |||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 91,000 | 458,139 | |||||
710,390 | |||||||
Software – 0.5% | |||||||
Nexon Co., Ltd. | 2,800 | 47,749 | |||||
Specialty Retail – 1.8% | |||||||
L'Occitane International SA | 31,206 | 55,677 | |||||
PC Jeweller, Ltd. | 18,153 | 99,664 | |||||
155,341 | |||||||
Technology Hardware, Storage & Peripherals – 6.2% | |||||||
Catcher Technology Co., Ltd. | 10,000 | 82,044 | |||||
Samsung Electronics Co., Ltd. | 397 | 455,540 | |||||
537,584 | |||||||
Textiles, Apparel & Luxury Goods – 0.5% | |||||||
Belle International Holdings, Ltd. | 78,000 | 45,148 | |||||
Thrifts & Mortgage Finance – 2.0% | |||||||
Housing Development Finance Corp., Ltd. | 4,473 | 74,683 | |||||
LIC Housing Finance, Ltd. | 13,656 | 101,702 | |||||
176,385 | |||||||
Tobacco – 0.5% | |||||||
ITC, Ltd. | 8,768 | 43,464 | |||||
Transportation Infrastructure – 0.8% | |||||||
Shanghai International Airport Co., Ltd.ß | 15,700 | 73,043 | |||||
Wireless Telecommunication Services – 2.4% | |||||||
China Mobile, Ltd. | 19,000 | 211,748 | |||||
Total Common Stocks (cost $8,644,597) | 8,214,371 | ||||||
Preferred Stocks – 1.3% | |||||||
Technology Hardware, Storage & Peripherals – 1.3% | |||||||
Samsung Electronics Co., Ltd. (cost $107,787) | 116 | 112,307 | |||||
Investment Companies – 2.2% | |||||||
Investments Purchased with Cash Collateral from Securities Lending – 2.2% | |||||||
Janus Cash Collateral Fund LLC, 0.4107%ºº,£ (cost $186,200) | 186,200 | 186,200 | |||||
OTC Purchased Options – Calls – 0.1% | |||||||
Counterparty/Reference Asset | |||||||
Goldman Sachs International: | |||||||
CNH Currency, exercise price CNH 6.40, expires November 2016* (premiums paid $10,438) | 344,497 | 10,827 | |||||
Total Investments (total cost $8,949,022) – 98.1% | 8,523,705 | ||||||
Cash, Receivables and Other Assets, net of Liabilities – 1.9% | 165,740 | ||||||
Net Assets – 100% | $8,689,445 | ||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
10 | MARCH 31, 2016 |
Janus Asia Equity Fund
Schedule of Investments (unaudited)
March 31, 2016
Summary of Investments by Country - (Long Positions) (unaudited) | |||||
% of | |||||
Investment | |||||
Country | Value | Securities | |||
China | $2,967,055 | 34.8 | % | ||
South Korea | 1,466,853 | 17.2 | |||
Taiwan | 1,134,066 | 13.3 | |||
Hong Kong | 796,243 | 9.3 | |||
India | 689,894 | 8.1 | |||
United States | 311,455 | 3.7 | |||
Philippines | 260,173 | 3.1 | |||
Singapore | 246,603 | 2.9 | |||
Japan | 188,857 | 2.2 | |||
Malaysia | 152,503 | 1.8 | |||
Indonesia | 148,923 | 1.7 | |||
Thailand | 105,403 | 1.2 | |||
France | 55,677 | 0.7 | |||
Total | $8,523,705 | 100.0 | % |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 11 |
Janus Asia Equity Fund
Notes to Schedule of Investments and Other Information (unaudited)
MSCI All Country Asia ex-Japan Index | A free float-adjusted, market capitalization weighted index that is designed to measure the equity market performance of Asia, excluding Japan. |
ADR | American Depositary Receipt |
LLC | Limited Liability Company |
NVDR | Non-Voting Depositary Receipt |
OTC | Over-the-Counter |
PCL | Public Company Limited |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. These securities have been determined to be liquid under guidelines established by the Board of Trustees. The total value of 144A securities as of the period ended March 31, 2016 is $73,193, which represents 0.8% of net assets. |
* | Non-income producing security. |
ß | Security is illiquid. |
ºº | Rate shown is the 7-day yield as of March 31, 2016. |
# | Loaned security; a portion of the security is on loan at March 31, 2016. |
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. The following securities were considered affiliated companies for all or some portion of the period ended March 31, 2016. Unless otherwise indicated, all information in the table is for the period ended March 31, 2016. |
Share | Share | |||||||||||||
Balance | Balance | Realized | Dividend | Value | ||||||||||
at 9/30/15 | Purchases | Sales | at 3/31/16 | Gain/(Loss) | Income | at 3/31/16 | ||||||||
Janus Cash Collateral Fund LLC | — | 380,718 | (194,518) | 186,200 | $— | $50(1) | $186,200 | |||||||
Janus Cash Liquidity Fund LLC | — | 3,262,075 | (3,262,075) | — | — | 148 | — | |||||||
Total | $— | $198 | $186,200 |
(1) Net of income paid to the securities lending agent and rebates paid to the borrowing counterparties.
12 | MARCH 31, 2016 |
Janus Asia Equity Fund
Notes to Schedule of Investments and Other Information (unaudited)
The following is a summary of the inputs that were used to value the Fund's investments in securities and other financial instruments as of March 31, 2016. See Notes to Financial Statements for more information. | |||
Valuation Inputs Summary | |||
| Level
1 - | Level 2 - | Level 3 - |
Assets | |||
Investments in Securities: | |||
Common Stocks | |||
Real Estate Management & Development | $ 444,788 | $ - | $ 46,404 |
All Other | 7,723,179 | - | |
Preferred Stocks | - | 112,307 | - |
Investment Companies | - | 186,200 | - |
OTC Purchased Options - Calls | - | 10,827 | - |
Total Assets | $ 8,167,967 | $ 309,334 | $ 46,404 |
Janus Investment Fund | 13 |
Janus Asia Equity Fund
Statement of Assets and Liabilities (unaudited)
March 31, 2016
See footnotes at the end of the Statement. |
|
|
|
|
|
|
|
Assets: | ||||||
Investments, at cost | $ | 8,949,022 | ||||
Unaffiliated investments, at value(1) | 8,337,505 | |||||
Affiliated investments, at value | 186,200 | |||||
Restricted cash (Note 1) | 394,819 | |||||
Non-interested Trustees' deferred compensation | 167 | |||||
Receivables: | ||||||
Investments sold | 192,142 | |||||
Due from adviser | 16,336 | |||||
Dividends | 16,028 | |||||
Fund shares sold | 100 | |||||
Other assets | 798 | |||||
Total Assets |
|
| 9,144,095 |
| ||
Liabilities: | ||||||
Due to custodian | 70,752 | |||||
Collateral for securities loaned (Note 3) | 186,200 | |||||
Payables: | — | |||||
Investments purchased | 158,680 | |||||
Professional fees | 9,517 | |||||
Advisory fees | 6,334 | |||||
Transfer agent fees and expenses | 1,734 | |||||
Custodian fees | 1,255 | |||||
Fund shares repurchased | 1,152 | |||||
Foreign tax liability | 542 | |||||
12b-1 Distribution and shareholder servicing fees | 454 | |||||
Non-interested Trustees' deferred compensation fees | 167 | |||||
Fund administration fees | 69 | |||||
Non-interested Trustees' fees and expenses | 61 | |||||
Accrued expenses and other payables | 17,733 | |||||
Total Liabilities |
|
| 454,650 |
| ||
Net Assets |
| $ | 8,689,445 |
| ||
See Notes to Financial Statements. | |
14 | MARCH 31, 2016 |
Janus Asia Equity Fund
Statement of Assets and Liabilities (unaudited)
March 31, 2016
|
|
|
|
|
|
|
Net Assets Consist of: | ||||||
Capital (par value and paid-in surplus) | $ | 10,097,640 | ||||
Undistributed net investment income/(loss) | (48,262) | |||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | (898,853) | |||||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation(2) | (461,080) | |||||
Total Net Assets |
| $ | 8,689,445 |
| ||
Net Assets - Class A Shares | $ | 313,612 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 37,394 | |||||
Net Asset Value Per Share(3) |
| $ | 8.39 |
| ||
Maximum Offering Price Per Share(4) |
| $ | 8.90 |
| ||
Net Assets - Class C Shares | $ | 387,495 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 46,452 | |||||
Net Asset Value Per Share(3) |
| $ | 8.34 |
| ||
Net Assets - Class D Shares | $ | 4,848,518 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 574,662 | |||||
Net Asset Value Per Share |
| $ | 8.44 |
| ||
Net Assets - Class I Shares | $ | 2,576,596 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 305,049 | |||||
Net Asset Value Per Share |
| $ | 8.45 |
| ||
Net Assets - Class S Shares | $ | 327,514 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 39,024 | |||||
Net Asset Value Per Share |
| $ | 8.39 |
| ||
Net Assets - Class T Shares | $ | 235,710 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 28,344 | |||||
Net Asset Value Per Share |
| $ | 8.32 |
| ||
(1) Includes $182,083 of securities on loan. See Note 3 in Notes to Financial Statements. (2) Includes $542 of foreign capital gains tax on investments. (3) Redemption price per share may be reduced for any applicable contingent deferred sales charge. (4) Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements. | |
Janus Investment Fund | 15 |
Janus Asia Equity Fund
Statement of Operations (unaudited)
For the period ended March 31, 2016
|
|
|
|
|
|
Investment Income: | |||||
| Dividends | $ | 43,435 | ||
Dividends from affiliates | 148 | ||||
Affiliated securities lending income, net | 50 | ||||
Other income | 1,977 | ||||
Foreign tax withheld | (5,940) | ||||
Total Investment Income |
| 39,670 |
| ||
Expenses: | |||||
Advisory fees | 42,461 | ||||
12b-1Distribution and shareholder servicing fees: | |||||
Class A Shares | 466 | ||||
Class C Shares | 1,888 | ||||
Class S Shares | 397 | ||||
Transfer agent administrative fees and expenses: | |||||
Class D Shares | 3,166 | ||||
Class S Shares | 397 | ||||
Class T Shares | 483 | ||||
Transfer agent networking and omnibus fees: | |||||
Class A Shares | 200 | ||||
Class C Shares | 86 | ||||
Class I Shares | 451 | ||||
Other transfer agent fees and expenses: | |||||
Class A Shares | 68 | ||||
Class C Shares | 68 | ||||
Class D Shares | 1,714 | ||||
Class I Shares | 192 | ||||
Class S Shares | 18 | ||||
Class T Shares | 30 | ||||
Registration fees | 36,855 | ||||
Professional fees | 32,747 | ||||
Accounting systems fee | 10,339 | ||||
Custodian fees | 7,952 | ||||
Shareholder reports expense | 6,054 | ||||
Fund administration fees | 385 | ||||
Non-interested Trustees’ fees and expenses | 119 | ||||
Other expenses | 258 | ||||
Total Expenses |
| 146,794 |
| ||
Less: Excess Expense Reimbursement |
| (81,446) |
| ||
Net Expenses |
| 65,348 |
| ||
Net Investment Income/(Loss) |
| (25,678) |
| ||
Net Realized Gain/(Loss) on Investments: | |||||
Investments and foreign currency transactions | (737,792) | ||||
Total Net Realized Gain/(Loss) on Investments |
| (737,792) |
| ||
Change in Unrealized Net Appreciation/Depreciation:(1) | |||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 1,264,749 | ||||
Total Change in Unrealized Net Appreciation/Depreciation |
| 1,264,749 |
| ||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 501,279 |
| ||
(1) Includes change in unrealized appreciation/depreciation of $(542) due to foreign capital gains tax on investments. |
See Notes to Financial Statements. | |
16 | MARCH 31, 2016 |
Janus Asia Equity Fund
Statements of Changes in Net Assets
|
|
| Period
ended |
| Year ended | |||
Operations: | ||||||||
Net investment income/(loss) | $ | (25,678) | $ | 66,216 | ||||
Net realized gain/(loss) on investments | (737,792) | 459,975 | ||||||
Change in unrealized net appreciation/depreciation | 1,264,749 | (2,045,856) | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations |
| 501,279 |
|
| (1,519,665) | |||
Dividends and Distributions to Shareholders: | ||||||||
Class A Shares | — | (8,039) | ||||||
Class C Shares | — | (1,661) | ||||||
Class D Shares | (3,958) | (99,803) | ||||||
Class I Shares | (5,795) | (54,233) | ||||||
Class S Shares | — | (6,040) | ||||||
Class T Shares | (579) | (5,135) | ||||||
| Total Dividends from Net Investment Income |
| (10,332) |
|
| (174,911) | ||
Distributions from Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | (17,690) | (17,352) | ||||||
Class C Shares | (17,051) | (12,715) | ||||||
Class D Shares | (239,449) | (198,823) | ||||||
Class I Shares | (112,535) | (103,633) | ||||||
Class S Shares | (14,332) | (13,114) | ||||||
Class T Shares | (19,978) | (7,149) | ||||||
| Total Distributions from Net Realized Gain from Investment Transactions |
| (421,035) |
|
| (352,786) | ||
Net Decrease from Dividends and Distributions to Shareholders |
| (431,367) |
|
| (527,697) | |||
Capital Share Transactions: | ||||||||
Class A Shares | (30,377) | (53,994) | ||||||
Class C Shares | 25,826 | 92,176 | ||||||
Class D Shares | (833,873) | (2,141,850) | ||||||
Class I Shares | 74,505 | 18,049 | ||||||
Class S Shares | 14,332 | 39,474 | ||||||
Class T Shares | (65,147) | (299,971) | ||||||
Net Increase/(Decrease) from Capital Share Transactions |
| (814,734) |
|
| (2,346,116) | |||
Net Increase/(Decrease) in Net Assets |
| (744,822) |
|
| (4,393,478) | |||
Net Assets: | ||||||||
Beginning of period | 9,434,267 | 13,827,745 | ||||||
| End of period | $ | 8,689,445 |
| $ | 9,434,267 | ||
Undistributed Net Investment Income/(Loss) | $ | (48,262) |
| $ | (12,252) | |||
See Notes to Financial Statements. | |
Janus Investment Fund | 17 |
Janus Asia Equity Fund
Financial Highlights
Class A Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year or period ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011(1) | |||||
Net Asset Value, Beginning of Period |
| $8.31 |
|
| $9.79 |
|
| $9.44 |
|
| $9.25 |
|
| $7.43 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | (0.03)(2) | 0.01(2) | 0.23(2)(3) | 0.07 | 0.14 | (0.23) | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.49 | (0.95) | 0.59 | 0.20 | 1.68 | (2.34) | |||||||||||||||
Total from Investment Operations |
| 0.46 |
|
| (0.94) |
|
| 0.82 |
|
| 0.27 |
|
| 1.82 |
|
| (2.57) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | — | (0.17) | (0.14) | (0.08) | — | — | |||||||||||||||
Distributions (from capital gains) | (0.38) | (0.37) | (0.33) | — | — | — | |||||||||||||||
Total Dividends and Distributions |
| (0.38) |
|
| (0.54) |
|
| (0.47) |
|
| (0.08) |
|
| — |
|
| — |
| |||
Net Asset Value, End of Period | $8.39 | $8.31 | $9.79 | $9.44 | $9.25 | $7.43 | |||||||||||||||
Total Return* |
| 5.61% |
|
| (10.07)% |
|
| 9.06% |
|
| 2.88% |
|
| 24.50% |
|
| (25.70)% |
| |||
Net Assets, End of Period (in thousands) | $314 | $348 | $456 | $973 | $878 | $619 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $373 | $400 | $1,053 | $1,063 | $768 | $724 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 3.31% | 2.87% | 2.49% | 2.03% | 4.43% | 28.35% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.60% | 1.61% | 1.38% | 1.52% | 1.55% | 1.35% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | (0.75)% | 0.07% | 2.35%(3) | 0.51% | 0.87% | 0.85% | |||||||||||||||
Portfolio Turnover Rate | 35% | 152% | 72% | 104% | 75% | 2% | |||||||||||||||
1 | |||||||||||||||||||||
Class C Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year or period ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011(1) |
| ||||
Net Asset Value, Beginning of Period |
| $8.29 |
|
| $9.72 |
|
| $9.38 |
|
| $9.18 |
|
| $7.43 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | (0.06)(2) | (0.03)(2) | 0.16(2)(3) | —(4) | 0.06 | (0.23) | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.49 | (0.98) | 0.59 | 0.21 | 1.69 | (2.34) | |||||||||||||||
Total from Investment Operations |
| 0.43 |
|
| (1.01) |
|
| 0.75 |
|
| 0.21 |
|
| 1.75 |
|
| (2.57) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | — | (0.05) | (0.08) | (0.01) | — | — | |||||||||||||||
Distributions (from capital gains) | (0.38) | (0.37) | (0.33) | — | — | — | |||||||||||||||
Total Dividends and Distributions |
| (0.38) |
|
| (0.42) |
|
| (0.41) |
|
| (0.01) |
|
| — |
|
| — |
| |||
Net Asset Value, End of Period | $8.34 | $8.29 | $9.72 | $9.38 | $9.18 | $7.43 | |||||||||||||||
Total Return* |
| 5.25% |
|
| (10.81)% |
|
| 8.22% |
|
| 2.24% |
|
| 23.55% |
|
| (25.70)% |
| |||
Net Assets, End of Period (in thousands) | $387 | $360 | $332 | $804 | $775 | $619 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $375 | $373 | $802 | $815 | $716 | $724 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 4.01% | 3.59% | 3.24% | 2.77% | 5.45% | 29.12% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 2.29% | 2.30% | 2.12% | 2.23% | 2.30% | 1.38%(5) | |||||||||||||||
Ratio of Net Investment Income/(Loss) | (1.43)% | (0.31)% | 1.68%(3) | (0.20)% | 0.08% | 0.82% | |||||||||||||||
Portfolio Turnover Rate | 35% | 152% | 72% | 104% | 75% | 2% | |||||||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from July 29, 2011 (inception date) through September 30, 2011. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets include a special dividend from Strides Arcolab, Ltd. In December 2013. The impact of the special dividend to Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets is $0.09 and 0.97%, respectively. (4) Less than $0.005 on a per share basis. (5) Pursuant to a contractual agreement, Janus waived certain fees and expenses during the period. The Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets would have been 2.34% in 2011 without the waiver of these fees and expenses. |
See Notes to Financial Statements. | |
18 | MARCH 31, 2016 |
Janus Asia Equity Fund
Financial Highlights
Class D Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year or period ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011(1) | |||||
Net Asset Value, Beginning of Period |
| $8.35 |
|
| $9.84 |
|
| $9.48 |
|
| $9.26 |
|
| $7.42 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | (0.02)(2) | 0.07(2) | 0.24(2)(3) | 0.05 | 0.25 | (0.18) | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.50 | (1.00) | 0.61 | 0.23 | 1.59 | (2.40) | |||||||||||||||
Total from Investment Operations |
| 0.48 |
|
| (0.93) |
|
| 0.85 |
|
| 0.28 |
|
| 1.84 |
|
| (2.58) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.01) | (0.19) | (0.16) | (0.06) | — | — | |||||||||||||||
Distributions (from capital gains) | (0.38) | (0.37) | (0.33) | — | — | — | |||||||||||||||
Redemption fees | N/A | N/A | N/A | N/A | —(4) | —(4) | |||||||||||||||
Total Dividends and Distributions |
| (0.39) |
|
| (0.56) |
|
| (0.49) |
|
| (0.06) |
|
| — |
|
| — |
| |||
Net Asset Value, End of Period | $8.44 | $8.35 | $9.84 | $9.48 | $9.26 | $7.42 | |||||||||||||||
Total Return* |
| 5.79% |
|
| (9.99)% |
|
| 9.26% |
|
| 3.01% |
|
| 24.80% |
|
| (25.80)% |
| |||
Net Assets, End of Period (in thousands) | $4,849 | $5,640 | $9,084 | $7,477 | $3,394 | $1,035 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $5,276 | $6,632 | $8,635 | $7,523 | $2,654 | $963 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 3.20% | 2.75% | 2.31% | 1.91% | 2.77% | 31.23% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.40% | 1.42% | 1.25% | 1.40% | 1.53% | 1.39%(5) | |||||||||||||||
Ratio of Net Investment Income/(Loss) | (0.54)% | 0.67% | 2.52%(3) | 0.63% | 1.33% | 0.90% | |||||||||||||||
Portfolio Turnover Rate | 35% | 152% | 72% | 104% | 75% | 2% | |||||||||||||||
Class I Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year or period ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011(1) |
| ||||
Net Asset Value, Beginning of Period |
| $8.37 |
|
| $9.85 |
|
| $9.49 |
|
| $9.27 |
|
| $7.43 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | (0.02)(2) | 0.06(2) | 0.26(2)(3) | 0.04 | 0.19 | (0.23) | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.50 | (0.98) | 0.60 | 0.26 | 1.65 | (2.34) | |||||||||||||||
Total from Investment Operations |
| 0.48 |
|
| (0.92) |
|
| 0.86 |
|
| 0.30 |
|
| 1.84 |
|
| (2.57) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.02) | (0.19) | (0.17) | (0.08) | — | — | |||||||||||||||
Distributions (from capital gains) | (0.38) | (0.37) | (0.33) | — | — | — | |||||||||||||||
Total Dividends and Distributions |
| (0.40) |
|
| (0.56) |
|
| (0.50) |
|
| (0.08) |
|
| — |
|
| — |
| |||
Net Asset Value, End of Period | $8.45 | $8.37 | $9.85 | $9.49 | $9.27 | $7.43 | |||||||||||||||
Total Return* |
| 5.82% |
|
| (9.79)% |
|
| 9.43% |
|
| 3.21% |
|
| 24.76% |
|
| (25.70)% |
| |||
Net Assets, End of Period (in thousands) | $2,577 | $2,470 | $2,899 | $1,295 | $1,145 | $619 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $2,498 | $3,017 | $2,751 | $1,549 | $848 | $724 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 2.96% | 2.56% | 2.15% | 1.70% | 3.63% | 28.10% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.26% | 1.27% | 1.07% | 1.26% | 1.29% | 1.34% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | (0.39)% | 0.57% | 2.75%(3) | 0.55% | 1.19% | 0.86% | |||||||||||||||
Portfolio Turnover Rate | 35% | 152% | 72% | 104% | 75% | 2% | |||||||||||||||
See Notes to Financial Statements. | |
Janus Investment Fund | 19 |
Janus Asia Equity Fund
Financial Highlights
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from July 29, 2011 (inception date) through September 30, 2011. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets include a special dividend from Strides Arcolab, Ltd. In December 2013. The impact of the special dividend to Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets is $0.09 and 0.97%, respectively. (4) Redemption fees aggregated less than $0.005 on a per share basis. Redemption fees were eliminated effective April 2, 2012. (5) Pursuant to a contractual agreement, Janus waived certain fees and expenses during the period. The Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets would have been 2.26% in 2011 without the waiver of these fees and expenses. |
Class S Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year or period ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011(1) | |||||
Net Asset Value, Beginning of Period |
| $8.32 |
|
| $9.79 |
|
| $9.43 |
|
| $9.23 |
|
| $7.43 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | (0.03)(2) | 0.07(2) | 0.23(2)(3) | 0.05 | 0.10 | (0.23) | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.48 | (1.00) | 0.59 | 0.22 | 1.70 | (2.34) | |||||||||||||||
Total from Investment Operations |
| 0.45 |
|
| (0.93) |
|
| 0.82 |
|
| 0.27 |
|
| 1.80 |
|
| (2.57) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | — | (0.17) | (0.13) | (0.07) | — | — | |||||||||||||||
Distributions (from capital gains) | (0.38) | (0.37) | (0.33) | — | — | — | |||||||||||||||
Total Dividends and Distributions |
| (0.38) |
|
| (0.54) |
|
| (0.46) |
|
| (0.07) |
|
| — |
|
| — |
| |||
Net Asset Value, End of Period | $8.39 | $8.32 | $9.79 | $9.43 | $9.23 | $7.43 | |||||||||||||||
Total Return* |
| 5.49% |
|
| (9.97)% |
|
| 9.02% |
|
| 2.86% |
|
| 24.23% |
|
| (25.70)% |
| |||
Net Assets, End of Period (in thousands) | $328 | $310 | $345 | $791 | $769 | $619 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $317 | $390 | $752 | $874 | $710 | $724 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 3.43% | 3.06% | 2.58% | 2.21% | 4.97% | 28.59% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.65% | 1.48% | 1.46% | 1.65% | 1.75% | 1.36%(4) | |||||||||||||||
Ratio of Net Investment Income/(Loss) | (0.79)% | 0.71% | 2.42%(3) | 0.29% | 0.63% | 0.84% | |||||||||||||||
Portfolio Turnover Rate | 35% | 152% | 72% | 104% | 75% | 2% | |||||||||||||||
Class T Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year or period ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011(1) |
| ||||
Net Asset Value, Beginning of Period |
| $8.25 |
|
| $9.81 |
|
| $9.45 |
|
| $9.25 |
|
| $7.43 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | (0.03)(2) | 0.04(2) | 0.24(2)(3) | 0.13 | 0.15 | (0.23) | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.49 | (0.96) | 0.61 | 0.15 | 1.67 | (2.34) | |||||||||||||||
Total from Investment Operations |
| 0.46 |
|
| (0.92) |
|
| 0.85 |
|
| 0.28 |
|
| 1.82 |
|
| (2.57) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.01) | (0.27) | (0.16) | (0.08) | — | — | |||||||||||||||
Distributions (from capital gains) | (0.38) | (0.37) | (0.33) | — | — | — | |||||||||||||||
Total Dividends and Distributions |
| (0.39) |
|
| (0.64) |
|
| (0.49) |
|
| (0.08) |
|
| — |
|
| — |
| |||
Net Asset Value, End of Period | $8.32 | $8.25 | $9.81 | $9.45 | $9.25 | $7.43 | |||||||||||||||
Total Return* |
| 5.67% |
|
| (9.98)% |
|
| 9.37% |
|
| 2.99% |
|
| 24.50% |
|
| (25.70)% |
| |||
Net Assets, End of Period (in thousands) | $236 | $306 | $712 | $1,644 | $861 | $619 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $387 | $566 | $1,357 | $1,331 | $798 | $724 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 3.21% | 2.73% | 2.44% | 2.05% | 4.33% | 28.34% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.49% | 1.39% | 1.26% | 1.43% | 1.54% | 1.35% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | (0.65)% | 0.46% | 2.49%(3) | 0.63% | 0.89% | 0.85% | |||||||||||||||
Portfolio Turnover Rate | 35% | 152% | 72% | 104% | 75% | 2% | |||||||||||||||
See Notes to Financial Statements. | |
20 | MARCH 31, 2016 |
Janus Asia Equity Fund
Financial Highlights
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from July 29, 2011 (inception date) through September 30, 2011. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets include a special dividend from Strides Arcolab, Ltd. In December 2013. The impact of the special dividend to Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets is $0.09 and 0.97%, respectively. (4) Pursuant to a contractual agreement, Janus waived certain fees and expenses during the period. The Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets would have been 1.84% in 2011 without the waiver of these fees and expenses. |
See Notes to Financial Statements. | |
Janus Investment Fund | 21 |
Janus Asia Equity Fund
Notes to Financial Statements (unaudited)
1. Organization and Significant Accounting Policies
Janus Asia Equity Fund (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-five Funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in equity securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares. Class D are closed to new investors in certain distribution channels.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
Class S Shares are offered through financial intermediary platforms including, but not limited to, retirement platforms and asset allocation, mutual fund wrap, or other discretionary or nondiscretionary fee-based investment advisory programs. In addition, Class S Shares may be available through certain financial intermediaries who have an agreement with Janus Capital Management LLC (“Janus Capital”) or its affiliates to offer Class S Shares on their supermarket platforms.
Class T Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be evaluated and valued on an amortized cost basis provided that the amortized cost determined
22 | MARCH 31, 2016 |
Janus Asia Equity Fund
Notes to Financial Statements (unaudited)
approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2016 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The Fund did not hold a significant amount of Level 3 securities as of March 31, 2016.
The Fund recognizes transfers between the levels as of the beginning of the fiscal year. The following describes the amounts of transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period.
Financial assets of $6,602,854 were transferred out of Level 2 to Level 1 since certain foreign equity prices were applied a fair valuation adjustment factor at the end of the prior fiscal year and no factor was applied at the end of the current period.
Janus Investment Fund | 23 |
Janus Asia Equity Fund
Notes to Financial Statements (unaudited)
Financial assets of $94,002 were transferred out of Level 2 to Level 3 since certain security’s prices were determined using significant unobservable inputs at the end of the current fiscal year and other significant observable inputs at the end of the prior fiscal year.
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 Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which may be allocated pro rata to the Fund. Each class of shares bears a portion of general expenses, which 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.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of 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 of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually. The Fund may treat a portion of the amount paid to redeem shares as a distribution of investment company taxable income and realized capital gains that are reflected in the net asset value. This practice, commonly referred to as “equalization,” has no effect on the redeeming shareholder or a Fund’s total return, but may reduce the amounts that would otherwise be required to be paid as taxable dividends to the remaining shareholders. It is possible that the Internal Revenue Service (IRS) could challenge the Funds’ equalization methodology or calculations, and any such challenge could result in additional tax, interest, or penalties to be paid by the Fund.
The Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If
24 | MARCH 31, 2016 |
Janus Asia Equity Fund
Notes to Financial Statements (unaudited)
the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Restricted Cash
As of March 31, 2016, the Fund has restricted cash in the amount of $394,819. The restricted cash represents collateral pledged in relation to investment quota for China A Shares. The carrying value of the restricted cash approximates fair value.
2. Derivative Instruments
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended March 31, 2016 is discussed in further detail below. A summary of derivative activity by the Fund is reflected in the tables at the end of this section.
The Fund may use derivative instruments for hedging purposes (to offset risks associated with an investment, currency exposure, or market conditions), to adjust currency exposure relative to a benchmark index, or for speculative purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
· Commodity Risk – the risk related to the change in value of commodities or commodity-linked investments due to changes in the overall market movements, volatility of the underlying benchmark, changes in interest rates, or other factors affecting a particular industry of commodity such as drought, floods, weather, livestock disease, embargoes, tariffs, and international economic, political, and regulatory developments.
· Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund.
· Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations.
· Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment.
· Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market.
Janus Investment Fund | 25 |
Janus Asia Equity Fund
Notes to Financial Statements (unaudited)
· Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index.
· Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease.
· Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested.
· Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth.
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Options Contracts
An options contract provides the purchaser with the right, but not the obligation, to buy (call option) or sell (put option) a financial instrument at an agreed upon price on or before a specified date. The purchaser pays a premium to the seller for this right. The seller has the corresponding obligation to sell or buy a financial instrument if the purchaser (owner) "exercises" the option. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option are adjusted by the amount of premium received or paid. Upon expiration, or closing of the option transaction, a realized gain or loss is reported on the Statement of Operations (if applicable). The difference between the premium paid/received and the market value of the option is recorded as unrealized appreciation or depreciation. The net change in unrealized appreciation or depreciation is reported on the Statement of Operations (if applicable). Option contracts are typically valued using an approved vendor’s option valuation model. To the extent reliable market quotations are available, option contracts are valued using market quotations. In cases when an approved vendor cannot provide coverage for an option and there is no reliable market quotation, a broker quotation or an internal valuation using the Black-Scholes model, the Cox-Rubenstein Binomial Option Pricing Model, or other appropriate option pricing model is used. Certain options contracts are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Statement of Assets and Liabilities as “Variation margin receivable” or “Variation margin payable” (if applicable).
The Fund may use options contracts to hedge against changes in interest rates, the values of equities, or foreign currencies. The Fund generally invests in options to hedge against adverse movements in the value of portfolio holdings. The use of such instruments may involve certain additional risks as a result of unanticipated movements in the market. A lack of correlation between the value of an instrument underlying an option and the asset being hedged, or unexpected adverse price movements, could render the Fund’s hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. The Fund may be subject to counterparty risk, interest rate risk, liquidity risk, equity risk, commodity risk, and currency risk in the normal course of pursuing its investment objective through its investments in options contracts.
Options traded on an exchange are regulated and the terms of the options are standardized. Options traded OTC expose the Fund to counterparty risk in the event that the counterparty does not perform. This risk is mitigated by having a netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the counterparty.
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Janus Asia Equity Fund
Notes to Financial Statements (unaudited)
The Fund may purchase put options to hedge against a decline in the value of its portfolio. By using put options in this way, the Fund will reduce any profit it might otherwise have realized in the underlying security by the amount of the premium paid for the put option and by transaction costs. The Fund may purchase call options to hedge against an increase in the price of securities that it may buy in the future. The premium paid for the call option plus any transaction costs will reduce the benefit, if any, realized by the Fund upon exercise of the option, and, unless the price of the underlying security rises sufficiently, the option may expire worthless to the Fund. The risk in buying options is that the Fund pays a premium whether or not the options are exercised. Options purchased are reported in the Schedule of Investments (if applicable).
During the period, the Fund purchased call options on foreign exchange rates vs. the U.S. dollar in order to increase foreign currency exposure and reduce U.S. dollar exposure where increasing this exposure via the options market was most attractive.
During the period ended March 31, 2016, the average ending monthly market value amounts on purchased call options is $13,602.
The following table, grouped by derivative type, provides information about the fair value and location of derivatives within the Statement of Assets and Liabilities as of March 31, 2016.
Fair Value of Derivative Instruments (not accounted for as hedging instruments) as of March 31, 2016 | ||||
|
|
|
| Equity |
Asset Derivatives: | ||||
Investments, at value* | $ | 10,827 | ||
* | Amounts relate to purchased options. | |||
The following table provides information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended March 31, 2016.
The effect of Derivative Instruments (not accounted for as hedging instruments) on the Statement of Operations for the period ended March 31, 2016 | ||||||
Amount of Change in Unrealized Appreciation/Depreciation Recognized on Derivatives | ||||||
Derivative |
|
| Equity
| |||
Investments, foreign currency translations and non-interested Trustees' deferred compensation | $ | 389* | ||||
* | Amounts relate to purchased options. | |||||
Please see the Fund’s Statement of Operations for the Fund’s “Net Realized and Unrealized Gain/(Loss) on Investments.”
3. Other Investments and Strategies
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants,
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Janus Asia Equity Fund
Notes to Financial Statements (unaudited)
including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. In particular, many EU nations are susceptible to economic risks associated with high levels of debt, notably due to investments in sovereign debt of countries such as Greece, Italy, Spain, Portugal, and Ireland. Many non-governmental issuers, and even certain governments, have defaulted on, or been forced to restructure, their debts. Many other issuers have faced difficulties obtaining credit or refinancing existing obligations. Financial institutions have in many cases required government or central bank support, have needed to raise capital, and/or have been impaired in their ability to extend credit. As a result, financial markets in the EU experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world. Greece, Ireland, and Portugal have already received one or more "bailouts" from other Eurozone member states, and it is unclear how much additional funding they will require or if additional Eurozone member states will require bailouts in the future. One or more countries may abandon the euro and/or withdraw from the EU, placing its currency and banking system in jeopardy.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
China A Shares
The Chinese government may permit a foreign investor to invest in China A Shares as a licensed Qualified Foreign Institutional Investor (“QFII”). QFII licenses are granted by the China Securities Regulatory Commission and an investment quota is granted by the State Administration of Foreign Exchange. Janus Capital has been granted a QFII license and an investment quota.
People’s Republic of China (“PRC”) regulations require QFIIs to entrust assets held in the PRC and to interact with government agencies through a China-based qualified custodian bank. Assets attributable to clients of Janus Capital will be held by the custodian in foreign exchange accounts and securities accounts in the joint name of Janus Capital and its clients, although the terms of the custody agreement make clear that the contents of the accounts belong to the clients, and not to Janus Capital.
During the period ended March 31, 2016, Janus Capital, in its capacity as a QFII, invested in China A Shares on behalf of the Fund. With respect to direct China A Shares investments, as a general matter, any capital invested and profits generated cannot be repatriated for a minimum of one year. Repatriation of any invested capital is subject to approval by the regulator. Additionally, any repatriation of profits would be subject to an audit by a registered accountant in China, and subject to regulatory approval. In light of the foregoing, the Fund’s investment in China A Shares would be subject to the Fund’s limit of investing up to 15% of its net assets in illiquid investments. Current Chinese tax law is unclear whether capital gains realized on the Fund’s investments in China A shares will be subject to tax. Because management
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Janus Asia Equity Fund
Notes to Financial Statements (unaudited)
believes it is more likely than not that Chinese capital gains tax ultimately will not be imposed, the Fund does not accrue for such taxes.
As of March 31, 2016, the Fund has available investment quota of $394,819. The Fund is subject to certain restrictions and administrative processes relating to its ability to repatriate cash balances and may incur substantial delays in gaining access to its assets.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the "Offsetting Assets and Liabilities" section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs, including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Emerging Market Investing
The Fund may invest in securities of issuers or companies from or with exposure to one or more “developing countries” or “emerging market countries.” To the extent that the Fund invests a significant amount of its assets in one or more of these countries, its returns and net asset value may be affected to a large degree by events and economic conditions in such countries. The risks of foreign investing are heightened when investing in emerging markets, which may result in the price of investments in emerging markets experiencing sudden and sharp price swings. In many developing markets, there is less government supervision and regulation of business and industry practices (including the potential lack of strict finance and accounting controls and standards), stock exchanges, brokers, and listed companies, making these investments potentially more volatile in price and less liquid than investments in developed securities markets, resulting in greater risk to investors. There is a risk in developing countries that a future economic or political crisis could lead to price controls, forced mergers of companies, expropriation or confiscatory taxation, imposition or enforcement of foreign ownership limits, seizure, nationalization, sanctions or imposition of restrictions by various governmental entities on investment and trading, or creation of government monopolies, any of which may have a detrimental effect on the Fund’s investments. In addition, the Fund’s investments may be denominated in foreign currencies and therefore, changes in the value of a country’s currency compared to the U.S. dollar may affect the value of the Fund’s investments. To the extent that the Fund invests a significant portion of its assets in the securities of issuers in or companies of a single country or region, it is more likely to be impacted by events or conditions affecting that country or region, which could have a negative impact on the Fund’s performance. Additionally, foreign and emerging market risks, including, but not limited to, price controls, expropriation or confiscatory taxation, imposition or enforcement of foreign ownership limits, nationalization, and restrictions on repatriation of assets may be heightened to the extent the Fund invests in Chinese local market securities.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund has entered into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a
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Janus Asia Equity Fund
Notes to Financial Statements (unaudited)
default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following table presents gross amounts of recognized assets and/or liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see either the “Fair Value of Derivative Instruments as of March 31, 2016” table located in Note 2 of these Notes to Financial Statements and/or the Fund’s Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets | |||||
Counterparty | Gross
Amounts | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | |
Deutsche Bank AG | $ 182,083 | $ - | $ (182,083) | $ - | |
Goldman Sachs International | 10,287 | - | - | 10,287 | |
Total | $ 192,370 | $ - | $ (182,083) | $ 10,287 | |
(a) Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |||||
(b) Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. | |||||
Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. Securities on loan will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral as permitted by the SEC. The value of the collateral must be at least 102% of the market value of the loaned securities that are denominated in U.S. dollars and 105% of the market value of the loaned securities that are not denominated in U.S. dollars. Upon receipt of cash collateral, Janus Capital intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. Loaned securities and related collateral are marked-to-market each business day based upon the market value of the loaned securities at the close of business, employing the most recent available pricing information. Collateral levels are then adjusted based on this mark-to-market evaluation.
The Fund may require the counterparty to pledge securities as collateral daily (based on the daily valuation of the financial asset) if the Fund has a net aggregate unrealized gain on OTC derivative contracts with a particular counterparty. The Fund may deposit cash as collateral with the counterparty and/or custodian daily (based on the daily valuation of the financial asset) if the Fund has a net aggregate unrealized loss on OTC derivative contracts with a particular counterparty. The collateral amounts are subject to minimum exposure requirements and initial margin requirements. Collateral amounts are monitored and subsequently adjusted up or down as valuations fluctuate by at least the minimum exposure requirement. Collateral may reduce the risk of loss.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
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Janus Asia Equity Fund
Notes to Financial Statements (unaudited)
Securities Lending
Under procedures adopted by the Trustees, the Fund may seek to earn additional income by lending securities to qualified parties. Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. The Fund may lend portfolio securities in an amount equal to up to 1/3 of its total assets as determined at the time of the loan origination. There is the risk of delay in recovering a loaned security or the risk of loss in collateral rights if the borrower fails financially. In addition, Janus Capital makes efforts to balance the benefits and risks from granting such loans. All loans will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral as permitted by the SEC. If the Fund is unable to recover a security on loan, the Fund may use the collateral to purchase replacement securities in the market. There is a risk that the value of the collateral could decrease below the cost of the replacement security by the time the replacement investment is made, resulting in a loss to the Fund.
Upon receipt of cash collateral, Janus Capital may invest it in affiliated or non-affiliated cash management vehicles, whether registered or unregistered entities, as permitted by the 1940 Act and rules promulgated thereunder. Janus Capital currently intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. An investment in Janus Cash Collateral Fund LLC is generally subject to the same risks that shareholders experience when investing in similarly structured vehicles, such as the potential for significant fluctuations in assets as a result of the purchase and redemption activity of the securities lending program, a decline in the value of the collateral, and possible liquidity issues. Such risks may delay the return of the cash collateral and cause the Fund to violate its agreement to return the cash collateral to a borrower in a timely manner. As adviser to the Fund and Janus Cash Collateral Fund LLC, Janus Capital has an inherent conflict of interest as a result of its fiduciary duties to both the Fund and Janus Cash Collateral Fund LLC. Additionally, Janus Capital receives an investment advisory fee of 0.05% for managing Janus Cash Collateral Fund LLC, but it may not receive a fee for managing certain other affiliated cash management vehicles in which the Fund may invest, and therefore may have an incentive to allocate preferred investment opportunities to investment vehicles for which it is receiving a fee.
The value of the collateral must be at least 102% of the market value of the loaned securities that are denominated in U.S. dollars and 105% of the market value of the loaned securities that are not denominated in U.S. dollars. Loaned securities and related collateral are marked-to-market each business day based upon the market value of the loaned securities at the close of business, employing the most recent available pricing information. Collateral levels are then adjusted based on this mark-to-market evaluation.
The cash collateral invested by Janus Capital is disclosed in the Schedule of Investments (if applicable). Income earned from the investment of the cash collateral, net of rebates paid to, or fees paid by, borrowers and less the fees paid to the lending agent are included as “Affiliated securities lending income, net” on the Statement of Operations. As of March 31, 2016, securities lending transactions accounted for as secured borrowings with an overnight and continuous contractual maturity are $182,083 for equity securities. Gross amounts of recognized liabilities for securities lending (collateral received) as of March 31, 2016 is $186,200, resulting in the net amount due to the counterparty of $4,117.
4. Investment Advisory Agreements and Other Transactions with Affiliates
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The Fund’s "base" fee rate prior to any performance adjustment (expressed as an annual rate) is 0.92%.
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Janus Asia Equity Fund
Notes to Financial Statements (unaudited)
The investment advisory fee rate is determined by calculating a base fee and applying a performance adjustment. The base fee rate is the same as the contractual investment advisory fee rate. The performance adjustment either increases or decreases the base fee depending on how well the Fund has performed relative to its benchmark index. The Fund's benchmark index used in the calculation is the MSCI All Country Asia ex-Japan Index.
The calculation of the performance adjustment applies as follows:
Investment Advisory Fee = Base Fee Rate +/- Performance Adjustment
The investment advisory fee rate paid to Janus Capital by the Fund consists of two components: (1) a base fee calculated by applying the contractual fixed rate of the advisory fee to the Fund’s average daily net assets during the previous month (“Base Fee Rate”), plus or minus (2) a performance-fee adjustment (“Performance Adjustment”) calculated by applying a variable rate of up to 0.15% (positive or negative) to the Fund’s average daily net assets during the applicable performance measurement period, which is generally the previous 36 months.
The Fund’s prospectuses and statement(s) of additional information contain additional information about performance-based fees. The amount shown as advisory fees on the Statement of Operations reflects the Base Fee Rate plus/minus any Performance Adjustment. For the period ended March 31, 2016, the performance adjusted investment advisory fee rate before any waivers and/or reimbursements of expenses is 0.92%.
Janus Capital Singapore Pte. Limited (“Janus Singapore”) serves as subadviser to the Fund. Janus Singapore provides day-to-day management of the Fund’s portfolio operations. Janus Singapore is an indirect wholly-owned subsidiary of Janus Capital. Janus Capital pays Janus Singapore a fee equal to 50% of the advisory fee paid by the Fund (calculated after any applicable performance fee adjustment, fee waivers, and expense reimbursements). The subadvisory fee paid by Janus Capital to Janus Singapore adjusts up or down based on the Fund’s performance relative to the Fund’s benchmark index over the performance measurement period.
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate of 1.04%. Janus Capital has agreed to continue the waiver until at least February 1, 2017. The previous expense limit (until February 1, 2016) was 1.28%. If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund. Janus Services is not compensated for its services related to the shares, except for out-of-pocket costs. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the Transfer Agency Agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. The Funds’ Trustees have set limits on fees that the Funds may incur with respect to administrative fees paid for omnibus or networked accounts. Such limits are subject to change by the Trustees in the future. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
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Janus Asia Equity Fund
Notes to Financial Statements (unaudited)
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares. In addition to the administrative fees discussed above, Janus Services receives reimbursement for out-of-pocket costs it incurs for serving as transfer agent and providing, or arranging for, servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund's Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $367,532 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2016. The Fund's portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of March 31, 2016 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-
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Janus Asia Equity Fund
Notes to Financial Statements (unaudited)
interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended March 31, 2016 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $92,975 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2016.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered product compliant with Rule 2a-7 under the 1940 Act. There are no restrictions on the Fund's ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Fund to Janus Cash Liquidity Fund LLC. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended March 31, 2016 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended March 31, 2016, Janus Distributors retained upfront sales charges of $578.
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the period ended March 31, 2016.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class C Shares during the period ended March 31, 2016.
As of March 31, 2016, shares of the Fund were owned by Janus Capital and/or other funds advised by Janus Capital, as indicated in the table below:
Class | % of Class Owned |
| % of Fund Owned |
| |
Class A Shares | 25 | % | 1 | % | |
Class C Shares | 76 | 3 | |||
Class D Shares | - | - | |||
Class I Shares | 75 | 22 | |||
Class S Shares | 100 | 4 | |||
Class T Shares | - | - | |||
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Janus Asia Equity Fund
Notes to Financial Statements (unaudited)
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
5. Federal Income Tax
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of March 31, 2016 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals and investments in passive foreign investment companies.
Federal Tax Cost | Unrealized
| Unrealized | Net Tax Appreciation/ |
$ 9,078,184 | $ 527,460 | $ (1,081,939) | $ (554,479) |
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Notes to Financial Statements (unaudited)
6. Capital Share Transactions
Period ended March 31, 2016 | Year ended September 30, 2015 | |||||
Shares | Amount | Shares | Amount | |||
Class A Shares: | ||||||
Shares sold | 8,770 | $ 72,637 | 13,582 | $ 129,897 | ||
Reinvested dividends and distributions | 1,928 | 16,084 | 2,769 | 25,391 | ||
Shares repurchased | (15,172) | (119,098) | (21,080) | (209,282) | ||
Net Increase/(Decrease) | (4,474) | $ (30,377) |
| (4,729) | $ (53,994) | |
Class C Shares: | ||||||
Shares sold | 984 | $ 8,879 | 8,908 | $ 87,852 | ||
Reinvested dividends and distributions | 2,052 | 17,051 | 1,561 | 14,376 | ||
Shares repurchased | (12) | (104) | (1,186) | (10,052) | ||
Net Increase/(Decrease) | 3,024 | $ 25,826 |
| 9,283 | $ 92,176 | |
Class D Shares: | ||||||
Shares sold | 41,880 | $ 351,539 | 521,332 | $ 5,369,396 | ||
Reinvested dividends and distributions | 28,471 | 238,587 | 31,639 | 291,398 | ||
Shares repurchased | (170,737) | (1,423,999) | (801,161) | (7,802,644) | ||
Net Increase/(Decrease) | (100,386) | $ (833,873) |
| (248,190) | $ (2,141,850) | |
Class I Shares: | ||||||
Shares sold | 22,772 | $ 178,988 | 117,670 | $ 1,172,928 | ||
Reinvested dividends and distributions | 14,104 | 118,330 | 17,141 | 157,866 | ||
Shares repurchased | (26,907) | (222,813) | (133,975) | (1,312,745) | ||
Net Increase/(Decrease) | 9,969 | $ 74,505 |
| 836 | $ 18,049 | |
Class S Shares: | ||||||
Shares sold | - | $ - | 55,972 | $ 566,788 | ||
Reinvested dividends and distributions | 1,718 | 14,332 | 2,089 | 19,154 | ||
Shares repurchased | - | - | (55,972) | (546,468) | ||
Net Increase/(Decrease) | 1,718 | $ 14,332 |
| 2,089 | $ 39,474 | |
Class T Shares: | ||||||
Shares sold | 149,890 | $ 1,332,801 | 545,626 | $ 5,289,384 | ||
Reinvested dividends and distributions | 2,486 | 20,557 | 1,351 | 12,284 | ||
Shares repurchased | (161,153) | (1,418,505) | (582,493) | (5,601,639) | ||
Net Increase/(Decrease) | (8,777) | $ (65,147) |
| (35,516) | $ (299,971) | |
7. Purchases and Sales of Investment Securities
For the period ended March 31, 2016, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) was as follows:
Purchases of | Proceeds from Sales | Purchases of Long- | Proceeds from Sales |
$ 3,092,187 | $ 4,269,274 | $ - | $ - |
8. Subsequent Event
Management has evaluated whether any events or transactions occurred subsequent to March 31, 2016 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
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Janus Asia Equity Fund
Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (toll free); (ii) on the Fund’s website at janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding the Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through janus.com/proxyvoting and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Fund files its complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Fund’s Form N-Q: (i) is available on the SEC’s website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-0020 (toll free).
APPROVAL OF ADVISORY AGREEMENTS DURING THE PERIOD
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 9, 2015, based on the Trustees’ evaluation of the information provided by Janus Capital, the subadvisers, and the independent fee consultant, as well as other information, the Trustees determined that the overall arrangements between each Fund and Janus Capital and each subadviser, as applicable, were fair and reasonable in light of the nature, extent and quality of the services provided by Janus Capital, its affiliates and the subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting, the Trustees unanimously approved the continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, for the period from either January 1 or February 1, 2016 through January 1 or February 1, 2017, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee
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Janus Asia Equity Fund
Additional Information (unaudited)
for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed a number of institutional competitive advantages that should enable it to provide superior investment and service performance over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has been strong: for the 36 months ended September 30, 2015, approximately 70% of the Funds were in the top two Broadridge quartiles of performance, and for the 12 months ended September 30, 2015, approximately 61% of the Funds were in the top two Broadridge quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
· For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Unconstrained Bond Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history.
