The actively managed First Trust North American Energy Infrastructure Fund (NYSEArca: EMLP) was the first ETF to limit direct MLP exposure to less than 25% and holds exposure to MLP affiliates and other energy infrastructure stocks. EMLP has a 0.95% expense ratio and a 2.69% 30-day SEC yield.
MLPs build, acquire and operate transportation assets. While investors link MLPs with energy, specifically natural gas and crude oil, they are more involved with transporting the commodities. Consequently, the performance of MLPs is less dependent on commodity prices than on how much of the commodity is pushed through. [What is an ETF? — Part 30: Master Limited Partnerships]
According to Global X, MLPs show a low-correlation to traditional assets, which helps diversify a portfolio. The assets pay out the majority of their operation cash flow in the form of quarterly dividends. Additionally, the MLP contracts are long-term and have built-in inflation protection measures.
MLP fund investors will not be required to fill out K-1 forms. Instead, investors will receive a single 1099 form.
For more information on new fund products, visit our new ETFs category.
Max Chen contributed to this article.