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The Consistency of Fallen Angel High Yield Bond Returns By William Sokol, Senior ETF Product Manager After essentially completing a market cycle in just three quarters in 2020, high yield spreads are back below historical averages and yields are as low as they’ve ever been. High yield investors may be asking what might drive performance going forward, and how to navigate an environment characterized by both tight spreads and higher corporate leverage, as well as continued low rates in the face of higher economic growth. We believe that in this uncertain environment, high yield investors should be selective and focus on fallen angel bonds which are bonds originally issued with investment grade ratings as a potential source of outperformance relative to the broad high yield bond market. Fallen angels have provided outperformance in 13 of the last 17 calendar years, a level of consistency that we believe may be attractive in a changing market environment such as the one we are curre

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