Under the Hood of Alerian’s MLP Index, AMZ | ETF Trends

The Alerian MLP Index is the leading gauge of energy infrastructure MLPs. The capped, float-adjusted, capitalization-weighted index’s constituents earn the majority of their cash flow from midstream activities involving energy commodities. 

AMZ is disseminated in real time on a price-return basis, and AMZX on a total-return basis.

AMZ’s index yield is 7.45%, compared to utilities at 3.12%, REITs at 2.86%, and the S&P 500 at 1.51%, according to Alerian.

The index comprises 28 constituents, and the top 10 holdings make up 78% of the index’s market value. 

Looking at AMZ’s sector weightings, pipeline transportation/petroleum carries the largest weight, amounting to 48.8%. Gathering and processing and pipeline transportation/natural gas account for 26.5% and 20.1%, respectively. 

Finally, amounting to less than 5% combined, there is liquefaction, storage, and rail terminaling. 

When looking for exposure to AMZ, there are a few funds to choose from, including the JPMorgan Alerian MLP Index ETN (AMJ), the ETRACS Alerian MLP Index ETN Series B (AMUB), and the ETRACS Quarterly Pay 1.5x Leveraged Alerian MLP Index ETN (MLPR)

AMJ carries an expense ratio of 85 basis points, a middle price point between UBS’ two offerings. AMUB charges 80 basis points, and MLPR charges 95 basis points.

MLPR is the only leveraged offering in the bunch, as well as the newest to come to market, having launched in 2020. 

Incepted in 2009, AMJ is the longest-running fund that tracks the index. AMUB came to market in 2015.

AMJ is the largest of the three funds, having $2.3 billion in assets under management. AMUB and MLPR have $82 million and $34 million, respectively, in assets under management.

By volume, AMJ is the most liquid offering among its peers.

For more news, information, and strategy, visit the Energy Infrastructure Channel.