This is an actively managed bond ETF that allocates most of its net assets to mortgage-backed securities (MBS) issued by US government-backed agencies. It holds a broad range of mortgage-related fixed-income securities with differing maturities.

It suits income-focused investors who want to add an asset with low correlation to stocks and corporate bonds within a bond portfolio.

The ETF is managed by Janus Henderson using an active management approach.

The fund combines loan-level fundamental analysis with quantitative models to identify relatively undervalued mortgage assets. It also actively adjusts its allocation between agency and non-agency MBS, seeking excess returns relative to risk.

• An active bond selection strategy rather than index tracking
• A low credit risk profile centered on agency MBS

Assets under management (AUM) stand at $6.4B, and the expense ratio is 0.21% per year.

The most notable difference from peer MBS ETFs is its active management structure, and its fee level is somewhat higher than that of passive products.

Mortgage spreads have repeatedly widened and narrowed with changes in the interest rate environment, producing price volatility, and the results of active management differ from those of peer passive MBS ETFs depending on the period.

This reflects growing interest in bond assets when rate cut expectations take hold, and money seeking stable income tends to flow into the mortgage-backed securities category as a whole.

Its strengths are low credit risk from a focus on government-backed agency MBS and the pursuit of active excess returns, while its weaknesses are interest rate sensitivity and higher fees than passive peers.

The three tickers shown together in the table, MBB, VMBS and SPMB, are low-fee MBS ETFs that track indexes passively and are direct comparisons for this product. JMTG, which shares an active MBS management structure, also appears in the table as a comparable. If low fees are a priority in a passive alternative, products such as SMBS can also be considered, and if you want to hold a broader range of low-correlation bond assets, aggregate bond ETFs that include corporate and Treasury bonds can also be an alternative.

Here are the points to review before investing in JMBS. Given the nature of an active bond ETF, it is necessary to check interest rate sensitivity and the variation in management results in advance, and it is also wise to look at the fee difference versus passive peers.

The main risk factors are bond price changes and shifts in prepayment speed driven by interest rate movements, and because of its active management, performance may diverge from peer passive products.

It suits bond investors who want low credit risk and low correlation with equities, and if fee levels are an important consideration, passive alternatives such as MBB and VMBS are also worth comparing.