Janus Henderson Mortgage-Backed Securities ETF

JMBS

Market cap $6.74B

There is a growing category of high-yield ETFs that generate income by selling options on equity indexes, and for the right investor, they serve a purpose.

Janus Henderson Mortgage-Backed Securities ETF focuses on high-quality MBS assets of moderate duration. The fund's high-quality portfolio sees below-average drawdowns and volatility, while its 5.5% dividend yield ensures a reasonably good amount of income for investors. Returns have been reasonably good since inception, with the fund outperforming its benchmark.

The Janus Henderson Mortgage-Backed Securities ETF ( NYSE:JMBS ) offers retirees a monthly income stream with a 5.04% yield, positioning itself as a compelling alternative to traditional bond funds.

The Janus Henderson Mortgage-Backed Securities ETF invests primarily in agency/investment grade securities, employing 28.8% leverage to increase returns. A 0.6% drop in U.S. 10-year yields has resulted in JMBS performing in line with pure-play treasury alternatives such as IEF so far in 2025. While some incremental decline in long-term yields is likely to materialize, JMBS should outperform going forward thanks to its higher current dividend yield.

Janus Henderson's head of innovation Nick Cherney tells CNBC's Contessa Brewer the tokenization of ETFs is potentially the most transformative technology to hit financial services in decades and how the firm is getting ahead of the interest by launching products in the category. VanEck's product manager Nicholas Frasse joins the conversation.

Nick Cherney of Janus Henderson sits down with CNBC's Contessa Brewer on 'ETF Edge' to discuss the strategies investors can take to position their portfolios before the Fed decision this week and the interest in tokenization vs. taking the traditional ETF route.

The Fund returned 1.02% and the Bloomberg U.S. Mortgage Backed Securities Index returned 1.14%. Early in the quarter, MBS spreads widened in line with other fixed income sectors, as risk markets sold off amid the Liberation Day tariff announcement. Agency MBS continue to offer attractive nominal yields, while recently they have also exhibited their diversification benefits by way of low or negative correlation to equities and negative rate-spread correlation.

On Wednesday, Janus Henderson expanded its ETF lineup with the launch of the Janus Henderson Asset-Backed Securities ETF (JABS). JABS is an actively managed fund that looks to generate a mix of income and capital preservation.

Mortgage rates trade at wide spreads to treasuries and other high-quality assets. JMBS is a simple, active ETF focusing on high-quality agency mortgages. It seems marginally superior to bond benchmarks on most major metrics, including yield, returns, and risk-adjusted returns, but with few significant advantages or benefits.

At the end of April, Janus Henderson managed $31 billion in actively managed ETF assets. Approximately half of the money impressively flowed into these ETFs in the prior 12 months.