485BPOS
February 28,
2023
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Ticker |
Janus
Henderson Small Cap Growth Alpha ETF |
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JSML |
Principal
U.S. Listing Exchange: The NASDAQ Stock Market LLC |
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Janus
Henderson Small/Mid Cap Growth Alpha ETF |
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JSMD |
Principal
U.S. Listing Exchange: The NASDAQ Stock Market LLC |
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Janus
Detroit Street Trust
Prospectus
The
Securities and Exchange Commission has not approved or disapproved of these
securities or passed on the accuracy or adequacy of this Prospectus. Any
representation to the contrary is a criminal offense.
This
Prospectus describes two 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 the Funds are not individually redeemable and the owners of Fund shares may
purchase or redeem shares from a 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”).
TABLE
OF CONTENTS
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1
½Janus Detroit Street Trust
Janus
Henderson Small Cap Growth Alpha ETF
Ticker: JSML
Janus Henderson Small Cap Growth Alpha ETF
seeks investment results that correspond generally, before fees and expenses, to
the performance of its underlying index, the Janus Henderson Small Cap Growth
Alpha Index (the “Underlying Index”).
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FEES AND EXPENSES OF THE FUND |
This
table describes the fees and expenses that you may pay if you buy, hold and sell
shares of the Fund. Investors may pay brokerage commissions and other fees to
financial intermediaries on their purchases and sales of Fund shares, which are
not reflected in the table or in the example below.
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ANNUAL
FUND OPERATING EXPENSES (expenses that you pay each year as a
percentage of the value of your investment) |
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Management
Fees |
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0.30% |
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Other
Expenses |
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0.00% |
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Total
Annual Fund Operating Expenses |
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0.30% |
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EXAMPLE:
The Example is intended
to help you compare the cost of investing in the Fund with the cost of investing
in other funds. The Example assumes that you invest
$10,000 in the Fund for the time periods indicated and then sell all of your
shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund’s operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
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1 Year |
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3 Years |
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5 Years |
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10 Years |
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$ |
31 |
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$ |
97 |
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$ |
169 |
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$ |
381 |
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Portfolio Turnover:
The Fund pays transaction costs, such as commissions, when it buys
and sells securities (or “turns over” its portfolio). A higher portfolio
turnover rate may indicate higher transaction costs and may result in higher
taxes when Fund shares are held in a taxable account. These costs, which are not
reflected in annual fund operating expenses or in the Example, affect the Fund’s
performance. During the most recent fiscal year, the Fund’s portfolio turnover
rate was 107% of the average value of its
portfolio.
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PRINCIPAL INVESTMENT STRATEGIES |
The
Fund pursues its investment objective by normally investing at least 80% of its
net assets (plus any borrowings for investment purposes) in the securities that
comprise the Janus Henderson Small Cap Growth Alpha Index (“Underlying
Index”).
The
Underlying Index is composed of common stocks of small-sized companies that are
included in the Solactive Small Cap Index, a universe of 2,000 small-sized
capitalization stocks. The Solactive Small Cap Index uses the total public
market value, or “free-float,” capitalization of a stock to determine whether to
include such stock in the Solactive Small Cap Index. The Underlying Index is
designed to select small-sized capitalization stocks that are poised for “smart
growth” by evaluating each company’s performance in three critical areas:
growth, profitability, and capital efficiency. Using a proprietary quantitative
methodology, such stocks are scored based on fundamental measures of their
growth, profitability, and capital efficiency, and the top 10% of such eligible
stocks scoring the highest become the constituents of the Underlying Index. To
arrive at the top 10%, for each security in the stated universe, the
quantitative methodology assigns a score in each of 10 different fundamental
factors, relative to other eligible securities. The fundamental factors include
measures that the Adviser believes are tied to a stock’s outperformance relative
to other small cap stocks, and indicate a company’s performance with respect to
growth (such as the revenue growth rate over 2- 5- and 8- year periods),
profitability (such as margin expansion, profit margin and earnings per share
over time) and capital efficiency (such as returns on invested capital). The
scores for each stock within a factor are then added together across the 10
factors, with equal weighting, to arrive
2½Janus Henderson Small Cap Growth Alpha
ETF
at
an overall score for each stock. The stocks with the highest 10% of scores are
then weighted within the Underlying Index according to their market
capitalization. Finally, the stocks are sector-weighted to reflect the sector
allocation weight of Janus Henderson Venture Fund, based on its most recent
publicly available holdings. A stock may not represent more than 3% of the
Underlying Index. The Underlying Index seeks risk adjusted outperformance
relative to a market capitalization weighted universe of small-sized
capitalization growth stocks. Market capitalizations within the Underlying Index
will vary, but as of October 31, 2022, they ranged from approximately $5 million
to $6.5 billion. The Underlying Index is rebalanced on a quarterly basis based
on the methodology described
above.
The
Fund uses a “passive,” index-based approach in seeking performance that
corresponds to the performance of the Underlying Index. The Fund generally will
use a replication methodology, meaning it will invest in the securities
composing the Underlying Index in proportion to the weightings in the Underlying
Index. However, the Fund may utilize a sampling methodology under various
circumstances in which it may not be possible or practicable to purchase all of
the securities in the Underlying
Index.
The
Adviser expects that over time, if the Fund has sufficient assets, the
correlation between the Fund’s performance, before fees and expenses, and that
of the Underlying Index will be 95% or better. A figure of 100% would indicate
perfect correlation.
The
Fund may also invest in investments that are not included in the Underlying
Index, but which the Adviser believes will help the Fund track the Underlying
Index. Such investments include stocks, shares of other investment companies,
cash and cash equivalents, including affiliated or non-affiliated money market
funds (or unregistered cash management pooled investment vehicles that operate
as money market funds).
To
the extent the Underlying Index concentrates (i.e., holds 25% or more of its
total assets) in the securities of a particular industry or group of industries,
the Fund will concentrate its investments to approximately the same extent as
the Underlying Index. As of October 31, 2022, the Underlying Index did not
concentrate in a particular industry or group of industries. For more recent
information, see the Fund’s daily portfolio holdings posted on the ETF portion
of the Janus Henderson website.
The
Fund may seek to earn additional income through lending its securities to
certain qualified broker-dealers and institutions on a short-term or long-term
basis, in an amount equal to up to one-third of its total assets as determined
at the time of the loan
origination.
The
Underlying Index is compiled and administered by Janus Henderson Indices LLC
(“JH Indices” or the “Index Provider”). JH Indices is affiliated with the Fund
and the Adviser.
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PRINCIPAL INVESTMENT RISKS |
The biggest risk is that the Fund’s returns will vary,
and you could lose money. The Fund is designed for long-term
investors interested in an index-based portfolio of equity investments,
including common stocks. Common stocks tend to be more volatile than many other
investment choices. 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. The
Underlying Index focuses on the small-sized capitalization sector of the stock
market, and therefore at times the Fund may underperform the overall stock
market. Market risk may be magnified if certain social, political, economic and
other conditions and events (such as terrorism, conflicts, 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.
Equity Investing
Risk. The Fund’s investment in the securities composing
the Underlying Index involves risks of investing in a portfolio of equity
securities, such as market fluctuations, changes in interest rates and perceived
trends in stock prices.
Small-Sized Companies
Risk. The Fund’s investments in securities issued by
small-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-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. Securities issued by micro-capitalization companies tend to be
significantly more volatile, and more vulnerable to adverse business and
economic developments, than those of larger companies. For example, small- and
micro-capitalization companies may be more likely to merge with or be acquired
by another company, resulting in de-listing of the securities held by the
Fund.
3½Janus Henderson Small Cap Growth Alpha
ETF
Growth Securities Risk. Securities of companies perceived
to be “growth” companies may be more volatile than other stocks and may involve
special risks. If the perception of a company’s growth potential, based on the
quantitative methodology applied in constructing the Underlying Index, is not
realized, the securities purchased may not perform as expected, reducing the
Fund’s
returns.
In addition, because different types of stocks tend to shift in and out of favor
depending on market and economic conditions, “growth” stocks may perform
differently from the market as a whole and other types of
securities.
Investment Style
Risk. Returns from small-sized capitalization stocks
may trail returns from the overall stock market. Small-cap stocks may go through
cycles of doing better or worse than other segments of the stock market or the
stock market in general. These cycles may continue for extended periods of
time.
Concentration
Risk. The Fund’s assets will generally be concentrated
in an industry or group of industries to the extent that the Fund’s Underlying
Index concentrates in a particular industry or group of industries. To the
extent the Fund invests a substantial portion of its assets in an industry or
group of industries, market or economic factors impacting that industry or group
of industries could have a significant effect on the value of the Fund’s
investments. Companies in the same or similar industries may share common
characteristics and are more likely to react similarly to industry-specific
market or economic developments. The Fund’s performance may be more volatile
when the Fund’s investments are less diversified across industries. The Fund’s
assets will not be concentrated if the Underlying Index does not concentrate in
a particular industry or group of
industries.
