Janus Capital Group, a global investment management firm received an initial approval from the Securities and Exchanges Commission (SEC) to offer exchange traded funds (ETFs).
Janus acquired ETF provider last year
Janus Capital Group acquired VS Holdings in preparation for the launching of its ETF. Morningstar Senior Analyst Gregg Warren previously commented that the acquisition provided Gross a platform for an ETF.
It also opened the door for him to talk to some institutional clients. The move also established a position for Janus within the fast growing rules-based and active ETF market.
Based on its application with the SEC, Janus Capital Group first filed a request for an order allowing its offering of ETFs on September 3, 2010. The global investment management firm amended its filing twice. The most recent was on November 6, 2014—nearly two months after Gross joined the firm.
Janus ETF Trust
Janus Capital Group indicated in its application that Janus ETF Trust will offer Funds or its respective Master Fund have distinct investment strategies. It will utilize an active management strategy to achieve its investment objective.
The Initial Fund will utilize an actively-managed fixed-income strategy to maximize total return and consistent with preservation of capital. It will invest in bonds including, but not limited to government notes and bonds, corporate bonds, convertible bonds, commercial and residential mortgage-backed securities, asset-backed securities, zero coupon bonds, and derivatives that provide exposure to bonds.
Janus Capital Group’s initial fund appears similar to the Janus Global Unconstrained Bond Fund managed by Gross. Most recently, Gross express confidence that he “can continue to produce a track record like he did at PIMCO.”
Gross also said, “I’m a very competitive person and I like to post numbers that are better than the market and better than the competition.”
Market observers suggested that once Janus Capital Group starts offering its ETFs, the inflows could be huge—maybe half of the $105 billion redeemed by investors in 2014, the worst redemption year in the history of fund management.
In December alone, investors redeemed $19.4 billion from Pimco Total Return Fund, the flagship fund previously run by Gross.
The SEC stated that it will grant the so called “exemptive relief”to Janus Capital Group unless a petition to block its application happens.
Fund companies are required to apply and obtain an exemption from certain provisions under the Investment Company Act of 1940 to offer ETFs.