Janus Henderson’s B-BBB CLO ETF (JBBB) Exceeds $1 Billion in AUM

Rhea-AI Summary

Janus Henderson's B-BBB CLO ETF (JBBB) has surpassed $1 billion in assets under management (AUM), becoming the second-largest CLO ETF in the market. JBBB, launched in January 2022, focuses on CLOs rated BBB+ to B- and has grown by over $850 million in AUM this year alone. Janus Henderson now holds the two largest CLO ETFs with over 85% market share in all CLO ETF AUM.

The company's AAA CLO ETF (JAAA) remains the largest, having exceeded $10 billion in AUM in June 2024. JBBB represents 55% of all below-AAA CLO ETF AUM and aims to provide capital preservation and current income through floating-rate exposure to CLOs. Janus Henderson is the fourth largest active fixed income ETF provider globally and recently won Global Capital's inaugural CLO ETF Provider of the Year award in 2024.

Positive

• JBBB ETF surpassed $1 billion in AUM, becoming the second-largest CLO ETF
• Janus Henderson holds over 85% market share in all CLO ETF AUM
• JAAA ETF exceeded $10 billion in AUM in June 2024
• JBBB grew by over $850 million in AUM this year alone
• Janus Henderson is the fourth largest active fixed income ETF provider globally
• Won Global Capital's inaugural CLO ETF Provider of the Year award in 2024

Negative

• None.

Insights

Financial Analyst

Janus Henderson's JBBB ETF reaching $1 billion in AUM is a testament to the growing investor interest in Collateralized Loan Obligations (CLOs), particularly those rated between BBB+ and B-. CLOs are debt instruments backed by corporate loans, offering a higher yield than investment-grade bonds, albeit with slightly higher risk. The substantial growth in AUM indicates strong market confidence in Janus Henderson's management capabilities and the attractiveness of CLOs as a diversified income-generating asset.

For retail investors, understanding the basic structure of CLOs is essential. These instruments are divided into tranches with varying risk and return profiles. JBBB's focus on BBB-rated tranches generally implies a balanced risk-reward position. The high AUM also suggests liquidity, which is important for ETFs. However, CLOs can carry risks such as credit and interest rate risks. Investors should weigh these factors against the potential for higher yields compared to traditional fixed-income securities.

Janus Henderson's significant market share (over 85%) in CLO ETFs also highlights the firm's dominant position and could be seen as a competitive advantage. Such a dominant position can lead to better pricing power and influence over the market. However, it's important to note that heavy concentration in a single firm may expose investors to firm-specific risks.

Market Research Analyst

The achievement of JBBB surpassing $1 billion in AUM underscores Janus Henderson's strategic positioning within the fixed-income ETF market. This milestone reflects broader market trends favoring higher-yielding, lower-correlation assets amidst the current low-interest-rate environment. For retail investors, ETFs like JBBB offer an opportunity to gain exposure to asset classes previously accessible mainly to institutional investors. This democratization can enhance portfolio diversification.

CLOs, given their floating-rate nature, are particularly attractive in environments where interest rates are expected to rise. They provide a hedge against interest rate risk, unlike fixed-rate instruments that can lose value as rates go up. That said, CLOs require careful evaluation of underlying credit risks and the manager's expertise in navigating these risks.

Investors should also consider the broader implications of Janus Henderson’s growth in CLO ETFs. The firm's ability to innovate and capture significant market traction is notable. Still, investors must remain cautious and not just follow market trends without understanding the inherent risks and dynamics at play.

• Janus Henderson has the two largest CLO ETFs with over 85% market share in all CLO ETF AUM
• JBBB is only the second CLO ETF to reach $1 billion in AUM and is the second largest CLO ETF, behind only Janus Henderson’s AAA CLO ETF, JAAA

DENVER--(BUSINESS WIRE)-- Janus Henderson Investors (NYSE: JHG) today announced that the Janus Henderson B-BBB Collateralized Loan Obligation ETF (JBBB), has exceeded $1 billion in AUM. JBBB is only the second CLO ETF to reach $1 billion in AUM and is the second largest CLO ETF behind Janus Henderson’s AAA CLO ETF (JAAA) as measured by AUM.¹ JBBB now represents 55% of all below-AAA CLO ETF AUM.²

Following the success of JAAA, JBBB was launched in January 2022 and was the first ETF focused on providing exposure to CLOs generally rated BBB, expanding U.S. investor access to an asset class that historically was largely only available to institutional investors. JBBB seeks capital preservation and current income by seeking to deliver floating-rate exposure to CLOs rated between and inclusive of BBB+ and B- in a liquid, transparent manner. JBBB seeks to generate yields above high-yield corporates with lower default risk by investing primarily in investment grade CLOs. JBBB has grown by over $850 million in AUM this year alone³ and is managed by Portfolio Managers John Kerschner, CFA, Nick Childs, CFA, and Jessica Shill.

