On Wednesday, Janus Henderson Investors launched its newest fund, the Janus Henderson Emerging Markets Debt Hard Currency ETF (JEMB ). This ETF is now available on the NYSE Arca.
The actively managed JEMB aims to provide a combination of return through income and capital growth. With a long-term strategy, the fund has a net expense ratio of 0.52%.
To achieve its investment objective, JEMB invests the large majority of its net assets into emerging market debt securities. These debt securities are denominated in hard currencies.
Eligible debt securities for the fund include asset-based securities, mortgage-backed securities, perpetual bonds, and fixed and floating rate securities, among others. The fund prospectus noted that JEMB invests in securities of issuers economically tied to emerging market countries. Assets within the ETF can include securities from issues tied to frontier markets countries, as well.
Structured Portfolio Construction
JEMB’s portfolio may consist of debt securities of any credit rating, including unrated or high yield bond options. Up to 30% of the fund’s net assets may go to corporate debt securities, while 10% may go to asset-backed or mortgage-backed securities. A separate 10% of net assets may also get allocated to contingent convertible bonds.
Meanwhile, up to 20% of JEMB’s assets may go to total return swaps, and 10% may be used for distressed or defaulted securities. Currency exposure for the fund hedges to the U.S. dollar, though JEMB may be exposed to other hard currencies.
To provide additional income, the ETF may opt to lend its securities to broker-dealers or institutions. The amount lended can be equal to up to a third of JEMB’s total assets.
“Janus Henderson has had notable success with its slate of highly targeted products, such as its suite of actively managed fixed income ETFs (namely, JAAA and JMBS),” noted Kirsten Chang, VettaFi senior industry analyst. “It’s exciting to see the firm branch out into other frequently overlooked areas, like the emerging market debt space, given ample liquidity and attractive yields.”
With JEMB coming to the market, Janus Henderson now has 12 different ETFs listed in the U.S. All in all, these funds account for over $20 billion in assets under management.
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