VanEck marks fifth anniversary of fallen angel bond ETF

Apr 10th, 2017 | By | Category: Fixed Income

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VanEck is celebrating the fifth anniversary of the launch of the VanEck Vectors Fallen Angel High Yield Bond ETF (ANGL) which recently passed $750 million in assets under management.

VanEck marks fifth anniversary of fallen angel bond ETF

‘Fallen angels’ are bonds that were rated as investment grade at the time of their original issuance, but which have since lost their investment-grade status.

ANGL was the first ETF to provide targeted exposure to “fallen angels,” a category of high yield bonds that were originally issued as investment grade but which have since experienced a downgrade to junk status.

Original-issue high yield bonds tend to offer relatively higher income and lower duration than fallen angels. These differences in bond characteristics as well as the overly negative sentiment surrounding a downgrade into junk status, causes fallen angels to be regularly oversold prior to their downgrade. In this way, the fund seeks to provide investors with a value proposition.

The fallen angels category has outperformed the broad high yield space in ten of the last 13 years, including 2016, where it returned 25.3%.

“We’re proud to be celebrating ANGL’s five year anniversary,” said Ed Lopez, head of ETF product management and marketing with VanEck. “The investment thesis behind ANGL is a time-tested strategy, well beyond the ETF’s five year history. ANGL’s simple and intuitive approach to capturing quality and value in the high yield market helps it stand out in a growing sea of smart beta ETFs.”

In June 2016, VanEck lowered the fees on ANGL from 0.40% to 0.35%.

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