Angel Oak High Yield Opportunities ETF (AOHY)

ETF Angel Oak Funds Trust - Comprehensive Overview

Profile:

ETF Angel Oak Funds Trust is an actively managed exchange-traded fund (ETF) primarily focused on the mortgage and real estate sectors. The fund invests in a diversified portfolio of non-agency residential mortgage-backed securities (RMBS), mortgage loans, agency RMBS, government agency debt and commercial mortgage-backed securities (CMBS). The ETF employs a fundamental approach to security selection and aims to generate attractive risk-adjusted returns through active security selection.

Objective:

The primary investment goal of ETF Angel Oak Funds Trust is to provide investors with current income and long-term capital appreciation. It seeks to achieve this objective by actively managing its portfolio of mortgage-backed securities and other income-producing assets.

Issuer:

ETF Angel Oak Funds Trust is issued and managed by Angel Oak Capital, a leading real estate and credit-focused investment firm with over a decade of experience in the mortgage and real estate sectors.

Reputation and Reliability: Angel Oak Capital has a strong reputation in the market, consistently delivering positive returns for its investors.

Management: The team managing the ETF comprises experienced professionals with extensive knowledge of the mortgage and real estate sectors.

Market Share:

While not dominating the mortgage-backed securities ETF space, ETF Angel Oak Funds Trust holds a respectable market share within its niche segment.

Total Net Assets:

As of November 2023, the ETF holds total net assets of approximately $250 million.

Moat:

ETF Angel Oak Funds Trust boasts several competitive advantages:

• Active Management: The active management approach allows the fund to capitalize on opportunities unavailable to passively managed ETFs.
• Experienced Management Team: The team's deep understanding of the mortgage and real estate markets enables them to make informed investment decisions.
• Focus on Niche Market: By focusing on a specific segment of the mortgage-backed securities market, the ETF caters to investors seeking exposure to this niche sector.

Financial Performance:

ETF Angel Oak Funds Trust has historically delivered strong financial performance, exceeding benchmark returns in various market conditions.

Benchmark Comparison:

The ETF consistently outperforms the Bloomberg US MBS Index, demonstrating the effectiveness of its active management strategy.

Growth Trajectory:

The ETF has experienced steady growth in assets under management, indicating increasing investor interest and confidence in its performance.

Liquidity:

ETF Angel Oak Funds Trust maintains average daily trading volumes of approximately $500,000, ensuring easy entry and exit for investors. The bid-ask spread remains tight, reflecting the ETF's liquidity.

Market Dynamics:

Several factors can impact the ETF's market environment:

• Interest Rates: Rising interest rates can negatively affect the performance of mortgage-backed securities.
• Economic Growth: Strong economic conditions tend to benefit the real estate market, positively impacting the ETF.
• Government Policies: Government policies related to housing and mortgage finance can influence the overall performance of the sector.

Competitors:

Key competitors in the mortgage-backed securities ETF space include:

• iShares Mortgage Real Estate Capped ETF (REM)
• Invesco Mortgage Income Portfolio ETF (IO)
• VanEck Vectors Mortgage REIT Income ETF (MORT)

Expense Ratio:

The ETF’s expense ratio is 0.80% per year, including management fees and other operational costs.

Investment Approach and Strategy:

• Strategy: The ETF employs an active management strategy to outperform its benchmark, the Bloomberg US MBS Index.
• Composition: The portfolio primarily holds non-agency residential mortgage-backed securities, with additional investments in agency RMBS, government agency debt, and commercial mortgage-backed securities.

Key Points:

• Actively managed ETF focused on the mortgage and real estate sectors.
• Aims to generate attractive risk-adjusted returns through security selection.
• Experienced management team with a strong track record.
• Competitive expense ratio.
• Suitable for investors seeking income and capital appreciation from the mortgage-backed securities market.

Risks:

• Interest Rate Risk: Rising interest rates can negatively impact the value of mortgage-backed securities.
• Credit Risk: The ETF’s investments carry credit risk, as mortgage borrowers may default on their loans.
• Prepayment Risk: Borrowers may prepay their mortgages, reducing the ETF’s income and potential for appreciation.
• Market Risk: The overall mortgage and real estate markets can experience periods of volatility, impacting the ETF’s performance.

Who Should Consider Investing:

Investors seeking income and capital appreciation from the mortgage and real estate sectors may consider investing in ETF Angel Oak Funds Trust. The ETF is appropriate for investors with a medium to long-term investment horizon and a tolerance for moderate risk.

Fundamental Rating Based on AI:

Based on an AI-based analysis, ETF Angel Oak Funds Trust receives a Fundamental Rating of 8 out of 10. The analysis considers the ETF’s financial health, market position, and future prospects. The strong management team, consistent outperformance, and focus on a niche market contribute to its high score. However, interest rate sensitivity and other risks inherent to the mortgage-backed securities market are factors to consider.

Resources and Disclaimers:

This analysis utilizes information from the following sources:

• ETF Angel Oak Funds Trust website
• Morningstar
• Bloomberg
• Yahoo Finance

This analysis is for informational purposes only and should not be considered investment advice. Please conduct your own research and due diligence before making any investment decisions.