Trackinsight: North American Energy Infrastructure among popular ETF themes this year

North American Energy Infrastructure has been one of the most popular ETF themes this year — receiving roughly $500 million of new investments.

Investors bullish on North American energy infrastructure

North American Energy Infrastructure has been one of the most popular ETF themes this year — receiving roughly $500 million of new investments. The theme comprises ETFs investing in North American energy infrastructure companies or Master Limited Partnerships (MLPs) engaged in pipeline transportation, storage, and processing of energy commodities — among other services.  On November 15th, 2021, President Joe Biden signed the bipartisan $1.2 Trillion Infrastructure Investment and Jobs Act into law. The law will unleash billions of dollars into the U.S. energy infrastructure sector — both traditional such as oil and gas, and green such as solar and wind.

Investing in America-domiciled North American Energy Infrastructure ETFs

Alerian MLP ETF (AMLP), First Trust North American Energy Infrastructure ETF (EMLP), and Global X MLP ETF (MLPA) are three of the largest funds in the theme with $5.04, $2.15, $1.04 billion in assets under management respectively.  The highest net inflow recipient was AMLP with $450 million injected into the fund. AMLP seeks to track the Alerian MLP Infrastructure Index and invests in energy infrastructure MLPs that generate most of their cash flow from midstream activities including the transportation, storage, and processing of energy commodities. As of December 31st, 2021, the fund's top leading names includes Western Midstream Partners (10.7%), Enterprise Products Partners (10.15%), Magellan Midstream Partners (10.08%), MPLX LP (9.96%), and Plains All Amer Pipeline LP (9.72%).

AMLP has a total expense ratio of 0.85% and trades primarily on the NYSE Arca. Year-to-date, the fund has generated a return of +10.9%.

Investing in Europe-domiciled North American Energy Infrastructure ETFs

European investors can gain exposure to the theme via the Invesco Morningstar US Energy Infrastructure MLP UCITS ETF (MLPD/S), L&G US Energy Infrastructure MLP UCITS ETF (MLPI), and the Alerian Midstream Energy Dividend UCITS ETF (PMLP). MLPD/S is the largest with $278 million in assets under management. The fund seeks to track the Morningstar MLP Composite Index and provides access to US publicly traded energy master limited partnerships (MLPs)

MLPD/S has a total expense ratio of 0.5% and trades on multiple European exchanges, including the London Stock Exchange (MLPQ, GBP or MLPS, USD), the Deutsche Börse (SMLP, EUR), the Borsa Italiana (MLPS, EUR), and the SIX Swiss Exchange (MLPS, USD). Year-to-date, the fund has generated a return of +13.5%.

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