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Portfolio > Alternative Investments > Hedge Funds

Global X Debuts MLP Fund

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Although interest rates have been climbing, investors are still hunting for higher yields in various sectors like master limited partnerships (MLPs). To that end, Global X rolled out the Global X MLP & Energy Infrastructure ETF (MLPX).

MLPX contains a small basket of 35 MLP and midstream energy infrastructure companies, according to Global X Funds, the sponsor.

“We are pleased to continue to innovate in the MLP space,” said Bruno del Ama, chief executive officer of Global X Funds. “MLPX provides investors with lower-cost access to midstream energy infrastructure MLPs and corporations in an ETF structure without many of the tax complexities inherent in MLP investing.”

Aside from charging annual expenses of just 0.45%, the fund also takes advantage of a fund structure unique to MLP ETFs to provide greater tax efficiency for shareholders. Due to its legal structure, MLPX is not subject to corporate taxes and does not require K-1 tax filings from investors, only 1099s.

In a 2012 report, the International Energy Agency, projected the U.S. will become the world’s top oil exporter by 2017. And as domestic energy consumption and production increase, the MLP sector could be a huge beneficiary of this trend.

MLPX is linked to the Solactive MLP & Energy Infrastructure Index, which is designed to be a MLP benchmark index for midstream energy infrastructure MLPs and corporations. The fund plans to pay quarterly income distributions.

Global X Funds is based in New York City and manages $2 billion. The company also offers the Global X Junior MLP ETF (MLPJ), which follows the small-cap segment of the MLP market.

The JPMorgan Alerian MLP ETN (AMJ) has $5.53 billion in assets and is the largest MLP focused ETP. AMJ has climbed 18% over the past year and carries an expense ratio of 0.85%.


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