Tabula Global High Yield Fallen Angels Paris-aligned Climate UCITS ETF Acc
| Issuer: Janus Henderson |
| Asset Class: Fixed Income |
| TER: 50bps |
| Trading Currency: USD |
| Pays Income: False |
| Listing Date: 26 Jun 2023 |
| Ticker: THFA |
| ISIN: IE000JL9SV51 |
This actively managed fund focuses on a unique segment of the fixed income market known as "fallen angels." These are corporate bonds that were originally issued with an investment-grade credit rating but have since been downgraded to high-yield, or "junk," status. The core investment thesis rests on the idea that these downgrades often trigger forced selling by institutional investors who are restricted from holding non-investment-grade debt. This indiscriminate selling can push the bond prices below their intrinsic value, creating a potential opportunity for investors who can look past the short-term downgrade and focus on the company's long-term recovery prospects.
The portfolio managers employ a research-intensive, bottom-up approach to security selection. They don't simply buy all fallen angels; instead, they conduct rigorous credit analysis to identify issuers with resilient business models, manageable debt levels, and a credible path back toward financial stability. The strategy seeks to capture the "fallen angel premium," which consists of both attractive income from higher yields and the potential for significant capital appreciation if the bond's price recovers or the issuer is eventually upgraded back to investment grade. By investing globally, the fund diversifies its holdings across various industries and geographic regions, aiming to reduce concentration risk.
This strategy is designed for investors seeking to enhance their returns within a fixed-income portfolio and who have a higher tolerance for risk. It offers a distinct source of potential alpha compared to traditional high-yield strategies by targeting a specific market inefficiency. The focus on recovery stories provides a different return driver than simply collecting yield from the broad junk bond market, making it a potentially valuable component for diversifying credit exposure.
