Angel Oak Capital Advisors

Corporate Social Responsibility Report 2021

Message from Our Managing Partner
Angel Oak is excited to share our 2021 Corporate Social Angel Oak is justifiably proud of our accomplishments in 2021
Responsibility Report, which builds on the content presented in that are helping create a more sustainable future, and we
the 2020 version and reflects the many initiatives that we have remain focused on additional accomplishments through our ESG
launched or completed since the inaugural edition of this report. integration program in 2022 and beyond.
We have made tremendous progress in extending the scope
of our firm-wide ESG integration program over the past year. Thank you for your continued support.
Becoming signatories to the UN’s Principles for Responsible
Investment in 2017 was an important step in framing our Sincerely,
approach to embedding ESG into our investment strategies and
corporate activities. In 2021, we also solidified our commitment
to a sustainable future by becoming members of the Net Zero
Asset Managers Initiative, joining over 220 other signatories
representing USD 57 trillion in AUM sharing the common goal of
net zero greenhouse gas (GHG) emissions by 2050, in line with
Sreeni Prabhu
global efforts to limit warming to 1.5 degrees Celsius.
Managing Partner
Co-CEO & Group CIO
In addition to our longer-term aspirations, we took tangible
steps in 2021 to ensure that our business practices resulted in
positive environmental and social impact. Angel Oak funded a
three-year initiative in partnership with the Carbon Disclosure
Project to promote climate risk disclosures in the community
bank space. Angel Oak Mortgage Trust issued two securitizations
that were designated as social bonds, marking the first issuance
of a non-agency Social RMBS in the U.S. We also became
founding members of ATL Action for Racial Equity, an initiative
sponsored by the Metro Atlanta Chamber of Commerce and
launched in February 2021 to help address the ongoing effects of
systemic racism impacting the Black community.

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2021 Corporate Social
Responsibility Report
This report, which focuses on Angel Oak Capital Advisors’ ESG
(environmental, social and governance) integration program
across our investment strategies and our community engagement
in 2021, reflects the commitment from each of our associates
to engage in initiatives to create positive environmental
and social impact. In 2021, we also expanded the scope of
the report to incorporate Angel Oak Companies, our shared
services organization. As Angel Oak increases our commitment
to supporting our associates and communities, future updates
to this report will also highlight the efforts of our affiliated
mortgage lending companies. Please contact Rob McDonough,
Director of ESG and Regulatory Initiatives, for additional
information regarding any aspects of this report.

Angel Oak Capital Advisors Guiding Principles

• Business Conduct and Ethics: Angel Oak conducts business

with uncompromising honesty and integrity, adhering to all
laws, regulations, and our SEC-compliant Code of Ethics.

• Our People: Our ability to attract, develop, reward, and

retain talented employees who are committed to responsible
investment practices is central to our business strategy and
critical to our future success.

• Our Investors: Angel Oak’s core mission includes supporting

both the financial and sustainability goals and objectives of
our investors.

• Our Company: Angel Oak’s corporate governance policies

balance the interests of the firm’s stakeholders, such as
investors, associates, vendors, regulators, and the community
as a whole.

• Our Community: Being an engaged member of our community

is important to us, which is why Angel Oak supports a number
of organizations that do vital work benefiting education,
the arts, and those in need in the Greater Atlanta area and
nationwide.

• Health and Safety: We have a responsibility to do everything

we can to assure that our associates are in a safe, healthy,
and positive workplace.

• Environment: We are acutely aware of our responsibility to

reduce our environmental footprint wherever possible with
our business activities and physical premises.

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ESG Integration TCFD CLIMATE RISK DISCLOSURE FRAMEWORK

1. Governance: The organization’s governance around climate-

Angel Oak has embarked on a journey to integrate ESG principles
related risks and opportunities.
across the organization’s activities. ESG is an umbrella concept
2. Strategy: The actual and potential impacts of climate-related
that incorporates three pillars:
risks and opportunities on the organization’s businesses,
strategy, and financial planning.
→ Environmental Sustainability
3. Risk Management: The processes used by the organization to
→ Social Responsibility identify, assess, and manage climate-related risks.
4. Metrics and Targets: The metrics and targets used to assess
→ Governance
and manage relevant climate-related risks and opportunities.