Early Close/Trading
Halt Risk. An exchange or market may close or issue
trading halts on specific securities, or the ability to buy or sell certain
securities or financial instruments may be restricted, which may result in the
Fund being unable to buy or sell certain securities or financial instruments. In
such circumstances, the Fund may be unable to rebalance its portfolio, may be
unable to accurately price its investments and/or may incur substantial trading
losses.
Index Tracking
Risk. The Fund’s return may not match or achieve a high
degree of correlation with the return of the Underlying Index. To the extent the
Fund utilizes a sampling approach, it may experience tracking error to a greater
extent than if the Fund sought to replicate the Underlying Index. In addition,
the Fund may hold fewer than the total number of securities in the Underlying
Index. Further, the Fund may hold securities or other investments not included
in the Underlying Index but which the Adviser believes will help the Fund track
the Underlying Index. Such investments may not perform as
expected.
Index Provider
Risk. The Fund seeks to achieve returns that generally
correspond, before fees and expenses, to the performance of the Underlying
Index, as published by the Index Provider. There is no assurance that the Index
Provider will compile the Underlying Index accurately, or that the Underlying
Index will be determined, composed or calculated accurately. While the Index
Provider gives descriptions of what the Underlying Index is designed to achieve,
the Index Provider generally does not provide any warranty or accept any
liability in relation to the quality, accuracy or completeness of data in such
index, and it generally does not guarantee that the Underlying Index will be in
line with its methodology. The Index Provider may unilaterally take certain
actions that materially change the operation or expected composition of the
Underlying Index (including altering the frequency of index rebalances).
Additionally, errors made by the Index Provider with respect to the quality,
accuracy and completeness of the data within the Underlying Index may occur from
time to time and may not be identified and corrected by the Index Provider for a
period of time, if at all. Therefore, gains, losses or costs associated with
Index Provider errors or operational discretion will generally be borne by the
Fund and its shareholders.
Methodology and Model
Risk. Neither the Fund nor the Adviser can offer
assurances that tracking the Underlying Index will maximize returns or minimize
risk, or be appropriate for every investor seeking a particular risk profile.
Underlying Index risks include, but are not limited to, the risk that the
factors used to determine the components of the Underlying Index, as applied by
the Index Provider in accordance with the Underlying Index methodology, might
not select securities that individually, or in the aggregate, outperform the
broader small-sized capitalization universe. In addition, the Underlying Index
was designed based on historically relevant fundamental factors and may not
provide risk-adjusted outperformance in the
future.
Passive Investment
Risk. The Fund is not actively managed and therefore
the Fund might not sell shares of a security due to current or projected
underperformance of a security, industry or sector, unless that security is
removed from the Underlying Index or the selling of shares is otherwise required
upon a rebalancing of the Underlying
Index.
Portfolio Turnover
Risk. Increased portfolio
turnover may result in higher costs which may have a negative effect on the
Fund’s performance. In addition, higher portfolio turnover may result in the
acceleration of capital gains and the recognition of greater levels of
short-term capital gains, which are taxed at ordinary federal income tax rates
when distributed to shareholders.
4½Janus Henderson Small Cap Growth Alpha
ETF
Securities Lending Risk. Securities lending involves a risk
of loss because the borrower may fail to return the securities in a timely
manner or at all. If the Fund lends its securities and is unable to recover the
securities loaned, it may sell the collateral and purchase a replacement
security in the market. Lending securities entails a risk of loss to the Fund if
and to the extent that the market value of the loaned securities increases and
the collateral is not increased accordingly. Any cash received as collateral for
loaned securities will be invested in an affiliated cash management vehicle or
time deposits. This investment is subject to market appreciation or depreciation
and the Fund will bear any loss on the investment of its cash
collateral.
Exchange Listing and
Trading Issues Risk. Although Fund shares are listed
for trading on the NASDAQ (the “Exchange”), there can be no assurance that an
active trading market for such shares will develop or be maintained. The lack of
an active market for Fund shares, as well as periods of high volatility,
disruptions in the creation/redemption process, or factors affecting the
liquidity of the underlying securities held by the Fund, may result in the
Fund’s shares trading at a premium or discount to its
NAV.
Trading
in Fund shares may be halted due to market conditions or for reasons that, in
the view of the Exchange, make trading in Fund shares inadvisable. In addition,
trading is subject to trading halts caused by extraordinary market volatility
pursuant to the Exchange’s “circuit breaker” rules. There can be no assurance
that the requirements of the Exchange necessary to maintain the Fund’s listing
will continue to be met or will remain unchanged.
Fluctuation of NAV
and Market Price Risk. The NAV of the Fund’s shares
will generally fluctuate with changes in the market value of the Fund’s
securities holdings. The market prices of the Fund’s shares will generally
fluctuate in accordance with changes in the Fund’s NAV and supply and demand of
shares on the Exchange. Volatile market conditions, an absence of trading in
shares of the Fund, or a high volume of trading in the Fund, may result in
trading prices in the Fund’s shares that differ significantly from the Fund’s
NAV. Additionally, during a “flash crash,” the market prices of the Fund’s
shares may decline suddenly and significantly, resulting in Fund shares trading
at a substantial discount to NAV. Such a decline may not reflect the performance
of the portfolio securities held by the Fund. Flash crashes may cause Authorized
Participants and other market makers to limit or cease trading in the Fund’s
shares for temporary or longer periods, which may result in an increase in the
variance between market 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 periods
indicated. The table compares the Fund’s average
annual returns for the periods indicated to a broad-based securities market
index and the index the Fund seeks to track. The indices are not available for
direct investment. All figures assume reinvestment of dividends and
distributions and include the effect of the Fund’s recurring
expenses.
5½Janus Henderson Small Cap Growth Alpha
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 Small Cap Growth Alpha ETF
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Annual Total Returns (calendar
year-end) |
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Best
Quarter: 2nd Quarter
2020 34.62% Worst
Quarter: 1st Quarter
2020 –26.88% |
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Average
Annual Total Returns (periods ended 12/31/22) |
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1 Year |
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5 Year |
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Since Inception 2/23/2016 |
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Janus Henderson Small Cap Growth Alpha
ETF |
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Return Before
Taxes |
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–28.96 |
% |
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5.06 |
% |
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9.84 |
% |
Return After Taxes on
Distributions |
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–29.08 |
% |
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4.93 |
% |
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9.71 |
% |
Return After Taxes on Distributions and
Sale of Fund Shares(1) |
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–17.07 |
% |
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3.94 |
% |
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7.93 |
% |
Janus Henderson Small Cap Growth Alpha
Index(2) (reflects no
deductions for fees, expenses or taxes) |
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–28.75 |
% |
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5.37 |
% |
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10.17 |
% |
Russell 2000TM Growth
Index(2) (reflects no
deductions for fees, expenses or taxes) |
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–26.36 |
% |
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3.51 |
% |
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9.52 |
% |
(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 are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax
returns depend on your individual tax situation and may differ from those shown
in the preceding table. The after-tax return information shown above does not
apply to Fund shares held through a
tax-advantaged
account, such as a 401(k) plan or an
IRA.
Investment Adviser: Janus Henderson Investors
US LLC
Portfolio Managers: Benjamin Wang,
CFA, is Co-Portfolio Manager of the Fund, which he has co-managed since
inception.
Scott M. Weiner, DPhil, is Co-Portfolio Manager
of the Fund, which he has co-managed since inception.
|
PURCHASE AND SALE OF FUND SHARES |
Unlike
shares of traditional mutual funds, shares of the Fund are not individually
redeemable and may only be purchased or redeemed directly from the Fund at NAV
in large increments called “Creation Units” through APs. 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
6½Janus Henderson Small Cap Growth Alpha
ETF
investors
can purchase or sell shares in much smaller increments for cash in the secondary
market through a broker-dealer. These transactions, which do not involve the
Fund, are made at market prices that may vary throughout the day and differ from
the Fund’s NAV. As a result, you may pay more than NAV (at a premium) when you
purchase shares, and receive less than NAV (at a discount) when you sell shares,
in the secondary market.
Investors
purchasing or selling shares in the secondary market may also incur additional
costs, including brokerage commissions and an investor may incur costs
attributable to the difference between the highest price a buyer is willing to
pay to purchase shares of the Fund (bid) and the lowest price a seller is
willing to accept for shares of the Fund (ask) when buying or selling shares in
the secondary market (the “bid-ask spread”). Historical information regarding
the Fund’s bid/ask spread can be accessed on the Fund’s website at
janushenderson.com/performance by selecting the Fund.
