February 28,
2023
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Ticker |
Sustainable
Equity |
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Janus
Henderson International Sustainable Equity ETF |
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SXUS |
Principal
U.S. Listing Exchange: NYSE Arca, Inc. |
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Janus
Henderson Net Zero Transition Resources ETF |
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JZRO |
Principal
U.S. Listing Exchange: NYSE Arca, Inc. |
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Janus
Henderson U.S. Sustainable Equity ETF |
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SSPX |
Principal
U.S. Listing Exchange: NYSE Arca, Inc. |
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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 three portfolios (each, a “Fund” and collectively, the
“Funds”) of Janus Detroit Street Trust (the “Trust”). Janus Henderson Investors
US LLC (the “Adviser”) serves as investment adviser to the Funds.
Shares
of each Fund are not individually redeemable and the owners of Fund shares may
purchase or redeem shares from each 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 (sometimes referred to as
the “NAV”).
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1
½Janus Detroit Street Trust
FUND SUMMARY
Janus
Henderson International Sustainable Equity ETF
Ticker: SXUS
Janus Henderson International Sustainable Equity
ETF seeks long-term growth of capital.
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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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0.60% |
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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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0.60% |
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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
$10,000 in the Fund for the time periods indicated and then sell all of your
shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund’s operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
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1 Year |
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3 Years |
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5 Years |
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10 Years |
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$ |
61 |
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$ |
192 |
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$ |
335 |
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$ |
750 |
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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 7% of the average value of its
portfolio.
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PRINCIPAL INVESTMENT STRATEGY |
The
Fund pursues its investment objective by investing, under normal circumstances,
at least 80% of its net assets (plus any borrowings for investment purposes) in
equity securities. The Fund seeks to invest in companies whose products and
services are considered by the Adviser as contributing to positive environmental
or social change and sustainable economic development, including those that are
strategically aligned with environmental and social megatrends such as climate
change, resource constraints, growing populations, and aging populations.
The
Fund primarily invests in equity securities of companies that are economically
tied to countries outside of the United States, including investments in
emerging markets. A security is deemed to be economically tied to a country or
countries if one or more of the following tests are met: (i) the company is
organized in, or its primary business office or principal trading market of its
equity is located in, the country; (ii) a majority of the company’s
revenues are derived from one or more countries; or (iii) a majority of the
company’s assets are located in one or more countries. The Fund’s investments
may be in non-U.S. currency or U.S.
dollar-denominated.
The
Fund generally invests in a core group of 30-50 equity securities, which consist
primarily of common stocks, but may also include other types of instruments,
such as warrants. The Fund may also invest in equity securities of real
estate-related companies, including real estate investment trusts (“REITs”) and
similar REIT-like entities. The Fund will invest primarily in larger,
well-established companies but may also invest in mid- and small-sized
companies. The Fund’s uninvested assets may be held in cash, cash equivalents,
and/or affiliated or unaffiliated exchange-traded funds
(“ETFs”).
2½Janus Henderson International
Sustainable Equity ETF
The
Fund is “actively managed” and does not seek to replicate the composition or
performance of an index. In selecting investments, the portfolio managers employ
a “bottom-up” approach that focuses on fundamental research. To identify the
universe of investible securities for the Fund, the portfolio managers first
employ positive selection criteria to identify companies that fall within at
least one of ten environmental and social themes. Environmental themes include
efficiency, cleaner energy, water management, environmental services, and
sustainable transport. Social themes include sustainable property and finance,
safety, quality of life, knowledge and technology, and
health.
Next,
the portfolio managers apply broad-based negative screens, which incorporate
third-party inputs, to seek to avoid securities of issuers that, in the
determination of the Adviser, are significantly engaged in or derive more than
de minimis revenue from industries, activities, or assets considered by the
portfolio managers to have a negative impact on society or the environment. A
current list of such activities, which may evolve over time,
follows:
• |
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animal
testing
(non-medical); |
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fossil
fuel extraction and
refining; |
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fossil
fuel power
generation; |
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meat
and dairy
production; |
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United
Nations Global Compact and Organization for Economic Co-operation and
Development
violators. |
In
selecting investments, the portfolio managers will then consider, among other
factors, a company’s growth potential, competitive positioning, operational
quality, and strategy. The portfolio managers may also consider factors such as
a company’s historic and projected return on capital, balance sheets, and
financial models. The portfolio managers will also consider environmental,
social, and governance (“ESG”) factors including, but not limited to, climate
change, deforestation, biodiversity, human rights, company culture, and
community relations, board structure and diversity, executive pay, and corporate
reporting.
The
portfolio managers seek to maintain a portfolio of securities that has a carbon
footprint and carbon intensity that is at least 20% below the MSCI All Country
World ex-USA IndexSM. At
the portfolio managers’ discretion, the Fund will engage with a company’s
management regarding matters that may evolve over time and may include
shareholder rights, governance and remuneration, climate change, carbon
emissions, pollution, biodiversity, human capital, and diversity and
inclusion.
The
portfolio managers evaluate and apply ESG and sustainable investment criteria
relying on a mix of third-party data and internally-generated analyses based on
information that may include web-based research reports from a company or
independent sources, as well as corporate engagement. The portfolio managers do
not apply ESG and sustainable investment criteria in managing the Fund’s
exposure to cash and cash equivalents. The Fund will generally consider selling
a stock if, in the portfolio managers’ opinion, there has been a regulatory,
industry, or position-level change that may impair a company’s revenue growth.
The Fund will also consider selling a stock if, in the portfolio managers’
opinion, the company’s business model no longer meets the sustainable investment
criteria employed in managing the Fund.
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PRINCIPAL INVESTMENT RISKS |
The biggest risk is that the Fund’s returns will vary,
and you could lose money. The Fund invests primarily in
common stocks, which tend to be more volatile than many other investment
choices. The principal risks associated with investing in the Fund are set forth
below.
Market
Risk. The value of the Fund’s portfolio may decrease
due to short-term market movements and over more prolonged market downturns. As
a result, the Fund’s net asset value (“NAV”) may decrease. Market risk may
affect a single issuer, industry, economic sector, or the market as a whole.
Market risk may be magnified if certain social, political, economic, and other
conditions
3½Janus Henderson International
Sustainable Equity ETF
and
events (such as terrorism, conflicts, including related sanctions, social
unrest, natural disasters, epidemics and pandemics, including COVID-19)
adversely interrupt the global economy and financial markets. 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.
Sustainable
Investment Risk. The Fund follows a sustainable
investment approach by investing in companies that relate to certain sustainable
development themes and demonstrate adherence to ESG practices. Accordingly, the
Fund may have a significant portion of its assets invested in securities of
companies conducting similar business or businesses within the same economic
sector, which may make the Fund more vulnerable to unfavorable developments in a
particular sector than funds that invest more broadly. Additionally, due to its
exclusionary criteria, the Fund may not be invested in certain industries or
sectors, and therefore may have lower performance than portfolios that do not
apply similar criteria. In addition, because sustainable and ESG investing takes
into consideration factors beyond traditional financial analysis, the investment
opportunities for the Fund may be limited at times. Sustainability and
ESG-related information provided by issuers and third parties, upon which the
portfolio managers may rely, continues to develop, and may be incomplete,
inaccurate, use different methodologies, or be applied differently across
companies and industries. Further, the regulatory landscape for sustainable and
ESG investing in the United States is still developing and future rules and
regulations may require the Fund to modify or alter its investment process.
Similarly, government policies incentivizing companies to engage in sustainable
and ESG practices may fall out of favor, which could potentially limit the
Fund’s investment universe. There is also a risk that the companies identified
through the investment process may fail to adhere to sustainable and/or
ESG-related business practices, which may result in the Fund selling a security
when it might otherwise be disadvantageous to do
so.
Industry and Sector
Risk. Although the Fund does not concentrate its
investments in specific industries or industry sectors, it emphasizes certain
themes and megatrends. As a result, at times, it may have a significant portion
of its assets invested in securities of companies conducting similar business or
businesses within the same economic sector or that benefit from the same
megatrend. Companies in the same industry or economic sector or that benefit
from the same theme may be similarly affected by economic or market events,
making the Fund more vulnerable to unfavorable developments than funds that
invest more broadly. As the Fund’s portfolio becomes more concentrated, the Fund
is less able to spread risk and potentially reduce the risk of loss and
volatility.
Issuer Concentration
Risk. The Fund’s portfolio may be comprised of a
relatively small number of issuers in comparison to other funds. As a result,
the Fund may be subject to greater risks than a fund that invests in a greater
number of issuers. A change in the value of any single investment held by the
Fund may affect the overall value of the Fund more than it would affect a fund
that holds more investments. In particular, the Fund may be more susceptible to
adverse developments affecting any single issuer held by the Fund and may be
susceptible to greater losses because of these
developments.
Geographic
Concentration Risk. To the extent the Fund invests a
substantial amount of its assets in issuers located in a single country or
region, the economic, political, social, regulatory, or other developments or
conditions within such country or region will generally have a greater effect on
the Fund than they would on a more geographically diversified fund, which may
result in greater losses and volatility. Adverse developments in certain regions
could also adversely affect securities of other countries whose economies appear
to be unrelated and could have a negative impact on the Fund’s
performance.
Currency
Risk. Currency risk is the risk that changes in the
exchange rate between currencies will adversely affect the value (in U.S. dollar
terms) of an investment. As long as the Fund holds a foreign security, its value
will be affected by the value of the local currency relative to the U.S. dollar.
When the Fund sells a foreign currency denominated security, its value may be
worth less in U.S. dollars even if the security increases in value in its home
country. U.S. dollar-denominated securities of foreign issuers may also be
affected by currency risk, as the value of these securities may also be affected
by changes in the issuer’s local currency.
Foreign Exposure
Risk. Foreign securities, including emerging markets,
can be more volatile than the U.S. markets. As a result, the Fund’s returns and
NAV may be affected by fluctuations in currency exchange rates or political or
economic conditions in a particular country. In some foreign markets, there may
not be protection against failure by other parties to complete transactions. It
may not be possible for the Fund to repatriate capital, dividends, interest, and
other income from a particular country or governmental entity. In addition,
a market swing in one or more countries or regions where the Fund has invested a
significant amount of its assets may have a greater effect on the Fund’s
performance than it would in a more geographically diversified portfolio. The
Fund’s investments in emerging market countries, if any, may involve risks
greater than, or in addition to, the risks of investing in more developed
countries.
4½Janus Henderson International
Sustainable Equity ETF
Emerging Markets
Risk. The risks of foreign investing are heightened
when investing in emerging markets. Emerging markets securities involve a number
of additional risks, which may result from less government supervision and
regulation of business and industry practices (including the potential lack of
strict finance and accounting controls and standards), stock exchanges, brokers,
and listed companies, making these investments potentially more volatile in
price and less liquid than investments in developed securities markets,
resulting in greater risk to investors. There is a risk in developing countries
that a current or future economic or political crisis could lead to price
controls, forced mergers of companies, expropriation or confiscatory taxation,
imposition or enforcement of foreign ownership limits, seizure, nationalization,
sanctions or imposition of restrictions by various governmental entities on
investment and trading, or creation of government monopolies, any of which may
have a detrimental effect on the Fund’s investments. In addition, the Fund’s
investments may be denominated in foreign currencies and therefore, changes in
the value of a country’s currency compared to the U.S. dollar may affect the
value of the Fund’s investments. To the extent that the Fund invests a
significant portion of its assets in the securities of emerging markets issuers
in or companies of a single country or region, it is more likely to be impacted
by events or conditions affecting that country or region, which could have a
negative impact on the Fund’s performance. Additionally, foreign and emerging
market risks, including but not limited to price controls, expropriation or
confiscatory taxation, imposition or enforcement of foreign ownership limits,
nationalization, and restrictions on repatriation of assets may be heightened to
the extent the Fund invests in Chinese local market
securities.
Portfolio Management
Risk. The Fund is an actively managed investment
portfolio and is therefore subject to the risk that the portfolio managers may
not be successful in identifying investment opportunities that are aligned with
the sustainable investment approach that the Fund employs. The Fund may
underperform its benchmark index or other funds with similar investment
objectives.
Small- and Mid-Sized
Companies Risk. 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 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 or more established
companies.
Liquidity
Risk. The Fund may invest in securities or instruments
that do not trade actively or in large volumes, and may make investments that
are less liquid than other investments. Also, the Fund may make investments that
may become less liquid in response to market developments or adverse investor
perceptions. Investments that are illiquid or that trade in lower volumes may be
more difficult to value. When there is no willing buyer and investments cannot
be readily sold at the desired time or price, the Fund may have to accept a
lower price or may not be able to sell the security or instrument at all.
Investments in foreign securities, particularly those of issuers located in
emerging market countries, tend to have greater exposure to liquidity risk than
domestic securities. In unusual market conditions, even normally liquid
securities may be affected by a degree of liquidity risk (i.e., if the number
and capacity of traditional market participants is reduced). An inability to
sell one or more portfolio positions can adversely affect the Fund’s value or
prevent the Fund from being able to take advantage of other investment
opportunities.
REIT
Risk. REITs are subject to certain risks inherent in
the direct ownership of real estate, including without limitation, a possible
lack of mortgage funds and associated interest rate risks, overbuilding,
property vacancies, increases in property taxes and operating expenses, changes
in zoning laws, losses due to environmental damages and changes in neighborhood
values and appeal to purchasers. In addition, a REIT could fail to
qualify for tax-free pass-through of its income under the Internal Revenue Code
of 1986, as amended, or fail to maintain its exemption from registration under
the Investment Company Act of 1940, as amended, which could produce adverse
economic consequences for the REIT and its investors, including the
Fund.
Exchange-Traded Funds
Risk. The Fund may invest in ETFs for temporary
liquidity purposes, to manage duration and cash positioning, and/or for other
purposes. ETFs are typically open-end investment companies which may
seek to track the performance of a specific index or be actively managed. ETFs
are traded on a national securities exchange at market prices that may vary from
the NAV of their underlying investments. Accordingly, there may be times when an
ETF trades at a premium or discount to its NAV. As a result, the Fund may pay
more or less than NAV when it buys ETF shares, and may receive more or less than
NAV when it sells those shares. When the Fund invests in an ETF, in addition to
directly bearing the expenses associated with its own operations, it will also
bear a pro rata portion of the ETF’s expenses. Additionally, when purchasing or
selling shares of an ETF, the Fund may pay commissions or other trading costs as
part of the transaction. The Fund is also subject to the risks associated with
the securities in which the ETF invests.
5½Janus Henderson International
Sustainable Equity ETF
Smaller Sized Fund
Risk. Because the Fund has a small asset base, large
inflows and outflows may have a disproportionate impact, negative or positive,
on the Fund’s performance, which may be more volatile than that of a larger
fund. If a smaller fund were to fail to attract sufficient assets to achieve or
maintain economies of scale, performance may be negatively impacted, and any
resulting liquidation could create negative transaction costs for the Fund and
tax consequences for
investors.
Exchange Listing and
Trading Issues Risk. Although Fund shares are listed
for trading on the NYSE Arca, Inc. (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 prices 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.
