Global X MLP & Energy Infrastructure is a simple midstream energy index ETF. It has seen massive gains YTD, close to 20%. Longer-term returns are strong too, as is dividend growth. Higher prices means more expensive valuations, lower dividend yields, and a worse entry point for newer, prospective investors.
The Global X MLP & Energy Infrastructure ETF is reaffirmed as a buy for investors seeking exposure to North American energy infrastructure amid global turmoil. MLPX offers lower fees (0.45% expense ratio) and faster dividend growth than AMLP, making it a core compounder for U.S. energy export growth. Current geopolitical events, including the Iran conflict and Strait of Hormuz closure, highlight the strategic value of U.S. energy infrastructure and export capacity.
MLPX offers superior total returns and broader North American diversification versus the more concentrated, tax-dragged AMLP. AMLP provides a higher dividend yield at 8.29%, but its corporate tax structure limits NAV growth, especially in bull markets. MLPX's blend of MLPs and C-Corps avoids tax drag, includes Canadian exposure, and results in a less concentrated, more resilient portfolio.
MLPX invests in midstream energy companies, with good dividend yields, below-average energy price exposure. Share prices are flat YTD, valuations down, sentiment negative. Dividends have grown, with the fund yielding 4.9%. Although recent developments have been broadly negative for shareholders in the past, they present a buying opportunity for new investors.
It's impossible not to notice the surge in oil market volatility, as signaled by the spike in the OVX. Although MLPX has a high standard deviation, its holding distribution is, in my view, less exposed to this risk compared to its competitors. Considering its competitive dividend, I believe it could offer alpha in the MLP market over the next quarter.
The S&P 500 (SNPINDEX: ^GSPC) has staged an epic recovery and is now positive year to date as investors look past ongoing macro challenges and focus on long-term growth.
Traditional oil majors have underperformed, while MLPX has delivered a 27% return over the past year, outperforming the S&P 500 and XLE. MLPX invests in midstream infrastructure entities, offering high yields and avoiding fund-level taxes, but its valuation has become stretched. Despite strong seasonal trends, technical indicators suggest a consolidation phase, with resistance around $62 and potential support from dip buyers.
MLPX is a simple midstream energy index ETF. The ETF has significantly outperformed these past few years, with its share price skyrocketing over 40% these past twelve months. Such a sharp price movement means the fund is much more expensive than before, and lower-yielding.
The S&P 500 just wrapped up its second consecutive year of 20%-plus gains. This year presents a new challenges and best ETFs.
The Global X MLP & Energy Infrastructure ETF mitigates risks of individual MLP investments, offering high dividends and strong returns, outperforming the Alerian MLP Index. Economic trends and increased natural gas demand, driven by AI data centers and popular energy needs, support a bullish outlook for MLPX through 2025. Political catalysts, including Trump's energy policies like lower regulatory barriers and enhanced access to federal land, benefit midstream companies like those in MLPX, enhancing growth prospects.
The Global X MLP & Energy Infrastructure ETF offers high income potential through investments in midstream infrastructure assets. Although President Trump may try to boost oil production, his policies are unlikely to succeed amidst stagnant global oil demand. Investors also need to be mindful of his tariff plans. With sector valuations near full value, I do not see much upside in midstream assets and rate the MLPX as a hold.
The energy sector had started 2024 on a strong note, however year-to-date performance has slowed down to 4%. MLP & Energy Infrastructure ETF provides investors with broad exposure to MLP companies operating midstream pipeline assets. Energy infrastructure continues to witness positive demand despite a push of green policies and steady rise of renewables.