Westwood Announces Monthly Income Distributions for Westwood Salient Enhanced Midstream Income ETF (MDST) and Westwood Salient Enhanced Energy Income ETF (WEEI)

Rhea-AI Summary

Westwood Holdings Group (WHG) has announced monthly income distributions for two of its Exchange-Traded Funds (ETFs): Westwood Salient Enhanced Midstream Income ETF (NYSE: MDST) and Westwood Salient Enhanced Energy Income ETF (NASDAQ: WEEI). Both ETFs are designed to provide high distributable monthly income by combining dividend yield and options premiums from covered calls.

Key points:

• MDST offers a distribution of $0.225 per share with an annualized distribution rate of 10.6%
• WEEI offers a distribution of $0.225 per share with an annualized distribution rate of 11.3%
• MDST, launched on April 9, 2024, focuses on midstream energy companies and has $43 million in net assets
• WEEI, launched on May 1, 2024, provides broad exposure to energy companies and has $13 million in net assets

Positive

• Both ETFs (MDST and WEEI) are providing double-digit income to investors
• MDST has accumulated $43 million in net assets since its launch in April 2024
• WEEI has accumulated $13 million in net assets since its launch in May 2024
• Both ETFs offer potential for equity appreciation within the energy sector

Negative

• WEEI shows a negative performance since inception (-0.76% NAV, -0.68% Market Price)
• The high distribution rates may not be sustainable and could potentially decrease the ETFs' NAV and trading price over time

Insights

Financial Analyst

The announcement of monthly income distributions for Westwood's ETFs, MDST and WEEI, is noteworthy but not groundbreaking. With annualized distribution rates of 10.6% and 11.3% respectively, these funds are targeting high-yield seekers in the energy sector. However, it's important to note that these rates are not guaranteed and may include return of capital, potentially eroding the NAV over time.

The funds' recent launches (April and May 2024) and relatively small asset bases ($43 million for MDST and $13 million for WEEI) suggest they are still in their early growth phase. Their strategy of combining dividend yield with covered call options is designed to enhance income, but this approach may limit upside potential in strongly bullish markets.

Investors should be cautious about the short performance history and consider the expense ratios (0.80% for MDST and 0.85% for WEEI) when evaluating the total return potential.

Energy Sector Analyst

The launch of MDST and WEEI reflects a strategic move by Westwood to capitalize on the energy sector's potential for income generation. The midstream focus of MDST taps into the relatively stable cash flows of pipeline and storage companies, while WEEI offers broader exposure across the energy value chain.

Current market conditions, characterized by high oil prices and strong energy sector performance, are favorable for these ETFs. However, the energy sector is cyclical and subject to geopolitical risks. The covered call strategy may provide a cushion during market downturns but could cap gains in bullish scenarios.

Investors should monitor the funds' ability to maintain their high distribution rates, especially given the volatile nature of energy markets. The active management approach could be beneficial in navigating sector-specific challenges, but it also introduces manager risk.

DALLAS, Aug. 05, 2024 (GLOBE NEWSWIRE) -- Westwood Holdings Group (WHG), a publicly-traded investment management boutique and wealth management firm, today announced monthly income distributions for Westwood Salient Enhanced Midstream Income ETF (NYSE: MDST) and Westwood Salient Enhanced Energy Income ETF (NASDAQ: WEEI) as shown in the table below. This pair of Westwood Exchange- Traded Funds (ETFs) deliver income from both dividends and options premiums to help provide monthly income distributions for investors. Most recently, both strategies are providing double-digit income to investors.

ETF Ticker	ETF	Distribution per Share	Annualized Distribution Rate1
(NYSE: MDST)	Westwood Salient Enhanced Midstream Income ETF	0.225	10.6%
(NASDAQ: WEEI)	Westwood Salient Enhanced Energy Income ETF	0.225	11.3%

Both MDST and WEEI are actively managed funds, designed to provide advisors and investors with a robust solution for generating high distributable monthly income, combining dividend yield and options premiums from covered calls, while also offering the potential for equity appreciation within the energy sector.

Launched April 9, 2024, MDST seeks to deliver current income and capital appreciation by investing in midstream energy companies, defined as companies and master limited partnerships (MLPs) that gather, transport, store and distribute crude oil, natural gas and other energy products. The fund combines dividend yield and options premiums from covered calls to target significant monthly income distributions. MDST currently has $43 million in net assets, as of July 30, 2024.

WEEI, which launched May 1, 2024, offers broad exposure to energy companies, including upstream, downstream, oil service and integrated companies that operate in all phases of oil exploration, production, service and distribution. Like MDST, WEEI combines dividend yield and options premiums from covered calls to target significant monthly income distributions. WEEI currently has $13 million in net assets as of July 30, 2024.

Standardized Performance as of 6/30/24		QTD		Since Inception
MDST Inception: April 9, 2024	MDST Fund NAV (%)	3.52%		3.52%
Expense ratio: 0.80%	MDST Market Price (%)	3.77%		3.77%
WEEI Inception: May 1, 2024	WEEI Fund NAV (%)	-0.76%		-0.76%
Expense ratio: 0.85%	WEEI Market Price (%)	-0.68%		-0.68%
Subsidized/Unsubsidized 30-Day Yield
MDST 4.74%/4.74%         WEEI 2.42%/2.42%

The performance data quoted represents past performance. Current performance may be lower or higher than the performance data quoted above. Past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that investor’s shares, when redeemed, may be worth more or less than their original cost. For performance information current to the most recent month-end, please call toll-free (877) 386- 3944.

NAV Return represents the closing price of underlying securities. Market Return is calculated using the price which investors buy and sell ETF shares in the market. The market returns in the table are based upon the midpoint of the bid/ask spread at 4:00 pm EST, and do not represent the returns you would have received if you traded shares at other times.

