Today Janus is rolling out an actively managed short-duration income fund on the NYSE Arca. The Janus Short Duration Income ETF (VNLA) comes with an expense ratio of 0.35%.
VNLA’s main objective is to outperform the return of the Libor three-month (US$) rate by 2-3% while maximizing current income and keeping a lid on volatility. It has wide latitude in the fixed-income securities it can invest in and its managers look for structural inefficiencies in the fixed-income space, the prospectus said.
The fund can invest in high-yield or investment-grade debt from private and public issuers in the U.S. and non-U.S. countries, but it can also choose to hedge its currency exposure if that is deemed beneficial to the fund’s performance. Up to 70% of the fund’s assets can be invested in foreign securities, the prospectus noted. It can also use derivatives to address portfolio risk, enhance return or manage duration.
According to the prospectus, VNLA seeks to achieve a duration within zero to two years of Libor.
The new fund hits a unique spot with its duration range of two years or less. The largest short-duration funds are either “ultra-short” like the Guggenheim Enhanced Short Duration ETF (GSY), which has more than $900 million in assets under management and a target duration of less than one year, or are at zero to three years or less, like the $286 million First Trust Low Duration Opportunities ETF (LMBS).
Contact Heather Bell at [email protected].