Janus Debuts ESG ETF Suite

September 09, 2021

Janus Henderson entered the ESG space today with four actively managed funds focused on sustainability and one focused on decarbonization stocks. All five funds debuted on the NYSE Arca Thursday and are listed below:

 

Fund Ticker Expense Ratio
Janus Henderson US Sustainable Equity ETF SSPX 0.60%
Janus Henderson International Sustainable Equity ETF SXUS 0.60%
Janus Henderson Net Zero Transition Resources ETF JZRO 0.55%
Janus Henderson Sustainable Corporate Bond ETF SCRD 0.35%
Janus Henderson Sustainable & Impact Core Bond ETF  JIB 0.39%

 

Each of those expense ratios is applied to the first $250 million in assets in each fund. Every dollar in managed assets over that figure is charged a 5 basis point discount, according to the funds’ prospectuses.

The funds generally take on an ESG flavor, despite eschewing that label in their names. SXUS and SSPX both aim to invest in between 30 to 50 stocks outside and within the U.S., respectively, that are aligned with trends like climate change, resource management, and a growing and aging human population. 

Nick Cherney, Janus Henderson’s head of exchange-traded products, said in an interview that the funds are intended as an alternative to passive vehicles that mainly employ negative screens to justify their label rather than having analysts determine if a company is providing an environmental or social benefit.

“We see lots and lots of passive ESG ETFs launching that we view as relatively inadequate when it comes to their approach to ESG,” he said.

JZRO invests globally in companies that its managers believe will benefit from a transition to a net-zero carbon emission economy, with a focus on materials makers, energy producers, agricultural companies and consumer staple producers.

Both of the bond funds are limited to investment-grade products. SCRD invests in corporate debt from companies involved in health care, economic development, sustainable energy and “innovation” companies deemed to be developing products that can make other firms become more sustainable.

JIB has the same stated mission but is free to invest in a mix of government debt, corporate bonds and short-term vehicles.

The funds also ban a running list of industries from their investable universes, including but not limited to alcohol producers, weapons developers, genetic engineering, meat and dairy producers, and nuclear power generators.

JZRO is subject to that list but does not specifically exclude nuclear power generators or fossil fuel power generators from its investable universe.

Cherney said portfolio managers have the discretion to take positions that may conflict with the screen or broader ESG principles if a company has a nuanced difference from the screen, such as a copper mining company that supplies renewable gridmakers but owns a mine in a country that’s primarily powered by fossil fuels.

“Should we own that company or not?” he said. “That's the kind of nuance that we're talking about.”

Contact Dan Mika at [email protected], and follow him on Twitter.

Find your next ETF

Reset All