485BPOS
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Ticker |
Janus
Henderson Small/Mid Cap Growth Alpha ETF |
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JSMD |
Principal
U.S. Listing Exchange: The NASDAQ Stock Market LLC |
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Janus
Detroit Street Trust
Prospectus
The
Securities and Exchange Commission has not approved or disapproved of these
securities or passed on the accuracy or adequacy of this Prospectus. Any
representation to the contrary is a criminal offense.
This
Prospectus describes Janus Henderson Small/Mid Cap Growth Alpha ETF (the
“Fund”), a portfolio of Janus Detroit Street Trust (the “Trust”). Janus
Henderson Investors US LLC (formerly
Janus Capital Management LLC) (the “Adviser”) serves as investment adviser to
the Fund.
Shares
of the Fund are not individually redeemable and the owners of Fund shares may
purchase or redeem shares from the Fund in Creation Units only, in accordance
with the terms set forth in this Prospectus. The purchase and sale price of
individual Fund shares trading on an exchange may be below, at or above the most
recently calculated net asset value for Fund shares.
TABLE
OF CONTENTS
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1½Janus Detroit Street Trust
FUND
SUMMARY
Janus
Henderson Small/Mid Cap Growth Alpha ETF
Ticker: JSMD
Janus Henderson Small/Mid Cap Growth Alpha ETF
seeks investment results that correspond generally, before fees and expenses, to
the performance of its underlying index, the Janus Henderson Small/Mid Cap
Growth Alpha Index (the “Underlying Index”).
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FEES AND EXPENSES OF THE FUND |
This
table describes the fees and expenses that you may pay if you buy, hold and sell
shares of the Fund. Investors may pay brokerage commissions and other fees to
financial intermediaries on their purchases and sales of Fund shares, which are
not reflected in the table or in the example below.
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ANNUAL
FUND OPERATING EXPENSES
(expenses that you pay
each year as a percentage of the value of your investment) |
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Management
Fees |
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0.30% |
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Other
Expenses |
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0.00% |
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Total
Annual Fund Operating Expenses |
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0.30% |
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EXAMPLE:
The Example is intended
to help you compare the cost of investing in the Fund with the cost of investing
in other funds. The Example assumes that you invest
$10,000 in the Fund for the time periods indicated and then sell all of your
shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund’s operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
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1 Year |
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3 Years |
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5 Years |
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10 Years |
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$ |
31 |
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$ |
97 |
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$ |
169 |
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$ |
381 |
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Portfolio
Turnover: The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the Example, affect the Fund’s performance. During the most recent fiscal
year, the Fund’s portfolio turnover rate was 102% of the average value of its
portfolio.
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PRINCIPAL INVESTMENT STRATEGIES |
The
Fund pursues its investment objective by normally investing at least 80% of its
net assets (plus any borrowings for investment purposes) in the securities that
comprise the Janus Henderson Small/Mid Cap Growth Alpha Index (“Underlying
Index”).
The
Underlying Index is composed of common stocks of small- and medium‑sized
companies that are included in the Solactive Small/Mid Cap Index, a universe of
2,500 small- and medium‑sized capitalization stocks. The Solactive Small/Mid Cap
Index uses the total public market value, or “free-float,” capitalization of a
stock to determine whether to include such stock in the Solactive Small/Mid Cap
Index. The Underlying Index is designed to select small- and medium‑sized
capitalization stocks that are poised for “smart growth” by evaluating each
company’s performance in three critical areas: growth, profitability, and
capital efficiency. Using a proprietary quantitative methodology, such stocks
are scored based on fundamental measures of their growth, profitability, and
capital efficiency, and the top 10% of such eligible stocks scoring the highest
become the constituents of the Underlying Index. To arrive at the top 10%, for
each security in the stated universe, the quantitative methodology assigns a
score in each of 10 different fundamental factors, relative to other eligible
securities. The fundamental factors include measures that the Adviser believes
are tied to a stock’s outperformance relative to other small/mid cap stocks, and
indicate a company’s
2½Janus Henderson Small/Mid Cap Growth
Alpha ETF
performance
with respect to growth (such as the revenue growth rate over 2‑ 5‑ and 8‑ year
periods), profitability (such as margin expansion, profit margin and earnings
per share over time) and capital efficiency (such as returns on invested
capital). The scores for each stock within a factor are then added together
across the 10 factors, with equal weighting, to arrive at an overall score for
each stock. The stocks with the highest 10% of scores are then weighted within
the Underlying Index according to their market capitalization. Finally, the
stocks are sector-weighted to reflect the sector allocation weight of Janus
Henderson Triton Fund, based on its most recent publicly available holdings. A
stock may not represent more than 3% of the Underlying Index. The Underlying
Index seeks risk adjusted outperformance relative to a market capitalization
weighted universe of small- and medium‑sized capitalization growth stocks.
Market capitalizations within the Underlying Index will vary, but as of
January 31, 2022, they ranged from approximately $40 million to $28.55
billion. The Underlying Index is rebalanced on a quarterly basis based on the
methodology described above.
The
Fund uses a “passive,” index-based approach in seeking performance that
corresponds to the performance of the Underlying Index. The Fund generally will
use a replication methodology, meaning it will invest in the securities
composing the Underlying Index, in proportion to the weightings in the
Underlying Index. However, the Fund may utilize a sampling methodology under
various circumstances in which it may not be possible or practicable to purchase
all of the securities in the Underlying Index. The Adviser expects that over
time, if the Fund has sufficient assets, the correlation between the Fund’s
performance, before fees and expenses, and that of the Underlying Index will be
95% or better. A figure of 100% would indicate perfect
correlation.
The
Fund may also invest in investments that are not included in the Underlying
Index, but which the Adviser believes will help the Fund track the Underlying
Index. Such investments include stocks, shares of other investment companies,
cash and cash equivalents, including affiliated or non‑affiliated money
market funds (or unregistered cash management pooled investment vehicles that
operate as money market funds).
To
the extent the Underlying Index concentrates (i.e., holds 25% or more of its
total assets) in the securities of a particular industry or group of industries,
the Fund will concentrate its investments to approximately the same extent as
its Underlying Index. As of January 31, 2022, the Underlying Index did not
concentrate in a particular industry or group of industries. For more recent
information, see the Fund’s daily portfolio holdings posted on the ETF portion
of the Janus Henderson
website.
The
Fund may lend portfolio securities on a short-term or long-term basis, in an
amount equal to up to one‑third of its total assets as determined at the time of
the loan origination.
The
Underlying Index is compiled and administered by Janus Henderson Indices LLC
(“JH Indices” or the “Index Provider”). JH Indices is affiliated with the
Fund and the Adviser.
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PRINCIPAL INVESTMENT RISKS |
The
Fund’s returns and yields will vary, and you could lose money. The principal
risks and special considerations associated with investing in the Fund are set
forth below. The biggest risk is that
the Fund’s returns will vary, and you could lose money. The Fund
is designed for long-term investors interested in an index-based portfolio of
equity investments, including common stocks. Common stocks tend to be more
volatile than many other investment choices.
Market
Risk. The value of the Fund’s portfolio may decrease if
the value of an individual security, or multiple securities, in the portfolio
decreases. Further, regardless of how well individual securities perform, the
value of the Fund’s portfolio could also decrease if there are deteriorating
economic or market conditions. It is important to understand that the value of
your investment may fall, sometimes sharply, in response to changes in the
market, and you could lose money. Market risk may affect a single issuer,
industry, economic sector, or the market as a whole. The Underlying Index
focuses on the small- and medium‑sized capitalization sector of the stock
market, and therefore at times the Fund may underperform the overall stock
market. Market risk may be magnified if certain social, political, economic and
other conditions and events (such as terrorism, conflicts, social unrest,
natural disasters, epidemics and pandemics, including COVID‑19) adversely
interrupt the global economy and financial
markets.
Equity Investing
Risk. The Fund’s investment in the securities composing
the Underlying Index involves risks of investing in a portfolio of equity
securities, such as market fluctuations, changes in interest rates and perceived
trends in stock prices.
Small- and Mid‑Sized
Companies Risk. The Fund’s investments in securities
issued by small- and mid‑sized companies, which can include smaller, start‑up
companies offering emerging products or services, may involve greater risks than
are customarily
3½Janus Henderson Small/Mid Cap Growth
Alpha ETF
associated
with larger, more established companies. Securities issued by small- and
mid‑sized companies tend to be more volatile and somewhat more speculative than
securities issued by larger or more established companies and may underperform
as compared to the securities of larger companies. Securities issued by
micro-capitalization companies tend to be significantly more volatile, and more
vulnerable to adverse business and economic developments, than those of larger
companies. For example, small- and micro-capitalization companies may be more
likely to merge with or be acquired by another company, resulting in de‑listing
of the securities held by the Fund.
Growth Securities
Risk. Securities of companies perceived to be “growth”
companies may be more volatile than other stocks and may involve special risks.
If the perception of a company’s growth potential, based on the quantitative
methodology applied in constructing the Underlying Index, is not realized, the
securities purchased may not perform as expected, reducing the Fund’s returns.
In addition, because different types of stocks tend to shift in and out of favor
depending on market and economic conditions, “growth” stocks may perform
differently from the market as a whole and other types of
securities.
Investment Style
Risk. Returns from small‑sized capitalization stocks
may trail returns from the overall stock market. Small‑cap stocks may go through
cycles of doing better or worse than other segments of the stock market or the
stock market in general. These cycles may continue for extended periods of
time.
Concentration
Risk. The Fund’s assets will generally be concentrated
in an industry or group of industries to the extent that the Fund’s Underlying
Index concentrates in a particular industry or group of industries. To the
extent the Fund invests a substantial portion of its assets in an industry or
group of industries, market or economic factors impacting that industry or group
of industries could have a significant effect on the value of the Fund’s
investments. Companies in the same or similar industries may share common
characteristics and are more likely to react similarly to industry-specific
market or economic developments. The Fund’s performance may be more volatile
when the Fund’s investments are less diversified across industries. The Fund’s
assets will not be concentrated if the Underlying Index does not concentrate in
a particular industry or group of
industries.
Early Close/Trading
Halt Risk. An exchange or market may close or issue
trading halts on specific securities, or the ability to buy or sell certain
securities or financial instruments may be restricted, which may result in the
Fund being unable to buy or sell certain securities or financial instruments. In
such circumstances, the Fund may be unable to rebalance its portfolio, may be
unable to accurately price its investments and/or may incur substantial trading
losses.
Index Tracking
Risk. The Fund’s return may not match or achieve a high
degree of correlation with the return of the Underlying Index. To the extent the
Fund utilizes a sampling approach, it may experience tracking error to a greater
extent than if the Fund sought to replicate the Underlying Index. In addition,
the Fund may hold fewer than the total number of securities in the Underlying
Index. Further, the Fund may hold securities or other investments not included
in the Underlying Index but which the Adviser believes will help the Fund track
the Underlying Index. Such investments may not perform as
expected.
Index Provider
Risk. The Fund seeks to achieve returns that generally
correspond, before fees and expenses, to the performance of the Underlying
Index, as published by the Index Provider. There is no assurance that the Index
Provider will compile the Underlying Index accurately, or that the Underlying
Index will be determined, composed or calculated accurately. While the Index
Provider gives descriptions of what the Underlying Index is designed to achieve,
the Index Provider generally does not provide any warranty or accept any
liability in relation to the quality, accuracy or completeness of data in such
index, and it generally does not guarantee that the Underlying Index will be in
line with its methodology. The Index Provider may unilaterally take certain
actions that materially change the operation or expected composition of the
Underlying Index (including altering the frequency of index rebalances).
