Blockchain technology and tokenization could challenge the traditional ETF model.
Janus Henderson recently said it is teaming up with Anemoy Limited and Centrifuge to create Anemoy's Liquid Treasure Fund (LTF), an online technology-based fund that gives investors direct access to short-term US Treasuries.
“This doesn't necessarily represent a threat to the ETF industry,” Nick Cherny, head of innovation at Janus Henderson, said on CNBC's “ETF Edge” this week. “I think it's a natural evolution of how we're trying to make the way we provide investment services to clients more efficient and less expensive.”
“We want to be early on this opportunity,” he said.
This is it Janus HendersonThe first tokenized fund, according to a press release from the company.
Cherny points out that it will have all the traditional features of ETFs. But investors can buy and sell them on a blockchain-based platform — with the end investor exposed to “24/7 instant trading, instant settlement, and complete transparency about holding funds, even beyond what ETFs provide.”
He acknowledged that this could irrevocably change the way business is done for some.
“I think there are definitely people in the ecosystem who potentially pose a threat, but you see these players getting involved,” Cherny added.
“Trading 24/7 makes me nervous”
Todd Sohn of Strategas Securities is concerned about the risks associated with consistent trading availability.
“Trading 24/7 makes me nervous. That's the one part where I want to be a little bit cautious depending on who's using this,” the firm's ETF and technical strategist said.
