2nd CLO ETF Launches

October 19, 2020

Today, Janus Henderson Investors rolled out a competitor to a recently launched first-of-its-kind ETF. The Janus Henderson AAA CLO ETF (JAAA) is the second ETF to cover collateralized loan obligations. The first such fund, the AAF First Priority CLO Bond ETF (AAA), debuted last month.

JAAA comes with an expense ratio of 0.25% and lists on the NYSE Arca.

“Providing high-quality floating rate exposure, JAAA is designed to provide investors with access to an asset class that has the potential to address today’s low interest rate environment while mitigating unwanted credit risk,” said Janus Henderson Head of Exchange-Traded Products Nick Cherney. 

“CLOs are a $700 billion-plus asset class and yet most investors have little to no exposure to this segment of the fixed income market. With the launch of JAAA, investors can gain access to the high-quality, floating rate CLO market, including Janus Henderson’s rigorous CLO manager due diligence and portfolio construction process,” he added.

JAAA’s Methodology

The actively managed fund looks to achieve capital preservation and current income by investing in high-quality CLOs, the prospectus says. According to the document, the fund primarily holds issues rated AAA, but they can be of any maturity and can be floating- or fixed-rate securities. They also can be foreign or domestic. However, the fund’s holdings must meet size requirements and may not hold any issues rated lower than A-. There are also limits on how much a single security (5%) can represent of the portfolio and the weight of any single issuer (15%).

The recently launched and actively managed AAA is a very similar ETF, without the Janus Henderson branding. It, too, charges an expense ratio of 0.25%. Currently it has roughly $10 million in assets under management.

Contact Heather Bell at [email protected]

 

Find your next ETF

Reset All