-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LaMgCV4UIL02GZAu8bTJNTCgDCfTkssXw6Rjtm4x4Y+VSdNixrv7lcKWI+tQhjLy TzFHCuoFBx4itbhnfDsDBg== 0000277751-96-000067.txt : 19960924 0000277751-96-000067.hdr.sgml : 19960924 ACCESSION NUMBER: 0000277751-96-000067 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19960923 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: JANUS INVESTMENT FUND CENTRAL INDEX KEY: 0000277751 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 840592523 STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 485APOS SEC ACT: 1933 Act SEC FILE NUMBER: 002-34393 FILM NUMBER: 96633141 BUSINESS ADDRESS: STREET 1: 100 FILLMORE ST STREET 2: STE 300 CITY: DENVER STATE: CO ZIP: 80206 BUSINESS PHONE: 3033333863 MAIL ADDRESS: STREET 1: 100 FILLMORE STREET STREET 2: SUITE 300 CITY: DENVER STATE: CO ZIP: 80203 FORMER COMPANY: FORMER CONFORMED NAME: JANUS FUND /MD/ DATE OF NAME CHANGE: 19870701 485APOS 1 JANUS INVESTMENT FUND PEA NO. 76 Registration No. 2-34393 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Pre-Effective Amendment No. /__/ Post-Effective Amendment No. 76 /X/ and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 Amendment No. 59 /X/ (Check appropriate box or boxes.) JANUS INVESTMENT FUND (Exact Name of Registrant as Specified in Charter) 100 Fillmore Street, Denver, Colorado 80206-4923 Address of Principal Executive Offices (Zip Code) Registrant's Telephone No., including Area Code: 303-333-3863 David C. Tucker - 100 Fillmore Street, Denver, Colorado 80206-4923 (Name and Address of Agent for Service) Approximate Date of Proposed Offering: November 22, 1996 It is proposed that this filing will become effective (check appropriate line): immediately upon filing pursuant to paragraph (b) of Rule 485. on (date) pursuant to paragraph (b) of Rule 485. X 60 days after filing pursuant to paragraph (a)(1) of Rule 485. on (date) pursuant to paragraph (a)(1) of Rule 485. 75 days after filing pursuant to paragraph (a)(2) of Rule 485. on (date) pursuant to paragraph (a)(2) of Rule 485. If appropriate, check the following line: this post-effective amendment designates a new effective date for a previously filed post-effective amendment. Registrant has registered an indefinite number of shares of beneficial interest under the Securities Act of 1933 pursuant to Rule 24f-2(a) and filed a Rule 24f-2 Notice on November 17, 1995, for the fiscal year ended October 31, 1995, with respect to all of its series in existence as of October 31, 1995. JANUS INVESTMENT FUND (Janus Money Market Fund - Service Shares) (Janus Government Money Market Fund - Service Shares) (Janus Tax-Exempt Money Market Fund - Service Shares) Cross Reference Sheet Between the Prospectus and Statement of Additional Information and Form N-1A Item (Cross Reference Sheets for other series of Janus Investment Fund are included in previous post-effective amendments related to those series) FORM N-1A ITEM CAPTION IN PROSPECTUS PART A 1. Cover Page Cover Page 2. Synopsis Cover Page; Expense Information 3. Condensed Financial Performance Information 4. General Description of Investment Objectives, Policies, and Registrant Techniques 5. Management of the Fund Management of the Fund 5A. Management's Discussion of Investment Adviser and Administrator Fund Performance 6. Capital Stock and Other Distributions and Taxes; Shareholder's Securities Guide 7. Purchase of Securities Being Shareholder's Guide Offered 8. Redemption or Repurchase Shareholder's Guide 9. Pending Legal Proceedings Not Applicable FORM N-1A ITEM CAPTION IN STATEMENT OF ADDITIONAL INFORMATION PART B 10. Cover Page Cover Page 11. Table of Contents Table of Contents 12. General Information and Miscellaneous Information History 13. Investment Objectives and Investment Policies and Restrictions; Policies Types of Securities and Techniques 14. Management of the Fund Investment Adviser and Administrator; Officers and Trustees 15. Control Persons and Principal Not Applicable Holders of Securities 16. Investment Advisory and Investment Adviser and Administrator; Other Services Custodian, Transfer Agent and Certain Affiliations; Portfolio Transactions and Brokerage; Officers and Trustees; Miscellaneous Information 17. Brokerage Allocation and Portfolio Transactions and Brokerage Other Practices 18. Capital Stock and Other Purchase of Shares; Redemptions of Securities Shares; Miscellaneous Information 19. Purchase, Redemption and Purchase of Shares; Redemptions of Pricing of Securities Being Shares; Shareholder Accounts Offered 20. Tax Status Dividends and Tax Status 21. Underwriters Custodian, Transfer Agent and Certain Affiliations 22. Calculation of Performance Performance Data Data 23. Financial Statements Not Applicable CONTENTS - -------------------------------------------------------------------------------- FEE TABLE ............................................................................ 2 - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS ............................................................................ 3 - -------------------------------------------------------------------------------- INVESTMENT OBJECTIVES, POLICIES AND TECHNIQUES ............................................................................ 3 - -------------------------------------------------------------------------------- INVESTMENT ADVISER AND ADMINISTRATOR ............................................................................ 6 - -------------------------------------------------------------------------------- DISTRIBUTIONS AND TAXES ............................................................................ 7 - -------------------------------------------------------------------------------- PERFORMANCE ............................................................................ 8 - -------------------------------------------------------------------------------- MISCELLANEOUS INFORMATION ............................................................................ 9 - -------------------------------------------------------------------------------- SHAREHOLDER'S GUIDE Purchases ................................................................... 10 Redemptions ................................................................. 10 Shareholder Communications .................................................. 10 SUBJECT TO COMPLETION PRELIMINARY PROSPECTUS DATED SEPTEMBER 24, 1996 [LOGO] JANUS MONEY MARKET FUND JANUS GOVERNMENT MONEY MARKET FUND JANUS TAX-EXEMPT MONEY MARKET FUND Service Shares 100 Fillmore Street Denver, CO 80206-4923 ____________, 1996 Janus Money Market Fund, Janus Government Money Market Fund, and Janus Tax-Exempt Money Market Fund (individually, a "Fund" and, collectively, the "Funds") are designed for investors who seek maximum current income consistent with stability of capital. This prospectus offers a separate class of shares of each Fund (collectively, the "Shares") exclusively through banks and other financial institutions ("Financial Institutions") in connection with trust accounts, cash management programs and similar programs provided to their customers. Each Fund is a separate series of Janus Investment Fund (the "Trust"), an open-end management investment company. Each Fund invests exclusively in high quality money market instruments. AN INVESTMENT IN A FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT. THERE IS NO ASSURANCE THAT A FUND WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE. The Shares are offered with no sales charges, commissions, redemption fees, Rule 12b-1 fees or deferred sales charges. There is a $250,000 initial investment minimum by each Financial Institution. The Financial Institution may aggregate investments by all of its customers to achieve this minimum. There is no minimum amount required for subsequent investments. For complete details on how to purchase, redeem and exchange Shares, please see the Shareholder's Guide beginning at page 10. This prospectus contains information about the Shares that prospective investors should consider before investing and should be read carefully and retained for future reference. Additional information about the Shares is contained in the Statement of Additional Information ("SAI") dated November 22, 1996, which is filed with the Securities and Exchange Commission ("SEC") and is incorporated by reference into this Prospectus. The SAI is available upon request and without charge by writing or calling your Financial Institution. THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY STATE SECURITIES COMMISSION NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE OR OTHER JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN SUCH STATE OR OTHER JURISDICTION. INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. JANUS MONEY MARKET FUNDS - SERVICE SHARES PROSPECTUS 1 FEE TABLE SHAREHOLDER TRANSACTION EXPENSES (Applicable to each Fund) Sales Load Imposed on Purchases None Sales Load Imposed on Reinvested Dividends None Deferred Sales Load None Redemption Fees None Exchange Fee None ANNUAL OPERATING EXPENSES* (Expressed as a percentage of average net assets) - ------------------------------------------------------------------------------------------------------------------------------------ Management Other Total Operating Fee Expenses Expenses - ------------------------------------------------------------------------------------------------------------------------------------ Janus Money Market Fund - Service Shares 0.10% 0.30% 0.40% Janus Government Money Market Fund - Service Shares 0.10% 0.30% 0.40% Janus Tax-Exempt Money Market Fund - Service Shares 0.10% 0.30% 0.40% - ------------------------------------------------------------------------------------------------------------------------------------
*The fees and expenses in the table above are based on the estimated fees and expenses that the Service Shares of the Funds expect to incur in their initial fiscal year, net of fee waivers from the investment adviser. Without such waivers, the Management Fee, Other Expenses and Total Operating Expenses for Service Shares are estimated to be 0.20%, 0.40% and 0.60%, respectively. Janus Capital may modify or terminate the waivers at any time upon 90 days' notice to the Trustees. See "Investment Adviser and Administrator" for a more detailed discussion of the fees. EXAMPLE You would indirectly pay the following expenses on a $1,000 investment, assuming expense ratios remain as listed above and assuming a 5% annual return, with or without redemption at the end of each period: - ------------------------------------------------------------------------------------------------------------------------------------ 1 Year 3 Years - ------------------------------------------------------------------------------------------------------------------------------------ Janus Money Market Fund - Service Shares $4 $13 Janus Government Money Market Fund - Service Shares $4 $13 Janus Tax-Exempt Money Market Fund - Service Shares $4 $13 - ------------------------------------------------------------------------------------------------------------------------------------
THE EXPENSES IN THE EXAMPLE ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. THE ASSUMED 5% ANNUAL RETURN IS HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE ANNUAL RETURNS, WHICH MAY BE GREATER OR LESS THAN THE ASSUMED AMOUNT. The purpose of the preceding table and example is to assist the investor in understanding the various costs and expenses that an investor in each Fund will bear directly or indirectly. These expenses are described in greater detail under "Investment Adviser and Administrator." JANUS MONEY MARKET FUNDS - SERVICE SHARES PROSPECTUS 2 FINANCIAL HIGHLIGHTS No Financial Highlights are presented for the Shares because the Shares did not commence operations until November 22, 1996. INVESTMENT OBJECTIVES, POLICIES AND TECHNIQUES Unless otherwise stated, the investment objectives and policies set forth in this Prospectus are not fundamental and may be changed by the Trustees of the Trust (the "Trustees") without shareholder approval. Shareholders will be notified of material changes in investment objectives or policies. If there is a change in the investment objective or policies of any Fund, shareholders should consider whether that Fund remains an appropriate investment in light of their then current financial position and needs. The Funds are subject to additional investment policies and restrictions described in the SAI, some of which are fundamental and may not be changed without shareholder approval. INVESTMENT OBJECTIVES The investment objective of Janus Money Market Fund and Janus Government Money Market Fund is to seek maximum current income to the extent consistent with stability of capital. The investment objective of Janus Tax-Exempt Money Market Fund is to seek maximum current income that is exempt from federal income taxes to the extent consistent with stability of capital. There can be no assurance that a Fund will achieve its investment objective or that the Shares will be able to maintain a stable net asset value of $1.00 per share. COMMON INVESTMENT POLICIES The Funds will invest only in eligible high quality, short-term money market instruments that present minimal credit risks, as determined by Janus Capital Corporation, the Funds' investment adviser ("Janus Capital"), pursuant to procedures adopted by the Trustees. Each Fund may invest only in U.S. dollar-denominated instruments that have a remaining maturity of 397 days or less (as calculated pursuant to Rule 2a-7 under the Investment Company Act of 1940 ("1940 Act")) and will maintain a dollar-weighted average portfolio maturity of 90 days or less. Except to the limited extent permitted by Rule 2a-7 and except for U.S. Government Securities (as defined below), each Fund will not invest more than 5% of its total assets in the securities of any one issuer. A guarantor is not considered an issuer for the purpose of this limit, provided that the value of all securities held by a Fund that are issued or guaranteed by that institution does not exceed 10% of the Fund's total assets. Until the amendments to Rule 2a-7 become effective, up to 25% of Janus Tax-Exempt Money Market Fund's assets may be invested without regard to the foregoing limitations. To ensure adequate liquidity, no Fund may invest more than 10% of its net assets in illiquid investments, including repurchase agreements maturing in more than seven days (unless subject to a demand feature) and certain time deposits that are subject to early withdrawal penalties and mature in more than seven days. Because the Funds are typically used as a cash management vehicle, they intend to maintain a high degree of liquidity. Janus Capital determines and monitors the liquidity of portfolio securities under the supervision of the Trustees. Ratings. High quality money market instruments include those that (i) are rated (or, if unrated, are issued by an issuer with comparable outstanding short-term debt that is rated) in one of the two highest rating categories for short-term debt by any two nationally recognized statistical rating organizations ("NRSROs") or, if only one NRSRO has issued a rating, by that NRSRO or (ii) are otherwise unrated and determined by Janus Capital to be of comparable quality. Each Fund, except Janus Tax-Exempt Money Market Fund, will invest at least 95% of its total assets in securities in the highest rating category (as determined pursuant to Rule 2a-7). Descriptions of the rating categories of Standard & Poor's Ratings Services, Moody's Investors Service, Inc., and certain other NRSROs are contained in the SAI, as is a further description of the Funds' investment policies. Although each Fund only invests in high quality money market instruments, an investment in a Fund is subject to risk even if all securities in its portfolio are paid in full at maturity. All money market instruments, including U.S. Government Securities, can change in value as a result of changes in interest rates, the issuer's actual or perceived creditworthiness or the issuer's ability to meet its obligations. TYPES OF INVESTMENTS Janus Money Market Fund Janus Money Market Fund pursues its objective by investing primarily in high quality commercial paper and obligations of financial institutions. The Fund may also invest in U.S. Government Securities (as defined below) and municipal securities, although the Fund expects to invest in such securities to a lesser degree. Debt Obligations. The Fund may invest in debt obligations of domestic issuers, including commercial paper (short-term promissory notes issued by companies to finance their, or their affiliates', current obligations), notes and bonds, and variable amount master demand notes. The payment obligations on these instruments may be backed by securities, swap agreements or other assets, by the guarantee of a third party or solely by the unsecured promise of the issuer to make payments when due. The Fund may invest in privately issued commercial paper or other securities that are restricted as to disposition under the federal securities laws. In general, sales of these securities may not be made absent registration under the Securities Act of 1933 (the "1933 Act") or the availability of an appropriate exemption therefrom. Pursuant to Section 4(2) of the 1933 Act or Rule 144A adopted under the 1933 Act, however, some of these securities are eligible for resale to institutional investors, and accordingly, Janus Capital may determine that a liquid market exists for such a security pursuant to guidelines adopted by the Trustees. JANUS MONEY MARKET FUNDS - SERVICE SHARES PROSPECTUS 3 Obligations of Financial Institutions. The Fund may invest in obligations of financial institutions. Examples of obligations in which the Fund may invest include negotiable certificates of deposit, bankers' acceptances and time deposits of U.S. banks (including savings and loan associations) having total assets in excess of one billion dollars and U.S. branches of foreign banks having total assets in excess of ten billion dollars. The Fund may also invest in Eurodollar and Yankee bank obligations as discussed below. Certificates of deposit represent an institution's obligation to repay funds deposited with it that earn a specified interest rate over a given period. Bankers' acceptances are negotiable obligations of a bank to pay a draft which has been drawn by a customer and are usually backed by goods in international trade. Time deposits are non-negotiable deposits with a banking institution that earn a specified interest rate over a given period. Fixed time deposits, which are payable at a stated maturity date and bear a fixed rate of interest, generally may be withdrawn on demand by the Fund but may be subject to early withdrawal penalties that could reduce the Fund's yield. Unless there is a readily available market for them, time deposits that are subject to early withdrawal penalties and that mature in more than seven days will be treated as illiquid securities. Eurodollar or Yankee Obligations. The Fund may invest in Eurodollar and Yankee bank obligations. Eurodollar bank obligations are dollar-denominated certificates of deposit or time deposits issued outside the U.S. capital markets by foreign branches of U.S. banks and by foreign banks. Yankee bank obligations are dollar-denominated obligations issued in the U.S. capital markets by foreign banks. Eurodollar (and to a limited extent, Yankee) bank obligations are subject to certain sovereign risks. One such risk is the possibility that a foreign government might prevent dollar-denominated funds from flowing across its borders. Other risks include: adverse political and economic developments in a foreign country; the extent and quality of government regulation of financial markets and institutions; the imposition of foreign withholding taxes; and expropriation or nationalization of foreign issuers. U.S. Government Securities. The Fund may invest without limit in U.S. Government Securities as described below under "Janus Government Money Market Fund." Municipal Securities. The Fund may invest in obligations of states, territories or possessions of the United States and their subdivisions, authorities and corporations as described below under "Janus Tax-Exempt Money Market Fund." These obligations may pay interest that is exempt from federal income taxation. JANUS GOVERNMENT MONEY MARKET FUND Janus Government Money Market Fund pursues its objective by investing exclusively in obligations issued and/or guaranteed as to principal and interest by the United States government or by its agencies and instrumentalities and repurchase agreements secured by such obligations. U.S. Government Securities. U.S. Government Securities shall have the meaning set forth in the 1940 Act. The 1940 Act defines U.S. Government Securities to include securities issued or guaranteed by the U.S. government, its agencies and instrumentalities. U.S. Government Securities may also include repurchase agreements collateralized by and municipal securities escrowed with or refunded with U.S. government securities. U.S. Government Securities in which the Fund may invest include U.S. Treasury securities and obligations issued or guaranteed by U.S. government agencies and instrumentalities that are backed by the full faith and credit of the U.S. government, such as those guaranteed by the Small Business Administration or issued by the Government National Mortgage Association. In addition, U.S. Government Securities in which the Fund may invest include securities supported primarily or solely by the creditworthiness of the issuer, such as securities of the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation and the Tennessee Valley Authority. There is no guarantee that the U.S. government will support securities not backed by its full faith and credit. Accordingly, although these securities have historically involved little risk of loss of principal if held to maturity, they may involve more risk than securities backed by the full faith and credit of the U.S. government. Janus Tax-Exempt Money Market Fund Janus Tax-Exempt Money Market Fund pursues its objective by investing primarily in municipal securities whose interest is exempt from federal income taxes, including the federal alternative minimum tax. Although the Fund will attempt to invest substantially all of its assets in municipal securities whose interest is exempt from federal income taxes, the Fund reserves the right to invest up to 20% of the value of its net assets in securities whose interest is federally taxable. Additionally, when its portfolio manager is unable to locate investment opportunities with desirable risk/reward characteristics, the Fund may invest without limit in cash and cash equivalents, including obligations that may be federally taxable (see "Taxable Investments"). Municipal Securities. The municipal securities in which the Fund may invest include municipal notes and short-term municipal bonds. Municipal notes are generally used to provide for the issuer's short-term capital needs and generally have maturities of 397 days or less. Examples include tax anticipation and revenue anticipation notes, which generally are issued in anticipation of various seasonal revenues, bond anticipation notes, construction loan notes and tax-exempt commercial paper. Short-term municipal bonds may include "general obligation bonds," which are secured by the issuer's pledge of its faith, credit and taxing power for payment of principal and interest; "revenue bonds," which are generally paid from the revenues of a particular facility or a specific excise tax or other source; and "industrial development bonds," which are issued by or on behalf of public authorities JANUS MONEY MARKET FUNDS - SERVICE SHARES PROSPECTUS 4 to provide funding for various privately operated industrial and commercial facilities. The Fund may also invest in high quality participation interests in municipal securities. A more detailed description of various types of municipal securities is contained in Appendix B in the SAI. When the assets and revenues of an agency, authority, instrumentality or other political subdivision are separate from those of the government creating the issuing entity and a security is backed only by the assets and revenues of the issuing entity, that entity will be deemed to be the sole issuer of the security. Similarly, in the case of an industrial development bond backed only by the assets and revenues of the non-governmental issuer, the non-governmental issuer will be deemed to be the sole issuer of the bond. At times, the Fund may invest more than 25% of the value of its total assets in tax-exempt securities that are related in such a way that an economic, business, or political development or change affecting one such security could similarly affect the other securities; for example, securities whose issuers are located in the same state, or securities whose interest is derived from revenues of similar type projects. The Fund may also invest more than 25% of its assets in industrial development bonds or participation interests therein. Yields on municipal securities are dependent on a variety of factors, including the general conditions of the money market and of the municipal bond and municipal note markets, the size of a particular offering, the maturity of the obligation and the rating of the issue. The achievement of