Barclays weighs in with another MLP ETN

Mar 13th, 2013 | By | Category: Alternatives / Multi-Asset

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Barclays has announced the launch of the Barclays ETN+ Select MLP ETN (ATMP), an exchange-traded note providing exposure to the much-in-demand energy MLP space.

Barclays weighs in with another MLP ETN, the Barclays ETN+ Select MLP ETN (ATMP)

Barclays’ new ETN is entering an increasingly crowded space.

The NYSE Arca-listed ETN is designed to track the volume weighted average price (VWAP) of the Atlantic Trust Select MLP Index.

The Atlantic Trust Select MLP Index is constructed to provide exposure to a basket of midstream US and Canadian master limited partnerships, limited liability companies and corporations that trade on major US exchanges, are classified in the GICS Energy Sector or GICS Gas Utilities Industry segments, and meet certain eligibility criteria.

Constituents are selected for inclusion in the index using the Atlantic Trust Select Master Limited Partnership Strategy developed by Stein Roe Investment Counsel. The strategy dynamically selects a basket of up to 100 index constituents based on certain eligibility criteria including their long-term credit rating, the portion of their cash flow driven by mid-stream operations and their size as measured by free-float market capitalisation and average daily trading value

Ian Merrill, Head of Barclays ETNs, Americas, said: “In response to the growing demand for yield, this MLP ETN offers the potential for income along with upside appreciation via a more focused exposure to a subset of general partners and limited partners in the MLP space, developed by the Atlantic Trust team. We are pleased to have been able to extend our range of Barclays ETN+ ETNs through this partnership.”

Adam Karpf, Portfolio Manager and Managing Director at Atlantic Trust, added: “The objective of the index is to focus on a select group of midstream MLPs, as defined by credit ratings, size and other criteria, and their respective general partners. Within the MLP sector, we believe that investment grade midstream MLPs offer an attractive opportunity set to capitalize on the secular trends in the energy industry. The inclusion of midstream general partners in the index, structured as both MLPs and corporations, provides additional exposure to a fast growing and attractive sub-sector in the energy infrastructure industry.”

The MLP space is awash with exchange-traded products of all varieties (ETFs, ETNs etc), each offering a slightly different take on the sector. While the new Barclays ETN will undoubtedly come up against stiff opposition (including against its own iPath S&P MLP ETN (IMLP) launched in January), the back-tested simulated performance of the Atlantic Trust Select MLP Index has been impressive, outperforming both the Alerian MLP Index and the Alerian MLP Infrastructure Index, underlyings to the $4.8 billion JPMorgan Alerian MLP Index ETN (AMJ) and $4.4 billion Alerian MLP ETF (AMLP) respectively.

Hypothetical Historical and Historical Index Performance

Hypothetical historical and historical index performance

The ETN has a yearly fee of 0.95%.

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