DENVER, June 20, 2018 /PRNewswire/ -- Janus Henderson Investors (NYSE/ASX:JHG) today filed a preliminary registration statement with the Securities and Exchange Commission for an actively managed mortgage-backed securities (MBS) exchange traded fund (ETF).
Active fixed-income ETFs are an increasingly important tool for advisors seeking to help clients achieve their long-term investment goals. Janus Henderson believes the $6.5 trillion U.S. agency mortgage market, which accounts for 28% of the Bloomberg Barclays U.S. Aggregate Bond Index, is currently underserved by active ETFs.
John Kerschner and Nick Childs will co-manage the Janus Henderson Mortgage-Backed Securities ETF (ticker: JMBS), which seeks a high level of total return consisting of income and capital appreciation. Mr. Kerschner has 28 years of financial industry experience and joined Janus Henderson in 2010, where he is head of U.S. securitized products and a portfolio manager on the multi-sector income strategy. 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 is well placed to capitalize on its experience analysing issuer and borrower behaviour in securitized products, and to utilize the specialist ETF skills of its Exchange Traded Products unit to build a product that can pinpoint and take advantage of inefficiencies in the MBS market," Mr. Kerschner said.
The Janus Henderson Mortgage-Backed Securities ETF under normal circumstances will invest at least 80% of its net assets – and at times substantially all, including any borrowings for investment purposes – in a portfolio of mortgage-related, fixed-income instruments of varying maturities, with at least 80% in agency-issued MBS.
"Investors currently have two main options in the MBS arena,'' Mr. Childs said. "They can go the low-fee route of passive ETFs that have consistently underperformed the benchmark, or they can invest in higher-cost active mutual funds whose performance has tended to match or marginally beat the index over time. We believe this ETF has the potential to offer high correlations versus the Bloomberg Barclays U.S. Mortgage Backed Securities (MBS) Index, a competitive price and the high liquidity the market demands in an ETF."
Janus Henderson believes U.S. Treasuries, which comprise almost 40% of the Bloomberg Barclays U.S. Aggregate Bond Index ("Bond Index"), offer little opportunity for active managers to out-perform. Fixed-income investment managers may therefore focus on other parts of the Bond Index, such as mortgages and corporate credit, to generate excess returns, said Nick Cherney, Senior Vice President and Head of Exchange Traded Products.
"It therefore seems logical to envision a future where fixed-income investors are served by a suite of complementary, actively managed ETFs that target different sectors of the debt markets and aim to provide superior risk-adjusted returns over an entire cycle with lower cost and greater tax efficiency,'' Mr. Cherney said.
Janus Henderson in November 2016 launched its first actively managed ETF. The Janus Henderson Short Duration Income ETF (ticker: VNLA) seeks to provide a steady income stream with capital preservation across various market cycles by seeking to select fixed-income instruments that have the potential to provide a return of two to three percentage points above three-month LIBOR. Since inception, VNLA's assets under management have climbed to $482 million, as of June 18, 2018.
If all approvals are granted, Janus Henderson expects to launch the Janus Henderson Mortgage-Backed Securities ETF on or around September 2018.
Dex McLuskey: 303.336.7843 [email protected]
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 $372 billion in assets under management (as of 31 March 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$6 billion.
A registration statement relating to the Janus Henderson Mortgage-Backed Securities ETF has been filed with the Securities and Exchange Commission but has not yet become effective. The information in the prospectus is not complete and may be changed. The security may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. The prospectus is not an offer to sell the security and is not soliciting an offer to buy the security in any state where the offer is not permitted.
Please consider the investment objectives, risks, and charges and expenses of the ETF carefully before investing. The ETF prospectus will contain this and other information about the fund. You can obtain a copy of the prospectus by calling Janus Henderson at 800.668.0434. The final prospectus should be read carefully before investing.
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. Securitized products, such as mortgage- and asset-backed securities, are subject to prepayment and liquidity risk.
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.
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.
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.
For Janus Henderson Short Duration Income ETF (VNLA):
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.
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.
LIBOR (London Interbank Offered Rate) is a short-term interest rate that banks offer one another and generally represents current cash rates.
Janus Capital Management LLC is the investment adviser and ALPS Distributors, Inc. is the distributor. ALPS is not affiliated with Janus Henderson or any of its subsidiaries.
Janus Henderson is a trademark of Janus Henderson Investors. © Janus Henderson Investors. The name Janus Henderson Investors includes HGI Group Limited, Henderson Global Investors (Brand Management) Sarl and Janus International Holding LLC.
SOURCE Janus Henderson Investors