Janus Henderson, a leading global asset management firm, has recently launched the Janus Henderson Income ETF, a new actively managed exchange-traded fund (ETF) designed to provide investors with current income and long-term capital appreciation prospects. The fund's strategy focuses on a diverse portfolio of debt securities, aiming to deliver higher yields than standard core-plus portfolios while maintaining a well-diversified approach.

Unlocking the Potential of Active Fixed Income ETFs

Janus Henderson's new Income ETF, dubbed JIII, represents the firm's latest foray into the active fixed income ETF space, a segment that the company believes will experience significant growth in the coming years. "We believe the income solution space will be one of the fastest growing active ETF opportunities over the next five years," noted John Kerschner, head of U.S. Securitized Products and portfolio manager at Janus Henderson.

Broad Fixed Income Exposure: Diversification and Yield Optimization

The Janus Henderson Income ETF's investment strategy is designed to provide investors with broad exposure to the fixed income market, encompassing a wide range of debt securities. This includes U.S. and non-U.S. bonds, corporate bonds, high-yield bonds, asset-backed securities, collateralized loan obligations (CLOs), emerging market debt, and mortgage-backed securities.By diversifying across these various fixed income sectors, the fund aims to build a portfolio of "best ideas" that can potentially deliver higher yields than standard core-plus portfolios. "Our goal is to create a portfolio across all fixed income sectors, aiming to build a portfolio of best ideas across fixed income sectors, striving for higher yields than those of standard core-plus portfolios and greater diversification than single-sector, high-yield strategies," explained John Lloyd, lead of Multi-Sector Credit Strategies and portfolio manager at Janus Henderson.The fund's research-driven investment process, which combines top-down and bottom-up factors, is designed to help the portfolio managers better manage risk exposure and capitalize on strong fundamental and data-driven analysis. This approach allows the fund to identify and invest in fixed income securities that offer the potential for attractive income generation.

Flexible Duration Management and Tactical Allocation

The Janus Henderson Income ETF is designed to hold fixed income assets with a variety of different maturities, with an expected average portfolio duration ranging from zero to eight years. This flexibility in duration management allows the fund to adapt to changing market conditions and interest rate environments.Additionally, the fund may allocate up to 50% of its total assets to the commercial loans sector, although the typical exposure is expected to be around 15% of the overall portfolio. This tactical allocation approach provides the portfolio managers with the ability to capitalize on opportunities within the commercial loans market while maintaining a diversified fixed income exposure.

Leveraging Derivatives for Risk Management and Enhanced Returns

The Janus Henderson Income ETF may also employ derivatives for a variety of purposes, including hedging, risk mitigation, duration management, or to enhance returns. By utilizing these financial instruments, the fund can potentially optimize its risk-return profile and better navigate the complexities of the fixed income market.

Expanding Janus Henderson's Active ETF Lineup

The launch of the Janus Henderson Income ETF represents the firm's 13th ETF listed in the United States, further expanding its robust active fixed income ETF product offerings. With over $23 billion in assets under management across its ETF suite, Janus Henderson continues to demonstrate its commitment to providing investors with innovative solutions to meet their evolving investment needs.As the active fixed income ETF space continues to gain traction, the Janus Henderson Income ETF stands as a compelling option for investors seeking current income and long-term capital appreciation prospects through a diversified and actively managed approach to the fixed income market.