ETF Education Report: USCF Midstream Energy Income Fund (UMI)

What this ETF is trying to do

The USCF Midstream Energy Income Fund (UMI) is an ETF that focuses on the energy sector, specifically "midstream" companies. These are businesses that often handle the transportation and storage of energy products. The fund holds a variety of different companies in this space.

What the numbers show

When looking at an ETF, it is important to look at two different types of returns: price return and total return.

• Price Return: This measures only how much the share price changed. For UMI, the one-year price return was approximately 20.51%. The year-to-date (YTD) price return was about 22.60%.

• Total Return: This includes both the price change and the cash distributions paid out to investors. According to the data, the one-year total return was approximately 28.74%, and the YTD total return was about 26.37%.

To see how the share price has changed, we can look at the current price of $60.17 and compare it to an estimated price from roughly one year ago, which was approximately $49.93. This shows that the share price has increased over the last year.

Income and distribution explanation

This ETF is designed to provide regular cash payments, known as distributions. The distribution yield is approximately 6.61%. This number describes the cash distributions relative to the ETF's price. UMI usually pays these out monthly, with 12 distributions recorded over the last year.

It is important to remember that a high distribution yield does not mean an investor earned that exact percentage as their total return. Total return is the most complete way to see how much value was actually gained or lost.

NAV erosion explanation

"NAV erosion" refers to a situation where the Net Asset Value (the actual value of the assets held by the fund) decreases over time, often because the fund is paying out more than it earns. If an ETF's share price collapses while it pays high distributions, it can destroy the original amount of money invested (the principal).

For this ETF, the erosion-risk score is 100, and the label indicates "No price erosion detected." The erosion severity is described as "good," and there is no severe erosion-risk flag. This means the data does not show signs of the price deterioration often seen in eroding funds.

Top Holdings

The following are the Top Holdings for this fund (note that this list is partial):

• Energy Transfer LP (7.87%)

• Enterprise Products Partners LP (7.62%)

• Williams Companies Inc (7.03%)

• Enbridge Inc (6.97%)

• Targa Resources Corp (6.96%)

• Kinder Morgan Inc Class P (6.03%)

• DT Midstream Inc Ordinary Shares (5.85%)

• Oneok Inc (4.83%)

• TC Energy Corp (4.73%)

• Keyera Corp (4.70%)

*Holdings can change over time.*

Pros

• The fund has shown positive price returns and total returns over the last year and three years.

• It provides regular monthly distributions.

Cons

• The fund's performance depends on the energy midstream sector.

Beginner takeaway

When looking at income-focused ETFs, don't just look at the distribution yield. A high yield can sometimes be misleading if the share price is falling quickly. Investors often prefer funds where the price stays steady or grows, as this helps protect their original investment. Always check both the price return and the total return to get the full picture.