the ETF Alerian Energy Infrastructure (ENFR) offers investors a high dividend yield and strong returns.
ENFR provides exposure to the AMEI Index, a composite of North American midstream energy infrastructure companies, including corporations and MLPs, engaged in the pipeline transportation, storage and processing of energy commodities, according to SS&C ALPS Advisors.
ENFR returned 10.25% over a one-month period, 22.87% over a three-month period, and 40.68% over a one-year period, according to ETF Database.
ENFR combines MLP exposure with MLP affiliates and other energy infrastructure companies. For RIC compliance, limited partnership units are assigned a fixed amount of 25% of the portfolio, according to the ETF database.
To be eligible for inclusion in the Underlying Index, companies must be headquartered in the United States or Canada and derive the majority of their cash flow from qualifying intermediary activities, such as collecting and processing, liquefaction, pipeline transport, rail terminal and storage. , according to the ETF database.
Additionally, companies must meet minimum liquidity requirements for a certain period in order to be included in the underlying index, according to the ETF database.
Investors choose to allocate assets to midstream energy companies with ENFR for a variety of reasons.
On the one hand, midstream companies transport, process and store hydrocarbons, a crucial role that generates predictable royalty-based revenue, according to ALPS.
According to ALPS, quarterly dividends from commission-based income, without corporate tax at the fund level, offer the potential for total return.
The fund maintains a considerable advantage over peers in the segment. Its annual dividend yield is 7.43%, compared to the FactSet segment average of 2.87%, while maintaining a cost well below that of peers in the category – charging only 35 basis points compared to the category average of 76 basis points, according to the ETF database.
ENFR also provides exposure to long-term real assets that generate inflation-protected cash flows, according to ALPS.
The fund has $98 million in assets under management.
For more news, insights and strategy visit the Energy Infrastructure Channel.
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