The Alerian Energy Infrastructure ETF (ENFR) is a great option for investors concerned about market volatility and inflation. It offers exposure to North American energy infrastructure, split roughly evenly between U.S. energy MLPs, U.S. General Partners, U.S. energy infrastructure companies, and Canadian energy infrastructure companies.
These companies frequently hold real assets such as storage tanks, processing centers, and pipelines. This offers them protection from inflation. As a midstream companies, they are less likely to experience the volatility that currently plagues both upstream and downstream firms. The pivot to renewable energy will likely have long-term impacts across all streams, but oil and gas are going to still play a role in the energy grid for decades to come. That said, the midstream arguably has more maneuverability to adapt.
ENFR Has Choice Holdings
The largest holding for ENFR is Enbridge Inc. (ENB) at 9.69%. According to Zack’s, ENB has outpaced the S&P 500 over the past month, with revenue expected to grow 25.05% from last year.
Candian firm TC Energy Corp. (TRP) has had three straight days of gains as of Friday and is also outperforming the market. TRP accounts for 7.9% of ENFR’s holdings.
Another holding, Energy Transfer, LP (ET) is expected to benefit from the decision to keep the Dakota Access Pipeline project open while the US Army Core of Engineers composes an Environmental Impact Statement. The company also paid down $3.7 billion in debt during the last quarter.
ENFR has a little over 5% of its holdings in Kinder Morgan, Inc. (KMI). KMI has the largest natural gas transportation network in North America and is responsible for transporting over 40% of the U.S.’s natural gas. After some earnings estimate revisions over the past month, KMI is now anticipating a growth of 47.7% this year. KMI benefits from a steady flow of fee-based revenues across its roughly 70,000 miles of pipelines.
ENFR has an expense ratio of 0.35%
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