Frankfurt-based index provider Solactive AG has launched the Solactive US Energy Infrastructure MLP Index, a new index designed to track infrastructure MLPs listed on a regulated US stock exchange, as opposed to commodity MLPs.
The firm said that historically infrastructure MLPs have outperformed commodity MLPs on both an absolute and risk-adjusted basis due to their more stable toll-road business models. Solactive’s US Energy Infrastructure MLP Index has been licensed to ETF Securities to be used as the underlying of the first ETF in Europe on infrastructure MLPs, the US Energy Infrastructure MLP GO UCITS ETF listed yesterday on the London Stock Exchange and on Deutsche Börse (Xetra) by ETF Securities.
“We already calculate several equity MLP indices and we also launched earlier this year the first index to offer exposure to MLPs via their bonds,” said Henning Kahre, head of the equity team at Solactive. “There has clearly been a rising interest for MLPs over the past few years.”
To be eligible for inclusion in the index, a stock must have a market capitalisation of €500m or above, an average daily traded value of €4m or above and at least one distribution payout to unit holders at the time of both the current and previous selections.
The new gauge comprises 25 components, weighted 4% each. Published in USD, the index is available in price return and total return versions. The index is rebalanced twice a year, on the last business days of March and September.
Solactive said that there are currently 22 ETFs in the US focused on MLPs with a total amount of $19bn in assets under management.