Janus Henderson Applies to Unveil Euro UCITS CLO ETF

Janus Henderson has applied to launch a UCITS version of its flagship collateralized loan obligation (CLO) ETF following speculation the firm was set to enter the space.

The U.S. fund manager has filed to establish the Janus Henderson AAA CLO ETF as a legal entity in Luxembourg, as first reported by Ignites Europe.

Although structured as a security, a CLO is an actively managed pool of ‘leveraged’ loans split into tranches, with the AAA tranche at the top of the capital stack.

CLOs have proved popular investment products as by constructing a single security from a diversified bundle of loans, CLOs can offer a higher yield than an individual loan with the same risk and credit rating.

Janus Henderson Activates CLO in Europe

Indeed, Janus Henderson’s U.S. product of the same name has attracted strong inflows since its 2020 introduction, with $14.8 billion in assets under management (AUM) as of 15 November, according to data from the firm.

While Janus Henderson is set to become the most high-profile entrant into the race for European CLO ETF assets, it will not be the first.

In August, Fair Oaks Capital unveiled the Fair Oaks AAA CLO UCITS ETF (FAAA) after receiving approval from the Luxembourg regulator – the Commission de Surveillance du Secteur Financier’s (CSSF).

The ETF has 100% exposure to European AAA-rated CLOs, with the ‘skin in the game’ rule requiring issuing companies to retain a stake in the securities—something that prevents most US CLOs being included in UCITS vehicles.

This means the product Janus Henderson is seeking approval for could look very different to its U.S. counterpart of the same name.

While Janus has filed for approval in Luxembourg, the Central Bank of Ireland (CBI) is set to converge with the CSSF’s stance and approve UCITS funds with 100% exposure to CLOs.

Since acquiring ETF issuer Tabula, Janus Henderson has created a splash in the European ETF market with the launch of high conviction, concentrated active ETFs—one capturing Japanese equities, the other European equities.

This article was originally published on our sister site, etfstream.com.

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Publish date : 2024-11-20 12:33:00

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