High Yield Opportunities Fund

Overview

The High Yield Opportunities Fund seeks to provide current income. Capital appreciation is a secondary objective. The goal of the Fund is to maximize long-term risk adjusted returns relative to the market with an emphasis on minimizing downside risk. The Fund is diversified and invests principally in high-yield corporate bonds rated below investment grade. The Fund may purchase bonds of any maturity, but will normally have a dollar-weighted average maturity between two and fifteen years. The Fund is managed against the Bank of America Merrill Lynch U.S. High Yield Index.

Performance

Total Returns (as of 11/22/2017) NAV NAV Change Dollars NAV Daily Change (%) YTD (%)
Class I NAV $11.94 $0.01 0.08% 7.18%
Class A NAV $11.98 $0.01 0.08% 7.03%
MOP $12.26 $0.01 0.08% 4.62%
ICE BofA Merrill Lynch High Yield Master II n/a n/a 0.09% 6.99%

Total Returns (as of 10/31/2017) Prior Mo. YTD 1 Year 3 Years 5 Years Since Inception1
Class I NAV 0.82% 7.17% 9.90% 6.15% 6.35% 10.01%
Class A NAV 0.72% 6.93% 9.52% 5.88% 6.07% 9.75%
MOP -1.58% 4.52% 7.04% 5.08% 5.58% 9.46%
BofA Merrill Lynch High Yield Master II 0.39% 7.46% 9.14% 5.60% 6.29% 12.57%

Total Returns (as of 9/30/2017) Prior Qtr. YTD 1 Year 3 Years 5 Years Since Inception1
Class I NAV 1.88% 6.29% 9.37% 6.15% 6.22% 10.01%
Class A NAV 1.81% 6.17% 9.18% 5.87% 5.98% 9.76%
MOP -0.45% 3.78% 6.71% 5.07% 5.50% 9.46%
BofA Merrill Lynch High Yield Master II 2.04% 7.05% 9.06% 5.87% 6.38% 12.65%

Expense Ratios

  Class A Class I
Gross 1.34% 1.08%
Net 0.90% 0.65%

Performance data quoted represents past performance. Past performance is no guarantee of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than what is stated.

1 The inception date of the Angel Oak High Yield Opportunities Fund I Class (ANHIX) was 3/31/09, while the inception date of the A Class (ANHAX) was 7/31/12. The returns of ANHAX shown for periods prior to the inception date include the returns of ANHIX and are adjusted to reflect any applicable sales charges and the higher annual operating expenses of Class A.

2Returns shown for A Shares at MOP reflect the maximum sales load of 2.25%.

*Gross expense ratios are reported as of the 5/31/17 prospectus. The net expense ratios are reported as of the 1/31/17 Annual Report and are referenced in the 5/31/17 prospectus. The Adviser has contractually agreed to waive fees through 5/31/18.

 

GROWTH OF $10,000 SINCE INCEPTION AS OF 9/30/17

anhax-growth-of-10k-9-30-17

This chart illustrates the performance of a hypothetical $10,000 investment made in Angel Oak High Yield Opportunities Fund (ANHIX), I Shares since inception on 3/31/09. It assumes reinvestment of capital gains and dividends. This chart is not intended to imply any future performance.

1Bank of America Merrill Lynch U.S. High Yield Index: Tracks the performance of below investment grade, but not in default, US dollar denominated corporate bonds publicly issued in the US domestic market, and includes issues with a credit rating of BBB or below, as rated by Moody’s and S&P.

Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/30/2017 1/31/2017 11.92 0.02103  –  –
2/27/2017 2/28/2017 11.98 0.04988  –  –
3/30/2017 3/31/2017 11.89 0.05618  –  –
4/27/2017 4/28/2017 11.94 0.05323  –  –
5/30/2017 5/31/2017 11.97 0.05565  –  –
6/29/2017 6/30/2017 11.93 0.05364  –  –
7/30/2017 7/31/2017 12.00 0.05541  –  –
8/30/2017 8/31/2017 11.95 0.05542  –  –
9/28/2017 9/29/2017 11.98 0.05391  –  –
10/30/2017 10/31/2017 12.01 0.05590  –  –
Total 2017     0.51025    
Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/28/2016 1/29/2016 10.50 0.04840  –  –
2/26/2016 2/29/2016 10.41 0.05320  –  –
3/30/2016 3/31/2016 10.80 0.05440  –  –
4/28/2016 4/29/2016 11.06 0.05297  –  –
5/27/2016 5/31/2016 11.08 0.06324  –  –
6/29/2016 6/30/2016 11.18 0.04321  –  –
7/28/2016 7/29/2016 11.47 0.04476  –  –
8/30/2016 8/31/2016 11.68 0.04605  –  –
9/29/2016 9/30/2016 11.65 0.04542  –  –
10/30/2016 10/31/2016 11.65 0.04670  –  –
11/29/2016 11/30/2016 11.56 0.06991  –  –
12/27/2016* 12/28/2016* 11.71 0.07210  –  –
12/29/2016 12/30/2016 11.72 0.06867  –  –
Total 2016     0.70903    

*Due to our annual tax review, there was additional earned income that was required to be paid out prior to the calendar year end.

Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/30/2015 1/30/2015 11.60 0.04670  –  –
2/26/2015 2/27/2015 11.84 0.04350  –  –
3/30/2015 3/31/2015 11.73 0.05690
4/29/2015 4/30/2015 11.78 0.04900  –  –
5/28/2015 5/29/2015 11.79 0.05250  –  –
6/29/2015 6/30/2015 11.62 0.05210  –  –
7/30/2015 7/31/2015 11.49 0.05310  –  –
8/28/2015 8/31/2015 11.31 0.05630  –  –
9/29/2015 9/30/2015 11.04 0.04620  –  –
10/29/2015 10/30/2015 11.33 0.05390  –  –
11/27/2015 11/30/2015 11.07 0.05320  –  –
12/30/2015 12/31/2015 10.76 0.05932  –  –
Total 2015     0.62272    
Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/30/2014 1/31/2014 12.17 0.05630  –  –
2/27/2014 2/28/2014 12.38 0.04880  –  –
3/28/2014 3/31/2014 12.34 0.06110  –  –
4/29/2014 4/30/2014 12.37 0.05410  –  –
5/29/2014 5/30/2014 12.47 0.04960  –  –
6/27/2014 6/30/2014 12.51 0.05410  –  –
7/30/2014 7/31/2014 12.30 0.06040  –  –
8/28/2014 8/29/2014 12.41 0.04850  –  –
9/29/2014 9/30/2014 12.11 0.05130  –  –
10/30/2014 10/31/2014 12.14 0.05440  –
11/27/2014 11/28/2014 11.90 0.04650  –
12/30/2014 12/31/2014 11.53 0.05689 0.02123 0.13845
Total 2014     0.64199  0.02123 0.13845
Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
2/27/2013 2/28/2013 12.37 0.05580  –  –
3/27/2013 3/28/2013 12.43 0.06060  –  –
4/29/2013 4/30/2013 12.62 0.05470  –  –
5/30/2013 5/31/2013 12.46 0.06520  –  –
6/27/2013 6/28/2013 12.08 0.05260  –  –
7/30/2013 7/31/2013 12.24 0.06270  –  –
8/29/2013 8/30/2013 12.05 0.05780  –  –
9/27/2013 9/30/2013 12.10 0.05830  –  –
10/30/2013 10/31/2013 12.39 0.06040  –  –
11/28/2013 11/29/2013 12.39 0.05750  –  –
12/30/2013 12/31/2013 12.16 0.05930 0.01900 0.21700
Total 2013     0.64490 0.01900 0.21700
Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
8/30/2012 8/31/2012 12.32 0.05990  –  –
9/27/2012 9/28/2012 12.44 0.05170  –  –
10/30/2012 10/31/2012 12.41 0.06630  –  –
11/29/2012 11/30/2012 12.43 0.05910  –  –
12/28/2012 12/31/2012 12.34 0.06610
Total 2012     0.30310 0.04490 0.15000
Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/30/2017 1/31/2017 11.89 0.02402  –
2/27/2017 2/28/2017 11.94 0.05234  –
3/30/2017 3/31/2017 11.86 0.05809  –
4/27/2017 4/28/2017 11.91 0.05578  –
5/30/2017 5/31/2017 11.94 0.05794  –
6/29/2017 6/30/2017 11.89 0.05617  –
7/30/2017 7/31/2017 11.96 0.05785  –  –
8/30/2017 8/31/2017 11.91 0.05819  –  –
9/28/2017 9/29/2017 11.94 0.05602  –  –
10/30/2017 10/31/2017 11.98 0.05811  –  –
Total 2017     0.53451    

Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/28/2016 1/29/2016 10.48 0.05150  –  –
2/26/2016 2/29/2016 10.39 0.05670  –  –
3/30/2016 3/31/2016 10.77 0.05590  –  –
4/28/2016 4/29/2016 11.03 0.05514  –  –
5/27/2016 5/31/2016 11.05 0.06546  –  –
6/29/2016 6/30/2016 11.15 0.04544  –  –
7/28/2016 7/29/2016 11.44 0.04707  –  –
8/30/2016 8/31/2016 11.65 0.04847  –  –
9/29/2016 9/30/2016 11.62 0.04772  –  –
10/30/2016 10/31/2016 11.61 0.04909  –  –
11/29/2016 11/30/2016 11.53 0.07036  –  –
12/27/2016* 12/28/2016* 11.68 0.07279  –  –
12/29/2016 12/30/2016 11.69 0.07103  –  –
Total 2016     0.73667    

*Due to our annual tax review, there was additional earned income that was required to be paid out prior to the calendar year end.

Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/30/2015 1/30/2015 11.58 0.05020  –  –
2/26/2015 2/27/2015 11.82 0.04680  –  –
3/30/2015 3/31/2015 11.71 0.06070
4/29/2015 4/30/2015 11.75 0.05270  –  –
5/28/2015 5/29/2015 11.76 0.05600  –  –
6/29/2015 6/30/2015 11.59 0.05600  –  –
7/30/2015 7/31/2015 11.47 0.05690  –  –
8/28/2015 8/31/2015 11.28 0.06000  –  –
9/29/2015 9/30/2015 11.01 0.04980  –  –
10/29/2015 10/30/2015 11.30 0.05730
11/27/2015 11/30/2015 11.04 0.05680  –  –
12/30/2015 12/31/2015 10.73 0.06358  –  –
Total 2015     0.66678    
Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/30/2014 1/31/2014 12.18 0.05930  –  –
2/27/2014 2/28/2014 12.37 0.05330  –  –
3/28/2014 3/31/2014 12.32 0.06300  –  –
4/29/2014 4/30/2014 12.35 0.05620  –  –
5/29/2014 5/30/2014 12.45 0.05240  –  –
6/27/2014 6/30/2014 12.50 0.05700  –  –
7/30/2014 7/31/2014 12.29 0.06130  –  –
8/28/2014 8/29/2014 12.39 0.05120  –  –
9/29/2014 9/30/2014 12.09 0.05640  –  –
10/30/2014 10/31/2014 12.13 0.05830  –  –
11/27/2014 11/28/2014 11.88 0.05000  –  –
12/30/2014 12/31/2014 11.51 0.06091 0.02123 0.13845
Total 2014     0.67931 0.02123 0.13845
Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/30/2013 1/31/2013 12.39 0.06000    
2/27/2013 2/28/2013 12.37 0.05810  –  –
3/27/2013 3/28/2013 12.43 0.06290  –  –
4/29/2013 4/30/2013 12.62 0.05710  –  –
5/30/2013 5/31/2013 12.46 0.06780  –  –
6/27/2013 6/28/2013 12.08 0.05490  –  –
7/30/2013 7/31/2013 12.24 0.06550  –  –
8/29/2013 8/30/2013 12.05 0.06030  –  –
9/27/2013 9/30/2013 12.09 0.06120  –  –
10/30/2013 10/31/2013 12.39 0.06260  –  –
11/28/2013 11/29/2013 12.39 0.05790  –  –
12/30/2013 12/31/2013 12.16 0.06220 0.01900 0.21700
Total 2013     0.73050 0.01900 0.21700
Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/30/2012 1/31/2012 12.02 0.05520
2/28/2012 2/29/2012 12.22 0.06360
3/29/2012 3/30/2012 12.12 0.06140
4/27/2012 4/30/2012 12.15 0.06580
5/30/2012 5/31/2012 11.92 0.06840
6/28/2012 6/29/2012 12.11 0.05770
7/30/2012 7/31/2012 12.26 0.06600
8/30/2012 8/31/2012 12.32 0.06100  –  –
9/27/2012 9/28/2012 12.44 0.05410  –  –
10/30/2012 10/31/2012 12.40 0.06910  –  –
11/29/2012 11/30/2012 12.43 0.06160  –  –
12/28/2012 12/31/2012 12.33 0.06870 0.04490 0.15000
Total 2012     0.75260 0.04490 0.15000
Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/28/2011 1/31/2011 12.06 0.06490
2/25/2011 2/28/2011 12.14 0.06400
3/30/2011 3/31/2011 12.06 0.07810
4/28/2011 4/29/2011 12.17 0.06560
5/30/2011 5/31/2011 12.17 0.07470
6/29/2011 6/30/2011 12.01 0.07090
7/28/2011 7/29/2011 12.11 0.06100
8/30/2011 8/31/2011 11.68 0.07050  –  –
9/29/2011 9/30/2011 11.35 0.06660  –  –
10/28/2011 10/31/2011 11.79 0.07060  –  –
11/29/2011 11/30/2011 11.62 0.04870  –  –
12/29/2011 12/30/2011 11.77 0.07160 0.00770 0.05040
Total 2011     0.80720 0.00770 0.05040
Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/28/2010 1/29/2010 11.72 0.07180
2/25/2010 2/26/2010 11.64 0.07010
3/30/2010 3/31/2010 11.84 0.09000
4/29/2010 4/30/2010 12.01 0.07310
5/27/2010 5/28/2010 11.59 0.06930
6/29/2010 6/30/2010 11.66 0.07930
7/29/2010 7/30/2010 12.01 0.06330
8/30/2010 8/31/2010 11.96 0.07830  –  –
9/29/2010 9/30/2010 12.24 0.06880  –  –
10/28/2010 10/29/2010 12.50 0.06830  –  –
11/29/2010 11/30/2010 12.22 0.07470  –  –
12/30/2010 12/31/2010 11.92 0.08310 0.37790 0.03550
Total 2010     0.89010 0.37790 0.03550
Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
4/29/2009 4/30/2009 10.43 0.02580
5/28/2009 5/29/2009 10.68 0.07060
6/29/2009 6/30/2009 10.79 0.08130
7/30/2009 7/31/2009 11.22 0.07600
8/28/2009 8/31/2009 11.23 0.07660  –  –
9/29/2009 9/30/2009 11.62 0.07890  –  –
10/29/2009 10/30/2009 11.62 0.08040  –  –
11/27/2009 11/30/2009 11.61 0.08030  –  –
12/30/2009 12/31/2009 11.72 0.08550 0.08320
Total 2009     0.65540 0.08320  
  Fund Characteristics
Effective Duration 3.3 years
Average Coupon (%) 6.70
Daily Correlation with Index  0.9

As of 9/30/2017

Average Coupon: The weighted average annual coupon for the securities in the Fund. Average Life: The length of time the principal of a debt issue is expected to be outstanding. Average life is an average period before a debt is repaid through amortization or sinking fund payments.

