Janus Henderson AAA CLO ETF

JAAA

Market cap $24.7B

The Janus Henderson AAA CLO ETF ( NYSEARCA:JAAA ) has attracted over $24 billion in assets from income-seeking investors drawn to its 5.3% yield and monthly distributions.

Constructing a stable income portfolio in today's volatile market favors CLO bond ETFs with strong yield and minimal drawdown. My recent portfolio revision removed underperforming or volatile funds, and adding top-performing AAA CLO ETFs and a diversified alternative. PAAA, CLOB, and UYLD are highlighted for superior total return, low drawdown, and attractive yield in their respective classes, with UYLD offering a near-treasury risk profile but higher yield.

Janus Henderson AAA CLO ETF's real distribution yield has softened. However, it still sits well versus other risk-off products. Additional rate cuts are priced into the market. However, unlike 2025, lower inflation seems probable. I anticipate JAAA ETF's real yields to stay above CD and 10-year Treasury yields. Underlying indicators suggest that we might be slightly over-confident about the economy and corporate earnings. Nonetheless, I don't expect disaster to occur.

America: In debt we trust. The Bank of Mom & Dad is seeing growing adoption. We discuss a pattern that's been evolving for decades.

Janus Henderson AAA CLO offers a high-quality, low-risk yield alternative to cash and money market funds, with a 5.5% trailing yield. The fund is 100% AAA-rated, highly diversified across 500+ holdings, and actively managed with a 75% turnover rate and sub-2-month effective duration. Management is incrementally increasing duration and diversification to maximize carry while maintaining a focus on downside risk and credit quality.

On this special episode of the “ETF of the Week” podcast, VettaFi's Head of Research, Todd Rosenbluth, discussed record ETF inflows with Chuck Jaffe of Money Life. The pair discussed why this might be happening, highlighted some standout funds, and more.

The ETF wrapper has come along in leaps and bounds since the ETF rule's arrival in 2019. The tax-efficient, flexible, transparent wrapper offers myriad advantages for their investors, but historically, equity ETF adoption has happened faster.

Interest rates remain elevated, with high-quality, lower-risk bonds and income securities offering competitive yields. Market volatility has some investors worried, and looking for safer investments. ETFs focusing on high-quality, lower-risk, short-term securities seem like particularly interesting choices right now. A quick look at four of these follows.

With $1.01 trillion of net inflows for the year, ETFs are sure to break the 2024 record of $1.1 trillion, likely in November. However, with $325 billion of new money as of October 15, fixed income ETFs have already hit a new milestone for the year.

The Equity Risk Premium is close to zero, while the market remains unstable due to Trump's trade threat. Traditional stocks and bonds offer similar returns but with asymmetric risk and high duration. ETFs on AAA CLOs (like JAAA) could offer positive real yields and stability, with almost zero duration.