iShares Fallen Angels USD Price, Forecast, Insider, Ratings, Fundamentals & Signals

SPHY and FALN are my top two high-yield corporate bond ETF picks.

On Seeking Alpha, I focus on dividend ETFs targeted towards income investors and retirees. Dividend ETFs focusing on bonds and fixed-income securities have seen significant dividend growth these past two years. Some offer incredibly compelling yields. Of these, five funds stand out. A quick look at these follows.

FALN invests in recently downgraded bonds, known as fallen angels, which have historically outperformed high-yield corporate bond benchmarks. The fund has outperformed since inception and will, I believe, continue to outperform moving forward. I am assigning a buy rating to the fund based on its investment strategy and track record.

High-yield bonds offer higher yields as compensation for higher risks associated with lower credit ratings. The U.S. economy is in a stage between late cycle and recession, but there are signs of recovery in the near future. Understanding how bonds perform in different stages of the business cycle is key to investing in bonds successfully.

Federal Reserve hikes have caused yields to increase across fixed-income asset classes. High-yield bonds and bond funds offer particularly high, growing yields. An overview of four of these funds follows.

The iShares Fallen Angels USD Bond ETF seeks to provide investors with exposure to high yield corporate bonds that were previously rated investment grade. FALN has a reasonable management fee of 0.25% compared to other high yield fixed income ETFs. FALN has a very strong historical performance and has outperformed traditional high yield ETFs such as JNK and HYG on both an absolute and risk-adjusted basis.

iShares Fallen Angels USD Bond ETF invests in high-yield bonds whose issuers previously had an investment grade rating. Since FALN's inception in 2016, it has outperformed all kinds of bond ETFs. An exception in the bond bear market, it is still above its 200-day moving average.

High-yield corporate bond ETFs offer strong, growing dividends, with HYGV, FALN, and SPHY standing out as strong investment opportunities. HYGV provides a particularly strong 8.4% yield, FALN offers a strong performance track-record due to focusing on Fallen Angels, and SPHY has the lowest 0.04% expense ratio. These funds share characteristics such as strong yields and dividend growth, low interest rate risk, and high credit risk, making them suitable for income investors.

FALN and ANGL both invest in fallen angels or recently downgraded non-investment grade corporate bonds. ANGL is the larger, more well-known of the pair, but I think FALN is the stronger investment.

We take another look at FALN - a higher-quality High-Yield corporate bond ETF, having a portfolio yield of 7.6%. FALN has outperformed the broader High Yield corporate bond sector, including all but 1 HY CEFs in 5Y total NAV terms.