· For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Multi-Sector Income Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
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Janus Asia Equity Fund
Additional Information (unaudited)
· For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance.
· For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance.
Asset Allocation Funds
· For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
Alternative Fund
· For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 12 months ended May 31, 2015.
Value Funds
· For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 12 months ended May 31, 2015.
· For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital and Perkins had taken or were taking to improve performance, and that the performance trend was improving.
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Janus Asia Equity Fund
Additional Information (unaudited)
· For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital and Perkins had taken or were taking to improve performance, and that the performance trend was improving.
· For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
Mathematical Funds
· For INTECH Emerging Markets Managed Volatility Fund, the Trustees noted that, due to limited performance for the Fund, performance history was not a material factor.
· For INTECH Global Income Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
· For INTECH International Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital and INTECH had taken or were taking to improve performance.
· For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
· For INTECH U.S. Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
Growth and Core Funds
· For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and in the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Research Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
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Janus Asia Equity Fund
Additional Information (unaudited)
· For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
Global and International Funds
· For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance.
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Janus Asia Equity Fund
Additional Information (unaudited)
Janus Aspen Series
· For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Global Unconstrained Bond Portfolio, the Trustees noted that, due to limited performance for the Fund, performance history was not a material factor.
· For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory and subadvisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by Broadridge, an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers,
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Janus Asia Equity Fund
Additional Information (unaudited)
was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
The independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 14% below the mean total expenses of their respective Broadridge Expense Group peers and 24% below the mean total expenses for their Broadridge Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 19% below the mean for their Expense Universes; and (4) Fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered the total expenses for each share class of each Fund compared to the mean total expenses for its Broadridge Expense Group peers and to mean total expenses for its Broadridge Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees, breakpoints, and expense waivers on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks and other costs that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) by one estimation methodology, the fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to the estimated fee margins in the industry and relative to estimated fee margins of fund managers using Janus Capital as a subadviser.
The Trustees considered the fees for each Fund for its fiscal year ended in 2014, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
· For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
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Additional Information (unaudited)
· For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Global Unconstrained Bond Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Multi-Sector Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus has contractually agreed to limit the Fund’s expenses.
· For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield.
· For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield.
Asset Allocation Funds
· For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Global Allocation Fund – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
Alternative Fund
· For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
Value Funds
· For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Perkins Global Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable.
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Additional Information (unaudited)
· For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Perkins Value Plus Income Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital had contractually agreed to limit the Fund’s expenses.
Mathematical Funds
· For INTECH Emerging Markets Managed Volatility Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For INTECH Global Income Managed Volatility Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For INTECH International Managed Volatility Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital had contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For INTECH U.S. Core Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For INTECH U.S. Managed Volatility Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for one share class. The Trustees also noted that Janus Capital had contractually agreed to limit the Fund’s expenses.
Growth and Core Funds
· For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Forty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
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Additional Information (unaudited)
· For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Venture Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
Global and International Funds
· For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Emerging Markets Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Global Select Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
Janus Aspen Series
· For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
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Additional Information (unaudited)
· For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Flexible Bond Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital had contractually agreed to limit the Fund’s expenses.
· For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Global Allocation Portfolio - Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Global Unconstrained Bond Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital had contractually agreed to limit the Fund’s expenses.
· For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for its sole share class.
· For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
The Trustees reviewed information on the profitability to Janus Capital and its affiliates of their relationships with each Fund, as well as an explanation of the methodology utilized by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with the Funds and other clients. The Trustees also reviewed the financial statements and corporate structure of Janus Capital’s parent company. In their review, the Trustees considered whether Janus Capital and each subadviser receive adequate incentives and resources to manage the Funds effectively. The Trustees recognized that profitability comparisons among fund managers are difficult because very little comparative information is publicly available, and the profitability of any fund manager is affected by numerous factors, including the organizational structure of the particular fund manager, the types of funds and other accounts it manages, possible other lines of business, the methodology for allocating expenses, and the fund manager’s capital structure and cost of capital. However, taking into account those factors and the analysis provided by the Trustees’ independent fee consultant, and based on the information available, the Trustees concluded that Janus Capital’s profitability with respect to each Fund in relation to the services rendered was reasonable.
The independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
The Trustees concluded that the management fees payable by each Fund to Janus Capital and its affiliates, as well as the fees paid by Janus Capital to the subadvisers of subadvised Funds, were reasonable in relation to the nature, extent, and quality of the services provided, taking into account the fees charged by other advisers for managing comparable mutual funds with similar strategies, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services
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Additional Information (unaudited)
provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of the Funds increase. They noted that their independent fee consultant provided an analysis of economies of scale, which included discussion of analysis from prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, their independent fee consultant concluded that 85% of these Funds have contractual management fees (gross of waivers) below their Broadridge expense group averages and, overall, 80% of the Funds are below their respective expense group averages for contractual management fees. They also noted that for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of some of the Funds have declined in the past few years, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
The independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, its analyses could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or Janus Capital, and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
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Useful Information About Your Fund Report (unaudited)
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2016. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
Performance Overviews
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices. When comparing the performance of the Fund with an index, keep in mind that market indices are not available for investment and do not reflect deduction of expenses.
Average annual total returns are quoted for a Fund with more than one year of performance history. 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 redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
Schedule of Investments
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
Statement of Assets and Liabilities
This statement is often referred to as the “balance sheet.” It lists the assets and liabilities of the Fund on the last day of the reporting period.
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Useful Information About Your Fund Report (unaudited)
The Fund’s assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. 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’s net assets. Because the Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, 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/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. Also included are ratios of expenses and net investment income to average net assets.
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Useful Information About Your Fund Report (unaudited)
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio manager(s) and/or investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal 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 entire portfolio is traded every six months.
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Notes
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Notes
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Janus provides access to a wide range of investment disciplines.
Alternative
Janus alternative funds seek to deliver strong risk-adjusted returns over a full market cycle with lower correlation to equity markets than traditional investments.
Asset Allocation
Janus’ asset allocation funds utilize our fundamental, bottom-up research to balance risk over the long term. From fund options that meet investors’ risk tolerance and objectives to a method that incorporates non-traditional investment choices to seek non-correlated sources of risk and return, Janus’ asset allocation funds aim to allocate risk more effectively.
Fixed Income
Janus fixed income funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek capital preservation and liquidity with current income as a secondary objective.
Global & International
Janus global and international 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.
Growth & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical funds seek to outperform their respective indices while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH® (a Janus subsidiary), these funds use a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Our value funds, managed by Perkins® (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
For more information about our funds, contact your investment professional or go to janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus).
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Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary prospectus containing this and other information, please call Janus at 877.33JANUS (52687) (or 800.525.3713 if you hold Shares directly with Janus); or download the file from janus.com/info (or janus.com/reports if you hold Shares directly with Janus). Read it carefully before you invest or send money. | ||||||||||||
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC. Funds distributed by Janus Distributors LLC | ||||||||||||
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | |||||||||
C-0516-1625 | 125-24-93036 05-16 | |||||||||||
Janus Investment Fund | 55 |
SEMIANNUAL REPORT March 31, 2016 | |||
Janus Balanced Fund | |||
Janus Investment Fund | |||
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HIGHLIGHTS · Portfolio management perspective · Investment strategy behind your fund · Fund performance, characteristics | |||
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Table of Contents
Janus Balanced Fund
Janus Balanced Fund (unaudited)
PERFORMANCE OVERVIEW
Janus Balanced Fund’s Class T Shares returned 3.25% for the six-month period ended March 31, 2016, compared with a 5.91% return by the Balanced Index, an internally calculated blended benchmark. The Balanced Index is composed of a 55% weighting in the S&P 500 Index, the Fund’s primary benchmark, and a 45% weighting in the Barclays U.S. Aggregate Bond Index, the Fund’s secondary benchmark. During the period the S&P 500 Index returned 8.49%, while the Barclays U.S. Aggregate Bond Index returned 2.44%.
INVESTMENT ENVIRONMENT
U.S. equity indices rallied early in the period, continuing their recovery from the summer sell-off and relieved that the Federal Reserve (Fed) did not raise interest rates in September. Riskier segments of the fixed income market also benefited from the Fed’s delay. Volatility returned in November as subdued corporate earnings and manufacturing data weighed on sentiment. Monetary policy again influenced markets in December as the Fed raised interest rates for the first time in nearly a decade. The decision to hike rates pushed Treasury yields higher before year end.
Later, weak manufacturing data and an underwhelming holiday shopping season caused some to question whether the U.S. economy was sufficiently healthy to merit the cadence of rate hikes that the Fed had projected. While headline employment proved resilient, doggedly weak wage growth was flagged as an item of concern. As the calendar turned to 2016, worries re-emerged about the trajectory of the global economy. Crude oil prices resumed their slide, plummeting to levels not seen in over a decade. Stocks also fell, once again entering correction territory, as did credit markets. U.S. Treasurys rallied on these concerns, and based on their relative attractiveness versus negative interest rates abroad.
Aided by recovering commodities and the Fed’s March decision to lower its expected rate hike trajectory, corporate credit and equities recovered toward the end of the period. The yield on the 10-year ended March at 1.77%, down from 2.04% on September 30 while the yield on the 2-year note finished the period at 0.72% up from 0.63%.
Spreads on corporate credit fluctuated along with market volatility. Investment-grade corporate credit spreads widened from 160 basis points (one basis point is equal to one hundredth of 1%) at September’s end to 200 basis points near mid-February before finishing the period at 154 basis points. After widening from 630 basis points to 839 basis points, spreads on high-yield corporates tightened back to 656 basis points by period end.
Given the period’s volatility, historically defensive telecoms, utilities and consumer staples were among the strongest performing equity sectors. Previously stressed materials climbed back into positive territory, as did energy, though to a lesser degree. Health care underperformed broad equities, hampered by sector-specific issues. Financials were weighed down by the expectation of lower-for-longer interest rates, which tend to pressure margins.
PERFORMANCE DISCUSSION
The Fund, which seeks to provide more consistent returns over time by allocating across the spectrum of fixed income and equity securities, underperformed the Balanced Index, its blended benchmark of the S&P 500 Index (55%) and the Barclays U.S. Aggregate Bond Index (45%). The Fund also underperformed its primary benchmark, the S&P 500 Index, but outperformed its secondary benchmark, the Barclays U.S. Aggregate Bond Index.
The equity-to-fixed-income allocation ended the period with an equity weighting of approximately 59.5%, a fixed income weighting of approximately 40.0% and the remainder in cash. Our equity allocation may vary based
Janus Investment Fund | 1 |
Janus Balanced Fund (unaudited)
on market conditions, and the current level reflects our view that on a risk-adjusted basis, equities present greater opportunity for returns in the present environment.
The Fund’s equity sleeve underperformed its benchmark, the S&P 500 Index. Relative underperformance was largely driven by our specialty pharmaceutical and biotech holdings. Negative sentiment has surrounded the health care sector, due in large part to political rhetoric about controlling drug prices. Questionable accounting and drug pricing tactics at one of the largest and most well-known specialty pharmaceutical companies, which we no longer own, has cast a further shadow over all specialty pharmaceutical companies. Stock selection in financials and industrials also detracted.
The industrials sector’s performance was weakened by one stock in particular, Union Pacific. The slowdown in the oil market presented challenges for Union Pacific and rail companies in general. The weaker rail volumes and operating margins have been disappointing and we exited the position.
Regeneron, a biotechnology pharmaceutical, was negatively impacted both by the general headwinds in biotech and by slower than expected sales for one of its drugs controlling cholesterol. News that the company lost a court case with a competitor over patent infringement for a drug also weighed on the stock. We continue to like the company. We believe sales for its cholesterol drug were hampered by reimbursement issues from insurance companies, and that sales are poised to pick up. In addition, we continue to like some of the company’s other innovative treatments.
Eli Lilly’s stock was not immune to the health care sector’s sell-off, and also weighed on performance. However, we do not believe any of the company’s underlying fundamentals have changed. We still like some of the drugs in the company’s pipeline and also like the company’s high dividend yield.
Relative contributors included our security selection in consumer discretionary as well as our stock selection and overweight to materials. Our underweight in energy helped drive the sector’s relative outperformance, which reinforces our view that what we do not own can be just as important as what we do. Individual issuers Microsoft, Alphabet Inc. (formerly Google) and Dollar Tree Inc. were top performing stocks.
Microsoft’s stock benefited from an upward re-valuation in recent months as market focus shifted from weak personal computer sales to attractive parts of its business that continue to expand at a profitable rate, such as its public and private cloud offerings. We also remain encouraged by management’s additional cost reduction inroads.
Alphabet Inc. (formerly Google) benefited from better than expected earnings results and an announcement of a significant stock buyback program. We believe the company provides advertisers with superior cross-device marketing offerings, and we see continued opportunity for Google to monetize its Android mobile platform. We also see opportunity for Google to increase monetization of its YouTube platform in the coming quarters now that it is easier for advertisers to buy ads and target specific audience segments of YouTube.
Dollar Tree’s stock was up after the company showed progress in integrating newly-merged Family Dollar, which helped increase investor confidence in the company. We remain encouraged by the opportunity for Dollar Tree’s management team to improve margins for the former Family Dollar franchises. We also believe dollar stores offering consumers low price points are well positioned in a relatively weak economic environment.
The Fund’s fixed income sleeve underperformed its benchmark, the Barclays U.S. Aggregate Bond Index. We held our defensive stance, and focused security selection on higher quality companies with stable free cash flows and management teams committed to balance sheet strength. We favored shorter to intermediate-term corporate credits in which we believe we have a clearer insight on the issuers’ fundamentals and ability to pay down debt. Consequently, we gave up some ground as the rally in lower quality credits dominated the latter portion of the period. Both investment-grade and high-yield corporate credit positioning weighed on relative performance.
On a credit sector basis, our holdings in midstream and independent energy, as well as technology, detracted from relative results. Energy companies were generally challenged by continued low prices in crude oil. Companies including Chesapeake Energy and EnLink Midstream Partners LP impacted Fund performance. While Chesapeake Energy, a major natural gas producer with some oil assets, had achieved productivity gains to help combat the weak price environment, we exited the position during the period. EnLink faced challenges as its sponsor, exploration and production company Devon Energy, faced ratings downgrades driven largely by lower
2 | MARCH 31, 2016 |
Janus Balanced Fund (unaudited)
commodity prices and elevated leverage. Moody’s subsequently downgraded EnLink. We exited our position during the period.
The underperformance in technology was largely a function of hard disk manufacturer Seagate Technology. Hard disk year-over-year demand has continued to weaken due to limited personal computer growth in emerging markets. Elevated issuance in the investment-grade segment of technology also weighed on spreads. While we have reduced the position, we remain constructive on an improving earnings outlook and a management team focused on deleveraging.
Security selection in automotives, diversified manufacturing and building materials contributed positively to relative performance. Individual issuers Fidelity National Information Services, Anheuser-Busch InBev and Newell Rubbermaid aided relative results. Banking and payment technology company Fidelity National Information Services is a market leader within the financial technology industry. We like the company’s defensive business model, recurring earnings and strong free cash flow. Management has expressed a commitment to paying down debt following last year’s acquisition of SunGard.
We see long-term upside in beverage and brewing company Anheuser-Busch InBev due to management’s commitment to deleveraging. The company has a track record of delevering post acquisitions, which is pertinent based on its recent purchase of SABMiller.
Newell Rubbermaid fits our focus of seeking corporate credit with stable free cash flows and a management team focused on balance sheet strength. The company, which manufactures and markets branded consumer products, recently purchased Jarden Corporation and has expressed commitment to delevering in the near-term.
On an asset class basis, our out-of-index exposure to preferred stock contributed to relative performance. Our U.S. Treasury allocation was another relative contributor primarily due to yield curve positioning. While we are underweight Treasurys, we are overweight the long end of the curve, in expectation of curve flattening. We favor longer dated Treasurys to hedge against volatility in our corporate credit exposure. Conversely, we consider our positioning in short-term Treasurys as a source of liquidity.
Our holdings in commercial mortgage-backed securities (CMBS) detracted from relative results. We are overweight the asset class and are focusing on higher yielding, shorter duration securities than the index. We believe short-term technicals in the market led to the sector’s downturn as opposed to issues in the underlying real estate. Market volatility and illiquidity contributed to spread widening as did concerns that aggressive loans maturing in a more conservative market may struggle to obtain refinancing. Our positions continue to be either legacy CMBS that have delevered or single-asset/single-borrower CMBS on which we have conducted robust fundamental analysis on the underlying properties.
Please see the Derivative Instruments section in the "Notes to Financial Statements" for a discussion of derivatives used by the Fund.
OUTLOOK
While the economy is growing at a slow clip, we remain constructive on U.S. equities. Given slow growth and cautious statements from the Fed, we expect monetary policy to remain accommodative and for interest rates to remain low this year. That backdrop is typically favorable for growth equities and dividend-paying areas, two areas of the market in which we tend to focus.
While we are positive on a broad basis, the current environment creates varying outlooks for different sectors. In our view, the outlook for industrial companies, many of which have growth prospects tied to energy companies or to emerging markets, remains weak. Within the energy sector, we are still not stepping in and buying stocks as we believe the low oil price environment will persist. The recent rebound in oil was due largely to market-driven short covering, in our opinion, as speculative investors attempted to exit bearish views on commodities. Our longer term view on health care remains in place. We believe that innovation is driving new drug creation to meet high, unmet medical needs. While we foresee continued volatility in drug-related names throughout 2016 given the news flow around politics, overall in the battle between efficacy and rhetoric, we believe efficacy will win. We are most positive on the consumer discretionary sector, where companies are benefiting from improved U.S. consumer spending power at a broad level, and at the company level, select companies are also benefiting from value-creating innovation.
Within the fixed income sleeve, we remain defensively positioned, with a focus on capital preservation, as we believe the volatility seen in credit markets through the first quarter of 2016 will remain a central theme. The trajectory of U.S. interest rate hikes continues to be one of our primary concerns. Recent monetary policy has
Janus Investment Fund | 3 |
Janus Balanced Fund (unaudited)
strongly influenced the markets, and the state of the markets and slowing global growth has undoubtedly influenced the actions of the Fed. While the Fed has recently lowered its expected trajectory of rate hikes to better align with market expectations, we foresee additional bouts of volatility as likely over the course of the year. Should the discussion of an accelerated increase in interest rate hikes come back to the table, we believe there could be another sell-off in risk assets. For now, however, the lower rate trajectory is likely to cause a weaker U.S. dollar.
Commodity companies, in our view, are aided by a weakening U.S. dollar, while the imbalance in supply and demand persists and commodities fundamentals remain weak. With a belief that the price of crude oil will remain at lower levels for the foreseeable future, within the energy-related sectors, we seek only higher quality companies with strong fundamentals that can survive at lower-for-longer prices.
Additionally, we are mindful that we appear to be in the later stages of the credit cycle, as evidenced by elevated levels of merger and acquisition activity, share buybacks and debt issuance. Subdued earnings growth in combination with deteriorating balance sheets and weakening credit metrics lend to a cautious outlook on corporate credit. We are focused on companies with stable free cash flows and dedication to balance sheet strength. We believe these higher quality issuers can offer participation on the upside as well as downside protection.
We continue to believe that security avoidance will be a central driver of performance as the perils associated with holding risk assets far outweigh the potential upside. We believe company fundamentals remain under pressure and consider it too early to adopt a more aggressive, opportunistic stance. We maintain our defensive posture within the fixed income sleeve, focusing on our commitment to deliver capital preservation and strong risk-adjusted returns for our clients.
Thank you for investing in Janus Balanced Fund.
4 | MARCH 31, 2016 |
Janus Balanced Fund (unaudited)
Fund At A Glance
March 31, 2016
5 Top Performers - Holdings |
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Contribution | Contribution | |||||
Microsoft Corp. | 1.03% | Union Pacific Corp. | -0.42% | |||
Alphabet, Inc. - Class C | 0.76% | Regeneron Pharmaceuticals, Inc. | -0.34% | |||
EI du Pont de Nemours & Co. | 0.66% | CBRE Group, Inc. - Class A | -0.30% | |||
Dollar Tree, Inc. | 0.63% | Endo International PLC | -0.28% | |||
Home Depot, Inc. | 0.51% | Eli Lilly & Co. | -0.28% | |||
5 Top Performers - Sectors* |
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Fund Weighting | S&P 500® Index | |||||
Fund Contribution | (Average % of Equity) | Weighting | ||||
Consumer Discretionary | 0.71% | 18.52% | 12.94% | |||
Energy | 0.37% | 0.85% | 6.80% | |||
Materials | 0.25% | 5.15% | 2.81% | |||
Other** | 0.18% | 2.14% | 0.00% | |||
Information Technology | -0.20% | 20.67% | 20.65% | |||
5 Bottom Performers - Sectors* |
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Fund Weighting | S&P 500® Index | |||||
Fund Contribution | (Average % of Equity) | Weighting | ||||
Health Care | -1.30% | 21.66% | 14.73% | |||
Financials | -0.95% | 16.12% | 16.14% | |||
Industrials | -0.93% | 9.90% | 10.10% | |||
Telecommunication Services | -0.36% | 0.31% | 2.53% | |||
Consumer Staples | -0.31% | 4.68% | 10.16% | |||
Security contribution to performance is measured by using an algorithm that multiplies the daily performance of each security with the previous day’s ending weight in the portfolio and is gross of advisory fees. Fixed income securities and certain equity securities, such as private placements and some share classes of equity securities, are excluded. | ||||||
* | Based on sector classification according to the Global Industry Classification Standard (“GICS”) codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |||||
** | Not a GICS classified sector. | |||||
Janus Investment Fund | 5 |
Janus Balanced Fund (unaudited)
Fund At A Glance
March 31, 2016
5 Largest Equity Holdings - (% of Net Assets) | |
Microsoft Corp. | |
Software | 2.9% |
Amgen, Inc. | |
Biotechnology | 2.9% |
MasterCard, Inc. - Class A | |
Information Technology Services | 2.9% |
Alphabet, Inc. - Class C | |
Internet Software & Services | 2.4% |
NIKE, Inc. - Class B | |
Textiles, Apparel & Luxury Goods | 2.3% |
13.4% | |
Asset Allocation - (% of Net Assets) | |||||
Common Stocks | 58.9% | ||||
Corporate Bonds | 14.3% | ||||
U.S. Treasury Notes/Bonds | 13.0% | ||||
Mortgage-Backed Securities | 9.3% | ||||
Asset-Backed/Commercial Mortgage-Backed Securities | 2.8% | ||||
Preferred Stocks | 0.6% | ||||
Investment Companies | 0.5% | ||||
Bank Loans and Mezzanine Loans | 0.3% | ||||
Other | 0.3% | ||||
100.0% | |||||
Top Country Allocations - Long Positions - (% of Investment Securities) | |
As of March 31, 2016
| As of September 30, 2015
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6 | MARCH 31, 2016 |
Janus Balanced Fund (unaudited)
Performance
See important disclosures on the next page. |
| Expense Ratios - | |||||||||
Average Annual Total Return - for the periods ended March 31, 2016 |
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| per the January 28, 2016 prospectuses | |||||||
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| Fiscal
| One
| Five | Ten
| Since |
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| Total Annual Fund
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Class A Shares at NAV |
| 3.20% | -1.96% | 7.13% | 6.89% | 9.46% |
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| 0.93% | |
Class A Shares at MOP |
| -2.74% | -7.59% | 5.87% | 6.26% | 9.19% |
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Class C Shares at NAV | 2.83% | -2.61% | 6.34% | 6.10% | 8.79% |
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| 1.66% | ||
Class C Shares at CDSC |
| 1.85% | -3.53% | 6.34% | 6.10% | 8.79% |
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Class D Shares(1) |
| 3.32% | -1.75% | 7.36% | 7.05% | 9.54% |
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| 0.73% | |
Class I Shares |
| 3.32% | -1.67% | 7.43% | 6.98% | 9.51% |
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| 0.65% | |
Class N Shares |
| 3.37% | -1.61% | 7.25% | 6.98% | 9.51% |
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| 0.58% | |
Class R Shares |
| 2.99% | -2.33% | 6.72% | 6.44% | 9.08% |
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| 1.32% | |
Class S Shares |
| 3.12% | -2.08% | 6.98% | 6.70% | 9.31% |
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| 1.08% | |
Class T Shares |
| 3.25% | -1.83% | 7.25% | 6.98% | 9.51% |
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| 0.83% | |
S&P 500® Index |
| 8.49% | 1.78% | 11.58% | 7.01% | 9.18% |
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Barclays U.S. Aggregate Bond Index |
| 2.44% | 1.96% | 3.78% | 4.90% | 5.73% |
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Balanced Index |
| 5.91% | 2.11% | 8.22% | 6.34% | 7.92% |
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Morningstar Quartile - Class T Shares |
| - | 2nd | 1st | 1st | 1st |
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Morningstar Ranking - based on total returns for Moderate Allocation Funds |
| - | 322/963 | 183/828 | 35/668 | 20/246 |
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Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
Janus Investment Fund | 7 |
Janus Balanced Fund (unaudited)
Performance
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Fixed income securities are subject to interest rate, inflation, credit and default risk. The bond market is volatile. As interest rates rise, bond prices usually fall, and vice versa. The return of principal is not guaranteed,and prices may decline if an issuer fails to make timely payments or its credit strength weakens.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
See Financial Highlights for actual expense ratios during the reporting period.
Class A Shares, Class C Shares, Class R Shares, and Class S Shares commenced operations on July 6, 2009. Performance shown for each class for periods prior to July 6, 2009, reflects the performance of the Fund’s Class J Shares, the initial share class (renamed Class T Shares effective February 16, 2010), calculated using the fees and expenses of each respective class, without the effect of any fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
Class I Shares commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers.
Class N Shares commenced operations on May 31, 2012. Performance shown for periods prior to May 31, 2012, reflects the performance of the Fund’s Class T Shares, calculated using the fees and expenses of Class T Shares, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund's commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund's prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2016 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An Index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
Effective December 31, 2015, Jeremiah Buckley, Marc Pinto, Mayur Saigal, Gibson Smith and Darrell Watters are Co-Portfolio Managers of the Fund. Effective April 1, 2016, Gibson Smith is removed as Co-Portfolio Manager of the Fund.
*The Fund’s inception date – September 1, 1992
(1) Closed to certain new investors.
8 | MARCH 31, 2016 |
Janus Balanced Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, 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 appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Actual | Hypothetical
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| Beginning | Ending | Expenses |
| Beginning | Ending | Expenses | Net Annualized | ||
Class A Shares | $1,000.00 | $1,032.00 | $4.72 |
| $1,000.00 | $1,020.35 | $4.70 | 0.93% | ||
Class C Shares | $1,000.00 | $1,028.30 | $8.42 |
| $1,000.00 | $1,016.70 | $8.37 | 1.66% | ||
Class D Shares | $1,000.00 | $1,033.20 | $3.71 |
| $1,000.00 | $1,021.35 | $3.69 | 0.73% | ||
Class I Shares | $1,000.00 | $1,033.20 | $3.35 |
| $1,000.00 | $1,021.70 | $3.34 | 0.66% | ||
Class N Shares | $1,000.00 | $1,033.70 | $2.95 |
| $1,000.00 | $1,022.10 | $2.93 | 0.58% | ||
Class R Shares | $1,000.00 | $1,029.90 | $6.75 |
| $1,000.00 | $1,018.35 | $6.71 | 1.33% | ||
Class S Shares | $1,000.00 | $1,031.20 | $5.48 |
| $1,000.00 | $1,019.60 | $5.45 | 1.08% | ||
Class T Shares | $1,000.00 | $1,032.50 | $4.22 |
| $1,000.00 | $1,020.85 | $4.19 | 0.83% | ||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. | |||||||||
Janus Investment Fund | 9 |
Janus Balanced Fund
Schedule of Investments (unaudited)
March 31, 2016
Shares
or | Value | ||||||
Asset-Backed/Commercial Mortgage-Backed Securities – 2.8% | |||||||
AmeriCredit Automobile Receivables 2016-1, 3.5900%, 2/8/22 | $8,596,000 | $8,622,273 | |||||
AmeriCredit Automobile Receivables Trust 2012-4, 3.8200%, 2/10/20 (144A) | 3,975,000 | 4,019,968 | |||||
AmeriCredit Automobile Receivables Trust 2013-4, 3.3100%, 10/8/19 | 3,128,000 | 3,188,576 | |||||
AmeriCredit Automobile Receivables Trust 2015-2, 3.0000%, 6/8/21 | 5,920,000 | 5,864,843 | |||||
Applebee's Funding LLC / IHOP Funding LLC, 4.2770%, 9/5/44 (144A) | 35,209,000 | 35,070,491 | |||||
Aventura Mall Trust 2013-AVM, 3.7427%, 12/5/32 (144A)‡ | 7,763,000 | 7,636,403 | |||||
BAMLL Commercial Mortgage Securities Trust 2015-200P, | |||||||
3.5958%, 4/14/33 (144A)‡ | 7,323,000 | 6,111,015 | |||||
Banc of America Commercial Mortgage Trust 2006-6, 5.4210%, 10/10/45 | 7,147,117 | 7,127,878 | |||||
Banc of America Commercial Mortgage Trust 2007-3, 5.5434%, 6/10/49‡ | 4,582,502 | 4,548,083 | |||||
Boca Hotel Portfolio Trust 2013-BOCA, 3.4862%, 8/15/26 (144A)‡ | 5,279,000 | 5,260,760 | |||||
CGBAM Commercial Mortgage Trust 2014-HD, 3.4362%, 2/15/31 (144A)‡ | 2,843,000 | 2,674,544 | |||||
CKE Restaurant Holdings, Inc., 4.4740%, 3/20/43 (144A) | 16,426,955 | 16,406,638 | |||||
COMM 2007-C9 Mortgage Trust, 5.6500%, 12/10/49‡ | 5,750,042 | 5,755,540 | |||||
Commercial Mortgage Trust 2007-GG11, 5.8670%, 12/10/49‡ | 3,931,436 | 4,042,404 | |||||
Core Industrial Trust 2015-TEXW, 3.8487%, 2/10/34 (144A)‡ | 7,789,000 | 7,626,817 | |||||
DB Master Finance LLC 2015-1, 3.2620%, 2/20/45 (144A) | 5,742,990 | 5,654,261 | |||||
Domino's Pizza Master Issuer LLC, 5.2160%, 1/25/42 (144A) | 7,235,602 | 7,404,573 | |||||
Domino's Pizza Master Issuer LLC, 3.4840%, 10/25/45 (144A) | 15,688,680 | 15,092,385 | |||||
Freddie Mac Structured Agency Credit Risk Debt Notes, 2.8330%, 10/25/24‡ | 2,185,569 | 2,205,289 | |||||
Freddie Mac Structured Agency Credit Risk Debt Notes, 3.0830%, 10/25/24‡ | 2,961,000 | 2,991,215 | |||||
Freddie Mac Structured Agency Credit Risk Debt Notes, 2.6330%, 3/25/25‡ | 9,810,000 | 9,842,302 | |||||
FREMF 2010 K-SCT Mortgage Trust, 2.0000%, 1/25/20 (144A)§ | 11,953,853 | 10,966,638 | |||||
GAHR Commercial Mortgage Trust 2015-NRF, 3.3822%, 12/15/19 (144A)‡ | 3,875,000 | 3,667,845 | |||||
GS Mortgage Securities Corp. II, 3.4352%, 12/10/27 (144A)‡ | 9,415,000 | 8,985,105 | |||||
GS Mortgage Securities Corp. Trust 2013-NYC5, 3.6490%, 1/10/30 (144A)‡ | 3,856,000 | 3,819,862 | |||||
Hilton USA Trust 2013-HLT, 5.2216%, 11/5/30 (144A)‡ | 5,177,000 | 5,207,462 | |||||
JP Morgan Chase Commercial Mortgage Securities Trust 2013-WT, | |||||||
2.8044%, 2/16/25 (144A) | 7,369,006 | 7,433,348 | |||||
JP Morgan Chase Commercial Mortgage Securities Trust 2013-WT, | |||||||
4.8447%, 2/16/25 (144A) | 6,350,000 | 6,401,517 | |||||
JP Morgan Chase Commercial Mortgage Securities Trust 2015-COSMO, | |||||||
2.2362%, 1/15/32 (144A)‡ | 5,249,000 | 5,122,163 | |||||
JP Morgan Chase Commercial Mortgage Securities Trust 2015-COSMO, | |||||||
4.3862%, 1/15/32 (144A)‡ | 4,577,000 | 4,384,588 | |||||
JP Morgan Chase Commercial Mortgage Securities Trust 2015-SGP, | |||||||
3.1862%, 7/15/36 (144A)‡ | 2,621,000 | 2,597,088 | |||||
JP Morgan Chase Commercial Mortgage Securities Trust 2015-SGP, | |||||||
4.9362%, 7/15/36 (144A)‡ | 8,195,000 | 7,977,547 | |||||
JP Morgan Chase Commercial Mortgage Securities Trust 2015-UES, | |||||||
3.6210%, 9/5/32 (144A)‡ | 5,438,000 | 5,114,235 | |||||
LB-UBS Commercial Mortgage Trust 2007-C1, 5.4840%, 2/15/40 | 5,314,420 | 5,303,561 | |||||
LB-UBS Commercial Mortgage Trust 2007-C2, 5.4930%, 2/15/40‡ | 3,454,678 | 3,508,941 | |||||
LB-UBS Commercial Mortgage Trust 2007-C7, 6.2387%, 9/15/45‡ | 4,661,755 | 4,553,455 | |||||
Santander Drive Auto Receivables Trust 2012-6, 2.5200%, 9/17/18 | 3,633,000 | 3,657,053 | |||||
Santander Drive Auto Receivables Trust 2013-4, 4.6700%, 1/15/20 (144A) | 10,982,000 | 11,012,848 | |||||
Santander Drive Auto Receivables Trust 2013-A, 4.7100%, 1/15/21 (144A) | 5,851,000 | 5,974,425 | |||||
Santander Drive Auto Receivables Trust 2015-1, 3.2400%, 4/15/21 | 6,207,000 | 6,254,665 | |||||
Santander Drive Auto Receivables Trust 2015-4, 3.5300%, 8/16/21 | 10,633,000 | 10,657,815 | |||||
Starwood Retail Property Trust 2014-STAR, 2.9362%, 11/15/27 (144A)‡ | 3,238,000 | 3,145,228 | |||||
Starwood Retail Property Trust 2014-STAR, 3.6862%, 11/15/27 (144A)‡ | 10,070,000 | 9,475,055 | |||||
Starwood Retail Property Trust 2014-STAR, 4.5862%, 11/15/27 (144A)‡ | 5,338,000 | 4,979,085 | |||||
Wachovia Bank Commercial Mortgage Trust Series 2007-C30, 5.3830%, 12/15/43 | 10,073,980 | 10,255,411 | |||||
Wachovia Bank Commercial Mortgage Trust Series 2007-C31, 5.6600%, 4/15/47‡ | 14,972,961 | 14,822,839 | |||||
Wachovia Bank Commercial Mortgage Trust Series 2007-C33, 5.9457%, 2/15/51‡ | 8,408,593 | 8,283,263 | |||||
Wachovia Bank Commercial Mortgage Trust Series 2007-C34, 5.9451%, 5/15/46‡ | 3,609,121 | 3,584,377 | |||||
Wells Fargo Commercial Mortgage Trust 2014-TISH, 3.1862%, 1/15/27 (144A)‡ | 3,115,000 | 2,964,914 | |||||
Wells Fargo Commercial Mortgage Trust 2014-TISH, 2.6862%, 2/15/27 (144A)‡ | 4,304,000 | 4,104,709 | |||||
Wells Fargo Commercial Mortgage Trust 2014-TISH, 3.6862%, 2/15/27 (144A)‡ | 1,557,000 | 1,520,662 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
10 | MARCH 31, 2016 |
Janus Balanced Fund
Schedule of Investments (unaudited)
March 31, 2016
Shares
or | Value | ||||||
Asset-Backed/Commercial Mortgage-Backed Securities – (continued) | |||||||
Wendy's Funding LLC 2015-1, 3.3710%, 6/15/45 (144A) | $17,493,095 | $17,172,272 | |||||
Total Asset-Backed/Commercial Mortgage-Backed Securities (cost $377,257,995) | 370,054,234 | ||||||
Bank Loans and Mezzanine Loans – 0.3% | |||||||
Communications – 0.1% | |||||||
CCO Safari III LLC, 3.5000%, 1/24/23‡ | 11,357,000 | 11,360,180 | |||||
Tribune Media Co., 3.7500%, 12/27/20‡ | 6,753,431 | 6,722,501 | |||||
18,082,681 | |||||||
Consumer Non-Cyclical – 0.1% | |||||||
IMS Health, Inc., 3.5000%, 3/17/21‡ | 10,886,820 | 10,852,853 | |||||
Technology – 0.1% | |||||||
Avago Technologies Cayman Finance, Ltd., 4.2500%, 2/1/23‡ | 13,719,000 | 13,642,585 | |||||
Total Bank Loans and Mezzanine Loans (cost $42,508,436) | 42,578,119 | ||||||
Corporate Bonds – 14.3% | |||||||
Asset-Backed Securities – 0.1% | |||||||
American Tower Trust I, 1.5510%, 3/15/18 (144A) | 10,969,000 | 10,960,905 | |||||
Banking – 1.9% | |||||||
Ally Financial, Inc., 8.0000%, 12/31/18 | 2,216,000 | 2,393,280 | |||||
American Express Co., 6.8000%, 9/1/66‡ | 12,678,000 | 12,709,695 | |||||
Bank of America Corp., 5.7500%, 8/15/16 | 3,825,000 | 3,888,640 | |||||
Bank of America Corp., 4.4500%, 3/3/26 | 12,924,000 | 13,314,163 | |||||
Bank of America Corp., 8.0000%µ | 7,142,000 | 6,990,233 | |||||
Bank of America Corp., 6.3000%µ | 7,469,000 | 7,693,070 | |||||
Citizens Financial Group, Inc., 4.3000%, 12/3/25 | 13,470,000 | 13,924,074 | |||||
Discover Financial Services, 3.9500%, 11/6/24 | 4,412,000 | 4,369,137 | |||||
Discover Financial Services, 3.7500%, 3/4/25 | 9,403,000 | 9,152,297 | |||||
Goldman Sachs Capital I, 6.3450%, 2/15/34 | 20,642,000 | 24,092,930 | |||||
Goldman Sachs Group, Inc., 5.6250%, 1/15/17 | 4,354,000 | 4,491,856 | |||||
Goldman Sachs Group, Inc., 3.7500%, 2/25/26 | 13,004,000 | 13,336,564 | |||||
JPMorgan Chase & Co., 4.2500%, 10/1/27 | 12,882,000 | 13,398,955 | |||||
Morgan Stanley, 2.4500%, 2/1/19 | 13,441,000 | 13,639,806 | |||||
Morgan Stanley, 4.8750%, 11/1/22 | 4,509,000 | 4,885,254 | |||||
Morgan Stanley, 3.9500%, 4/23/27 | 9,534,000 | 9,544,077 | |||||
Morgan Stanley, 5.5500%µ | 11,871,000 | 11,701,838 | |||||
Royal Bank of Scotland Group PLC, 6.1000%, 6/10/23 | 14,254,000 | 14,599,602 | |||||
Royal Bank of Scotland Group PLC, 6.0000%, 12/19/23 | 8,249,000 | 8,354,587 | |||||
Royal Bank of Scotland Group PLC, 5.1250%, 5/28/24 | 4,059,000 | 3,902,282 | |||||
Santander UK PLC, 5.0000%, 11/7/23 (144A) | 29,438,000 | 29,876,803 | |||||
SVB Financial Group, 5.3750%, 9/15/20 | 11,723,000 | 13,026,246 | |||||
Synchrony Financial, 3.0000%, 8/15/19 | 13,527,000 | 13,741,457 | |||||
Wells Fargo & Co., 5.8750%µ | 3,907,000 | 4,171,895 | |||||
Zions Bancorporation, 5.8000%µ | 2,948,000 | 2,800,600 | |||||
259,999,341 | |||||||
Basic Industry – 0.6% | |||||||
Albemarle Corp., 4.1500%, 12/1/24 | 9,260,000 | 9,167,372 | |||||
Albemarle Corp., 5.4500%, 12/1/44 | 10,609,000 | 10,159,104 | |||||
Alcoa, Inc., 5.1250%, 10/1/24 | 13,891,000 | 13,174,780 | |||||
Ashland, Inc., 3.8750%, 4/15/18 | 6,264,000 | 6,475,410 | |||||
Ashland, Inc., 6.8750%, 5/15/43 | 8,045,000 | 7,662,863 | |||||
Georgia-Pacific LLC, 3.1630%, 11/15/21 (144A) | 19,441,000 | 19,833,164 | |||||
Georgia-Pacific LLC, 3.6000%, 3/1/25 (144A) | 9,845,000 | 10,184,731 | |||||
Reliance Steel & Aluminum Co., 4.5000%, 4/15/23 | 9,842,000 | 9,487,649 | |||||
86,145,073 | |||||||
Brokerage – 1.6% | |||||||
Ameriprise Financial, Inc., 7.5180%, 6/1/66‡ | 21,664,000 | 21,068,240 | |||||
Carlyle Holdings Finance LLC, 3.8750%, 2/1/23 (144A) | 5,027,000 | 5,190,458 | |||||
Charles Schwab Corp., 3.0000%, 3/10/25 | 8,007,000 | 8,115,719 | |||||
Charles Schwab Corp., 7.0000%µ | 10,876,000 | 12,398,640 | |||||
E*TRADE Financial Corp., 5.3750%, 11/15/22 | 12,951,000 | 13,679,494 | |||||
E*TRADE Financial Corp., 4.6250%, 9/15/23 | 17,434,000 | 17,390,415 | |||||
Intercontinental Exchange, Inc., 3.7500%, 12/1/25 | 10,820,000 | 11,045,391 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 11 |
Janus Balanced Fund
Schedule of Investments (unaudited)
March 31, 2016
Shares or | Value | |||||||
Corporate Bonds – (continued) | ||||||||
Brokerage – (continued) | ||||||||
Lazard Group LLC, 6.8500%, 6/15/17 | $562,000 | $592,240 | ||||||
Lazard Group LLC, 4.2500%, 11/14/20 | 13,060,000 | 13,638,375 | ||||||
Lazard Group LLC, 3.7500%, 2/13/25 | 2,888,000 | 2,665,670 | ||||||
Neuberger Berman Group LLC / Neuberger Berman Finance Corp., | ||||||||
5.8750%, 3/15/22 (144A) | 12,824,000 | 13,336,960 | ||||||
Neuberger Berman Group LLC / Neuberger Berman Finance Corp., | ||||||||
4.8750%, 4/15/45 (144A) | 13,780,000 | 11,670,640 | ||||||
Raymond James Financial, Inc., 4.2500%, 4/15/16 | 15,385,000 | 15,399,477 | ||||||
Raymond James Financial, Inc., 5.6250%, 4/1/24 | 29,699,000 | 32,901,473 | ||||||
Stifel Financial Corp., 4.2500%, 7/18/24 | 9,107,000 | 9,014,254 | ||||||
TD Ameritrade Holding Corp., 2.9500%, 4/1/22 | 11,095,000 | 11,324,345 | ||||||
TD Ameritrade Holding Corp., 3.6250%, 4/1/25 | 20,617,000 | 21,583,875 | ||||||
221,015,666 | ||||||||
Capital Goods – 0.8% | ||||||||
Ball Corp., 4.3750%, 12/15/20 | 6,595,000 | 6,862,922 | ||||||
CNH Industrial Capital LLC, 3.6250%, 4/15/18 | 7,138,000 | 7,138,000 | ||||||
FLIR Systems, Inc., 3.7500%, 9/1/16 | 11,460,000 | 11,563,553 | ||||||
General Electric Co., 5.0000%µ | 12,313,000 | 12,682,390 | ||||||
Hanson, Ltd., 6.1250%, 8/15/16 | 10,446,000 | 10,620,448 | ||||||
Harris Corp., 4.2500%, 10/1/16 | 9,205,000 | 9,335,048 | ||||||
Martin Marietta Materials, Inc., 4.2500%, 7/2/24 | 6,452,000 | 6,502,977 | ||||||
Masco Corp., 3.5000%, 4/1/21 | 3,162,000 | 3,185,715 | ||||||
Owens Corning, 4.2000%, 12/1/24 | 4,713,000 | 4,706,911 | ||||||
Vulcan Materials Co., 7.0000%, 6/15/18 | 7,734,000 | 8,488,065 | ||||||
Vulcan Materials Co., 7.5000%, 6/15/21 | 4,369,000 | 5,177,265 | ||||||
Vulcan Materials Co., 4.5000%, 4/1/25 | 20,170,000 | 20,724,675 | ||||||
106,987,969 | ||||||||
Communications – 0.5% | ||||||||
American Tower Corp., 3.3000%, 2/15/21 | 12,128,000 | 12,335,656 | ||||||
American Tower Corp., 4.4000%, 2/15/26 | 6,641,000 | 7,022,426 | ||||||
CCO Safari II LLC, 4.4640%, 7/23/22 (144A) | 11,389,000 | 11,904,557 | ||||||
CCO Safari II LLC, 4.9080%, 7/23/25 (144A) | 19,369,000 | 20,430,731 | ||||||
SBA Tower Trust, 2.9330%, 12/15/17 (144A) | 6,249,000 | 6,221,199 | ||||||
UBM PLC, 5.7500%, 11/3/20 (144A) | 12,268,000 | 13,288,256 | ||||||
71,202,825 | ||||||||
Consumer Cyclical – 1.3% | ||||||||
1011778 BC ULC / New Red Finance, Inc., 4.6250%, 1/15/22 (144A) | 13,545,000 | 13,782,038 | ||||||
Brinker International, Inc., 3.8750%, 5/15/23 | 15,739,000 | 15,455,084 | ||||||
CVS Health Corp., 2.8000%, 7/20/20 | 20,226,000 | 20,991,615 | ||||||
CVS Health Corp., 4.7500%, 12/1/22 (144A) | 5,017,000 | 5,629,761 | ||||||
CVS Health Corp., 5.0000%, 12/1/24 (144A) | 6,635,000 | 7,606,590 | ||||||
DR Horton, Inc., 4.7500%, 5/15/17 | 4,005,000 | 4,095,113 | ||||||
DR Horton, Inc., 3.7500%, 3/1/19 | 8,897,000 | 9,074,940 | ||||||
Ford Motor Credit Co. LLC, 3.9840%, 6/15/16 | 18,061,000 | 18,175,489 | ||||||
General Motors Co., 3.5000%, 10/2/18 | 8,409,000 | 8,607,764 | ||||||
General Motors Co., 4.8750%, 10/2/23 | 18,451,000 | 19,334,618 | ||||||
General Motors Financial Co., Inc., 3.1000%, 1/15/19 | 10,513,000 | 10,638,725 | ||||||
MDC Holdings, Inc., 5.5000%, 1/15/24 | 10,099,000 | 9,669,793 | ||||||
Schaeffler Finance BV, 4.2500%, 5/15/21 (144A) | 3,974,000 | 4,043,545 | ||||||
