Global investment manager Janus Capital Group has rolled out four thematic exchange-traded funds offering exposure to companies whose businesses are involved in care for the elderly, health & fitness provisions, obesity treatments, and supplying organic consumer products. The focus on the niche areas is likely to appeal to investors who believe the ETFs are strategically placed to benefit from changes in global demographics and consumer tastes. Each fund tracks a research-driven index compiled by Germany-based Solactive.
Nick Cherney, Senior Vice President and Head of Exchange Traded Products for Janus Capital Group.
Nick Cherney, Senior Vice President and Head of Exchange Traded Products for Janus Capital Group, commented in a statement: “Changes in demographics and lifestyle are altering the investment landscape. These thematic ETFs are designed to capitalize on those shifts to give advisors new tools that can help clients achieve better financial outcomes.”
The Janus Long‐Term Care ETF (NASDAQ: OLD) aims to take advantage of increasing longevity rates by investing in companies globally that own or operate senior living facilities, manage speciality hospitals, provide nursing services or are engaged in biotech research for age‐related illnesses. The fund tracks the performance of the Solactive Long-Term Care Index.
According to research conducted by Janus, the US population aged 65+ will almost double to 83 million by 2050, while those aged 85+ will increase four times to 19 million. The US nursing care facilities industry, already worth over $130bn, is expected to rapidly increase over the medium term to meet this demand with a recent Urban Institute Study reporting another 1.2 million more employees will be needed by 2025 alone.
As of 9 June 2016 the fund has significant exposure to the financials (67.4%) and health care (31.8%) sectors. The largest country exposures are to the US (77.5%), France (6.9%) and New Zealand (5.4%). There are 39 holdings in the fund of which the largest constituents are senior assisted living REITs and members of the S&P 500 Index Ventas (21.2%) and Welltower (20.0%). The fund has a total expense ratio (TER) of 0.50%.
The Janus Health and Fitness ETF (NASDAQ: FITS) aims to take advantage of an increasing passion for fitness among the global population by investing in companies which deal in nutrition, sports apparel, fitness technology and exercise equipment, as well as those engaged in managing health clubs. The fund tracks the performance of the Solactive Health and Fitness Index.
Since 2008, US health club memberships have climbed almost 19% annually, taking revenues to $24.2bn, according to Janus research. Sales of fitness trackers and other wearable technologies are predicted to reach $5.4bn by 2019, while revenue from footwear and other sports apparel has grown at a 42% pace over the past seven years.
As of 9 June 2016 the fund has significant country exposure to the US (67.4%), Japan (11.0%) and Germany (5.0%). The vast majority of the fund is invested in the consumer discretionary sector (91.1%). There are 69 holdings in the fund of which the largest constituents are Nike (19.9%), Lululemon Athletica (5.3%) and Adidas (5.0%). The ETF has a TER of 0.50%.
The Janus Obesity ETF (NASDAQ: SLIM) seeks exposure to companies that provide treatment and care for obesity and obesity‐related disease, including biotechnology and pharmaceutical, healthcare and medical device companies, other health care firms, the weight loss market and supplement companies. The fund tracks the performance of the Solactive Obesity Index.
According to the World Health Organization more than 640 million people globally are classified as obese, a 600% rise in 40 years. In the US, 75% of men and 67% of women aged 25 and older are now either overweight or obese. Globally, obesity-related treatments cost $2tn a year in healthcare.
As of 9 June 2016 the fund has significant country exposure to the US (49.6%), Denmark (19.7%) and Germany (19.1%). The largest sector exposures are in health care (87.4%), consumer staples (6.6%) and consumer discretionary (6.0%). There are 42 holdings in the fund of which the largest constituents are Novo Nordisk (19.7%), Fresenius Medical Care (19.1%) and DexCom (4.9%). It has a TER of 0.50%.
The Organics ETF (NASDAQ: ORG) aims to take advantage of an increasing global desire for naturally derived food and personal care items through exposure to companies that service, produce, distribute, market or sell organic food, beverages, cosmetics, supplements or packaging. The fund tracks the performance of the Solactive Organics Index.
According to Janus research, sales of organic products in the US have surged tenfold over 17 years to $39bn in 2014 and there are now more than 19,500 organic farming operations in the US, helping to satisfy an expected 16% rise in demand globally for organic food annually through 2020.
As of 9 June 2016, the fund is primarily invested in the consumer staples (87.1%) sector, followed by the consumer discretionary (6.9%) sector. The major country exposures are to the US (49.7%), Australia (11.1%), Japan (9.2%) and China (7.1%). The fund has 24 holdings of which the largest constituents are Whole Foods Market (22.7%), United Natural Foods (5.3%) and Hain Celestial (5.1%). It has a TER of 0.50%.
Janus has been relatively active in the ETF space in 2016. Earlier this year it launched two smart beta ETFs, the Janus Small Cap Growth Alpha ETF (JSML) and the Janus Small/Mid Cap Growth Alpha ETF (JSMD) on the Nasdaq Exchange. Linked to proprietary in-house indices, the funds utilise the firm’s “Smart Growth” strategy – a systematic process that seeks to identify resilient small- and mid-cap companies poised for long-run sustainable growth by evaluating firms on ten fundamental factors, across three critical areas – growth, profitability, and capital efficiency.
The ETFs follow in the wake of Global X who launched two thematic funds last month taking advantage of evolving global demographics (See “Global X unveils two thematic equity ETFs”). The Global X Longevity Thematic ETF (LNGR), and the Global X Health & Wellness Thematic ETF (BFIT) trade on Nasdaq.