Investors looking for added income in the bond market — without taking on significantly more risk — will often venture to corporate debt. That search can also include high-yield fare, particularly at times when the broader economy is solid and default rates are low.
VanEck Fallen Angel High Yield Bond ETF targets junk bonds that were originally investment grade, aiming for superior risk-adjusted returns. ANGL has outperformed most high-yield bond ETFs since 2017, closely matching HYDB, but FALN has delivered marginally better returns since 2016. The portfolio is concentrated, with the top 10 issuers comprising 49.1% of assets and significant exposure to Nissan and Celanese.
Today's market environment is pushing investors to look beyond traditional fixed income for higher yield. VanEck's income-focused ETFs provide access across asset classes.
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This company is designed to provide investors with an opportunity to gain exposure to below investment-grade corporate bonds, which, importantly, were rated as investment grade at the time of their issuance. It aims to replicate the performance of its benchmark index by investing at least 80% of its assets in the bonds that make up the index. These bonds are characterized by their denominations in U.S. dollars, providing a focused investment platform for those looking to invest in the corporate bond market with specific credit rating dynamics. The fund's strategy highlights a targeted approach towards bonds that may offer higher yields compared to investment-grade bonds, reflecting a unique risk-reward ratio for investors.
The fund offers focused investment products and services centered around corporate bonds that have shifted from investment grade to below investment grade: