Earlier this month, Global X expanded its lineup of niche strategies with the launch of the cheapest MLP exchange-traded fund yet: the MLP & Energy Infrastructure ETF (MLPX).

The new ETF expands the firm’s reach in the MLP space, which continues to hold tremendous appeal among yield-hungry investors. MLPX boasts being the cheapest offering in the MLPs ETFdb Category, featuring a price tag of 0.45% compared to the category average of 0.80%. The Global X MLP ETF (MLPA) also sports a 0.45% expense fee, but there is an important distinction between them.

The new MLPX is structured under the Investment Company Act of 1940, and as such only about a quarter of its total holdings are actually master limited partnerships––the majority are corporations that operate in the energy infrastructure industry.

By comparison, MLPA is structured as a C-Corp., and ends up costing more than advertised because of corporate taxes that are common in MLP ETFs. Again, the distinguishing feature here is that MLPA is comprised entirely of MLPs, whereas MLPX is a blend of actual corporations and some master limited partnerships.

From a portfolio composition perspective, MLPX holds 35 securities in the midstream energy infrastructure industry, featuring allocations to well-known bellwethers including Enbridge Inc., Transcanada Corp., and Kinder Morgan.

MLPX may boast the reputation as the “cheapest,” but it will still face very stiff competition from some of the “biggest” players in the MLP space, including:

▪ ALPS Alerian MLP ETF (AMLP), with $6.7 billion in assets under management

▪ JP Morgan Alerian MLP Index ETN (AMJ), with $5.9 billion in AUM

▪ UBS E-TRACS Alerian MLP Infrastructure Index ETN (MLPI), with $1.2 billion in AUM


Stoyan Bojinov writes for ETFdb, which offers a comprehensive and original ETF database and analytical consulting services for advisors and investors, as well as a free newsletter. Learn more about their services by visiting ETFdb.com.  Disclosure: the author had no positions in the securities named in this article at the time of writing.