Additionally, errors made by the Index Provider with respect to the quality,
accuracy and completeness of the data within the Underlying Index may occur from
time to time and may not be identified and corrected by the Index Provider for a
period of time, if at all. Therefore, gains, losses or costs associated with
Index Provider errors or operational discretion will generally be borne by the
Fund and its shareholders.
Methodology and Model
Risk. Neither the Fund nor the Adviser can offer
assurances that tracking the Underlying Index will maximize returns or minimize
risk, or be appropriate for every investor seeking a particular risk profile.
Underlying Index risks include, but are not limited to, the risk that the
factors used to determine the components of the Underlying Index, as applied by
the Index Provider in accordance with the Underlying Index methodology, might
not select securities that individually, or in the aggregate, outperform the
broader small- and medium‑sized capitalization universe. In addition, the
Underlying Index was designed based on historically relevant fundamental factors
and may not provide risk-adjusted outperformance in the
future.
4½Janus Henderson Small/Mid Cap Growth
Alpha ETF
Passive Investment
Risk. The Fund is not actively managed and therefore
the Fund might not sell shares of a security due to current or projected
underperformance of a security, industry or sector, unless that security is
removed from the Underlying Index or the selling of shares is otherwise required
upon a rebalancing of the Underlying Index.
Portfolio Turnover
Risk. Increased portfolio turnover may result in higher
costs for brokerage commissions, dealer mark-ups, and other transaction costs,
and may also result in taxable gains. Higher costs associated with increased
portfolio turnover also may have a negative effect on the Fund’s
performance.
Securities Lending
Risk. The Fund may seek to earn additional income
through lending its securities to certain qualified broker-dealers and
institutions. There is the risk that when portfolio securities are lent, the
securities may not be returned on a timely basis, and the Fund may experience
delays and costs in recovering the security or gaining access to the collateral
provided to the Fund to collateralize the loan. If the Fund is unable to recover
a security on loan, the Fund may use the collateral to purchase replacement
securities in the market. There is a risk that the value of the collateral could
decrease below the cost of the replacement security by the time the replacement
investment is made, resulting in a loss to the
Fund.
Exchange Listing and
Trading Issues Risk. Although Fund shares are listed
for trading on the NASDAQ the (“Exchange”), there can be no assurance that an
active trading market for such shares will develop or be maintained. The lack of
an active market for Fund shares, as well as periods of high volatility,
disruptions in the creation/redemption process, or factors affecting the
liquidity of the underlying securities held by the Fund, may result in the
Fund’s shares trading at a premium or discount to its
NAV.
Trading
in Fund shares may be halted due to market conditions or for reasons that, in
the view of the Exchange, make trading in Fund shares inadvisable. In addition,
trading is subject to trading halts caused by extraordinary market volatility
pursuant to the Exchange’s “circuit breaker” rules. There can be no assurance
that the requirements of the Exchange necessary to maintain the Fund’s listing
will continue to be met or will remain unchanged.
Fluctuation of NAV
and Market Price Risk. The NAV of the Fund’s shares
will generally fluctuate with changes in the market value of the Fund’s
securities holdings. The market prices of the Fund’s shares will generally
fluctuate in accordance with changes in the Fund’s NAV and supply and demand of
shares on the Exchange. Volatile market conditions, an absence of trading in
shares of the Fund, or a high volume of trading in the Fund, may result in
trading prices in the Fund’s shares that differ significantly from the Fund’s
NAV. Additionally, during a “flash crash,” the market prices of the Fund’s
shares may decline suddenly and significantly, resulting in Fund shares trading
at a substantial discount to NAV. Such a decline may not reflect the performance
of the portfolio securities held by the Fund. Flash crashes may cause Authorized
Participants and other market makers to limit or cease trading in the Fund’s
shares for temporary or longer periods, which may result in an increase in the
variance between market price of the Fund’s shares and the Fund’s NAV.
Shareholders could suffer significant losses to the extent that they sell shares
at these temporarily low market
prices.
It
cannot be predicted whether Fund shares will trade below, at or above the Fund’s
NAV. Further, the securities held by the Fund may be traded in markets that
close at a different time than the Exchange. Liquidity in those securities may
be reduced after the applicable closing times. Accordingly, during the time when
the Exchange is open but after the applicable market closing or fixing
settlement times, bid‑ask spreads and the resulting premium or discount to the
Fund shares’ NAV is likely to widen. Similarly, the Exchange may be closed at
times or days when markets for securities held by the Fund are open, which may
increase bid‑ask spreads and the resulting premium or discount to the Fund
shares’ NAV when the Exchange re‑opens. The Fund’s bid‑ask spread and the
resulting premium or discount to the Fund’s NAV may also be impacted by the
liquidity of the underlying securities held by the Fund, particularly in
instances of significant volatility of the underlying
securities.
Authorized
Participant Risk. The Fund may have a limited number of
financial institutions that may act as Authorized Participants (“APs”). Only APs
who have entered into agreements with the Fund’s distributor may engage in
creation or redemption transactions directly with the Fund. These APs have no
obligation to submit creation or redemption orders and, as a result, there is no
assurance that an active trading market for the Fund’s shares will be
established or maintained. This risk may be heightened to the extent that the
securities underlying the Fund are traded outside of a collateralized settlement
system. In that case, APs may be required to post collateral on certain trades
on an agency basis (i.e., on behalf of other market participants), which only a
limited number of APs may be willing or able to do. Additionally, to the extent
that those APs exit the business or are unable to process creation and/or
redemption orders, and no other AP is able to step forward to create and redeem
in either of these cases, shares may trade like closed‑end fund shares at a
premium or a discount to NAV and possibly face
delisting.
An investment in the Fund is not a
bank deposit and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government
agency.
5½Janus Henderson Small/Mid Cap Growth
Alpha ETF
The following
information provides some indication of the risks of investing in the Fund by
showing how the Fund’s performance has varied over time. The bar chart depicts
the change in performance from year to year during the periods
indicated. The table compares the Fund’s average
annual returns for the periods indicated to a broad-based securities market
index and the index the Fund seeks to track. The indices are not available for
direct investment. All figures assume reinvestment of dividends and
distributions and include the effect of the Fund’s recurring
expenses.
The Fund’s past performance
(before and after taxes) does not necessarily indicate how it will perform in
the future. Updated performance
information is available at janushenderson.com/performance
or by calling 800‑668‑0434.
Janus
Henderson Small/Mid Cap Growth Alpha ETF
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Annual Total Returns (calendar
year-end) |
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Best
Quarter: 2nd Quarter 2020 34.59% Worst Quarter: 1st Quarter 2020 –25.89% |
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Average
Annual Total Returns (periods ended 12/31/21) |
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1 Year |
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5 Year |
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Since Inception
2/23/2016 |
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Janus Henderson Small/Mid Cap Growth Alpha
ETF |
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Return Before
Taxes |
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8.56 |
% |
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17.13 |
% |
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19.22 |
% |
Return After Taxes on
Distributions |
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8.49 |
% |
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17.04 |
% |
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19.12 |
% |
Return After Taxes on Distributions and
Sale of Fund Shares |
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5.12 |
% |
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13.89 |
% |
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15.85 |
% |
Janus Henderson Small/Mid Cap Growth
Alpha Index(1) (reflects no
deductions for fees, expenses or taxes) |
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8.84 |
% |
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17.55 |
% |
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19.68 |
% |
Russell 2500TM Growth
Index(1)
(reflects no deductions for fees, expenses or taxes) |
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5.04 |
% |
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17.65 |
% |
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19.17 |
% |
(1) |
Index performance shown in the table is
the total return, which assumes reinvestment of any dividends and
distributions during the time periods
shown. |
After‑tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after‑tax returns
depend on your individual tax situation and may differ from those shown in the
preceding table. The after‑tax return information shown above does not apply to
Fund shares held through a tax‑advantaged account, such as a 401(k) plan or an
IRA.
Investment Adviser: Janus Henderson
Investors US LLC
Portfolio Managers: Benjamin Wang, CFA, is Co‑Portfolio
Manager of the Fund, which he has co‑managed since inception. Scott M. Weiner, DPhil, is Co‑Portfolio Manager
of the Fund, which he has co‑managed since inception.
6½Janus Henderson Small/Mid Cap Growth
Alpha ETF
|
PURCHASE AND SALE OF FUND SHARES |
Unlike
shares of traditional mutual funds, shares of the Fund are not individually
redeemable and may only be purchased or redeemed directly from the Fund at NAV
in large increments called “Creation Units” through APs and the Adviser may
modify the Creation Unit size with prior notification to the Fund’s APs. See the
ETF portion of the Janus Henderson website for the Fund’s current Creation Unit
size. The Fund will generally issue or redeem Creation Units in exchange for
portfolio securities (and an amount of cash) that the Fund specifies each day.
Except when aggregated in Creation Units, Fund shares are not redeemable
securities of the Fund.
Shares
of the Fund are listed and trade on the NASDAQ, and individual investors can
purchase or sell shares in much smaller increments for cash in the secondary
market through a broker-dealer. These transactions, which do not involve the
Fund, are made at market prices that may vary throughout the day and differ from
the Fund’s NAV. As a result, you may pay more than NAV (at a premium) when you
purchase shares, and receive less than NAV (at a discount) when you sell shares,
in the secondary market.
Investors
purchasing or selling shares in the secondary market may also incur additional
costs, including brokerage commissions and an investor may incur costs
attributable to the difference between the highest price a buyer is willing to
pay to purchase shares of the Fund (bid) and the lowest price a seller is
willing to accept for shares of the Fund (ask) when buying or selling shares in
the secondary market (the “bid‑ask spread”). Historical information regarding
the Fund’s bid/ask spread can be accessed on the Fund’s website at
janushenderson.com/performance by selecting the Fund.
The
Fund’s distributions are generally taxable, and will be taxed as ordinary income
or capital gains, unless you are investing through a tax‑advantaged arrangement,
such as a 401(k) plan or an individual retirement account (in which case you may
be taxed at ordinary income tax rates upon withdrawal of your investment from
such account). A sale of Fund shares may result in a capital gain or loss.
|
PAYMENTS TO BROKER‑DEALERS AND OTHER FINANCIAL INTERMEDIARIES |
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a bank), the Adviser and/or its affiliates may pay broker-dealers or
intermediaries for the sale and/or maintenance of Fund shares and related
services. These payments may create a conflict of interest by influencing the
broker-dealer or other intermediary and your salesperson to recommend the Fund
over another investment. Ask your salesperson or visit your financial
intermediary’s website for more information.
7½Janus Henderson Small/Mid Cap Growth
Alpha ETF
ADDITIONAL
INFORMATION ABOUT THE
FUND
Please refer to the following important information
when reviewing the “Fees and Expenses of the Fund” table in the
Fund Summary of the Prospectus. Except as
otherwise indicated, the fees and expenses shown were determined based on
average net assets as of the Fund’s most recent fiscal year ended
October 31, 2021.
• |
|
“Annual
Fund Operating Expenses” are paid out of the Fund’s assets. You do
not pay these fees directly but, as the Example in the Fund Summary shows,
these costs are borne indirectly by all
shareholders. |
• |
|
The
“Management Fee” is the rate paid by the Fund to the Adviser for providing
certain services. Refer to “Management Expenses” in this Prospectus for
additional information with further description in the Statement of
Additional Information (“SAI”). |
|
° |
|
include
taxes and governmental fees, brokerage fees, commissions and other
transaction expenses, costs of borrowing money, including interest
expenses, securities lending expenses, and extraordinary expenses (such as
litigation and indemnification expenses). |
|
° |
|
include
acquired fund fees and expenses, which are indirect expenses the Fund may
incur as a result of investing in shares of an underlying fund to the
extent such expenses are less than 0.01%. “Acquired Fund” refers to any
underlying fund (including, but not limited to, business development
companies and exchange-traded funds) in which a fund invests or has
invested during the period. If applicable, or unless otherwise indicated
in the Fund’s Fees and Expenses table, such amounts are less than 0.01%
and are included in the Fund’s “Other
Expenses.” |
|
ADDITIONAL INVESTMENT STRATEGIES AND GENERAL PORTFOLIO POLICIES |
The
Fund’s Board of Trustees (“Trustees”) may change the Fund’s investment objective
or non‑fundamental principal investment strategies without a shareholder vote.
