Community Banking Sector and Financials Income Fund Overview Call Replay

Angel Oak’s experienced Financials team recently gave an update on the community banking sector and explained why they believe some of the best investment opportunities over the next 12-24 months exist within the financial sector. The team also provided an overview of the Angel Oak Financials Income Fund and shared why they feel it is uniquely positioned to capitalize on both the niche market characteristics and current dislocations that exist within the community bank debt sector. 

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Navid Abghari

Senior Portfolio

Johannes Palsson

Senior Portfolio

Cheryl Pate, CFA®

Senior Portfolio

*#1 Fund in Category for the 1-year period ending 12/31/18.

Morningstar Rankings represent a fund’s total-return rank relative to all funds that have the same Morningstar Category. The highest rank is 1 and the lowest is based on the total number of funds ranked in the category. It is based on the Morningstar total return, which includes both income and capital gains or losses and is not adjusted for sales charges or redemption fees. The fund was ranked number one out of 250 funds in the Corporate Bond category for the one year period ending 12/31/18.

Alpha: Measures the difference between a fund’s actual returns and its expected performance, given its level of risk (as measured by beta). A positive alpha figure indicates the fund has performed better than its beta would predict. In contrast, a negative alpha indicates a fund has underperformed, given the expectations established by the fund’s beta.

Basis Points (bps): One hundredth of one percent and is used to denote the percentage change in a financial instrument.

Beta: A measure of a stock’s risk of volatility compared to the overall market.

Bloomberg Barclays U.S. Investment Grade Corporate Index: An index that covers the publicly issued U.S. corporate and specified foreign debentures and secured notes that meet the specified maturity, liquidity, and quality requirements. To qualify, bonds must be SEC-registered.

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.

Bloomberg Barclays U.S. Corporate High Yield Bond Index: An unmanaged market value-weighted index that covers the universe of fixed rate, non-investment grade debt.

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

Forward Price/Earnings Ratio: A ratio that divides the current share price by the estimated future per share.

Spread: The difference in yield between LIBOR and a debt security with the same maturity but of lesser quality.

M&A: Mergers & Acquisitions.

MOE: Merger of Equals.

S&L: Savings & Loan.

P&L: Profit & Loss.

NDA: Non-Disclosure Agreement.

It is not possible to invest directly in an index.

To view the most recent performance for the Angel Oak Financials Income Fund click here.

Current performance may be lower or higher than the performance data quoted. Performance quoted is past performance and 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 to the most recent month end can be obtained by calling 855-751-4324.

Fund holdings and/or sector allocations are subject to change at any time and are not recommendations to buy or sell any security.

Angel Oak Financials Income Fund Top Ten Holdings (excluding cash) as of 12/31/18:

Name Weight
FINS 2015-1 PFD 5.3%
Financial Institution Note Securitization 2015-1 Ltd 3.0%
United Insurance Holdings Corp 2.5%
Fidelity Financial Corp 2.4%
Ameris Bancorp 2.4%
First National of Nebraska Inc 2.4%
RBB Bancorp 2.3%
Silver Queen Financial Services Inc 2.3%
Kingstone Cos Inc 2.2%
MB Financial Bank NA 2.2%

References to other funds should not be interpreted as an offer of these securities.

#1 Fund in Category for 2018*

Morningstar Category: Corporate Bond
Number of Funds in Category: 250
Criteria: Absolute Ranking