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 period
indicated. The table compares the Fund’s average
annual returns for the periods indicated to a broad-based securities market
index. The index is not available for direct investment. All figures assume
reinvestment of dividends and distributions and include the effect of the Fund’s
recurring expenses.
6½Janus Henderson International
Sustainable Equity ETF
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 1-800-668-0434.
Janus
Henderson International Sustainable Equity ETF
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Annual Total Returns (calendar
year-end) |
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Best
Quarter: 4th Quarter 2022 13.18% Worst
Quarter: 2nd Quarter
2022 – 15.72% |
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Average
Annual Total Returns (periods ended 12/31/22) |
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1 Year |
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Since Inception
09/09/21 |
|
Janus Henderson International Sustainable Equity
ETF |
|
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Return Before
Taxes |
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– 25.94 |
% |
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– 26.87 |
% |
Return After Taxes on
Distributions |
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– 26.02 |
% |
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– 26.93 |
% |
Return After Taxes on Distributions and
Sale of Fund Shares(1) |
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– 15.07 |
% |
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– 20.11 |
% |
MSCI All Country World ex-USA
Index(2) (reflects no
deductions for fees, expenses or taxes) |
|
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– 16.00 |
% |
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– 13.96 |
% |
(1) |
If the Fund incurs a
loss, which generates a tax benefit, the Return After Taxes on
Distributions and Sale of Fund Shares may exceed the Fund’s other return
figures. |
(2) |
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 in the table
above are calculated using the historical highest individual U.S. federal
marginal income tax rates and do not reflect the impact of state or 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: Hamish
Chamberlayne, CFA, is Co-Portfolio Manager of the Fund, which he has
co-managed since inception. Aaron
Scully, CFA, is Co-Portfolio Manager of the Fund, which he has co-managed
since inception.
|
PURCHASE AND SALE OF FUND SHARES |
The
Fund is an actively-managed ETF. 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. 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. Creation Unit transactions
are conducted in exchange for the deposit or delivery of a designated portfolio
of in-kind securities with a cash balancing amount and/or all cash. 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 Exchange, 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.
7½Janus Henderson International
Sustainable Equity ETF
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.
8½Janus Henderson International
Sustainable Equity ETF
FUND SUMMARY
Janus
Henderson Net Zero Transition Resources ETF
Ticker: JZRO
Janus Henderson Net Zero Transition Resources
ETF seeks long-term growth of capital.
|
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.
|
|
|
| |
ANNUAL FUND OPERATING
EXPENSES (expenses that you pay each year as a percentage of the
value of your investment) |
|
Management
Fees |
|
|
0.60% |
|
Other
Expenses |
|
|
0.00% |
|
Acquired
Fund Fees and Expenses(1) |
|
|
0.01% |
|
Total
Annual Fund Operating Expenses |
|
|
0.61% |
|
(1) |
Acquired Fund
Fees and Expenses are indirect fees and expenses that the Fund incurs from
investing in other investment companies. To the extent that the Fund
invests in Acquired Funds, the Fund’s “Total Annual Fund Operating
Expenses” may not correlate to the “Ratio of gross expenses to average net
assets” presented in the “Financial Highlights” table because that ratio
includes only the direct operating expenses incurred by the Fund, not the
indirect costs of investing in Acquired
Funds. |
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
1 Year |
|
|
3 Years |
|
|
5 Years |
|
|
10 Years |
|
| |
$ |
62 |
|
|
$ |
195 |
| |
$ |
340 |
|
|
$ |
762 |
|
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 74% of the average value of its
portfolio.
|
PRINCIPAL INVESTMENT STRATEGY |
The
Fund pursues its investment objective by investing, under normal circumstances,
at least 80% of its net assets (plus any borrowings for investment purposes) in
equity securities of companies whose products, services and activities are
considered by the Adviser as contributing to or benefiting from the goal of
achieving “net zero” carbon emissions through the decarbonization of the global
economy, such as carbon reduction, energy transition, sustainable mobility,
sustainable industry, and sustainable agriculture. The Fund generally will
invest in global companies, primarily in the materials, energy, utility,
agricultural, industrial and consumer staple sectors. The Fund seeks to invest
in companies that are involved in the production and utilization of resources,
equipment and/or commodity-related products that the Adviser believes are
necessary to enable a transition to a low-carbon global economy and that the
Adviser believes are well-positioned to benefit from ongoing and future demand
for natural resources.
The
Fund generally invests in a core group of 35-60 equity securities of
companies of any size, from larger, well-established companies to
smaller, emerging growth companies. The Fund is classified as non-diversified,
which allows it to hold larger positions in securities, compared to a fund that
is classified as diversified. The securities in which the Fund invest may
include common stocks, preferred stocks, and depository receipts. The Fund may
invest in foreign securities, which may include investments in emerging
markets. The Fund’s uninvested assets may be held in cash, cash equivalents,
and/or affiliated or unaffiliated exchange-traded funds
(“ETFs”).
9½Janus Henderson Net Zero Transition
Resources ETF
The
Fund is “actively managed” and does not seek to replicate the composition or
performance of an index. In deciding to add or reduce portfolio positions,
the portfolio managers employ a “bottom-up” approach that focuses on fundamental
research and considers, among other factors, a company’s growth potential,
competitive positioning and operational quality, return on capital, risk
profile, and strategy. Except as noted below, in selecting each investment, the
portfolio managers will also consider environmental, social, and governance
(“ESG”) factors such as carbon footprint, corporate governance, human capital
and diversity, and business ethics. The portfolio managers evaluate and apply
ESG factors relying on a mix of third-party data and internally-generated
analyses based on information that may include web-based research reports from a
company or independent sources, as well as corporate engagement, and may sell a
portfolio position if, in the portfolio managers’ opinion, the company’s
business model no longer satisfies the ESG factors. The portfolio managers do
not apply the ESG factors in managing the Fund’s cash and cash
equivalents.
To
identify the universe of investible securities for the Fund, the portfolio
managers first apply broad-based negative screens, which incorporate third-party
inputs, to seek to avoid securities of issuers that, in the determination of the
Adviser, are significantly engaged in or derive more than de minimis revenue
from industries, activities, or assets considered by the portfolio managers to
have a negative impact on society or the environment. A current list of such
activities, which may evolve over time, follows:
• |
|
animal
testing
(cosmetic); |
• |
|
controversial
fossil fuel power
generation; |
• |
|
controversial
fossil fuel extraction and
refining; |
• |
|
United
Nations Global Compact
violators. |
|
PRINCIPAL INVESTMENT RISKS |
The biggest risk is that the Fund’s returns will vary,
and you could lose money. The Fund invests primarily in
common stocks, which tend to be more volatile than many other investment
choices. The principal risks and special considerations associated with
investing in the Fund are set forth below.
Market
Risk. The value of the Fund’s portfolio may decrease
due to short-term market movements and over more prolonged market downturns. As
a result, the Fund’s net asset value (“NAV”) may decrease. Market risk may
affect a single issuer, industry, economic sector, or the market as a whole.
Market risk may be magnified if certain social, political, economic, and other
conditions and events (such as terrorism, conflicts, including related
sanctions, social unrest, natural disasters, epidemics and pandemics, including
COVID-19) adversely interrupt the global economy and financial markets. 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.
Natural Resources
Investment Risk. Investment in companies in natural
resources industries (including those in the energy sector) can be
significantly affected by (often rapid) changes in supply of, or demand
for, various natural resources. They may also be affected by changes in energy
prices, international political and economic developments, environmental
incidents, energy conservation, the success of exploration projects,
changes in commodity prices, and tax and other government regulations. For
example, the COVID-19 pandemic has drastically reduced the demand for various
natural resources and has drastically increased the price volatility of natural
resources and companies within the natural resources industry. An extended
period of reduced (or negative) prices may significantly lengthen the time
that companies within the natural resources industries would need
to recover after a stabilization of prices.
Industry and Sector
Risk. Although the Fund does not concentrate its
investments in specific industries or sectors, it may a significant portion of
its assets invested in securities of companies conducting similar business, or
business within the same economic sector. Companies in the same industry or
economic sector may be similarly affected by economic or market events, making
the Fund more vulnerable to unfavorable developments than funds that invest more
broadly. As the Fund’s portfolio becomes more concentrated, the Fund is less
able to spread risk and potentially reduce the risk of loss and volatility.
In
10½Janus Henderson Net Zero Transition
Resources ETF
addition,
the Fund may be overweight or underweight in certain industries or sectors
relative to its benchmark index, which may cause the Fund’s performance to be
more or less sensitive to developments affecting those
sectors.
• |
|
Industrials
Sector Risk. The industrials sector includes
companies in the capital goods, commercial and professional services and
transportation industry groups, including companies engaged in the
business of human capital management, business research and consulting,
air freight and logistics, airlines, maritime shipping and transportation,
railroads and trucking, transportation infrastructure, and aerospace and
defense. Companies in the industrials sector can be significantly affected
by general economic trends, including such factors as employment and
economic growth, interest rate changes, changes in consumer spending,
legislative and government regulation and spending, import controls,
commodity prices, and worldwide competition. Changes in the economy, fuel
prices, labor agreements, and insurance costs may result in occasional
sharp price movements in transportation
securities. |
Sustainable
Investment Risk. The Fund follows a sustainable
investment approach by investing in companies that relate to certain sustainable
development themes and demonstrate adherence to ESG practices. Accordingly, the
Fund may have a significant portion of its assets invested in securities of
companies conducting similar business or businesses within the same economic
sector, which may make the Fund more vulnerable to unfavorable developments in a
particular sector than funds that invest more broadly. Additionally, due to its
exclusionary criteria, the Fund may not be invested in certain industries or
sectors, and therefore may have lower performance than portfolios that do not
apply similar criteria. In addition, because sustainable and ESG investing takes
into consideration factors beyond traditional financial analysis, the investment
opportunities for the Fund may be limited at times. Sustainability and
ESG-related information provided by issuers and third parties, upon which the
portfolio managers may rely, continues to develop, and may be incomplete,
inaccurate, use different methodologies, or be applied differently across
companies and industries. Further, the regulatory landscape for sustainable and
ESG investing in the United States is still developing and future rules and
regulations may require the Fund to modify or alter its investment process.
Similarly, government policies incentivizing companies to engage in sustainable
and ESG practices may fall out of favor, which could potentially limit the
Fund’s investment universe. There is also a risk that the companies identified
through the investment process may fail to adhere to sustainable and/or
ESG-related business practices, which may result in the Fund selling a security
when it might otherwise be disadvantageous to do
so.
Portfolio Management
Risk. The Fund is an actively managed investment
portfolio and is therefore subject to the risk that the portfolio managers may
not be successful in identifying investment opportunities that are aligned with
the sustainable investment approach that the Fund employs. The Fund may
underperform its benchmark index or other funds with similar investment
objectives.
Issuer Concentration
Risk. The Fund’s portfolio may be comprised of a
relatively small number of issuers in comparison to other funds. As a result,
the Fund may be subject to greater risks than a fund that invests in a greater
number of issuers. A change in the value of any single investment held by the
Fund may affect the overall value of the Fund more than it would affect a fund
that holds more investments. In particular, the Fund may be more susceptible to
adverse developments affecting any single issuer held by the Fund and may be
susceptible to greater losses because of these
developments.
Small- and Mid-Sized
Companies Risk. 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 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 or more established
companies.
Currency
Risk. Currency risk is the risk that changes in the
exchange rate between currencies will adversely affect the value (in U.S. dollar
terms) of an investment. As long as the Fund holds a foreign security, its value
will be affected by the value of the local currency relative to the U.S. dollar.
When the Fund sells a foreign currency denominated security, its value may be
worth less in U.S. dollars even if the security increases in value in its home
country. U.S. dollar-denominated securities of foreign issuers may also be
affected by currency risk, as the value of these securities may also be affected
by changes in the issuer’s local currency.
Foreign Exposure
Risk. Foreign securities, including emerging markets,
can be more volatile than the U.S. markets. As a result, the Fund’s returns and
NAV may be affected by fluctuations in currency exchange rates or political or
economic conditions in a particular country. In some foreign markets, there may
not be protection against failure by other parties to complete transactions. It
may not be possible for the Fund to repatriate capital, dividends, interest, and
other income from a particular country or governmental entity. In addition,
a market swing in one or more countries or regions where the Fund has invested
a
11½Janus Henderson Net Zero Transition
Resources ETF
significant
amount of its assets may have a greater effect on the Fund’s performance than it
would in a more geographically diversified portfolio. The Fund’s investments in
emerging market countries, if any, may involve risks greater than, or in
addition to, the risks of investing in more developed
countries.
Nondiversification
Risk. The Fund is classified as nondiversified under
the Investment Company Act of 1940, as amended. This gives the Fund’s portfolio
managers more flexibility to hold larger positions in securities. As a result,
an increase or decrease in the value of a single security held by the Fund may
have a greater impact on the Fund’s NAV and total
return.
Smaller Sized Fund
Risk. Because the Fund has a small asset base, large
inflows and outflows may have a disproportionate impact, negative or positive,
on the Fund’s performance, which may be more volatile than that of a larger
fund. If a smaller fund were to fail to attract sufficient assets to achieve or
maintain economies of scale, performance may be negatively impacted, and any
resulting liquidation could create negative transaction costs for the Fund and
tax consequences for investors.
Exchange-Traded Funds
Risk. The Fund may invest in ETFs for temporary
liquidity purposes, to manage duration and cash positioning, and/or for other
purposes. ETFs are typically open-end investment companies which may
seek to track the performance of a specific index or be actively managed. ETFs
are traded on a national securities exchange at market prices that may vary from
the NAV of their underlying investments. Accordingly, there may be times when an
ETF trades at a premium or discount to its NAV. As a result, the Fund may pay
more or less than NAV when it buys ETF shares, and may receive more or less than
NAV when it sells those shares. When the Fund invests in an ETF, in addition to
directly bearing the expenses associated with its own operations, it will also
bear a pro rata portion of the ETF’s expenses. The Fund is also subject to the
risks associated with the securities in which the ETF
invests.
Exchange Listing and
Trading Issues Risk. Although Fund shares are listed
for trading on the NYSE Arca, Inc. (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 prices 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
12½Janus Henderson Net Zero Transition
Resources ETF
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.
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 period
indicated. The table compares the Fund’s average
annual returns for the periods indicated to a broad-based securities market
index. The index is 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 1-800-668-0434.
Janus
Henderson Net Zero Transition Resources ETF
|
Annual Total Returns (calendar
year-end) |
|
Best
Quarter: 4th Quarter 2022 15.47% Worst
Quarter: 2nd Quarter 2022 – 26.65% |
|
|
|
|
|
|
|
| |
Average
Annual Total Returns (periods ended 12/31/22) |
|
|
|
|
|
|
|
|
1 Year |
|
|
Since Inception
09/09/21 |
|
Janus Henderson Net Zero Transition Resources
ETF |
|
|
|
|
|
|
|
|
Return Before
Taxes |
|
|
– 9.12 |
% |
|
|
– 3.50 |
% |
Return After Taxes on
Distributions |
|
|
– 9.35 |
% |
|
|
– 3.97 |
% |
Return After Taxes on Distributions and
Sale of Fund Shares(1) |
|
|
– 5.11 |
% |
|
|
– 2.69 |
% |
S&P Global Natural Resources
Index(2) (reflects no
deductions for fees, expenses or taxes) |
|
|
9.59 |
% |
|
|
12.35 |
% |
(1) |
If the Fund incurs a
loss, which generates a tax benefit, the Return After Taxes on
Distributions and Sale of Fund Shares may exceed the Fund’s other return
figures. |
(2) |
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 in the table
above are calculated using the historical highest individual U.S. federal
marginal income tax rates and do not reflect the impact of state or 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.
