Media Archives - Angel Oak Capital Advisors, LLC.: Recent Episodes
Angel Oak Capital Advisors
After a strong start to earnings season, Senior Portfolio Manager Cheryl Pate, CFA, joined Bloomberg Businessweek to break down the earnings reports from several big banks. Listen to the full interview near the 2:00 mark.
The post Cheryl Pate on Bloomberg Businessweek: Big Bank Earnings appeared first on Angel Oak Capital Advisors, LLC..
Clayton Triick, CFA, Head of Portfolio Management, Public Strategies, recently joined UBS Trending to discuss the opportunity in mortgage-backed securities, noting Angel Oak’s strong alignment with the views of UBS’ Chief Investment Office.
The post Clayton Triick on UBS Trending: Why are MBS being seen as an investment opportunity? appeared first on Angel Oak Capital Advisors, LLC..
Growing demand for actively managed fixed income ETFs poses new opportunities for investors to gain securitized credit exposure. In Pensions & Investments, Ward Bortz, ETF Portfolio Manager and Head of Distribution for U.S. Wealth, explores this growth trend and why investors may consider this asset class.
The post Ward Bortz in P&I: Active Management Vaults ETFs into Asset-Backed Securities Market appeared first on Angel Oak Capital Advisors, LLC..
We believe securitized credit continues to be an underrepresented asset class within retail investors’ fixed income portfolios. Institutional investors typically have a greater allocation to the asset class relative to corporate credit. The figures below illustrate one key benefit institutional investors have enjoyed; securitized credit tends to earn a premium to corporate credit. We call this potential outperformance the securitized credit premium.
Figure 1: Securitized Credit Has Historically Outperformed Corporate Credit
Source: BofA Global Research as of 3/31/24.
This premium can vary over time. During periods of volatility, we believe patient investors that hold through the credit cycle have the potential to achieve attractive returns. While there can be periods of underperformance, securitized credit tends to outperform corporate credit on average, even after adjusting for risk, as shown in Figure 2.
There are several potential drivers of the securitized credit premium, including:
- Lack of representation in fixed income indices, such as the Bloomberg U.S. Aggregate Bond Index, which causes a liquidity premium.
- Complexity of the underlying structures causes less sophisticated investors to potentially shy away from the securities.
- Securitized credit securities tend to cash flow on a monthly basis versus more traditional fixed income that receives cash at maturity
Figure 2: Risk-Adjusted Returns Greater in Structured Credit vs. U.S. Corp. IGSource: BofA Global Research as of 3/31/24.
One of the main concerns investors have about securitized credit is the havoc it caused within portfolios during the Great Financial Crisis. However, since the crisis, the securitized credit markets have become more regulated, underwriting standards have tightened, and issuers must have “skin in the game” or risk retention. These changes have caused the market to experience very little growth compared with the corporate credit marketplace.
Figure 3: Outstanding Debt in Securitized and Corporate Credit MarketsSource: Bloomberg, SIFMA as of 3/31/24.
We believe retail investors, who tend to be under allocated to securitized credit, should consider increasing their allocation to the asset class to help diversify their fixed income allocation and potentially increase their portfolio’s overall risk-adjusted return.
DEFINITIONS AND DISCLOSURES
Bloomberg U.S. Aggregate Bond Index: An unmanaged index that measures the performance of the investment-grade universe of bonds issued in the United States. The index includes institutionally traded U.S. Treasury, government sponsored, mortgage and corporate securities.
Bloomberg U.S. Corporate Investment Grade Index: An index that measures the investment grade, fixed-rate, taxable corporate bond market. It includes USD-denominated securities publicly issued by U.S. and non-U.S. industrial, utility and financial issuers.
Cash Flow: The net amount of cash and cash-equivalents being transferred into and out of a business, especially as affecting liquidity.
Sharpe Ratio: A statistical measure that uses standard deviation and excess return to determine reward per unit of risk. A higher Sharpe ratio implies a better historical risk-adjusted performance. The Sharpe ratio has been calculated since inception using the 3-month Treasury bill for the risk-free rate of return.
The Securitized Products Return Indicator aggregates monthly return performance across the U.S. securitized products credit markets that Bank of America tracks into one number for both total return and excess swap return. The Agency MBS market is not included in the Indicator as it is focused on the return of non-guaranteed securities. There are two subsets of the indicator: 1) a AAA Indicator that tracks AAA-rated structured credit bonds and 2) a Down in Credit Indicator which tracks CLO BBB/BB tranches, CMBS BBB tranches and CAS/STACR below investment-grade rated bonds. The return data is weighted by the 1-month lagged outstanding par value of each indicator constituent. This methodology also applies to the two subset indicators.
