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 ETFs: Westwood Salient Enhanced Midstream Income ETF (MDST) and Westwood Salient Enhanced Energy Income ETF (WEEI). MDST, launched April 8, 2024, with $75 million in net assets, offers a 9.9% annualized distribution rate. WEEI, launched April 30, 2024, with $14 million in net assets, provides a 12.3% annualized distribution rate.

Both actively managed ETFs combine dividend yields and options premiums from covered calls to generate monthly income. MDST focuses on midstream energy companies and has shown strong performance with 16.31% returns since inception. WEEI, which provides exposure to various energy sector companies, has experienced a decline of -4.22% since inception. The current month's distribution is 100% return of capital for MDST and 23.15% ROC for WEEI.

Positive

• MDST shows strong performance with 16.31% returns since inception
• High distribution rates: MDST at 9.9% and WEEI at 12.3%
• MDST has accumulated $75 million in assets since April 2024

Negative

• WEEI shows negative performance of -4.22% since inception
• WEEI has only gathered $14 million in assets since launch
• 100% return of capital for MDST distributions indicates no actual earnings being distributed

Insights

Financial ETF Analyst

The announcement of monthly distributions for Westwood's energy-focused ETFs reveals compelling income-generating potential in the current market environment. The MDST ETF offering a 9.9% annualized distribution rate and WEEI ETF with 12.3% demonstrate strong yield generation through a combination of dividend income and options premium strategies.

Performance metrics show divergent results between the two funds. MDST has demonstrated robust performance with 16.31% returns since inception, while WEEI has struggled with -4.22% returns, reflecting broader energy sector volatility. The assets under management ($75 million for MDST and $14 million for WEEI) suggest moderate market acceptance, though still in early growth phases.

A critical consideration is the return of capital (ROC) component in distributions - 100% for MDST and 23.15% for WEEI. This structure could potentially erode the NAV over time, making the high yields less sustainable long-term. The relatively high expense ratios (0.80% and 0.85%) may impact total returns in a competitive ETF landscape.

Energy Market Specialist

The ETF structure targeting midstream and broader energy sector exposure represents a strategic positioning in the evolving energy market landscape. MDST's focus on midstream operations (gathering, transport, storage) provides exposure to more stable, infrastructure-based revenue streams less directly impacted by commodity price volatility. The covered call strategy adds an additional income layer while potentially capping upside in strong bull markets.

WEEI's broader energy sector exposure across upstream, downstream and integrated companies offers a more comprehensive energy market thesis but comes with higher volatility as evidenced by its negative returns since inception. The current market dynamics, including OPEC+ production decisions and global demand patterns, suggest continued volatility in the energy sector, making the income-focused approach with downside protection through options particularly relevant.

DALLAS, Jan. 10, 2025 (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	9.9%
(NASDAQ: WEEI)	Westwood Salient Enhanced Energy Income ETF	0.225	12.3%

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 (distributions paid from the Fund’s net investment income) and options premiums from covered calls, while also offering the potential for equity appreciation within the energy sector.

Launched April 8, 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 $75 million in net assets, as of January 3, 2025.

WEEI, which launched April 30, 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 $14 million in net assets as of January 3, 2025.

Standardized Performance as of 12/31/24		QTD		Since Inception
MDST Inception: April 8, 2024 Expense ratio: 0.80%	MDST Fund NAV (%)	7.52%		16.31%
	MDST Market Price (%)	7.89%		16.92%
WEEI Inception: April 30, 2024 Expense ratio: 0.85%	WEEI Fund NAV (%)	-1.77%		-4.22%
	WEEI Market Price (%)	-1.78%		-4.19%
Subsidized/Unsubsidized 30-Day Yield
MDST 4.05%/4.05%            WEEI 2.45%/2.45%

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 January 3, 2025. The Annualized Distribution Rate is the rate 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. The current months distribution is 100% return of capital (ROC) for MDST and 23.15% ROC for WEEI. 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 Funds are newly formed and have limited 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. Covered Call Strategy Risk: This risk arises when an investor holds a long position in a stock and simultaneously sells a call option against it. While this strategy can generate income, it limits potential upside gains if the stock price rises significantly above the strike price of the option. Options Risk/Flex Options Risk: This refers to the inherent risks associated with trading options, such as the risk of losing the entire premium paid for an option if it expires out-of-the-money. Flex options risk is a specific type of options risk that arises from the flexibility of flex options, which can be adjusted or exercised under certain conditions.

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. 30-day SEC yield is a standardized calculation adopted by the SEC based on a 30-day period that helps investors compare funds using a consistent method of calculating yield. The subsidized yield includes the effect of any fee waivers or expense reimbursements, while the unsubsidized yield excludes these cost reductions, showing what the yield would be if the fund had to cover all expenses from its own income. Options Premiums is the price paid to purchase an option contract.

Covered Call Option is a financial contract that gives the holder the right, but not the obligation, to buy a specific asset at a predetermined price (strike price) within a specified time period. Dividend Yield is a dividend expressed as a percentage of a current share price.

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.

Media Contact:

Tyler Bradford
Hewes Communications
212.207.9454
tyler@hewescomm.com

FAQ

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

As of January 3, 2025, MDST offers a 9.9% annualized distribution rate, while WEEI provides a 12.3% annualized distribution rate.

How have WHG's MDST and WEEI ETFs performed since their inception?

MDST has returned 16.31% (NAV) since its April 8, 2024 inception, while WEEI has declined -4.22% (NAV) since its April 30, 2024 launch.

What are the current assets under management for WHG's new ETFs?

As of January 3, 2025, MDST has $75 million in net assets, while WEEI has $14 million in net assets.

What is the return of capital (ROC) percentage for WHG's ETF distributions?

The current month's distribution is 100% return of capital for MDST and 23.15% ROC for WEEI.

What are the expense ratios for WHG's MDST and WEEI ETFs?

MDST has an expense ratio of 0.80%, while WEEI has an expense ratio of 0.85%.