13½Janus Henderson Net Zero Transition
Resources ETF
Investment Adviser: Janus Henderson
Investors US LLC
Portfolio Managers: Tim Gerrard is
Co-Portfolio Manager of the Fund, which he has co-managed since inception. Darko Kuzmanovic is Co-Portfolio Manager of the
Fund, which he has co-managed since inception. Tal Lomnitzer, CFA, is Co-Portfolio Manager of
the Fund, which he has co-managed since inception. Daniel Sullivan is Co-Portfolio Manager of the
Fund, which he has co-managed since inception.
|
PURCHASE AND SALE OF FUND SHARES |
The
Fund is an actively-managed ETF. 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. 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. Creation Unit transactions
are conducted in exchange for the deposit or delivery of a designated portfolio
of in-kind securities with a cash balancing amount and/or all cash. 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 Exchange, 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.
14½Janus Henderson Net Zero Transition
Resources ETF
FUND
SUMMARY
Janus
Henderson U.S. Sustainable Equity ETF
Ticker: SSPX
Janus Henderson U.S. Sustainable Equity
ETF seeks long-term growth of capital.
|
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.
|
|
|
| |
ANNUAL FUND OPERATING
EXPENSES (expenses that you pay each year as a percentage of the
value of your investment) |
|
Management
Fees |
|
|
0.55 |
% |
Other
Expenses |
|
|
0.00 |
% |
Total
Annual Fund Operating Expenses |
|
|
0.55 |
% |
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
1 Year |
|
|
3 Years |
|
|
5 Years |
|
|
10 Years |
|
| |
$ |
56 |
| |
$ |
176 |
| |
$ |
307 |
|
|
$ |
689 |
|
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 9% of the average value of its
portfolio.
|
PRINCIPAL INVESTMENT STRATEGY |
The
Fund pursues its investment objective by investing, under normal circumstances,
at least 80% of its net assets (plus any borrowings for investment purposes) in
equity securities that are economically tied to the United States. The Fund
seeks to invest in companies whose products and services are considered by the
Adviser as contributing to positive environmental or social change and
sustainable economic development, including those that are strategically aligned
with environmental and social megatrends such as climate change, resource
constraints, growing populations, and aging populations. A security is deemed to
be economically tied to the United States if one or more of the following tests
are met: (i) the company is organized in, or its primary business office or
principal trading market of its equity is located in the United States,
(ii) a majority of the company’s revenues are derived from the United
States or (iii) a majority of the company’s assets are located in the
United States.
The
Fund generally invests in a core group of 30-50 equity securities, which consist
primarily of common stocks, but may also include other types of instruments,
such as warrants. The Fund may also invest in equity securities of real
estate-related companies, including real estate investment trusts (“REITs”) and
similar REIT-like entities. The Fund will invest primarily in larger,
well-established companies but may also invest in mid- and small-sized
companies. The Fund’s uninvested assets may be held in cash, cash equivalents,
and/or affiliated or unaffiliated exchange-traded funds (“ETFs”).
The
Fund is “actively managed” and does not seek to replicate the composition or
performance of an index. In selecting investments, the portfolio managers employ
a “bottom-up” approach that focuses on fundamental research. To identify the
universe of investible securities for the Fund, the portfolio managers first
employ positive selection criteria to identify companies that fall within at
least one of ten environmental and social themes. Environmental themes include
efficiency, cleaner energy,
15½Janus Henderson U.S. Sustainable
Equity ETF
water
management, environmental services, and sustainable transport. Social themes
include sustainable property and finance, safety, quality of life, knowledge and
technology, and health.
Next,
the portfolio managers apply broad-based negative screens, which incorporate
third-party inputs, to seek to avoid securities of issuers that, in the
determination of the Adviser, are significantly engaged in or derive more than
de minimis revenue from industries, activities, or assets considered by the
portfolio managers to have a negative impact on society or the environment. A
current list of such activities, which may evolve over time,
follows:
• |
|
animal
testing
(non-medical); |
• |
|
fossil
fuel extraction and
refining; |
• |
|
fossil
fuel power
generation; |
• |
|
meat
and dairy
production; |
• |
|
United
Nations Global Compact and Organization for Economic Co-operation and
Development
violators. |
In
selecting investments, the portfolio managers will then consider, among other
factors, a company’s growth potential, competitive positioning, operational
quality, and strategy. The portfolio managers may also consider factors such as
a company’s historic and projected return on capital, balance sheets, and
financial models. The portfolio managers will also consider environmental,
social, and governance (“ESG”) factors including, but not limited to, climate
change, deforestation, biodiversity, human rights, company culture, and
community relations, board structure and diversity, executive pay, and corporate
reporting.
The
portfolio managers seek to maintain a portfolio of securities that has a carbon
footprint and carbon intensity that is at least 20% below the S&P 500® Index. At the portfolio
managers’ discretion, the Fund will engage with a company’s management regarding
matters that may evolve over time and may include shareholder rights, governance
and remuneration, climate change, carbon emissions, pollution, biodiversity,
human capital, and diversity and
inclusion.
The
portfolio managers evaluate and apply ESG and sustainable investment criteria
relying on a mix of third-party data and internally-generated analyses based on
information that may include web-based research reports from a company or
independent sources, as well as corporate engagement. The portfolio managers do
not apply ESG and sustainable investment criteria in managing the Fund’s
exposure to cash and cash equivalents. The Fund will generally consider selling
a stock if, in the portfolio managers’ opinion, there has been a regulatory,
industry, or position-level change that may impair a company’s revenue growth.
The Fund will also consider selling a stock if, in the portfolio managers’
opinion, the company’s business model no longer meets the sustainable investment
criteria employed in managing the Fund.
|
PRINCIPAL INVESTMENT RISKS |
The biggest risk is that the Fund’s returns will vary,
and you could lose money. The Fund invests primarily in
common stocks, which tend to be more volatile than many other investment
choices. The principal risks associated with investing in the Fund are set forth
below.
Market
Risk. The value of the Fund’s portfolio may decrease
due to short-term market movements and over more prolonged market downturns. As
a result, the Fund’s net asset value (“NAV”) may decrease. Market risk may
affect a single issuer, industry, economic sector, or the market as a whole.
Market risk may be magnified if certain social, political, economic, and other
conditions and events (such as terrorism, conflicts, including related
sanctions, social unrest, natural disasters, epidemics and pandemics, including
COVID-19) adversely interrupt the global economy and financial markets. 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.
16½Janus Henderson U.S. Sustainable
Equity ETF
Sustainable
Investment Risk. The Fund follows a sustainable
investment approach by investing in companies that relate to certain sustainable
development themes and demonstrate adherence to ESG practices. Accordingly, the
Fund may have a significant portion of its assets invested in securities of
companies conducting similar business or businesses within the same economic
sector, which may make the Fund more vulnerable to unfavorable developments in a
particular sector than funds that invest more broadly. Additionally, due to its
exclusionary criteria, the Fund may not be invested in certain industries or
sectors, and therefore may have lower performance than portfolios that do not
apply similar criteria. In addition, because sustainable and ESG investing takes
into consideration factors beyond traditional financial analysis, the investment
opportunities for the Fund may be limited at times. Sustainability and
ESG-related information provided by issuers and third parties, upon which the
portfolio managers may rely, continues to develop, and may be incomplete,
inaccurate, use different methodologies, or be applied differently across
companies and industries. Further, the regulatory landscape for sustainable and
ESG investing in the United States is still developing and future rules and
regulations may require the Fund to modify or alter its investment process.
Similarly, government policies incentivizing companies to engage in sustainable
and ESG practices may fall out of favor, which could potentially limit the
Fund’s investment universe. There is also a risk that the companies identified
through the investment process may fail to adhere to sustainable and/or
ESG-related business practices, which may result in the Fund selling a security
when it might otherwise be disadvantageous to do
so.
Industry and Sector
Risk. Although the Fund does not concentrate its
investments in specific industries or industry sectors, it emphasizes certain
themes and megatrends. As a result, at times, it may have a significant portion
of its assets invested in securities of companies conducting similar business or
businesses within the same economic sector or that benefit from the same
megatrend. Companies in the same industry or economic sector or that benefit
from the same megatrend may be similarly affected by economic or market events,
making the Fund more vulnerable to unfavorable developments than funds that
invest more broadly. As the Fund’s portfolio becomes more concentrated, the Fund
is less able to spread risk and potentially reduce the risk of loss and
volatility.
Issuer Concentration
Risk. The Fund’s portfolio may be comprised of a
relatively small number of issuers in comparison to other funds. As a result,
the Fund may be subject to greater risks than a fund that invests in a greater
number of issuers. A change in the value of any single investment held by the
Fund may affect the overall value of the Fund more than it would affect a fund
that holds more investments. In particular, the Fund may be more susceptible to
adverse developments affecting any single issuer held by the Fund and may be
susceptible to greater losses because of these
developments.
Portfolio
Management Risk. The Fund is
an actively managed investment portfolio and is therefore subject to the risk
that the portfolio managers may not be successful in identifying investment
opportunities that are aligned with the sustainable investment approach that the
Fund employs. The Fund may underperform its benchmark index or other funds with
similar investment objectives.
Small- and Mid-Sized
Companies Risk. 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 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 or more established
companies.
Liquidity
Risk. The Fund may invest in securities or instruments
that do not trade actively or in large volumes, and may make investments that
are less liquid than other investments. Also, the Fund may make investments that
may become less liquid in response to market developments or adverse investor
perceptions. Investments that are illiquid or that trade in lower volumes may be
more difficult to value. When there is no willing buyer and investments cannot
be readily sold at the desired time or price, the Fund may have to accept a
lower price or may not be able to sell the security or instrument at all.
Investments in foreign securities, particularly those of issuers located in
emerging market countries, tend to have greater exposure to liquidity risk than
domestic securities. In unusual market conditions, even normally liquid
securities may be affected by a degree of liquidity risk (i.e., if the number
and capacity of traditional market participants is reduced). An inability to
sell one or more portfolio positions can adversely affect the Fund’s value or
prevent the Fund from being able to take advantage of other investment
opportunities.
REIT
Risk. REITs are subject to certain risks inherent in
the direct ownership of real estate, including without limitation, a possible
lack of mortgage funds and associated interest rate risks, overbuilding,
property vacancies, increases in property taxes and operating expenses, changes
in zoning laws, losses due to environmental damages and changes in neighborhood
values and appeal to purchasers. In addition, a REIT could fail to qualify for
tax-free pass-through of its income under the Internal
Revenue
17½Janus Henderson U.S. Sustainable
Equity ETF
Code
of 1986, as amended, or fail to maintain its exemption from registration under
the Investment Company Act of 1940, as amended, which could produce adverse
economic consequences for the REIT and its investors, including the
Fund.
Exchange-Traded Funds
Risk. The Fund may invest in ETFs for temporary
liquidity purposes, to manage duration and cash positioning and/or for other
purposes. ETFs are typically open-end investment companies which may
seek to track the performance of a specific index or be actively managed. ETFs
are traded on a national securities exchange at market prices that may vary from
the NAV of their underlying investments. Accordingly, there may be times when an
ETF trades at a premium or discount to its NAV. As a result, the Fund may pay
more or less than NAV when it buys ETF shares, and may receive more or less than
NAV when it sells those shares. When the Fund invests in an ETF, in addition to
directly bearing the expenses associated with its own operations, it will also
bear a pro rata portion of the ETF’s expenses. Additionally, when purchasing or
selling shares of an ETF, the Fund may pay commissions or other trading costs as
part of the transaction. The Fund is also subject to the risks associated with
the securities in which the ETF
invests.
Smaller Sized Fund
Risk. Because the Fund has a small asset base, large
inflows and outflows may have a disproportionate impact, negative or positive,
on the Fund’s performance, which may be more volatile than that of a larger
fund. If a smaller fund were to fail to attract sufficient assets to achieve or
maintain economies of scale, performance may be negatively impacted, and any
resulting liquidation could create negative transaction costs for the Fund and
tax consequences for
investors.
Exchange Listing and
Trading Issues Risk. Although Fund shares are listed
for trading on the NYSE Arca, Inc. (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 prices 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.
18½Janus Henderson U.S. Sustainable
Equity ETF
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.
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 period
indicated. The table compares the Fund’s average
annual returns for the periods indicated to a broad-based securities market
index. The index is 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 1-800-668-0434.
Janus
Henderson U.S. Sustainable Equity ETF
|
Annual Total Returns (calendar
year-end) |
|
Best
Quarter: 4th Quarter 2021 10.83% Worst
Quarter: 2nd Quarter 2022 – 19.40% |
|
|
|
|
|
|
|
| |
Average
Annual Total Returns (periods ended 12/31/22) |
|
|
|
|
|
|
|
|
1 Year |
|
|
Since Inception
09/09/21 |
|
Janus Henderson U.S. Sustainable Equity
ETF |
|
|
|
|
|
|
|
|
Return Before
Taxes |
|
|
– 26.74 |
% |
|
|
– 18.40 |
% |
Return After Taxes on
Distributions |
|
|
– 26.79 |
% |
|
|
– 18.51 |
% |
Return After Taxes on Distributions and
Sale of Fund Shares(1) |
|
|
– 15.79 |
% |
|
|
– 13.92 |
% |
S&P 500®
Index(2) (reflects no
deductions for fees, expenses or taxes) |
|
|
– 18.11 |
% |
|
|
– 10.20 |
% |
(1) |
If the Fund incurs a
loss, which generates a tax benefit, the Return After Taxes on
Distributions and Sale of Fund Shares may exceed the Fund’s other return
figures. |
(2) |
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 in the table
above are calculated using the historical highest individual U.S. federal
marginal income tax rates and do not reflect the impact of state or 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: Hamish
Chamberlayne, CFA, is Co-Portfolio Manager of the Fund, which he has
co-managed since inception. Aaron
Scully, CFA, is Co-Portfolio Manager of the Fund, which he has co-managed
since inception.
19½Janus Henderson U.S. Sustainable
Equity ETF
|
PURCHASE AND SALE OF FUND SHARES |
The
Fund is an actively-managed ETF. 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. 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. Creation Unit transactions
are conducted in exchange for the deposit or delivery of a designated portfolio
of in-kind securities with a cash balancing amount and/or all cash. 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 Exchange, 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.
20½Janus Henderson U.S. Sustainable
Equity ETF
ADDITIONAL INFORMATION ABOUT THE FUNDS
Please refer to the following important information
when reviewing the “Fees and Expenses of the Fund” table in each Fund Summary of
the Prospectus. The fees and expenses shown were determined based on
average net assets as of the fiscal year ended October 31, 2022.