Opinions expressed are as of 4/30/24 and are subject to change at any time, are not guaranteed, and should not be considered investment advice.
Investing involves risk; principal loss is possible. Investments in debt securities typically decrease when interest rates rise. This risk is usually greater for longer-term debt securities. Investments in lower-rated and nonrated securities present a greater risk of loss to principal and interest than do higher-rated securities. Investments in asset-backed and mortgage-backed securities include additional risks that investors should be aware of, including credit risk, prepayment risk, possible illiquidity and default, as well as increased susceptibility to adverse economic developments. Derivatives involve risks different from — and in certain cases, greater than — the risks presented by more traditional investments. Derivatives may involve certain costs and risks such as illiquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Investing in derivatives could lead to losses that are greater than the amount invested. The Fund may make short sales of securities, which involves the risk that losses may exceed the original amount invested. The Fund may use leverage, which may exaggerate the effect of any increase or decrease in the value of securities in the Fund’s portfolio or the Fund’s net asset value, and therefore may increase the volatility of the Fund. Investments in foreign securities involve greater volatility and political, economic and currency risks and differences in accounting methods. These risks are increased for emerging markets. Investments in fixed-income instruments typically decrease in value when interest rates rise. The Fund will incur higher and duplicative costs when it invests in mutual funds, ETFs and other investment companies. There is also the risk that the Fund may suffer losses due to the investment practices of the underlying funds. For more information on these risks and other risks of the Fund, please see the Prospectus.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Angel Oak Mutual Funds. This and other important information about each Fund is contained in the Prospectus or Summary Prospectus for each Fund, which can be obtained by calling 855-751-4324 or by visiting www.angeloakcapital.com. The Prospectus or Summary Prospectus should be read carefully before investing.
Index performance is not indicative of Fund performance. Past performance does not guarantee future results. Current performance can be obtained by calling 855-751-4324.
The Angel Oak Funds are distributed by Quasar Distributors, LLC.
© 2024 Angel Oak Capital Advisors, which is the adviser to the Angel Oak Funds.
The post The Securitized Credit Premium appeared first on Angel Oak Capital Advisors, LLC..
Senior PM Cheryl Pate, CFA shared her views on the banking sector following recent big bank earnings results and highlighted large cap bank standouts to consider in today’s environment. Listen to the full interview segment near the 8:30 mark.
The post Cheryl Pate on Bloomberg Radio: Bank Earnings Continue appeared first on Angel Oak Capital Advisors, LLC..
Angel Oak CEO Sreeni Prabhu spoke to Bloomberg Radio’s Tom Keene and Paul Sweeney about his views on commercial real estate (CRE) and where he’s finding investment opportunities in mortgage-backed securities.
The post Sreeni Prabhu on Bloomberg Radio: We See the Best Opportunities in Mortgage-Backed Securities appeared first on Angel Oak Capital Advisors, LLC..
ETF Portfolio Manager and Head of Distribution for US Wealth Ward Bortz highlighted opportunities in the fixed income market in 2024, where we’re headed with inflation and rates, and more.
The post Ward Bortz on Schwab Network: Expect 100 Bps of Fed Cuts in 2024 appeared first on Angel Oak Capital Advisors, LLC..
Ward Bortz, ETF Portfolio Manager and Head of Distribution for Public Strategies, joined Bloomberg Radio to discuss opportunities in the fixed-income market, his outlook on housing, and more.
The post Ward Bortz on Bloomberg Radio: ETFs and Investing Strategies appeared first on Angel Oak Capital Advisors, LLC..
Senior PM Cheryl Pate discussed actionable investment opportunities with big banks following positive earnings results. Listen at 3:20 for barbell approaches to consider in this environment, her bank earnings outlook, and more.
The post Cheryl Pate on Bloomberg Radio: Banks Beating Expectations but Higher for Longer Looms appeared first on Angel Oak Capital Advisors, LLC..
Senior Portfolio Manager Cheryl Pate, CFA joined Bloomberg Radio to share her outlook on the commercial real estate sector, expectations for regional and community banks, and how Angel Oak is positioned to navigate today’s markets.
The post Cheryl Pate on Bloomberg Radio’s Drive to Close appeared first on Angel Oak Capital Advisors, LLC..
Senior Portfolio Manager Colin McBurnette joined The Alternative Investment Podcast to share Angel Oak’s latest market outlook for 2023, break down our strategies in structured credit, and share how those strategies play an important role in investors’ portfolios given today’s environment.
