Industry Voice: Fallen angels - unlocking price recovery potential

Fallen angels are a sweet spot in fixed income that merit a strategic high-yield allocation. Lombard Odier Investment Managers' active approach optimises value by avoiding falling knives.

clock • 1 min read
Industry Voice: Fallen angels - unlocking price recovery potential

How could fallen angels bonds represent a sweet spot for fixed income investors?

• Their downgrade to high yield causes price dislocations that open strong risk-adjusted return opportunities

• The supply outlook is favourable

Our active management approach capitalises on a bond's fall from investment grade to lock in these price dislocations; only an active approach can distinguish fallen angels from the falling knives that risk further credit deterioration.

In fact, the data on fallen angels are so compelling that we believe high-yield investors should consider a strategic allocation to the segment.

 

 

This post is funded by Lombard OdierAdvertisement Investment Managers

More on Investment

Partner Insight: Private markets myth-busting - Valuing private businesses

Partner Insight: Private markets myth-busting - Valuing private businesses

While private equity holdings are not valued in the same way as public companies, there are several different ways to arrive at an accurate valuation picture. James Lowe talks to Citywire Wealth Manager about the different approaches.

James Lowe, Director, Private Markets, UK Wealth at Schroders
clock 05 November 2024 • 3 min read
Partner Insight:  It's time to lock in these yields… while you still can

Partner Insight: It's time to lock in these yields… while you still can

Ben Deane, Investment Director, Sterling Investment Grade, Fidelity International
clock 05 November 2024 • 6 min read
Partner Insight: Economic payoff of AI is coming – but it's not here yet

Partner Insight: Economic payoff of AI is coming – but it's not here yet

Despite the long-term potential of artificial intelligence (AI), it will be many years before it realises its full potential.

Joe Davis, Chief Economist and Head of Investment Strategy Group, Vanguard
clock 04 November 2024 • 8 min read
Trustpilot