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Cushing® ETFs seek to provide investors with sector exposure by seeking to replicate the performance of corresponding Cushing® Indices. The energy, utility, transportation, and energy supply chain indices are sector oriented with a custom yield weighing methodology and include master limited partnerships (MLPs), which is designed to add an income focus and diversification while maintaining the overall sector attributes.
Energy MLPs and midstream corporations are companies engaged in gathering, processing, transportation and storage of natural gas, crude oil, and other related hydrocarbons. The companies comprising the sector indices and MLP business lines are complementary, while the MLPs provide income opportunities in addition to the income from other companies in the sector indices. Limiting MLP exposure to 24% is designed to allow for Form 1099 tax reporting; no schedule K-1.
The inclusion of constituents from S&P 500 Energy, Utility, Materials, and the Dow Jones Transportation Average provides a well-known index foundation. The addition of MLPs and midstream companies from the Cushing® 30 MLP Index provides constituents operating in related businesses.
Yield weighting sector constituents and adding MLPs is designed to maintains sector exposure while increasing the focus on yield rather than market capitalization or share price. Limiting the constituent and MLP exposure aims to keep concentration in check while focusing on yield.
Cushing® Asset Management is an investment firm with deep experience in the energy, materials, and industrials sectors. Cushing invests in companies across the entire energy value chain, ranging from upstream to downstream and everything in-between. The firms definition of downstream not only encompasses refiners of crude oil and natural gas products but also commercial consumers of these products, such as industrial, transportation, chemical companies, and utilities.
The firms products include private funds, registered open and closed end funds, separately managed accounts, and indices. It is the firms index offering that forms the basis for the Sector Plus ETFs. The sectors represented in the ETF suite include energy, energy supply chain (which includes both energy and materials companies), transportation, and utilities. The Plus refers to MLPs. Select MLPs from the firms Cushing® 30 MLP Index are included in the sector indices and thus, are included in the ETFs.
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 or click on one of the following prospectusesXLEY ProspectusXLSY ProspectusXLTY ProspectusXLUY Prospectus. Please read the prospectus and summary prospectus carefully before investing.
Investments involve risk. Principal loss is possible. The Funds have the same risks as the underlying securities traded on the exchange throughout the day at market price. The Funds investments will be concentrated in an industry or group of industries to the extent the Index is so concentrated, and the Index is expected to be concentrated in energy, utility, materials, and industrial industries. The Fund is a recently organized, non-diversified management investment company with no operating history. As a result, prospective investors have no track record or history on which to base their investment decision. The Fund will be considered to be non-diversified, which means that it may invest more of its assets in the securities of a single issuer or a smaller number of issuers than if it were a diversified fund. As with all ETFs, Shares may be bought and sold in the secondary market at market prices. Although it is expected that the market price of Shares will approximate the Funds NAV, there may be times when the market price of Shares is more than the NAV intra-day (premium) or less than the NAV intra-day (discount) due to supply and demand of Shares or during periods of market volatility. The equity securities of smaller companies have historically been subject to greater investment risk than securities of larger companies.
The Funds assets will be concentrated in the energy and industrials sectors, so it will be more effected by the those sectors performance. Master Limited Partnerships (MLPs) concentrate investments in the natural resource sector and are subject to the risks of energy prices and demand and the volatility of commodity investments. MLPs are subject 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 the Fund which could result in a reduction of the Funds value.
The S&P 500 Index is an index of 500 stocks used industry wide as a macro level indicator of the overall U.S. equity market. The S&P 500 Energy Index comprises those companies included in the S&P 500 that are classified as members of the GICS energy sector. The S&P 500 Utility Index comprises those companies included in the S&P 500 that are classified as members of the GICS utility sector. 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 Dow Jones Transportation Index represents the stock performance of large, well-known U.S. companies within the transportation industry. Cushing® 30 MLP Index, an equally weighted index of 30 MLPs and non-MLP midstream companies selected using a formula-based, proprietary valuation methodology. It is not possible to invest in an index.
Diversification does not assure a profit nor protect against principal loss in a declining market.
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 offered only to United States residents, and information on this website is intended only for such persons. Nothing on this website should be considered a solicitation to buy or an offer to sell shares of any Cushing ETFs in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction.
The Cushing ETFs are distributed by Quasar Distributors, LLC.
Quasar Distributors, LLC is affiliated with U.S. Bank Global Fund Services, LLC.
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