Latest news with #JanusHendersonAAACLOETF
CNBC
2 days ago
- Business
- CNBC
How investors can use these high-yielding assets to diversify their portfolios
With interest rates still elevated, investors continue to find juicy yields in collateralized loan obligations. Some $4.7 trillion has flowed into CLO and bank loan exchange-traded funds since the start of the year, following 2024's record $25.6 billion in inflows , according to State Street. While investors fled the funds, along with many others, in April, the ETFs have bounced back. In May, $2 trillion in new money moved into bank loan and CLO ETFs, the ninth best month ever, State Street analyst Matthew Bartolini said in a May 31 note. CLOs are securitized pools of floating-rate loans to businesses and so their coupon payments shift alongside short-term interest rate changes. "That credit segment may continue to receive above-average inflows, given that sector's floating-rate profile and the Fed's 'wait-and-see' approach to rate cuts," Bartolini wrote. The Federal Reserve is set to meet on June 17-18 and is widely expected to hold interest rates steady, as it has been all year. Traders anticipate the next cut to come in September, according to the CME FedWatch Tool . Once the central bank starts to dial back rates, yields on CLOs are expected to gradually move down. Himani Trivedi, head of structured credit at Nuveen, said demand for the products has been steady up and down the capital structure, and expects that to continue. "There's not many floaters out there. So this has been a really good diversifier for investors," she said. "Given the volatility and potential for higher for longer, it still continues to see that flow come in, up and down the capital structure, for CLOs." Right now the Janus Henderson AAA CLO ETF (JAAA) has a 30-day SEC yield of 5.48% and a net expense ratio of 0.20%. It has $20.96 billion in assets under management as of Thursday. Some $4 billion has moved into the fund so far this year, according to FactSet. "With CLOs, you're getting a decent return," said John Kerschner, head of U.S. securitized products and a portfolio manager at Janus. "You're not taking outsized risk." JAAA YTD mountain Janus Henderson AAA CLO ETF year to date In fact, during the recent market dislocation, spreads on CLOs widened but had much less volatility than corporate credit or other parts of the bond market, he said. Liquidity was "incredible," he added. "It just showed that in these dislocations, instead of liquidity drying up, it actually gets better," Kerschner said. "There's more trading and that's what you want as an end investor." Picking up more yield Investors can pick up more yield as they move down in ratings, although those CLOs rated AAA are the first in line to get paid if the borrower declares bankruptcy. Nuveen launched its AA-BBB CLO ETF (NCLO) in December. It currently has a 6.4% 30-day SEC yield and 0.25% total expense ratio. It has collected $19 million in flows year to date, per FactSet, and has net assets of $89.4 million. NCLO YTD mountain Nuveen AA-BBB CLO ETF year to date While the ETF holds CLOs below AAA, they are still investment grade, Trivedi said. Assets with a rating of BBB- or higher by Standard & Poor's or Baa3 or better by Moody's, are considered investment grade and have a lower default risk compared to assets with lower ratings. Strong fundamentals have kept CLO defaults low, she noted. "They do provide a spread pick up, so where, even when the rates go down, you still have this additional carry," Trivedi said of those in the AA to BBB range. That carry is about 200 basis points over Secured Overnight Financing Rate (SOFR), which is the primary benchmark for CLOs, she added. "So even if SOFR was going down, against other fixed income instruments, you will get that extra credit spread for a minimal risk," she said. In addition, a recent analysis by VanEck found that over the past decade, A-rated CLOs outperformed AAA CLOs by 142 basis points a year. They also have lower volatility than investment-grade corporate bonds. BBB-rated CLOs topped AAAs by 147 basis points, the analysis found. The firm launched the VanEck AA-BBB CLO ETF (CLOB) last September. The fund invests primarily in the AA- to BB-rated tranches, has a 7.17% 30-day SEC yield and a 0.45% expense ratio. It has $116.39 million in total net assets, as of Thursday. Janus Henderson also has a lower-investment grade CLO product, the B-BBB CLO ETF (JBBB), launched in 2022. It has $1.33 billion in assets under management. The fund has seen outflows of $62 million year to date. CLOs in your portfolio While CLOs can be an attractive part of your income portfolio, investors should make sure they are diversified. When the Fed does start to cut rates, CLO yields will follow — and investors will need to make sure they also have some longer-dated bonds. Financial advisors and investment experts have been recommending intermediate-term duration assets for fixed-income investors. Janus Henderson's Kerschner likes to use AAA CLOs in more of a barbell approach, with the floating-rate assets on one end and longer duration agency mortgage-backed securities on the other. The firm's Mortgage-Backed Securities ETF (JMBS) has an effective duration of 7 years, a 5.11% 30-day SEC yield and 0.22% net expense ratio. That doesn't mean investors shouldn't have other assets in their fixed income portfolio, but he likes this barbell for at least over the next six to 12 months — and potentially longer. Nuveen sees CLOs as an excellent diversifier because they have a low correlation to most fixed-income assets. Because they are versatile, they can fill a variety of roles within the portfolio — including an alternative to short-duration bonds or a complement to high-yield bonds, the firm said in a rjecent note. Whether to stick with AAA-rated CLOs or the lower investment-grade assets depends on the investors time horizon, Trivedi explained. AAA-rated products can be seen more as a short-term cash investment, while the AA-BBB makes sense for a longer-term core investment, she said. "They can continue to get that coupon even when the rates go higher or lower," she said. "They're in a good safe spot."