Janus Henderson has the two largest CLO ETFs with over 85% market share in all CLO ETF AUM.⁴ JAAA represents over 90% of all AAA CLO ETF AUM⁵, having surpassed $10bn in AUM in June 2024. It is the largest CLO ETF and the top actively managed fixed income ETF globally in terms of net inflows YTD.⁶

John Kerschner, Head of U.S. Securitized Products and Portfolio Manager at Janus Henderson Investors, said, “We have continued to see strong investor demand for our CLO ETFs and other securitized funds. Incorporating CLOs into a portfolio may help to enhance its overall risk/return profile given CLOs have historically been less correlated with the investment grade and high yield segments of the bond market and offer attractive yield on a relative basis. With Janus Henderson’s rigorous CLO manager due diligence and portfolio construction process, JBBB provides access to predominantly investment grade CLOs with potentially broad diversification benefits based on historically low daily volatility and low correlation to traditional fixed income markets, while offering yield potential.”

“We believe the growth of JBBB speaks to Janus Henderson’s continued focus on product innovation, competitive pricing and investment excellence. In our view, BBB CLOs are underrepresented in portfolios relative to other higher income solutions and may further enhance diversification in client portfolios,” added Michael Schweitzer, Head of North America Client Group at Janus Henderson Investors.

Janus Henderson has been at the forefront of active fixed income ETF innovation and offers a number of pioneering fixed income ETFs. In addition to JAAA and JBBB, these include the recently launched JSI, which invests in opportunities across the U.S. securitized markets, JMBS, the largest actively managed mortgage-backed securities ETF⁷, and VNLA, an active global short duration income ETF. Janus Henderson is the fourth largest active fixed income ETF provider globally.⁸ The firm won Global Capital’s inaugural CLO ETF Provider of the Year award in 2024.⁹

Notes to editors

Janus Henderson Group is a leading global active asset manager dedicated to helping clients define and achieve superior financial outcomes through differentiated insights, disciplined investments, and world-class service. As of March 31, 2024, Janus Henderson had approximately US$353 billion in assets under management, more than 2,000 employees, and offices in 24 cities worldwide. The firm helps millions of people globally invest in a brighter future together. Headquartered in London, Janus Henderson is listed on the New York Stock Exchange.

Source: Janus Henderson Group plc

^{Investing involves risk, including the possible loss of principal and fluctuation of value. Past performance is no guarantee of future results. There is no assurance the stated objective(s) will be met.}

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 B-BBB CLO ETF (JBBB) seeks capital preservation and current income by seeking to deliver floating-rate exposure to collateralized loan obligations (“CLOs”) generally rated between and inclusive of BBB+ and B-.}

^{Collateralized Loan Obligations (CLOs) are debt securities issued in different tranches, with varying degrees of risk, and backed by an underlying portfolio consisting primarily of below investment grade corporate loans. The return of principal is not guaranteed, and prices may decline if payments are not made timely or credit strength weakens. CLOs are subject to liquidity risk, interest rate risk, credit risk, call risk and the risk of default of the underlying assets.}

^{Concentrated investments in a single sector, industry or region will be more susceptible to factors affecting that group and may be more volatile than less concentrated investments or the market as a whole.}

^{Derivatives can be more volatile and sensitive to economic or market changes than other investments, which could result in losses exceeding the original investment and magnified by leverage.}

^{Actively managed portfolios may fail to produce the intended results. No investment strategy can ensure a profit or eliminate the risk of loss.}

^{Credit quality ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest). Ratings may differ by rating agency.}

^{Janus Henderson Investors US 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 Group plc or one of its subsidiaries. © Janus Henderson Group plc.}

^{This press release is solely for the use of members of the media and should not be relied upon by personal investors, financial advisers, or institutional investors. We may record telephone calls for our mutual protection, to improve customer service and for regulatory record keeping purposes. All opinions and estimates in this information are subject to change without notice.}

____________________________
¹ Source: Morningstar as of July 11, 2024
² Source: Morningstar as of July 11, 2024
³ Source: Morningstar as of July 11, 2024
⁴ Source: Morningstar as of July 11, 2024
⁵ Source: Morningstar as of July 11, 2024
⁶ Source: Morningstar as of July 11, 2024
⁷ Source: Morningstar as of July 11, 2024
⁸ Source: Morningstar as of June 30, 2024
⁹ For more about the awards, including selection criteria, please visit: https://www.globalcapital.com/us-securitization

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Press Inquiries

Janus Henderson Investors

Media:

Candice Sun

Head of Corporate Communications, North America

+1 303-336-5452

candice.sun@janushenderson.com

Sarah Johnson

Director of Corporate Communications, North America

+1 720-364-0708

sarah.johnson@janushenderson.com

Investor Relations:

Jim Kurtz

Head of Investor Relations

+1 303-336-4529

jim.kurtz@janushenderson.com

Source: Janus Henderson Investors

FAQ

What is the AUM of Janus Henderson's B-BBB CLO ETF (JBBB)?

Janus Henderson's B-BBB CLO ETF (JBBB) has exceeded $1 billion in assets under management (AUM).

When was the Janus Henderson B-BBB CLO ETF (JBBB) launched?

The Janus Henderson B-BBB CLO ETF (JBBB) was launched in January 2022.

What is Janus Henderson's market share in CLO ETF AUM?

Janus Henderson holds over 85% market share in all CLO ETF AUM.

What is the AUM of Janus Henderson's AAA CLO ETF (JAAA)?

Janus Henderson's AAA CLO ETF (JAAA) exceeded $10 billion in AUM in June 2024.

What award did Janus Henderson win for its CLO ETFs in 2024?

Janus Henderson won Global Capital's inaugural CLO ETF Provider of the Year award in 2024.