Reported 11 months ago
On June 26, 2024, Taiwan's first 'Fallen Angel' bond strategy fund was listed. Investors can expect prices of these investment-grade bonds to fall but potentially recover within two years, providing better returns and Sharpe ratios than investment-grade bonds, BB-rated bonds, and non-investment-grade bonds. The fund offers a unique opportunity for active investors with strict fundamental analysis to capitalize on companies' credit ratings not continuing to deteriorate. Past statistics show that bonds downgraded from investment-grade to BB+ typically see a significant increase in credit spreads, providing higher annual returns and Sharpe ratios than other bond categories. The fund also focuses on selecting bonds to avoid defaults and may invest in emerging markets. The rise of AI may present opportunities for fallen angels in industries like customer service centers, but only a few companies have been downgraded due to AI's emergence so far.
Source: YAHOO