Most investors already own something connected to energy. They may hold utilities, pipelines, integrated energy companies, infrastructure funds, or broad commodity strategies. Those exposures can serve legitimate purposes. None should be mistaken for owning the price of electricity itself.
That distinction sits at the center of MWHS.
A utility is a company. Its stock reflects the economics of a regulated business, along with management decisions, capital plans, financing costs, rate cases, dividend policy, earnings expectations, and the broader equity market. Wholesale electricity prices can influence some of those variables, but they are only one input among many. A utility may operate generation assets in an attractive power market and still see its shares move on interest rates, regulatory developments, or company-specific execution.
The same separation applies to the wider energy universe. Broad energy funds may hold oil producers, natural-gas companies, refiners, midstream businesses, or integrated majors. Infrastructure portfolios may own pipelines, transmission developers, and related assets. Those vehicles offer exposure to businesses that produce, transport, finance, or support energy. They do not isolate the forward price of wholesale electricity.
MWHS was designed for that narrower purpose.
Corporate Exposure and Commodity Exposure Are Not Interchangeable
Utilities are often the first place investors look when electricity demand becomes a market theme. That is understandable. Utilities own assets, build infrastructure, and provide an essential service. Yet the investment case for a regulated utility and the price behavior of electricity futures answer different questions.
A utility investor evaluates a corporate issuer: its authorized return on equity, rate-base growth, capital expenditure program, financing needs, customer mix, regulatory relationships, and valuation. An electricity-futures investor has exposure to a standardized contract whose value is tied to the applicable forward wholesale power benchmark. The two can be influenced by the same broad developments while producing very different outcomes.
Higher demand illustrates the distinction. A utility may need to spend heavily to serve new load, issue capital to finance that buildout, and seek regulatory recovery over time. Those conditions can be favorable, challenging, or both, depending on the company and jurisdiction. A wholesale power contract responds to the market’s pricing of electricity for a specified location and delivery period. Neither exposure is a substitute for the other.
That is not a hierarchy. It is an exposure map.
What Broad Energy Products Can—and Cannot—Express
Broad energy products solve a different problem. They can provide diversified exposure across fuel markets and energy-related businesses, but electricity is often a small component of the portfolio or absent altogether. Oil and natural gas have global and domestic supply-demand drivers of their own. Energy-company equities also introduce operating, balance-sheet, and valuation risk.
Electricity can be connected to those markets without being reducible to them. Natural gas is an important input to U.S. power generation, for example, but a natural-gas position does not reproduce wholesale electricity prices. Local demand, available generation, transmission conditions, delivery-period expectations, and other market-specific factors can all affect the relationship between gas and power.
Infrastructure funds create another form of adjacent exposure. They may benefit from long-term investment in transmission, generation, or grid modernization, but their returns are still driven by the businesses and securities held in the portfolio. That is a different proposition from holding futures linked to wholesale electricity benchmarks.
For a fuller explanation of why ERCOT and PJM are the two power markets at the center of MWHS, see ERCOT and PJM: The Power Markets That Matter.
The MWHS Difference
The Skylar Electricity Futures ETF (NYSE Arca: MWHS) seeks capital appreciation primarily through investments in U.S. electricity futures contracts, with a primary focus on ERCOT and PJM. The Fund does not invest in equity securities of companies involved in the electricity or utilities industries that produce or transmit electricity, or in companies involved in building electricity infrastructure.
That design makes MWHS a specialized exposure. It is not a utility-income fund, a diversified energy-equity strategy, or an infrastructure portfolio. It is also not intended to replace those categories. The Fund provides futures-based exposure to wholesale electricity prices through listed contracts, while utility, infrastructure, and energy-equity investments provide exposure to companies and assets whose performance is shaped by a broader set of corporate and market variables.
The distinction is especially relevant for investors evaluating whether an existing energy allocation already captures the electricity theme. It may capture related businesses. It may not provide direct exposure to the underlying wholesale power benchmarks.
A Different Set of Risks
The same characteristics that distinguish MWHS also create a different risk profile. Electricity futures can be volatile and may be affected by weather, fuel costs, changes in supply and demand, transmission constraints, liquidity conditions, contract roll, and regulatory or market-structure developments. The Fund is non-diversified and its focus on ERCOT and PJM can increase exposure to conditions in those markets. Futures and any related derivatives exposure involve the risk of substantial losses.
Utility stocks, energy equities, and infrastructure funds carry risks of their own, including equity-market risk, company-specific risk, interest-rate sensitivity, regulatory risk, and valuation risk. The comparison is not about eliminating risk. It is about identifying the type of exposure an investor is considering.
MWHS belongs in that discussion as a distinct tool: one designed to provide futures-based exposure to wholesale electricity prices, not an equity proxy for the power sector.
Important Information
The Skylar Electricity Futures ETF (NYSE Arca: MWHS) seeks capital appreciation primarily through investments in U.S. electricity futures contracts. The Fund is an actively managed exchange-traded fund and, under normal circumstances, invests at least 80% of its net assets, plus borrowings for investment purposes, in electricity futures contracts or investments that provide exposure to electricity futures. The Fund may invest directly in electricity futures or obtain indirect exposure through total return swaps that use electricity futures as the reference asset. The Fund expects to obtain its exposure through a wholly owned subsidiary organized under the laws of the Cayman Islands.