The efforts that were undertaken by Angel Oak in 2021 for

each of these pillars and the progress that was made are
summarized below. GOVERNANCE

I. ENVIRONMENTAL SUSTAINABILITY
STRATEGY

Angel Oak is a formal supporter of the Task Force on Climate-

Related Financial Disclosures (TCFD), which encourages its
RISK MANAGEMENT
supporters to report certain environmental data related to
their operations and activities. The TCFD has issued a series of
recommendations for climate risk disclosures aligned with their
widely accepted framework integrating governance, strategy,
risk management, and targets and metrics. METRICS AND
TARGETS

Angel Oak is in the process of

implementing a formal, TCFD- Angel Oak is in the process of implementing a formal, TCFD-
based climate risk disclosure based climate risk disclosure framework for the greenhouse gas
(GHG) emissions that result from our operations as well as for
framework for the greenhouse the financed emissions that are an inherent outcome of investing

gas (GHG) emissions that result our clients’ capital. In 2021, we completed the initial calculation
of our Scope 1, 2, and 3 GHG emissions based on industry
from our operations as well as best practices for asset managers, and those calculations are
presented below. As signatories to the Net Zero Asset Managers
for the financed emissions that Initiative (NZAM), we are also committed to working with our

are an inherent outcome of invested institutions to reduce Scope 3 financed emissions in

support of the goal of net zero GHG emissions by 2050 or sooner
investing our clients’ capital. to limit global warming to 1.5 degrees Celsius.

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GREEN HOUSE GAS (GHG) EMISSIONS
CO2 FACTOR CH4 FACTOR N2O FACTOR
VEHICLE TYPE
(KG/MILE) (G/MILE) (G/MILE)
The following climate risk metrics represent the relevant Scope
1, 2, and 3 GHG emissions associated with our operations for Air Travel - Short
0.206 0.0071 0.0065
all of 2021. Angel Oak will monitor these levels and evaluate (< 300 miles)
strategies to reduce or eliminate these emissions over time. Air Travel - Medium
0.131 0.0006 0.0042
(300 - 2,300 miles)
Scope 1 – Direct Emissions from Sources Owned or Controlled by
Air Travel - Long
a Company 0.161 0.0006 0.0051
Haul (≥ 2,300 miles)
Due to the general nature of the asset management business CO2 (kg) CH4 (g) N2O (g)
and the specific business practices adopted by Angel Oak, Scope
Total 146,206 670 4,664
1 direct GHG emissions from operations owned or controlled
by the firm are de minimis. In alignment with industry best All kg Total kg Total kg Total kg
practices for peer organizations, Angel Oak reports zero Scope 1
146,212 146,206 0.7 4
GHG emissions.
Converted to Metric
Scope 2 – Indirect Emissions from Purchased Electricity, Steam, Tons = 146
Heat, and Cooling

Angel Oak Capital Advisors leases the office space utilized by EMPLOYEE COMMUTE
our associates, and utilities are aggregated into the overall lease
rates paid by the firm. Data provided by the property manager of Many Angel Oak associates commute to corporate offices by
the LEED Gold-Certified building that is currently leased for most a variety of methods, including car, train, and/or bus. The
of Angel Oak Capital’s operations provided pro-rated electricity Environmental Protection Agency maintains a database that
utilization based on the amount of leased space Angel Oak enables the calculation of emissions associated with each
occupies relative to the entire leasable space in the building. mode of transportation based on the distance traveled during
These data were used to estimate that Angel Oak’s emissions the commute. The results of an internal survey of Angel Oak
associated with electricity consumption based on SRSO Regional associates generated the following estimated emissions
Power Grid data in 2021 were 106 metric tons. associated with employee commuting.

