ETFdb Logo
  • ETF Database
  • Channels
    • Themes
      • Active ETF
      • Alternatives Channel
      • Artificial Intelligence
      • China Insights
      • Climate Insights
      • Core Strategies
      • Crypto
      • Disruptive Technology
      • Energy Infrastructure
      • ETF Building Blocks
      • ETF Education
      • ETF Investing
      • ETF Strategist
      • Faith-Based Investing
      • Financial Literacy
      • Fixed Income
      • Free Cash Flow
      • Innovative ETFs
      • Invest Beyond Cash
      • Leveraged & Inverse
      • Modern Alpha
      • Portfolio Strategies
      • Tax Efficient Income
    • Asset Class
      • Equity
        • U.S. Equity
        • Int'l Developed
        • Emerging Market Equities
      • Alternatives
        • Gold/Silver/Critical Materials
        • Crypytocurrency
        • Currency
        • Volatility
      • Fixed Income
        • Investment Grade Corporates
        • US Treasuries & TIPS
        • High Yield Corporates
        • Int'l Fixed Income
    • ETF Ecosystem
    • ETFs in Canada
    • Market Outlook
    • Crypto ETF Hub
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Database Categories
    • Indexes
    • Scenario Analysis
    • Watchlists
    • Head-To-Head ETF Comparison Tool
    • Mutual Fund To ETF Converter
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • Gaining Perspective Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Beyond Basic Beta Channel
  2. ANGL Sensible Avenue for Junk Bonds Exposure
Beyond Basic Beta Channel
Share

ANGL Sensible Avenue for Junk Bonds Exposure

Tom LydonSep 26, 2023
2023-09-26

High-yield corporate debt, also known as junk bonds, represent a significant chunk of the broader fixed income market. That heft is reflected in the population of ETFs offering exposure to this asset class.

On that note, investors that are new to the junk bond space should commit to a small amount of homework. They will realize that there are important differences among junk bond ETFs. The VanEck Fallen Angel High Yield Bond ETF (ANGL A-) is a case study in that scenario.

The reasoning is simple. Fallen angels – the asset class on which ANGL focuses – aren’t standard junk bonds. Rather, fallen angels are corporate bonds born in investment-grade territory that are latter downgraded to junk. That’s an important differentiating fact between ANGL holdings and standard high-yield corporate debt.

How ANGL Sets Itself Apart

Alone, the aforementioned difference between ANGL components and traditional junk bonds is likely to catch the eye. Of course, those market participants are likely to and should wonder how that characteristic affects performance.

“The price return of fallen angels has been a key differentiator versus broad HY from a total return perspective, driven by the systematic purchases of oversold/undervalued bonds that have been downgraded to high yield and have tended to recover in the months after being downgraded,” noted VanEck product manager Nicolas Fonseca.

Superior price action among fallen angels isn’t linear; it’s not guaranteed to repeat every year. For example, ANGL is slightly trailing one of the largest junk bond ETFs on a year-to-date basis. However, over the past three years — a period including one of the most intense stretches of Federal Reserve rate tightening in recent memory — the VanEck ETF beat both of the two largest high-yield bond ETFs by margins of better than 2-to-1. ANGL achieved that impressive feat with annualized volatility that was on par with its rivals, confirming better risk-adjusted returns.

ANGL could also be pertinent to fixed income over the near- to medium-term because, while fallen angel supply has been tight over the past several years, signs are emerging that could soon change. Historical data indicate that fallen angels often experienced upticks in performance as new bonds enter the market.

“While it’s impossible to predict the exact timing, given these broader dynamics, it’s difficult to envision a scenario where downgrades do not increase. Historically, fallen angel price returns have been at their strongest, and their outperformance against the broader high-yield market has been most pronounced when a significant number of downgraded bonds, typically deeply discounted, enter the market,” concluded Fonseca.

For more news, information, and analysis, visit the Beyond Basic Beta Channel.


Content continues below advertisement

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2025 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X