In the current market environment, anyone who has avoided exposure to the havoc that is the energy sector is certainly breathing a sigh of relief. Investors in the high-yield bond market that chose “fallen angels” as opposed the broader market are also feeling relieved. Fallen angels corporate bonds are bonds that were investment grade at one point, but have since fallen to below investment grade.
The bonds typically have less exposure to the energy sector than their standard high-yield counterparts, despite the large presence that energy has in the high-yield bond market, which has grown from 8 to 16 percent in 2014.
The two respective categories are tracked by the Bank of America Merrill Lynch US Fallen Angel High Yield Index and the Bank of America Merrill Lynch US High Yield Master II Index. The former is up 7.3 percent year-to-date, while the latter is lagging with a gain of 2.1 percent.
/www.benzinga.com/markets/bonds/14/12/5074361/opportunity-in-junk-bond-etfs alt=Opportunity In Junk Bond ETFs>Full story available on Benzinga.com
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