• |
|
“Annual
Fund Operating Expenses” are paid out of a Fund’s assets. You do not pay
these fees directly but, as the Example in each Fund Summary shows, these
costs are borne indirectly by all shareholders. |
• |
|
The
“Management Fee” is the rate paid by each 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
acquired fund fees and expenses, which are indirect expenses a 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 (“BDCs”) and exchange-traded funds (“ETFs”)) 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
Funds are actively managed ETFs and, thus, do not seek to replicate the
performance of a specified index. Accordingly, the portfolio managers have
discretion on a daily basis to manage the Funds’ portfolios in accordance with
each Fund’s investment objective.
The
Funds’ Board of Trustees (“Trustees”) may change each Fund’s investment
objective or non-fundamental principal investment strategies without a
shareholder vote. A Fund will notify you in writing at least 60 days or as soon
as reasonably practicable before making any such change it considers material.
If there is a material change to a Fund’s investment objective or principal
investment strategies, you should consider whether the Fund remains an
appropriate investment for you. There is no guarantee that a Fund will achieve
its investment objective.
On
each business day before commencement of trading in shares on the Exchange, each
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 each 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 each 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 each 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 each Fund’s policies with respect to investments in illiquid
investments, borrowing and derivatives use, 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 a Fund exceeds a
limit, other than illiquid investments, borrowing and derivatives use, as a
result of market fluctuations or the sale of other securities, it will not be
required to dispose of any securities. The “Glossary of Investment Terms”
includes descriptions of investment terms used throughout the Prospectus.
Each
Fund may borrow to the extent permitted by the Investment Company Act of 1940,
as amended (the “1940 Act”). At times, a Fund may be required to segregate or
earmark certain assets determined to be liquid by the Adviser to cover
borrowings. For temporary liquidity and cash management purposes, the Funds may
invest in other ETFs that provide exposure that is consistent with each Fund’s
respective investment objective.
Security
Selection
In
selecting investments, Janus Henderson
International Sustainable Equity ETF’s and Janus Henderson U.S. Sustainable Equity ETF’s
portfolio managers employ a “bottom-up” approach that focuses on fundamental
research. To identify the universe of investible securities for the Fund, the
portfolio managers first employ positive selection criteria to identify
companies that fall within at least one of ten environmental and social themes.
Environmental themes include efficiency, cleaner energy,
21½Janus Detroit Street Trust
water
management, environmental services, and sustainable transport. Social themes
include sustainable property and finance, safety, quality of life, knowledge and
technology, and health.
In
selecting investments, the portfolio managers will then consider, among other
factors, a company’s growth potential, competitive positioning, operational
quality, and strategy. The portfolio managers may also consider factors such as
a company’s historic and projected return on capital, balance sheets, and
financial models. The portfolio managers will also consider environmental,
social, and governance (“ESG”) factors including, but not limited to, climate
change, deforestation, biodiversity, human rights, company culture, and
community relations, board structure and diversity, executive pay, and corporate
reporting.
The
portfolio managers seek to maintain a portfolio of securities that has a carbon
footprint and carbon intensity that is at least 20% below each Fund’s respective
benchmark index. At the portfolio managers’ discretion, the Fund will engage
with a company’s management regarding matters that may include shareholder
rights, governance and remuneration, climate change, carbon emissions,
pollution, biodiversity, human capital, and diversity and inclusion.
The
portfolio managers evaluate and apply ESG and sustainable investment criteria
relying on a mix of third-party data and internally-generated analyses based on
information that may include web-based research reports from a company or
independent sources, as well as corporate engagement. The portfolio managers do
not apply ESG and sustainable investment criteria in managing the Fund’s
exposure to cash and cash equivalents. The Funds will generally consider selling
a stock if, in the portfolio managers’ opinion, there has been a regulatory,
industry, or position-level change that may impair a company’s revenue growth.
The Funds will also consider selling a stock if, in the portfolio managers’
opinion, the company’s business model no longer meets the sustainable investment
criteria employed in managing the Funds.
In
deciding to add or reduce portfolio positions, for Janus Henderson Net Zero Transition Resources
ETF, the portfolio managers employ a “bottom-up” approach that focuses on
fundamental research and considers, among other factors, a company’s growth
potential, competitive positioning and operational quality, return on capital,
risk profile, and strategy. Except as noted below, in selecting each investment,
the portfolio managers will also consider ESG factors such as carbon footprint,
corporate governance, human capital and diversity, and business ethics. The
portfolio managers evaluate and apply ESG factors relying on a mix of
third-party data and internally-generated analyses based on information that may
include web-based research reports from a company or independent sources, as
well as corporate engagement, and may sell a portfolio position if, in the
portfolio managers’ opinion, the company’s business model no longer satisfies
the ESG factors. The portfolio managers do not apply these ESG factors in
managing the Fund’s cash and cash equivalents.
All Funds
The
portfolio managers apply broad-based negative screens, which incorporate
third-party inputs, to seek to avoid securities of issuers that, in the
determination of the Adviser, are significantly engaged in or derive more than
de minimis revenue from (generally no more than 5-10%), industries, activities,
or assets considered by the portfolio managers to have a negative impact on
society or the environment.
In
screening such investments, there may be instances where the de minimis limits
cannot be expressed quantitatively, in which case the portfolio managers apply a
qualitative assessment of an issuer. Among other things, the qualitative
assessment looks at the extent to which an “avoided” activity is part of a
company’s business, whether a company is taking action to address and improve
upon such activity, and may consider certain issuers, industries or sectors that
are in the process of transitioning to sustainable business practices, in which
case a threshold of greater than 5-10% may initially be applied.
A
current list of such activities, which may evolve over time, follows:
|
|
|
|
|
| |
|
|
Janus Henderson International Sustainable
Equity
ETF |
|
Janus Henderson Net Zero Transition Resources ETF |
|
Janus Henderson U.S. Sustainable Equity
ETF |
Alcohol |
|
X |
|
X |
|
X |
Armaments |
|
X |
|
X |
|
X |
Animal
Testing (cosmetic) |
|
X |
|
X |
|
X |
Animal
Testing (non-medical) |
|
X |
|
|
|
X |
22½Janus Detroit Street Trust
|
|
|
|
|
| |
|
|
Janus Henderson International Sustainable
Equity
ETF |
|
Janus Henderson Net Zero Transition Resources ETF |
|
Janus Henderson U.S. Sustainable Equity
ETF |
Chemicals
of Concern (such as, but not limited to, microbeads, persistent organic
pollutants and the manufacture of any other substances banned or
restricted under international conventions) |
|
X |
|
X |
|
X |
Controversial
Fossil Fuel Power Generation (such as, but not limited to, companies who
predominantly rely on thermal coal for power generation without a credible
plan for transition to net zero or renewable energy) |
|
X |
|
X |
|
X |
Controversial
Fossil Fuel Extraction and Refining (such as, but not limited to, the
extraction of fossil fuels from oil sands, thermal coal extraction, and
arctic drilling and exploration) |
|
X |
|
X |
|
X |
Fossil
Fuel Power Generation |
|
X |
|
|
|
X |
Fossil
Fuel Extraction and Refining |
|
X |
|
|
|
X |
Fur |
|
X |
|
X |
|
X |
Gambling |
|
X |
|
X |
|
X |
Genetic
Engineering |
|
X |
|
|
|
X |
Intensive
Farming |
|
X |
|
|
|
X |
Meat
and Dairy Production |
|
X |
|
|
|
X |
Nuclear
Power |
|
X |
|
|
|
X |
Organization
for Economic Co-operation and Development Violators |
|
X |
|
|
|
X |
Pornography |
|
X |
|
X |
|
X |
Tobacco |
|
X |
|
X |
|
X |
UN
Global Compact Violators |
|
X |
|
X |
|
X |
Cash
Position
The
Funds may not always stay fully invested. For example, when the portfolio
managers believe that market conditions are unfavorable for investing, or when
they are otherwise unable to locate attractive investment opportunities, a
Fund’s cash or similar investments, such as commercial paper, repurchase
agreements and other short-duration fixed-income securities, and/or affiliated
or non-affiliated money market funds (or unregistered cash management pooled
investment vehicles that operate as money market funds), may increase. Due to
differing investment strategies, the cash positions among the Funds may vary
significantly. When a Fund’s investments in cash or similar investments
increase, it may not participate in market advances or declines to the same
extent that it would if the Fund remained more fully invested. To the extent a
Fund invests its uninvested cash through a sweep program (meaning its uninvested
cash is pooled with uninvested cash of other funds and invested in certain
securities such as repurchase agreements), it is subject to the risks of the
account or fund into which it is investing, including liquidity issues that may
delay the Fund from accessing its cash.
In
addition, a Fund may temporarily increase its cash position under certain
unusual circumstances, such as to protect its assets or maintain liquidity
in certain circumstances to meet unusually large redemptions. A Fund’s cash
position may also increase temporarily due to unusually large cash inflows.
Under unusual circumstances such as these, a Fund may invest up to 100% of its
assets in cash or similar investments. In this case, a Fund may take positions
that are inconsistent with its investment policies. As a result, a Fund may not
achieve its investment objective.
Emerging
Markets
Within
the parameters of their specific investment policies, the Funds may invest in
securities of issuers or companies from or with exposure to one or more
“developing countries” or “emerging market countries.” Such countries include,
but are not limited to, countries included in the MSCI Emerging Markets
IndexSM.
23½Janus Detroit Street Trust
Exchange-Traded
Funds
Each
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 each Fund, which will be indirectly
paid by each Fund. As a result, the cost of investing in a Fund may be higher
than the cost of investing directly in underlying ETFs and may be higher than
other ETFs or mutual funds that invest directly in stocks and bonds. Since ETFs
are traded on an exchange at market prices that may vary from the NAV 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 Adviser will earn
fees both from such Fund and from the underlying ETF, with respect to assets of
the Fund invested in the underlying ETF. Each Fund is also subject to the risks
associated with the securities in which the ETF invests.
Foreign
Securities
The
Funds may invest in foreign securities. The portfolio managers seek investments
that meet the selection criteria, regardless of where an issuer or company is
located. Foreign securities are generally selected on a security-by-security
basis without regard to any predetermined allocation among countries or
geographic regions. However, certain factors, such as expected levels of
inflation, government policies influencing business conditions, the outlook for
currency relationships, and prospects for economic growth among countries,
regions, or geographic areas, may warrant greater consideration in selecting
foreign securities. The Funds may at times have significant foreign exposure,
including exposure to emerging markets.
Illiquid
Investments
A Fund
will not acquire any illiquid investment if, immediately after the acquisition,
the Fund would have invested more than 15% of its net assets in illiquid
investments that are assets. An illiquid investment is any investment that a
Fund reasonably expects cannot be sold or disposed of in current market
conditions in seven calendar days or less without the sale or disposition
significantly changing the market value of the investment.
Nondiversification
Diversification
is a way to reduce risk by investing in a broad range of stocks or other
securities. Janus Henderson Net Zero Transition
Resources ETF is classified as nondiversified. A Fund that is classified
as nondiversified has the ability to take larger positions in securities than a
fund that is classified as diversified. This gives a Fund which is classified as
nondiversified more flexibility to focus its investments in companies that the
portfolio managers have identified as the most attractive for the investment
objective and strategy of the Fund. However, because the appreciation or
depreciation of a single security may have a greater impact on the NAV of a Fund
which is classified as nondiversified, its share price can be expected to
fluctuate more than a comparable fund which is classified as diversified. This
fluctuation, if significant, may affect the performance of a Fund.
Portfolio
Turnover
In
general, each Fund intends to purchase securities for long-term investment,
although, to a limited extent, a Fund may purchase securities in
anticipation of relatively short-term gains. Short-term transactions may also
result from liquidity needs, securities having reached a price or yield
objective, changes in interest rates or the credit standing of an issuer, or by
reason of economic or other developments not foreseen at the time of the initial
investment decision. A Fund may also sell one security and simultaneously
purchase the same or a comparable security to take advantage of short-term
differentials in bond yields or securities prices. Portfolio turnover is
affected by market conditions, changes in the size of a Fund (including due to
purchases and redemptions of Creation Units), the nature of a Fund’s
investments, and the investment style of the portfolio managers.
Increased
portfolio turnover may result in higher costs for brokerage commissions, dealer
mark-ups, and other transaction costs, and may also result in taxable
capital gains. Higher costs associated with increased portfolio turnover also
may have a negative effect on a Fund’s performance. The “Financial Highlights”
section of this Prospectus shows the Funds’ historical turnover rates.
REITs
and Real Estate-Related Securities
A
Fund may invest in equity and debt securities of real estate-related companies.
Such companies may include those in the real estate industry or real
estate-related industries. These securities may include common stocks, preferred
stocks, and other securities, including, but not limited to, mortgage-backed
securities, real estate-backed securities, securities of real estate investment
trusts (“REITs”) and similar REIT-like entities (such as real estate operation
companies (“REOCs”)). A REIT is an entity that invests in real estate-related
projects, such as properties, mortgage loans, and construction loans. REITs are
often categorized as equity REITs, mortgage REITs, and hybrid REITs. An equity
REIT, the most common type of REIT, invests primarily in the fee ownership of
land and buildings. An equity REIT derives its income primarily from rental
income but may
24½Janus Detroit Street Trust
also
realize capital gains or losses by selling real estate properties in its
portfolio that have appreciated or depreciated in value. A mortgage REIT invests
primarily in mortgages on real estate, which may secure construction,
development, or long-term loans. A mortgage REIT generally derives its income
from interest payments on the credit it has extended. A hybrid REIT combines the
characteristics of equity REITs and mortgage REITs, generally by holding both
ownership interests and mortgage interests in real estate.
Similar
to REITs, 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 of
1986, as amended, 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.
Sustainable
Investing
Sustainable
investing is an investment approach that focuses on companies that relate to
certain sustainable development themes, including those that are strategically
aligned with environmental and social megatrends such as climate change,
resource constraints, growing populations, and aging populations.
The
value of your investment will vary over time, sometimes significantly, and you
may lose money by investing in the Funds. The following information is intended
to help you better understand some of the risks of investing in the Funds. The
impact of the following risks on a Fund may vary depending on the Fund’s
investments. The greater a Fund’s investment in a particular security, the
greater the Fund’s exposure to the risks associated with that security. Before
investing in a Fund, you should consider carefully the risks that you assume
when investing in the Fund.
Affiliated Underlying
Fund Risk. The Adviser may invest in certain affiliated
ETFs as investments for each Fund. The Adviser will generally receive fees for
managing such funds, in addition to the fees paid to the Adviser by each Fund.
The payment of such fees by affiliated funds creates a conflict of interest when
selecting affiliated funds for investment in a Fund. The Adviser, however, is a
fiduciary to each 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 such 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 such Fund’s
investment in such ETF, less certain operating expenses.
Cash Transaction
Risk. The Funds may require all APs to purchase
Creation Units in cash when the portfolio managers believe it is in the best
interest of the Funds. Cash purchases may cause a Fund to incur portfolio
transaction fees or charges or delays in investing the cash that it would
otherwise not incur if a purchase was made on an in-kind basis. To the
extent a Fund determines to effect a Creation Unit redemption on a cash basis,
it may be less tax-efficient for the Fund compared to an in-kind
redemption and may cause the Fund to incur portfolio transaction fees or charges
it would not otherwise incur with an in-kind redemption, to the extent such fees
or charges are not offset by the redemption transaction fee paid by APs. In
addition, a Fund’s use of cash transactions may result in
wider bid-ask spreads in Fund shares trading in the secondary market
as compared to ETFs that transact exclusively on
an in-kind basis.
