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By Matt Tracy
(Reuters) – Asset manager Janus Henderson on Thursday announced the launch of a new exchange-traded fund aimed at structured finance securities, in response to investor demand for yield in products that had minimal interest rate risk in a high-rate environment.
The Janus Henderson Securitized Income ETF (JSI), Janus’ fourth U.S. fixed income ETF, will cover “virtually the entire U.S. investable securitized market,” a Janus spokesperson said. But it will focus on mortgage-backed securities (MBS), asset-backed securities (ABS) and collateralized loan obligations (CLOs).
“Investors are generally underexposed to securitized credit and JSI offers direct exposure to key areas of the securitized markets that investors otherwise wouldn’t have the ability to access,” said John Kerschner, head of U.S. Securitized Products and portfolio manager on the fund at Janus Henderson.
In October, Janus’ ETF focused on AAA CLOs surpassed $4 billion in assets under management, in a sign of heightened demand for investment-grade corporate loans among both retail and institutional investors.
The firm said the new JSI ETF will cater further to that demand.
“Retail investors need income and yield, and this is a product that aims to deliver excellent income while investing predominantly in investment grade securities thereby reducing overall credit risk,” said Kerschner.
Institutional investors will be attracted to JSI as a “pure-play” vehicle in the securitized investment grade space which currently does not exist at a scalable size,” he said.