TOTAL EMISSIONS – PURCHASED ELECTRICITY CATEGORY EMISSIONS

CO2 234,017 Emissions from cars (g) 73,987,704
CH4 16 Emissions from trains/buses (g) 4,712,338

N2O 2 Emissions from cars (kg) 73,988

Total (lbs) 234,037 Emissions from trains/buses (kg) 4,712

Total in Metrics tons 106 Total Emissions (cars + trains/buses) (kg) 78,700

Total Emissions (metric tons) 79

Scope 3 – All Other Emissions Associated with a Company’s

Activities FINANCED EMISSIONS

Angel Oak’s Scope 3 emissions related to operations are Angel Oak’s investment strategies provide capital to companies
primarily attributable to company-related air travel and and sovereign entities, which produce emissions related to
employee commutes to our corporate offices. Our investment their activities and operations. These emissions are referred
strategies also finance the emissions of corporate and sovereign to as “financed emissions” and represent the Scope 1 and 2
issuers of securities. emissions produced by these entities. The aggregate of these
financed emissions across our investment strategies represents
CORPORATE AIR TRAVEL one component of Angel Oak’s Scope 3 GHG emissions. As
a signatory to the NZAM Initiative, we are committed to
Angel Oak’s air travel is managed and monitored by a travel developing and implementing a formal plan by October 15, 2022,
agency that captures the emissions associated with air flights that will encourage our invested institutions to implement net
according to an industry standard methodology. In 2021, Angel zero carbon emissions strategies by 2050, with interim targets
Oak’s corporate air travel produced 146 metric tons of emissions. to be reached by 2030.

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RECYCLING PROGRAMS

Angel Oak continues to receive strong evaluations from our

implementation of Shred-It, an information security solution
provided by Stericycle Inc., which provides services that include
document destruction, hard drive destruction, and specialty item
shredding. Our recycling metrics for 2021 reflect the higher level
of activity in our offices as a result of our COVID-related return-
to-work policy compared to 2020, when many of our associates
were working from home. Angel Oak will continue to evaluate
our operations to identify additional ways to reduce waste and
water utilization.

CATEGORY 2019 2020 2021

Pounds 237,479 43,518 53,876
Tons 119 22 27

Trees Saved 2,019 370 458

Cubic Yards of Landfill Saved 356 65 81

Barrels of Oil Saved 237 44 54

Gallons of Water Saved 831,177 152,313 188,566 Desiree La Roche and Quinton Emerson at a Project Hope toy drive.

The Community Relations Committee leads our efforts to

II. SOCIAL RESPONSIBILITY coordinate participation in a variety of charitable and non-
profit events at Angel Oak Capital Advisors and our affiliated
INVESTING IN THE COMMUNITY companies. The Committee’s efforts in 2021 were essential in
identifying and providing resources to the organizations listed
Angel Oak Companies provided over $77,000 of direct donations above. These resources included both financial support as
to eight local and national charitable organizations in 2021. well as paid time off (PTO) for Angel Oak associates to
These institutions received support based on suggestions from participate in various initiatives and programs sponsored by
associates across Angel Oak Capital Advisors and our affiliated these organizations.
companies. Our devotion to these institutions expresses our
corporate culture of commitment as well as the passions of our DIVERSITY, EQUITY AND INCLUSION (DEI)
individual associates, many of whom devoted hundreds of hours
to these organizations. The Diversity, Equity and Inclusion (DEI) Committee was created
in 2020 to provide a foundation for our efforts to acknowledge
Angel Oak will continue to take an active interest in supporting and enhance our diversity as a vital asset of the organization.
various charities to care for our community. The positive impact The key objectives of the Committee are:
on those in need is significant, and it also helps strengthen the
bond between Angel Oak colleagues as we team up to help. We • Building capacity and competency to lead and manage a
have provided both funds and volunteer hours to many grateful diverse workforce.
philanthropies that include: • Creating a work environment that ensures equal access to
opportunities for professional growth and advancement.
• Atlanta Police Foundation • Developing cultural awareness and responsiveness, as an
• The Wuerffel Foundation organization, to maximize our effectiveness in engagements
• Shepherd Center Foundation - SHARE with clients, partners, and vendors, considering and
• Skyland Trail respecting their unique perspectives, experiences, and needs.
• SagerStrong Foundation
• Kisner Foundation The DEI Committee drafted Angel Oak Capital’s DEI Policy,
• Operation BBQ Relief which includes its mission to “foster, sustain, and provide
• Samaritan’s Purse an inclusive culture and a collaborative and respectful work
• Mercy Chefs environment where Angel Oak constituents/associates can
• Project Hope develop personally and professionally, thereby driving
• International Medical Corp innovative solutions for our clients.”

