What Is the Alerian MLP ETF?


Quick Answer

The Alerian MLP ETF is an infrastructure exchange-traded fund focused primarily on large and mid-cap energy Master Limited Partnerships. The investment product is a means to gain exposure to the build-out of the United States' infrastructure.

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Full Answer

Due to its specialized focus, the fund is an effective way to track the overall performance of the U.S. Infrastructure industry. Companies within the Alerian MLP ETF own, operate and construct assets such as storage facilities, processing plants and pipelines. These businesses are responsible for transporting, storing, and processing minerals and natural resources to support and grow the nation’s infrastructure. The fund is composed of these tangible assets to provide substantial inflation protection.

The fund’s general investment theory revolves around the expected growth of the United States’ infrastructure MLP asset class. ALPS, the institution responsible for crafting and managing the fund, foresees necessary growth in the infrastructure market to simply maintain its pace with the booming domestic natural gas and oil markets.

The Alerian MLP ETF utilizes a passive management investment approach formulated to track the performance of the overall domestic infrastructure industry MLP asset class. The Alerian MLP ETF is loosely correlated to the equities and bonds markets. It has the potential to deliver quarterly dividends and substantial growth without placing fund-level corporate taxes on its holders.

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