etfrc.com
FUND FOCUS SCREENING PORTFOLIO BUILDER FUND OVERLAP

Chart Of The Day: Fallen Angles

Noting strong demand for bond ETFs since the start of this year, yesterday we presented the yield curve for major investment grade corporate bond funds, illustrating the size of trade-offs involved between reaching for yield and accepting longer durations. Today we present the same chart but with major high yield, or "junk" bond funds holding debt from corporate issuers. 

Unlike with Investment Grade Corporates or Treasuries, there are no long-duration funds available in the high yield space, since few investors are willing to extend credit to questionable companies for that length of time. The longest duration fund we cover is the VanEck Vectors Fallen Angel High Yield Bond ETF (ANGL).  

ANGL has a duration of 6.2 years, but this fund is a portfolio of bonds that were originally issued as Investment Grade, and subsequently fell into Junk territory. Importantly, however, these "Angels" still enjoy a higher average credit profile than comparable funds. The median credit rating for ANGL is Ba2, two notches higher than the SPDR Bloomberg Barclays High Yield Bond ETF (JNK), at B1.

This explains why despite its longer duration ANGL still offers a lower yield to maturity than JNK. Nonetheless, the market has viewed these favorably in recent years, with ANGL broadly outperforming JNK since inception in 2012 (see chart below).

More more analysis of ANGL visit its Fund Focus page.  

 

Image
February 4, 2020
Feb. 2020 Sector SPDR Analyzer
The ETF Analyzer, Sector SPDR Edition for February 2020 is ready for download. This monthly publication has succinct one-page reports on each of the 11 Select Sector SPDR ETFs in three…
Read more...
Image
January 16, 2020
Evaluating Factor ETFs
Our new Factor Scorecard helps investors evaluate and compare competing ETFs
Read more...
ETF Research Center

ETF Research Center has a complete set of tools to help investors and their advisors quickly find, analyze and compare ETFs that meet their unique investment criteria, and even build all-ETF portfolios!

Join FREE today!
AltaVista Research
P.O. Box 398256, Miami Beach FL 33239
Copyright 2020. All rights reserved.
Twitter LinkedIn
Change your subscription    |    View online