This income fund weathered the Enron collapse - now it's available as an ETF

Please note, this interview was filmed Wednesday, 19 March 2025

The Janus Henderson Australian Fixed Interest Active ETF (CBOE: JFIX) provides investors with access to a well-established fixed interest fund that has been actively managed for over three decades. "This is a really exciting launch for us," said Jay Sivapalan, Head of Australian Fixed Interest at Janus Henderson. 

"JFIX provides investors access on the stock exchange to our 30-plus-year-old fixed interest Fund with a click of a button."

JFIX is designed to serve as a defensive investment in portfolios, offering a ballast against growth assets. "It is expected to go up in value when growth assets fall sharply, providing that low or negative correlation for investors," Sivapalan explained.

Diversified portfolio with high credit quality

The ETF gives investors exposure to a diversified portfolio of fixed interest securities, including:

• Government bonds
• State government bonds
• Supranationals
• Corporate debt
• Asset-backed securities

Importantly, the fund maintains a high credit quality, with a minimum average rating of A and a focus on investment-grade corporate bonds. 

"We always start by asking ourselves whether a company is stable or sustainable in credit quality; only then do we look at the price," said Sivapalan.

Active management and portfolio construction

JFIX follows an active investment approach, rejecting passive benchmarks that Sivapalan believes have flaws. 

"The day before the GFC occurred, the corporate debt allocation in benchmarks in Australia was at its highest—the absolute worst time," Sivapalan noted. 

"Similarly, when we had a hundred-year low in bond yields, the duration of the benchmark was at its highest."

Rather than adhering to benchmarks, JFIX starts with a "blank piece of paper" in constructing its portfolio, focusing on quality before price and utilising multiple diversified strategies. 

"We recognise that some strategies may take longer to work, so we take a strategic view over 12 to 24 months to implement them," Sivapalan explained.

Key return drivers: duration, yield curve, and sector allocation

The Fund's performance is primarily driven by movements in bond yields and credit spreads, with additional returns generated through active strategies. 

"This can include duration management, yield curve positioning, choosing between nominal and inflation-linked bonds, as well as sector-specific allocations in state government debt and supranationals," Sivapalan outlined.

Within the credit space, the Fund strategically moves across different capital structures and industries, such as banks, utilities, airports, and university debt. 

"For example, during COVID, we added to the senior debt of airports at a precarious time, and that ended up being one of the best sector calls," he highlighted.

Strong risk management framework

Risk management is central to JFIX’s defensive nature. 

"This Fund is a defensive investment solution. The first thing is we never forget the role it plays in investor portfolios," Sivapalan emphasised. 

The Fund's defensive characteristics include:

• Long duration exposure: to act as a hedge against growth asset volatility
• High credit quality: to minimize default risk
• High liquidity: to ensure quick access to capital

Active risk management is further supported by proprietary tools developed over 30 years, which have helped the Fund navigate crises such as the tech bubble, Enron collapse, the Global Financial Crisis, and COVID-19. 

"We’ve been through multiple market cycles, and our experience in managing risk is key to ensuring sustainable returns without excessive volatility," Sivapalan said.

Accessibility and distribution

The Fund is traded on the Australian stock exchange under the ticker code JFIX, allowing investors to buy and sell units with ease. 

"Investors get instant access to hundreds of bonds that may otherwise be unavailable to individuals," Sivapalan explained.

The Fund seeks to deliver a total return after fees that exceeds its benchmark—the Bloomberg AusBond Composite Index—over rolling three-year periods. Additionally, JFIX distributes income to investors on a quarterly basis, providing a steady stream of returns.

JFIX offers a highly liquid, actively managed fixed interest solution designed to provide stability and diversification in investor portfolios. 

"This is a strategy built on decades of experience, designed to provide protection and consistent returns through market cycles," Sivapalan concluded.

30 years of Australian fixed-interest expertise in one Active ETF

Janus Henderson's core Australian Fixed-Interest strategy, with a robust 30-year track record, now available in the simplicity of one ETF.

ETF

Janus Henderson Australian Fixed Interest Active ETF (JFIX)

Australian Fixed Income

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