The Fund will notify you in writing at least 60 days or as soon as
reasonably practicable before making any such change it considers material. In
addition, the Fund will provide shareholders with at least 60 days’ notice
prior to changing the 80% investment policy. If there is a material change to
the Fund’s objective or principal investment strategies, you should consider
whether the Fund remains an appropriate investment for you. There is no
guarantee that the Fund will achieve its investment objective.
On
each business day before commencement of trading in shares on the NASDAQ, the
Fund will disclose on janushenderson.com/info the identities and quantities of
each portfolio position held by the Fund that will form the basis for the Fund’s
next calculation of the NAV per share. A description of the Fund’s policies and
procedures with respect to the disclosure of the Fund’s portfolio holdings is
available in the Fund’s SAI. Information about the premiums and discounts at
which the Fund’s shares have traded is available at
janushenderson.com/performance by selecting the Fund for additional
details.
Unless
otherwise stated, the following additional investment strategies and general
policies apply to the Fund and provide further information including, but not
limited to, the types of securities the Fund may invest in when implementing its
investment objective. Some of these strategies and policies may be part of a
principal strategy. Other strategies and policies may be utilized to a lesser
extent. Except for the Fund’s policies with respect to investments in illiquid
investments and borrowing, the percentage limitations included in these policies
and elsewhere in this Prospectus and/or the SAI normally apply only at the time
of purchase of a security. So, for example, if the Fund exceeds a limit, other
than illiquid investments and borrowing, as a result of market fluctuations or
the sale of other securities, it will not be required to dispose of any
securities and may continue to purchase such securities in order to track the
Underlying Index.
Exchange-Traded
Funds
The
Fund may invest in exchange-traded funds (“ETFs”), including affiliated ETFs.
ETFs are typically open-end investment companies that are traded on a national
securities exchange. ETFs typically incur fees, such as investment advisory fees
and other operating expenses that are separate from those of the Fund, which
will be indirectly paid by the Fund. As a result, the cost of investing in the
Fund may be higher than the cost of investing directly in ETFs and may be higher
than other mutual funds that invest directly in stocks and bonds. Since ETFs are
traded on an exchange at market prices that may vary from the net asset value of
their underlying investments, there may be times when ETFs trade at a premium or
discount. In the case of affiliated ETFs, unless waived, the Fund’s adviser will
earn fees both from the Fund and from the underlying ETF, with respect to assets
of the Fund invested in the underlying ETF. The Fund is also subject to the
risks associated with the securities in which the ETF invests.
8½Janus Detroit Street Trust
Real
Estate-Related Securities
Although
not considered a principal investment strategy, the Fund may invest in equity
securities of real estate-related companies to the extent such securities are
included in the Underlying Index. Such companies may include those in the real
estate industry or real estate-related industries. These securities may include
common stocks, preferred stocks, and other equity securities, such as
mortgage-backed securities, real estate-backed securities, securities of real
estate investment trusts (“REITs”) and similar REIT-like entities. A REIT is an
entity that invests in real estate-related projects, such as properties,
mortgage loans, and construction loans. REITs are generally categorized as
equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded
over‑the‑counter.
Similar
to REITs, real estate operating companies (“REOCs”) are publicly-traded real
estate companies that typically engage in the development, management or
financing of real estate, such as homebuilders, hotel management companies, land
developers and brokers. REOCs, however, have not elected (or are not eligible)
to be taxed as a REIT. The reasons for not making such an election include the
(i) availability of tax‑loss carry-forwards, (ii) operation in
non‑REIT‑qualifying lines of business, and (iii) ability to retain
earnings. Instead, REOCs are generally structured as “C” corporations under the
Internal Revenue Code and, as a result, are not required to distribute any
portion of their income. In this regard, although REOCs do not receive the same
favorable tax treatment that is accorded to REITs, REOCs are typically subject
to fewer restrictions than REITS, including the ability to retain and/or
reinvest funds from operations and more flexibility in terms of the real estate
investments they can make.
Securities
Lending
Although
not considered a principal investment strategy, the Fund may seek to earn
additional income through lending its securities to certain qualified
broker-dealers and institutions on a short-term or long-term basis. The Fund may
lend portfolio securities on a short-term or long-term basis, in an amount equal
to up to one‑third of its total assets as determined at the time of the loan
origination. When the Fund lends its securities, it receives collateral
(including cash collateral), at least equal to the value of securities loaned.
The Fund may earn income by investing this collateral in one or more affiliated
or non‑affiliated cash management vehicles. It is also possible that, due to a
decline in the value of a cash management vehicle in which collateral is
invested, the Fund may lose money. There is also the risk that when portfolio
securities are lent, the securities may not be returned on a timely basis, and
the Fund may experience delays and costs in recovering the security or gaining
access to the collateral provided to the Fund to collateralize the loan. If the
Fund is unable to recover a security on loan, the Fund may use the collateral to
purchase replacement securities in the market. There is a risk that the value of
the collateral could decrease below the cost of the replacement security by the
time the replacement investment is made, resulting in a loss to the Fund. To the
extent the Adviser manages the cash collateral in an affiliated cash management
vehicle, it will receive an investment advisory fee for managing such
assets.
Non‑Index
Investments
Although
not considered a principal investment strategy, the Fund may invest in
investments that are not included in the Underlying Index, but which the Adviser
believes will help the Fund track its Underlying Index. Such investments include
common stocks, shares of other investment companies and cash and cash
equivalents, including affiliated and non‑affiliated money market funds
(including unregistered cash management pooled investment vehicles that operate
as money market funds). There may be instances where a stock is removed from the
Underlying Index but the Adviser may elect to hold it for tax‑related purposes,
or where the Fund receives non‑Underlying Index stocks in a corporate action and
does not sell the stocks until the next rebalance date. The Adviser may also
choose to hold non‑Underlying Index stocks due to an optimization methodology to
more efficiently track the Underlying Index. Use of an optimization methodology
would entail the use of a program or model designed to identify securities that
are not included in the Underlying Index, but would be expected to behave
similarly to securities that are in the Underlying Index.
The
value of your investment will vary over time, sometimes significantly, and you
may lose money by investing in the Fund. The Fund invests substantially all of
its assets in small- and medium‑sized capitalization stocks. The following
information is intended to help you better understand some of the risks of
investing in the Fund. The impact of the following risks on the Fund may vary
depending on the Fund’s investments. The greater the Fund’s investment in a
particular security, the greater the Fund’s exposure to the risks associated
with that security. Before investing in the Fund, you should consider carefully
the risks that you assume when investing in the Fund.
Affiliated Index
Provider Risk. JH Indices, the index provider for the
Fund, is an affiliated person of the Adviser, which poses the appearance of a
conflict of interest. For example, a potential conflict could arise between an
affiliated person of the Adviser
9½Janus Detroit Street Trust
and
the Fund if that entity attempted to use information regarding changes and
composition of the Underlying Index to the detriment of the Fund. Additionally,
potential conflicts could arise with respect to the personal trading activity of
personnel of the affiliated person who may have access to, or knowledge of,
pending changes to the Underlying Index’s composition methodology or the
constituent securities in the Underlying Index prior to the time that
information is publicly disseminated. If shared, such knowledge could facilitate
“front-running” (which describes an instance in which other persons trade ahead
of a Fund). Although the Adviser and JH Indices have taken steps designed to
ensure that these potential conflicts are mitigated (e.g., via the adoption of
policies and procedures that are designed to minimize potential conflicts of
interest and the implementation of informational barriers designed to minimize
the potential for the misuse of information about the Underlying Index), there
can be no assurance that such measures will be successful.
Affiliated Underlying
Fund Risk. The Adviser may invest in certain affiliated
ETFs as investments for the Fund. The Adviser will generally receive fees for
managing such funds, in addition to the fees paid to the Adviser by the Fund.
The payment of such fees by affiliated funds creates a conflict of interest when
selecting affiliated funds for investment in the Fund. The Adviser, however, is
a fiduciary to the Fund and its shareholders and is legally obligated to act in
its best interest when selecting affiliated funds. In addition, the Adviser has
contractually agreed to waive and/or reimburse a portion of the Fund’s
management fee in an amount equal to the management fee it earns as an
investment adviser to any of the affiliated ETFs with respect to the Fund’s
investment in such ETF, less certain operating expenses.
Exchange-Traded Funds
Risk. The Fund may invest in ETFs, including affiliated
ETFs. ETFs are typically open-end investment companies that are traded on a
national securities exchange. ETFs typically incur fees, such as investment
advisory fees and other operating expenses that are separate from those of the
Fund, which will be indirectly paid by the Fund. As a result, the cost of
investing in the Fund may be higher than the cost of investing directly in ETFs
and may be higher than other mutual funds that invest directly in stocks and
bonds. Since ETFs are traded on an exchange at market prices that may vary from
the net asset value of their underlying investments, there may be times when
ETFs trade at a premium or discount. In the case of affiliated ETFs, unless
waived, the Fund’s adviser will earn fees both from the Fund and from the
underlying ETF, with respect to assets of the Fund invested in the underlying
ETF. The Fund is also subject to the risks associated with the securities in
which the ETF invests.
Fluctuation of
NAV. The NAV of the Fund shares will generally
fluctuate with changes in the market value of the Fund’s securities holdings.
The market prices of shares will generally fluctuate in accordance with changes
in the Fund’s NAV and supply and demand of shares on the NASDAQ. It cannot be
predicted whether Fund shares will trade below, at or above their NAV. Price
differences may be due, in large part, to the fact that supply and demand forces
at work in the secondary trading market for shares will be closely related to,
but not identical to, the same forces influencing the prices of the securities
of the Underlying Index trading individually or in the aggregate at any point in
time. In addition, during periods of significant volatility, the liquidity of
the underlying securities held by the Fund may affect the Fund’s trading prices.
While the creation/redemption feature is designed to make it likely that Fund
shares normally will trade close to the Fund’s NAV, disruptions to creations and
redemptions may result in trading prices that differ significantly from the
Fund’s NAV. An absence of trading in shares of the Fund, or a high volume of
trading in the Fund, may result in trading prices that differ significantly from
the Fund’s NAV. If an investor purchases Fund shares at a time when the market
price is at a premium to the NAV of the shares or sells at a time when the
market price is at a discount to the NAV of the shares, then the investor may
sustain losses. Further, the securities held by the Fund may be traded in
markets that close at a different time than the NASDAQ. Liquidity in those
securities may be reduced after the applicable closing times. Accordingly,
during the time when the NASDAQ is open but after the applicable market closing,
bid‑ask spreads and the resulting premium or discount to the Fund shares’ NAV
may widen. Similarly, the NASDAQ may be closed at times or days when markets for
securities held by the Fund are open, which may increase bid‑ask spreads and the
resulting premium or discount to the Fund shares’ NAV when the NASDAQ
re‑opens.