Toll Brothers Finance Corp., 4.0000%, 12/31/18 | 3,526,000 | 3,649,410 | ||||||
Toll Brothers Finance Corp., 5.8750%, 2/15/22 | 3,217,000 | 3,434,148 | ||||||
Toll Brothers Finance Corp., 4.3750%, 4/15/23 | 1,842,000 | 1,800,555 | ||||||
ZF North America Capital, Inc., 4.0000%, 4/29/20 (144A) | 5,101,000 | 5,158,386 | ||||||
ZF North America Capital, Inc., 4.5000%, 4/29/22 (144A) | 2,698,000 | 2,751,960 | ||||||
ZF North America Capital, Inc., 4.7500%, 4/29/25 (144A) | 5,183,000 | 5,157,085 | ||||||
169,056,619 | ||||||||
Consumer Non-Cyclical – 1.8% | ||||||||
Actavis Funding SCS, 3.0000%, 3/12/20 | 16,829,000 | 17,303,712 | ||||||
Actavis Funding SCS, 4.5500%, 3/15/35 | 9,178,000 | 9,456,185 | ||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
12 | MARCH 31, 2016 |
Janus Balanced Fund
Schedule of Investments (unaudited)
March 31, 2016
Shares or | Value | |||||||
Corporate Bonds – (continued) | ||||||||
Consumer Non-Cyclical – (continued) | ||||||||
Anheuser-Busch InBev Finance, Inc., 2.6500%, 2/1/21 | $7,480,000 | $7,686,351 | ||||||
Anheuser-Busch InBev Finance, Inc., 3.3000%, 2/1/23 | 19,885,000 | 20,672,903 | ||||||
Anheuser-Busch InBev Finance, Inc., 3.6500%, 2/1/26 | 12,738,000 | 13,395,446 | ||||||
Becton Dickinson and Co., 1.8000%, 12/15/17 | 11,129,000 | 11,175,786 | ||||||
Express Scripts Holding Co., 4.5000%, 2/25/26 | 4,384,000 | 4,539,049 | ||||||
Fresenius Medical Care US Finance II, Inc., 5.8750%, 1/31/22 (144A) | 10,428,000 | 11,455,158 | ||||||
HCA, Inc., 3.7500%, 3/15/19 | 6,502,000 | 6,660,649 | ||||||
HCA, Inc., 5.2500%, 6/15/26 | 13,046,000 | 13,372,150 | ||||||
Kraft Heinz Foods Co., 2.8000%, 7/2/20 (144A) | 7,963,000 | 8,179,124 | ||||||
Kraft Heinz Foods Co., 3.5000%, 7/15/22 (144A) | 6,799,000 | 7,135,442 | ||||||
Life Technologies Corp., 6.0000%, 3/1/20 | 7,834,000 | 8,778,412 | ||||||
Newell Rubbermaid, Inc., 3.1500%, 4/1/21 | 3,464,000 | 3,558,283 | ||||||
Newell Rubbermaid, Inc., 3.8500%, 4/1/23 | 3,284,000 | 3,405,873 | ||||||
Newell Rubbermaid, Inc., 4.2000%, 4/1/26 | 26,472,000 | 27,690,877 | ||||||
Newell Rubbermaid, Inc., 5.5000%, 4/1/46 | 4,123,000 | 4,479,211 | ||||||
Smithfield Foods, Inc., 5.2500%, 8/1/18 (144A) | 1,781,000 | 1,807,715 | ||||||
Sysco Corp., 2.5000%, 7/15/21 | 2,649,000 | 2,679,773 | ||||||
Sysco Corp., 3.3000%, 7/15/26 | 6,651,000 | 6,746,143 | ||||||
Thermo Fisher Scientific, Inc., 3.3000%, 2/15/22 | 6,060,000 | 6,177,358 | ||||||
Tyson Foods, Inc., 6.6000%, 4/1/16 | 8,400,000 | 8,400,000 | ||||||
Wm Wrigley Jr Co., 2.4000%, 10/21/18 (144A) | 18,926,000 | 19,114,995 | ||||||
Wm Wrigley Jr Co., 3.3750%, 10/21/20 (144A) | 6,177,000 | 6,432,400 | ||||||
Zimmer Biomet Holdings, Inc., 3.1500%, 4/1/22 | 7,915,000 | 8,032,411 | ||||||
238,335,406 | ||||||||
Electric – 0.2% | ||||||||
IPALCO Enterprises, Inc., 5.0000%, 5/1/18 | 5,726,000 | 6,012,300 | ||||||
PPL WEM, Ltd. / Western Power Distribution, Ltd., 3.9000%, 5/1/16 (144A) | 7,653,000 | 7,665,849 | ||||||
PPL WEM, Ltd. / Western Power Distribution, Ltd., 5.3750%, 5/1/21 (144A) | 10,561,000 | 11,712,286 | ||||||
25,390,435 | ||||||||
Energy – 1.3% | ||||||||
Anadarko Petroleum Corp., 6.3750%, 9/15/17 | 3,144,000 | 3,294,833 | ||||||
Anadarko Petroleum Corp., 4.8500%, 3/15/21 | 1,743,000 | 1,761,488 | ||||||
Anadarko Petroleum Corp., 5.5500%, 3/15/26 | 6,358,000 | 6,413,976 | ||||||
Anadarko Petroleum Corp., 6.6000%, 3/15/46 | 6,355,000 | 6,487,921 | ||||||
Canadian Natural Resources, Ltd., 5.7000%, 5/15/17 | 1,983,000 | 2,044,124 | ||||||
Canadian Natural Resources, Ltd., 5.9000%, 2/1/18 | 4,210,000 | 4,367,736 | ||||||
Cimarex Energy Co., 5.8750%, 5/1/22 | 8,659,000 | 8,944,660 | ||||||
Cimarex Energy Co., 4.3750%, 6/1/24 | 2,913,000 | 2,868,239 | ||||||
ConocoPhillips Co., 4.2000%, 3/15/21 | 8,091,000 | 8,449,553 | ||||||
ConocoPhillips Co., 4.9500%, 3/15/26 | 16,185,000 | 16,896,201 | ||||||
ConocoPhillips Co., 5.9500%, 3/15/46 | 2,043,000 | 2,197,782 | ||||||
Devon Energy Corp., 2.2500%, 12/15/18 | 9,835,000 | 9,178,897 | ||||||
Energy Transfer Partners LP, 4.1500%, 10/1/20 | 5,990,000 | 5,755,174 | ||||||
Helmerich & Payne International Drilling Co., 4.6500%, 3/15/25 | 17,549,000 | 17,661,331 | ||||||
Hess Corp., 8.1250%, 2/15/19 | 3,196,000 | 3,511,432 | ||||||
Kinder Morgan Energy Partners LP, 5.0000%, 10/1/21 | 5,491,000 | 5,602,434 | ||||||
Kinder Morgan Energy Partners LP, 4.3000%, 5/1/24 | 6,018,000 | 5,719,152 | ||||||
Kinder Morgan, Inc., 6.5000%, 9/15/20 | 566,000 | 607,411 | ||||||
Motiva Enterprises LLC, 5.7500%, 1/15/20 (144A) | 8,118,000 | 8,465,597 | ||||||
NGL Energy Partners LP / NGL Energy Finance Corp., 5.1250%, 7/15/19 | 3,392,000 | 2,052,160 | ||||||
Oceaneering International, Inc., 4.6500%, 11/15/24 | 12,760,000 | 10,988,899 | ||||||
Phillips 66 Partners LP, 3.6050%, 2/15/25 | 3,618,000 | 3,287,695 | ||||||
Spectra Energy Partners LP, 4.7500%, 3/15/24 | 14,118,000 | 15,208,827 | ||||||
Western Gas Partners LP, 5.3750%, 6/1/21 | 19,545,000 | 18,912,309 | ||||||
170,677,831 | ||||||||
Finance Companies – 0.4% | ||||||||
AerCap Ireland Capital, Ltd. / AerCap Global Aviation Trust, | ||||||||
4.6250%, 10/30/20 | 5,821,000 | 5,966,525 | ||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 13 |
Janus Balanced Fund
Schedule of Investments (unaudited)
March 31, 2016
Shares or | Value | |||||||
Corporate Bonds – (continued) | ||||||||
Finance Companies – (continued) | ||||||||
AerCap Ireland Capital, Ltd. / AerCap Global Aviation Trust, | ||||||||
4.6250%, 7/1/22 | $1,113,000 | $1,135,260 | ||||||
CIT Group, Inc., 4.2500%, 8/15/17 | 24,149,000 | 24,574,264 | ||||||
CIT Group, Inc., 5.5000%, 2/15/19 (144A) | 7,108,000 | 7,353,226 | ||||||
International Lease Finance Corp., 6.7500%, 9/1/16 (144A) | 10,951,000 | 11,115,265 | ||||||
International Lease Finance Corp., 8.7500%, 3/15/17 | 4,365,000 | 4,598,091 | ||||||
54,742,631 | ||||||||
Financial – 0.4% | ||||||||
Jones Lang LaSalle, Inc., 4.4000%, 11/15/22 | 13,036,000 | 13,393,069 | ||||||
Kennedy-Wilson, Inc., 5.8750%, 4/1/24 | 16,616,000 | 16,242,140 | ||||||
LeasePlan Corp. NV, 2.5000%, 5/16/18 (144A) | 23,090,000 | 22,888,678 | ||||||
52,523,887 | ||||||||
Industrial – 0.1% | ||||||||
Cintas Corp. No 2, 2.8500%, 6/1/16 | 5,269,000 | 5,287,768 | ||||||
Cintas Corp. No 2, 4.3000%, 6/1/21 | 5,544,000 | 6,034,616 | ||||||
11,322,384 | ||||||||
Insurance – 0.5% | ||||||||
Berkshire Hathaway, Inc., 2.7500%, 3/15/23 | 10,539,000 | 10,748,157 | ||||||
Berkshire Hathaway, Inc., 3.1250%, 3/15/26 | 8,520,000 | 8,735,948 | ||||||
CNO Financial Group, Inc., 4.5000%, 5/30/20 | 3,089,000 | 3,150,780 | ||||||
CNO Financial Group, Inc., 5.2500%, 5/30/25 | 9,783,000 | 10,003,118 | ||||||
Primerica, Inc., 4.7500%, 7/15/22 | 19,604,000 | 21,166,949 | ||||||
Voya Financial, Inc., 5.6500%, 5/15/53‡ | 8,008,000 | 7,447,440 | ||||||
61,252,392 | ||||||||
Real Estate Investment Trusts (REITs) – 0.6% | ||||||||
Alexandria Real Estate Equities, Inc., 2.7500%, 1/15/20 | 9,544,000 | 9,526,506 | ||||||
Alexandria Real Estate Equities, Inc., 4.6000%, 4/1/22 | 16,053,000 | 17,301,345 | ||||||
Alexandria Real Estate Equities, Inc., 4.5000%, 7/30/29 | 8,730,000 | 8,782,886 | ||||||
Post Apartment Homes LP, 4.7500%, 10/15/17 | 7,503,000 | 7,759,257 | ||||||
Senior Housing Properties Trust, 6.7500%, 4/15/20 | 3,671,000 | 4,041,639 | ||||||
Senior Housing Properties Trust, 6.7500%, 12/15/21 | 4,054,000 | 4,471,748 | ||||||
SL Green Realty Corp., 5.0000%, 8/15/18 | 8,709,000 | 9,146,801 | ||||||
SL Green Realty Corp., 7.7500%, 3/15/20 | 17,197,000 | 20,134,316 | ||||||
81,164,498 | ||||||||
Technology – 1.9% | ||||||||
Autodesk, Inc., 3.6000%, 12/15/22 | 2,672,000 | 2,661,117 | ||||||
Cadence Design Systems, Inc., 4.3750%, 10/15/24 | 20,472,000 | 20,743,070 | ||||||
Fidelity National Information Services, Inc., 3.6250%, 10/15/20 | 6,056,000 | 6,259,027 | ||||||
Fidelity National Information Services, Inc., 5.0000%, 3/15/22 | 2,694,000 | 2,802,323 | ||||||
Fidelity National Information Services, Inc., 4.5000%, 10/15/22 | 7,926,000 | 8,452,334 | ||||||
Fidelity National Information Services, Inc., 5.0000%, 10/15/25 | 20,688,000 | 22,340,289 | ||||||
Seagate HDD Cayman, 4.7500%, 1/1/25 | 30,331,000 | 23,690,240 | ||||||
Seagate HDD Cayman, 4.8750%, 6/1/27 (144A) | 9,765,000 | 7,351,561 | ||||||
Seagate HDD Cayman, 5.7500%, 12/1/34 | 6,296,000 | 4,472,458 | ||||||
Total System Services, Inc., 3.8000%, 4/1/21 | 6,457,000 | 6,640,398 | ||||||
Total System Services, Inc., 4.8000%, 4/1/26 | 18,021,000 | 18,594,861 | ||||||
Trimble Navigation, Ltd., 4.7500%, 12/1/24 | 22,589,000 | 23,033,642 | ||||||
TSMC Global, Ltd., 1.6250%, 4/3/18 (144A) | 31,117,000 | 30,939,633 | ||||||
Verisk Analytics, Inc., 4.8750%, 1/15/19 | 7,426,000 | 7,831,244 | ||||||
Verisk Analytics, Inc., 5.8000%, 5/1/21 | 27,503,000 | 30,811,006 | ||||||
Verisk Analytics, Inc., 4.1250%, 9/12/22 | 7,188,000 | 7,453,058 | ||||||
Verisk Analytics, Inc., 4.0000%, 6/15/25 | 12,012,000 | 12,100,829 | ||||||
Verisk Analytics, Inc., 5.5000%, 6/15/45 | 12,560,000 | 12,274,273 | ||||||
248,451,363 | ||||||||
Transportation – 0.3% | ||||||||
Penske Truck Leasing Co. LP / PTL Finance Corp., 3.3750%, 3/15/18 (144A) | 12,164,000 | 12,415,466 | ||||||
Penske Truck Leasing Co. LP / PTL Finance Corp., 2.5000%, 6/15/19 (144A) | 7,969,000 | 7,923,266 | ||||||
Penske Truck Leasing Co. LP / PTL Finance Corp., 4.8750%, 7/11/22 (144A) | 1,213,000 | 1,295,212 | ||||||
Penske Truck Leasing Co. LP / PTL Finance Corp., 4.2500%, 1/17/23 (144A) | 6,755,000 | 6,844,855 | ||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
14 | MARCH 31, 2016 |
Janus Balanced Fund
Schedule of Investments (unaudited)
March 31, 2016
Shares or | Value | ||||||||
Corporate Bonds – (continued) | |||||||||
Transportation – (continued) | |||||||||
Southwest Airlines Co., 5.1250%, 3/1/17 | $7,880,000 | $8,145,123 | |||||||
36,623,922 | |||||||||
Total Corporate Bonds (cost $1,878,225,583) | 1,905,853,147 | ||||||||
Mortgage-Backed Securities – 9.3% | |||||||||
Fannie Mae Pool: | |||||||||
5.5000%, 1/1/25 | 1,399,331 | 1,509,546 | |||||||
4.0000%, 6/1/29 | 2,407,928 | 2,584,331 | |||||||
4.0000%, 7/1/29 | 5,327,160 | 5,706,273 | |||||||
4.0000%, 9/1/29 | 4,722,673 | 5,043,696 | |||||||
5.0000%, 9/1/29 | 3,741,664 | 4,135,600 | |||||||
3.5000%, 10/1/29 | 658,441 | 696,017 | |||||||
5.0000%, 1/1/30 | 1,553,087 | 1,716,601 | |||||||
5.5000%, 1/1/33 | 913,804 | 1,034,090 | |||||||
4.0000%, 4/1/34 | 5,329,410 | 5,795,011 | |||||||
6.0000%, 10/1/35 | 4,262,346 | 4,895,435 | |||||||
6.0000%, 12/1/35 | 4,870,418 | 5,600,271 | |||||||
6.0000%, 2/1/37 | 802,785 | 933,705 | |||||||
6.0000%, 9/1/37 | 3,312,727 | 3,655,510 | |||||||
6.0000%, 10/1/38 | 3,519,266 | 4,020,566 | |||||||
7.0000%, 2/1/39 | 1,215,933 | 1,409,858 | |||||||
5.5000%, 12/1/39 | 6,712,222 | 7,570,231 | |||||||
5.5000%, 3/1/40 | 5,430,066 | 6,232,279 | |||||||
5.5000%, 4/1/40 | 14,994,100 | 16,911,507 | |||||||
4.5000%, 10/1/40 | 1,339,439 | 1,456,773 | |||||||
5.0000%, 10/1/40 | 2,262,093 | 2,540,946 | |||||||
5.5000%, 2/1/41 | 2,975,561 | 3,414,135 | |||||||
5.0000%, 5/1/41 | 6,483,729 | 7,192,849 | |||||||
5.5000%, 5/1/41 | 4,638,504 | 5,223,546 | |||||||
5.5000%, 6/1/41 | 7,613,048 | 8,568,369 | |||||||
5.5000%, 6/1/41 | 6,546,963 | 7,480,652 | |||||||
5.5000%, 7/1/41 | 803,207 | 905,997 | |||||||
4.5000%, 8/1/41 | 4,939,061 | 5,386,423 | |||||||
5.5000%, 12/1/41 | 6,961,184 | 7,839,198 | |||||||
4.5000%, 1/1/42 | 1,454,560 | 1,586,810 | |||||||
5.5000%, 2/1/42 | 29,131,922 | 32,851,678 | |||||||
4.0000%, 6/1/42 | 8,867,174 | 9,538,825 | |||||||
4.5000%, 6/1/42 | 1,954,673 | 2,158,281 | |||||||
3.5000%, 7/1/42 | 5,861,700 | 6,208,790 | |||||||
4.0000%, 7/1/42 | 1,753,945 | 1,886,734 | |||||||
4.0000%, 8/1/42 | 4,103,843 | 4,415,582 | |||||||
4.0000%, 9/1/42 | 8,103,569 | 8,718,335 | |||||||
4.0000%, 9/1/42 | 5,320,376 | 5,724,480 | |||||||
4.0000%, 11/1/42 | 6,170,480 | 6,639,280 | |||||||
4.0000%, 12/1/42 | 4,726,685 | 5,154,294 | |||||||
3.5000%, 1/1/43 | 10,891,234 | 11,443,300 | |||||||
3.5000%, 2/1/43 | 23,641,421 | 24,837,056 | |||||||
3.5000%, 2/1/43 | 21,932,357 | 23,045,376 | |||||||
4.5000%, 2/1/43 | 24,458,185 | 26,711,857 | |||||||
4.5000%, 3/1/43 | 8,646,816 | 9,551,396 | |||||||
4.0000%, 5/1/43 | 13,514,650 | 14,542,370 | |||||||
4.0000%, 7/1/43 | 19,326,077 | 20,797,185 | |||||||
4.0000%, 8/1/43 | 15,522,280 | 16,702,517 | |||||||
4.0000%, 9/1/43 | 3,903,231 | 4,202,768 | |||||||
3.5000%, 1/1/44 | 18,611,536 | 19,819,196 | |||||||
3.5000%, 1/1/44 | 8,339,730 | 8,874,423 | |||||||
4.0000%, 2/1/44 | 10,107,898 | 10,878,933 | |||||||
3.5000%, 4/1/44 | 9,692,461 | 10,285,480 | |||||||
3.5000%, 5/1/44 | 28,189,037 | 29,996,297 | |||||||
4.5000%, 5/1/44 | 36,703,098 | 40,738,788 | |||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 15 |
Janus Balanced Fund
Schedule of Investments (unaudited)
March 31, 2016
Shares or | Value | ||||||||
Mortgage-Backed Securities – (continued) | |||||||||
Fannie Mae Pool – (continued) | |||||||||
5.5000%, 5/1/44 | $6,329,273 | $7,129,885 | |||||||
4.0000%, 6/1/44 | 12,795,842 | 13,770,750 | |||||||
4.0000%, 7/1/44 | 24,811,296 | 26,996,510 | |||||||
5.0000%, 7/1/44 | 14,644,252 | 16,538,752 | |||||||
4.0000%, 8/1/44 | 15,690,522 | 17,072,507 | |||||||
4.0000%, 8/1/44 | 5,959,287 | 6,484,142 | |||||||
4.5000%, 8/1/44 | 16,193,489 | 17,967,458 | |||||||
4.5000%, 10/1/44 | 12,347,466 | 13,768,169 | |||||||
4.5000%, 10/1/44 | 7,075,799 | 7,868,336 | |||||||
3.5000%, 2/1/45 | 19,284,206 | 20,261,528 | |||||||
4.5000%, 3/1/45 | 12,783,617 | 14,220,819 | |||||||
4.5000%, 5/1/45 | 10,161,976 | 11,335,656 | |||||||
4.5000%, 6/1/45 | 6,133,132 | 6,802,026 | |||||||
4.0000%, 9/1/45 | 36,391,876 | 39,484,214 | |||||||
4.5000%, 10/1/45 | 23,723,351 | 26,486,679 | |||||||
4.5000%, 10/1/45 | 12,858,132 | 14,208,764 | |||||||
3.5000%, 12/1/45 | 5,951,702 | 6,311,049 | |||||||
3.5000%, 1/1/46 | 15,570,336 | 16,490,668 | |||||||
3.5000%, 1/1/46 | 13,184,505 | 13,964,642 | |||||||
4.5000%, 2/1/46 | 18,363,265 | 20,583,111 | |||||||
4.5000%, 2/1/46 | 7,683,876 | 8,570,471 | |||||||
813,085,582 | |||||||||
Freddie Mac Gold Pool: | |||||||||
5.0000%, 1/1/19 | 739,424 | 763,518 | |||||||
5.5000%, 8/1/19 | 634,376 | 655,591 | |||||||
5.0000%, 6/1/20 | 1,303,209 | 1,377,311 | |||||||
5.5000%, 12/1/28 | 3,330,479 | 3,695,205 | |||||||
3.5000%, 7/1/29 | 5,895,594 | 6,233,864 | |||||||
5.5000%, 10/1/36 | 2,797,817 | 3,164,384 | |||||||
6.0000%, 4/1/40 | 13,944,526 | 16,314,243 | |||||||
4.5000%, 1/1/41 | 3,651,923 | 3,992,771 | |||||||
5.5000%, 5/1/41 | 6,105,585 | 6,786,929 | |||||||
5.5000%, 8/1/41 | 13,415,049 | 15,455,011 | |||||||
5.5000%, 8/1/41 | 9,184,181 | 10,492,590 | |||||||
5.5000%, 9/1/41 | 2,149,271 | 2,386,465 | |||||||
5.0000%, 3/1/42 | 6,505,158 | 7,302,142 | |||||||
3.5000%, 2/1/44 | 7,547,766 | 7,934,762 | |||||||
4.5000%, 5/1/44 | 7,510,192 | 8,285,969 | |||||||
4.0000%, 8/1/44 | 5,046,395 | 5,480,269 | |||||||
4.5000%, 9/1/44 | 23,746,783 | 26,449,735 | |||||||
4.5000%, 6/1/45 | 10,372,855 | 11,558,020 | |||||||
4.5000%, 2/1/46 | 6,502,878 | 7,253,268 | |||||||
145,582,047 | |||||||||
Ginnie Mae I Pool: | |||||||||
5.1000%, 1/15/32 | 5,345,654 | 6,096,840 | |||||||
7.5000%, 8/15/33 | 5,676,590 | 6,768,491 | |||||||
4.9000%, 10/15/34 | 5,845,453 | 6,488,080 | |||||||
5.5000%, 9/15/35 | 658,518 | 762,247 | |||||||
5.5000%, 3/15/36 | 2,919,129 | 3,320,841 | |||||||
5.5000%, 2/15/39 | 4,218,196 | 4,834,131 | |||||||
5.5000%, 8/15/39 | 12,408,177 | 14,209,806 | |||||||
5.5000%, 8/15/39 | 4,001,205 | 4,557,456 | |||||||
5.0000%, 10/15/39 | 2,724,373 | 3,041,572 | |||||||
5.5000%, 10/15/39 | 4,655,212 | 5,394,866 | |||||||
5.0000%, 11/15/39 | 4,343,626 | 4,820,570 | |||||||
5.0000%, 1/15/40 | 1,448,886 | 1,606,266 | |||||||
5.0000%, 5/15/40 | 1,577,539 | 1,770,852 | |||||||
5.0000%, 5/15/40 | 567,101 | 636,449 | |||||||
5.0000%, 7/15/40 | 4,714,277 | 5,228,089 | |||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
16 | MARCH 31, 2016 |
Janus Balanced Fund
Schedule of Investments (unaudited)
March 31, 2016
Shares or | Value | ||||||||
Mortgage-Backed Securities – (continued) | |||||||||
Ginnie Mae I Pool – (continued) | |||||||||
5.0000%, 7/15/40 | $1,290,945 | $1,432,157 | |||||||
5.0000%, 2/15/41 | 4,784,777 | 5,312,322 | |||||||
5.0000%, 4/15/41 | 1,844,750 | 2,043,703 | |||||||
4.5000%, 5/15/41 | 8,697,971 | 9,646,783 | |||||||
5.0000%, 5/15/41 | 1,933,472 | 2,171,430 | |||||||
4.5000%, 7/15/41 | 4,119,678 | 4,499,493 | |||||||
4.5000%, 7/15/41 | 1,293,397 | 1,422,744 | |||||||
4.5000%, 8/15/41 | 11,486,734 | 12,763,625 | |||||||
5.0000%, 9/15/41 | 1,195,162 | 1,327,996 | |||||||
5.0000%, 11/15/43 | 8,511,779 | 9,485,451 | |||||||
4.5000%, 5/15/44 | 5,429,531 | 5,990,216 | |||||||
5.0000%, 6/15/44 | 8,402,081 | 9,479,666 | |||||||
5.0000%, 6/15/44 | 3,153,517 | 3,554,265 | |||||||
5.0000%, 7/15/44 | 3,438,386 | 3,872,700 | |||||||
4.0000%, 1/15/45 | 27,201,592 | 29,263,849 | |||||||
4.0000%, 4/15/45 | 4,072,845 | 4,426,984 | |||||||
176,229,940 | |||||||||
Ginnie Mae II Pool: | |||||||||
6.0000%, 11/20/34 | 2,664,155 | 3,114,887 | |||||||
5.5000%, 11/20/37 | 3,284,914 | 3,640,535 | |||||||
6.0000%, 1/20/39 | 1,118,242 | 1,264,774 | |||||||
7.0000%, 5/20/39 | 622,933 | 755,034 | |||||||
4.5000%, 10/20/41 | 7,736,694 | 8,315,829 | |||||||
6.0000%, 10/20/41 | 447,824 | 514,181 | |||||||
6.0000%, 12/20/41 | 1,289,161 | 1,474,645 | |||||||
5.5000%, 1/20/42 | 2,869,210 | 3,203,255 | |||||||
6.0000%, 1/20/42 | 1,416,986 | 1,625,288 | |||||||
6.0000%, 2/20/42 | 1,125,037 | 1,285,841 | |||||||
6.0000%, 3/20/42 | 1,002,828 | 1,150,127 | |||||||
6.0000%, 4/20/42 | 3,829,462 | 4,393,900 | |||||||
3.5000%, 5/20/42 | 2,809,606 | 2,991,156 | |||||||
5.5000%, 5/20/42 | 4,043,722 | 4,509,482 | |||||||
6.0000%, 5/20/42 | 1,612,022 | 1,827,567 | |||||||
5.5000%, 7/20/42 | 5,287,259 | 5,820,590 | |||||||
6.0000%, 7/20/42 | 1,107,762 | 1,270,520 | |||||||
6.0000%, 8/20/42 | 1,239,178 | 1,421,362 | |||||||
6.0000%, 9/20/42 | 2,705,441 | 3,103,043 | |||||||
6.0000%, 11/20/42 | 1,072,417 | 1,226,038 | |||||||
6.0000%, 2/20/43 | 1,470,711 | 1,685,851 | |||||||
3.5000%, 9/20/44 | 7,779,342 | 8,283,451 | |||||||
5.0000%, 12/20/44 | 4,823,489 | 5,407,944 | |||||||
5.0000%, 9/20/45 | 2,318,721 | 2,550,470 | |||||||
4.0000%, 10/20/45 | 9,732,333 | 10,558,718 | |||||||
4.0000%, 11/20/45 | 22,811,502 | 24,808,469 | |||||||
106,202,957 | |||||||||
Total Mortgage-Backed Securities (cost $1,228,210,299) | 1,241,100,526 | ||||||||
U.S. Treasury Notes/Bonds – 13.0% | |||||||||
0.7500%, 2/28/18 | 108,318,000 | 108,343,346 | |||||||
1.0000%, 9/15/18 | 11,754,000 | 11,810,020 | |||||||
1.3750%, 9/30/18† | 142,355,000 | 144,368,042 | |||||||
1.2500%, 10/31/18 | 55,514,000 | 56,116,827 | |||||||
1.1250%, 1/15/19 | 6,066,000 | 6,113,388 | |||||||
0.7500%, 2/15/19 | 34,717,000 | 34,613,925 | |||||||
1.6250%, 7/31/19 | 47,899,000 | 48,946,791 | |||||||
1.7500%, 9/30/19 | 43,617,000 | 44,750,039 | |||||||
1.5000%, 10/31/19 | 63,685,000 | 64,782,102 | |||||||
1.6250%, 12/31/19 | 67,015,000 | 68,433,842 | |||||||
1.7500%, 12/31/20 | 44,836,000 | 45,934,123 | |||||||
1.3750%, 1/31/21 | 56,241,000 | 56,645,260 | |||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 17 |
Janus Balanced Fund
Schedule of Investments (unaudited)
March 31, 2016
Shares or | Value | ||||||||
U.S. Treasury Notes/Bonds – (continued) | |||||||||
1.1250%, 2/28/21 | $159,842,000 | $159,186,328 | |||||||
2.1250%, 9/30/21 | 35,585,000 | 37,043,167 | |||||||
2.1250%, 12/31/21 | 49,596,000 | 51,581,774 | |||||||
1.7500%, 5/15/23 | 14,743,000 | 14,945,716 | |||||||
2.5000%, 8/15/23 | 54,330,000 | 57,897,525 | |||||||
2.7500%, 11/15/23 | 75,698,000 | 81,990,396 | |||||||
2.5000%, 5/15/24 | 39,614,000 | 42,127,033 | |||||||
2.0000%, 2/15/25 | 6,873,000 | 7,019,855 | |||||||
2.0000%, 8/15/25 | 58,814,000 | 59,944,346 | |||||||
2.2500%, 11/15/25 | 203,019,000 | 211,285,680 | |||||||
1.6250%, 2/15/26 | 40,584,000 | 39,994,274 | |||||||
3.7500%, 11/15/43 | 39,995,000 | 49,675,030 | |||||||
3.6250%, 2/15/44 | 10,830,000 | 13,138,566 | |||||||
3.3750%, 5/15/44 | 9,428,000 | 10,929,484 | |||||||
2.5000%, 2/15/45 | 7,695,000 | 7,503,225 | |||||||
3.0000%, 5/15/45 | 11,528,000 | 12,432,683 | |||||||
2.8750%, 8/15/45 | 19,966,000 | 21,001,736 | |||||||
3.0000%, 11/15/45 | 120,909,000 | 130,529,729 | |||||||
2.5000%, 2/15/46 | 41,538,000 | 40,501,170 | |||||||
Total U.S. Treasury Notes/Bonds (cost $1,680,468,258) | 1,739,585,422 | ||||||||
Common Stocks – 58.9% | |||||||||
Aerospace & Defense – 4.6% | |||||||||
Boeing Co. | 2,348,843 | 298,162,130 | |||||||
Honeywell International, Inc. | 1,693,372 | 189,742,333 | |||||||
Northrop Grumman Corp. | 626,976 | 124,078,550 | |||||||
611,983,013 | |||||||||
Automobiles – 1.1% | |||||||||
General Motors Co. | 4,448,824 | 139,826,538 | |||||||
Beverages – 0.3% | |||||||||
Diageo PLC | 1,505,649 | 40,680,068 | |||||||
Biotechnology – 5.8% | |||||||||
AbbVie, Inc. | 4,866,036 | 277,947,976 | |||||||
Amgen, Inc. | 2,567,987 | 385,018,291 | |||||||
Celgene Corp.* | 937,107 | 93,795,040 | |||||||
Regeneron Pharmaceuticals, Inc.* | 36,439 | 13,134,073 | |||||||
769,895,380 | |||||||||
Capital Markets – 2.3% | |||||||||
Blackstone Group LP | 7,642,182 | 214,363,205 | |||||||
TD Ameritrade Holding Corp. | 3,104,198 | 97,875,363 | |||||||
312,238,568 | |||||||||
Chemicals – 3.1% | |||||||||
EI du Pont de Nemours & Co. | 2,463,322 | 155,977,549 | |||||||
LyondellBasell Industries NV - Class A | 3,030,882 | 259,382,882 | |||||||
415,360,431 | |||||||||
Commercial Banks – 1.6% | |||||||||
JPMorgan Chase & Co. | 1,320,269 | 78,186,330 | |||||||
US Bancorp | 3,271,893 | 132,806,137 | |||||||
210,992,467 | |||||||||
Consumer Finance – 1.7% | |||||||||
American Express Co. | 1,642,221 | 100,832,369 | |||||||
Synchrony Financial* | 4,569,315 | 130,956,568 | |||||||
231,788,937 | |||||||||
Diversified Financial Services – 1.2% | |||||||||
CME Group, Inc. | 1,603,736 | 154,038,843 | |||||||
Food & Staples Retailing – 0.5% | |||||||||
Costco Wholesale Corp. | 426,056 | 67,137,904 | |||||||
Food Products – 0.8% | |||||||||
Hershey Co. | 1,221,614 | 112,498,433 | |||||||
Health Care Providers & Services – 1.0% | |||||||||
Aetna, Inc. | 1,218,518 | 136,900,497 | |||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
18 | MARCH 31, 2016 |
Janus Balanced Fund
Schedule of Investments (unaudited)
March 31, 2016
Shares or | Value | ||||||||
Common Stocks – (continued) | |||||||||
Hotels, Restaurants & Leisure – 2.2% | |||||||||
Norwegian Cruise Line Holdings, Ltd.* | 2,477,074 | $136,957,421 | |||||||
Six Flags Entertainment Corp. | 1,044,116 | 57,937,997 | |||||||
Starbucks Corp. | 1,740,853 | 103,928,924 | |||||||
298,824,342 | |||||||||
Industrial Conglomerates – 1.2% | |||||||||
General Electric Co. | 5,063,291 | 160,962,021 | |||||||
Information Technology Services – 3.4% | |||||||||
Automatic Data Processing, Inc. | 735,074 | 65,943,489 | |||||||
MasterCard, Inc. - Class A | 4,023,153 | 380,187,959 | |||||||
446,131,448 | |||||||||
Insurance – 0.7% | |||||||||
Prudential PLC | 5,254,937 | 98,174,460 | |||||||
Internet & Catalog Retail – 1.8% | |||||||||
Ctrip.com International, Ltd. (ADR)* | 979,566 | 43,355,591 | |||||||
Priceline Group, Inc.* | 153,628 | 198,020,347 | |||||||
241,375,938 | |||||||||
Internet Software & Services – 3.2% | |||||||||
Alphabet, Inc. - Class C | 422,461 | 314,712,322 | |||||||
Yahoo!, Inc.* | 3,022,643 | 111,263,489 | |||||||
425,975,811 | |||||||||
Leisure Products – 0.6% | |||||||||
Mattel, Inc. | 2,510,222 | 84,393,664 | |||||||
Media – 1.3% | |||||||||
Comcast Corp. - Class A | 1,306,655 | 79,810,487 | |||||||
Time Warner, Inc. | 1,190,891 | 86,399,142 | |||||||
166,209,629 | |||||||||
Multiline Retail – 1.9% | |||||||||
Dollar Tree, Inc.* | 3,096,800 | 255,362,128 | |||||||
Pharmaceuticals – 5.2% | |||||||||
Allergan PLC* | 1,026,723 | 275,192,566 | |||||||
Bristol-Myers Squibb Co. | 4,372,964 | 279,344,940 | |||||||
Eli Lilly & Co. | 1,960,972 | 141,209,594 | |||||||
695,747,100 | |||||||||
Real Estate Investment Trusts (REITs) – 0.8% | |||||||||
Colony Capital, Inc.- Class A | 3,718,838 | 62,364,913 | |||||||
Colony Starwood Homesß | 598,678 | 13,335,552 | |||||||
Outfront Media, Inc. | 1,453,631 | 30,671,614 | |||||||
106,372,079 | |||||||||
Real Estate Management & Development – 1.1% | |||||||||
CBRE Group, Inc. - Class A* | 3,766,912 | 108,562,404 | |||||||
Colony American Homes Holdings III LP£,§ | 6,162,871 | 32,401,294 | |||||||
140,963,698 | |||||||||
Software – 4.1% | |||||||||
Adobe Systems, Inc.* | 1,714,842 | 160,852,180 | |||||||
Microsoft Corp. | 7,004,488 | 386,857,872 | |||||||
547,710,052 | |||||||||
Specialty Retail – 2.0% | |||||||||
Home Depot, Inc. | 2,039,250 | 272,097,128 | |||||||
Technology Hardware, Storage & Peripherals – 1.9% | |||||||||
Apple, Inc. | 2,294,201 | 250,044,967 | |||||||
Textiles, Apparel & Luxury Goods – 2.3% | |||||||||
NIKE, Inc. - Class B | 5,026,002 | 308,948,343 | |||||||
Tobacco – 1.2% | |||||||||
Altria Group, Inc. | 2,617,147 | 163,990,431 | |||||||
Total Common Stocks (cost $6,335,087,239) | 7,866,624,318 | ||||||||
Preferred Stocks – 0.6% | |||||||||
Capital Markets – 0.2% | |||||||||
Morgan Stanley, 6.8750% | 443,275 | 12,030,484 | |||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 19 |
Janus Balanced Fund
Schedule of Investments (unaudited)
March 31, 2016
Shares or | Value | ||||||||
Preferred Stocks – (continued) | |||||||||
Capital Markets – (continued) | |||||||||
Morgan Stanley, 7.1250% | 436,310 | $12,413,020 | |||||||
24,443,504 | |||||||||
Commercial Banks – 0.3% | |||||||||
Citigroup Capital XIII, 6.9881% | 802,075 | 21,086,552 | |||||||
Wells Fargo & Co., 6.6250% | 360,200 | 10,564,666 | |||||||
31,651,218 | |||||||||
Consumer Finance – 0.1% | |||||||||
Discover Financial Services, 6.5000% | 546,525 | 14,564,891 | |||||||
Industrial Conglomerates – 0% | |||||||||
General Electric Co., 4.7000% | 50,029 | 1,308,258 | |||||||
Real Estate Investment Trusts (REITs) – 0% | |||||||||
Morgan Stanley Capital Trust III, 6.2500% | 72,550 | 1,862,359 | |||||||
Morgan Stanley Capital Trust IV, 6.2500% | 15,495 | 396,362 | |||||||
Morgan Stanley Capital Trust V, 5.7500% | 6,270 | 159,446 | |||||||
Morgan Stanley Capital Trust VIII, 6.4500% | 27,878 | 713,956 | |||||||
3,132,123 | |||||||||
Total Preferred Stocks (cost $70,077,954) | 75,099,994 | ||||||||
Investment Companies – 0.5% | |||||||||
Money Markets – 0.5% | |||||||||
Janus Cash Liquidity Fund LLC, 0.3874%ºº,£ (cost $68,678,591) | 68,678,591 | 68,678,591 | |||||||
Total Investments (total cost $11,680,514,355) – 99.7% | 13,309,574,351 | ||||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.3% | 33,510,653 | ||||||||
Net Assets – 100% | $13,343,085,004 | ||||||||
Summary of Investments by Country - (Long Positions) (unaudited) | |||||
% of Investment | |||||
Country | Value | Securities | |||
United States | $12,862,256,706 | 96.7 | % | ||
United Kingdom | 228,254,193 | 1.7 | |||
China | 43,355,591 | 0.3 | |||
Belgium | 41,754,700 | 0.3 | |||
Germany | 39,186,582 | 0.3 | |||
Taiwan | 30,939,633 | 0.2 | |||
Netherlands | 29,990,463 | 0.2 | |||
Canada | 20,193,898 | 0.2 | |||
Singapore | 13,642,585 | 0.1 | |||
Total | $13,309,574,351 | 100.0 | % |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
20 | MARCH 31, 2016 |
Janus Balanced Fund
Schedule of Investments (unaudited)
March 31, 2016
Schedule of Foreign Currency Contracts, Open | |||||||||||||||||
Counterparty/ Currency | Settlement Date | Currency Units Sold | Currency Value | Unrealized Appreciation/ (Depreciation) | |||||||||||||
Bank of America: | |||||||||||||||||
British Pound | 4/14/16 | 6,550,000 | $ | 9,406,064 | $ | (61,048) | |||||||||||
Credit Suisse International: | |||||||||||||||||
British Pound | 5/12/16 | 8,037,000 | 11,542,374 | 21,101 | |||||||||||||
HSBC Securities (USA), Inc.: | |||||||||||||||||
British Pound | 4/28/16 | 11,725,000 | 16,838,272 | (290,991) | |||||||||||||
JPMorgan Chase & Co.: | |||||||||||||||||
British Pound | 4/14/16 | 1,500,000 | 2,154,060 | 18,261 | |||||||||||||
British Pound | 4/14/16 | 12,320,000 | 17,692,016 | (98,378) | |||||||||||||
19,846,076 | (80,117) | ||||||||||||||||
RBC Capital Markets Corp.: | |||||||||||||||||
British Pound | 5/12/16 | 7,621,000 | 10,944,933 | 18,485 | |||||||||||||
Total | $ | 68,577,719 | $ | (392,570) | |||||||||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 21 |
Janus Balanced Fund
Notes to Schedule of Investments and Other Information (unaudited)
Balanced Index | An internally-calculated, hypothetical combination of total returns from the S&P 500® Index (55%) and the Barclays U.S. Aggregate Bond Index (45%). |
Barclays U.S. Aggregate Bond Index | A broad-based measure of the investment grade, US dollar-denominated, fixed-rate taxable bond market. |
S&P 500® Index | Measures broad U.S. equity performance.. |
ADR | American Depositary Receipt |
LLC | Limited Liability Company |
LP | Limited Partnership |
PLC | Public Limited Company |
ULC | Unlimited Liability Company |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. These securities have been determined to be liquid under guidelines established by the Board of Trustees. The total value of 144A securities as of the period ended March 31, 2016 is $632,107,948, which represents 4.7% of net assets. |
* | Non-income producing security. |
† | A portion of this security has been segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales, swap agreements, and/or securities with extended settlement dates, the value of which, as of March 31, 2016, is $65,919,165. |
‡ | The interest rate on floating rate notes is based on an index or market interest rates and is subject to change. Rate in the security description is as of March 31, 2016. |
ß | Security is illiquid. |
ºº | Rate shown is the 7-day yield as of March 31, 2016. |
µ | This variable rate security is a perpetual bond. Perpetual bonds have no contractual maturity date, are not redeemable, and pay an indefinite stream of interest. The coupon rate shown represents the current interest rate. |
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. The following securities were considered affiliated companies for all or some portion of the period ended March 31, 2016. Unless otherwise indicated, all information in the table is for the period ended March 31, 2016. |
Share | Share | ||||||||||||||||||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||||||||||||||||||
at 9/30/15 | Purchases | Sales | at 3/31/16 | Gain/(Loss) | Income | at 3/31/16 | |||||||||||||||||||||||||||||||
Colony American Homes Holdings III LP | |||||||||||||||||||||||||||||||||||||
6,162,871 | — | — | 6,162,871 | $— | $592,594 | $32,401,294 | |||||||||||||||||||||||||||||||
Janus Cash Liquidity Fund LLC | |||||||||||||||||||||||||||||||||||||
101,280,473 | 2,277,716,118 | (2,310,318,000) | 68,678,591 | — | 248,807 | 68,678,591 | |||||||||||||||||||||||||||||||
Total | $— | $841,401 | $101,079,885 | ||||||||||||||||||||||||||||||||||
22 | MARCH 31, 2016 |
Janus Balanced Fund
Notes to Schedule of Investments and Other Information (unaudited)
§ | Schedule of Restricted and Illiquid Securities (as of March 31, 2016) | |||||||||
Value as a | ||||||||||
Acquisition | % of Net | |||||||||
Date | Cost | Value | Assets | |||||||
Colony American Homes Holdings III LP | 1/30/13 | $ | 42,613,147 | $ | 32,401,294 | 0.2 | % | |||
FREMF 2010 K-SCT Mortgage Trust, 2.0000%, 1/25/20 | 4/29/13 | 10,848,897 | 10,966,638 | 0.1 | ||||||
Total | $ | 53,462,044 | $ | 43,367,932 | 0.3 | % | ||||
The Fund has registration rights for certain restricted securities held as of March 31, 2016. The issuer incurs all registration costs. | ||||||||||
The following is a summary of the inputs that were used to value the Fund's investments in securities and other financial instruments as of March 31, 2016. See Notes to Financial Statements for more information. | |||
Valuation Inputs Summary | |||
| Level
1 - | Level 2 - | Level 3 - |
Assets | |||
Investments in Securities: | |||
Asset-Backed/Commercial Mortgage-Backed Securities | $ - | $ 370,054,234 | $ - |
Bank Loans and Mezzanine Loans | - | 42,578,119 | - |
Corporate Bonds | - | 1,905,853,147 | - |
Mortgage-Backed Securities | - | 1,241,100,526 | - |
U.S. Treasury Notes/Bonds | - | 1,739,585,422 | - |
Common Stocks | |||
Real Estate Investment Trusts (REITs) | 93,036,527 | 13,335,552 | - |
Real Estate Management & Development | 108,562,404 | - | 32,401,294 |
All Other | 7,619,288,541 | - | - |
Preferred Stocks | - | 75,099,994 | - |
Investment Companies | - | 68,678,591 | - |
Total Investments in Securities | $ 7,820,887,472 | $ 5,456,285,585 | $ 32,401,294 |
Other Financial Instruments(a): | |||
Forward Currency Contracts | $ - | $ 57,847 | $ - |
Total Assets | $ 7,820,887,472 | $ 5,456,343,432 | $ 32,401,294 |
Liabilities | |||
Other Financial Instruments(a): | |||
Forward Currency Contracts | $ - | $ 450,417 | $ - |
(a) Other financial instruments include forward currency, futures, written options, and swap contracts. Forward currency contracts are reported at their unrealized appreciation/(depreciation) at measurement date, which represents the change in the contract's value from trade date. Futures are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date. Options and swap contracts are reported at their market value at measurement date. | |||
Janus Investment Fund | 23 |
Janus Balanced Fund
Statement of Assets and Liabilities (unaudited)
March 31, 2016
See footnotes at the end of the Statement. |
|
|
|
|
|
|
|
Assets: | ||||||
Investments, at cost | $ | 11,680,514,355 | ||||
Unaffiliated investments, at value | 13,208,494,466 | |||||
Affiliated investments, at value | 101,079,885 | |||||
Cash | 1,299,616 | |||||
Forward currency contracts | 57,847 | |||||
Closed foreign currency contracts | 34,245 | |||||
Non-interested Trustees' deferred compensation | 255,839 | |||||
Receivables: | ||||||
Investments sold | 226,204,374 | |||||
Interest | 35,928,034 | |||||
Fund shares sold | 32,860,407 | |||||
Dividends | 12,020,832 | |||||
Foreign tax reclaims | 318,901 | |||||
Dividends from affiliates | 36,619 | |||||
Other assets | 151,950 | |||||
Total Assets |
|
| 13,618,743,015 |
| ||
Liabilities: | ||||||
Forward currency contracts | 450,417 | |||||
Closed foreign currency contracts | 400,199 | |||||
Payables: | — | |||||
Investments purchased | 225,684,511 | |||||
Fund shares repurchased | 35,028,829 | |||||
Advisory fees | 6,128,846 | |||||
Dividends | 3,480,614 | |||||
Transfer agent fees and expenses | 1,874,336 | |||||
12b-1 Distribution and shareholder servicing fees | 1,679,856 | |||||
Non-interested Trustees' deferred compensation fees | 255,839 | |||||
Fund administration fees | 105,862 | |||||
Non-interested Trustees' fees and expenses | 83,083 | |||||
Professional fees | 35,423 | |||||
Custodian fees | 349 | |||||
Accrued expenses and other payables | 449,847 | |||||
Total Liabilities |
|
| 275,658,011 |
| ||
Net Assets |
| $ | 13,343,085,004 |
| ||
See Notes to Financial Statements. | |
24 | MARCH 31, 2016 |
Janus Balanced Fund
Statement of Assets and Liabilities (unaudited)
March 31, 2016
|
|
|
|
|
|
|
Net Assets Consist of: | ||||||
Capital (par value and paid-in surplus) | $ | 11,700,171,474 | ||||
Undistributed net investment income/(loss) | 21,105,973 | |||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | (6,966,368) | |||||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 1,628,773,925 | |||||
Total Net Assets |
| $ | 13,343,085,004 |
| ||
Net Assets - Class A Shares | $ | 1,065,608,972 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 37,374,836 | |||||
Net Asset Value Per Share(1) |
| $ | 28.51 |
| ||
Maximum Offering Price Per Share(2) |
| $ | 30.25 |
| ||
Net Assets - Class C Shares | $ | 1,435,594,124 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 50,691,476 | |||||
Net Asset Value Per Share(1) |
| $ | 28.32 |
| ||
Net Assets - Class D Shares | $ | 1,421,278,583 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 49,754,072 | |||||
Net Asset Value Per Share |
| $ | 28.57 |
| ||
Net Assets - Class I Shares | $ | 1,699,877,207 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 59,494,245 | |||||
Net Asset Value Per Share |
| $ | 28.57 |
| ||
Net Assets - Class N Shares | $ | 1,823,452,410 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 63,887,241 | |||||
Net Asset Value Per Share |
| $ | 28.54 |
| ||
Net Assets - Class R Shares | $ | 287,471,457 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 10,122,226 | |||||
Net Asset Value Per Share |
| $ | 28.40 |
| ||
Net Assets - Class S Shares | $ | 702,185,962 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 24,629,752 | |||||
Net Asset Value Per Share |
| $ | 28.51 |
| ||
Net Assets - Class T Shares | $ | 4,907,616,289 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 171,971,891 | |||||
Net Asset Value Per Share |
| $ | 28.54 |
| ||
(1) Redemption price per share may be reduced for any applicable contingent deferred sales charge. (2) Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements. | |
Janus Investment Fund | 25 |
Janus Balanced Fund
Statement of Operations (unaudited)
For the period ended March 31, 2016
|
|
|
|
|
|
Investment Income: | |||||
| Dividends | $ | 91,396,143 | ||
Interest | 81,397,952 | ||||
Dividends from affiliates | 841,401 | ||||
Other income | 266,855 | ||||
Total Investment Income |
| 173,902,351 |
| ||
Expenses: | |||||
Advisory fees | 35,952,336 | ||||
12b-1Distribution and shareholder servicing fees: | |||||
Class A Shares | 1,277,150 | ||||
Class C Shares | 6,738,140 | ||||
Class R Shares | 715,583 | ||||
Class S Shares | 908,243 | ||||
Transfer agent administrative fees and expenses: | |||||
Class D Shares | 846,637 | ||||
Class R Shares | 357,792 | ||||
Class S Shares | 908,243 | ||||
Class T Shares | 6,111,583 | ||||
Transfer agent networking and omnibus fees: | |||||
Class A Shares | 477,374 | ||||
Class C Shares | 530,088 | ||||
Class I Shares | 632,265 | ||||
Other transfer agent fees and expenses: | |||||
Class A Shares | 52,419 | ||||
Class C Shares | 87,612 | ||||
Class D Shares | 109,516 | ||||
Class I Shares | 34,094 | ||||
Class N Shares | 12,292 | ||||
Class R Shares | 1,115 | ||||
Class S Shares | 1,911 | ||||
Class T Shares | 13,169 | ||||
Fund administration fees | 551,008 | ||||
Shareholder reports expense | 419,679 | ||||
Non-interested Trustees’ fees and expenses | 183,162 | ||||
Registration fees | 176,800 | ||||
Professional fees | 78,293 | ||||
Custodian fees | 31,129 | ||||
Other expenses | 664,354 | ||||
Total Expenses |
| 57,871,987 |
| ||
Less: Excess Expense Reimbursement |
| (46,375) |
| ||
Net Expenses |
| 57,825,612 |
| ||
Net Investment Income/(Loss) |
| 116,076,739 |
| ||
Net Realized Gain/(Loss) on Investments: | |||||
Investments and foreign currency transactions | (40,812,984) | ||||
Total Net Realized Gain/(Loss) on Investments |
| (40,812,984) |
| ||
Change in Unrealized Net Appreciation/Depreciation: | |||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 332,559,119 | ||||
Total Change in Unrealized Net Appreciation/Depreciation |
| 332,559,119 |
| ||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 407,822,874 |
| ||
See Notes to Financial Statements. | |
26 | MARCH 31, 2016 |
Janus Balanced Fund
Statements of Changes in Net Assets
|
|
| Period
ended |
| Year ended | |||
Operations: | ||||||||
Net investment income/(loss) | $ | 116,076,739 | $ | 236,250,595 | ||||
Net realized gain/(loss) on investments | (40,812,984) | 698,703,845 | ||||||
Change in unrealized net appreciation/depreciation | 332,559,119 | (1,029,201,973) | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations |
| 407,822,874 |
|
| (94,247,533) | |||
Dividends and Distributions to Shareholders: | ||||||||
Class A Shares | (8,356,353) | (15,949,143) | ||||||
Class C Shares | (6,981,730) | (12,344,484) | ||||||
Class D Shares | (12,646,069) | (27,015,967) | ||||||
Class I Shares | (15,234,311) | (29,079,644) | ||||||
Class N Shares | (17,346,201) | (35,097,894) | ||||||
Class R Shares | (1,789,065) | (3,919,504) | ||||||
Class S Shares | (5,214,203) | (12,632,388) | ||||||
Class T Shares | (41,859,757) | (86,778,197) | ||||||
| Total Dividends from Net Investment Income |
| (109,427,689) |
|
| (222,817,221) | ||
Distributions from Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | (45,340,413) | (36,613,767) | ||||||
Class C Shares | (60,624,654) | (44,392,134) | ||||||
Class D Shares | (62,550,462) | (59,186,126) | ||||||
Class I Shares | (70,501,358) | (58,796,781) | ||||||
Class N Shares | (77,682,727) | (69,741,720) | ||||||
Class R Shares | (12,754,560) | (12,357,019) | ||||||
Class S Shares | (32,384,158) | (34,600,124) | ||||||
Class T Shares | (218,072,346) | (194,276,900) | ||||||
| Total Distributions from Net Realized Gain from Investment Transactions | (579,910,678) |
|
| (509,964,571) | |||
Net Decrease from Dividends and Distributions to Shareholders |
| (689,338,367) |
|
| (732,781,792) | |||
Capital Share Transactions: | ||||||||
Class A Shares | 121,713,543 | 193,038,639 | ||||||
Class C Shares | 199,610,987 | 353,469,430 | ||||||
Class D Shares | 68,325,235 | 58,964,132 | ||||||
Class I Shares | 223,589,648 | 303,840,018 | ||||||
Class N Shares | 149,799,973 | 173,300,111 | ||||||
Class R Shares | 12,110,830 | (9,747,343) | ||||||
Class S Shares | (34,814,734) | (36,679,858) | ||||||
Class T Shares | 281,214,957 | 503,098,909 | ||||||
Net Increase/(Decrease) from Capital Share Transactions |
| 1,021,550,439 |
|
| 1,539,284,038 | |||
Net Increase/(Decrease) in Net Assets |
| 740,034,946 |
|
| 712,254,713 | |||
Net Assets: | ||||||||
Beginning of period | 12,603,050,058 | 11,890,795,345 | ||||||
| End of period | $ | 13,343,085,004 |
| $ | 12,603,050,058 | ||
Undistributed Net Investment Income/(Loss) | $ | 21,105,973 |
| $ | 14,456,923 | |||
See Notes to Financial Statements. | |
Janus Investment Fund | 27 |
Janus Balanced Fund
Financial Highlights
Class A Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011 | |||||
Net Asset Value, Beginning of Period |
| $29.12 |
|
| $31.10 |
|
| $29.11 |
|
| $27.01 |
|
| $23.19 |
|
| $25.10 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | 0.25(1) | 0.55(1) | 0.49(1) | 0.51 | 0.50 | 0.51 | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.70 | (0.70) | 2.83 | 2.90 | 4.22 | (1.14) | |||||||||||||||
Total from Investment Operations |
| 0.95 |
|
| (0.15) |
|
| 3.32 |
|
| 3.41 |
|
| 4.72 |
|
| (0.63) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.23) | (0.52) | (0.47) | (0.50) | (0.49) | (0.50) | |||||||||||||||
Distributions (from capital gains) | (1.33) | (1.31) | (0.86) | (0.81) | (0.41) | (0.78) | |||||||||||||||
Total Dividends and Distributions |
| (1.56) |
|
| (1.83) |
|
| (1.33) |
|
| (1.31) |
|
| (0.90) |
|
| (1.28) |
| |||
Net Asset Value, End of Period | $28.51 | $29.12 | $31.10 | $29.11 | $27.01 | $23.19 | |||||||||||||||
Total Return* |
| 3.20% |
|
| (0.59)% |
|
| 11.65% |
|
| 13.12% |
|
| 20.70% |
|
| (2.85)% |
| |||
Net Assets, End of Period (in thousands) | $1,065,609 | $966,624 | $835,681 | $765,049 | $656,171 | $526,178 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $1,021,720 | $941,167 | $839,360 | $690,266 | $610,115 | $566,145 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 0.93% | 0.93% | 0.95% | 0.94% | 0.98% | 0.91% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.93% | 0.93% | 0.95% | 0.94% | 0.98% | 0.91% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.73% | 1.78% | 1.61% | 1.66% | 1.87% | 2.03% | |||||||||||||||
Portfolio Turnover Rate | 39% | 75% | 72% | 78% | 84% | 94% | |||||||||||||||
1 | |||||||||||||||||||||
Class C Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011 |
| ||||
Net Asset Value, Beginning of Period |
| $28.95 |
|
| $30.93 |
|
| $29.00 |
|
| $26.93 |
|
| $23.15 |
|
| $25.08 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | 0.14(1) | 0.34(1) | 0.27(1) | 0.32 | 0.31 | 0.33 | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.70 | (0.69) | 2.80 | 2.88 | 4.22 | (1.15) | |||||||||||||||
Total from Investment Operations |
| 0.84 |
|
| (0.35) |
|
| 3.07 |
|
| 3.20 |
|
| 4.53 |
|
| (0.82) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.14) | (0.32) | (0.28) | (0.32) | (0.34) | (0.33) | |||||||||||||||
Distributions (from capital gains) | (1.33) | (1.31) | (0.86) | (0.81) | (0.41) | (0.78) | |||||||||||||||
Total Dividends and Distributions |
| (1.47) |
|
| (1.63) |
|
| (1.14) |
|
| (1.13) |
|
| (0.75) |
|
| (1.11) |
| |||
Net Asset Value, End of Period | $28.32 | $28.95 | $30.93 | $29.00 | $26.93 | $23.15 | |||||||||||||||
Total Return* |
| 2.83% |
|
| (1.25)% |
|
| 10.78% |
|
| 12.30% |
|
| 19.84% |
|
| (3.57)% |
| |||
Net Assets, End of Period (in thousands) | $1,435,594 | $1,267,034 | $996,498 | $708,673 | $538,591 | $435,691 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $1,361,188 | $1,175,456 | $874,136 | $597,677 | $491,552 | $463,476 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.66% | 1.61% | 1.68% | 1.70% | 1.72% | 1.65% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.66% | 1.61% | 1.68% | 1.70% | 1.72% | 1.65% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.00% | 1.10% | 0.88% | 0.90% | 1.13% | 1.29% | |||||||||||||||
Portfolio Turnover Rate | 39% | 75% | 72% | 78% | 84% | 94% | |||||||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements. | |
28 | MARCH 31, 2016 |
Janus Balanced Fund
Financial Highlights
Class D Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011 | |||||
Net Asset Value, Beginning of Period |
| $29.17 |
|
| $31.14 |
|
| $29.15 |
|
| $27.03 |
|
| $23.19 |
|
| $25.10 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | 0.28(1) | 0.61(1) | 0.56(1) | 0.56 | 0.56 | 0.56 | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.71 | (0.69) | 2.82 | 2.92 | 4.23 | (1.15) | |||||||||||||||
Total from Investment Operations |
| 0.99 |
|
| (0.08) |
|
| 3.38 |
|
| 3.48 |
|
| 4.79 |
|
| (0.59) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.26) | (0.58) | (0.53) | (0.55) | (0.54) | (0.54) | |||||||||||||||
Distributions (from capital gains) | (1.33) | (1.31) | (0.86) | (0.81) | (0.41) | (0.78) | |||||||||||||||
Total Dividends and Distributions |
| (1.59) |
|
| (1.89) |
|
| (1.39) |
|
| (1.36) |
|
| (0.95) |
|
| (1.32) |
| |||
Net Asset Value, End of Period | $28.57 | $29.17 | $31.14 | $29.15 | $27.03 | $23.19 | |||||||||||||||
Total Return* |
| 3.32% |
|
| (0.38)% |
|
| 11.86% |
|
| 13.40% |
|
| 21.03% |
|
| (2.69)% |
| |||
Net Assets, End of Period (in thousands) | $1,421,279 | $1,382,693 | $1,414,364 | $1,288,565 | $1,157,251 | $962,089 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $1,411,061 | $1,453,548 | $1,383,412 | $1,212,029 | $1,089,153 | $1,039,223 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 0.73% | 0.73% | 0.73% | 0.73% | 0.72% | 0.72% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.73% | 0.73% | 0.73% | 0.73% | 0.72% | 0.72% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.93% | 1.98% | 1.83% | 1.87% | 2.13% | 2.22% | |||||||||||||||
Portfolio Turnover Rate | 39% | 75% | 72% | 78% | 84% | 94% | |||||||||||||||
Class I Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011 |
| ||||
Net Asset Value, Beginning of Period |
| $29.18 |
|
| $31.15 |
|
| $29.15 |
|
| $27.02 |
|
| $23.19 |
|
| $25.09 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | 0.29(1) | 0.64(1) | 0.59(1) | 0.45 | 0.57 | 0.53 | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.70 | (0.70) | 2.83 | 3.05 | 4.22 | (1.09) | |||||||||||||||
Total from Investment Operations |
| 0.99 |
|
| (0.06) |
|
| 3.42 |
|
| 3.50 |
|
| 4.79 |
|
| (0.56) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.27) | (0.60) | (0.56) | (0.56) | (0.55) | (0.56) | |||||||||||||||
Distributions (from capital gains) | (1.33) | (1.31) | (0.86) | (0.81) | (0.41) | (0.78) | |||||||||||||||
Total Dividends and Distributions |
| (1.60) |
|
| (1.91) |
|
| (1.42) |
|
| (1.37) |
|
| (0.96) |
|
| (1.34) |
| |||
Net Asset Value, End of Period | $28.57 | $29.18 | $31.15 | $29.15 | $27.02 | $23.19 | |||||||||||||||
Total Return* |
| 3.32% |
|
| (0.30)% |
|
| 11.99% |
|
| 13.47% |
|
| 21.02% |
|
| (2.56)% |
| |||
Net Assets, End of Period (in thousands) | $1,699,877 | $1,510,302 | $1,306,391 | $966,885 | $1,990,129 | $1,631,889 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $1,614,125 | $1,482,511 | $1,167,616 | $1,148,507 | $1,846,745 | $530,094 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 0.66% | 0.65% | 0.64% | 0.69% | 0.69% | 0.62% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.66% | 0.65% | 0.64% | 0.69% | 0.69% | 0.62% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | 2.00% | 2.06% | 1.92% | 2.02% | 2.16% | 2.32% | |||||||||||||||
Portfolio Turnover Rate | 39% | 75% | 72% | 78% | 84% | 94% | |||||||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements. | |
Janus Investment Fund | 29 |
Janus Balanced Fund
Financial Highlights
Class N Shares | ||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year or period ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012(1) |
| ||||
Net Asset Value, Beginning of Period |
| $29.15 |
|
| $31.11 |
|
| $29.12 |
|
| $27.01 |
|
| $25.46 |
| |||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss) | 0.30(2) | 0.66(2) | 0.60(2) | 0.77 | 0.17 | |||||||||||||
Net realized and unrealized gain/(loss) | 0.70 | (0.69) | 2.83 | 2.74 | 1.67 | |||||||||||||
Total from Investment Operations |
| 1.00 |
|
| (0.03) |
|
| 3.43 |
|
| 3.51 |
|
| 1.84 |
| |||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | (0.28) | (0.62) | (0.58) | (0.59) | (0.29) | |||||||||||||
Distributions (from capital gains) | (1.33) | (1.31) | (0.86) | (0.81) | — | |||||||||||||
Total Dividends and Distributions |
| (1.61) |
|
| (1.93) |
|
| (1.44) |
|
| (1.40) |
|
| (0.29) |
| |||
Net Asset Value, End of Period | $28.54 | $29.15 | $31.11 | $29.12 | $27.01 | |||||||||||||
Total Return* |
| 3.37% |
|
| (0.20)% |
|
| 12.03% |
|
| 13.52% |
|
| 7.25% |
| |||
Net Assets, End of Period (in thousands) | $1,823,452 | $1,709,643 | $1,648,665 | $1,432,413 | $7,610 | |||||||||||||
Average Net Assets for the Period (in thousands) | $1,763,388 | $1,751,330 | $1,532,107 | $1,029,152 | $483 | |||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 0.58% | 0.58% | 0.58% | 0.58% | 0.82% | |||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.58% | 0.58% | 0.58% | 0.58% | 0.77% | |||||||||||||
Ratio of Net Investment Income/(Loss) | 2.08% | 2.14% | 1.98% | 1.89% | 2.98% | |||||||||||||
Portfolio Turnover Rate | 39% | 75% | 72% | 78% | 84% | |||||||||||||
Class R Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011 |
| ||||
Net Asset Value, Beginning of Period |
| $29.02 |
|
| $30.99 |
|
| $29.03 |
|
| $26.95 |
|
| $23.15 |
|
| $25.08 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | 0.19(2) | 0.43(2) | 0.37(2) | 0.40 | 0.41 | 0.41 | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.70 | (0.68) | 2.82 | 2.89 | 4.22 | (1.15) | |||||||||||||||
Total from Investment Operations |
| 0.89 |
|
| (0.25) |
|
| 3.19 |
|
| 3.29 |
|
| 4.63 |
|
| (0.74) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.18) | (0.41) | (0.37) | (0.40) | (0.42) | (0.41) | |||||||||||||||
Distributions (from capital gains) | (1.33) | (1.31) | (0.86) | (0.81) | (0.41) | (0.78) | |||||||||||||||
Total Dividends and Distributions |
| (1.51) |
|
| (1.72) |
|
| (1.23) |
|
| (1.21) |
|
| (0.83) |
|
| (1.19) |
| |||
Net Asset Value, End of Period | $28.40 | $29.02 | $30.99 | $29.03 | $26.95 | $23.15 | |||||||||||||||
Total Return* |
| 2.99% |
|
| (0.94)% |
|
| 11.20% |
|
| 12.68% |
|
| 20.32% |
|
| (3.28)% |
| |||
