Janus Capital Gets Initial Nod from SEC to Offer ETFs - Analyst Blog
Global investment firm Janus Capital Group, Inc. JNS seems to be on track with its business strengthening initiatives. The Denver, CO-based company obtained a preliminary approval from the Securities and Exchanges Commission (SEC) to offer a set of exchange traded funds (ETFs).
Janus Capital had filed its application for actively managed ETFs in Sep 2010, which was further amended on Mar 2011 and Nov 2014.
As per Janus Capital’s application highlighted in the SEC filing, Janus ETF Trust intends to offer Funds and each such fund will derive its investment objective by employing an active management strategy. The initial fund to be offered would achieve maximum return utilizing the actively-managed fixed-income strategy.
The initial fund would invest in bonds including government notes and bonds, corporate bonds, convertible bonds, commercial and residential mortgage-backed securities, asset-backed securities, zero-coupon bonds and derivatives that provide exposure to bonds.
Among several conditions, Janus Capital is required to disclose the ETF positions regularly. Per the filing, “On each Business Day, before commencement of trading in Shares on a Fund’s Listing Market, the Fund will disclose on the Website the identities and quantities of the Portfolio Positions held by the Fund, or its respective Master Fund, that will form the basis for the Fund’s calculation of NAV per Share at the end of the Business Day.”
The initial fund looks similar to the Janus Global Unconstrained Bond Fund (JUCAX), which operates in a mutual fund version and is currently being managed by legendary bond investor, Bill Gross, who joined the company in Sep 2014 after departing from Pacific Investment Management Company (PIMCO) – the investment firm which he co-founded. Notably, Gross managed the ETF version of PIMCO’s Total Return Fund as PIMCO Total Return Active ETF BOND. Under Gross’ management BOND grew as one of the major actively managed ETFs in the market.
The latest revelation by Janus Capital follows the major moves it undertook last year. Apart from hiring Gross in September, the company completed the acquisition of VS Holdings Inc., the parent company of VelocityShares, LLC. Connecticut-based VelocityShares is a major provider of institutionally-focused exchange-traded products (“ETPs”), including ETFs, that are focused on offering volatility management solutions. The acquisition reflected efforts of the company to tap opportunities in the growing ETF market as well as comes in line with the company’s strategy of “intelligent diversification.”
Janus Capital is yet to receive a final approval for the offering of actively managed ETFs. It is a matter of time to see whether the ‘Bill effect’ is repeated in the proposed funds as it happened in PIMCO’s Total Return Fund.
Currently, Janus Capital carries a Zacks Rank #2 (Buy). Some better-ranked stocks in the investment management space include PennantPark Floating Rate Capit PFLT and Woori Bank Co., Ltd. WF. Both the stocks sport a Zacks Rank #1 (Strong Buy).
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