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The policy describes the DEI Committee structure as well as the • Incorporating diverse perspectives in engagements with
following objectives: clients, partners, and service providers, considering and
respecting their unique experiences and needs.
• Developing cultural awareness and responsiveness, as an • Building capacity and competency to lead and manage a
organization, to maximize our effectiveness in creating a diverse workforce.
positive work environment for our associates.

Angel Oak EEO-1 Diversity Statistics

Angel Oak began publicly disclosing DEI statistics in our 2020 CSR report. That initial assessment only included Angel Oak Capital
Advisors. Below are the updated EEO-1 statistics for 2021, which reflect our intention to broaden our DEI metrics across our affiliated
companies. These statistics reflect the diversity of associates from Angel Oak Capital Advisors and Angel Oak Companies Shared
Services as of 12/31/21 (total employee count of 137).

EEO-1 JOB CATEGORIES GENDER % RACE AND ETHNICITY %

Male Female Non- Hispanic Not Hispanic

Binary or Latino or Latino
White Black or Asian Two or Unspecified
African more races
American

Executive-Level Managers 15.3 1.5 11.0 3.7 2.2

First/Mid-Level Managers 4.4 2.2 0.7 3.7 0.7 0.7 0.7

Professionals 36.5 13.9 0.7 2.9 32.1 2.9 10.2 1.5 1.5
Sales Workers 11.7 1.5 0.7 10.2 0.7 0.7 0.7

Administrative Support 8.0 4.4 2.2 5.8 4.4

Total 75.9 23.4 0.7 6.6 62.8 8.8 15.3 1.5 5.1

SOCIAL BOND SECURITIZATIONS for social- and green-bond issuances. Angel Oak also secured a
second-party opinion from ISS ESG, which confirmed alignment
In May 2021, Angel Oak announced the completion of AOMT with the standards set forth by the ICMA Social Bond Principles.
2021-2, the first non-agency, mortgage-backed securitization
issued in the U.S. that qualifies as a social bond. The $231 In addition, Angel Oak developed a comprehensive framework
million securitization was composed primarily of non-qualified and used extensive data analytics to categorize and quantify
mortgages (non-QM) originated entirely by Angel Oak’s affiliated the bonds’ social impact at the loan level. The securitizations
mortgage lenders. A second social bond, AOMT 2021-3 totaling comprise loans that generally offer mortgage financing solutions
$303 million, was issued in June 2021. for underserved U.S. homebuyers who are not able to borrow
through traditional lending channels. These borrowers largely
Angel Oak undertook a high level of diligence in qualifying loans include self-employed individuals, a sector of the population
for the social bond securitizations and adhered to the standards that has disproportionately felt the economic strain caused by
put in place by the International Capital Market Association the COVID-19 pandemic.
(ICMA) Social Bond Principles, the industry’s leading framework

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ORGANIZATIONAL AFFILIATIONS, CONFERENCES, AND Association for Corporate Growth (ACG)
RECOGNITION
Angel Oak Companies was honored to be recognized as one of
Metro Atlanta Chamber Board of Advisors the top 40 fastest-growing middle-market companies in Georgia
by the ACG, which comprises more than 100,000 middle-market
Angel Oak Companies is an investor in the Metro Atlanta Chamber professionals from corporations, private equity, finance, and
(MAC) and has a seat on their Board of Advisors. MAC is a professional service firms representing Fortune 500, Fortune
160-year-old organization that represents businesses, colleges 1000, FTSE 100, and middle-market companies forming 59
and universities, and nonprofits across the 29-county region that chapters in North America and Europe. In fact, 2021 marked
makes up the nation’s ninth-largest market. Its efforts build on the fifth consecutive year that Angel Oak earned a spot on the
the qualities that make Atlanta one of the nation’s most unique Georgia Fast 40 list.
metros — its neighborhoods, culture, quality of life, welcoming
business community, and more. Angel Oak is exploring a variety of
opportunities to participate in several of MAC’s initiatives in 2021.