Yahoo
01-05-2025
- Business
- Yahoo
Bond ETFs Weather April Volatility, Bring in $10B of New AUM
Market volatility driven by tariff uncertainty hit bond mutual funds hard in April: Investors pulled roughly $60 billion from these funds—the largest outflows since 2022, according to Bloomberg. Bond ETFs, on the other hand, experienced $10 billion inflows. The exchange-traded fund wrapper tends to be cheaper, more liquid and more transparent than its mutual fund counterpart, offering a heightened appeal to money managers, especially during market turmoil. "The tariff tantrum caused a sizable correction in equities. While equity indices flirted with bear market drawdowns, fixed income returns remained positive on the year,' Thomas Urano, co-CIO and managing partner at Sage Advisory, told 'As such, we saw significant rebalancing flows out of fixed income into equities across multiple balanced portfolio platforms.' The bond market performance served as a proper portfolio diversified, allowing for portfolio rebalancing when asset allocation weights drifted offsides, Urano added. While there's no fixed-income class in the mutual-fund wrapper that hasn't experienced outflows of late, according to Bloomberg, ETFs are faring much better. The JPMorgan Core Plus Bond ETF (JCPB), for instance, experienced $177.5 million of net inflows in April, data show. The flow story is different for the more expensive, actively managed fixed-income ETFs. The JPMorgan Ultra-Short Income ETF (JPST) and Janus Henderson AAA CLO ETF (JAAA) experienced net outflows in April, according to data, of 904.3 million and 1.1 billion, | © Copyright 2025 All rights reserved
Bloomberg
08-04-2025
- Business
- Bloomberg
Cracks Are Forming in CLO Market as ETFs on Record Selling Spree
Signs of worry are emerging in the market for collateralized loan obligations as tariff-fueled volatility sweeps across asset classes. The $20 billion Janus Henderson AAA CLO ETF (ticker JAAA), which invests in the highest-rated type of bonds known as collateralized loan obligations, saw nearly $600 million of withdrawals on Monday, the biggest single-day outflow since the fund's inception in 2020, according to data compiled by Bloomberg.