Index Tracking
Risk. Tracking
error refers to the risk that the Adviser may not be able to cause the Fund’s
performance to match or correlate to that of the Underlying Index, either on a
daily or aggregate basis. There are a number of factors that may contribute to
the Fund’s tracking error, such as Fund expenses, imperfect correlation between
the Fund’s investments and those of the Underlying Index, rounding of share
prices, the timing or magnitude of changes to the composition of the Underlying
Index, regulatory policies, and a high portfolio turnover rate. The Fund incurs
operating expenses not applicable to the Underlying Index and incurs costs
associated with buying and selling securities, especially when rebalancing the
Fund’s securities holdings to reflect changes in the composition of the
Underlying Index. In addition, mathematical compounding may prevent the Fund
from correlating with the monthly, quarterly, annual, or other period
performance of the Underlying Index. Tracking error may cause the Fund’s
performance to be less than expected.
10½Janus Detroit Street Trust
Market
Risk. The value of the Fund’s portfolio may decrease if
the value of an individual security, or multiple securities, in the portfolio
decreases. Further, regardless of how well individual securities perform, the
value of the Fund’s portfolio could also decrease if there are deteriorating
economic or market conditions, including, but not limited to, a general decline
in prices on the stock markets, a general decline in real estate markets, a
decline in commodities prices, or if the market favors different types of
securities than the types of securities in which the Fund invests. Market risk
may affect a single issuer, industry, economic sector, or the market as a whole.
To the extent that the Underlying Index focuses on a specific capitalization
sector of the stock market (small-, mid‑ or large-capitalization, as
applicable), the Fund may underperform the overall stock market.
The
increasing interconnectivity between global economies and financial markets
increases the likelihood that events or conditions in one region or financial
market may adversely impact issuers in a different country, region or financial
market. Social, political, economic and other conditions and events, such as
natural disasters, health emergencies (e.g., epidemics and other pandemics,
including COVID‑19), terrorism, conflicts and social unrest, could reduce
consumer demand or economic output, result in market closures, travel
restrictions and/or quarantines, and generally have a significant impact on the
global economies and financial markets. The effects of COVID‑19 have contributed
to increased volatility in global financial markets and may affect certain
countries, regions, issuers, industries and market sectors more dramatically
than others. These conditions and events could have a significant impact on the
Fund and its investments and the processes and operations of the Fund’s service
providers, including the Adviser.
Operational
Risk. An investment in the Fund can involve operational
risks arising from factors such as processing errors, human errors, inadequate
or failed internal or external processes, failures in systems and technology,
changes to key personnel, technology and/or service providers, and errors caused
by third party service providers. Among other things, these errors or failures,
as well as other technological issues, may adversely affect the Fund’s ability
to calculate its net asset value, process fund orders, execute portfolio trades,
track the Underlying Index or perform other core functions in a timely manner,
including over a potentially extended period of time. These errors or failures
may also result in a loss or compromise of information, regulatory scrutiny,
reputational damage or other events, any of which could have a material adverse
effect on the Fund. Implementation of business continuity plans by the Fund,
Adviser or third-party service providers in response to disruptive events such
as natural disasters, epidemics and pandemics, terrorism, conflicts and social
unrest may increase these operational risks to the Fund. While the Fund seeks to
minimize such events through internal controls and oversight of third-party
service providers, there is no guarantee that the Fund will not suffer losses if
such events occur.
Passive Investment
Risk. The Fund
is not actively managed. Therefore, unless a specific security is removed from
the Underlying Index, or the selling of shares of that security is otherwise
required upon a rebalancing of the Underlying Index pursuant to the Underlying
Index methodology, the Fund generally would not sell a security because the
security’s issuer was in financial trouble. If a specific security is removed
from the Underlying Index, the Fund may be forced to sell such security at an
inopportune time or for a price other than the security’s current market value.
An investment in the Fund involves risks similar to those of investing in equity
securities traded on an exchange, such as market fluctuations caused by such
factors as economic and political developments, changes in interest rates and
perceived trends in security prices. It is anticipated that the value of Fund
shares will decline, more or less, in correspondence with any decline in value
of the Underlying Index.
The
Underlying Index may not contain the appropriate mix of securities for any
particular point in the business cycle of the overall economy, particular
economic sectors, or narrow industries within which the commercial activities of
the companies composing the portfolio securities holdings of the Fund are
conducted, and the timing of movements from one type of security to another in
seeking to replicate the Underlying Index could have a negative effect on the
Fund. Unlike with an actively managed fund, the Adviser does not use techniques
or defensive strategies designed to lessen the effects of market volatility or
to reduce the impact of periods of market decline. This means that, based on
market and economic conditions, the Fund’s performance could be lower than other
types of mutual funds that may actively shift their portfolio assets to take
advantage of market opportunities or to lessen the impact of a market
decline.
Portfolio Turnover
Risk. Increased portfolio turnover may result in higher
costs for brokerage commissions, dealer mark-ups, and other transaction costs,
and may also result in taxable gains. Higher costs associated with increased
portfolio turnover also may have a negative effect on the Fund’s
performance.
Real Estate
Securities Risk. Although not considered a principal
risk, the Fund’s performance may be affected by the risks associated with
investments in real estate-related companies. The value of real estate-related
companies’ securities is sensitive to changes in real estate values and rental
income, property taxes, interest rates, tax and regulatory requirements, supply
and demand, and the management skill and creditworthiness of the issuer.
Investments in real estate investment trusts (“REITs”)
11½Janus Detroit Street Trust
involve
the same risks as other real estate investments. REITs and REIT-like entities
may have relatively small market capitalizations, which can increase the
relative volatility of the market price for their securities. In addition, a
REIT could fail to qualify for tax‑free pass-through of its income under the
Internal Revenue Code, as amended, or fail to maintain its exemption from
registration under the Investment Company Act of 1940, as amended (“1940 Act”),
which could produce adverse economic consequences for the REIT and its
investors, including the Fund. If the Fund has REIT investments, the Fund’s
shareholders will indirectly bear their proportionate share of the REIT’s
expenses, in addition to their proportionate share of the Fund’s expenses.
Trading Issues
Risk. Trading in shares on the NASDAQ may be halted due
to market conditions or for reasons that, in the view of the NASDAQ, make
trading in shares inadvisable. In addition, trading in shares on the NASDAQ is
subject to trading halts caused by extraordinary market volatility pursuant to
the NASDAQ “circuit breaker” rules. There can be no assurance that the
requirements of the NASDAQ necessary to maintain the listing of the Fund will
continue to be met or will remain unchanged or that the shares will trade with
any volume, or at all. While the creation/redemption feature is designed to make
it likely that shares will trade close to the Fund’s NAV, disruptions to
creations and redemptions may result in trading prices that differ significantly
from the Fund’s NAV. If an investor purchases shares at a time when the market
price is at a premium to the NAV of the shares or sells at a time when the
market price is at a discount to the NAV of the shares, then the investor may
sustain losses. In addition, during periods of significant volatility, the
liquidity of the underlying securities held by the Fund may affect the Fund’s
trading prices. For example, when the Fund’s underlying securities trade on
foreign exchanges that are closed when the securities exchange on which the
Fund’s shares trade is open, this may result in deviations between the current
price of such an underlying security and the last quoted price for the
underlying security. This could result in premiums or discounts to the Fund’s
NAV. During a “flash crash,” the market prices of the Fund’s shares may decline
suddenly and significantly. Such a decline may not reflect the performance of
the portfolio securities held by the Fund. Flash crashes may cause Authorized
Participants and other market makers to limit or cease trading in the Fund’s
shares for temporary or longer periods. Shareholders could suffer significant
losses to the extent that they sell shares at these temporarily low market
prices.
Transaction and
Spread Risk. Investors buying or selling
Fund shares in the secondary market will pay brokerage commissions or other
charges imposed by brokers as determined by that broker. Brokerage commissions
are often a fixed amount and may be a significant proportional cost for
investors seeking to buy or sell relatively small amounts of shares. In
addition, secondary market investors will also incur the cost of the difference
between the price that an investor is willing to pay for shares (the “bid”
price) and the price at which an investor is willing to sell shares (the “ask”
price). This difference in bid and ask prices is often referred to as the
“spread” or “bid/ask spread.” The bid/ask spread varies over time for shares
based on trading volume and market liquidity, and is generally lower if the
Fund’s shares have more trading volume and market liquidity and higher if the
Fund’s shares have little trading volume and market liquidity. Further,
increased market volatility and trading halts affecting any of the Fund’s
portfolio securities may cause increased bid/ask spreads. Due to the costs of
buying or selling shares, including bid/ask spreads, frequent trading of shares
may significantly reduce investment results and an investment in shares may not
be advisable for investors who anticipate regularly making small
investments.
These
risks are described further in the SAI.
|
INFORMATION REGARDING THE UNDERLYING INDEX |
The
Underlying Index is composed of common stocks from a universe of 2,500 small‑and
medium‑sized capitalization stocks. The Solactive Small/Mid Cap Index uses the
total public market value, or “free-float,” capitalization of a stock to
determine whether to include such stock in the Solactive Small/Mid Cap Index.
The Underlying Index is designed to select small- and medium‑sized
capitalization stocks that are poised for “smart growth” by evaluating each
company’s performance in three critical areas: growth, profitability, and
capital efficiency. Using a proprietary quantitative methodology, such stocks
are scored based on fundamental measures of their growth, profitability, and
capital efficiency, and the top 10% of such eligible stocks scoring the highest
become the constituents of the Underlying Index. To arrive at the top 10%, for
each security in the stated universe, the quantitative methodology assigns a
score in each of 10 different factors, relative to other eligible securities.
The fundamental factors include measures that the Adviser believes are tied to a
stock’s outperformance relative to other small/mid cap stocks, and indicate a
company’s performance with respect to growth (such as the revenue growth rate
over 2‑ 5‑ and 8‑ year periods), profitability (such as margin expansion, profit
margin and earnings per share over time) and capital efficiency (such as returns
on invested capital). Each stock in the eligible universe will receive a point
total equal to the decile rank of the stock for a given factor. For example, if
a stock is in the top decile for a given factor, it will receive 10 points for
that factor. If the stock is in the lowest decile, it will receive 1 point. For
each factor, a threshold is established, and to the extent a stock’s
12½Janus Detroit Street Trust
score
within a factor meets or exceeds the threshold, it will receive additional
points. A high threshold means that exceeding that threshold is relatively
difficult for a stock to achieve, and as a result will receive more bonus points
than if the threshold were lower. For detailed information on how stocks are
scored, see the Janus Henderson Small/Mid Cap Growth Alpha Index Methodology
document, available at the Index Provider’s website.
The
scores for each stock within a factor are then added together across the 10
factors, with equal weighting, to arrive at an overall score for each stock.
These stocks with the highest 10% of scores are then weighted within the
Underlying Index according to their market capitalization. Finally, the stocks
are sector-weighted to reflect the sector allocation weight of Janus Henderson
Triton Fund, based on its most recent publicly available holdings. A stock may
not represent more than 3% of the Underlying Index. The Underlying Index seeks
risk adjusted outperformance relative to a market capitalization weighted
universe of small- and medium-sized capitalization growth stocks. Market
capitalizations within the Underlying Index will vary, but as of
January 31, 2022, they ranged from approximately $40 million to
$28.55 billion. From time to time, and often as the result of specific
corporate actions, the Solactive Small/Mid Cap Index (and as a result the
Underlying Index) may temporarily include companies that are either smaller or
larger than are typically considered to be small- and/or mid‑sized
capitalization. The Underlying Index is rebalanced on a quarterly basis based on
the methodology described above.
The
Underlying Index is compiled and administered by JH Indices, an affiliate of the
Fund and the Adviser.
13½Janus Detroit Street Trust
MANAGEMENT
OF THE FUND
Janus
Henderson Investors US LLC, 151 Detroit Street, Denver, Colorado 80206-4805, is
the investment adviser to the Fund. Effective January 3, 2022 the Adviser
changed its name from Janus Capital Management LLC to Janus Henderson Investors
US LLC. The Adviser is responsible for the day‑to‑day management of the Fund’s
investment portfolio and furnishes continuous advice and recommendations
concerning the Fund’s investments. The Adviser also provides certain
administration and other services and is responsible for other business affairs
of the Fund.
