The ETRACS Quarterly Pay 1.5x Leveraged Alerian MLP Index ETN (MLPR) offers enhanced exposure to MLPs, an area well-positioned for rising interest rates.
MLPR is the only leveraged fund that tracks the Alerian MLP index. The fund was first available to investors in June 2020 and has gathered $35 million in assets under management, as of January 28.
Due to the leveraged strategy of MLPR, the fund is positioned to see enhanced returns, as it has in recent history, but it may also see enhanced losses.
The Alerian MLP Index has returned 31.07% over the past year, 4.57% over the past six months, and 10.12% over the past one-month period, according to UBS Investment Bank’s publicly available data. MLPR has returned 61.7% over the past one-year period, 13.14% over the past six months, and 16.29% over the past one-month period, according to the same.
The fund has an annualized current yield of 11.73% and carries an expense ratio of 95 basis points.
The Alerian MLP Index measures the composite performance of energy MLPs and is calculated by S&P Dow Jones Indices using a capped, float-adjusted, capitalization-weighted methodology.
The MLPs included in the index earn the majority of their cash flow from qualifying activities involving energy commodities, including pipeline transportation, gathering and processing, storage, production and mining, marketing, marine transportation, services, catalytic conversion, mineral interest, refining, regasification, and other related activities.
MLPR’s top five holdings make up 49.22% of the fund. The top holdings, in order by descending weight, are Enterprise Products Partners LP, Energy Transfer Operating LP, MPLX LP, Western Gas Partners LP, and Plains All American Pipeline LP.
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