will be allowed to invest in equities, fixed-income securities in both domestic and foreign markets. The ETFs will also be allowed to invest in other funds if Janus’ “fund-of-funds” relief is approved. As with all Active ETFs in the US, the funds will provide complete transparency of their holdings.
Like most other fund companies, Janus’ filing casts a wide net allowing the company the flexibility to start off with any investment strategy they see fit for their initial funds. As of now, their investment objective is just to “seek long-term growth of capital and current income”. The application also allows Janus to hire external sub-advisors to lead the day-to-day management of the funds. However, the description of the initial funds clearly points out that they will not invest in derivatives such as swaps, options or futures. That should help Janus avoid increased scrutiny from the SEC that many ETF applications have been subject to, since the SEC launched its investigation into derivative usage in ETFs in March.
Janus Capital Group, the parent company of Janus Capital Management, managed $147.2 billion in assets as of June 30, 2010. Janus Capital focuses on employing fundamental, bottoms-up research in its investment process and currently provides access to various equity, income and alternative mutual funds. Janus joins a long line-up of mutual fund firms that have filed applications with the SEC to launch actively-managed ETFs – these include the likes of Legg Mason, Eaton Vance, T. Rowe Price and John Hancock.
Shishir Nigam is the founder of ActiveETFs | InFocus (http://www.etfshub.com/), which provides extensive coverage and analysis of actively-managed ETFs in US and Canada, including debates on major industry trends, insights on the latest product launches from issuers in the Active ETF space as well as in-depth interviews with industry executives and thought leaders.
Disclosure: No positions in above-mentioned names.
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