the Fund's investment objective is dependent in part on the continuing ability of the issuers of municipal securities in which the Fund invests to meet their obligations for the payment of principal and interest when due. Obligations of issuers of municipal securities are subject to the provisions of bankruptcy, insolvency and other laws affecting the rights and remedies of creditors, such as the Bankruptcy Reform Act of 1978, as amended. Therefore, the possibility exists that, as a result of litigation or other conditions, the ability of any issuer to pay, when due, the principal of and interest on its municipal securities may be materially affected. Municipal Leases. The Fund may invest in municipal leases or participation interests therein. Municipal leases are municipal securities which may take the form of a lease or an installment purchase or conditional sales contract. Municipal leases are issued by state and local governments and authorities to acquire a wide variety of equipment and facilities. Lease obligations may not be backed by the issuing municipality's credit and may involve risks not normally associated with general obligation bonds and other revenue bonds. For example, their interest may become taxable if the lease is assigned and the holders may incur losses if the issuer does not appropriate funds for the lease payment on an annual basis, which may result in termination of the lease and possible default. Janus Capital may determine that a liquid market exists for municipal lease obligations pursuant to guidelines established by the Trustees. Taxable Investments. As discussed above, although the Fund will attempt to invest substantially all of its assets in municipal securities whose interest is exempt from federal income tax, the Fund may under certain circumstances invest in certain securities whose interest is subject to such taxation. These securities include: (i) short-term obligations of the U.S. government, its agencies or instrumentalities, (ii) certificates of deposit, bankers' acceptances and interest-bearing savings deposits of banks having total assets of more than one billion dollars and whose deposits are insured by the Federal Deposit Insurance Corporation, (iii) commercial paper and (iv) repurchase agreements as described below covering any of the securities described in items (i)-(iii) above or any other obligations of the U.S. government, its agencies or instrumentalities. COMMON INVESTMENT TECHNIQUES Participation Interests. The Funds may invest in participation interests in any type of security in which the Funds may invest. A participation interest gives a Fund an undivided interest in the underlying securities in the proportion that the Fund's participation interest bears to the total principal amount of the underlying securities. Participation interests usually carry a demand feature, as described below, backed by a letter of credit or guarantee of the institution that issued the interests permitting the holder to tender them back to the institution. Demand Features. The Funds may invest in securities that are subject to puts and stand-by commitments ("demand features"). Demand features give the Fund the right to resell securities at specified periods prior to their maturity dates to the seller or to some third party at an agreed-upon price or yield. Securities with demand features may involve certain expenses and risks, including the inability of the issuer of the instrument to pay for the securities at the time the instrument is exercised, non-marketability of the instrument and differences between the maturity of the underlying security and the maturity of the instrument. Securities may cost more with demand features than without them. Demand features can serve three purposes: to shorten the maturity of a variable or floating rate security, to enhance the instrument's credit quality and to provide a source of liquidity. Demand features are often issued by third party financial institutions, generally domestic and foreign banks. Accordingly, the credit quality and liquidity of the Funds' investments may be dependent in part on the credit quality of the banks supporting the Funds' investments. This will result in exposure to risks pertaining to the banking industry, including the foreign banking industry. Brokerage firms and insurance companies also provide certain liquidity and credit support. A substantial portion of the Janus Tax-Exempt Money Market Fund's portfolio in particular may consist of securities backed by banks and other financial institutions, and thus adverse changes in the credit quality of these institutions could cause losses to the Fund and affect its share price. Variable and Floating Rate Securities. The securities in which the Funds invest may have variable or floating rates of interest. These securities pay interest JANUS MONEY MARKET FUNDS - SERVICE SHARES PROSPECTUS 5 at rates that are adjusted periodically according to a specified formula, usually with reference to some interest rate index or market interest rate. Securities with ultimate maturities of greater than 397 days may be purchased only pursuant to Rule 2a-7. Under that Rule, only those long-term instruments that have demand features which comply with certain requirements and certain variable rate U.S. Government Securities may be purchased. Similar to fixed rate debt instruments, variable and floating rate instruments are subject to changes in value based on changes in market interest rates or changes in the issuer's or guarantor's creditworthiness. The rate of interest on securities purchased by a Fund may be tied to short-term Treasury or other government securities or indices on securities that are permissible investments of the Funds, as well as other money market rates of interest. The Funds will not purchase securities whose values are tied to interest rates or indices that are not appropriate for the duration and volatility standards of a money market fund. Mortgage- and Asset-Backed Securities. Janus Money Market Fund and Janus Government Money Market Fund may purchase fixed or adjustable rate mortgage-backed securities issued by the Government National Mortgage Association, Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, or other governmental or government-related entities. In addition, Janus Money Market Fund may purchase other asset-backed securities, including securities backed by automobile loans, equipment leases or credit card receivables. These securities directly or indirectly represent a participation in, or are secured by and payable from, fixed or adjustable rate mortgage or other loans which may be secured by real estate or other assets. Unlike traditional debt instruments, payments on these securities include both interest and a partial payment of principal. Prepayments of the principal of underlying loans may shorten the effective maturities of these securities and may result in a Fund having to reinvest proceeds at a lower interest rate. Repurchase Agreements. Each Fund may seek additional income by entering into collateralized repurchase agreements. Repurchase agreements are transactions in which a Fund purchases securities and simultaneously commits to resell those securities to the seller at an agreed-upon price on an agreed-upon future date. The resale price reflects a market rate of interest that is not related to the coupon rate or maturity of the purchased securities. If the seller of the securities underlying a repurchase agreement fails to pay the agreed resale price on the agreed delivery date, a Fund may incur costs in disposing of the collateral and may experience losses if there is any delay in its ability to do so. Reverse Repurchase Agreements. Each Fund may enter into reverse repurchase agreements. Reverse repurchase agreements are transactions in which a Fund sells a security and simultaneously commits to repurchase that security from the buyer at an agreed upon price on an agreed upon future date. This technique will be used only for temporary or emergency purposes, such as meeting redemption requests, or to earn additional income on portfolio securities. Delayed Delivery Securities. Each Fund may purchase securities on a when-issued or delayed delivery basis. Securities so purchased are subject to market price fluctuation from the time of purchase but no interest on the securities accrues to a Fund until delivery and payment for the securities take place. Accordingly, the value of the securities on the delivery date may be more or less than the purchase price. Forward commitments will be entered into only when a Fund has the intention of taking possession of the securities, but a Fund may sell the securities before the settlement date if deemed advisable. Borrowing and Lending. Each Fund may borrow money for temporary or emergency purposes in amounts up to 25% of its total assets. A Fund may not mortgage or pledge securities except to secure permitted borrowings. As a fundamental policy, a Fund will not lend securities or other assets if, as a result, more than 25% of its total assets would be lent to other parties; however, the Funds do not currently intend to engage in securities lending. Each Fund intends to seek permission from the SEC to borrow money from or lend money to other funds that permit such transactions and are advised by Janus Capital. There is no assurance that such permission will be granted. INVESTMENT ADVISER AND ADMINISTRATOR INVESTMENT ADVISER Each Fund has a separate Investment Advisory Agreement with Janus Capital, 100 Fillmore Street, Denver, Colorado 80206-4923. Janus Capital has served as investment adviser to Janus Fund since 1970 and currently serves as investment adviser to all of the Janus funds, as well as adviser or subadviser to other mutual funds and individual, corporate, charitable and retirement accounts. Kansas City Southern Industries, Inc., a publicly traded holding company whose primary subsidiaries are engaged in transportation, information processing and financial services ("KCSI"), owns approximately 83% of the outstanding voting stock of Janus Capital. Thomas H. Bailey, the President and Chairman of the Board of Janus Capital, owns approximately 12% of its voting stock and, by agreement with KCSI, selects a majority of Janus Capital's Board. JANUS MONEY MARKET FUNDS - SERVICE SHARES PROSPECTUS 6 Pursuant to the Investment Advisory Agreements, Janus Capital furnishes continuous advice and recommendations concerning each Fund's investments. Each of the Funds has agreed to compensate Janus Capital for its advisory services by the monthly payment of a fee at the annual rate of 0.20% of the value of the average daily net assets of each Fund. Janus Capital has agreed to waive a portion of its fee and accordingly, the advisory fee of each Fund will be calculated at the annual rate of 0.10% of the value of each Fund's average daily net assets. Janus Capital may modify or terminate the waiver at any time upon 90 days' notice to the Trustees. ADMINISTRATOR Each of the Funds has also entered into an Administration Agreement with Janus Capital, pursuant to which Janus Capital furnishes certain administrative, compliance and accounting services for the Funds, pays the costs of printing reports and prospectuses for existing shareholders, provides office space for the Funds and pays the salaries, fees and expenses of all Fund officers and of those Trustees who are affiliated with Janus Capital. Administrative services provided by Janus Capital under the Administration Agreements include custody and transfer agency services. Janus Capital is paid an administration fee, calculated daily and paid monthly, at the annual rate of 0.40% of the value of the average daily net assets of each Fund attributable to Shares for services rendered pursuant to the Administration Agreements. Janus Capital has agreed to waive a portion of its fee and accordingly, the administration fee paid by the Shares will be calculated at the annual rate of 0.30% of the value of each Fund's average daily net assets attributable to the Shares. Janus Capital may modify or terminate this waiver at any time upon 90 days' notice to the Trustees. Each Fund pays all of its expenses not assumed by Janus Capital, including auditing fees and independent Trustees' fees and expenses. Janus Capital may use all or a portion of its administration fee to compensate Financial Institutions for providing administrative services to their customers who invest in the Shares. The types of services that the Financial Institutions would provide include serving as the sole shareholder of record, shareholder recordkeeping, processing and aggregating purchase and redemption transactions, providing periodic statements, forwarding shareholder reports and other materials, providing tax information, and providing other similar services that the Funds would have to perform if they were dealing directly with the beneficial owners, rather than the Financial Institutions, as shareholders of record. The Glass-Steagall Act prohibits a depository institution (such as a commercial bank or a savings and loan association) from being an underwriter or distributor of most securities. In the event the Glass-Steagall Act is deemed to prohibit depository institutions from acting in the administrative capacities described above or should Congress relax current restrictions on depository institutions, the Trustees will consider appropriate changes in the services. PORTFOLIO TRANSACTIONS Purchases and sales of securities on behalf of each Fund are executed by brokers and dealers selected by Janus Capital. Broker-dealers are selected on the basis of their ability to obtain best price and execution for the Funds' transactions and recognizing brokerage, research and other services provided to the Fund and to Janus Capital. Janus Capital may also consider payments made by brokers effecting transactions for a Fund i) to the Fund or ii) to other persons on behalf of the Fund for services provided to the Fund for which it would be obligated to pay. The Funds' Trustees have also authorized the Funds to place portfolio transactions on an agency basis with a broker-dealer that is affiliated with Janus Capital. Agency trades, if any, that are placed with such affiliated party serve to reduce certain expenses of the Funds. The SAI further explains the selection of broker-dealers. PERSONAL INVESTING Janus Capital does not permit portfolio managers to purchase and sell securities for their own accounts subject to Janus Capital's policy governing personal investing. Janus Capital's policy requires investment and other personnel to conduct their personal investment activities in a manner that Janus Capital believes is not detrimental to the Funds and Janus Capital's other advisory clients. See the SAI for more detailed information. DISTRIBUTIONS AND TAXES Dividends representing substantially all of the net investment income and any net realized gains on sales of securities are declared daily, Saturdays, Sundays and holidays included, and distributed on the last business day of each month. If a month begins on a Saturday, Sunday or holiday, dividends for those days are declared at the end of the preceding month and distributed on the first business day of the month. Distributions will be reinvested in Shares of a Fund unless otherwise elected by the shareholder pursuant to the options offered by the Financial Institution. Distributions for all of the Funds (except Janus Tax-Exempt Money Market Fund) are taxable income and are subject to federal income tax (except for shareholders exempt from income tax), whether such distributions are received in cash or are reinvested in additional Shares. Full JANUS MONEY MARKET FUNDS - SERVICE SHARES PROSPECTUS 7 information regarding the tax status of income dividends and any capital gains distributions will be mailed to Financial Institutions who will forward the information to their customers for tax purposes on or before January 31st of each year. Because the Funds are money market funds, they do not anticipate making any capital gains distributions. Janus Tax-Exempt Money Market Fund anticipates that substantially all income dividends it pays will be exempt from federal income tax. However, dividends attributable to interest on taxable investments, together with distributions from any net realized capital gains, are taxable. In addition, interest on certain private activity bonds is a preference item for purposes of the individual and corporate alternative minimum taxes. To the extent that the Fund earns such income, shareholders who are subject to the alternative minimum tax must include such income as a preference item. The Fund will advise shareholders of the percentage of dividends, if any, subject to the alternative minimum tax. Dividends and capital gains distributions may also be subject to state and local taxes. In certain states some portion of dividends and distributions (depending on the sources of the Fund's net income) of Janus Tax-Exempt Money Market Fund may be exempt from state and local taxes. Shareholders should consult their own tax advisor regarding exemption from any applicable state and local tax, as well as the tax treatment of any dividends or distributions from the Shares. The Funds intend to comply with provisions of the Internal Revenue Code applicable to investment companies, and thus it is not expected that any of the Funds will be required to pay any federal income or excise taxes. The SAI further explains the Funds' tax status. PERFORMANCE The Shares may measure performance in several ways, including "yield," "effective yield," and "tax equivalent yield" (for Janus Tax-Exempt Money Market Fund only). Yield is a way of showing the rate of income the Shares earn on investments as a percentage of the Share price. Yield represents the income, less expenses generated by an investment, in the Shares over a seven-day period expressed as an annual percentage rate. Effective yield is similar in that it is calculated over the same time frame, but instead the net investment income is compounded and then annualized. Due to the compounding effect, the effective yield will normally be higher than the yield. Shares of Janus Tax-Exempt Money Market Fund may also quote tax-equivalent yield, which shows the taxable yield an investor would have to earn before taxes to equal such Shares' tax-free yield. A tax-equivalent yield is calculated by dividing such Shares' tax-exempt yield by the result of one minus a stated federal tax rate. Only that portion of the Fund's income that is tax-exempt is adjusted in this calculation. Performance figures are based upon historical results and are not intended to indicate future performance. JANUS MONEY MARKET FUNDS - SERVICE SHARES PROSPECTUS 8 MISCELLANEOUS INFORMATION ORGANIZATION Each Fund is an open-end management investment company registered under the 1940 Act as a series of the Trust, which was created on February 11, 1986. Each Fund currently offers three classes of shares by separate prospectuses. The Shares offered by this Prospectus are available only through Financial Institutions that meet minimum investment requirements in connection with trust accounts, cash management programs and similar programs provided to their customers. A second class of shares, Institutional Shares of each Fund, are available only to institutional clients, including corporations, foundations and trusts, and individuals meeting certain initial investment requirements. A third class of shares, Investor Shares of each Fund, are available to the general public. Because the expenses of each class may differ, the performance of each class is expected to differ. If you would like additional information, please call 1-800-29JANUS. TRUSTEES The Trustees oversee the business affairs of the Trust and are responsible for major decisions relating to each Fund's investment objective and policies. The Trustees delegate the day-to-day management of the Funds to the officers of the Trust and meet at least quarterly to review the Funds' investment policies, performance, expenses and other business affairs. VOTING RIGHTS The Trust is not required to hold annual shareholder meetings. However, special meetings may be called for a specific class of shares, a specific Fund, or for the Trust as a whole, for purposes such as electing or removing Trustees, terminating or reorganizing the Trust, changing fundamental policies or voting on matters when required by the 1940 Act. Separate votes are taken by a separate Fund (or a separate class of shares) only if a matter affects or requires the vote of just that Fund (or those shares). Shareholders are entitled to cast one vote for each Share they own. CUSTODIAN, TRANSFER AGENT AND DISTRIBUTOR United Missouri Bank, N.A., P.O. Box 419226, Kansas City, Missouri 64141-6226, is the custodian of the Funds' assets. The custodian holds each Fund's assets in safekeeping and collects and remits the income thereon subject to the instructions of each Fund. Janus Service Corporation, P.O. Box 173375, Denver, Colorado 80217-3375, a wholly-owned subsidiary of Janus Capital, provides transfer agency and shareholder services for the Funds. Janus Distributors, Inc., 100 Fillmore Street, Denver, Colorado 80206-4923, a wholly-owned subsidiary of Janus Capital, is a distributor of the Shares. JANUS MONEY MARKET FUNDS - SERVICE SHARES PROSPECTUS 9 SHAREHOLDER'S GUIDE INVESTORS MAY NOT PURCHASE OR REDEEM SHARES OF THE FUNDS DIRECTLY. SHARES MAY BE PURCHASED OR REDEEMED ONLY THROUGH FINANCIAL INSTITUTIONS IN CONNECTION WITH TRUST ACCOUNTS, CASH MANAGEMENT PROGRAMS AND SIMILAR PROGRAMS. YOUR FINANCIAL INSTITUTION WILL PROVIDE YOU WITH INSTRUCTIONS ON PURCHASING OR REDEEMING SHARES. PURCHASES Purchases of Fund Shares may be made only through omnibus accounts of Financial Institutions in connection with trust accounts, cash management programs and similar programs. Your Financial Institution will provide you with instructions on purchasing Shares. All investments in the Funds are credited to a participating Financial Institution's omnibus account upon acceptance of the investment by a Fund. Investments will be processed at the NAV next determined after an order is received and accepted by a Fund. Each Fund reserves the right to reject any specific purchase order. Purchase orders may be refused if, in Janus Capital's opinion, they are of a size that would disrupt the management of a Fund. Any Fund may discontinue sales of its Shares if management believes that a substantial further increase may adversely affect that Fund's ability to achieve its investment objective. In such event, however, it is anticipated that existing Financial Institution customers in that Fund would be permitted to continue to authorize investment in such Fund and to reinvest any dividends or capital gains distributions. MINIMUM INVESTMENT There is a $250,000 initial aggregate investment minimum by each Financial Institution. The Funds may, in their discretion, waive this minimum under certain circumstances but, in such event, the minimum must be reached within 90 days of opening the account. Financial Institutions who do not maintain the $250,000 minimum will be given the option of requesting their customers to exchange into Investor Shares if the required minimum investment for Investor Shares is met or having their customers' Shares redeemed. NET ASSET VALUE The net asset value ("NAV") of the Shares is determined at the close of the regular trading session of the New York Stock Exchange (normally 4:00 p.m., New York time) each day that both the Exchange and the New York Federal Reserve Bank are open. NAV per share is determined by dividing the total value of the securities and other assets, less liabilities, by the total number of Shares outstanding. Portfolio securities are valued at their amortized cost. Amortized cost valuation involves valuing an instrument at its cost and thereafter assuming a constant amortization to maturity (or such other date as permitted by Rule 2a-7) of any discount or premium. If fluctuating interest rates cause the market value of a portfolio to deviate more than 1/2 of 1% from the value determined on the basis of amortized cost, the Trustees will consider whether any action, such as adjusting the Share's NAV to reflect current market conditions, should be initiated to prevent any material dilutive effect on shareholders. SHARE CERTIFICATES Share certificates are not available for the Shares in order to maintain the general liquidity that is representative of a money market fund and to help facilitate transactions in shareholder accounts. REDEMPTIONS Redemptions, like purchases, may be effected only through the accounts of participating Financial Institutions. Your Financial Institution will provide you with instructions on redeeming shares. Shares of any Fund may be redeemed on any business day. Redemptions are processed at the NAV next calculated after receipt and acceptance of the redemption order by the Fund. Redemption proceeds will normally be wired to the participating Financial Institution the business day following receipt of the redemption order, but in no event later than seven days after receipt of such order. SHAREHOLDER COMMUNICATIONS Shareholders will receive annual and semiannual reports including the financial statements of the Funds that they have authorized for investment from their Financial Institution. Each report will show the investments owned by each Fund and the market values thereof, as well as other information about the Funds and their operations. The Trust's fiscal year ends October 31. JANUS MONEY MARKET FUNDS - SERVICE SHARES PROSPECTUS 10 SUBJECT TO COMPLETION PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION DATED SEPTEMBER 24, 1996 [LOGO] Janus Investment Fund 100 Fillmore Street Denver, CO 80206-4923 - -------------------------------------------------------------------------------- Statement of Additional Information ___________, 1996 - -------------------------------------------------------------------------------- Janus Money Market Fund Janus Government Money Market Fund Janus Tax-Exempt Money Market Fund Service Shares This Statement of Additional Information ("SAI") expands upon and supplements the information contained in the current Prospectus for the Service Shares (the "Shares") of Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund (individually, a "Fund" and, collectively, the "Funds"). The Funds are each a separate series of Janus Investment Fund, a Massachusetts business trust (the "Trust"). Each Fund represents shares of beneficial interest in a separate portfolio of securities and other assets with its own objective and policies, and is managed separately by Janus Capital Corporation ("Janus Capital"). This SAI is not a Prospectus and should be read in conjunction with the Prospectus dated ___________, 1996, which is incorporated by reference into this SAI and may be obtained from the Trust at the above phone number or address. This SAI contains additional and more detailed information about the Funds' operations and activities than the Prospectus. INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS STATEMENT OF ADDITIONAL INFORMATION SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. 