The
Fund’s distributions are generally taxable, and will be taxed as ordinary income
or capital gains, unless you are investing through a tax-advantaged arrangement,
such as a 401(k) plan or an individual retirement account (in which case you may
be taxed at ordinary income tax rates upon withdrawal of your investment from
such account). A sale of Fund shares may result in a capital gain or loss.
|
PAYMENTS TO BROKER‑DEALERS AND OTHER FINANCIAL INTERMEDIARIES |
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a bank), the Adviser and/or its affiliates may pay broker-dealers or
intermediaries for the sale and/or maintenance of Fund shares and related
services. These payments may create a conflict of interest by influencing the
broker-dealer or other intermediary and your salesperson to recommend the Fund
over another investment. Ask your salesperson or visit your financial
intermediary’s website for more information.
7½Janus Henderson Small Cap Growth Alpha
ETF
FUND
SUMMARY
Janus
Henderson Small/Mid Cap Growth Alpha ETF
Ticker: JSMD
Janus Henderson Small/Mid Cap Growth Alpha ETF
seeks investment results that correspond generally, before fees and expenses, to
the performance of its underlying index, the Janus Henderson Small/Mid Cap
Growth Alpha Index (the “Underlying Index”).
|
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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|
|
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ANNUAL
FUND OPERATING EXPENSES (expenses that you pay each year as a
percentage of the value of your investment) |
|
|
|
Management
Fees |
|
|
0.30% |
|
Other
Expenses |
|
|
0.00% |
|
Total
Annual Fund Operating Expenses |
|
|
0.30% |
|
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
$10,000 in the Fund for the time periods indicated and then sell all of your
shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund’s operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
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1 Year |
|
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3 Years |
|
|
5 Years |
|
|
10 Years |
|
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$ |
31 |
|
|
$ |
97 |
|
|
$ |
169 |
|
|
$ |
381 |
|
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 89% of the average value of its
portfolio.
|
PRINCIPAL INVESTMENT STRATEGIES |
The
Fund pursues its investment objective by normally investing at least 80% of its
net assets (plus any borrowings for investment purposes) in the securities that
comprise the Janus Henderson Small/Mid Cap Growth Alpha Index (“Underlying
Index”).
The
Underlying Index is composed of common stocks of small- and medium-sized
companies that are included in the Solactive Small/Mid Cap Index, a universe of
2,500 small- and medium-sized capitalization stocks. The Solactive Small/Mid Cap
Index uses the total public market value, or “free-float,” capitalization of a
stock to determine whether to include such stock in the Solactive Small/Mid Cap
Index. The Underlying Index is designed to select small- and medium-sized
capitalization stocks that are poised for “smart growth” by evaluating each
company’s performance in three critical areas: growth, profitability, and
capital efficiency. Using a proprietary quantitative methodology, such stocks
are scored based on fundamental measures of their growth, profitability, and
capital efficiency, and the top 10% of such eligible stocks scoring the highest
become the constituents of the Underlying Index. To arrive at the top 10%, for
each security in the stated universe, the quantitative methodology assigns a
score in each of 10 different fundamental factors, relative to other eligible
securities. The fundamental factors include measures that the Adviser believes
are tied to a stock’s outperformance relative to other small/mid cap stocks, and
indicate a company’s performance with respect to growth (such as the revenue
growth rate over 2- 5- and 8- year periods), profitability (such as margin
expansion, profit margin and earnings per share over time) and capital
efficiency (such as returns on invested capital). The scores for each stock
within a factor are then added together
8½Janus Henderson Small/Mid Cap Growth
Alpha ETF
across
the 10 factors, with equal weighting, to arrive at an overall score for each
stock. The stocks with the highest 10% of scores are then weighted within the
Underlying Index according to their market capitalization. Finally, the stocks
are sector-weighted to reflect the sector allocation weight of Janus Henderson
Triton Fund, based on its most recent publicly available holdings. A stock may
not represent more than 3% of the Underlying Index. The Underlying Index seeks
risk adjusted outperformance relative to a market capitalization weighted
universe of small- and medium-sized capitalization growth stocks. Market
capitalizations within the Underlying Index will vary, but as of
October 31, 2022, they ranged from approximately $5 million to $19.66
billion. The Underlying Index is rebalanced on a quarterly basis based on the
methodology described above.
The
Fund uses a “passive,” index-based approach in seeking performance that
corresponds to the performance of the Underlying Index. The Fund generally will
use a replication methodology, meaning it will invest in the securities
composing the Underlying Index in proportion to the weightings in the Underlying
Index. However, the Fund may utilize a sampling methodology under various
circumstances in which it may not be possible or practicable to purchase all of
the securities in the Underlying Index. The Adviser expects that over time, if
the Fund has sufficient assets, the correlation between the Fund’s performance,
before fees and expenses, and that of the Underlying Index will be 95% or
better. A figure of 100% would indicate perfect
correlation.
The
Fund may also invest in investments that are not included in the Underlying
Index, but which the Adviser believes will help the Fund track the Underlying
Index. Such investments include stocks, shares of other investment companies,
cash and cash equivalents, including affiliated or non-affiliated money market
funds (or unregistered cash management pooled investment vehicles that operate
as money market funds).
To
the extent the Underlying Index concentrates (i.e., holds 25% or more of its
total assets) in the securities of a particular industry or group of industries,
the Fund will concentrate its investments to approximately the same extent as
the Underlying Index. As of October 31, 2022, the Underlying Index did not
concentrate in a particular industry or group of industries. For more recent
information, see the Fund’s daily portfolio holdings posted on the ETF portion
of the Janus Henderson website.
The
Fund may seek to earn additional income through lending its securities to
certain qualified broker-dealers and institutions on a short-term or long-term
basis, in an amount equal to up to one-third of its total assets as determined
at the time of the loan
origination.
The
Underlying Index is compiled and administered by Janus Henderson Indices LLC
(“JH Indices” or the “Index Provider”). JH Indices is affiliated with the Fund
and the Adviser.
|
PRINCIPAL INVESTMENT RISKS |
The biggest risk is that the Fund’s returns will vary,
and you could lose money. The Fund is designed for long-term
investors interested in an index-based portfolio of equity investments,
including common stocks. Common stocks tend to be more volatile than many other
investment choices. 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. The
Underlying Index focuses on the small-sized capitalization sector of the stock
market, and therefore at times the Fund may underperform the overall stock
market. Market risk may be magnified if certain social, political, economic and
other conditions and events (such as terrorism, conflicts, 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.
Equity Investing
Risk. The Fund’s investment in the securities composing
the Underlying Index involves risks of investing in a portfolio of equity
securities, such as market fluctuations, changes in interest rates and perceived
trends in stock prices.
Small- and Mid-Sized
Companies Risk. The Fund’s investments in securities
issued by small- and mid-sized companies, which can include smaller, start-up
companies offering emerging products or services, may involve greater risks than
are customarily 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. Securities issued by micro-capitalization companies tend to be
significantly more volatile, and more vulnerable to adverse business and
economic developments, than those of larger companies. For example, small- and
micro-capitalization companies may be more likely to merge with or be acquired
by another company, resulting in de-listing of the securities held by the
Fund.
9½Janus Henderson Small/Mid Cap Growth
Alpha ETF
Growth Securities
Risk. Securities of companies perceived to be “growth”
companies may be more volatile than other stocks and may involve special risks.
If the perception of a company’s growth potential, based on the quantitative
methodology applied in constructing the Underlying Index, is not realized, the
securities purchased may not perform as expected, reducing the Fund’s returns.
In addition, because different types of stocks tend to shift in and out of favor
depending on market and economic conditions, “growth” stocks may perform
differently from the market as a whole and other types of
securities.
Investment Style
Risk. Returns from small-sized capitalization stocks
may trail returns from the overall stock market. Small-cap stocks may go through
cycles of doing better or worse than other segments of the stock market or the
stock market in general. These cycles may continue for extended periods of
time.
Concentration
Risk. The Fund’s assets will generally be concentrated
in an industry or group of industries to the extent that the Fund’s Underlying
Index concentrates in a particular industry or group of industries. To the
extent the Fund invests a substantial portion of its assets in an industry or
group of industries, market or economic factors impacting that industry or group
of industries could have a significant effect on the value of the Fund’s
investments. Companies in the same or similar industries may share common
characteristics and are more likely to react similarly to industry-specific
market or economic developments. The Fund’s performance may be more volatile
when the Fund’s investments are less diversified across industries. The Fund’s
assets will not be concentrated if the Underlying Index does not concentrate in
a particular industry or group of
industries.
