Tabula Global High Yield Fallen Angels Paris-aligned Climate UCITS ETF GBP-Hedged Dist
| Issuer: Janus Henderson |
| Asset Class: Fixed Income |
| TER: 55bps |
| Trading Currency: GBP |
| Pays Income: False |
| Listing Date: 02 Aug 2023 |
| Ticker: TFGD |
| ISIN: IE000LSFKN16 |
This actively managed fund offers a distinct approach to the high-yield bond market by focusing on 'fallen angels'. These are bonds issued by companies that were once rated as investment-grade but have subsequently been downgraded to high-yield, or 'junk', status. This downgrade event often triggers forced selling by institutional investors who are mandated to hold only investment-grade securities. Such indiscriminate selling can artificially depress the prices of these bonds, creating a potential valuation anomaly for investors who are able to take on the additional credit risk. The strategy is based on the premise that many of these newly downgraded issuers are still fundamentally sound companies with a clear path to improving their credit profile and regaining their investment-grade status.
The fund's active management team employs rigorous credit research to navigate this specific market segment. They aim to identify fallen angel bonds that not only offer attractive yields but also possess the strongest potential for price appreciation. This active selection process allows the managers to be selective, avoiding bonds where the credit deterioration is likely to be permanent and focusing on those with catalysts for a turnaround. The goal is to outperform a broad index of fallen angel bonds by skillfully identifying mispriced opportunities and managing risks within the portfolio. The active approach is crucial for differentiating between temporary setbacks and long-term credit problems within the fallen angel universe.
For investors, this fund represents a potentially attractive source of income and total return within a diversified fixed-income allocation. It seeks to capture both the higher income streams characteristic of high-yield debt and the capital appreciation potential if the bonds are re-rated upwards, becoming 'rising stars'. This strategy may appeal to those with a higher risk tolerance looking for a tactical, alpha-seeking component to complement core bond holdings, capitalizing on market inefficiencies that can arise from credit rating changes.
