2Q16 JANUS EQUITY OUTLOOK Ski Report, Take It Slowly

We’re happy to be away from Wall Street and the consensus views of crowds. And

on winter weekends, we’re happier yet to be in the heart of ski country. In our regular

equity outlook, we combine investing and skiing to map the current market terrain.

Like a ski day, markets offer a mixture of riskier paths and easier ones. We’ll point

out the positive and negative themes driving equities, and tips to navigating those

themes more effectively.

The blue runs highlight issues that are less dangerous, but not without pitfalls . These are attractive runs

but proceed with care.

Green runs signal easier paths, but watch for crowds and stay away from the pack.

Black runs are themes that present key risks to equity markets. Be careful and alert before proceeding.

2

3

Equity investors prefer consistent dividends payers and defensiveness

China (and then global) economy collapses, with currency or

financial crisis

Negative rates in Europe and possibly in the U.S.

Equity markets favor quality and predictability

Anemic global economic growth

Rates stay low but positive

Positive for equity markets

Chinese economy steadies, slow RMB depreciation

Consumer demand holds up with modest global growth

We believe the most likely scenario is green, but with the chance the blue

scenario may develop. But be prepared.

Source: Janus, Bloomberg.

The Global Equity Scenarios

The Black Runs Black runs are themes that present key risks to equity markets. Be careful and alert before proceeding .

4

Markets still reflect defensive nature

Focus on yield while volatile stocks suffer

Negative equity flows reflected caution

Narrow Market: Reluctant Bulls

Source: Janus, Bloomberg, as of March 23, 2016. Dividend stocks reflects difference in performance of highest and lowest quintiles of U.S. stocks ranked by dividend yield.

5

Ski Tip: Look Beyond Defensive Sectors

Some defensive areas are expensive: Be selective Volatility and risk aversion favor EPS growth over multiple expansion

Way Down

Source: Janus, Bloomberg, as of March 22, 2016

6

Brexit Risk: A challenge to EU stability

U.S. Politics: It will likely get noisier

Populism could undo economic reform in Europe

Politics: Votes for Volatility

Source: Janus

7

We don’t think Brexit happens but populism will factor in 2017 elections in Europe U.S. recovery is consumer driven: Monitor sentiment and spending but politics shouldn’t sap confidence Watch France and Spain for less budget discipline

Ski Tip: Consider Real Political Impact

Way Down

*A score approaching zero represents greater consumer confidence.

Source: Janus, Bloomberg. Consumer confidence based on European Commission Consumer Confidence Indicator Eurozone

8

Expect currency volatility without much change

China: Moderate weakness is not disastrous

Persistent negative rates are damaging to business models and consumption

Currency: Movement but not Change

Source: Janus, Bloomberg, as of March 23, 2016.

9

Keep an eye on China's ability to fight; watch reserve levels and capital flows Focus on companies with cost structures that naturally hedge currency exposure Don't invest solely on currency expectations

Ski Tip: Ride the Bumps

Way Down

Source: Janus, Bloomberg.

10

The Blue Runs The blue runs highlight issues that are less dangerous, but not without pitfalls. These are attractive runs

but proceed with care.

11

Momentum no longer helps

Volatility creates opportunity

Momentum: The Music Stops

Source: Janus, Bloomberg. Momentum Index reflects long exposure to stocks with high exposure to volatility factor and short exposure to those with low factor scores.

12

Ski Tip: EPS Growth Matters

Pay attention to earnings growth which can create momentum Slow economic activity requires innovation and disruption Not overheating: Last five years of S&P EPS growth in line with long-term average

Way Down

Source: Janus, Bloomberg, International Data Corp.

13

The paths of emerging markets diverge; China casts shadow on S.E. Asia

No building boom in China but look at India

Brazil faces Olympic-sized struggle

EM: Bric Breaker

14

Source: Janus, Bloomberg

Ski Tip: Pick the Right Runs

In China, consumer remains healthy; watch the banking system Monitor financial risk across emerging Asia from China’s slowdown India: Banks and infrastructure are long, groomed runs

Way Down

Source: Janus, World Economic Forum, World Bank. As of 12/31/14.

15

16

European Financials: Not Another Crisis

Market sees negative rates and risk

Underperformance of financials mirrors crisis periods – without the crisis

Banks have less leverage but more levers

Source: Janus, Bloomberg.

17

Ski Tip: Avoid the Hazards

Look for strong national franchises with pricing power, near term opportunity to return capital to shareholders Balance sheet strength matters; fee income can offset margin pressure Negative rates remain a risk

Way Down

Source: Janus, Bloomberg.

The Green Runs Green runs signal easier paths. But watch for crowds and stay away from the pack.

18

Consumer activity remains strong while industrial sector stabilizes somewhat

Corporate balance sheets and cash flows solid

Valuations are not demanding

U.S.: Staying Strong

Source: Janus, Bloomberg.

19

Ski Tip: Consumer Strong and Smart

Look for growth opportunities through innovation, market share gains Consumers are smarter shoppers; companies must protect from Internet disintermediation Industrial sector slow but stabilizing

Way Down

Source: Janus, Bloomberg.

20

U.S. production is falling as capital expenditures decrease

Capital markets start to show discipline

Oil: Bottom of the Well

Source: Janus/Bloomberg.

21

Ski Tip: Value Capital Allocation, Strength

Focus on companies that are prudent with capital and cash flow Avoid balance sheet risk Expect bankruptcies and financial turmoil ahead

Way Down

Source: Janus, Bloomberg. Rystad Energy. Spud year refers to year well is dril led. E&P companies reflect S&P 500 subsector.