Early Close/Trading
Halt Risk. An exchange or market may close or issue
trading halts on specific securities, or the ability to buy or sell certain
securities or financial instruments may be restricted, which may result in the
Fund being unable to buy or sell certain securities or financial instruments. In
such circumstances, the Fund may be unable to rebalance its portfolio, may be
unable to accurately price its investments and/or may incur substantial trading
losses.
Index Tracking
Risk. The Fund’s return may not match or achieve a high
degree of correlation with the return of the Underlying Index. To the extent the
Fund utilizes a sampling approach, it may experience tracking error to a greater
extent than if the Fund sought to replicate the Underlying Index. In addition,
the Fund may hold fewer than the total number of securities in the Underlying
Index. Further, the Fund may hold securities or other investments not included
in the Underlying Index but which the Adviser believes will help the Fund track
the Underlying Index. Such investments may not perform as
expected.
Index Provider
Risk. The Fund seeks to achieve returns that generally
correspond, before fees and expenses, to the performance of the Underlying
Index, as published by the Index Provider. There is no assurance that the Index
Provider will compile the Underlying Index accurately, or that the Underlying
Index will be determined, composed or calculated accurately. While the Index
Provider gives descriptions of what the Underlying Index is designed to achieve,
the Index Provider generally does not provide any warranty or accept any
liability in relation to the quality, accuracy or completeness of data in such
index, and it generally does not guarantee that the Underlying Index will be in
line with its methodology. The Index Provider may unilaterally take certain
actions that materially change the operation or expected composition of the
Underlying Index (including altering the frequency of index rebalances).
Additionally, errors made by the Index Provider with respect to the quality,
accuracy and completeness of the data within the Underlying Index may occur from
time to time and may not be identified and corrected by the Index Provider for a
period of time, if at all. Therefore, gains, losses or costs associated with
Index Provider errors or operational discretion will generally be borne by the
Fund and its shareholders.
Methodology and Model
Risk. Neither the Fund nor the Adviser can offer
assurances that tracking the Underlying Index will maximize returns or minimize
risk, or be appropriate for every investor seeking a particular risk profile.
Underlying Index risks include, but are not limited to, the risk that the
factors used to determine the components of the Underlying Index, as applied by
the Index Provider in accordance with the Underlying Index methodology, might
not select securities that individually, or in the aggregate, outperform the
broader small- and medium-sized capitalization universe. In addition, the
Underlying Index was designed based on historically relevant fundamental factors
and may not provide risk-adjusted outperformance in the
future.
Passive Investment
Risk. The Fund is not actively managed and therefore
the Fund might not sell shares of a security due to current or projected
underperformance of a security, industry or sector, unless that security is
removed from the Underlying Index or the selling of shares is otherwise required
upon a rebalancing of the Underlying
Index.
Securities Lending Risk. Securities lending involves a risk
of loss because the borrower may fail to return the securities in a timely
manner or at all. If the Fund lends its securities and is unable to recover the
securities loaned, it may sell the collateral and purchase a replacement
security in the market. Lending securities entails a risk of loss to the Fund if
and to the extent that the market value of the loaned securities increases and
the collateral is not increased accordingly. Any cash received as collateral for
loaned securities will be invested in an affiliated cash management vehicle or
time deposits. This investment is subject to market appreciation or depreciation
and the Fund will bear any loss on the investment of its cash
collateral.
10½Janus Henderson Small/Mid Cap Growth
Alpha ETF
Exchange Listing and
Trading Issues Risk. Although Fund shares are listed
for trading on the NASDAQ (the ‘‘Exchange”), there can be no assurance that an
active trading market for such shares will develop or be maintained. The lack of
an active market for Fund shares, as well as periods of high volatility,
disruptions in the creation/redemption process, or factors affecting the
liquidity of the underlying securities held by the Fund, may result in the
Fund’s shares trading at a premium or discount to its
NAV.
Trading
in Fund shares may be halted due to market conditions or for reasons that, in
the view of the Exchange, make trading in Fund shares inadvisable. In addition,
trading is subject to trading halts caused by extraordinary market volatility
pursuant to the Exchange’s “circuit breaker” rules. There can be no assurance
that the requirements of the Exchange necessary to maintain the Fund’s listing
will continue to be met or will remain
unchanged.
Fluctuation of NAV
and Market Price Risk. The NAV of the Fund’s shares
will generally fluctuate with changes in the market value of the Fund’s
securities holdings. The market prices of the Fund’s shares will generally
fluctuate in accordance with changes in the Fund’s NAV and supply and demand of
shares on the Exchange. Volatile market conditions, an absence of trading in
shares of the Fund, or a high volume of trading in the Fund, may result in
trading prices in the Fund’s shares that differ significantly from the Fund’s
NAV. Additionally, during a “flash crash,” the market prices of the Fund’s
shares may decline suddenly and significantly, resulting in Fund shares trading
at a substantial discount to NAV. Such a decline may not reflect the performance
of the portfolio securities held by the Fund. Flash crashes may cause Authorized
Participants and other market makers to limit or cease trading in the Fund’s
shares for temporary or longer periods, which may result in an increase in the
variance between market 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 periods
indicated. The table compares the Fund’s average
annual returns for the periods indicated to a broad-based securities market
index and the index the Fund seeks to track. The indices are not available for
direct investment. All figures assume reinvestment of dividends and
distributions and include the effect of the Fund’s recurring
expenses.
The Fund’s past performance
(before and after taxes) does not necessarily indicate how it will perform in
the future. Updated performance
information is available at janushenderson.com/performance
or by calling 1-800-668-0434.
11½Janus Henderson Small/Mid Cap Growth
Alpha ETF
Janus
Henderson Small/Mid Cap Growth Alpha ETF
|
Annual Total Returns (calendar
year-end) |
|
Best
Quarter: 2nd Quarter
2020 34.59% Worst
Quarter: 1st Quarter
2020 –25.89% |
|
|
|
|
|
|
|
| |
Average
Annual Total Returns (periods ended 12/31/22) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
1 Year |
|
|
5 Year |
|
|
Since Inception 2/23/2016 |
|
Janus Henderson Small/Mid Cap Growth Alpha
ETF |
|
|
|
|
|
|
|
|
|
|
|
|
Return Before
Taxes |
|
|
–23.00 |
% |
|
|
6.49 |
% |
|
|
11.86 |
% |
Return After Taxes on
Distributions |
|
|
–23.07 |
% |
|
|
6.40 |
% |
|
|
11.76 |
% |
Return After Taxes on Distributions and
Sale of Fund Shares(1) |
|
|
–13.56 |
% |
|
|
5.08 |
% |
|
|
9.64 |
% |
Janus Henderson Small/Mid Cap Growth
Alpha Index(2) (reflects no
deductions for fees, expenses or taxes) |
|
|
–22.79 |
% |
|
|
6.86 |
% |
|
|
12.27 |
% |
Russell 2500TM Growth
Index(2) (reflects no
deductions for fees, expenses or taxes) |
|
|
–26.21 |
% |
|
|
5.97 |
% |
|
|
11.12 |
% |
(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 are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax
returns depend on your individual tax situation and may differ from those shown
in the preceding table. The after-tax return information shown above does not
apply to Fund shares held through a
tax-advantaged
account, such as a 401(k) plan or an
IRA.
Investment Adviser: Janus Henderson
Investors US LLC
Portfolio Managers: Benjamin Wang,
CFA, is Co-Portfolio Manager of the Fund, which he has co-managed since
inception.
Scott M. Weiner, DPhil, is Co-Portfolio Manager
of the Fund, which he has co-managed since inception.
12½Janus Henderson Small/Mid Cap Growth
Alpha ETF
|
PURCHASE AND SALE OF FUND SHARES |
Unlike
shares of traditional mutual funds, shares of the Fund are not individually
redeemable and may only be purchased or redeemed directly from the Fund at NAV
in large increments called “Creation Units” through APs. 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.
13½Janus Henderson Small/Mid Cap Growth
Alpha 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 and exchange-traded funds (“ETFs”)) in which a fund invests or
has invested during the period. Such amounts are less than
0.01%. |
|
ADDITIONAL INVESTMENT STRATEGIES AND GENERAL PORTFOLIO POLICIES |
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.
In addition, a Fund will provide shareholders with at least 60 days’ notice
prior to changing the 80% investment policy. 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 and may continue to purchase such
securities in order to track each Underlying Index. The “Glossary of Investment
Terms” includes descriptions of investment terms used throughout the
Prospectus.
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 the 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.
REITs
and Real Estate-Related Securities
Each
Fund may invest in equity securities of real estate-related companies to the
extent such securities are included in their respective Underlying Index. Such
companies may include those in the real estate industry or real estate-related
industries.
14½Janus Detroit Street Trust
These
securities may include common stocks, preferred stocks, and other equity
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 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 carryforwards, (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.
Securities
Lending
A
Fund may seek to earn additional income through lending its securities to
certain qualified broker-dealers and institutions on a short-term or long-term
basis, in an amount equal to up to one-third of its total assets as determined
at the time of the loan origination. When a Fund lends its securities, it
receives collateral (including cash collateral), at least equal to the value of
securities loaned. A Fund may earn income by investing this collateral in one or
more affiliated or non-affiliated cash management vehicles or in time deposits.
It is also possible that, due to a decline in the value of a cash management
vehicle in which collateral is invested, a Fund may lose money. Securities
lending involves a risk of loss because the borrower may fail to return the
securities in a timely manner or at all. If a Fund lends its securities and is
unable to recover the securities loaned, it may sell the collateral and purchase
a replacement security in the market. Lending securities entails a risk of loss
to a Fund if and to the extent that the market value of the loaned securities
increases and the collateral is not increased accordingly. Any cash received as
collateral for loaned securities will be invested in an affiliated cash
management vehicle or time deposits. This investment is subject to market
appreciation or depreciation and a Fund will bear any loss on the investment of
its cash collateral. In certain circumstances, individual loan transactions
could yield negative returns. The Adviser intends to manage a portion of the
cash collateral in an affiliated cash management vehicle and will receive an
investment advisory fee for managing such assets.
Non-Index
Investments
A
Fund may invest in investments that are not included in their respective
Underlying Index, but which the Adviser believes will help each Fund track its
Underlying Index. Such investments include common stocks, shares of other
investment companies, and cash and cash equivalents, including affiliated and
non-affiliated money market funds (including unregistered cash management pooled
investment vehicles that operate as money market funds). There may be instances
where a stock is removed from an Underlying Index but the Adviser may elect to
hold it for tax-related purposes, or where a Fund receives non-Underlying Index
stocks in a corporate action and does not sell the stocks until the next
rebalance date. The Adviser may also choose to hold non-Underlying Index stocks
due to an optimization methodology to more efficiently track an Underlying
Index. Use of an optimization methodology would entail the use of a program or
model designed to identify securities that are not included in an Underlying
Index, but would be expected to behave similarly to securities that are in the
Underlying Index.
The
value of your investment will vary over time, sometimes significantly, and you
may lose money by investing in the Funds. The Funds invest substantially all of
their assets in small-sized capitalization stocks, with respect to Janus
Henderson Small Cap Growth Alpha ETF or small- and medium-sized capitalization
stocks, with respect to Janus Henderson Small/Mid Cap Growth Alpha ETF. The
following information is intended to help you better understand some of the
risks of investing in the Funds, including those risks that are summarized in
the Fund Summary sections. This information also includes descriptions of
other
15½Janus Detroit Street Trust
risks
a Fund may be subject to as a result of additional investment strategies and
general policies that may apply to the Fund. 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 Index
Provider Risk. JH Indices, the index provider for each
Fund, is an affiliated person of the Adviser, which poses the appearance of a
conflict of interest. For example, a potential conflict could arise between an
affiliated person of the Adviser and the Funds if that entity attempted to use
information regarding changes and composition of an Underlying Index to the
detriment of the Funds. Additionally, potential conflicts could arise with
respect to the personal trading activity of personnel of the affiliated person
who may have access to, or knowledge of, pending changes to an Underlying
Index’s composition methodology or the constituent securities in an Underlying
Index prior to the time that information is publicly disseminated. If shared,
such knowledge could facilitate “front-running” (which describes an instance in
which other persons trade ahead of a Fund). Although the Adviser and JH Indices
have taken steps designed to ensure that these potential conflicts are mitigated
(e.g., via the adoption of policies and procedures that are designed to minimize
potential conflicts of interest and the implementation of informational barriers
designed to minimize the potential for the misuse of information about an
Underlying Index), there can be no assurance that such measures will be
successful.
Affiliated Underlying
Fund Risk. The Adviser may invest in certain affiliated
ETFs as investments for 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.
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 the Fund invests in an ETF,
in addition to directly bearing the expenses associated with its own operations,
it will bear a pro rata portion of the ETF’s expenses. As a result, the cost of
investing in 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
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.
Fluctuation of
NAV. The NAV of each Fund’s shares will generally
fluctuate with changes in the market value of the Fund’s securities holdings.
The market prices of shares will generally fluctuate in accordance with changes
in a Fund’s NAV and supply and demand of shares on the Exchange. It cannot be
predicted whether Fund shares will trade below, at or above their NAV. Price
differences may be due, in large part, to the fact that supply and demand forces
at work in the secondary trading market for shares will be closely related to,
but not identical to, the same forces influencing the prices of the securities
of an Underlying Index trading individually or in the aggregate at any point in
time. In addition, during periods of significant volatility, the liquidity of
the underlying securities held by a Fund may affect the Fund’s trading prices.
While the creation/redemption feature is designed to make it likely that a
Fund’s shares normally will trade close to its NAV, disruptions to creations and
redemptions may result in trading prices that differ significantly from such
Fund’s NAV. An absence of trading in shares of a Fund, or a high volume of
trading in a Fund, may result in trading prices that differ significantly from
such Fund’s NAV. If an investor purchases a Fund’s shares at a time when the
market price is at a premium to the NAV of the shares or sells at a time when
the market price is at a discount to the NAV of the shares, then the investor
may sustain losses. Further, the securities held by a Fund may
16½Janus Detroit Street Trust
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, bid-ask spreads and the resulting premium or discount to a Fund’s
shares NAV may widen. Similarly, the Exchange may be closed at times or days
when markets for securities held by the Funds are open, which may increase
bid-ask spreads and the resulting premium or discount to the Fund shares’ NAV
when the Exchange re-opens.
Index Tracking
Risk. Tracking error refers to the risk that the
Adviser may not be able to cause the Funds’ performance to match or correlate to
that of an Underlying Index, either on a daily or aggregate basis. There are a
number of factors that may contribute to a Fund’s tracking error, such as Fund
expenses, imperfect correlation between a Fund’s investments and those of the
Underlying Index, rounding of share prices, the timing or magnitude of changes
to the composition of the Underlying Index, regulatory policies, and a high
portfolio turnover rate. A Fund incurs operating expenses not applicable to its
Underlying Index and incurs costs associated with buying and selling securities,
especially when rebalancing the Fund’s securities holdings to reflect changes in
the composition of the Underlying Index. In addition, mathematical compounding
may prevent the Funds from correlating with the monthly, quarterly, annual, or
other period performance of their Underlying Indexes. Tracking error may cause a
Fund’s performance to be less than expected.
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.
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 invest. 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.
• |
|
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. |
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 a
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
17½Janus Detroit Street Trust
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 a Fund. Implementation of business continuity
plans by a Fund, the Adviser or third-party service providers in response to
disruptive events such as natural disasters, epidemics and pandemics, terrorism,
conflicts and social unrest may increase these operational risks to the Fund.
While a Fund seeks to minimize such events through internal controls and
oversight of third-party service providers, there is no guarantee that the Fund
will not suffer losses if such events occur.
Passive Investment
Risk. The Funds are not actively managed. Therefore,
unless a specific security is removed from an Underlying Index, or the selling
of shares of that security is otherwise required upon a rebalancing of such
Underlying Index pursuant to its Underlying Index methodology, a Fund generally
would not sell a security because the security’s issuer was in financial
trouble. If a specific security is removed from an Underlying Index, a Fund may
be forced to sell such security at an inopportune time or for a price other than
the security’s current market value. An investment in a Fund involves risks
similar to those of investing in equity securities traded on an exchange, such
as market fluctuations caused by such factors as economic and political
developments, changes in interest rates and perceived trends in security prices.
It is anticipated that the value of Fund shares will decline, more or less, in
correspondence with any decline in value of its Underlying Index.
An
Underlying Index may not contain the appropriate mix of securities for any
particular point in the business cycle of the overall economy, particular
economic sectors, or narrow industries within which the commercial activities of
the companies composing the portfolio securities holdings of a Fund are
conducted, and the timing of movements from one type of security to another in
seeking to replicate its Underlying Index could have a negative effect on a
Fund. Unlike with an actively managed fund, the Adviser does not use techniques
or defensive strategies designed to lessen the effects of market volatility or
to reduce the impact of periods of market decline. This means that, based on
market and economic conditions, a Fund’s performance could be lower than other
types of mutual funds that may actively shift their portfolio assets to take
advantage of market opportunities or to lessen the impact of market
declines.
Portfolio Turnover
Risk. Increased portfolio turnover may result in higher
costs for brokerage commissions, dealer mark-ups, and other transaction costs,
and may also result in taxable gains. Higher costs associated with increased
portfolio turnover also may have a negative effect on each
Fund’s performance.
