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) announced monthly income distributions for two ETFs: Westwood Salient Enhanced Midstream Income ETF (MDST) and Westwood Salient Enhanced Energy Income ETF (WEEI). Both ETFs provide monthly income through dividends and options premiums, with current annualized distribution rates of 10.4% for MDST and 12.0% for WEEI. MDST, launched April 8, 2024, focuses on midstream energy companies with $57 million in net assets. WEEI, launched April 30, 2024, offers broad energy sector exposure with $14 million in net assets. As of September 30, 2024, MDST showed positive performance since inception (NAV: 8.18%), while WEEI experienced negative returns (NAV: -2.50%).

Positive

• High annualized distribution rates: MDST at 10.4% and WEEI at 12.0%
• MDST shows positive performance since inception at 8.18% (NAV)
• MDST has accumulated $57 million in net assets since launch

Negative

• WEEI shows negative performance since inception at -2.50% (NAV)
• WEEI has only gathered $14 million in net assets since launch
• Current month's distribution is 100% return of capital, which may decrease ETF's NAV over time

Insights

Financial Analyst

The announcement of monthly income distributions for Westwood's ETFs reveals a strategic expansion in their income-focused product lineup. The $57M MDST and $14M WEEI ETFs demonstrate an innovative approach, combining dividend yields with options premium strategies to generate high monthly income. The 10.4% and 12.0% annualized distribution rates are notably attractive in the current market environment.

However, investors should carefully consider that WEEI's performance shows a -2.50% return since inception, while MDST has performed better at 8.18%. The expense ratios of 0.80% and 0.85% are relatively high compared to passive ETFs but reasonable for actively managed strategies with options overlay. The return of capital in current month's distribution warrants attention as it could impact the fund's NAV over time.

DALLAS, Nov. 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	10.4%
(NASDAQ: WEEI)	Westwood Salient Enhanced Energy Income ETF	0.225	12.0%

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 $57 million in net assets, as of October 30, 2024.

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 October 30, 2024.

Standardized Performance as of 9/30/24		QTD	Since Inception
MDST Inception: April 8, 2024 Expense ratio: 0.80%	MDST Fund NAV (%)	4.49%	8.18%
	MDST Market Price (%)	4.44%	8.38%
WEEI Inception: April 30, 2024 Expense ratio: 0.85%	WEEI Fund NAV (%)	-1.74%	-2.50%
	WEEI Market Price (%)	-1.79%	-2.46%
Subsidized/Unsubsidized 30-Day Yield
MDST 4.68%/4.68%         WEEI 2.63%/2.63%

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 October 30, 2024. 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. 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
HewesCommunications
212.207.9454
tyler@hewescomm.com

FAQ

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

As of October 30, 2024, MDST offers an annualized distribution rate of 10.4%, while WEEI provides 12.0%. Both ETFs distribute $0.225 per share monthly.

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

As of September 30, 2024, MDST (launched April 8, 2024) has returned 8.18% NAV, while WEEI (launched April 30, 2024) has returned -2.50% NAV.

What are the assets under management for Westwood's (WHG) new ETFs?

As of October 30, 2024, MDST has $57 million in net assets, while WEEI has $14 million in net assets.