Following up on yesterday's "JPMorgan Alerian MLP Index ETN: The Next TVIX? (AMJ)".
Remember, JPM has STOPPED issuing new AMJ notes.
From ETF Daily News;
After almost two years,
ALPSAlerian MLP ETF (NYSEARCA:AMLP) generates nearly the same daily trading value as JP Morgan Alerian MLP Index (NYSEARCA:AMJ), although the indexes used by the two products are different.
While the JPMorgan ETN had the leeway to include exploration and production MLPs in its MLP index, the ALPS ETF includes only midstream infrastructure MLPs such as Energy Transfer Partners (NYSE:ETP), Enterprise Products Partners (NYSE:EPD) and Genesis Energy LP (NYSE:GEL).
Midstream master limited partnerships, the backbone of energy infrastructure in the US, offer a play on domestic energy with less volatility than exploration and production operations, which are exposed to fluctuating commodity prices.
Midstream MLPs are the toll takers of the energy industry; they get paid based on the volume of commodity product moved, rather than the price of the commodity produced. That makes for smoother revenue, while still providing exposure to energy production and demand and significantly reducing the ETF’s price volatility.
The MLP ETF also tracks a much more concentrated basket of MLPs, with just 25 index components versus the 50 components in the ETN’s basket. That more concentrated approach, coupled with the recent market sell-off, has boosted the yield on ALPS Alerian MLP ETF to just over 6 percent, about 2 percent higher than that currently offered by JPMorgan Alerian MLP Index....MORE