An investor’s guide to YMLI and its holdings, like Targa Resources

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YMLI

The Yorkville High Income Infrastructure MLP ETF (YMLI) tracks the Solactive High Income Infrastructure MLP. The index constituents have market capitalizations greater than $1 billion and three-month average daily trading volume of $4 million. The fund invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in the securities of MLPs. The index consists of MLPs operating in: the exploration and production of oil or natural gas; the sale, distribution, and retail and wholesale marketing of propane, natural gas liquids, gasoline, and other fuels; marine transportation; direct mining, production and marketing of natural resources, and oil refining; and land easing of mineral reserves.YMLI Characteristics

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The Yorkville High Income Infrastructure MLP ETF (YMLI) launched in February 2013. Major constituents of YMLI include Sunoco Logistics Partners LP (SXL), Western Gas Equity Partners LP (WGP), Atlas Pipeline Partners LP (APL), Targa Resources Partners LP (NGLS), and Buckeye Partners LP (BPL). As of February 28, 2014 the market capitalizations of the index components ranged from approximately $455 million to approximately $10.6 billion.YMLI Returns

The last quarterly distribution on the MLPA ETF was $0.33 per share, which on a current price of $21.28 per share (as of April 11, 2014) results in a current yield of ~6.3%.

The total return from holding YMLI ETF was ~2.9% since January 1, 2014. In the past one year, the ETF has returned ~9.9%.YMLI Holdings

As of April 11, 2014, assets under management in YMLI totaled $35.9 million. On average, 12,422 MLPA ETF units traded daily in the exchange in the past one month. The total annual operating expense is 6.92%, consisting of management fee of 0.82% and a deferred tax expense and franchise tax expenses of 6.10%.

For federal income tax purposes, YMLI has been structured as a “C-Corp.” So YMLI accrues deferred tax liability for its future tax liability on the capital appreciation of its investments, and the distributions it receives on the equity securities of its constituent MLPs are considered returns of capital. The deferred income tax expense (or benefit) represents an estimate of YMLI’s potential tax expense (or benefit) if it were to recognize the unrealized gains (or losses) in the portfolio. All realized and unrealized gains (or losses) on investments and expenses may vary greatly from year to year and from day to day, depending on the nature of the fund’s investments, the performance of those investments, and general market conditions.

The largest MLP ETF fund is the Alerian MLP ETF (AMLP), which tracks the Alerian MLP Index, a capitalization-weighted composite of 50 energy MLPs. Other MLP ETFs include the Yorkville High Income MLP (YMLP), the Global X MLP ETF (MLPA), the Yorkville High Income Infrastructure MLP ETF (YMLI), and the Global X MLP & Infrastructure ETF (MLPX). Note that these other MLP ETFs all have significantly smaller market caps than AMLP.

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