Oil prices have been on a wild ride in recent years, and investors trying to follow the bouncing ball have been whipsawed.
Amplify ETFs on Thursday rolled out an exchange-traded fund designed to hedge against mercurial oil price swings. The Amplify YieldShares Oil-Hedged MLP Income ETF (AMLX) that trades on the Bats ETF Marketplace is billed as the only master limited partnership-focused ETF to actively hedge its exposure to oil prices. AMLX is the fourth income-oriented ETF to launch on the Amplify YieldShares platform.
According to Amplify, AMLX seeks to own historically high-yielding oil and gas MLPs while hedging exposure to oil prices. The active oil price hedge aims to reduce MLP price volatility and correlation to oil price declines.
"Recent history has shown that oil price declines can have a significant impact on MLP share prices,” Christian Magoon, CEO of Amplify ETFs, said in a press statement.
The AMLX fund's expense ratio is 0.85 percent, and investors in the fund will be issued 1099 tax forms rather than K-1 forms.
Amplify ETFs is sponsored by Amplify Investments, which also sponsors the YieldShares suite of ETFs.