Angel Oak’s Conversions Bring New Opportunities
to Advisors, Investors Seeking Actively Managed ETFs in Structured
Credit and High Yield
Angel Oak Capital Advisors, LLC, an investment management firm
that specializes in value-driven structured credit investing,
announced the completed conversions of two of its mutual funds to
exchange-traded funds. The Angel Oak High Yield Opportunities Fund,
which, as of 1/31/24, received a 5-Star Overall Morningstar Rating
based on risk-adjusted returns out of 614 high yield bond funds,
and the Angel Oak Total Return Bond Fund are ETFs as of February
16. The funds’ new names are Angel Oak High Yield Opportunities ETF
(NYSE: AOHY) and Angel Oak Mortgage-Backed Securities ETF (NYSE:
MBS), respectively.
The conversion underscores the positive momentum for Angel Oak’s
ETF platform since launching in November of 2022. MBS and AOHY
recently joined Angel Oak’s Income ETF (NYSE: CARY) and UltraShort
Income ETF (NYSE: UYLD). The firm’s four ETFs combined have
approximately $350 million in assets under management, and the
firm’s ETF platform, including its sub-advisory services, has
approximately $500 million in AUM. Angel Oak plans to broaden the
new ETFs’ availability to its core investor audience; both MBS and
AOHY will be available on major custodial platforms as well as
wirehouse and independent broker-dealer platforms.
“We continue to be pleased with the response of our actively
managed ETF products, and the latest conversions show our
commitment to providing investors with unique options for
income-driven solutions within the structured credit space,” said
Sreeni Prabhu, managing partner and group chief investment officer
for Angel Oak. “As leaders in structured credit investing, we’re
dedicated to aligning our leading-edge solutions with investors’
goals.”
The MBS ETF will be an actively managed, pure-play residential
mortgage credit ETF seeking to deliver stable income and price
appreciation through both agency and non-agency residential
mortgage-backed securities (RMBS). The specific RMBS focus
separates this ETF from others in the market whose exposure to
residential credit, if any, is typically offered via passive
exposure to agency mortgage-backed securities. The fund is backed
by Angel Oak’s team of RMBS experts, which has been investing in
this area for more than 15 years.
The AOHY ETF has a strong track record, spanning approximately
15 years, of providing investors with a differentiated approach in
the high-yield sector. This actively managed ETF seeks to invest in
higher-quality, high-yield corporate bonds and securitized credit
assets — a rarity among high-yield ETFs, which tend to be
homogenous and benchmark trackers. Angel Oak has appointed a
seasoned team of portfolio managers to lead the fund. They have
more than 25 years of experience navigating corporate and
securitized debt and have overseen the firm’s five-star
Morningstar-rated high-yield bond fund since 2009.
“The successful conversion of these ETFs demonstrates Angel
Oak’s emerging leadership in both the ETF landscape and,
critically, in securitized credit investing,” said Ward Bortz, ETF
portfolio manager and the head of distribution for U.S. wealth for
Angel Oak. “Investors coming over the hill of the recent bond bear
market acknowledge the increased appeal of securitized credit and
its potential returns, driving forward demand for these strategies.
The debut of MBS and AOHY ETFs is Angel Oak’s next step forward in
bringing our top-of-the-line, innovative strategies to investors in
the market for accessible, liquid investment vehicles.”
To learn more about Angel Oak’s ETF offerings, click here.
About Angel Oak Capital Advisors, LLC
Angel Oak is an investment management firm focused on providing
compelling fixed-income investment solutions to its clients. Backed
by a value-driven approach, Angel Oak seeks to deliver attractive,
risk-adjusted returns through a combination of stable current
income and price appreciation. Its experienced investment team
seeks the best opportunities in fixed income, with a specialization
in mortgage-backed securities and other areas of structured
credit.
Net Total Returns as of 12/31/23
1 YR
3 YR
5 YR
10 YR
Angel Oak High Yield Opportunities Fund
Instl. (ANHIX)
12.54%
3.32%
5.73%
4.95%
Bloomberg U.S. Corporate High Yield
Index
13.44%
1.98%
5.37%
4.60%
Current performance may be lower or higher than performance data
quoted. Performance quoted is past performance and is no guarantee
of future results. The investment return and principal value of an
investment in a fund will fluctuate so that an investor’s shares,
when redeemed, may be worth more or less than their original cost.
Current performance to the most recent month end can be obtained by
calling 855-751-4324 or by visiting angeloakcapital.com.
The Angel Oak High Yield Opportunities ETF is the Successor Fund
to The Angel Oak High Yield Opportunities Fund, which was
reorganized into the ETF on 2/16/24. As a result of the conversion,
the Fund adopted the accounting and performance history of its
predecessor mutual fund. Performance results shown prior to
2/16/24, reflect the performance of the predecessor mutual fund.
The NAV returns shown prior to 2/16/24 reflects the NAV of
predecessor mutual fund’s Institutional shares. Performance for the
mutual fund has not been adjusted to reflect the ETF’s expenses.