The Fund is subject to substantial risk, including commodity futures risk, derivatives risk, market volatility, non-diversification risk, regional concentration risk, liquidity risk, counterparty risk, and regulatory or market-structure risk. Because the Fund focuses on electricity futures in ERCOT and PJM, its performance may be significantly affected by regional weather events, fuel input costs, transmission constraints, grid conditions, and changes in supply-demand dynamics.
An investment in MWHS is not a bank deposit, is not insured by the FDIC or any other government agency, and may lose value. Past performance does not guarantee future results. Investors should consider the Fund’s investment objectives, risks, charges, and expenses carefully before investing. The prospectus and summary prospectus contain this and other information and should be read carefully before investing.
Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call (888) 806-6567 or visit the website at https://skylaretfs.com/investor-materials. Read the prospectus or summary prospectus carefully before investing.
The Fund is distributed by Foreside Fund Services, LLC. Exchange Traded Concepts, LLC serves as the investment advisor of the Fund. Skylar Capital Management, LP serves as sub-advisor of the Fund. Foreside Fund Services, LLC is not affiliated with Exchange Traded Concepts, LLC, Skylar Capital Management, LP, or any of its affiliates.
Risk Disclosures:
Investing involves risk, including possible loss of principal. There is no guarantee the Fund will achieve their stated objectives.
New Fund Risk. The Fund is new and currently has fewer assets than larger funds, and like other new funds, large inflows and outflows may impact the Fund’s market exposure for limited periods of time. This impact may be positive or negative, depending on the direction of market movement during the period affected. Additionally, because the Fund has fewer assets than larger funds over which to spread its fixed costs, its expense levels on a percentage basis will be higher than that of a larger Fund.
Non-Diversification Risk. The Fund is non-diversified under the 1940 Act, meaning that, as compared to a diversified fund, it can invest a greater percentage of its assets in securities issued by or representing a small number of issuers. As a result, the performance of these issuers can have a substantial impact on the Fund’s performance.
Commodities Risk. Commodity prices can have significant volatility, and exposure to commodities can cause the value of the Fund’s shares to decline or fluctuate in a rapid and unpredictable manner.
Commodity Regulatory Risk. The Fund’s use of commodities subject to regulation by the CFTC has caused the Fund to be classified as a “commodity pool” and this designation requires that the Fund comply with CFTC rules, which may impose additional regulatory requirements and compliance obligations.
Futures Investment Risk. The Fund’s rolling strategy involves the replacement of shorter dated futures contracts with longer-dated futures contracts. The net asset value of the Fund may be adversely affected by the cost of rolling positions forward where prices of the futures contracts with later expiration dates are higher than those with earlier expiration dates, which would create a negative “roll yield” known as “contango.”
Derivatives Risk. The use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments.
Electricity Futures Regulatory Risk. The wholesale electricity markets operated by ERCOT, PJM, and other RTOs and ISOs are subject to extensive regulation, and the rules, protocols, and market structures governing these markets may be modified or amended at any time.
Premium/Discount Risk. The market price of the Fund’s shares will generally fluctuate in accordance with changes in the Fund’s net asset value as well as the relative supply of and demand for shares on the Exchange. The Fund’s investment adviser cannot predict whether shares will trade below, at or above their net asset value because the shares trade on the Exchange at market prices and not at net asset value. Price differences may be due, in large part, to the fact that supply and demand forces at work in the secondary trading market for shares will be closely related, but not identical, to the same forces influencing the prices of the holdings of the Fund trading individually or in the aggregate at any point in time. During stressed market conditions, the market for the Fund’s shares may become less liquid in response to deteriorating liquidity in the market for the Fund’s underlying portfolio holdings, which could in turn lead to differences between the market price of the Fund’s shares and their net asset value and the bid/ask spread on the Fund’s shares may widen. Additionally, the Fund’s shares may trade at a significant premium or discount to their net asset value in the event that a lead market maker is unwilling or unable to make a market in the Fund’s shares.
Net Asset Value (NAV). NAV per share for the Fund is computed by dividing the value of the net assets of that Fund (I.e., the value of its total assets less total liabilities) by its total number of shares outstanding. Expenses and fees, including management and distribution fees, if any, are accrued daily and taken into account for purposes of determining NAV. NAV is determined each business day, normally at 4:00 p.m. Eastern Time.
Market Price. The current price at which shares are bought and sold.
The Electric Reliability Council of Texas, Inc. (ERCOT) is a nonprofit organization that ensures reliable electric service for 90 percent of the state of Texas. The grid operator is regulated by the Public Utility Commission of Texas and the Texas Legislature. As of March 2026, ERCOT reported that it offers over 104,000 megawatts of generation capacity and manages the flow of electric power to more than 27 million Texas customers, representing about 90 percent of the state’s electric load.
PJM Interconnection LLC (PJM) is an RTO that coordinates the movement of wholesale electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and the District of Columbia. As of December 31, 2024, PJM reported that it provided electricity to over 67 million people and offers over 182,000 megawatts of generation capacity, generating over $51.7 billion in annual billings.
