Janus Henderson Investors' ETF Take on the MBS Market

The majority of the Fund will invest in mortgage-related securities issued by the U.S. government and its agencies, such as the Government National Mortgage Association, the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation.

While the active ETF will primarily hold investment-grade securities, it may also invest in lower-rated, higher-yielding securities when Janus Capital believes that the increased risk is justified by the potential for increased return.

The portfolio managers will leverage the company’s deep research capabilities in securitized assets to help investors pinpoint inefficiencies and potential enhance returns in the MBS market.

“We are hyper-focused on modelling borrower behaviour to appreciate why and when home owners refinance or move,” Childs said in a note. “Our bottom-up approach – where we analyse the idiosyncrasies and key fundamentals of each security rather than relying on a top-down macro view – is critical to our ability to outperform the Bloomberg Barclays US MBS Index.”

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