Mid-Stream Master Liability Partnerships

Investing / Portfolios
1

A couple of months ago I wanted to acquire some shares in EPD (Enterprise Product Partners) - high dividend yield recession proof stable business was my thought.

My bank indicated they could not facilitate acquiring MLP’s.

Annoying but left it there. Now, I’m reconsidering and am exploring investing in an ETF so I get a basket of these investments (some of them are on the higher debt side so diversification is good).

I’ve seen a number of them (AMLP, MLPA, KYN which is technically a CEF), etc. but am struggling to see the forest through the trees and really pick one which is good yield but reasonable expenses and is not a a ‘bad’ jurisdiction. Some of them have insane fees.

Anybody here already done the homework or have some good/bad experiences to help target this search further?

2

Yeah, I wrote about the challenges with limited partnerships here: Any Stockpickers out there? - #50 by Your_Full_Name

Not sure how they’re treated differently in ETFs, but I’d do the research …

3

ChatGPT is an amazing improvement vs. google - so here’s an overview

  • Alerian MLP ETF (AMLP)
  • Expense Ratio: 0.85%
  • Dividend Yield: ~7.8%​

ALPS Funds

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Global X ETFs

  • Global X MLP ETF (MLPA)
  • Expense Ratio: 0.45%
  • Dividend Yield: ~7.1%​

ALPS Funds

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Global X ETFs

  • Kayne Anderson MLP/Midstream Investment Company (KYN)
  • Expense Ratio: 2.22% (includes leverage costs)
  • Dividend Yield: ~9.0%​

Stock Analysis

  • Invesco SteelPath MLP Income Fund (MLPP)
  • Expense Ratio: 1.47%
  • Dividend Yield: ~8.3%​

Stock Analysis

  • Martin Midstream Partners L.P. (MMLP)
  • Expense Ratio: N/A (it’s a single MLP, not an ETF)
  • Dividend Yield: ~15.6%​

Global X ETFs

  • FlexShares Listed Private Equity ETF (FLXD)
  • Expense Ratio: 0.75%
  • Dividend Yield: N/A (as this focuses on private equity, not MLPs)​

Stock Analysis

  • Invesco DWA MLP Select ETF (MLPX)
  • Expense Ratio: 0.45%
  • Dividend Yield: ~6.7%​

ETF Database

  • First Trust North American Energy Infrastructure Fund (EMLP)
  • Expense Ratio: 0.95%
  • Dividend Yield: ~4.1%​

ETF Database

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ETF Database

  • Global X MLP & Energy Infrastructure ETF (MLPX)
  • Expense Ratio: 0.45%
  • Dividend Yield: ~5.4%​

ETF Database

  • VanEck Vectors High Income Infrastructure MLP ETF (YMLI)
  • Expense Ratio: 0.43%
  • Dividend Yield: ~8%​

ETF Database

  • Westwood Salient Enhanced Midstream Income ETF (MDST)
  • Expense Ratio: 0.80%
  • Dividend Yield: Targeting double digits by using covered call strategies​

ETF Database

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4

Quickly glancing at that list and disqualifying those with expense ratio >0.75% and/or yield < 6%, I’ll be zooming in on the VanEck Vectors High Income Infrastructure MLP ETF (YMLI). I hold other VanEck ETF’s which I’ve been satisfied this.

5

Just my luck, the Van Eck ETF has closed. Perhaps tied to the tax issues raised by @Your_Full_Name

This leaves only the following within my criteria

Global X MLP ETF (MLPA)

  • Expense Ratio: 0.45%
  • Dividend Yield: ~7.1%​

Stock Analysis

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Global X ETFs

6

And here is chatgpt comparing MLPA with the biggest ETF in the same field

Here’s a comparison of Global X MLP ETF (MLPA) and Alerian MLP ETF (AMLP), two popular midstream MLP ETFs:

1. Expense Ratio

  • MLPA: 0.45%, making it one of the lower-cost options in the MLP space​

Stock Analysis

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ETF Database

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  • AMLP: 0.85%, which is nearly double the cost of MLPA​

ALPS Funds

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ETF Database

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2. Dividend Yield

  • MLPA: Approximately 7.1%, offering a solid yield​

Global X ETFs

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ETF Database

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  • AMLP: Higher at around 7.8%​

ALPS Funds

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ETF Database

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3. Assets Under Management (AUM)

  • MLPA: $1.6 billion​

Global X ETFs

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  • AMLP: $9 billion, significantly larger​

ALPS Funds

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ETF Database

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4. Performance (as of 2023-2024)

  • MLPA: Total return for 2023 was about 14.6%, trailing AMLP slightly​

ETF Database

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  • AMLP: Total return for 2023 was stronger at about 18.2%​

ETF Database

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ETF Database

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5. Portfolio Composition

  • Both ETFs offer exposure to midstream energy infrastructure companies, but AMLP tends to have a slightly larger number of holdings and covers a broader segment of the market.
  • Overlap: MLPA and AMLP have an 88% portfolio overlap, meaning they invest in many of the same companies​

