Blockchain technology and tokenization can challenge the traditional ETF model.
Janus Henderson recently said it is partnering with Anemoy Limited and Centrifuge to create Anemoy’s Liquid Treasury Fund (LTF), a technology-based fund that will give investors direct access to short-term US government bonds.
“It’s not necessarily a threat to the ETF industry,” Nick Cherney, Janus Henderson’s head of innovation, said this week on CNBC’s “ETF Edge.” “I think it’s more of a natural evolution of how we’re trying to make the way we deliver investment services to clients more efficient and less expensive.”
“We want to get to that opportunity early,” he said.
This is Janus Henderson‘s first tokenized fund, according to a company press release.
Cherney notes that it would have all the traditional features of an ETF. But investors could buy and sell it on a blockchain-based platform – exposing the end investor to “instant 24/7 trading, instant settlement, total transparency on holding funds, so even beyond what ETFs offer.”
He acknowledged that for some this could irreversibly change the way business is done.
“I think there are certainly people in the ecosystem for whom it is potentially threatening, but you’re seeing those players getting involved,” Cherney added.
‘Trading 24/7 makes me nervous’
Todd Sohn of Strategas Securities is concerned about the risks associated with constant trading availability.
“Trading 24/7 makes me nervous. That’s the one area where I want to be a little bit careful depending on who’s using this,” said the ETF and firm’s technical strategist.