JAAA: Becoming A Powerhouse On The Back Of Higher Rates

Summary

• Janus Henderson AAA CLO ETF provides retail investors access to the previously inaccessible AAA CLO asset class.
• JAAA has experienced a significant increase in assets under management, reaching nearly $3 billion in under two years, due to its floating rate nature and spread pick-up.
• The fund is an attractive yielding vehicle with minimal credit risk, making it a suitable option for investors seeking floating rate exposure and diversification benefits.
• AAA CLOs have de-minimis credit risk, but do have a slight liquidity constraint when compared to treasuries and corporate bonds.

Galeanu Mihai

Thesis

Janus Henderson AAA CLO ETF (NYSEARCA:JAAA) is an exchange traded fund. The vehicle focuses on a floating rate asset class, namely AAA CLO tranches. Until the advent of this fund, AAA CLOs were an asset class inaccessible to retail investors. CLOs are securitizations, which

Analyst’s Disclosure:I/we have a beneficial long position in the shares of JAAA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.