In a strategic move to cater to the growing demand for income-generating investment solutions, Janus Henderson has recently launched the Janus Henderson Income ETF (JIII). This actively managed fund aims to provide current income and long-term capital appreciation prospects, offering investors a unique opportunity to diversify their fixed-income portfolios.
Unlocking the Potential of Active Fixed-Income ETFs
Expanding the Active ETF Landscape
Janus Henderson's decision to introduce the JIII ETF underscores the firm's commitment to expanding its robust active fixed-income ETF product offerings. As John Kerschner, the head of U.S. Securitized Products and portfolio manager at Janus Henderson, noted, "We believe the income solution space will be one of the fastest growing active ETF opportunities over the next five years." This strategic move positions Janus Henderson at the forefront of the evolving active ETF landscape, catering to the growing demand for innovative income-generating solutions.Diversified Fixed-Income Exposure
The JIII ETF's investment strategy focuses on constructing a diversified portfolio of debt securities, including U.S. and non-U.S. bonds across a wide range of maturities. This comprehensive approach encompasses corporate bonds, high-yield bonds, asset-backed securities, collateralized loan obligations (CLOs), emerging market debt, and mortgage-backed securities. By leveraging this broad fixed-income exposure, the fund aims to provide investors with a well-rounded and diversified fixed-income allocation.Yield-Focused Investment Process
The JIII ETF's investment process is driven by a research-driven approach that combines top-down and bottom-up factors. The fund's portfolio managers, led by John Lloyd, the lead of Multi-Sector Credit Strategies and portfolio manager at Janus Henderson, focus on selecting fixed-income securities that offer high potential income. This yield-centric approach is designed to deliver higher yields than standard core-plus portfolios, while also providing greater diversification than single-sector, high-yield strategies.Flexible Duration Management
The JIII ETF is structured to hold fixed-income assets with a wide range of maturities, with an anticipated average portfolio duration between zero and eight years. This flexibility in duration management allows the fund to adapt to changing market conditions and interest rate environments, potentially enhancing its ability to generate consistent income for investors.Tactical Allocation to Commercial Loans
The JIII ETF may allocate up to 50% of its total assets to the commercial loans sector, although the fund's managers expect the typical exposure to this sector to be around 15% of the overall portfolio. This tactical allocation to commercial loans provides the fund with the opportunity to potentially capitalize on the attractive yield characteristics of this asset class, further diversifying the income-generating potential of the portfolio.Derivatives for Risk Management and Return Enhancement
The JIII ETF may also employ derivatives for a variety of purposes, including hedging, risk mitigation, duration management, and potentially enhancing returns. This strategic use of derivatives allows the fund's managers to actively manage the portfolio's risk exposure and potentially optimize the overall performance of the fund.Expanding the Janus Henderson ETF Lineup
The launch of the JIII ETF marks the 13th Janus Henderson ETF listed in the United States, further strengthening the firm's presence in the growing active ETF market. With over $23 billion in assets under management across its ETF offerings, Janus Henderson continues to demonstrate its commitment to providing innovative investment solutions to meet the evolving needs of investors.
