EMLP Outperformed AMLP: What Investors Should Know



Various options to gain MLP exposure

There are various alternatives available to gain exposure in MLPs. The options include investing directly in MLP stocks or investing through an ETF, ETN, or mutual funds. The Alerian MLP ETF (AMLP) and the First Trust North American Energy Infrastructure Fund (EMLP) are two of the largest MLP ETFs.

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EMLP outperformed AMLP

As the above graph shows, EMLP—formed in 2012—outperformed AMLP over both the three-year and one-year horizon. However, it should be noted that while AMLP tracks the Alerian MLP Infrastructure Index (AMZI), EMLP tracks a blended benchmark consisting of 50% of the Philadelphia Stock Exchange Utility Index and 50% of the Alerian MLP Total Return Index (AMZX).

MLP exposure

So, EMLP isn’t a pure play in MLPs. Investors looking to gain MLP exposure might end up owning exposure to utilities as well. On the other hand, AMLP only invests in MLPs. As the above graph shows, only close to one-third of EMLP is invested in MLPs, including institutional shares.

In the next part, we’ll analyze the performance and characteristics of two large MLP ETNs.


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