Angel Oak UltraShort Income Fund Class A (AOUAX)

Overview

The fund focuses on investing in financial institutions by allocating at least 80% of its net assets, along with any borrowed funds for investment purposes, to securities within this sector. It aims to support investments that have a positive impact on environmental, social, and governance (ESG) factors. The fund primarily invests in debt instruments issued by financial institutions. This includes a variety of securities such as bank-issued subordinated debt, senior debt, preferred securities, high-yield securities, and trust-preferred securities (TruPS). By concentrating on financial entities that demonstrate a positive ESG influence, the fund seeks not only to provide financial returns but also to contribute to societal and environmental benefits.

Products and Services

The fund offers a diverse range of investment opportunities in the financial sector, focusing on entities with strong ESG practices. Below are the primary types of financial instruments that the fund invests in:

• Bank-Issued Sub-Debt: These are subordinated debts issued by banks, offering higher interest rates than senior debt due to their lower priority in case of liquidation. Investments in these securities aim to achieve higher yields while contributing to financial institutions that uphold positive ESG standards.
• Senior Debt: This type of debt is issued by financial institutions as well, but it has higher priority over other types of debt in case of liquidation. Investing in senior debt provides a more secure investment compared to sub-debt, while still focusing on institutions with commendable ESG impacts.
• Preferred Securities: These are securities that have characteristics of both equity and debt. Offering potential for higher dividends than common stock and priority over common stock in assets distribution upon liquidation, investments in preferred securities target financial institutions that are ESG-positive.
• High Yield Securities: Also known as junk bonds, these are debt securities issued by financial institutions with lower credit ratings, offering higher yield in exchange for higher risk. The fund's investment in high yield securities is guided by the ESG performance of the issuing institutions, aiming to combine financial returns with positive social and environmental outcomes.
• Trust-Preferred Securities (TruPS): These are hybrid securities combining features of both equity and debt, typically issued by bank holding companies. Investing in TruPS allows the fund to support financial institutions that promote beneficial ESG practices, while seeking income through dividends and interest payments.