INVESTORS BOARD
OF ADVISORS
III. GOVERNANCE

Angel Oak strives to implement and follow strong corporate

Georgia Chamber of Commerce governance principles to balance the interests of our many
stakeholders, including partners, employees, customers,
Teresa Akulu, a member of Angel Oak’s Salesforce Administration suppliers, the government, and the community. Strong
Team, participated in the 2021 Diversity, Equity, and Inclusion corporate governance enables Angel Oak to attain our financial
Summit that was sponsored by the Georgia Chamber of performance and community engagement goals and objectives.
Commerce on November 3 – 4. Topics included setting
boundaries and time frames for diversity targets, identifying United Nations – Principles for Responsible Investment
metrics and models to predict changes, and using compensation
to effect change. Angel Oak Capital Advisors became a signatory to the Principles
for Responsible Investment (PRI) in 2017. The Principles were
developed by an international group of institutional investors
and reflect the increasing relevance of environmental, social,
and corporate governance issues to investment practices. The
process was convened by the United Nations Secretary-General.

AJC Top Workplaces

In 2021, Angel Oak Companies, our holding company, was named

as a “Top Place to Work” by the Atlanta Journal-Constitution for
the seventh consecutive year, placing in the top 150 companies • Principle 1: Incorporate ESG issues into investment analysis
that were evaluated. There were more than 4,700 companies and decision-making processes.
nominated or submitted for the 2021 Top Workplaces awards, • Principle 2: Be active owners and incorporate ESG issues into
which is hosted by the Atlanta Journal-Constitution. our ownership policies and practices.
• Principle 3: Seek appropriate disclosure on ESG issues by the
entities in which we invest.
• Principle 4: Promote acceptance and implementation of the
FOR SEVEN CONSECUTIVE Principles within the investment industry.
YEARS • Principle 5: Work together to enhance our effectiveness in
implementing the Principles.
• Principle 6: Report on our activities and progress toward
implementing the Principles.

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In 2020, Angel Oak Capital Advisors received an Assessment In June 2021, Angel Oak launched the Core Impact Fund, an
Report Summary Scorecard result of 26 points out of 30 on open-end mutual fund which seeks total return while giving
overall strategy and governance. This placed Angel Oak in the special consideration to positive aggregate environmental,
“A” scoring band out of a range of possible results from “A” to social, and/or governance (ESG) impact outcomes. The
“E.” A copy of Angel Oak’s 2020 Public Transparency Report can Fund is designated as an ESG impact fund and will look to
be found at this link. Due to technology issues associated with allocate capital to fixed income securities that have a positive
the UN PRI’s reporting platform, Public Transparency Reports impact on the global environment across all levels of society.
containing information from the 2021 reporting period for all UN The ICI taxonomy defines ESG impact funds as those that
PRI signatories will not be published until Q3 2022. “seek to generate positive, measurable, reportable social and
environmental impact alongside a financial return. Measurement,
Sustainable Accounting Standards Board/Value Reporting management, and reporting of impact is a defining feature of
Foundation Member impact investing.” The Fund also utilizes active engagement with
the senior management of issuers to positively impact their ESG
Angel Oak is an SASB Alliance Member under the auspices factors by promoting sustainable practices.
of the Value Reporting Foundation (VRF), a global nonprofit
organization that offers a comprehensive suite of resources PARTNERSHIPS WITH LEADING SUSTAINABLE INVESTMENT
designed to help businesses and investors develop a shared ORGANIZATIONS
understanding of enterprise value — how it is created,
preserved, or eroded. We show our commitment to strong UN Principles for Responsible Investing (PRI) - The Structured
governance and transparency by providing the entire range of Products Advisory Committee (SPAC) advises the PRI on its
SASB disclosure elements for Asset Management and Custody program to identify how ESG factors are considered when
Activities in the appendix of this report. investors allocate capital to structured products or when these
are originated. Initiatives include promoting more systematic
and transparent incorporation of ESG factors in investment
decisions in structured products. The SPAC works with the
various expert PRI working groups set up to address ESG
consideration in structured products. Rob McDonough, Director
of ESG and Regulatory Initiatives at Angel Oak Capital, leads
efforts to develop ESG disclosure standards for private label
(non-agency) residential mortgage-backed securities (PLRMBS).

