Published Fri, 28 Sep 2018 11:29:19 -0400 on Seeking Alpha
It is difficult to find an investment vehicle like the InfraCap MLP ETF (AMZA), which offers a monstrous dividend and is comprised of the top midstream companies in the world. To be exact, the fund:
...seeks total return primarily through investments in equity securities of publicly traded master limited partnerships and limited liability companies taxed as partnerships ("MLPs"). Under normal market conditions- the fund will invest not less than 80% of its net assets (plus the amount of any borrowings for investment purposes) in equity securities of MLPs in the energy infrastructure sector. It is non-diversified.
The dividend yield of almost 18% is what separates AMZA from the ALPS Alerian MLP ETF (AMLP), in my opinion. Sure, the expense ratio of AMZA seems excessively high at 1.93%. But, obviously investors of the ETF are betting that the dividend and stock price appreciation from such depressed levels will more than cover the higher expense ratio.
The holdings of AMLP are very similar to AMZA's, which is all that matters for the purposes of this article. After all, investors are aware of why midstream companies are such a viable investment.
They are capable of generating significant income at a relatively low risk with the nature of pipelines, and now production is ramping so much due to E&Ps being in full manufacturing mode that more pipelines need to be built. A lot more. So, we know the reasons for investing in AMZA. The question is, is this the... Read more
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