Weakness in Angel Oak Income ETF's People and Process Pillar ratings limits this strategy to a Morningstar Medalist Rating of Negative. The strategy charges fees in line with its similarly distributed peers, priced within the middle quintile.  

 The longest-tenured manager has a wealth of experience, but due to other weaknesses, the strategy earns a Below Average People Pillar. The strategy gets a Below Average Process Pillar rating.  The strategy's parent organization still has a way to go to reach the industry standard, evidenced by an unfavorable average Morningstar Rating and a bench of limited-tenure portfolio managers. As a result, the firm obtains a Below Average Parent Pillar rating.

Analyst Rating

Morningstar's style-agnostic evaluation of this fund's process seeks to understand whether the strategy has a performance objective and sensible, repeatable execution. Angel Oak Income ETF earns a Below Average Process Pillar rating.    The process benefits from the firm's five-year retention rate of 87% over the period. However, the rating is weakened 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 beat their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup. High costs across its parent firm's funds, whose fees rank in their respective category's highest-cost quintile on average, also hold the process back. While this fund's costs are most relevant to investors, the pattern at the broader firm suggests it could do more to keep fees low.

 Compared with other funds in the Multisector Bond Morningstar Category, this fund, historically, hews closely to peers' credit and interest-rate sensitivity over the past few years. Opening the analysis to additional factors, the portfolio has displayed biases over time, whether towards or away from certain fixed-income instruments. Relative to the average strategy in the category, the managers have been substantially underweight corporate debt in recent years. In the latest month, the strategy has also relatively underweighted corporate bonds compared with Morningstar Category peers. Additionally, there's been a notable overallocation to AAA rated bonds over the past few years. Compared with category peers, the strategy had more exposure to AAA rated bonds in the most recent month. Finally, during the past few years, the fund leaned towards debt with 10- to 15-year maturities. In this month, the strategy also leaned more towards debt with 10- to 15-year maturities compared with its peers.

 This strategy has a 6.8% 12-month yield, higher than its average peer's 5.3%. Typically, higher yields come at the cost of higher credit risk. But that isn't always the case. Over the past 12 months, the average yield of the fund has been higher than the average yield of its Morningstar Category peers. The portfolio holds assets with a higher average surveyed credit quality of BBB, compared with the category average of BB, and 22% of the strategy's assets are rated non-investment-grade compared with its average peers' 35%. Strategies with lower credit risk can typically withstand market turmoil more effectively.

Below Average

Process

Angel Oak Income ETF earns a Below Average People Pillar rating. The team is supported by the firm's five-year retention rate of 87%. However, the rating is held back by the parent firm's five-year success ratio of 22%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median return for the period. The parent's modest success ratio suggests that the firm could do better across its fund lineup. The managers' failure to consistently outperform peers at the funds they run, as measured by their combined three-year manager excess returns, also holds the team back.


The team is backed by Matthew Kennedy, the longest-tenured manager on the strategy, who brings 16 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 5.0 stars, demonstrating impressive risk-adjusted performance. The team is composed of a solid supporting cast of nine additional named managers, averaging 12 years of listed portfolio management experience.

People

Angel Oak lags peer asset managers in a number of stewardship qualities, resulting in a Below Average Parent Pillar rating. The firm has a poor risk-adjusted performance record. Across all open-end and exchange-traded funds, the firm’s average overall Morningstar Rating is 2.2 stars. With an average asset-weighted tenure of nine years among the longest-tenured managers at Angel Oak, the firm is on par with peers. Seasoned teams tend to have more experience to draw upon should they need to weather turbulent market conditions. 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.

Parent

Angel Oak Income ETF

CARY is an actively managed fund that aims for current income by broadly investing in USD-denominated fixed income securities with a tilt towards structured products and residential mortgage. Securities could be of any credit quality or maturity.

Alpha Architect 1-3 Month Box ETF

Janus Detroit Street Trust-Janus Henderson B-BBB CLO ETF

Investment-grade bonds offer investors strong yields with low credit risk. A couple of ETFs offer exposure to these securities with some added benefits, including potential tax advantages and above-average yields. JBBB, CARY, and BOXX look like particularly strong ETFs in this space. A quick overview of these follows.

3 Investment-Grade ETF Buys, With Yields Up To 8.0%

CARY is a lesser-known income ETF that primarily invests in short-term investment-grade bonds. CARY offers a diversified portfolio, a high dividend yield of 6.4%, and a strong track record of performance. The fund yields more than its peers, with stronger total returns as well.

CARY: Strong Investment-Grade ETF, Above-Average 6.2% Yield And Performance

VanEck Vectors BDC Income ETF

Panagram Bbb-B Clo Etf

FlexShares High Yield Value-Scored Bond Index Fund

iShares iBoxx $ Investment Grade Corporate Bond ETF

ETFs offer investors diversified exposure to different asset classes, including U.S. and international equities, fixed-rate and variable rate bonds. Within each market sub-segment some ETFs offer particularly compelling yields. A short, curated overview of some of these ETFs follows. Yields range from 5% - 10%.

Higher-Yield ETFs By Asset Class

ATLANTA--(BUSINESS WIRE)---- $CARY--Angel Oak Capital Advisors announces the Angel Oak Income ETF (NYSE: CARY) has crossed $100 million in assets under management.

Angel Oak Capital Advisors Continues Success With ETF Platform as Angel Oak Income ETF Crosses $100 Million in Assets Under Management

ATLANTA--(BUSINESS WIRE)---- $CARY #ETF--Angel Oak Capital's UYLD ETF crosses $100 million in one year as firm prepares to expand ETF platform to deliver more structured-credit-driven funds.

Angel Oak Capital Advisors' UltraShort Income ETF Surpasses $100M in Assets in One Year, Sets Stage for ETF Platform Growth in 2024

Value-driven structured credit investment firm Angel Oak Capital Advisors has launched its second actively managed exchange-traded fund. The Angel Oak Income ETF (NYSE Arca: CARY), which trades on the New York Stock Exchange, provides investors with the opportunity to invest primarily across U.S. structured credit with a strong bias toward residential mortgage credit.

Angel Oak Launches Income ETF Focused on Residential Mortgage Credit

ATLANTA--(BUSINESS WIRE)---- $CARY #ETF--Angel Oak Capital launches second actively managed ETF with a focus on residential mortgage credit.

News for Angel Oak Income ETF ETF (CARY)