INTECH US Managed Volatility Fund


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INTECH U.S. Managed Volatility Fund 1Q17 Performance Commentary (Class I Shares)

Summary 

The INTECH U.S. Managed Volatility Fund (I Shares) underperformed the Russell 1000® Index for the quarter. The U.S. equity market recorded its biggest quarterly gain since 2015 with the Russell 1000 Index posting a return of 6.03% for the quarter. While the information technology, health care, and consumer discretionary sectors were the strongest performers, the energy sector became the weakest performing sector during the quarter after strongly outperforming in 2016. The financials sector, another strong performer during the second half of last year, also underperformed for the quarter.



The Fund’s average overweight to lower beta stocks detracted during the quarter as lower beta stocks underperformed the overall market as represented by the Russell 1000 Index on average.



From a sector perspective, an average underweight allocation to the information technology sector and overweight allocation to the financials sector detracted from relative performance during the quarter.



INTECH’s U.S. Managed Volatility strategy’s optimization approach, which targets an excess return while minimizing the absolute- risk, involves a dynamic adjustment to the market environment whereby the strategy adjusts the volatility reduction to market conditions. In periods of volatile markets, the portfolio will focus on volatility reduction offering a smoother ride and an increased downside protection and in periods of lower volatility, the portfolio will focus on alpha generation.

As of March 31, 2017

Fund Performance (%)

1Q17

1 year

3 year

5 year

10 year

Since Inception (12/30/05)

Class I Shares

5.49

9.65

7.88

13.18

6.14

7.25

Class T Shares

5.33

9.37

7.68

12.94

5.83

6.91

Class A Shares @ NAV

5.38

9.33

7.57

12.83

5.86

6.97

Class A Shares @ MOP

-0.66

3.00

5.46

11.50

5.23

6.40

Russell 1000® Index

6.03

17.43

9.99

13.26

7.58

8.20

Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 877.33JANUS (52687) or visit janus.com/advisor/mutual-funds. Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns. Expense Ratios: Class I Shares: Gross 0.65% and Net 0.65% | Class T Shares: Gross 0.86% and Net 0.86% | Class A Shares: Gross 0.93% and Net 0.93%. Net expense ratios reflect the expense waiver, if any, Janus Capital has contractually agreed to through 11/1/17.

Returns include reinvestment of dividends and capital gains.

Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary prospectus containing this and other information, please contact your investment professional or download the file from janus.com/info. Read it carefully before you invest or send money. Continued on back page.

INTECH U.S. Managed Volatility Fund 1Q17 Performance Commentary (Class I Shares)

Quarterly Performance Attribution by Standard Deviation (%) INTECH U.S. Managed Volatility Fund

Russell 1000® Index

Attribution

Std. Dev. Range

Avg. Std. Dev.

Avg. Weight

Total Return

Avg. Std. Dev.

Avg. Weight

Total Return

Avg. Weight Difference

Allocation Effect

Residual (Selection Effect)

Total Effect

Quintile 1 (high) Quintile 2 Quintile 3 Quintile 4 Quintile 5 (low) Total

15.90 16.47 10.41 7.90 7.14 8.48

11.35 14.15 14.91 22.54 36.89 100.00

6.68 2.24 6.70 6.97 5.47 5.67

15.53 13.14 10.36 8.73 7.05 8.62

6.84 12.09 15.64 25.00 40.43 100.00

2.53 4.43 7.64 8.47 5.01 6.03

4.51 2.06 -0.73 -2.46 -3.54 ---

-0.07 -0.07 0.01 -0.08 0.03 -0.19

0.44 -0.33 -0.10 -0.32 0.15 -0.16

0.37 -0.40 -0.09 -0.40 0.18 -0.35



As of March 31, 2017, the Fund exhibited a 1.6% estimated volatility reduction versus the Russell 1000® Index per the Standard Deviation statistics in the table above.