EXPANSION OF ESG INTEGRATION PROGRAM

Angel Oak’s firm-wide ESG integration program was extended in

2021 to include all of the open-end mutual funds managed by
Angel Oak Capital Advisors. The Dynamic Financial Strategies
Income Term Trust (DYFN), a closed-end fund, is also ESG-
integrated. The Investment Company Institute (ICI) published a
whitepaper1 providing a taxonomy for ESG and sustainable funds,
and it contained the following definition for ESG-integration: Net Zero Asset Managers Initiative (NZAM) - The Net Zero Asset
Managers initiative is a group of international asset managers
“Fund managers may incorporate, or integrate, committed to supporting the goal of net zero GHG emissions by
ESG considerations into their investment 2050 or sooner, in line with global efforts to limit warming to
1.5 degrees Celsius, and to supporting investing aligned with net
process along with other material factors and zero emissions by 2050 or sooner. The signatories are a range of
analysis. Funds typically explain how they asset managers from around the world who are all committed to
do so on their websites. This long-standing the goal of a net zero future. The 235 signatories to date manage
element of investing seeks to enhance a fund’s over $57.5 trillion of assets.
financial performance by analyzing material ESG
considerations along with other material risks
such as credit risk and counterparty risk.”

Angel Oak creates and distributes quarterly summary reports for

every ESG-integrated fund. Each report contains specific metrics
that reflect industry best practices for assessing ESG integration
across the various asset classes in which each fund invests.
1
Funds’ Use of ESG Integration and Sustainable Investing Strategies: An Introduction (July 2020).

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Structured Finance Association (SFA) ESG Task Force - CDP (formerly Carbon Disclosure Project) - CDP is a not-
SFA launched the ESG Task Force in 2020 to assess how for-profit charity that runs the global disclosure system for
environmental, social, and corporate governance investing and investors, companies, cities, states, and regions to manage their
reporting can be applied and accessed in the securitization environmental impacts. Angel Oak is an investor in CDP and
market. Initiatives include developing work streams through in 2021 initiated Phase II of a three-year project to encourage
which participants can develop best practices that will add community banks in which we are invested to disclose their
value to the entire industry for ESG investing applications. Rob carbon- and emissions-related information, to help transition
McDonough, Director of ESG and Regulatory Initiatives at Angel our economy to a more sustainable model and to promote the
Oak Capital, is a member of the Task Force’s Steering Committee creation of a circular economy.
and leads a team that is developing ESG disclosure requirements
for residential mortgage-backed securities (RMBS). The SFA has
engaged KPMG to work with the ESG Task Force on this initiative,
and a framework for RMBS, CMBS, CLOs, Consumer ABS, and Auto
ABS is expected to be circulated for comments later in 2022.

Partnership for Carbon Accounting Financials (PCAF) - Angel

Oak became a signatory to 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
Fixed Income Investor Network (FIIN) ESG Task Force - The Fixed loans and investments. The harmonized accounting approach
Income Investor Network is a non-profit trade association with provides financial institutions with the starting point required
the sole purpose of serving as an investor-led coalition in the to set science-based targets and align their portfolio with the
structured finance markets, committed to providing investors Paris Climate Agreement. PCAF enables transparency and
with: accountability and has developed an open-source global GHG
accounting standard for financial institutions: the Global GHG
1. Networking channels to collaborate and connect Accounting and Reporting Standard for the Financial Industry.
2. Educational forums and platforms in which to learn and share Angel Oak is utilizing the PCAF’s factor-based GHG emission
opinions calculator to help facilitate the estimation of Scope 3 emissions
3. Advocacy through the realms of research and knowledge on for the CDP community bank climate risk disclosure project.
important concepts and developments

