ANGL was the first and remains the largest ETF to focus on the “fallen angel” segment of the high yield bond universe; Fund has built strong long-term track record providing differentiated high yield exposure
VanEck is today celebrating the 10th anniversary of the launch of the VanEck Fallen Angel High Yield Bond ETF (ANGL). The ETF opened access to a previously overlooked corner of the high yield bond marketplace at the time of its launch, and has since grown to more than $4.3 billion in assets under management (as of 4/6/2022).
“Fallen angels” refers to high yield bonds that have been downgraded from investment-grade to junk status. Historically, fallen angels have had higher credit quality and may be better poised for a rebound than other corners of the junk bond marketplace, and VanEck has noted how fallen angels have outperformed the broad high yield bond market in 14 of the last 18 calendar years.1
“We launched ANGL a decade ago in order to provide investors and advisors with a liquid, low-cost solution for accessing the unique value proposition that fallen angels can add to an income-focused portfolio. We’ve been thrilled with how the fund has performed exactly as designed over that timeframe,” said Ed Lopez, Head of Product with VanEck.
ANGL ranks high among both active and index-based high yield bond funds. In the High Yield Bond category, the fund has earned a 5-star Morningstar rating over the past 3- and 5-year periods, as well as overall. 2 The fund is currently delivering a 30-day SEC yield of 4.69% (as of 4/6/2022). (Past performance is not a guarantee of future results. For performance to the most recent month end, please click here.)
“Over the past decade, we’ve experienced periods of rising and falling interest rates, extremely wide and tight credit spreads, and periods of significant credit rating upgrades and downgrades. Fallen angels have historically provided outperformance relative to the broad high yield market through these different market environments due to the unique characteristics of this segment3,” said Fran Rodilosso, Head of Fixed Income ETF Portfolio Management. “We think this consistency makes fallen angels particularly attractive right now given the challenges facing fixed income investors.”
The VanEck team provides regular updates and insights on key issues shaping the discussion around income investing, which can be accessed here.
ANGL is one of the flagship funds in VanEck’s innovative lineup of income-focused ETFs, which includes a full suite of municipal bond ETFs, the first green bond ETF listed in the U.S. (GRNB), as well as ETFs focused on Business Development Companies (BIZD), emerging market local currency bonds (EMLC), floating rate notes (FLTR), and more.
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The principal risks of investing in VanEck Funds include sector, market, economic, political, foreign currency, world event, index tracking, social media analytics, blockchain and non-diversification risks, as well as fluctuations in net asset value and the risks associated with investing in less developed capital markets. The Funds may loan their securities, which may subject them to additional credit and counterparty risk. Funds that invest in high-yield securities are subject to subject to risks associated with investing in high-yield securities; which include a greater risk of loss of income and principal than funds holding higher-rated securities; concentration risk; credit risk; hedging risk; interest rate risk; and short sale risk. Please see the prospectus of each Fund for more complete information regarding each Fund's specific risks.
An investment in VanEck Fallen Angel High Yield Bond ETF (ANGL) may be subject to risk which includes, among others, high yield securities, foreign securities, foreign currency, credit, interest rate, restricted securities, market, operational, call, sampling, basic materials, energy, financial services, telecommunications, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount and liquidity of fund shares and concentration risks, all of which may adversely affect the Fund.
ICE BofAML US High Yield Index (H0A0, “Broad HY Index”), formerly known as BofA Merrill Lynch US High Yield Index prior to 10/23/2017, is comprised of below-investment grade corporate bonds (based on an average of various rating agencies) denominated in U.S. dollars.
ICE US Fallen Angel High Yield 10% Constrained Index (H0CF, Index) is a subset of the ICE BofA US High Yield Index and includes securities that were rated investment grade at time of issuance.
Fallen Angel U.S. High Yield index data on and prior to February 28, 2020 reflects that of the ICE BofA US Fallen Angel High Yield Index (H0FA). From February 28, 2020 forward, the Fallen Angel U.S. High Yield index data reflects that of the Fund's underlying index, the ICE US Fallen Angel High Yield 10% Constrained Index (H0CF). Fallen Angel U.S. High Yield index data history which includes periods prior to February 28, 2020 links H0FA and H0CF and is not intended for third party use.
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Index returns are not Fund returns and do not reflect any management fees or brokerage expenses. Certain indices may take into account withholding taxes. Investors cannot invest directly in the Index. Returns for actual Fund investors may differ from what is shown because of differences in timing, the amount invested and fees and expenses. Index returns assume that dividends have been reinvested.
Investing involves substantial risk and high volatility, including possible loss of principal. Bonds and bond funds will decrease in value as interest rates rise. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contains this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
1 FactSet. Fallen angels represented by the ICE US Fallen Angel High Yield 10% Constrained Index “Index”. Broad high yield represented by the ICE BofA US High Yield Index.
2 Source: Morningstar, Inc. Data as of 3/31/2022. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The peer group chart presents trailing total return percentile rankings against the Morningstar Open End Funds – U.S. – High Yield Bond category, which comprised 705 funds as of 3/31/2022.
Chris Sullivan/Julia Stoll