ETF Database

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ETF Database

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6. Liquidity

  • MLPA: Average daily volume of about 154,741 shares, which is decent but much lower than AMLP​

Stock Analysis

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  • AMLP: More liquid with an average daily volume of over 1.2 million shares​

ETF Database

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ETF Database

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7. Tax Considerations

  • AMLP is structured as a C-Corporation, meaning it accrues tax liabilities on realized and unrealized gains. This can create a drag on performance​

ALPS Funds

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Stock Analysis

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  • MLPA is structured as a traditional ETF and does not have the same tax burdens​

ETF Database

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Summary

  • Cost-conscious investors may prefer MLPA due to its lower expense ratio, though its performance and yield are slightly lower than AMLP.
  • AMLP has a higher yield and better performance but comes at a higher cost and has more complex tax implications due to its C-Corporation structure.

Both are solid choices for exposure to midstream energy infrastructure, but the choice between them depends on your preference for cost, yield, and liquidity.

7

AMLP is my 6th biggest position. It would have been much bigger had I not been too greedy at trying to get it at a lower cost basis and bought what I could at the time instead of watching it go up and never get back to the level I bought it at.

I can’t remember why I chose AMLP over others - the expense ratio is high. But I don’t think there was a lot of choice and maybe I went for the most liquid.

I liked EMLP, but I think I didn’t go for it as it had a higher expense ratio, but maybe I need to take a 2nd look as it seems to put more return as capital gains rather than dividends.

EDIT: Just looking more closely, it seems to have outperformed in this last year. Not sure why this is.

1 Like
8

I used to hold AMLP but Swissquote forced me to get rid of it in at the end of 2022.

Where do you hold them? And how do you deal with the tax implications?

9

IBKR. What tax issues did you have?

10

See my post above:

11

Tracing through several links gave a YT video that was in German that I couldn’t understand.

12

I provided a summary …

13

Invesco Morningstar US Energy Infrastructure MLP UCITS ETF Dist

Current dividend yield 8.48%
ter 0.5

3 Likes
14

Then that is what confused me as your summary talks about LPs and AMLP is not a LP (it is a C corp). So not sure what the tax issue is with AMLP.

15

Am now also looking at VanEck Vectors Global Listed Infrastructure UCITS ETF (TICKER: MLPI)

Broader than just mid-stream, also covers transport, utilities and telecommunication.
Expense ratio 0.40% and yield round 6-7%
Global allocation
Ireland domiciled

16

Huh.

Swissquote forced* me to sell it in November 2022. They explicitly listed AMLP, EPD and MMP at the time.

Maybe they were just overzealous with AMLP?

I just checked: they now actually offer to trade it again … I can now sue them because they forced me to sell at USD 41.37 while it’s at USD 47.69 now, right? :wink:

*

QI SECTIONS 1446 (a) und (f) - WICHTIGE MITTEILUNG, DIE IHRER SOFORTIGEN AUFMERKSAMKEIT BEDARF

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In diesem Zusammenhang wird die SQB ab dem 1. Januar 2023 für einen ordnungsgemässen Steuereinbehalt und eine jährliche namentliche Meldung ihrer Kunden an die IRS verantwortlich sein, die in PTP investieren bzw. in Zukunft in PTP investieren wollen. Damit diese Meldung erfolgen kann, muss die SQB eine ordnungsgemässe Dokumentation ihrer Kunden, die in PTP investieren, sicherstellen. In Anbetracht der oben geschilderten Sachverhalte hat die SQB festgestellt, dass Ihr Konto zurzeit in PTP investiert. Wir bitten Sie deshalb:

  • Ihre PTP spätestens bis zum 15. Dezember 2022 zu einem anderen Finanzinstitut zu übertragen (kontaktieren Sie unser Customer Care Center unter der Rufnummer +41 44 825 88 88); oder
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      IRS-Formular Natürliche Person Juristische Person

Nicht-US-Person * W-8BEN inkl. US-TIN für jeden Nicht-US-Kontoinhaber; und

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17

Thanks @ma0 - settled on taking a position in the Invesco one. Initially the distributing ETF, at a later stage once I have monthly inflow from a salary again I’ll likely switch to accumulating.

18

They have an email address, maybe you can ask them what happened.

1 Like
19

I’m not sure I got the correct main link for what I’ve posted earlier, but here it is:
https://www.invesco.com/ch/en/financial-products/etfs/invesco-morningstar-us-energy-infrastructure-mlp-ucits-etf-dist.html#Holdings

1st. Weeird graph. I’m not sure I read it correctly, the amounts are mixed.
2nd ESG rating BBB. Lol? I was expecting ZZZ.

I clearly don’t understand what I’ve read. :smiley:

Never invest in what you don’t understand.
MLP: Master Limited Partnership (MLP) Definition

Are there other sector with MLP?

20

Are REIT’s directionally not the same or similar?