“Strong absolute returns and significant outperformance relative to broad high yield strategies have historically followed periods of increased fallen angel volume because a fallen angel strategy buys oversold bonds and goes overweight sectors where fundamentals have bottomed out. Ironically, the Latin term lucifer (light-bearer) was first applied to Jesus in. Eternal fire is prepared for the devil and the fallen angels (Mt 25:41). Peter is called Satan when he refuses to judge by God’s standards (Mt 16:23).

“For fallen angel investors, the combination of a significant increase in volume and lower bond prices may present an extremely attractive opportunity,” according to VanEck. The synoptic Gospels call Jesus’ tempter the devil or Satan (Mt 4:1, Mk 1:13, and Lk 4:2). Additionally, the groups’ higher average credit quality can help diminish market volatility. Looking ahead sector themes can help support potential price appreciation. “This includes the approximately $60 billion that occurred in the last week of March alone but has not yet entered the index.”įallen angel bonds offer a potential value play as the debt securities typically experience a steep sell-off from institutional forced selling prior to being added to the fallen angels’ group. Alexandre Cabanel : Fallen Angel (1847) Canvas Gallery Wrapped Giclee Wall Art Print (D4060) VNTGArtGallery. “With the significant but still unknown impact to growth from the pandemic, as well as the potentially prolonged effect on the energy sector from the Saudi/Russia oil price war, our base case is for $250 to $300 billion of fallen angel volume this year measured at current market value, which is $300 to $360 billion in terms of paramount,” according to VanEck. The $1.5 billion ANGL currently holds 221 fallen angels and it’s possible that number will increase as more bonds leave the investment-grade territory. This already puts 2020 nearly on par with 2005 as the highest calendar year ever for fallen angel volume.” So Many Fallen ANGLs And they said to one another: Come, let us choose. 6.2 And the Angels, the sons of Heaven, saw them and desired them. 6.1 And it came to pass, when the sons of men had increased, that in those days there were born to them fair and beautiful daughters. Rating agencies have already started to act, resulting in approximately $90 billion of index eligible fallen angels year to date. The Fallen Angels began interbreeding and/or genetically modifying the local inhabitants. “However, systemic risk has increased significantly in recent weeks and a broader wave of downgrades now appears inevitable. “We had expected an uptick in fallen angel high yield bond volume compared to the trickle of recent years, driven by company-specific credit events from within the outsized BBB rated universe,” said VanEck in a recent note. dollars that were rated investment grade at the time of issuance.ĪNGL essentially focuses on debt that has fallen out of investment-grade favor and is now repurposed for high yield returns with the downgraded-to-junk status. The index is comprised of below investment grade corporate bonds denominated in U.S. ANGL seeks to replicate as closely as possible the price and yield performance of the ICE BofAML US Fallen Angel High Yield Index.

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