Midstream has remained defensive and has held up better than broader energy amid weakening oil prices.
West Texas Intermediate (WTI) crude, the U.S. benchmark, has dropped 17.2% from January 15 through March 5. During the same period, broader energy, as measured by the Energy Select Sector Index, has declined 8.0%.
Meanwhile, the midstream segment, represented by the Alerian MLP Infrastructure Index (AMZI) and the Alerian Midstream Energy Select Index (AMEI), has limited losses. AMZI has held relatively steady, giving up just 0.4% between January 15 and March 5, while AMEI has declined 4.6%.
The midstream segment is less sensitive to moves in commodity prices given its fee-based business model, which supports stable cash flows. Additionally, announced dividend increases from some names have also likely supported midstream equities so far this year.
See more: "4Q24 Midstream/MLP Dividend Recap: Growth Continues”:https://www.etftrends.com/energy-infrastructure-channel/4q24-midstream-mlp-dividend-recap-growth-continues/
These 2 ETFs Offer Midstream Exposure
AMZI, a composite of energy infrastructure MLPs, underpins the Alerian MLP ETF (AMLP ). Companies in the index earn most of their cash flow from midstream activities. AMZI is yielding 7.2% as of March 6.
AMLP has $10.3 billion in assets under management, making it the largest MLP ETF and second largest energy ETF available to investors.
The Alerian Energy Infrastructure ETF (ENFR ) is based on AMEI. The index is a composite of North American energy infrastructure companies, comprising MLPs (25%) and corporations (75%). The index is yielding 5.5% as of March 6.
ENFR charges 35 basis points, making it the lowest-cost ETF in the energy infrastructure category.
See more: Midstream ETFs AMLP & ENFR Grow Q1 Distributions
For more news, information, and analysis, visit the Energy Infrastructure Channel.
vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for AMLP and ENFR, for which it receives an index licensing fee. However, AMLP and ENFR are not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of AMLP and ENFR.
