What is the contribution of the Enhanced Midstream Energy ETF (MDST) to WHG’s fee and distribution income?
Answer
The press release does not give a line‑item breakdown of Westwood Holdings Group, Inc. (WHG)’s total fee‑and‑distribution income, so we can’t quote an exact dollar amount for the contribution of the Enhanced Midstream Energy ETF (MDST). However, the information that is provided allows us to estimate the scale of the distribution component and to describe the likely sources of fee income.
1. What the release tells us
| Item | Figure from the release |
|---|---|
| ETF name | Enhanced Midstream Energy ETF (ticker MDST) |
| Assets under management (AUM) for MDST | $100 million (the ETF “surpassed $100 million”) |
| Distribution rate | 10.2 % per annum (p.a.) |
| Other context | WHG’s total AUM is $18.3 billion, up from $16.8 billion a year earlier. WHG is a public company in its 24th year and is a member of the Russell 2000 Index. |
2. Estimated distribution income from MDST
The distribution rate is a cash‑return yield that the ETF pays to its shareholders.
- Annual distribution = AUM × distribution rate
- $100 M × 10.2 % = $10.2 million per year
Thus, MDST alone is expected to generate roughly $10.2 million in distribution income for WHG each year (assuming the $100 M AUM level and the 10.2 % payout rate remain constant).
3. Expected fee income from MDST
While the release does not disclose the management‑fee percentage that WHG charges on the ETF, fee income for an ETF typically comes from:
| Source | How it is calculated (typical industry practice) |
|---|---|
| Management (or “expense”) fee | A % of the ETF’s net assets (e.g., 0.10 %–0.30 % of AUM) |
| Other service fees (e.g., custody, administration) | Fixed or variable charges that are also %‑based on AUM |
Because the exact fee schedule is not provided, we can only state that MDST’s $100 M asset base will generate fee income proportional to WHG’s standard ETF fee structure. If WHG’s fee were, for example, 0.20 % of AUM (a common mid‑size ETF rate), the annual fee revenue would be:
- $100 M × 0.20 % = $200,000 per year.
The real figure could be higher or lower depending on WHG’s specific fee arrangement, but the key point is that MDST contributes both a sizable distribution payout (≈ $10.2 M) and a steady stream of fee revenue derived from its $100 M asset base.
4. How MDST fits into WHG’s overall earnings picture
- Scale: MDST’s $100 M AUM represents ≈ 0.55 % of WHG’s total AUM of $18.3 B. While it is a modest slice of the firm’s balance sheet, the ETF’s high distribution rate makes its cash‑return contribution disproportionately large relative to its size.
- Growth: The fact that MDST has just crossed the $100 M threshold suggests it is still expanding, so both its fee and distribution income are likely to rise in future quarters.
- Diversification: MDST adds a “energy‑focused” high‑yield product to WHG’s suite, complementing the broader “Defined Volatility®” ETF family that now includes 11 sector funds.
5. Bottom line
| Contribution component | Approximate amount (based on disclosed data) |
|---|---|
| Distribution income | ~ $10.2 million per year (10.2 % of $100 M AUM) |
| Fee income | Not disclosed; generated from the $100 M AUM at WHG’s standard ETF fee rate (e.g., a 0.20 % fee would be ≈ $200 k annually). |
Therefore, the Enhanced Midstream Energy ETF (MDST) is a significant source of cash‑distribution income for WHG—about $10.2 million annually—and also contributes fee income proportional to its $100 million asset base, though the exact fee amount is not specified in the release.