The Fallen-Angel ETF That's Flying High

The video discusses the concept of fallen angels, which are corporate bonds that were once investment grade but have been downgraded to high yield. The demand for fallen angel ETFs has surged, particularly for funds like Black Rock's and Van Excellent's, as part of a broader market rotation. When bonds are downgraded to junk status, they often experience mechanical selling but tend to outperform in subsequent months. The video highlights Carnival Corporation as a significant holding in these funds, benefiting from the market's return to normalcy.

What are 'fallen angels' in the context of corporate bonds?

• Bonds that were investment grade but are now high yield

• Bonds that have defaulted

• Bonds that have been upgraded to investment grade

• Bonds issued by angel investors

Which fund has seen its size double over the past two weeks?

• Van Excellent Angel

• Black Rock Fallen Angel Fund

• Carnival Corporation Fund

• High Yield Bond Fund

What is the 'rotation trade' mentioned in the context of fallen angel ETFs?

• A trade involving currency exchange

• A shift in investment focus from one sector to another

• A strategy involving frequent buying and selling of stocks

• A method of rotating bonds within a portfolio

What typically happens to a bond when it is downgraded to junk status?

• It is automatically upgraded to investment grade

• It becomes tax-exempt

• It experiences mechanical selling and is removed from investment grade benchmarks

• It is immediately sold at a premium

Which company is the largest holding in the Black Rock Fallen Angel Fund after its downgrade?

• Disney Cruise Line

• Carnival Corporation

• Norwegian Cruise Line

• Royal Caribbean