Yorkville ETF Advisors, a New York-based asset manager, today is bringing to market another ETF focused on master limited partnerships, but this one aimed at infrastructure names.
The Yorkville High Income Infrastructure MLP ETF (YMLI), like Yorkville’s first MLP fund ‘YMLP,’ will track a Solactive index, and be brought to market through Exchange Traded Concepts’ “ETF-In-A-Box solution.” YMLI costs 0.82 percent in management fees.
The new ETF complements investor exposure to the MLP segment, one that’s often divided between production and transportation names on one hand, and infrastructure on the other. YMLI invests in infrastructure MLPs, namely partnerships focused on the transportation and storage of oil products and natural gas.
MLPs are partnerships that generate most of their income from the natural resources sector, and they make money from fees such as transportation tolls rather than from the underlying commodities themselves. That attribute protects them from volatility in commodities prices.
Also, in part because MLPs aren’t taxed as corporations, they tend to pay hefty dividends, an attractive feature at a time when investors are searching for income in an ongoing environment of ultra-low interest rates.
What’s more, the pipeline-type business model also shows very low correlation to the broader equities market and the economy in general, making MLPs good diversification tools.
The latest addition to the MLP ETF market will join sizable competitors, albeit broader in scope, such as the $4.79 billion JPMorgan Alerian MLP ETF (AMJ) and the $5.173 billion ALPS’ Alerian MLP ETF (AMLP). Global X Funds also has an MLP ETF in the market, ‘MLPA.’
The Yorkville High Income MLP ETF (YMLP)—the firm’s first ETF—has gathered just under $100 million in assets since it came to market last March.
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