DENVER, Sept. 13, 2018 /PRNewswire/ -- Janus Henderson Investors (NYSE/ASX:JHG) today announced the launch of the first actively managed mortgage-backed securities (MBS) ETF designed to outperform the Bloomberg Barclays U.S. MBS Index.
The introduction of the Janus Henderson Mortgage-Backed Securities ETF (NYSE:JMBS) follows on the success of the Janus Henderson Short Duration Income ETF (ticker: VNLA), whose assets have climbed to $580.5 million less than two years after launch, as of Sept. 10, 2018.
JMBS is the first U.S. product and first ETF to be introduced since Denver-based Janus Capital Group merged with London-based Henderson Group on May 30, 2017, to create Janus Henderson Investors, a global asset manager with approximately $370.1 billion in assets under management as of June 30, 2018.
Mortgage-related assets account for about $9.3 trillion of the $41 trillion U.S. fixed-income market1. Investments in the $6.5 trillion agency MBS market2 are largely held by a small number of passive ETFs, which have experienced significant inflows for the five years through June 30, 20183, institutional portfolios benchmarked to the Bloomberg Barclays US Aggregate Bond Index and actively managed mutual funds.
"There is considerable white space between lower-cost passive ETFs and higher-cost actively managed mutual funds that an actively managed ETF like JMBS has the potential to fill," said John Kerschner, head of U.S. securitized products at Janus Henderson, who will co-manage JMBS with Nick Childs. "We believe this product meets an important investor need, balancing current income and total return in one of the largest fixed-income markets in the world."
The portfolio managers will leverage the company's deep research capabilities in securitized assets in an effort to pinpoint inefficiencies in the MBS market. Globally, Janus Henderson has 10 analysts covering securitized products.
"We are hyper-focused on modelling borrower behaviour to appreciate why and when home owners refinance or move," said Mr. Childs. "Our bottom-up approach -- where we analyse the idiosyncrasies and key fundamentals of each security rather than relying on a top-down macro view -- is critical to our ability to outperform the Bloomberg Barclays US MBS Index."
Janus Henderson entered the actively managed fixed-income ETF market in November 2016 with the Janus Henderson Short Duration Income ETF, which seeks to provide a steady income stream across various market cycles while preserving capital by selecting fixed-income instruments that provide a return of two to three percentage points above three-month LIBOR.
"JMBS gives investors seeking liquidity and minimal credit risk a strong option to potentially generate better risk-adjusted returns than low-cost passive MBS ETFs or higher fee active MBS mutual funds," said Nick Cherney, Head of Exchange Traded Products.
Mr. Kerschner has 28 years of financial industry experience and joined Janus Henderson in 2010, where he is also a portfolio manager on the Janus Henderson Multi-Sector Income Fund. Mr. Childs joined Janus Henderson in 2017 with a primary focus on valuing opportunities and managing exposure in residential MBS. His 15 years of financial industry experience includes five as a portfolio manager covering residential MBS total return and absolute return strategies.
Janus Henderson also offers the Janus Henderson Small Cap Growth Alpha (JSML) and the Janus Henderson Small/Mid Cap Growth Alpha (JSMD) ETFs, along with the thematic Long-Term Care (OLD), Organics (ORG) and Obesity (SLIM) ETFs.
SOURCES 1, 2: Securities Industry and Financial Markets Association, as of 12/31/2017 3: SIFMA
About Janus Henderson Investors Janus Henderson is a leading global active asset manager dedicated to helping investors achieve long-term financial goals through a broad range of investment solutions, including equities, quantitative equities, fixed income, multi-asset and alternative asset class strategies.
Janus Henderson has approximately $370.1 billion in assets under management (as of 30 June 2018), more than 2,000 employees and offices in 27 cities worldwide. Headquartered in London, the company is listed on the New York Stock Exchange (NYSE) and the Australian Securities Exchange (ASX). It has a market capitalisation of approximately US$5.6 billion.
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 call Janus Henderson at 800.668.0434 or download the file from janushenderson.com/info. Read it carefully before you invest or send money.
ETF shares are not individually redeemable and only authorized participants may purchase or redeem shares from the Fund and must do so in Creation Units only.
OBJECTIVE: Janus Henderson Mortgage-Backed Securities ETF (JMBS) seeks a high level of total return consisting of income and capital appreciation.
The ETF is new and has less than one year of operating history.
OBJECTIVE: Janus Henderson Short Duration Income ETF (VNLA) seeks to provide a steady income stream with capital preservation across various market cycles. The Fund seeks to consistently outperform the LIBOR 3-month rate by a moderate amount through various market cycles while at the same time providing low volatility.
Investing involves risk, including the possible loss of principal and fluctuation of value. There is no assurance the stated objective(s) will be met.
Fixed income securities are subject to interest rate, inflation, credit and default risk. The bond market is volatile. As interest rates rise, bond prices usually fall, and vice versa. The return of principal is not guaranteed, and prices may decline if an issuer fails to make timely payments or its credit strength weakens.
Mortgage-backed securities (MBS) may be more sensitive to interest rate changes. They are subject to extension risk, where borrowers extend the duration of their mortgages as interest rates rise, and prepayment risk, where borrowers pay off their mortgages earlier as interest rates fall. These risks may reduce returns.
Funds that concentrate investments in a single sector will be more susceptible to factors affecting that sector and may be more volatile than less concentrated investments or the market as a whole.
When valuations fall and market and economic conditions change it is possible for both actively and passively managed investments to lose value. Actively managed portfolios may fail to produce the intended results. No investment strategy can ensure a profit or eliminate the risk of loss.
Bloomberg Barclays U.S. Mortgage Backed Securities (MBS) Index tracks the performance of U.S. fixed-rate agency mortgage backed pass-through securities.
Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based measure of the investment grade, US dollar-denominated, fixed-rate taxable bond market.
LIBOR (London Interbank Offered Rate) is a short-term interest rate that banks offer one another and generally represents current cash rates.
Mutual funds distributed by Janus Henderson Distributors. ETFs distributed by ALPS Distributors, Inc. ALPS is not affiliated with Janus Henderson or any of its subsidiaries.