The
Adviser (together with its predecessors and affiliates) has served as investment
adviser to Janus Henderson mutual funds since 1970 and currently serves as
investment adviser to all of the Janus Henderson mutual funds, including Janus
Henderson exchange-traded funds, acts as subadviser for a number of
private-label mutual funds, and provides separate account advisory services for
institutional accounts and other unregistered products.
The
Adviser has received an exemptive order from the Securities and Exchange
Commission (“SEC”) that permits the Adviser, subject to the approval of the
Trustees, to appoint or replace certain subadvisers to manage all or a portion
of the Fund’s assets and enter into, amend, or terminate a subadvisory agreement
with certain subadvisers without obtaining shareholder approval (a
“manager‑of‑managers structure”). The manager‑of‑managers structure applies to
subadvisers that are not affiliated with the Trust or the Adviser
(“non‑affiliated subadvisers”), as well as any subadviser that is an indirect or
direct “wholly-owned subsidiary” (as such term is defined by the 1940 Act) of
the Adviser or of another company that, indirectly or directly, wholly owns the
Adviser (collectively, “wholly-owned subadvisers”).
Pursuant
to the order, the Adviser, with the approval of the Trustees, has the discretion
to terminate any subadviser and allocate and reallocate the Fund’s assets among
the Adviser and any other non‑affiliated subadvisers or wholly-owned subadvisers
(including terminating a non‑affiliated subadviser and replacing it with a
wholly-owned subadviser). The Adviser, subject to oversight and supervision by
the Trustees, has responsibility to oversee any subadviser to the Fund and to
recommend for approval by the Trustees, the hiring, termination, and replacement
of subadvisers for the Fund. The order also permits the Fund to disclose
subadvisers’ fees only in the aggregate in the SAI. In the event that the
Adviser hires a new subadviser pursuant to the manager‑of‑managers structure,
the Fund would provide shareholders with information about the new subadviser
and subadvisory agreement within 90 days.
The
Fund uses a unitary fee structure, under which the Fund pays the Adviser a
“Management Fee” in return for providing certain investment advisory,
supervisory, and administrative services to the Fund, including the costs of
transfer agency, custody, fund administration, legal, audit, and other services.
The Adviser’s fee structure is designed to pay substantially all of the Fund’s
expenses. However, the Fund bears other expenses which are not covered under the
Management Fee which may vary and affect the total level of expenses paid by
shareholders, such as distribution fees (if any), brokerage expenses or
commissions, interest and dividends, taxes, litigation expenses, acquired fund
fees and expenses (if any), and extraordinary expenses.
The
Fund’s Management Fee is calculated daily and paid monthly. The Fund’s advisory
agreement details the Management Fee and other expenses that the Fund must
pay.
The
following table reflects the Fund’s contractual Management Fee rate (expressed
as an annual rate). The rates shown are fixed rates based on the Fund’s daily
net assets.
|
|
|
|
|
|
|
Fund Name |
|
Daily
Net
Assets
of
the Fund |
|
Contractual
Management Fee (%)
(annual rate) |
|
Janus
Henderson Small/Mid Cap Growth Alpha ETF |
|
$0‑$500 million |
|
|
0.30 |
|
|
|
Next $500 million |
|
|
0.25 |
|
|
|
Over
$1 billion |
|
|
0.20 |
|
14½Janus Detroit Street Trust
The
chart below shows the Fund’s hypothetical, blended fee rate based on the Fund’s
daily net assets at varying asset levels.
|
|
|
Fund Assets |
|
Effective Blended Rate Management Fee (%) (annual rate) |
$500 million |
|
0.300 |
$750 million |
|
0.283 |
$1.0 billion |
|
0.275 |
$1.25 billion |
|
0.260 |
$1.5 billion |
|
0.250 |
$2.0 billion |
|
0.238 |
$2.5 billion |
|
0.230 |
$3.0 billion |
|
0.225 |
$4.0 billion |
|
0.219 |
$5.0 billion |
|
0.215 |
$6.0 billion |
|
0.213 |
For
the fiscal year ended October 31, 2021, the aggregate fee paid to the
Adviser, as a percentage of average net assets, was 0.30%. A discussion
regarding the basis for the Trustees’ approval of the Fund’s investment advisory
agreement is included in the Fund’s annual report (for the period ending October
31) or semiannual report (for the period ending April 30) to shareholders. You
can request the Fund’s annual or semiannual reports (as they become available),
free of charge, by contacting your broker-dealer, plan sponsor, or financial
intermediary, or by contacting a representative at 1‑800‑668‑0434. The reports
are also available, free of charge, at janushenderson.com/info.
Expense
Limitation
The
Adviser has contractually agreed to waive and/or reimburse a portion of the
Fund’s management fee in an amount equal to the management fee it earns as an
investment adviser to any affiliated ETFs in which the Fund invests. Pursuant to
this agreement, the waiver amount is equal to the amount of Fund assets invested
in the affiliated ETF, multiplied by an amount equal to the current daily
unitary management fee of the affiliated ETF less certain asset-based operating
fees and expenses incurred on a per-fund basis and paid by the Adviser with
respect to the affiliated ETF (including, but not limited to custody,
sub-administration and transfer agency fees). The fee waiver agreement will
remain in effect at least through February 28, 2023. The Adviser may not recover
amounts previously waived or reimbursed that are related to investments in
affiliated ETFs. The fee waiver agreement may be modified or terminated prior to
this date only at the discretion of the Board of Trustees.
Janus
Henderson Small/Mid Cap Growth Alpha ETF
Co‑Portfolio
Managers Benjamin Wang and Scott M. Weiner are jointly responsible for the
day‑to‑day management of the Fund, with no limitation on the authority of any
co‑portfolio manager in relation to the others.
Benjamin
Wang, CFA, is Co‑Portfolio Manager of the Fund, which he has
co‑managed since inception. He is also Portfolio Manager of other Janus
accounts. Mr. Wang joined the Adviser in November 2014 following the
Adviser’s acquisition of VelocityShares, LLC. Prior to joining the Adviser,
Mr. Wang was Vice President at VelocityShares, LLC from 2012 to 2014, and
an execution trader at Goldman Sachs Asset Management from 2007 to 2011. He
holds a Bachelor of Science degree and a Master of Engineering in Computer
Science from the Massachusetts Institute of Technology, and a Master of Science
degree in Financial Engineering from Columbia University. Mr. Wang holds
the Chartered Financial Analyst designation.
Scott M.
Weiner, DPhil, is Co‑Portfolio Manager of the Fund, which he has
co‑managed since inception. He is also Portfolio Manager of other Janus
accounts. Mr. Weiner joined the Adviser in November 2014 following the
Adviser’s acquisition of VelocityShares, LLC. Prior to joining the Adviser,
Mr. Weiner was Managing Director at VelocityShares, LLC from 2011 to 2014,
and Managing Director and U.S. Head of Equity Derivatives and Quantitative
Strategy at Deutsche Bank from 2005 to 2010. He holds an Economics degree from
the Wharton School of the University of Pennsylvania, a Master’s degree in
Economics from the University of Oxford, and also received his Doctorate in
Economics from the University of Oxford.
15½Janus Detroit Street Trust
Information
about the portfolio managers’ compensation structure and other accounts managed
is included in the SAI.
Conflicts
of Interest
The
Adviser manages many funds and numerous other accounts, which may include
separate accounts and other pooled investment vehicles, such as hedge funds.
Side‑by‑side management of multiple accounts, including the management of a cash
collateral pool for securities lending and investing the Janus Henderson funds’
cash, may give rise to conflicts of interest among those accounts, and may
create potential risks, such as the risk that investment activity in one account
may adversely affect another account. For example, short sale activity in an
account could adversely affect the market value of long positions in one or more
other accounts (and vice versa). Side‑by‑side management may raise additional
potential conflicts of interest relating to the allocation of investment
opportunities and the aggregation and allocation of trades.
In
addition, from time to time, the Adviser or its affiliates may, subject to
compliance with applicable law, purchase and hold shares of the Fund for their
own accounts, or may purchase shares of the Fund for the benefit of their
clients, including other Janus Henderson Funds. Increasing the Fund’s assets may
enhance the Fund’s profile with financial intermediaries and platforms,
investment flexibility and trading volume. The Adviser and its affiliates
reserve the right, subject to compliance with applicable law, to dispose of at
any time some or all of the shares of the Fund acquired for their own accounts
or for the benefit of their clients. A large sale of Fund shares by the Adviser
or its affiliates could significantly reduce the asset size of the Fund, which
might have an adverse effect on the Fund’s investment flexibility or trading
volume. The Adviser considers the effect of redemptions on the Fund and other
shareholders in deciding whether to dispose of its shares of the Fund.
The
Adviser believes it has appropriately designed and implemented policies and
procedures to mitigate these and other potential conflicts of interest. A
further discussion of potential conflicts of interest and policies and
procedures intended to mitigate them is contained in the Fund’s SAI.
16½Janus Detroit Street Trust
OTHER
INFORMATION
Creation
Units for the Fund are distributed by ALPS Distributors, Inc. (the
“Distributor”), which is a member of the Financial Industry Regulatory
Authority, Inc. (“FINRA”). To obtain information about FINRA member firms and
their associated persons, you may contact FINRA at www.finra.org, or
1‑800‑289‑9999.
JH
Indices is the Index Provider for the Underlying Index. The Adviser has entered
into a license agreement with JH Indices to use the Underlying Index. JH Indices
is affiliated with the Fund and the Adviser. This affiliation may create
potential conflicts for JH Indices as it may have an interest in the performance
of the Fund, which could motivate it to alter the index methodology for the
Underlying Index. JH Indices has adopted procedures that it believes are
reasonably designed to mitigate these and other potential conflicts.
Disclaimers
JH
Indices is the licensor of certain trademarks, service marks, and trade
names.
Neither
JH Indices nor any of its affiliates make any representation or warranty,
express or implied, to the owners of the Fund or any member of the public
regarding the advisability of investing in securities generally or in the Fund
particularly or the ability of the Underlying Index to track general market
performance. The Underlying Index is determined, composed, and calculated by JH
Indices without regard to the Adviser or the Fund. JH Indices has no obligation
to take the needs of the Adviser or the owners of the Fund into consideration in
determining, composing, or calculating the Underlying Index. JH Indices is not
responsible for and has not participated in the determination of the timing of,
prices at, or quantities of the Fund to be issued or in the determination or
calculation of the equation by which the Fund is to be converted into
cash.
ALTHOUGH
JH INDICES SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE UNDERLYING INDEX FROM SOURCES WHICH IT CONSIDERS RELIABLE, IT
DOES NOT GUARANTEE THE QUALITY, ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN AND SHALL HAVE NO LIABILITY FOR
ERRORS OR OMISSIONS OF ANY KIND RELATED TO THE UNDERLYING INDEX OR DATA. JH
INDICES MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY
THE ADVISER, OWNERS OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF
THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS
LICENSED TO THE ADVISER FOR ANY OTHER USE. JH INDICES MAKES NO EXPRESS OR
IMPLIED WARRANTIES, AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL IT HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.
The
Adviser does not guarantee the accuracy and/or the completeness of the
Underlying Index or any data included therein, and the Adviser shall have no
liability for any errors, omissions or interruptions therein. The Adviser makes
no warranty, express or implied, as to results to be obtained by the Fund,
owners of the shares of the Fund or any other person or entity from the use of
the Underlying Index or any data included therein. The Adviser makes no express
or implied warranties, and expressly disclaims all warranties of merchantability
or fitness for a particular purpose or use with respect to the Underlying Index
or any data included therein. Without limiting any of the foregoing, in no event
shall the Adviser have any liability for any special, punitive, direct, indirect
or consequential damages (including lost profits) arising out of matters
relating to the use of the Underlying Index even if notified of the possibility
of such damages.
