How the 4 Largest Midstream ETFs Performed in 2023
This article was originally published on ETFTrends.com.
Midstream ETFs have had a strong showing in 2023, with the segment poised to outperform the broader energy sector for the year.
MLPs/midstream have been strengthened by their defensive qualities, M&A activity, and positive dividend growth this year. Midstream investments are favored for their history of providing generous income and compelling returns to investors.
The four largest midstream ETFs include the $7.3 billion Alerian MLP ETF (AMLP), the $2.4 billion First Trust North American Energy Infrastructure Fund (EMLP), the $1.5 billion Global X MLP ETF (MLPA), and the $975 million Global X MLP & Energy Infrastructure ETF (MLPX).
Despite the midstream segment’s strong recent performance and attractive valuations, only AMLP has attracted significant inflows in 2023. The fund has seen $276 million in net flows year to date through December 20, compared to $29 million for MLPA. Conversely, EMLP and MLPX have seen net outflows totaling $346 million and $162 million, respectively.
While its large asset base puts it at a sizable advantage in accreting flows, AMLP also outpaces its midstream peers from total return and dividend yield perspectives.
See more: “VettaFi’s Head of Energy Research on 2023 Highlights and Outlook for Midstream”
Performance
AMLP is handily outpacing EMLP, MLPA, and MLPX on a total return basis year to date through December 20. During this period, AMLP is up 20.9%, while MLPA and MLPX are up 15.7% and 14.3%, respectively. Meanwhile, EMLP is lagging the group, up only 6.6% year to date.
EMLP’s overweight to the utilities sector has caused the fund to significantly trail its midstream peers. Over 45% of the First Trust fund by weight is in utilities, per ETF Database.
EMLP is also the most expensive in the group, charging 95 basis points. In comparison, AMLP charges 85 basis points, and MLPA and MLPX each charge 45 basis points.
Dividend Yield
Many investors are attracted to the midstream space for the generous yields offered, making this an important metric when evaluating funds in the space. AMLP also has an edge in providing the highest dividend yield of the four funds.
AMLP’s indicated yield is 8.2% as of December 20. Meanwhile, MLPA’s indicated yield is 7.8%, MLPX’s yield is 5.4%, and EMLP’s yield is 4.1%.
For more news, information, and analysis, visit the Energy Infrastructure Channel.
vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for AMLP, for which it receives an index licensing fee. However, AMLP is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of AMLP.
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