Yorkville launches commodity-focused Yorkville High Income MLP ETF

Mar 13th, 2012 | By | Category: Alternatives / Multi-Asset

US-based Yorkville ETF Advisors has announced the launch of the Yorkville High Income MLP ETF (NYSE: YMLP), the first exchange-traded fund to deliver targeted exposure to high-income, commodity-based master limited partnerships (MLPs).

Yorkville launches commodity-based Yorkville High Income MLP ETF

Yorkville Capital Advisors has launched the Yorkville High Income MLP ETF, an ETF tracking commodity-focused high income MLPs.

MLPs are valued for their low correlation with other asset classes, high income, tax efficiency and inflation protection.

According to Yorkville Capital Management, YMLP was developed to capture the investment opportunity in commodity-sector MLPs, which historically have provided higher yields and faster distribution growth than the more popular infrastructure sector.

“YMLP shatters today’s MLP ETF mould by intentionally focusing on the untapped commodity sectors of the MLP asset class, due to their favourable income characteristics,” asserts Darren Schuringa, CFA, Managing Partner at Yorkville ETF Advisors.

“The Yorkville High Income MLP ETF (YMLP) is designed to track the Solactive High Income MLP Index, which strives to deliver high income and growth of income. We are pleased that YMLP delivers on our commitment to provide investment strategy-based ETFs.”

The Solactive High Income MLP Index tracked by YMLP is a rules-based index that applies a multi-factor selection model to the MLP universe. Analysed factors include coverage ratio of distributions, distribution growth and size of distributions. A select group of MLPs that are deemed to be most favourable across all three factors become index constituents.

These constituents fall primarily in the commodity MLP sector, which has historically exhibited more favourable distribution characteristics and similar risk-adjusted returns when compared to infrastructure MLPs.

The  index consists of  MLPs operating with one of the following as a substantial business segment: exploration and production of oil and/or natural gas; sale, distribution and retail marketing of propane and other natural gas liquids; marine transportation of one or more of the following: crude oil, dry bulk, refined products, liquefied natural gas, and other commodities; direct mining, production and marketing of natural resources, including  timber, fertilisers, coal and other minerals, and royalty trusts.

As of February 10, 2012, the market capitalisations of the index components ranged from approximately $500 million to approximately $7 billion.

The Solactive High Income MLP Index is published and maintained by Structured Solutions AG. Exchange Traded Concepts will serve as investment adviser to YMLP, while Yorkville ETF Advisors and Index Management Solutions will serve as sub-advisers.

The fund trades on NYSE Arca and has a total expense ratio (TER) of 0.82%.

Tags: ,

Leave a Comment