Fallen angels, or high yield bonds originally issued as investment grade corporate bonds, provide a distinct value proposition that sets them apart from the broad high yield market. Differentiated sector exposure, price appreciation, and a higher quality focus have contributed to long term outperformance compared to the broad high yield bond universe.1
Although recent falling interest rates have led some investors to move towards a more conservative fixed income allocation, we believe fallen angels offer an attractive opportunity, particularly as we enter the later stages of the credit cycle.
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Speaker: Fran Rodilosso, Portfolio Manager and Head of Fixed Income ETF Portfolio Management
1Based on historical performance from 12/31/2003 through 12/31/2018 of the ICE BofAML US Fallen Angel High Yield Index and ICE BofAML US High Yield Index
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