Peak Financial Advisors' $15 Million Bond Pivot: Is the Fallen Angel Rally Fading?

A Strategic Retreat From Credit Recovery Plays

Peak Financial Advisors just made a bold portfolio move that speaks volumes about where the fund sees opportunity drying up. In Q4, the firm deployed $15.05 million into the JPMorgan Active Bond ETF (JBND), acquiring 278,276 shares—but here’s the kicker: this move came alongside a complete exit from fallen angel exposure. The timing isn’t coincidental.

The Numbers Behind the Shift

The new JBND position now represents 6.6% of the firm’s 13F reportable assets under management as of December 31. For context, this makes it a significant bet. The fund’s portfolio currently shows concentrated positions in fixed-income vehicles:

• FLXR: $25.43 million (11.4% of AUM)
• MTBA: $18.88 million (8.5% of AUM)
• GLDM: $17.14 million (7.7% of AUM)
• CTA: $15.90 million (7.1% of AUM)
• EMB: $11.42 million (5.1% of AUM)

Why Abandon the Fallen Angel Trade Now?

Fallen angel ETFs historically thrive during early credit recovery phases—when downgraded bonds are set up to recover. The logic made sense in a risk-on environment. But Peak’s complete exit suggests something shift: the easy upside has already been captured.

The move reveals a calculated reset. Rather than chase yield recovery, the fund is now rotating into an actively managed core bond strategy. This isn’t about finding value in distressed credit anymore; it’s about sophisticated portfolio construction.

What JBND Actually Does

The JPMorgan Active Bond ETF operates on a different playbook. It seeks outperformance against the Bloomberg U.S. Aggregate Bond Index over three to five year cycles, maintaining at least 80% in bonds. The fund’s active managers dynamically position across Treasury curves, securitized credit, and corporate bonds—prioritizing duration management and downside protection over yield chasing.

As of January 12, JBND traded at $54.07 (down 3% from its 52-week high but up ~5% annually), with a 4.4% yield and $5.44 billion in assets. Since inception in late 2023, it’s delivered solid risk-adjusted returns, outperforming the broad bond index through active positioning rather than passive duration bets.

The Deeper Market Signal

This rotation tells us something important: yield recovery trades are becoming last-cycle thinking. When sophisticated investors flip from “credit recovery alpha” to “core bond beta-plus,” it typically means the low-hanging fruit is gone. Peak’s capital reallocation suggests the market is shifting focus from credit event profits to steady, risk-managed income.

For bond investors watching this, the lesson is clear—market cycles matter more than fixed-income yield spreads. Peak’s pivot from fallen angels to active bond management isn’t just a portfolio tweak; it’s a statement about where the cycle is headed next.