Currency
Risk. Currency risk is the risk that changes in the
exchange rate between currencies will adversely affect the value (in U.S. dollar
terms) of an investment. As long as each Fund holds a foreign security, its
value will be affected by the value of the local currency relative to the U.S.
dollar. When each Fund sells a foreign currency denominated security, its value
may be worth less in U.S. dollars even if the security increases in value in its
home country. U.S. dollar-denominated securities of foreign issuers may also be
affected by currency risk, as the value of these securities may also be affected
by changes in the issuer’s local currency.
Depositary Receipts
Risk. Depositary receipts are generally subject to the
same sort of risks as direct investments in a foreign country, such as currency
risk, market risk, and foreign exposure risk, because their values depend on the
performance of a foreign security denominated in its home currency.
25½Janus Detroit Street Trust
Emerging Markets
Risk. Within the parameters of their specific
investment policies, the Funds may invest in securities of issuers or companies
from or with exposure to one or more “developing countries” or “emerging market
countries.” Such countries include, but are not limited to, countries included
in the MSCI Emerging Markets Index. To the extent that a Fund invests a
significant amount of its assets in one or more of these countries, its returns
and NAV may be affected to a large degree by events and economic conditions in
such countries. The risks of foreign investing are heightened when investing in
emerging markets, which may result in the price of investments in emerging
markets experiencing sudden and sharp price swings. In many developing markets,
there is less government supervision and regulation of stock exchanges, brokers,
and listed companies than in more developed markets. Similarly, issuers in such
markets may not be subject to regulatory, accounting, auditing, and financial
reporting and recordkeeping standards comparable to those to which U.S.
companies are subject. Information about emerging markets companies, including
financial information, may be less available or reliable and the Fund’s ability
to conduct due diligence with respect to such companies may be limited. In
addition, certain emerging market jurisdictions materially restrict the Public
Company Accounting Oversight Board’s (“PCAOB”) inspection, investigation, and
enforcement capabilities which impairs the ability to conduct independent
oversight or inspection of accounting firms located in, or operating in, certain
emerging markets; therefore, there is no guarantee that the quality of financial
reporting or the audits conducted by audit firms of emerging market issuers meet
PCAOB standards. Accordingly, these investments may be potentially more volatile
in price and less liquid than investments in developed securities markets,
resulting in greater risk to investors. There is a risk in developing countries
that a current or future economic or political crisis could lead to price
controls, forced mergers of companies, expropriation or confiscatory taxation,
imposition or enforcement of foreign ownership limits, seizure, nationalization,
sanctions or imposition of restrictions by various governmental entities on
investment and trading, or creation of government monopolies, any of which may
have a detrimental effect on a Fund’s investments.
The
securities markets of many of these emerging market countries may also be
smaller, less liquid, and subject to greater price volatility than those in the
United States. Moreover, the legal
remedies for investors in emerging markets may be more limited than the remedies
available in the United States and the ability of U.S. authorities (e.g., the SEC and the U.S. Department of
Justice) to bring actions against bad actors may be limited. A shareholder’s
ability to bring and enforce legal actions emerging market countries, or to
obtain information needed to pursue or enforce such actions, may be limited and
as a result such claims may be difficult or impossible to pursue. In the event
of a default on any investments in foreign debt obligations, it may be more
difficult for a Fund to obtain or to enforce a judgment against the issuers of
such securities. In addition, a Fund’s investments may be denominated in foreign
currencies and therefore, changes in the value of a country’s currency compared
to the U.S. dollar may affect the value of the Fund’s investments. To the extent
that a Fund invests a significant portion of its assets in the securities of
emerging markets issuers in or companies of a single country or region, it is
more likely to be impacted by events or conditions affecting that country or
region, which could have a negative impact on the Fund’s performance. A Fund may
be subject to emerging markets risk to the extent that it invests in securities
of issuers or companies which are not considered to be from emerging markets,
but which have customers, products, or transactions associated with emerging
markets.
Eurozone
Risk. A number of countries in the European Union
(“EU”) have experienced, and may continue to experience, severe economic and
financial difficulties. In particular, many EU nations are susceptible to
economic risks associated with high levels of debt, notably due to investments
in sovereign debt. These events have adversely affected the exchange rate of the
euro and may continue to significantly affect European countries. As a result,
financial markets in the EU have been subject to increased volatility and
declines in asset values and liquidity. Responses to these financial problems by
European governments, central banks, and others, including austerity measures
and reforms, may not work, may result in social unrest, and may limit future
growth and economic recovery or have other unintended consequences. All of these
developments may continue to significantly affect the economies of all EU
countries, which in turn may have a material adverse effect on a Fund’s
investments in such countries, other countries that depend on EU countries for
significant amounts of trade or investment, or issuers with exposure to debt
issued by certain EU countries.
Exchange-Traded Funds
Risk. Each Fund may invest in ETFs, including
affiliated ETFs. ETFs are typically open-end investment companies, which may
seek to track the performance of a specific index or be actively managed. ETFs
are traded on a national securities exchange at market prices that may vary from
the NAV of their underlying investments. Accordingly, there may be times when an
ETF trades at a premium or discount to its NAV. When a Fund invests in an ETF,
in addition to directly bearing the expenses associated with its own operations,
it will bear a pro rata portion of the ETF’s expenses. As a result, the cost of
investing in the Funds may be higher than the cost of investing directly in the
underlying ETFs and may be higher than other ETFs or mutual funds that invest
directly in stocks and bonds. ETFs also involve the risk that an active trading
market for an ETF’s shares may not develop or be maintained. Similarly, because
the value of ETF shares depends on the demand in the market, the Fund may not
be
26½Janus Detroit Street Trust
able
to purchase or sell an ETF at the most optimal time, which could adversely
affect the Fund’s performance. In addition, ETFs that track particular indices
may be unable to match the performance of such underlying indices due to the
temporary unavailability of certain index securities in the secondary market or
other factors, such as discrepancies with respect to the weighting of
securities.
The
ETFs in which a Fund invests are subject to specific risks, depending on the
investment strategy of the ETF. In turn, a Fund will be subject to substantially
the same risks as those associated with direct exposure to the securities or
commodities held by the ETF. Because a Fund may invest in a broad range of ETFs,
such risks may include, but are not limited to, leverage risk, foreign exposure
risk, and commodity-linked investments risk.
Foreign Exposure
Risk. The Funds may invest in foreign equity and/or
debt securities either indirectly (e.g., depositary receipts, depositary shares,
and passive foreign investment companies) or directly in foreign markets,
including emerging markets. Additional risks may be present with respect to
investments in securities of issuers or companies that are economically tied to
different countries throughout the world. An issuer is deemed to be economically
tied to a country or countries if one or more of the following tests are met:
(i) the issuer is organized in, or its primary business office or principal
trading market of its equity are located in, the country; (ii) a majority
of the issuer’s revenues are derived from one or more countries; or (iii) a
majority of the issuer’s assets are located in one or more countries.
Investments in foreign securities, including securities of foreign and emerging
market governments, may involve greater risks than investing in domestic
securities because a Fund’s performance may depend on factors other than the
performance of a particular company. These factors include:
• |
|
Currency
Risk. As long as a Fund holds a foreign security,
its value will be affected by the value of the local currency relative to
the U.S. dollar. When a Fund sells a foreign currency denominated
security, its value may be worth less in U.S. dollars even if the security
increases in value in its home country. U.S. dollar-denominated securities
of foreign issuers may also be affected by currency risk, as the value of
these securities may also be affected by changes in the issuer’s local
currency. |
• |
|
Political and
Economic Risk. Foreign investments may be subject
to increased political and economic risks, including the imposition of
economic and other sanctions. Sanctions imposed by the United States
government on other countries or persons or issuers operating in such
countries could restrict a Fund’s ability to buy affected securities or
force a Fund to dispose of any affected securities it has previously
purchased at an inopportune time. As a result, a Fund may experience a
greater risk of loss with respect to securities impacted by such
sanctions. |
|
|
Political and economic
risks may be heightened in emerging markets, which may have relatively
unstable governments, immature economic structures, national policies
restricting investments by foreigners, social instability, and different
and/or developing legal systems. In some countries, there is the risk that
the government may take over the assets or operations of a company or that
the government may impose withholding and other taxes or limits on the
removal of a Fund’s assets from that country. In addition, the economies
of emerging markets may be predominantly based on only a few industries,
may be highly vulnerable to changes in local or global trade conditions,
and may suffer from extreme and volatile debt burdens or inflation
rates. |
• |
|
Regulatory
Risk. There may be less government supervision of
foreign markets. As a result, foreign issuers may not be subject to the
uniform accounting, auditing, and financial reporting standards and
practices applicable to domestic issuers, and there may be less publicly
available information about foreign issuers. |
• |
|
Foreign Market
Risk. Foreign securities markets, particularly
those of emerging market countries, may be less liquid and more volatile
than domestic markets. These securities markets may trade a small number
of securities, may have a limited number of issuers and a high proportion
of shares, or may be held by a relatively small number of persons or
institutions. Local securities markets may be unable to respond
effectively to increases in trading volume, potentially making prompt
liquidation of substantial holdings difficult or impossible at times. It
is also possible that certain markets may require payment for securities
before delivery, and delays may be encountered in settling securities
transactions. In some foreign markets, there may not be protection against
failure by other parties to complete transactions. It may not be possible
for a Fund to repatriate capital, dividends, interest, and other income
from a particular country or governmental entity. In addition, securities
of issuers located in or economically tied to countries with emerging
markets may have limited marketability and may be subject to more abrupt
or erratic price movements which could also have a negative effect on a
Fund. Such factors may hinder a Fund’s ability to buy and sell emerging
market securities in a timely manner, affecting the Fund’s investment
strategies and potentially affecting the value of the
Fund. |
• |
|
Geographic
Concentration Risk. To the extent that a Fund
invests a substantial amount of its assets in issuers located in a single
country or region, the economic, political, social, regulatory, or other
developments or conditions within such country |
27½Janus Detroit Street Trust
|
or
region will generally have a greater effect on the Fund than they would on
a more geographically diversified fund, which may result in greater losses
and volatility. Adverse developments in certain regions could also
adversely affect securities of other countries whose economies appear to
be unrelated and could have a negative impact on a Fund’s
performance. |
• |
|
Transaction
Costs. Costs of buying, selling, and holding
foreign securities, including brokerage, tax, and custody costs, may be
higher than those involved in domestic
transactions. |
Inflation
Risk. Inflation creates uncertainty over the future
real value of an investment (the value after adjusting for inflation). The real
value of certain assets or real income from investments will be less in the
future as inflation decreases the value of money. As inflation increases, the
present value of a Fund’s assets and distributions may decline. This risk is
more prevalent with respect to debt securities held by a Fund. Inflation rates
may change frequently and drastically as a result of various factors, including
unexpected shifts in the domestic or global economy. Moreover, a Fund’s
investments may not keep pace with inflation, which may result in losses to Fund
shareholders or adversely affect the real value of shareholders’ investment in a
Fund. Fund shareholders’ expectation of future inflation can also impact the
current value of a Fund’s portfolio, resulting in lower asset values and
potential losses. This risk may be elevated compared to historical market
conditions because of recent monetary policy measures and the current interest
rate environment.
Issuer Concentration
Risk. A Fund’s portfolio may be comprised of a
relatively small number of issuers in comparison to other funds. As a result,
the Fund may be subject to greater risks than a fund that invests in a greater
number of issuers. A change in the value of any single investment held by a Fund
may affect the overall value of the Fund more than it would affect a fund that
holds more investments. In particular, a Fund may be more susceptible to adverse
developments affecting any single issuer held by the Fund and may be susceptible
to greater losses because of these developments.
Industry and Sector
Risk. Although each Fund does not concentrate its
investments in specific industries or industry sectors, it emphasizes certain
themes and megatrends. As a result, at times, it may have a significant portion
of its assets invested in securities of companies conducting similar business or
businesses within the same economic sector or that benefit from the same
megatrend. Companies in the same industry or economic sector or that benefit
from the same megatrend may be similarly affected by economic or market events,
making a Fund more vulnerable to unfavorable developments than funds that invest
more broadly. As each Fund’s portfolio becomes more concentrated, the Fund is
less able to spread risk and potentially reduce the risk of loss and
volatility.
Liquidity
Risk. The Funds may invest in securities or instruments
that do not trade actively or in large volumes, and may make investments that
are less liquid than other investments. Also, the Funds may make investments
that may become less liquid in response to market developments or adverse
investor perceptions. Investments that are illiquid or that trade in lower
volumes may be more difficult to value. When there is no willing buyer and
investments cannot be readily sold at the desired time or price, a Fund may have
to accept a lower price or may not be able to sell the security or instrument at
all. Investments in foreign securities, particularly those of issuers located in
emerging market countries, tend to have greater exposure to liquidity risk than
domestic securities. In unusual market conditions, even normally liquid
securities may be affected by a degree of liquidity risk (i.e., if the number
and capacity of traditional market participants is reduced). An inability to
sell one or more portfolio positions can adversely affect a Fund’s value or
prevent the Fund from being able to take advantage of other investment
opportunities. Liquidity risk may be increased to the extent that a Fund invests
in restricted securities that are deemed to be illiquid investments.
Market
Risk. The value of a Fund’s portfolio may decrease if
the value of one or more issuers in the Fund’s portfolio decreases. Further,
regardless of how well individual companies or securities perform, the value of
a 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 a Fund invests. If the value of a Fund’s
portfolio decreases, the Fund’s NAV will also decrease, which means if you sell
your shares in the Fund you may lose money. Market risk may affect a single
issuer, industry, economic sector, or the market as a whole.
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 pandemics),
terrorism, conflicts, including related sanctions, 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.
28½Janus Detroit Street Trust
• |
|
COVID-19
Pandemic. The effects of COVID-19 have
contributed to increased volatility in global financial markets and have
affected and may continue to affect certain countries, regions, issuers,
industries and market sectors more dramatically than others. These
conditions and events could have a significant impact on a Fund and its
investments, a Fund’s ability to meet redemption requests, and the
processes and operations of a Fund’s service providers, including the
Adviser. |
• |
|
Russia/Ukraine
Invasion. Russia launched a large-scale invasion
of Ukraine on February 24, 2022. The extent and duration of the
military action, resulting sanctions and resulting future market
disruptions in the region are impossible to predict, but could be
significant and have a severe adverse effect on the region, including
significant negative impacts on the economy and the markets for certain
securities and commodities, such as oil and natural gas, as well as other
sectors. |
Market Trading
Risk. The Funds are subject to secondary market trading
risks. Shares of each Fund are listed for trading on an exchange; however, there
can be no guarantee that an active trading market for such shares will develop
or continue. Shares of a Fund may be listed or traded on U.S. and foreign
exchanges other than the Fund’s primary U.S. listing exchange. There can be no
guarantee that a Fund’s shares will continue trading on any exchange or in any
market or that the Fund’s shares will continue to meet the listing or trading
requirements of any exchange or market. A Fund’s shares may experience higher
trading volumes on one exchange as compared to another and investors are subject
to the execution and settlement risks of the market where their broker directs
trades.