1 Statement of Additional Information Table of Contents Page - -------------------------------------------------------------------------------- Investment Policies and Restrictions ................................... 3 Types of Securities and Investment Techniques .......................... 4 Performance Data ....................................................... 7 Determination of Net Asset Value ....................................... 8 Investment Adviser and Administrator ................................... 8 Custodian, Transfer Agent and Certain Affiliations ..................... 9 Portfolio Transactions and Brokerage ................................... 10 Officers and Trustees .................................................. 10 Purchase of Shares ..................................................... 12 Redemptions of Shares .................................................. 12 Shareholder Accounts ................................................... 13 Dividends and Tax Status ............................................... 13 Miscellaneous Information .............................................. 13 Shares of the Trust ................................................. 14 Voting Rights ....................................................... 14 Independent Accountants ............................................. 14 Registration Statement .............................................. 14 Financial Statements ................................................... 14 Appendix A - Description of Securities Ratings ......................... 15 Appendix B - Description of Municipal Securities ....................... 17 - -------------------------------------------------------------------------------- 2 INVESTMENT POLICIES AND RESTRICTIONS Investment Objectives As discussed in the Prospectus, the investment objective of each of Janus Money Market Fund and Janus Government Money Market Fund is to seek maximum current income to the extent consistent with stability of capital. The investment objective of Janus Tax-Exempt Money Market Fund is to seek maximum current income that is exempt from federal income taxes to the extent consistent with stability of capital. There can be no assurance that a Fund will achieve its investment objective or maintain a stable net asset value of $1.00 per share. The investment objectives of the Funds are not fundamental and may be changed by the Trustees of the Trust (the "Trustees") without shareholder approval. Investment Restrictions Applicable to All Funds As indicated in the Prospectus, each Fund has adopted certain fundamental investment restrictions that cannot be changed without shareholder approval. Shareholder approval means approval by the lesser of (i) more than 50% of the outstanding voting securities of the Trust (or a particular Fund or particular class of Shares if a matter affects just that Fund or that class of Shares), or (ii) 67% or more of the voting securities present at a meeting if the holders of more than 50% of the outstanding voting securities of the Trust (or a particular Fund or class of Shares) are present or represented by proxy. As used in the restrictions set forth below and as used elsewhere in this SAI, the term "U.S. Government Securities" shall have the meaning set forth in the Investment Company Act of 1940, as amended (the "1940 Act"). The 1940 Act defines U.S. Government Securities as securities issued or guaranteed by the United States government, its agencies or instrumentalities. U.S. Government Securities may also include repurchase agreements collateralized and municipal securities escrowed with or refunded with escrowed U.S. government securities. The Funds have adopted the following fundamental policies: (1) With respect to 75% of its assets, a Fund may not purchase a security other than a U.S. Government Security, if, as a result, more than 5% of the Fund's total assets would be invested in the securities of a single issuer or the Fund would own more than 10% of the outstanding voting securities of any single issuer. (As noted in the Prospectus, the Funds are also currently subject to the greater diversification standards of Rule 2a-7, which are not fundamental.) (2) A Fund may not purchase securities if more than 25% of the value of a Fund's total assets would be invested in the securities of issuers conducting their principal business activities in the same industry; provided that: (i) there is no limit on investments in U.S. Government Securities or in obligations of domestic commercial banks (including U.S. branches of foreign banks subject to regulations under U.S. laws applicable to domestic banks and, to the extent that its parent is unconditionally liable for the obligation, foreign branches of U.S. banks); (ii) this limitation shall not apply to a Fund's investments in municipal securities; (iii) there is no limit on investments in issuers domiciled in a single country; (iv) financial service companies are classified according to the end users of their services (for example, automobile finance, bank finance and diversified finance are each considered to be a separate industry); and (v) utility companies are classified according to their services (for example, gas, gas transmission, electric, and telephone are each considered to be a separate industry). (3) A Fund may not act as an underwriter of securities issued by others, except to the extent that a Fund may be deemed an underwriter in connection with the disposition of portfolio securities of such Fund. (4) A Fund may not lend any security or make any other loan if, as a result, more than 25% of a Fund's total assets would be lent to other parties (but this limitation does not apply to purchases of commercial paper, debt securities or repurchase agreements). (5) A Fund may not purchase or sell real estate or any interest therein, except that the Fund may invest in debt obligations secured by real estate or interests therein or securities issued by companies that invest in real estate or interests therein. (6) A Fund may borrow money for temporary or emergency purposes (not for leveraging) in an amount not exceeding 25% of the value of its total assets (including the amount borrowed) less liabilities (other than borrowings). If borrowings exceed 25% of the value of a Fund's total assets by reason of a decline in net assets, the Fund will reduce its borrowings within three business days to the extent necessary to comply with the 25% limitation. Reverse repurchase agreements or the segregation of assets in connection with such agreements shall not be considered borrowing for the purposes of this limit. (7) Each Fund may, notwithstanding any other investment policy or restriction (whether or not fundamental), invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and restrictions as that Fund. Each Fund has adopted the following nonfundamental investment restrictions that may be changed by the Trustees without shareholder approval: 3 (1) A Fund may not invest in securities or enter into repurchase agreements with respect to any securities if, as a result, more than 10% of the Fund's net assets would be invested in repurchase agreements not entitling the holder to payment of principal within seven days and in other securities that are not readily marketable ("illiquid investments"). The Trustees, or the Fund's investment adviser acting pursuant to authority delegated by the Trustees, may determine that a readily available market exists for certain securities such as securities eligible for resale pursuant to Rule 144A under the Securities Act of 1933, or any successor to such rule, Section 4(2) commercial paper and municipal lease obligations. Accordingly, such securities may not be subject to the foregoing limitation. (2) A Fund may not invest in the securities of another investment company, except to the extent permitted by the 1940 Act. (3) A Fund may not purchase securities on margin, or make short sales of securities, except for short sales against the box and the use of short-term credit necessary for the clearance of purchases and sales of portfolio securities. (4) A Fund may not invest more than 5% of the value of its total assets in the securities of any issuer that has conducted continuous operations for less than three years, including operations of predecessors, except that this shall not affect the Fund's ability to invest in U.S. Government Securities, fully collateralized debt obligations, municipal obligations, securities that are rated by at least one nationally recognized statistical rating organization and securities guaranteed as to principal and interest by an issuer in whose securities the Fund could invest. (5) A Fund may not pledge, mortgage, hypothecate or encumber any of its assets except to secure permitted borrowings or in connection with permitted short sales. (6) A Fund may not invest directly in interests in oil and gas or interests in other mineral exploration or development programs or leases; however, the Fund may own debt securities of companies engaged in those businesses. (7) A Fund may not invest in companies for the purpose of exercising control of management. For purposes of the Funds' restriction on investing in a particular industry, the Funds will rely primarily on industry classifications as published by Bloomberg L.P., subject to the exceptions noted in fundamental restriction number two above. To the extent that such classifications are so broad that the primary economic characteristics in a single class are materially different, the Funds may further classify issuers in accordance with industry classifications as published by the Securities and Exchange Commission. TYPES OF SECURITIES AND INVESTMENT TECHNIQUES Each of the Funds may invest only in "eligible securities" as defined in Rule 2a-7 adopted under the 1940 Act. Generally, an eligible security is a security that (i) is denominated in U.S. dollars and has a remaining maturity of 397 days or less (as calculated pursuant to Rule 2a-7); (ii) is rated, or is issued by an issuer with short-term debt outstanding that is rated, in one of the two highest rating categories by any two nationally recognized statistical rating organizations ("NRSROs") or, if only one NRSRO has issued a rating, by that NRSRO (the "Requisite NRSROs") or is unrated and of comparable quality to a rated security, as determined by Janus Capital; and (iii) has been determined by Janus Capital to present minimal credit risks pursuant to procedures approved by the Trustees. In addition, the Funds will maintain a dollar-weighted average portfolio maturity of 90 days or less. A description of the ratings of some NRSROs appears in Appendix A. Under Rule 2a-7, a Fund may not invest more than five percent of its total assets in the securities of any one issuer other than U.S. Government Securities, provided that in certain cases a Fund may invest more than 5% of its assets in a single issuer for a period of up to three business days. Until the amendments to Rule 2a-7 become effective, up to 25% of Janus Tax-Exempt Money Market Fund's assets may be invested without regard to the foregoing limitations. Pursuant to Rule 2a-7, each Fund (except Janus Tax-Exempt Money Market Fund) will invest at least 95% of its total assets in "first-tier" securities. First-tier securities are eligible securities that are rated, or are issued by an issuer with short-term debt outstanding that is rated, in the highest rating category by the Requisite NRSROs or are unrated and of comparable quality to a rated security. In addition, a Fund may invest in "second-tier" securities which are eligible securities that are not first-tier securities. However, a Fund (except for Janus Tax-Exempt Money Market Fund, in certain cases) may not invest in a second-tier security if immediately after the acquisition thereof the Fund would have invested more than (i) the greater of one percent of its total assets or one million dollars in second-tier securities issued by that issuer, or (ii) five percent of its total assets in second-tier securities. The following discussion of types of securities in which the Funds may invest supplements and should be read in conjunction with the Prospectus. 4 Participation Interests Each Fund may purchase participation interests in loans or securities in which the Funds may invest directly. Participation interests are generally sponsored or issued by banks or other financial institutions. A participation interest gives a Fund an undivided interest in the underlying loans or securities in the proportion that the Fund's interest bears to the total principal amount of the underlying loans or securities. Participation interests, which may have fixed, floating or variable rates, may carry a demand feature backed by a letter of credit or guarantee of a bank or institution permitting the holder to tender them back to the bank or other institution. For certain participation interests, a Fund will have the right to demand payment, on not more than seven days' notice, for all or a part of the Fund's participation interest. The Funds intend to exercise any demand rights they may have upon default under the terms of the loan or security, to provide liquidity or to maintain or improve the quality of the Funds' investment portfolio. A Fund will only purchase participation interests that Janus Capital determines present minimal credit risks. Variable and Floating Rate Notes Janus Money Market Fund also may purchase variable and floating rate demand notes of corporations and other entities, which are unsecured obligations redeemable upon not more than 30 days' notice. These obligations include master demand notes that permit investment of fluctuating amounts at varying rates of interest pursuant to direct arrangements with the issuer of the instrument. The issuer of these obligations often has the right, after a given period, to prepay the outstanding principal amount of the obligations upon a specified number of days' notice. These obligations generally are not traded, nor generally is there an established secondary market for these obligations. To the extent a demand note does not have a seven day or shorter demand feature and there is no readily available market for the obligation, it is treated as an illiquid investment. Mortgage- and Asset-Backed Securities The Funds may invest in mortgage-backed securities, which represent an interest in a pool of mortgages made by lenders such as commercial banks, savings and loan institutions, mortgage bankers, mortgage brokers and savings banks. Mortgage-backed securities may be issued by governmental or government-related entities or by non-governmental entities such as banks, savings and loan institutions, private mortgage insurance companies, mortgage bankers and other secondary market issuers. Interests in pools of mortgage-backed securities differ from other forms of debt securities which normally provide for periodic payment of interest in fixed amounts with principal payments at maturity or specified call dates. In contrast, mortgage-backed securities provide periodic payments which consist of interest and, in most cases, principal. In effect, these payments are a "pass-through" of the periodic payments and optional prepayments made by the individual borrowers on their mortgage loans, net of any fees paid to the issuer or guarantor of such securities. Additional payments to holders of mortgage-backed securities are caused by prepayments resulting from the sale of the underlying residential property, refinancing or foreclosure, net of fees or costs which may be incurred. As prepayment rates of individual pools of mortgage loans vary widely, it is not possible to predict accurately the average life of a particular security. Although mortgage-backed securities are issued with stated maturities of up to forty years, unscheduled or early payments of principal and interest on the underlying mortgages may shorten considerably the effective maturities. Mortgage-backed securities may have varying assumptions for average life. The volume of prepayments of principal on a pool of mortgages underlying a particular security will influence the yield of that security, and the principal returned to a Fund may be reinvested in instruments whose yield may be higher or lower than that which might have been obtained had the prepayments not occurred. When interest rates are declining, prepayments usually increase, with the result that reinvestment of principal prepayments will be at a lower rate than the rate applicable to the original mortgage-backed security. The Funds may invest in mortgage-backed securities that are issued by agencies or instrumentalities of the U.S. government. The Government National Mortgage Association ("GNMA") is the principal federal government guarantor of mortgage-backed securities. GNMA is a wholly-owned U.S. government corporation within the Department of Housing and Urban Development. GNMA Certificates are debt securities which represent an interest in one mortgage or a pool of mortgages which are insured by the Federal Housing Administration or the Farmers Home Administration or are guaranteed by the Veterans Administration. The Funds may also invest in pools of conventional mortgages which are issued or guaranteed by agencies of the U.S. government. GNMA pass-through securities are considered to be riskless with respect to default in that (i) the underlying mortgage loan portfolio is comprised entirely of government-backed loans and (ii) the timely payment of both principal and interest on the securities is guaranteed by the full faith and credit of the U.S. government, regardless of whether or not payments have been made on the underlying mortgages. GNMA pass-through securities are, however, subject to the same market risk as comparable debt securities. Therefore, the market value of a Fund's GNMA securities can be expected to fluctuate in response to changes in prevailing interest rate levels. Residential mortgage loans are pooled also by the Federal Home Loan Mortgage Corporation ("FHLMC"). FHLMC is a privately managed, publicly chartered agency created by Congress in 1970 for the purpose of increasing the availability of mortgage credit for residential housing. FHLMC issues participation certificates ("PCs") which represent interests in mortgages from FHLMC's 5 national portfolio. The mortgage loans in FHLMC's portfolio are not U.S. government backed; rather, the loans are either uninsured with loan-to-value ratios of 80% or less, or privately insured if the loan-to-value ratio exceeds 80%. FHLMC guarantees the timely payment of interest and ultimate collection of principal on FHLMC PCs; the U.S. government does not guarantee any aspect of FHLMC PCs. The Federal National Mortgage Association ("FNMA") is a government-sponsored corporation owned entirely by private shareholders. It is subject to general regulation by the Secretary of Housing and Urban Development. FNMA purchases residential mortgages from a list of approved seller/servicers which include savings and loan associations, savings banks, commercial banks, credit unions and mortgage bankers. FNMA guarantees the timely payment of principal and interest on the pass-through securities issued by FNMA; the U.S. government does not guarantee any aspect of the FNMA pass-through securities. The Funds may also invest in privately-issued mortgage-backed securities to the extent permitted by their investment restrictions. Mortgage-backed securities offered by private issuers include pass-through securities comprised of pools of conventional residential mortgage loans; mortgage-backed bonds which are considered to be debt obligations of the institution issuing the bonds and which are collateralized by mortgage loans; and collateralized mortgage obligations ("CMOs") which are collateralized by mortgage-backed securities issued by GNMA, FHLMC or FNMA or by pools of conventional mortgages. Asset-backed securities represent direct or indirect participation in, or are secured by and payable from, assets other than mortgage-backed assets such as motor vehicle installment sales contracts, installment loan contracts, leases of various types of real and personal property and receivables from revolving credit agreements (credit cards). Asset-backed securities have yield characteristics similar to those of mortgage-backed securities and, accordingly, are subject to many of the same risks. Reverse Repurchase Agreements Reverse repurchase agreements are transactions in which a Fund sells a security and simultaneously commits to repurchase that security from the buyer at an agreed upon price on an agreed upon future date. The resale price in a reverse repurchase agreement reflects a market rate of interest that is not related to the coupon rate or maturity of the sold security. For certain demand agreements, there is no agreed upon repurchase date and interest payments are calculated daily, often based upon the prevailing overnight repurchase rate. The Funds will use the proceeds of reverse repurchase agreements only to satisfy unusually heavy redemption requests or for other temporary or emergency purposes without the necessity of selling portfolio securities or to earn additional income on portfolio securities. Generally, a reverse repurchase agreement enables the Fund to recover for the term of the reverse repurchase agreement all or most of the cash invested in the portfolio securities sold and to keep the interest income associated with those portfolio securities. Such transactions are only advantageous if the interest cost to the Fund of the reverse repurchase transaction is less than the cost of obtaining the cash otherwise. In addition, interest costs on the money received in a reverse repurchase agreement may exceed the return received on the investments made by a Fund with those monies. When-Issued and Delayed Delivery Securities Each Fund may purchase securities on a when-issued or delayed delivery basis. A Fund will enter into such transactions only when it has the intention of actually acquiring the securities. To facilitate such acquisitions, the Funds' custodian will segregate cash or high quality liquid assets in an amount at least equal to such commitments. On delivery dates for such transactions, the Fund will meet its obligations from maturities, sales of the segregated securities or from other available sources of cash. If a Fund chooses to dispose of the right to acquire a when-issued security prior to its acquisition, it could, as with the disposition of any other portfolio obligation, incur a gain or loss due to market fluctuation. At the time a Fund makes the commitment to purchase securities on a when-issued or delayed delivery basis, it will record the transaction as a purchase and thereafter reflect the value of such securities in determining its net asset value. Municipal Leases Janus Money Market Fund and Janus Tax-Exempt Money Market Fund may invest in municipal leases. Municipal leases frequently have special risks not normally associated with general obligation or revenue bonds. Leases and installment purchase or conditional sale contracts (which normally provide for title to the leased asset to pass eventually to the government issuer) have evolved as a means for governmental issuers to acquire property and equipment without meeting the constitutional and statutory requirements for the issuance of debt. The debt-issuance limitations of many state constitutions and statutes are deemed to be inapplicable because of the inclusion in many leases or contracts of "non-appropriation" clauses that provide that the governmental issuer has no obligation to make future payments under the lease or contract unless money is appropriated for such purpose by the appropriate legislative body on a yearly or other periodic basis. A Fund will only purchase municipal leases subject to a non-appropriation clause when the payment of principal and accrued interest is backed by an unconditional irrevocable letter of credit, or guarantee of a bank or other entity that meets the criteria described in the Prospectus under "Taxable Investments." 