According to the ETP provider, the ETFS US Energy Infrastructure MLP GO UCITS ETF will invest solely in MLPs (Master Limited Partnerships) that operate in the infrastructure space, deriving most of their revenue from so-called 'toll-road-type' businesses, rather than movements in the commodities themselves.
A MLP as defined by the National Association of Publically Traded Partnerships, are PTPs (Publically Traded Partnerships) that “operate primarily energy-related, active businesses”. A PTP is a partnership (and thus taxed as such), or a limited liability company that has chosen to be taxed as a partnership, that is also listed on an exchange.
Matt Johnson, head of distribution for EMEA at ETF Securities said at the launch, the fund: “offers new opportunities to European investors interested in gaining access to the returns generated by energy infrastructure in the US”.
He added: “US energy infrastructure is a very high growth area, and with European listed exposures to the sector still limited… we believe that the growth of the industry, the favourable tax treatment of the underlying assets, and competitive pricing will appeal to European investors in the same way it has to investors in the US.”
The US Energy Infrastructure MLP GO UCITS ETF is listed on the London Stock Exchange and the Deutsche Boerse and tracks the Solactive US Energy Infrastructure MLP Index TR.
The top components of the index include:
- Targa Resources Partners, an independent midstream energy company that focuses on gathering, compressing, treating, processing and selling of natural gas and crude oil;
- Tesoro Logisitics, a fee-based MLP formed by Tesoro Corporation in 2011 to “own, operate, develop and acquire crude oil and refined products logistics assets”;
- Enbridge Energy Partners, which operates, it says, the world’s “longest, most sophisticated crude oil and liquids transportation system”, and is also involved in the generation and distribution of energy;
- TC Pipelines, which has interests in over 5,560 miles of FERC regulated, interstate natural gas pipelines;
- Nustar Energy, which owns 8,643 miles of pipeline and 87 terminal and storage facilities that store and distribute crude oil, refined products.