Yahoo
30-03-2025
- Business
- Yahoo
Early Retiree Making $170,00 a Year in Dividends Shares Top 7 Stock Picks, Says 'I've Zero Regrets'
Dividend stocks are gaining traction as investors look to diversify their portfolios amid tariff volatility and geopolitical uncertainties. Given their strong contribution to market returns, dividend stocks are an appealing investment option. Data shows that from December 1994 through the end of last year, reinvested dividends accounted for about 46% of the S&P 500 total return. But which dividend stocks can help you generate significant income over the long term? Let's see a case study for ideas. Don't Miss: Many are using retirement income calculators to check if they're on pace — Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." About a month ago, someone asked investors on r/Dividends — a Reddit discussion board with 680,000 followers — whether anyone was able to live comfortably off dividends and what kind of capital investments were needed to make over $50,000 in dividends. The question received more than 150 comments, with many investors sharing interesting income reports and advice. However, one comment caught our attention. An investor said he was making $170,000 in dividends and interest. He advised investors not to focus too much on yield and avoid spending from their dividend income. "It's just math. And the time/patience needed to accumulate, which in my case was about 35 years. Just a tip: paying for random expenses with small amounts of dividend while you are accumulating is a great way to choke your future wealth," he said. The investor, 58, said his total portfolio worth was $4.8 million and he retired in 2021. "Retirement isn't paradise, but I have zero regrets and I'm up $1.2MM since retiring, despite spending plenty during the past 3.5 years," he said in a separate comment. Trending: It's no wonder Jeff Bezos holds over $250 million in art — Let's take a look at some of the key holdings in the investor's portfolio. SPDR Portfolio High Yield Bond ETF The SPDR Portfolio High Yield Bond ETF (NYSE:SPHY) provides inventors exposure to USD-denominated high-yield debt. It tracks the ICE BofA US High Yield Index. It generates monthly income from the interest income it collects on its high-yield bond holdings. Janus Henderson B-BBB CLO ETF Janus Henderson B-BBB CLO ETF (CBOE: JBBB) gives investors exposure to securities with low default risk, low correlations to traditional fixed-income asset classes and yield potential. It focuses on collateralized loan obligations and yields over 7%. Janus Henderson AAA CLO ETF The Janus Henderson AAA CLO ETF (NYSE:JAAA) invests in high-quality collateralized loan obligations and provides investors with exposure to asset classes with low risk and volatility. It yields over 6%.JPMorgan Equity Premium Income ETF JPMorgan Equity Premium Income ETF (NYSE:JEPI) makes money by investing in some of the most notable large-cap U.S. stocks and selling call options. JPMorgan Nasdaq Equity Premium Income ETF JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ) is a high-yield covered call ETF that distributes monthly dividend income. The ETF invests in Nasdaq companies and generates extra income by selling call options. JEPQ has a dividend yield of about 9%. NEOS S&P 500 High Income ETF NEOS S&P 500 High Income ETF (CBOE: SPYI) is a high-yield covered call ETF that pays monthly dividend income. It invests in some of the top S&P 500 companies and generates extra income by selling call options on stocks. The Virtus InfraCap US Preferred Stock ETF The Virtus InfraCap US Preferred Stock ETF (NYSE:PFFA) invests in preferred stocks of US companies. The fund has a dividend yield of more than 9%. Read Next:The average American couple has saved this much money for retirement —? UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article Early Retiree Making $170,00 a Year in Dividends Shares Top 7 Stock Picks, Says 'I've Zero Regrets' originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
Yahoo
26-03-2025
- Business
- Yahoo
Global Active ETF Assets Hit Record High $1.3 Trillion
Active exchange-traded funds are experiencing unprecedented growth in 2025, with global assets reaching a new record of $1.3 trillion at the end of February, according to ETFGI's latest industry report. The expansion of actively managed ETFs highlights a shift in how investors access active management, with these products now accounting for nearly 9% of the U.S. ETF market compared to just 2% in 2019, according to data from Morningstar Direct, highlighting the growing investor appetite for active strategies in the ETF wrapper. February's inflows of $51.7 billion pushed year-to-date net inflows to $103.7 billion, the highest on record and well above the $46.4 billion seen during the same period in 2024, according to ETFGI. Within the United States specifically, active ETFs are approaching the major $1 trillion milestone, with total net assets reaching $956 billion as of February 2025, according to Morningstar Direct. The active ETF market has maintained impressive momentum despite varying market conditions. While the S&P 500 decreased by 1.3% in February, active ETF assets continued to climb, according to ETFGI. According to Morningstar's manager research team, "Exchange-traded funds used to be synonymous with passive investing. At the start of 2019, actively managed ETFs represented just over 2% of the U.S. ETF market. Since then, organic growth for the active ETF market has consistently exceeded 20% per year." Equity-focused active ETFs led inflows during February, gathering $25.1 billion globally and bringing year-to-date inflows to $51.5 billion, according to ETFGI. Fixed-income active ETFs followed closely with $22.1 billion in February inflows. The Janus Henderson AAA CLO ETF (JAAA) topped the individual fund rankings with $2 billion in net new assets during February, according to ETFGI data. The JPMorgan Ultra-Short Income ETF (JPST) and iShares High Yield Muni Active ETF (HIMU) followed, with $1.9 billion and $1.8 billion in new assets, respectively. U.S. active ETF growth has been robust, with January seeing active ETFs pull in a record $43 billion, according to Morningstar Direct. The global active ETF marketplace now encompasses 3,395 products with 4,354 listings from 543 providers across 40 exchanges in 32 countries, according to ETFGI's February | © Copyright 2025 All rights reserved
