On Tuesday, Angel Oak Capital Advisors converted two of its existing mutual funds into ETFs. The Angel Oak Mortgage-Backed Securities ETF (NYSE Arca: MBS) and the Angel Oak High Yield Opportunities ETF (NYSE Arca: AOHY) are both actively managed and target the fixed income asset class.
“[The] latest conversions show our commitment to providing investors with unique options for income-driven solutions within the structured credit space,” Angel Oak Chief Investment Officer Sreeni Prabhu said.
MBS charges a net expense ratio after a waiver of 0.49% and primarily holds residential mortgage-backed securities. A factsheet provided by Angel Oak describes the fund as a pure-play fund that focuses on investment-grade securities.
High Yield Fixed Income
Meanwhile, AOHY has a net expense ratio of 0.55% and invests mainly in high-yield fixed income. The fund’s managers select securities from the corporate and securitized debt spaces. Securitized debt can include residential and commercial mortgage-backed securities, asset-backed securities, and collateralized loan obligations. Its inclusion in AOHY’s portfolio serves to bolster the fund’s yield. At the same time, it doesn’t hurt the portfolio’s credit quality, the fund’s fact sheet says.
“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,” said Ward Bortz, who is on the portfolio management teams of both funds and heads distribution for U.S. wealth at Angel Oak.
MBS had roughly $30 million in assets under management at launch, while AOHY had $74 million. Angel Oak’s largest fund is the $125 million Angel Oak UltraShort Income ETF (UYLD ).
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