Angel Oak Strategic Credit Fund (ASCIX)

Overview

Angel Oak Strategic Credit Fund operates as a closed-end investment fund and investment trust, primarily based in Atlanta, Georgia. The fund’s main objective revolves around strategic investment in a variety of swap instruments, including credit default swaps and other derivatives. By targeting these specific financial instruments, the fund aims to capitalize on market opportunities while managing risk effectively. Its structured approach allows investors to gain exposure to diverse financial strategies, ultimately seeking to enhance returns in the complex landscape of credit and financial markets.

Products and Services

• Credit Default Swaps: These are financial contracts that allow investors to "swap" or transfer the credit risk of a borrower to another party. The Angel Oak Strategic Credit Fund invests in these swaps to hedge against default risk and potentially profit from fluctuations in credit spreads.
• Total Return Swaps: This type of swap agreement allows one party to receive or pay the total return of a specific asset without actually owning it. The fund utilizes total return swaps to gain exposure to underlying assets while managing liquidity and investment efficiency.
• Interest Rate Swaps: Investors use interest rate swaps to exchange fixed interest rate payments for floating rate payments, or vice versa. This product provides the fund with tools for interest rate risk management and allows it to optimize the cost of borrowing or enhance yield.
• Equity Swaps: These swaps enable investors to swap the returns from an equity position, allowing Angel Oak to gain market exposure without direct ownership of the equity itself. This can enhance liquidity while enabling dynamic control of equity positions.
• Currency Swaps: This involves exchanging cash flows in one currency for cash flows in another. The fund employs currency swaps to manage foreign exchange risk and to capitalize on value disparities in currency pairs.
• Options on Swaps: The fund also trades options linked to various swap agreements, providing an additional layer of flexibility. These options allow for strategic positioning in anticipation of market movements, offering potential benefits from volatility in underlying swap contracts.
• Other Swap Types: Beyond the aforementioned products, Angel Oak explores various other types of swaps to diversify its investment portfolio. This includes innovative financial derivatives that align with the fund’s strategic objectives while mitigating risks associated with traditional investments.