Slumping oil prices and the startling decline in shares of Kinder Morgan Inc. (NYSE:KMI) are among the factors that have plagued master limited partnerships and the corresponding exchange traded funds this year, but data suggest some MLP funds are actually adding new assets in the midst of the oil market maelstrom.
MLP exchange-traded funds and exchange-traded notes (ETNs) have defied the conventional wisdom that the asset class can remain sturdy even as oil prices slide.
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With the end of the year right around the corner, advisors and investors are considering tax-loss harvesting and selling. Perhaps some are considering which exchange traded products to move into after they ditch losing equity and fund positions.
That could be the case with the Global X MLP ETF (NYSE:MLPA). Home to $175.1 million in assets under management, the Global X MLP ETF is solid in terms of size as it easily surpasses the all-important $100 million threshold by which so many ETFs are judged. On the other hand, MLPA's current assets under management tally is a small percentage of the overall assets currently allocated to dedicated MLP exchange traded products.
Today, there are more than 25 MLP ETFs on the market with more than $25 billion in combined assets under management.
That makes the ETF's recent pace of asset gathering all the more impressive. Since the start of August, MLPA, which has a trailing 12-month dividend yield of 9.14 percent, has added $73.4 million in new assets. That works out to be a significant percentage of all the new assets that have flowed into MLP ETFs over that period.
AMLP tracks the Solactive MLP Infrastructure Index, which is designed to give investors a means of tracking the overall performance of the United States master limited partnerships (MLP) asset class. MLPA is comprised of 30 MLPs engaged in the transportation, storage, processing, refining, marketing, exploration, production and mining of natural resources, according to Global X.
Enterprise Products Partners L.P. (NYSE:EPD), Energy Transfer Partners L.P. (NYSE:ETP) and Magellan Midstream Partners L.P. (NYSE:MMP) combine for over 29 percent of MLPA's weight. The ETF's expense ratio of 0.45 percent is well below the industry average of 0.83 percent. MLPA's total annual fund operating expense is 3.99 percent. That is hefty, but still well below the total expenses associated with the ALPS Alerian MLP ETF (NYSE:AMLP), the largest MLP ETF.
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