Angel Oak High Yield Opportunities ETF's Average People Pillar and Process Pillar ratings result in a Morningstar Medalist Rating of Neutral. The portfolio maintains a sizable cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy benefits from the longest-tenured manager on the team's lengthy experience. This is a positive driver of the strategy's Average People Pillar rating. The fund earns an Average Process Pillar rating. To be considered a quality steward, this strategy's parent organization needs to improve factors like an unfavorable average Morningstar Rating and unreasonable fees. As a result, the firm obtains a Below Average Parent Pillar rating.

Analyst Rating

Morningstar's evaluation of this fund's process seeks to determine how repeatable, consistent, and reliable it is, and whether management maintains a competitive advantage. Angel Oak High Yield Opportunities ETF earns an Average Process Pillar rating.    The predominant contributor to the rating is the stability of the management team. Specifically, the fund has not seen a manager change in the last 15 years. The firm's five-year retention rate of 87% also strengthens the process. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 20%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's modest success ratio suggests that the firm could do better across its fund lineup.

 The investment strategy as stated in the fund's prospectus is as follows: 


The investment seeks to earn a high level of current income with a secondary objective of capital appreciation.  In pursuing its investment objective, the fund will, under normal circumstances, invest at least 80% of its net assets, plus the amount of any borrowings for investment purposes, and in securities rated below investment grade (measured at the time of purchase). The fund is non-diversified.

 This strategy has a 6.9% 12-month yield, higher than its average peer's 6.3%. While a higher yield may deliver more income, it also tends to indicate higher credit risk.

Average

Process

Angel Oak High Yield Opportunities ETF earns an Average People Pillar rating. The leading driver of the rating is the firm's five-year retention rate of 87%. The size of the portfolio management team also contributes to the rating. With seven portfolio managers, the fund is well-staffed. Lastly, the rating is limited by the parent firm's five-year success ratio of 22%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median return for the period. The parent's subpar success ratio suggests that the firm could do better across its fund lineup.


Matthew Kennedy’s veteran status, with 16 years of listed portfolio management experience, brings a wealth of experience to the table. The average Morningstar Rating of the strategies they currently manage is 5.0 stars, indicating that their risk-adjusted returns outperformed the category average.

People

In an increasingly competitive industry, Angel Oak falls behind on a number of key metrics, resulting in a Below Average Parent Pillar rating. The risk-adjusted performance of the firm's open-end and exchange-traded funds does not stack up well versus their competitors, with an average overall Morningstar Rating of 2.0 stars. Open-end and exchange-traded fund fees are a weakness at the firm, contributing negatively to the rating. On average, the firm charges fees on its funds that are in the second most-expensive quintile of category peers. With the current market environment of fee compression, this is cause for concern, as investors may flock to alternate asset managers over time to get a better deal. Angel Oak has had high portfolio management turnover over the past five years compared with peers, detracting from its rating, as long-term stability tends to go together with positive results.

Below Average

Parent

Angel Oak High Yield Opportunities ETF

AOHY is an actively managed fund that provides broad exposure to high-yield fixed-income securities, globally. The fund seeks a high level of current income, and to a lesser extent, capital appreciation.

Angel Oak Mortgage-Backed Securities ETF

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.

Angel Oak Adds 2 More Fixed Income ETFs

ATLANTA--(BUSINESS WIRE)---- $AOHY #ETF--Angel Oak Capital Advisors completes conversion of two mutual funds to ETFs bringing new actively-managed structured credit funds to investors.

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