Blockchain technology and tokenization could challenge the traditional ETF model.
Janus Henderson recently announced its partnership with Anemoy Limited and Centrifuge to create Anemoy’s Liquid Treasury Fund (LTF), an on-chain technology-based fund that will give investors direct access to short-term US Treasuries.
“It’s not necessarily a threat to the ETF industry,” Nick Cherney, chief innovation officer at Janus Henderson, said this week on CNBC’s “ETF Edge.” “I think it’s more of a natural evolution in how we’re trying to make the way we provide investment services to our clients more efficient and less expensive.”
“We want to be at the forefront of this opportunity,” he said.
It is Janus HendersonThis is the first tokenized fund, according to a press release from the company.
Cherney notes that it would have all the traditional characteristics of an ETF. But investors could buy and sell it on a blockchain-based platform – with the end investor exposed to “24/7 instant transactions, instant settlement, full transparency on ownership of funds, therefore even beyond what ETFs offer.
He acknowledged that this could irreversibly change the way business is done for some.
“I think there are certainly people in the ecosystem for whom this is potentially threatening, but you see these players getting involved,” Cherney added.
“Trading 24/7 makes me nervous”
Todd Sohn of Strategas Securities worries about the risks associated with constant commercial availability.
“24/7 trading makes me nervous. It’s the only aspect where I would want to be a little cautious depending on who is using it,” said the firm’s ETF and technical strategist.