Secondary
market trading in a Fund’s shares may be halted by an exchange because of market
conditions. Pursuant to exchange or market rules, trading in a Fund’s shares on
an exchange or in any market may be subject to trading halts caused by
extraordinary market volatility. There can be no guarantee that a Fund’s
exchange listing or ability to trade its shares will continue or remain
unchanged. In the event a Fund ceases to be listed on an exchange, the Fund may
cease operating as an “exchange-traded” fund and operate as a mutual fund,
provided that shareholders are given advance notice.
Shares
of a Fund may trade on an exchange at prices at, above, or below their most
recent NAV. The per share NAV of a Fund is calculated at the end of each
business day, as described below, and fluctuates with changes in the market
value of the Fund’s holdings. The trading prices of a Fund’s shares fluctuate
continuously throughout the trading day based on market supply and demand, and
may not closely track NAV. The trading prices of a Fund’s shares may differ
significantly from NAV during periods of market volatility, which may, among
other factors, lead to the Fund’s shares trading at a premium or discount to
NAV.
Buying
or selling a Fund’s shares on an exchange may require the payment of brokerage
commissions. 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 a
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. Due to the costs inherent in buying or
selling a Fund’s shares, frequent trading may detract significantly from
investment returns. Investment in a Fund’s shares may not be advisable for
investors who expect to engage in frequent trading.
Nondiversification
Risk. Janus Henderson
Net Zero Transition Resources ETF is classified as nondiversified under
the 1940 Act, and therefore may hold a greater percentage of their assets
in a smaller number of securities. As a result, an increase or decrease in the
value of a single security held by the Fund may have a greater impact on the
Fund’s NAV and total return. Being nondiversified may also make the Fund more
susceptible to financial, economic, political, or other developments that may
impact a security. Although the Fund may satisfy the requirements for a
diversified fund, the Fund’s nondiversified classification gives the Fund’s
portfolio managers more flexibility to hold larger positions in securities than
a fund that is classified as diversified. The Fund’s policy of concentrating its
portfolio in a smaller number of holdings could result in more volatility in the
Fund’s performance and share price. Since Janus Henderson Net Zero Transition
Resources ETF normally invests primarily in a core portfolio of 35-60 equity
securities, this risk may be increased.
Operational
Risk. An investment in each 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 in 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 each
Fund’s ability to calculate its NAV, process fund orders, execute portfolio
trades, or perform other essential tasks 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 each Fund.
Implementation of business continuity plans by each Fund, the Adviser or
third-party service providers in response to disruptive events such as natural
disasters, epidemics and
29½Janus Detroit Street Trust
pandemics,
terrorism, conflicts and social unrest may increase these operational risks to
the Fund. While each 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.
Portfolio Management
Risk. Each Fund is an actively managed investment
portfolio and is therefore subject to the risk that the portfolio managers may
not be successful in identifying investment opportunities that are aligned with
the sustainable investment approach that a Fund employs. A Fund may underperform
its benchmark index or other funds with similar investment objectives.
Private Placements
and Other Restricted Securities Risk. Investments in
private placements and other restricted securities could decrease a Fund’s
liquidity profile or prevent a Fund from disposing of them promptly at
advantageous prices. Private placements and restricted securities may be less
liquid than other investments because such securities may not always be readily
sold in broad public markets and may have no active trading market. As a result,
they may be difficult to value because market quotations may not be readily
available. Transaction costs may be higher for these securities, and a Fund may
get only limited information about the issuer of a private placement or other
restricted security.
REIT
Risk. To the extent that a Fund holds REITs and
REIT-like entities, it may be subject to the additional risks associated with
REITs and REIT-like investments. REITs and REIT-like entities are subject to
heavy cash flow dependency to allow them to make distributions to their
shareholders. The prices of equity REITs are affected by changes in the value of
the underlying property owned by the REITs, changes in capital markets and
interest rates, management skill in running a REIT, and the creditworthiness of
the REIT. The prices of mortgage REITs are affected by the quality of any credit
they extend, the creditworthiness of the mortgages they hold, as well as by the
value of the property that secures the mortgages. In addition, mortgage REITs
(similar to direct investments in mortgage-backed securities) are subject to
prepayment risk. Equity REITs and mortgage REITs are subject to heavy cash flow
dependency, defaults by borrowers, and self-liquidation. There is also the risk
that borrowers under mortgages held by a REIT or lessees of a property that a
REIT owns may be unable to meet their obligations to the REIT. In the event of a
default by a borrower or lessee, the REIT may incur substantial costs associated
with protecting its investments. While equity REITs and mortgage REITs may
provide exposure to a large number of properties, such properties may be
concentrated in a particular industry, region, or housing type, making such
investments more vulnerable to unfavorable developments to economic or market
events. Certain “special purpose” REITs in which a Fund may invest focus their
assets in specific real property sectors, such as hotels, shopping malls,
nursing homes, or warehouses, and are therefore subject to the specific risks
associated with adverse developments in these sectors. Each 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. The value of
investments in REOCs will generally be affected by the same factors that
adversely affect REIT investments, however, REOCs may also be adversely affected
by income streams derived from businesses other than real estate
ownership.
Additionally,
a REIT that fails to comply with federal tax requirements affecting REITs may be
subject to federal income taxation, or the federal tax requirement that a REIT
distribute substantially all of its net income to its shareholders may result in
a REIT having insufficient capital for future expenditures. REITs are also
subject to certain provisions under federal tax law and the failure of a company
to qualify as a REIT could have adverse consequences for a Fund, including
significantly reducing the return to the Fund on its investment in such
company.
Small- and Mid-Sized
Companies Risk. Each 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 associated with larger, more established companies. For example,
while small- and mid-sized companies may realize more substantial growth than
larger or more established issuers, they may also suffer more significant losses
as a result of their narrow product lines, limited operating history, greater
exposure to competitive threats, limited financial resources, limited trading
markets, and the potential lack of management depth. 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 or more established
companies. These holdings are also subject to wider price fluctuations and tend
to be less liquid than stocks of larger or more established companies, which
could have a significant adverse effect on a Fund’s returns, especially as
market conditions change.
Sustainable
Investment Risk. The Funds follow a sustainable
investment approach by investing in companies that relate to certain sustainable
development themes and demonstrate adherence to ESG practices. Accordingly, a
Fund may have a significant portion of its assets invested in securities of
companies conducting similar business or businesses within the same economic
sector. Additionally, due to its exclusionary criteria, a Fund may not be
invested in certain industries or sectors. As a
30½Janus Detroit Street Trust
result,
the Fund may be overweight or underweight in certain industries or sectors
relative to its benchmark index, which may cause the Fund’s performance to be
more or less sensitive to developments affecting those sectors. In addition,
because sustainable and ESG investing takes into consideration factors beyond
traditional financial analysis, the investment opportunities for a Fund may be
limited at times. Sustainability and ESG-related information provided by issuers
and third parties, upon which the portfolio managers may rely, continues to
develop, and may be incomplete, inaccurate, use different methodologies, or be
applied differently across companies and industries. Further, the regulatory
landscape for sustainable and ESG investing in the United States is still
developing and future rules and regulations may require a Fund to modify or
alter its investment process. Similarly, government policies incentivizing
companies to engage in sustainable and ESG practices may fall out of favor,
which could potentially limit a Fund’s investment universe. There is also a risk
that the companies identified through the investment process may fail to adhere
to sustainable and/or ESG-related business practices, which may result in a Fund
selling a security when it might otherwise be disadvantageous to do so. There is
no guarantee that sustainable investments will outperform the broader market on
either an absolute or relative basis.
Trading Issues
Risk. Although Fund shares are listed for trading on
the Exchange, there can be no assurance that an active trading market for such
shares will develop or be maintained. Trading in Fund shares may be halted due
to market conditions or for reasons that, in the view of the Exchange, make
trading in shares inadvisable. In addition, trading in shares is subject to
trading halts caused by extraordinary market volatility pursuant to the Exchange
“circuit breaker” rules. There can be no assurance that the requirements of the
Exchange necessary to maintain the listing of a Fund will continue to be met or
will remain unchanged or that the shares will trade with any volume, or at all.
In addition, during periods of significant volatility, the liquidity of the
underlying securities held by a Fund may affect the Fund’s trading prices.
During a “flash crash,” the market prices of a Fund’s shares may decline
suddenly and significantly. Such a decline may not reflect the performance of
the portfolio securities held by a Fund. Flash crashes may cause APs and other
market makers to limit or cease trading in a Fund’s shares for temporary or
longer periods. Shareholders could suffer significant losses to the extent that
they sell a Fund’s 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 can be 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 a 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 a 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.
Warrants and Rights
Risk. The price, performance and liquidity of warrants
and rights to purchase equity securities are typically linked to the underlying
stock. These instruments have many characteristics of convertible securities
and, similarly, will react to variations in the general market for equity
securities. Rights are similar to warrants, but normally have a short duration
and are distributed directly by the issuer to its shareholders. Rights and
warrants have no voting rights, receive no dividends and have no rights with
respect to the assets of the issuer.
31½Janus Detroit Street Trust
MANAGEMENT OF THE FUNDS
Janus
Henderson Investors US LLC (the “Adviser”), 151 Detroit Street, Denver, Colorado
80206-4805, is the investment adviser to each Fund. The Adviser is responsible
for the day-to-day management of each Fund’s investment portfolio and
furnishes continuous advice and recommendations concerning each Fund’s
investments. The Adviser also provides certain administration and other services
and is responsible for other business affairs of each Fund. The Adviser utilizes
a personnel-sharing arrangement with its foreign (non-U.S.) affiliates, Janus
Henderson Investors (Jersey) Limited (“HIJL”) and Janus Henderson Investors
(Australia) Institutional Funds Management Limited (“JHIAIFML”) pursuant to
which certain Janus Henderson employees, acting for HIJL and JHIAIFML may also
serve as “associated persons” of the Adviser. In this capacity, such Janus
Henderson employees, acting for HIJL and JHIAIFML are subject to the oversight
and supervision of the Adviser and may provide portfolio management, research,
and related services to each Fund on behalf of the Adviser.
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, as well as the
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.
Each
Fund may rely on the Securities and Exchange Commission’s (the “SEC”) exemptive
and no action relief that permits the Adviser, subject to the approval of the
Trustees, to appoint or replace affiliated and unaffiliated subadvisers to
manage all or a portion of each Fund’s assets and enter into, amend, or
terminate such subadvisory agreements without obtaining shareholder approval
(a “manager-of-managers structure”).
Pursuant
to the relief, the Adviser, with the approval of the Trustees, has the ultimate
responsibility, subject to oversight by the Board, to oversee subadvisers and
recommend their hiring, termination and replacement. The Adviser, subject to the
review and oversight of the Trustees, has responsibility to: set each Fund’s
overall investment strategy; evaluate, select and recommend subadvisers to
manage all or a portion of each Fund’s assets; and implement procedures
reasonably designed to ensure that each subadviser complies with each Fund’s
investment goal, policies and restrictions. Subject to review and oversight by
the Trustees, under the manager-of-managers structure, the Adviser
will allocate and, when appropriate, reallocate each Fund’s assets among
subadvisers and monitor and evaluate the subadvisers’ performance. The relief
also permits each 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 affected Fund would provide
shareholders with information about the new subadviser and subadvisory agreement
within 90 days.
The
Trustees and the initial shareholder of each Fund have approved the use of
a manager-of-managers structure for each Fund.
Each
Fund uses a unitary fee structure, under which each Fund pays the Adviser a
“Management Fee” in return for providing certain investment advisory,
supervisory, and administrative services to each 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 each Fund’s
expenses. However, each 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 (including those relating to short positions
(if any)), taxes, litigation expenses, acquired fund fees and expenses (if any),
and extraordinary expenses.
Each
Fund’s Management Fee is calculated daily and paid monthly. Each Fund’s advisory
agreement details the Management Fee and other expenses that such Fund must
pay.
32½Janus Detroit Street Trust
The
following table reflects each Fund’s contractual Management Fee rate (expressed
as an annual rate), as well as the actual investment advisory fee rate paid for
the most recent fiscal period. The rates shown are fixed rates based on each
Fund’s daily net assets.
|
|
|
|
|
|
|
|
|
| |
Fund Name |
|
Daily
Net Assets
of the Fund |
|
Contractual
Management Fee (%)
(annual
rate) |
|
|
Actual Investment Advisory Fee Rate
(%)
(for the fiscal year ended October 31, 2022) |
|
Janus
Henderson International Sustainable Equity ETF |
|
$0 ‑ $250 Million |
|
|
0.60 |
|
|
|
0.60 |
|
|
|
Over $250 Million |
|
|
0.55 |
|
|
|
|
|
Janus
Henderson Net Zero Transition Resources ETF |
|
$0 - $250
Million |
|
|
0.60 |
|
|
|
0.60 |
|
|
|
Over
$250 Million |
|
|
0.55 |
|
|
|
|
|
Janus
Henderson U.S. Sustainable Equity ETF |
|
$0 - $250
Million |
|
|
0.55 |
|
|
|
0.55 |
|
|
|
Over $250 Million |
|
|
0.50 |
|
|
|
|
|
A
discussion regarding the basis for the Trustees’ approval of each Fund’s
investment advisory agreement is included in each Fund’s semiannual report (for
the period ending April 30) to shareholders. You can request each 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 each
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 29, 2024. The fee waiver
agreement may be modified or terminated prior to this date only at the
discretion of the Board of Trustees.
Janus
Henderson International Sustainable Equity ETF and Janus Henderson U.S.
Sustainable Equity ETF
Co-Portfolio
Managers Hamish Chamberlayne and Aaron Scully jointly share responsibility for
the day-to-day management of the Funds, with no limitation on the authority
of one co-portfolio manager in relation to the other.
Hamish
Chamberlayne, CFA, is Head of Global Sustainable Equities of Janus
Henderson Investors. He is Co-Portfolio Manager of Janus Henderson International
Sustainable Equity ETF and Janus Henderson U.S. Sustainable Equity ETF, which he
has co-managed since their inceptions. He is also Portfolio Manager of other
Janus Henderson accounts. Mr. Chamberlayne joined Henderson Global
Investors Limited in 2007. He holds a Master’s degree in Chemistry from New
College, Oxford University. Mr. Chamberlayne holds the Chartered Financial
Analyst designation.
Aaron
Scully, CFA, is Co-Portfolio Manager of Janus Henderson
International Sustainable Equity ETF and Janus Henderson U.S. Sustainable Equity
ETF, which he has co-managed since their inceptions. He is also Portfolio
Manager of other Janus Henderson accounts. Mr. Scully joined the Adviser in
2001 as a corporate financial analyst. He holds a Bachelor of Science degree in
Finance from Indiana University. Mr. Scully holds the Chartered Financial
Analyst designation.
Janus
Henderson Net Zero Transition Resources ETF
Co-Portfolio
Managers Tim Gerrard, Darko Kuzmanovic, Tal Lomnitzer, and Daniel Sullivan are
responsible for the day-to-day management of the Fund. Mr. Sullivan, as
lead Portfolio Manager, has the authority to exercise final decision-making on
the overall portfolio.
