Janus Henderson Investors is launching a new exchange-traded fund that invests in asset-backed securities, as the money manager looks to take advantage of appetite for high-quality short-term debt.
The Janus Henderson Asset-Backed Securities ETF (ticker JABS), which is launching Wednesday, will buy ABS with investment-grade ratings, according to a statement.
The fund is intended to appeal to investors such as insurance companies, who often seek high-quality debt.
Janus is looking to build on the success of the firm’s AAA CLO ETF (JAAA), which also offers access to high-quality debt, though in that case with floating interest rates.
Since being launched in 2020, JAAA has grown to manage $23 billion in assets, the largest of Janus’s now 15 US ETFs, which collectively hold $35 billion, according to data compiled by Bloomberg.
High interest rates and the threat of a slowing economy are straining corporate and consumer borrowers, and many investors are looking for safety in debt that gets repaid quickly with a low risk of default.
“We continue to see a lot of opportunity and investor interest for high-quality fixed income at the front end of the curve,” John Kerschner, one of the portfolio managers, said in emailed comments. JABS is a “direct response” to that demand, he added.
Kerschner will manage the new fund along with Nick Childs. The two also run JAAA.
Janus, like many asset managers, has been expanding its roster of actively managed ETFs, given the difficulty of competing with the passive funds created by entrenched megashops like Vanguard Group and BlackRock Inc.
While actively managed funds still only make up a small portion of the total ETF assets under management, their share has been rising, capturing roughly 40% of the flows into ETFs so far this year, a record amount, according to Bloomberg Intelligence.
The new Janus offering joins a growing list of ETFs that focus on securitizations, a term for bonds backed by the combined cash flows of a group of different loans or other debt.
Growth has been particularly rapid for collateralized loan obligation ETFs, but several others now focus on the roughly $800 billion ABS market. The types of debt securitized in ABS include everything from auto loans to credit cards to student loans.
Janus’s ETF lineup now includes two CLO funds as well as one for mortgage-backed securities and another for a wider array of securitized debt.
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