TPYP “is more diversified than a pure MLP index. In fact, it has 55% of the portfolio in traditional MLPs and the remaining in energy-related corporations and LLCs. This broadens the exposure to include nearly 90 stocks rather than the conventional 25-40 holdings that most dedicated MLP indexes are beholden to,” reports ETF Daily News.
With the markets flooded with oil and prices still depressed, basic economic theory suggests that consumption could rise to capitalize on the cheap crude. With higher consumption, MLP tollkeepers could profit off the increased transportation or storage of energy.
“Other than the obvious benefits of diversification, another advantage of investing in this sector through an ETF is that investors aren’t subject to a K-1 tax form. Owners of TPYP (and similar ETFs) are subject to standard 1099 dividend income just like a traditional stock fund,” according to ETF Daily News.
TPYP charges 0.4% per year, or $40 on a $10,000 investment. That is one of the lowest fees among MLP ETFs.
For more information on master limited partnerships, visit our MLPs category.