Tim
Gerrard is Co-Portfolio Manager of Janus Henderson Net Zero
Transition Resources ETF, which he has co-managed since inception. He is also
Portfolio Manager of other Janus Henderson accounts. Mr. Gerrard joined
Henderson Global
33½Janus Detroit Street Trust
Investors
Limited (“Henderson”) as a senior investment analyst in 2015, when Henderson
acquired 90 West Asset Management. Mr. Gerrard received Bachelor of
Commerce and Bachelor of Mineral Technology degrees (Hons) from the University
of Otago. He also holds the Quarry Managers Certificate from the Department of
Mines, Western Australia.
Darko
Kuzmanovic is Co-Portfolio Manager of Janus Henderson Net Zero
Transition Resources ETF, which he has co-managed since inception. He is also
Portfolio Manager of other Janus Henderson accounts. Mr. Kuzmanovic joined
Henderson Global Investors Limited as a portfolio manager in 2015.
Mr. Kuzmanovic received a Bachelor of Metallurgical Engineering degree
(Hons) from the University of New South Wales and an Executive MBA from
Macquarie Graduate School of Management.
Tal
Lomnitzer, CFA, is Co-Portfolio Manager of Janus Henderson Net
Zero Transition Resources ETF, which he has co-managed since inception. He is
also Portfolio Manager of other Janus Henderson accounts. Mr. Lomnitzer is
a Senior Investment Manager on the Global Natural Resources Team at Janus
Henderson Investors, a position he has held since 2019. Prior to this, he was
deputy head of global resources and fund manager at Colonial First State Global
Asset Management since 2011. He received First Class BA and MA degrees in
Economics from Cambridge University. Mr. Lomnitzer holds the Chartered
Financial Analyst designation, the CFA UK Level 4 Certificate in Climate and
Investing, the CFA UK Level 4 Certificate in ESG Investing, and the UNPRI
Certificate in Advanced RI Analysis.
Daniel
Sullivan is Head of Global Natural Resources of Janus Henderson
Investors. Mr. Sullivan is Co-Portfolio Manager of Janus Henderson Net Zero
Transition Resources ETF, which he has co-managed since inception. He is also
Portfolio Manager of other Janus Henderson accounts. Prior to joining Janus
Henderson Investors in 2019, Mr. Sullivan was a portfolio manager and
senior resource analyst at 90 West, which Henderson Global Investors Limited
acquired in 2015. Mr. Sullivan received a Bachelor of Mining Engineering
degree (Hons) from the University of Sydney and a graduate diploma of Applied
Finance and Investment from the Securities Institute of Australia.
Information
about the portfolio managers’ compensation structure and other accounts managed,
as well as the aggregate range of their individual ownership in the Fund(s) that
they manage, is included in the Funds’ SAI.
Conflicts
of Interest
The
Adviser manages other 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 a Fund for their own
accounts, or may purchase shares of a Fund for the benefit of their clients,
including other Janus Henderson funds. Increasing each 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 a 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 each Fund, which might
have an adverse effect on the Fund’s investment flexibility or trading volume.
The Adviser considers the effect of redemptions on each 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 Funds’ SAI.
34½Janus Detroit Street Trust
OTHER INFORMATION
Creation
Units for the Funds 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.
35½Janus Detroit Street Trust
DIVIDENDS, DISTRIBUTIONS AND TAXES
To
avoid taxation of each Fund, the Internal Revenue Code of 1986, as amended (the
“Internal Revenue Code”), requires each 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 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 each Fund. Please consult
your financial intermediary for details.
How
Distributions Affect each Fund’s NAV
Distributions
are paid to shareholders as of the record date of a distribution of each Fund,
regardless of how long the shares have been held. Undistributed income and net
capital gains are included in each Fund’s daily NAV. A Fund’s NAV drops by the
amount of the distribution, net of any subsequent market fluctuations. For
example, assume that on December 31, a Fund declared a dividend in the
amount of $0.25 per share. If a 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 a Fund purchased in the
secondary market.
As
with any investment, you should consider the tax consequences of investing in
each Fund. The following is a general discussion of certain federal income tax
consequences of investing in a 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 a Fund. You should consult your
tax adviser regarding the effect that an investment in a 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 a 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 each Fund
and capital gains from any sale or exchange of Fund shares. Each 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 each 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”).
36½Janus Detroit Street Trust
Each
Fund may derive “excess inclusion income” from certain equity interests in
mortgage pooling vehicles either directly or through an investment in a U.S.
REIT. Please see the Funds’ SAI for a discussion of the risks and special tax
consequences to shareholders in the event a Fund realizes excess inclusion
income in excess of certain threshold amounts.
Under
2017 legislation commonly known as the Tax Cuts and Jobs Act, “qualified REIT
dividends” (i.e., ordinary REIT dividends other than capital gain dividends and
portions of REIT dividends designated as qualified dividend income) are treated
as eligible for a 20% deduction by noncorporate taxpayers. Each Fund may choose
to pass through the special character of “qualified REIT dividends” to its
shareholders, provided the Fund and the shareholder meet certain holding period
requirements.
Taxes
on Sales
Any
time you sell the shares of a 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 Funds
Dividends,
interest, and some capital gains received by a Fund on foreign securities may be
subject to foreign tax withholding or other foreign taxes.
Certain
fund transactions may involve 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. A 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.
Each
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 each Fund to meet these requirements so that
any earnings on your investment will not be subject to federal income tax twice.
If a Fund invests in a partnership, however, it may be subject to state tax
liabilities.
If
a 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 “Income
Dividends, Capital Gains Distributions, and Tax Status” section of the SAI.
37½Janus Detroit Street Trust
SHAREHOLDER’S GUIDE
Each
Fund issues or redeems its shares at NAV per share only in Creation Units.
Shares of each 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
Exchange under the trading symbol SXUS for Janus Henderson International
Sustainable Equity ETF, JZRO for Janus Henderson Net Zero Transition Resources
ETF and SSPX for Janus Henderson U.S. Sustainable Equity ETF. Share prices are
reported in dollars and cents per share.
APs
may acquire Fund shares directly from each Fund, and APs 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 Funds’ SAI.
The
per share NAV of each 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. Each Fund’s NAV is calculated as of the close of the trading session
of the New York Stock Exchange (“NYSE”) (normally 4:00 p.m. New York time) each
day that the NYSE is open (“Business Day”). However, the NAV may still be
calculated if trading on the NYSE is restricted, provided there is sufficient
pricing information available for a Fund to value its securities, or as
permitted by the SEC. Foreign securities held by a Fund, as applicable, may be
traded on days and at times when the NYSE is closed and the NAV is therefore not
calculated. Accordingly, the value of a 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 each Fund are valued in accordance with policies and procedures
established by the Adviser pursuant to Rule 2a-5 under the Investment
Company Act of 1940 (the “1940 Act”) and approved by and subject to the
oversight of the Trustees (“Valuation Procedures”). To the extent available,
equity securities (including shares of ETFs) are generally valued at readily
available market quotations, which are (i) the official close prices or
(ii) last sale prices on the primary market or exchange in which the
securities trade. Most fixed-income securities are typically valued using an
evaluated bid price supplied by an Adviser-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 by the Adviser pursuant to the Valuation 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 valuation 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, if applicable,
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 methodologies employed
when fair valuing securities may change from time to time. Because fair value
pricing involves subjective judgments, it is possible that the fair value
determination for a security may be different than the value that could be
realized when selling that security.
The
value of the securities of mutual funds held by each Fund, if any, will be
calculated using the NAV of such mutual funds, and the prospectuses for
such mutual funds explain the circumstances under which they use fair
valuation and the effects of using fair valuation.
All
purchases, sales, or other account activity must be processed through your
financial intermediary or plan sponsor.
38½Janus Detroit Street Trust
|
DISTRIBUTION AND SERVICING FEES |
Distribution
and Shareholder Servicing Plan
The
Trust has adopted a Distribution and Servicing Plan for shares of each 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
each 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 each
Fund (“12b-1 fee”). However, payment of a 12b-1 fee has not
been authorized at this time.
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 each
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. Because these fees are paid out of each
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 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 Funds’ 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, and 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 selected 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-
39½Janus Detroit Street Trust
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.
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 Funds. Please contact your financial intermediary or plan sponsor for
details on such arrangements.
|
PURCHASING AND SELLING SHARES |
Shares
of each 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 each Fund
shares listing will continue or remain unchanged. Each Fund does not impose any
minimum investment for shares of the Fund purchased on an exchange. Buying or
selling each Fund’s shares involves certain costs that apply to all securities
transactions. When buying or selling shares of each 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.
Shares
of each 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 Funds’ SAI. Once
created, shares of each Fund generally trade in the secondary market in amounts
less than a Creation Unit.
Each
Fund’s primary listing exchange is NYSE Arca (the “Exchange”). The Exchange 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 each Fund is each day the Exchange is open. Orders
from APs to create or redeem Creation Units will only be accepted on a Business
Day. On days when the Exchange closes earlier than normal, each 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, each Fund may
establish early trade cut-off times for APs to submit orders for
Creation Units, in accordance with the 1940 Act. See the Funds’ 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
40½Janus Detroit Street Trust
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.
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 each 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 each 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 each Fund and is recognized as the owner of all shares for all
purposes.
Investors
owning shares of each Fund are beneficial owners as shown on the records of DTC
or its participants. DTC serves as the securities depository for shares of the
Funds. 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 each 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 each 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 each 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 each
Fund at a 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 each 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
41½Janus Detroit Street Trust
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 each
Fund’s intra-day net asset value basket. Each 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.
Premiums
and Discounts
There
may be differences between the daily market prices on secondary markets for
shares of each Fund and its NAV. NAV is the price per share at which a Fund
issues and redeems shares. See “Pricing of Fund Shares” above. The price used to
calculate market returns (“Market Price”) of a 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. A Fund’s Market Price
may be at, above, or below its NAV. The NAV of a Fund will fluctuate with
changes in the market value of its portfolio holdings. The Market Price of a
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 a Fund on a given day, generally at the time the NAV is
calculated. A premium is the amount that a Fund is trading above the reported
NAV, expressed as a percentage of the NAV. A discount is the amount that a Fund
is trading below the reported NAV, expressed as a percentage of the NAV. A
discount or premium could be significant. Information regarding a Fund’s
premium/discount to NAV for the most recently completed calendar year and the
most recently completed calendar quarters since that calendar 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 a 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 a 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 a 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 Janus Investment Fund are part of the same “group of investment
companies” for purposes of Section 12(d)(1)(G) of the 1940 Act.
Under
the 1940 Act, purchases or acquisitions by each Fund of shares issued by
registered investment companies (including other ETFs) and 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.
Unlike
traditional mutual funds, the frequent trading of Fund shares generally does not
disrupt portfolio management, increase a 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 a Fund, they do not harm the Fund or its
shareholders. A few institutional investors, referred to as Authorized
Participants, are authorized to purchase and redeem Fund shares directly with
each Fund in Creation Units. Creation Unit transactions that are effected using
securities (i.e., in kind) do not cause any of the harmful effects to the
issuing fund (as previously noted). However, Creation Unit transactions effected
using cash can potentially subject the Fund and its shareholders to those
harmful effects. As a result, each Fund requires Authorized Participants to pay
transaction fees to cover brokerage and certain related costs when purchasing or
redeeming Creation Units. Those fees are designed to protect each Fund and its
shareholders from the dilutive costs associated with frequent creation and
redemption activity. For these reasons, the Trustees of each Fund have
determined that it is not necessary
42½Janus Detroit Street Trust
to
adopt policies and procedures to detect and deter frequent trading and market
timing of Fund shares. However, each 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, each 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 shares on the Exchange, each 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. Each 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 Funds’ 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 each Fund. These
reports show each 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. Each 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.
43½Janus Detroit Street Trust
FINANCIAL HIGHLIGHTS
The
financial highlights table is intended to help you understand each 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 each
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 each Fund (assuming reinvestment of all dividends
and distributions).
