JAAA - JAAA: Remain A Buy On Fed Pause

2024-05-03 19:02:05 ET

Summary

• The Janus Henderson AAA CLO ETF provides retail investors access to high-quality AAA-debt tranches of Collateralized Loan Obligations (CLOs).
• JAAA has performed better than expected, returning 8.5% since the last article, as credit spreads have tightened to near all-time lows.
• However, future returns may not be as strong because there is a gap between credit spreads and actual defaults.
• Overall, JAAA should still perform well, as a Fed on hold means short-term rates will stay high.

I have been a supporter of the Janus Henderson AAA CLO ETF ( JAAA ) for over a year, as I liked the fund's high-quality portfolio and floating rate nature. So far, my trust has not been misplaced, as the JAAA ETF has performed better than my expectations, returning 8.5% since my article (Figure 1).

With a year gone by since my last article, I wanted to revisit the JAAA ETF, to see if it is still a fund worth recommending....

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