Janus Henderson Securitized Income ETF

JSI

Market cap $1.22B

Janus Henderson Securitized Income ETF is downgraded to 'Hold' after a recent -1.5% drawdown tied to Tricolor Auto's bankruptcy. JSI's exposure to sub-investment grade securitizations introduces significant credit risk. Current benign credit conditions mask underlying risks; a true recession could trigger larger drawdowns and higher default rates for JSI.

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.

JSI offers exposure to high-quality, short-term securitized assets like MBS, ABS, and CLOs. The fund has below-average credit risk, duration, and overall volatility, above-average yield and past returns. It seems better than the average ETF, but quite similar to several ETFs targeting this same niche.

The Janus Henderson Securitized ETF offers unique exposure to securitized credit, diversifying beyond traditional fixed income. JSI's portfolio is well diversified and offers a yield pickup compared to similarly rated corporate debt. JSI has delivered solid historical results with relatively low volatility.

The Securitized Income ETF (JSI) offers the "best of" Janus Henderson's ideas in the securitized asset space, including agency mortgages, CLOs, and others. The fund has outperformed the aggregate bond index in total return, yield, and volatility since inception, proving itself to potential investors. While risks remain, including leverage employed by the fund, JSI offers access to hard-to-get products for retail investors in a liquid ETF wrapper.