EMLP, which has a 12-month distribution yield of 3.1%, allocates a combined 14.4% of its weight to Kinder Morgan Management (NYSE: KMR), Williams Cos (NYSE: WMB) and Kinder Morgan (NYSE: KMI), meaning the ETF has enjoyed significant leverage to the raft of consolidation that has taken place in the MLP space this year.
Nearly 37.5% of EMLP’s weight is allocated to utilities, which has been a boon for the ETF in a year in which that sector has surged. Although MLPs and utilities are viewed as rate-sensitive asset classes, that does not mean if rates rise, EMLP is destined to be a laggard.
Since 2000, yields on benchmark 10-year Treasuries finished higher in five calendar years. Meanwhile, the Alerian MLP Index posted positive returns in each of those five years – 2003, 2005, 2006, 2009 and 2013.
Investors clearly like EMLP’s story. The ETF now has $939.4 million in assets under management of which over $380 million has come into the fund this year.
First Trust North American Energy Infrastructure Fund
