The combination of an Average People Pillar rating and a Below Average Process Pillar rating limit  Janus Henderson B-BBB CLO ETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a sizable cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy gets a Below Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant underweight position in corporate bonds and B rated bonds compared with category peers. The strategy’s management team earns an Average People Pillar rating. The strategy's parent organization earns the firm an Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Janus Henderson AAA CLO ETF

Morningstar's evaluation of this fund's process seeks to determine how repeatable, consistent, and reliable it is, and whether management maintains a competitive advantage. Janus Henderson B-BBB CLO ETF earns a Below Average Process Pillar rating.    The process is strengthened by its level of diversification across individual securities, with its top 10 holdings accounting for 25% of assets. However, the rating is limited by the parent firm's five-year retention rate of 69%, which suggests it could do more to hold onto its portfolio managers. The parent firm's five-year risk-adjusted success ratio of 52% also holds the process back. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's subpar success ratio suggests that the firm could do better across its fund lineup.

 Compared with other funds in the Bank Loan Morningstar Category, this fund takes on significantly lower credit risk. But in terms of long-term interest-rate sensitivity, it hews closely to its average peer over the past few years. Opening the analysis to additional factors, the portfolio has displayed biases over time, whether towards or away from certain fixed-income instruments. Compared with the category average, the managers have been meaningfully underweight corporate bonds in recent years. In the latest month, the strategy has also relatively underweighted corporate bonds compared with Morningstar Category peers. Additionally, there's been a notable underallocation from B rated bonds over the past few years. Similarly, in recent months, the strategy also had less exposure to B rated bonds than peers. Finally, during the past few years, the fund leaned meaningfully towards debt with 10- to 15-year maturities. In this month, the strategy also leaned more towards debt with 10- to 15-year maturities compared with its peers.

 This strategy's 12-month yield is 8.1%, lower than its average peers' 8.5%. Typically, a lower yield comes with the benefit of less credit risk. The portfolio holds assets with a higher average surveyed credit quality of BBB, compared with the category average of B, and it holds no non-investment-grade assets, despite the average peers' 85%. Lower-credit-risk strategies are often able to navigate bear markets more effectively.

Below Average

Process

Janus Henderson B-BBB CLO ETF earns an Average People Pillar rating. John P. Kerschner’s veteran status, with over 25 years of listed portfolio management experience, brings a wealth of experience to the table. The strategies they currently manage have an average Morningstar Rating of 3.1 stars, demonstrating average risk-adjusted performance compared with category peers. Although the team is small, it is a solid supporting cast. Together, the three listed managers boast more than an average of 12 years of listed portfolio management experience. As a team, they manage two investment vehicles together, with a Negative asset-weighted average Morningstar Medalist Rating, indicating the team is positioned to generate negative alpha in aggregate. The management team is invested in the fund, but the maximum investment by any manager is between $100,000 and $500,000. An investment of more than $1 million would be ideal to align managers' interests with those of the fund's investors. 

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

Average

People

Under new leadership, Janus Henderson Investors is in the early paces of a fortified vision. It maintains an Average Parent rating.

Ali Dibadj took the CEO reins in June 2022 when the public company's board made a leadership change after the firm, formed by the 2017 merger of Janus Capital and Henderson Group, stagnated. Dibadj, who has a background in investment management (most recently as AllianceBernstein's strategy head and CFO), has energetically engaged the organization to develop his strategic road map: protect and grow the core business; amplify existing capabilities; and diversify into new areas, which could include acquisitions. While these ideas aren't unique in today's asset-management industry or brand new to Janus Henderson—its former CEO espoused similar ones—Dibadj added his stamp by refreshing the firm's executive committee and investment team leadership. This has also included the basic but necessary addition of scorecards to measure progress on strategic initiatives that include new vehicles like exchange-traded funds and separate accounts, among other things.

Time will tell if Dibadj and team can deliver. The firm's equity analysts continue to turn over, but portfolio managers have executed their strategies consistently, and some key figures returned. In 2023's first quarter, the firm saw net inflows for the first time since the merger—a sign of a nascent turnaround.