Net Assets, End of Period (in thousands) | $287,471 | $281,398 | $309,887 | $279,905 | $235,356 | $156,098 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $286,233 | $297,615 | $296,348 | $258,708 | $202,808 | $150,156 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.33% | 1.31% | 1.33% | 1.33% | 1.33% | 1.33% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.33% | 1.31% | 1.33% | 1.33% | 1.33% | 1.33% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.33% | 1.39% | 1.23% | 1.27% | 1.51% | 1.62% | |||||||||||||||
Portfolio Turnover Rate | 39% | 75% | 72% | 78% | 84% | 94% | |||||||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from May 31, 2012 (inception date) through September 30, 2012. (2) Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements. | |
30 | MARCH 31, 2016 |
Janus Balanced Fund
Financial Highlights
Class S Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011 | |||||
Net Asset Value, Beginning of Period |
| $29.12 |
|
| $31.09 |
|
| $29.11 |
|
| $27.01 |
|
| $23.19 |
|
| $25.11 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | 0.23(1) | 0.50(1) | 0.45(1) | 0.47 | 0.47 | 0.47 | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.70 | (0.68) | 2.83 | 2.90 | 4.23 | (1.15) | |||||||||||||||
Total from Investment Operations |
| 0.93 |
|
| (0.18) |
|
| 3.28 |
|
| 3.37 |
|
| 4.70 |
|
| (0.68) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.21) | (0.48) | (0.44) | (0.46) | (0.47) | (0.46) | |||||||||||||||
Distributions (from capital gains) | (1.33) | (1.31) | (0.86) | (0.81) | (0.41) | (0.78) | |||||||||||||||
Total Dividends and Distributions |
| (1.54) |
|
| (1.79) |
|
| (1.30) |
|
| (1.27) |
|
| (0.88) |
|
| (1.24) |
| |||
Net Asset Value, End of Period | $28.51 | $29.12 | $31.09 | $29.11 | $27.01 | $23.19 | |||||||||||||||
Total Return* |
| 3.12% |
|
| (0.71)% |
|
| 11.49% |
|
| 12.97% |
|
| 20.60% |
|
| (3.03)% |
| |||
Net Assets, End of Period (in thousands) | $702,186 | $750,461 | $837,505 | $837,535 | $789,572 | $614,608 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $726,595 | $828,503 | $844,760 | $811,115 | $722,713 | $664,970 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.08% | 1.08% | 1.08% | 1.08% | 1.08% | 1.08% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.08% | 1.07% | 1.08% | 1.08% | 1.08% | 1.08% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.58% | 1.63% | 1.47% | 1.52% | 1.77% | 1.86% | |||||||||||||||
Portfolio Turnover Rate | 39% | 75% | 72% | 78% | 84% | 94% | |||||||||||||||
Class T Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011 |
| ||||
Net Asset Value, Beginning of Period |
| $29.15 |
|
| $31.12 |
|
| $29.13 |
|
| $27.02 |
|
| $23.19 |
|
| $25.10 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | 0.27(1) | 0.58(1) | 0.53(1) | 0.53 | 0.54 | 0.51 | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.70 | (0.69) | 2.83 | 2.92 | 4.22 | (1.13) | |||||||||||||||
Total from Investment Operations |
| 0.97 |
|
| (0.11) |
|
| 3.36 |
|
| 3.45 |
|
| 4.76 |
|
| (0.62) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.25) | (0.55) | (0.51) | (0.53) | (0.52) | (0.51) | |||||||||||||||
Distributions (from capital gains) | (1.33) | (1.31) | (0.86) | (0.81) | (0.41) | (0.78) | |||||||||||||||
Total Dividends and Distributions |
| (1.58) |
|
| (1.86) |
|
| (1.37) |
|
| (1.34) |
|
| (0.93) |
|
| (1.29) |
| |||
Net Asset Value, End of Period | $28.54 | $29.15 | $31.12 | $29.13 | $27.02 | $23.19 | |||||||||||||||
Total Return* |
| 3.25% |
|
| (0.46)% |
|
| 11.77% |
|
| 13.27% |
|
| 20.88% |
|
| (2.78)% |
| |||
Net Assets, End of Period (in thousands) | $4,907,616 | $4,734,896 | $4,541,805 | $3,979,849 | $3,548,410 | $3,066,279 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $4,889,267 | $4,872,456 | $4,375,206 | $3,721,640 | $3,387,942 | $3,227,273 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 0.83% | 0.83% | 0.83% | 0.83% | 0.83% | 0.83% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.83% | 0.82% | 0.82% | 0.83% | 0.83% | 0.83% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | 1.83% | 1.89% | 1.73% | 1.77% | 2.02% | 2.11% | |||||||||||||||
Portfolio Turnover Rate | 39% | 75% | 72% | 78% | 84% | 94% | |||||||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements. | |
Janus Investment Fund | 31 |
Janus Balanced Fund
Notes to Financial Statements (unaudited)
1. Organization and Significant Accounting Policies
Janus Balanced Fund (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-five Funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in equity securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares. Class D Shares are closed to certain new investors.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
Class N Shares are generally available only to financial intermediaries purchasing on behalf of 401(k) plans, 457 plans, 403(b) plans, Taft-Hartley multi-employer plans, profit-sharing and money purchase pension plans, defined benefit plans and nonqualified deferred compensation plans. Class N Shares are also available to Janus proprietary products.
Class R Shares are offered through financial intermediary platforms including, but not limited to, retirement platforms.
Class S Shares are offered through financial intermediary platforms including, but not limited to, retirement platforms and asset allocation, mutual fund wrap, or other discretionary or nondiscretionary fee-based investment advisory programs. In addition, Class S Shares may be available through certain financial intermediaries who have an agreement with Janus Capital Management LLC (“Janus Capital”) or its affiliates to offer Class S Shares on their supermarket platforms.
Class T Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from
32 | MARCH 31, 2016 |
Janus Balanced Fund
Notes to Financial Statements (unaudited)
the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2016 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
Janus Investment Fund | 33 |
Janus Balanced Fund
Notes to Financial Statements (unaudited)
The Fund did not hold a significant amount of Level 3 securities as of March 31, 2016.
The Fund recognizes transfers between the levels as of the beginning of the fiscal year. The following describes the amounts of transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period.
Financial assets of $139,913,861 were transferred out of Level 2 to Level 1 since certain foreign equity prices were applied a fair valuation adjustment factor at the end of the prior fiscal year and no factor was applied at the end of the current period.
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 Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which may be allocated pro rata to the Fund. Each class of shares bears a portion of general expenses, which 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.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of 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 of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
Dividends of net investment income are generally declared and distributed quarterly, and realized capital gains (if any) are distributed annually. The Fund may treat a portion of the amount paid to redeem shares as a distribution of investment company taxable income and realized capital gains that are reflected in the net asset value. This practice, commonly referred to as “equalization,” has no effect on the redeeming shareholder or a Fund’s total return, but may reduce the amounts that would otherwise be required to be paid as taxable dividends to the remaining shareholders. It
34 | MARCH 31, 2016 |
Janus Balanced Fund
Notes to Financial Statements (unaudited)
is possible that the Internal Revenue Service (IRS) could challenge the Funds’ equalization methodology or calculations, and any such challenge could result in additional tax, interest, or penalties to be paid by the Fund.
The Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
2. Derivative Instruments
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended March 31, 2016 is discussed in further detail below. A summary of derivative activity by the Fund is reflected in the tables at the end of this section.
The Fund may use derivative instruments for hedging purposes (to offset risks associated with an investment, currency exposure, or market conditions), to adjust currency exposure relative to a benchmark index, or for speculative purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
· Commodity Risk – the risk related to the change in value of commodities or commodity-linked investments due to changes in the overall market movements, volatility of the underlying benchmark, changes in interest rates, or other factors affecting a particular industry of commodity such as drought, floods, weather, livestock disease, embargoes, tariffs, and international economic, political, and regulatory developments.
· Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund.
· Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations.
· Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment.
· Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market.
Janus Investment Fund | 35 |
Janus Balanced Fund
Notes to Financial Statements (unaudited)
· Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index.
· Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease.
· Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested.
· Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth.
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Fund may also invest in forward currency contracts for nonhedging purposes such as seeking to enhance returns. The Fund is subject to currency risk and counterparty risk in the normal course of pursuing its investment objective through its investments in forward currency contracts.
Forward currency contracts are valued by converting the foreign value to U.S. dollars by using the current spot U.S. dollar exchange rate and/or forward rate for that currency. Exchange and forward rates as of the close of the NYSE shall be used to value the forward currency contracts. The unrealized appreciation/(depreciation) for forward currency contracts is reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations for the change in unrealized net appreciation/depreciation (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to decrease exposure to currency risk associated with foreign currency denominated securities held by the Fund.
During the period ended March 31, 2016, the average ending monthly currency value amounts on sold forward currency contracts is $73,536,700.
36 | MARCH 31, 2016 |
Janus Balanced Fund
Notes to Financial Statements (unaudited)
The following table, grouped by derivative type, provides information about the fair value and location of derivatives within the Statement of Assets and Liabilities as of March 31, 2016.
Fair Value of Derivative Instruments (not accounted for as hedging instruments) as of March 31, 2016 | ||||
|
|
|
| Currency |
Asset Derivatives: | ||||
Forward currency contracts | $ | 57,847 | ||
Liability Derivatives: | ||||
Forward currency contracts | $ | 450,417 | ||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended March 31, 2016.
The effect of Derivative Instruments (not accounted for as hedging instruments) on the Statement of Operations for the period ended March 31, 2016 | |||||
Amount of Realized Gain/(Loss) Recognized on Derivatives | |||||
Derivative |
|
| Currency
| ||
Investments and foreign currency transactions | $ | 5,310,091 | |||
Amount of Change in Unrealized Appreciation/Depreciation Recognized on Derivatives | |||||
Derivative |
|
| Currency
| ||
Investments, foreign currency translations and non-interested Trustees' deferred compensation | $ | (1,321,375) | |||
Please see the Fund’s Statement of Operations for the Fund’s “Net Realized and Unrealized Gain/(Loss) on Investments.”
3. Other Investments and Strategies
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the
Janus Investment Fund | 37 |
Janus Balanced Fund
Notes to Financial Statements (unaudited)
financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. In particular, many EU nations are susceptible to economic risks associated with high levels of debt, notably due to investments in sovereign debt of countries such as Greece, Italy, Spain, Portugal, and Ireland. Many non-governmental issuers, and even certain governments, have defaulted on, or been forced to restructure, their debts. Many other issuers have faced difficulties obtaining credit or refinancing existing obligations. Financial institutions have in many cases required government or central bank support, have needed to raise capital, and/or have been impaired in their ability to extend credit. As a result, financial markets in the EU experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world. Greece, Ireland, and Portugal have already received one or more "bailouts" from other Eurozone member states, and it is unclear how much additional funding they will require or if additional Eurozone member states will require bailouts in the future. One or more countries may abandon the euro and/or withdraw from the EU, placing its currency and banking system in jeopardy.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the "Offsetting Assets and Liabilities" section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs, including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Loans
The Fund may invest in various commercial loans, including bank loans, bridge loans, debtor-in-possession (“DIP”) loans, mezzanine loans, and other fixed and floating rate loans. These loans may be acquired through loan participations and assignments or on a when-issued basis. Commercial loans will comprise no more than 20% of the Fund’s total assets. Below are descriptions of the types of loans held by the Fund as of March 31, 2016.
· Bank Loans - Bank loans are obligations of companies or other entities entered into in connection with recapitalizations, acquisitions, and refinancings. The Fund’s investments in bank loans are generally acquired as a participation interest in, or assignment of, loans originated by a lender or other financial institution. These investments may include institutionally-traded floating and fixed-rate debt securities.
38 | MARCH 31, 2016 |
Janus Balanced Fund
Notes to Financial Statements (unaudited)
· Floating Rate Loans – Floating rate loans are debt securities that have floating interest rates, that adjust periodically, and are tied to a benchmark lending rate, such as London Interbank Offered Rate (“LIBOR”). In other cases, the lending rate could be tied to the prime rate offered by one or more major U.S. banks or the rate paid on large certificates of deposit traded in the secondary markets. If the benchmark lending rate changes, the rate payable to lenders under the loan will change at the next scheduled adjustment date specified in the loan agreement. Floating rate loans are typically issued to companies (‘‘borrowers’’) in connection with recapitalizations, acquisitions, and refinancings. Floating rate loan investments are generally below investment grade. Senior floating rate loans are secured by specific collateral of a borrower and are senior in the borrower’s capital structure. The senior position in the borrower’s capital structure generally gives holders of senior loans a claim on certain of the borrower’s assets that is senior to subordinated debt and preferred and common stock in the case of a borrower’s default. Floating rate loan investments may involve foreign borrowers, and investments may be denominated in foreign currencies. Floating rate loans often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The Fund may invest in obligations of borrowers who are in bankruptcy proceedings. While the Fund generally expects to invest in fully funded term loans, certain of the loans in which the Fund may invest include revolving loans, bridge loans, and delayed draw term loans.
Purchasers of floating rate loans may pay and/or receive certain fees. The Fund may receive fees such as covenant waiver fees or prepayment penalty fees. The Fund may pay fees such as facility fees. Such fees may affect the Fund’s return.
· Mezzanine Loans - Mezzanine loans are secured by the stock of the company that owns the assets. Mezzanine loans are a hybrid of debt and equity financing that is typically used to fund the expansion of existing companies. A mezzanine loan is composed of debt capital that gives the lender the right to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. Mezzanine loans typically are the most subordinated debt obligation in an issuer’s capital structure.
Mortgage- and Asset-Backed Securities
Mortgage- and asset-backed securities represent interests in “pools” of commercial or residential mortgages or other assets, including consumer loans or receivables. The Fund may purchase fixed or variable rate commercial or residential mortgage-backed securities issued by the Government National Mortgage Association (“Ginnie Mae”), the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac”), or other governmental or government-related entities. Ginnie Mae’s guarantees are backed by the full faith and credit of the U.S. Government, which means that the U.S. Government guarantees that the interest and principal will be paid when due. Fannie Mae and Freddie Mac securities are not backed by the full faith and credit of the U.S. Government. In September 2008, the Federal Housing Finance Agency (“FHFA”), an agency of the U.S. Government, placed Fannie Mae and Freddie Mac under conservatorship. Since that time, Fannie Mae and Freddie Mac have received capital support through U.S. Treasury preferred stock purchases, and Treasury and Federal Reserve purchases of their mortgage-backed securities. The FHFA and the U.S. Treasury have imposed strict limits on the size of these entities’ mortgage portfolios. The FHFA has the power to cancel any contract entered into by Fannie Mae and Freddie Mac prior to FHFA’s appointment as conservator or receiver, including the guarantee obligations of Fannie Mae and Freddie Mac.
The Fund may also purchase other mortgage- and asset-backed securities through single- and multi-seller conduits, collateralized debt obligations, structured investment vehicles, and other similar securities. Asset-backed securities may be backed by various consumer obligations, including automobile loans, equipment leases, credit card receivables, or other collateral. In the event the underlying loans are not paid, the securities’ issuer could be forced to sell the assets and recognize losses on such assets, which could impact the Fund’s yield and your return. Unlike traditional debt instruments, payments on these securities include both interest and a partial payment of principal. Mortgage and asset-backed securities are subject to both extension risk, where borrowers pay off their debt obligations more slowly in times of rising interest rates, and prepayment risk, where borrowers pay off their debt obligations sooner than expected in times of declining interest rates. These risks may reduce the Fund’s returns. In addition, investments in mortgage- and asset backed securities, including those comprised of subprime mortgages, may be subject to a higher degree of credit risk, valuation risk, and liquidity risk than various other types of fixed-income securities. Additionally, although mortgage-backed securities are generally supported by some form of government or private guarantee and/or insurance, there is no assurance that guarantors or insurers will meet their obligations.
Janus Investment Fund | 39 |
Janus Balanced Fund
Notes to Financial Statements (unaudited)
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund has entered into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following tables present gross amounts of recognized assets and/or liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see either the “Fair Value of Derivative Instruments as of March 31, 2016” table located in Note 2 of these Notes to Financial Statements and/or the Fund’s Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets | ||||
Counterparty | Gross Amounts | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount |
Credit Suisse International | $ 21,101 | $ - | $ - | $ 21,101 |
JPMorgan Chase & Co. | 18,261 | (18,261) | - | - |
RBC Capital Markets Corp. | 18,485 | - | - | 18,485 |
Total | $ 57,847 | $ (18,261) | $ - | $ 39,586 |
Offsetting of Financial Liabilities and Derivative Liabilities | ||||
Counterparty | Gross Amounts of Recognized Liabilities | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount |
Bank of America | $ 61,048 | $ - | $ - | $ 61,048 |
HSBC Securities (USA), Inc. | 290,991 | - | - | 290,991 |
JPMorgan Chase & Co. | 98,378 | (18,261) | - | 80,117 |
Total | $ 450,417 | $ (18,261) | $ - | $ 432,156 |
(a) Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | ||||
(b) Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. | ||||
The Fund does not exchange collateral on its forward currency contracts with its counterparties; however, the Fund may segregate cash or high-grade securities in an amount at all times equal to or greater than the Fund’s commitment with respect to these contracts. Such segregated assets, if with the Fund’s custodian, are denoted on the accompanying Schedule of Investments and are evaluated daily to ensure their market value equals or exceeds the current market value of the Fund’s corresponding forward currency contracts.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real
40 | MARCH 31, 2016 |
Janus Balanced Fund
Notes to Financial Statements (unaudited)
estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Restricted Security Transactions
Restricted securities held by the Fund may not be sold except in exempt transactions or in a public offering registered under the Securities Act of 1933, as amended. The risk of investing in such securities is generally greater than the risk of investing in the securities of widely held, publicly traded companies. Lack of a secondary market and resale restrictions may result in the inability of the Fund to sell a security at a fair price and may substantially delay the sale of the security. In addition, these securities may exhibit greater price volatility than securities for which secondary markets exist.
Sovereign Debt
The Fund may invest in U.S. and foreign government debt securities (“sovereign debt”). Investments in U.S. sovereign debt are considered low risk. However, investments in non-U.S. sovereign debt can involve a high degree of risk, including the risk that the governmental entity that controls the repayment of sovereign debt may not be willing or able to repay the principal and/or to pay the interest on its sovereign debt in a timely manner. A sovereign debtor’s willingness or ability to satisfy its debt obligation may be affected by various factors, including its cash flow situation, the extent of its foreign currency reserves, the availability of foreign exchange when a payment is due, the relative size of its debt position in relation to its economy as a whole, the sovereign debtor’s policy toward international lenders, and local political constraints to which the governmental entity may be subject. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies, and other entities. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance, or repay principal or interest when due may result in the cancellation of third party commitments to lend funds to the sovereign debtor, which may further impair such debtor’s ability or willingness to timely service its debts. The Fund may be requested to participate in the rescheduling of such sovereign debt and to extend further loans to governmental entities, which may adversely affect the Fund’s holdings. In the event of default, there may be limited or no legal remedies for collecting sovereign debt and there may be no bankruptcy proceedings through which the Fund may collect all or part of the sovereign debt that a governmental entity has not repaid.
When-Issued and Delayed Delivery Securities
The Fund may purchase or sell securities on a when-issued or delayed delivery basis. When-issued and delayed delivery securities in which the Fund may invest include U.S. Treasury Securities, municipal bonds, bank loans, and other similar instruments. The price of the underlying securities and date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Losses may arise due to changes in the market value of the securities or from the inability of counterparties to meet the terms of the contract. In connection with such purchases, the Fund may hold liquid assets as collateral with the Fund’s custodian sufficient to cover the purchase price.
4. Investment Advisory Agreements and Other Transactions with Affiliates
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The Fund’s contractual investment advisory fee rate (expressed as an annual rate) is 0.55%.
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, Class R Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate of 0.68%. Janus Capital has agreed to continue the waiver until at least February 1, 2017. If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund. Janus Services is not compensated for its services related to the shares, except for out-of-pocket costs. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Janus Investment Fund | 41 |
Janus Balanced Fund
Notes to Financial Statements (unaudited)
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the Transfer Agency Agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. The Funds’ Trustees have set limits on fees that the Funds may incur with respect to administrative fees paid for omnibus or networked accounts. Such limits are subject to change by the Trustees in the future. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class R Shares, Class S Shares, and Class T Shares for providing or procuring administrative services to investors in Class R Shares, Class S Shares, and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class R Shares, Class S Shares, and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class R Shares, Class S Shares, and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares. In addition to the administrative fees discussed above, Janus Services receives reimbursement for out-of-pocket costs it incurs for serving as transfer agent and providing, or arranging for, servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, of up to 0.50% of the Class R Shares' average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
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Janus Balanced Fund
Notes to Financial Statements (unaudited)
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund's Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $367,532 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2016. The Fund's portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of March 31, 2016 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended March 31, 2016 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $92,975 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2016.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered product compliant with Rule 2a-7 under the 1940 Act. There are no restrictions on the Fund's ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Fund to Janus Cash Liquidity Fund LLC. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended March 31, 2016 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended March 31, 2016, Janus Distributors retained upfront sales charges of $284,598.
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the period ended March 31, 2016, redeeming shareholders of Class A Shares paid CDSCs of $910 to Janus Distributors.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption
Janus Investment Fund | 43 |
Janus Balanced Fund
Notes to Financial Statements (unaudited)
of the Class C Shares redeemed. During the period ended March 31, 2016, redeeming shareholders of Class C Shares paid CDSCs of $122,161.
The Fund is permitted to purchase or sell securities (“cross-trade”) between itself and other funds or accounts managed by Janus Capital Management LLC in accordance with Rule 17a-7 under the Investment Company Act of 1940 (“Rule 17a-7”), when the transaction is consistent with the investment objectives and policies of the Fund and in accordance with the Internal Cross Trade Procedures adopted by the Trust’s Board of Trustees. These procedures have been designed to ensure that any cross-trade of securities by the Fund from or to another fund or account that is or could be considered an affiliate of the Fund under certain limited circumstances by virtue of having a common investment adviser, common Officer, or common Trustee complies with Rule 17a-7. Under these procedures, each cross-trade is effected at the current market price to save costs where allowed. During the period ended March 31, 2016, the Fund engaged in cross trades amounting to $38,324,100 in purchases and $50,235,004 in sales, resulting in a net realized gain of $1,386,413. The net realized gain is included in “Investments and foreign currency transactions” within the “Net Realized and Unrealized Gain/(Loss) on Investments” section of the Fund’s Statement of Operations.
5. Federal Income Tax
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of March 31, 2016 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals and investments in partnerships.
Federal Tax Cost | Unrealized | Unrealized | Net
Tax Appreciation/ |
$ 11,639,803,595 | $1,793,123,738 | $(123,352,982) | $ 1,669,770,756 |
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Janus Balanced Fund
Notes to Financial Statements (unaudited)
6. Capital Share Transactions
Period ended March 31, 2016 | Year ended September 30, 2015 | |||||
Shares | Amount | Shares | Amount | |||
Class A Shares: | ||||||
Shares sold | 7,540,555 | $218,094,150 | 12,097,676 | $ 372,516,617 | ||
Reinvested dividends and distributions | 1,594,274 | 46,153,794 | 1,469,070 | 44,120,078 | ||
Shares repurchased | (4,950,636) | (142,534,401) | (7,250,610) | (223,598,056) | ||
Net Increase/(Decrease) | 4,184,193 | $121,713,543 |
| 6,316,136 | $ 193,038,639 | |
Class C Shares: | ||||||
Shares sold | 9,484,202 | $272,507,838 | 16,000,004 | $ 490,276,478 | ||
Reinvested dividends and distributions | 1,909,546 | 54,955,219 | 1,502,054 | 44,857,576 | ||
Shares repurchased | (4,464,756) | (127,852,070) | (5,952,341) | (181,664,624) | ||
Net Increase/(Decrease) | 6,928,992 | $199,610,987 |
| 11,549,717 | $ 353,469,430 | |
Class D Shares: | ||||||
Shares sold | 2,250,189 | $ 65,056,908 | 4,067,346 | $ 125,773,675 | ||
Reinvested dividends and distributions | 2,541,655 | 73,705,754 | 2,809,173 | 84,527,872 | ||
Shares repurchased | (2,431,785) | (70,437,427) | (4,901,017) | (151,337,415) | ||
Net Increase/(Decrease) | 2,360,059 | $ 68,325,235 |
| 1,975,502 | $ 58,964,132 | |
Class I Shares: | ||||||
Shares sold | 14,902,013 | $431,032,573 | 21,361,492 | $ 662,059,843 | ||
Reinvested dividends and distributions | 2,366,578 | 68,620,574 | 2,256,661 | 67,896,243 | ||
Shares repurchased | (9,530,570) | (276,063,499) | (13,803,536) | (426,116,068) | ||
Net Increase/(Decrease) | 7,738,021 | $223,589,648 |
| 9,814,617 | $ 303,840,018 | |
Class N Shares: | ||||||
Shares sold | 5,607,337 | $160,471,002 | 8,759,193 | $ 271,098,349 | ||
Reinvested dividends and distributions | 3,280,549 | 95,023,652 | 3,487,239 | 104,838,341 | ||
Shares repurchased | (3,645,488) | (105,694,681) | (6,589,553) | (202,636,579) | ||
Net Increase/(Decrease) | 5,242,398 | $149,799,973 |
| 5,656,879 | $ 173,300,111 | |
Class R Shares: | ||||||
Shares sold | 1,293,026 | $ 37,183,447 | 2,518,350 | $ 77,276,119 | ||
Reinvested dividends and distributions | 456,374 | 13,169,120 | 499,593 | 14,956,932 | ||
Shares repurchased | (1,323,192) | (38,241,737) | (3,321,095) | (101,980,394) | ||
Net Increase/(Decrease) | 426,208 | $ 12,110,830 |
| (303,152) | $ (9,747,343) | |
Class S Shares: | ||||||
Shares sold | 2,191,293 | $ 63,090,094 | 4,943,832 | $ 152,709,412 | ||
Reinvested dividends and distributions | 1,293,699 | 37,458,194 | 1,564,920 | 47,004,547 | ||
Shares repurchased | (4,624,382) | (135,363,022) | (7,677,565) | (236,393,817) | ||
Net Increase/(Decrease) | (1,139,390) | $ (34,814,734) |
| (1,168,813) | $ (36,679,858) | |
Class T Shares: | ||||||
Shares sold | 20,594,645 | $598,079,613 | 41,642,121 | $1,285,255,099 | ||
Reinvested dividends and distributions | 8,885,179 | 257,406,628 | 9,239,410 | 277,727,824 | ||
Shares repurchased | (19,933,861) | (574,271,284) | (34,421,128) | (1,059,884,014) | ||
Net Increase/(Decrease) | 9,545,963 | $281,214,957 |
| 16,460,403 | $ 503,098,909 | |
7. Purchases and Sales of Investment Securities
For the period ended March 31, 2016, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) was as follows:
Purchases of | Proceeds from Sales | Purchases of Long- | Proceeds
from Sales |
$3,591,042,636 | $2,979,310,942 | $ 1,976,995,244 | $ 2,097,164,856 |
Janus Investment Fund | 45 |
Janus Balanced Fund
Notes to Financial Statements (unaudited)
8. Subsequent Event
Management has evaluated whether any events or transactions occurred subsequent to March 31, 2016 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
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Janus Balanced Fund
Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (toll free); (ii) on the Fund’s website at janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding the Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through janus.com/proxyvoting and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Fund files its complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Fund’s Form N-Q: (i) is available on the SEC’s website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-0020 (toll free).
APPROVAL OF ADVISORY AGREEMENTS DURING THE PERIOD
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 9, 2015, based on the Trustees’ evaluation of the information provided by Janus Capital, the subadvisers, and the independent fee consultant, as well as other information, the Trustees determined that the overall arrangements between each Fund and Janus Capital and each subadviser, as applicable, were fair and reasonable in light of the nature, extent and quality of the services provided by Janus Capital, its affiliates and the subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting, the Trustees unanimously approved the continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, for the period from either January 1 or February 1, 2016 through January 1 or February 1, 2017, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee
Janus Investment Fund | 47 |
Janus Balanced Fund
Additional Information (unaudited)
for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed a number of institutional competitive advantages that should enable it to provide superior investment and service performance over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has been strong: for the 36 months ended September 30, 2015, approximately 70% of the Funds were in the top two Broadridge quartiles of performance, and for the 12 months ended September 30, 2015, approximately 61% of the Funds were in the top two Broadridge quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
· For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Unconstrained Bond Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history.
· For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Multi-Sector Income Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
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Janus Balanced Fund
Additional Information (unaudited)
· For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance.
· For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance.
Asset Allocation Funds
· For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
Alternative Fund
· For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 12 months ended May 31, 2015.
Value Funds
· For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 12 months ended May 31, 2015.
· For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital and Perkins had taken or were taking to improve performance, and that the performance trend was improving.
Janus Investment Fund | 49 |
Janus Balanced Fund
Additional Information (unaudited)
· For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital and Perkins had taken or were taking to improve performance, and that the performance trend was improving.
· For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
Mathematical Funds
· For INTECH Emerging Markets Managed Volatility Fund, the Trustees noted that, due to limited performance for the Fund, performance history was not a material factor.
· For INTECH Global Income Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
· For INTECH International Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital and INTECH had taken or were taking to improve performance.
· For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
· For INTECH U.S. Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
Growth and Core Funds
· For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and in the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Research Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
50 | MARCH 31, 2016 |
Janus Balanced Fund
Additional Information (unaudited)
· For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
Global and International Funds
· For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance.
Janus Investment Fund | 51 |
Janus Balanced Fund
Additional Information (unaudited)
Janus Aspen Series
· For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Global Unconstrained Bond Portfolio, the Trustees noted that, due to limited performance for the Fund, performance history was not a material factor.
· For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory and subadvisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by Broadridge, an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers,
52 | MARCH 31, 2016 |
Janus Balanced Fund
Additional Information (unaudited)
was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
The independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 14% below the mean total expenses of their respective Broadridge Expense Group peers and 24% below the mean total expenses for their Broadridge Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 19% below the mean for their Expense Universes; and (4) Fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered the total expenses for each share class of each Fund compared to the mean total expenses for its Broadridge Expense Group peers and to mean total expenses for its Broadridge Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees, breakpoints, and expense waivers on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks and other costs that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) by one estimation methodology, the fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to the estimated fee margins in the industry and relative to estimated fee margins of fund managers using Janus Capital as a subadviser.
The Trustees considered the fees for each Fund for its fiscal year ended in 2014, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
· For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
Janus Investment Fund | 53 |
Janus Balanced Fund
Additional Information (unaudited)
· For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Global Unconstrained Bond Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Multi-Sector Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus has contractually agreed to limit the Fund’s expenses.
· For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield.
· For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield.
Asset Allocation Funds
· For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Global Allocation Fund – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
Alternative Fund
· For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
Value Funds
· For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Perkins Global Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable.
54 | MARCH 31, 2016 |
Janus Balanced Fund
Additional Information (unaudited)
· For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Perkins Value Plus Income Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital had contractually agreed to limit the Fund’s expenses.
Mathematical Funds
· For INTECH Emerging Markets Managed Volatility Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For INTECH Global Income Managed Volatility Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For INTECH International Managed Volatility Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital had contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For INTECH U.S. Core Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For INTECH U.S. Managed Volatility Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for one share class. The Trustees also noted that Janus Capital had contractually agreed to limit the Fund’s expenses.
Growth and Core Funds
· For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Forty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
Janus Investment Fund | 55 |
Janus Balanced Fund
Additional Information (unaudited)
· For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Venture Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
Global and International Funds
· For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Emerging Markets Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Global Select Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
Janus Aspen Series
· For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
56 | MARCH 31, 2016 |
Janus Balanced Fund
Additional Information (unaudited)
· For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Flexible Bond Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital had contractually agreed to limit the Fund’s expenses.
· For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Global Allocation Portfolio - Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Global Unconstrained Bond Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital had contractually agreed to limit the Fund’s expenses.
· For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for its sole share class.
· For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
The Trustees reviewed information on the profitability to Janus Capital and its affiliates of their relationships with each Fund, as well as an explanation of the methodology utilized by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with the Funds and other clients. The Trustees also reviewed the financial statements and corporate structure of Janus Capital’s parent company. In their review, the Trustees considered whether Janus Capital and each subadviser receive adequate incentives and resources to manage the Funds effectively. The Trustees recognized that profitability comparisons among fund managers are difficult because very little comparative information is publicly available, and the profitability of any fund manager is affected by numerous factors, including the organizational structure of the particular fund manager, the types of funds and other accounts it manages, possible other lines of business, the methodology for allocating expenses, and the fund manager’s capital structure and cost of capital. However, taking into account those factors and the analysis provided by the Trustees’ independent fee consultant, and based on the information available, the Trustees concluded that Janus Capital’s profitability with respect to each Fund in relation to the services rendered was reasonable.
The independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
The Trustees concluded that the management fees payable by each Fund to Janus Capital and its affiliates, as well as the fees paid by Janus Capital to the subadvisers of subadvised Funds, were reasonable in relation to the nature, extent, and quality of the services provided, taking into account the fees charged by other advisers for managing comparable mutual funds with similar strategies, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services
Janus Investment Fund | 57 |
Janus Balanced Fund
Additional Information (unaudited)
provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of the Funds increase. They noted that their independent fee consultant provided an analysis of economies of scale, which included discussion of analysis from prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, their independent fee consultant concluded that 85% of these Funds have contractual management fees (gross of waivers) below their Broadridge expense group averages and, overall, 80% of the Funds are below their respective expense group averages for contractual management fees. They also noted that for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of some of the Funds have declined in the past few years, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
The independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, its analyses could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or Janus Capital, and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
58 | MARCH 31, 2016 |
Janus Balanced Fund
Useful Information About Your Fund Report (unaudited)
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2016. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
Performance Overviews
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices. When comparing the performance of the Fund with an index, keep in mind that market indices are not available for investment and do not reflect deduction of expenses.
Average annual total returns are quoted for a Fund with more than one year of performance history. 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 redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
Schedule of Investments
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
Statement of Assets and Liabilities
This statement is often referred to as the “balance sheet.” It lists the assets and liabilities of the Fund on the last day of the reporting period.
Janus Investment Fund | 59 |
Janus Balanced Fund
Useful Information About Your Fund Report (unaudited)
The Fund’s assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. 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’s net assets. Because the Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, 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/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. Also included are ratios of expenses and net investment income to average net assets.
60 | MARCH 31, 2016 |
Janus Balanced Fund
Useful Information About Your Fund Report (unaudited)
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio manager(s) and/or investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal 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 entire portfolio is traded every six months.
Janus Investment Fund | 61 |
Janus provides access to a wide range of investment disciplines.
Alternative
Janus alternative funds seek to deliver strong risk-adjusted returns over a full market cycle with lower correlation to equity markets than traditional investments.
Asset Allocation
Janus’ asset allocation funds utilize our fundamental, bottom-up research to balance risk over the long term. From fund options that meet investors’ risk tolerance and objectives to a method that incorporates non-traditional investment choices to seek non-correlated sources of risk and return, Janus’ asset allocation funds aim to allocate risk more effectively.
Fixed Income
Janus fixed income funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek capital preservation and liquidity with current income as a secondary objective.
Global & International
Janus global and international 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.
Growth & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical funds seek to outperform their respective indices while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH® (a Janus subsidiary), these funds use a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Our value funds, managed by Perkins® (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
For more information about our funds, contact your investment professional or go to janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus).
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Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary prospectus containing this and other information, please call Janus at 877.33JANUS (52687) (or 800.525.3713 if you hold Shares directly with Janus); or download the file from janus.com/info (or janus.com/reports if you hold Shares directly with Janus). Read it carefully before you invest or send money. | ||||||||||||
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC. Funds distributed by Janus Distributors LLC | ||||||||||||
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | |||||||||
C-0516-1626 | 125-24-93037 05-16 | |||||||||||
SEMIANNUAL REPORT March 31, 2016 | |||
Janus Contrarian Fund | |||
Janus Investment Fund | |||
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HIGHLIGHTS · Portfolio management perspective · Investment strategy behind your fund · Fund performance, characteristics | |||
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Table of Contents
Janus Contrarian Fund
Janus Contrarian Fund (unaudited)
PERFORMANCE OVERVIEW
For the six-month period ending March 31, 2016, the Fund’s Class T Shares generated a return of -0.62% versus a return of 8.49% for the S&P 500® Index, the Fund's benchmark.
INVESTMENT ENVIRONMENT
U.S. indices rallied early in the period, continuing their recovery from the summer sell-off. Volatility returned in November as corporate earnings, in aggregate, were subdued and manufacturing data weighed on sentiment. Monetary policy again influenced markets in December as the Federal Reserve (Fed) raised interest rates for the first time in nearly a decade. Weak manufacturing data and an underwhelming holiday shopping season caused some to question whether the U.S. economy was sufficiently healthy to merit the cadence of rate hikes that the Fed had projected. As the calendar turned to 2016, worries re-emerged about the trajectory of the global economy. Crude oil prices resumed their slide, plummeting to levels not seen in over a decade. Stocks also fell, once again entering correction territory. However, stocks rallied again toward the end of the period as investors began to price in the expectation that the Fed would lower its expected rate hike trajectory.
PERFORMANCE DISCUSSION
The Fund underperformed its benchmark, the S&P 500® Index, during the period. As part of our contrarian investment mandate, we seek companies that are undergoing a structural change in their business or industry that has gone unrecognized by the market, but we believe should positively reshape the company’s destiny, and stock performance, over time. These stocks are generally out of favor with investors, but if we correctly identify the changing dynamics at work within these companies or industries, the stocks in our portfolio have the potential to move from being out of favor to in favor as the company executes its turnaround. Our long-term performance ultimately should be driven by our ability to correctly identify companies that are early in the process of undergoing dramatic changes. While disappointed with our performance during the period, many of our largest detractors were impacted by negative sentiment surrounding the industries in which they operate. The specific turnarounds and positive changes we believe are underway for most of these companies continue to take shape and our thesis for owning these stocks remains intact.
