The boundary is institutional as much as analytical. Insurance capital rules, index membership and many investment mandates change at BBB minus, so losing the last investment grade notch forces selling from holders who cannot hold high yield. That is the fallen-angel dynamic.
Investment grade spreads are narrow and stable most of the time, which means the asset class behaves like a slightly higher-yielding Treasury with occasional sharp gap risk. Most of the return variance comes from duration, not from credit.
Example: the IG index trades at a 95 basis point option-adjusted-spread with an index duration of 7.0. A 25 basis point spread widening costs about 7.0 x 0.25% = 1.75% of price, wiping out several months of carry.
Related: high-yield, credit-rating, credit-spread-bonds, fallen-angel, spread-duration