Van Eck has launched the Market Vectors Fallen Angel High Yield Bond ETF (ANGL), which seeks to replicate the price and yield performance of The BofA Merrill Lynch US Fallen Angel High Yield Index (H0FA).
The Index is comprised of below investment grade corporate bonds denominated in US dollars, issued in the US domestic market and that were rated investment grade at the time of issuance.
Fallen Angels are corporate bonds that were rated investment grade when issued but have since been downgraded to high yield. Fallen Angel issuers tend to have better debt profiles and greater financing flexibility than original issue high yield issuers, while historically, Fallen Angel high yield corporate bonds have performed better with similar risk as other high yield corporate bonds.
The new fund, which has a gross expense ratio of 0.52% and a net expense ration of 0.40% which trade on the NYSE Arca.