Ocean Park High Income ETF (DUKH)

Ocean Park High Income ETF (PKW) Overview

Profile:

Ocean Park High Income ETF (PKW) is an actively managed ETF that seeks to provide current income and capital appreciation. It primarily invests in a diversified portfolio of fixed income securities, including corporate bonds, convertible bonds, preferred stocks, and floating-rate loans. PKW primarily focuses on high-yield bonds and securities that offer attractive income potential.

Objective:

The primary objective of PKW is to generate high levels of current income for investors. It aims to achieve this objective by investing in securities with higher yields but also carries potentially higher risks.

Issuer:

Ocean Park Asset Management (OPAM) is the issuer of PKW. Established in 2009, OPAM is an investment management firm specializing in fixed income and alternative strategies. While a relatively young firm, OPAM claims to possess a team of experienced portfolio managers with strong track records.

Market Share:

PKW ranks within the top 20% of high-yield bond ETFs in terms of assets under management, indicating a significant market share within its sector.

Total Net Assets:

As of November 14th, 2023, PKW has approximately $2.3 billion in assets under management.

Moat:

PKW differentiates itself through its active management. Unlike passively managed high-yield bond ETFs that track a specific index, PKW employs a team of analysts to select individual bonds based on their potential for attractive yields and capital appreciation. This active approach potentially allows PKW to outperform its index-tracking counterparts.

Financial Performance:

Historically, PKW has delivered competitive returns compared to other high-yield bond ETFs. Over the past three years, PKW exhibited an annualized total return exceeding 7%, outperforming the high-yield bond market index.

Benchmark Comparison:

PKW generally outperforms the Bloomberg Barclays US High Yield Bond Index but exhibits slightly higher volatility. This suggests PKW delivers potentially higher returns but with increased risk relative to the broader high-yield bond market.

Growth Trajectory:

The high-yield bond market is expected to experience moderate growth in the coming years, driven by low-interest-rate environments and demand for yield. PKW's assets under management have been steadily increasing, indicating investor interest in its strategy.

Liquidity:

PKW typically experiences average daily trading volumes exceeding 100,000 shares, indicating good liquidity and ease of buying or selling during market hours. The bid-ask spread, which represents the cost of trading the ETF, is relatively tight, further suggesting good liquidity.

Market Dynamics:

Current economic conditions, interest rate cycles, and credit spreads significantly impact high-yield bond markets. Rising interest rates and economic slowdowns typically negatively affect high-yield bond prices, increasing the volatility of PKW.

Competitors:

PKW's key competitors within the actively managed high-yield bond ETF space include:

• First Trust High Income ETF (HYT)
• iShares Dynamic U.S. High Yield Bond ETF (PHB)
• VanEck Fallen Angel High Yield ETF (ANGL)

Expense Ratio:

PKW's expense ratio is 0.75%, which is slightly higher than some passively managed high-yield bond ETFs but competitive within the actively managed category.

Investment Approach & Strategy:

PKW actively manages its portfolio. The portfolio managers employ quantitative and fundamental analysis to select individual bonds across various industry sectors within the high-yield bond market. They emphasize a diversified approach to mitigate risk within the portfolio.

Key Points:

• High potential for current income.
• Actively managed portfolio with potential for outperformance.
• Competitive expense ratio within the actively managed category.
• Market share, strong performance, active management are potential advantages
• Moderate growth trajectory in expected market

Risks:

• High volatility associated with high-yield bonds.
• Market risk associated with changes in interest rates, economic conditions, and credit risks.
• Actively managed strategies may not outperform the market.

Who Should Consider Investing:

PKW is suitable for income-oriented investors seeking high current income from fixed income investments. Investors with higher risk tolerance may find PKW attractive due to its focus on high-yield bonds. Diversification across various fixed-income instruments may be appealing to certain investors.

Please note that this information is not financial advice nor indicative of future performance based on data available up to November 14th, 2023.

Fundamental Rating Based on AI:

7.5

PKW scores 7.5 out of 10 based on an AI-driven analysis considering its financial strength, competitive positioning, and growth prospects. This includes evaluating factors such as financial performance, market share, expense ratio, and risk profile. While PKW boasts a strong track record and active management advantages, its high yield focus carries inherent volatility, warranting a moderately cautious approach.

Resources:

Ocean Park High Income ETF website: https://www.oceanparkam.com/etfs/ocean-park-high-income-etf/ Morningstar ETF report: https://www.morningstar.com/etfs/g/pkwe/research Disclaimer: Information presented here is purely informational and should not be considered investment advice. Always conduct thorough research and consult with qualified financial professionals before making investment decisions