Alerian MLP ETF (AMLP) passes $3bn in assets as competition warms up

Apr 23rd, 2012 | By | Category: Alternatives / Multi-Asset

The Alerian MLP ETF (AMLP), an ETF tracking US-listed Master Limited Partnerships (MLPs), last week reached $3 billion in net assets, less than two years after the fund’s debut on the NYSE on 25 August, 2010.

Alerian MLP ETF passes $3bn in assets as competition warms up

The Alerian MLP ETF recently passed $3bn in assets, just as competition in the sector heats up.

AMLP delivers exposure to the Alerian MLP Infrastructure Index, a capped, float-adjusted, capitalisation-weighted composite of 25 energy infrastructure MLPs that earn the majority of their cash flow from the transportation, storage, and processing of energy commodities.

Energy-focused MLPs have proved highly popular with investors owing to the high level of income, low correlation with other asset classes and inflation protection they typically offer.

Commenting on the milestone, Kenny Feng, President and CEO of Alerian, said: “We have been tremendously pleased with the growth of the Alerian MLP ETF, the first ever ETF product focused on MLPs and after-tax yield.

“We have enjoyed partnering with ALPS, a firm which possesses a strength in alternative investments as well as a specialised sales team knowledgeable in MLPs. We look forward to a continued partnership with ALPS and bringing more information and product access to the MLP asset class.”

Tom Carter, Executive Vice President of ALPS Holdings, added: “We at ALPS were extremely excited to help bring the world’s first MLP ETF to the marketplace. Its success has not only been a testament to the potential portfolio benefits of MLPs, but also due to the recognised brand of Alerian as a global leader in providing benchmark MLP indices.

“We believe that the unique combination of access to the MLP market, along with the potential advantages of the ETF structure provides investors with a powerful tool to help build better portfolios.”

The success of the Alerian MLP ETF, however, has not gone unnoticed by rival ETF providers. Indeed, in the past six weeks two new MLP ETFs, the Yorkville High Income MLP ETF (YMLP) from Yorkville ETF Advisors and the Global X MLP ETF (MLPA) from Global X Funds, have been launched.

These two funds, especially the Global X Fund product with its markedly lower cost (0.45% per annum versus 0.85% and 0.82% for the Alerian and Yorkville funds, respectively), are likely to provide a stern challenge to AMLP.

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