1The Annualized Distribution Rate shown is as of July 30, 2024. The Annualized Distribution Rate is the annual yield an investor would receive if the most recent distribution, which includes option premium income, remained the same going forward. The Annualized Distribution Rate is calculated by multiplying an ETF's Distribution per Share by twelve (12), and dividing the resulting amount by the ETF's most recent NAV. The Distribution Rate represents a single distribution from the ETF and does not represent its total return. Distributions may also include a combination of ordinary dividends, capital gain, and return of investor capital, which may decrease an ETF's NAV and trading price over time. As a result, an investor may suffer significant losses to their investment. These Distribution Rates may be caused by unusually favorable market conditions and may not be sustainable. Such conditions may not continue to exist and there should be no expectation that this performance may be repeated in the future.

More information on Westwood’s ETF offerings is available at westwoodetfs.com.

ABOUT WESTWOOD HOLDINGS GROUP, INC.

Westwood Holdings Group, Inc. is a focused investment management boutique and wealth management firm.

Founded in 1983, Westwood offers a broad array of investment solutions to institutional investors, private wealth clients and financial intermediaries. The firm specializes in several distinct investment capabilities: U.S. Value Equity, Multi-Asset, Energy & Real Assets, Income Alternatives, Tactical Absolute Return and Managed Investment Solutions, which are available through separate accounts, the Westwood Funds® family of mutual funds, exchange-traded funds (ETFs) and other pooled vehicles. Westwood benefits from significant, broad-based employee ownership and trades on the New York Stock Exchange under the symbol “WHG.” Based in Dallas, Westwood also maintains offices in Chicago, Houston and San Francisco.

For more information on Westwood, please visit westwoodgroup.com.

Westwood ETFs are distributed by Northern Lights Distributors, LLC (Member FINRA). Northern Lights Distributors and Westwood ETFs (or Westwood Holdings Group, Inc.) are separate and unaffiliated.

To determine if these Funds are an appropriate investment for you, carefully consider the Fund’s investment objectives, risk factors, charges and expenses before investing. This and other information can be found in the Fund prospectus’, which may be obtained by calling 800.944.0755. Please read the prospectus carefully before investing.

The Fund is newly formed and has no operating history.

The Fund’s investments are concentrated in the energy infrastructure industry with an emphasis on securities issued by MLPs, which may increase price fluctuation. The value of commodity-linked investments such as the MLPs and energy infrastructure companies (including midstream MLPs and energy infrastructure companies) in which the Fund invests are subject to risks specific to the industry they serve, such as fluctuations in commodity prices, reduced volumes of available natural gas or other energy commodities, slowdowns in new construction and acquisitions, a sustained reduced demand for crude oil, natural gas and refined petroleum products, depletion of the natural gas reserves or other commodities, changes in the macroeconomic or regulatory environment, environmental hazards, rising interest rates and threats of attack by terrorists on energy assets, each of which could affect the Fund’s profitability.

The SEC 30-Day Yield represents net investment income earned by the Fund over a 30-day period, expressed as an annual percentage rate based on the Fund's share price at the end of the 30-day period.

MLPs are subject to significant regulation and may be adversely affected by changes in the regulatory environment including the risk that an MLP could lose its tax status as a partnership. If an MLP were to be obligated to pay federal income tax on its income at the corporate tax rate, the amount of cash available for distribution would be reduced and such distributions received by the Fund would be taxed under federal income tax laws applicable to corporate dividends received (as dividend income, return of capital or capital gain). Investing in MLPs involves additional risks as compared to the risks of investing in common stock, including risks related to cash flow, dilution and voting rights. Such companies may trade less frequently than larger companies due to their smaller capitalizations, which may result in erratic price movement or difficulty in buying or selling. Additional management fees and other expenses are associated with investing in MLP funds. The tax benefits received by an investor investing in the Fund differs from that of a direct investment in an MLP by an investor. This document does not constitute an offering of any security, product, service or fund, including the Fund, for which an offer can be made only by the Fund’s prospectus. No fund is a complete investment program and you may lose money investing in a fund. The Fund may engage in other investment practices that may involve additional risks and you should review the Fund prospectus for a complete description. “Alerian MLP Index,” “Alerian Midstream Energy Select Index,” “AMZ,” and “AMEI” are trademarks of Alerian and their use is granted under a license from Alerian. One cannot invest directly in an index.

Media Contact:
Tyler Bradford
Hewes Communications
212.207.9454
tyler@hewescomm.com

FAQ

What are the distribution rates for Westwood's MDST and WEEI ETFs?

As of July 30, 2024, the Westwood Salient Enhanced Midstream Income ETF (MDST) has an annualized distribution rate of 10.6%, while the Westwood Salient Enhanced Energy Income ETF (WEEI) has an annualized distribution rate of 11.3%.

When were the MDST and WEEI ETFs launched by Westwood Holdings Group (WHG)?

The Westwood Salient Enhanced Midstream Income ETF (MDST) was launched on April 9, 2024, and the Westwood Salient Enhanced Energy Income ETF (WEEI) was launched on May 1, 2024.

What are the net assets of MDST and WEEI as of July 30, 2024?

As of July 30, 2024, the Westwood Salient Enhanced Midstream Income ETF (MDST) has $43 million in net assets, while the Westwood Salient Enhanced Energy Income ETF (WEEI) has $13 million in net assets.

How do Westwood's MDST and WEEI ETFs generate income for investors?

Both MDST and WEEI generate income for investors by combining dividend yields from energy sector companies and options premiums from covered calls, aiming to provide high distributable monthly income.