Blockchain technology and tokenization could 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 technology-based on-chain fund that will give investors direct access to short-term U.S. Treasury bills.
“It doesn't necessarily pose a threat to the ETF industry,” Nick Cherney, head of innovation at Janus Henderson, said on CNBC's “ETF Edge” this week. “I think it’s more of a natural evolution of us trying to make the way we deliver investment services to our clients more efficient and cost-effective.”
“We want to take advantage of this opportunity early,” he said.
That is Janus Hendersonis the first tokenized fund, according to a company press release.
Cherney points out that it would have all the traditional features of an ETF. But investors would be able to buy and sell it on a blockchain-based platform – with the end investor able to enjoy “24/7 instant trading, instant settlement, complete transparency on fund holdings, so even more than what ETFs offer.”
He acknowledged that for some it could irrevocably change the way business is done.
“I think there are certainly people in the ecosystem for whom it is a potential threat, but you can see that these players are engaged,” Cherney added.
“Trading around the clock makes me nervous”
Todd Sohn of Strategas Securities is concerned about the risks associated with constant trading availability.
“Trading around the clock makes me nervous. That's the part where I want to be a little cautious depending on who's using it,” said the firm's ETF and technical strategist.