An average overweight allocation to high volatility stocks (quintile 1) detracted from the fund’s relative performance during the period. Selection effect also detracted from the Fund’s relative performance during the quarter.

Quarterly Performance Attribution by Beta INTECH U.S. Managed Volatility Fund

Russell 1000® Index

Attribution

Beta Range

Avg. Beta

Avg. Weight (%)

Total Return (%)

Avg. Beta

Avg. Weight (%)

Total Return (%)

Avg. Weight Difference (%)

Allocation Effect (%)

Residual (Selection Effect) (%)

Total Effect (%)

Quintile 1 (high) Quintile 2 Quintile 3 Quintile 4 Quintile 5 (low) Total

1.82 1.30 1.04 0.83 0.40 0.79

12.67 12.92 16.79 16.06 41.39 100.00

2.59 5.24 7.08 7.83 5.83 5.67

1.76 1.30 1.06 0.85 0.51 1.00

11.65 15.99 25.08 24.39 22.88 100.00

3.57 5.53 10.11 4.32 5.10 6.03

1.02 -3.07 -8.29 -8.33 18.51 ---

-0.08 -0.01 -0.33 0.14 -0.28 -0.58

-0.14 -0.07 -0.47 0.56 0.35 0.23

-0.22 -0.08 -0.81 0.70 0.07 -0.35



The Fund’s average overweight to lower beta stocks (beta quintile 5) had a negative impact on relative performance this quarter, as lower beta stocks underperformed the Russell 1000 Index on average during the period.



The estimated beta of the Fund of 0.79 reflects the current defensive positioning of the Fund.

Quarterly Performance Attribution by Market Capitalization (%) INTECH U.S. Managed Volatility Fund

Market Capitalization Range Over $100B $25B to $100B $15B to $25B $2B to $15B Under $2B Total

Russell 1000® Index

Average Weight

Total Return

Average Weight

7.09 26.14 16.66 50.10 --100.00

7.49 5.13 5.30 5.71 --5.67

38.26 33.82 9.20 18.60 0.11 100.00

Attribution

Total Return

Avg. Weight Difference

Allocation Effect

Residual (Selection Effect)

Total Effect

6.95 5.38 6.02 5.28 7.77 6.03

-31.16 -7.68 7.46 31.50 -0.11 ---

-0.26 0.05 0.01 -0.20 -0.01 -0.42

0.08 -0.06 -0.12 0.17 --0.06

-0.18 -0.02 -0.11 -0.03 -0.01 -0.35



Due to their volatility and correlation characteristics, the Fund tends to overweight the smaller stocks within the investment universe as they provide more relative volatility capture potential. The Fund’s active size positioning had a negative impact on relative performance for the quarter as mega-cap stocks outperformed the smaller-cap stocks within the index on average.



However, an overall positive selection effect contributed to relative performance during the period.

Source: FactSet. Average Standard Deviation and Average Beta is calculated based on trailing 12 month annualized daily data. See last page for important disclosures. Continued on back page.

INTECH U.S. Managed Volatility Fund 4Q16 Performance Commentary (Class I Shares)

Quarterly Performance Attribution by Sector (%) INTECH U.S. Managed Volatility Fund

GICS Sector Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Real Estate Telecommunication Services Utilities Total

Russell 1000® Index

Attribution

Average Weight

Total Return

Average Weight

Total Return

Avg. Weight Difference

Allocation Effect

Residual (Selection Effect)

