Mortgage-related assets account for about $9.3 trillion of the $41 trillion U.S. fixed-income market, according to year-end 2017 numbers from the Securities Industry and Financial Markets Association. To help investors participate in this space in a way that wasn’t previously available, the Janus Henderson Mortgage-Backed Securities ETF (JMBS) that launched late last week comes to market billed as the first actively managed mortgage-backed securities (MBS) exchange-traded fund designed to beat the Bloomberg Barclays U.S. MBS Index.
"There is considerable white space between lower-cost passive ETFs and higher-cost actively managed mutual funds that an actively managed ETF like JMBS has the potential to fill," John Kerschner, head of U.S. securitized products at Janus Henderson, said in a press release. Kerschner will co-manage the fund with Nick Childs, a securitized products analyst.
Aided by research from the company’s 10 analysts who cover securitized products, the duo will evaluate about $6.5 trillion in mortgages across more than 35 million loans by analyzing location, coupon, credit score, debt to income, cash flow and collateral. Securities in this ETF are picked using a bottom-up, loan-by-loan approach.
The fund’s management fee is 0.35 percent.
JMBS is the first U.S. product and first ETF from Janus Henderson Investors, which resulted from the merger of Denver-based Janus Capital Group and London-based Henderson Group in May 2017.
All told, the company offers seven ETFs. Its largest fund by far is the Janus Henderson Short Duration Income ETF (VNLA), which has more than $588 million in assets under management. It also offers a trio of thematic ETFs devoted to health and fitness issues that launched as a group more than two years ago. One of those, The Obesity ETF (SLIM), has trounced its bogey and the overall equity markets from a performance perspective but has struggled to attract assets, with just $11.6 million under management.