MLPX vs EMLP: Which Energy Infrastructure ETF Offers Better Yield?
Key PointsGlobal X MLP & Energy Infrastructure ETF carries a significantly lower expense ratio than First Trust North American Energy Infrastructure Fund.
When evaluating energy infrastructure ETFs, two prominent options stand out: the Global X-MLP & Energy Infrastructure ETF (MLPX) and the First Trust North American Energy Infrastructure Fund (EMLP). MLPX provides a low-cost, pure-play energy infrastructure strategy, while EMLP offers a diversified mix of utilities and energy infrastructure at a higher price.
Energy infrastructure is a vital component for income-focused investors seeking yield from physical assets. This comparison focuses on the index-based approach of MLPX versus EMLP's more diversified strategy, exploring how their differing sector weights and fee structures affect total return and income potential.
Beta, a measure of price volatility relative to the S&P 500, is calculated from monthly returns over the fund's history (up to five years). MLPX has a beta of 1.22, indicating slightly higher volatility than the market, while EMLP's beta is 1.04, showing somewhat lower volatility. Over the past year, MLPX has delivered a total return of 23.9%, while EMLP has returned 10.4%.
Both ETFs have different expense ratios, with MLPX charging 0.45% compared to EMLP's 0.95%. MLPX also offers a higher dividend yield, paying $3.07 per share over the trailing 12 months, which amounts to a 4.2% yield on its recent ~$71.27 share price. In contrast, EMLP has paid $1.23 per share over the trailing 12 months, yielding 2.9% on its ~$42.46 share price.
MLPX is more affordable for long-term investors, while EMLP provides broader sector exposure with 49% in utilities, 46% in energy, and 4% in industrials. EMLP holds 58 positions, with major holdings in Enterprise Products Partners L.P. (EPD), Energy Transfer LP (ET), and MPLX LP (MPLX). MLPX, on the other hand, is more concentrated, with 100% exposure to the energy sector and 29 holdings, including Williams Cos. Inc. (WMB), TC Energy Corp (TRP), and Enbridge Inc (ENB).
Overall, MLPX has outperformed EMLP over the past three, five, and ten years, making it the preferred choice for most investors in terms of performance. However, EMLP's lower expense ratio and diversified mix could be attractive for income seekers seeking a more balanced approach.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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