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Next Yorkville MLP ETF Nears Launch

Cinthia Murphy


Exchange Traded Concepts, the third-party fund sponsor behind the “ETF-In-A-Box” concept, appears from the looks of regulatory filings to be closer to launching another ETF focused on master limited partnerships in partnership with Yorkville ETF Advisors.

ETC, and Yorkville, a New York-based asset manager, launched their first MLP ETF—the Yorkville High Income MLP ETF (YMLP) a little over a year ago—and this week they have updated their registration statement for another MLP fund, this one focused on infrastructure names. Revisions to original filings that provide additional details on a fund—a particular price—are usually a telltale sign that a launch might be near.

The new Yorkville High Income Infrastructure MLP ETF (NYSEArca:YMLI), which will also come to market through Exchange Traded Concepts’ “ETF-In-A-Box” solution, is expected to have an annual management fee of 0.82 percent, or $82 for each $10,000 invested, according to the latest filing said.

The fund will target an infrastructure subset of MLPs, comprising only the ones that earn most of their cash flow from storage and transportation of energy commodities, such as oil and natural gas.

MLPs are partnerships that generate most of their income from the natural resources sector, but they make money from fees such as transportation tolls rather than from the underlying commodities themselves. That trait allows them to mitigate volatility linked to commodities prices.

MLP ETFs are a niche that’s gathering traction as investors look for alternative income sources and hope to tap into the U.S.’ booming energy industry. In fact, two new MLP-focused strategies have been rolled out since the beginning of the year as providers look to cater to that demand.

The Global X Junior MLP ETF (MLPJ), which serves up unique access to small-cap names in the segment, came to market on Jan. 15, roughly a week after the iPath S'P MLP ETN (IMLP) was launched.

All together, the additions are quickly adding new wrinkles to a space that’s currently dominated by the likes of the $5.13 billion JPMorgan Alerian MLP ETN (AMJ) and ALPS’ $4.45 billion Alerian MLP ETF (AMLP), to name a few.

YMLI will track a Solactive index comprising MLPs involved with transportation and storage as well as gathering of natural gas and oil. The market capitalization of the securities in the index ranged from $1.3 billion to $49.7 billion as of Jan. 29, the filing said.

The index is rebalanced annually, but may be adjusted more often if needed.


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