Had the mutual fund been structured as an ETF, its performance may
have differed. The ETF has the same investment objective and
investment strategy as the mutual fund, and performance of the ETF
may differ from that of the Fund. On 12/31/22, changes were made to
the Fund’s investment strategies; performance during period prior
to this date may have differed had the Fund’s current strategies
been in place at those times.
The inception date of the High Yield Opportunities Fund I Class
(ANHIX) was 3/31/09. Gross and net expense ratios (0.99% and 0.56%,
respectively) are reported as of the 5/31/23 prospectus. The
Adviser has contractually agreed to waive its fees to limit the
Total Annual Fund Operating Expenses After Fee Waiver/Expense
Reimbursement to 0.55% of the Fund’s average daily net assets
through 5/31/24.
AOHY
MBS
Gross Expense Ratio*
0.55%
0.79%
Net Expense Ratio*
0.55%
0.49%
*Gross and net expense ratios are reported as of the 1/19/24
prospectus. For MBS, the Adviser has contractually agreed to waive
its fees to limit the Total Annual Fund Operating Expenses After
Fee Waiver/Expense Reimbursement to 0.49% of the Fund’s average
daily net assets through 9/30/25.
As of 1/31/24, the Angel Oak High Yield Opportunities Fund
(ANHIX) received a Morningstar rating based on risk-adjusted
returns of 5 stars overall, 4 stars for the three-year period, 4
stars for the five-year period, and 5 stars for the ten-year period
among 614, 614, 581, and 434 high yield bond funds. The Morningstar
Rating™ for funds, or “star rating”, is calculated for managed
products (including mutual funds, variable annuity and variable
life subaccounts, exchange-traded funds, closed-end funds, and
separate accounts) with at least a three-year history.
Exchange-traded funds and open-ended mutual funds are considered a
single population for comparative purposes. It is calculated based
on a Morningstar Risk-Adjusted Return measure that accounts for
variation in a managed product's monthly excess performance,
placing more emphasis on downward variations and rewarding
consistent performance. The Morningstar Rating does not include any
adjustment for sales loads. The top 10% of products in each product
category receive 5 stars, the next 22.5% receive 4 stars, the next
35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom
10% receive 1 star. The Overall Morningstar Rating for a managed
product is derived from a weighted average of the performance
figures associated with its three-, five-, and 10-year (if
applicable) Morningstar Rating metrics. The weights are: 100%
three-year rating for 36-59 months of total returns, 60% five-year
rating/40% three-year rating for 60-119 months of total returns,
and 50% 10-year rating/30% five-year rating/20% three-year rating
for 120 or more months of total returns. While the 10-year overall
star rating formula seems to give the most weight to the 10- year
period, the most recent three-year period actually has the greatest
impact because it is included in all three rating periods.
Bloomberg U.S. Corporate High Yield Index: An unmanaged
market value-weighted index that covers the universe of fixed-rate,
non-investment grade debt.
Investors should carefully consider the investment
objectives, risks, charges and expenses of the funds. This and
other important information about the funds is contained in the
Prospectus which can be obtained by calling Shareholder Services at
855-751-4324 or from www.angeloakcapital.com. The Prospectus should
be read carefully before investing.
Investing involves risk; principal loss is possible.
Investments in debt securities typically decrease when interest
rates rise. This risk is usually greater for longer-term debt
securities. Investments in lower-rated and nonrated securities
present a greater risk of loss to principal and interest than
higher-rated securities do. Investments in asset-backed and
mortgage-backed securities include additional risks that investors
should be aware of, including credit risk, prepayment risk,
possible illiquidity, and default, as well as increased
susceptibility to adverse economic developments. Derivatives
involve risks different from—and in certain cases, greater than—the
risks presented by more traditional investments. Derivatives may
involve certain costs and risks such as illiquidity, interest rate,
market, credit, management, and the risk that a position could not
be closed when most advantageous. Investing in derivatives could
lead to losses that are greater than the amount invested. The Fund
may use leverage, which may exaggerate the effect of any increase
or decrease in the value of securities in the Fund’s portfolio or
higher and duplicative expenses when it invests in mutual funds,
ETFs, and other investment companies. The Funds are a recently
organized investment company with limited operating history. As a
result, prospective investors have a limited track record or
history on which to base their investment decisions. For more
information on these risks and other risks of the Fund, please see
the Prospectus.
ETFs may trade at a premium or discount to NAV. Shares of any
ETF are bought and sold at market prices (not NAV) and are not
individually redeemed from the Fund. Brokerage commissions will
reduce returns. The Fund is an actively managed ETF, which is a
fund that trades like other publicly-traded securities. The Fund is
not an index fund and does not seek to replicate the performance of
a specified index.
The Angel Oak Funds are distributed by Quasar Distributors,
LLC.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240220285735/en/
Media: Trevor Davis, Gregory FCA for Angel Oak Capital Advisors
443-248-0359 trevor@gregoryfca.com
Company: Randy Chrisman, Chief Marketing and Corporate IR
Officer, Angel Oak Capital Advisors 404-953-4969
randy.chrisman@angeloakcapital.com
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