Blockchain technology and tokenization may challenge the traditional ETF model.
Janus Henderson recently said it is working with Anemoy Limited and Centrifuge to create Anemoy’s Liquid Treasury Fund (LTF), a fund based on on-chain technology that will give investors direct access to short-term U.S. Treasury bills.
“It’s not necessarily a threat to the ETF industry,” Nick Cherney, head of innovation at Janus Henderson, told CNBC’s “ETF Edge” this week. “I think it’s more about us trying to be more efficient and effective in delivering investment services to our clients. The natural evolution of costs.”
“We want to seize this opportunity as early as possible,” he said.
This is Janus HendersonThe company’s first tokenized fund, according to the company’s press release.
Cherney noted that it will have all the traditional characteristics of an ETF. But investors can buy and sell it on a blockchain-based platform, and ultimately investors can enjoy “instant 24/7 trading, instant settlement, and full transparency of fund holdings, even beyond what ETFs offer.”
He acknowledged it could irreversibly change the way some people do business.
“I think there are definitely people in the ecosystem who are potentially threatened, but you're going to see these actors involved,” Cherny added.
“24/7 trading makes me nervous”
Todd Sohn of Strategas Securities is concerned about the risks associated with continued trading availability.
“24/7 trading makes me nervous. At this point, I'd like to be more careful depending on who uses it,” said the firm's ETF and technology strategist.