22

Health Care: Great science meets great demand

There's more than just pricing

Markets panic and overshoot

Health Care: Biotech, Sold Down, Looks Up

Source: Janus/Bloomberg, Washington Analysis, LLC. (FDA data as of 12/12/2015)

23

Ski Tip: The Patient will Recover

Biotech has oversold with political fears and momentum shift Companies treating important diseases can do well Negative investor sentiment opens up active stock picking opportunities

Way Down

Source: Janus, Bloomberg, Center for Disease Control, Alzheimer’s Association.

24

Monetary stimulus and aggressive monetary policy spur inflation

Commodities rebound and signal growth

Oil demand spikes and spurs rational U.S. production

Loan demand picks up in Europe; loan quality holds up in Asia

Markets see positive earnings surprises in out-of-favor sectors

Off Piste: Items on the Edge to Consider

25

Central banks don’t inspire confidence

The rise in populism subverts stabilizing economic policies

Chinese unrest stems from job losses

Negative rates drive savings, not consumption

Companies get cautious on M&A

Rocks Powder

The Black Runs

Narrow market: Look beyond defensive sectors

Politics: Consider real political impact

Currency: Ride the bumps

26

The Blue Runs

Momentum: EPS growth matters

Emerging Markets: Pick the right runs

European Financials: Avoid the hazards

27

The Green Runs

U.S. Consumer: Consumer is strong and smart

Health Care: The patient will recover

Oil: Value capital allocation and strength

28

Disclosures

The v iews presented are as of 3/31/15. They are f or information purposes only and should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security or market sector. No forecasts can be guaranteed. The opinions and examples are meant as an illustration of broader themes, are not an indication of trading intent, and are subject to change at any time due to changes in market or economic conditions. There is no guarantee that the information supplied is accurate, complete, or timely, nor are there any warranties with regards to the results obtained from its use. It is not intended to indicate or imply in any manner that any illustration/example mentioned is now or was ev er held in any Janus portfolio, or that current or past results are indicative of future profitability or expectations. As with all investments, there are inherent risks to be considered. Inv esting involves risk, including the possible loss of principal and fluctuation of value. Past perf ormance is no guarantee of future results. Statements in this piece that reflect projections or expectations of future financial or economic performance of a mutual fund or strategy and of the markets in general and statements of a f und’s plans and objectives for f uture operations are forward-looking statements. Actual results or events may differ materially from those projected, estimated, assumed or anticipated in any such forward-looking statements. Important factors that could result in such differences, in addition to the other factors noted with such forward-looking statements, include general economic conditions such as inflation, recession and interest rates. S&P 500® Index measures broad U.S. equity performance. Russell 1000® Index measures the performance of the 1,000 largest companies in the Russell 3000® Index. Russell 3000® Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market. Russell 2000® Index is an index that measures the performance of the 2,000 smallest companies in the Russell 3000® Index . Russell 1000® Growth Index measures the performance of those Russell 1000® companies with higher price-to-book ratios and higher forecasted growth values. Russell 1000® Value Index measures the performance of those Russell 1000® companies with lower price-to-book ratios and lower forecasted growth values. MSCI World IndexSM is a market capitalization weighted index composed of companies representative of the market structure of Developed Market countries in North America, Europe and the Asia/Pacific Region. The index includes reinvestment of dividends, net of foreign withholding taxes. MSCI All Country World IndexSM is an unmanaged, free float-adjusted market capitalization weighted index composed of stocks of companies located in countries throughout the world. It is designed to measure equity market perf ormance in global developed and emerging markets. The index includes reinvestment of dividends, net of foreign wit hholding taxes. MSCI Europe Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of the developed markets in Europe. It consists of the following 16 developed market country indices: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. MSCI EAFE® (Europe, Australasia, Far East) Index is a free float-adjusted market capitalization weighted index designed to measure developed market equity performance. The MSCI EAFE® Index is composed of companies representative of the market structure of developed market countries. The index includes reinvestment of dividends, net of foreign withholding taxes. MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The Chicago Board of Options Exchange (CBOE) Volatility Index® (VIX®) shows the market’s expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options and is a widely used measure of market risk and is often referred to as the “investor fear" gauge. The VIX® volatility methodology is the property of CBOE, which is not affiliated with Janus. Barclay s U.S. Corporate High Yield Bond Index measures the US dollar-denominated, high yield, fixed-rate corporate bond market. Barclay s Global Aggregate Bond Index is a broad-based measure of the global investment grade fixed-rate debt markets. The MSCI AC Asia Pacific Index captures large and mid cap representation across 5 Developed Markets countries* and 8 Emerging Markets countries* in the Asia Pacific region. With 1,022 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. The NASDAQ Biotechnology Index contains securities of NASDAQ-listed companies classified according to the Industry Classification Benchmark as either Biotechnology or Pharmaceuticals which also meet other eligibility criteria. The NASDAQ Biotechnology Index is calculated under a modified capitalization-weighted methodology. The S&P MLP Index includes both master limited partnerships and publicly traded limited liability companies which have a similar legal structure to MLPs and share the same tax benefits as MLPs Janus Capital Group Inc. is a global asset manager offering individual investors and institutional clients complementary asset management disciplines. Janus Capital Management LLC serves as investment adviser. Janus is a registered trademark of Janus International Holding LLC. © Janus International Holding LLC. C-0416-1211 03-30-17 188-15-40530 04-16