Angel Oak Capital Advisors Continues Success With ETF Platform as Angel Oak Income ETF Crosses $100 Million in Assets Under Management
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Insights
Angel Oak Capital Advisors' achievement in surpassing $100 million in assets under management for their Angel Oak Income ETF (CARY) is a notable milestone for the firm. This indicates a significant level of investor trust and interest in the firm's ETF offerings, particularly in the structured credit space. The growth of CARY and UYLD, alongside the firm's sub-advisory services, suggests a robust expansion strategy in the actively managed fixed-income ETF market.
The reported annualized return of 9.70% for CARY since its inception is impressive, especially considering the broader challenging fixed income environment in 2023. This performance could potentially attract more investors seeking yield in a low-interest-rate environment, assuming the risks associated with non-agency residential mortgage-backed securities (RMBS) are well-managed and understood. The moderate-duration profile of CARY indicates a balanced approach to interest rate risk, which could be appealing to investors concerned about potential rate hikes.
Angel Oak's focus on innovation and the introduction of new funds in the structured credit domain could provide investors with diversified investment options. However, it is crucial for investors to consider the inherent risks associated with structured credit investments, such as credit risk and market liquidity. The success of these offerings will largely depend on the firm's ability to maintain performance and manage risks effectively.
The growth of Angel Oak's ETF platform, particularly in a niche area like structured credit, is indicative of a broader market trend where investors are looking for alternative income sources. The structured credit market, including non-agency RMBS and other assets like consumer asset-backed securities and collateralized loan obligations, can offer higher yields than traditional fixed-income assets, which may explain the attraction to Angel Oak's ETFs.
However, it's important to note that the structured credit market can be complex and opaque, with varying levels of liquidity and risk. Angel Oak's expertise in this area could be a competitive advantage, but it also requires continuous monitoring of market conditions and asset performance. The firm's ability to innovate and develop new funds in this space will likely be a key factor in sustaining growth and attracting institutional investors and advisers.
Angel Oak's proactive approach in planning for 2024 with the anticipation of unique opportunities in structured credit suggests a forward-thinking strategy. Nevertheless, potential investors should conduct thorough due diligence, considering market dynamics and the performance of similar ETFs in this specialized segment.
The performance of Angel Oak's ETFs, especially in a challenging year for fixed income, reflects broader economic trends. The firm's success in this area could be partially attributed to the search for yield in a low-rate environment, where traditional bonds may not offer satisfactory returns. The structured credit market can provide higher yields, but it also comes with increased risk, particularly in periods of economic uncertainty or market volatility.
The firm's expectation of unique opportunities in structured credit for 2024 suggests an optimistic outlook on economic conditions and the potential for market inefficiencies that can be exploited. However, it is important for stakeholders to understand the economic factors that could influence the performance of structured credit, such as changes in interest rates, housing market dynamics and consumer debt levels.
Investors in Angel Oak's ETFs should be aware of the macroeconomic risks and how they might affect the underlying assets within the funds. While the firm's expertise and active management approach may help navigate these risks, the performance of structured credit assets is inherently tied to economic conditions that can change rapidly.
“At just over a year in, we’re thrilled with the growth we’ve achieved in the actively managed fixed-income ETF space and with our ability to deliver for our investors,” said Ward Bortz, ETF portfolio manager and head of distribution for public strategies. “In 2024, we expect to continue delivering new and innovative funds that align with our expertise in the structured credit space while we also grow our sub-advisory services and explore new partnerships.”
CARY, one of the only actively managed ETFs focused on residential mortgage credit, has delivered an annualized
“As we are leaders in structured credit, finding success in areas of the market through our ETF platform — as well as our public and private strategies more broadly — has been rewarding in what was an otherwise challenging fixed income environment in 2023,” said Sreeni Prabhu, group chief investment officer and managing partner at Angel Oak. “We believe 2024 will present a host of unique opportunities in structured credit and we look forward to delivering another strong year for our investor base.”
To learn more about CARY, click here or visit angeloakcapital.com.
About Angel Oak Capital Advisors
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.
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The inception date of the Angel Oak Income ETF was Nov. 7, 2022.
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 the 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/investments/cary.
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*Gross and net expense ratios 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
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Investors should carefully consider the investment objectives, risks, charges and expenses of the Fund. This and other important information about the Fund 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. 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/20240124073847/en/
Media:
Trevor Davis, Gregory FCA for Angel Oak
443-248-0359
trevor@gregoryfca.com
Company:
Randy Chrisman, Chief Marketing and Corporate Investor Relations Officer, Angel Oak
404-953-4969
randy.chrisman@angeloakcapital.com
Source: Angel Oak Capital Advisors LLC
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