Fallen Angels

Fallen Angels are what we call a formerly quality corporation with investment grade bonds, whose bonds have turned to a junk rating.

There's a Market Vectors Bond ETF out to specifically take advantage of this tendency (ANGL).

“The ‘reduce exposure’ mentality reverses very quickly after the average issuer falls into the high-yield universe. Specifically, we see positioning stability begin to emerge about one week after the downgrade, and within two weeks we begin to see more client buys than sells,”

The cluster of recently fallen angels is one reason why the energy bounce trade was viable.

It's something worth noting for the next group panic.

Trade 'em well!