Our leading detractor, Endo International, was impacted by negative sentiment surrounding the specialty pharmaceutical industry. Questionable accounting and drug pricing tactics at one of the largest and most well-known specialty pharmaceutical companies, which we do not own, has cast a shadow over all specialty pharmaceutical companies, and this impacted our holdings. While Endo was also impacted by company-specific headwinds, we believe the sell-off was magnified due to negative sentiment tied to the entire industry.
Endo International was impacted when it had to increase its liability provision for cases related to one of its products. This was a legacy issue that was created during the tenure of former management, and we think the stock overcorrected on the news. Looking ahead, the company stands to benefit from a new product that launched in early 2016: Belbuca is a Schedule-3 opioid that was recently approved by the FDA for use in chronic pain. Unlike many other opioids, Belbuca is less easily abused, and therefore does not require handwritten prescriptions from doctors, but can instead be refilled automatically. We believe these qualities will appeal to both doctors and patients.
Indivior PLC. also detracted. The specialty pharmaceutical company’s shares suffered as Indivior went to trial with generic drug firms over the patents behind its leading product, Suboxone, which is used in the treatment of opioid addiction. The FDA’s rejection of an intranasal spray Indivior was developing to treat suspected opioid
Janus Investment Fund | 1 |
Janus Contrarian Fund (unaudited)
overdose also weighed on the stock early in the period. We exited the position.
Another detractor from performance during the period was Knowles Corp., a global supplier of micro-acoustics used in smart phones, hearing aids and other applications. We bought the position after the company was spun out of Dover, which we felt would give management more control over its own destiny. The company’s share price has suffered from declining smart phone sales during the period, including sales of the Apple iPhone 6s, for which Knowles is a significant supplier. In addition, Knowles’ acquisition of Audience Inc. early in 2015 has not produced expected results. We continue to hold our shares due to the stock’s attractive valuation, its position as a major supplier to Apple, and its dominance in the hearing aid market, which we believe is poised to grow strongly in 2016 and beyond.
While some of our detractors had a large impact on performance, we were pleased by the results of many other companies in the portfolio. Mattel was our largest contributor. Better-than-expected earnings results from the fourth quarter of 2015, the key quarter of the year for toy companies such as Mattel, helped drive the stock. Some of Mattel’s new products introduced at an industry toy fair were also well received, providing another indication that the company’s new management team is reinvigorating the culture and improving innovation among its toys. In particular, we have been impressed by the way Mattel has innovated around its Barbie brand.
United Continental was another contributor. The company announced it would increase share buybacks, which provided more evidence of the company’s ability to increase cash flow. Our basic thesis for United remains intact. Large carriers such as United benefit from industry consolidation, which has given large carriers pricing power for the first time in decades. United is also early in the timeline of integrating Continental compared with other airlines that have conducted large mergers or acquisitions, and should benefit from that integration going forward. We also believe the company’s new CEO will unify the company and create value going forward.
Dollar Tree also contributed to performance during the period. We think the company, which recently acquired Family Dollar, will benefit from industry consolidation. We like the company’s new store opportunities, as well as what we view to be its proven management and stability.
Please see the Derivative Instruments section in the "Notes to Financial Statements" for a discussion of derivatives used by the Fund.
OUTLOOK
Slow economic growth, falling oil prices, pressure in high yield markets and questions about the consequences of negative rates in some areas of the world have led to a fear-driven market in recent months. In such an environment, companies that have had a fair amount of negative sentiment around them are unlikely to be embraced by the market.
We think many of the fears in today’s market are unfounded. Economic growth is far from robust, but the global economy is a far cry from where it was in 2008. The U.S. consumer remains strong, wages are slowly rising, and cheap oil is a benefit to consumers and many businesses, though it will take time for those benefits to work their way through the economy. Meanwhile, the concerns that caused market turbulence at the beginning of the year are well understood. As those concerns are digested and the market receives more confirmation that the global economy is not falling off a cliff, we think the market will embrace some of the value-oriented stocks we tend to invest in.
If markets remain slow to embrace such companies, it simply means those companies need to demonstrate that the positive changes we believe are underway are leading to a real impact on the bottom line. For the companies we hold, we are confident this progression will take place. As we mentioned earlier, for the majority of our holdings, our thesis for owning them remains intact. We’ve seen a number of these companies announce large share buybacks or seen management teams conduct insider buying, which points to their own confidence in the underlying improvements. We look forward to seeing how these changes play out the rest of the year.
Thank you for your investment in Janus Contrarian Fund.
2 | MARCH 31, 2016 |
Janus Contrarian Fund (unaudited)
Fund At A Glance
March 31, 2016
5 Top Performers - Holdings |
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Contribution | Contribution | |||||
Mattel, Inc. | 3.16% | Endo International PLC | -5.12% | |||
United Continental Holdings, Inc. | 1.37% | Knowles Corp. | -1.64% | |||
Dollar Tree, Inc. | 0.94% | Indivior PLC | -0.84% | |||
Wendy's Co. | 0.76% | Platform Specialty Products Corp. | -0.73% | |||
Trimble Navigation, Ltd. | 0.60% | St Joe Co. | -0.67% | |||
5 Top Performers - Sectors* |
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Fund Weighting | S&P 500® Index | |||||
Fund Contribution | (Average % of Equity) | Weighting | ||||
Consumer Discretionary | 2.85% | 22.16% | 12.94% | |||
Energy | 0.43% | 5.37% | 6.80% | |||
Industrials | 0.13% | 13.53% | 10.10% | |||
Utilities | -0.25% | 0.00% | 3.14% | |||
Other** | -0.38% | 0.94% | 0.00% | |||
5 Bottom Performers - Sectors* |
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Fund Weighting | S&P 500® Index | |||||
Fund Contribution | (Average % of Equity) | Weighting | ||||
Health Care | -6.77% | 14.61% | 14.73% | |||
Information Technology | -2.72% | 13.89% | 20.65% | |||
Financials | -0.99% | 15.17% | 16.14% | |||
Materials | -0.70% | 11.75% | 2.81% | |||
Consumer Staples | -0.40% | 2.57% | 10.16% | |||
Security contribution to performance is measured by using an algorithm that multiplies the daily performance of each security with the previous day’s ending weight in the portfolio and is gross of advisory fees. Fixed income securities and certain equity securities, such as private placements and some share classes of equity securities, are excluded. | ||||||
* | Based on sector classification according to the Global Industry Classification Standard (“GICS”) codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |||||
** | Not a GICS classified sector. | |||||
Janus Investment Fund | 3 |
Janus Contrarian Fund (unaudited)
Fund At A Glance
March 31, 2016
5 Largest Equity Holdings - (% of Net Assets) | |
United Continental Holdings, Inc. | |
Airlines | 9.5% |
St Joe Co. | |
Real Estate Management & Development | 6.0% |
Mattel, Inc. | |
Leisure Products | 5.9% |
Knowles Corp. | |
Electronic Equipment, Instruments & Components | 4.5% |
Dollar Tree, Inc. | |
Multiline Retail | 4.3% |
30.2% | |
Asset Allocation - (% of Net Assets) | |||||
Common Stocks | 94.6% | ||||
Investment Companies | 13.7% | ||||
Other | (8.3)% | ||||
100.0% | |||||
Top Country Allocations - Long Positions - (% of Investment Securities) | |
As of March 31, 2016
| As of September 30, 2015
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4 | MARCH 31, 2016 |
Janus Contrarian Fund (unaudited)
Performance
See important disclosures on the next page. |
| Expense Ratios - | |||||||||
Average Annual Total Return - for the periods ended March 31, 2016 |
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| per the January 28, 2016 prospectuses | |||||||
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| Fiscal
| One
| Five | Ten
| Since |
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| Total Annual Fund
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Class A Shares at NAV |
| -0.67% | -17.18% | 6.81% | 4.22% | 6.18% |
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| 1.13% | |
Class A Shares at MOP |
| -6.37% | -21.95% | 5.56% | 3.61% | 5.79% |
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Class C Shares at NAV | -1.10% | -17.86% | 5.96% | 3.39% | 5.37% |
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| 1.89% | ||
Class C Shares at CDSC |
| -2.06% | -18.66% | 5.96% | 3.39% | 5.37% |
|
|
| |
Class D Shares(1) |
| -0.56% | -17.03% | 7.01% | 4.42% | 6.35% |
|
| 0.95% | |
Class I Shares |
| -0.55% | -16.98% | 7.07% | 4.36% | 6.32% |
|
| 0.86% | |
Class R Shares |
| -0.85% | -17.51% | 6.38% | 3.78% | 5.72% |
|
| 1.54% | |
Class S Shares |
| -0.72% | -17.31% | 6.65% | 4.05% | 5.99% |
|
| 1.29% | |
Class T Shares |
| -0.62% | -17.09% | 6.91% | 4.36% | 6.32% |
|
| 1.04% | |
S&P 500® Index |
| 8.49% | 1.78% | 11.58% | 7.01% | 4.58% |
|
|
| |
Morningstar Quartile - Class T Shares |
| - | 4th | 3rd | 4th | 3rd |
|
|
| |
Morningstar Ranking - based on total returns for Mid-Cap Blend Funds |
| - | 422/441 | 275/376 | 258/309 | 132/184 |
|
|
| |
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
This Fund has a performance-based management fee that may adjust up or down based on the Fund’s performance.
Janus Investment Fund | 5 |
Janus Contrarian Fund (unaudited)
Performance
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
See Financial Highlights for actual expense ratios during the reporting period.
Class A Shares, Class C Shares, Class R Shares, and Class S Shares commenced operations on July 6, 2009. Performance shown for each class for periods prior to July 6, 2009, reflects the performance of the Fund’s Class J Shares, the initial share class (renamed Class T Shares effective February 16, 2010), calculated using the fees and expenses of each respective class, without the effect of any fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
Class I Shares commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund's commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund's prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2016 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
*The Fund’s inception date – February 29, 2000
(1) Closed to certain new investors.
6 | MARCH 31, 2016 |
Janus Contrarian Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, 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 appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Actual | Hypothetical
| |||||||||
| Beginning | Ending | Expenses |
| Beginning | Ending | Expenses | Net Annualized | ||
Class A Shares | $1,000.00 | $993.30 | $4.73 |
| $1,000.00 | $1,020.25 | $4.80 | 0.95% | ||
Class C Shares | $1,000.00 | $989.00 | $8.55 |
| $1,000.00 | $1,016.40 | $8.67 | 1.72% | ||
Class D Shares | $1,000.00 | $994.40 | $3.74 |
| $1,000.00 | $1,021.25 | $3.79 | 0.75% | ||
Class I Shares | $1,000.00 | $994.50 | $3.44 |
| $1,000.00 | $1,021.55 | $3.49 | 0.69% | ||
Class R Shares | $1,000.00 | $991.50 | $6.57 |
| $1,000.00 | $1,018.40 | $6.66 | 1.32% | ||
Class S Shares | $1,000.00 | $992.80 | $5.38 |
| $1,000.00 | $1,019.60 | $5.45 | 1.08% | ||
Class T Shares | $1,000.00 | $993.80 | $4.14 |
| $1,000.00 | $1,020.85 | $4.19 | 0.83% | ||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. | |||||||||
Janus Investment Fund | 7 |
Janus Contrarian Fund
Schedule of Investments (unaudited)
March 31, 2016
| Value | ||||||
Common Stocks – 94.6% | |||||||
Airlines – 10.5% | |||||||
American Airlines Group, Inc. | 719,202 | $29,494,474 | |||||
United Continental Holdings, Inc.*,# | 4,717,101 | 282,663,781 | |||||
312,158,255 | |||||||
Biotechnology – 0.5% | |||||||
HLS Therapeutics, Inc.ß | 1,935,741 | 13,233,433 | |||||
Capital Markets – 2.1% | |||||||
E*TRADE Financial Corp.* | 2,536,681 | 62,123,318 | |||||
Chemicals – 6.7% | |||||||
Air Products & Chemicals, Inc. | 687,359 | 99,014,064 | |||||
EI du Pont de Nemours & Co. | 353,654 | 22,393,371 | |||||
Platform Specialty Products Corp.*,# | 8,995,225 | 77,358,935 | |||||
198,766,370 | |||||||
Commercial Banks – 1.2% | |||||||
Citizens Financial Group, Inc. | 1,667,657 | 34,937,414 | |||||
Communications Equipment – 3.9% | |||||||
Motorola Solutions, Inc. | 1,544,702 | 116,933,941 | |||||
Construction & Engineering – 1.1% | |||||||
Quanta Services, Inc.* | 1,507,298 | 34,004,643 | |||||
Construction Materials – 1.3% | |||||||
Vulcan Materials Co. | 369,456 | 39,003,470 | |||||
Consumer Finance – 2.0% | |||||||
Synchrony Financial* | 2,113,522 | 60,573,540 | |||||
Containers & Packaging – 5.9% | |||||||
Ball Corp.# | 1,102,700 | 78,611,483 | |||||
Crown Holdings, Inc.* | 1,951,789 | 96,789,216 | |||||
175,400,699 | |||||||
Electronic Equipment, Instruments & Components – 10.1% | |||||||
Knowles Corp.*,#,£ | 10,018,595 | 132,045,082 | |||||
Trimble Navigation, Ltd.* | 2,312,140 | 57,341,072 | |||||
Zebra Technologies Corp. - Class A* | 1,610,511 | 111,125,259 | |||||
300,511,413 | |||||||
Hotels, Restaurants & Leisure – 6.0% | |||||||
Norwegian Cruise Line Holdings, Ltd.* | 830,482 | 45,917,350 | |||||
Popeyes Louisiana Kitchen, Inc.* | 639,235 | 33,278,574 | |||||
Wendy's Co. | 8,953,985 | 97,508,897 | |||||
176,704,821 | |||||||
Household Products – 2.1% | |||||||
Energizer Holdings, Inc. | 1,526,038 | 61,819,799 | |||||
Internet & Catalog Retail – 3.2% | |||||||
Lands' End, Inc.*,#,£ | 3,686,652 | 94,046,493 | |||||
Leisure Products – 5.9% | |||||||
Mattel, Inc.# | 5,237,682 | 176,090,869 | |||||
Media – 2.4% | |||||||
News Corp. - Class A | 5,555,609 | 70,945,127 | |||||
Multiline Retail – 4.3% | |||||||
Dollar Tree, Inc.* | 1,555,401 | 128,258,366 | |||||
Oil, Gas & Consumable Fuels – 7.4% | |||||||
Canadian Natural Resources, Ltd. (U.S. Shares) | 1,102,249 | 29,760,723 | |||||
Enterprise Products Partners LP | 5,152,076 | 126,844,111 | |||||
MPLX LP# | 2,134,296 | 63,367,248 | |||||
219,972,082 | |||||||
Personal Products – 2.8% | |||||||
Edgewell Personal Care Co. | 768,230 | 61,865,562 | |||||
Herbalife, Ltd.*,# | 356,786 | 21,963,746 | |||||
83,829,308 | |||||||
Pharmaceuticals – 6.3% | |||||||
Endo International PLC* | 2,416,257 | 68,017,635 | |||||
Mallinckrodt PLC*,# | 1,939,500 | 118,852,560 | |||||
186,870,195 | |||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
8 | MARCH 31, 2016 |
Janus Contrarian Fund
Schedule of Investments (unaudited)
March 31, 2016
| Value | ||||||
Common Stocks – (continued) | |||||||
Real Estate Investment Trusts (REITs) – 1.6% | |||||||
Colony Starwood Homesß | 133,780 | $2,979,949 | |||||
Gramercy Property Trust# | 2,728,216 | 23,053,425 | |||||
Seritage Growth Properties# | 424,579 | 21,216,213 | |||||
47,249,587 | |||||||
Real Estate Management & Development – 6.3% | |||||||
Colony American Homes Holdings III LP§ | 1,377,158 | 7,240,408 | |||||
St Joe Co.*,£ | 10,451,593 | 179,244,820 | |||||
186,485,228 | |||||||
Specialty Retail – 0.5% | |||||||
Advance Auto Parts, Inc. | 95,440 | 15,302,850 | |||||
Textiles, Apparel & Luxury Goods – 0.5% | |||||||
Cie Financiere Richemont SA | 221,170 | 14,622,715 | |||||
Total Common Stocks (cost $2,743,630,131) | 2,809,843,936 | ||||||
Investment Companies – 13.7% | |||||||
Investments Purchased with Cash Collateral from Securities Lending – 9.8% | |||||||
Janus Cash Collateral Fund LLC, 0.4107%ºº,£ | 291,690,543 | 291,690,543 | |||||
Money Markets – 3.9% | |||||||
Janus Cash Liquidity Fund LLC, 0.3874%ºº,£ | 113,621,867 | 113,621,867 | |||||
Total Investment Companies (cost $405,312,410) | 405,312,410 | ||||||
Total Investments (total cost $3,148,942,541) – 108.3% | 3,215,156,346 | ||||||
Liabilities, net of Cash, Receivables and Other Assets – (8.3)% | (245,471,733) | ||||||
Net Assets – 100% | $2,969,684,613 | ||||||
Summary of Investments by Country - (Long Positions) (unaudited) | |||||
% of Investment | |||||
Country | Value | Securities | |||
United States | $3,170,772,908 | 98.6 | % | ||
Canada | 29,760,723 | 0.9 | |||
Switzerland | 14,622,715 | 0.5 | |||
Total | $3,215,156,346 | 100.0 | % |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 9 |
Janus Contrarian Fund
Notes to Schedule of Investments and Other Information (unaudited)
S&P 500® Index | Measures broad U.S. equity performance. |
LLC | Limited Liability Company |
LP | Limited Partnership |
PLC | Public Limited Company |
U.S. Shares | Securities of foreign companies trading on an American stock exchange. |
* | Non-income producing security. |
ß | Security is illiquid. |
ºº | Rate shown is the 7-day yield as of March 31, 2016. |
# | Loaned security; a portion of the security is on loan at March 31, 2016. |
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. The following securities were considered affiliated companies for all or some portion of the period ended March 31, 2016. Unless otherwise indicated, all information in the table is for the period ended March 31, 2016. |
Share | Share | ||||||||||||||||||||||||||||||||||||
Balance | Balance | Realized | Dividend | Value | |||||||||||||||||||||||||||||||||
at 9/30/15 | Purchases | Sales | at 3/31/16 | Gain/(Loss) | Income | at 3/31/16 | |||||||||||||||||||||||||||||||
Janus Cash Collateral Fund LLC | |||||||||||||||||||||||||||||||||||||
415,772,916 | 875,423,785 | (999,506,158) | 291,690,543 | $— | $2,910,732(1) | $291,690,543 | |||||||||||||||||||||||||||||||
Janus Cash Liquidity Fund LLC | |||||||||||||||||||||||||||||||||||||
60,690,937 | 497,697,780 | (444,766,850) | 113,621,867 | — | 43,467 | 113,621,867 | |||||||||||||||||||||||||||||||
Knowles Corp. | |||||||||||||||||||||||||||||||||||||
10,018,595 | — | — | 10,018,595 | — | — | 132,045,082 | |||||||||||||||||||||||||||||||
Lands' End, Inc. | |||||||||||||||||||||||||||||||||||||
3,686,652 | — | — | 3,686,652 | — | — | 94,046,493 | |||||||||||||||||||||||||||||||
St Joe Co. | |||||||||||||||||||||||||||||||||||||
10,451,593 | — | — | 10,451,593 | — | — | 179,244,820 | |||||||||||||||||||||||||||||||
Total | $— | $2,954,199 | $810,648,805 | ||||||||||||||||||||||||||||||||||
(1) Net of income paid to the securities lending agent and rebates paid to the borrowing counterparties.
§ | Schedule of Restricted and Illiquid Securities (as of March 31, 2016) | |||||||||
Value as a | ||||||||||
Acquisition | % of Net | |||||||||
Date | Cost | Value | Assets | |||||||
Colony American Homes Holdings III LP | 1/30/13 | $ | 9,522,375 | $ | 7,240,408 | 0.2 | % | |||
The Fund has registration rights for certain restricted securities held as of March 31, 2016. The issuer incurs all registration costs. | ||||||||||
10 | MARCH 31, 2016 |
Janus Contrarian Fund
Notes to Schedule of Investments and Other Information (unaudited)
The following is a summary of the inputs that were used to value the Fund's investments in securities and other financial instruments as of March 31, 2016. See Notes to Financial Statements for more information. | |||
Valuation Inputs Summary | |||
| Level
1 - | Level 2 - | Level 3 - |
Assets | |||
Investments in Securities: | |||
Common Stocks | |||
Biotechnology | $ - | $ - | $ 13,233,433 |
Real Estate Investment Trusts (REITs) | 44,269,638 | 2,979,949 | - |
Real Estate Management & Development | 179,244,820 | - | 7,240,408 |
All Other | 2,562,875,688 | - | - |
Investment Companies | - | 405,312,410 | - |
Total Assets | $ 2,786,390,146 | $ 408,292,359 | $ 20,473,841 |
Janus Investment Fund | 11 |
Janus Contrarian Fund
Statement of Assets and Liabilities (unaudited)
March 31, 2016
See footnotes at the end of the Statement. |
|
|
|
|
|
|
|
Assets: | ||||||
Investments, at cost | $ | 3,148,942,541 | ||||
Unaffiliated investments, at value(1) | 2,404,507,541 | |||||
Affiliated investments, at value(2) | 810,648,805 | |||||
Non-interested Trustees' deferred compensation | 56,975 | |||||
Receivables: | ||||||
Investments sold | 78,384,247 | |||||
Dividends | 2,356,238 | |||||
Foreign tax reclaims | 547,925 | |||||
Fund shares sold | 348,325 | |||||
Dividends from affiliates | 22,411 | |||||
Other assets | 27,359 | |||||
Total Assets |
|
| 3,296,899,826 |
| ||
Liabilities: | ||||||
Due to custodian | 7,951 | |||||
Collateral for securities loaned (Note 3) | 291,690,543 | |||||
Payables: | — | |||||
Investments purchased | 30,699,252 | |||||
Fund shares repurchased | 2,667,658 | |||||
Advisory fees | 1,131,362 | |||||
Transfer agent fees and expenses | 514,586 | |||||
12b-1 Distribution and shareholder servicing fees | 66,257 | |||||
Non-interested Trustees' deferred compensation fees | 56,975 | |||||
Fund administration fees | 23,610 | |||||
Non-interested Trustees' fees and expenses | 20,933 | |||||
Professional fees | 15,368 | |||||
Custodian fees | 367 | |||||
Accrued expenses and other payables | 320,351 | |||||
Total Liabilities |
|
| 327,215,213 |
| ||
Net Assets |
| $ | 2,969,684,613 |
| ||
See Notes to Financial Statements. | |
12 | MARCH 31, 2016 |
Janus Contrarian Fund
Statement of Assets and Liabilities (unaudited)
March 31, 2016
|
|
|
|
|
|
|
Net Assets Consist of: | ||||||
Capital (par value and paid-in surplus) | $ | 2,908,113,587 | ||||
Undistributed net investment income/(loss) | (8,242,366) | |||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | 3,584,345 | |||||
Unrealized net appreciation/(depreciation) of investments and non-interested Trustees’ deferred compensation | 66,229,047 | |||||
Total Net Assets |
| $ | 2,969,684,613 |
| ||
Net Assets - Class A Shares | $ | 73,850,733 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 4,124,555 | |||||
Net Asset Value Per Share(3) |
| $ | 17.91 |
| ||
Maximum Offering Price Per Share(4) |
| $ | 19.00 |
| ||
Net Assets - Class C Shares | $ | 57,553,722 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 3,366,061 | |||||
Net Asset Value Per Share(3) |
| $ | 17.10 |
| ||
Net Assets - Class D Shares | $ | 1,879,520,648 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 104,679,014 | |||||
Net Asset Value Per Share |
| $ | 17.96 |
| ||
Net Assets - Class I Shares | $ | 139,047,214 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 7,742,859 | |||||
Net Asset Value Per Share |
| $ | 17.96 |
| ||
Net Assets - Class R Shares | $ | 1,154,161 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 65,521 | |||||
Net Asset Value Per Share |
| $ | 17.62 |
| ||
Net Assets - Class S Shares | $ | 4,261,657 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 237,881 | |||||
Net Asset Value Per Share |
| $ | 17.92 |
| ||
Net Assets - Class T Shares | $ | 814,296,478 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 45,377,235 | |||||
Net Asset Value Per Share |
| $ | 17.95 |
| ||
(1) Includes $138,393,649 of securities on loan. See Note 3 in Notes to Financial Statements. (2) Includes $144,893,448 of securities on loan. See Note 3 in Notes to Financial Statements. (3) Redemption price per share may be reduced for any applicable contingent deferred sales charge. (4) Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements. | |
Janus Investment Fund | 13 |
Janus Contrarian Fund
Statement of Operations (unaudited)
For the period ended March 31, 2016
|
|
|
|
|
|
Investment Income: | |||||
| Dividends | $ | 13,266,976 | ||
Affiliated securities lending income, net | 2,910,732 | ||||
Dividends from affiliates | 43,467 | ||||
Other income | 119 | ||||
Foreign tax withheld | (28,983) | ||||
Total Investment Income |
| 16,192,311 |
| ||
Expenses: | |||||
Advisory fees | 8,289,912 | ||||
12b-1Distribution and shareholder servicing fees: | |||||
Class A Shares | 106,636 | ||||
Class C Shares | 335,354 | ||||
Class R Shares | 3,186 | ||||
Class S Shares | 5,440 | ||||
Transfer agent administrative fees and expenses: | |||||
Class D Shares | 1,144,620 | ||||
Class R Shares | 1,648 | ||||
Class S Shares | 5,440 | ||||
Class T Shares | 1,078,628 | ||||
Transfer agent networking and omnibus fees: | |||||
Class A Shares | 40,796 | ||||
Class C Shares | 35,617 | ||||
Class I Shares | 70,450 | ||||
Other transfer agent fees and expenses: | |||||
Class A Shares | 4,625 | ||||
Class C Shares | 4,578 | ||||
Class D Shares | 228,382 | ||||
Class I Shares | 3,925 | ||||
Class R Shares | 46 | ||||
Class S Shares | 42 | ||||
Class T Shares | 6,077 | ||||
Shareholder reports expense | 303,274 | ||||
Short sale fees and expenses | 145,042 | ||||
Registration fees | 140,245 | ||||
Fund administration fees | 129,860 | ||||
Professional fees | 56,429 | ||||
Non-interested Trustees’ fees and expenses | 40,326 | ||||
Custodian fees | 10,490 | ||||
Other expenses | 138,124 | ||||
Total Expenses |
| 12,329,192 |
| ||
Less: Excess Expense Reimbursement |
| (28,260) |
| ||
Net Expenses |
| 12,300,932 |
| ||
Net Investment Income/(Loss) |
| 3,891,379 |
| ||
Net Realized Gain/(Loss) on Investments: | |||||
Investments and foreign currency transactions | 21,073,060 | ||||
Futures contracts | 12,644,809 | ||||
Short sales | (2,900,907) | ||||
Total Net Realized Gain/(Loss) on Investments |
| 30,816,962 |
| ||
Change in Unrealized Net Appreciation/Depreciation: | |||||
Investments and non-interested Trustees’ deferred compensation | (55,622,227) | ||||
Short sales | 611,649 | ||||
Total Change in Unrealized Net Appreciation/Depreciation |
| (55,010,578) |
| ||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | (20,302,237) |
| ||
See Notes to Financial Statements. | |
14 | MARCH 31, 2016 |
Janus Contrarian Fund
Statements of Changes in Net Assets
|
|
| Period
ended |
| Year ended | |||
Operations: | ||||||||
Net investment income/(loss) | $ | 3,891,379 | $ | 12,998,965 | ||||
Net realized gain/(loss) on investments | 30,816,962 | 160,115,604 | ||||||
Change in unrealized net appreciation/depreciation | (55,010,578) | (571,185,031) | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations |
| (20,302,237) |
|
| (398,070,462) | |||
Dividends and Distributions to Shareholders: | ||||||||
Class A Shares | (135,948) | (278,953) | ||||||
Class D Shares | (8,325,547) | (7,604,912) | ||||||
Class I Shares | (767,878) | (1,718,839) | ||||||
Class S Shares | — | (4,683) | ||||||
Class T Shares | (2,837,464) | (3,095,172) | ||||||
| Total Dividends from Net Investment Income |
| (12,066,837) |
|
| (12,702,559) | ||
Distributions from Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | (2,291,347) | (10,141,868) | ||||||
Class C Shares | (1,885,957) | (7,191,085) | ||||||
Class D Shares | (52,530,515) | (232,877,664) | ||||||
Class I Shares | (4,649,765) | (38,595,332) | ||||||
Class R Shares | (38,252) | (189,010) | ||||||
Class S Shares | (119,374) | (757,586) | ||||||
Class T Shares | (23,781,495) | (130,435,409) | ||||||
| Total Distributions from Net Realized Gain from Investment Transactions | (85,296,705) |
|
| (420,187,954) | |||
Net Decrease from Dividends and Distributions to Shareholders |
| (97,363,542) |
|
| (432,890,513) | |||
Capital Share Transactions: | ||||||||
Class A Shares | (25,799,204) | 51,320,559 | ||||||
Class C Shares | (17,082,192) | 40,234,115 | ||||||
Class D Shares | (24,035,390) | 67,875,084 | ||||||
Class I Shares | (103,979,511) | (7,300,712) | ||||||
Class R Shares | (382,625) | 199 | ||||||
Class S Shares | (162,322) | (426,557) | ||||||
Class T Shares | (93,215,057) | (128,766,262) | ||||||
Net Increase/(Decrease) from Capital Share Transactions |
| (264,656,301) |
|
| 22,936,426 | |||
Net Increase/(Decrease) in Net Assets |
| (382,322,080) |
|
| (808,024,549) | |||
Net Assets: | ||||||||
Beginning of period | 3,352,006,693 | 4,160,031,242 | ||||||
| End of period | $ | 2,969,684,613 |
| $ | 3,352,006,693 | ||
Undistributed Net Investment Income/(Loss) | $ | (8,242,366) |
| $ | (66,908) | |||
See Notes to Financial Statements. | |
Janus Investment Fund | 15 |
Janus Contrarian Fund
Financial Highlights
Class A Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011 | |||||
Net Asset Value, Beginning of Period |
| $18.56 |
|
| $23.11 |
|
| $18.48 |
|
| $13.91 |
|
| $11.29 |
|
| $13.97 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | 0.01(1) | 0.05(1) | 0.02(1) | 0.01 | 0.04 | (0.06) | |||||||||||||||
Net realized and unrealized gain/(loss) | (0.13) | (2.26) | 4.61 | 4.65 | 2.58 | (2.60) | |||||||||||||||
Total from Investment Operations |
| (0.12) |
|
| (2.21) |
|
| 4.63 |
|
| 4.66 |
|
| 2.62 |
|
| (2.66) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.03) | (0.06) | —(2) | (0.09) | — | (0.02) | |||||||||||||||
Distributions (from capital gains) | (0.50) | (2.28) | — | — | — | — | |||||||||||||||
Total Dividends and Distributions |
| (0.53) |
|
| (2.34) |
|
| — |
|
| (0.09) |
|
| — |
|
| (0.02) |
| |||
Net Asset Value, End of Period | $17.91 | $18.56 | $23.11 | $18.48 | $13.91 | $11.29 | |||||||||||||||
Total Return* |
| (0.67)% |
|
| (10.76)% |
|
| 25.08% |
|
| 33.67% |
|
| 23.21% |
|
| (19.09)% |
| |||
Net Assets, End of Period (in thousands) | $73,851 | $102,425 | $75,649 | $25,397 | $23,930 | $33,491 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $85,308 | $114,845 | $46,300 | $24,023 | $28,841 | $64,181 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 0.95% | 1.13% | 1.02% | 0.85% | 0.91% | 0.90% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.95% | 1.13% | 1.02% | 0.85% | 0.91% | 0.90% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.07% | 0.21% | 0.10% | 0.22% | 0.50% | 0.30% | |||||||||||||||
Portfolio Turnover Rate | 23% | 70% | 61% | 66% | 53% | 130% | |||||||||||||||
1 | |||||||||||||||||||||
Class C Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011 |
| ||||
Net Asset Value, Beginning of Period |
| $17.79 |
|
| $22.34 |
|
| $18.01 |
|
| $13.59 |
|
| $11.12 |
|
| $13.84 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | (0.06)(1) | (0.11)(1) | (0.15)(1) | (0.28) | (0.36) | (0.34) | |||||||||||||||
Net realized and unrealized gain/(loss) | (0.13) | (2.16) | 4.48 | 4.70 | 2.83 | (2.38) | |||||||||||||||
Total from Investment Operations |
| (0.19) |
|
| (2.27) |
|
| 4.33 |
|
| 4.42 |
|
| 2.47 |
|
| (2.72) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | — | — | — | — | — | — | |||||||||||||||
Distributions (from capital gains) | (0.50) | (2.28) | — | — | — | — | |||||||||||||||
Total Dividends and Distributions |
| (0.50) |
|
| (2.28) |
|
| — |
|
| — |
|
| — |
|
| — |
| |||
Net Asset Value, End of Period | $17.10 | $17.79 | $22.34 | $18.01 | $13.59 | $11.12 | |||||||||||||||
Total Return* |
| (1.10)% |
|
| (11.44)% |
|
| 24.04% |
|
| 32.52% |
|
| 22.21% |
|
| (19.65)% |
| |||
Net Assets, End of Period (in thousands) | $57,554 | $77,497 | $56,098 | $21,162 | $19,148 | $26,153 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $66,301 | $86,160 | $34,189 | $20,204 | $22,509 | $52,601 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.72% | 1.89% | 1.80% | 1.70% | 1.75% | 1.62% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.72% | 1.89% | 1.80% | 1.70% | 1.70% | 1.62% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | (0.70)% | (0.54)% | (0.69)% | (0.62)% | (0.29)% | (0.43)% | |||||||||||||||
Portfolio Turnover Rate | 23% | 70% | 61% | 66% | 53% | 130% | |||||||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Per share amounts are calculated based on average shares outstanding during the year or period. (2) Less than $0.005 on a per share basis. |
See Notes to Financial Statements. | |
16 | MARCH 31, 2016 |
Janus Contrarian Fund
Financial Highlights
Class D Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011 | |||||
Net Asset Value, Beginning of Period |
| $18.64 |
|
| $23.18 |
|
| $18.53 |
|
| $13.98 |
|
| $11.32 |
|
| $14.01 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | 0.03(1) | 0.08(1) | 0.05(1) | 0.07 | 0.12 | 0.01 | |||||||||||||||
Net realized and unrealized gain/(loss) | (0.13) | (2.27) | 4.64 | 4.63 | 2.54 | (2.66) | |||||||||||||||
Total from Investment Operations |
| (0.10) |
|
| (2.19) |
|
| 4.69 |
|
| 4.70 |
|
| 2.66 |
|
| (2.65) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.08) | (0.07) | (0.04) | (0.15) | —(2) | (0.04) | |||||||||||||||
Distributions (from capital gains) | (0.50) | (2.28) | — | — | — | — | |||||||||||||||
Total Dividends and Distributions |
| (0.58) |
|
| (2.35) |
|
| (0.04) |
|
| (0.15) |
|
| — |
|
| (0.04) |
| |||
Net Asset Value, End of Period | $17.96 | $18.64 | $23.18 | $18.53 | $13.98 | $11.32 | |||||||||||||||
Total Return* |
| (0.56)% |
|
| (10.63)% |
|
| 25.33% |
|
| 33.88% |
|
| 23.51% |
|
| (18.96)% |
| |||
Net Assets, End of Period (in thousands) | $1,879,521 | $1,976,590 | $2,382,592 | $1,977,490 | $1,599,671 | $1,476,010 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $1,907,700 | $2,354,562 | $2,258,453 | $1,813,911 | $1,613,932 | $2,012,506 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 0.75% | 0.95% | 0.80% | 0.68% | 0.66% | 0.69% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.75% | 0.95% | 0.80% | 0.68% | 0.66% | 0.69% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.31% | 0.35% | 0.24% | 0.41% | 0.75% | 0.55% | |||||||||||||||
Portfolio Turnover Rate | 23% | 70% | 61% | 66% | 53% | 130% | |||||||||||||||
Class I Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011 |
| ||||
Net Asset Value, Beginning of Period |
| $18.64 |
|
| $23.20 |
|
| $18.55 |
|
| $13.98 |
|
| $11.33 |
|
| $14.01 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | 0.03(1) | 0.10(1) | 0.09(1) | 0.11 | 0.12 | (0.01) | |||||||||||||||
Net realized and unrealized gain/(loss) | (0.13) | (2.28) | 4.63 | 4.62 | 2.53 | (2.61) | |||||||||||||||
Total from Investment Operations |
| (0.10) |
|
| (2.18) |
|
| 4.72 |
|
| 4.73 |
|
| 2.65 |
|
| (2.62) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.08) | (0.10) | (0.07) | (0.16) | —(2) | (0.06) | |||||||||||||||
Distributions (from capital gains) | (0.50) | (2.28) | — | — | — | — | |||||||||||||||
Total Dividends and Distributions |
| (0.58) |
|
| (2.38) |
|
| (0.07) |
|
| (0.16) |
|
| — |
|
| (0.06) |
| |||
Net Asset Value, End of Period | $17.96 | $18.64 | $23.20 | $18.55 | $13.98 | $11.33 | |||||||||||||||
Total Return* |
| (0.55)% |
|
| (10.60)% |
|
| 25.47% |
|
| 34.09% |
|
| 23.39% |
|
| (18.80)% |
| |||
Net Assets, End of Period (in thousands) | $139,047 | $248,586 | $329,245 | $85,000 | $44,907 | $58,036 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $176,078 | $382,723 | $184,931 | $69,116 | $51,304 | $115,103 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 0.69% | 0.86% | 0.74% | 0.52% | 0.62% | 0.65% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.69% | 0.86% | 0.74% | 0.52% | 0.62% | 0.65% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.29% | 0.44% | 0.40% | 0.59% | 0.80% | 0.54% | |||||||||||||||
Portfolio Turnover Rate | 23% | 70% | 61% | 66% | 53% | 130% | |||||||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Per share amounts are calculated based on average shares outstanding during the year or period. (2) Less than $0.005 on a per share basis. |
See Notes to Financial Statements. | |
Janus Investment Fund | 17 |
Janus Contrarian Fund
Financial Highlights
Class R Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011 | |||||
Net Asset Value, Beginning of Period |
| $18.27 |
|
| $22.81 |
|
| $18.31 |
|
| $13.76 |
|
| $11.21 |
|
| $13.91 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | (0.02)(1) | (0.05)(1) | (0.07)(1) | (0.16) | (0.07) | (0.11) | |||||||||||||||
Net realized and unrealized gain/(loss) | (0.13) | (2.21) | 4.57 | 4.72 | 2.62 | (2.59) | |||||||||||||||
Total from Investment Operations |
| (0.15) |
|
| (2.26) |
|
| 4.50 |
|
| 4.56 |
|
| 2.55 |
|
| (2.70) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | — | — | — | (0.01) | — | — | |||||||||||||||
Distributions (from capital gains) | (0.50) | (2.28) | — | — | — | — | |||||||||||||||
Total Dividends and Distributions |
| (0.50) |
|
| (2.28) |
|
| — |
|
| (0.01) |
|
| — |
|
| — |
| |||
Net Asset Value, End of Period | $17.62 | $18.27 | $22.81 | $18.31 | $13.76 | $11.21 | |||||||||||||||
Total Return* |
| (0.85)% |
|
| (11.13)% |
|
| 24.58% |
|
| 33.12% |
|
| 22.75% |
|
| (19.41)% |
| |||
Net Assets, End of Period (in thousands) | $1,154 | $1,592 | $1,994 | $1,634 | $1,877 | $2,506 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $1,318 | $2,031 | $1,910 | $1,715 | $2,053 | $3,679 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.32% | 1.54% | 1.38% | 1.25% | 1.24% | 1.30% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.32% | 1.54% | 1.38% | 1.25% | 1.24% | 1.30% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | (0.25)% | (0.23)% | (0.35)% | (0.18)% | 0.15% | (0.07)% | |||||||||||||||
Portfolio Turnover Rate | 23% | 70% | 61% | 66% | 53% | 130% | |||||||||||||||
Class S Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011 |
| ||||
Net Asset Value, Beginning of Period |
| $18.55 |
|
| $23.09 |
|
| $18.48 |
|
| $13.87 |
|
| $11.27 |
|
| $13.96 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | —(1)(2) | —(1)(2) | (0.01)(1) | (0.05) | 0.04 | (0.11) | |||||||||||||||
Net realized and unrealized gain/(loss) | (0.13) | (2.25) | 4.62 | 4.69 | 2.56 | (2.58) | |||||||||||||||
Total from Investment Operations |
| (0.13) |
|
| (2.25) |
|
| 4.61 |
|
| 4.64 |
|
| 2.60 |
|
| (2.69) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | — | (0.01) | — | (0.03) | — | — | |||||||||||||||
Distributions (from capital gains) | (0.50) | (2.28) | — | — | — | — | |||||||||||||||
Total Dividends and Distributions |
| (0.50) |
|
| (2.29) |
|
| — |
|
| (0.03) |
|
| — |
|
| — |
| |||
Net Asset Value, End of Period | $17.92 | $18.55 | $23.09 | $18.48 | $13.87 | $11.27 | |||||||||||||||
Total Return* |
| (0.72)% |
|
| (10.92)% |
|
| 24.95% |
|
| 33.50% |
|
| 23.07% |
|
| (19.27)% |
| |||
Net Assets, End of Period (in thousands) | $4,262 | $4,578 | $6,346 | $2,022 | $2,598 | $2,662 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $4,352 | $6,905 | $5,130 | $1,850 | $2,688 | $5,556 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.08% | 1.29% | 1.16% | 1.00% | 1.00% | 1.06% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.08% | 1.28% | 1.15% | 0.99% | 0.99% | 1.06% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | (0.02)% | 0.01% | (0.05)% | 0.07% | 0.42% | 0.11% | |||||||||||||||
Portfolio Turnover Rate | 23% | 70% | 61% | 66% | 53% | 130% | |||||||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Per share amounts are calculated based on average shares outstanding during the year or period. (2) Less than $0.005 on a per share basis. |
See Notes to Financial Statements. | |
18 | MARCH 31, 2016 |
Janus Contrarian Fund
Financial Highlights
Class T Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011 | |||||
Net Asset Value, Beginning of Period |
| $18.62 |
|
| $23.15 |
|
| $18.51 |
|
| $13.96 |
|
| $11.31 |
|
| $14.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | 0.02(1) | 0.06(1) | 0.03(1) | 0.05 | 0.09 | (0.04) | |||||||||||||||
Net realized and unrealized gain/(loss) | (0.13) | (2.26) | 4.64 | 4.63 | 2.56 | (2.62) | |||||||||||||||
Total from Investment Operations |
| (0.11) |
|
| (2.20) |
|
| 4.67 |
|
| 4.68 |
|
| 2.65 |
|
| (2.66) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.06) | (0.05) | (0.03) | (0.13) | — | (0.03) | |||||||||||||||
Distributions (from capital gains) | (0.50) | (2.28) | — | — | — | — | |||||||||||||||
Total Dividends and Distributions |
| (0.56) |
|
| (2.33) |
|
| (0.03) |
|
| (0.13) |
|
| — |
|
| (0.03) |
| |||
Net Asset Value, End of Period | $17.95 | $18.62 | $23.15 | $18.51 | $13.96 | $11.31 | |||||||||||||||
Total Return* |
| (0.62)% |
|
| (10.68)% |
|
| 25.24% |
|
| 33.76% |
|
| 23.43% |
|
| (19.04)% |
| |||
Net Assets, End of Period (in thousands) | $814,296 | $940,738 | $1,308,109 | $985,916 | $769,713 | $849,035 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $862,903 | $1,252,238 | $1,238,665 | $894,444 | $838,592 | $1,474,114 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 0.83% | 1.04% | 0.89% | 0.76% | 0.75% | 0.81% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.83% | 1.02% | 0.89% | 0.75% | 0.74% | 0.81% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.21% | 0.27% | 0.16% | 0.34% | 0.67% | 0.40% | |||||||||||||||
Portfolio Turnover Rate | 23% | 70% | 61% | 66% | 53% | 130% | |||||||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements. | |
Janus Investment Fund | 19 |
Janus Contrarian Fund
Notes to Financial Statements (unaudited)
1. Organization and Significant Accounting Policies
Janus Contrarian Fund (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-five Funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in equity securities. The Fund is classified as nondiversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares. Class D Shares are closed to certain new investors.
Shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
Class R Shares are offered through financial intermediary platforms including, but not limited to, retirement platforms.
Class S Shares are offered through financial intermediary platforms including, but not limited to, retirement platforms and asset allocation, mutual fund wrap, or other discretionary or nondiscretionary fee-based investment advisory programs. In addition, Class S Shares may be available through certain financial intermediaries who have an agreement with Janus Capital Management LLC (“Janus Capital”) or its affiliates to offer Class S Shares on their supermarket platforms.
Class T Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange
20 | MARCH 31, 2016 |
Janus Contrarian Fund
Notes to Financial Statements (unaudited)
(“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2016 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The Fund did not hold a significant amount of Level 3 securities as of March 31, 2016.
Janus Investment Fund | 21 |
Janus Contrarian Fund
Notes to Financial Statements (unaudited)
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
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 Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which may be allocated pro rata to the Fund. Each class of shares bears a portion of general expenses, which 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.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of 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 of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually. The Fund may treat a portion of the amount paid to redeem shares as a distribution of investment company taxable income and realized capital gains that are reflected in the net asset value. This practice, commonly referred to as “equalization,” has no effect on the redeeming shareholder or a Fund’s total return, but may reduce the amounts that would otherwise be required to be paid as taxable dividends to the remaining shareholders. It is possible that the Internal Revenue Service (IRS) could challenge the Funds’ equalization methodology or calculations, and any such challenge could result in additional tax, interest, or penalties to be paid by the Fund.
The Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If
22 | MARCH 31, 2016 |
Janus Contrarian Fund
Notes to Financial Statements (unaudited)
the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
2. Derivative Instruments
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended March 31, 2016 is discussed in further detail below. A summary of derivative activity by the Fund is reflected in the tables at the end of this section.
The Fund may use derivative instruments for hedging purposes (to offset risks associated with an investment, currency exposure, or market conditions), to adjust currency exposure relative to a benchmark index, or for speculative purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
· Commodity Risk – the risk related to the change in value of commodities or commodity-linked investments due to changes in the overall market movements, volatility of the underlying benchmark, changes in interest rates, or other factors affecting a particular industry of commodity such as drought, floods, weather, livestock disease, embargoes, tariffs, and international economic, political, and regulatory developments.
· Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund.
· Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations.
· Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment.
· Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market.
· Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index.
Janus Investment Fund | 23 |
Janus Contrarian Fund
Notes to Financial Statements (unaudited)
· Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease.
· Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested.
· Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth.
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Fund may also invest in forward currency contracts for nonhedging purposes such as seeking to enhance returns. The Fund is subject to currency risk and counterparty risk in the normal course of pursuing its investment objective through its investments in forward currency contracts.
Forward currency contracts are valued by converting the foreign value to U.S. dollars by using the current spot U.S. dollar exchange rate and/or forward rate for that currency. Exchange and forward rates as of the close of the NYSE shall be used to value the forward currency contracts. The unrealized appreciation/(depreciation) for forward currency contracts is reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations for the change in unrealized net appreciation/depreciation (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to decrease exposure to currency risk associated with foreign currency denominated securities held by the Fund.
During the period ended March 31, 2016, the average ending monthly currency value amounts on sold forward currency contracts is $14,615,782. There were no forward currency contracts held at March 31, 2016.
Futures Contracts
A futures contract is an exchange-traded agreement to take or make delivery of an underlying asset at a specific time in the future for a specific predetermined negotiated price. The Fund may enter into futures contracts to gain exposure to the stock market or other markets pending investment of cash balances or to meet liquidity needs. The Fund is subject to interest rate risk, equity risk, and currency risk in the normal course of pursuing its investment objective through its investments in futures contracts. The Fund may also use such derivative instruments to hedge or protect from adverse movements in securities prices, currency rates or interest rates. The use of futures contracts may involve risks such as the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.
Futures contracts on commodities are valued at the settlement price on valuation date on the commodities exchange as reported by an approved vendor. Mini contracts, as defined in the description of the contract, shall be valued using the
24 | MARCH 31, 2016 |
Janus Contrarian Fund
Notes to Financial Statements (unaudited)
Actual Settlement Price or “ASET” price type as reported by an approved vendor. In the event that foreign futures trade when the foreign equity markets are closed, the last foreign futures trade price shall be used. Futures contracts are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Statement of Assets and Liabilities (if applicable). The change in unrealized net appreciation/depreciation is reported on the Statement of Operations (if applicable). When a contract is closed, a realized gain or loss is reported on the Statement of Operations (if applicable), equal to the difference between the opening and closing value of the contract. Securities held by the Fund that are designated as collateral for market value on futures contracts are noted on the Schedule of Investments (if applicable). Such collateral is in the possession of the Fund’s futures commission merchant.
With futures, there is minimal counterparty credit risk to the Fund since futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default.
During the period, the Fund sold futures on equity indices to decrease exposure to equity risk.
During the period ended March 31, 2016, the average ending monthly market value amounts on sold futures contracts is $0. There were no futures held at March 31, 2016.
Options Contracts
An options contract provides the purchaser with the right, but not the obligation, to buy (call option) or sell (put option) a financial instrument at an agreed upon price on or before a specified date. The purchaser pays a premium to the seller for this right. The seller has the corresponding obligation to sell or buy a financial instrument if the purchaser (owner) "exercises" the option. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option are adjusted by the amount of premium received or paid. Upon expiration, or closing of the option transaction, a realized gain or loss is reported on the Statement of Operations (if applicable). The difference between the premium paid/received and the market value of the option is recorded as unrealized appreciation or depreciation. The net change in unrealized appreciation or depreciation is reported on the Statement of Operations (if applicable). Option contracts are typically valued using an approved vendor’s option valuation model. To the extent reliable market quotations are available, option contracts are valued using market quotations. In cases when an approved vendor cannot provide coverage for an option and there is no reliable market quotation, a broker quotation or an internal valuation using the Black-Scholes model, the Cox-Rubenstein Binomial Option Pricing Model, or other appropriate option pricing model is used. Certain options contracts are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Statement of Assets and Liabilities as “Variation margin receivable” or “Variation margin payable” (if applicable).
