New York, NY – In a comparison between two popular exchange-traded funds (ETFs), Janus Henderson B-BBB CLO ETF (JBBB) and iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD), investors are faced with a decision between two different approaches to investment. Both funds focus on investment-grade securities, with JBBB leaning towards variable rate investments and LQD focusing on fixed-rate securities, offering unique opportunities and risks to investors.

JBBB, an actively managed fund, has shown strong performance since its inception, outperforming its counterparts in the market. With a focus on BBB-rated CLOs, the fund boasts lower default rates compared to LQD’s A-BBB rated bonds. Despite weaker credit ratings, the actual default rates for JBBB have been lower, indicating a lesser degree of risk in this aspect.

On the other hand, LQD’s fixed-rate bonds carry above-average duration and rate risk, making them more volatile during shifts in interest rates. The fund’s dividend yield of 4.2% reflects its stable but modest returns compared to JBBB’s more robust 7.8% dividend yield. This difference in yields highlights the contrasting risk-return profiles of the two ETFs.

In terms of interest rate risk, JBBB has performed well during periods of rising rates due to its variable rate investments, while LQD has shown resilience during rate cuts. The structural differences in their holdings suggest that JBBB may be more vulnerable to a downward trend in interest rates, while LQD could benefit from such a scenario.

Overall, JBBB emerges as a clear winner in terms of performance, volatility, and dividend yield. However, investors must consider the implications of future rate cuts and the potential impact on these ETFs. With differing risk exposures and investment strategies, the choice between JBBB and LQD ultimately depends on individual risk preferences and market outlook.