17½Janus Detroit Street Trust
DIVIDENDS,
DISTRIBUTIONS, AND TAXES
To
avoid taxation of the Fund, the Internal Revenue Code of 1986, as amended (the
“Internal Revenue Code”), requires the Fund to distribute all or substantially
all of its net investment income and any net capital gains realized on its
investments at least annually.
Distribution
Schedule
Dividends
from net investment income are generally declared and distributed to
shareholders quarterly. Distributions of net capital gains are declared and
distributed at least annually. Dividends may be declared and paid more
frequently to improve Underlying Index tracking or to comply with the
distribution requirements of the Internal Revenue Code. The date you receive
your distribution may vary depending on how your intermediary processes trades.
Dividend payments are made through Depository Trust Company (“DTC”)
participants and indirect participants to beneficial owners then of record with
proceeds received from the Fund. Please consult your financial intermediary for
details.
How
Distributions Affect the Fund’s NAV
Distributions
are paid to shareholders as of the record date of a distribution of the Fund,
regardless of how long the Shares have been held. Undistributed income and net
capital gains are included in the Fund’s daily NAV. The Fund’s NAV drops by the
amount of the distribution, net of any subsequent market fluctuations. For
example, assume that on December 31, the Fund declared a dividend in the
amount of $0.25 per share. If the Fund’s NAV was $10.00 on December 30, the
Fund’s NAV on December 31 would be $9.75, barring market fluctuations. You
should be aware that distributions from a taxable fund do not increase the value
of your investment and may create income tax obligations.
No
dividend reinvestment service is provided by the Trust. Financial intermediaries
may make available the DTC book-entry Dividend Reinvestment Service for use by
beneficial owners of Fund shares for reinvestment of their dividend
distributions. Beneficial owners should contact their financial intermediary to
determine the availability and costs of the service and the details of
participation therein. Financial intermediaries may require beneficial owners to
adhere to specific procedures and timetables. If this service is available and
used, dividend distributions of both income and net capital gains will be
automatically reinvested in additional whole shares of the Fund purchased in the
secondary market.
As
with any investment, you should consider the tax consequences of investing in
the Fund. The following is a general discussion of certain federal income tax
consequences of investing in the Fund. The discussion does not apply to
qualified tax‑advantaged accounts or other non‑taxable entities, nor is it a
complete analysis of the federal income tax implications of investing in the
Fund. You should consult your tax adviser regarding the effect that an
investment in the Fund may have on your particular tax situation, including the
federal, state, local, and foreign tax consequences of your investment.
Taxes
on Distributions
Distributions
by the Fund are subject to federal income tax, regardless of whether the
distribution is made in cash or reinvested in additional shares of the Fund.
Distributions from net investment income (which includes dividends, interest,
and realized net short-term capital gains), other than qualified dividend
income, are taxable to shareholders as ordinary income. Distributions of
qualified dividend income are taxed to individuals and other noncorporate
shareholders at long-term capital gain rates, provided certain holding period
and other requirements are satisfied. Dividends received from REITs, certain
foreign corporations, and income received “in lieu of” dividends in a securities
lending transaction generally will not constitute qualified dividend income.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gain,
regardless of how long a shareholder has held Fund shares. Individuals, trusts,
and estates whose income exceeds certain threshold amounts are subject to an
additional 3.8% Medicare contribution tax on net investment income. Net
investment income includes dividends paid by the Fund and capital gains from any
sale or exchange of Fund shares. The Fund’s net investment income and capital
gains are distributed to (and may be taxable to) those persons who are
shareholders of the Fund at the record date of such payments. Although the
Fund’s total net income and net realized gain are the results of its operations,
the per share amount distributed or taxable to shareholders is affected by the
number of Fund shares outstanding at the record date. Distributions declared to
shareholders of record in October, November, or December and paid on or before
January 31 of the succeeding year will be treated for federal income tax
purposes as if received by shareholders on December 31 of the year in which
the distribution was declared. Generally, account tax information will be made
available to shareholders on or before February 15 of each year.
Information regarding distributions may also be reported to the Internal Revenue
Service (“IRS”).
18½Janus Detroit Street Trust
Taxes
on Sales
Any
time you sell the shares of the Fund in a taxable account, it is considered a
taxable event. Depending on the purchase price and the sale price, you may have
a gain or loss on the transaction. The gain or loss will generally be treated as
a long-term capital gain or loss if you held your shares for more than one year
and if not held for such period, as a short-term capital gain or loss. Any tax
liabilities generated by your transactions are your responsibility.
U.S. federal
income tax withholding may be required on all distributions payable to
shareholders who fail to provide their correct taxpayer identification number,
fail to make certain required certifications, or who have been notified by the
IRS that they are subject to backup withholding. The current backup withholding
rate is applied.
For
shares purchased and sold from a taxable account, your intermediary will report
cost basis information to you and to the IRS. Your financial intermediary will
permit shareholders to elect their preferred cost basis method. In the absence
of an election, your cost basis method will be your financial intermediary’s
default method, which is often the average cost method. Please consult your tax
adviser to determine the appropriate cost basis method for your particular tax
situation and to learn more about how the cost basis reporting laws apply to you
and your investments.
Taxation
of the Fund
Dividends,
interest, and some capital gains received by the Fund on foreign securities may
be subject to foreign tax withholding or other foreign taxes.
Certain
fund transactions may involve short sales, futures, options, swap agreements,
hedged investments, and other similar transactions, and may be subject to
special provisions of the Internal Revenue Code that, among other things, can
potentially affect the character, amount, and timing of distributions to
shareholders, and utilization of capital loss carryforwards. The Fund will
monitor its transactions and may make certain tax elections and use certain
investment strategies where applicable in order to mitigate the effect of these
tax provisions, if possible.
The
Fund does not expect to pay any federal income or excise taxes because it
intends to meet certain requirements of the Internal Revenue Code, including the
distribution each year of substantially all its net investment income and net
capital gains. It is important for the Fund to meet these requirements so that
any earnings on your investment will not be subject to federal income tax twice.
If the Fund invests in a partnership, however, it may be subject to state tax
liabilities.
If
the Fund redeems Creation Units in cash, it may recognize more capital gains
than it will if it redeems Creation Units in‑kind.
For additional
information, see the “Taxation” section of the Statement of Additional
Information.
19½Janus Detroit Street Trust
SHAREHOLDER’S
GUIDE
The
Fund issues or redeems its shares at NAV per share only in Creation Units.
Shares of the Fund are listed for trading on a national securities exchange and
trade on the secondary market during the trading day. Shares can be bought and
sold throughout the trading day like shares of other publicly traded companies.
There is no minimum investment. When buying or selling Fund shares through a
broker, you will incur customary brokerage commissions and charges, and you may
pay some or all of the spread between the bid and offered price in the secondary
market on each purchase and sale transaction. Fund shares are traded on the
NASDAQ under the trading symbol JSMD. Share prices are reported in dollars and
cents per share.
Authorized
Participants may acquire Fund shares directly from the Fund, and Authorized
Participants may tender their Fund shares for redemption directly to the Fund,
at NAV per share, only in Creation Units and in accordance with the procedures
described in the SAI.
The
per share NAV of the Fund is computed by dividing the total value of the Fund’s
portfolio, less any liabilities, by the total number of outstanding shares of
the Fund. The Fund’s NAV is calculated as of the close of the regular trading
session of the New York Stock Exchange (“NYSE”) (normally 4:00 p.m. New
York time) each day that the NYSE is open. However, the NAV may still be
calculated if trading on the NYSE is restricted, provided there is sufficient
pricing information available for the Fund to value its securities, or as
permitted by the SEC. Foreign securities held by the Fund may be traded on days
and at times when the NYSE is closed and the NAV is therefore not calculated.
Accordingly, the value of the Fund’s holdings may change on days that are not
Business Days in the United States and on which you will not be able to purchase
or sell the Fund’s shares.
Securities
held by the Fund are valued in accordance with policies and procedures
established by and under the supervision of the Trustees. To the extent
available, equity securities (including shares of exchange-traded funds) are
generally valued on the basis of market quotations. Most fixed-income securities
are typically valued using an evaluated bid price supplied by an approved
pricing service that is intended to reflect market value. The evaluated bid
price is an evaluation that may consider factors such as security prices,
yields, maturities, and ratings. Certain short-term instruments maturing within
60 days or less may be valued at amortized cost, which approximates market
value. If a market quotation or evaluated price for a security is not readily
available or is deemed unreliable, or if an event that is expected to affect the
value of the security occurs after the close of the principal exchange or market
on which the security is traded, and before the close of the NYSE, a fair value
of the security will be determined in good faith under the policies and
procedures. Such events include, but are not limited to: (i) a significant
event that may affect the securities of a single issuer, such as a merger,
bankruptcy, or significant issuer-specific development; (ii) an event that
may affect an entire market, such as a natural disaster or significant
governmental action; (iii) a non‑significant event such as a market closing
early or not opening, or a security trading halt; and (iv) pricing of a
non‑valued security and a restricted or non‑public security. This type of fair
value pricing may be more commonly used with foreign equity securities, but it
may also be used with, among other things, thinly-traded domestic securities or
fixed-income securities. Special valuation considerations may apply with respect
to “odd‑lot” fixed-income transactions which, due to their small size, may
receive evaluated prices by pricing services which reflect a large block trade
and not what actually could be obtained for the odd‑lot position. For valuation
purposes, quotations of foreign portfolio securities, other assets and
liabilities, and forward contracts stated in foreign currency are generally
translated into U.S. dollar equivalents at the prevailing market
rates.
The
value of the securities of open‑end mutual funds held by the Fund, if any, will
be calculated using the NAV of such open‑end mutual funds, and the prospectuses
for such open‑end mutual funds explain the circumstances under which they use
fair value pricing and the effects of using fair value pricing.
All
purchases, sales, or other account activity must be processed through your
financial intermediary or plan sponsor.
|
DISTRIBUTION AND SERVICING FEES |
Distribution
and Shareholder Servicing Plan
The
Trust has adopted a Distribution and Servicing Plan for shares of the Fund
pursuant to Rule 12b‑1 under the 1940 Act (the “Plan”). The Plan permits
compensation in connection with the distribution and marketing of Fund shares
and/or the provision of certain shareholder services. The Plan permits the Fund
to pay the Distributor or its designee, a fee for the sale and distribution
and/or shareholder servicing of the shares at an annual rate of up to 0.25% of
average daily net assets of the shares of the Fund (“12b‑1 fee”). However,
payment of a 12b‑1 fee has not been authorized at this time.
20½Janus Detroit Street Trust
Under
the terms of the Plan, the Trust is authorized to make payments to the
Distributor or its designee for remittance to retirement plan service providers,
broker-dealers, bank trust departments, financial advisors, and other financial
intermediaries, as compensation for distribution and/or shareholder services
performed by such entities for their customers who are investors in the
Fund.
