As a result, the ETF’s energy exposure has increased in recent months as more energy companies that sold investment-grade debt have seen those bonds downgraded. However, in the case of ANGL, that does not mean the ETF is loaded with heavily distressed or near default issues.
“Fran Rodilosso, senior investment officer for Market Vectors’ fixed income ETFs, says its energy mix is different than other junk bond funds. ANGL tends to own higher rated junk bond issues, such as from midstream master limited partnerships. It doesn’t own distressed exploration and production names, he says,” reports Amey Stone for Barron’s.
Fallen angel issuers tend to be larger and more established than many other junk bond issuers. Furthermore, since these fallen angels were formerly on the cusp of investment-grade status, this group of junk bonds typically has a higher average credit quality than many other speculative-grade debt-related funds.
Market Vectors Fallen Angel High Yield Bond ETF