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.
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
18½Janus Detroit Street Trust
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 Authorized
Participants 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.
|
INFORMATION REGARDING THE UNDERLYING INDICES |
The
Underlying Index for Janus Henderson Small Cap Growth Alpha ETF is composed of
common stocks of small-sized companies that are included in the Solactive Small
Cap Index, a universe of 2,000 small-sized capitalization stocks. The Solactive
Small Cap Index uses the total public market value, or “free-float,”
capitalization of a stock to determine whether to include such stock in the
Solactive Small Cap Index. The Underlying Index is designed to select
small-sized capitalization stocks that are poised for “smart growth” by
evaluating each company’s performance in three critical areas: growth,
profitability, and capital efficiency. Using a proprietary quantitative
methodology, such stocks are scored based on fundamental measures of their
growth, profitability, and capital efficiency, and the top 10% of such eligible
stocks scoring the highest become the constituents of the Underlying Index. To
arrive at the top 10%, for each security in the stated universe, the
quantitative methodology assigns a score in each of 10 different factors,
relative to other eligible securities. The fundamental factors include measures
that the Adviser believes are tied to a stock’s outperformance relative to other
small cap stocks, and indicate a company’s performance with respect to growth
(such as the revenue growth rate over 2- 5- and 8- year periods), profitability
(such as margin expansion, profit margin and earnings per share over time) and
capital efficiency (such as returns on invested capital). Each stock in the
eligible universe will receive a point total equal to the decile rank of the
stock for a given factor. For example, if a stock is in the top decile for a
given factor, it will receive 10 points for that factor. If the stock is in the
lowest decile, it will receive 1 point. For each factor, a threshold is
established, and to the extent a stock’s score within a factor meets or exceeds
the threshold, it will receive additional points. A high threshold means that
exceeding that threshold is relatively difficult for a stock to achieve, and as
a result will receive more bonus points than if the threshold were lower. For
detailed information on how stocks are scored, see the Janus Henderson Small Cap
Growth Alpha Index Methodology document, available at the Index Provider’s
website.
The
Underlying Index for Janus Henderson Small/Mid Cap Growth Alpha ETF is composed
of common stocks of small- and medium-sized companies that are included in the
Solactive Small/Mid Cap Index, a universe of 2,500 small-and medium-sized
capitalization stocks. The Solactive Small/Mid Cap Index uses the total public
market value, or “free-float,” capitalization of a stock to determine whether to
include such stock in the Solactive Small/Mid Cap Index. The Underlying Index is
designed to select small- and medium-sized capitalization stocks that are poised
for “smart growth” by evaluating each company’s performance in three critical
areas: growth, profitability, and capital efficiency. Using a proprietary
quantitative methodology, such stocks are scored based on fundamental measures
of their growth, profitability, and capital efficiency, and the top 10% of such
eligible stocks scoring the highest become the constituents of the Underlying
Index. To arrive at the top 10%, for each security in the stated universe, the
quantitative methodology assigns a score in each of 10 different factors,
relative to other eligible securities. The fundamental factors include measures
that the Adviser believes are tied to a stock’s outperformance relative to other
small/mid cap stocks, and indicate a company’s performance with respect to
growth (such as the revenue growth rate over 2- 5- and 8‑year periods),
profitability (such as margin expansion, profit margin and earnings per share
over time) and capital efficiency (such as returns on invested capital). Each
stock in the eligible universe will receive a point total
19½Janus Detroit Street Trust
equal
to the decile rank of the stock for a given factor. For example, if a stock is
in the top decile for a given factor, it will receive 10 points for that factor.
If the stock is in the lowest decile, it will receive 1 point. For each factor,
a threshold is established, and to the extent a stock’s score within a factor
meets or exceeds the threshold, it will receive additional points. A high
threshold means that exceeding that threshold is relatively difficult for a
stock to achieve, and as a result will receive more bonus points than if the
threshold were lower. For detailed information on how stocks are scored, see the
Janus Henderson Small/Mid Cap Growth Alpha Index Methodology document, available
at the Index Provider’s website.
The
scores for each stock within a factor are then added together across the 10
factors, with equal weighting, to arrive at an overall score for each stock.
These stocks with the highest 10% of scores are then weighted within each
Underlying Index, respectively, according to their market capitalization.
Finally, the stocks are sector-weighted to reflect the sector allocation weight
of Janus Henderson Venture Fund, for Janus Henderson Small Cap Growth Alpha ETF,
and Janus Henderson Triton Fund, for Janus Henderson Small/Mid Cap Growth Alpha
ETF, based on their most recent publicly available holdings. A stock may not
represent more than 3% of an Underlying Index. Each Underlying Index seeks risk
adjusted outperformance relative to a market capitalization weighted universe of
small-and medium-sized capitalization growth stocks. Market capitalizations
within each Underlying Index will vary, but as of October 31, 2022, they ranged
from approximately $5 million to $6.5 billion for the Janus Henderson Small Cap
Growth Alpha Index, and approximately $5 million to $19.66 billion for the Janus
Henderson Small/Mid Cap Growth Alpha Index. From time to time, and often as the
result of specific corporate actions, the Solactive Small Cap Index and
Solactive Small/Mid Cap Index (and as a result each Underlying Index) may
temporarily include companies that are either smaller or larger than are
typically considered to be either small- and/or mid-sized capitalization. Each
Underlying Index is rebalanced on a quarterly basis based on the methodology
described above.
The
Underlying Indices are compiled and administered by JH Indices, an affiliate of
each Fund and the Adviser.
20½Janus Detroit Street Trust
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 the Funds’ investment portfolios and furnishes
continuous advice and recommendations concerning the Funds’ investments. The
Adviser also provides certain administration and other services and is
responsible for other business affairs of each Fund.
The
Adviser (together with its predecessors and affiliates) has served as investment
adviser to Janus Henderson mutual funds since 1970 and currently serves as
investment adviser to all of the Janus Henderson mutual funds, 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.
The
Adviser has received an exemptive order from the Securities and Exchange
Commission (the “SEC”) that permits the Adviser, subject to the approval of the
Trustees, to appoint or replace certain subadvisers to manage all or a portion
of the Fund’s assets and enter into, amend, or terminate a subadvisory agreement
with certain subadvisers without obtaining shareholder approval (a
“manager-of-managers structure”). The manager-of-managers structure applies to
subadvisers that are not affiliated with the Trust or the Adviser
(“non-affiliated subadvisers”), as well as any subadviser that is an indirect or
direct “wholly-owned subsidiary” (as such term is defined by the 1940 Act) of
the Adviser or of another company that, indirectly or directly, wholly owns the
Adviser (collectively, “wholly-owned subadvisers”).
Pursuant
to the order, the Adviser, with the approval of the Trustees, has the discretion
to terminate any subadviser and allocate and reallocate the Fund’s assets among
the Adviser and any other non-affiliated subadvisers or wholly-owned subadvisers
(including terminating a non-affiliated subadviser and replacing it with a
wholly-owned subadviser). The Adviser, subject to oversight and supervision by
the Trustees, has responsibility to oversee any subadviser to the Fund and to
recommend for approval by the Trustees, the hiring, termination, and replacement
of subadvisers for the Fund. The order also permits the Fund to disclose
subadvisers’ fees only in the aggregate in the SAI. In the event that the
Adviser hires a new subadviser pursuant to the manager-of-managers structure,
the Fund would provide shareholders with information about the new subadviser
and subadvisory agreement within 90 days.
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 the Funds’
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, 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 each Fund must
pay.
The
following table reflects each Fund’s contractual Management Fee rate (expressed
as an annual rate). 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) |
|
Janus
Henderson Small Cap Growth Alpha ETF |
|
$0-$500 Million
Next
$500 Million
Over $1 Billion |
|
|
0.30
0.25
0.20 |
|
Janus
Henderson Small/Mid Cap Growth Alpha ETF |
|
$0-$500 Million |
|
|
0.30 |
|
| |
Next $500 Million |
|
|
0.25 |
|
|
|
Over $1 Billion |
|
|
0.20 |
|
The
chart below shows the Funds’ hypothetical, blended fee rate based on the Funds’
daily net assets at varying asset levels.
21½Janus Detroit Street Trust
|
| |
Fund Assets |
|
Effective Blended Rate Management
Fee (%) (annual rate) |
$500
Million |
|
0.300 |
$750
Million |
|
0.283 |
$1.0
Billion |
|
0.275 |
$1.25
Billion |
|
0.260 |
$1.5
Billion |
|
0.250 |
$2.0
Billion |
|
0.238 |
$2.5
Billion |
|
0.230 |
$3.0
Billion |
|
0.225 |
$4.0
Billion |
|
0.219 |
$5.0
Billion |
|
0.215 |
$6.0
Billion |
|
0.213 |
For
the fiscal year ended October 31, 2022, the aggregate fee paid to the
Adviser, as a percentage of average net assets by each Fund, was 0.30%. 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 Small Cap Growth Alpha ETF and Janus Henderson Small/Mid Cap Growth
Alpha ETF
Co-Portfolio
Managers Benjamin Wang and Scott M. Weiner 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.
