Investment Discipline Page for Alternative Funds
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Alternative Funds
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What is an alternative asset?
Alternative assets are those that are outside the traditional three asset classes - stocks, bonds, and cash. Historically, alternative assets have performed differently than traditional assets - meaning they have increased when the broad equity market declined, or they have declined when the equity market has done well. This behavior pattern is known as non-correlated risk and return, and it can potentially provide an important source of diversification for your portfolio.

Why might you want non-correlated assets in your portfolio?
Non-correlated assets offer a source of diversification for your portfolio and an opportunity for your portfolio to experience lower volatility over the long-term. Historically, combining assets with different risk and return patterns has resulted in a lower level of portfolio volatility over time. As an example, equity and fixed income assets generally show low historical correlation with each other. Combining these assets in a portfolio seeks to provide a portfolio with lower volatility - resulting in a smoother ride over the long term. Keep in mind, however, that most experts believe that diversification offers limited protection against systematic risk or the potential that virtually everything will go down at the same time. 

Types of alternative assets
Just about anything that performs inversely to stocks, bonds and cash can be considered an alternative asset. Institutions may invest in real estate, such as office buildings, malls or apartments as an alternative asset. Others might consider physical commodities such as gold or oil as alternative assets. Hedge funds, lightly-regulated and with limited liquidity, are considered "alternative strategies" in that the managers will often invest in traditional assets (equity, fixed income) but will practice strategies that have historically shown low correlation to the broad markets. By nature, alternative investments are less liquid and tend to be more volatile than traditional asset classes.

Who invests in alternative assets?
Historically, institutions have been the primary investors in alternative assets, as they typically have the investable assets, time horizon, tolerance for risk and the sophistication to understand the asset class. High-net-worth individual investors have also used alternative assets to help reduce volatility in their portfolios. Recently alternative assets have become available to the broader public through mutual funds.

Why consider real estate as your alternative asset?
Real estate has historically been one of the few alternative assets available to individual investors, typically in the form of a house or rental property. Today investors can diversify by seeking mutual funds that invest in real estate-related companies, including real estate developers and real estate investment trusts (REITs). While Janus mutual funds are not allowed to invest in physical real estate properties, real estate-related companies over the long term have showed the same historical low correlation to both stocks and bonds. Further, their cash flows are generally tied to long-term leases, which have historically not been subject to the same volatility as the stock or bond markets, or local economies.

Why Janus for real estate?
The key to valuing real estate, it's been said, is simple: location, location, location. In the real estate industry, Janus' hands-on, grass-roots research effort involves visiting properties, walking through shopping centers, and talking with clients, customers and competitors, all to gain a greater understanding of how to value a property and determine whether a business or development is likely to be successful. While Janus Global Real Estate Fund cannot directly invest in real estate, understanding how to value real estate assets is an important part of investing in real estate-related companies.

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Funds at a Glance

* Closed to new investors.

Please consider the charges, risks, expenses and investment objectives carefully before investing. Please see a prospectus , or if available, a summary prospectus containing this and other information. Read it carefully before you invest or send money.

Past performance is no guarantee of future results.

Investing involves risk, including risk of loss. Generally, among asset classes stocks are more volatile than bonds or short term investments. Alternative asset classes can be more volatile than both stocks and bonds. This volatility is exaggerated in foreign markets.

There is no assurance that the investment process will consistently lead to successful investing or that the stated objectives will be met.

Diversification and asset allocation do not assure a profit or eliminate the risk of experiencing investment losses. Investment decisions should be based on an individual's own goals, time horizon and tolerance for risk.

Alternative investments include, but are not limited to, commodities related securities, real estate securities, and other securities less correlated to the market, and are subject to inherent risks that an individual investor would need to address.

Janus Global Real Estate Fund may invest in derivatives which can be highly volatile and involve additional risks than if the underlying securities were held directly by the Fund. Such risks include gains or losses which, as a result of leverage, can be substantially greater than the derivatives' original cost. There is also a possibility that derivatives may not perform as intended which can reduce opportunity for gain or result in losses by offsetting positive returns in other securities the Fund owns.

A Fund's performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments, and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.

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