Thus, fallen angels are considered as a type of junk bonds. The main difference lies in the fact that junk bonds are generally issued with ratings of 88 or lower. Many studies are devoted to the analysis of the announcement of a downgrade from investment-grade to high yield, creating a so-called fallen angel. This event seems to have the strongest impact on market reaction when investment grade status exhibits risks (especially credit risk).
To a certain extent, stocks defined as fallen angels behave like growth stocks, and, thus, should be considered by GARP (Growth At a Reasonable Price) investors. Empirical studies show that they tend indeed to generate positive average returns when they experience good news.