Tortoise MLP ETF (TMLP)

Overview

TMLP provides exposure to the MLP universe through a market cap-weighted index of U.S. master limited partnerships (MLPs) and limited liability companies. MLPs are publicly traded partnerships that are primarily focused on the transportation, production, processing, or storage of energy commodities. To qualify for inclusion in the index, a company must meet specific criteria: it must be domiciled and traded in the U.S., possess a minimum market capitalization of $200 million USD, and maintain an average market capitalization of at least $175 million USD for a period of 20 trading days leading up to the reference date for rebalancing. TMLP aims to achieve exposure to its underlying index primarily through investments in total return swaps that reference the components of the index. Furthermore, the fund may also directly hold securities of index constituents, restricted to 25% of its total assets. A capping of 7.5% is imposed on individual positions, with a 15% limitation applied to securities from the same MLP Affiliate family. The index undergoes rebalancing on a quarterly basis to maintain its intended structure and risk profile.

Products and Services

• Master Limited Partnership Index Exposure

  TMLP offers an investment vehicle that provides exposure to a comprehensive index of U.S.-based MLPs. This exposure is designed for investors looking for participation in the energy sector's growth through publicly traded partnerships.

• Total Return Swaps

  The fund primarily invests in total return swaps, which are financial contracts that allow TMLP to replicate the performance of the MLP index without directly acquiring all the securities. This innovative approach enables the fund to efficiently gain exposure to a diverse range of MLPs.

• Direct Holdings of Securities

  In addition to using total return swaps, TMLP may directly hold up to 25% of its total assets in the securities of index constituents. This diversified holding strategy complements its swap-based investments and provides investors with direct exposure to the performance of specific MLPs.

• Quarterly Rebalancing

  The index underlying TMLP is rebalanced quarterly, ensuring that the investment reflects the latest market conditions and maintains its intended risk profile. This regular updating helps optimize the fund's performance in accordance with the evolving MLP landscape.

• Risk Management Capping

  TMLP has established capping limits to mitigate concentration risk. Individual positions are capped at 7.5%, while securities from the same MLP Affiliate family are limited to 15%. These measures enhance diversification and reduce the potential impacts from adverse shifts in single securities or affiliated entities.