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Responsible Investing

Angel Oak Capital is Committed to Responsible Investment Practices

Angel Oak believes strongly that opportunities exist to meet or exceed its risk-return requirements  while also delivering a positive impact on society. Angel Oak is committed to providing financial security to its investors, and views the integration of Environmental, Social and Corporate Governance (ESG) considerations into firm strategies as a way to help deliver superior long-term performance. Angel Oak is guided by its Responsible Investment Policy which provides a framework to integrate ESG factors into its investment strategies. This framework ensures that Angel Oak identifies and implements investment opportunities that address the UN’s Sustainable Development Goals (SDGs) while also meeting or exceeding its benchmark performance requirements.

Our Responsible Investing Approach

Angel Oak is proud to be a signatory to the United Nations-supported Principles for Responsible Investment (PRI), an organization that is dedicated to sharing information and furthering responsible investment practices for the betterment of the asset management industry and the global community. PRI is recognized as the leading global network for investors incorporating ESG considerations into their philosophies. Their network of international investors collaborate to implement a set of six principles providing a framework for integrating ESG factors into investment analysis and ownership practices aligned with fiduciary duties:

  • To incorporate ESG issues into investment analysis and decision-making processes;
  • To be an active owner and to incorporate ESG issues into our ownership policies and practices;
  • To seek appropriate disclosure on ESG issues by the entities in which we invest;
  • To promote acceptance and implementation of the Principles within the investment industry;
  • To work with the PRI Secretariat and other signatories to enhance their effectiveness in implementing the Principles;
  • To report on our activities and progress towards implementing the Principles.

PRI Public Report

Angel Oak was a founding member of UNPRI’s Structured Products Advisory Committee. Read a paper published on incorporating ESG into securitized products investing here.

Angel Oak’s Organizational Affiliations

CDP

Angel Oak is an investor in the CDP (formerly Carbon Disclosure Project), a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states, and regions to manage their environmental impacts. Since its inception, the CDP has created a system that has resulted in unparalleled engagement on environmental issues worldwide.

 

NZAM

The Net Zero Asset Managers (NZAM) initiative is a group of international asset managers committed to supporting the goal of net zero GHG emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius, and to supporting investing aligned with that goal. The specific components of Angel Oak’s commitment can be found on NZAM’s website here.

 

PCAF

Angel Oak became a signatory to the Partnership for Carbon Accounting Financials (PCAF) in December 2021. PCAF is a global partnership of financial institutions that work together to develop and implement a harmonized approach to assess and disclose the GHG emissions associated with their loans and investments. Angel Oak is utilizing PCAF’s factor-based GHG emission calculator to help facilitate the estimation of Scope 3 emissions for residential mortgage whole loans and securitizations held in some of its public and private investment vehicles.

Responsible Investment Policy Summary

Angel Oak has emphasized responsible investment (“RI”) principles as an important component of the firm’s corporate values since its founding. Angel Oak implemented a Responsible Investment Policy in 2019 to govern its ESG-aligned investment strategies. Angel Oak has the opportunity to have a positive impact on society and the environment in all aspects of its business and operations. Angel Oak believes that taking an active approach to assessing ESG issues in investment decisions has the potential to generate enhanced performance for its investors as well as provide benefits to society as a whole.

Angel Oak invests across a broad variety of asset classes and takes its responsibility as a capital provider seriously. Angel Oak’s investment strategies will be implemented in a manner that optimizes the firm’s ability to contribute broadly to well-being and sustainable development through ESG integration, active ownership, and impact investing. Angel Oak has always encouraged the development of strategies that have a specific responsible investment or impact purpose.

Responsible Corporate Credit Strategy

Angel Oak Formally Incorporates ESG Factors into the Investment Process for a Number of its Strategies

  • Specific ESG issues addressed in initial and ongoing due diligence process
  • ESG scorecard assesses relative and absolute alignment with ESG factors
  • Periodic engagement with the invested company’s management to improve alignment over time

High Yield Opportunities ETF

Income ETF

Mortgage-Backed Securities ETF

Multi-Strategy Income Fund

Strategic Credit Fund

UltraShort Income ETF

UltraShort Income Fund

 

Angel Oak’s ESG-integrated investment strategies strongly align with the ESG factors incorporated in the United Nations Sustainable Development Goals (SDGs)