Janus
Henderson International Sustainable Equity ETF
|
|
|
|
|
|
|
| |
For a
share outstanding during each year or period ended October 31 |
|
2022 |
|
|
2021(1) |
|
Net
Asset Value, Beginning of Period |
|
|
$23.38 |
|
|
|
$25.00 |
|
|
| |
Income/(Loss) from Investment
Operations: |
|
|
|
| |
|
| |
Net
investment income/(loss)(2) |
|
|
0.18 |
|
|
|
0.02 |
|
Net
realized and unrealized gain/(loss) |
|
|
(8.42) |
|
|
|
(1.64) |
(3) |
Total
from Investment Operations |
|
|
(8.24) |
|
|
|
(1.62) |
|
|
| |
Less Dividends and
Distributions: |
|
|
|
| |
|
| |
Dividends
(from net investment income) |
|
|
(0.18) |
|
|
|
— |
|
Total
Dividends and Distributions |
|
|
(0.18) |
|
|
|
— |
|
|
|
|
|
|
|
|
Net
Asset Value, End of Period |
|
|
$14.96 |
|
|
|
$23.38 |
|
|
|
|
|
|
|
|
Total
Return* |
|
|
(35.31)% |
|
|
|
(6.48)% |
(4) |
Net
assets, End of Period (in thousands) |
|
|
$19,075 |
|
|
|
$45,598 |
|
Average
Net Assets for the Period (in thousands) |
|
|
$30,714 |
|
|
|
$42,044 |
|
|
|
|
|
|
|
|
Ratios
to Average Net Assets** |
|
|
|
| |
|
| |
Ratio
of Gross Expenses |
|
|
0.60% |
|
|
|
0.60% |
|
Ratio
of Net Investment Income/(Loss) |
|
|
0.94% |
|
|
|
0.67% |
|
Portfolio
Turnover Rate(5) |
|
|
7% |
|
|
|
9% |
|
* |
Total
return not annualized for periods of less than one full
year. |
** |
Annualized
for periods of less than one full year. |
(1) |
Period
from September 8, 2021 (commencement of operations) through
October 31, 2021. |
(2) |
Per
share amounts are calculated based on average shares outstanding during
the year or period. |
(3) |
Net
realized and unrealized gain/(loss) includes the voluntary reimbursement
made by the Adviser. The impact of the reimbursement to the net realized
and unrealized gain/(loss) is $0.02. |
(4) |
0.08%
of the Fund’s total return consists of a voluntary reimbursement by the
Adviser for realized investment losses. Excluding this item, total return
would have been (6.56)%. See Note 3 in the Annual Report for more
details. |
(5) |
Portfolio
turnover rate excludes securities received or delivered from in-kind
processing of creation or redemptions. |
44½Janus Detroit Street Trust
Janus
Henderson Net Zero Transition Resources ETF
|
|
|
|
|
|
|
| |
For a
share outstanding during each year or period ended October 31 |
|
2022 |
|
|
2021(1) |
|
Net
Asset Value, Beginning of Period |
|
|
$25.54 |
|
|
|
$25.00 |
|
|
| |
Income/(Loss) from Investment
Operations: |
|
|
|
| |
|
| |
Net
investment income/(loss)(2) |
|
|
0.24 |
|
|
|
0.06 |
|
Net
realized and unrealized gain/(loss) |
|
|
(3.82) |
|
|
|
0.48 |
|
Total
from Investment Operations |
|
|
(3.58) |
|
|
|
0.54 |
|
|
| |
Less Dividends and
Distributions: |
|
|
|
| |
|
| |
Dividends
(from net investment income) |
|
|
(0.50) |
|
|
|
— |
|
Total
Dividends and Distributions |
|
|
(0.50) |
|
|
|
— |
|
|
|
|
|
|
|
|
Net
Asset Value, End of Period |
|
|
$21.46 |
|
|
|
$25.54 |
|
|
|
|
|
|
|
|
Total
Return* |
|
|
(14.22)% |
|
|
|
2.16% |
|
Net
assets, End of Period (in thousands) |
|
|
$45,613 |
|
|
|
$51,087 |
|
Average
Net Assets for the Period (in thousands) |
|
|
$49,868 |
|
|
|
$44,399 |
|
|
|
|
|
|
|
|
Ratios
to Average Net Assets** |
|
|
|
| |
|
| |
Ratio
of Gross Expenses |
|
|
0.60% |
|
|
|
0.60% |
|
Ratio
of Net Investment Income/(Loss) |
|
|
0.97% |
|
|
|
1.59% |
|
Portfolio
Turnover Rate(3) |
|
|
74% |
|
|
|
6% |
|
* |
Total
return not annualized for periods of less than one full
year. |
** |
Annualized
for periods of less than one full year. |
(1) |
Period
from September 8, 2021 (commencement of operations) through
October 31, 2021. |
(2) |
Per
share amounts are calculated based on average shares outstanding during
the year or period. |
(3) |
Portfolio
turnover rate excludes securities received or delivered from in-kind
processing of creation or redemptions. |
45½Janus Detroit Street Trust
Janus
Henderson U.S. Sustainable Equity ETF
|
|
|
|
|
|
|
| |
For a
share outstanding during each year or period ended October 31 |
|
2022 |
|
|
2021(1) |
|
Net
Asset Value, Beginning of Period |
|
|
$25.38 |
|
|
|
$25.00 |
|
|
| |
Income/(Loss) from Investment
Operations: |
|
|
|
| |
|
| |
Net
investment income/(loss)(2) |
|
|
0.04 |
|
|
|
— |
(3) |
Net
realized and unrealized gain/(loss) |
|
|
(6.32) |
|
|
|
0.38 |
|
Total
from Investment Operations |
|
|
(6.28) |
|
|
|
0.38 |
|
|
| |
Less Dividends and
Distributions: |
|
|
|
| |
|
| |
Dividends
(from net investment income) |
|
|
(0.11) |
|
|
|
— |
|
Total
Dividends and Distributions |
|
|
(0.11) |
|
|
|
— |
|
|
|
|
|
|
|
|
Net
Asset Value, End of Period |
|
|
$18.99 |
|
|
|
$25.38 |
|
|
|
|
|
|
|
|
Total
Return* |
|
|
(24.82)% |
|
|
|
1.52% |
|
Net
assets, End of Period (in thousands) |
|
|
$19,935 |
|
|
|
$51,394 |
|
Average
Net Assets for the Period (in thousands) |
|
|
$35,742 |
|
|
|
$44,389 |
|
|
|
|
|
|
|
|
Ratios
to Average Net Assets** |
|
|
|
| |
|
| |
Ratio
of Gross Expenses |
|
|
0.55% |
|
|
|
0.55% |
|
Ratio
of Net Investment Income/(Loss) |
|
|
0.19% |
|
|
|
(0.01)% |
|
Portfolio
Turnover Rate(4) |
|
|
9% |
|
|
|
1% |
|
* |
Total
return not annualized for periods of less than one full
year. |
** |
Annualized
for periods of less than one full year. |
(1) |
Period
from September 8, 2021 (commencement of operations) through
October 31, 2021. |
(2) |
Per
share amounts are calculated based on average shares outstanding during
the year or period. |
(3) |
Amount
is less than $0.005 |
(4) |
Portfolio
turnover rate excludes securities received or delivered from in-kind
processing of creation or redemptions. |
46½Janus Detroit Street Trust
GLOSSARY
OF INVESTMENT TERMS
This
glossary provides a more detailed description of some of the types of
securities, investment strategies, and other instruments in which the Fund may
invest, as well as some general investment terms. The Fund may invest in these
instruments to the extent permitted by its investment objective and policies.
The Fund is not limited by this discussion and may invest in any other types of
instruments not precluded by the policies discussed elsewhere in this
Prospectus.
|
EQUITY AND DEBT SECURITIES |
Bonds
are debt securities issued by a company, municipality, government,
or government agency. The issuer of a bond is required to pay the holder the
amount of the loan (or par value of the bond) at a specified maturity and to
make scheduled interest payments.
Common stocks
are equity securities representing shares of ownership in a
company and usually carry voting rights and earn dividends. Unlike preferred
stock, dividends on common stock are not fixed but are declared at the
discretion of the issuer’s board of directors.
Debt securities
are securities representing money borrowed that must be repaid at
a later date. Such securities have specific maturities and usually a specific
rate of interest or an original purchase discount.
Depositary receipts
are receipts for shares of a foreign-based corporation that
entitle the holder to dividends and capital gains on the underlying security.
Receipts include those issued by domestic banks (American Depositary Receipts),
foreign banks (Global or European Depositary Receipts), and broker-dealers
(depositary shares).
Duration
is a measurement of price sensitivity to interest rate changes.
Unlike average maturity, duration reflects both principal and interest payments.
Generally, the higher the coupon rate on a bond, the lower its duration will be.
The duration of a bond portfolio is calculated by averaging the duration of
bonds held by a Fund with each duration “weighted” according to the percentage
of net assets that it represents. Because duration accounts for interest
payments, the Fund’s duration is usually shorter than its average maturity.
Securities with longer durations tend to be more sensitive to changes in
interest rates, and are usually more volatile than securities with shorter
duration. For example, the price of a bond portfolio with an average duration of
five years would be expected to fall approximately 5% if interest rates rose by
one percentage point. The Fund with a longer portfolio duration is more likely
to experience a decrease in its share price as interest rates rise.
Equity securities
generally include domestic and foreign common stocks; preferred
stocks; securities convertible into common stocks or preferred stocks; warrants
to purchase common or preferred stocks; and other securities with equity
characteristics.
Exchange-traded funds
(“ETFs”) are index-based investment companies which hold
substantially all of their assets in securities with equity characteristics. As
a shareholder of another investment company, a Fund would bear its pro rata
portion of the other investment company’s expenses, including advisory fees, in
addition to the expenses the Fund bears directly in connection with its own
operations.
Fixed-income
securities are securities that pay a specified rate of return. The
term generally includes short- and long-term government, corporate, and
municipal obligations that pay a specified rate of interest, dividends, or
coupons for a specified period of time. Coupon and dividend rates may be fixed
for the life of the issue or, in the case of adjustable and floating rate
securities, for a shorter period.
Municipal securities
are bonds or notes issued by a U.S. state or political
subdivision. A municipal security may be a general obligation backed by the full
faith and credit (i.e., the borrowing and taxing power) of a municipality or a
revenue obligation paid out of the revenues of a designated project, facility,
or revenue source.
Passive foreign
investment companies (“PFICs”) are any foreign corporations which
generate certain amounts of passive income or hold certain amounts of assets for
the production of passive income. Passive income includes dividends, interest,
royalties, rents, and annuities. To avoid taxes and interest that the Fund must
pay if these investments are profitable, the Fund may make various elections
permitted by the tax laws. These elections could require that the Fund recognize
taxable income, which in turn must be distributed, before the securities are
sold and before cash is received to pay the distributions.
Preferred stocks
are equity securities that generally pay dividends at a specified
rate and have preference over common stock in the payment of dividends and
liquidation. Preferred stock generally does not carry voting rights.
Private placements
are securities that are subject to legal and/or contractual
restrictions on their sales. These securities may not be listed on an exchange
and may have no active trading market. As a result of the absence of a public
trading market, the prices
47½Janus Detroit Street Trust
of
these securities may be more volatile and more difficult to determine than
publicly traded securities and these securities may involve heightened risk as
compared to investments in securities of publicly traded companies.
Real estate
investment trust (“REIT”) is an investment trust that operates
through the pooled capital of many investors who buy its shares. Investments are
in direct ownership of either income property or mortgage loans. A REIT may be
listed on an exchange or traded over-the-counter.
Restricted securities
are securities acquired through nonpublic transactions that have
limitations on their resale. Restricted securities are unregistered and may only
be resold under certain circumstances as noted in Rule 144A of the Securities
Act of 1933, as amended.
U.S. Government
securities include direct obligations of the U.S. Government that
are supported by its full faith and credit. Treasury bills have initial
maturities of less than one year. Treasury notes have initial maturities of one
to ten years, and Treasury bonds may be issued with any maturity but generally
have maturities of at least ten years. U.S. Government securities also include
indirect obligations of the U.S. Government that are issued by federal agencies
and government sponsored entities. Unlike Treasury securities, agency securities
generally are not backed by the full faith and credit of the U.S. Government.
Some agency securities are supported by the right of the issuer to borrow from
the Treasury, others are supported by the discretionary authority of the U.S.
Government to purchase the agency’s obligations, and others are supported only
by the credit of the sponsoring agency.
Variable and floating
rate securities have variable or floating rates of interest and,
under certain limited circumstances, may have varying principal amounts.
Variable and floating rate securities pay interest at rates that are adjusted
periodically according to a specified formula, usually with reference to some
interest rate index or market interest rate. The floating rate tends to decrease
the security’s price sensitivity to changes in interest rates.
Warrants
are securities, typically issued with preferred stock or bonds,
which give the holder the right to buy a proportionate amount of common stock at
a specified price. The specified price is usually higher than the market price
at the time of issuance of the warrant. The right may last for a period of years
or indefinitely.
|
FUTURES, OPTIONS, AND OTHER DERIVATIVES |
Derivatives
are instruments that have a value derived from, or directly linked
to, an underlying asset (stock, bond, commodity, currency, interest rate or
market index). Types of derivatives can include, but are not limited to options,
forward contracts, swaps, and futures contracts.
Equity-linked
structured notes are derivative securities which are specially
designed to combine the characteristics of one or more underlying securities and
their equity derivatives in a single note form. The return and/or yield or
income component may be based on the performance of the underlying equity
securities, an equity index, and/or option positions. Equity-linked structured
notes are typically offered in limited transactions by financial institutions in
either registered or non-registered form. An investment in equity-linked
structured notes creates exposure to the credit risk of the issuing financial
institution, as well as to the market risk of the underlying securities. There
is no guaranteed return of principal with these securities, and the appreciation
potential of these securities may be limited by a maximum payment or call right.
In certain cases, equity-linked structured notes may be more volatile and less
liquid than less complex securities or other types of fixed-income securities.
Such securities may exhibit price behavior that does not correlate with other
fixed-income securities.
Equity swaps
involve the exchange by two parties of future cash flow (e.g., one
cash flow based on a referenced interest rate and the other based on the
performance of stock or a stock index).
Forward contracts
are contracts to purchase or sell a specified amount of a
financial instrument for an agreed upon price at a specified time. Forward
contracts are not currently exchange-traded and are typically negotiated on an
individual basis. The Fund may enter into forward currency contracts for
investment purposes or to hedge against declines in the value of securities
denominated in, or whose value is tied to, a currency other than the U.S. dollar
or to reduce the impact of currency appreciation on purchases of such
securities. It may also enter into forward contracts to purchase or sell
securities or other financial indices.
Futures contracts
are contracts that obligate the buyer to receive and the seller to
deliver an instrument or money at a specified price on a specified date. The
Fund may buy and sell futures contracts on foreign currencies, securities, and
financial indices including indices of U.S. Government, foreign government,
equity, or fixed-income securities. The Fund may also buy options on futures
contracts. An option on a futures contract gives the buyer the right, but not
the obligation, to buy or sell a futures
48½Janus Detroit Street Trust
contract
at a specified price on or before a specified date. Futures contracts and
options on futures are standardized and traded on designated exchanges.
Options
are the right, but not the obligation, to buy or sell a specified
amount of securities or other assets on or before a fixed date at a
predetermined price. The Fund may purchase and write put and call options on
securities, securities indices, and foreign currencies. The Fund may purchase or
write such options individually or in combination.
|
OTHER INVESTMENTS, STRATEGIES, AND/OR TECHNIQUES |
Diversification
is a classification given to a fund under the Investment Company
Act of 1940, as amended (the “1940 Act”). Funds are classified as either
diversified or nondiversified. To be classified as diversified under the 1940
Act, a fund may not, with respect to 75% of its total assets, invest more than
5% of its total assets in any issuer and may not own more than 10% of the
outstanding voting securities of an issuer. A fund that is classified as
nondiversified under the 1940 Act, on the other hand, has the flexibility to
take larger positions in securities than a fund that is classified as
diversified. However, because the appreciation or depreciation of a single
security may have a greater impact on the NAV of a fund which is classified as
nondiversified, its share price can be expected to fluctuate more than a
comparable fund which is classified as diversified.
Industry
concentration for purposes under the 1940 Act is the investment of
25% or more of a Fund’s total assets in an industry or group of
industries.
Leverage
is investment exposure which exceeds the initial amount invested.
Leverage occurs when the Fund increases its assets available for investment
using reverse repurchase agreements, derivatives, or other similar transactions.
In addition, other investment techniques, such as short sales, can create a
leveraging effect.
Market capitalization
is the most commonly used measure of the size and value of a
company. It is computed by multiplying the current market price of a share of
the company’s stock by the total number of its shares outstanding. Market
capitalization is an important investment criterion for certain funds, while
others do not emphasize investments in companies of any particular size.
Net long
is a term used to describe when the Fund’s assets committed to
long positions exceed those committed to short positions.
Repatriation
is the ability to move liquid financial assets from a foreign
country to an investor’s country of origin.
Repurchase agreements
involve the purchase of a security by the Fund and a simultaneous
agreement by the seller (generally a bank or dealer) to repurchase the security
from the Fund at a specified date or upon demand. This technique offers a method
of earning income on idle cash.
Reverse repurchase
agreements involve the sale of a security by the Fund to another
party (generally a bank or dealer) in return for cash and an agreement by the
Fund to buy the security back at a specified price and time. This technique may
be used for investment purposes, which may have a leveraging effect on the
Fund’s portfolio. This technique may also be used for other temporary or
emergency purposes.
When-issued, delayed
delivery, and forward commitment transactions generally involve
the purchase of a security with payment and delivery at some time in the future
– i.e., beyond normal settlement. New issues of stocks and bonds, private
placements, and U.S. Government securities may be sold in this manner.
49½Janus 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 broker-dealer, plan sponsor, or
financial intermediary, or by contacting a representative
at 1-800-668-0434. The Funds’ Statement of Additional Information and
most recent annual and semiannual reports are also available, free of charge, at
janushenderson.com/info. Additional information about each Fund’s investments is
available in the Fund’s annual and semiannual reports. In each Fund’s annual
report, 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 each Fund.
The
Statement of Additional Information provides detailed information about each
Fund and is incorporated into this Prospectus by reference. Reports and other
information about each 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
1-800-668-0434
The
Trust’s Investment Company Act File No. is 811-23112.