Strategic Credit Fund

Overview

A FLEXIBLE APPROACH TO INVESTING

The Strategic Credit Fund is a closed-end fund that will invest across structured and corporate credit focusing on the best relative value opportunities across fixed income. The Fund’s asset allocation is not static and is expected to change over time. The Fund’s portfolio managers lead a team of sector specialists responsible for researching opportunities within their sector and making recommendations to the Fund’s portfolio managers. This top-down approach incorporates analysis of interest rates, global economic expectations, and fixed income valuation.

INVESTMENT FOCUS

At least 80% of the Fund’s net assets will be invested in the following credit related assets:

  • Corporate debt and preferred securities, with a focus on subordinated debt, senior debt and preferred securities of banks and diversified financial companies
  • Agency and non-agency residential mortgage-backed securities (RMBS)
  • Commercial mortgage-backed securities (CMBS)
  • Collateralized loan obligations (CLOs)
  • Asset-backed securities (ABS)
  • Residential loans and mortgages

Performance

Total Returns (as of 12/18/18) NAV NAV Change Dollars NAV Daily Change (%) YTD (%)
Class I NAV $24.88 ($0.02) -0.08% 5.12%
Bloomberg Barclays Aggregate Bond Index n/a n/a 0.25% -0.48%
Total Returns (as of 11/30/18) Prior Mo. YTD 1 Year 3 Years 5 Years Since Inception1
Class I NAV -0.10% 5.83% n/a n/a n/a 5.81%
Bloomberg Barclays Aggregate Bond Index 0.60% -1.79% n/a n/a n/a -1.42%
Total Returns (as of 09/30/18) Prior Qtr. YTD 1 Year 3 Years 5 Years Since Inception1
Class I NAV 2.01% 5.56% n/a n/a n/a 5.55%
Bloomberg Barclays Aggregate Bond Index 0.02% -1.60% n/a n/a n/a -1.23%

Expense Ratios*

  Class I
Gross 3.14%
Net 0.75%

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. Short-term performance, in particular, is not a good indication of the Fund’s future performance and an investment should not be made based solely on returns. Performance is net of fees. 

1The inception date of the Angel Oak Strategic Credit Fund Class I (ASCIX) was 12/26/17. Periods less than one year are cumulative. 

*Gross expense ratios are reported as of the 5/31/18 prospectus. The net expense ratios are reported as of the 1/31/18 Annual Report and are referenced in the 5/31/18 prospectus. The Adviser has contractually agreed to waive fees through 5/31/19.

Record Date Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/30/2018 1/31/2018 25.23 0.03918
2/27/2018 2/28/2018 25.10 0.03857
3/28/2018 3/29/2018 25.11 0.08517
4/29/2018 4/30/2018 25.20 0.08224
5/30/2018 5/31/2018 25.36 0.12356
6/28/2018 6/29/2018 25.34 0.14525
7/30/2018 7/31/2018 25.33 0.15009
8/30/2018 8/31/2018 25.36 0.17115
9/27/2018 9/28/2018 25.38 0.14492
10/30/2018 10/31/2018 25.32 0.14991
11/29/2018 11/29/2018 25.14 0.15473
Total 2018     1.28477    

Record Date Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
12/29/2017 12/29/2017 24.99 0.00685
Total 2017     0.00685    

Portfolio

 
RMBS1 41.7%
 
CLOs1 24.9%
 
Corporates 20.9%
 
ABS1 4.7%
 
CMBS1 3.1%
 
Cash 4.7%

As of 9/30/18.

1RMBS: Residential Mortgage-Backed Securities, CMBS: Commercial Mortgage-Backed Securities, CLOs: Collateralized Loan Obligations, ABS: Asset-Backed Securities

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

Sreeni Prabhu

SREENI PRABHU

Co-CEO and CIO

Investment industry since 1998
Read Bio

 
Matt Kennedy

Matt Kennedy, CFA®

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

 
Berkin Kologlu

BERKIN KOLOGLU

Portfolio Manager

Investment industry since 2002
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Colin McBurnette

COLIN MCBURNETTE

Portfolio Manager

Investment industry since 2007
Read Bio

 
 

Fund Facts

Share Class Ticker CUSIP Inception Gross Expense Ratio*  Net Expense Ratio*
Class I ASCIX 03464F109 12/26/17 3.14% 0.75%
Class A ASCAX 03464F208 N/A 3.39% 1.00%

*Gross and net expense ratios are reported as of the 9/6/18 prospectus. The Adviser has contractually agreed to voluntarily fees through 12/31/18.

Fund Commentary

Bloomberg Barclays 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. Please note that an investor cannot invest directly in the index; therefore its performance does not reflect a reduction for fees or expenses incurred in managing a portfolio.

It is not possible to invest directly in an index.

Investing involves risk. Principal loss is possible. The Fund’s Shares will not be listed on an exchange in the foreseeable future, if at all. The Fund’s derivative investments have risks, including the imperfect correlation between the value of such instruments and the underlying asset, rate or index, which creates the possibility that the loss on such instruments may be greater than the gain in the value of the underlying asset, rate or index; the loss of principal; the possible default of the other party to the transaction; and illiquidity of the derivative investments. The Fund may invest in illiquid securities and restricted securities. Investments in restricted securities could have the effect of increasing the amount of the Fund’s assets invested in illiquid securities if qualified institutional buyers are unwilling to purchase these securities. The Fund will be subject to risks associated with adverse political and economic developments in foreign countries, including seizure or nationalization of foreign deposits, the imposition of economic sanctions, different legal systems and laws relating to bankruptcy and creditors’ rights and the potential inability to enforce legal judgments, all of which could cause the Fund to lose money on its investments in non-U.S. securities. Changes in interest rates generally will cause the value of fixed-income instruments held by the Fund to vary inversely to such changes. Below investment grade instruments are commonly referred to as “junk” or high-yield instruments and are regarded as predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal. Lower grade instruments may be particularly susceptible to economic downturns. The price paid by the Fund for asset-backed securities, including CLOs, the yield the Fund expects to receive from such securities and the average life of such securities are based on a number of factors, including the anticipated rate of prepayment of the underlying assets. Mortgage-backed securities are subject to the general risks associated with investing in real estate securities; that is, they may lose value if the value of the underlying real estate to which a pool of mortgages relates declines. See the prospectus for a more detailed description of Fund risks.