The proliferation of ETFs continued Thursday with the launch of four “thematic” equity funds from Janus Capital that are designed to reflect global demographic and consumer shifts.
The funds — the Long-Term Care ETF (OLD), Health and Fitness ETF (FITS), Organics ETF (ORG) and Obesity ETF (SLIM) – are all passive ETFs based on proprietary indexes developed for Janus by Solactiv. They trade on the Nasdaq, have an expense ratio of 50 basis points and double the number of ETFs from Janus.
Nick Cherney, head of exchange traded products at the Janus Capital Group Janus, says the funds reflect “long-term investable themes,” such as the global aging population and obesity epidemic that has spread from the developed world into the developing world, but is there room for even more funds in the $2.1 trillion-plus U.S. ETF market? Just last week Morgan Stanley filed papers with the SEC to launch its own line of ETFs.
“Time will tell if investors will be constructing portfolios with these kinds of funds,” said Todd Rosenbluth, director of ETF research for S&P Global Market Intelligence.
“Most of the money continues to go to well-diversified products,” said Rosenbluth, referring to ETF flows into passive index-based products like S&P 500 ETFs. But he noted that some themes such as low volatility have resonated with ETF buyers.
‘I don’t know if there will be a quick uptake but products can gather assets if they offer something that’s different.”
That is exactly what Janus is hoping for. The Janus ETFs are “all pretty unique in the market, with the exception of health and fitness ETF,” said Cherney.