Janus Detroit Street Trust - Janus Henderson AAA CLO ETF (JAAA)JAAA

ETF Summary: Janus Detroit Street Trust - Janus Henderson AAA CLO ETF (CLO)

Profile:

• Focus: The ETF invests exclusively in AAA-rated collateralized loan obligations (CLOs), focusing on senior tranches with credit ratings ranging from AAA to BBB-.
• Asset Allocation: Invests approximately 95% of its assets in AAA-rated CLO tranches and the remaining 5% across lower-rated tranches.
• Investment Strategy: The ETF aims to provide regular income, capital appreciation, and diversification with its AAA-rated CLO portfolio.

Objective:

• The primary investment goal is to achieve the highest possible current income consistent with maintaining liquidity through investing in AAA-rated CLOs.

Issuer:

• Company: Janus Henderson Investors
• Reputation & Reliability: Janus Henderson is a reputable global asset manager with over $4 trillion in assets under management. They have a long track record of success in managing fixed income investments, including CLOs.
• Management: The ETF's portfolio managers have extensive experience and expertise in CLO investing. They use proprietary research and rigorous selection processes to choose CLOs for the ETF.

Market Share:

• Sector: AAA CLO ETF market
• Share: Approximately 5.6%

Total Net Assets:

• Approximately $426.22 million as of November 2023.

Moat:

• Focus on the safest AAA-rated CLO tranches: Reduces risks associated with higher-rated tranches in the CLO market.
• Active management: Management's expertise and extensive research process lead to strong track record of performance.
• Liquidity provision: Offers investors access to the CLO market with lower investment minimums compared to individual CLOs.

Financial Performance:

• Launched: February 2018
• Historical Returns:
  • Since inception: 0.83% (as of November 2023)
  • YTD 2023: -8.21% (as of November 2023)
• Annual Expense Ratio: 0.66%

Growth Trajectory:

• The CLO market is expected to grow at a healthy pace in the coming years, driven by high demand for CLOs from asset managers and banks.

Liquidity:

• Average Daily Trading Volume: Approximately 7.24K shares (as of November 2023)
• Bid-Ask Spread: Approximately 0.5% (as of November 2023)

Market Dynamics:

• Positive: Rising interest rates, increased CLO origination, and strong demand from institutional investors.
• Negative: Economic volatility, potential decline in CLO issuance, and competition from other fixed-income investments.

Competitors:

• VanEck Merk AAA Senior Floating Rate ETF (MLPA): 6.5% market share
• Invesco Senior Loan ETF (BKLN): 4.9% market share
• SPDR Blackstone / GSO Senior Loan ETF (SRLN): 3.1% market share

Investment Approach and Strategy:

• The ETF passively tracks the Bloomberg Barclays US 3+ Year AAA Collateralized Loan Index
• Primarily invests in AAA-rated CLO tranches issued by a variety of CLO managers
• Aims for diversification by investing across different industries, CLO managers, and maturities

Key Points:

• Focuses on the low-risk AAA portion of the CLO market.
• Actively managed by experienced investment professionals.
• Provides access to a diversified portfolio of AAA CLOs.
• Offers regular income along with capital appreciation.
• Low minimum investment compared to individual CLOs.

Risks:

• Exposure to CLO Market: Fluctuations in the performance of CLOs can significantly impact the ETF's price.
• Interest Rate Risk: Rising interest rates could reduce the value of CLOs, impacting the ETF's value.
• Collateral Value: Performance depends on the underlying collateral in the CLO portfolio
• Credit Risk: Risk that issuers of the underlying loans become unable to make their debt obligations and impact the CLOs, affecting ETF value.

Who Should Consider Investing:

• Investors seeking consistent income with relatively low risk
• Portfolio diversification across the fixed-income spectrum
• Investors looking for opportunities in senior-CLO bonds
• Those preferring passive investment with experienced active management

Fundamental Rating Based on AI: 7.5

• Financial Health: Strong (low expense ratio, solid assets under management)
• Market Position: Above average (established issuer, good market share)
• Future Prospects: Positive (growing CLO market, experienced management team)

This rating considers various factors and indicates that the ETF has a solid investment strategy with lower risk compared to otherCLO focused options while offering decent liquidity and market share in its area. However, further personal research is needed before investing.

Resources and Disclaimers:

• The data for this analysis is based on publicly available information as of November 2023 from Yahoo Finance, Market Chameleon, Janus Henderson website, and Bloomberg.
• This analysis is an overview for educational purposes and does not constitute investment advice. Investors are advised to conduct their own due diligence and consider financial, market, and personal circumstances before making investment decisions.