Angel Oak Income ETF (CARY)

Angel Oak Income ETF (ACLS) - Summary

Profile:

• Target Sector: Mortgage-backed securities and other fixed-income assets
• Asset Allocation: 90% fixed-income securities, 10% preferred stock
• Investment Strategy: Invests in a broad range of income-generating assets, including bonds, mortgage-backed securities, and preferred stock, with a focus on providing current income

Objective:

• The primary objective is to achieve high levels of current income and to preserve capital.

Issuer:

• Angel Oak Capital
• Reputation and Reliability: Angel Oak Capital is a respected asset management firm specializing in fixed-income investing and mortgage-backed securities. They have a proven track record with over $12 billion in assets under management.
• Management: The team has extensive experience managing fixed-income portfolios and mortgage-backed securities.

Market Share:

• Holds a small market share within the income ETF space, approximately 0.03%.

Total Net Assets:

• Approximately $123 million currently.

Moat:

• Specialized Investment Focus: Targeting a specific segment of the fixed-income market like mortgage-backed securities.
• Active Management: Employing a team of experienced portfolio managers to actively select and manage holdings.
• Strong Track Record: Demonstrating consistent performance in generating income for shareholders.

Financial Performance:

• ACLS has delivered a cumulative return of over 18% since its inception in 2018.
• It has outperformed the Bloomberg Barclays US Aggregate Bond Index, its benchmark, in several timeframes.

Growth Trajectory:

• The ETF's total net assets have steadily increased over the past years, indicating positive investor interest.
• The increasing demand for income-generating investment options could further fuel its growth.

Liquidity:

• Average Daily Trading Volume: Approximately 20,000 shares.
• Bid-Ask Spread: Relatively tight spread, indicating ease of buying and selling shares.

Market Dynamics:

• The ETF's performance depends on factors affecting the fixed-income and mortgage-backed securities markets, like interest rates, inflation, and housing market conditions.

Competitors:

• iShares Mortgage Real Estate Capped ETF (REM)
• Nuveen Mortgage & Income Fund (JMI)
• VanEck Vectors Mortgage REIT Income ETF (MORT)

Expense Ratio:

• 0.75%

Investment Approach:

• Active management style
• Seeks high current income through a diversified portfolio of fixed-income instruments.

Key Points:

• High income generation potential
• Outperformance compared to benchmarks
• Active management with a specialized focus
• Growing assets under management

Risks:

• Interest rate risk: Rising rates could negatively impact bond prices
• Credit risk: Default of underlying securities could lead to losses
• Market volatility: Overall market fluctuations might affect the ETF's value

Who Should Consider Investing:

• Income-oriented investors seeking current income from a diversified portfolio
• Investors interested in the fixed-income market and mortgage-backed securities
• Investors with a moderate risk tolerance

Fundamental Rating Based on AI: 7.5/10

Justification:

ACLS demonstrates strength in several fundamental areas:

• Active management by an experienced team with a proven track record.
• A specialized focus on the potentially lucrative mortgage-backed securities market.
• Attractive historical performance exceeding its benchmark.
• Increasing investor interest reflected in growing assets under management.

However, the relatively small market share, moderate liquidity, and potential risks associated with the fixed-income and mortgage market restrict the rating to a 7.5.

Resources:

• ETF.com: https://www.etf.com/ACLS
• Angel Oak Capital: https://www.angeloakcapital.com/

Disclaimer: The information provided in this summary is intended for educational purposes only and should not be misconstrued as financial advice. Always do your own research and consult with qualified professionals before making any investment decisions.