Angel Oak

The risk-adjusted performance of the firm's open-end and exchange-traded funds does not stack up well versus their competitors, with an average overall Morningstar Rating of 2.0 stars. Open-end and exchange-traded fund fees are a weakness at the firm, contributing negatively to the rating. On average, the firm charges fees on its funds that are in the second most-expensive quintile of category peers. With the current market environment of fee compression, this is cause for concern, as investors may flock to alternate asset managers over time to get a better deal. Angel Oak has had high portfolio management turnover over the past five years compared with peers, detracting from its rating, as long-term stability tends to go together with positive results.