Angel Oak Capital Advisors, an investment management firm specializing in value-driven structured credit, has launched its debut exchange-traded fund. The Angel Oak UltraShort Income ETF (UYLD), which begins trading on the NYSE Arca today, invests in short-duration structured credit assets and cash-like instruments that seek to provide higher yield without sacrificing credit quality.
The actively managed UYLD will primarily target the best relative value opportunities of structured credit, including agency residential and commercial mortgage-backed securities, asset-backed securities, and collateralized loan obligations. However, the fund may also target government bonds and agency-backed securities, including U.S. Treasury securities, agency RMBS, and agency CMBS. This combination of structured credit, U.S. Treasuries, corporates, and agency-backed bonds should provide balance to the fund and enhance price stability.
“Angel Oak has been a leader in the structured credit investment space for over a decade, and we are excited to bring our unique approach to short-duration structured credit investing to the ETF marketplace,” said Sreeni Prabhu, group CIO, and managing partner at Angel Oak Capital Advisors, in a news release. “In recent history, there has rarely been an investment opportunity as strong as what we see in the short-duration space to generate yield with the risk profile we are targeting. We are thrilled to launch this ETF at a pivotal moment for investors seeking such strategies.”
UYLD has an expense ratio of 0.29%. Its average rate duration will be maintained below 1.0.
As part of Angel Oak’s plan to build its ETF business, the firm hired Ward Bortz to serve as head of ETFs in June. Bortz was previously head of strategy for fixed-income factors at Invesco U.S.
“Joining Angel Oak and spearheading the launch of the UltraShort Income ETF was an enticing opportunity because of the firm’s dedicated approach to structured credit assets and the chance to bring a new product to market that we’ve heard investors ask for,” Bortz said. “We look forward to the success of UYLD and growing Angel Oak’s ETF offerings in the future.”
UYLD complements Angel Oak’s existing lineup of mutual funds and private strategies. The firm had $20.8 billion in assets under management as of June 30.
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