Master limited partnerships (MLPs) have been getting more attention because of their attractive yields and impressive performance. Over the past year, the Alerian MLP index increased in value by over 10%.
In March, Yorkville ETF Advisors unveiled the Yorkville High Income MLP ETF (YMLP). “YMLP shatters today’s MLP ETF mold by intentionally focusing on the untapped commodity sectors of the MLP asset class, due to their favorable income characteristics,” asserts Darren Schuringa, CFA, managing partner at Yorkville ETF Advisors. “We are pleased that YMLP delivers on our commitment to provide investment strategy-based ETFs.”
The Solactive High Income MLP Index tracked by YMLP is a rules-based index that applies a multi-factor selection model to the MLP universe. Analyzed factors include coverage ratio of distributions, distribution growth and size of distributions.
A select group of MLPs that are deemed to be most favorable across all three factors become index constituents. These constituents fall primarily in the commodity MLP sector, which has historically exhibited more favorable distribution characteristics and similar risk-adjusted returns when compared to infrastructure MLPs, according to Yorkville Capital Management. YMLP has a distribution rate of 8.74% and charges annual fees of 0.82%.