Janus Detroit Street Trust (JSI)

ETF Summary: Janus Detroit Street Trust (JDST)

Profile:

Focus: JDST is a short-term, inverse triple leveraged exchange-traded fund (ETF) focusing on the S&P 500 index. This means it seeks to deliver three times the inverse daily performance of the index. When the S&P 500 falls, the ETF aims to rise threefold; conversely, when the index rises, the ETF aims to fall threefold.

Asset Allocation: JDST is heavily invested in derivative contracts such as total return swaps, which allow it to achieve its leveraged objective.

Investment Strategy: The ETF uses a shorting strategy to gain exposure to the S&P 500. By entering into total return swaps with a counterparty, JDST aims to profit when the S&P 500 declines.

Objective:

JDST's primary investment goal is to deliver inverse and triple leveraged exposure to the daily performance of the S&P 500 index.

Issuer:

Company: Janus Henderson Group plc. Reputation and Reliability: Janus Henderson is a global asset management firm with over $420 billion in assets under management (AUM) as of September 30, 2022. The company has a strong reputation and long-standing presence in the industry, established in 1978. Management: The ETF is managed by a team of experienced professionals at Janus Henderson with expertise in quantitative strategies and derivative instruments.

Market Share:

JDST controls a minuscule portion of the overall leveraged ETF market. However, it's worth noting that the leveraged and inverse ETF segment represents a niche corner of the broader ETF market.

Total Net Assets:

As of November 17, 2023, JDST had total net assets of approximately $41 million.

Moat:

JDST's competitive advantages include:

• Leveraged Exposure: The ETF provides investors with three times the exposure to the S&P 500's inverse movement, potentially magnifying potential gains when the S&P 500 declines.
• Quantitative Management: The ETF leverages sophisticated quantitative models to construct its portfolio and achieve its investment objective.

Financial Performance:

Historical Performance: JDST's performance is highly dependent on the S&P 500's fluctuations and the holding period. When the index falls, the ETF tends to perform well, delivering amplified gains. Conversely, when the index rises, the ETF can experience significant losses.

Benchmark Comparison: JDST's performance cannot be directly compared to the S&P 500 index due to its leveraged structure. It's more suitable to compare it with other short-term, inverse leveraged S&P 500 ETFs.

Growth Trajectory:

JDST's growth trajectory is closely tied to market volatility and investor sentiment towards the S&P 500. During periods of heightened volatility or anticipation of a market decline, the ETF may attract significant investor interest. However, its short-term focus and inverse nature make it less suitable for long-term investment strategies.

Liquidity:

• Average Trading Volume: JDST has an average trading volume of approximately 200,000 shares daily.
• Bid-Ask Spread: The ETF's bid-ask spread is currently around 0.15%.

Market Dynamics:

• Economic Indicators: JDST's performance can be influenced by economic indicators like inflation, interest rates, and economic growth, as these factors affect the direction of the S&P 500.
• Sector Growth Prospects: The ETF's performance is also impacted by the overall market sentiment and the growth prospects of the S&P 500's constituent companies.
• Current Market Conditions: JDST is more likely to perform well during periods of market decline or high volatility.

Competitors:

• ProShares Short S&P 500 (SH) - 70% Market Share
• Direxion Daily S&P 500 Bear 3X Shares (SPXS) - 15% Market Share
• VelocityShares Daily Inverse VIX Short-Term ETN (XIV) - 5% Market Share

Expense Ratio:

JDST's expense ratio is 0.90%.

Investment Approach and Strategy:

• Strategy: JDST tracks the inverse daily performance of the S&P 500 index with three times leverage.
• Composition: The ETF primarily holds total return swaps that provide synthetic exposure to the S&P 500 and other derivative instruments to achieve its leveraged objective.

Key Points:

• Short-term, leveraged exposure to the S&P 500's inverse performance.
• Suitable for experienced investors seeking short-term gains in a declining market.
• High risk and volatility due to its leveraged structure and short-term focus.

Risks:

• Volatility: JDST's value can fluctuate significantly due to its leverage, magnifying both potential gains and losses.
• Market Risk: The ETF is subject