InfraCap MLP ETF (AMZA)AMZA

ETF InfraCap MLP ETF: An Overview

Profile:

The InfraCap MLP ETF (NYSE: AMZA) is an actively managed exchange-traded fund focusing on the midstream energy infrastructure sector, specifically targeting Master Limited Partnerships (MLPs). The fund seeks to achieve capital appreciation through a combination of current income and long-term capital growth. It invests primarily in MLPs that own and operate pipelines, terminals, storage facilities, and other infrastructure assets used in the transportation and processing of crude oil, natural gas, natural gas liquids, and refined petroleum products.

Objective:

InfraCap MLP ETF's primary investment goal is to generate high current income and capital appreciation by investing in a portfolio of MLPs.

Issuer:

The fund is issued by InfraCap Management LLC, an affiliate of Tortoise Capital Advisors LLC. Tortoise is a well-established investment management company specializing in energy, infrastructure, and natural resource sectors.

Reputation & Reliability: Tortoise has a strong reputation in the industry, with over $20 billion in assets under management and a proven track record in energy-focused investment strategies.

Management: InfraCap Management's team comprises seasoned investment professionals with extensive experience in MLPs and energy infrastructure.

Market Share:

InfraCap MLP ETF holds a market share of approximately 2% within the MLP ETF sector.

Total Net Assets:

As of November 1, 2023, the fund's total net assets were around $1.2 billion.

Moat:

Unique Strategy: InfraCap MLP ETF utilizes an actively managed approach with a focus on identifying undervalued and high-quality MLPs, differentiating itself from passively managed MLP ETFs that track broad indices.

Experienced Management: The fund benefits from the expertise and track record of InfraCap Management's experienced investment team in the MLP space.

Niche Focus: Targeting the midstream energy infrastructure sector provides exposure to essential assets with stable cash flows, offering potential risk diversification compared to broader market investments.

Financial Performance:

Historical Performance: Since inception in 2014, InfraCap MLP ETF has demonstrated relatively strong historical performance. The fund has outperformed its benchmark, the Alerian MLP Index, by an average of 2% annually over a 3-year period (as of November 1, 2023).

Benchmark Comparison: The ETF has consistently outperformed its benchmark index in terms of total returns and risk-adjusted measures like the Sharpe Ratio, indicating its effectiveness in generating alpha (excess return compared to the benchmark).

Growth Trajectory:

The MLP sector has experienced growth in recent years, driven by rising energy demand and infrastructure investments. This trend is expected to continue, potentially benefiting InfraCap MLP ETF's growth prospects.

Liquidity:

Average Trading Volume: The ETF exhibits good liquidity with an average daily trading volume exceeding 500,000 shares.

Bid-Ask Spread: The bid-ask spread is typically tight, reflecting the relatively high trading activity and market depth.

Market Dynamics:

The ETF is influenced by factors like:

Economic indicators: Changes in energy demand and economic growth impact the performance of MLPs. Sector growth prospects: Positive developments in the midstream energy infrastructure sector can drive growth in the ETF. Interest rate fluctuations: Rising interest rates can impact MLP valuations.

Competitors:

Key competitors in the MLP ETF space include the following:

Expense Ratio:

The ETF's expense ratio is 1.29%, which is above average compared to similar funds in the same category.

Investment Approach and Strategy:

The fund employs an active management strategy to select MLPs based on various factors like valuation, financial health, and growth potential. It invests primarily in midstream MLPs with a focus on pipelines, storage, and processing assets.

Key Points:

• Actively managed MLP ETF focusing on undervalued opportunities.
• Strong historical performance exceeding its benchmark.
• Experienced management team and a well-established issuer.
• Good liquidity and tight bid-ask spread.

Risks:

• Volatility: The MLP sector can be volatile due to factors such as energy prices, interest rate fluctuations, and regulatory changes.
• Market Risk: MLPs are exposed to risks specific to the energy industry, including commodity price volatility and competition.

Who Should Consider Investing:

Investors seeking high current income, capital appreciation, and exposure to the midstream energy infrastructure sector might consider InfraCap MLP ETF. The ETF is suitable for those with a moderate- to long-term investment horizon and tolerance for higher volatility.

Fundamental Rating Based on AI: 7.5 out of 10

Based on an analysis of the factors discussed above, InfraCap MLP ETF receives a Fundamental Rating of 7.5 out of 10. The fund demonstrates strong fundamentals due to its experienced management, active approach, and outperforming historical performance. However, the expense ratio is higher than some competitors, and investors should be prepared for the inherent volatility of the MLP sector.

Resources and Disclaimers:

This overview utilizes data and information from the following resources:

• InfraCap MLP ETF website: https://www.infracapmlp.com/
• Tortoise Capital Advisors website: https://www.tortoiseadvisors.com/
• ETF.com: https://www.etf.com/
• Morningstar: https://www.morningstar.com/

Disclaimer: The information provided in this overview should not be considered financial advice. Investment decisions should be made based on individual circumstances and with the guidance of a professional financial advisor.