6 In evaluating municipal lease obligations, Janus Capital will consider such factors as it deems appropriate, including: (a) whether the lease can be canceled; (b) the ability of the lease obligee to direct the sale of the underlying assets; (c) the general creditworthiness of the lease obligor; (d) the likelihood that the municipality will discontinue appropriating funding for the leased property in the event such property is no longer considered essential by the municipality; (e) the legal recourse of the lease obligee in the event of such a failure to appropriate funding; (f) whether the security is backed by a credit enhancement such as insurance; and (g) any limitations which are imposed on the lease obligor's ability to utilize substitute property or services other than those covered by the lease obligation. If a lease is backed by an unconditional letter of credit or other unconditional credit enhancement, then Janus Capital may determine that a lease is an eligible security solely on the basis of its evaluation of the credit enhancement. Municipal leases, like other municipal debt obligations, are subject to the risk of non-payment. The ability of issuers of municipal leases to make timely lease payments may be adversely impacted in general economic downturns and as relative governmental cost burdens are allocated and reallocated among federal, state and local governmental units. Such non-payment would result in a reduction of income to the Funds, and could result in a reduction in the value of the municipal lease experiencing non-payment and a potential decrease in the net asset value of a Fund. PERFORMANCE DATA A Fund may provide current annualized and effective annualized yield quotations based on its daily dividends. These quotations may from time to time be used in advertisements, shareholder reports or other communications to shareholders. All performance information supplied by the Funds in advertising is historical and is not intended to indicate future returns. In performance advertising, the Funds may compare their Shares' performance information with data published by independent evaluators such as Morningstar, Inc., Lipper Analytical Services, Inc., or CDC/Wiesenberger, IBC/Donoghue's Money Fund Report or other companies which track the investment performance of investment companies ("Fund Tracking Companies"). The Funds may also compare their Shares' performance information with the performance of recognized stock, bond and other indices, including but not limited to the Municipal Bond Buyers Indices, the Salomon Brothers Bond Index, the Lehman Bond Index, the Standard & Poor's 500 Composite Stock Price Index, the Dow Jones Industrial Average, U.S. Treasury bonds, bills or notes and changes in the Consumer Price Index as published by the U.S. Department of Commerce. The Funds may refer to general market performance over past time periods such as those published by Ibbotson Associates (for instance, its "Stocks, Bonds, Bills and Inflation Yearbook"). The Funds may also refer in such materials to mutual fund performance rankings and other data published by Fund Tracking Companies. Performance advertising may also refer to discussions of the Funds and comparative mutual fund data and ratings reported in independent periodicals, such as newspapers and financial magazines. The Funds may also compare the Shares' yield to those of certain U.S. Treasury obligations or other money market instruments. Any current yield quotation of the Shares which is used in such a manner as to be subject to the provisions of Rule 482(d) under the Securities Act of 1933, as amended, shall consist of an annualized historical yield, carried at least to the nearest hundredth of one percent, based on a specific seven calendar day period. Current yield shall be calculated by (a) determining the net change during a seven calendar day period in the value of a hypothetical account having a balance of one Share at the beginning of the period, (b) dividing the net change by the value of the account at the beginning of the period to obtain a base period return, and (c) multiplying the quotient by 365/7 (i.e., annualizing). For this purpose, the net change in account value will reflect the value of additional Shares purchased with dividends declared on the original Share and dividends declared on both the original Share and any such additional Shares, but will not reflect any realized gains or losses from the sale of securities or any unrealized appreciation or depreciation on portfolio securities. In addition, the Shares may advertise effective yield quotations. Effective yield quotations are calculated by adding 1 to the base period return, raising the sum to a power equal to 365/7, and subtracting 1 from the result (i.e., compounding). Janus Tax-Exempt Money Market Fund's tax equivalent yield is the rate an investor would have to earn from a fully taxable investment in order to equal such Shares' yield after taxes. Tax equivalent yields are calculated by dividing Janus Tax-Exempt Money Market Fund's yield by one minus the stated federal or combined federal and state tax rate. If only a portion of the Shares' yield is tax-exempt, only that portion is adjusted in the calculation. Although published yield information is useful to investors in reviewing a Fund's performance, investors should be aware that the Fund's yield fluctuates from day to day and that the Fund's yield for any given period is not an indication or representation by the Fund of future yields or rates of return on the Shares. Also, Processing Organizations may charge their customers direct fees in connection with an investment in a Fund, which will have the effect of reducing the Fund's net yield to those shareholders. The yield on a class of Shares is not fixed or guaranteed, and an investment in the Shares is not insured. Accordingly, yield information may not necessarily be used to compare Shares with investment alternatives which, like money market instruments or bank accounts, may provide a fixed rate of interest. In addition, because investments in the Funds are not insured or guaranteed, yield on the Shares may not necessarily be used to compare the Shares with investment alternatives which are insured or guaranteed. 7 DETERMINATION OF NET ASSET VALUE Pursuant to the rules of the Securities and Exchange Commission, the Trustees have established procedures to stabilize each Fund's net asset value at $1.00 per Share. These procedures include a review of the extent of any deviation of net asset value per Share as a result of fluctuating interest rates, based on available market rates, from the Fund's $1.00 amortized cost price per Share. Should that deviation exceed 1/2 of 1%, the Trustees will consider whether any action should be initiated to eliminate or reduce material dilution or other unfair results to shareholders. Such action may include redemption of Shares in kind, selling portfolio securities prior to maturity, reducing or withholding dividends and utilizing a net asset value per Share as determined by using available market quotations. Each Fund i) will maintain a dollar-weighted average portfolio maturity of 90 days or less; ii) will not purchase any instrument with a remaining maturity greater than 397 days or subject to a repurchase agreement having a duration of greater than 397 days; iii) will limit portfolio investments, including repurchase agreements, to those U.S. dollar-denominated instruments that Janus Capital has determined present minimal credit risks pursuant to procedures established by the Trustees; and iv) will comply with certain reporting and recordkeeping procedures. The Trust has also established procedures to ensure that portfolio securities meet the Funds' high quality criteria. INVESTMENT ADVISER AND ADMINISTRATOR As stated in the Prospectus, each Fund has an Investment Advisory Agreement with Janus Capital, 100 Fillmore Street, Denver, Colorado 80206-4923. Each Advisory Agreement provides that Janus Capital will furnish continuous advice and recommendations concerning the Funds' investments. The Funds have each agreed to compensate Janus Capital for its advisory services by the monthly payment of an advisory fee at the annual rate of .20% of the average daily net assets of each Fund. However, Janus Capital has agreed to waive .10% of the value of each Fund's average daily net assets of the advisory fee. Janus Capital may modify or terminate the waiver at any time upon 90 days' notice to the Trustees. In addition, the Funds pay brokerage commissions or dealer spreads and other expenses in connection with the execution of portfolio transactions. On behalf of the Shares, each of the Funds has also entered into an Administration Agreement with Janus Capital. Under the terms of the Administration Agreements, each of the Funds has agreed to compensate Janus Capital for administrative services at the annual rate of .40% of the value of the average daily net assets of the Shares for certain services, including custody, transfer agent fees and expenses, legal fees not related to litigation, accounting expenses, net asset value determination and fund accounting, recordkeeping, and blue sky registration and monitoring services, registration fees, expenses of shareholders' meetings and reports to shareholders, costs of preparing, printing and mailing the Shares' Prospectuses and Statements of Additional Information to current shareholders, and other costs of complying with applicable laws regulating the sale of Shares. Each Fund will pay those expenses not assumed by Janus Capital, including interest and taxes, fees and expenses of Trustees who are not affiliated with Janus Capital, audit fees and expenses, and extraordinary costs. Janus Capital has agreed to waive a portion of the administration fee, and accordingly the effective rate for calculating the administration fee payable by the Shares will be .30% for that period. Janus Capital may terminate the waiver at any time upon 90 days' notice to the Trustees. Janus Capital may use all or a portion of its administration fee to compensate Financial Institutions for providing administrative services to their customers who invest in the Shares. The types of services that the Financial Institutions would provide include serving as the sole shareholder of record, shareholder recordkeeping, processing and aggregating purchase and redemption transactions, providing periodic statements, forwarding shareholder reports and other materials, and providing other similar services that the Funds would have to perform if they were dealing directly with the beneficial owners, rather than the Financial Institutions, as shareholders of record. The following table summarizes the advisory fees paid by the Funds for the fiscal years ended October 31: 1996 1995 [TO BE FILED BY AMENDMENT] Advisory Advisory Advisory Advisory Fees Prior Fees After Fees Prior Fees After Fund Name to Waiver Waiver to Waiver Waiver - ------------------------------------------------------------------------------------------------------------------------------------ Janus Money Market Fund $ $ Janus Government Money Market Fund $ $ Janus Tax-Exempt Money Market Fund $ $ - ------------------------------------------------------------------------------------------------------------------------------------
The Advisory Agreements for each Fund became effective on December 9, 1994 and will continue in effect until June 16, 1997, and thereafter from year to year so long as such continuance is approved annually by a majority of the Trustees who are not parties to the Advisory Agreements or interested persons of any such party, and by either a majority of the Funds' outstanding voting shares or the Trustees. Each Advisory Agreement i) may be terminated without the payment of any penalty by any Fund or Janus Capital on 60 days' written notice; ii) terminates automatically in the event of its assignment; and iii) generally, may not be amended without the approval of a majority of the Trustees of the affected Fund, including the Trustees who are not interested 8 persons of that Fund or Janus Capital and, to the extent required by the 1940 Act, the vote of a majority of the outstanding voting securities of that Fund. Janus Capital also performs investment advisory services for other mutual funds, and for individual, charitable, corporate and retirement accounts. Investment decisions for each account managed by Janus Capital, including the Funds, are made independently from those for any other account that is or may in the future become managed by Janus Capital or its affiliates. If, however, a number of accounts managed by Janus Capital are contemporaneously engaged in the purchase or sale of the same security, the orders may be aggregated and/or the transactions may be averaged as to price and allocated equitably to each account. In some cases, this policy might adversely affect the price paid or received by an account or the size of the position obtained or liquidated for an account. Pursuant to an exemptive order granted by the SEC, the Funds and other funds advised by Janus Capital may also transfer daily uninvested cash balances into one or more joint trading accounts. Assets in the joint trading accounts are invested in money market instruments and the proceeds are allocated to the participating funds on a pro rata basis. Each account managed by Janus Capital has its own investment objective and is managed in accordance with that objective by a particular portfolio manager or team of portfolio managers. As a result, from time to time two or more different managed accounts may pursue divergent investment strategies with respect to investments or categories of investments. As indicated in the Prospectus, Janus Capital does not permit portfolio managers to purchase and sell securities for their own accounts in accordance with a Janus Capital policy regarding personal investing by directors, officers and employees of Janus Capital and the Funds. The policy requires investment personnel and officers of Janus Capital, inside directors of Janus Capital and the Funds and other designated persons deemed to have access to current trading information to pre-clear all transactions in securities not otherwise exempt under the policy. Requests for trading authority will be denied when, among other reasons, the proposed personal transaction would be contrary to the provisions of the policy or would be deemed to adversely affect any transaction then known to be under consideration for or to have been effected on behalf of any client account, including the Funds. In addition to the pre-clearance requirement described above, the policy subjects investment personnel, officers and directors/ Trustees of Janus Capital and the Funds to various trading restrictions and reporting obligations. All reportable transactions are reviewed for compliance with Janus Capital's policy. Those persons also may be required under certain circumstances to forfeit their profits made from personal trading. The provisions of the policy are administered by and subject to exceptions authorized by Janus Capital. Kansas City Southern Industries, Inc., a publicly traded holding company whose primary subsidiaries are engaged in transportation, information processing and financial services ("KCSI"), owns approximately 83% of Janus Capital. Thomas H. Bailey, the President and Chairman of the Board of Janus Capital, owns approximately 12% of its voting stock and, by agreement with KCSI, selects a majority of Janus Capital's Board. CUSTODIAN, TRANSFER AGENT AND CERTAIN AFFILIATIONS United Missouri Bank, N.A., P.O. Box 419226, Kansas City, Missouri 64141-6226, is the Funds' custodian. The custodian holds the Funds' assets in safekeeping and collects and remits the income thereon, subject to the instructions of each Fund. Janus Service Corporation ("Janus Service"), P.O. Box 173375, Denver, Colorado 80217-3375, a wholly-owned subsidiary of Janus Capital, is the Funds' transfer agent. In addition, Janus Service provides certain other administrative, recordkeeping and shareholder relations services to the Funds. The Funds do not pay Janus Service a fee. Janus Distributors, Inc. ("Janus Distributors"), 100 Fillmore Street, Denver, Colorado 80206, a wholly-owned subsidiary of Janus Capital, is a distributor of the Funds. Janus Distributors is registered as a broker-dealer under the Securities Exchange Act of 1934 (the "Exchange Act") and is a member of the National Association of Securities Dealers, Inc. Janus Distributors acts as the agent of the Funds in connection with the sale of their shares in all states in which the shares are registered and in which Janus Distributors is qualified as a broker-dealer. Under the Distribution Agreement, Janus Distributors continuously offers the Funds' shares and accepts orders at net asset value. No sales charges are paid by investors. Promotional expenses in connection with offers and sales of shares are paid by Janus Capital. Janus Capital also may make payments to selected broker-dealer firms or institutions which were instrumental in the acquisition of shareholders for the Funds or which performed services with respect to shareholder accounts. The minimum aggregate size required for eligibility for such payments, and the factors in selecting the broker-dealer firms and institutions to which they will be made, are determined from time to time by Janus Capital. 9 PORTFOLIO TRANSACTIONS AND BROKERAGE Decisions as to the assignment of portfolio business for the Funds and negotiation of its commission rates are made by Janus Capital whose policy is to obtain the "best execution" (prompt and reliable execution at the most favorable security price) of all portfolio transactions. In selecting brokers and dealers and in negotiating commissions, Janus Capital considers a number of factors, including but not limited to: Janus Capital's knowledge of currently available negotiated commission rates or prices of securities currently available and other current transaction costs; the nature of the security being traded; the size and type of the transaction; the nature and character of the markets for the security to be purchased or sold; the desired timing of the trade; the activity existing and expected in the market for the particular security; confidentiality; the quality of the execution, clearance and settlement services; financial stability of the broker or dealer; the existence of actual or apparent operational problems of any broker or dealer; and research products or services provided. In recognition of the value of the foregoing factors, Janus Capital may place portfolio transactions with a broker or dealer with whom it has negotiated a commission that is in excess of the commission another broker or dealer would have charged for effecting that transaction if Janus Capital determines in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research provided by such broker or dealer viewed in terms of either that particular transaction or of the overall responsibilities of Janus Capital. These research and other services may include, but are not limited to, general economic and security market reviews, industry and company reviews, evaluations of securities, recommendations as to the purchase and sale of securities and access to third party publications, computer and electronic equipment and software. Research received from brokers or dealers is supplemental to Janus Capital's own research efforts. [For the fiscal year ended October 31, 1996, the Funds did not incur any brokerage commissions. Brokerage commissions are not normally charged on the purchase and sale of money market instruments.] Janus Capital may use research products and services in servicing other accounts in addition to the Funds. If Janus Capital determines that any research product or service has a mixed use, such that it also serves functions that do not assist in the investment decision-making process, Janus Capital may allocate the costs of such service or product accordingly. Only that portion of the product or service that Janus Capital determines will assist it in the investment decision-making process may be paid for in brokerage commission dollars. Such allocation may create a conflict of interest for Janus Capital. Janus Capital may consider sales of Shares by a broker-dealer or the recommendation of a broker-dealer to its customers that they purchase Shares as a factor in the selection of broker-dealers to execute Fund portfolio transactions. Janus Capital may also consider payments made by brokers effecting transactions for a Fund i) to the Fund or ii) to other persons on behalf of the Fund for services provided to the Fund for which it would be obligated to pay. In placing portfolio business with such broker-dealers, Janus Capital will seek the best execution of each transaction. When the Funds purchase or sell a security in the over-the-counter market, the transaction takes place directly with a principal market-maker, without the use of a broker, except in those circumstances where in the opinion of Janus Capital better prices and executions will be achieved through the use of a broker. OFFICERS AND TRUSTEES The following are the names of the Trustees and officers of the Trust, together with a brief description of their principal occupations during the last five years. Thomas H. Bailey*# - Trustee, Chairman and President 100 Fillmore Street Denver, CO 80206-4923 Trustee, Chairman and President of Janus Aspen Series. Chairman, Director and President of Janus Capital. Chairman and Director of IDEX Management, Inc., Largo, Florida (50% subsidiary of Janus Capital and investment adviser to a group of mutual funds) ("IDEX"). James P. Craig, III*# - Trustee and Executive Vice President 100 Fillmore Street Denver, CO 80206-4923 Trustee and Executive Vice President of Janus Aspen Series. Chief Investment Officer, Vice President and Director of Janus Capital. Executive Vice President and Portfolio Manager of Janus Fund series of the Trust. - -------------------------------------------------------------------------------- * Interested person of the Trust and of Janus Capital. # Member of the Executive Committee. 10 Sharon S. Pichler* - Executive Vice President and Portfolio Manager 100 Fillmore Street Denver, CO 80206-4923 Executive Vice President of Janus Money Market Fund, Janus Tax-Exempt Money Market Fund and Janus Government Money Market Fund series of the Trust. Vice President of Janus Capital. Formerly, Assistant Vice President and Portfolio Manager at USAA Investment Management Co. (1990-1994). David C. Tucker* - Vice President and General Counsel 100 Fillmore Street Denver, CO 80206-4923 Vice President and General Counsel of Janus Aspen Series. Vice President, Secretary and General Counsel of Janus Capital. Vice President, General Counsel and Director of Janus Service and Janus Distributors. Director, Vice President and Secretary of Janus Capital International Ltd. Steven R. Goodbarn* - Vice President and Chief Financial Officer 100 Fillmore Street Denver, CO 80206-4923 Vice President and Chief Financial Officer of Janus Aspen Series. Vice President of Finance, Treasurer and Chief Financial Officer of Janus Service, Janus Distributors and Janus Capital. Director of IDEX and Janus Distributors. Director, Treasurer and Vice President of Finance of Janus Capital International Ltd. Formerly (1979 to 1992), with the accounting firm of Price Waterhouse LLP, Denver, Colorado. Glenn P. O'Flaherty* - Treasurer and Chief Accounting Officer 100 Fillmore Street Denver, CO 80206-4923 Treasurer and Chief Accounting Officer of Janus Aspen Series. Director of Fund Accounting of Janus Capital. Kelley Abbott Howes* - Secretary 100 Fillmore Street Denver, CO 80206-4923 Secretary of Janus Aspen Series. Associate Counsel of Janus Capital. Formerly (1990 to 1994), with The Boston Company Advisors, Inc., Boston Massachusetts (mutual fund administration services). John W. Shepardson# - Trustee P.O. Box 9591 Denver, CO 80209 Trustee of Janus Aspen Series. Historian. William D. Stewart# - Trustee 5330 Sterling Drive Boulder, CO 80302 Trustee of Janus Aspen Series. President of HPS Corporation, Boulder, Colorado (manufacturer of vacuum fittings and valves). Gary O. Loo - Trustee 102 N. Cascade Avenue, Suite 500 Colorado Springs, CO 80903 Trustee of Janus Aspen Series. President and a Director of High Valley Group, Inc., Colorado Springs, Colorado (investments) since 1987. Dennis B. Mullen - Trustee 1601 114th Avenue, SE Alderwood Building, Suite 130 Bellevue, WA 98004 Trustee of Janus Aspen Series. President and Chief Executive Officer of BC Northwest, L.P., a franchise of Boston Chicken, Inc., Bellevue, Washington (restaurant chain). Formerly (1982 to 1993), Chairman, President and Chief Executive Officer of Famous Restaurants, Inc., Scottsdale, Arizona (restaurant chain). - -------------------------------------------------------------------------------- * Interested person of the Trust and of Janus Capital. # Member of the Executive Committee. 11 Martin H. Waldinger - Trustee 4940 Sandshore Court San Diego, CA 92130 Trustee of Janus Aspen Series. Private Consultant and Director of Run Technologies, Inc., a software development firm, San Carlos, California. Formerly (1989 to 1993), President and Chief Executive Officer of Bridgecliff Management Services, Campbell, California (a condominium association management company). The Trustees are responsible for major decisions relating to each Fund's objective, policies and techniques. The Trustees also supervise the operation of the Funds by their officers and review the investment decisions of the officers although they do not actively participate on a regular basis in making such decisions. The Executive Committee of the Trustees shall have and may exercise all the powers and authority of the Board except for matters requiring action by the whole Board pursuant to the Trust's Bylaws or Declaration of Trust, Massachusetts Law or the 1940 Act. The Money Market Funds Committee, consisting of Messrs. Craig, Shepardson, Loo and Waldinger, monitors the compliance with policies and procedures adopted particularly for money market funds. The following table shows the aggregate compensation paid to each Trustee by the Funds described in this SAI and all funds advised and sponsored by Janus Capital (collectively, the "Janus Funds") for the periods indicated. None of the Trustees receive any pension or retirement benefits from the Funds or the Janus Funds. Aggregate Compensation from the Funds for fiscal year Total Compensation from the ended October 31, 1996 Janus Funds for calendar year Name of Person, Position [TO BE FILED BY AMENDMENT] ended December 31, 1995** - ------------------------------------------------------------------------------------------------------------------------------------ Thomas H. Bailey, Chairman* $ -- James P. Craig, Trustee* $ -- John W. Shepardson, Trustee $ $56,101 William D. Stewart, Trustee $ $53,228 Gary O. Loo, Trustee $ $50,365 Dennis B. Mullen, Trustee $ $53,228 Martin H. Waldinger, Trustee $ $53,228 - ------------------------------------------------------------------------------------------------------------------------------------