The
12b‑1 fee may only be imposed or increased when the Trustees determine that it
is in the best interests of shareholders to do so and the imposition of or
increase in the 12b‑1 fee is first approved by the Fund’s shareholders. Because
these fees are paid out of the Fund’s assets on an ongoing basis, to the extent
that a fee is authorized and payments are made, over time they will increase the
cost of an investment in the Fund. The 12b‑1 fee may cost an investor more than
other types of sales charges.
|
PAYMENTS TO FINANCIAL INTERMEDIARIES BY THE ADVISER OR ITS AFFILIATES |
From
their own assets, the Adviser or its affiliates pay selected brokerage firms or
other financial intermediaries for making certain funds available to their
clients or otherwise distributing, promoting or marketing the funds. The Adviser
or its affiliates also make payments to one or more intermediaries for
information about transactions and holdings in the funds, such as the amount of
fund shares purchased, sold or held through the intermediary and or its
salespersons, the intermediary platform(s) on which shares are transacted and
other information related to the funds. Payments made by the Adviser and its
affiliates may eliminate or reduce trading commissions that the intermediary
would otherwise charge its customers or its salespersons in connection with the
purchase or sale of certain funds. Payment by the Adviser or its affiliates to
eliminate or reduce a trading commission creates an incentive for salespersons
of the intermediary to sell the Janus Henderson funds over other funds for which
a commission would be charged. The amount of these payments is determined from
time to time by the Adviser, may be substantial, and may differ for different
intermediaries. The Adviser may determine to make payments based on any number
of factors or metrics. For example, the Adviser may make payments at year‑end
and/or other intervals in a fixed amount, an amount based upon an intermediary’s
services at defined levels, an amount based upon the total assets represented by
funds subject to arrangements with the intermediary, or an amount based on the
intermediary’s net sales of one or more funds in a year or other period, any of
which arrangements may include an agreed-upon minimum or maximum payment, or any
combination of the foregoing. Payments based primarily on sales create an
incentive to make new sales of shares, while payments based on assets create an
incentive to retain previously sold shares. The Adviser currently maintains
asset-based agreements with certain intermediaries on behalf of the Trust. The
amount of compensation paid by the Adviser varies from intermediary to
intermediary. More information regarding these payments is contained in the
SAI.
With
respect to non‑exchange‑traded Janus Henderson funds not offered in this
Prospectus, the Adviser or its affiliates pay fees, from their own assets, to
selected brokerage firms, banks, financial advisors, retirement plan service
providers, and other financial intermediaries that sell the Janus Henderson
funds for distribution, marketing, promotional, or related services, and/or for
providing recordkeeping, subaccounting, transaction processing, and other
shareholder or administrative services (including payments for processing
transactions via National Securities Clearing Corporation (“NSCC”) or other
means) in connection with investments in the Janus Henderson funds. These fees
are in addition to any fees that may be paid by the Janus Henderson funds for
certain of these types of services or other services. Shareholders investing
through an intermediary should consider whether such arrangements exist when
evaluating any recommendations from an intermediary.
In
addition, the Adviser or its affiliates may also share certain marketing
expenses with intermediaries, or pay for or sponsor informational meetings,
seminars, client awareness events, support for marketing materials, sales
reporting, or business building programs for such intermediaries to raise
awareness of the Janus Henderson funds. The Adviser or its affiliates make
payments to participate in intermediary marketing support programs which may
provide the Adviser or its affiliates with one or more of the following
benefits: attendance at sales conferences, participation in meetings or training
sessions, access to or information about intermediary personnel, use of an
intermediary’s marketing and communication infrastructure, fund analysis tools,
data, business planning and strategy sessions with intermediary personnel,
information on industry- or platform-specific developments, trends and service
providers, and other marketing-related services. Such payments may be in
addition to, or in lieu of, the payments described above. These payments are
intended to promote the sales of Janus Henderson funds and to reimburse
financial intermediaries, directly or indirectly, for the costs that they or
their salespersons incur in connection with educational seminars, meetings, and
training efforts about the Janus Henderson funds to enable the intermediaries
and their salespersons to make suitable recommendations, provide useful
services, and maintain the necessary infrastructure to make the Janus Henderson
funds available to their customers.
21½Janus Detroit Street Trust
The
receipt of (or prospect of receiving) payments, reimbursements and other forms
of compensation described above may provide a financial intermediary and its
salespersons with an incentive to favor sales of Janus Henderson funds’ shares
over sales of other funds (or non‑mutual fund investments), with respect to
which the financial intermediary does not receive such payments or receives them
in a lower amount. The receipt of these payments may cause certain financial
intermediaries to elevate the prominence of the Janus Henderson funds within
such financial intermediary’s organization by, for example, placement on a list
of preferred or recommended funds and/or the provision of preferential or
enhanced opportunities to promote the Janus Henderson funds in various ways
within such financial intermediary’s organization.
From
time to time, certain financial intermediaries approach the Adviser to request
that the Adviser make contributions to certain charitable organizations. In
these cases, the Adviser’s contribution may result in the financial
intermediary, or its salespersons, recommending Janus Henderson funds over other
funds (or non‑mutual fund investments).
The
payment arrangements described above will not change the price an investor pays
for shares nor the amount that a Janus Henderson fund receives to invest on
behalf of the investor. You should consider whether such arrangements exist when
evaluating any recommendations from an intermediary to purchase or sell shares
of the Fund. Please contact your financial intermediary or plan sponsor for
details on such arrangements.
|
PURCHASING AND SELLING SHARES |
Shares
of the Fund are listed for trading on a national securities exchange during the
trading day. Shares can be bought and sold throughout the trading day like
shares of other publicly traded companies. However, there can be no guarantee
that an active trading market will develop or be maintained, or that the Fund
shares listing will continue or remain unchanged. The Fund does not impose any
minimum investment for shares of the Fund purchased on an exchange. Buying or
selling the Fund’s shares involves certain costs that apply to all securities
transactions. When buying or selling shares of the Fund through a financial
intermediary, you may incur a brokerage commission or other charges determined
by your financial intermediary. Due to these brokerage costs, if any, frequent
trading may detract significantly from investment returns. In addition, you may
also incur the cost of the spread (the difference between the bid price and the
ask price). The commission is frequently a fixed amount and may be a significant
cost for investors seeking to buy or sell small amounts of shares.
The
spread varies over time for shares of the Fund based on its trading volume and
market liquidity, and is generally less if the Fund has more trading volume and
market liquidity and more if the Fund has less trading volume and market
liquidity. Shares of the Fund may be acquired through the Distributor or
redeemed directly with the Fund only in Creation Units or multiples thereof, as
discussed in the “Creation and Redemption of Creation Units” section of the SAI.
Once created, shares of the Fund generally trade in the secondary market in
amounts less than a Creation Unit.
The
Fund’s primary listing exchange is the NASDAQ. The NASDAQ is open for trading
Monday through Friday and is closed on the following holidays: New Year’s Day,
Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day,
Juneteenth, Independence Day, Labor Day, Thanksgiving Day and Christmas
Day.
A
“Business Day” with respect to the Fund is each day the NASDAQ is open. Orders
from APs to create or redeem Creation Units will only be accepted on a Business
Day. On days when the NASDAQ closes earlier than normal, the Fund may require
orders to create or redeem Creation Units to be placed earlier in the day. In
addition, to minimize brokerage and other related trading costs associated with
securities that cannot be readily transferred in‑kind, the Fund may establish
early trade cut‑off times for APs to submit orders for Creation Units, in
accordance with the 1940 Act. See the SAI for more information.
In
compliance with the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA PATRIOT
Act”), your financial intermediary is required to verify certain information on
your account application as part of its Anti-Money Laundering Program. You will
be required to provide your full name, date of birth, social security number,
and permanent street address to assist in verifying your identity. You may also
be asked to provide additional documents that may help to establish your
identity. Until verification of your identity is made, your financial
intermediary may temporarily limit additional share purchases. In addition, your
financial intermediary may close an account if it is unable to verify your
identity. Please contact your financial intermediary if you need additional
assistance when completing your application or additional information about your
financial intermediary’s Anti-Money Laundering Program.
In
an effort to ensure compliance with this law, the Adviser’s Anti-Money
Laundering Program (the “Program”) provides for the development of internal
practices, procedures and controls, designation of anti-money laundering
compliance officers, an ongoing training program, and an independent audit
function to determine the effectiveness of the Program.
22½Janus Detroit Street Trust
Continuous
Offering
The
method by which Creation Units of shares are created and traded may raise
certain issues under applicable securities laws. Because new Creation Units of
shares are issued and sold by the Fund on an ongoing basis, a “distribution,” as
such term is used in the Securities Act of 1933, as amended (the “Securities
Act”), may occur at any point. Broker-dealers and other persons are cautioned
that some activities on their part may, depending on the circumstances, result
in their being deemed participants in a distribution in a manner which could
render them statutory underwriters and subject them to the prospectus delivery
requirements and liability provisions of the Securities Act. For example, a
broker-dealer firm or its client may be deemed a statutory underwriter if it
takes Creation Units after placing an order with the Distributor, breaks them
down into constituent shares and sells the shares directly to customers or if it
chooses to couple the creation of a supply of new shares with an active selling
effort involving solicitation of secondary market demand for shares. A
determination of whether one is an underwriter for purposes of the Securities
Act must take into account all the facts and circumstances pertaining to the
activities of the broker-dealer or its client in the particular case, and the
examples mentioned above should not be considered a complete description of all
the activities that could lead to a characterization as an underwriter.
Broker-dealer
firms should also note that dealers who are not “underwriters” but are effecting
transactions in shares, whether or not participating in the distribution of
shares, are generally required to deliver a prospectus. This is because the
prospectus delivery exemption in Section 4(a)(3)(C) of the Securities Act
is not available in respect of such transactions as a result of
Section 24(d) of the 1940 Act. As a result, broker-dealer firms should note
that dealers who are not “underwriters” but are participating in a distribution
(as contrasted with engaging in ordinary secondary market transactions) and thus
dealing with the shares that are part of an unsold allotment within the meaning
of Section 4(a)(3)(C) of the Securities Act, will be unable to take
advantage of the prospectus delivery exemption provided by Section 4(a)(3)
of the Securities Act. For delivery of prospectuses to exchange members, the
prospectus delivery mechanism of Rule 153 under the Securities Act is only
available with respect to transactions on a national exchange.
Book
Entry
Shares
of the Fund are held in book-entry form, which means that no stock certificates
are issued. The DTC or its nominee is the record owner of all outstanding shares
of the Fund and is recognized as the owner of all shares for all purposes.
Investors
owning shares of the Fund are beneficial owners as shown on the records of DTC
or its participants. DTC serves as the securities depository for shares of the
Fund. DTC participants include securities brokers and dealers, banks, trust
companies, clearing corporations and other institutions that directly or
indirectly maintain a custodial relationship with DTC. As a beneficial owner of
shares, you are not entitled to receive physical delivery of stock certificates
or to have shares registered in your name, and you are not considered a
registered owner of shares. Therefore, to exercise any right as an owner of
shares, you must rely upon the procedures of DTC and its participants. These
procedures are the same as those that apply to any other exchange-traded
securities that you hold in book-entry or “street name” form.
Share
Prices
The
trading prices of the Fund’s shares in the secondary market generally differ
from the Fund’s daily NAV per share and are affected by market forces such as
supply and demand, economic conditions, and other factors. Information regarding
the intra‑day net asset value of the Fund is disseminated every 15 seconds
throughout the trading day by the national securities exchange on which the
Fund’s shares are primarily listed or by market data vendors or other
information providers. The intra‑day net asset value calculations are estimates
of the value of the Fund’s NAV per Fund share based on the current market value
of the securities and/or cash included in the Fund’s intra‑day net asset value
basket. The intra‑day net asset value does not necessarily reflect the precise
composition of the current portfolio of securities and instruments held by the
Fund at particular point in time. Additionally, when current pricing is not
available for certain portfolio securities (including foreign securities and
certain debt securities), the intra‑day indicative value may not accurately
reflect the current market value of the Fund’s shares or the best possible
valuation of the current portfolio. For example, the intra‑day net asset value
is based on quotes and closing prices from the securities’ local market and may
not reflect events that occur subsequent to the local market’s close. Therefore,
the intra‑day net asset value should not be viewed as a “real-time” update of
the NAV, which is computed only once a day. The intra‑day net asset value is
generally determined by using both current market quotations and/or price
quotations obtained from broker-dealers that may trade in the portfolio
securities and instruments included in the Fund’s intra‑day net asset value
basket. The Fund is not involved in, or responsible for, the calculation or
dissemination of the intra‑day net asset value and makes no representation or
warranty as to its accuracy. An inaccuracy in the intra‑day net asset value
could result from various factors, including the difficulty of pricing portfolio
instruments on an intra‑day basis.
