What are the terms of this new investment?
Ninepoint Partners LP (Ninepoint) and Tidal Investments LLC have jointly filed an initial registration statement with the US Securities and Exchange Commission (SEC) for two new actively managed exchange-traded funds (ETFs) focused on the energy sector: the Ninepoint Energy ETF and the Ninepoint Energy Income ETF.
According to a news release, the Ninepoint Energy ETF aims to achieve long-term capital growth by investing in equity securities of global companies engaged in the exploration, development, production, and distribution of oil, gas, coal, uranium, and related activities. This ETF is designed for investors seeking exposure to the broader energy and resource sectors.
In contrast, the Ninepoint Energy Income ETF targets both income and capital appreciation. This fund will primarily invest in equity securities of North American energy companies involved in similar activities as the Ninepoint Energy ETF. Additionally, it will utilize a covered call strategy to generate yield and support its annual income distribution target. This strategy involves writing call options on the fund’s holdings to produce income. The fund may also hold cash and cash equivalents and use forward foreign currency contracts to manage foreign currency risk.
James Fox, co-CEO and managing partner at Ninepoint Partners, expressed enthusiasm about the new venture. “We are thrilled to partner with Tidal as we embark on this new venture and introduce our innovative funds to the US market,” Fox stated. “This filing represents a significant milestone for Ninepoint, and we look forward to building strong relationships and contributing to the growth of the financial landscape in the United States.”
The registration statement for the Ninepoint ETFs has been filed with the SEC but has not yet become effective. Consequently, shares of these ETFs cannot be sold, nor can offers to purchase be accepted until the registration statement is approved. The preliminary prospectus and additional information will be subject to completion and amendment, the news release noted.
Ninepoint has advised investors to carefully review the investment objectives, risks, charges, and expenses outlined in the prospectus before investing. The prospectus will provide detailed information about the ETFs’ investment strategies and associated risks, including energy sector risk, derivatives risk, concentration risk, foreign securities risk, new fund risk, and non-diversification risk.
The Ninepoint ETFs will be distributed in the United States by Foreside Fund Services, LLC, which is not affiliated with Ninepoint Partners LP. For further details, potential investors can access the preliminary prospectus through the SEC’s website or contact Ninepoint Partners directly.
Ninepoint Partners, based in Toronto, manages approximately $7 billion in assets and offers a diverse range of alternative investment strategies. The firm focuses on innovative investment solutions, with an aim to enhance returns and manage portfolio risk.
