Ed Lopez, Managing Director, VanEck met with Julie Cooling, Founder & CEO, RIA Channel to discuss their high yield bond ETF strategies.
Since being founded in 1955, VanEck has prided itself on identifying trends early. This can be seen by their success in the gold market in 1968, followed by emerging markets in 1993, and finally ETFs in 2006.
Headquartered in New York, the firm manages roughly $49 billion in assets and provides investors with global investment opportunities, both passive and active strategies. As one of the first US asset managers to gain entry to international markets, VanEck has always been committed to identifying key asset classes.
VanEck’s extensive lineup of 56 ETFs provide investors exposure to a wide variety of equity, income, and commodity, and thematic strategies. Some of the firm’s top ETFs by net assets include: Gold Miners ETF (GDX) with $14.9B, Junior Gold Miners ETF (GDXJ) with $5.1B, J.P. Morgan EM Local Currency Bond ETF (EMLC) with $3.6B. One of VanEck’s newest ETFs, Video Gaming and eSports ETF (ESPO), has gained substantial traction in the last last year and holds notable stocks such as Nvidia (NVDA), Nintendo (NTDOF), Tencent (TCTZF), and Sea (SE). In 2018, VanEck collaborated with SolidX Management LLC to offer SolidX Bitcoin Trust 144A Shares (XBTCZ) to institutional investors that manage more than $100M in total assets.
They have also made waves with their highly lucrative Fallen Angel High Yield Bond ETF (ANGL). ANGL has consistently had higher average credit quality and a better risk/reward trade-off than its competitors. With a 5.23% 12-month yield, it has outperformed the broad high yield bond market in 11 of the last 15 years. ANGL, and high yield bonds generally, are captivating fixed-income investors.
To learn more, register for VanEck’s webcast: Downgrades Are Happening: Will Fallen Angels Rise Again?
Fallen angels, or high yield bonds originally issued as investment grade corporate bonds, provide a distinct value proposition that sets them apart from the broad high yield market. Differentiated sector exposure, price appreciation, and a higher quality focus have contributed to long term outperformance compared to the broad high yield bond universe. Market volatility and a sharp slowdown in growth have led to dislocations in the credit market and an increase in ratings downgrades. With the volume of new fallen angels already setting records this year, we believe this segment of the high yield market may present a unique and compelling opportunity for fixed income investors.
Topics will include:
- Performance drivers this year
- The return and credit quality profiles of recent fallen angels
- The outlook for fallen angels for the rest of the year
Ed Lopez serves as the Managing Director and Head of ETF Product for VanEck. He has been with VanEck for the last 11 years, and prior to that Lopez worked for Rydex Investments and Ibbotson Associates. Lopez is responsible for fund development, product management, and the marketing of VanEck Vectors ETFs.