The post Colin McBurnette on The Alternative Investment Podcast: Are Bonds the New Stocks? appeared first on Angel Oak Capital Advisors, LLC..
Despite a potential short-lived recession on the horizon, the fixed-income market presents attractive opportunities for investors. In this market outlook piece, CIO of Public Strategies, Sam Dunlap, provides key insights for institutional investors.
The post Sam Dunlap in Pensions & Investments: Angel Oak Capital exec predicts brief recession in 2023 appeared first on Angel Oak Capital Advisors, LLC..
CIO Sam Dunlap spoke to the Wall Street Journal about opportunities for investors to boost fixed-income holdings in a traditional portfolio.
The post Sam Dunlap in WSJ: Money managers are urging clients to buy bonds while yields are high appeared first on Angel Oak Capital Advisors, LLC..
ETF Portfolio Manager Ward Bortz shares his outlook on interest rates in 2023 and tips for investing in structured credit using an ETF strategy.
The post Ward Bortz on TD Ameritrade Network: How to Use ETFs to Invest in Structured Credit appeared first on Angel Oak Capital Advisors, LLC..
Angel Oak delivered its second actively managed ETF product in as many weeks with the launch of $CARY. Learn more about the fund's strong bias toward residential mortgage credit in this ETF Trends article.
The post Angel Oak Launches Income ETF Focused on Residential Mortgage Credit appeared first on Angel Oak Capital Advisors, LLC..
ETF Portfolio Manager Ward Bortz shares his insights into the launch of the firm's UltraShort Income ETF (UYLD) and why fixed income solutions may be attractive for investors in a high inflation environment.
The post Ward Bortz in ETF Express: U.S. structural credit from Angel Oak is designed to bring diversity to fixed income offerings appeared first on Angel Oak Capital Advisors, LLC..
Under the guidance of ETF Portfolio Manager Ward Bortz, Angel Oak celebrated the launch of its first ETF, $UYLD. Learn more about the fund’s structured credit focused strategy.
The post Ward Bortz in ETF Strategy: Angel Oak debuts ultra-short structured credit ETF appeared first on Angel Oak Capital Advisors, LLC..
Cheryl Pate discusses her market takeaways as earnings season kicks off on the heels of the release of June’s CPI report.
The post Cheryl Pate on CNBC: We’re seeing a lot of value in short-duration, low volatility community bank debt appeared first on Angel Oak Capital Advisors, LLC..
Co-CEO Sreeni Prabhu offered his insights on the health of the U.S. consumer, the housing market, and opportunities in the structured credit market.
The post Sreeni Prabhu on Bloomberg Radio: Be Cautious in this Tumultuous Environment appeared first on Angel Oak Capital Advisors, LLC..
Cheryl Pate shares her outlook on consumer prices for the rest of 2022 and where there could be opportunities in the equity market.
The post Cheryl Pate on CNBC: We might be nearing the peak here in inflation appeared first on Angel Oak Capital Advisors, LLC..
Cheryl Pate explains the key factors influencing our outlook on inflation and why investors should consider opportunities in the financial sector in a rising rate environment.
The post Cheryl Pate on CNBC: Banks and diversified financials outperform in rising rate environment appeared first on Angel Oak Capital Advisors, LLC..
Cheryl Pate discusses where she sees opportunities for investors as markets continue to digest the latest FOMC meeting.
The post Cheryl Pate on CNBC: Growth is the name of the day in stocks appeared first on Angel Oak Capital Advisors, LLC..
Sam Dunlap discusses the latest on the Fed, inflation and his expectations on the market as investors grapple with increasing uncertainty.
The post Sam Dunlap on Yahoo Finance: Markets ‘were not expecting the Powell pivot,’ strategist says appeared first on Angel Oak Capital Advisors, LLC..
Colin McBurnette discusses his latest take on the U.S. housing market and where the team is finding attractive investment opportunities.
The post Colin McBurnette on TD Ameritrade Network: Pending Home Sales appeared first on Angel Oak Capital Advisors, LLC..
Cheryl Pate weighs in on the latest market moves and shares her latest investment ideas in light of today’s CPI data.
The post Angel Oak’s Cheryl Pate Believes Financials Will Outperform appeared first on Angel Oak Capital Advisors, LLC..
Cheryl Pate discusses the current market and where she’s seeing value, even as concerns over the Delta variant remain and Fed uncertainty lingers.
The post Cheryl Pate on BNN Bloomberg: More Cautious on Longer Duration Equities appeared first on Angel Oak Capital Advisors, LLC..