Every discussion of MWHS eventually reaches the same question: what does the Fund actually own, and how does that exposure work?

The Skylar Electricity Futures ETF (NYSE Arca: MWHS) is an actively managed ETF that seeks capital appreciation primarily through investments in U.S. electricity futures contracts. The Fund does not track an index, and it does not invest in utility, generation, transmission, or electricity-infrastructure equities. Its investment program is built around cash-settled electricity futures, principally contracts linked to the Electric Reliability Council of Texas, Inc. (ERCOT) and PJM Interconnection LLC (PJM).

This is an essential description. The details below explain how the Fund pursues it.

The Investment Program

Under normal circumstances, MWHS 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. For purposes of that policy, derivative instruments are valued at their notional value.

The Fund seeks a portfolio of cash-settled electricity futures with less than two years remaining to expiration. It generally focuses on ERCOT and PJM contracts listed on ICE Futures U.S. The Fund’s market weights are generally informed by trading volume and/or open interest, although the Sub-Adviser may adjust those weights based on its expectations for how trading activity may change.

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 gain its electricity-futures exposure through a wholly owned Cayman Islands subsidiary. The subsidiary follows the same compliance policies and procedures and is subject to the same investment restrictions and limitations as the Fund when measured on a consolidated basis.

MWHS is actively managed by Skylar Capital Management, LP, the Fund’s Sub-Adviser. Active management does not mean that the Fund is designed to forecast or trade around short-term power events. It means the Fund does not seek to replicate an index and that the Sub-Adviser implements the Fund’s disclosed investment program, including contract selection, positioning across eligible futures, and the timing of purchases, sales, and rolls, subject to the Fund’s investment policies and applicable requirements.

Contract Selection and the Curve

Electricity futures are defined by the market benchmark, delivery period, and other contract terms. Contracts generally settle financially against a published wholesale electricity-price benchmark for a specified period, rather than requiring the Fund to take or make physical delivery of power.

MWHS generally holds futures with less than two years until expiration. As a contract approaches expiration, the Fund may sell it and establish exposure in a later-dated contract. This process is known as rolling. The Fund is not required to roll contracts on a fixed schedule; it may do so at times determined by the Sub-Adviser based on prevailing market conditions and other factors.

The shape of the futures curve can affect results. When later-dated contracts trade above nearer-dated contracts, a condition known as contango, rolling a position can create negative roll yield. When later-dated contracts trade below nearer-dated contracts, a condition known as backwardation, rolling can create positive roll yield. Roll yield, trading costs, liquidity, and the relationship between futures prices and the applicable settlement benchmark can all influence Fund performance.

The Fund regularly purchases and sells individual futures contracts to maintain its exposure. That activity can result in portfolio turnover and transaction costs. It also means that the Fund’s results may not match the price movement of any single electricity contract, delivery month, hub, or spot-market observation.

Collateral and Fund Structure

Futures positions require collateral and liquidity management. MWHS may hold short-term debt securities, cash, cash equivalents, U.S. Treasury securities, ETFs that invest in short-duration U.S. Treasury securities, and short-duration fixed-income ETFs as collateral instruments. These holdings are intended to provide liquidity and serve as collateral for the Fund’s electricity-futures positions.

Collateral instruments are part of the Fund’s structure; they should not be confused with the Fund’s intended electricity-futures exposure. Their returns and risks may affect Fund performance. Short-term debt securities, cash-management vehicles, and underlying ETFs can be subject to interest-rate, credit, liquidity, valuation, and other risks.

The use of a Cayman Islands subsidiary is also structural. The subsidiary is not registered under the Investment Company Act of 1940, but it is advised by the Sub-Adviser and operates under the Fund’s compliance framework on a consolidated basis. The Fund’s investment in the subsidiary is intended to provide exposure to electricity futures in accordance with applicable tax rules and regulations.

What MWHS Is—and Is Not

MWHS is a specialized futures-based ETF. It is designed to provide exposure to U.S. electricity futures, principally in ERCOT and PJM, rather than ownership of energy or utility companies. Its active management, futures positions, collateral holdings, and subsidiary structure are integral parts of how the Fund seeks to pursue its objective.

The Fund is not a broad energy fund, a utility-equity strategy, or a passive index product. It is also not a direct futures account in an investor’s name. The Fund’s shares trade on an exchange, while the Fund itself manages the underlying futures exposure within its disclosed investment program.

For a discussion of why ERCOT and PJM are central to the Fund’s opportunity set, see ERCOT and PJM: The Power Markets That Matter. For a comparison between electricity futures exposure and utility or infrastructure equities, see Electricity vs. Utilities: The MWHS Distinction.

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 subject to substantial risk, including commodities risk, commodity regulatory risk, electricity futures regulatory risk, energy market exposure risk, futures contract risk, futures investment risk, derivatives risk, leverage risk, liquidity risk, management risk, non-diversification risk, subsidiary risk, counterparty risk, and regulatory or market-structure risk.

Commodity futures and other derivatives can be volatile. A relatively small movement in futures prices may result in immediate and substantial gains or losses. The Fund’s roll strategy may create positive or negative roll yield, and trading costs associated with rolling may detract from performance. Electricity futures may be affected by weather, fuel input costs, generation availability, transmission constraints, grid conditions, and changes in supply-demand dynamics. The Fund’s focus on ERCOT and PJM may increase its exposure to conditions affecting those markets.

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.

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 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.