Total Effect

6.99 11.76 2.21 23.02 6.28 13.66 12.82 3.53 3.83 2.92 12.47 100.00

8.35 4.88 -8.41 2.71 11.32 7.18 14.47 1.01 3.53 3.16 3.98 5.67

12.57 8.75 6.60 14.95 13.27 10.51 20.82 3.25 3.70 2.37 3.07 100.00

8.45 6.11 -6.70 2.64 8.67 4.56 12.30 6.18 3.22 -3.44 6.25 6.03

-5.58 3.01 -4.39 8.06 -6.99 3.16 -8.00 0.28 0.13 0.55 9.41 ---

-0.14 -0.04 0.52 -0.37 -0.14 -0.04 -0.47 0.02 -0.04 -0.03 -0.02 -0.77

0.01 -0.11 -0.05 -0.09 0.22 0.33 0.23 -0.14 0.14 0.19 -0.29 0.42

-0.13 -0.15 0.47 -0.46 0.08 0.29 -0.24 -0.12 0.11 0.16 -0.30 -0.35



An average underweight allocation to the information technology sector, which was the strongest performing sector during the quarter, as well as an average overweight allocation to the financials sector, detracted from relative performance during the period.



However, an overall positive selection effect, which is a residual of the investment process, offset some of the adverse sector positioning and contributed to relative performance during the period.

The weighting of securities within the Fund's portfolio may differ significantly from the weightings within the index. The index is unmanaged and not available for direct investment; therefore its performance does not reflect the expenses associated with the active management of an actual portfolio. Investing involves risk, including the possible loss of principal and fluctuation of value. INTECH's focus on managed volatility may keep the Fund from achieving excess returns over its index. The strategy may underperform during certain periods of up markets, and may not achieve the desired level of protection in down markets. Performance for Class A Shares, Class I Shares and Class T Shares prior to 7/6/09 reflects the performance of one or more similar share classes of the Fund or a predecessor fund, adjusted, where applicable and permitted, for differing fees and expenses. See the Fund’s prospectus for further details concerning historical performance. Russell 1000® Index measures the performance of the 1,000 largest companies in the Russell 3000® Index. Alpha compares risk-adjusted performance relative to an index. Positive alpha means outperformance on a risk-adjusted basis. Beta measures the volatility of a security or portfolio relative to an index. Less than one means lower volatility than the index; more than one means greater volatility. Standard Deviation measures historical volatility. Higher standard deviation implies greater volatility. Attribution is used as a tool to explain the sources of a portfolio excess return versus a specific benchmark and during a specific period. The most widely used attribution methodology is a Return Decomposition Model based on weights and returns of a portfolio and index’s underlying holdings. This attribution framework can be defined over a specific period, benchmark, grouping (sector, market cap, country, beta quintiles, standard deviation quintiles) and currency. Allocation Effect measures whether the overweight or underweight of a segment relative to the index contributed positively or negatively to the overall portfolio’s relative return over a specific period. For example, if the portfolio is underweight a segment of the market that underperformed, the allocation effect will be positive. If the portfolio is overweight a segment of the market that underperformed or underweight a segment of the market that outperformed, the allocation effect will be negative. Residual (Selection Effect), measures if the securities that a portfolio hold within a given segment have contributed to or detracted from the overall portfolio’s relative performance. A positive selection effect means that the portfolio return within a specific segment was greater than the benchmark within the same segment. The “selection” of the stocks in the portfolio for that segment outperformed similar securities in the benchmark. INTECH refers to “selection effect” as “residual” given our process selects stocks based on relative volatility and correlation characteristics as opposed to a traditional manager where “selection effect” measures the manager skill to select stocks that outperform. Total Effect is the sum of the allocation and selection effects. Performance attribution is equity only and does not include cash. Total returns are gross of advisory fees and may differ from actual returns as they are based on end-of-day holdings in the fund. Portfolio returns will be reduced by advisory fees and other expenses. Companies in the fund and index are divided into quintiles based upon their standard deviation and beta during the period. Source for standard deviation and beta ranges, sectors, allocations and their returns: FactSet. Sectors defined by Global Industry Classification Standards (GICS). Returns include the reinvestment of dividends and other earnings. INTECH Investment Management LLC is a subsidiary of Janus Capital Group Inc. and serves as the sub-adviser on certain products. Fund distributed by Janus Distributors LLC Janus and INTECH are registered trademarks of Janus International Holding LLC. © Janus International Holding LLC. C-0317-8435 07-15-17

198-15-30667 04-17