Question 1: What is a fallen angel bond?
Answer: A fallen angel bond is a bond that was once rated investment-grade but has since been downgraded to junk status.
Question 2: What causes a bond to become a fallen angel?
Answer: Bonds can become fallen angels for a variety of reasons, including economic downturn, industry-specific challenges, and company-specific problems.
Question 3: What are the risks of investing in fallen angels?
Answer: Fallen angels are considered to be riskier than investment-grade bonds because there is a higher chance that the issuer will default on the bond. They also typically have lower liquidity, which means that they may be more difficult to sell if you need to raise cash.
Question 4: What are the potential rewards of investing in fallen angels?
Answer: Fallen angels have the potential for high returns if the issuer is able to improve its financial condition and the bond is upgraded back to investment-grade.
Question 5: Are there any fallen angels in Russia?
Answer: Yes, there are a number of fallen angels in Russia. The Russian economy has been hit hard by the collapse in oil prices and international sanctions, which has led to a number of Russian companies being downgraded to junk status.
Question 6: What should I consider before investing in fallen angels?
Answer: Before investing in fallen angels, you should carefully weigh the risks and rewards involved. You should also consider your own investment goals and risk tolerance.
Summary: Fallen angels can be a source of both risk and reward. Investors who are considering investing in fallen angels should carefully weigh the risks and rewards involved.
Transition: For more information on fallen angels, please see the following resources:
