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Alerian makes European UCITS ETF debut on HANetf platform


Alerian, a world leader in North American energy infrastructure and MLP market research and classification, is to make its UCITS ETF debut via the HANetf white-label platform with The Alerian Midstream Energy Dividend UCITS ETF (MMLP).The Irish-domiciled ETF, the Alerian Midstream Energy Dividend UCITS ETF (MMLP) is benchmarked to the Alerian Midstream Energy Dividend Index (AEDW) and will list on London Stock Exchange later this month.

US-based Alerian is the world leader in North American energy infrastructure indexing and research, pioneering how the MLP asset class is measured and creating the most widely used real-time benchmark for midstream MLPs – the Alerian MLP Index. As of 30 June, 2020, Alerian had a 75.8 per cent AuM market share for US-listed passive MLP exchange traded products.
Midstream energy infrastructure companies, including MLPs and C-corporations, generate fees by transporting, processing, and storing oil, natural gas and natural gas liquids, driving stable cash flows. The midstream sector has attracted investors due to its high income-yield characteristics, particularly among MLPs.
With a historic 5 year average yield of 7.25 per cent for the Alerian Midstream Energy Dividend Index, which MMLP tracks, midstream energy infrastructure  compares favorably to infrastructure and energy assets as well as other income strategies while often performing more defensively during periods of energy price declines. The current yield of the Alerian Midstream Energy Dividend Index was 10.36 per cent as of 30 June. This compares favourably to the FTSE 100 TR Index which has a current yield of 4.42 per cent. As of 30 June, companies with investment grade credit ratings represented 82.2 per cent of the index by weighting. Past performance is no guarantee of future performance. When you trade ETFs, your capital is at risk.
MMLP also addresses a significant gap in mainstream US equity holdings as MLPs are not included in broad US equity market indexes and midstream corporations only represent a small portion of major US equity indices. The inclusion of Canadian midstream corporations provides an added layer of diversification and defensiveness. The launch of MMLP offers a rare gateway for European investors into the North American midstream market via a diversified, rules-based, dividend-weighted index strategy from the leaders in energy infrastructure and MLP indexing and research, Alerian.
MMLP represents a significant step forward from first generation MLP ETFs that tended to track end-of-day market cap weighted indices or capture only a narrow slice of the overall midstream energy market. MMLP has improved on this approach by tracking a real-time dividend-weighted index that contains over 30 constituents – including MLPs, US corporations, and Canadian corporations – providing broad midstream exposure and diversification.
“The launch of MMLP demonstrates European investors’ interest in exposure to North American midstream energy infrastructure,” says David LaValle, CEO at Alerian. “We are excited about our partnership with HANetf and our joint innovation to answer investors’ call for yield and income,” says LaValle.
Hector McNeil co-CEO of HANetf says: “We are excited to bring MMLP to European investors who are in desperate need of more high-yielding and stable income streams. MMLP is the first and currently only UCITS ETF that embeds the expertise, coverage and classification of the world leader in this sector – Alerian. Launches like this illustrate why HANetf was created – to offer real value-added investment solutions in a transparent and tradable format.

“The North American energy infrastructure market represents a favourable investment opportunity. With the onset of the coronavirus crisis and the recent collapse in energy prices to levels never seen before, midstream energy companies have been trading at historically big discounts. With the expectation that the global economy will gradually lift lockdown restrictions and reopen for business, and as shale production and energy demand recover to pre-crisis levels, midstream energy companies offer an attractive risk-return opportunity to investors. MMLP will be an excellent way to invest in that opportunity.”

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