JAAA ETF

CLO ETFs have been one of the most popular, best-performing ETFs of the past few years. LQDH uses rate swaps to achieve similar returns to these ETFs. Although their returns are incredibly similar, there are some small differences between these funds.

I advocate for CLOs, particularly the Janus Henderson AAA CLO ETF (JAAA), which has shown strong performance and deserves a fresh review. CLOs bundle risky loans to reduce overall risk, with JAAA focusing solely on the AAA tranche, offering a safer investment. JAAA stands out due to its high AUM and superior returns compared to the bond index, benefiting from floating rate debt.

The Janus Henderson AAA CLO ETF invests in AAA-rated CLOs, offering low-volatility exposure to commercial loans with a 6.39% trailing yield and a 6.01% SEC yield. Rising U.S. bond yields and potential policy shifts could sustain JAAA ETF's coupon-based income. JAAA ETF's expense ratio of 0.21% is justifiable given the illiquidity and optionality of CLOs, despite its modest return structure.

2024 has seen a record-breaking launch of over 300 actively managed ETFs, spurred by the SEC's 2019 Rule 6c-11. Janus Henderson AAA CLO ETF, a top-performing AAA-rated collateralized loan obligation ETF, offers a 6.4% yield, strong capital preservation, and is recommended for income portfolios. The JAAA ETF's high credit quality, attractive floating-rate yields, and low correlation make it a key component for fixed income diversification.

The Janus Henderson AAA CLO ETF is a low-duration asset with the necessary attributes to protect against rising market volatility. JAAA ETF invests in investment-grade collateralized loan obligations, providing sustainable dividends and low concentration risk. Although its 6%+ dividend yield might recede in a lower interest rate environment, I anticipate it will sustain a decent "throughout the cycle" yield.

Janus Henderson AAA CLO ETF has seen a significant increase in AUM to $10.25B since the beginning of 2022. JAAA's holdings consist of 369 AAA CLO tranches with a weighted average maturity of 3.99 years and an effective duration of 0.21 years. CLOs offer unique characteristics such as floating rate coupon payments, making JAAA a desirable low-duration product in the current rate environment.

When interests rates go up the Janus Henderson AAA CLO ETF (Ticker: JAAA) does well and the ETF has hit $10B since its October 2020 launch. Janus Henderson Head of Securitized Products John Kerschner discusses its performance and says this is still an ETF to "hold for a very long time.

Janus Henderson AAA CLO ETF offers exposure to high-quality Collateralized Loan Obligation debt instruments with a focus on triple-A rated quality. JAAA provides a high level of dividend income, making it attractive for income-focused investors, particularly those nearing or at retirement age. The risk profile of JAAA is low, with a majority of holdings rated AAA and a low historical default rate. However, the fund's performance may be affected by changes in interest rates.

The Janus Henderson AAA CLO ETF offers retail investors the opportunity to invest in top-tier AAA-debt tranches of Collateralized Loan Obligations (CLOs). JAAA has exceeded expectations by delivering a return of 8.5% since the previous article, thanks to tightening credit spreads. However, it is uncertain if future returns will be as robust due to the disparity between credit spreads and actual default rates.