The following risks may be materially relevant but may not always be adequately captured by the summary risk indicator and may cause additional loss: Credit risk, Liquidity risk and Concentration risk.

Fallen Angels Recovery

rethink high yield investment.


Our Fallen Angels Recovery strategy offers investors attractive risk-adjusted return potential from high yield investing, throughout market cycles. We do this by taking a global, research-driven, and importantly an active approach.


By investing in fallen angels, namely bond issuances which are downgraded from Investment Grade ("IG") to High Yield ("HY"), we believe these can offer a more favourable risk/return profile than standard HY bonds– both during market recoveries and in more benign markets.

90% of the strategy’s universe is rated BB, which we believe to be a credit sweet spot for value. When downgraded, fallen angels tend to offer higher spreads than BB rated peers due to forced selling pressure.

Much of a fallen angel’s value is influenced by this selling pressure as a bond’s downgrade nears, accelerating when that date hits, but often recovering within a two-year period. It is typically these market overreactions that we seek to exploit, looking to deliver convex high-yield exposure.

In economic slowdowns, such as that potentially expected in the coming months, downgrades can be more frequent, leading to increased fallen-angels supply and creating more investment opportunities for our experienced credit analysts to uncover.

why invest?


Through active credit management, our focus is on exploiting the ‘valuation over-reaction’ of bonds on their way to being downgraded to HY.

By identifying and exploiting inefficiencies at issuer and issue level through systematic top-down Lombard Odier Investment Management (LOIM) research, we seek to unearth these opportunities.

Further supported by bottom-up contribution by credit analysts to enhance returns, we then look to avoid so-called ‘falling knives’ and reduce credit risk.

investment team.


Ashton Parker
Lead Portfolio Manager
Head of Credit Research

locomauthorsam-collet (LOcom_AuthorsAM-Collet) Jérôme Collet
Senior Portfolio Manager 
Head of Beta Management


Anando Maitra
Portfolio Manager 
Head of Systematic Research


Denise Yung
Portfolio Manager
Crossover Credit

more about our funds.

LO Funds - Fallen Angels Recovery

Asset Class Fixed Income
Strategy Global Fixed Income
Category -
Share class name ISIN Currency Date NAV
Past performance is not a guarantee of future results. If the funds are denominated in a currency other than that in which the majority of the investor's assets are held, the investor should be aware that changes in rates of exchange may affect the value of the funds' underlying assets. The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk.

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Clear all
Fallen angels radar: busy quarter for new entrants
investment viewpoints Institutional
investment viewpoints Institutional Fallen Angels Wholesale

Fallen angels radar: busy quarter for new entrants

Which corporate bonds were downgraded to high yield last quarter? Fallen angels radar monitors entrants to the universe and explains rating trends.

Fallen angels radar: positive 2024 supply dynamics
investment viewpoints Institutional
investment viewpoints Institutional Fallen Angels Wholesale

Fallen angels radar: positive 2024 supply dynamics

Fallen angels radar is LOIM’s new quarterly tracking which corporate bond issuers have lost their investment grade rating and the trends we see playing out.

Webinar | Fallen Angels: unlocking price recovery potential
investment viewpoints Institutional
investment viewpoints Institutional Fallen Angels Wholesale

Webinar | Fallen angels: unlocking price recovery potential

Fallen angels webinar: unlocking price recovery potential

Fallen angels: spreading their wings
investment viewpoints Asset Management
investment viewpoints Asset Management Fixed Income Investment strategies Fallen Angels DC DB Banks Wholesale Official institutions Third party asset managers Geronne Independants Institutional Consultants Insurance Fund of funds Endowments

Fallen angels: spreading their wings

Fallen angels bonds benefit from a variety of debt market dislocations and key performance drivers. What are the characteristics of this sweet spot in credit?

Actively exploiting potential in fallen angels
investment viewpoints Wholesale
investment viewpoints Wholesale Fallen Angels Institutional

Actively exploiting potential in fallen angels

When investing in fallen angel bonds, being active is key to help avoid falling knives. Case studies from Ford and Adler show our approach in action. 

Why are fallen angels the pick of high yield?
investment viewpoints Institutional
investment viewpoints Institutional Fallen Angels Wholesale

Why are fallen angels the pick of high yield?

Fallen angels can improve a high-yield allocation. We explore how these bonds can be used to add convexity, and enhance ratings and risk-adjusted returns.

Fallen angels: beyond the downgrade
investment viewpoints Institutional
investment viewpoints Institutional Fallen Angels Wholesale

Fallen angels: beyond the downgrade

Fallen angels are a sweet spot in fixed income that merit a strategic high-yield allocation. Our active approach optimises value by avoiding falling knives.

Fallen angels: stronger supply signals opportunity in high yield
investment viewpoints Institutional
investment viewpoints Institutional Consultants DB DC Insurance Official institutions Investment strategies Fixed Income Wholesale Banks Endowments Fund of funds Geronne Independants Third party asset managers Fallen Angels

Fallen angels: stronger supply signals opportunity in high yield

One silver lining in this year’s turbulent fixed-income markets is the likely boost in supply of fallen angels, which presents an opportunity for savvy high-yield investors.

important information.

Lombard Odier Funds (hereinafter the “Fund”) is a Luxembourg investment company with variable capital (SICAV). The Fund is authorised and regulated by the Luxembourg Supervisory Authority of the Financial Sector (CSSF) as an Undertaking for Collective Investments in Transferable Securities UCITS under Part I of the Luxembourg law of the 17 December 2010 implementing the European directive 2009/65/EC, as amended (“UCITS Directive”). This marketing document relates to “LO Funds – Fallen Angels Recovery,” a Sub-Fund of Lombard Odier Funds (hereinafter the “Sub-Fund”). The Management Company of the Fund is Lombard Odier Funds (Europe) S.A. (hereinafter the “Management 
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The Sub-Fund is not appropriate for Belgian retail investors unless the investment subscription is more than EUR 250,000. Please contact your tax advisor to identify the iBelgian tax “TOB” (“Taxe sur les Operations Boursières”) on your transactions, as well as the impacts of the withholding tax (“Précomptes mobiliers”). Lombard Odier has an internal Complaints Management Service. You can lodge a claim via your Relationship Manager or directly to Lombard Odier (Europe) S.A. Luxembourg, Belgium Branch, Claim Management Service, Avenue Louise 81, Box 12, 1050 Brussels, Fax: (+32) 2 543 08. Alternatively you can address your complaint free of charge to the national complaint service in Belgium, OMBUDSMAN: North Gate II, Boulevard du Roi Albert II, n°8 Boîte 2 2, 1000 Brussels, Tel: (+32) 2 545 77 70, Fax : (+32) 2 545 77 79, Email: Ombudsman@Ombusfin.be. France – Centralising agent: CACEIS Bank. Germany – German Information and Paying agent: DekaBank Deutsche Girozentrale. 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