Analyst’s Curious Bet on Fallen Angels ETF: A Tale of Credit Ratings and Coupon Clipping 📉

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There’s something perversely delightful about watching grown adults anthropomorphize bonds. I once overheard my cousin describe a high-yield corporate note as “that little tramp who cleaned up nicely” after its issuer defaulted. So when Gimbal Financial scooped up $8.44 million of iShares Fallen Angels USD Bond ETF (FALN) on November 4th, 2025, I couldn’t help but imagine portfolio managers in Savile Row suits, sipping gin martinis and murmuring, “Poor dear, downgraded last quarter. Let’s give it a second chance – and a 6.24% dividend while we’re at it.”

What Happened

Gimbal Financial, bless their contrarian hearts, decided to collect some financial detritus this autumn. Their 13F filing revealed a new 303,893-share position in FALN – bonds so déclassé they’d make a bankruptcy lawyer blush. These are the Wall Street equivalent of thrift store tuxedos: once investment-grade, now reclassified as high-yield “fallen angels” after their issuers tripped the credit equivalent of a fire alarm.

What Else to Know

This isn’t mere dumpster diving. Five percent of Gimbal’s portfolio now rests on betting that discarded corporate debt will regain its dignity. I suppose there’s poetry in that – like adopting shelter cats and teaching them to fetch. Their top holdings read like a Dow Jones of Whimsy: IVV at 15.9%, ICLN at 10.6%, and so on. Meanwhile, FALN itself limps along with a 9.07% annual return, trailing the S&P 500 like a toddler in a marathon.

Metric Value
Price (as of market close Nov. 3, 2025) $27.34
Dividend yield 6.24%
1-year total return 9.07%

ETF Snapshot

FALN specializes in bonds that got caught shoplifting their credit ratings. These “fallen angels” are corporate IOUs downgraded from investment-grade to junk status – think of them as the financial version of a prom queen working the night shift at a 7-Eleven. The fund buys their debt cheap, collects fat interest payments, and hopes the companies either recover or at least don’t explode entirely.

My grandmother would’ve called this “investing with catastrophe insurance.” At least 80% of assets track an index of these credit casualties, which feels less like portfolio management and more like organizing a support group for financially irresponsible corporations.

Foolish Take

I’ll admit skepticism. Betting on fallen angels sounds like joining a cult that worships fallen celebrities – sure, Charlie Sheen pays dividends, but will he show up to the reunion? Yet FALN’s 37% three-year return (11% CAGR) makes one reconsider. That beats the iBoxx High Yield ETF’s 32% return like a yard sale painting outperforms a Renaissance masterpiece.

Perhaps there’s wisdom in Gimbal’s gamble. After all, my Aunt Phyllis once bought a foreclosure for $20k, discovered a Picasso in the basement, and now lives in a Monaco penthouse texting me things like, “Darling, you should really diversify into distressed assets.” Then again, she also thinks “ETF” stands for “Estate Tax Fortress.”

Glossary

ETF: A financial piñata that spills dividends instead of candy.

Fallen Angels: Bonds that traded their halos for a Harley and a pack of cigarettes.

High Yield Bonds: The financial world’s equivalent of a tattoo parlor next to a casino.

Investment Grade: Credit ratings so pristine they’d judge your Netflix habits.

Credit Rating Downgrade: Wall Street’s version of getting caught with a fake ID.

Disclosure: The author owns 0.0001% of FALN, which they obtained by redeeming rebates from a cereal box. Results may vary.📉

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2025-11-05 02:13