Fallen Angels: Accepting Reservations for the Last Free Lunch
True Structural Alpha
Fallen angels’ transition from investment grade to high yield is not a smooth one. Selloffs by investment grade managers and slow absorption into the high yield market lead to artificially depressed prices. We view this phenomenon as a feature, not a bug. The supply/demand imbalance provides a rare opportunity to earn true structural alpha.
In our view, an asset class that offers the prospect of capturing a structural risk premium is a compelling opportunity. Our Efficient Beta Plus Fallen Angels strategy is, to our knowledge, the only alpha-seeking institutional strategy dedicated to fallen angel bonds. We believe that our deep understanding of market mechanisms, demonstrated ability to minimize trading costs, and systematic process can capture fallen angels’ full return potential.
Mellon Webex Series: Fallen Angels: The Asset Class of 2020
Paul Benson, Head of Fixed income Efficient Beta, and Manuel Hayes, Senior Portfolio Manager, discuss the favorable conditions for fallen angels. A growing opportunity set, attractive historical valuations, and Federal Reserve support suggest that now is the time for a fallen angels allocation.
The Party is Just Getting Started
In our view, current dynamics indicate that good cheer is building around fallen angels.
Fallen Angels: No Time Like the Present
2020 is likely to be an auspicious entry point for a fallen angels allocation.
Credit portfolio trading is an established trading protocol that has resulted in significant cost savings.
Today's credit markets offer cheaper, more liquid access to those who know where to look.