ESG has emerged as a factor for investment decisions on par with

traditional criteria. FIIN Task Forces are the backbone of the
activities of the association. The ESG Task Force concerns itself
with advancing ESG by engaging investors on best practices,
initiatives in the broader investment universe in the U.S. and
globally, and regulatory developments. Rob McDonough, Angel
Oak’s Director of ESG and Regulatory Initiatives, is a founding
Board member, serves as FIIN’s Assistant Treasurer and chairs
the ESG Task Force.

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2021 Asset Management and Custody Activities
Sustainability Accounting Standard
Sustainable Industry Classification System® (SICS®) FN-AC
TRANSPARENT INFORMATION & FAIR ADVICE FOR CUSTOMERS Response
Angel Oak Capital’s website (angeloakcapital.com) includes
→ FN-AC-270A.1 disclosure information or links to such information on all
Accounting Metric managed funds and strategies, which conforms with the SEC’s
(1) Number and (2) percentage of covered employees with a disclosure requirements for both public and private funds.
record of investment-related investigations, consumer-initiated
complaints, private civil litigations, or other regulatory
proceedings. EMPLOYEE DIVERSITY & INCLUSION

Response → FN-AC-330A.1
There were no covered employees with a record of new Accounting Metric
investment-related investigations, consumer-initiated Percentage of gender and racial/ethnic group representation for
complaints, private civil litigations, or other regulatory (1) executive management, (2) non-executive management, (3)
proceedings disclosed in 2021. professionals, and (4) all other employees.
1. 0
2. 0% Response
See chart in Section II – Social Responsibility – Diversity, Equity
→ FN-AC-270A.2 and Inclusion of this report.
Accounting Metric
Total amount of monetary losses as a result of legal proceedings
associated with marketing and communication of financial INCORPORATION OF ENVIRONMENTAL, SOCIAL, AND
product related information to new and returning customers. GOVERNANCE FACTORS IN INVESTMENT MANAGEMENT &
ADVISORY
Response
Angel Oak Capital did not incur any monetary losses in the → FN-AC-410A.1
reporting period because of legal proceedings associated to the Accounting Metric
actions described in the SASB metric. Amount of assets under management, by asset class, that employ
1. $0 (1) integration of environmental, social, and governance (ESG)
issues, (2) sustainability themed investing, and (3) screening.
→ FN-AC-270A.3
Accounting Metric Response
Description of approach to informing customers about products 1. $20 million of Equity
and services. $1.7 billion of FI – Corporate
$729 million of FI – Securitized