*An interested person of the Funds and of Janus Capital. Compensated by Janus Capital and not the Funds. **As of December 31, 1995, Janus Funds consisted of two registered investment companies comprised of a total of 26 funds. PURCHASE OF SHARES As stated in the Prospectus, Janus Distributors is a distributor of the Funds' shares. Shares are sold at the net asset value per share as determined at the close of the regular trading session of the New York Stock Exchange (the "NYSE" or the "Exchange") next occurring after a purchase order is received and accepted by a Fund. A Fund's net asset value is calculated each day that both the NYSE and the New York Federal Reserve Bank are open. As stated in the Prospectus, the Funds each seek to maintain a stable net asset value per share of $1.00. The Shareholder's Guide Section of the Prospectus contains detailed information about the purchase of Shares. REDEMPTIONS OF SHARES Redemptions, like purchases, may only be effected through the trust accounts, cash management programs and similar programs of participating banks and financial institutions. Shares normally will be redeemed for cash, although each Fund retains the right to redeem its shares in kind under unusual circumstances, in order to protect the interests of remaining shareholders, by delivery of securities selected from its assets at its discretion. However, the Funds are governed by Rule 18f-1 under the 1940 Act, which requires each Fund to redeem shares solely in cash up to the lesser of $250,000 or 1% of the NAV of that Fund during any 90-day period for any one shareholder. Should redemptions by any shareholder exceed such limitation, a Fund will have the option of redeeming the excess in cash or in kind. If shares are redeemed in kind, the redeeming shareholder might incur brokerage costs in converting the assets to cash. The method of valuing securities used to make redemptions in kind will be the same as the method of valuing portfolio securities described under "Shares of the Trust" and such valuation will be made as of the same time the redemption price is determined. The right to require the Funds to redeem its shares may be suspended, or the date of payment may be postponed, whenever (1) trading on the NYSE is restricted, as determined by the SEC, or the NYSE is closed except for holidays and weekends, (2) the SEC permits such suspension and so orders, or (3) an emergency exists as determined by the SEC so that disposal of securities or determination of NAV is not reasonably practicable. 12 SHAREHOLDER ACCOUNTS Detailed information about the general procedures for shareholder accounts is set forth in the Prospectus. Applications to open accounts may be obtained by calling or writing your Financial Institution. DIVIDENDS AND TAX STATUS Dividends representing substantially all of the net investment income and any net realized gains on sales of securities are declared daily, Saturdays, Sundays and holidays included, and distributed on the last business day of each month. If a month begins on a Saturday, Sunday or holiday, dividends for those days are declared at the end of the preceding month and distributed on the first business day of the month. A shareholder may receive dividends via wire transfer or may choose to have dividends automatically reinvested in a Fund's Shares. As described in the Prospectus, Shares purchased by wire on a bank business day will receive that day's dividend if the purchase is effected at or prior to 3:00 p.m. (New York time) for Janus Money Market Fund and Janus Government Money Market Fund and 12:00 p.m. (New York time) for Janus Tax-Exempt Money Market Fund. Otherwise, such Shares will begin to accrue dividends on the first bank business day following receipt of the order. Requests for redemption of Shares will be redeemed at the next determined net asset value. Redemption requests made by wire that are received prior to 3:00 p.m. (New York time) for Janus Money Market Fund and Janus Government Money Market Fund and 12:00 p.m. (New York time) for Janus Tax-Exempt Money Market Fund will result in Shares being redeemed that day. Proceeds of such a redemption will normally be sent to the predesignated bank account on that day, but that day's dividend will not be received. Closing times for purchase and redemption of Shares may be changed for days in which the bond market or the New York Stock Exchange close early. Distributions for all of the Funds (except Janus Tax-Exempt Money Market Fund) are taxable income and are subject to federal income tax (except for shareholders exempt from income tax), whether such distributions are received via wire transfer or are reinvested in additional Shares. Full information regarding the tax status of income dividends and any capital gains distributions will be mailed to shareholders for tax purposes on or before January 31st of each year. As described in detail in the Prospectus, Janus Tax-Exempt Money Market Fund anticipates that substantially all income dividends it pays will be exempt from federal income tax, although dividends attributable to interest on taxable investments, together with distributions from any net realized short- or long-term capital gains, are taxable. The Funds intend to qualify as regulated investment companies by satisfying certain requirements prescribed by Subchapter M of the Internal Revenue Code of 1986. Some money market securities employ a trust or other similar structure to modify the maturity, price characteristics, or quality of financial assets. For example, put features can be used to modify the maturity of a security, or interest rate adjustment features can be used to enhance price stability. If the structure does not perform as intended, adverse tax or investment consequences may result. Neither the Internal Revenue Service nor any other regulatory authority has ruled definitively on certain legal issues presented by structured securities. Future tax or other regulatory determinations could adversely affect the value, liquidity, or tax treatment of the income received from these securities or the nature and timing of distributions made by a portfolio. MISCELLANEOUS INFORMATION Each Fund is a series of the Trust, a Massachusetts Business Trust that was created on February 11, 1986. The Trust is an open-end management investment company registered under the 1940 Act. As of the date of this SAI, the Trust consists of 20 separate series, three of which currently offer three classes of Shares. The Funds were added to the Trust as separate series on December 9, 1994. Janus Capital reserves the right to the name "Janus." In the event that Janus Capital does not continue to provide investment advice to the Funds, the Funds must cease to use the name "Janus" as soon as reasonably practicable. Under Massachusetts law, shareholders of the Funds could, under certain circumstances, be held liable for the obligations of their Fund. However, the Agreement and Declaration of Trust (the "Declaration of Trust") disclaims shareholder liability for acts or obligations of the Funds and requires that notice of this disclaimer be given in each agreement, obligation or instrument entered into or executed by the Funds or the Trustees. The Declaration of Trust also provides for indemnification from the assets of the Funds for all losses and expenses of any Fund shareholder held liable for the obligations of their Fund. Thus, the risk of a shareholder incurring a financial loss on account of its liability as a shareholder of one of the Funds is limited to circumstances in which their Fund would be unable to meet its obligations. The possibility that these circumstances would occur is remote. The Trustees intend to conduct the operations of the Funds to avoid, to the extent possible, liability of shareholders for liabilities of their Fund. 13 Shares of the Trust The Trust is authorized to issue an unlimited number of shares of beneficial interest with a par value of one cent per share for each series of the Trust. Shares of each Fund are fully paid and nonassessable when issued. All shares of a Fund participate equally in dividends and other distributions by such Fund, and in residual assets of that Fund in the event of liquidation. Shares of each Fund have no preemptive, conversion or subscription rights. The Trust is authorized to issue multiple classes of shares for each Fund. Currently, Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund each offer three classes of shares by separate prospectuses. The Shares discussed in this SAI are offered only through Financial Institutions that meet minimum investment requirements in connection with trust accounts, cash management programs and similar programs provided to their customers. A second class of shares, Institutional Shares, is offered to individual, institutional and corporate clients and foundations and trusts meeting certain minimum investment criteria. A third class of shares, Investor Shares, is offered to the general public. Voting Rights The present Trustees were elected at a meeting of the Trust's shareholders held on July 10, 1992, with the exception of Mr. Craig who was appointed by the Trustees as of June 30, 1995. Under the Declaration of Trust, each Trustee will continue in office until the termination of the Trust or his earlier death, resignation, bankruptcy, incapacity or removal. Vacancies will be filled by a majority of the remaining Trustees, subject to the 1940 Act. Therefore, no annual or regular meetings of shareholders normally will be held, unless otherwise required by the Declaration of Trust or the 1940 Act. Subject to the foregoing, shareholders have the power to vote to elect or remove Trustees, to terminate or reorganize their Fund, to amend the Declaration of Trust, to bring certain derivative actions and on any other matters on which a shareholder vote is required by the 1940 Act, the Declaration of Trust, the Trust's Bylaws or the Trustees. Each share of each series of the Trust has one vote (and fractional votes for fractional shares). Shares of all series of the Trust have noncumulative voting rights, which means that the holders of more than 50% of the shares of all series of the Trust voting for the election of Trustees can elect 100% of the Trustees if they choose to do so and, in such event, the holders of the remaining shares will not be able to elect any Trustees. Each series or class of the Trust will vote separately only with respect to those matters that affect only that series or class or if the interest of the series or class in the matter differs from the interests of other series or classes of the Trust. Independent Accountants Price Waterhouse LLP, 950 Seventeenth Street, Suite 2500, Denver, Colorado 80202, independent accountants for the Funds, audit the Funds' annual financial statements and prepare their tax returns. Registration Statement The Trust has filed with the Securities and Exchange Commission, Washington, D.C., a Registration Statement under the Securities Act of 1933, as amended, with respect to the securities to which this SAI relates. If further information is desired with respect to the Funds or such securities, reference is made to the Registration Statement and the exhibits filed as a part thereof. FINANCIAL STATEMENTS No financial statements are presented for the Shares because the Shares did not commence operations until November 22, 1996. 14 APPENDIX A DESCRIPTION OF SECURITIES RATINGS Moody's and Standard & Poor's Municipal and Corporate Bonds and Municipal Loans The two highest ratings of Standard & Poor's Ratings Services ("S&P") for municipal and corporate bonds are AAA and AA. Bonds rated AAA have the highest rating assigned by S&P to a debt obligation. Capacity to pay interest and repay principal is extremely strong. Bonds rated AA have a very strong capacity to pay interest and repay principal and differ from the highest rated issues only in a small degree. The AA rating may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within that rating category. The two highest ratings of Moody's Investors Service, Inc. ("Moody's") for municipal and corporate bonds are Aaa and Aa. Bonds rated Aaa are judged by Moody's to be of the best quality. Bonds rated Aa are judged to be of high quality by all standards. Together with the Aaa group, they comprise what are generally known as high-grade bonds. Moody's states that Aa bonds are rated lower than the best bonds because margins of protection or other elements make long-term risks appear somewhat larger than Aaa securities. The generic rating Aa may be modified by the addition of the numerals 1, 2 or 3. The modifier 1 indicates that the security ranks in the higher end of the Aa rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the issue ranks in the lower end of such rating category. Short Term Municipal Loans S&P's highest rating for short-term municipal loans is SP-1. S&P states that short-term municipal securities bearing the SP-1 designation have a strong capacity to pay principal and interest. Those issues rated SP-1 which are determined to possess a very strong capacity to pay debt service will be given a plus (+) designation. Issues rated SP-2 have satisfactory capacity to pay principal and interest with some vulnerability to adverse financial and economic changes over the term of the notes. Moody's highest rating for short-term municipal loans is MIG-1/VMIG-1. Moody's states that short-term municipal securities rated MIG-1/VMIG-1 are of the best quality, enjoying strong protection from established cash flows of funds for their servicing or from established and broad-based access to the market for refinancing, or both. Loans bearing the MIG-2/VMIG-2 designation are of high quality, with margins of protection ample although not so large as in the MIG-1/VMIG-1 group. Other Short-Term Debt Securities Prime-1 and Prime-2 are the two highest ratings assigned by Moody's for other short-term debt securities and commercial paper, and A-1 and A-2 are the two highest ratings for commercial paper assigned by S&P. Moody's uses the numbers 1, 2 and 3 to denote relative strength within its highest classification of Prime, while S&P uses the numbers 1, 2 and 3 to denote relative strength within its highest classification of A. Issuers rated Prime-1 by Moody's have a superior ability for repayment of senior short-term debt obligations and have many of the following characteristics: leading market positions in well-established industries, high rates of return on funds employed, conservative capitalization structure with moderate reliance on debt and ample asset protection, broad margins in earnings coverage of fixed financial charges and high internal cash generation, and well established access to a range of financial markets and assured sources of alternate liquidity. Issuers rated Prime-2 by Moody's have a strong ability for repayment of senior short-term debt obligations and display many of the same characteristics displayed by issuers rated Prime-1, but to a lesser degree. Issuers rated A-1 by S&P carry a strong degree of safety regarding timely repayment. Those issues determined to possess extremely strong safety characteristics are denoted with a plus (+) designation. Issuers rated A-2 by S&P carry a satisfactory degree of safety regarding timely repayment. Fitch F-1+ - Exceptionally strong credit quality. Issues assigned this rating are regarded as having the strongest degree of assurance for timely payment. F-1 - Very strong credit quality. Issues assigned this rating reflect an assurance for timely payment only slightly less in degree than issues rated F-1+. F-2 - Good credit quality. Issues assigned this rating have a satisfactory degree of assurance for timely payments, but the margin of safety is not as great as the F-1+ and F-1 ratings. 15 Duff & Phelps Inc. Duff 1+ - Highest certainty of timely payment. Short-term liquidity, including internal operating factors and/or ready access to alternative sources of funds, is clearly outstanding, and safety is just below risk-free U.S. Treasury short-term obligations. Duff 1 - Very high certainty of timely payment. Liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. Duff 1- - High certainty of timely payment. Liquidity factors are strong and supported by good fundamental protection factors. Risk factors are very small. Duff 2 - Good certainty of timely payment. Liquidity factors and company fundamentals are sound. Although ongoing funding needs may enlarge total financing requirements, access to capital markets is good. Risk factors are small. Thomson BankWatch, Inc. TBW-1- The highest category; indicates a very high degree of likelihood that principal and interest will be paid on a timely basis. TBW-2- The second highest category; while the degree of safety regarding timely repayment of principal and interest is strong, the relative degree of safety is not as high as for issues rated TBW-1. TBW-3- The lowest investment grade category; indicates that while more susceptible to adverse developments (both internal and external) than obligations with higher ratings, capacity to service principal and interest in a timely fashion is considered adequate. TBW-4 - The lowest rating category; this rating is regarded as non-investment grade and therefore speculative. IBCA, Inc. A1+ - Obligations supported by the highest capacity for timely repayment. Where issues possess a particularly strong credit feature, a rating of A1+ is assigned. A2 - Obligations supported by a good capacity for timely repayment. A3 - Obligations supported by a satisfactory capacity for timely repayment. B - Obligations for which there is an uncertainty as to the capacity to ensure timely repayment. C - Obligations for which there is a high risk of default or which are currently in default. 16 APPENDIX B DESCRIPTION OF MUNICIPAL SECURITIES Municipal Notes generally are used to provide for short-term capital needs and usually have maturities of one year or less. They include the following: 1. Project Notes, which carry a U.S. government guarantee, are issued by public bodies (called "local issuing agencies") created under the laws of a state, territory, or U.S. possession. They have maturities that range up to one year from the date of issuance. Project Notes are backed by an agreement between the local issuing agency and the Federal Department of Housing and Urban Development. These Notes provide financing for a wide range of financial assistance programs for housing, redevelopment, and related needs (such as low-income housing programs and renewal programs). 2. Tax Anticipation Notes are issued to finance working capital needs of municipalities. Generally, they are issued in anticipation of various seasonal tax revenues, such as income, sales, use and business taxes, and are payable from these specific future taxes. 3. Revenue Anticipation Notes are issued in expectation of receipt of other types of revenues, such as Federal revenues available under the Federal Revenue Sharing Programs. 4. Bond Anticipation Notes are issued to provide interim financing until long-term financing can be arranged. In most cases, the long-term bonds then provide the money for the repayment of the Notes. 5. Construction Loan Notes are sold to provide construction financing. After successful completion and acceptance, many projects receive permanent financing through the Federal Housing Administration under the Federal National Mortgage Association ("Fannie Mae") or the Government National Mortgage Association ("Ginnie Mae"). 6. Tax-Exempt Commercial Paper is a short-term obligation with a stated maturity of 365 days or less. It is issued by agencies of state and local governments to finance seasonal working capital needs or as short-term financing in anticipation of longer term financing. Municipal Bonds, which meet longer term capital needs and generally have maturities of more than one year when issued, have three principal classifications: 1. General Obligation Bonds are issued by such entities as states, counties, cities, towns, and regional districts. The proceeds of these obligations are used to fund a wide range of public projects, including construction or improvement of schools, highways and roads, and water and sewer systems. The basic security behind General Obligation Bonds is the issuer's pledge of its full faith and credit and taxing power for the payment of principal and interest. The taxes that can be levied for the payment of debt service may be limited or unlimited as to the rate or amount of special assessments. 2. Revenue Bonds in recent years have come to include an increasingly wide variety of types of municipal obligations. As with other kinds of municipal obligations, the issuers of revenue bonds may consist of virtually any form of state or local governmental entity, including states, state agencies, cities, counties, authorities of various kinds, such as public housing or redevelopment authorities, and special districts, such as water, sewer or sanitary districts. Generally, revenue bonds are secured by the revenues or net revenues derived from a particular facility, group of facilities, or, in some cases, the proceeds of a special excise or other specific revenue source. Revenue bonds are issued to finance a wide variety of capital projects including electric, gas, water and sewer systems; highways, bridges, and tunnels; port and airport facilities; colleges and universities; and hospitals. Many of these bonds provide additional security in the form of a debt service reserve fund to be used to make principal and interest payments. Various forms of credit enhancement, such as a bank letter of credit or municipal bond insurance, may also be employed in revenue bond issues. Housing authorities have a wide range of security, including partially or fully insured mortgages, rent subsidized and/ or collateralized mortgages, and/or the net revenues from housing or other public projects. Some authorities provide further security in the form of a state's ability (without obligation) to make up deficiencies in the debt service reserve fund. In recent years, revenue bonds have been issued in large volumes for projects that are privately owned and operated (see 3 below). 