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Fallen Angels ETF

Access to Corporate Bonds Downgraded to High Yield

VanEck Fallen Angel ETF allows a diversified access to corporate bonds originally issued as investment grade and then downgraded to high yield. A strategy with a strong track-record offering a contrarian sector exposure and leveraging a potentially oversold market dynamic. Opportunity to choose between the global or the US domestic market.

We Offer a Global and a US Fallen Angels ETF

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    VanEck Global Fallen Angel High Yield Bond UCITS ETF
    • Exposure to global fallen angels bonds
    • Diversification among countries, currencies and sectors
    • Reinvestment of income
    GFA

    ETF Details

    ETF Details

    Basis-Ticker: GFA
    ISIN: IE00BF540Z61
    TER: 0.40%
    AUM: $39.5 M (as of 05-12-2023)
    SFDR Classification: Article 6

    Lower risk

    Higher risk

    Typically lower reward

    Typically higher reward

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    VanEck US Fallen Angel High Yield Bond UCITS ETF
    • Exposure to USD denominated fallen angels issued in the US domestic market
    • Proven outperformance over the broad US high yield spectrum
    • Higher credit quality than regular US high yield bonds
    USFA

    ETF Details

    ETF Details

    Basis-Ticker: USFA
    ISIN: IE000J6CHW80
    TER: 0.35%
    AUM: $5.3 M (as of 05-12-2023)
    SFDR Classification: Article 6

    Lower risk

    Higher risk

    Typically lower reward

    Typically higher reward

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    • Risk of Fallen Angels ETF: You may lose money up to the total loss of your investment due to Emerging Markets Risk and High Yield Securities Risk as described in the Main Risk Factors, KID (GFA/GFU) and prospectus.

    What Makes a Fallen Angels ETF Special?

    Fallen angels, on average, have historically outperformed the broad high yield corporate bonds market.1 Access this outperformance through a Fallen Angels ETF.

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    1 When comparing ICE BofAML Global Fallen Angel High Yield Index and ICE BofAML Global High Yield Index over 3, 5 and 10 year periods. Parameters taken into consideration are credit quality, total return and annualised return. Past performance is not indicative of future results. Data starting at 31 December 2004.

    The Opportunity Offered by Fallen Angels Bonds

    The strategy adopted by a Fallen Angels ETF leverages a contrarian approach: corporate bonds that have just been downgraded to high yield, oftentimes come from sectors undergoing economic turmoil. Examples include the financial services sector in the aftermath of the Global Financial Crisis or the energy sector after the oil price collapse in 2014.


    Investing in fallen angels bonds means exploiting an historically proven market anomaly. Many institutional investors are required to hold only investment grade securities. Accordingly, when the downgrade takes place, an excessive selling pressure might be present, leading to a potential undervaluation. Outperformance may occur, if so called “rising stars” regain investment grade status. Historically, fallen angels have exhibited a stronger tendency to be upgraded again, than the broad US high yield spectrum.

    Global Fallen Angel Universe
    As visible from the following graph the number of global fallen
    Consistent Historical Outperformance
    Fallen Angels consistently outperform the broad High Yield
    Higher Credit Quality
    Fallen Angels present on average a higher credit quality
    Diversification
    The global Fallen Angels portfolio provides investors...

    Main Risk Factors of a Fallen Angels ETF

    • Foreign Currency Risk
    • Emerging Markets Risk
    • High Yield Securities Risk
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    Because all or a portion of a Fallen Angels ETF is being invested in securities denominated in foreign currencies, the Fund’s exposure to foreign currencies and changes in the value of foreign currencies versus the base currency may result in reduced returns for the Fund, and the value of certain foreign currencies may be subject to a high degree of fluctuation. 

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    Investments in emerging market countries are subject to specific risks and securities are generally less liquid and less efficient and securities markets may be less well regulated. Specific risks may be heightened by currency fluctuations and exchange control; imposition of restrictions on the repatriation of funds or other assets; governmental interference; higher inflation; social, economic and political uncertainties. That is one of the key risk factors of a Fallen Angels ETF.

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    The prices of junk bonds are likely to be more sensitive to adverse economic changes or individual issuer developments than higher rated securities possibly leading to junk bond issuers not being able to service their principal and interest payment obligations. The secondary market for securities that are junk bonds may be less liquid than the markets for higher quality securities. This is another risk factor of a Fallen Angels ETF.

    For more information on risks, please see the “Risk Factors” section of the relevant Fund’s prospectus, available on www.vaneck.com.

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