  • Lending to designated affordable housing projects
  • Loans to industries that have positive environmental and societal benefits
  • Solar/renewable energy
  • Waste management/recycling
  • Pollution and chemical remediation
  • Small Business Administration (SBA) program loans to local companies which support job creation
  • Activities that satisfy Community Reinvestment Act (CRA) requirements
  • Affordable housing loans to low-to-moderate income borrowers
  • Loans to businesses in economically distressed areas
  • Student lending programs
  • Lending to support nonprofits, foundations, and government agencies
  • Environmental insurance policy providers

Angel Oak Social Bond

Framework

Angel Oak’s Social Bond Framework governs the issuance of securitizations from the Angel Oak Mortgage Trust that Angel Oak designates as social bonds. The Framework addresses the following components of the 2020 International Capital Market Association’s Social Bond Principals:

  • Use of Proceeds
  • Process for Project Evaluation and Selection
  • Management of Proceeds
  • Reporting
  • External Reviews

Social Bond Framework

Second Party Opinion (SPO)

ISS-ESG was engaged to provide an external review in the form of a Second Party Opinion on the Social Bond Framework, and to confirm alignment with the International Capital Market Association Social Bond Principles (2020 release) and the UN SDGs.

Second Party Opinion

Annual Report

Angel Oak engages an independent reviewer each year to prepare a Social Securitized Bond Annual Report. This report evaluates each securitized bond issued under Angel Oak’s Social Bond Framework, up to and including the final year that each bond is outstanding or in case of material changes to the structure of the bond or the underlying collateral.

2023 Social Securitized Bond Annual Report

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Any views expressed on the site you are about to visit, or any articles or interviews therein are those of the participants and are not intended as a forecast or as investment recommendations. Information provided with respect to the Fund’s Portfolio Holdings, Sector Weightings, Number of Holdings, Performance and Expense Ratios are as of the dates described in the article and are subject to change at any time.

 

High Yield Opportunities ETF Prospectus 

Income ETF Prospectus

Mortgage-Backed Securities ETF Prospectus

Multi-Strategy Income Fund Prospectus

Strategic Credit Fund Prospectus

UltraShort Income ETF Prospectus

UltraShort Income Fund Prospectus

 

Return to the Angel Oak Website to access standardized performance or recent portfolio holdings or positions (High Yield Opportunities ETF Performance, Income ETF Performance, Mortgage-Backed Securities ETF Performance, Multi-Strategy Income Fund Performance, Strategic Credit Fund Performance, UltraShort Income ETF Performance, UltraShort Income Fund Performance).

 

Important Social Media Disclosures

 

Performance data current to the most recent month-end and quarter-end can be obtained by clicking the links above.

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.

 

Investing involves risk. Principal loss is possible. Some Funds can make short sales of securities, which involves the risk that losses in securities may exceed the original amount invested. Leverage, which may exaggerate the effect of any increase or decrease in the value of securities in a Fund’s portfolio, may increase the volatility of a Fund. Investments in foreign securities involve greater volatility and political, economic, and currency risks and differences in accounting methods. These risks are increased for emerging markets. Investments in fixed income instruments typically decrease in value when interest rates rise. 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. Investments in asset-backed and mortgage-backed securities include additional risks that investors should be aware of, such as credit risk, prepayment risk, possible illiquidity and default, as well as increased susceptibility to adverse economic developments. Investments in lower-rated and non-rated securities present a greater risk of loss to principal and interest than higher-rated securities do. A non-diversified fund may be more susceptible to being adversely affected by a single corporate, economic, political, or regulatory occurrence than a diversified fund. Funds will incur higher and duplicative costs when it invests in mutual funds, ETFs, and other investment companies. There is also the risk that the Funds may suffer losses due to the investment practices of the underlying funds. For more information on these risks and other risks of the Funds, please see the Prospectus.

 

ETFs may trade at a premium or discount to NAV. Shares of any ETF are bought and sold at market prices (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. The Fund is an actively managed ETF, which is a fund that trades like other publicly traded securities. The Fund is not an index fund and does not seek to replicate the performance of a specified index.

 

There is no guarantee that this or any investment strategy will succeed; the strategy is not an indicator of future performance; and investment results may vary.

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

Fund holdings and allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security.

Diversification does not guarantee a profit or protect from loss in a declining market.

Indexed annuities are complex, not suitable for all investors, and due to surrender charges it is possible to lose money.

Upside potential may be limited due to participation rates.

The Angel Oak Funds are distributed by Quasar Distributors, LLC.

 

 

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