23½Janus Detroit Street Trust
Premiums
and Discounts
There
may be differences between the daily market prices on secondary markets for
shares of the Fund and the Fund’s NAV. NAV is the price per share at which the
Fund issues and redeems shares. See “Pricing of Fund Shares” above. The
price used to calculate market returns (“Market Price”) of the Fund generally is
determined using the midpoint between the highest bid and the lowest offer on
the national securities exchange on which shares of the Fund are primarily
listed for trading, as of the time that the Fund’s NAV is calculated. The Fund’s
Market Price may be at, above, or below its NAV. The NAV of the Fund will
fluctuate with changes in the market value of its portfolio holdings. The Market
Price of the Fund will fluctuate in accordance with changes in its NAV, as well
as market supply and demand.
Premiums
or discounts are the differences (expressed as a percentage) between the NAV and
the Market Price of the Fund on a given day, generally at the time the NAV is
calculated. A premium is the amount that the Fund is trading above the reported
NAV, expressed as a percentage of the NAV. A discount is the amount that the
Fund is trading below the reported NAV, expressed as a percentage of the NAV. A
discount or premium could be significant. Information regarding the Fund’s
premium/discount to NAV for the most recently completed calendar year and the
most recently completed calendar quarters since that year end (or the life of
the Fund, if shorter) is available at janushenderson.com/performance by
selecting the Fund for additional details.
Bid/Ask
Spread
Investors
purchasing or selling shares of the Fund in the secondary market may incur costs
attributable to the difference between the highest price a buyer is willing to
pay to purchase shares of the Fund (the “bid”) and the lowest price a seller is
willing to accept for shares of the Fund (the “ask”). The spread varies over
time for shares of the Fund based on its trading volume and market liquidity,
and is generally less if the Fund has more trading volume and market liquidity
and more if the Fund has less trading volume and market liquidity. Historical
information regarding the Fund’s spread over various periods of time can be
accessed at janushenderson.com/performance by selecting the Fund for additional
details.
Investments
by Other Investment Companies
The
Trust and the Fund are part of the Janus Henderson family of funds and are
related for purposes of investor and investment services, as defined in
Section 12(d)(1)(G) of the 1940 Act.
Under
the 1940 Act, purchases or acquisitions by the Fund of shares issued by
registered investment companies (including other ETFs) and business development
companies (“BDCs”) and the purchase or acquisition of Fund shares by registered
investment companies, BDCs, and investment vehicles relying on Section 3(c)(1)
or 3(c)(7) of the 1940 Act are subject to the restrictions set forth in Section
12(d)(1) of the 1940 Act, except where an exemption is available, including as
provided in Sections 12(d)(1)(F) and (G) and Rule 12d1-4 thereunder. Rule 12d1-4
permits registered investment companies and BDCs to invest in Fund shares beyond
the limits in Section 12(d)(1)(A), subject to certain terms and conditions,
including that the registered investment company or BDC first enter into a
written agreement with the Trust regarding the terms of the investment, among
other conditions.
Frequent
trading of Fund shares does not disrupt portfolio management, increase the
Fund’s trading costs, lead to realization of capital gains by the Fund, or
otherwise harm Fund shareholders. The vast majority of trading in Fund shares
occurs on the secondary market. Because these trades do not involve the Fund,
they do not harm the Fund or its shareholders. A few institutional investors are
authorized to purchase and redeem Fund shares directly with the Fund. Because
these trades typically are effected in kind (i.e., for securities and not for
cash), they do not cause any of the harmful effects to the issuing fund (as
previously noted) that may result from frequent cash trades. For these reasons,
the Trustees of the Fund have determined that it is not necessary to adopt
policies and procedures to detect and deter frequent trading and market timing
of Fund shares. However, the Fund’s policies and procedures regarding frequent
purchases and redemptions may be modified by the Trustees at any time.
|
FUND WEBSITE & AVAILABILITY OF PORTFOLIO HOLDINGS INFORMATION |
Each
Business Day, the Fund’s portfolio holdings information is provided by its
custodian or other agent for dissemination through the facilities of the NSCC
and/or other fee‑based subscription services to NSCC members and/or subscribers
to entities that publish and/or analyze such information in connection with the
process of purchasing or redeeming Creation Units or trading shares of the Fund
in the secondary market. In addition, on each Business Day before commencement
of trading in
24½Janus Detroit Street Trust
shares
on the NASDAQ, the Fund will disclose on janushenderson.com/info the identities
and quantities of each portfolio position held by the Fund that will form the
basis for the Fund’s next calculation of the NAV. The Fund is also required
to
disclose
its complete holdings as an exhibit to its reports on Form N‑PORT within
60 days of the end of the first and third fiscal quarters, and in the
annual report and semiannual report to Fund shareholders.
For
additional information on these disclosures and the availability of portfolio
holdings information, please refer to the Fund’s SAI.
|
SHAREHOLDER COMMUNICATIONS |
Statements
and Reports
Your
financial intermediary or plan sponsor is responsible for sending you periodic
statements of all transactions, along with trade confirmations and tax
reporting, as required by applicable law.
Your
financial intermediary or plan sponsor is responsible for providing annual and
semiannual reports, including the financial statements of the Fund. These
reports show the Fund’s investments and the market value of such investments, as
well as other information about the Fund and its operations. Please contact your
financial intermediary or plan sponsor to obtain these reports. The Fund’s
fiscal year ends October 31.
Lost
(Unclaimed/Abandoned) Accounts
It
is important to maintain a correct address for each shareholder. An incorrect
address may cause a shareholder’s account statements and other mailings to be
returned as undeliverable. Based upon statutory requirements for returned mail,
your financial intermediary or plan sponsor is required to attempt to locate the
shareholder or rightful owner of the account. If the financial intermediary or
plan sponsor is unable to locate the shareholder, then the financial
intermediary or plan sponsor is legally obligated to deem the property
“unclaimed” or “abandoned,” and subsequently escheat (or transfer) unclaimed
property (including shares of a fund) to the appropriate state’s unclaimed
property administrator in accordance with statutory requirements. Further, your
account may be deemed “unclaimed” or “abandoned,” and subsequently transferred
to your state of residence if no activity (as defined by that state) occurs
within your account during the time frame specified in your state’s unclaimed
property laws. The shareholder’s last known address of record determines which
state has jurisdiction. Interest or income is not earned on redemption or
distribution check(s) sent to you during the time the check(s) remained
uncashed.
25½Janus Detroit Street Trust
FINANCIAL
HIGHLIGHTS
The
financial highlights table is intended to help you understand the Fund’s
financial performance for each fiscal period shown. Items “Net asset value,
beginning of period” through “Net asset value, end of period” reflect financial
results for a single Fund share. The information for the fiscal periods shown
has been audited by PricewaterhouseCoopers LLP, whose report, along with the
Fund’s financial statements, is included in the Annual Report, which is
available upon request, and incorporated by reference into the SAI.
The
total returns in the table represent the rate that an investor would have earned
(or lost) on an investment in the Fund (assuming reinvestment of all dividends
and distributions).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a
share outstanding during each year or period ended October 31 |
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
2018 |
|
|
2017 |
|
Net
Asset Value, Beginning of Period |
|
|
$52.35 |
|
|
|
$44.11 |
|
|
|
$40.81 |
|
|
|
$36.77 |
|
|
|
$28.82 |
|
|
|
|
|
|
|
Income/(Loss) from Investment
Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income/(loss)(1) |
|
|
0.21 |
|
|
|
0.11 |
|
|
|
0.19 |
|
|
|
0.15 |
|
|
|
0.10 |
|
Net
realized and unrealized gain/(loss) |
|
|
15.38 |
|
|
|
8.26 |
|
|
|
3.30 |
|
|
|
4.03 |
|
|
|
7.99 |
|
Total
from Investment Operations |
|
|
15.59 |
|
|
|
8.37 |
|
|
|
3.49 |
|
|
|
4.18 |
|
|
|
8.09 |
|
|
|
|
|
|
|
Less Dividends and
Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
(from net investment income) |
|
|
(0.21) |
|
|
|
(0.13) |
|
|
|
(0.19) |
|
|
|
(0.14) |
|
|
|
(0.14) |
|
Total
Dividends and Distributions |
|
|
(0.21) |
|
|
|
(0.13) |
|
|
|
(0.19) |
|
|
|
(0.14) |
|
|
|
(0.14) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Asset Value, End of Period |
|
|
$67.73 |
|
|
|
$52.35 |
|
|
|
$44.11 |
|
|
|
$40.81 |
|
|
|
$36.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Return |
|
|
29.81% |
|
|
|
19.01% |
|
|
|
8.60% |
|
|
|
11.37% |
|
|
|
28.14% |
|
Net
assets, End of Period (in thousands) |
|
|
$201,635 |
|
|
|
$115,268 |
|
|
|
$97,121 |
|
|
|
$51,099 |
|
|
|
$22,138 |
|
Average
Net Assets for the Period (in thousands) |
|
|
$174,649 |
|
|
|
$105,905 |
|
|
|
$71,903 |
|
|
|
$36,173 |
|
|
|
$16,594 |
|
Ratios
to Average Net Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio
of Gross Expenses |
|
|
0.30% |
|
|
|
0.32% |
|
|
|
0.35% |
|
|
|
0.50% |
|
|
|
0.50% |
|
Ratio
of Net Investment Income/(Loss) |
|
|
0.33% |
|
|
|
0.23% |
|
|
|
0.43% |
|
|
|
0.37% |
|
|
|
0.31% |
|
Portfolio
Turnover Rate(2) |
|
|
102% |
|
|
|
83% |
|
|
|
80% |
|
|
|
79% |
|
|
|
76% |
|
(1) |
Per
share amounts are calculated based on average shares outstanding during
the year or period. |
(2) |
Portfolio
turnover rate excludes securities received or delivered from in‑kind
processing of creation or redemptions. |
26½Janus Detroit Street Trust
You
can make inquiries and request other information, including a Statement of
Additional Information, annual report, or semiannual report (as they become
available), free of charge, by contacting your plan sponsor, broker-dealer, or
financial intermediary, or by contacting a representative at 800‑668‑0434. The
Fund’s Statement of Additional Information and most recent annual and semiannual
reports are also available, free of charge, at janushenderson.com/info.
Additional information about the Fund’s investments is available in the Fund’s
annual and semiannual reports. In the Fund’s annual and semiannual reports, you
will find a discussion of the market conditions and investment strategies that
significantly affected the Fund’s performance during its last fiscal period.
Other information is also available from financial intermediaries that sell
shares of the Fund.
The
Statement of Additional Information provides detailed information about the Fund
and is incorporated into this Prospectus by reference. Reports and other
information about the Fund are available on the Electronic Data Gathering
Analysis and Retrieval (EDGAR) Database on the SEC’s website at
http://www.sec.gov. You may obtain copies of this information, after paying a
duplicating fee, by electronic request at the following e‑mail address:
[email protected].
janushenderson.com/info
151
Detroit Street
Denver,
CO 80206-4805
800‑668‑0434
The
Trust’s Investment Company Act File No. is 811‑23112.