Benjamin
Wang, CFA, is Co-Portfolio Manager of Janus Henderson Small Cap
Growth Alpha ETF and Janus Henderson Small/Mid Cap Growth Alpha ETF, which he
has co-managed since their inceptions. He is also Portfolio Manager of other
Janus Henderson accounts. Mr. Wang holds a Bachelor of Science degree and a
Master of Engineering in Computer Science from the Massachusetts Institute of
Technology, and a Master of Science degree in Financial Engineering from
Columbia University. Mr. Wang holds the Chartered Financial Analyst
designation.
Scott M.
Weiner, DPhil, is Co-Portfolio Manager of the Janus Henderson
Small Cap Growth Alpha ETF and Janus Henderson Small/Mid Cap Growth Alpha ETF,
which he has co-managed since their inceptions. He is also Portfolio Manager of
other Janus Henderson accounts. Mr. Weiner holds an Economics degree from
the Wharton School of the University of Pennsylvania, a Master’s degree in
Economics from the University of Oxford, and also received his Doctorate in
Economics from the University of Oxford.
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), is
included in the Funds’ SAI.
22½Janus Detroit Street Trust
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.
23½Janus Detroit Street Trust
OTHER
INFORMATION
|
DISTRIBUTION OF THE FUNDS |
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.
JH
Indices is the Index Provider for each Underlying Index. The Adviser has entered
into a license agreement with JH Indices to use each Underlying Index. JH
Indices are affiliated with each Fund and the Adviser. This affiliation may
create potential conflicts for JH Indices as it may have an interest in the
performance of each Fund, which could motivate it to alter the index
methodologies for each Underlying Index. JH Indices has adopted procedures that
it believes are reasonably designed to mitigate these and other potential
conflicts.
Disclaimers
JH
Indices is the licensor of certain trademarks, service marks, and trade
names.
Neither
JH Indices nor any of its affiliates make any representation or warranty,
express or implied, to the owners of the Funds or any member of the public
regarding the advisability of investing in securities generally or in the Funds
particularly or the ability of an Underlying Index to track general market
performance. Each Underlying Index is determined, composed, and calculated by JH
Indices without regard to the Adviser or the Funds. JH Indices has no obligation
to take the needs of the Adviser or the owners of the Funds into consideration
in determining, composing, or calculating each Underlying Index. JH Indices is
not responsible for and has not participated in the determination of the timing
of, prices at, or quantities of the Funds to be issued or in the determination
or calculation of the equation by which the Funds are to be converted into
cash.
ALTHOUGH
JH INDICES SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF EACH UNDERLYING INDEX FROM SOURCES WHICH IT CONSIDERS RELIABLE,
IT DOES NOT GUARANTEE THE QUALITY, ACCURACY AND/OR THE COMPLETENESS OF EACH
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN AND SHALL HAVE NO LIABILITY FOR
ERRORS OR OMISSIONS OF ANY KIND RELATED TO EACH UNDERLYING INDEX OR DATA. JH
INDICES MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY
THE ADVISER, OWNERS OF THE FUNDS, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF
EACH UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS
LICENSED TO THE ADVISER FOR ANY OTHER USE. JH INDICES MAKES NO EXPRESS OR
IMPLIED WARRANTIES, AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO EACH
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL IT HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.
The
Adviser does not guarantee the accuracy and/or the completeness of either
Underlying Index or any data included therein, and the Adviser shall have no
liability for any errors, omissions or interruptions therein. The Adviser makes
no warranty, express or implied, as to results to be obtained by the Funds,
owners of the shares of the Funds or any other person or entity from the use of
each Underlying Index or any data included therein. The Adviser makes no express
or implied warranties, and expressly disclaims all warranties of merchantability
or fitness for a particular purpose or use with respect to either Underlying
Index or any data included therein. Without limiting any of the foregoing, in no
event shall the Adviser have any liability for any special, punitive, direct,
indirect or consequential damages (including lost profits) arising out of
matters relating to the use of either Underlying Index even if notified of the
possibility of such damages.
24½Janus 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 improve Underlying Index tracking or to comply with the
distribution requirements of the Internal Revenue Code. The date you receive
your distribution may vary depending on how your intermediary processes trades.
Dividend payments are made through Depository Trust Company (“DTC”) participants
and indirect participants to beneficial owners then of record with proceeds
received from 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 a Fund’s 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 a Fund and capital gains from any sale or exchange of
Fund shares. A 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 a 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”).
25½Janus Detroit Street Trust
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 financial 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.
A
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 a 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.
26½Janus 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 JSML for Janus Henderson Small Cap Growth
Alpha ETF and JSMD for Janus Henderson Small/Mid Cap Growth Alpha 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.
27½Janus 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 and the imposition of or
increase in the 12b-1 fee is first approved by each Fund’s shareholders. 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 THE ADVISER OR ITS AFFILIATES |
From
their own assets, the Adviser or its affiliates pay selected brokerage firms or
other financial intermediaries for making certain funds available to their
clients or otherwise distributing, promoting or marketing the funds. The Adviser
or its affiliates also make payments to one or more intermediaries for
information about transactions and holdings in the funds, such as the amount of
fund shares purchased, sold or held through the intermediary and or its
salespersons, the intermediary platform(s) on which shares are transacted and
other information related to the funds. Payments made by the Adviser and its
affiliates may eliminate or reduce trading commissions that the intermediary
would otherwise charge its customers or its salespersons in connection with the
purchase or sale of certain funds. Payment by the Adviser or its affiliates to
eliminate or reduce a trading commission creates an incentive for salespersons
of the intermediary to sell the Janus Henderson funds over other funds for which
a commission would be charged. The amount of these payments is determined from
time to time by the Adviser, may be substantial, and may differ for different
intermediaries. The Adviser may determine to make payments based on any number
of factors or metrics. For example, the Adviser may make payments at year-end
and/or other intervals in a fixed amount, an amount based upon an intermediary’s
services at defined levels, an amount based upon the total assets represented by
funds subject to arrangements with the intermediary, or an amount based on the
intermediary’s net sales of one or more funds in a year or other period, any of
which arrangements may include an agreed-upon minimum or maximum payment, or any
combination of the foregoing. Payments based primarily on sales create an
incentive to make new sales of shares, while payments based on assets create an
incentive to retain previously sold shares. The Adviser currently maintains
asset-based agreements with certain intermediaries on behalf of the Trust. The
amount of compensation paid by the Adviser varies from intermediary to
intermediary. More information regarding these payments is contained in the
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
28½Janus Detroit Street Trust
analysis
tools, data, business planning and strategy sessions with intermediary
personnel, information on industry- or platform-specific developments, trends
and service providers, and other marketing-related services. Such payments may
be in addition to, or in lieu of, the payments described above. These payments
are intended to promote the sales of Janus Henderson funds and to reimburse
financial intermediaries, directly or indirectly, for the costs that they or
their salespersons incur in connection with educational seminars, meetings, and
training efforts about the Janus Henderson funds to enable the intermediaries
and their salespersons to make suitable recommendations, provide useful
services, and maintain the necessary infrastructure to make the Janus Henderson
funds available to their customers.
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 the NASDAQ (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
29½Janus Detroit Street Trust
intermediary
may temporarily limit additional share purchases. In addition, your financial
intermediary may close an account if it is unable to verify your identity.
Please contact your financial intermediary if you need additional assistance
when completing your application or additional information about your financial
intermediary’s Anti-Money Laundering Program.
In
an effort to ensure compliance with this law, the Adviser’s Anti-Money
Laundering Program (the “Program”) provides for the development of internal
practices, procedures and controls, designation of anti-money laundering
compliance officers, an ongoing training program, and an independent audit
function to determine the effectiveness of the Program.
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
30½Janus Detroit Street Trust
close.
Therefore, the intra-day net asset value should not be viewed as a “real-time”
update of the NAV, which is computed only once a day. The intra-day net asset
value is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities and instruments included in 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 a Fund of shares issued by registered
investment companies (including other ETFs) and business development companies
(“BDCs”) and the purchase or acquisition of Fund shares by registered investment
companies, BDCs, and investment vehicles relying on Section 3(c)(1) or
3(c)(7) of the 1940 Act are subject to the restrictions set forth in
Section 12(d)(1) of the 1940 Act, except where an exemption is available,
including as provided in Sections 12(d)(1)(F) and (G) and Rule 12d1-4
thereunder. Rule 12d1-4 permits registered investment companies and BDCs to
invest in Fund shares beyond the limits in Section 12(d)(1)(A), subject to
certain terms and conditions, including that the registered investment company
or BDC first enter into a written agreement with the Trust regarding the terms
of the investment, among other conditions.
