Checking In: The Original MLP ETF (AMLP, EPD, KMP)

With the debut of the Yorkville High Income MLP ETF YMLP on Tuesday, the universe of ETFs offering exposure to master limited partnerships is now up to two constituents. The Yorkville High Income MLP ETF marks the debut of the eighth MLP exchange-traded product, but as ETFdb notes, only two are structured as ETFs. The other six are exchange traded notes. With that, we're checking in with the ALPS Alerian MLP ETF AMLP, the "original" MLP ETF. Once upon a time, it was fair to classify the ALPS Alerian MLP ETF as an under the radar play but that is definitely not the case today. AMLP debuted in August 2010 while plenty of critics were claiming MLPs were overvalued. However, the asset class has continued to thrive and that August 2010 debut now looks like good timing as far as AMLP is concerned. Despite an expense ratio of 0.85%, AMLP boasts excellent volume with a three-month daily average of almost 1.9 million shares. Rounding the ETF's price up to $17 means the fund sees average daily dollar volume of just over $32 million and that's usually enough to keep an ETF's sponsor satisfied. The volume numbers are nice, but AMLP's introduction has been more than validated by the fact that the ETF has more than $2.8 billion in AUM, according to the Alerian Web site. That's a great total for a five-year old ETF, let alone one that isn't even two years old and it might be even higher if the expense ratio was lower. Speaking of satisfaction, it's investors that are likely satisfied with AMLP. With a dividend yield of almost 5.9%, the fund is up more than 12% inception. Home to 25 stocks, AMLP is heavily allocated to the MLPs investors are most familiar with as Enterprise Products EPD and Kinder Morgan KMP combine for over 19% of the ETF's weight. The ETF's other top-five holdings are Plains All American Pipeline PAA, Magellan Midstream MMP and Energy Transfer Partners ETP. Year-to-date, AMLP has been outperformed by the S&P 500, but that's part of the good news/bad news scenario with MLPs. Not only is this asset class prized for its high yields and robust payouts, investors have also come to love MLPs because of a low correlation to the broader market that has stretched for over 20 years. In other words, a risk on environment isn't the best time to own MLPs, but with these types of yields, there's rarely a bad time to own MLPs and ETFs such as AMLP. Don't forget MLPs are also an excellent inflation hedge and, as Alerian notes, "MLPs represent an investment in the build-out of U.S. energy infrastructure over the next decade." In other words, investors with long time horizons and those looking for income would do well to consider AMLP.