The Fund may use options contracts to hedge against changes in interest rates, the values of equities, or foreign currencies. The Fund generally invests in options to hedge against adverse movements in the value of portfolio holdings. The use of such instruments may involve certain additional risks as a result of unanticipated movements in the market. A lack of correlation between the value of an instrument underlying an option and the asset being hedged, or unexpected adverse price movements, could render the Fund’s hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. The Fund may be subject to counterparty risk, interest rate risk, liquidity risk, equity risk, commodity risk, and currency risk in the normal course of pursuing its investment objective through its investments in options contracts.
Options traded on an exchange are regulated and the terms of the options are standardized. Options traded OTC expose the Fund to counterparty risk in the event that the counterparty does not perform. This risk is mitigated by having a netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the counterparty.
The Fund may purchase put options to hedge against a decline in the value of its portfolio. By using put options in this way, the Fund will reduce any profit it might otherwise have realized in the underlying security by the amount of the premium paid for the put option and by transaction costs. The Fund may purchase call options to hedge against an increase in the price of securities that it may buy in the future. The premium paid for the call option plus any transaction costs will reduce the benefit, if any, realized by the Fund upon exercise of the option, and, unless the price of the underlying security rises sufficiently, the option may expire worthless to the Fund. The risk in buying options is that the Fund pays a premium whether or not the options are exercised. Options purchased are reported in the Schedule of Investments (if applicable).
Janus Investment Fund | 25 |
Janus Contrarian Fund
Notes to Financial Statements (unaudited)
During the period, the Fund purchased call options on various equity securities for the purpose of increasing exposure to individual equity risk.
During the period ended March 31, 2016, the average ending monthly market value amounts on purchased call options is $486,071. There were no purchased options held at March 31, 2016.
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended March 31, 2016.
The effect of Derivative Instruments (not accounted for as hedging instruments) on the Statement of Operations for the period ended March 31, 2016 | ||||||||
Amount of Realized Gain/(Loss) Recognized on Derivatives | ||||||||
Derivative |
|
| Currency |
| Equity |
| Total | |
Futures contracts | $ | - | $ | 12,644,809 | $ | 12,644,809 | ||
Investments and foreign currency transactions | 1,187,833 | (4,488,600)* | (3,300,768) | |||||
Total |
| $ | 1,187,833 | $ | 8,156,209 | $ | 9,344,041 | |
Amount of Change in Unrealized Appreciation/Depreciation Recognized on Derivatives | ||||||||
Derivative |
|
| Currency
|
| Equity |
| Total | |
Investments, foreign currency translations and non-interested Trustees' deferred compensation | $ | (429,456) | $ | 3,405,888* | $ | 2,976,432 | ||
* | Amounts relate to purchased options. | |||||||
Please see the Fund’s Statement of Operations for the Fund’s “Net Realized and Unrealized Gain/(Loss) on Investments.”
3. Other Investments and Strategies
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. In particular, many EU nations are susceptible to economic risks associated with high
26 | MARCH 31, 2016 |
Janus Contrarian Fund
Notes to Financial Statements (unaudited)
levels of debt, notably due to investments in sovereign debt of countries such as Greece, Italy, Spain, Portugal, and Ireland. Many non-governmental issuers, and even certain governments, have defaulted on, or been forced to restructure, their debts. Many other issuers have faced difficulties obtaining credit or refinancing existing obligations. Financial institutions have in many cases required government or central bank support, have needed to raise capital, and/or have been impaired in their ability to extend credit. As a result, financial markets in the EU experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world. Greece, Ireland, and Portugal have already received one or more "bailouts" from other Eurozone member states, and it is unclear how much additional funding they will require or if additional Eurozone member states will require bailouts in the future. One or more countries may abandon the euro and/or withdraw from the EU, placing its currency and banking system in jeopardy.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the "Offsetting Assets and Liabilities" section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs, including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Exchange-Traded Funds
The Fund may invest in exchange-traded funds (“ETFs”) to gain exposure to a particular portion of the market. ETFs are typically open-end investment companies, which may be actively managed or passively managed, that generally seek to track the performance of a specific index. ETFs are traded on a national securities exchange at market prices that may vary from the net asset value of their underlying investments. Accordingly, there may be times when an ETF trades at a premium or discount. When the Fund invests in an ETF, in addition to directly bearing the expenses associated with its own operations, it will bear a pro rata portion of the ETF's expenses. As a result, the cost of investing in a Fund may be higher than the cost of investing directly in ETFs and may be higher than other mutual funds that invest directly in stocks and bonds. ETFs also involve the risk that an active trading market for an ETF’s shares may not develop or be maintained. Similarly, because the value of ETF shares depends on the demand in the market, the Fund may not be able to purchase or sell an ETF at the most optimal time, which could adversely affect the Fund’s performance. In addition, ETFs that track particular indices may be unable to match the performance of such underlying indices due to the temporary unavailability of certain index securities in the secondary market or other factors, such as discrepancies with respect to the weighting of securities. Because the Fund may invest in a broad range of ETFs, such risks may include, but are not limited to, leverage risk, foreign exposure risk, interest rate risk, and commodity-linked investments risk. The Fund is also subject to the risks associated with the securities in which the ETF invests.
Janus Investment Fund | 27 |
Janus Contrarian Fund
Notes to Financial Statements (unaudited)
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund has entered into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following table presents gross amounts of recognized assets and/or liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see either the “Fair Value of Derivative Instruments as of March 31, 2016” table located in Note 2 of these Notes to Financial Statements and/or the Fund’s Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets | |||||
Counterparty | Gross
Amounts | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | |
Deutsche Bank AG | $ 283,287,097 | $ - | $ (283,287,097) | $ - | |
(a) Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |||||
(b) Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. | |||||
Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. Securities on loan will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral as permitted by the SEC. The value of the collateral must be at least 102% of the market value of the loaned securities that are denominated in U.S. dollars and 105% of the market value of the loaned securities that are not denominated in U.S. dollars. Upon receipt of cash collateral, Janus Capital intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. Loaned securities and related collateral are marked-to-market each business day based upon the market value of the loaned securities at the close of business, employing the most recent available pricing information. Collateral levels are then adjusted based on this mark-to-market evaluation.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Restricted Security Transactions
Restricted securities held by the Fund may not be sold except in exempt transactions or in a public offering registered under the Securities Act of 1933, as amended. The risk of investing in such securities is generally greater than the risk
28 | MARCH 31, 2016 |
Janus Contrarian Fund
Notes to Financial Statements (unaudited)
of investing in the securities of widely held, publicly traded companies. Lack of a secondary market and resale restrictions may result in the inability of the Fund to sell a security at a fair price and may substantially delay the sale of the security. In addition, these securities may exhibit greater price volatility than securities for which secondary markets exist.
Securities Lending
Under procedures adopted by the Trustees, the Fund may seek to earn additional income by lending securities to qualified parties. Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. The Fund may lend portfolio securities in an amount equal to up to 1/3 of its total assets as determined at the time of the loan origination. There is the risk of delay in recovering a loaned security or the risk of loss in collateral rights if the borrower fails financially. In addition, Janus Capital makes efforts to balance the benefits and risks from granting such loans. All loans will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral as permitted by the SEC. If the Fund is unable to recover a security on loan, the Fund may use the collateral to purchase replacement securities in the market. There is a risk that the value of the collateral could decrease below the cost of the replacement security by the time the replacement investment is made, resulting in a loss to the Fund.
Upon receipt of cash collateral, Janus Capital may invest it in affiliated or non-affiliated cash management vehicles, whether registered or unregistered entities, as permitted by the 1940 Act and rules promulgated thereunder. Janus Capital currently intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. An investment in Janus Cash Collateral Fund LLC is generally subject to the same risks that shareholders experience when investing in similarly structured vehicles, such as the potential for significant fluctuations in assets as a result of the purchase and redemption activity of the securities lending program, a decline in the value of the collateral, and possible liquidity issues. Such risks may delay the return of the cash collateral and cause the Fund to violate its agreement to return the cash collateral to a borrower in a timely manner. As adviser to the Fund and Janus Cash Collateral Fund LLC, Janus Capital has an inherent conflict of interest as a result of its fiduciary duties to both the Fund and Janus Cash Collateral Fund LLC. Additionally, Janus Capital receives an investment advisory fee of 0.05% for managing Janus Cash Collateral Fund LLC, but it may not receive a fee for managing certain other affiliated cash management vehicles in which the Fund may invest, and therefore may have an incentive to allocate preferred investment opportunities to investment vehicles for which it is receiving a fee.
The value of the collateral must be at least 102% of the market value of the loaned securities that are denominated in U.S. dollars and 105% of the market value of the loaned securities that are not denominated in U.S. dollars. Loaned securities and related collateral are marked-to-market each business day based upon the market value of the loaned securities at the close of business, employing the most recent available pricing information. Collateral levels are then adjusted based on this mark-to-market evaluation.
The cash collateral invested by Janus Capital is disclosed in the Schedule of Investments (if applicable). Income earned from the investment of the cash collateral, net of rebates paid to, or fees paid by, borrowers and less the fees paid to the lending agent are included as “Affiliated securities lending income, net” on the Statement of Operations. As of March 31, 2016, securities lending transactions accounted for as secured borrowings with an overnight and continuous contractual maturity are $283,287,097 for equity securities. Gross amounts of recognized liabilities for securities lending (collateral received) as of March 31, 2016 is $291,690,543, resulting in the net amount due to the counterparty of $8,403,446.
4. Investment Advisory Agreements and Other Transactions with Affiliates
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The Fund’s "base" fee rate prior to any performance adjustment (expressed as an annual rate) is 0.64%.
The investment advisory fee rate is determined by calculating a base fee and applying a performance adjustment. The base fee rate is the same as the contractual investment advisory fee rate. The performance adjustment either increases or decreases the base fee depending on how well the Fund has performed relative to its benchmark index. The Fund's benchmark index used in the calculation is the S&P 500® Index.
The calculation of the performance adjustment applies as follows:
Janus Investment Fund | 29 |
Janus Contrarian Fund
Notes to Financial Statements (unaudited)
Investment Advisory Fee = Base Fee Rate +/- Performance Adjustment
The investment advisory fee rate paid to Janus Capital by the Fund consists of two components: (1) a base fee calculated by applying the contractual fixed rate of the advisory fee to the Fund’s average daily net assets during the previous month (“Base Fee Rate”), plus or minus (2) a performance-fee adjustment (“Performance Adjustment”) calculated by applying a variable rate of up to 0.15% (positive or negative) to the Fund’s average daily net assets during the applicable performance measurement period, which is generally the previous 36 months.
The Fund’s prospectuses and statement(s) of additional information contain additional information about performance-based fees. The amount shown as advisory fees on the Statement of Operations reflects the Base Fee Rate plus/minus any Performance Adjustment. For the period ended March 31, 2016, the performance adjusted investment advisory fee rate before any waivers and/or reimbursements of expenses is 0.53%.
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, Class R Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate of 0.89%. Janus Capital has agreed to continue the waiver until at least February 1, 2017. If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund. Janus Services is not compensated for its services related to the shares, except for out-of-pocket costs. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the Transfer Agency Agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. The Funds’ Trustees have set limits on fees that the Funds may incur with respect to administrative fees paid for omnibus or networked accounts. Such limits are subject to change by the Trustees in the future. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class R Shares, Class S Shares, and Class T Shares for providing or procuring administrative services to investors in Class R Shares, Class S Shares, and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class R Shares, Class S Shares, and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class R Shares, Class S Shares, and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
30 | MARCH 31, 2016 |
Janus Contrarian Fund
Notes to Financial Statements (unaudited)
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares. In addition to the administrative fees discussed above, Janus Services receives reimbursement for out-of-pocket costs it incurs for serving as transfer agent and providing, or arranging for, servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, of up to 0.50% of the Class R Shares' average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund's Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $367,532 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2016. The Fund's portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of March 31, 2016 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended March 31, 2016 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $92,975 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2016.
Janus Investment Fund | 31 |
Janus Contrarian Fund
Notes to Financial Statements (unaudited)
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered product compliant with Rule 2a-7 under the 1940 Act. There are no restrictions on the Fund's ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Fund to Janus Cash Liquidity Fund LLC. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended March 31, 2016 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. During the period ended March 31, 2016, Janus Distributors retained upfront sales charges of $5,756.
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the period ended March 31, 2016.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended March 31, 2016, redeeming shareholders of Class C Shares paid CDSCs of $22,543.
The Fund is permitted to purchase or sell securities (“cross-trade”) between itself and other funds or accounts managed by Janus Capital Management LLC in accordance with Rule 17a-7 under the Investment Company Act of 1940 (“Rule 17a-7”), when the transaction is consistent with the investment objectives and policies of the Fund and in accordance with the Internal Cross Trade Procedures adopted by the Trust’s Board of Trustees. These procedures have been designed to ensure that any cross-trade of securities by the Fund from or to another fund or account that is or could be considered an affiliate of the Fund under certain limited circumstances by virtue of having a common investment adviser, common Officer, or common Trustee complies with Rule 17a-7. Under these procedures, each cross-trade is effected at the current market price to save costs where allowed. During the period ended March 31, 2016, the Fund engaged in cross trades amounting to $6,219,057 in purchases and $10,211,088 in sales, resulting in a net realized gain of $225,426. The net realized gain is included in “Investments and foreign currency transactions” within the “Net Realized and Unrealized Gain/(Loss) on Investments” section of the Fund’s Statement of Operations.
5. Federal Income Tax
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
32 | MARCH 31, 2016 |
Janus Contrarian Fund
Notes to Financial Statements (unaudited)
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of March 31, 2016 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals and investments in partnerships.
Federal Tax Cost | Unrealized | Unrealized | Net
Tax Appreciation/ |
$ 3,156,889,044 | $476,507,259 | $(418,239,957) | $ 58,267,302 |
Accumulated capital losses noted below represent net capital loss carryovers, as of September 30, 2015, that may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. Under the Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. Losses incurred during those years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may more likely expire unused. Also, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law. The following table shows these capital loss carryovers.
Capital Loss Carryover Schedule | ||||||
For the year ended September 30, 2015 | ||||||
September 30, 2016 | September 30, 2017 | September 30, 2018 | September 30, 2019 | Accumulated Capital Losses | ||
| $ (7,198,961) | $ (8,936,372) | $ (2,708,558) | $ (922,145) | $ (19,766,036)(1) | |
(1) Capital loss carryovers subject to annual limitations, $(7,198,961) should be available in the next fiscal year. | (2) | |||||
6. Capital Share Transactions
Period ended March 31, 2016 | Year ended September 30, 2015 | |||||
Shares | Amount | Shares | Amount | |||
Class A Shares: | ||||||
Shares sold | 574,033 | $ 10,502,886 | 4,328,532 | $ 95,310,349 | ||
Reinvested dividends and distributions | 121,124 | 2,208,084 | 454,763 | 9,572,764 | ||
Shares repurchased | (2,090,223) | (38,510,174) | (2,537,098) | (53,562,554) | ||
Net Increase/(Decrease) | (1,395,066) | $ (25,799,204) |
| 2,246,197 | $ 51,320,559 | |
Class C Shares: | ||||||
Shares sold | 464,301 | $ 8,185,016 | 2,955,952 | $ 62,518,718 | ||
Reinvested dividends and distributions | 80,035 | 1,396,608 | 255,222 | 5,181,008 | ||
Shares repurchased | (1,535,450) | (26,663,816) | (1,364,615) | (27,465,611) | ||
Net Increase/(Decrease) | (991,114) | $ (17,082,192) |
| 1,846,559 | $ 40,234,115 | |
Class D Shares: | ||||||
Shares sold | 1,195,365 | $ 21,433,535 | 4,541,384 | $ 101,236,729 | ||
Reinvested dividends and distributions | 3,252,611 | 59,425,188 | 11,167,167 | 235,738,914 | ||
Shares repurchased | (5,803,351) | (104,894,113) | (12,474,525) | (269,100,559) | ||
Net Increase/(Decrease) | (1,355,375) | $ (24,035,390) |
| 3,234,026 | $ 67,875,084 | |
Class I Shares: | ||||||
Shares sold | 1,699,861 | $ 31,210,097 | 11,409,254 | $ 251,348,489 | ||
Reinvested dividends and distributions | 221,663 | 4,049,784 | 1,232,358 | 26,015,077 | ||
Shares repurchased | (7,515,218) | (139,239,392) | (13,498,641) | (284,664,278) | ||
Net Increase/(Decrease) | (5,593,694) | $ (103,979,511) |
| (857,029) | $ (7,300,712) | |
Janus Investment Fund | 33 |
Janus Contrarian Fund
Notes to Financial Statements (unaudited)
Period ended March 31, 2016 | Year ended September 30, 2015 | ||||
Shares | Amount | Shares | Amount | ||
Class R Shares: | |||||
Shares sold | 7,734 | $ 136,895 | 39,351 | $ 849,778 | |
Reinvested dividends and distributions | 2,077 | 37,291 | 9,096 | 189,010 | |
Shares repurchased | (31,435) | (556,811) | (48,708) | (1,038,589) | |
Net Increase/(Decrease) | (21,624) | $ (382,625) |
| (261) | $ 199 |
Class S Shares: | |||||
Shares sold | 14,929 | $ 269,650 | 92,915 | $ 2,090,669 | |
Reinvested dividends and distributions | 6,541 | 119,374 | 36,195 | 762,269 | |
Shares repurchased | (30,373) | (551,346) | (157,193) | (3,279,495) | |
Net Increase/(Decrease) | (8,903) | $ (162,322) |
| (28,083) | $ (426,557) |
Class T Shares: | |||||
Shares sold | 1,559,764 | $ 28,187,024 | 12,140,037 | $ 268,934,176 | |
Reinvested dividends and distributions | 1,429,272 | 26,112,797 | 6,219,280 | 131,226,809 | |
Shares repurchased | (8,134,765) | (147,514,878) | (24,349,648) | (528,927,247) | |
Net Increase/(Decrease) | (5,145,729) | $ (93,215,057) |
| (5,990,331) | $(128,766,262) |
7. Purchases and Sales of Investment Securities
For the period ended March 31, 2016, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) was as follows:
Purchases of | Proceeds from Sales | Purchases of Long- | Proceeds from Sales |
$718,119,936 | $1,121,787,599 | $ - | $ - |
8. Subsequent Event
Management has evaluated whether any events or transactions occurred subsequent to March 31, 2016 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
34 | MARCH 31, 2016 |
Janus Contrarian Fund
Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (toll free); (ii) on the Fund’s website at janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding the Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through janus.com/proxyvoting and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Fund files its complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Fund’s Form N-Q: (i) is available on the SEC’s website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-0020 (toll free).
APPROVAL OF ADVISORY AGREEMENTS DURING THE PERIOD
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 9, 2015, based on the Trustees’ evaluation of the information provided by Janus Capital, the subadvisers, and the independent fee consultant, as well as other information, the Trustees determined that the overall arrangements between each Fund and Janus Capital and each subadviser, as applicable, were fair and reasonable in light of the nature, extent and quality of the services provided by Janus Capital, its affiliates and the subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting, the Trustees unanimously approved the continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, for the period from either January 1 or February 1, 2016 through January 1 or February 1, 2017, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee
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Janus Contrarian Fund
Additional Information (unaudited)
for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed a number of institutional competitive advantages that should enable it to provide superior investment and service performance over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has been strong: for the 36 months ended September 30, 2015, approximately 70% of the Funds were in the top two Broadridge quartiles of performance, and for the 12 months ended September 30, 2015, approximately 61% of the Funds were in the top two Broadridge quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
· For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Unconstrained Bond Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history.
· For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Multi-Sector Income Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
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Janus Contrarian Fund
Additional Information (unaudited)
· For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance.
· For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance.
Asset Allocation Funds
· For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
Alternative Fund
· For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 12 months ended May 31, 2015.
Value Funds
· For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 12 months ended May 31, 2015.
· For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital and Perkins had taken or were taking to improve performance, and that the performance trend was improving.
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Janus Contrarian Fund
Additional Information (unaudited)
· For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital and Perkins had taken or were taking to improve performance, and that the performance trend was improving.
· For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
Mathematical Funds
· For INTECH Emerging Markets Managed Volatility Fund, the Trustees noted that, due to limited performance for the Fund, performance history was not a material factor.
· For INTECH Global Income Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
· For INTECH International Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital and INTECH had taken or were taking to improve performance.
· For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
· For INTECH U.S. Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
Growth and Core Funds
· For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and in the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Research Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
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Janus Contrarian Fund
Additional Information (unaudited)
· For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
Global and International Funds
· For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance.
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Janus Contrarian Fund
Additional Information (unaudited)
Janus Aspen Series
· For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Global Unconstrained Bond Portfolio, the Trustees noted that, due to limited performance for the Fund, performance history was not a material factor.
· For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory and subadvisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by Broadridge, an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers,
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Janus Contrarian Fund
Additional Information (unaudited)
was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
The independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 14% below the mean total expenses of their respective Broadridge Expense Group peers and 24% below the mean total expenses for their Broadridge Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 19% below the mean for their Expense Universes; and (4) Fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered the total expenses for each share class of each Fund compared to the mean total expenses for its Broadridge Expense Group peers and to mean total expenses for its Broadridge Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees, breakpoints, and expense waivers on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks and other costs that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) by one estimation methodology, the fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to the estimated fee margins in the industry and relative to estimated fee margins of fund managers using Janus Capital as a subadviser.
The Trustees considered the fees for each Fund for its fiscal year ended in 2014, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
· For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
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Janus Contrarian Fund
Additional Information (unaudited)
· For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Global Unconstrained Bond Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Multi-Sector Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus has contractually agreed to limit the Fund’s expenses.
· For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield.
· For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield.
Asset Allocation Funds
· For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Global Allocation Fund – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
Alternative Fund
· For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
Value Funds
· For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Perkins Global Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable.
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Janus Contrarian Fund
Additional Information (unaudited)
· For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Perkins Value Plus Income Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital had contractually agreed to limit the Fund’s expenses.
Mathematical Funds
· For INTECH Emerging Markets Managed Volatility Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For INTECH Global Income Managed Volatility Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For INTECH International Managed Volatility Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital had contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For INTECH U.S. Core Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For INTECH U.S. Managed Volatility Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for one share class. The Trustees also noted that Janus Capital had contractually agreed to limit the Fund’s expenses.
Growth and Core Funds
· For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Forty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
Janus Investment Fund | 43 |
Janus Contrarian Fund
Additional Information (unaudited)
· For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Venture Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
Global and International Funds
· For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Emerging Markets Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Global Select Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
Janus Aspen Series
· For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
44 | MARCH 31, 2016 |
Janus Contrarian Fund
Additional Information (unaudited)
· For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Flexible Bond Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital had contractually agreed to limit the Fund’s expenses.
· For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Global Allocation Portfolio - Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Global Unconstrained Bond Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital had contractually agreed to limit the Fund’s expenses.
· For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for its sole share class.
· For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
The Trustees reviewed information on the profitability to Janus Capital and its affiliates of their relationships with each Fund, as well as an explanation of the methodology utilized by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with the Funds and other clients. The Trustees also reviewed the financial statements and corporate structure of Janus Capital’s parent company. In their review, the Trustees considered whether Janus Capital and each subadviser receive adequate incentives and resources to manage the Funds effectively. The Trustees recognized that profitability comparisons among fund managers are difficult because very little comparative information is publicly available, and the profitability of any fund manager is affected by numerous factors, including the organizational structure of the particular fund manager, the types of funds and other accounts it manages, possible other lines of business, the methodology for allocating expenses, and the fund manager’s capital structure and cost of capital. However, taking into account those factors and the analysis provided by the Trustees’ independent fee consultant, and based on the information available, the Trustees concluded that Janus Capital’s profitability with respect to each Fund in relation to the services rendered was reasonable.
The independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
The Trustees concluded that the management fees payable by each Fund to Janus Capital and its affiliates, as well as the fees paid by Janus Capital to the subadvisers of subadvised Funds, were reasonable in relation to the nature, extent, and quality of the services provided, taking into account the fees charged by other advisers for managing comparable mutual funds with similar strategies, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services
Janus Investment Fund | 45 |
Janus Contrarian Fund
Additional Information (unaudited)
provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of the Funds increase. They noted that their independent fee consultant provided an analysis of economies of scale, which included discussion of analysis from prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, their independent fee consultant concluded that 85% of these Funds have contractual management fees (gross of waivers) below their Broadridge expense group averages and, overall, 80% of the Funds are below their respective expense group averages for contractual management fees. They also noted that for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of some of the Funds have declined in the past few years, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
The independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, its analyses could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or Janus Capital, and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
46 | MARCH 31, 2016 |
Janus Contrarian Fund
Useful Information About Your Fund Report (unaudited)
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2016. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
Performance Overviews
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices. When comparing the performance of the Fund with an index, keep in mind that market indices are not available for investment and do not reflect deduction of expenses.
Average annual total returns are quoted for a Fund with more than one year of performance history. 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 redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
Schedule of Investments
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
Statement of Assets and Liabilities
This statement is often referred to as the “balance sheet.” It lists the assets and liabilities of the Fund on the last day of the reporting period.
Janus Investment Fund | 47 |
Janus Contrarian Fund
Useful Information About Your Fund Report (unaudited)
The Fund’s assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. 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’s net assets. Because the Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, 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/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. Also included are ratios of expenses and net investment income to average net assets.
48 | MARCH 31, 2016 |
Janus Contrarian Fund
Useful Information About Your Fund Report (unaudited)
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio manager(s) and/or investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal 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 entire portfolio is traded every six months.
Janus Investment Fund | 49 |
Janus provides access to a wide range of investment disciplines.
Alternative
Janus alternative funds seek to deliver strong risk-adjusted returns over a full market cycle with lower correlation to equity markets than traditional investments.
Asset Allocation
Janus’ asset allocation funds utilize our fundamental, bottom-up research to balance risk over the long term. From fund options that meet investors’ risk tolerance and objectives to a method that incorporates non-traditional investment choices to seek non-correlated sources of risk and return, Janus’ asset allocation funds aim to allocate risk more effectively.
Fixed Income
Janus fixed income funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek capital preservation and liquidity with current income as a secondary objective.
Global & International
Janus global and international 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.
Growth & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical funds seek to outperform their respective indices while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH® (a Janus subsidiary), these funds use a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Our value funds, managed by Perkins® (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
For more information about our funds, contact your investment professional or go to janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus).
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Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary prospectus containing this and other information, please call Janus at 877.33JANUS (52687) (or 800.525.3713 if you hold Shares directly with Janus); or download the file from janus.com/info (or janus.com/reports if you hold Shares directly with Janus). Read it carefully before you invest or send money. | ||||||||||||
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC. Funds distributed by Janus Distributors LLC | ||||||||||||
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | |||||||||
C-0516-1627 | 125-24-93038 05-16 | |||||||||||
SEMIANNUAL REPORT March 31, 2016 | |||
Janus Emerging Markets Fund | |||
Janus Investment Fund | |||
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HIGHLIGHTS · Portfolio management perspective · Investment strategy behind your fund · Fund performance, characteristics | |||
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Table of Contents
Janus Emerging Markets Fund
Janus Emerging Markets Fund (unaudited)
PERFORMANCE
Janus Emerging Markets Fund’s Class I Shares returned 6.28% for the six-month period ended March 31, 2016. The Fund’s benchmark, the MSCI Emerging Markets Index, returned 6.41%.
MARKET ENVIRONMENT
During the latter part of 2015, emerging market (EM) stocks took a beating, in part on concerns about growth in China – the world’s second-largest economy – and also due to foreign currency headwinds as global investors redirected capital toward the U.S. in expectation of a period of rising interest rates. This trend reversed as consensus coalesced around the idea that the Federal Reserve (Fed) would be much less aggressive in raising rates than it had previously inferred. The shift increased demand for EM government debt, largely due to the highly attractive yield differentials when compared to developed market sovereigns. The clamoring for currencies to purchase EM financial assets resulted in many currencies appreciating steadily, further boosting stock returns when priced in U.S. dollars.
As sentiment – and flows – reversed, many EM stock indices rallied and ultimately delivered returns that outpaced the broader market. Among the strongest performers were Indonesia, Brazil and Malaysia. While they stabilized after the early period descent, mainland Chinese shares were unable to make up all the lost ground and finished the period just in negative territory. Also lagging in the rebound was another EM economic powerhouse, India. On a sector basis, previously hard-hit energy and materials led sectors higher while industrials and telecommunications stocks, while still positive, lagged the broader EM universe.
PERFORMANCE DISCUSSION
On a country basis, the Fund’s holdings in Brazil and Turkey, and on a sector basis, materials and energy, weighed on relative returns. Our selection of Chinese and Indian stocks contributed to relative performance, as did our selection of financials stocks. A combination of an overweight to technology along with strong stock selection in the sector also aided relative results.
Being the country’s largest insurance group, China Life Insurance weighed on results, largely as a consequence of it being caught up in the region’s market volatility. Although premium sales have experienced some near-term headwinds, the long-term growth outlook is more optimistic given the current low penetration of insurance products within the country.
A cut in orders from Apple hurt electronic components supplier Catcher Technology. The company is an integral part of Apple’s supply chain with roughly half of its sales attributable to the phone and computer giant. While lower orders hurt Catcher’s stock price, what was overlooked is how the company has gained market share across its lines of business. Also making the stock attractive to us is management’s commitment to curtail capital expenditure, preferring instead to grow free cash flow, which may be used, in part, to increase its dividend.
Also delivering negative returns was Daqin Railway. The company mainly provides coal transportation service in northern China. It also operates a passenger transportation business. We exited our position in Daqin during the period.
Taiwan Semiconductor (TSMC) shrugged off any concern about softness in Apple’s supply chain to deliver a relatively favorable earnings report, which covered the first part of the period. For 2015, revenues grew by 10.6%, which can be considered an achievement given the challenging market environment. While the company sees the markets for many of its products declining, it does expect smartphone units to rise by 8% in 2016. On a longer time horizon, TSMC expects to gain market share by introducing high-demand, cutting-edge technologies,
Janus Investment Fund | 1 |
Janus Emerging Markets Fund (unaudited)
including those based on increasingly powerful yet energy efficient transistors.
Samsung of Korea was a solid contributor to Fund performance. Sales for the company’s newest smartphone – the Galaxy 7 – has been better-than-expected and the handset has received favorable reviews. We see the real possibility that sales data for this product will beat guidance over the near term. Buttressing the launch is fairly weak competition in the Android market for higher-end devices.
Another leading contributor was China’s Tencent Holding. Among other products, the company provides a word-chat SMS service that also enables sending pictures. The company has been expanding into Singapore, Taiwan and Hong Kong and has experienced impressive user growth. Seventy percent of revenue is from smartphone games. This channel has become especially lucrative as Tencent gets 70% of game revenue and the supplier receives only 30%. Profitability has improved and earnings continue to grow – even from a relatively high base – due to effective monetization.
Please see the Derivative instruments section in the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
OUTLOOK
There are many reasons to favor EM stocks as we forge deeper into 2016. Much of the boost provided by recently appreciating currencies may be behind us, but we still see some additional gains as global interest rate differentials – mainly between developed market funding currencies and attractive emerging market destinations – become more solidified over the course of the year. We are in the camp that sees global growth continuing to decelerate, but not to the degree that it had in 2015. We think Chinese GDP growth landing at the midpoint of official targets, roughly around 6.7%, is entirely plausible. The mix of this growth is important, too, as a shift in emphasis back toward infrastructure and housing stands to boost exports from the region’s materials producers to their massive trading partner.
We have long favored secular growth stories in China that are linked to the expanding consumer class. This is why we prefer autos and Internet names. At present, we also are sanguine about the prospects of more cyclical sectors such as steel, as recent industrial weakness has largely played out. Easier financing for capital equipment should help a recovery in the sector. Added to this are the attractive valuations that the past three quarters’ downdrafts have brought investors.
Given the abysmal state of the Brazilian economy, we had been underweight the country. Growth was negative in 2015 and is expected to be so this year as well. We were also concerned about political risk. Yet as the potential of President Rousseff’s impeachment increased – and the prospects for a market-oriented government to replace the current administration grew – we began to shift our positioning to capture potential upside. We do not underestimate the challenges slow growth, high inflation and a burdensome state apparatus pose upon the country, but the huge earnings potential for certain mismanaged corporates under the current administration should reforms be implemented, merit our cautious optimism.
Thank you for your investment in Janus Emerging Markets Fund.
2 | MARCH 31, 2016 |
Janus Emerging Markets Fund (unaudited)
Fund At A Glance
March 31, 2016
5 Top Performers - Holdings |
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Contribution | Contribution | |||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 0..96% | China Life Insurance Co., Ltd. - Class H | -0.36% | |||
Samsung Electronics Co., Ltd. | 0.96% | Suzano Papel e Celulose SA | -0.36% | |||
Tencent Holdings, Ltd. | 0.54% | Ulusoy Elektrik Imalat Taahhut Ve Ticaret AS | -0.30% | |||
Alibaba Group Holding, Ltd. (ADR) | 0.38% | Daqin Railway Co., Ltd. - Class A | -0.25% | |||
Sberbank of Russia PJSC (ADR) | 0.37% | Catcher Technology Co., Ltd. | -0.24% | |||
5 Top Performers - Sectors* |
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Fund Weighting | MSCI Emerging Markets Index℠ | |||||
Fund Contribution | (Average % of Equity) | Weighting | ||||
Financials | 1.82% | 27.88% | 27.90% | |||
Information Technology | 0.58% | 25.81% | 19.99% | |||
Consumer Staples | 0.38% | 6.67% | 8.48% | |||
Other** | 0.27% | 6.26% | 0.00% | |||
Telecommunication Services | 0.22% | 3.34% | 7.01% | |||
5 Bottom Performers - Sectors* |
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Fund Weighting | MSCI Emerging Markets Index℠ | |||||
Fund Contribution | (Average % of Equity) | Weighting | ||||
Materials | -0.82% | 2.52% | 6.31% | |||
Energy | -0.67% | 3.20% | 7.43% | |||
Health Care | -0.11% | 2.12% | 2.86% | |||
Industrials | -0.10% | 5.66% | 7.06% | |||
Consumer Discretionary | 0.01% | 14.14% | 9.76% | |||
Security contribution to performance is measured by using an algorithm that multiplies the daily performance of each security with the previous day’s ending weight in the portfolio and is gross of advisory fees. Fixed income securities and certain equity securities, such as private placements and some share classes of equity securities, are excluded. | ||||||
* | Based on sector classification according to the Global Industry Classification Standard (“GICS”) codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |||||
** | Not a GICS classified sector. | |||||
Janus Investment Fund | 3 |
Janus Emerging Markets Fund (unaudited)
Fund At A Glance
March 31, 2016
5 Largest Equity Holdings - (% of Net Assets) | |
Samsung Electronics Co., Ltd. | |
Technology Hardware, Storage & Peripherals | 4.6% |
Taiwan Semiconductor Manufacturing Co., Ltd. | |
Semiconductor & Semiconductor Equipment | 4.0% |
Tencent Holdings, Ltd. | |
Internet Software & Services | 3.1% |
Chongqing Changan Automobile Co., Ltd. - Class B | |
Automobiles | 2.0% |
SK Hynix, Inc. | |
Semiconductor & Semiconductor Equipment | 2.0% |
15.7% | |
Asset Allocation - (% of Net Assets) | |||||
Common Stocks | 94.4% | ||||
Investment Companies | 3.3% | ||||
Preferred Stocks | 1.0% | ||||
OTC Purchased Options – Calls | 0.1% | ||||
Warrants | 0.0% | ||||
Other | 1.2% | ||||
100.0% | |||||
Emerging markets comprised 87.0% of total net assets.
Top Country Allocations - Long Positions - (% of Investment Securities) | |
As of March 31, 2016
| As of September 30, 2015
|
4 | MARCH 31, 2016 |
Janus Emerging Markets Fund (unaudited)
Performance
See important disclosures on the next page. |
| Expense Ratios - | |||||||||
Average Annual Total Return - for the periods ended March 31, 2016 |
|
| per the January 28, 2016 prospectuses | |||||||
|
| Fiscal
| One
| Five | Since |
|
| Total
Annual Fund | Net Annual Fund
| |
Class A Shares at NAV |
| 6.01% | -10.08% | -4.67% | -4.27% |
|
| 1.98% | 1.68% | |
Class A Shares at MOP |
| -0.13% | -15.21% | -5.80% | -5.34% |
|
|
|
| |
Class C Shares at NAV | 5.78% | -10.71% | -5.35% | -4.92% |
|
| 2.77% | 2.44% | ||
Class C Shares at CDSC |
| 4.78% | -11.61% | -5.35% | -4.92% |
|
|
|
| |
Class D Shares(1) |
| 6.25% | -9.81% | -4.46% | -4.07% |
|
| 1.68% | 1.38% | |
Class I Shares |
| 6.28% | -9.63% | -4.32% | -3.93% |
|
| 1.56% | 1.25% | |
Class S Shares |
| 6.01% | -9.67% | -4.62% | -4.22% |
|
| 2.01% | 1.75% | |
Class T Shares |
| 6.16% | -9.88% | -4.51% | -4.12% |
|
| 1.79% | 1.51% | |
MSCI Emerging Markets Index℠ |
| 6.41% | -12.03% | -4.13% | -3.15% |
|
|
|
| |
Morningstar Quartile - Class I Shares |
| - | 2nd | 3rd | 3rd |
|
|
|
| |
Morningstar Ranking - based on total returns for Diversified Emerging Markets Funds |
| - | 279/880 | 293/496 | 305/471 |
|
|
|
| |
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through February 1, 2017.
Janus Investment Fund | 5 |
Janus Emerging Markets Fund (unaudited)
Performance
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility, lower liquidity and differing financial and information reporting standards, all of which are magnified in emerging markets.
The Fund will normally invest at least 80% of its net assets, measured at the time of purchase, in the type of securities described by its name.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
See Financial Highlights for actual expense ratios during the reporting period.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2016 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
Effective February 1, 2016, Hiroshi Yoh is sole Portfolio Manager of the Fund.
*The Fund’s inception date – December 28, 2010
(1) Closed to certain new investors.