Parent

Janus Detroit Street Trust-Janus Henderson B-BBB CLO ETF

JBBB is an actively managed fund of floating-rate collateralized loan obligations (CLOs) of varying maturities, rated between BBB+ and B- from global issuers.

Panagram Bbb-B Clo Etf

CLO ETFs offer investors strong yields with little credit or interest rate risk. These are variable rate ETFs, and should see declining dividends as the Fed cuts rates. I still think they are buys, for three key reasons.

3 Reasons CLO ETFs Are A Buy, Even If The Fed Cuts

Janus B-BBB Clo ETF JBBB is probably on the radar for investors seeking momentum. The fund just hit a 52-week high and moved up 8.78% from its 52-week low price of $44.97/share.

Mortgage-Backed ETF (JBBB) Hits New 52-Week High

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Investment-grade bonds offer investors strong yields with low credit risk. A couple of ETFs offer exposure to these securities with some added benefits, including potential tax advantages and above-average yields. JBBB, CARY, and BOXX look like particularly strong ETFs in this space. A quick overview of these follows.

3 Investment-Grade ETF Buys, With Yields Up To 8.0%

The Janus Henderson B-BBB CLO ETF offers exposure to U.S. collateralized loan obligations within the category of securitized fixed income securities. The fund has a distribution yield of 8.1% and has outperformed traditional bond ETFs with a return of 13% over the past year. We advise caution at the current level considering historically tight credit spreads, and the potential for declining interest rates making fixed-rate debt more attractive.

JBBB: 2 Reasons We're Avoiding This 8.1% Yield B-BBB CLO ETF

Collateralized loan obligations, or CLOs, are complex financial instruments consisting of a pool of loans, offering a way to invest in corporate debt with a mechanism to mitigate interest rate risk. The Janus Henderson B-BBB CLO ETF provides access to floating-rate CLOs and is a unique investment opportunity for individuals and institutions. The JBBB fund offers diversification potential and floating rate exposure, but investors should be aware of the higher credit risk associated with B to BBB-rated CLOs.

JBBB: A Good Fund To Pair Against Bonds

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The consensus is turning against floating-rate securities but a move away from them is much too soon in our view. Recent data, such as strong payrolls and increased average hourly earnings, suggests that the Fed may take time to kickstart the rate cutting cycle. Also, markets have already priced in substantial rate cuts, leading to a significant drop in long-term rates, creating a potential risk for a back-up in longer-term rates.

9-11% Yielding Floating-Rate Securities For A Slow-Go Fed

Sustained core inflation suggests an interest rate pivot isn't a given. However, we think the probability of a mid-to-late 2024 pivot remains high.

JAAA Vs. JBBB: Opting For Positive Duration And High Quality

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ETFs offer investors diversified exposure to different asset classes, including U.S. and international equities, fixed-rate and variable rate bonds. Within each market sub-segment some ETFs offer particularly compelling yields. A short, curated overview of some of these ETFs follows. Yields range from 5% - 10%.

Higher-Yield ETFs By Asset Class

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On Seeking Alpha, I focus on dividend ETFs targeted towards income investors and retirees. Dividend ETFs focusing on bonds and fixed-income securities have seen significant dividend growth these past two years. Some offer incredibly compelling yields. Of these, five funds stand out. A quick look at these follows.

Juan's Top Dividend ETFs For 2024

JBBB invests in CLO tranches of senior secured loans, focusing on BBB tranches. The fund yields 7.9% with below-average credit risk, a strong value proposition and risk-return profile. The fund has benefited from rising rates over the last few years, and rate cuts could impact the fund going forward.

JBBB: BBB CLO ETF, Growing 8.1% Yield, Strong Risk-Adjusted Returns

Janus Henderson Mortgage-Backed Securities ETF

Janus Henderson Short Duration Income ETF

Janus Henderson Securitized Income ETF

Janus Henderson Investors has launched an active ETFs that covers almost the entire U.S. investable securitized market. The Janus Henderson Securitized Income ETF (NYSE Arca: JSI) seeks high income by investing across the U.S. securitized market.