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
31½Janus Detroit Street Trust
frequent
creation and redemption activity. For these reasons, the Trustees of each Fund
have determined that it is not necessary to adopt policies and procedures to
detect and deter frequent trading and market timing of Fund shares. However,
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 each Fund’s
shareholders.
For
additional information on these disclosures and the availability of portfolio
holdings information, please refer to the Funds’ SAI.
32½Janus Detroit Street Trust
|
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.
33½Janus Detroit Street Trust
FINANCIAL
HIGHLIGHTS
The
financial highlights table is intended to help you understand the Funds’
financial performance for each fiscal period shown. Items “Net asset value,
beginning of period” through “Net asset value, end of period” reflect financial
results for a single Fund share. The information for the fiscal periods shown
has been audited by PricewaterhouseCoopers LLP, whose report, along with the
Funds’ financial statements, is included in the Annual Report, which is
available upon request, and incorporated by reference into the SAI.
The
total returns in the table represent the rate that an investor would have earned
(or lost) on an investment in the Funds (assuming reinvestment of all dividends
and distributions).
Janus
Henderson Small Cap Growth Alpha ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For
a share outstanding during each year or period ended
October 31 |
|
|
2022 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2018 |
|
Net
Asset Value, Beginning of Period |
|
|
$67.08 |
|
|
|
$48.06 |
|
|
|
$43.10 |
|
|
|
$39.59 |
|
|
|
$36.05 |
|
|
|
|
|
| |
Income/(Loss) from Investment
Operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income/(loss)(1) |
|
|
0.28 |
|
|
|
0.32 |
|
|
|
0.10 |
|
|
|
0.20 |
|
|
|
0.20 |
|
Net
realized and unrealized gain/(loss) |
|
|
(19.79) |
|
|
|
19.03 |
|
|
|
4.97 |
|
|
|
3.51 |
|
|
|
3.57 |
|
Total
from Investment Operations |
|
|
(19.51) |
|
|
|
19.35 |
|
|
|
5.07 |
|
|
|
3.71 |
|
|
|
3.77 |
|
|
|
|
|
| |
Less Dividends and
Distributions: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Dividends
(from net investment income) |
|
|
(0.20) |
|
|
|
(0.33) |
|
|
|
(0.11) |
|
|
|
(0.20) |
|
|
|
(0.23) |
|
Total
Dividends and Distributions |
|
|
(0.20) |
|
|
|
(0.33) |
|
|
|
(0.11) |
|
|
|
(0.20) |
|
|
|
(0.23) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Asset Value, End of Period |
|
|
$47.37 |
|
|
|
$67.08 |
|
|
|
$48.06 |
|
|
|
$43.10 |
|
|
|
$39.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Return |
|
|
(29.11)% |
|
|
|
40.30% |
|
|
|
11.79% |
|
|
|
9.43% |
|
|
|
10.49% |
(2) |
Net
assets, End of Period (in thousands) |
|
|
$75,884 |
|
|
|
$147,706 |
|
|
|
$52,958 |
|
|
|
$34,563 |
|
|
|
$25,816 |
|
Average
Net Assets for the Period (in thousands) |
|
|
$103,942 |
|
|
|
$123,640 |
|
|
|
$45,900 |
|
|
|
$30,102 |
|
|
|
$17,444 |
|
Ratios
to Average Net Assets |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Ratio
of Gross Expenses |
|
|
0.30% |
|
|
|
0.30% |
|
|
|
0.32% |
|
|
|
0.35% |
|
|
|
0.50% |
|
Ratio
of Net Investment Income/(Loss) |
|
|
0.52% |
|
|
|
0.48% |
|
|
|
0.23% |
|
|
|
0.49% |
|
|
|
0.50% |
|
Portfolio
Turnover Rate(3) |
|
|
107% |
|
|
|
135% |
|
|
|
78% |
|
|
|
104% |
|
|
|
84% |
|
(1) |
Per
share amounts are calculated based on average shares outstanding during
the year or period. |
(2) |
The
return includes adjustments in accordance with generally accepted
accounting principles required at period end
date. |
(3) |
Portfolio
turnover rate excludes securities received or delivered from in-kind
processing of creation or redemptions. |
34½Janus Detroit Street Trust
Janus
Henderson Small/Mid Cap Growth Alpha ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For
a share outstanding during each year or period ended October
31 |
|
|
2022 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2018 |
|
Net
Asset Value, Beginning of Period |
|
|
$67.73 |
|
|
|
$52.35 |
|
|
|
$44.11 |
|
|
|
$40.81 |
|
|
|
$36.77 |
|
|
|
|
|
| |
Income/(Loss) from Investment
Operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income/(loss)(1) |
|
|
0.21 |
|
|
|
0.21 |
|
|
|
0.11 |
|
|
|
0.19 |
|
|
|
0.15 |
|
Net
realized and unrealized gain/(loss) |
|
|
(14.83) |
|
|
|
15.38 |
|
|
|
8.26 |
|
|
|
3.30 |
|
|
|
4.03 |
|
Total
from Investment Operations |
|
|
(14.62) |
|
|
|
15.59 |
|
|
|
8.37 |
|
|
|
3.49 |
|
|
|
4.18 |
|
|
|
|
|
| |
Less Dividends and
Distributions: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Dividends
(from net investment income) |
|
|
(0.19) |
|
|
|
(0.21) |
|
|
|
(0.13) |
|
|
|
(0.19) |
|
|
|
(0.14) |
|
Total
Dividends and Distributions |
|
|
(0.19) |
|
|
|
(0.21) |
|
|
|
(0.13) |
|
|
|
(0.19) |
|
|
|
(0.14) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Asset Value, End of Period |
|
|
$52.92 |
|
|
|
$67.73 |
|
|
|
$52.35 |
|
|
|
$44.11 |
|
|
|
$40.81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Return |
|
|
(21.60)% |
|
|
|
29.81% |
|
|
|
19.01% |
|
|
|
8.60% |
|
|
|
11.37% |
|
Net
assets, End of Period (in thousands) |
|
|
$172,098 |
|
|
|
$201,635 |
|
|
|
$115,268 |
|
|
|
$97,121 |
|
|
|
$51,099 |
|
Average
Net Assets for the Period (in thousands) |
|
|
$175,280 |
|
|
|
$174,649 |
|
|
|
$105,905 |
|
|
|
$71,903 |
|
|
|
$36,173 |
|
Ratios
to Average Net Assets |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Ratio
of Gross Expenses |
|
|
0.30% |
|
|
|
0.30% |
|
|
|
0.32% |
|
|
|
0.35% |
|
|
|
0.50% |
|
Ratio
of Net Investment Income/(Loss) |
|
|
0.36% |
|
|
|
0.33% |
|
|
|
0.23% |
|
|
|
0.43% |
|
|
|
0.37% |
|
Portfolio
Turnover Rate(2) |
|
|
89% |
|
|
|
102% |
|
|
|
83% |
|
|
|
80% |
|
|
|
79% |
|
(1) |
Per
share amounts are calculated based on average shares outstanding during
the year or period. |
(2) |
Portfolio
turnover rate excludes securities received or delivered from in-kind
processing of creation or redemptions. |
35½Janus 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 Funds may
invest, as well as some general investment terms. The Funds may invest in these
instruments to the extent permitted by their investment objective and policies.
The Funds are not limited by this discussion and may invest in any other types
of instruments not precluded by the policies discussed elsewhere in this
Prospectus.
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.
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.
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.
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.
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.
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 GSEs. 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.
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
36½Janus Detroit Street Trust
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 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 |
Cash sweep program
is an arrangement in which the Fund’s uninvested cash balance is
used to purchase shares of affiliated or non-affiliated money market funds or
cash management pooled investment vehicles that operate pursuant to the
provisions of the Investment Company Act of 1940, as amended (the “1940 Act”)
that govern the operation of money market funds at the end of each day.
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.
37½Janus Detroit Street Trust
You
can make inquiries and request other information, including a Statement of
Additional Information, annual report, or semiannual report (as they become
available), free of charge, by contacting your plan sponsor, broker-dealer, or
financial intermediary, or by contacting a representative at 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 each 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 each 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:
publicinfo@sec.gov.
janushenderson.com/info
151
Detroit Street
Denver,
CO 80206-4805
The
Trust’s Investment Company Act File No. is 811-23112.