LevFin Lens – CLO Q&A with Janus Henderson’s Jessica Shill

In an LFI exclusive interview, Jessica Shill, portfolio manager on the securitized credit team at Janus Henderson Investors, discussed the role of CLO ETFs in handling market volatility and interest rate changes, particularly in light of recent events like the Silicon Valley Bank collapse.

Shill noted that CLO ETFs have demonstrated resilience due to their robust structure in navigating such challenges. She highlighted that interest rate fluctuations are a concern, as they could influence the attractiveness of CLO yields compared to other investment options.

Shill also touched on ETF innovations, such as in-kind trading and the emerging ETF options market. In-kind trading is beneficial during volatile conditions as it reduces transaction costs and market impact, with its usage growing significantly last year, thereby attracting broker-dealers and enhancing market efficiency.

LFI: As an expert in CLO ETFs, what do you think is top of mind for investors right now?

Janus Henderson: Investors are mainly focused on two key areas. First, they want to know how CLO ETFs will react to market volatility and manage fund flows. Second, they are assessing performance as the Fed continues to adjust interest rates…