The MLP ETF includes a group of dividend growing partnerships. Held pointed out that the underlying names in AMLP grew their distributions at a faster rate last quarter for the third quarter in a row. As witnessed in other areas of the market, dividend growth stocks and ETFs have outperformed in the long run, whereas dividend cutters have historically underperformed. AMLP outperformed many other MLP-related exchange traded products for the past year and 3-year periods.
Related: Master Limited Partnership ETFs Are Back on Trend
Investors should also monitor AMLP’s relationship with the United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures. Data out Thursday indicate U.S. oil production, which slipped for an 11th week, hit its lowest level since September 2014, further supporting the inventory drawdown. Crude production dipped 24,000 barrels per day to 8.77 million, but the number of active oil rigs in the U.S. remained unchanged at 318 last week, the least amount since October 2009.
Regarding USO, “AMLP shows a strong but not perfect relationship. If we look at the 20-day correlation measurement near the bottom of the chart below, we’ll see it is often strong, running 0.75 or greater, but there are clearly periods of divergence,” according to TheStreet.com.
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ALPS Alerian MLP ETF
