Exchange traded fund providers are dishing out more master limited partnership funds as a way to appease the growing demand for yield. While already offering an MLP related ETF of its own, Global X on Tuesday launched one aimed at capturing the small-cap segment of the industry.
Global X, which offers the Global X MLP ETF (NYSEArca: MLPA), listed the Global X Junior MLP ETF (NYSEArca: MLPJ) Tuesday. MLPJ will be the first and only ETF to target the small-cap companies in the MLP industry.
The fund is the second MLP exchange traded product to launch this month, following iPath S&P MLP ETN (NYSEArca: IMLP). [Master Limited Partnerships Yielding Over 5% Get Another ETF]
“As the energy infrastructure in North America continues to expand, smaller capitalization MLPs often control increasingly important energy assets and are active in the exploration, transportation and storage of domestic energy resources,” Global X said. “Because many of these companies are not included in major MLP indices, in many cases they have not experienced the same price growth as their larger counterparts and may offer value at current levels.”
MLPJ will track the Solactive Junior MLP Index, which is comprised of companies with a market cap ranging from $200 million to $2.5 billion, and includes 25 holdings. It comes with a 0.75% expense ratio.
Top holdings include Suburban Propane Partners 6.8%, Northern Tier Energy 6.6%, Alliance Resources Partners 6.5%, TC Pipelines 6.4% and Natural Resource Partners 6.3%.