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How Flows into Top MLP ETFs Are Trending

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Updated

Negative flow in February

The total net fund flow into the top five MLP ETFs by assets under management in February 2018 was -$466 million. These ETFs are the Alerian MLP ETF (AMLP), the First Trust North American Energy Infrastructure Fund (EMLP), the Global X MLP ETF (MLPA), the Infracap MLP ETF (AMZA), and the Global X MLP & Energy Infrastructure ETF (MLPX). It was the first time in 12 months that the total fund flow in these ETFs was negative.

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The above graph shows the monthly fund flows into top MLP ETFs in the past year. The Alerian MLP ETF recorded net outflow of $559 million in February. Enterprise Products Partners (EPD), Magellan Midstream Partners (MMP), and Energy Transfer Partners (ETP) are the top three holdings of AMLP. Together, the three form ~30% of the ETF.

Total fund flow into these five ETFs in 4Q17 was $1.4 billion, up from $857 million in 3Q17. The total fund flow for full-year 2017 in the top five MLP ETFs was the highest in five years.

Composition

The First Trust North American Energy Infrastructure Fund (EMLP) recorded a net outflow of $3.3 million in February 2018. EMLP invests in MLPs as well as pipeline companies, utilities, and other energy infrastructure companies.

The Global X MLP & Energy Infrastructure ETF (MLPX) also invests in midstream companies along with MLPs. Investors looking for MLP exposure should consider this before adding any of the ETFs in their portfolio.

Let’s analyze the recent performance of top MLPs in the next part of this series.

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