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Junk Bond ETF (ANGL) Hits New 52-Week High

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For investors seeking momentum, VanEck Vectors Fallen Angel High Yield Bond ETF (ANGL - Free Report) is probably on radar now. The fund just hit a 52-week high, and is up about 25.5% from its 52-week low price of $23.24 per share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

ANGL in Focus    

This ETF focuses on ‘fallen angel’ bonds, which are high yield securities that were once investment grade but have fallen from grace and are now trading as junk bonds. This unique approach gives the portfolio 237 securities that are widely spread across fallen angels, with none holding more than 1.83% of assets. The fund has an effective duration of 6 years and year to maturity of 9.44. It charges 35 bps in annual fees (see: all the Junk Bond ETFs here).  

Why the Move?

The high yield corner of the bond market has been an area to watch lately given the heightened volatility that is pushing investors to safe havens. In particular, the fallen angel strategy has gained investor attention as the number of fallen angels has increased substantially on a series of debt downgrades among energy and material firms – the top two sectors of the ETF. Additionally, a rebounding oil price is infusing strength into these bonds and the ETF. Further, the fund has undergone a rule change in order to enhance liquidity.

More Gains Ahead?

Currently, ANGL has a Zacks ETF Rank of 3 or ‘Hold’ rating with a High risk outlook, so it is hard to get a handle on its future returns one way or the other. It seems that this fund will remain strong given a highweighted alpha of 14.70% and a low 20-day volatility of 5.05%. As a result, there is still some promise for investors who want to ride on this surging ETF.

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