| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 7.7% | 0.8% | 7.6% |
| 2025 | 2024 |
|---|---|
| 7.6% | 8.3% |
Angel Oak High Yield Opportunities ETF returned 1.09% in Q4 2025, trailing the Bloomberg U.S. Corporate High Yield Index return of 1.31%. The fund's core thesis centers on consumer and corporate resilience driving continued economic strength. Consumers benefit from historically strong labor markets with 4.4% unemployment, real wage gains, and solid household balance sheets, while corporates maintain near-record margins despite tariff and supply chain pressures through effective cost management and pricing actions. The Federal Reserve cut rates 50 basis points in Q4 with expectations for further cuts as inflation moderates toward the 2% target, supporting credit creation and economic activity. However, credit spreads remain at historically tight levels, necessitating disciplined security selection. The fund emphasizes high-quality corporate issuers with durable market positions, efficient cost structures, and robust free cash flow generation. Portfolio positioning includes gradually trimming out-of-index securitized credit exposure while maintaining select compelling positions. The outlook anticipates continued resilience with additional growth support from 2026 policy changes including tax benefits on tip income and overtime pay.
Consumer and corporate resilience will continue to drive solid economic performance and support high yield credit markets despite tight spreads requiring disciplined security selection.
The outlook is anchored in continued resilience across consumers and corporates, with consumers benefiting from strong labor markets and corporates sustaining margins through cost management. Growth should receive additional lift in 2026 from policy changes, while moderating inflation creates room for further rate cuts supporting credit creation.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 22 2026 | 2025 Q4 | - | consumer, credit, Fed, high yield, rates, Resilience, Spreads | - | The fund emphasizes consumer and corporate resilience as a key theme, with consumers benefiting from strong labor markets and real wage gains, while corporates maintain near-record margins despite cost pressures. This resilience is expected to continue supporting economic growth and credit fundamentals. High yield credit markets performed well with spreads near post-financial crisis lows. The fund focuses on disciplined security selection given tight spreads, emphasizing high-quality corporate issuers with strong fundamentals including durable market positions and robust free cash flow generation. The Federal Reserve cut rates by 50 basis points in Q4 with expectations for further cuts as inflation moderates. Lower rates support credit creation and economic activity, though the fund notes the importance of monitoring rate impacts on credit markets. |
| Oct 24 2025 | 2025 Q3 | - | Consumer Demand, Corporate Bonds, credit spreads, high yield, interest rates | CHK | Credit markets rallied on expectations of Fed rate cuts and resilient consumer spending. Lower-rated bonds (CCC and below) outperformed as investors sought yield, while spreads tightened across sectors. Managers emphasize quality issuers and selective exposure to high yield corporates amid emerging macro weakness. |
| Jul 19 2025 | 2025 Q2 | - | credit, high yield, income, Securitized, Spreads | - | The letter emphasizes income generation through active allocation across securitized credit, high yield, and structured products amid tariff-driven volatility. Management highlights resilient fundamentals in residential mortgage credit, strong carry, and disciplined risk management as spreads normalized after April stress. Credit is positioned as an attractive source of income with selective opportunities despite macro uncertainty. |
| Mar 31 2025 | 2025 Q1 | - | - | - | |
| Jan 21 2025 | 2024 Q4 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
CreditFund focuses on elevated carry in high yield credit markets with spreads remaining range bound below 300 basis points. Manager believes high yield credit is fundamentally strong but valuations are tight, particularly in higher quality BBs. Strategy emphasizes sourcing positions with higher income levels given limited price appreciation opportunities. |
High Yield Credit Spreads Carry Investment Grade |
RatesFederal Reserve resumed rate-cutting cycle with first cut since December 2024, signaling resumption of easing. Expected three cuts of 25bps between now and first quarter 2026 as Fed responds to signs of weakness in US labor market. |
Fed Monetary Policy Labor Market Easing Liquidity | |
Resilience2025 tested the fund's thesis severely with a bankruptcy, major customer losses, and cyber-attacks, yet delivered 17.45% net returns. The manager emphasizes that edge comes from exploiting inefficiency rather than avoiding adversity, demonstrating portfolio resilience through active management. |
Adversity Active Management Drawdowns Volatility | |
| 2025 Q3 |
High Yield |
|
| 2025 Q2 |
CreditFund focuses on elevated carry in high yield credit markets with spreads remaining range bound below 300 basis points. Manager believes high yield credit is fundamentally strong but valuations are tight, particularly in higher quality BBs. Strategy emphasizes sourcing positions with higher income levels given limited price appreciation opportunities. |
High Yield Credit Spreads Carry Investment Grade |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 24, 2025 | Fund Letters | Sreeni Prabhu | CHK | Chesapeake Energy Corp. | Information Technology | Oil & Gas Exploration & Production | Bull | NASDAQ | Capex discipline, cash flow, credit spreads, energy, high yield, leverage | Login |
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