VanEck's Fallen Angel ETF offers 6% yield by buying downgraded investment-grade bonds, avoiding riskier junk debt.
The VanEck Fallen Angel High Yield Bond ETF (ANGL) invests in bonds that were once investment-grade but have been downgraded to high yield, offering about 6% income while avoiding the riskiest CCC-rated junk bonds. This strategy targets companies with solid fundamentals but temporary setbacks, like Nissan and Paramount Global, providing a quality tilt in the junk bond market. ANGL pays monthly income and has shown respectable total returns over the past decade, outperforming broad junk bond funds during market stress. However, investors should be aware of credit risk, concentration in a few issuers, and current tight credit spreads, making it suitable for those seeking higher income with moderate risk in a diversified portfolio.
The VanEck Fallen Angel High Yield Bond ETF (ANGL) invests in bonds that were once investment-grade but have been downgraded to high yield, offering about 6% income while avoiding the riskiest CCC-rated junk bonds. This strategy targets companies with solid fundamentals but temporary setbacks, like Nissan and Paramount Global, providing a quality tilt in the junk bond market. ANGL pays monthly income and has shown respectable total returns over the past decade, outperforming broad junk bond funds during market stress. However, investors should be aware of credit risk, concentration in a few issuers, and current tight credit spreads, making it suitable for those seeking higher income with moderate risk in a diversified portfolio.
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