HIPS is a high income-focused fund that invests in securities structured as pass-through entities1, including master-limited partnerships (MLPs), real estate investment trusts, closed-end funds and business development companies.
The strategy seeks to deliver high yield to investors without concentration risk in any one sector.
GraniteShares has lowered the management fee for HIPS to 70 basis points2. Like most of its sister products on the GraniteShares platform, there is no K-1 associated with HIPS.
“HIPS is an important acquisition for the firm as it seeks to serve as the benchmark for high income pass-through securities and has historically been one of the highest yielding ETFs in the market,” said GraniteShares CEO and ETF entrepreneur Will Rhind. “This fund looks to mitigate sector risk associated with portfolio overconcentration, something often found with MLP investments. With its diversity, liquidity and yield, HIPS furthers our mission of providing good ideas to investors in the form of ETFs.”
GraniteShares is an independent, fully funded ETF company headquartered in New York City. The firm seeks to launch disruptive ETFs. GraniteShares' focus is on products that bring the excitement back to investing, using new ideas, innovative structures and low cost. Will Rhind, Founder and CEO, is an established ETF entrepreneur with more than 16 years of experience in the industry.
EFFECTIVE AT CLOSE OF BUSINESS OF 12/18/2017, THE MASTER INCOME ETF WAS REORGANIZED AND ASSETS OF THE MASTER INCOME ETF WERE MERGED INTO THE GRANITESHARES HIPS US HIGH INCOME ETF.
1 Pass-through entities or securities are required to distribute substantially all of their earnings.
2 Gross Expense Ratio equals 1.55%, the Net Expense ratio is 1.42%. GraniteShares has contractually agreed to waive or reduce its fees and to reimburse the Acquiring Fund for its expenses for at least two years from the date of the Reorganization, 12/18/2017.
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 (844) 476 8747 OR VISIT THE WEBSITE AT WWW.GRANITESHARES.COM. READ THE PROSPECTUS OR SUMMARY PROSPECTUS CAREFULLY BEFORE INVESTING.
Investing involves risk. Past performance does not guarantee future performance or results. Principal loss is possible. Investments in debt securities typically decrease when interest rates rise. This risk is usually greater for longer term debt securities. Investments in lower rated and non-rated securities present a greater risk of loss to principal and interest than higher rated securities. Investments in foreign securities involves greater volatility and political, economic, and currency risks and differences in accounting methods. Investments in smaller companies involve additional risks, such as limited liquidity and greater volatility. Master Limited Partnerships ("MLPs") are subject to certain risks inherent in the structure of MLPs, including complex tax structure risks, 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. Investments in asset-backed and mortgage-backed securities include additional risks including credit risk, prepayment risk, possible illiquidity and default, as well as increased susceptibility to adverse economic developments. A Real Estate Investment Trusts ("REIT’s") share price may decline because of adverse developments affecting the real estate industry. REITs may have limited financial resources, may trade less frequently and in limited volume, and may be more volatile than other securities. The risks of investing in REITs include certain risks associated with the direct ownership of real estate and the real estate industry in general. Business Development Companies ("BDCs") may carry risks similar to a private equity or venture capital fund. BDCs usually trade at a discount to their NAV because they invest unlisted securities and have limited access to capital markets. Close-end Funds (CEFs") may be subject to leverage, liquidity risk, credit risk, and losses may be magnified due to the use of leverage. Leverage may increase the risk of loss and cause fluctuations in the market value of the Fund's portfolio to have disproportionately large effects or cause the NAV of the Fund generally to decline faster than it would otherwise. Unlike mutual funds, ETFs may trade at a premium or discount to their net asset value. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. An investment in the Fund does not receive the same tax advantages as a direct investment in a Pass-Thru Security. Funds accrue deferred income taxes for future tax liabilities associated with the portion of Pass-Thru Security distributions considered to be a tax-deferred return of capital and for any net operating gains as well as capital appreciation of its investments. This deferred tax liability is reflected in the daily NAV and as a result the Fund's after-tax performance could differ significantly from the underlying assets even if the pre-tax performance is closely tracked. The potential tax benefits from investing in Pass-Thru Securities depend on them being treated as partnerships for federal income tax purposes. Diversification does not assure a profit or protect against loss in a declining market.
The TFMS HIPS 300 Index is constructed to capture 300 high income securities, typically with pass-through structures, across the following sectors: (i) CEFs, (ii) mortgage REITs, (iii) commercial equity REITs, (iv) residential/diversified REITs, (v) asset management and BDCs, and (vi) energy production and energy transportation & processing companies. Energy-related companies included in the Index are expected to primarily be structured as MLPs. CEFs included in the Index are limited to taxable, debt-based funds and may include CEFs that invest primarily in bank loans, high-yield securities (also known as “junk bonds”), foreign securities (including those in emerging markets), and mortgage- or asset-backed securities. You may not directly invest in an index.
This information is not an offer to sell or a solicitation of an offer to buy shares of any Funds to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. Please consult your tax advisor about the tax consequences of an investment in Fund shares, including the possible application of foreign, state, and local tax laws.
You could lose money by investing in the ETFs. There can be no assurance that the investment objective of the Funds will be achieved. None of the Funds should be relied upon as a complete investment program. The investment program of the funds are speculative, entails substantial risks and include asset classes and investment techniques not employed by more traditional mutual funds. Investments in the ETFs are not bank deposits and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
The Fund is distributed by Foreside Fund Services, LLC, which is not affiliated with GraniteShares or any of its affiliates.