Effective Duration: Measures a portfolio’s sensitivity to changes in interest rates. Generally, the longer the effective duration, the greater the price change relative to interest rate movements

Correlation: A statistical measure of how two securities move in relation to another. Index used for comparison is the Bank of America Merrill Lynch U.S. High Yield Index

Portfolio

anhax-cedit-quality-9-30-17.png

 
BBB 0.0%
 
BB 44.3%
 
B 46.2%
 
CCC 4.9%
 
<CCC 0.0%
 
Unrated 0.5%
 
Cash 4.1%

As of 9/30/2017

The portfolio is actively managed. Holdings and weightings are subject to change daily and are provided for informational purposes only and should not be deemed as a recommendation to buy or sell the securities mentioned. Fund composition is based on net assets. Please scroll down to see important information about the Fund. Ratings determined by S&P. 

Sector Detail Fund Index
Basic Industry 24.9% 12.1%
Energy 18.6% 13.9%
Capital Goods 7.7% 5.4%
Financial Services 7.2% 3.8%
Tech & Electronics 3.8% 6.1%
Consumer Goods 3.9% 2.5%
Automotive  3.1% 2.3%
Media 4.0% 11.5%
Services 3.1% 5.3%
Healthcare 2.3% 9.8%

As of 9/30/2017

The portfolio is actively managed. Holdings and weightings are subject to change daily and are provided for informational purposes only and should not be deemed as a recommendation to buy or sell the securities mentioned. Fund composition is based on net assets. Please scroll down to see important information about the Fund. 

Management Team

>

Matt Kennedy

Matt Kennedy, CFA®

Portfolio Manager
Head of Corporate Credit
Investment industry since 1995
Read Bio

 

 

Matt Kennedy

Nichole Hammond, CFA®

Senior Portfolio Manager

Investment industry since 2000
Read Bio

 

 

Sreeni Prabhu

Sreeni Prabhu

Chief Investment Officer

Investment industry since 1998
Read Bio

 

 

Berkin Kologlu

Berkin Kologlu

Portfolio Manager

Investment industry since 2002
Read Bio

 

 

Fund Facts

Share Class Ticker CUSIP Inception Gross Expense
Ratio
Net Expense
Ratio
Class A ANHAX 03463K703 3/31/2009  1.34% 0.90%
Class I ANHIX 03463K885 7/31/2012 1.08% 0.65%

*Gross expense ratios are reported as of the 5/31/17 prospectus. The net expense ratios are reported as of the 1/31/17 Annual Report and are referenced in the 5/31/17 prospectus. The Adviser has contractually agreed to waive fees through 5/31/18.

Fund Commentary

The Fund is the successor to the investment performance of the Predecessor High Yield Fund as a result of the reorganization of the Predecessor High Yield Fund into the Fund on April 22, 2016. Accordingly, the performance information shown for periods prior to April 22, 2016 is that of the Predecessor High Yield Fund’s Institutional Class and Class A shares, respectively. The Predecessor High Yield Fund was managed by the same portfolio managers as the Fund and had substantially the same investment objective and strategies as the Fund. Effective April 22, 2016, a sales charge (load) applies to purchases of Class A shares (subject to the exceptions described in the Prospectus), and performance of the Class A shares shown prior to April 22, 2016 has been adjusted to reflect the applicable sales charges.

**As of 10/31/17, the Angel Oak High Yield Opportunities Fund (ANHIX) received a Morningstar rating based on risk-adjusted returns of 4 stars overall, 5 stars for the three-year period and 4 stars for the five-year period among 609, 609, and 489 high yield bond funds. The Morningstar Rating™ for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating™ for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating™ metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

© 2017 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

Bank of America Merrill Lynch U.S. High Yield Index: Tracks the performance of below investment grade, but not in default, US dollar denominated corporate bonds publicly issued in the US domestic market, and includes issues with a credit rating of BBB or below, as rated by Moody’s and S&P. It is not possible to invest directly in an index.

30-Day SEC Yield: The SEC yield is an annualized yield based on the most recent 30-day period. Subsidized yields reflect fee waivers in effect. Without such waivers, yields would be reduced. Unsubsidized yields do not reflect fee waivers in effect. The SEC yield does not include prepayment income, which could be a significant contribution to yield.

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 non-rated securities present a greater risk of loss to principal and interest than 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 lose more than the amount invested. The Fund may make short sales of securities, which involves the risk that losses may exceed the original amount invested.