3. Private Activity Bonds are considered municipal bonds if the interest paid thereon is exempt from Federal income tax and are issued by or on behalf of public authorities to raise money to finance various privately operated facilities for business and manufacturing, housing and health. These bonds are also used to finance public facilities such as airports, mass transit systems and ports. The payment of the principal and interest on such bonds is dependent solely on the ability of the facility's user to meet its financial obligations and the pledge, if any, of real and personal property as security for such payment. While, at one time, the pertinent provisions of the Internal Revenue Code permitted private activity bonds to bear tax-exempt interest in connection with virtually any type of commercial or industrial project (subject to various restrictions as to authorized costs, size limitations, state per capita volume restrictions, and other matters), the types of qualifying projects under the Code 17 have become increasingly limited, particularly since the enactment of the Tax Reform Act of 1986. Under current provisions of the Code, tax-exempt financing remains available, under prescribed conditions, for certain privately owned and operated rental multi-family housing facilities, nonprofit hospital and nursing home projects, airports, docks and wharves, mass commuting facilities and solid waste disposal projects, among others, and for the refunding (that is, the tax-exempt refinancing) of various kinds of other private commercial projects originally financed with tax-exempt bonds. In future years, the types of projects qualifying under the Code for tax-exempt financing are expected to become increasingly limited. Because of terminology formerly used in the Internal Revenue Code, virtually any form of private activity bond may still be referred to as an "industrial development bond," but more and more frequently revenue bonds have become classified according to the particular type of facility being financed, such as hospital revenue bonds, nursing home revenue bonds, multi-family housing revenue bonds, single family housing revenue bonds, industrial development revenue bonds, solid waste resource recovery revenue bonds, and so on. Other Municipal Obligations, incurred for a variety of financing purposes, include: municipal leases, which may take the form of a lease or an installment purchase or conditional sale contract, are issued by state and local governments and authorities to acquire a wide variety of equipment and facilities such as fire and sanitation vehicles, telecommunications equipment and other capital assets. Municipal leases frequently have special risks not normally associated with general obligation or revenue bonds. Leases and installment purchase or conditional sale contracts (which normally provide for title to the leased asset to pass eventually to the government issuer) have evolved as a means for governmental issuers to acquire property and equipment without meeting the constitutional and statutory requirements for the issuance of debt. The debt-issuance limitations of many state constitutions and statutes are deemed to be inapplicable because of the inclusion in many leases or contracts of "non-appropriation" clauses that provide that the governmental issuer has no obligation to make future payments under the lease or contract unless money is appropriated for such purpose by the appropriate legislative body on a yearly or other periodic basis. To reduce this risk, the Fund will only purchase municipal leases subject to a non-appropriation clause when the payment of principal and accrued interest is backed by an unconditional irrevocable letter of credit, or guarantee of a bank or other entity that meets the criteria described in the Prospectus. Tax-exempt bonds are also categorized according to whether the interest is or is not includible in the calculation of alternative minimum taxes imposed on individuals, according to whether the costs of acquiring or carrying the bonds are or are not deductible in part by banks and other financial institutions, and according to other criteria relevant for Federal income tax purposes. Due to the increasing complexity of Internal Revenue Code and related requirements governing the issuance of tax-exempt bonds, industry practice has uniformly required, as a condition to the issuance of such bonds, but particularly for revenue bonds, an opinion of nationally recognized bond counsel as to the tax-exempt status of interest on the bonds. 18 JANUS INVESTMENT FUND PART C - OTHER INFORMATION ITEM 24. Financial Statements and Exhibits List all financial statements and exhibits filed as part of the Registration Statement. (a)(1) Financial Statements Included in the Prospectus: Financial Highlights for the Service Shares of each of the money market funds: Not Applicable (a)(2) Financial Statements included in the Statement of Additional Information for the Service Shares of each of the money market funds: Not Applicable (b) Exhibits: Exhibit 1 (a) Agreement and Declaration of Trust, dated February 11, 1986 is incorporated herein by reference to Exhibit 1 to Post-Effective Amendment No. 30. (b) Certificate of Designation for Janus Growth and Income Fund is incorporated herein by reference to Exhibit 1(b) to Post-Effective Amendment No. 42. (c) Certificate of Designation for Janus Worldwide Fund is incorporated herein by reference to Exhibit 1(c) to Post- Effective Amendment No. 42. (d) Certificate of Designation for Janus Twenty Fund is incorporated herein by reference to Exhibit 1(d) to Post- Effective Amendment No. 46. (e) Certificate of Designation for Janus Flexible Income Fund is incorporated herein by reference to Exhibit 1(e) to Post-Effective Amendment No. 46. (f) Certificate of Designation for Janus Intermediate Government Securities Fund is incorporated herein by reference to Exhibit 1(f) to Post-Effective Amendment No. 46. (g) Certificate of Designation for Janus Venture Fund is incorporated herein by reference to Exhibit 1(g) to Post- Effective Amendment No. 47. C-1 (h) Certificate of Designation for Janus Enterprise Fund is incorporated herein by reference to Exhibit 1(h) to Post- Effective Amendment No. 48. (i) Certificate of Designation for Janus Balanced Fund is incorporated herein by reference to Exhibit 1(i) to Post- Effective Amendment No. 48. (j) Certificate of Designation for Janus Short-Term Bond Fund is incorporated herein by reference to Exhibit 1(j) to Post-Effective Amendment No. 48. (k) Certificate of Designation for Janus Federal Tax-Exempt Fund is incorporated herein by reference to Exhibit 1(k) to Post-Effective Amendment No. 54. (l) Certificate of Designation for Janus Mercury Fund is incorporated herein by reference to Exhibit 1(l) to Post- Effective Amendment No. 54. (m) Certificate of Designation for Janus Overseas Fund is incorporated herein by reference to Exhibit 1(m) to Post-Effective Amendment No. 60. (n) Form of Amendment to the Registrant's Agreement and Declaration of Trust is incorporated herein by reference to Exhibit 1(n) to Post-Effective Amendment No. 62. (o) Form of Certificate of Designation for Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund is incorporated herein by reference to Exhibit 1(o) to Post-Effective Amendment No. 62. (p) Form of Certificate of Designation for Janus High-Yield Fund and Janus Olympus Fund is incorporated herein by reference to Exhibit 1(p) to Post-Effective Amendment No. 68. (q) Certificate of Designation for Janus Equity Income Fund is incorporated herein by reference to Exhibit 1(q) to Post-Effective Amendment No. 72. (r) Form of Certificate of Establishment and Designation for Janus Special Situations Fund is incorporated herein by reference to Exhibit 1(r) to Post-Effective Amendment No. 75. C-2 (s) Form of Amendment to Registrant's Agreement and Declaration of Trust is incorporated herein by reference to Exhibit 1(s) to Post-Effective Amendment No. 75. Exhibit 2 (a) Restated Bylaws are incorporated herein by reference to Exhibit 2(a) to Post-Effective Amendment No. 71. (b) First Amendment to the Bylaws is incorporated herein by reference to Exhibit 2(b) to Post-Effective Amendment No. 71. Exhibit 3 Not Applicable. Exhibit 4 (a) Specimen Stock Certificate for Janus Fund(1) is incorporated herein by reference to Exhibit 4(b) to Post-Effective Amendment No. 42. (b) Specimen Stock Certificate for Janus Growth and Income Fund is incorporated herein by reference to Exhibit 4(b) to Post-Effective Amendment No. 42. (c) Specimen Stock Certificate for Janus Worldwide Fund is incorporated herein by reference to Exhibit 4(c) to Post- Effective Amendment No. 42. (d) Specimen Stock Certificate for Janus Twenty Fund(1) is incorporated herein by reference to Exhibit 4(d) to Post- Effective Amendment No. 46. (e) Specimen Stock Certificate for Janus Flexible Income Fund(1) is incorporated herein by reference to Exhibit 4(e) to Post-Effective Amendment No. 46. (f) Specimen Stock Certificate for Janus Intermediate Government Securities Fund(1) is incorporated herein by reference to Exhibit 4(f) to Post-Effective Amendment No. 46. (g) Specimen Stock Certificate for Janus Venture Fund(1) is incorporated herein by reference to Exhibit 4(g) to Post-Effective Amendment 47. (h) Specimen Stock Certificate for Janus Enterprise Fund is incorporated herein by reference to Exhibit 4(h) to Post- Effective Amendment No. 48. - ------------------- (1) Outstanding certificates representing shares of predecessor entity to this series of the Trust are deemed to represent shares of this series. C-3 (i) Specimen Stock Certificate for Janus Balanced Fund is incorporated herein by reference to Exhibit 4(i) to Post- Effective Amendment No. 48. (j) Specimen Stock Certificate for Janus Short-Term Bond Fund is incorporated herein by reference to Exhibit 4(j) to Post-Effective Amendment No. 48. (k) Specimen Stock Certificate for Janus Federal Tax-Exempt Fund is incorporated herein by reference to Exhibit 4(k) to Post-Effective Amendment No. 54. (l) Specimen Stock Certificate for Janus Mercury Fund is incorporated herein by reference to Exhibit 4(l) to Post- Effective Amendment No. 54. (m) Specimen Stock Certificate for Janus Overseas Fund is incorporated herein by reference to Exhibit 4(m) to Post-Effective Amendment No. 60. (n) Specimen Stock Certificates for Janus High-Yield Fund and Janus Olympus Fund are incorporated herein by reference to Exhibit 4(n) to Post-Effective Amendment No. 68. (o) Specimen Stock Certificate for Janus Equity Income Fund is incorporated herein by reference to Exhibit 4(o) to Post-Effective Amendment No. 72. (p) Specimen Stock Certificate for Janus Special Situations Fund is incorporated herein by reference to Exhibit 4(p) to Post-Effective Amendment No. 75. Exhibit 5 (a) Investment Advisory Agreement for Janus Fund is incorporated herein by reference to Exhibit 5 to Post-Effective Amendment No. 30. (b) Investment Advisory Agreement for Janus Growth and Income Fund and Janus Worldwide Fund is incorporated herein by reference to Exhibit 5(b) to Post-Effective Amendment No. 42. (c) Form of Investment Advisory Agreement for Janus Twenty Fund and Janus Venture Fund is incorporated herein by reference to Exhibit 5(c) to Post-Effective Amendment No. 46. (d) Form of Investment Advisory Agreement for Janus Flexible Income Fund and Janus Intermediate Government Securities Fund is incorporated herein by reference to Exhibit 5(d) to Post-Effective Amendment No. 46. C-4 (e) Form of Investment Advisory Agreement for Janus Enterprise Fund, Janus Balanced Fund and Janus Short-Term Bond Fund is incorporated herein by reference to Exhibit 5(e) to Post-Effective Amendment No. 48. (f) Form of Investment Advisory Agreement for Janus Federal Tax-Exempt Fund and Janus Mercury Fund is incorporated herein by reference to Exhibit 5(f) to Post-Effective Amendment No. 54. (g) Form of Investment Advisory Agreement for Janus Overseas Fund is incorporated herein by reference to Exhibit 5(g) to Post-Effective Amendment No. 60. (h) Form of Investment Advisory Agreement for Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund is incorporated herein by reference to Exhibit 5(h) to Post-Effective Amendment No. 64. (i) Restated form of Investment Advisory Agreement for Janus High-Yield Fund is filed herein as Exhibit 5(i). (j) Restated form of Investment Advisory Agreement for Janus Olympus Fund is filed herein as Exhibit 5(j). (k) Form of Investment Advisory Agreement for Janus Equity Income Fund is incorporated herein by reference to Exhibit 5(k) to Post-Effective Amendment No. 73. (l) Form of Investment Advisory Agreement for Janus Special Situations Fund is incorporated herein by reference to Exhibit 5(l) to Post-Effective Amendment No. 75. Exhibit 6 Form of Distribution Agreement between Janus Investment Fund and Janus Distributors, Inc. is incorporated herein by reference to Exhibit 6 to Post-Effective Amendment No. 57. Exhibit 7 Not Applicable. Exhibit 8 (a) Custodian Contract between Janus Investment Fund and State Street Bank and Trust Company is incorporated herein by reference to Exhibit 8(a) to Post-Effective Amendment No. 32. (b) Amendment dated April 25, 1990 of State Street Custodian Contract is incorporated herein by reference to Exhibit 8(b) to Post-Effective Amendment No. 40. C-5 (c) Letter Agreement dated February 1, 1991 regarding State Street Custodian Contract is incorporated herein by reference to Exhibit 8(c) to Post-Effective Amendment No. 42. (d) Custodian Contract between Janus Investment Fund and Investors Fiduciary Trust Company is incorporated herein by reference to Exhibit 8(d) to Post-Effective Amendment No. 42. (e) Letter Agreement dated October 9, 1992 regarding State Street Custodian Agreement is incorporated herein by reference to Exhibit 8(e) to Post-Effective Amendment No. 52. (f) Letter Agreement dated April 28, 1993 regarding State Street Custodian Agreement is incorporated herein by reference to Exhibit 8(f) to Post-Effective Amendment No. 60. (g) Letter Agreement dated April 4, 1994 regarding State Street Custodian Agreement is incorporated herein by reference to Exhibit 8(g) to Post-Effective Amendment No. 64. (h) Form of Custody Agreement between Janus Investment Fund, on behalf of Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund, and United Missouri Bank, N.A. is incorporated herein by reference to Exhibit 8(h) to Post- Effective Amendment No. 64. (i) Letter Agreement dated December 12, 1995 regarding State Street Custodian Contract is incorporated herein by reference to Exhibit 8(i) to Post-Effective Amendment No. 72. (j) Amendment dated October 11, 1995 of State Street Custodian Contract is incorporated herein by reference to Exhibit 8(j) to Post-Effective Amendment No. 71. (k) Form of Amendment dated September 10, 1996 of State Street Custodian Contract is incorporated herein by reference to Exhibit 8(k) to Post-Effective Amendment No. 75. (l) Letter Agreement dated September 10, 1996 regarding State Street Custodian Contract is incorporated herein by reference to Exhibit 8(l) to Post-Effective Amendment No. 75. C-6 (m) Form of Subcustodian Contract between United Missouri Bank, N.A., and State Street Bank and Trust Company is incorporated herein by reference to Exhibit 8(m) to Post-Effective Amendment No. 75. Exhibit 9 (a) Transfer Agency Agreement with Investors Fiduciary Trust Company is hereby withdrawn. (b) Subagency Agreement between Janus Service Corporation and Investors Fiduciary Trust Company is hereby withdrawn. (c) Form of Administration Agreement with Janus Capital Corporation for Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund is incorporated herein by reference to Exhibit 9(c) to Post-Effective Amendment No. 64. (d) Transfer Agency Agreement dated December 9, 1994 with Janus Service Corporation for Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund filed as Exhibit 9(d) to Post-Effective Amendment No. 64 is withdrawn. (e) Transfer Agency Agreement dated September 27, 1995 with Janus Service Corporation for Janus Money Market Fund, Janus Government Money Market Fund, Janus Tax-Exempt Money Market Fund, Janus High-Yield Fund and Janus Olympus Fund is incorporated herein by reference to Exhibit 9(e) to Post-Effective Amendment No. 70. (f) Letter Agreement dated December 21, 1995 regarding Janus Service Corporation Transfer Agency Agreement is incorporated herein by reference to Exhibit 9(f) to Post-Effective Amendment No. 72. (g) Letter Agreement dated May 21, 1996 regarding Janus Service Corporation Transfer Agency Agreement is incorporated by reference to Exhibit 9(g) to Post-Effective Amendment No. 73. (h) Form of Amended Administration Agreement with Janus Capital Corporation for Janus Money Market Fund, Janus Government Money Market Fund, and Janus Tax-Exempt Money Market Fund is filed herein as Exhibit 9(h). (i) Letter Agreement dated September 10, 1996 regarding Janus Service Corporation Transfer Agency Agreement is filed herein as Exhibit 9(i). C-7 Exhibit 10 (a) Opinion and Consent of Messrs. Davis, Graham & Stubbs with respect to shares of Janus Fund is incorporated herein by reference to Exhibit 10 (a) to Post-Effective Amendment No. 31. (b) Opinion and Consent of Fund Counsel with respect to shares of Janus Growth and Income Fund and Janus Worldwide Fund is incorporated herein by reference to Exhibit 10(b) to Post-Effective Amendment 42. (c) Opinion and Consent of Fund Counsel with respect to shares of Janus Enterprise Fund, Janus Balanced Fund and Janus Short-Term Bond Fund is incorporated herein by reference to Exhibit 10(d) to Post-Effective Amendment No. 48. (d) Opinion and Consent of Messrs. Sullivan and Worcester with respect to shares of Janus Twenty Fund is incorporated herein by reference to Exhibit 10(e) to Post- Effective Amendment No. 49. (e) Opinion and Consent of Messrs. Sullivan and Worcester with respect to shares of Janus Venture Fund is incorporated herein by reference to Exhibit 10(f) to Post-Effective Amendment No. 49. (f) Opinion and Consent of Messrs. Sullivan and Worcester with respect to shares of Janus Flexible Income Fund is incorporated herein by reference to Exhibit 10(g) to Post-Effective Amendment No. 49. (g) Opinion and Consent of Messrs. Sullivan and Worcester with respect to shares of Janus Intermediate Government Securities Fund is incorporated herein by reference to Exhibit 10(h) to Post-Effective Amendment No. 49. (h) Opinion and Consent of Fund Counsel with respect to shares of Janus Federal Tax-Exempt Fund and Janus Mercury Fund is incorporated herein by reference to Exhibit 10(i) to Post-Effective Amendment No. 54. (i) Opinion and Consent of Fund Counsel with respect to shares of Janus Overseas Fund is incorporated herein by reference to Exhibit 10(i) to Post-Effective Amendment No. 60. (j) Opinion and Consent of Fund Counsel with respect to shares of Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market C-8 Fund is incorporated herein by reference to Exhibit 10(j) to Post-Effective Amendment No. 62. (k) Opinion and Consent of Fund Counsel with respect to Institutional Shares of Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund is incorporated herein by reference to Exhibit 10(k) to Post-Effective Amendment No. 65. (l) Opinion and Consent of Fund Counsel with respect to shares of Janus High-Yield Fund and Janus Olympus Fund is incorporated herein by reference to Exhibit 10(l) to Post-Effective Amendment No. 68. (m) Opinion and Consent of Fund Counsel with respect to shares of Janus Equity Income Fund is incorporated herein by reference to Exhibit 10(m) to Post-Effective Amendment No. 72. (n) Opinion and Consent of Fund Counsel with respect to shares of Janus Special Situations Fund is incorporated herein by reference to Exhibit 10(n) to Post-Effective Amendment No. 75. (o) Opinion and Consent of Fund Counsel with respect to shares of Janus Money Market Fund, Janus Government Money Market Fund, and Janus Tax-Exempt Money Market Fund is filed herein as Exhibit 10(o). Exhibit 11 Consent of Price Waterhouse LLP is filed herein as Exhibit 11. Exhibit 12 Not Applicable. Exhibit 13 Not Applicable. Exhibit 14 (a) Model Individual Retirement Plan is incorporated herein by reference to Exhibit 14(a) to Post-Effective Amendment No. 57. (b) Model Defined Contribution Retirement Plan is incorporated herein by reference to Exhibit 14(b) to Post-Effective Amendment No. 41. (c) Model Section 403(b)(7) Plan is incorporated herein by reference to Exhibit 14(c) to Post-Effective Amendment No. 38. Exhibit 15 Not Applicable. C-9 Exhibit 16 (a) Computation of Total Return is incorporated herein by reference to Exhibit 16 to Post-Effective Amendment No. 44. (b) Computation of Current Yield and Effective Yield is incorporated herein by reference to Exhibit 16(b) to Post- Effective Amendment No. 67. Exhibit 17 Powers of Attorney dated as of June 30, 1995, are incorporated herein by reference to Exhibit 17 to Post- Effective Amendment No. 67. Exhibit 18 (a) Form of plan entered into by Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund pursuant to Rule 18f-3 setting forth the separate arrangement and expense allocation of each class of such Funds filed as Exhibit 18 to Post-Effective Amendment No. 66 is withdrawn. (b) Restated form of Rule 18f-3 Plan entered into by Janus Money Market Fund, Janus Government Money Market Fund and Janus Tax-Exempt Money Market Fund is incorporated by reference to Exhibit 18(b) to Post-Effective Amendment No. 69. (c) Amended and Restated form of Rule 18f-3 Plan entered into by Janus Money Market Fund, Janus Government Money Market Fund, and Janus Tax-Exempt Money Market Fund is filed herein as Exhibit 18(c). Exhibit 27 A Financial Data Schedule for the following Fund will be filed by amendment: Janus Money Market Fund - Service Shares Janus Government Money Market Fund - Service Shares Janus Tax-Exempt Money Market Fund - Service Shares ITEM 25. Persons Controlled by or Under Common Control with Registrant None C-10 ITEM 26. Number of Holders of Securities The number of record holders of shares of the Registrant as of August 15, 1996, was as follows: Number of Title of Class Record Holders Janus Fund shares 800,829 Janus Growth and Income Fund shares 94,417 Janus Worldwide Fund shares 231,854 Janus Overseas Fund shares 38,479 Janus Twenty Fund shares 334,120 Janus Flexible Income Fund shares 31,098 Janus Intermediate Government Securities Fund shares 4,576 Janus Venture Fund shares 132,657 Janus Enterprise Fund shares 83,543 Janus Balanced Fund shares 20,973 Janus Short-Term Bond Fund shares 4,400 Janus Federal Tax-Exempt Fund shares 3,867 Janus Mercury Fund shares 215,206 Janus Money Market Fund - Investor Shares 73,781 Janus Money Market Fund - Institutional Shares 87 Janus Money Market Fund - Service Shares N/A Janus Government Money Market Fund - Investor Shares 11,670 Janus Government Money Market Fund - Institutional Shares 7 Janus Government Money Market Fund - Service Shares N/A Janus Tax-Exempt Money Market Fund - Investor Shares 5,982 Janus Tax-Exempt Money Market Fund - Institutional Shares 5 Janus Tax-Exempt Money Market Fund - Service Shares N/A Janus High-Yield Fund shares 5,023 Janus Olympus Fund shares 34,469 Janus Equity Income Fund shares 2,224 Janus Special Situations Fund shares N/A ITEM 27. Indemnification Article VIII of Janus Investment Fund's Agreement and Declaration of Trust provides for indemnification of certain persons acting on behalf of the Funds. In general, Trustees and officers will be indemnified against liability and against all expenses of litigation incurred by them in connection with any claim, action, suit or proceeding (or settlement of the same) in which they become involved by virtue of their Fund office, unless their conduct is determined to constitute willful misfeasance, bad faith, gross negligence or reckless disregard of their duties, or unless it has been determined that they have not acted in good faith in the reasonable belief that their actions were in or not opposed to the best interests of the Funds. A determination that a person covered by the indemnification provisions is entitled to indemnification may be made by the court or other body before which the proceeding is brought, or by either a vote of a majority of a quorum of Trustees who are neither "interested persons" of the Trust nor parties to the proceeding or by an independent legal counsel in a written opinion. The Funds also may advance money for these expenses, provided that the Trustee or officer undertakes to repay the Funds if his conduct is later determined to preclude indemnification, and that either he provide C-11 security for the undertaking, the Trust be insured against losses resulting from lawful advances or a majority of a quorum of disinterested Trustees, or independent counsel in a written opinion, determines that he ultimately will be found to be entitled to indemnification. The Trust also maintains a liability insurance policy covering its Trustees and officers. ITEM 28. Business and Other Connections of Investment Adviser The only business of Janus Capital Corporation is to serve as the investment adviser of the Registrant and as investment adviser or subadviser to several other mutual funds and private and retirement accounts. Business backgrounds of the principal executive officers and directors of the adviser that also hold positions with the Registrant are included under "Officers and Trustees" in the currently effective Statements of Additional Information of the Registrant. The remaining principal executive officers of the investment adviser and their positions with the adviser and affiliated entities are: Mark B. Whiston, Vice President and Chief Marketing Officer of Janus Capital Corporation, Director and President of Janus Capital International Ltd.; Marjorie G. Hurd, Vice President of Janus Capital Corporation, Director and President of Janus Service Corporation; and Stephen L. Stieneker, Assistant General Counsel, Chief Compliance Officer and Vice President of Compliance of Janus Capital Corporation. Mr. Michael E. Herman, a director of Janus Capital Corporation, is Chairman of the Finance Committee (1990 to present) of Ewing Marion Kauffman Foundation, 4900 Oak, Kansas City, Missouri 64112. Mr. Michael N. Stolper, a director of Janus Capital Corporation, is President of Stolper & Company, Inc., 525 "B" Street, Suite 1080, San Diego, California 92101, an investment performance consultant. Mr. Thomas A. McDonnell, a director of Janus Capital Corporation, is