Market Overview

Five MLP ETFs Your Broker Forgot to Mention

Share:

By now, most income investors know that master limited partnerships have been a dominant asset class in terms of returns for at least several years. As Benzinga previously noted, the level of investment in MLPs has surged to $250 billion as of late 2011 from $30 billion in 2003.

Impressive to say the least and those gains have come with good reason. Not only have MLPs been generating substantial alpha for investors, but the tax advantages, robust yields and steadily rising distributions are all sources of attraction.

But when it comes to MLP ETFs, investors had to live with just one option for quite a while. That option was the JPMorgan Alerian MLP Index ETN (NYSE: AMJ). Fortunately, the rising popularity of MLPs has lead to increased proliferation of ETFs tracking this group and that means a few MLP ETF options are bound to fly under the radar.

Here are a few your broker may have forgotten to tell you about.

ALPS Alerian MLP ETF (NYSE: AMLP) The ALPS Alerian MLP ETF is coming off a solid 2011 that saw the ETF gain over 8.3%. Home to 25 stocks and an expense ratio of 0.85%, AMLP currently sports a dividend yield of almost 6.3% and if the ETF can crack resistance at $17, more gains to start the new year could be on the way. AMLP is heavily concentrated in the biggest MLPs, such as Kinder Morgan Energy Partners (NYSE: KMP) and Enterprise Products (NYSE: EPD).

UBS E-TRACS Alerian MLP Infrastructure ETN (NYSE: MLPI) The UBS E-TRACS Alerian MLP Infrastructure ETN is also home to 25 stocks and an expense ratio of 0.85%. And like AMLP, MLPI is heavily concentrated in Enterprise Products, Kinder Morgan Energy and Magellan Midstream (NYSE: MMP) as those three stocks account for almost 26% of MLPI's weight. The ETF will celebrate its second birthday in March and has amassed an impressive $213 million in assets under management since its 2010 debut. Current yield: 5%.

UBS E-TRACS Alerian Natural Gas MLP ETN (NYSE: MLPG) If ever there was an MLP ETF or ETN that flew under the radar, the UBS E-TRACS Alerian Natural Gas MLP ETN is it. MLPG tracks an whose constituents earn the majority of their cash flow from the transportation, storage, and processing of natural gas and natural gas liquids, provides investors with a benchmark for the infrastructure component of the natural gas industry, according to the UBS Web site.

That means stocks like MarkWest (NYSE: MWE), Copano Energy (Nasdaq: CPNO) and Oneok Partners (NYSE: OKS) are found among the ETN's top-10 holdings. After gaining almost 8.5% last year, MLPG could add to those gains on a move above $30.50. Current yield: 5.2%.

Credit Suisse Cushing 30 MLP Index ETN (NYSE: MLPN) Like the other members of this list, MLPN has an expense ratio of 0.85%,, but the ETN is home to 30 stocks and the fund does a good job of spreading that weight around as no stock receives an allocation greater than 3.45%. Oh yeah, with a gain of 10.5% last year, MLPN is the top 2011 performer among the non-leveraged offerings on this list. Current yield: 5.4%.

UBS E-TRACS 2x Long Alerian MLP Infrastructure ETN (NYSE: MLPL) Yes, the leveraged ETF craze has found its way to the MLP world as highlighted by the mere existence of MLPL. Despite all the criticism of leveraged funds, someone must like MLPL because it has almost $94 million in AUM and it's not even two-years old. MLPL tracks the Alerian MLP Infrastructure Index, which is home to 25 stocks. You may not like leveraged ETFs and ETNs, but MLPL does have a yield of 10.5% and the ETN was up over 32% last year.

Posted-In: Long Ideas News Sector ETFs Short Ideas Dividends Dividends Specialty ETFs Futures Best of Benzinga

 

Related Articles (AMJ + AMLP)

View Comments and Join the Discussion!

The 10 Best Things About 2011

War Imminent in Straits of Hormuz? $200 a Barrel Oil?