Posted inNews

Janus Henderson launches bond funds in Singapore

The UK-based asset manager has been given regulatory approval to sell three seasoned bond products in the Lion City.

Janus Henderson Investors has registered its Flexible Income Fund, Global Investment Grade Bond Fund and High Yield Fund for sale to retail investors in Singapore.

“We believe these newly available solutions make excellent options for Singapore investors looking to reduce portfolio volatility and preserve capital by adding an income element to their portfolios,” said Scott Steele, Janus Henderson’s head of distribution, Asia, in a statement.

The three Dublin-domiciled Ucits offerings represent what the firm calls three core fixed income objectives: “defend” (Flexible Income), “diversify” (Global Investment Grade) and “increase income” (High Yield).

The $893m Janus Henderson Flexible Income fund invests at least 67% (but typically more than 80%) of its assets in US bonds of any quality, including non-investment grade bonds and asset-backed and mortgage-backed securities. All of its top 10 holdings are US Treasuries or US sate-owned agencies, according to the fund’s factsheet.

The co-managers, Greg Wilensky and Michael Keough, aim to provide a gross total return that outperforms the Bloomberg Barclays US Aggregate Bond Index by 1.25% a year over any five year period, the fund factsheet notes.

The fund has achieved a 15.31% five-year cumulative return, underperforming the 22.44% by its benchmark, according to FE Fundinfo. However, it has done better year-to-date, up 6.91% compared with 6.30% by the index.

“Our portfolio benefits from a collaborative, global team of more than 100 fixed income professionals with a research-driven focus, a disciplined and flexible approach to asset allocation and a robust risk management foundation,” said Wilensky.

Investment grade

The $358m Janus Henderson Global Investment Grade Bond Fund, co-managed by James Briggs and Michael Keough, aims to provide a return from a combination of income and capital growth over the long term by investing at least 80% of its assets in a global portfolio of investment grade (equivalent to BBB rated or higher) corporate bonds, and the managers have the flexibility to use derivatives, such as total return swaps.

US corporate and financial sector bonds comprise 59% of the portfolio, and around 10% of the fund is allocated to non-investment grade securities, the fund factsheet shows.

The fund aims to generate a gross total return that exceeds the performance of the Bloomberg Barclays Global Aggregate Corporate Bond Hedged USD Index by 1% a year over any five-year period, and has earned a 24.79% five-year cumulative return, which is less than its benchmark, which has achieved a return of 31.58% over the same period, according to FE Fundinfo. Year-to-date the fund has outperformed, up 8.34%, compared with 5.54% by the index.

“We are focused on delivering consistent risk-adjusted returns for our clients, which our Fund has successfully managed to achieve over the long-term but also in 2020, where we outperformed our benchmark every month year-to-date bar July, despite an incredibly volatile and uncertain market backdrop,” said Briggs.

High yield

The objective of the $453m Janus Henderson High Yield Fund is to provide a high level of income with the potential for some capital growth over the long-term, by investing at least 80% of its assets in US high yield (non-investment grade, equivalent to BB+ rated or lower) corporate bonds.

The portfolio is heavily skewed to the US, making up an 84% weighting, and industrial sector corporate bonds comprise the biggest allocation.

The managers Seth Meyer and Brent Olson aim to outperform the Bloomberg Barclays US Corporate High Yield Bond Index by 1.25% a year, before the deduction of charges, over any five-year period, the fund factsheet notes.

The fund’s five-year cumulative return of 21.75% is lower than the 36.29% return by its benchmark, according to FE Fundinfo. The fund is down 0.41% so far this year, compared with a 1.78% rise by the index.

“With low global rates, attractive relative yields in the high yield asset class and defaults forecasted to decline over the next 12 months, we believe there is opportunity for active managers with expertise in security selection and risk management to add value in today’s high yield market,” said Meyer.

Janus Henderson manages $374.8bn of assets globally, including $71bn in fixed income, the firm’s website shows.

The latest registration of the three funds continues “the build out of Janus Henderson’s diversified suite of income-focused investment offerings in Singapore”, according to the statement.

In December 2019, the firm registered the Janus Henderson Multi-Sector Income Fund and Janus Henderson Absolute Return Income Opportunities Fund for sale to investors in the City state.

Janus Henderson Funds: Flexible Income*, Global Investment Grade Bond**, High Yield*** vs benchmark indices

Source: FE Fundinfo. Data in US dollars.
Benchmark indices: *Bloomberg Barclays US Aggregate Bond, **Bloomberg Barclays Global Aggregate Corporate Bond Hedged USD, ***Bloomberg Barclays US Corporate High Yield Bond

Part of the Mark Allen Group.