President, Chief Executive Officer and a Director of DST Systems, Inc., 1055 Broadway, 9th Floor, Kansas City, Missouri 64105, provider of data processing and recordkeeping services for various mutual funds, and is Executive Vice President and a director of Kansas City Southern Industries, Inc., 114 W. 11th Street, Kansas City, Missouri 64105, a publicly traded holding company whose primary subsidiaries are engaged in transportation, information processing and financial services. Mr. Landon H. Rowland, a director of Janus Capital Corporation, is President and Chief Executive Officer of Kansas City Southern Industries, Inc. ITEM 29. Principal Underwriters (a) Janus Distributors, Inc. ("Janus Distributors") does not serve as a principal underwriter for any investment company other than Registrant. (b) The principal business address, positions with Janus Distributors and positions with Registrant of David C. Tucker and Steven R. Goodbarn, officers and directors of Janus Distributors, are described under "Officers and Trustees" in the Statement of Additional Information included in this Registration Statement. The remaining principal executive officers of Janus Distributors are Dana R. Cunningham, President, and Jennifer A. Davis, Secretary. Mr. Cunningham and Ms. Davis do not hold any positions with the Registrant. The principal business address of each person is 100 Fillmore Street, Denver, Colorado 80206-4923. (c) Not applicable. C-12 ITEM 30. Location of Accounts and Records The accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the rules promulgated thereunder are maintained by Janus Capital Corporation and Janus Service Corporation, both of which are located at 100 Fillmore Street, Denver, Colorado 80206-4923, and by State Street Bank and Trust Company, P.O. Box 351, Boston, Massachusetts 02101, and United Missouri Bank, P.O. Box 419226, Kansas City, Missouri 64141-6226. ITEM 31. Management Services The Registrant has no management-related service contract which is not discussed in Part A or Part B of this form. ITEM 32. Undertakings (a) Not applicable. (b) The Registrant undertakes to file one or more post-effective amendments for Janus Money Market Fund - Service Shares, Janus Government Money Market Fund - Service Shares, and Janus Tax-Exempt Money Market Fund - Service Shares, using financial statements which need not be certified, within four to six months of the later of the effective date of this Amendment to the Registration Statement or the commencement of operations of the Service Shares of such Funds. (c) The Registrant undertakes to furnish each person to whom a prospectus is delivered with a copy of the Registrant's latest annual report to shareholders, upon request and without charge. C-13 SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has duly caused this Amendment to its Registration Statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Denver, and State of Colorado, on the 23rd day of September, 1996. JANUS INVESTMENT FUND By: /s/ Thomas H. Bailey Thomas H. Bailey, President Janus Investment Fund is organized under the Agreement and Declaration of Trust of the Registrant dated February 11, 1986, a copy of which is on file with the Secretary of State of The Commonwealth of Massachusetts. The obligations of the Registrant hereunder are not binding upon any of the Trustees, shareholders, nominees, officers, agents or employees of the Registrant personally, but bind only the trust property of the Registrant, as provided in the Agreement and Declaration of Trust of the Registrant. The execution of this Amendment to the Registration Statement has been authorized by the Trustees of the Registrant and this Amendment to the Registration Statement has been signed by an authorized officer of the Registrant, acting as such, and neither such authorization by such Trustees nor such execution by such officer shall be deemed to have been made by any of them personally, but shall bind only the trust property of the Registrant as provided in its Declaration of Trust. Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. Signature Title Date /s/ Thomas H. Bailey President September 23, 1996 Thomas H. Bailey (Principal Executive Officer) and Trustee /s/ Steven R. Goodbarn Vice President and September 23, 1996 Steven R. Goodbarn Chief Financial Officer (Principal Financial Officer) /s/ Glenn P. O'Flaherty Treasurer and Chief September 23, 1996 Glenn P. O'Flaherty Accounting Officer (Principal Accounting Officer) /s/ James P. Craig, III Trustee September 23, 1996 James P. Craig, III Gary O. Loo* Trustee September 23, 1996 Gary O. Loo Dennis B. Mullen* Trustee September 23, 1996 Dennis B. Mullen John W. Shepardson* Trustee September 23, 1996 John W. Shepardson William D. Stewart* Trustee September 23, 1996 William D. Stewart Martin H. Waldinger* Trustee September 23, 1996 Martin H. Waldinger /s/ Steven R. Goodbarn *By Steven R. Goodbarn Attorney-in-Fact INDEX OF EXHIBITS Exhibit 9(h) Form of Amended Administration Agreement Exhibit 9(i) Letter Agreement to Transfer Agency Agreement Exhibit 10(o) Opinion and Consent of Fund Counsel Exhibit 11 Consent of Price Waterhouse Exhibit 18(c) Amended and Restated Form of Rule 18f-3 Plan EX-9 2 EX-9(H) JIF ADMIN AGMT-MMFUNDS EXHIBIT 9(h) JANUS INVESTMENT FUND ADMINISTRATION AGREEMENT JANUS MONEY MARKET FUND THIS ADMINISTRATION AGREEMENT (the "Agreement") is made this 9th day of December, 1994, and amended on September 10, 1996, between JANUS INVESTMENT FUND, a Massachusetts business trust (the "Trust"), on behalf of Janus Money Market Fund (the "Fund"), a separate series of the Trust and JANUS CAPITAL CORPORATION, a Colorado corporation ("JCC"). W I T N E S S E T H: WHEREAS, the Trust is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"), and has registered its shares for public offering under the Securities Act of 1933, as amended (the "1933 Act"); and WHEREAS, the Trust is authorized to create separate funds, each with its own separate investment portfolio of which the beneficial interests are represented by a separate series of shares of the Trust; and WHEREAS, the Fund may offer shares in multiple classes representing interest in the same portfolio of investments but having potentially different distribution charges, exchange rights and investment minimum requirements (the "Classes"); and WHEREAS, the Trust and JCC have entered into a separate agreement for the provision of investment advisory services; and WHEREAS, the Trust and JCC deem it mutually advantageous that JCC should assist the Trustees and officers of the Trust in the administration of the Fund. NOW, THEREFORE, the parties agree as follows: 1. Administrative Services. JCC shall provide, or arrange for and supervise the provision by others of the following services to the Fund that are incidental to its operations and business and appropriate for its Classes: custody, transfer agency, and fund accounting services; shareholder servicing; provision of office facilities and personnel necessary to carry on the business of the Fund; preparation and filing of all documents necessary to obtain and maintain registration and qualification of the shares of each Class with the Securities and Exchange Commission and state securities commissions; clerical, recordkeeping and bookkeeping services; preparation of reports for distribution to shareholders of the Fund; preparation of prospectuses, statements of additional information and proxy statements for the Fund or any Class thereof; preparation and filing of the Fund's required tax reports; preparation of materials for all meetings of the Trustees (as such materials pertain to a Fund or any Class thereof); preparation and review of contracts to which the Fund is a party; monitoring and reporting to Fund officers the Fund's compliance with investment policies and restrictions as set forth in the currently effective prospectus and statement of additional information of the Fund. 2. Other Services. JCC is hereby authorized to furnish advice and recommendations with respect to such other aspects of the business and affairs of the Fund as the Fund shall determine to be desirable. 3. Obligations of Trust. The Trust shall have the following obligations under this Agreement: a. to keep JCC continuously and fully informed as to the composition of the Fund's investment portfolio and the nature of all of its assets and liabilities from time to time; b. to furnish JCC with a certified copy of any financial statement or report prepared for the Fund by certified or independent public accountants and with copies of any financial statements or reports made to the Fund's shareholders or to any governmental body or securities exchange; c. to furnish JCC with certified copies of the minutes of any and all meetings of the Trustees of the Trust, together with any exhibits presented to the Trustees at such meetings; d. to furnish JCC with any further materials or information which JCC may reasonably request to enable it to perform its functions under this Agreement; and e. to compensate JCC for its services and reimburse JCC for its expenses incurred hereunder in accordance with the provisions hereof. 4. Compensation. The Fund shall pay JCC, for the administrative services provided to the Fund or to any Class, fees calculated in the manner set forth on Appendix A hereto. For the month during which this Agreement becomes effective and the month during which it terminates, however, there shall be an appropriate proration of the fee payable for such month based on the number of calendar days of such month during which this Agreement is effective. 5. Expenses Borne by JCC. Except for those expenses borne by the Trust pursuant to Section 6 below, JCC shall bear all expenses incurred in connection with the operation of the Fund. -2- 6. Expenses Borne by the Trust. The Trust shall bear the following expenses: any compensation, fees, or reimbursements which the Trust pays to its Trustees who are not interested persons of JCC ("Independent Trustees"); fees and expenses of counsel to the Independent Trustees; fees and expenses of consultants to the Fund; audit expenses; brokerage commissions and all other expenses in connection with execution of portfolio transactions; interest; all federal, state and local taxes (including stamp, excise, income and franchise taxes); expenses of shareholder meetings, including the preparation, printing and distribution of proxy statements, notices and reports to shareholders; any litigation and other extraordinary expenses. 7. Termination. This Agreement may be terminated at any time, without penalty, by the Trustees of the Trust, or by the shareholders of the Trust acting by vote of at least a majority of its outstanding voting securities (as defined in the 1940 Act), provided in either case that sixty (60) days advance written notice of termination be given to JCC at its principal place of business. This Agreement may be terminated by JCC at any time, without penalty, by giving sixty (60) days advance written notice of termination to the Trust, addressed to its principal place of business. 8. Term. This Agreement shall continue in effect until June 16, 1996, and for successive annual periods thereafter unless sooner terminated in accordance with Section 7 hereof. 9. Amendments. This Agreement may be amended by the parties only if such amendment is in writing and signed by the parties to this Agreement. 10. Allocation of Expenses. a. The Trustees shall determine the basis for making an appropriate allocation of the Trust's expenses (other than those directly attributable to the Fund) between each Fund and the other series of the Trust. b. The Trustees shall determine the basis for making an appropriate allocation of the Fund's expenses (other than those directly attributable to a Class) between each Class of the Fund. c. JCC will furnish to the Trustees such information as to the nature and amounts of the expenses incurred by JCC in performing its obligations under this Agreement as the Trustees may reasonably require in order to enable the Trustees to allocate expenses as provided in paragraphs (a) and (b) of this Section 10. 11. Limitation of Personal Liability. All the parties hereto acknowledge and agree that all liabilities of the Trust arising, directly or indirectly, under this Agreement, of any and every nature whatsoever, shall be satisfied solely out of the assets of the Fund and that no Trustee, officer or holder of shares of beneficial interest of the Trust shall be personally liable -3- for any of the foregoing liabilities. The Trust's Declaration of Trust, as amended from time to time, is on file in the Office of the Secretary of State of the Commonwealth of Massachusetts. Such Declaration of Trust describes in detail the respective responsibilities and limitations on liability of the Trustees, officers and holders of shares of beneficial interest of the Trust. 12. Limitation of Liability of JCC. JCC shall not be liable for any error of judgment or mistake of law, for any loss arising out of this Agreement, or for any act or omission taken with respect to the Trust, except for willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of reckless disregard of its obligations and duties hereunder and except to the extent otherwise provided by law. As used in this Section 12, "JCC" shall include any affiliate of JCC or any other person retained by JCC performing services for the Trust contemplated hereunder and directors, officers and employees of JCC and such affiliates or any such person. 13. Activities of JCC. The services of JCC to the Trust hereunder are not to be deemed to be exclusive, and JCC and its affiliates are free to render services to other parties. It is understood that Trustees, officers and shareholders of the Trust are or may become interested in JCC as directors, officers and shareholders of JCC, that directors, officers, employees and shareholders of JCC are or may become similarly interested in the Trust, and that JCC may become interested in the Trust as a shareholder or otherwise. IN WITNESS WHEREOF, the parties have caused their duly authorized officers to execute this Administration Agreement as of the date and year first above written. JANUS CAPITAL CORPORATION By: /s/ Steven R. Goodbarn Name: Steven R. Goodbarn Title: Vice President JANUS INVESTMENT FUND By: /s/ Thomas H. Bailey Name: Thomas H. Bailey Title: President -4- Revised as of September 10, 1996 APPENDIX A In accordance with Section 4 of this Agreement, the Fund shall compensate JCC for services provided to each Class of the Fund in accordance with the following schedule: I. JANUS MONEY MARKET FUND - INSTITUTIONAL SHARES will pay to JCC for its administrative services a monthly fee, payable on the last day of each month during which or part of which this Agreement is in effect, of 1/365 of 0.15% of the closing aggregate net asset value of the shares of such Class for each day of such month. II. JANUS MONEY MARKET FUND - INVESTOR SHARES will pay to JCC for its administrative services a monthly fee, payable on the last day of each month during which or part of which this Agreement is in effect, of 1/365 of 0.50% of the closing aggregate net asset value of the shares of each such Class for each day of such month. III. JANUS MONEY MARKET FUND - SERVICE SHARES will pay to JCC for its administrative services a monthly fee, payable on the last day of each month during which or part of which this Agreement is in effect, of 1/365 of 0.40% of the closing aggregate net asset value of the shares of such Class for each day of such month. JANUS INVESTMENT FUND ADMINISTRATION AGREEMENT JANUS GOVERNMENT MONEY MARKET FUND THIS ADMINISTRATION AGREEMENT (the "Agreement") is made this 9th day of December, 1994, between JANUS INVESTMENT FUND, a Massachusetts business trust (the "Trust"), on behalf of Janus Government Money Market Fund (the "Fund"), a separate series of the Trust and JANUS CAPITAL CORPORATION, a Colorado corporation ("JCC"). W I T N E S S E T H: WHEREAS, the Trust is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"), and has registered its shares for public offering under the Securities Act of 1933, as amended (the "1933 Act"); and WHEREAS, the Trust is authorized to create separate funds, each with its own separate investment portfolio of which the beneficial interests are represented by a separate series of shares of the Trust; and WHEREAS, the Fund may offer shares in multiple classes representing interest in the same portfolio of investments but having potentially different distribution charges, exchange rights and investment minimum requirements (the "Classes"); and WHEREAS, the Trust and JCC have entered into a separate agreement for the provision of investment advisory services; and WHEREAS, the Trust and JCC deem it mutually advantageous that JCC should assist the Trustees and officers of the Trust in the administration of the Fund. NOW, THEREFORE, the parties agree as follows: 1. Administrative Services. JCC shall furnish or arrange for the following services to the Fund incidental to its operations and business: provision of custody, transfer agency, and fund accounting services; provision of shareholder servicing; provision of office facilities and personnel necessary to carry on the business of the Fund; preparation and filing of all documents necessary to obtain and maintain registration and qualification of the shares of each Class with the Securities and Exchange Commission and state securities commissions; clerical, recordkeeping and bookkeeping services; preparation of reports for distribution to shareholders of the Fund; preparation of prospectuses, statements of additional information and proxy statements for the Fund or any Class thereof; preparation and filing of the Fund's required tax reports; preparation of materials for all meetings of the Trustees (as such materials pertain to a Fund or any Class thereof); preparation and review of contracts to which the Fund is a party; monitoring and reporting to Fund officers the Fund's compliance with investment policies and restrictions as set forth in the currently effective prospectus and statement of additional information of the Fund. 2. Other Services. JCC is hereby authorized to furnish advice and recommendations with respect to such other aspects of the business and affairs of the Fund as the Fund shall determine to be desirable. 3. Obligations of Trust. The Trust shall have the following obligations under this Agreement: a. to keep JCC continuously and fully informed as to the composition of the Fund's investment portfolio and the nature of all of its assets and liabilities from time to time; b. to furnish JCC with a certified copy of any financial statement or report prepared for the Fund by certified or independent public accountants and with copies of any financial statements or reports made to the Fund's shareholders or to any governmental body or securities exchange; c. to furnish JCC with certified copies of the minutes of any and all meetings of the Trustees of the Trust, together with any exhibits presented to the Trustees at such meetings; d. to furnish JCC with any further materials or information which JCC may reasonably request to enable it to perform its functions under this Agreement; and e. to compensate JCC for its services and reimburse JCC for its expenses incurred hereunder in accordance with the provisions hereof. 4. Compensation. The Fund shall pay JCC for its administrative services a fee calculated in the manner set forth on Appendix A hereto. For the month during which this Agreement becomes effective and the month during which it terminates, however, there shall be an appropriate proration of the fee payable for such month based on the number of calendar days of such month during which this Agreement is effective. 5. Expenses Borne by JCC. Except for those expenses borne by the Trust pursuant to Section 6 below, JCC shall bear all expenses incurred in connection with the operation of the Fund. -2- 6. Expenses Borne by the Trust. The Trust shall bear the following expenses: any compensation, fees, or reimbursements which the Trust pays to its Trustees who are not interested persons of JCC ("Independent Trustees"); fees and expenses of counsel to the Independent Trustees; fees and expenses of consultants to the Fund; audit expenses; brokerage commissions and all other expenses in connection with execution of portfolio transactions; interest; all federal, state and local taxes (including stamp, excise, income and franchise taxes); expenses of shareholder meetings, including the preparation, printing and distribution of proxy statements, notices and reports to shareholders; any litigation and other extraordinary expenses. 7. Termination. This Agreement may be terminated at any time, without penalty, by the Trustees of the Trust, or by the shareholders of the Trust acting by vote of at least a majority of its outstanding voting securities (as defined in the 1940 Act), provided in either case that sixty (60) days advance written notice of termination be given to JCC at its principal place of business. This Agreement may be terminated by JCC at any time, without penalty, by giving sixty (60) days advance written notice of termination to the Trust, addressed to its principal place of business. 8. Term. This Agreement shall continue in effect until June 16, 1996, and for successive annual periods thereafter unless sooner terminated in accordance with Section 7 hereof. 9. Amendments. This Agreement may be amended by the parties only if such amendment is in writing and signed by the parties to this Agreement. 10. Allocation of Expenses. a. The Trustees shall determine the basis for making an appropriate allocation of the Trust's expenses (other than those directly attributable to the Fund) between each Fund and the other series of the Trust. b. The Trustees shall determine the basis for making an appropriate allocation of the Fund's expenses (other than those directly attributable to a Class) between each Class of the Fund. c. JCC will furnish to the Trustees such information as to the nature and amounts of the expenses incurred by JCC in performing its obligations under this Agreement as the Trustees may reasonably require in order to enable the Trustees to allocate expenses as provided in paragraphs (a) and (b) of this Section 10. 11. Limitation of Personal Liability. All the parties hereto acknowledge and agree that all liabilities of the Trust arising, directly or indirectly, under this Agreement, of any and every nature whatsoever, shall be satisfied solely out of the assets of the Fund and that no Trustee, officer or holder of shares of beneficial interest of the Trust shall be personally liable -3- for any of the foregoing liabilities. The Trust's Declaration of Trust, as amended from time to time, is on file in the Office of the Secretary of State of the Commonwealth of Massachusetts. Such Declaration of Trust describes in detail the respective responsibilities and limitations on liability of the Trustees, officers and holders of shares of beneficial interest of the Trust. 12. Limitation of Liability of JCC. JCC shall not be liable for any error of judgment or mistake of law, for any loss arising out of this Agreement, or for any act or omission taken with respect to the Trust, except for willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of reckless disregard of its obligations and duties hereunder and except to the extent otherwise provided by law. As used in this Section 12, "JCC" shall include any affiliate of JCC performing services for the Trust contemplated hereunder and directors, officers and employees of JCC and such affiliates. 