# Fallen Angel

*Markets & Instruments — Finicade finance glossary*

A fallen angel is a bond downgraded from investment grade to high yield. The downgrade forces index funds and constrained institutions to sell into a market of buyers who know they must, so prices often overshoot downward — which is why fallen-angel strategies have historically outperformed bonds issued as junk in the first place. The mirror image is a rising star, upgraded into investment grade and bought by the same mechanical flows.

**Also known as:** fallen angel bond, downgraded bond

**Related terms:** [Investment Grade](https://finicade.com/glossary/investment-grade), [Credit Rating](https://finicade.com/glossary/credit-rating), [High-Yield Bond](https://finicade.com/glossary/high-yield-bond), [Credit Spread](https://finicade.com/glossary/credit-spread), [Corporate Bond](https://finicade.com/glossary/corporate-bond)

Source: https://finicade.com/glossary/fallen-angel