The ALPS Alerian MLP ETF (NYSEArca: AMLP), the largest exchange traded fund holding master limited partnerships (MLPs), is getting a lift this year from higher oil prices and investors’ thirst for higher-yielding assets.
MLPs primarily deal with the distribution and storage of energy products, so their business model is less reliant on the commodities market since MLPs profit off the quantity of oil and natural gas they are able to move around.
Related: Downtrodden MLP ETFs May Offer Long-Term Opportunity
Other high-yielding options in the MLP exchange traded funds arena include the Global X MLP & Energy Infrastructure ETF (NYSEArca: MLPX), InfraCap MLP ETF (NYSEArca: AMZA) and the Tortoise North American Pipeline Fund (NYSEArca: TPYP).
To qualify as an MLP, the companies pass through at least 90% of their income to investors, making the assets an attractive yield-generating investment.
[related_stories]MLPs don’t make their money based on oil or gas prices. Unlike other energy sector stocks, MLPs primarily deal with the distribution and storage of energy products, so their business model is less reliant on the commodities market since MLPs profit off the quantity of oil and natural gas they are able to move around.