Sometimes, it pays to dabble in something that's just a little bad in the bond market.
Companies that were once investment-grade rated and have since plunged into junk territory are offering some of the best returns in U.S. credit markets. So-called fallen angel securities have gained about 8 percent in the past 12 months, and 3 percent in 2015 alone, according to Bank of America Merrill Lynch index data.
The securities beat the overall U.S. corporate-bond market by 2.4 percentage points in the last year. When broken out by ratings, fallen angels bested both investment-grade and high-yield notes.
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