An investor’s guide to MLPX and its holdings, like Spectra Energy

Market Realist

An investor's guide to investing in important MLP ETFs (Part 6 of 7)

(Continued from Part 5)


The Global X MLP & Infrastructure ETF (MLPX) tracks the Solactive MLP & Energy Infrastructure Index. The index consists of midstream energy infrastructure MLPs and corporations principally owning and operating assets used in energy logistics, including pipelines, storage facilities and other assets used in transporting, storing, gathering, and processing natural gas, natural gas liquids, crude oil, or refined products.

The Global X MLP & Infrastructure ETF (MLPX) launched in July 2013. Major constituents of MLPX include Enbridge, Inc. (ENB), Spectra Energy Corporation (SE), Williams Companies Inc. (WMB), Kinder Morgan, Inc. (KMI), and EQT Corporation (EQT). As of January 1, 2014, the market capitalization of the index components varied between $400 million and $4 billion.

We should note that MLPX is structured as a regulated investment company (or RIC), not a C-Corp, which allows it to avoid paying expenses at the fund level and reduce fund-level expenses. It invests mostly in MLP-affiliated organizations, but not MLPs themselves. For example, the top holdings in the fund are mostly C-Corps that hold the general partners of MLPs and significant LP holdings. So, while the fund itself is able to avoid paying taxes, a lot of the taxes are levied at the level of the holdings, which are C-Corps.

The last quarterly distribution on the MLPX ETF was $0.089 per share, which at a current price of $17.06 per share (as of April 11, 2014) results in a current yield of ~2.1%.

The total return from holding the MLPX ETF was ~2.6% as of March 11, 2014. Year-to-date, the ETF has returned ~5.1%.

As of April 11, 2014, assets under management in MLPX totaled $69.9 million. On average, 51,516 MLPX ETF units traded daily in the exchange in the past one month. The total annual operating expense is 0.65%, consisting of management fees (no deferred tax expense as compared to other MLP ETFs, given the RIC structure of MLPX).

The largest MLP ETF fund is the Alerian MLP ETF (AMLP), which tracks the Alerian MLP Index, a capitalization-weighted composite of 50 energy MLPs. Other MLP ETFs include the Yorkville High Income MLP (YMLP), the Global X MLP ETF (MLPA), the Yorkville High Income Infrastructure MLP ETF (YMLI), and the Global X MLP & Infrastructure ETF (MLPX). Note that these other MLP ETFs all have significantly smaller market caps than AMLP.

Continue to Part 7

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