Stock Analysis & Valuation Ocean Park High Income ETF (DUKH)

• Previous Close: $24.53
• Sector Valuation Confidence Level: High

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method		n/a
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

Duke Energy Corporation JR SUB DEB 73 (DUKH) is an actively managed exchange-traded fund (ETF) that strategically allocates its assets between higher-yielding ETFs (High Income ETFs), long-term Treasury ETFs (Treasury ETFs), and cash equivalents. Operating within the Financial Services sector, DUKH focuses on generating income through diversified exposure to high-income-generating assets while maintaining liquidity and risk management. The fund's investment strategy is designed to capitalize on market opportunities by dynamically adjusting its portfolio between income-focused and defensive assets. With a market capitalization of approximately $16.75 billion, DUKH is positioned as a key player in the income-focused ETF space, appealing to investors seeking yield in a regulated and structured financial product. Its parent company, Duke Energy Corporation, provides a strong foundation, leveraging its expertise in regulated utilities and financial stability.

Investment Summary

DUKH presents an attractive investment opportunity for income-focused investors, given its strategic allocation to high-yield ETFs and Treasury ETFs, which balance yield and risk. The fund's $16.75 billion market cap and strong parent backing (Duke Energy) enhance its credibility. However, risks include interest rate sensitivity due to its Treasury ETF exposure and potential volatility in high-yield markets. The fund's 0.32 beta suggests lower market correlation, which may appeal to risk-averse investors. With a dividend yield supported by $1.23 per share, DUKH could be a stable income generator, though investors should monitor debt levels ($8.89 billion) and liquidity ($314 million cash).

Competitive Analysis

DUKH differentiates itself through its tactical asset allocation strategy, blending high-income ETFs with Treasury ETFs to optimize risk-adjusted returns. Its competitive advantage lies in Duke Energy's financial stability and the fund's active management, allowing flexibility in volatile markets. Compared to passive income ETFs, DUKH's dynamic approach may offer better downside protection. However, its reliance on external ETFs introduces counterparty risk and expense drag from underlying fund fees. The fund's low beta (0.32) suggests defensive positioning, but its performance is tied to the broader high-yield and Treasury markets, limiting absolute returns in bullish equity environments. Competitors with similar strategies may offer lower fees or more aggressive yield targets, but DUKH's conservative tilt and Duke Energy's backing provide a unique value proposition for risk-conscious income investors.

Major Competitors

• iShares iBoxx $ High Yield Corporate Bond ETF (HYG): HYG is a passive high-yield bond ETF with a massive AUM, offering broad exposure to junk bonds. It lacks DUKH's tactical allocation but benefits from lower fees and liquidity. Its weakness is higher credit risk and no Treasury hedge.
• SPDR Bloomberg High Yield Bond ETF (JNK): Similar to HYG, JNK tracks high-yield bonds with slightly different index methodology. It competes with DUKH's high-income allocation but lacks the defensive Treasury component, making it more volatile.
• iShares 20+ Year Treasury Bond ETF (TLT): TLT provides pure long-duration Treasury exposure, competing with DUKH's defensive allocation. It offers lower yield but safer haven appeal, lacking DUKH's income-generating hybrid strategy.
• iShares Preferred & Income Securities ETF (PFF): PFF focuses on preferred stocks, offering higher yield than DUKH but with greater interest rate and credit risk. DUKH's blend with Treasuries provides better diversification.