6 | MARCH 31, 2016 |
Janus Emerging Markets Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, 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 appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Actual | Hypothetical | |||||||||
| Beginning | Ending | Expenses |
| Beginning | Ending | Expenses | Net Annualized | ||
Class A Shares | $1,000.00 | $1,060.10 | $8.70 |
| $1,000.00 | $1,016.55 | $8.52 | 1.69% | ||
Class C Shares | $1,000.00 | $1,057.80 | $12.40 |
| $1,000.00 | $1,012.95 | $12.13 | 2.41% | ||
Class D Shares | $1,000.00 | $1,062.50 | $7.27 |
| $1,000.00 | $1,017.95 | $7.11 | 1.41% | ||
Class I Shares | $1,000.00 | $1,062.80 | $6.76 |
| $1,000.00 | $1,018.45 | $6.61 | 1.31% | ||
Class S Shares | $1,000.00 | $1,060.10 | $8.96 |
| $1,000.00 | $1,016.30 | $8.77 | 1.74% | ||
Class T Shares | $1,000.00 | $1,061.60 | $7.73 |
| $1,000.00 | $1,017.50 | $7.57 | 1.50% | ||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. | |||||||||
Janus Investment Fund | 7 |
Janus Emerging Markets Fund
Schedule of Investments (unaudited)
March 31, 2016
Shares
or | Value | ||||||
Common Stocks – 94.4% | |||||||
Airlines – 0.7% | |||||||
China Eastern Airlines Corp., Ltd.* | 408,000 | $228,797 | |||||
Wizz Air Holdings PLC (144A)* | 4,522 | 119,547 | |||||
348,344 | |||||||
Auto Components – 0.5% | |||||||
Hyundai Mobis Co., Ltd. | 1,349 | 293,774 | |||||
Automobiles – 5.4% | |||||||
Astra International Tbk PT | 750,100 | 410,277 | |||||
Chongqing Changan Automobile Co., Ltd. - Class B | 583,700 | 1,093,342 | |||||
Great Wall Motor Co., Ltd. - Class H | 332,500 | 270,043 | |||||
Hyundai Motor Co. | 4,110 | 548,168 | |||||
Mahindra & Mahindra, Ltd. | 14,007 | 256,100 | |||||
Yulon Motor Co., Ltd. | 384,157 | 373,078 | |||||
2,951,008 | |||||||
Beverages – 3.6% | |||||||
Arca Continental SAB de CV | 90,200 | 623,637 | |||||
Coca-Cola Icecek A/S | 12,171 | 177,583 | |||||
Fomento Economico Mexicano SAB de CV | 73,900 | 713,596 | |||||
Vina Concha y Toro SA | 261,061 | 454,341 | |||||
1,969,157 | |||||||
Capital Markets – 1.9% | |||||||
Atlas Mara, Ltd.* | 47,062 | 230,604 | |||||
CITIC Securities Co., Ltd. - Class H | 198,500 | 465,216 | |||||
Haitong International Securities Group, Ltd. | 587,609 | 339,365 | |||||
1,035,185 | |||||||
Commercial Banks – 16.3% | |||||||
Axis Bank, Ltd. | 94,511 | 633,927 | |||||
Banco do Brasil SA | 130,000 | 714,910 | |||||
Bangkok Bank PCL (NVDR) | 56,300 | 288,143 | |||||
Bank Mandiri Persero Tbk PT | 564,700 | 438,809 | |||||
Bank of China, Ltd. - Class H | 660,000 | 273,968 | |||||
China Construction Bank Corp. - Class H | 1,697,000 | 1,082,898 | |||||
Erste Group Bank AG | 9,034 | 253,865 | |||||
Grupo Financiero Banorte SAB de CV | 90,900 | 512,706 | |||||
Hana Financial Group, Inc. | 35,320 | 766,080 | |||||
Industrial & Commercial Bank of China, Ltd. - Class H | 1,779,000 | 995,328 | |||||
Itau Unibanco Holding SA (ADR)# | 99,094 | 851,217 | |||||
Komercni Banka A/S | 597 | 131,953 | |||||
Metropolitan Bank & Trust Co. | 140,961 | 252,547 | |||||
OTP Bank PLC | 5,843 | 146,820 | |||||
Sberbank of Russia PJSC (ADR) | 91,359 | 635,859 | |||||
Shinhan Financial Group Co., Ltd. | 21,857 | 774,190 | |||||
Turkiye Halk Bankasi A/S | 35,333 | 131,393 | |||||
8,884,613 | |||||||
Construction & Engineering – 0.3% | |||||||
Louis XIII Holdings, Ltd.* | 502,186 | 137,894 | |||||
Construction Materials – 0.5% | |||||||
BBMG Corp. - Class H | 378,500 | 292,276 | |||||
Diversified Financial Services – 1.3% | |||||||
BM&FBovespa SA | 90,100 | 385,463 | |||||
FirstRand, Ltd. | 91,760 | 300,835 | |||||
686,298 | |||||||
Diversified Telecommunication Services – 1.5% | |||||||
China Telecom Corp., Ltd. - Class H | 495,693 | 261,998 | |||||
KT Corp. | 10,380 | 270,530 | |||||
Singapore Telecommunications, Ltd. | 102,200 | 289,725 | |||||
822,253 | |||||||
Electric Utilities – 1.5% | |||||||
Power Grid Corp. of India, Ltd. | 236,013 | 495,781 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
8 | MARCH 31, 2016 |
Janus Emerging Markets Fund
Schedule of Investments (unaudited)
March 31, 2016
Shares
or | Value | ||||||
Common Stocks – (continued) | |||||||
Electric Utilities – (continued) | |||||||
Tenaga Nasional Bhd | 94,000 | $336,248 | |||||
832,029 | |||||||
Electrical Equipment – 0.3% | |||||||
Finolex Cables, Ltd. | 35,967 | 152,738 | |||||
Electronic Equipment, Instruments & Components – 5.0% | |||||||
Chroma ATE, Inc. | 97,000 | 208,602 | |||||
Delta Electronics, Inc. | 94,358 | 416,397 | |||||
Hangzhou Hikvision Digital Technology Co., Ltd.ß | 97,900 | 466,522 | |||||
Hon Hai Precision Industry Co., Ltd. | 226,454 | 596,784 | |||||
Largan Precision Co., Ltd. | 6,000 | 465,225 | |||||
TPK Holding Co., Ltd. | 105,000 | 228,417 | |||||
WPG Holdings, Ltd. | 333,000 | 354,960 | |||||
2,736,907 | |||||||
Food & Staples Retailing – 1.1% | |||||||
Robinsons Retail Holdings, Inc. | 199,510 | 320,811 | |||||
X5 Retail Group NV (GDR)* | 12,095 | 256,414 | |||||
577,225 | |||||||
Food Products – 2.1% | |||||||
AVI, Ltd. | 24,981 | 147,105 | |||||
Marfrig Global Foods SA* | 255,500 | 461,250 | |||||
San Miguel Pure Foods Co., Inc. | 104,990 | 396,964 | |||||
Ulker Biskuvi Sanayi A/S | 19,217 | 142,652 | |||||
1,147,971 | |||||||
Health Care Providers & Services – 0.4% | |||||||
Integrated Diagnostics Holdings PLC (144A) | 43,143 | 211,401 | |||||
Hotels, Restaurants & Leisure – 0.9% | |||||||
Genting Malaysia Bhd | 324,000 | 377,460 | |||||
Melco International Development, Ltd. | 96,000 | 133,658 | |||||
511,118 | |||||||
Household Durables – 1.4% | |||||||
Midea Group Co., Ltd. - Class Aß | 163,450 | 779,645 | |||||
Independent Power and Renewable Electricity Producers – 1.0% | |||||||
Beijing Jingneng Clean Energy Co., Ltd. - Class H | 1,688,105 | 539,699 | |||||
Industrial Conglomerates – 2.0% | |||||||
Bidvest Group, Ltd. | 11,420 | 288,718 | |||||
Seibu Holdings, Inc. | 33,069 | 699,700 | |||||
Shun Tak Holdings, Ltd. | 332,000 | 109,995 | |||||
1,098,413 | |||||||
Information Technology Services – 1.7% | |||||||
Cognizant Technology Solutions Corp. - Class A* | 11,290 | 707,883 | |||||
QIWI PLC (ADR)† | 7,095 | 102,807 | |||||
Samsung SDS Co., Ltd. | 628 | 96,117 | |||||
906,807 | |||||||
Insurance – 2.6% | |||||||
China Life Insurance Co., Ltd. - Class H | 220,000 | 542,832 | |||||
Hyundai Marine & Fire Insurance Co., Ltd. | 11,116 | 322,766 | |||||
Ping An Insurance Group Co. of China, Ltd. - Class H | 113,500 | 542,838 | |||||
1,408,436 | |||||||
Internet & Catalog Retail – 1.3% | |||||||
Ctrip.com International, Ltd. (ADR)* | 5,634 | 249,361 | |||||
JD.com, Inc. (ADR)*,# | 8,296 | 219,844 | |||||
MySale Group PLC*,ß | 371,950 | 207,505 | |||||
676,710 | |||||||
Internet Software & Services – 6.6% | |||||||
Alibaba Group Holding, Ltd. (ADR)*,†,# | 13,016 | 1,028,654 | |||||
Baidu, Inc. (ADR)* | 1,955 | 373,170 | |||||
NAVER Corp. | 786 | 437,889 | |||||
Rocket Internet SE* | 877 | 24,555 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 9 |
Janus Emerging Markets Fund
Schedule of Investments (unaudited)
March 31, 2016
Shares
or | Value | ||||||
Common Stocks – (continued) | |||||||
Internet Software & Services – (continued) | |||||||
Tencent Holdings, Ltd. | 83,400 | $1,703,028 | |||||
3,567,296 | |||||||
Marine – 0.8% | |||||||
First Steamship Co., Ltd. | 565,000 | 155,569 | |||||
SITC International Holdings Co., Ltd. | 549,000 | 271,064 | |||||
426,633 | |||||||
Media – 1.3% | |||||||
Naspers, Ltd. - Class N | 5,110 | 713,835 | |||||
Metals & Mining – 0.8% | |||||||
Hindustan Zinc, Ltd. | 63,599 | 176,340 | |||||
POSCO | 1,434 | 275,287 | |||||
451,627 | |||||||
Multiline Retail – 0.7% | |||||||
SACI Falabella | 34,880 | 243,780 | |||||
Woolworths Holdings, Ltd. | 21,489 | 130,606 | |||||
374,386 | |||||||
Oil, Gas & Consumable Fuels – 3.0% | |||||||
China Petroleum & Chemical Corp. - Class H | 406,600 | 266,800 | |||||
PetroChina Co., Ltd. - Class H | 550,000 | 365,858 | |||||
Petroleo Brasileiro SA (ADR)*,# | 120,700 | 704,888 | |||||
Reliance Industries, Ltd. | 18,928 | 298,766 | |||||
1,636,312 | |||||||
Pharmaceuticals – 2.2% | |||||||
China Traditional Chinese Medicine Co., Ltd.* | 337,132 | 165,587 | |||||
Yunnan Baiyao Group Co., Ltd. - Class Aß | 108,173 | 1,025,265 | |||||
1,190,852 | |||||||
Real Estate Management & Development – 4.3% | |||||||
Belle Corp. | 2,603,567 | 169,158 | |||||
Central China Real Estate, Ltd. | 1,566,794 | 298,933 | |||||
China Overseas Land & Investment, Ltd. | 90,000 | 284,836 | |||||
China Vanke Co., Ltd. - Class Aß | 77,700 | 241,985 | |||||
CSI Properties, Ltd. | 8,790,000 | 249,294 | |||||
Emaar Properties PJSC | 170,034 | 278,714 | |||||
Multiplan Empreendimentos Imobiliarios SA | 34,100 | 509,366 | |||||
Siam Future Development PCL | 1,646,240 | 278,508 | |||||
2,310,794 | |||||||
Road & Rail – 0.2% | |||||||
Globaltrans Investment PLC (GDR) | 27,133 | 117,350 | |||||
Semiconductor & Semiconductor Equipment – 6.8% | |||||||
Hua Hong Semiconductor, Ltd. (144A) | 451,226 | 450,813 | |||||
SK Hynix, Inc. | 44,203 | 1,088,258 | |||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 434,000 | 2,184,971 | |||||
3,724,042 | |||||||
Software – 0.5% | |||||||
Nexon Co., Ltd. | 17,200 | 293,316 | |||||
Specialty Retail – 1.5% | |||||||
L'Occitane International SA | 124,998 | 223,018 | |||||
PC Jeweller, Ltd. | 110,063 | 604,272 | |||||
827,290 | |||||||
Technology Hardware, Storage & Peripherals – 5.5% | |||||||
Catcher Technology Co., Ltd. | 60,000 | 492,262 | |||||
Samsung Electronics Co., Ltd. | 2,200 | 2,524,401 | |||||
3,016,663 | |||||||
Textiles, Apparel & Luxury Goods – 0.9% | |||||||
Belle International Holdings, Ltd. | 486,000 | 281,309 | |||||
Cie Financiere Richemont SA | 26,669 | 176,224 | |||||
457,533 | |||||||
Thrifts & Mortgage Finance – 1.9% | |||||||
Housing Development Finance Corp., Ltd. | 27,618 | 461,124 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
10 | MARCH 31, 2016 |
Janus Emerging Markets Fund
Schedule of Investments (unaudited)
March 31, 2016
Shares
or | Value | ||||||
Common Stocks – (continued) | |||||||
Thrifts & Mortgage Finance – (continued) | |||||||
LIC Housing Finance, Ltd. | 78,016 | $581,018 | |||||
1,042,142 | |||||||
Tobacco – 0.6% | |||||||
ITC, Ltd. | 64,518 | 319,825 | |||||
Transportation Infrastructure – 1.6% | |||||||
CCR SA | 112,700 | 439,828 | |||||
Shanghai International Airport Co., Ltd.ß | 95,800 | 445,702 | |||||
885,530 | |||||||
Wireless Telecommunication Services – 1.9% | |||||||
China Mobile, Ltd. | 93,500 | 1,042,023 | |||||
Total Common Stocks (cost $52,407,616) | 51,397,350 | ||||||
Preferred Stocks – 1.0% | |||||||
Technology Hardware, Storage & Peripherals – 1.0% | |||||||
Samsung Electronics Co., Ltd. (cost $555,386) | 591 | 572,186 | |||||
Warrants – 0% | |||||||
Capital Markets – 0% | |||||||
Atlas Mara, Ltd., expires 12/17/17 (144A)* (cost $21,535) | 69,975 | 6,998 | |||||
Investment Companies – 3.3% | |||||||
Investments Purchased with Cash Collateral from Securities Lending – 3.3% | |||||||
Janus Cash Collateral Fund LLC, 0.4107%ºº,£ (cost $1,811,136) | 1,811,136 | 1,811,136 | |||||
OTC Purchased Options – Calls – 0.1% | |||||||
Counterparty/Reference Asset | |||||||
Goldman Sachs International: | |||||||
CNH Currency, exercise price CNH 6.40, expires November 2016* (premiums paid $48,042) | 1,585,540 | 49,832 | |||||
Total Investments (total cost $54,843,715) – 98.8% | 53,837,502 | ||||||
Cash, Receivables and Other Assets, net of Liabilities – 1.2% | 631,381 | ||||||
Net Assets – 100% | $54,468,883 | ||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 11 |
Janus Emerging Markets Fund
Schedule of Investments (unaudited)
March 31, 2016
Summary of Investments by Country - (Long Positions) (unaudited) | |||||
% of | |||||
Investment | |||||
Country | Value | Securities | |||
China | $16,278,570 | 30.2 | % | ||
South Korea | 7,969,646 | 14.8 | |||
Taiwan | 5,476,265 | 10.2 | |||
Brazil | 4,066,922 | 7.6 | |||
India | 3,979,891 | 7.4 | |||
United States | 2,568,851 | 4.8 | |||
Mexico | 1,849,939 | 3.4 | |||
South Africa | 1,581,099 | 2.9 | |||
Hong Kong | 1,241,270 | 2.3 | |||
Philippines | 1,139,480 | 2.1 | |||
Russia | 1,112,430 | 2.1 | |||
Japan | 993,016 | 1.8 | |||
Indonesia | 849,086 | 1.6 | |||
Malaysia | 713,708 | 1.3 | |||
Chile | 698,121 | 1.3 | |||
United Kingdom | 656,508 | 1.2 | |||
Thailand | 566,651 | 1.1 | |||
Turkey | 451,628 | 0.8 | |||
Singapore | 289,725 | 0.5 | |||
United Arab Emirates | 278,714 | 0.5 | |||
Hungary | 266,367 | 0.5 | |||
Austria | 253,865 | 0.5 | |||
France | 223,018 | 0.4 | |||
Switzerland | 176,224 | 0.3 | |||
Czech Republic | 131,953 | 0.3 | |||
Germany | 24,555 | 0.1 | |||
Total | $53,837,502 | 100.0 | % |
Schedule of Foreign Currency Contracts, Open | ||||||||||||||||
Counterparty/ Currency | Settlement Date | Currency Units Sold | Currency Value | Unrealized Appreciation/ (Depreciation) | ||||||||||||
Credit Suisse International: | ||||||||||||||||
Japanese Yen | 5/12/16 | 105,501,000 | $ | 938,681 | $ | (60) | ||||||||||
Schedule of Total Return Swaps | |||||||||||
Unrealized | |||||||||||
Return Paid | Return Received | Termination | Notional | Appreciation/ | |||||||
Counterparty | by the Fund | by the Fund | Date | Amount | (Depreciation) | ||||||
Credit Suisse International | 1 month USD LIBOR plus 100 basis points | Saudi International Petrochemical Co. | 8/8/16 | $76,617 | $(4,803) | ||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
12 | MARCH 31, 2016 |
Janus Emerging Markets Fund
Notes to Schedule of Investments and Other Information (unaudited)
MSCI Emerging Markets IndexSM | A free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. |
ADR | American Depositary Receipt |
GDR | Global Depositary Receipt |
LIBOR | London Interbank Offered Rate |
LLC | Limited Liability Company |
NVDR | Non-Voting Depositary Receipt |
OTC | Over-the-Counter |
PCL | Public Company Limited |
PJSC | Private Joint Stock Company |
PLC | Public Limited Company |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. These securities have been determined to be liquid under guidelines established by the Board of Trustees. The total value of 144A securities as of the period ended March 31, 2016 is $788,759, which represents 1.4% of net assets. |
* | Non-income producing security. |
† | A portion of this security has been segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales, swap agreements, and/or securities with extended settlement dates, the value of which, as of March 31, 2016, is $569,997. |
ß | Security is illiquid. |
ºº | Rate shown is the 7-day yield as of March 31, 2016. |
# | Loaned security; a portion of the security is on loan at March 31, 2016. |
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. The following securities were considered affiliated companies for all or some portion of the period ended March 31, 2016. Unless otherwise indicated, all information in the table is for the period ended March 31, 2016. |
Share | Share | |||||||||||||
Balance | Balance | Realized | Dividend | Value | ||||||||||
at 9/30/15 | Purchases | Sales | at 3/31/16 | Gain/(Loss) | Income | at 3/31/16 | ||||||||
Janus Cash Collateral Fund LLC | 672,700 | 6,642,792 | (5,504,356) | 1,811,136 | $— | $4,504(1) | $1,811,136 | |||||||
Janus Cash Liquidity Fund LLC | 1,908,334 | 16,660,022 | (18,568,356) | — | — | 1,992 | — | |||||||
Total | $— | $6,496 | $1,811,136 | |||||||||||
(1) Net of income paid to the securities lending agent and rebates paid to the borrowing counterparties. | ||||||||||||||
Janus Investment Fund | 13 |
Janus Emerging Markets Fund
Notes to Schedule of Investments and Other Information (unaudited)
The following is a summary of the inputs that were used to value the Fund's investments in securities and other financial instruments as of March 31, 2016. See Notes to Financial Statements for more information. | |||
Valuation Inputs Summary | |||
| Level
1 - | Level 2 - | Level 3 - |
Assets | |||
Investments in Securities: | |||
Common Stocks | |||
Internet & Catalog Retail | $ 469,205 | $ 207,505 | $ - |
Real Estate Management & Development | 2,068,809 | - | 241,985 |
All Other | 48,409,846 | - | - |
Preferred Stocks | - | 572,186 | - |
Warrants | 6,998 | - | - |
Investment Companies | - | 1,811,136 | - |
OTC Purchased Options – Calls | - | 49,832 | - |
Total Assets | $ 50,954,858 | $ 2,640,659 | $ 241,985 |
Liabilities | |||
Other Financial Instruments(a): | |||
Forward Currency Contracts | $ - | $ 60 | $ - |
Outstanding Swap Contracts, at Value | 4,803 | ||
Total Liabilities | $ - | $ 4,863 | $ - |
(a) Other financial instruments include forward currency, futures, written options, and swap contracts. Forward currency contracts are reported at their unrealized appreciation/(depreciation) at measurement date, which represents the change in the contract's value from trade date. Futures are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date. Options and swap contracts are reported at their market value at measurement date. | |||
14 | MARCH 31, 2016 |
Janus Emerging Markets Fund
Statement of Assets and Liabilities (unaudited)
March 31, 2016
|
|
|
|
|
|
|
Assets: | ||||||
Investments, at cost | $ | 54,843,715 | ||||
Unaffiliated investments, at value(1) | 52,026,366 | |||||
Affiliated investments, at value | 1,811,136 | |||||
Restricted cash (Note 1) | 2,205,722 | |||||
Cash denominated in foreign currency(2) | 12,068 | |||||
Non-interested Trustees' deferred compensation | 1,044 | |||||
Receivables: | ||||||
Investments sold | 1,144,231 | |||||
Dividends | 96,583 | |||||
Fund shares sold | 33,492 | |||||
Foreign tax reclaims | 1,461 | |||||
Other assets | 6,185 | |||||
Total Assets |
|
| 57,338,288 |
| ||
Liabilities: | ||||||
Due to custodian | 56,430 | |||||
Collateral for securities loaned (Note 3) | 1,811,136 | |||||
Forward currency contracts | 60 | |||||
Outstanding swap contracts, at value | 4,803 | |||||
Closed foreign currency contracts | 8,587 | |||||
Payables: | — | |||||
Investments purchased | 836,422 | |||||
Fund shares repurchased | 35,233 | |||||
Advisory fees | 32,269 | |||||
Professional fees | 16,630 | |||||
Foreign tax liability | 12,126 | |||||
Transfer agent fees and expenses | 7,301 | |||||
Non-interested Trustees' deferred compensation fees | 1,044 | |||||
12b-1 Distribution and shareholder servicing fees | 514 | |||||
Fund administration fees | 424 | |||||
Non-interested Trustees' fees and expenses | 301 | |||||
Custodian fees | 155 | |||||
Accrued expenses and other payables | 45,970 | |||||
Total Liabilities |
|
| 2,869,405 |
| ||
Net Assets |
| $ | 54,468,883 |
| ||
See Notes to Financial Statements. | |
Janus Investment Fund | 15 |
Janus Emerging Markets Fund
Statement of Assets and Liabilities (unaudited)
March 31, 2016
|
|
|
|
|
|
|
Net Assets Consist of: | ||||||
Capital (par value and paid-in surplus) | $ | 62,273,308 | ||||
Undistributed net investment income/(loss) | (110,983) | |||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | (6,591,304) | |||||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation(3) | (1,102,138) | |||||
Total Net Assets |
| $ | 54,468,883 |
| ||
Net Assets - Class A Shares | $ | 268,759 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 35,456 | |||||
Net Asset Value Per Share(4) |
| $ | 7.58 |
| ||
Maximum Offering Price Per Share(5) |
| $ | 8.04 |
| ||
Net Assets - Class C Shares | $ | 280,066 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 37,356 | |||||
Net Asset Value Per Share(4) |
| $ | 7.50 |
| ||
Net Assets - Class D Shares | $ | 8,019,039 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,062,153 | |||||
Net Asset Value Per Share |
| $ | 7.55 |
| ||
Net Assets - Class I Shares | $ | 40,391,549 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,332,006 | |||||
Net Asset Value Per Share |
| $ | 7.58 |
| ||
Net Assets - Class S Shares | $ | 1,124,980 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 149,017 | |||||
Net Asset Value Per Share |
| $ | 7.55 |
| ||
Net Assets - Class T Shares | $ | 4,384,490 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 579,980 | |||||
Net Asset Value Per Share |
| $ | 7.56 |
| ||
(1) Includes $1,770,214 of securities on loan. See Note 3 in Notes to Financial Statements. (2) Includes cost of $12,068. (3) Includes $12,126 of foreign capital gains tax on investments. (4) Redemption price per share may be reduced for any applicable contingent deferred sales charge. (5) Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements. | |
16 | MARCH 31, 2016 |
Janus Emerging Markets Fund
Statement of Operations (unaudited)
For the period ended March 31, 2016
|
|
|
|
|
|
Investment Income: | |||||
| Dividends | $ | 261,558 | ||
Affiliated securities lending income, net | 4,504 | ||||
Dividends from affiliates | 1,992 | ||||
Other income | 3,781 | ||||
Foreign tax withheld | (36,250) | ||||
Total Investment Income |
| 235,585 |
| ||
Expenses: | |||||
Advisory fees | 270,548 | ||||
12b-1Distribution and shareholder servicing fees: | |||||
Class A Shares | 360 | ||||
Class C Shares | 1,364 | ||||
Class S Shares | 1,031 | ||||
Transfer agent administrative fees and expenses: | |||||
Class D Shares | 4,642 | ||||
Class S Shares | 1,031 | ||||
Class T Shares | 5,608 | ||||
Transfer agent networking and omnibus fees: | |||||
Class A Shares | 246 | ||||
Class C Shares | 164 | ||||
Class I Shares | 10,140 | ||||
Other transfer agent fees and expenses: | |||||
Class A Shares | 36 | ||||
Class C Shares | 50 | ||||
Class D Shares | 1,658 | ||||
Class I Shares | 1,140 | ||||
Class T Shares | 66 | ||||
Registration fees | 66,726 | ||||
Custodian fees | 32,778 | ||||
Professional fees | 28,361 | ||||
Accounting systems fee | 25,983 | ||||
Shareholder reports expense | 6,795 | ||||
Fund administration fees | 2,099 | ||||
Non-interested Trustees’ fees and expenses | 730 | ||||
Other expenses | 1,876 | ||||
Total Expenses |
| 463,432 |
| ||
Less: Excess Expense Reimbursement |
| (126,065) |
| ||
Net Expenses |
| 337,367 |
| ||
Net Investment Income/(Loss) |
| (101,782) |
| ||
Net Realized Gain/(Loss) on Investments: | |||||
Investments and foreign currency transactions | (5,137,792) | ||||
Swap contracts | (27,679) | ||||
Total Net Realized Gain/(Loss) on Investments |
| (5,165,471) |
| ||
Change in Unrealized Net Appreciation/Depreciation:(1) | |||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 7,759,643 | ||||
Swap contracts | 397 | ||||
Total Change in Unrealized Net Appreciation/Depreciation |
| 7,760,040 |
| ||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 2,492,787 |
| ||
(1) Includes change in unrealized appreciation/depreciation of $(12,126) due to foreign capital gains tax on investments. |
See Notes to Financial Statements. | |
Janus Investment Fund | 17 |
Janus Emerging Markets Fund
Statements of Changes in Net Assets
|
|
| Period
ended |
| Year ended | |||
Operations: | ||||||||
Net investment income/(loss) | $ | (101,782) | $ | 216,571 | ||||
Net realized gain/(loss) on investments | (5,165,471) | 1,077,411 | ||||||
Change in unrealized net appreciation/depreciation | 7,760,040 | (8,213,395) | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations |
| 2,492,787 |
|
| (6,919,413) | |||
Dividends and Distributions to Shareholders: | ||||||||
Class A Shares | — | (5,186) | ||||||
Class C Shares | — | (235) | ||||||
Class D Shares | (27,129) | (170,413) | ||||||
Class I Shares | (144,626) | (384,278) | ||||||
Class S Shares | (2,678) | (2,086) | ||||||
Class T Shares | (11,506) | (18,448) | ||||||
Net Decrease from Dividends and Distributions to Shareholders |
| (185,939) |
|
| (580,646) | |||
Capital Share Transactions: | ||||||||
Class A Shares | (19,914) | (31,768) | ||||||
Class C Shares | 45,333 | 167,355 | ||||||
Class D Shares | 4,595 | (1,374,947) | ||||||
Class I Shares | 11,241,487 | 9,891,943 | ||||||
Class S Shares | 1,013,579 | 11,146 | ||||||
Class T Shares | 139,998 | 3,961,843 | ||||||
Net Increase/(Decrease) from Capital Share Transactions |
| 12,425,078 |
|
| 12,625,572 | |||
Net Increase/(Decrease) in Net Assets |
| 14,731,926 |
|
| 5,125,513 | |||
Net Assets: | ||||||||
Beginning of period | 39,736,957 | 34,611,444 | ||||||
| End of period | $ | 54,468,883 |
| $ | 39,736,957 | ||
Undistributed Net Investment Income/(Loss) | $ | (110,983) |
| $ | 176,738 | |||
See Notes to Financial Statements. | |
18 | MARCH 31, 2016 |
Janus Emerging Markets Fund
Financial Highlights
Class A Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year or period ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011(1) | |||||
Net Asset Value, Beginning of Period |
| $7.15 |
|
| $8.61 |
|
| $8.23 |
|
| $7.99 |
|
| $7.41 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | (0.03)(2) | 0.02(2) | 0.15(2)(3) | 0.28 | 0.03 | (0.01) | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.46 | (1.35) | 0.39 | (0.01) | 0.62 | (2.58) | |||||||||||||||
Total from Investment Operations |
| 0.43 |
|
| (1.33) |
|
| 0.54 |
|
| 0.27 |
|
| 0.65 |
|
| (2.59) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | — | (0.13) | (0.16) | (0.03) | (0.04) | — | |||||||||||||||
Distributions (from capital gains) | — | — | — | — | (0.03) | — | |||||||||||||||
Total Dividends and Distributions |
| — |
|
| (0.13) |
|
| (0.16) |
|
| (0.03) |
|
| (0.07) |
|
| — |
| |||
Net Asset Value, End of Period | $7.58 | $7.15 | $8.61 | $8.23 | $7.99 | $7.41 | |||||||||||||||
Total Return* |
| 6.01% |
|
| (15.61)% |
|
| 6.71% |
|
| 3.34% |
|
| 8.78% |
|
| (25.90)% |
| |||
Net Assets, End of Period (in thousands) | $269 | $278 | $378 | $275 | $992 | $971 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $288 | $371 | $307 | $759 | $1,028 | $1,107 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 2.20% | 1.98% | 1.97% | 1.81% | 2.37% | 4.16% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.69% | 1.61% | 1.65% | 1.48% | 1.46% | 1.34% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | (0.77)% | 0.23% | 1.73%(3) | 0.06% | 0.47% | 0.81% | |||||||||||||||
Portfolio Turnover Rate | 52% | 131% | 59% | 138% | 136% | 160% | |||||||||||||||
1 | |||||||||||||||||||||
Class C Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year or period ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011(1) |
| ||||
Net Asset Value, Beginning of Period |
| $7.09 |
|
| $8.50 |
|
| $8.12 |
|
| $7.91 |
|
| $7.39 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | (0.05)(2) | (0.04)(2) | 0.11(2)(3) | (0.20) | (0.03) | (0.05) | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.46 | (1.35) | 0.36 | 0.41 | 0.62 | (2.56) | |||||||||||||||
Total from Investment Operations |
| 0.41 |
|
| (1.39) |
|
| 0.47 |
|
| 0.21 |
|
| 0.59 |
|
| (2.61) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | — | (0.02) | (0.09) | — | (0.04) | — | |||||||||||||||
Distributions (from capital gains) | — | — | — | — | (0.03) | — | |||||||||||||||
Total Dividends and Distributions |
| — |
|
| (0.02) |
|
| (0.09) |
|
| — |
|
| (0.07) |
|
| — |
| |||
Net Asset Value, End of Period | $7.50 | $7.09 | $8.50 | $8.12 | $7.91 | $7.39 | |||||||||||||||
Total Return* |
| 5.78% |
|
| (16.36)% |
|
| 5.85% |
|
| 2.65% |
|
| 7.98% |
|
| (26.10)% |
| |||
Net Assets, End of Period (in thousands) | $280 | $225 | $94 | $194 | $771 | $677 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $273 | $121 | $185 | $428 | $788 | $838 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 2.91% | 2.77% | 2.68% | 2.54% | 3.04% | 5.09% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 2.41% | 2.39% | 2.32% | 2.16% | 2.21% | 1.71%(4) | |||||||||||||||
Ratio of Net Investment Income/(Loss) | (1.45)% | (0.47)% | 1.32%(3) | (0.97)% | (0.27)% | 0.33% | |||||||||||||||
Portfolio Turnover Rate | 52% | 131% | 59% | 138% | 136% | 160% | |||||||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from December 28, 2010 (inception date) through September 30, 2011. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets include a special dividend from Strides Arcolab, Ltd. In December 2013. The impact of the special dividend to Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets is $0.08 and 0.94%, respectively. (4) Pursuant to a contractual agreement, Janus waived certain fees and expenses during the period. The Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets would have been 2.32% in 2011 without the waiver of these fees and expenses. |
See Notes to Financial Statements. | |
Janus Investment Fund | 19 |
Janus Emerging Markets Fund
Financial Highlights
Class D Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year or period ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011(1) | |||||
Net Asset Value, Beginning of Period |
| $7.13 |
|
| $8.58 |
|
| $8.24 |
|
| $8.00 |
|
| $7.42 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | (0.02)(2) | 0.04(2) | 0.19(2)(3) | 0.20 | 0.05 | (0.01) | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.47 | (1.35) | 0.37 | 0.09 | 0.60 | (2.59) | |||||||||||||||
Total from Investment Operations |
| 0.45 |
|
| (1.31) |
|
| 0.56 |
|
| 0.29 |
|
| 0.65 |
|
| (2.60) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.03) | (0.14) | (0.22) | (0.05) | (0.04) | — | |||||||||||||||
Distributions (from capital gains) | — | — | — | — | (0.03) | — | |||||||||||||||
Redemption fees | N/A | N/A | N/A | N/A | —(4) | 0.02 | |||||||||||||||
Total Dividends and Distributions |
| (0.03) |
|
| (0.14) |
|
| (0.22) |
|
| (0.05) |
|
| (0.07) |
|
| 0.02 |
| |||
Net Asset Value, End of Period | $7.55 | $7.13 | $8.58 | $8.24 | $8.00 | $7.42 | |||||||||||||||
Total Return* |
| 6.25% |
|
| (15.38)% |
|
| 6.98% |
|
| 3.56% |
|
| 8.76% |
|
| (25.80)% |
| |||
Net Assets, End of Period (in thousands) | $8,019 | $7,583 | $10,889 | $9,136 | $9,359 | $6,699 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $7,737 | $10,066 | $9,995 | $9,679 | $8,963 | $6,847 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.99% | 1.68% | 1.67% | 1.64% | 2.15% | 4.38% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.41% | 1.30% | 1.34% | 1.30% | 1.35% | 1.32%(5) | |||||||||||||||
Ratio of Net Investment Income/(Loss) | (0.47)% | 0.51% | 2.18%(3) | 0.61% | 0.66% | 0.91% | |||||||||||||||
Portfolio Turnover Rate | 52% | 131% | 59% | 138% | 136% | 160% | |||||||||||||||
Class I Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year or period ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011(1) |
| ||||
Net Asset Value, Beginning of Period |
| $7.16 |
|
| $8.61 |
|
| $8.27 |
|
| $8.01 |
|
| $7.41 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | (0.01)(2) | 0.05(2) | 0.20(2)(3) | 0.19 | 0.07 | (0.01) | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.46 | (1.35) | 0.38 | 0.11 | 0.60 | (2.58) | |||||||||||||||
Total from Investment Operations |
| 0.45 |
|
| (1.30) |
|
| 0.58 |
|
| 0.30 |
|
| 0.67 |
|
| (2.59) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.03) | (0.15) | (0.24) | (0.04) | (0.04) | — | |||||||||||||||
Distributions (from capital gains) | — | — | — | — | (0.03) | — | |||||||||||||||
Redemption fees | N/A | N/A | N/A | N/A | —(4) | —(4) | |||||||||||||||
Total Dividends and Distributions |
| (0.03) |
|
| (0.15) |
|
| (0.24) |
|
| (0.04) |
|
| (0.07) |
|
| — |
| |||
Net Asset Value, End of Period | $7.58 | $7.16 | $8.61 | $8.27 | $8.01 | $7.41 | |||||||||||||||
Total Return* |
| 6.28% |
|
| (15.22)% |
|
| 7.19% |
|
| 3.78% |
|
| 9.05% |
|
| (25.90)% |
| |||
Net Assets, End of Period (in thousands) | $40,392 | $27,417 | $21,896 | $15,996 | $8,392 | $3,347 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $35,976 | $22,174 | $19,341 | $12,309 | $5,502 | $3,574 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.81% | 1.56% | 1.52% | 1.50% | 1.81% | 3.87% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.31% | 1.17% | 1.18% | 1.14% | 1.19% | 1.33% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | (0.36)% | 0.61% | 2.29%(3) | 1.16% | 0.90% | 0.87% | |||||||||||||||
Portfolio Turnover Rate | 52% | 131% | 59% | 138% | 136% | 160% | |||||||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from December 28, 2010 (inception date) through September 30, 2011. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets include a special dividend from Strides Arcolab, Ltd. In December 2013. The impact of the special dividend to Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets is $0.08 and 0.94%, respectively. (4) Redemption fees aggregated less than $0.005 on a per share basis. Redemption fees were eliminated effective April 2, 2012. (5) Pursuant to a contractual agreement, Janus waived certain fees and expenses during the period. The Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets would have been 1.59% in 2011 without the waiver of these fees and expenses. |
See Notes to Financial Statements. | |
20 | MARCH 31, 2016 |
Janus Emerging Markets Fund
Financial Highlights
Class S Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year or period ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011(1) | |||||
Net Asset Value, Beginning of Period |
| $7.14 |
|
| $8.56 |
|
| $8.24 |
|
| $7.97 |
|
| $7.41 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | (0.03)(2) | 0.03(2) | 0.18(2)(3) | 0.14 | 0.02 | (0.03) | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.46 | (1.33) | 0.36 | 0.14 | 0.61 | (2.56) | |||||||||||||||
Total from Investment Operations |
| 0.43 |
|
| (1.30) |
|
| 0.54 |
|
| 0.28 |
|
| 0.63 |
|
| (2.59) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.02) | (0.12) | (0.22) | (0.01) | (0.04) | — | |||||||||||||||
Distributions (from capital gains) | — | — | — | — | (0.03) | — | |||||||||||||||
Total Dividends and Distributions |
| (0.02) |
|
| (0.12) |
|
| (0.22) |
|
| (0.01) |
|
| (0.07) |
|
| — |
| |||
Net Asset Value, End of Period | $7.55 | $7.14 | $8.56 | $8.24 | $7.97 | $7.41 | |||||||||||||||
Total Return* |
| 6.01% |
|
| (15.32)% |
|
| 6.67% |
|
| 3.55% |
|
| 8.50% |
|
| (25.90)% |
| |||
Net Assets, End of Period (in thousands) | $1,125 | $124 | $147 | $337 | $676 | $617 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $825 | $166 | $326 | $481 | $676 | $800 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 2.26% | 2.01% | 2.05% | 1.97% | 2.50% | 4.61% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.74% | 1.43% | 1.54% | 1.48% | 1.64% | 1.39%(4) | |||||||||||||||
Ratio of Net Investment Income/(Loss) | (0.71)% | 0.33% | 2.10%(3) | 0.05% | 0.29% | 0.62% | |||||||||||||||
Portfolio Turnover Rate | 52% | 131% | 59% | 138% | 136% | 160% | |||||||||||||||
Class T Shares | |||||||||||||||||||||
For a share outstanding during the period ended March 31, 2016 (unaudited) and each year or period ended September 30 | 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012 |
|
| 2011(1) |
| ||||
Net Asset Value, Beginning of Period |
| $7.14 |
|
| $8.60 |
|
| $8.26 |
|
| $7.99 |
|
| $7.41 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | (0.02)(2) | 0.09(2) | 0.19(2)(3) | 0.29 | 0.05 | (0.01) | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.46 | (1.41) | 0.37 | 0.01 | 0.60 | (2.59) | |||||||||||||||
Total from Investment Operations |
| 0.44 |
|
| (1.32) |
|
| 0.56 |
|
| 0.30 |
|
| 0.65 |
|
| (2.60) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.02) | (0.14) | (0.22) | (0.03) | (0.04) | — | |||||||||||||||
Distributions (from capital gains) | — | — | — | — | (0.03) | — | |||||||||||||||
Redemption fees | N/A | N/A | N/A | N/A | —(5) | 0.01 | |||||||||||||||
Total Dividends and Distributions |
| (0.02) |
|
| (0.14) |
|
| (0.22) |
|
| (0.03) |
|
| (0.07) |
|
| 0.01 |
| |||
Net Asset Value, End of Period | $7.56 | $7.14 | $8.60 | $8.26 | $7.99 | $7.41 | |||||||||||||||
Total Return* |
| 6.16% |
|
| (15.52)% |
|
| 6.92% |
|
| 3.73% |
|
| 8.78% |
|
| (25.90)% |
| |||
Net Assets, End of Period (in thousands) | $4,384 | $4,111 | $1,207 | $825 | $2,141 | $1,301 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $4,486 | $2,578 | $1,121 | $2,105 | $2,004 | $1,320 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.99% | 1.79% | 1.77% | 1.70% | 2.13% | 4.08% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.50% | 1.44% | 1.41% | 1.37% | 1.42% | 1.34% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | (0.59)% | 1.09% | 2.19%(3) | (0.19)% | 0.58% | 0.85% | |||||||||||||||
Portfolio Turnover Rate | 52% | 131% | 59% | 138% | 136% | 160% | |||||||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from December 28, 2010 (inception date) through September 30, 2011. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets include a special dividend from Strides Arcolab, Ltd. In December 2013. The impact of the special dividend to Net investment income/(loss) per share and Ratio of Net Investment Income/(Loss) to Average Net Assets is $0.08 and 0.94%, respectively. (4) Pursuant to a contractual agreement, Janus waived certain fees and expenses during the period. The Ratio of Net Expenses (After Waivers and Expense Offsets) to Average Net Assets would have been 1.82% in 2011 without the waiver of these fees and expenses. (5) Redemption fees aggregated less than $0.005 on a per share basis. Redemption fees were eliminated effective April 2, 2012. |
See Notes to Financial Statements. | |
Janus Investment Fund | 21 |
Janus Emerging Markets Fund
Notes to Financial Statements (unaudited)
1. Organization and Significant Accounting Policies
Janus Emerging Markets Fund (the “Fund”) is a series fund. The Fund is part of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers forty-five Funds which include multiple series of shares, with differing investment objectives and policies. The Fund invests primarily in equity securities. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares. Class D Shares are closed to certain new investors.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus funds. Class D Shares are available only to investors who hold accounts directly with the Janus funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments.
Class S Shares are offered through financial intermediary platforms including, but not limited to, retirement platforms and asset allocation, mutual fund wrap, or other discretionary or nondiscretionary fee-based investment advisory programs. In addition, Class S Shares may be available through certain financial intermediaries who have an agreement with Janus Capital Management LLC (“Janus Capital”) or its affiliates to offer Class S Shares on their supermarket platforms.
Class T Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be evaluated and valued on an amortized cost basis provided that the amortized cost determined
22 | MARCH 31, 2016 |
Janus Emerging Markets Fund
Notes to Financial Statements (unaudited)
approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of March 31, 2016 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The Fund did not hold a significant amount of Level 3 securities as of March 31, 2016.
The Fund recognizes transfers between the levels as of the beginning of the fiscal year. The following describes the amounts of transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period.
Financial assets of $21,603,344 were transferred out of Level 2 to Level 1 since certain foreign equity prices were applied a fair valuation adjustment factor at the end of the prior fiscal year and no factor was applied at the end of the current period.
Janus Investment Fund | 23 |
Janus Emerging Markets Fund
Notes to Financial Statements (unaudited)
Financial assets of $183,183 were transferred out of Level 2 to Level 3 since certain security’s prices were determined using significant unobservable inputs at the end of the current fiscal year and other significant observable inputs at the end of the prior fiscal year.
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 Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf, as well as a portion of general expenses, which may be allocated pro rata to the Fund. Each class of shares bears a portion of general expenses, which 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.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of 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 of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually. The Fund may treat a portion of the amount paid to redeem shares as a distribution of investment company taxable income and realized capital gains that are reflected in the net asset value. This practice, commonly referred to as “equalization,” has no effect on the redeeming shareholder or a Fund’s total return, but may reduce the amounts that would otherwise be required to be paid as taxable dividends to the remaining shareholders. It is possible that the Internal Revenue Service (IRS) could challenge the Funds’ equalization methodology or calculations, and any such challenge could result in additional tax, interest, or penalties to be paid by the Fund.
The Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If
24 | MARCH 31, 2016 |
Janus Emerging Markets Fund
Notes to Financial Statements (unaudited)
the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Restricted Cash
As of March 31, 2016, the Fund has restricted cash in the amount of $2,205,722. The restricted cash represents collateral pledged in relation to derivatives and/or securities with extended settlement dates, as well as investment quota for China A Shares. The carrying value of the restricted cash approximates fair value.
2. Derivative Instruments
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended March 31, 2016 is discussed in further detail below. A summary of derivative activity by the Fund is reflected in the tables at the end of this section.
The Fund may use derivative instruments for hedging purposes (to offset risks associated with an investment, currency exposure, or market conditions), to adjust currency exposure relative to a benchmark index, or for speculative purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
· Commodity Risk – the risk related to the change in value of commodities or commodity-linked investments due to changes in the overall market movements, volatility of the underlying benchmark, changes in interest rates, or other factors affecting a particular industry of commodity such as drought, floods, weather, livestock disease, embargoes, tariffs, and international economic, political, and regulatory developments.
· Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund.
· Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations.
· Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment.
· Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market.
Janus Investment Fund | 25 |
Janus Emerging Markets Fund
Notes to Financial Statements (unaudited)
· Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index.
· Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease.
· Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested.
· Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth.
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Fund may also invest in forward currency contracts for nonhedging purposes such as seeking to enhance returns. The Fund is subject to currency risk and counterparty risk in the normal course of pursuing its investment objective through its investments in forward currency contracts.
Forward currency contracts are valued by converting the foreign value to U.S. dollars by using the current spot U.S. dollar exchange rate and/or forward rate for that currency. Exchange and forward rates as of the close of the NYSE shall be used to value the forward currency contracts. The unrealized appreciation/(depreciation) for forward currency contracts is reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations for the change in unrealized net appreciation/depreciation (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to decrease exposure to currency risk associated with foreign currency denominated securities held by the Fund.
During the period ended March 31, 2016, the average ending monthly currency value amounts on sold forward currency contracts is $499,198.
Options Contracts
An options contract provides the purchaser with the right, but not the obligation, to buy (call option) or sell (put option) a financial instrument at an agreed upon price on or before a specified date. The purchaser pays a premium to the seller for this right. The seller has the corresponding obligation to sell or buy a financial instrument if the purchaser (owner) "exercises" the option. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option are adjusted by the amount of
26 | MARCH 31, 2016 |
Janus Emerging Markets Fund
Notes to Financial Statements (unaudited)
premium received or paid. Upon expiration, or closing of the option transaction, a realized gain or loss is reported on the Statement of Operations (if applicable). The difference between the premium paid/received and the market value of the option is recorded as unrealized appreciation or depreciation. The net change in unrealized appreciation or depreciation is reported on the Statement of Operations (if applicable). Option contracts are typically valued using an approved vendor’s option valuation model. To the extent reliable market quotations are available, option contracts are valued using market quotations. In cases when an approved vendor cannot provide coverage for an option and there is no reliable market quotation, a broker quotation or an internal valuation using the Black-Scholes model, the Cox-Rubenstein Binomial Option Pricing Model, or other appropriate option pricing model is used. Certain options contracts are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Statement of Assets and Liabilities as “Variation margin receivable” or “Variation margin payable” (if applicable).
The Fund may use options contracts to hedge against changes in interest rates, the values of equities, or foreign currencies. The Fund generally invests in options to hedge against adverse movements in the value of portfolio holdings. The use of such instruments may involve certain additional risks as a result of unanticipated movements in the market. A lack of correlation between the value of an instrument underlying an option and the asset being hedged, or unexpected adverse price movements, could render the Fund’s hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. The Fund may be subject to counterparty risk, interest rate risk, liquidity risk, equity risk, commodity risk, and currency risk in the normal course of pursuing its investment objective through its investments in options contracts.
Options traded on an exchange are regulated and the terms of the options are standardized. Options traded OTC expose the Fund to counterparty risk in the event that the counterparty does not perform. This risk is mitigated by having a netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the counterparty.
The Fund may purchase put options to hedge against a decline in the value of its portfolio. By using put options in this way, the Fund will reduce any profit it might otherwise have realized in the underlying security by the amount of the premium paid for the put option and by transaction costs. The Fund may purchase call options to hedge against an increase in the price of securities that it may buy in the future. The premium paid for the call option plus any transaction costs will reduce the benefit, if any, realized by the Fund upon exercise of the option, and, unless the price of the underlying security rises sufficiently, the option may expire worthless to the Fund. The risk in buying options is that the Fund pays a premium whether or not the options are exercised. Options purchased are reported in the Schedule of Investments (if applicable).
During the period, the Fund purchased call options on foreign exchange rates vs. the U.S. dollar in order to increase foreign currency exposure and reduce U.S. dollar exposure where increasing this exposure via the options market was most attractive.
During the period ended March 31, 2016, the average ending monthly market value amounts on purchased call options is $62,602.
Swaps
Swap agreements are two-party contracts entered into primarily by institutional investors for periods ranging from a day to more than one year to exchange one set of cash flows for another. The most significant factor in the performance of swap agreements is the change in value of the specific index, security, or currency, or other factors that determine the amounts of payments due to and from the Fund. The use of swaps is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. Swap transactions may in some instances involve the delivery of securities or other underlying assets by the Fund or its counterparty to collateralize obligations under the swap. If the other party to a swap that is not collateralized defaults, the Fund would risk the loss of the net amount of the payments that it contractually is entitled to receive. Swap agreements entail the risk that a party will default on its payment obligations to the Fund. If the other party to a swap defaults, the Fund would risk the loss of the net amount of the payments that it contractually is entitled to receive. If the Fund utilizes a swap at the wrong time or judges market conditions incorrectly, the swap may result in a loss to the Fund and reduce the Fund’s total return.
Swap agreements also bear the risk that the Fund will not be able to meet its obligation to the counterparty. Swap agreements are typically privately negotiated and entered into in the OTC market. However, certain swap agreements are required to be cleared through a clearinghouse and traded on an exchange or swap execution facility. Swaps that
Janus Investment Fund | 27 |
Janus Emerging Markets Fund
Notes to Financial Statements (unaudited)
are required to be cleared are required to post initial and variation margins in accordance with the exchange requirements. Regulations enacted require the Fund to centrally clear certain interest rate and credit default index swaps through a clearinghouse or central counterparty (“CCP”). To clear a swap with a CCP, the Fund will submit the swap to, and post collateral with, a futures clearing merchant (“FCM”) that is a clearinghouse member. Alternatively, the Fund may enter into a swap with a financial institution other than the FCM (the “Executing Dealer”) and arrange for the swap to be transferred to the FCM for clearing. The Fund may also enter into a swap with the FCM itself. The CCP, the FCM, and the Executing Dealer are all subject to regulatory oversight by the CFTC. A default or failure by a CCP or an FCM, or the failure of a swap to be transferred from an Executing Dealer to the FCM for clearing, may expose the Fund to losses, increase its costs, or prevent the Fund from entering or exiting swap positions, accessing collateral, or fully implementing its investment strategies. The regulatory requirement to clear certain swaps could, either temporarily or permanently, reduce the liquidity of cleared swaps or increase the costs of entering into those swaps.
Index swaps, interest rate swaps, and credit default swaps are valued using an approved vendor supplied price. Basket swaps are valued using a broker supplied price. Equity swaps that consist of a single underlying equity are valued either at the closing price, the latest bid price, or the last sale price on the primary market or exchange it trades. The market value of swap contracts are aggregated by positive and negative values and are disclosed separately as an asset or liability on the Fund’s Statement of Assets and Liabilities (if applicable). Realized gains and losses are reported on the Fund’s Statement of Operations (if applicable). The change in unrealized net appreciation or depreciation during the period is included in the Statement of Operations (if applicable).
The Fund’s maximum risk of loss from counterparty risk or credit risk is the discounted value of the payments to be received from/paid to the counterparty over the contract’s remaining life, to the extent that the amount is positive. The risk is mitigated by having a netting arrangement between the Fund and the counterparty and by the posting of collateral by the counterparty to cover the Fund’s exposure to the counterparty.
Total return swaps involve an exchange by two parties in which one party makes payments based on a set rate, either fixed or variable, while the other party makes payments based on the return of an underlying asset, which includes both the income it generates and any capital gains over the payment period. A fixed-income total return swap may be written on many different kinds of underlying reference assets, and may include different indices for various kinds of debt securities (e.g., U.S. investment grade bonds, high-yield bonds, or emerging market bonds).
During the period, the Fund entered into total return swaps on equity securities or indices to increase exposure to equity risk. These total return swaps require the Fund to pay a floating reference interest rate, and an amount equal to the negative price movement of securities or an index multiplied by the notional amount of the contract. The Fund will receive payments equal to the positive price movement of the same securities or index multiplied by the notional amount of the contract and, in some cases, dividends paid on the securities.
During the period ended March 31, 2016, the average ending monthly market value amounts on total return swaps which are long the reference asset is $(3,246).
The following table, grouped by derivative type, provides information about the fair value and location of derivatives within the Statement of Assets and Liabilities as of March 31, 2016.
Fair Value of Derivative Instruments (not accounted for as hedging instruments) as of March 31, 2016 | ||||||||
|
|
|
| Currency |
| Equity
|
| Total |
Asset Derivatives: | ||||||||
Investments, at value* | $ | - | $ | 49,832 | $ | 49,832 | ||
Liability Derivatives: | ||||||||
Forward currency contracts | $ | 60 | $ | - | $ | 60 | ||
Outstanding swap contracts, at value | - | 4,803 | 4,803 | |||||
Total Liability Derivatives |
| $ | 60 | $ | 4,803 | $ | 4,863 | |
* | Amounts relate to purchased options. | |||||||
28 | MARCH 31, 2016 |
Janus Emerging Markets Fund
Notes to Financial Statements (unaudited)
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended March 31, 2016.
The effect of Derivative Instruments (not accounted for as hedging instruments) on the Statement of Operations for the period ended March 31, 2016 | ||||||||
Amount of Realized Gain/(Loss) Recognized on Derivatives | ||||||||
Derivative |
|
| Currency |
| Equity |
| Total | |
Investments and foreign currency transactions | $ | (28,258) | $ | - | $ | (28,258) | ||
Swap contracts | - | (27,679) | (27,679) | |||||
Total |
| $ | (28,258) | $ | (27,679) | $ | (55,937) | |
Amount of Change in Unrealized Appreciation/Depreciation Recognized on Derivatives | ||||||||
Derivative |
|
| Currency
|
| Equity |
| Total | |
Investments, foreign currency translations and non-interested Trustees' deferred compensation | $ | (314) | $ | 1,790* | $ | 1,476 | ||
Swap contracts | - | 397 | 397 | |||||
Total |
| $ | (314) | $ | 2,187 | $ | 1,873 | |
* | Amounts relate to purchased options. | |||||||
Please see the Fund’s Statement of Operations for the Fund’s “Net Realized and Unrealized Gain/(Loss) on Investments.”
3. Other Investments and Strategies
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. Many non-governmental issuers, and even certain governments, have defaulted on, or been forced to restructure, their debts. Many other issuers have faced difficulties obtaining credit or refinancing existing obligations. Financial institutions have in many cases required government or central bank support, have
Janus Investment Fund | 29 |
Janus Emerging Markets Fund
Notes to Financial Statements (unaudited)
needed to raise capital, and/or have been impaired in their ability to extend credit. As a result, financial markets in the EU experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
China A Shares
The Chinese government may permit a foreign investor to invest in China A Shares as a licensed Qualified Foreign Institutional Investor (“QFII”). QFII licenses are granted by the China Securities Regulatory Commission and an investment quota is granted by the State Administration of Foreign Exchange. Janus Capital has been granted a QFII license and an investment quota.
People’s Republic of China (“PRC”) regulations require QFIIs to entrust assets held in the PRC and to interact with government agencies through a China-based qualified custodian bank. Assets attributable to clients of Janus Capital will be held by the custodian in foreign exchange accounts and securities accounts in the joint name of Janus Capital and its clients, although the terms of the custody agreement make clear that the contents of the accounts belong to the clients, and not to Janus Capital.
During the period ended March 31, 2016, Janus Capital, in its capacity as a QFII, invested in China A Shares on behalf of the Fund. With respect to direct China A Shares investments, as a general matter, any capital invested and profits generated cannot be repatriated for a minimum of one year. Repatriation of any invested capital is subject to approval by the regulator. Additionally, any repatriation of profits would be subject to an audit by a registered accountant in China, and subject to regulatory approval. In light of the foregoing, the Fund’s investment in China A Shares would be subject to the Fund’s limit of investing up to 15% of its net assets in illiquid investments. Current Chinese tax law is unclear whether capital gains realized on the Fund’s investments in China A shares will be subject to tax. Because management believes it is more likely than not that Chinese capital gains tax ultimately will not be imposed, the Fund does not accrue for such taxes.
As of March 31, 2016, the Fund has available investment quota of $2,105,722. The Fund is subject to certain restrictions and administrative processes relating to its ability to repatriate cash balances and may incur substantial delays in gaining access to its assets.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the "Offsetting Assets and Liabilities" section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs, including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
30 | MARCH 31, 2016 |
Janus Emerging Markets Fund
Notes to Financial Statements (unaudited)
Emerging Market Investing
The Fund may invest in securities of issuers or companies from or with exposure to one or more “developing countries” or “emerging market countries.” To the extent that the Fund invests a significant amount of its assets in one or more of these countries, its returns and net asset value may be affected to a large degree by events and economic conditions in such countries. The risks of foreign investing are heightened when investing in emerging markets, which may result in the price of investments in emerging markets experiencing sudden and sharp price swings. In many developing markets, there is less government supervision and regulation of business and industry practices (including the potential lack of strict finance and accounting controls and standards), stock exchanges, brokers, and listed companies, making these investments potentially more volatile in price and less liquid than investments in developed securities markets, resulting in greater risk to investors. There is a risk in developing countries that a future economic or political crisis could lead to price controls, forced mergers of companies, expropriation or confiscatory taxation, imposition or enforcement of foreign ownership limits, seizure, nationalization, sanctions or imposition of restrictions by various governmental entities on investment and trading, or creation of government monopolies, any of which may have a detrimental effect on the Fund’s investments. In addition, the Fund’s investments may be denominated in foreign currencies and therefore, changes in the value of a country’s currency compared to the U.S. dollar may affect the value of the Fund’s investments. To the extent that the Fund invests a significant portion of its assets in the securities of issuers in or companies of a single country or region, it is more likely to be impacted by events or conditions affecting that country or region, which could have a negative impact on the Fund’s performance. Additionally, foreign and emerging market risks, including, but not limited to, price controls, expropriation or confiscatory taxation, imposition or enforcement of foreign ownership limits, nationalization, and restrictions on repatriation of assets may be heightened to the extent the Fund invests in Chinese local market securities.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund has entered into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following tables present gross amounts of recognized assets and/or liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see either the “Fair Value of Derivative Instruments as of March 31, 2016” table located in Note 2 of these Notes to Financial Statements and/or the Fund’s Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets | ||||
Counterparty | Gross Amounts | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount |
Deutsche Bank AG | $ 1,770,214 | $ - | $ (1,770,214) | $ - |
Goldman Sachs International | 49,832 | - | - | 49,832 |
Total | $ 1,820,046 | $ - | $ (1,770,214) | $ 49,832 |
Janus Investment Fund | 31 |
Janus Emerging Markets Fund
Notes to Financial Statements (unaudited)
Offsetting of Financial Liabilities and Derivative Liabilities | |||||
Counterparty | Gross Amounts | Offsetting Asset or Liability(a) | Collateral Pledged(b) | Net Amount | |
Credit Suisse International | $ 4,863 | $ - | $ - | $ 4,863 | |
(a) Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | |||||
(b) Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. | |||||
Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. Securities on loan will be continuously secured by collateral which may consist of cash, U.S. Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral as permitted by the SEC. The value of the collateral must be at least 102% of the market value of the loaned securities that are denominated in U.S. dollars and 105% of the market value of the loaned securities that are not denominated in U.S. dollars. Upon receipt of cash collateral, Janus Capital intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. Loaned securities and related collateral are marked-to-market each business day based upon the market value of the loaned securities at the close of business, employing the most recent available pricing information. Collateral levels are then adjusted based on this mark-to-market evaluation.
The Fund does not exchange collateral on its forward currency contracts with its counterparties; however, the Fund may segregate cash or high-grade securities in an amount at all times equal to or greater than the Fund’s commitment with respect to these contracts. Such segregated assets, if with the Fund’s custodian, are denoted on the accompanying Schedule of Investments and are evaluated daily to ensure their market value equals or exceeds the current market value of the Fund’s corresponding forward currency contracts.
The Fund may require the counterparty to pledge securities as collateral daily (based on the daily valuation of the financial asset) if the Fund has a net aggregate unrealized gain on OTC derivative contracts with a particular counterparty. The Fund may deposit cash as collateral with the counterparty and/or custodian daily (based on the daily valuation of the financial asset) if the Fund has a net aggregate unrealized loss on OTC derivative contracts with a particular counterparty. The collateral amounts are subject to minimum exposure requirements and initial margin requirements. Collateral amounts are monitored and subsequently adjusted up or down as valuations fluctuate by at least the minimum exposure requirement. Collateral may reduce the risk of loss.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Securities Lending
Under procedures adopted by the Trustees, the Fund may seek to earn additional income by lending securities to qualified parties. Deutsche Bank AG acts as securities lending agent and a limited purpose custodian or subcustodian to receive and disburse cash balances and cash collateral, hold short-term investments, hold collateral, and perform other custodian functions. The Fund may lend portfolio securities in an amount equal to up to 1/3 of its total assets as determined at the time of the loan origination. There is the risk of delay in recovering a loaned security or the risk of loss in collateral rights if the borrower fails financially. In addition, Janus Capital makes efforts to balance the benefits and risks from granting such loans. All loans will be continuously secured by collateral which may consist of cash, U.S.
32 | MARCH 31, 2016 |
Janus Emerging Markets Fund
Notes to Financial Statements (unaudited)
Government securities, domestic and foreign short-term debt instruments, letters of credit, time deposits, repurchase agreements, money market mutual funds or other money market accounts, or such other collateral as permitted by the SEC. If the Fund is unable to recover a security on loan, the Fund may use the collateral to purchase replacement securities in the market. There is a risk that the value of the collateral could decrease below the cost of the replacement security by the time the replacement investment is made, resulting in a loss to the Fund.