13. Activities of JCC. The services of JCC to the Trust hereunder are not to be deemed to be exclusive, and JCC and its affiliates are free to render services to other parties. It is understood that Trustees, officers and shareholders of the Trust are or may become interested in JCC as directors, officers and shareholders of JCC, that directors, officers, employees and shareholders of JCC are or may become similarly interested in the Trust, and that JCC may become interested in the Trust as a shareholder or otherwise. IN WITNESS WHEREOF, the parties have caused their duly authorized officers to execute this Administration Agreement as of the date and year first above written. JANUS CAPITAL CORPORATION By: /s/ Jack R. Thompson Name: Jack R. Thompson Title: Executive Vice President JANUS INVESTMENT FUND By: /s/ Thomas H. Bailey Name: Thomas H. Bailey Title: President -4- Revised as of September 10, 1996 APPENDIX A In accordance with Section 4 of this Agreement, the Fund shall compensate JCC for services provided to each Class of the Fund in accordance with the following schedule: I. JANUS GOVERNMENT MONEY MARKET FUND - INSTITUTIONAL SHARES will pay to JCC for its administrative services a monthly fee, payable on the last day of each month during which or part of which this Agreement is in effect, of 1/365 of 0.15% of the closing aggregate net asset value of the shares of such Class for each day of such month. II. JANUS GOVERNMENT MONEY MARKET FUND - INVESTOR SHARES will pay to JCC for its administrative services a monthly fee, payable on the last day of each month during which or part of which this Agreement is in effect, of 1/365 of 0.50% of the closing aggregate net asset value of the shares of each such Class for each day of such month. III. JANUS GOVERNMENT MONEY MARKET FUND - SERVICE SHARES will pay to JCC for its administrative services a monthly fee, payable on the last day of each month during which or part of which this Agreement is in effect, of 1/365 of 0.15% of the closing aggregate net asset value of the shares of such Class for each day of such month. JANUS INVESTMENT FUND ADMINISTRATION AGREEMENT JANUS TAX-EXEMPT MONEY MARKET FUND THIS ADMINISTRATION AGREEMENT (the "Agreement") is made this 9th day of December, 1994, between JANUS INVESTMENT FUND, a Massachusetts business trust (the "Trust"), on behalf of Janus Tax-Exempt Money Market Fund (the "Fund"), a separate series of the Trust and JANUS CAPITAL CORPORATION, a Colorado corporation ("JCC"). W I T N E S S E T H: WHEREAS, the Trust is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"), and has registered its shares for public offering under the Securities Act of 1933, as amended (the "1933 Act"); and WHEREAS, the Trust is authorized to create separate funds, each with its own separate investment portfolio of which the beneficial interests are represented by a separate series of shares of the Trust; and WHEREAS, the Fund may offer shares in multiple classes representing interest in the same portfolio of investments but having potentially different distribution charges, exchange rights and investment minimum requirements (the "Classes"); and WHEREAS, the Trust and JCC have entered into a separate agreement for the provision of investment advisory services; and WHEREAS, the Trust and JCC deem it mutually advantageous that JCC should assist the Trustees and officers of the Trust in the administration of the Fund. NOW, THEREFORE, the parties agree as follows: 1. Administrative Services. JCC shall furnish or arrange for the following services to the Fund incidental to its operations and business: provision of custody, transfer agency, and fund accounting services; provision of shareholder servicing; provision of office facilities and personnel necessary to carry on the business of the Fund; preparation and filing of all documents necessary to obtain and maintain registration and qualification of the shares of each Class with the Securities and Exchange Commission and state securities commissions; clerical, recordkeeping and bookkeeping services; preparation of reports for distribution to shareholders of the Fund; preparation of prospectuses, statements of additional information and proxy statements for the Fund or any Class thereof; preparation and filing of the Fund's required tax reports; preparation of materials for all meetings of the Trustees (as such materials pertain to a Fund or any Class thereof); preparation and review of contracts to which the Fund is a party; monitoring and reporting to Fund officers the Fund's compliance with investment policies and restrictions as set forth in the currently effective prospectus and statement of additional information of the Fund. 2. Other Services. JCC is hereby authorized to furnish advice and recommendations with respect to such other aspects of the business and affairs of the Fund as the Fund shall determine to be desirable. 3. Obligations of Trust. The Trust shall have the following obligations under this Agreement: a. to keep JCC continuously and fully informed as to the composition of the Fund's investment portfolio and the nature of all of its assets and liabilities from time to time; b. to furnish JCC with a certified copy of any financial statement or report prepared for the Fund by certified or independent public accountants and with copies of any financial statements or reports made to the Fund's shareholders or to any governmental body or securities exchange; c. to furnish JCC with certified copies of the minutes of any and all meetings of the Trustees of the Trust, together with any exhibits presented to the Trustees at such meetings; d. to furnish JCC with any further materials or information which JCC may reasonably request to enable it to perform its functions under this Agreement; and e. to compensate JCC for its services and reimburse JCC for its expenses incurred hereunder in accordance with the provisions hereof. 4. Compensation. The Fund shall pay JCC for its administrative services a fee calculated in the manner set forth on Appendix A hereto. For the month during which this Agreement becomes effective and the month during which it terminates, however, there shall be an appropriate proration of the fee payable for such month based on the number of calendar days of such month during which this Agreement is effective. 5. Expenses Borne by JCC. Except for those expenses borne by the Trust pursuant to Section 6 below, JCC shall bear all expenses incurred in connection with the operation of the Fund. -2- 6. Expenses Borne by the Trust. The Trust shall bear the following expenses: any compensation, fees, or reimbursements which the Trust pays to its Trustees who are not interested persons of JCC ("Independent Trustees"); fees and expenses of counsel to the Independent Trustees; fees and expenses of consultants to the Fund; audit expenses; brokerage commissions and all other expenses in connection with execution of portfolio transactions; interest; all federal, state and local taxes (including stamp, excise, income and franchise taxes); expenses of shareholder meetings, including the preparation, printing and distribution of proxy statements, notices and reports to shareholders; any litigation and other extraordinary expenses. 7. Termination. This Agreement may be terminated at any time, without penalty, by the Trustees of the Trust, or by the shareholders of the Trust acting by vote of at least a majority of its outstanding voting securities (as defined in the 1940 Act), provided in either case that sixty (60) days advance written notice of termination be given to JCC at its principal place of business. This Agreement may be terminated by JCC at any time, without penalty, by giving sixty (60) days advance written notice of termination to the Trust, addressed to its principal place of business. 8. Term. This Agreement shall continue in effect until June 16, 1996, and for successive annual periods thereafter unless sooner terminated in accordance with Section 7 hereof. 9. Amendments. This Agreement may be amended by the parties only if such amendment is in writing and signed by the parties to this Agreement. 10. Allocation of Expenses. a. The Trustees shall determine the basis for making an appropriate allocation of the Trust's expenses (other than those directly attributable to the Fund) between each Fund and the other series of the Trust. b. The Trustees shall determine the basis for making an appropriate allocation of the Fund's expenses (other than those directly attributable to a Class) between each Class of the Fund. c. JCC will furnish to the Trustees such information as to the nature and amounts of the expenses incurred by JCC in performing its obligations under this Agreement as the Trustees may reasonably require in order to enable the Trustees to allocate expenses as provided in paragraphs (a) and (b) of this Section 10. 11. Limitation of Personal Liability. All the parties hereto acknowledge and agree that all liabilities of the Trust arising, directly or indirectly, under this Agreement, of any and every nature whatsoever, shall be satisfied solely out of the assets of the Fund and that no Trustee, officer or holder of shares of beneficial interest of the Trust shall be personally liable -3- for any of the foregoing liabilities. The Trust's Declaration of Trust, as amended from time to time, is on file in the Office of the Secretary of State of the Commonwealth of Massachusetts. Such Declaration of Trust describes in detail the respective responsibilities and limitations on liability of the Trustees, officers and holders of shares of beneficial interest of the Trust. 12. Limitation of Liability of JCC. JCC shall not be liable for any error of judgment or mistake of law, for any loss arising out of this Agreement, or for any act or omission taken with respect to the Trust, except for willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of reckless disregard of its obligations and duties hereunder and except to the extent otherwise provided by law. As used in this Section 12, "JCC" shall include any affiliate of JCC performing services for the Trust contemplated hereunder and directors, officers and employees of JCC and such affiliates. 13. Activities of JCC. The services of JCC to the Trust hereunder are not to be deemed to be exclusive, and JCC and its affiliates are free to render services to other parties. It is understood that Trustees, officers and shareholders of the Trust are or may become interested in JCC as directors, officers and shareholders of JCC, that directors, officers, employees and shareholders of JCC are or may become similarly interested in the Trust, and that JCC may become interested in the Trust as a shareholder or otherwise. IN WITNESS WHEREOF, the parties have caused their duly authorized officers to execute this Administration Agreement as of the date and year first above written. JANUS CAPITAL CORPORATION By: /s/ Jack R. Thompson Name: Jack R. Thompson Title: Executive Vice President JANUS INVESTMENT FUND By: /s/ Thomas H. Bailey Name: Thomas H. Bailey Title: President -4- Revised as of September 10, 1996 APPENDIX A In accordance with Section 4 of this Agreement, the Fund shall compensate JCC for services provided to each Class of the Fund in accordance with the following schedule: I. JANUS TAX-EXEMPT MONEY MARKET FUND - INSTITUTIONAL SHARES will pay to JCC for its administrative services a monthly fee, payable on the last day of each month during which or part of which this Agreement is in effect, of 1/365 of 0.15% of the closing aggregate net asset value of the shares of such Class for each day of such month. II. JANUS TAX-EXEMPT MONEY MARKET FUND - INVESTOR SHARES will pay to JCC for its administrative services a monthly fee, payable on the last day of each month during which or part of which this Agreement is in effect, of 1/365 of 0.50% of the closing aggregate net asset value of the shares of each such Class for each day of such month. III. JANUS TAX-EXEMPT MONEY MARKET FUND - SERVICE SHARES will pay to JCC for its administrative services a monthly fee, payable on the last day of each month during which or part of which this Agreement is in effect, of 1/365 of 0.15% of the closing aggregate net asset value of the shares of such Class for each day of such month. EX-9 3 EX-9(I) LTR AGMT TO TRANSFER AGENCY AGMT EXHIBIT 9(i) September 10, 1996 Ms. Marjorie G. Hurd Janus Service Corporation 100 Fillmore Street Denver, CO 80206 Dear Ms. Hurd: Attached are revised Appendix A and Appendix B to the Transfer Agency Agreement dated as of September 27, 1995 (the "Agreement") between Janus Investment Fund (the "Trust") and Janus Service Corporation ("JSC"). The revised Appendices will be effective as of September 10, 1996. The purpose of the revisions is to add Janus Special Situations Fund as an additional portfolio of the Trust. Pursuant to Section 9 of the Agreement, the Fund hereby requests that JSC acknowledge its acceptance of the terms contained in each of the revised Appendices. Please indicate your acceptance of the foregoing by executing two copies of this letter, returning one copy to the Trust and retaining one copy for your records. JANUS INVESTMENT FUND /s/ Steven R. Goodbarn Steven R. Goodbarn, Vice President JANUS SERVICE CORPORATION By: /s/ Marjorie G. Hurd Marjorie G. Hurd President Agreed to this 10th day of September, 1996 CC: Deborah Bielicke Kelley Howes Stephen Stieneker David Tucker Sue Vreeland Revised as of September 12, 1996 APPENDIX A Janus Money Market Fund Janus Government Money Market Fund Janus Tax-Exempt Money Market Fund Janus High-Yield Fund Janus Olympus Fund Janus Venture Fund Janus Fund Janus Twenty Fund Janus Enterprise Fund Janus Mercury Fund Janus Overseas Fund Janus Worldwide Fund Janus Growth and Income Fund Janus Balanced Fund Janus Flexible Income Fund Janus Intermediate Government Securities Fund Janus Short-Term Bond Fund Janus Federal Tax-Exempt Fund Janus Equity Income Fund Janus Special Situations Fund Revised as of September 10, 1996 APPENDIX B I. NON-MONEY MARKET PORTFOLIOS Each non-money market portfolio of the Trust shall pay JSC for its transfer agency services a fee, calculated and payable for each day that this Agreement is in effect, of 1/365 of 0.16% of the daily closing net asset value of such portfolio, plus reasonable out-of-pocket expenses incurred in connection with JSC's services as transfer agent. In addition, each of the non-money market portfolios listed below shall pay a monthly fee at the annual rate of $4.00 per open shareholder account per year: Janus Balanced Fund Janus Enterprise Fund Janus Equity Income Fund Janus Federal Tax-Exempt Fund Janus Flexible Income Fund Janus Growth and Income Fund Janus High-Yield Fund Janus Intermediate Government Securities Fund Janus Mercury Fund Janus Olympus Fund Janus Overseas Fund Janus Short-Term Bond Fund Janus Special Situations Fund Janus Twenty Fund Janus Worldwide Fund All such fees shall be subject to reduction as set forth in section 5.c. of this Agreement. If an account is open on any day of a month, the per account fee (if applicable) shall be payable for that month. II. MONEY MARKET PORTFOLIOS Notwithstanding the above, however, JSC agrees that it shall not look to the Funds or the Trust for compensation for its services provided under this Agreement to Janus Money Market Fund, Janus Government Money Market Fund or Janus Tax-Exempt Money Market Fund (collectively, the "Money Funds"). JSC shall be compensated for its services to the Money Funds entirely by Janus Capital Corporation, the administrator to the Money Funds, pursuant to an Administration Agreement between Janus Capital Corporation and each of the Money Funds. EX-10 4 EX-10(O) OPINION AND CONSENT OF FUND COUNSEL EXHIBIT 10(o) September 20, 1996 Janus Investment Fund 100 Fillmore Street, Suite 400 Denver, Colorado 80206-9916 Re: Public Offering of Janus Government Money Market Fund Service Shares, Janus Money Market Fund Service Shares and Janus Tax-Exempt Money Market Fund Service Shares Gentlemen: I have acted as counsel for Janus Investment Fund, a Massachusetts business trust (the "Trust"), in connection with the filing with the Securities and Exchange Commission of a post-effective amendment to the Trust's registration statement with respect to the proposed sale of shares of beneficial interest, $0.01 par value, of Janus Government Money Market Fund Service Shares, Janus Money Market Fund Service Shares and Janus Tax-Exempt Money Market Fund Service Shares (the "Shares"). I have examined the Trust's Agreement and Declaration of Trust and Bylaws, as amended, the proceedings of its trustees relating to the authorization, issuance and proposed sale of the Shares, and such other records and documents as I have deemed relevant. Based upon such examination, it is my opinion that upon the issuance and sale of the Shares in the manner contemplated by the aforesaid post-effective amendment to the Trust's registration statement, such Shares will be legally issued, fully paid and nonassessable. I hereby consent to the filing of this opinion as an exhibit to the above-referenced registration statement. This opinion is for the exclusive use of the Trust in connection with the filing of such post-effective amendment to the Trust's registration statement with the Securities and Exchange Commission (and certain securities regulators of other jurisdictions) and is not to be used, circulated, quoted, relied upon or otherwise referred to by any other person or for any other purpose. This opinion is given as of the date hereof and I render no opinion and disclaim any obligation to revise or supplement this opinion based upon any change in applicable law or any factual matter that occurs or comes to my attention after the date hereof. Very truly yours, /s/ David C. Tucker David C. Tucker EX-11 5 CONSENT OF INDEPENDENT ACCOUNTANTS EXHIBIT 11 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the reference to us under the heading "Independent Accountants" in the Statement of Additional Information constituting part of this Post-Effective Amendment No. 76 to the Registration Statement on Form N-1A of Janus Investment Fund. /s/ Price Waterhouse LLP PRICE WATERHOUSE LLP Denver, Colorado September 20, 1996 EX-18 6 EX-18(C) AMND & RESTATED FORM OF RULE 18F-3 PLAN EXHIBIT 18(c) April 14, 1995 As Amended September 27, 1995 And September 10, 1996 RULE 18f-3 PLAN This Rule 18f-3 Plan ("Plan") is adopted by Janus Investment Fund ("JIF") with respect to Investor Shares, Institutional Shares, and Administrative Service Shares (each a "Class") of each of the Janus Money Market Fund, the Janus Government Money Market Fund and the Janus Tax- Exempt Money Market Fund (each a "Fund") portfolios of JIF in accordance with the provisions of Rule 18f-3 under the Investment Company Act of 1940 (the "Act"). 1. Pursuant to and as described in Administration Agreements, dated December 9, 1994, as amended, between Janus Capital Corporation ("JCC") and JIF with respect to each Fund (each an "Agreement"), JCC provides each Fund with certain services incidental to the Fund's operations and business and, for providing those services, is paid a fee by the Fund (an "Administration Fee"). A portion of each Administration Fee relates to services performed by JCC (or a service provider retained by JCC) that vary on a Class basis as identified in Section 2 of this Plan; those services are referred to as Rule 18f-3 Plan Services. A portion of each Administration Fee also relates to Class Expenses (as defined below) that are assumed by JCC pursuant to Section 5 of each Agreement. The fees paid for performing Rule 18f-3 Plan Services and assuming Class Expenses are referred to as Rule 18f-3 Plan Fees. Rule 18f-3 Plan Fees and Class Expenses, as defined below, relating to each Class are borne solely by the Class to which they relate and within each Class are borne by each share pro rata on the basis of its net asset value. 2. Rule 18f-3 Plan Services include the following: provision of transfer agency and shareholder servicing functions for each Class; responding to Shareholder inquiries; the receipt, aggregation and processing of purchase and redemption orders; transmission of funds; preparation and filing of documents necessary to obtain and maintain registration and qualification of shares of each Class with the Securities and Exchange Commission and state or territorial securities commissions; clerical, recordkeeping and bookkeeping services related to a specific Class; preparation and distribution of prospectuses, statements of additional information, reports to shareholders and proxy statements relating to a specific Class; preparation of materials for all meetings of the Trustees of JIF insofar as they relate to matters concerning a specific Class; and all other services performed by JCC or a service provider retained by JCC insofar as they relate to a specific Class. 3. Pursuant to Section 5 of each Agreement, JCC assumes those Class Expenses (as defined below) of each Fund that are not borne by JIF as provided in Section 6 of the Agreement. JCC is not separately reimbursed for assuming those Class Expenses. 4. Expenses incurred by JIF or assumed by JCC pursuant to each Agreement that are chargeable to a specific Class ("Class Expenses") include expenses (not including advisory or custodial fees or other expenses related to the management of a Fund's assets) that are incurred in a different amount by that Class or are in consideration of services provided to that Class of a different kind or to a different degree than are provided to another Class. Class Expenses include, in addition to expenses for Rule 18f-3 Plan Services: (i) expenses related to preparing and distributing materials such as shareholder reports, prospectuses and proxy statements to current shareholders of a specific Class; (ii) Blue Sky registration fees incurred with respect to a specific Class; (iii) litigation or other legal expenses relating to a specific Class; (iv) fees or expenses of the Trustees of JIF who are not interested persons of JCC ("Independent Trustees"), and of counsel and - 2 - consultants to the Independent Trustees, incurred as a result of issues relating to a specific Class; (v) auditing and consulting expenses relating to a specific Class; and (vi) additional expenses incurred with respect to a specific Class as identified and approved by the Trustees of JIF and the Independent Trustees. 5. The Rule 18f-3 Plan Fees are up to .50% of the average daily net assets of the Investor Shares, up to .15% of the average daily net assets of the Institutional Shares, and up to .40% of the average daily net assets of the Administrative Service Shares of each Fund. JCC, in its sole discretion, may waive any portion of the Rule 18f-3 Plan Fees with respect to a Class of Shares of a Fund. 6. The differences in the Rule 18f-3 Plan Fees and Class Expenses payable by each Class pursuant to this Plan are due to the differing levels of services offered to shareholders and investors eligible to purchase shares of each Class and to the differing levels of expenses expected to be incurred with respect to each Class. Investor Shares are available to individual and other retail investors, have a lower investment minimum than is applicable to the Institutional Shares and have a checkwriting feature. Institutional Shares are available only to eligible institutional and individual investors willing to meet the higher investment minimum of that Class. Administrative Service Shares are available only through banks and other financial institutions in connection with trust accounts, cash management programs, and similar programs. The financial institution aggregates its customers' investments to meet the investment minimum of the Administrative Service Shares (which is also higher than the Investor Shares' minimum). Investors in Administrative Service Shares require more services than investors in Institutional Shares but fewer services than investors in Investor Shares, and thus the Rule 18f-3 Plan Fees attributable to the Administrative Service - 3 - Shares are between those attributable to the Investor Shares and the Institutional Shares. The Rule 18f-3 Plan Fees attributable to the Investor Shares are higher than those attributable to the Institutional Shares because of the increased costs (expressed as a percentage of assets) associated with retail customer accounts as opposed to larger individual and institutional accounts. These differences are due primarily to (i) smaller account balances and transaction sizes associated with retail accounts, (ii) costs associated with the checkwriting feature, (iii) costs associated with paper processing of retail accounts versus wire or ACH processing of institutional accounts, and (iv) the more extensive shareholder servicing needs of retail investors. 7. JCC may use a portion of its Administration Fee to pay banks and other financial institutions that provide Rule 18f-3 Plan Services to their customers in connection with investment in the Administrative Service Shares through trust departments, cash management programs, and similar programs. 8. The exchange privilege offered by each Fund provides that shares of a Class may be exchanged for (i) shares of certain other portfolios of JIF and (ii) shares of the same Class of another Fund. Shareholders of another portfolio of JIF who wish to exchange their shares for shares of a Fund will be required to meet the standards applicable to the Class they wish to exchange into (e.g., the investment minimum). Notwithstanding the foregoing, exchanges will be permitted among Classes should a shareholder cease to be eligible to purchase shares of the original Class or become eligible to purchase shares of a different Class by reason of a change in the shareholder's status. 9. This Plan is adopted as of April 14, 1995, and amended as of September 27, 1995 and September 10, 1996, pursuant to determinations made by the Trustees of JIF, including a majority of the Independent Trustees, that the multiple class structure and the allocation of expenses as set - 4 - forth in the Plan are in the best interests of each of the Investor, Institutional, and Administrative Service Shares individually and each Fund and JIF as a whole. This Plan will continue in effect until terminated in accordance with Section 12. 10. In any year in which JCC waives a portion of the Rule 18f-3 Plan Fee payable to JCC with respect to a Class of Shares of a Fund, the Trustees will review the waiver by JCC in order to confirm that the waiver is not a de facto modification of the fees provided for in the Fund's advisory or any other contracts for which the fees may not vary by Class pursuant to Rule 18f-3. 11. Material amendments to the Plan may be made with respect to a Class at any time with the approval of the Trustees of JIF, including a majority of the Independent Trustees, upon finding that the Plan as proposed to be amended, including the allocation of expenses, is in the best interests of each Class individually and each Fund and JIF as a whole. Non-material amendments to the Plan may be made by JCC at any time. 12. This Plan may be terminated by the Trustees without penalty at any time. - 5 - -----END PRIVACY-ENHANCED MESSAGE-----