Business Wire 6-Dec-2018 9:25 AM
New funds offer key energy industry and sector exposures including MLPs in a tax efficient manner to provide potential for greater yield
Cushing® Asset Management, an investment firm with vast experience in energy, materials, and industrials, today announced the launch of a new suite of income focused Equity Sector & MLP ETFs : The Cushing® Sector Plus ETFs.
These new ETFs, which trade on the NYSE ARCA Exchange, are designed to offer investors exposure to the ever-evolving master limited partnership (MLP) and energy infrastructure markets by seeking to replicate the performance of custom indices in energy, utility, transportation, and the energy supply chain.
The funds, their tickers and respective indexes are as follows:
|Cushing® Sector Plus ETFs||Ticker||Index||Cushing® Indexes|
|Cushing® Energy & MLP ETF||XLEY||CENI||Cushing® Energy Index|
|Cushing® Utility & MLP ETF||XLUY||CUTI||Cushing® Utility Index|
|Cushing® Transportation & MLP ETF||XLTY||CTRI||Cushing® Transportation Index|
Cushing® Energy Supply Chain & MLP ETF
Cushing® Energy Supply Chain Index
Through a custom yield-weighted approach, constituents of the Cushing® indices are selected from the S&P 500® Energy Index (SPN), S&P 500 Utility Index (S5UTIL), S&P 500 Materials Index (S5MATR), and the Dow Jones Transportation Average™ (TRAN), and then combined with constituents from the Cushing 30 MLP Index (MLPX).
Each of the Cushing® indices, and consequently the funds, limit the exposure of MLPs to 24 percent at each rebalance, allowing investors to add the income-generating potential that MLPs can bring to a portfolio, but avoiding the receipt of schedule K-1s come tax time.
"We view this new suite of ETFs as the next step in sector and income investing," said Jerry Swank, Founder and Managing Partner, at Cushing® Asset Management.
"Selecting existing sector indexes that operate fundamentally related businesses to energy MLPs, weighting the constituents on indicated yield, and adding a limited amount of MLPs is designed to produce a higher yield focus while maintaining the desired sector exposure," added Todd Sunderland, Partner, Head of Risk Management and Quant Strategies at Cushing® Asset Management. "With the approach we've taken with the Sector Plus suite, investors are able to add the industry and sector exposure they seek, while avoiding overconcentration and adding income potential in a tax efficient manner."
"S&P Dow Jones Indices is pleased that Cushing Asset Management has selected our proprietary family of equity indices as the foundation to customize their indices," said Michael Mell, Senior Director at S&P Dow Jones Indices. "Our Custom Index service provides independently calculated solutions that are designed to meet the unique mandates or investment strategies of our clients."
Each of these new ETFs carry an expense ratio of 0.65% and you can read more about Cushing® and this new ETF suite here: CushingETFs.com
An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contain this and other information, call 800-617-0004 or visit cushingetfs.com. Please read the prospectus and summary prospectus carefully before investing.
Investing involves risk. Principal risk is possible. Fund shares are bought and sold at market price (not NAV) and are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called creation units and otherwise can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in kind. Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns. Each Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Therefore, each Fund is more exposed to individual stock volatility than a diversified fund. As with all index funds, the performance of each Fund and its Index may differ from each other for a variety of reasons. For example, the Fund incurs operating expenses and portfolio transaction costs not incurred by the Index. In addition, the Fund may not be fully invested in the securities of the Index at all times or may hold securities not included in the Index.
Each Fund's assets will be concentrated in the energy and utilities sectors, so it will be more effected by the sector's performance. Master limited partnerships (MLPs) concentrate investments in the natural resources sector and are subject to the risks of energy prices and demand and the volatility of commodity investments. MLPs are subject to certain risks inherent in the structure of MLPs, including complex tax structure risks, the limited ability for election or removal of management, limited voting rights, potential dependence on parent companies or sponsors for revenues to satisfy obligations, and potential conflicts of interest between partners, members and affiliates.
The potential tax benefits from investing in MLPs depend on them being treated as partnerships for federal income tax purposes. If the MLP is deemed to be a corporation then its income would be subject to federal taxation at the entity level, reducing the amount of cash available for distribution to a Fund which could result in a reduction of the Fund's value. Any tax or legal information provided is merely a summary of our understanding and interpretation of some of the current income tax regulations and is not exhaustive. Investors must consult their tax advisor or legal counsel for advice and information concerning their particular situation. Neither the Fund nor any of its representatives may give legal or tax advice.
The Cushing ETFs are distributed by Quasar Distributors, LLC.
About Cushing Asset Management:
Cushing® Asset Management, LP ("Cushing"), a subsidiary of Swank Capital, LLC, is an SEC- registered investment adviser headquartered in Dallas, Texas. Cushing serves as investment adviser to affiliated funds and managed accounts which invest primarily in securities of midstream energy infrastructure companies and other natural resource companies. Cushing is also dedicated to serving the needs of investors by sponsoring a variety of benchmarks. For more information, please visit http://www.cushingasset.com/indices.
The Cushing® Energy Index tracks the performance of large cap energy companies selected from the S&P 500 Energy Index (SPN) and master limited partnerships (MLPs) selected from the Cushing® 30 MLP Index (MLPX). The Cushing® Utility Index tracks the performance of large cap utilities companies selected from the S&P 500 Utilities Index (S5UTIL) and MLPs selected from the Cushing® 30 MLP Index (MLPX). The Cushing® Transportation Index tracks the performance of large cap transportation companies selected from the Dow Jones Transportation Average™ (TRAN) and MLPs selected from the Cushing® 30 MLP Index (MLPX). The Cushing® Energy Supply Chain Index tracks the performance of large cap energy and materials companies selected from the S&P 500 Energy Index (SPN) and the S&P 500 Materials Index and MLPs selected from the Cushing® 30 MLP Index (MLPX). The S&P 500® Energy Index (SPN) comprises those companies included in the S&P 500 that are classified as members of the GICS energy sector. The S&P 500 Utilities Index (S5UTIL) comprises those companies included in the S&P 500 that are classified as members of the GICS utility sector. The Dow Jones Transportation Average™ (TRAN) represents the stock performance of large, well-known U.S. companies within the transportation industry. The S&P 500 Materials Index comprises those companies included in the S&P 500 that are classified as members of the GICS materials sector. The S&P 500® Energy Index is an index of 500 stocks used industry wide as a macro level indicator of the overall U.S. equity market. The Cushing® 30 MLP Index (MLPX) tracks the performance of 30 publicly traded MLP securities that hold midstream energy infrastructure assets in North America, chosen according to a proprietary fundamental scoring model developed by Cushing to rank MLPs for potential inclusion in the index. It is not possible to invest in an index.
The Cushing® Energy Index, Cushing® Utility Index, Cushing® Transportation Index, Cushing® Energy Supply Chain Index (the "Indices") are the exclusive property of Swank Capital, LLC, and Cushing Asset Management, LP, which have contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) ("S&P Dow Jones Indices") to calculate and maintain the Index. S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("SPFS"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and, these trademarks have been licensed to S&P Dow Jones Indices. "Calculated by S&P Dow Jones Indices" and its related stylized mark(s) have been licensed for use by Swank Capital, LLC, and Cushing Asset Management, LP. Neither S&P Dow Jones Indices, SPFS, Dow Jones nor any of their affiliates sponsor and promote the Indices and none shall be liable for any errors or omissions in calculating the Indices.
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