This bond ETF actively selects below-investment-grade (high-yield) corporate bonds and structured credit in pursuit of high current income. It does not track a specific index. Instead, the management team adjusts holdings, sectors, and maturities at its discretion.

It suits medium-risk bond investors who want monthly distribution cash flow and relatively high interest income.

It is an actively managed ETF run by Angel Oak Capital.

The fund holds a diversified mix of sectors and maturities, centered on corporate bonds rated below investment grade and structured credit such as asset-backed securities. The management team selects, at its discretion, areas where market inefficiencies exist, seeking excess returns and stable interest income together.

• An active credit selection strategy rather than passive index tracking
• A broad investment scope spanning corporate bonds and structured credit

Assets under management (AUM) stand at $116.2M, and the total expense ratio is 0.55% per year.

The bond ETFs shown alongside it in the table differ in the credit quality and structure of their holdings, so differences may appear in dividend yield and volatility profile.

Given the nature of high-yield bonds, prices fluctuate with credit spreads and the interest rate environment, and over the long term interest income tends to account for a large share of cumulative returns.

Alongside demand from income investors seeking monthly distribution cash flow, fund flows tend to move with changes in the credit market environment and the direction of interest rates, and inflows tend to strengthen when credit spreads are tightening.

Its relatively high monthly distribution income is its strength, while the credit and volatility risks typical of below-investment-grade bonds are its weakness.

Products shown alongside it in the table, such as BNDX and IUSB, are broad bond ETFs focused on investment-grade debt. They carry lower credit risk but also tend to offer relatively lower distribution yields, while products such as BINC, PYLD, and JCPB use a similar strategy of actively holding credit across various sectors. For an alternative more concentrated in high-yield corporate bonds, there are traditional core high-yield ETFs such as HYG and JNK, and for bank loan exposure, BKLN is also worth comparing.

Here are the points to review before investing in AOHY. Given the nature of an active high-yield strategy, investors should weigh distribution appeal against credit risk, and should also look at the fee level and liquidity in advance.

When credit spreads widen or the economy slows, the price declines typical of below-investment-grade bonds can become larger. Because the fund is actively managed, results can vary depending on how well the management team selects securities.

This is an active high-yield bond ETF suited to investors who want high monthly distribution income and can tolerate credit risk. If stability is the priority, alternatives focused on investment-grade debt, such as BNDX and IUSB, may be more appropriate.