Janus Henderson Launches Active Securitized Income ETF

The Janus Henderson CLO ETFs offer investors opportunities to invest in higher spread, lower risk loans. Rising default rates are affecting credit differently across the board, and CLOs show strength that other fixed income products have not. The comparison to investment grade corporate bonds shows CLOs as clear winners, with quality credit shining above lower quality.

JAAA & JBBB: Why I'm Still Favoring Quality Credit

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Floating rate securities have strong yields, low duration, and have significantly outperformed YTD. There are several strong floating rate funds available to investors. Credit risk varies, but there are options with minimal risk and high yields in the floating rate space.

The Best Floating Rate Funds For Income Investors And Retirees

The Janus Henderson BBB CLO ETF provides exposure to floating-rate CLO tranches rated from B to BBB. CLOs have historically had better credit performance than similarly rated corporate bonds, but with rising interest rates and increasing corporate bankruptcies, their credit performance may be at risk. The JBBB ETF can be thought of as a leveraged play on senior bank loans - BKLN. Depending on your forward views on credit, JBBB can be attractive or unattractive.

JBBB: Leveraged Play On Bank Loans

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Federal Reserve hikes have led to strong dividend growth in most variable rate securities and funds. Two of these are senior loans and CLO debt tranches. A look at the similarities, and differences, between these two asset classes follows.

Senior Loans Or CLO Debt, Which Is Best For Income Investors And Retirees?

Collateralized loan obligations, or CLOs, offer investors good growing dividends and low interest rate risk. Their performance since inception has been outstanding, if somewhat short. A quick look at 3 CLO ETFs follows.

The Best 3 CLO ETFs For Income Investors And Retirees

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The market has grudgingly adjusted to a higher-for-longer short-term rate environment. This, along with an inverted yield curve, means that floating-rate income securities remain compelling holdings. We highlight a number of attractive double-digit yielding securities across ETFs, BDCs, and preferreds.

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We review CEF market valuation and performance through the second week of August and highlight recent market action. CEFs rallied slightly on the week but remain in the hold in August. CEF distribution changes may affect the historical relative value relationships of similar funds.

CEF Weekly Review: Distribution Changes And Discount Relationships

JAAA and JBBB are both actively-managed ETFs investing in senior loan CLO tranches. JAAA focuses on AAA tranches, JBBB on BBB. A comparison of these two funds follows.

JAAA Vs. JBBB: Which CLO ETF Is Best For Income Investors And Retirees?

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We take a look at the action in preferreds and baby bonds through the first week of July and highlight some of the key themes we are watching. Preferreds were down on the week as higher Treasury yields took their toll. We discuss some of the differences between preferreds and funds with a case study of floating-rate NLY.PF and JBBB.

Preferreds Weekly Review: Preferreds Vs. Fund Considerations

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JBBB offers a strong and growing 7.1% yield, making it an attractive income investment option. JBBB has low interest rate risk and below-average credit risk, providing a good risk-return profile for investors. The fund compares favorably to its peers in terms of yield, credit risk, and interest rate risk, making it a solid buy.

JBBB: BBB CLO ETF, Low Interest Rate Risk, Growing 7.1% Yield

As Baron Rothschild once said: "Invest when there's blood in the streets". The credit markets seem to have some blood in them too, and we are seeing continuing bargains in high yield corporate credit.

JBBB And CLOZ: Safer, Higher-Rated CLO Debt Paying In The Double-Digits

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The broader CLO sector remains an attractive income destination for not just its high yields but also its historical resilience. We take a look at the different ways investors can choose to allocate to the sector across the risk and yield spectrum.

Our 8-10% Yielding Picks And Pans In The CLO Sector

JBBB is an exchange traded fund focusing on BBB rated CLO paper. The vehicle IPO-ed only recently, namely in January 2022.

JBBB: A Nice BBB CLO Offering From Janus Henderson, 7.4% Yield

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The CLO asset class is worth a look by income investors due to its strong historic profile, high yields and rising income levels. The asset class offers a wide variety of securities across the entire risk spectrum, with yields from mid-single-digit to double-digit levels.

News for Janus Detroit Street Trust-Janus Henderson B-BBB CLO ETF ETF (JBBB)