Upon receipt of cash collateral, Janus Capital may invest it in affiliated or non-affiliated cash management vehicles, whether registered or unregistered entities, as permitted by the 1940 Act and rules promulgated thereunder. Janus Capital currently intends to invest the cash collateral in a cash management vehicle for which Janus Capital serves as investment adviser, Janus Cash Collateral Fund LLC. An investment in Janus Cash Collateral Fund LLC is generally subject to the same risks that shareholders experience when investing in similarly structured vehicles, such as the potential for significant fluctuations in assets as a result of the purchase and redemption activity of the securities lending program, a decline in the value of the collateral, and possible liquidity issues. Such risks may delay the return of the cash collateral and cause the Fund to violate its agreement to return the cash collateral to a borrower in a timely manner. As adviser to the Fund and Janus Cash Collateral Fund LLC, Janus Capital has an inherent conflict of interest as a result of its fiduciary duties to both the Fund and Janus Cash Collateral Fund LLC. Additionally, Janus Capital receives an investment advisory fee of 0.05% for managing Janus Cash Collateral Fund LLC, but it may not receive a fee for managing certain other affiliated cash management vehicles in which the Fund may invest, and therefore may have an incentive to allocate preferred investment opportunities to investment vehicles for which it is receiving a fee.
The value of the collateral must be at least 102% of the market value of the loaned securities that are denominated in U.S. dollars and 105% of the market value of the loaned securities that are not denominated in U.S. dollars. Loaned securities and related collateral are marked-to-market each business day based upon the market value of the loaned securities at the close of business, employing the most recent available pricing information. Collateral levels are then adjusted based on this mark-to-market evaluation.
The cash collateral invested by Janus Capital is disclosed in the Schedule of Investments (if applicable). Income earned from the investment of the cash collateral, net of rebates paid to, or fees paid by, borrowers and less the fees paid to the lending agent are included as “Affiliated securities lending income, net” on the Statement of Operations. As of March 31, 2016, securities lending transactions accounted for as secured borrowings with an overnight and continuous contractual maturity are $1,770,214. Gross amounts of recognized liabilities for securities lending (collateral received) as of March 31, 2016 is $1,811,136, resulting in the net amount due to the counterparty of $40,922.
4. Investment Advisory Agreements and Other Transactions with Affiliates
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The Fund’s "base" fee rate prior to any performance adjustment (expressed as an annual rate) is 1.00%.
The investment advisory fee rate is determined by calculating a base fee and applying a performance adjustment. The base fee rate is the same as the contractual investment advisory fee rate. The performance adjustment either increases or decreases the base fee depending on how well the Fund has performed relative to its benchmark index. The Fund's benchmark index used in the calculation is the MSCI Emerging Markets IndexSM.
The calculation of the performance adjustment applies as follows:
Investment Advisory Fee = Base Fee Rate +/- Performance Adjustment
The investment advisory fee rate paid to Janus Capital by the Fund consists of two components: (1) a base fee calculated by applying the contractual fixed rate of the advisory fee to the Fund’s average daily net assets during the previous month (“Base Fee Rate”), plus or minus (2) a performance-fee adjustment (“Performance Adjustment”) calculated by applying a variable rate of up to 0.15% (positive or negative) to the Fund’s average daily net assets during the applicable performance measurement period, which is generally the previous 36 months.
The Fund’s prospectuses and statement(s) of additional information contain additional information about performance-based fees. The amount shown as advisory fees on the Statement of Operations reflects the Base Fee Rate plus/minus any Performance Adjustment. For the period ended March 31, 2016, the performance adjusted investment advisory fee rate before any waivers and/or reimbursements of expenses is 1.09%.
Janus Capital Singapore Pte. Limited (“Janus Singapore”) serves as subadviser and is responsible for a portion of the Fund subject to the general oversight of Janus Capital. Janus Singapore is an indirect wholly-owned subsidiary of Janus
Janus Investment Fund | 33 |
Janus Emerging Markets Fund
Notes to Financial Statements (unaudited)
Capital. Janus Capital pays Janus Singapore a fee equal to one-third of the advisory fee paid by the Fund to Janus Capital (calculated after any applicable performance fee adjustment, fee waivers, and expense reimbursements). The subadvisory fee paid by Janus Capital to Janus Singapore adjusts up or down based on the Fund’s performance relative to the Fund’s benchmark index over the performance measurement period.
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses in any fiscal year, including the investment advisory fee, but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares), transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate of 1.24%. Janus Capital has agreed to continue the waiver until at least February 1, 2017. The previous expense limit (until February 1, 2016) was 1.11%. If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement” on the Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund. Janus Services is not compensated for its services related to the shares, except for out-of-pocket costs. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the Transfer Agency Agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. The Funds’ Trustees have set limits on fees that the Funds may incur with respect to administrative fees paid for omnibus or networked accounts. Such limits are subject to change by the Trustees in the future. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or a significant portion of this fee to compensate retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries for providing these services. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital.
Janus Services is compensated for its services related to the Fund’s Class D Shares. In addition to the administrative fees discussed above, Janus Services receives reimbursement for out-of-pocket costs it incurs for serving as transfer agent and providing, or arranging for, servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
34 | MARCH 31, 2016 |
Janus Emerging Markets Fund
Notes to Financial Statements (unaudited)
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Distributors LLC (“Janus Distributors”), a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services for the Fund and is reimbursed by the Fund for certain of its costs in providing those services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). The Fund also pays for salaries, fees, and expenses of certain Janus Capital employees and Fund officers, with respect to certain specified administration functions they perform on behalf of the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. In addition, employees of Janus Capital and/or its affiliates may serve as officers of the Trust. Some expenses related to compensation payable to the Fund's Chief Compliance Officer and compliance staff are shared with the Fund. Total compensation of $367,532 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended March 31, 2016. The Fund's portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of March 31, 2016 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended March 31, 2016 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $92,975 were paid by the Trust to a Trustee under the Deferred Plan during the period ended March 31, 2016.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered product compliant with Rule 2a-7 under the 1940 Act. There are no restrictions on the Fund's ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Fund to Janus Cash Liquidity Fund LLC. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Janus Investment Fund | 35 |
Janus Emerging Markets Fund
Notes to Financial Statements (unaudited)
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended March 31, 2016 can be found in a table located in the Notes to Schedule of Investments and Other Information.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Distributors and financial intermediaries. There were no upfront sales charges retained by Janus Distributors during the period ended March 31, 2016.
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Distributors during the period ended March 31, 2016.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class C Shares during the period ended March 31, 2016.
As of March 31, 2016, shares of the Fund were owned by Janus Capital and/or other funds advised by Janus Capital, as indicated in the table below:
Class | % of Class Owned |
| % of Fund Owned |
| |
Class A Shares | - | % | - | % | |
Class C Shares | - | - | |||
Class D Shares | - | - | |||
Class I Shares | 36 | 27 | |||
Class S Shares | 9 | -* | |||
Class T Shares | - | - | |||
*Less than 0.50% | |||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
The Fund is permitted to purchase or sell securities (“cross-trade”) between itself and other funds or accounts managed by Janus Capital Management LLC in accordance with Rule 17a-7 under the Investment Company Act of 1940 (“Rule 17a-7”), when the transaction is consistent with the investment objectives and policies of the Fund and in accordance with the Internal Cross Trade Procedures adopted by the Trust’s Board of Trustees. These procedures have been designed to ensure that any cross-trade of securities by the Fund from or to another fund or account that is or could be considered an affiliate of the Fund under certain limited circumstances by virtue of having a common investment adviser, common Officer, or common Trustee complies with Rule 17a-7. Under these procedures, each cross-trade is effected at the current market price to save costs where allowed. During the period ended March 31, 2016, the Fund engaged in cross trades amounting to $41,899 in purchases.
36 | MARCH 31, 2016 |
Janus Emerging Markets Fund
Notes to Financial Statements (unaudited)
5. Federal Income Tax
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of March 31, 2016 are noted below.
Unrealized appreciation and unrealized depreciation in the table below exclude appreciation/depreciation on foreign currency translations. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals and investments in passive foreign investment companies.
Federal Tax Cost | Unrealized
| Unrealized | Net Tax Appreciation/ |
$ 56,034,266 | $ 2,325,719 | $ (4,522,483) | $ (2,196,764) |
Accumulated capital losses noted below represent net capital loss carryovers, as of September 30, 2015, that may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. The following table shows these capital loss carryovers.
Capital Loss Carryover Schedule | ||||
For the year ended September 30, 2015 | ||||
No Expiration | ||||
Short-Term | Long-Term | Accumulated Capital Losses | ||
| $ (408,028) | $ (413,353) | $ (821,381) | |
Janus Investment Fund | 37 |
Janus Emerging Markets Fund
Notes to Financial Statements (unaudited)
6. Capital Share Transactions
Period ended March 31, 2016 | Year ended September 30, 2015 | |||||
Shares | Amount | Shares | Amount | |||
Class A Shares: | ||||||
Shares sold | 8,784 | $ 68,179 | 14,306 | $ 124,001 | ||
Reinvested dividends and distributions | - | - | 653 | 5,155 | ||
Shares repurchased | (12,200) | (88,093) | (19,951) | (160,924) | ||
Net Increase/(Decrease) | (3,416) | $ (19,914) |
| (4,992) | $ (31,768) | |
Class C Shares: | ||||||
Shares sold | 12,209 | $ 91,390 | 21,154 | $ 172,296 | ||
Reinvested dividends and distributions | - | - | 30 | 235 | ||
Shares repurchased | (6,502) | (46,057) | (651) | (5,176) | ||
Net Increase/(Decrease) | 5,707 | $ 45,333 |
| 20,533 | $ 167,355 | |
Class D Shares: | ||||||
Shares sold | 114,823 | $ 829,853 | 407,217 | $ 3,489,359 | ||
Reinvested dividends and distributions | 3,563 | 26,474 | 21,264 | 166,920 | ||
Shares repurchased | (119,213) | (851,732) | (634,045) | (5,031,226) | ||
Net Increase/(Decrease) | (827) | $ 4,595 |
| (205,564) | $ (1,374,947) | |
Class I Shares: | ||||||
Shares sold | 2,110,241 | $15,536,382 | 1,622,753 | $12,639,705 | ||
Reinvested dividends and distributions | 19,413 | 144,626 | 48,828 | 384,278 | ||
Shares repurchased | (626,886) | (4,439,521) | (385,879) | (3,132,040) | ||
Net Increase/(Decrease) | 1,502,768 | $11,241,487 |
| 1,285,702 | $ 9,891,943 | |
Class S Shares: | ||||||
Shares sold | 133,627 | $ 1,027,904 | 165,627 | $ 1,446,731 | ||
Reinvested dividends and distributions | 360 | 2,678 | 266 | 2,086 | ||
Shares repurchased | (2,338) | (17,003) | (165,750) | (1,437,671) | ||
Net Increase/(Decrease) | 131,649 | $ 1,013,579 |
| 143 | $ 11,146 | |
Class T Shares: | ||||||
Shares sold | 585,014 | $ 4,326,050 | 1,133,561 | $ 9,505,174 | ||
Reinvested dividends and distributions | 1,543 | 11,482 | 2,322 | 18,271 | ||
Shares repurchased | (581,955) | (4,197,534) | (700,815) | (5,561,602) | ||
Net Increase/(Decrease) | 4,602 | $ 139,998 |
| 435,068 | $ 3,961,843 | |
7. Purchases and Sales of Investment Securities
For the period ended March 31, 2016, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, and in-kind transactions) was as follows:
Purchases of | Proceeds from Sales | Purchases of Long- | Proceeds from Sales |
$35,539,666 | $ 24,008,800 | $ - | $ - |
8. Subsequent Event
Management has evaluated whether any events or transactions occurred subsequent to March 31, 2016 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
38 | MARCH 31, 2016 |
Janus Emerging Markets Fund
Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-0020 (toll free); (ii) on the Fund’s website at janus.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding the Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through janus.com/proxyvoting and from the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Fund files its complete portfolio holdings (schedule of investments) with the SEC for the first and third quarters of each fiscal year on Form N-Q within 60 days of the end of such fiscal quarter. The Fund’s Form N-Q: (i) is available on the SEC’s website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) is available without charge, upon request, by calling Janus at 1-800-525-0020 (toll free).
APPROVAL OF ADVISORY AGREEMENTS DURING THE PERIOD
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 16 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
At a meeting held on December 9, 2015, based on the Trustees’ evaluation of the information provided by Janus Capital, the subadvisers, and the independent fee consultant, as well as other information, the Trustees determined that the overall arrangements between each Fund and Janus Capital and each subadviser, as applicable, were fair and reasonable in light of the nature, extent and quality of the services provided by Janus Capital, its affiliates and the subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting, the Trustees unanimously approved the continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, for the period from either January 1 or February 1, 2016 through January 1 or February 1, 2017, respectively, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies of each Fund, and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of Janus Capital and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee
Janus Investment Fund | 39 |
Janus Emerging Markets Fund
Additional Information (unaudited)
for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed a number of institutional competitive advantages that should enable it to provide superior investment and service performance over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has been strong: for the 36 months ended September 30, 2015, approximately 70% of the Funds were in the top two Broadridge quartiles of performance, and for the 12 months ended September 30, 2015, approximately 61% of the Funds were in the top two Broadridge quartiles of performance.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Fixed-Income Funds and Money Market Funds
· For Janus Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Global Bond Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Unconstrained Bond Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and its limited performance history.
· For Janus High-Yield Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Multi-Sector Income Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Real Return Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
40 | MARCH 31, 2016 |
Janus Emerging Markets Fund
Additional Information (unaudited)
· For Janus Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance.
· For Janus Money Market Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance.
Asset Allocation Funds
· For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
Alternative Fund
· For Janus Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 12 months ended May 31, 2015.
Value Funds
· For Perkins International Value Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 12 months ended May 31, 2015.
· For Perkins Global Value Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Perkins Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Perkins Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Perkins Select Value Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital and Perkins had taken or were taking to improve performance, and that the performance trend was improving.
Janus Investment Fund | 41 |
Janus Emerging Markets Fund
Additional Information (unaudited)
· For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital and Perkins had taken or were taking to improve performance, and that the performance trend was improving.
· For Perkins Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
Mathematical Funds
· For INTECH Emerging Markets Managed Volatility Fund, the Trustees noted that, due to limited performance for the Fund, performance history was not a material factor.
· For INTECH Global Income Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
· For INTECH International Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital and INTECH had taken or were taking to improve performance.
· For INTECH U.S. Core Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
· For INTECH U.S. Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
Growth and Core Funds
· For Janus Balanced Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Contrarian Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Enterprise Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Forty Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Growth and Income Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and in the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Research Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
42 | MARCH 31, 2016 |
Janus Emerging Markets Fund
Additional Information (unaudited)
· For Janus Triton Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Twenty Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Venture Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
Global and International Funds
· For Janus Asia Equity Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Research Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Select Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Global Technology Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus International Equity Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance.
Janus Investment Fund | 43 |
Janus Emerging Markets Fund
Additional Information (unaudited)
Janus Aspen Series
· For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2015 and the second Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the third Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Global Unconstrained Bond Portfolio, the Trustees noted that, due to limited performance for the Fund, performance history was not a material factor.
· For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2015 and the first Broadridge quartile for the 12 months ended May 31, 2015.
· For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2015 and the bottom Broadridge quartile for the 12 months ended May 31, 2015. The Trustees noted the reasons for the Fund’s underperformance, noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory and subadvisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by Broadridge, an independent data provider. They also reviewed an analysis of that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers,
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Janus Emerging Markets Fund
Additional Information (unaudited)
was below the mean management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
The independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 14% below the mean total expenses of their respective Broadridge Expense Group peers and 24% below the mean total expenses for their Broadridge Expense Universes; (3) management fees for the Funds, on average, were 15% below the mean management fees for their Expense Groups and 19% below the mean for their Expense Universes; and (4) Fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered the total expenses for each share class of each Fund compared to the mean total expenses for its Broadridge Expense Group peers and to mean total expenses for its Broadridge Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees, breakpoints, and expense waivers on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks and other costs that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional and subadvised accounts; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) the average spread between management fees charged to the Funds and those charged to Janus Capital’s institutional accounts is reasonable relative to the average spreads seen in the industry; and (4) by one estimation methodology, the fee margins implied by Janus Capital’s subadvised fees when compared to its mutual fund fees are reasonable relative to the estimated fee margins in the industry and relative to estimated fee margins of fund managers using Janus Capital as a subadviser.
The Trustees considered the fees for each Fund for its fiscal year ended in 2014, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Fixed-Income Funds and Money Market Funds
· For Janus Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
Janus Investment Fund | 45 |
Janus Emerging Markets Fund
Additional Information (unaudited)
· For Janus Global Bond Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Global Unconstrained Bond Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Multi-Sector Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus has contractually agreed to limit the Fund’s expenses.
· For Janus Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for all share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Government Money Market Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for both share classes. The Trustees considered that management fees for this Fund are higher than the peer group mean due to the Fund’s management fee including other costs, such as custody and transfer agent services, while many funds in the peer group pay these expenses separately from their management fee. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield.
· For Janus Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield.
Asset Allocation Funds
· For Janus Global Allocation Fund – Conservative, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Global Allocation Fund – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
Alternative Fund
· For Janus Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
Value Funds
· For Perkins International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Perkins Global Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable.
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Janus Emerging Markets Fund
Additional Information (unaudited)
· For Perkins Large Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Perkins Mid Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Perkins Select Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Perkins Small Cap Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Perkins Value Plus Income Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital had contractually agreed to limit the Fund’s expenses.
Mathematical Funds
· For INTECH Emerging Markets Managed Volatility Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For INTECH Global Income Managed Volatility Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For INTECH International Managed Volatility Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital had contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For INTECH U.S. Core Fund, the Trustees noted that although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For INTECH U.S. Managed Volatility Fund, the Trustees noted that the Fund’s total expenses exceeded the peer group mean for one share class. The Trustees also noted that Janus Capital had contractually agreed to limit the Fund’s expenses.
Growth and Core Funds
· For Janus Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Forty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
Janus Investment Fund | 47 |
Janus Emerging Markets Fund
Additional Information (unaudited)
· For Janus Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Triton Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Twenty Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Venture Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
Global and International Funds
· For Janus Asia Equity Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Emerging Markets Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Global Select Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
· For Janus International Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group mean for all share classes.
Janus Aspen Series
· For Janus Aspen Balanced Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
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Janus Emerging Markets Fund
Additional Information (unaudited)
· For Janus Aspen Enterprise Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Flexible Bond Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital had contractually agreed to limit the Fund’s expenses.
· For Janus Aspen Forty Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Global Allocation Portfolio - Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Aspen Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Global Unconstrained Bond Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group mean for both share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital had contractually agreed to limit the Fund’s expenses.
· For Janus Aspen INTECH U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for its sole share class.
· For Janus Aspen Janus Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
· For Janus Aspen Perkins Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group mean for both share classes.
The Trustees reviewed information on the profitability to Janus Capital and its affiliates of their relationships with each Fund, as well as an explanation of the methodology utilized by Janus Capital when allocating various expenses of Janus Capital and its affiliates with respect to contractual relationships with the Funds and other clients. The Trustees also reviewed the financial statements and corporate structure of Janus Capital’s parent company. In their review, the Trustees considered whether Janus Capital and each subadviser receive adequate incentives and resources to manage the Funds effectively. The Trustees recognized that profitability comparisons among fund managers are difficult because very little comparative information is publicly available, and the profitability of any fund manager is affected by numerous factors, including the organizational structure of the particular fund manager, the types of funds and other accounts it manages, possible other lines of business, the methodology for allocating expenses, and the fund manager’s capital structure and cost of capital. However, taking into account those factors and the analysis provided by the Trustees’ independent fee consultant, and based on the information available, the Trustees concluded that Janus Capital’s profitability with respect to each Fund in relation to the services rendered was reasonable.
The independent fee consultant found that, while assessing the reasonableness of expenses in light of Janus Capital’s profits is dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons are limited in accuracy by differences in complex size, business mix, institutional account orientation, and other factors, after accepting these limitations, the level of profit earned by Janus Capital from managing the Funds is reasonable.
The Trustees concluded that the management fees payable by each Fund to Janus Capital and its affiliates, as well as the fees paid by Janus Capital to the subadvisers of subadvised Funds, were reasonable in relation to the nature, extent, and quality of the services provided, taking into account the fees charged by other advisers for managing comparable mutual funds with similar strategies, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services
Janus Investment Fund | 49 |
Janus Emerging Markets Fund
Additional Information (unaudited)
provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of the Funds increase. They noted that their independent fee consultant provided an analysis of economies of scale, which included discussion of analysis from prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints, their independent fee consultant concluded that 85% of these Funds have contractual management fees (gross of waivers) below their Broadridge expense group averages and, overall, 80% of the Funds are below their respective expense group averages for contractual management fees. They also noted that for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing the Funds because they have not reached adequate scale. Moreover, as the assets of some of the Funds have declined in the past few years, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
The independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale considered in prior years, and their conflicting results, its analyses could not confirm or deny the existence of economies of scale in the Janus complex. Further, the independent fee consultant provided its belief that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or Janus Capital, and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
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Janus Emerging Markets Fund
Useful Information About Your Fund Report (unaudited)
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was March 31, 2016. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus in general.
Performance Overviews
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices. When comparing the performance of the Fund with an index, keep in mind that market indices are not available for investment and do not reflect deduction of expenses.
Average annual total returns are quoted for a Fund with more than one year of performance history. 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 redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
Schedule of Investments
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, and swaps follow the Fund’s Schedule of Investments (if applicable).
Statement of Assets and Liabilities
This statement is often referred to as the “balance sheet.” It lists the assets and liabilities of the Fund on the last day of the reporting period.
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Janus Emerging Markets Fund
Useful Information About Your Fund Report (unaudited)
The Fund’s assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. 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’s net assets. Because the Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, 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/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. Also included are ratios of expenses and net investment income to average net assets.
52 | MARCH 31, 2016 |
Janus Emerging Markets Fund
Useful Information About Your Fund Report (unaudited)
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio manager(s) and/or investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal 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 entire portfolio is traded every six months.
Janus Investment Fund | 53 |
Janus provides access to a wide range of investment disciplines.
Alternative
Janus alternative funds seek to deliver strong risk-adjusted returns over a full market cycle with lower correlation to equity markets than traditional investments.
Asset Allocation
Janus’ asset allocation funds utilize our fundamental, bottom-up research to balance risk over the long term. From fund options that meet investors’ risk tolerance and objectives to a method that incorporates non-traditional investment choices to seek non-correlated sources of risk and return, Janus’ asset allocation funds aim to allocate risk more effectively.
Fixed Income
Janus fixed income funds attempt to provide less risk relative to equities while seeking to deliver a competitive total return through high current income and appreciation. Janus money market funds seek capital preservation and liquidity with current income as a secondary objective.
Global & International
Janus global and international 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.
Growth & Core
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. Janus core funds seek investments in more stable and predictable companies. Our core funds look for a strategic combination of steady growth and, for certain funds, some degree of income.
Mathematical
Our mathematical funds seek to outperform their respective indices while maintaining a risk profile equal to or lower than the index itself. Managed by INTECH® (a Janus subsidiary), these funds use a mathematical process in an attempt to build a more “efficient” portfolio than the index.
Value
Our value funds, managed by Perkins® (a Janus subsidiary), seek to identify companies with favorable reward to risk characteristics by conducting rigorous downside analysis before determining upside potential.
For more information about our funds, contact your investment professional or go to janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold Shares directly with Janus).
| ||||||||||||
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary prospectus containing this and other information, please call Janus at 877.33JANUS (52687) (or 800.525.3713 if you hold Shares directly with Janus); or download the file from janus.com/info (or janus.com/reports if you hold Shares directly with Janus). Read it carefully before you invest or send money. | ||||||||||||
Janus, INTECH and Perkins are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC. Funds distributed by Janus Distributors LLC | ||||||||||||
Investment products offered are: | NOT FDIC-INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | |||||||||
C-0516-1628 | 125-24-93039 05-16 | |||||||||||
SEMIANNUAL REPORT March 31, 2016 | |||
Janus Enterprise Fund | |||
Janus Investment Fund | |||
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HIGHLIGHTS · Portfolio management perspective · Investment strategy behind your fund · Fund performance, characteristics | |||
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Table of Contents
Janus Enterprise Fund
Janus Enterprise Fund (unaudited)
PERFORMANCE OVERVIEW
Janus Enterprise Fund’s Class T Shares returned 7.71% over the six-month period ended March 31, 2016. The Fund’s benchmark, the Russell Midcap Growth Index, returned 4.72%.
INVESTMENT ENVIRONMENT
U.S. indices rallied early in the period, continuing their recovery from the summer sell-off. Volatility returned in November as corporate earnings, in aggregate, were subdued and manufacturing data weighed on sentiment. Monetary policy again influenced markets in December as the Federal Reserve (Fed) raised interest rates for the first time in nearly a decade. Weak manufacturing data and an underwhelming holiday shopping season caused some to question whether the U.S. economy was sufficiently healthy to merit the cadence of rate hikes that the Fed had projected. As the calendar turned to 2016, worries re-emerged about the trajectory of the global economy. Crude oil prices resumed their slide, dropping to levels not seen in over a decade. Stocks also fell, once again entering correction territory. However, stocks rallied again toward the end of the period as investors began to price in the expectation that the Fed would lower its expected rate hike trajectory.
PERFORMANCE DISCUSSION
The Fund outperformed its benchmark, the Russell Midcap Growth Index, for the period. Our Fund tends to emphasize companies that we believe have more predictable business models, recurring revenue streams and strong competitive positioning that allows them to take market share and experience sustainable long-term growth. As part of our focus on companies with more sustainable growth profiles, we also tend to favor companies that have strong free cash flow growth and high levels of return on invested capital. In an environment in which the market questioned the ability of some companies to carry out growth initiatives without access to cheap debt markets, the Fund’s focus on these companies with more durable growth profiles added to our relative performance.
Our performance this period was driven by strong results from a number of companies in our portfolio. Semiconductor company KLA-Tencor was our top contributor to performance. The stock was up after it was announced early in the period that KLA-Tencor would be acquired by Lam Research Corp. We were not surprised to see KLA-Tencor become an acquisition target. In our view, the company is a leader in the production of metrology and inspection equipment that is used by semiconductor manufacturers. That equipment is in increasing demand as semiconductor manufacturers keep making semiconductors smaller and smaller. We believe KLA’s business likely will be a good complement to Lam Research, which supplies wafer fabrication equipment to semiconductor manufacturers.
Lamar Advertising, which has an extensive network of billboards, was also a leading contributor. We like the company’s growth potential as it uses more digital billboards, which allow it to display more advertisements on each sign. We also like that outdoor billboard advertisements are more insulated from the transition of traditional media advertising spending to digital media.
Another top contributor during the period was Henry Schein, the leading office based distributor for dental, veterinary and medical supplies on a global basis. Henry Schein participates in markets that are generally gross domestic product (GDP) plus growers and they get an additional growth kicker by taking share from small competitors. Henry Schein’s size and scale allow it to offer competitive pricing to customers while earning higher margins and returns than competitors through better fixed cost leverage and procurement. This scale advantage and long term growth record has resulted in strong free-cash-flow generation and high returns on invested capital over a multi-year period.
Janus Investment Fund | 1 |
Janus Enterprise Fund (unaudited)
While generally pleased with our performance during the period, we did hold some stocks that had disappointing results. LPL Financial was our largest detractor from performance. We originally initiated our investment in LPL as we see more financial advisors leaving wire-houses and moving to independent broker dealers and registered investment advisors. As the largest platform for independent advisors in the U.S., LPL has benefited from this trend. The firm is also well positioned to gain from the shift to an environment of rising interest rates, which we expect will boost earnings related to cash held on customers’ balance sheets.
LPL’s share price suffered during the period due to a range of factors. First, the firm has faced compliance difficulties and fines associated with its out-of-date operational technology systems. Though the company is spending to get its systems up to speed, progress has been slow. Secondly, the firm initiated a stock buy-back in the fourth quarter of 2015, just ahead of the market downturn. Finally, LPL is grappling with regulatory concerns related to certain parts of its business model, as well as declining revenues linked to certain commissions-based products that have become out of favor. Going forward, LPL faces significant pressure to deliver on its margin goals. In its favor is the fact that the company has a high level of discretionary expenses that could be cut to manage its bottom line. We believe our expectations for the stock are appropriately set.
Sensata Technologies, a producer of sensors and controls used in automotive, appliance, aircraft and industrial manufacturing, also detracted. Sensata’s share price fell at the beginning of 2016, along with other industrial companies with exposure to the automobile market, following the release of data that showed slowing auto sales. In addition, Sensata had lower than expected earnings for the fourth quarter of 2015, driven by weakness in its sensors and controls business, which is closely linked to consumer electronics. Sensata’s highly leveraged balance sheet has also remained a concern among investors.
Once valued as a growth stock, Sensata is now valued more like a cyclical company. Nevertheless, the company has demonstrated its ability to grow through full market cycles, and we believe is poised to continue that record. We expect moderate growth to continue at Sensata, with high returns on capital in the months ahead. For these reasons, we continue to hold our shares.
Endo International also detracted. The stock declined during the fourth quarter of 2015 on the company’s announcement of a write-down of an acquisition completed earlier this year. Investor concerns also arose over the purchase price Endo paid for Par Pharmaceutical in September, with the conclusion being that Endo overpaid for the acquisition. We sold our shares in Endo during the fourth quarter of 2015 due to concerns about the company’s ability to successfully generate value through its strategy of acquiring other pharmaceutical companies.
Please see the Derivative Instruments section in the “Notes to Financial Statements” for derivatives used by the Fund.
OUTLOOK
In the months ahead, we expect heightened volatility to continue, driven by uncertainty in the political environment and global geopolitical arena. During times of heightened uncertainty, a company’s financial strength becomes that much more important, especially in an environment like today’s where interest rates are expected to edge higher and the cost of capital is on the rise.
We will continue to pursue investment opportunities for the Fund on a stock by stock basis, staying focused on companies with strategic competitive advantages, reasonable valuations, strong balance sheets, and durable growth prospects.
Thank you for your investment in Janus Enterprise Fund.
2 | MARCH 31, 2016 |
Janus Enterprise Fund (unaudited)
Fund At A Glance
March 31, 2016
5 Top Performers - Holdings |
|
|
| 5 Bottom Performers - Holdings |
| |
Contribution | Contribution | |||||
KLA-Tencor Corp. | 0.50% | LPL Financial Holdings, Inc. | -0.58% | |||
Lamar Advertising Co. - Class A | 0.49% | Sensata Technologies Holding NV | -0.34% | |||
Henry Schein, Inc. | 0.48% | Endo International PLC | -0.30% | |||
Crown Castle International Corp. | 0.42% | Wolverine World Wide, Inc. | -0.18% | |||
Jack Henry & Associates, Inc. | 0.40% | Polaris Industries, Inc. | -0.13% | |||
5 Top Performers - Sectors* |
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|
|
| |
Fund Weighting | Russell Midcap® Growth Index | |||||
Fund Contribution | (Average % of Equity) | Weighting | ||||
Information Technology | 2.48% | 31.59% | 19.69% | |||
Health Care | 1.79% | 16.66% | 13.05% | |||
Financials | 0.45% | 13.58% | 11.93% | |||
Consumer Discretionary | 0.32% | 10.88% | 24.76% | |||
Energy | 0.26% | 0.80% | 0.77% | |||
5 Bottom Performers - Sectors* |
|
|
|
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| |
Fund Weighting | Russell Midcap® Growth Index | |||||
Fund Contribution | (Average % of Equity) | Weighting | ||||
Industrials | -0.68% | 19.05% | 15.87% | |||
Consumer Staples | -0.57% | 1.00% | 8.43% | |||
Materials | -0.38% | 1.14% | 5.01% | |||
Other** | -0.13% | 5.30% | 0.00% | |||
Utilities | -0.02% | 0.00% | 0.10% | |||
Security contribution to performance is measured by using an algorithm that multiplies the daily performance of each security with the previous day’s ending weight in the portfolio and is gross of advisory fees. Fixed income securities and certain equity securities, such as private placements and some share classes of equity securities, are excluded. | ||||||
* | Based on sector classification according to the Global Industry Classification Standard (“GICS”) codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |||||
** | Not a GICS classified sector. | |||||
Janus Investment Fund | 3 |
Janus Enterprise Fund (unaudited)
Fund At A Glance
March 31, 2016
5 Largest Equity Holdings - (% of Net Assets) | |
Crown Castle International Corp. | |
Real Estate Investment Trusts (REITs) | 3.1% |
Sensata Technologies Holding NV | |
Electrical Equipment | 2.6% |
Verisk Analytics, Inc. | |
Professional Services | 2.6% |
Lamar Advertising Co. - Class A | |
Real Estate Investment Trusts (REITs) | 2.5% |
Amdocs, Ltd. (U.S. Shares) | |
Information Technology Services | 2.1% |
12.9% | |
Asset Allocation - (% of Net Assets) | |||||
Common Stocks | 95.1% | ||||
Investment Companies | 12.9% | ||||
Other | (8.0)% | ||||
100.0% | |||||
Top Country Allocations - Long Positions - (% of Investment Securities) | |
As of March 31, 2016
| As of September 30, 2015
|
4 | MARCH 31, 2016 |
Janus Enterprise Fund (unaudited)
Performance
See important disclosures on the next page. |
| Expense Ratios - | |||||||||
Average Annual Total Return - for the periods ended March 31, 2016 |
|
| per the January 28, 2016 prospectuses | |||||||
|
| Fiscal
| One
| Five | Ten
| Since |
|
| Total Annual Fund
| |
Class A Shares at NAV |
| 7.60% | -1.01% | 10.77% | 8.72% | 10.41% |
|
| 1.14% | |
Class A Shares at MOP |
| 1.41% | -6.71% | 9.46% | 8.08% | 10.13% |
|
|
| |
Class C Shares at NAV | 7.25% | -1.66% | 9.99% | 7.89% | 9.62% |
|
| 1.78% | ||
Class C Shares at CDSC |
| 6.25% | -2.61% | 9.99% | 7.89% | 9.62% |
|
|
| |
Class D Shares(1) |
| 7.76% | -0.74% | 11.06% | 8.93% | 10.53% |
|
| 0.84% | |
Class I Shares |
| 7.79% | -0.65% | 11.16% | 8.88% | 10.51% |
|
| 0.74% | |
Class N Shares |
| 7.83% | -0.57% | 10.98% | 8.88% | 10.51% |
|
| 0.67% | |
Class R Shares |
| 7.44% | -1.31% | 10.42% | 8.32% | 10.02% |
|
| 1.42% | |
Class S Shares |
| 7.58% | -1.07% | 10.71% | 8.60% | 10.28% |
|
| 1.17% | |
Class T Shares |
| 7.71% | -0.81% | 10.98% | 8.88% | 10.51% |
|
| 0.92% | |
Russell Midcap® Growth Index |
| 4.72% | -4.75% | 9.99% | 7.43% | 9.71% |
|
|
| |
Morningstar Quartile - Class T Shares |
| - | 1st | 1st | 1st | 2nd |
|
|
| |
Morningstar Ranking - based on total returns for Mid-Cap Growth Funds |
| - | 52/736 | 50/672 | 36/616 | 47/160 |
|
|
| |
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 877.33JANUS(52687) (or 800.525.3713 if you hold shares directly with Janus Capital) or visit janus.com/advisor/mutual-funds (or janus.com/allfunds if you hold shares directly with Janus Capital).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
Janus Investment Fund | 5 |
Janus Enterprise Fund (unaudited)
Performance
A Fund’s performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.
Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility, lower liquidity and differing financial and information reporting standards, all of which are magnified in emerging markets.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
See Financial Highlights for actual expense ratios during the reporting period.
Class A Shares, Class C Shares, Class R Shares, and Class S Shares commenced operations on July 6, 2009. Performance shown for each class for periods prior to July 6, 2009, reflects the performance of the Fund’s Class J Shares, the initial share class (renamed Class T Shares effective February 16, 2010), calculated using the fees and expenses of each respective class, without the effect of any fee and expense limitations or waivers.
Class D Shares commenced operations on February 16, 2010. Performance shown for periods prior to February 16, 2010, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
Class I Shares commenced operations on July 6, 2009. Performance shown for periods prior to July 6, 2009, reflects the performance of the Fund’s former Class J Shares, calculated using the fees and expenses of Class J Shares, net of any applicable fee and expense limitations or waivers.
Class N Shares commenced operations on July 12, 2012. Performance shown for periods prior to July 12, 2012, reflects the performance of the Fund's Class T Shares, calculated using the fees and expenses of Class T Shares, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2016 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
A Fund’s portfolio may differ significantly from the securities held in an index. An index is unmanaged and not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio.
See “Useful Information About Your Fund Report.”
*The Fund’s inception date – September 1, 1992
(1) Closed to certain new investors.
6 | MARCH 31, 2016 |
Janus Enterprise Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, 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 appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Actual | Hypothetical
| |||||||||
| Beginning | Ending | Expenses |
| Beginning | Ending | Expenses | Net Annualized | ||
Class A Shares | $1,000.00 | $1,076.00 | $5.92 |
| $1,000.00 | $1,019.30 | $5.76 | 1.14% | ||
Class C Shares | $1,000.00 | $1,072.50 | $9.33 |
| $1,000.00 | $1,016.00 | $9.07 | 1.80% | ||
Class D Shares | $1,000.00 | $1,077.60 | $4.36 |
| $1,000.00 | $1,020.80 | $4.24 | 0.84% | ||
Class I Shares | $1,000.00 | $1,077.90 | $4.00 |
| $1,000.00 | $1,021.15 | $3.89 | 0.77% | ||
Class N Shares | $1,000.00 | $1,078.30 | $3.48 |
| $1,000.00 | $1,021.65 | $3.39 | 0.67% | ||
Class R Shares | $1,000.00 | $1,074.40 | $7.36 |
| $1,000.00 | $1,017.90 | $7.16 | 1.42% | ||
Class S Shares | $1,000.00 | $1,075.80 | $6.07 |
| $1,000.00 | $1,019.15 | $5.91 | 1.17% | ||
Class T Shares | $1,000.00 | $1,077.10 | $4.78 |
| $1,000.00 | $1,020.40 | $4.65 | 0.92% | ||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. | |||||||||
Janus Investment Fund | 7 |
Janus Enterprise Fund
Schedule of Investments (unaudited)
March 31, 2016
| Value | ||||||
Common Stocks – 95.1% | |||||||
Aerospace & Defense – 2.2% | |||||||
HEICO Corp. - Class A | 903,513 | $43,007,219 | |||||
Teledyne Technologies, Inc.* | 933,067 | 82,240,525 | |||||
TransDigm Group, Inc.*,# | 161,765 | 35,643,300 | |||||
160,891,044 | |||||||
Air Freight & Logistics – 1.3% | |||||||
Expeditors International of Washington, Inc.# | 1,976,829 | 96,489,023 | |||||
Airlines – 1.0% | |||||||
Ryanair Holdings PLC (ADR) | 881,324 | 75,635,226 | |||||
Biotechnology – 2.7% | |||||||
AbbVie, Inc. | 497,534 | 28,419,142 | |||||
Celgene Corp.*,† | 863,429 | 86,420,609 | |||||
Medivation, Inc.* | 1,839,912 | 84,599,154 | |||||
199,438,905 | |||||||
Building Products – 0.6% | |||||||
AO Smith Corp. | 622,356 | 47,491,986 | |||||
Capital Markets – 2.5% | |||||||
LPL Financial Holdings, Inc.# | 2,512,177 | 62,301,990 | |||||
TD Ameritrade Holding Corp. | 3,781,716 | 119,237,505 | |||||
181,539,495 | |||||||
Chemicals – 0.4% | |||||||
Potash Corp. of Saskatchewan, Inc. (U.S. Shares) | 1,920,011 | 32,678,587 | |||||
Commercial Services & Supplies – 2.3% | |||||||
Edenred# | 2,164,709 | 42,039,640 | |||||
Ritchie Bros Auctioneers, Inc. (U.S. Shares)† | 4,696,766 | 127,188,423 | |||||
169,228,063 | |||||||
Containers & Packaging – 0.8% | |||||||
Sealed Air Corp. | 1,176,459 | 56,481,797 | |||||
Diversified Consumer Services – 1.2% | |||||||
ServiceMaster Global Holdings, Inc.* | 2,286,046 | 86,138,213 | |||||
Diversified Financial Services – 3.3% | |||||||
FactSet Research Systems, Inc. | 172,635 | 26,159,382 | |||||
Markit, Ltd.*,# | 3,002,941 | 106,153,964 | |||||
MSCI, Inc. | 1,459,402 | 108,112,500 | |||||
240,425,846 | |||||||
Electrical Equipment – 3.3% | |||||||
AMETEK, Inc. | 986,751 | 49,317,815 | |||||
Sensata Technologies Holding NV* | 5,004,909 | 194,390,666 | |||||
243,708,481 | |||||||
Electronic Equipment, Instruments & Components – 5.8% | |||||||
Amphenol Corp. - Class A | 1,334,772 | 77,176,517 | |||||
Belden, Inc. | 1,192,310 | 73,183,988 | |||||
Flextronics International, Ltd.* | 7,386,063 | 89,075,920 | |||||
National Instruments Corp.# | 2,747,143 | 82,716,476 | |||||
TE Connectivity, Ltd. (U.S. Shares) | 1,674,153 | 103,663,554 | |||||
425,816,455 | |||||||
Food Products – 0.9% | |||||||
Mead Johnson Nutrition Co. | 825,531 | 70,145,369 | |||||
Health Care Equipment & Supplies – 6.7% | |||||||
Boston Scientific Corp.* | 7,851,452 | 147,685,812 | |||||
Masimo Corp.* | 870,802 | 36,434,356 | |||||
STERIS PLC | 563,905 | 40,065,450 | |||||
Teleflex, Inc.# | 774,025 | 121,529,665 | |||||
Varian Medical Systems, Inc.*,# | 1,839,446 | 147,192,469 | |||||
492,907,752 | |||||||
Health Care Providers & Services – 1.7% | |||||||
Henry Schein, Inc.*,† | 728,487 | 125,758,711 | |||||
Health Care Technology – 2.1% | |||||||
athenahealth, Inc.*,# | 696,508 | 96,661,380 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
8 | MARCH 31, 2016 |
Janus Enterprise Fund
Schedule of Investments (unaudited)
March 31, 2016
| Value | ||||||
Common Stocks – (continued) | |||||||
Health Care Technology – (continued) | |||||||
IMS Health Holdings, Inc.* | 2,271,880 | $60,318,414 | |||||
156,979,794 | |||||||
Hotels, Restaurants & Leisure – 2.2% | |||||||
Aramark | 1,167,484 | 38,667,070 | |||||
Dunkin' Brands Group, Inc.# | 2,586,422 | 122,001,526 | |||||
160,668,596 | |||||||
Industrial Conglomerates – 0.9% | |||||||
Roper Industries, Inc. | 344,960 | 63,048,339 | |||||
Information Technology Services – 10.5% | |||||||
Amdocs, Ltd. (U.S. Shares) | 2,581,679 | 155,985,045 | |||||
Broadridge Financial Solutions, Inc. | 2,216,905 | 131,484,636 | |||||
Fidelity National Information Services, Inc. | 1,419,575 | 89,873,293 | |||||
Gartner, Inc.* | 744,155 | 66,490,249 | |||||
Global Payments, Inc. | 1,218,326 | 79,556,688 | |||||
Jack Henry & Associates, Inc. | 1,544,084 | 130,583,184 | |||||
WEX, Inc.*,# | 1,455,812 | 121,356,488 | |||||
775,329,583 | |||||||
Insurance – 1.8% | |||||||
Aon PLC | 1,289,437 | 134,681,695 | |||||
Internet Software & Services – 2.6% | |||||||
Cimpress NV*,# | 1,034,246 | 93,795,770 | |||||
CoStar Group, Inc.*,# | 523,965 | 98,594,494 | |||||
192,390,264 | |||||||
Leisure Products – 0.6% | |||||||
Polaris Industries, Inc.# | 426,761 | 42,027,423 | |||||
Life Sciences Tools & Services – 3.7% | |||||||
Bio-Techne Corp. | 332,010 | 31,381,585 | |||||
Mettler-Toledo International, Inc.* | 83,705 | 28,858,136 | |||||
PerkinElmer, Inc. | 2,651,733 | 131,154,714 | |||||
Waters Corp.* | 599,958 | 79,146,459 | |||||
270,540,894 | |||||||
Machinery – 2.3% | |||||||
Middleby Corp.*,# | 552,743 | 59,016,370 | |||||
Rexnord Corp.*,† | 3,904,927 | 78,957,624 | |||||
Wabtec Corp.# | 420,064 | 33,306,875 | |||||
171,280,869 | |||||||
Media – 1.5% | |||||||
Omnicom Group, Inc.# | 1,349,054 | 112,281,764 | |||||
Multiline Retail – 1.1% | |||||||
Dollar General Corp. | 526,813 | 45,095,193 | |||||
Dollar Tree, Inc.* | 468,746 | 38,652,795 | |||||
83,747,988 | |||||||
Oil, Gas & Consumable Fuels – 0.6% | |||||||
World Fuel Services Corp. | 894,025 | 43,431,735 | |||||
Professional Services – 2.6% | |||||||
Verisk Analytics, Inc.*,# | 2,373,526 | 189,692,198 | |||||
Real Estate Investment Trusts (REITs) – 5.6% | |||||||
Crown Castle International Corp. | 2,612,278 | 225,962,047 | |||||
Lamar Advertising Co. - Class A | 3,045,705 | 187,310,858 | |||||
413,272,905 | |||||||
Road & Rail – 0.8% | |||||||
Canadian Pacific Railway, Ltd. (U.S. Shares) | 467,277 | 62,002,985 | |||||
Semiconductor & Semiconductor Equipment – 6.0% | |||||||
Atmel Corp. | 6,301,764 | 51,170,324 | |||||
KLA-Tencor Corp. | 1,243,170 | 90,515,208 | |||||
Lam Research Corp.# | 850,320 | 70,236,432 | |||||
Microchip Technology, Inc.# | 1,331,796 | 64,192,567 | |||||
ON Semiconductor Corp.* | 7,326,543 | 70,261,547 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 9 |
Janus Enterprise Fund
Schedule of Investments (unaudited)
March 31, 2016
| Value | |||||||
Common Stocks – (continued) | ||||||||
Semiconductor & Semiconductor Equipment – (continued) | ||||||||
Xilinx, Inc. | 2,071,340 | $98,243,656 | ||||||
444,619,734 | ||||||||
Software – 8.5% | ||||||||
Apptio, Inc.*,§ | 181,903 | 4,128,216 | ||||||
Atlassian Corp PLC - Class A* | 1,236,369 | 31,094,680 | ||||||
Cadence Design Systems, Inc.* | 5,185,404 | 122,271,826 | ||||||
Constellation Software, Inc. | 273,917 | 112,171,817 | ||||||
Intuit, Inc. | 954,670 | 99,295,227 | ||||||
NICE Systems, Ltd. (ADR)# | 2,269,298 | 147,027,817 | ||||||
SS&C Technologies Holdings, Inc.# | 1,753,656 | 111,216,864 | ||||||
627,206,447 | ||||||||
Specialty Retail – 1.0% | ||||||||
Monro Muffler Brake, Inc.# | 323,388 | 23,112,540 | ||||||
Williams-Sonoma, Inc. | 885,643 | 48,480,098 | ||||||
71,592,638 | ||||||||
Textiles, Apparel & Luxury Goods – 3.5% | ||||||||
Carter's, Inc. | 609,600 | 64,239,648 | ||||||
Gildan Activewear, Inc. | 4,355,395 | 132,883,101 | ||||||
Wolverine World Wide, Inc. | 3,224,442 | 59,394,222 | ||||||
256,516,971 | ||||||||
Trading Companies & Distributors – 0.5% | ||||||||
Fastenal Co.# | 735,087 | 36,019,263 | ||||||
Total Common Stocks (cost $5,462,844,876) | 7,012,107,038 | |||||||
Investment Companies – 12.9% | ||||||||
Investments Purchased with Cash Collateral from Securities Lending – 7.2% | ||||||||
Janus Cash Collateral Fund LLC, 0.4107%ºº,£ | 525,494,588 | 525,494,588 | ||||||
Money Markets – 5.7% | ||||||||
Janus Cash Liquidity Fund LLC, 0.3874%ºº,£ | 422,017,369 | 422,017,369 | ||||||
Total Investment Companies (cost $947,511,957) | 947,511,957 | |||||||
Total Investments (total cost $6,410,356,833) – 108.0% | 7,959,618,995 | |||||||
Liabilities, net of Cash, Receivables and Other Assets – (8.0)% | (587,739,950) | |||||||
Net Assets – 100% | $7,371,879,045 | |||||||
Summary of Investments by Country - (Long Positions) (unaudited) | |||||
% of Investment Securities | |||||
Country | Value | ||||
United States | $7,090,742,755 | 89.1 | % | ||
Canada | 466,924,913 | 5.9 | |||
Israel | 147,027,817 | 1.8 | |||
United Kingdom | 137,248,644 | 1.7 | |||
Ireland | 75,635,226 | 1.0 | |||
France | 42,039,640 | 0.5 | |||
Total | $7,959,618,995 | 100.0 | % |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
10 | MARCH 31, 2016 |
Janus Enterprise Fund
Schedule of Investments (unaudited)
March 31, 2016
Schedule of Foreign Currency Contracts, Open |
Counterparty/ Currency | Settlement Date | Currency Units Sold | Currency Value | Unrealized Appreciation/ (Depreciation) | ||||
Bank of America: | ||||||||
Euro | 4/14/16 | 10,500,000 | $ | 11,949,590 | $ | (293,014) | ||
Citibank NA: | ||||||||
Canadian Dollar | 4/28/16 | 25,192,000 | 19,400,250 | (307,590) | ||||
Euro | 4/28/16 | 1,800,000 | 2,049,410 | 2,960 | ||||
Euro | 4/28/16 | 24,598,000 | 28,006,333 | (501,833) | ||||
49,455,993 | (806,463) | |||||||
Credit Suisse International: | ||||||||
Canadian Dollar | 5/12/16 | 5,317,000 | 4,094,652 | 5,915 | ||||
Euro | 5/12/16 | 1,100,000 | 1,253,005 | 522 | ||||
5,347,657 | 6,437 | |||||||
HSBC Securities (USA), Inc.: | ||||||||
Canadian Dollar | 4/28/16 | 20,168,000 | 15,531,289 | (246,213) | ||||
Euro | 4/28/16 | 18,300,000 | 20,835,673 | (358,028) | ||||
36,366,962 | (604,241) | |||||||
JPMorgan Chase & Co.: | ||||||||
Euro | 4/14/16 | 21,040,000 | 23,944,701 | (539,448) | ||||
RBC Capital Markets Corp.: | ||||||||
Canadian Dollar | 5/12/16 | 25,310,000 | 19,491,374 | 53,087 | ||||
Euro | 5/12/16 | 21,200,000 | 24,148,817 | 20,243 | ||||
43,640,191 | 73,330 | |||||||
Total | $ | 170,705,094 | $ | (2,163,399) | ||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 11 |
Janus Enterprise Fund
Notes to Schedule of Investments and Other Information (unaudited)
Russell Midcap |