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2. $10 million of FI – Corporate Angel Oak’s investee engagement procedures are governed by
$28 million of FI – Securitized our Responsible Investment Policy. Our stewardship approach
involves engagement with the senior management of invested
3. $20 million of Equity companies to discuss relevant ESG factors. The discussion not
$1.7 billion of FI – Corporate only revolves around what the company is currently doing or
$1.2 billion of FI – Securitized has done in regard to ESG but its future plans as well. We serve
as a repository of best practices in ESG, particularly in the
→ FN-AC-410A.2 community bank space, and often field inbound inquiries from
Accounting Metric senior management on ways to better align their firms with
Description of approach to incorporation of environmental, ESG industry best practices. Our proprietary corporate credit
social, and governance (ESG) factors in investment and/or scorecard methodology allows Angel Oak to measure our
wealth management processes and strategies. impact through engagement over time by observing the
improvement in scores for individual issuers as well as at the
Response fund or strategy level.
As a signatory to the UN PRI, Angel Oak follows their set of six
principles for integrating ESG:
• To incorporate ESG issues into investment analysis and BUSINESS ETHICS
decision-making processes.
• To be an active owner and to incorporate ESG issues into our → FN-AC-510A.1
ownership policies and practices. Accounting Metric
• To seek appropriate disclosure on ESG issues by the entities Total amount of monetary losses as a result of legal proceedings
in which we invest. associated with fraud, insider trading, anti-trust, anti-
• To promote acceptance and implementation of the Principles competitive behavior, market manipulation, malpractice, or
within the investment industry. other related financial industry laws or regulations.
• To work with the PRI Secretariat and other signatories to
enhance their effectiveness in implementing the Principles. Response
• To report on our activities and progress toward implementing Angel Oak Capital did not incur any monetary losses in the
the Principles. reporting period because of legal proceedings associated with
the actions described in the SASB metric.
Angel Oak implemented a Responsible Investment Policy in 2019 1. $0
to govern our ESG integration program across our investment
strategies that are ESG-integrated or formally designated as → FN-AC-510A.2
impact strategies. Accounting Metric
Description of whistleblower policies and procedures.
→ FN-AC-410A.3
Accounting Metric Response
Description of proxy voting and investee engagement policies Angel Oak has implemented a Whistleblower Policy as a
and procedures. component of the firm’s overall Compliance Program. This policy
conforms to all requirements of Rule 21F-17 of the Commission’s
Response whistleblower regulations.
Angel Oak is guided by our Proxy Voting Policy when exercising
proxy voting for the limited equity positions we manage.

CODE ACTIVITY METRIC RESPONSE

(1) Total registered and (1) $17,000,000,000
FN-AC-000.A
(2) Total unregistered assets under management (AUM) (2) $0
FN-AC-000.B Total assets under custody and supervision (1) $17,000,000,00

Angel Oak actively encourages invested companies held in our public and private funds to make their own industry-appropriate ESG
disclosures in alignment with the SASB framework and other sustainable disclosure frameworks, such as the Task Force for Climate-
related Financial Disclosure (TCFD) and the Carbon Disclosure Project (CDP).

12
Mutual fund investing involves risk; principal loss is possible. Investments in debt securities typically decrease when interest rates rise. This risk is
usually greater for longer-term debt securities. Investments in lower-rated and nonrated securities present a greater risk of loss to principal and interest
than higher-rated securities do. Investments in asset-backed and mortgage-backed securities include additional risks that investors should be aware of,
including credit risk, prepayment risk, possible illiquidity, and default, as well as increased susceptibility to adverse economic developments. For more
information on these risks and other risks of the Fund, please see the Prospectus. ESG investment strategies limit the universe of investment opportunities
available to any Fund and will affect a Fund’s exposure to certain issuers, sectors, regions, and types of investments, which may result in a Fund forgoing
opportunities to buy or sell certain securities when it might otherwise be advantageous to do so. Adhering to a Fund’s ESG investment strategy may also
affect the Fund’s performance relative to similar funds that do not seek to invest in companies based on their ESG impact. Securities of issuers that the
Adviser has identified as having favorable ESG characteristics may shift into and out of favor depending on market and economic conditions, and certain
investments may be dependent on U.S. and foreign government policies, including tax incentives and subsidies, which may change without notice. ESG
determinations are inherently subjective and investors’ views may differ as to what constitutes a positive or negative aggregate ESG impact outcome. There
is no guarantee that the Adviser’s views, security selection criteria, or investment judgment will reflect the beliefs or values of any particular investor.
In addition, there can be no assurance that issuers in which any Fund invests will be successful in their efforts to offer solutions that generate a positive
ESG impact. When assessing whether an issuer meets any related Fund’s investment strategy and criteria, the Adviser may rely on third-party data that it
believes to be reliable, but it does not guarantee the accuracy of such third-party data.
Must be preceded or accompanied by a prospectus. To obtain an electronic copy of the prospectus, please visit www.angeloakcapital.com.
Past performance is no guarantee of future results.
The Angel Oak Funds are distributed by Quasar Distributors, LLC.

→ For more information or to learn how to invest in Angel Oak’s structured credit and
corporate credit funds, visit angeloakcapital.com.
info@angeloakcapital.com
Toll-Free: 888.685.2915

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