The Global X MLP ETF (NYSEARCA:MLPA) offers exposure to energy infrastructure through master limited partnerships and delivers an extremely high 7.2% dividend yield today. The The Global X MLP ETF generates this income by holding equity positions in MLPs, which are pass-through entities that distribute most of their cash flow to unit holders.
While these distributions are very similar to dividends, they are treated differently for accounting and tax purposes. Often, the income from MLPs can be overly complicated to own in a retirement fund, for example. And that’s just one of the many interesting benefits of the Global X MLP ETF. Users benefit from the high distribution of MLPs (which are paid into the ETF), while investors receive dividends and avoid many of the complicating downsides. Neat.
Evaluating the Top Holdings
MLPA concentrates 58% of its portfolio in five energy infrastructure companies. Distribution safety varies across these positions.
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